UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
ETHYL CORPORATION
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(Name of Registrant As Specified In Its Charter)
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[LOGO]
Ethyl(R)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of the holders of shares of
common stock, $1.00 par value ("Ethyl 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 Tuesday, June
4, 2002, at 11:00 A.M., Eastern Daylight Time, for the following purposes:
1. To elect a Board of Directors to serve for the ensuing year;
2. To approve an amendment to the Corporation's Restated Articles of
Incorporation effecting a 1-for-5 reverse stock split of the Ethyl
Common Stock and reducing the number of authorized shares of Ethyl
Common Stock from 400,000,000 shares to 80,000,000 shares;
3. To approve the designation by the Board of Directors of
PricewaterhouseCoopers LLP as auditors for the fiscal year ending
December 31, 2002; and
4. 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 March 28, 2002, 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
M. RUDOLPH WEST, Secretary
April 25, 2002
PROXY STATEMENT
for
ANNUAL MEETING OF SHAREHOLDERS
ETHYL CORPORATION
To be held June 4, 2002
Approximate date of mailing--April 25, 2002
Proxies in the form enclosed are solicited by the Board of Directors for the
Annual Meeting of Shareholders to be held on Tuesday, June 4, 2002. 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 at the Corporation's address listed below. A proxy, if executed and
not revoked, will be voted, and, if it contains any specific instructions, will
be voted in accordance with such instructions.
On March 28, 2002, the date for determining shareholders entitled to vote at
the meeting, there were outstanding 83,454,650 shares of Ethyl Common Stock.
Each share of Ethyl Common Stock is entitled to one vote. The holders of a
majority of the shares of Ethyl Common Stock issued and outstanding as of the
close of business on March 28, 2002 will constitute a quorum at the meeting.
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. Georgeson Shareholder
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.
Unless otherwise specified in the accompanying form of proxy, it is intended
that votes will be cast in favor of all of the proposals set forth herein.
The Corporation's street address is 330 South Fourth Street, Richmond,
Virginia 23219.
ELECTION OF DIRECTORS
PROPOSAL 1
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
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.
Proxies will be voted for the election as directors for the ensuing year of
the persons named below (or if for any reason unavailable, of such substitutes
as the Board of Directors may designate). Each of the nominees presently is
serving as a director. The Board has no reason to believe that any of the
nominees will be unavailable.
William W. Berry; age 69; director since 1983; Consultant; Chairman of the
Board of New England Independent System Operator (regional manager of
electric bulk power generation and transmission systems) since June 1997.
Other directorship: Universal Corporation.
Phyllis L. Cothran; age 55; director since 1995; retired, having served as
President and Chief Operating Officer of Trigon Healthcare, Inc., formerly
Blue Cross and Blue Shield of Virginia, (health insurance company) from
November 1990 to March 1997. Other directorship: Tredegar Corporation.
1
Bruce C. Gottwald; age 68; director since 1962; Chairman of the Board and
Chairman of the Executive Committee; Chief Executive Officer of the
Corporation from March 1, 1994 to May 31, 2001. Other directorship: CSX
Corporation.
Thomas E. Gottwald; age 41; director since 1994; Chief Executive Officer of the
Corporation since June 1, 2001; President of the Corporation since March,
1994; Chief Operating Officer of the Corporation from March 1, 1994 to May
31, 2001.
Gilbert M. Grosvenor; age 70; director since 1985; Chairman of the Board of
Trustees of the National Geographic Society (magazine publisher and
scientific society). Other directorships: Saul Centers, Inc., Marriott
International, Inc. and Chevy Chase Bank, F.S.B.
Sidney Buford Scott; age 69; director since 1959; Chairman of the Board of
Scott & Stringfellow, Inc. (investment bankers and brokers).
Charles B. Walker; age 63; director since 1989; Vice Chairman of the Board and
Chief Financial Officer of Albemarle Corporation (specialty chemicals
company) since 1994; Former Vice Chairman of the Board of the Corporation
from March 1, 1994 to January 31, 1998, and Chief Financial Officer and
Treasurer of the Corporation from March 1, 1994 to October 1, 1997. Other
directorship: Albemarle Corporation.
In 2001, 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.
Eight meetings of the Corporation's Board of Directors were held during 2001.
The Corporation's executive committee currently consists of Messrs. Bruce C.
Gottwald, Berry, Thomas E. Gottwald and Scott. During 2001, the executive
committee did not meet.
Ms. Cothran and Messrs. Berry, Grosvenor and Scott currently serve on the
Corporation's audit committee. During 2001, the audit committee met on five
occasions. The audit committee reviews the Corporation's internal audit and
financial reporting functions and the scope and results of the audit performed
by the Corporation's independent accountants and matters relating thereto and
reports thereon to the Board of Directors. The audit committee also reviews
audit fees and recommends to the Board of Directors the engagement of the
independent accountants of the Corporation. All the members of the audit
committee are "independent" directors as defined by the rules of The New York
Stock Exchange, the exchange on which shares of Ethyl Common Stock are listed.
The Corporation's nominating committee currently consists of Messrs.
Grosvenor, Berry and Bruce C. Gottwald. The nominating committee did not meet
during 2001. The nominating committee recommends candidates for election as
directors and in some cases the election of officers. The Corporation's bylaws
provide that a shareholder of the Corporation entitled to vote for the election
of directors may nominate persons for election to the Board by mailing written
notice to the Secretary of the Corporation not later than (i) with respect to
an election to be held at an annual meeting of shareholders, 60 days prior to
such meeting, and (ii) with respect to an election to be held at a special
meeting of shareholders for the election of directors, the close of business on
the seventh day following the date on which notice of such meeting is first
given to shareholders. Such shareholder's notice shall include (i) the name and
address of the shareholder and of each person to be nominated, (ii) a
representation that the shareholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate each person specified, (iii) a description
of all understandings between the shareholder and each nominee and any other
person (naming such person) pursuant to which the nomination is to be made by
the shareholder, (iv) such other information regarding each nominee as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission had the nominee been nominated by the
Board of Directors and (v) the consent of each nominee to serve as a director
of the Corporation if so elected.
Messrs. Berry, Grosvenor and Scott and Ms. Cothran currently serve as the
Corporation's bonus, salary and stock option committee. During 2001, the bonus,
salary and stock option committee met on six 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 (the "Incentive Stock Option Plan").
2
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Thomas E. Gottwald, Chief Executive Officer and director of the Corporation,
is a son of Bruce C. Gottwald, Chairman of the Board of Directors and former
Chief Executive Officer of the Corporation. The members of the family of Bruce
C. Gottwald may be deemed to be control persons of the Corporation.
In April, 2001, the Corporation sold certain real and personal property
located in King William, Virginia consisting of approximately 1,600 acres to
Old Town, LLC. Old Town, LLC, which is owned by Bruce C. Gottwald and his
brother, Floyd D. Gottwald, Jr., a beneficial owner of more than 5% of the
outstanding voting shares of the Corporation, paid $2.9 million in cash for the
property based on independent appraisals.
On February 1, 2002, Bruce C. Gottwald made a loan to the Corporation in the
amount of $18,640,000 for a three year term at an interest rate of 8.5%. The
monthly payments are interest only during the term of the loan, with the
principal amount coming due at maturity. The Corporation used the proceeds of
the loan to pay down existing debt. The loan is non-recourse to the Corporation
and is secured by a first deed of trust on the three buildings at 330 South
Fourth Street, Richmond Virginia, that constitute the principal offices of the
Corporation. An independent appraiser valued the three buildings at
$18,640,000. At the end of the loan term, the Corporation has the option to
either convey the property to the lender in satisfaction of the debt or repay
the debt. Should the Corporation fail to repay the debt, the lender has a
"call" right by which the lender can require that the Corporation convey the
property to the lender in satisfaction of the debt.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of the forms required by Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that have
been received by the Corporation, the Corporation believes that there has been
compliance with all filing requirements applicable to its officers, directors
and beneficial owners of greater than 10% of Ethyl Common Stock, except that
Mr. Newton A. Perry inadvertently did not report in a timely manner shares
purchased solely by his wife. Mr. Newton A. Perry filed an amendment to his
Form 5 disclosing his indirect ownership of such shares. Additionally, Mr.
Bruce R. Hazelgrove, III, who became a vice president on June 1, 2001, filed
his Form 3 with his timely Form 5 on February 13, 2002.
STOCK OWNERSHIP
The following table lists any person (including any "group" as that term is
used in Section 13(d)(3) of the Exchange Act) who, to the knowledge of the
Corporation, was the beneficial owner as of January 31, 2002, of more than 5%
of the outstanding voting shares of the Corporation.
Name and Address of Number of Percent of
Title of Class Beneficial Owners Shares Class
-------------- --------------------------- ---------- ----------
Common Stock Floyd D. Gottwald, Jr., 6,143,806 (a) 7.36%
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23219
Bruce C. Gottwald 5,122,205 (b)(c) 6.14%
330 South Fourth Street
P.O. Box 2189
Richmond, Virginia 23219
Arnhold and S. Bleichroeder 4,800,000(d) 5.75%
Holdings, Inc.
Arnhold and S. Bleichroeder
Advisers, Inc.
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(a) As of January 31, 2002, Floyd D. Gottwald, Jr. had sole voting and
investment power over all of the shares disclosed except 1,671,459 shares
held by his wife and in certain trust relationships as to which he
disclaims beneficial ownership. This amount does not include an aggregate
of 4,272,607 shares of Ethyl Common Stock beneficially owned by the adult
sons of Floyd D. Gottwald, Jr. Floyd D. Gottwald, Jr. and his adult sons
have no agreement with respect to the acquisition, retention, disposition
or voting of Ethyl Common Stock.
3
(b) As of January 31, 2002, Bruce C. Gottwald had sole voting and investment
power over all of the shares disclosed except 889,588 shares held by his
wife and in certain trust relationships as to which he disclaims beneficial
ownership. This amount does not include an aggregate of 4,714,785 shares of
Ethyl Common Stock beneficially owned by the adult sons of Bruce C.
Gottwald. Bruce C. Gottwald and his adult sons have no agreement with
respect to the acquisition, retention, disposition or voting of Ethyl
Common Stock.
(c) This amount does not include any shares owned of record by Merrill Lynch
Trust Company, as Trustee under the Corporation's savings plan for the
benefit of employees of the Corporation. Shares held under the
Corporation's savings plan are voted by the Trustee in accordance with
instructions solicited from employees participating in the plan. If a
participating employee does not give the Trustee voting instructions, his
or her shares generally are voted by the Trustee in accordance with the
Board's recommendations to the shareholders. Because members of the family
of Bruce C. Gottwald are executive officers and directors of the
Corporation and are among 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) Information based on Schedule 13G filed with the Securities and Exchange
Commission on January 22, 2002.
The following table sets forth as of January 31, 2002, 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
(the "Named Executive Officers") and all directors and 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
or her.
Number of Shares Number of Shares Total
Name of Beneficial Owner or with Sole Voting with Shared Voting Number Percent
Number of Persons in Group and Investment Power/1/ and Investment Power of Shares of Class/2/
-------------------------- ---------------------- -------------------- --------- ----------
William W. Berry.............................. 5,795 2,146/3/ 7,941
Phyllis L. Cothran............................ 6,362 6,362
Bruce C. Gottwald............................. 4,501,220 620,985/4/ 5,122,205 6.14%
Thomas E. Gottwald............................ 598,573 3,213,181/5/ 3,811,754 4.56%
Gilbert M. Grosvenor.......................... 3,885 3,885
Warren Huang.................................. 61,501 61,501
Donald Lynam.................................. 75,150 75,150
Alexander McLean.............................. 39,130 39,130
Newton A. Perry............................... 50,082 5,126/6/ 55,208
Sidney Buford Scott........................... 66,585 66,585
Charles B. Walker............................. 81,233 81,233
Directors and officers as a group (21 persons) 5,771,083 3,859,187 9,630,270 11.51%
--------
/1 The amounts in this column include shares of Ethyl Common Stock with respect
to which certain persons had the right to acquire beneficial ownership
within 60 days of January 31, 2002, pursuant to the Incentive Stock Option
Plan: Thomas E. Gottwald: 80,000 shares; Warren Huang: 25,497 shares; Donald
Lynman: 10,000 shares; Alexander McLean: 10,000 shares; Newton A. Perry:
26,596 shares; Charles B. Walker: 20,000 shares and the directors and
officers as a group: 240,490 shares. /
/2 Except as indicated, each person or group owns less than 1% of Ethyl Common
Stock. /
/3 Mr. Berry disclaims beneficial ownership of all 2,146 of such shares. /
/4 Mr. Bruce C. Gottwald disclaims beneficial ownership of all 620,985 of such
shares. /
/5 Mr. Thomas E. Gottwald disclaims beneficial ownership of all 3,213,181 of
such shares. This amount includes 3,186,101 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. Perry disclaims beneficial ownership of all 5,126 of such shares. /
4
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table presents information relating to total compensation of
the Named Executive Officers for the fiscal years ended December 31, 2001, 2000
and 1999.
Long-Term
Annual Compensation Compensation
- ----------------------------- ---------------------
Other Annual Restricted Options/ All Other
Name and Principal Position Year Salary Bonus Compensation Stock Awards SARs Compensation
--------------------------- ---- -------- ------- ------------ ------------ -------- ------------
Bruce C. Gottwald 2001 $320,000 $ -- $ -- $-- -- $16,042/1/
Chairman of the Board 2000 770,000 -- -- -- -- 38,500
Chief Executive Officer until 1999 770,000 -- -- -- -- 38,500
June 1, 2001
Thomas E. Gottwald 2001 $411,800 $ -- $ -- $-- 150,000 $20,590/2/
Chief Executive Officer 2000 411,800 -- -- -- -- 20,590
from June 1, 2001; 1999 396,000 -- -- -- -- 19,800
Chief Operating Officer
Newton A. Perry 2001 $270,400 $ -- $ -- $-- 125,000 $13,520/3/
Senior Vice President 2000 260,000 -- -- -- -- 13,000
Antiknocks 1999 252,500 75,000 -- -- -- 12,625
Alexander McLean 2001 $256,700 $ -- $ -- $-- 125,000 $12,835/4/
Senior Vice President 2000 246,800 -- -- -- -- 12,340
Petroleum Additives 1999 239,675 75,000 -- -- -- 11,984
Warren Huang 2001 $254,800 $ -- $244,040/5/ $-- 125,000 $12,740/6/
Vice President--Managing 2000 245,000 40,000 257,549/5/ -- -- 12,250
Director Asian Pacific 1999 233,300 30,000 260,933/5/ -- -- 11,665
Donald Lynam 2001 $228,100 $ -- $ -- $-- -- $11,405/7/
Vice President-- 2000 220,400 -- -- -- -- 11,020
Air Conservation 1999 212,900 32,000 -- -- -- 10,645
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/1 Includes contributions to the Corporation's savings plan ($8,500, $8,500 and
$8,000) and accruals in the Corporation's excess benefit plan ($7,542,
$30,000 and $30,500) for 2001, 2000 and 1999, respectively. /
/2 Includes contributions to the Corporation's savings plan ($8,500, $8,500 and
$8,000) and accruals in the Corporation's excess benefit plan ($12,090,
$12,090 and $11,800) for 2001, 2000, and 1999, respectively. /
/3 Includes contributions to the Corporation's savings plan ($8,500, $8,500 and
$8,000) for 2001, 2000 and 1999, respectively, and accruals in the
Corporation's excess benefit plan ($5,020, $4,500 and $4,625) for 2001, 2000
and 1999, respectively. /
/4 Includes contributions to the Corporation's savings plan ($8,500, $8,500 and
$8,000) for 2001, 2000 and 1999, respectively, and accruals in the
Corporation's excess benefit plan ($4,335, $3,840 and $3,984 ) for 2001,
2000 and 1999, respectively. /
/5 Includes taxes paid by the Corporation on Mr. Huang's behalf ($126,195,
$131,796 and $119,088) for 2001, 2000 and 1999, respectively. /
/6 Includes contributions to the Corporation's savings plan ($8,500, $8,500 and
$8,000) for 2001, 2000 and 1999, respectively, and accruals in the
Corporation's excess benefit plan ($4,240, $3,750 and $3,665) for 2001,
2000, and 1999, respectively. /
/7 Includes contributions to the Corporation's savings plan ($8,500, $8,500 and
$8,000) for 2001, 2000 and 1999, respectively, and accruals in the
Corporation's excess benefit plan ($2,905, $2,520 and $2,645) for 2001,
2000, and 1999, respectively. /
5
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Each of the following options relates to Ethyl Common Stock and does not
include a related SAR.
Potential Realizable
Value At Assumed
Annual Rates of Stock
Price Appreciation For
Individual Grants Option Terms ($)
---------------------------------- ----------------------
% of
Total Options
Granted to Exercise
Options Employees in or Base Expiration
Name Granted (#)/1/ Fiscal Year Price ($) Date 5% 10%($)
---- ------------- ------------- --------- ---------- ------- --------
Thomas E. Gottwald 150,000 4% $0.87 9/28/2011 $82,071 $207,983
Newton A. Perry... 125,000 3% 0.87 9/28/2011 68,392 173,320
Alexander McLean.. 125,000 3% 0.87 9/28/2011 68,392 173,320
Warren Huang...... 125,000 3% 0.87 9/28/2011 68,392 173,320
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/1 Exercisable with respect to 50% of the shares on April 1, 2003, with respect
to an additional 25% of the shares on April 1, 2004, and with respect to the
remaining 25% on April 1, 2005. The options expire on the tenth anniversary
of the date they were granted. /
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUE
The following table presents information concerning stock option and SAR
exercises by the Named Executive Officers and fiscal year end option/SAR values.
Number of Securities
Underlying Unexercised Value of Unexercised In-
Options/SARs at FY-End The-Money Options/SARs
(#) at FY-End ($)/1/
------------------------- -------------------------
Shares Acquired Value
Name On Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ------------ ----------- ------------- ----------- -------------
Bruce C. Gottwald. 0 0 0 0 0 $ 0
Thomas E. Gottwald 0 0 80,000/2/ 470,000/3/ 0 7,500
Warren Huang...... 0 0 25,497/2/ 205,000/4/ 0 6,250
Donald Lynam...... 0 0 10,000/2/ 40,000/2/ 0 0
Newton A. Perry... 0 0 26,596/2/ 205,000/5/ 0 6,250
Alexander McLean.. 0 0 10,000/2/ 240,000/6/ 0 6,250
--------
/1 These values are based on the closing price of Ethyl Common Stock on the New
York Stock Exchange on December 31, 2001. /
/2 Each of these options relates to Ethyl Common Stock and includes a tandem
SAR. /
/3 Each of these options relates to Ethyl Common Stock and 320,000 of such
options include a tandem SAR. /
/4 Each of these options relates to Ethyl Common Stock and 80,000 of such
options include a tandem SAR. /
/5 Each of these options relates to Ethyl Common Stock and 80,000 of such
options include a tandem SAR. /
/6 Each of these options relates to Ethyl Common Stock and 115,000 of such
options include a tandem SAR. /
6
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, 2001, to persons with specified earnings and years of
pension benefit service. To the extent benefits payable at retirement exceed
amounts that may be payable under applicable provisions of the Internal Revenue
Code of 1986, as amended (the "Code"), they will be paid under the
Corporation's excess benefit or supplemental retirement plans, as applicable.
This table includes the amounts that would be payable under such plans.
Pension Plan Table*
Years of Pension Benefit Service and Estimated Annual Benefits
-----------------------------------------------------------------------------------------
Final Average
Earnings 10 15 20 25 30 35 40 45 50 55
------------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
$ 300,000 $ 43,500 $ 65,300 $ 87,000 $108,800 $130,500 $152,300 $174,000 $195,800 $217,600 $239,300
$ 350,000 $ 51,000 $ 76,500 $102,000 $127,500 $153,000 $178,500 $204,000 $229,600 $255,100 $280,600
$ 400,000 $ 58,500 $ 87,800 $117,000 $146,300 $175,500 $204,800 $234,000 $263,300 $292,600 $321,800
$ 450,000 $ 66,000 $ 99,000 $132,000 $165,000 $198,000 $231,000 $264,000 $297,100 $330,100 $363,100
$ 500,000 $ 73,500 $110,300 $147,000 $183,800 $220,500 $257,300 $294,000 $330,800 $367,600 $404,300
$ 550,000 $ 81,000 $121,500 $162,000 $202,500 $243,000 $283,500 $324,000 $364,600 $405,100 $445,600
$ 600,000 $ 88,500 $132,800 $177,000 $221,300 $265,500 $309,800 $354,000 $398,300 $442,600 $486,800
$ 650,000 $ 96,000 $144,000 $192,000 $240,000 $288,000 $336,000 $384,000 $432,100 $480,100 $528,100
$ 700,000 $103,500 $155,300 $207,000 $258,800 $310,500 $362,300 $414,000 $465,800 $517,600 $569,300
$ 750,000 $111,000 $166,500 $222,000 $277,500 $333,000 $388,500 $444,000 $499,600 $555,100 $610,600
$ 800,000 $118,500 $177,800 $237,000 $296,300 $355,500 $414,800 $474,000 $533,300 $592,600 $651,800
$ 850,000 $126,000 $189,000 $252,000 $315,000 $378,000 $441,000 $504,000 $567,100 $630,100 $693,100
$ 900,000 $133,500 $200,300 $267,000 $333,800 $400,500 $467,300 $534,000 $600,800 $667,600 $734,300
$ 950,000 $141,000 $211,500 $282,000 $352,500 $423,000 $493,500 $564,000 $634,600 $705,100 $775,600
$1,000,000 $148,500 $222,800 $297,000 $371,300 $445,500 $519,800 $594,000 $668,300 $742,600 $816,800
--------
* Assumes attainment of age 65 in 2001 and Social Security Covered
Compensation of $37,212.
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, 2001, are: Bruce C. Gottwald, 51; Thomas E. Gottwald, 10; Warren
Huang, 22; Newton A. Perry, 33; Donald Lynam, 21 and Alexander McLean, 13.
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. On
December 31, 2000, Ethyl terminated its tax qualified defined benefit plan (the
"old plan") and implemented a new tax-qualified defined benefit plan with an
identical formula on January 1, 2001 (the "new plan"). Benefits under the new
plan are offset by benefits that were paid or payable under the old plan. For
purposes of determining pension benefit service under the new plan,
participants receive credit for years of pension benefit service earned under
the old plan.
Mr. McLean, who was previously employed by Ethyl Petroleum Additives
Limited, a subsidiary of the Corporation located in the United Kingdom, also
participated in the Ethyl Petroleum Additives Limited Pension Plan (the
"Additives Plan"). The formula under the Additives Plan is equal to 1.6667%
times pensionable salary times years of service. Mr. McLean has 7.833 years of
service under that plan. This accrued benefit as of April 30, 1997, is $47,028
per year, payable at age 65. This amount has been converted from British pounds
to U.S. dollars at the conversion rate of 1(Pounds):$1.4543 as of December 31,
2001. The amount payable under the Additives Plan is offset from the amount
payable under the pension plan described above.
7
EXCESS BENEFIT PLANS
The Corporation maintains excess benefit plans (the "Excess 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 Code. All benefits under the Excess Plans vest upon a
Change in Control of the Corporation, as defined in the Excess Plans.
Participants in the Excess Plans receive their benefits in the form elected
under the qualified employee pension plans of the Corporation or under certain
circumstances in a lump sum payment.
Mr. Walker, who retired as an officer and employee of the Corporation on
January 31, 1998, received a series of payments that were equivalent to the
present value of his accrued benefits under the Excess Plans plus any earnings
on the funds designed for such payments. This arrangement is in lieu of any
benefits under the Excess Plans.
COMPENSATION OF DIRECTORS
Each non-employee director is paid (i) $1,000 for attendance at each Board
meeting and (ii) $600 for attendance at each meeting of a committee of the
Board of which he or she is a member. In addition, each such director is paid a
quarterly fee of $3,000, which was reduced from $5,000 effective April 1, 2001.
Employee members of the Board of Directors are not paid separately for their
service on the Board or its committees.
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. The service requirement for this benefit may be waived
under certain circumstances. Any director retiring under other circumstances
will receive $12,000 per year, payable in quarterly installments, commencing no
earlier than age 60, for a period not to exceed his years of service on the
Board. The payment period limitation on this benefit may be waived in certain
circumstances. Such retirement payments to former directors may be discontinued
under certain circumstances.
Under the Directors' Stock Plan, on each July 1, each non-employee director
is awarded that number of whole shares of Ethyl Common Stock that, when
multiplied by the closing price of Ethyl Common Stock on the immediately
preceding business day, as reported in The Wall Street Journal, 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
Director's Stock 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, 2011.
Non-employee directors may defer, in ten percent increments, all or part of
their retainer fee and meeting fees into either a deferred cash account or a
deferred stock account (the "Deferred Compensation Plan"), or a percentage of
the fees into each of the accounts, both of which are unfunded and maintained
for recordkeeping purposes only. Distributions under the Deferred Compensation
Plan, paid in a single sum or in up to ten annual installments, cannot begin
within two years of the beginning of the deferral year. The maximum aggregate
number of shares of Ethyl Common Stock that may be issued under the Deferred
Compensation Plan is 100,000 shares.
8
BONUS, SALARY AND STOCK OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Bonus, Salary and Stock Option Committee of the Board of Directors (the
"Committee"), which performs the function of a compensation committee, consists
of Messrs. Berry (Chairman), Grosvenor and Scott and Ms. Cothran. The Committee
is delegated the power to administer the compensation program of the
Corporation applicable to its executive officers, including the Chief Executive
Officer. 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:
. Provide balanced, competitive total compensation that will enable the
Corporation to attract, motivate and retain highly qualified executives;
. Provide incentives for enhancing the profitability of the Corporation by
rewarding executives for meeting individual and corporate goals; and
. Align the financial interests of the executives closely to those of the
shareholders by encouraging executive ownership of Ethyl Common Stock.
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,
with a significant portion of compensation depending upon performance. The
program includes: base salary, annual bonuses in cash or cash and stock, and
stock options with performance vesting and SARs. The Committee considers all
elements of the program when setting appropriate compensation.
The Corporation seeks to maintain its executive compensation packages around
the mid-range of those offered generally in the job markets in which the
Corporation competes for talent and experience. More recently the Corporation
has been concentrating on streamlining operations with the focus of employment
and compensation decisions directed at reducing costs.
Base Salaries
Base salaries have been based on evaluations of past and current Corporation
operating profits and individual contribution to the Corporation's success,
market data for comparable positions and salary levels of the Corporation's
peer group companies and alignment of salary and organization within the
Corporation. 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. Salary survey data
from the Corporation's peer group companies indicated the Corporation's
executive level compensation to be within the ranges of compensation offered by
peer group companies.
Annual Bonuses
The annual bonus program has been designed to motivate and reward
performance measured against individual, division, department and corporate
objectives. Annual bonus awards are determined by the Committee in conjunction
with senior management, and are based on evaluation of the performance, level
of responsibility and leadership of the individual executive in relation to
overall corporate results. For 2001, no bonuses were paid to any of the
executive officers.
9
Stock Options
Under the Incentive Stock Option Plan approved by the shareholders, the
Committee, in its discretion, may grant options to purchase shares of Ethyl
Common Stock (with or without related SARs) to any officer or key employee of
the Corporation or any subsidiary who has contributed or can be expected to
contribute to the Corporation's profits and growth. The Committee determines
the amount of the grant, the term of the options and the requisite conditions
for exercise. In 2001, options were granted to executive officers and other key
employees. See page .
CEO Compensation
On May 30, 2001, Mr. Bruce C. Gottwald announced his retirement as the Chief
Executive Officer of the Corporation. The Board of Directors elected Mr. Thomas
E. Gottwald, the President and former Chief Operating Officer of the
Corporation, to the role of Chief Executive Officer, effective June 1, 2001.
His compensation has not been increased over that which he would have received
in his capacity as President of the Corporation.
Section 162(m)
Section 162(m) of the Code provides 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 Section 162(m) of the Code), certain of the
Corporation's benefit plans would have to be amended to limit the Committee's
discretion to determine individual awards 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 on awards is an important
feature of the plans and one that serves the best interests of the Corporation
by allowing the Committee to recognize and motivate individual executive
officers as circumstances warrant. Further, the Committee currently does not
anticipate that there will be any compensation subject to the loss of tax
deductibility. Consequently, the Committee does not propose at the present time
to amend any plan to comply with the performance-based criteria.
THE BONUS, SALARY AND STOCK OPTION
COMMITTEE
William W. Berry, Chairman
Gilbert M. Grosvenor
Sidney Buford Scott
Phyllis L. Cothran
April 3, 2002
10
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors (the "Audit Committee") is
composed of four independent directors and operates under a written charter
adopted by the Board of Directors. Management is responsible for the
Corporation's internal controls and the financial reporting process. The
independent accountants are responsible for performing an independent audit of
the Corporation's consolidated financial statements in accordance with
generally accepted auditing standards and for issuing a report thereon. The
Audit Committee's responsibility is to monitor and oversee these processes and
to report thereon to the Board of Directors. The Audit Committee also reviews
audit fees and recommends to the Board of Directors, subject to shareholder
ratification, the selection of the Corporation's independent accountants. In
this context, the Audit Committee has met and held discussions with management
and PricewaterhouseCoopers LLP, the Corporation's independent accountants.
Management represented to the Audit Committee that the Corporation's
consolidated financial statements were prepared in accordance with generally
accepted accounting principles, and the Audit Committee has reviewed and
discussed the consolidated financial statements with management and
PricewaterhouseCoopers.
The Audit Committee has discussed with PricewaterhouseCoopers the matters
required to be discussed by Statement on Auditing Standards No. 61
(Codification of Statements on Accounting Standards), including the scope of
the auditor's responsibilities, significant accounting adjustments and any
disagreements with management.
The Audit Committee also has received the written disclosures and the letter
from PricewaterhouseCoopers relating to the independence of that firm as
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and has discussed with
PricewaterhouseCoopers that firm's independence from the Corporation.
Based upon the Audit Committee's discussions with management and
PricewaterhouseCoopers and the Audit Committee's review of the representation
of management and the report of PricewaterhouseCoopers to the Audit Committee,
the Audit Committee recommended that the Board of Directors include the audited
consolidated financial statements in the Corporation's Annual Report on Form
10-K for the year ended December 31, 2001 filed with the Securities and
Exchange Commission.
During the fiscal year ended December 31, 2001, PricewaterhouseCoopers
billed the Corporation the fees set forth below in connection with services
rendered by that firm to the Corporation.
Audit Fees. For professional services rendered by PricewaterhouseCoopers
for the audit of the Corporation's annual financial statements for the fiscal
year ended December 31, 2001, and the reviews of the financial statements
included in the Corporation's Quarterly Reports on Form 10-Q for the fiscal
year ended December 31, 2001, PricewaterhouseCoopers billed the Corporation
fees in the aggregate amount of $597,825.
Financial Information Systems Design and Implementation Fees. For the
fiscal year ended December 31, 2001, there were no fees billed by
Pricewaterhouse Coopers for professional services rendered in connection with
financial information systems design and implementation.
All Other Fees. For professional services other than those described above
for the fiscal year ended December 31, 2001, PricewaterhouseCoopers billed the
Corporation fees in the aggregate amount of $449,490. To ensure compliance with
the Securities and Exchanges Commission's new requirements relating to the
independence of the external auditors, the Corporation has engaged Keiter,
Stephens, Hurst, Gary and Shreaves to assist the Corporation with the
performance of internal audit procedures for 2001 and 2002.
11
As a part of its deliberations, the Audit Committee has considered whether
the provision of services described above under "Financial Information Systems
Design and Implementation Fees" and "All Other Fees" is compatible with
maintaining the independence of PricewaterhouseCoopers. The Committee concurred
with management's decision that, in light of the increased emphasis on auditor
independence, a different accounting firm should be used for any internal audit
projects in 2002.
THE AUDIT COMMITTEE
Phyllis L. Cothran, Chairman
William W. Berry
Gilbert M. Grosvenor
Sidney Buford Scott
March 27, 2002
12
[CHART]
PERFORMANCE GRAPH
Comparison of Five-Year Cumulative Total Return*
Performance through December 31, 2001
Ethyl
Corporation
1996 $100.00
1997 84.99
1998 65.02
1999 42.88
2000 18.41
2001 11.78
S&P 500
1996 $100.00
1997 121.66
1998 114.05
1999 133.41
2000 122.17
2001 120.12
Chemical
Composite
1996 $100.00
1997 133.32
1998 171.33
1999 207.33
2000 188.42
2001 166.12
The Lubrizol
Corporation
1996 $100.00
1997 122.15
1998 88.13
1999 110.13
2000 96.08
2001 135.25
The Corporation included a comparison with The Lubrizol Corporation, which
is the only other corporation listed on The New York Stock Exchange ("NYSE")
with lubricant additives as a primary business.
APPROVAL OF REVERSE STOCK SPLIT
PROPOSAL 2
Assuming a quorum is present at the meeting, the proposal to approve the
amendment to the Corporation's Restated Articles of Incorporation authorizing a
reverse stock split of the Ethyl Common Stock will be approved if it receives
the affirmative vote of the holders of at least a majority of the outstanding
shares of Ethyl Common Stock entitled to vote. Abstentions and shares held in
street name that are not voted on this proposal will have the same effect as a
vote against the proposal.
General
On March 26, 2002, the Board of Directors approved, and recommends that the
shareholders of the Corporation approve, an amendment to the Corporation's
Restated Articles of Incorporation (the "Amendment") effecting a 1-for-5
reverse stock split of the Ethyl Common Stock and reducing the number of
authorized shares of Ethyl Common Stock from 400,000,000 to 80,000,000 (the
"Reverse Stock Split"). If the Amendment is approved by the shareholders, each
holder of record of Ethyl Common Stock on the effective date of the Reverse
Stock Split will thereafter be deemed to hold one share of Ethyl Common Stock
for every five presently issued
13
and outstanding shares of Ethyl Common Stock held of record on that date. It is
not anticipated that the financial condition of the Corporation, the percentage
ownership of each shareholder or any aspect of the Corporation's business would
change materially as a result of the Reverse Stock Split.
As discussed more fully below, the Board of Directors believes the Reverse
Stock Split is in the best interests of the Corporation because the decrease in
the number of shares outstanding and the resulting anticipated increased price
level of the Common Stock:
. Should encourage greater interest in Ethyl Common Stock by the investment
community and thereby may facilitate the development of a broader base of
investors in Ethyl Common Stock; and
. Should allow the Corporation to retain its listing on the New York Stock
Exchange ("NYSE").
Purposes of the Proposed Reverse Stock Split
The Reverse Stock Split will reduce the number of shares of Ethyl Common
Stock outstanding with the objective of increasing the market price of Ethyl
Common Stock, which should encourage greater interest in Ethyl Common Stock by
the investment community. The Board of Directors believes that the current per
share price of Ethyl Common Stock may limit its marketability. Many brokerage
firms and institutional investors are reluctant to recommend lower-priced
stocks to their clients or to hold them in their own portfolios. The brokerage
commission on the sale of a lower-priced stock also may represent a higher
percentage of the sale price than the commission on a higher-priced issue. Any
reduction in brokerage commissions resulting from the Reserve Stock Split may
be offset, however, in whole or in part, by increased brokerage commissions
required to be paid by shareholders electing to sell "odd lots" created by the
Reverse Stock Split.
Ethyl Common Stock is listed on the NYSE. One of the NYSE's continued
listing requirements is that the average per share closing price of a company's
common stock for any consecutive 30 day trading period may not fall below $1.00
per share. The Corporation received a letter dated December 12, 2001, from the
staff of the NYSE advising that the average closing price of the Ethyl Common
Stock had been below $1.00 per share for a period of thirty consecutive trading
days. In order to maintain its NYSE listing, the Corporation must bring its
share price and average share price back above $1.00 by six months following
receipt of the notification. While Ethyl Common Stock has been trading above
$1.00 since January 8, 2002, the Board of Directors believes that the Reverse
Stock Split will help ensure continued listing of the NYSE.
Implementation of the Reverse Stock Split
Pursuant to the Reverse Stock Split, each holder of five shares of Ethyl
Common Stock, par value $1.00 per share (the "Old Common Stock"), immediately
prior to the effectiveness of the Amendment would become the holder of one
share of Ethyl Common Stock, par value $1.00 per share (the "New Common Stock").
No fractional shares of New Common Stock will be issued in connection with
the Reverse Stock Split. Instead, holders of Old Common Stock who would
otherwise be entitled to receive fractional shares of New Common Stock because
they hold a number of shares of Old Common Stock not evenly divisible by five
will be entitled to receive from the Corporation a cash payment equal to the
fair market value, as determined by the Board of Directors, of any fractional
shares of New Common Stock resulting from the Reverse Stock Split. The fair
market value will be the average of the closing price for Old Common Stock as
reported for the NYSE Composite Transactions on each of the five trading days
preceding the date on which the Reverse Stock Split becomes effective. The
funds required to purchase fractional shares resulting from the Reverse Stock
Split will be paid from the Corporation's current cash funds. It is not
expected that the amount necessary to effect the cancellation of fractional
shares will be material.
If the Amendment is approved by the shareholders, the Board of Directors
intends to cause the Articles of Amendment to be filed with the Virginia State
Corporation Commission in order to become effective on July 1,
14
2002. Upon the effectiveness of the Amendment, Article III of the Corporation's
Restated Articles of Incorporation would be amended as set forth in Annex I
hereto.
Upon the effectiveness of the Amendment, the Reverse Stock Split will occur
without any further action on the part of shareholders of the Corporation and
without regard to the date or dates on which the stock certificates are
physically surrendered in exchange for certificates representing the number of
shares of New Common Stock such shareholders are entitled to receive as a
consequence of the Reverse Stock Split.
As soon as practicable after the effectiveness of the Amendment, letters of
transmittal will be mailed to each record holder of Ethyl Common Stock as of
July 1, 2002. The letter of transmittal will direct each shareholder to
surrender the Old Common Stock certificates. Upon the surrender of the stock
certificates, the shareholder will receive in exchange therefor the whole
number of shares of New Common Stock to which he or she is entitled and any
cash that may be payable in lieu of any fractional share. The shareholder will
have a choice of receiving the New Common Stock in book-entry form through the
direct registration system ("DRS") or in the form of certificates.
DRS means that, instead of receiving certificates representing shares of New
Common Stock, shareholders will have their shares of New Common Stock held in
an account maintained by Computershare Investor Services, the Corporation's
transfer agent. Shareholders will periodically receive account statements
reflecting their ownership of shares of New Common Stock from Computershare
after their shares of Old Common Stock are exchanged. Shares held in book-entry
form have all of the traditional rights and privileges as shares held in
certificate form. DRS eliminates the risk and expense of replacing lost
certificates and allows shareholders to sell their shares or have them
delivered to their broker without having to retrieve paper certificates.
Shareholders may at any time convert their New Common Stock held in book-entry
form to a certificate representing such shares by contacting Computershare at 2
North LaSalle Street, Chicago, Illinois 60602, or by telephoning
1-800-625-5191. Questions about DRS should be directed to Computershare at
1-800-625-5191.
The letters of transmittal will be accompanied by instructions specifying
other details of the exchange. Shareholders should not send in their
certificates until they receive a letter of transmittal.
Until surrendered and exchanged as provided above, each certificate
representing shares of Old Common Stock shall, after the effectiveness of the
Reverse Stock Split, represent for all purposes only the right to receive
shares of New Common Stock and cash in lieu of fractional shares.
No processing fees will be payable by holders of shares of Ethyl Common
Stock in connection with the exchange of certificates, other than the costs of
the mailing of the Old Common Stock to Computershare.
Effects of the Reverse Stock Split
Ethyl Common Stock is currently registered under Section 12(g) of the
Exchange Act, and as a result, the Corporation is subject to the periodic
reporting and other requirements of the Exchange Act. The Reverse Stock Split
will not affect the registration of the Ethyl Common Stock under the Exchange
Act and the Corporation has no present intention of terminating its
registration under the Exchange Act in order to become a "private" company.
With the exception of the number of issued and outstanding shares, the
rights and preferences of the shares of Ethyl Common Stock prior and subsequent
to the Reverse Stock Split will remain the same.
The Corporation is presently authorized to issue a maximum of 400,000,000
shares of Ethyl Common Stock. As of March 28, 2002, 83,454,460 shares of Ethyl
Common Stock were issued and outstanding. The per share par value of the Ethyl
Common Stock will not change as a result of the Reverse Stock Split. The number
of shares issuable upon the exercise of outstanding options to acquire Ethyl
Common Stock and the exercise price of these options, as well as the number of
shares authorized under the Corporation's employee benefit plans, will be
adjusted proportionately upon the effectiveness of the Amendment.
15
The shares of Ethyl Common Stock issuable upon approval of the Amendment
will be fully paid and nonassessable. The voting rights and other privileges of
the continuing holders of Ethyl Common Stock will not be affected substantively
by the adoption of the Amendment or implementation of the Reverse Stock Split.
Federal Income Tax Consequences
The information contained in the following paragraph is for general
informational purposes only. Shareholders should consult their own tax advisors
as to any federal, state, local and foreign tax effects of the Reverse Stock
Split in light of their individual circumstances.
The change of the Old Common Stock into the New Common Stock should not have
material federal income tax consequences to the shareholders of the
Corporation. The change of the Old Common Stock into the New Common Stock
generally will not cause any gain or loss to be recognized by a shareholder,
except for cash received for a fractional share. A shareholder who receives
cash for a fractional share will recognize gain or loss equal to the difference
between the amount of cash received and the shareholder's basis in the
fractional share. The aggregate basis of the shares of New Common Stock
including any fractional share for which a shareholder receives cash, will be
the same as the aggregate basis of the Old Common Stock held by the
shareholder. A shareholder's holding period for shares of New Common Stock will
include the holding period for shares of Old Common Stock held by the
shareholder if they are held as a capital asset at the effective time of the
Reverse Stock Split.
Accounting Effects of the Reverse Stock Split
Following the effective date of the Reverse Stock Split, the par value of
Ethyl Common Stock will remain at $1.00 per share. As a result, the
Corporation's stated capital will be reduced and capital in excess of par value
(paid-in capital) increased accordingly. Shareholder's equity will remain
largely unchanged, but will be reduced by the de minimus costs associated with
effecting the Reverse Stock Split and the repurchase of fractional shares.
No Dissenter's Rights
Under Virginia's law, shareholders are not entitled to dissenter's rights of
appraisal with respect to the Reverse Stock Split.
THE BOARD OF DIRECTORS OF THE CORPORATION UNANIMOUSLY RECOMMENDS A VOTE FOR
THIS PROPOSAL.
16
DESIGNATION OF AUDITORS
PROPOSAL 3
The Board of Directors has designated PricewaterhouseCoopers LLP, certified
public accountants, as the Corporation's independent auditors for the year
2002, subject to shareholder approval. Coopers & Lybrand, L.L.P., which was the
predecessor of PricewaterhouseCoopers, has audited the Corporation's financial
statements since 1962 and those of the former Ethyl Corporation (Delaware) from
1947 to 1962. A representative of PricewaterhouseCoopers is expected to be
present at the annual meeting with an opportunity to make a statement and to be
available to respond to appropriate questions.
PricewaterhouseCoopers' principal function is to audit the consolidated
financial statements of the Corporation and its subsidiaries and, in connection
with that audit, to review certain related filings with the Securities and
Exchange Commission and to conduct limited reviews of the financial statements
included in the Corporation's quarterly reports.
PROPOSALS FOR 2003 ANNUAL MEETING
Under the regulations of the Securities and Exchange Commission, any
shareholder desiring to make a proposal to be acted upon at the 2003 annual
meeting of shareholders must present such proposal to the Corporation at its
principal office in Richmond, Virginia, not later than December 26, 2002, in
order for the proposal to be considered for inclusion in the Corporation's
proxy statement. The Corporation anticipates holding the 2003 annual meeting on
Thursday, April 24, 2003.
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.
CERTAIN MATTERS RELATING TO PROXY MATERIALS
AND ANNUAL REPORTS
Electronic Access of Proxy Materials and Annual Reports
This Proxy Statement and the Corporation's Annual Report are available on
Corporation's Internet site at http://www.ethyl.com. Shareholders can elect to
access future proxy soliciting materials, including notices to shareholders of
annual meetings and proxy statements, and annual reports over the Internet
instead of receiving paper copies in the mail. Providing these documents over
the Internet will reduce the Corporation's printing and postage costs and the
number of paper documents shareholders would otherwise receive. The Corporation
will notify shareholders who consent to accessing these documents over the
Internet when such documents will be available. Once given, a shareholder's
consent will remain in effect until such shareholder revokes it by notifying
the Corporation otherwise at Ethyl Corporation, 330 South Fourth Street,
Richmond, Virginia 23219, Attention: Corporate Secretary. Shareholders of
record can choose this option by marking the appropriate oval on the proxy card
included with this Proxy Statement. Beneficial owners whose shares are held in
street name should refer to the information provided by the institution that
holds such beneficial owner's shares and follow the instructions on such form
for instructions on how to elect to view future proxy statements and annual
reports over the Internet, if this option is provided by such institution.
Paper copies of these documents may be requested by contacting the Corporation
at Investor Relations, Ethyl Corporation, 330 South Fourth Street, Richmond,
Virginia 23219, or by telephoning 804-788-5555.
17
Separate Copies for Beneficial Owners
Institutions that hold shares in street name for two or more beneficial
owners with the same address are permitted to deliver a single proxy statement
and annual report to that address. Any such beneficial owner can request a
separate copy of the Proxy Statement or Annual Report by writing the
Corporation's investor relations department as set forth above.
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
M. RUDOLPH WEST, Secretary
18
Annex I
Amendment to the Restated Articles of Incorporation of Ethyl Corporation
An additional paragraph shall be added after the first paragraph of Article III
of the Restated Articles of Incorporation as follows:
"Every five of the issued and outstanding shares of the Corporation's Common
Stock, par value $ 1 per share, as of July 1, 2002, are hereby changed into
one share of Common Stock, par value $ 1 per share. No fractional shares
shall be issued upon such change, and the number of shares of Common Stock
to be issued shall be rounded down to the nearest whole share. If a
fractional interest in a share of Common Stock would be deliverable upon
such change, the Corporation shall pay an amount in cash equal to the fair
market value of such fractional interest, as determined by the Corporation's
Board of Directors, to each holder of shares of Common Stock to whom such
fractional interest would have been deliverable."
The first sentence of paragraph one of Article III of the Restated Articles
of Incorporation shall be deleted and the following sentence shall be
substituted therefor:
"The Corporation shall have authority to issue 80,000,000 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."
NOTICE
and
PROXY STATEMENT
for
ANNUAL MEETING
of
SHAREHOLDERS
June 4, 2002
[LOGO]
Ethyl(R)
ETHYL CORPORATION
330 SOUTH FOURTH STREET
P.O. BOX 2189
RICHMOND, VIRGINIA 23218
--------------------------------------------------------------------------------
ELECTRONIC ACCESS TO FUTURE DOCUMENTS
NOW AVAILABLE
Ethyl Corporation (the "Corporation") provides its annual reports and
proxy solicitation materials, including notices to shareholders of annual
meetings and proxy statements, over the Internet. If you give your consent to
access these documents over the Internet, the Corporation will advise you when
these documents become available on the Internet. Providing these documents over
the Internet will reduce the Corporation's printing and postage costs. Once you
give your consent, it will remain in effect until you notify the Corporation
that you wish to resume mail delivery of the annual reports and proxy
statements. Even though you give your consent, you still have the right at any
time to request copies of these documents.
To give your consent, mark the appropriate oval located at the bottom
of the attached card.
DETACH HERE
--------------------------------------------------------------------------------
ETHYL CORPORATION
-----------------
Richmond, Virginia
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
----------------------------------------
TO BE HELD JUNE 4, 2002
-----------------------
The undersigned hereby appoints Bruce C. Gottwald and Sidney Buford
Scott, or either of them, with full power of substitution in each, proxies to
vote all shares of the undersigned in Ethyl Corporation, at the annual meeting
of shareholders to be held June 4, 2002, and at any and all adjournments or
postponements thereof:
1. ELECTION OF DIRECTORS: [ ] FOR all nominees [ ] WITHHOLD
(except as indicated AUTHORITY
to the contrary below) to vote for all nominees
listed below
William W. Berry, Phyllis L. Cothran, Bruce C. Gottwald, Thomas E.
Gottwald, Gilbert M. Grosvenor, Sidney Buford Scott and Charles B. Walker.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY SUCH NOMINEE(S), WRITE THE
NAME(S) OF THE NOMINEE(S) IN THE SPACE PROVIDED BELOW.)
--------------------------------------------------------------------------------
2. The proposal to approve an amendment to the Corporation's Restated
Articles of Incorporation effecting a 1-for-5 reverse stock split of
the Ethyl Common Stock and reducing the number of authorized shares of
Ethyl Common Stock from 400,000,000 shares to 80,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The proposal to approve the appointment of PricewaterhouseCoopers LLP
as the auditors for the Corporation for 2002.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. 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.
Until contrary notice to the Corporation, I consent to access all future notices
of annual meetings, proxy statements, and annual reports issued
by the Corporation over the Internet. [ ]
This Proxy is solicited on behalf of the Board of Directors. This Proxy when
properly executed will be voted as specified. If no specification is made, this
Proxy will be voted FOR all nominees and FOR Proposals 2 and 3.
Dated _____________________, 2002
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Please sign name exactly as it appears on the stock certificate. Only one of
several joint owners or co-owners need sign. PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.