<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 the 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
ALBEMARLE CORPORATION
330 SOUTH FOURTH STREET
P.O. BOX 1335
RICHMOND, VIRGINIA 23210
[ALBEMARLE CORP. LOGO]
Annual Meeting of Shareholders
March 22, 2000
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 26, 2000, 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, $.01 par value ("Albemarle 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 26, 2000, 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
PricewaterhouseCoopers LLP as auditors for the fiscal year ending
December 31, 2000 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 1, 2000, 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 22, 2000
<PAGE>
PROXY STATEMENT
for
ANNUAL MEETING OF SHAREHOLDERS
ALBEMARLE CORPORATION
To be held April 26, 2000
Approximate date of mailing--March 22, 2000
Proxies in the form enclosed are solicited by the Board of Directors for
the Annual Meeting of Shareholders to be held on Wednesday, April 26, 2000.
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 1, 2000, the date for determining shareholders entitled to vote at
the meeting, there were outstanding 46,027,427 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). Each of the nominees presently is
serving as a director. The Board of Directors has no reason to believe that
any of the nominees will be unavailable.
Craig R. Andersson; age 62; director since 1996; part-time consultant, having
served as Vice Chairman of Aristech Chemical Corporation (a commodity and
specialty chemicals and plastics business) from January 1, 1994, until
April 30, 1995, and President and Chief Operating Officer of Aristech
Chemical Corporation prior thereto. Other directorship: RMI International
Metals, Inc.
Floyd D. Gottwald, Jr.; age 77; 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
1
<PAGE>
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
Corporation.
John D. Gottwald; age 45; director since 1994; President and Chief Executive
Officer of Tredegar Corporation (manufacturer of plastics and metal
products with interests in drug discovery and other emerging technologies).
Other directorship: Tredegar Corporation.
William M. Gottwald; age 52; director since 1999; Vice President, Corporate
Strategy, of the Corporation since August 1996, having served previously as
Senior Vice President of Ethyl Corporation (developer and manufacturer of
petroleum additives products) from September 1994 until August 1996, and as
President of Whitby, Inc. (pharmaceuticals company) from September 1989
until September 1994. Other directorship: Tredegar Corporation.
Seymour S. Preston III; age 66; director since 1996; Chairman of the Board and
Chief Executive Officer of AAC Engineered Systems, Inc. (manufacturer of
centrifugal, deburring and finishing machinery) since 1994. Other
directorship: Tufco Technologies Inc.
Emmett J. Rice; age 80; director since 1994; retired member of the Board of
Governors of the Federal Reserve System. Other directorship: Tredegar
Corporation.
Charles E. Stewart; age 64; director since September 1, 1997; part-time
consultant, having been a partner of BTC Partners Inc. (investment and
acquisitions consultants) from June 1997 to June 1999, Chairman and Chief
Executive Officer of OCI Enterprises Inc. and OCI Chemical Corp. from
October 1995 to December 1996, and as Executive Vice President of
Occidental Chemical Corporation and Vice President of Occidental Petroleum
Corporation from September 1986 to June 1995.
Charles B. Walker; age 61; 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, Chief Financial Officer and Treasurer of Ethyl
Corporation prior to March 1, 1994. Mr. Walker continued to serve as Vice
Chairman of the Board and Chief Financial Officer of Ethyl Corporation from
March 1, 1994, to September 30, 1997, and as Vice Chairman of the Board of
Ethyl Corporation from October 1, 1997, to January 31, 1998. Other
directorships: Ethyl Corporation and Nations Fund Trust/Nations Fund, Inc.
Anne Marie Whittemore; age 54; director since 1996; Partner of McGuire, Woods,
Battle & Boothe, L.L.P. (law firm). Other directorships: Owens & Minor,
Inc., Fort James Corporation and T. Rowe Price Associates, Inc.
In connection with the annual meeting, Mr. Rice indicated to the Board of
Directors his desire to relinquish his position as a director and not stand
for reelection. The Board, however, prevailed upon Mr. Rice to serve one more
year based upon his valuable contributions as a Board member.
In 1999, each of the nominees 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. Eight meetings of the Corporation's Board of Directors were held
during 1999.
The Corporation's executive committee currently consists of Messrs. Floyd
D. Gottwald, Jr., Walker and William M. Gottwald. 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 1999, the executive
committee
2
<PAGE>
met on 11 occasions as the executive committee of the Board of Directors and
on 12 occasions as the principal management committee.
Messrs. Rice, Stewart and Mrs. Whittemore currently serve on the
Corporation's audit committee. During 1999, the audit committee met on four
occasions. 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.
The nominating committee currently consists of Messrs. Floyd D. Gottwald,
Jr., Rice and Mrs. Whittemore. During 1999, the nominating committee met once.
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. Andersson, Preston, Rice and Mrs. Whittemore currently serve as the
Corporation's executive compensation committee. During 1999, the executive
compensation committee met on four 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 stock options, stock appreciation rights ("SARs"),
performance shares, restricted stock and incentive awards under the
Corporation's 1998 Incentive Plan (the "1998 Plan").
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
William M. Gottwald, MD, a director and a Vice President of the
Corporation, and John D. Gottwald, a director of the Corporation, are sons of
Floyd D. Gottwald, Jr. The members of the family of Floyd D. Gottwald, Jr. may
be deemed to be control persons of the Corporation. Mr. Stewart, a director of
the Corporation, entered into a one-year mutually-renewable consulting
contract with the Corporation on September 1, 1997, that was renewed on
September 1, 1998, and again on September 1, 1999, for $150,000 per year.
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
substantial compliance with all filing requirements applicable to its
officers, directors and beneficial owners of greater than 10% of the Albemarle
Common Stock, except that Floyd D. Gottwald, Jr. was late in reporting an
option grant.
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, 1999, of more than 5%
of the outstanding voting shares of the Corporation.
<TABLE>
<CAPTION>
Percent
Title of Name and Address of Number of of
Class Beneficial Owners Shares Class
-------- ------------------- --------- -------
<S> <C> <C> <C>
Common Stock Floyd D. Gottwald, Jr. and Bruce C. Gottwald (a) 18,281,510(b)(c) 39.52%
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23218
Shapiro Capital Management Company, Inc. and 2,754,267 5.96%
Samuel R. Shapiro (d)
3060 Peachtree Road, N.W.
Atlanta, Georgia 30305
</TABLE>
- --------
(a) Floyd D. Gottwald, Jr. and Bruce C. Gottwald, who are brothers, may be
deemed to be a "group" for purposes of Section 13(d)(3) of the Exchange
Act, although there is no arrangement between them with respect to the
acquisition, retention, disposition or voting of Albemarle Common Stock.
(b) As of December 31, 1999, Floyd D. Gottwald, Jr. and Bruce C. Gottwald had
sole voting and investment power over all of the shares disclosed except
14,085,195 shares held by their wives, adult sons and in certain trust
relationships as to which they disclaim beneficial ownership. This amount
includes an aggregate of 2,222,786 shares of Albemarle Common Stock
beneficially owned by the adult sons of Floyd D. Gottwald, Jr. and an
aggregate of 2,325,380 shares of Albemarle Common Stock beneficially owned
by the adult sons of Bruce C. Gottwald. Floyd D. Gottwald, Jr., Bruce C.
Gottwald and their adult sons have no agreement with respect to the
acquisition, retention, disposition or voting of Albemarle Common Stock.
(c) This amount includes any shares owned of record by the Trustee of the
Corporation's savings plan for the benefit of William M. Gottwald, MD.
This amount does not include shares held by the Trustee of such plan 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 the shareholders. Because Floyd D. Gottwald,
Jr. is a director and the Chief Executive Officer of the Corporation, he
and the members of his family 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 information contained herein with respect to Shapiro Capital
Management Company, Inc. and Samuel R. Shapiro is based on a Schedule 13G
filed by such parties 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.
4
<PAGE>
The following table sets forth as of January 31, 2000, the beneficial
ownership of Albemarle Common Stock by all directors of the Corporation, the
Chief Executive Officer and the four other executive officers who were serving
in such capacity as of December 31, 1999, and all directors and executive
officers of the Corporation as a group.
<TABLE>
<CAPTION>
Number of Shares Number of Shares Total Percent
Name of Beneficial Owner with Sole Voting and with Shared Voting Number of
or Number of Persons in Group Investment Power/1/ and Investment Power of Shares Class/2/
- ----------------------------- -------------------- -------------------- --------- --------
<S> <C> <C> <C> <C>
Craig R. Andersson 1,280 10,000 11,280
Dirk Betlem 154,011 21,483 175,494
E. Whitehead Elmore 274,109 -- 274,109
Floyd D. Gottwald, Jr. 1,052,169 5,913,449/3/ 6,965,618 15.06%
John D. Gottwald 123,464 1,653,415/4/ 1,776,879 3.84%
William M. Gottwald 336,853 1,622,397/5/ 1,959,250 4.23%
Seymour S. Preston III 10,980 -- 10,980
Emmett J. Rice 2,865 -- 2,865
Mark C. Rohr 4,287 -- 4,287
Charles E. Stewart 6,182 -- 6,182
Charles B. Walker 230,581 -- 230,581
Anne Marie Whittemore 1,799 11,636 13,435
Directors and
executive officers as a
group (12 persons) 2,198,580 7,639,330 9,837,910 21.10%
</TABLE>
- --------
/1/The amounts in this column include shares of Albemarle Common Stock with
respect to which certain persons had the right to acquire beneficial
ownership within 60 days of January 31, 2000: Mr. Betlem: 142,800 shares;
Mr. Elmore: 73,000 shares; Mr. Walker: 156,940 shares; and directors and
executive officers as a group: 372,740 shares.
/2/Except as indicated, each person owns less than 1% of Albemarle Common
Stock.
/3/Mr. Floyd D. Gottwald, Jr. disclaims beneficial ownership of all 5,913,449
of such shares.
/4/Mr. John D. Gottwald disclaims beneficial ownership of all 1,653,415 of
such shares. This amount includes 1,593,050 shares of Albemarle Common
Stock that Mr. John D. Gottwald may be deemed to own beneficially. Such
shares constitute his interest as beneficiary of a trust of which he is a
co-trustee.
/5/Mr. William M. Gottwald disclaims beneficial ownership of all 1,622,397 of
such shares. This amount includes 1,593,050 shares of Albemarle Common
Stock that Mr. William M. Gottwald may be deemed to own beneficially. Such
shares constitute his interest as beneficiary of a trust of which he is a
co-trustee.
5
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table presents information relating to total compensation of
the Chief Executive Officer and the other four executive officers of the
Corporation for the period from January 1, 1999, through December 31, 1999.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
-------------------------------------- ---------------------------
Name and Principal Other Annual Awards Payouts All Other
Position Year Salary Bonus Compensation Options/SARs LTIP Payouts Compensation
------------------ ---- -------- -------- ------------ -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Floyd D. Gottwald, Jr. 1999 $450,000 $ 74,500 -- 25,000 $172,125/1/ $ 0
Chairman of the Board 1998 450,000 193,700 -- 35,000 -- 0
and Executive 1997 503,750 0 -- 0 -- 0
Committee, Chief
Executive Officer
Dirk Betlem 1999 $550,000 $ 91,000 $365,822/4/ 25,000 $129,094/1/ $27,500/5/
President and Chief 1998 550,000 236,700 381,263 30,000 -- 38,787
Operating Officer/2/ 1997 504,324/3/ 268,000 388,263 0 -- 32,026
Charles B. Walker 1999 $478,000 $ 79,000 -- 25,000 $129,094/1/ $ 0
Vice Chairman of the 1998 478,400/6/ 206,000/6/ -- 80,000 -- 0/7/
Board and Chief 1997 299,000 233,000 -- 0 -- 4,950
Financial Officer
E. Whitehead Elmore 1999 $323,200 $ 42,800 -- 15,000 $ 34,425/1/ $16,160/9/
Senior Vice President, 1998 323,200 111,000 -- 20,000 -- 16,160
Secretary and General 1997 218,400/8/ 100,000/8/ -- 0 -- 11,185
Counsel
Mark C. Rohr 1999 $214,714/10/ $ 90,000/11/ $151,663/12/ 125,000 $ 64,547/1/ $ 2,929/13/
Executive Vice- 1998 -- -- -- -- -- --
President--Operations 1997 -- -- -- -- -- --
</TABLE>
- --------
/1/Reflects the value of the restricted stock as of February 22, 2000, the
date of approval by the Board, awarded at the end of the two-year
performance period for performance shares granted under the 1998 Plan.
/2/Mr. Betlem retired effective December 31, 1999. Effective January 1, 2000,
Mr. Betlem became a consultant on international affairs.
/3/Until May 15, 1997, Mr. Betlem was compensated in Belgian francs. Each
amount listed for 1997 prior to May 15, 1997, in U.S. dollars is based on
the exchange rate at May 15, 1997.
/4/Includes payments for expatriate expenses and allowances ($125,000,
$171,872 and $78,125), tax subsidies ($179,858, $165,037 and $197,566) and
a housing and relocation allowance ($60,964, $44,354 and $38,717) for 1999,
1998 and 1997, respectively.
/5/Includes contributions to the Corporation's savings plan ($8,000, $8,000
and $8,000) and accruals in the Corporation's excess benefit plan ($19,500,
$30,787 and $9,724) for 1999, 1998 and 1997, respectively, and
contributions to the Albemarle S.A. Savings Plan of $14,302 for 1997. Each
amount listed for 1997 prior to May 15, 1997, in U.S. dollars is based on
the exchange rate at May 15, 1997.
/6/Mr. Walker also served as an officer of Ethyl Corporation ("Ethyl") until
his retirement from Ethyl on February 1, 1998, and was compensated
separately by Ethyl for such services.
/7/Mr. Walker participated in the savings plan and the excess benefit savings
plan of Ethyl during one month of 1998 and in 1997. The amounts reflect the
amounts reimbursed to Ethyl by the Corporation for the Corporation's
allocable portion of these benefits.
/8/Mr. Elmore also served as an officer of Ethyl until January 1, 1998, and
was compensated separately by Ethyl for such services.
6
<PAGE>
/9/Includes contributions to the Corporation's savings plan ($8,000, $8,000
and $8,000) and accruals in the Corporation's excess benefit plan ($8,160,
$8,160 and $3,185) for 1999, 1998 and 1997, respectively.
/10/Mr. Rohr joined the Corporation effective March 22, 1999. Effective
January 1, 2000, Mr. Rohr succeeded Mr. Betlem as the President and Chief
Operating Officer of the Corporation.
/11/Pursuant to the terms of Mr. Rohr's employment, he was guaranteed a
minimum bonus of $90,000 for 1999.
/12/Includes reimbursement for taxes incurred resulting from the roll-over of
Mr. Rohr's deferred compensation from his former employer in the amount of
$65,775 and a $58,780 relocation allowance received pursuant to the terms
of his employment.
/13/Reflects contributions to the Corporation's savings plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Each of the following options relates to Albemarle Common Stock and does
not include a related SAR.
<TABLE>
<CAPTION>
Potential Realizable
Value At Assumed
Annual Rates of Stock
Price Appreciation
For
Individual Grants Option Term
----------------------------------------- ---------------------
% of
Total Options Exercise
Options Granted to or Base
Granted Employees in Price Expiration
Name (#)/1/ Fiscal Year ($) Date 5% ($) 10% ($)
---- ------- ------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Floyd D. Gottwald, Jr. 25,000 6.4% $20.00 6/22/06 $ 203,550 $ 474,359
Dirk Betlem 25,000 6.4% $20.00 6/22/06 203,550 474,359
Charles B. Walker 25,000 6.4% $20.00 6/22/06 203,550 474,359
E. Whitehead Elmore 15,000 3.9% $20.00 6/22/06 122,230 284,615
Mark C. Rohr 25,000 6.4% $20.00 6/22/06 203,550 474,359
100,000 25.7% $25.75 6/22/06 1,048,284 2,442,947
</TABLE>
- --------
/1/Vest upon an increase in share price, with a maximum of 25% becoming
exercisable in any single year, and in any event becoming exercisable on
the sixth anniversary of the date of grant.
7
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table presents information concerning stock options and SAR
exercises by the Chief Executive Officer and the four other executive officers
of the Corporation who were serving in such capacity as of December 31, 1999,
and fiscal year end option/SAR values.
<TABLE>
<CAPTION>
Value of Unexercised
Number of In-The-Money
Shares Unexercised Options/SARs Options/SARs at FY-End
Acquired On at FY-End (#) ($)/4/
Exercise Value ------------------------ ----------------------
Name (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Floyd D. Gottwald, Jr. -- -- 0 60,000 $ 0 $ 0
Dirk Betlem -- -- 142,800/1/ 112,200/2/ 501,075 103,675
Charles B. Walker -- -- 156,940/3/ 105,000/2/ 949,054 0
E. Whitehead Elmore 11,940 $52,858 73,000/3/ 35,000/2/ 442,563 0
Mark C. Rohr -- -- 0 125,000 0 0
</TABLE>
- --------
/1/57,000 of these options relate to Albemarle Common Stock and include a
tandem SAR; 85,800 of these options relate to Albemarle Common Stock and do
not include a tandem SAR.
/2/Each of these options relates to Albemarle Common Stock and does not
include a tandem SAR.
/3/Each of these options relates to Albemarle Common Stock and includes a
tandem SAR.
/4/These values are based on $19.1875, the closing price of Albemarle Common
Stock on the New York Stock Exchange on December 31, 1999.
LONG-TERM INCENTIVE PLAN--AWARDS IN LAST FISCAL YEAR
The following table presents information concerning performance share
grants made under the 1998 Plan during 1999 to the Chief Executive Officer and
the four other executive officers of the Corporation who were serving in such
capacity as of December 31, 1999.
<TABLE>
<CAPTION>
Estimated Future Payouts
Under Non-Stock Price-
Based Plans/1/
Number of Performance Or --------------------------
Shares, Units Other Period Until Maximum
Or Other Maturation Threshold Target ($ or
Name Rights (#) Or Payout ($ or #) ($ or #) #)
---- ------------- ------------------ --------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Mark C. Rohr 7,500 December 31, 1999/2/ N/A 7,500 15,000
6,000 December 31, 2001 N/A 6,000 12,000
</TABLE>
- --------
/1/At the end of the performance period for the performance shares, the
executive officer will be entitled to receive that number of shares of
restricted stock ranging from 0% to 200% of the number of performance
shares based upon the Corporation's return on gross assets and increase in
operating income for the performance period.
/2/Effective January 1, 2000, Mr. Rohr received 4,050 shares pursuant to the
terms of this award, the value of which is set forth in the Compensation of
Executive Officers table on page 6.
8
<PAGE>
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, 1999, 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.
Pension Plan Table*
<TABLE>
<CAPTION>
Final Years of Pension Benefit Service and Estimated Annual Benefits
Average -----------------------------------------------------------------------
Earnings 10 15 20 25 30 35 40 50
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 300,000 $ 43,678 $ 65,516 $ 87,355 $108,194 $131,033 $152,872 $174,710 $218,388
350,000 51,178 76,766 102,355 127,944 153,533 179,122 204,710 255,888
400,000 58,678 88,016 117,355 146,694 176,033 205,372 234,710 293,388
450,000 66,178 99,266 132,355 165,444 198,533 231,622 264,710 330,888
500,000 73,678 110,516 147,355 184,194 221,033 257,872 294,710 368,388
550,000 81,178 121,766 162,355 202,944 243,533 284,122 324,710 405,888
600,000 88,678 133,016 177,355 221,694 266,033 310,372 354,710 443,388
650,000 96,178 144,266 192,355 240,444 288,533 336,622 384,710 480,888
700,000 103,678 155,516 207,355 258,194 311,033 362,872 414,710 518,388
750,000 111,178 166,766 222,355 277,944 333,533 389,122 444,710 555,888
800,000 118,678 178,016 237,355 298,694 356,033 415,372 474,710 593,388
850,000 126,178 189,266 252,355 315,444 378,533 441,622 504,710 630,888
900,000 133,678 200,516 267,355 334,194 401,033 467,872 534,710 666,388
950,000 141,178 211,766 282,355 352,944 423,533 494,122 564,710 705,888
1,000,000 148,678 223,016 297,355 371,694 446,033 520,372 594,710 743,388
</TABLE>
- --------
*Assumes attainment of age 65 in 1999 and Social Security Covered Compensation
of $33,060.
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 ten consecutive calendar years immediately
preceding the date of determination. The 23,120 shares and 11,560 shares of
restricted stock awarded to Mr. Walker and Mr. Elmore, respectively, in
connection with the sale of the Corporation's olefins business in 1996 plus
the amount of the taxes paid by the Corporation on behalf of the officers
pursuant to the award also will be included in the calculations of amounts
payable under excess benefit plans covering these officers. The years of
pension benefit service for certain of the executive officers named in the
above compensation table as of December 31, 1999, are: E. Whitehead Elmore,
30; Dirk Betlem, 3; and Mark C. Rohr, 1. 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 are paid from the pension plan of
Ethyl.
Mr. Betlem also is entitled to a benefit from the Albemarle S.A. Pension
Plan (Belgium) for his service with Albemarle S.A. through April 30, 1997,
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
9
<PAGE>
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, 1999,
determined as an annual benefit payable at age 65, is $15,479. Such amount is
determined in Belgian francs. The amount shown in U.S. dollars is based on the
exchange rate at December 31, 1999.
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 the employee's average pay over his
last three years multiplied by the number of years of service to the
Corporation (including service with Ethyl) up to 15 years, net of certain
other benefits received from the Corporation, previous employers, including
Ethyl, and Social Security. These benefits have been granted to Mr. Rohr. All
benefits under the Excess Plans vest upon a Change in Control of the
Corporation, as defined in the Excess Plans.
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 or she was a member. In addition, each such director, effective
January 1, 2000, is paid a quarterly fee of $5,500. Employee members of the
Board of Directors are not paid separately for service on the Board or its
committees.
Any current director retiring from the Board after age 60 with at least
five years' service on the Board and who is not employed by the Corporation
will receive $12,000 per year for life, payable in quarterly installments. The
service and age at retirement requirements for this benefit may be waived in
certain circumstances with the commencement of the benefit no earlier than age
60. 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. The Retirement Policy for Directors
has been amended to exclude from participation in such plan those individuals
who first became members of the Board after October 27, 1999.
On July 1, 1999, pursuant to the Non-Employee Directors' Stock Acquisition
Plan, the Corporation awarded 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, which as nearly as possible equaled but
did not exceed $2,000. On November 1, 1999, the Non-Employee Directors' Stock
Acquisition Plan was terminated and replaced with the Non-Employee Directors'
Stock Compensation Plan. Pursuant to this new plan, on November 1, 1999, the
Corporation awarded to each non-employee director that number of whole shares,
when multiplied by the closing price of common stock on the immediately
preceding business day, as reported in the Wall Street Journal, which as
nearly as possible equaled, but did not exceed, $16,000. On the first business
day after October 31 of each subsequent year, each director as of June 30
shall be awarded that number of whole shares, when multiplied by the closing
price of common stock on the immediately preceding business day, as reported
in the Wall Street Journal, that as nearly as possible equals, but does not
exceed, $18,000. The shares of Albemarle Common Stock awarded under
10
<PAGE>
both plans are nonforfeitable and the recipient directors immediately and
fully vest in Albemarle Common Stock issued under the plans. Subject only to
such limitations on transfer as may be specified by applicable securities
laws, directors may sell the shares received under both plans at any time.
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.
At its December 15, 1999 meeting, the Board of Directors adopted a policy
for stock ownership by its outside directors. Pursuant to this policy, all
current outside directors are to achieve ownership of Albemarle Common Stock
equal to at least four times the annual retainer for an outside director,
which is the combination at the applicable time of the cash retainer plus the
annual stock award. The amount of stock required to be owned shall be based on
the higher of the value on the date of acquisition or the market value. The
outside directors shall achieve this level of ownership within four years from
December 15, 1999. Newly-elected outside directors are to achieve this same
level of ownership within five years of first becoming a Board member.
AGREEMENTS WITH EXECUTIVE OFFICERS
In the event that Mr. Rohr's employment is terminated within the first five
years other than for cause, the Corporation is obligated to pay Mr. Rohr a
severance equal to two times his then-current annual compensation. If, within
24 months of the beginning of Mr. Rohr's employment, a change of control of
the Corporation and one or more of the following events were to occur, Mr.
Rohr has the option to resign and receive a lump sum payment as described
below. The events include: (i) a change or diminution of responsibilities or
compensation, (ii) relocation, (iii) a reduction of benefit eligibility or
level and (iv) failure by a successor company to assume this severance
agreement. The benefits described below also apply in the event of termination
of Mr. Rohr's employment following a change of control.
If Mr. Rohr resigns or is terminated as described above, (i) he will
receive a lump sum payment equal to two times his annual compensation, (ii)
all of his vested outstanding stock options will become exercisable, (iii) all
restricted stock will become non-forfeitable and (iv) should a change of
control occur during the first 10 years of Mr. Rohr's employment, he will
receive an adjusted benefit payable at normal retirement age under the
Corporation's pension plan without offset from other benefits.
Mr. Betlem retired as of December 31, 1999. Effective January 1, 2000, Mr.
Betlem entered into a two-year contract to provide consulting on international
affairs for $250,000 per year.
Stock options and performance shares granted to Mr. Betlem were amended to
extend the exercise period and the vesting period, as applicable, of the
awards until the expiration date of such grants, notwithstanding Mr. Betlem's
retirement, disability or death.
11
<PAGE>
THE EXECUTIVE COMPENSATION COMMITTEE REPORT
The Executive Compensation Committee (the "Committee") of the Board of
Directors is pleased to present its annual report on executive compensation.
This report describes the objectives of the Corporation's executive
compensation program, the various components of the program, and explains the
basis on which 1999 compensation determinations were made by the Committee.
During 1998, the Committee completed a comprehensive examination of the
Corporation's executive compensation policies using the services of an
independent consulting firm. The philosophy and new incentive programs that
were implemented as a result of that study are outlined below.
Overall Objectives of Executive Compensation Programs
The Committee's guiding philosophy is to establish executive compensation
policies that are linked to the sustained creation of shareholder value. The
following objectives serve as the guiding principles for all compensation
decisions:
. Provide a competitive total compensation opportunity that will enable the
Corporation to attract, retain and motivate highly qualified executives.
. Align compensation opportunities with shareholder interests by making the
executive compensation program highly sensitive to the Corporation's
performance, which is defined in terms of long-term profitability and
creating shareholder value.
. Provide a strong emphasis on equity-based compensation and equity
ownership, creating a direct link between shareholder and management
interests.
Compensation Program Components
The Committee believes that the total compensation opportunity available to
members of management should consist of base salary, annual incentives and
long-term incentives with each component geared to the median of the market
for all positions in the aggregate. Individuals may be compensated above or
below the median of the marketplace based on the Corporation's performance and
on considerations of individual performance and experience. The Committee
considers all elements of the program when setting compensation levels. The
Committee is placing increasing emphasis on incentive compensation. As a
result, the Committee has been restricting, and intends over the next several
years to continue to restrict, increases in base salary in order that base
salary generally will approach the median of the market.
The Committee periodically meets individually with members of management in
order to assess progress toward meeting objectives set by the Board of
Directors for both annual and long-term compensation.
The Committee utilizes compensation surveys to aid in the determination of
competitive levels of executive pay. The surveys include companies that are
larger and smaller than the Corporation. Some surveys are limited to companies
in the chemical business, including, but not limited to, some of the companies
included in the Chemical Composite shown in the Performance Graph. The
Committee also utilizes executive compensation information compiled from the
proxy statements of other chemical companies. References to the "market" in
this report refer to these survey and proxy data.
12
<PAGE>
Base Salaries
Base salaries are determined in accordance with the responsibilities of
each officer, median market data for the position and the officer's
performance. The Committee considers each of these factors but does not assign
a specific value to each factor. Furthermore, a subjective element is
acknowledged in evaluating the officer's overall span of responsibility and
control.
Salaries for some officers for 1999 were maintained at current levels to
reflect the increased emphasis on compensation that is tied to the long-term
performance of the Corporation. Total compensation for the Corporation's
officers is believed to be generally in line with the median of the market as
described above.
Annual Incentives
The purpose of the 1998 Plan is to create a substantial incentive to
officers and key employees to maximize shareholder value and provide a means
for recognizing individual contribution to corporate and business unit
results.
Key features of the new annual incentive program include the following:
. A primary emphasis on sustained operating earnings growth and return on
gross assets.
. A significant emphasis on the achievement of key strategic objectives
related to future safety, profitable growth and market leadership.
. A more formulaic and objective approach to award calculation.
. A means for recognizing individual achievement and contribution for
participants (other than the executives named in the Compensation of
Executive Officers table on page 6).
Annual incentive awards are reviewed by the Committee in conjunction with
senior management. Awards are based on an evaluation of the performance, level
of responsibility and leadership of the individual in relation to overall
corporate results. In 1999, annual incentives were based on the financial
results for the Corporation as a whole, performance of the Corporation's
business units and other financial measures, including return on gross assets.
Stock Options and Restricted Awards
The Committee believes strongly that equity based awards are an integral
part of total compensation for officers and certain key managers with
significant responsibility for the long-term results of the Corporation. Stock
options and restricted stock awards that are tied to corporate performance
provide an effective means of delivering incentive compensation and also
foster stock ownership on the part of management.
The 1998 Plan:
. Authorizes the granting of stock options, SARs, performance shares,
restricted stock and other incentive awards, all of which may be made
subject to the attainment of performance goals established by the
Committee.
. Provides for the enumeration of the business criteria on which an
individual's performance goals are to be based.
. Establishes the maximum share grants or awards (or, in the case of
incentive awards, the maximum compensation) that can be paid to a 1998
Plan participant.
In 1999, incentive awards of stock options and performance shares were made
in accordance with the performance-based focus of the 1998 Plan. The
exercisability of the 1999 stock option awards is tied to the performance of
Albemarle Common Stock.
13
<PAGE>
Stock Ownership Guidelines
To further align the interests of members of management with the
Corporation's shareholders, the Committee has established stock ownership
guidelines that are designed to encourage the accumulation and retention of
Albemarle Common Stock. The guidelines call for certain members of management
to hold a minimum multiple of base salary in shares of Albemarle Common Stock
by the end of the year 2002. Participation in the 1998 Plan beyond 2002 will
be contingent upon satisfying the guidelines. The established guidelines are
as follows:
<TABLE>
<S> <C>
. CEO 4 x salary
. Other named officers 3 x salary
. Other management level
employees 1x to 2x (depending upon position level) salary
</TABLE>
Discussion of 1999 Compensation for the Chief Executive Officer
At his request, Mr. Floyd D. Gottwald, Jr.'s compensation as Chief
Executive Officer remained unchanged during 1999. The Committee awarded Mr.
Gottwald a bonus for 1999 of $74,500 in recognition of the leadership that Mr.
Gottwald has shown in focusing management on the achievement of substantial
earnings growth and maximizing long-term value for the Corporation's
shareholders. The Committee notes Mr. Gottwald's leadership contributed to the
gain realized by the Corporation in connection with its investment in Albright
& Wilson plc.
Deductibility of Compensation
The Committee has carefully considered Section 162(m) of the Code, which
provides certain criteria for the tax deductibility of compensation in excess
of $1 million paid to the Corporation's executive officers. The Committee
believes it is in the best interests of the Corporation and its shareholders
to comply with the requirements of Section 162(m), but the Committee intends
to preserve the flexibility to reward executives consistent with the
Corporation's pay philosophy for each compensation element. The Committee
intends that grants of options, awards of performance shares, restricted stock
and other incentive awards under the 1998 Plan comply with the requirements of
Section 162(m).
THE EXECUTIVE COMPENSATION COMMITTEE
Craig R. Andersson, Chairman
Seymour S. Preston III
Emmett J. Rice
Anne Marie Whittemore
February 22, 2000
14
<PAGE>
[PERFORMANCE GRAPH]
- ----------------------------------------------------------
CHEMICAL S&P 500
DATE ALBEMARLE COMPOSITE COMPANIES
- ----------------------------------------------------------
12/31/94 $100.00 $100.00 $100.00
12/31/95 $141.45 $130.84 $137.45
12/31/96 $134.11 $162.99 $168.93
12/31/97 $179.24 $198.29 $225.21
12/31/98 $181.29 $185.90 $289.43
12/31/99 $149.31 $217.45 $350.26
*Assumes $100 invested on last day of December 1994. Dividends
invested quarterly.
DESIGNATION OF AUDITORS
The Board of Directors has designated PricewaterhouseCoopers LLP, certified
public accountants, as the Corporation's independent auditors for fiscal year
2000, subject to shareholder approval. A representative of
PricewaterhouseCoopers LLP 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.
PricewaterhouseCoopers LLP'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.
15
<PAGE>
PROPOSALS FOR 2001 ANNUAL MEETING
Under the regulations of the Securities and Exchange Commission, any
shareholder desiring to make a proposal to be acted upon at the 2001 annual
meeting of shareholders must present such proposal to the Corporation at its
principal office in Richmond, Virginia, not later than November 22, 2000, in
order for the proposal to be considered for inclusion in the Corporation's
proxy statement. The Corporation anticipates holding the 2001 annual meeting
on April 25, 2001.
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
16
<PAGE>
NOTICE
and
PROXY STATEMENT
for
ANNUAL MEETING
of
SHAREHOLDERS
APRIL 26, 2000
[ALBEMARLE CORP. LOGO]
ALBEMARLE CORPORATION
330 SOUTH FOURTH STREET
P.O. BOX 1335
RICHMOND, VIRGINIA 23210
<PAGE>
ALBEMARLE CORPORATION
Richmond, Virginia
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 2000
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 26, 2000, and at any and all adjournments
thereof:
1. ELECTION OF DIRECTORS
[_] FOR ALL[_] WITHHOLD ALL[_] FOR ALL EXCEPT
Craig R. Andersson, Floyd D. Gottwald, Jr., John D. Gottwald, William M.
Gottwald, Seymour S. Preston III,
Emmett J. Rice, Charles E. Stewart, 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 PricewaterhouseCoopers LLP as
the auditors for the Corporation for 2000.
[_] 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.
This Proxy is solicited on behalf of the Board of Directors. This Proxy when
properly executed will be voted in the manner directed herein by the
undersigned shareholder. If no direction is made, this Proxy will be voted FOR
all nominees and FOR Proposal 2.
Dated _______________________ , 2000
------------------------------------
Please sign name exactly as it ap-
pears on the stock certificate.
Only one of several joint owners or
co-owners need sign. Fiduciaries
should give full title.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
