<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
-----------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1998
Commission file number 1-6450
GREAT LAKES CHEMICAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 95-1765035
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
ONE GREAT LAKES BOULEVARD
P. O. BOX 2200
WEST LAFAYETTE, INDIANA 47996
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 765-497-6100
Not Applicable
---------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X
-----
No
-----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.
One Class - 59,072,460 Shares as of June 30, 1998
<PAGE> 2
Part 1 - Financial Statements
GREAT LAKES CHEMICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30 December 31
1998 1997
----------- -----------
(thousands of dollars)
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 472,029 $ 73,673
Accounts and notes receivable, less
allowance of $5,777 (1997 - $5,803) 309,073 256,892
Inventories
Finished products 218,542 217,398
Raw materials 52,571 51,984
Supplies 31,275 28,793
----------- -----------
Total inventories 302,388 298,175
Prepaid expenses 27,272 39,806
----------- -----------
Total current assets 1,110,762 668,546
Plant and Equipment 1,219,658 1,140,617
Less allowance for depreciation (527,353) (481,982)
----------- -----------
Net plant and equipment 692,305 658,635
Goodwill 116,068 114,902
Investments in and Advances to
Unconsolidated Affiliates 72,501 72,716
Other Assets 30,133 29,052
Net Assets of Discontinued Operations 106,773 726,540
----------- -----------
$ 2,128,542 $ 2,270,391
=========== ===========
</TABLE>
1
<PAGE> 3
GREAT LAKES CHEMICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
<TABLE>
<CAPTION>
June 30 December 31
1998 1997
----------- -----------
(thousands of dollars)
<S> <C> <C>
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 121,043 $ 140,310
Accrued expenses 137,211 134,547
Income taxes payable 152,153 13,511
Dividends payable 4,726 9,431
Notes payable and current portion
of long-term debt 5,119 6,557
----------- -----------
Total current liabilities 420,252 304,356
Long-Term Debt, less Current Portion 511,678 561,455
Other Noncurrent Liabilities 42,540 28,692
Deferred Income Taxes 65,622 68,445
Stockholders' Equity
Common stock, $1 par value,
authorized 200,000,000 shares,
issued 72,716,070
(1997 - 72,572,602 shares) 72,716 72,573
Additional paid-in capital 127,115 123,379
Retained earnings 1,672,278 1,912,468
Minimum pension liability adjustment (2,543) (2,543)
Cumulative translation adjustment (35,310) (52,855)
Less treasury stock, at cost,
13,643,610 shares
(1997 - 13,628,300 shares) (745,806) (745,579)
----------- -----------
Total stockholders' equity 1,088,450 1,307,443
----------- -----------
$ 2,128,542 2,270,391
=========== ===========
</TABLE>
2
<PAGE> 4
GREAT LAKES CHEMICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
----------------------- -----------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
(thousands of dollars except per share data)
<S> <C> <C> <C> <C>
Net Sales $ 401,916 $ 356,373 $ 736,680 $ 675,991
Operating Expenses
Cost of products sold 286,556 253,794 527,946 484,547
Selling, administrative
and research expenses 54,931 45,658 116,493 90,305
---------- ---------- ---------- ----------
341,487 299,452 644,439 574,852
---------- ---------- ---------- ----------
Operating Income 60,429 56,921 92,241 101,139
Interest and Other Income 8,075 6,501 16,279 12,416
Interest and Other Expenses 10,978 11,488 23,431 20,592
---------- ---------- ---------- ----------
Income from Continuing
Operations before
Income Taxes 57,526 51,934 85,089 92,963
Income Taxes 19,600 18,800 29,900 33,500
---------- ---------- ---------- ----------
Net Income from
Continuing Operations 37,926 33,134 55,189 59,463
Net Income from
Discontinued Operations 7,012 29,257 32,571 55,796
---------- ---------- ---------- ----------
Net Income $ 44,938 $ 62,391 $ 87,760 $ 115,259
========== ========== ========== ==========
Earnings per Share:
Basic
Continuing Operations $ 0.64 $ 0.55 $ 0.93 $ 0.99
Discontinued Operations 0.12 0.49 0.56 0.92
---------- ---------- ---------- ----------
$ 0.76 $ 1.04 $ 1.49 $ 1.91
========== ========== ========== ==========
Diluted
Continuing Operations $ 0.64 $ 0.55 $ 0.93 $ 0.98
Discontinued Operations 0.12 0.49 0.55 0.92
---------- ---------- ---------- ----------
$ 0.76 $ 1.04 $ 1.48 $ 1.90
========== ========== ========== ==========
Cash Dividends Declared
per Share $ 0.08 $ 0.16 $ 0.24 $ 0.31
</TABLE>
3
<PAGE> 5
GREAT LAKES CHEMICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30
------------------------
1998 1997
---------- ----------
(thousands of dollars)
<S> <C> <C>
OPERATING ACTIVITIES
Net income from continuing operations $ 55,189 $ 59,463
Adjustments to reconcile income from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization 40,672 34,377
Changes in deferred items and other (2,536) 171
---------- ----------
Cash provided by continuing operations
excluding changes in working capital 93,325 94,011
Changes in working capital other than
debt, net of effect from business
combinations (27,398) (33,127)
Other noncurrent liabilities 8,195 185
---------- ----------
Net Cash Provided by Operating Activities
from Continuing Operations 74,122 61,069
Discontinued Operations:
Net income 32,571 55,796
Change in net assets 433,753 36,503
---------- ----------
Net Cash Provided by Operating Activities 540,446 153,368
INVESTING ACTIVITIES
Plant and equipment additions (74,905) (67,026)
Business combinations, net of cash acquired (1,572) (999)
Other (1,916) (7,852)
---------- ----------
Net Cash Used in Investing Activities (78,393) (75,877)
FINANCING ACTIVITIES
Net (repayments)borrowings under
short-term credit lines (1,611) 475
Net (decrease)increase in commercial
paper and other long-term obligations (50,723) 67,572
Proceeds from stock options exercised 3,880 421
Cash dividends (14,252) (13,353)
Repurchase of common stock (1,407) (84,235)
Other 1,934 --
---------- ----------
Net Cash Used in Financing Activities (62,179) (29,120)
Effect of Exchange Rate Changes on Cash
and Cash Equivalents (1,517) (2,858)
---------- ----------
Increase in Cash and Cash Equivalents 398,357 45,513
Cash and Cash Equivalents at Beginning
of Year 73,672 141,439
---------- ----------
Cash and Cash Equivalents at End of Year $ 472,029 $ 186,952
========== ==========
</TABLE>
4
<PAGE> 6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
FOR THE SIX MONTHS ENDED JUNE 30, 1998
CONTINUING OPERATIONS
The following table sets forth the percentage relationship to net sales of
certain income statement items for the Company's continuing operations:
<TABLE>
<CAPTION>
Second Quarter Year to Date
-------------------- --------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0% 100.0%
Gross Profits 28.7 28.8 28.3 28.3
Selling, Administrative and
Research 13.7 12.8 13.7 13.3
CEO Transition Costs -- -- 2.1 --
-------- -------- -------- --------
Operating Income 15.0 16.0 12.5 15.0
Interest and Other Income 2.0 1.8 2.3 1.8
Interest and Other Expense 2.7 3.2 3.2 3.0
-------- -------- -------- --------
Income before Taxes 14.3 14.6 11.6 13.8
Income Taxes 4.9 5.3 4.1 5.0
-------- -------- -------- --------
Net Income 9.4 9.3 7.5 8.8
======== ======== ======== ========
</TABLE>
Sales for the quarter were $402 million, an increase of $46 million over the
prior-year quarter. Net sales by business unit are set forth in the following
table:
<TABLE>
<CAPTION>
Second Quarter Year to Date
---------------------------------- ----------------------------------
1998 1997 Change 1998 1997 Change
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Flame Retardants $ 89 $ 73 22% $ 172 $ 149 15%
Intermediates and Fine
Chemicals 57 53 8% 108 101 7%
Polymer Stabilizers 64 61 5% 127 122 4%
Specialized Services and
Manufacturing 58 52 12% 106 98 8%
Water Treatment 134 117 15% 224 206 9%
--------- --------- --------- --------- --------- ---------
$ 402 $ 356 13% $ 737 $ 676 9%
========= ========= ========= ========= ========= =========
</TABLE>
On an overall basis the increases in sales reflect the following:
<TABLE>
<CAPTION>
Second Quarter Year to Date
-------------- ------------
<S> <C> <C>
Selling Price Decreases $ (5) $ (6)
Volume Increases 44 56
Foreign Exchange (6) (16)
Acquisitions 13 27
---- ----
$ 46 $ 61
==== ====
</TABLE>
5
<PAGE> 7
Flame Retardants sales increased primarily due to the acquisition of Anzon, a
producer of antimony-based products. Sales volumes of brominated flame
retardants showed an increase from the prior year, reflecting volume gains
offset, in part, by adverse foreign exchange, primarily the Japanese yen. Prices
were essentially comparable to the prior year. Volume was strong in Decabrome
and certain niche products.
Intermediates and Fine Chemicals sales improved as a result of price increases
in the intermediates business and volume gains in fine chemicals.
Polymer Stabilizers sales increased for the quarter resulted from strong demand
in the U.S. and Europe. Prices were down due to competitive pressure and the
economic situation in Asia. Currency had negative effect on sales.
Each of the businesses in the Specialized Services and Manufacturing business
unit made progress during the quarter. Fluorine sales increased over 10 percent
due to increased demand for FM200 and specialty refrigerants. Sales in the oil
field services business, OSCA, increased over 20 percent as a result of entering
into deep water well services and expanding its coil tubing operations. WIL
Labs, the toxicological testing service business, sales improvement results from
strong demand for testing pharmaceutical products.
Improved Water Treatment sales resulted from an expanded presence in the mass
market segment of the U.S. swimming pool chemicals market, new product
introductions and very favorable weather conditions in the south and
southeastern United States. Average selling prices were flat to slightly
negative, and the weakness of European currencies versus the U. S.
dollar had a slightly adverse effect.
Gross profits for the period amounted to $115 million, an increase of $13
million from the prior-year period. Volume gains and improvements in product
mix, coupled with a small improvement in manufacturing cost performance and the
addition of Anzon, added about $20 million to gross profits. Partially
offsetting the improvement was a $5 million decrease in average selling prices
and $2 million in adverse currency effects. As a percentage of sales, gross
profits were essentially unchanged from 1997. Improvements due to volume were
offset by lower prices, foreign exchange, and the acquisition of Anzon - a lower
margin business. Raw material prices are comparable to the prior year. The
company has not yet benefited from reductions in posted chlorine prices.
Selling, Administrative and Research expense increased $9 million in absolute
terms and 0.9 point as a percentage of sales compared to the prior year. The
higher costs were due to: expanding infrastructure to support expected future
revenue growth; higher costs associated with the implementation of new
information systems; and the costs of investigating and correcting information
system issues associated with the year 2000.
6
<PAGE> 8
Interest and other income increased $2 million, reflecting interest earned on
the cash distribution received from Octel.
Interest and other expense decreased due to lower average borrowings.
FINANCIAL CONDITION
Cash from the operating activities of the continuing businesses amounted to $74
million for the six-month period, an increase of $13 million over the prior-year
period. Reductions in working capital more than offset a $4 million decrease in
net income.
Discontinued Operations generated $466 million in the current year, all but $4
million of which is the cash received from the company's petroleum additives
business (Octel Corp) prior to the May 22, 1998 spin-off of Octel to Great Lakes
shareholders. Approximately $50 million of the $462 million in cash received
from Octel was used to reduce debt. The balance was added to cash and cash
equivalents. As part of the transaction, approximately $108 million in tax
liabilities were assumed by Great Lakes. Approximately $35 million in taxes
related to Octel's 1997 earnings will be paid in October 1998. An additional $38
million will become payable when the dividend from Octel is repatriated.
Shareholders equity (retained earnings and cumulative translation adjustment)
was reduced by approximately $282 million representing the remaining net book
value of the Octel Corp asset distribution to the Great Lakes shareholders.
Trade accounts receivable increased $60 million since December 31, 1997,
reflecting both the seasonality of the water treatment business and the strong
second quarter sales. Days sales outstanding at 69 days are unchanged from the
1997 year end but show a 4 day reduction compared to a year ago June.
Inventories increased $4 million from year end 1997 while the turnover rate
remains constant at 3.3 times. The seasonal decrease in inventories of water
treatment chemicals was more than offset by increases in other business units.
Capital spending amounts to $75 million for the period and is expected to total
approximately $160 million for the year.
Approximately 37,000 shares of common stock were repurchased during the first
half of 1998 at an average cost of $38.16.
FORWARD LOOKING STATEMENT
This report contains forward looking statements involving risks and
uncertainties that affect the Company's operations as discussed in the 1997
Annual Report on Form 10-K filed with the Securities and Exchange Commission.
Accordingly, there is no assurance that the Company's expectations will be
realized.
7
<PAGE> 9
GREAT LAKES CHEMICAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all the information and
footnotes necessary for a comprehensive presentation of financial position and
results of operations.
It is management's opinion, however, that all material adjustments (consisting
of normal recurring accruals) have been made which are necessary for a fair
financial statement presentation. The results for the interim period are not
necessarily indicative of the results to be expected for the year.
For further information, refer to the consolidated financial statements and
footnotes included in the Company's Annual Report on form 10-K for the year
ended December 31, 1997.
NOTE B - Income Taxes
The provision for income taxes at the effective tax rates reconciles with the
statutory U.S. Federal tax rate as follows:
<TABLE>
<CAPTION>
Six Months Ended
June 30
-------------------------
1998 1997
---------- ----------
<S> <C> <C>
Statutory U.S. Federal tax rate 35.0% 35.0%
State income taxes 2.1 2.4
Change in taxes relating to
various minor items (3.2) (1.4)
Non-deductible compensation 1.2 --
---------- ----------
35.1% 36.0%
========== ==========
</TABLE>
NOTE C - Comprehensive Income
As of January 1, 1998, the Company adopted the Financial Accounting Standards
Board's Statement 130, Reporting Comprehensive Income. Statement 130 establishes
new rules for reporting and display of comprehensive income and its components.
However, the adoption of this Statement had no impact on the Company's net
income or stockholders' equity. Statement 130 requires foreign currency
translation adjustments and minimum pension liability adjustments, which are
reported separately in stockholders' equity, to be included in other
comprehensive income. Prior year financial statements have been reclassified to
conform to the requirements of Statement 130.
8
<PAGE> 10
Comprehensive income was as follows:
<TABLE>
<CAPTION>
(in Millions) 1998 1997
---- ----
<S> <C> <C>
Second Quarter $37,172 $49,302
Year to Date $76,310 $58,081
</TABLE>
Note D - Earnings Per Share
The computation of basic and diluted earnings per share is determined by
dividing net income as reported as the numerator, by the number of shares
included in the denominator as follows:
<TABLE>
<CAPTION>
(in thousands) Three Months Ended Six Months Ended
June 30 June 30
---------- ---------- ---------- ----------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Weighted average shares
used for calculating
basic earnings per share 59,064 59,837 59,028 60,350
Effect of potentially
dilutive stock options
and restricted stock
used for calculating
diluted earnings per
share 233 258 235 255
---------- ---------- ---------- ----------
Denominator for diluted
earnings per share 59,297 60,095 59,263 60,605
========== ========== ========== ==========
</TABLE>
Part II. Other Financial Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits filed as part of the report are listed below:
Exhibit Number
3(ii) By-Laws as amended through May 7, 1998. (The advance notice
requirements for business to be properly brought before an annual
meeting by a stockholder and for the nomination of persons for
election to the Board of Directors is included in Article I,
sections 1 and 2).
10(a) Stock Option and Restricted Stock Agreements with Mark P. Bulriss
effective April 1, 1998.
9
<PAGE> 11
10(b) Employment Agreements with various officers
27 Financial Data Schedule
(b) The Company filed a form 8K on June 5, 1998 in connection with the
distribution of its petroleum additives business, Octel Corp, to its
shareholders. The 8K was amended on July 20, 1998 to provide pro forma
financial information with respect to the distribution.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date August 13, 1998 By /s/ Robert J. Smith
--------------------------------- ------------------------------
Robert J. Smith
Vice President, Controller
10
<PAGE> 1
EXHIBIT 3(ii)
BY-LAWS OF
GREAT LAKES CHEMICAL CORPORATION
ADOPTED BY ACTION OF THE
BOARD OF DIRECTORS
(ADOPTED MARCH 14, 1975,
AS AMENDED THROUGH MAY 7, 1998)
ARTICLE I
STOCKHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the stockholders of
the Corporation shall be held at the registered office of the Corporation in the
State of Delaware or at such other place within or without the State of
Delaware, as may be determined by the Board of Directors and as may be stated in
the notice of the meeting. The annual meeting shall be held on such date and at
such time as shall be designated from time to time by the Board of Directors.
The business to be transacted at such meeting shall be the election of directors
and such other business as shall properly be brought before the meeting.
No business may be transacted at an annual meeting of stockholders,
other than business that is (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors (or
any duly authorized committee thereof), (b) otherwise properly brought before
the annual meeting by or at the direction of the Board of Directors (or any duly
authorized committee thereof)
<PAGE> 2
GREAT LAKES CHEMICAL CORPORATION
BY-LAWS
MAY 7, 1998
or (c) otherwise properly brought before the annual meeting by any stockholder
of the Corporation (i) who is a stockholder of record on the date of the giving
of the notice provided for in this Section 1 and on the record date for the
determination of stockholders entitled to vote at such annual meeting and (ii)
who complies with the notice procedures set forth in this Section 1.
In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Secretary of
the Corporation.
To be timely, a stockholder's notice to the Secretary must be delivered
to or mailed and received at the principal executive offices of the Corporation
not less than one hundred twenty (120) days nor more than one hundred fifty
(150) days prior to the anniversary date of the immediately preceding annual
meeting of stockholders; provided, however, that in the event that the annual
meeting called for a date that is not within thirty (30) days before or after
such anniversary date, notice by the stockholder in order to be timely must be
so received not later than the close of business on the tenth (10th) day
following the day on which notice of the date of
2
<PAGE> 3
GREAT LAKES CHEMICAL CORPORATION
BY-LAWS
MAY 7, 1998
the annual meeting was mailed or public announcement of the date of the annual
meeting was made, whichever first occurs. In no event shall the public
announcement of an adjournment of an annual meeting commence a new time period
for the giving of a stockholder's notice as described above.
To be in proper written form, a stockholder's notice to the Secretary
must set forth as to each matter such stockholder proposes to bring before the
annual meeting (i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name and record address of such stockholder, (iii) the
class or series and number of shares of capital stock of the Corporation which
are owned beneficially or of record by such stockholder, (iv) a description of
all arrangements or understandings between such stockholder and any other person
or persons (including their names) in connection with the proposal of such
business by such stockholder and any material interest of such stockholder in
such business and (v) a representation that such stockholder intends to appear
in person or by proxy at the annual meeting to bring such business before the
meeting.
3
<PAGE> 4
GREAT LAKES CHEMICAL CORPORATION
BY-LAWS
MAY 7, 1998
No business shall be conducted at the annual meeting of stockholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 1; provided, however, that, once business
has been properly brought before the annual meeting in accordance with such
procedures, nothing in this Section 1 shall be deemed to preclude discussion by
any stockholder of any such business. If the Chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.
The term "public announcement" shall mean an announcement in a press
release reported by the Dow Jones News Service, Associated Press or comparable
national news service or in a document publicly filed by the Corporation with
the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
SECTION 2. SPECIAL MEETINGS. Special meetings of the stockholders may
be called by the Board of Directors, by the Chairman, or by the President. At
any time, upon the written request of any person or persons entitled to call a
special
4
<PAGE> 5
GREAT LAKES CHEMICAL CORPORATION
BY-LAWS
MAY 7, 1998
meeting, it shall be the duty of the Secretary to send out notices of such
meeting, to be held within or without the State of Delaware and at such time,
but not less than fifteen days nor more than thirty days after receipt of the
request, as may be fixed by the Board of Directors. If the Board of Directors
shall fail to fix a time or place, the meeting shall be held at the registered
office of the Corporation in the State of Delaware at such time as shall be
fixed by the Secretary within the above limits.
SECTION 3. NOTICE OF MEETINGS AND ADJOURNED MEETINGS.
(a) A written or printed notice of each meeting or stockholders
shall be given which shall state the place, date and hour of the meeting, and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called. The written or printed notice of any meeting shall be given not less
than ten nor more than sixty days before the date of the meeting to each
stockholder entitled to vote at such meetings. If mailed, notice shall be deemed
given when deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the records of the Corporation. No
publication of the notice of meetings shall be required. An affidavit of the
Secretary or an Assistant Secretary or of the Transfer Agent of the Corporation
that the notice has been given
5
<PAGE> 6
GREAT LAKES CHEMICAL CORPORATION
BY-LAWS
MAY 7, 1998
shall, in the absence of fraud, be prima facie evidence of the facts stated
therein. Any previously scheduled meeting of the stockholders may be postponed,
and (unless the Certificate of Incorporation provides otherwise) any special
meeting of the stockholders may be canceled, by resolution of the Board of
Directors upon public notice given prior to the date previously scheduled for
such meeting of stockholders.
(b) Whether or not a quorum is present, any annual, regular or
special meeting of the stockholders may be adjourned to another date by the
Chairman of the meeting or by a majority vote by the shares represented at such
meeting. When a meeting is adjourned to another time or place, notice need not
be given of the adjourned meeting if the time and place thereof are announced at
the meeting at which the adjournment is taken. At the adjourned meeting the
Corporation may transact any business which might have been transacted at the
original meeting. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting.
6
<PAGE> 7
GREAT LAKES CHEMICAL CORPORATION
BY-LAWS
MAY 7, 1998
(c) Whenever a notice of a meeting is required to be given to
stockholders, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting, either in person or by proxy, shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of a meeting, to
the transaction of any business because the meeting was not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders need be specified in any written
waiver of notice.
SECTION 4. QUORUM. Except as otherwise provided by law, a quorum at all
meetings of stockholders shall consist of the holders of record of a majority of
the shares entitled to vote thereat.
SECTION 5. CONDUCT OF MEETING. Meetings of the stockholders shall be
presided over by the Chairman, or if he is not present, by the President, or if
he is not present, by a Vice President or other person chosen at the meeting.
The Secretary or an Assistant Secretary of the Corporation, or in their absence,
a person chosen at the meeting, shall act as Secretary of the meeting.
7
<PAGE> 8
GREAT LAKES CHEMICAL CORPORATION
BY-LAWS
MAY 7, 1998
SECTION 6. INSPECTORS OF ELECTION. Whenever any stockholder present at
a meeting of the stockholders shall request the appointment of inspectors, the
Chairman of the meeting shall appoint inspectors who need not be stockholders.
If the right of any person to vote at such meeting shall be challenged, the
inspectors of election shall determine such right. The inspectors shall receive
and count the votes either upon an election or for the decision of any question,
and shall determine the result. Their certificate of any vote shall, in the
absence of fraud, be prima facie evidence of the facts stated therein.
SECTION 7. VOTING. All elections of directors shall be by
written ballot. Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors of the Corporation,
except as may be otherwise provided in the Restated Certificate of Incorporation
of the Corporation. Nominations of persons for election to the Board of
Directors may be made at any annual meeting of stockholders (a) by or at the
direction of the Board of Directors (or any duly authorized committee thereof)
or (b) by any stockholder of the Corporation (i) who is a stockholder of record
on the date of the giving of the notice provided for in this Section 7 and on
the record date for the determination of
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stockholders entitled to vote at such annual meeting and (ii) who complies with
the notice procedures set forth in this Section 7.
In addition to any other applicable requirements, for a nomination to
be made by a stockholder, such stockholder must have given timely notice thereof
in proper written form to the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be delivered
to or mailed and received at the principal executive offices of the Corporation
not less than one hundred and twenty (120) days nor more than one hundred fifty
(150) days prior to the anniversary date of the immediately preceding annual
meeting of stockholders; provided, however, that in the event that the annual
meeting called for a date that is not within thirty (30) days before or after
such anniversary date, notice by the stockholder in order to be timely must be
so received not later than the close of business on the tenth (10th) day
following the day on which notice of the date of the annual meeting was mailed
or public announcement (as defined in Section 1) of the date of the annual
meeting was made, whichever first occurs. In no event shall the public
announcement of an adjournment of an annual meeting commence a new time period
for the giving of a stockholder's notice as described above.
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To be in proper written form, a stockholder's notice to the Secretary
must set forth (a) as to each person whom the stockholder proposes to nominate
for election as a director (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by the person and (iv) any
other information relating to the person that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Exchange Act, and the rules and regulations promulgated thereunder; and (b) as
to the stockholder giving the notice (i) the name and record address of such
stockholder, (ii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such stockholder,
(iii) a description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or persons (including
their names) pursuant to which the nomination(s) are to be made by such
stockholder, (iv) a representation that such stockholder intends to appear in
person or by proxy at the annual meeting to nominate the persons named in its
notice and (v) any other
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information relating to such stockholder that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Exchange Act and the rules and regulations promulgated thereunder. Such notice
must be accompanied by a written consent of each proposed nominee to be named as
a nominee and to serve as a director if elected.
No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 7. If the Chairman of the annual meeting determines that a nomination
was not made in accordance with the foregoing procedures, the Chairman shall
declare to the meeting that the nomination was defective and such defective
nomination shall be disregarded.
At every meeting of the stockholders, each stockholder entitled to vote
at such meeting shall have, as to each matter submitted to a vote, one vote for
each share of stock having voting rights registered in his name on the stock
books of the Corporation.
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At all meetings of stockholders, a stockholder may vote by proxy
appointed by a written instrument signed by the stockholder or his duly
authorized attorney in fact and delivered to the Secretary of the meeting, but
no proxy shall be voted or acted upon after three years from its date, unless
the proxy provided for a longer period.
A quorum being present, directors shall be elected by a plurality of
the votes of the shares present and in person or represented by proxy at the
meeting and entitled to vote.
In all matters, other than the election of directors, the affirmative
vote of the majority of shares present or in person or represented by proxy at
the meeting and entitled to vote on the subject matter, a quorum being present,
shall be the act of the shareholders.
SECTION 8. LIST OF STOCKHOLDERS. The Secretary or other officer of the
Corporation having charge of the stock ledger shall prepare and make or cause to
be prepared and made, at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at said election, arranged in
alphabetical order, and showing the address of each such stockholder and the
number
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of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder or his proxy who may be
present. Upon the willful neglect or refusal of the directors then in office to
produce or cause to be produced such a list at any meeting for the election of
directors, they shall be ineligible to any office at such meeting. The original
or duplicate stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by this
section, or to vote in person or by proxy at such meeting.
SECTION 9. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.
(a) In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment
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thereof, or to express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which shall
not be more than sixty nor less than ten days before the date of such meeting,
nor more than sixty days prior to any other action.
(b) If no record date is fixed:
(i) The record date for determining stockholders entitled
to notice of or to vote at a meeting of the stockholders shall be at
the close of business on the day next preceding the day on which
notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held.
(ii) The record date for determining stockholder for any
other purpose shall be at the close of business on the date on which
the Board of Directors adopts the resolution relating thereto.
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(c) A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
ARTICLE II
DIRECTORS
SECTION 1. NUMBER, QUALIFICATIONS, CLASSES, TERMS AND QUORUM. The
business and affairs of the Corporation shall be managed under the direction of
a Board of Directors which shall consist of nine members, none of whom need be
stockholders. The directors shall be classified with respect to the time for
which they shall hold office by dividing them into three classes. The first
class shall consist of four directors whose term of office shall expire in 1999
and in every third year thereafter. The second class shall consist of three
directors whose terms of office shall expire in 2000 and in every third year
thereafter. The third class shall consist of two directors whose terms of office
shall expire in 2001 and in every third year
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thereafter. At each annual meeting of the stockholders of the Corporation, or
any adjournment thereof, the successors to the directors whose terms shall
expire in that year shall be elected to hold office for a term of three years.
In any event, each director shall hold office until his successor is duly
elected and qualified or until his earlier resignation or removal. Any director
may resign at any time upon written notice to the Corporation. A majority of the
total number of directors shall constitute a quorum for the transaction of
business. The vote of a majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors. The Board of
Directors may elect a Chairman of the Board of Directors who shall preside at
all meetings of the stockholders and of the Board of Directors. The Chairman of
the Board of Directors shall have such other powers and perform such other
duties as are delegated to him by the Board of Directors or as are incidental to
his office.
SECTION 2. VACANCIES. Any vacancy and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, although less than a quorum, or
by a sole remaining director.
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SECTION 3. MEETINGS. The Board of Directors shall meet each year
immediately after the annual meeting of the shareholders, at the place where the
annual meeting of the shareholders is held, for the purpose of electing officers
and for the conduct of any other business that may be brought before the
meetings. Such meeting shall be held without notice. If such meeting is not held
as herein provided, the election of officers may be had at any subsequent
meeting of the Board of Directors. Regular meetings of the Board of Directors
may be held at such time and place within or without the State of Delaware, as
the Board of Directors may from time to time designate. Special meetings of the
Board of Directors may be held upon the call of the Chairman of the Board, or
two or more members of the Board of Directors, at any place, within or without
the State of Delaware, upon not less than 48 hours notice, specifying the time,
place and general purposes of the meeting, given to each director either
personally, or by telephone, telegram, or by mail. At any meeting at which all
of the directors are present, notice of the time, place and purposes thereof
shall be deemed waived. Notice of any meeting may be waived in writing, either
before, during, or after any meeting. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the directors, or
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members of a committee of the directors, need be specified in any written waiver
of notice. A majority of the directors present at any meeting, whether or not a
quorum is present, may adjourn the meeting and no notice of such adjourned
meeting need be given.
SECTION 4. COMMITTEES. The Board of Directors may, by resolution passed
by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more directors of the Corporation. The Board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
Any such committee, to the extent provided in the resolution
of the Board of Directors, shall have and may exercise the authority of the
Board of Directors in the management of the business and affairs of the
Corporation, and may
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authorize the seal of the Corporation to be affixed to all papers which may
require it; but no such committee shall have the power or authority in reference
to amending the Certificate of Incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or exchange of
all or substantially all of the Corporation's property and assets, recommending
to the stockholders a dissolution of the Corporation or a revocation of a
dissolution or amending the By-Laws of the Corporation; and, unless the
resolution expressly so provides, no such committee shall have the power or
authority to declare a dividend or authorize the issuance of stock.
An Executive Committee shall be formed, comprising at least three
directors, which shall have the authority and power to act on behalf of the
Board of Directors, except as restricted above, with the additional authority to
declare dividends on behalf of the Corporation.
SECTION 5. ACTION BY CONSENT WITHOUT A MEETING. Any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings
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are filed with the minutes of proceedings of the Board or committee.
SECTION 6. MEETINGS BY CONFERENCE TELEPHONE. Members of the Board of
Directors or of any committee designated by the Board may participate in a
meeting of such Board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
section shall constitute presence in person at such meeting.
ARTICLE III
OFFICERS
SECTION 1. OFFICERS. The officers shall consist of a Chief
Executive Officer, a President, one or more Vice Presidents and/or Senior or
Executive Vice Presidents, a Secretary, one or more Assistant Secretaries, a
Treasurer, and one or more Assistant Treasurers. Such officers shall be elected
by the Board of Directors and each officer shall hold office until his successor
is elected and qualified or until his earlier resignation or removal. Any
officer may resign at any time upon written notice to the Corporation. Any
number of offices may be held by the same person,
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but no officer shall execute, act or verify any instrument in more than one
capacity. The Corporation may have such other officers and agents as the Board
of Directors may determine, who shall be elected or appointed by the Board of
Directors and hold office for such terms as are prescribed by the Board of
Directors. Any vacancy occurring in any office of the Corporation by death,
resignation, removal or otherwise, shall be filled by the Board of Directors.
The Board of Directors may remove any officer with or without cause.
SECTION 2. CHIEF EXECUTIVE OFFICER. Subject to the authority of the
Board of Directors, the Chief Executive Officer shall administer the affairs of
the Corporation and shall have such other powers and perform such other duties
as are delegated to him by the Board of Directors, or by an authorized committee
thereof, or are incidental to his office. During the time when the office of the
Chairman of the Board is vacant, the Chief Executive Officer shall perform the
duties of that office.
SECTION 3. PRESIDENT. Subject to the authority of the Board of
Directors, the President shall, during the absence or disability of the Chief
Executive Officer, administer the affairs of the Corporation and shall have such
other powers
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and perform such other duties as are incidental to his office or are delegated
to him by the Board of Directors, or an authorized committee thereof, or by the
Chief Executive Officer.
SECTION 4. VICE PRESIDENTS. Subject to the authority of the Board of
Directors, the Vice Presidents, in the order designated by the Board of
Directors, shall exercise the functions of the Chief Executive Officer and
President during the absence or disability of the Chief Executive Officer and
the President. Each Vice President shall have such other duties as are assigned
to him from time to time by the Board of Directors or the Chief Executive
Officer.
SECTION 5. OTHER OFFICERS. The Secretary and the Treasurer shall
perform such duties as are incidental to their offices, or are properly required
of them by the Board of Directors or the Chief Executive Officer. The Assistant
Secretaries shall, in the absence of the Secretary, perform the duties and
exercise the powers of the Secretary, and shall perform such other duties as may
be assigned by the Board of Directors or the Chief Executive Officer. Other
subordinate officers elected or appointed by the Board of Directors shall
exercise such powers and perform such duties as may be delegated to them.
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SECTION 6. DELEGATION OF AUTHORITY. In the case of the absence or
incapacity of any officer, or for any other reason that the Board of Directors
may deem sufficient, the Board of Directors or, in the absence of any action by
the Board of Directors, the Chief Executive Officer may delegate any or all of
the duties or powers of such officer to any other officer or to any other
director or to any other person.
ARTICLE IV
CERTIFICATES OF STOCK
SECTION 1. FORM. Every holder of stock in the Corporation shall be
entitled to have a certificate signed by the Chairman of the Board of Directors,
or the President or a Vice President, and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Corporation
certifying the number of shares owned by him in such Corporation. If such
certificate is countersigned (1) by a Transfer Agent other than the Corporation
or its employee, or, (2) by a Registrar other than the Corporation or its
employee, any other signature on the certificate may be a facsimile. In case any
officer, Transfer Agent or Registrar who has signed or
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whose facsimile signature has been placed upon a certificate who has ceased to
be such officer, Transfer Agent or Registrar before such certificate is issued,
it may be issued by the Corporation with the same effect as if he were such
officer, Transfer Agent or Registrar at the date of issue.
SECTION 2. TRANSFERS. Transfers of shares of stock of the Corporation
shall be made only on the books of the Corporation by the registered owner
thereof, or his duly authorized attorney, with a Transfer Clerk or Transfer
Agent appointed as specified in these By-Laws, and on surrender of the
certificate or certificates for such shares of stock properly endorsed and with
all taxes thereon paid. The person in whose name the shares of stock stand on
the books of the Corporation shall be deemed by the Corporation to be the holder
thereof for all purposes.
SECTION 3. TRANSFER AGENT AND REGISTRAR. The Board of Directors may
appoint one or more Transfer Agents or Transfer Clerks and one or more
Registrars, and may require all certificates for shares of stock to bear the
signature or signatures of any of them.
SECTION 4. LOSS OR DESTRUCTION. In case of loss or destruction of a
certificate for shares, another certificate may be issued in lieu thereof in
such manner
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and upon such terms as the Board of Directors shall authorize, either by general
resolution or by special resolution in each particular case.
ARTICLE V
FISCAL YEAR
SECTION 1. FISCAL YEAR. The fiscal year of the Corporation shall begin
on the first day of January of each year and shall end on the 31st day of
December following.
ARTICLE VI
SEAL
SECTION 1. CORPORATION SEAL. The Board of Directors shall provide a
suitable corporate seal for use by the Corporation.
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ARTICLE VII
INDEMNIFICATION
SECTION 1. INDEMNIFICATION. Each person who was or is made a party or
is threatened to be made a party to or is involved in or called as a witness in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, and any appeal therefrom (hereinafter, collectively a
"proceeding"), by reason of the fact that he or she, or a person of whom he or
she is the legal representative, is, was or had agreed to become a director of
the Corporation or is, was or had agreed to become an officer of the Corporation
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, shall be indemnified and held harmless by the Corporation to the fullest
extent permitted under the General Corporation Law of the State of Delaware (the
"DGCL"), as the same now exists or may hereafter be amended (but, in the case of
any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than the DGCL permitted
the Corporation to provide prior to such amendment), against all expenses,
liabilities and losses (including attorneys' fees, judgments, fines, excise
taxes or penalties pursuant to the Employee Retirement Income Security Act of
1974,
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as amended, and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith; provided, that except as
explicitly provided herein, prior to a Change in Control of the Corporation, as
defined herein, a person seeking indemnity in connection with a proceeding (or
part thereof) initiated by such person against the Corporation or any director,
officer, employee or agent of the Corporation shall not be entitled thereto
unless the Corporation has joined in or consented to such proceeding (or part
thereof). For purposes of this Article, a "Change in Control of the Corporation"
shall be deemed to have occurred if the conditions set forth in any one of the
following clauses shall have been satisfied: (a) any "person" (as such term is
used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934 (as in
effect as of December 7, 1995 (the "Exchange Act")) other than (i) the
Corporation, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the stockholders of the
Corporation in substantially the same proportions as their ownership of shares
of the Corporation (any such person is hereinafter referred to as a "Person"),
is or becomes the "beneficial owner" (as defined in Rule
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13d-3 under the Exchange Act), directly or indirectly, of securities of the
Corporation representing more than 50% of the combined voting power of the
Corporation's then outstanding securities (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Corporation); (b) there is consummated a merger or consolidation of the
Corporation with or into any other corporation, other than a merger or
consolidation which would result in the holders of the voting securities of the
Corporation outstanding immediately prior thereto holding securities which
represent, in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation,
immediately after such merger or consolidation, more than 70% of the combined
voting power of the voting securities of either the Corporation or the other
entity which survives such merger or consolidation or the parent of the entity
which survives such merger or consolidation; (c) the stockholders of the
Corporation approve any plan or proposal for the liquidation or dissolution of
the Corporation or an agreement for the sale or disposition by the Corporation
of all or substantially all the Corporation's assets; or (d) during any period
of two consecutive years (not including any period prior to December 7, 1995),
individuals who at the beginning of such
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period constitute the Board of Directors and any new director (other than a
director designated by a Person who has entered into an agreement with the
Corporation to effect a transaction described in clause (a), (b) or (c) of this
paragraph) whose election by the Board or nomination for election by the
Corporation's stockholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof. For purposes of
this Article VII, where a Change in Control of the Corporation results from a
series of related transactions, the Change in Control of the Corporation shall
be deemed to have occurred on the date of the consummation of the first such
transaction. For purposes of clause (a) of this paragraph, the stockholders of
another corporation (other than the Corporation or a corporation described in
clause (iv)), in the aggregate, shall be deemed to constitute a Person.
Prior to a Change in Control of the Corporation, any indemnification
under Section 1 (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he or she
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has met the applicable standard of conduct set forth in the DGCL. Such
determination shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal counsel (who
may be the regular counsel of the Corporation) in a written opinion or (3) by
the stockholders.
Following a Change in Control of the Corporation, any indemnification
under this Section 1 (unless ordered by a court) shall be paid by the
Corporation unless within 60 days of such request for indemnification a
determination is made, in a written opinion, by special independent counsel
selected by the person requesting indemnification and approved by the
Corporation (which approval shall not be unreasonably withheld), which counsel
has not otherwise performed services (other than in connection with similar
matters) within the five years preceding its engagement to render such opinion
for such person or for the Corporation or any affiliates (as such term is
defined in Rule 405 under the Securities Act of 1933, as amended) of the
Corporation (whether or not they were affiliates when services were so
performed) ("Independent Counsel"), that indemnification of such person is not
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proper under the circumstances because such person has not met the necessary
standard of conduct under the DGCL. Unless such person has theretofore selected
Independent Counsel pursuant to this Section 1 and such Independent Counsel has
been approved by the Corporation, legal counsel approved by a resolution or
resolutions of the Board of Directors prior to a Change in Control of the
Corporation shall be deemed to have been approved by the Corporation as
required. Such Independent Counsel shall determine as promptly as practicable
whether and to what extent such person would be permitted to be indemnified
under applicable law and shall render its written opinion to the Corporation and
such person to such effect. The Corporation agrees to pay the reasonable fees of
the Independent Counsel referred to above and to fully indemnify such
Independent Counsel against any and all expenses, claims, liabilities and
damages arising out of or relating to this Article or its engagement pursuant
hereto. In making a determination under this Section 1, the Independent Counsel
referred to above shall determine that indemnification is permissible unless
clearly precluded by this Article VII or the applicable provisions of the DGCL.
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SECTION 2. PAYMENT OF EXPENSES IN ADVANCE. Expenses, including
attorneys' fees, incurred by a person referred to in Section 1 of this Article
in defending a proceeding shall be paid by the Corporation in advance of the
final disposition of such proceeding, including any appeal therefrom, upon
receipt of an undertaking (the "Undertaking") by or on behalf of such person to
repay such amount if it shall ultimately be determined that he or she is not
entitled to be indemnified by the Corporation.
SECTION 3. RIGHT OF CLAIMANT TO BRING SUIT. If a claim under Section 1
hereof is not paid in full by the Corporation within 60 days after a written
claim has been received by the Corporation or if expenses pursuant to Section 2
hereof have not been advanced within 10 days after a written request for such
advancement, accompanied by the Undertaking, has been received by the
Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim or the advancement of
expenses. (If the claimant is successful, in whole or in part, in such suit or
any other suit to enforce a right for expenses or indemnification against the
Corporation or any other party under any other agreement, such claimant shall
also be entitled to be paid the
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reasonable expense of prosecuting such claim.) It shall be a defense to any such
action (other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
Undertaking has been tendered to the Corporation) that the claimant has not met
the standards of conduct which make it permissible under the DGCL for the
Corporation to indemnify the claimant for the amount claimed. After a Change in
Control of the Corporation, the burden of proving such defense shall be on the
Corporation, and any determination by the Corporation (including its Board of
Directors, independent legal counsel or its stockholders) that the claimant had
not met the applicable standard of conduct required under the DGCL shall not be
a defense to the action nor create a presumption that claimant had not met such
applicable standard of conduct.
SECTION 4. INDEMNITY NOT EXCLUSIVE. The indemnification and advancement
of expenses provided by, or granted pursuant to, the other sections of this
Article VII shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
statute, by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while
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MAY 7, 1998
holding such office. The Board of Directors shall have the authority, by
resolution, to provide for such other indemnification of directors, officers,
employees or agents as it shall deem appropriate.
SECTION 5. INSURANCE INDEMNIFICATION. The Corporation shall have power
to purchase and maintain insurance to protect itself and any director, officer,
employee or agent of the Corporation or another corporation, partnership, joint
venture, trust or other enterprise, against any expenses, liabilities or losses,
whether or not the Corporation would have the power to indemnify such person
against such expenses, liabilities or losses under the provisions of this
Article VII or the DGCL.
SECTION 6. CONTINUATION OF INDEMNIFICATION; ENFORCEABILITY. The
provisions of this Article shall be applicable to all proceedings commenced
after its adoption, whether such arise out of events, acts, omissions or
circumstances which occurred or existed prior or subsequent to such adoption,
and shall, unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such person.
This Article shall be deemed to grant each person who, at any time that this
Article is in effect, serves or agrees to serve in any
34
<PAGE> 35
GREAT LAKES CHEMICAL CORPORATION
BY-LAWS
MAY 7, 1998
capacity which entitles him to indemnification hereunder rights against the
Corporation to enforce the provisions of this Article, and any repeal or other
modification of this Article or any repeal or modification of the DGCL or any
other applicable law shall not limit any rights of indemnification then existing
or arising out of events, acts, omissions or circumstances occurring or existing
prior to such repeal or modification, including, without limitation, the right
to indemnification for proceedings commenced after such repeal or modification
to enforce this Article with regard to acts, omissions, events or circumstances
occurring or existing prior to such repeal or modification.
SECTION 7. SEVERABILITY. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director and officer of the
Corporation as to costs, charges and expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement with respect to any proceeding,
whether civil, criminal, administrative or investigative, including an action by
or in the right of the Corporation, to the full extent permitted by any
applicable portion of this Article that shall not have been invalidated and to
the full extent permitted by applicable law.
35
<PAGE> 36
GREAT LAKES CHEMICAL CORPORATION
BY-LAWS
MAY 7, 1998
ARTICLE VIII
AMENDMENTS
SECTION 1. AMENDMENTS. The Board of Directors shall have the power to
make, alter or repeal the By-Laws of the Corporation at the annual or any
regular meeting of the Board of Directors or by unanimous written consent
without a meeting, or at any special meeting called for such purposes.
36
<PAGE> 1
EXHIBIT 10(a)
FORM OF
GREAT LAKES CHEMICAL CORPORATION
STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of the 1st day of April, 1998 (the "Effective
Date") by and between Great Lakes Chemical Corporation ( the "Company") and Mark
Bulriss (the "Executive").
WITNESSETH:
WHEREAS, the Company and the Executive have entered into an employment
agreement dated as of the date hereof (the "Employment Agreement"), pursuant to
which the Executive will serve as the President and Chief Executive Officer of
the Company; and
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company to enter into this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Executive the right
and option (an "Option") to purchase, subject to the vesting provisions of
Section 3, all or any part of an aggregate of 700,000 shares of the Company's
common stock, par value $1.00 per share ("Common Stock") (such number, as
adjusted hereunder, being referred to as the "Option Shares"). The purchase
price per share of the Option shall be equal to the average of the closing
prices of the Common Stock over the five (5) consecutive trading day period
ending on March 17, 1998 (such price, as adjusted hereunder, being referred to
as the "Option Price"). The number of Option Shares and the Option Price shall
be subject to adjustment as provided in Section 10 hereof, including the
adjustment of the Option Price to reflect consummation of the Company's proposed
spinoff of Octel (the "Spinoff"); provided, however, that the number of Option
Shares shall not be subject to adjustment to reflect consummation of the
Spinoff, so that, after giving effect to the Spinoff, the Option shall represent
an option to acquire 700,000 shares of Common Stock of the post-Spinoff Company
at a price equal to the Option Price set forth in the preceding sentence, as
adjusted to reflect consummation of the Spinoff.
2. Term of Option. Subject to earlier termination as provided in Section
4, the Option shall expire and cease to be exercisable on the tenth anniversary
of the Effective Date (the "Termination Date").
<PAGE> 2
3. Vesting and Exercisability.
(a) Regular Vesting Schedule. An aggregate of 200,000 Option
Shares shall vest and become exercisable on the Effective Date and, except as
otherwise provided herein, the remaining 500,000 Option Shares shall vest
ratably on an annual basis on each of the first four anniversaries of the
Effective Date, provided that the Executive is employed by the Company on each
applicable vesting date, as follows:
Additional Number
of Shares Vesting Date
----------------- -------------
125,000 April 1, 1999
125,000 April 1, 2000
125,000 April 1, 2001
1215,000 April 1, 2002
(b) Acceleration of Vesting. Upon (i) the occurrence of a
Change in Control (as defined in the Great Lakes Chemical Corporation 1993
Employee Stock Compensation Plan (the "1993 Plan")), (ii) termination of the
Executive's employment with the Company by reason of the death or Disability of
the Executive, (iii) termination of the Executive's employment by the Company
without Cause or (iv) termination of the Executive's employment by the Executive
for Good Reason, the Option Shares shall become immediately vested and fully
exercisable.
(c) Certain Definitions. For purposes of this Agreement,
"Cause," "Disability" and "Good Reason" shall have the respective meanings
ascribed to such terms under the Employment Agreement.
4. Termination of Employment
(a) Death; Disability; Without Cause; Good Reason. Upon the
termination of the Executive's employment (i) by reason of the death or
Disability of the Executive, (ii) by the Company without Cause, or (iii) by the
Executive for Good Reason, the Option shall remain exercisable until the
earliest of (1) the third anniversary of the Date of Termination (as defined in
the Employment Agreement), (2) the date on which Executive shall have breached
the provisions of Section 8 of the Employment Agreement (other than an isolated,
inadvertent breach), or (3) the Termination Date.
(b) Cause; Other than for Good reason. Upon termination of
the Executive's services by the Company for Cause or by the Executive (other
than for Good Reason), the:
(1) the unvested portion of the Option shall terminate
upon the Date of Termination and no longer be exercisable; and
(2) the vested portion of the Option shall remain
exercisable until the earliest of (x) the expiration of six
(6) months following the Date of
2
<PAGE> 3
Termination, (y) the date on which Executive shall have
breached the provisions of Section 8 of the Employment
Agreement (other than an isolated, inadvertent breach), or (z)
the Termination Date.
5. Method of Exercising Option.
(a) Full payment for the Option Shares purchased shall be
made at the time of any exercise under this Agreement. The option price shall
be payable to the Company either (i) in United States dollars in cash or by
check, bank draft, or postal or express money order, or (ii) through the deliver
of shares of Common Stock owned by the Executive for at least six (6 Months
prior to the date of exercise having a Fair Market Value on the date of exercise
equal to the full Option Price, or (iii) by a combination of (i) and (ii) above.
For purposes of this Agreement, "Fair Market Value" shall have the meaning
ascribed to such term under the 1993 Plan. Upon written request by the
Executive, exercise under this Agreement may be done on a cashless basis through
a broker (i.e., the Executive shall be entitled to receive the Fair market Value
of the Option Shares, less the Option Price, without being required to pay the
Option Price). Subject to the terms and conditions hereof, the Option shall be
exercisable by notice to the Company on the form provided by the Company upon
request of the Executive. In the event the Options are being exercised by any
person or persons other than the Executive, the notice shall be accompanied by
proof, satisfactory to the Company, of the right of such person or persons to
exercise any right under this Agreement.
(b) At the time of exercise, the Executive shall pay to the
Company such amount as the Company reasonably deems necessary to satisfy its
obligation to withhold Federal, state or local income or other taxes incurred by
reason of such exercise or the transfer of Option Shares thereupon, by tendering
to the Company a check in the amount of such withholding or by electing to have
withheld upon exercise shares of Common Stock having a Fair Market Value equal
to the amount of such tax withholding.
6. Issuance of Shares. As promptly as practical after receipt of such
written notification of exercise and full payment of the option price and any
required tax withholding, the Company shall issue or transfer to the Executive
the number of Option shares with respect to which such Option has been exercised
(less shares withheld in satisfaction of tax withholding obligations, if any),
and shall deliver to the Executive a certificate or certificates therefor,
registered in the Executive's name. The Company may postpone such delivery
until it receives satisfactory proof that the issuance or transfer of such
Option Shares will not violate any of the provisions of the Securities Act of
1933, as amended (the "Securities Act"), or the Securities Exchange Act of 1934,
as amended, any rules or regulations of the Securities and Exchange commission
promulgated thereunder, or the requires of applicable state law relating to
authorization, issuance or sale of securities, or until there has been
compliance with the provisions of such acts or rules.
3
<PAGE> 4
7. Company; Executive.
(a) The term "Company" as used in this Agreement with
reference to employment shall include the Company and its subsidiaries, as
appropriate.
(b) Whenever the word "Executive" is used in any provision of
this Agreement under circumstances where the provision should logically be
construed to apply to the beneficiaries, the executors, the administrators, or
the person or persons to whom the Option may be transferred by will or by the
laws of descent and distribution, the word "Executive" shall be deemed to
include such person or persons.
8. Non-Transferability. The Option is not transferable by the Executive
otherwise than to a designated beneficiary upon death or by will or the laws of
descent and distribution, and is exercisable during the Executive's lifetime
only by the Executive. No assignment or transfer of all or any part of the
Option, or of the rights represented thereby, whether voluntary or involuntary,
by operation of law or otherwise (except to a designated beneficiary, upon
death, by will or the laws of descent and distribution), shall vest in the
assignee or transferee any interest or right herein whatsoever.
9. Rights as Shareholder. Neither the Executive nor any transferee of the
Option shall have any of the rights of a shareholder with respect to any Option
Shares except to the extent that certificate(s) for such Option Shares shall
have been issued upon the exercise of the Option as provided herein, and no
adjustment shall be made for cash distributions in respect of such Option Shares
for which the record date is prior to the date upon which such Executive or
transferee shall become the holder of record thereof.
10. Adjustments. Except as otherwise provided herein, in the event of any
change in the outstanding shares of Common Stock by reason of any stock dividend
or split, recapitalization, merger, consolidation, spinoff, combination or
exchange of shares or other corporate change, or any distributions to common
shareholders other than regular cash dividends, the Company shall make such
substitution or adjustment, if any, as it reasonably deems to be equitable, as
to the number or kind of shares of Common Stock subject to, or the Option Price
of, the Option under this Agreement.
11. Compliance with Law. Notwithstanding any of the provisions hereof, the
Executive hereby agrees that such Executive shall not exercise the Options, and
that the Company shall not be obligated to issue or transfer any shares to the
Executive hereunder, if the exercise hereof or the issuance or transfer of such
shares shall constitute a violation by the Executive or the Company of any
provisions of any law or regulation of any governmental authority. Any
reasonable determination in this connection by the Company shall be final,
binding and conclusive.
12. Acquisition for Purpose of Investment. The Executive hereby represents
and warrants that any Option Shares acquired pursuant to the exercise of the
Option are acquired for his own account solely for the purpose of investment and
not with a view to, or
4
<PAGE> 5
for sale in connection with, any distribution thereof in violation of the
Securities Act. The Executive hereby acknowledges that the Option Shares have
not been registered under the Securities Act and may be sold or disposed of in
the absence of such registration only pursuant to an exemption from the
registration requirements of the Securities Act. The Company agrees to cause
the Option Shares to be registered, as specified in the Employment Agreement.
13. Employment Agreement Restrictions
(a) The Executive acknowledges that the sale, transfer and
other disposition of any Option Shares acquired pursuant to the exercise of the
Option are subject to restrictions pursuant to the Employment Agreement. The
Executive agrees to the placement on certificates representing any such Option
Shares of a legend (the "Legend"), substantially as set forth below:
"THE SALE, TRANSFER AND OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS AND CONDITIONS OF THE
EMPLOYMENT AGREEMENT DATED AS OF APRIL 1, 1998,
BETWEEN GREAT LAKES CHEMICAL CORPORATION AND
MARK BULRISS."
(b) The Legend shall be removed from any certificates
representing Option Shares acquired pursuant to the exercise of the Option at
such time as the sale, transfer or other disposition of such Option Shares are
no longer subject to the restrictions set forth in the Employment Agreement.
14. Notices. For purposes of this Agreement, all communications provided
for in this Agreement shall be in writing and shall be deemed to be duly given
when delivered or (unless otherwise specified) mailed by United States certified
or registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Mark Bulriss
11425 Barrington Bridge Court
Richmond, Virginia 23233
If to the Company:
Great Lakes Chemical Corporation
One Great Lakes Boulevard
P.O. Box 2200
West Lafayette, Indiana 47906-0200
5
<PAGE> 6
Attention: General Counsel
or to such other address as any party may have furnished to the other in writing
in accordance herewith.
15. Binding Effect. Subject to Section 8 hereof, this Agreement shall be
binding upon the heirs, executors, administrators and successors of the parties
hereto.
16. No Right to Employment. Neither the granting of this Option, nor the
exercised thereof, shall be construed as granting Executive any right to
continued employment by the Company or its subsidiaries. Subject to the terms
of the Employment Agreement, the right of the Company and its subsidiaries to
terminate Executive's employment at nay time and for any reason, is specifically
reserved.
17. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware without regard to its rules
relating to conflicts of laws.
18. Entire Agreement. This Agreement and the relevant provisions of the
Employment Agreement comprise the entire agreement between the parties hereto
with respect to the subject matter hereof, and may not be modified or terminated
orally.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
GREAT LAKES CHEMICAL CORPORATION
By: ___________________________________
Name: Martin M. Hale
Title: Chairman of the Board
___________________________________
Mark Bulriss
6
<PAGE> 7
FORM OF
GREAT LAKES CHEMICAL CORPORATION
RESTRICTED STOCK AGREEMENT
THIS AGREEMENT, made as of the (Spin-off Date), by and between Great Lakes
Chemical Corporation (the "Company") and Mark Bulriss (the "Executive").
W I T N E S E T H:
WHEREAS, the Company and the Executive have entered into an Employment
Agreement dated as of April 1, 1998 (the "Employment Agreement"), pursuant to
which the Executive will serve as President and Chief Executive Officer of the
Company; and
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company to enter into this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. Grant of Restricted Shares. The Company hereby grants to the Executive
an aggregate of 50,000 shares (the "Restricted Shares") of the Company's Common
Stock, par value $1.00 per share ("Common Stock"), subject to the terms and
conditions set forth in this Agreement. At such time as any portion of the
Restricted Shares cease to be subject to forfeiture pursuant to Paragraph 4(b),
such shares shall cease to constitute Restricted Shares hereunder.
2. Issuance of Stock. As of the date hereof, the Company will cause to be
issued in the name of the Executive a stock certificate or certificates
representing the Restricted Shares (less any shares withheld in satisfaction of
tax liabilities associated with the immediate vesting of certain Restricted
Shares, as set forth below). Such shares shall be issued as Restricted Shares
and will be held in the custody of the Company or its designee for the account
of the Executive, pending delivery to the Executive as set forth in Paragraph 5
below.
3. Dividends and Voting. After issuance in the name of the Executive of
Restricted Shares and so long as the Restricted Shares are outstanding, the
Executive shall have the right to vote and receive dividends with respect to
such shares, provided that any dividends paid with respect to such shares during
the period such shares remain subject to forfeiture pursuant to Paragraph 4(b)
shall be held in the custody of the Company or its
<PAGE> 8
designee for the account of the Executive and shall be subject to the same
restrictions as apply to the Restricted Shares. Without limiting the foregoing,
(a) in the event of a forfeiture of Restricted Shares, such dividends shall be
subject to the same restrictions as apply to the Restricted Shares. Without
limiting the foregoing, (a) in the event of a forfeiture of Restricted Shares,
such dividends shall be forfeited in the same proportion as such shares and (b)
when the Executive or his estate becomes entitled to a stock certificate
pursuant to Paragraph 5, the Executive or his estate shall be entitled to
receive all retained dividends less any dividends that may have been forfeited.
4. Restrictions.
(a) Nontransferability. While the Restricted shares remain
subject to forfeiture pursuant to Paragraph 4(b), neither the Restricted Shares
nor the right to vote or receive dividends thereon may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of by the Executive, or
subject to any debts or liabilities of the Executive; provided, however, that
Restricted Shares owned for at least six months may be transferred for the
purpose of exercising all or any portion of stock option awards granted to the
Executive, in which case a number of shares of Common Stock received upon
exercise of the Option equal to the number of Restricted Shares so transferred
shall thereafter be treated as Restricted Shares hereunder. Following such time
as any of the Restricted Shares cease to be subject to forfeiture pursuant to
Paragraph 4(b), the sale, transfer and other disposition of such shares shall
remain subject to the restrictions set forth in the Employment Agreement.
(b) Forfeiture; Lapse of Restrictions. Except as otherwise
provided in this Agreement, the Restricted Shares issued hereunder shall be
immediately forfeited and returned to the Company and all rights of the
Executive thereto shall terminate without further obligation a on the part of
the Company if the Executive's employment with the Company terminates.
Notwithstanding the foregoing, (1) forfeiture restrictions with respect to fifty
percent (50%) of the Restricted Shares (i.e., 25,000 shares) shall lapse as of
the date hereof and, provided the Executive is then in employment with the
Company, forfeiture restrictions with respect to twenty-five percent (25%) of
the Restricted Shares (i.e., 12,500 shares) shall lapse on each of the first and
second anniversaries of the Effective Date (as defined in the Employment
Agreement); (2) in the event that a, prior to the otherwise applicable vesting
date, (w) the Executive's employment with the Company terminates due to death or
Disability (as defined in the Employment Agreement), (x) the Executive's
employment is terminated by the Company other than for Cause (as defined in the
Employment Agreement, (y) the Executive's employment is terminated by the
Executive for Good Reason (as defined in the Employment Agreement), or (z) a
Change in Control (as defined in the Great Lakes Chemical Corporation 1993
Employee Stock Compensation Plan (the "1993 Plan")), shall occur while the
Executive is then in employment with the Company, the restrictions set forth in
this Paragraph 4 shall lapse and the Restricted Shares shall no longer be
subject to forfeiture.
5. Delivery of Certificates. At such time as any of the Restricted Shares
cease to be subject to the forfeiture restrictions set forth in Paragraph 4(b),
a stock certificate representing such number of shares of Common Stock (less any
shares withheld
2
<PAGE> 9
in satisfaction of tax withholding obligations, as set forth below), free of the
restrictions contained herein (other than those referred to in the last sentence
of Paragraph 4(a), if then applicable, and those imposed by law), will be issued
to the Executive or his estate as soon as practicable thereafter. In the event
the restrictions referred to in the last sentence of Paragraph 4(a) are then
applicable, the Executive agrees to the placement on certificates representing
any such shares of Common Stock of a legend (the "Legend") substantially as set
forth below:
"THE SALE, TRANSFER AND OTHER DISPOSITION
OF THE SECURITIES REPRESENTED BY THIS CER-
TIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF THE EMPLOYMENT AGREEMENT
DATED AS OF APRIL 1, 1998, BETWEEN GREAT
LAKES CHEMICAL CORPORATION AND MARK
BULRISS."
In the event such shares of Common Stock have not yet been registered under the
Securities Act of 1993, as amended (the "Securities Act"), as specified in the
Employment Agreement, the Executive also agrees to the inclusion on the Legend
of the following:
"THE SECURITIES REPRESENTED BY THIS CERTIFI-
CATE HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED,
SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGIS-
TRATION STATEMENT OR PURSUANT TO AN EX-
EMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIRE-
MENTS OF THE SECURITIES ACT."
The Company shall take all actions necessary to remove the applicable
portions of the Legend at the time as such restrictions set forth in the
Employment Agreement cease to apply to such shares of Common Stock or such
shares are registered under the Securities Act, as the case may be. The Company
may postpone any such delivery until it receives satisfactory proof that the
issuance or transfer of such shares of Common Stock will not violate any of the
provisions of the Securities Act or the Securities Exchange of 1934, as amended,
any rules or regulations of the Securities and Exchange Commission promulgated
thereunder, or the requirements of applicable state law relating to
authorization, issuance or sale of securities, or until there has been
compliance with the provisions of such acts or rules.
6. Payment of Taxes. At the time Restricted Shares cease to be subject to
the forfeiture restrictions set forth in Paragraph 4(b) (or, if applicable, upon
the making of an election by the Executive under Section 83(b) of the Internal
Revenue Code of 1986, as amended), the Executive shall pay to the Company such
amount as the Company deems necessary to satisfy its obligation to withhold
Federal, state or local income or other taxes
3
<PAGE> 10
incurred by reason of such Restricted Shares ceasing to be subject to such
forfeiture restrictions (or by reason of such election) by tendering to the
Company a check in the amount of such withholding or by electing to have
withheld from the shares of Common Stock otherwise to be delivered to the
Executive (or with respect to which the Executive has made such election) shares
of Common Stock having a Fair Market Value (as defined in the 1993 Plan) equal
to the amount of such tax withholding.
7. Company; Executive. (a) The term "Company" as used in this Agreement
with reference to employment shall include the Company and its subsidiaries, as
appropriate.
(b) Whenever the word "Executive" is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to apply to the beneficiaries, the executors, the administrators, or the person
or persons to whom the Restricted Shares may be transferred by will or by the
laws of descent and distribution, the word "Executive" shall be deemed to
include such person or persons.
8. Purchase for Purpose of Investment. The Executive hereby represents and
warrants that any Restricted Shares awarded hereunder are acquired for his own
account solely for the purpose of investment and not with a view to, or for sale
in connection with, any distribution thereof in violation of the Securities Act.
The Executive hereby acknowledges that the Restricted Shares have not been
registered under the Securities Act and may be sold or disposed of in the
absence of such registration only pursuant to an exemption from the registration
requirements of the Securities Act. The Company agrees to cause the Restricted
Shares to be registered, as specified in the Employment Agreement.
9. Notices. For purposes of this Agreement, all communications provided
for in this Agreement shall be in writing and shall be deemed to be duly given
when delivered or (unless otherwise specified) mailed by United States certified
or registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Mark Bulriss
[Address]
If, to the Company:
Great Lakes Chemical Corporation
[Address]
or to such other address as any party may have furnished to the other in writing
in accordance herewith.
10. Neither the granting of the Restricted Shares nor the vesting thereof
shall be construed as granting Executive any right to continued employment by
the Company.
4
<PAGE> 11
Subject to the terms of the Employment Agreement, the right of the Company to
terminate Executive's employment at any time and for any reason, is specifically
reserved.
11. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware, without regard to its rules
relating to conflicts of laws.
12. Entire Agreement. This Agreement and the relevant provisions of the
Employment Agreement comprise the entire agreement between the parties hereto
with respect to the subject matter hereof, and may not be modified or terminated
orally.
IN WITNESS WHEREOF, the parties hereto have executive this Agreement as of
the day and year first above written.
GREAT LAKES CHEMICAL CORPORATION
By: ______________________________________
__________________________________________
Mark Bulriss
5
<PAGE> 1
EXHIBIT 10(b) i
June 2, 1998
Louis M. Maresca, Ph.D.
5563 Woodmill Circle
Brecksville, OH 44141
Dear Lou:
I am delighted to offer you the position of Executive Vice President of Great
Lakes Chemical Corporation. Your bi-weekly base salary will be $10,962. As
Executive Vice President, you will report directly to me. Your office will be
located in Indianapolis, Indiana.
In addition to your base salary, you will be eligible to participate in the
Company's Management Incentive Compensation Plan (MICP). Your targeted
participation level in this bonus program will be established at 60% of your
annual base salary. Your 1998 eligibility will be prorated based upon your
starting date. With regard to future payouts, your bonus award could be higher
or lower than the targeted percentage, based upon the performance of the
Corporation as well as your own individual performance level.
In addition, I will nominate you at the next regularly scheduled meeting of the
Great Lakes Board of Directors following the commencement of your employment, to
receive the option to purchase thirty thousand (30,000) shares of Great Lakes
common stock under the terms and conditions of the 1993 Employee Stock
Compensation Plan, as amended. A Plan Document explaining the provisions of the
Plan will be provided during your first week of employment.
In addition, you will be eligible to receive, pending Board approval, 5,000
restricted stock units (no dividends or voting rights until fully vested).
Twenty-five hundred (2,500) of these units will "cliff" vest three (3) years
from the date of grant and the remaining twenty-five hundred (2,500) will
"cliff" vest five (5) years from the date of grant.
You will be eligible to participate in the Company's benefit programs associated
with full-time employment (according to the terms and conditions contained in
such programs). In addition, you will be eligible to participate in five (5)
executive benefit programs:
o Supplemental Retirement Plan
o Supplemental Savings Plan
o Deferred Compensation Plan
o Supplemental Long Term Disability Plan
o Split Dollar Life Insurance
Various coverages are subject to applicable medical requirements. Again, the
details of all the above benefit plans will be provided to you during your first
week of employment.
You will be provided a Change In Control (CIC) Agreement at 3x's your annualized
earnings and you will be eligible under our Executive Severance Plan according
to the terms and conditions contained within that Plan.
You will be entitled to four (4) weeks of vacation per year with a pro-rated
amount applied to the remainder of 1998. You will be eligible to participate in
the executive automobile program.
<PAGE> 2
Great Lakes Chemical Corporation utilizes Prudential Relocation Services. Upon
acceptance of this offer, you will be eligible for our Executive Relocation
Package, and Prudential will be contacted to begin the relocation process.
As with all of our employment relationships, your employment status will be that
of an "at will" employee of Great Lakes Chemical Corporation.
In addition, Great Lakes has a Drug and Alcohol Awareness and Testing Policy by
which you will be expected to abide. This offer is conditional upon your
submitting to a pre-employment drug test. You may contact Symea Black in our
Human Resources group at (765) 497-6028 in order to schedule an appointment. The
Pre-employment Consent for Drug Testing and Record Release form must be signed
and the original returned to the Human Resources Department. A self addressed
envelope is enclosed for your convenience in order to return this form.
As you know, I want very much to accelerate this process. Based upon our
previous discussions, you have a great feel for what I need to do and how I need
to get there. Therefore, I am anxious to get your acceptance prior to 8:00 a.m.
(CST) June 10, 1998, at which time this offer will expire. Please reach me at
(765) 497-6240 today. If you cannot reach me, please call Mark Esselman at
(765) 497-6156 during the day, or at (765) 447-1666 at home during the evenings.
Of course, I would like to invite Nancy and your family to Indianapolis so you
can get a feel for what I hope will be your next home.
Lou, I believe that this organization can do great things. I believe just as
firmly that your contributions can add to and accelerate this process. I know
you can, and will, make great contributions and have some fun in your career
adventure at Great Lakes. I want you to join me in these endeavors!
Now, lets get together and get some wins!
Regards,
Mark P. Bulriss
President & CEO
<PAGE> 1
EXHIBIT 10(b) ii
July 2, 1998
Mr. Hugh Morton
20 Beacon Hill Drive
Saratoga Springs, NY 12866
Dear Hugh:
I am delighted to offer you the position of Executive Vice President for Great
Lakes Chemical Corporation and President of the Polymer Additives Business Unit.
This position will have leadership and "P&L" responsibilities for this business
unit on a global basis. Your bi-weekly base salary will be $11,923. As
Executive Vice President/President of Polymer Additives, you will report
directly to me. Upon approval of the Board of Directors, you will be named an
Officer of the company. Your office will be located in Indianapolis, Indiana.
In addition to your base salary, you will be eligible to participate in the
Company's Management Incentive Compensation Plan (MICP). Your targeted
participation level in this bonus program will be established at 60% of your
annual base salary. Your 1998 eligibility will be prorated based upon your
starting date. With regard to future payouts, your bonus award could be higher
or lower than the targeted percentage, based upon the performance of the
Corporation as well as your own individual performance level.
In addition, you will receive 35,000 restricted stock units (no dividends or
voting rights until fully vested) based on the attached Agreement for Restricted
Stock Unit Grant to Hugh Morton. Five thousand (5,000) of these units will
"cliff" vest three (3) years from the date of grant; five thousand (5,000) more
of these units will "cliff" vest four (4) years from the date of the grant; and
another five thousand (5,000) will "cliff" vest five (5) years from the date of
grant. An additional ten thousand (10,000) shares will "cliff" vest ten (10)
years from the date of grant. Finally, an additional ten thousand (10,000)
shares will "cliff" vest on the latter of (i) the twelfth anniversary of the
grant date or (ii) at retirement pursuant to the Company's retirement policies,
as amended from time to time.
Further, upon your hire date, you will be granted a stock option for thirty
thousand (30,000) shares of Great Lakes common stock under the terms and
conditions of the 1993 Employee Stock Compensation Plan, as amended. A Plan
Document explaining the provisions of the Plan will be provided during your
first week of employment. I will also nominate you, based upon individual
performance levels, contributions and results, for additional shares of Great
Lakes common stock under the 1993 Plan (and/or successor Plans) on an annual
basis.
You will be eligible to participate in the Company's benefit programs associated
with full-time employment (according to the terms and conditions contained in
such programs). In addition, you will be eligible to participate in five (5)
executive benefit programs:
o Supplemental Retirement Plan
o Supplemental Savings Plan
o Deferred Compensation Plan
o Supplemental Long Term Disability Plan
o Split Dollar Life Insurance
Various coverages are subject to applicable medical requirements. Again, the
details of all the above benefit plans will be provided to you during your first
week of employment.
<PAGE> 2
You will be provided a Change In Control (CIC) Agreement at 3x's your annualized
earnings and you will be eligible under our Executive Severance Plan according
to the terms and conditions contained within that Plan. However, if prior to
your eligibility to participate in the Severance Plan, you terminate employment
under conditions that would, if you were a participant, give rise to
compensation pursuant to the terms of the Severance Plan, you will be provided
with compensation and benefits equivalent to the compensation and benefits that
you would have been paid and provided under the Severance Plan had you been a
participant.
You will be entitled to four (4) weeks of vacation per year with a pro-rated
amount applied to the remainder of 1998. You will be eligible to participate in
our Executive Automobile Policy. The maximum company contribution towards the
purchase of an automobile is currently $55,000. A copy of the policy will be
provided to you.
Great Lakes Chemical Corporation utilizes Prudential Relocation Services. Upon
acceptance of this offer, you will be eligible for our Executive Relocation
Package, and Prudential will be contacted to begin the relocation process.
As with all of our employment relationships, your employment status will be that
of an "at will" employee of Great Lakes Chemical Corporation.
In addition, Great Lakes has a Drug and Alcohol Awareness and Testing Policy by
which you will be expected to abide. This offer is conditional upon your
submitting to a pre-employment drug test. You may contact Symea Black in our
Human Resources group at (765) 497-6028 in order to schedule an appointment. The
Pre-employment Consent for Drug Testing and Record Release form must be signed
and the original returned to the Human Resources Department. A self addressed
envelope is enclosed for your convenience in order to return this form.
Hugh, I believe that this organization can do great things. I believe just as
firmly that your contributions can add to and accelerate this process. I know
you can, and will, make great contributions and have some fun in your career
adventure at Great Lakes. I want you to join me in these endeavors!
Now, lets get together and get some wins!
Regards,
Mark P. Bulriss
President & CEO
<PAGE> 1
EXHIBIT 10(b) iii
July 14, 1998
Mr. Mark Tomkins
11504 Longview Landing Drive
Richmond, VA 23233
Dear Mark:
I am delighted to offer you the position of Vice President, Chief Financial
Officer of Great Lakes Chemical Corporation. Your bi-weekly base salary will be
$9,615.38. In addition to your base salary, you will receive a one time sign on
bonus of $40,000.00. As Vice President, Chief Financial Officer, you will
report directly to me. Upon approval of the Board of Directors, you will be
named an Officer of the company. Your office will be located in Indianapolis,
Indiana.
In addition to your base salary, you will be eligible to participate in the
Company's Management Incentive Compensation Plan (MICP). Your targeted
participation level in this bonus program will be established at 50% of your
annual base salary. Your 1998 eligibility will be prorated based upon your
starting date and will be guaranteed at the 50% level for the remainder of the
year. With regard to future payouts, your bonus award could be higher or lower
than the targeted percentage, based upon the performance of the Corporation as
well as your own individual performance level.
In addition, I will nominate you at the next regularly scheduled meeting of the
Great Lakes Board of Directors following the commencement of your employment, to
receive the option to purchase twenty thousand (20,000) shares of Great Lakes
common stock under the terms and conditions of the 1993 Employee Stock
Compensation Plan, as amended. A Plan Document explaining the provisions of the
Plan will be provided during your first week of employment.
You will be eligible to participate in the Company's benefit programs associated
with full-time employment (according to the terms and conditions contained in
such programs). In addition, you will be eligible to participate in four (4)
executive benefit programs:
o Supplemental Retirement Plan
o Supplemental Savings Plan
o Deferred Compensation Plan
o Supplemental Long Term Disability Plan
Various coverages are subject to applicable medical requirements. Again, the
details of all the above benefit plans will be provided to you during your first
week of employment.
You will be provided a Change In Control (CIC) Agreement at 3x's your annualized
earnings and you will be eligible under our Executive Severance Plan according
to the terms and conditions contained within that Plan.
You will be entitled to four (4) weeks of vacation per year with a pro-rated
amount applied to the remainder of 1998.
You will be eligible to participate in our Executive Automobile Policy. The
maximum company contribution towards the purchase of an automobile is currently
$37,500.
<PAGE> 2
Great Lakes Chemical Corporation utilizes Prudential Relocation Services. Upon
acceptance of this offer, you will be eligible for our Executive Relocation
Package, and Prudential will be contacted to begin the relocation process.
As with all of our employment relationships, your employment status will be that
of an "at will" employee of Great Lakes Chemical Corporation.
In addition, Great Lakes has a Drug and Alcohol Awareness and Testing Policy by
which you will be expected to abide. This offer is conditional upon your
submitting to a pre-employment drug test. You may contact Symea Black in our
Human Resources group at (765) 497-6028 in order to schedule an appointment. The
Pre-employment Consent for Drug Testing and Record Release form must be signed
and the original returned to the Human Resources Department. A self addressed
envelope is enclosed for your convenience in order to return this form.
As you know, I want very much to accelerate this process. Based upon our
previous discussions, you have a great feel for what I need to do and how I need
to get there. Therefore, I am anxious to get your acceptance prior to 8:00 a.m.
(CST) July 17, 1998, at which time this offer will expire. Please reach me at
(765) 497-6240 today. If you cannot reach me, please call Mark Esselman at
(765) 497-6156 during the day, or at (765) 447-1666 at home during the evenings.
Of course, I would like to invite you and your family to Indianapolis so you can
get a feel for what I hope will be your next home.
For your information, I have a CEC (Central Executive Committee) planned for
July 20 and 21 in West Lafayette. It would be important that you make plans to
attend this meeting.
In addition, I fully understand the importance of not creating ill will with
your current employer. Thus, it is important that you do provide them with an
appropriate "notice period" of two (2) weeks. However, in order to begin our
efforts quickly and decisively, I am looking for you to begin employment at
Great Lakes no later than August 3, 1998. Of course, in the unlikely scenario
in which Allied might request immediate departure upon your "notice," I would be
happy to move up your start date with Great Lakes as appropriate.
Mark, I believe that this organization can do great things. I believe just as
firmly that your contributions can add to and accelerate this process. I know
you can, and will, make great contributions and have some fun in your career
adventure at Great Lakes. I want you to join me in these endeavors!
Now, lets get together and get some wins!
Regards,
Mark P. Bulriss
President & CEO
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET, STATEMENT OF INCOME, AND STATEMENT OF CASHFLOW AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 472,029
<SECURITIES> 0
<RECEIVABLES> 314,850
<ALLOWANCES> 5,777
<INVENTORY> 302,388
<CURRENT-ASSETS> 1,110,762
<PP&E> 1,219,658
<DEPRECIATION> 527,353
<TOTAL-ASSETS> 2,128,542
<CURRENT-LIABILITIES> 420,252
<BONDS> 511,678
0
0
<COMMON> 72,716
<OTHER-SE> 1,015,734
<TOTAL-LIABILITY-AND-EQUITY> 2,128,542
<SALES> 736,680
<TOTAL-REVENUES> 752,959
<CGS> 527,946
<TOTAL-COSTS> 643,984
<OTHER-EXPENSES> 9,884
<LOSS-PROVISION> 455
<INTEREST-EXPENSE> 13,547
<INCOME-PRETAX> 85,089
<INCOME-TAX> 29,900
<INCOME-CONTINUING> 55,189
<DISCONTINUED> 32,571
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 87,760
<EPS-PRIMARY> 1.49
<EPS-DILUTED> 1.48
</TABLE>
