<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Transition Period from to
--------------------- -------------------
Commission File Number 1-12658
ALBEMARLE CORPORATION
-----------------------
(Exact name of registrant as specified in its charter)
VIRGINIA 54-1692118
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
330 SOUTH FOURTH STREET
P. O. BOX 1335
RICHMOND, VIRGINIA 23210
- ------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code - (804) 788-6000
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
--- ---
Number of shares of common stock, $.01 par value, outstanding as
of October 31, 1997: 55,402,619
<PAGE>2
ALBEMARLE CORPORATION
I N D E X
Page
Number
------
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets - September 30, 1997
and December 31, 1996 3-4
Consolidated Statements of Income - Three and
Nine Months Ended September 30, 1997 and 1996 5
Condensed Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1997 and 1996 6
Notes to the Consolidated Financial Statements 7-12
ITEM 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition and
Additional Information 13-17
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 18
ITEM 6. Exhibits and Reports on Form 8-K 18
SIGNATURES 19
EXHIBIT INDEX 20
Exhibit 28.1 Current By-Laws As Amended 21-35
Exhibit 27 Financial Data Schedule 36-37
<PAGE>3
PART I - FINANCIAL INFORMATION
------------------------------
ITEM 1. Financial Statements
--------------------
<TABLE>
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars In Thousands)
-----------------------
<CAPTION>
September 30,
1997 December 31,
(Unaudited) 1996
--------------- -------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 10,339 $ 14,242
Accounts receivable, less allowance
for doubtful accounts (1997- $1,510;
1996 - $1,290) 150,457 141,293
Inventories:
Finished goods 63,441 58,271
Raw materials 14,139 10,148
Work-in-process 167 247
Stores, supplies and other 17,625 15,833
--------------- -------------
Total inventories 95,372 84,499
Deferred income taxes and prepaid
expenses 17,248 19,107
--------------- -------------
Total current assets 273,416 259,141
--------------- -------------
Property, plant and equipment, at cost 1,180,169 1,148,832
Less accumulated depreciation and
amortization (682,270) (653,108)
--------------- -------------
Net property, plant and
equipment 497,899 495,724
Other assets and deferred charges 74,694 68,304
Goodwill and other intangibles, net of
amortization 18,107 23,092
--------------- -------------
Total assets $ 864,116 $ 846,261
--------------- -------------
--------------- -------------
<FN>
See accompanying notes to the consolidated financial statements.
</TABLE>
<PAGE>4
<TABLE>
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars In Thousands)
----------------------
<CAPTION>
September 30,
1997 December 31,
(Unaudited) 1996
--------------- -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 53,499 $ 66,968
Long-term debt, current portion 380 7,457
Accrued expenses 51,674 55,783
Dividends payable 4,988 3,853
Income taxes payable 14,578 13,887
-------------- -------------
Total current liabilities 125,119 147,948
--------------- -------------
Long-term debt 38,055 24,406
Other noncurrent liabilities 67,501 64,166
Deferred income taxes 93,467 104,543
Shareholders' equity:
Common stock, $.01 par value,
issued - 55,432,619 in 1997
and 55,046,183 in 1996, respectively 554 550
Additional paid-in capital 256,154 250,890
Foreign currency translation
adjustments (193) 16,677
Retained earnings 283,459 237,081
--------------- -------------
Total shareholders' equity 539,974 505,198
--------------- -------------
Total liabilities and shareholders'
equity $ 864,116 $ 846,261
--------------- -------------
--------------- -------------
<FN>
See accompanying notes to the consolidated financial statements.
</TABLE>
<PAGE>5
<TABLE>
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(In Thousands Except Per-Share Amounts)
----------------------------------------
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 207,111 $ 183,776 $ 613,180 $ 649,986
Cost of goods sold 144,191 139,016 416,089 474,342
--------- --------- --------- ---------
Gross profit 62,920 44,760 197,091 175,644
Selling, general and
administrative expenses 27,786 25,212 82,054 88,436
Research and development
expenses 7,709 8,480 22,934 22,317
--------- --------- --------- ---------
Operating profit 27,425 11,068 92,103 64,891
Interest and financing
expenses 152 323 559 2,367
Gain on sale of business -- -- -- (158,157)
Other income, net (318) (271) (839) (3,823)
---------- ---------- ---------- ---------
Income before income taxes 27,591 11,016 92,383 224,504
Income taxes 9,043 3,129 33,295 86,358
---------- --------- --------- ----------
NET INCOME $ 18,548 $ 7,887 $ 59,088 $ 138,146
---------- --------- --------- ----------
---------- --------- --------- ----------
EARNINGS PER SHARE $ .33 $ .14 $ 1.06 $ 2.30
---------- --------- --------- ----------
---------- --------- --------- ----------
Shares used to compute
earnings per share 55,910 56,017 55,681 59,988
---------- --------- --------- ----------
---------- --------- --------- ----------
Cash dividends declared
per share of common stock $ .09 $ .07 $ .23 $ .18
---------- --------- --------- ----------
---------- --------- --------- ----------
<FN>
See accompanying notes to the consolidated financial statements.
</TABLE>
<PAGE>6
<TABLE>
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Dollars In Thousands)
----------------------
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
------------------
1997 1996
--------- --------
<S> <C> <C>
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR $ 14,242 $ 33,130
--------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 59,088 138,146
Adjustments to reconcile net income to cash
flows from operating activities:
Depreciation and amortization 50,717 54,204
Gain on sale of business, net of income
taxes of $63,780 -- (94,377)
Working capital increases excluding
cash and cash equivalents:
Income tax payments on gain on sale of business -- (59,324)
Other working capital increases, net
of the effects of the sale of business
in 1996 (41,807) (10,059)
Other, net (303) (9,829)
--------- ---------
Net cash provided from operating activities 67,695 18,761
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures and cost of business
acquired in 1997 (73,285) (64,094)
Proceeds from sale of business, net of
$42,297 of trade accounts payable retained
by the Company -- 487,345
Other, net 1,587 1,982
--------- ---------
Net cash (used in) provided from investing
activities (71,698) 425,233
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 17,889 26,641
Repayments of long-term debt (10,978) (204,334)
Dividends paid (11,575) (10,380)
Purchases of common stock -- (251,518)
Proceeds from exercise of stock options 4,764 1,793
--------- ---------
Net cash provided from (used in)
financing activities 100 (437,798)
--------- ---------
(Decrease) increase in cash and cash equivalents (3,903) 6,196
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 10,339 $ 39,326
--------- ---------
--------- ---------
<FN>
See accompanying notes to the consolidated financial statements.
</TABLE>
<PAGE>7
ALBEMARLE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
(In Thousands Except Per-Share Amounts)
(Unaudited)
1. In the opinion of management, the accompanying consolidated
financial statements of Albemarle Corporation and
Subsidiaries ("Albemarle" or "the Company") contain all
adjustments necessary to present fairly, in all material
respects, the Company's consolidated financial position as of
September 30, 1997 and December 31, 1996, the consolidated
results of operations for the three- and nine-month periods
ended September 30, 1997 and 1996, and the condensed
consolidated cash flows for the nine-month periods ended
September 30, 1997 and 1996. All adjustments are of a normal
and recurring nature. These consolidated financial statements
should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's 1996
Annual Report which was incorporated by reference in the
Company's Form 10-K filed on March 26, 1997. The December
31, 1996 consolidated balance sheet data was derived from
audited financial statements, but does not include all
disclosures required by generally accepted accounting
principles. The results of operations for the three- and
nine-month periods ended September 30, 1997, are not
necessarily indicative of the results to be expected for the
full year. Certain amounts in the accompanying consolidated
financial statements have been reclassified for the nine
months ended September 30, 1996, to conform to the current
presentation.
2. On March 1, 1996, the Company sold its alpha olefins, poly
alpha olefins, and synthetic alcohol businesses ("Olefins
Business") to Amoco Chemical Company ("Amoco") for $487.3
million, including plant and equipment (primarily located in
Pasadena, Texas, Deer Park, Texas and Feluy, Belgium), other
assets, inventory and accounts receivable, net of expenses
and trade accounts payable retained and paid by the Company,
and certain business-related liabilities transferred at the
date of sale. The sale involved the transfer of approximately
550 people who supported these businesses. The gain on the
sale was $158.2 million ($94.4 million after income taxes or
$1.57 per share), net of $44.3 million of costs incurred in
connection with the sale for early retirements and work-force
reductions, abandonment costs of certain facilities and
certain other costs (including environmental costs) related
to the sale and/or businesses sold. The transaction included
numerous operating and service agreements primarily focusing
on the sharing of common facilities at the Pasadena plant
site of Albemarle and the Feluy plant site operated by Amoco.
<PAGE>8
ALBEMARLE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
(In Thousands Except Per-Share Amounts)
(Unaudited)
3. Long-term debt consists of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- -------------
<S> <C> <C>
Variable-rate bank loans $ 28,200 $ 16,300
Foreign bank borrowings 9,087 14,392
Miscellaneous 1,148 1,171
------------- -------------
Total 38,435 31,863
Less amounts due within one year 380 7,457
------------- -------------
Long-term debt $ 38,055 $ 24,406
------------- -------------
------------- -------------
</TABLE>
4. The provision for income taxes on the earnings of the Company
in the accompanying consolidated statement of income for the
nine-month period ended September 30, 1996 is higher than the
statutory income tax rates primarily due to a lower tax basis
than book basis related to the sale of the Olefins Business,
offset in part, by the benefits in 1996 of foreign tax
credits.
5. The shares used to compute earnings per share for the three-
and nine-month periods ended September 30, 1997 and 1996,
reflect the April 1, 1996 purchase by the Company of
9,484,465 shares of its common stock, at a price of $23 per
share plus expenses for a total aggregate cost of $219.4
million, through a tender offer, which began on March 4, 1996
and concluded on April 1, 1996, following the sale of the
Olefins Business to Amoco. The Company purchased 275,400 and
1,481,100 common shares in the second and third quarters of
1996, respectively, at an aggregate cost of $6.1 million and
$26.0 million, respectively.
6. The Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share" in February, 1997 which is effective for
financial statements for both interim and annual periods
ending after December 15, 1997. Earlier application is not
permitted; however, restatement of all prior-period earnings
per share data presented is required. Based upon the
Company's preliminary determination, the effect of the
adoption of SFAS No. 128 on the financial statements of the
Company is not expected to be material.
<PAGE>9
ALBEMARLE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
(In Thousands Except Share Amounts)
(Unaudited)
The FASB issued SFAS No. 130, "Reporting Comprehensive Income",
and SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information", in June, 1997, which are effective
for financial statements for annual periods beginning after
December 15, 1997. Earlier application of both Statements is
permitted. SFAS No. 130 establishes standards for reporting
comprehensive income in a full set of general-purpose financial
statements, either in the income statement or in a separate
statement, and also requires display of "accumulated other
comprehensive income" in a separate caption in the equity
section of the balance sheet. SFAS No. 131 establishes
standards for reporting information about operating segments,
including related disclosures about products and services,
geographic areas, and major customers. The Company has not yet
determined the effect SFAS Nos. 130 and 131 will have on the
Company's financial statements. At the time of their adoption
these standards are not expected to have a material impact on
the financial position or results of operations of the Company.
7. On March 31, 1997, the Company and Mitsui Toatsu Chemicals,
Inc. (Mitsui Toatsu) completed the formation of an alliance whereby
Albemarle acquired for cash 50 percent of the outstanding stock of
Nippon Aluminum Alkyls, Ltd. (NAA). Mitsui Toatsu continued to
hold the remaining 50% of NAA until October 1, 1997, when Mitsui
Toatsu and Mitsui Petrochemical Industries, Ltd. merged to form
Mitsui Chemicals, Inc. Therefore Mitsui Chemicals, Inc. became owner
on October 1, 1997 of the remaining 50%. NAA produces organometallic
catalysts at its facility in Takaishi City, Osaka and distributes
products to the petrochemical and synthetic rubber industries in
Japan and the Asia Pacific area. No historical pro forma financial
information is required for this acquisition.
8. The following unaudited supplemental pro forma condensed
consolidated statement of income for the nine months ended
September 30, 1996, is presented assuming that the disposition of
the Olefins Business had occurred as of January 1, 1996. The related
pro forma information is presented for informational purposes only and is
not necessarily indicative of what the consolidated results of
operations would have been had the Company operated without the
Olefins Business for the nine months ended September 30, 1996.
Additionally, the accompanying pro forma information, consistent with
the data presented in the Company's Form 8-K filed on March 15, 1996,
does not reflect the impact of the purchase of 9,484,465 shares of
common stock acquired in the Company's tender offer as if they had
occurred on January 1, 1996.
<PAGE>10
ALBEMARLE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
(In Thousands Except Per-Share Amounts)
(Unaudited)
8. Continued.
<TABLE>
<CAPTION>
Pro Forma Condensed Consolidated
Statement of Income
Nine Months Ended September 30, 1996
--------------------------------------
Adjustments
Increase
Historical (Decrease) Pro Forma
---------- -------------- -----------
<S> <C> <C> <C> <C>
Net sales $ 649,986 $ (79,763) (a)
799 (b) $ 571,022
Cost of goods sold 474,342 (71,200) (a)
420 (b) 403,562
---------- -------------- -----------
Gross profit 175,644 (8,184) 167,460
Selling, R&D and
general expenses 110,753 (5,221) (a) 105,532
---------- -------------- -----------
Operating profit 64,891 (2,963) 61,928
Interest and financing
expenses 2,367 (1,563) (c) 804
Gain on sale of business (158,157) 158,157 (d) --
Other income, net (3,823) 16 (a)
(60) (e) (3,867)
---------- -------------- ------------
Income before income
taxes 224,504 (159,513) 64,991
Income taxes 86,358 (63,780) (d)
(519) (f) 22,059
----------- -------------- ------------
Net income $ 138,146 $ (95,214) $ 42,932
----------- -------------- ------------
----------- -------------- ------------
Earnings per share $ 2.30 $ 0.72
----------- ------------
----------- ------------
Shares used to compute
earnings per share 59,988 59,988 (g)
----------- ------------
----------- ------------
<FN>
See accompanying notes to the pro forma condensed
consolidated statement of income.
</TABLE>
<PAGE>11
ALBEMARLE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------------
(In Thousands Except Per-Share Amounts)
(Unaudited)
8. Continued.
Notes to the pro forma condensed consolidated statement of income
are described below:
(a) To eliminate the results of operations of the Olefins
Business for the period January 1, 1996 thru February 29,
1996 as though the sale to Amoco occurred on January 1,
1996, and to reflect reductions in administrative and other
costs which occurred because of personnel, employee benefits
(including compensation) and other cost reductions assumed
implemented following the sale of the Olefins Business to
Amoco.
(b) To record service fee income and incremental sales revenue
generated from providing various services and products under
contracts to Amoco and to record costs and expenses for
services and products provided by Amoco. The service and
supply arrangements were entered into in connection with the
sale of the Olefins Business to Amoco.
(c) To reflect the pro forma interest cost savings resulting
from the repayment of certain domestic and Belgian debt,
using the proceeds received from the sale of the Olefins
Business.
(d) To eliminate the gain and related income taxes on the March
1, 1996, sale of the Olefins Business.
(e) To record the related amortization of certain advance rents
received from Amoco upon closing of the sale of the Olefins
Business associated with an arrangement in the nature of an
operating lease in Belgium.
(f) To record the income tax effects of the adjustments set
forth in Notes (a) through (c) and (e) above, calculated at
an assumed combined U.S. state and federal income tax rate
of 37.92%. The Company's income tax provision on the results
of operations of the remaining businesses was adjusted for
utilization of a portion of the Belgian net operating loss
carryforwards for which a valuation allowance had previously
been provided on the related deferred tax assets and for the
estimated additional income taxes which would have resulted
if undistributed foreign earnings had been remitted to the
Company.
<PAGE>12
ALBEMARLE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
(In Thousands Except Share Amounts)
(Unaudited)
8. Continued.
(g) The average number of shares used to compute earnings per
share does not include the effects of the Company's tender
offer concluded on April 1, 1996, as if it had occurred on
January 1, 1996. The average number of shares would have
been 56,826,000 had the offer been assumed to have been
completed on January 1, 1996.
<PAGE>13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
-------------------------------------
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
------------------------------------------------
The following is management's discussion and analysis of certain
significant factors affecting the results of operations of
Albemarle Corporation's ("Albemarle" or "the Company") during the
periods included in the accompanying consolidated statements of
income and changes in the Company's financial condition since
December 31, 1996.
Some of the information presented in the following discussion
constitutes forward-looking comments within the meaning of the
Private Securities Litigation Reform Act of 1995. Although the
Company believes its expectations are based on reasonable
assumptions within the bounds of its knowledge of its businesses
and operations, there can be no assurance that actual results will
not differ materially from its expectations. Factors which could
cause actual results to differ from expectations include, without
limitation, the timing of orders received from customers, the gain
or loss of significant customers, competition from other
manufacturers, changes in the demand for the Company's products,
increases in the cost of the product, changes in the market in
general, fluctuations in foreign currencies and significant changes
in new product introduction resulting in an increase in capital
project requests and approvals leading to additional capital
spending.
On March 1, 1996, the Company sold its alpha olefins, poly alpha
olefins and synthetic alcohol businesses ("Olefins Business") to
Amoco Chemical Company ("Amoco"). After the sale, Albemarle was
engaged in the Bromine Chemicals, the Specialty Chemicals and the
Surfactants and Detergents businesses. Effective July 24, 1997,
the businesses were realigned into Polymer Chemicals, Fine
Chemicals and Potassium and Chlorine Chemicals.
Results of Operations
- ---------------------
Third Quarter 1997 Compared with Third Quarter 1996
- ---------------------------------------------------
NET SALES
Net sales for the third quarter of 1997 amounted to $207.1 million,
a 13% increase over third quarter 1996 net sales of $183.8
million. The higher net sales were primarily due to increased
shipments of flame retardants, bromine fine chemicals,
pharmaceuticals, agricultural chemicals and special intermediates,
partly offset by price reductions in certain flame retardants.
OPERATING COSTS AND EXPENSES
Cost of goods sold for the third quarter of 1997 amounted to $144.2
million compared to $139.0 million in the 1996 period. The gross
profit margin increased to 30.4% in 1997 from 24.4% for the
corresponding period in 1996. The improvement in the gross margin
over 1996 primarily reflects improved plant utilizations, the
impact of the Company's cost reduction program, and lower start-up
costs associated with naproxen in the 1997 period.
Selling, general and administrative expenses, combined with
research and development expenses, increased five percent in 1997
versus the 1996 quarter. The increase reflects the impact of
higher non-recurring employee-related compensation costs as well as
higher costs of experience-rated employee group life insurance in
1997 versus the 1996 period, offset in part by a decline in
research and development expenses primarily related to new products
as defined by the Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 2. As a percentage of net
sales, selling, general and administrative expenses, including
research and development expenses, were 17.1% in 1997 versus 18.3%
in the 1996 quarter.
<PAGE>14
OPERATING PROFIT
Operating profit in the third quarter of 1997 increased 148% from
the corresponding period in 1996, primarily due to increased
shipments and improved costs in flame retardants, bromine fine
chemicals, pharmaceuticals, agricultural chemicals and special
intermediates, and improved costs in European potassium and
chlorine chemicals.
INCOME TAXES
Income taxes for the third quarter of 1997 increased $5.9 million
compared to the third quarter of 1996 due to a $16.6 million
increase in pretax income and a higher effective tax rate (32.8% in
the 1997 quarter versus 28.4% for the 1996 period). The higher
effective income tax rate in the 1997 period reflects an increase
in income from foreign subsidiaries, which are taxed at higher than
U. S. statutory rates and for which no benefits are provided since
amounts are not presently expected to be repratiated, while the
effective tax rate for the 1996 period reflects the utilization of
available foreign tax credits.
Results of Operations
- ----------------------
Nine Months 1997 Compared with Nine Months 1996
- -----------------------------------------------
NET SALES
Net sales for the first nine months of 1997 amounted to $613.2
million, down from $650.0 million for the corresponding period of
1996. Excluding the first two months 1996 net sales (approximately
$80 million) of the Olefins Business sold March 1, 1996,
Albemarle's net sales for the first nine months of 1997 would have
shown an increase of eight percent or approximately $43 million.
The higher net sales were primarily due to increased shipments of
flame retardants, bromine fine chemicals, organometallics,
pharmaceuticals, and antioxidants offset in part, by price
reductions in certain flame retardants.
OPERATING COSTS AND EXPENSES
Cost of goods sold decreased 12% or $58.3 million in 1997 from 1996
primarily reflecting the impact of two months cost of goods sold of
the Olefins Business included in the 1996 period. The gross profit
margin increased to 32.1% in 1997 from 29.3% in 1996 excluding from
the 1996 period the two months results of the Olefins Business.
The improvement in the gross margin reflects improved plant
utilizations and the impact of the Company's cost reduction
program.
<PAGE>15
Selling, general and administrative expenses, combined with
research and development expenses, decreased 5.2% in 1997 versus
the 1996 period. The 1997 period reflects the elimination of
two-months expenses associated with the operations of the Olefins
Business and a reduction in expenses associated with the exercise
of stock appreciation rights versus the 1996 period. Additionally,
the 1997 period benefited from lower employee-related expenses
resulting from the Company's workforce reduction program
implemented in conjunction with the sale of the Olefins Business.
As a percentage of net sales, selling, general and administrative
expenses, including research and development expenses, were 17.1%
in the nine months of 1997 versus 17.0% in the 1996 period.
Excluding the first two months 1996 selling, general and
administrative expenses and research and development expenses of
the Olefins Business sold, the percentage of net sales for the 1996
period would have been 18.5%.
OPERATING PROFIT
Operating profit in the first nine months of 1997 increased
approximately 42% from the corresponding period in 1996. Excluding
the first two months of 1996 operating profits of the Olefins
Business sold, the nine months of 1997 operating profits would have
shown an increase of 49% over the 1996 period. The 1997 period
benefited from product mix in agricultural chemicals, increased
shipments and improved costs in pharmaceuticals and bromine fine
chemicals, higher shipments in organometallics, and improved costs
in zeolites and European potassium and chlorine chemicals.
INTEREST AND FINANCING EXPENSES AND OTHER INCOME
Interest and financing expenses in the nine months of 1997
decreased to $0.6 million from $2.4 million in the nine months of
1996 due to lower average outstanding debt. Other income decreased
$3.0 million due to lower interest income in the 1997 period.
GAIN ON SALE OF BUSINESS
The Company's 1996 first nine month's earnings included a gain of
$158.2 million ($94.4 million after income taxes) on the sale of
the Olefins Business.
INCOME TAXES
Income taxes in the first nine months of 1997 decreased $53.1
million from the 1996 period, reflecting a $132.1 million decrease
in pretax income and a lower effective income tax rate (36.0% in
1997 versus 38.5% in 1996). Excluding the effect of the gain on
the sale of the Olefins Business, the effective income tax rate
would have been 34% in the 1996 period. The higher effective
income tax rate in the 1997 period reflects an increase in income
from foreign subsidiaries, which are taxed at higher than U. S.
statutory rates and for which no benefits are provided since
amounts are not presently expected to be repatriated, while the
effective tax rate for the 1996 period reflects the utilization of
available foreign tax credits.
Financial Condition and Liquidity
- ---------------------------------
Cash and cash equivalents at September 30, 1997, were $10.3
million, representing a decrease of $3.9 million from $14.2 million
at year-end 1996.
<PAGE>16
Cash flows from operating activities during the first nine months
of 1997 together with $3.9 million of existing cash, and proceeds
from additional borrowings of $17.9 million and $4.8 million from
the exercise of stock options, were used to cover capital
expenditures and cost of business acquired, payment of dividends
and repayment of debt.
The Company anticipates that cash provided from operations in the
future will be sufficient to pay its operating expenses, satisfy
debt-service obligations and make dividend payments.
The Company's foreign currency translation adjustments, net of
related deferred taxes, at September 30, 1997, decreased
substantially from December 31, 1996, primarily due to the
strengthening of the U.S. dollar.
The noncurrent portion of the Company's long-term debt amounted to
$38.1 million at September 30, 1997, compared to $24.4 million at
the end of 1996. The Company's long-term debt, including the
current portion, as a percentage of total capitalization amounted
to 6.6% at September 30, 1997.
The Company's capital expenditures combined with cost of business
acquired in the first nine months of 1997 were higher than in the
same period of 1996 resulting primarily from to the timing of
payments . For the year, capital expenditures are forecasted to be
slightly above the 1996 level. Capital spending will be financed
primarily with cash flow from operations with any additional cash
provided from additional debt. The amount and timing of any
additional borrowing will depend on the Company's specific cash
requirements.
The Company is subject to federal, state, local and foreign
requirements regulating the handling, manufacture and use of
materials (some of which may be classified as hazardous or toxic by
one or more regulatory agencies), the discharge of materials into
the environment and the protection of the environment. To the best
of the Company's knowledge, it currently is complying with and
expects to continue to comply in all material respects with
existing environmental laws, regulations, statutes and ordinances.
Such compliance with federal, state, local and foreign
environmental protection laws is not expected to have in the future
a material effect on earnings or the competitive position of
Albemarle.
Among other environmental requirements, the Company is subject to
the federal Superfund law under which the Company may be designated
as a potentially responsible party and may be liable for a share of
the costs associated with cleaning up various hazardous waste
sites.
<PAGE>17
ADDITIONAL INFORMATION
- ----------------------
The Company reported in the second quarter of 1997 that two of its
new flame retardants were sampled by various customers, and it has
received orders for Saytex HP 7010 flame retardant, a new product
for use in engineered plastics that has demonstrated good color,
flowability and heat stability characteristics. In the third
quarter, the Company started up a market development unit plant in
its Baton Rouge research and development facility to make this
product and is beginning to fill orders, but the Company does not
expect this product to contribute to profits in the near term. If
the Company obtains substantial customer acceptance, it would move
to full commercial plant operations. In that event, the Company
would expect HP 7010 to be an important contributor to the flame
retardant business.
In the third quarter, the Company initiated sales of naproxen, an
analgesic product, to US customers. The Company continues to be
significantly delayed in reaching its sales goals for naproxen due
to the timing of the U.S. Food and Drug Administration's approvals
of the Company's customers' applications.
<PAGE>18
Part II - OTHER INFORMATION
- ----------------------------
ITEM 1. Legal Proceedings
-----------------
As previously reported in the Company's 1997 second quarter Form
10-Q, the U. S. Environmental Protection Agency (EPA), through the
Department of Justice (DOJ), has threatened suit under the Clean
Air Act ("the Act") alleging that the Company failed to respond
adequately or in a timely manner to certain requests for
information under section 114 of the Act regarding volatile organic
compound (VOC) emissions at the Company's Orangeburg, South
Carolina plant and the plant's compliance with Prevention of
Significant Deterioration (PSD) of air quality requirements. The
DOJ notice demanded a penalty of $530,000 and the submission of
certain information by a date certain. The Company denies that it
failed to respond in any material respect or that there was a
violation of PSD requirements. The Company retained an independent
consultant with experience in the field to review the available
data and prepare and submit a tabulation of that data in the format
demanded by the EPA. This information has been furnished. The
Company continues in settlement negotiations with the DOJ.
ITEM 6. Exhibits and Reports on Form 8-K
---------------------------------
(a) Exhibits - Current By-Laws as amended
- Financial Data Schedule
(b) No reports on Form 8-K have been filed during the
quarter for which this report is filed.
<PAGE>19
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ALBEMARLE CORPORATION
---------------------
(Registrant)
Date: November 12, 1997 By: Dirk Betlem
-----------------
Dirk Betlem
President
(Chief Operating Officer)
Date: November 12, 1997 By: Thomas G. Avant
-----------------
Thomas G. Avant
Senior Vice President
(Principal Accounting
Officer)
<PAGE>20
EXHIBIT INDEX
-------------
Page
Number and Name of Exhibit Number
- -------------------------- ------
28.1 Current By-Laws As Amended 21-35
27 Financial Data Schedule 36-37
BY-LAWS
<PAGE>21
ALBEMARLE CORPORATION
---------------------
BYLAWS
------
ARTICLE I
---------
MEETING OF SHAREHOLDERS
-----------------------
SECTION 1. PLACES OF MEETINGS. All meetings of
the shareholders shall be held at such place, either
within or without the Commonwealth of Virginia, as may,
from time to time, be fixed by the Board of Directors.
SECTION 2. ANNUAL MEETINGS. The annual meeting of
the shareholders, for the election of directors and
transaction of such other business as may come before the
meeting, shall be held each year in Richmond, Virginia at
11:00 a.m. EDT on the fourth Wednesday in April or at
such other date and time as the Board of Directors of the
Corporation may designate from time to time.
SECTION 3. SPECIAL MEETINGS. Special meetings of
shareholders for any purpose or purposes may be called at
any time by the Chairman of the Board or by a majority of
the Board of Directors. At a special meeting, no
business shall be transacted and no corporate action
shall be taken other than that stated in the notice of
the meeting.
SECTION 4. NOTICE OF MEETINGS. Except as
otherwise required by law, written or printed notice
stating the place, day and hour of every meeting of the
shareholders and, in case of a special meeting, the
purpose or purposes for which the meeting is called,
shall be mailed not less than ten (10) nor more than
sixty (60) days before the date of the meeting to each
shareholder of record entitled to vote at such meeting,
at his or her address which appears in the share transfer
books of the Corporation. Meetings may be held without
notice if all the shareholders entitled to vote at the
meeting are present in person or by proxy or if notice is
waived in writing by those not present, either before or
after the meeting.
<PAGE>22
Section 5. QUORUM. Except as otherwise required
by the Articles of Incorporation, any number of
shareholders together holding at least a majority of the
outstanding shares of capital stock entitled to vote with
respect to the business to be transacted, who shall be
present in person or represented by proxy at any meeting
duly called, shall constitute a quorum for the
transaction of business. If less than a quorum shall be
in attendance at the time for which a meeting shall have
been called, the meeting may be adjourned from time to
time by a majority of the shareholders present or
represented by proxy without notice other than by
announcement at the meeting.
Section 6. VOTING. At any meeting of the
shareholders each shareholder of a class entitled to vote
on the matters coming before the meeting shall have one
vote, in person or by proxy, for each share of capital
stock standing in his or her name on the books of the
Corporation at the time of such meeting or on any date
fixed by the Board of Directors not more than seventy
(70) days prior to the meeting. Every proxy shall be in
writing, dated and signed by the shareholder entitled to
vote or his duly authorized attorney-in-fact.
Section 7. VOTING LIST. The officer or agent
having charge of the stock transfer books for shares of
the Corporation shall make, at least ten (10) days before
each meeting of shareholders, a complete list of the
shareholders entitled to vote at such meeting or any
adjournment thereof, with the address of and the number
of shares held by each. Such list, for a period of ten
(10) days prior to such meeting, shall be kept on file at
the registered office of the Corporation or at its
principal place of business or at the office of its
transfer agent or registrar and shall be subject to
inspection by any shareholder at any time during usual
business hours. Such list shall also be produced and
kept open at the time and place of the meeting and shall
be subject to the inspection of any shareholder during
the whole time of the meeting. The original stock
transfer books shall be prima facie evidence as to who
are the shareholders entitled to examine such list or
transfer books or to vote at any meeting of shareholders.
If the requirements of this section have not been
substantially complied with, the meeting shall, on the
demand of any shareholder in person or by proxy, be
adjourned until the requirements are complied with.
<PAGE>23
Section 8. SHAREHOLDER PROPOSALS. To be properly
brought before an annual meeting of shareholders,
business must be (i) specified in the notice of meeting
(or any supplement thereto) given by or at the direction
of the Board of Directors, (ii) otherwise properly
brought before the meeting by or at the direction of the
Board of Directors, or (iii) otherwise properly brought
before the meeting by a shareholder. In addition to any
other applicable requirements, for business to be
properly brought before an annual meeting by a
shareholder, the shareholder must have given timely
notice thereof in writing to the Secretary of the
Corporation. To be timely, a shareholder's notice must
be given, either by personal delivery or by United States
mail, postage prepaid, to the Secretary of the
Corporation not later than ninety (90) days in advance of
the annual meeting. A shareholder's notice to the
Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting
(i) a brief description of the business desired to be
brought before the annual meeting (including the specific
proposal to be presented) and the reasons for conducting
such business at the annual meeting, (ii) the name and
record address of the shareholder proposing such
business, (iii) the class and number of shares of the
Corporation that are beneficially owned by the
shareholder, and (iv) any material interest of the
shareholder in such business.
In the event that a shareholder attempts to bring
business before an annual meeting without complying with
the provisions of this Section 8, the Chairman of the
meeting shall declare to the meeting that the business
was not properly brought before the meeting in accordance
with the foregoing procedures, and such business shall
not be transacted.
No business shall be conducted at the annual
meeting except in accordance with the procedures set
forth in this Section 8, provided, however, that nothing
in this Section 8 shall be deemed to preclude discussion
by any shareholder of any business properly brought
before the annual meeting.
SECTION 9. INSPECTORS. An appropriate number of
inspectors for any meeting of shareholders may be
appointed by the Chairman of such meeting. Inspectors so
appointed will open and close the polls, will receive and
take charge of proxies and ballots, and will decide all
questions as to the qualifications of voters, validity of
proxies and ballots, and the number of votes properly
cast.
<PAGE>24
ARTICLE II
----------
Directors
---------
SECTION 1. GENERAL POWERS. The property, affairs
and business of the Corporation shall be managed under
the direction of the Board of Directors, and except as
otherwise expressly provided by law, the Articles of
Incorporation or these Bylaws, all of the powers of the
Corporation shall be vested in such Board.
Any contract to which the Corporation is a party
that is (i) not in the ordinary course of business or
(ii) is in the ordinary course of business and involves a
commitment by the Corporation of more than $100,000 and
is not executed by the Chairman of the Board, must be
approved by the Board of Directors or the Executive
Committee prior to delivery.
SECTION 2. NUMBER OF DIRECTORS. The Board of
Directors shall be ten (10) in number.
SECTION 3. ELECTION OF DIRECTORS.
(a) Directors shall be elected each year at the
annual meeting of shareholders.
(b) Directors shall hold their offices for a
term of one year and until their successors are elected.
Any director may be removed from office as set forth in
the Articles of Incorporation.
(c) Any vacancy occurring in the Board of
Directors may be filled by the affirmative vote of the
majority of the remaining directors though less than a
quorum of the Board of Directors.
(d) A majority of the number of directors fixed
by these Bylaws shall constitute a quorum for the
transaction of business. The act of a majority of the
directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
<PAGE>25
SECTION 4. MEETINGS OF DIRECTORS. Meetings of
the Board of Directors shall be held at places within or
without the Commonwealth of Virginia and at times fixed
by resolution of the Board or upon call of the Chairman
of the Board, and the Secretary or officer performing the
Secretary's duties shall give not less than twenty-four
(24) hours' notice by letter, telegraph or telephone (or
in person) of all meetings of the directors, provided
that notice need not be given of regular meetings held at
times and places fixed by resolution of the Board. An
annual meeting of the Board of Directors shall be held as
soon as practicable after the adjournment of the annual
meeting of shareholders. Meetings may be held at any
time without notice if all of the Directors are present,
or if those not present waive notice in writing either
before or after the meeting. Directors may be allowed,
by resolution of the Board, a reasonable fee and expenses
for attendance at meetings.
SECTION 5. NOMINATIONS. Subject to the rights of
holders of any class or series of stock having a
preference over the common stock as to dividends or upon
liquidation, nominations for the election of Directors
shall be made by the Board of Directors or a committee
appointed by the Board of Directors or by any shareholder
entitled to vote in the election of Directors generally.
However, any shareholder entitled to vote in the election
of Directors generally may nominate one or more persons
for election as Directors at a meeting only if written
notice of such shareholder's intent to make such
nomination or nominations has been given, either by
personal delivery or by United States mail, postage
prepaid, to the Secretary of the Corporation not later
than (i) with respect to an election to be held at an
annual meeting of shareholders, ninety (90) days in
advance of such meeting, and (ii) with respect to an
election to be held at a special meeting of shareholders
for the election of Directors, the close of business on
the seventh (7th) day following the date on which notice
of such meeting is first given to shareholders. Each
notice shall set forth: (a) the name and address of the
shareholder who intends to make the nomination and of the
person or persons to be nominated; (b) a representation
that the shareholder is a holder of record of stock of
the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice;
(c) a description of all arrangements or understandings
between the shareholder and each nominee and any other
person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be
made by the shareholder; (d) such other information
regarding each nominee proposed by such shareholder as
would be required to be included in a proxy statement
filed pursuant to the proxy rules of the Securities and
Exchange Commission, had the nominee been nominated, or
intended to be nominated, by the Board of Directors; and
(e) the consent of each nominee to serve as a Director of
the Corporation if so elected. The Chairman of the
meeting may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing
procedure.
<PAGE>26
ARTICLE III
-----------
Committees
----------
SECTION 1. EXECUTIVE COMMITTEE. The Board of
Directors shall, by vote of a majority of the number of
Directors fixed by these Bylaws, designate an Executive
Committee which shall consist of three or more Directors,
including the Chairman of the Board. The members of the
Executive Committee shall serve until their successors
are designated by the Board of Directors, until removed
or until the Executive Committee is dissolved by the
Board of Directors. All vacancies which may occur in the
Executive Committee shall be filled by the Board of
Directors.
When the Board of Directors is not in session, the
Executive Committee shall have all power vested in the
Board of Directors by law, the Articles of Incorporation
or these By- laws, except as otherwise provided in the
Virginia Stock Corporation Act. The Executive Committee
shall report at the next regular or special meeting of
the Board of Directors all action which the Executive
Committee may have taken on behalf of the Board since the
last regular or special meeting of the Board of
Directors.
Meetings of the Executive Committee shall be held
at such places and at such times fixed by resolution of
the Committee, or upon call of the Chairman of the Board.
Not less than twelve (12) hours' notice shall be given by
letter, telegraph or telephone (or in person) of all
meetings of the Executive Committee, provided that notice
need not be given of regular meetings held at times and
places fixed by resolution of the Committee and that
meetings may be held at any time without notice if all of
the members of the Committee are present or if those not
present waive notice in writing either before or after
the meeting. A majority of the members of the Executive
Committee then serving shall constitute a quorum for the
transaction of business at any meeting.
SECTION 2. EXECUTIVE COMPENSATION COMMITTEE. The
Board of Directors, at its regular annual meeting, shall
designate an Executive Compensation Committee which shall
consist of two or more Directors who shall not be
eligible for bonus, stock option or stock appreciation
rights. In addition, the Board at any time may designate
one or more alternate members of such Committee who shall
be Directors not eligible for bonus, stock option or
stock appreciation rights who may act in place of any
absent regular member upon invitation by the Chairman or
Secretary of the Committee.
<PAGE>27
With respect to bonuses, the Executive Compensation
Committee shall have and may exercise the powers to
determine the amounts annually available for bonuses
pursuant to any bonus plan or formula approved by the
Board, to determine bonus awards to executive officers
and to exercise such further powers with respect to
bonuses as may from time to time be conferred by the
Board of Directors.
With respect to salaries, the Executive Compensation
Committee shall have and may exercise the power to fix
and determine from time to time all salaries of the
executive officers of the Corporation, and such further
powers with respect to salaries as may from time to time
be conferred by the Board of Directors.
The Executive Compensation Committee shall administer
the Corporation's Incentive Stock Option Plan (the Plan)
and from time to time may grant, consistent with the
Plan, stock options and stock appreciation rights and
authorize the granting of restricted stock awards.
Vacancies in the Executive Compensation Committee
shall be filled by the Board of Directors, and members
shall be subject to removal by the Board at any time.
The Executive Compensation Committee shall fix its
own rules of procedure. A majority of the number of
regular members then serving shall constitute a quorum;
and regular and alternate members present shall be
counted to determine whether there is a quorum. The
Executive Compensation Committee shall keep minutes of
its meetings, and all action taken by it shall be
reported to the Board of Directors.
<PAGE>28
SECTION 3. AUDIT COMMITTEE. The Board of Directors
at its regular annual meeting shall designate an Audit
Committee which shall consist of two or more Directors
whose membership on the Committee shall meet the
requirements set forth in the rules of the New York Stock
Exchange, as amended from time to time. Vacancies in the
Committee shall be filled by the Board of Directors with
Directors meeting the requirements set forth above,
giving consideration to continuity of the Committee, and
members shall be subject to removal by the Board at any
time. The Committee shall fix its own rules of procedure
and a majority of the members serving shall constitute a
quorum. The Committee shall meet at least twice a year
with both the internal and the Corporation's outside
auditors present at each meeting and shall keep minutes
of its meetings and all action taken shall be reported to
the Board of Directors. The Committee shall review the
reports and minutes of any audit committees of the
Corporation's subsidiaries. The Committee shall review
the Corporation's financial reporting process, including
accounting policies and procedures. The Committee shall
examine the report of the Corporation's outside auditors,
consult with them with respect to their report and the
standards and procedures employed by them in their audit,
report to the Board the results of its study and
recommend the selection of auditors for each fiscal year.
SECTION 4. NOMINATING COMMITTEE. The Board of
Directors shall designate a Nominating Committee which
shall consist of three or more Directors. The Committee
shall make recommendations to the Board regarding
nominees for election as Directors by the shareholders at
each Annual Shareholders' Meeting and make such other
recommendations regarding tenure, classification and
compensation of Directors as the Committee may deem
advisable from time to time. The Committee shall fix its
own rules of procedure and a majority of the members
serving shall constitute a quorum.
SECTION 5. OTHER COMMITTEES OF THE BOARD. The
Board of Directors, by resolution duly adopted, may
establish such other committees of the Board as it may
deem advisable and the members, terms and authority of
such committees shall be as set forth in the resolutions
establishing the same.
<PAGE>29
ARTICLE IV
----------
Officers
--------
SECTION 1. ELECTION. The officers of the
Corporation shall consist of a Chairman of the Board, a
Vice Chairman of the Board, a President, one or more Vice
Presidents (any one or more of whom may be designated as
Executive Vice Presidents or Senior Vice Presidents), a
Secretary and a Treasurer. In addition, such other
officers as are provided in Section 3 of this Article may
from time to time be elected by the Board of Directors.
All officers shall hold office until the next annual
meeting of the Board of Directors or until their
successors are elected. The Chairman of the Board, the
Vice Chairman of the Board and the President shall be
chosen from among the Directors. Any two officers may be
combined in the same person as the Board of Directors may
determine, except that the President and Secretary may
not be the same person.
SECTION 2. REMOVAL OF OFFICERS; VACANCIES. Any
officer of the Corporation may be removed summarily with
or without cause, at any time by a resolution passed at
any meeting by affirmative vote of a majority of the
number of Directors fixed by these Bylaws. Vacancies may
be filled at any meeting of the Board of Directors.
SECTION 3. OTHER OFFICERS. Other officers may
from time to time be elected by the Board, including,
without limitation, one or more Assistant Secretaries and
Assistant Treasurers.
SECTION 4. DUTIES. The officers of the
Corporation shall have such duties as generally pertain
to their offices, respectively, as well as such powers
and duties as are hereinafter provided and as from time
to time shall be conferred by the Board of Directors.
The Board of Directors may require any officer to give
such bond for the faithful performance of his duties as
the Board may see fit.
<PAGE>30
SECTION 5. DUTIES OF THE CHAIRMAN OF THE BOARD.
The Chairman of the Board shall be the chief executive
officer of the Corporation. He shall be responsible for
the execution of the policies of the Board of Directors,
shall serve as the Chairman of the Executive Committee
and shall have direct supervision over the business of
the Corporation and its several officers, subject to the
authority of the Board of Directors. Except as otherwise
provided in these Bylaws or the resolutions establishing
such committees, he shall be ex officio a member of all
committees of the Board with the power to vote. He shall
preside at all meetings of shareholders, the Board of
Directors and the Executive Committee. In the incapacity
or absence of the President, the Chairman of the Board
shall perform the duties and have the authority of the
President. The Chairman of the Board may sign and
execute in the name of the Corporation deeds, mortgages,
bonds, contracts or other instruments, except in cases
where the signing and the execution thereof shall be
expressly delegated by the Board of Directors or by these
Bylaws to some other officer or agent of the Corporation
or shall be required by law otherwise to be signed or
executed. In addition, he shall perform all duties
incident to the office of the Chairman of the Board and
such other duties as from time to time may be assigned to
him by the Board of Directors.
SECTION 6. DUTIES OF THE VICE CHAIRMAN OF THE
BOARD. The Vice Chairman of the Board shall perform all
duties incident to the office of the Vice Chairman of the
Board and shall have such other powers and duties as may
from time to time be assigned to him by the Board of
Directors or the Chairman of the Board. The Vice
Chairman of the Board shall perform the duties of the
Chairman of the Board in the absence of the Chairman of
the Board. The Vice Chairman of the Board may sign and
execute in the name of the Corporation deeds, mortgages,
bonds, contracts and other instruments, except in cases
where the signing and execution thereof shall be
expressly delegated by the Board of Directors or by these
Bylaws to some other officer or agent of the Corporation
or shall be required by law otherwise to be signed or
executed.
SECTION 7. DUTIES OF THE PRESIDENT. The
President shall be the Chief Operating Officer of the
Corporation and shall have direct supervision over the
business of the Corporation and its several officers,
subject to the authority of the Board of Directors and
the Chairman of the Board, and shall consult with and
report to the aforementioned officer. The President may
sign and execute in the name of the Corporation deeds,
mortgages, bonds, contracts or other instruments, except
in cases where the signing and the execution thereof
shall be expressly delegated by the Board of Directors or
by these Bylaws to some other officer or agent of the
Corporation or shall be required by law otherwise to be
signed or executed. In addition, he shall perform all
duties incident to the office of the President and such
other duties as from time to time may be assigned to him
by the Board of Directors or the Chairman of the Board.
<PAGE>31
SECTION 8. DUTIES OF THE VICE PRESIDENTS. Each
Vice President of the Corporation (including any
Executive Vice President and Senior Vice President) shall
have powers and duties as may from time to time be
assigned to him by the Board of Directors, the Chairman
of the Board or the President. When there shall be more
than one Vice President of the Corporation, the Board of
Directors may from time to time designate one of them to
perform the duties of the President in the absence of the
President. Any Vice President of the Corporation may
sign and execute in the name of the Corporation deeds,
mortgages, bonds, contracts and other instruments, except
in cases where the signing and execution thereof shall be
expressly delegated by the Board of Directors or by these
Bylaws to some other officer or agent of the Corporation
or shall be required by law otherwise to be signed or
executed.
SECTION 9. DUTIES OF THE TREASURER. The
Treasurer shall have charge and custody of and be
responsible for all funds and securities of the
Corporation, and shall cause all such funds and
securities to be deposited in such banks and depositories
as the Board of Directors from time to time may direct.
He shall maintain adequate accounts and records of all
assets, liabilities and transactions of the Corporation
in accordance with generally accepted accounting
practices; shall exhibit his accounts and records to any
of the Directors of the Corporation at any time upon
request at the office of the Corporation; shall render
such statements of his accounts and records and such
other statements to the Board of Directors and officers
as often and in such manner as they shall require; and
shall make and file (or supervise the making and filing
of) all tax returns required by law. He shall in general
perform all duties incident to the office of Treasurer
and such other duties as from time to time may be
assigned to him by the Board of Directors, the Chairman
of the Board or the President.
<PAGE>32
SECTION 10. DUTIES OF THE SECRETARY. The
Secretary shall act as secretary of all meetings of the
Board of Directors, the Executive Committee and all other
Committees of the Board, and the shareholders of the
Corporation, and shall keep the minutes thereof in the
proper book or books to be provided for that purpose. He
shall see that all notices required to be given by the
Corporation are duly given and served; shall have custody
of the seal of the Corporation and shall affix the seal
or cause it to be affixed to all certificates for stock
of the Corporation and to all documents the execution of
which on behalf of the Corporation under its corporate
seal is duly authorized in accordance with the provisions
of these Bylaws; shall have custody of all deeds, leases,
contracts and other important corporate documents; shall
have charge of the books, records and papers of the
Corporation relating to its organization and management
as a Corporation; shall see that the reports, statements
and other documents required by law (except tax returns)
are properly filed; and shall, in general, perform all
the duties incident to the office of Secretary and such
other duties as from time to time may be assigned to him
by the Board of Directors, the Chairman of the Board or
the President.
SECTION 11. OTHER DUTIES OF OFFICERS. Any officer
of the Corporation shall have, in addition to the duties
prescribed herein or by law, such other duties as from
time to time shall be prescribed by the Board of
Directors, the Chairman of the Board or the President.
ARTICLE V
---------
Capital Stock
-------------
SECTION 1. CERTIFICATES. The shares of capital
stock of the Corporation shall be evidenced by
certificates in forms prescribed by the Board of
Directors and executed in any manner permitted by law and
stating thereon the information required by law.
Transfer agents and/or registrars for one or more classes
of the stock of the Corporation may be appointed by the
Board of Directors and may be required to countersign
certificates representing stock of such class or classes.
In the event that any officer whose signature or
facsimile thereof shall have been used on a stock
certificate shall for any reason cease to be an officer
of the Corporation and such certificate shall not then
have been delivered by the Corporation, the Board of
Directors may nevertheless adopt such certificate and it
may then be issued and delivered as though such person
had not ceased to be an officer of the Corporation.
<PAGE>33
SECTION 2. LOST, DESTROYED AND MUTILATED
CERTIFICATES. Holders of the stock of the Corporation
shall immediately notify the Corporation of any loss,
destruction or mutilation of the certificate therefor,
and the Board of Directors may, in its discretion, cause
one or more new certificates for the same number of
shares in the aggregate to be issued to such stockholder
upon the surrender of the mutilated certificate or upon
satisfactory proof of such loss or destruction, and the
deposit of a bond in such form and amount and with such
surety as the Board of Directors may require.
SECTION 3. TRANSFER OF STOCK. The stock of the
Corporation shall be transferable or assignable only on
the books of the Corporation by the holders in person or
by attorney on surrender of the certificate for such
shares duly endorsed and, if sought to be transferred by
attorney, accompanied by a written power of attorney to
have the same transferred on the books of the
Corporation. The Corporation will recognize the
exclusive right of the person registered on its books as
the owner of shares to receive dividends and to vote as
such owner.
SECTION 4. FIXING RECORD DATE. For the purpose
of determining shareholders entitled to notice of or to
vote at any meeting of the shareholders or any
adjournment thereof, or entitled to receive payment for
any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of
Directors may fix in advance a date as the record date
for any such determination of shareholders, such date in
any case to be not more than seventy (70) days prior to
the date on which the particular action, requiring such
determination of shareholders, is to be taken. If no
record date is fixed for the determination of
shareholders entitled to notice of or to vote at a
meeting of shareholders, or shareholders entitled to
receive payment of a dividend, the date on which notice
of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such
dividend is adopted, as the case may be, shall be the
record date for such determination of shareholders. When
a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this
section such determination shall apply to any adjournment
thereof.
ARTICLE VI
----------
Miscellaneous Provisions
-------------------------
SECTION 1. SEAL. The seal of the Corporation
shall consist of a flat-face circular die, of which there
may be any number of counterparts, on which there shall
be engraved in the center the words "Albemarle
Corporation."
<PAGE>34
SECTION 2. FISCAL YEAR. The fiscal year of the
Corporation shall end on December 31st of each year, and
shall consist of such accounting periods as may be
recommended by the Treasurer and approved by the
Executive Committee.
SECTION 3. BOOKS AND RECORDS. The Corporation
shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its
shareholders and Board of Directors; and shall keep at
its registered office or principal place of business, or
at the office of its transfer agent or registrar a record
of its shareholders, giving the names and addresses of
all shareholders, and the number, class and series of the
shares being held.
Any person who shall have been a shareholder of
record for at least six months immediately preceding his
demand or who shall be the holder of record of at least
five percent (5%) of all the outstanding shares of the
Corporation, upon written demand stating the purpose
thereof, shall have the right to examine, in person, or
by agent or attorney at any reasonable time or times, for
any proper purpose, its books and records of account,
minutes and records of shareholders and to make extracts
therefrom. Upon the written request of a shareholder,
the Corporation shall mail to such shareholder its most
recent published financial statements showing in
reasonable detail its assets and liabilities and the
results of its operations.
The Board of Directors shall, subject to the
provisions of the foregoing paragraph of this section, to
the provisions of Section 7 of Article I and to the laws
of the Commonwealth of Virginia, have the power to
determine from time to time whether and to what extent
and under what conditions and limitations the accounts,
records and books of the Corporation, or any of them,
shall be open to the inspection of the shareholders.
SECTION 4. CHECKS, NOTES AND DRAFTS. Checks,
notes, drafts and other orders for the payment of money
shall be signed by such persons as the Board of Directors
from time to time may authorize. When the Board of
Directors so authorizes, however, the signature of any
such person may be a facsimile.
SECTION 5. AMENDMENT OF BYLAWS. These Bylaws may
be amended or altered at any meeting of the Board of
Directors by affirmative vote of a majority of the number
of Directors fixed by these Bylaws. The shareholders
entitled to vote in respect of the election of directors,
however, shall have the power to rescind, alter, amend or
repeal any Bylaws and to enact Bylaws which, if expressly
so provided, may not be amended, altered or repealed by
the Board of Directors.
<PAGE>35
SECTION 6. VOTING OF STOCK HELD. The Chairman of
the Board or such other officer or officers as may be
designated by the Board of Directors or the Executive
Committee shall from time to time appoint an attorney or
attorneys or agent or agents of this Corporation, in the
name and on behalf of this Corporation, to cast the vote
which this Corporation may be entitled to cast as a
shareholder or otherwise in any other corporation any of
whose stock or securities may be held in this
Corporation, at meetings of the holders of the stock or
other securities of such other corporation, or to consent
in writing to any action by any of such other
corporation, and shall instruct the person or persons so
appointed as to the manner of casting such votes or
giving such consent and may execute or cause to be
executed on behalf of this Corporation and under its
corporate seal or otherwise, such written proxies,
consents, waivers or other instruments as may be
necessary or proper in the premises; or, in lieu of such
appointment, the Chairman of the Board or any such
designated officer or officers may attend in person any
meetings of the holders of stock or other securities of
any such other corporation and there vote or exercise any
or all power of this Corporation as the holder of such
stock or other securities of such other corporation.
SECTION 7. CONTROL SHARE ACQUISITION STATUTE.
Article 14.1 of the Virginia Stock Corporation Act
("Control Share Acquisitions") shall not apply to
acquisitions of shares of stock of the Corporation.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED
BALANCE SHEET AND CONSOLIDATED STATEMENT OF INCOME FILED AS PART OF THE
QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH QUARTERLY REPORT ON FORM 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> $10,339
<SECURITIES> $0
<RECEIVABLES> $151,967
<ALLOWANCES> $1,510
<INVENTORY> $95,372
<CURRENT-ASSETS> $273,416
<PP&E> $1,180,169
<DEPRECIATION> $682,270
<TOTAL-ASSETS> $864,116
<CURRENT-LIABILITIES> $125,119
<BONDS> $0
$0
$0
<COMMON> $554
<OTHER-SE> $539,420
<TOTAL-LIABILITY-AND-EQUITY> $864,116
<SALES> $613,180
<TOTAL-REVENUES> $613,180
<CGS> $416,089
<TOTAL-COSTS> $521,077
<OTHER-EXPENSES> $0
<LOSS-PROVISION> $0
<INTEREST-EXPENSE> $559
<INCOME-PRETAX> $92,383
<INCOME-TAX> $33,295
<INCOME-CONTINUING> $59,088
<DISCONTINUED> $0
<EXTRAORDINARY> $0
<CHANGES> $0
<NET-INCOME> $59,088
<EPS-PRIMARY> $1.06
<EPS-DILUTED> $1.06
</TABLE>
