<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
Octel Corp.
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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:
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[_] 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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[OCTEL LOGO APPEARS HERE]
200 Executive Drive Dennis J. Kerrison
Newark, DE 19702 President and Chief Executive Officer
March 30, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Octel Corp. (the "Corporation"), which will be held on Tuesday, May 11, 1999
at 10:00 a.m., local time, at Le Meridien Hotel, 250 Franklin Street, Boston,
Massachusetts 02110, USA.
The Notice of Meeting, Proxy Statement, Proxy Form and Annual Report of the
Corporation are included with this letter. The matters listed in the Notice of
Meeting are more fully described in the Proxy Statement.
It is important that your shares are represented and voted at the Annual
Meeting, regardless of the size of your holdings. Accordingly, please mark,
sign and date the enclosed Proxy Form and return it promptly in the enclosed
reply envelope which requires no postage if mailed in the United States of
America.
Sincerely,
/S/ DENNIS J KERRISON
Dennis J Kerrison
President and Chief Executive
Officer
<PAGE>
OCTEL CORP.
200 Executive Drive
Newark, Delaware 19702
U.S.A.
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------
May 11, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of OCTEL
CORP. (the "Corporation") will be held at Le Meridien Hotel, 250 Franklin
Street, Boston, Massachusetts 02110, USA on Tuesday, May 11, 1999 at 10.00am
(Local Time) for the following purposes:
1.To elect two directors to serve until the 2002 Annual Meeting;
2. To ratify the appointment of PricewaterhouseCoopers as the
Corporation's independent public accountants for the fiscal year ending
December 31, 1999; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed March 15, 1999 as the date of record for
the meeting, and only stockholders of record at the close of business on that
date will be entitled to vote at the meeting or any adjournment or
postponement thereof. A list of such stockholders will be available for
examination by any stockholder for any purpose germane to the meeting during
normal business hours at the Corporation's offices at 200 Executive Drive,
Newark, Delaware 19702 for a period of 10 days prior to the meeting.
A proxy statement, form of proxy and a copy of the annual report of the
Corporation for the year ended December 31, 1998 are enclosed.
By Order of the Board of Directors,
/S/ GRAHAM DE M LEATHES
Graham de M Leathes
Corporate Secretary
March 30, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON AND
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, PLEASE MARK, SIGN AND DATE THE
ENCLOSED PROXY FORM AND MAIL IT PROMPTLY IN THE ENVELOPE PROVIDED TO ENSURE
THAT YOUR SHARES WILL BE REPRESENTED. YOU MAY NEVERTHELESS VOTE IN PERSON IF
YOU ATTEND THE ANNUAL MEETING. IN ADDITION, YOUR PROXY IS REVOCABLE AT ANY
TIME BEFORE IT IS VOTED BY WRITTEN NOTICE TO THE SECRETARY OF THE CORPORATION
OR BY DELIVERY OF A LATER-DATED PROXY.
<PAGE>
OCTEL CORP.
200 Executive Drive
Newark, Delaware 19702
U.S.A.
----------------
PROXY STATEMENT
March 30, 1999
For
Annual Meeting of Stockholders
To be Held on May 11, 1999
----------------
This proxy statement (the "Proxy Statement") is being furnished to the
holders of common stock, par value $0.01 per share (the "Common Stock") of
Octel Corp. (the "Corporation") in connection with the solicitation of proxies
by and on behalf of the Board of Directors of the Corporation (the "Board of
Directors" or the "Board") for use at the annual meeting of stockholders to be
held on May 11, 1999 at 10:00 a.m., local time, and at any adjournments or
postponements thereof (the "Annual Meeting"). The purpose of the Annual
Meeting is to elect two directors to the Board and to ratify the appointment
of PricewaterhouseCoopers as the Corporation's independent public accountants
for the 1999 fiscal year.
This Proxy Statement, the Proxy Form and the Corporation's Annual Report to
Stockholders are being mailed on or about March 30, 1999 to holders of record
of the Common Stock at the close of business on March 15, 1999 (the "Record
Date").
If the enclosed proxy form (the "Proxy Form") is properly signed, dated and
returned to the Corporation, the individuals identified as proxies thereon
will vote the shares represented by the Proxy Form in accordance with the
directions noted thereon. If no direction is indicated, the proxies will vote
FOR the election of the nominees named herein as directors, and FOR the
ratification of the appointment of PricewaterhouseCoopers as the Corporation's
independent public accountants for the 1999 fiscal year. The Corporation's
management does not know of any matters other than those discussed in this
Proxy Statement that will be presented at the Annual Meeting. If other matters
are presented, all proxies will be voted in accordance with the
recommendations of the Corporation's management.
Returning your completed Proxy Form will not prevent you from voting in
person at the Annual Meeting if you are present and wish to vote. In addition,
you may revoke your proxy at any time before it is voted by written notice to
the Secretary of the Corporation prior to the Annual Meeting at the
Corporation's principal executive offices at the address above or by
submission of a later-dated proxy.
Each outstanding share of Common Stock entitles the holder thereof to one
vote (or where a part share shall be owned a proportionate part of the vote of
one share) on each matter to come before the Annual Meeting. As of the Record
Date, excluding treasury stock, there were 13,934,334 shares of Common Stock
outstanding. The presence in person or by proxy of a majority of the shares of
Common Stock outstanding will constitute a quorum for the transaction of
business. Pursuant to Delaware law, abstentions are treated as present and
entitled to vote, and therefore are counted in determining the existence of a
quorum and will have the effect of a vote against any matter requiring the
affirmative vote of a majority of the shares present and entitled to vote at
the Annual Meeting. Under Delaware law, broker "non votes" are considered
present but not entitled to vote, and thus will be counted in determining the
existence of a quorum but will not be counted in determining whether a matter
requiring approval of a majority of the shares present and entitled to vote
has been approved or whether a plurality of the vote of the shares present and
entitled to vote has been cast.
<PAGE>
PROPOSAL ONE
Election of Directors
The Certificate of Incorporation of the Corporation provides that the number
of directors shall be not less than three nor more than twelve members, the
exact number of which shall be determined from time to time by resolution
adopted by the Board of Directors, and be divided into three classes,
designated Class I, Class II and Class III. Each class shall consist, as
nearly as may be possible, of one-third of the total number of directors
constituting the entire Board of Directors. The Board is currently comprised
of seven members, two in Class I, two in Class II and three in Class III and
the appointments of the Directors in the said Classes expire at the Annual
Meetings of the Corporation in 1999, 2000 and 2001 respectively.
Directors in Class I, Thomas M Fulton and Charles M Hale, whose terms expire
at the upcoming Annual Meeting, have been nominated for re-election. See
"Management--Nominees for Directors" and "Management--Continuing Directors"
for information with respect to Messrs. Fulton and Hale. The Corporation
believes that each nominee is willing to be elected and to serve. In the event
that any nominee is unable to serve or is otherwise unavailable for election,
which is not now contemplated, the incumbent Board may or may not select a
substitute nominee. If a substituted nominee is selected, all proxies will be
voted for the person selected.
The election of directors at the Annual Meeting requires a plurality of the
votes actually cast by the stockholders present (in person or by proxy) at the
meeting and entitled to vote. There is no cumulative voting as to any matter,
including the election of directors. A withheld vote will have no effect on
the outcome of the election. If no voting instruction is given, the
accompanying proxy will be voted FOR such election. Under the New York Stock
Exchange rules, brokers who hold street name shares can vote in their
discretion in the election of Directors.
The Board of Directors recommends a vote "FOR" the election of the nominee
directors.
PROPOSAL TWO
Ratification of Appointment of Independent Public Accountants
PricewaterhouseCoopers have served as independent public accountants for
fiscal year 1998.
The Board of Directors, upon recommendation of its Audit Committee, has
selected the accounting firm of PricewaterhouseCoopers to serve as independent
auditors of the Corporation with respect to the 1999 fiscal year to examine
the financial statements of the Corporation for the fiscal year ending
December 31, 1999 and to perform other appropriate accounting services.
A representative of PricewaterhouseCoopers is expected to be present at the
Annual Meeting to respond to questions and to make a statement if such
representative desires to do so. If the stockholders do not ratify this
appointment by the affirmative vote of a majority of the shares represented in
person or by proxy at the Annual Meeting, other independent public accountants
will be considered by the Board of Directors upon recommendation by the Audit
Committee.
The Board of Directors recommends a vote "FOR" ratification of the
appointment of PricewaterhouseCoopers as the Corporation's independent public
accountants for fiscal year 1999.
2
<PAGE>
MANAGEMENT
The following sets forth certain information as of March 15, 1999 with
respect to the Corporation's nominees for director, the Corporation's
continuing directors, and certain officers of the Corporation and its
subsidiaries (including all executive officers of the Corporation). Officers
of the Corporation serve at the discretion of the Board of Directors.
A. Nominees for Directors
Class I Directors who will serve until the 1999 Annual Meeting and are
seeking re-election
Mr Thomas M Fulton - Director since February 27, 1998. Age: 65
Thomas Fulton served as President and Chief Executive Officer of Landauer
Inc., a provider of radiation monitoring services, until his retirement on
December 31, 1998. He remains a Director of that company. Prior to joining
Landauer in 1978, his career included various management positions at Union
Carbide Corporation, BASF Corporation and ICN Pharmaceuticals, Inc. Mr Fulton
has also served on the Board of Great Lakes Chemical Corporation since 1995
and is on the Boards of The Advocate South Suburban Hospital and the Bethel
Community Facility and is Chairman of the Board of Trustees of the Chicago
Theological Seminary.
Mr Charles M Hale - Director since May 7, 1998. Age: 63
Charles Hale is Chairman of Donaldson, Lufkin & Jenrette International, the
London based subsidiary of Donaldson, Lufkin & Jenrette Inc., a major New York
based investment bank. Prior to 1984, he was a general partner of Lehman
Brothers Kuhn Leob and Managing Director of AG Becker International. Mr Hale
is a graduate of Stanford University and Harvard Business School. Charles Hale
is the brother of Martin Hale who is also a Director of the Corporation.
B. Continuing Directors
Class II Directors who will serve until the 2000 Annual Meeting
Mr James M C Puckridge - Director since May 7, 1998. Age: 63
James Puckridge was Chairman of Elf Atochem UK Ltd., a position he assumed in
1990 until his retirement on December 31, 1998. Prior to that he was Managing
Director of the same organization. He is also Chairman of Ato Findley UK Ltd
and Elf Atochem UK Pension Fund Trustee Co. Ltd. He is a Non-Executive
Director of LINPAC Group Ltd, an international manufacturer and converter of
paper, plastics and metal products primarily for the packaging industry, and
Thomas Swan and Co Ltd, a UK based specialty chemical corporation. He is a
past President of the British Plastics Federation and a former Council Member
of the Chemical Industries Association, where he was Chairman of the General
Purpose and Finance Committee.
Dr Benito Fiore - Director since May 7, 1998. Age: 61
Benito Fiore is a specialist in the chemical industry retained by A T Kearney
Limited, part of a global consultancy organization. Between 1990 and 1995 he
was Chairman and Chief Executive Officer of Enichem UK Ltd. Prior to this he
held a number of directorships in the Montedison Group working in Canada,
Denmark, Italy and the USA. He is a Member of the Council of the Italian
Chamber of Commerce, an Associate Member of the Council of the Chemical
Industries Association and a Fellow of the Institute of Directors.
Class III members who will serve until the 2001 Annual Meeting
Dr Robert E Bew - Director and Chairman since May 7, 1998. Age: 62
Robert Bew serves as Non-employee Chairman of the Corporation. He is also
currently Chairman of both European Process Industries Competitiveness Centre,
an organization specializing in increasing competitiveness in process
industries, and Teesside Chemical Initiative Ltd., which focuses on building
and improving investment and competitiveness of the chemical sector in the
region and a Director of Teesside Power Ltd. He spent 35
3
<PAGE>
years with ICI, most recently as CEO of ICI's Chemical & Polymer division in
Teesside UK. Previously he served as head of Corporate Planning and between
1995 and 1997 was Chairman of Phillips Imperial Petroleum Ltd., a refinery
joint venture between ICI and Phillips Petroleum.
Mr Dennis J Kerrison - Director since February 27, 1998. Age: 54
Dennis Kerrison serves as President and Chief Executive Officer of the
Corporation. He joined the Corporation's wholly owned subsidiary The
Associated Octel Company Limited as Managing Director in May 1996 as well as
serving as a Group Vice President and Officer of that Corporation's then
owners, Great Lakes Chemical Corporation. Between 1992 and 1996 he was a
Director and Officer of Hickson International plc, lastly as Chief Executive
Officer. Prior to this he worked in senior management roles for specialty
chemical companies, in Europe and the United States, notably Rhone Poulenc,
Rohm & Haas and RTZ Chemicals.
Mr Martin M Hale - Director since February 27, 1998. Age: 58
Martin Hale has been Executive Vice President and Director of Hellman, Jordan
Management Co., Inc., a registered investment advisor specializing in asset
management and a wholly owned subsidiary of United Asset Management
Corporation since 1983. Prior to 1983, he was President and Chief Executive
Officer of Marsh & McClennan Asset Management Company. Mr Hale has been
Chairman of the Board of Directors of Great Lakes Chemical Corporation since
1995 and has served on the Great Lakes Board of Directors since 1978. He also
serves as a Director of the Student Conservation Association, as Chairman of
the Board of Governors of the School of The Museum of Fine Arts, Boston and as
a Trustee of The Museum of Fine Arts. Martin Hale is the brother of Charles
Hale who is standing for re-election as a Director of the Corporation.
C. Officers (Other than those who are Directors and listed above)
H Alan Hanslip (Appointed December 22, 1998) Age: 51
Alan Hanslip currently serves as Vice President, Human Resources, of the
Corporation having joined its subsidiary The Associated Octel Company Limited
in a similar capacity in November 1996. Previously, Mr Hanslip served as
Director of Human Resources for British Nuclear Fuels plc.
Dr Geoffrey J Hignett (Appointed December 22, 1998) Age: 48
Geoffrey Hignett serves as Vice President, Specialty Chemicals, of the
Corporation having joined its subsidiary The Associated Octel Company Limited
in February 1997 as Business Director, Petroleum Specialties. From May 1993 to
January 1997 he served as Director of Technology and Business Director of
Water Additives for a division of FMC Corporation, a multinational
engineering, manufacturing and chemicals company and prior to that as
Technical Director of the Metals and Electronics Division of Laporte plc.
Alan G Jarvis (Appointed April 1, 1998) Age: 49
Alan Jarvis serves as Vice President and Chief Financial Officer of the
Corporation having joined its subsidiary The Associated Octel Company Limited
in a similar capacity in October 1997. Prior to this Mr Jarvis served as Group
Finance Director of the Power Plant Group of GEC Alsthom, a world-wide Anglo-
French joint venture in the power generation business. From 1987 to 1994, Mr
Jarvis served at different times as Property Director, Group Finance Director
and Group Financial Controller for Simon Engineering PLC, a British
engineering corporation specializing in hydraulic platforms, process plant
contracting and chemical storage.
Graham de M Leathes (Appointed April 1, 1998) Age: 50
Graham Leathes serves as Corporate Secretary and General Counsel to the
Corporation having previously acted in such capacity for its subsidiary The
Associated Octel Company Limited since July 1989. Previously he served as
Corporate Secretary and General Counsel to The Oil and Pipelines Agency and as
Senior Legal Adviser for Brown and Root (UK) Ltd.
Steven W Williams (Appointed December 22, 1998) Age: 43
Steven Williams serves as Vice President, Group Operations of the Corporation
having joined its subsidiary The Associated Octel Company Limited as Director
of Manufacturing in November 1995. Prior to this he acted as Operations
Manager for Esso at their Fawley Oil Refinery.
4
<PAGE>
D. Family Relationships
Charles Hale, who is standing for re-election as a Director of the
Corporation, is the brother of Martin Hale, who is a serving Director of the
Corporation. There are no other family relationships between any of the
persons referred to in sections (A), (B) or (C) above.
Information About the Board of Directors
The Board of Directors met five times during fiscal 1998. Each Director
attended all of the meetings of the Board of Directors and any committees on
which such director served in fiscal 1998. The Corporation has Executive,
Finance, Audit, Safety Health and Environmental, and Compensation Committees,
the members of which are as shown below.
The Executive Committee has all the powers and authority of the Board of
Directors to act on behalf of the Corporation, except those powers
specifically reserved to the Board of Directors by Delaware law, the
Certificate of Incorporation or the Bylaws of the Corporation or otherwise. Dr
Robert Bew, Dennis Kerrison, Martin Hale and James Puckridge have served as
members of this Committee since its formation on May 11, 1998. The Committee
met six times during fiscal 1998.
The Finance Committee reviews and assesses the financial affairs of the
Corporation and provides advice to the Board of Directors on financial
policies and the financial condition of the Corporation. Dr Robert Bew, Dennis
Kerrison and Charles Hale have served as members of this Committee since its
formation on May 11, 1998. The Committee met twice during fiscal 1998.
The Audit Committee reviews the adequacy of internal controls and the work
of both the independent and internal auditors, consults with the independent
public accountants concerning the audit report and the related management
letter, and makes recommendations to the Board concerning the selection of
independent accountants. Dr Benito Fiore, Thomas Fulton and Charles Hale have
served as members of this Committee since its formation on May 11, 1998. The
Committee met twice during fiscal 1998.
The Safety, Health and Environmental Committee assesses the Corporation's
safety, health and environmental policies and performance and makes
recommendations to management regarding the promotion and maintenance of
standards of compliance and performance. Dr Benito Fiore, Thomas Fulton and
James Puckridge have served as members of this Committee since its formation
on May 11, 1998. The Committee met twice during fiscal 1998.
The Compensation Committee reviews management compensation programs,
approves compensation terms and agreements for senior executive officers,
reviews changes in compensation for senior executive officers and administers
the Corporation's restricted stock and stock option plans. Martin Hale, Dr
Robert Bew and Dr Benito Fiore have served as members of this Committee since
its formation on May 11, 1998. The Committee met twice during fiscal 1998.
The Corporation does not have a Nominating Committee.
Compensation of Directors
Retainer, Committee and Meetings Fees
Non-employee Directors receive compensation for their services in the form
of an annual retainer, Committee Chairman fees and meeting fees. Octel Corp.
employees are not paid any fees or compensation for being on the Board or on
any Board committee.
The Non-employee Chairman of the Board receives an annual retainer of
$115,000 to recognize his responsibilities to Octel Corp. All other Non-
employee Directors receive an annual retainer of $23,000. All Non-employee
Directors receive an annual retainer of $5,000 for each committee they chair,
$1,650 per day for
5
<PAGE>
attendance at Board Meetings and $825 per day for attendance at Committee
Meetings and for special assignments. They are also reimbursed out of pocket
expenses. It is the policy of the Board to ask the Compensation Committee to
review the fees paid to Directors each year.
Non-employee Directors received a stock award of 500 shares and stock
options equivalent to two times their annual fees at an option price of $19.60
during fiscal 1998. See "Executive Compensation and Other Information--Stock
Option Plans." The stock options granted to the Non-employee Directors were:
<TABLE>
<S> <C>
Dr Robert Bew................................................ 14,429 shares
Martin Hale.................................................. 5,551 shares
Thomas Fulton................................................ 5,214 shares
Charles Hale................................................. 5,214 shares
James Puckridge.............................................. 5,214 shares
Dr Benito Fiore.............................................. 5,041 shares
</TABLE>
The options vest on January 1, 2001 and are exercisable until December 31,
2007.
Deferred and Long-Term Compensation
None were awarded or in place in the last fiscal year.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Corporation's directors and officers, and persons who beneficially own
more than ten percent of a registered class of the Corporation's equity
securities, to file initial reports of ownership and reports of changes in
ownership of the Corporation's equity securities with the Securities and
Exchange Commission (the "SEC"). Such persons are required by SEC regulations
to furnish the Corporation with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to the
Corporation, or written representations that no Form 5 filings were required,
the Company believes that each of its officers, directors and greater than ten
percent beneficial owners complied with all Section 16(a) filing requirements
applicable to them during fiscal 1998.
6
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Corporation's Common Stock as of February 28, 1999
by holders of more than five percent of its Common Stock, the directors of the
Corporation, the executive officers of the Corporation included in the summary
Compensation Table ("Named Executives") set forth under the caption "Executive
Compensation and Other Information" who were employed by the Corporation as of
February 28, 1999, and all directors and executive officers of the Corporation
as a group. As of February 28, 1999, excluding treasury stock, there were
13,934,334 shares of Common Stock outstanding. To the knowledge of the
Corporation, each stockholder has sole voting and investment power with
respect to the shares indicated as beneficially owned, unless otherwise
indicated in a footnote. There are no stock options exercisable within 60 days
of February 28, 1999. Unless otherwise indicated, the business address of each
person is the Corporation's corporate address.
<TABLE>
<CAPTION>
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percent of Class
- ------------------------------------ -------------------- ----------------
<S> <C> <C>
FMR Corp. (1)............................ 1,896,525 13.6%
82 Devonshire Street
Boston, Massachusetts 02109
T. Rowe Price Associates, Inc. (2)....... 1,733,420 12.4%
100 E. Pratt Street
Baltimore, Maryland 21202
Jeffrey S Halis (3)...................... 1,622,700 11.6%
500 Park Avenue, 5th Floor
New York 10022
State Street Bank and Trust Company (4).. 948,967 6.8%
225 Franklin Street
Boston, Massachusetts 02110
Dr Robert E Bew.......................... 500 *
Dr Benito Fiore.......................... 500 *
Thomas M Fulton.......................... 825 *
Charles M Hale (5)....................... 49,460 *
Martin M Hale (5)........................ 54,370 *
James M C Puckridge...................... 500 *
Dennis J Kerrison........................ 18,812 *
Alan G Jarvis............................ 9,584 *
H Alan Hanslip........................... 6,539 *
Dr Geoffrey J Hignett.................... 8,113 *
Steven W Williams........................ 9,584 *
Directors and executive officers as a
group (12 persons)...................... 165,326 1.2%
</TABLE>
- --------
Notes:
* Less than 1%
(1) Based solely upon a Schedule 13G dated February 1, 1999 filed jointly by
FMR Corp. ("FMR"), Edward C. Johnson 3d ("Mr. Johnson"), Abigail P.
Johnson ("Ms. Johnson"), Fidelity Management & Research Company ("FM&R")
and Fidelity Low-Priced Stock Fund ("Fidelity Stock"), various persons
have the right to receive or the power to direct the receipt of dividends
from, or the proceeds for the sale of, the Common Stock shown as
beneficially owned by FMR, including Fidelity Stock (which owns 1,472,000
shares, representing 10.6% of the shares of Common Stock outstanding), and
Mr. Johnson and FMR have sole voting power as to only 27,200 shares of
Common Stock through their control of Fidelity Management Trust Company
(voting power with respect to the remaining shares shown as beneficially
owned resides with the boards of trustees of the underlying funds).
(2) Based solely upon a Schedule 13G dated February 12, 1999 filed jointly by
each of T. Rowe Price Associates, Inc. ("Price Associates") and T. Rowe
Price Capital Appreciation Fund ("Capital Appreciation"), the shares of
Common Stock shown as beneficially owned by Price Associates are owned by
various individual and institutional investors including Capital
Appreciation (which owns 765,000 shares, representing 5.5% of the shares
of Common Stock outstanding), to which Price Associates serves as an
investment advisor with power to direct investments and/or sole power to
vote the securities. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such securities.
(3) Based solely upon a Form 4 dated January 8, 1999, the shares of Common
Stock shown as being beneficially owned by Jeffrey S. Halis include
746,400 shares owned by Tyndall Partners, L.P., 437,700 shares owned by
Tyndall Institutional Partners, L.P., 99,700 shares owned by Madison
Avenue Partners, L.P. and 338,900 shares owned by Halo International, Ltd.
(4) Based solely upon a Schedule 13G dated February 11, 1999, State Street
Bank and Trust Company has shared voting power with respect to 3,250
shares of Common Stock and shared dispositive power with respect to 4,317
shares of Common Stock.
(5) In the case of Charles Hale and Martin Hale, the figures shown above for
each of them include 47,960 shares held by them as trustees in family
trusts. Charles Hale and Martin Hale disclaim beneficial ownership of
these 47,960 shares held in a trustee capacity.
7
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth certain information regarding compensation
paid or accrued to Dennis J Kerrison, President and Chief Executive Officer of
the Corporation, and to each of the Corporation's four next most highly
compensated executive officers for services rendered to the Corporation and
the previous owners of Octel during fiscal 1998, 1997 and 1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation (1) Long Term Compensation (1)
------------------------- -----------------------------
Securities All Other
Fiscal Salary Bonus Underlying Restricted Stock Compensation
Name & Principal Position Year ($) ($) Options/SARs Awards ($) (1)
- ------------------------- ---------------- -------- ------------ ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Dennis J Kerrison........ 1998 399,344 335,335 1,242(2) -- 534,113(3)
President and Chief
Executive Officer 1997 290,503 130,809 -- -- 70,984
1996 184,937 241,928 -- -- 92,573
Alan G Jarvis(4)......... 1998 226,625 115,461 -- -- 281,689(5)
Vice President and Chief
Financial Officer 1997 40,023 15,977 -- -- 12,697
H Alan Hanslip(6)........ 1998 164,283 80,892 1,242(2) -- 195,578(7)
Vice President, Human
Resources 1997 98,964 32,516 -- -- 33,272
1996 9,407 0 -- -- 5,936
Dr Geoffrey J
Hignett(8).............. 1998 192,894 96,071 -- -- 238,901(9)
Vice President,
Specialty Chemicals 1997 143,179 31,877 -- -- 91,146
Steven W Williams........ 1998 220,329 116,869 1,242(2) -- 270,822(10)
Vice President, Group
Operations 1997 153,553 45,276 -- -- 56,497
1996 143,178 11,635 -- -- 97,590
</TABLE>
- --------
Notes:
(1) All the above Executives are paid in pounds sterling. Their salaries were
based upon the United Kingdom salary parameters set before the spin-off
by the Compensation Committee of Great Lakes Chemical Corporation. With
the help of external consultants these salaries were re-confirmed by the
Compensation Committee of Octel Corp. No salary increases have been
awarded since the spin-off and the next review of salaries will be
effective from January 1, 2000. For the purposes of the Compensation
table an exchange rate of (Pounds)1--$1.66 is used.
(2) The Options were granted pursuant to the Octel Corp. Savings Related
Stock Plan.
(3) The President and Chief Executive Officer received a one time bonus of
$219,950 and a stock award valued at $150,565 (11,280 shares) for
completing the spin-off from Great Lakes Chemical Corporation on May 22,
1998 (the "Distribution"). In fiscal 1998 he also received a pension
benefit valued at $140,361 plus other benefits mainly consisting of a
leased company car valued at $23,237.
(4) Alan Jarvis became an employee of the Corporation effective October 13,
1997.
(5) Following the Distribution Alan Jarvis received a one time bonus of
$124,500 and a stock award valued at $85,226 (6,385 shares). In fiscal
1998, he also received a pension benefit valued at $56,854 plus other
benefits mainly consisting of a leased company car valued at $15,109.
(6) Alan Hanslip became an employee of the Corporation effective December 2,
1996.
(7) Following the Distribution Alan Hanslip received a one time bonus of
$84,660 and a stock award valued at $58,251 (4,364 shares). In fiscal
1998, he also received a pension benefit valued at $38,056 plus other
benefits mainly consisting of a leased company car valued at $14,611.
(8) Dr Geoffrey Hignett became an employee of the Corporation effective
February 1, 1997.
(9) Following the Distribution Dr Geoffrey Hignett received a one time bonus
of $105,410 and a stock award valued at $72,145 (5,405 shares). In fiscal
1998, he also received a pension benefit valued at $47,392 plus other
benefits mainly consisting of a leased company car valued at $13,954.
(10) Following the Distribution Steven Williams received a one time bonus of
$124,500 and a stock award valued at $85,226 (6,385 shares). In fiscal
1998, he also received a pension benefit valued at $47,650 plus other
benefits mainly consisting of a leased company car valued at $13,446.
8
<PAGE>
Stock Option Plans
The Corporation has six stock options plans, the first four of which provide
for grants of options to key employees and Non-employee Directors. Two other
plans provide stock on an equal basis to all employees. The stock plans, which
are administered by the Compensation Committee of the Board of Octel Corp.,
were approved prior to the Distribution. The Board does not intend to seek
stockholder approval for any new stock plans at this time.
The six plans in existence are:
i) The Associated Octel Company Limited Approved Company Share Option
Plan;
ii) The Octel Corp. Performance Related Stock Option Plan;
iii) The Octel Corp. Time Restricted Stock Option Plan;
iv) The Octel Corp. Non-employee Director Stock Option Plan;
v) The Octel Corp. Savings Related Stock Option Plan; and
vi) The Octel Profit Sharing Share Scheme.
Details of the Plans are as follows:
i) The Associated Octel Company Limited Approved Company Share Option Plan
("CSOP")
The "CSOP" is approved by UK Inland Revenue and can be used to provide
stock options which are granted at fair market value at the time of grant
up to a maximum of $49,800 per person. The plan is targeted at middle to
senior management to encourage performance, recruitment, retention and
stock ownership. As of the date hereof, no options have been granted
pursuant to this plan.
ii) The Octel Corp. Performance Related Stock Option Plan ("PRSOP")
The "PRSOP" provides stock options as a percentage of salary based on
Corporation performance targets. Options have been granted under "PRSOP" to
top management (see table below) and other senior employees early in 1999
and will vest if the Corporation meets its cash targets set by the
Compensation Committee at the time of the Distribution. The options will
vest in three years from grant and are exercisable up to ten years from the
inception of the plan. As of the date hereof, 107,079 options have been
issued pursuant to this plan.
iii) The Octel Corp. Time Restricted Stock Option Plan ("TRSOP")
The "TRSOP" provides a limited number of Named Executives and senior
managers with stock bonuses in lieu of cash, the number of shares allocated
to each Named Executive and certain senior managers being calculated by
reference to a stock price of $19.60 per share. The bonuses were designed
to reward the management of Octel for managing the spin-off program and
continuing to remain in employment through December 31, 1999. These awards
are delivered in the form of options vesting on December 31, 1999 and
exercisable by December 31, 2007. As of the date hereof, 181,521 options
have been issued pursuant to this plan.
iv) The Octel Corp. Non-employee Director Stock Option Plan ("NED's Plan")
The "NED's Plan" was established to encourage Non-employee Directors to
become stockholders and focus on improving stockholder value, and to
provide commitment to the Corporation in the longer term. The Plan provides
for stock options granted at fair market value which vest in three years
after grant and are exercisable up to ten years from the inception of the
plan. Multiples of annual fees are used to determine levels of grant. As of
the date hereof, 40,663 options have been issued pursuant to this plan.
9
<PAGE>
v) The Octel Corp. Savings Related Stock Plan ("Savings Related Plan")
Under the Savings Related plan all UK based employees are able to receive
stock options on an equal basis at (Pounds)7.85 per share (equivalent to
$13.20 at the time of grant). The options are linked to a savings scheme
for three years, of up to $415 per month, which is approved by the UK
Inland Revenue. The total of stock options issued under this scheme as of
the date hereof is 141,683 shared between 308 employees (including some of
the Named Executives).
vi) The Octel Profit Sharing Share Scheme ("Profit Sharing Plan")
In order to encourage motivation and commitment to the new Corporation,
the Compensation Committee granted every UK based employee an award of
fifteen shares under the plan. A total of 17,100 shares have been granted
as of the date hereof. The stock is held in a trust for three years before
being assigned to the individuals. The trust, approved by the UK Inland
Revenue, allows the stock to be assigned free of any income tax liability.
Options, and the conditions relating thereto, granted under the above plans
are determined by the Compensation Committee and all the plans were approved
prior to the Distribution. The limit set by Great Lakes Chemical Corporation
for the number of shares of Common Stock which can be issued or awarded under
the stock plans is 1,175,000 in the aggregate.
Following the Distribution, some options were made available in fiscal 1998
under the NED's Plan and under the Savings Related Plan. Since January 1, 1999
options have been granted under the PRSOP, the TRSOP and an award made under
the Profit Sharing Plan, and for the sake of completeness, a table showing the
position as at March 1, 1999 is set out after the schedule showing the
position at the end of fiscal 1998.
10
<PAGE>
The Options granted to the Named Executives during fiscal 1998 pursuant to
the Stock Options plans described above are set out in the following table:
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price
Appreciation for
Individual Grants Option Term
------------------------------------------------------- --------------------------------
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in price Vesting Expiration 0% 5% 10%
Name Granted (1) 1998 ($/Sh) Date Date ($) (2) ($) (2) ($) (2)
---- ------------ ------------ -------- --------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dennis J Kerrison:
Savings Related Plan... 1,242 0.08% 13.20 1/11/2001 4/30/2002 838 970 1,115
Alan G Jarvis:
Nil.................... 0 0 0 -- -- 0 0 0
H Alan Hanslip:
Savings Related Plan... 1,242 0.08% 13.20 1/11/2001 4/30/2002 838 970 1,115
Dr Geoffrey J Hignett:
Nil.................... 0 0 0 -- -- 0 0 0
Steven W Williams:
Savings Related Plan... 1,242 0.08% 13.20 1/11/2001 4/30/2002 838 970 1,115
</TABLE>
- --------
Notes:
(1) In the event of a change of control of the Corporation, all options become
fully vested and exercisable. In order to prevent dilution or enlargement
of rights under the options, in the event of a reorganization,
recapitalization, stock split, stock dividend, combination of shares,
merger, consolidation, distribution of assets or other change in the
corporate structure of shares of the Corporation, the type and number of
shares available upon exercise and the exercise price will be adjusted
accordingly. The Compensation Committee may, subject to specified
limitations, advance the date on which an option shall become exercisable.
(2) Amounts reflect assumed rate of appreciation from the fair market value on
the date of grant as set forth in the Securities and Exchange Commission's
executive compensation disclosure rules. Actual gains, if any, on stock
option exercises depend on future performance of the Common Stock and
overall stock market conditions. No assurance can be made that the amounts
reflected in these columns will be achieved.
11
<PAGE>
Total Options Granted as at March 1, 1999
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
-------------------------------------------------------- -------------------------------
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in price Vesting Expiration 0% 5% 10%
Name Granted (1) 1998 ($/Sh) Date Date ($) (2) ($) (2) ($) (2)
- ------------------------ ------------ ------------ -------- ---------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dennis J Kerrison:
TRSOP.................. 45,158 18.8% 0 12/31/1999 12/31/2007 626,567 972,011 1,477,412
PRSOP.................. 31,451 27.5% 0 1/1/2001 12/31/2007 436,382 676,972 1,028,966
Savings Related Plan... 1,242 0.08% 13.20 1/11/2001 4/30/2002 838 970 1,115
Alan G Jarvis:
TRSOP.................. 19,171 8.0% 0 12/31/1999 12/31/2007 265,998 412,650 627,209
PRSOP.................. 11,868 10.4% 0 1/1/2001 12/31/2007 164,668 255,455 388,792
H Alan Hanslip:
TRSOP.................. 13,036 5.4% 0 12/31/1999 12/31/2007 180,874 280,596 426,491
PRSOP.................. 8,070 7.1% 0 1/1/2001 12/31/2007 111,971 173,704 264,022
Savings Related Plan... 1,242 0.08% 13.20 1/11/2001 4/30/2002 838 970 1,115
Dr Geoffrey J Hignett:
TRSOP.................. 16,231 6.8% 0 12/31/1999 12/31/2007 225,205 349,367 531,022
PRSOP.................. 10,049 8.8% 0 1/1/2001 12/31/2007 139,429 216,301 328,766
Steven W Williams:
TRSOP.................. 19,171 8.0% 0 12/31/1999 12/31/2007 265,998 416,650 627,209
PRSOP.................. 11,868 10.4% 0 1/1/2001 12/31/2007 164,668 255,455 388,792
Savings Related Plan... 1,242 0.08% 13.20 1/11/2001 4/30/2002 838 970 1,115
</TABLE>
- --------
Notes:
(1) In the event of a change of control of the Corporation, all options become
fully vested and exercisable. In order to prevent dilution or enlargement
of rights under the options, in the event of a reorganization,
recapitalization, stock split, stock dividend, combination of shares,
merger, consolidation, distribution of assets or other change in the
corporate structure of shares of the Corporation, the type and number of
shares available upon exercise and the exercise price will be adjusted
accordingly. The Compensation Committee may, subject to specified
limitations, advance the date on which an option shall become exercisable.
(2) Amounts reflect assumed rate of appreciation from the fair market value on
the date of grant as set forth in the Securities and Exchange Commission's
executive compensation disclosure rules. Actual gains, if any, on stock
option exercises depend on future performance of the Common Stock and
overall stock market conditions. No assurance can be made that the amounts
reflected in these columns will be achieved.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-
Options at December 31, The-Money Options at
1998 (#) (2) December 31, 1998
Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise ($)(1) Unexercisable Unexercisable
---- --------------- -------------- ----------------------- ------------------------
<S> <C> <C> <C> <C>
Dennis J Kerrison....... -- -- 0 $ 0
1,242 $838
Alan G Jarvis........... -- -- 0 0
0 0
H Alan Hanslip.......... -- -- 0 0
1,242 $838
Dr Geoffrey J Hignett... -- -- 0 0
0 0
Steven W Williams....... -- -- 0 0
1,242 $838
</TABLE>
- --------
Notes:
(1) As of the end of the fiscal year, none of the options held by the named
executive officers had been exercised.
(2) The above options relate to the Savings Related Plan. They are exercisable
on January 11, 2001.
12
<PAGE>
Pension Plan
The Corporation operates three separate pension plans for executives which,
together, are designed to provide the equivalent of 1/40 of final salary (or
the average of the last 3 years of service if higher) for each year of service
(1/30 for the CEO) with Octel Corp. The three plans are:
i) The Octel Pension Plan;
ii) The Octel Senior Management Plan; and
iii) The Octel Funded Unapproved Pension Plan.
The reason for having three plans is to make maximum use of UK Inland
Revenue approved pension arrangements to optimize both the Executive's and the
Corporation's tax position.
Normal retirement age is the end of the month following the Executive's 65th
birthday.
Pension Plan Table
<TABLE>
<CAPTION>
5 Years 10 Years 15 Years 20 Years 25 Years
------------- --------------- --------------- --------------- ---------------
Final Earnings @1/30 @1/40 @1/30 @1/40 @1/30 @1/40 @1/30 @1/40 @1/30 @1/40
$ $ $ $ $ $ $ $ $ $ $
- -------------- ------ ------ ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
150,000 18,750 37,500 56,250 75,000 93,750
250,000 31,250 62,500 93,750 125,000 156,250
350,000 43,750 87,500 131,250 175,000 218,750
450,000 75,000 56,250 150,000 112,500 225,000 168,750 300,000 225,000 375,000 281,250
550,000 91,666 68,750 183,233 137,500 275,000 206,250 366,666 275,000 458,333 343,750
</TABLE>
As of December 31, 1998, the final base salary of the Named Executives and
eligible credited years under the pension plans were as follows:
<TABLE>
<CAPTION>
Name Base Salary Eligible Years
---- ----------- --------------
<S> <C> <C>
Dennis Kerrison................................... $439,900 2
Alan Jarvis....................................... $249,000 0
Steven Williams................................... $249,000 3
Dr Geoffrey Hignett............................... $210,820 1
Alan Hanslip...................................... $169,320 2
</TABLE>
Change in Control and Severance Agreements
The Corporation recognizes that establishing and maintaining a strong
management team is essential in protecting and enhancing the interests of the
Corporation and its stockholders. In order to ensure management stability and
the continuity of key management personnel, the Corporation has entered into
Change-in-Control agreements with each of the Named Executives. The agreements
provide that in the event of a take-over or fundamental restructuring of the
business, which results in the loss of the Executive's position, such
Executive is entitled to compensation of three years pay plus benefits and
further that all stock options and grants to such Executives shall vest
immediately.
Employment Agreements
Each Executive also has an employment agreement which complies with UK
employment law and which provides for, amongst other things, 30 days of annual
vacation, the provision of a Corporation car, private health insurance,
pension provision, life insurance, permanent health insurance and a rolling
one year term of employment (2 years for the CEO) which can be terminated by
the Corporation upon twelve months notice (twenty four months for the CEO) and
six months (twelve months for the CEO) from the Executive.
Life Insurance Cover
Named Executives are covered by two basic plans. The Corporation's
accidental death plan provides up to six times annual salary in the event of
accidental death for whatever reason. Also, as a component of the Pension
plans, up to four times annual salary is payable for death whilst in service
with the Corporation.
Non-employee Directors have accidental cover while on Corporation business
up to a maximum of $500,000 in the case of death or injury. Cover ceases upon
termination of employment with the Corporation and there are no cash surrender
values.
13
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
The Compensation Committee reviews and makes recommendations to the Board
regarding salaries, compensation and benefits of executive officers and key
employees of the Corporation with the assistance of external advisors and
develops and administers programs providing stock-based incentives. After
consideration of the Compensation Committee's recommendations, the full Board
approves the salaries and bonuses and the stock and benefit programs for the
Corporation's executive officers.
Compensation Philosophy
The compensation philosophy of the Corporation is to link executive
compensation to continuous improvements in corporate performance and increases
in stockholder value. The goals of the Corporation's executive compensation
programs are as follows:-
. To establish pay levels that are necessary to attract and retain highly
qualified executives in light of the overall competitiveness of the
market for high quality executive talent and the Corporation's unique
business profile.
. To recognize superior individual performance, new responsibilities and
new positions within the Corporation.
. To balance short-term and long-term compensation to complement the
Corporation's annual and long-term business objectives and strategy and
to encourage executive performance in the fulfilment of those objectives.
. To provide variable compensation opportunities based on the Corporation's
performance.
. To encourage stock ownership by executives.
. To align executive remuneration with the interests of stockholders.
Stock Ownership
The Compensation Committee believes that it can align the interests of
stockholders and executives by providing those persons who have substantial
responsibility over the management and growth of the Corporation with an
opportunity to establish a meaningful ownership position in the Corporation.
Compensation Components
Corporate and individual performances are recognized through both short and
long term incentive compensation plans designed to align the interests of
executives and stockholders. The total compensation program consists of three
components; base salary, which reflects the executive's level of
responsibility and individual performance; annual incentive compensation
awards in the form of cash bonuses, which reflect both corporate and
individual performance; and long term incentive compensation in the form of
stock options. The latter two components provide at risk compensation which is
linked directly to financial results. The Committee considers all elements of
compensation when determining an individual's total compensation.
Short-Term Incentive Compensation
Each year the Committee reviews the base salary of the President and Chief
Executive Officer and, in conjunction with the President and Chief Executive
Officer, reviews the base salaries of other corporate officers; however, the
Committee makes the final compensation decisions concerning such Officers. The
median level of the executive market as assessed by external surveys is used
as the main criterion in determining base salary. The levels and scope of
responsibility, experience, and corporate and business unit performances, as
well as individual performance, are also key criteria in base salary
determination.
14
<PAGE>
A Management Incentive Compensation Plan ("MICP") provides incentive
compensation in the form of cash bonuses to executive officers, managers and
other selected key employees who have a broad impact on the Corporation's
performance. The philosophy for incentive compensation is to provide awards
when financial objectives are achieved and provide no or reduced awards when
the objectives are not achieved. The awards granted in 1998 were based on pre-
established targets for corporate net income and cash generation in addition
to individual achievement against personal targets.
Long-Term Incentive Compensation
Long-term incentive compensation is comprised of annual grants of stock
options which are designed to encourage key employees to remain with the
Corporation by providing them with a long-term interest in the Corporation's
overall performance and to motivate them to maximize long-term stockholder
value. The Corporation's stock option grant guidelines were designed with the
assistance of external compensation consultants. The Committee administers the
stock compensation plans. Performance related stock options with ten year
vesting will generally be granted annually and cannot be exercised for at
least three years from the date of grant.
Chief Executive's Compensation
Dennis Kerrison's compensation includes base salary, incentive compensation
and stock options. Consistent with all other executive officers, the President
and Chief Executive Officer's compensation was determined by the Compensation
Committee in accordance with the salary policy, bonus programs and stock
option guidelines, namely the Corporation and the President and Chief
Executive's overall performance and motivation to maximize long-term
stockholder value. Stock options, which cannot be exercised for at least 3
years from the date of grant, with a maximum of ten year exercise from plan
inception, will generally be granted annually. The Committee has available
information as to the level of past awards and individual stock ownership of
the President and Chief Executive Officer.
The Committee determined that in order to better align Mr Kerrison's
compensation with stockholder interests, a greater portion of his compensation
would be at-risk and directly linked to financial results.
Mr Kerrison's base salary effective as of May 1998 was $439,900. A bonus of
$335,335 was granted to Mr Kerrison in consideration of the Corporation's cash
generation and overall financial performance and Mr Kerrison's leadership of
the Corporation in its first year of operation as an independent, publicly
quoted Corporation. He also received a one time bonus in recognition of his
role in the spin-off of $219,950.
11,280 shares of the Corporation's common stock were granted to Mr Kerrison
on September 24, 1998. On February 5, 1999 he received zero-cost options in
respect of 45,158 shares of the Corporation's common stock which will vest on
December 31, 1999 and which must be exercised by December 31, 2007 in
accordance with the Corporation's time restricted bonus arrangements for
certain senior executives. These stock and stock option allocations were
respectively valued at one half and two times the salary of the President and
Chief Executive Officer and assumed a stock price of $19.60. In addition, Mr
Kerrison was granted up to 31,451 zero-cost options on February 5, 1999 and
which will vest on January 1, 2001 subject to the achievement of certain
performance criteria specified by the Compensation Committee. These
performance related stock options must be exercised by December 31, 2007.
Furthermore, Mr Kerrison was granted options for 1,242 shares of the
Corporation's common stock pursuant to the Savings Related Plan at an exercise
price of $13.20 per share, which options vest on January 11, 2001 and expire
on April 30, 2002. The stock grant and the stock options granted to Mr
Kerrison were in line with the time restricted bonus and stock option
arrangements approved prior to the Distribution. In line with normal UK
practice, Mr Kerrison also receives a fully expensed company car and pension
benefits valued at $140,361.
15
<PAGE>
Summary
With a significant portion of the Corporation's executive compensation
linked directly to individual and corporate performance and paid in stock, the
Committee believes that these compensation practices will help ensure
alignment with the interests of the Corporation's stockholders. While
recognizing that fluctuations of the business cycles may negatively impact
financial performance from time to time, the Committee believes that the
strong leadership provided by the Corporation's senior executives and the
infrastructure that they have put in place have positioned the Corporation to
capitalize on the opportunities that lie ahead.
Compensation Committee Interlocks and Insider Participation
This report is submitted by the members of the Compensation Committee listed
below, none of whom is or has been a former employee of the Corporation. They
have all served as members of the Committee since the Distribution and the
Committee met twice during fiscal 1998.
COMPENSATION COMMITTEE
Martin M Hale (Chairman) Dr Robert E Bew Dr Benito Fiore
16
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total return to stockholders on the
common stock of the Corporation since the date of the spin-off from Great
Lakes Chemical Corporation and S&P 500 Composite and Chemicals (Specialty)
Indices over the same period.
[PERFORMANCE GRAPH APPEARS HERE]
Value of $100 Investment made May 26, 1998*
<TABLE>
<CAPTION>
5/26/98 6/30/98 9/30/98 12/31/98
------- ------- ------- --------
<S> <C> <C> <C> <C>
S&P 500 Composite Index................... $100.00 103.64 92.96 112.36
S&P Chemicals (Specialty) Index........... $100.00 89.58 76.94 82.65
Octel Corp. (OTL)......................... $100.00 87.91 60.44 60.99
</TABLE>
* excludes purchase commissions
17
<PAGE>
INFORMATION RESPECTING THE CORPORATION'S
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accountants of the Corporation, selected by the Board
for 1998, are PricewaterhouseCoopers, 1 London Bridge, London, SE1 9QL,
England. A representative of PricewaterhouseCoopers is expected to be present
at the Annual Meeting and will have the opportunity to make a statement if
such representative desires to do so. The representative is also expected to
be available to respond to appropriate questions.
OTHER MATTERS
As of the date of this Proxy Statement, management is not aware of any
matters to be presented at the meeting other than the matters specifically
stated in the Notice of Meeting and discussed in the Proxy Statement. If any
other matter or matters are properly brought before the meeting, the persons
named in the enclosed proxy have discretionary authority to vote the proxy on
each such matter in accordance with their judgement.
SOLICITATION AND EXPENSES OF SOLICITATION
The solicitation of proxies will be made initially by mail. The
Corporation's directors, officers and employees may also solicit proxies in
person or by telephone without additional compensation. In addition, proxies
may be solicited be certain banking institutions, brokerage firms, custodians,
trustees, nominees and fiduciaries who will mail material to or otherwise
communicate with the beneficial owners of shares of the Corporation's Common
Stock. All expenses of solicitation of proxies will be paid by the
Corporation.
ANNUAL REPORT AND FORM 10-K
Copies of the Corporation's Annual Report to Stockholders, which includes
portions of the Corporation's Annual Report on Form 10-K for the Fiscal Year
ended December 31, 1998 are being mailed with this Proxy Statement to each
stockholder entitled to vote at the Annual Meeting. Stockholders not receiving
a copy of the Annual Report may obtain one by writing or calling Ms Heather
Ashworth, Investor Relations Director, Octel Corp., c/o The Associated Octel
Company Limited, PO Box 17, Oil Sites Road, Ellesmere Port, South Wirral, L65
4HF, England, telephone 011-44-151-356-6100.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
The Corporation anticipates holding its 2000 Annual Meeting of Stockholders
on Tuesday, May 9, 2000.
Under the regulations of the Securities and Exchange Commission, any
stockholder desiring to make a proposal to be acted upon at the 2000 Annual
Meeting of Stockholders must present such proposals to the Secretary of the
Corporation at its principal office at 200 Executive Drive, Newark, DE 19702,
U.S.A., not later than December 6, 1999, in order for the proposal to be
considered for inclusion in the Corporation's Proxy Statement.
18
<PAGE>
Stockholder proposals or director nominations not included in a Proxy
Statement for an Annual Meeting must comply with the advance notice procedures
and information requirements set forth in the Bylaws of the Corporation in
order to be properly brought before that Annual Meeting of Stockholders.
By order of the Board of Directors
/S/ GRAHAM DE M LEATHES
Graham de M Leathes
Corporate Secretary
March 30, 1999
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD
19
<PAGE>
PROXY PROXY
1999 OCTEL CORP. 1999
P This Proxy is Solicited on behalf of the Board of Directors
R The undersigned hereby appoints DENNIS J. KERRISON, ALAN G. JARVIS
AND GRAHAM de M. LEATHES, and each of them with full power of
O substitution, as the proxies of the undersigned, to attend the Annual
Meeting of Stockholders to be held on Tuesday, May 11, 1999, at 10:00
X a.m. and any adjournment or postponement thereof, and to vote the stock
the undersigned would be entitled to vote, if present, on the items
Y listed on the reverse side of this proxy card.
THIS PROXY WILL BE VOTED AS SPECIFIED; OR IF NO CHOICE IS SPECIFIED, IT
WILL BE VOTED FOR THE ELECTION OF THE DIRECTOR NOMINEES AND THE ELECTION
OF PRICEWATERHOUSECOOPERS AS INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL
1999.
ELIMINATE DUPLICATE MAILINGS
SEC rules require the Corporation to mail an annual report to every
stockholder even if there are multiple stockholders in the same
household. If you are a stockholder of record and have the same address
as other stockholders of record, you may authorize the Corporation to
discontinue mailings of multiple annual reports. To do so, mark the box
(see over) on each proxy card for which you do not wish to receive an
annual report.
Applicable law requires the Corporation to send separate proxy
statements and proxy cards for all of your accounts.
[_] Mark here for address change
________________________________________________
New Address
________________________________________________ -----------
SEE REVERSE
________________________________________________ SIDE
(Please sign on the reverse side) -----------
- -------------------------------------------------------------------------------
.FOLD AND DETACH HERE.
<PAGE>
COMMAND FINANCIAL PRESS CORP. - NEW YORK (212) 274-8070 REV 06.0
16:00 3/22/99 DH 13812 PROXY, 2
EQUISERVE - OCTEL CORP. EQUISERVE - REGULAR/PORTRAIT
- -------------------------------------------------------------------------------
[X] PLEASE MARK YOUR 3177
VOTES AS IN THIS
EXAMPLE.
<TABLE>
<CAPTION>
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2
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1. Election of FOR WITHHELD 2. Election of FOR AGAINST ABSTAIN
Directors [_] [_] Nominees: PricewaterhouseCoopers [_] [_] [_]
Thomas M Felton and as independent public
Charles M Hale accountants for fiscal
1999.
For, except vote withheld from the following nominee(s):
3. In their discretion, the Proxies are authorized to vote upon
any other matter which may properly come before the meeting.
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Please check here to discontinue the annual [_]
report mailing for this account.
Please sign exactly as name appears hereon.
Joint owners should each sign personally. Where
applicable, indicate your official position or
representation capacity.
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SIGNATURE(S) DATE
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FOLD AND DETACH HERE.
