MILLENNIUM CHEMICALS INC, DEF 14A, 1998-04-10

MILLENNIUM CHEMICALS INC
DEF 14A, 1998-04-10
PLASTIC MATERIALS, SYNTH RESINS & NONVULCAN ELASTOMERS

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Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

MILLENNIUM CHEMICALS INC.
.................................................................
(Name of Registrant as Specified In Its Charter)

.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction
applies:

............................................................

(2) Aggregate number of securities to which transaction
applies:

.......................................................

(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):

.......................................................

(4) Proposed maximum aggregate value of transaction:

.......................................................

(5) Total fee paid:

.......................................................

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

.......................................................

(2) Form, Schedule or Registration Statement No.:

.......................................................

(3) Filing Party:

.......................................................

(4) Date Filed:

.......................................................

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[Logo] [Logo]

230 Half Mile Road
P.O. Box 7015
Red Bank, New Jersey 07701
Tel: (732) 933-5000 Fax: (732) 933-5200
Laporte Road
Stallingborough, Grimsby
North East Lincolnshire DN40 2PR
England
Tel: 0345 662663

April 8, 1998

Dear Fellow Shareholder:

It is my pleasure to invite you to attend the 1998 Annual Meeting of
Shareholders of Millennium Chemicals Inc. This meeting will be held on Friday,
May 15, 1998, at the Sheraton Eatontown Hotel and Conference Center in
Eatontown, New Jersey, beginning at 10:00 a.m. The notice of Annual Meeting and
the Proxy Statement accompanying this letter describe the formal business to be
acted upon by the shareholders at the meeting. The meeting will also feature a
report on the company's performance and on our vision for the future.

Regardless of the number of shares you hold, it is important that your
shares be represented at the meeting. EVEN IF YOU PLAN TO ATTEND THE MEETING,
PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY CARD AS SOON AS POSSIBLE.
Alternatively, certain shareholders can vote electronically by telephone or, in
certain cases, through the Internet. If you are entitled to vote electronically,
your proxy card or voting instruction card will include instructions telling you
how to vote electronically. If you attend the meeting and wish to vote your
shares in person, you may revoke your proxy.

For your convenience, a map showing the location of the Annual Meeting is
on the inside back cover of this Proxy Statement. I look forward to seeing you
at the Annual Meeting.

WILLIAM M. LANDUYT

WILLIAM M. LANDUYT
Chairman and Chief
Executive Officer

Web Address http://www.millenniumchem.com
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[Logo]

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 1998
------------------------

Notice is hereby given that the 1998 Annual Meeting of Shareholders (the
'Annual Meeting') of Millennium Chemicals Inc., a Delaware corporation (the
'Company'), will be held at the Sheraton Eatontown Hotel and Conference Center,
Route 35 and 6 Industrial Way East, Eatontown, New Jersey, on Friday, May 15,
1998, beginning at 10:00 a.m., local time, for the following purposes:

1. To elect three directors to serve until the Annual Meeting of
Shareholders in 2001 and until their successors are duly elected
and qualified;

2. To ratify the appointment of Price Waterhouse LLP as the Company's
independent accountants for 1998; and

3. To consider any other matters that may properly come before the
Annual Meeting.

Only holders of record of the Company's Common Stock, par value $.01 per
share, at the close of business on April 2, 1998, will be entitled to notice of
and to vote at the Annual Meeting and any postponement or adjournment thereof.

By Order of the Board of Directors,

GEORGE H. HEMPSTEAD, III
Senior Vice President -- Law and
Administration
and Secretary

April 8, 1998

EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD OR VOTE ELECTRONICALLY.

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[LOGO]

------------------------
PROXY STATEMENT
------------------------

This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Millennium Chemicals Inc., a Delaware corporation (the
'Company'), of proxies for use at the Annual Meeting of Shareholders of the
Company (the 'Annual Meeting'), to be held at the Sheraton Eatontown Hotel and
Conference Center, Route 35 and 6 Industrial Way East, Eatontown, New Jersey, on
Friday, May 15, 1998, at 10:00 a.m., local time, and at any and all
postponements or adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting.

This Proxy Statement, the Notice of Annual Meeting and the accompanying
proxy card are first being mailed to shareholders on or about April 10, 1998.

VOTING

Only shareholders of record at the close of business on April 2, 1998 (the
'Record Date'), are entitled to notice of the Annual Meeting and to vote the
shares of common stock, par value $.01 per share, of the Company (the 'Common
Stock'), held by them on that date at the Annual Meeting or any postponement or
adjournment thereof. Each outstanding share entitles its holder to cast one vote
on each matter to be voted upon at the Annual Meeting. As of the Record Date,
77,375,844 shares of Common Stock were outstanding.

The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the shares of Common Stock outstanding on the Record Date will
constitute a quorum. The affirmative vote of a plurality of the votes cast at
the Annual Meeting in person or by proxy is required for the election of
directors. The approval of any other proposal to be considered at the Annual
Meeting requires the affirmative vote of the holders of a majority of the shares
present at the Annual Meeting in person or by proxy. Both abstentions and broker
non-votes will count toward a quorum. Abstentions with respect to a given
proposal (other than the election of directors) will be counted as 'against' the
proposal. Broker non-votes with respect to a given proposal will not be counted
as either 'for' or 'against' it, but will reduce the number of shares needed for
a majority decision.

Registered shareholders (shareholders whose shares are registered in their
own name) may vote by telephone by following the instructions included with
their proxy/voting instruction cards. Shareholders who hold their shares in
'street name' (i.e., through a broker, bank or other nominee) may vote
electronically if their proxy/voting instruction card includes instructions
regarding electronic voting. 'Street name' shareholders who have questions
regarding electronic voting (either by telephone or though the Internet) should
contact their broker, bank or other nominee. Shareholders who vote
electronically, either by telephone or through the Internet, should NOT return
their proxy/voting instruction cards.

Participants in the Millennium Chemicals Savings and Investment Plan; the
Hanson North America Retirement, Savings & Investment Plan; The Peabody Holding
Company, Inc. Savings and Long Term Investment Plan; Suburban Propane Retirement
Savings and Investment Plan and The Henkel Corporation Investment Plan (the
'Henkel Plan') may vote shares of Common Stock allocated to them under such
plans by instructing the relevant plan trustee either by mail or by telephone as
indicated on the Proxy/Authorization Card mailed to such participants. Such
instructions must be received prior to 3:00 p.m. (East Coast time) on May 12,
1998. If proper instructions are not received by such time, the relevant plan
trustee will vote shares in the same proportion that it votes shares for which
it received timely instruction. Notwithstanding the above, if instructions are
not timely received from participants in the Henkel Plan, the trustee for the
Henkel Plan will not vote such shares.

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OWNERSHIP OF COMMON STOCK

CERTAIN BENEFICIAL OWNERS

The following are the only persons known by the Company as of April 2,
1998, to own beneficially more than 5% of the outstanding Common Stock as of the
Record Date.

<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF PERCENT
OF BENEFICIAL OWNER SHARES OF CLASS
- ---------------------------------------------------------------------------- --------- --------
<S> <C> <C>
Barrow, Hanley, Mewhinney & Strauss, Inc. .................................. 8,369,181(1) 10.8
One McKinney Plaza
3232 McKinney Avenue, 15th Floor
Dallas, Texas 75204-2429
The Capital Group Companies, Inc. .......................................... 7,860,100(2) 10.2
333 South Hope Street
Los Angeles, California 90071
</TABLE>

- ------------

(1) Based on a Schedule 13G filed with the Securities and Exchange Commission
('SEC') on February 12, 1998, Barrow, Hanley, Mewhinney & Strauss, Inc. has
sole dispositive power over 8,369,181 shares, sole voting power over
1,428,484 shares and shared voting power over 6,940,687 shares.

(2) Based on a Schedule 13G dated February 10, 1998, filed with the SEC, The
Capital Group Companies, Inc. ('Capital Group') and its wholly owned
subsidiary Capital Resource and Management Company ('Capital Resource') have
sole dispositive power over 7,860,100 shares. Capital Group is the parent
holding company of a group of investment management companies (including
Capital Resource) that provide investment advisory services to clients.

DIRECTORS AND EXECUTIVE OFFICERS

The following table, which is based upon information provided to the
Company, sets forth the beneficial ownership of Common Stock, as of March 20,
1998, by each of the directors, each of the executive officers named in the
Summary Compensation Table included under 'Executive Compensation' or who serve
on the Company's Operations Committee and all directors and executive officers
as a group:

<TABLE>
<CAPTION>
NUMBER OF SHARES % OF
BENEFICIALLY SHARES
NAME OWNED OUTSTANDING
- --------------------------------------------------------------------- ---------------- -----------
<S> <C> <C>
William M. Landuyt................................................... 556,499(a) *
Robert E. Lee........................................................ 376,957(b) *
Lord Baker........................................................... 1,424(c) *
Worley H. Clark, Jr.................................................. 1,495(c) *
Martin D. Ginsburg................................................... 1,353(c) *
Lord Glenarthur...................................................... 1,566(c) *
David J. P. Meachin.................................................. 1,353(c) *
Martin G. Taylor..................................................... 9,924(c) *
Peter P. Hanik....................................................... 31,471(d) *
George H. Hempstead, III............................................. 260,950(e) *
Richard A. Lamond.................................................... 23,545(f) *
John E. Lushefski.................................................... 251,082(g) *
George W. Robbins.................................................... 240,934(h) *
Ronald H. Yocum...................................................... 118,944(i) *
All directors and executive officers as a group (19 persons,
including the foregoing, other than Dr. Yocum, who has retired).... 2,058,766 2.7%
</TABLE>

- ------------

* Represents less than 1%.

(footnotes continued on next page)

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(footnotes continued from previous page)

(a) Includes 448,053 shares of restricted Common Stock awarded under the
Company's Long Term Stock Incentive Plan (the 'Stock Incentive Plan'), of
which 336,040 are subject to vesting pursuant to performance criteria and
the remainder are subject to time vesting; 7,171 shares of Common Stock
held in the Company's 401(k) plan for Mr. Landuyt's account as of January
31, 1998; 80,974 shares of Common Stock held in the Company's Salary and
Bonus Deferral Plan, of which 20,748 shares are subject to forfeiture in
accordance with the provisions of the Company's Annual Performance
Incentive Plan (the 'Annual Performance Plan'); 885 shares of Common Stock
owned by Mr. Landuyt's spouse, as to which Mr. Landuyt disclaims beneficial
ownership; and 2,890 shares of Common Stock held in two trusts for Mr.
Landuyt's children, as to which Mr. Landuyt disclaims beneficial ownership.

(b) Includes 313,637 shares of restricted Common Stock awarded under the Stock
Incentive Plan, of which 235,228 are subject to vesting pursuant to
performance criteria and the remainder are subject to time vesting; 6,729
shares of Common Stock held in the Company's 401(k) plan for Mr. Lee's
account as of January 31, 1998; 45,451 shares of Common Stock held in the
Company's Salary and Bonus Deferral Plan, all of which are vested and 9
shares owned directly by members of Mr. Lee's immediate family, as to which
Mr. Lee disclaims beneficial ownership.

(c) Includes 682 shares issued on October 1, 1997, and 671 shares issued on
October 30, 1996, under the Stock Incentive Plan in partial payment of
annual Directors' fees.

(d) Includes 13,441 shares of restricted Common Stock awarded on October 23,
1997 under the Stock Incentive Plan, of which 10,081 are subject to vesting
pursuant to performance criteria and the remainder are subject to time
vesting; 4,012 shares of Common Stock held in the Company's 401(k) plan for
Mr. Hanik's account as of January 31, 1998; and 3,309 shares of Common
Stock held in the Company's Salary and Bonus Deferral Plan, all of which
are vested. The shares of restricted Common Stock awarded to Mr. Hanik in
1996 under the Stock Incentive Plan vested automatically pursuant to their
terms on December 1, 1997, as a result of the closing on such date of the
Equistar Chemicals, LP ('Equistar') joint venture transaction.

(e) Includes 224,026 shares of restricted Common Stock awarded under the Stock
Incentive Plan, of which 168,020 are subject to vesting pursuant to
performance criteria and the remainder are subject to time vesting; 9,361
shares of Common Stock held in the Company's 401(k) plan for Mr.
Hempstead's account as of January 31, 1998; and 21,513 shares of Common
Stock held in the Company's Salary and Bonus Deferral Plan, of which 12,934
shares are subject to forfeiture in accordance with the provisions of the
Annual Performance Plan and the Hanson Industries 1996 Long Term Incentive
Plan.

(f) Includes 17,922 shares of restricted Common Stock awarded under the Stock
Incentive Plan, of which 13,442 are subject to vesting pursuant to
performance criteria and the remainder are subject to time vesting; 5,611
shares of Common Stock held in the Company's 401(k) plan for Mr. Lamond's
account as of January 31, 1998; and 12 shares of Common Stock owned by Mr.
Lamond's son, as to which Mr. Lamond disclaims beneficial ownership.

(g) Includes 224,026 shares of restricted Common Stock awarded under the Stock
Incentive Plan, of which 168,020 are subject to vesting pursuant to
performance criteria and the remainder are subject to time vesting; 12,504
shares of Common Stock held in the Company's 401(k) plan for Mr.
Lushefski's account as of January 31, 1998; and 11,153 shares of Common
Stock held in the Company's Salary and Bonus Deferral Plan, of which 6,423
shares are subject to forfeiture in accordance with the provisions of the
Annual Performance Plan.

(h) Includes 224,026 shares of restricted Common Stock awarded under the Stock
Incentive Plan, of which 168,020 are subject to vesting pursuant to
performance criteria and the remainder are subject to time vesting; 14,041
shares of Common Stock held in the Company's 401(k) plan for Mr. Robbins'
account as of January 31, 1998; 1,549 shares of Common Stock held in the
Company's

(footnotes continued on next page)

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(footnotes continued from previous page)
Salary and Bonus Deferral Plan, all of which are vested; and 71 shares held
in a trust account in a relative's name of which he is the trustee and as
to which he disclaims beneficial ownership.

(i) Includes 7,008 shares of Common Stock held in the Company's 401(k) plan for
Dr. Yocum's account as of January 31, 1998, and 11,555 shares of Common
Stock held in the Company's Salary and Bonus Deferral Plan, all of which
are vested. The shares of restricted Common Stock awarded to Dr. Yocum in
1996 under the Stock Incentive Plan vested automatically pursuant to their
terms on December 1, 1997, as a result of the closing on such date of the
Equistar joint venture transaction.

CORPORATE GOVERNANCE

The Company has been publicly owned since its demerger (i.e., spin-off)
from Hanson PLC ('Hanson') on October 1, 1996 (the 'Demerger'). Hanson effected
the Demerger by paying to its shareholders a dividend consisting of all of the
then-outstanding shares of Common Stock.

Although incorporated in Delaware, the Company is, and will be, centrally
managed and controlled in the United Kingdom ('U.K.') until at least October 1,
2001, the fifth anniversary of the Demerger. During this period, the Company's
Board of Directors is, and will be, the medium through which strategic control
and policy-making powers are exercised, and Board meetings almost invariably
will be held in the U.K. These corporate governance arrangements are consistent
with an agreement entered into by the Company and Hanson in connection with the
Demerger. This agreement provides that, for such five-year period, the Company
will not take, or fail to take, any action that would result in a breach of, or
constitute non-compliance with, certain representations and undertakings made by
Hanson to the U.K. Inland Revenue in order to obtain clearance as to the
tax-free treatment of the Demerger dividend for Hanson and its shareholders (the
Company's initial public shareholders) for U.K. tax purposes.

There are no restrictions on the location of the Company's shareholder
meetings, which (as in the case of this Annual Meeting) may be held in the U.S.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company's Board of Directors has established five standing committees:
an Audit Committee, a Compensation Committee, an Executive Committee, a
Nominations Committee and a Public Affairs Committee. Directors who are also
officers or employees of the Company are not permitted to serve on the Audit,
Compensation or Nominations Committees. The functions of these standing
committees are as follows:

Audit Committee. The Audit Committee is responsible for matters
relating to accounting policies and practices, financial reporting and
internal controls. It recommends to the Company's Board the appointment of
a firm of independent accountants to audit the Company's financial
statements. The Audit Committee also reviews with representatives of the
independent accountants the scope of the audit of the Company's financial
statements, results of audits, audit costs and recommendations with respect
to internal controls and financial matters. It also reviews non-audit
services rendered by the Company's independent accountants and periodically
meets with and receives reports from the Company's principal financial and
accounting officers. The Committee currently consists of Lord Baker, David
J. P. Meachin and Martin G. Taylor (Chairman) and met three times in 1997.

Compensation Committee. The Compensation Committee sets the
compensation of all executive officers, establishes policies concerning
stock ownership by executive officers and administers the Company's
executive compensation plans and programs, including the Stock Incentive
Plan and the Annual Performance Plan (including approving performance
targets and awards under such plans). It also reviews the competitiveness
of the Company's management and director compensation and benefit programs
and reviews principal employee relations policies and procedures. All
members of the Compensation Committee are intended to be 'Non-Employee
Directors' within the meaning of Rule 16b-3 under the Securities Exchange
Act of 1934, as

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amended (the 'Exchange Act'), and 'outside directors' within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
'Code'). The Committee currently consists of Worley H. Clark, Jr.
(Chairman), Lord Glenarthur and David J. P. Meachin and met five times in
1997.

Executive Committee. The Executive Committee has the authority to act
for the full Board between regularly-scheduled Board meetings with respect
to such matters as may be lawfully delegated by the Board under Delaware
law. The Committee currently consists of Lord Baker, Lord Glenarthur,
William M. Landuyt (Chairman) and Martin G. Taylor and met once in 1997.

Nominations Committee. The Nominations Committee has authority to
nominate directors to fill vacancies on the Board and to nominate directors
to serve as members, including chairmen, of committees of the Board. The
duties of the Nominations Committee include determining the desirable
balance of expertise and composition of the Board, seeking out possible
candidates to fill positions on the Board, attracting such qualified
candidates to the Board, reviewing management's slate of directors to be
elected by shareholders at each annual meeting of shareholders and
recommending to the Board the inclusion of the slate in the Company's proxy
statements. The Nominations Committee will consider nominees recommended by
shareholders. Such recommendations should be submitted to the Secretary of
the Company at least 60 days prior to the date of the applicable annual
meeting and include certain information as required by the Company's
by-laws. The Committee currently consists of Lord Baker (Chairman), Martin
D. Ginsburg and Martin G. Taylor. The Committee met once in 1997.

Public Affairs Committee. The Public Affairs Committee reviews the
Company's policies and practices concerning health, safety and
environmental matters and provides strategic direction with respect to such
matters. The Committee is responsible for ensuring that effective risk and
crisis management procedures are in place and that there are adequate
procedures and checks and balances to promote ethical business behavior.
The Committee also provides oversight within the Company regarding work
force diversity and other such responsibility issues. The Committee
currently consists of Worley H. Clark, Jr., Martin D. Ginsburg (Chairman)
and Robert E. Lee and met twice during 1997.

DIRECTORS' REMUNERATION AND ATTENDANCE AT MEETINGS

Directors who are also full-time employees of the Company do not receive
additional compensation for their services as directors. Non-employee directors
received an annual cash retainer of $30,000 for the period from the Demerger to
September 30, 1997; are receiving a cash retainer of $45,000 for the period from
October 1, 1997, to September 30, 1998; and will receive a cash retainer of
$40,000 per annum commencing October 1, 1998. In addition, pursuant to the Stock
Incentive Plan, each non-employee director serving on October 31, 1996, was
automatically granted on such date 671 shares of Common Stock (the number
determined by dividing $15,000 by the average closing price of the Common Stock
during the 20 business days following the Demerger) and each non-employee
director serving on October 1, 1997, was automatically granted on such date 682
shares of Common Stock (the number determined by dividing $15,000 by the closing
price of the Common Stock on September 30, 1997). On October 1, 1998, and each
October 1 thereafter, each non-employee director serving on such date
automatically will be granted the number of shares of Common Stock determined by
dividing one-half of the annual cash retainer in effect on such date by the
closing price of the Common Stock on the business day immediately preceding such
date. Non-employee directors are reimbursed for all reasonable expenses incurred
in connection with Board and Committee meetings. The Company also pays the
premiums on directors' and officers' liability and travel accident insurance
policies for directors.

The Board held five meetings in 1997. All directors attended at least 75%
of the total number of meetings of the Board and the Committees on which they
served.

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BUSINESS TO BE ACTED UPON BY THE SHAREHOLDERS
ITEM 1 -- ELECTION OF DIRECTORS

The Company's Board of Directors is divided into three classes, with the
terms of office of the respective classes ending in successive years. The terms
of three directors expire at the Annual Meeting. The terms of the other five
directors continue after the Annual Meeting. The shareholders are being asked to
vote on the election of the three directors whose terms expire at the Annual
Meeting, to serve until the Annual Meeting of Shareholders in 2001 and until
their successors are duly elected and qualified. Set forth below is biographical
information concerning each nominee for re-election as a director at this Annual
Meeting, as well as each member of the Board of Directors who is continuing in
office.

All shares of Common Stock represented by valid proxies received pursuant
to this solicitation, and not revoked before they are exercised, will be voted
in the manner specified therein. If a proxy card is signed and returned but no
specification is made, the shares represented by proxy will be voted for the
election of the three directors identified below. If any nominee is unable to
serve (which is not anticipated), the persons designated as proxies will cast
votes for the remaining nominees and for such other persons as they may select.

THE NOMINEES HAVE BEEN RECOMMENDED TO THE COMPANY'S BOARD OF DIRECTORS BY
THE NOMINATIONS COMMITTEE OF THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE 'FOR' ELECTION OF THE THREE NOMINEES IDENTIFIED BELOW.

NOMINEES FOR ELECTION AS DIRECTORS
TERM EXPIRING AT THE 2001 ANNUAL MEETING

Lord Glenarthur, 53, has served as a Director of the Company since the
Demerger. He was an executive of Hanson between October 1989 and the Demerger,
including Deputy Chairman of Hanson Pacific Limited between March 1994 and
February 1998. Lord Glenarthur served as the U.K. Parliamentary Under-Secretary
of State at the Department of Health and Social Security from 1983 to 1985 and
at the Home Office from 1985 to 1986, as Minister of State for Scotland from
1986 to 1987, and as U.K. Minister of State for Foreign and Commonwealth Affairs
from 1987 to 1989. He was Chairman of St. Mary's Hospital NHS Trust from 1991 to
1998 and remains a Special Trustee of St. Mary's Hospital. He is Chairman of the
British Helicopter Advisory Board and the European Helicopter Association and is
a Council Member of The Air League. He is also a director of Whirlybird Services
Limited in the U.K.

Mr. Clark, 65, has served as a Director of the Company since the Demerger.
He was President and Chief Executive Officer of Nalco Chemical Company from 1982
until his retirement in 1994 and Chairman of Nalco Chemical Company from 1984
until such retirement. Mr. Clark serves on the Board of Directors of Merrill
Lynch & Co., Inc.; Bethlehem Steel Corporation; USG Corporation; NICOR, Inc.;
Ultramar Diamond Shamrock Corporation and Fort James Corporation. He is a
Trustee of The Rush Presbyterian-St. Luke's Medical Center and the Field Museum
of Natural History.

Mr. Lee, 41, has served as President and Chief Executive Officer of
Millennium Inorganic Chemicals Inc., a subsidiary of the Company, since June
1997. He served as President and Chief Operating Officer of the Company from the
Demerger until June 1997. He has served as a Director of the Company since the
Demerger. Mr. Lee was Director, Senior Vice President and Chief Operating
Officer of Hanson Industries (which managed the U.S. operations of Hanson before
the Demerger) from June 1995 until the Demerger, an Associate Director of Hanson
from 1992 until the Demerger, Vice President and Chief Financial Officer of
Hanson Industries from 1992 to June 1995, Vice President and Treasurer of Hanson
Industries from 1990 to 1992, and Treasurer of Hanson Industries from 1987 to
1990. He joined Hanson Industries in 1982.

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DIRECTORS CONTINUING IN OFFICE
TERM CONTINUES UNTIL THE 1999 ANNUAL MEETING

Mr. Landuyt, 42, has served as Chairman of the Board and Chief Executive
Officer of the Company since the Demerger. He has served as President of the
Company since June 1997. Mr. Landuyt was Director, President and Chief Executive
Officer of Hanson Industries from June 1995 until the Demerger, Director of
Hanson from 1992 until September 29, 1996, Finance Director of Hanson from 1992
to May 1995, and Vice President and Chief Financial Officer of Hanson Industries
from 1988 to 1992. He joined Hanson Industries in 1983.

Mr. Taylor, 63, has served as a Director of the Company since the Demerger.
He was an executive of Hanson from 1969 until his retirement in 1995, a Director
of Hanson between 1976 and 1995 and Vice Chairman of Hanson between 1988 and
1995. Mr. Taylor served as an executive of Dow Chemical Company (U.K.) from 1963
to 1969, as a director of UGI Plc from 1979 to 1982 and as a Director of The
Securities Association LTD from 1987 to 1990. He is a Director of National
Westminster Bank Plc and Vickers Plc, and Deputy Chairman of Charter plc.

TERM CONTINUES UNTIL THE 2000 ANNUAL MEETING

Lord Baker, 63, has served as a Director of the Company since the Demerger.
Lord Baker has been a Member of Parliament in the U.K. and serves as a member of
the Nominations and Communications Committees of Hanson's Board of Directors. He
served as U.K. Secretary of State for the Environment from 1985 to 1986, as U.K.
Secretary of State for Education and Science from 1986 to 1989, as Chairman of
the U.K. Conservative Party from 1989 to 1990 and as U.K. Secretary of State for
the Home Office from 1990 to 1992. He is a Director of Hanson and Waretek
Corporation and an adviser to Cable & Wireless Communications plc, ICL plc and
The Blackstone Group.

Professor Ginsburg, 65, has served as a Director of the Company since
October 8, 1996. He has been Professor of Law at Georgetown University Law
Center since 1980. Professor Ginsburg is of counsel to the law firm of Fried,
Frank, Harris, Shriver & Jacobson (a partnership including professional
corporations), which has provided legal services to the Company from time to
time.

Mr. Meachin, 57, has served as a Director of the Company since the
Demerger. Mr. Meachin has been Chairman, Chief Executive and founder of Cross
Border Enterprises, L.L.C., a private international merchant banking firm, since
its formation in 1991. He was a Managing Director in the Investment Banking
Division of Merrill Lynch & Co., Inc. from 1981 to 1991. Mr. Meachin is a
Director of The Spartek Emerging Opportunities of India Fund, Vice Chairman of
the University of Cape Town Fund in New York and a Director and past Chairman of
the British American Educational Foundation.

ITEM 2 -- RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS

The Board of Directors, upon the recommendation of the Audit Committee, has
appointed the firm of Price Waterhouse LLP as independent accountants to examine
and audit the Company's financial statements for 1998. Price Waterhouse LLP were
the Company's independent accountants for 1997. If the shareholders do not
ratify such appointment, it will be reconsidered by the Board. Representatives
of Price Waterhouse LLP are expected to be present at the Annual Meeting, will
have the opportunity to make a statement if they desire to do so and will be
available to respond to questions.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE 'FOR'
RATIFICATION OF SUCH APPOINTMENT.

EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors is comprised entirely
of independent, non-employee directors. This report sets forth the Compensation
Committee's policies governing compensation of the Company's executive officers,
including those named in the Summary Compensation Table, and the specific
relationship of corporate performance to that compensation. In

<PAGE>

<PAGE>
addition, this report discusses the Compensation Committee's role in
establishing the Chief Executive Officer's compensation for the past year.

COMPENSATION PHILOSOPHY

The Compensation Committee is responsible for establishing and
administering compensation policies, plans and programs for the officers and
employees of the Company and its subsidiaries. In fulfilling this
responsibility, the Compensation Committee's policy is to provide strong, direct
links among shareholder value, Company and individual performance, and executive
compensation, as well as to structure sound compensation programs that attract
and retain highly-qualified people. This is done in the context of a
compensation program that includes:

Base Salary. Base salary is intended to provide a stable annual cash
compensation at a level consistent with each employee's position and
contribution and which is competitive in the market with comparable
companies.

Annual Incentive Bonus. The Company's Annual Performance Incentive
Plan (the 'Annual Performance Plan') provides executives and other key
employees with the opportunity to receive cash bonuses each year based on
the performance of the Company and its subsidiaries as measured by
performance targets established at the beginning of each year by the
Compensation Committee within the framework of the criteria set forth in
the Annual Performance Plan. 'Value creation' performance targets based on
a cash-flow/return-on-investment formula were established by the
Compensation Committee to measure performance in 1997. The Annual
Performance Plan's economic value creation performance targets for 1998 are
based on Economic Value Added, or EVA'r'*, performance measures approved by
the Compensation Committee and developed by the Company's management in
conjunction with Stern Stewart & Co. These EVA targets are based on the
excess of net operating profit after cash taxes over the estimated total
cost of capital employed.

Long Term Incentive Compensation. The Company's Long Term Stock
Incentive Plan (the 'Stock Incentive Plan') provides equity-based
compensation to link each executive's compensation to the long-term success
of the Company and its subsidiaries, as measured by performance criteria
set forth in the plan. All outstanding awards are based on specific value
creation performance targets based either on a
cash-flow/return-on-investment formula or on EVA, as well as the Company's
Common Stock performance relative to the Standard & Poor's Chemical
Composite Index ('S&P Chemical Index').

Stock Ownership Guidelines. In order to align the interests of the
Company's management and shareholders, the Compensation Committee has
established guidelines for significant personal investment by management in
Common Stock, thus encouraging management to take actions that maximize
shareholder value.

The Compensation Committee seeks to ensure that the Chief Executive Officer
and other executive officers are compensated in a manner that is consistent with
the Company's compensation philosophy, that is competitive with comparable
companies when target levels of performance are achieved, and that is equitable
within the Company.

It is the Company's policy to position the base salary of the Company's
executives at or near the median levels of compensation for similar positions in
comparable companies. It is the Company's policy to position total compensation
(base salary plus incentive compensation) of the Company's executives at or near
the seventy-fifth percentile of compensation for similar positions in comparable
companies and, accordingly, incentive compensation will vary significantly
depending on results achieved against performance targets. The targeted levels
of compensation for the Company's executives are based in part on surveys of
comparable companies conducted by independent consultants. The companies
selected for comparison by the independent consultants include, among others,
commodity, intermediate and specialty chemical companies that compete with the
Company for executive talent. Although many of the companies selected for
comparison are included in the S&P

- ------------
*EVA'r' is a registered trademark of Stern Stewart & Co.

<PAGE>

<PAGE>
Chemical Index, the Company competes for executive talent with a broader group
of companies than those in such index. The Compensation Committee reviews the
Company's compensation programs annually to ensure that the Company's
compensation programs continue to be competitive at the desired levels within
the market.

BASE COMPENSATION

In December 1996, Messrs. Landuyt and Lee declined to be considered for any
increase in base salary for calendar year 1997. Other executive officers were
awarded base salary increases in 1997 following a review of individual
performance.

ANNUAL BONUS PLAN

Under the Company's Annual Performance Plan, the Compensation Committee
determines the executive officers and other key employees who are eligible to
receive bonuses under the plan, establishes the performance targets for such
bonuses and confirms actual performance against such targets.

On January 20, 1997, the Compensation Committee established the Annual
Performance Plan value creation performance targets for calendar year 1997 for
the Company or, in the case of employees of subsidiaries of the Company, the
value creation performance targets for the Company and/or the relevant Company
subsidiary (the 'value creation targets') based on a cash-flow/return-on-
investment formula. The Compensation Committee also selected the 1997
participants in the Annual Performance Plan and established the target bonus
award (expressed as a percentage of each participant's base salary (the
'reference award')) that could be earned by each participant upon attainment of
the value creation target. The actual bonus award earned by each participant for
1997 depended upon actual performance in 1997 compared to the value creation
target, and thus a participant could have earned a fraction of, or a multiple
of, his or her reference award. The Compensation Committee established the
following 1997 reference awards for the individuals named in the Summary
Compensation Table: Messrs. Landuyt and Lee -- 100% of base salary; and Messrs.
Hempstead, Lushefski and Yocum -- 75% of base salary.

Millennium is committed to maximizing shareholder value. During 1997, the
Common Stock increased in value, including reinvested dividends, by 36.1%,
compared to 21.6% for the S&P Chemical Index and 33.3% for the Standard & Poor's
500 Composite Stock Price Index (the 'S&P 500 Index'). Pro forma earnings from
operations before interest, taxes, depreciation and amortization ('EBITDA'),
including the Company's 43% share of Equistar's results and excluding one-time
items, rose substantially to $683 million from $559 million in 1996 (22%).
Operating income increased $166 million to $449 million in 1997, a 59% increase
from 1996. Net debt decreased $773 million (37%) from 1996 year-end levels. As a
result of these strong results, the Company generated economic value in 1997
under the cash-flow/return-on-investment formula substantially in excess of the
Company's targets. On January 22, 1998, the Compensation Committee compared the
Company's actual performance in 1997 against the value creation targets
established at the beginning of 1997 and determined that Messrs. Landuyt, Lee,
Hempstead and Lushefski had earned bonuses for 1997 equal to 272% of their
reference awards ($2,121,600, $1,332,800, $744,600 and $656,800, respectively)
and Dr. Yocum had earned a bonus equal to 301% of his reference award
($980,382).

When the Compensation Committee established the calendar year 1997 targets
on January 20, 1997, it required that any 1997 bonus award in excess of two
times a participant's reference award be deferred (the '1997 Deferred Amount')
and paid out in cash in three equal annual installments in February 1999, 2000
and 2001, subject to forfeiture if the participant is not employed by the
Company or one of its subsidiaries on the payment date, unless the participant's
employment is terminated due to death or disability, termination by the Company
without cause or termination by the participant with good reason. Subject to
certain limits set forth in the Annual Performance Plan, each 1997 Deferred
Amount will increase (between the date which the Deferred Amount is credited to
a participant under the plan and the actual payment date) by a measuring factor
equal to the prime rate set by Chase Manhattan Bank N.A. on the first business
day of each fiscal year during the deferral period minus two

<PAGE>

hundred basis points, compounded annually. Alternatively, each participant is
entitled to defer the 1997 Deferred Amount for a minimum of three years into
Common Stock purchased under the Company's Salary and Bonus Deferral Plan,
subject to forfeiture as discussed above. Messrs. Landuyt, Hempstead and
Lushefski elected to defer all of their 1997 Deferred Amount into Common Stock
under the Salary and Bonus Deferral Plan; and Messrs. Landuyt, Lee, Hempstead
and Lushefski elected to defer into Common Stock under the Salary and Bonus
Deferral Plan 100%, 100%, 40% and 25%, respectively, of the bonus amount not in
excess of two times the reference award. The Annual Performance Plan provides
that the entire award must be paid out upon a change in control (as defined) of
a participant's employing subsidiary and, accordingly, all of Dr. Yocum's 1997
bonus award became payable upon the closing of the Equistar joint venture. Dr.
Yocum elected to defer 25% of his 1997 bonus into Common Stock under the Salary
and Bonus Deferral Plan.

HANSON INDUSTRIES 1996 LONG TERM INCENTIVE PLAN

Following the Demerger, the Company continued in effect the Hanson
Industries 1996 Long Term Incentive Plan (the 'Hanson LTIP'), an unfunded
deferred compensation plan adopted by Hanson Industries in October 1995. The
targets established by Hanson in October 1995 for the Hanson LTIP were based on
the performance of the companies managed by Hanson Industries at that time. As a
result of the sale of Suburban Propane by Hanson in March 1996, the Demerger,
the Equistar joint venture and the sale of several other companies, these
targets were no longer applicable as performance targets for the continuing
businesses of the Company. The Company was advised by counsel that the Company
may not be entitled to deduct all or a portion of the awards paid to its five
top executives if the Company amended the targets. As a result, the Compensation
Committee determined on October 23, 1997, to terminate the Hanson LTIP, to
credit awards at specified percentages ranging from 20% to 100% of the target
awards established in October 1995, and to pay such credited awards in three
equal annual installments on December 15, 1998, 1999 and 2000, plus interest
thereon, subject to forfeiture provisions similar to those applicable to the
Annual Bonus Plan's 1997 Deferred Amount, as described above. Participants are
entitled to defer such credited awards for a minimum of three years into Common
Stock under the Company's Salary and Bonus Deferral Plan, subject to such
forfeiture provisions. Messrs. Lee, Hempstead and Lushefski and Dr. Yocum were
credited with awards equal to $294,000, $153,000, $139,500 and $184,500,
respectively. Mr. Hempstead elected to defer all of his award into Common Stock
under the Salary and Bonus Deferral Plan. Because the Hanson LTIP provides that
awards vest upon a change in control (as defined) of a participant's employing
subsidiary, Dr. Yocum's award vested upon the closing of the Equistar joint
venture. Because Mr. Landuyt was a Director of Hanson during Hanson's 1996
fiscal year, he was not a participant in the Hanson LTIP.

LONG TERM STOCK INCENTIVE PLAN

On October 8, 1996, the Compensation Committee awarded to the Chief
Executive Officer and 31 other executive officers and key employees, without
consideration (other than par value, as required by applicable law), an
aggregate of 2,184,256 shares of performance-based restricted stock
('performance-based stock awards') and 728,066 shares of time-vested restricted
stock. The value of the awards to the Chief Executive Officer and the other
'named executive officers' are included in the Summary Compensation Table.
Subsequent to October 8, 1996, the Compensation Committee has awarded an
aggregate of 154,475 performance-based stock awards and 51,492 shares of
time-vested restricted stock to 11 executive officers (not including any
executive named in the Compensation Table) and key employees who have been hired
or promoted since October 8, 1996. An aggregate of 470,456 performance-based
stock awards and 156,811 shares of time-vested restricted stock held by
employees of Millennium Petrochemicals (including 168,020 and 56,006 shares,
respectively, held by Dr. Yocum) vested automatically as a result of the
Equistar joint venture, which constituted a change in control (as defined) under
the Stock Incentive Plan for employees of Millennium Petrochemicals (but not for
employees of the Company or any subsidiary of the Company other than Millennium
Petrochemicals).

<PAGE>

The performance-based stock awards may be earned in three equal 25%
installments (i.e., 75% of the total initial award), based upon the level of
achievement of value creation performance goals and the Company's Common Stock
performance relative to the S&P Chemical Index, as established by the
Compensation Committee at the time of the grant, for the three-, four- and
five-year performance periods, respectively, commencing on January 1, 1997. The
awards of time-vested restricted stock vest in three equal installments (i.e.,
25% of the total initial award) on October 8, 1999, 2000 and 2001. Value
creation will be determined either pursuant to a cash-flow/return-on-investment
formula or on EVA. Performance relative to the S&P Chemical Index compares the
performance of the Company's Common Stock to the common stock performance of the
companies in the S&P Chemical Index over the relevant performance period,
including reinvestment of dividends. In the event the ultimate earned award for
any performance period, as measured by the value creation formula and Common
Stock performance targets, exceeds 100% of the targeted value represented by the
performance-based stock awards earned for such period, the Company will make a
cash award, outside the Stock Incentive Plan, equal to the excess value earned,
which will be paid at the same time and in the same percentages as such stock
vests.

The performance-based stock awards provide that, at the end of the relevant
performance period, 50% of the earned portion of the stock award will fully vest
and be released from additional vesting restrictions and the remainder will vest
in five equal annual installments commencing on the first anniversary of the end
of the relevant performance period, subject to forfeiture under certain
circumstances. If the executive is employed by the Company upon a change in
control (as defined), or if, during the 180-day period before a change in
control (the 'Pre-Change-in-Control Period'), the executive's employment is
terminated by the executive for good reason (as defined) or the executive had
his employment terminated by the Company without cause (as defined) or as a
result of his death or disability (as defined), all performance-based stock
awards and time-vested restricted stock awards then still subject to forfeiture
will immediately vest upon the change in control. The restricted stock awards
also provide that if the executive's employment with the Company is terminated
prior to a change in control and not during a Pre-Change-in-Control Period by
reason of his death or disability, at the time of such termination there shall
vest (i) the unvested shares of stock then subject to time vesting, (ii) any
earned unvested award for any completed performance period and, (iii) at the end
of the applicable performance period, a pro-rata portion of any earned award for
a performance period that has commenced but not yet ended on the date of such
termination; and if the executive's employment is terminated by the Company
without cause prior to a change in control and not during a
Pre-Change-in-Control Period, there shall vest (i) any earned unvested award for
any completed performance period, and (ii) at the end of the applicable
performance period, a pro-rata portion of any earned award for a performance
period that has commenced but not yet terminated on the date of such
termination.

The Company generally has analyzed the particular type of benefit or award
and the rationale for granting such benefit or award in deciding whether it will
seek to qualify the benefit or award as performance-based compensation under
Section 162(m) of the Code and expects to continue to do so in the future.
Amounts awarded under the Annual Performance Plan, as well as the
performance-based stock awards under the Stock Incentive Plan, are earned based
on the achievement of performance targets determined by the Compensation
Committee. It is intended that these performance-based awards will qualify for
the 'performance-based compensation' exception under Section 162(m) of the Code.

STOCK OWNERSHIP

In order to promote an ownership perspective on the part of the Company's
executive officers and management employees and to link the return realized by
management on their personal assets to the return realized by the Company's
shareholders, the Board of Directors and the Compensation Committee established
stock ownership guidelines (exclusive of the value of Common Stock which may be
earned under the Stock Incentive Plan) for the 28 executive officers and senior
management employees of the Company and its subsidiaries who hold restricted
stock awards under the Stock Incentive Plan. These executive officers and senior
managers are expected to achieve targeted

<PAGE>

ownership levels of Common Stock, ranging from a value of 75% of annual base
salary to 300% of annual base salary, within a five-year period. This target
would require holdings of Common Stock (in addition to Common Stock that may be
earned under the Stock Incentive Plan) aggregating more than $10.8 million,
based on 1997 base salary levels. As of March 20, 1998, the 28 executive
officers and senior managers owned shares of Common Stock with a market value at
such date in excess of $10.8 million (including shares purchased under the
Salary and Bonus Deferral Plan but not restricted Common Stock). The
Compensation Committee will review progress toward achievement of these
ownership guidelines on an annual basis. The table below shows the market value
of Common Stock owned by the members of the Company's Operations Committee
(including members of their immediate family) as of March 20, 1998 (including
shares purchased under the Salary and Bonus Deferral Plan but not restricted
Common Stock), as a percentage of their 1997 base salaries, and the targeted
ownership levels for these executives.

<TABLE>
<CAPTION>
REQUIRED OWNERSHIP MARKET VALUE OF
GOAL AS % OF COMMON STOCK OWNED
SALARY AS % OF SALARY
------------------ ----------------------

<S> <C> <C>
William M. Landuyt.................................... 300% 431%
Robert E. Lee......................................... 300 401
George H. Hempstead, III.............................. 250 314
John E. Lushefski..................................... 250 253
George W. Robbins..................................... 250 139
Peter P. Hanik........................................ 150 113
Richard A. Lamond..................................... 75 87
</TABLE>

The Company also encourages ownership of Common Stock by employees
generally and has established, in addition to a 401(k) plan that partially
matches employee contributions with Common Stock, a Salary and Bonus Deferral
Plan, an Employee Stock Purchase Plan and, for its U.K. employees, a Save As You
Earn (SAYE) program.

CHIEF EXECUTIVE OFFICER'S COMPENSATION

The compensation of Mr. Landuyt, the Company's Chief Executive Officer,
during 1997 was primarily based on the employment arrangements entered into with
him prior to the Demerger, including his change-in-control agreement. See
'Executive Agreements,' below. As noted in 'Base Compensation' above, his base
salary prior to the Demerger was $780,000. The Chief Executive Officer declined
to be considered for any increase in his base compensation for calendar year
1997 because the Chief Executive Officer believed that any such increase should
reflect an evaluation of his performance over a full twelve-month year.

As a result of the Company's strong performance in 1997, as measured by the
cash-flow/return-on-investment formula, Mr. Landuyt was credited with a bonus
under the Annual Performance Plan of $2,121,600, equal to 2.72 times his 1997
salary. Mr. Landuyt elected to defer his entire 1997 bonus into Common Stock
under the Company's Salary and Bonus Deferral Plan. As discussed under 'Annual
Performance Plan,' above, $561,000 of this bonus is subject to forfeiture. Mr.
Landuyt also received $159,574 in 1997 from Hanson, representing the final
payout under a Hanson long-term deferred incentive plan.

Mr. Landuyt received a performance-based stock award and a time-vested
stock award under the Stock Incentive Plan shortly after the Demerger, as well
as the potential to receive a cash bonus outside the plan if the Company's
performance exceeds the value represented by the performance-based stock award.
Under the Stock Ownership Guidelines, he was given in October 1996 a target of
owning Common Stock within five years with a value equal to 300% of his base
salary (exclusive of the value of Common Stock that may be earned under the
Stock Incentive Plan). As of March 20, 1998, he owned (together with members of
his immediate family) shares of Common Stock (including shares purchased under
the Salary and Bonus Deferral Plan, some of which are subject to forfeiture, but
excluding restricted Common Stock) with a market value equal to 431% of his 1997
base salary. The

<PAGE>

Compensation Committee believes that these equity arrangements will create the
desired mutuality of interest between the Chief Executive Officer and the
Company's shareholders, as the ultimate reward to the Chief Executive Officer
from these equity arrangements will be based upon the success of the Company.

Respectfully submitted,

WORLEY H. CLARK, JR., Chairman
LORD GLENARTHUR
DAVID J. P. MEACHIN

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Three non-employee directors, Messrs. Clark and Meachin and Lord
Glenarthur, have comprised the Compensation Committee since the Demerger. Hanson
Pacific Limited (a wholly owned subsidiary of Hanson), of which Lord Glenarthur
was a non-executive Director until February 1998, has provided various advisory
services to the Company since the Demerger.

COMPARISON OF CUMULATIVE TOTAL RETURN

The following graph compares the performance of the Company's Common Stock
with the performance of the S&P 500 Index and the S&P Chemical Index over the
period from October 2, 1996, when regular-way trading in the Common Stock
commenced on the New York Stock Exchange, through December 31, 1997, the end of
the Company's fiscal year. The graph assumes that $100 was invested on October
2, 1996, in each of the Company's Common Stock, the S&P 500 Index and the S&P
Chemical Index, and that all dividends were reinvested. The stock performance
shown in the graph is included in response to the SEC's requirements and is not
intended to forecast or be indicative of future performance.

[PERFORMANCE GRAPH]

* As indicated above, October 2, 1996, was the date regular-way trading
commenced in the Common Stock after the Demerger.

<PAGE>

SUMMARY COMPENSATION TABLE

The following table sets forth certain information with respect to the
compensation for 1997, 1996 and 1995 of the individuals who were the Company's
five most highly compensated executive officers in 1997, including Mr. Landuyt,
the Chief Executive Officer, and Dr. Yocum, who retired as Chief Executive
Officer of Millennium Petrochemicals Inc. on March 1, 1998. Prior to the
Demerger, these individuals were compensated pursuant to Hanson's plans and
policies. All references in the following table to stock options relate to
awards of options to purchase Ordinary Shares of Hanson ('Hanson Ordinary
Shares').

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
--------------------------------- ALL OTHER
ANNUAL SECURITIES COMPENSATION
COMPENSATION RESTRICTED UNDERLYING LTIP ------------------
NAME AND PRINCIPAL ---------------------- STOCK OPTIONS PAYOUTS ALL OTHER
POSITION (1) YEAR SALARY($) BONUS($)(2) AWARDS($)(3) (#)(4) ($)(5) COMPENSATION($)(6)
- ------------------------------- ---- --------- ----------- ------------ ---------- ------- ------------------

<S> <C> <C> <C> <C> <C> <C> <C>
William M. Landuyt ............ 1997 780,000 2,121,600 0 0 159,574 25,181
Chairman and Chief 1996 780,000 537,420 10,000,000 0 28,379 21,126
Executive Officer 1995 676,218 99,000 0 194,048 0 228,403(7)

Robert E. Lee ................. 1997 490,000 1,332,800 0 0 65,891 25,590
President and Chief 1996 490,000 612,500 7,000,000 0 62,272 18,836
Executive Officer of 1995 416,250 243,750 0 0 59,228 12,281
Millennium Inorganic
Chemicals Inc.

George H. Hempstead, III 1997 365,000 744,600 0 0 68,434 19,457
Senior Vice President-Law and 1996 340,000 318,750 5,000,000 0 64,675 19,153
Administration and Secretary 1995 323,083 233,550 0 0 61,513 24,185

John E. Lushefski ............. 1997 322,000 656,800 0 0 27,398 22,107
Senior Vice President 1996 310,000 322,107 5,000,000 0 25,893 20,546
and Chief Financial 1995 275,417 191,783 0 0 24,627 96,226(7)
Officer

Ronald H. Yocum ............... 1997 430,000 980,382 0 0 55,560 9,144,457(8)
Retired President and 1996 410,000 50,958 5,000,000 0 52,510 11,700
Chief Executive Officer of 1995 391,250 512,050(9) 0 0 49,949 11,700
Millennium Petrochemicals
Inc.
</TABLE>

- ------------

(1) Prior to the Demerger, Messrs. Landuyt, Lee, Hempstead and Lushefski and Dr.
Yocum held positions with Hanson.

(2) The 1997 bonus amounts shown in this column for Messrs. Landuyt, Lee,
Hempstead and Lushefski include bonus awards credited under the Annual
Performance Plan of $561,600, $352,800, $197,100 and $173,880, respectively,
that are subject to forfeiture as described in the 'Compensation Committee
Report on Executive Compensation -- Annual Bonus Plan.' In addition, prior
to the Demerger, bonuses were awarded based on Hanson's fiscal year, which
ended on September 30. Accordingly, the 1995 and 1996 bonus amounts shown in
this column include the bonuses earned in the twelve-month periods ended
September 30, 1995, and 1996, respectively. The amounts shown in this column
for 1996 also include bonuses earned for the three-month stub period between
the Demerger and December 31, 1996, of $195,000, $122,500, $63,750, $58,125
and $50,958 for Messrs. Landuyt, Lee, Hempstead and Lushefski and Dr. Yocum,
respectively.

(3) The number of shares of restricted stock awarded during 1996 under the Stock
Incentive Plan was as follows: Mr. Landuyt -- 448,053, of which 336,040 are
subject to the attainment of performance goals and the remainder of which
are subject to time vesting; Mr. Lee -- 313,637, of which 235,228 are
subject to the attainment of performance goals and the remainder of which
are subject to time vesting; and for each of Mr. Hempstead and Mr.
Lushefski -- 224,026, of which 168,020 are subject to the attainment of
performance goals and the remainder of which are subject to time vesting. At
December 31, 1997, the fair market value of these restricted stock awards
was as follows: Mr.

(footnotes continued on next page)

<PAGE>

(footnotes continued from previous page)
Landuyt -- $10,529,245; Mr. Lee -- $7,370,470; and for each of Mr. Hempstead
and Mr. Lushefski -- $5,264,611. Dividends accrue on these restricted stock
awards from the date of grant and will be paid, to the extent such
restricted shares are earned, as and when the underlying shares are
distributed to the executives upon the lapse of the restrictions relating
thereto. Dr. Yocum was awarded 224,026 shares of restricted stock in 1996.
Dr. Yocum's restricted stock vested on December 1, 1997, as required by the
terms of the Stock Incentive Plan and his restricted stock award, as a
result of the closing on such date of the Equistar joint venture. At
December 1, 1997, these shares had a fair market value of $5,250,609. In
addition, $85,689.95 in dividends (plus a 15% foreign tax credit) had
accrued thereon and were paid to Dr. Yocum, as required by the Stock
Incentive Plan.

(4) As a result of the Demerger, all Hanson options held by executive officers
and other employees of the Company and its subsidiaries on October 1, 1996,
immediately vested on that date and became exercisable for Hanson Ordinary
Shares until the later of October 1, 1997, and the date which is 42 months
from the respective date of grant. The amount shown reflects the adjustments
made in connection with Hanson's demerger of U.S. Industries, Inc. on May
31, 1995, the Demerger and the demerger of Hanson's tobacco business on
October 1, 1996, and the demerger of Hanson's energy business (the 'Energy
Demerger') and the 1-for-8 consolidation of Hanson Ordinary Shares on
February 24, 1997.

(5) Prior to the Demerger, Mr. Landuyt was a participant in a Hanson long-term
deferred incentive plan. At the Demerger he was entitled to receive
`L'48,026 (approximately $75,113 at the Noon Buying Rate on October 1, 1996)
under such plan. Subsequent to the Demerger, Hanson credited Mr. Landuyt
with an additional `L'66,593 ($104,152) award in respect of his 1996
fiscal-year bonus in connection with the February 1997 Energy Demerger.
Accordingly, Mr. Landuyt received `L'17,193 ($28,379) in December 1996 as a
normal distribution under the plan and `L'97,426 ($159,574) shortly
following such termination. Amounts shown in this column for Messrs. Lee,
Hempstead and Lushefski and Dr. Yocum represent payments in each of 1995,
1996 and 1997 of one-third of the account balances under the Hanson
Industries 1993 Long-Term Incentive Plan, which was terminated with regard
to future grants as of September 30, 1995. In addition, in 1997, Messrs.
Lee, Hempstead and Lushefski and Dr. Yocum were credited with awards of
$294,000, $153,000, $139,500 and $184,500, respectively, under the Hanson
LTIP. Mr. Landuyt did not participate in the Hanson LTIP. The Hanson LTIP
awards credited to Messrs. Lee, Hempstead and Lushefski are subject to
forfeiture as described in 'Compensation Committee's Report on Executive
Compensation -- Hanson Industries 1996 Long Term Incentive Plan.' The Hanson
LTIP award credited to Dr. Yocum was paid in February 1998. Accordingly, as
none of the Hanson LTIP awards were paid in 1997, they are not included in
the amounts shown as 'LTIP Payouts' in this column.

(6) The amounts shown in this column include the matching employer contributions
made under the Company's defined contribution plans for each of Messrs.
Landuyt, Lee, Hempstead and Lushefski and Dr. Yocum of $4,750 in 1997,
$4,500 in 1996 and $4,500 in 1995. Such contributions, prior to the
Demerger, were invested in Hanson American Depositary Shares ('Hanson ADSs')
pursuant to the terms of such plan. Subsequent to the Demerger, all matching
employer contributions have been invested in Common Stock. The amounts shown
in this column also include the dollar value of insurance premiums paid by
or on behalf of the employer with respect to disability insurance benefits
and automobile usage fees. Excluded are certain health, medical and other
non-cash benefits provided to the individuals named above that are available
generally to all salaried employees.

(7) Included in the total are amounts representing reimbursement of expenses
(including income tax reimbursement payments) incurred in connection with
relocation. In the case of Mr. Landuyt, the amount is $213,886 relating to
his relocation from the UK, where he served as Hanson's Finance Director, to
New Jersey. In the case of Mr. Lushefski, the amount is $83,057 relating to
his

(footnotes continued on next page)

<PAGE>

(footnotes continued from previous page)
relocation from St. Louis, Missouri, where he served as Chief Financial
Officer of Peabody Holding Company Inc., a former subsidiary of Hanson, to
New Jersey.

(8) As a result of the December 1, 1997, closing of the Equistar joint venture
transaction, Dr. Yocum received, pursuant to the change in control
provisions of his executive agreement, a severance payment of $4,260,396 and
is entitled to receive enhanced pension and health care benefits valued at
$497,714 (plus excise tax payments and related income tax reimbursement of
$4,376,718).

(9) The 1995 bonus amount shown in this column for Dr. Yocum includes $38,500
paid in December 1996, $38,500 paid in December 1997 and $127,500 paid in
February 1998.

HANSON OPTION EXERCISES IN 1997

The following table sets forth the number of Hanson Ordinary Shares covered
by stock options issued by Hanson and held on December 31, 1997, by each of the
individuals named in the Summary Compensation Table. As a result of the
Demerger, all such options are exercisable.

AGGREGATED HANSON OPTION EXERCISES IN 1997
AND YEAR END HANSON OPTION VALUES

<TABLE>
<CAPTION>
SHARES ACQUIRED NUMBER OF SECURITIES (1) VALUE OF UNEXERCISED
ON EXERCISE VALUE UNDERLYING UNEXERCISED IN THE MONEY OPTIONS
(#)(1) REALIZED ($) OPTIONS AT YEAR-END AT YEAR-END ($)
----------------- ------------ -------------------------- --------------------
<S> <C> <C> <C> <C>
William M. Landuyt.............. 120,295 115,995 278,865 0
Robert E. Lee................... 55,434 28,655 97,568 0
George H. Hempstead, III........ 0 0 0 0
John E. Lushefski............... 36,587 17,287 21,065 0
Ronald H. Yocum................. 0 0 425,414 106,851
</TABLE>

- ------------

(1) Adjusted to reflect Hanson's demerger of U.S. Industries, Inc., the
Demerger, the Energy Demerger, the demerger of Hanson's tobacco business and
the 1-for-8 consolidation of Hanson's Ordinary Shares. Of the options held
by Dr. Yocum, 342,200 were issued by Quantum Chemical Corporation prior to
its acquisition by Hanson and became exercisable into Hanson ADSs as a
result of such acquisition.

RETIREMENT PLANS

Each of the Company's operating subsidiaries presently sponsors its own
pension benefit plans. Substantially all full-time United States non-union
employees of the Company and its subsidiaries who are at least 21 years old and
have completed one year of service with the Company or certain of the Company's
subsidiaries are eligible to participate in their respective retirement plans.
Employees will become vested in their benefit under the retirement plans after
five years of service. Normal retirement typically will be the later of age 65
or five years of service; however, employees who work beyond their normal
retirement age will continue to accrue benefits.

The following tables set forth the annual benefits upon retirement at age
65, without regard to statutory maximums, for various combinations of final
average earnings and lengths of service which would be payable to the
individuals named in the Summary Compensation Table under the respective plans
in which they participate assuming they retired in 1997 at the age of 65.

Millennium Chemicals Inc. Corporate Retirement Plans

The following table shows the estimated annual retirement benefits that
would be payable to Messrs. Landuyt, Lee, Hempstead and Lushefski under the
Company's Corporate Retirement Plan (the 'Corporate Retirement Plan') and the
Company's Corporate Supplemental Executive Retirement Plan (the 'Corporate SERP'
and, collectively, with the Corporate Retirement Plan, the 'Corporate Plans').

<PAGE>

Messrs. Landuyt, Lee, Hempstead and Lushefski have 15, 16, 16, and 13 years of
Credited Service, respectively, under the Corporate Plans.

MILLENNIUM CHEMICALS INC. CORPORATE PLANS

<TABLE>
<CAPTION>
ANNUAL BENEFIT FOR YEARS OF CREDITED SERVICE
SHOWN(2)
---------------------------------------------------
FINAL 5-YEAR 10 15 20 25
AVERAGE EARNINGS(1) 5 YEARS YEARS YEARS YEARS YEARS
- ------------------------------------------------------ ------- ------- ------- ------- -------

- ------------

(1) Final Average Earnings under the Corporate Retirement Plan includes base
salary only. Final Average Earnings under the Corporate SERP includes base
salary and bonus earned under the Annual Performance Plan.

(2) Annual Benefits are computed on the basis of straight-life annuity amounts.
The pension benefit under the Corporate Retirement Plan is calculated as
follows: (a) plus (b) multiplied by (c), where (a) is Final Average Earnings
times 1.95%; (b) is that portion of Final Average Earnings in excess of
Social Security Covered Compensation times .65%; and (c) is years of
Credited Service to a maximum of 25 (the 'Corporate Retirement Plan
formula'). Annual benefits under the Corporate SERP are calculated as
follows: (a) minus (b) multiplied by (c), where (a) is Final Average
Earnings times 2.67%; (b) is the Social Security Benefit times 2%; and (c)
is years of Credited Service to a maximum of 25, provided, however, that the
benefit payable under the Corporate SERP shall not exceed 45% of Final
Average Earnings. The Corporate SERP benefit is calculated without regard to
the limitations set forth in Sections 415 and 401(a)(17) of the Code (the
'Corporate SERP formula'). The net Corporate SERP benefit is the difference
between the benefits calculated under the Corporate Retirement Plan formula
and the Corporate SERP formula. The Social Security offset is not reflected
in the above table. All capitalized terms used in this paragraph and not
otherwise defined have the meanings ascribed to them as in the relevant
Corporate Plan documents.

Millennium Petrochemicals Inc. Retirement Plans

The following table shows the estimated annual retirement benefits that
would be payable to Dr. Yocum under the Millennium Petrochemicals Inc. Salaried
Employees' Retirement Plan (the 'MPI Plan') and the Millennium Petrochemicals
Inc. Supplemental Executive Retirement Plan (the 'MPI SERP'). Dr. Yocum has
15.75 years of Credited Service under the MPI Plan and MPI SERP.

<PAGE>

MILLENNIUM PETROCHEMICALS INC. PLANS

<TABLE>
<CAPTION>
ANNUAL BENEFIT FOR YEARS OF CREDITED SERVICE SHOWN(2)
-------------------------------------------------------------------------
FINAL 5-YEAR 10 15 20 25 30 35
AVERAGE EARNINGS(1) 5 YEARS YEARS YEARS YEARS YEARS YEARS YEARS
- ------------------------------ ------- ------- ------- ------- ------- ------- -------

- ------------

(1) Final Average Earnings under the MPI Plan includes base salary only. Final
Average Earnings under the MPI SERP includes base salary and bonus earned
under the Annual Performance Plan.

(2) Annual benefits are computed on the basis of straight-life annuity amounts.
The pension benefit under the MPI Plan is calculated as follows: (a) plus
(b) multiplied by (c), where (a) is 1.4% of Final Average Earnings not in
excess of 125% of covered compensation; (b) is 1.5% of Final Average
Earnings in excess of 125% of covered compensation; and (c) is years of
credited service to a maximum of 35 (the 'MPI Plan formula'). Annual
benefits under the MPI SERP are calculated in the same manner as the MPI
Plan formula except it includes benefits that would otherwise exceed the
maximums provided under Section 415 and 401(a)(17) of the Code (the 'MPI
SERP formula'), provided, however, that the benefit payable under the MPI
SERP shall not exceed 45% of Final Average Earnings. The net MPI SERP
benefit is the difference between the benefits calculated under the MPI Plan
formula and the MPI SERP formula. The Social Security offset is not
reflected in the above table. All capitalized terms used in this paragraph
and not otherwise defined have the meanings ascribed to them in the relevant
MPI Plan and MPI SERP documents.

EXECUTIVE AGREEMENTS

The following is a summary of the change-in-control agreements (the
'Agreements') that are in effect between each of the individuals named in the
Summary Compensation Table (other than Dr. Yocum, who has retired from the
Company) and 5 other executive officers of the Company or a Company subsidiary,
on the one hand, and the Company or the Company subsidiary by which each such
executive officer is employed (the 'Employer'), on the other hand. Subject to
certain surviving rights, the Agreements will terminate on September 30, 2002,
provided, that if a Change-in-Control (as defined below) has taken place prior
to termination of the Agreements, the Agreements shall continue in full force
and effect during the two-year period after a Change-in-Control (the
'Post-Change-in-Control Period'). In addition to providing rights upon a
Change-in-Control, the Agreements provide the executives certain rights of
indemnification.

A 'Change-in-Control' is defined in the Agreements as (i) any person
(subject to certain exceptions) becoming the 'beneficial owner' (within the
meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company's outstanding securities; (ii) during any period of two (2)
consecutive years (not including any period prior to the consummation of the
Demerger), individuals who at the beginning of such period constitute the Board
of Directors of the Company, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect

<PAGE>

a transaction described in clause (i), (iii) or (iv) of this definition or a
director whose initial assumption of office occurs as a result of either an
actual or threatened election contest or other actual or threatened solicitation
of proxies or consents by or on behalf of a person other than the Board of
Directors of the Company) whose election by the Board of Directors of the
Company or nomination for election by the Company's shareholders was approved by
a vote of at least two-thirds of the directors then still in office who either
were directors at the beginning of the two-year period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the Board of Directors of the Company; (iii)
the merger or consolidation of the Company with any other corporation (subject
to certain exceptions); (iv) approval by the Company's shareholders of a plan of
complete liquidation of the Company or the sale of all or substantially all of
the Company's assets (subject to certain exceptions); or (v) in the case of
executives who are employed by an operating subsidiary of the Company, (x) any
person (subject to certain exceptions) becoming the 'beneficial owner' (within
the meaning of Rule 13d-3 under the Exchange Act) of securities of the
subsidiary representing more than 50% of the combined voting power of its
outstanding securities, or (y) the sale of all or substantially all of the
assets of such subsidiary (subject to certain exceptions).

The Agreements provide that if during the 180-day period prior to a
Change-in-Control (the 'Pre-Change-in-Control Period') or the
Post-Change-in-Control Period (collectively with the Pre-Change-in-Control
Period, the 'Change-in-Control Protection Period'), (i) the executive terminates
his or her employment for Good Reason (as defined below); (ii) a
Change-in-Control occurs and during the Post-Change-in-Control Period the
executive, subject to a required 180-day period of continued employment, in
certain circumstances, terminates his or her employment for any reason
(including death); (iii) the executive's employment is terminated by his or her
Employer without Cause or due to disability during the Change-in-Control
Protection Period; or (iv) the executive's employment is terminated by his or
her Employer at or after the age of 65 (in certain circumstances) during the
Post-Change-in-Control Period, the executive (or, if applicable, the executive's
legal representative) shall be entitled to receive (w) in a lump sum within five
days after such termination (or, if within the Pre-Change-in-Control Period,
within five days after the Change-in-Control) (1) three times the highest
annualized base salary paid within 180 days prior to such termination (provided
that if the termination is based on disability, such payment shall be offset by
the projected disability benefits to be paid by the Employer or by
Employer-provided insurance), and (2) three times the highest annual bonus paid
or payable to the executive for any of the previous three completed fiscal years
by the Employer (with the bonus for any years prior to the date of the Demerger
being deemed to equal the executive's maximum bonus target); (x) three years of
additional service and compensation credit for pension purposes; (y) three years
of the maximum Employer contribution under any type of qualified or
non-qualified defined contribution plan; and (z) provision for the executive's
and his dependents' health coverage for three years. In addition, if the payment
to the executive under the Agreements, together with certain other amounts paid
to the executive, exceeds certain threshold amounts and results from a change in
ownership as defined in Section 280G(b)(2) of the Code, the Agreements provide
that the executive will receive an additional amount to cover the federal excise
tax and any interest, penalties or additions to tax with respect thereto on a
'grossed-up' basis.

In the Agreements, 'Cause' is defined as the executive's (i) willful
misconduct with regard to the Employer or its affiliates which has a material
adverse effect in the aggregate on the Employer and its affiliates taken as a
whole; (ii) refusal to follow the proper written direction of the Board of
Directors of the Employer provided that the executive does not believe in good
faith that such direction is illegal, unethical or immoral and promptly notifies
the appropriate board; (iii) conviction for a felony (subject to certain
exceptions); (iv) breach of any fiduciary duty owed to the Employer or its
affiliates which has a material adverse effect on the Company and its affiliates
taken as a whole; or (v) material fraud with regard to the Employer or its
affiliates. 'Good Reason' is defined (subject to certain exceptions) as (i) a
material diminution in the executive's position, duties or responsibilities from
the executive's highest position held during the Pre-Change-in-Control Period or
the assignment of duties or responsibilities inconsistent with such position;
(ii) removal from or the failure of the executive to be re-elected to any of his
positions as an officer with the Employer; (iii) relocation of the principal
United States executive offices of the Employer to a location more than 25 miles
from where they are located at the time of a Change-in-Control or a relocation
by the Employer of executive's principal office away from such

<PAGE>

principal United States offices; (iv) if a director during the
Pre-Change-in-Control Period, the executive's removal or failure to be
re-elected to the Company's Board of Directors; (v) a failure to continue the
executive as a participant in, or to continue, any bonus program in which the
executive was entitled to participate within the Pre-Change-in-Control Period;
(vi) any material breach by a party other than the executive of any provision of
the Agreement; (vii) a reduction by the Employer of executive's rate of annual
base salary within 180 days prior to a Change-in-Control; or (viii) failure by
any successor to the Employer to assume the Agreement.

The Agreements do not apply to a termination of employment outside of the
Change-in-Control Protection Period. The Company subsidiaries presently maintain
customary severance policies applicable to their respective employees.

In addition to the Agreements, approximately 26 executive officers and
management employees of the Company and its subsidiaries have agreements with
their respective employers which provide severance protection upon a
Change-in-Control substantially similar to that provided by the Agreements,
except that (i) amounts payable and benefits provided will be determined by a
multiple of two rather than three and the payments thereunder will be subject to
the limitations of Section 280G(b)(2) of the Code; (ii) the definitions of
'Cause' and 'Good Reason' in certain instances will have differences that afford
the Employer broader rights; and (iii) the rights of the executive upon a
Change-in-Control will in certain instances be less.

Because the Equistar transaction constituted a Change-in-Control of
Millennium Petrochemicals under the Millennium Petrochemicals executive
agreements, two Millennium Petrochemicals executives received, shortly after the
Equistar closing, replacement agreements with provisions similar to those in the
Agreements except that such agreements have termination dates of September 30,
1999 and provide severance protection even in the absence of a subsequent
Change-in-Control if the executive is terminated by Millennium Petrochemicals
without Cause. Certain other management employees at Millennium Petrochemicals
have replacement agreements similar to those described in the immediately
preceding paragraph except that they provide severance protection even in the
absence of a subsequent Change-in-Control.

In addition to the change-in-control provisions under the executive
agreements described above, the Stock Incentive Plan and the agreements pursuant
to which restricted stock and options have been awarded under the Stock
Incentive Plan provide that upon a Change-in-Control of the Company or the
Employer, as applicable, restricted stock and options will vest immediately. In
addition, the restricted stock held by any employee who is terminated by his
Employer without cause (as defined) or due to his disability or death or who
terminates his employment for good reason (as defined) within six months prior
to a Change-in-Control, will also vest upon the Change-in-Control. Finally, all
credited incentive awards that are deferred and subject to forfeiture pursuant
to the terms of the Annual Performance Plan, the Hanson LTIP and the Company's
1997 Long Term Incentive Plan will become vested and payable upon a change in
control (as defined) of the Company or the Employer, as applicable.

OTHER MATTERS

Section 16(a) Beneficial Ownership Reporting Compliance. Section 16 of the
Exchange Act ('Section 16') requires that reports of beneficial ownership of
Common Stock and changes in such ownership be filed with the SEC by the
Company's directors and executive officers. The Company is required to conduct a
review and to identify in its proxy statement each director or executive officer
who failed to file any required report under Section 16 on a timely basis. Based
upon that review, the Company has determined that all required reports were
filed on a timely basis for 1997, except that James A. Lofredo, an executive
officer of the Company, inadvertantly reported two transactions late. Mr.
Lofredo purchased 550 shares of Common Stock on August 30, 1997. His wife
purchased 700 shares on July 30, 1997. Mr. Lofredo reported such purchases to
the SEC on Form 4 on September 30, 1997.

As of the date of this Proxy Statement, the Company knows of no business
that will be presented for consideration at the Annual Meeting other than the
items specifically identified in the Notice of Annual Meeting. Proxies in the
enclosed form will be voted in respect of any other business that is

<PAGE>

properly brought before the Annual Meeting in accordance with the judgment of
the person or persons voting the proxies.

SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING

Under the rules of the SEC, any proposal of a shareholder submitted for
inclusion in the Company's proxy statement for the 1999 Annual Meeting must be
received by the Company by December 10, 1998, to be considered. Proposals should
be addressed to George H. Hempstead, III, Secretary, Millennium Chemicals Inc.,
230 Half Mile Road, P.O. Box 7015, Red Bank, New Jersey 07701.

ADDITIONAL INFORMATION

The cost of soliciting proxies in the enclosed form will be borne by the
Company. Officers and regular employees of the Company may, but without
compensation other than their regular compensation, solicit proxies by further
mailing or personal conversations, or by telephone, telex or facsimile. The
Company will, upon request, reimburse brokerage firms and others for their
reasonable expenses in forwarding solicitation material to the beneficial owners
of Common Stock. The Company has retained Georgeson & Company Inc. to assist in
its solicitation of proxies from shareholders at a cost of $9,500, plus
reimbursement of expenses.

THE COMPANY'S ANNUAL REPORT TO SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31,
1997, INCLUDING FINANCIAL STATEMENTS, IS ENCLOSED HEREWITH. THE COMPANY WILL
FURNISH THE COMPANY'S ANNUAL REPORT ON FORM 10-K OR ANY EXHIBIT TO SUCH ANNUAL
REPORT ON FORM 10-K BY REQUEST BY A SHAREHOLDER DIRECTED TO INVESTOR RELATIONS,
MILLENNIUM CHEMICALS INC., 230 HALF MILE ROAD, P.O. BOX 7015, RED BANK, NEW
JERSEY 07701, FOR A FEE LIMITED TO THE COMPANY'S REASONABLE EXPENSES IN
FURNISHING SUCH EXHIBITS.

By Order of the Board of Directors,

GEORGE H. HEMPSTEAD, III
Secretary

<PAGE>

<PAGE>
MILLENNIUM CHEMICALS INC.
ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 1998, 10:00 A.M.

[AREA MAP]

SHERATON EATONTOWN HOTEL AND CONFERENCE CENTER
ROUTE 35 AND 6 INDUSTRIAL WAY EAST
EATONTOWN, NEW JERSEY
PHONE: (732) 542-6500

FROM PHILADELPHIA

Take the Ben Franklin Bridge to Route 38 East to NJ Turnpike North to 195
East (Exit 7A) to Garden State Parkway North to Exit 105 to Route 36 East.
Proceed through three traffic lights and bear off to the right at the sign for
Route 35 South (Asbury Park/Seaside Heights). Proceed through one light. Bear
off to the right before the second light (Industrial Way). Make left onto
Industrial Way and go through the light. Hotel is on the corner.

FROM NEWARK AIRPORT AND NEW YORK

Take the New Jersey Turnpike South to Exit 11. Proceed on the Garden State
Parkway South to Exit 105, which puts you directly onto Route 36 East. Proceed
through three traffic lights and bear off to the right at the sign for Route 35
South (Asbury Park/Seaside Heights). Proceed through one light. Bear off to the
right before the second light (Industrial Way). Make left onto Industrial Way
and go through the light. Hotel is on the corner.

<PAGE>

<PAGE>
APPENDIX I

PROXY

MILLENIUM CHEMICALS INC.
PROXY/AUTHORIZATION CARD
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 1998

The undersigned hereby constitutes and appoints William M. Landuyt, John E.
Lushefski and George H. Hempstead, III, and each of them, true and lawful agents
and proxies with full power of substitution in each, to represent the
undersigned at the Annual Meeting of Shareholders of MILLENNIUM CHEMICALS INC.
to be held at the Sheraton Eatontown Hotel and Conference Center, Route 35 & 6
Industrial Way East, Eatontown, New Jersey, and at any adjournments thereof,
and, in their discretion, on all such other matters as may properly come before
said meeting.

1. Election of three directors. Nominees for directors are: (1) Worley H. Clark,
Jr., (2) Lord Glenarthur and (3) Robert E. Lee.

2. Ratification of the appointment of Price Waterhouse LLP as independent
accountants.

YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU VOTE BY TELEPHONE, AS DESCRIBED ON THE REVERSE SIDE, OR SIGN
AND RETURN THIS CARD.

As described on page one of the Proxy Statement, this Proxy/Authorization Card
also provides voting instructions for shares held for the account of the
undersigned in certain employee savings and stock ownership plans. The Trustee
for the relevant plan will vote the undersigned's shares as directed, provided
voting instructions are properly received by 3:00 pm (East Coast time) on May
12, 1998.

SEE REVERSE
SIDE

- --------------------------------------------------------------------------------

FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL

MILLENNIUM CHEMICALS INC.

ANNUAL MEETING OF SHAREHOLDERS

MAY 15, 1998
10:00 A.M.

THE SHERATON EATONTOWN HOTEL
AND CONFERENCE CENTER
ROUTE 35 & 6 INDUSTRIAL WAY EAST
EATONTOWN, NEW JERSEY

<PAGE>

[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS
AND FOR PROPOSAL 2.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
DIRECTORS AND FOR PROPOSAL 2.

1. Election FOR WITHHELD
of Directors. [ ] [ ]
(see reverse)

For, except vote withheld from the following nominee(s):

_______________________________________________________

2. Approval of FOR AGAINST ABSTAIN
independent [ ] [ ] [ ]
accountants.

Discontinue Annual
Report Mailings for this
Account [ ]

SIGNATURE(S)_________________________________ DATE_____

NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.

- --------------------------------------------------------------------------------

FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL

MILLENNIUM CHEMICALS INC.
VOTE BY TELEPHONE
Quick & Easy

Millennium Chemicals Inc. encourages you to take advantage of a new
cost-effective and convenient way to vote your shares--by telephone. This
eliminates the need to return your Proxy/Authorization Card. You may vote by
telephone 24 hours a day, 7 days a week. To access the telephone voting system,
you must use a touch-tone telephone and follow the instructions below:

Shareholders calling from the United States, Canada, Puerto Rico and the
U.S. Virgin Islands may dial toll-free 1-800-652-8683 (1-800-OK2-VOTE). If
you call from other locations, you may dial 201-324-0377, and you will bear
the normal cost of international telephone access charges to use the
telephone voting service.

When requested, enter the last 4 digits of your U.S. Social Security Number
(if you have one) and your Voter Control Number printed in the box above,
just below the perforation. If you do not have a U.S. Social Security
Number, you can enter your Voter Control Number only.

The instructions will lead you through the simple voting process.

TELEPHONE VOTING PROVIDES THE SAME AUTHORIZATION TO VOTE YOUR SHARES AS IF YOU
MARKED, SIGNED, DATED AND RETURNED YOUR PROXY/AUTHORIZATION CARD. IF YOU VOTE BY
TELEPHONE, PLEASE DO NOT MAIL YOUR PROXY/AUTHORIZATION CARD.

THANK YOU FOR VOTING.

STATEMENT OF DIFFERENCES

The registered trademark symbol shall be expressed as......................'r'
The British pound sterling sign shall be expressed as......................'L'