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) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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
[LOGO]
ANNUAL MEETING OF SHAREHOLDERS
March 28, 1997
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 24, 1997, 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 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 Thursday,
April 24, 1997, 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 the designation by the Board of Coopers & Lybrand L.L.P. as
auditors for the fiscal year ending December 31, 1997; and
3. 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 11, 1997, 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, 1997
<PAGE>
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
ETHYL CORPORATION
TO BE HELD APRIL 24, 1997
APPROXIMATE DATE OF MAILING -- MARCH 28, 1997
Proxies in the form enclosed are solicited by the Board of Directors for
the Annual Meeting of Shareholders to be held on Thursday, April 24, 1997. 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 11, 1997, 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
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 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.
WILLIAM W. BERRY; age 64; director since 1983; Consultant since 1992. Prior to
his becoming an independent consultant, he served as Chairman of the Board
of Dominion Resources, Inc. (holding company for Virginia Electric and
Power Company) from 1990-1992, and Chairman of the Board of Virginia Power
Company (public utility) from 1986-1992 (retired). Other directorships:
Scott & Stringfellow Financial, Inc. and Universal Corporation.
PHYLLIS L. COTHRAN; age 50; director since 1995; President of Trigon
Healthcare, Inc. and President and Chief Operating Officer of Blue Cross
and Blue Shield of Virginia (health insurance company) since June 1995
and resigning as of March 31, 1997, having previously served as President
and Chief Operating Officer of Blue Cross and Blue Shield of Virginia.
Other directorships: Tredegar Industries, Inc. and Central Fidelity Bank.
1
<PAGE>
BRUCE C. GOTTWALD; age 63; director since 1962; Chairman of the Board, Chairman
of the Executive Committee and Chief Executive Officer of the Corporation
since March 1, 1994, having served as President, Chief Executive Officer
and Chief Operating Officer of the Corporation from April 23, 1992, to
March 1, 1994, and having previously served as President and Chief
Operating Officer of the Corporation. Other directorships: CSX
Corporation, James River Corporation and Tredegar Industries, Inc. (until
the annual meeting of shareholders to be held on May 22, 1997, when he is
not standing for reelection).
THOMAS E. GOTTWALD; age 36; 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.
GILBERT M. GROSVENOR; age 65; director since 1985; Chairman of the Board of
Trustees of the National Geographic Society (magazine publisher and
scientific society), having served as Chief Executive Officer of the
National Geographic Society from 1980-1996. Other directorships: Saul
Centers, Inc., Marriott International, Inc. and Chevy Chase Bank, F.S.B.
SIDNEY BUFORD SCOTT; age 64; director since 1959; Chairman of the Board of
Scott & Stringfellow Financial, Inc. and Scott & Stringfellow, Inc.
(investment bankers and brokers). Other directorship: Great Eastern
Energy & Development Corporation.
CHARLES B. WALKER; age 58; director since 1989; Vice Chairman of the Board,
Chief Financial Officer and Treasurer of the Corporation since March 1,
1994, having served as Executive Vice President and Chief Financial
Officer of the Corporation from August 1, 1989, to March 1, 1994, and
Treasurer of the Corporation since July 1, 1993. Other directorships:
Albemarle Corporation (Vice Chairman and Chief Financial Officer) and
Nations Fund Trust/Nations Fund, Inc.
In 1996, 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 1996 while he or she was a member of the Board of Directors. Five
meetings of the Corporation's Board of Directors were held during 1996.
The Corporation's executive committee currently consists of Messrs. Bruce
C. Gottwald, Berry, Thomas E. Gottwald and Walker. During 1996, the executive
committee met on three occasions.
Ms. Cothran and Messrs. Berry, Grosvenor and Scott currently serve on the
Corporation's audit committee. During 1996, 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. The nominating committee did not meet
during 1996. 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
2
<PAGE>
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 1996, 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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Floyd D. Gottwald, Jr., Vice Chairman of the Board and a director of the
Corporation until February 29, 1996, and Bruce C. Gottwald are brothers.
Thomas E. Gottwald, President and a director of the Corporation, and Bruce C.
Gottwald, Jr., until February 29, 1996, a director of the Corporation, are
sons of Bruce C. Gottwald. William M. Gottwald, MD, until September 1, 1996,
Senior Vice President of the Corporation, and, until February 29, 1996, a
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.
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of the forms required by Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), 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.
3
<PAGE>
STOCK OWNERSHIP
The following table lists any person (including any "group" as that term
is used in Section 13(d)(3) of the Exchange Act) who, to the knowledge of the
Corporation, was the beneficial owner as of December 31, 1996, 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 21,117,886(b)(c) 17.81%
Bruce C. Gottwald (a)
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23219
NationsBank Corporation and 11,163,037 9.42%
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 Exchange Act, although there is
no agreement among them with respect to the acquisition, retention,
disposition or voting of Ethyl Common Stock.
(b) As of December 31, 1996, the Gottwalds, individually or collectively, have
sole voting and investment power over all of the shares disclosed except
10,594,806 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, other than in this
table. This amount includes 154,650 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,
1996, pursuant to the Corporation's Incentive 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 5 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.
4
<PAGE>
(d) The NationsBank Corporation related entities are NationsBank, N.A. (South),
NationsBank, N.A. and NationsBank of Texas, N.A. 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, 1997, 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 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 or her.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES TOTAL
NAME OF BENEFICIAL OWNER WITH SOLE VOTING WITH SHARED VOTING NUMBER PERCENT
OR NUMBER OF PERSONS IN GROUP AND INVESTMENT POWER1 AND INVESTMENT POWER OF SHARES OF CLASS2
- --------------------------------- ------------------------- -------------------- ---------- -------------
<S> <C> <C> <C> <C>
William W. Berry 2,196 1,9343 4,130
Phyllis L. Cothran 2,009 0 2,009
Bruce C. Gottwald 4,981,294 615,8394 5,597,1332 4.73%
Thomas E. Gottwald 523,445 3,726,7105 4,250,1552 3.59%
Gilbert M. Grosvenor 3,129 0 3,129
Alexander McLean 10,652 0 10,652
Newton A. Perry 46,539 0 46,539
Sidney Buford Scott 65,429 37,2006 102,629
Charles B. Walker 214,575 0 214,575
Directors and officers as a group
(21 persons) 6,332,061 3,901,232 10,233,293 8.60%
</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, 1997, pursuant to the Corporation's Incentive
Stock Option Plan: Bruce C. Gottwald: 7,325 shares; Thomas E. Gottwald:
87,325 shares; Alexander McLean: 10,000 shares; Newton A. Perry: 36,683
shares; Charles B. Walker: 157,149 shares; and directors and officers as a
group: 525,222 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 1,934 of such shares.
4 Mr. Gottwald disclaims beneficial ownership of all 615,839 of such shares.
5 Mr. Gottwald disclaims beneficial ownership of all 3,726,710 of such shares.
This amount includes 3,186,101 shares of Ethyl Common Stock that Mr.
Gottwald may be deemed to own beneficially. Such shares constitute Mr.
Gottwald's interest as a discretionary beneficiary of a trust of which he is
a co-trustee.
6 Mr. Scott disclaims beneficial ownership of all 37,200 of such shares.
5
<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,
1996, 1995 and 1994.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------------ --------------------------------
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS/SARS1 COMPENSATION
- ----------------------------------------- ----- -------- -------- ------------- ----------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Bruce C. Gottwald 1996 $770,000 $200,000 -- 0 $ 38,500 2
Chairman of the Board and 1995 770,000 0 -- 0 38,500
Chief Executive Officer 1994 770,000 265,000 -- 33,532 38,500
Thomas E. Gottwald 1996 381,000 120,000 -- 0 19,050 3
President and 1995 381,000 0 -- 0 19,050
Chief Operating Officer 1994 332,000 200,000 -- 413,936 16,600
Charles B. Walker 1996 230,0004 100,000 -- 100,000 11,500 5
Vice Chairman of the 1995 230,000 0 -- 0 11,500
Board, Chief Financial 1994 253,333 118,000 -- 237,149 12,992
Officer and Treasurer
Newton A. Perry 1996 218,575 75,000 -- 0 10,929 6
Vice President 1995 201,275 43,000 -- 0 10,064
Worldwide Refinery 1994 188,125 45,000 -- 116,683 6,206
Chemicals
Alexander McLean 1996 175,1777 60,000 106,585 8 75,000 9,506 9
Vice President 1995 117,211 25,000 95,873 0 5,369
Petroleum Additives 1994 97,743 15,000 84,235 50,000 5,857
</TABLE>
- ---------------
1 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.
2 Includes contributions to the Corporation's savings plan ($7,500, $7,500 and
$7,500) and accruals in the Corporation's excess benefit plan ($31,000,
$31,000 and $31,000) for 1996, 1995 and 1994, respectively.
3 Includes contributions to the Corporation's savings plan ($7,500, $7,500 and
$7,500) and accruals in the Corporation's excess benefit plan ($11,550,
$11,550 and $9,100) for 1996, 1995 and 1994, respectively.
4 Mr. Walker also served as an officer of Albemarle Corporation during 1996
and is compensated separately by Albemarle Corporation for such service.
5 Includes contributions to the Corporation's savings plan ($7,500, $7,500 and
$7,500) and accruals in the Corporation's excess benefit plan ($4,000, $4,000
and $5,492) for 1996, 1995 and 1994, respectively.
6 Includes contributions to the Corporation's savings plan ($7,500, $7,500 and
$6,206) for 1996, 1995 and 1994, respectively, and accruals in the
Corporation's excess benefit plan ($3,429 and $2,564) for 1996 and 1995,
respectively.
7 Mr. McLean is compensated in pounds sterling. Each amount listed is based on
the exchange rate in effect at the time each payment was made.
8 Includes payments for expatriate expenses and allowances ($46,222, $45,230
and $68,371) for 1996, 1995 and 1994, respectively, and tax subsidies
($60,363, $50,643 and $15,864) for 1996, 1995 and 1994, respectively.
9 Includes accruals in the Ethyl Petroleum Additives Limited share scheme.
Each amount listed here in U.S. dollars is based on the exchange rate in
effect at the time each payment was made.
6
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table presents information concerning option and SAR grants to
the Chief Executive Officer and the four next most highly compensated
executive officers of the Corporation. Each of these options relates to Ethyl
Common Stock and includes a tandem stock appreciation right ("SAR").
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------------------- VALUE AT ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK PRICE
OPTIONS/SARS EXERCISE APPRECIATION FOR
GRANTED TO OR BASE OPTION TERM
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED (#) FISCAL YEAR ($) DATE 5% ($) 10% ($)
- ------------------- ------------ ------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Bruce C. Gottwald 0
Thomas E. Gottwald 0
Charles B. Walker 100,0001 35.71% $8.875 12/12/06 $558,144 $1,414,446
Newton A. Perry 0
Alexander McLean 75,0001 26.79% 8.875 12/12/06 418,608 1,060,835
</TABLE>
- ---------------
1 These options become exercisable in 20% increments based on the attainment
of certain performance objectives. In addition, the options will vest to
persons who are still employed by the Corporation thirty days prior to the
expiration date of the option, in the event of a change in control or upon
death, disability or retirement.
The following table presents information concerning option and SAR
exercises by the Chief Executive Officer and the four next most highly
compensated executive officers of the Corporation.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
AT FY-END (#)1 AT FY-END ($)2
SHARES ACQUIRED VALUE ----------------------------- -----------------------------
NAME ON EXERCISE (#) REALIZED (#) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- ---------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bruce C. Gottwald 0 $0 7,325 0 $ 0 $ 0
Thomas E. Gottwald 0 0 87,325 320,000 0 0
Charles B. Walker 0 0 157,149 180,000 4,148 62,500
Newton A. Perry 0 0 36,683 80,000 0 0
Alexander McLean 0 0 10,000 115,000 0 46,875
</TABLE>
- ---------------
1 Each of these options relates to Ethyl Common Stock and includes a tandem
SAR.
2 These values are based on $9.50, the closing price of Ethyl Common Stock on
The New York Stock Exchange on December 31, 1996.
7
<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, 1996, 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 of 1986, as amended (the "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.
PENSION PLAN TABLE*
<TABLE>
<CAPTION>
YEARS OF PENSION BENEFIT SERVICE AND ESTIMATED ANNUAL BENEFITS
-------------------------------------------------------------------------------------
FINAL-AVERAGE EARNINGS 10 15 20 25 30 35 40 45
- ---------------------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 300,000 $ 43,900 $ 65,850 $ 87,795 $109,745 $131,695 $153,640 $175,590 $197,540
350,000 51,400 77,100 102,795 128,495 154,195 179,890 205,590 231,290
400,000 58,900 88,350 117,795 147,245 176,695 206,140 235,590 265,040
450,000 66,400 99,600 132,795 165,995 199,195 232,390 265,590 298,790
500,000 73,900 110,850 147,795 184,745 221,695 258,640 295,590 332,540
550,000 81,400 122,100 162,795 203,495 244,195 284,890 325,590 366,290
600,000 88,900 133,350 177,795 222,245 266,695 311,140 355,590 400,040
650,000 96,400 144,600 192,795 240,995 289,195 337,390 385,590 433,790
700,000 103,900 155,850 207,795 259,745 311,695 363,640 415,590 467,540
750,000 111,400 167,100 222,795 278,495 334,195 389,890 445,590 501,290
800,000 118,900 178,350 237,795 297,245 356,695 416,140 475,590 535,040
850,000 126,400 189,600 252,795 315,995 379,195 442,390 505,590 568,790
900,000 133,900 200,850 267,795 334,745 401,695 468,640 535,590 602,540
950,000 141,400 212,100 282,795 353,495 424,195 494,890 565,590 636,290
1,000,000 148,900 223,350 297,795 372,245 446,695 521,140 595,590 670,040
</TABLE>
- ---------------
* Assumes attainment of age 65 in 1996 and Social Security Covered
Compensation of $27,576.
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, 1996, are: Bruce C. Gottwald, 41; Thomas E. Gottwald, 5; Charles
B. Walker, 16; and Newton A. Perry, 28. 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.
Mr. McLean participates in the Ethyl Petroleum Additives Limited Pension
Plan. The formula under that plan is equal to 1.6667% times pensionable salary
times years of service. Mr. McLean has 8 years of service under the plan. This
accrued annual benefit as of December 31, 1996, is $17,378. This amount is
based on the exchange rate at December 31, 1996.
8
<PAGE>
EXCESS BENEFIT PLANS
The Corporation maintains excess benefit plans (the "Excess 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 Code. 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. These benefits
have been granted to Mr. Walker. All benefits under the Excess Plans vest upon
a Change in Control of the Corporation, as defined in the Plans.
COMPENSATION OF DIRECTORS
Each non-employee director is 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 is a member. In addition, each such director is 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.
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 not commence
and may be discontinued under certain circumstances.
On each July 1 each non-employee director is awarded 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.
Non-employee Directors may defer, in ten percent increments, all or part
of their retainer fee and meeting fees into either a deferred cash account or
a deferred stock account, or a percentage of the fees into each of the
accounts, both of which are unfunded and maintained for recordkeeping purposes
only. Distributions under the Deferred Compensation Plan, paid in a single sum
or in up to ten annual installments, cannot begin within two years of the
beginning of the deferral year. The maximum aggregate number of shares of
Ethyl Common Stock that may be issued under the Deferred Compensation Plan is
100,000 shares.
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,
consists of Messrs. Berry (Chairman), Grosvenor and Scott and Ms. Cothran. 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.
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OVERALL OBJECTIVES
The objectives of the Corporation's executive compensation program are to:
** Provide balanced, competitive total compensation that will
enable the Corporation to attract, motivate and retain highly qualified
executives.
** Provide incentives for enhancing the profitability of the
Corporation by rewarding executives for meeting individual and corporate goals.
** Align the financial interests of the executives closely to
those of the shareholders by encouraging executive ownership of Ethyl Common
Stock.
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, with a significant portion of compensation depending upon
performance. The program includes: base salary, annual bonuses in cash or cash
and stock, and stock options with performance vesting and SARs. The Committee
considers all elements of the program when setting appropriate compensation.
The Corporation seeks to maintain its executive compensation packages
around 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 providing incentive to
the Corporation's executives to achieve long-term performance.
In December 1996 and January 1997 the Committee met with each of the five
officers included in the compensation table on page 6 to review 1996
performance against goals and objectives that had been set for the year.
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.
BASE SALARIES
Increases in base salaries are based on evaluations of past and current
Corporation operating profits and individual contribution to the Corporation's
success, market data for comparable positions and salary levels of the
Corporation's peer group companies and alignment of salary and organization
within the Corporation. 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 the
ranges of compensation offered by peer group companies.
In keeping with the objective of maximizing long-term performance by
putting a significant part of total compensation at risk, no adjustments were
made in base salary for the top three executive officers.
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ANNUAL BONUSES
The annual bonus program is designed 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).
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 1996 under the formula was $6,085,080, but the
Committee, as has been the practice in prior years, did not appropriate the
entire amount. Of this amount, a total of $2,063,700 was awarded in 1997 as
1996 bonuses.
Annual bonus awards are determined by the Committee in conjunction with
senior management, and are based on evaluation of the performance, level of
responsibility and leadership of the individual executive in relation to
overall corporate results. Bonus awards for 1996 generally were higher than
1995, reflecting the improvement in operating income and income per share over
1995. The Committee believes that the Corporation's strategic moves in a
difficult market have been successful. Much credit is given in recognition of
the Corporation's management of the Texaco Petroleum Additives acquisition
and, more specifically, doing so with no material increase in selling, general
and administrative expenses.
STOCK OPTIONS
Under the Incentive Stock Option Plan approved by the shareholders, the
Committee, in its discretion, may grant options to purchase shares of Ethyl
Common Stock (with or without related SARs) to any executive of the Corporation
or any subsidiary who has contributed or can be expected to contribute to the
Corporation's profits and growth. The Committee determines the amount of the
grant, the term of the options and the requisite conditions for exercise.
During 1996, the Committee granted to three officers options (with
related SARs) to purchase an aggregate of 200,000 shares of Ethyl Common
Stock. The options vest when either earnings or stock price targets are met.
The option awards 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 1 on page 7.
CEO COMPENSATION
In keeping with the objective of improving long-term performance and
shareholder value, the Chief Executive Officer as a major shareholder strongly
advocates pay for performance. Consequently, greater emphasis should be placed
on compensation at risk. The Chief Executive Officer asked not to be
considered for a salary increase for 1996.
The Committee believes that in the last several years the Chief Executive
Officer has taken the necessary steps to position the Corporation for the
future in an admittedly difficult competitive environment. Accordingly, in
recognition of the improvement in operating profits, the Committee awarded the
Chief Executive Officer a bonus for 1996 of $200,000.
Compensation survey data places the CEO's salary for 1996 at
approximately the size-adjusted median of companies surveyed by the
Corporation's compensation consultants.
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SECTION 162(M)
Section 162(m) of the Code provides 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 Section 162(m) of the Code),
certain of the Corporation's benefit plans would have to be amended to limit
the Committee's discretion to determine individual awards 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 on awards is an important
feature of the plans and one that serves the best interests of the Corporation
by allowing the Committee to recognize and motivate individual executive
officers as circumstances warrant. Further, the Committee currently does not
anticipate that there will be any compensation subject to loss of tax
deductibility. Consequently, the Committee does not propose at the present
time to amend any plan to comply with the performance-based criteria.
THE BONUS, SALARY AND STOCK OPTION COMMITTEE
William W. Berry, Chairman February 27, 1997
Gilbert M. Grosvenor
Sidney Buford Scott
Phyllis L. Cothran
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Comparison of Five-Year Cumulative Total Return
Performance through December 31, 1996
(GRAPH GOES HERE)
1991 1992 1993 1994 1995 1996
Ethyl 100 104 100 90 121 98
S&P 500 100 108 118 120 165 203
Chemical Composite 100 110 123 136 178 220
The Lubrizol Corporation 100 99 127 130 109 126
* ASSUMES $100 INVESTED ON LAST DAY OF DECEMBER 1991. DIVIDENDS ARE
REINVESTED QUARTERLY.
(1) The total return information for the Chemical Composite has been
weighted by market capitalization and includes the following
companies in all the 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 included 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.
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
1997, 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.
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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 the Corporation's quarterly reports.
FINANCIAL STATEMENTS
A copy of the Corporation's Annual Report on Form 10-K for the year 1996,
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.
Secretary
Ethyl Corporation
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23218
PROPOSALS FOR 1998 ANNUAL MEETING
Under the regulations of the Securities and Exchange Commission, any
shareholder desiring to make a proposal to be acted upon at the 1998 annual
meeting of shareholders must present such proposal to the Corporation at its
principal office in Richmond, Virginia, not later than November 28, 1997, in
order for the proposal to be considered for inclusion in the Corporation's
proxy statement. The Corporation anticipates holding the 1998 annual meeting
on April 23, 1998.
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 24, 1997
[LOGO]
ETHYL CORPORATION
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23218
<PAGE>
<PAGE>
ETHYL CORPORATION
P R O X Y P R O X Y
RICHMOND, VIRGINIA
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1997
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 April 24, 1997, and at any and all adjournments
thereof.
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 Proposal 2.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
<PAGE>
ETHYL CORPORATION
Please mark vote in oval in the following manner using dark ink only. [X]
The Board of Directors recommends that you vote FOR all nominees and FOR
Proposal 2.
1. ELECTION OF DIRECTORS--
Nominees: William W. Berry, Phyllis L. For Withhold For All
Cothran, Bruce C. Gottwald, Thomas E. All All Except
Gottwald, Gilbert M. Grosvenor, Sidney
Buford Scott and Charles B. Walker. [] [] []
INSTRUCTION: To withhold authority to vote
for any such nominee(s), write the name(s)
in the space provided below.
_______________________________________________
2. The proposal to approve the appointment of For Against Abstain
Coopers & Lybrand L.L.P. as the auditors for
the Corporation for 1997. [] [] []
3. 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.
Dated:_____________, 1997
Signature _________________________
Please sign name exactly as it appears on the stock certificate. Only one of
several joint owners or co-owners need sign. Fiduciaries should give full
title.
