-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PUXexKVUjLgVU7pjK5+di9JFivp24AFFKxyQDs2+mPqHyDBb/HTtRmuqvsa78Idl VlykrtUlAiFUKJaYxDFytw== 0000915913-97-000009.txt : 19971114 0000915913-97-000009.hdr.sgml : 19971114 ACCESSION NUMBER: 0000915913-97-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971112 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALBEMARLE CORP CENTRAL INDEX KEY: 0000915913 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS, MATERIALS, SYNTH RESINS & NONVULCAN ELASTOMERS [2821] IRS NUMBER: 541692118 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12658 FILM NUMBER: 97713503 BUSINESS ADDRESS: STREET 1: 451 FLORIDA STREET CITY: BATON ROUGE STATE: LA ZIP: 70801 BUSINESS PHONE: 504-388-7480 MAIL ADDRESS: STREET 1: 451 FLORIDA STREET CITY: BATON ROUGE STATE: LA ZIP: 70801 FORMER COMPANY: FORMER CONFORMED NAME: ECHEM INC DATE OF NAME CHANGE: 19931208 10-Q 1 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended September 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Transition Period from to --------------------- ------------------- Commission File Number 1-12658 ALBEMARLE CORPORATION ----------------------- (Exact name of registrant as specified in its charter) VIRGINIA 54-1692118 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 330 SOUTH FOURTH STREET P. O. BOX 1335 RICHMOND, VIRGINIA 23210 - ------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code - (804) 788-6000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Number of shares of common stock, $.01 par value, outstanding as of October 31, 1997: 55,402,619 2 ALBEMARLE CORPORATION I N D E X Page Number ------ PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Consolidated Balance Sheets - September 30, 1997 and December 31, 1996 3-4 Consolidated Statements of Income - Three and Nine Months Ended September 30, 1997 and 1996 5 Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 1997 and 1996 6 Notes to the Consolidated Financial Statements 7-12 ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition and Additional Information 13-17 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings 18 ITEM 6. Exhibits and Reports on Form 8-K 18 SIGNATURES 19 EXHIBIT INDEX 20 Exhibit 28.1 Current By-Laws As Amended 21-35 Exhibit 27 Financial Data Schedule 36-37 3 PART I - FINANCIAL INFORMATION ------------------------------ ITEM 1. Financial Statements -------------------- ALBEMARLE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS --------------------------- (Dollars In Thousands) -----------------------
September 30, 1997 December 31, (Unaudited) 1996 --------------- ------------- ASSETS Current assets: Cash and cash equivalents $ 10,339 $ 14,242 Accounts receivable, less allowance for doubtful accounts (1997- $1,510; 1996 - $1,290) 150,457 141,293 Inventories: Finished goods 63,441 58,271 Raw materials 14,139 10,148 Work-in-process 167 247 Stores, supplies and other 17,625 15,833 --------------- ------------- Total inventories 95,372 84,499 Deferred income taxes and prepaid expenses 17,248 19,107 --------------- ------------- Total current assets 273,416 259,141 --------------- ------------- Property, plant and equipment, at cost 1,180,169 1,148,832 Less accumulated depreciation and amortization (682,270) (653,108) --------------- ------------- Net property, plant and equipment 497,899 495,724 Other assets and deferred charges 74,694 68,304 Goodwill and other intangibles, net of amortization 18,107 23,092 --------------- ------------- Total assets $ 864,116 $ 846,261 --------------- ------------- --------------- ------------- See accompanying notes to the consolidated financial statements.
4 ALBEMARLE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS --------------------------- (Dollars In Thousands) ----------------------
September 30, 1997 December 31, (Unaudited) 1996 --------------- ------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 53,499 $ 66,968 Long-term debt, current portion 380 7,457 Accrued expenses 51,674 55,783 Dividends payable 4,988 3,853 Income taxes payable 14,578 13,887 -------------- ------------- Total current liabilities 125,119 147,948 --------------- ------------- Long-term debt 38,055 24,406 Other noncurrent liabilities 67,501 64,166 Deferred income taxes 93,467 104,543 Shareholders' equity: Common stock, $.01 par value, issued - 55,432,619 in 1997 and 55,046,183 in 1996, respectively 554 550 Additional paid-in capital 256,154 250,890 Foreign currency translation adjustments (193) 16,677 Retained earnings 283,459 237,081 --------------- ------------- Total shareholders' equity 539,974 505,198 --------------- ------------- Total liabilities and shareholders' equity $ 864,116 $ 846,261 --------------- ------------- --------------- ------------- See accompanying notes to the consolidated financial statements.
5 ALBEMARLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (In Thousands Except Per-Share Amounts) ---------------------------------------- (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, -------------------- ------------------ 1997 1996 1997 1996 --------- --------- --------- --------- Net sales $ 207,111 $ 183,776 $ 613,180 $ 649,986 Cost of goods sold 144,191 139,016 416,089 474,342 --------- --------- --------- --------- Gross profit 62,920 44,760 197,091 175,644 Selling, general and administrative expenses 27,786 25,212 82,054 88,436 Research and development expenses 7,709 8,480 22,934 22,317 --------- --------- --------- --------- Operating profit 27,425 11,068 92,103 64,891 Interest and financing expenses 152 323 559 2,367 Gain on sale of business -- -- -- (158,157) Other income, net (318) (271) (839) (3,823) ---------- ---------- ---------- --------- Income before income taxes 27,591 11,016 92,383 224,504 Income taxes 9,043 3,129 33,295 86,358 ---------- --------- --------- ---------- NET INCOME $ 18,548 $ 7,887 $ 59,088 $ 138,146 ---------- --------- --------- ---------- ---------- --------- --------- ---------- EARNINGS PER SHARE $ .33 $ .14 $ 1.06 $ 2.30 ---------- --------- --------- ---------- ---------- --------- --------- ---------- Shares used to compute earnings per share 55,910 56,017 55,681 59,988 ---------- --------- --------- ---------- ---------- --------- --------- ---------- Cash dividends declared per share of common stock $ .09 $ .07 $ .23 $ .18 ---------- --------- --------- ---------- ---------- --------- --------- ---------- See accompanying notes to the consolidated financial statements.
6 ALBEMARLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- (Dollars In Thousands) ---------------------- (Unaudited)
Nine Months Ended September 30, ------------------ 1997 1996 --------- -------- CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR $ 14,242 $ 33,130 --------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income 59,088 138,146 Adjustments to reconcile net income to cash flows from operating activities: Depreciation and amortization 50,717 54,204 Gain on sale of business, net of income taxes of $63,780 -- (94,377) Working capital increases excluding cash and cash equivalents: Income tax payments on gain on sale of business -- (59,324) Other working capital increases, net of the effects of the sale of business in 1996 (41,807) (10,059) Other, net (303) (9,829) --------- --------- Net cash provided from operating activities 67,695 18,761 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures and cost of business acquired in 1997 (73,285) (64,094) Proceeds from sale of business, net of $42,297 of trade accounts payable retained by the Company -- 487,345 Other, net 1,587 1,982 --------- --------- Net cash (used in) provided from investing activities (71,698) 425,233 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings 17,889 26,641 Repayments of long-term debt (10,978) (204,334) Dividends paid (11,575) (10,380) Purchases of common stock -- (251,518) Proceeds from exercise of stock options 4,764 1,793 --------- --------- Net cash provided from (used in) financing activities 100 (437,798) --------- --------- (Decrease) increase in cash and cash equivalents (3,903) 6,196 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 10,339 $ 39,326 --------- --------- --------- --------- See accompanying notes to the consolidated financial statements.
7 ALBEMARLE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------- (In Thousands Except Per-Share Amounts) (Unaudited) 1. In the opinion of management, the accompanying consolidated financial statements of Albemarle Corporation and Subsidiaries ("Albemarle" or "the Company") contain all adjustments necessary to present fairly, in all material respects, the Company's consolidated financial position as of September 30, 1997 and December 31, 1996, the consolidated results of operations for the three- and nine-month periods ended September 30, 1997 and 1996, and the condensed consolidated cash flows for the nine-month periods ended September 30, 1997 and 1996. All adjustments are of a normal and recurring nature. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 1996 Annual Report which was incorporated by reference in the Company's Form 10-K filed on March 26, 1997. The December 31, 1996 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. The results of operations for the three- and nine-month periods ended September 30, 1997, are not necessarily indicative of the results to be expected for the full year. Certain amounts in the accompanying consolidated financial statements have been reclassified for the nine months ended September 30, 1996, to conform to the current presentation. 2. On March 1, 1996, the Company sold its alpha olefins, poly alpha olefins, and synthetic alcohol businesses ("Olefins Business") to Amoco Chemical Company ("Amoco") for $487.3 million, including plant and equipment (primarily located in Pasadena, Texas, Deer Park, Texas and Feluy, Belgium), other assets, inventory and accounts receivable, net of expenses and trade accounts payable retained and paid by the Company, and certain business-related liabilities transferred at the date of sale. The sale involved the transfer of approximately 550 people who supported these businesses. The gain on the sale was $158.2 million ($94.4 million after income taxes or $1.57 per share), net of $44.3 million of costs incurred in connection with the sale for early retirements and work-force reductions, abandonment costs of certain facilities and certain other costs (including environmental costs) related to the sale and/or businesses sold. The transaction included numerous operating and service agreements primarily focusing on the sharing of common facilities at the Pasadena plant site of Albemarle and the Feluy plant site operated by Amoco. 8 ALBEMARLE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------- (In Thousands Except Per-Share Amounts) (Unaudited) 3. Long-term debt consists of the following:
September 30, December 31, 1997 1996 ------------- ------------- Variable-rate bank loans $ 28,200 $ 16,300 Foreign bank borrowings 9,087 14,392 Miscellaneous 1,148 1,171 ------------- ------------- Total 38,435 31,863 Less amounts due within one year 380 7,457 ------------- ------------- Long-term debt $ 38,055 $ 24,406 ------------- ------------- ------------- -------------
4. The provision for income taxes on the earnings of the Company in the accompanying consolidated statement of income for the nine-month period ended September 30, 1996 is higher than the statutory income tax rates primarily due to a lower tax basis than book basis related to the sale of the Olefins Business, offset in part, by the benefits in 1996 of foreign tax credits. 5. The shares used to compute earnings per share for the three- and nine-month periods ended September 30, 1997 and 1996, reflect the April 1, 1996 purchase by the Company of 9,484,465 shares of its common stock, at a price of $23 per share plus expenses for a total aggregate cost of $219.4 million, through a tender offer, which began on March 4, 1996 and concluded on April 1, 1996, following the sale of the Olefins Business to Amoco. The Company purchased 275,400 and 1,481,100 common shares in the second and third quarters of 1996, respectively, at an aggregate cost of $6.1 million and $26.0 million, respectively. 6. The Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share" in February, 1997 which is effective for financial statements for both interim and annual periods ending after December 15, 1997. Earlier application is not permitted; however, restatement of all prior-period earnings per share data presented is required. Based upon the Company's preliminary determination, the effect of the adoption of SFAS No. 128 on the financial statements of the Company is not expected to be material. 9 ALBEMARLE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------- (In Thousands Except Share Amounts) (Unaudited) The FASB issued SFAS No. 130, "Reporting Comprehensive Income", and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information", in June, 1997, which are effective for financial statements for annual periods beginning after December 15, 1997. Earlier application of both Statements is permitted. SFAS No. 130 establishes standards for reporting comprehensive income in a full set of general-purpose financial statements, either in the income statement or in a separate statement, and also requires display of "accumulated other comprehensive income" in a separate caption in the equity section of the balance sheet. SFAS No. 131 establishes standards for reporting information about operating segments, including related disclosures about products and services, geographic areas, and major customers. The Company has not yet determined the effect SFAS Nos. 130 and 131 will have on the Company's financial statements. At the time of their adoption these standards are not expected to have a material impact on the financial position or results of operations of the Company. 7. On March 31, 1997, the Company and Mitsui Toatsu Chemicals, Inc. (Mitsui Toatsu) completed the formation of an alliance whereby Albemarle acquired for cash 50 percent of the outstanding stock of Nippon Aluminum Alkyls, Ltd. (NAA). Mitsui Toatsu continued to hold the remaining 50% of NAA until October 1, 1997, when Mitsui Toatsu and Mitsui Petrochemical Industries, Ltd. merged to form Mitsui Chemicals, Inc. Therefore Mitsui Chemicals, Inc. became owner on October 1, 1997 of the remaining 50%. NAA produces organometallic catalysts at its facility in Takaishi City, Osaka and distributes products to the petrochemical and synthetic rubber industries in Japan and the Asia Pacific area. No historical pro forma financial information is required for this acquisition. 8. The following unaudited supplemental pro forma condensed consolidated statement of income for the nine months ended September 30, 1996, is presented assuming that the disposition of the Olefins Business had occurred as of January 1, 1996. The related pro forma information is presented for informational purposes only and is not necessarily indicative of what the consolidated results of operations would have been had the Company operated without the Olefins Business for the nine months ended September 30, 1996. Additionally, the accompanying pro forma information, consistent with the data presented in the Company's Form 8-K filed on March 15, 1996, does not reflect the impact of the purchase of 9,484,465 shares of common stock acquired in the Company's tender offer as if they had occurred on January 1, 1996. 10 ALBEMARLE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------- (In Thousands Except Per-Share Amounts) (Unaudited) 8. Continued.
Pro Forma Condensed Consolidated Statement of Income Nine Months Ended September 30, 1996 -------------------------------------- Adjustments Increase Historical (Decrease) Pro Forma ---------- -------------- ----------- Net sales $ 649,986 $ (79,763) (a) 799 (b) $ 571,022 Cost of goods sold 474,342 (71,200) (a) 420 (b) 403,562 ---------- -------------- ----------- Gross profit 175,644 (8,184) 167,460 Selling, R&D and general expenses 110,753 (5,221) (a) 105,532 ---------- -------------- ----------- Operating profit 64,891 (2,963) 61,928 Interest and financing expenses 2,367 (1,563) (c) 804 Gain on sale of business (158,157) 158,157 (d) -- Other income, net (3,823) 16 (a) (60) (e) (3,867) ---------- -------------- ------------ Income before income taxes 224,504 (159,513) 64,991 Income taxes 86,358 (63,780) (d) (519) (f) 22,059 ----------- -------------- ------------ Net income $ 138,146 $ (95,214) $ 42,932 ----------- -------------- ------------ ----------- -------------- ------------ Earnings per share $ 2.30 $ 0.72 ----------- ------------ ----------- ------------ Shares used to compute earnings per share 59,988 59,988 (g) ----------- ------------ ----------- ------------ See accompanying notes to the pro forma condensed consolidated statement of income.
11 ALBEMARLE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ----------------------------------------------- (In Thousands Except Per-Share Amounts) (Unaudited) 8. Continued. Notes to the pro forma condensed consolidated statement of income are described below: (a) To eliminate the results of operations of the Olefins Business for the period January 1, 1996 thru February 29, 1996 as though the sale to Amoco occurred on January 1, 1996, and to reflect reductions in administrative and other costs which occurred because of personnel, employee benefits (including compensation) and other cost reductions assumed implemented following the sale of the Olefins Business to Amoco. (b) To record service fee income and incremental sales revenue generated from providing various services and products under contracts to Amoco and to record costs and expenses for services and products provided by Amoco. The service and supply arrangements were entered into in connection with the sale of the Olefins Business to Amoco. (c) To reflect the pro forma interest cost savings resulting from the repayment of certain domestic and Belgian debt, using the proceeds received from the sale of the Olefins Business. (d) To eliminate the gain and related income taxes on the March 1, 1996, sale of the Olefins Business. (e) To record the related amortization of certain advance rents received from Amoco upon closing of the sale of the Olefins Business associated with an arrangement in the nature of an operating lease in Belgium. (f) To record the income tax effects of the adjustments set forth in Notes (a) through (c) and (e) above, calculated at an assumed combined U.S. state and federal income tax rate of 37.92%. The Company's income tax provision on the results of operations of the remaining businesses was adjusted for utilization of a portion of the Belgian net operating loss carryforwards for which a valuation allowance had previously been provided on the related deferred tax assets and for the estimated additional income taxes which would have resulted if undistributed foreign earnings had been remitted to the Company. 12 ALBEMARLE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------- (In Thousands Except Share Amounts) (Unaudited) 8. Continued. (g) The average number of shares used to compute earnings per share does not include the effects of the Company's tender offer concluded on April 1, 1996, as if it had occurred on January 1, 1996. The average number of shares would have been 56,826,000 had the offer been assumed to have been completed on January 1, 1996. 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS ------------------------------------- OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION ------------------------------------------------ The following is management's discussion and analysis of certain significant factors affecting the results of operations of Albemarle Corporation's ("Albemarle" or "the Company") during the periods included in the accompanying consolidated statements of income and changes in the Company's financial condition since December 31, 1996. Some of the information presented in the following discussion constitutes forward-looking comments within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes its expectations are based on reasonable assumptions within the bounds of its knowledge of its businesses and operations, there can be no assurance that actual results will not differ materially from its expectations. Factors which could cause actual results to differ from expectations include, without limitation, the timing of orders received from customers, the gain or loss of significant customers, competition from other manufacturers, changes in the demand for the Company's products, increases in the cost of the product, changes in the market in general, fluctuations in foreign currencies and significant changes in new product introduction resulting in an increase in capital project requests and approvals leading to additional capital spending. On March 1, 1996, the Company sold its alpha olefins, poly alpha olefins and synthetic alcohol businesses ("Olefins Business") to Amoco Chemical Company ("Amoco"). After the sale, Albemarle was engaged in the Bromine Chemicals, the Specialty Chemicals and the Surfactants and Detergents businesses. Effective July 24, 1997, the businesses were realigned into Polymer Chemicals, Fine Chemicals and Potassium and Chlorine Chemicals. Results of Operations - --------------------- Third Quarter 1997 Compared with Third Quarter 1996 - --------------------------------------------------- NET SALES Net sales for the third quarter of 1997 amounted to $207.1 million, a 13% increase over third quarter 1996 net sales of $183.8 million. The higher net sales were primarily due to increased shipments of flame retardants, bromine fine chemicals, pharmaceuticals, agricultural chemicals and special intermediates, partly offset by price reductions in certain flame retardants. OPERATING COSTS AND EXPENSES Cost of goods sold for the third quarter of 1997 amounted to $144.2 million compared to $139.0 million in the 1996 period. The gross profit margin increased to 30.4% in 1997 from 24.4% for the corresponding period in 1996. The improvement in the gross margin over 1996 primarily reflects improved plant utilizations, the impact of the Company's cost reduction program, and lower start-up costs associated with naproxen in the 1997 period. Selling, general and administrative expenses, combined with research and development expenses, increased five percent in 1997 versus the 1996 quarter. The increase reflects the impact of higher non-recurring employee-related compensation costs as well as higher costs of experience-rated employee group life insurance in 1997 versus the 1996 period, offset in part by a decline in research and development expenses primarily related to new products as defined by the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 2. As a percentage of net sales, selling, general and administrative expenses, including research and development expenses, were 17.1% in 1997 versus 18.3% in the 1996 quarter. 14 OPERATING PROFIT Operating profit in the third quarter of 1997 increased 148% from the corresponding period in 1996, primarily due to increased shipments and improved costs in flame retardants, bromine fine chemicals, pharmaceuticals, agricultural chemicals and special intermediates, and improved costs in European potassium and chlorine chemicals. INCOME TAXES Income taxes for the third quarter of 1997 increased $5.9 million compared to the third quarter of 1996 due to a $16.6 million increase in pretax income and a higher effective tax rate (32.8% in the 1997 quarter versus 28.4% for the 1996 period). The higher effective income tax rate in the 1997 period reflects an increase in income from foreign subsidiaries, which are taxed at higher than U. S. statutory rates and for which no benefits are provided since amounts are not presently expected to be repratiated, while the effective tax rate for the 1996 period reflects the utilization of available foreign tax credits. Results of Operations - ---------------------- Nine Months 1997 Compared with Nine Months 1996 - ----------------------------------------------- NET SALES Net sales for the first nine months of 1997 amounted to $613.2 million, down from $650.0 million for the corresponding period of 1996. Excluding the first two months 1996 net sales (approximately $80 million) of the Olefins Business sold March 1, 1996, Albemarle's net sales for the first nine months of 1997 would have shown an increase of eight percent or approximately $43 million. The higher net sales were primarily due to increased shipments of flame retardants, bromine fine chemicals, organometallics, pharmaceuticals, and antioxidants offset in part, by price reductions in certain flame retardants. OPERATING COSTS AND EXPENSES Cost of goods sold decreased 12% or $58.3 million in 1997 from 1996 primarily reflecting the impact of two months cost of goods sold of the Olefins Business included in the 1996 period. The gross profit margin increased to 32.1% in 1997 from 29.3% in 1996 excluding from the 1996 period the two months results of the Olefins Business. The improvement in the gross margin reflects improved plant utilizations and the impact of the Company's cost reduction program. 15 Selling, general and administrative expenses, combined with research and development expenses, decreased 5.2% in 1997 versus the 1996 period. The 1997 period reflects the elimination of two-months expenses associated with the operations of the Olefins Business and a reduction in expenses associated with the exercise of stock appreciation rights versus the 1996 period. Additionally, the 1997 period benefited from lower employee-related expenses resulting from the Company's workforce reduction program implemented in conjunction with the sale of the Olefins Business. As a percentage of net sales, selling, general and administrative expenses, including research and development expenses, were 17.1% in the nine months of 1997 versus 17.0% in the 1996 period. Excluding the first two months 1996 selling, general and administrative expenses and research and development expenses of the Olefins Business sold, the percentage of net sales for the 1996 period would have been 18.5%. OPERATING PROFIT Operating profit in the first nine months of 1997 increased approximately 42% from the corresponding period in 1996. Excluding the first two months of 1996 operating profits of the Olefins Business sold, the nine months of 1997 operating profits would have shown an increase of 49% over the 1996 period. The 1997 period benefited from product mix in agricultural chemicals, increased shipments and improved costs in pharmaceuticals and bromine fine chemicals, higher shipments in organometallics, and improved costs in zeolites and European potassium and chlorine chemicals. INTEREST AND FINANCING EXPENSES AND OTHER INCOME Interest and financing expenses in the nine months of 1997 decreased to $0.6 million from $2.4 million in the nine months of 1996 due to lower average outstanding debt. Other income decreased $3.0 million due to lower interest income in the 1997 period. GAIN ON SALE OF BUSINESS The Company's 1996 first nine month's earnings included a gain of $158.2 million ($94.4 million after income taxes) on the sale of the Olefins Business. INCOME TAXES Income taxes in the first nine months of 1997 decreased $53.1 million from the 1996 period, reflecting a $132.1 million decrease in pretax income and a lower effective income tax rate (36.0% in 1997 versus 38.5% in 1996). Excluding the effect of the gain on the sale of the Olefins Business, the effective income tax rate would have been 34% in the 1996 period. The higher effective income tax rate in the 1997 period reflects an increase in income from foreign subsidiaries, which are taxed at higher than U. S. statutory rates and for which no benefits are provided since amounts are not presently expected to be repatriated, while the effective tax rate for the 1996 period reflects the utilization of available foreign tax credits. Financial Condition and Liquidity - --------------------------------- Cash and cash equivalents at September 30, 1997, were $10.3 million, representing a decrease of $3.9 million from $14.2 million at year-end 1996. 16 Cash flows from operating activities during the first nine months of 1997 together with $3.9 million of existing cash, and proceeds from additional borrowings of $17.9 million and $4.8 million from the exercise of stock options, were used to cover capital expenditures and cost of business acquired, payment of dividends and repayment of debt. The Company anticipates that cash provided from operations in the future will be sufficient to pay its operating expenses, satisfy debt-service obligations and make dividend payments. The Company's foreign currency translation adjustments, net of related deferred taxes, at September 30, 1997, decreased substantially from December 31, 1996, primarily due to the strengthening of the U.S. dollar. The noncurrent portion of the Company's long-term debt amounted to $38.1 million at September 30, 1997, compared to $24.4 million at the end of 1996. The Company's long-term debt, including the current portion, as a percentage of total capitalization amounted to 6.6% at September 30, 1997. The Company's capital expenditures combined with cost of business acquired in the first nine months of 1997 were higher than in the same period of 1996 resulting primarily from to the timing of payments . For the year, capital expenditures are forecasted to be slightly above the 1996 level. Capital spending will be financed primarily with cash flow from operations with any additional cash provided from additional debt. The amount and timing of any additional borrowing will depend on the Company's specific cash requirements. The Company is subject to federal, state, local and foreign requirements regulating the handling, manufacture and use of materials (some of which may be classified as hazardous or toxic by one or more regulatory agencies), the discharge of materials into the environment and the protection of the environment. To the best of the Company's knowledge, it currently is complying with and expects to continue to comply in all material respects with existing environmental laws, regulations, statutes and ordinances. Such compliance with federal, state, local and foreign environmental protection laws is not expected to have in the future a material effect on earnings or the competitive position of Albemarle. Among other environmental requirements, the Company is subject to the federal Superfund law under which the Company may be designated as a potentially responsible party and may be liable for a share of the costs associated with cleaning up various hazardous waste sites. 17 ADDITIONAL INFORMATION - ---------------------- The Company reported in the second quarter of 1997 that two of its new flame retardants were sampled by various customers, and it has received orders for Saytex HP 7010 flame retardant, a new product for use in engineered plastics that has demonstrated good color, flowability and heat stability characteristics. In the third quarter, the Company started up a market development unit plant in its Baton Rouge research and development facility to make this product and is beginning to fill orders, but the Company does not expect this product to contribute to profits in the near term. If the Company obtains substantial customer acceptance, it would move to full commercial plant operations. In that event, the Company would expect HP 7010 to be an important contributor to the flame retardant business. In the third quarter, the Company initiated sales of naproxen, an analgesic product, to US customers. The Company continues to be significantly delayed in reaching its sales goals for naproxen due to the timing of the U.S. Food and Drug Administration's approvals of the Company's customers' applications. 18 Part II - OTHER INFORMATION - ---------------------------- ITEM 1. Legal Proceedings ----------------- As previously reported in the Company's 1997 second quarter Form 10-Q, the U. S. Environmental Protection Agency (EPA), through the Department of Justice (DOJ), has threatened suit under the Clean Air Act ("the Act") alleging that the Company failed to respond adequately or in a timely manner to certain requests for information under section 114 of the Act regarding volatile organic compound (VOC) emissions at the Company's Orangeburg, South Carolina plant and the plant's compliance with Prevention of Significant Deterioration (PSD) of air quality requirements. The DOJ notice demanded a penalty of $530,000 and the submission of certain information by a date certain. The Company denies that it failed to respond in any material respect or that there was a violation of PSD requirements. The Company retained an independent consultant with experience in the field to review the available data and prepare and submit a tabulation of that data in the format demanded by the EPA. This information has been furnished. The Company continues in settlement negotiations with the DOJ. ITEM 6. Exhibits and Reports on Form 8-K --------------------------------- (a) Exhibits - Current By-Laws as amended - Financial Data Schedule (b) No reports on Form 8-K have been filed during the quarter for which this report is filed. 19 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ALBEMARLE CORPORATION --------------------- (Registrant) Date: November 12, 1997 By: Dirk Betlem ----------------- Dirk Betlem President (Chief Operating Officer) Date: November 12, 1997 By: Thomas G. Avant ----------------- Thomas G. Avant Senior Vice President (Principal Accounting Officer) 20 EXHIBIT INDEX ------------- Page Number and Name of Exhibit Number - -------------------------- ------ 28.1 Current By-Laws As Amended 21-35 27 Financial Data Schedule 36-37 EX-28 2 BY-LAWS 21 ALBEMARLE CORPORATION --------------------- BYLAWS ------ ARTICLE I --------- MEETING OF SHAREHOLDERS ----------------------- SECTION 1. PLACES OF MEETINGS. All meetings of the shareholders shall be held at such place, either within or without the Commonwealth of Virginia, as may, from time to time, be fixed by the Board of Directors. SECTION 2. ANNUAL MEETINGS. The annual meeting of the shareholders, for the election of directors and transaction of such other business as may come before the meeting, shall be held each year in Richmond, Virginia at 11:00 a.m. EDT on the fourth Wednesday in April or at such other date and time as the Board of Directors of the Corporation may designate from time to time. SECTION 3. SPECIAL MEETINGS. Special meetings of shareholders for any purpose or purposes may be called at any time by the Chairman of the Board or by a majority of the Board of Directors. At a special meeting, no business shall be transacted and no corporate action shall be taken other than that stated in the notice of the meeting. SECTION 4. NOTICE OF MEETINGS. Except as otherwise required by law, written or printed notice stating the place, day and hour of every meeting of the shareholders and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be mailed not less than ten (10) nor more than sixty (60) days before the date of the meeting to each shareholder of record entitled to vote at such meeting, at his or her address which appears in the share transfer books of the Corporation. Meetings may be held without notice if all the shareholders entitled to vote at the meeting are present in person or by proxy or if notice is waived in writing by those not present, either before or after the meeting. 22 Section 5. QUORUM. Except as otherwise required by the Articles of Incorporation, any number of shareholders together holding at least a majority of the outstanding shares of capital stock entitled to vote with respect to the business to be transacted, who shall be present in person or represented by proxy at any meeting duly called, shall constitute a quorum for the transaction of business. If less than a quorum shall be in attendance at the time for which a meeting shall have been called, the meeting may be adjourned from time to time by a majority of the shareholders present or represented by proxy without notice other than by announcement at the meeting. Section 6. VOTING. At any meeting of the shareholders each shareholder of a class entitled to vote on the matters coming before the meeting shall have one vote, in person or by proxy, for each share of capital stock standing in his or her name on the books of the Corporation at the time of such meeting or on any date fixed by the Board of Directors not more than seventy (70) days prior to the meeting. Every proxy shall be in writing, dated and signed by the shareholder entitled to vote or his duly authorized attorney-in-fact. Section 7. VOTING LIST. The officer or agent having charge of the stock transfer books for shares of the Corporation shall make, at least ten (10) days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting or any adjournment thereof, with the address of and the number of shares held by each. Such list, for a period of ten (10) days prior to such meeting, shall be kept on file at the registered office of the Corporation or at its principal place of business or at the office of its transfer agent or registrar and shall be subject to inspection by any shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting. The original stock transfer books shall be prima facie evidence as to who are the shareholders entitled to examine such list or transfer books or to vote at any meeting of shareholders. If the requirements of this section have not been substantially complied with, the meeting shall, on the demand of any shareholder in person or by proxy, be adjourned until the requirements are complied with. 23 Section 8. SHAREHOLDER PROPOSALS. To be properly brought before an annual meeting of shareholders, business must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (ii) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (iii) otherwise properly brought before the meeting by a shareholder. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a shareholder's notice must be given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the Corporation not later than ninety (90) days in advance of the annual meeting. A shareholder's notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting (including the specific proposal to be presented) and the reasons for conducting such business at the annual meeting, (ii) the name and record address of the shareholder proposing such business, (iii) the class and number of shares of the Corporation that are beneficially owned by the shareholder, and (iv) any material interest of the shareholder in such business. In the event that a shareholder attempts to bring business before an annual meeting without complying with the provisions of this Section 8, the Chairman of the meeting shall declare to the meeting that the business was not properly brought before the meeting in accordance with the foregoing procedures, and such business shall not be transacted. No business shall be conducted at the annual meeting except in accordance with the procedures set forth in this Section 8, provided, however, that nothing in this Section 8 shall be deemed to preclude discussion by any shareholder of any business properly brought before the annual meeting. SECTION 9. INSPECTORS. An appropriate number of inspectors for any meeting of shareholders may be appointed by the Chairman of such meeting. Inspectors so appointed will open and close the polls, will receive and take charge of proxies and ballots, and will decide all questions as to the qualifications of voters, validity of proxies and ballots, and the number of votes properly cast. 24 ARTICLE II ---------- Directors --------- SECTION 1. GENERAL POWERS. The property, affairs and business of the Corporation shall be managed under the direction of the Board of Directors, and except as otherwise expressly provided by law, the Articles of Incorporation or these Bylaws, all of the powers of the Corporation shall be vested in such Board. Any contract to which the Corporation is a party that is (i) not in the ordinary course of business or (ii) is in the ordinary course of business and involves a commitment by the Corporation of more than $100,000 and is not executed by the Chairman of the Board, must be approved by the Board of Directors or the Executive Committee prior to delivery. SECTION 2. NUMBER OF DIRECTORS. The Board of Directors shall be ten (10) in number. SECTION 3. ELECTION OF DIRECTORS. (a) Directors shall be elected each year at the annual meeting of shareholders. (b) Directors shall hold their offices for a term of one year and until their successors are elected. Any director may be removed from office as set forth in the Articles of Incorporation. (c) Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of the majority of the remaining directors though less than a quorum of the Board of Directors. (d) A majority of the number of directors fixed by these Bylaws shall constitute a quorum for the transaction of business. The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. 25 SECTION 4. MEETINGS OF DIRECTORS. Meetings of the Board of Directors shall be held at places within or without the Commonwealth of Virginia and at times fixed by resolution of the Board or upon call of the Chairman of the Board, and the Secretary or officer performing the Secretary's duties shall give not less than twenty-four (24) hours' notice by letter, telegraph or telephone (or in person) of all meetings of the directors, provided that notice need not be given of regular meetings held at times and places fixed by resolution of the Board. An annual meeting of the Board of Directors shall be held as soon as practicable after the adjournment of the annual meeting of shareholders. Meetings may be held at any time without notice if all of the Directors are present, or if those not present waive notice in writing either before or after the meeting. Directors may be allowed, by resolution of the Board, a reasonable fee and expenses for attendance at meetings. SECTION 5. NOMINATIONS. Subject to the rights of holders of any class or series of stock having a preference over the common stock as to dividends or upon liquidation, nominations for the election of Directors shall be made by the Board of Directors or a committee appointed by the Board of Directors or by any shareholder entitled to vote in the election of Directors generally. However, any shareholder entitled to vote in the election of Directors generally may nominate one or more persons for election as Directors at a meeting only if written notice of such shareholder's intent to make such nomination or nominations has been given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the Corporation not later than (i) with respect to an election to be held at an annual meeting of shareholders, ninety (90) days in advance of 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 (7th) day following the date on which notice of such meeting is first given to shareholders. Each notice shall set forth: (a) the name and address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (b) 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 the person or persons specified in the notice; (c) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (d) such other information regarding each nominee proposed by such shareholder 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, or intended to be nominated, by the Board of Directors; and (e) the consent of each nominee to serve as a Director of the Corporation if so elected. The Chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure. 26 ARTICLE III ----------- Committees ---------- SECTION 1. EXECUTIVE COMMITTEE. The Board of Directors shall, by vote of a majority of the number of Directors fixed by these Bylaws, designate an Executive Committee which shall consist of three or more Directors, including the Chairman of the Board. The members of the Executive Committee shall serve until their successors are designated by the Board of Directors, until removed or until the Executive Committee is dissolved by the Board of Directors. All vacancies which may occur in the Executive Committee shall be filled by the Board of Directors. When the Board of Directors is not in session, the Executive Committee shall have all power vested in the Board of Directors by law, the Articles of Incorporation or these By- laws, except as otherwise provided in the Virginia Stock Corporation Act. The Executive Committee shall report at the next regular or special meeting of the Board of Directors all action which the Executive Committee may have taken on behalf of the Board since the last regular or special meeting of the Board of Directors. Meetings of the Executive Committee shall be held at such places and at such times fixed by resolution of the Committee, or upon call of the Chairman of the Board. Not less than twelve (12) hours' notice shall be given by letter, telegraph or telephone (or in person) of all meetings of the Executive Committee, provided that notice need not be given of regular meetings held at times and places fixed by resolution of the Committee and that meetings may be held at any time without notice if all of the members of the Committee are present or if those not present waive notice in writing either before or after the meeting. A majority of the members of the Executive Committee then serving shall constitute a quorum for the transaction of business at any meeting. SECTION 2. EXECUTIVE COMPENSATION COMMITTEE. The Board of Directors, at its regular annual meeting, shall designate an Executive Compensation Committee which shall consist of two or more Directors who shall not be eligible for bonus, stock option or stock appreciation rights. In addition, the Board at any time may designate one or more alternate members of such Committee who shall be Directors not eligible for bonus, stock option or stock appreciation rights who may act in place of any absent regular member upon invitation by the Chairman or Secretary of the Committee. 27 With respect to bonuses, the Executive Compensation Committee shall have and may exercise the powers to determine the amounts annually available for bonuses pursuant to any bonus plan or formula approved by the Board, to determine bonus awards to executive officers and to exercise such further powers with respect to bonuses as may from time to time be conferred by the Board of Directors. With respect to salaries, the Executive Compensation Committee shall have and may exercise the power to fix and determine from time to time all salaries of the executive officers of the Corporation, and such further powers with respect to salaries as may from time to time be conferred by the Board of Directors. The Executive Compensation Committee shall administer the Corporation's Incentive Stock Option Plan (the Plan) and from time to time may grant, consistent with the Plan, stock options and stock appreciation rights and authorize the granting of restricted stock awards. Vacancies in the Executive Compensation Committee shall be filled by the Board of Directors, and members shall be subject to removal by the Board at any time. The Executive Compensation Committee shall fix its own rules of procedure. A majority of the number of regular members then serving shall constitute a quorum; and regular and alternate members present shall be counted to determine whether there is a quorum. The Executive Compensation Committee shall keep minutes of its meetings, and all action taken by it shall be reported to the Board of Directors. 28 SECTION 3. AUDIT COMMITTEE. The Board of Directors at its regular annual meeting shall designate an Audit Committee which shall consist of two or more Directors whose membership on the Committee shall meet the requirements set forth in the rules of the New York Stock Exchange, as amended from time to time. Vacancies in the Committee shall be filled by the Board of Directors with Directors meeting the requirements set forth above, giving consideration to continuity of the Committee, and members shall be subject to removal by the Board at any time. The Committee shall fix its own rules of procedure and a majority of the members serving shall constitute a quorum. The Committee shall meet at least twice a year with both the internal and the Corporation's outside auditors present at each meeting and shall keep minutes of its meetings and all action taken shall be reported to the Board of Directors. The Committee shall review the reports and minutes of any audit committees of the Corporation's subsidiaries. The Committee shall review the Corporation's financial reporting process, including accounting policies and procedures. The Committee shall examine the report of the Corporation's outside auditors, consult with them with respect to their report and the standards and procedures employed by them in their audit, report to the Board the results of its study and recommend the selection of auditors for each fiscal year. SECTION 4. NOMINATING COMMITTEE. The Board of Directors shall designate a Nominating Committee which shall consist of three or more Directors. The Committee shall make recommendations to the Board regarding nominees for election as Directors by the shareholders at each Annual Shareholders' Meeting and make such other recommendations regarding tenure, classification and compensation of Directors as the Committee may deem advisable from time to time. The Committee shall fix its own rules of procedure and a majority of the members serving shall constitute a quorum. SECTION 5. OTHER COMMITTEES OF THE BOARD. The Board of Directors, by resolution duly adopted, may establish such other committees of the Board as it may deem advisable and the members, terms and authority of such committees shall be as set forth in the resolutions establishing the same. 29 ARTICLE IV ---------- Officers -------- SECTION 1. ELECTION. The officers of the Corporation shall consist of a Chairman of the Board, a Vice Chairman of the Board, a President, one or more Vice Presidents (any one or more of whom may be designated as Executive Vice Presidents or Senior Vice Presidents), a Secretary and a Treasurer. In addition, such other officers as are provided in Section 3 of this Article may from time to time be elected by the Board of Directors. All officers shall hold office until the next annual meeting of the Board of Directors or until their successors are elected. The Chairman of the Board, the Vice Chairman of the Board and the President shall be chosen from among the Directors. Any two officers may be combined in the same person as the Board of Directors may determine, except that the President and Secretary may not be the same person. SECTION 2. REMOVAL OF OFFICERS; VACANCIES. Any officer of the Corporation may be removed summarily with or without cause, at any time by a resolution passed at any meeting by affirmative vote of a majority of the number of Directors fixed by these Bylaws. Vacancies may be filled at any meeting of the Board of Directors. SECTION 3. OTHER OFFICERS. Other officers may from time to time be elected by the Board, including, without limitation, one or more Assistant Secretaries and Assistant Treasurers. SECTION 4. DUTIES. The officers of the Corporation shall have such duties as generally pertain to their offices, respectively, as well as such powers and duties as are hereinafter provided and as from time to time shall be conferred by the Board of Directors. The Board of Directors may require any officer to give such bond for the faithful performance of his duties as the Board may see fit. 30 SECTION 5. DUTIES OF THE CHAIRMAN OF THE BOARD. The Chairman of the Board shall be the chief executive officer of the Corporation. He shall be responsible for the execution of the policies of the Board of Directors, shall serve as the Chairman of the Executive Committee and shall have direct supervision over the business of the Corporation and its several officers, subject to the authority of the Board of Directors. Except as otherwise provided in these Bylaws or the resolutions establishing such committees, he shall be ex officio a member of all committees of the Board with the power to vote. He shall preside at all meetings of shareholders, the Board of Directors and the Executive Committee. In the incapacity or absence of the President, the Chairman of the Board shall perform the duties and have the authority of the President. The Chairman of the Board may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments, except in cases where the signing and the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law otherwise to be signed or executed. In addition, he shall perform all duties incident to the office of the Chairman of the Board and such other duties as from time to time may be assigned to him by the Board of Directors. SECTION 6. DUTIES OF THE VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the Board shall perform all duties incident to the office of the Vice Chairman of the Board and shall have such other powers and duties as may from time to time be assigned to him by the Board of Directors or the Chairman of the Board. The Vice Chairman of the Board shall perform the duties of the Chairman of the Board in the absence of the Chairman of the Board. The Vice Chairman of the Board may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law otherwise to be signed or executed. SECTION 7. DUTIES OF THE PRESIDENT. The President shall be the Chief Operating Officer of the Corporation and shall have direct supervision over the business of the Corporation and its several officers, subject to the authority of the Board of Directors and the Chairman of the Board, and shall consult with and report to the aforementioned officer. The President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments, except in cases where the signing and the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law otherwise to be signed or executed. In addition, he shall perform all duties incident to the office of the President and such other duties as from time to time may be assigned to him by the Board of Directors or the Chairman of the Board. 31 SECTION 8. DUTIES OF THE VICE PRESIDENTS. Each Vice President of the Corporation (including any Executive Vice President and Senior Vice President) shall have powers and duties as may from time to time be assigned to him by the Board of Directors, the Chairman of the Board or the President. When there shall be more than one Vice President of the Corporation, the Board of Directors may from time to time designate one of them to perform the duties of the President in the absence of the President. Any Vice President of the Corporation may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law otherwise to be signed or executed. SECTION 9. DUTIES OF THE TREASURER. The Treasurer shall have charge and custody of and be responsible for all funds and securities of the Corporation, and shall cause all such funds and securities to be deposited in such banks and depositories as the Board of Directors from time to time may direct. He shall maintain adequate accounts and records of all assets, liabilities and transactions of the Corporation in accordance with generally accepted accounting practices; shall exhibit his accounts and records to any of the Directors of the Corporation at any time upon request at the office of the Corporation; shall render such statements of his accounts and records and such other statements to the Board of Directors and officers as often and in such manner as they shall require; and shall make and file (or supervise the making and filing of) all tax returns required by law. He shall in general perform all duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board of Directors, the Chairman of the Board or the President. 32 SECTION 10. DUTIES OF THE SECRETARY. The Secretary shall act as secretary of all meetings of the Board of Directors, the Executive Committee and all other Committees of the Board, and the shareholders of the Corporation, and shall keep the minutes thereof in the proper book or books to be provided for that purpose. He shall see that all notices required to be given by the Corporation are duly given and served; shall have custody of the seal of the Corporation and shall affix the seal or cause it to be affixed to all certificates for stock of the Corporation and to all documents the execution of which on behalf of the Corporation under its corporate seal is duly authorized in accordance with the provisions of these Bylaws; shall have custody of all deeds, leases, contracts and other important corporate documents; shall have charge of the books, records and papers of the Corporation relating to its organization and management as a Corporation; shall see that the reports, statements and other documents required by law (except tax returns) are properly filed; and shall, in general, perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board of Directors, the Chairman of the Board or the President. SECTION 11. OTHER DUTIES OF OFFICERS. Any officer of the Corporation shall have, in addition to the duties prescribed herein or by law, such other duties as from time to time shall be prescribed by the Board of Directors, the Chairman of the Board or the President. ARTICLE V --------- Capital Stock ------------- SECTION 1. CERTIFICATES. The shares of capital stock of the Corporation shall be evidenced by certificates in forms prescribed by the Board of Directors and executed in any manner permitted by law and stating thereon the information required by law. Transfer agents and/or registrars for one or more classes of the stock of the Corporation may be appointed by the Board of Directors and may be required to countersign certificates representing stock of such class or classes. In the event that any officer whose signature or facsimile thereof shall have been used on a stock certificate shall for any reason cease to be an officer of the Corporation and such certificate shall not then have been delivered by the Corporation, the Board of Directors may nevertheless adopt such certificate and it may then be issued and delivered as though such person had not ceased to be an officer of the Corporation. 33 SECTION 2. LOST, DESTROYED AND MUTILATED CERTIFICATES. Holders of the stock of the Corporation shall immediately notify the Corporation of any loss, destruction or mutilation of the certificate therefor, and the Board of Directors may, in its discretion, cause one or more new certificates for the same number of shares in the aggregate to be issued to such stockholder upon the surrender of the mutilated certificate or upon satisfactory proof of such loss or destruction, and the deposit of a bond in such form and amount and with such surety as the Board of Directors may require. SECTION 3. TRANSFER OF STOCK. The stock of the Corporation shall be transferable or assignable only on the books of the Corporation by the holders in person or by attorney on surrender of the certificate for such shares duly endorsed and, if sought to be transferred by attorney, accompanied by a written power of attorney to have the same transferred on the books of the Corporation. The Corporation will recognize the exclusive right of the person registered on its books as the owner of shares to receive dividends and to vote as such owner. SECTION 4. FIXING RECORD DATE. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of the shareholders or any adjournment thereof, or entitled to receive payment for any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than seventy (70) days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. If no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section such determination shall apply to any adjournment thereof. ARTICLE VI ---------- Miscellaneous Provisions ------------------------- SECTION 1. SEAL. The seal of the Corporation shall consist of a flat-face circular die, of which there may be any number of counterparts, on which there shall be engraved in the center the words "Albemarle Corporation." 34 SECTION 2. FISCAL YEAR. The fiscal year of the Corporation shall end on December 31st of each year, and shall consist of such accounting periods as may be recommended by the Treasurer and approved by the Executive Committee. SECTION 3. BOOKS AND RECORDS. The Corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its shareholders and Board of Directors; and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar a record of its shareholders, giving the names and addresses of all shareholders, and the number, class and series of the shares being held. Any person who shall have been a shareholder of record for at least six months immediately preceding his demand or who shall be the holder of record of at least five percent (5%) of all the outstanding shares of the Corporation, upon written demand stating the purpose thereof, shall have the right to examine, in person, or by agent or attorney at any reasonable time or times, for any proper purpose, its books and records of account, minutes and records of shareholders and to make extracts therefrom. Upon the written request of a shareholder, the Corporation shall mail to such shareholder its most recent published financial statements showing in reasonable detail its assets and liabilities and the results of its operations. The Board of Directors shall, subject to the provisions of the foregoing paragraph of this section, to the provisions of Section 7 of Article I and to the laws of the Commonwealth of Virginia, have the power to determine from time to time whether and to what extent and under what conditions and limitations the accounts, records and books of the Corporation, or any of them, shall be open to the inspection of the shareholders. SECTION 4. CHECKS, NOTES AND DRAFTS. Checks, notes, drafts and other orders for the payment of money shall be signed by such persons as the Board of Directors from time to time may authorize. When the Board of Directors so authorizes, however, the signature of any such person may be a facsimile. SECTION 5. AMENDMENT OF BYLAWS. These Bylaws may be amended or altered at any meeting of the Board of Directors by affirmative vote of a majority of the number of Directors fixed by these Bylaws. The shareholders entitled to vote in respect of the election of directors, however, shall have the power to rescind, alter, amend or repeal any Bylaws and to enact Bylaws which, if expressly so provided, may not be amended, altered or repealed by the Board of Directors. 35 SECTION 6. VOTING OF STOCK HELD. The Chairman of the Board or such other officer or officers as may be designated by the Board of Directors or the Executive Committee shall from time to time appoint an attorney or attorneys or agent or agents of this Corporation, in the name and on behalf of this Corporation, to cast the vote which this Corporation may be entitled to cast as a shareholder or otherwise in any other corporation any of whose stock or securities may be held in this Corporation, at meetings of the holders of the stock or other securities of such other corporation, or to consent in writing to any action by any of such other corporation, and shall instruct the person or persons so appointed as to the manner of casting such votes or giving such consent and may execute or cause to be executed on behalf of this Corporation and under its corporate seal or otherwise, such written proxies, consents, waivers or other instruments as may be necessary or proper in the premises; or, in lieu of such appointment, the Chairman of the Board or any such designated officer or officers may attend in person any meetings of the holders of stock or other securities of any such other corporation and there vote or exercise any or all power of this Corporation as the holder of such stock or other securities of such other corporation. SECTION 7. CONTROL SHARE ACQUISITION STATUTE. Article 14.1 of the Virginia Stock Corporation Act ("Control Share Acquisitions") shall not apply to acquisitions of shares of stock of the Corporation. EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF INCOME FILED AS PART OF THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q. 1,000 9-MOS DEC-31-1997 SEP-30-1997 $10,339 $0 $151,967 $1,510 $95,372 $273,416 $1,180,169 $682,270 $864,116 $125,119 $0 $0 $0 $554 $539,420 $864,116 $613,180 $613,180 $416,089 $521,077 $0 $0 $559 $92,383 $33,295 $59,088 $0 $0 $0 $59,088 $1.06 $1.06
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