PRELIMINARY COPY
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Ethyl Corporation
(Name of Registrant as Specified in Its Charter)
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PRELIMINARY COPY
March 16, 1995
To the Shareholders:
Enclosed is our annual report describing Ethyl's operations
during the past year. You are encouraged to read this report, which
summarizes major corporate developments during the year.
You are cordially invited 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
Thursday, April 13, 1995, 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, approve an amendment
to the Corporation's Restated Articles of Incorporation to eliminate
one class of preferred stock and redesignate the remaining class, and
approve the designation of auditors for the coming year. You also
will be asked to vote on a shareholder proposal regarding the
composition of the Corporation's Board of Directors.
Please read the notice and proxy statement carefully, complete
the proxy form and mail it promptly.
Sincerely yours,
Bruce C. Gottwald
Chairman of the Board
Chief Executive Officer
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of the holders of
shares of Common Stock of Ethyl Corporation (the "Corporation") will
be held in the restored gun foundry building of the Tredegar Iron
Works, 500 Tredegar Street, Richmond, Virginia, on Thursday, April 13,
1995, 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 amend the Corporation's Restated Articles of
Incorporation to eliminate one class of preferred stock and
redesignate the remaining class;
3. To approve the designation by the Board of Directors of
Coopers & Lybrand L.L.P. as auditors for the fiscal year
ending December 31, 1995;
4. To vote upon a shareholder proposal regarding the
composition of the Corporation's Board of Directors; and
5. To transact such other business as may properly come before
the meeting.
Holders of shares of Ethyl Common Stock of record at the close of
business on February 24, 1995, 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 16, 1995
PROXY STATEMENT
for
ANNUAL MEETING OF SHAREHOLDERS
ETHYL CORPORATION
To be held April 13, 1995
Approximate date of mailing March 16, 1995
Proxies in the form enclosed are solicited by the Board of
Directors for the Annual Meeting of Shareholders to be held on
Thursday, April 13, 1995. 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 February 24, 1995, the date for determining shareholders
entitled to vote at the meeting, there were outstanding 118,434,401
shares of Ethyl Common Stock. Each share of Ethyl 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 Ethyl
Common Stock voted in the election of directors. Votes that are
withheld and shares held in street name ("Broker Shares") 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 approval of the
proposed amendments to the Restated Articles of Incorporation requires
the affirmative vote of the holders of a majority of the outstanding
shares of Ethyl Common Stock. Abstentions and Broker Shares that are
not voted on the matter will have the same effect as a negative vote.
The approval of the shareholder proposal requires that the votes cast
by the holders of Ethyl Common Stock in favor of the matter exceed the
votes cast opposing the matter. Abstentions and Broker Shares that
are not voted on the matter will not be included in determining the
number of votes cast in favor or in opposition of the matter.
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. The Corporation
will pay that firm $7,000 for its services and reimburse its out-of-
pocket expenses.
The Corporation's address is 330 South Fourth Street, Richmond,
Virginia 23219.
1
ELECTION OF DIRECTORS
Proxies will be voted for the election as directors for the
ensuing year of the persons named below (or if for any reason
unavailable, of such substitutes as the Board of Directors may
designate). The Board of Directors has no reason to believe that any
of the nominees will be unavailable.
Lloyd B. Andrew; age 71; director since 1984; retired, former
Executive Vice President and Chief Financial Officer of the
Corporation (1984-1989). Other directorship: Albemarle
Corporation.
William W. Berry; age 62; director since 1983; retired, former
Chairman of the Board of Dominion Resources, Inc. (holding
company for Virginia Electric and Power Company) (1986-1992);
retired Chairman of the Board of Virginia Power Company (public
utility) (1986-1992). Other directorships: Albemarle
Corporation, Scott & Stringfellow Financial Corp. and Universal
Corporation.
Phyllis L. Cothran; age 48; director since February 23, 1995;
President and Chief Operating Officer of Trigon Blue Cross Blue
Shield since 1990. Other directorships: Tredegar Industries,
Inc. and Central Fidelity Bank.
Allen C. Goolsby; age 55, director since 1994; Partner, Hunton &
Williams (attorneys). Other directorships: First Colony
Corporation and Noland Company.
Bruce C. Gottwald; age 61; director since 1962; Chairman of the Board,
Chairman of the Executive Committee and Chief Executive Officer
since March 1, 1994, having served as President, Chief Executive
Officer and Chief Operating Officer of the Corporation from April
23, 1992, and having previously served as President and Chief
Operating Officer of the Corporation. Other directorships:
Albemarle Corporation, CSX Corporation, First Colony Corporation,
James River Corporation and Tredegar Industries, Inc.
Bruce C. Gottwald, Jr.; age 37; director since 1992; Chairman of the
Board and Chief Executive Officer of First Colony Corporation
since October 8, 1992; Vice President and Treasurer of the
Corporation from February 27, 1992 to July 1, 1993, having served
as Treasurer (August 1, 1989 - February 26, 1992), Assistant
Corporate Controller (April 1, 1989 - July 31, 1989) and
Assistant Treasurer (August 1, 1988 - March 31, 1989) of the
Corporation prior thereto. Other directorships: Albemarle
Corporation, First Colony Corporation, Signet Banking Corporation
and Paragon Portfolio.
2
Floyd D. Gottwald, Jr.; age 72; director since 1956; Chairman of the
Board and Chief Executive Officer of Albemarle Corporation since
March 1, 1994; Vice Chairman of the Board of Ethyl since March 1,
1994, having served as Chairman of the Board and Chairman of the
Executive Committee of the Corporation from April 23, 1992, and
having previously served as Chairman of the Board, Chairman of
the Executive Committee and Chief Executive Officer. Other
directorships: Albemarle Corporation, First Colony Corporation
and Tredegar Industries, Inc.
Thomas E. Gottwald; age 34; director since 1994; President and Chief
Operating Officer of the Corporation since March 1, 1994, having
served as Vice President of the Corporation from August 1, 1991,
to March 1, 1994; and as General Manager of Tredegar Film
Products, a division of Tredegar Industries, Inc., prior thereto.
William M. Gottwald, MD; age 47; director since 1992; Senior Vice
President of the Corporation since March 1, 1994, having served
as Vice President of the Corporation since November 1, 1988, and
as Chairman of the Board and President of the Corporation's
pharmaceuticals subsidiary since April 27, 1987. Other
directorships: Albemarle Corporation and First Colony
Corporation.
Gilbert M. Grosvenor; age 63; director since 1985; President and
Chairman of the National Geographic Society (magazine publisher
and scientific society). Other directorships: Albemarle
Corporation, Chesapeake and Potomac Telephone Company, Chevy
Chase Savings Bank (FSB), Charles Allmon Trust, Inc., B.F. Saul
Real Estate Investment Trust, Saul Centers, Inc., and Marriott
International, Inc.
Andre B. Lacy; age 55; director since 1981; Chairman of the Board
(since 1992), Chief Executive Officer and President of LDI
Management, Inc., Managing General Partner, LDI, Ltd. (industrial
and investment limited partnership). Other directorships:
Albemarle Corporation, IPALCO Enterprises, Inc., Patterson Dental
Co. and Tredegar Industries, Inc.
Emmett J. Rice; age 75; director since 1988; retired, former member of
the Board of Governors of the Federal Reserve System. Other
directorships: Albemarle Corporation, Tredegar Industries, Inc.,
and Jardine-Fleming China Region Fund.
Sidney Buford Scott; age 62; director since 1959; Chairman of the
Board of Scott & Stringfellow, Inc. (investment bankers and
brokers). Other directorships: Albemarle Corporation and Great
Eastern Energy & Development Corporation.
Charles B. Walker; age 56; director since 1989; Vice Chairman of the
Board, Chief Financial Officer and Treasurer since March 1, 1994,
having served as Executive Vice President and Chief Financial
3
Officer of the Corporation since August 1, 1989, Treasurer of the
Corporation since July 1, 1993, Executive Vice President, Chief
Financial Officer and Treasurer of the Corporation (February 1,
1989-July 31, 1989), and Executive Vice President and Treasurer
of the Corporation (November 1, 1988-January 31, 1989); and Vice
Chairman of the Board and Chief Financial Officer of Albemarle
Corporation since March 1, 1994. Other directorships: Albemarle
Corporation, First Colony Corporation and Nations Fund
Trust/Nations Fund, Inc.
In 1994, each director attended at least 75% of the aggregate of
(i) the total number of meetings of all committees of the Board on
which the director then served and (ii) the total number of meetings
of the Board of Directors held during 1994 while he was a member of
the Board of Directors. Five meetings of the Corporation's Board of
Directors were held during 1994.
The Corporation's executive committee consists of Messrs. Bruce
C. Gottwald, Floyd D. Gottwald, Jr., Thomas E. Gottwald, William M.
Gottwald, MD and Charles B. Walker. 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 1994, the
executive committee met on eight occasions as the executive committee
of the Board of Directors and on fifteen occasions as the principal
management committee.
Messrs. Berry, Grosvenor, Lacy and Scott serve on the
Corporation's audit committee. During 1994, the audit committee met
twice. The audit committee reviews the Corporation's internal audit
and financial reporting functions and the scope and results of the
audit performed by the Corporation's independent accountants and
matters relating thereto and reports thereon to the Board of
Directors. The audit committee also reviews audit fees and recommends
to the Board of Directors the engagement of the independent
accountants of the Corporation.
The Corporation's nominating committee currently consists of
Messrs. Bruce C. Gottwald, Lacy and Scott. During 1994, the
nominating committee did not meet. 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
4
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. Grosvenor, Berry and Rice currently serve as the
Corporation's bonus, salary and stock option committee. During 1994,
the bonus, salary and stock option committee (the "Committee") met on
five occasions. This committee approves the salaries of management-
level employees. It also approves all bonus awards, certain
consultant agreements and initial salaries of new management-level
personnel, and grants options under the Corporation's Incentive Stock
Option Plan.
Certain Relationships and Related Transactions
Floyd D. Gottwald, Jr., and Bruce C. Gottwald are brothers.
William M. Gottwald, MD, a director and Senior Vice President of the
Corporation, is a son of Floyd D. Gottwald, Jr. Thomas E. Gottwald, a
director and President of the Corporation, and Bruce C. Gottwald, Jr.,
a director, are sons of Bruce C. Gottwald. The Gottwalds may be
deemed to be control persons of the Corporation.
Hunton & Williams regularly acts as counsel to the Corporation.
Allen C. Goolsby, a director of the Corporation, is a Partner in
Hunton & Williams.
Based solely on its review of the forms required by Section 16(a)
of the Securities Exchange Act of 1934 that have been received by the
Corporation, the Corporation believes that all filing requirements
applicable to its officers, directors and beneficial owners of greater
than 10% of its Common Stock have been complied with except that Dr.
John T. Marvel, a former Vice President of the Corporation who retired
on January 1, 1994, neglected to file a Form 4 until June 27, 1994,
with respect to two sales of the Corporation's Common Stock in March
1994.
5
STOCK OWNERSHIP
The following table lists any person (including any "group" as
that term is used in Section 13(d)(3) of the Securities Exchange Act
of 1934) who, to the knowledge of the Corporation, was the beneficial
owner as of December 31, 1994, of more than 5% of the outstanding
voting shares of the Corporation.
Name and Address of Percent
Title of Class Beneficial Owners Number of Shares of Class
Common Stock Floyd D. Gottwald, Jr., and 21,011,378(b)(c) 17.74%
Bruce C. Gottwald (a)
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23217
NationsBank Corporation and 8,723,552 7.4%
related entities (d)
c/o NationsBank Corporation
NationsBank Plaza
Charlotte, North Carolina 28255
____________
(a) Floyd D. Gottwald, Jr., and Bruce C. Gottwald (the
"Gottwalds"), together with members of their immediate families, may
be deemed to be a "group" for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, although there is no agreement among
them with respect to the acquisition, retention, disposition or voting
of Ethyl Common Stock.
(b) The Gottwalds, individually or collectively, have sole
voting and investment power over all of the shares disclosed except
15,259,567 shares held by wives, children, and in certain trust
relationships, some of which might be deemed to be beneficially owned
by the Gottwalds under the rules and regulations of the Securities and
Exchange Commission, but as to which the Gottwalds disclaim beneficial
ownership. Shares owned by the adult children of Floyd D. Gottwald,
Jr., and Bruce C. Gottwald are included in the holdings of the
Gottwalds as a group, but are not attributed to Floyd D. Gottwald,
Jr., or Bruce C. Gottwald other than in this table. This amount
includes 186,504 shares of Ethyl Common Stock, with respect to which
the Gottwalds or members of their immediate families have the right to
acquire beneficial ownership within 60 days of December 31, 1994,
pursuant to the Corporation's Stock Option Plan.
(c) This amount includes shares owned by Bruce C. Gottwald, Jr.,
a director of the Corporation, and by Thomas E. Gottwald, President of
the Corporation, both of whom are sons of Bruce C. Gottwald. Also
included are shares held by William M. Gottwald, MD, a Senior Vice
President and director of the Corporation and the son of Floyd D.
Gottwald, Jr. See the table on page 6 for information on the share
ownership of each member of the Gottwald family who is an executive
6
officer or director of the Corporation. This amount includes any
shares owned of record by NationsBank of Georgia, N.A., as Trustee
under the Corporation's savings plan for the benefit of the Gottwalds
and the members of their immediate families. This amount does not
include 2,113,318 shares held by the Trustee of such plan for the
benefit of other employees. Shares held under the 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 the Gottwalds are
executive officers, directors and the largest shareholders of the
Corporation, they may be deemed to be control persons of the
Corporation and to have the capacity to control any such
recommendation of the Board of Directors.
(d) The NationsBank Corporation related entities are ASB Capital
Management, Inc., NationsBank, N.A., NationsBank of Florida, N.A.,
NationsBank of Georgia, N.A., NationsBank of South Carolina, N.A.,
NationsBank of Tennessee, N.A., NationsBank of Virginia, N.A.,
NationsBank Texas Bancorporation, Inc., NationsBank of Texas, N.A.,
NationsBank Trust Company, N.A., and N.B. Holdings Corporation. The
information contained herein with respect to NationsBank Corporation
and the related entities listed herein is based on a Schedule 13G
filed by such entities with the Securities and Exchange Commission, a
copy of which was received by the Corporation on February 17, 1995.
Such filing further stated that the acquisition of such shares was in
the ordinary course of business and not in connection with or as a
participant in any transaction having the purpose or effect of
changing or influencing the control of the Corporation. The shares
held by NationsBank Corporation and related entities are held in
fiduciary accounts.
The following table sets forth as of December 31, 1994, the
beneficial ownership of Ethyl Common Stock by all directors of the
Corporation, the Chief Executive Officer and the four next most highly
compensated executive officers and all directors and executive
officers of the Corporation as a group. Unless otherwise indicated,
each person listed below has sole voting and investment power over all
shares beneficially owned by him.
7
Number of Shares Number of Shares Total
Name of Beneficial Owner with Sole Voting and with Shared Voting Number Percent of
or Number of Persons in Group Investment Power 1 and Investment Power of Shares Class2
Lloyd B. Andrew 39,969 0 39,969
William W. Berry 1,624 1,758(3) 3,382
Phyllis L. Cothran 0 0 0
Allen C. Goolsby 2,700 2,024 4,724
Bruce C. Gottwald 5,034,182 932,594 5,966,776(4) 5.04%
Bruce C. Gottwald, Jr. 502,045 3,724,307 4,226,352(5) 3.57%
Floyd D. Gottwald, Jr. 400,874 6,168,632 6,569,506(6) 5.55%
Thomas E. Gottwald 506,604 3,723,212 4,229,816(7) 3.57%
William M. Gottwald, MD 538,622 8,592,801 9,068,423(8) 7.65%
Gilbert M. Grosvenor 2,734 0 2,734
Andre B. Lacy 31,066(9) 925,000 956,066(9)
Emmett J. Rice 834 0 834
Sidney Buford Scott 90,534 12,000(10) 102,534
Charles B. Walker 212,172 0 212,172
Directors and executive officers
as a group (24 persons) 7,846,137 14,181,830 22,027,967 18.50%
____________
1 The amounts in this column include shares of Ethyl Common Stock with
respect to which certain persons have the right to acquire beneficial
ownership within 60 days of December 31, 1994, pursuant to the
Corporation's Stock Option Plan: Bruce C. Gottwald: 25,243 shares; Floyd
D. Gottwald, Jr.: 0 shares; Thomas E. Gottwald: 93,936 shares; William M.
Gottwald, MD: 67,325 shares; Charles B. Walker: 157,149 shares; and
directors and executive officers as a group: 616,185 shares.
2 In accordance with the rules of the Securities and Exchange Commission some
shares are attributed to more than one member of the Gottwald families, but
are counted only once in the information provided for directors and
executive officers as a group. Except as indicated, each person or group owns
less than 1% of Ethyl Common Stock.
3 Mr. Berry disclaims beneficial ownership of all 1,758 of such shares.
4 Mr. Gottwald disclaims beneficial ownership of 932,594 of such shares.
5 Mr. Gottwald disclaims beneficial ownership of 3,778,065 of such shares.
This amount includes 3,186,102 shares of Ethyl Common Stock that Mr.
Gottwald may be deemed to own beneficially. Such shares constitute Mr.
Gottwald's interest as beneficiary of a trust of which he is a co-trustee.
6 Mr. Gottwald disclaims beneficial ownership of 1,351,692 of such shares.
7 Mr. Gottwald disclaims beneficial ownership of 3,761,728 of such shares.
This amount includes 3,186,102 shares of Ethyl Common Stock that Mr.
Gottwald may be deemed to own beneficially. Such shares constitute Mr.
Gottwald's interest as beneficiary of a trust of which he is a co-trustee.
8 Dr. Gottwald disclaims beneficial ownership of 8,702,092 of such shares.
This amount includes 3,186,102 shares of Ethyl Common Stock that Dr.
Gottwald may be deemed to own beneficially. Such shares constitute Dr.
Gottwald's interest as beneficiary of a trust of which he is a co-trustee.
This amount also includes 4,816,940 shares of Ethyl Common Stock that Dr.
Gottwald may be deemed to own beneficially as co-trustee of a trust for the
benefit of Floyd D. Gottwald, Jr.
9 Mr. Lacy disclaims beneficial ownership of 29,483 of such shares.
10 Mr. Scott disclaims beneficial ownership of all 12,000 of such shares.
8
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table presents information relating to total compensation of
the Chief Executive Officer and the four next most highly compensated
executive officers of the Corporation for the fiscal years ended December 31,
1994, 1993 and 1992.
Long-Term
Annual Compensation Compensation
Other Annual Options/ All Other
Name and Principal Position Year Salary Bonus Compensation1 SARs (#)2 Compensation
Bruce C. Gottwald 1994 $770,000 $265,000 --- $33,532 38,5003
Chairman of the Board and 1993 770,000 265,000 --- 30,608 38,500
Chief Executive Officer 1992 700,833 291,750 --- 3,300 33,937
Floyd D. Gottwald, Jr. 1994 378,167 0 --- 0 18,1254
Vice Chairman of the Board 1993 754,000 260,000 --- 30,608 21,992
1992 736,500 286,750 --- 3,300 36,913
Thomas E. Gottwald 1994 332,000 200,000 --- 413,936 16,6005
President and 1993 199,917 125,000 --- 9,576 9,996
Chief Operating Officer 1992 185,000 96,000 --- 3,300 9,250
Charles B. Walker 1994 253,333 118,000 --- 237,149 20,0756
Vice Chairman of the Board, 1993 391,000 225,000 --- 98,018 19,550
Chief Financial Officer and 1992 375,167 251,750 --- 3,300 18,883
Treasurer
William M. Gottwald, MD 1994 192,883 100,000 --- 307,325 10,0567
Senior Vice President 1993 151,475 100,000 --- 5,008 7,574
1992 143,750 88,375 --- 3,300 7,163
_______________
1 None of the named executive officers received Other Annual Compensation for 1994 in excess of the lesser of $50,000 or 10%
of combined salary and bonus for 1994.
2 All options granted in 1993 were granted to replace previously granted options pursuant to the anti-dilution provisions of
the Corporation's Incentive Stock Option Plan in connection with the spin-off of First Colony Corporation. Certain
options granted in 1994 were granted to replace previously granted options pursuant to the anti-dilution provisions of the
Corporation's Incentive Stock Option Plan in connection with the spin-off of Albemarle Corporation.
3 Includes contributions to the Corporation's savings plan ($7,500, $10,000 and $10,000) and accruals in the Corporation's
excess benefit plan ($31,000, $28,500 and $23,937) for 1994, 1993 and 1992, respectively.
4 Includes contributions to the Corporation's savings plan ($6,375, $10,000 and $10,000) and accruals in the Corporation's
excess benefit plan ($10,625, $11,922 and $26,913) for 1994, 1993 and 1992, respectively.
5 Includes contributions to the Corporation's savings plan ($7,500, $9,996 and $9,250) and accruals in the Corporation's
excess benefit plan ($9,100, $0 and $0) for 1994, 1993 and 1992, respectively.
6 Includes contributions to the Corporation's savings plan ($7,500, $10,000 and $10,000) and accruals in the Corporation's
excess benefit plan ($14,575, $9,550 and $8,883) for 1994, 1993 and 1992, respectively.
7 Includes contributions to the Corporation's savings plan ($7,500, $7,574 and $7,163) and accruals in the Corporation's
excess benefit plan ($2,556, $0 and $0), respectively.
10
Floyd D. Gottwald, Jr., devotes 37.5% of his time and efforts to the
Corporation and 62.5% to Albemarle Corporation. Charles B. Walker devotes 50%
of his time and efforts to the Corporation and 50% to Albemarle Corporation.
Messrs. Gottwald and Walker are compensated by the Corporation and Albemarle
Corporation in accordance with these percentages.
The following tables present information concerning stock options and stock
appreciation rights ("SARs") granted to the Chief Executive Officer and the
four next most highly compensated executive officers of the Corporation and
exercises of options and SARs by such persons.
Option/SAR Grants in Last Fiscal Year
Each of these options relates to Ethyl Common Stock and includes a tandem SAR.
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
% of Total Options/SARs Exercise or
Options/SARs Granted to Employees in Base Price
Name Granted (#) Fiscal Year ($) Expiration Date 5% ($) 10% ($)
Bruce C. Gottwald 8,289 1,4 0.23% 12.88 09/14/94 0 0
9,434 1,5 0.26% 10.85 11/04/95 28,251 62,541
8,484 1,6 0.24% 12.69 12/18/96 29,715 65,781
7,325 1,7 0.21% 14.11 12/30/97 28,526 63,150
Floyd D. Gottwald, Jr. 0
Thomas E. Gottwald 6,611 1,6 0.19% 12.69 12/18/96 23,155 51,259
7,325 1,7 0.21% 14.11 12/30/97 28,526 63,150
400,000 9 11.20% 12.50 02/28/99 1,380,000 3,055,000
Charles B. Walker 13,094 1,2 0.37% 11.22 09/23/97 92,409 234,182
8,295 1,3 0.23% 9.00 09/21/98 46,958 119,000
7,909 1,4 0.22% 11.71 09/14/89 58,254 147,627
9,399 1,5 0.26% 9.86 11/04/00 58,292 147,723
8,643 1,6 0.24% 11.54 12/18/01 62,737 158,986
89,809 1,7 2.51% 11.54 12/18/01 651,893 1,652,015
100,000 9 2.80% 12.50 02/29/04 786,250 1,992,500
William M. Gottwald, MD 7,325 1,7 0.21% 14.11 12/30/97 28,526 63,150
300,000 9 8.40% 12.50 02/28/99 1,035,000 2,291,250
11
____________
1 Options granted during 1994 to replace previously granted options pursuant to
the anti-dilution provisions of the Company's Incentive Stock Option Plan in
connection with the spin-off of Albemarle Corporation.
2 Became exercisable 9/24/88.
3 Became exercisable 9/24/89.
4 Became exercisable 9/15/90.
5 Became exercisable 11/05/91.
6 Became exercisable 12/19/92.
7 Became exercisable 12/31/93.
8 Became fully exercisable 12/31/93.
9 These options become exercisable based on the growth in the operating
earnings of the Corporation (subject to any adjustments that the Committee
concludes are necessary to reflect the intent of the plan) as follows:
Percent
Annual Earnings Exercisable
1993 Earnings x 1.10 20%
1993 Earnings x 1.21 40%
1993 Earnings x 1.33 60%
1993 Earnings x 1.46 80%
1993 Earnings x 1.61 100%
12
The initial options alternatively become exercisable based on the
improvement in the market price for the Corporation's Common Stock as
reflected by the closing price for the Corporation's Common Stock on the last
trading day of the calendar year as follows:
Percent
Annual Earnings Exercisable
Option Price on Grant Date x 1.10 20%
Option Price on Grant Date x 1.212 40%
Option Price on Grant Date x 1.333 60%
Option Price on Grant Date x 1.464 80%
Option Price on Grant Date x 1.615 100%
Options are exercisable in any event beginning thirty days prior to the
expiration date or, if earlier, in the event of retirement, termination as a
result of permanent and total disability or death or upon a change in control.
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Value
Value of Unexercised
Number of Unexercised In-The-Money Options/SARs at
Options/SARs at FY-End (#)1 FY-End ($)2
Shares Acquired Value
Name on Exercise(#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
Bruce C. Gottwald --- --- 25,243 --- --- ---
Floyd D. Gottwald, Jr. --- --- --- --- --- ---
Thomas E. Gottwald --- --- 13,936 400,000 --- ---
Charles B. Walker --- --- 137,149 100,000 5,184 ---
William M. Gottwald, MD --- --- 7,325 300,000 --- ---
____________
1 Each of these options relates to Ethyl Common Stock and includes a tandem SAR.
2 These values are based on $9.625, the closing price of Ethyl Common Stock on the New York Stock Exchange on December 30,
1994.
13
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, 1994, 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, 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.
14
Estimated Annual Benefits Payable at Retirement*
Years of Pension Benefit Service and Estimated Annual Benefits
Final-Average 10 15 20 25 30 35 40 50
Earnings
$300,000 $44,025 $66,040 $88,055 $110,070 $132,080 $154,095 $176,110 $220,135
350,000 51,525 77,290 103,055 128,820 154,580 180,345 206,110 257,635
400,000 59,025 88,540 118,055 147,570 177,080 206,595 236,110 295,135
450,000 66,525 99,790 133,055 166,320 199,580 232,845 266,110 332,635
500,000 74,025 111,040 148,055 185,070 222,080 259,095 296,110 370,135
550,000 81,525 122,290 163,055 203,820 244,580 285,345 326,110 407,635
600,000 89,025 133,540 178,055 222,570 267,080 311,595 356,110 445,135
650,000 96,525 144,790 193,055 241,320 289,580 337,845 386,110 482,635
700,000 104,025 156,040 208,055 260,070 312,080 364,095 416,110 520,135
750,000 111,525 167,290 233,055 278,820 334,580 390,345 446,110 557,635
800,000 119,025 178,540 238,055 297,570 357,080 416,595 476,110 595,135
850,000 126,525 189,790 253,055 316,320 379,580 442,845 506,110 632,635
900,000 134,025 201,040 268,055 335,070 402,080 469,095 536,110 670,135
950,000 141,525 212,290 283,055 353,820 424,580 495,345 566,110 707,635
1,000,000 149,025 223,540 298,055 372,570 447,080 521,595 596,110 745,135
* Assumes attainment of age 65 in 1994 and Social Security Covered Compensation of $24,312.
15
The benefit formula under the pension plans is based on the
participant's final-average earnings, which are defined as the average
of the highest three consecutive calendar years' earnings (base pay
plus 50% of incentive bonuses paid in any fiscal year) during the 10
consecutive calendar years immediately preceding the date of
determination. The years of pension benefit service for each of the
executive officers named in the above compensation table as of
December 31, 1994, are: Bruce C. Gottwald, 38.750; Floyd D. Gottwald,
Jr., 51.500; Thomas E. Gottwald, 3.475; Charles B. Walker, 13.665; and
William M. Gottwald, MD, 13.9975.
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.
Excess Benefit and Supplemental Retirement Plans
The Corporation maintains excess benefit and supplemental
retirement plans (the "Supplemental Plans") in the form of
nonqualified pension 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 Internal
Revenue Code. In addition, on the recommendation of the Executive
Committee of the Corporation's Board of Directors and with the
approval of the Committee, certain key employees may be granted
additional pension benefits under the Supplemental Plans in cases
where relatively short service would limit the key employee's career
retirement benefits. Such additional pension benefits have been
granted to Charles B. Walker. All benefits under the Supplemental
Plans vest upon a Change in Control of the Corporation, as defined in
the Plans.
Compensation of Directors
In 1994, each member of the Board of Directors who was not an
employee of the Corporation or any of its subsidiaries was paid (i)
$1,000 for attendance at each Board meeting and (ii) $600 for
attendance at each meeting of a committee of the Board of which he was
a member. In addition, each such director was paid a quarterly fee of
$5,000. Employee members of the Board of Directors are not paid
separately for their service on the Board or its committees.
Under the retirement policy for directors, any director retiring
from the Board after age 60 with at least five years' service on the
Board will receive $12,000 per year for life, payable in quarterly
installments. 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
16
years of service on the Board. Such retirement payments to former
directors may be discontinued under certain circumstances.
In 1992, the Corporation's shareholders approved the Non-Employee
Directors' Stock Acquisition Plan (the "Directors Stock Plan"), which
provides that the Corporation shall award on each July 1, to each
eligible director that number of whole shares of Ethyl Common Stock
when multiplied by the closing price of Ethyl Common Stock on the
immediately preceding business day, as reported in The Wall Street
Journal, as shall as nearly as possible equal but not exceed $2,000.
The shares of Ethyl Common Stock awarded under the Directors' Stock
Plan are nonforfeitable and the recipient directors immediately and
fully vest in Ethyl Common Stock issued under the Plan. Subject only
to such limitations on transfer as may be specified by applicable
securities laws, directors may sell their shares under the Directors'
Stock Plan at any time. The Directors' Stock Plan provides that no
awards may be made after July 1, 2001.
Compensation Committee Interlocks and Insider Participation
The Committee of the Corporation's Board of Directors, which
performs the function of a compensation committee, consists of Messrs.
Berry, Grosvenor and Rice (Chairman). Lloyd B. Andrew, who served on
the Committee for part of 1994, formerly served as Executive Vice
President and Chief Financial Officer of the Corporation. In 1994, he
received $100,000 in consulting fees for general advisory services to
the Corporation. Joseph C. Carter, Jr., who served on the Committee
for part of 1994, is a Senior Counsel in Hunton & Williams, which firm
regularly acts as counsel to the Corporation. Dr. M.F. Gautreaux, who
served on the Committee until his death in February 1994, formerly
served as Senior Vice President of the Corporation.
Compensation Committee Report on Executive Compensation
The Bonus, Salary and Stock Option Committee of the Board of
Directors (the Committee) is delegated the power to administer the
compensation program of the Corporation applicable to its executive
officers. Accordingly, the Committee submits this report on executive
compensation to the shareholders.
Overall Objectives
The objectives of the Corporation's executive compensation
program are to:
(bullet) Provide balanced, competitive total compensation that will
enable the Corporation to attract, motivate and retain
highly qualified executives.
(bullet) Provide the incentives for enhancing the profitability of the
Corporation by rewarding executives for meeting individual
and corporate goals.
17
(bullet) Align the financial interests of the executives as closely as
possible to those of the shareholders by encouraging
executive ownership of the Corporation's common stock.
In administrating the compensation program the Committee
recognizes the Corporation's basic objectives of achieving a return or
equity of at least twenty percent as well as annual growth in
operating earnings of fifteen percent.
Elements of the Program
The Committee believes the interests of the shareholders will be
best served if the compensation program consists of cash compensation
and equity ownership. Thus, the program includes three principal
parts: base salary, annual bonuses in cash or cash and stock, and
stock options with performance vesting and tandem stock appreciation
rights. The Committee considers all parts of the program when setting
compensation levels or making awards.
The Corporation seeks to maintain its executive compensation
packages slightly above the mid-range of those offered generally in
the job markets in which the Corporation competes for talent and
experience. The Corporation's stock option program is administered
likewise to achieve the goal of retaining experienced executives.
Competitive Market
The Committee uses various compensation surveys provided by
compensation consultants in determining the market for executive pay.
The surveys include companies that are larger and smaller than the
Corporation. Some of the surveys are limited to companies in the
petroleum or chemical businesses, including, but not limited to,
companies shown within the Performance Graph. Others include
companies in other industries. References to the "market" in this
Report refer to this survey data.
Base Salary
Annual increases in base salary are based on evaluations of past
and current individual and corporate performance, including operating
profits, contribution to the Corporation's success, time in the
position, the overall level of pay adjustments in the markets the
Corporation monitors, market data for the position, and internal
equities among the positions. The Committee considers each of the
individual factors but does not assign a specific value to each
factor, and a subjective element is acknowledged in evaluating each
executive's contribution.
During 1994, Thomas E. Gottwald's base salary increased to
coincide with his election as President and Chief Operating Officer of
the Corporation. His base salary approximates the average for
comparable companies. In the Summary Compensation Table, two
18
executive officers' base salaries are lower in 1994 than in 1993:
Messrs. Floyd D. Gottwald, Jr. and Charles B. Walker. This is because
they are also executive officers of Albemarle Corporation, and are
performing services for and receiving compensation from that entity as
well. Dr. William M. Gottwald's base salary was increased in 1994 to
reflect his election as a member of the Corporation's Executive
Committee and his assumption of increased responsibilities for staff
support groups.
Base salaries for executive offices in general are in line with
salaries paid in the market, and base salary and bonus together also
are in line with the market.
Annual Bonus
The purpose of the annual bonus is to motivate and reward
performance measured against individual, division, department and
corporate objectives. The Committee, in its discretion, may award
bonuses annually to management-level employees from a reserve based on
certain defined profits of the Corporation determined in accordance
with a bonus formula approved by the shareholders.
A bonus reserve is established to achieve the Corporation's
compensation targets. The maximum contribution to the bonus reserve
is 4% of the amount by which operating profits of the Corporation and
its subsidiaries, determined by the independent auditors, exceed
$15,000,000. The auditors certified that the maximum contribution for
1994 under the formula was $6,070,506, but the Committee, as has been
the practice in prior years, did not appropriate the entire amount.
Of this amount, a total of $2,010,750 was awarded in 1995 as 1994
bonuses.
Annual bonus awards are determined by the Committee in
conjunction with senior management, and are based on an evaluation of
the performance, level of responsibility and leadership of the
individual executive in relation to overall corporate results. The
evaluation of overall performance of the Corporation in 1994 included
such factors as operating profit, performance in relation to
competitive peer groups and attainment of the key goal of completing
the Albemarle spin-off. Some individuals' bonus awards for 1994 were
slightly higher than in 1993, reflecting an increase in 1994 operating
results.
Stock Options
During 1994, the Committee granted stock options, and tandem
stock appreciation rights, with performance vesting based on meeting
either earnings or stock price targets. The purposes of the plan were
to send the message that incentive awards are earned through
performance, and to match executives' rewards with enhanced
shareholder value when that performance has occurred. All executive
19
officers of the Corporation received such grants except Bruce C.
Gottwald and Floyd D. Gottwald, Jr., who declined them.
The number of options granted was well within the range of
competitive practice in spin-off situations, based on information
provided by the Corporation's investment bankers. Going forward,
awards will be determined in accordance with the Corporation's
previously stated compensation objective.
Options awarded in March 1994 have an exercise price equal to
fair market value at the date of grant, and a ten-year exercise
period. They may vest 20% per year, on the anniversary date of their
grant, if either EPS growth or stock price growth is 10% compounded
annually since the date of grant. If neither goal is met in one year,
but the next year's cumulative goal is met, cumulative vesting will
occur. Fiscal year end results will be used for purposes of
determining performance measurement.
The result of the vesting schedule is that all of the performance
options vest if either earnings or stock price increase 61.5% during
the five years after the spin-off. In addition, all outstanding
options will vest to executives who are still employed by the
Corporation thirty days prior to the expiration date of the option, or
in the event of a change in control.
CEO Compensation
In the past, under the Corporation's executive compensation
program, senior executives' base salaries have compared more favorably
to industry pay practices than the Corporation's annual bonuses and
long-term incentive awards. In the future, greater emphasis will be
placed on performance-based incentives. On this basis, during 1993,
Mr. Bruce C. Gottwald, then President of the Corporation, received a
base salary of $770,000.
Mr. Gottwald's 1994 base salary was unchanged from 1993,
primarily to reflect the down-sizing of the Corporation resulting from
the Albemarle spin-off in March 1994.
Mr. Gottwald's 1994 bonus (paid in 1995) of $265,000 represents
the Committee's evaluation of his contribution to the Corporation's
overall performance during the year, particularly the successful spin-
off of Albemarle Corporation, the opening of the Company's world-class
Research Center in Richmond, a significant expansion of manufacturing
facilities and the sale of Whitby Pharmaceuticals. Mr. Gottwald's
bonus for 1994 also reflects the Committee's recognition that the
Corporation's operating results reached expected levels.
Compensation survey data combining the CEO's base salary and
annual bonus for 1994 places the CEO at approximately the size-
adjusted median.
20
21
Section 162(m)
The Omnibus Budget Reconciliation Act of 1993 (OBRA '93)
established certain criteria for the tax deductibility of compensation
in excess of $1 million paid to the Corporation's executive officers.
To meet the criteria applicable to performance-based compensation (as
defined in OBRA '93), the Corporation's bonus plan would have to be
amended to limit the Committee's discretion to determine individuals'
bonuses based on individual performance factors and other factors as
the Committee may determine, from time to time, to be relevant.
The Committee believes that the flexibility to adjust annual
bonuses upward, as well as downward, is an important feature of the
plan and one which serves the best interests of the Corporation by
allowing the Committee to recognize and motivate individual executive
officers as circumstances warrant. Further, for 1995 the amount of
compensation subject to loss of tax deductibility is extremely small.
Consequently, the Committee does not propose at the present time to
amend the plan to comply with the OBRA '93 requirements. Amounts paid
under the plan to the executive officers will count toward the $1
million cap that is provided in Section 162(m) of OBRA '93. Those
portions of the officers' compensation that are not performance-based
(as defined in OBRA '93) and that exceed the cap will not be tax
deductible by the Corporation.
THE BONUS, SALARY AND STOCK OPTION COMMITTEE
Emmet J. Rice, Chairman
Gilbert M. Grosvenor
William W. Berry
22
Performance Graph
Comparison of Five-Year Cumulative Total Return
vs. S&P 500 and Chemical Composite*
1989 1990 1991 1992 1993 1994
Ethyl $100.00 $ 87.48 $106.57 $111.33 $106.70 $ 95.78
S&P 500 $100.00 $ 96.89 $126.28 $135.88 $149.52 $151.55
Chemical Composite(1) $100.00 $ 89.32 $118.64 $132.06 $147.82 $163.55
(1) The total return information for the Chemical Composite (based on the
companies in the S&P Index in 1993) has been weighted by market
capitalization and includes the following companies in all the S&P
chemical industry groups (basic chemicals, specialty chemicals, and
diversified chemicals): Air Products and Chemicals, Inc., Avery
Dennison Corporation, The Dow Chemical Company, E.I. duPont de Nemours
& Company, Englehard Corp. Ethyl Corporation, FMC Corporation, First
Mississippi Corp., The B.F. Goodrich Company, W.R. Grace & Co., Great
Lakes Chemical Corp., Hercules Incorporated, Monsanto Company, Morton
International, Inc., NL Industries, Inc., Nalco Chemical Co., PPG
Industries, Inc., Praxair, Inc., Rohm and Haas Company, and Union
Carbide Corporation.
* Assumes $100 invested on last day of December 1989. Dividends
are reinvested quarterly.
(1) The total return information for the Chemical Composite (based on
the companies in the S&P Index in 1993) has been weighted by
market capitalization and includes the following companies in all
the S&P chemical industry groups (basic chemicals, specialty
chemicals, and diversified chemicals): Air Products and
Chemicals, Inc., Avery Dennison Corporation, The Dow Chemical
Company, E.I. duPont de Nemours & Company, Englehard Corp. Ethyl
Corporation, FMC Corporation, First Mississippi Corp., The B.F.
Goodrich Company, W.R. Grace & Co., Great Lakes Chemical Corp.,
Hercules Incorporated, Monsanto Company, Morton International,
Inc., NL Industries, Inc., Nalco Chemical Co., PPG Industries,
Inc., Praxair, Inc., Rohm and Haas Company, and Union Carbide
Corporation.
23
AMENDMENT OF RESTATED ARTICLES OF INCORPORATION
The Corporation is asking the shareholders to approve an
amendment of the Articles of Incorporation to streamline and simplify
the provisions relating to preferred stock. At the present time the
Articles of Incorporation authorize the issuance of one million shares
of First Preferred Stock and 10 million shares of Cumulative Second
Preferred Stock. In December 1994, the Corporation redeemed the last
few outstanding shares of First Preferred Stock. No shares of Second
Preferred Stock are outstanding although shares of one series of
Second Preferred Stock are reserved for issuance pursuant to the
Corporation's Shareholders Rights Plan adopted in September 1987.
The Corporation never expects to issue any additional shares of
Cumulative First Preferred Stock. The limited number of authorized
available shares and obsolete provisions in the Articles of
Incorporation would make any such issuance impractical. Any future
issuance of preferred stock would be shares of Cumulative Second
Preferred Stock. Accordingly, the Board of Directors has concluded
that it is desirable to simplify the provisions relating to the
Corporation's preferred stock. The Board proposes an amendment to the
Articles to remove the provisions relating to the Cumulative First
Preferred Stock and to redesignate the Cumulative Second Preferred
Stock simply as Cumulative Preferred Stock. The series of Second
Preferred Stock reserved for issuance under the Shareholders Rights
Plan will be redesignated as Cumulative Preferred Stock, Series B, but
no substantive changes will be made in the terms or conditions of that
series.
The Board of Directors recommends that the shareholders vote in
favor of the proposed amendment to the Articles of Incorporation. The
amendment to the Articles of Incorporation is attached as Exhibit A to
this proxy statement.
SHAREHOLDER PROPOSAL
The Comptroller of the City of New York, 1 Centre Street, New
York, New York 10007-2341, as custodian for the New York City
Employees' Retirement System ("NYCERS") has notified the Corporation
that it intends to present the following proposal (the "Proposal") at
the meeting.
WHEREAS, the New York City Employees' Retirement System is
concerned about the long-term economic performance of the
companies in which it owns stock, and
WHEREAS, the board of directors of a company is accountable
to shareholders for the performance of management and the
company, and NYCERS believes that a majority of directors
should be independent of management, and
24
WHEREAS, the board of directors is meant to be an
independent body elected by shareholders and is charged by
law and by shareholders with the duty, authority and
responsibility to formulate and direct corporate policies,
and
WHEREAS, the board of directors should monitor the
activities of management in the implementation of those
policies for the best interest of shareholders, and
WHEREAS, the company's interests can best be served by
having directors who are independent of management and who
represent a breadth of experience,
NOW THEREFORE, BE IT RESOLVED THAT: the shareholders
request that the board of directors amend the By-Laws to
provide that the board of directors consist of a majority of
independent directors. For those purposes, an independent
director is one who: (1) has not been employed by the
company, or an affiliate, in an executive capacity within
the last five years; (2) is not, and has not been, a member
of a company that is one of this company's paid advisors or
consultants; (3) is not employed by a significant customer
or supplier; (4) does not and did not have a personal
services contract with the company; (5) is not employed by a
tax-exempt organization that receives significant
contributions from the company; (6) is not a relative of the
management of the company; (7) has not had any business
relationship that would be required to be disclosed under
Regulation S-K. We request that this by-law amendment be
applied only to nominees for director at meetings subsequent
to the 1995 annual meeting and that it not apply to
incumbent directors.
THE BOARD OF DIRECTORS HAS CONSIDERED THE PROPOSAL AND RECOMMENDS
THAT THE SHAREHOLDERS VOTE AGAINST IT.
Under Virginia law, the Board of Directors has responsibility for
the exercise of all corporate powers and authority, and the management
of the business and affairs, of the Corporation. The membership of
the Board is, therefore, critical to the operation and success of the
Corporation. The Nominating Committee, a majority of which presently
consists of non-employee members of the Board, assesses the
composition of the Board and seeks to attract highly qualified,
motivated and competent persons to serve as directors, while
maintaining an optimal balance of knowledge, background and experience
among members of the Board. The current Board includes non-employee
members with many years of valuable experience in the fields of
finance, banking, securities, law and public utilities. The members
of the Board who are current or former employees of the Corporation
represent a combined total of well in excess of 150 years of service
to the Corporation and its shareholders.
25
The Board of Directors recognizes the importance of independent
directors and has adopted an objective that a Board majority consist
of directors who do not have a material relationship with the
Corporation. The policy, which was adopted by the Board on February
23, 1995, reads as follows:
As the Board of Directors considers nominees for vacancies
that will occur in the Board from time to time, it shall
recognize as an objective that a majority of directors shall
not have a direct or indirect relationship with the
Corporation that, in the opinion of the Board of Directors,
is material either to the Corporation or to the director.
While the Board agrees with the general thrust of the Proposal,
it believes that the Proposal's basic objective is captured by the
Board's policy statement and that the specifics of the Proposal are
unnecessarily and inappropriately restrictive. More specifically, the
Board believes that the Proposal would restrict the Nominating
Committee's efforts to maintain the most highly qualified Board of
Directors by mandating that a majority of the Board consist of
individuals who fit an overly narrow, arbitrary and imprecise
classification as "independent directors." The Proposal could exclude
from consideration many extremely qualified candidates who have
demonstrated a long-standing interest in the Corporation's success and
who have devoted considerable energy and time in pursuit of that
interest. For example, the Proposal could exclude individuals whose
service to the Corporation as advisors has enabled them to gain
significant insight into the Corporation's operations and who have
made personal and professional investments in the success of those
operations. Similarly, the Proposal could exclude recently retired
executives who are uniquely qualified to participate in Board
deliberations about the Corporation's future. Finally, the Proposal
could exclude individuals, such as family members of management, whose
interests are particularly strongly allied with those of other
shareholders in the prosperity of the Corporation. These
relationships to the Corporation, like many of the others affected by
the Proposal, in the Board's view, should not disqualify an individual
from valuable service to the Corporation.
In addition to unnecessary substantive restrictions, the Proposal
would present numerous practical difficulties for the Corporation and
the Nominating Committee. For example, if a director's death,
retirement or resignation created an imbalance in the Board's
composition, the Corporation either would have to find a proper
replacement in short order or cause another director to resign. The
Proposal provides no guidance as to the appropriate remedy for this
situation. The Proposal also fails to provide guidance as to the
correct interpretation of certain key terms in its definition of
"independence." It remains unclear, for example, what a "significant
customer or supplier" of the Corporation is or what a "significant
contribution" to a non-profit organization is.
26
The Board's primary goal has been, and should remain, the
identification and nomination of a diversified group of individuals
who are the most qualified to exercise the powers assigned to the
Board by Virginia law to promote the best interests of the Corporation
and its shareholders. In this connection, the Board policy will be to
work towards a Board with a majority consisting of directors with no
material relationship with the Corporation. In the Board's view,
however, the Proposal, by focusing on a narrow and arbitrary
definition of "independence" to the exclusion of all other
qualifications, would hamper significantly the achievement of the
Board's primary goal.
DESIGNATION OF AUDITORS
The Board of Directors has designated Coopers & Lybrand L.L.P.,
certified public accountants, as the Corporation's independent
auditors for the year 1995, subject to shareholder approval. This
firm has audited the Corporation's financial statements since 1962 and
those of the former Ethyl Corporation (Delaware) from 1947 to 1962. A
representative of Coopers & Lybrand L.L.P. is expected to be present
at the annual meeting with an opportunity to make a statement and to
be available to respond to appropriate questions.
Coopers & Lybrand L.L.P.'s principal function is to audit the
consolidated financial statements of the Corporation and its
subsidiaries and, in connection with that audit, to review certain
related filings with the Securities and Exchange Commission and to
conduct limited reviews of the financial statements included in each
of the Corporation's quarterly reports.
FINANCIAL STATEMENTS
A copy of the Corporation's Annual Report on Form 10-K for the
year 1994, as required to be filed with the Securities and Exchange
Commission, will be provided on written request without charge to any
shareholder whose proxy is being solicited by the Board of Directors.
The written request should be directed to:
E. Whitehead Elmore, Esq.
Secretary
Ethyl Corporation
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23217
PROPOSALS FOR 1996 ANNUAL MEETING
Under the regulations of the Securities and Exchange Commission,
any shareholder desiring to make a proposal to be acted upon at the
1996 annual meeting of shareholders must present such proposal to the
Corporation at its principal office in Richmond, Virginia, not later
27
than November 17, 1995, in order for the proposal to be considered for
inclusion in the Corporation's proxy statement. The Corporation
anticipates holding the 1996 annual meeting on April 25, 1996.
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
28
NOTICE
and
PROXY STATEMENT
for
ANNUAL MEETING
of
SHAREHOLDERS
April 13, 1995
Exhibit A
ETHYL CORPORATION
ARTICLES OF INCORPORATION
Amendment to Article III
1. The first two paragraphs of Article III shall be amended to
read as follows:
The Corporation shall have authority to
issue 400,000,000 shares of Common
Stock, $1 par value, and 10,000,000
shares of Cumulative Preferred Stock,
with a par value, if any, to be set
forth hereinafter with respect to each
series. The Cumulative Preferred Stock
may be issued in series as hereinafter
provided. The description of the
Cumulative Preferred Stock and the
Common Stock, and the designations,
preferences and voting powers of such
classes of stock or restrictions or
qualifications thereof, and the terms on
which such stock is to be issued
(together with certain related
provisions for the regulation of the
business and for the conduct of the
affairs of the Corporation) shall be as
hereinafter set forth in Parts A, B and
C of this Article III.
2. Part A of Article III setting forth the designation, number
of shares, rights and preferences of any series of Cumulative First
Preferred Stock shall be deleted.
3. Part B of Article III shall be renamed Part A and shall be
amended to delete and replace each reference to "Cumulative Second
Preferred Stock" with the words "Cumulative Preferred Stock."
4. Section 1 of Part B (new Part A) of Article III shall be
deleted and subsequent sections renumbered accordingly.
5. Parts C and D of Article III shall be renamed Parts B and C,
respectively.
RI-CS\t:\loh\ethyl\95AM\Proxy.9
March 6, 1995
PRELIMINARY COPY
ETHYL CORPORATION
Richmond, Virginia
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 13, 1995
The undersigned hereby appoints Bruce C. Gottwald, Sidney Buford Scott and
Allen C. Goolsby, or any of them, with full power of substitution in each,
proxies (and if the undersigned is a proxy, substitute proxies) to vote all
shares of the undersigned in Ethyl Corporation, at the annual meeting of
shareholders to be held April 13, 1995, and at any and all adjournments thereof:
1. ELECTION OF DIRECTORS: FOR all nominees listed WITHHOLD AUTHORITY
(except as indicated to vote for all nominees
to the contrary below) listed below
Lloyd B. Andrew, William W. Berry, Phyllis L. Cothran, Allen C. Goolsby, Bruce
C. Gottwald, Bruce C. Gottwald, Jr., Floyd D. Gottwald, Jr., Thomas E. Gottwald,
William M. Gottwald, MD, Gilbert M. Grosvenor, Andre' B. Lacy, Emmett J. Rice,
Sidney Buford Scott and Charles B. Walker.
(INSTRUCTION: To withhold authority to vote for any such nominees, write the
nominee's name in the space provided below.)
________________________________________________________________
2. The proposal to amend the Corporation's Restated Articles of Incorporation
to eliminate one class of preferred stock and redesignate the remaining
class.
FOR AGAINST ABSTAIN
3. The proposal to approve the appointment of Coopers & Lybrand L.L.P. as the
auditors for the Corporation for 1995.
FOR AGAINST ABSTAIN
4. The shareholder proposal regarding the composition of the Corporation's
Board of Directors.
FOR AGAINST ABSTAIN
5. 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
Proposals 1, 2 and 3 and AGAINST Proposal 4.
Dated _____________, 1995
_________________________
Please sign name exactly as it
appears on the stock certificate.
Only one of several joint owners
need sign. Fiduciaries should give
full title.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
RI-CS\t:\loh\ethyl\95am\Proxy.car
February 16, 1995