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):
(X) $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:
( ) 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 23218
[ETHYL LOGO]
ANNUAL MEETING OF SHAREHOLDERS
March 28, 1996
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 Friday, May 17, 1996, 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 Amended
Directors' Deferred Compensation Plan and approve the designation of auditors
for the coming year.
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, $1.00 par value ("Ethyl 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 Friday, May 17, 1996, 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 approve an Amended Directors' Deferred Compensation Plan;
3. To approve the designation by the Board of Coopers & Lybrand L.L.P. as
auditors for the fiscal year ending December 31, 1996; and
4. 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 March 15, 1996, 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 28, 1996
<PAGE>
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
ETHYL CORPORATION
TO BE HELD MAY 17, 1996
APPROXIMATE DATE OF MAILING -- MARCH 28, 1996
Proxies in the form enclosed are solicited by the Board of Directors for the
Annual Meeting of Shareholders to be held on Friday, May 17, 1996. 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 March 15, 1996, the date for determining shareholders entitled to vote at the
meeting, there were outstanding 118,443,835 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 Amended
Directors' Deferred Compensation Plan (the "Amended Plan") requires the
affirmative vote of the holders of a majority of the shares of Ethyl Common
Stock present or represented at the Annual Meeting. Abstentions and Broker
Shares voted as to any matter at the Annual Meeting will be included in
determining the number of votes present or represented at the Annual Meeting
with respect to determining the vote on the Amended Plan. Broker Shares that are
not voted on any matter at the Annual Meeting will not be included in
determining the number of shares present or represented at the Annual Meeting
with respect to determining the vote on the Directors' Compensation Plan.
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). Each of the nominees presently is serving
as a director. The Board has no reason to believe that any of the nominees will
be unavailable.
Mr. Lloyd B. Andrew resigned from the Board of Directors on December 31, 1995.
As of February 29, 1996, Messrs. Allen C. Goolsby, Bruce C. Gottwald, Jr., Floyd
D. Gottwald, Jr., William M. Gottwald, Andre B. Lacy and Emmett J. Rice resigned
from the Board and the size of the Board was reduced to seven directors.
WILLIAM W. BERRY; age 63; 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: Scott & Stringfellow Financial Corp. and Universal
Corporation.
PHYLLIS L. COTHRAN; age 49; director since 1995; President and Chief Operating
Officer of Trigon Blue Cross Blue Shield (health insurance company) since
1990. Other directorships: Tredegar Industries, Inc. and Central Fidelity
Bank.
BRUCE C. GOTTWALD; age 62; 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: CSX Corporation, First Colony Corporation, James River
Corporation and Tredegar Industries, Inc.
THOMAS E. GOTTWALD; age 35; 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.
GILBERT M. GROSVENOR; age 64; director since 1985; President and Chairman of the
National Geographic Society (magazine publisher and scientific society).
Other directorships: Saul Centers, Inc., and Marriott International, Inc.
SIDNEY BUFORD SCOTT; age 63; director since 1959; Chairman of the Board of Scott
& Stringfellow, Inc. (investment bankers and brokers). Other directorship:
Great Eastern Energy & Development Corporation.
CHARLES B. WALKER; age 57; director since 1989; Vice Chairman of the Board,
Chief Financial Officer and Treasurer of the Corporation and Vice Chairman
of the Board and Chief Financial Officer of Albemarle Corporation since
March 1, 1994 (and Treasurer of Albemarle until March 1, 1996), having
served as Executive Vice President and Chief Financial Officer of the
Corporation since August 1, 1989, and Treasurer of the Corporation since
July 1, 1993. Other directorships: Albemarle Corporation, First Colony
Corporation and Nations Fund Trust/Nations Fund, Inc.
In 1995, 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 1995 while he or she was a member of the Board of Directors except Mr.
Walker and Ms. Cothran. Five meetings of the Corporation's Board of Directors
were held during 1995.
The Corporation's executive committee currently consists of Messrs. Bruce
C. Gottwald, Berry, Thomas E. Gottwald and Walker. During 1995, the executive
committee met on six occasions.
Ms. Cothran and Messrs. Berry, Grosvenor and Scott currently serve on the
Corporation's audit committee. During 1995, the audit committee met two times.
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.
Grosvenor, Berry and Bruce C. Gottwald. During 1995, the nominating committee
met once. 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
2
<PAGE>
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 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. Berry, Grosvenor and Scott and Ms. Cothran currently serve as the
Corporation's Bonus, Salary and Stock Option Committee. During 1995, the Bonus,
Salary and Stock Option 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.
BOARD OF DIRECTORS REPORT ON CORPORATE GOVERNANCE
In November 1995 the Board of Directors completed a review of corporate
governance. A summary of the Board's report is provided to the shareholders for
their information:
During 1995 the Board of Directors devoted considerable time to the many
issues that fall under the general subject of corporate governance. The Board
focused on basic issues and addressed the more comprehensive list developed by
General Motors' Board of Directors.
A principal issue addressed was Board composition, noting the considerable
attention currently being directed to that issue. The Board also noted the focus
on significant stock ownership by directors, with the objective of aligning
directors' interests with shareholders, versus Board independence.
All of the Ethyl directors are shareholders and the aggregate percentage
owned by the directors (approximately 18%) is unusually high for a publicly-held
corporation. The Board strongly supports the concept of linking, through stock
ownership, the directors' interests with shareholders so that the Corporation's
performance affects the directors the same as all other shareholders. The Board
also reaffirmed its objective of having a majority of independent directors,
agreeing to take the necessary steps no later than March 1, 1996.
The Board addressed the subject of compensation of outside directors,
focusing on whether compensation should be in part in the form of stock in the
Corporation. Strong support of this concept, which aligns compensation with
shareholders' interests, was expressed. The Board adopted, subject to the
approval of shareholders, changes in the compensation of non-employee directors
that will permit them to designate annually, part or all of their compensation
to be in the form of Ethyl Common Stock. (A summary of the Amended Directors'
Deferred Compensation Plan can be found beginning on page 14).
The Board also noted recent but growing opposition to retirement benefits
for outside directors. The Company's retirement benefit is substantially less
than the reported average annual benefit under such plans. The Board concluded
that the retirement plan helps to attract Board members, and the cost to the
Company is not substantial.
3
<PAGE>
The Chairman gave an assessment of the Board's performance, stating that
the Board generally is well informed and the level of Board participation is
excellent. He did suggest two changes: increase the number of regular Board
meetings by one each year and place more emphasis on an annual evaluation of his
performance. The Board accepted both suggestions and agreed that the Chairman
would meet with the Bonus, Salary and Stock Option Committee as a part of each
annual evaluation.
The Board then reviewed each of the guidelines developed by the General
Motors Board of Directors in its report on significant corporate governance
issues. A statement of the Board's position, as compared to the statement of the
General Motors Board, with respect to each of the twenty-eight guidelines is
included as a part of the report. (See Exhibit A to the proxy statement).
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Floyd D. Gottwald, Jr., Vice Chairman of the Board and director of the
Corporation until February 29, 1996, and Bruce C. Gottwald are brothers. Thomas
E. Gottwald, President and director of the Corporation, is a son of Bruce C.
Gottwald. William M. Gottwald, MD, Senior Vice President of the Corporation,
and, until February 29, 1996, director of the Corporation, is a son of Floyd D.
Gottwald, Jr. 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 until February 29, 1996, 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 there has been compliance with all filing requirements
applicable to its officers, directors and beneficial owners of greater than 10%
of its Common Stock.
4
<PAGE>
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, 1995,
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 21,239,303(b)(c) 17.90%
Bruce C. Gottwald (a)
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23217
NationsBank Corporation and 7,854,020 6.63%
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 Act of 1934, although
there is no agreement among them with respect to the acquisition, retention,
disposition or voting of Ethyl Common Stock.
(b) As of January 31, 1996, the Gottwalds, individually or collectively, have
sole voting and investment power over all of the shares disclosed except
15,841,132 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 Bruce C.
Gottwald or Floyd D. Gottwald, Jr., other than in this table. This amount
includes 177,070 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, 1995, pursuant to the
Corporation's Stock Option Plan.
(c) This amount includes shares owned by Thomas E. Gottwald, President and
director of the Corporation, who is a son of Bruce C. Gottwald. 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's
recommendations to the shareholders. Because members of the Gottwald family are
executive officers and directors of the Corporation and the Gottwalds are 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.
5
<PAGE>
(d) The NationsBank Corporation related entities are NationsBank, 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.
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 January 31, 1996, 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.
<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>
William W. Berry 1,893 1,844(3) 3,737
Phyllis L. Cothran 1,190 0 1,190
Bruce C. Gottwald 4,986,720 932,594 5,919,314(4) 5.0%
Floyd D. Gottwald, Jr. 381,451 6,168,541 6,549,992(5) 5.5%
Thomas E. Gottwald 535,097 3,726,711 4,261,808(6) 3.4%
Gilbert M. Grosvenor 2,922 0 2,922
Newton A. Perry 45,637 0 45,637
Sidney Buford Scott 63,222 39,200(7) 102,422
Charles B. Walker 213,366 0 213,366
Directors and executive officers
as a group (21 persons) 6,715,836 10,029,632 16,745,468 14.1%
</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 January 31, 1996, pursuant to the
Corporation's Stock Option Plan: Bruce C. Gottwald: 15,809 shares; Floyd
D. Gottwald, Jr.: 0 shares; Thomas E. Gottwald: 93,936 shares; Newton A.
Perry: 36,683 shares; Charles B. Walker: 157,149 shares; and directors and
executive officers as a group: 641,242 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 1,844 of such shares.
(4) Mr. Gottwald disclaims beneficial ownership of 927,321 of such shares.
(5) Mr. Gottwald disclaims beneficial ownership of 1,346,328 of such shares.
(6) Mr. Gottwald disclaims beneficial ownership of 3,576,935 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.
(7) Mr. Scott disclaims beneficial ownership of all 39,200 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, 1995, 1994
and 1993.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
SECURITIES
ANNUAL COMPENSATION UNDERLYING
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 1995 $770,000 -- -- $ 38,500/3/
Chairman of the Board and 1994 770,000 $265,000 -- 33,532 38,500
Chief Executive Officer 1993 700,000 265,000 -- 30,608 38,500
Floyd D. Gottwald, Jr. 1995 315,000 -- -- 15,750/4/
Vice Chairman of the Board 1994 378,167 -- -- -- 6,375
(until February 29, 1996) 1993 754,000 260,000 -- 30,608 21,992
Thomas E. Gottwald 1995 381,000 -- -- 19,050/5/
President and 1994 332,000 200,000 -- 413,936 16,600
Chief Operating Officer 1993 199,917 125,000 -- 9,576 9,996
Charles B. Walker 1995 230,000 -- -- 11,500/6/
Vice Chairman of the Board, 1994 253,333 118,000 -- 237,149 12,992
Chief Financial Officer and 1993 391,000 225,000 -- 98,018 19,550
Treasurer
Newton A. Perry 1995 201,275 43,000 -- 10,064/7/
Vice President 1994 188,125 45,000 -- 116,683 6,206
Worldwide Refinery Chemicals 1993 167,000 75,000 -- 11,432 7,078
</TABLE>
/1/ None of the named executive officers received Other Annual Compensation for
1995 in excess of the lesser of $50,000 or 10% of combined salary and bonus
for 1995.
/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, $7,500 and
$10,000) and accruals in the Corporation's excess benefit plan ($31,000,
$31,000 and $28,500) for 1995, 1994 and 1993, respectively.
/4/ Includes contributions to the Corporation's savings plan ($7,500, $6,375 and
$10,000) and accruals in the Corporation's excess benefit plan ($8,250, $0,
and $11,922) for 1995, 1994 and 1993, respectively.
/5/ Includes contributions to the Corporation's savings plan ($7,500, $7,500 and
$9,996) and accruals in the Corporation's excess benefit plan ($11,550,
$9,100, and $0) for 1995, 1994 and 1993, respectively.
/6/ Includes contributions to the Corporation's savings plan ($7,500, $7,500 and
$10,000) and accruals in the Corporation's excess benefit plan ($4,000,
$5,492 and $9,550) for 1995, 1994 and 1993, respectively.
/7/ Includes contributions to the Corporation's savings plan ($7,500, $6,206 and
$7,078) for 1995, 1994 and 1993, respectively, and accruals in the
Corporation's excess benefit plan ($2,564), for 1995.
Floyd D. Gottwald, Jr., and Charles B. Walker also served as officers of
Albemarle Corporation during 1995 and are compensated separately by Albemarle
Corporation for such service.
7
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The Corporation granted no options or Stock Appreciation Rights ("SARs")
during fiscal year 1995.
The following table presents information concerning option and SAR
exercises by the Chief Executive Officer and the four next most highly
compensated executive officers of the Corporation.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SAR'S
OPTIONS/SAR'S AT FY-END (#)/1/ AT
SHARES ACQUIRED VALUE FY-END ($)/2/
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Bruce C. Gottwald 9,434 $6,132 15,809 0 $ 0 $ 0
Floyd D. Gottwald, Jr. 0 0 0 0 0 0
Thomas E. Gottwald 0 0 93,936 320,000 0 0
Charles B. Walker 0 0 157,149 80,000 154,225 0
Newton A. Perry 0 0 36,683 80,000 15,941 0
</TABLE>
/1/ Each of these options relates to Ethyl Common Stock and includes a tandem
SAR.
/2/ These values are based on $12.375, the closing price of Ethyl Common Stock
on the New York Stock Exchange on December 29, 1995.
8
<PAGE>
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, 1995, 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.
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 $ 43,965 $ 65,945 $ 87,925 $109,910 $131,890 $153,870 $175,855 $219,815
350,000 51,465 77,195 102,925 128,660 154,390 180,120 205,855 257,315
400,000 58,965 88,445 117,925 147,410 176,890 206,370 235,855 294,815
450,000 66,465 99,695 132,925 166,160 199,390 232,620 265,855 355,315
500,000 73,965 110,945 147,925 184,910 221,890 258,870 295,855 369,815
550,000 81,465 122,195 162,925 203,660 244,390 285,120 325,855 407,315
600,000 88,965 133,445 177,925 222,410 266,890 311,370 355,855 444,815
650,000 96,465 144,695 192,925 241,160 289,390 337,620 385,855 482,315
700,000 103,965 155,945 207,925 259,910 311,890 363,870 415,855 519,815
750,000 111,465 167,195 222,925 278,660 334,390 390,120 445,855 557,315
800,000 118,965 178,445 237,925 297,410 356,890 416,370 475,855 594,815
850,000 126,465 189,695 252,925 316,160 379,390 442,620 505,855 632,315
900,000 133,965 200,945 267,925 334,910 401,890 468,870 535,855 669,815
950,000 141,465 212,195 282,925 353,660 424,390 495,120 565,855 707,315
1,000,000 148,965 223,445 297,925 372,410 446,890 521,370 595,855 744,815
</TABLE>
* Assumes attainment of age 65 in 1995 and Social Security Covered Compensation
of $25,920.
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, 1995, are: Bruce C. Gottwald, 39.750; Floyd D. Gottwald, Jr.,
52.500; Thomas E. Gottwald, 4.475; Newton A. Perry, 26.5833; and Charles B.
Walker, 14.665.
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
9
<PAGE>
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 certain 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.
COMPENSATION OF DIRECTORS
In 1995, 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. The service
requirement for this benefit may be waived under certain circumstances. 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. The payment period
limitation on this benefit may be waived in certain circumstances. 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 REPORT ON EXECUTIVE COMPENSATION
The Bonus, Salary and Stock Option Committee of the Board of Directors (the
"Committee"), which performs the function of a compensation committee, consisted
of Messrs. Berry, Grosvenor and Rice (Chairman), until February 29, 1996, when
Mr. Scott replaced Mr. Rice on the Committee and Ms. Cothran joined the
Committee as Chairman. The Committee is delegated the power to administer the
compensation program of the Corporation applicable to its executive officers,
including the Chief Executive Officer. 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.
10
<PAGE>
(Bullet) Provide incentives for enhancing the profitability of the
Corporation by rewarding executives for meeting individual and corporate goals.
(Bullet) Align the financial interests of the executives closely to
those of the shareholders by strongly encouraging executive ownership of Ethyl
Common Stock.
In administrating the compensation program the Committee recognizes the
Corporation's basic objectives of achieving a return on equity of at least
twenty percent as well as annual growth in operating earnings of fifteen
percent.
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 on the Performance Graph. Others include
companies in other industries. References to the "market" in this Report refer
to the survey data.
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.
The Committee met in December 1995 with each of the principal executive
officers to review the executives' 1995 goals and the extent to which the goals
had been achieved.
BASE SALARY
Increases in base salary are based on evaluations of past and current
corporate operating profits and individual contribution to the Corporation's
success, the overall level of pay adjustments in the markets the Corporation
monitors, market data for the position and internal equities among the
positions. 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. Salary survey data from the
Corporation's peer group companies discussed with the Committee indicated the
Corporation's executive level compensation to be well within ranges of
compensation offered by peer group companies.
Based on 1995 results, management recommended no salary increases for top
level executive officers. The Committee accepted the recommendation.
11
<PAGE>
ANNUAL BONUS
The purpose of the annual bonus is to motivate and reward performance
measured against individual, division, department and corporate objectives
(including achievement of significant strategic objectives and target levels of
operating profit). Although the Corporation achieved many objectives set by
management, the overall profit objective was not met. Consequently, the Chief
Executive Officer and the Executive Committee of the Board recommended that they
not be considered for any bonuses for the year ended December 31, 1995.
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 1995 under the formula was $4,966,167, but the
Committee, as has been the practice in prior years, did not appropriate the
entire amount. Of this amount, a total of $1,056,500 was awarded in 1996 as 1995
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. While the Committee believes that management has been taking
the proper steps to position the Corporation for the future, in light of the
reduced level of operating profit in 1995, the Committee agreed with
management's recommendation that it would be best to forego 1995 bonuses for
most top level executive officers, significantly reduce the bonus pool and
selectively award bonuses where an individual's performance with respect to his
area of responsibility has been especially noteworthy.
STOCK OPTIONS
No stock options were granted in 1995.
CEO COMPENSATION
The Corporation's operating profit for 1995 did not reach expected levels
and, consequently, the Chief Executive Officer asked not to be considered for a
salary increase or a bonus for 1995. The Committee believes that the chief
executive officer has made the correct strategic moves to position the
Corporation for the future. Major accomplishments for the year included the
successful completion of the extended litigation with the Environmental
Protection Agency over the right to sell MMT in the United States and the
agreement to acquire the lubricant additives business of Texaco Inc. Despite
these achievements, the Committee concurred with the Chief Executive Officer's
recommendation of no salary increase and no bonus.
Compensation survey data places the CEO's salary for 1995 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.
12
<PAGE>
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, there will be no compensation subject to loss of tax deductibility.
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.
THE BONUS, SALARY AND STOCK OPTION COMMITTEE
Emmett J. Rice, Chairman February 28, 1996
Gilbert M. Grosvenor
William W. Berry
13
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
PERFORMANCE THROUGH DECEMBER 31, 1995
[PERFORMANCE GRAPH GOES HERE]
1990 1991 1992 1993 1994 1995
Ethyl 100 122 127 122 109 147
S&P 500 100 130 140 154 156 215
Chemical Composite 100 132 145 167 179 234
The Lubrizol Corporation 100 123 122 157 160 135
* ASSUMES $100 INVESTED ON LAST DAY OF DECEMBER 1990. 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.
Because none of the corporations included in the Chemical Composite,
other than the Corporation, has lubricant additives as a primary
business, the Corporation has added a comparison with The Lubrizol
Corporation, which is the only other corporation listed on the New York
Stock Exchange with lubricant additives as a primary business.
APPROVAL OF AMENDED DIRECTORS' DEFERRED COMPENSATION PLAN
The Ethyl Corporation Directors' Deferred Compensation Plan (the "Original
Plan") originally permitted the deferral of non-employee Directors' fees with
the deferred payments to be made in cash. On February 22, 1996, the Board
approved an amended Directors' Deferred Compensation Plan (the "Amended Plan"),
subject to the approval of the Corporation's shareholders, to permit deferred
fees to be paid in Ethyl Common Stock. The following paragraphs summarize the
more significant features of the Amended Plan. This summary is subject, in all
respects, to the terms of the Amended Plan. The Corporation will provide
promptly, upon request and without charge, a copy of the full text of the
Amended Plan to each person to whom a copy of this proxy statement is delivered.
Requests should be directed to: E. Whitehead Elmore, Secretary, 330 South Fourth
Street, P.O. Box 2189, Richmond, Virginia, 23218.
SUMMARY OF THE AMENDED PLAN
PURPOSE. One of the decisions that the Board of Directors made as a part of
its review of the Corporation's corporate governance was to create a means for
non-employee Directors to take part or all of their compensation in shares of
Ethyl Common Stock. The objective is to align non-employee Director compensation
with the interests of all shareholders. The Original Plan currently allows
non-employee Directors the opportunity to reduce the cash fees otherwise payable
to the Director and to have the deferred fees increased by an interest factor
until the deferred benefit is paid in cash at a later date. The Amended Plan
will afford non-employee Directors the opportunity to reduce the cash fees
otherwise payable to the Director in return for the right to receive Ethyl
Common Stock at a future date. The Ethyl Common Stock deferral election would be
effective with respect to fees payable after approval of the amendment by the
Corporation's shareholders. The Amended Plan does not involve any increase in
the compensation paid to non-employee Directors.
ELIGIBILITY. Each Director who is not an employee of the Corporation is
eligible to participate in the Amended Plan. A non-employee Director becomes a
participant by submitting a Deferral Election Form.
EFFECTIVE DATE. If the Amended Plan is approved by the shareholders, it
will become effective on July 1, 1996.
DEFERRALS. A participant's Deferral Election Form may direct that all or
part of the participant's retainer fee, meeting fees, or both, be deferred under
the Amended Plan. The Deferral Election Form may defer retainer and
14
<PAGE>
meeting fees in ten percent increments. Deferred fees will be credited to either
a deferred cash account or a deferred stock account, as directed by the
participant. Deferred cash accounts and deferred stock accounts are not funded
and are maintained for recordkeeping purposes only. No assets will be segregated
or set aside for the payment of benefits under the Amended Plan.
The Amended Plan provides that, in the case of cash deferrals, interest
will be credited to a participant's deferred cash account on the first day of
each month. The applicable interest rate will be the average three month United
States Treasury Bill rates Auction Average (Investment), as published by the
Federal Reserve Board for the month preceding the day the interest is credited.
Interest will be credited through the end of the month preceding the month in
which a deferred cash benefit is paid.
Deferred fees will be credited to the participant's deferred stock account
will be credited as whole and fractional shares of Common Stock based on the
fair market value of the Common Stock on the date that the deferred fees would
have been paid but for the Deferral Election Form. Additional credits will be
made to each participant's deferred stock account based on the value of
dividends paid on Common Stock and the fair market value of the Common Stock on
the date that such dividends are paid. Additional credits are accrued through
the end of the month preceding the month in which a deferred stock benefit is
paid.
Each participant's account under the Amended Plan is unfunded and is
maintained solely for recordkeeping purposes. No assets will be segregated or
set aside for the payment of benefits under the Amended Plan.
DISTRIBUTIONS. A participant's Deferral Election Form will also specify
when amounts attributable to each year's deferred fees will be paid.
Distributions under the Amended Plan cannot begin within two years of the
beginning of the deferral year.
With the consent of the Chief Financial Officer, who has responsibility for
administering the Amended Plan, a participant may postpone the start of
distributions under the Amended Plan, provided that the approval is obtained
before distributions were originally scheduled to begin and the new distribution
date meets the requirements of the Amended Plan.
Distributions will be accelerated in the event of the participant's
disability. A participant or beneficiary also may request an accelerated
distribution in the event of hardship.
The amount to be distributed under the Amended Plan will be paid in a
single sum or in ten annual installments. Deferred cash benefits will be paid in
cash and deferred stock benefits will be paid in whole shares of Ethyl Common
Stock and cash representing the value of any fractional share that is credited
to the participant's account.
The maximum aggregate number of shares of Ethyl Common Stock that may be
issued under the Amended Plan is 100,000 shares. The number of authorized shares
will be adjusted to reflect stock dividends, stock splits, and similar changes
in Ethyl's capitalization.
AMENDMENTS. The Board of Directors, without further action of the
shareholders, may amend the Amended Plan as it deems proper or in the
Corporation's best interest; provided, however that approval of the shareholders
is required if the amendment (i) increases the aggregate number of shares that
may be issued pursuant to the Amended Plan, (ii) materially increases the
benefits accruing to participants under the Amended Plan, or (iii) materially
changes the class of persons eligible to become participants.
While the Corporation's non-employee Directors have indicated an intention
to participate in the Common Stock portion of the Amended Plan, the Corporation
is unable to determine the number of individuals who would
15
<PAGE>
have participated in the Amended Plan, or the level of their participation, in
1995 if the Amended Plan had been in effect.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
AMENDED PLAN.
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 1996,
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.
16
<PAGE>
FINANCIAL STATEMENTS
A copy of the Corporation's Annual Report on Form 10-K for the year 1995,
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
Secretary
Ethyl Corporation
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23218
PROPOSALS FOR 1997 ANNUAL MEETING
Under the regulations of the Securities and Exchange Commission, any
shareholder desiring to make a proposal to be acted upon at the 1997 annual
meeting of shareholders must present such proposal to the Corporation at its
principal office in Richmond, Virginia, not later than November 27, 1996, in
order for the proposal to be considered for inclusion in the Corporation's proxy
statement. The Corporation anticipates holding the 1997 annual meeting on April
24, 1997.
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
17
<PAGE>
Exhibit A
CORPORATE GOVERNANCE GUIDELINES
<TABLE>
<CAPTION>
GENERAL MOTORS ETHYL'S POLICIES
CORPORATION GUIDELINES AND PROCEDURES
<S> <C>
1) SELECTION OF CHAIRMAN AND CEO -- The Board should 1) Ethyl's by-laws currently provide that the
be free to make this choice any way that seems Chairman of the Board shall be the CEO, but the
best for the Company at a given point in time. Board may amend the by-laws at any time. The
Board should be free to make this choice based on
Therefore, the Board does not have a policy, one its business judgement of what is best for Ethyl.
way or the other, on whether or not the role of
the Chief Executive and Chairman should be
separate and, if it is to be separate, whether
the Chairman should be selected from the non-
employee Directors or be an employee.
2) LEAD DIRECTOR CONCEPT -- The Board adopted a 2) Ethyl does not have a lead director and the Board
policy that it have a director selected by the does not believe that it needs one. The Board is
outside directors who will assume the concerned that adoption of the concept could
responsibility of chairing the regularly create undesirable friction between management
scheduled meetings of outside directors or other and the outside directors. The Board has agreed
responsibilities which the outside directors as a that the Chairman of the Bonus, Salary and Stock
whole might designate from time to time. Option Committee will chair meetings of the
outside directors.
Currently, this role is filled by the non-
executive Chairman of the Board. Should the
Company be organized in such a way that the
Chairman is an employee of the Company, another
director would be selected for this
responsibility.
3) NUMBER OF COMMITTEES -- The current committee 3) The Board believes its current committee
structure of the Company seems appropriate. There structure is appropriate. Currently, Ethyl has
will, from time to time, be occasions in which five standing committees: The Audit Committee,
the Board may want to form a new committee or Business Conduct Committee, Executive Committee,
disband a current committee depending upon the Nominating Committee and Bonus, Salary and Stock
circumstances. The current six Committees are Option Committee. Periodically, an ad hoc Board
Audit, Capital, Stock, Director Affairs, Finance, Committee of outside directors reviews special
Incentive and Compensation and Public Policy. policy or compliance matters referred by the
Chairman of the Board. Pursuant to Ethyl's by-
laws, the Board may create or discharge any
committee at any time.
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
GENERAL MOTORS ETHYL'S POLICIES
CORPORATION GUIDELINES AND PROCEDURES
<S> <C>
4) ASSIGNMENT AND ROTATION OF COMMITTEE 4) The Chairman of the Board submits Committee
MEMBERS -- The Committee on Director Affairs is assignments to the Board for its approval. The
responsible, after consultation with the Chief Board believes that periodic rotation of
Executive Officer and with consideration of the Committee members is appropriate, but that
desires of individual Board members, for the automatic rotation after specific time periods is
assignment of Board members to various not necessary.
committees.
It is the sense of the Board that consideration
should be given to rotating committee members
periodically at about a five year interval, but
the Board does not feel that such a rotation
should be mandated as a policy since there may be
reasons at a given point in time to maintain an
individual director's committee membership for a
longer period.
5) FREQUENCY AND LENGTH OF COMMITTEE MEETINGS -- The 5) The frequency and length of Committee meetings is
Committee Chairman, in consultation with the responsibility of each Committee chairman
Committee members, will determine the frequency after consultation with the Committee members.
and length of the meetings of the Committee. Each Committee should, at a minimum, meet at
least annually.
6) COMMITTEE AGENDA -- The Chairman of the 6) Each Committee will have recurring items for
Committee, in consultation with the appropriate discussion. Other agenda items are left to the
members of Management and staff, will develop the discretion of the Committee Chairman in
Committee's agenda. consultation with the Chairman of the Board and
the Committee members.
Each Committee will issue a schedule of agenda
subjects to be discussed for the ensuing year at
the beginning of each year (to the degree these
can be foreseen). This forward agenda will also
be shared with the Board.
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
GENERAL MOTORS ETHYL'S POLICIES
CORPORATION GUIDELINES AND PROCEDURES
<S> <C>
7) SELECTION OF AGENDA ITEMS FOR BOARD 7) It is the responsibility of the Chairman of the
MEETINGS -- The Chairman of the Board and the Board to establish an agenda for each Board
Chief Executive Officer (if the Chairman is not Meeting. Each Board member is free to suggest
the Chief Executive Officer) will establish the agenda items at any time and the Chairman of the
agenda for each Board meeting. Each Board member Board is expected to seek input periodically from
is free to suggest the inclusion of items(s) on the Board as to the Board agenda.
the agenda.
Scheduled Board meetings should include periodic
reviews of important topics that do not fall
under the category of current business. Subjects
that should be considered periodically include
the annual budget, the long-range plan, reports
on risk management including exposure to
significant risks such as pending or threatened
litigation and reports on compliance with
environmental and other regulatory requirements.
8) BOARD MATERIALS DISTRIBUTED IN ADVANCE -- It is 8) Ethyl distributes, at least several days in
the sense of the Board that information and data advance of Board meetings, a Board book that
that is important to the Board's understanding of includes information for consideration with
the business be distributed in writing to the respect to the upcoming agenda. The Board also
Board before the Board meets. The Management will receives monthly financial reports and analyses
make every attempt to see that this material is as well as periodic reports on news articles that
as brief as possible while still providing the either mention Ethyl or relate to its business.
desired information.
9) PRESENTATIONS -- As a general rule, presentations 9) While the Board does not think that presentations
on specific subjects should be sent to the Board on specific subjects must be sent to the Board
members in advance so that Board meeting time may members in advance, the current practice of
be conserved and discussion time focused on distributing financial and other information in
questions that the Board has about the material. advance does help to ensure efficient Board
On those occasions in which the subject matter is meetings.
too sensitive to put on paper, the presentation
will be discussed at the meeting.
</TABLE>
A-3
<PAGE>
<TABLE>
<CAPTION>
GENERAL MOTORS ETHYL'S POLICIES
CORPORATION GUIDELINES AND PROCEDURES
<S> <C>
10) REGULAR ATTENDANCE OF NON-DIRECTORS AT BOARD 10) The Board believes that it is desirable to have
MEETINGS -- The Board is comfortable with the representatives of management present at Board
regular attendance at each Board Meeting of meetings from time to time for presentations to
non-Board members who are members of the the Board. When appropriate, the Board has
President's Council. Should the Chief Executive followed the practice of meeting in executive
Officer want to add additional people as session.
attendees on a regular basis, it is expected that
this suggestion would be made to the Board for
its concurrence.
11) EXECUTIVE SESSIONS OF OUTSIDE DIRECTORS -- The 11) While the Board has not followed this practice in
outside directors of the Board will meet in the past, the Board has decided that the non-
Executive Session three times each year. The employee directors of the Board should meet from
format of these meetings will include a time to time and at least annually. The annual
discussion with the Chief Executive Officer on meeting will include a discussion with the Chief
each occasion. Executive Officer.
12) BOARD ACCESS TO SENIOR MANAGEMENT -- Board 12) The Board members believe that they have complete
members have complete access to GM's Management. access to the Company's management and do not
It is assumed the Board members will use judgment recommend any changes in this regard. The Board
to be sure that this contact is not distracting does recognize the desirability of working
to the business operation of the Company and that through the Chief Executive Officer in any
such contact, if in writing, be copied to the situation where chain of command considerations
Chief Executive and the Chairman. might be relevant.
Furthermore, the Board encourages the Management
to, from time to time, bring managers into Board
Meetings who: (a) can provide additional insight
into the items being discussed because of
personal involvement in these areas, and/or (b)
represent managers with future potential that the
Senior Management believes should be given
exposure to the Board.
</TABLE>
A-4
<PAGE>
<TABLE>
<CAPTION>
GENERAL MOTORS ETHYL'S POLICIES
CORPORATION GUIDELINES AND PROCEDURES
<S> <C>
13) BOARD COMPENSATION REVIEW -- It is appropriate 13) It was agreed that the Bonus, Salary and Stock
for the staff of the Company to report once a Option Committee would have responsibility for
year to the Committee on Director Affairs the reviewing annually Board compensation. Management
status of GM Board compensation in relation to should provide comparative data for the Committee
other large U.S. companies. to consider each year. Any changes in Board
compensation are the Board's responsibility.
Changes in Board compensation, if any, should
come at the suggestion of the Committee on
Director Affairs, but with full discussion and
concurrence by the Board.
14) SIZE OF THE BOARD -- The Board presently has 14 14) There are fourteen Board members. Effective on or
members. It is the sense of the Board that a size before March 1, 1996, the Board will be reduced
of 15 is about right. However, the Board would be to 7 members. The Board believes that a Board
willing to go to a somewhat larger size in order size within this range is appropriate.
to accommodate the availability of an outstanding
candidate(s).
15) MIX OF INSIDE AND OUTSIDE DIRECTORS -- The Board 15) In 1994 the Board adopted a policy of working
believes that as a matter of policy there should toward an independent majority for the Board. In
be a majority of independent Directors on the GM November 1995 the Board approved changes in the
Board (as stipulated in By-law 2.12). The Board composition of the Board to achieve its objective
is willing to have members of Management, in by March 1, 1996.
addition to the Chief Executive Officer, as
Directors.
But the Board believes that Management should
encourage Senior Managers to understand that
Board membership is not necessary or a
prerequisite to any higher Management position in
the Company. Managers other than the Chief
Executive Officer currently attend Board Meetings
on a regular basis even though they are not
members of the Board.
On matters of corporate governance, the Board
assumes decisions will be made by the outside
directors.
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GENERAL MOTORS ETHYL'S POLICIES
CORPORATION GUIDELINES AND PROCEDURES
<S> <C>
16) BOARD DEFINITION OF WHAT CONSTITUTES INDEPENDENCE 16) The Board recognizes that some institutional
FOR OUTSIDE DIRECTORS -- GM's By-law defining shareholders have their own precise definition of
independent directors was approved by the Board independent. The Board has given that subject
in January 1991. The Board believes there is no considerable thought and has concluded that the
current relationship between any outside director question of independence should be a matter left
and GM that would be construed in any way to to the judgment of the Board depending on the
compromise any Board member being designated facts and circumstances of each particular case.
independent. Compliance with the By-Law is
reviewed annually by the Committee on Director The Board would emphasize to the Ethyl
Affairs. shareholders the substantial financial investment
that members of the Gottwald family have in the
Company. The Company's performance affects all
shareholders, but none more than the Gottwalds.
17) FORMER CHIEF EXECUTIVE OFFICER'S BOARD (17) The Board believes that service of a former
MEMBERSHIP -- The Board believes this is a matter Chief Executive Officer on the Board is an issue
to be decided in each individual instance. It is that should be decided in each individual
assumed that when the Chief Executive Officer instance.
resigns from that position, he/she should offer
his/her resignation from the Board at the same
time. Whether the individual continues to serve
on the Board is a matter for discussion at that
time with the new Chief Executive Officer and the
Board.
A former Chief Executive Officer serving on the
Board will be considered an inside director for
purposes of corporate governance.
18) BOARD MEMBERSHIP CRITERIA -- The Committee on 18) The Nominating Committee is responsible for
Director Affairs is responsible for reviewing reviewing annually the composition of the Board
with the Board on an annual basis the appropriate of Directors. The Nominating Committee has the
skills and characteristics required of Board responsibility for insuring that there is a
members in the context of the current make-up of balance of appropriate skills and characteristics
the Board. This assessment should include issues reflected on the Board including age, diversity
of diversity, age, skills such as understanding and experience.
of manufacturing technologies, international
background, etc. -- all in the context of an
assessment of the perceived needs of the Board at
that point in time.
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CORPORATION GUIDELINES AND PROCEDURES
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19) SELECTION OF NEW DIRECTOR CANDIDATES -- The Board 19) The Nominating Committee has responsibility for
itself should be responsible, in fact as well as recommending Directors to the Board and
procedure, for selecting its own members. The ultimately to the shareholders. A by-law provides
Board delegates the screening process involved to a procedure for shareholders to propose nominees
the Committee on Director Affairs with the direct for the Board. The screening process should be
input from the Chairman of the Board as well as left to the Nominating Committee with direct
the Chief Executive Officer. input from the Chairman of the Board and the
Chief Executive Officer.
20) EXTENDING THE INVITATION TO A NEW POTENTIAL 20) Any invitation to join the Board should be
DIRECTOR TO JOIN THE BOARD -- The invitation to extended by the Chairman of the Board, with the
join the Board should be extended by the Board Chairman of the Nominating Committee, if
itself, by the Chairman of the Committee on feasible.
Director Affairs (if the Chairman and CEO hold
the same position), the Chairman of the Board,
and the Chief Executive Officer of the Company.
21) ASSESSING THE BOARD'S PERFORMANCE -- The 21) On a regular basis the Chairman has reviewed the
Committee on Director Affairs is responsible to Board's performance with the Board. As a part of
report annually to the Board an assessment of the the nominating process, the Nominating Committee
Board's performance. This will be discussed with is expected, in consultation with the Chairman,
the full Board. This should be done following the to assess the Board's performance.
end of each fiscal year and at the same time as
the report on Board membership criteria.
This assessment should be of the Board's
contribution as a whole and specifically review
areas in which the Board and/or the Management
believes a better contribution could be made. Its
purpose is to increase the effectiveness of the
Board, not to target individual Board members.
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CORPORATION GUIDELINES AND PROCEDURES
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22) Directors WHO CHANGE THEIR PRESENT JOB 22) The Nominating Committee has the responsibility
RESPONSIBILITY - It is the sense of the Board for addressing any issues concerning continuing
that individual directors who change the Board service when nominating directors for
responsibility they held when they were elected election.
to the Board should volunteer to resign from the
Board. The Board has addressed whether there should be a
mandatory retirement age. The Board also has
focused on whether a director who retires or
It is not the sense of the Board that the changes his position should be expected to tender
directors who retire or change from the position his resignation. The Board does not believe that
they held when they come on the Board should a mandatory retirement age is advisable, nor does
necessarily leave the Board. There should, it believe that a change in position necessarily
however, be an opportunity for the Board via the affects the director's contribution to the
Committee on Director Affairs to review the Company. However, the Board recognizes that both
continued appropriateness of Board membership age and change of position are matters deserving
under these circumstances. the special attention of the Nominating Committee
as it addresses continuing Board service.
23) TERM LIMITS -- The Board does not believe it 23) The Board does not believe that term limits for
should establish term limits. While term limits directors are desirable. The Nominating Committee
could help insure that there are fresh ideas and is expected to review periodically each
viewpoints available to the Board, they hold the director's continued service on the Board.
disadvantage of losing the contribution of
directors who have been able to develop, over a
period of time, increasing insight into the
Company and its operations and, therefore,
provide an increasing contribution to the Board
as a whole.
As an alternative to term limits, the Committee
on Director Affairs, in consultation with the
Chief Executive Officer and the Chairman of the
Board, will review each director's continuation
on the Board every five years. This will also
allow each director the opportunity to
conveniently confirm his/her desire to continue
as a member of the Board.
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24) RETIREMENT AGE -- It is the sense of the Board 24) The Board has not adopted a mandatory retirement
that the current retirement age of 70 is age for directors. However, the Nominating
appropriate. Committee recognizes that age is a special issue
in addressing continuing Board service.
25) FORMAL EVALUATION OF THE CHIEF EXECUTIVE 25) The Bonus, Salary and Stock Option Committee
OFFICER -- The full Board (outside directors) evaluates the Chief Executive Officer annually.
should make this evaluation annually, and it As a part of that review the Committee also
should be communicated to the Chief Executive considers the compensation of the Chief Executive
Officer by the (non-executive) Chairman of the Officer. A report by the Committee is included in
Board or the Lead Director. the annual proxy statement. The evaluation
includes both individual and corporate
The evaluation should be based on objective performance factors. The Committee has begun the
criteria including performance of the business, practice of including a meeting with the Chief
accomplishment of long-term strategic objectives, Executive Officer as a part of the evaluation
development of Management, etc. process.
The evaluation will be used by the Incentive and
Compensation Committee in the course of its
deliberations when considering the compensation
of the Chief Executive Officer.
26) SUCCESSION PLANNING -- There should be an annual 26) The Bonus, Salary and Stock Option Committee's
report by the Chief Executive Officer to the annual review with the Chief Executive Officer
Board on succession planning. There should also will include succession planning as an agenda
be available, on a continuing basis, the Chief item and the Board will receive a report in that
Executive Officer's recommendation as to his regard.
successor should he/she be unexpectedly disabled.
27) MANAGEMENT DEVELOPMENT -- There should be an 27) Management development will be included as an
annual report to the Board by the Chief Executive agenda item in the Bonus, Salary and Stock Option
Officer on the Company's program for Management Committee's annual review of the Chief Executive
development. This report should be given to the Officer. The Bonus, Salary and Stock Option
Board at the same time as the Succession Planning Committee will report on this subject to the
report. Board.
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28) BOARD INTERACTION WITH INSTITUTIONAL INVESTORS, 28) Communications with various outside institutional
THE PRESS, CUSTOMERS, ETC. -- The Board believes investors, key customers and other parties is the
that the Management speaks for General Motors. responsibility of management. Management may
Individual Board members may, from time to time, request director involvement on occasions. When a
meet or otherwise communicate with various Director has a significant communication with an
constituencies that are involved with General outside party, he should make sure that
Motors. But, it is expected that Board members management is properly informed.
would do this with the knowledge of the
Management and, in most instances, at the request
of Management.
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<PAGE>
NOTICE
and
PROXY STATEMENT
for
ANNUAL MEETING
of
SHAREHOLDERS
May 17, 1996
[ETHYL LOGO]
<PAGE>
ETHYL CORPORATION
Richmond, Virginia
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 17, 1996
The undersigned hereby appoints Bruce C. Gottwald and Sidney Buford
Scott, or either of them, with full power of substitution in each, proxies to
vote all shares of the undersigned in Ethyl Corporation, at the annual meeting
of shareholders to be held May 17, 1996, and at any and all adjournments
thereof:
1. ELECTION OF DIRECTORS: [ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
(except as indicated to vote for all
to the contrary below) nominees listed
below
William W. Berry, Phyllis L. Cothran, Bruce C. Gottwald, Thomas E. Gottwald,
Gilbert M. Grosvenor, Sidney Buford Scott and Charles B. Walker.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY SUCH NOMINEES, WRITE THE
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- -------------------------------------------------------------------------------
2. The proposal to approve the Amended Directors' Deferred Compensation Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
3. The proposal to approve the appointment of Coopers & Lybrand L.L.P. as the
auditors for the Corporation for 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. 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 as specified. If no specification is made,
this Proxy will be voted FOR all nominees and FOR Proposals 2 and 3.
Dated _____________________, 1996
_________________________________
Please sign name exactly as it
appears on the stock certificate.
Only one of several joint owners
need sign. Fiduciaries should
give full title.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
