LUBRIZOL CORP, 10-K405, 1996-03-28

LUBRIZOL CORP
10-K405, 1996-03-28
MISCELLANEOUS CHEMICAL PRODUCTS

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<PAGE> 1

FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1995

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934

For the transition period from ..... to .....

Commission file number 1-5263
THE LUBRIZOL CORPORATION
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
OHIO 34-0367600
(State of incorporation) (I.R.S. Employer Identification No.)
</TABLE>

29400 Lakeland Boulevard
Wickliffe, Ohio 44092-2298
(Address of principal executive officers, including zip code)

Registrant's telephone number, including area code: (216) 943-4200
Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
Name of each exchange
Title of each class on which registered
- ------------------------------- ------------------------
<S> <C>
Common Shares without par value New York Stock Exchange
Common Share purchase rights New York Stock Exchange
Preferred Share purchase rights New York Stock Exchange
</TABLE>

Securities registered pursuant to section 12(g) of the Act: None

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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

Aggregate market value (on basis of closing sale price) of voting
stock held by nonaffiliates as of March 4, 1996: $1,851,637,950

Number of the registrant's Common Shares, without par value,
outstanding as of March 4, 1996: 62,493,759

Documents Incorporated by Reference
-----------------------------------

Portions of the registrant's 1995 Annual Report to its shareholders
(Incorporated into Part I and II of this Form 10-K)

Portions of the registrant's Proxy Statement dated March 13, 1996
(Incorporated into Part III of this Form 10-K)
<PAGE> 2
PART I
------

ITEM 1. BUSINESS

The Lubrizol Corporation was organized under the laws of Ohio
in 1928. The company began business as a compounder of special-purpose
lubricants, and in the early 1930's was among the first to commence research in
the field of lubricant additives. Today, the company is a full service
supplier of performance chemicals to diverse markets worldwide. These
specialty chemical products are created through the application of advanced
chemical and mechanical technologies to enhance the performance, quality and
value of the customer products in which they are used. The company develops,
produces and sells specialty additive systems for gasoline and diesel engine
lubricating oils, for automatic transmission fluids and for gear oils and
marine and tractor lubricants. The company also supplies specialty products
for industrial lubricants and functional fluids, fuel additives and diversified
specialty chemical products.

Prior to December 1, 1992, the company had a separately
reportable Agribusiness segment. That segment developed, produced and marketed
planting seeds and specialty vegetable oils, and also conducted strategic
biotechnology research and development. In 1992, the company transferred
substantially all of its Agribusiness segment, other than the specialty
vegetable oil operations, to Mycogen Corporation and to a joint venture formed
with Mycogen. As a result of this and subsequent related transactions, the
company acquired interests in Mycogen and a Mycogen affiliate, which interests
were sold by the company in February 1996. (Please refer to Note 16 to the
Financial Statements which is included in the company's 1995 Annual Report to
its shareholders and is incorporated herein by reference.)

PRINCIPAL PRODUCTS. The company's principal products are
additive systems for gasoline and diesel engine oils, automatic transmission
fluids, gear oils, industrial fluids, metalworking compounds and fuels. The
company also offers other specialty chemical products. Additives for engine
oils accounted for 51% of consolidated revenues in 1995 and 1994, and 50% in
1993. Additives for driveline oils accounted for 24%, 24% and 19% of
consolidated revenues for these respective periods.

Additives improve the lubricants and fuels used in cars,
trucks, buses, off-highway equipment, marine engines and industrial
applications. In lubricants, additives enable oil to withstand a broader range
of temperatures, limit the buildup of sludge and varnish deposits, reduce wear,
inhibit the formation of foam, rust and corrosion, and retard oxidation. In
fuels, additives help maintain efficient operation of the fuel delivery system,
help control deposits and corrosion, improve combustion and assist in
preventing decomposition during storage.
<PAGE> 3
Due to the variety in the properties and applications of oils,
a number of different chemicals are used to formulate the company's products.
Each additive combination is designed to fit the characteristics of the
customer's base oil and the level of performance specified. Engine oils for
passenger cars contain a combination of chemical additives which usually
includes one or more detergents, dispersants, oxidation inhibitors and wear
inhibitors, pour point depressants and viscosity improvers. Other chemical
combinations are used in heavy duty engine oils for trucks and off-highway
equipment and in formulations for gear oils, automatic transmission fluids,
industrial oils, metalworking fluids, and gasoline, diesel and residual fuels.

COMPETITION. The chemical additive field is highly
competitive in terms of price, product performance and customer service. The
company's principal competitors, both in the United States and overseas, are
three major petroleum companies and one chemical company. The petroleum
companies produce lubricant and fuel additives for their own use, and also sell
additives to others. These competing companies are also customers of the
company. Excluding viscosity improvers, management believes, based on volume
sold, that the company is the largest supplier to the petroleum industry of
performance chemicals for lubricants.

CUSTOMERS. In the United States, the company markets its
additive products through its own sales organization. The company's additive
customers consist primarily of oil refiners and independent oil blenders and
are located in more than 100 countries. Approximately 60% of the company's
sales are made to customers outside of North America. The company's ten
largest customers, most of which are international oil companies and a number
of which are groups of affiliated entities, accounted for approximately 44% of
consolidated sales in 1995. Although the loss of any one of these customers
could have a material adverse effect on the company's business, each is made up
of a number of separate business units that the company believes make
independent purchasing decisions with respect to chemical additives. Sales to
Mobil Corporation and its affiliates accounted for 10% of consolidated sales in
1995, and no customer exceeded 10% of consolidated sales in either 1994 or
1993.

RAW MATERIALS. The company utilizes a broad variety of
chemical raw materials in the manufacture of its additives and uses oil in
processing and blending additives. These materials are obtainable from several
sources, and for the most part are derived from petroleum. Unstable political
and economic conditions in the Middle East have caused and may continue to
cause the cost of raw materials to fluctuate significantly; however, the
availability of raw materials to the company has not been significantly
affected when these conditions occurred. The company expects raw materials to
be available in adequate quantities during 1996.

-2-
<PAGE> 4
RESEARCH, TESTING AND DEVELOPMENT. The company has
historically emphasized research and has developed a large percentage of the
additives it manufactures and sells. Technological developments in the design
of engines and other automotive equipment, combined with rising demands for
environmental protection and fuel economy, require increasingly sophisticated
chemical additives to meet industry performance standards. The frequency of
changes in industry performance standards compresses time cycles for new
product development and affects the company's technical spending patterns.

Research and development expenditures were $104.9 million in
1995, $90.7 million in 1994 and $88.5 million in 1993. These amounts were
equivalent to 6.3%, 5.7% and 5.8% of the respective revenues for such years.
These amounts include expenditures for the performance evaluation of additive
developments in engines and other types of mechanical equipment as well as
expenditures for the development of specialty chemicals for industrial
applications. In addition, $74.7 million, $74.8 million and $83.0 million was
spent in 1995, 1994 and 1993, respectively, for technical service activities,
principally for evaluation in mechanical equipment of specific lubricant
formulations designed for the needs of petroleum industry customers throughout
the world.

The company has two research facilities at Wickliffe, Ohio,
one of which is principally for lubricant additive research and the other for
research in the field of other specialty chemicals. The company also maintains
a mechanical testing laboratory at Wickliffe, equipped with a variety of
gasoline and diesel engines and other mechanical equipment to evaluate the
performance of additives for lubricants and fuels. The company has similar
mechanical testing laboratories in England and Japan and, in addition, makes
extensive use of independent contract research firms. Extensive field testing
is also conducted through various arrangements with fleet operators and others.

Liaison offices in Detroit, Michigan; Hazelwood, England;
Hamburg, Germany; Tokyo, Japan; and Paris, France maintain close contact with
the principal automotive and equipment manufacturers of the world and keep the
company abreast of the performance requirements for its products in the face of
changing technologies. These liaison activities also serve as contacts for
cooperative development and evaluation of products for future applications.
Contacts with the automotive and equipment industry are important so the
company may have the necessary direction and lead time to develop products for
use in engines, transmissions, gear sets, and other areas of equipment that
require lubricants of advanced design.

PATENTS. The company owns certain United States patents
relating to lubricant and fuel additives, lubricants, chemical compositions and
processes, and protective coating materials and processes. It also owns
similar patents in foreign countries. While such domestic and foreign patents
expire from time to time, the company continues to apply for and obtain patent
protection on an ongoing basis. Although the company believes that, in the
aggregate, its patents constitute an important asset, it does not regard its
business as being materially dependent upon any single patent or any group of
related patents.

-3-
<PAGE> 5
The company has filed claims against Exxon Corporation and its
affiliates ("Exxon") alleging infringements by Exxon of certain of the
company's patents. These suits are pending in the United States, Canada,
France and the United Kingdom, and are at various stages. The international
suits allege infringement of patents that correspond to a United States patent
admitted as valid by Exxon in a settlement in 1988. In the suit in Canada, a
determination of liability has been made by the courts against Exxon and in
favor of the company, and the case has been returned to the trial court for an
assessment of damages. In another patent infringement suit, instituted by
Exxon in the United States, liability and damage determinations, previously
made in favor of Exxon and against the company, have been overturned by an
appeals court. For further information regarding these cases, refer to Note 18
to the Financial Statements which is included in the company's 1995 Annual
Report to its shareholders and is incorporated herein by reference.

ENVIRONMENTAL MATTERS. The company is subject to federal,
state and local laws and regulations designed to protect the environment and
limit manufacturing wastes and emissions. The company believes that as a
general matter its policies, practices and procedures are properly designed to
prevent unreasonable risk of environmental damage and the consequent financial
liability to the company. Compliance with the environmental laws and
regulations requires continuing management effort and expenditures by the
company. Capital expenditures for environmental projects approximated $37
million in 1995, and over the past three years have averaged 16% of annual
capital spending. Management believes that the cost of complying with
environmental laws and regulations will not have a material affect on the
earnings, liquidity or competitive position of the company.

The company is engaged in the handling, manufacture, use,
transportation and disposal of substances that are classified as hazardous or
toxic by one or more regulatory agencies. The company believes that its
handling, manufacture, use, transportation and disposal of such substances
generally have been in accord with environmental laws and regulations.

Among other environmental laws, the company is subject to the
federal "Superfund" law, under which the company has been designated as a
"potentially responsible party" that may be liable for cleanup costs associated
with various waste sites, some of which are on the U.S. Environmental
Protection Agency Superfund priority list. The company's experience,
consistent with what it believes to be the experience of others in similar
cases, is that Superfund site liability tends to be apportioned among parties
based upon contribution of materials to the Superfund site. Accordingly, the
company measures its liability and carries out its financial reporting
responsibilities with respect to Superfund sites based upon this standard, even
though Superfund site liability is technically joint and several in nature.
The company views the expense of remedial cleanup as a part of its product
cost, and accrues for estimated environmental liabilities with charges to cost
of sales. Management considers its environmental accrual to be adequate to
provide for its portion of costs for all known environmental matters, including
Superfund sites. Based upon consideration of currently available information,
management does not believe liabilities for environmental matters will have a
material adverse affect on the company's financial position, operating results
or liquidity.

-4-
<PAGE> 6
General
- -------

EMPLOYEES. At December 31, 1995, the company and its
whollyowned subsidiaries had 4,601 employees of which approximately 64% were
in the U.S.

INTERNATIONAL OPERATIONS. Financial information with respect
to domestic and foreign operations is contained in Note 13 to the Financial
Statements which is included in the company's 1995 Annual Report to its
shareholders and is incorporated herein by reference.

The company supplies its additive customers abroad from
overseas manufacturing plants and through export from the United States. Sales
and technical service offices are maintained in more than 30 countries outside
the United States. As a result, the company is subject to business risks
inherent in non-U.S. activities, including political uncertainty, import and
export limitations, exchange controls and currency fluctuations. The company
believes risks related to its foreign operations are mitigated due to the
political and economic stability of the countries in which its largest foreign
operations are located.

While changes in the U.S. dollar value of foreign currencies
will affect earnings from time to time, the longer term economic effect of
these changes should not be significant given the company's net asset exposure,
currency mix and pricing flexibility. Generally, the income statement effect
of changes in the U.S. dollar value of foreign currencies is partially or
wholly offset by the company's ability to make corresponding price changes in
local currency. The company's consolidated net income will generally benefit
as foreign currencies increase in value compared to the U.S. dollar and will
generally decline as foreign currencies decrease in value.

ITEM 2. PROPERTIES

The general offices of the company are located in Wickliffe,
Ohio. The company has various leases for general office space primarily
located in Eastlake, Ohio; Houston, Texas; and London, England. The company
owns three additive manufacturing plants in the United States; one located in
the Cleveland, Ohio area, at Painesville, and two near Houston, Texas, at Deer
Park and Bayport. Outside the United States, the company owns additive
manufacturing plants in Australia, Brazil, Canada, England, France (three
locations), Japan, South Africa and Singapore. All of these plants, other than
Singapore, are owned in fee. In Singapore, the company owns the plant but
leases the land on which the plant is located. The company owns in fee
mechanical testing facilities in Wickliffe, Ohio; Hazelwood, England; and
Atsugi, Japan. The company also owns an oilseed crushing and refining plant
located in Culbertson, Montana; a manufacturing plant in Germany that
manufactures performance chemical additives for the coatings industry; a
manufacturing plant in Atlanta, Georgia, that manufactures additive injection
equipment and additive blend controllers; and a manufacturing plant in
Newmarket, Ontario, Canada, that manufactures emission control systems for
industrial applications.

-5-
<PAGE> 7
Additive manufacturing plants in India, Mexico, Saudi Arabia
and Venezuela are owned and operated by joint venture companies licensed by
Lubrizol. Lubrizol's ownership of each of these companies ranges from 40% to
49%.

The company has entered into long-term contracts for its
exclusive use of major marine terminal facilities at the Port of Houston,
Texas. In addition, Lubrizol has leases for storage facilities in Australia,
Chile, Ecuador, Finland, France, Holland, Singapore, Spain, South Africa,
Sweden, and Turkey; East Liverpool, Ohio; Los Angeles, California; St. Paul,
Minnesota; Bayonne, New Jersey; and Tacoma, Washington. In some cases, the
ownership or leasing of such facilities is through certain of its subsidiaries
or affiliates.

The company initiated a manufacturing rationalization plan
during 1993. The plan will be substantially complete near the end of 1996 and,
through consolidation, is expected to result in a one-third reduction in the
number of units used to produce intermediate products. See Note 17 to the
Financial Statements included in the company's 1995 Annual Report to its
shareholders and is incorporated herein by reference.

Management continues to maintain a capital expenditure program
to support the company's operations and believes that the company's facilities
are adequate for its present operations and for the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS

The company is a party in a case brought by Exxon Corporation
and its affiliates, Exxon Chemical Patents, Inc. and Exxon Research &
Engineering Company, in the Southern District of Texas, Houston Division on
September 19, 1989. In December 1992, the trial jury rendered a verdict that
the company willfully infringed an Exxon patent pertaining to an oil soluble
copper additive component. In early 1993, the court prohibited the company
from making or selling any additive packages in the United States that
contained this component and awarded Exxon $18.1 million for attorneys' fees.
In November 1993, another jury in the same case awarded Exxon $48 million in
damages, and in February 1994, the trial court judge doubled the damages amount
and awarded prejudgment interest, court costs and additional attorney's fees
for a total judgment of $129 million. The findings of infringement and
validity of the Exxon patent as well as the $129 million judgment were appealed
to the United States Court of Appeals for the Federal Circuit in Washington,
D.C., which has jurisdiction over all patent cases. On September 1, 1995, the
Appellate Court overturned the jury verdict that the company infringed the
Exxon patent and entered judgment in favor of the company as a matter of law.
The ruling also vacated the injunction against the company and the $129 million
judgment. On February 23, 1996, the same court in Washington, D.C., denied
Exxon's request for a rehearing. The company expects Exxon to file for Supreme
Court review but does not know whether the Supreme Court would grant any such
review.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to the vote of the security holders
during the three months ended December 31, 1995.

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<PAGE> 8
Executive Officers of the Registrant
- ------------------------------------

The following sets forth the name, age, recent business experience and
certain other information relative to each person who is an executive officer
of the company as of March 1, 1996.

<TABLE>
<CAPTION>
Name Business Experience
---- -------------------
<S> <C>
L. E. Coleman Dr. Coleman, age 65, has been Chairman of the Board since
1982. From 1978 to December 31, 1995, he was Chief
Executive Officer.

W. G. Bares Mr. Bares, age 54, became Chief Executive Officer on
January 1, 1996 and has been President since 1982.
From 1987 through 1995, he was also Chief Operating Officer.

R. A. Andreas Mr. Andreas, age 51, has been Vice President and Chief
Financial Officer since June 1990.

J. W. Bauer Mr. Bauer, age 42, became Vice President and General Counsel
in April 1992, after serving as General Counsel from
August 1991. From 1989 to 1991, he was Corporate Counsel -
Litigation.

J. G. Bulger Mr. Bulger, age 60, holds the position of Vice President -
Sales and was named Vice President in September 1993.
From 1989 to 1993, he was Senior Vice President - Sales for
Lubrizol Petroleum Chemicals Company.

S. A. Di Biase Dr. Di Biase, age 43, is Vice President - Research and
Development and has been Vice President since
September 1993. From 1990 to September 1993, he was Director
of Strategic Research.

G. R. Hill Dr. Hill, age 54, became Senior Vice President - Business
Development in October 1993 and was named Senior Vice
President in 1988.

J. E. Hodge Mr. Hodge, age 53, is Vice President - Operations and was
named Vice President in September 1993. During 1989
through 1993, he was General Manager - Deer Park/Bayport
Plants.
</TABLE>

-7-
<PAGE> 9
<TABLE>
<CAPTION>
Name Business Experience
---- -------------------
<S> <C>
K. H. Hopping Mr. Hopping, age 49, has been Vice President and Secretary
of the Corporation since April 1991.

W. R. Jones Mr. Jones, age 53, has been Treasurer since 1980.

S. F. Kirk Mr. Kirk, age 46, holds the position of Vice President -
Segment Management and was named Vice President in
September 1993. From January 1991 to 1993, he was Senior
Vice President - Marketing and Technology for Lubrizol
Petroleum Chemicals Company.

Y. Le Couedic Mr. Le Couedic, age 48, is Vice President - Management
Information Systems and became Vice President in
September 1993. From 1991 to 1993, he was Division Head -
Corporate R&D - Administrative Services. From September
1989 to August 1991 he was Administrative Manager for the
Hazelwood, U.K. Laboratory.

G. P. Lieb Mr. Lieb, age 43, was named Controller - Accounting and
Financial Reporting in November 1993, and was named
Principal Accounting Officer in January 1994. From October
1991 to October 1993, he was Administrative Manager for the
Hazelwood, U.K. Laboratory. During 1989 to October 1991,
Mr. Lieb was Manager of Accounting and Financial Reporting.

M. W. Meister Mr. Meister, age 41, is Vice President - Human Resources
and was named Vice President in April 1993. From November
1992 to April 1993, he was General Manager - Human
Resources. During 1989 to 1992, he was Director - Human
Resources for Agrigenetics Company.

D. A. Muskat Mr. Muskat, age 56, was named Operations Manager in August
1993. From September 1989 to August 1993 he was Vice
President - Operations for Lubrizol Petroleum Chemicals
Company.
</TABLE>

-8-
<PAGE> 10
<TABLE>
<CAPTION>
Name Business Experience
---- -------------------
<S> <C>
L. M. Reynolds Ms. Reynolds, age 35, was named Assistant Secretary in
April 1995, and has been Counsel since February 1991.

J. A. Thomas Mr. Thomas, age 57, is Vice President - Corporate Planning
and Development and was named Vice President in April
1994. From December 1990 to April 1994, he was General
Manager - Sales for Asia Pacific, Latin America and the
Middle East.
</TABLE>

All executive officers serve at the pleasure of the Board.

-9-
<PAGE> 11
PART II
-------

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.

The Common Shares of the company are listed on the New York
Stock Exchange under the symbol LZ. The number of shareholders of record of
Common Shares was 6,246 as of March 4, 1996.

Information relating to the recent price and dividend history
of the company's Common Shares follows:

<TABLE>
<CAPTION>
Common Share Price History
-------------------------- Dividends
1995 1994 Per Common Share
---- ---- ----------------
High Low High Low 1995 1994
---- --- ---- --- ---- ----
<S> <C> <C> <C> <C> <C> <C>
1st quarter $35 1/2 $32 1/2 $38 5/8 $32 1/8 $ .23 $ .22
2nd quarter 36 7/8 34 1/8 36 7/8 33 1/8 .23 .22
3rd quarter 37 3/8 30 36 1/2 29 7/8 .23 .22
4th quarter 33 1/4 25 1/2 34 28 1/2 .24 .23
---- -----

$ .93 $ .89
===== =====
</TABLE>

ITEM 6. SELECTED FINANCIAL DATA.

The summary of selected financial data for each of the last
five years included in the Historical Summary contained on pages 38 and 39 of
the company's 1995 Annual Report to its shareholders is incorporated herein by
reference. Other income (charges) for 1995, 1994 and 1993 includes $38.5
million, $41.2 million and $42.4 million respectively for the gain on sale of
Genentech; in 1995, a charge of $9.5 million for an asset impairment; and in
1993, a special charge of $86.3 million (See Notes 4 and 17 to the Financial
Statements included in the company's 1995 Annual Report to its shareholders).
In addition, the company changed its method of accounting for postretirement
benefits and for income taxes, effective January 1, 1993, to comply with two
newly effective accounting standards, which reduced 1993 net income by $39.4
million.

Total debt reported in the Historical Summary includes the
following amounts classified as long-term at December 31: $194.4 million in
1995, $114.2 million in 1994, $55.3 million in 1993, $23.3 million in 1992 and
$35.0 million in 1991.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

The Management's Discussion and Analysis of Financial Condition
and Results of Operations contained on pages 16 through 22, inclusive, of the
company's 1995 Annual Report to its shareholders is incorporated herein by
reference.

-10-
<PAGE> 12
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The consolidated financial statements of the company and its
subsidiaries, together with the independent auditors' report relating thereto,
contained on pages 22 through 36, inclusive, of the company's 1995 Annual
Report to its shareholders, and the Quarterly Financial Data (Unaudited)
contained on page 37 of such 1995 Annual Report, are incorporated herein by
reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

Not applicable.

PART III
--------

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information contained under the heading "Election of
Directors" on pages 2 to 6, inclusive, of the company's Proxy Statement dated
March 13, 1996, is incorporated herein by reference. Information relative to
executive officers of the company is contained under Part I of this Annual
Report on Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION.

The information relating to executive compensation contained
under the headings "Committees and Compensation of the Board of Directors" on
pages 6 and 7, "Executive Compensation" on pages 10 through 12 (through "Stock
Option Plans"), inclusive, and under "Employee and Executive Officer Benefit
Plans - Pension Plans" and "- Executive Agreements" on pages 16 through 18,
inclusive, of the company's Proxy Statement dated March 13, 1996, is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information relating to security ownership set forth under
the heading "Security Ownership of Directors and Management and Certain
Beneficial Owners" on pages 8 and 9 of the company's Proxy Statement dated
March 13, 1996, is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Not applicable.

-11-
<PAGE> 13
PART IV
-------

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K.

(a) Documents filed as part of this Annual Report:

1. The following consolidated financial
statements of The Lubrizol Corporation and
its subsidiaries, together with the
independent auditors' report relating
thereto, contained on pages 22 through 37,
inclusive, of Lubrizol's 1995 Annual Report
to its shareholders and incorporated herein
by reference:

Independent Auditors' Report

Consolidated Statements of Income for the
years ended December 31, 1995, 1994 and 1993

Consolidated Balance Sheets at December 31,
1995 and 1994

Consolidated Statements of Cash Flows for the
years ended December 31, 1995, 1994 and 1993

Consolidated Statements of Shareholders'
Equity for the years ended December 31, 1995,
1994 and 1993

Notes to Financial Statements

Quarterly Financial Data (Unaudited)

2. Schedules

No financial statement schedules are
required to be filed as part of this
Annual Report.

3. Exhibits

(3)(a) Amended Articles of Incorporation of The
Lubrizol Corporation, as adopted September 23,
1991. (Reference is made to Exhibit (3)(a) to
The Lubrizol Corporation's Annual Report on
Form 10-K for the year ended December 31,
1993, which Exhibit is incorporated herein by
reference.)

(3)(b) Regulations of The Lubrizol Corporation, as
amended effective April 27, 1992. (Reference
is made to Exhibit (3)(b) to The Lubrizol
Corporation's Annual Report on Form 10-K for
the year ended December 31, 1993, which
Exhibit is incorporated herein by reference.)

(4)(a) Amendment to Article Fourth of Amended
Articles of Incorporation. (Reference is made
to Exhibits (3)(a) and (4)(a) to The Lubrizol
Corporation's Annual Report on Form 10-K for
the year ended December 31, 1993, which
Exhibits are incorporated herein by
reference.)

-12-
<PAGE> 14
(4)(b) The company agrees, upon request, to furnish
to the Securities and Exchange Commission
copies of instruments authorizing long-term
debt. No one instrument authorizes debt in
excess of 10% of the total assets of the
company and its subsidiaries on a consolidated
basis.

(4)(c) Rights Agreement between The Lubrizol
Corporation and National City Bank dated
October 6, 1987. (Reference is made to
Exhibit (4)(c) to The Lubrizol Corporation's
Annual Report on Form 10-K for the year ended
December 31, 1993, which Exhibit is
incorporated herein by reference.)

(4)(d) Amendment to Rights Agreement dated October 6,
1987, between The Lubrizol Corporation and
National City Bank, effective October 24,
1988. (Reference is made to Exhibit (4)(d) to
The Lubrizol Corporation's Annual Report on
Form 10-K for the year ended December 31,
1993, which Exhibit is incorporated herein by
reference.)

(4)(e) Special Rights Agreement between The Lubrizol
Corporation and National City Bank dated
October 31, 1988. (Reference is made to
Exhibit (4)(e) to The Lubrizol Corporation's
Annual Report on Form 10-K for the year ended
December 31, 1993, which Exhibit is
incorporated herein by reference.)

(4)(f) Amendment No. 2 to Rights Agreement dated
October 6, 1987, as amended, between The
Lubrizol Corporation and National City Bank,
effective October 28, 1991. (Reference is
made to Exhibit (4)(f) to The Lubrizol
Corporation's Annual Report on Form 10-K for
the year ended December 31, 1993, which
Exhibit is incorporated herein by reference.)

(10)(a)* The Lubrizol Corporation 1985
Employee Stock Option Plan, as
amended. (Reference is made to
Exhibit (10)(b) to The Lubrizol
Corporation's Annual Report on Form
10-K for the year ended December 31,
1993, which Exhibit is incorporated
herein by reference.)

-13-
<PAGE> 15
(10)(b)* The Lubrizol Corporation Amended
Deferred Compensation Plan for
Directors. (Reference is made to
Exhibit (10)(b) to The Lubrizol
Corporation's Annual Report on Form
10-K for the year ended December 31,
1994, which Exhibit is incorporated
herein by reference.)

(10)(c)* Form of Employment Agreement between
The Lubrizol Corporation and certain
of its senior executive officers.
(Reference is made to Exhibit (10)(e)
to The Lubrizol Corporation's Annual
Report on Form 10-K for the year
ended December 31, 1993, which
Exhibit is incorporated herein by
reference.)

(10)(d)* The Lubrizol Corporation Excess
Defined Benefit Plan, as amended.

(10)(e)* The Lubrizol Corporation Excess
Defined Contribution Plan, as amended.

(10)(f)* The Lubrizol Corporation Variable
Award Plan, as amended.

(10)(g)* The Lubrizol Corporation Executive
Death Benefit Plan, as amended.

(10)(h)* The Lubrizol Corporation 1991 Stock
Incentive Plan, as amended.
(Reference is made to Exhibit (10)(l)
to The Lubrizol Corporation's Annual
Report on Form 10-K for the year
ended December 31, 1993, which
Exhibit is incorporated herein by
reference.)

(10)(i)* The Lubrizol Corporation Deferred
Stock Compensation Plan for Outside
Directors, as amended.

(10)(j)* The Lubrizol Corporation Officers'
Supplemental Retirement Plan, as
amended.

(10)(k)* The Lubrizol Corporation
Deferred Compensation Plan
for Officers, as amended.
(Reference is made to Exhibit
(10) to The Lubrizol
Corporation's Quarterly
Report on Form 10-Q for the
quarterly period ended
September 30, 1995, which
Exhibit is incorporated
herein by reference.)

(11) Statement setting forth Computation
of Per Share Earnings.

(12) Computation of Ratio of Earnings to
Fixed Charges.

-14-
<PAGE> 16
(13) The following portions of The
Lubrizol Corporation 1995 Annual
Report to its shareholders:

Pages 16-22 Management's
Discussion and Analysis of
Financial Condition and
Results of Operations

Page 22 Independent Auditors' Report

Page 23 Consolidated Statements of
Income for the years ended
December 31, 1995, 1994 and
1993

Page 24 Consolidated Balance Sheets
at December 31, 1995 and 1994

Page 25 Consolidated Statements of
Cash Flows for the
years ended December 31,
1995, 1994 and 1993

Page 26 Consolidated Statements of
Shareholders' Equity for the
years ended December 31,
1995, 1994 and 1993

Pages 27-36 Notes to Financial
Statements

Page 37 Quarterly Financial Data
(Unaudited)

Pages 38-39 Historical Summary

(21) List of Subsidiaries of The Lubrizol
Corporation.

(23) Consent of Independent Auditors

(27) Financial Data Schedule

*Indicates management contract or compensatory plan or arrangement.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the three
months ended December 31, 1995.

-15-
<PAGE> 17
SIGNATURES

Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on March 25, 1996, on its behalf by the undersigned, thereunto duly authorized.

THE LUBRIZOL CORPORATION

BY /s/ W. G. Bares
--------------------------------------------------
W. G. Bares, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below on March 25, 1996, by the following
persons on behalf of the Registrant and in the capacities indicated.

<TABLE>
<S> <C>
/s/ W. G. Bares President, Chief Executive Officer and Director
- ------------------------------- (Principal Executive Officer)
W. G. Bares

/s/ R. A. Andreas Vice President and Chief Financial Officer
- ------------------------------- (Principal Financial Officer)
R. A. Andreas

/s/ G. P. Lieb Controller, Accounting and Financial Reporting
- ------------------------------- (Principal Accounting Officer)
G. P. Lieb

/s/ L. E. Coleman Director, Chairman of the Board
- -------------------------------
L. E. Coleman

/s/ Edward F. Bell Director
- -------------------------------
Edward F. Bell

/s/ Peggy G. Elliott Director
- -------------------------------
Peggy G. Elliott

/s/ Gordon D. Harnett Director
- -------------------------------
Gordon D. Harnett

/s/ Victoria F. Haynes Director
- -------------------------------
Victoria F. Haynes

/s/ David H. Hoag Director
- ------------------------------
David H. Hoag

/s/ Thomas C. MacAvoy Director
- -------------------------------
Thomas C. MacAvoy

/s/ William P. Madar Director
- -------------------------------
William P. Madar

/s/ Richard A. Miller Director
- -------------------------------
Richard A. Miller

/s/ Ronald A. Mitsch Director
- -------------------------------
Ronald A. Mitsch

/s/ Renold D. Thompson Director
- -------------------------------
Renold D. Thompson

/s/ Karl E. Ware Director
- -------------------------------
Karl E. Ware
</TABLE>
<PAGE> 18

EXHIBIT INDEX
-------------

Exhibits

<TABLE>
<S> <C>
(3)(a) Amended Articles of Incorporation of The Lubrizol Corporation, as adopted September 23, 1991. (Reference is
made to Exhibit (3)(a) to The Lubrizol Corporation's Annual Report on Form 10-K for the year ended December
31, 1993, which Exhibit is incorporated herein by reference.)

(3)(b) Regulations of The Lubrizol Corporation, as amended effective April 27, 1992. (Reference is made to Exhibit
(3)(b) to The Lubrizol Corporation's Annual Report on Form 10-K for the year ended December 31, 1993,
which Exhibit is incorporated herein by reference.)

(4)(a) Amendment to Article Fourth of Amended Articles of Incorporation. (Reference is made to Exhibits (3)(a) and
(4)(a) to The Lubrizol Corporation's Annual Report on Form 10-K for the year ended December 31, 1993,
which Exhibits are incorporated herein by reference.)

(4)(b) The company agrees, upon request, to furnish to the Securities and Exchange Commission copies of instruments
authorizing long-term debt. No one instrument authorizes debt in excess of 10% of the total assets of
the company and its subsidiaries on a consolidated basis.

(4)(c) Rights Agreement between The Lubrizol Corporation and National City Bank dated October 6, 1987. (Reference
is made to Exhibit (4)(c) to The Lubrizol Corporation's Annual Report on Form 10-K for the year ended December
31, 1993, which Exhibit is incorporated herein by reference.)

(4)(d) Amendment to Rights Agreement dated October 6, 1987, between The Lubrizol Corporation and National City Bank,
effective October 24, 1988. (Reference is made to Exhibit (4)(d) to The Lubrizol Corporation's Annual Report
on Form 10-K for the year ended December 31, 1993, which Exhibit is incorporated herein by reference.)

(4)(e) Special Rights Agreement between The Lubrizol Corporation and National City Bank dated October 31, 1988.
(Reference is made to Exhibit (4)(e) to The Lubrizol Corporation's Annual Report on Form 10-K for the year
ended December 31, 1993, which Exhibit is incorporated herein by reference.)

(4)(f) Amendment No. 2 to Rights Agreement dated October 6, 1987, as amended, between The Lubrizol Corporation and
National City Bank, effective October 28, 1991. (Reference is made to Exhibit (4)(f) to The Lubrizol
Corporation's Annual Report on Form 10-K for the year ended December 31, 1993, which Exhibit is incorporated
herein by reference.)

(4)(g) Amendment No. 1 to Special Rights Agreement dated October 31, 1988, between The Lubrizol Corporation and
National City Bank, effective October 28, 1991. (Reference is made to Exhibit (4)(g) to The Lubrizol
Corporation's Annual Report on Form 10-K for the year ended December 31, 1993, which Exhibit is incorporated
herein by reference.)
</TABLE>
<PAGE> 19
<TABLE>
<S> <C>
(10)(a)* The Lubrizol Corporation 1985 Employee Stock Option Plan, as amended. (Reference is made to Exhibit (10)(b)
to The Lubrizol Corporation's Annual Report on Form 10-K for the year ended December 31, 1993, which
Exhibit is incorporated herein by reference.)

(10)(b)* The Lubrizol Corporation Amended Deferred Compensation Plan for Directors. (Reference is made to Exhibit
(10)(b) to The Lubrizol Corporation's Annual Report on Form 10-K for the year ended December 31, 1994,
which Exhibit is incorporated herein by reference.)

(10)(c)* Form of Employment Agreement between The Lubrizol Corporation and certain of its senior executive officers.
(Reference is made to Exhibit (10)(e) to The Lubrizol Corporation's Annual Report on Form 10-K for the
year ended December 31, 1993, which Exhibit is incorporated herein by reference.)

(10)(d)* The Lubrizol Corporation Excess Defined Benefit Plan, as amended.

(10)(e)* The Lubrizol Corporation Excess Defined Contribution Plan, as amended.

(10)(f)* The Lubrizol Corporation Variable Award Plan, as amended.

(10)(g)* The Lubrizol Corporation Executive Death Benefit Plan, as amended.

(10)(h)* The Lubrizol Corporation 1991 Stock Incentive Plan, as amended. (Reference is made to Exhibit (10)(l) to
The Lubrizol Corporation's Annual Report on Form 10-K for the year ended December 31, 1993, which Exhibit
is incorporated herein by reference.)

(10)(i)* The Lubrizol Corporation Deferred Stock Compensation Plan for Outside Directors, as amended.

(10)(j)* The Lubrizol Corporation Officers' Supplemental Retirement Plan, as amended.

(10)(k)* The Lubrizol Corporation Deferred Compensation Plan for Officers, as amended. (Reference is made to Exhibit
(10) to The Lubrizol Corporation's Quarterly Report on Form 10-Q for the quarterly period ended September 30,
1995, which Exhibit is incorporated herein by reference.)

(11) Statement setting forth Computation of Per Share Earnings.

(12) Computation of Ratio of Earnings to Fixed Charges.

(13) The following portions of The Lubrizol Corporation 1995 Annual Report to its shareholders:

Pages 16-22 Management's Discussion and Analysis of Financial Condition and Results of Operations

Page 22 Independent Auditors' Report

Page 23 Consolidated Statements of Income for the years ended December 31, 1995, 1994 and 1993

Page 24 Consolidated Balance Sheets at December 31, 1995 and 1994

Page 25 Consolidated Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993
</TABLE>
<PAGE> 20
<TABLE>
<S> <C>
Page 26 Consolidated Statements of Shareholders' Equity for the years ended
December 31, 1995, 1994 and 1993

Pages 27-36 Notes to Financial Statements

Page 37 Quarterly Financial Data (Unaudited)

Pages 38-39 Historical Summary

(21) List of Subsidiaries of The Lubrizol Corporation.

(23) Consent of Independent Auditors

(27) Financial Data Schedule
</TABLE>

<PAGE> 1

Exhibit 10(d)

THE LUBRIZOL CORPORATION
EXCESS DEFINED BENEFIT PLAN
(As Amended)

The Lubrizol Corporation hereby establishes, effective as of January 1,
1986, The Lubrizol Corporation Excess Defined Benefit Plan (the "Plan") for the
purpose of providing supplemental benefits to certain employees, as permitted by
Section 3(36) of the Employee Retirement Income Security Act of 1974.

ARTICLE I

DEFINITIONS AND CONSTRUCTION

1.1 DEFINITIONS. For the purposes hereof, the following words and
phrases shall have the meanings indicated, unless a different meaning is plainly
required by the context:

(a) CODE. the term "Code" shall mean the Internal Revenue Code
as amended from time to time. Reference to a section of the Code shall include
such section and any comparable section or sections of any future legislation
that amends, supplements, or supersedes such section.

(b) COMPANY. The term "Company" shall mean The Lubrizol
Corporation, an Ohio corporation, its corporate successors and the surviving
corporation resulting from any merger of The Lubrizol Corporation with any other
corporation or corporations.

(c) LUBRIZOL PENSION PLAN. The term "Lubrizol Pension Plan"
shall mean The Lubrizol Corporation Revised Pension Plan as the same shall be in
effect on the date of a Participant's retirement, death, or other termination of
employment.

(d) PARTICIPANT. Effective June 22, 1992, the term
"Participant" shall mean any person employed by the Company who is listed on
Appendix A attached hereto, or who is designated by the Board of Directors as an
officer for the purposes of Section 16 of the Securities Exchange Act of 1934,
or whose benefits under the Lubrizol Pension Plan are limited by the application
of Section 401(a)(17) of the Internal Revenue Code of 1986, as amended.

(e) PLAN. The term "Plan" shall mean the excess defined
benefit pension plan as set forth herein, together with all amendments hereto,
which Plan shall be called "The Lubrizol Corporation Excess Defined Benefit
Plan."

(f) TRUST. The term "Trust" shall mean The Lubrizol
Corporation Excess Defined Benefit Plan Trust established pursuant to the Trust
Agreement.

(g) TRUST AGREEMENT. The term "Trust Agreement" shall mean
The Lubrizol Corporation Excess Defined Benefit Plan Trust Agreement.
<PAGE> 2

1.2. ADDITIONAL DEFINITIONS. All other words and phrases used herein
shall have the meanings given them in the Lubrizol Pension Plan, unless a
different meaning is clearly required by the context.

ARTICLE II

SUPPLEMENTAL PENSION BENEFIT

2.1 ELIGIBILITY. Effective July 25, 1994, a Participant who retires,
dies, or otherwise terminates his employment with the Company and its
subsidiaries and

(a) whose benefits under the Lubrizol Pension Plan are
limited by the provisions of Section 401(a)(17) or 415 of the Code,

(b) who either was a Participant on January 1, 1989 or had
attained age 55 on January 1, 1989, and thereafter became a
Participant, and whose benefits under the Lubrizol Pension Plan are
curtailed due to the revision of the pension benefit formula,
effective as of January 1, 1989, to comply with the
requirements of the Tax Reform Act of 1986, as amended, or

(c) who participated in The Lubrizol Corporation Deferred
Compensation Plan for Officers (which was adopted effective July 25,
1994)

shall be eligible for a supplemental pension benefit determined in accordance
with the provisions of Section 2.2.

2.2 AMOUNT. Effective July 25, 1994, subject to the provisions of
Article III, the monthly supplemental pension benefit payable to an eligible
Participant shall be an amount which when added to the monthly pension payable
to such Participant under the Lubrizol Pension Plan (prior to any reduction
applicable to an optional method of payment) equals the monthly pension benefit
which would have been payable under the Lubrizol Pension Plan (prior to any
reduction applicable to an optional method of payment and adjusted for any
amount payable under The Lubrizol Corporation Excess Defined Contribution Plan
which is attributable to The Lubrizol Corporation Employees' Profit-Sharing Plan
and which would have affected the benefit that the Participant would have
received under the Lubrizol Pension Plan had it been payable from The Lubrizol
Corporation Employees' Profit-Sharing Plan) if the limitations of Section
401(a)(17) and 415 of the Code were not in effect and, (if he is a Participant
described in Section 2.1(b)), his benefits had not been curtailed due to the
revision of the Lubrizol Pension Plan effective as of January 1989, to comply
with the provisions of the Tax Reform Act of 1986, as amended, and, (if he is a
Participant described in Section 2.1(c)), if he did not participate in The
Lubrizol Corporation Deferred Compensation Plan for Officers (which was adopted
effective July 25, 1994).

2.3 PAYMENT. The terms of payment of the supplemental pension benefit
shall be identical to those specified in the Lubrizol Pension Plan for the type
of benefit the Participant receives under the Lubrizol Pension Plan.

2.4 VESTING. Each Participant as of December 31, 1993, shall be 100
percent vested in his supplemental pension benefit determined in accordance with
the provisions of Section 2.2.

<PAGE> 3

Each new Participant after December 31, 1993, shall be vested in his
supplemental pension benefit under this Plan as determined in accordance with
the vesting provisions of the Lubrizol Pension Plan.

ARTICLE III

PAYMENT OF BENEFITS

3.1 PAYMENT TO PARTICIPANT. (Effective November 27, 1995)

(a) Each Participant who terminates employment with the
Company and its related corporations shall receive payment of his
supplemental pension benefit under the Plan determined as of his date
of termination of employment in the standard form of benefit of a
monthly retirement benefit commencing within 30 days following
employment termination and payable to such Participant for his
lifetime following such employment termination, with the continuance
to his Beneficiary of such amount after his death for the remainder,
if any, of the 120-month term that commenced with the date as of which
the first payment of such monthly benefit is made, and with any such
monthly benefits remaining unpaid upon the death of the survivor of
the Participant and his Beneficiary to be made to the estate of
such survivor.

(b) Participants may instead elect within a 60 day period
commencing 90 days prior to employment termination to receive the
actuarial equivalent of the standard form of benefit determined under
paragraph (a), on the date of employment termination, in accordance
with any one of the following options:

(i) for Participants hired prior to February 1,
1984, a single lump-sum payment payable within 30 days
following employment termination;

(ii) for Participants hired prior to February 1,
1984, a single lump-sum payment payable within 30 days
following the end of the calendar year in which the
Participant's employment terminated. Interest on the lump-sum
deferral shall accrue and be paid with the lump-sum; such
interest to be computed at the PBGC interest rate in effect
of the date of employment termination.

(iii) a reduced monthly retirement benefit
commencing within 30 days following employment termination
and payable to such Participant for his lifetime following
such employment termination, with the continuance of a
monthly benefit equal to fifty percent (50%) of such reduced
amount after his death to the Participant's Beneficiary
during the lifetime of the Beneficiary, provided that such
Beneficiary is living at the time of such Participant's
employment termination and survives such Participant;

(iv) a reduced monthly retirement benefit
commencing within 30 days following employment termination
and payable to such Participant during his lifetime following
his termination, with the continuance of a monthly
benefit

<PAGE> 4

equal to one hundred percent (100%) of such reduced amount after
his death to the Participant's Beneficiary during the lifetime
of the Beneficiary, provided such Beneficiary is living at the
time of such Participant's termination and survives such
Participant.

Such optional forms of payment described above shall be calculated
using the same actuarial factors and interest rates used under The Lubrizol
Corporation Pension Plan (or its successor) as in effect on the date of
employment termination; provided, however, that for any person who was a
Participant as of December 31, 1993, who elects to have his supplemental pension
benefit paid in a single lump-sum payment, the interest rate used to discount
the portion of the Participant's supplemental pension benefit which represents
his accrued benefit as of December 31, 1993, shall be the arithmetic average of
the 7-day compound yield rates for the six full calendar months prior to the
month of termination as published in Donoghue's Tax-Free MONEY FUND AVERAGE
which is reported weekly in BARRON'S; provided further that such rate with
respect to any month shall be the rate reported in the first issue of BARRON'S
published during such month.

Notwithstanding the foregoing provisions of the Plan to the contrary,
if the present actuarial value of any retirement benefit or survivor benefit
under the Plan to any person, determined as described above, is less than
$25,000, such benefit shall be paid in a single lump-sum payment to such person
within 30 days following employment termination.

3.2 PAYMENT IN THE EVENT OF DEATH PRIOR TO COMMENCEMENT OF
DISTRIBUTION. If a Participant dies prior to commencement of benefits under the
Plan, his surviving spouse, if any, shall be eligible for a survivor benefit
which is equal to one-half of the reduced monthly benefit the Participant would
have received under the Plan if the Participant had retired on the day before
his death and had elected to receive his benefit under the Lubrizol Pension Plan
in a 50 percent joint and survivor annuity form. In making the determinations
and reductions required in this Section 3.2, the Company shall apply the
assumptions then in use under the Lubrizol Pension Plan. For purposes hereof, a
surviving spouse shall only be eligible for a benefit under this Section 3.2, if
such spouse had been married to the deceased Participant for at least one year
as of the date of the Participant's death.

3.3 SPECIAL FORM OF BENEFIT FOR E. VICTOR LUOMA. Notwithstanding the
first sentence of Section 3.1, E. Victor Luoma may elect prior to his retirement
or other termination of employment to receive payment of his supplemental
pension benefit under the Plan in the form of a single sum amount, determined
and payable in accordance with the second and third sentences of Section 3.1.

3.4 LUMP SUM FORM OF BENEFIT FOR ROGER Y. K. HSU. Effective January
1, 1996, notwithstanding the provisions of Section 3.1(b), Roger Y. K. Hsu
shall receive payment of his supplemental pension benefit under the Plan in
the form of a single sum amount.

<PAGE> 5

ARTICLE IV

ADMINISTRATION

The Company shall be responsible for the general administration of the
Plan, for carrying out the provisions hereof, and for making, or causing the
Trust to make, any required supplemental benefit payments. The Company shall
have all such powers as may be necessary to carry out the provisions of the
Plan, including the power to determine all questions relating to eligibility for
and the amount of any supplemental pension benefit and all questions pertaining
to claims for benefits and procedures for claim review; to resolve all other
questions arising under the Plan, including any questions of construction; and
to take such further action as the Company shall deem advisable in the
administration of the Plan. The Company may delegate any of its powers,
authorities, or responsibilities for the operation and administration of the
Plan to any person or committee so designated in writing by it and may employ
such attorneys, agents, and accountants as it may deem necessary or advisable to
assist it in carrying out its duties hereunder. The actions taken and the
decisions made by the Company hereunder shall be final and binding upon all
interested parties.

ARTICLE V

AMENDMENT AND TERMINATION

The Company reserves the right to amend or terminate the Plan in whole
or in part at any time and to suspend operation of the Plan, in whole or in
part, at any time, by resolution or written action of its Board of Directors or
by action of a committee to which such authority has been delegated by the Board
of Directors; provided, however, that no amendment shall result in the
forfeiture or reduction of the interest of any Participant or person claiming
under or through any one or more of them pursuant to the Plan. Any amendment of
the Plan shall be in writing and signed by authorized individuals.

ARTICLE VI

MISCELLANEOUS

6.1 NON-ALIENATION OF RETIREMENT RIGHTS OR BENEFITS. No Participant
shall encumber or dispose of his right to receive any payments hereunder, which
payments or the right thereto are expressly declared to be non-assignable and
non-transferable. If a Participant attempts to assign, transfer, alienate or
encumber his right to receive any payment hereunder or permits the same to be
subject to alienation, garnishment, attachment. execution, or levy of any kind,
then thereafter during the life of such Participant, and also during any period
in which any Participant is incapable in the judgment of the Company of
attending to his financial affairs, any payments which the Company is required
to make hereunder may be made, in the discretion of the Company, directly to
such Participant or to any other person for his use or benefit or that of his
dependents, if any, including any person furnishing goods or services to or for
his use or benefit or the use or benefit of his dependents, if any. Each such
payment may be made without the intervention of a guardian, the receipt of the
payee shall constitute a complete acquittance to the Company with respect
thereto, and the Company shall have no responsibility for the proper allocation
thereof.
<PAGE> 6

6.2 PLAN NON-CONTRACTUAL. Nothing herein contained shall be construed
as a commitment or agreement on the part of any person employed by the Company
to continue his employment with the Company, and nothing herein contained shall
be construed as a commitment on the part of the Company to continue the
employment or the annual rate of compensation of any such person for any period,
and all Participants shall remain subject to discharge to the same extent as if
the Plan had never been established.

6.3 TRUST. In order to provide a source of payment for its obligations
under the Plan, the Company has established the Trust, the terms of which are
governed by the Trust Agreement.

6.4 INTEREST OF A PARTICIPANT. Subject to the provisions of the Trust
Agreement, the obligation of the Company under the Plan to provide a Participant
with a supplemental pension benefit constitutes the unsecured promise of the
Company to make payments as provided herein, and no person shall have any
interest in, or a lien or prior claim upon, any property of the Company.

6.5 CONTROLLING STATUS. No Participant shall be eligible for a benefit
under the Plan unless such Participant is a Participant on the date of his
retirement, death, or other termination of employment.

6.6 CLAIMS OF OTHER PERSONS. The provisions of the Plan shall in no
event be construed as giving any person, firm or corporation any legal or
equitable right as against the Company, its officers, employees, or directors,
except any such rights as are specifically provided for in the plan or are
hereafter created in accordance with the terms and provisions of the Plan.

6.7 SEVERABILITY. The invalidity or unenforceability of any particular
provision of the Plan shall not affect any other provision hereof, and the Plan
shall be construed in all respects as if such invalid or unenforceable provision
were omitted herefrom.

6.8 GOVERNING LAW. The provisions of the Plan shall be governed and
construed in accordance with the laws of the State of Ohio.

<PAGE> 7

APPENDIX A
TO
THE LUBRIZOL CORPORATION
EXCESS DEFINED BENEFIT PLAN

PARTICIPANTS 1 EFFECTIVE DATE
- ------------- --------------

1. L. E. Coleman December 31, 1986
2. W. G. Bares December 31, 1986
3. G. R. Hill December 31, 1986
4. W. R. Jones December 31, 1986
5. R. A. Andreas December 31, 1986
6. J. R. Ahern April 1, 1990
7. K. H. Hopping April 21, 1991
8. J. W. Bauer April 27, 1992
9. D. A. Muskat April 27, 1992
10. J. G. Bulger June 22, 1992
11. S. F. Kirk April 26, 1993
12. Y. Le Couedic April 26, 1993
13. J. E. Hodge April 26, 1993
14. M. W. Meister April 26, 1993
15. S. A. Di Biase April 26, 1993
16. G. P. Lieb April 25, 1994
17. J. A. Thomas April 25, 1994
18. L. M. Reynolds April 24, 1995

FORMER PARTICIPANTS 2
- --------------------

1. P. L. Krug (R)
2. W. T. Beargie (R)
3. W. D. Manning (R)
4. R. W. Scher (R)
5. J. P. Arzul (D)
6. J. R. Cooper (R)
7. J. I. Rue (R)
8. R. J. Senz (T)
9. E. V. Luoma (R)
10. R. Y. K. Hsu (R)

- --------
1 This listing of Participants is limited to those Participants who are also
officers for purposes of Section 16 of the Securities Exchange Act of 1934.
2 R = Retired, D = Deceased, T = Terminated.

<PAGE> 1
Exhibit 10(e)

THE LUBRIZOL CORPORATION
EXCESS DEFINED CONTRIBUTION PLAN
(As Amended)

The Lubrizol Corporation hereby establishes, effective as of December
31, 1986, The Lubrizol Corporation Excess Defined Contribution Plan (the "Plan")
for the purpose of supplementing the benefits of certain employees, as permitted
by Section 3(36) of the Employee Retirement Income Security Act of 1974.

ARTICLE I

DEFINITIONS

1.1 DEFINITIONS. For the purposes hereof, the following words and
phrases shall have the meanings indicated, unless a different meaning is plainly
required by the context:

(a) BENEFICIARY. The term "Beneficiary" shall mean the person
or persons who shall be designated by a Participant to receive
distribution of such Participant's interest under the Plan in the
event such Participant dies before full distribution of his
interest.

(b) CODE. The term "Code" shall mean the Internal Revenue Code
as amended from time to time. Reference to a section of the Code shall
include such section and any comparable section or sections of any
future legislation that amends, supplements, or supersedes such
section.

(c) COMPANY. Effective December 30, 1994, the term "Company"
shall mean The Lubrizol Corporation, an Ohio corporation, its
corporate successors and the surviving corporation resulting from any
merger of The Lubrizol Corporation with any other corporation or
corporations, and any subsidiaries of The Lubrizol Corporation which
adopt the Plan.

(d) FUND. The term "Fund" shall mean each separate investment
fund established and maintained under the Trust Agreement.

(e) LUBRIZOL PROFIT-SHARING PLAN. The term "Lubrizol Profit-
Sharing Plan" shall mean The Lubrizol Corporation Employees'
Profit-Sharing Plan as the same shall be in effect on the date of a
Participant's retirement, death, or other termination of
employment.

(f) PARTICIPANT. Effective September 30, 1994, The term
"Participant" shall mean any person employed by the Company who is
listed on Appendix A attached hereto, or who is designated by the
Board of Directors as an officer for the purposes of Section 16 of the
Securities Exchange Act of 1934, or whose benefits under the
Profit-Sharing Plan are limited by the application of Section
401(a)(17) of the Internal Revenue Code of 1986, as amended.
<PAGE> 2

(g) PLAN. The term "Plan" shall mean the excess defined
contribution retirement plan as set forth herein, together with all
amendments hereto, which Plan shall be called "The Lubrizol
Corporation Excess Defined Contribution Plan."

(h) PLAN YEAR. The term "Plan Year" shall mean the calendar
year.

(i) SUPPLEMENTAL COMPANY CONTRIBUTIONS. The term
"Supplemental Company Contributions" shall mean the contributions made
by the Company under the Plan in accordance with the
provisions of Section 2.2.

(j) TRUST AGREEMENT. The term "Trust Agreement" shall mean
The Lubrizol Corporation Excess Defined Contribution Plan Trust
Agreement.

(k) TRUST ASSETS. The term "Trust Assets" shall mean all
property held by the Trustee pursuant to the Trust Agreement.

(l) TRUSTEE. The term "Trustee" shall mean the trustee of The
Lubrizol Corporation Excess Defined Contribution Trust.

(m) VALUATION DATE. The term "Valuation Date" shall mean the
last day of each Plan Year and any other date as may be agreed upon by
the Company and the Trustee.

(n) SEPARATE ACCOUNTS. The term "Separate Accounts" shall mean
each account established on behalf of a Participant under the Plan and
credited with Supplemental Company Contributions in accordance with
the provisions of Section 2.3.

(o) LUBRIZOL DEFERRED COMPENSATION PLAN. Effective July 1,
1994, the term "Lubrizol Deferred Compensation Plan" shall mean The
Lubrizol Corporation Deferred Compensation Plan for Officers (which
was adopted effective July 1, 1994), as shall be in effect on the date
of the Participant's retirement, death, or other termination of
employment.

1.2 ADDITIONAL DEFINITIONS. All other words and phrases used herein
shall have the meanings given them in the Lubrizol Profit-Sharing Plan, unless a
different meaning is clearly required by the context.

ARTICLE II

SUPPLEMENTAL CONTRIBUTIONS

2.1 ELIGIBILITY. Effective September 30, 1994, a Participant whose
benefits under the Lubrizol Profit-Sharing Plan are limited with respect to any
Plan Year by Section 401(a)(17) or 415 of the Code, or who participated in the
Lubrizol Deferred Compensation Plan, shall be eligible to have contributions
made with respect to him under the Plan in accordance with the provisions of
this Article II.

2.2 SUPPLEMENTAL COMPANY CONTRIBUTIONS. Effective September 30, 1994,
in the event that Company contributions under the Lubrizol Profit-Sharing Plan
with respect to a Participant are limited for any Plan Year due to the
provisions of Section 401(a)(17) or 415 of

<PAGE> 3

the Code, or due to the Participant's participation in the Lubrizol
Deferred Compensation Plan, the amounts by which such contributions are limited
shall be credited under the Plan by the Company and shall be designated as
Supplemental Company Contributions.

2.3 ALLOCATION OF CONTRIBUTIONS. Effective September 30, 1994,
Supplemental Company Contributions shall be allocated among the Separate
Accounts of the Participants on whose behalf such contributions are made.

2.4 ADMINISTRATION OF SEPARATE ACCOUNTS. Effective September 30, 1994,
each Separate Account to which contributions under Sections 2.2 and 2.3 are
credited and allocated shall be credited monthly with the net monthly increase
experienced by the General Fund of the Lubrizol Profit-Sharing Plan.

ARTICLE III

DISTRIBUTION

3.1 VESTING. Each Participant as of December 31, 1993, shall be 100
percent vested in the value of his Separate Accounts. Each new Participant after
December 31, 1993, shall be vested in the value of his Separate Accounts under
this Plan as determined in accordance with the vesting provisions of the
underlying qualified plans.

3.2 DISTRIBUTION. (Effective November 27, 1995)

(a) Each Participant who terminates employment with the
Company and its related corporations shall receive payment of the
balance in his Separate Account in the standard form of payment of a
single lump-sum payment payable within 30 days following
employment termination;

(b) Participants may instead elect within a 60 day period
commencing 90 days prior to employment termination to receive the
balance of his Separate Account in any one of the following payment
options:

(i) a single lump-sum payment payable within 30
days following the calendar year in which the Participant's
employment terminated. Interest shall accrue and be paid with
the lump-sum; such interest to be computed at the PBGC
interest rate in effect of the date of employment
termination.

(ii) annual installments of up to ten payments, the
first of which shall be paid within 30 days of the
Participant's employment termination, and subsequent
installments of which shall be paid on the anniversary date of
the payment of the first installment. Such installments shall
be determined by dividing the value of the Participant's
Separate Account (determined in the same manner as under the
Lubrizol Profit-Sharing Plan by the number of installments to
be paid and adjusting for interest based on the PBGC interest
rate in effect on the date of employment termination.
Installments after the first installment shall include such
interest which accrues during the 12-month period occurring
since the date the prior installment was paid.
<PAGE> 4

Notwithstanding the foregoing provisions of the Plan to the contrary,
if the present value of the Separate Account is less than $25,000, such benefit
shall be paid in a single lump-sum payment to such person within 30 days
following employment termination.

3.3 DISTRIBUTION IN THE EVENT OF DEATH. Effective September 30, 1994,
in the event of the death of a Participant prior to distribution in full of his
interest under the Plan, his Beneficiary shall receive distribution of such
interest. In the event of death of a Participant prior to making an election for
benefits, such Beneficiary shall receive distribution of such interest as soon
as practicable after such Participant's death in the form elected by such
Beneficiary pursuant to Section 3.2. The Beneficiary under this Section 3.3
shall be the person designated as the Participant's beneficiary under the
Lubrizol Profit-Sharing Plan. If no Beneficiary survives such Participant or if
no Beneficiary has been designated by such Participant, the estate of such
Participant shall be the Beneficiary and receive distribution thereof. If any
Beneficiary dies after becoming entitled to receive distribution hereunder and
before such distribution is made in full, and if no other person or persons have
been designated to receive the balance of such distribution upon the happening
of such contingency, the estate of such deceased Beneficiary shall become the
Beneficiary as to such balance.

ARTICLE IV

ADMINISTRATION

The Company shall be responsible for the general administration of the
Plan, for carrying out the provisions hereof, and for making any required
supplemental benefit payments. The Company shall have all such powers as may be
necessary to carry out the provisions of the Plan, including the power to
determine all questions relating to eligibility for and the amount of any
supplemental retirement benefits and all questions pertaining to claims for
benefits and procedures for claim review; to resolve all other questions arising
under the Plan, including any questions of construction; and to take such
further action as the Company shall deem advisable in the administration of the
Plan. The Company may delegate any of its powers, authorities, or
responsibilities for the operation and administration of the Plan to any person
or committee so designated in writing by it and may employ such attorneys,
agents, and accountants as it may deem necessary or advisable to assist it in
carrying out its duties hereunder. The actions taken and the decisions made by
the Company hereunder shall be final and binding upon all interested parties.

ARTICLE V

AMENDMENT AND TERMINATION

<PAGE> 5

any one or more of them pursuant to the Plan. Any amendment of the Plan shall
be in writing and signed by authorized individuals.

ARTICLE VI

MISCELLANEOUS

6.1 NON-ALIENATION OF RETIREMENT RIGHTS OR BENEFITS. No Participant
shall encumber or dispose of his right to receive any payments hereunder, which
payments or the right thereto are expressly declared to be non-assignable and
non-transferable. If a Participant or Beneficiary attempts to assign, transfer,
alienate or encumber his right to receive any payment under the Plan or permits
the same to be subject to alienation, garnishment, attachment, execution, or
levy of any kind, then thereafter during the life of such Participant or
Beneficiary and also during any period in which any Participant or Beneficiary
is incapable in the judgment of the Company of attending to his financial
affairs, any payments which the Company is required to make hereunder may be
made, in the discretion of the Company, directly to such Participant or
Beneficiary or to any other person for his use or benefit or that of his
dependents, if any, including any person furnishing goods or services to or for
his use or benefit or the use or benefit of his dependents, if any. Each such
payment may be made without the intervention of a guardian, the receipt of the
payee shall constitute a complete acquittance to the Company with respect
thereto, and the Company shall have no responsibility for the proper allocation
thereof.

6.3 TRUST. In order to provide a source of payment for its obligations
under the Plan, the Company has established The Lubrizol Corporation Excess
Defined Contribution Plan Trust.

6.4 INTEREST OF A PARTICIPANT. Subject to the provisions of the Trust
Agreement, the obligation of the Company under the Plan to provide a Participant
or Beneficiary with supplemental retirement benefits merely constitutes the
unsecured promise of the Company to make payments as provided herein, and no
person shall have any interest in, or a lien or prior claim upon, any property
of the Company.

6.6 CLAIMS OF OTHER PERSONS. The provisions of the Plan shall in no
event be construed as giving any person, firm or corporation any legal or
equitable right as against the Company, its officers, employees, or directors,
except any such rights as are specifically provided for in the Plan or are
hereafter created in accordance with the terms and provisions of the Plan.
<PAGE> 6

6.8 GOVERNING LAW. The provisions of the Plan shall be governed and
construed in accordance with the laws of the State of Ohio.

<PAGE> 7

APPENDIX A
TO
THE LUBRIZOL CORPORATION
EXCESS DEFINED CONTRIBUTION PLAN

PARTICIPANTS 1 EFFECTIVE DATE
- ------------- --------------

FORMER PARTICIPANTS 2
- --------------------
1. P. L. Krug (R)
2. W. T. Beargie (R)
3. W. D. Manning (R)
4. R. W. Scher (R)
5. J. P. Arzul (D)
6. J. R. Cooper (R)
7. J. I. Rue (R)
8. R. J. Senz (T)
9. E. V. Luoma (R)
10. R. Y. K. Hsu (R)

<PAGE> 1

Exhibit (10)(f)

THE LUBRIZOL CORPORATION
VARIABLE AWARD PLAN
(As Amended)

INTRODUCTION

The Lubrizol Corporation (hereinafter referred to as the "Corporation")
hereby amends, effective as of January 1, 1996, The Lubrizol Corporation
Variable Award Plan (hereinafter referred to as the "Plan") in order to provide
an award for employees which reflects the pursuit of superior performance,
increased customer satisfaction and enhancement of shareholder value. Awards for
participating employees under the Plan shall depend upon corporate performance
in terms of customer, franchise, organization and financial measures for the
Plan Year.

Except as otherwise provided, the Plan shall be administered by the
Organization and Compensation Committee (hereinafter referred to as the
"Committee") of the Board of Directors of the Corporation. The Committee shall
have conclusive authority to construe and interpret the Plan and any agreements
entered into under the Plan and to establish, amend, and rescind rules and
regulations for its administration. The Committee shall also have any additional
authority as the Board may from time to time determine to be necessary or
desirable.

ARTICLE I
DEFINITIONS

1.01 DEFINITIONS. The following terms shall have the indicated
meanings for purposes of the Plan:

a. "Base Pay" shall mean a Participant's current bi-weekly
salary multiplied by 26.

b. "Board" shall mean the board of Directors of the Corporation.

c. "Chief Executive Officer" shall mean the chief executive
officer of the Corporation.

d. "Committee" shall mean the Organization and Compensation
Committee of the Board, consisting of persons who are not
Employees.

e. "Corporation" shall mean The Lubrizol Corporation, a
corporation organized under the laws of the State of Ohio.

f. "Director" shall mean a director of the Corporation.

g. "Employee" shall mean any person who is employed by the
Corporation or a domestic Subsidiary.

h. "Individual Award" shall mean the amount paid to a
Participant by the Corporation pursuant to the Plan.

i. "Individual Performance Shares" shall have the definition set
forth in Section 3.02 herein.

1
<PAGE> 2

j. "Officer" shall mean a chief executive officer, president,
vice president, secretary, treasurer or principal financial
officer, controller or principal accounting officer and any
other person designated as an officer of the Corporation by
the Board.

k. "Participant" shall mean Officers, and any Employee who has
been selected by the Committee pursuant to Article II of the
Plan, and who has not for any reason become ineligible to
participate in the Plan.

l. "Plan" shall mean The Lubrizol Corporation Variable Award
Plan, effective January 1, 1990, as amended effective
January 1, 1996, as herein set forth.

m. "Plan Year" shall mean the twelve-month period commencing
each January 1 and ending each subsequent December 31.

n. "President" shall mean the president of the Corporation.

o. "Subsidiary" shall mean any other domestic company wholly or
partially owned by the Corporation.

1.02 CONSTRUCTION. Where necessary or appropriate to the meaning of a
word, the singular shall be deemed to include the plural, the plural to include
the singular, the masculine to include the feminine, and the feminine to include
the masculine.

ARTICLE II
ELIGIBILITY AND PARTICIPATION
-----------------------------

2.01 ELIGIBILITY. All Employees shall be eligible to participate in
the Plan.

2.02 PARTICIPATION. The Committee shall determine which Employees shall
participate in the Plan for each Plan Year. The Committee's selection of
Participants shall be made after considering recommendations presented to it by
the Chief Executive Officer.

ARTICLE III
INDIVIDUAL PERFORMANCE SHARES
-----------------------------

3.01 IN GENERAL. At the time the Committee selects Participants for any
Plan Year, the Committee shall, after consideration of the recommendations of
the Chief Executive Officer, establish for each Plan Year Individual Performance
Shares for each Participant.

3.02 CALCULATION OF INDIVIDUAL PERFORMANCE SHARES. Individual
Performance Shares shall be calculated in the following manner:

(a) The Base Pay of each eligible Participant shall be multiplied
by a designated percentage which shall take into account the
Participant's position in the Corporation. Such percentage
shall be determined by the Committee.

(b) The amount produced for each Participant pursuant to the
calculation in (a) above shall be divided by the sum of all
such amounts produced for all

2
<PAGE> 3

Participants calculated in accordance with (a) above in order
to produce a second percentage.

(c) The percentage for each Participant derived in the manner set
forth in paragraph (b) above shall be multiplied by 100 and
rounded to the highest whole number to produce the number of
each Participant's Individual Performance Shares.

Individual Performance Shares may be either increased or decreased, for
any Participant at the discretion of the Committee or upon the recommendation of
the Chief Executive Officer and the President in order to reflect individual
contribution not taken into account under the formulae described above.

ARTICLE IV
DETERMINATION OF FUND
---------------------

4.01 FUND. A fund will be accrued on a monthly basis for each Plan Year
equal to a percentage of the Corporation's consolidated net income for such Plan
Year (the "Fund"), which may be increased or decreased prior to the end of the
Plan Year at the discretion of the Committee or upon the recommendation of the
Chief Executive Officer. The Fund shall consist of bookkeeping accruals and no
cash or other property shall be set aside by the Corporation for these purposes.

4.02 POST-PLAN YEAR FUND ADJUSTMENT. Each January, corporate
initiatives for the upcoming Plan Year will be categorized into four performance
measures; financial, customer, franchise and organization, and presented to the
Committee by the Chief Executive Officer. The following January, the Chief
Executive Officer will evaluate the outcome of the performance measures for the
Plan Year and will present the evaluation to the Committee which may thereafter
at its discretion, increase or decrease the amount of the Fund.

ARTICLE V
INDIVIDUAL AWARDS
-----------------

5.01 ALLOCATION. Each Participant's Individual Award for a Plan Year
shall be an amount calculated by multiplying the amount of the Fund by a
fraction, the numerator of which shall be the number of the Participant's
Individual Performance Shares and the denominator of which shall be the total
number of all Participants' Individual Performance Shares. The maximum amount of
any Participant's Individual Award shall be at the discretion of the Committee.
No Participant shall have any vested interest in or be entitled to any
Individual Award until or unless such payment is made by the Committee. Any
amounts remaining in the Fund after Individual Awards are made for any Plan Year
shall be returned to earnings and not carried over to any subsequent Plan Year.

5.02 TIME AND METHOD OF PAYMENT OF INDIVIDUAL AWARDS. In the event the
Committee determines that a Participant is entitled to an Individual Award, the
Corporation shall pay such Individual Award to that Participant as soon after
the close of the Plan Year as may be feasible, but in no event later than 30
days after the public announcement of the Corporation's earnings for such Plan
Year. A Participant who leaves the Corporation's employ prior to the issuance of
an Individual Award, except in the case of retirement under the provisions of a
qualified defined benefit plan maintained by the Corporation, disability or
death, will not be eligible for any payment under this Plan. However, an
Individual Award may be made in those instances
3

<PAGE> 4

where recommendation for such a payment has been made by the Chief
Executive Officer and approved by the Committee.

In the event a Participant dies prior to the payment of any Individual
Award with respect to any Plan Year, any Individual Award determined to be
payable by the Committee shall be paid by the Corporation to the Participant's
estate.

5.03 CONDITIONS. Notwithstanding anything contained herein to the
contrary, the payment of Individual Awards to Participants with respect to any
Plan Year is conditioned upon the availability of adequate corporate profits for
the Corporation's fiscal year coinciding with any Plan Year. The determination
of whether adequate corporate profits exist shall be made solely by the Board
and such determination shall be conclusive and binding.

ARTICLE VI
CHANGE OF CONTROL
-----------------

6.01 For all purposes of the Plan, a "Change in Control of the
Corporation" shall have occurred if any of the following events shall occur:
a. The Corporation is merged, consolidated or reorganized into or
with another corporation or other legal person, and as a
result of such merger, consolidation or reorganization less
than a majority of the combined voting power of the
then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate
by the holders of Voting Stock (as hereinafter defined) of the
Corporation immediately prior to such transaction;

b. The Corporation sells all or substantially all of its assets
to any other corporation or other legal person, less than a
majority of the combined voting power of the then-outstanding
securities of such corporation or person immediately after
such sale are held in the aggregate by the holders of Voting
Stock of the Corporation immediately prior to such sale;

c. There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated
pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), disclosing that any person (as the term
"person" is used in Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13(d)(3) or any
successor rule or regulation promulgated under the Exchange
Act) of securities representing 20% or more of the combined
voting power of the then-outstanding securities entitled to
vote generally in the election of directors of the
Corporation ("Voting Stock");

d. The Corporation files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange
Act disclosing in response to Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) that a
change in control of the Corporation has or may have occurred
or will or may occur in the future pursuant to any
then-existing contract or transaction; or

e. If during any period of two consecutive years, individuals who
at the beginning of any such period constitute the Directors
of the Corporation cease for any reason to constitute at least
a majority thereof, unless the election, or the nomination for

4
<PAGE> 5

election by the Corporation's stockholders, of each Director
of the Corporation first elected during such period was
approved by a vote of at least two-thirds of the Directors of
the Corporation then still in office who were Directors of the
Corporation at the beginning of any such period.

Notwithstanding the foregoing provisions, a "Change in Control" shall
not be deemed to have occurred for purposes of the Plan solely because (i) the
Corporation, (ii) an entity in which the Corporation directly or indirectly
beneficially owns 50% or more of the voting securities or (iii) any
Corporation-sponsored employee stock ownership plan or any other employee
benefit plan of the Corporation, either files or becomes obligated to file a
report or a proxy statement under or in response to Schedule 13D, Schedule
14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or
item therein) under the Exchange Act, disclosing beneficial ownership by it of
shares of Voting Stock, whether in excess of 20% or otherwise, or because the
Corporation reports that a change in control of the Corporation has or may have
occurred or will or may occur in the future by reason of such beneficial
ownership.

6.02 EFFECT OF CHANGE IN CONTROL. In the event a Change in Control of
the Corporation occurs prior to final determination by the Committee of the
amounts of Individual Awards to be paid under the Plan with respect to any Plan
Year, the Committee shall calculate such Individual Awards as soon as
practicable after such Change in control. The Fund from which Individual Awards
are to be made shall be based upon accruals by the Corporation up to the time of
such Change in Control and Individual Awards shall be calculated in accordance
with Section 3.02 herein. Payment of such Individual Awards shall be made within
thirty (30) days of the date on which the determination is made to compute the
payments according to the terms of this provision.

ARTICLE VII
ADMINISTRATION
--------------

7.01 PLAN ADMINISTRATOR. The Committee shall be the Plan
administrator.

7.02 DUTIES OF PLAN ADMINISTRATOR.

a. The Committee shall administer the Plan in accordance with its
terms and shall have all powers necessary to carry out the
provisions of the Plan including, but not limited to, the
following:

(1) Determination of Employees of the Corporation who
are eligible for Plan participation;

(2) Determination of the amount of the Fund to be
distributed to Participants for each Plan Year; and

(3) Determination of Officer's actual Individual Awards.

b. The Committee shall interpret the Plan and shall resolve all
questions arising in the administration, interpretation, and
application of the Plan. Any such determination of the
Committee shall be conclusive and binding on all persons.

5
<PAGE> 6

c. The Committee shall establish such procedures and keep such
records or other data as the Committee in its discretion
determines necessary or proper for the administration of the
Plan.

d. The Committee may delegate administrative responsibilities to
such person or persons as the Committee deems necessary or
desirable in connection with the administration of the Plan.

ARTICLE VIII
MISCELLANEOUS
-------------

8.01 UNFUNDED PLAN. The Corporation shall be under no obligation to
segregate or reserve any funds or other assets for purposes relating to this
Plan and no Participant shall have any rights whatsoever in or with respect to
any funds or assets of the Corporation.

8.02 NON-ALIENATION. Since a Participant does not have any rights to
any Individual Award under the Plan until payment of such Individual Award is
made, no anticipated payment of any Individual Award shall be subject in any
manner to alienation, sale, transfer, assignment, pledge, attachment,
garnishment or encumbrance of any kind. If a Participant attempts to alienate,
sell, transfer, assign, pledge or otherwise encumber any such anticipated
Individual Award, or if he has filed or will be filing for bankruptcy, the
Committee in its discretion may cause such amounts as would otherwise become
payable to such Participant at such time or times to be paid to or applied for
the benefit of such one or more of the following as the Committee in its
discretion may designate: the Participant, his spouse, child or children, or
other dependents.

8.03 UNCLAIMED PAYMENTS. Should the whereabouts of any Participant
entitled to receive any Individual Award be unknown to the Corporation, and
unascertainable after reasonable inquiry by the Corporation, for a period of two
years, the right of such person to receive payments hereunder shall be
terminated, and the amounts which would otherwise have been payable to such
person shall be forfeited.

8.04 ACTIONS OR DECISIONS WITH RESPECT TO THE PLAN. Any decision or
action of the Corporation, the Board, or the Committee, arising out of or in
connection with the administration and operation of this Plan, may be made or
taken in their absolute discretion, and such decision or action shall be
conclusive and binding upon all Participants.

8.05 NO EMPLOYMENT RIGHTS. Nothing herein contained shall be construed
as a commitment or agreement upon the part of any Participant or Employee
hereunder to continue his employment with the Corporation or a Subsidiary, and
nothing herein contained shall be construed as a commitment on the part of the
Corporation or a Subsidiary to continue the employment or rate of compensation
of any Participant hereunder or any Employee for any period.

8.06 AMENDMENT OF THE PLAN. The Corporation reserves the right, to be
exercised by instruction from the Committee, to modify or amend this Plan at any
time.

8.07 DURATION AND TERMINATION OF THE PLAN. The Corporation also
reserves the right, to be exercised by action of the Board, to discontinue or
terminate the Plan. Any such termination shall not be retroactive.

<PAGE> 1

Exhibit (10)(g)
THE LUBRIZOL CORPORATION
EXECUTIVE DEATH BENEFIT PLAN
(As Amended)

The Lubrizol Executive Death Benefit Plan (hereinafter referred to as
the "Plan") shall provide death benefits to the designated beneficiaries of
certain executives of The Lubrizol Corporation (hereinafter referred to as the
"Corporation") in accordance with the provisions hereinafter set forth.

Section 1. ELIGIBILITY. Participation in the Plan shall be limited to
those executives of the Corporation who are designated by the Organization and
Compensation Committee of the Board of Directors of the Corporation (hereinafter
referred to as the "Committee") to participate in the Plan; who complete a
physical examination to the satisfaction of the Corporation as soon as
reasonably possible after being so designated; and who waive participation and
benefits in the basic term-life insurance coverage sponsored by the Corporation
or any of its affiliates, in a form satisfactory to the Corporation. Any
executive so designated shall be listed in Appendix A attached hereto and shall
hereinafter be referred to as a "Participant".

Section 2. BENEFITS. Effective January 1, 1993, upon the death of a
Participant, a death benefit shall be made to the Participant's Beneficiary (as
defined in Section 5) equal to a percentage of the Participant's bi-weekly
salary multiplied by 26, plus quarterly (hereinafter referred to as "Covered
Pay") rounded to the nearest $1,000.00. Covered Pay for the Participants
designated by the Board to participate in the Plan shall have the meaning as
described in Appendix A, attached hereto. The Committee will periodically review
the Plan and may, at its discretion, change the level of Covered Pay for any
Participant. A death benefit shall be calculated in accordance with Paragraph
(a) or (b) below, whichever is applicable.

(a) The amount of the death benefit payable with respect to a
Participant, who at the time of his death, (i) is employed by
the Corporation, or (ii) has retired under the normal
retirement provisions of a qualified defined benefit plan
maintained by the Corporation, shall be as follows:

Age of Participant
at death Death Benefit
-------- -------------

Less than age 70 250% of Covered Pay

At least age 70, but
less than age 75 150% of Covered Pay

Age 75 and over 100% of Covered Pay

(b) The amount of the death benefit payable with respect to a
Participant who (i) has retired under the early retirement
provisions of a qualified defined benefit plan maintained by
the Corporation, or (ii) has voluntarily
<PAGE> 2

terminated his employment with the Corporation but has not
obtained competitive employment with another employer, shall
be as follows:

Years after
Early Retirement or
Voluntary Termination Death Benefit
--------------------- -------------

0 through 5 250% of Covered Pay

6 through 10 150% of Covered Pay

11 or more 100% of Covered Pay

Section 3. FUNDING. The obligation of the Corporation to pay benefits
provided hereunder shall be satisfied by the Corporation out of its general
funds. In order to provide a source of payment for its obligations under the
Plan, the Corporation will cause a trust fund to be maintained and/or arrange
for insurance contracts. Subject to the provisions of the trust agreement
governing any such trust fund or the insurance contract, the obligation of the
Corporation under the Plan to provide a benefit shall nonetheless constitute the
unsecured promise of the Corporation to make payments as provided herein, and no
person shall have any interest in, or a lien or prior claim upon, any property
of the Corporation.

Section 4. PAYMENT OF BENEFITS. Payment of any death benefit under the
Plan shall be made to the decreased Participant's beneficiary in a single lump
sum as soon as practicable after the Participant's death.

Section 5. BENEFICIARIES. A Participant may designate any person or
person as a beneficiary (hereinafter referred to as a "Beneficiary") to receive
payment of the death benefit provided under the Plan. Such designation shall be
made in writing in the form prescribed by the plan administrator and shall
become effective only when filed by the Participant with the Corporation. A
Participant may change or revoke his Beneficiary designation at any time by
completing and filing with the Corporation a new Beneficiary designation. If at
the time of the Participant's death there is no Beneficiary designation on file
with the Corporation, or the Beneficiary does not survive to the date of
distribution, the death benefit provided hereunder shall be paid to the
Participant's estate.

Section 6. PLAN ADMINISTRATOR. The Corporation shall be the
administrator of the Plan. The plan administrator shall perform all ministerial
functions with respect to the Plan. The plan administrator shall employ such
advisors or agents as it may deem necessary or advisable to assist it in
carrying out its duties hereunder. The plan administrator shall have full power
and authority to interpret and construe the Plan and shall determine all
questions arising in the administration, interpretation, and application of the
Plan. Any such determination shall be conclusive and binding on all persons.

Section 7. REDUCTION OR TERMINATION OF BENEFITS. The Committee reserves
the right to reduce or eliminate the benefit of any Participant who is dismissed
for cause, or who voluntarily terminates employment to obtain competitive
employment.

<PAGE> 3

For Plan purposes, "Cause" means (i) willful violation of a Corporation
policy, or (ii) willful misconduct or gross negligence in the performance of
duties, as determined by the Corporation in good faith consistently, if
applicable, with its existing personnel practices.

For Plan purposes, "Competitive employment" shall include employment
with any employer (firm, business, or individual) engaged in selling or
furnishing any product similar to that available from the Corporation at the
time of termination of employment with the Corporation.

Section 8. EMPLOYMENT. This Plan shall not constitute a contract of
employment.

Section 9. SEVERABILITY. In the event any provision of the Plan is
deemed invalid, such provision shall be deemed to be severed from the Plan, and
the remainder of the Plan shall continue in full force and effect.

Section 10. GOVERNING LAW. The provisions of the Plan shall be
construed and enforced in accordance with the laws of the State of Ohio.

Section 11. EFFECTIVE DATE. The Plan is effective as of June 1, 1990.

3
<PAGE> 4

THE LUBRIZOL CORPRATION
EXECUTIVE DEATH BENEFIT PLAN

APPENDIX A
January 1, 1996

PARTICIPANT COVERED PAY

1. R. A. Andreas January 1, 1996 Covered Pay
2. W. G. Bares January 1, 1996 Covered Pay
3. L. E. Coleman January 1, 1996 Covered Pay
4. G. R. Hill January 1, 1996 Covered Pay
5. R. Y. K. Hsu January 1, 1993 Covered Pay
6. W. D. Manning January 1, 1993 Covered Pay
7. R. J. Senz January 1, 1993 Covered Pay
8. W. T. Beargie June 1, 1990 Covered Pay
9. P. L. Krug June 1, 1990 Covered Pay
10. J. A. Studebaker June 1, 1990 Covered Pay

<PAGE> 1

Exhibit (10)(i)

THE LUBRIZOL CORPORATION
DEFERRED STOCK COMPENSATION PLAN
FOR OUTSIDE DIRECTORS
(As Amended)

PURPOSE
-------

1. The Lubrizol Corporation (the "Company") hereby establishes its
Deferred Stock Compensation Plan for Outside Directors (the "Plan") in
order to promote the interests of the Company and its shareholders by
having a portion of the total compensation payable to its outside
directors be deferred and paid in the form of common shares of the
Company, thereby increasing each Director's beneficial ownership of
Company common shares as well as each Director's proprietary interest
in the Company.

EFFECTIVE DATE
--------------

2. The effective date of the plan is October 1, 1991.

COMMON SHARE UNITS
------------------

3. In addition to the cash compensation otherwise payable to each outside
director of the Company, the Company shall establish and maintain a
Deferred Stock Account for and in the name of each outside director.
Subject to the provisions of Section 10, on the first day of October in
each calendar year, the Company shall credit 500 common share units
("Units") to the Deferred Stock Account of each person who is an
outside director of the Company on said date.

DIVIDEND EQUIVALENTS
--------------------

4. As of each dividend record date declared with respect to the Company's
common shares, the Company shall credit the Deferred Stock Account of
each director with an additional number of Units equal to:

(a) the product of (i) the dividend per common share of the
Company which is payable with respect to such dividend record
date, multiplied by (ii) the number of Units credited to the
director's Deferred Stock Account as of such dividend record
date; DIVIDED BY

(b) the closing price of a common share of the Company on the
dividend record date (or if such stock was not traded on that
date, on the next preceding date on which such common shares
were traded), as reported by the New York Stock Exchange -
Composite Transactions Reporting System.

-1-
<PAGE> 2

DISTRIBUTION OF COMMON SHARES
-----------------------------

5. (a) Each director, or, in the event of death, his/her
beneficiary, shall be entitled to receive one common share of
the Company (a "Share" or "Shares") for each Unit credited to
his/her Deferred Stock Account, payable at such time or times
as hereinafter provided. Once a Share has been distributed
with respect to a Unit, that Unit shall be canceled.

(b) Unless otherwise elected by the director in accordance with
the provisions of Section 5(c), all Shares shall be
distributed to the director or beneficiary, as the case may
be, on the first day of the month following the date on which
the director ceases to be a director for any reason.

(c) At any time prior to the first time that the Company credits
Units to the director's Deferred Stock Account, the director
may irrevocably elect to have all Shares to which the
director will be entitled under this Plan distributed to
him/her (or in the event of his/her death, the director's
designated beneficiary) in ten or fewer annual installments
commencing on the first day of the month following the date
on which such director ceases to be a director of the
Company for any reason. The number of Shares to be
distributed with each installment shall be equal to the
nearer whole number obtained by dividing the number of Units
then credited to the director's Deferred Stock Account by
the number of unpaid installments.

(d) Units with respect to which no distribution of Shares has yet
occurred shall continue to be held in the director's Deferred
Stock Account and credited with dividend equivalents in
accordance with Section 4.

BENEFICIARY DESIGNATION
-----------------------

6. (a) Each director may, from time to time, by writing filed
with the Company, designate any legal or natural person or
persons (who may be designated contingently or successively)
to whom Shares attributable to the director's Units are to be
distributed if the director dies prior to having received all
of such Shares to which he/she is entitled under Section 5. A
beneficiary designation will be effective only if the signed
form is filed with the Company while the director is alive and
will cancel all beneficiary designation forms filed earlier.

(b) To the extent that a director fails to designate a beneficiary
or beneficiaries as provided in this Section 6, or if all
designated beneficiaries die before the director or before the
distribution of all Shares attributable to the director's
Units, all remaining Shares attributable to such Units shall
be distributed to the estate of the director as soon as
practicable after such death.

ACCELERATION OF SHARE DISTRIBUTIONS
-----------------------------------

7. The Company may accelerate the distribution of Shares with respect
to Units credited to the Deferred Stock Account of any director for
reasons of severe financial hardship. For

-2-
<PAGE> 3

purposes of this Plan, severe financial hardship shall be deemed to
exist in the event the Company determines that a director
needs a distribution to meet immediate and heavy financial needs
resulting from a sudden or unexpected illness or accident of the
director or a member of his/her family, loss of the director's
property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the
control of the director. A distribution based on financial hardship
shall not exceed the amount required to meet the immediate financial
need created by the hardship.

TRANSFERABILITY
---------------

8. The interests of any director or beneficiary under the Plan are not
subject to the claims of the director's creditors and may not otherwise
be voluntarily or involuntarily assigned, alienated or encumbered.

SHAREHOLDER STATUS
------------------

9. Prior to the date that Shares are distributed to a director (or
beneficiary), the director (or beneficiary) shall have no rights of a
shareholder with respect to the Units. The director's rights under this
Plan are solely that of an unsecured creditor of the Company and the
Company shall not be obligated to hold any Shares in trust or as a
segregated fund.

CHANGES IN SHARES
-----------------

10. In the event of any change in the number of outstanding Shares by
reason of any stock dividend, stock split up, recapitalization, merger,
consolidation, exchange of shares or other similar corporate change,
the number of Units to be credited in accordance with Section 3, the
number of Units held in the director's Deferred Stock Account and the
Shares to be distributed in accordance with this Plan shall be
appropriately adjusted to take into account any such event.

SUCCESSORS
----------

11. This Plan shall be binding upon any assignee or successor in interest
to the Company whether by merger, consolidation or sale of all or
substantially all of the Company's assets.

AMENDMENT AND TERMINATION
-------------------------

12. The Board of Directors of the Company may, from time to time, amend or
terminate the Plan; provided, however, that no such amendment or
termination shall adversely affect the rights of any director or
beneficiary without his/her consent with respect to Units credited
prior to such amendment or termination.

-3-

<PAGE> 1
Exhibit (10)(j)

THE LUBRIZOL CORPORATION
OFFICERS' SUPPLEMENTAL
RETIREMENT PLAN
(As Amended)

The Lubrizol Corporation hereby establishes, effective as of January 1,
1993, The Lubrizol Corporation Officers' Supplemental Retirement Plan (the
"Plan") for the purpose of providing deferred compensation benefits to a select
group of management or highly compensated employees.

Section 1. DEFINITIONS. For the purposes hereof, the following
words and phrases shall have the meanings indicated, unless a different
meaning is plainly required by the context:

(a) BENEFICIARY. The term "Beneficiary" shall mean a person
who is designated by a Participant to receive benefits payable upon
his death pursuant to the provisions of Section 6.

(c) COMPANY. The term "Company" shall mean The
Lubrizol Corporation, an Ohio corporation, its corporate successors
and the surviving corporation resulting from any merger of The
Lubrizol Corporation with any other corporation or corporations.

(d) CREDITED SERVICE. The term "Credited Service" shall mean a
Participant's years of service with the Company equal to the number of
full and fractional years of service (to the nearest twelfth of a
year) beginning on the date the Participant first performed an hour of
service for the Company and ending on the date he is no longer
employed by the Company.

(e) FINAL AVERAGE PAY. Effective, July 25, 1994, the term
"Final Average Pay" shall mean the aggregated amount of Basic
Compensation (as that term is defined in the Lubrizol Pension Plan
modified to add deferrals, if any, under The Lubrizol Corporation
Deferred Compensation Plan for Officers (which was adopted effective
July 25, 1994) received by the Participant during the three
consecutive calendar years during which such Participant received the
greatest aggregate amount of Basic Compensation, as defined above,
within the most recent ten years of employment, divided by 36.

(f) LUBRIZOL PENSION PLAN. The term "Lubrizol Pension
Plan" shall mean The Lubrizol Corporation Pension Plan as the same
shall be in effect on the date of a Participant's retirement, death,
or other termination of employment.

<PAGE> 2

(g) NORMAL RETIREMENT DATE. The term "Normal Retirement
Date" shall mean the first day of the month following the date on which
a Participant attains age sixty-five (65).

(h) PARTICIPANT. The term "Participant" shall mean the Chief
Executive Officer, the Chief Operating Officer and any other officer of
the Company who is designated by the Board of Directors of the Company
and the Chief Executive Officer to participate in the Plan, and who has
not waived participation in the Plan.

(i) PLAN. The term "Plan" shall mean a deferred
compensation plan set forth herein, together with all amendments hereto,
which Plan shall be called "The Lubrizol Corporation Officers'
Supplemental Retirement Plan."

Section 2. VESTING. The Participant shall be 100 percent vested in
his accrued supplemental retirement benefit hereunder.

Section 3. NORMAL RETIREMENT BENEFIT. Each Participant who retires from
employment with the Company on or after his Normal Retirement Date shall
receive, subject to the provisions of Sections 6 and 7, a monthly supplemental
retirement benefit which shall be equal to two percent (2%) of his Final Average
Pay multiplied by his Credited Service (up to 30 years) offset by the following
amounts:

(a) Benefits payable to the Participant under the
Lubrizol Pension Plan;

(b) Benefits payable to the Participant under The Lubrizol
Corporation Employees' Stock Purchase and Savings Plan, including benefits
attributable to Matching Contributions, but excluding benefits attributable
to CODA Contributions, Supplemental Contributions, Rollover Contributions
or Transferred Contributions, as defined thereunder;

(d) Benefits payable to the Participant under The
Lubrizol Corporation Excess Defined Contribution Plan;

(e) Benefits payable to the Participant under The
Lubrizol Corporation Excess Defined Benefit Plan;

(f) The Participant's Social Security benefits;

(g) Any other employer-provided benefits not
specifically excluded herein which are payable to the Participant
pursuant to any qualified or nonqualified retirement plan
maintained by the Company.

Such offsets shall be determined using the actuarial factors provided
in the Lubrizol Pension Plan.

<PAGE> 3

Section 4. EARLY RETIREMENT ELIGIBILITY AND DETERMINATION OF BENEFIT.
Each Participant who retires from employment with the Company at or after age
55, but prior to his Normal Retirement Date, shall receive a percentage of his
supplemental retirement benefit determined under Section 3, in accordance with
the early retirement schedule provided in the Lubrizol Pension Plan.

Section 5. TERMINATION OF EMPLOYMENT. If a Participant terminates
employment prior to age 55, he shall receive the actuarial equivalent of his
supplemental retirement benefit determined under Section 3 in a single lump-sum
payment; such actuarial equivalent of which shall be calculated using the same
actuarial factors and interest rates used in the Lubrizol Pension Plan as in
effect on the date the Participant terminates employment in accordance with this
Section 5.

Section 6. PAYMENT TO PARTICIPANT. (Effective November 27, 1995)

(a) Each Participant who retires in accordance with Sections 3
or 4 shall receive payment of his supplemental pension benefit under the
Plan determined as of his date of retirement in the standard form of
benefit of a monthly retirement benefit commencing within 30 days following
retirement and payable to such Participant for his lifetime following such
retirement, with the continuance to his Beneficiary of such amount after
his death for the remainder, if any, of the 120-month term that commenced
with the date as of which the first payment of such monthly benefit is
made, and with any such monthly benefits remaining unpaid upon the death of
the survivor of the Participant and his Beneficiary to be made to the
estate of such survivor.

(b) Participants may instead elect within a 60 day period
commencing 90 days prior to retirement to receive the actuarial equivalent
of the standard form of benefit determined under paragraph a, on the date
of retirement, in accordance with any one of the following options:

(i) a single lump-sum payment payable within
30 days following retirement;

(ii) a single lump-sum payment payable within
30 days following the end of calendar year in which the Participant
retired. Interest on the lump-sum deferral shall accrue and be paid
with the lump- sum; such interest to be computed at the PBGC interest
rate in effect of the date of retirement.

(iii) a reduced monthly retirement benefit
commencing within 30 days following retirement and payable to such
Participant for his lifetime following his retirement, with the
continuance of a monthly benefit equal to fifty percent (50%) of such
reduced amount after his death to his Beneficiary during the lifetime
of the Beneficiary, provided that such Beneficiary is living at the
time of such Participant's retirement and survives him;

<PAGE> 4

(iv) a reduced monthly retirement benefit commencing
within 30 days following retirement and payable to such Participant
for his lifetime following his retirement, with the continuance of a
monthly benefit equal to one hundred percent (100%) of such reduced
amount after his death to his Beneficiary during the lifetime of the
Beneficiary, provided such Beneficiary is living at the time of such
Participant's retirement and survives him.

(v) annual installments of up to ten payments, the
first of which shall be paid within 30 days following retirement, and
subsequent installments of which shall be paid on the anniversary date
of the payment of the first installment. Such installments shall be
determined by dividing the commuted lump-sum equivalent of the
supplemental retirement benefit (determined in the same manner as
under the Lubrizol Pension Plan) by the number of installments to be
paid and adjusting for interest based on the interest rate used to
determine the commuted lump-sum payment. Installments after the first
installment shall include such interest which accrues during the
12-month period occurring since the date the prior installment
was paid.

Section 7. PAYMENT IN THE EVENT OF DEATH PRIOR TO COMMENCEMENT OF
DISTRIBUTION. If a Participant dies prior to commencement of benefits under the
Plan, his surviving spouse, if any, shall be eligible for a survivor benefit
which is equal to one-half of the reduced monthly benefit the Participant would
have received under the Plan if the Participant had terminated employment on the
day before his death and had elected to receive his benefit hereunder in the
form of a 50 percent joint and survivor annuity. In making the determinations
and reductions required in this Section 7, the Company shall apply the
assumptions then in use under the Lubrizol Pension Plan. For purposes hereof, a
surviving spouse shall only be eligible for a benefit under this Section 7, if
such spouse had been married to the deceased Participant for at least one year
as of the date of the Participant's death.

Section 8. ACTUARIAL FACTORS. All actuarial assumptions and
factors used in this Plan shall be the same as those used in the Lubrizol
Pension Plan.

Section 9. FUNDING. The obligation of the Company to pay benefits
provided hereunder shall be unfunded and unsecured and such benefits shall be
paid by the Company out of its general funds. In order to provide a source of
payment for its obligations under the Plan, the Company may cause a trust fund
to be maintained and/or arrange for insurance contracts. Subject to the
provisions of the trust agreement governing any such trust fund or the insurance
contract, the obligation of the Company under the Plan to provide a Participant
with a benefit shall nonetheless constitute the unsecured promise of the Company
to make payments as provided herein, and no person shall have any interest in,
or a lien or prior claim upon, any property of the Company.

<PAGE> 5

Section 10. PLAN ADMINISTRATOR. The Company shall be the plan
administrator of the Plan. The plan administrator shall perform all ministerial
functions with respect to the Plan. Further, the plan administrator shall have
full power and authority to interpret and construe the Plan and shall determine
all questions arising in the administration, interpretation, and application of
the Plan. Any such determination shall be conclusive and binding on all persons.
The plan administrator shall employ such advisors or agents as it may deem
necessary or advisable to assist it in carrying out its duties hereunder.

Section 11. NOT A CONTRACT OF CONTINUING EMPLOYMENT. Nothing herein
contained shall be construed as a commitment or agreement on the part of the
Participant to continue his employment with the Company, and nothing herein
contained shall be construed as a commitment or agreement on the part of the
Company to continue the employment or the annual rate of compensation of the
Participant for any period, and the Participant shall remain subject to
discharge to the same extent as if this Plan had never been put into effect.

Section 12. RIGHT OF AMENDMENT AND TERMINATION. Effective October 1,
1994, the Company reserves the right to amend or terminate the Plan in whole or
in part at any time and to suspend operation of the Plan, in whole or in part,
at any time, by resolution or written action of its Board of Directors or by
action of a committee to which such authority has been delegated by the Board of
Directors; provided, however, that no amendment shall result in the forfeiture
or reduction of the interest of any Participant or person claiming under or
through any one or more of them pursuant to the Plan. Any amendment of the Plan
shall be in writing and signed by authorized individuals.

Section 13. TERMINATION AND DISTRIBUTION OF ACCRUED BENEFITS. The Plan
may be terminated at any time by the Company, and in that event the amount of
the accrued benefits as of the date of such termination shall remain an
obligation of the Company and shall be payable as if the Plan had not been
terminated.

Section 14. CONSTRUCTION. Where necessary or appropriate to the meaning
hereof, the singular shall be deemed to include the plural, the plural to
include the singular, the masculine to include the feminine, and the feminine to
include the masculine.

Section 15. SEVERABILITY. In the event any provision of the Plan is
deemed invalid, such provision shall be deemed to be severed from the Plan, and
the remainder of the Plan shall continue to be in full force and effect.

Section 16. GOVERNING LAW. Except as otherwise provided, the
provisions of the Plan shall be construed and enforced in accordance with the
laws of the State of Ohio.

<PAGE> 1

EXHIBIT 11

THE LUBRIZOL CORPORATION

Computation of Per Share Earnings

(In Thousands, Except Per Share Data)

The computation of primary earnings per share and fully diluted earnings per
share is as follows:

<TABLE>
<CAPTION>
For the Year Ended December 31
------------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Average shares outstanding
for computation of primary
earnings per share 63,840 65,737 67,706

Add adjustment to treat
shares for options exercised
as if such shares were out-
standing during the entire
year 37 183 257

Add equivalent shares for
unexercised options at end
of year (A) 352 473 550
------ ------ ------

Average shares outstanding
for computation of fully
diluted earnings per share 64,229 66,393 68,513
====== ====== ======

Primary earnings per share $2.37 $2.67 $ .67
===== ===== =====

Fully diluted earnings per
share (B) $2.36 $2.64 $ .67
===== ===== =====

<FN>
NOTES: (A) Computed under the "Treasury Stock Method" using the higher
of quoted ending or average market price.

(B) Fully diluted earnings per share have not been presented in
the consolidated statements of income because the dilutive
effect is less than 3%.
</TABLE>

<PAGE> 1

EXHIBIT 12

THE LUBRIZOL CORPORATION AND SUBSIDIARIES

Computation of Ratio of Earnings to Fixed Charges

(all amounts except ratios are shown in thousands)

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Pretax income $225,574 $251,459 $119,651 $177,144 $178,140

Deduct earnings of less
than 50% owned affiliates
(net of distributed
earnings) included in
pretax income (1,384) (871) (2,355) 9 (3,796)

Add losses of less than 50%
owned affiliates included
in pretax income 1,808 490 21,063 2,769 53

Add fixed charges net of
capitalized interest 10,376 3,149 4,154 3,615 7,738

Add previously capitalized
interest amortized during
period 1,096 452 272 162 96
------- ------- ------- ------- -------

"Earnings" $237,470 $254,679 $142,785 $183,699 $182,231
======= ======= ======= ======= =======

Gross interest expense
including capitalized
interest ("Fixed Charges") $ 14,693 $ 6,922 $ 6,292 $ 4,981 $ 9,049

Ratio of earnings to
fixed charges 16.2 36.8 22.7 36.9 20.1

Special adjustments:
- -------------------

"Earnings" $237,470 $254,679 $142,785

Plus asset impairment
and special charges 9,489 86,303

Less Genentech gain (38,459) (41,235) (42,443)
------- ------- -------

Adjusted "Earnings" $208,500 $213,444 $186,645
======= ======= =======

Ratio of adjusted earnings
to fixed charges 14.2 30.8 29.7
</TABLE>

<PAGE> 1
Exhibit 13
Management's Discussion and Analysis of Financial Condition and
Results of Operations

The Lubrizol Corporation is a full service supplier of performance chemicals to
diverse markets worldwide. These specialty chemical products are created through
the application of advanced chemical and mechanical technologies to enhance the
performance, quality and value of the products in which they are used. The
company develops, produces and sells specialty additive systems for gasoline and
diesel engine lubricating oils, for automatic transmission fluids and for gear
oils and marine and tractor lubricants. The company also supplies specialty
products for industrial lubricants and functional fluids, fuel additives and
diversified specialty chemical products. Prior to December 1, 1992, the company
had a separately reportable Agribusiness segment. As described in Note 16 to the
financial statements, the company transferred substantially all of its
Agribusiness segment, other than the specialty vegetable oil operations,
(referred to as "Agrigenetics") to Mycogen Corporation and to a joint venture
formed with Mycogen.

Since 1993, the company has been engaged in initiatives to eliminate its
separate business unit structure and realign activities into one combined
organization and to consolidate intermediate production activities, improve the
timeliness of product development, simplify its product offerings and continue
the restructuring of its agribusiness investments.

As discussed in Note 17 to the financial statements, the company recorded a
special pretax charge of $86.3 million in 1993 primarily for the manufacturing
rationalization and organizational realignment initiatives. When substantially
complete near the end of 1996, the number of intermediate production units will
have been reduced by one-third, and the number of employees will have been
reduced by approximately 5%. Through December 31, 1995, the company has
completed approximately 75% of the production unit reductions and 90% of the
employee reductions. Cash of approximately $36 million has been expended to
implement these initiatives, primarily for employee reductions. Future cash
expenditures to complete these initiatives are estimated to be $9 million. These
initiatives reduced the rate of increase in the operating costs of the company,
as compared with historical trends, which resulted in estimated savings
approximating $35 million in 1995 and $20 to $25 million in 1994. These cost
reductions resulted from fewer employees, lower operating costs and reductions
in the number of manufacturing units. When fully implemented, annual savings are
expected to approximate $50 million of which $40 million will represent cash
savings.

1995 RESULTS OF OPERATIONS

In 1995, the company achieved record revenues but, despite a strong first half,
annual earnings declined from the record earnings of 1994. As discussed below,
the primary factors contributing to the 1995 results were lower demand for
engine oil additives particularly during the second half of 1995, the U.S.
Government trade restrictions regarding sales to certain customers in the
Middle East and the inability to maintain profit margins during a period of
rising raw material costs.

<TABLE>
<CAPTION>
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues by Segment (millions)
Specialty Chemicals $1,348.8 $1,433.4 $1,525.5 $1,599.0 $1,663.6
Agribusiness $ 127.5 $ 118.9
</TABLE>

Consolidated revenues were $1.66 billion, an increase of $64.6 million,
or 4%, in 1995 compared with 1994. Price increases implemented in early 1995
and a more favorable product mix increased 1995 revenues by 3% and the
translation of various international currencies, which strengthened during the
period when compared with the U.S. dollar, increased revenues by 3%. Volume
declined 2% from the 1994 level. Sequentially, revenues in the second half of
1995 were 5% lower than the first half due to lower volume (3%) and unfavorable
price/product mix (2%).

For the year, sales volume declined in 1995 compared with 1994, principally
in international markets. North American

<PAGE> 2

volume declined less than 1% from 1994. International volume declined 3% mainly
because of the cessation of spot business with certain customers in the Middle
East due to a U.S. Presidential Order restricting such trade. Excluding from the
comparison this 1994 spot business, which occurred during the first half of the
year, international volume increased 1% and, worldwide volume in 1995 was even
with 1994. Sequentially, volume declined 3% in North America and 4%
internationally in the second half compared with the first half of 1995 as
demand for engine oil lubricants in North America and Europe weakened, causing
lower additive shipment volumes.

1991 1992 1993 1994 1995
---- ---- ---- ---- ----

<S> <C> <C> <C> <C> <C>
Gross Profit by Segment (millions)
Specialty Chemicals $429.9 $451.0 $485.4 $520.7 $532.4
Agribusiness $ 45.7 $ 39.3

</TABLE>

Gross profit (sales less cost of sales) increased 2% to $532.4 million in
1995 from $520.7 million in 1994. Despite lower volume, the amount of gross
profit increased as higher average selling prices, aided by favorable currency
and mix, more than offset an increase in average material cost of 9%, over half
of which was due to the effects of currency and mix. However, gross profit as a
percent of sales declined to 32.1% in 1995 from 32.7% in 1994 as raw material
costs increased faster than selling prices and, combined with slightly higher
manufacturing costs and lower volumes, negatively impacted margin percentage.
Sequentially, gross profit percentage declined to 30.5% in the second half of
1995 compared with 33.6% in the first half due to the effect of unfavorable
price/mix, less favorable currency, higher raw material costs and lower volume.

The company's manufacturing rationalization and organizational realignment
initiatives, which began in 1993, have slowed the rate of increase in the
company's cost and expenses. The company's manufacturing expenses, as well as
its selling and administrative expenses, increased 3% in 1995 as compared with
1994. Excluding increases in expenses due to currency translation and an
acquisition made during 1995, manufacturing costs and selling and administrative
expenses were each level with the 1994 amounts.

1991 1992 1993 1994 1995
---- ---- ---- ---- ----

<S> <C> <C> <C> <C> <C>
Research Testing & Development by
Segment (millions)
Specialty Chemicals $127.7 $139.8 $171.5 $165.5 $179.6
Agribusiness $ 16.3 $ 15.0

</TABLE>

Research, testing and development expenses (technology expenses)
increased 9% to $179.6 million. Technology expenses increased, as anticipated,
due to worldwide testing programs for the engine oils, driveline oils and fuel
products areas together with a greater emphasis on longer-term strategic
research. Product standards change periodically as engine and transmission
designs are improved by the equipment manufacturers to meet new emissions,
efficiency, durability and other performance factors. As occurred in 1995, these
changes influence the timing and amount of annual technology expenses.

Primarily as a result of the above factors, total cost and expenses
increased $7.0 million more than the increase in total revenues in 1995.

The company recorded a charge for asset impairment of $9.5 million ($.10
per share after tax) in the fourth quarter of 1995. This charge related
primarily to an intermediate processing unit that became permanently impaired
due to a change in product formulation caused by a new industry-wide product
specification.

The company sold all of its remaining shares of Genentech, Inc. common
stock during the first half of 1995 and realized a pretax gain of $38.5 million
($.39 per share after tax). During 1994, the company had a pretax gain on the
sale of Genentech common stock of $41.2 million ($.41 per share after tax).

Other income - net, was $7.1 million in 1995, compared with $7.3 million in
1994 (see Note 8 to the financial statements). Other income has been impacted by
equity losses recognized from the company's investment in Mycogen Corporation
and by other transactions involving Mycogen. Mycogen's results are seasonal with
the majority of its income recorded in the first half of the calendar year and
losses recorded in the second half. The company recorded equity losses from
Mycogen of $5.4 million in 1995, compared with equity losses of $.1 million in
1994. In late 1995, the company recognized a noncash gain of $4.5 million,
representing an increase in the value of the company's ownership interest in the
net assets of Mycogen, when Mycogen issued new common shares to another
investor.

Interest expense increased $7.2 million in 1995 over 1994 as a result of
higher average debt outstanding to meet the requirements of the capital
expenditure and share repurchase programs. The average daily balance of total
debt outstanding during 1995 was $203 million as compared with $111 million for
1994.

The company transacts business in more than 100 countries around the world
and has a number of operating facilities in countries outside the United States.
As a result, the company is subject to business risks inherent in non-U.S.
activities, including political uncertainty, import and export limitations,

<PAGE> 3
exchange controls and currency fluctuations. The company believes risks related
to its foreign operations are mitigated due to the political and economic
stability of the countries in which its largest foreign operations are located.

While changes in the dollar value of foreign currencies will affect
earnings from time to time, the longer term economic effect of these changes
should not be significant given the company's net asset exposure, currency mix
and pricing flexibility. Generally, the income statement effect of changes in
the dollar value of foreign currencies is partially or wholly offset by the
company's ability to make corresponding price changes in local currency. The
company's consolidated net income will generally benefit as foreign currencies
increase in value compared with the U.S. dollar and will generally decline as
foreign currencies decrease in value. During 1995, the U.S. dollar weakened,
primarily against the French franc, German deutsche mark and Japanese yen, when
compared with exchange rates in effect during the year 1994. This resulted in
1995 net income being favorably impacted by approximately $.20 per share.

As a result of the factors discussed above, income before income taxes
decreased 10%, or $25.9 million, from 1994. The company's 1995 effective tax
rate was 32.8% as compared with the 1994 rate of 30.2%, which was lower than
normal due to charitable donations of appreciated securities made by the company
in 1994. After application of the 1995 higher effective tax rate, net income was
$151.6 million in 1995, a decrease of 14% or $24.0 million from 1994.

Excluding the gains realized from sale of Genentech common stock in 1995
and 1994 and the charge for asset impairment in 1995, net income decreased 11%
to $132.8 million in 1995, compared with $148.8 million in 1994. The
corresponding earnings per share of $2.08 in 1995 declined 8% compared with
$2.26 in 1994.

While management progressed in controlling operating expenses during 1995,
the lower volume and higher material costs offset the progress the company made
in its cost control efforts. The factors impacting the company's business, which
accelerated during the second half of 1995, will continue to pressure earnings
in 1996.

Sales volume in 1996 will also be affected in North America by a new
industry specification for passenger car motor oil that requires approximately
10% less additive than the existing specification. This new specification,
absent changes in market share, is expected to negatively affect the company's
annual volume in North America by 4% (1.5% on worldwide volume) due to the lower
additive treat rate. The company has developed additive packages that meet the
new specification and expects the majority of its customers will convert to it
by the middle of 1996. The company believes future specification changes will
likely result in increased additive treat levels from the level in this new
specification.

Recent market studies completed by the company suggest that worldwide
market growth rates for lubricant additives over the next several years are
slowing. This worldwide growth rate is made up of slower growth in mature
economies such as North America and Western Europe partially offset by higher
growth rates in developing regions such as Asia. As a part of the company's
growth strategy, increasing resources will be devoted to the Asia-Pacific region
in order to realize the opportunities in this higher growth environment.

In addition, management has launched initiatives relating to the cost
structure of the company, both on a short-term and a long-term basis. A program
has been put into place with an objective of maintaining selling, administrative
and technology expenses during 1996 at an aggregate level below that of 1995.
From a longer term perspective, management is evaluating the overall cost
structure of the company, including the role of technology in the company's
business and the appropriate level of related investment. Changing priorities of
finished lubricant suppliers, along with continued consolidation of additive
suppliers, are resulting in many lubricant suppliers seeking opportunities to
partner with the stronger additive suppliers. These partnering arrangements are
aimed at eliminating redundant cost structures and jointly pursuing business
growth in developing regions of the world. The company believes it is well
positioned to gain market share from these opportunities and resulting
partnering arrangements.

1994 RESULTS OF OPERATIONS

In 1994, the company achieved record revenues and results of operations. As
discussed below, the primary factors contributing to 1994 results were higher
average selling prices, lower research, testing and development expenses and
better results from agribusiness investments.

In 1994, consolidated revenues were $1.6 billion, an increase of $73.5
million or 5% from 1993. This increase was comprised of 4% higher average
selling prices, including currency, and 1% volume increases. Average selling
prices increased primarily as a result of price increases and new product
introductions. The company implemented price increases in the first quarter of
1994 to more fully recover the costs of product technology and the costs
resulting from increased requirements of environmental, health and safety
regulations

<PAGE> 4

at the company's facilities. Higher performing products, which carry higher
selling prices, were introduced late in 1993 to meet new passenger car motor oil
standards in the U.S. markets.

Gross profit increased 7% to $520.7 million in 1994 from $485.4 million in
1993. The improvement in gross profit was primarily attributable to the positive
effects of implementing selling price increases, new product introductions and
growth from business development activities. These improvements were partially
offset by higher material costs in the second half of the year and higher
manufacturing costs. Gross profit as a percentage of sales increased to 32.7% in
1994 from 32.0% in 1993. Raw material prices increased during the last half of
1994, and at year-end were approximately 7% higher than the prior year.
Additionally, plant operating costs to comply with changing environmental,
health and safety regulations increased during 1994. The company was able to
manage the near-term impact of the higher raw material costs through operating
expense control.

Selling and administrative expenses increased less than 1% to $159.5
million in 1994. This increase was significantly lower than the company's
previous historical cost trend because of lower legal expenses and a decline in
the number of employees as a result of early retirements related to the
company's realignment initiative.

Research, testing and development expenses decreased $6.1 million or 4%
to $165.5 million in 1994. This decrease was primarily attributable to
completion in early 1994 of testing required for passenger car motor oil
specification upgrades, the decline in the number of employees resulting from
realignment and increased efficiencies in the product development process.

Primarily as a result of the above factors, consolidated revenues increased
$38.8 million more than the increase in total costs and expenses in 1994.

The company continued its program of selling its investment in Genentech
common stock. During 1994 and 1993, respectively, the company sold shares of
Genentech common stock resulting in pretax gains of $41.2 million and $42.4
million.

Other income-net increased $6.8 million primarily due to improved equity
earnings from the company's investment in Mycogen, including its agribusiness
joint venture, net of a gain on the sale of an agribusiness investment in 1993.

As discussed previously, the company conducts a significant amount of its
business outside of the United States and is, therefore, subject to certain
related risks including currency fluctuations. In 1994, there was not a
significant net earnings effect due to foreign currency fluctuations.

As a result of the above factors and a decrease in interest expense,
consolidated income before taxes increased $131.8 million from 1993. Excluding
the gain on the sales of Genentech stock and the 1993 special charge, income
before taxes increased $46.7 million or 29% from 1993. The company made
donations of Genentech common stock during 1994 (see Note 8 to the financial
statements) which reduced the company's 1994 effective tax rate by 2%. This
benefit is nonrecurring.

Excluding gains on the sales of Genentech common stock and the 1993 special
charge and accounting changes (discussed below), net income was $148.8 million
in 1994 compared with $113.5 million in 1993, and the related earnings per share
amounts improved by 35% to $2.26 in 1994 from $1.67 in 1993.

1993 RESULTS OF OPERATIONS

In 1993, consolidated revenues increased $61.9 million or 4% from 1992 after
excluding $88.6 million of Agrigenetics revenue in 1992. Selling prices
increased 4% as a result of price increases implemented in the fourth quarter of
1992 and the introduction late in 1993 of higher performing products to meet new
passenger car motor oil standards in the U.S. market. Favorable product mix
(including sales by Langer & Company acquired early in 1993) of 3% was offset by
unfavorable currency effects of 2% and volume decreases of 1%. North American
volume decreased 9% in 1993 from the record levels of volume in 1992 as a result
of a decrease in market share. The revenue impact of this volume decrease was
offset by an increase in sales of more profitable products. International volume
increased 6% over 1992 and accounts for approximately 60% of revenues.

Gross profit increased $30.4 million or 7% from $455.0 million in 1992
(excluding $35.3 million of Agrigenetics gross profit in 1992) primarily as a
result of the higher average selling prices. Gross profit as a percentage of
sales was 32.0% in 1993 compared with 31.2% (excluding Agrigenetics) in 1992.

Excluding Agrigenetics expenses of $29.1 million in 1992, selling and
administrative expenses increased $6.3 million or 4% in 1993 primarily because
of the acquisition of Langer. Technology expenses increased $30.3 million or 21%
in 1993 after excluding Agrigenetics expenses of $13.5 million from 1992. This
increase was a result of higher testing costs associated with customer test
programs to meet new industry performance standards for passenger car and diesel
engine oils and automatic transmission fluids.

As a result of the above factors and increased royalties, after excluding
Agrigenetics from 1992, total cost and ex-
<PAGE> 5
penses increased $5.9 million more than revenues increased
in 1993.

During 1993, the company recorded a special pretax charge of $86.3 million
and pretax gains of $42.4 million on the sale of Genentech common stock as
discussed above. Other income-net was $.5 million in 1993, compared with $11.9
million in 1992. Other income includes the company's share of equity losses in
Mycogen and the agribusiness joint venture. Mycogen recorded restructuring
charges and incurred weather-related problems in the Midwest which adversely
affected agribusiness results. The reduction in other income was attributable to
increased equity losses of $18.3 million in Mycogen and the agribusiness joint
venture, partially offset by increased gains on the sale of investments,
excluding Genentech, of $6.7 million.

Interest income decreased $3.2 million due to lower average balances of
cash and short-term investments. An increase in borrowings resulted in
slightly higher interest expense in 1993.

In 1993, European currencies weakened and the Japanese yen strengthened
resulting in an insignificant net earnings effect.

As a result of the above factors, income before income taxes decreased
$57.5 million in 1993 compared with 1992. Net income in 1993, excluding the
special charge, Genentech gain and the accounting changes discussed below,
decreased 9% to $113.5 million or $1.67 per share, from $124.6 million or $1.81
per share in 1992.

As described in Note 11 to the financial statements, effective January 1,
1993, the company adopted SFAS 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions." The company recorded the cumulative effect of
this accounting change of $79.9 million before taxes ($51.5 million or $.76 per
common share after taxes) in the first quarter of 1993. As a result of this
accounting change, postretirement health care and life insurance costs increased
$8.1 million ($.08 per share after taxes) in 1993. This expense is allocated
among the various cost and expense categories in the consolidated statements of
income. SFAS 106 has no effect on cash flows since the company continues to pay
claims as incurred.

As described in Note 9 to the financial statements, effective January 1,
1993, the company also adopted SFAS 109, "Accounting for Income Taxes." The
cumulative effect of this accounting change reduced net deferred tax liabilities
and increased net income in 1993 by $12.1 million or $.18 per share. The
positive effect of adopting SFAS 109 was primarily attributable to more
favorable treatment of the deferred income taxes on intercompany profit in
inventory. SFAS 109 has no effect on cash flows.

RETURN ON AVERAGE SHAREHOLDERS' EQUITY

Return on average shareholders' equity was 18% in 1995, 22% in 1994 and 6% in
1993. Excluding Genentech gains from each year, the 1995 asset impairment charge
and the 1993 special charge and accounting changes, return on average
shareholders' equity was 16% in 1995, 19% in 1994 and 14% in 1993.

1991 1992 1993 1994 1995
---- ---- ---- ---- ----

<S> <C> <C> <C> <C> <C>
Return on Equity (percent) 16% 15% 14% 19% 16%

</TABLE>

(Excluding Genentech gains, the 1995 asset impairment charge and the 1993
special charge and accounting changes)

WORKING CAPITAL, LIQUIDITY AND CAPITAL RESOURCES

The company's cash flows for the years 1993 through 1995 are presented in the
consolidated statements of cash flows. Cash provided from operating activities
during 1995 was $187.4 million or 19% greater than the $156.8 million gener-
ated in 1994. This increase is primarily attributable to a positive change in
the excess of cash received from customers over the amount paid to suppliers
and employees and a lower amount of income taxes paid due to the timing of
payments and lower income earned in 1995, which was somewhat offset by higher
working capital requirements.

1991 1992 1993 1994 1995
---- ---- ---- ---- ----

<S> <C> <C> <C> <C> <C>
Cash Provided from Operating
Activities (millions)
Cash Provided $192.1 $135.2 $162.5 $156.8 $187.4

</TABLE>

Net cash outflow from investing activities was $149.0 million in 1995, an
increase of $31.8 million primarily due to higher capital expenditures. Capital
expenditures were $189.3 million during 1995, an increase of 18% over 1994.
Capital expenditures were made primarily at facilities in the United States and
France. Approximately 70% of the 1995 capital expenditures pertained to
manufacturing plants to enhance or maintain production capabilities, including
maintaining facilities in compliance with environmental and safety regulations.

<PAGE> 6
In 1995, capital spending for environmental and safety projects was $37
million, which was substantially higher than the approximate $20 million spent
in both 1994 and 1993, due to the timing as to the completion of various
projects. The remaining 30% of capital expenditures was largely for construction
of new technical and administrative facilities at the company's headquarters.
Capital spending declined from $106.0 million in the first half to $83.3 million
in the second half of 1995 due to the completion of several major projects.
Future capital spending will decline from the peak levels of 1995 and is
expected to be lower than $140 million for 1996.

Over the past several years the company has periodically sold shares of its
investment in Genentech common stock into the open market. During the first half
of 1995, the company sold all of its remaining shares of Genentech common stock
and received proceeds of $40.2 million. Proceeds from the sale of Genentech
common stock were $43.6 million in 1994 and $44.5 million in 1993. In addition,
proceeds from sale of investments in 1993 included $17.0 million from the sale
and redemption of portions of the company's agribusiness investments.

In June 1995, the company publicly issued $100 million of 7.25% debentures
due at the end of 30 years. The net proceeds from this debt issuance were used
to repay a portion of the commercial paper borrowings then outstanding. The
percent of total debt to capitalization (shareholders' equity plus short-term
and long-term debt) was 23% at December 31, 1995, compared with 17% at December
31, 1994. Management plans to maintain the percentage of debt to capitalization
within a range of 20 to 25 percent to leverage its financial strength while
still retaining financial flexibility for future opportunities.

1991 1992 1993 1994 1995
---- ---- ---- ---- ----

<S> <C> <C> <C> <C> <C>
Capitalization (millions)
Equity $794.5 $819.4 $732.2 $832.0 $849.0
Total Debt $ 67.8 $ 48.4 $ 69.6 $167.9 $247.1

</TABLE>

The company maintains an active share repurchase program and at December
31, 1995, had 3.0 million shares remaining under its current share repurchase
authorizations. During the past three years, the net proceeds from the sale of
Genentech common stock and a portion of cash generated from operations were used
to repurchase common shares of the company. The company has expended $66.6
million, $68.3 million and $67.1 million during 1995, 1994 and 1993,
respectively, to repurchase approximately 9% of its shares outstanding over the
past three years. During 1996, the company's share repurchase program will
consist of shares repurchased with approximately $110 million of net cash
proceeds realized from the sale of its Mycogen investment as discussed below.

Primarily as a result of these activities and the payment of dividends,
total debt, net of cash and short-term investments, increased $85.0 million from
December 31, 1994 to $216.5 million at December 31, 1995.

The company remains in a strong financial position. The ratio of current
assets to current liabilities remained relatively constant at 2.4:1 at December
31, 1995 compared with 2.5:1 at December 31, 1994. At December 31, 1995, the
company had unused revolving credit agreements and other credit lines
aggregating $95 million. As described in Note 5 to the financial statements, the
company has the ability to refinance on a long-term basis $56.6 million of its
outstanding commercial paper under existing revolving credit agreements.
Management believes the company's credit facilities and internally generated
funds will be sufficient to meet its future capital needs.

The company is involved in patent litigation with Exxon Corporation in
various countries. In September 1995, the United States Court of Appeals for the
Federal Circuit in Washington, D.C., overturned a Houston, Texas, jury verdict
that the company had infringed an Exxon patent pertaining to an oil soluble
copper additive component and entered judgment in favor of the company as a
matter of law. This ruling also vacated an injunction and overturned a $129
million judgment entered against the company in February 1994. In February 1996,
the same court in Washington, D.C., denied Exxon's request for rehearing. The
company does not know whether Supreme Court review will be sought by Exxon or
whether the Supreme Court would grant any such review. In a separate patent case
in Canada, liability against Exxon and in favor of the company has been made by
the Canadian court. However, a reasonable estimation of the company's potential
recovery for damages can not be made at this time as the outcome of the appeals
process for the award to the company of $15 million (Canadian) in penalty
damages and the determination of the compensation damages by the Canadian courts
is pending. Refer to Note 18 to the financial statements for further information
regarding litigation with Exxon.

One of management's initiatives involved the continued restructuring of the
company's Agribusiness investments. On February 20, 1996, the company sold all
of its investment in

<PAGE> 7
Mycogen Corporation to DowElanco for cash of $126.2 million, completing the
divestiture of its agribusiness assets other than those relating to the
specialty vegetable oil operations. The net cash proceeds from this sale, after
taxes and related transaction costs, approximate $110 million. Also, on January
15, 1996, the company sold certain rights in its SVO oil seed technology to
Mycogen for $8.0 million, of which $2.0 million was paid in January 1996, $2.5
million is payable in January 1997 and $3.5 million is payable in January 1998.
(See Notes 4 and 16 to the financial statements.)

Independent Auditors' Report [DELOITTE & TOUCHE LLP LOGO]

To the Shareholders and Board of Directors of
The Lubrizol Corporation

We have audited the accompanying consolidated balance sheets of The Lubrizol
Corporation and its subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of income, shareholders' equity, and cash flows
for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of The Lubrizol Corporation and its
subsidiaries at December 31, 1995 and 1994, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1995 in conformity with generally accepted accounting principles.

As discussed in Notes 9 and 11 to the financial statements, in 1993 the Company
changed its method of accounting for income taxes to conform with Statement of
Financial Accounting Standards ("SFAS") No. 109 and its method of accounting for
postretirement benefits to conform with SFAS No. 106.

/s/ Deloitte and Touche LLP

Cleveland, Ohio
February 20, 1996

<PAGE> 8

Consolidated Statements of Income
<TABLE>
<CAPTION>

Year Ended December 31
----------------------
(In Thousands of Dollars Except Per Share Data) 1995 1994 1993
- -------------------------------------------------------------------------------------------

<S> <C> <C> <C>
Net sales ..................................... $ 1,657,821 $ 1,592,750 $ 1,517,631
Royalties and other revenues .................. 5,773 6,244 7,869
----------- ----------- -----------
Total revenues ....................... 1,663,594 1,598,994 1,525,500

Cost of sales ................................. 1,125,386 1,072,025 1,032,199
Selling and administrative expenses ........... 163,493 159,459 158,506
Research, testing and development expenses .... 179,649 165,480 171,540
----------- ----------- -----------
Total cost and expenses .............. 1,468,528 1,396,964 1,362,245

Asset impairment and special charge ........... (9,489) (86,303)
Gain on sale of Genentech ..................... 38,459 41,235 42,443
Other income - net ............................ 7,150 7,332 537
Interest income ............................... 4,764 4,011 3,873
Interest expense .............................. (10,376) (3,149) (4,154)
----------- ----------- -----------

Income before income taxes .................... 225,574 251,459 119,651
Provision for income taxes .................... 73,959 75,884 34,676
----------- ----------- -----------
Income before accounting changes .............. 151,615 175,575 84,975
Cumulative effect of accounting changes ....... (39,375)
----------- ----------- -----------
Net income .................................... $ 151,615 $ 175,575 $ 45,600
=========== =========== ===========

Per Common Share:
Income before accounting changes ........... $ 2.37 $ 2.67 $ 1.25
Cumulative effect of accounting changes .... (.58)
----------- ----------- -----------
Net income per share .......................... $ 2.37 $ 2.67 $ .67
=========== =========== ===========

Dividends per share ........................... $ .93 $ .89 $ .85
=========== =========== ===========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

<PAGE> 9

Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31
-----------

(In Thousands of Dollars) 1995 1994
- -----------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Cash and short-term investments ........................................... $ 30,579 $ 36,379
Receivables ............................................................... 255,377 250,392
Inventories ............................................................... 310,539 298,331
Other current assets ...................................................... 43,199 39,286
---------- ----------
Total current assets ............................................. 639,694 624,388
---------- ----------
Property and equipment - at cost .......................................... 1,447,051 1,266,249
Less accumulated depreciation ............................................. 770,235 707,505
---------- ----------
Property and equipment - net ..................................... 676,816 558,744
---------- ----------
Investments in nonconsolidated companies .................................. 100,655 138,013
Other assets .............................................................. 74,855 73,219
---------- ----------
TOTAL .............................................. $1,492,020 $1,394,364
========== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term debt and current portion of long-term debt ..................... $ 52,685 $ 53,700
Accounts payable .......................................................... 125,120 114,244
Income taxes and other current liabilities ................................ 87,786 85,589
---------- ----------
Total current liabilities ........................................ 265,591 253,533
---------- ----------
Long-term debt ............................................................ 194,423 114,161
Postretirement health care obligation ..................................... 102,653 98,453
Noncurrent liabilities .................................................... 53,223 68,799
Deferred income taxes ..................................................... 27,147 27,379
---------- ----------
Total liabilities ................................................ 643,037 562,325
---------- ----------
Contingencies and commitments
Preferred stock without par value - unissued
Common shares without par value - Outstanding 62,951,288 shares in 1995
and 64,844,560 shares in 1994 ........................................ 83,254 84,059
Retained earnings ......................................................... 762,747 734,533
Other shareholders' equity ................................................ 2,982 13,447
---------- ----------
Total shareholders' equity ....................................... 848,983 832,039
---------- ----------
TOTAL .................................................. $1,492,020 $1,394,364
========== ==========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

<PAGE> 10

Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
Year Ended December 31
----------------------
(In Thousands of Dollars) 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------

CASH PROVIDED FROM (USED FOR):
OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net income ........................................................ $ 151,615 $ 175,575 $ 45,600
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization ................................ 74,247 65,934 61,674
Deferred income taxes ........................................ 16,899 19,797 (32,751)
(Earnings) losses, from equity investees, net of distributions 424 (382) 18,138
Asset impairment and special charge .......................... 9,489 86,303
Gain on sale of investments .................................. (38,459) (41,235) (55,617)
Cumulative effect of accounting changes ...................... 39,375
Change in current assets and liabilities:
Receivables .............................................. (386) (20,682) (16,066)
Inventories .............................................. (7,885) (3,150) (14,043)
Accounts payable and accrued expenses .................... (3,768) (17,745) 16,056
Other current assets ..................................... (175) (12,921) 7,359
Change in noncurrent liabilities ............................. (2,486) 3,246 12,370
Other items - net ............................................ (12,153) (11,600) (5,887)
--------- --------- ---------
Total operating activities ............................... 187,362 156,837 162,511

INVESTING ACTIVITIES:
Proceeds from sale or redemption of investments ................... 40,160 43,582 61,494
Capital expenditures .............................................. (189,259) (160,527) (127,855)
Acquisitions and investments in nonconsolidated companies ......... (3,521) (1,734) (40,346)
Other - net ....................................................... 3,654 1,488 (87)
--------- --------- ---------
Total investing activities ............................... (148,966) (117,191) (106,794)

FINANCING ACTIVITIES:
Short-term borrowing (repayment) .................................. (18,676) 38,359 168
Long-term borrowing ............................................... 111,990 56,741 36,048
Long-term repayment ............................................... (14,672) (2,370) (23,146)
Dividends paid .................................................... (59,414) (58,588) (57,608)
Common shares purchased, net of options exercised ................. (64,792) (64,372) (64,073)
--------- --------- ---------
Total financing activities ............................... (45,564) (30,230) (108,611)

Effect of exchange rate changes on cash ........................... 1,368 2,743 521
--------- --------- ---------
Net increase (decrease) in cash and short-term investments ........ (5,800) 12,159 (52,373)
Cash and short-term investments at the beginning of year .......... 36,379 24,220 76,593
--------- --------- ---------
CASH AND SHORT-TERM INVESTMENTS AT THE END OF YEAR ................ $ 30,579 $ 36,379 $ 24,220
========= ========= =========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

<PAGE> 11

Consolidated Statements of Shareholders' Equity
<TABLE>
<CAPTION>

Shareholders' Equity
-----------------------------------
Number of Other
Shares Common Retained Shareholders'
Outstanding Shares Earnings Equity
- --------------------------------------------------------------------------------------------------------
(In Thousands of Dollars)

<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1992 ....................... 68,450,586 $ 80,274 $ 759,906 $(20,818)
Net income 1993 .................................. 45,600
Cash dividends ................................... (57,608)
Translation adjustment for 1993 .................. (11,045)
Common shares - Treasury:
Shares purchased .............................. (2,075,645) (2,479) (64,629)
Shares issued upon exercise of stock options .. 215,087 3,035
---------- -------- --------- --------

BALANCE, DECEMBER 31, 1993 ....................... 66,590,028 80,830 683,269 (31,863)
Net income 1994 .................................. 175,575
Cash dividends ................................... (58,588)
Change in unrealized gain on marketable securities 23,169
Translation adjustment for 1994 .................. 22,141
Common shares - Treasury:
Shares purchased .............................. (2,007,721) (2,528) (65,723)
Shares issued upon exercise of stock options .. 208,210 3,879
Other ......................................... 54,043 1,878
---------- -------- --------- --------

BALANCE, DECEMBER 31, 1994 ....................... 64,844,560 84,059 734,533 13,447
Net income 1995 .................................. 151,615
Cash dividends ................................... (59,414)
Change in unrealized gain on marketable securities (23,169)
Translation adjustment for 1995 .................. 12,704
Common shares - Treasury:
Shares purchased .............................. (1,982,969) (2,604) (63,987)
Shares issued upon exercise of stock options .. 89,697 1,799
---------- -------- --------- --------
BALANCE, DECEMBER 31, 1995 ....................... 62,951,288 $ 83,254 $ 762,747 $ 2,982
========== ======== ========= ========

</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

<PAGE> 12

Notes To Financial Statements
(In Thousands of Dollars Unless Otherwise Indicated)

NOTE 1 - NATURE OF OPERATIONS

The company's sales and receivables are concentrated in the oil and chemical
industries. The company's additive customers consist primarily of oil refiners
and independent oil blenders and are located in more than 100 countries.
Approximately 60% of the company's sales are made to customers outside of North
America. The ten largest customers, most of which are international oil
companies and a number of which are groups of affiliated entities, comprised
approximately 44% of consolidated sales in 1995, 45% in 1994 and 44% in 1993.
Although the largest single group each year accounted for 10% of sales in 1995
and 9% in 1994 and 1993, these customers are made up of a number of separate
entities that the company believes make independent purchasing decisions.

NOTE 2 - ACCOUNTING POLICIES

CONSOLIDATION - The consolidated financial statements include the accounts of
The Lubrizol Corporation and its majority-owned subsidiaries. For
nonconsolidated companies (affiliates), the equity method of accounting is used
when ownership, unless temporary, exceeds 20% and when the company has the
ability to exercise significant influence over the policies of the investee.
Other affiliates are carried at cost or fair market value (see Note 4).

ESTIMATES - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions pending completion of related events. These estimates and
assumptions affect the amounts reported at the date of the financial statements
for assets, liabilities, revenues and expenses and the disclosure of
contingencies. Actual results could differ from those estimates.

ACCOUNTING CHANGES - Effective January 1, 1993, the company changed its method
of accounting for postretirement benefits to conform with Statement of Financial
Accounting Standards (SFAS) 106 (see Note 11) and its method of accounting for
income taxes to conform with SFAS 109 (see Note 9). The cumulative effect at
adoption of these changes in accounting principles, net of tax, is separately
reported on the Consolidated Statements of Income. Effective January 1, 1994,
the company changed its method of accounting for certain investments in
marketable securities to conform to SFAS 115 (see Note 4).

CASH EQUIVALENTS - The company generally invests its excess cash in short-term
investments with various banks and financial institutions. Short-term
investments are cash equivalents as they are part of the cash management
activities of the company and are comprised primarily of investments having
maturities when purchased of less than three months.

INVENTORIES - Inventories are stated at cost which is not in excess of market.
Cost of inventories is determined by the last-in, first-out (LIFO) method in the
United States and the first-in, first-out (FIFO) method elsewhere. The average
cost method is used for inventories of specialty vegetable oil.

DEPRECIATION AND AMORTIZATION - Accelerated depreciation methods are used in
computing depreciation on certain machinery and equipment which comprise
approximately 40% of the depreciable assets. The remaining assets are
depreciated using the straight-line method, including all machinery and
equipment placed in service after January 1, 1993. The estimated useful lives
are 10 to 40 years for buildings and land improvements and range from 3 to 20
years for machinery and equipment. Amortization of intangible and other assets
is on a straight-line method over periods ranging from 5 to 25 years.

For income tax purposes, different methods and rates are used in certain
instances.

RESEARCH, TESTING AND DEVELOPMENT - Research, testing and development costs are
expensed when incurred. Research and development expenses, excluding testing,
were

<PAGE> 13

$104.9 million, $90.7 million and $88.5 million in 1995, 1994 and 1993,
respectively.

FOREIGN CURRENCY TRANSLATION - The assets and liabilities of non-U.S.
subsidiaries are translated into U.S. dollars at exchange rates in effect at the
balance sheet date. Operating results are translated at weighted average
exchange rates in effect during the period. Net unrealized translation gains
(losses) are recorded as a component of other shareholders' equity and totaled
$2,982, $(9,722) and $(31,863) at December 31, 1995, 1994 and 1993,
respectively.

PER SHARE AMOUNTS - Net income per share has been computed by dividing net
income by the average number of common shares outstanding during the period. Net
income per share has not been adjusted for the effect of stock options as the
dilution effect would be less than 3% in any year.

NOTE 3 - INVENTORIES

<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Finished products ............................ $102,628 $102,605
Products in process .......................... 96,061 98,105
Raw materials ................................ 89,267 77,626
Supplies and engine test parts ............... 22,583 19,995
-------- --------
$310,539 $298,331
======== ========
</TABLE>

Inventories on the LIFO method were 26% and 27% of consolidated inventories at
December 31, 1995 and 1994, respectively. The current replacement cost of these
inventories exceeded the LIFO cost at December 31, 1995 and 1994, by $51.0
million and $49.9 million, respectively.

NOTE 4 - INVESTMENTS IN NONCONSOLIDATED COMPANIES

<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Investments carried at equity ................ $ 60,029 $ 60,523
Investments carried at cost .................. 40,626 37,890
Investments classified as
available-for-sale ......................... 39,600
-------- --------
$100,655 $138,013
======== ========
</TABLE>

Included within investments carried at equity is the company's common stock
investment in Mycogen Corporation and Agrigenetics Inc. (AGI), a joint venture
between the company and Mycogen, which have a book carrying value of $40.3
million at December 31, 1995. The company's investment in Mycogen Series A
Preferred Stock is included in investments carried at cost in the amount of
$31.5 million, including preferred dividends, at December 31, 1995. (Refer to
Note 16 for subsequent event related to sale of these investments.)

The company also holds investments in nonconsolidated companies, including
certain investments in securities of publicly traded companies that are
accounted for on the cost basis due to restrictions placed on such securities.
These marketable investments have quoted market values which exceed the book
carrying values by $1.1 million at December 31, 1995.

The company's investment in Genentech Inc. redeemable common stock comprised
substantially all of its investments classified as available-for-sale. Over the
past several years the company periodically sold its shares of Genentech common
stock into the open market. During the first half of 1995, the company sold all
of its remaining shares of Genentech common stock and received proceeds of $40.2
million, generating gross realized gains of $38.5 million. Sales of Genentech
common stock generated proceeds of $43.6 million and $44.5 million and gross
realized gains of $41.2 million and $42.4 million in 1994 and 1993,
respectively. On an after-tax basis these gains contributed $.39 per share in
1995 and $.41 per share in 1994 and 1993, respectively. The company determined
the gross realized gains using the average cost method.

At December 31, 1994, investments classified as available-for-sale had an
aggregate fair value of $39.6 million resulting in gross unrealized gains of
$36.2 million and unrealized losses of $.6 million which increased shareholders'
equity by $23.2 million after tax.

NOTE 5 - SHORT-TERM AND LONG-TERM DEBT

<TABLE>
<CAPTION>
1995 1994
--------- ---------
Long-term debt consists of:
<S> <C> <C>
7.25% debentures, due 2025 .......... $ 100,000
Debt supported by long-term
banking arrangements:
Commercial paper at weighted
average rates of approximately 6% 56,625 $ 56,625
6.5% Marine terminal refunding
revenue bonds, due 2000 ......... 18,375 18,375
7.875% Industrial development
revenue bonds, due 2000 ........... 1,000 1,000
Term loans:
Yen denominated, at 3.8% to 5.8%,
due 1996-2002 ................... 21,508 24,898
Deutsche mark denominated,
at 6.78%, due 1996 .............. 16,748 15,484
Other (5.0% in 1995 and 1994) ....... 365 325
--------- ---------
214,621 116,707
Less current portion ................ (20,198) (2,546)
--------- ---------
$ 194,423 $ 114,161
========= =========
Short-term debt consists of:
Commercial paper at weighted
average rates of approximately 6% . $ 17,375 $ 46,375
Other short-term debt at weighted
average rates of 2.1% and 5.2% .... 15,112 4,779
Current portion of long-term debt ... 20,198 2,546
--------- ---------
$ 52,685 $ 53,700
========= =========

</TABLE>

<PAGE> 14
On June 26, 1995, the company publicly issued debentures in the aggregate
principal amount of $100 million. The debentures are unsecured, senior
obligations of the company that mature on June 15, 2025, and bear interest at an
annualized rate of 7.25% payable semi-annually on June 15 and December 15 of
each year. The debentures are not redeemable prior to maturity and are not
subject to any sinking fund requirements.

Commercial paper debt is due within one year. The company has credit facilities,
which were unused at December 31, 1995, aggregating $95 million, including $75
million in committed revolving credit agreements which would permit the company
to borrow at or below the U.S. prime rate. These facilities permit the company
to refinance for a period beyond one year the Marine Terminal Refunding Revenue
Bonds, whose bondholders have the right to put the bonds back to the company,
and $56.6 million of commercial paper outstanding. Accordingly, the company has
classified these balances as long-term debt.

Amounts due on long-term debt are $20.2 million in 1996, $2.5 million in 1997,
$11.6 million in 1998, $3.4 million in 1999, $75.5 million in 2000, which
includes $56.6 million of commercial paper, and $101.4 million thereafter.

The company has an interest rate swap agreement that effectively converts
floating rate interest payable on $18.4 million of Marine Terminal Refunding
Revenue Bonds due July 1, 2000, to a fixed rate of 6.5%. In addition, during
1995, the company entered into interest rate swap agreements that convert $50
million of variable rate borrowings to a fixed rate of 7.6% for up to 10 years.

Interest paid, net of amounts capitalized, amounted to $9.8 million, $3.0
million and $3.9 million during 1995, 1994 and 1993, respectively. The company
capitalizes interest on qualifying capital projects. The amount of interest
capitalized during 1995, 1994 and 1993 amounted to $4.3 million, $3.8 million
and $2.1 million, respectively.

NOTE 6 - OTHER BALANCE SHEET INFORMATION

<TABLE>
<CAPTION>
Receivables: 1995 1994
-------- --------
<S> <C> <C>
Customers ............................ $221,557 $219,475
Affiliates ........................... 9,993 9,174
Other ................................ 23,827 21,743
-------- --------
$255,377 $250,392
======== ========
</TABLE>

Receivables are net of allowance for doubtful accounts of
$2.2 million in 1995 and $2.6 million in 1994.

<TABLE>
<CAPTION>
Other Current Assets: 1995 1994
---------- ----------
<S> <C> <C>
Deferred income taxes .................... $ 23,844 $ 20,232
Other .................................... 19,355 19,054
---------- ----------
$ 43,199 $ 39,286
========== ==========

Property and Equipment: 1995 1994
---------- ----------
Land and improvements .................... $ 101,457 $ 90,069
Buildings and improvements ............... 264,580 217,002
Machinery and equipment .................. 971,965 828,340
Construction in progress ................. 109,049 130,838
---------- ----------
$1,447,051 $1,266,249
========== ==========
</TABLE>

Depreciation expense was $68.8 million in 1995, $61.3 million in 1994 and $59.6
million in 1993.
<TABLE>
<CAPTION>

Other Assets: 1995 1994
------- -------
<S> <C> <C>
Goodwill and other intangibles ................. $45,943 $41,381
Deferred income taxes .......................... 9,928 18,229
Other .......................................... 18,984 13,609
------- -------
$74,855 $73,219
======= =======
</TABLE>

Accumulated amortization of intangible and other assets was $24.5 million and
$19.0 million at December 31, 1995 and 1994, respectively.

<TABLE>
<CAPTION>
Accounts Payable: 1995 1994
-------- --------
<S> <C> <C>
Trade ...................................... $118,639 $109,151
Affiliates ................................. 6,481 5,093
-------- --------
$125,120 $114,244
======== ========

Income Taxes and Other
Current Liabilities: 1995 1994
-------- --------
Employee compensation ...................... $ 33,256 $ 33,763
Income taxes ............................... 10,707 10,504
Taxes other than income .................... 13,912 11,030
Other ...................................... 29,911 30,292
-------- --------
$ 87,786 $ 85,589
======== ========

Noncurrent Liabilities: 1995 1994
-------- --------
Employee benefits .......................... $ 33,998 $ 35,687
Other ...................................... 19,225 33,112
-------- --------
$ 53,223 $ 68,799
======== ========
</TABLE>

<PAGE> 15

NOTE 7 - SHAREHOLDERS' EQUITY

The company has 147 million authorized shares consisting of 2 million shares of
Serial Preferred Stock, 25 million shares of Serial Preference Shares and 120
million Common Shares, each of which is without par value. The outstanding
Common Shares shown on the balance sheets exclude Common Shares held in treasury
of 23,244,606 and 21,351,334 at December 31, 1995 and 1994, respectively.

The company has a shareholder rights plan under which one right to buy one-half
Common Share has been distributed for each Common Share held. The rights may
become exercisable under certain circumstances involving actual or potential
acquisitions of 20% or more of the Common Shares by a person or affiliated
persons who acquire such stock without complying with the requirements of the
company's articles of incorporation. The rights would entitle shareholders,
other than such person or affiliated persons, to purchase Common Shares of the
company or of certain acquiring persons at 50% of then current market value. At
the option of the directors, the rights may be exchanged for Common Shares, and
may be redeemed in cash, securities or other consideration. The rights will
expire in 1997 unless earlier redeemed.

Under another shareholder rights plan, each holder of Common Shares has one
right to buy shares of Serial Preferred Stock for each Common Share held. The
rights may become exercisable under certain circumstances involving actual or
potential acquisitions of 20% or more of the company's Common Shares by a person
or affiliated persons. The rights would entitle shareholders, other than such
person or affiliated persons, to purchase shares of Serial Preferred Stock at
the purchase price of one dollar plus 25 rights per share. The dividend and
redemption value of the Serial Preferred Stock would be determined in relation
to after-tax amounts which have been or may be recovered by the company from
Exxon or its affiliates as a result of certain patent claims. The rights will
expire in November 1996 unless earlier redeemed.

NOTE 8 - OTHER INCOME

Other income - net consists of the following:

<TABLE>
<CAPTION>
1995 1994 1993
-------- ------ --------
<S> <C> <C> <C>
Equity earnings (losses)
of nonconsolidated
companies .......................... $ (2,081) $ 2,972 $(15,966)
Gain on donations of
Genentech stock .................... 13,967
Donations of Genentech
stock to The Lubrizol
Foundation ......................... (14,581)
Gain on sale of investments,
excluding Genentech ................ 13,174
Gain on investee stock
issuance (Note 16) ................. 4,530
Other - net .......................... 4,701 4,974 3,329
-------- ------ --------
$ 7,150 $ 7,332 $ 537
======== ======= ========
</TABLE>

The gain (loss) pertaining to activity with Mycogen Corporation (see Note 16),
reflected within the above table of other income, amounted to $.6 million in
1995, $1.4 million in 1994 and $(5.8) million in 1993.

NOTE 9 - INCOME TAXES

Effective January 1, 1993, the company adopted SFAS 109, which is an asset and
liability approach that requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been
recognized in the company's financial statements and tax returns. In estimating
future tax consequences, SFAS 109 generally considers all expected future events
other than changes in tax laws or rates not yet enacted. The cumulative effect
of adopting SFAS 109 at January 1, 1993, increased net income by $12.1 million,
or $.18 per share.

Income before income taxes consists of the following:
<TABLE>
<CAPTION>

1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
United States ............... $136,801 $163,508 $ 68,673
Foreign ..................... 88,773 87,951 50,978
-------- -------- --------
Total ....................... $225,574 $251,459 $119,651
======== ======== ========
</TABLE>

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
1995 1994 1993
------- -------- --------
Current:
<S> <C> <C> <C>
United States .............. $28,294 $ 28,698 $ 31,560
Foreign .................... 28,766 27,389 34,774
------- -------- --------
57,060 56,087 66,334
------- -------- --------
Deferred:
United States .............. 8,334 12,605 (15,306)
Foreign .................... 8,565 7,192 (16,352)
------- -------- --------
16,899 19,797 (31,658)
------- -------- --------
Total ...................... $73,959 $ 75,884 $ 34,676
======= ======== ========
</TABLE>
<PAGE> 16

Foreign taxes include withholding taxes. The United States tax provision
includes the U.S. tax on foreign income distributed to the company. U.S. and
foreign income tax rate changes occurring during the periods presented did not
have a material effect on the company's provision for income taxes. The
differences between the provision for income taxes at the U.S. statutory rate
and the tax shown in the consolidated statements of income are summarized as
follows:

1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Tax at statutory
rate of 35% ..................... $ 78,951 $ 88,011 $ 41,878
Foreign sales corporation
earnings ........................ (4,389) (3,885) (2,964)
Equity income ..................... (856) (812) (1,551)
Contribution of appreciated
property ........................ (5,050)
Other - net ....................... 253 (2,380) (2,687)
-------- -------- --------
Provision for
income taxes .................... $ 73,959 $ 75,884 $ 34,676
======== ======== ========
</TABLE>

The components of deferred tax assets (liabilities) as of December 31 are as
follows:

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Accrued compensation
and benefits .................... $ 40,313 $ 42,468 $ 42,425
Intercompany profit
in inventory .................... 13,285 12,055 11,208
Net operating losses
carried forward, net of
valuation allowance ............. 5,519 5,660 6,668
Equity investments and
partnerships .................... 3,864 1,495 (2,003)
Depreciation and other
basis differences ............... (55,094) (40,111) (28,238)
Marketable securities
valuation ....................... (12,476)
Undistributed foreign
equity income ................... (4,458) (4,124) (3,877)
Other - net ....................... (309) 3,174 13,892
-------- -------- --------
Net deferred tax assets ........... $ 3,120 $ 8,141 $ 40,075
======== ======== ========
</TABLE>

At December 31, 1995, certain foreign subsidiaries have net operating loss carry
forwards of $21.4 million for income tax purposes, of which $11.6 million
expires in years 1997 through 2000 and $9.8 million has no expiration. After
evaluating tax planning strategies and historical and projected profitability, a
valuation allowance of $3.6 million has been recognized in 1995 to reduce the
deferred tax assets related to those carryforwards to the amount expected to be
realized.

U.S. income taxes or foreign withholding taxes are not provided on undistributed
earnings of foreign subsidiaries, which are considered to be indefinitely
reinvested in the operations of such subsidiaries. The amount of such earnings
was approximately $320.2 million at December 31, 1995. Determination of the net
amount of unrecognized U.S. income tax with respect to these earnings is not
practicable.

Income taxes paid during 1995, 1994 and 1993 amounted to $56.9 million, $70.9
million and $61.2 million, respectively.

NOTE 10 - PENSION AND PROFIT SHARING PLANS

The company has retirement plans, including noncontributory defined benefit
pension plans and a profit sharing plan, covering most employees in the United
States and at non-U.S. subsidiaries. Pension benefits are based on years of
service and the employee's compensation. The company's funding policy in the
United States is to contribute amounts to satisfy the Internal Revenue Service
funding standards and elsewhere to fund amounts in accordance with local
regulations. Several defined benefit plans are unfunded. Plan assets are
invested principally in marketable equity securities and fixed income
instruments.

Expense for all retirement plans was $20.7 million in 1995, $24.1 million in
1994 and $25.1 million in 1993, including profit sharing contributions in the
U.S. of $4.4 million in 1995, $5.7 million in 1994 and $3.8 million in 1993.

Net periodic pension cost of U.S. and significant international defined benefit
plans consists of:

1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Service cost - benefits
earned during period ............ $ 10,089 $ 11,454 $ 10,107
Interest cost on projected
benefit obligation .............. 17,804 16,769 16,115
Actual return on
plan assets ..................... (47,965) 1,510 (24,830)
Net amortization
and deferral .................... 31,833 (14,695) 16,363
-------- -------- --------
Net periodic
pension cost .................... $ 11,761 $ 15,038 $ 17,755
======== ======== ========
</TABLE>

<PAGE> 17

Net periodic pension cost for 1993 reflects higher charges resulting from the
company's realignment and early retirement programs accounted for in the
special charge (see Note 17).

The weighted average assumptions used at December 31 were:

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Discount rate for
determining
funded status ................... 7.3% 8.2% 7.2%
Compensation increase ............. 4.8% 5.2% 5.1%
Return on plan assets ............. 8.8% 8.6% 8.5%
</TABLE>

The funded status of such defined benefit pension plans and the amounts
recognized in the consolidated balance sheets at December 31 are as follows:

<TABLE>
<CAPTION>
1995 1994
-------------------- -----------------------
Assets Accum. Assets Accum.
Exceed Benefits Exceed Benefits
Accum Exceed Accum. Exceed
Benefits Assets Benefits Assets
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Fair value of
plan assets ................ $ 234,819 $ 6,328 $ 180,905 $ 6,273
Projected benefit
obligation ................. (211,709) (31,724) (186,988) (36,599)
--------- -------- --------- --------
Plan assets in
excess of
(less than)
projected benefit
obligation ................. 23,110 (25,396) (6,083) (30,326)
Unrecognized net
transition
obligation
(asset) .................... (13,206) 4,513 (14,871) 3,531
Unrecognized net
loss (gain) ................ (7,508) (611) 14,408 1,670
Unrecognized
prior service cost 14,208 3,210 15,299 4,222
Minimum liability
adjustment ................. (906) (983)
--------- -------- --------- --------
Accrued pension
asset (liability) .......... $ 16,604 $(19,190) $ 8,753 $(21,886)
========= ======== ========= ========
Accumulated
benefit
obligation ................. $ 152,714 $ 23,928 $ 138,258 $ 26,020
========= ======== ========= ========
Vested benefits .............. $ 146,672 $ 20,170 $ 133,880 $ 21,901
========= ======== ========= ========
</TABLE>

NOTE 11 - POSTRETIREMENT HEALTH CARE

The company provides certain postretirement benefits other than pensions,
primarily health care, for retired employees. Currently, substantially all of
the company's full-time employees in the U.S. become eligible for these benefits
after attaining specified years of service and age 55 at retirement.
Participants contribute a portion of the cost of such benefits. The company's
postretirement health care plans are not funded.

Effective January 1, 1993, the company adopted SFAS 106 which requires the
company to accrue the estimated cost of retiree benefit payments during the
years the employee provides services. The company elected to immediately
recognize the cumulative effect at January 1, 1993 of this change in accounting
principle and recorded a liability for the accumulated postretirement benefit
obligation of $79.9 million, an increase in deferred income tax assets of $28.4
million and a decrease in net income of $51.5 million ($.76 per share).

The status of the U.S. health care plans at December 31 is as follows:

<TABLE>
<CAPTION>
1995 1994
--------- -------
<S> <C> <C>
Accumulated postretirement
benefit obligations:
Retirees ...................................... $ 27,915 $33,778
Fully eligible active
plan participants ........................... 16,104 16,941
Other active plan participants ................ 20,004 18,724
--------- -------
Total accumulated postretirement
benefit obligation .......................... 64,023 69,443
Unrecognized net (loss) gain .................. (3,503) 7,949
Unrecognized net reduction in
prior service costs ......................... 40,274 20,036
--------- -------
Accrued postretirement
health care costs ........................... $ 100,794 $97,428
========= =======
</TABLE>

In late 1994, the company amended its U.S. health care plan, including several
changes with effective dates into the future. These amendments changed
eligibility requirements and changed the cost sharing provisions of the plan by
indexing deductibles and co-payments and introducing a cap on the company's
share of future premium costs. These changes reduced the accumulated
postretirement benefit obligation at December 31, 1994, by $20.0 million. In
1995, the company incorporated assumptions within its health care plan regarding
participation in Medicare Risk HMO plans for its current and future retirees,
which reduced the company's postretirement benefit obligation by $21.9 million.
These reductions in prior service cost do not immediately reduce the accrued
postretirement liability, but are amortized as a reduction of expense over the
participant's average future service period to full eligibility (approximately
13 years).

<PAGE> 18

The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation was 9.75% in 1995 (10.50% in 1994), with
subsequent annual decrements of .75% to an ultimate trend rate of 6%. A
one-percentage-point increase in the assumed health care cost trend rate for
each year would increase the accumulated postretirement benefit obligation by
approximately 16% and net postretirement benefit cost by approximately 22%. The
discount rate used in determining the accumulated postretirement benefit
obligation was 7.50% and 8.75% at December 31, 1995 and 1994, respectively.

Net postretirement health care cost consists of the following components for the
company's U.S. plans:

<TABLE>
<CAPTION>
1995 1994 1993
------- ------- ------
<S> <C> <C> <C>
Service cost - benefits earned
during the year $ 1,361 $ 2,916 $2,620
Interest cost on accumulated
postretirement benefit
obligation 6,066 7,131 6,724
Amortization of unrecognized
net gains (1,766)
------- ------- ------
Net postretirement health
care cost $ 5,661 $10,047 $9,344
======= ======= ======
</TABLE>

The company also provides postretirement health care benefits at several of its
international locations. Accumulated benefits and net postretirement health care
costs for these locations were not significant.

NOTE 12 - LEASES

The company has commitments under operating leases primarily for office space,
terminal facilities, land, railroad tank cars and various office equipment.
Rental expense was $19.5 million in 1995, $19.3 million in 1994 and $19.0
million in 1993. Future minimum rental commitments under operating leases
having initial or remaining non-cancelable lease terms exceeding one year are
$12.8 million in 1996, $6.8 million in 1997, $5.1 million in 1998, $3.0 million
in 1999, $2.5 million in 2000 and $23.2 million thereafter.

NOTE 13 - OPERATIONS IN GEOGRAPHIC AREAS

Financial data by geographic area, based on the location of the subsidiary which
shipped and billed the product, is as follows:

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Revenues from customers:
United States .................. $ 722,879 $ 707,103 $ 660,674
Europe ......................... 533,920 512,279 501,551
Far East ....................... 225,773 215,632 203,327
Other .......................... 181,022 163,980 159,948
----------- ----------- -----------
1,663,594 1,598,994 1,525,500
Intercompany transfers:
United States .................. 319,671 296,693 290,487
Europe ......................... 37,556 28,835 22,276
Far East ....................... 301 360 496
Other .......................... 30,905 27,717 26,707
----------- ----------- -----------
388,433 353,605 339,966
----------- ----------- -----------
Gross revenues ................. 2,052,027 1,952,599 1,865,466
Less: Intercompany
transfers .................... (388,433) (353,605) (339,966)
----------- ----------- -----------
Consolidated revenues .......... $ 1,663,594 $ 1,598,994 $ 1,525,500
=========== =========== ===========
Operating profit:
United States .................. $ 138,398 $ 145,971 $ 105,591
Europe ......................... 51,172 49,783 58,781
Far East ....................... 9,731 15,486 14,374
Other .......................... 17,476 14,251 11,392
Eliminations ................... (2,555) (2,249) (129)
----------- ----------- -----------
214,222 223,242 190,009
General corporate
expenses ..................... (19,156) (21,212) (26,754)
Asset impairment and
special charge ............... (9,489) (86,303)
Gain on sale of
Genentech .................... 38,459 41,235 42,443
Other income - net ............. 7,150 7,332 537
Interest - net ................. (5,612) 862 (281)
----------- ----------- -----------
Income before
income taxes ................. $ 225,574 $ 251,459 $ 119,651
=========== =========== ===========
Identifiable assets:
United States .................. $ 804,045 $ 731,651 $ 637,919
Europe ......................... 395,053 337,457 289,649
Far East ....................... 154,992 157,344 143,542
Other .......................... 82,708 74,768 71,651
Eliminations ................... (82,310) (81,640) (88,012)
----------- ----------- -----------
1,354,488 1,219,580 1,054,749

Corporate assets ............... 137,532 174,784 127,831
----------- ----------- -----------
Total assets ................... $ 1,492,020 $ 1,394,364 $ 1,182,580
=========== =========== ===========
<FN>
NOTES:
A. Intercompany transfers are made at prices comparable to normal unaffiliated
customer sales for similar products.
B. Affiliated companies are not allocated to geographic segments.
C. Corporate assets consist of short-term investments and investments in
affiliated companies.
</TABLE>

<PAGE> 19

Export sales from the United States to customers, primarily in Latin America and
Asia in 1995 and also in the Middle East for 1994 and 1993, were $138 million,
$139 million and $119 million, respectively.

Net assets of non-U.S. subsidiaries at December 31, 1995 and 1994 were $446
million and $388 million, respectively. Net income of these subsidiaries was $52
million in 1995, $55 million in 1994 and $42 million in 1993; and dividends
received from the subsidiaries were $7 million, $8 million and $34 million,
respectively.

NOTE 14 - FINANCIAL INSTRUMENTS

The company has various financial instruments, including cash and short-term
investments, investments in nonconsolidated companies, foreign currency forward
contracts, interest rate swaps and short- and long-term debt. The company has
determined the estimated fair value of these financial instruments by using
available market information and generally accepted valuation methodologies. The
use of different market assumptions or estimation methodologies could have a
material effect on the estimated fair value amounts. The company believes the
carrying values of financial instruments approximate their fair values, except
for certain investments in marketable securities (see Note 4) and certain
interest rate swaps discussed below. The company uses derivative financial
instruments only to manage well-defined foreign currency, interest rate and
commodity price risks, as described below. The company does not use derivative
financial instruments for trading purposes.

The company is exposed to the effect of changes in foreign currency rates on its
earnings and cash flow as a result of doing business internationally. In
addition to working capital management, pricing and sourcing, the company
selectively uses foreign currency forward contracts to lessen the potential
effect of these changes. Such contracts are generally in connection with
transactions with maturities of up to one year. The maximum amount of foreign
currency forward contracts outstanding at any one time was $16.6 million in 1995
and $25.7 million in 1994.

Realized and unrealized gains or losses on these contracts are recorded in the
statement of income, or in the case of transactions designated as hedges of net
foreign investments, in the cumulative translation adjustment account in other
shareholders' equity. Additionally, foreign currency forward contract gains and
losses on certain future transactions may be deferred until the future
transaction is recorded. The company had no deferred currency gains or losses on
foreign exchange contracts at December 31, 1995.

At December 31, 1995, the company had short-term forward contracts to sell
currencies at various dates during 1996 for $2.2 million.

The company has entered into interest rate swap agreements to effectively
convert floating rate debt to fixed rates (see Note 5). The company would pay
approximately $9.2 million if it had terminated these interest rate swap
agreements at December 31, 1995. The company also uses commodity futures
contracts to reduce its exposure to fluctuations in raw material costs for its
specialty vegetable oils. Realized gains and losses on these commodity future
contracts are included in inventory cost.

NOTE 15 - STOCK OPTIONS

The Financial Accounting Standards Board has issued SFAS 123 - Accounting for
Stock-Based Compensation, which is effective for the company's fiscal year
beginning January 1, 1996. SFAS 123 encourages the fair-value based method of
accounting for stock compensation plans under which the value of stock options
is estimated at the date of grant using valuation formulas, but permits the
continuance of intrinsic-value accounting (measured as the difference between
the option exercise price and the market value of the stock at date of grant).
The company will continue to use intrinsic-value accounting for stock-based
compensation.

The 1991 Stock Incentive Plan provides for granting of options to buy Common
Shares intended either to qualify as "incentive stock options" under the
Internal Revenue Code or "non-statutory stock options" not intended to so
qualify, up to an amount equal to one percent of the outstanding Common Shares
at the beginning of any year, plus any unused amount from prior years. Under the
1991 Plan, options generally become exercisable 50% one year after grant, 75%
after two years, 100% after three years, and expire up to ten years after grant.
"Reload options," which are options to purchase additional shares if a grantee
uses already-owned shares to pay for an option exercise, are granted
automatically under the 1991 Plan and may be granted in the discretion of the
administering committee under the 1985 Employee Stock Option Plan. The 1991 Plan
generally supersedes the 1985 Plan, although options outstanding under the 1985
Plan remain exercisable until the expiration dates. The option price under both
plans is the fair market value of the shares on the date of grant. Both plans
permit or permitted the granting of stock appreciation rights in connection with
the grant of options, and the 1991 Plan also permits the grant of restricted and
unrestricted shares. In addition, the 1991 Plan provides to each outside

<PAGE> 20

director of the company an automatic annual grant of an option to purchase 2,000
Common Shares, with terms generally comparable to employee stock options.

Information regarding these option plans is as follows:

<TABLE>
<CAPTION>
Number of Shares
-------------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Outstanding,
January 1 ....................................... 2,583,721 2,338,875 2,147,263
Granted at
$28.13 to $37.50
per share ....................................... 528,210 614,815 624,546
Exercised at
$10.97 to $33.34
per share ....................................... (148,887) (364,519) (394,178)
Surrendered at
$16.66 to $37.50
per share ....................................... (4,628) (5,450) (38,756)
--------- --------- ---------
Outstanding,
December 31 ..................................... 2,958,416 2,583,721 2,338,875
========= ========= =========
Exercisable,
December 31 ..................................... 1,975,878 1,652,012 1,341,767
========= ========= =========
Available for grant,
December 31 ..................................... 1,998,149 1,873,286 1,816,751
========= ========= =========
</TABLE>

The 1985 Plan options expire June 1996 to February 2005, with an average option
price of $25.50. The 1991 Plan options expire April 2001 to April 2005, with an
average option price of $33.86.

NOTE 16 - SUBSEQUENT EVENTS AND TRANSACTIONS WITH MYCOGEN

Subsequent Events

Pursuant to a definitive agreement to sell all of its interest in Mycogen
Corporation (Note 4) to DowElanco for $126.2 million in cash, on January 15,
1996, the company exchanged its remaining interest in AGI and all of its Mycogen
Series A Preferred Stock into Mycogen Common Stock. This action, together with
common shares previously owned, increased the company's ownership of the
outstanding common shares of Mycogen from 27% to 37%. Due to this pending sale
and the company assigning certain shareholder rights to DowElanco until the sale
was completed, the company suspended using the equity method of accounting for
its investment in Mycogen. On February 20, 1996, the sale of the company's
interest in Mycogen to DowElanco was completed, and the company realized a
pretax gain of approximately $50 million, after transaction and other related
costs.

In addition, on January 15, 1996, the company sold certain rights to its SVO oil
seed technology to Mycogen for $8.0 million; of which $2.0 million was collected
in January 1996 with $2.5 million due in January 1997 and $3.5 million due
January 1998.

Transactions with Mycogen

As described below, the company has completed several transactions with Mycogen
Corporation related to the company's former Agribusiness assets. In December
1992, the company transferred certain Agribusiness assets to Mycogen in exchange
for 2,294,590 shares of Mycogen Common Stock and $39.4 million par value Series
A Preferred Stock which earned dividends at 5% per year. The remainder of the
company's Agribusiness assets plus cash of $4.6 million, and exclusive of
specialty vegetable operations, were transferred to a separate joint venture
(AGI) with Mycogen, of which the company retained a 49% interest.

On December 1, 1993, Mycogen mandatorily redeemed $10.0 million of the
Preferred Stock for cash. On December 31, 1993, the company sold 30% of
AGI to Mycogen in exchange for $7.0 million in cash and 2 million shares of
Mycogen Common Stock.

On December 13, 1995, Mycogen issued new shares of its common stock at a price
which exceeded the company's carrying amount per share of Mycogen Common Stock.
The company's ownership percentage in Mycogen was diluted, and the company
recognized in other income a noncash gain of $4.5 million, which represents the
increase in the value of the company's ownership interest in the net assets of
Mycogen.

At December 31, 1995, the company owned approximately 27% of Mycogen Common
Stock and 19% of AGI Common Stock with a book carrying value aggregating $40.3
million. In addition, the company's investment in Mycogen Series A Preferred
Stock has a book carrying value at December 31, 1995, of $31.5 million,
including accumulated preferred dividends.

<PAGE> 21

NOTE 17 - SPECIAL CHARGE AND ASSET IMPAIRMENT

The company recorded a special charge of $86.3 million ($.83 per share after
tax) in the third quarter of 1993 in connection with manufacturing
rationalization and organizational realignment initiatives. When complete, these
initiatives will have reduced the number of the company's production units by
approximately one-third, and approximately 5% of the employees will have left
the company through early retirement programs or attrition. The manufacturing
rationalization plan will be substantially complete near the end of 1996 and
through consolidation is resulting in cost savings from a reduced number of
employees, lower operating costs and fewer manufacturing units used to produce
intermediate products.

Approximately $48 million of the special charge relates to the manufacturing
rationalization of which $25 million relates to asset write-downs, including $16
million for the shutdown of manufacturing units used to produce intermediate
products. The remainder of the manufacturing rationalization portion of the
special charge relates to expected employee reduction at manufacturing locations
through early retirements, equipment cleanup and dismantling, employee
relocation and other transitional costs.

The organizational realignment relates to the consolidation of the company's
nonmanufacturing activities. This portion of the special charge is approximately
$38 million and includes $17 million for employee early retirement and
relocation. The remainder of this portion of the special charge relates to asset
write-downs of $15 million, primarily in the company's Agribusiness investments
and accruals for transitional costs.

Through December 31, 1995, the company has completed approximately 75% of the
production unit reductions and 90% of the employee reductions under these
initiatives. At December 31, 1995, $22.7 million remains in the special charge.
Cash outlays related to the special charge were approximately $14 million in
1995, $18 million in 1994 and $4 million in 1993. Included in liabilities at
December 31, 1995, are future cash outlays of $9 million, primarily for employee
reductions and lease terminations.

During the fourth quarter of 1995, the company recorded a charge of $9.5 million
for the write-down of assets. This charge is primarily related to an
intermediate processing unit that became permanently impaired due to product
formulation changes caused by a new industry-wide specification.

NOTE 18 - LITIGATION

In November 1993, a federal court jury in Houston, Texas, awarded Exxon
Corporation $48 million in damages in a patent case brought, in 1989, against
the company. The damages award related to a December 1992 verdict that the
company willfully infringed an Exxon patent pertaining to an oil soluble copper
additive component. In February 1994, the trial court judge doubled the damages
amount and awarded prejudgment interest, court costs and additional attorneys'
fees to Exxon. The total amount of the judgment, including previously awarded
attorneys' fees, was $129 million.

In September 1995, the United States Court of Appeals for the Federal Circuit in
Washington, D.C., which has jurisdiction over all patent cases, overturned the
jury verdict that the company infringed the Exxon patent and entered judgment in
favor of the company as a matter of law. The ruling also vacated an injunction
against the company and the $129 million judgment. In February, 1996, the same
court in Washington, D.C., denied Exxon's request for rehearing. The company
does not know whether Supreme Court review will be sought by Exxon or whether
the Supreme Court would grant any such review. The company's management
continues to believe that it has not infringed the Exxon patent, that the patent
is invalid, and that no portion of the overturned judgment will be reinstated.
Therefore, no amount related to the matter has been recorded in the company's
financial statements.

The company has prevailed in a separate case brought in Canada against Exxon's
Canadian affiliate, Imperial Oil, Ltd., for infringement of the company's patent
pertaining to dispersant, the largest additive component used in motor oils. A
1990 trial court verdict in favor of the company regarding the issue of
liability was upheld by the Federal Court of Appeals of Canada in December 1992,
and in October 1993, the Supreme Court of Canada dismissed Imperial Oil's appeal
of the Court of Appeals' decision. The case has returned to the trial court for
an assessment of damages. In October 1994, the trial court judge awarded the
company $15 million (Canadian) in special penalty damages, plus attorneys' fees,
against Imperial Oil for disregarding an earlier injunction for the manufacture
or sale of the dispersant which is the subject of this case. Imperial Oil
commenced proceedings to appeal the award of penalty damages. The company has
not reflected the award of penalty damages within its financial statements
pending the outcome of the appeal process. The penalty damages are in addition
to compensation damages, as to which no date has been set for a determination. A
reasonable estimation of the company's potential recovery for compensation
damages cannot be made at this time.

<PAGE> 22

Quarterly Financial Data (Unaudited)
<TABLE>
<CAPTION>

Three Months Ended
--------------------------------------------

March 31 June 30 Sept. 30 Dec. 31
- ------------------------------------------------------------------------------------------------------

(In Thousands of Dollars Except Per Share Data)
<S> <C> <C> <C> <C>

1995
Net sales ............................................. $414,931 $436,774 $412,428 $393,688
Gross profit .......................................... 137,375 148,865 129,985 116,210
Genentech gain (net of tax) ........................... 8,519 16,479
Net income ............................................ 49,102 61,251 27,942 13,320
Net income per share .................................. $ .76 $ .96 $ .44 $ .21

1994
Net sales ............................................. $397,816 $407,163 $396,478 $391,293
Gross profit .......................................... 125,210 134,721 134,601 126,193
Genentech gain (net of tax) ........................... 7,483 7,719 7,812 3,789
Net income ............................................ 43,281 49,132 47,933 35,229
Net income per share .................................. $ .65 $ .74 $ .73 $ .54
</TABLE>

In the fourth quarter of 1995, the company recognized an asset impairment charge
which decreased net income by $6.2 million ($.10 per share).

<PAGE> 23

Historical Summary
<TABLE>
<CAPTION>

(In Millions, Except Shareholders, Employees and Per Share Data) 1995 1994 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING RESULTS:
Revenues ....................................................... $ 1,663.6 $ 1,599.0 $ 1,525.5
Total cost and expenses ........................................ 1,468.5 1,397.0 1,362.2
Other income (charges) ......................................... 30.5 49.4 (43.6)
Net income ..................................................... 151.6 175.6 45.6
- Before unusual items and accounting changes ................ 132.8 148.8 113.5
Net income per share ........................................... 2.37 2.67 .67
- Before unusual items and accounting changes ................ 2.08 2.26 1.67

FINANCIAL RATIOS:
Gross profit percentage ........................................ 32.1 32.7 32.0
Percent of revenues:
Selling and administrative expenses .......................... 9.8 10.0 10.4
Research and testing expenses ................................ 10.8 10.3 11.2
Return on average shareholders' equity (%) ..................... 18.0 22.5 5.9
- Before unusual items and accounting changes (%) ............ 15.8 19.0 14.6
Debt to capitalization (%) ..................................... 22.5 16.8 8.7
Current ratio .................................................. 2.4 2.5 2.5

OTHER INFORMATION:
Dividends declared per share ................................... $ .93 $ .89 $ .85
Average common shares outstanding .............................. 63.8 65.7 67.7
Capital expenditures ........................................... $ 189.3 $ 160.5 $ 127.9
Depreciation expense ........................................... 68.8 61.3 59.6

At Year End:
Total assets ................................................. $ 1,492.0 $ 1,394.4 $ 1,182.6
Total debt ................................................... 247.1 167.9 69.6
Total shareholders' equity ................................... 849.0 832.0 732.2
Shareholders' equity per share ............................... 13.48 12.83 11.00
Common share price ........................................... 27.75 33.88 34.13
Number of shareholders ....................................... 6,304 6,494 6,616
Number of employees .......................................... 4,601 4,520 4,613

</TABLE>

All share and per share data have been restated to reflect the 2-for-1 stock
split effected on August 31, 1992.

<PAGE> 24

<TABLE>
<CAPTION>
1992 1991 1990 1989 1988 1987 1986 1985
- ----------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C> <C>
$1,552.2 $1,476.3 $1,452.7 $1,227.9 $1,125.7 $1,022.3 $985.2 $913.4
1,390.5 1,308.7 1,288.4 1,109.7 1,009.9 916.4 875.7 817.5
15.4 10.5 106.9 19.5 69.9 23.3 19.2 7.6
124.6 123.7 190.0 94.0 140.0 81.3 78.2 60.2
124.6 123.7 133.5 94.0 88.4 73.7 78.2 60.2
1.81 1.79 2.67 1.26 1.81 1.03 .99 .74
1.81 1.79 1.87 1.26 1.14 .94 .99 .74

31.7 32.4 30.3 29.2 29.9 29.6 28.8 27.0

11.7 11.7 10.9 10.8 10.5 10.8 10.3 10.1
10.0 9.8 8.5 9.2 9.6 9.1 8.1 7.3
15.4 16.2 27.2 14.2 21.8 13.6 14.3 12.1
15.4 16.2 18.0 14.2 13.7 12.0 14.3 12.1
5.6 7.9 8.3 8.5 8.4 10.1 9.0 16.8
2.9 2.7 2.7 3.0 3.1 3.0 2.8 2.5

$ .81 $ .77 $ .73 $ .69 $ .65 $ .61 $ .59 $ .58
69.0 69.3 71.1 74.7 77.4 79.1 79.4 80.8
$ 95.8 $ 82.4 $ 77.4 $ 64.7 $ 54.6 $ 42.0 $ 40.5 $ 39.5
58.4 54.6 54.0 48.7 46.6 47.2 42.6 44.6

$1,127.1 $1,171.7 $1,114.6 $ 960.2 $ 970.7 $ 939.4 $877.9 $854.4
48.4 67.8 66.6 61.2 60.8 69.7 56.9 104.9
819.4 794.5 736.2 663.3 664.3 621.6 572.7 519.3
11.97 11.51 10.61 8.96 8.74 7.98 7.21 6.55
27.25 28.25 23.63 18.75 17.75 16.44 15.75 14.00
6,822 6,767 6,692 7,370 7,782 8,335 9,240 10,803
4,609 5,299 5,169 5,030 4,781 4,817 4,802 5,205
</TABLE>

<PAGE> 1

EXHIBIT 21

THE LUBRIZOL CORPORATION

<TABLE>
<CAPTION>
% OF STATE/COUNTRY
PRINCIPAL SUBSIDIARIES OWNERSHIP OF INCORPORATION
<S> <C> <C>
Lubrizol do Brasil Aditivos, Ltda. 100% Brazil
Lubrizol Canada Limited 100% Canada
Lubrizol de Chile Limitada 100% Chile
Lubrizol China, Inc. 100% Ohio
Lubrizol Espanola, S.A. 100% Spain
Lubrizol France S.A. 99.995% France
Lubrizol Gesellschaft m.b.H. 100% Austria
Lubrizol G.m.b.H. 100% Germany
Lubrizol International Inc. 100% Cayman Islands
Lubrizol International Management
Corporation 100% Nevada
Lubrizol Italiana, S.p.A. 100% Italy
Lubrizol Japan, Limited 100% Japan
Lubrizol Limited 100% United Kingdom
Lubrizol de Mexico, S. de R.L. 100% Mexico
Lubrizol Overseas Trading Corporation 100% Delaware
Lubrizol Scandinavia AB 100% Sweden
Lubrizol Servicios Tecnicos S. de R.L. 100% Mexico
Lubrizol South Africa (Pty.) Limited 100% South Africa
Lubrizol Southeast Asia (Pte.) Ltd. 100% Singapore
Lubrizol de Venezuela C.A. 99.9% Venezuela
Anedco Inc. 100% Nevada
Engine Control Systems, Ltd. 100% Canada
Gate City Equipment Company, Inc. 100% Georgia
Langer & Company G.m.b.H. 100% Germany
SVO Specialty Products, Inc. 100% Delaware

AFFILIATES

Lubrizol India Limited 40% India
Industrais Lubrizol S.A. de C.V. 40% Mexico
Lubrizol Transarabian Company Limited 49% Saudi Arabia
C.A. Lubricantes Quimicos L.Q. 49% Venezuela
Solub Product Application Laboratory 40% Russia
</TABLE>

<PAGE> 1

EXHIBIT 23

INDEPENDENT AUDITORS' CONSENT
=============================

THE LUBRIZOL CORPORATION

We consent to the incorporation by reference in Registration Statement
No. 2-99983 on Form S-8, in Registration Statement No. 33-61091 on Form S-8 and
in Registration Statement No. 33-42211 on Form S-8 of our report dated February
20, 1996, incorporated by reference in this Annual Report on Form 10-K of The
Lubrizol Corporation for the year ended December 31, 1995.

/s/ Deloitte & Touche LLP
- ---------------------------------

DELOITTE & TOUCHE LLP
Cleveland, Ohio
March 25, 1996

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000060751
<NAME> THE LUBRIZOL CORPORATION
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1.0
<CASH> 30,579
<SECURITIES> 0
<RECEIVABLES> 222,784
<ALLOWANCES> 2,198
<INVENTORY> 310,539
<CURRENT-ASSETS> 639,694
<PP&E> 1,447,051
<DEPRECIATION> 770,235
<TOTAL-ASSETS> 1,492,020
<CURRENT-LIABILITIES> 265,591
<BONDS> 194,423
<COMMON> 83,254
0
0
<OTHER-SE> 765,729
<TOTAL-LIABILITY-AND-EQUITY> 1,492,020
<SALES> 1,657,821
<TOTAL-REVENUES> 1,663,594
<CGS> 1,125,386
<TOTAL-COSTS> 1,125,386
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (372)
<INTEREST-EXPENSE> 10,376
<INCOME-PRETAX> 225,574
<INCOME-TAX> 73,959
<INCOME-CONTINUING> 151,615
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 151,615
<EPS-PRIMARY> 2.37
<EPS-DILUTED> 2.36

</TABLE>