SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
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(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Fiscal Year Ended December 31, 2001
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
[_] SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ______ to ______
Commission file number: 33-63525
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
SAVINGS PLAN FOR THE EMPLOYEES
OF ETHYL CORPORATION
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
Ethyl Corporation
P. O. Box 2189
Richmond, Virginia 23218
SAVINGS PLAN FOR THE EMPLOYEES OF ETHYL CORPORATION
FINANCIAL STATEMENTS AND SCHEDULE
DECEMBER 31, 2001 AND 2000
SAVINGS PLAN FOR THE EMPLOYEES OF ETHYL CORPORATION
INDEX OF FINANCIAL STATEMENTS AND SCHEDULE
Pages
Report of Independent Accountants 2
Financial Statements:
Statement of Net Assets Available for Benefits at December 31, 2001 3
Statement of Net Assets Available for Benefits at December 31, 2000 4
Statement of Changes in Net Assets Available for Benefits for the
Year Ended December 31, 2001 5
Notes to Financial Statements 6-10
Supplemental Schedule:
Schedule of Net Assets (Held at End of Year), December 31, 2001 11
* Other schedules required by 29 CFR 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 are not included because they are
not applicable.
Exhibit - Consent 12
1
Report of Independent Accountants
To the Administrator of the Savings Plan
For the Employees of Ethyl Corporation:
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Savings Plan for the Employees of Ethyl Corporation (the "Plan") at
December 31, 2001 and 2000, and the changes in net assets available for benefits
for the year ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Plan's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) December 31, 2001 is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
PricewaterhouseCoopers LLP
June 26, 2002
2
SAVINGS PLAN FOR THE EMPLOYEES OF ETHYL CORPORATION
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2001
Participant Non-Participant
Directed Directed Total
------------ --------------- -----------
Assets:
Cash $ - $ 49,048 $ 49,048
Investments:
Mutual Funds:
Pimco Total Return Fund 2,242,787 - 2,242,787
Merrill Lynch Capital Fund 3,666,559 - 3,666,559
Merrill Lynch Growth Fund 1,253,608 - 1,253,608
Franklin Small Cap Fund 3,651,348 - 3,651,348
Ivy International Fund 649,842 - 649,842
Davis New York Venture Fund 4,295,204 - 4,295,204
Commingled Trusts:
Merrill Lynch Equity Index Trust 23,097,978 - 23,097,978
Merrill Lynch Retirement Preservation Trust 8,546,380 - 8,546,380
Common stocks:
Ethyl Corporation
Participant directed 2,027,240 - 2,027,240
Non-participant directed - 3,995,416 3,995,416
Albemarle Corporation 7,907,079 - 7,907,079
Tredegar Corporation 3,229,347 - 3,229,347
Loans to participants 746,349 - 746,349
Pending Settlement Fund 13,896 - 13,896
------------ --------------- -----------
Total investments 61,327,617 3,995,416 65,323,033
Receivables:
Interest and dividends 50,041 39,019 89,060
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Net assets available for benefits $ 61,377,658 $ 4,083,483 $65,461,141
============ =============== ===========
The accompanying notes are an integral part of the financial statements.
3
SAVINGS PLAN FOR THE EMPLOYEES OF ETHYL CORPORATION
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2000
Participant Non-Participant
Directed Directed Total
------------ --------------- -----------
Assets:
Cash $ 205,682 $ 89,612 $ 295,294
Investments:
Mutual Funds:
Pimco Total Return Fund 1,482,806 - 1,482,806
Merrill Lynch Capital Fund 4,264,297 - 4,264,297
Merrill Lynch Growth Fund 1,422,829 - 1,422,829
Franklin Small Cap Fund 10,389,120 - 10,389,120
Ivy International Fund 1,943,101 - 1,943,101
Davis New York Venture Fund 4,167,164 - 4,167,164
Commingled Trusts:
Merrill Lynch Equity Index Trust 30,615,482 - 30,615,482
Merrill Lynch Retirement Preservation Trust 9,561,309 - 9,561,309
Common stocks:
Ethyl Corporation
Participant directed 3,642,421 - 3,642,421
Non-participant directed - 4,798,114 4,798,114
Albemarle Corporation 14,181,386 - 14,181,386
Tredegar Corporation 5,989,182 - 5,989,182
Loans to participants 1,111,254 - 1,111,254
------------ --------------- -----------
Total investments 88,770,351 4,798,114 93,568,465
Receivables:
Interest and dividends 88,212 31,156 119,368
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Net assets available for benefits $ 89,064,245 $ 4,918,882 $93,983,127
============ =============== ===========
The accompanying notes are an integral part of the financial statements.
4
SAVINGS PLAN FOR THE EMPLOYEES OF ETHYL CORPORATION
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, 2001
Participant Non-Participant
Directed Directed Total
-------------- -------------- -------------
Additions:
Contributions:
Employee contributions $ 5,891,269 $ - $ 5,891,269
Employer contributions 2,120,529 2,120,529
Net investment income:
Dividends 1,302,573 - 1,302,573
Interest:
Funds - 7,862 7,862
Loans to participants 85,967 - 85,967
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Total additions 7,279,809 2,128,391 9,408,200
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Deductions:
Benefit payments (25,948,302) (603,500) (26,551,802)
Net depreciation in fair value of investments (9,165,537) (2,212,847) (11,378,384)
-------------- ------------- -------------
Total deductions (35,113,839) (2,816,347) (37,930,186)
Interfund transfers (net) 147,443 (147,443) -
-------------- ------------- -------------
Total deductions and transfers (34,966,396) (2,963,790) (37,930,186)
-------------- ------------- -------------
Net decrease for the year (27,686,587) (835,399) (28,521,986)
Net assets available for benefits, December 31, 2000 89,064,245 4,918,882 93,983,127
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Net assets available for benefits, December 31, 2001 $ 61,377,658 $ 4,083,483 $ 65,461,141
============== ============= =============
The accompanying notes are an integral part of the financial statements.
5
SAVINGS PLAN FOR THE EMPLOYEES OF ETHYL CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Basis of Accounting:
The accompanying financial statements of the Savings Plan for the Employees
of Ethyl Corporation (the "Plan") have been prepared in conformity with
accounting principles generally accepted in the United States of America.
Accounting Estimates:
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the
Plan's management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from those
estimates.
Risks and Uncertainties:
The Plan provides for various mutual fund investment options in stocks,
bonds and fixed income securities as well as direct common stock
investments. Investments are exposed to various risks, such as interest
rate, market and credit risk. Due to the level of risk associated with
certain investment securities and the level of uncertainty related to
changes in the value of investment securities, it is at least reasonably
possible that changes in risks in the near term could materially affect
participants' account balances and the amounts reported in the statements of
net assets available for benefits and the statement of changes in net assets
available for benefits.
Security Valuation:
Investments are stated at fair value determined as follows:
Merrill Lynch Retirement - Investments in commingled trusts with
Preservation Trust Guaranteed Investment Contracts
("GIC's") and Bank Investment Contracts
("BIC's") with benefit responsive features
are carried at cost plus accrued interest
(contract value). Synthetic investment
contracts are stated at the contract book
value which approximates amortized cost.
Money market instruments and US Government
agency obligations are valued at amortized
cost.
Mutual funds and Merrill - quoted market value
Lynch Equity Index Trust
Common stocks - last published year end sales price on the
New York Stock Exchange
Loans to participants - balances due which approximate fair value
6
SAVINGS PLAN FOR THE EMPLOYEES OF ETHYL CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
1. Summary of Significant Accounting Policies, continued:
Security Transactions and Related Investment Income:
Security transactions are accounted for on a trade-date basis and dividend
income is recorded on the ex-dividend date. Interest income is recorded on
the accrual basis. The Plan presents in the statement of changes in net
assets available for benefits the "net depreciation in the fair value of
investments" which consists of realized gains or losses and changes in the
unrealized appreciation (depreciation) on those investments. Investment
income is allocated to participant accounts in proportion to the
participant's account balance.
2. Description of Plan:
The Plan is a defined contribution plan. It is subject to the provisions of
the Employee Retirement Income Security Act of 1974. Information regarding
plan benefits, priority of distributions upon termination of the Plan, and
vesting is provided in the plan agreement which is available at the main
office of the plan administrator at 330 South Fourth Street, Richmond,
Virginia.
3. Investment Funds:
Effective November 3, 1997, Merrill Lynch Trust Company of America was
appointed investment manager and trustee and Merrill Lynch, Pierce, Fenner
& Smith, Inc. was appointed recordkeeper (collectively "Merrill Lynch" and
"ML"). The Plan currently consists of 11 active investment options.
Participants currently in the Plan may select a program for investment in
any of the 7 commingled trust funds and 3 common stocks, or in any
combination thereof. Contributions made by Ethyl Corporation (the "Company"
or "Ethyl") are invested in the non-participant directed portion of the
Ethyl Corporation Common Stock Fund, which contains both participant and
non-participant directed balances. Transfers may be made between the funds.
However, participants only have a one time election to transfer the
Company's contributions to the Ethyl Corporation Common Stock Fund into
other funds during the course of their employment. The following table
presents investments held at year-end that represent five percent (5%) or
more of net assets available for benefits:
7
SAVINGS PLAN FOR THE EMPLOYEES OF ETHYL CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
3. Investment Funds, continued:
2001 2000
Merrill Lynch Equity Index Trust $ 23,097,978 $ 30,615,482
Ethyl Corporation Common Stock * 6,022,656 8,440,535
Albemarle Corporation Common Stock 7,907,079 14,181,386
Merrill Lynch Retirement Presevation Trust 8,546,380 9,561,309
Franklin Small Cap 3,651,348 10,389,120
Merrill Lynch Capital Fund 3,666,559 4,264,297
Davis New York Venture Fund 4,295,204 4,167,164
* Nonparticipant-directed totals $3,995,416 and $4,798,114 for 2001 and
2000, respectively.
During 2001, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) depreciated
in value as follows:
Common stock $ (3,811,337)
Mutual Funds (4,098,364)
Commingled Trust Funds (3,468,683)
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$ (11,378,384)
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4. Contributions:
Participants in the Plan may make pre-tax and/or after-tax contributions
from 1% to 15% of their base pay, as defined in the plan document. Any
combination of pre-tax and after-tax contributions are subject to the 15%
limit. Participants may also contribute amounts representing distributions
from other qualified defined benefit or defined contribution plans. Ethyl
makes a matching contribution, in the form of Ethyl common stock, to the
Plan equal to 50% of participant contributions up to 10%. Participant
contributions are 100% vested at all times while contributions made by
Ethyl are 60% vested after three years of service, 80% vested after four
years of service and 100% vested after five years of service.
As of December 31, 2001, there were no employee or employer contributions,
which were received by Merrill Lynch, but not yet allocated to the specific
investment funds. As of December 31, 2000, employee and employer
contributions amounting to $190,183 and $88,543, respectively, were
received by Merrill Lynch, but not yet allocated to the specific investment
funds. These amounts are included in the cash balances on the statement of
net assets available for benefits at December 31, 2000.
8
SAVINGS PLAN FOR THE EMPLOYEES OF ETHYL CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
5. Participant Accounts:
Each participant's account is credited with the participant's contribution
and an allocation of a) the Company's contribution and b) Plan earnings.
Allocations are based on participant earnings or account balances, as
defined. The benefit to which a participant is entitled is the benefit that
can be provided from the participant's vested account.
6. Distributions:
Benefits are recorded when paid. Employees may decide whether benefits will
be received directly in the form of a lump sum or rolled over to an
individual retirement account or to another qualified plan.
7. Participant Loans:
Participants may borrow from their fund accounts a minimum of $1,000 up to
a maximum equal to the lesser of $50,000 or 50 percent of their vested
account balance. Loan transactions are treated as a transfer to (from) the
investment fund from (to) the Loan fund. Loans are made over a period not
to exceed five years. The loans are collateralized by the balance in the
participant's account and bear a reasonable fixed rate of interest
determined by the plan administrator based on a rate of return commensurate
with the prevailing interest rate charged on similar commercial loans by
persons in the business of lending money. At December 31, 2001 and December
31, 2000, interest rates on participant loans ranged from 7% to 10.5% and
8.25% to 10.5%, respectively.
8. Plan Termination:
Although it has not expressed any intent to do so, Ethyl has the right
under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of the Employee Retirement
Income Security Act of 1974. In the event of Plan termination, participants
will become 100% vested in their account balances and the assets of the
Plan shall be allocated to participants in proportion to their account
balances as of the effective date of termination.
9. Federal Income Taxes:
The U.S. Treasury Department advised the plan administrator on July 7, 1995
that the Plan, as amended and restated effective March 1, 1994, constitutes
a qualified trust under Section 401 of the Internal Revenue Code and
therefore is exempt from federal income taxes. The Plan has been amended
since March 1, 1994 and was' restated effective January 1, 1998. The Plan
applied for a new determination letter on March 6, 2002, but has not yet
received a response from the IRS. However, the plan administrator believes
that the Plan is designed and currently is being operated in compliance
with the applicable provisions of the Internal Revenue Code. Therefore,
they believe that the Plan was qualified and the related trust was
tax-exempt as of the financial statement date.
9
SAVINGS PLAN FOR THE EMPLOYEES OF ETHYL CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
9. Federal Income Taxes, continued:
Until such time as participants withdraw all or part of their accumulated
account balance, their invested funds are not subject to federal income
taxes for contributions made on their behalf by Ethyl or for investment
income and gains received on such investments.
10. Administration Expenses:
Expenses for administering the Plan are borne entirely by Ethyl and no
charge is made to the Plan with respect thereto.
11. Forfeitures:
Employees who leave Ethyl before becoming fully vested in Ethyl
contributions forfeit the value of their nonvested account. Forfeitures
during a Plan year serve to reduce required Company contributions and to
cover Plan expenses, and are reflected in the statement of changes in net
assets available for benefits of the year in which the forfeitures are
applied to Ethyl's contribution. At December 31, 2001 and December 31,
2000, the forfeiture balance was $19,901 and $19,610, respectively, and
$27,487 was applied to employer contributions in 2001.
12. Related-Party Transactions:
Certain Plan investments are shares of investment funds managed by Merrill
Lynch, the trustee of the Plan. Investments in the Ethyl Corporation Common
Stock Fund represent investments in shares of common stock of Ethyl
Corporation, the Plan sponsor. The balance within this account was
$6,022,655, or 6,546,365 shares, and $8,440,535, or 5,873719 shares, at
December 31, 2001 and 2000, respectively. Current year activity within this
fund included purchases of $2,908,045, or 2,195,778 shares, and sales of
$6,284,397, or 1,253,854 shares.
10
SAVINGS PLAN FOR THE EMPLOYEES OF ETHYL CORPORATION
Schedule H, Line 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2001
EIN: 54-011882 PN: 002
(a) (b) Identity of issuer, (c) Description of investment, including
borrower, lessor or maturity date, rate of interest, collateral, (e) Current
similar party par or maturity value (d) Cost value
** Ethyl Corporation Common stock, $1.00 par value (6,546,365 shares) $34,628,791 $ 6,022,656
Tredegar Corporation Common stock, no par value (169,966 shares) 3,229,347
Albemarle Corporation Common stock, $.01 par value (329,462 shares) 7,907,079
** Participant Loans Loans to participants bearing interest at 7% - 10.5%,
maturity dates of 1/09/02 - 8/30/06 746,349
** Merrill Lynch Retirement Preservation Trust (8,546,380 units) 8,546,380
** Merrill Lynch Equity Index Trust (286,575 units) 23,097,978
PIMCO Total Return Fund (214,416 units) 2,242,787
** Merrill Lynch Capital Fund (137,170 units) 3,666,559
** Merrill Lynch Growth Fund (69,222 units) 1,253,608
Franklin Small Cap Growth Fund (117,143 units) 3,651,348
Ivy International Fund (31,409 units) 649,842
Davis New York Venture Fund (168,903 units) 4,295,204
Pending Settlement Fund 13,896
--------------- ---------------
$65,323,033
=============== ===============
**Denotes a party in interest to the Plan
11
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
SAVINGS PLAN FOR THE EMPLOYEES OF
ETHYL CORPORATION
BY: /s/ David A. Fiorenza
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David A. Fiorenza
Vice President, Treasurer and Principal Financial
Officer, Member of the Master Trust Committee
Dated: June 28, 2002