<PAGE>
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
ETHYL CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
( ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) 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:
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:
(X) 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:
<PAGE>
E T H Y L C O R P O R A T I O N
330 SOUTH FOURTH STREET
P.O. BOX 2189
RICHMOND, VIRGINIA 23217
(Ethyl logo)
ANNUAL MEETING OF SHAREHOLDERS
March 16, 1995
To the Shareholders:
Enclosed is our annual report describing Ethyl's operations during the past
year. You are encouraged to read this report, which summarizes major corporate
developments during the year.
You are cordially invited to attend the annual meeting of shareholders to be
held in the RESTORED GUN FOUNDRY BUILDING OF THE TREDEGAR IRON WORKS, 500
TREDEGAR STREET, in Richmond, Virginia, on Thursday, April 13, 1995, at 11:00
A.M., Eastern Daylight Time. A formal notice of the meeting, together with a
proxy statement and proxy form, is enclosed with this letter. The notice points
out that you will be asked to elect a Board of Directors, approve an amendment
to the Corporation's Restated Articles of Incorporation to eliminate one class
of preferred stock and redesignate the remaining class, and approve the
designation of auditors for the coming year. You also will be asked to vote on a
shareholder proposal regarding the composition of the Corporation's Board of
Directors.
Please read the notice and proxy statement carefully, complete the proxy form
and mail it promptly.
Sincerely yours,
BRUCE C. GOTTWALD
CHAIRMAN OF THE BOARD
CHIEF EXECUTIVE OFFICER
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of the holders of shares of
Common Stock of Ethyl Corporation (the "Corporation") will be held in the
RESTORED GUN FOUNDRY BUILDING OF THE TREDEGAR IRON WORKS, 500 TREDEGAR STREET,
Richmond, Virginia, on Thursday, April 13, 1995, at 11:00 A.M., Eastern Daylight
Time, for the following purposes:
1. To elect a Board of Directors to serve for the ensuing year;
2. To amend the Corporation's Restated Articles of Incorporation to reduce
the authorize shares of preferred stock to a single class;
3. To approve the designation by the Board of Directors of Coopers &
Lybrand L.L.P. as auditors for the fiscal year ending December 31,
1995;
4. To vote upon a shareholder proposal regarding the structure of the
Corporation's Board of Directors; and
5. To transact such other business as may properly come before the
meeting.
Holders of shares of Ethyl Common Stock of record at the close of business
on February 24, 1995, will be entitled to vote at the meeting.
You are requested to fill in, sign, date and return the enclosed proxy
promptly, regardless of whether you expect to attend the meeting. A postage-paid
return envelope is enclosed for your convenience.
If you are present at the meeting, you may vote in person even if you
already have sent in your proxy.
By Order of the Board of Directors
E. WHITEHEAD ELMORE, SECRETARY
March 16, 1995
<PAGE>
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
ETHYL CORPORATION
TO BE HELD APRIL 13, 1995
APPROXIMATE DATE OF MAILING -- MARCH 16, 1995
Proxies in the form enclosed are solicited by the Board of Directors for
the Annual Meeting of Shareholders to be held on Thursday, April 13, 1995. Any
person giving a proxy may revoke it at any time before it is voted by delivering
another proxy, or written notice of revocation, to the Secretary of the
Corporation. A proxy, if executed and not revoked, will be voted, and, if it
contains any specific instructions, will be voted in accordance with such
instructions.
On February 24, 1995, the date for determining shareholders entitled to
vote at the meeting, there were outstanding 118,434,401 shares of Ethyl Common
Stock. Each share of Ethyl Common Stock is entitled to one vote.
The election of each nominee for director requires the affirmative vote of
the holders of a plurality of the shares of Ethyl Common Stock voted in the
election of directors. Votes that are withheld and shares held in street name
("Broker Shares") that are not voted in the election of directors will not be
included in determining the number of votes cast. Unless otherwise specified in
the accompanying form of proxy, it is intended that votes will be cast for the
election of all of the nominees as directors. The approval of the proposed
amendments to the Restated Articles of Incorporation requires the affirmative
vote of the holders of a majority of the outstanding shares of Ethyl Common
Stock. Abstentions and Broker Shares that are not voted on the matter will have
the same effect as a negative vote. The approval of the shareholder proposal
requires that the votes cast by the holders of Ethyl Common Stock in favor of
the matter exceed the votes cast opposing the matter. Abstentions and Broker
Shares that are not voted on the matter will not be included in determining the
number of votes cast in favor or in opposition of the matter.
The cost of the solicitation of proxies will be borne by the Corporation.
In addition to the use of the mails, proxies may be solicited personally or by
telephone by regular employees of the Corporation. Corporate Investor
Communications, Inc., has been engaged to assist in the solicitation of proxies.
The Corporation will pay that firm $7,000 for its services and reimburse its
out-of-pocket expenses.
The Corporation's street address is 330 South Fourth Street, Richmond,
Virginia 23219.
ELECTION OF DIRECTORS
Proxies will be voted for the election as directors for the ensuing year of
the persons named below (or if for any reason unavailable, of such substitutes
as the Board of Directors may designate). The Board of Directors has no reason
to believe that any of the nominees will be unavailable.
LLOYD B. ANDREW; age 71; director since 1984; retired, former Executive Vice
President and Chief Financial Officer of the Corporation (1984-1989). Other
directorship: Albemarle Corporation.
WILLIAM W. BERRY; age 62; director since 1983; retired, former Chairman of the
Board of Dominion Resources, Inc. (holding company for Virginia Electric
and Power Company) (1986-1992); retired Chairman of the
1
<PAGE>
Board of Virginia Power Company (public utility) (1986-1992). Other
directorships: Albemarle Corporation, Scott & Stringfellow Financial Corp.
and Universal Corporation.
PHYLLIS L. COTHRAN; age 48; director since February 23, 1995; President and
Chief Operating Officer of Trigon Blue Cross Blue Shield since 1990. Other
directorships: Tredegar Industries, Inc. and Central Fidelity Bank.
ALLEN C. GOOLSBY; age 55, director since 1994; Partner, Hunton & Williams
(attorneys). Other directorships: First Colony Corporation and Noland
Company.
BRUCE C. GOTTWALD; age 61; director since 1962; Chairman of the Board, Chairman
of the Executive Committee and Chief Executive Officer since March 1, 1994,
having served as President, Chief Executive Officer and Chief Operating
Officer of the Corporation from April 23, 1992, and having previously
served as President and Chief Operating Officer of the Corporation. Other
directorships: Albemarle Corporation, CSX Corporation, First Colony
Corporation, James River Corporation and Tredegar Industries, Inc.
BRUCE C. GOTTWALD, JR.; age 37; director since 1992; Chairman of the Board and
Chief Executive Officer of First Colony Corporation since October 8, 1992;
Vice President and Treasurer of the Corporation from February 27, 1992 to
July 1, 1993, having served as Treasurer (August 1, 1989 - February 26,
1992), Assistant Corporate Controller (April 1, 1989 - July 31, 1989) and
Assistant Treasurer (August 1, 1988 - March 31, 1989) of the Corporation
prior thereto. Other directorships: Albemarle Corporation, First Colony
Corporation, Signet Banking Corporation and Paragon Portfolio.
FLOYD D. GOTTWALD, JR.; age 72; director since 1956; Chairman of the Board and
Chief Executive Officer of Albemarle Corporation since March 1, 1994; Vice
Chairman of the Board of Ethyl since March 1, 1994, having served as
Chairman of the Board and Chairman of the Executive Committee of the
Corporation from April 23, 1992, and having previously served as Chairman
of the Board, Chairman of the Executive Committee and Chief Executive
Officer. Other directorships: Albemarle Corporation, First Colony
Corporation and Tredegar Industries, Inc.
THOMAS E. GOTTWALD; age 34; director since 1994; President and Chief Operating
Officer of the Corporation since March 1, 1994, having served as Vice
President of the Corporation from August 1, 1991, to March 1, 1994; and as
General Manager of Tredegar Film Products, a division of Tredegar
Industries, Inc., prior thereto.
WILLIAM M. GOTTWALD, MD; age 47; director since 1992; Senior Vice President of
the Corporation since March 1, 1994, having served as Vice President of the
Corporation since November 1, 1988, and as Chairman of the Board and
President of the Corporation's pharmaceuticals subsidiary since April 27,
1987. Other directorships: Albemarle Corporation and First Colony
Corporation.
GILBERT M. GROSVENOR; age 63; director since 1985; President and Chairman of the
National Geographic Society (magazine publisher and scientific society).
Other directorships: Albemarle Corporation, Chesapeake and Potomac
Telephone Company, Chevy Chase Savings Bank (FSB), Charles Allmon Trust,
Inc., B.F. Saul Real Estate Investment Trust, Saul Centers, Inc., and
Marriott International, Inc.
ANDRE B. LACY; age 55; director since 1981; Chairman of the Board (since 1992),
Chief Executive Officer and President of LDI Management, Inc., Managing
General Partner, LDI, Ltd. (industrial and investment limited partnership).
Other directorships: Albemarle Corporation, IPALCO Enterprises, Inc.,
Patterson Dental Co. and Tredegar Industries, Inc.
2
<PAGE>
EMMETT J. RICE; age 75; director since 1988; retired, former member of the Board
of Governors of the Federal Reserve System. Other directorships: Albemarle
Corporation, Tredegar Industries, Inc., and Jardine-Fleming China Region
Fund.
SIDNEY BUFORD SCOTT; age 62; director since 1959; Chairman of the Board of Scott
& Stringfellow, Inc. (investment bankers and brokers). Other directorships:
Albemarle Corporation and Great Eastern Energy & Development Corporation.
CHARLES B. WALKER; age 56; director since 1989; Vice Chairman of the Board,
Chief Financial Officer and Treasurer of the Corporation and Albemarle
Corporation since March 1, 1994, having served as Executive Vice President
and Chief Financial Officer of the Corporation since August 1, 1989,
Treasurer of the Corporation since July 1, 1993, Executive Vice President,
Chief Financial Officer and Treasurer of the Corporation (February 1,
1989-July 31, 1989), and Executive Vice President and Treasurer of the
Corporation (November 1, 1988-January 31, 1989). Other directorships:
Albemarle Corporation, First Colony Corporation and Nations Fund
Trust/Nations Fund, Inc.
In 1994, each director attended at least 75% of the aggregate of (i) the
total number of meetings of all committees of the Board on which the director
then served and (ii) the total number of meetings of the Board of Directors held
during 1994 while he was a member of the Board of Directors. Five meetings of
the Corporation's Board of Directors were held during 1994.
The Corporation's executive committee consists of Messrs. Bruce C.
Gottwald, Floyd D. Gottwald, Jr., Thomas E. Gottwald, William M. Gottwald, MD
and Charles B. Walker. The executive committee acts not only as the executive
committee of the Board of Directors but also as the Corporation's principal
management committee. During 1994, the executive committee met on eight
occasions as the executive committee of the Board of Directors and on fifteen
occasions as the principal management committee.
Messrs. Berry, Grosvenor, Lacy and Scott serve on the Corporation's audit
committee. During 1994, the audit committee met twice. The audit committee
reviews the Corporation's internal audit and financial reporting functions and
the scope and results of the audit performed by the Corporation's independent
accountants and matters relating thereto and reports thereon to the Board of
Directors. The audit committee also reviews audit fees and recommends to the
Board of Directors the engagement of the independent accountants of the
Corporation.
The Corporation's nominating committee currently consists of Messrs. Bruce
C. Gottwald, Lacy and Scott. During 1994, the nominating committee did not meet.
The nominating committee recommends candidates for election as directors and in
some cases the election of officers. The Corporation's bylaws provide that a
shareholder of the Corporation entitled to vote for the election of directors
may nominate persons for election to the Board by mailing written notice to the
Secretary of the Corporation not later than (i) with respect to an election to
be held at an annual meeting of shareholders, 60 days prior to such meeting, and
(ii) with respect to an election to be held at a special meeting of shareholders
for the election of directors, the close of business on the seventh day
following the date on which notice of such meeting is first given to
shareholders. Such shareholder's notice shall include (i) the name and address
of the shareholder and of each person to be nominated, (ii) a representation
that the shareholder is a holder of record of stock of the Corporation entitled
to vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate each person specified, (iii) a description of all
understandings between the shareholder and each nominee and any other person
(naming such person) pursuant to which the nomination is to be made by the
shareholder, (iv) such other information regarding each nominee as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Securities and
3
<PAGE>
Exchange Commission, had the nominee been nominated by the Board of Directors
and (v) the consent of each nominee to serve as a director of the Corporation if
so elected.
Messrs. Grosvenor, Berry and Rice currently serve as the Corporation's
bonus, salary and stock option committee. During 1994, the bonus, salary and
stock option committee (the "Committee") met on five occasions. This committee
approves the salaries of management-level employees. It also approves all bonus
awards, certain consultant agreements and initial salaries of new
management-level personnel, and grants options under the Corporation's Incentive
Stock Option Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Floyd D. Gottwald, Jr., and Bruce C. Gottwald are brothers. William M.
Gottwald, MD, a director and Senior Vice President of the Corporation, is a son
of Floyd D. Gottwald, Jr. Thomas E. Gottwald, a director and President of the
Corporation, and Bruce C. Gottwald, Jr., a director, are sons of Bruce C.
Gottwald. The Gottwalds may be deemed to be control persons of the Corporation.
Hunton & Williams regularly acts as counsel to the Corporation. Allen C.
Goolsby, a director of the Corporation, is a Partner in Hunton & Williams.
Based solely on its review of the forms required by Section 16(a) of the
Securities Exchange Act of 1934 that have been received by the Corporation, the
Corporation believes that all filing requirements applicable to its officers,
directors and beneficial owners of greater than 10% of its Common Stock have
been complied with except that Dr. John T. Marvel, a former Vice President of
the Corporation who retired on January 1, 1994, neglected to file a Form 4 until
June 27, 1994, with respect to two sales of the Corporation's Common Stock in
March 1994.
STOCK OWNERSHIP
The following table lists any person (including any "group" as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934) who, to the
knowledge of the Corporation, was the beneficial owner as of December 31, 1994,
of more than 5% of the outstanding voting shares of the Corporation.
<TABLE>
<CAPTION>
TITLE OF NAME AND ADDRESS OF NUMBER OF
CLASS BENEFICIAL OWNERS SHARES PERCENT OF CLASS
<S> <C> <C> <C>
Common Stock Floyd D. Gottwald, Jr., and 21,011,378(b)(c) 17.74%
Bruce C. Gottwald (a)
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23217
NationsBank Corporation and 8,723,552 7.4%
related entities (d)
c/o NationsBank Corporation
NationsBank Plaza
Charlotte, North Carolina 28255
</TABLE>
(a) Floyd D. Gottwald, Jr., and Bruce C. Gottwald (the "Gottwalds"),
together with members of their immediate families, may be deemed to be a "group"
for purposes of Section 13(d)(3) of the Securities Exchange
4
<PAGE>
Act of 1934, although there is no agreement among them with respect to the
acquisition, retention, disposition or voting of Ethyl Common Stock.
(b) The Gottwalds, individually or collectively, have sole voting and
investment power over all of the shares disclosed except 15,259,567 shares held
by wives, children, and in certain trust relationships, some of which might be
deemed to be beneficially owned by the Gottwalds under the rules and regulations
of the Securities and Exchange Commission, but as to which the Gottwalds
disclaim beneficial ownership. Shares owned by the adult children of Floyd D.
Gottwald, Jr., and Bruce C. Gottwald are included in the holdings of the
Gottwalds as a group, but are not attributed to Floyd D. Gottwald, Jr., or Bruce
C. Gottwald other than in this table. This amount includes 186,504 shares of
Ethyl Common Stock, with respect to which the Gottwalds or members of their
immediate families have the right to acquire beneficial ownership within 60 days
of December 31, 1994, pursuant to the Corporation's Stock Option Plan.
(c) This amount includes shares owned by Bruce C. Gottwald, Jr., a director
of the Corporation, and by Thomas E. Gottwald, President of the Corporation,
both of whom are sons of Bruce C. Gottwald. Also included are shares held by
William M. Gottwald, MD, a Senior Vice President and director of the Corporation
and the son of Floyd D. Gottwald, Jr. See the table on page 6 for information on
the share ownership of each member of the Gottwald family who is an executive
officer or director of the Corporation. This amount includes any shares owned of
record by the Trustees under various employee savings plans for the benefit of
the Gottwalds and the members of their immediate families. This amount does not
include shares held by the Trustees of such plans for the benefit of other
employees. Shares held under the Corporation's savings plan are voted by the
Trustee in accordance with instructions solicited from employees participating
in the plan. If a participating employee does not give the Trustee voting
instructions, his shares generally are voted by the Trustee in accordance with
the Board of Directors' recommendations to the shareholders. Because the
Gottwalds are executive officers, directors and the largest shareholders of the
Corporation, they may be deemed to be control persons of the Corporation and to
have the capacity to control any such recommendation of the Board of Directors.
(d) The NationsBank Corporation related entities are ASB Capital
Management, Inc., NationsBank, N.A., NationsBank of Florida, N.A., NationsBank
of Georgia, N.A., NationsBank of South Carolina, N.A., NationsBank of Tennessee,
N.A., NationsBank of Virginia, N.A., NationsBank Texas Bancorporation, Inc.,
NationsBank of Texas, N.A., NationsBank Trust Company, N.A., and N.B. Holdings
Corporation. The information contained herein with respect to NationsBank
Corporation and the related entities listed herein is based on a Schedule 13G
filed by such entities with the Securities and Exchange Commission, a copy of
which was received by the Corporation on February 17, 1995. Such filing further
stated that the acquisition of such shares was in the ordinary course of
business and not in connection with or as a participant in any transaction
having the purpose or effect of changing or influencing the control of the
Corporation. The shares held by NationsBank Corporation and related entities are
held in fiduciary accounts.
The following table sets forth as of December 31, 1994, the beneficial
ownership of Ethyl Common Stock by all directors of the Corporation, the Chief
Executive Officer and the four next most highly compensated executive officers
and all directors and executive officers of the Corporation as a group. Unless
otherwise indicated, each person listed below has sole voting and investment
power over all shares beneficially owned by him.
5
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES TOTAL
NAME OF BENEFICIAL OWNER WITH SOLE VOTING AND WITH SHARED VOTING NUMBER PERCENT OF
OR NUMBER OF PERSONS IN GROUP INVESTMENT POWER (1) AND INVESTMENT POWER OF SHARES CLASS (2)
<S> <C> <C> <C> <C>
Lloyd B. Andrew 39,969 0 39,969
William W. Berry 1,624 1,758(3) 3,382
Phyllis L. Cothran 0 0 0
Allen C. Goolsby 2,700 2,024 4,724
Bruce C. Gottwald 5,034,182 932,594 5,966,776(4) 5.04%
Bruce C. Gottwald, Jr. 502,045 3,724,307 4,226,352(5) 3.57%
Floyd D. Gottwald, Jr. 400,874 6,168,632 6,569,506(6) 5.55%
Thomas E. Gottwald 506,604 3,723,212 4,229,816(7) 3.57%
William M. Gottwald, MD 538,622 8,592,801 9,068,423(8) 7.65%
Gilbert M. Grosvenor 2,734 0 2,734
Andre B. Lacy 31,066(9) 925,000 956,066(9)
Emmett J. Rice 834 0 834
Sidney Buford Scott 90,534 12,000(10) 102,534
Charles B. Walker 212,172 0 212,172
Directors and executive officers
as a group (24 persons) 7,846,137 14,181,830 22,027,967 18.50%
</TABLE>
(1) The amounts in this column include shares of Ethyl Common Stock with
respect to which certain persons have the right to acquire beneficial
ownership within 60 days of December 31, 1994, pursuant to the
Corporation's Stock Option Plan: Bruce C. Gottwald: 25,243 shares; Floyd
D. Gottwald, Jr.: 0 shares; Thomas E. Gottwald: 93,936 shares; William M.
Gottwald, MD: 67,325 shares; Charles B. Walker: 157,149 shares; and
directors and executive officers as a group: 616,185 shares.
(2) In accordance with the rules of the Securities and Exchange Commission
some shares are attributed to more than one member of the Gottwald
families, but are counted only once in the information provided for
directors and executive officers as a group. Except as indicated, each
person or group owns less than 1% of Ethyl Common Stock.
(3) Mr. Berry disclaims beneficial ownership of all 1,758 of such shares.
(4) Mr. Gottwald disclaims beneficial ownership of 932,594 of such shares.
(5) Mr. Gottwald disclaims beneficial ownership of 3,778,065 of such shares.
This amount includes 3,186,102 shares of Ethyl Common Stock that Mr.
Gottwald may be deemed to own beneficially. Such shares constitute Mr.
Gottwald's interest as beneficiary of a trust of which he is a co-trustee.
(6) Mr. Gottwald disclaims beneficial ownership of 1,351,692 of such shares.
(7) Mr. Gottwald disclaims beneficial ownership of 3,761,728 of such shares.
This amount includes 3,186,102 shares of Ethyl Common Stock that Mr.
Gottwald may be deemed to own beneficially. Such shares constitute Mr.
Gottwald's interest as beneficiary of a trust of which he is a co-trustee.
(8) Dr. Gottwald disclaims beneficial ownership of 8,702,092 of such shares.
This amount includes 3,186,102 shares of Ethyl Common Stock that Dr.
Gottwald may be deemed to own beneficially. Such shares constitute Dr.
Gottwald's interest as beneficiary of a trust of which he is a co-trustee.
This amount also includes 4,816,940 shares of Ethyl Common Stock that Dr.
Gottwald may be deemed to own beneficially as co-trustee of a trust for
the benefit of Floyd D. Gottwald, Jr.
(9) Mr. Lacy disclaims beneficial ownership of 29,483 of such shares.
(10) Mr. Scott disclaims beneficial ownership of all 12,000 of such shares.
6
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table presents information relating to total compensation of
the Chief Executive Officer and the four next most highly compensated executive
officers of the Corporation for the fiscal years ended December 31, 1994, 1993
and 1992.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
OTHER ANNUAL OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) SARS (#)(2) COMPENSATION
<S> <C> <C> <C> <C> <C> <C>
Bruce C. Gottwald 1994 $770,000 $265,000 -- $ 33,532 38,500(3)
Chairman of the Board and 1993 770,000 265,000 -- 30,608 38,500
Chief Executive Officer 1992 700,833 291,750 -- 3,300 33,937
Floyd D. Gottwald, Jr. 1994 378,167 -- -- -- 6,375(4)
Vice Chairman of the Board 1993 754,000 260,000 -- 30,608 21,992
1992 736,500 286,750 -- 3,300 36,913
Thomas E. Gottwald 1994 332,000 200,000 -- 413,936 16,600(5)
President and 1993 199,917 125,000 -- 9,576 9,996
Chief Operating Officer 1992 185,000 96,000 -- 3,300 9,250
Charles B. Walker 1994 253,333 118,000 -- 237,149 12,992(6)
Vice Chairman of the Board, 1993 391,000 225,000 -- 98,018 19,550
Chief Financial Officer and 1992 375,167 251,750 -- 3,300 18,883
Treasurer
William M. Gottwald, MD 1994 192,883 100,000 -- 307,325 10,056(7)
Senior Vice President 1993 151,475 100,000 -- 5,008 7,574
1992 143,750 88,375 -- 3,300 7,163
</TABLE>
(1) None of the named executive officers received Other Annual Compensation for
1994 in excess of the lesser of $50,000 or 10% of combined salary and bonus
for 1994.
(2) All options granted in 1993 were granted to replace previously
granted options pursuant to the anti-dilution provisions of the
Corporation's Incentive Stock Option Plan in connection with the spin-off of
First Colony Corporation. Certain options granted in 1994 were granted to
replace previously granted options pursuant to the anti-dilution provisions
of the Corporation's Incentive Stock Option Plan in connection with the
spin-off of Albemarle Corporation.
(3) Includes contributions to the Corporation's savings plan ($7,500, $10,000
and $10,000) and accruals in the Corporation's excess benefit plan ($31,000,
$28,500 and $23,937) for 1994, 1993 and 1992, respectively.
(4) Includes contributions to the Corporation's savings plan ($6,375, $10,000
and $10,000) and accruals in the Corporation's excess benefit plan ($0,
$11,922 and $26,913) for 1994, 1993 and 1992, respectively.
(5) Includes contributions to the Corporation's savings plan ($7,500, $9,996 and
$9,250) and accruals in the Corporation's excess benefit plan ($9,100, $0
and $0) for 1994, 1993 and 1992, respectively.
(6) Includes contributions to the Corporation's savings plan ($7,500, $10,000
and $10,000) and accruals in the Corporation's excess benefit plan ($5,492,
$9,550 and $8,883) for 1994, 1993 and 1992, respectively.
(7) Includes contributions to the Corporation's savings plan ($7,500, $7,574 and
$7,163) and accruals in the Corporation's excess benefit plan ($2,556, $0
and $0), respectively.
7
<PAGE>
Floyd D. Gottwald, Jr., and Charles B. Walker also serve as officers of
Albemarle Corporation and are compensated separately by Albemarle Corporation
for such service.
The following tables present information concerning stock options and stock
appreciation rights ("SARs") granted to the Chief Executive Officer and the four
next most highly compensated executive officers of the Corporation and exercises
of options and SARs by such persons.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Each of these options relates to Ethyl Common Stock and includes a tandem
SAR.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF STOCK
% OF TOTAL OPTIONS/SARS EXERCISE OR PRICE APPRECIATION FOR
OPTIONS/SARS GRANTED TO EMPLOYEES IN BASE PRICE OPTION TERM
NAME GRANTED (#) FISCAL YEAR ($) EXPIRATION DATE 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Bruce C. Gottwald 8,289(1,4) 0.23% 12.88 09/14/94 0 0
9,434(1,5) 0.26% 10.85 11/04/95 28,251 62,541
8,484(1,6) 0.24% 12.69 12/18/96 29,715 65,781
7,325(1,7) 0.21% 14.11 12/30/97 28,526 63,150
Thomas E. Gottwald 6,611(1,6) 0.19% 12.69 12/18/96 23,155 51,259
7,325(1,7) 0.21% 14.11 12/30/97 28,526 63,150
400,000(9) 11.20% 12.50 02/28/04 3,145,000 7,970,000
Charles B. Walker 13,094(1,2) 0.37% 11.22 09/23/97 92,409 234,182
8,295(1,3) 0.23% 9.00 09/21/98 46,958 119,000
7,909(1,4) 0.22% 11.71 09/14/89 58,254 147,627
9,399(1,5) 0.26% 9.86 11/04/00 58,292 147,723
8,643(1,6) 0.24% 11.54 12/18/01 62,737 158,986
89,809(1,7) 2.51% 11.54 12/18/01 651,893 1,652,015
100,000(9) 2.80% 12.50 02/29/04 786,250 1,992,500
William M. Gottwald, MD 7,325(1,7) 0.21% 14.11 12/30/97 28,526 63,150
300,000(9) 8.40% 12.50 02/28/04 2,358,750 5,977,500
</TABLE>
(1) Options granted during 1994 to replace previously granted options pursuant
to the anti-dilution provisions of the Company's Incentive Stock Option Plan
in connection with the spin-off of Albemarle Corporation.
(2) Became exercisable 9/24/88.
(3) Became exercisable 9/24/89.
(4) Became exercisable 9/15/90.
(5) Became exercisable 11/05/91.
(6) Became exercisable 12/19/92.
(7) Became exercisable 12/31/93.
(8) Became fully exercisable 12/31/93.
(9) These options become exercisable based on the growth in the operating
earnings of the Corporation (subject to any adjustments that the bonus,
salary and stock option committee concludes are necessary to reflect the
intent of the plan) as follows:
8
<PAGE>
<TABLE>
<CAPTION>
PERCENT
ANNUAL EARNINGS EXERCISABLE
<S> <C>
1993 Earnings x 1.10 20%
1993 Earnings x 1.21 40%
1993 Earnings x 1.33 60%
1993 Earnings x 1.46 80%
1993 Earnings x 1.61 100%
</TABLE>
The initial options alternatively become exercisable based on the
improvement in the market price for the Corporation's Common Stock as reflected
by the closing price for the Corporation's Common Stock on the last trading day
of the calendar year as follows:
<TABLE>
<CAPTION>
PERCENT
ANNUAL EARNINGS EXERCISABLE
<S> <C>
Option Price on Grant Date x 1.10 20%
Option Price on Grant Date x 1.212 40%
Option Price on Grant Date x 1.333 60%
Option Price on Grant Date x 1.464 80%
Option Price on Grant Date x 1.615 100%
</TABLE>
Options are exercisable in any event beginning thirty days prior to the
expiration date or, if earlier, in the event of retirement, termination as a
result of permanent and total disability or death or upon a change in control.
Floyd D. Gottwald, Jr., did not receive any options during 1994.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS/SARS AT
OPTIONS/SARS AT FY-END (#)(1)
SHARES ACQUIRED VALUE FY-END ($)(2)
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Bruce C. Gottwald -- -- 25,243 -- -- --
Floyd D. Gottwald, Jr. -- -- -- -- -- --
Thomas E. Gottwald -- -- 13,936 400,000 -- --
Charles B. Walker -- -- 137,149 100,000 5,184 --
William M. Gottwald, MD -- -- 7,325 300,000 -- --
</TABLE>
(1) Each of these options relates to Ethyl Common Stock and includes a tandem
SAR.
(2) These values are based on $9.625, the closing price of Ethyl Common Stock on
the New York Stock Exchange on December 30, 1994.
RETIREMENT BENEFITS
The following table illustrates under the Corporation's pension plan for
salaried employees the estimated benefits upon retirement at age 65, determined
as of December 31, 1994, to persons with specified earnings and years of pension
benefit service. To the extent benefits payable at retirement exceed amounts
that may be payable under applicable provisions of the Internal Revenue Code,
they will be paid under the Corporation's excess benefit or supplemental
retirement plans, as applicable. This table includes the amounts that would be
payable under such plans.
9
<PAGE>
ESTIMATED ANNUAL BENEFITS PAYABLE AT RETIREMENT*
<TABLE>
<CAPTION>
YEARS OF PENSION BENEFIT SERVICE AND ESTIMATED ANNUAL BENEFITS
FINAL-AVERAGE EARNINGS 10 15 20 25 30 35 40 50
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 300,000 $ 44,025 $ 66,040 $ 88,055 $110,070 $132,080 $154,095 $176,110 $220,135
350,000 51,525 77,290 103,055 128,820 154,580 180,345 206,110 257,635
400,000 59,025 88,540 118,055 147,570 177,080 206,595 236,110 295,135
450,000 66,525 99,790 133,055 166,320 199,580 232,845 266,110 332,635
500,000 74,025 111,040 148,055 185,070 222,080 259,095 296,110 370,135
550,000 81,525 122,290 163,055 203,820 244,580 285,345 326,110 407,635
600,000 89,025 133,540 178,055 222,570 267,080 311,595 356,110 445,135
650,000 96,525 144,790 193,055 241,320 289,580 337,845 386,110 482,635
700,000 104,025 156,040 208,055 260,070 312,080 364,095 416,110 520,135
750,000 111,525 167,290 233,055 278,820 334,580 390,345 446,110 557,635
800,000 119,025 178,540 238,055 297,570 357,080 416,595 476,110 595,135
850,000 126,525 189,790 253,055 316,320 379,580 442,845 506,110 632,635
900,000 134,025 201,040 268,055 335,070 402,080 469,095 536,110 670,135
950,000 141,525 212,290 283,055 353,820 424,580 495,345 566,110 707,635
1,000,000 149,025 223,540 298,055 372,570 447,080 521,595 596,110 745,135
</TABLE>
* Assumes attainment of age 65 in 1994 and Social Security Covered Compensation
of $24,312.
The benefit formula under the pension plans is based on the participant's
final-average earnings, which are defined as the average of the highest three
consecutive calendar years' earnings (base pay plus 50% of incentive bonuses
paid in any fiscal year) during the 10 consecutive calendar years immediately
preceding the date of determination. The years of pension benefit service for
each of the executive officers named in the above compensation table as of
December 31, 1994, are: Bruce C. Gottwald, 38.750; Floyd D. Gottwald, Jr.,
51.500; Thomas E. Gottwald, 3.475; Charles B. Walker, 13.665; and William M.
Gottwald, MD, 13.9975.
Benefits under the pension plans are computed on the basis of a life
annuity with 60 months guaranteed payments. The benefits listed in the above
compensation table are not subject to deduction for Social Security or other
offset payments.
EXCESS BENEFIT AND SUPPLEMENTAL RETIREMENT PLANS
The Corporation maintains excess benefit and supplemental retirement plans
(the "Supplemental Plans") in the form of nonqualified pension plans that
provide eligible individuals the difference between the benefits they actually
accrue under the qualified employee pension and savings plans of the Corporation
and the benefits they would have accrued under such plans, but for the maximum
benefit and annual addition limitations and the limitation on compensation that
may be recognized thereunder, under the Internal Revenue Code. In addition, on
the recommendation of the Executive Committee of the Corporation's Board of
Directors and with the approval of the bonus, salary and stock option committee,
certain key employees may be granted additional pension service benefits equal
to 4% of final pay for each year of service to the Corporation up to fifteen
years, net of other benefits received from the Corporation, previous employers
and Social Security. Mr. Walker is covered by these Plans. All benefits under
the Supplemental Plans vest upon a Change in Control of the Corporation, as
defined in the Plans.
10
<PAGE>
COMPENSATION OF DIRECTORS
In 1994, each member of the Board of Directors who was not an employee of
the Corporation or any of its subsidiaries was paid (i) $1,000 for attendance at
each Board meeting and (ii) $600 for attendance at each meeting of a committee
of the Board of which he was a member. In addition, each such director was paid
a quarterly fee of $5,000. Employee members of the Board of Directors are not
paid separately for their service on the Board or its committees.
Under the retirement policy for directors, any director retiring from the
Board after age 60 with at least five years' service on the Board will receive
$12,000 per year for life, payable in quarterly installments. Any director
retiring under other circumstances will receive $12,000 per year, payable in
quarterly installments, commencing no earlier than age 60, for a period not to
exceed his years of service on the Board. Such retirement payments to former
directors may be discontinued under certain circumstances.
In 1992, the Corporation's shareholders approved the Non-Employee
Directors' Stock Acquisition Plan (the "Directors Stock Plan"), which provides
that the Corporation shall award on each July 1, to each eligible director that
number of whole shares of Ethyl Common Stock when multiplied by the closing
price of Ethyl Common Stock on the immediately preceding business day, as
reported in The Wall Street Journal, as shall as nearly as possible equal but
not exceed $2,000. The shares of Ethyl Common Stock awarded under the Directors'
Stock Plan are nonforfeitable and the recipient directors immediately and fully
vest in Ethyl Common Stock issued under the Plan. Subject only to such
limitations on transfer as may be specified by applicable securities laws,
directors may sell their shares under the Directors' Stock Plan at any time. The
Directors' Stock Plan provides that no awards may be made after July 1, 2001.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Committee of the Corporation's Board of Directors, which performs the
function of a compensation committee, consists of Messrs. Berry, Grosvenor and
Rice (Chairman). Lloyd B. Andrew, who served on the Committee for part of 1994,
formerly served as Executive Vice President and Chief Financial Officer of the
Corporation. In 1994, he received $100,000 in consulting fees for general
advisory services to the Corporation. Joseph C. Carter, Jr., who served on the
Committee for part of 1994, is a Senior Counsel in Hunton & Williams, which firm
regularly acts as counsel to the Corporation. Dr. M.F. Gautreaux, who served on
the Committee until his death in February 1994, formerly served as Senior Vice
President of the Corporation.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Bonus, Salary and Stock Option Committee of the Board of Directors (the
"Committee") is delegated the power to administer the compensation program of
the Corporation applicable to its executive officers. Accordingly, the Committee
submits this report on executive compensation to the shareholders.
OVERALL OBJECTIVES
The objectives of the Corporation's executive compensation program are to:
(Bullet) Provide balanced, competitive total compensation that will enable
the Corporation to attract, motivate and retain highly qualified executives.
(Bullet) Provide the incentives for enhancing the profitability of the
Corporation by rewarding executives for meeting individual and corporate goals.
11
<PAGE>
(Bullet) Align the financial interests of the executives closely to those
of the shareholders by strongly encouraging executive ownership of the
Corporation's common stock.
In administrating the compensation program the Committee recognizes the
Corporation's basic objectives of achieving a return or equity of at least
twenty percent as well as annual growth in operating earnings of fifteen
percent.
ELEMENTS OF THE PROGRAM
The Committee believes the interests of the shareholders will be best
served if the compensation program consists of cash compensation and equity
ownership. Thus, the program includes three principal parts: base salary, annual
bonuses in cash or cash and stock, and stock options with performance vesting
and tandem stock appreciation rights. The Committee considers all parts of the
program when setting compensation levels or making awards.
The Corporation seeks to maintain its executive compensation packages
slightly above the mid-range of those offered generally in the job markets in
which the Corporation competes for talent and experience. The Corporation's
stock option program is administered likewise to achieve the goal of retaining
experienced executives.
COMPETITIVE MARKET
The Committee uses various compensation surveys provided by compensation
consultants in determining the market for executive pay. The surveys include
companies that are larger and smaller than the Corporation. Some of the surveys
are limited to companies in the petroleum or chemical businesses, including, but
not limited to, companies shown within the Performance Graph. Others include
companies in other industries. References to the "market" in this Report refer
to this survey data.
BASE SALARY
Annual increases in base salary are based on evaluations of past and
current corporate operating profits and individual contribution to the
Corporation's success, time in the position, the overall level of pay
adjustments in the markets the Corporation monitors, market data for the
position, and internal equities among the positions. Corporate operating profit
in 1994 improved over 1993. The Committee considers each of the individual
factors but does not assign a specific value to each factor, and a subjective
element is acknowledged in evaluating each executive's contribution.
During 1994, Thomas E. Gottwald's base salary increased to coincide with
his election as President and Chief Operating Officer of the Corporation. His
base salary approximates the average for comparable companies. In the Summary
Compensation Table, two executive officers' base salaries are lower in 1994 than
in 1993: Messrs. Floyd D. Gottwald, Jr. and Charles B. Walker. This is because
they are also executive officers of Albemarle Corporation, and are performing
services for and receiving compensation from that entity as well. Dr. William M.
Gottwald's base salary was increased in 1994 to reflect his election as a member
of the Corporation's Executive Committee and his assumption of increased
responsibilities for staff support groups.
Base salaries for executive offices in general are in line with salaries
paid in the market, and base salary and bonus together also are in line with the
market.
ANNUAL BONUS
The purpose of the annual bonus is to motivate and reward performance
measured against individual, division, department and corporate objectives.
12
<PAGE>
A bonus reserve is established to achieve the Corporation's compensation
targets. The maximum contribution to the bonus reserve is 4% of the amount by
which operating profits of the Corporation and its subsidiaries, determined by
the independent auditors, exceed $15,000,000. The auditors certified that the
maximum contribution for 1994 under the formula was $6,070,506, but the
Committee, as has been the practice in prior years, did not appropriate the
entire amount. Of this amount, a total of $2,010,750 was awarded in 1995 as 1994
bonuses.
Annual bonus awards are determined by the Committee in conjunction with
senior management, and are based on an evaluation of the performance, level of
responsibility and leadership of the individual executive in relation to overall
corporate results. The evaluation of overall performance of the Corporation in
1994 was based on operating profit and increase in stock value in relation to
competitive peer groups (which may include, but are not limited to, the
companies included in the Performance Graph but, in general, are those included
in the compensation surveys) and attainment of the key goal of completing the
Albemarle spin-off. The Committee does not assign a specific value to each
factor, but did recognize that lead antiknocks represent a mature business while
profits for newer lubricant additive products grew significantly. The increase
in the Corporation's operating profits and stock value did not equal the
performance of certain companies in the peer groups. Some individuals' bonus
awards for 1994 were slightly higher than in 1993, reflecting an increase in
1994 operating results.
STOCK OPTIONS
During 1994, the Committee granted stock options, and tandem stock
appreciation rights, with performance vesting based on meeting either earnings
or stock price targets. The purposes of the plan were to send the message that
incentive awards are earned through performance, and to match executives'
rewards with enhanced shareholder value when that performance has occurred. Most
executive officers of the Corporation received such grants. Bruce C. Gottwald
and Floyd D. Gottwald, Jr., declined them in favor of larger grants for the
remaining executive group.
The number of options granted was well within the range of competitive
practice in spin-off situations, based on information provided by the
Corporation's investment bankers. Going forward, awards will be determined in
accordance with the Corporation's previously stated compensation objective.
Options awarded in March 1994 have an exercise price equal to fair market
value at the date of grant, and a ten-year exercise period. They vest as set
forth in footnote 9 on pages 8-9. In addition, all outstanding options will vest
to executives who are still employed by the Corporation thirty days prior to the
expiration date of the option, or in the event of a change in control.
CEO COMPENSATION
In the past, under the Corporation's executive compensation program, senior
executives' base salaries have compared more favorably to industry pay practices
than the Corporation's annual bonuses and long-term incentive awards. In the
future, greater emphasis will be placed on performance-based incentives. On this
basis, during 1993, Mr. Bruce C. Gottwald, then President of the Corporation,
received a base salary of $770,000.
Mr. Gottwald's 1994 base salary was unchanged from 1993, primarily to
reflect the down-sizing of the Corporation resulting from the Albemarle spin-off
in March 1994.
Mr. Gottwald's 1994 bonus (paid in 1995) of $265,000 represents the
Committee's evaluation of his contribution to the Corporation's overall
performance during the year, particularly the successful spin-off of Albemarle
Corporation, the opening of the Company's world-class Research Center in
Richmond, a significant expansion of manufacturing facilities and the sale of
Whitby Pharmaceuticals. Mr. Gottwald's bonus for 1994 also reflects the
13
<PAGE>
Committee's recognition that the Corporation's operating results reflected a
significant improvement in the Corporation's lubricant and fuels business. The
Committee did not assign a specific value to each factor.
Compensation survey data combining the CEO's base salary and annual bonus
for 1994 places the CEO at approximately the size-adjusted median.
SECTION 162(m)
The Omnibus Budget Reconciliation Act of 1993 (OBRA '93) established
certain criteria for the tax deductibility of compensation in excess of $1
million paid to the Corporation's executive officers. To meet the criteria
applicable to performance-based compensation (as defined in OBRA '93), the
Corporation's bonus plan would have to be amended to limit the Committee's
discretion to determine individuals' bonuses based on individual performance
factors and other factors as the Committee may determine, from time to time, to
be relevant.
The Committee believes that the flexibility to adjust annual bonuses
upward, as well as downward, is an important feature of the plan and one which
serves the best interests of the Corporation by allowing the Committee to
recognize and motivate individual executive officers as circumstances warrant.
Further, the amount of compensation subject to loss of tax deductibility is
extremely small. Consequently, the Committee does not propose at the present
time to amend the plan to comply with the OBRA '93 requirements. Amounts paid
under the plan to the executive officers will count toward the $1 million cap
that is provided in Section 162(m) of OBRA '93. Those portions of the officers'
compensation that are not performance-based (as defined in OBRA '93) and that
exceed the cap will not be tax deductible by the Corporation.
THE BONUS, SALARY AND STOCK OPTION
COMMITTEE
Emmet J. Rice, Chairman
Gilbert M. Grosvenor
William W. Berry
14
<PAGE>
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
VS. S&P 500 AND CHEMICAL COMPOSITE(1)
[INSERT GRAPH HERE]
1989 1990 1991 1992 1993 1994
Ethyl $100.00 $87.48 $106.57 $111.33 $106.70 $ 95.78
S&P 500 $100.00 $96.89 $126.28 $135.88 $149.52 $151.55
Chemical Composite(1) $100.00 $89.32 $118.64 $132.06 $147.82 $163.55
* ASSUMES $100 INVESTED ON LAST DAY OF DECEMBER 1989. DIVIDENDS ARE
REINVESTED QUARTERLY.
(1) The total return information for the Chemical Composite (based on the
companies in the S&P Index in 1993) has been weighted by market
capitalization and includes the following companies in all the S&P
chemical industry groups (basic chemicals, specialty chemicals, and
diversified chemicals): Air Products and Chemicals, Inc., Avery
Dennison Corporation, The Dow Chemical Company, E.I. duPont de Nemours
& Company, Englehard Corp. Ethyl Corporation, FMC Corporation, First
Mississippi Corp., The B.F. Goodrich Company, W.R. Grace & Co., Great
Lakes Chemical Corp., Hercules Incorporated, Monsanto Company, Morton
International, Inc., NL Industries, Inc., Nalco Chemical Co., PPG
Industries, Inc., Praxair, Inc., Rohm and Haas Company, and Union
Carbide Corporation.
15
<PAGE>
AMENDMENT OF RESTATED ARTICLES OF INCORPORATION
The Corporation is asking the shareholders to approve an amendment of the
Articles of Incorporation to streamline and simplify the provisions relating to
preferred stock. At the present time the Articles of Incorporation authorize the
issuance of one million shares of First Preferred Stock and 10 million shares of
Cumulative Second Preferred Stock. In December 1994, the Corporation called for
redemption the last few outstanding shares of First Preferred Stock. No shares
of Second Preferred Stock are outstanding although shares of one series of
Second Preferred Stock are reserved for issuance pursuant to the Corporation's
Shareholders Rights Plan adopted in September 1987.
The Corporation never expects to issue any additional shares of Cumulative
First Preferred Stock. The limited number of authorized available shares and
obsolete provisions in the Articles of Incorporation would make any such
issuance impractical. Any future issuance of preferred stock would be shares of
Cumulative Second Preferred Stock. Accordingly, the Board of Directors has
concluded that it is desirable to simplify the provisions relating to the
Corporation's preferred stock. The Board proposes an amendment to the Articles
to remove the provisions relating to the Cumulative First Preferred Stock and to
redesignate the Cumulative Second Preferred Stock simply as Cumulative Preferred
Stock. The series of Second Preferred Stock reserved for issuance under the
Shareholders Rights Plan will be redesignated as Cumulative Preferred Stock,
Series B, but no substantive changes will be made in the terms or conditions of
that series.
The Board of Directors recommends that the shareholders vote in favor of
the proposed amendment to the Articles of Incorporation. The amendment to the
Articles of Incorporation is attached as Exhibit A to this proxy statement.
SHAREHOLDER PROPOSAL
The Comptroller of the City of New York, 1 Centre Street, New York, New
York 10007-2341, as custodian for the New York City Employees' Retirement System
("NYCERS") has notified the Corporation that it intends to present the following
proposal (the "Proposal") at the meeting.
WHEREAS, the New York City Employees' Retirement System is concerned about
the long-term economic performance of the companies in which it owns stock,
and
WHEREAS, the board of directors of a company is accountable to shareholders
for the performance of management and the company, and NYCERS believes that
a majority of directors should be independent of management, and
WHEREAS, the board of directors is meant to be an independent body elected
by shareholders and is charged by law and by shareholders with the duty,
authority and responsibility to formulate and direct corporate policies, and
WHEREAS, the board of directors should monitor the activities of management
in the implementation of those policies for the best interest of
shareholders, and
WHEREAS, the company's interests can best be served by having directors who
are independent of management and who represent a breadth of experience,
NOW THEREFORE, BE IT RESOLVED THAT: the shareholders request that the board
of directors amend the By-Laws to provide that the board of directors
consist of a majority of independent directors. For those purposes, an
independent director is one who: (1) has not been employed by the company,
or an
16
<PAGE>
affiliate, in an executive capacity within the last five years; (2) is not,
and has not been, a member of a company that is one of this company's paid
advisors or consultants; (3) is not employed by a significant customer or
supplier; (4) does not and did not have a personal services contract with
the company; (5) is not employed by a tax-exempt organization that receives
significant contributions from the company; (6) is not a relative of the
management of the company; (7) has not had any business relationship that
would be required to be disclosed under Regulation S-K. We request that this
by-law amendment be applied only to nominees for director at meetings
subsequent to the 1995 annual meeting and that it not apply to incumbent
directors.
THE BOARD OF DIRECTORS HAS CONSIDERED THE PROPOSAL AND RECOMMENDS THAT THE
SHAREHOLDERS VOTE AGAINST IT.
Under Virginia law, the Board of Directors has responsibility for the
exercise of all corporate powers and authority, and the management of the
business and affairs, of the Corporation. The membership of the Board is,
therefore, critical to the operation and success of the Corporation. The
Nominating Committee, a majority of which presently consists of non-employee
members of the Board, assesses the composition of the Board and seeks to attract
highly qualified, motivated and competent persons to serve as directors, while
maintaining an optimal balance of knowledge, background and experience among
members of the Board. The current Board includes non-employee members with many
years of valuable experience in the fields of finance, banking, securities, law
and public utilities. The members of the Board who are current or former
employees of the Corporation represent a combined total of well in excess of 150
years of service to the Corporation and its shareholders.
The Board of Directors recognizes the importance of independent directors
and has adopted an objective that a Board majority consist of directors who do
not have a material relationship with the Corporation. The policy, which was
adopted by the Board on February 23, 1995, reads as follows:
As the Board of Directors considers nominees for vacancies that will occur
in the Board from time to time, it shall recognize as an objective that a
majority of directors shall not have a direct or indirect relationship with
the Corporation that, in the opinion of the Board of Directors, is material
either to the Corporation or to the director.
While the Board agrees with the general thrust of the Proposal, it believes
that the Proposal's basic objective is captured by the Board's policy statement
and that the specifics of the Proposal are unnecessarily and inappropriately
restrictive. More specifically, the Board believes that the Proposal would
restrict the Nominating Committee's efforts to maintain the most highly
qualified Board of Directors by mandating that a majority of the Board consist
of individuals who fit an overly narrow, arbitrary and imprecise classification
as "independent directors." The Proposal could exclude from consideration many
extremely qualified candidates who have demonstrated a long-standing interest in
the Corporation's success and who have devoted considerable energy and time in
pursuit of that interest. For example, the Proposal could exclude individuals
whose service to the Corporation as advisors has enabled them to gain
significant insight into the Corporation's operations and who have made personal
and professional investments in the success of those operations. Similarly, the
Proposal could exclude recently retired executives who are uniquely qualified to
participate in Board deliberations about the Corporation's future. Finally, the
Proposal could exclude individuals, such as family members of management, whose
interests are particularly strongly allied with those of other shareholders in
the prosperity of the Corporation. These relationships to the Corporation, like
many of the others affected by the Proposal, in the Board's view, should not
disqualify an individual from valuable service to the Corporation.
17
<PAGE>
In addition to unnecessary substantive restrictions, the Proposal would
present numerous practical difficulties for the Corporation and the Nominating
Committee. For example, if a director's death, retirement or resignation created
an imbalance in the Board's composition, the Corporation either would have to
find a proper replacement in short order or cause another director to resign.
The Proposal provides no guidance as to the appropriate remedy for this
situation. The Proposal also fails to provide guidance as to the correct
interpretation of certain key terms in its definition of "independence." It
remains unclear, for example, what a "significant customer or supplier" of the
Corporation is or what a "significant contribution" to a non-profit organization
is.
The Board's primary goal has been, and should remain, the identification
and nomination of a diversified group of individuals who are the most qualified
to exercise the powers assigned to the Board by Virginia law to promote the best
interests of the Corporation and its shareholders. In this connection, the Board
policy will be to work towards a Board with a majority consisting of directors
with no material relationship with the Corporation. In the Board's view,
however, the Proposal, by focusing on a narrow and arbitrary definition of
"independence" to the exclusion of all other qualifications, would hamper
significantly the achievement of the Board's primary goal.
DESIGNATION OF AUDITORS
The Board of Directors has designated Coopers & Lybrand L.L.P., certified
public accountants, as the Corporation's independent auditors for the year 1995,
subject to shareholder approval. This firm has audited the Corporation's
financial statements since 1962 and those of the former Ethyl Corporation
(Delaware) from 1947 to 1962. A representative of Coopers & Lybrand L.L.P. is
expected to be present at the annual meeting with an opportunity to make a
statement and to be available to respond to appropriate questions.
Coopers & Lybrand L.L.P.'s principal function is to audit the consolidated
financial statements of the Corporation and its subsidiaries and, in connection
with that audit, to review certain related filings with the Securities and
Exchange Commission and to conduct limited reviews of the financial statements
included in each of the Corporation's quarterly reports.
FINANCIAL STATEMENTS
A copy of the Corporation's Annual Report on Form 10-K for the year 1994,
as required to be filed with the Securities and Exchange Commission, will be
provided on written request without charge to any shareholder whose proxy is
being solicited by the Board of Directors. The written request should be
directed to:
E. Whitehead Elmore, Esq.
Special Counsel to the
Executive Committee
and Secretary
Ethyl Corporation
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23217
PROPOSALS FOR 1996 ANNUAL MEETING
Under the regulations of the Securities and Exchange Commission, any
shareholder desiring to make a proposal to be acted upon at the 1996 annual
meeting of shareholders must present such proposal to the Corporation
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at its principal office in Richmond, Virginia, not later than November 17, 1995,
in order for the proposal to be considered for inclusion in the Corporation's
proxy statement. The Corporation anticipates holding the 1996 annual meeting on
April 25, 1996.
The Corporation's bylaws provide that, in addition to any other applicable
requirements, for business to be properly brought before the annual meeting by a
shareholder, the shareholder must give timely notice in writing to the Secretary
of the Corporation not later than 60 days prior to the meeting. As to each
matter, the notice should contain (i) a brief description of the matter and the
reasons for addressing it at the annual meeting, (ii) the name, record address
of, and number of shares beneficially owned by the shareholder proposing such
business and (iii) any material interest of the shareholder in such business.
OTHER MATTERS
The Board of Directors is not aware of any matters to be presented for
action at the meeting other than as set forth herein. However, if any other
matters properly come before the meeting, or any adjournment thereof, the person
or persons voting the proxies will vote them in accordance with their best
judgment.
By Order of the Board of Directors
E. WHITEHEAD ELMORE, SECRETARY
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NOTICE
and
PROXY STATEMENT
for
ANNUAL MEETING
of
SHAREHOLDERS
April 13, 1995
(Ethyl logo)
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EXHIBIT A
ETHYL CORPORATION
ARTICLES OF INCORPORATION
AMENDMENT TO ARTICLE III
1. The first two paragraphs of Article III shall be amended to read as
follows:
The Corporation shall have authority to issue 400,000,000
shares of Common Stock, $1 par value, and 10,000,000 shares of
Cumulative Preferred Stock, with a par value, if any, to be set
forth hereinafter with respect to each series. The Cumulative
Preferred Stock may be issued in series as hereinafter provided.
The description of the Cumulative Preferred Stock and the Common
Stock, and the designations, preferences and voting powers of
such classes of stock or restrictions or qualifications thereof,
and the terms on which such stock is to be issued (together with
certain related provisions for the regulation of the business
and for the conduct of the affairs of the Corporation) shall be
as hereinafter set forth in Parts A, B and C of this Article
III.
2. Part A of Article III setting forth the designation, number of shares,
rights and preferences of any series of Cumulative First Preferred Stock shall
be deleted.
3. Part B of Article III shall be renamed Part A and shall be amended to
delete and replace each reference to "Cumulative Second Preferred Stock" with
the words "Cumulative Preferred Stock."
4. Section 1 of Part B (new Part A) of Article III shall be deleted and
subsequent sections renumbered accordingly.
5. Parts C and D of Article III shall be renamed Parts B and C,
respectively.
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ETHYL CORPORATION
Richmond, Virginia
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 13, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Bruce C. Gottwald, Sidney Buford Scott and
Allen C. Goolsby, or any of them, with full power of substitution in each,
proxies (and if the undersigned is a proxy, substitute proxies) to vote all
shares of the undersigned in Ethyl Corporation, at the annual meeting of
shareholders to be held April 13, 1995, and at any and all adjournments thereof:
IMPORTANT - THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
PLEASE, MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
ETHYL CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.(X)
1. ELECTION OF DIRECTORS - Lloyd B. Andrew, William W. Berry, Phyllis L.
Cothran, Allen C. Goolsby, Bruce C. Gottwald, Bruce C. Gottwald, Jr., Floyd D.
Gottwald, Jr., Thomas E. Gottwald, William M. Gottwald, MD, Gilbert M.
Grosvenor, Andre' B. Lacy, Emmett J. Rice, Sidney Buford Scott and Charles B.
Walker.
FOR ( ) WITHHELD ( ) FOR ALL Except Nominee(s) Written Below ( )
________________________________________________________________
2. The proposal to amend the Corporation's Restated Articles of Incorporation
to reduce the authorized shares of preferred stock to a single class.
FOR ( ) AGAINST ( ) ABSTAIN ( )
3. The proposal to approve the appointment of Coopers & Lybrand L.L.P. as the
auditors for the Corporation for 1995.
FOR ( ) AGAINST ( ) ABSTAIN ( )
4. The shareholder proposal regarding the structure of the Corporation's
Board of Directors.
FOR ( ) AGAINST ( ) ABSTAIN ( )
5. In their discretion, the Proxies are authorized to vote upon such other
business and matters incident to the conduct of the meeting as may properly
come before the meeting.
This Proxy is solicited on behalf of the Board of Directors. This Proxy
when properly executed will be voted in the manner directed herein by the
undersigned shareholder. If no direction is made, this Proxy will be voted FOR
Proposals 1, 2 and 3 and AGAINST Proposal 4.
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Signature
Dated _____________, 1995
NOTE: Please sign name exactly as it appears on the stock certificate.
Only one of several joint owners need sign. Fiduciaries should give
full title.
