SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ALBEMARLE CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
ALBEMARLE CORPORATION
330 SOUTH FOURTH STREET
P.O. BOX 1335
RICHMOND, VIRGINIA 23210
[LOGO]
ANNUAL MEETING OF SHAREHOLDERS
March 24, 1997
To the Shareholders:
We enclose our annual report describing Albemarle's operations during the
past year. We hope you read this report, which summarizes major corporate
developments during the year.
We cordially invite you to attend the annual meeting of shareholders to be
held in the RESTORED GUN FOUNDRY BUILDING OF THE TREDEGAR IRON WORKS, 500
TREDEGAR STREET, in Richmond, Virginia, on Wednesday, April 23, 1997, at 11:00
A.M., Eastern Daylight Time. A formal notice of the meeting, together with a
proxy statement and proxy form, is enclosed with this letter. The notice points
out that you will be asked to elect a Board of Directors and approve the
designation of auditors for the coming year.
Please read the notice and proxy statement carefully, complete the proxy
form and mail it promptly.
Sincerely yours,
FLOYD D. GOTTWALD, JR.
CHAIRMAN OF THE BOARD
CHIEF EXECUTIVE OFFICER
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of the holders of shares of
Common Stock of Albemarle Corporation (the "Corporation") will be held in the
restored gun foundry building of the Tredegar Iron Works, 500 Tredegar Street,
Richmond, Virginia, on Wednesday, April 23, 1997, at 11:00 A.M. Eastern Daylight
Time, for the following purposes:
1. To elect a Board of Directors to serve for the ensuing year;
2. To approve the designation by the Board of Directors of Coopers &
Lybrand L.L.P. as auditors for the fiscal year ending December 31,
1997; and
3. To transact such other business as may properly come before the
meeting.
Holders of shares of Albemarle Common Stock of record at the close of
business on March 10, 1997, will be entitled to vote at the meeting.
You are requested to fill in, sign, date and return the enclosed proxy
promptly, regardless of whether you expect to attend the meeting. A postage-paid
return envelope is enclosed for your convenience.
If you are present at the meeting, you may vote in person even if you
already have sent in your proxy.
By Order of the Board of Directors
E. WHITEHEAD ELMORE, SECRETARY
March 24, 1997
<PAGE>
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
ALBEMARLE CORPORATION
TO BE HELD APRIL 23, 1997
APPROXIMATE DATE OF MAILING -- MARCH 24, 1997
Proxies in the form enclosed are solicited by the Board of Directors for
the Annual Meeting of Shareholders to be held on Wednesday, April 23, 1997. Any
person giving a proxy may revoke it at any time before it is voted by delivering
another proxy, or written notice of revocation, to the Secretary of the
Corporation. A proxy, if executed and not revoked, will be voted, and, if it
contains any specific instructions, will be voted in accordance with such
instructions.
On March 10, 1997, the date for determining shareholders entitled to vote
at the meeting, there were outstanding 55,046,183 shares of Albemarle Common
Stock. Each share of Albemarle Common Stock is entitled to one vote.
The election of each nominee for director requires the affirmative vote of
the holders of a plurality of the shares of Albemarle Common Stock voted in the
election of directors. Votes that are withheld and shares held in street name
that are not voted in the election of directors will not be included in
determining the number of votes cast. Unless otherwise specified in the
accompanying form of proxy, it is intended that votes will be cast for the
election of all of the nominees as directors.
The cost of the solicitation of proxies will be borne by the Corporation.
In addition to the use of the mails, proxies may be solicited personally or by
telephone by regular employees of the Corporation. Corporate Investor
Communications, Inc., has been engaged to assist in the solicitation of proxies
from brokers, nominees, fiduciaries and other custodians. The Corporation will
pay that firm $7,000 for its services and reimburse its out-of-pocket expenses.
The Corporation's street address is 330 South Fourth Street, Richmond,
Virginia 23219.
ELECTION OF DIRECTORS
Proxies will be voted for the election as directors for the ensuing year of
the persons named below (or if for any reason unavailable, of such substitutes
as the Board of Directors may designate). The Board of Directors has no reason
to believe that any of the nominees will be unavailable.
CRAIG R. ANDERSSON; age 59; director since March 1, 1996; part-time consultant,
having served as Vice Chairman of Aristech Chemical Corporation (specialty
chemicals business) from January 1, 1994, until April 30, 1995, and
President and Chief Operating Officer of Aristech Chemical Corporation
prior thereto. Other directorship: RMI Titanium Company.
DIRK BETLEM; age 58; director since August 15, 1996; President and Chief
Operating Officer of the Corporation since August 15, 1996, having served
as Senior Vice President-International from April 24, 1996, to August 15,
1996, Vice President-International from March 1, 1994, to April 24, 1996,
Vice President-International of Ethyl Corporation from June 1, 1993, to
March 1, 1994, and as Vice President-Imaging Systems of E.I. DuPont de
Nemours and Company, Inc. from June 1991 to November 1992.
1
<PAGE>
FLOYD D. GOTTWALD, JR.; age 74; director since 1994; Chairman of the Board and
Executive Committee and Chief Executive Officer of the Corporation since
March 1, 1994; Vice Chairman of the Board of Ethyl Corporation from March
1, 1994, until February 29, 1996, having served as Chairman of the Board
and the Executive Committee of Ethyl Corporation from April 1992 until
March 1, 1994, and as Chairman of the Board and Executive Committee and
Chief Executive Officer of Ethyl Corporation prior thereto. Other
directorship: Tredegar Industries, Inc.
JOHN D. GOTTWALD; age 42; director since 1994; President and Chief Executive
Officer of Tredegar Industries, Inc. (plastics and aluminum business).
Other directorship: Tredegar Industries, Inc.
ANDRE B. LACY; age 57; director since 1994; Chairman of the Board, Chief
Executive Officer and President of LDI Management, Inc., Managing General
Partner, LDI, Ltd. (industrial and investment limited partnership). Other
directorships: Herff Jones, Inc., IPALCO Enterprises, Inc., The National
Bank of Indianapolis, Patterson Dental Co., Tredegar Industries, Inc. and
FinishMaster, Inc.
SEYMOUR S. PRESTON, III; age 63; director since March 1, 1996; Chairman of the
Board and Chief Executive Officer of AAC Engineered Systems, Inc.
(manufacturer of centrifugal, deburring and finishing machinery) since
1994, having served as President and Chief Executive Officer of Elf Atochem
North America, Inc. (chemicals and plastics business) prior thereto. Other
directorship: CoreStates Bank, N.A.
EMMETT J. RICE; age 77; director since 1994; retired member of the Board of
Governors of the Federal Reserve System. Other directorships: Tredegar
Industries, Inc. and Jardine-Fleming China Region Fund, Inc.
CHARLES B. WALKER; age 58; director since 1994; Vice Chairman of the Board and
Chief Financial Officer of the Corporation (and Treasurer of the
Corporation until March 1, 1996) since March 1, 1994, having served as
Executive Vice President and Chief Financial Officer of Ethyl Corporation
from August 1, 1989, to March 1, 1994, and Treasurer of Ethyl Corporation
since July 1, 1993. Other directorships: Ethyl Corporation (Vice Chairman,
Chief Financial Officer and Treasurer) and Nations Fund Trust/Nations Fund,
Inc.
ANNE MARIE WHITTEMORE; age 51; director since March 1, 1996; Partner of McGuire,
Woods, Battle & Boothe, L.L.P. (law firm). Other directorships: Owens &
Minor, Inc., USF&G Corporation, James River Corporation and T. Rowe Price
Associates, Inc.
In 1996, each director attended at least 75% of the aggregate of (i) the
total number of meetings of all committees of the Board on which the director
then served and (ii) the total number of meetings of the Board of Directors held
during 1996 while he or she was a member of the Board of Directors. Six meetings
of the Corporation's Board of Directors were held during 1996.
The Corporation's executive committee currently consists of Messrs. Floyd
D. Gottwald, Jr., Walker and Betlem. The executive committee acts not only as
the executive committee of the Board of Directors but also as the Corporation's
principal management committee. During 1996, the executive committee met on
three occasions as the executive committee of the Board of Directors and on ten
occasions as the principal management committee.
Messrs. Lacy and Preston and Mrs. Whittemore currently serve on the
Corporation's audit committee. During 1996, the audit committee met twice. The
audit committee reviews the Corporation's internal audit and financial reporting
functions and the scope and results of the audit performed by the Corporation's
independent accountants and matters relating thereto and reports thereon to the
Board of Directors. The audit committee also reviews audit fees and recommends
to the Board of Directors the engagement of the independent accountants of the
Corporation.
2
<PAGE>
The nominating committee currently consists of Messrs. Floyd D. Gottwald,
Jr., Lacy and Rice. During 1996, the nominating committee met three times. The
nominating committee recommends candidates for election as directors and in some
cases the election of officers. The Corporation's bylaws provide that a
shareholder of the Corporation entitled to vote for the election of directors
may nominate persons for election to the Board by mailing written notice to the
Secretary of the Corporation not later than (i) with respect to an election to
be held at an annual meeting of shareholders, 60 days prior to such meeting and
(ii) with respect to an election to be held at a special meeting of shareholders
for the election of directors, the close of business on the seventh day
following the date on which notice of such meeting is first given to
shareholders. Such shareholder's notice shall include (i) the name and address
of the shareholder and of each person to be nominated, (ii) a representation
that the shareholder is a holder of record of stock of the Corporation entitled
to vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate each person specified, (iii) a description of all
understandings between the shareholder and each nominee and any other person
(naming such person) pursuant to which the nomination is to be made by the
shareholder, (iv) such other information regarding each nominee as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission had the nominee been nominated by the
Board of Directors and (v) the consent of each nominee to serve as a director of
the Corporation if so elected.
Messrs. Rice and Andersson and Mrs. Whittemore currently serve as the
Corporation's executive compensation committee. During 1996, the executive
compensation committee met on eight occasions. This committee approves the
salaries of management-level employees. It also approves all bonus awards,
certain consultant agreements and initial salaries of new management level
personnel and grants options and restricted stock under the Corporation's
Omnibus Stock Incentive Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Floyd D. Gottwald, Jr., and Bruce C. Gottwald, a director of the
Corporation until February 29, 1996, are brothers. William M. Gottwald, MD, who
is a Vice President of the Corporation and was a director of the Corporation
until February 29, 1996, and John D. Gottwald, a director of the Corporation,
are sons of Floyd D. Gottwald, Jr. Bruce C. Gottwald, Jr., a director of the
Corporation until February 29, 1996, is a son of Bruce C. Gottwald. The
Gottwalds may be deemed to be control persons of the Corporation.
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of the forms required by Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that have been
received by the Corporation, the Corporation believes that there has been
compliance with all filing requirements applicable to its officers, directors
and beneficial owners of greater than 10% of the Albemarle Common Stock, except
that (i) William M. Gottwald, MD, due to a clerical error, was late in reporting
the receipt of an option to acquire shares of Albemarle Common Stock in his
Annual Statement of Beneficial Ownership of Securities on Form 5 for 1996 filed
on February 14, 1997, which Form was amended on February 18, 1997; and (ii)
Dixie E. Goins inadvertently omitted 44 shares held in a brokerage account from
his Initial Statement of Beneficial Ownership of Securities on Form 3 filed on
March 1, 1994. Mr. Goins included such shares in his Annual Statement of
Beneficial Ownership of Securities on Form 5 for 1996.
3
<PAGE>
STOCK OWNERSHIP
The following table lists any person (including any "group" as that term is
used in Section 13(d)(3) of the Exchange Act) who, to the knowledge of the
Corporation, was the beneficial owner as of December 31, 1996, of more than 5%
of the outstanding voting shares of the Corporation.
<TABLE>
<CAPTION>
TITLE OF NAME AND ADDRESS OF NUMBER OF
CLASS BENEFICIAL OWNERS SHARES PERCENT OF CLASS
- ------------- ------------------------------------- ---------- ----------------
<S> <C>
Common Stock Floyd D. Gottwald, Jr., and 18,215,869(b)(c) 33.09%
Bruce C. Gottwald (a)
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23218
NationsBank Corporation and 6,425,624 11.67%
related entities (d)
c/o NationsBank Corporation
NationsBank Plaza
Charlotte, North Carolina 28255
J. P. Morgan & Co., Incorporated (e) 8,346,216 15.10%
60 Wall Street
New York, New York 10260
</TABLE>
- ---------------
(a) Floyd D. Gottwald, Jr., and Bruce C. Gottwald (the "Gottwalds"), together
with members of their immediate families, may be deemed to be a "group" for
purposes of Section 13(d)(3) of the Exchange Act, although there is no
agreement among them with respect to the acquisition, retention,
disposition or voting of Albemarle Common Stock.
(b) As of December 31, 1996, the Gottwalds, individually or collectively, have
sole voting and investment power over all of the shares disclosed except
13,977,180 shares held by wives, children and in certain trust
relationships, some of which might be deemed to be beneficially owned by
the Gottwalds under the rules and regulations of the Securities and
Exchange Commission, but as to which the Gottwalds disclaim beneficial
ownership. Shares owned by the adult children of Floyd D. Gottwald, Jr.,
and Bruce C. Gottwald are included in the holdings of the Gottwalds as a
group, but are not attributed to Floyd D. Gottwald, Jr., other than in this
table. This amount includes 6,999 shares of Albemarle Common Stock, with
respect to which the Gottwalds or members of their immediate families have
the right to acquire beneficial ownership within 60 days of December 31,
1996, pursuant to the Corporation's Omnibus Stock Incentive Plan.
(c) This amount includes shares owned by John D. Gottwald, a director of the
Corporation, and William M. Gottwald, a Vice President of the Corporation.
See the table on page 5 for information on the share ownership as of
January 31, 1997, of each member of the Gottwald family who is an executive
officer or director of the Corporation. This amount includes any shares
owned of record by the Trustees under various employee savings plans for
the benefit of the Gottwalds and the members of their immediate families.
This amount does not include shares held by the Trustees of such plans for
the benefit of other employees. Shares held under the Corporation's savings
plan are voted by the Trustee in accordance with instructions solicited
from employees participating in the plan. If a participating employee does
not give the Trustee voting instructions, his shares generally are voted by
the Trustee in accordance with the Board of Directors' recommendations to
4
<PAGE>
the shareholders. Because Floyd D. Gottwald, Jr., is a director and the
Chief Executive Officer of the Corporation and the Gottwalds are the
largest shareholders of the Corporation, the Gottwalds may be deemed to be
control persons of the Corporation and to have the capacity to control any
such recommendation of the Board of Directors.
(d) The NationsBank Corporation related entities are NationsBank N.A. (South),
NationsBank, N.A. and NationsBank of Texas, N.A. The information contained
herein with respect to NationsBank Corporation and the related entities
listed herein is based on a Schedule 13G filed by such entities with the
Securities and Exchange Commission. Such filing further stated that the
acquisition of such shares was in the ordinary course of business and not
in connection with or as a participant in any transaction having the
purpose or effect of changing or influencing the control of the
Corporation. The shares held by NationsBank Corporation and related
entities are held in fiduciary accounts.
(e) The information contained herein with respect to J.P. Morgan & Co.,
Incorporated is based on a Schedule 13G filed by such entity with the
Securities and Exchange Commission. Such filing further stated that the
acquisition of such shares was in the ordinary course of business and not
in connection with or as a participant in any transaction having the
purpose or effect of changing or influencing the control of the
Corporation.
The following table sets forth as of January 31, 1997, the beneficial
ownership of Albemarle Common Stock by all directors of the Corporation, the
Chief Executive Officer and the four next most highly compensated executive
officers and all directors and executive officers of the Corporation as a group.
Unless otherwise indicated, each person listed below has sole voting and
investment power over all shares beneficially owned by him or her.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES TOTAL
NAME OF BENEFICIAL OWNER WITH SOLE VOTING WITH SHARED VOTING NUMBER PERCENT
OR NUMBER OF PERSONS IN GROUP AND INVESTMENT POWER(1) AND INVESTMENT POWER OF SHARES OF CLASS(2)
- ----------------------------------------- ------------------------- -------------------- --------- -------------
<S> <C>
Craig R. Andersson 109 8,000 8,109
Thomas G. Avant 137,333 0 137,333
Dirk Betlem 60,194 0 60,194
E. Whitehead Elmore 263,160 0 263,160
Floyd D. Gottwald, Jr. 570,044 5,800,656(3) 6,370,700(2) 11.57%
John D. Gottwald 117,483 7,346,881 7,464,364(2)(4) 13.56%
Andre B. Lacy 15,812(5) 462,500 478,312
Seymour S. Preston, III 3,109 0 3,109
Emmett J. Rice 1,194 0 1,194
Charles B. Walker 207,421 0 207,421
Anne Marie Whittemore 8,810 2,940 11,750
Directors and executive
officers as a group (11 persons) 1,384,669 7,925,607 9,310,276 16.78%
</TABLE>
- ---------------
(1) The amounts in this column include shares of Albemarle Common Stock, with
respect to which certain persons have the right to acquire beneficial
ownership within 60 days of January 31, 1997, pursuant to the Corporation's
Omnibus Stock Incentive Plan: Mr. Avant: 121,764 shares; Mr. Betlem: 57,000
shares; Mr. Elmore: 103,878 shares; F.D. Gottwald, Jr.: 6,999 shares; Mr.
Walker: 156,940 shares; and directors and executive officers as a group:
446,581 shares.
(2) In accordance with the rules of the Securities and Exchange Commission some
shares are attributed to more than one member of the Gottwald families, but
are counted only once in the information provided for directors
5
<PAGE>
and executive officers as a group. Except as indicated, each person or group
owns less than 1% of Albemarle Corporation Common Stock.
(3) Mr. Gottwald disclaims beneficial ownership of 5,800,656 of such shares.
(4) Mr. Gottwald disclaims beneficial ownership of 7,346,881 of such shares.
This amount includes 1,593,050 shares of Albemarle Common Stock that Mr.
Gottwald may be deemed to own beneficially. Such shares constitute Mr.
Gottwald's interest as a discretionary beneficiary of a trust of which he is
a co-trustee.
(5) Mr. Lacy disclaims beneficial ownership of 14,741 of such shares.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table presents information relating to total compensation of
the Chief Executive Officer and the four next most highly compensated executive
officers of the Corporation for the period from January 1, 1996, through
December 31, 1996.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------------------------- -----------------------------
OTHER ANNUAL RESTRICTED
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK AWARDS OPTIONS/SARS
- --------------------------------- ----- ------------- -------- ------------ ------------ ------------
<S> <C>
Floyd D. Gottwald, Jr. 1996 $665,000(1) $ 0 -- -- 0
Chairman of the Board 1995 528,500 305,000 -- -- 0
and Executive Committee, 1994 420,833(2) 265,000 -- -- 31,808(3)
Chief Executive Officer
Dirk Betlem 1996 $437,090(5) $181,500 -- -- 143,000
President and Chief 1995 317,372 95,000 -- -- 0
Operating Officer 1994 270,651 70,000 -- -- 57,000
Charles B. Walker 1996 $239,200(1) $122,500 $488,128(7)(8) $554,880(7) 0
Vice Chairman of the 1995 231,533 245,000 -- -- 0
Board and Chief 1994 181,667(2) 118,000 -- -- 156,940(3)
Financial Officer
E. Whitehead Elmore 1996 $218,400(1) $ 50,000 $244,064(7)(8) $277,440(7) 0
Senior Vice President, 1995 211,400 100,000 -- -- 0
Secretary and General 1994 168,332(2) 70,000 -- -- 103,878(3)
Counsel
Thomas G. Avant 1996 $220,500 $ 59,000 -- -- 0
Senior Vice President 1995 212,000 62,000 -- -- 0
1994 167,667(2) 55,000 -- -- 127,764(3)
</TABLE>
ALL OTHER
NAME AND PRINCIPAL POSITION COMPENSATION
- --------------------------------- ------------
Floyd D. Gottwald, Jr. $ 4,356(4)
Chairman of the Board 26,425
and Executive Committee, 10,624
Chief Executive Officer
Dirk Betlem $ 12,658(6)
President and Chief 4,746
Operating Officer 0
Charles B. Walker $ 11,960(9)
Vice Chairman of the 11,577
Board and Chief 9,083
Financial Officer
E. Whitehead Elmore $ 10,990(10)
Senior Vice President, 10,260
Secretary and General 8,417
Counsel
Thomas G. Avant $ 11,025(11)
Senior Vice President 10,600
8,662
- ---------------
(1) Floyd D. Gottwald, Jr. (for two months), Charles B. Walker and E. Whitehead
Elmore also served as officers of Ethyl Corporation during 1996 and were
compensated separately by Ethyl Corporation for such services.
(2) Reflects salary for the ten months following the spin-off of the
Corporation from Ethyl Corporation.
(3) Certain of these options were granted in connection with the spin-off of
the Corporation from Ethyl Corporation to replace options previously
granted under Ethyl Corporation's Incentive Stock Option Plan.
(4) Mr. Gottwald participated in the savings plan and the excess benefit plan
of Ethyl Corporation until February 29, 1996. The amounts reflect the
amounts reimbursed to Ethyl Corporation by the Corporation for the
Corporation's allocable portion of his benefits under Ethyl Corporation's
excess benefit plan and savings plan.
(5) Mr. Betlem is compensated in Belgian francs. Each amount listed in U.S.
dollars is based on the exchange rate at December 31, 1996.
(6) Includes contributions to the Albemarle S.A. Savings Plan for 1996, 1995
and 1994, respectively. Each amount listed here in U.S. dollars is based on
the exchange rate at December 31, 1996.
6
<PAGE>
(7) On March 1, 1996, the Corporation sold its olefins business to Amoco
Chemical Company for approximately $500 million, with a gain on the sale of
$158.2 million ($94.4 million after income taxes). On the recommendation of
the Chairman and Chief Executive Officer, the Executive Compensation
Committee concluded that Messrs. Walker and Elmore had made special
contributions in effecting the successful disposition of the olefins
business and, accordingly, were entitled to special restricted stock awards
under the Corporation's Omnibus Stock Incentive Plan, which were granted on
May 6, 1996. The Committee also concluded that the amount of the awards
should be net of taxes and should be included in the calculations of
amounts payable under the Corporation's excess benefit plans. Restricted
shares are forfeitable if the award recipient's employment is terminated
except by reason of death, disability or a change of control. One half of
the shares become non-forfeitable on the first anniversary of the date of
the award and the balance become non-forfeitable on the second anniversary
of the date of the award. As of December 31, 1996, Mr. Walker held a total
of 23,120 shares of restricted stock with an aggregate value of $419,050
and Mr. Elmore held a total of 11,560 shares of restricted stock with an
aggregate value of $209,525. Dividends are paid on the shares of restricted
stock.
(8) Reflects tax reimbursement in connection with the restricted stock award
discussed in Note 7.
(9) Mr. Walker participates in the savings plan and the excess benefit plan of
Ethyl Corporation. The amounts reflect the amounts reimbursed to Ethyl
Corporation by the Corporation for the Corporation's allocable portion of
his benefits under Ethyl Corporation's excess benefit plan and savings
plan.
(10) Includes contributions to the Corporation's savings plan ($7,500, $7,500
and $5,250) and accruals in the Corporation's excess benefit plan ($3,490,
$2,760 and $3,167) for 1996, 1995 and 1994, respectively.
(11) Includes contributions to the Corporation's savings plan ($7,500, $7,500
and $6,162) and accruals in the Corporation's excess benefit plan ($3,525,
$3,100 and $2,500) for 1996, 1995 and 1994, respectively.
The following table presents information concerning stock options granted
during 1996 to the Chief Executive Officer and the four next most highly
compensated executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
Each of the following options relates to Albemarle Common Stock and does
not include a related stock appreciation right ("SAR").
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------------- VALUE AT ASSUMED
% OF ANNUAL RATES OF STOCK
TOTAL OPTIONS PRICE APPRECIATION FOR
GRANTED TO EXERCISE OPTION TERM
OPTIONS EMPLOYEES IN OR BASE EXPIRATION -------------------------
NAME GRANTED (#) FISCAL YEAR PRICE ($) DATE 5% ($) 10% ($)
- ----------------------- ----------- ------------- --------- ---------- ---------- ----------
<S> <C>
Floyd D. Gottwald, Jr. 0
Dirk Betlem 143,000(1) 48.81 $17.375 8/27/06 $1,562,829 $3,960,492
Charles B. Walker 0
E. Whitehead Elmore 0
Thomas G. Avant 0
</TABLE>
- ---------------
(1) These options become exercisable in 20% increments based on the attainment
of certain performance objectives. In addition, the options will become
exercisable for persons who are still employed by the Corporation thirty
days prior to the expiration date of the option or in the event of a change
in control.
7
<PAGE>
The following table presents information concerning stock options and SAR
exercises by the Chief Executive Officer and the four next most highly
compensated executive officers of the Corporation and fiscal year end option/SAR
values.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS/SARs
OPTIONS/SARS AT FY-END AT FY-END(3)
SHARES ACQUIRED VALUE ------------------------------ -----------------------------
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- --------------- ------------ ------------ ------------- ----------- -------------
<S> <C>
Floyd D. Gottwald, Jr. 7,863 $ 40,652 6,999(1) 0 $ 23,202 $ 0
Dirk Betlem 0 0 57,000(1) 143,000(2) 285,000 107,250
Charles B. Walker 0 0 156,940(1) 0 782,306 0
E. Whitehead Elmore 0 0 103,878(1) 0 540,353 0
Thomas G. Avant 6,000 58,882 121,764(1) 0 639,385 0
</TABLE>
- ---------------
(1) Each of these options relates to Albemarle Common Stock and includes a
tandem SAR.
(2) This option relates to Albemarle Common Stock and does not include a tandem
SAR.
(3) These values are based on $18.125, the closing price of Albemarle Common
Stock on The New York Stock Exchange on December 31, 1996.
RETIREMENT BENEFITS
The following table illustrates under the Corporation's pension plan for
salaried employees the estimated benefits upon retirement at age 65, determined
as of December 31, 1996, to persons with specified earnings and years of pension
benefit service. To the extent benefits payable at retirement exceed amounts
that may be payable under applicable provisions of the Internal Revenue Code of
1986, as amended (the "Code"), they will be paid under the Corporation's excess
benefit or supplemental retirement plans, as applicable. This table includes the
amounts that would be payable under such plans.
8
<PAGE>
PENSION PLAN TABLE*
<TABLE>
<CAPTION>
YEARS OF PENSION BENEFIT SERVICE AND ESTIMATED ANNUAL BENEFITS
--------------------------------------------------------------------------------------
FINAL-AVERAGE EARNINGS 10 15 20 25 30 35 40
---------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C>
$ 300,000 $ 43,895 $ 65,845 $ 87,790 $109,740 $131,690 $153,635 $175,585
350,000 51,395 77,095 102,790 128,490 154,190 179,885 205,585
400,000 58,895 88,345 117,790 147,240 176,690 206,135 235,585
450,000 66,395 99,595 132,790 165,990 199,190 232,385 265,585
500,000 73,895 110,845 147,790 184,740 221,690 258,635 295,585
550,000 81,395 122,095 162,790 203,490 244,190 284,885 325,585
600,000 88,895 133,345 177,790 222,240 266,690 311,135 355,585
650,000 96,395 144,595 192,790 240,990 289,190 337,385 385,585
700,000 103,895 155,845 207,790 259,740 311,690 363,635 415,585
750,000 111,395 167,095 222,790 278,490 334,190 389,885 445,585
800,000 118,895 178,345 237,790 297,240 356,690 416,135 475,585
850,000 126,395 189,595 252,790 315,990 379,190 442,385 505,585
900,000 133,895 200,845 267,790 334,740 401,690 468,635 535,585
950,000 141,395 212,095 282,790 353,490 424,190 494,885 565,585
1,000,000 148,895 223,345 297,790 372,240 446,690 521,135 595,585
</TABLE>
50
--------
$219,485
256,985
294,485
331,985
369,485
406,985
444,485
481,985
519,485
556,985
594,485
631,985
669,485
706,985
744,485
* Assumes attainment of age 65 in 1996 and Social Security Covered
Compensation of $27,576.
The benefit formula under the pension plans is based on the participant's
final-average earnings, which are defined as the average of the highest three
consecutive calendar years' earnings (base pay plus 50% of incentive bonuses
paid in any fiscal year) during the 10 consecutive calendar years immediately
preceding the date of determination. The years of pension benefit service for
certain of the executive officers named in the above compensation table as of
December 31, 1996, are: Thomas G. Avant, 26; and E. Whitehead Elmore, 27.
Benefits under the pension plans are computed on the basis of a life annuity
with 60 months guaranteed payments. The benefits listed in the above
compensation table are not subject to deduction for Social Security or other
offset payments. Pension benefits payable to Messrs. Gottwald and Walker will be
paid from the pension plan of Ethyl Corporation.
Dirk Betlem currently is covered by the Albemarle S.A. Pension Plan
(Belgium), which provides for a lump sum payment at age 65 equal to years of
service times the sum of 4% of final average pay up to covered compensation plus
17.5% of the excess of final average pay over covered compensation. This amount
is multiplied by 1.20 for married individuals. Mr. Betlem's accrued benefit as
of December 31, 1996, determined as an annual benefit payable at age 65, is
$16,079. Such amount is determined in Belgian francs. The amount shown in U.S.
dollars is based on the exchange rate at December 31, 1996.
EXCESS BENEFIT PLANS
The Corporation maintains excess benefit plans in the form of non-qualified
pension plans (the "Excess Plans") that provide eligible individuals the
difference between the benefits they actually accrue under the qualified
employee pension and savings plans of the Corporation and the benefits they
would have accrued under such plans, but for the maximum benefit and annual
addition limitations and the limitation on compensation that may be recognized
thereunder, under the Code. Certain key employees may be granted additional
pension service benefits equal to 4% of final pay for each year of service to
the Corporation up to fifteen years, net of certain other benefits received from
the Corporation, previous employers and Social Security. These benefits have
been granted to Mr. Walker. All benefits under the Excess Plans vest upon a
Change in Control of the Corporation, as defined in the Plans.
9
<PAGE>
COMPENSATION OF DIRECTORS
Outside directors are paid (i) $1,000 for attendance at each Board meeting
and (ii) $600 for attendance at each meeting of a committee of the Board of
which he was a member. In addition, each such director is paid a quarterly fee
of $5,000. Employee members of the Board of Directors are not paid separately
for their service on the Board or its committees.
Any director retiring from the Board after age 60 with at least five years'
service on the Board will receive $12,000 per year for life, payable in
quarterly installments. The service requirement for this benefit may be waived
in certain circumstances. Any director retiring under other circumstances will
receive $12,000 per year, payable in quarterly installments, commencing no
earlier than age 60, for a period not to exceed his years of service on the
Board. The payment period limitation on this benefit may be waived in certain
circumstances. Such retirement payments to former directors may not commence and
may be discontinued under certain circumstances.
On each July 1, the Corporation awards to each non-employee director that
number of whole shares of Albemarle Common Stock when multiplied by the closing
price of Albemarle Common Stock on the immediately preceding business day, as
reported in THE WALL STREET JOURNAL, as shall as nearly as possible equal but
not exceed $2,000. The shares of Albemarle Common Stock awarded under the
Directors' Stock Plan are nonforfeitable and the recipient directors immediately
and fully vest in Albemarle Common Stock issued under the plan. Subject only to
such limitations on transfer as may be specified by applicable securities laws,
directors may sell the shares received under the Directors' Stock Plan at any
time. The Directors' Stock Plan provides that no awards may be made after July
1, 2004.
Non-employee Directors may defer, in ten percent increments, all or part of
their retainer fee and meeting fees into either a deferred cash account or a
deferred stock account, or a percentage of the fees into each of the accounts,
both of which are unfunded and maintained for record-keeping purposes only.
Distributions under the Deferred Compensation Plan, paid in a single sum or in
up to ten annual installments, cannot begin within two years of the beginning of
the deferral year. The maximum aggregate number of shares of Albemarle Common
Stock that may be issued under the Deferred Compensation Plan is 100,000 shares.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive Compensation Committee of the Corporation's Board of
Directors consisted of Messrs. William W. Berry, Joseph C. Carter, Jr., and
Emmett J. Rice (Chairman), until March 1, 1996, when the Board of Directors was
restructured. At that time, Mr. Andersson and Mrs. Whittemore replaced Messrs.
Berry and Carter on the Committee. Mr. Carter is a Senior Counsel in Hunton &
Williams, which firm regularly acts as counsel to the Corporation.
10
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Committee is delegated the power to administer the compensation program
of the Corporation applicable to its executive officers. Accordingly, the
Committee submits this report on executive compensation to the shareholders.
OVERALL OBJECTIVES
The objectives of the Corporation's executive compensation program are to:
o Provide balanced, competitive total compensation that will enable the
Corporation to attract, motivate and retain highly qualified
executives.
o Provide incentives for enhancing the profitability of the Corporation
by rewarding executives for meeting individual and corporate goals.
o Align the financial interests of the executives closely to those of the
shareholders by strongly encouraging executive ownership of Albemarle
Common Stock.
ELEMENTS OF THE PROGRAM
The Committee believes the interests of the shareholders will be best
served if the compensation program consists of cash compensation and equity
ownership with an increasing portion of compensation being at risk depending
upon performance. The program includes: base salary, annual bonuses in cash or
cash and stock, and grants of stock options with or without SARs and restricted
stock. The Committee considers all elements of the program when setting
appropriate compensation.
The Corporation seeks to maintain its executive compensation packages
around the mid-range of those offered generally in the job markets in which the
Corporation competes for talent and experience. The Corporation's stock option
and restricted stock program is administered to recognize outstanding
performance that consequently drives shareholder value.
In December 1996, the Committee met with each of the executive officers to
review the executive's 1996 goals and the extent to which the goals had been
achieved. The Committee also will review 1997 corporate and executive
initiatives to establish 1997 goals.
COMPETITIVE MARKET
The Committee uses compensation surveys provided by compensation
consultants in determining the market rates for executive pay. The surveys
include companies that are larger and smaller than the Corporation. Some are
limited to companies in the chemical business, including, but not limited to,
some of the companies included in the S&P Chemical Composite shown in the
Performance Graph. References to the "market" in this Report refer to these
survey data.
11
<PAGE>
BASE SALARIES
Base salaries are based on evaluations of positions and duties of each
executive, market data for the position and internal equities among the
positions. The Committee considers each of the individual factors but does not
assign a specific value to each factor, and a subjective element is acknowledged
in evaluating each executive's overall span of responsibility and control.
Salaries for some executive officers for 1997 are being maintained at
current levels to reflect the increased emphasis on more compensation being tied
to the long-term performance of the Corporation. Total compensation for
executive officers is thought to be in line with the market as described above.
ANNUAL BONUSES
The purpose of the annual bonus plan is to provide a means that recognizes
excellence in performance measured against individual, division, department and
corporate objectives and increases in shareholder value. The Committee, in its
discretion, may award bonuses annually to management-level employees.
Annual bonus awards are reviewed by the Committee in conjunction with
senior management, and are based on evaluation of the performance, level of
responsibility and leadership of the individual executive in relation to overall
corporate results. The Committee does not assign a specific value to each
factor. Overall awards for 1996 generally were down substantially from 1995.
STOCK OPTIONS AND RESTRICTED STOCK
Under the Corporation's Omnibus Stock Incentive Plan approved by the
shareholders, the Committee, in its discretion, may grant options to purchase
shares of Albemarle Common Stock (with or without related SARs) and restricted
stock to any executive of the Corporation or any subsidiary who has contributed
or can be expected to contribute to the Corporation's profits or growth. The
Committee determines the amount of the grant, the term of the options and the
requisite conditions for exercise and the terms of the restricted stock.
During 1996, the Committee granted to three officers options (without
related SARs) to purchase an aggregate of 293,000 shares of Albemarle Common
Stock. The options vest when either earnings or stock price targets are met. The
option awards have an exercise price equal to fair market value at the date of
grant and a ten-year exercise period. They become exercisable as set forth in
footnote 1 on page 7. For a discussion of restricted stock awards granted in
1996, see footnote 7 on Page 7.
CEO COMPENSATION
Mr. Floyd D. Gottwald, Jr., the Chief Executive Officer of the Corporation,
received a base salary for 1996 of $665,000. Mr. Gottwald asked not to be
considered for a bonus for 1996, placing a greater emphasis on creating
shareholder value to which he is committed. Consequently, his annual
compensation for 1996 was $168,000 less than 1995. The Committee believes that
Mr. Gottwald has taken significant steps, including the successful disposition
of the olefins business, to position the Corporation for the future. The
Committee also recognizes that, as a major shareholder, the Chief Executive
Officer's focus is on maximizing long-term value for the Corporation's
shareholders.
SECTION 162(M)
Section 162(m) of the Code provides certain criteria for the tax
deductibility of compensation in excess of $1 million paid to the Corporation's
executive officers. To meet the criteria applicable to performance-based
compensation (as defined in Section 162(m) of the Code), certain of the
Corporation's benefit plans would have
12
<PAGE>
to be amended to limit the Committee's discretion to determine individual awards
based on individual performance factors and other factors as the Committee may
determine, from time to time, to be relevant.
The Committee believes that the flexibility on awards is an important
feature of the plans and one that serves the best interests of the Corporation
by allowing the Committee to recognize and motivate individual executive
officers as circumstances warrant. Further, the Committee does not anticipate
that there will be a significant amount of compensation subject to loss of tax
deductibility. Consequently, the Committee does not propose at the present time
to amend any plan to comply with the performance-based criteria.
THE EXECUTIVE COMPENSATION COMMITTEE
Emmett J. Rice, Chairman
Craig R. Andersson
Anne Marie Whittemore
February 26, 1997
13
<PAGE>
PERFORMANCE GRAPH
Cumulative Total Shareholder Return*
Performance From March 1, 1994, through December 31, 1996
[GRAPH GOES HERE]
March 31, 1994 Dec. 31, 1994 Dec. 31, 1995 Dec. 31, 1996
Albemarle $100 $106 $150 $142
S&P 500 $100 $101 $139 $171
S&P Chem Composite $100 $103 $135 $167
*ASSUMES $100 INVESTED ON FIRST DAY OF MARCH 1994. DIVIDENDS ARE REINVESTED
QUARTERLY.
DESIGNATION OF AUDITORS
The Board of Directors has designated Coopers & Lybrand L.L.P., certified
public accountants, as the Corporation's independent auditors for fiscal year
1997, subject to shareholder approval. A representative of Coopers & Lybrand
L.L.P. is expected to be present at the annual meeting with an opportunity to
make a statement and to be available to respond to appropriate questions.
Coopers & Lybrand L.L.P.'s principal function is to audit the consolidated
financial statements of the Corporation and its subsidiaries and, in connection
with that audit, to review certain related filings with the Securities and
Exchange Commission and to conduct limited reviews of the financial statements
included in the Corporation's quarterly reports.
14
<PAGE>
FINANCIAL STATEMENTS
A copy of the Corporation's Annual Report on Form 10-K for the year 1996,
as required to be filed with the Securities and Exchange Commission, will be
provided on written request without charge to any shareholder whose proxy is
being solicited by the Board of Directors. The written request should be
directed to:
E. Whitehead Elmore, Esq.
Senior Vice President, Secretary and General Counsel
Albemarle Corporation
330 South Fourth Street
P.O. Box 1335
Richmond, Virginia 23210
PROPOSALS FOR 1998 ANNUAL MEETING
Under the regulations of the Securities and Exchange Commission, any
shareholder desiring to make a proposal to be acted upon at the 1998 annual
meeting of shareholders must present such proposal to the Corporation at its
principal office in Richmond, Virginia, not later than November 24, 1997, in
order for the proposal to be considered for inclusion in the Corporation's proxy
statement. The Corporation anticipates holding the 1998 annual meeting on April
22, 1998.
The Corporation's bylaws provide that, in addition to any other applicable
requirements, for business to be properly brought before the annual meeting by a
shareholder, the shareholder must give timely notice in writing to the Secretary
of the Corporation not later than 60 days prior to the meeting. As to each
matter, the notice should contain (i) a brief description of the matter and the
reasons for addressing it at the annual meeting, (ii) the name, record address
of and number of shares beneficially owned by the shareholder proposing such
business and (iii) any material interest of the shareholder in such business.
OTHER MATTERS
The Board of Directors is not aware of any matters to be presented for
action at the meeting other than as set forth herein. However, if any other
matters properly come before the meeting, or any adjournment thereof, the person
or persons voting the proxies will vote them in accordance with their best
judgment.
By Order of the Board of Directors
E. WHITEHEAD ELMORE, SECRETARY
15
<PAGE>
NOTICE
and
PROXY STATEMENT
for
ANNUAL MEETING
of
SHAREHOLDERS
April 23, 1997
[LOGO]
ALBEMARLE CORPORATION
330 SOUTH FOURTH STREET
P.O. BOX 1335
RICHMOND, VIRGINIA 23210
<PAGE>
PROXY ALBEMARLE CORPORATION
RICHMOND, VIRGINIA
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 23, 1997
The undersigned hereby appoints Floyd D. Gottwald, Jr., and Emmett J. Rice,
or either of them, with full power of substitution in each, proxies to vote all
shares of the undersigned in Albemarle Corporation, at the annual meeting of
shareholders to be held April 23, 1997, and at any and all adjournments thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WHEN
PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL NOMINEES AND FOR PROPOSAL 2.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
<PAGE>
ALBEMARLE CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ALL NOMINEES AND FOR
PROPOSAL 2.
1. ELECTION OF DIRECTORS:
[ ] For All [ ] Withhold All [ ] For All Except
Nominees: Craig R. Andersson, Dirk Betlem, Floyd D. Gottwald, Jr., John D.
Gottwald, Andre B. Lacy, Seymour S. Preston, III, Emmett J. Rice,
Charles B. Walker and Anne Marie Whittemore.
INSTRUCTION: To withhold authority to vote FOR any such nominee(s), write the
name(s) of the nominee(s) in the space provided below.
- --------------------------------------------------------------------------------
2. The proposal to approve the appointment of Coopers & Lybrand L.L.P. as
the auditors for the Corporation for 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business and matters incident to the conduct of the meeting as may
properly come before the meeting.
Dated _____________________, 1997
--------------------------------------
Signature
Please sign name exactly as it appears
on the stock certificate. Only one of
several joint owners or co-owners need
sign. Fiduciaries should give full
title.
