UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Octel Corp.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
Notes:
[OCTEL LOGO]
200 Executive Drive Dennis J Kerrison
Newark, DE 19702 President and Chief Executive Officer
Dear Stockholder: March 27, 2000
You are cordially invited to attend the Annual Meeting of Stockholders of
Octel Corp. (the "Corporation"), which will be held on Tuesday, May 9, 2000 at
10:00 a.m., local time, at The Drake Hotel, 140 E. Walton Place, Chicago, IL
60611-1545, USA.
The Notice of Meeting, Proxy Statement, Proxy Form and Annual Report of the
Corporation are included with this letter. The matters listed in the Notice of
Meeting are more fully described in the Proxy Statement.
It is important that your shares are represented and voted at the Annual
Meeting, regardless of the size of your holdings. Accordingly, please mark,
sign and date the enclosed Proxy Form and return it promptly in the enclosed
reply envelope which requires no postage if mailed in the United States of
America.
Sincerely,
/s/ Dennis J. Kerrison
Dennis J Kerrison
President and Chief Executive
Officer
OCTEL CORP.
200 Executive Drive
Newark, Delaware 19702
U.S.A.
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------
May 9, 2000
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Stockholders of
OCTEL CORP. (the "Corporation") will be held at The Drake Hotel, 140 E. Walton
Place, Chicago, IL 60611-1545, USA on Tuesday May 9, 2000 at 10.00am (Local
Time) for the following purposes:
1. To elect two directors to serve until the 2003 Annual Meeting;
2. To ratify the appointment of PricewaterhouseCoopers as the Corporation's
independent public accountants for the fiscal year ending December 31,
2000; and
3. The approval of the first amendment and restatement of the Octel Corp.
Performance Related Stock Option Plan, the Octel Corp. Company Share
Option Plan, the Octel Corp. Non-Employee Directors' Stock Option Plan,
and the Octel Corp. Savings-Related Share Option Scheme (the "Stock
Plans").
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed March 14, 2000 as the date of record for
the meeting, and only stockholders of record at the close of business on that
date will be entitled to vote at the meeting or any adjournment thereof. A
list of such stockholders will be available for examination by any stockholder
for any purpose germane to the meeting during normal business hours at the
Corporation's offices at 200 Executive Drive, Newark, Delaware 19702 for a
period of 10 days prior to the meeting.
A proxy statement, form of proxy and a copy of the annual report of the
Corporation for the year ended December 31, 1999 are enclosed.
By Order of the Board of Directors,
/S/ JOHN P TAYLER
John P Tayler
Corporate Secretary
March 27, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON AND
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, PLEASE MARK, SIGN AND DATE THE
ENCLOSED PROXY FORM AND MAIL IT PROMPTLY IN THE ENVELOPE PROVIDED TO ENSURE
THAT YOUR SHARES WILL BE REPRESENTED. YOU MAY NEVERTHELESS VOTE IN PERSON IF
YOU ATTEND THE ANNUAL MEETING. IN ADDITION, YOUR PROXY IS REVOCABLE AT ANY
TIME BEFORE IT IS VOTED BY WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY OR
BY DELIVERY OF A LATER-DATED PROXY.
OCTEL CORP.
200 Executive Drive
Newark, Delaware 19702
U.S.A.
----------------
PROXY STATEMENT
March 27, 2000
For
Annual Meeting of Stockholders
To be held on May 9, 2000
----------------
This proxy statement (the "Proxy Statement") is being furnished to the
holders of common stock, par value $0.01 per share (the "Common Stock") of
Octel Corp. (the "Corporation") in connection with the solicitation of proxies
by and on behalf of the Board of Directors of the Corporation (the "Board of
Directors" or the "Board") for use at the annual meeting of stockholders to be
held on May 9, 2000 at 10.00am, local time, and at any adjournments or
postponements thereof (the "Annual Meeting"). The purpose of the Annual
Meeting is to elect two directors to the Board, ratify the appointment of
PricewaterhouseCoopers as the Corporation's independent public accountants for
the 2000 fiscal year, and approve the first amendment and restatement of the
Stock Plans.
This Proxy Statement, the Proxy Form and the Corporation's Annual Report to
Stockholders are being mailed on or about March 27, 2000 to holders of record
of the Common Stock at the close of business on March 14, 2000 (the "Record
Date").
If the enclosed proxy form (the "Proxy Form") is properly signed, dated and
returned to the Corporation, the individuals identified as proxies thereon
will vote the shares represented by the Proxy Form in accordance with the
directions noted thereon. If no direction is indicated, the proxies will vote
FOR the election of the nominees named herein as directors, FOR the
ratification of the appointment of PricewaterhouseCoopers as the Corporation's
independent public accountants for the 2000 fiscal year, and FOR the approval
of the first amendment and restatement of the Stock Plans. The Corporation's
management does not know of any matters other than those discussed in this
Proxy Statement that will be presented at the Annual Meeting. If other matters
are presented, all proxies will be voted in accordance with the
recommendations of the Corporation's management.
Returning your completed Proxy Form will not prevent you from voting in
person at the Annual Meeting if you are present and wish to vote. In addition,
you may revoke your proxy at any time before it is voted by written notice to
the Secretary of the Corporation prior to the Annual Meeting at the
Corporation's principal executive offices at the address above or by
submission of a later-dated proxy.
Each outstanding share of Common Stock entitles the holder thereof to one
vote (or where a part share shall be owned a proportionate part of the vote of
one share) on each matter to come before the Annual Meeting. As of the Record
Date, excluding treasury stock, there were 13,406,376 shares of Common Stock
outstanding. The presence in person or by proxy of a majority of the shares of
Common Stock outstanding will constitute a quorum for the transaction of
business. Pursuant to Delaware law, abstentions are treated as present and
entitled to vote, and therefore are counted in determining the existence of a
quorum and will have the effect of a vote against any matter requiring the
affirmative vote of a majority of the shares present and entitled to vote at
the Annual Meeting. Under Delaware law, broker "non votes" are considered
present but not entitled to vote, and thus will be counted in determining the
existence of a quorum but will not be counted in determining whether a matter
requiring approval of a majority of the shares present and entitled to vote
has been approved or whether a plurality of the vote of the shares present and
entitled to vote has been cast.
PROPOSAL ONE
Election of Directors
The Certificate of Incorporation of the Corporation provides that the number
of directors shall be not less than three nor more than twelve members, the
exact number of which shall be determined from time to time by resolution
adopted by the Board of Directors, and be divided into three classes,
designated Class I, Class II and Class III. Each class shall consist, as
nearly as may be possible, of one-third of the total number of directors
constituting the entire Board of Directors. The Board is currently comprised
of seven members, two in Class I, two in Class II and three in Class III and
the appointments of the Directors in the said Classes expire at the Annual
Meetings of the Corporation in 2002, 2000 and 2001 respectively.
Directors in Class II, James M C Puckridge and Dr Benito Fiore, whose terms
expire at the upcoming Annual Meeting, have been nominated for re-election.
See "Management--Nominees for Directors" for information with respect to
Messrs. Puckridge and Fiore. The Corporation believes that each nominee is
willing to be elected and to serve. In the event that any nominee is unable to
serve or is otherwise unavailable for election, which is not now contemplated,
the incumbent Board may or may not select a substitute nominee. If a
substituted nominee is selected, all proxies will be voted for the person
selected.
The election of directors at the Annual Meeting requires a plurality of the
votes actually cast by the stockholders present (in person or by proxy) at the
meeting and entitled to vote. There is no cumulative voting as to any matter,
including the election of directors. A withheld vote will have no effect on
the outcome of the election. If no voting instruction is given, the
accompanying proxy will be voted FOR such election. Under the New York Stock
Exchange rules, brokers who hold street name shares can vote in their
discretion in the election of Directors.
The Board of Directors recommends a vote "FOR" the election of the nominee
directors.
PROPOSAL TWO
Ratification of Appointment of Independent Public Accountants
PricewaterhouseCoopers have served as independent public accountants for
fiscal year 1999.
The Board of Directors, upon recommendation of its Audit Committee, has
selected the accounting firm of PricewaterhouseCoopers to serve as independent
auditors of the Corporation with respect to the 2000 fiscal year to examine
the financial statements of the Corporation for the fiscal year ending
December 31, 2000 and to perform other appropriate accounting services.
A representative of PricewaterhouseCoopers is expected to be present at the
Annual Meeting to respond to questions and to make a statement if such
representative desires to do so. If the stockholders do not ratify this
appointment by the affirmative vote of a majority of the shares represented in
person or by proxy at the Annual Meeting, other independent public accountants
will be considered by the Board of Directors upon recommendation by the Audit
Committee.
The Board of Directors recommends a vote "FOR" ratification of the
appointment of PricewaterhouseCoopers as the Corporation's independent public
accountants for fiscal year 2000.
2
PROPOSAL THREE
Approval of the First Amendment and Restatement of the Stock Plans
Introduction:
The Board of Directors (the "Board") of Octel Corp. (the "Corporation")
initially adopted in May 1998, and the stockholders initially approved in May
1998, six stock option plans: The Octel Corp. Performance Related Stock Option
Plan ("PRSOP"), The Octel Corp. Time Restricted Stock Option Plan ("TRSOP"),
The Octel Corp. Company Share Option Plan ("CSOP"), The Octel Corp. Non-
Employee Directors' Stock Option Plan ("NED's Plan"), The Octel Corp. Savings-
Related Share Option Scheme ("Savings Related Plan"), and The Octel Profit
Sharing Scheme ("Profit Sharing Plan") (collectively the "Current Plans"). The
Current Plans provide for the issuance of options for an aggregate of
1,175,000 shares of Common Stock for directors, officers, and employees of the
Corporation. The Corporation has granted options over substantially all of the
shares available under the Current Plans.
The Board has approved the first amendment and restatement of the PRSOP, the
CSOP, the NED's Plan, and the Savings Related Plan (as so amended and
restated, the "Stock Plans") and directed that the Stock Plans be submitted
for approval to the Corporation's Stockholders at the Annual Meeting. The
Stock Plans authorize the Board to issue an aggregate of 2,075,000 shares of
Common Stock, which is an additional 900,000 shares of Common Stock to the
1,175,000 shares that are authorized under the Current Plans.
The stock option grants to date were made in the context of the
Corporation's spin-off from Great Lakes Chemical Corporation in May 1998. The
Corporation made such grants at the time of spin-off, and in the years
immediately following, in order to align the rewards of directors, officers
and employees with the interests of stockholders. The aim was to provide
significant stockholding opportunities, which would serve to motivate and
retain executives and employees through a transition period.
The Corporation has granted substantially all of the shares available under
the Current Plans, and therefore now seeks authorization for additional
shares. The Corporation intends for its future stock option grants to reflect
levels seen in ongoing concerns, rather than the levels found in spin-offs and
initial listings.
The Corporation believes that the 900,000 additional shares requested are,
in terms of dilution, in line with competitive norms. At the request of the
Corporation, a global management consulting firm advised that such a number of
shares would enable the Corporation to grant stock options and performance
shares at levels consistent with median practice among firms of a similar size
to the Corporation. Furthermore, the consultants determined that this total
number of shares was consistent with typical practice among companies in
similar industries.
The two plans not being amended and restated, the TRSOP and Profit Sharing
Plan, were adopted solely to provide incentives to stay with the Corporation
following the spin-off, and as such, the Corporation does not intend to make
further option grants pursuant to these plans.
The Board approved the Stock Plans to increase the number of options for
shares of Common Stock available for equity based incentive grants to enable
the Corporation to continue to attract, motivate and retain qualified
employees, officers and directors. More specifically, the goals of the Stock
Plans are:
.to more closely align director and employee compensation with the
interests of the shareholders;
.to establish compensation levels that are necessary to attract and retain
highly qualified executives;
.to provide performance share options as a reward for meeting strategic
long-term objectives; and
.to encourage stock ownership by executives.
The closing price of the Corporation's Common Stock on the New York Stock
Exchange on March 14, 2000 was $10.125. Copies of the Stock Plans, summaries
of which appear below, have been filed with the
3
Securities and Exchange Commission and will be provided to security holders at
no charge upon request to John Tayler, Corporate Secretary and General
Counsel, Octel Corp., 200 Executive Drive, Newark, Delaware 19702, USA. Tel.
302 454 8100.
Common Features of the Stock Plans
Term
The Stock Plans will terminate on 11th May 2008, the tenth anniversary of
the date of their original approval, unless sooner terminated by the Board.
Termination of the Stock Plans will not affect grants made prior to
termination, but no grants will be made after termination. Options granted
under the PRSOP are non-transferable and vest only following the attainment of
the performance conditions set by the Compensation Committee at the date of
the grant. Options granted under the NED's Plan, CSOP and the Savings Plan are
non-transferable and, subject to the description of the exercise dates under
each of the Stock Plans below, are usually exercisable three years from the
date of the grant. Options granted under the Stock Plans may not be exercised
later than the day preceding the tenth anniversary of the date of grant.
Administration
The Stock Plans are administered by the Compensation Committee, which is a
committee of the Board consisting of two or more Non-Employee directors of the
Corporation. Currently, the Compensation Committee consists of Mr. Martin Hale
and Dr. Benito Fiore. Under the terms of the CSOP and Savings Related Plan,
the powers of administration are entrusted to the Board, or a duly authorized
committee thereof, and the Compensation Committee has been entrusted with the
powers of administration. Subject to the terms of the Stock Plans, the
Compensation Committee has been authorized to (i) select persons to
participate in the plans, (ii) determine the form and substance of the options
granted under the plans, (iii) interpret the plans, and (iv) adopt, amend or
rescind such rules and regulations for carrying out such plans as the
Compensation Committee deems appropriate.
Securities Subject to the Stock Plans
An aggregate of 2,075,000 shares of Common Stock may be issued pursuant to
the Stock Plans (of which 1,175,000 shares were authorized under the Current
Plans). In order to prevent dilution or enlargement of rights under the
options, in the event of a reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger, consolidation, distribution of
assets or other change in the corporate structure of shares of the
Corporation, the type and number of shares available upon exercise and the
exercise price will be adjusted accordingly. Depending on the terms of the
plan, the Compensation Committee, subject to specified limitations, may
advance the date on which an option shall become exercisable.
The Corporation is required at all times either to keep available sufficient
unissued shares of Common Stock to satisfy the exercise of all of the options
granted which have neither lapsed or been exercised or to ensure that
sufficient issued shares of Common Stock will be available to satisfy the
exercise of granted options.
Effect of Cessation of Employment
Subject to the following, under the Stock Plans, vested options can be
exercised by a participant only while he or she is a director or employee of
the Corporation or its subsidiaries.
In the event of the death of the participant, under the PRSOP, NED's Plan
and CSOP, all of the deceased participant's options that have become fully
vested and exercisable may be exercised by his personal representatives for a
period of one year following the death of the participant. Under the Savings
Related Plan, this one year period is limited to the situation where the
participant's death occurred before the Bonus Date (defined as the earliest
date on which a bonus is payable following 36 monthly payments under a
certified contractual savings scheme approved by the UK Board of Inland
Revenue (the "Inland Revenue") (a "Savings
4
Contract")). If the date of death was on or within six months after the Bonus
Date, the personal representatives may exercise the options only during a
period of one year from the Bonus Date.
If the participant, under the NED's Plan and CSOP, ceases to hold office or
employment due to injury, ill-health or disability, redundancy (as defined by
the UK Employment Rights Act 1996), or change of control or transfer of an
undertaking of the participant's employer, the participant may exercise his
options within one year of his cessation of office or employment. Under the
Savings Related Plan, retirement at the age of 65, in addition to the above
conditions, entitles the participant to exercise his options, and such
exercise must be made within six months of the participant attaining the age
of 65. Options granted under the PRSOP lapse upon the cessation of the
participant's employment upon the occurrence of the grounds mentioned therein
(identical to those listed under the NED's Plan and CSOP above) unless
exercise is permitted by the Compensation Committee in its absolute
discretion, in which case the options must be exercised within one year of the
cessation of employment.
The PRSOP and CSOP allow for premature exercise of options upon the
retirement of the participant, or for any other reason in the absolute
discretion of the Compensation Committee if the conditions imposed on grant
have been satisfied.
Effect of Take-Over, Scheme of Arrangement and Winding-Up
In the event any company becomes a parent of the Corporation as a result of
a tender offer for all of the shares of the Corporation or all of the shares
of the same class as the shares underlying the options, under the PRSOP and
NED's Plan, options may be exercised within six months of the acquiring
company becoming the parent provided conditions attached to the options have
been satisfied. In the case of the CSOP and Savings Related Plan, a change of
control by a tender offer in the manner described above triggers the right to
exercise options within six months of the change of control, provided
conditions attached to the options have been satisfied.
Under the CSOP and Savings Related Plan, a scheme of arrangement, resulting
in change of control or otherwise, allows exercise of options within six
months of the approval or effectiveness of the scheme of arrangement as the
case may be.
Under all the Stock Plans, options may be exercised within six months of a
resolution for voluntary winding-up of the Corporation.
Description of each of the Stock Plans
i) The Octel Corp. Performance Related Stock Option Plan
The "PRSOP" provides stock options, the number of options granted being
proportionate to salary. They are exercisable subject to the Corporation
meeting certain performance targets. The performance targets are set at the
absolute discretion of the Compensation Committee, and may be amended,
relaxed, waived, or substituted as the Compensation Committee sees fit after
the grant of the option. Eligible recipients include members of top management
and directors. Initially "Cliff Edge" options were granted but in the future
the Corporation may vary the type of options granted under the PRSOP.
Options granted by the Corporation pursuant to the PRSOP are exercisable
during the employee's lifetime only by him and are not transferable by an
employee other than by operation of a death beneficiary designation made by
the participant in accordance with rules established by the Compensation
Committee.
The Compensation Committee may amend the rules of the PRSOP and the terms of
any outstanding award thereunder from time to time in its discretion in any
manner that it deems appropriate provided that no alteration may be made which
would abrogate or adversely affect the subsisting rights of the participant.
5
The earliest date of exercise of the options is the latest of either the
date mentioned in the option certificate at grant, the satisfaction of the
performance criteria or January 1, 2001. The participant would exercise the
options without any payment. The number of eligible participants is
approximately 50.
As of the date hereof, 274,405 options have been issued and are outstanding
pursuant to this plan.
ii) The Octel Corp. Company Share Option Plan
The "CSOP" is divided into Parts A and B and is administered by the
Compensation Committee. Part A is approved by the Inland Revenue and stock
options are granted at fair market value at the time of grant up to a
statutory limit of $48,600, or such amount fixed by the UK Income and
Corporations Taxes Act 1988. Part B of the CSOP which also provides for the
granting of options at fair market value at the time of grant is not approved
by the Inland Revenue. It does not contain the statutory limits mentioned
above. In addition, the requirement to solicit shareholder approval, if any,
for an amendment to Part A in a manner required by Section 14(a) of the
Securities Exchange Act of 1934 or by furnishing information required by
Section 14(a) is not applicable to Part B. The rules do not permit the
repricing of options granted under either Part A or Part B. Eligible
recipients are executive directors and middle to senior management and are
targeted to encourage performance, recruitment, retention and stock ownership.
Options granted by the Corporation pursuant to the CSOP are exercisable
during the employee's lifetime only by him and are not transferable by an
employee other than by operation of a death beneficiary designation made by
the participant in accordance with rules established by the Compensation
Committee.
The Compensation Committee may amend the terms of any outstanding award
under the CSOP from time to time in its discretion in any manner that it deems
appropriate provided that such alteration is subject to the prior approval of
the Inland Revenue. The Compensation Committee may also amend the terms of the
plan provided approval of the Inland Revenue is also obtained if such
amendment relates to Part A.
The Compensation Committee may also add additional conditions and
limitations that it considers appropriate in granting options, provided that
such additional conditions and limitations shall (i) be objective and set out
in full at the date of the grant, (ii) be such that the right to exercise the
option shall not be dependent upon the further discretion of any person, and
(iii) not be capable of amendment, variation or waiver unless an event occurs
which causes the Compensation Committee to consider that a waived, varied or
amended condition would be a fairer measure of performance and would be no
more difficult to satisfy.
The earliest date of exercise of the options is the latest of the third
anniversary of the grant or the date mentioned in the option certificate at
grant. The options granted under Part A may be exercised by payment of an
exercise price per share not less than the market value of a Corporation's
share at grant. If the shares are subscribed, the exercise price would be the
greater of the nominal price or the market price at grant. For options grant
under Part B, the Corporation has the option of paying a cash sum equivalent
to the difference between the market value of the shares at exercise and the
exercise price calculated in the manner described above.
As of the date hereof, 405,636 options have been issued and are outstanding
pursuant to this plan.
iii) The Octel Corp. Non Employee Directors' Stock Option Plan
The "NED's Plan" was established to encourage Non-Employee Directors to
become stockholders and focus on improving stockholder value, and to provide
commitment to the Corporation in the longer term. The Compensation Committee
administers the NED's Plan. Eligible recipients are directors not employed by
the Corporation. Multiples of annual fees are used to determine the levels of
grants.
Options granted by the Corporation pursuant to the NED's Plan are
exercisable during the Non- Employee Director's lifetime only by him and are
not transferable other than by operation of a death beneficiary designation
made by the participant in accordance with rules established by the
Compensation Committee.
6
The Compensation Committee may amend the rules of the NED's Plan and the
terms of any outstanding award thereunder from time to time in its discretion
in any manner that it deems appropriate provided that no alteration may be
made which would abrogate or adversely affect the subsisting rights of the
participant.
The earliest date of exercise of the options is the latest of the date
mentioned in the option certificate at grant or January 1, 2001. The options
granted may be exercised by payment of an exercise price per share as
determined by the Compensation Committee not less than the nominal value of a
share. If a director exercises an option awarded under the NED's Plan, the
Committee may in lieu of allotting the transfer of shares pay to such director
a cash sum equivalent to the difference between the market value of the shares
at exercise and the exercise price. The number of eligible participants is 6.
As of the date hereof, 127,373 options have been issued and are outstanding
pursuant to this plan.
iv) The Octel Corp. Savings-Related Stock Option Scheme
Under the "Savings Related Plan", all UK-based employees are eligible to
participate. The options are linked to a savings scheme for three years, of up
to $405 per month, which is approved by the Inland Revenue. The Savings
Related Plan is administered by the Compensation Committee.
Options granted by the Corporation pursuant to the Savings Related Plan are
exercisable during the employee's lifetime only by him and are not
transferable by an employee other than by operation of a death beneficiary
designation made by the participant in accordance with rules established by
the Compensation Committee. In addition, a holder may exercise an option
within a period of six months following the date on which he reaches the age
of 65 if he continues to hold office or employment with the Corporation after
that date.
The Board may amend the terms of any outstanding award under the Savings
Related Plan from time to time in its discretion in any manner that it deems
appropriate provided that such alteration is subject to the prior approval of
the Inland Revenue. The Board may also amend the terms of the plan provided,
however, if such amendment is made subsequent to the approval of the Savings
Related Plan by the Inland Revenue, such an amendment would not be effective
until approved by the Inland Revenue. No alteration made by the Board may
abrogate or adversely affect the subsisting rights of option holders.
The exercise period of the options is the six months subsequent to the Bonus
Date under the relevant Savings Contract. The options granted may be exercised
by payment of an exercise price per share, specified at the date of grant,
being not less than the 80% of the market value of a Corporation's share at
grant (the "Option Price"). If the shares are subscribed, the exercise price
would be the greater of the nominal price or the Option Price.
The total number of stock options issued and outstanding under this scheme
as of the date hereof is 126,739 shared between 275 employees.
Certain U.S. Federal Income Tax Consequences
The following is a brief summary of certain U.S. federal income tax
consequences to recipients of option awards under the Stock Plans (the
"Recipients") and the Corporation and does not purport to be a complete
enumeration or analysis of all potential relevant tax effects. This summary is
based upon the current provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), the Treasury Department regulations promulgated
thereunder, and administrative and judicial interpretations thereof, all of
which are subject to change, possibly on a retroactive basis.
Nonqualified Stock Options. A Recipient who is granted a nonqualified stock
option, which generally is a stock option that is not an ISO as defined below
(an "NQO"), generally does not recognize any taxable income, and the company
that is deemed to grant such NQO is generally not entitled to a corresponding
deduction. Upon exercising such NQO, the Recipient generally recognizes
ordinary income (subject to wage and employment tax
7
withholding) equal to the excess of the fair market value of the stock
acquired over the option price of such NQO. The amount of such excess is
generally determined by reference to the fair market value of the applicable
stock on the date of exercise. The Recipient's basis in the stock received is
generally equal to such stock's fair market value on the date of exercise.
Generally, the company that is deemed to grant such NQO is entitled to a
deduction equal to the compensation taxable to the Recipient.
Incentive Stock Options. A Recipient who is granted, or exercises, an
incentive stock option within the meaning of Code section 422 (an "ISO")
generally does not recognize taxable income. However, when a Recipient
exercises an ISO, the excess of the corresponding stock's fair market value on
the exercise date over the option price of such ISO will be included in the
Recipient's alternative minimum taxable income and thereby may subject the
Recipient to an alternative minimum tax. Such alternative minimum tax may be
payable even though the Recipient receives no cash upon the exercise of such
ISO with which to pay such tax. Upon a Recipient's disposition of stock
acquired pursuant to the exercise of an ISO (i) more than one year after the
date of exercise of the ISO, and (ii) more than two years after the date of
grant of the ISO (collectively, the "Required Holding Periods"), the Recipient
generally recognizes long-term capital gain or loss, as the case may be,
measured by the excess of the amount realized by the Recipient from such
disposition over the exercise price of such ISO. The company that is deemed to
grant such ISO is not entitled to any tax deduction by reason of the grant of
exercise of such ISO, or a disposition of stock acquired upon the exercise of
such ISO after the Required Holding Periods have been satisfied.
Generally, if a Recipient disposes of stock acquired pursuant to the
exercise of an ISO before the expiration of the Required Holding Periods (a
"Disqualifying Disposition"), the difference between the exercise price of
such ISO and the lesser of (i) the fair market value of the corresponding
stock upon the date of exercise, and (ii) the selling price of the
corresponding stock, will constitute compensation taxable to the Recipient as
ordinary income. The company that is deemed to grant such ISO generally is
allowed a corresponding tax deduction equal to the amount of compensation
taxable to the Recipient. The excess, if any, of such selling price over such
fair market value should be taxable to the Recipient as capital gain (long-
term or short-term, depending upon whether the Recipient held the stock for
more than one year). The company that is deemed to grant the ISO is not
allowed a deduction with respect to any such capital gain recognized by the
Recipient.
General. The foregoing discussion deals only with certain U.S. federal
income tax consequences to Recipients and the Corporation. The laws of any
other jurisdiction that could be relevant either to the Corporation, a
subsidiary of the Corporation, or a Recipient are not discussed herein. In
particular, the tax consequences under the laws of the U.K., where a
substantial number of the Recipients will reside and a substantial portion of
the Corporation's operations occur, are not addressed herein. Moreover, the
discussion above is relevant to the Corporation only to the extent option
awards are made with respect to services performed in the United States, and
is relevant to a Recipient only to the extent the Recipient either performs
services for the Corporation in the United States or is a citizen or resident
of the United States.
Voting. The affirmative vote of a majority of the votes cast at the Annual
Meeting by the holders of shares of Common Stock represented in person or
proxy is required for the approval of the Stock Plans, provided that the total
vote cast on this proposal represents a majority of the shares of Common Stock
entitled to vote.
The Board of Directors recommends a vote "FOR" the approval of the Stock
Plans.
8
MANAGEMENT
The following sets forth certain information as of March 14, 2000 with
respect to the Corporation's nominees for director, the Corporation's
continuing directors, and certain officers of the Corporation and its
subsidiaries (including all executive officers of the Corporation). Officers
of the Corporation serve at the discretion of the Board of Directors.
A. Nominees for Directors
Class II Directors who will serve until the 2000 Annual Meeting and are
seeking re-election
Mr James M C Puckridge - Director since May 7, 1998. Age: 64
James Puckridge was Chairman of Elf Atochem UK Ltd., a position he assumed in
1990 until his retirement on December 31, 1998. Prior to that he was Managing
Director of the same organization. He is also Chairman of Ato Findley UK Ltd
and Elf Atochem UK Pension Fund Trustee Co. Ltd. He is a Non-Executive
Director of LINPAC Group Ltd, an international manufacturer and converter of
paper, plastics and metal products primarily for the packaging industry, and
Thomas Swan and Co Ltd, a UK based specialty chemical corporation. He is a
past President of the British Plastics Federation and a former Council Member
of the Chemicals Industries Association, where he was Chairman of the General
Purpose and Finance Committee.
Dr Benito Fiore - Director since May 7, 1998. Age: 62
Benito Fiore is a specialist in the chemical industry retained by the chemical
practices division of A T Kearney Limited, part of a global consultancy
organization. Between 1990 and 1995 he was Chairman and Chief Executive
Officer of Enichem UK Ltd. Prior to this he held a number of executive
directorships in the Montedison Group working in Denmark, Canada, Italy and
the USA. He is a Member of the Council of the Italian Chamber of Commerce, an
Associate Member of the Council of the Chemical Industries Association and a
Fellow of the Institute of Directors.
B. Continuing Directors
Class I Directors who will serve until the 2002 Annual Meeting
Mr Thomas M Fulton - Director since February 27, 1998. Age: 66
Thomas Fulton served as President and Chief Executive Officer of Landauer
Inc., a provider of radiation monitoring services until his retirement on
December 31, 1998. He remains a Director of that Company. Prior to joining
Landauer in 1978, his career included various management positions at Union
Carbide Corporation, BASF Corporation and ICN Pharmaceuticals, Inc. Mr Fulton
has also served on the Board of Great Lakes Chemical Corporation since 1995
and is on the Boards of The Advocate South Suburban Hospital and the Bethel
Community Facility and is Chairman of the Board of Trustees of the Chicago
Theological Seminary.
Mr Charles M Hale - Director since May 7, 1998. Age: 64
Charles Hale is Chairman of Donaldson, Lufkin & Jenrette International, the
London based subsidiary of Donaldson, Lufkin & Jenrette Inc., a major New York
based investment bank. Prior to 1984, he was a general partner of Lehman
Brothers Kuhn Leob and Managing Director of AG Becker International. Mr Hale
is a graduate of Stanford University and Harvard Business School. Charles Hale
is the brother of Martin Hale who is also a Director of the Corporation.
Class III members who will serve until the 2001 Annual Meeting
Dr Robert E Bew - Director and Chairman since May 7, 1998. Age: 63
Robert Bew serves as Non-Employee Chairman of the Corporation and since
October 1, 1999 has provided additional advice and services to the Corporation
on corporate development matters. He is also currently Chairman of the
European Process Industries Competitiveness Centre, an organization
specializing in increasing
9
competitiveness in process industries. He spent 35 years with ICI, most
recently as CEO of ICI's Chemical & Polymer division in Teesside, UK.
Previously he served as head of Corporate Planning and between 1995 and 1997
was also Chairman of Phillips Imperial Petroleum Ltd., a refinery joint
venture between ICI and Phillips Petroleum.
Mr Dennis J Kerrison - Director since February 27, 1998. Age: 55
Dennis Kerrison serves as President and Chief Executive Officer of the
Corporation. He joined the Corporation's wholly owned subsidiary The
Associated Octel Company Limited as Managing Director in May 1996 as well as
serving as a Group Vice President and Officer of that Corporation's then
owners, Great Lakes Chemical Corporation. Between 1992 and 1996 he was a
Director and Officer of Hickson International plc, lastly as Chief Executive
Officer. Prior to this he worked in senior management roles for specialty
chemical companies, in Europe and the United States, notably Rhone Poulenc,
Rohm & Haas and RTZ Chemicals.
Mr Martin M Hale - Director since February 27, 1998. Age: 59
Martin Hale is Chairman of the Board of Directors of Great Lakes Chemical
Corporation, a position he has held since 1995. He has served on the Great
Lakes Board of Directors since 1978. Mr Hale is also a director of OSCA Corp.,
a company engaged in the provision of services to the oil and gas drilling
industries, having been appointed to that position in February 2000. From 1983
until December 31, 1999 Mr Hale was the Executive Vice President and a
Director of Hellman Jordan Management Co. Inc., a registered investment
advisor specialising in asset management and a wholly owned subsidiary of
United Asset Management Corporation. Prior to 1983 Mr Hale was President and
Chief Executive Officer of Marsh & McClennan Asset Management Company. He also
serves as a Director of the Student Conservation Association, as Chairman of
the Board of Governors of the School of The Museum of Fine Arts, Boston and as
a Trustee of the Museum of Fine Arts. Martin Hale is the brother of Charles
Hale who is also a director of the Corporation.
C. Officers (Other than those who are Directors and Listed above)
H Alan Hanslip (Appointed December 22, 1998) Age: 52
Alan Hanslip currently serves as Vice President, Human Resources of the
Corporation having joined its subsidiary The Associated Octel Company Limited
in a similar capacity in November 1996. Previously, Mr Hanslip served as
Director of Human Resources for British Nuclear Fuels plc.
Dr Geoffrey J Hignett (Appointed December 22, 1998) Age: 49
Geoffrey Hignett serves as Vice President, Specialty Chemicals, of the
Corporation having joined its subsidiary The Associated Octel Company Limited
in February 1997 as Business Director, Petroleum Specialties. From May 1993 to
January 1997 he served as Director of Technology and Business Director of
Water Additives for a division of FMC Corporation, a multinational
engineering, manufacturing and chemicals company and prior to that as
Technical Director of the Metals and Electronics Division of Laporte plc.
Alan G Jarvis (Appointed April 1, 1998) Age: 50
Alan Jarvis serves as Vice President and Chief Financial Officer of the
Corporation having joined its subsidiary The Associated Octel Company Limited
in a similar capacity in October 1997. Prior to this Mr Jarvis served as Group
Finance Director of the Power Plant Group of GEC Alsthom, a world-wide Anglo-
French joint venture in the power generation business. From 1987 to 1994, Mr
Jarvis served at different times as Property Director, Group Finance Director
and Group Financial Controller for Simon Engineering PLC, a British
engineering corporation specializing in hydraulic platforms, process plant
contracting and chemical storage.
John P Tayler (Appointed May 11, 1999) Age: 44
John Tayler serves as Corporate Secretary and General Counsel to the
Corporation having been appointed Corporate Secretary on May 11, 1999 and
Corporate Secretary and General Counsel on February 21, 2000. Prior to this Mr
Tayler was Company Secretary of Creative Publishing plc having joined them in
1997 from Allied Colloids Group plc where he had been Company Secretary from
1988.
10
Steven W Williams (Appointed December 22, 1998) Age: 44
Steven Williams serves as Vice President, Group Operations of the Corporation
having joined its subsidiary The Associated Octel Company Limited as Director
of Manufacturing in November 1995. Prior to this he acted as Operations
Manager for Esso at their Fawley Oil Refinery.
D. Family Relationships
Charles Hale who is a Director of the Corporation is the brother of Martin
Hale who is also a Director of the Corporation. There are no other family
relationships between any of the persons referred to in sections (A), (B) or
(C) above.
Information about the Board of Directors
The Board of Directors met four times during fiscal 1999. Each Director
attended all of the meetings of the Board of Directors and any committees on
which such director served in fiscal 1999. The Corporation has Executive,
Finance, Audit, Safety Health and Environmental, and Compensation Committees,
the members of which are as shown below.
The Executive Committee has all the powers and authority of the Board of
Directors, except those powers specifically reserved to the Board of Directors
by Delaware law, the Certificate of Incorporation or the Bylaws of the
Corporation or otherwise to act for the Board, with certain restrictions, on
behalf of the Corporation. Dr Robert Bew, Dennis Kerrison, Martin Hale and
James Puckridge have served as members of this Committee since its formation
on May 11, 1998. The Committee met three times during fiscal 1999.
The Finance Committee reviews and assesses the financial affairs of the
Corporation and provides advice to the Board of Directors on financial
policies and the financial condition of the Corporation. Dr Robert Bew, Dennis
Kerrison and Charles Hale have served as members of this Committee since its
formation on May 11, 1998. The Committee met once during fiscal 1999.
The Audit Committee reviews the adequacy of internal controls and the work
of both the independent and internal auditors, consults with the independent
public accountants concerning the audit report and the related management
letter, and makes recommendations to the Board concerning the selection of
independent accountants. Dr Benito Fiore, Thomas Fulton and Charles Hale have
served as members of this Committee since its formation on May 11, 1998. The
Committee met five times during fiscal 1999.
The Safety, Health and Environmental Committee assesses the Corporation's
safety, health and environmental policies and performance and makes
recommendations to management regarding the promotion and maintenance of
standards of compliance and performance. Dr Benito Fiore, Thomas Fulton and
James Puckridge have served as members of this Committee since its formation
on May 11, 1998. The Committee met twice during fiscal 1999.
The Compensation Committee reviews management compensation programs,
approves compensation terms and agreements for senior executive officers,
reviews changes in compensation for senior executive officers and administers
the Corporation's restricted stock and stock option plans. Martin Hale and Dr
Benito Fiore have served as members of this Committee since its formation on
May 11, 1998. Dr Robert Bew served as a member of this Committee from its
formation on May 11, 1998, but resigned from the Committee on December 31,
1999 in view of his receipt of additional remuneration from the Corporation
pursuant to a consultancy agreement. The Committee met four times during
fiscal 1999.
The Corporation does not have a Nominating Committee.
11
Compensation of Directors
Retainer, Committee and Meetings Fees
Non-employee Directors receive compensation for their services in the form
of an annual retainer, Committee Chairman fees and meeting fees. Octel Corp.
employees are not paid any fees or compensation for being on the Board or on
any Board committee.
The Non-employee Chairman of the Board receives an annual retainer of
$115,000 to recognize his responsibilities to Octel Corp. In addition, the
current Non-employee Chairman receives fees in respect of a consultancy
agreement at the rate of $97,200 per annum. All other Non-employee Directors
receive an annual retainer of $23,000. All Non-employee Directors receive an
annual retainer of $5,000 for each committee they chair, $1,650 per day for
attendance at Board Meetings and $825 per day for attendance at Committee
Meetings and for special assignments. They are also reimbursed out of pocket
expenses. It is the policy of the Board to ask the Compensation Committee to
review the fees paid to Directors each year.
Non-employee Directors received stock options to the equivalent of three
times their annual fees at an option price of $13.275 during fiscal 1999. See
"Executive Compensation and Other Information--Stock Option Plans." The stock
options granted to the Non-employee Directors were:
April 14, August 9,
1999 1999
--------- ---------
Dr Robert Bew.......................................... 20,557 10,278
Martin Hale............................................ 7,450 3,725
Thomas Fulton.......................................... 7,450 3,725
Charles Hale........................................... 7,450 3,725
James Puckridge........................................ 7,450 3,725
Dr Benito Fiore........................................ 7,450 3,725
The options granted on April 14, 1999 vest on January 1, 2002 and are
exercisable until December 31, 2008. The options granted on August 9, 1999
vest on January 1, 2003 and are exercisable until August 8, 2009.
Deferred and Long-Term Compensation
None were awarded or in place in the last fiscal year.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act 1934, as amended, requires the
Corporation's directors and officers, and persons who beneficially own more
than ten percent of a registered class of the Corporation's equity securities,
to file initial reports of ownership and reports of changes in ownership of
the Corporation's equity securities with the Securities and Exchange
Commission (the "SEC"). Such persons are required by SEC regulations to
furnish the Corporation with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to the
Corporation, or written representations that no Form 5 filings were required,
the Corporation believes that each of its officers, directors and greater than
ten percent beneficial owners complied with all Section 16(a) filing
requirements applicable to them during fiscal 1999.
12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Corporation's Common Stock as of February 29, 2000
by holders of more than five percent of its Common Stock, the directors of the
Corporation, the executive officers of the Corporation included in the summary
Compensation Table ("Named Executives") set forth under the caption "Executive
Compensation and Other Information" who were employed by the Corporation as of
February 29, 2000, and all directors and executive officers of the Corporation
as a group. As of February 29, 2000, excluding treasury stock, there were
13,451,522 shares of Common Stock outstanding. To the knowledge of the
Corporation, each stockholder has sole voting and investment power with
respect to the shares indicated as beneficially owned, unless otherwise
indicated in a footnote. Unless otherwise indicated, the business address of
each person is the Corporation's corporate address.
BENEFICIAL OWNERS
Amount and
Nature of
Beneficial Percent of
Name and Address of Beneficial Owner Ownership Class
- ------------------------------------ ---------- ----------
Baupost Group Inc. (1)................................... 2,086,000 15.29
44 Brattle St., 5th Floor,
Cambridge, MA 02138
T Rowe Price Associates, Inc. (2)........................ 1,789,825 13.1
100 E. Pratt Street
Baltimore, Maryland 21202
FMR Corp. (3)............................................ 1,472,000 10.79
82 Devonshire Street,
Boston, MA 02109
Kestrel Investment Management Corp. (4).................. 945,600 6.8
411 Borel Avenue, Suite 403,
San Mateo, CA 94402
Jeffrey S Halis (5)...................................... 832,260 6.1
500 Park Avenue, 5th Floor
New York, NY 10022
MANAGEMENT
Shares
Underlying
Shares Options
Owned Exercisable
Directly or Within Percent of
Name Indirectly 60 Days Total Class
---- ----------- ----------- ------- ----------
Dr Robert E Bew.................... 2,051 2,051 *
Dr Benito Fiore.................... 500 500 *
Thomas M Fulton.................... 825 825 *
Charles M Hale (6)................. 49,960 49,960 *
Martin M Hale (6).................. 54,370 54,370 *
James M C Puckridge................ 500 500 *
Dennis J Kerrison.................. 22,690 45,158 67,848 *
Alan G Jarvis...................... 11,135 19,171 30,306 *
H Alan Hanslip..................... 8,090 13,036 21,126 *
Dr Geoffrey J Hignett.............. 9,664 16,231 25,895 *
Steven W Williams.................. 11,135 19,171 30,306 *
Directors and Executive Officers as
a group (11 persons).............. 170,920 112,767 283,687 2.11%
13
- --------
Notes:
*Less than 1%.
(1) Based solely upon a Schedule 13G dated February 10, 2000 filed jointly by
The Baupost Group LLC ("Baupost"), SAK Corporation and Seth A Klarman,
Baupost has sole voting and dispositive power with respect to 2,086,000
shares of Common Stock, SAK Corporation is the manager of Baupost and Seth
A Klarman, as the sole director of SAK Corporation and a controlling
person of Baupost, may be deemed to have beneficial ownership of the
securities beneficially owned by Baupost. Furthermore, based solely upon
such Schedule 13G, securities reported as being beneficially owned by
Baupost include securities purchased on behalf of a registered investment
company and various limited partnerships.
(2) Based solely upon a Schedule 13G dated February 14, 2000 filed jointly by
each of T. Rowe Price Associates, Inc. ("Price Associates") and T. Rowe
Price Capital Appreciation Fund ("Capital Appreciation"), the shares of
Common Stock shown as beneficially owned by Price Associates are owned by
various individual and institutional investors including Capital
Appreciation (which owns 835,000 shares, representing 6.1% of the shares
of Common Stock outstanding), to which Price Associates serves as an
investment advisor with power to direct investments and/or sole power to
vote the securities. For the purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such securities.
(3) Based solely upon a Schedule 13G dated February 14, 2000 filed jointly by
FMR Corp. ("FMR"), Edward C Johnson 3d ("Mr Johnson"), Abigail P Johnson
("Ms Johnson"), Fidelity Management & Research Company ("FM&R") and
Fidelity Low-Priced Stock Fund ("Fidelity Stock"), various persons have
the right to receive or the power to direct the receipt of dividends from,
or the proceeds for the sale of, the Common Stock shown as beneficially
owned by FMR, including Fidelity Stock (which owns 1,472,000 shares,
representing 10.79% of the shares of Common Stock outstanding).
(4) Based solely upon a Schedule 13G dated February 14, 2000 filed jointly by
Kestrel Investment Management Corporation ("Kestrel"), David J Steirman
and Abbot Keller, Kestrel is deemed to be the beneficial owner of 945,600
shares of Common Stock with sole voting power for 770,400 of such shares
and sole dispositive power for all 945,600 of such shares, pursuant to
separate arrangements whereby it acts as investment advisor to certain
persons in which it also holds an ownership interest, which persons have
the right to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, such Common Stock. Furthermore, based
solely upon such Schedule 13G, David J Steirman and Abbot J. Keller are
deemed to be the beneficial owners of 945,600 shares of Common Stock
pursuant to their 100% ownership of Kestrel.
(5) Based solely upon a Schedule 13D dated January 5, 2000 the shares of
Common Stock shown as being beneficially owned by Jeffrey S Halis include
411,300 shares owned by Tyndall Partners, L.P. ("Tyndall"), 392,500 shares
owned by Tyndall Institutional Partners, L.P. ("Tyndall Institutional"),
and 28,460 shares owned by Madison Avenue Partners, L.P. ("Madison").
Furthermore, based solely upon such Schedule 13D, pursuant to the
Agreement of Limited Partnership of each of Tyndall, Tyndall Institutional
and Madison, and the Investment Management Agreement of Halo
International, Jeffrey S. Halis possesses sole power to vote and direct
the disposition of all the shares of Common Stock owned by each of
Tyndall, Tyndall Institutional, Madison, and Halo International,
respectively. Jeffrey S Halis' interest in the Common Stock as set forth
herein is limited to the extent of his pecuniary interest, if any, in
Tyndall, Tyndall Institutional, Madison and Halo International
respectively.
(6) In the case of Charles Hale and Martin Hale, the figures shown above for
each of them include 47,690 shares held by them as trustees in family
trusts. Charles Hale and Martin Hale disclaim beneficial ownership of
these 47,960 shares held in a trustee capacity.
14
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth certain information regarding compensation
paid or accrued to Dennis J Kerrison, President and Chief Executive Officer of
the Corporation, and to each of the Corporation's four next most highly
compensated executive officers for services rendered to the Corporation and
the previous owners of Octel during fiscal 1999, 1998 and 1997.
Summary Compensation Table
Annual Compensation Long Term
(1) Compensation (1)
---------------------- -----------------------
Securities, Restricted All Other
Fiscal Salary Bonus Underlying Stock Compensation
Name & Principal Position Year ($) ($) Options/SARs Awards ($) (1)
- ------------------------- ------ ------- ------- ------------ ---------- ------------
Dennis J Kerrison........ 1999 462,327 335,283 208,596 -- 409,272(2)
President and Chief
Executive Officer 1998 389,721 334,980 1,242 -- 521,242
1997 283,503 127,656 -- 69,274
Alan G Jarvis (3)........ 1999 256,760 128,304 80,845 -- 165,989(4)
Vice President and Chief
Financial Officer 1998 221,164 112,692 -- -- 274,902
1997 39,058 15,593 -- 12,390
Steven W Williams........ 1999 243,000 134,136 80,845 -- 148,948(5)
Vice President, Group
Operations 1998 215,019 121,281 1,242 -- 264,296
1997 149,853 44,186 -- -- 55,136
Dr Geoffrey J Hignett
(6)..................... 1999 205,743 116,860 68,450 -- 127,289(7)
Vice President,
Specialty Chemicals 1998 188,245 97,644 -- -- 233,146
1997 139,730 31,109 -- -- 88,949
H Alan Hanslip........... 1999 185,300 78,654 54,947 -- 104,331(8)
Vice President, Human
Resources 1998 160,324 82,414 1,242 -- 190,865
1997 96,580 31,733 -- 32,470
- --------
Notes:
(1) All the above Executives are paid in pounds sterling. Their salaries were
based upon the United Kingdom salary parameters set before the spin-off by
the Compensation Committee of Great Lakes Chemical Corporation. With the
help of external consultants these salaries were re-confirmed by the
Compensation Committee of Octel Corp. No salary increases were awarded
from the date of the spin-off to the end of fiscal 1999. For the purposes
of the Compensation table an exchange rate of (Pounds)1--$1.62 is used.
(2) The President and Chief Executive Officer received an additional bonus of
$169,303 in recognition of his contribution following the spin-off from
Great Lakes Chemical Corporation (the "Distribution"). In fiscal 1999 he
also received a pension benefit valued at $200,879 plus other benefits
mainly consisting of a leased company car valued at $22,676.
(3) Alan Jarvis became an employee of the Corporation effective October 13,
1997.
(4) In recognition of his contribution following the Distribution Alan Jarvis
received an additional bonus of $71,873. In fiscal 1999, he also received
a pension benefit valued at $66,329 plus other benefits mainly consisting
of a leased company car valued at $14,745.
(5) In recognition of his contribution following the Distribution Steven
Williams received an additional bonus of $71,873. In fiscal 1999, he also
received a pension benefit valued at $57,232 plus other benefits mainly
consisting of a leased company car valued at $13,123.
(6) Dr Geoffrey Hignett became an employee of the Corporation effective
February 1, 1997.
(7) In recognition of his contribution following the Distribution Dr Geoffrey
Hignett received an additional bonus of $60,787. In fiscal 1999, he also
received a pension benefit valued at $48,751 plus other benefits mainly
consisting of a leased company car valued at $13,618.
(8) In recognition of his contribution following the Distribution Alan
Hanslip received an additional bonus of $48,875. In fiscal 1999, he also
received a pension benefit valued at $37,734 plus other benefits mainly
consisting of a leased company car valued at $14,259.
Stock Option Plans
The Corporation has six stock option plans, the first four of which provide
for grants of options to key employees and Non-employee Directors. Two other
plans provide stock on an equal basis to all employees. The Current Plans,
which are administered by the Compensation Committee of the Board of Octel
Corp., were approved prior to the Distribution.
15
The six plans in existence are:
i) The Octel Corp. Company Share Option Plan;
ii) The Octel Corp. Performance Related Stock Option Plan;
iii) The Octel Corp. Time Restricted Stock Option Plan;
iv) The Octel Corp. Non-Employee Directors' Stock Option Plan;
v) The Octel Corp. Savings Related Share Option Scheme; and
vi) The Octel Corp. Profit Sharing Share Scheme.
Options, and the conditions relating thereto, granted under the above plans
are determined by the Compensation Committee and all the plans were approved
prior to the Distribution. The limit set by Great Lakes Chemical Corporation
for the number of shares of Common Stock which can be issued or awarded under
the Current Plans is 1,175,000 in the aggregate. The Stock Plans, which the
Board approved in February 2000 and which are submitted to the stockholders
for approval at the Annual Meeting, increases this aggregate amount to
2,075,000 shares of Common Stock in the aggregate. See "Proposal Three: The
approval of the first amendment and restatement of the Octel Corp. Performance
Related Stock Option Plan, the Octel Corp. Company Share Option Plan, the
Octel Corp. Non- Employee Directors' Stock Option Plan, and the Octel Corp.
Savings-Related Share Option Scheme."
The options granted to the Named Executives during fiscal 1999 pursuant to
the Current Plans described above are set out in the following table.
Option/SAR Grants in Last Fiscal Year
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term
------------------------------------------------------ --------------------------
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in price Vesting Expiration 0% 5% 10%
Name Granted (1) 1999 ($/Sh) Date Date $ (2) ($) (2) ($) (2)
---- ------------ ------------ -------- -------- ---------- -------- ------- ---------
Dennis J Kerrison:
TRSOP.................. 45,158 5.26 0 12/31/99 12/31/2007 609,633 928,245 1,361,882
PRSOP (3).............. 31,451 3.66 0 1/1/01 01/01/2008 424,589 646,491 948,504
PRSOP (3).............. 35,959 4.19 0 1/1/02 12/31/2008 436,003 692,842 1,060,989
CSOP................... 96,028 11.18 13.275 1/1/03 08/08/2009 0 719,661 1,901,063
Total................ 208,596
Alan G Jarvis:
TRSOP.................. 19,171 2.23 0 12/31/99 12/31/2007 258,809 394,070 578,162
PRSOP (3).............. 11,868 1.38 0 1/1/01 01/01/2008 160,218 243,953 357,917
PRSOP (3).............. 13,569 1.58 0 1/1/02 12/31/2008 164,524 261,441 400,360
CSOP................... 36,237 4.22 13.275 1/1/03 08/08/2009 0 271,570 717,383
Total................ 80,845
Steven W Williams:
TRSOP.................. 19,171 2.23 0 12/31/99 12/31/2007 258,809 394,070 578,162
PRSOP (3).............. 11,868 1.38 0 1/1/01 01/01/2008 160,218 243,953 357,917
PRSOP (3).............. 13,569 1.58 0 1/1/02 12/31/2008 164,524 261,441 400,360
CSOP................... 36,237 4.22 13.275 1/1/03 08/08/2009 0 271,570 717,383
Total................ 80,845
Dr Geoffrey J Hignett:
TRSOP.................. 16,231 1.89 0 12/31/99 12/31/2007 219,119 333,636 489,497
PRSOP (3).............. 10,049 1.17 0 1/1/01 01/01/2008 135,662 206,562 303,059
PRSOP (3).............. 11,489 1.34 0 1/1/02 12/31/2008 139,304 221,365 338,989
CSOP................... 30,681 3.57 13.275 1/1/03 08/08/2009 0 229,932 607,391
Total................ 68,450
H Alan Hanslip:
TRSOP.................. 13,036 1.52 0 12/31/99 12/31/2007 175,986 267,962 393,142
PRSOP (3).............. 8,070 0.94 0 1/1/01 01/01/2008 108, 945 165,883 243,376
PRSOP (3).............. 9,227 1.07 0 1/1/02 12/31/2008 111,877 177,782 272,247
CSOP .................. 24,641 2.87 13.275 1/1/03 08/08/2009 0 184,667 487,817
Total................ 54,974
16
- --------
Notes:
(1) In the event of a change of control of the Corporation, all options become
fully vested and exercisable. In order to prevent dilution or enlargement
of rights under the options, in the event of a reorganization,
recapitalization, stock split, stock dividend, combination of shares,
merger, consolidation, distribution of assets or other change in the
corporate structure of shares of the Corporation, the type and number of
shares available upon exercise and the exercise price will be adjusted
accordingly. The Compensation Committee may, subject to specified
limitations, advance the date on which an option shall become exercisable.
(2) Amounts reflect assumed rate of appreciation from the fair market value on
the date of grant as set forth in the Securities and Exchange Commission's
executive compensation disclosure rules. Actual gains, if any, on stock
option exercises depend on future performance of the Common Stock and
overall stock market conditions. No assurance can be made that the amounts
reflected in these columns will be achieved.
(3) The exercise of these options is dependent on the Corporation achieving
specific cash generation targets over a 3 year period.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options
Options at December 31, at December 31, 1999
Shares Acquired Value Realized 1999 Exercisable/ (2) Exercisable/
Name On Exercise ($(1) Unexercisable Unexercisable
---- --------------- -------------- ----------------------- --------------------
Dennis J Kerrison....... -- -- 45,158/ $468,514/
164,680 $ 699,379
Alan G Jarvis........... -- -- 19,171/ $198,899/
61,674 $263,909
Steven W Williams....... -- -- 19,171/ $198,899/
62,916 $263,909/
Dr Geoffrey J Hignett... -- -- 16,231/ $168,397/
52,219 $223,457
H Alan Hanslip.......... -- -- 13,036 $135,248/
43,180 $179,456
- --------
Notes:
(1) As of the end of the fiscal year, none of the options held by the named
executive officers had been exercised.
(2) The value of the in-the-money options is based on Octel Corp.'s NYSE
closing Common Stock price on December 31, 1999 of $10.375.
Pension Plan
The Corporation operates three separate pension plans for executives which,
together, are designed to provide the equivalent of 1/40 of final salary (or
the average of the last 3 years of service if higher) for each year of service
( 1/30 for the CEO) with Octel Corp. The three plans are:
i) The Octel Pension Plan;
ii) The Octel Senior Management Plan; and
iii) The Octel Funded Unapproved Pension Plan.
The reason for having three plans is to make maximum use of UK Inland
Revenue approved pension arrangements to optimize both the Executive's and the
Corporation's tax position.
Normal retirement age is the end of the month following the Executive's 65th
birthday.
Pension Plan Table
5 Years 10 Years 15 Years 20 Years 25 Years
Final ------------- --------------- --------------- --------------- ---------------
Earnings @1/30 @1/40 @1/30 @1/40 @1/30 @1/40 @1/30 @1/40 @1/30 @1/40
$ $ $ $ $ $ $ $ $ $ $
- -------- ------ ------ ------- ------- ------- ------- ------- ------- ------- -------
150,000 18,750 37,500 56,250 75,000 93,750
250,000 31,250 62,500 93,750 125,000 156,250
350,000 43,750 87,500 131,250 175,000 218,750
450,000 75,000 56,250 150,000 112,500 225,000 168,750 300,000 225,000 375,000 281,250
550,000 91,666 68,750 183,233 137,500 275,000 206,250 366,666 275,000 458,333 343,750
17
As of December 31, 1999, the final base salary of the Named Executives and
eligible credited years under the pension plans were as follows:
Base Eligible
Name Salary Years
---- -------- --------
Dennis Kerrison............................................ $429,300 3
Alan Jarvis................................................ $243,000 2
Steven Williams............................................ $243,000 4
Dr Geoffrey Hignett........................................ $205,740 2
Alan Hanslip............................................... $165,240 3
Change in Control and Severance Agreements
The Corporation recognizes that establishing and maintaining a strong
management team is essential in protecting and enhancing the interests of the
Corporation and its stockholders. In order to ensure management stability and
the continuity of key management personnel, the Corporation has entered into
Change-in-Control agreements with each of the Named Executives. The agreements
provide that in the event of a take-over or fundamental restructuring of the
business, which results in the loss of the Executive's position, such
Executive is entitled to compensation of three years' pay plus benefits and
further that all stock options and grants to such Executives shall vest
immediately.
Employment Agreements
Each Executive also has an employment agreement which complies with UK
employment law and which provides for, amongst other things, 30 days of annual
vacation, the provision of a Corporation car, private health insurance,
pension provision, life insurance, permanent health insurance and a rolling
one year term of employment (2 years for the CEO) which can be terminated by
the Corporation upon twelve months notice (twenty four months for the CEO) and
six months (twelve months for the CEO) from the Executive.
Life Insurance Cover
Named Executives are covered by two basic plans. The Corporation's
accidental death plan provides up to six times annual salary in the event of
accidental death for whatever reason. Also, as a component of the Pension
plans, up to four times annual salary is payable for death whilst in service
with the Corporation.
Non-employee Directors have accidental cover while on Corporation business
up to a maximum of $500,000 in the case of death or injury. Cover ceases upon
termination of employment with the Corporation and there are no cash surrender
values.
18
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
The Compensation Committee reviews and makes recommendations to the Board
regarding salaries, compensation and benefits of executive officers and key
employees of the Corporation with the assistance of external advisors and
develops and administers programs providing stock-based incentives. After
consideration of the Compensation Committee's recommendations, the full Board
approves the salaries and bonuses and the stock and benefit programs for the
Corporation's executive officers.
Compensation Philosophy
The compensation philosophy of the Corporation is to link executive
compensation to continuous improvements in corporate performance and increases
in stockholder value. The goals of the Corporation's executive compensation
programs are as follows:-
. To establish pay levels that are necessary to attract and retain highly
qualified executives in light of the overall competitiveness of the
market for high quality executive talent and the Corporation's unique
business profile.
. To recognize superior individual performance, new responsibilities and
new positions within the Corporation.
. To balance short-term and long-term compensation to complement the
Corporation's annual and long-term business objectives and strategy and
to encourage executive performance in the fulfillment of those
objectives.
. To provide variable compensation opportunities based on the Corporation's
performance.
. To encourage stock ownership by executives.
. To align executive remuneration with the interests of stockholders.
Stock Ownership
The Compensation Committee believes that it can align the interests of
stockholders and executives by providing those persons who have substantial
responsibility over the management and growth of the Corporation with an
opportunity to establish a meaningful ownership position in the Corporation.
Compensation Components
Corporate and individual performances are recognized through both short and
long term incentive compensation plans designed to align the interests of
executives and stockholders. The total compensation program consists of three
components; base salary, which reflects the executive's level of
responsibility and individual performance; annual incentive compensation
awards in the form of cash bonuses, which reflect both corporate and
individual performance; and long term incentive compensation in the form of
stock options. The latter two components provide at risk compensation which is
linked directly to financial results. The Committee considers all elements of
compensation when determining an individual's total compensation.
Short-Term Incentive Compensation
Each year the Committee reviews the base salary of the President and Chief
Executive Officer and, in conjunction with the President and Chief Executive
Officer, reviews the base salaries of other corporate officers; however, the
Committee makes the final compensation decisions concerning such Officers. The
median level of the executive market as assessed by external surveys is used
as the main criterion in determining base salary. The levels and scope of
responsibility, experience, and corporate and business unit performances, as
well as individual performance, are also key criteria in base salary
determination.
19
A Management Incentive Compensation Plan ("MICP") provides incentive
compensation in the form of cash bonuses to executive officers, managers and
other selected key employees who have a broad impact on the Corporation's
performance. The philosophy for incentive compensation is to provide awards
when financial objectives are achieved and provide no or reduced awards when
the objectives are not achieved. The awards granted in 1999 were based on pre-
established targets for corporate net income and cash generation in addition
to individual achievement against personal targets.
Long-Term Incentive Compensation
Long-term incentive compensation is comprised of annual grants of stock
options which are designed to encourage key employees to remain with the
Corporation by providing them with a long-term interest in the Corporation's
overall performance and to motivate them to maximize long-term stockholder
value. The Corporation's stock option grant guidelines were designed with the
assistance of external compensation consultants. The Committee administers the
stock compensation plans. Performance related stock options with ten year
vesting will generally be granted annually and cannot be exercised for at
least three years from the date of grant.
Chief Executive's Compensation
Dennis Kerrison's compensation includes base salary, incentive compensation
and stock options. Consistent with all other executive officers, the President
and Chief Executive Officer's compensation was determined by the Compensation
Committee in accordance with the salary policy, bonus programs and stock
option guidelines, namely the Corporation and the President and Chief
Executive's overall performance and motivation to maximize long-term
stockholder value. Stock options, which cannot be exercised for at least 3
years from the date of grant, with a maximum of ten year exercise from grant,
will generally be granted annually. The Committee has available information as
to the level of past awards and individual stock ownership of the President
and Chief Executive Officer.
The Committee determined that in order to better align Mr Kerrison's
compensation with stockholder interests, a greater portion of his compensation
would be at-risk and directly linked to financial results.
Mr Kerrison's base salary effective as of January 1999 was $429,300. A bonus
of $335,283 was granted to Mr Kerrison in consideration of the Corporation's
cash generation and overall financial performance and Mr Kerrison's leadership
of the Corporation during the fiscal year. He also received an additional
bonus of $169,303 in recognition of his contribution following the spin-off
from Great Lakes Chemical Corporation.
On February 5, 1999 Mr Kerrison received zero-cost options in respect of
45,158 shares of the Corporation's common stock which vested on December 31,
1999 and which must be exercised by December 31, 2007 in accordance with the
Corporation's time restricted bonus arrangements for certain senior
executives. These options were valued at two times the President's and Chief
Executive's salary and assumed a stock price of $19.60. In addition, Mr
Kerrison was granted up to 31,451 zero-cost options on February 5, 1999 and
which will vest on January 1, 2001 subject to the achievement of certain
performance criteria specified by the Compensation Committee. These
performance related stock options must be exercised by January 1, 2008. On
April 1, 1999 Mr Kerrison was granted 35,959 zero cost options which will vest
on January 1, 2002 subject to the achievement of certain performance criteria
specified by the Compensation Committee. These performance related stock
options must be exercised by December 31, 2008. In addition on August 9, 1999
Mr Kerrison was granted 96,028 options at an exercise price of $13.275 which
will vest on January 1, 2003 and must be exercised by August 8, 2009. The
stock options granted to Mr Kerrison were in line with the stock option
arrangements approved prior to the Distribution. In line with normal UK
practice, Mr Kerrison also receives a fully expensed company car and pension
benefits valued at $223,555.
20
Summary
With a significant portion of the Corporation's executive compensation
linked directly to individual and corporate performance and paid in stock, the
Committee believes that these compensation practices will help ensure
alignment with the interests of the Corporation's stockholders. While
recognizing that fluctuations of the business cycles may negatively impact
financial performance from time to time, the Committee believes that the
strong leadership provided by the Corporation's senior executives and the
infrastructure that they have put in place have positioned the Corporation to
capitalize on the opportunities that lie ahead.
Compensation Committee Interlocks and Insider Participation
This report is submitted by the members of the Compensation Committee listed
below, none of whom is or has been a full-time employee of the Corporation.
They have all served as members of the Committee since the Distribution and
the Committee met four times during fiscal 1999.
COMPENSATION COMMITTEE
Martin M Hale (Chairman) Dr Benito Fiore
21
STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total return to stockholders on the
common stock of the Corporation since the date of the spin-off from Great
Lakes Chemical Corporation and S&P Specialty Chemical Indices over the same
period.
[GRAPH HERE]
Value of $100 Investment made May 28, 1998*
5/26/98 12/31/98 06/30/99 12/31/99
------- -------- -------- --------
S&P 500 Composite Index................ $100.00 112.36 125.47 134.30
S&P Chemicals (Specialty) Index........ $100.00 82.65 120.04 100.79
Octel Corp. (OTL)...................... $100.00 60.99 54.95 45.60
*excludes purchase commissions
22
INFORMATION RESPECTING THE CORPORATION'S
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accountants of the Corporation, selected by the Board
for 1999, are PricewaterhouseCoopers, 1 London Bridge, London, SE1 9QL,
England. A representative of PricewaterhouseCoopers is expected to be present
at the Annual Meeting and will have the opportunity to make a statement if
such representative desires to do so. The representative is also expected to
be available to respond to appropriate questions.
OTHER MATTERS
As of the date of this Proxy Statement, management is not aware of any
matters to be presented at the meeting other than the matters specifically
stated in the Notice of Meeting and discussed in the Proxy Statement. If any
other matter or matters are properly brought before the meeting, the persons
named in the enclosed proxy have discretionary authority to vote the proxy on
each such matter in accordance with their judgement.
SOLICITATION AND EXPENSES OF SOLICITATION
The solicitation of proxies will be made initially by mail. The
Corporation's directors, officers and employees may also solicit proxies in
person or by telephone without additional compensation. In addition, proxies
may be solicited by certain banking institutions, brokerage firms, custodians,
trustees, nominees and fiduciaries who will mail material to or otherwise
communicate with the beneficial owners of shares of the Corporation's Common
Stock. All expenses of solicitation of proxies will be paid by the
Corporation.
ANNUAL REPORT AND FORM 10-K
Copies of the Corporation's Annual Report to Stockholders, which includes
portions of the Corporation's Annual Report on Form 10-K for the Fiscal Year
ended December 31, 1999 are being mailed with this Proxy Statement to each
stockholder entitled to vote at the Annual Meeting. Stockholders not receiving
a copy of the Annual Report may obtain one by writing or calling Ms Heather
Ashworth, Investor Relations Director, Octel Corp., European Headquarters,
Global House, Bailey Lane, Manchester M90 4AA, England, telephone 011 44 161
498 8889.
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
The Corporation anticipates holding its 2001 Annual Meeting of Stockholders
on Tuesday, May 8, 2001.
Under the regulations of the Securities and Exchange Commission, any
stockholder desiring to make a proposal to be acted upon at the 2001 Annual
Meeting of Stockholders must present such proposals to the Secretary of the
Corporation at its principal office at 200 Executive Drive, Newark, DE19702,
U.S.A., not later than December 5, 2000, in order for the proposal to be
considered for inclusion in the Corporation's Proxy Statement.
23
Stockholder proposals or director nominations not included in a Proxy
Statement for an Annual Meeting must comply with the advance notice procedures
and information requirements set forth in the Bylaws of the Corporation in
order to be properly brought before that Annual meeting of Stockholders.
By order of the Board of Directors
John P Tayler
Corporate Secretary
March 27, 2000
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD
24
PROXY
- --------------------------------------------------------------------------------
PROXY PROXY
OCTEL CORP.
2000 2000
This Proxy is Solicited on behalf of the Board of Directors
The undersigned hereby appoints DENNIS J. KERRISON, ALAN G. JARVIS AND JOHN
P. TAYLER, and each of them with full power of substitution, as the proxies of
the undersigned, to attend the Annual Meeting of Stockholders to be held on
Tuesday, May 9, 2000, at 10:00 a.m. and any adjournment or postponement thereof,
and to vote the stock the undersigned would be entitled to vote, if present, on
the items listed on the reverse side of this proxy card.
THIS PROXY WILL BE VOTED AS SPECIFIED; OR IF NO CHOICE IS SPECIFIED, IT WILL BE
VOTED FOR THE ELECTION OF THE DIRECTOR NOMINEES, THE ELECTION OF
PRICEWATERHOUSECOOPERS AS INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL 2000 AND THE
APPROVAL OF THE FIRST AMENDMENT AND RESTATEMENT OF THE STOCK PLANS.
ELIMINATE DUPLICATE MAILINGS
SEC rules require the Corporation to mail an annual report to every
stockholder even if there are multiple stockholders in the same household. If
you are a stockholder of record and have the same address as other stockholders
of record, you may authorize the Corporation to discontinue mailings of multiple
annual reports. To do so, mark the box (see over) on each proxy card for which
you do not wish to receive an annual report.
Applicable law requires the Corporation to send separate proxy statements
and proxy cards for all of your accounts.
_________________________________
New Address
-----------
_________________________________ SEE REVERSE
SIDE
_________________________________ -----------
(Please sign on the reverse side)
- -------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
- --------------------------------------------------------------------------------
[X] Please mark your 3177
votes as in this
example.
- ------------------------------------------------------------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" items 1, 2 and 3.
- ------------------------------------------------------------------------------------------------------------------------------------
1. Election of FOR WITHHELD 2. Election of FOR AGAINST ABSTAIN
Directors [_] [_] Nominees: PricewaterhouseCoopers
James M.C. Puckridge as independent public
and Benito Fiore accountants for fiscal 2000. [_] [_] [_]
For, except vote withheld from the following nominee(s): 3. Approval of the first
amendment and restatement
_______________________________________________________ of the Stock Plans. [_] [_] [_]
4. In their discretion, the Proxies are authorized to
vote upon any other matter which may properly come
before the meeting.
- ------------------------------------------------------------------------------------------------------------------------------------
Please check here to discontinue the annual [_]
report mailing for this account
Address change [_]
Please sign exactly as name appears hereon. Joint owners
should each sign personally. Where applicable, indicate
your official position or representation capacity.
________________________________________________________
________________________________________________________
SIGNATURE(S) DATE
- ------------------------------------------------------------------------------------------------------------------------------------
. FOLD AND DETACH HERE .