<PAGE>
<PAGE>
Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
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
THE GENERAL CHEMICAL GROUP INC.
.................................................................
(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)(1)
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>
<PAGE>
[Logo]
April 7, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
The General Chemical Group Inc. (the 'Annual Meeting') to be held at the Mellon
Bank Building, 8 Loockerman Street, Dover, Delaware on Tuesday, May 12, 1998 at
9:30 a.m. local time.
The Annual Meeting has been called for the purpose of (i) electing eight
Directors for a one-year term; (ii) ratifying the appointment of Deloitte &
Touche LLP as the Company's independent auditors; and (iii) considering and
voting upon such other business as may properly come before the Annual Meeting
and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on April 6, 1998 as
the record date for determining stockholders entitled to receive notice of, and
to vote at, the Annual Meeting and any adjournments or postponements thereof.
The Board of Directors recommends that you vote 'FOR' the election of the
eight nominees of the Board of Directors as Directors of the Company and the
ratification of Deloitte & Touche LLP as the Company's independent auditors.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE
ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY CARD.
Very truly yours,
RICHARD R. RUSSELL
Richard R. Russell
President, Chief Executive Officer
and Director
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
LIBERTY LANE
HAMPTON, NEW HAMPSHIRE 03842
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1998
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of THE
GENERAL CHEMICAL GROUP INC. ('the Company') will be held at the Mellon Bank
Building, 8 Loockerman Street, Dover, Delaware on Tuesday, May 12, 1998 at 9:30
a.m. local time for the following purposes:
1. The election of eight Directors for a one-year term;
2. The ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors; and
3. Such other business as may properly come before the Annual Meeting
and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on April 6, 1998 as
the record date for determining stockholders entitled to receive notice of, and
to vote at, the Annual Meeting and any adjournments or postponements thereof.
Only holders of the Company's Voting Stock (i.e., Common Stock and Class B
Common Stock) of record at the close of business on the record date will be
entitled to receive notice of, and to vote at, the Annual Meeting and any
adjournments or postponements thereof.
In the event that there are not sufficient shares of Voting Stock to be
voted in favor of any of the foregoing proposals at the time of the Annual
Meeting, the Annual Meeting may be adjourned in order to permit further
solicitation of proxies.
By Order of the Board of Directors
Hampton, New Hampshire
April 7, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU
HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
LIBERTY LANE
HAMPTON, NEW HAMPSHIRE 03842
------------------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 12, 1998
PROXY STATEMENT
------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The General Chemical Group Inc., a Delaware
corporation (the 'Company'), for use at the Company's Annual Meeting of
Stockholders to be held at the Mellon Bank Building, 8 Loockerman Street, Dover,
Delaware, May 12, 1998 at 9:30 a.m. local time, and any adjournments or
postponements thereof (the 'Annual Meeting').
At the Annual Meeting, the stockholders of the Company will be asked to
consider and vote upon the following matters:
1. The election of eight directors, each for a one-year term, such
term to continue until the 1999 annual meeting of stockholders and
until each Director's successor is duly elected and qualified, or
until such Director's earlier resignation or removal;
2. The ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors; and
3. Such other business that may properly come before the Annual
Meeting.
The Notice of Annual Meeting, Proxy Statement and Proxy Card are first
being mailed to stockholders of the Company on or about April 7, 1998 in
connection with the solicitation of proxies for the Annual Meeting. The Board of
Directors (the 'Board'), has fixed the close of business on April 6, 1998 as the
record date for determination of stockholders entitled to receive notice of, and
to vote at, the Annual Meeting (the 'Record Date'). Only holders of record of
Common Stock and Class B Common Stock at the close of business on the Record
Date will be entitled to receive notice of, and to vote at, the Annual Meeting.
As of the Record Date, there were 11,205,991 shares of Common Stock and
9,758,421 shares of Class B Common Stock outstanding and entitled to vote at the
Annual Meeting and approximately 145 holders of record of Common Stock and
approximately 3 holders of record of Class B Common Stock. Each holder of a
share of Common Stock outstanding as of the close of business on the Record Date
will be entitled to cast one vote for each such share and each holder of a share
of Class B Common Stock outstanding as of the close of business on the Record
Date will be entitled to cast ten votes for each such share with respect to each
matter submitted at the Annual Meeting.
The presence, in person or by proxy, of shares of Common Stock and Class B
Common Stock (collectively the 'Voting Stock') representing a majority of the
voting power of the outstanding shares of Voting Stock issued, outstanding and
entitled to vote at the Annual Meeting is necessary to constitute a quorum for
the transaction of business at the Annual Meeting. A quorum being present, the
affirmative vote of a plurality of the votes cast is necessary to elect the
Director-nominees as Directors of the Company. With respect to Proposal
2 -- Ratification of the Appointment of Deloitte & Touche LLP as the Company's
independent auditors, the affirmative vote of a majority of the voting power of
the Voting Stock present, or represented, and entitled to vote is required for
approval. Shares that reflect abstentions or 'broker non-votes' (i.e., shares
represented at the Annual Meeting held by brokers or nominees as to which
instructions have not been received from the beneficial owners or persons
entitled to vote such shares and with respect to which the broker or nominee
does not have discretionary power to vote such shares) will be counted for
purposes of determining whether a quorum is present for the transaction of
business at the Annual Meeting. Generally, abstentions are treated as
<PAGE>
<PAGE>
votes cast against a particular proposal submitted at the Annual Meeting. Broker
non-votes will have no effect on the outcome of the election of the Directors.
STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE. SHARES OF VOTING STOCK
REPRESENTED BY PROPERLY EXECUTED PROXIES AND RECEIVED BY THE COMPANY AND NOT
REVOKED WILL BE VOTED AT THE ANNUAL MEETING IN ACCORDANCE WITH ANY INSTRUCTIONS
CONTAINED THEREON. IF INSTRUCTIONS ARE NOT GIVEN THEREON, PROPERLY EXECUTED
PROXIES WILL BE VOTED 'FOR' THE ELECTION OF THE EIGHT DIRECTOR-NOMINEES LISTED
IN THIS PROXY STATEMENT AND 'FOR' THE RATIFICATION OF THE APPOINTMENT OF
DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS. IT IS NOT
ANTICIPATED THAT ANY MATTERS OTHER THAN THE ELECTION OF DIRECTORS AND THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS WILL BE PRESENTED
AT THE ANNUAL MEETING. IF OTHER MATTERS ARE PRESENTED, PROXIES WILL BE VOTED IN
ACCORDANCE WITH THE DISCRETION OF THE PROXY HOLDERS.
Any properly completed proxy may be revoked at any time before it is voted
on any matter (without, however, affecting any vote taken prior to such
revocation) by giving written notice of such revocation to the Secretary of the
Company, or by signing and duly delivering a proxy bearing a later date, or by
attending the Annual Meeting and voting in person. Attendance at the Annual
Meeting will not, by itself, revoke a proxy.
PRINCIPAL STOCKHOLDERS
The following table sets forth, to the best knowledge and belief of the
Company, certain information with respect to the beneficial ownership of more
than five percent of the Company's Common Stock and Class B Common Stock as of
March 1, 1998. For information concerning ownership by management, see
'Management Stockholders.'
<TABLE>
<CAPTION>
SHARES OF CLASS
SHARES OF PERCENT OF B PERCENT OF
NAME OF BENEFICIAL OWNER COMMON STOCK(1) CLASS(2) COMMON STOCK(2) CLASS(1)
- ------------------------------------------------ --------------- ---------- --------------- ----------
<S> <C> <C> <C> <C>
Mr. Paul M. Montrone(3)......................... 9,758,421(4) 47% 9,758,421(4) 100%
J. P. Morgan & Co. Incorporated(5).............. 947,000(6) 5%(7) -- --
Franklin Resources Inc.(8)...................... 887,600(9) 4%(7) -- --
Equitable Life Assurance Society(10)............ 650,000(11) 3%(7) -- --
Network Fund III, Ltd.(12)...................... 600,000(13) 3%(7) -- --
</TABLE>
- ------------
(1) Applicable percentage figures based on 11,203,825 shares of Common Stock
and 9,758,421 shares of Class B Common Stock as of March 1, 1998. The
percentage ownership of Common Stock has been calculated assuming the
conversion of all outstanding shares of Class B Common Stock into Common
Stock.
(2) Holders of Class B Common Stock may convert each such share of Class B
Common Stock at any time and from time to time into one fully-paid and
nonassessable share of Common Stock.
(3) The address for Mr. Montrone is c/o The General Chemical Group Inc.,
Liberty Lane, Hampton, New Hampshire 03842.
(4) See footnote (5) of 'Management Stockholders' table.
(5) The address of J. P. Morgan & Co. Incorporated is 60 Wall Street, New York,
NY 10260.
(6) The information presented herein is based solely upon a Schedule 13G/A
filing made with the United States Securities and Exchange Commission (the
'SEC') by J.P. Morgan & Co. Incorporated ('J.P. Morgan') on February 13,
1998. According to such filing, J.P. Morgan possesses sole voting power
over 871,200 of the above shares and sole dispositive power of 947,000 of
the above shares.
(footnotes continued on next page)
2
<PAGE>
<PAGE>
(footnotes continued from previous page)
(7) The percentage ownership of Common Stock has been calculated assuming the
conversion of all outstanding shares of Class B Common Stock into Common
Stock. Prior to such conversion, the percentage ownership of Common Stock
for each of J.P. Morgan, Franklin Resources, Inc. ('Franklin'), Equitable
Life Assurance Society ('Equitable') and Network Fund III, Ltd. ('Network')
is 8%, 8%, 6% and 5%, respectively.
(8) The address of Franklin Resources, Inc., Mr. Charles B. Johnson and Mr.
Rupert H. Johnson, Jr. is 777 Mariners Island Boulevard, 6th Floor, San
Mateo, CA 94404. The address of Franklin Mutual Advisers, Inc. is 51 John
F. Kennedy Parkway, Short Hills, NJ 07078. See footnote 9 to this table.
(9) The information presented herein is based solely upon a Schedule 13G filing
made with the SEC by Franklin on February 4, 1998. According to such
filing, Franklin filed such Schedule 13G on behalf of the following group
of individuals: (i) Franklin itself (parent holding company); (ii) Mr.
Charles B. Johnson, (principal shareholder of parent holding company);
(iii) Mr. Rupert H. Johnson, Jr. (principal shareholder of parent holding
company); and (iv) Franklin Mutual Advisors, Inc. (investment advisor).
According to the Schedule 13G filing, Franklin Mutual Advisors, Inc.
possesses sole voting power over 887,600 of the above shares and sole
dispositive power over 887,600 of the above shares. Neither Franklin nor
Messrs. Charles or Rupert Johnson possess sole voting or sole dispositive
power over any of the above shares.
(10) The address of Equitable Life Assurance Society is City Place House, 55
Basinghall Street, London EC2V 5DR, England.
(11) The information presented herein is based solely upon a Schedule 13D filing
made with the SEC by Equitable on May 2, 1997. According to such filing,
Equitable possesses sole voting and sole dispositive power over all of the
above shares.
(12) The address of each Network Fund III, Ltd. and Mr. John W. Gildea is c/o
Gildea Management Co., 115 East Putnam Avenue, Greenwich, CT 06830. See
footnote 13 to this table.
(13) The information presented herein is based solely upon a Schedule 13D filing
made with the SEC by Network on May 2, 1997. According to such filing,
Network filed such Schedule 13D on behalf of Network itself and Mr. John W.
Gildea, a director of the Company. According to the Schedule 13D filing,
Network possesses sole voting power over 500,000 shares of the above shares
and sole dispositive power over 500,000 of the above shares while Mr.
Gildea possesses sole voting and sole dispositive power over all of the
above shares. See footnote 6 to the 'Management Stockholders' table.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of the Company consists of eight members, each serving a one-year
term, with all being elected by the Company's stockholders at each annual
meeting. Seven of the Company's eight current Directors were elected at the
Company's 1997 Annual Meeting of Stockholders, which meeting was held on May 13,
1997. In 1997 the Company's Board was expanded from seven to eight members and
Mr. John W. Gildea was subsequently elected by the Board as a Director on June
4, 1997.
At the Annual Meeting, eight Directors will be elected to serve until the
1999 annual meeting of stockholders and until such Director's successor is duly
elected and qualified or until his earlier resignation or removal. The
Nominating Committee has recommended, and the Board has nominated, each of
Messrs. Paul M. Montrone (Chairman), Philip E. Beekman, John W. Gildea, Gerald
J. Lewis, Paul M. Meister, Richard R. Russell, Scott M. Sperling and Ira
Stepanian, for re-election as Directors of the Company. Unless otherwise
specified in the proxy, it is the intention of the persons named in the proxy to
vote the shares represented by each properly executed proxy for the re-election
of Messrs. Montrone, Beekman, Gildea, Lewis, Meister, Russell, Sperling and
Stepanian as Directors. Each Director-nominee has agreed to stand for
re-election and to serve, if elected, as a Director. However, if any person
nominated by the Board fails to stand for election or is unable to accept
election, the proxies will be voted for the election of such other person or
persons as the Board may recommend.
3
<PAGE>
<PAGE>
A quorum being present, the affirmative vote of a plurality of the votes
cast is necessary for the election of each nominee as a Director of the Company.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE ELECTION OF
THE NOMINEES OF THE BOARD OF DIRECTORS OF THE COMPANY.
BOARD OF DIRECTORS NOMINEES (ALL FOR A TERM EXPIRING IN 1999)
Paul M. Montrone, 56, Chairman of the Board, has been a Director of the
Company since 1988 and was President of the Company from 1987 to 1994. Mr.
Montrone has been Chairman of the Board of Fisher Scientific International Inc.
('Fisher') since March 1998, and President and Chief Executive Officer and a
Director of Fisher since prior to 1993. Mr. Montrone was Vice Chairman of Abex
Inc. ('Abex'), from prior to 1993 to June 1995. Mr. Montrone is also a Director
of Waste Management, Inc. (refuse to energy).
Philip E. Beekman, 66, has been a Director of the Company since 1996. Mr.
Beekman has been President of Owl Hollow Enterprises (consulting and investment)
since prior to 1993, and was Chairman of the Board and Chief Executive Officer
of Hook-SupeRx, Inc. (retail) from prior to 1993 to 1994. Mr. Beekman is also a
Director of BT Office Products International, Inc., Linens 'n Things Inc.,
Consolidated Cigar Corp. and Kendle International Inc.
John W. Gildea, 54, has been a Director of the Company since 1997. He has
been Managing Director of Gildea Management Company (investment management firm)
since prior to 1993. Mr. Gildea is also a Director of FAC Realty Trust, Inc.,
American Service Group, Inc. and Barry's Jewelers, Inc.
Gerald J. Lewis, 64, has been a Director of the Company since 1996. Judge
Lewis has been Chairman of Lawsuit Resolution Services since 1997. He was of
counsel to the law firm of Latham & Watkins from prior to 1993 to 1997.
Paul M. Meister, 45, has been a Director of the Company since 1996. Mr.
Meister has been Vice Chairman of the Board of Fisher since March 1998, and
Senior Vice President and Chief Financial Officer of Fisher since prior to 1993.
Mr. Meister was Senior Vice President of Abex from prior to 1993 to 1995. Mr.
Meister is also a Director of Mineral Technologies Inc., M&F Worldwide Corp. and
Wheelabrator Technologies Inc. (refuse to energy).
Richard R. Russell, 55, has been President and Chief Executive Officer and
a Director of the Company since 1994. Mr. Russell has been President and Chief
Executive Officer and a Director of the Company's General Chemical Corporation
subsidiary since 1986.
Scott M. Sperling, 40, has been a Director of the Company since 1996. Mr.
Sperling has been a Managing Director of Thomas H. Lee Company (private equity
investment firm) since September 1994. Mr. Sperling was Managing Partner of The
Aeneas Group Inc., a private capital affiliate of Harvard Management Company,
from prior to 1993 to September 1994. Mr. Sperling is also a Director of Beacon
Properties, Inc., Fisher, The Learning Center, Livent, Inc., Safelite Glass
Corp. and several private corporations.
Ira Stepanian, 61, has been a Director of the Company since 1996. Mr.
Stepanian was Chairman and Chief Executive Officer of Bank of Boston Corporation
and its principal subsidiary, The First National Bank of Boston from prior to
1993 until 1995.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board held five (5) meetings during fiscal 1997. During fiscal 1997,
each of the incumbent Directors attended at least 75 percent of the total number
of meetings of the Board and of the Committees of which he was a member. The
Company's Board has established an Audit Committee, a Compensation Committee, an
Executive Committee, a Nominating Committee and an Option Committee.
The Audit Committee consists of Messrs. Beekman, Lewis and Stepanian, with
Judge Lewis serving as Chairman. It is responsible for, among other things,
recommending the firm to be appointed as
4
<PAGE>
<PAGE>
independent public accountants to audit the Company's financial statements and
to perform services related to the audit; approving in advance the general
nature of each professional service performed by the independent public
accountants; reviewing the scope and the results of the audit with the
independent public accountants; reviewing with management and the independent
public accountants the Company's year-end operating results; considering the
adequacy of the internal accounting and control procedures of the Company;
reviewing the non-audit services to be performed by the independent public
accountants if any; considering the effect of such performance on the
independent public accountants' independence; directing and supervising, when
appropriate, special investigations into matters within the scope of the
independent public accountants duties; and performing such other tasks related
to and in furtherance of the foregoing as it may consider necessary or
appropriate or as may be assigned to it by the Board from time to time. The
Audit Committee met twice during fiscal 1997.
The Compensation Committee consists of Messrs. Beekman, Meister and
Sperling, with Mr. Beekman serving as Chairman. The Committee is responsible
for, among other things, reviewing and recommending compensation arrangements
for Directors and officers; approving such arrangements for other senior level
employees; administering certain benefit and compensation plans of the Company
and its subsidiaries; monitoring the activities of an internal committee of
members of management established to carry out policies and guidelines with
respect to such plans; and performing such other tasks related to and in
furtherance of the foregoing as it may consider necessary or appropriate or as
may be assigned to it by the Board from time to time. The Compensation Committee
met twice during fiscal 1997.
The Executive Committee consists of Messrs. Montrone, Russell and
Stepanian, with Mr. Montrone serving as Chairman. The Executive Committee
possesses and may exercise during the interval between meetings of the Board all
the powers of the Board. The Committee is responsible for overseeing the
management and direction of all business and affairs of the Company, in such
manner as the Executive Committee deems in the best interests of the Company.
Meetings may be called by the Chief Executive Officer or the Chairman of the
Committee. The Executive Committee did not meet during fiscal year 1997.
The Nominating Committee consists of all members of the Board, with Mr.
Montrone serving as Chairman. The Nominating Committee is responsible for
nominating persons for election to the Board. The Nominating Committee will
consider nominees properly recommended by stockholders. The Nominating Committee
met once during fiscal 1997.
The Option Committee consists of Messrs. Beekman, Lewis and Sperling with
Mr. Beekman serving as Chairman. The Committee is responsible for authorizing
and awarding incentive and non-qualified stock options, stock appreciation
rights, restricted shares, and restricted units and other forms of incentive
compensation and administering the plans and programs relating thereto. The
Option Committee met once during fiscal 1997.
COMPENSATION OF DIRECTORS
The Non-Employee Directors of the Company are entitled to receive cash and
other compensation pursuant to the plans described below.
Cash Compensation. Non-Employee Directors of the Company receive
compensation of $40,000 per year, with no additional fees for attendance at the
Company's Board or committee meetings. Employee Directors are not paid any fees
or additional compensation for service as members of the Company's Board or any
of its committees. All Directors are reimbursed for expenses incurred in
connection with attending the Company's Board and committee meetings.
Deferred Compensation Plan for Non-Employee Directors. Pursuant to the
Company's Deferred Compensation Plan for Non-Employee Directors, any Director
entitled to compensation may elect, generally prior to the commencement of any
calendar year, to have all or any portion of such Director's compensation for
such calendar year and for succeeding calendar years credited to a deferred
compensation account. Amounts credited to the Director's account will accrue
interest based upon the average quoted rate for ten-year U.S. Treasury Notes.
Deferred amounts will be paid in a lump sum or
5
<PAGE>
<PAGE>
in installments at the Director's discretion commencing on the first business
day of the calendar year following the year in which the Director ceases to
serve on the Company's Board or of a later calendar year specified by such
Director.
Retirement Plan for Non-Employee Directors. Pursuant to the Company's
Retirement Plan for Non-Employee Directors, any Non-Employee Director who
retires from the Company's Board with at least five years of service as a
Director (other than Messrs. Montrone and Meister) will be eligible for an
annual retirement benefit for the remainder of such Director's lifetime. The
annual retirement benefit is equal to 50 percent of the Director fee in effect
at the date of such Director's retirement for a Director who retires with five
years of eligible service and is increased by 10 percent of the Director fee in
effect at the date of such Director's retirement for each additional year of
service, up to 100 percent of such fee for 10 or more years of service as a
Director or for Directors who retire after age 70. Payment of the retirement
benefits to any Director will commence upon the later of the Director's
retirement from the Company's Board or the attainment of age 60. Retirement
benefits may be suspended or terminated if the retired Director refuses to
render consultative services and advice to the Company or engages in any
activity which competes with the Company's business.
Restricted Unit Plan for Non-Employee Directors. Pursuant to the Company's
Restricted Unit Plan for Non-Employee Directors, each Non-Employee Director of
the Company (other than Messrs. Montrone and Meister), upon becoming a Director
of the Company, receives a one-time grant of 5,000 restricted units under the
Restricted Unit Plan for Non-Employee Directors evidencing a right to receive
shares of Common Stock, subject to certain restrictions. The Company will
maintain a memorandum account for each Director who received the grant of
restricted units and credit to such account the amount of any cash dividends and
shares of stock of any subsidiary distributed on the shares of Common Stock
('Dividend Equivalents') underlying such Director's restricted units from the
date of grant until the payment date described below. No shares of Common Stock
will be issued at the time restricted units are granted, and the Company will
not be required to set aside a fund for any such grant or for amounts credited
to the memorandum account. Pursuant to the terms of the Plan neither the
restricted units nor the memorandum account may be sold, assigned, pledged or
otherwise disposed of. Twenty-five percent of the restricted units and the
related Dividend Equivalents will vest for each year of service as a Director of
the Company. Vested restricted units and the related Dividend Equivalents will
not be payable until the Director ceases to be a member of the Company's Board.
At that time, the Director will receive one share of Common Stock for each
vested restricted unit, provided that a Director may elect, prior to the date on
which restricted units vest, to have payment deferred to a later date. Any
restricted units and related Dividend Equivalents that have not vested at the
time the Director ceases to be a Director of the Company will be cancelled
unless service has terminated because of death or disability, in which event all
such restricted units and related Dividend Equivalents will vest immediately.
When payment of restricted units is made, Non-Employee Directors (other than
Messrs. Montrone and Meister) will also receive cash and securities equal to the
related Dividend Equivalents, together with interest on the cash based upon the
average quoted rate for ten-year U.S. Treasury Notes. In the event of a stock
dividend, stock split, recapitalization, merger, liquidation or similar event,
the Board, in its sole discretion, may make equitable adjustments in outstanding
awards and the number of shares of Common Stock reserved for issuance under the
plan.
6
<PAGE>
<PAGE>
MANAGEMENT STOCKHOLDERS
The following table sets forth, to the best knowledge and belief of the
Company, certain information with respect to the beneficial ownership of the
Company's Common Stock and Class B Common Stock as of March 1, 1998 by (i) each
Director and Named Executive Officer of the Company, and (ii) all Directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES OF CLASS
SHARES OF PERCENT OF B PERCENT OF
NAME OF BENEFICIAL OWNER(1) COMMON STOCK(2) CLASS(3) COMMON STOCK(4) CLASS(3)
- --------------------------------------------------- --------------- ---------- --------------- ----------
<S> <C> <C> <C> <C>
Paul M. Montrone................................... 9,758,421(5) 47% 9,758,421 100%
John W. Gildea..................................... 605,000(6)(7) 3% -- --
Richard R. Russell................................. 43,388(8) * -- --
Ralph M. Passino................................... 32,194(9) * -- --
James N. Tanis..................................... 25,194(10) * -- --
Bodo B. Klink...................................... 13,963(11) * -- --
DeLyle W. Bloomquist............................... 13,706(12) * -- --
Philip E. Beekman.................................. 10,000(7) * -- --
Gerald J. Lewis.................................... 5,000(7) * -- --
Scott M. Sperling.................................. 5,000(7) * -- --
Ira Stepanian...................................... 5,000(7) * -- --
Paul M. Meister.................................... 3,000(13) * -- --
All Directors and executive officers as a group (14
persons)......................................... 10,542,714(14) 50% 9,758,421 100%
</TABLE>
- ------------
* Less than 1%
(1) The address for all Directors and executive officers is c/o The General
Chemical Group Inc., Liberty Lane, Hampton, New Hampshire 03842.
(2) Assumes conversion of shares of Class B Common Stock into shares of Common
Stock.
(3) Applicable percentage figures are based on 11,203,825 issued and
outstanding shares of Common stock and 9,758,421 outstanding shares of
Class B Common Stock as of March 1, 1998. The percentage ownership of
Common Stock has been calculated assuming the conversion of all outstanding
shares of Class B Common Stock into Common Stock.
(4) Holders of Class B Common Stock may convert each such share of Class B
Common Stock at any time and from time to time into one fully-paid and
non-assessable share of Common Stock.
(5) Includes 3,283,344 shares of Class B Common Stock held by a grantor
retained annuity trust of which Mr. Montrone and his wife, Ms. Sandra G.
Montrone, are co-trustees (the '1996 GRAT'). By virtue of her position as
co-trustee, Ms. Montrone may be deemed the beneficial owner of all shares
held by the 1996 GRAT. In April 1996, the Company entered into a
Stockholder Agreement with the 1996 GRAT and Mr. Montrone pursuant to which
the 1996 GRAT granted to the Company a right of first refusal with respect
to any transfer of shares of Common Stock by the 1996 GRAT through March 1,
2001. In exchange, the Company agreed to register for sale under the
Securities Act of 1933, as amended, at any time beginning on March 1, 1997
and ending on March 1, 2001 shares of Common Stock which the 1996 GRAT may
from time to time distribute to Mr. Montrone or his assignees, although Mr.
Montrone would not be obligated to sell any such shares of Common Stock.
Also includes 4,000,000 shares of Class B Common Stock held by a grantor
retained annuity trust, of which Mr. and Ms. Montrone are co-trustees (the
'1998 GRAT'). Does not include 100,000 shares of Common Stock held by a
charitable foundation, of which Mr. Montrone is a Director and Ms. Montrone
is a Director and officer. By virtue of their positions with the charitable
foundation, Mr. and Ms. Montrone may be deemed to be beneficial owners of
the shares of Common Stock held by the charitable foundation. Mr. and Ms.
Montrone disclaim any beneficial ownership of the 100,000 shares of Common
Stock held by the charitable foundation. The shares of Class B Common Stock
beneficially owned by Mr. Montrone represents 90% of the combined voting
power of the outstanding shares of the Voting Stock.
(footnotes continued on next page)
7
<PAGE>
<PAGE>
(footnotes continued from previous page)
(6) Includes 25,000 shares of Common Stock held by a defined benefit plan of
Gildea Investment Company, of which Mr. Gildea is an officer and the sole
stockholder. Also includes 500,000 shares of Common Stock beneficially
owned by Network Fund III, Ltd., a mutual fund managed by Gildea Management
Company, of which Mr. Gildea is the Chairman of the Board of Directors,
Chief Executive Officer, President and sole stockholder. Also includes
5,000 restricted units granted pursuant to the Company's Restricted Unit
Plan for Non-Employee Directors. See footnote 7 to this table. See footnote
13 to 'Principal Stockholders' table.
(7) Includes 5,000 restricted units granted pursuant to the Company's
Restricted Unit Plan for Non-Employee Directors. Pursuant to this plan,
twenty-five percent of the restricted units and related Dividend
Equivalents (as defined in the plan) vest for each year of service as a
Non-Employee Director. Except as otherwise provided in the plan, vested
restricted units are payable when the grantee ceases to be a Director of
the Company.
(8) Includes an aggregate of 22,388 restricted units granted pursuant to the
Company's Restricted Unit Plan, of which 11,194 restricted units vested on
November 15, 1996 and 11,194 restricted units vested on May 15, 1997.
(9) Consists of an aggregate of 11,194 restricted units granted pursuant to the
Company's Restricted Unit Plan, of which 5,597 restricted units vested on
November 15, 1996 and 5,597 restricted units vested on May 15, 1997,
options to purchase 12,000 shares of Common Stock, which options vested on
May 15, 1997, and 9,000 shares of Common Stock held by Mr. Passino's wife
and children. Mr. Passino disclaims any beneficial ownership of the 9,000
shares of Common Stock held by his wife and children.
(10) Includes an aggregate of 11,194 restricted units granted pursuant to the
Company's Restricted Unit Plan, of which 5,597 restricted units vested on
November 15, 1996 and 5,597 restricted units vested on May 15, 1997. Also
includes options to purchase 12,000 shares of Common Stock, which options
vested on May 15, 1997.
(11) Includes an aggregate of 7,463 restricted units granted pursuant to the
Company's Restricted Unit Plan, of which 3,731 restricted units vested on
November 15, 1996 and 3,732 restricted units vested on May 15, 1997. Also
includes options to purchase 6,000 shares of Common Stock, which options
vested on May 15, 1997.
(12) Includes an aggregate of 8,706 restricted units granted pursuant to the
Company's Restricted Unit Plan, of which 4,353 restricted units vested on
November 15, 1996 and 4,353 restricted units vested on May 15, 1997. Also
includes options to purchase 4,500 shares of Common Stock, which options
vested on May 15, 1997.
(13) Consists of an aggregate of 3,000 restricted units granted pursuant to the
Company's Restricted Unit Plan, of which 1,500 restricted units vested on
November 15, 1996 and 1,500 restricted units vested on May 15, 1997.
(14) Includes 9,758,421 shares of Class B Common Stock which may be converted by
the holder thereof at any time and from time to time into a like number of
fully-paid and nonassessable shares of Common Stock, 12,191 restricted
units granted pursuant to the Company's Restricted Unit Plan which have
become vested, 25,000 restricted units granted pursuant to the Company's
Restricted Unit Plan for Non-Employee Directors, which vest according to
the schedule described in footnote 7 above, and options to purchase 6,000
shares of Common Stock.
8
<PAGE>
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
'Exchange Act') requires the Company's Directors, executive officers and owners
of more than ten percent of a registered class of the Company's equity
securities to file initial reports of beneficial ownership and reports of
changes in beneficial ownership of such equity securities with the Securities
and Exchange Commission and the New York Stock Exchange. Pursuant to regulations
promulgated by the SEC, reporting persons must furnish the Company with copies
of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and on written representations that no other
reports were required, during the fiscal year ended December 31, 1997, the
Section 16 reporting persons complied with all Section 16(a) filing requirements
applicable to them.
COMPENSATION OF EXECUTIVE OFFICERS AND KEY EMPLOYEES
The following table summarizes the compensation paid to the Company's Chief
Executive Officer and to its four other most highly compensated executive
officers or key employees (the 'Named Executives') with respect to Fiscal Years
1995, 1996 and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------------------
OTHER ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY $ BONUS $ COMPENSATION $(1)
- ------------------------------- ---- -------- -------- -----------------
<S> <C> <C> <C> <C>
Richard R. Russell............. 1997 400,000 375,000 --
President, Chief Executive 1996 400,000 425,000 --
Officer and Director 1995 350,000 400,000 300,000
Ralph M. Passino............... 1997 250,000 225,000 --
Vice President and 1996 250,000 265,000 --
Chief Financial Officer 1995 235,000 210,000 150,000
James N. Tanis................. 1997 250,000 225,000 --
Vice President and General 1996 250,000 225,000 --
Manager -- Derivative 1995 235,000 185,000 150,000
Products and Services of
General Chemical
DeLyle W. Bloomquist........... 1997 180,000 150,000 --
Vice President and General 1996 140,000 125,000 --
Manager -- Industrial 1995 95,000 50,000 18,000
Chemicals of General
Chemical
Bodo B. Klink.................. 1997 205,000 120,000 --
Vice President, Business 1996 195,000 150,000 --
Development and Services 1995 185,000 120,000 85,000
of General Chemical
<CAPTION>
LONG TERM COMPENSATION
-------------------------------
AWARDS
-------------------- PAYOUTS
RESTRICTED SECURITIES ------- ALL
STOCK UNDERLYING LTIP OTHER
NAME AND PRINCIPAL POSITION AWARDS OPTIONS # PAYOUTS COMPENSATION $(2)
- ------------------------------- ------- ---------- ------- -----------------
<S> <C> <C> <C> <C>
Richard R. Russell............. -- -- -- 46,000
President, Chief Executive -- 400,000 -- 49,000
Officer and Director -- -- -- 39,000
Ralph M. Passino............... -- -- -- 28,000
Vice President and -- 65,000 -- 30,000
Chief Financial Officer -- -- -- 23,000
James N. Tanis................. -- -- -- 28,000
Vice President and General -- 65,000 -- 28,000
Manager -- Derivative -- -- -- 23,000
Products and Services of
General Chemical
DeLyle W. Bloomquist........... -- 10,000 -- 20,000
Vice President and General -- 30,000 -- 16,000
Manager -- Industrial -- -- -- 11,000
Chemicals of General
Chemical
Bodo B. Klink.................. -- 5,000 -- 20,000
Vice President, Business -- 20,000 -- 20,000
Development and Services -- -- -- 15,000
of General Chemical
</TABLE>
- ------------
(1) Amounts shown include dividend awards made pursuant to equity programs in
place prior to the Company's initial public offerings of Common Stock in May
1996 (the 'IPO') (the 'Prior Equity Programs') which vest and are payable
over three years. There were no further awards under these programs
following the IPO.
(2) Amounts listed in this column reflect the Company's contributions to the
Company's Savings and Profit Sharing Plan and Supplemental Savings Plan.
9
<PAGE>
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth stock options granted by the Company to the
Named Executives during fiscal year 1997:
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE PRICE EXPIRATION GRANT DATE
OPTIONS GRANTED TO EMPLOYEES ($/SH) DATE PRESENT VALUE ($)(1)
------------------- --------------- -------------- ---------- --------------------
<S> <C> <C> <C> <C> <C>
DeLyle W. Bloomquist.... 10,000 10% 20.875 3/18/2007 101,000
Bodo B. Klink........... 5,000 5% 20.875 3/18/2007 50,500
</TABLE>
- ------------
(1) The values listed in this column are based on the Black-Scholes pricing
model. The estimated values are based on a number of variables and include
the following assumptions: interest rate of 5.5 percent, stock price
volatility of 41 percent and annualized dividend yield of 0.7 percent. The
estimated values are not intended as a forecast of the future appreciation
in the price of the Company's stock. If the Company's stock does not
increase in value above the exercise price of the stock options, then the
grants described in the table will have no value. There is no assurance that
the value realized by an executive will be at or near the value estimated by
the Black-Scholes model or any other model applied to the stock options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table includes information for each Named Executive with
regard to the aggregate number of stock options held on December 31, 1997. No
stock options were exercised by Named Executives in 1997.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN- THE- MONEY
UNEXERCISED OPTIONS AT OPTIONS AT
DECEMBER 31, 1997 (#) DECEMBER 31, 1997 ($)(1)
SHARES ACQUIRED VALUE ---------------------------- ----------------------------
ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard R. Russell....... -- -- -- 400,000 -- 3,700,000
Ralph M. Passino......... -- -- 12,000 53,000 111,000 490,250
James N. Tanis........... -- -- 12,000 53,000 111,000 490,250
DeLyle W. Bloomquist..... -- -- 4,500 35,500 41,600 294,600
Bodo B. Klink............ -- -- 6,000 19,000 55,500 158,875
</TABLE>
- ------------
(1) Market value of underlying securities at December 31, 1997 of $26.75 minus
the exercise price.
PENSION PLANS
The General Chemical Corporation Salaried Employee's Pension Plan (the
'Pension Plan') is a defined benefit plan that generally benefits full-time,
salaried employees. A participating employee's annual retirement benefit is
determined by the employee's credited service under the Pension Plan and average
annual earnings during the five years of the final ten years of service credited
under the Pension Plan for which such employees' earnings were highest. Annual
earnings include principally salary, overtime and short-term incentive
compensation. The Pension Plan provides that a participating employee's right to
receive benefits under the Pension Plan becomes fully vested after five years of
service. Under the Pension Plan, benefits are adjusted by a portion of the
social security benefits received by participants.
In addition, the Named Executives participate in an unfunded nonqualifed
excess benefit plan which pays benefits which would otherwise accrue in
accordance with the provisions of the Pension
10
<PAGE>
<PAGE>
Plan, but which are not payable under the Pension Plan by reason of certain
benefit limitations imposed by the Internal Revenue Code of 1986, as amended,
(the 'Code').
The table below indicates the estimated maximum annual retirement benefit a
hypothetical participant would be entitled to receive under the Pension Plan and
the excess benefit plan (without regard to benefit limitations imposed by the
Code) before any deduction for social security benefits if the retirement
occurred December 31, 1997, at the age of 65, after the indicated number of
years of credited service and if average annual earnings equaled the amounts
indicated.
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE(2)
--------------------------------------------------------
AVERAGE ANNUAL EARNINGS(1) 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ----------------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 200,000........................................... $ 60,000 $ 80,000 $100,000 $100,000 $105,000
250,000........................................... 75,000 100,000 125,000 125,000 131,250
300,000........................................... 90,000 120,000 150,000 150,000 157,500
400,000........................................... 120,000 160,000 200,000 200,000 210,000
500,000........................................... 150,000 200,000 250,000 250,000 262,500
600,000........................................... 180,000 240,000 300,000 300,000 315,000
700,000........................................... 210,000 280,000 350,000 350,000 367,500
800,000........................................... 240,000 320,000 400,000 400,000 420,000
900,000........................................... 270,000 360,000 450,000 450,000 472,500
1,000,000........................................... 300,000 400,000 500,000 500,000 525,000
</TABLE>
- ------------
(1) Compensation qualifying as annual earnings under the Pension Plan
approximate the amounts set forth as Salary and Bonus in the Summary
Compensation table for the individuals listed on such table.
(2) The number of years of credited service under the Pension Plan for Messrs.
Russell, Passino, Tanis, Bloomquist and Klink is approximately 21, 18, 10, 9
and 23, respectively.
11
<PAGE>
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
The overall objectives of the Company's compensation programs are to
attract, motivate and retain the most qualified and talented executives and to
provide the incentive for these executives to achieve the Company's business
objectives and to create an alignment of the interests of the stockholders and
those of the executives. To achieve these objectives, the Company has developed
compensation plans that tie a substantial portion of an executive's compensation
to the Company's performance as well as to the price of the Company's stock.
The principal components of the Company's executive compensation program
consists of fixed compensation in the form of base salary, variable compensation
in the form of annual incentive compensation and long-term compensation in the
form of stock options and other equity-based compensation awards.
Base Salaries. The initial base salaries for executive officers are
determined by the Compensation Committee based on its evaluation of the
responsibilities of the position held by the executive, their business
experience, past performance and anticipated contributions to the Company's
future success.
Salary adjustments are based on a periodic evaluation of the performance of
the Company and of each executive officer. The Compensation Committee will take
into consideration in the case of each executive officer the scope of their
responsibilities, time commitments, financial results, product quality
improvements, regulatory compliance, new business development and any other
applicable factors. Mr. Russell's base salary was not increased during 1997.
Annual Incentive Compensation. Pursuant to the terms of the Company's
Performance Plan, annual and other periodic incentive compensation becomes
payable to the extent that performance objectives specified by the Compensation
Committee are achieved. The performance objectives may be based upon either
Company-wide or operating unit performance in the following areas: earnings per
share, revenues, operating cash flow, operating earnings, working capital to
sales ratio and return on capital.
In 1997, the Compensation Committee made annual incentive compensation
awards to executive officers based on achievement of certain net income and
earnings per share objectives. Mr. Russell was awarded annual incentive
compensation for 1997 of $375,000 which amount was less than the amount
otherwise payable pursuant to the performance criteria established under the
Company's Performance Plan.
Long-Term Incentive Compensation. Long-term compensation awards to
executive officers consist of stock options, restricted stock, unrestricted
stock, performance share awards and stock appreciation rights. During 1996, the
Company granted stock options at the IPO price to executive officers in
connection with the Company's IPO.
During 1997, the Company granted an aggregate of 30,000 options to purchase
shares of Common Stock and an aggregate of 15,000 restricted units to certain of
the Company's executive officers. Generally, such options and restricted units,
as applicable, vest on a certain date or pursuant to a vesting schedule,
subject, in certain cases, to acceleration based upon the attainment of certain
predetermined performance-related thresholds.
Compliance with Section 162(m). The Compensation Committee believes that,
unless circumstances warrant an exception, the Company should only pay
compensation to its executive officers in excess of $1 million if such excess
amount is performance-based compensation exempt from the limit on deductibility
of such compensation under Section 162(m) of the Code.
The Compensation Committee
of the Board of Directors
PHILIP E. BEEKMAN, Chairman
PAUL M. MEISTER
SCOTT M. SPERLING
12
<PAGE>
<PAGE>
PERFORMANCE COMPARISON
The following graph illustrates the return that would have been realized
(assuming reinvestment of dividends) by an investor who invested $100 on May 15,
1996 (the date of the Company's initial public offering of Common Stock) in each
of (i) The General Chemical Group Inc. Common Stock (ii) the Standard & Poor's
500 Index and (iii) the Standard & Poor's Chemical Composite Index.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG THE GENERAL CHEMICAL GROUP INC. COMMON STOCK,
THE STANDARD & POOR'S 500 INDEX AND THE STANDARD & POOR'S CHEMICAL
COMPOSITE INDEX
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
5/15/96 12/31/96 12/31/97
------- -------- --------
<S> <C> <C> <C>
The General Chemical Group Inc. $ 100.0 $135.9 $155.0
Standard & Poor's 500 Index $ 100.0 $112.9 $150.6
Standard & Poor's Chemical Composite Index $ 100.0 $108.3 $131.8
</TABLE>
Assumes $100 Invested On May 15, 1996
Assumes Dividend Reinvested
13
<PAGE>
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Messrs. Montrone and Meister are Managing Directors of Latona Associates
Inc. (the 'Management Company') a management company controlled by Mr. Montrone.
On January 1, 1995, the Company entered into an agreement with the Management
Company to provide the Company with strategic guidance and advice related to
financing, security offerings, recapitalizations and restructurings, tax,
corporate secretarial, employee benefit services, acquisitions and business
combinations designed to enhance the long-term growth prospects and value of the
Company and other administrative services as well as to provide advice regarding
the Company's automotive business.
Under its agreement with the Management Company, the Company agreed to pay
the Management Company an annual fee of $5.6 million, payable quarterly in
advance, adjusted annually after 1995 for increases in the U.S. Department of
Labor, Bureau of Labor Statistics, Consumer Price Index. In accordance with this
agreement, the Company paid the Management Company a fee of $5.8 million in
1997. In addition, in connection with any acquisition or business combination
with respect to which the Management Company advises the Company, the Company
has agreed to pay the Management Company additional fees comparable to those
received by investment banking firms for such services (subject to the approval
of a majority of the independent directors of the Company). The agreement
extends through December 31, 2004. The agreement may be terminated by either
party if the other party ceases, or threatens to cease, to carry on its
business, or commits a material breach of the agreement which is not remedied
within 30 days of notice of such breach. The agreement may also be terminated by
the Company if Mr. Montrone ceases to hold, directly or indirectly, shares of
the Company's capital stock constituting at least 20 percent of the total of all
shares of Common Stock and Class B Common Stock then issued and outstanding. The
terms of the agreement between the Company and the Management Company were not
the result of arm's length negotiations. The Company has adopted a policy that
any amendment to, waiver of, extension of or other change in the terms of the
agreement with the Management Company, as well as any transactions perceived to
involve potential conflicts of interest, will require the approval of a majority
of the independent directors of the Company.
The Company is party to a registration rights agreement with Mr. Gildea and
Network and certain other stockholders of the Company with respect to the
registration for resale under the Securities Act of 1933, as revised, of certain
shares of Common Stock held by them.
14
<PAGE>
<PAGE>
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee of the Board, the Board has
appointed Deloitte & Touche LLP as the Company's independent auditors for the
1998 fiscal year and hereby requests that the stockholders ratify such
appointment.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT
AUDITORS.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting with the opportunity to make such statements as they desire. They
will also be available to respond to appropriate questions from stockholders.
SUBMISSION OF PROPOSALS FOR 1999 ANNUAL MEETING
In order to be considered for inclusion in the Company's proxy statement
and form of proxy statement, stockholder proposals intended to be presented at
the Company's 1999 annual meeting of stockholders must be received by the
Company on or before December 8, 1998. The Company's By-Laws provide that any
stockholder of record wishing to nominate candidates for election as Directors
or to have a stockholder proposal considered at the annual meeting must provide
written notice of such proposal and appropriate supporting documentation, as set
forth in the By-Laws, to the Company at its principal executive office, not less
than 75 days nor more than 120 days prior to the anniversary date of the
immediately preceding annual meeting. In the event, however, that the annual
meeting is scheduled to be held more than 30 days before such anniversary date
or more than 60 days after such anniversary date, notice shall be timely if
delivered to, or mailed to and received by, the Company at its principal
executive office not later than the close of business on the later of (A) the
75th day prior to the scheduled date of such annual meeting, or (B) the 15th day
following the day on which public announcement of the date of such annual
meeting is first made by the Company. Any such proposal should be directed to
the attention of the Secretary, The General Chemical Group Inc., Liberty Lane,
Hampton, New Hampshire 03842.
EXPENSES OF SOLICITATION
The Company will pay the entire expense of soliciting proxies for the
Annual Meeting. In addition to solicitations by mail, certain Directors,
officers and regular employees of the Company (who will receive no compensation
for their services other than their regular compensation) may solicit proxies by
telephone, telegram or personal interview. Banks, brokerage houses, custodians,
nominees and other fiduciaries have been requested to forward proxy materials to
the beneficial owners of shares held of record by them and such custodians will
be reimbursed for their expenses.
15
<PAGE>
<PAGE>
ANNUAL REPORT
The Annual Report to Stockholders of the Company for the year ended
December 31, 1997 and this proxy statement are being mailed together to all
stockholders of the Company of record on April 6, 1998, the record date for
voting at the Annual Meeting. The Annual Report, however, is not part of the
proxy solicitation material.
By Order of the Board of Directors,
April 7, 1998
THE COMPANY'S 1997 ANNUAL REPORT ON FORM 10-K, FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION, IS AVAILABLE WITHOUT CHARGE BY WRITTEN REQUEST FROM THE
OFFICE OF THE SECRETARY, LIBERTY LANE, HAMPTON, NH 03842.
ADDITIONAL INFORMATION ABOUT THE COMPANY CAN BE FOUND AT OUR INTERNET SITE:
HTTP://WWW.GENCHEM.COM.
16
<PAGE>
<PAGE>
APPENDIX 1
PROXY CARD
THE GENERAL CHEMICAL GROUP INC.
ANNUAL MEETING, MAY 12, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Messrs. Paul M. Montrone, Pual M. Meister, Richard R. Russell and Todd M.
DuChene, each with power of substitution, are hereby authorized to vote all
shares of common stock of The General Chemical Group Inc., which the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Stockholders of The General Chemical Group Inc. to be held on Tuesday, May 12,
1998, and at any adjournments, as specified on the reverse side.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS.
(PLEASE MARK THIS PROXY AND SIGN AND DATE IT ON THE
REVERSE SIDE HEREON AND RETURN IT IN THE ENCLOSED ENVELOPE.)
FOLD AND DETACH HERE
<PAGE>
<PAGE>
A VOTE FOR PROPOSALS 1 AND 2 IS RECOMMENDED BY THE BOARD OF DIRECTORS.
1. ELECTION OF DIRECTORS WITH TERMS EXPIRING AT THE ANNUAL MEETING IN 1999.
<TABLE>
<S> <C> <C>
FOR EACH WITHHOLD AUTHORITY Nominees: Paul M. Montrone, Philip E. Beekman, John W. Gildea,
NOMINEE TO VOTE FOR EACH Gerald J. Lewis, Paul M. Meister, Richard R. Russell,
LISTED. NOMINEE LISTED. Scott M. Sperling and Ira Stepanian
[ ] [ ]
(Instructions: To withhold authority to vote for any individual nominee,
write the nominee's name on the space provided below)
-----------------------------------------------------------------------------------------------
</TABLE>
2. Ratify the appointment of Deloitte &
Touche as independent auditors of the
Company for the current fiscal year.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. IN THEIR DISCRETION, ON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
A MAJORITY (OR IF ONLY ONE, THEN THAT ONE) OF THE ABOVE
PERSONS OR THEIR SUBSTITUTES WHO SHALL BE PRESENT AND
ACTING AT THE MEETING SHALL HAVE THE POWERS CONFERRED
HEREBY.
DATED: ____________________________, 1998
_________________________________________
_________________________________________
Signature of Stockholder(s) -- please sign name exactly as imprinted
(do not print). Please indicate any change of address.
Note: Executors, administrators, trustees and others signing in a
representative capacity should indicate the capacity in which they sign.
If shares are held jointly, each holder should sign.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY.
FOLD AND DETACH HERE
