As filed with the Securities and Exchange Commission on March 20, 1998
Registration No. 33-57243
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
AMENDMENT NO. 5
to
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------
Ethyl Corporation
(Exact name of Registrant as Specified in Its Charter)
VIRGINIA 54-0118820
(State or Other Jurisdiction of
Incorporation or Organization) (I.R.S. Employer Identification No.)
330 South Fourth Street
P. O. Box 2189
Richmond, Virginia 23218
(804) 788-5000
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
Bruce C. Gottwald
Chairman of the Board and Executive Committee
Ethyl Corporation
330 South Fourth Street
P. O. Box 2189
Richmond, Virginia 23218
(804) 788-5000
(Names, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent for Service)
Copies to:
Steven M. Mayer, Esq. Allen C. Goolsby, Esq.
Vice President and General Counsel Hunton & Williams
Ethyl Corporation Riverfront Plaza, East Tower
330 South Fourth Street 951 East Byrd Street
P. O. Box 2189 Richmond, Virginia 23219
Richmond, Virginia 23218
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement in light of
market conditions and other factors.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| __________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_| __________
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Prospectus
$300,000,000
Ethyl Corporation
Debt Securities
Convertible Debt Securities
Preferred Stock
Ethyl Corporation ("Ethyl" or the "Company") intends to issue from time to
time its (i) unsecured senior debt securities (the "Debt Securities") and (ii)
shares of Preferred Stock (the "Preferred Stock"), which may be issued in the
form of depositary shares evidenced by depositary receipts ("Depositary
Shares"), having an aggregate initial public offering price not to exceed
$300,000,000, on terms to be determined at the time of sale. The Debt
Securities, the Preferred Stock and the Depositary Shares offered hereby
(collectively, the "Offered Securities") may be offered, separately or as units
with other Offered Securities, in separate series in amounts, at prices and on
terms to be determined at the time of sale and to be set forth in a supplement
to this Prospectus (a "Prospectus Supplement").
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered, such as, where applicable, (i) in the case of
Debt Securities, the specific designation, aggregate principal amount, currency,
denomination, maturity, interest rate, time of payment of interest, terms of
redemption at the option of the Company or repayment at the option of the holder
or for sinking fund payments, the designation of the Trustee acting under the
Indenture, terms for conversion into or exchange for Preferred Stock and the
initial public offering price; (ii) in the case of Preferred Stock, the
designation, preferences and other rights, qualifications, limitations or
restrictions thereof, the initial public offering price and whether interests in
the Preferred Stock will be evidenced by Depositary Shares; and (iii) in the
case of all Offered Securities, whether such Offered Security will be offered
separately or as a unit with other Offered Securities, will be set forth in the
accompanying Prospectus Supplement.
The Prospectus Supplement will also contain information, where applicable,
about certain United States Federal income tax considerations relating to, and
any listing on a securities exchange of, the Offered Securities covered by the
Prospectus Supplement.
The Offered Securities may be sold directly by the Company, or through
agents designated from time to time, or through underwriters or dealers. If any
agent of the Company, or any underwriters are involved in the sale of Offered
Securities, the names of such agents or underwriters and any applicable fees,
commissions or discounts and the net proceeds to the Company from such sale will
be set forth in the applicable Prospectus Supplement. See "Plan of
Distribution."
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is March 20, 1998
<PAGE>
Certain persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the Preferred Stock
and/or the Debt Securities, including over-allotment, stabilizing, and
short-covering transactions in such Securities. For a description of these
activities, see "Plan of Distribution."
No person has been authorized to give any information or to make any
representation not contained in this Prospectus or the Prospectus Supplement in
connection with any offering made thereby, and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or by any underwriter, dealer or agent. This Prospectus and the
Prospectus Supplement do not constitute an offer to sell or a solicitation of an
offer to buy any securities offered thereby in any jurisdiction to any person to
whom it is unlawful to make such offer in such jurisdiction.
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION ........................................................ 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE .............................. 3
THE COMPANY .................................................................. 4
YEAR END UPDATE................................................................7
USE OF PROCEEDS .............................................................. 7
SELECTED CONSOLIDATED FINANCIAL DATA ......................................... 8
SELECTED UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION ...............9
CONDENSED CONSOLIDATED FINANCIAL DATA ........................................15
DESCRIPTION OF DEBT SECURITIES ...............................................18
General .............................................................18
Restrictive Covenants ...............................................18
Events of Default ...................................................20
Defeasance ..........................................................21
Modification and Waiver .............................................22
Global Securities ...................................................22
DESCRIPTION OF CAPITAL STOCK .................................................24
General .............................................................24
Preferred Stock .....................................................24
Common Stock ........................................................26
Certain Provisions of the Restated Articles and By-Laws .............26
DESCRIPTION OF DEPOSITARY SHARES .............................................27
PLAN OF DISTRIBUTION .........................................................27
VALIDITY OF SECURITIES .......................................................28
EXPERTS ......................................................................28
2
<PAGE>
AVAILABLE INFORMATION
Ethyl is subject to the information requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith,
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and other
information filed by Ethyl with the Commission can be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Regional Offices of the
Commission at Suite 1400, Northwestern Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661 and Seven World Trade Center, Suite 1300, New York, New
York 10048. In addition, copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address for such
site is http://www.sec.gov. Such reports, proxy statements and other information
concerning Ethyl can also be inspected at the offices of The New York Stock
Exchange, 20 Broad Street, New York, New York 10005 and The Pacific Stock
Exchange, 301 Pine Street, San Francisco, California 94104.
Ethyl has filed with the Commission a Registration Statement on Form S-3
under the Securities Act of 1933 (the "Securities Act") with respect to the
securities offered hereby. For further information with respect to Ethyl and the
Offered Securities, reference is made to such Registration Statement and to the
exhibits thereto. Statements contained herein concerning the provisions of
certain documents are not necessarily complete and, in each instance, reference
is made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Ethyl's Annual Report on Form 10-K for the fiscal year ended December 31,
1996 filed pursuant to Section 13 or 15(d) of the Exchange Act, Ethyl's
Quarterly Report on Form 10-Q for the first quarter ended March 31, 1997,
Ethyl's Quarterly Report on Form 10-Q for the second quarter ended June 30,
1997, Ethyl's Quarterly Report on Form 10-Q for the third quarter ended
September 30, 1997, and Ethyl's Schedule 13E-4 (Issuer tender offer statement)
filed pursuant to Section 13 (E)(1) of the Exchange Act on August 27, 1997, are
hereby incorporated by reference into this Prospectus. All documents filed by
Ethyl with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to the termination of
the offering made hereby shall be deemed to be incorporated by reference into
this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein or in any Prospectus Supplement modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Ethyl will provide without charge to each person to whom a copy of this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents referred to above which have been or may be
incorporated by reference into this Prospectus, other than certain exhibits to
such documents. Copies of the Indenture summarized on the following pages are
also available upon request. Requests for such copies should be directed to
Steven M. Mayer, Vice President and General Counsel, Ethyl Corporation, 330
South Fourth Street, P.O. Box 2189, Richmond, Virginia 23218 (Telephone: (804)
788-5000).
3
<PAGE>
THE COMPANY
The Company is a major manufacturer and blender of petroleum additives.
Incorporated in Virginia in 1887, the Company has approximately 1,500 employees.
Its principal executive office is located at 330 S. Fourth Street, Richmond,
Virginia 23218, and its telephone number is (804) 788-5000.
The Company's petroleum additives business includes lubricant additive
products, fuel additive(non-antiknock) products and antiknock products.
Lubricant additives extend the useful life of lubricants and assist them in
preventing wear and corrosion of metallic parts, protecting seals, allowing
metallic parts to withstand extremely high temperatures and pressures, and
increasing the adhesion of oils to metallic parts. Lubricant additives are used
in oils, fluids and greases for over-the-road and off- highway vehicles,
aircraft, power tools, marine, railroad and industrial equipment and machinery
requiring lubrication, thereby extending equipment life. Lubricant additives are
used in meeting government regulations and original equipment manufacturers'
specifications and standards, including improving fuel economy.
Lubricant additives include packages for (a) passenger car motor oils for
gasoline engines, heavy-duty diesel oils for diesel-powered vehicles, diesel
oils for locomotive, marine and stationary power engines and oils for two- cycle
engines, and (b) automatic transmission fluids, automotive and industrial gear
oils, hydraulic fluids and industrial oils; as well as components for engine oil
and other additive packages such as (i) antioxidants to resist high-temperature
degradation, (ii) antiwear agents to protect metal surfaces from abrasion, (iii)
detergents to prevent carbon and varnish deposits from forming on engine parts,
(iv) dispersants to keep engine parts clean by suspending insoluble products of
fuel combustion and oil oxidation, (v) friction reducers to facilitate movement,
(vi) pour-point depressants to enable oils to flow at cold temperatures, (vii)
corrosion inhibitors to protect metal parts and (viii) viscosity index improvers
to provide uniform flow properties over a wide range of temperatures.
Fuel additives (non-antiknock) increase the quality of gasolines and diesel
fuel by retaining the quality of fuel over time, maintaining engine cleanliness,
protecting metals, reducing friction and wear, lowering emissions and raising
the level of cetane. Fuel additives are used by refiners to meet regulations and
standards, including those reducing exhaust emissions. Fuel additives also are
used in fuels for over-the-road and off-highway vehicles, piston and jet
aircraft, railroad, marine and other gasoline, diesel or synfuel powered engines
as well as home heating oil.
Fuel additives include cetane improvers to improve the combustion
properties and power delivery of diesel fuels; amine stabilizers and hindered
phenolic antioxidants to prevent thermal degradation during storage and
transport; corrosion inhibitors to prevent fuel storage and pumping system
failures; cold flow improvers to enhance diesel fuel pumping under cold weather
conditions; detergent packages to keep carbon deposits from forming on fuel
injectors, intake valves or carburetors and in combustion chambers; dyes for
fuel identification and leak detection; lubricity agents; and a conductivity
modifier to neutralize static charge build-up in fuel and products for home
heating oils. The Company also markets Greenburn(R) combustion products, an
environmentally friendly line of proprietary products designed for diesel fuel,
home heating oil and power generation fuel markets worldwide. Greenburn(R)
combustion products contain HiTEC(R) 3000 performance additive.
Antiknocks improve the quality of gasolines by increasing the level of
octane of gasoline. Antiknock products include lead and manganese antiknock
compounds to increase octane and prevent power loss due to early or late
combustion (engine knock) in gasoline engines. These additives are used in
over-the-road and off-highway vehicles and piston aircraft.
Lead antiknock compounds, which are sold worldwide to petroleum refiners,
remain one of the Company's largest product lines. The compounds are
manufactured by The Associated Octel Company Limited ("Octel") under a long-term
supply contract.
Lead antiknock compounds have been subject to regulation restricting the
amount of the product that can be used in motor gasoline. These regulations
began in the United States in the 1970s and have slowly spread to other
4
<PAGE>
countries. Today, the use of lead antiknock compounds for motor gasoline has
been eliminated in the U.S. and Canada, though use in certain other applications
continues in these countries. As the Company has forecast and planned, the
market for lead antiknock compounds continues to decline as the use of unleaded
gasoline grows and regulations limit use of leaded gasoline.
On a consolidated basis, including prior-year operations of spun-off
businesses while they were part of the Company, the contribution of lead
antiknock compounds to the Company's net sales was about 20% in 1996, 26% in
1995 and 22% in 1994. The lead antiknock profit contribution to the Company's
consolidated operating profit, excluding allocation of corporate expenses, is
estimated to have been 59% in 1996, 74% in 1995 and 56% in 1994.
On a pro forma basis, excluding prior year operations of spun-off
businesses, the contribution of lead antiknock compounds to net sales would have
been 25% in 1994. On a pro forma basis, the contribution to operating profit
would have been 60% in 1994.
In prior years, the Company generally had been able to largely offset a
continuing decline in shipments of lead antiknock compounds with higher margins
due primarily to increases in selling prices. In 1997, prices were up only
slightly for the year; however, volume was substantially lower reflecting both a
declining market and severe competitive pressures. To a lesser degree, in 1996
the increases in selling prices were also not enough to offset the effect of
decreased shipments. Further decline in the use of lead antiknocks will
adversely affect such sales and profit contributions unless the Company can
offset such declines with increased margins or regain market share.
In December 1993, the Company entered into an agreement with Octel pursuant
to which Octel allocates a portion of its production capacity of lead antiknock
compounds to the Company for sale and distribution through the Company's
worldwide network. The Company has discontinued production of lead antiknock
compounds, but continues to maintain the production equipment in its
subsidiary's Canadian plant, where the Company previously had produced some of
its lead antiknock compounds. The Octel agreement continues so long as the
Company determines that a market continues to exist for lead antiknock
compounds. Under the agreement, which is cancelable at the Company's option,
upon due notice, with no minimum purchase obligations, the Company has the right
to purchase from Octel antiknock compounds which the Company estimates will be
sufficient to cover the Company's needs in any contract year. Prices are subject
to periodic escalation and adjustment.
The Company believes the agreement with Octel assures it of an ongoing
efficient source of supply for lead antiknock compounds as the worldwide demand
for these products continues to decline. The Company and Octel continue to
compete vigorously in sales and marketing of lead antiknock compounds. In
addition to the supply agreement, Octel and the Company have agreed that the
Company's fleet of ships will distribute for Octel its lead antiknock compounds
that are shipped in bulk in ocean-going vessels.
The Company also sells manganese-based antiknock compounds, HiTEC(R)3000
performance additive ("MMT"), which are used in leaded and conventional unleaded
gasoline. The compounds are manufactured by Albemarle Corporation under a
long-term supply contract with the Company.
In October, 1995, the United States Court of Appeals for the District of
Columbia Circuit unanimously ordered the EPA to register MMT for use in
conventional unleaded gasoline retroactively to November 30, 1993, the date on
which the EPA determined that the Company's waiver application satisfied all
applicable Clean Air Act standards. In addition, the Court confirmed during the
proceedings that if the EPA continues to have health concerns with reference to
the product, the Clean Air Act provides adequate provisions in which to address
these issues. Accordingly, in December 1995, the Company began the sale of MMT
to the U.S. refining industry. In February, 1996, the Environmental Defense Fund
initiated a campaign to try to prevent refiners from using MMT in the U.S. The
Company continues to aggressively defend MMT against this or any similar
campaign which attempts to handicap the marketing of this product.
In Canada, legislation was introduced in May 1995 in the Canadian
Parliament to restrict the interprovincial transport of MMT in Canada as well as
the import of MMT into Canada. The legislation passed the House of Commons in
December 1996, passed the Senate in April 1997 and became effective June 23,
1997. In April, 1997 the Company filed a claim against the Canadian government
for damages under the arbitration provisions of the North American Free Trade
Agreement ("NAFTA"). The NAFTA allows a company to bring before an arbitration
panel claims against a NAFTA government for alleged violations of that country's
obligations toward foreign investors as required by the Treaty. The Company's
management contends the legislation violates Canada's obligations relating to
5
<PAGE>
national treatment and performance requirements and constitutes expropriation
which would cause a significant impact on the Company's investment in Ethyl
Canada, Inc., its Toronto-based subsidiary. The arbitration process is
proceeding according to the schedule establish by the arbitration panel.
A majority of the Company's production of petroleum additives and the
laboratories supporting them is in the United States. The Company also has
production facilities in Feluy Belgium; Sarnia, Ontario, Canada; and Rio de
Janeiro, Brazil. (The Company sold its Gent production facility on December 31,
1997. The purchaser will continue producing and supplying Ethyl from the Gent
facility with materials it uses in manufacturing lubricant additives packages.)
The Company has been obtaining lubricant additives, including crankcase
packages and certain components, under a supply agreement with a subsidiary of
Mitsubishi Kasei Corporation from its petroleum additives plant in Yokkaichi,
Japan, but it is consolidating production and most of its laboratory support
into U.S. and European facilities in early 1998.
The Company also is obtaining liquid olefin copolymer ("OCP") viscosity
index improver under supply agreements with Antwerp Distribution and Product
Operations N.V. from its manufacturing plant in Gent, Belgium, and with Mi Chang
Oil Ind. Co., Ltd. in Ulsan, Korea, both of which receive solid OCP viscosity
index improver from DSM Copolymer, Inc.
In Canada, Europe and the most significant of the Asian countries where the
Company does business, the economies are generally stable and repatriation of
earnings has been successful. The Company's only manufacturing operations in
Latin America are in Brazil and are conducted in the local currency. Other
operations in Latin America are conducted primarily in U.S. dollars.
Consequently, there is no expectation that the Company will experience
significant currency exposure risk. Also, under current governmental regulations
in countries where the Company operates, repatriation of earnings is possible.
Sales in other areas are normally paid for through letters of credit or are
prepaid. Customer relationships of all foreign operations mainly consist of
financially viable governmental organizations and large private companies.
Recent problems in certain Asian countries have not yet significantly affected
the Company's operations in Asia, and are not expected to unless those problems
increase and spread to other countries where the Company is most heavily
involved.
The Company has, in the past, attempted to limit its exposure to
fluctuating foreign exchange rates primarily through operational actions. The
Company has both manufactured for and purchased from certain foreign companies
giving it a foreign currency cost basis to offset some of its foreign currency
revenue exposures in its foreign operations. Since the Company's practice has
been to monitor its exposures and keep them at a minimum, external foreign
currency hedging transactions have not been utilized recently.
However, in recent years, fluctuations in foreign currency exchange rates
have been more volatile. At the same time, the Company's exposure to foreign
currencies has increased slightly. Therefore, foreign exchange losses have been
larger.
As the Company moves toward consolidating its manufacturing operations
increasingly in the U.S. and, to a lesser extent, European, manufacturing and
blending facilities, its ability to minimize foreign currency exposures through
operational means is expected to be reduced. Therefore, the Company is
investigating, and may participate in external foreign currency hedging
transactions.
Fuel additives for gasoline, diesel fuels and heating oils are sold
directly to petroleum refiners and marketers, terminals and blenders. Lubricant
additive packages are sold directly to companies producing finished oils and
fluids.
Major raw materials used by the petroleum additives business include
process oils, polybutenes, 2-ethyl-1- hexanol and other alcohols, antioxidants
and amines as well as electricity and natural gas as fuels, which are purchased
at prices the Company believes are competitive.
The Company's petroleum additives businesses operate in highly competitive
markets, most of which involve a limited number of competitors. The competitors
are both larger and smaller than the Company in terms of resources and market
6
<PAGE>
share. Competition in connection with all of the Company's petroleum additive
products requires continuing investments in research and development of new
products or leading technologies, continuing product and process improvements
and providing specialized customer services.
Regarding Year 2000 computer systems and software issues, the Company has
recently completed major projects of (1) conversion of 100% mainframe systems to
modern client/server systems, and (2) implementation of SAP, Peoplesoft and
other commercial and desktop software. These new systems are Year 2000
compliant. The Company also has been reviewing plant process control systems and
research, development and testing information and analytical systems, and has
either determined those systems are Year 2000 compliant or has identified
solutions to solve potential problems within the required time frame.
YEAR END UPDATE
On January 26, 1998, the Company reported 1997 earnings that reflected
continuing improvement in all lubricant additive and fuel additive (other than
antiknocks) product lines while lead antiknock profits were significantly lower
than last year, reflecting the expected declining market. For the year 1997, net
income was $77.5 million or 71 cents per share on both a basic and diluted basis
compared to year 1996 net income of $93 million or 78 cents per share on both a
basic and diluted basis. Net sales for the year 1997 amounted to $1,064 million,
a decrease of 7 percent from $1,150 million for the year 1996.
Results for the fourth quarter of 1997 reflected both the expected lower
lead antiknock profit and lower earnings from most other major product lines
compared with the fourth quarter 1996. Fourth quarter 1997 net income was $16.2
million or 19 cents per share on both a basic and diluted basis compared with
fourth quarter 1996 net income of $25.3 million or 21 cents per share on both a
basic and diluted basis. Net sales for the fourth quarter of 1997 were $274.5
million, down 10 percent from fourth quarter 1996 net sales of $304 million.
The year and fourth quarter 1997 periods included a net charge of $3.8
million after-tax primarily resulting from the net impact of both sales and
impairments of certain non-operating assets, largely offset by a $3.4 million
after-tax gain on the sale of Ethyl Additives BVBA, which owned the Gent,
Belgium, manufacturing facility. The results for both the year and fourth
quarter also include an unfavorable foreign currency impact as well as higher
interest and financing cost, partially offset by a lower effective tax rate. The
higher interest and financing cost is due to the increased debt associated with
the October 2, 1997, acquisition of about 35 million shares of the Company's
common stock at $9.25 per share in accordance with the stock buy-back offer. The
total stock purchase and related cost of about $328.9 million was financed under
the Company's loan agreement. As of December 31, 1997, the Company had about
83.4 million shares of common stock outstanding.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used primarily for
repayment of currently outstanding indebtedness. Under the terms of the
Company's $750,000,000 Competitive Advance, Revolving Credit Facility and Term
Loan Agreement with a group of commercial banks, the revolving credit limit
under the agreement will be reduced from $450,000,000 by the amount of the net
proceeds from the sale of the Offered Securities, but will not be reduced below
$200,000,000. Additional proceeds beyond those used for repayment of currently
outstanding debt will be used for general corporate purposes, which may include
additions to working capital, capital expenditures, stock repurchases, and
acquisitions.
7
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SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth certain condensed consolidated financial
data of the Company for the nine-month periods ended September 30, 1997 and
1996, and the year ended December 31, 1996. The nine month data are in summary
form and are unaudited. The year end data is derived from the Company's audited
financial statements. On February 29, 1996, the Company completed the
acquisition of the worldwide lubricant additives business of Texaco Inc.
("Texaco"), including manufacturing and blending facilities, identifiable
intangibles and working capital. The acquisition, accounted for under the
purchase method, included a cash payment of $134.3 million and a future
contingent payment of up to $60 million (the "contingent note"). The cash
payment was financed primarily under the Company's revolving credit agreement.
The payment of up to $60 million will become due on February 26, 1999, with
interest payable on the contingent note until such date. The actual amount of
the contingent payment and total interest will be determined using an
agreed-upon formula based on volumes of certain acquired product lines shipped
during the calendar years 1996 through 1998, as specified in the contingent note
agreement. Texaco retained substantially all noncurrent liabilities. On October
2, 1997, the Company purchased approximately 35.0 million shares of its common
stock at $9.25 per share, with the purchase price and related costs totaling
approximately $328.9 million. The purchase was financed under the Company's new
Competitive Advance, Revolving Credit Facility and Term Loan Agreement. The
results of operations of Texaco for the two months ended February 29, 1996,
prior to its acquisition and the effect of the stock purchase are not reflected
in the information provided below. Selected unaudited pro forma consolidated
financial information related to the acquisition and the stock purchase is
presented on pages 9-14.
(In thousands, except per share amounts and ratios)
Condensed Consolidated Results of Operations (a)
<TABLE>
Nine Months Ended Year Ended
September 30, December 31,
1997 1996 1996
(unaudited) (unaudited)
<CAPTION>
<S> <C> <C> <C>
Net sales $ 789,123 $ 845,674 $ 1,149,651
Cost of goods sold 564,013 592,386 804,623
------- ------- -------
Gross profit 225,110 253,288 345,028
Selling, research, testing, development,
and general expenses 115,754 128,003 175,349
------- ------- -------
Operating profit 109,356 125,285 169,679
Interest and financing expenses 15,489 18,650 24,268
Other income, net (947) (1,258) (361)
------- ------- -------
Income before income taxes 94,814 107,893 145,772
Income taxes 33,441 40,266 52,800
------ ------ -------
Net income $ 61,373 $ 67,627 $ 92,972
======= ======= =========
Basic and diluted earnings per share (b) $ 0.52 $ 0.57 $ 0.78
======= ======= =========
Shares used to compute:
Basic earnings per share 118,444 118,444 118,444
======= ======= =======
Diluted earnings per share 118,452 118,449 118,448
======= ====== =======
Ratio of earnings to fixed charges (c) 5.72 5.71 5.83
</TABLE>
<TABLE>
<CAPTION>
Condensed Consolidated Balance Sheet (unaudited)
September 30, 1997
<S> <C> <C>
Assets Liabilities and shareholders' equity
Cash $ 12,906 Current liabilities $ 179,576
Other current assets 379,413 Long-term debt (d) 275,596
--------- Other noncurrent liabilities 88,393
Total current assets 392,319 Deferred income taxes 61,173
Noncurrent assets 660,831 Shareholders' equity 448,412
--------- ---------
Total $1,053,150 Total $1,053,150
========== ==========
<FN>
Notes:
a. Information for 1996 includes the results of the worldwide lubricant
additives business of Texaco since its acquisition on February 29,
1996.
b. Basic earnings per share is computed by dividing income available to
common shareholders by the weighted-average number of common shares
outstanding for the period. Diluted earnings per share reflects the
potential dilution that could occur if stock options or other
contracts resulted in the issue or exercise of additional shares of
common stock that share in the earnings. Because the Company has only
common shares, the only potential for dilution are the options issued
under the Company's stock-based compensation plan.
c. For purposes of computing earnings to fixed charges, "earnings" have
been determined by adding to income before taxes, the interest portion
of rent expense, amortization of capitalized interest, and interest
and financing expenses (net of capitalized interest). "Fixed charges"
consist of interest and financing expenses (before deducting
capitalized interest) and the interest portion of rent expense.
Interest expense does not include the interest on the contingent note
payable to Texaco.
d. Long-term debt does not include the $60 million contingent note
related to the purchase of the lubricant additives business from
Texaco.
</FN>
</TABLE>
8
<PAGE>
SELECTED UNAUDITED
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following information includes certain historical and pro forma consolidated
financial information related to the Company. Historical financial information
was excerpted or derived from the audited consolidated financial statements
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, and from the unaudited consolidated financial statements
contained in the Company's Quarterly Report on Form 10-Q for the nine months
ended September 30, 1997. The historical information should be read in
conjunction with the financial information and related notes contained therein.
On October 2, 1997, the Company purchased 34,999,995 shares of its common
stock at $9.25 per share, under the terms of a tender offer (the "Offer") with
the purchase price and related costs totaling approximately $328.9 million. The
purchase was financed under the Company's new $900,000,000 Competitive Advance,
Revolving Credit Facility and Term Loan Agreement (the "Senior Credit Facility")
which increased the committed funds available for borrowing. Subsequently, the
Company elected to reduce the committed funds under that Agreement to
$750,000,000 and, accordingly, entered into an Amended and Restated Competitive
Advance, Revolving Credit Facility and Term Loan Agreement. Consequently, the
annual facility fee ($788,000) and the one-time underwriting fee ($1,875,000)
have also been reduced from amounts ($1,050,000 and $2,250,000, respectively)
previously disclosed in the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997.
The unaudited pro forma consolidated information on the consolidated
financial position and other data of the Company as of September 30, 1997, and
the unaudited pro forma consolidated results of operations for the nine months
ended September 30, 1997 and 1996, and the year ended December 31, 1996, is
provided to present a summary of the financial position as if the purchase of
the shares occurred on September 30, 1997, and as to the results of operations
of the Company as if the purchase of shares had occurred as of January 1, 1996.
Also, in as much as the Company's 1996 results of operations only included
seven and ten months' operations of the lubricant additives business acquired
from Texaco on February 29, 1996, unaudited pro forma consolidated results of
operations for the nine months ended September 30, 1996, and the year ended
December 31, 1996, are provided to present a summary of the combined results as
if the acquisition had occurred as of January 1, 1996.
The pro forma consolidated financial information of the Company is
presented for informational purposes only, is unaudited and does not purport to
be indicative of the consolidated net income and consolidated financial position
that would have been attained had the pro forma transactions actually occurred
on the dates or for the periods indicated. This information should be read in
conjunction with the historical consolidated financial statements of Ethyl
Corporation and subsidiaries, incorporated by reference from the Company's
Annual Report on Form 10-K for the year ended December 31, 1996, and the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
1997, referred to above.
The financial information and related ratios of earnings to fixed charges
and long-term debt as a percentage of total capitalization do not reflect a
contingent note payable to Texaco, of up to $60 million (or the expensing of the
related interest cost) related to the purchase of Texaco's lubricant additives
business. The payment is due on February 26, 1999, with the actual amount to be
determined using an agreed-upon formula based on volumes of certain acquired
product lines shipped during the calendar years 1996 through 1998. When an
amount is ultimately paid, the additional purchase price allocation is expected
to increase intangible assets and long- term debt.
9
<PAGE>
<TABLE>
<CAPTION>
SELECTED UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(in thousands, except for per share amounts and ratios)
Nine Months Ended September 30, 1997
----------------------------------------------------------------------------------------------------
Pro Forma Pro Forma
Historical Adjustments
Purchased For Purchased Pro Forma
Lubricant Lubricant Adjustments
Historical Additives Additives for Share
Ethyl Business(3) Business (3) Subtotal Repurchase (1) Pro Forma
--------- -------------- ---------------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Results of Operations:
Net sales $ 789,123 $ - $ - $ 789,123 $ - $ 789,123
Cost of goods sold 564,013 - - 564,013 - 564,013
--------- -------------- ---------------- -------------- ------------- ----------------
Gross profit 225,110 - - 225,110 - 225,110
Selling, research,
development, testing,
and general expenses 115,754 - - 115,754 - 115,754
--------- -------------- ---------------- -------------- ------------- ---------------
Operating profit 109,356 - - 109,356 - 109,356
Interest and financing
expenses 15,489 - - 15,489 15,616 31,105
Other income, net (947) - - (947) - (947)
--------- -------------- ---------------- -------------- ------------- ---------------
Income before income taxes 94,814 - - 94,814 (15,616) 79,198
Income taxes 33,441 - - 33,441 (5,669) 27,772
--------- -------------- ---------------- -------------- ------------- ---------------
Net income $ 61,373 $ - $ - $ 61,373 $ (9,947) $ 51,426
========= ============== ================ ============== ============= ===============
Basic and diluted earnings
per share $ 0.52 $ 0.62
========= ===============
Shares used to compute:(a)
Basic earnings per share 118,444 (35,000) 83,444
========= ============== ===============
Diluted earnings per share 118,452 (35,000) 83,452
========= ============== ===============
Ratio of earnings to fixed
charges (b) 5.72 3.23
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1996
----------------------------------------------------------------------------------------------------
Pro Forma Pro Forma
Historical Adjustments
Purchased For Purchased Pro Forma
Lubricant Lubricant Adjustments
Historical Additives Additives for Share
Ethyl Business (3) Business (3) Subtotal Repurchase (1) Pro Forma
--------- -------------- ---------------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Results of Operations:
Net sales $ 845,674 $ 49,854 $ (679) $ 894,849 $ - $ 894,849
Cost of goods sold 592,386 43,140 124 635,650 - 635,650
--------- -------------- ---------------- -------------- ------------- ----------------
Gross profit 253,288 6,714 (803) 259,199 - 259,199
Selling, research,
development, testing,
and general expenses 128,003 4,985 (2,835) 130,153 - 130,153
--------- -------------- ---------------- -------------- ------------- ----------------
Operating profit 125,285 1,729 2,032 129,046 - 129,046
Interest and financing
expenses 18,650 582 707 19,939 15,864 35,803
Other income, net (1,258) - - (1,258) - (1,258)
--------- -------------- ---------------- -------------- ------------- ----------------
Income before income taxes 107,893 1,147 1,325 110,365 (15,864) 94,501
Income taxes 40,266 436 504 41,206 (5,759) 35,447
--------- -------------- ---------------- -------------- ------------- ----------------
Net income $ 67,627 $ 711 $ 821 $ 69,159 $ (10,105) $ 59,054
========= ============== ================ ============== ============= ================
Basic and diluted earnings
per share $ 0.57 $ 0.71
========= ================
Shares used to compute: (a)
Basic earnings per share 118,444 (35,000) 83,444
========= ============ ================
Diluted earnings per share 118,449 (35,000) 83,449
========= ============ ================
Ratio of earnings to fixed
charges (b) 5.71 3.37
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
SELECTED UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(in thousands, except for per share amounts and ratios)
Twelve Months Ended December 31, 1996
--------------------------------------------------------------------------------------
Pro Forma Pro Forma
Historical Adjustments
Purchased For Purchased Pro Forma
Lubricant Lubricant Adjustments
Historical Additives Additives for Share
Ethyl Business (3) Business (3) Subtotal Repurchase (1) Pro Forma
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Results of Operations:
Net sales $ 1,149,651 $ 49,854 $ (679) $ 1,198,826 $ - $ 1,198,826
Cost of goods sold 804,623 43,140 124 847,887 - 847,887
----------- ----------- ----------- ----------- ----------- -----------
Gross profit 345,028 6,714 (803) 350,939 - 350,939
Selling, research, development, testing,
and general expenses 175,349 4,985 (2,835) 177,499 - 177,499
----------- ----------- ----------- ----------- ----------- -----------
Operating profit 169,679 1,729 2,032 173,440 - 173,440
Interest and financing expenses 24,268 582 707 25,557 21,162 46,719
Other income, net (361) - - (361) - (361)
----------- ----------- ----------- ----------- ----------- -----------
Income before income taxes 145,772 1,147 1,325 148,244 (21,162) 127,082
Income taxes 52,800 436 504 53,740 (7,682) 46,058
----------- ----------- ----------- ----------- ----------- -----------
Net income $ 92,972 $ 711 $ 821 $ 94,504 $ (13,480) 81,024
=========== =========== =========== =========== =========== ===========
Basic and diluted earnings per share $ 0.78 $ 0.97
=========== ===========
Shares used to compute:(a)
Basic earnings per share 118,444 (35,000) 83,444
=========== =========== ===========
Diluted earnings per share 118,448 (35,000) 83,448
=========== =========== ===========
Ratio of earnings to fixed charges (b) 5.83 3.42
</TABLE>
<TABLE>
<CAPTION>
Financial Position and Other Data:
September 30, 1997
--------------------------------------
Pro Forma
Adjustments
for Share
Historical Repurchase (2) Pro Forma
---------- ------------ ----------
Condensed Consolidated Balance Sheet:
<S> <C> <C> <C>
Assets
Cash and cash equivalents $ 12,906 $ - $ 12,906
Other current assets 379,413 - 379,413
---------- ------------ ----------
Total current assets 392,319 - 392,319
Noncurrent assets 660,831 - 660,831
========== ============ ==========
Total $1,053,150 $ - $1,053,150
========== ============ ==========
Liabilities & Shareholders' Equity
Current liabilities $ 179,576 $ - $ 179,576
Long-term debt (c) (2) (3) 275,596 326,991 602,587
Other noncurrent liabilities 88,393 - 88,393
Deferred income taxes 61,173 - 61,173
Shareholders' equity (2) 448,412 (326,991) 121,421
========== ============ ==========
Total $1,053,150 $ - $1,053,150
========== ============ ==========
Other Data:
Working capital 212,743 212,743
Long-term debt as a percent of
total capitalization (d) 38.1 83.3
</TABLE>
11
<PAGE>
(a) Shares used to compute pro forma basic earnings per share were reduced by
the 34,999,995 shares purchased pursuant to the Offer.
(b) For purposes of computing earnings to fixed charges, "earnings" have been
determined by adding to income before taxes, the interest portion of rent
expense, amortization of capitalized interest, and interest and financing
expenses (net of capitalized interest). "Fixed charges" consist of interest
and financing expenses (before deducting capitalized interest) and the
interest portion of rent expense. Interest expense does not include the
interest on the contingent note payable to Texaco.
(c) Long-term debt does not include the $60 million contingent note related to
the purchase of the lubricant additives business from Texaco.
(d) The ratio of long-term debt as a percentage of total capitalization was
computed by dividing long-term debt by the sum of long-term debt and total
shareholders' equity.
12
<PAGE>
NOTES TO SELECTED UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL INFORMATION
1. Pro forma adjustments to income statement data for the Offer relate to
interest expense on pro forma borrowings of $328,922,000 assumed to be
needed at January 1, 1996, to complete the purchase of 34,999,995 shares of
common stock at $9.25 per share, combined with a transaction cost of
$5,172,000. No pro forma adjustments to interest expense on long-term debt
are included for a reduction in dividend payments of $4,375,000 per quarter
(which on a pro forma basis would occur beginning April 1, 1996) resulting
from 34,999,995 fewer shares outstanding. The lower dividend payment would
have reduced long-term debt and the associated interest expense. These
adjustments are not included since the reductions were not part of the
repurchase transaction. Pro forma incremental interest expense was
calculated assuming incremental long-term debt consisted of (i) a
$300,000,000 variable-rate term loan, initially bearing interest at 6.085%,
and (ii) additional debt required in excess of the $300,000,000
variable-rate term loan, also bearing interest at 6.085%. In addition, pro
forma interest expense also reflects the amount of an annual facility fee
of $788,000 associated with the committed amount of the revolving credit
facility and the periodic amortization of the one-time underwriting fee of
$1,875,000 as calculated based on the five-year life of the Senior Credit
Facility. The rate utilized herein was in effect for borrowings on
September 30, 1997. The average interest rates on pro forma debt for the
nine months ended September 30, 1997 and 1996, were 6.38% and 6.29%,
respectively. The average interest rate on all debt, including pro forma
debt, for the year ended December 31, 1996 was 6.30%.
Pro forma income tax adjustments related to interest expense were recorded
at an assumed combined domestic state and federal income tax rate of
approximately 36.30% since all additional debt incurred to fund the Offer
is assumed to be domestic debt.
2. Pro forma adjustments to long-term debt and shareholders' equity as of
September 30, 1997, of $326,991,000 ($300,000,000 variable term loan and
$26,991,000 additional revolver debt) are based on the Company's repurchase
of 34,999,995 shares at a $9.25 price per share plus transaction cost of
$5,172,000. The underwriting fee of $1,875,000 (which was included in the
$5,172,000 transaction cost) (i) was paid by the Company on August 27,
1997, (ii) was recorded as deferred financing cost which is being amortized
over the life of the Senior Credit Facility and (iii) did not require a pro
forma adjustment because it had been paid before the balance sheet date.
3. On February 29, 1996, the Company completed the acquisition of the
worldwide lubricant additives business of Texaco including manufacturing
and blending facilities, identifiable intangibles and working capital. The
acquisition, accounted for under the purchase method, included a cash
payment of $134.3 million and a future contingent payment of up to $60
million. The cash payment was financed primarily under the Company's
revolving credit agreement. The payment of up to $60 million will become
due on February 26, 1999, with interest payable on the contingent debt
until such date. The actual amount of the contingent payment and total
interest will be determined using an agreed-upon formula based on volumes
of certain acquired product lines shipped during the calendar years 1996
through 1998, as specified in the contingent note agreement. Texaco
retained substantially all noncurrent liabilities.
As the Company's results of operations for the nine months ended September
30, 1996, and the twelve months ended December 31, 1996, included only
seven and ten months' results of the acquired lubricant additives business,
respectively, unaudited pro forma information is provided to present a
summary of the combined results as if the acquisition had occurred January
1, 1996, giving effect to the following purchase accounting adjustments:
a) Elimination of sales and costs of goods sold on transactions between
the Company and Texaco including certain of the acquired business's
blending and packaging operations pursuant to the Company's agreement
to blend and/or package certain products for Texaco under a tolling
arrangement ($0 in 1996) and intercompany sales ($679 in 1996) had the
purchase been completed on January 1, 1996. The tolling contract calls
for the Company to process, for a fee, products that the Company
neither owns nor sells.
13
<PAGE>
b) Depreciation on fixed assets and amortization of intangible assets
based on the purchase price allocation for each period presented. The
estimated useful lives used to depreciate and amortize non-current
assets, by category, are as follows:
1) Property, plant and equipment primarily 1 to 12 years
2) Identifiable intangibles 5 to 20 years
c) Reduction of expenses ($2,835 in 1996) in selling, general and
administrative expenses, as well as research, development and testing
expenses, realized at the acquisition date, based on staffing levels
and the number of activities and research, development and testing and
other procedures actually being combined because only a small portion
of the staff employed by Texaco was hired by the Company.
d) Elimination of historical interest expense of the acquired business as
well as the addition of the incremental interest expense on additional
revolving credit debt that would have been incurred to finance the
acquisition.
e) Estimated income tax effect on the pro forma adjustments at an assumed
combined federal and state income tax rate of 38.0%.
The accompanying historical and pro forma financial information does
not reflect the contingent note payable to Texaco of up to $60 million (or
the expensing of the related interest cost) related to the purchase of
Texaco's lubricant additives business. Also, the ratios of earnings to
fixed charges and long-term debt as a percentage of total capitalization do
not include the principal or interest on the contingent note.
14
<PAGE>
CONDENSED CONSOLIDATED FINANCIAL DATA
The following table sets forth certain condensed consolidated financial
data of the Company for the years ended December 31, 1996 through 1992. The data
are in summary form and, except for the ratios of earnings to fixed charges,
have been derived from the Company's audited consolidated financial statements.
The condensed consolidated financial data have been derived from and are
qualified in their entirety by reference to the financial statements and other
information incorporated herein by reference as described above under
"Incorporation of Certain Documents by Reference." The results of the worldwide
lubricant additives business of Texaco Inc., since its acquisition on February
29, 1996, and the business spun-off as Albemarle Corporation through the spin
off date at the close of business on February 28, 1994, are included. The
financial position and other data after those dates reflect the impact of both
the acquisition of the additives business as well as the spin off of Albemarle
Corporation. The results and net assets of the Insurance segment, spun-off on
July 1, 1993, are reported as discontinued insurance operations.
(in thousands, except per share amounts and ratios)
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Condensed Consolidated Results of
Operations: (1)
<S> <C> <C> <C> <C> <C>
Net sales $ 1,149,651 $ 960,450 $ 1,174,086 $ 1,938,390 $ 1,692,582
Cost of goods sold 804,623 636,056 776,508 1,386,251 1,199,096
------- ------- ------- --------- ---------
Gross profit 345,028 324,394 397,578 552,139 493,486
Selling, research, testing, development,
and general expenses 175,349 177,215 227,116 348,384 310,164
Special charges (2) - 4,750 2,720 36,150 9,500
------- ------- ------- ------- ------
Operating profit 169,679 142,429 167,742 167,605 173,822
Interest and financing expenses 24,268 26,833 25,378 44,085 62,279
(Gain) on sale of 20% of First Colony
Corporation (3) - - - - (93,600)
Other (income) expense, net (361) (580) 1,218 (9,987) (1,475)
------- ------- ------- ------- ------
Income before income taxes,
extraordinary charge, cumulative effect
of accounting changes, and discontinued
insurance operations 145,772 116,176 141,146 133,507 206,618
Income taxes (4) 52,800 42,213 43,391 43,485 99,373
------- ------- ------- ------- ------
Income before extraordinary charge,
cumulative effect of accounting changes
and discontinued insurance operations 92,972 73,963 97,755 90,022 107,245
Extraordinary after-tax charge due to
early extinguishment of debt (5) - - - (5,000) -
Cumulative effect of accounting changes for: (6)
Postretirement health benefits (net of tax) - - - - (34,348)
Deferred income taxes - - - - 19,616
------- ------- ------- ------- ------
Income before discontinued insurance operations 92,972 73,963 97,755 85,022 92,513
Income from discontinued insurance operations - - - 90,483 162,472
------- ------- ------- ------- -------
Net income $ 92,972 $ 73,963 $ 97,755 $ 175,505 $ 254,985
======= ======= ======= ======= =======
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED FINANCIAL DATA (continued)
Years Ended December 31,
--------------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Basic and Diluted Earnings Per Share:(7)
<S> <C> <C> <C> <C> <C>
Income before extraordinary charge,
cumulative effect of accounting changes
and discontinued insurance operations $0.78 $0.62 $0.83 $0.76 $0.90
Extraordinary after-tax charge due to
early extinguishment of debt - - - (0.04) -
Cumulative effect of accounting changes - - - - (0.12)
---- ---- ---- ---- ----
Income before discontinued insurance operations 0.78 0.62 0.83 0.72 0.78
Income from discontinued insurance operations - - - 0.76 1.37
---- ---- ---- ---- ----
Net income $0.78 $0.62 $0.83 $1.48 $2.15
==== ==== ==== ==== ====
Shares used to compute:(7)
Basic earnings per share 118,444 118,436 118,427 118,382 118,329
======= ======= ======= ======= =======
Diluted earnings per share 118,448 118,447 118,484 118,437 118,383
======= ======= ======= ======= =======
Financial Position and Other Data:
(at end of period)
Working capital $246,254 $242,742 $248,650 $407,182 $327,840
======= ======= ======= ======= =======
Total assets
Excluding discontinued insurance operations $1,095,169 $983,787 $1,030,415 $2,009,198 $1,878,898
Net assets of discontinued insurance
operations - - - - 658,550
--------- ------- --------- --------- ---------
Total assets $1,095,169 $983,787 $1,030,415 $2,009,198 $2,537,448
========= ======= ========= ========= =========
Long-term debt (8) $325,480 $302,973 $349,766 $686,986 $711,736
Common and other shareholders' equity (9) $439,900 $410,128 $390,937 $752,581 $1,401,279
Ratio of earnings to fixed charges (10) 5.83 4.45 4.43 3.13 3.60
</TABLE>
16
<PAGE>
Notes To Condensed Consolidated Financial Data
1. The data includes the operating results and accounts of the acquired
worldwide lubricant additives business of Texaco since the acquisition date
of February 29, 1996. The data includes the operating results and accounts
of Albemarle Corporation, through the spin off date at the close of
business on February 28, 1994. The results and net assets of the Insurance
segment spun off in mid-1993 are reported as discontinued insurance
operations.
2. The special charge in 1995 consists of a provision for a legal settlement
(totaling $4,150 after income taxes). 1994 consists of a $10,720 provision
primarily for environmental remediation as well as other costs, largely
offset by the benefit of an $8,000 legal settlement (totaling $1,690 after
income taxes). 1993 includes the write-down of the Canadian plant and other
related costs of $14,200, costs of work-force reductions in the U.S. and
Europe amounting to $7,635, and $14,315 for downsizing costs of Whitby
Research, Inc., and relocation of employees and other related costs
(totaling $22,400 after income taxes). 1992 includes charges for the
relocation of the Petroleum Additives Division R&D personnel ($6,000 after
income taxes).
3. Results from the December 1992 sale of approximately 20% of the First
Colony Corporation stock ($30,200 after income taxes).
4. 1993 includes a nonrecurring deferred income tax charge of $2,300 and
additional taxes of $1,500 on six months earnings of the spun-off insurance
business, both resulting from Federal income tax legislation, which
increased the corporate income tax rate retroactive to January 1, 1993.
1993 also includes a $9,300 deferred tax benefit, which was realized in
1994, attributable to the excess of the tax basis over the book basis in
the stock of Whitby Research, Inc. in addition to other favorable tax
credits.
5. Results from the early redemption of Ethyl's $116.25 million 9 3/8% Sinking
Fund Debentures, net of income tax benefit of $3,000.
6. Results from a change in accounting for postretirement health care benefits
($54,460 before income tax) and deferred income taxes pursuant to Financial
Accounting Standards Board Statements No. 106 and 109, respectively,
adopted effective January 1, 1992.
7. All earnings per share figures and numbers of shares used to compute
earnings per share are stated in accordance with Financial Accounting
Standards Board Statement No. 128.
8. The reduction in long-term debt in 1994 reflects $384,924 of debt
transferred to Albemarle Corporation at the close of business on February
28, 1994. 1992 includes $250 million of debt of First Colony Corporation
spun off July 1, 1993.
9. The decline in 1994 reflects the dividend of common stock of Albemarle
Corporation of $3.38 per share at book value(valued at $399,957). The
decline in 1993 reflects the dividend of common stock of First Colony
Corporation of $5.72 per share at book value(valued at $677,449).
10. For purposes of computing earnings to fixed charges, "earnings" have been
determined by adding to income before taxes, the interest portion of rent
expense, amortization of capitalized interest, and interest and financing
expenses (net of capitalized interest). "Fixed charges" consist of interest
and financing expenses (before deducting capitalized interest) and the
interest portion of rent expense. Interest expense does not include the
interest on the contingent note payable to Texaco. Due to the immaterial
amount of preferred stock dividends in the periods presented, the ratio of
earnings to combined fixed charges and preferred stock dividends is not
presented as this ratio is the same with or without their inclusion.
17
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture, dated as of June
15, 1985 (as amended by the First Supplemental Indenture, dated as of June 15,
1986, and the Second Supplemental Indenture, dated as of December 15, 1994, the
"Indenture"), between the Company and First Trust of New York, N.A., Trustee
(the "Trustee"), a copy of which is filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all provisions of the Indenture, including the definitions
therein of certain terms. Wherever particular provisions or defined terms of the
Indenture are referred to, such provisions or defined terms are incorporated
herein by reference.
General
The Debt Securities to be offered by this Prospectus are limited to
$300,000,000 in aggregate principal amount (unless any of the Securities are
Original Issue Discount Securities, in which case the aggregate amount is
limited to $300,000,000 in net proceeds to the Company). However, the Indenture
does not limit the amount of Debt Securities which may be issued thereunder and
provides that Debt Securities may be issued from time to time in one or more
series. The Debt Securities will be unsecured obligations of the Company and
will rank on an equal and ratable basis with all other unsecured and
unsubordinated indebtedness of the Company.
The Prospectus Supplement relating to Debt Securities will describe the
following terms of the Debt Securities: (i) the title of the Debt Securities;
(ii) any limit on the aggregate principal amount of the Debt Securities; (iii)
the date or dates on which the Debt Securities will mature; (iv) the rate or
rates at which the Debt Securities will bear interest, if any, and the date from
which such interest will accrue; (v) the dates on which such interest, if any,
will be payable and the Regular Record Dates for such Interest Payment Dates;
(vi) any mandatory or optional sinking fund or analogous provisions; (vii) any
terms for mandatory redemption or for redemption at the option of the Company or
the Holder; (viii) any terms for conversion into or exchange for Preferred
Stock; and (ix) any other terms of the Debt Securities. Unless otherwise
indicated in the Prospectus Supplement, principal of and any premium and
interest on the Debt Securities will be payable, and transfers of the Debt
Securities will be registrable, at the office of the Trustee at 100 Wall Street,
Suite 1600, New York, New York 10005, provided that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as it appears in the Security Register. (ss.ss. 301, 305 and
1002)
Unless otherwise indicated in the Prospectus Supplement, the Debt
Securities will be issued only in fully registered form without coupons in
denominations of $1,000 or any integral multiple thereof. (ss. 302) No service
charge will be made for any registration of transfer or exchange of Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. (ss. 305)
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be sold at a substantial discount below their principal
amount. Special Federal income tax and other considerations applicable thereto
will be described in the Prospectus Supplement relating thereto.
Restrictive Covenants
Limitations on Liens. Section 1005 of the Indenture provides that so long
as any Debt Securities of any series entitled by their terms to the benefits of
that Section are outstanding, the Company may not, nor may it permit any
Restricted Subsidiary to, incur, issue, assume or guarantee indebtedness for
money borrowed which is secured by any mortgage, security interest, pledge or
lien ("Mortgage") of or upon any Principal Domestic Property owned by the
Company or a Restricted Subsidiary or any shares of stock or indebtedness for
borrowed money of any Restricted Subsidiary without effectively providing that
the Debt Securities shall be secured by such Mortgage equally and ratably with
(or prior to) such indebtedness, unless after giving effect thereto the
aggregate amount of all such indebtedness so secured after the date of the
Indenture together with all Attributable Debt in respect of Sale and Lease-Back
Transactions after the date of the Indenture involving Principal Domestic
Properties owned by the Company or a Restricted Subsidiary would not exceed 10%
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of Consolidated Net Tangible Assets. This restriction will not apply to: (i)
Mortgages on any property, shares of stock or indebtedness existing at the time
of, or within 120 days after, acquisition thereof (including acquisition through
merger or consolidation), purchase money Mortgages and construction cost
Mortgages; (ii) Mortgages in connection with the issuance of tax-exempt
industrial development bonds; (iii) Mortgages on property of, or on any shares
of stock or indebtedness of, a corporation existing at the time such corporation
becomes a Subsidiary; (iv) Mortgages in favor of the Company or a Restricted
Subsidiary; (v) Mortgages for taxes, assessments or other governmental charges
or levies, in each case (x) not then due or delinquent or (y) the validity of
which is being contested in good faith by appropriate proceedings; and
materialmen's, mechanics' and other like Mortgages, or deposits to obtain the
release of such Mortgages; (vi) Mortgages to secure public or statutory
obligations or to secure payment of workers' compensation claims or to secure
performance in connection with tenders, leases of real property, bids or
contracts or to secure (or in lieu of) surety or appeal bonds and Mortgages made
in the ordinary course of business for similar purposes; or (vii) any extension,
renewal or replacement of any Mortgage referred to in clauses (i) through (vi).
(ss. 1005)
Limitations on Sale and Lease-Back Transactions. Section 1006 of the
Indenture provides that so long as the Debt Securities of any series entitled by
their terms to the benefits of that Section are outstanding, neither the Company
nor any Restricted Subsidiary may enter into any Sale and Lease-Back Transaction
with respect to a Principal Domestic Property (except for transactions involving
leases for a term, including renewals, of not more than three years and except
for transactions between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries), the acquisition of which, or completion of
construction and commencement of full operation of which, has occurred more than
120 days prior to such Sale and Lease-Back Transaction, unless (i) the Company
or such Restricted Subsidiary could create indebtedness secured by a Mortgage on
such property pursuant to Section 1005 of the Indenture (see "Limitations on
Liens" above) in an amount equal to the Attributable Debt with respect to the
Sale and Lease-Back Transaction without equally and ratably securing the
Securities, or (ii) within 180 days of the sale, the Company applies an amount
equal to, in the case of a sale or transfer for cash, the greater of the net
proceeds from the sale or the fair value of the property so sold (as determined
by its Board of Directors) and, in the case of a sale or transfer otherwise than
for cash, an amount equal to such fair value to the retirement of the Debt
Securities or other Consolidated Senior Funded Debt of the Company or a
Restricted Subsidiary, subject to reduction as set forth in the Indenture in
respect of Debt Securities and other Consolidated Senior Funded Debt retired
during such 180-day period otherwise than for mandatory sinking funds and
payments at maturity. (ss. 1006)
Consolidation, Merger or Sale of Assets of the Company. The Indenture
provides that the Company may consolidate with, sell or convey all or
substantially all of its assets to, or merge with or into any other corporation,
provided that either the Company shall be the continuing corporation or the
successor corporation shall be a corporation organized and existing under the
laws of the United States or a state thereof, and such successor corporation
shall expressly assume, by supplemental indenture satisfactory to the Trustee,
the due and punctual payment of the principal of and any premium and interest on
all the Debt Securities, according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of the Indenture
to be performed by the Company. The Company or successor corporation, as the
case may be, shall not, immediately after such merger or consolidation, or such
sale or conveyance, be in default in the performance of any such covenant or
condition. The Indenture provides that if after giving effect to any such
consolidation or merger of the Company with or into any other corporation or to
any such sale or conveyance of its property as an entirety, or substantially as
an entirety, any Principal Domestic Property of the Company or a Restricted
Subsidiary or any shares of stock or indebtedness for borrowed money of any
Restricted Subsidiary owned immediately prior thereto would become subject to a
Mortgage and such Mortgage could not be created pursuant to Section 1005 of the
Indenture (see "Limitations on Liens" above) without equally and ratably
securing the Debt Securities, the Debt Securities shall be equally and ratably
secured with (or prior to) the indebtedness secured by such Mortgage. (Article
Eight)
There is no established meaning under New York law, which governs the
Indenture, of the phrase "all or substantially all" as used in Article Eight of
the Indenture. As a result of the lack of precise definition, it is impossible
to predict if a particular transaction would constitute the sale or conveyance
of all or substantially all of the Company's assets.
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Definitions. "Principal Domestic Property" means all real and tangible
personal property owned by the Company or a Restricted Subsidiary constituting a
part of any manufacturing or processing plant or warehouse located within the
United States, exclusive of (i) motor vehicles, mobile materials-handling
equipment and other rolling stock, (ii) office furnishings and equipment, and
information and electronic data processing equipment, (iii) any property
financed through the issuance of tax-exempt industrial development bonds, (iv)
any real property held for development or sale or (v) any property which in the
opinion of the Board of Directors of the Company is not of material importance
to the total business conducted by the Company and its Restricted Subsidiaries
as an entirety. "Restricted Subsidiary" means any Subsidiary (as defined) of the
Company which the Company shall, by written notice to the Trustee, have
designated as a Restricted Subsidiary; the Indenture provides that the Company
shall not permit any Subsidiary to be designated as a Restricted Subsidiary
unless, immediately thereafter, the Company and its Restricted Subsidiaries
could incur, issue, assume or guarantee additional indebtedness for money
borrowed secured by a Mortgage and no Event of Default, and no event which after
notice or lapse of time or both would become an Event of Default, shall exist.
"Unrestricted Subsidiary" means any Subsidiary not designated as a Restricted
Subsidiary and any Restricted Subsidiary subsequently designated as an
Unrestricted Subsidiary; the Indenture provides that the Company shall not
permit any Restricted Subsidiary to be designated as an Unrestricted Subsidiary
unless, immediately thereafter, the Company and its Restricted Subsidiaries
could incur, issue, assume or guarantee additional indebtedness for money
borrowed secured by a Mortgage, and no Event of Default, and no event which
after notice or lapse of time or both would become an Event of Default, shall
exist. "Consolidated Net Tangible Assets" means (i) the assets of the Company
and all Restricted Subsidiaries (less applicable reserves and other properly
deductible items), minus (ii) current liabilities, goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and similar
intangibles, investments in and advances to Unrestricted Subsidiaries and any
minority interest in the equity of Restricted Subsidiaries, all as determined in
accordance with generally accepted accounting principles. "Attributable Debt"
means the total net amount of rent (discounted from the respective due dates
thereof to the determination date at the rate per annum equal to the interest
rate borne by the Debt Securities of the series in respect of which such
determination is being made) required to be paid during the remaining term of
any lease subject to the limitations on Sale and Lease-Back Transactions.
(ss.ss. 101 and 1007)
Events of Default
The following are Events of Default under the Indenture with respect to
Debt Securities of any series: (i) failure to pay principal of or premium, if
any, on any Debt Security of that series when due; (ii) failure to pay any
interest on any Debt Security of that series when due, continued for 30 days;
(iii) failure to deposit any sinking fund payment, when due, in respect of any
Debt Security of that series; (iv) failure to perform any other covenant of the
Company in the Indenture (other than a covenant included in the Indenture solely
for the benefit of a series of Debt Securities other than that series),
continued for 60 days after written notice as provided in the Indenture; (v)
default in payment of any portion of principal of any indebtedness for money
borrowed by the Company or acceleration of any such indebtedness under the terms
of the instrument under which such indebtedness is issued or secured if such
default is not cured or such acceleration is not annulled within 10 days after
written notice as provided in the Indenture; (vi) certain events in bankruptcy,
insolvency or reorganization; and (vii) any other Event of Default with respect
to Debt Securities of that series. (ss. 501) If an Event of Default with respect
to Debt Securities of any series at the time Outstanding occurs and is
continuing, either the Trustee or the Holders of at least 25% in principal
amount of the Outstanding Debt Securities of that series may declare the
principal amount (or, if the Securities of that series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of that series) of all the Debt Securities of that series to be due
and payable immediately. At any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before a judgment or
decree based on acceleration has been obtained, the Holders of a majority in
principal amount of the Outstanding Debt Securities of that series may, under
certain circumstances, rescind and annul such acceleration. (ss. 502)
The Indenture provides that the Trustee, within 90 days after the
occurrence of a default with respect to any series of the Debt Securities, shall
give to the Holders of the Debt Securities of that series notice of all uncured
defaults known to it; provided that, except in the case of default in the
payment of the principal of or any premium or interest on any Debt Securities of
such series, or in the payment of any sinking fund installment with respect to
Debt Securities of such series, the Trustee shall be protected in withholding
such notice if it in good faith determines that the withholding of such notice
is in the interest of the Holders of Debt Securities of such series. (ss. 602)
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The Indenture provides that the Trustee will be under no obligation,
subject to the duty of the Trustee during default to act with the required
standard of care, to exercise any of its rights or powers under the Indenture at
the request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. (ss. 603) Subject to such
provisions for indemnification of the Trustee, the Holders of a majority in
principal amount of the Outstanding Debt Securities of any series will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the Debt Securities of that series. (ss. 512)
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (ss. 1008)
Defeasance
Defeasance and Discharge. The Indenture provides that, if so specified with
respect to the Debt Securities of any series, the Company will be discharged
from any and all obligations in respect of the Debt Securities of such series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, to replace stolen, lost or mutilated Debt Securities
of such series, to maintain paying agencies and to hold monies for payment in
trust) upon the deposit with the Trustee, in trust, of money and/or U.S.
Government Obligations (as defined) which through the payment of interest and
principal in respect thereof in accordance with their terms will provide money
in an amount sufficient to pay the principal of (and premium, if any), each
installment of interest on and any sinking fund payments on, the Debt Securities
of such series on the Stated Maturity (as defined) of such payments in
accordance with the terms of the Indenture and the Debt Securities of such
series. Such a trust may only be established if, among other things, the Company
has delivered to the Trustee an Opinion of Counsel (who may be an employee of or
counsel for the Company) to the effect that the Debt Securities of such series,
if then listed on the New York Stock Exchange, will not be delisted as a result
of such deposit, defeasance and discharge. (ss. 402) In the event of any such
defeasance and discharge of Debt Securities of such series, Holders of Debt
Securities of such series would be able to look only to such trust fund for
payment of principal (and premium, if any), and interest, if any, on their Debt
Securities until maturity. Such defeasance and discharge may be treated as a
taxable exchange of the Debt Securities of such series for an issue of
obligations of the trust or a direct interest in the cash and securities held in
the trust. In that case Holders of the Debt Securities of such series would
recognize gain or loss as if the trust obligations or the cash or securities
deposited, as the case may be, had actually been received by them in exchange
for their Debt Securities. Such Holders thereafter might be required to include
in income a different amount than would be includable in the absence of
defeasance and discharge. Prospective investors are urged to consult their own
tax advisors as to the specific consequences of defeasance and discharge.
Defeasance of Certain Obligations. The Indenture provides that, if so
specified with respect to the Debt Securities of any series, the Company may
omit to comply with the restrictive covenants described under "Restrictive
Covenants--Limitations on Liens and Limitations on Sale and Leaseback
Transactions" if such restrictive covenants are applicable to the Debt
Securities of such series, and any such omission shall not be an Event of
Default with respect to the Debt Securities of such series, upon the deposit
with the Trustee, in trust, of money and/or U.S. Government Obligations (as
defined) which through the payment of interest and principal in respect thereof
in accordance with their terms will provide money in an amount sufficient to pay
the principal of (and premium, if any), each installment of interest on, and any
sinking fund payments on the Debt Securities of such series on the Stated
Maturity (as defined) of such payments in accordance with the terms of the
Indenture and the Debt Securities of such series. The obligations of the Company
under the Indenture and the Debt Securities of such series other than with
respect to the covenants referred to above and the Events of Default other than
the Event of Default referred to above shall remain in full force and effect.
Such a trust may only be established if, among other things, the Company has
delivered to the Trustee an Opinion of Counsel (who may be an employee of or
counsel for the Company) to the effect that (i) the Holders of the Debt
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and defeasance of certain
obligations and will be subject to federal income tax on the same amounts and in
the same manner and at the same times, as would have been the case if such
deposit and defeasance had not occurred, and (ii) the Debt Securities of such
series, if then listed on the New York Stock Exchange, will not be delisted as a
result of such deposit and defeasance. (ss. 1010)
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Defeasance and Certain Other Events of Default. In the event the Company
exercises its option to omit compliance with certain covenants of the Indenture
with respect to the Debt Securities of any series as described above and the
Debt Securities of such series are declared due and payable because of the
occurrence of any Event of Default other than the Event of Default described in
clause (d) under "Events of Default" with respect to the restrictive covenants
described under "Restrictive Covenants-Limitations on Liens and Limitations on
Sale and Leasebacks," the amount of money and U.S. Government Obligations (as
defined) on deposit with the Trustee will be sufficient to pay amounts due on
the Debt Securities of such series at the time of their Stated Maturity (as
defined) but may not be sufficient to pay amounts due on the Debt Securities of
such series at the time of the acceleration resulting from such Event of
Default. The Company shall in any event remain liable for such payments as
provided in the Indenture.
Modification and Waiver
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of at least 662/3% in principal
amount of the Outstanding Securities of each series affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Security
affected thereby, (a) change the stated maturity date of the principal of, or
any installment of principal of or any interest on, any Debt Security, (b)
reduce the principal amount of, or any premium or interest on, any Debt
Security, (c) reduce the amount of principal of an Original Issue Discount
Security payable upon acceleration of the Maturity thereof, (d) change the place
or currency of payment of principal of, or any premium or interest on, any Debt
Security, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security, or (f) reduce the percentage in
principal amount of Outstanding Securities of any series, the consent of whose
Holders is required for modification or amendment of the Indenture or for waiver
of compliance with certain provisions of the Indenture or for waiver of certain
defaults. (ss. 902)
The Holders of at least 662/3% in principal amount of the Outstanding
Securities of any series may on behalf of the Holders of all Debt Securities of
that series waive, insofar as that series is concerned, compliance by the
Company with certain restrictive provisions of the Indenture. (ss. 1009) The
Holders of a majority in principal amount of the Outstanding Securities of any
series may on behalf of the Holders of all Debt Securities of that series waive
any past default under the Indenture with respect to that series, except a
default in the payment of the principal of, or any premium or interest on, any
Debt Security of that series or in respect of a provision which under the
Indenture cannot be modified or amended without the consent of the Holder of
each Outstanding Security of that series affected. (ss. 513)
Global Securities
The Debt Securities of a series issued under the Indenture may be issued in
whole or in part in the form of one or more global securities (the "Global
Securities") that will be deposited with, or on behalf of, a depositary (the
"Depositary") identified in the Prospectus Supplement relating to such series.
Global Securities may be issued only in fully registered form and in either
temporary or permanent form. Unless and until it is exchanged in whole or in
part for the individual Debt Securities represented thereby, a Global Security
may not be transferred except as a whole by the Depositary for such Global
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or other nominee of such Depositary or by the Depositary or any
nominee to a successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. Ethyl anticipates that the following provisions will generally
apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Debt Securities or by Ethyl
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if such Debt Securities are offered and sold directly by Ethyl. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the applicable Depositary ("participants") or persons that may
hold interests through participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants). The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have any of
the individual Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of any such Debt Securities of such series in definitive form and will
not be considered the owners or holders thereof under the Indenture governing
such Debt Securities.
Payments of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a Global Security registered in the
name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Debt Securities. Neither Ethyl, the Trustee for such Debt
Securities, any paying agent (a "Paying Agent"), nor the Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made by the Depositary or any participants on
account of beneficial ownership interests of the Global Security for such Debt
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Ethyl expects that the Depositary for a series of Debt Securities or its
nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Debt Securities as shown on the records of such
Depositary or its nominee. Ethyl also expects that payments by participants to
owners of beneficial interests in such Global Security held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." Such payments will be the responsibility of
such participants.
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by Ethyl within 90 days, Ethyl will issue individual Debt Securities
of such series in exchange for the Global Security or Securities representing
such series of Debt Securities. In addition, Ethyl may at any time and in its
sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities, determine not to have any Debt
Securities of a series represented by one or more Global Securities and, in such
event, will issue individual Debt Securities of such series in exchange for the
Global Security or Securities representing such series of Debt Securities.
Further, if Ethyl so specifies with respect to the Debt Securities of a series,
an owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to Ethyl, the Trustee, and
the Depositary for such Global Security, receive individual Debt Securities of
such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Debt
Securities. In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery of individual Debt Securities of
the series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name.
Individual Debt Securities of such series so issued will be issued in
denominations, unless otherwise specified by Ethyl, of $1,000 and integral
multiples thereof.
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DESCRIPTION OF CAPITAL STOCK
General
The authorized stock of the Company consists of 400,000,000 shares of
common stock, par value $1 per share (the "Common Stock") and 10,000,000 shares
of Cumulative Preferred Stock, par value $10 per share, issuable in series. On
March 1, 1998, there were 83,465,460 shares of Common Stock outstanding. No
shares of Preferred Stock are currently outstanding.
The following statements with respect to the capital stock of the Company
are subject to the detailed provisions of the Company's Restated Articles of
Incorporation, as amended (the "Restated Articles"), and by-laws (the "By-Laws")
as currently in effect. These statements do not purport to be complete, or to
give full effect to the terms of the provisions of statutory or common law, and
are subject to, and are qualified in their entirety by reference to, the terms
of the Restated Articles and By-Laws, which are filed as Exhibits to the
Registration Statement of which this Prospectus is a part.
Preferred Stock
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which a
Prospectus Supplement may relate. Specific terms of any series of the Preferred
Stock offered by a Prospectus Supplement will be described in the Prospectus
Supplement relating to such series of the Preferred Stock. The description set
forth below is subject to and qualified in its entirety by reference to the
Articles of Amendment to the Restated Articles establishing a particular series
of the Preferred Stock which will be filed with the Virginia State Corporation
Commission in connection with the offering of such series of Preferred Stock.
General. Under the Restated Articles, the Board of Directors of the Company
is authorized, without further shareholder action, to provide for the issuance
of up to 10,000,000 shares of Preferred Stock, in one or more series, with such
voting powers and with such designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions, as shall be set forth in resolutions providing for the issue
thereof adopted by the Board of Directors. The Company may amend from time to
time its Restated Articles to increase the number of authorized shares of
Preferred Stock. Any such amendment would require the approval of the holders of
a majority of the outstanding shares of Common Stock, and to the extent required
by an amendment to the Restated Articles establishing a particular series of the
Preferred Stock, the approval of the holders of the outstanding shares of that
series of Preferred Stock. As of the date of this Prospectus, the Company has no
Preferred Stock outstanding.
The Preferred Stock will have the dividend, liquidation, redemption,
conversion and voting rights set forth below unless otherwise provided in the
Prospectus Supplement relating to a particular series of the Preferred Stock.
Reference is made to the Prospectus Supplement relating to the particular series
of the Preferred Stock offered thereby for specific terms, including: (i) the
title and liquidation preference per share of such Preferred Stock and the
number of shares offered; (ii) the price at which such Preferred Stock will be
issued; (iii) the dividend rate (or method of calculation), the dates on which
dividends shall be payable and the dates from which dividends shall commence to
accumulate; (iv) any redemption or sinking fund provisions of such Preferred
Stock; (v) any conversion provisions of such Preferred Stock; and (vi) any
additional dividend, liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions of such Preferred Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the Prospectus Supplement relating to a particular
series of the Preferred Stock, each series of the Preferred Stock will rank on a
parity as to dividends and distributions in the event of a liquidation with the
outstanding shares of Preferred Stock of the Company.
Dividend Rights. Holders of the Preferred Stock of each series will be
entitled to receive, when, as and if declared by the Board of Directors, out of
assets of the Company legally available therefor, cash dividends at such
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rates and on such dates as are set forth in the Prospectus Supplement relating
to such series of the Preferred Stock. Such rate may be fixed or variable or
both. Each such dividend will be payable to the holders of record as they appear
on the stock books of the Company on such record dates as will be fixed by the
Board of Directors or a duly authorized committee thereof. Dividends on all
series of the Preferred Stock will be cumulative.
If the Prospectus Supplement so provides, no dividends will be declared or
paid or set apart for payment on the Preferred Stock of any series ranking, as
to dividends, on a parity with or junior to any other series of Preferred Stock
for any period unless full dividends have been or contemporaneously are declared
and paid, or declared and a sum sufficient for the payment thereof set apart for
such payment, on such other series of Preferred Stock for the then-current
dividend payment period and, if such other Preferred Stock is cumulative, all
other dividend payment periods terminating on or before the date of payment of
such full dividends. When dividends on all shares of Preferred Stock for any
dividend period are not paid in full, all such shares will participate ratably
in any partial payment for such period in proportion to the full amounts for
such period. Except as provided in the preceding sentence, unless full
dividends, including accumulations in respect of prior dividend payment periods,
on all outstanding shares of any series of the Preferred Stock have been paid,
no dividends (other than, if the Prospectus Supplement so provides, in shares of
Common Stock or another stock ranking junior to such series of the Preferred
Stock) will be declared or paid or set aside for payment or other distributions
made upon the Common Stock or any other stock of the Company ranking junior to
such series of Preferred Stock.
Each series of Preferred Stock will be entitled to dividends as described
in the Prospectus Supplement relating to such series, which may be based upon
one or more methods of determination. Different series of the Preferred Stock
may be entitled to dividends at different dividend rates or based upon different
methods of determination. Except as provided herein and in the Prospectus
Supplement, the Preferred Stock will not be entitled to participate in the
earnings and assets of the Company.
Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of each
series of Preferred Stock will be entitled to receive, out of the assets of the
Company available for distribution to shareholders, liquidating distributions in
the amount set forth in the Prospectus Supplement relating to such series of the
Preferred Stock. The holders of any series of the Preferred Stock will not be
entitled to receive any assets of the Company upon any liquidation, dissolution
or winding up of the Company unless and until the liquidation preference is paid
to the holders of any Preferred Stock ranking senior to the series of Preferred
Stock. If the Prospectus Supplement so provides, if, upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company, the amounts
payable with respect to the Preferred Stock of any series and any other shares
of stock of the Company ranking as to any such distribution on a parity with
such series of the Preferred Stock are not paid in full, the holders of the
Preferred Stock of such series and of such other shares will share ratably in
any such distribution of assets of the Company in proportion to the full
respective preferential amounts to which they are entitled. Upon any
liquidation, dissolution or winding up, after the holders of the Preferred Stock
have been paid the specified liquidation preference, such holders will have no
right or claim to any of the remaining assets of the Company.
Redemption. A series of the Preferred Stock may be redeemable, in whole or
in part, at the option of the Company, and may be subject to mandatory
redemption pursuant to a sinking fund, in each case upon terms, at the times,
the redemption prices and for the types of consideration set forth in the
Prospectus Supplement relating to such series.
The Prospectus Supplement relating to a series of Preferred Stock which is
subject to mandatory redemption shall specify the number of shares of such
series of Preferred Stock that shall be redeemed by the Company in each year
commencing after a date to be specified, at a redemption price per share to be
specified, together with an amount equal to any accrued and unpaid dividends
thereon to the date of redemption.
Except as indicated in the Prospectus Supplement relating to any series of
the Preferred Stock, the Preferred Stock is not subject to any mandatory
redemption at the option of the holder.
25
<PAGE>
Conversion Rights. The Prospectus Supplement for any series of the
Preferred Stock will state the terms, if any, on which shares of that series are
convertible into shares of Common Stock or another series of Preferred Stock of
the Company. The Preferred Stock will have no preemptive rights.
Voting Rights. Except as indicated below or in the Prospectus Supplement
relating to a particular series of Preferred Stock, or except as expressly
required by applicable law, a holder of the Preferred Stock will not be entitled
to vote. Except as indicated in the Prospectus Supplement relating to a
particular series of Preferred Stock, in the event the Company issues full
shares of any series of Preferred Stock, each such share will be entitled to one
vote on matters on which holders of such series of the Preferred Stock are
entitled to vote.
Unless otherwise provided in the Prospectus Supplement, the affirmative
vote of the holders of a majority of the outstanding shares of all series of
Preferred Stock, voting as a separate voting group, will be required for any
amendment of the Restated Articles (or any certificate amendatory thereof or
supplemental thereto relating to any series of the Preferred Stock) which
changes any rights or preferences of such series of Preferred Stock.
Transfer Agent and Registrar. The transfer agent, registrar and dividend
disbursement agent for a series of the Preferred Stock will be selected by the
Company and be described in the applicable Prospectus Supplement. The registrar
for shares of Preferred Stock will send notices to shareholders of any meetings
at which holders of the Preferred Stock have the right to vote on any matter.
Common Stock
Subject to the rights of holders, if any, of Preferred Stock, holders of
Common Stock are entitled to dividends as declared by the Board of Directors
from time to time after payment of, or provision for, full cumulative dividends
on and any required redemptions of shares of Preferred Stock then outstanding.
Holders of Common Stock are entitled to one vote per share and may not cumulate
votes for the election of directors. Holders of Common Stock have preemptive or
subscription rights except they have no right to purchase or subscribe to shares
of the Preferred Stock and any shares that may be issued upon conversion of the
Preferred Stock. Holders of Common Stock have no liability for further calls or
assessments. In the event of the liquidation, dissolution or winding up of the
Company, holders of Common Stock are entitled to receive pro rata all the
remaining assets of the Company available for distribution, after satisfaction
of the prior preferential rights of the Preferred Stock and the satisfaction of
all debts and liabilities of the Company.
The Transfer Agent and Registrar for the Common Stock is Harris Trust and
Savings Bank.
Certain Provisions of the Restated Articles and By-Laws
Special meetings of shareholders may be called only by a majority of the
Board of Directors or by designated officers. Directors may be removed with or
without cause, and vacancies on the Board of Directors, including any vacancy
created by an increase in the number of Directors, may be filled by the Board of
Directors unless the vacancy is to be filled at a meeting of shareholders. The
By-Laws require that advance notice of nominees for election as Directors to be
made by any shareholder be given to the Secretary of the Company, together with
certain specified information, no later than 60 days before an annual meeting of
shareholders or seven days following notice of a special meeting of shareholders
for the election of Directors. The provisions of the Restated Articles and
By-Laws described above may, in certain circumstances, make more difficult or
discourage a takeover of the Company.
26
<PAGE>
DESCRIPTION OF DEPOSITARY SHARES
Each Depositary Share will represent a fraction of a share of Preferred
Stock deposited under a Deposit Agreement (the "Deposit Agreement"), to be
entered into by the Company, a depositary and the holders from time to time of
Depositary Receipts (as defined) issued thereunder. Subject to the terms of the
Deposit Agreement, each owner of a Depositary Share will be entitled,
proportionately, to all the rights and preferences of the Preferred Stock
represented thereby contained in the Company's articles of incorporation.
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). The above description
of the Depositary Shares is not complete and is subject to, and qualified in its
entirety by, the description in the applicable Prospectus Supplement and the
provisions of the Deposit Agreement (which will contain the form of the
Depositary Receipt).
PLAN OF DISTRIBUTION
The Company may sell Offered Securities to one or more underwriters for
public offering and sale by them or may sell Offered Securities to investors
directly or through agents. Any such underwriter or agent involved in the offer
and sale of the Offered Securities will be named in the Prospectus Supplement.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Company also may, from time to time, authorize
underwriters acting as agents to offer and sell the Offered Securities upon the
terms and conditions set forth in any Prospectus Supplement. In connection with
the sale of Offered Securities, underwriters may be deemed to have received
compensation from the Company in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Offered
Securities for whom they may act as agent. Underwriters may sell Offered
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions (which may be changed from
time to time) from the underwriters and/or from the purchasers for whom they may
act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Offered Securities and any discounts,
concessions or commissions allowed by underwriters to participating dealers will
be set forth in the Prospectus Supplement. Underwriters, dealers and agents
participating in the distribution of the Offered Securities may be deemed to be
underwriters, and any discounts and commissions received by them and any profit
realized by them on resale of the Offered Securities may be deemed to be
underwriting discounts and commissions under the Securities Act. Underwriters,
dealers and agents may be entitled, under agreements entered into with the
Company, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
dealers acting as the Company's agents to solicit offers by certain institutions
to purchase Offered Securities from the Company at the public offering price set
forth in the Prospectus Supplement pursuant to Delayed Delivery Contracts
("Contracts") providing for payment and delivery on the date or dates stated in
the Prospectus Supplement. Each Contract will be for an amount not less than,
and the principal amount of Offered Securities sold pursuant to Contracts shall
not be less nor more than, the respective amounts stated in the Prospectus
Supplement. Institutions with which Contracts, when authorized, may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and other
institutions, but will in all cases be subject to the approval of the Company.
Contracts will not be subject to any conditions except (i) the purchase by an
institution of the Offered Securities covered by its Contract shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject and (ii) the Company shall have sold
to such underwriters the total principal amount of the Offered Securities less
the principal amount thereof covered by Contracts. A commission indicated in the
Prospectus Supplement will be granted to agents and underwriters soliciting
purchases of Offered Securities pursuant to Contracts accepted by the Company.
Agents and underwriters shall have no responsibility in respect of the delivery
or performance of Contracts.
27
<PAGE>
To facilitate an offering of Offered Securities, certain persons
participating in the offering may engage in transactions that stabilize,
maintain or otherwise affect the price of the Offered Securities. This may
include over-allotments or short sales of the Offered Securities, which involves
the sale by persons participating in the offering of more Offered Securities
than have been sold to them by the Company. In such circumstances, such persons
would cover such over-allotments or short positions by purchasing in the open
market or by exercising their over-allotment options. In addition, such persons
may stabilize or maintain the price of the Offered Securities by bidding for or
purchasing Offered Securities in the open market or by imposing penalty bids,
whereby selling concessions allowed to dealers participating in any such
offering may be reclaimed if Offered Securities sold by them are repurchased in
connection with stabilization transactions. The effect of these transactions may
be to stabilize or maintain the market price of the Offered Securities at a
level above that which might otherwise prevail in the open market. Such
transactions, if commenced, may be discontinued at any time.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with, and perform services for, the Company in the
ordinary course of business.
VALIDITY OF SECURITIES
The validity of the Securities will be passed upon for the Company by
Hunton & Williams, Richmond, Virginia, and for the Underwriters by counsel to be
selected by the Underwriters.
At March 1, 1998, partners and associates of Hunton & Williams who
participated in the preparation of this Prospectus owned, in the aggregate,
6,912 shares of the Common Stock of the Company.
EXPERTS
The consolidated balance sheets as of December 31, 1996 and 1995, and the
consolidated statements of income, stockholders' equity and cash flows for each
of the three years in the period ended December 31, 1996, included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996,
incorporated by reference in this prospectus, have been incorporated herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and auditing.
28
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. Exhibits
1 Form of Underwriting Agreement.*
4.1 Indenture, dated as of June 15, 1985, between Ethyl Corporation and
First Trust of New York, N.A. (formerly, Morgan Guaranty Trust Company
of New York), as Trustee (filed as Exhibit 4.1 to the registrant's
Registration Statement on Form S-3 (No. 33-19184), and incorporated
herein by reference).
4.2 First Supplemental Indenture, dated as of June 15, 1986, between Ethyl
Corporation and First Trust of New York, N.A. (formerly, Morgan
Guaranty Trust Company of New York), as Trustee (filed as Exhibit 4.2
to the registrant's Registration Statement on Form S-3 (No. 33-19184),
and incorporated herein by reference).
4.3 Second Supplemental Indenture, dated as of December 15, 1994, between
Ethyl Corporation and First Trust of New York, N.A., as Trustee.**
5 Opinion of Hunton & Williams.
12.1 Ethyl Corporation and Subsidiaries--Computation of Ratio of Earnings to
Fixed Charges for Each of the Five Years in the Period Ended December
31, 1996 and the Nine Month Periods Ended September 30, 1997 and 1996.
12.2 Ethyl Corporation and Subsidiaries--Computation of Ratio of Earnings to
Fixed Charges for Each of the Nine Month Periods Ended September 30,
1997 and 1996, and the Year Ended December 31, 1996, on a pro forma
basis.
23.1 Consent of Coopers & Lybrand L.L.P. (Ethyl Corporation 1996 Form 10-K)
23.2 Consent of Hunton & Williams.
24 Powers of attorney.**
25 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of First Trust of New York, N.A., as Trustee, including Exhibit 7
(Statement of Financial Condition )
- -------------------------
* To be filed by amendment.
**Previously filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Ethyl Corporation
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 5 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Richmond, State of Virginia on the
19th day of March, 1998.
Ethyl Corporation,
(Registrant)
By /s/ J. Robert Mooney
J. Robert Mooney,
(Senior Vice President and
Chief Financial Officer)
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 5 to the Registration Statement has been signed below by the following
persons in the capacities indicated and on the 19th day of March, 1998.
Signature Title
/s/ Bruce C. Gottwald
(Bruce C. Gottwald) Chairman of the Board and
Executive Committee and Director
(Principal Executive Officer)
/s/ J. Robert Mooney
(J. Robert Mooney) Senior Vice President and Chief
Financial Officer
(Principal Financial Officer)
/s/ Wayne C. Drinkwater
(Wayne C. Drinkwater) Controller
(Principal Accounting Officer)
/s/ William W. Berry
(William W. Berry) Director
/s/ Phyllis L. Cothran
(Phyllis L. Cothran) Director
/s/ Thomas E. Gottwald
(Thomas E. Gottwald) President and Director
(Principal Operating Officer)
/s/ Gilbert M. Grosvenor
(Gilbert M. Grosvenor) Director
/s/ Sidney Buford Scott
(Sidney Buford Scott) Director
/s/ Charles B. Walker
(Charles B. Walker) Director
*By:
Bruce C. Gottwald
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
5 Opinion of Hunton & Williams.
23.1 Consent of Coopers & Lybrand L.L.P. (Ethyl Corporation
1996 Form 10-K).
23.2 Consent of Hunton & Williams.
EXHIBIT 5
March 20, 1998
Ethyl Corporation
330 South Fourth Street
P. O. Box 2189
Richmond, Virginia 23219
Ethyl Corporation -
Registration Statement on Form S-3
Dear Sirs:
We have acted as counsel to Ethyl Corporation, a Virginia corporation (the
"Company"), in connection with the registration by the Company of (a) an
aggregate of $300,000,000 of its (i) unsecured senior debt securities (the "Debt
Securities") and (ii) shares of its Cumulative Second Preferred Stock, par value
$10 per share (the "Preferred Stock") and (b) an indeterminate number of
preferred depositary shares of the Company to be evidenced by depositary
receipts (the "Depositary Shares"), as set forth in the Registration Statement
on form S-3 (the "Registration Statement") filed by the Company on January 12,
1995 with the Securities and Exchange Commission (the "Commission") pursuant to
the Securities Act of 1933, as amended by amendments 1 through 5. The Debt
Securities, the Preferred Stock and the Depositary Shares are referred to herein
collectively as the "Securities". The Securities are to be issued in one or more
series and are to be sold from time to time as set forth in the Registration
Statement, the Prospectus contained therein (the "Prospectus") and any
amendments or supplements thereto.
In rendering this opinion, we have relied upon, among other things, our
examination of such records of the Company and certificates of its officers and
of public officials as we have deemed necessary.
Based upon the foregoing and the further qualifications stated below, we
are of the opinion that:
1. The Company is duly incorporated, validly existing and in good standing
under the laws of the Commonwealth of Virginia; and
<PAGE>
March 20, 1998
Page 2
2. When (a) the terms of any series of the Preferred Stock have been
authorized by appropriate corporate action of the Company and (b) the Securities
have been issued and sold upon the terms and conditions set forth in the
Registration Statement, the prospectus and the applicable supplement to the
Prospectus, and with respect to the Debt Securities, such Debt Securities have
been duly executed, authenticated and delivered in accordance with the
Indenture, dated as of June 15, 1985 (as amended by the First Supplemental
Indenture, dated as of June 15, 1986, and the Second Supplemental Indenture,
dated as of December 15, 1994), between the Company and First Trust of New York,
N.A., then (x) the Debt Securities will be validly authorized and issued and
binding obligations of the Company and (y) the Preferred Stock will be legally
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration and to the statement made in reference to this firm
under the caption "Validity of Securities" in the Registration Statement.
Very truly yours,
/s/ Hunton & Williams
Hunton & Williams
Exhibit 23.1
Consent of Independent Accountants
We consent to the incorporation by reference in this registration statement of
Ethyl Corporation on Amendment No. 5 to Form S-3 (File No. 33-57243) of our
report dated January 30, 1997, on our audits of the consolidated financial
statements of Ethyl Corporation and Subsidiaries as of December 31, 1996 and
1995, and for the years ended December 31, 1996, 1995 and 1994, appearing on
page 42 of the Ethyl Corporation 1996 Annual Report, which report is
incorporated by reference in the Annual Report on Form 10-K. We also consent to
the reference to our firm under the caption "Experts."
/s/ Coopers & Lybrand, L.L.P.
COOPERS & LYBRAND L.L.P.
Richmond, Virginia
March 20, 1998
Exhibit 23.2
HUNTON & WILLIAMS
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
Telephone (804) 788-8200
Facsimile (804) 788-8218
March 20, 1998
Ethyl Corporation
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23219
Ethyl Corporation --
Registration Statement on Form S-3
Dear Sirs:
We have acted as counsel to Ethyl Corporation, a Virginia corporation (the
"Company"), in connection with the registration by the Company of (a) an
aggregate of $300,000,000 of its (i) unsecured senior debt securities and (ii)
shares of its Cumulative Second Preferred Stock, par value $10 per share and (b)
an indeterminate number of preferred depositary shares of the Company to be
evidenced by depositary receipts, as set forth in Amendment No. 5 to the
Registration Statement on Form S-3 (the "Registration Statement") that is being
filed with the Securities and Exchange Commission (the "Commission") by the
Company pursuant to the Securities Act of 1933, as amended.
We hereby confirm our consent to the filing of the March 20, 1998 opinion
of this firm with the Commission as an exhibit to the Registration Statement and
to the statement made in reference to this firm under the caption "Validity of
Securities" in the Registration Statement.
Very truly yours,
/s/ Hunton & Williams
