SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the fiscal year ended December 31, 2001
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ____ to______
Commission file number 33-75622
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
SAVINGS PLAN FOR THE EMPLOYEES
OF ALBEMARLE CORPORATION
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
Albemarle Corporation
330 South Fourth Street
P.O. Box 1335
Richmond, Virginia 23210
REQUIRED INFORMATION
See Appendix I.
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
SAVINGS PLAN FOR THE EMPLOYEES OF
ALBEMARLE CORPORATION
BY: s/ Charles B. Walker
Charles B. Walker
Chairman of the Savings Plan
Committee
Dated: June 21, 2002
Appendix I
SAVINGS PLAN FOR THE EMPLOYEES OF
ALBEMARLE CORPORATION
ANNUAL REPORT
DECEMBER 31, 2001 AND 2000
Page 1
SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION
INDEX OF FINANCIAL STATEMENTS AND SCHEDULE
Page(s)
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Benefits
at December 31, 2001 and 2000 3
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 2001 4
Notes to Financial Statements 5-11
Supplemental Schedule: *
Schedule of Assets (Held at End of Year) 12
* Other schedules required by 29 CFR 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 ("ERISA") have been
omitted because they are not applicable.
Page 2
Report of Independent Accountants
To the Administrator of the Savings Plan for the Employees of Albemarle
Corporation:
In our opinion, the accompanying statements of net assets available for
benefits and the related statement of changes in net assets available for
benefits present fairly, in all material respects, the net assets
available for benefits of the Savings Plan for the Employees of Albemarle
Corporation (the "Plan") at December 31, 2001 and 2000, and the changes
in net assets available for benefits for the year ended December 31, 2001
in conformity with accounting principles generally accepted in the United
States of America. These financial statements are the responsibility of
the Plan's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits
of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule of
assets (held at end of year) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but
is supplementary information required by the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has
been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as
a whole.
May 31, 2002
Page 3
SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2001 and 2000
(in US dollars)
2001 2000
------------------------------------------------ -----------------------------------------------
Participant Nonparticipant Participant Nonparticipant
Directed Directed Total Directed Directed Total
Assets:
Cash - interest bearing $ 136,438 $ - $ 136,438 $ 932,089 $ 25,852 $ 957,941
Investments at fair value
(see Note 3) 181,244,470 50,110,073 231,354,543 190,924,441 48,964,743 239,889,184
Receivables:
Employer contributions - 27,714 27,714 - 29,629 29,629
Employee contributions 63,420 - 63,420 67,988 - 67,988
Dividends and interest 72,627 - 72,627 58,398 - 58,398
Other - - - 13,668 - 13,668
-------------- ------------- --------------- ------------- ------------- ---------------
Net assets available for benefits $181,516,955 $50,137,787 $231,654,742 $191,996,584 $49,020,224 $241,016,808
-------------- -------------- -------------- ------------- ------------- ---------------
<FN>
The accompanying notes are an integral part of the financial statements.
</FN>
Page 4
SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the year ended December 31, 2001
(in US dollars)
Participant Nonparticipant
Directed Directed Total
Additions:
Dividends and interest $ 4,934,480 $ 1,032,803 $ 5,967,283
Employee contributions (see Note 2) 12,392,293 - 12,392,293
Employer contributions, net (see Note 2) - 5,283,215 5,283,215
Net depreciation in fair value of investments
(see Note 3) (15,980,892) (1,190,885) (17,171,777)
----------------- ---------------- ----------------
Total additions 1,345,881 5,125,133 6,471,014
----------------- ---------------- ----------------
Deductions:
Benefit payments 13,813,748 2,001,032 15,814,780
Administrative expenses 8,337 - 8,337
Other 9,963 - 9,963
----------------- ---------------- ----------------
Total deductions 13,832,048 2,001,032 15,833,080
----------------- ---------------- ----------------
Net (decrease) increase (12,486,167) 3,124,101 (9,362,066)
Transfers 2,006,538 (2,006,538) -
Net assets available for benefits, beginning of year 191,996,584 49,020,224 241,016,808
----------------- ---------------- ----------------
Net assets available for benefits, end
of year $ 181,516,955 $ 50,137,787 $231,654,742
----------------- ---------------- ----------------
<FN>
The accompanying notes are an integral part of the financial statements.
</FN>
Page 5
SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
General:
--------
The accompanying financial statements of the Savings Plan For The
Employees Of Albemarle Corporation (the "Plan") have been prepared in
conformity with accounting principles generally accepted in the United
States of America.
Accounting Estimates:
---------------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
the Plan to make significant estimates and assumptions that affect the
reported amounts of assets as of the date of the financial statements and
the reported amounts of changes in assets available for benefits during
the reporting periods. Actual results could differ from those estimates.
Risks and Uncertainties:
------------------------
The Plan provides for various mutual fund investment options in stocks,
bonds and fixed income securities. Investments are exposed to various
risks, such as interest rate, market and credit. Due to the level of risk
associated with certain investment securities and the level of
uncertainty related to changes in the value of investment securities, it
is at least reasonably possible that changes in risks in the near term
would materially affect participants' account balances and the amounts
reported in the statements of assets available for benefits and the
statement of changes in assets available for benefits.
Page 6
SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
Securities Valuation:
---------------------
Investments are stated at values determined as follows:
Common stocks - fair value based on the last
published sale price on the New
York Stock Exchange
Mutual funds and Equity Index Trust - net asset value of shares or
units held by the Plan at year-
end based on the quoted
market value of the underlying
assets
Retirement Preservation Trust - net asset value of units held
by the Plan at year-end, with
the underlying assets valued as
follows: investments in
Guaranteed Insurance Contracts
("GIC's") and Bank Investment
Contracts ("BIC's") with
benefit responsive features are
carried at cost plus accrued
interest ("contract value") and
money market instruments and US
Government agency obligations
are valued at amortized cost
Loans to participants - balances due at cost which
approximate fair value
Securities Transactions and Related Investment Income:
------------------------------------------------------
Securities transactions are accounted for on a trade-date basis and
dividend income is recorded on the ex-dividend date. Interest income is
recorded as earned. The Plan presents in the statement of changes in net
assets available for benefits the "net appreciation (depreciation) in
fair value of investments" which consists of realized gains and losses
and changes in the unrealized appreciation (depreciation) on those
investments. Investment income is allocated to participant accounts in
proportion to the participant's account balance.
2. DESCRIPTION OF PLAN:
a. General:
--------
The Plan is a defined contribution plan. It is subject to the provisions
of the Employee Retirement Income Security Act of 1974. Merrill Lynch
serves as the Plan's trustee. Information regarding Plan benefits,
priority of distributions upon termination of the Plan, and vesting is
provided in the Plan agreement which is available at the main office of
the Plan administrator at 451 Florida Street, Baton Rouge, Louisiana
70801.
Page 7
SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
2. DESCRIPTION OF PLAN, CONTINUED:
b. Contributions:
--------------
Participants in the Plan make pre-tax and/or after-tax contributions as
defined in the Plan document limited to a percentage of their base
salaries. Albemarle Corporation ("Albemarle" or the "Company")
contributes 50% of the first 10% of base salary that a participant
contributes to the Plan. Contributions made by Albemarle are invested in
the Albemarle Corporation Common Stock Fund which contains both
participant and nonparticipant directed balances. Participants may also
contribute amounts representing distributions from other qualified
defined benefit or defined contribution plans. The Plan allows non-highly
compensated participants, as defined by the Plan document, to make a
pre-tax or after-tax election contribution ranging from a minimum of one
percent (1%) to a maximum of fifteen percent (15%).
c. Vesting:
--------
Participant contributions are 100% vested at all times. In the event
employment is terminated as a result of attaining normal retirement age,
electing retirement under the terms of the Company's defined benefit
pension plan, total and permanent disability, or death, or in the event
the Plan is terminated, participants will have a 100% vested interest in
that portion of their account which represents employer contributions. If
termination of employment is the result of other reasons, vesting in
employer contributions is based on years of service, as follows: 60% for
three years of service, 80% for four years of service, and 100% for five
or more years of service.
d. Investment options:
--------------------
The Plan consists of eleven active funds and two inactive funds. The
active funds are as follows:
o Albemarle Corporation Common Stock Fund, invested in common stock of
Albemarle.
o Merrill Lynch Retirement Preservation Trust, a collective trust
maintained by Merrill Lynch Trust Company of America and invested
primarily in a broadly diversified portfolio of GIC's and BIC's,
synthetic GIC's and separate accounts in obligations of U.S. government
and U.S. government agency securities, and in high-quality money market
securities.
o PIMCO Total Return Fund, invested in shares of a registered investment
company that invests in a diversified portfolio of fixed income
securities of varying maturities, including some high-yield and foreign
fixed income securities.
o Merrill Lynch Balanced Capital Fund, Inc., invested in shares of a
registered investment company that invests in domestic and/or foreign
equity, debt, and convertible securities.
o Merrill Lynch Equity Index Trust I, a collective trust maintained by
Merrill Lynch Trust Company of America indexed to the S&P 500 Index and
invested in a portfolio of equity securities designed to substantially
match the S&P 500 index.
Page 8
SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
2. DESCRIPTION OF PLAN, CONTINUED:
o Davis New York Venture Fund, Inc. invested in shares of a registered
investment company that invests primarily in common stocks or convertible
securities of companies with a market capitalization of at least $5
billion.
o Alliance Premier Growth Fund, invested in shares of a registered
investment company that invests primarily in equity securities of a
limited number of carefully selected, large capitalization companies.
o Franklin Small - Mid Cap Growth Fund, invested in shares of a
registered investment company that invests at least 65% of its total
assets in equity securities of small-capitalization growth companies
seeking to invest at least one-third of its total assets in companies
with market capitalizations of $550 million or less. Up to 35% of the
total assets in the Fund are invested in equity securities of
large-capitalization companies which Fund management believes have
stronger growth potential.
o Ivy International Fund, invested in shares of a registered investment
company that invests primarily in equity securities traded in European,
Pacific Basin and Latin American markets.
o Oppenheimer International Growth Fund, invested in shares of a
registered investment company that invests primarily in common stocks of
growth companies that are domiciled outside the United States or have
their primary operations outside the U.S.
o Oppenheimer Capital Appreciation Fund, invested in shares of a
registered investment company that invests primarily in common stocks of
growth companies, mainly mid - and large - capitalization companies.
Inactive funds are the Tredegar Corporation Common Stock Fund, which
holds investments in common stock of Tredegar Corporation, and the Ethyl
Corporation Common Stock Fund, which hold investments in common stock of
Ethyl Corporation.
Participants currently in the Plan may select a program for investment in
any of the eleven active funds, or in any combination thereof.
Participants may not contribute to the two inactive funds nor transfer
funds from other options into those funds; however, dividends earned are
reinvested in the inactive funds. Transfers may be made between active
funds and out of the inactive funds. In addition, participants have a
one-time election to transfer the nonparticipant-directed portion from
the Albemarle Corporation Common Stock fund to other active funds during
the course of their employment.
e. Participant loans:
------------------
Participants may borrow from their fund accounts a minimum of $1,000 up
to a maximum equal to the lesser of $50,000 or 50 percent of their
account balance. Loan transactions are treated as a transfer to (from)
the investment fund from (to) the Loan fund. Loan terms range from 1-5
years. The loans are collateralized by the balance in the participant's
account and bear interest at a rate of prime plus one percent on the last
day of the quarter. The interest rate as of December 31, 2001 and 2000,
was 5.75% and 10.5%, respectively. Principal and interest is paid ratably
through payroll deductions.
Page 9
SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
2. DESCRIPTION OF PLAN, CONTINUED:
f. Payment of benefits:
--------------------
Benefits are recorded when paid. Employees become fully vested in the
Company's matching contribution after completing five years of service.
Employees are considered partially vested if they have completed from
three to five years of service. Employees may decide whether benefits
will be received directly in the form of a lump sum or rolled over to an
individual IRA account or to another qualified plan.
g. Forfeitures:
------------
Employees who leave Albemarle before becoming fully vested in Albemarle
contributions forfeit the value of their nonvested account. Forfeitures
during a plan year serve to reduce required Company contributions. For
the year ended December 31, 2001, $33,794 of forfeitures was used to
reduce required Company contributions and $59,574 of forfeitures became
available and will be used as a reduction of required Company
contributions for the 2002 plan year.
3. INVESTMENTS:
The following table presents investments held at year-end that represent
five percent (5%) or more of net assets available for benefits:
2001 2000
------------------------------
Albemarle Corporation common stock $88,657,265* $92,884,564*
Merrill Lynch Equity Index Trust I 38,953,547 46,113,670
Franklin Small - Mid Cap Growth Fund 13,884,742 14,973,403
Merrill Lynch Retirement Preservation Trust 41,396,845 35,676,432
* Nonparticipant-directed investments total $50,110,073 and $48,964,743
for 2001 and 2000, respectively.
Page 10
SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
3. INVESTMENTS, CONTINUED:
During 2001, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) depreciated
in value by $17,171,777 as follows:
Common stock ($2,834,515)
Mutual funds ( 8,902,821)
Common / collective trusts ( 5,434,441)
-------------
($17,171,777)
-------------
4. FEDERAL INCOME TAXES:
The Internal Revenue Service advised the plan administrator on July 10,
1995, that the Plan constitutes a qualified trust under Section 401 of
the Internal Revenue Code (the "Code") and is therefore exempt from
federal income taxes. The Plan has been amended since July 10, 1995, and
was restated effective January 1, 2001. A new tax determination letter
was applied for on February 27, 2002. Currently the U.S. Treasury
Department has not reviewed these new amendments. However, the plan
administrator and the Plan's legal counsel believe that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Code. Until such time as participants withdraw all or
part of their accumulated account balance, their invested funds are not
subject to federal income taxes for contributions made by them and on
their behalf by Albemarle or for investment income received on such
investments.
5. ADMINISTRATION EXPENSES:
Expenses of the Trustee in administering the Plan are paid from Plan
assets, while certain recordkeeping fees and other administrative charges
are borne by Albemarle.
6. PLAN TERMINATION:
Although Albemarle has not expressed any intent to do so, it has the
right under the Plan to discontinue its contributions at any time and
terminate the Plan subject to the provisions of the Employee Retirement
Income Security Act of 1974. In the event of Plan termination,
participants will become 100% vested in the Company's matching account
balances and the assets of the Plan shall be allocated to participants in
proportion to their account balances as of the effective date of
termination.
7. RELATED PARTY TRANSACTIONS:
Certain Plan investments are shares of mutual funds managed by Merrill
Lynch, the trustee of the Plan. Participants have the option of investing
in Albemarle common stock. Purchases of 505,757 shares of Company common
stock totaled $11,073,043 for the year ended December 31, 2001.
Distributions made in and sales of 514,881 shares of Company common stock
totaled $12,713,727 for the year ended December 31, 2001.
Page 11
SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
8. UNALLOCATED ASSETS:
Unallocated assets at December 31, 2001 and 2000 were $208,711 and
$296,018, respectively. Unallocated assets include forfeitures, fee and
conversion amounts from the previous record-keeper, interest and
dividends receivable and cash held in money market funds.
9. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
The following is a reconciliation of net assets available for benefits
per the financial statements at December 31, 2001 to Form 5500:
Net assets available for benefits
per the financial statements $231,654,742
Amounts allocated to withdrawing participants ($44,160)
--------------
Net assets available for benefits per the Form 5500 $231,610,582
--------------
10. SUBSEQUENT EVENTS:
Effective December 14, 2001, the Albemarle Corporation common stock held
in the Plan was designated as an Employee Stock Ownership Plan (the
"ESOP"). As a result, effective in 2002, participants may elect to have
cash dividends paid on stock held by the ESOP and allocated to the
participants' accounts distributed directly to them or reinvested. In
addition, a diversification election has been added to the ESOP.
Notwithstanding the one-time election already allowed, beginning in 2002,
participants who are between age 55 and age 60 and have at least 10 years
of service with Albemarle may elect to diversify up to 25% of the value
of the shares purchased through Albemarle's matching contributions. When
participants reach age 60 and have at least 10 years of service with
Albemarle, they may diversify up to 50% of the value of the shares
purchased through Albemarle's matching contributions. The amount of
Albemarle common stock that may be diversified will be determined as of
the last day of the preceding Plan year and is based on the value of the
nonparticipant-directed portion of Albemarle common stock held in the
participant's account increased by the value of previous
diversifications, multiplied by 25% (50% if the participant is over age
60), and then offset by the amount of any diversification elections made
previously.
Effective January 1, 2002, vesting in employer contributions is as
follows: 20% for two years of service, 60% for three years of service,
80% for four years of service and 100% for five or more years of service.
Page 12
SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2001
(a) (b) (c) (d) (e)
Identity Description Cost of Current
Each Item Value*
- --- ------------------------- ------------------------------------------------------------------ --------------- ----------------
** Merrill Lynch Retirement Collective trust invested in GIC's, BIC's, obligations of U.S. $ - $ 41,396,845
Preservation Trust Government agencies and high quality money market securities
PIMCO Total Return Fund Mutual fund that invests in fixed income securities - 7,577,040
** Merrill Lynch Balanced Mutual fund that invests in equity, debt and convertible securities - 8,622,391
Capital Fund, Inc.
** Merrill Lynch Equity Collective trust indexed to the S&P 500 Index - 38,953,547
Index Trust I
Davis New York Venture Mutual fund that invests in companies with at least $5 billion - 6,711,231
Fund, Inc. in market capitalization
Alliance Premier Growth Mutual fund that invests in selected equity securities of large - 8,267,705
Fund capitalized companies
Franklin Small - Mid Cap Mutual fund that invests in companies with $550 million or less - 13,884,742
Growth Fund in market capitalization
Ivy International Fund Mutual fund that invests in international equity securities - 966,678
Oppenheimer Capital Mutual fund that invests in selected equity securities of growth - 2,269,763
Appreciation Fund companies
Oppenheimer International Mutual fund that invests in selected equity securities of growth - 1,016,565
Growth Fund companies domiciled outside the U.S.
** Albemarle Corporation $.01 par value, 3,694,053 shares 61,397,468 88,657,265
common stock
Ethyl Corporation $1.00 par value, 1,837,339 shares - 1,690,351
common stock
Tredegar Corporation No par value, 425,688 shares - 8,088,078
common stock
** Participant loans Terms from 1-5 years with interest rates from 7.0% to 10.5% - 3,252,342
---------------
Total plan investments $ 231,354,543
<FN>
* See Note 1 of Notes to Financial Statements
** Denotes a party-in-interest to the Plan.
</FN>
Page 13
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (Files No. 33-75622 and 333-83237) of Albemarle
Corporation of our report dated May 31, 2002 relating to the financial
statements of the Savings Plan for the Employees of Albemarle Corporation, which
appears in this Form 11-K.
PricewaterhouseCoopers LLP
Richmond, Virginia
June 21, 2002