FORM 10-K -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] Annual Report Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the fiscal year ended December 31, 2000 or [ ] Transition Report Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the 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 Securities registered pursuant to Section 12(b) of the Act: <TABLE> <S> <C> Title of each class Name of each exchange on which registered COMMON STOCK, $.01 Par Value NEW YORK STOCK EXCHANGE </TABLE> Indicate by check mark whether the registrant (1) has filed all reports re- quired 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 regis- trant was required to file such reports), and (2) has been subject to such fil- ing requirements for at least the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K X Aggregate market value of voting stock held by non-affiliates of the registrant as of December 31, 2000: $675,504,844* Number of shares of Common Stock outstanding as of December 31, 2000: 45,823,743. *In determining this figure, an aggregate of 18,530,618 shares of Common Stock treated as beneficially owned by Floyd D. Gottwald, Jr., Bruce C. Gottwald and members of their families have been excluded and treated as shares held by af- filiates. See Item 12 herein. The aggregate market value has been computed on the basis of the closing price on the New York Stock Exchange Composite Trans- actions on December 29, 2000, as reported by The Wall Street Journal. Documents Incorporated by Reference ----------------------------------- Portions of Albemarle Corporation's definitive Proxy Statement for its 2001 An- nual Meeting of Shareholders filed with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 (the "Proxy Statement") are incorporated by reference into Part III of this Form 10-K. 1 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- PART I ------ ITEM 1. Business ---------------- Albemarle Corporation ("the Company" or "Albemarle") is a major producer of polymer and fine chemicals most of which are additives to or intermediates for plastics, polymers and elastomers, cleaning products, agricultural compounds, pharmaceuticals, photographic chemicals, drilling compounds and biocides. Most sales of the Company's products are made directly to manufacturers of the aforementioned products, including chemical and polymer companies, pharmaceuti- cal companies, cleaning product manufacturers, paper and photographic compa- nies, drilling companies and water treatment companies. Albemarle employs ap- proximately 2,450 people. The following discussion of the Company's businesses as of December 31, 2000, should be read in conjunction with the information contained in Item 7, Manage- ment's Discussion and Analysis of Financial Condition and Results of Operations on page 8. The Company's worldwide chemicals operations are reported as two separate and distinct operating segments Polymer Chemicals and Fine Chemicals. The Company produces the majority of its products in the United States, but also has production facilities in France and the United Kingdom and has alumi- num alkyls produced for it by BP Amoco [formerly Amoco Chemical Company ("Amoco")] at the Company's former Feluy, Belgium plant. The processes and technology for many of these products were developed in the Company's or its predecessor's research and development laboratories. The Company also has an interest in certain joint venture production facilities in Japan and China. The Polymer Chemicals' operating segment consists of a broad range of chemi- cals, including flame retardants, catalysts and polymer additives. Albemarle's flame retardants are manufactured to help polymers and other ma- terials meet fire-safety requirements in finished products which serve a vari- ety of end use markets including electronic enclosures, printed circuit boards, electrical connectors and construction. The Company started up a world-class six-sigma SAYTEX(R) CP-2000 flame retardant (tetrabromobisphenol-A) plant in Magnolia, Arkansas in late 1999. The Company continues to focus on expansion of its bromine production capa- bilities with the addition of a new plant in Arkansas for bromine production as well as the engineering phase leading to the construction of a bromine and bro- mine derivatives facility in Jordan with Albemarle's joint-venture partner, The Arab Potash Company Limited. The Company continued its expansion of brine field and bromine capacities at the Company's Magnolia, Arkansas, facility that it started in 1995. The result of the current phase of the program will be an approximate 38% bromine production capacity increase over 1995 year end. The Company's catalyst business is the world's largest supplier of aluminum alkyls which are used as co-catalysts in the production of polyolefins, such as polyethylene and polypropylene, elastomers, alpha olefins such as hexene, octene and decene, and organotin heat stabilizers and in the preparation of or- ganic intermediates. The Company has production units at Pasadena, Texas, Orangeburg, South Carolina, Baton Rouge, Louisiana, Feluy, Belgium, which is leased, and a 50%-owned joint venture in Japan. The Company has continued to build on its organometallics base and expand the portfolio of products and capabilities it offers its customers pursuing the development and commercial- ization of polymers based on metallocenes /single-site catalysts. The Company also is expanding its efforts in polymer additives, such as curatives, which are products used to control polyurethane and epoxy system po- lymerization. Also produced are antioxidants and alkylated hindered phenolics that are used to maintain the performance integrity of thermoplastic resins. The Fine Chemicals' operating segment includes pharmachemicals, agrichemical intermediates and performance chemicals. Included in performance chemicals are elemental bromine, alkyl bromides, inorganic bromides, and a number of bromine fine chemicals. Applications for these products primarily exist in chemical synthesis, oil and gas well drilling and completion fluids, water purification, glass making, cleaning products, soil fumigation and chemical intermediates for pharmaceutical, photographic and agricultural chemicals. Other performance chemicals' products include tertiary amines for surfactants and biocides, dis- infectants and sanitizers; zeolite A (sodium alumina silicate) used as a phos- phate replacement in laundry detergent builders; and alkenyl succinic anhydride (ASA) used in paper-sizing formulations. These products have many varied cus- tomers. They are sold to suppliers for use in household, institutional and in- dustrial cleaners, personal care products and other industrial products. The Company's pharmachemicals' primary bulk actives, ibuprofen and naproxen, are widely-used pharmaceuticals that provide fever reduction and temporary re- lief of aches and pains and menstrual cramps. Bulk ibuprofen and naproxen are formulated by pharmaceutical companies who sell to customers in both the pre- scription and over-the-counter markets. Ibuprofen products accounted for ap- proximately 30% and naproxen products accounted for 6% of the U.S. over-the- counter analgesic market in 2000 on a volume basis. They compete against other painkillers including aspirin, acetaminophen and ketoprofen. The Company is one of the world's largest producers of ibuprofen. 2 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- Agrichemical intermediates are sold to chemical companies that supply fin- ished products to farmers, governments and others. These products include orthoalkylated anilines for the acetanilide family of pre-emergent herbicides used on corn, soybeans and other crops and organophosphorus products for insec- ticide use. In 2000, the EPA initiated a program that will phasedown the end market products over a five-year period that use Albemarle's organophosphorus agrichemical intermediates. The Company's subsidiary, Albemarle PPC ("APPC"), operates a plant in Thann, France. APPC is one of the world's largest producers of organic and inorganic brominated compounds used mainly in pharmaceutical, photographic and agricul- tural chemical intermediates. APPC also operates an electrolysis unit to pro- duce high-purity caustic potash and potassium carbonate used in the glass, wa- ter treatment, cleaning product and food industries. APPC strengthens the Company's position in Fine Chemicals and provides additional manufacturing ca- pabilities in Europe. In Polymer Chemicals' product lines, some of the Company's flame retardant plants operated at high capacity utilization during 2000; however, the aluminum alkyls plants operated at below capacity rates. In the Fine Chemicals' product lines, most plants operated near capacity during 2000, with the exception of bulk naproxen and certain agrichemical products which had excess capacity due to low customer demand. The Company operates on a worldwide basis with (i) manufacturing plants lo- cated in France and the United Kingdom, in addition to facilities in the United States, and has interest in certain joint venture production facilities in Ja- pan and China, (ii) offices and distribution terminals in Belgium, France, Ja- pan and Singapore, as well as the United States and (iii) offices in Shanghai and Beijing, China. The Company does not believe it has significant assets in countries in which those assets would be deemed to be exposed to substantial risk. See Note 16, "Operating Segments and Geographic Area Information" of notes to the consolidated financial statements in Item 8 on page 33. Competition ----------- The Company operates in a highly competitive marketplace, competing against a number of other companies in most of its product lines. Some markets involve a significant number of competitors, while others involve only a few. The compet- itors of the Company are varied in terms of size, resources and market share. Competition generally is based on product performance and availability, reputa- tion for quality, price and customer service and support. The degree and nature of competition depends on the type of product involved. In general, the Company competes on the basis of the quality and price of its products as well as customer services by maintaining a broad range of products and by focusing resources on products in which the Company has a competitive advantage. The Company endeavors to improve its reputation for quality prod- ucts, competitive prices and excellent customer service and support. Competi- tion in connection with the Company's products requires continuing investments in research and development, product and process improvements and specialized customer services. Through research and development, the Company and its sub- sidiaries continue to seek to increase margins by introducing value-added prod- ucts and products based on proprietary technologies. Raw Materials ------------- Raw materials used by the Company include ethylene, potassium chloride, alumi- num, ortho-toluidine, bisphenol-A, chlorine, phenol, isobutylene, caustic soda, toluene, diphenyl oxide, alumina trihydrate, dimethlyamine, phthalic anhydride, polystyrene, alpha olefins, maleic anhydride, ethanol, phosphorus, sulfuric acid and nitrogen, as well as electricity and natural gas as fuels, most of which are readily available from numerous suppliers and are purchased or pro- vided under contracts at prices the Company believes are competitive. The Com- pany also produces bromine in Arkansas from its extensive brine reserves sup- ported by an active leasing program. The Company has supply agreements with the Dead Sea Bromine group of companies. The contracts essentially cover the bro- mine requirements for the production of bromine fine chemicals in the Thann and Port-de-Bouc, France, facilities and provide additional bromine if requested for the Company's other bromine needs. 3 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- Major Customers --------------- Due to the diversity of product lines in which the Company competes, no major portion of the Company's overall sales or earnings was generated by one cus- tomer nor is the Company overly reliant on contracts with any one public, pri- vate or governmental entity, although loss of one or more major customers could have a substantial financial impact. A number of the Company's customers manufacture products for cyclical indus- tries such as the agricultural, pharmaceutical, automotive, electronics and building and construction industries. As a result, demand for the products of the Company from customers in such industries also is cyclical. Due to the di- versity and size of the Company's operations, there is little seasonal varia- tion in revenues or earnings, except for certain agricultural and pharmaceuti- cal products. In addition, the profitability of sales of certain of the Company's products depends on the level of industry growth and our plant capacity utilization. In zeolites, our volumes and margins will be lower in 2001 versus 2000 due to a new competitor entering the U.S. Market. We plan to address some of the impact through cost reductions while seeking opportunities to expand into other appli- cations utilizing these assets. In 2001, we anticipate an adverse profit impact from the decrease of the zeolite business, however, we are hopeful we will be able to offset most of the impact by improvements in the rest of our fine chem- icals. Other Matters ------------- In April 2000, the Company made a change in election in certain of its pension annuity contracts. This election resulted in the recognition of a one-time noncash special accounting settlement gain of $15.0 million ($9.6 million after income taxes, or 20 cents per share on a fully diluted basis). The special item gain did not affect any retiree benefit or benefit programs of the Company. On June 7, 2000, the Company's wholly-owned subsidiary, Albemarle Ventures Company Limited, formed a joint venture with Ninghai County Jinhai Chemical and Industry Company Limited to create the Ningbo Jinhai Albemarle Chemical and In- dustrial Company Limited. Albemarle will own 25% of the new company. The joint venture will manufacture antioxidants and polymer intermediates and other mutu- ally agreed upon fine chemicals for sale in China and for export. On June 29, 2000, the Company and its wholly-owned subsidiary, Albemarle Chemicals SAS, acquired from Ferro Corporation the PYRO-CHEK(R) Flame Retardant business, including a plant at Port-de-Bouc, France. The purchase price amounted to approximately $35 million. The purchase price was allocated between property, plant, and equipment, inventory, identifiable intangibles with the remaining balance to goodwill. During the fourth quarter of 2000, the Company formed a joint venture with Cytec Industries Inc. and GE Specialty Chemicals, Inc. Each company in the joint venture will have a 33% ownership in the new company, PolymerAdditives.com, LLC. The purpose of the new venture is to allow internet-based sale of polymer additives to customers. During the fourth quarter of 2000, the Company incurred special charges of $6.9 million ($4.4 million after income taxes or 9 cents per share on a fully diluted basis) that resulted primarily from voluntary separation offers made to various employees throughout the Company. The program impacted a total of 76 salaried and wageroll employees. The Company expects to recover the costs of the reductions in force in approximately one year. Research and Patents -------------------- The Company's research and development ("R&D") efforts support each operating segment. With respect to Polymer Chemicals, the research focus is divided be- tween new and improved flame retardants, polymerization catalysts and new poly- mer additives. Flame retardant research is targeted to satisfy increasing mar- ket needs for performance and quality in products manufactured from polysty- rene, acrylonitrilebutadiene-styrene (ABS) and engineered thermoplastics. Cata- lysts research is targeted to meet the market needs for cost-effective metallocene catalyst systems for the production of improved polyolefin poly- mers. Development efforts are focused on efficiently debottle- necking pilot plant capacity to meet the expected demand for these businesses and to inven- tory new molecules to meet the expanding needs of our customers. These efforts are expected to continue into 2001 and beyond. 4 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- The primary focus of the Company's Fine Chemicals research program is the de- velopment of efficient processes for the manufacture of chemical intermediates for the pharmaceutical and agrichemical industries. Another area of research is the development of biocides for industrial and recreational water treatment and other applications, especially products based on bromine chemistry. These ef- forts are expected to continue into 2001 and beyond. In addition to the U.S. research facility in Baton Rouge, Louisiana, the Company's European businesses are supported by the research and development facility at Louvain-la-Neuve, Belgium. The Company spent approximately $26.2 million, $34.3 million and $29.7 mil- lion in 2000, 1999 and 1998, respectively, on research and development, which amounts qualified under the technical accounting definition of research and de- velopment. Total R&D department spending for 2000 was about $31.4 million, in- cluding $5.2 million related to technical services support to customers and the Company's plants, testing of existing products, quality improvement and envi- ronmental studies. The Company considers patents, licenses and trademarks to be of significance to its businesses. As of December 31, 2000, the Company owned 1,553 active United States and foreign patents, including 48 U.S. patents and 110 foreign patents issued in 2000. The above figures include 9 U.S. Patents and 18 foreign patents that were acquired from Ferro Corporation in June 2000. Some of the Company's patents are licensed to others. In addition, rights under the patents and inventions of others have been acquired by the Company through licenses. The Company's patent position is actively managed and is deemed by it to be adequate for the conduct of its business. Albemarle has been granted an Advanced Technology Program (ATP) award from the Federal Government of approximately $2 million over a three-year-period to share the cost of a research project entitled Single Site Catalysts. The pur- pose of this project is to develop new families of activators for use with metallocenes and other single site catalysts by the polyolefin industry. The ATP is a competitive cost-sharing program designed for the Federal Government to work in partnership with industry to foster the development of challenging, high-risk technologies that offer the potential for significant, broad-based economic benefits for the nation. ATP recipients are selected through a highly competitive process and single company recipients can receive up to $2 million for R&D activities over a3-year period. Environmental Regulation ------------------------ The Company maintains and operates manufacturing and distribution facilities and equipment which are used in the Polymer and Fine Chemicals' segments. These are subject to environmental risks and regulations, which are discussed more fully in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations under the heading "Environmental Matters" on page 13. Financial Information as to Industry Segments and Geographic Areas ------------------------------------------------------------------ The Company's operations are substantially all in the chemicals industry. In- dustry segments and geographic area information for the Company's operations for the three years ended December 31, 2000, is presented in Note 16, "Operat- ing Segments and Geographical Area Information" of the notes to the consoli- dated financial statements in Item 8 on page 33. Financial Information about Foreign and Domestic Operations and Export Sales ---------------------------------------------------------------------------- Financial information about the Company's foreign and domestic operations and export sales for the three years ended December 31, 2000, is set forth in Note 16, "Operating Segments and Geographical Area Information" of the notes to the consolidated financial statements in Item 8 on page 33. Domestic export sales to non-affiliates may be made worldwide but are made primarily in the Asia Pa- cific region and Europe. Foreign unaffiliated net sales are primarily in Eu- rope, the Middle East, Japan and the Asia Pacific region. 5 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- ITEM 2. Properties ------------------ The Company's principal executive offices are located at 330 South Fourth Street, Richmond, Virginia, 23219, and its principal operations offices are lo- cated at 451 Florida Street, Baton Rouge, Louisiana, 70801. The Company leases its executive offices and operations offices in Richmond, Virginia and Baton Rouge, Louisiana, respectively; and its regional offices in Singapore; Tokyo, Japan; and Shanghai and Beijing, China; as well as various other offices. The following is a brief description of the principal plants and related fa- cilities of the Company, all of which are owned except as stated below. <TABLE> <CAPTION> Location Principal Operations -------------------------------------------------------------------------------------------------- <S> <C> Baton Rouge, Louisiana (2 facilities, one on Research and product development activities, and leased land) production of flame retardants and catalysts Louvain-la-Neuve, Belgium Regional offices and research and customer technical service activities Magnolia, Arkansas (South Plant) Production of flame retardants, bromine, several inorganic bromides, agrichemical intermediates and tertiary amines Magnolia, Arkansas (West Plant) Production of flame retardants and bromine Magnolia, Arkansas (East Plant) Production of bromine Orangeburg, South Carolina Production of flame retardants, aluminum alkyls and fine chemicals, including pharmaceutical intermediates, fuel additives, orthoalkylated phenols and polymer modifiers Pasadena, Texas Production of aluminum alkyls, alkenyl succinic anhydride, orthoalkylated anilines, zeolite A and other chemicals Port-de-Bouc, France Production of flame retardants and fuel additives Teesport, United Kingdom Production of fine chemicals, including emulsifiers, corrosion inhibitors, scale inhibitors and esters Thann, France Production of organic and inorganic brominated pharmaceutical intermediates, photographic and agrichemical intermediates, high-purity caustic potash, potassium carbonate and chlorine Ninghai County, Zhejiang Province, China (25% Production of antioxidants and polymer joint venture with Ninghai County Jinhai intermediates Chemical and Industry Company Limited) Takaishi City, Osaka, Japan (50% joint venture Production of aluminum alkyls with Mitsui Chemicals, Inc.) Feluy, Belgium (Leased by Amoco in 1996 under a Production of aluminum alkyls 99-year lease but operated for the Company) </TABLE> -------------------------------------------------------------------------------- The Company believes that its plants, including planned expansions, will be adequate at projected sales levels for 2001. Operating rates of certain plants vary with product mix and normal seasonal sales swings. The Company believes that its plants generally are well maintained and in good operating condition. Certain Agreements Between Albemarle and Ethyl ---------------------------------------------- Albemarle and Ethyl entered into agreements, dated as of February 28, 1994, pursuant to which the Company and Ethyl agreed to coordinate certain facilities and services of adjacent operating facilities at plants in Pasadena, Texas and Feluy, Belgium. Effective March 1, 1996, certain of these agreements or por- tions thereof were transferred to Amoco as part of the Olefins Business sale. In addition, Albemarle and Ethyl entered into agreements (Ethyl has extended the agreements through February 28, 2014) dated as of February 28, 1994 provid- ing for the blending by Albemarle for Ethyl of certain products and the produc- tion of others at the Company's Orangeburg, South Carolina, plant. 6 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- Certain Agreements Between Albemarle and MEMC Pasadena, Inc. ("MEMC") --------------------------------------------------------------------- Albemarle and MEMC entered into agreements, dated as of July 31, 1995, and sub- sequently revised effective May 31, 1997, pursuant to which Albemarle currently provides support services to MEMC at its Pasadena, Texas, plant which consists of facilities for the production of electronic materials products. Effective May 31, 1997, Albemarle supplies certain utilities and services to the MEMC Pasadena plant site pursuant to a utilities and services agreement (the "Utili- ties and Services Agreement"). All of the utilities and services are supplied at Albemarle's cost plus a percentage fee. Albemarle furnishes certain utili- ties and services for a minimum of five years from the effective date (May 31, 1997) of the Utilities and Services Agreement, subject to the right of MEMC to terminate any one or more utilities or services on twelve months' notice. Albemarle will make available to MEMC certain other utilities and services for the duration of MEMC's lease of the property upon which the MEMC Pasadena plant site is located. Certain Agreements Between Albemarle and Amoco ---------------------------------------------- Albemarle and Amoco entered into agreements, dated as of March 1, 1996, pursu- ant to which the Company provides operating and support services, certain util- ities and products to Amoco, and Amoco provides operating and support services, certain utilities and products to Albemarle. Pasadena, Texas Agreements -------------------------- After the Company's sale of the Olefins Business to Amoco on March 1, 1996, Amoco owns and operates the linear alpha olefins and synthetic alcohols facili- ties ("Amoco Pasadena plant"). Albemarle owns and operates all remaining Albemarle plants ("Albemarle Pasadena plant"). As a result of the sale, Albemarle supplies to Amoco certain utilities utilized by Amoco at the Amoco Pasadena plant and Amoco supplies to Albemarle certain utilities utilized by Albemarle at the Albemarle Pasadena plant. Virtually all of the utilities, services and products supplied by Albemarle to Amoco and by Amoco to Albemarle in Pasadena, Texas, are supplied at the provider's cost plus a percentage fee. Most of the utilities, services and products supplied by Albemarle to Amoco and by Amoco to Albemarle have an initial term of 10 years, with an automatic ex- tension for an additional 10-year term, unless terminated by either party at the end of the initial term upon two years notice. With respect to products supplied by Albemarle to Amoco, and conversely Amoco to Albemarle, each may terminate the supply of such product to the other on 180 days notice. Feluy, Belgium Agreements ------------------------- After the sale, Amoco possesses (under a 99-year lease, with certain purchase options) and operates the linear alpha olefins and poly alpha olefin facili- ties. In addition, Amoco possesses (under the same lease) and operates the alu- minum alkyls facilities exclusively for Albemarle (term: 10 years--Albemarle has the right to extend for one additional 10-year term). Albemarle supplies aluminum alkyl products to Amoco for use in the linear alpha olefins facility (term: 10 years--Amoco has the right to extend for one additional 10-year term). The services and products supplied by Albemarle to Amoco and by Amoco to Albemarle are at the provider's cost plus a percentage fee. ITEM 3. Legal Proceedings ------------------------- The Company and its subsidiaries are involved from time to time in legal pro- ceedings of types regarded as common in the Company's businesses, particularly administrative or judicial proceedings seeking remediation under environmental laws, such as Superfund, and products liability litigation. While it is not possible to predict or determine the outcome of the proceed- ings presently pending, in the Company's opinion they will not result ulti- mately in any liability that is likely to have a material adverse effect upon the results of operations or financial condition of the Company and its subsid- iaries on a consolidated basis. In early January 1999, the U.S. Environmental Protection Agency ("EPA"), Re- gion 6, issued an administrative complaint under section 113 of the Clean Air Act, alleging violations of EPA's rule regarding leaks and repairs of appli- ances containing hydrochlorofluorocarbons. EPA proposed a civil penalty of $162,000. Although the Company vigorously contested the complaint, it negoti- ated a settlement and paid a civil penalty of $9,000 in May, 2000. ITEM 4. Submission of Matters to a Vote of Security Holders ----------------------------------------------------------- NONE. 7 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- PART II ------- ITEM 5. Market for the Registrant's Common Equity and Related Stockholder ------------------------------------------------------------------------- Matters ------- The Company's common stock is traded on the New York Stock Exchange under the symbol ALB. The market price highs and lows (per the New York Stock Exchange) by quarters for the years 2000 and 1999 are listed below: <TABLE> <CAPTION> 2000 1999 -------------------------------------------------------------------------------------------------- Quarter High Low High Low -------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> First 21 1/8 14 9/16 25 5/16 18 7/8 Second 23 11/16 18 3/4 24 5/16 19 5/16 Third 26 1/8 18 1/2 23 1/8 16 5/8 Fourth 25 11/16 18 5/8 19 15/16 17 3/16 -------------------------------------------------------------------------------------------------- </TABLE> There were 45,823,743 shares of common stock held by 6,101 shareholders of record as of December 31, 2000. On February 23, 2000, the Company's Board of Directors increased the quar- terly dividend rate by 10%, from $.10 per share to $.11 per share, payable April 1, 2000. On October 25, 2000, the Board of Directors increased the quar- terly dividend rate an additional 18%, from $.11 per share to $.13 per share, payable January 1, 2001. During 1999, the quarterly dividend rate was $.10 per share or $.40 per share on an annual basis. The Company's Board of Directors increased the quarterly dividend rate, on November 20, 1998, by 11%, from $.09 to $.10 per share pay- able January 1, 1999. Shareholders' equity per share at December 31, 2000, was $12.20, up 15% from $10.62 at December 31, 1999. Shareholders' equity per share at December 31, 1999, of $10.62 was up 11% from $9.61 at December 31, 1998. ITEM 6. Selected Financial Data ------------------------------- The information for the five years ended December 31, 2000, is contained in the "Five-Year Summary" included in Part IV, Item 14, Exhibit 99 on page 40. ITEM 7. Management's Discussion and Analysis Of Financial Condition and Results ------------------------------------------------------------------------------- Of Operations ------------- The following financial data and discussion provides an analysis of certain significant factors affecting the results of operations of the Company for years ended December 31, 2000, 1999 and 1998. In addition, a discussion of con- solidated financial condition and sources of additional capital is included un- der a separate heading, "Financial Condition and Liquidity" on page 12. SOME OF THE INFORMATION PRESENTED IN THE FOLLOWING DISCUSSION MAY CONSTITUTE 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 BUSINESS AND OPERATIONS, THERE CAN BE NO ASSURANCE THAT ACTUAL RESULTS WILL NOT DIFFER MATERIALLY FROM ITS EXPECTATIONS. FACTORS THAT 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 MARKETS IN GENERAL, FLUCTUATIONS IN FOREIGN CURRENCIES AND SIGNIFICANT CHANGES IN NEW PRODUCT INTRODUCTIONS RESULTING IN INCREASES IN CAPITAL PROJECT REQUESTS AND APPROVALS LEADING TO ADDITIONAL CAPITAL SPENDING. 8 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- Results of Operations Net sales by operating segments for the three years ended December 31, are as follows: <TABLE> <CAPTION> (In Thousands) --------------------------------------------- Net Sales 2000 1999 1998 --------------------------------------------- <S> <C> <C> <C> Polymer Chemicals $500,899 $449,156 $417,998 Fine Chemicals 416,650 396,769 402,864 --------------------------------------------- Segment totals $917,549 $845,925 $820,862 ============================================= </TABLE> Net Sales --------- Net sales for 2000 amounted to $917.5 million, up $71.6 million (8.5%), from $845.9 million in 1999. Polymer Chemicals' net sales were up $51.7 million (11.5%), primarily due to higher shipments ($68.1 million) partially offset by lower pricing ($15.8 million) in flame retardants. Fine Chemicals' net sales were up $19.9 million (5.0%), primarily due to higher shipments ($33.5 million) partially offset by lower pricing ($13.1 million) in performance chemicals and pharmachemicals. Net sales for 1999 of $845.9 million were up $25.0 million (3.2%) from $820.9 million in 1998. Polymer Chemicals' net sales were up $31.2 million (7.4%), due to higher shipments ($55.9 million) partially offset by unfavorable pricing ($24.8 million) in flame retardants and catalysts and additives. Fine Chemi- cals' net sales were down $6.1 million (1.5%), primarily due to lower shipments ($5.0 million) and unfavorable pricing ($5.2 million) in pharmachemicals and agrichemicals partially offset by higher shipments ($16.1 million) net of unfa- vorable pricing ($12.0 million) in performance chemicals. Performance chemicals primarily benefited from higher shipments ($23.4 million) net of unfavorable pricing ($11.6 million) in bromine and derivatives and surface actives, offset, in part, by lower shipments and unfavorable pricing in potassium and chlorine chemicals ($4.2 million) and lower sales of non-manufactured products in the Asia Pacific region ($3.5 million). Operating Costs and Expenses ---------------------------- Cost of goods sold in 2000 increased $57.1 million (9.7%), from 1999, primarily due to operating costs associated with increased shipments over 1999, higher raw material and energy costs and the unfavorable effects of foreign exchange transaction losses of approximately $0.8 million in 2000 versus foreign ex- change transaction gains of approximately $6.0 million in 1999, offset, in part, by improved plant utilization in some flame retardant businesses, and lower employee-related costs in 2000 resulting from workforce reductions which occurred during 1999, with the result that the gross profit margin decreased to 29.6% in 2000 from 30.4% in 1999. Overall, Albemarle's average 2000 raw mate- rial costs were significantly higher than 1999. 2000 energy costs were signifi- cantly higher than 1999 due primarily to higher natural gas pricing. Cost of goods sold in 1999 increased $21.3 million (4.0%) from 1998, primar- ily due to operating costs associated with increased shipments over 1998, new product development costs including the startup costs incurred for our new six- sigma SAYTEX(R) CP-2000 flame retardant (tetrabromobisphenol-A) plant ("CP-2000 flame retardant") in Magnolia, Arkansas, and the write off of certain excess flame retardant plant assets ($7.7 million) offset, in part, by the favorable effects of foreign exchange transaction gains of approximately $6.0 million in 1999 versus foreign exchange transaction losses of approximately $3.0 million in 1998, with the result that the gross profit margin decreased to 30.4% in 1999 from 30.9% in 1998. Overall, Albemarle's average 1999 raw material costs were lower than 1998 but most of the favorable raw material prices were real- ized during the first half of the year when commodity markets were very low. 1999 energy costs were just above 1998 levels due primarily to higher natural gas pricing. Selling, general and administrative expenses, combined with research and de- velopment expenses ("SG&A") in 2000 decreased $2.7 million (2.0%), from 1999 due primarily to lower employee-related costs in 2000 resulting from workforce reductions which occurred during 1999 and lower outside research and develop- ment contracted services in 2000, offset, in part, by higher incentive award costs accrued in 2000 attributable to the Company's improved performance in 2000 versus 1999 and by higher consulting costs. The 2000 decrease in SG&A com- pares to an increase of $4.3 million (3.4%) in 1999 from 1998, due primarily to higher research and development core technology charges and higher consulting costs and professional fees, offset in part by lower employee related costs in 1999. As a percentage of net sales, SG&A were 14.1% in 2000 versus 15.6% in 1999 and 1998.

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- Operating Profit ---------------- Operating profit by operating segments for the three years ended December 31, are as follows: <TABLE> <CAPTION> (In Thousands) ---------------------------------------------------------- Operating Profit 2000 1999 1998 ---------------------------------------------------------- <S> <C> <C> <C> Polymer Chemicals $103,817 $ 73,083 $ 76,608 Fine Chemicals 70,736 60,187 69,619 Corporate and other expenses (24,391) (19,144) (20,512) ---------------------------------------------------------- Totals $150,162 $114,126 $125,715 ========================================================== </TABLE> The Company's operating profit in 2000, including special items consisting of a one-time $15.0 million noncash pension settlement gain ("pension settlement gain") and a 2000 workforce reduction charge of $6.9 million, increased $36.0 million (31.6%) from 1999 primarily due to higher net sales. The operating profit increase in 2000 versus 1999 was also impacted by the write off of cer- tain excess flame retardant plant assets ($7.7 million) in the 1999 period as well as the unfavorable effects of foreign exchange of $6.8 million in 2000 versus 1999. Albemarle's average 2000 raw material costs were significantly higher than 1999. 2000 energy costs were also significantly higher than 1999 due primarily to higher natural gas pricing. SG&A decreased $2.7 million (2.0%) in 2000 versus the 1999 period due primarily to lower employee related costs resulting from workforce reductions effected during 1999 and lower research and development core technology charges in 2000, offset, in part, by higher incen- tive award costs accrued in 2000 attributable to the Company's improved perfor- mance in 2000 versus 1999 and by higher consulting costs. Polymer Chemicals' operating results, including allocations of $5.5 million relating to the pension settlement gain and a $3.1 million 2000 workforce- reduction charge, increased $30.7 million (42.1%) primarily due to higher ship- ments and improved plant utilization in flame retardants and lower research and development core technology charges, offset, in part, by higher raw material and energy costs, lower sales prices ($16.8 million) and the unfavorable ef- fects of foreign exchange ($4.5 million) in 2000 versus 1999. The improvement in Polymer Chemicals' operating profit in 2000 versus 1999 was also impacted by the write off of certain excess flame retardant plant assets ($7.7 million) in the 1999 period. Fine Chemicals' operating results, including allocations of $5.7 million re- lating to the pension settlement gain and a $3.1 million 2000 workforce-reduc- tion charge, increased $10.5 million (17.5%) primarily due to higher shipments in performance chemicals and pharmachemicals and lower research and development core technology charges, offset, in part, by higher raw material and energy costs, lower sales prices ($8.4 million) and the unfavorable effects of foreign exchange ($4.2 million) in 2000 versus 1999. Corporate and other expenses increased $5.2 million in 2000 versus 1999, pri- marily due to higher incentive award costs accrued in 2000 attributable to the Company's improved performance in 2000 versus 1999, higher consulting costs, and a $.7 million workforce-reduction charge in 2000, offset, in part, by the allocation of $3.8 million related to the pension settlement gain. The Company's operating profit in 1999, including special workforce reduction charges of $10.7 million, decreased $11.6 million, or 9.2%, from 1998. Operat- ing profit also was affected by higher new product development costs including the startup costs incurred for a new CP-2000 flame retardant plant, and the write off of certain excess flame retardant plant assets ($7.7 million), off- set, in part, by the favorable effects of foreign exchange in 1999 versus 1998. Albemarle's average 1999 raw material costs were lower than 1998, but most of the favorable raw material prices were realized during the first half of the year when commodity markets were very low. 1999 energy costs were just above 1998 levels due primarily to higher natural gas pricing. SG&A increased $4.6 million (3.4%) in 1999 from 1998 due primarily to higher research and develop- ment core technology charges and higher consulting costs and professional fees, offset, in part, by lower employee related costs in 1999. Polymer Chemicals' operating results decreased $3.5 million (4.6%) due to workforce-reduction charges of $4.6 million related to the segment businesses, offset however, by the favorable effects of foreign exchange in 1999 versus the 1998 period. Polymer Chemicals' operating results also were impacted by flame retardant shipments that were up over 1998 despite pricing pressure in the business. The increased revenue in flame retardants was more than offset by higher operating costs in 1999 over 1998 due to new product development costs including the startup costs incurred for a CP-2000 flame retardant plant and the write off of certain excess flame retardant plant assets ($7.7 million). Polymer Chemicals' also were impacted by higher shipments in catalysts and ad- ditives, offset, in part, by pricing pressures in the businesses. 10 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- Fine Chemicals' operating results decreased $9.4 million (13.5%) primarily due to lower shipments and product mix in agrichemicals. Pharmachemicals (ibuprofen) and potassium and chlorine chemicals operating results were af- fected by lower shipments and lower prices, offset, in part, by higher ship- ments net of lower prices in bromine and derivatives and surface actives. Fine Chemicals operating results were also impacted due to workforce-reduction charges of $4.7 million related to the segment businesses, offset however, by the favorable effects of foreign exchange in 1999 versus the 1998 period. Corporate and other expenses decreased $1.4 million in 1999 versus 1998, pri- marily due to lower employee- related costs, offset, in part, by workforce re- duction charges of $1.4 million in 1999. (See Note 16, "Operating Segments and Geographic Area Information" of the notes to the consolidated financial state- ments in Item 8 on page 33.) Interest and Financing Expenses and Other Income ------------------------------------------------ Interest and financing expenses in 2000 decreased $2.4 million from 1999 and increased $3.9 million in 1999 from 1998 reflecting lower average debt out- standing partially offset by a higher interest rate in 2000 whereas there was higher average debt outstanding in 1999 as compared to 1998. Other income, net, increased to $3.3 million in 2000 from $.9 million in 1999, due primarily to earnings from investments (See Note 1, "Summary of Significant Accounting Poli- cies--Investments" of the notes to the consolidated financial statements in Item 8 on page 20.) Other income, net, decreased to $.9 million in 1999 from $1.6 million in 1998, due primarily to lower interest income. Gain on Sale of Investment -------------------------- In May 1999, the Company sold all of its 58,394,049 common shares of Albright & Wilson plc ("Albright & Wilson"), a United Kingdom chemicals company, that were acquired in March 1999, as part of its friendly tender offer for Albright & Wilson, to ISPG, Plc, the competing bidder, for an aggregate consideration of $157.6 million, resulting in a gain of $22.1 million ($14.4 million after in- come taxes or 30 cents per share on a diluted basis), net of transaction ex- penses. The net proceeds from the sale of the common shares were primarily used to pay down debt under the Company's existing Credit Agreement. Income Taxes ------------ Income taxes in 2000 increased $5.8 million (14.6%) compared to 1999 and in 1999 increased $1.8 million (4.8%) compared to 1998 due primarily to higher pre-tax income in both periods. The effective tax rate for 2000 was 31% which was unchanged from 1999 and 1998. See Note 12, "Income Taxes" of the notes to the consolidated financial state- ments in Item 8 on pages 30 and 31 for details of changes in effective income tax rates. 2001 Outlook ------------ We expect 2001 to be a good year for Albemarle, hopefully up from the record 2000 levels. Whether this can be realized, will become more obvious during the early part of the year, as we obtain customers' feedback on the strength of their markets and what the economy has in store for all of us. Our belief is that the second half of 2001 will be stronger than the first half, as we and the rest of industry spend the early part of the year sorting out critical is- sues around energy, raw materials, currencies and consumer expectations that drive our customers' requirements. This expectation for 2001 is pretty much the opposite of 2000, where the first half was the strongest. We expect to start out 2001 about where we ended 2000. We expect to continue to benefit from our cost reduction efforts with the savings realized through 2000 now enhanced and continuing into 2001. With some success in our pricing strategies dependent on the strength of the economy, we expect to see sales growth up in the mid-single digits in 2001. In 2000, Polymer Chemicals experienced an outstanding year. Our flame retard- ants business was especially strong through mid-December, when a combination of weather-related outages at our plant and a drop-off of orders from certain of our customers occurred. We anticipated that the unprecedented rate of growth we had over the past year was not sustainable in the long term due to the eventual slowing down of the electronics markets that use our products. We believe that growth rates in 2001 will revert to something closer to the flame retardant in- dustry historic growth rates of 7-8%. We will continue our effort to find prod- uct line extensions, particularly those in non-halogen flame retardants. Our catalysts and additives businesses were negatively impacted in late 2000 by a slowing polyolefins market as well as some key customer plant disruptions. Re- sumption of strength in these end markets is not expected until the second half of 2001. The single site catalyst business opportunity that we and our polymer customers are still very optimistic about, represents an upside potential as we move into 2001 and beyond. 11 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- Fine Chemicals ended year 2000 with a good head of steam. Going into the first quarter of 2001, we have a strong backlog of orders in pharmachemicals, oil field chemicals, and agrichemicals. We expect to see lower zeolite sales in 2001 from the continuing replacement in the marketplace of powdered detergents that use our zeolite products by detergent liquids and from the entry of a new zeolite competitor in North America. Looking at our existing Fine Chemical businesses, we believe we can hold our organic sales for the year steady around the $400 million level, with growth from our new products in performance chemi- cals as well as our continued expansion in agrichemicals and pharmachemicals we can offset the effect of the shift in our zeolite business. In addition, we hope for the potential of sales growth from acquisitions, if and as they occur. Financial Condition and Liquidity --------------------------------- Cash and cash equivalents at December 31, 2000 were $19.3 million, which repre- sents a decrease of $29.3 million from $48.6 million at year-end 1999. Cash provided from operating activities was $155.1 million which together with $29.3 million of existing cash and equivalents and $19.8 million of pro- ceeds from borrowings were used to cover operating activities in 2000, includ- ing an increase in working capital of $7.7 million (excluding foreign currency translation), repay $79.5 million of long-term debt, fund capital expenditures, acquire the Ferro Corporation's PYRO-CHEK(R) Flame Retardant business, pay quarterly dividends to common shareholders and purchase 574,091 shares of the Company's common stock for $9.8 million. Cash and cash equivalents at December 31, 1999 were $48.6 million, which rep- resents an increase of $27.4 million from $21.2 million at year-end 1998. Cash provided from operating activities was $164.3 million, which together with $157.5 million of proceeds from the sale of an investment in Albright & Wilson stock and $135.1 million of proceeds from borrowings were primarily used to cover operating activities in 1999, [net of a decrease in working capital excluding foreign currency translation of $25.2 million (mainly increased ac- counts payable and lower inventories)], repay $169.8 million of long-term debt, purchase 58,394,049 shares of Albright & Wilson common stock totaling $135.5 million, fund capital expenditures, pay quarterly dividends to common share- holders and purchase 857,400 shares of the Company's common stock for $15.5 million. The Company anticipates that cash provided from operating activities in the future will be sufficient to cover its operating expenses, debt service obliga- tions, dividend payments to common shareholders and to fund its capital expen- ditures. The noncurrent portion of the Company's long-term debt amounted to $97.7 mil- lion at December 31, 2000, compared to $159.0 million at the end of 1999. The Company's total long-term debt, including the current portion, as a percentage of total capitalization at December 31, 2000, was approximately 14.9%. (See Note 8, "Long-Term Debt" of the notes to the consolidated financial statements in Item 8 on pages 24 and 25 for details of the Company's long-term borrowings.) The Company, at December 31, 2000, had the flexibility to borrow up to a to- tal of $500 million ($55 million outstanding at December 31, 2000) under its Competitive Advance and Revolving Credit Facility Agreement ("Credit Agree- ment"). The Credit Agreement contains certain covenants typical for a credit agree- ment of its size and nature, including financial covenants requiring the Com- pany to maintain consolidated indebtedness (as defined) of not more than 60% of the sum of the Company's consolidated shareholders' equity (as defined) and consolidated indebtedness. The amount and timing of any borrowings will depend on the Company's specific cash requirements. The Company's foreign currency translation adjustments, net of related de- ferred taxes, included in accumulated other comprehensive (loss) income in the consolidated statement of changes in shareholders' equity on page 26 at Decem- ber 31, 2000, increased from December 31, 1999, primarily due to the weakening of foreign currencies against the U.S. dollar. Capital expenditures in 2000 of $52.2 million were lower than the 1999 level of $77.6 million. The Company's capital spending program is expected to be in the $60-$70 million range over the next few years, with expenditures expected to expand capacities at existing facilities to support an expected increase in sales. Capital spending for environmental and safety projects is expected to be less than the current year. Future capital spending is expected to be financed primarily with cash provided from operating activities, with the balance, if necessary, provided by additional long-term debt. The Company continues to evaluate potential acquisitions of facilities and/or businesses, particularly in areas where our know-how adds value. 12 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- Environmental Matters --------------------- The Company is subject to federal, state, local and foreign requirements regu- lating the handling, manufacture and use of materials (some of which may be classified as hazardous or toxic by one or more regulatory agencies), the dis- charge of materials into the environment and the protection of the environment. To the Company's knowledge, it is currently complying with and expects to con- tinue to comply in all material respects with existing environmental laws, reg- ulations, statutes and ordinances. Such compliance with federal, state, local and foreign environmental protection laws is not expected to have in the future amaterial effect on earnings or the competitive position of Albemarle. Among other environmental requirements, the Company is subject to the federal Superfund law, and similar state laws, under which the Company may be desig- nated as a potentially responsible party ("PRP") and may be liable for a share of the costs associated with cleaning up various hazardous waste sites. Manage- ment believes that in most cases, the Company's participation is de minimis. Further, almost all such sites represent environmental issues that are quite mature and have been investigated, studied and in many cases settled by the Company or its predecessor company. In de minimis PRP matters, the Company's policy generally is to negotiate a consent decree and to pay any apportioned settlement, enabling the Company to be effectively relieved of any further lia- bility as a PRP, except for remote contingencies. In other than de minimis PRP matters, the Company's records indicate that unresolved exposures should be im- material. The Company accrues and expenses its proportionate share of PRP costs. Because management has been actively involved in evaluating environmen- tal matters, the Company is able to conclude that the outstanding environmental liabilities for unresolved PRP sites should not be material to operations. The Company's environmental and safety operating costs charged to expense were approximately $12.2 million in 2000 versus approximately $13.6 million in 1999 and $14.6 million in 1998, excluding depreciation of previous capital ex- penditures, and are expected to be in the same range in the next few years. Costs for remediation have been accrued and payments related to sites are charged against accrued liabilities, which at December 31, 2000, totaled ap- proximately $11.5 million. There is a reasonable possibility that future remediation costs in excess of amounts already recorded could be up to $10.6 million before income taxes. However, the Company believes that most of the amount it may be required to pay in connection with environmental remediation matters in excess of the amounts recorded should occur over a period of time and should not have a material adverse impact on its financial condition or re- sults of operations, but could have a material adverse impact in a particular quarterly reporting period. Capital expenditures for pollution-abatement and safety projects for the Com- pany, including such costs that are included in other projects, were approxi- mately $4.2 million, $4.0 million and $8.5 million in 2000, 1999 and 1998, re- spectively. For each of the next few years, capital expenditures for these types of projects are likely to be less than the current year expenditures. Management's estimates of the effects of compliance with governmental pollu- tion-abatement and safety regulations are subject to (i) the possibility of changes in the applicable statutes and regulations or in judicial or adminis- trative construction of such statutes and regulations, and (ii) uncertainty as to whether anticipated solutions to pollution problems will be successful, or whether additional expenditures may prove necessary. New Accounting Pronouncements ----------------------------- In December 1999 the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 101--"Revenue Recognition in the Financial Statements" ("SAB 101"). SAB 101 provides guidance for revenue recognition issues, several of which are common within the industry. The Company adopted the guidance pro- vided in SAB 101 which did not have a material effect on the financial position or results of operations in 2000. In June 2000, the FASB issued SFAS No. 138, "Accounting for Derivative In- struments and Hedging Activities--an amendment of FASB No. 133", which estab- lished accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging ac- tivities. It requires that an entity recognize all derivatives as assets or li- abilities in the statement of financial position and measure those instruments at fair value. On January 1, 2001, the Company adopted SFAS No. 133. The Company's transition adjustment and related cumulative effect of a change in accounting principle relating to the adoption of SFAS No. 133 will not have a material effect on the financial position or results of operations in 2001. In connection with the adoption of SFAS No. 133, the Company elected not to uti- lize hedge accounting. Consequently, changes in the fair value of derivatives will be recognized in the Company's statement of operations. 13 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk ------------------------------------------------------------------- In the normal course of operations, the Company is exposed to changes in finan- cial market conditions due to the denomination of its business transactions in diverse foreign currencies and the Company's ongoing manufacturing and funding activities. As a result, future earnings, cash flows and fair values of assets and liabilities are subject to uncertainty. The Company has established poli- cies, procedures and internal processes governing its management of uncertain market conditions, and uses both operational and financial market actions in its risk management activities, which include the use of derivative instru- ments. The Company does not use derivative instruments for trading purposes. The Company only enters into derivative contracts based on economic analysis of underlying exposures anticipating that adverse impacts on future earnings, cash flows and fair values due to fluctuations in foreign currency exchange rates will be offset by the proceeds from and changes in fair value of the derivative instruments. The Company does not hedge its exposure to market risks in a man- ner that completely eliminates the effects of changing market conditions on earnings, cash flows and fair values. Short-term exposures to changing foreign currency exchange rates are primar- ily due to operating cash flows denominated in foreign currencies. The Company covers certain known and anticipated operating exposures by using forward con- tracts. The primary currencies for which the Company has foreign currency exchange rate exposure are the euro and the currencies of countries included in the Eu- ropean Monetary Union, Japanese yen, British pound sterling and the U.S. dollar (in certain of its foreign locations). In response to the greater fluctuations in foreign currency exchange rates in recent periods, the Company has increased the degree of risk management activities to minimize their impact on earnings of future periods. The Company's financial instruments, subject to foreign currency exchange risk, consist of foreign currency forward contracts and represented a net lia- bility position of $0.1 million at December 31, 2000. The Company conducted a sensitivity analysis on the fair value of its foreign currency hedge portfolio assuming instantaneous 10% changes in foreign currency exchange rates from their levels as of December 31, 2000, with all other variables held constant. A 10% appreciation of the U.S. dollar against foreign currencies would result in an increase of $0.3 million in the fair value of foreign currency exchange hedging contracts. A 10% depreciation of the U.S. Dollar against foreign cur- rencies would result in a decrease of $0.3 million in the fair value of foreign currency exchange hedging contracts. The sensitivity in fair value of the foreign currency hedge portfolio repre- sents changes in fair values estimated based on market conditions as of Decem- ber 31, 2000, without reflecting the effects of underlying anticipated transac- tions. When those anticipated transactions are realized, actual effects of changing foreign currency exchange rates could have a material impact on earnings and cash flows in future periods. 14 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries ITEM 8. Financial Statements and Supplementary Data CONSOLIDATED BALANCE SHEETS -------------------------------------------------------------------------------- <TABLE> <CAPTION> (In Thousands of Dollars Except Share Data) ----------------------------------------------------------------------------- December 31 2000 1999 ----------------------------------------------------------------------------- <S> <C> <C> Assets Current assets: Cash and cash equivalents $ 19,300 $ 48,621 Accounts receivable, less allowance for doubtful accounts (2000-$2,119; 1999-$2,609) 174,297 155,140 Inventories: Finished goods 79,143 82,415 Raw materials 10,804 10,889 Stores, supplies and other 17,471 17,512 ---------- ---------- 107,418 110,816 Deferred income taxes and prepaid expenses 14,139 18,022 ----------------------------------------------------------------------------- Total current assets 315,154 332,599 ----------------------------------------------------------------------------- Property, plant and equipment, at cost 1,326,534 1,287,507 Less accumulated depreciation and amortization 836,460 792,122 ----------------------------------------------------------------------------- Net property, plant and equipment 490,074 495,385 ----------------------------------------------------------------------------- Prepaid pension assets 111,537 83,111 Other assets and deferred charges 42,583 25,102 Goodwill and other intangibles net of amortization 22,455 17,897 ----------------------------------------------------------------------------- Total assets $ 981,803 $ 954,094 ============================================================================= Liabilities And Shareholders' Equity Current liabilities: Accounts payable $ 72,296 $ 61,386 Long-term debt, current portion 299 779 Accrued expenses 56,932 50,505 Dividends payable 5,956 4,635 Income taxes payable 6,633 14,048 ----------------------------------------------------------------------------- Total current liabilities 142,116 131,353 ----------------------------------------------------------------------------- Long-term debt 97,681 158,981 Other noncurrent liabilities 83,496 81,185 Deferred income taxes 99,603 92,011 Shareholders' equity: Common stock, $.01 par value (authorized 150,000,000 shares) issued and outstanding--45,823,743 in 2000 and 46,199,639 in 1999 458 462 Additional paid-in capital 57,223 63,904 Accumulated other comprehensive loss (14,688) (9,013) Retained earnings 515,914 435,211 ----------------------------------------------------------------------------- Total shareholders' equity 558,907 490,564 ----------------------------------------------------------------------------- Total liabilities and shareholders' equity $ 981,803 $ 954,094 </TABLE> ================================================================================ See accompanying notes to the consolidated financial statements. 15 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME -------------------------------------------------------------------------------- <TABLE> <CAPTION> (In Thousands Except Per-Share Amounts) ------------------------------------------------------------------------------ Years Ended December 31 2000 1999 1998 ------------------------------------------------------------------------------ <S> <C> <C> <C> Net sales $917,549 $845,925 $820,862 Cost of goods sold 646,086 588,983 567,350 ------------------------------------------------------------------------------ Gross profit 271,463 256,942 253,512 Special items (8,134) 10,692 -- Selling, general and administrative expenses 103,234 97,836 98,142 Research and development expenses 26,201 34,288 29,655 ------------------------------------------------------------------------------ Operating profit 150,162 114,126 125,715 Interest and financing expenses (5,998) (8,379) (4,487) Gain on sale of investment in Albright & Wilson stock, net -- 22,054 -- Other income, net 3,337 937 1,570 ------------------------------------------------------------------------------ Income before income taxes 147,501 128,738 122,798 Income taxes 45,725 39,909 38,066 ------------------------------------------------------------------------------ Net income $101,776 $ 88,829 $ 84,732 ============================================================================== Basic earnings per share $ 2.22 $ 1.89 $ 1.64 Shares used to compute basic earnings per share 45,882 46,889 51,558 ============================================================================== Diluted earnings per share $ 2.18 $ 1.87 $ 1.63 Shares used to compute diluted earnings per share 46,606 47,513 52,136 ============================================================================== Cash dividends declared per share of common stock $ .46 $ .40 $ .37 </TABLE> ================================================================================ See accompanying notes to the consolidated financial statements. 16 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY -------------------------------------------------------------------------------- <TABLE> <CAPTION> (In Thousands of Dollars Except Share Data) ------------------------------------------------------------------------------------------------------------- Accumulated Other Total Common Stock Additional Comprehensive Share- ------------------- Paid-in (Loss) Retained holders' Shares Amounts Capital Income Earnings Equity ------------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> <C> Balance at January 1, 1998 53,886,802 $539 $218,841 $ (1,445) $299,401 $517,336 ------------------------------------------------------------------------------------------------------------- Comprehensive income: Net income for 1998 84,732 84,732 Foreign currency translation (net of deferred taxes of $5,380) 8,805 8,805 -------- Total comprehensive income 93,537 Cash dividends declared for 1998 (19,020) (19,020) Exercise of stock options 34,222 419 419 Shares purchased and retired (6,912,741) (69) (140,536) (140,605) ------------------------------------------------------------------------------------------------------------- Balance at December 31, 1998 47,008,283 470 78,724 7,360 365,113 451,667 ------------------------------------------------------------------------------------------------------------- Comprehensive income: Net income for 1999 88,829 88,829 Foreign currency translation (net of deferred tax benefit of $9,735) (16,555) (16,555) Other (net of deferred taxes of $104) 182 182 -------- Total comprehensive income 72,456 Cash dividends declared for 1999 (18,731) (18,731) Exercise of stock options and SARs 48,756 646 646 Shares purchased and retired (857,400) (8) (15,466) (15,474) ------------------------------------------------------------------------------------------------------------- Balance at December 31, 1999 46,199,639 462 63,904 (9,013) 435,211 490,564 ------------------------------------------------------------------------------------------------------------- Comprehensive income: Net income for 2000 101,776 101,776 Foreign currency translation (net of deferred tax benefit of $3,803) (6,680) (6,680) Other (net of deferred taxes of $573) 1,005 1,005 -------- Total comprehensive income 96,101 Cash dividends declared for 2000 (21,073) (21,073) Exercise of stock options and SARs 132,045 1 2,060 2,061 Shares purchased and retired (574,091) (5) (9,793) (9,798) Issuance of restricted stock 66,150 1,052 1,052 ------------------------------------------------------------------------------------------------------------- Balance at December 31, 2000 45,823,743 $458 $ 57,223 $(14,688) $515,914 $558,907 </TABLE> ================================================================================ See accompanying notes to the consolidated financial statements. 17 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS -------------------------------------------------------------------------------- <TABLE> <CAPTION> (In Thousands of Dollars) --------------------------------------------------------------------------------- Years Ended December 31 2000 1999 1998 --------------------------------------------------------------------------------- <S> <C> <C> <C> Cash and cash equivalents at beginning of year $ 48,621 $ 21,180 $ 34,322 --------------------------------------------------------------------------------- Cash flows from operating activities: Net income 101,776 88,829 84,732 Adjustments to reconcile net income to cash flows from operating activities: Depreciation and amortization 73,750 75,750 75,012 Noncash pension settlement gain (14,990) -- -- Deferred income taxes 13,405 (2,887) 7,730 Gain on sale of investment in Albright & Wilson stock, net -- (22,054) -- Write off of plant facilities -- 7,706 -- Increase in prepaid pension assets (13,436) (9,714) (12,044) Change in assets and liabilities, net of effects of the purchase of businesses: (Increase) decrease in accounts receivable (22,759) (10,775) 14,528 Decrease (increase) in inventories 3,423 12,548 (31,557) Increase (decrease) in accounts payable 11,215 18,503 (7,008) Increase in accrued expenses and income taxes 445 4,963 399 Other, net 2,238 1,428 6,062 --------------------------------------------------------------------------------- Net cash provided from operating activities 155,067 164,297 137,854 --------------------------------------------------------------------------------- Cash flows from investing activities: Capital expenditures (52,248) (77,569) (76,747) Acquisition of businesses (35,006) -- (15,229) Investments in joint ventures and nonmarketable securities (10,733) (7,791) -- Cost of securities available for sale -- (135,462) -- Proceeds from sale of securities available for sale -- 157,516 -- Other, net 800 (2,562) 2,213 --------------------------------------------------------------------------------- Net cash used in investing activities (97,187) (65,868) (89,763) --------------------------------------------------------------------------------- Cash flows from financing activities: Repayments of long-term debt (79,492) (169,758) (11,652) Dividends paid (19,752) (18,797) (19,271) Purchases of common stock (9,798) (15,474) (140,605) Proceeds from borrowings 19,786 135,060 110,516 Proceeds from exercise of stock options 1,313 646 419 --------------------------------------------------------------------------------- Net cash used in financing activities (87,943) (68,323) (60,593) --------------------------------------------------------------------------------- Net effect of foreign exchange on cash and cash equivalents 742 (2,665) (640) --------------------------------------------------------------------------------- (Decrease) increase in cash and cash equivalents (29,321) 27,441 (13,142) --------------------------------------------------------------------------------- Cash and cash equivalents at end of year $ 19,300 $ 48,621 $ 21,180 </TABLE> ================================================================================ See accompanying notes to the consolidated financial statements. 18 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) NOTE 1--Summary of Significant Accounting Policies: --------------------------------------------------- Basis of Presentation --------------------- The consolidated financial statements include the accounts and operations of Albemarle Corporation and all of its wholly-owned subsidiaries ("the Company" or "Albemarle"). The Company consolidates all majority-owned and controlled subsidiaries and applies the equity method of accounting for investments be- tween 20% and 50%. All significant intercompany accounts and transactions are eliminated in consolidation. Estimates and Reclassifications ------------------------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent assets and liabilities at the date of the finan- cial statements. Actual results could differ from those estimates. Certain amounts in the accompanying consolidated financial statements and notes thereto have been reclassified to conform to the current presentation. Revenue Recognition ------------------- Sales revenue is recognized when (1) ownership and all rewards and risks of loss have been transferred to the buyer, (2) the price is fixed and determin- able and (3) collectibility is reasonably assured. Revenue from services is recognized when costs of providing services are incurred. Cash and Cash Equivalents ------------------------- Cash and cash equivalents in the accompanying consolidated financial statements consist of cash and time deposits of the Company. Time deposits of 90 days or less are stated at cost, which approximates market value. Inventories ----------- Inventories are stated at the lower of cost or market, with cost determined on the last-in, first-out ("LIFO") basis for substantially all domestic invento- ries except stores and supplies, and on either the weighted-average or first- in, first-out cost basis for other inventories. Cost elements included in fin- ished goods inventories are raw materials, direct labor and manufacturing over- head. Raw materials include purchase and delivery costs. Stores and supplies include purchase costs. Property, Plant and Equipment ----------------------------- Accounts include costs of assets constructed or purchased, related delivery and installation costs and interest incurred on significant capital projects during their construction periods. Expenditures for renewals and betterments also are capitalized, but expenditures for repairs and maintenance are expensed as in- curred. The cost and accumulated depreciation applicable to assets retired or sold are removed from the respective accounts, and gains or losses thereon are included in income. Depreciation is computed primarily by the straight-line method based on the estimated useful lives of the assets. The Company evaluates historical and expected undiscounted operating cash flows of the related business units or fair value of property, plant and equip- ment to determine the future recoverability of any property, plant and equip- ment recorded. For purposes of determining these evaluations, undiscounted cash flows are grouped at levels which management uses to operate the business, which in some cases include businesses on a worldwide basis. Recorded property, plant and equipment is reevaluated on the same basis at the end of each ac- counting period whenever any significant permanent changes in business or cir- cumstances have occurred which might impair recovery. During 1999, the Company recorded asset write-downs of approximately $7,706 in connection with its ongoing review of its Polymer Chemicals operating seg- ment. These charges were recorded as a component of cost of goods sold in the Company's statement of operations and are described in detail as follows. Dur- ing the fourth quarter of 1999, $2,925 of deferred engineering costs, incurred in connection with the planned construction of a flame-retardant plant, were written off. The write-off was required when it was decided not to proceed with the proposed plant. The assets were written-off as the fair value of these as- sets were deemed to be zero. During the third quarter of 1999, the remaining net book value of certain flame retardant production assets, totaling $2,381, were taken out of service and written off due to the earlier than anticipated start-up of new replacement production assets. During the second quarter of 1999, the remaining net book value of certain flame retardant production as- sets, totaling $2,400, were idled and written off due to changes in customer demand for the flame-retardant product and a determination that the assets had a fair value of zero. The costs of brine wells, leases and royalty interests are primarily amor- tized over the estimated average life of the well. On a yearly basis for all wells, this approximates a unit-of-production method based upon estimated re- serves and production volumes. 19 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) Investments ----------- The Company's investments in joint ventures and nonmarketable securities amounted to $26,416 and $14,396 at December 31, 2000 and 1999, respectively. At December 31, 2000, the Company's equity interest in 7 joint ventures and 5 nonmarketable securities amounted to $18,101 and $8,315, respectively. The Company's investment in any single investee is less than $6,000 and is ac- counted for under the equity method. The Company's share of the investee's earnings (losses) included in the consolidated statement of operations as a component of other income, net totaled $1,339, ($1,017) and ($449) for the years ended December 31, 2000, 1999 and 1998, respectively. Investments in marketable securities at December 31, 2000 and 1999, are ac- counted for as available-for-sale securities, with changes in fair value in- cluded in "accumulated other comprehensive (loss) income" in the shareholders' equity section of the consolidated balance sheets. The aggregate fair value of these investments totaled $4,200 and $387 at December 31, 2000 and 1999, re- spectively. Net unrealized gains totaled $1,005 and $182 at December 31, 2000 and 1999, respectively. These investments are included in the balance sheet under the caption "Other assets and deferred charges". Environmental Compliance and Remediation ---------------------------------------- Environmental compliance costs include the cost of purchasing and/or construct- ing assets to prevent, limit and/or control pollution or to monitor the envi- ronmental status at various locations. These costs are capitalized and depreci- ated based on estimated useful lives. Environmental compliance costs also include maintenance and operating costs with respect to pollution prevention and control facilities and other adminis- trative costs. Such operating costs are expensed as incurred. Environmental remediation costs of facilities used in current operations are generally immaterial and are expensed as incurred. Remediation costs and post-remediation costs at facilities or off-plant dis- posal sites that relate to an existing condition caused by past operations are accrued as liabilities and expensed when such costs are reasonably estimated. The Company accrues for environmental remediation costs and post-remediation costs on an undiscounted basis at facilities or off-plant disposal sites that relate to existing conditions caused by past operations in the accounting pe- riod in which responsibility is established and when the related costs are es- timable. In developing these cost estimates, evaluation is given to currently available facts regarding each site, with consideration given to existing tech- nology, presently enacted laws and regulations, prior experience in remediation of contaminated sites, the financial capability of other potentially responsi- ble parties and other factors, subject to uncertainties inherent in the estima- tion process. Additionally, these estimates are reviewed periodically, with ad- justments to the accruals recorded as necessary. Goodwill and Other Intangibles ------------------------------ Goodwill and other intangibles consist principally of goodwill, product li- censes and patents. Goodwill amounted to $21,485 and $15,548 at December 31, 2000 and 1999, respectively, net of accumulated amortization and effects of foreign currency translation adjustments. Goodwill is being amortized on a straight-line basis over periods of 16 to 20 years. Intangible assets ($970 and $2,349 at December 31, 2000 and 1999, respectively, net of accumulated amorti- zation and effects of foreign currency translation adjustments) are amortized on a straight-line basis over periods from three to 17 years. Amortization of goodwill and other intangibles amounted to $2,694, $2,091 and $2,097 for 2000, 1999 and 1998, respectively. Accumulated amortization of goodwill and other intangibles was $19,580 and $16,886 at the end of 2000 and 1999, respectively. The Company evaluates his- torical and expected undiscounted operating cash flows of the related business units to determine the future recoverability of any goodwill recorded. For pur- poses of determining these evaluations, undiscounted cash flows are grouped at levels which management uses to operate the business, which in some cases in- clude businesses on a worldwide basis. Recorded goodwill is reevaluated on the same basis at the end of each accounting period whenever any significant, per- manent changes in business or circumstances have occurred which might impair recovery. 20 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) Research and Development Expenses --------------------------------- The Company-sponsored research and development expenses related to present and future products are expensed currently as incurred. Pension Plans and Other Postretirement Benefits ----------------------------------------------- Annual costs of pension plans are determined actuarially based on Financial Ac- counting Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 87, "Employers' Accounting for Pensions" ("SFAS No. 87"). The Company's policy is to fund U.S. pension plans at amounts not less than the minimum requirements of the Employee Retirement Income Security Act of 1974 and generally for obligations under its foreign plans to deposit funds with trust- ees and/or under insurance policies. Annual costs of other postretirement plans are accounted for based on SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions." The policy of the Company is to fund post- retirement health benefits for retirees on a pay-as-you-go basis. Employee Savings Plan --------------------- Certain Company employees participate in the Albemarle-defined contribution 401(k) employee savings plan which is generally available to all U.S. full-time salaried and non-union hourly employees and to employees who are covered by a collective bargaining agreement which included such participation. The plan is funded with contributions by participants and the Company. The Company's contributions to the 401(k) approximated $4,860, $5,090 and $5,100 in 2000, 1999 and 1998, respectively. Income Taxes ------------ The Company and its subsidiaries file consolidated U.S. Federal income tax re- turns and individual foreign income tax returns. Deferred income taxes result from temporary differences in the recognition of income and expenses for financial and income tax reporting purposes, using the liability or balance sheet method. Such temporary differences result primarily from differences between the financial statement carrying amounts and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. It is the Company's policy to record deferred income taxes on any undistributed earnings of foreign subsidi- aries that are not deemed to be, or are not intended to be, permanently rein- vested in those subsidiaries. In connection with the spin-off of Ethyl Corporation's ("Ethyl") olefins and derivatives, bromine chemicals, and specialty chemicals businesses ("the prede- cessor businesses") into Albemarle Corporation in 1994, the Company and Ethyl entered into a tax sharing agreement whereby Ethyl agreed to indemnify and hold harmless the Company against all taxes attributable to the predecessor busi- nesses prior to the spin-off, with the exception of certain of the Company's subsidiaries which remained responsible for their taxes. Accumulated Other Comprehensive (Loss) Income --------------------------------------------- SFAS No. 130 "Reporting Comprehensive Income," established rules for the re- porting of comprehensive income. Comprehensive income is defined as net income and other comprehensive income and is displayed in the shareholders' equity section of the consolidated balance sheets. The primary component of other com- prehensive income is the foreign currency translation adjustments of ($10,483), ($26,290) and $14,185 in 2000, 1999 and 1998, respectively, net of deferred in- come (tax benefits) taxes. Foreign Currency Translation ---------------------------- The assets and liabilities of all foreign subsidiaries were prepared in their respective local currencies and translated into U.S. dollars based on the cur- rent exchange rate in effect at the balance sheet dates, while income and ex- penses were translated at average rates for the periods presented. Translation adjustments have no effect on net income. Transaction adjustments are included in cost of goods sold. Foreign currency transaction adjustments resulted in (losses) gains of ($798), $6,034 and ($3,023) in 2000, 1999 and 1998, respec- tively. Foreign currency transaction gains and losses herein are net of the foreign exchange gains and losses from financial instruments activity below. 21 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) Financial Instruments --------------------- The Company manages its foreign currency exposures by maintaining certain as- sets and liabilities in approximate balance and through the use of foreign ex- change contracts. The principal objective of such contracts is to minimize the risks and/or costs associated with global operating activities. The Company does not utilize financial instruments for trading or other speculative purpos- es. The counterparties to these contractual agreements are major financial in- stitutions with which the Company generally also has other financial relation- ships. The Company is exposed to credit loss in the event of nonperformance by these counterparties. However, the Company does not anticipate nonperformance by the other parties, and no material loss would be expected from their nonper- formance. The Company enters into forward currency exchange contracts, which typically expire within one year, in the regular course of business to assist in managing its exposure against foreign currency fluctuations on sales and intercompany transactions. While these hedging contracts are subject to fluctuations in value, such fluctuations are generally offset by the value of the underlying foreign cur- rency exposures being hedged. Gains and losses on forward contracts are recog- nized currently in income. The Company had outstanding forward exchange con- tracts at December 31, 2000, hedging Belgian francs receivables with a notional value totaling $2,691. The Company had outstanding forward exchange contracts at December 31, 1999, hedging Japanese yen receivables with a notional value totaling $10,623. For the years ended December 31, 2000, 1999 and 1998, the Company recognized gains (losses) of $447, ($1,001) and ($876), respectively, in income before income taxes on its forward exchange contracts. Stock-Based Compensation ------------------------ SFAS No. 123, "Accounting for Stock-Based Compensation," ("SFAS No. 123") en- courages, but does not require, companies to record at fair value, compensation cost for stock-based employee compensation plans. The Company has chosen to continue to account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," ("APB Opinion No. 25") and related interpreta- tions (See Note 9, "Capital Stock"). Under the intrinsic method, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Company's stock at the date of the grant over the amount an em- ployee must pay to acquire the stock. New Accounting Pronouncements ----------------------------- In December 1999 the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 101--"Revenue Recognition in the Financial Statements" ("SAB 101"). SAB 101 provides guidance for revenue recognition issues, several of which are common within the industry. The Company adopted the guidance pro- vided in SAB 101 which did not have a material effect on the financial position or results of operations in 2000. In June 2000, the FASB issued SFAS No. 138, "Accounting for Derivative In- struments and Hedging Activities--an amendment of FASB No. 133", which established accounting and reporting standards for derivative instruments, in- cluding certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as as- sets or liabilities in the statement of financial position and measure those instruments at fair value. On January 1, 2001, the Company adopted SFAS No. 133. The Company's transition adjustment and related cumulative effect of a change in accounting principle relating to the adoption of SFAS No. 133 will not have a material effect on the financial position or results of operations in 2001. In connection with the adoption of SFAS No. 133, the Company elected not to utilize hedge accounting. Consequently, changes in the fair value of de- rivatives will be recognized in the Company's statement of operations. NOTE 2--Supplemental Cash Flow Information: ------------------------------------------ Supplemental information for the consolidated statements of cash flows is as follows: <TABLE> <CAPTION> 2000 1999 1998 ---------------------------------------------------------------- <S> <C> <C> <C> Cash paid during the year for: Income taxes $35,670 $31,285 $37,650 Interest and financing expenses (net of capitalization) 5,944 8,236 4,492 ================================================================ </TABLE> 22 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) NOTE 3--Earnings Per Share: --------------------------- Basic and diluted earnings per share are calculated as follows: <TABLE> <CAPTION> 2000 1999 1998 ------------------------------------------------------------------------------ <S> <C> <C> <C> Basic earnings per share Numerator: Income available to stockholders, as reported $101,776 $88,829 $84,732 ------------------------------------------------------------------------------ Denominator: Average number of shares of common stock outstanding 45,882 46,889 51,558 ------------------------------------------------------------------------------ Basic earnings per share $ 2.22 $ 1.89 $ 1.64 ============================================================================== Diluted earnings per share Numerator: Income available to stockholders, as reported $101,776 $88,829 $84,732 ------------------------------------------------------------------------------ Denominator: Average number of shares of common stock outstanding 45,882 46,889 51,558 Shares issuable upon exercise of stock options 724 624 578 ------------------------------------------------------------------------------ Total shares 46,606 47,513 52,136 ------------------------------------------------------------------------------ Diluted earnings per share $ 2.18 $ 1.87 $ 1.63 ============================================================================== </TABLE> NOTE 4--Inventories: -------------------- Domestic inventories stated on the LIFO basis amounted to $64,068 and $53,145 at December 31, 2000 and 1999, respectively, which are below replacement cost by approximately $26,395 and $32,663, respectively. In 1999, the Company's do- mestic inventory declined resulting in the liquidation of a portion of 1998's LIFO layer which resulted in a reduction in earnings before income taxes of $639. NOTE 5--Deferred Income Taxes and Prepaid Expenses: --------------------------------------------------- Deferred income taxes and prepaid expenses consist of the following: <TABLE> <CAPTION> 2000 1999 ----------------------------------------------- <S> <C> <C> Deferred income taxes--current $10,410 $14,547 Prepaid expenses 3,729 3,475 ----------------------------------------------- Total $14,139 $18,022 =============================================== </TABLE> NOTE 6--Property, Plant and Equipment: -------------------------------------- Property, plant and equipment, at cost, consists of the following: <TABLE> <CAPTION> 2000 1999 ----------------------------------------------- <S> <C> <C> Land $ 19,063 $ 18,913 Land improvements 30,376 31,367 Buildings 87,133 89,469 Machinery and equipment 1,168,599 1,116,626 Construction in progress 21,363 31,132 ----------------------------------------------- Total $1,326,534 $1,287,507 =============================================== </TABLE> The cost of property, plant and equipment is depreciated, generally by the straight-line method, over the following useful lives: land improvements--5 to 30 years; buildings--10 to 40 years; and machinery and equipment--3 to 25 years. Interest capitalized on significant capital projects in 2000, 1999 and 1998 was $1,192, $1,978 and $1,598, respectively, while amortization of capitalized interest (which is included in depreciation expense) in 2000, 1999 and 1998 was $1,495, $1,440 and $1,460, respectively. NOTE 7--Accrued Expenses: ------------------------- Accrued expenses consist of the following: <TABLE> <CAPTION> 2000 1999 ------------------------------------------------------------- <S> <C> <C> Employee benefits, payroll and related taxes $31,010 $24,548 Taxes other than income and payroll 7,426 6,298 Other 18,496 19,659 ------------------------------------------------------------- Total $56,932 $50,505 ============================================================= </TABLE> 23 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) NOTE 8--Long-Term Debt: ----------------------- Long-term debt consists of the following: <TABLE> <CAPTION> 2000 1999 -------------------------------------------------- <S> <C> <C> Variable-rate bank loans $70,000 $128,700 Industrial revenue bonds 11,000 11,000 Foreign borrowings 15,916 18,966 Miscellaneous 1,064 1,094 -------------------------------------------------- Total 97,980 159,760 Less amounts due within one year 299 779 -------------------------------------------------- Long-term debt $97,681 $158,981 ================================================== </TABLE> Maturities of long-term debt are as follows: 2001--$299; 2002--$85,313; 2003--$308; 2004--$151; 2005--$47 and 2006 through 2021--$11,862. The Company has a five-year, $500,000 unsecured Competitive Advance and Re- volving Credit Facility Agreement (the "Credit Agreement") that was entered into on September 24, 1996. The maturity date of the Credit Agreement has been extended to September 29, 2002. At December 31, 2000 and 1999, $55,000 and $115,000 in borrowings were outstanding under the Credit Agreement, respective- ly. The Credit Agreement contains certain covenants typical for a credit agree- ment of its size and nature, includ ing financial covenants requiring the Com- pany to limit consolidated indebtedness (as defined) to not more than 60% of the sum of the Company's consolidated shareholders' equity (as defined) and consolidated indebtedness. The average interest rate on 2000 and 1999 borrowings under the Credit Agreement was 6.58% and 5.35%, respectively, with a year-end interest rate of 6.86% and 6.67% on the balance outstanding at Decem- ber 31, 2000 and 1999, respectively. The Company has three additional agreements with domestic financial institu- tions which provide immediate, uncommitted credit lines, on a short-term basis, up to a maximum of $120,000 at the individual financial institution's money market rate. At December 31, 2000 and 1999, $15,000 and $13,700 in borrowings from these agreements were outstanding, respectively, which the Company has the ability to refinance with borrowings under the Credit Agreement; therefore, these amounts have been classified as long-term debt. The average interest rate on borrowings under these agreements was 6.68% and 5.27% in 2000 and 1999, re- spectively, with a year-end interest rate of 6.88% and 6.38% on balances out- standing at December 31, 2000 and 1999, respectively. The Company has a Loan Agreement with Columbia County, Arkansas ("the Coun- ty"), which issued $11,000 in Tax-Exempt Solid Waste Disposal Revenue Bonds ("Tax-Exempt Bonds") for the purpose of financing various solid waste disposal facilities at the Company's Magnolia, Arkansas South Plant. At December 31, 2000 and 1999, $11,000 in borrowings from this agreement was outstanding. The Tax-Exempt Bonds bear interest at a variable rate which approximates 65% of the federal funds rate. The average interest rate was 4.34% and 3.59% in 2000 and 1999, respectively, with a year-end interest rate of 5.20% and 5.55%. The Tax- Exempt Bonds will mature on March 1, 2021 and are collateralized by a transfer- able irrevocable direct-pay letter of credit. Concurrently, the Company and the County entered into a series of agreements. Pursuant to these agreements, the Company will benefit from a ten-year property tax abatement on all new capital plant expansions, modifications and/or improvements (except for the restric- tions on the $11,000 Tax-Exempt Bonds) constructed at the Company's Magnolia, Arkansas South Plant over the next three years, up to a total of $81,000, in- cluding the solid waste disposal facilities mentioned above. One of the Company's foreign subsidiaries has an existing agreement with a foreign bank which provides immediate uncommitted credit lines, on a short-term basis, up to a maximum of approximately 2.5 billion Japanese yen ($21,800) at the individual bank's money market rate. At December 31, 2000 and 1999, borrowings under this agreement consisted of 1.7 billion Japanese yen ($14,824) and 1.8 billion Japanese yen ($17,230), respectively. The average interest rate on borrowings under this agreement was 1.42% and 1.50% in 2000 and 1999, re- spectively with a year-end interest rate of 1.50% and 1.38% at December 31, 2000 and 1999, respectively. Certain of the Company's remaining foreign subsid- iaries have three additional agreements with foreign institutions which provide immediate uncommitted credit lines, on a short term basis, up to a maximum of approximately $24,220 at the individual institution's money market rate. These agreements have been guaranteed by the Company. At December 31, 2000 and 1999, borrowings under these agreements were $183 and $461, respectively. The average interest rate on borrowings under these agreements was 6.40% and 5.82% in 2000 and 1999, respectively. The year-end interest rate was 6.37% and 6.25% at De- cember 31, 2000 and 1999, respectively. The Company has the ability to refi- nance borrowings from the foreign subsidiaries' agreements with borrowings un- der the Credit Agreement. Therefore, these amounts have been classified as long-term debt. Additional foreign borrowings at December 31, 2000 and 1999, consisted of 6.4 million French francs ($909) and 8.3 million French francs ($1,275), respec- tively. The average interest rate on these borrowings was 0.50% and 24 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) 0.50% in 2000 and 1999, respectively. The year-end interest rate was 0.50% and 0.50% at December 31, 2000 and 1999, respectively. NOTE 9--Capital Stock: ---------------------- Preferred Stock --------------- The Company has the authority to issue 15,000,000 shares of preferred stock, in one or more classes or series. No shares of the Company's preferred stock have been issued to date. Stock Purchases --------------- On December 7, 2000, the Company completed the purchase of 38,413 of its common shares through an odd-lot tender offer at a price of $22.05 per share plus ex- penses for an aggregate cost of approximately $895. An additional 535,678 com- mon shares were purchased, in market transactions, for $8,903, at an average price of $16.62 per share in 2000. During 1999, the Company purchased, in mar- ket transactions, 857,400 shares for $15,474, at an average price of $18.05 per share. On September 30, 1998, the Company finalized the purchase of 5,738,241 of its common shares through a self-tender offer at a price of $19.50 per share plus expenses for an aggregate cost of approximately $112,659. Earlier in 1998, the Company purchased, in market transactions, an additional 1,174,500 shares for $27,946, at an average price of $23.79 per share. The Company had authori- zation to purchase at December 31, 2000 an additional 5,000,000 shares of its common stock. Stock Option Plans ------------------ The Company has two incentive plans (1994 and 1998 plans). The plans provide for incentive awards payable in either cash or common stock of the Company, qualified and non-qualified stock options ("stock options"), stock appreciation rights ("SARs"), and restricted stock awards and performance awards ("stock awards"). Under the 1998 plan, a maximum of 3,000,000 shares of the Company's common stock may be issued as incentive awards, stock options, SARs or stock awards. Under the 1994 plan, a maximum of 3,200,000 shares of the Company's common stock could be issued pursuant to the exercise of stock options, SARs or the grant of stock awards. At December 31, 2000, 448,919 shares are available under the 1994 grant. However, it is not anticipated that any additional grants or awards will be made under the 1994 plan. Stock options outstanding under the two plans have been granted at prices which are equal to the market value of the stock on the date of grant and ex- pire 5 to 10 years after issuance. The stock options become exercisable based upon growth in either operating earnings as defined from the base-year earn- ings, or the increase in fair market value ("FMV") of the Company's common stock, during a specified period, from the FMV on the date of grant. Restricted stock award agreements relating to 208,000 and 263,500 restricted shares of Albemarle common stock were made with certain employees of the Com- pany in 2000, and 1999 and 1998, respectively. The fulfillment of the contin- gencies are determined over a two- or four-year period based on certain perfor- mance criteria, which, if exceeded, could result in as many as twice the number of shares being issued as restricted stock, or none may be issued if the per- formance criteria are not met. The two-year restricted stock award agreements totaling 122,000 shares ended at the end of 1999 and 61,290 restricted shares were issued to certain employees. The restricted stock will vest based upon certain criteria over a period of three years. In addition, with regard to the two- and four-year plans, 4,860 restricted shares were issued to retirees in 2000, all of which vested in 2000. Total compensation expense associated with the Company's 1994 and 1998 incen- tive plans in 2000, 1999 and 1998 amounted to $9,595, $2,970 and $5,570, respectively. 25 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) Presented below is a summary of the activity in the 1994 and 1998 plans: <TABLE> <CAPTION> Shares Weighted- Available for Options Average Grant Activity Options Price Exercise Price ------------------------------------------------------------------------------- <S> <C> <C> <C> <C> January 1, 1998 1,102,939 1,278,509 $ 9.45--$17.38 $14.06 ------------------------------------------------------------------------------- 1998 Plan adoption 3,000,000 Non-qualifying stock options granted (590,000) 590,000* $25.25--$25.75 $25.71 Exercised (34,222) $ 9.45--$13.47 $12.26 Restricted stock awards (250,000) ------------------------------------------------------------------------------- December 31, 1998 3,262,939 1,834,287 $10.36--$25.75 $17.84 ------------------------------------------------------------------------------- Non-qualifying stock options granted (388,500) 388,500* $20.00--$25.75 $21.48 Exercised (53,448) $12.29--$13.13 $12.89 Restricted stock awards (13,500) Restricted stock awards canceled 69,350 ------------------------------------------------------------------------------- December 31, 1999 2,930,289 2,169,339 $10.36--$25.75 $18.62 ------------------------------------------------------------------------------- Non-qualifying stock options granted (445,500) 445,500* $15.94--$22.31 $17.12 Exercised (237,368) $10.36--$13.47 $13.06 Non-qualifying stock options canceled and lapsed 97,000 (97,000) $13.13--$25.75 $23.14 Restricted stock awards (208,000) ------------------------------------------------------------------------------- December 31, 2000 2,373,789 2,280,471 $12.12--$25.75 $18.70 =============================================================================== </TABLE> * The weighted average fair values of options granted during 2000, 1999 and 1998 were $10.99, $6.01 and $7.26, respectively. The following table summarizes information about fixed-price stock options at December 31, 2000: <TABLE> <CAPTION> Options Outstanding Options Exercisable ------------------------------------------------------------------------------------ Number Weighted-Average Number Exercise Outstanding Remaining Weighted-Average Exercisable Weighted Average Prices @ 12/31/00 Contractual Life Exercise Price @ 12/31/00 Exercise Price ------------------------------------------------------------------------------------ <S> <C> <C> <C> <C> <C> $12.12 2,144 1.0 years $12.12 2,144 $12.12 13.47 16,407 2.0 years 13.47 16,407 13.47 13.13 631,920 3.2 years 13.13 631,920 13.13 17.38 293,000 5.7 years 17.38 234,400 17.38 25.25 50,000 7.3 years 25.25 10,000 25.25 25.75 434,000 4.3 years 25.75 -- 25.75 25.75 40,000 4.8 years 25.75 -- 25.75 25.75 100,000 5.2 years 25.75 -- 25.75 20.00 269,000 5.5 years 20.00 134,500 20.00 19.19 50,000 6.0 years 19.19 12,500 19.19 15.94 334,000 6.2 years 15.94 83,500 15.94 20.31 10,000 4.3 years 20.31 5,000 20.31 22.31 50,000 6.5 years 22.31 -- 22.31 ------------------------------------------------------------------------------------ 2,280,471 1,130,371 ==================================================================================== </TABLE> 26 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) As discussed in Note 1, "Summary of Significant Accounting Policies", the Com- pany accounts for stock-based compensation plans under APB Opinion No. 25. If compensation cost had been determined based on the fair value at the grant date for awards made in 2000, 1999 and 1998 under the Plans consistent with the method of SFAS No. 123, the Company's net income and earnings per share would have been reduced to the pro forma amounts indicated below: <TABLE> <CAPTION> 2000 1999 ---------------------------------------------- <S> <C> <C> <C> Net income as reported $101,776 $88,829 pro forma $100,437 $88,018 ---------------------------------------------- Basic earnings as reported $ 2.22 $ 1.89 per share pro forma $ 2.19 $ 1.88 ---------------------------------------------- Diluted earnings as reported $ 2.18 $ 1.87 per share pro forma $ 2.16 $ 1.85 ---------------------------------------------- </TABLE> The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assump- tions used for options granted in 2000, 1999 and 1998, respectively: dividend yield 2.43%, 2.68% and 1.94%; expected volatility of 32.90%, 31.44% and 30.44%; risk-free interest rate of 5.14%, 6.56% and 4.65%; and expected lives of seven years. NOTE 10--Rental Expense and Other Data: --------------------------------------- Rental Expense -------------- The Company has a number of operating lease agreements, primarily for office space, transportation equipment and storage facilities. Future minimum lease payments for the next five years for all noncancelable leases as of December 31, 2000 are $7,235 for 2001, $4,552 for 2002, $2,646 for 2003, $311 for 2004, $143 for 2005, and amounts payable after 2005 are $292. Rental expense was ap- proximately $13,280 for 2000, $13,840 for 1999, and $13,750 for 1998. Contractual and Other Commitments --------------------------------- Contractual obligations for plant construction, purchases of real property and equipment and various take or pay and throughput agreements amounted to approx- imately $31,200 and $35,000 at December 31, 2000 and 1999, respectively. In addition, the Company has commitments, in the form of guarantees, on be- half of its 50%-owned joint venture company, Jordan Bromine Company Limited, which entered into loan agreements in 2000 to finance construction of its manu- facturing facilities on the Dead Sea, with the Islamic Development Bank, King- dom of Saudi Arabia and the European Investment Bank, Luxembourg, totaling $29,000 and 50 million Euros ($46,300 as of December 31, 2000), respectively. Albemarle Corporation has guaranteed 50% of the loan amounts outstanding from time to time which 50% at December 31, 2000, was approximately $5,100. Service Agreements ------------------ The Company and Ethyl are parties to various agreements, dated as of February 28, 1994, pursuant to which the Company and Ethyl agreed to coordinate certain facilities and services of adjacent operating facilities at plants in Pasadena, Texas and Feluy, Belgium. In addition, the Company and Ethyl are parties to agreements providing for the blending by the Company of Ethyl's additive prod- ucts and the production of antioxidants and manganese-based antiknock compounds at the Orangeburg, South Carolina plant. The Company's billings to Ethyl in 2000, 1999 and 1998 in connection with these agreements amounted to $28,409, $29,556, and $31,423, respectively. The Company and MEMC Pasadena, Inc. ("MEMC Pasadena") are parties to agree- ments dated as of July 31, 1995 and subsequently revised effective May 31, 1997, pursuant to which the Company provides certain utilities and services to the MEMC Pasadena site which is located at Albemarle's Pasadena plant and on which the electronic materials facility is located. MEMC Pasadena agreed to re- imburse Albemarle for all the costs and expenses plus a percentage fee incurred as a result of these agreements. The Company's billings to MEMC Pasadena, in connection with these agreements amounted to $6,824 in 2000, $6,339 in 1999 and $9,430 in 1998. The Company and Amoco are parties to numerous operating and service agree- ments, dated as of March 1, 1996, pursuant to which the Company provides oper- ating and support services, certain utilities and products to Amoco, and Amoco provides operating and support services, certain utilities and products to Albemarle. The Company's billings to Amoco in 2000, 1999 and 1998, in connec- tion with these agreements, amounted to $47,343, $39,270 and $40,985, respec- tively. Amoco's billings to the Company in 2000, 1999 and 1998, in connection with these agreements, amounted to $15,382, $14,735 and $16,611, respectively. 27 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) Environmental ------------- The Company has recorded liabilities of $11,532 and $10,024 at December 31, 2000 and 1999, respectively, which represents management's best estimate of the Company's future remediation and other anticipated environmental costs relating to past operations on an undiscounted basis. Accrued environmental liabilities and the related provision for environmental liabilities are immaterial in the aggregate. In this connection, disclosures relating to specific sites, including nature of the costs involved, the total anticipated cost, the total costs accrued to date, the balance sheet classifi- cation of accrued amounts, and liabilities for remediation of environmental damage relating to assets or businesses previously disposed have been excluded except for amounts in the aggregate. Although it is difficult to quantify the potential financial impact of com- pliance with environmental protection laws, management estimates, based on the latest available information, that there is a reasonable possibility that fu- ture environmental remediation costs to be incurred over a period of time asso- ciated with the Company's past operations in excess of amounts already record- ed, could be up to $10,580 before income taxes. However, the Company believes that most of the amount it may be required to pay in connection with environ- mental remediation matters in excess of the amounts recorded will not have a material adverse impact on its financial condition or results of operations, but could have a material adverse impact in a particular quarterly reporting period. Litigation ---------- The Company is, from time-to-time, subject to routine litigation incidental to its businesses. The Company is not party to any pending litigation proceedings that are expected to have a material adverse effect on the Company's results of operations or financial condition. NOTE 11--Pension Plans and Other Postretirement Benefits: --------------------------------------------------------- The Company has noncontributory defined-benefit pension plans covering most em- ployees. The benefits for these plans are based primarily on compensation and/or years of service. The funding policy for each plan complies with the re- quirements of relevant governmental laws and regulations. Plan assets consist principally of common stock, U.S. government and corporate obligations and group annuity contracts. The pension information for all periods presented in- cludes amounts related to salaried and hourly plans. The net prepaid (accrued) benefit cost related to pensions is included in "Prepaid pension assets" and "Other noncurrent liabilities" in the consolidated balance sheets. The Company provides postretirement medical benefits and life insurance for certain groups of U.S. retired employees. Medical and life insurance benefit costs are funded principally on a pay-as-you-go basis. Although the availabil- ity of medical coverage after retirement varies for different groups of employ- ees, the majority of employees who retire before becoming eligible for Medicare can continue group coverage by paying all or most of the cost of a composite monthly premium designed to cover the claims incurred by active and retired em- ployees. The availability of group coverage for Medicare-eligible retirees also varies by employee group with coverage designed either to supplement or coordi- nate with Medicare. Retirees generally pay a portion of the cost of the cover- age. Plan assets for retiree life insurance are held under an insurance con- tract and reserved for retiree life insurance benefits. The accrued postretirement benefit cost is included in "Other noncurrent liabilities" in the consolidated balance sheets. Pension coverage for employees of the Company's foreign subsidiaries is pro- vided through separate plans. Obligations under such plans are systematically provided for by depositing funds with trustees or under insurance policies. The pension cost, actuarial present value of benefit obligations and plan assets have been combined with the Company's other pension disclosure information pre- sented. 28 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) The following provides a reconciliation of benefit obligations, plan assets and funded status of the plans, as well as a summary of significant assumptions: <TABLE> <CAPTION> Other Postretirement Pension Benefits Benefits ----------------------------------------------------------------------------------- 2000 1999 2000 1999 ----------------------------------------------------------------------------------- <S> <C> <C> <C> <C> Change in benefit obligations ----------------------------------------------------------------------------------- Benefit obligation at January 1 $338,114 $ 341,029 $ 55,909 $ 58,706 Service cost 8,737 9,676 1,887 2,152 Interest cost 21,064 22,425 4,142 3,738 Plan amendments 877 1,234 -- -- Assumption changes (9,891) (20,952) (2,335) (4,592) Actuarial loss(gain) 1,767 1,122 2,803 (2,847) Benefits paid (13,464) (16,100) (2,640) (1,248) Plan curtailments, termination benefits and termination of insurer contracts (41,784) 351 -- -- Effect of foreign exchange (556) (671) -- -- ----------------------------------------------------------------------------------- Benefit obligation at December 31 $304,864 $ 338,114 $ 59,766 $ 55,909 =================================================================================== Change in plan assets ----------------------------------------------------------------------------------- Fair value of plan assets at January 1 $540,450 $ 480,059 $ 7,197 $ 6,627 Actual return on plan assets (9,773) 75,182 (834) 570 Employer contributions 1,290 1,612 2,640 1,248 Benefits paid (13,464) (16,100) (2,640) (1,248) Transfer to insurer due to termination of contracts (50,399) -- -- -- Effect of foreign exchange (159) (303) -- -- ----------------------------------------------------------------------------------- Fair value of plan assets at December 31 $467,945 $ 540,450 $ 6,363 $ 7,197 =================================================================================== Funded status of plans ----------------------------------------------------------------------------------- Over (under) funded status $163,080 $ 202,336 $(53,403) $(48,712) Unrecognized net gain (62,306) (128,653) (9,331) (11,525) Unrecognized prior service cost 7,696 8,605 696 796 Unrecognized net transition asset (2,684) (5,342) -- -- ----------------------------------------------------------------------------------- Net prepaid (accrued) benefit cost at December 31 $105,786 $ 76,946 $(62,038) $(59,441) =================================================================================== Assumption percentages as of December 31 ----------------------------------------------------------------------------------- Discount rate 7.50% 7.25% 7.50% 7.25% Expected return on plan assets 9.50% 9.50% 7.00% 7.00%R Rate of compensation increase 4.50% 4.50% 4.50% 4.50% =================================================================================== </TABLE> The components of pension and postretirement benefits (income) expense are as follows: <TABLE> <CAPTION> Other Postretirement Pension Benefits Benefits -------------------------------------------------------------------------------- 2000 1999 1998 2000 1999 1998 -------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> <C> Service cost $ 8,737 $ 9,676 $ 8,419 $1,887 $2,152 $1,940 Interest cost 21,064 22,425 21,407 4,142 3,738 3,600 Expected return on assets (40,998) (40,100) (35,984) (476) (439) (588) Plan curtailments, termination benefits and termination of insurer contracts (14,836) 713 -- -- -- -- Amortization of prior service cost 1,759 1,553 1,466 99 99 99 Amortization of (gain) loss (1,188) 102 58 (415) (271) (381) Amortization of transition asset (2,070) (2,351) (2,718) -- -- -- -------------------------------------------------------------------------------- Benefit (income) expense $(27,532) $ (7,982) $ (7,352) $5,237 $5,279 $4,670 ================================================================================ </TABLE> 29 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) The Company has a Supplemental Retirement Plan ("SRP"), which provides unfunded supplemental retirement benefits to certain management or highly compensated employees of the Company. The SRP provides for incremental pension payments partially to offset the reduction in amounts that would have been payable from the Company's principal pension plan if it were not for limitations imposed by federal income tax regulations. Expense relating to the SRP of $1,618, $934 and $785 was recorded for the years ended December 31, 2000, 1999 and 1998, respec- tively. The accumulated benefit obligation recognized in the Company's consoli- dated balance sheet at December 31, 2000 and 1999 was $5,773 and $4,069, re- spectively. The benefit expenses and obligations of this SRP are included in the tables on the preceding page. In 2000, the Company recognized a one-time noncash pension settlement gain related to a change in election in certain pension annuity contracts of $14,990. In 2000 and 1999, the Company recognized curtailment losses and spe- cial termination benefits charges related to pension plans of $154 and $713, respectively. The 2000 and 1999 curtailment losses and special termination ben- efits charges are both included in special charges (See Note 13, "Special Items"), as required by SFAS No. 88, "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits," reflecting the voluntary separation offers accepted by 76 and 122 employees throughout the Company in 2000 and 1999, respectively. The noncash pension set- tlement gain in 2000 will have no effect on any retiree benefits or benefit program of the Company. The assumed health care cost trend rate was 7% in 2000, 8% in 1999 and 9% in 1998, declining by 1% per year to an ultimate rate of 7%, except that managed care costs were assumed to be 6% in 2000, 1999 and 1998. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A one-percentage-point change in assumed health care cost trend rates at December 31, 2000 would have the following ef- fects: <TABLE> <CAPTION> One-Percentage- One-Percentage- Point Increase Point Decrease ----------------------------------------------------------------------------- <S> <C> <C> Effect on total of service and interest cost components $ 900 $ (700) ----------------------------------------------------------------------------- Effect on postretirement benefit obligation $7,500 $(6,000) </TABLE> -------------------------------------------------------------------------------- Other Postemployment Benefits The Company also provides certain postemployment benefits to former or inactive employees who are not retirees. The Company funds postemployment benefits on a pay-as-you-go basis. These benefits include salary continuance, severance and disability health care and life insurance which are accounted for under SFAS No. 112 "Employers' Accounting for Postemployment Benefits." The accrued post- employment benefit liability was $1,403 and $1,734 at December 31, 2000 and 1999, respectively. NOTE 12--Income Taxes: ---------------------- Income before income taxes and current and deferred income taxes (benefits) are composed of the following: <TABLE> <CAPTION> Years Ended December 31 ------------------------------------------------ 2000 1999 1998 ------------------------------------------------ <S> <C> <C> <C> Income before income taxes: Domestic $137,616 $ 98,395 $110,877 Foreign 9,885 30,343(a) 11,921 ------------------------------------------------ Total $147,501 $128,738 $122,798 ------------------------------------------------ Current income taxes (benefits): Federal $ 27,827 $ 27,336 $ 29,413 State (465) 1,351 1,516 Foreign 4,958 14,109 (593) ------------------------------------------------ Total 32,320 42,796 30,336 ------------------------------------------------ Deferred income taxes (benefits): Federal 14,798 2,542 7,456 State 1,048 (4,406) 835 Foreign (2,441) (1,023) (561) ------------------------------------------------ Total 13,405 (2,887) 7,730 ------------------------------------------------ Total income taxes $ 45,725 $ 39,909 $ 38,066 </TABLE> =============================================== (a) Includes the gain on sale of investment in Albright & Wilson stock, net totaling $22,054 ($14,381 net of income tax). The significant differences between the U.S. federal statutory rate and the ef- fective income tax rate are as follows: <TABLE> <CAPTION> % of Income Before Income Taxes ---------------------------------------------------------------------------------------- 2000 1999 1998 ---------------------------------------------------------------------------------------- <S> <C> <C> <C> Federal statutory rate 35.0% 35.0% 35.0% Foreign sales corporation benefit (2.2) (2.4) (2.1) State taxes, net of federal tax benefit 1.1 0.9 1.3 Depletion (1.0) (1.0) (1.1) Other items, net (1.9) (1.5) (2.1) ---------------------------------------------------------------------------------------- Effective income tax rate 31.0% 31.0% 31.0% </TABLE> ================================================================================ 30 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) The deferred income tax assets and deferred income tax liabilities recorded on the consolidated balance sheets as of December 31, 2000 and 1999, consist of the following: <TABLE> <CAPTION> 2000 1999 ------------------------------------------------------------------ <S> <C> <C> Deferred tax assets: Postretirement benefits other than pensions $ 22,612 $ 21,728 Foreign currency translation adjustments 9,086 5,283 Accrued employee benefits 6,464 5,906 LIFO inventories 4,884 4,884 Environmental reserves 3,642 3,095 Accrued liabilities 1,479 1,666 Subsidiaries' net operating loss carryforwards 956 494 Intercompany profit in inventories 546 2,608 Foreign tax benefit -- 3,215 Other 3,645 3,396 ------------------------------------------------------------------ Deferred tax assets 53,314 52,275 ------------------------------------------------------------------ Deferred tax liabilities: Depreciation 93,653 91,466 Pensions 38,383 27,897 Gain on Belgian intercompany loan 7,321 7,321 Capitalization of interest 2,350 2,296 Other 800 759 ------------------------------------------------------------------ Deferred tax liabilities 142,507 129,739 ------------------------------------------------------------------ Net deferred tax liabilities $ 89,193 $ 77,464 ================================================================== Reconciliation to consolidated balance sheets: Current deferred tax assets $ 10,410 $ 14,547 Deferred tax liabilities 99,603 92,011 ------------------------------------------------------------------ Net deferred tax liabilities $ 89,193 $ 77,464 ================================================================== </TABLE> 31 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) NOTE 13--Special Items: ----------------------- In April 2000, the Company made a change in election in certain of its pension annuity contracts. This election resulted in the recognition of a one-time noncash pension settlement gain of $14,990 ($9,549 after income taxes or 20 cents per share on a fully diluted basis), in accordance with SFAS No. 88 "Em- ployer's Accounting for Settlements and Curtailments of Defined Pension Plans and Termination Benefits". The pension settlement gain did not affect any re- tiree benefits or benefit programs of the Company. In December 2000, the Company incurred a special charge of $6,856 ($4,367 af- ter income taxes or 9 cents per share on a fully diluted basis) that resulted from workforce reduction programs at certain of the Company's facilities. The program impacted a total of 76 salaried and wage employees. In May 1999, the Company sold all of its 58,394,049 common shares of Albright & Wilson plc ("Albright & Wilson"), a United Kingdom chemicals company, that were acquired in March 1999, as part of its friendly tender offer for Albright & Wilson, to ISPG, Plc, the competing bidder, for an aggregate consideration of $157,516, resulting in a gain of $22,054 ($14,381 after income taxes or 30 cents per share on a diluted basis), net of transaction expenses. The net pro- ceeds from the sale of the common shares were primarily used to pay down debt under the Company's existing Credit Agreement. During 1999, the Company incurred special charges of $10,692 ($6,717 after income taxes or 14 cents per share on a fully diluted basis) that resulted pri- marily from voluntary separation offers made to various employees throughout the Company. The program impacted a total of 122 salaried and wageroll employ- ees. NOTE 14--Fair Value of Financial Instruments: --------------------------------------------- In assessing the fair value of financial instruments, the Company uses methods and assumptions that are based on market conditions and other risk factors ex- isting at the time of assessment. Fair value information for the Company's fi- nancial instruments is as follows: Cash and Cash Equivalents--The carrying value approximates fair value due to their short-term nature. Long-Term Debt--The carrying value of the Company's long-term debt reported in the accompanying consolidated balance sheets at December 31, 2000 and 1999, approximates fair value since substantially all of the Company's long-term debt bears interest based on prevailing variable market rates currently available in the countries in which the Company has borrowings. Foreign Currency Exchange Contracts--The fair values of the Company's forward currency exchange contracts are estimated based on current settlement values. The fair value of the forward contracts represent a net liability position of $62 and $141 at December 31, 2000, and December 31, 1999, respectively. NOTE 15--Acquisitions: ---------------------- On June 29, 2000, the Company acquired from Ferro Corporation the PYRO-CHEK(R) Flame Retardant business, along with a plant at Port-de-Bouc, France, for a purchase price of approximately $35,000. The purchase price was allocated be- tween property, plant, and equipment, inventory, identifiable intangibles with the remaining balance to goodwill. As of the close of business on October 30, 1998, the Company, through its subsidiary, Albemarle UK Limited, acquired the Teesport, United Kingdom, opera- tions of Hodgson Specialty Chemicals division of BTP plc for approximately $15,000. The purchase price for this acquisition was allocated between proper- ty, plant and equipment, inventory and the remaining balance to goodwill. No pro forma financial information was provided for these acquisitions for the periods presented since their impact was immaterial to the Company's con- solidated results of operations and financial position. 32 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) NOTE 16--Operating Segments and Geographic Area Information: --------- The Company is a global manufacturer of specialty polymer and fine chemicals, grouped into two operating segments: Polymer Chemicals and Fine Chemicals. The operating segments were determined based on management responsibility. The Pol- ymer Chemicals' operating segment is comprised of flame retardants, catalysts, and polymer additives and intermediates. The Fine Chemicals' operating segment is comprised of agrichemicals, pharmachemicals and performance chemicals. The accounting policies of the segments are the same as those described in Note 1, "Summary of Significant Accounting Policies." The Company evaluates the performance of its operating segments based on operating profit which repre- sents income before income taxes, before gain on sale of investment in Albright & Wilson stock and before interest and financing expenses and other income, net. Segment data includes intersegment transfers of raw materials at cost and foreign exchange transaction gains and losses, as well as allocations for cer- tain corporate costs. Summarized financial information concerning the Company's reportable segments is shown in the following table. The "Corporate & Other" column includes corpo- rate-related items not allocated to the reportable segments. <TABLE> <CAPTION> Polymer Fine Corporate Operating Segment Results Chemicals Chemicals & Other Total ---------------------------------------------------------------------- <S> <C> <C> <C> <C> 2000 Net sales $500,899 $416,650 -- $917,549 Operating profit(a) 103,817 70,736 $(24,391) 150,162 Identifiable assets 350,811 433,380 197,612 981,803 Depreciation and amortization 28,804 43,819 1,127 73,750 Capital expenditures 11,216 40,614 418 52,248 1999 Net sales $449,156 $396,769 -- $845,925 Operating profit(a) 73,083 60,187 $(19,144) 114,126 Identifiable assets 331,505 436,669 185,920 954,094 Depreciation and amortization 29,027 45,452 1,271 75,750 Capital expenditures 43,289 31,119 3,161 77,569 1998 Net sales 417,998 402,864 -- 820,862 Operating profit(a) 76,608 69,619 (20,512) 125,715 Identifiable assets 322,944 475,810 139,043 937,797 Depreciation and amortization 29,807 43,800 1,405 75,012 Capital expenditures 40,012 30,147 6,588 76,747 </TABLE> -------------------------------------------------------------------------------- <TABLE> <CAPTION> Net Sales(b) 2000 1999 1998 -------------------------------------- <S> <C> <C> <C> <C> United States $504,373 $480,070 $470,818 Foreign 413,176 365,855 350,044 -------------------------------------- Total $917,549 $845,925 $820,862 ====================================== <CAPTION> Long-Lived Assets as of December 31 2000 1999 1998 -------------------------------------- <S> <C> <C> <C> <C> United States $406,169 $410,626 $406,928 France 93,508 85,696 109,206 Other foreign countries 12,852 16,960 19,825 -------------------------------------- Total $512,529 $513,282 $535,959 </TABLE> ================================================================================ Notes: (a) Includes the effects of foreign exchange transaction (losses) gains of ($798), $6,034 and ($3,023) in 2000, 1999 and 1998, respectively. (b) No sales in a foreign country exceeds 10% of total Company net sales. 33 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- (In Thousands of Dollars Except for Share Data and Per-Share Amounts) NOTE 17--Quarterly Financial Summary (unaudited): ------------------------------------------------- <TABLE> <CAPTION> First Second Third Fourth Quarter Quarter Quarter Quarter ------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> 2000 Net sales $235,480 $226,206 $237,053 $218,810 Gross profit $ 74,602 $ 66,006 $ 68,839 $ 62,016 Special items(a,b) $ -- $ 15,900 $ -- $ (7,766) Net income $ 28,548 $ 33,813 $ 23,706 $ 15,709 Basic earnings per share $ .62 $ .74 $ .52 $ .34 Shares used to compute basic earnings per share(c) 46,084 45,795 45,816 45,834 Diluted earnings per share $ .61 $ .73 $ .51 $ .34 Shares used to compute diluted earnings per share(c) 46,538 46,608 46,684 46,595 1999 Net sales $208,345 $200,811 $212,086 $224,683 Gross profit(d) $ 71,318 $ 57,373 $ 59,484 $ 68,767 Special charges(e) $ -- $ (5,779) $ (852) $ (4,061) Gain on sale of investment in Albright & Wilson(f) $ -- $ 22,054 $ -- $ -- Net income $ 23,172 $ 24,613 $ 17,139 $ 23,905 Basic earnings per share $ .49 $ .52 $ .37 $ .51 Shares used to compute basic earnings per share(c) 47,016 47,033 46,949 46,557 Diluted earnings per share $ .49 $ .52 $ .36 $ .51 Shares used to compute diluted earnings per share(c) 47,746 47,731 47,475 47,102 ------------------------------------------------------------------------------------- </TABLE> Notes: (a) In April 2000, a change in election was made in certain pension annuity contracts which resulted in the recognition of a one-time noncash pension settlement gain of $15,900 ($10,128 after income taxes). A fourth quarter actuarial adjustment amounting to $910 ($579 after income taxes) reduced the net effect on 2000 to $14,990 ($9,549 after income taxes). The spe- cial item gain will have no effect on any retiree benefits or benefit programs of the Company. (b) Special charges in 2000 totaling $6,856 ($4,367 after income taxes) for the fourth quarter, resulted from workforce reduction programs at certain of the Company's facilities. The program impacted a total of 76 salaried and wage employees. (c) Includes the effects of the purchase of 491,400 common shares in the first quarter of 2000 and the purchase of 182,000 and 675,400 common shares in the third and fourth quarters of 1999, respectively. (d) Includes the reclassification of $2,141, $1,997, $1,679 and $1,786 from selling, general and administration expenses to cost of sales in the first, second, third and fourth quarters, respectively, to conform to current presentation. (e) Represents 1999 second quarter charge of $5,779 ($3,587 after income tax- es) third quarter charge of $852 ($543 after income taxes) and fourth quarter charge of $4,061 ($2,587 after income taxes) related to workforce reduction programs at certain of the Company's facilities. (f) Includes the second quarter 1999 net gain on sale of investment in Albright & Wilson stock, totaling $22,054 ($14,381 after income taxes). 34 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries MANAGEMENT'S REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- Albemarle Corporation's management has prepared the consolidated financial statements and related notes appearing on pages 15 through 34 in conformity with accounting principles generally accepted in the United States. In so do- ing, management makes informed judgments and estimates of the expected effects of events and transactions. Actual results may differ from management's judg- ments and estimates. Financial data appearing elsewhere in this annual report are consistent with these consolidated financial statements. Albemarle maintains a system of internal controls to provide reasonable, but not absolute, assurance of the reliability of the financial records and the protection of assets. The internal control system is supported by written poli- cies and procedures, careful selection and training of qualified personnel and an extensive internal audit program. These consolidated financial statements have been audited by PricewaterhouseCoopers LLP, independent certified public accountants. Their au- dit was made in accordance with auditing standards generally accepted in the United States and included an evaluation of Albemarle's internal accounting controls to the extent considered necessary to determine audit procedures. The audit committee of the Board of Directors, composed only of non-employee directors, meets with management, the outsourced independent internal auditors and the independent accountants to review accounting, auditing and financial reporting matters. The independent accountants are appointed by the board on recommendation of the audit committee, subject to shareholder approval. REPORT OF INDEPENDENT ACCOUNTANTS -------------------------------------------------------------------------------- [LOGO OF PRICEWATERHOUSECOOPERS] To the Board of Directors and Shareholders of Albemarle Corporation: In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, changes in shareholders' equity and of cash flows present fairly, in all material respects, the financial position of Albemarle Corporation and its subsidiaries (the "Company") at December 31, 2000 and 1999, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with ac- counting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's manage-ment; 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 au- diting standards generally accepted in the United States of America, which re- quire 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 dis- closures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall finan- cial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. /s/ PricewaterhouseCoopers LLP January 23, 2001 Richmond, Virginia 35 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- ITEM 9. Changes in and Disagreements with Accountants on Accounting and ------- Financial Disclosure NONE. PART III -------- ITEM 10. Directors and Officers of the Registrant -------- The information contained in the Proxy Statement under the caption "Election of Directors" concerning directors and persons nominated to become directors of the Company is incorporated herein by reference. The names and ages of all of- ficers of the Company as of February 28, 2001 are set forth below: <TABLE> <CAPTION> Name Age Officers ------------------------------------------------------------------------------- <C> <C> <S> Floyd D. Gottwald, Jr.* 78 Chairman of the Board and of the Executive Committee, Chief Executive Officer and Director Charles B. Walker* 62 Vice Chairman of the Board, Chief Financial Officer and Director Mark C. Rohr 49 President and Chief Operating Officer E. Whitehead Elmore 62 Senior Vice President, General Counsel and Corporate Secretary John G. Dabkowski 52 Vice President--Polymer Chemicals Thomas F. Dominick 53 Vice President--Development Resources Dixie E. Goins 50 Vice President--Science and Technology William M. Gottwald* 53 Vice President--Corporate Strategy, Secretary to the Executive Committee and Director Jack P. Harsh 48 Vice President--Human Resources Robert G. Kirchhoefer 60 Treasurer and Chief Accounting Officer George A. Newbill 57 Vice President--Sourcing Organization John M. Steitz 42 Vice President--Fine Chemicals Gary L. Ter Haar 64 Vice President--Health and Environment Michael D. Whitlow 49 Vice President--Americas Sales and Global Accounts Edward G. Woods 59 Vice President--Business Development Michael J. Zobrist 58 Vice President--Investor Relations/External Affairs ------------------------------------------------------------------------------- </TABLE> * Member of the Executive Committee 36 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- Additional Information--Officers of the Company ----------------------------------------------- The term of office of each such officer is until the meeting of the Board of Directors following the next annual shareholders' meeting (March 28, 2001). All such officers have been employed by the Company or its predecessor for at least the last five years, with the exception of Jack P. Harsh, Mark C. Rohr and John M. Steitz. Thomas F. Dominick joined Albemarle in 1994 after being associated with the Company's predecessor since 1974, most recently was elected vice president--de- velopment resources for Albemarle in December 2000 and vice president--new business development on a global basis effective August 1, 2000 responsible for global new business development, marketing research and technology resources. John M. Steitz joined Albemarle after being associated with Mallinckrodt, In- corporated, in St. Louis, Missouri for twenty years where he was vice president and general manager--pharmaceutical chemicals. John Steitz was elected vice president--fine chemicals on a global basis effective August 1, 2000. Michael J. Zobrist joined Albemarle in 1994 after being associated with the Company's predecessor since 1975, most recently was elected vice president--investor relations/external affairs effective August 1, 2000. Michael Zobrist served as general manager--external affairs and investor relations since May 1999 and as general manager--americas sales and global accounts from 1997 to 1999. Jack P. Harsh joined Albemarle effective November 16, 1998, from Union Carbide Corpora- tion in Danbury, Connecticut, where he directed human resources for the sol- vents, intermediates and monomers business and supply-chain planning organiza- tion. He was elected vice president--human resources, effective December 1, 1998. Mark C. Rohr was elected executive vice president--operations on April 1, 1999 and assumed the position of president and chief operating officer on Janu- ary 1, 2000. Prior to joining Albemarle, Mr. Rohr was senior vice president for the Specialty Chemicals group of Occidental Chemical Corporation in Dallas, Texas. ITEM 11. Executive Compensation ------------------------------- This information is contained in the Proxy Statement under the caption "Compen- sation of Executive Officers and Directors" concerning executive compensation is incorporated herein by reference. ITEM 12. Security Ownership of Certain Beneficial Owners and Management ----------------------------------------------------------------------- This information is contained in the Proxy Statement under the caption "Stock Ownership" is incorporated herein by reference. ITEM 13. Certain Relationships and Related Transactions ------------------------------------------------------- This information is contained in the Proxy Statement under the captions "Cer- tain Relationships and Related Transactions" and "Stock Ownership" is incorpo- rated herein by reference. 37 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- PART IV ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a)(1) The following consolidated financial and informational statements of the registrant are included in Part II Item 8 on pages 15 to 35: Consolidated Balance Sheets as of December 31, 2000 and 1999 Consolidated Statements of Income, Changes in Shareholders' Equity and Cash Flows for the years ended December 31, 2000, 1999, and 1998 Notes to the Consolidated Financial Statements Management's Report on the Consolidated Financial Statements Report of Independent Accountants (a)(2) No Financial Statement Schedules are provided in accordance with Item 14(a)(2) as the information is either not applicable, not required or has been furnished in the Consolidated Financial Statements or Notes thereto. (a)(3) Exhibits The following documents are filed as exhibits to this Form 10-K pursuant to Item 601 of Regulation S-K: 3.1 Amendment to Restated Articles of Incorporation of the registrant [filed as Exhibit 3.1 to the Company's Form 10-K for 1994 (No. 1-12658), and incorporated herein by reference]. 3.2 Amended By-laws of the registrant [filed as exhibit 10.1 to the Company's Form 10-K for 1999 (No. 1-12658), and incorporated herein by reference]. 10.1 Credit Agreement, dated as of September 24, 1996, between the Company, Bank of America, N.A., as administrative agent and The Bank of New York and the Chase Manhattan Bank, as co-agents and certain commercial banks [filed as Exhibit 10.1 to the Company's Third Quarter 1996 Form 10-Q (No. 1-12658) and incorporated herein by reference]. 10.2 The Company's 1994 Omnibus Stock Incentive Plan, adopted on February 8, 1994 [filed as Exhibit 10.1 to the Company's Form S-1 (No. 33-77452), and incorporated herein by reference]. 10.3 The Company's Bonus Plan, adopted on February 8, 1994 [filed as Exhibit 10.8 to the Company's Form 10 (No. 1-12658), and incorporated herein by reference]. 10.4 Savings Plan for the Employees of the Company, adopted on February 8, 1994, amended January 1, 2001 filed herewith. 10.5 The Company's Supplemental Executive Retirement Plan dated April 26, 2000 filed herewith. 10.6 The Company's Non-Employee Outside Directors' Stock Compensation Plan dated November 1, 1999 filed herewith. 10.7 The Company's Agreement between Certain Executives [filed as Exhibit 10.12 to the Company's Form 10 (No. 1-12658), and incorporated herein by reference]. 10.8 The Company's 1998 Incentive Plan, adopted April 22, 1998 [filed as Exhibit 10.8 to the Company's Form 10-K for 1998 (No. 1-12658), and incorporated herein by reference]. 10.9 The Company's compensation arrangement with Mark C. Rohr dated February 26, 1999 [filed as Exhibit 10.9 to the Company's Form 10-K for 1999 (No. 1-12658), and incorporated herein by reference]. 11. Statements re: Computation of Pro Forma Earnings Per Share for years ended December 31, 2000 and 1999. 21. Subsidiaries of the Company. 23.1 Consent of PricewaterhouseCoopers LLP. 99. Five-Year Summary (see page 40). (b) No report on Form 8-K was filed in the last quarter of the period covered by this report. (c) Exhibits--The response to this portion of Item 14 is submitted as a sepa- rate section of this report. Note: Part IV Item 14(1) 7 documents 10.4, 10.5, 10.6, 11, 21, 23.1 and Item 14(c) are not included herein. They will be filed in the Securities and Ex- change Commission EDGAR filing of the Form 10-K document only. 38 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries -------------------------------------------------------------------------------- SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its be- half by the undersigned thereunto duly authorized. Albemarle Corporation (Registrant) /s/ Floyd D. Gottwald, Jr. By: _________________________________________ Floyd D. Gottwald, Jr. Chairman of the Board Dated: February 28, 2001 Pursuant to the requirements of the Securities Exchange Act of 1934, this re- port has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of February 28, 2001. <TABLE> <CAPTION> Signature Title --------- ----- <S> <C> /s/ Floyd D. Gottwald, Jr. Chairman of the Board, ______________________________________ Chairman of the Executive Committee, (Floyd D. Gottwald, Jr.) Chief Executive Officer and Director (Principal Executive Officer) /s/ Charles B. Walker Vice Chairman of the Board, ______________________________________ Chief Financial Officer and (Charles B. Walker) Director (Principal Financial Officer) /s/ Robert G. Kirchhoefer Treasurer and Chief Accounting Officer ______________________________________ (Principal Accounting Officer) (Robert G. Kirchhoefer) /s/ Craig R. Andersson Director ______________________________________ (Craig R. Andersson) /s/ John D. Gottwald Director ______________________________________ (John D. Gottwald) /s/ William M. Gottwald Vice President--Corporate Strategy and ______________________________________ Director (William M. Gottwald) /s/ Seymour S. Preston III Director ______________________________________ (Seymour S. Preston III) /s/ Emmett J. Rice Director ______________________________________ (Emmett J. Rice) /s/ Charles E. Stewart Director ______________________________________ (Charles E. Stewart) /s/ Anne M. Whittemore Director ______________________________________ (Anne M. Whittemore) </TABLE> 39 --------------------------------------------------------------------------------

Albemarle Corporation and Subsidiaries FIVE-YEAR SUMMARY -------------------------------------------------------------------------------- <TABLE> <CAPTION> (In Thousands Except Per- Share Amounts) ---------------------------------------------------------------------------------- Years Ended December 31 2000 1999 1998 1997 1996 ---------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> Results of Operations Net sales $ 917,549 $ 845,925 $ 820,862 $ 829,850 $ 854,481 Costs and expenses(a) 767,387 731,799 695,147 709,143 761,055 ---------------------------------------------------------------------------------- Operating profit 150,162 114,126 125,715 120,707 93,426 Interest and financing expenses 5,998 8,379 4,487 719 2,529 Gain on sales of investments/businesses(b) -- (22,054) -- -- (158,157) Other income, net (3,337) (937) (1,570) (917) (4,025) ---------------------------------------------------------------------------------- Income before income taxes 147,501 128,738 122,798 120,905 253,079 Income taxes 45,725 39,909 38,066 40,923 97,020 ---------------------------------------------------------------------------------- Net income $ 101,776 $ 88,829 $ 84,732 $ 79,982 $ 156,059 ================================================================================== Financial Position and Other Data Total assets $ 981,803 $ 954,094 $ 937,797 $ 888,181 $ 846,261 Operations: Working capital $ 173,038 $ 201,246 $ 203,594 $ 184,176 $ 111,193 Current ratio 2.22 to 1 2.53 to 1 2.89 to 1 2.64 to 1 1.75 to 1 Depreciation and amortization $ 73,750 $ 75,750 $ 75,012 $ 69,044 $ 71,044 Capital expenditures $ 52,248 $ 77,569 $ 76,747 $ 85,284 $ 90,439 Research and development expenses $ 26,201 $ 34,288 $ 29,655 $ 31,446 $ 30,442 Gross margin as a % of net sales 29.6 30.4 30.9 31.5 28.5 Total long-term debt $ 97,980 $ 159,760 $ 192,938 $ 91,793 $ 31,863 Equity(c) $ 558,907 $ 490,564 $ 451,667 $ 517,336 $ 505,198 Total long-term debt as a % of total capitalization 14.9 24.6 29.9 15.1 5.9 Common Stock Basic earnings per share $ 2.22 $ 1.89 $ 1.64 $ 1.45 $ 2.67 Shares used to compute basic earnings per share(c) 45,882 46,889 51,558 55,164 58,353 Diluted earnings per share $ 2.18 $ 1.87 $ 1.63 $ 1.44 $ 2.65 Shares used to compute diluted earnings per share(c) 46,606 47,513 52,136 55,668 58,842 Cash dividends declared per share $ .46 $ .40 $ .37 $ .32 $ .25 Shareholders' equity per share(c) $ 12.20 $ 10.62 $ 9.61 $ 9.60 $ 9.18 Return on average shareholders' equity 19.4% 18.9% 17.5% 15.6% 27.7% </TABLE> =============================================================================== (a) 2000 cost and expenses include special charges of $6,856 ($4,367 after in- come taxes) for workforce reductions and a one-time noncash pension set- tlement gain of $14,990 ($9,549 after income taxes) resulting from a change in election made in certain pension annuity contracts. In addition, 1999 costs and expenses include a special charge of $10,692 ($6,717 after income taxes) for workforce reductions at certain of the Company's facili- ties. (b) 1999 gain on the sale of investment in Albright & Wilson stock ($14,381 af- ter income taxes). 1996 gain on the sale of the Olefins Business ($94,377 after income taxes). (c) Shareholders' equity includes the purchase of common shares amounting to: 2000--574,091; 1999--857,400; 1998--6,912,741; 1997--1,560,300; 1996-- 11,244,190. 40 --------------------------------------------------------------------------------

EXHIBIT 10.4 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION Effective March 1, 1994 As Amended and Restated Effective January 1, 2001

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 TABLE OF CONTENTS ----------------- <TABLE> <CAPTION> Section Page ------- ---- <S> <C> INTRODUCTION ARTICLE I DEFINITIONS................................................. 2 1.01. Account.................................................. 2 1.02. Actual Deferral Percentage or ADP........................ 2 1.03. Affiliate................................................ 2 1.04. After-Tax Account........................................ 3 1.05. After-Tax Contribution................................... 3 1.06. After-Tax Election....................................... 3 1.07. Alternate Payee.......................................... 3 1.08. Annual Addition.......................................... 3 1.09. Annuity Starting Date.................................... 3 1.10. Base Pay................................................. 3 1.11. Beneficiary.............................................. 4 1.12. Board of Directors....................................... 4 1.13. Break in Service......................................... 4 1.14. Code..................................................... 4 1.15. Committee................................................ 4 1.16. Company.................................................. 4 1.17. Compensation............................................. 5 1.18. Contribution Percentage.................................. 5 1.19. Defined Benefit Plan..................................... 5 1.20. Defined Contribution Plan................................ 5 1.21. Discretionary Account.................................... 5 1.22. Discretionary Contribution............................... 6 1.23. Earnings................................................. 6 1.24. Employee................................................. 6 1.25. Employee Benefits Section................................ 7 1.26. ERISA.................................................... 7 1.27. Ethyl.................................................... 7 1.28. Ethyl Plan............................................... 7 1.29. Excess Aggregate Contribution............................ 7 1.30. Excess Annual Additions.................................. 7 1.31. Excess Deferral.......................................... 7 1.32. Excess Pre-Tax Contribution.............................. 8 1.33. Highly Compensated....................................... 8 1.34. Hours of Service......................................... 9 1.35. Information Date......................................... 11 </TABLE> -i-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 TABLE OF CONTENTS ----------------- <TABLE> <CAPTION> Section Page ------- ---- <S> <C> 1.36. Investment Fund................................................. 11 1.37. Leased Employee................................................. 11 1.38. Limitation Year................................................. 11 1.39. Matching Account................................................ 11 1.40. Matching Contribution........................................... 11 1.41. Member.......................................................... 11 1.42. Military Leave.................................................. 12 1.43. Normal Retirement Age........................................... 12 1.44. Payroll Period.................................................. 12 1.45. Permanent and Total Disability.................................. 12 1.46. Plan............................................................ 12 1.47. Plan Year....................................................... 12 1.48. Pre-Tax Account................................................. 12 1.49. Pre-Tax Contribution............................................ 12 1.50. Pre-Tax Election................................................ 12 1.51. Qualified Domestic Relations Order.............................. 12 1.52. Required Beginning Date......................................... 13 1.53. Restricted 401(k) Employee...................................... 13 1.54. Restricted 401(m) Employee...................................... 14 1.55. Rollover Account................................................ 14 1.56. Rollover Contribution........................................... 14 1.57. Special Contribution............................................ 14 1.58. Transferred Employee............................................ 14 1.59. Trust Agreement................................................. 14 1.60. Trust Fund...................................................... 14 1.61. Trustee......................................................... 14 1.62. Uniformed Service............................................... 14 1.63. Unrestricted 401(k) Employee.................................... 14 1.64. Unrestricted 401(m) Employee.................................... 15 1.65. USERRA.......................................................... 15 1.66. Valuation Date.................................................. 15 1.67. Year of Service................................................. 15 ARTICLE II ELIGIBILITY AND MEMBERSHIP...................................... 16 2.01. Eligibility Requirements........................................ 16 2.02. Changes in Employment Status.................................... 16 2.03. Membership in the Plan.......................................... 16 2.04. Reemployment.................................................... 17 </TABLE> -ii-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 TABLE OF CONTENTS ----------------- <TABLE> <CAPTION> Section Page ------- ---- <S> <C> ARTICLE III CONTRIBUTIONS........................................................... 18 3.01. After-Tax Contributions................................................ 18 3.02. Pre-Tax Contributions.................................................. 18 3.03. Pre-Tax Elections...................................................... 19 3.04. Changes in After-Tax and Pre-Tax Elections............................. 19 3.05. Voluntary Suspension of After-Tax and Pre-Tax Elections................ 19 3.06. Required Suspension of After-Tax and Pre-Tax Elections................. 20 3.07. Pre-Tax Contribution Limitations....................................... 20 3.08. Company Matching Contributions......................................... 22 3.09. Company Discretionary Contributions and Special Contributions.......... 22 3.10. Rollover Contributions................................................. 23 3.11. Matching and After-Tax Contribution Limitations........................ 23 3.12. USERRA Contributions................................................... 25 ARTICLE IV ALLOCATIONS.............................................................. 27 4.01. Establishment of Accounts.............................................. 27 4.02. Allocations of After-Tax Contributions................................. 27 4.03. Allocations of Pre-Tax Contributions................................... 27 4.04. Allocation of Matching Contributions................................... 27 4.05. Allocation of Discretionary Contributions and Special Contributions.... 27 4.06. Allocation of Rollover Contributions................................... 28 4.07. Excess Deferrals....................................................... 28 4.08. Excess Pre-Tax Contributions........................................... 29 4.09. Excess Aggregate Contributions......................................... 29 4.10. Recharacterization of Excess Pre-Tax Contributions..................... 30 ARTICLE V INVESTMENTS............................................................... 32 5.01. Investment Funds....................................................... 32 5.02. Investment of Matching and Discretionary Accounts...................... 32 5.03. Investment in Inactive Investment Funds................................ 33 5.04. Member Directed Investments............................................ 33 5.05. Transfer Procedures.................................................... 36 5.06. Investment of Income................................................... 37 5.07. Warrants, Rights and Options........................................... 37 5.08. Voting Rights.......................................................... 38 5.09. Tender or Exchange Rights.............................................. 38 5.10. Other Provisions Applicable to Funds................................... 39 </TABLE> -iii-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 TABLE OF CONTENTS ----------------- <TABLE> <CAPTION> Section Page -------- ---- <S> <C> ARTICLE VI VALUATION AND ACCOUNTING...................................................... 40 6.01. Valuation of Accounts..................................................... 40 6.02. Allocation of Contributions Between Investment Funds...................... 40 6.03. Allocation of Income and Gains and Losses................................. 40 6.04. Allocation of Shares of Stock............................................. 41 ARTICLE VII VESTING AND DISTRIBUTIONS.................................................... 42 7.01. Plan Termination, Death, Permanent and Total Disability, Retirement....... 42 7.02. Other Separation.......................................................... 42 7.03. Timing of Distributions................................................... 45 7.04. Qualified Domestic Relations Order Distributions.......................... 46 7.05. Form of Distribution...................................................... 47 7.06. Withdrawals............................................................... 47 7.07. Pre-Tax Account Distribution Restrictions................................. 51 7.08. Direct Rollovers.......................................................... 52 7.09. Loans..................................................................... 53 7.10. Federal Income Tax Withholding............................................ 55 7.11. Special Rules for Former Amoco Employees.................................. 55 ARTICLE VIII LIMITATIONS................................................................. 56 8.01. Maximum Contribution Limitations.......................................... 56 8.02. Multiple Plan Participation............................................... 57 ARTICLE IX ADMINISTRATION................................................................ 60 9.01. Appointment of Named Fiduciary and Administrator.......................... 60 9.02. Administrator............................................................. 60 9.03. Trustee................................................................... 60 9.04. Employee Savings Plan Committee........................................... 61 9.05. Benefit Claims Review Procedure........................................... 62 9.06. Administrative Costs...................................................... 63 9.07. Errors and Omissions...................................................... 63 9.08. Fiduciary Discretion...................................................... 63 ARTICLE X AMENDMENT AND TERMINATION OF THE PLAN.......................................... 65 10.01. Amendment of the Plan..................................................... 65 10.02. Termination of the Plan................................................... 65 </TABLE> -iv-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 TABLE OF CONTENTS ----------------- <TABLE> <CAPTION> Section Page -------- ---- <S> <C> ARTICLE XI MERGER AND CONSOLIDATION OF THE PLAN.......................................... 66 ARTICLE XII GENERAL PROVISIONS........................................................... 67 12.01. Qualification............................................................. 67 12.02. No Guaranty of Employment................................................. 67 12.03. Payments to Minors and Incompetents....................................... 67 12.04. Non-Alienation of Benefits................................................ 67 12.05. Headings and Subheadings.................................................. 68 12.06. Use of Masculine and Feminine; Singular and Plural........................ 68 12.07. Unclaimed Benefits........................................................ 68 12.08. Beneficiary Designation................................................... 68 12.09. Commencement of Payments.................................................. 68 12.10. Special Distribution Requirements......................................... 69 ARTICLE XIII SPECIAL TOP-HEAVY RULES..................................................... 70 ARTICLE XIV ADOPTION OF PLAN............................................................. 71 </TABLE> APPENDIX A SPECIAL TOP-HEAVY RULES EXHIBIT I SPECIAL PROVISIONS APPLICABLE TO CERTAIN UNION EMPLOYEES EXHIBIT II SPECIAL PROVISIONS APPLICABLE TO CERTAIN FORMER AMOCO EMPLOYEES EXHIBIT III INVESTMENT FUNDS -v-

Savings Plan For Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 INTRODUCTION ------------ The Savings Plan For The Employees Of Albemarle Corporation was adopted effective March 1, 1994, for the benefit of the eligible Employees of Albemarle Corporation and its Affiliates. Members of the Savings Plan For The Employees Of Ethyl Corporation (the Ethyl Plan) who were employed by Ethyl Corporation on February 28, 1994, the effective date of the spinoff of the Company from Ethyl Corporation, terminated employment with Ethyl Corporation or an affiliate of Ethyl Corporation after such date and prior to February 28, 1995, and who became employed by the Company immediately after their termination of employment were eligible to participate in the Plan. The accounts of such employees under the Ethyl Plan were transferred to the Plan in a direct trustee-to-trustee transfer of assets and liabilities on or after the date they became Members of the Plan. The Plan has been amended and restated effective November 1, 1997, (i) to include all amendments that have been adopted since the Plan was originally adopted, (ii) to effect changes enacted by the Uniformed Services Employment and Reemployment Rights Act of 1994 and the Small Business Job Protection Act of 1996, and (iii) to enhance benefits under the Plan, ease administration, and reflect the appointment of a new Trustee and record keeper. Although the changes in the Plan's Trustee and record keeper and the Plan's investment options are effective November 1, 1997, Members will not be able to change their investment options until the Trustee's changeover ("black-out") period has expired. The intent and purpose of the Company in maintaining the Plan is to provide a tax-qualified plan for the benefit of its eligible employees (and the eligible employees of its affiliates who may adopt the Plan), under which its contributions are deductible from federal income tax. The Company intends that the Plan be a discretionary contribution plan that satisfies the requirements of Sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as amended (the Code) and that its concomitant trust be tax-exempt under Code section 501(a). All questions arising in the construction and the administration of the Plan must be resolved accordingly. -1-

Savings Plan For Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE I DEFINITIONS ----------- 1.01. Account means the assets or value of the Trust Fund allocated to a ------- Member. A Member may have several accounts in this Plan. When Account is used without modification, it means the sum of all of the Member's accounts. See also After-Tax Account, Discretionary Contribution Account, Matching Contribution Account, Pre-Tax Account and Rollover Account. 1.02. Actual Deferral Percentage or ADP means, for purposes of measuring --------------------------------- compliance with Code section 401(k), the average of the ratios for a specified group of Employees for a Plan Year (calculated separately for each Employee in the group) of (a) the sum of the Pre-Tax Contributions and Special Contributions allocated to the Account of each such Employee for the Plan Year, to (b) the Employee's Compensation for the Plan Year. Subsection (a) shall include Excess Deferrals of Restricted 401(k) Employees but exclude Excess Deferrals of Unrestricted 401(k) Employees and any Pre-Tax Contributions taken into account for purposes of satisfying the Matching and After-Tax Contribution limitations described in Plan section 3.11, provided that the Pre-Tax Contribution limitations described in Plan section 3.07 are satisfied both with and without the exclusion of such Pre-Tax Contributions. The Actual Deferral Percentage of a Member who is eligible to but does not make a Pre-Tax Contribution and who does not receive an allocation of a Special Contribution is zero. 1.03. Affiliate means --------- (a) a member of a controlled group of corporations as defined in Code section 1563(a), determined without regard to Code section 1563(a)(4) and 1563(e)(3)(C), of which a Company is a member according to Code section 414(b); (b) an unincorporated trade or business that is under common control with a Company as determined according to Code section 414(c); (c) a member of an affiliated service group of which a Company is a member according to Code section 414(m); or (d) any entity required to be aggregated according to Code section 414(o). For purposes of Plan article VIII only, the word Affiliate includes all corporations which, when considered with Albemarle Corporation, would constitute a controlled group of -2-

Savings Plan For Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 corporations if the phrase "at least 80%" appearing in Code section 1563 were replaced by the phrase "more than 50%" and Code section 414(c) were similarly construed. 1.04. After-Tax Account means that portion of a Member's Account attributable ----------------- to his After-Tax Contributions and with respect to a Member who is a Transferred Employee, any after-tax contributions allocated to his account under the Ethyl Plan. 1.05. After-Tax Contribution means the contribution a Member may make to the ---------------------- Plan pursuant to the terms of Plan section 3.01. A Member's After-Tax Contributions can consist of (i) Regular After-Tax Contributions, which result in a Matching Contribution and (ii) Additional After-Tax Contributions, which do not result in a Matching Contribution. 1.06. After-Tax Election means a Member's election to make an After-Tax ------------------ Contribution according to Plan section 3.01. 1.07. Alternate Payee means a Member's spouse, former spouse, child or other --------------- dependent who is recognized by a domestic relations order as having a right to receive all or a portion of the benefits payable under the Plan with respect to such Member. 1.08. Annual Addition means, with regard to any individual for any Limitation --------------- Year, the sum of (i) employer contributions, (ii) the Member's non-deductible contributions, and (iii) forfeitures, if any, which may be allocated to his Account during that Limitation Year. Amounts allocated to an individual medical account, as defined in Code section 401(h)(6) and referred to in Code section 415(l)(1), that is part of a Defined Benefit Plan maintained by the Company or an Affiliate are treated as Annual Additions to a Defined Contribution Plan. Amounts derived from contributions paid or accrued that are attributable to post-retirement medical benefits allocated to the separate account of a key employee (as defined in Code section 419A(d)(3)) under a welfare benefit fund (as defined in Code section 419(e)) maintained by the Company or an Affiliate are treated as Annual Additions to a Defined Contribution Plan. Excess Pre-Tax Contributions, Excess Aggregate Contributions and Excess Deferrals (to the extent not distributed under Plan section 4.07) are treated as Annual Additions to the Plan. 1.09. Annuity Starting Date means the first day on which all events occur that --------------------- entitle a Member to a Plan benefit. A Member's Annuity Starting Date is determined subject to the procedures set forth in Plan section 7.03. 1.10. Base Pay means an Employee's base salary or wage, determined before any -------- salary-reduction agreement under Code section 401(k) or Code section 125, during the Payroll Period in which the Employee contributes to the Plan. Pay shall include all overtime, shift premium pay and similar amounts (as determined in accordance with the Company's established payroll and compensation policies) but shall not include bonuses, incentive pay or other special payments or allowances. The annual Base Pay of each Member taken into account under the Plan for any Plan Year must not exceed the statutory limits of Code section 401(a)(17) for such year. For -3-

Savings Plan For Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 Plan Years beginning on and after January 1, 1994, the limit is $150,000 as adjusted. The cost-of-living adjustment in effect for a calendar year applies to any determination period beginning in such calendar year. 1.11. Beneficiary means any person designated by a Member pursuant to Plan ----------- section 12.08 to receive any benefits which may be payable under this Plan on or after death. If a Member is married at the time he designates a Beneficiary under Plan section 12.08 or changes any such designation, his spouse must consent in writing to the designation or change in designation. The spouse's consent must be in writing, must acknowledge the effect of the Member's designation or change in designation, and must be witnessed by a notary public. If spousal consent is not obtained, such Member's Beneficiary shall be his spouse. If the Company is satisfied that spousal consent may not be obtained because the Member has no spouse, because the spouse cannot be located, or because of such other circumstances as applicable regulations may prescribe, the Member may name any Beneficiary he desires and from time to time change his designated Beneficiary without said Beneficiary's consent. If a Member does not designate a Beneficiary or if the designated Beneficiary should predecease the Member, then Beneficiary shall mean the first surviving class of the following successive preference Beneficiaries: the Member's (i) widow or widower; (ii) surviving children equally; (iii) surviving parents equally; (iv) surviving brothers and sisters equally; or (v) the executor(s) or administrator(s) of the Member's estate. Despite the preceding, to the extent provided in a Qualified Domestic Relations Order, Beneficiary means the spouse, former spouse, child or other dependent of a Member who is recognized by such order as having a right to receive all or a portion of any benefits payable under the Plan on behalf of the Member. 1.12. Board of Directors means the Board of Directors of Albemarle Corporation. ------------------ 1.13. Break in Service means, with respect to any Employee, any calendar year ---------------- during which the Employee is credited with five hundred (500) or fewer Hours of Service. 1.14. Code means the Internal Revenue Code of 1986, as amended. References to ---- specific sections of the Code shall include those sections and any comparable sections of future legislation that modify, amend, supplement, supersede or recodify such sections. 1.15. Committee means the Employee Savings Plan Committee provided for in Plan --------- section 9.04. 1.16. Company means Albemarle Corporation and all of its Affiliates, ------- subsidiaries and divisions except for those Affiliates, subsidiaries and divisions whose employees or segments thereof have not been designated to be included in this Plan. Where only a segment of an Affiliate's, subsidiary's or division's employees has been designated for coverage hereunder, "Company" shall apply to such Affiliate, subsidiary or division only as it relates to such entity's -4-

Savings Plan For Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 employees eligible for coverage. Any action required to be taken by the Company may be taken by the Board of Directors or by the Executive Committee of the Board of Directors. 1.17. Compensation means an Employee's compensation as defined in Code section ------------ 414(s) and includes any amount contributed by the Company pursuant to a salary- reduction agreement and which is not includible in the gross income of the Employee under Code section 125, 402(e)(3), 402(h) or 403(b). For Plan Years beginning after December 31, 1988, the annual Compensation of each Member taken into account for determining all benefits provided under the Plan for any Plan Year must not exceed the statutory limits of Code section 401(a)(17) for such year. For Plan Years beginning on or after January 1, 1994, the limit is $150,000 as adjusted. The cost-of-living adjustment in effect for a calendar year applies to any determination period beginning in such calendar year. 1.18. Contribution Percentage means, for purposes of measuring compliance with ----------------------- Code section 401(m), the average of the ratios for a specified group of Employees (calculated separately for each Employee in the group) of (a) the sum of the Matching Contributions and After-Tax Contributions allocated to the Account for each such Employee for the Plan Year, to (b) the Employee's Compensation for that Plan Year. As permitted under Treasury regulations, in computing the Contribution Percentage, the Committee may elect to take into account Pre-Tax Contributions, Special Contributions, and Discretionary Contributions allocated to an Employee's Account. The Contribution Percentage shall not include Matching Contributions that are forfeited to correct Excess Aggregate Contributions. 1.19. Defined Benefit Plan means a plan established and qualified under Code -------------------- section 401(a) or 403, except to the extent it is treated as a Defined Contribution Plan. 1.20. Defined Contribution Plan means a plan established and qualified under ------------------------- Code section 401(a) or 403 providing for an individual account for each participant therein and for payment of benefits based solely on the amount contributed to the participants' accounts and any income, expenses, gains, losses, realized and unrealized appreciation or depreciation and forfeitures which may be allocated to such accounts. 1.21. Discretionary Account means that portion of a Member's Account --------------------- attributable to Discretionary Contributions and with respect to a Member who is a Transferred Employee, any discretionary contributions allocated to his account under the Ethyl Plan. -5-

Savings Plan For Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 1.22. Discretionary Contribution means the Company's discretionary contribution -------------------------- described in Plan section 3.09. 1.23. Earnings means, for purposes of Plan section 1.33, Plan article VIII, and -------- Appendix A, for any relevant period, an individual's wages, salaries for personal services (such as professional services), and other amounts received from the Company for personal services actually rendered. These Earnings comprise, but are not limited to, commissions paid to salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, reimbursements, expense allowances, and other amounts permissibly included according to Treasury regulations as the base for computing statutory limits on annual benefits and annual additions. These Earnings do not mean deferred compensation, certain stock options, and other like distributions that receive special tax benefits and are excluded from the base for computing those statutory limits. For Plan Years beginning on or after January 1, 1998, Earnings include amounts deferred under a defined contribution plan pursuant to Code section 402(e)(3), amounts deferred under a welfare benefit plan (as defined in ERISA section 3(1)) pursuant to Code section 125, and amounts deferred under Code section 457 plan. When computed for any Limitation Year, these Earnings are those paid (or deemed paid if the Plan operates to provide benefits according to accrued Earnings) or made available to the individual within the Limitation Year. For purposes of determining whether an Employee is a Key Employee, Earnings must not exceed the statutory limits of Code section 401(a)(17) for such year. With respect to a Transferred Employee, the term Earnings also includes wages, salaries and other amounts received from Ethyl Corporation or an affiliate of Ethyl Corporation for personal services actually rendered. For Plan Years beginning after December 31, 1988, and solely for purposes of Plan section 1.33 and Appendix A, the Earnings of each Member taken into account under the Plan for any Plan Year must not exceed the statutory limits of Code section 401(a)(17) for such year. For Plan Years beginning on or after January 1, 1994, the limit is $150,000 as adjusted. The cost-of-living adjustment in effect for a calendar year applies to any determination period beginning in such calendar year. 1.24. Employee means any individual who is paid from the Company's payroll who -------- is classified as an Employee by the Company for federal income tax withholding purposes (whether or not such classifications are ultimately determined to be correct as a matter of law), including any Transferred Employee who was previously hired or rehired by Ethyl Corporation prior to January 1, 1989, on a temporary or casual basis. Employee does not include (a) any individual classified by the Company as an independent contractor, consultant, or Leased Employee (whether or not such classifications are ultimately determined to be correct as a matter of law), (b) any individual employed by the Company on a temporary or casual basis provided such individual is credited with fewer than 1,000 Hours of Service in his first twelve (12) months of employment or in any calendar year thereafter, beginning with the calendar year that contains the first anniversary of the individual's date of hire, and (c) any individual who was employed by the -6-

Savings Plan For Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 Company on March 1, 1994, is Highly Compensated and who irrevocably waived participation in the Plan. 1.25. Employee Benefits Section means the Employee Benefits Section of the ------------------------- Company in Baton Rouge, Louisiana. 1.26. ERISA means the Employee Retirement Income Security Act of 1974, as ----- amended. References to specific sections of ERISA shall include those sections and any comparable sections of future legislations that modify, amend, supplement, supersede or recodify such sections. 1.27. Ethyl means Ethyl Corporation and, where applicable, any other ----- corporation or entity that would have been considered an affiliate (as defined in Code section 414) of Ethyl Corporation on February 28, 1994. 1.28. Ethyl Plan means the Savings Plan For The Employees Of Ethyl Corporation. ---------- 1.29. Excess Aggregate Contribution means the excess of the aggregate amount of ----------------------------- the Matching and After-Tax Contributions (and any Pre-Tax, Special or Discretionary Contributions taken into account in computing the Contribution Percentage) actually made on behalf of Restricted 401(m) Employee for that Plan Year over the maximum amount of such contributions permitted under the limitations described in Plan section 3.11. To determine a Restricted 401(m) Employee's share of the Excess Aggregate Contributions attributable to a certain form of contribution, the Company first lists the Restricted 401(m) Employees in order of descending contribution amounts, as if on an individual basis. The Company then reduces the contributions attributable to each Restricted 401(m) Employee by dollar amounts as to a specific form of contribution according to the hierarchy provided in Plan section 4.09. All reductions possible or necessary within one category must occur before reductions within the next category may occur. 1.30. Excess Annual Additions means amounts that cannot be Annual Additions ----------------------- under the Plan for a Limitation Year because of a forfeiture allocation or a reasonable error in estimating a Member's Earnings or in estimating the amount of Pre-Tax Contributions that may be allocated to a Member's Pre-Tax Account or any other reason allowed by applicable Treasury regulations. 1.31. Excess Deferral means an elective deferral to the extent that it exceeds --------------- $7,000 (or such higher dollar limit as the Secretary of the Treasury announces at the same time and in the same manner as the cost-of-living adjustments applicable to the limitations under Code section 415(d)). For purposes of this Plan section, "elective deferral" refers to the sum of (a) any employer contribution under a qualified cash-or-deferred arrangement to the extent not includible in gross income for the taxable year under Code section 402(e)(3) (determined without regard to Code section 402(g)); -7-

Savings Plan For Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (b) any employer contribution to a simplified employee pension cash or deferred arrangement to the extent not includible in gross income for the taxable year under Code section 402(h)(1)(B) (determined without regard to Code section 402(g)) or, effective January 1, 1997, a savings incentive match plan for employees of small employers, as described in Code section 408(p)(2); and (c) any employer contribution to purchase an annuity contract under Code section 403(b) under a salary-reduction agreement (within the meaning of Code section 3121(a)(5)(D)). Any deferrals that, but for Code sections 402(e)(3), 402(h)(1)(B) and 403(b), would have been received or treated as received by an individual for the taxable year are to be treated as elective deferrals for such year. 1.32. Excess Pre-Tax Contribution means the excess of the aggregate amount of --------------------------- Pre-Tax Contributions actually paid over to the trust on behalf of Restricted 401(k) Employee for that Plan Year, over the maximum amount of such contributions permitted under the limitations on Actual Deferral Percentages described in Plan section 3.07. For Plan Years beginning on or after January 1, 1997, to determine a Restricted 401(k) Employee's share of the Excess Pre-Tax Contribution, the Company first lists the Restricted 401(k) Employees in the order of descending Pre-Tax Contributions, as if on an individual basis. The Company then reduces the Pre-Tax Contributions attributable to all Restricted 401(k) Employees who deferred the highest dollar amount. If the needed reduction will cause a reduction below the second highest dollar amount, all Restricted 401(k) Employees who deferred that second dollar amount and those whose contributions have been reduced are reduced by dollar increments as needed. If the needed reduction will cause a reduction below the next lower dollar level, the same procedure is followed as to all Restricted 401(k) Employees who deferred that dollar amount and those whose contributions have already been reduced. The Company must repeat this procedure until all Excess Pre-Tax Contributions have been distributed. 1.33. Highly Compensated for Plan Years beginning on or after January 1, 1997, ------------------ means: (1) a common law employee of an Affiliate who was at any time during the Plan Year or the preceding Plan Year a five percent owner (as defined in Code section 416(i)(1)); or (2) a common law employee of an Affiliate who received compensation, as determined under Code section 414(q)(7), of $80,000 (as adjusted from time to time to reflect changes in the cost of living in accordance with the Code and applicable regulations) for the preceding Plan Year and, at the discretion of the Administrator, was during such preceding Plan Year among the top twenty percent (20%) of all employees of Affiliates in Earnings. -8-

Savings Plan For Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 1.34. Hours of Service means each hour for which an Employee is directly or ---------------- indirectly paid or entitled to payment by the Company. In determining an Employee's Hours of Service the following rules shall apply: (a) Hours of Service credited to an Employee for the performance of services shall be credited to the Employee in the calendar year in which such services are performed; (b) Hours of Service credited to an Employee for periods during which no services are performed shall be credited on the basis of the number of hours in such Employee's regular work schedule for the period in which such nonperformance occurs or on the basis of eight (8) hours per day or forty (40) hours per week, if greater. Such hours shall be credited in the calendar year covered by the Employee's regular work schedule during the period of nonperformance; (c) An Hour of Service shall be credited to an Employee for each hour for which back pay, irrespective of mitigation of damages, is awarded or agreed to by the Company, to the extent it has not been otherwise credited hereunder. Each such Hour of Service shall be credited to the Employee in the calendar year to which the award or agreement for back pay pertains; (d) No more than five hundred and one (501) Hours of Service may be credited with respect to any one period of nonperformance of services if the provisions of this Plan section would require such hours to be credited to periods falling after the Employee's termination of employment, or the expiration of any payments he is receiving under any temporary disability plan maintained by the Company, if later; (e) No Hours of Service shall be credited with respect to any payments an Employee receives solely by reason of applicable unemployment compensation laws, reimbursement of expenses, travel and expense allowances or any other similar payment. Hours of Service with respect to workmen's compensation payments shall only be credited up to the maximum period the recipient would be entitled to disability benefits for a nonoccupational disability under any temporary disability plan providing such benefits which is maintained by the Company and in which he participates; (f) No Hours of Service shall be credited under subsection (b) or (c) for a period in which an Employee is credited with Hours of Service for the performance of services equal to his regular work schedule for such period, nor shall Hours of Service be credited under such items for a period of nonperformance of services in excess of the greater of (i) the amount such Employee would have received had he been performing services during such period in accordance with his regular work schedule or (ii) eight (8) hours per day or forty (40) hours per week as may be applicable; (g) For all purposes of the Plan, Hours of Service for each Employee shall be accumulated on a calendar year basis. Should the total number of Hours of Service completed by -9-

Savings Plan For Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 an Employee through the last day of a calendar year be other than an integral number, the fractional Hour of Service shall be credited to the Employee as one (1) Hour of Service; (h) Nothing in this Plan section shall be construed as denying an Employee an Hour of Service if credit for such Hour of Service is required by federal law, in which case, the nature and extent of such credit shall be determined under such law; (i) Notwithstanding any other provision of this Plan section to the contrary, each Employee on a salaried payroll shall be credited with ninety-five (95) Hours of Service for each semi-monthly payroll period in which he would receive credit for an Hour of Service in lieu of any other Hours of Service which would otherwise be credited to such semi-monthly payroll period hereunder; (j) Notwithstanding any other provision of this Plan section to the contrary, for purposes of determining whether an Employee has incurred a Break in Service, Hours of Service shall be credited for a Maternity or Paternity Leave of Absence on the basis of the number of hours in such Employee's normal work schedule for the period in which the leave of absence occurs or, in any case in which such hours cannot be determined, eight hours per day of Maternity or Paternity Leave of Absence; provided that the total number of Hours of Service credited under this subsection cannot exceed five hundred and one (501). Such Hours of Service shall be credited (i) in the calendar year in which the absence began if necessary to prevent a Break in Service in that year, or (ii) in all other cases, in the following calendar year. "Maternity or Paternity Leave of Absence" means an absence by reason of the pregnancy of the individual, by reason of the birth of a child of the individual, by reason of the placement of a child with the individual in connection with the adoption of the child by that individual, or for purposes of caring for a child for a period beginning immediately following the birth or placement of the child; (k) Hours of Service completed in the employ of an Affiliate (including any Hours of Service completed before such Affiliate was acquired by the Company if and to the extent authorized by the Board of Directors) shall be considered as Hours of Service completed in the employ of the Company and all Hours of Service completed as an employee shall be taken into account as if completed as an Employee. (l) In calculating a Member's Years of Service for purposes of determining the nonforfeitability of a Member's Account under the Plan, a Member shall be deemed to have earned a number of Hours of Service equal to the product of (i) the number of payroll periods (or a fraction thereof) that the Member was absent from employment with the Company due to Military Leave, and (ii) the average Hours of Service per payroll period the Member earned during the twelve (12) month period immediately preceding the Military Leave (or, if shorter, the period of the Member's employment with the Company immediately preceding the Military Leave). -10-

Saving Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (m) Despite the preceding, solely for purposes of determining whether a Break in Service for participation or vesting purposes has occurred during a computation period, an individual who takes unpaid leave under the Family and Medical Leave Act on or after August 5, 1993, will receive credit for the Hours of Service that normally would have been credited to such individual but for such leave. The total number of Hours of Service that can be credited under this subsection cannot exceed five hundred and one (501), and such Hours of Service shall be credited (i) in the computation period in which the absence began if necessary to prevent the Break in Service in that period, or (ii) in all other cases, in the following computation period. Any individual who receives credit for Hours of Service for a Maternity or Paternity Leave of Absence will not receive credit for those same Hours of Service under this Plan section. (n) With respect to a Transferred Employee, Hours of Service shall include such individual's hours of service recognized under the terms of the Ethyl Plan as of the date that the Transferred Employee became employed by the Company. 1.35. Information Date means the date that the Member receives the information ---------------- required by Plan section 7.03. 1.36. Investment Fund means one of the investment media that the Board of --------------- Directors of Albemarle Corporation or its delegatees select and announce as being a permissible investment vehicle in which a Member's Account may be invested. The Investment Funds under the Plan are listed in Exhibit III. 1.37. Leased Employee means any person who is not otherwise an Employee and --------------- who, pursuant to an agreement between the Company and any other person (a "leasing organization"), has performed services for the Company, or for the Company and related persons (determined in accordance with Code section 414(n)(6)), on a substantially full time basis for a period of at least one year, and such services are performed under primary direction or control of the Company, or of the Company and related persons (determined in accordance with Code section 414(n)(6)). 1.38. Limitation Year means the calendar year. --------------- 1.39. Matching Account means that portion of a Member's Account attributable to ---------------- Matching Contributions and with respect to a Member who is a Transferred Employee, any matching contributions that were allocated to his account under the Ethyl Plan. 1.40. Matching Contribution means the Company's contribution described in Plan --------------------- section 3.08 and Plan section 3.11(c). 1.41. Member means an eligible Employee whose completed application in the ------ prescribed form has been received by the Employee Benefits Section or its delegatees and former Employees who have an undistributed vested Account balance remaining in the Plan. -11-

Saving Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 1.42. Military Leave means the performance of duty on a voluntary or -------------- involuntary basis in a Uniformed Service under competent authority and includes active duty, active duty for training, initial active duty for training, inactive duty training, full-time National Guard duty, a period for which a person is absent from a position of employment for the purpose of an examination to determine the fitness of the person to perform such duty, and any other absence qualifying as "service in the uniformed services" within the meaning of USERRA. Notwithstanding the foregoing, Military Leave does not include service in a Uniformed Service that terminates as a result of separation of the Member from such Uniformed Service under other than honorable conditions, as set forth in USERRA. 1.43. Normal Retirement Age means age sixty-five (65). --------------------- 1.44. Payroll Period means the interval of employment for which a Member's -------------- periodic pay checks are normally issued. 1.45. Permanent and Total Disability means the physical or mental incapacity of ------------------------------ an Employee which qualifies him for benefits under one of the Company's long- term disability benefit plans or, for any Employee who is not eligible to participate in one of the Company's long-term disability benefit plans, the physical or mental incapacity which qualifies him for disability benefits under the Defined Benefit Pension Plan in which he participates. 1.46. Plan means the Savings Plan For The Employees Of Albemarle Corporation. ---- 1.47. Plan Year means the annual period beginning on January 1st and ending on --------- the following December 31st. 1.48. Pre-Tax Account means that portion of a Member's Account attributable to --------------- the Company's Pre-Tax Contribution and with respect to a Member who is a Transferred Employee, pre-tax contributions allocated to his account under the Ethyl Plan. 1.49. Pre-Tax Contribution means the Company's contribution caused by a -------------------- Member's Pre-Tax Election pursuant to the terms of Plan section 3.03. Pre-Tax Contributions can consist of (i) Regular Pre-Tax Contributions, which result in a Matching Contribution and (ii) Additional Pre-Tax Contributions, which do not result in a Matching Contribution. 1.50. Pre-Tax Election means a Member's election, prior to the time he receives ---------------- the Base Pay to which such election applies, to defer part of such Base Pay and to cause the Company to make a Pre-Tax Contribution to the Plan equal to the amount deferred. 1.51. Qualified Domestic Relations Order means a judgment, decree, order or ---------------------------------- approval of a property settlement agreement, that (a) relates to the provision of child support, alimony payments or marital property rights to an Alternate Payee; -12-

Saving Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (b) is made pursuant to a state domestic relations or community property law; (c) creates or recognizes the right of an Alternate Payee to receive all or a portion of the benefit payable with respect to the Member under this Plan or that assigns to an Alternate Payee the right to receive all or a portion of the benefits payable to the Member under the Plan; (d) clearly specifies (i) the name and last known mailing address (if available) of the Member and the name and mailing address of each Alternate Payee, unless the Company has reason to know the address independently of the order; (ii) the amount or percentage of the Member's benefits to be paid by the Plan to each Alternate Payee or the manner in which such amount or percentage is to be determined; (iii) the number of payments or period to which the order applies; and (iv) the name of the Plan to which the order applies; (e) does not require the Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan; (f) does not require the Plan to provide increased benefits; and (g) does not require the payment of benefits to an Alternate Payee that are required to be paid to another Alternate Payee under another order determined previously to be a Qualified Domestic Relations Order. A domestic relations order entered before January 1, 1985, is a Qualified Domestic Relations Order if payment of benefits pursuant to the order have begun as of such date, regardless of whether the order satisfies the requirements of Code section 414(p). A domestic relations order entered before January 1, 1985, may be treated as a Qualified Domestic Relations Order if payment of benefits pursuant to the order have not begun as of such date, regardless of whether the order satisfies the requirements of Code section 414(p). 1.52. Required Beginning Date means, until December 31, 1996, April 1 of the ----------------------- calendar year following the calendar year in which a Member attains age seventy and one-half (70 1/2). Effective January 1, 1997, Required Beginning Date means April 1 of the calendar year following the later of (i) the calendar year in which a Member separates from service, or (ii) the calendar year in which a Member attains age seventy and one-half (70 1/2). Notwithstanding the preceding, the Required Beginning Date of a Member who is a five percent owner (as defined in Code section 416(i)(1)), of any Affiliate, is April 1 of the calendar year following the calendar year in which such Member attains age seventy and one- half (70 1/2). 1.53. Restricted 401(k) Employee, for purposes of measuring compliance with -------------------------- Code section 401(k), means an Employee who is eligible under the terms of the Plan (without regard to any suspension due to a distribution or election not to participate or by reason of the limitations of Code section 415) to make a Pre- Tax Election for all or part of the Plan Year and who is a Highly Compensated Employee. -13-

Saving Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 1.54. Restricted 401(m) Employee, for purposes of measuring compliance with -------------------------- Code section 401(m), means an Employee who is eligible under the terms of the Plan (without regard to any suspension due to a distribution or election not to participate or by reason of the limitations of Code section 415) to make an After-Tax Election (or a Pre-Tax Election, if the Plan takes Pre-Tax Contribution allocations into account in determining Contribution Percentages) for all or part of the Plan Year and who is a Highly Compensated Employee. 1.55. Rollover Account means the portion of a Member's Account attributable to ---------------- Rollover Contributions. 1.56. Rollover Contribution means amount transferred to the Plan pursuant to --------------------- Plan section 3.10. 1.57. Special Contribution means the Company's contribution pursuant to Plan -------------------- section 3.09 on behalf of Unrestricted 401(k) Employees as may be necessary to comply with the nondiscrimination provisions of Code sections 401(k)(3) and 401(a)(4). Any Special Contribution will be treated as an Unrestricted 401(k) Employee's Pre-Tax Contribution. 1.58. Transferred Employee means an Employee (a) who was employed by Ethyl -------------------- Corporation on February 28, 1994, terminated employment with Ethyl Corporation after such date and prior to February 28, 1995, and who was employed by the Company immediately following his termination of employment with Ethyl Corporation and (b) whose account balance under the Ethyl Plan was transferred to the Trust Fund in a direct trustee-to-trustee transfer of assets and liabilities. 1.59. Trust Agreement means a Trust Agreement entered into between the Company --------------- and a Trustee in conjunction with the Plan. 1.60. Trust Fund means the assets of the Plan held by the Trustee. ---------- 1.61. Trustee means a bank or trust company designated by the Board of ------- Directors. 1.62. Uniformed Service means the Armed Forces; the Army National Guard and the ----------------- Air National Guard when engaged in active duty training, inactive duty training, or full-time national Guard duty; the commissioned corps of the Public Health Service; and any other category of persons designated by the President of the United States in time of war or emergency. 1.63. Unrestricted 401(k) Employee means, for the purposes of measuring ---------------------------- compliance with Code section 401(k), an Employee who is eligible under the terms of the Plan (without regard to any suspension due to a distribution or election not to participate or by reason of the limitations of Code section 415) to make a Pre-Tax Election for all or part of the Plan Year and who is not a Highly Compensated Employee. -14-

Saving Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 1.64. Unrestricted 401(m) Employee means, for purposes of measuring compliance ---------------------------- with Code section 401(m), an Employee who is eligible under the terms of the Plan (without regard to any suspension due to a distribution or election not to participate or by reason of the limitations of Code section 415) to make an After-Tax Election (or a Pre-Tax Election, if the Plan takes Pre-Tax Contribution allocations into account in determining Contribution Percentages) for all or part of the Plan Year and who is not a Highly Compensated Employee. 1.65. USERRA means the Uniformed Services Employment and Reemployment Rights ------ Act of 1994. 1.66. Valuation Date means any business day of the Plan Year that the United -------------- States financial markets are open. 1.67. Year of Service means (a) a calendar year in which an Employee completes --------------- 1,000 or more Hours of Service and (b) to the extent an Employee's Years of Service are not recognized under (a) and with respect to Transferred Employees, all years of service recognized under the Ethyl Plan. -15-

Saving Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE II ELIGIBILITY AND MEMBERSHIP -------------------------- 2.01. Eligibility Requirements ------------------------ (a) Each individual who is a Member of the Plan on October 31, 1997, shall continue to be a Member of the Plan on and after that date, subject to the remaining provisions of the Plan. (b) Each other Employee shall be eligible to become a Member of the Plan on the date that is the later of (1) his date of employment as a regular Employee; (2) if he is represented by a collective bargaining representative, the effective date specified in the agreement between the Company and the applicable representative permitting Employees so represented to become Members, provided, however, that any such Employees shall become Members of the Plan subject to the terms and conditions of such agreement between the Company and the collective bargaining representative with any special terms set forth in an exhibit attached to and made part of the Plan; or (3) November 1, 1997. 2.02. Changes in Employment Status ---------------------------- If an individual who is not an Employee is reclassified as an eligible Employee, he shall be eligible to become a Member of the Plan on the date that is the later of (1) his date of reclassification, (2) if he is represented by a collective bargaining representative, the effective date specified in the agreement between the Company and the applicable representative permitting Employees so represented to become Members, provided, however, that any such Employees shall become Members of the Plan subject to the terms and conditions of such agreement between the Company and the collective bargaining representative with any special terms set forth in an exhibit attached to and made part of the Plan, or (3) November 1, 1997. 2.03. Membership in the Plan ---------------------- An Employee who has satisfied the conditions of eligibility set forth in Plan section 2.01(b) may become a Member at the beginning of a Payroll Period in accordance with Plan section 3.01 and Plan section 3.03. Once an Employee has become a Member, he shall remain a Member until his vested Account balance is distributed to him. -16

Saving Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 2.04. Reemployment ------------ (a) A Member who terminates his employment with the Company and its Affiliates and is reemployed as an Employee may become a Member in the Plan immediately after his re-employment, subject to the provisions of Plan section 2.03. (b) A Transferred Employee who was employed by the Company on a temporary or casual basis after February 28, 1994, who later terminates employment and is reemployed by the Company on a temporary or casual basis, shall not be treated as an Employee upon his reemployment. -17-

Saving Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE III CONTRIBUTIONS ------------- 3.01. After-Tax Contributions ----------------------- (a) Each eligible Employee may make an initial After-Tax Election designating a percentage of his Base Pay for each Payroll Period as a Regular After-Tax Contribution or as an Additional After-Tax Contribution. The percentage designated in the After-Tax Election may range from a minimum of one percent (1%) to a maximum of fifteen percent (15%), determined in even multiples of one percent (1%); provided, however, that (i) the elected percentage for a Payroll Period for a Regular After-Tax Contribution cannot exceed ten percent (10%) of an Employee's Base Pay for a Payroll Period, (ii) the elected percentage for a Payroll Period for a Regular After-Tax Contribution, when added to his Pre-Tax Election percentage in effect under Plan section 3.03 for that same Payroll Period cannot exceed ten percent (10%) of his Base Pay for that Payroll Period, and (iii) for those Employees eligible to make Additional After- Tax Contributions, the elected percentage for a Payroll Period for both a Regular After-Tax Contribution and an Additional After-Tax Contribution, when added to such Employee's Pre-Tax Election percentage in effect under Plan section 3.03 for that same Payroll Period cannot exceed fifteen percent (15%) of such Employee's Base Pay for that Payroll Period. (b) An initial After-Tax Election shall be made as provided in Plan section 2.03. Members' After-Tax Contributions will be made by payroll deduction. Members' After-Tax Contributions shall be transferred by the Company to the Trustee as promptly as practicable after each Payroll Period. (c) A Member's After-Tax Contribution Election will continue to be effective until changed pursuant to Plan section 3.04 or suspended pursuant to Plan sections 3.05 and 3.06. All After-Tax Elections are subject to the adjustments authorized in Plan section 3.11. 3.02. Pre-Tax Contributions --------------------- The Company's Pre-Tax Contribution for a Payroll Period is the total of the Pre-Tax Elections made by Members during that Payroll Period and allowed according to Plan section 3.07. Pre-Tax Contributions shall be transferred by the Company to the Trustee as promptly as practicable after each Payroll Period but in no event later than the 15th business day of the month following the month in which the Member would have received the Base Pay in cash. A Member may cause a Pre-Tax Contribution for himself only with regard to Base Pay that is deferred according to a Pre-Tax Election. The Company's Pre-Tax Contribution on behalf of any Member may not result in elective deferrals under this Plan for any Member of more than $7,000 (or such dollar amount as the Secretary of the Treasury announces at the same time and in the same manner as the cost-of-living adjustments applicable to limitations under Code section 415(d)) in any calendar year. -18-

Saving Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 3.03. Pre-Tax Elections ----------------- (a) An eligible Employee may make an initial Pre-Tax Election designating a percentage of his unpaid Base Pay to be made as a Regular Pre-Tax Contribution or, to the extent that such eligible Employee is a non-Highly Compensated Member, as an Additional Pre-Tax Contribution by way of an elective deferral for a Payroll Period. The percentage designated in the Pre-Tax Election may range from a minimum of one percent (1%) to a maximum of fifteen percent (15%), determined in even multiples of one percent (1%); provided, however, that (i) the elected percentage for a Payroll Period for a Regular Pre-Tax Contribution cannot exceed ten percent (10%) of an Employee's Base Pay for a Payroll Period, (ii) for those Employees not eligible to make Additional Pre-Tax Contributions, the elected percentage for a Payroll Period for a Regular Pre-Tax Contribution, when added to his After-Tax Election percentage in effect under Plan section 3.01 for that same Payroll Period, cannot exceed ten percent (10%) of such Employee's Base Pay for that Payroll Period, and (iii) for those Employees eligible to make Additional Pre-Tax Contributions, the elected percentage for a Payroll Period for both a Regular Pre-Tax Contribution and an Additional Pre-Tax Contribution, when added to such Employee's After-Tax Contribution percentage, in effect under Plan section 3.01 for that same Payroll Period, cannot exceed fifteen percent (15%) of such Employee's Base Pay for that Payroll Period. If a non-Highly Compensated Member elects to make an Additional Pre-Tax Contribution for a Plan Year and is later determined to be Highly Compensated for the current Plan Year based on completion of compensation data for the prior Plan Year, the Administrator has the authority to suspend such Member's Additional Pre-Tax Contributions for the remainder of the Plan Year in order to avoid violation of the nondiscrimination provisions of Code section 401(k)(3) described in Plan section 3.07. (b) An initial Pre-Tax Election shall be submitted as provided in Plan section 2.03. (c) A Member's Pre-Tax Election will continue to be effective until changed pursuant to Plan section 3.04 or suspended pursuant to Plan sections 3.05 and 3.06. All Pre-Tax Elections are subject to the adjustments authorized in Plan section 3.07. 3.04. Changes in After-Tax and Pre-Tax Elections ------------------------------------------ A Member may change the percentage designated in an After-Tax or Pre-Tax Election, within the limits prescribed by Plan sections 3.01 and 3.03, at the beginning of a Payroll Period following the receipt of the Member's instructions to change his After-Tax or Pre-Tax Election. 3.05. Voluntary Suspension of After-Tax and Pre-Tax Elections ------------------------------------------------------- A Member may suspend his After-Tax or Pre-Tax Election, or both, effective at the beginning of a Payroll Period following the receipt of the Member's instructions to suspend his After-Tax or Pre-Tax Election. A Member may make a new After-Tax or Pre-Tax Election to be -19-

Saving Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 effective at the beginning of the first Payroll Period after the Member's instructions to make a new After-Tax or Pre-Tax Election. 3.06. Required Suspension of After-Tax and Pre-Tax Elections ------------------------------------------------------ A Member's After-Tax and Pre-Tax Elections under the Plan shall be suspended for any Payroll Period, (a) with respect to his After-Tax Election, if for such period the amount of Base Pay earned by him is insufficient to pay his designated After-Tax Contribution to the Plan, after all other authorized deductions have been made; (b) with respect to both his Pre-Tax and After-Tax Elections, if for such period, in the case of an Employee represented by a collective bargaining representative, there is no agreement extending to such Employee the right to make contributions under this Plan between said representative and the Company; (c) with respect to his Pre-Tax Election, if for such period he is temporarily suspended from participation in the Plan due to a withdrawal under Plan section 7.06 or with respect to both his Pre-Tax and After-Tax Elections, as applicable, due to the limitations of Plan section 3.02, 3.07 or 3.11; or (d) with respect to both his Pre-Tax and After-Tax Elections, if for such period his employment status has changed so that he is no longer an Employee. 3.07. Pre-Tax Contribution Limitations ---------------------------------- (a) The Plan is intended to qualify as a cash-or-deferred arrangement according to Code section 401(k), and all Plan and Trust Agreement provisions must be construed to facilitate that qualification. (b) In no event may the Company allow a Pre-Tax Contribution to be made for or allocated to a Member if that allocation would cause the Plan to violate the limitations of Code section 415 or the nondiscrimination prohibitions of Code section 401(a)(4). If a Member makes a Pre-Tax Election that produces an Excess Deferral for that Member, the Company may cause that Member's Excess Deferrals to be allocated and distributed in accordance with Plan section 4.07. (c) For Plan Years beginning on or after January 1, 1997, this subsection's table determines the Excess Pre-Tax Contributions. Any amounts that are allocated as Pre-Tax Contributions for the Plan Year and that exceed the Restricted 401(k) Employees' ADP allowances in the table are Excess Pre-Tax Contributions for the Plan Year. As described in Code section 401(k)(8)(B)(ii) and in this Plan's definition of Excess Pre-Tax Contributions, one Restricted 401(k) Employee's proportionate part of a Plan Year's Excess Pre-Tax Contributions -20-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 is the amount that would not have been part of his Pre-Tax Contribution allocation for the Plan Year if the Plan Year's Excess Pre-Tax Contribution had been eliminated by reducing each Restricted 401(k) Employee's Pre-Tax Contribution allocation in the order of the Restricted 401(k) Employees' Pre-Tax Contributions, beginning with the highest of those individual Pre-Tax Contributions. Prior Plan Year ADP Current Plan Year ADP Unrestricted 401(k) Restricted 401(k) Employees as a group is Employees as a group is ----------------------- ----------------------- Less than 2% 2.0 times Unrestricted 401(k) Group's Prior Plan Year ADP 2% to 8% Unrestricted 401(k) Group's Prior Plan Year ADP plus 2 percentage points More than 8% 1.25 times Unrestricted 401(k) Group's Prior Plan Year ADP The point spread indicated as permissible when the ADP for the Unrestricted 401(k) Employees as a group is between zero percent (0%) and eight percent (8%) is automatically reduced to the extent necessary to comply with any Treasury regulations promulgated pursuant to Code section 401(m)(9), such as regulations to prevent the multiple use of that alternative limitation for any Highly Compensated Employee. (d) For the 1997 Plan Year only, the Company may use current year data to compare the ADP for Restricted 401(k) Employees and Unrestricted 401(k) Employees without making the election referred to in the next sentence. Notwithstanding the preceding for Plan Years beginning on or after January 1, 1998, the Company may elect to use current year data when comparing the ADP for Restricted 401(k) Employees and Unrestricted 401(k) Employees, but this election, once made, may only be changed as provided by the Secretary of the Treasury. (e) To meet the limitations of this Plan section, to avoid discrimination prohibited by Code section 401(a)(4), to prevent the creation of Excess Pre-Tax Contributions for purposes of Code section 401(k) or Excess Aggregate Contributions for purposes of Code section 401(m), or, if it is otherwise necessary to do so, to preserve the Plan's status as a qualified plan or to preserve the Plan's Pre-Tax Contribution features as a qualified cash-or- deferred arrangement according to Code section 401(k), the Company may adjust or reject altogether any Member's Pre-Tax Election or the Company may make a Special Contribution for the benefit of designated Unrestricted 401(k) Employees. The Company also may reduce any Member's Pre-Tax Election to prevent that Member from causing Excess Deferrals to his Account. -21-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (f) The Actual Deferral Percentage for any Member who is a Restricted 401(k) Employee for the Plan Year and who participates in two or more arrangements described in Code section 401(k) that are maintained by an Affiliate, shall be determined as if all Pre-Tax Contributions allocated to his Account are made under a single arrangement. If a Highly Compensated Employee participates in two or more arrangements described in Code section 401(k) that are maintained by an Affiliate and that have different Plan Years, all such arrangements ending with or within the same calendar year shall be treated as a single arrangement. Notwithstanding the foregoing, certain plans shall be treated as separate if mandatorily disaggregated under regulations under Code section 401(k). (g) In the event that this Plan satisfies the requirements of Code sections 401(k), 401(a)(4) or 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such Code sections only if aggregated with this Plan, then this section shall be applied by determining the Actual Deferral Percentage of Members as if all such plans were a single plan; provided, however, that plans may be aggregated in order to satisfy Code section 401(k) only if they have the same Plan Year. 3.08. Company Matching Contributions ------------------------------ Subject to the limitations of Plan article VIII and unless otherwise specified in an agreement between the Company and a collective bargaining representative as described in Plan section 2.01(b), the Company shall contribute each Payroll Period on behalf of each contributing Member an amount equal to fifty percent (50%) of the first ten percent (10%) of each Member's After-Tax Contributions deducted for that Payroll Period pursuant to Plan section 3.01 and fifty percent (50%) of the first ten percent (10%) of each Member's Pre-Tax Contribution allocations for that Payroll Period. The Company will pay its contributions to the Trustee concurrently with the transfer to the Trustee of Members' After-Tax Contributions. If Member After-Tax Contributions and Pre-Tax Elections are suspended for any Payroll Period, Company Matching Contributions shall also be suspended for such Payroll Period. The Company shall not make a Matching Contribution based on non-Highly Compensated Members' Additional After-Tax Contributions or Additional Pre-Tax Contributions. 3.09. Company Discretionary Contributions and Special Contributions ------------------------------------------------------------- (a) The Company may make an additional Discretionary Contribution to the Plan for any Plan Year. Discretionary Contributions shall be allocated in accordance with Plan section 4.05(a) depending on whether they constitute additional Matching Contributions or other Discretionary Contributions. (b) The Company may make a Special Contribution to the Plan for any Plan Year on behalf of Unrestricted 401(k) Employees as may be necessary to comply with the nondiscrimination provisions of Code sections 401(k)(3) and 401(a)(4). Any Special -22-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 Contribution will be treated as an Unrestricted 401(k) Employee's Pre-Tax Contribution and will be allocated in accordance with Plan section 4.05(b). 3.10. Rollover Contributions ---------------------- The vested account balance of a Member in a Defined Contribution Plan other than the Plan, or a Defined Benefit Plan or an individual retirement account established pursuant to Code section 408(a) or (b) holding only assets of a Defined Contribution Plan or Defined Benefit Plan (a "Qualified Plan"), may be transferred directly to the Member's Rollover Account in the Plan provided that such contribution satisfies the requirements of Code section 402(c). The Administrator shall have the authority to verify that such Rollover Contribution is transferred from an Eligible Retirement Plan, as defined in Plan section 7.08(b) and may, in its discretion, reject all or any part of a contribution that the Administrator determines is not an Eligible Rollover Distribution from a Qualified Plan. 3.11. Matching and After-Tax Contribution Limitations ------------------------------------------------- (a) This subsection's table determines Excess Aggregate Contributions. Any amounts that are allocable to Matching Accounts and After-Tax Accounts for the Plan Year and that exceed the Restricted 401(m) Employees' Contribution Percentage allowances in the table are Excess Aggregate Contributions for the Plan Year. As described in Code section 401(m)(6)(B)(ii) and in this Plan's definition of Excess Aggregate Contributions, one Restricted 401(m) Employee's proportionate part of a Plan Year's Excess Aggregate Contributions is the amount that would not have been part of his Matching Contribution and After-Tax Contribution allocation for the Plan Year if the Plan Year's Excess Aggregate Contribution had been eliminated by reducing each Restricted 401(m) Employee's Matching Contribution and After-Tax Contribution allocation in the order of descending dollar amount of Matching Contributions and After-Tax Contributions for the Plan Year. <TABLE> <CAPTION> Prior Plan Year Current Plan Year Contribution Percentage Contribution Percentage of Unrestricted 401(m) of Restricted 401(m) Employees as a group is Employees as a group is ----------------------- ----------------------- <S> <C> Less than 2% 2.0 times Unrestricted 401(m) Group's Prior Plan Year Contribution Percentage 2% to 8% Unrestricted 401(m) Group's Prior Plan Year Contribution Percentage plus 2 percentage points </TABLE> -23-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 <TABLE> <CAPTION> Prior Plan Year Current Plan Year Contribution Percentage Contribution Percentage of Unrestricted 401(m) of Restricted 401(m) Employees as a group is Employees as a group is ----------------------- ----------------------- <S> <C> More than 8% 1.25 times Unrestricted 401(m) Group's Prior Plan Year Contribution Percentage </TABLE> The point spread indicated as permissive when the Contribution Percentage for the Unrestricted 401(m) Employees as a group is between zero percent (0%) and eight percent (8%) is automatically reduced to the extent necessary to comply with any Treasury regulations promulgated pursuant to Code section 401(m)(9), such as regulations to prevent the multiple use of that alternative limitation for any Highly Compensated Employee. (b) For the 1997 Plan Year only, the Company may use current year data to compare the Contribution Percentage for Restricted 401(k) Employees and Unrestricted 401(k) Employees without making the election referred to in the next sentence. Notwithstanding the preceding for Plan Years beginning on or after January 1, 1998, the Company may elect to use current year data when comparing the Contribution Percentage for Restricted 401(k) Employees and Unrestricted 401(k) Employees, but this election, once made, may only be changed as provided by the Secretary of the Treasury. (c) To meet the limitations of this Plan section, to avoid discrimination prohibited by Code section 401(a)(4), to prevent the creation of Excess Aggregate Contributions for purposes of Code section 401(m), or, if it is otherwise necessary to do so, to preserve the Plan's status as a qualified plan, the Company may adjust or reject altogether any Member's After-Tax Election or the Company may make an additional contribution to the Plan for a Plan Year for the benefit of designated Unrestricted 401(m) Employees. This additional contribution will be treated for all purposes as a Matching Contribution and will be allocated (as determined by the Company for that Plan Year) either as a designated percentage of such Employees' After-Tax Contributions or Pre-Tax Contribution allocations for that Plan Year or on a pro rata basis according to their Compensation for the Plan Year. (d) For purposes of this Plan section, the Contribution Percentage for any Member who is a Restricted 401(m) Employee and who is eligible to have After-Tax and Matching Contributions allocated to his Account under two or more plans described in Code section 401(a), or arrangements described in Code section 401(k), that are maintained by an Affiliate, shall be determined as if the After-Tax and Matching Contributions were made under each plan. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different plan years, all cash or deferred arrangements ending with or within the same calendar year shall be treated as a single arrangement. Notwithstanding the -24-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 foregoing, certain plans shall be treated as separate if mandatorily disaggregated under regulations under Code section 401(m). (e) In the event that the Plan satisfies requirements of Code section 401(m), 401(a)(4) or 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of Code section 410(b) only if aggregated with the Plan, then this Plan section shall be applied by determining the Contribution Percentages of Members as if all such plans were a single plan; provided, however, that plans may be aggregated in order to satisfy Code section 401(m) only if they have the same Plan Year. 3.12. USERRA Contributions -------------------- (a) Restoration Contributions. A Member who is reemployed by the ------------------------- Company after a period of Military Leave and whose reemployment satisfies the provisions of USERRA shall be entitled to a Discretionary Company Contribution and a Matching Contribution equal to the amount the Company would have contributed on behalf of the Member had the Member not incurred Military Leave and had the Member's Pre-Tax Restoration Contributions and After-Tax Restoration Contributions actually been made during the period of Military Leave to which such Matching Contributions relate. Earnings and forfeitures shall not be considered in determining the Company's obligation under this Plan section. (b) After-Tax Restoration Contributions. During the Account ----------------------------------- Restoration Period, a Member may make After-Tax Restoration Contributions to the Plan totalling an amount not greater than the After-Tax Contributions the Member could have made to the Plan had the Member not incurred a period of Military Leave. After-Tax Restoration Contributions may be in addition to any other contributions, including After-Tax Contributions, that the Member may make to the Plan upon his or her return from Military Leave. The determination of Compensation shall be made in the same manner as described in subsection (c). (c) Pre-Tax Restoration Contributions. Pre-Tax Restoration --------------------------------- Contributions are contributions made to the Plan by the Company, at the election of the Member in lieu of cash Compensation and pursuant to a salary reduction election or other mechanism. A Member's Pre-Tax Restoration Contributions shall not exceed the amount of Base Pay that the Member could have deferred under the Plan during his or her Military Leave had the Member remained employed by the Company during the Military Leave. For purposes of determining the maximum amount of Pre-Tax Restoration Contributions, a Member shall be treated as having received Compensation equal to either (i) the Compensation the Member would have received during the period of Military Leave had the Member not incurred Military Leave, determined based on the rate of pay the Member would have received from the Company but for the absence during Military Leave, or (ii) if the Compensation the Member would have received during the period of Military Leave is not reasonably certain, the Member's average Compensation during the twelve (12) month period immediately preceding the Military Leave (or, if shorter, the period of employment immediately preceding the Military Leave). -25-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (d) Account Restoration. Notwithstanding any provision of the Plan to the ------------------- contrary and in addition to any other contributions to the Plan, a Member may cause Restoration Contributions to be made on his or her behalf only during the Account Restoration Period. (e) Account Restoration Period. The duration of a Member's Account -------------------------- Restoration Period shall equal the lesser of (i) the product of three and the duration of the Military Leave, and (ii) five (5) years. The Account Restoration Period commences on the date the Member becomes reemployed by a Company following Military Leave. -26-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE IV ALLOCATIONS ----------- 4.01. Establishment of Accounts ------------------------- (a) The Administrator shall establish and maintain a separate Account for each Member of the Plan. A Member's separate Account shall be divided, as applicable, into an After-Tax Account, a Pre-Tax Account, a Matching Account, a Discretionary Account and a Rollover Account. The Administrator must credit and debit all appropriate amounts, including credits or charges with its share of contributions, net earnings, realized and unrealized gains or losses of the applicable investment fund and distributions, to the applicable Account. (b) As required for appropriate record-keeping, the Administrator may establish and name additional Accounts or sub-accounts for each Member. (c) The Administrator must establish a suspense account whenever required by Plan article VIII. The suspense account is not a Member's Account, but it is credited with Trust Fund earnings and losses in the same way as a Member's Account is credited. 4.02. Allocations of After-Tax Contributions -------------------------------------- A Member's After-Tax Contributions for a Payroll Period shall be credited to the Member's After-Tax Account as soon as practicable following the end of that Payroll Period. 4.03. Allocations of Pre-Tax Contributions ------------------------------------ The Company's Pre-Tax Contributions on behalf of a Member for a Payroll Period shall be credited to the Member's Pre-Tax Account as soon as practicable following the end of that Payroll Period. 4.04. Allocation of Matching Contributions ------------------------------------ The Company's Matching Contribution on behalf of a Member for a Payroll Period shall be allocated to the Member's Matching Account as soon as practicable following that Payroll Period. 4.05. Allocation of Discretionary Contributions and Special Contributions ------------------------------------------------------------------- (a) For any Plan Year in which the Company makes a Discretionary Contribution designated as an additional Matching Contribution, such contribution will be allocated to the Matching Accounts of Unrestricted 401(m) Employees based on their Regular After-Tax Contributions or Regular Pre-Tax Contribution allocations for that Plan Year. Any other Discretionary Contribution will be allocated, as of the last Valuation Date of the Plan Year, to -27-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 Discretionary Accounts of designated Members who are not Highly Compensated Employees for such Plan Year based on the ratio of each such Employee's Compensation for the Plan Year to the total Compensation of all such Employees for the Plan Year. (b) For any Plan Year in which the Company makes a Special Contribution, such Contribution will be allocated to the Pre-Tax Contribution Accounts of Unrestricted 401(k) Employees on a pro rata basis according to their Compensation for the Plan Year. 4.06. Allocation of Rollover Contributions ------------------------------------ The Rollover Contributions of any Member must be allocated to his Rollover Account. 4.07. Excess Deferrals ---------------- (a) If a Member's Pre-Tax Election has caused that Member to have an Excess Deferral under this Plan or any other qualified plan or deferral mechanism, the Member qualifies for a distribution according to this section if he allocates his Excess Deferrals among this Plan and those other qualified plans or mechanisms no later than the first March 1 following the close of his taxable year during which he made Excess Deferrals. A Member's allocation for this Plan according to this Plan section is accomplished when the Member delivers to the Employee Benefits Section a written form showing the Member's total Excess Deferrals for the year and the portion of the total that he has allocated to this Plan. The Administrator may require that the submitted form contain any other facts or representations that it finds useful in applying this Plan section, and it may require any oaths or indemnifications for the Plan that it determines to be necessary to assure that the Plan is protected from that Member's errors or misrepresentations. A Member who has made elective deferrals (as described in Code section 402(g)) to a plan of an employer who is not an Affiliate may assign to this Plan any Excess Deferrals made during the Member's taxable year by notifying the Administrator on or before the date announced by the Administrator of the amount of Excess Deferrals to be assigned to the Plan. If the Administrator determines that a Member has satisfied this Plan section's requirements, it may cause the Trustee to distribute to that Member no later than the first April 15 following that March 1 from that Member's Pre-Tax Account any amount that does not exceed the lesser of that year's Pre-Tax Contributions allocated to that Member's Pre-Tax Account or the amount allocated by that Member as this Plan's share of his Excess Deferrals. (b) Excess Deferrals that are distributed in accordance with this Plan section shall be adjusted for any income, gain or loss credited to the Member's Pre-Tax Account as of the Valuation Date coincident with the date of distribution. Income, gain or loss allocable to Excess Deferrals for a Plan Year shall be calculated in accordance with Plan section 6.03. -28-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 4.08. Excess Pre-Tax Contributions ---------------------------- (a) If there are Excess Pre-Tax Contributions for a Plan Year, the provisions of subsection (b) will be applied first and then the Administrator must apply the provisions of subsections (c) and (d) and any additional choices available under the Treasury regulations to Code section 401(k)(8). (b) To the extent that it is not inconsistent with Treasury regulations, and within the limitations of Plan section 3.01, the Administrator must treat, solely for federal income tax purposes, all or a portion of the Excess Pre-Tax Contribution amounts that would be distributed to a Restricted 401(k) Employee if the provisions of subsections (c) and (d) were applied without regard to this subsection as having been distributed to him and contributed to his After-Tax Account as an After-Tax Contribution in accordance with the provisions of Plan section 4.10. (c) As provided in Code section 401(k)(8)(C), after the application of subsection (b), distributions of Excess Pre-Tax Contributions must be made to the Restricted 401(k) Employee from their Pre-Tax Accounts on the basis of the Excess Pre-Tax Contributions attributable to each of those Members. According to applicable Treasury regulations and subject to the limitations of subsection (e), a Member's share of Excess Pre-Tax Contributions must be adjusted to reflect investment gains and losses on Pre-Tax Contributions. In addition, the Administrator must cause each Member's share of Excess Pre-Tax Contributions to be reduced in any manner not prohibited by law and not inconsistent with applicable Treasury regulations by that Member's allocation of Excess Deferrals that are distributed according to this Plan from the Trust Fund. (d) For each Restricted 401(k) Employee as to his portion (if any) of the Excess Pre-Tax Contributions, the Administrator may cause the Trustee to distribute up to the entire amount of that Member's portion of the Excess Pre- Tax Contributions (and any income allocable to such contributions under subsection (e)) to that Restricted 401(k) Employee. Any such distribution must occur before the close of the Plan Year immediately after the Plan Year for which the Excess Pre-Tax Contributions were allocated. Any distribution of Excess Pre-Tax Contributions (and income) may be made without regard to any other provisions of law. (e) Excess Pre-Tax Contributions that are distributed in accordance with subsections (c) and (d) of this Plan section shall be adjusted for any income, gain or loss credited to the Member's Pre-Tax Account as of the Valuation Date coincident with or immediately preceding the date of distribution. Income, gain or loss allocable to Excess Pre-Tax Contributions for a Plan Year shall be calculated in accordance with Plan section 6.03. 4.09. Excess Aggregate Contributions ------------------------------ (a) If there are Excess Aggregate Contributions for a Plan Year, no later than the last day of the next Plan Year, the Administrator may implement the provisions of this Plan section -29-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 and take any other action permissible according to Code section 401(m)(6) and Treasury regulations to reduce or avoid other adverse consequences associated with Excess Aggregate Contributions. (b) As provided in Code section 401(m)(6)(C), distributions of Excess Aggregate Contributions must be made to the Restricted 401(m) Employees on the basis of the Excess Aggregate Contributions attributable to each of those Members. According to applicable Treasury regulations and subject to the limitations of subsection (c), a Member's share of Excess Aggregate Contributions must be adjusted to reflect investment gains and losses on those Excess Aggregate Contributions while those assets were in the Trust Fund. In addition, to the extent that Pre-Tax Contribution allocations have been considered in computing any Member's Contribution Percentage, and before any distributions under this subsection are made, the Administrator must cause each Member's share of Excess Aggregate Contributions to be reduced in any manner not prohibited by law and not inconsistent with applicable Treasury regulations first by that Member's allocation of Excess Deferrals and then by Excess Pre-Tax Contributions that are distributed according to this Plan from the Trust Fund. After adjustment, as described, for Excess Deferrals or Excess Pre-Tax Contributions that are distributed, distribution of a Member's share of Excess Aggregate Contributions (as adjusted for investment gains and losses in accordance with subsection (c)) must come pro rata from that Member's Matching Contribution allocations to his Matching Account, from that Member's After-Tax Contribution allocations to his After-Tax Account, and from that Member's Pre- Tax Contribution allocations to his Pre-Tax Account. The Administrator may cause the Trustee to distribute the Excess Aggregate Contributions (and any income allocable to those contributions under subsection (c)) according to this Plan section without regard to any other provisions of law. (c) Excess Aggregate Contributions that are distributed in accordance with subsection (b) of this Plan section shall be adjusted for any income, gain or loss credited to the Member's Matching Contribution Account, After-Tax Account and Pre-Tax Account, as applicable, as of the Valuation Date coincident with or immediately preceding the date of distribution. Income, gain or loss allocable to Excess Aggregate Contributions for a Plan Year shall be calculated in accordance with Plan section 6.03. (d) The Administrator must determine the amount of Excess Aggregate Contributions after first determining the amount of Excess Deferrals and second, after determining the amount of Excess Pre-Tax Contributions and causing those Excess Deferrals and Excess Pre-Tax Contributions to be adjusted, as authorized in Code sections 401(k)(8) and 402(g). 4.10. Recharacterization of Excess Pre-Tax Contributions -------------------------------------------------- (a) For purposes of Plan section 4.08, the Company may treat Excess Pre-Tax Contributions as amounts distributed to Members and recontributed to the Plan as After-Tax Contributions. Amounts so recharacterized remain fully vested and subject to the restrictions on distributions described in Plan section 7.07. In addition, such amounts are to be treated as After- -30-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 Tax Contributions for purposes of Plan article VII and Code sections 72, 401(a)(4) and 6047 and Treasury Regulation section 1.401(k)-1(b), but for all other purposes under the Code, they shall continue to be treated as Pre-Tax Contributions. (b) The Plan Administrator will notify in writing, any Restricted 401(k) Employee and the Internal Revenue Service of the amount of any Pre-Tax Contribution recharacterized pursuant to this Plan section. (c) Excess Pre-Tax Contributions may not be recharacterized to the extent such amounts would cause the Plan's stated limit for After-Tax Contributions to be exceeded for any Restricted 401(k) Employee. (d) Recharacterization of Excess Pre-Tax Contributions must occur no later than two and one-half months after the end of the Plan Year with respect to which such Excess Pre-Tax Contributions were made and is deemed to occur on the date the last Restricted 401(k) Employee is informed in writing of the amount recharacterized and the consequences thereof. (e) Recharacterized amounts shall be taxable income to the Restricted 401(k) Employee for such Member's taxable year containing the earliest dates in the Plan Year on which the Member would have received these amounts had he originally elected to receive them in cash. -31-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE V INVESTMENTS ----------- 5.01. Investment Funds ---------------- The Trust Fund shall be comprised of the Pooled Investment Funds and Stock Funds described in Exhibit III. The Board of Directors of Albemarle Corporation or its delegatees may add or delete Investment Funds from time to time. Members shall be given notice of all changes in Investment Funds offered under this section. The availability of Investment Funds shall be administered on a uniform and nondiscriminatory basis with respect to all similarly situated Members. 5.02. Investment of Matching and Discretionary Accounts ------------------------------------------------- (a) Except as provided in subsections (b) and (c), a Member may not direct the investment of amounts allocated to his Matching and Discretionary Accounts. All Matching and Discretionary Contributions made to the Plan by the Company shall be invested in the Albemarle Stock Fund. (b) A Member who is a Transferred Employee may request the liquidation and transfer to an alternate Active Investment Fund of all or part of his investment in the Ethyl Stock Fund or the Tredegar Stock Fund attributable to the portion of such Member's Matching Account or Discretionary Account that represents matching contributions or discretionary contributions allocated to his account under the Ethyl Plan. Transfers pursuant to this subsection (b) shall be made at such time and in such manner as provided under Plan section 5.04. Such Member also may request the liquidation and transfer to an alternate Active Investment Fund of all or part of his investment in the Albemarle Stock Fund attributable to the portion of such Member's Matching Account that represents matching contributions allocated to his account under the Ethyl Plan prior to May 1, 1983, in accordance with the applicable provisions governing Member directed investments under Plan section 5.04. (c) A Member may request the liquidation and transfer of all or part of his investment in the Albemarle Stock Fund attributable to Matching Contributions or Discretionary Contributions paid to the Plan by the Company on his behalf from that Stock Fund to an alternate Investment Fund. A Member who is a Transferred Employee also may request the liquidation and transfer to an alternate Active Investment Fund of all or part of his investment in the Albemarle Stock Fund attributable to the portion of such Member's Matching Account or Discretionary Account that represents matching contributions or discretionary contributions allocated to his account under the Ethyl Plan on or after May 1, 1983 ("Post '83 Match Account"). Transfers pursuant to this subsection shall be made at such time and in such manner as may be prescribed by the Company from time to time as provided for Member directed investments under Plan section 5.04. Only one such transfer from the Albemarle Stock Fund -32-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (whether it be full or partial) shall be permitted during any one period of employment of a Member by the Company. For purposes of this restriction, a period of employment will be deemed to end when a Member's account is distributed to him in accordance with Plan section 7.01 or 7.02. 5.03. Investment in Inactive Investment Funds --------------------------------------- (a) No After-Tax Contributions, Pre-Tax Contributions or Rollover Contributions may be invested in the Ethyl Stock Fund or the Tredegar Stock Fund. Existing investments in such Investment Funds shall remain so invested until transferred or distributed under the terms of the Plan. (b) A Member who is a Transferred Employee may request the liquidation and transfer to an alternate Active Investment Fund of all or part of his investment in the Ethyl Stock Fund or the Tredegar Stock Fund attributable to the portion of such Member's Account that represents after-tax, pre-tax, matching and discretionary contributions allocated to his account under the Ethyl Plan in accordance with the applicable provisions governing Member directed investments under Plan section 5.04. 5.04. Member Directed Investments --------------------------- (a) Each Member shall have the opportunity to direct the investment of his Directed Accounts in accordance with this Plan section. The provisions of this Plan section are intended to satisfy the requirements of ERISA section 404(c) and the regulations promulgated thereunder. Under the terms of this Plan section, each Member will have a reasonable opportunity to give investment instructions to the Administrator or his delegatee. The Administrator or his delegatee is obligated to comply with such instructions except as provided in subsection (h), provided that the instructions are in accordance with the procedures governing investment elections. A Member who directs the investment of his Directed Accounts in accordance with this Plan section shall not be deemed to be a fiduciary of the Plan (as defined in ERISA section 3(21)). In addition, no fiduciary with respect to the Plan shall be liable for any breach of Title I of ERISA as a result of a Member's investment direction. (b) A Member may direct the investment of his Directed Accounts into any of the Active Investment Funds in accordance with the investment election procedures described in the following subsections. (c) Each Member may elect to invest his future After-Tax Contributions, Pre-Tax Contributions and Rollover Contributions allocable to his Account in increments of one percent (1%). Investment elections may be made at such time and in such manner as the Company may from time to time prescribe on a uniform and nondiscriminatory basis with respect to all similarly situated Members; provided, however, that the Company may impose such restrictions on the time and manner of investment elections as may be necessary to comply with the -33-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 requirements of the Securities Exchange Act of 1934. Any such investment election shall be deemed to continue until a notice of change is received by the Employee Benefits Section or its delegatees. A Member's directions must cover the entire amount of his future After-Tax Contributions, Pre-Tax Contributions and Rollover Contributions and can apply to his After-Tax Contributions, Pre-Tax Contributions and Rollover Contributions separately. (d) A Member may, in addition to the election under subsection (c), elect to liquidate and transfer all or part of his investment in the Pooled Investment Funds or the Albemarle Stock Fund to an alternate Active Investment Fund. A Member may effect a transfer at such time and in such manner as may be prescribed by the Company from time to time on a uniform and nondiscriminatory basis with respect to similarly situated Members; provided, however, that the Company may impose such restrictions on the time and manner of transfer elections as may be necessary to comply with requirements of the Securities Exchange Act of 1934. Transfer elections shall be based on the value of the Member's Account in the applicable Investment Fund as of the Valuation Date coincident with or immediately preceding the date all or part of his interest is liquidated and, if later, the Valuation Date coincident with or immediately preceding the date amounts are reinvested upon settlement of accounts. (e) The Administrator shall provide Members with sufficient information concerning the Investment Funds to permit them to make informed investment decisions. Alternatively, the Administrator may provide Members with directions as to how such investment information may be obtained. (f) A Member's Directed Accounts may be charged for the reasonable expenses of carrying out his investment directions, provided that reasonable procedures are established to inform the Member of any such charges. Each Member also must receive periodic reports on the actual expenses incurred with respect to such Accounts. (g) The Trustee may decline to follow any Member direction under this Plan section which, if implemented (1) would not be in accordance with the documents and instruments governing the Plan, insofar as such documents are consistent with Title I of ERISA; (2) would cause the Trustee to maintain an indicia of ownership of any asset of the Plan outside the jurisdiction of the district courts other than as permitted by ERISA section 404(b); (3) would jeopardize the Plan's tax-qualified status under Code section 401(a); (4) would result in a direct or indirect: (i) sale, exchange or lease of property between the Company and the Plan (other than a purchase or sale of Albemarle -34-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 Corporation common stock that satisfies subsection (k)); (ii) loan to the Company or an Affiliate; (iii) acquisition or sale of any employer real property; or (iv) acquisition or sale of any employer security (as defined in ERISA section 407(d)(1)) except to the extent that the acquisition of such security satisfies subsection (k); (5) would result in a prohibited transaction described in ERISA section 406 or Code section 4975; (6) would result in a loss in excess of the Member's Account balance; or (7) would generate income that would be taxable to the Plan. (h) Except as provided in subsection (b), if a Member chooses not to direct the investment of all or part of his future After-Tax Contributions, Pre- Tax Contributions or Rollover Contributions allocated to his Account (whether an affirmative choice or one deemed by his failure to make an election to invest such future contributions), the Trustee shall, to the extent consistent with its fiduciary duties under ERISA section 404, invest the Member's future After-Tax Contributions, Pre-Tax Contributions and Rollover Contributions or that portion of any such contributions in the Merrill Lynch Retirement Preservation Trust, or such other Investment Fund as announced by the Administrator. (i) If a Member terminates employment on account of death, the Trustee shall, to the extent consistent with its fiduciary duties under ERISA section 404(c), invest any amounts remaining in the Member's Directed Accounts among the various Investment Funds in accordance with the Member's instructions in effect on the date of his death until such time as the Member's Account may be distributed to his Beneficiary pursuant to Plan section 7.01. (j) A Member may direct all or a portion of his Directed Accounts in Albemarle Corporation common stock provided that: (1) Albemarle Corporation common stock is a qualifying employer security as defined in ERISA section 407(d)(3); (2) Albemarle Corporation common stock is traded on a national securities exchange or other securities market; (3) Albemarle Corporation common stock is traded with sufficient frequency and in sufficient volume to assure that Member directions to buy or sell the security may be acted upon promptly and efficiently; (4) the same information provided to shareholders of Albemarle Corporation common stock is provided to Members who invest in such Albemarle common stock; -35-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (5) voting, tender and similar rights with respect to Albemarle Corporation common stock are passed through to Members; (6) information relating to the purchase, holding, and sale of Albemarle Corporation common stock and the exercise of voting, tender and similar rights with respect to such securities by Members is maintained in accordance with procedures designed to safeguard the confidentiality of such information, except to the extent necessary to comply with Federal laws or state laws not preempted by ERISA; and (7) Albemarle Corporation designates a fiduciary who is responsible for ensuring that (i) the procedures required in paragraph (4) above are sufficient to safeguard the confidentiality of the information described in that paragraph; (ii) such procedures are being followed; and (iii) an independent fiduciary (who is not affiliated with a Company) is designated or appointed to carry out activities relating to any situation which the fiduciary designated for purposes of this paragraph determines involve a potential for undue influence upon Members by any Company with regard to the direct or indirect exercise of shareholder rights. Absent the designation of a fiduciary in accordance with this subsection on or before the prescribed date, Albemarle Corporation is designated as the fiduciary and shall continue as such, until it appoints a successor. Albemarle Corporation shall retain the right to appoint and remove both the fiduciary required by this Plan section and any independent fiduciary appointed pursuant to paragraph (7). If Albemarle Corporation fails to appoint an independent fiduciary hereunder in circumstances which the Trustee believes warrants such appointment, the Trustee may request Albemarle Corporation to do so and Albemarle Corporation shall either make such appointment or Albemarle Corporation shall appoint a successor Trustee. (k) For purposes of this Plan section, the term "Directed Accounts" shall refer to a Member's After-Tax Account, Pre-Tax Account, Rollover Account and with respect to a Member who is a Transferred Employee, "Directed Accounts" also may include (i) the portion of such Member's Matching Account or Discretionary Account attributable to matching contributions or discretionary contributions allocated to his account under the Ethyl Plan that represents his investment in the Ethyl Stock Fund or the Tredegar Stock Fund and (ii) the portion of such Member's Matching Account attributable to matching contributions allocated to his account under the Ethyl Plan prior to May 1, 1983, that represents a portion of such Member's investment in the Albemarle Stock Fund. 5.05. Transfer Procedures ------------------- (a) If a Member elects to transfer less than the full amount of his investment in a particular Investment Fund as provided in Plan sections 5.03 and 5.05, the amount transferred will be charged against his accounts invested in that Fund as follows: -36-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (1) For all Investment Funds other than the Albemarle Stock Fund, the amount transferred shall be taken on a pro rata basis, as of the applicable Valuation Date, from amounts allocated to all his Accounts, as applicable. (2) For the Albemarle Stock Fund, the amount transferred shall be taken on a pro rata basis, as of the applicable Valuation Date, from --- ---- amounts allocated to all Accounts other than the Post-83 Match Account. (3) A Member may transfer the amounts allocated to his Post-83 Match Account in the Albemarle Stock Fund only in accordance with the provisions of Plan section 5.02(c). (b) In order to complete transfer transactions described in Plan section 5.02, 5.03 and 5.04, the Trustee shall purchase and sell, at current market rates, units of participation in the Pooled Investment Funds and shares of common stock held in the Stock Funds. When the Trustee sells units of participation or shares of common stock to effect a transfer of a Member's interest from one Investment Fund to another Investment Fund, the Trustee shall not reinvest the proceeds from such sale until after the settlement date. To the extent possible, the Trustee shall match share sale requirements from the Albemarle Stock Fund with share purchase requirements from the Albemarle Stock Fund. Notwithstanding the foregoing, if the total number of shares of Albemarle Corporation common stock to be sold exceeds the number of shares to be allocated to accounts in the Albemarle Stock Fund, the Trustee may permit Albemarle Corporation to repurchase any shares of Albemarle Corporation common stock at then current market rates. 5.06. Investment of Income -------------------- Income collected by the Trustee in the Pooled Investment Funds shall be reinvested in the Fund to which it relates. Dividends on the Stock Funds and earnings on temporary investments :of cash in such Stock Funds shall be reinvested in the Stock Fund to which they relate. 5.07. Warrants, Rights and Options ---------------------------- A Member shall have the right to request, direct or demand the Trustee to exercise on his behalf any rights, warrants or options issued with respect to common stock allocated to his Account in the Stock Funds, and the Trustee shall exercise or sell any such rights, warrants or options in accordance with the Member's directions. A Member shall not have the right to request, direct or demand the Trustee to exercise on his behalf any rights, warrants or options issued with respect to other securities credited to his Account and the Trustee, in its discretion, may exercise or sell any such rights, warrants or options. In the event warrants, rights or options are exercised or sold under this subsection, each Member's Account shall be credited with its proportionate share of the proceeds. -37-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 5.08. Voting Rights ------------- (a) All voting rights with respect to securities in the respective investments shall be exercised by the Trustee or by such proxies as the Trustee may select. (b) Voting rights with respect to stock in the Stock Funds shall be exercised as provided in this subsection. When and to the extent voting rights may be exercised by holders of such common stock, the Administrator will cause to be mailed to each Member who has a portion of his Account invested in the applicable fund, copies of the same proxy material as is sent to stockholders of the Albemarle Corporation, Ethyl Corporation or Tredegar Industries, Inc. as applicable, with the request that the Member give voting instructions to the Trustee with respect to the number of shares of common stock in his Account as of the Valuation Date coincident with the record date for such stockholder meeting. When instructions are received, the Trustee shall vote such shares in accordance therewith. Any shares of common stock credited to a Member's Account as of the applicable Valuation Date for which the Trustee receives no voting instructions or shares of common stock which are held by the Trustee and are not credited to any Member's Account as of the applicable Valuation Date shall, to the extent consistent with its fiduciary duties under ERISA section 404, be voted by the Trustee in accordance with the recommendations of management contained in such proxy material. If the Trustee receives instructions for fractional shares of common stock, the Trustee shall aggregate like instructions for such fractional shares to the extent possible and vote the aggregated shares according to the Member's instructions. (c) Voting rights with respect to the Investment Funds shall be exercised by the Trustee, as directed by the Committee. 5.09. Tender or Exchange Rights ------------------------- (a) The limitations of Plan sections 5.04 and 5.05 to the contrary notwithstanding, each Member may, to the extent that his Account is invested in the Stock Funds as of the Valuation Date coincident with the record date, direct the Trustee in writing as to the manner in which to respond to a tender or exchange offer with respect to such shares. To the extent consistent with its fiduciary duties under ERISA section 404, the Trustee shall respond in accordance with the instructions so received. The Trustee shall distribute or cause to be distributed to each Member such information as will be distributed to stockholders in connection with any such tender or exchange offer, together with a form requesting the Member's confidential instructions on whether or not such shares will be tendered or exchanged. To the extent consistent with its fiduciary duties under ERISA section 404, the Trustee shall not tender or exchange any shares of Albemarle Corporation common stock credited to a Member's Account as of the applicable Valuation Date for which the Trustee does not receive timely direction as to the manner in which to respond to a tender or exchange offer. Any shares of common stock that are held by the Trustee which are not credited to a Member's Account as of the applicable Valuation Date shall, to the extent consistent with its fiduciary duties under -38-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 ERISA section 404, be tendered or exchanged by the Trustee proportionally in the same manner as are shares tendered or exchanged with respect to which Members have the right of direction. (b) Cash proceeds received in a tender or exchange offer of common stock credited to a Member's Account pursuant to this Plan section shall be invested in the Merrill Lynch Retirement Preservation Trust or such other Investment Fund announced by the Administrator, until directed otherwise by the Member. Non-cash proceeds received in a tender or exchange pursuant to this Plan section shall be held in such manner as may be prescribed by the Company from time to time on a uniform and nondiscriminatory basis with respect to similarly situated Members. (c) Subsections (a), (b) and (c) to the contrary notwithstanding, each Member may, to the extent his Account is invested in shares of Ethyl Corporation common stock, direct the Trustee in writing as to the manner in which to respond to a tender offer of Ethyl Corporation common stock as set forth in Ethyl Corporation's Offer to Purchase dated August 27, 1997, and any amendments thereto (the "Offer"). Each such Member may direct the Trustee only with respect to those shares of Ethyl Corporation common stock held in such Member's Account as of the Valuation Date coincident with the date instructions are received by the Trustee. Any direction to the Trustee and the Trustee's response to such directions must be made in accordance with the procedures described in subsections (a), (b) and (c) above, and in accordance with materials sent to Members describing the Offer. 5.10. Other Provisions Applicable to Funds ------------------------------------ (a) The fact that a security is available for investment under the Plan shall not be construed as a recommendation for its purchase, and each Member's selection as to an Investment Fund will be solely the responsibility of the Member. (b) Except as provided in this article, all other rights of legal ownership with respect to securities in the respective investments shall be exercised by the Trustee. (c) When incurred, brokerage commissions, transfer taxes and other charges, and expenses in connection with the purchase or sale of securities shall be added to the cost of such securities or deducted from the proceeds thereof, as the case may be. (d) No less frequently than annually a report will be given to each Member showing the value of his interest in each Investment Fund. (e) All securities in the Investment Funds will be held in the name of the Trustee or its nominee. -39-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE VI VALUATION AND ACCOUNTING ------------------------ 6.01. Valuation of Accounts --------------------- Members' Accounts shall be valued, pursuant to the remaining provisions of this article, as of each Valuation Date using the fair market value of the Investment Funds as reported in writing by the Trustee. 6.02. Allocation of Contributions Between Investment Funds ---------------------------------------------------- Contributions allocated to a Member's Account as of any Valuation Date shall be divided by the Administrator between the Investment Funds in accordance with the provisions of Plan article V. 6.03. Allocation of Income and Gains and Losses ----------------------------------------- (a) Cash dividends paid or accrued on shares of stock included in the Stock Funds shall be allocated to the cash balance of each Member's Account on the basis of the ratio of the number of shares of stock in each Account as of the Valuation Date coincident with the ex-dividend date to the total number of shares of stock in all such accounts at such time. (b) Before crediting the amounts allocated to any Member for each Valuation Date under Plan section 6.02, the net gain or loss attributable to the Stock Funds shall be determined by adding together all income received or accrued, realized profits (excluding any dividends paid on shares of stock allocated under subsection (a)), all charges and expenses, and any realized losses which may have been sustained. Such net gain or loss shall be allocated to the cash balances of each Member's account existing in the Stock Funds on the basis of the ratio of the cash balance of each account in each Investment Fund immediately after the preceding Valuation Date to the total cash balances in all accounts in such Investment Funds at that time. The value of shares of stock in the Stock Funds shall increase or decrease to reflect any unrealized profits or losses that may have been sustained. (c) Before crediting the amounts allocated to any Member for each Valuation Date under Plan section 6.02, each Member's Account shall be adjusted as of each Valuation Date to reflect all income received or accrued, realized and unrealized profits, all charges and expenses, and any realized or unrealized losses which may have been sustained with respect to the Pooled Investment Funds, as applicable, in accordance with such procedures as may be established by the Administrator for appropriate record-keeping. -40-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 6.04. Allocation of Shares of Stock ----------------------------- (a) Shares of stock purchased by the Trustee for investment in the Stock Funds since the preceding Valuation Date (excluding any shares of stock purchased to satisfy investment transfer requests in accordance with Plan section 5.04) shall be allocated to each Member's account within the Stock Funds, on the basis of the ratio of the cash balance of each such account as of the Valuation Date to the total cash balances in all such accounts at such time. Concurrent with the allocation of such purchased shares, the cash balance in each account will be correspondingly reduced based on the average purchase price paid by the Trustee for such shares. (b) Shares acquired by dividends, stock splits or other such divisions shall be allocated to the Member's Account on the basis of the ratio of the number of shares of stock in each such Account as of the Valuation Date coincident with the ex-dividend date of such dividend, split, or other division, to the total number of shares of stock in all separate Accounts at such time. Tender or exchange rights will be processed as described in Plan section 5.09. -41-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE VII VESTING AND DISTRIBUTIONS ------------------------- 7.01. Plan Termination, Death, Permanent and Total Disability, Retirement ------------------------------------------------------------------- In the event of termination of the Plan or a Member's termination of employment by reason of death, qualification for Permanent and Total Disability or retirement, the value of the Member's Matching and Discretionary Accounts shall be one hundred percent (100%) vested. Except as provided in Plan section 7.04, the Plan shall pay to the Member or his Beneficiary, as the case may be, the total value of the Member's Account in a single payment as soon as administratively practicable after his termination of employment. The total value of the Member's Account shall be determined as of the Valuation Date coincident with or immediately preceding the date of distribution. Cash distributions in lieu of stock shall be made as soon as administratively feasible following the applicable settlement date. Notwithstanding the foregoing, a distribution under this Plan section shall not be made if restricted by Plan section 7.07. 7.02. Other Separation ------------------ (a) In the event of termination of employment for reasons other than death, retirement or qualification for Permanent and Total Disability, the Plan shall pay to the Member the value of his After-Tax, Pre-Tax, and Rollover Accounts plus the value arising from the vested portion of his Matching and Discretionary Accounts. Except as provided in Plan section 7.04, the Plan shall pay to the Member the value of his vested Account described in the preceding sentence in a single payment as soon as administratively practicable after his termination of employment. The value of the Member's vested Account shall be determined as of the Valuation Date coincident with or immediately preceding the date of distribution. Cash distributions in lieu of stock shall be made as soon as administratively feasible following the applicable settlement date. (b) A distribution cannot be made pursuant to this Plan section or Plan section 7.01, if, at the time of the distribution, the Member is again employed by the Company, unless the distribution is by reason of Plan termination (provided such distribution is not restricted by Plan section 7.07). (c) Matching and Discretionary Accounts become vested according to the following table: -42-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 Completed Vested Percentage Years of Service of Accounts ---------------- ----------- Less than 3 0% 3 but less than 4 60% 4 but less than 5 80% 5 or more 100% A Member shall also be fully vested in his Matching and Discretionary Accounts upon attainment of Normal Retirement Age while in the active employ of the Company. Anything in this Plan section to the contrary notwithstanding, any Member who is an employee of Albemarle Corporation or Albemarle Corporation subsidiary Imi-Tech Corporation on September 30, 1994, and whose employment is terminated as a result of the sale of Imi-Tech Corporation to ALLCO Acquisition Co. or who becomes an employee of ALLCO Acquisition Co. subsidiary Imi-Tech Corporation as of October 1, 1994 shall be fully vested in his Matching and Discretionary Accounts as of September 30, 1994. In addition, any Member whose employment with Albemarle Corporation is terminated as a result of the sale of certain assets of Albemarle Corporation to Amoco Corporation, and who was employed by Amoco Corporation immediately following his termination of employment with Albemarle Corporation as a result of the sale to Amoco Corporation, shall be fully vested in his Matching and Discretionary Accounts. In addition, any Member whose employment with Albemarle Corporation is terminated as a result of the sale of assets of Albemarle Corporation's polysilicon electronic materials business located in Pasadena, Texas to MEMC Pasadena, Inc. ("MEMC Pasadena"), and who was employed by MEMC Pasadena immediately following his termination of employment with Albemarle Corporation as a result of the sale to MEMC Pasadena, shall be fully vested in his Matching and Discretionary Accounts. (d) If a Member terminates employment with the Company and is reemployed as an Employee, the following rules apply: (1) If a Member is reemployed after incurring a Break in Service but before incurring five (5) consecutive one-year Breaks in Service, his vested interest in his Matching and Discretionary Accounts is determined based on his Years of Service before the Break in Service and his Years of Service after the Break in Service. (2) If a Member is reemployed after incurring five (5) or more consecutive one-year Breaks in Service, all Years of Service after such Breaks in Service shall be disregarded for purposes of determining such Member's vested interest in his pre-break Matching and Discretionary Accounts. For purposes of determining such Member's -43-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 vested interest in his post-break Matching and Discretionary Account, he retains his Years of Service for his service before the Breaks in Service only if he had a vested interest in his Matching or Discretionary Account at the time of his termination of employment. (e) If a Member terminates his employment and does not receive a distribution, the non-vested portion of his Matching and Discretionary Account will be retained in the Plan until such time as such Member first incurs five (5) consecutive one-year Breaks in Service, at which time such non-vested portion shall be forfeited. Until forfeited, a Member's vested interest in such Accounts at any subsequent date shall be determined according to the following formula (P) (AB + D) - D where P is his vested percentage as of the date of determination; AB equals his total Account balance as of the date of determination; and D is the amount of any distribution he received at his earlier separation from service. (f) If a Member terminates employment and receives a distribution, the non-vested portion of his Matching and Discretionary Accounts will be forfeited as of the Valuation Date coincident with or immediately following the date of distribution. If the Member is later reemployed and resumes participation in the Plan, the value of the non-vested portion of his Matching and Discretionary Account that was forfeited pursuant to this subsection (f) will be reinstated to its value as of the date of forfeiture, without adjustment for any subsequent gains or losses of the Trust Fund, if the Member repays in cash in a lump sum the entire amount distributed to him before the earlier of five (5) years after the Member's reemployment date or the date he incurs five (5) consecutive one- year Breaks in Service following the date of distribution. If the Member's Account is not reinstated, then all Years of Service prior to such Breaks will be disregarded. (g) In the case of a terminated Member whose vested interest in his Matching and Discretionary Account is zero, such Member shall be deemed to have received a distribution of such vested Account balance and the Member's non- vested Matching and Discretionary Account balance shall be forfeited as of the Valuation Date coincident with or immediately following the Member's termination of employment. (h) The value of the portion of a Matching or Discretionary Account that is forfeited shall be determined as of the Valuation Date coincident with or immediately preceding the date such forfeitures are credited against Company Matching Contributions due under Plan section 3.08. -44-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 7.03. Timing of Distributions ----------------------- (a) If, as of the applicable Valuation Date, the value of the vested portion of a terminated Member's Account exceeds $3,500 (or has exceeded $3,500 at the time of any prior distribution), then on his Information Date, the participant shall be given a written notice (by first class mail or personal delivery), which describes the form of benefit payment under Plan section 7.01 or 7.02 and the Member's right to defer receipt of the distribution until it is no longer immediately distributable. Effective January 1, 1998, $3,500 is replaced with $5,000 in the preceding sentence for Members who terminate on or after January 1, 1998, or for former Members whose vested Account balance did not exceed $5,000 on January 1, 1998. After his Information Date, a Member must consent in writing to receive a distribution pursuant to Plan section 7.01 or 7.02. (b) Except as provided in the following sentences, a Member's Annuity Starting Date is a date that is at least thirty (30) days but not more than ninety (90) days after his Information Date. A Member may affirmatively elect to waive the minimum thirty (30) day period, provided that he receives adequate information describing his right to a thirty (30) day election period and may revoke such affirmative election until his Annuity Starting Date. (c) On his Information Date, a Member shall be given a written notice (by first class mail or personal delivery), which describes the following: (i) the form of benefit payment under Plan section 7.01 or 7.02; (ii) the Member's right to defer receipt of the distribution until such time as his Account is distributable without his consent; and (iii) the Member's right to a period of thirty (30) days after receipt of the notice to consent to a distribution (and, if applicable, to elect a particular distribution option). After receipt of the notice required by this subsection, the terminated Member must consent in writing to receive a distribution. Such distribution may commence fewer than thirty (30) days after the Information Date provided the Member elects in writing to receive such distribution. (d) If, after his Information Date, the terminated Member does not consent to receive a distribution pursuant to Plan section 7.01 or 7.02, the distribution of his Account will be postponed until the date on which the Account is no longer immediately distributable. A Member's Account is immediately distributable prior to the earlier of (i) the Member's attainment of age sixty-five (65) or (ii) his death. The terminated Member's postponed distribution account will be held as part of the Trust Fund and will participate in the income, gains, and losses of the Trust on a proportionate basis. (e) Elections under Plan section 7.01 or 7.02 shall be made in writing to the Administrator during the ninety (90) day period ending on the later of the Member's Annuity Starting Date or the date he receives the information described in subsection (a), and shall take effect as of the Member's Annuity Starting Date. After the Annuity Starting Date, no further elections, changes in elections, or revocations of elections are permitted. -45-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 7.04. Qualified Domestic Relations Order Distributions ------------------------------------------------ (a) The Administrator must establish reasonable written procedures for determining the qualified status of a domestic relations order and for administering payments under a Qualified Domestic Relations Order. The Administrator must promptly notify the Member and each Alternate Payee of the receipt of a domestic relations order and of the procedures for determining its qualified status. Within a reasonable period after it receives a domestic relations order, the Administrator must determine whether the order is a Qualified Domestic Relations Order and notify the Member and each Alternate Payee of such determination. (b) No amounts will be distributed by withdrawal or Plan loan to the Member to whom a domestic relations order relates after the date on which the Administrator receives the order (or a modification of an order) for determination as a Qualified Domestic Relations Order and before the earlier of (i) the expiration of the eighteen-month period beginning on that date; (ii) the date on which the Administrator determines that the order (or a modification of an order) is a Qualified Domestic Relations Order; or (iii) the date the parties notify the Administrator that they no longer intend to pursue a Qualified Domestic Relations Order with respect to the Member's Account. The Administrator must separately account for the amounts that would have been payable to the Alternate Payee during the period described above if the order had been determined to be a Qualified Domestic Relations Order. (c) The following provisions apply to amounts that are subject to a domestic relations order that is determined to be a Qualified Domestic Relations Order. (1) Notwithstanding any Plan provision to the contrary, the Alternate Payee shall receive payment of the amount awarded to him under the Qualified Domestic Relations Order as soon as practicable after the date of entry of the order, provided, however, that the amount paid to the Alternate Payee pursuant to the Qualified Domestic Relations Order shall not exceed the vested portion of the Member's Account, valued as of the Valuation Date coincident with or immediately preceding the date of entry of the order. The Qualified Domestic Relations Order may not specify a date of payment to the Alternate Payee that is later than the payment date specified under this subparagraph. Payment of amounts with respect to a Member who has not yet terminated employment is not to be considered to violate the prohibition on providing increased benefits in the Plan's definition of a Qualified Domestic Relations Order. (2) Payments made on behalf of the Alternate Payee shall be made in accordance with Plan section 7.05. (3) Unless otherwise specified in the Qualified Domestic Relations Order, payment to the Alternate Payee shall be charged pro rata against the Member's Accounts under the Plan, including earnings thereon. -46-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (4) If the Alternate Payee dies before receiving his interest in accordance with subparagraph (1), if any, in the Plan and unless otherwise specified in the Qualified Domestic Relations Order, such interest shall be paid to the first surviving class of the following successive preference beneficiaries as provided in Plan section 1.11: the Alternate Payee's (i) widow or widower; (ii) surviving children equally; (iii) surviving parents equally; (iv) surviving brothers and sisters equally; or (v) the executor(s) or administrator(s) of the Alternate Payee's estate. Payment shall be made to the Alternate Payee's beneficiary or beneficiaries as soon as practicable after the Valuation Date coincident with or immediately following his date of death. (5) If the Member dies before the Alternate Payee and before the Alternate Payee has received payment of his interest in this Plan in accordance with subparagraph (1) and unless otherwise specified in the Qualified Domestic Relations Order, the Alternate Payee shall be entitled to receive amounts from the Plan only to the extent that he is designated as the Member's surviving spouse. Payment shall be made to the Alternate Payee as soon as practicable after the Valuation Date coincident with or immediately following the date of death of the Member. 7.05. Form of Distribution -------------------- Except as may otherwise be provided in Plan sections 7.06 and 7.07, payments from the Plan shall be in cash; provided, however, that a Member, Beneficiary or Alternate Payee may, to the extent possible, designate all or part of any distribution from the Albemarle Stock Fund, the Ethyl Stock Fund and the Tredegar Stock Fund to be paid in whole shares of stock. 7.06. Withdrawals ----------- A Member may elect to withdraw cash amounts or shares of stock from his After-Tax Account, his Rollover Account and his Pre-Tax Account as provided below. A Member may elect to withdraw amounts from his After-Tax Account pursuant to subsection (a)(1) or his Pre-Tax Account pursuant to subsection (b)(1) only once in each calendar month. Amounts allocated to a Member's Matching and Discretionary Accounts may not be withdrawn. Amounts reclassified under Plan section 4.08(b) may be withdrawn only pursuant to subsection (b). The withdrawal amount shall be paid to the Member as soon as practicable after the date such withdrawal is requested. A Member's request for a withdrawal must specify the order of payment from the Investment Funds. The Member's affected Accounts shall be valued as of the Valuation Date coincident with or immediately preceding the date amounts are paid to the Member. The Company may from time to time prescribe minimum notice periods and closing dates (for administrative convenience) for any withdrawal requests under this Plan section on a uniform and nondiscriminatory basis with respect to all similar situated Members. -47-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (a) After-Tax Account Withdrawals ----------------------------- (1) Partial withdrawals. A Member may, without penalty, withdraw up ------------------- to seventy-five percent (75%) of the value of his After-Tax Account (except for amounts that were reclassified under Plan section 4.08(b)) as of the last Valuation Date of the immediately preceding Plan Year, determined as follows; (A) with respect to amounts invested in the Investment Funds, the Member shall specify the dollar amount to be withdrawn, and (B) with respect to amounts invested in the Stock Funds, the Member shall specify the number of shares of stock to be withdrawn or sold. If the total value of the shares specified to be withdrawn or the cash proceeds from the shares specified to be sold exceeds the amount of withdrawable contributions, the excess shall be added to the Member's Account in the appropriate Investment Fund pro rata on the basis of the values of the shares of stock in that Fund. If the total value of the cash and shares specified to be withdrawn or the total value of the cash and cash proceeds from the shares specified to be sold exceeds the amount of withdrawable contributions, the excess shall be treated as attributable to the value of the shares withdrawn or sold from the Stock Funds, as applicable, and such excess shall be added to the Member's Account in the appropriate Investment Fund pro rata on the basis of the value of the shares of stock withdrawn or sold. (2) Total withdrawals. If a Member elects to withdraw an amount in excess of that available under paragraph (1), he must withdraw completely the net proceeds in his After-Tax Account determined as follows: (A) with respect to amounts invested in the Investment Funds, the total cash amount allocated to the Member's Account; plus (B) with respect to amounts invested in the Stock Funds, the total number of shares and cash allocated to the Member's separate account. A Member may elect to have the total number of shares allocated to his separate account in each specified Investment Fund sold and withdraw the net proceeds realized from the sale of such shares together with such cash allocated to the account. At the beginning of the Payroll Period next following the effective date of a Total Withdrawal, the Member's contributions to the Plan shall be suspended for a period of twelve (12) months. (3) Basis recovery. A Member's After-Tax Contributions and earnings -------------- under the Plan are to be treated as a separate contract under Code section 72(d). -48-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (b) Other Withdrawals ----------------- (1) Post-age 59 1/2 withdrawals. The Member may, without penalty, --------------------------- withdraw all or any part of his Pre-Tax or After-Tax Account as of any Valuation Date following his attainment of age fifty-nine and one-half (59 1/2). Withdrawals shall be in cash except the Member may elect to withdraw whole shares of stock, to the extent possible, from the Stock Funds, as specified. (2) Hardship withdrawals. By filing the prescribed form with the -------------------- Employee Benefits Section and upon proof of hardship, as defined below, a Member may withdraw an amount no greater than the total of his previously unwithdrawn Pre-Tax Contributions, allocated to his Pre-Tax Account and his After-Tax, and Rollover Accounts or the current value of his Pre-Tax Account and his After-Tax, and Rollover Accounts, if less. Withdrawals shall be in cash except that the Member may elect to withdraw whole shares of stock, to the extent possible, from the Stock Funds, as specified. If the total value of the cash and shares specified to be withdrawn or the total value of the cash and cash proceeds from the shares specified to be sold exceeds the amount of the requested withdrawal, the excess shall be treated as attributable to the value of the shares withdrawn or sold from the Stock Funds, as applicable, and such excess shall be added to the Member's Account in the appropriate Investment Fund pro rata on the basis of the value of the shares of stock withdrawn or sold. Hardship, for purposes of this subsection, means an immediate and heavy financial need of a Member that cannot be satisfied from other resources that are reasonably available to the Member. The following events constitute immediate and heavy financial need: (A) medical expenses described in Code section 213(d) previously incurred by the Member, the Member's spouse or any dependents of the Member (as defined in Code section 152) or as necessary for these persons to obtain medical care described in Code section 213(d); (B) costs directly related to the purchase (excluding mortgage payments) of a principal residence of the Member; (C) payment of tuition, related educational fees and room and board for the next twelve (12) months of post-secondary education for the Member, his spouse, children or dependents; (D) payments necessary to prevent the eviction of the Member from his principal residence or foreclosure on the mortgage of the Member's principal residence; or (E) additional events as approved by the Secretary of the Treasury in regulations. -49-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (3) A distribution pursuant to this subsection must not be in excess of the amount of the immediate and heavy financial need of the Member, provided, however, that such distribution may include amounts necessary to -------- ------- pay any federal, state or local income tax or penalties reasonably anticipated to result from the distribution. (4) A hardship distribution pursuant to this subsection cannot be made unless the following requirements are met: (A) the Member has obtained all distributions, other than hardship distributions, and all nontaxable loans currently available under all plans maintained by the Company; (B) the Member's Pre-Tax and After-Tax Elections under this Plan (and any other plan maintained by the Company as provided in Treasury Regulation section 1.401(k)-1(d)(2)(iv)(B)) will be suspended for twelve (12) months after receipt of the hardship distribution; and (C) the Member may not have Pre-Tax Contributions allocated to his Account for the Member's taxable year immediately following the taxable year of the hardship distribution in excess of the applicable limit under Code section 402(g) for such next taxable year less the amount of such Member's Pre-Tax Contribution allocations for the taxable year of the hardship distribution. (5) Any period of suspension required by paragraph (C) and any other period of suspension required by the Plan will run concurrently. (6) After the Administrator has determined the amount of a distribution that can be made pursuant to this subsection, the Administrator will direct the withdrawal as follows: (A) with respect to such amounts invested in the Pooled Investment Fund, the Administrator shall specify the dollar amount to be withdrawn; and (B) with respect to such amounts invested in the Stock Funds, the Administrator shall specify the number of shares to be sold such that net proceeds from such sale of shares equals the dollar amount that may be withdrawn. (c) Rollover Account Withdrawals. Except as provided in the next sentence, a Member may withdraw all or any part of his Rollover Account. Withdrawals shall be in cash except that the Member may elect to withdraw whole shares of stock, to the extent possible, from the Stock Funds, as specified. If the total value of the cash and shares specified to be withdrawn or the total value of the cash and cash proceeds from the shares specified to be sold exceeds the amount of the requested withdrawal, the excess shall be treated as attributable to the value of the shares withdrawn or sold from the Stock Funds, as applicable, and such excess shall be added to -50-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 Member's Account in the appropriate Investment Fund pro rata on the basis of the value of the shares of stock withdrawn or sold. (d) Disability withdrawals. A Member who is determined to have a Permanent and Total Disability may make withdrawals from his Account pursuant to the provisions of subsection (a). 7.07. Pre-Tax Account Distribution Restrictions ----------------------------------------- Except for payments to an Alternate Payee under a Qualified Domestic Relations Order, a distribution from a Member's Pre-Tax Account, from amounts reclassified under Plan section 4.08(b), and from that portion of a Member's Rollover Account that is attributable to amounts that were subject to the distribution restrictions of Code section 401(k) at any time prior to their transfer to the Plan is not permitted until after one of the following events have occurred: (a) the Member has died; (b) the Member has become disabled (either Totally or Permanently Disabled, or disabled within the meaning of Code section 72(m)(7) or under any other definition of disability consistent with Code section 401(k)(2)(B)); (c) the Member has retired or otherwise terminated employment with the Company; (d) the Member has incurred a hardship according to Plan section 7.06; (e) the Member has attained age fifty-nine and one-half (59 1/2); (f) the Plan terminates without the establishment or maintenance of another Defined Contribution Plan (other than an employee stock ownership plan) or a plan as described in Code section 401(k)(10)(A)(i) and applicable Treasury regulations thereunder; (g) a Member's employer disposes of substantially all of its assets used in its trade or business and that Member continues employment with the business that acquires the assets; or (h) a corporation disposes of its interest in the Member's employer, which is a subsidiary of the selling corporation within the meaning of Code section 409(d)(3), and the Member continues his employment with the employer. A distribution cannot be made pursuant to an event described in paragraph (f), (g) or (h) unless distribution would be a lump sum distribution under Code section 402(d)(4), without regard to clauses (i), (ii), (iii), and (iv) of subparagraph (A), subparagraph (B), or subparagraph (F) thereof and, with respect to paragraphs (g) and (h), the transferor corporation continues to maintain the Plan after the disposition. -51-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 7.08. Direct Rollovers ---------------- (a) Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee's election under this Plan section, a Distributee may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover. (b) Definitions (1) Eligible Rollover Distribution means any distribution or withdrawal of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include (i) any distribution or withdrawal that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee and the Distributee's designated beneficiary, or for a specified period of ten years or more; (ii) any distribution or withdrawal to the extent such distribution or withdrawal is required under Code section 401(a)(9); (iii) the portion of any distribution or withdrawal that is not includible in gross taxable income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities); (iv) returns of elective deferrals pursuant to Treasury Regulation section 1.415- 6(b)(6)(iv); (v) returns of Excess Pre-Tax Contributions, Excess Deferrals and Excess Aggregate Contributions pursuant to Treasury Regulation sections 1.401(k)-1(f)(4), 1.402(g)-1(e)(3) and 1.401(m)-1(e)(3) and the income allocable to those corrective payments; (vi) dividends paid on employer securities as described in Code section 404(k); and (vii) similar items designated by the Commissioner of the Internal Revenue. (2) Eligible Retirement Plan means an individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), an annuity plan described in Code section 403(a), or a qualified plan (as described in Code section 401(a)), that accepts the Distributee's Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to the surviving spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity. (3) Direct Rollover means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee. (4) Distributee means an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the Alternate Payee under a Qualified Domestic Relations Order are Distributees with regard to the interest of the spouse or former spouse. -52-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (c) The Administrator may impose restrictions on Direct Rollovers consistent with applicable Treasury regulations, including but not limited to, the requirement that a Distributee may elect a Direct Rollover only with respect to an Eligible Rollover Distribution that exceeds two hundred dollars ($200). (d) The Administrator shall provide to each Member who is entitled to make an Eligible Rollover Distribution a notice that satisfies Code section 402(f) at least thirty (30) but not more than ninety (90) days before the Member's Annuity Starting Date. A Member may affirmatively elect to waive the minimum thirty (30) day period, provided that he receives adequate information describing his right to a thirty (30) day election period. 7.09. Loans ----- (a) A Member who has become entitled to a benefit under the Plan may request a loan from the Trust Fund in accordance with the rules and procedures set forth in this section. (1) Loans shall be made available to all active Members on a reasonably equivalent basis. (2) Loans shall not be made available to Highly Compensated Employees in an amount greater than the amount made available to other Members. (3) Loans shall bear a reasonable rate of interest. The interest rate shall be determined by the 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. (4) Loans shall be adequately secured with assets of the Member's Account. (5) Loans shall be available only from a Member's After-Tax, Pre-Tax and Rollover Accounts. (b) Any loan to a Member, when added to the outstanding balance of all other loans from the Plan to such Member, shall not exceed the least of: (1) $50,000, reduced by the excess (if any) of the highest outstanding balance of loans from the Plan during the one year period ending on the day before the loan is made, over the outstanding balance of loans from the Plan on the date the loan is made, or (2) fifty percent (50%) of the then nonforfeitable portion of the Member's Account, valued as of the Valuation Date coincident with or immediately preceding approval of the loan request, or -53-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (3) the total value of the Member's After-Tax, Pre-Tax and Rollover Accounts, valued as of the Valuation Date coincident with or immediately preceding approval of the loan request. An assignment or pledge of any portion of the Member's interest in the Plan will be treated as a loan under this Plan section. (c) No loan shall be made to a Member for an amount less than $1,000. No loan shall be made to a Member who has an outstanding loan balance under this Plan. Any loan to a Member shall be required to be repaid through payroll deductions. (d) Any loan to a Member, by its terms, shall require that repayment (principal and interest) be amortized in level payments, made not less frequently than quarterly, over a period not to exceed five years. (e) A Member's loan shall be evidenced by such documents as are required to establish the loan and assign the applicable portion of his interest in the Plan as security for the loan. (f) A Member's loan shall be in default if any loan payment is not made before the last day of the calendar quarter following the calendar quarter in which the loan payment was due. In the event of default, the Administrator shall reduce the Member's vested Account balance by the remaining principal and interest on his or her loan. However, the Administrator shall not be required to commence such action immediately upon default. The Administrator may delay the enforcement of the security interest until a distributable event occurs, provided that such delay will not cause the loss of principal or interest to the Plan. (g) Except as may be provided under any Administrators rules, a Member's loan shall immediately become due and payable if such Member terminates employment for any reason. If such Member terminates employment, the Administrator shall immediately request payment of principal and interest on the loan. If the Member refuses payment following termination, the Administrator shall reduce the Member's vested Account balance by the remaining principal and interest on his or her loan. If a Member's vested Account balance is less than the amount due, the Administrator shall take whatever steps are necessary to collect the balance due directly from the Member. (h) To the extent it is consistent with other provisions of the Plan, all loans made under this Plan section are considered directed investments of the borrowing Member's Account. As such, all repayments of principal and interest made by the Member shall be credited only to the Member's Account. (i) The Administrator may adopt and announce additional loan rules not inconsistent with the provisions of this Plan section. -54-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 7.10. Federal Income Tax Withholding ------------------------------ Members shall be provided with proper notice and election forms for the purpose of withholding Federal income tax from distributions and withdrawals from the Plan in accordance with Code section 3405. 7.11. Special Rules for Former Amoco Employees ---------------------------------------- Special provisions apply to distributions and withdrawals for Members who are former employees of Amoco Petroleum Additives Company and its affiliates. Such provisions are set forth in Exhibit II. -55-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE VIII LIMITATIONS ----------- 8.01. Maximum Contribution Limitations -------------------------------- (a) Annual Additions to a Member's Account when combined with his Annual Additions under any other Defined Contribution Plan maintained by the Company or an Affiliate, may not exceed the applicable limits of Code section 415 described in this Plan section. (b) Effective for Limitation Years that begin after December 31, 1982, Annual Additions to a Member's Account for a Limitation Year may not exceed the lesser of (1) or (2) following: (1) the greater of $30,000 or one-fourth of the dollar limitation on annual benefits under Code section 415(b)(1)(A) for that Limitation Year. (2) twenty-five percent (25%) of the Member's Earnings (as defined under the provisions of the Ethyl Plan or the Plan, as applicable) for the Limitation Year. (c) For purposes of applying the limitations of this Plan section, all Defined Contribution Plans (whether or not terminated) of the Company or an Affiliate are treated as one Defined Contribution Plan. An individual medical account, as defined in Code section 401(h)(6) and referred to in Code section 415(l)(1), will be treated as a Defined Contribution Plan. With respect to key employees, as defined in Code section 419A(d)(3), a welfare fund, as defined in Code section 419(e), maintained by the Company or an Affiliate will be treated as a Defined Contribution Plan. (d) No allocation or other addition to a Member's Account is permitted under this Plan that would result in total Annual Additions under all Defined Contribution Plans of the Company or an Affiliate for that Member exceeding the Member's maximum Annual Addition for the applicable Limitation Year. To the extent that an allocation or addition pursuant to this Plan intended for one Member's Account cannot be allocated or added to that Account, it is treated as a mistake-of-fact contribution if that is allowed by law, and to the extent that the allocation or addition cannot be so treated without adverse consequences to the Plan or Trust, it is allocated or distributed according to subsection (e). (e) Each Member's maximum Annual Addition or benefit for this Plan and all other Defined Contribution or Defined Benefit Plans of the Company or an Affiliate are absorbed on a dollar-for-dollar basis by this Plan and other Defined Contribution or Defined Benefit Plans of the Company or an Affiliate according to the hierarchy established by the Company. Excess Annual Additions shall be placed in a suspense account, and used to offset (reduce) Company and Member Contributions in later Limitation Years. To the extent that a Member's Excess -56-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 Annual Additions are attributable to his Pre-Tax Contributions or After-Tax Contributions, those Pre-Tax Contributions or After-Tax Contributions may be returned to the Member in the Limitation Year in which they are determined to be Excess Annual Additions and will reduce that Member's Excess Annual Additions. If Pre-Tax Contributions or After-Tax Contributions are returned to a Member pursuant to this Plan section, such Pre-Tax Contributions or After-Tax Contributions will be disregarded for purposes of the limitations on such contributions under Plan sections 3.02, 3.07 and 3.11. For any Limitation Year in which a suspense Account exists according to this subparagraph, the suspense account is credited with investment gains and losses as if it were a Member's Account. If a suspense account exists according to the provisions of this subparagraph when the Plan terminates, the suspense account shall be treated as not being part of the assets of the Plan and shall be returned to the Company. 8.02. Multiple Plan Participation --------------------------- (a) This Plan section does not apply to Limitation Years beginning on and after January 1, 2000. (b) Effective for Limitation Years that begin after December 31, 1982, if a Member is a participant in both a Defined Benefit Plan and a Defined Contribution Plan maintained by the Company or an Affiliate, the sum of a Member's Defined Benefit Plan Fraction and his Defined Contribution Plan Fraction for any Limitation Year may not exceed 1.0. (1) For purposes of this paragraph, a Member's Defined Benefit Plan Fraction for any Limitation Year is a fraction (A) the numerator of which is his Projected Annual Benefit under such Defined Benefit Plans (determined as of the close of the Limitation Year), and (B) the denominator of which is the lesser of (i) the product of 1.25 multiplied by the dollar limitation in effect under Code section 415(b)(1)(A) for that year, or (ii) the product of 1.4 multiplied by the amount that may be taken into account under Code section 415(b)(1)(B) for that Member for that year. (2) For purposes of this paragraph, a Member's Defined Contribution Plan Fraction for any Limitation Year is a fraction (A) the numerator of which is the sum of his Annual Additions under such Defined Contribution Plans as of the close of the Limitation Year for that and all prior Limitation Years, and -57-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (B) the denominator of which is the sum of the lesser of the following amounts determined for that Limitation Year and for each prior year of service with Ethyl Corporation, the Company or an Affiliate: (i) the product of 1.25 multiplied by the dollar limitation in effect under Code section 415(c)(1)(A) (determined without regard to (c)(6)) for that year, or (ii) the product of 1.4 multiplied by the amount that may be taken into account under Code section 415(c)(1)(B) for that Member under such plans for that year. (C) If a plan satisfied the requirements of Code section 415 for the last Limitation Year beginning before January 1, 1983, according to regulations promulgated pursuant to section 235(g)(3) of the Tax Equity and Fiscal Responsibility Act of 1982, an amount is subtracted from the numerator of the Defined Contribution Plan Fraction (not exceeding that numerator) so that the sum of the Defined Benefit Plan Fraction and the Defined Contribution Plan Fraction computed under subsection (b) does not exceed 1.0 for that year. (c) The Company may elect to calculate the Defined Contribution Plan Fraction for any Limitation Year ending after December 31, 1982, in accordance with the following paragraphs: (1) The amount taken into account in the denominator with respect to each Member for all Limitation Years ending before January 1, 1983, is an amount equal to the product of (A) the amount determined under Code section 415(e)(3)(B) (as in effect for the Limitation Year ending in 1982) for the Limitation Year ending in 1982, multiplied by (B) the Transition Fraction. (2) For purposes of this subsection, Transition Fraction means a fraction (i) the numerator of which is the lesser of $51,875, or 1.4 multiplied by twenty-five percent (25%) of the Member's Earnings (as defined under the provisions of the Ethyl Plan or the Plan, as applicable) for the Limitation Year ending in 1981, and (ii) the denominator of which is the lesser of $41,500, or twenty-five percent (25%) of the Member's Earnings (as defined under the provisions of the Ethyl Plan or the Plan, as applicable) for the Limitation Year ending in 1981. (d) Projected Annual Benefit means the total of each Annual Benefit to which the Member would be entitled under the terms of Defined Benefit Plans maintained by the Company -58-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 or an Affiliate in which the Member is a participant (assuming that the Member continued employment until each such plan's normal retirement age or current age, if later; that Earnings continued at the same rate as in effect in the Limitation Year under consideration until those normal retirement ages or dates; and that all other relevant factors used to determine benefits under each plan remained constant as of the current Limitation Year for all future Limitation Years). (e) For purposes of applying the limitations of this Plan section, all Defined Benefit Plans (whether or not terminated) of the Company or an Affiliate are treated as one Defined Benefit Plan, and all Defined Contribution Plans (whether or not terminated) of the Company or an Affiliate are treated as one Defined Contribution Plan. An individual medical account, as defined in Code section 401(h)(6) and referred to in Code section 415(l)(1), will be treated as a Defined Contribution Plan. With respect to key employees, as defined in Code section 419A(d)(3), a welfare fund, as defined in Code section 419(e), maintained by the Company or an Affiliate will be treated as a Defined Contribution Plan. (f) If the sum of any Member's Defined Benefit Plan Fraction and Defined Contribution Plan Fraction, after the application of Plan section 8.01, would exceed the allowances of this Plan section for any Plan Year, the Company must first freeze the rate of benefit accrual under Defined Benefit Plans maintained by the Company or an Affiliate with respect to that Member and next, if necessary, adjust the amount of current and future Annual Additions to Defined Contribution Plans maintained by the Company or an Affiliate on behalf of that Member so that the sum of those fractions does not exceed his maximum allowance. -59-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE IX ADMINISTRATION -------------- 9.01. Appointment of Named Fiduciary and Administrator ------------------------------------------------ Albemarle Corporation shall be the Administrator and Named Fiduciary of the Plan and shall be responsible for the operation and administration of the Plan except to the extent its duties are allocated to and assumed by persons or entities hereunder. 9.02. Administrator ------------- (a) To the extent required by law, the Administrator shall establish a funding policy and method to carry out the objectives of the Plan. (b) The Administrator shall prepare such reports at such times and file such reports at such places as may be required by Federal statutes and regulations. (c) Upon written request of any Member or Beneficiary receiving benefits under the Plan, the Administrator shall furnish him a copy of the latest updated summary plan description, latest annual report and a copy of the Plan. The Administrator may make a reasonable charge for the costs of furnishing such copies. (d) The Administrator shall maintain, on a plan or calendar year basis, employee and other such records as are necessary for the successful operation of the Plan and shall supply such full and timely information for all matters relating to the Plan as the Committee or Trustee may require for the effective discharge of their respective duties. (e) The Administrator shall establish rules and procedures to be followed by Members and Beneficiaries in applying for benefits and for furnishing and verifying all data which may be required in order to establish their rights to benefits in accordance with the Plan. Upon receipt of an application for benefits, the Administrator shall determine all facts which are necessary to establish the right of an applicant to benefits and the amount thereof. All approved benefits shall be paid at the direction of the Administrator. Such payments shall be made in accordance with the Administrator's written directions setting forth the amount of such payments and the specific manner in which such payments are to be made. In carrying out its duties hereunder, the Administrator shall at all times rely on the construction and specific interpretations of the Plan as determined by the Committee. 9.03. Trustee ------- The Board of Directors of Albemarle Corporation shall have the power to appoint one or more Trustees, to remove a Trustee at its discretion upon sixty (60) days' written notice unless a shorter period is agreed to, to appoint a successor to any Trustee who has resigned, has been -60-

Savings Plan For The Employees Of Albermarle Corporation As Amended and Restated Effective January 1, 2001 removed, or has ceased to serve for any other reason, and to appoint a co- Trustee with the consent of the Trustee then serving. The Trustee may resign at any time upon sixty (60) days' written notice to the Company unless a shorter period is agreed to. The appointment of any Trustee or co-Trustee shall become effective upon the Trustee's or co-Trustee's acceptance of the appointment in writing. Each Trustee shall hold and invest the assets of the Plan under a Trust established pursuant to a Trust Agreement between the Company and the Trustee. Each Trustee shall further carry out all duties assigned to it by the Plan or the applicable Trust Agreement. The Company shall promptly notify any insurance company from which policies or contracts have been purchased of any change in the Trustee. 9.04. Employee Savings Plan Committee ------------------------------- (a) An Employee Savings Plan Committee of not less than three (3) persons, who shall be employees of the Company, shall be appointed by, and shall act under the direction of, the Board of Directors of Albemarle Corporation. Albemarle Corporation reserves the right at any time to remove any member of the Committee and to fill any vacancy however caused. In discharging the duties assigned to it under this Plan section, the Committee and any other Fiduciary has the discretion to interpret the Plan, including its eligibility provisions and its provisions relating to qualification for and accrual of benefits; to determine all questions arising in the administration and application of the Plan; to review claims for benefits that have been denied; to adopt, amend and rescind rules and regulations as it deems necessary for the operation of the Plan and to make all other determinations necessary or advisable for the discharge of its duties under the Plan or assigned to it by the Board of Directors or the Administrator. Such Committee's discretionary authority is absolute and exclusive if exercised in a uniform and nondiscriminatory manner with respect to similarly situated individuals. The express grant in the Plan of any specific power to the Committee with respect to any duty assigned to it by the Plan, the Board of Directors or the Administrator must not be construed as limiting any power or authority of the Committee to discharge its duties. (b) The Committee shall choose a chairman from its members and may appoint a secretary to keep such records as may be necessary of the acts of the Committee. The secretary may, but need not, be a member of the Committee. The secretary may perform any and all purely ministerial acts which may be delegated to him in writing by the Committee. (c) The Committee may delegate to any of its members or to the secretary of the Committee authority to sign any documents on its behalf, or to perform solely ministerial acts, but such person shall not exercise any discretion over matters delegated to him without obtaining the concurrence of a majority of the members. (d) Except as otherwise specifically provided herein, all acts and decisions of the Committee shall be on the concurrence of a majority of the members. Any decision is effective when evidenced in writing and signed by a majority of the members. -61-

Savings Plan For The Employees Of Albermarle Corporation As Amended and Restated Effective January 1, 2001 (e) A member of the Committee who is also a Member of the Plan shall abstain from any action which specifically affects him as a Member of the Plan other than an action which affects all Members of the Plan. In the event of abstention, matters shall be decided by the remaining members of the Committee. Nothing herein shall prevent any member of the Committee who is also a Member of the Plan from receiving any benefit to which he may be entitled, so long as the benefit is computed and paid on a basis that is consistently applied to all other Members. The Committee may engage agents to assist it in its duties, and may consult with counsel, who may be counsel for the Company, with respect to the meaning or construction of this document and its obligations hereunder, or with respect to any action, proceeding or question of law related thereto. 9.05. Benefit Claims Review Procedure ------------------------------- (a) Claims for benefits under the Plan may be submitted to the Administrator or such persons as it may designate in writing who shall have the initial responsibility for determining the eligibility of any Member or Beneficiary for benefits. Such claims for benefits shall be made in writing and shall set forth the facts which such Member or Beneficiary believes to be sufficient to entitle him to the benefit claimed. The Administrator in its discretion may adopt and require forms for the submission of claims for benefits in which case all claims for benefits shall be filed on such forms. (b) On receipt of a claim, the Administrator must respond in writing within ninety (90) days. If necessary, the Administrator's first notice must indicate any special circumstances requiring an extension of time for the Administrator's decision. The extension notice must indicate the date by which the Administrator expects to give a decision. An extension of time for processing may not exceed ninety (90) days after the end of the initial ninety (90)-day period. (c) If the written claim for a Plan benefit is wholly or partially denied or the claimant has had no response, the claimant or his duly authorized representative, at the sole expense of the claimant, may appeal the denial within sixty (60) days of the date of the denial or the expiration of the time period provided in subsection (b) to the: Manager of Employee Benefits Albemarle Corporation 451 Florida Boulevard Baton Rouge, Louisiana 70801 An adverse notice must be written in a manner calculated to be understood by the claimant and must include (i) each reason for denial; (ii) specific references to the pertinent provisions of the Plan or related documents on which the denial is based; (iii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why that material or information is needed; and (iv) appropriate information about the steps to be taken if the claimant wishes to submit the claim for review. -62-

Savings Plan For The Employees Of Albermarle Corporation As Amended and Restated Effective January 1, 2001 (d) In pursuing his appeal the claimant or his representative: (1) may request in writing that the Committee review the denial; (2) may review pertinent documents; and (3) may submit issues and comments in writing. (e) The decision on review shall be made within sixty (60) days; provided that the sixty (60) day period may be extended for an additional sixty (60) days by written notice to the claimant setting forth the reasons for the extension. The decision on review shall be made in writing, shall include specific reasons for the decision, shall be written in a manner calculated to be understood by the claimant and shall contain specific references to the pertinent Plan provisions on which the decision is based. 9.06. Administrative Costs -------------------- Except as provided in Plan section 5.04, all administrative costs of the Plan, including Trustee's fees and charges, shall be paid by the Company. 9.07. Errors and Omissions -------------------- Individuals and entities charged with the administration of the Plan must see that it is administered in accordance with its terms so long as the Plan does not conflict with the Code or ERISA. If an innocent error or omission is discovered in the Plan's operation or administration, and the Administrator determines that it would cost more to correct the error than is warranted, and if the Administrator determines that the error did not result in discrimination in operation or cause a qualification or excise-tax problem, then, to the extent that an adjustment will not, in the judgment of the Administrator, result in discrimination in operation, the Administrator may authorize any equitable adjustment it deems necessary or desirable to correct the error or omission, including, but not limited to, the authorization of additional Company contributions designed, in a manner consistent with the goodwill intended to be engendered by the Plan, to put Members in the same relative position they would have enjoyed if there had been no error or omission. Any contribution made pursuant to this Plan section is an additional Company contribution. 9.08. Fiduciary Discretion -------------------- In discharging the duties assigned to it under the Plan, each Fiduciary has the discretion to interpret the Plan; adopt, amend and rescind rules and regulations pertaining to its duties under the Plan; and to make all other determinations necessary or advisable for the discharge of its duties under the Plan. Each Fiduciary's discretionary authority is absolute and exclusive if exercised in a uniform and nondiscriminatory manner with respect to similarly situated individuals. The express grant in the Plan of any specific power to a Fiduciary with respect -63-

Savings Plan For The Employees Of Albermarle Corporation As Amended and Restated Effective January 1, 2001 to any duty assigned to it under the Plan must not be construed as limiting any power or authority of the Fiduciary to discharge its duties. A Fiduciary's decision is final and conclusive unless it is established that the Fiduciary's decision constituted an abuse of its discretion. -64-

Savings Plan For The Employees Of Albermarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE X AMENDMENT AND TERMINATION OF THE PLAN ------------------------------------- 10.01. Amendment of the Plan --------------------- The Company shall have the right by action of the Board of Directors or any executive committee of the Board to modify, alter or amend the Plan in whole or in part to the extent allowed by law by a majority vote of its members at a meeting, by unanimous consent in lieu of a meeting or in any other manner permissible under applicable state law. In addition, the Board of Directors or any executive committee of the Board may delegate to an appropriate officer or officers or committee of the Company, all or part of the authority to amend the Plan. No amendment may increase the duties, powers and liabilities of the Trustee without its written consent and, except to the extent necessary to maintain the qualification of the Plan any such action shall not, in any way, affect adversely the benefits of individuals who have terminated their employment under the Plan prior to the effective date of such action, or of their Beneficiaries, nor shall it adversely affect amounts credited to Members prior to the effective date of such action. No amendment, modification or alteration shall have the effect of revesting in the Company any part of the principal or income of the Trust Fund. 10.02. Termination of the Plan ----------------------- The Company expects to continue this Plan indefinitely, but continuance is not assumed as an obligation and the Company reserves the right to terminate the Plan at any time by action of its Board of Directors or any executive committee of the Board in accordance with the procedures set forth in Plan section 10.01. For purposes of this Plan section, termination means an amendment to the Plan expressly terminating it, a complete discontinuance of the Company's required contributions to the Plan, or the occurrence of events based on action of the Board or otherwise, which are determined by the Internal Revenue Service to result in a termination of the Plan. On termination of the Plan (or in the event of the Internal Revenue Service's determination of a partial termination due to the happening of events which result in a termination of the Plan as it relates to a specific group or groups of Members, whether resulting by action of the Board or otherwise) the rights of the then Members, to the extent affected by such action, in their Accounts shall be nonforfeitable and distributed to the Members as provided in Plan section 7.01 (provided such distributions are not restricted by Plan section 7.07). In the event of termination of the Plan, the value of any forfeitures under Plan section 7.02 not previously credited against the Company contributions shall be distributed among the then Members of the Plan in proportion to the total value of their Matching Accounts and, under no circumstances, shall any part thereof revert to the Company. -65-

Savings Plan For The Employees Of Albermarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE XI MERGER AND CONSOLIDATION OF THE PLAN ------------------------------------ In the event of a merger or consolidation of the Plan with another plan or the transfer of assets or liabilities from the Plan to another plan, the balance in each Member's account immediately after such event shall be equal to the balance in his account immediately prior to such event. -66-

Savings Plan For The Employees Of Albermarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE XII GENERAL PROVISIONS ------------------ 12.01. Qualification ------------- This Plan has been created for, where applicable, the exclusive purpose of providing benefits to the Members and their Beneficiaries. The Plan shall be interpreted in a manner consistent with applicable provisions of the Code and ERISA and in effect from time to time. Except as provided in Plan section 8.01, under no circumstances shall any funds contributed to this Plan, any assets of this Plan held under the Trust Agreement, or income attributable to such assets, revert to or be used or enjoyed by the Company, nor shall any such funds, assets or income ever be used or diverted to purposes other than the exclusive benefit of the Members or their Beneficiaries. Subject to the exceptions provided in Plan section 8.01, funds contributed to the Plan by the Company shall be returned to the Company (i) within one year of the date such funds are contributed if the contribution is made by reason of a mistake of fact or (ii) to the extent of the disallowance of a tax deduction for such contribution and within one year of such disallowance, if the contribution is conditioned on its deductibility. All Company contributions hereunder are conditioned on their deductibility in full. 12.02. No Guaranty of Employment ------------------------- The Plan shall not be deemed to constitute a contract between the Company and any Member or to be consideration or an inducement for the employment of any Member of the Company. Nothing contained in the Plan shall be deemed to give any Member the right to be retained in the service of the Company or to interfere with the rights of the Company to discharge or to terminate the service of any Member at any time without regard to the effect such discharge or termination may have on any rights under the Plan. 12.03. Payments to Minors and Incompetents ----------------------------------- If a Member or Beneficiary entitled to receive any benefits hereunder is a minor or is deemed so by the Administrator or is adjudged to be legally incapable of giving valid receipt and discharge for such benefits, benefits will be paid to such person as the Administrator might designate. Such payments shall, to the extent made, be deemed a complete discharge of any liability for such payment under the Plan. 12.04. Non-Alienation of Benefits -------------------------- (a) To the extent permitted by law, no benefit payable under the Plan will be subject in any manner to anticipation, assignment, garnishment or pledge; and any attempt to anticipate, assign, garnish or pledge the same will be void and no such benefits will be made in any manner liable for or subject to the debts, liabilities, engagements or torts of any Members. -67-

Savings Plan For The Employees Of Albermarle Corporation As Amended and Restated Effective January 1, 2001 (b) Despite any other Plan provisions to the contrary, the Administrator must comply with the terms of a Qualified Domestic Relations Order. The Plan is not liable for any payments pursuant to a domestic relations order until the Administrator has received the order and determined that it is a Qualified Domestic Relations Order. 12.05. Headings and Subheadings ------------------------ The headings and subheadings in this Plan have been inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. 12.06. Use of Masculine and Feminine; Singular and Plural -------------------------------------------------- In the construction of the Plan the masculine shall include the feminine and the singular the plural in all cases where such meanings are indicated by the context. 12.07. Unclaimed Benefits ------------------ If the Administrator, or the Trustee with the assistance of the Administrator, cannot make payment of any amount to a Member or Beneficiary within a reasonable period after such amount becomes payable because the identity or whereabouts of such individual cannot be ascertained, the Administrator, at the end of the reasonable period, will direct that the amounts which would have been payable to such Member or Beneficiary must be treated as a forfeiture. If the identity or whereabouts of a person entitled to such benefits is later determined to the satisfaction of the Administrator, the amount previously forfeited shall be reinstated and payments made accordingly. 12.08. Beneficiary Designation ----------------------- At the time of enrollment in the Plan, each Member, with the consent of his spouse pursuant to Plan section 1.11, if applicable, must designate a Beneficiary to receive settlement of his Plan Account in the event of his death during employment. A Member, with the consent of his spouse pursuant to Plan section 1.11, if applicable, may, from time to time, change a Beneficiary or Beneficiaries under the Plan. In the event that no designated Beneficiary is surviving at the time of the Member's death, settlement under the Plan will be made as provided in Plan section 1.11. 12.09. Commencement of Payments ------------------------ Except in the case of a Member who has elected to defer the distribution of his interest pursuant to Plan section 7.03, a Member's interest in the Plan shall commence being distributed to him no later than sixty (60) days after the close of the Plan Year in which occurs the later of his termination of employment or his attainment of Normal Retirement Age. -68-

Savings Plan For The Employees Of Albermarle Corporation As Amended and Restated Effective January 1, 2001 12.10. Special Distribution Requirements --------------------------------- (a) The requirements of this Plan section must be met for all other distribution provisions in this Plan. This Plan section does not entitle a Member to a benefit under the Plan. If there is a conflict between any other Plan provisions and this Plan section, then the requirements of this Plan section control. (b) All distributions required under Article VII shall be determined and made in accordance with Code section 401(a)(9) and regulations promulgated thereunder, including the minimum distribution incidental death benefit rules of Proposed Treasury Regulation section 1.401(a)(9)-2. (c) The entire interest of a Member under the Plan must be or must begin to be distributed not later than his Required Beginning Date. (d) If a Member dies before distribution of his interest has been made, then any part of that interest payable to his Beneficiary must be distributed as soon as administratively possible but in no event later than five years after his death. (e) A distribution required by subsection (b) or (c) will be made pursuant to the provisions of Plan section 7.01. -69-

Savings Plan For The Employees Of Albermarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE XIII SPECIAL TOP-HEAVY RULES ----------------------- If this Plan is a top-heavy plan as determined in accordance with the rules in Code section 416(g), the requirements of Code sections 416(b), and (c) and 401(a)(17), as described in Appendix A, must be satisfied for any Plan Year in which the Plan is a top-heavy plan. In the event that any change in the Plan's benefit structure or vesting schedule occurs resulting from a change in the Plan's top-heavy status, the rules described in Code section 411(a)(10) will apply. -70-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 ARTICLE XIV ADOPTION OF PLAN ---------------- As evidence of its adoption of the Plan herein constituted, Albemarle Corporation has caused this instrument to be signed by its duly authorized officer this 8/th/ day of December, 2000 and made effective as of January 1, 2001. ALBEMARLE CORPORATION By: /s/ C. B. WALKER --------------------------------------- -71-

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 APPENDIX A ---------- SPECIAL TOP-HEAVY RULES ----------------------- 1. Top-Heavy Years --------------- The provisions of sections 5, 6, 7 and 8 of this Appendix A are effective only for Plan Years in which this Plan is a Top-Heavy Plan. The provisions of this Appendix A will be inoperative to the extent that final treasury regulations do not require their inclusion in the Plan. 2. Definitions ----------- (a) Aggregation Group means either a Mandatory Aggregation Group or an ----------------- Optional Aggregation Group. An Aggregation Group consists of two or more qualified plans maintained by the Company or an Affiliate. (b) Interest is defined in Appendix section 4. -------- (c) Key Employee means any employee, former employee or other individual ------------ described in Code section 416(i)(1) or a person related according to Code section 416(i)(5) to such an individual. For purposes of Appendix section 3, an individual's status as a Key Employee is based on the Plan Year containing the Top-Heavy Determination Date. For purposes of Appendix sections 5, 6, 7 and 8, an individual's status as a Key Employee is based on the Plan Year to which those sections are being applied. (d) Mandatory Aggregation Group means an Aggregation Group consisting of --------------------------- all Company- and Affiliate-maintained qualified plans that have a Key Employee as a participant and each other qualified plan that enables any such qualified plan to meet the requirements of Code section 401(a)(4) or 410. Any Affiliate- maintained qualified plan that terminated within the five-year period ending on the Top-Heavy Determination Date must be taken into account. (e) Non-Key Employee means any employee, former employee, or other ---------------- individual described in Code section 416(i)(2) or a person related according to Code section 416(i)(5) to such an individual. For purposes of Appendix section 3, an individual's status as a Non-Key Employee is based on the Plan Year containing the Top-Heavy Determination Date. For purposes of Appendix sections 5, 6, 7 and 8, an individual's status as a Non-Key Employee is based on the Plan Year to which those sections are being applied. (f) Optional Aggregation Group means a single qualified plan maintained by -------------------------- the Company or an Affiliate or a Mandatory Aggregation Group to which Albemarle Corporation has elected to add one or more qualified plans for purposes of determining top-heaviness according to Appendix section 3. APPENDIX A-1

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (g) Top-Heavy Determination Date, for any qualified plan's Plan Year, means ---------------------------- the day preceding that Plan Year, except that for a qualified plan's first Plan Year, it means the last day of that first Plan Year. (h) Top-Heavy Plan means a qualified plan maintained by the Company or an -------------- Affiliate that is determined to be a top-heavy plan as defined in Section 416(g) and Appendix section 3. (i) Top-Heavy Valuation Date, for a qualified plan's Plan Year, means the ------------------------ plan's most recent valuation date occurring within a 12-month period ending at the end of the Top-Heavy Determination Date for that Plan Year. A Defined Benefit Plan's Top-Heavy Valuation Date must be the same valuation date used for computing that Plan's costs for determining minimum funding according to Code section 412 for the Plan Year that contains the Top-Heavy Determination Date, regardless of whether a valuation is performed that year. 3. Top-Heavy Determination ----------------------- (a) The determination of whether this Plan is a Top-Heavy Plan for a Plan Year is made according to Interests as of that Plan Year's Top-Heavy Determination Date, based on the related Top-Heavy Valuation Date, according to the procedures required in this section. (b) If this Plan is not required to be in a Mandatory Aggregation Group and is not part of an Optional Aggregation Group, it is a Top-Heavy Plan if the Interests of all Key Employees in the Plan exceed sixty percent (60%) of the combined Interests of all Members of the Plan. (c) If this Plan is part of an Aggregation Group, the determination of whether this and each plan in the Aggregation Group is a Top-Heavy Plan is determined according to the procedures required in this subsection, applying each paragraph in numerical sequence. (1) Compute the Interests of all Key Employees in each plan in the Aggregation Group on a plan-by-plan basis. (2) For each plan that is part of the Aggregation Group, the Interests of all Key Employees in that plan are added to the Interests of all Key Employees in each other plan in the Aggregation Group. The Interests are determined as of the plans' Top-Heavy Determination Dates that fall within the same calendar year. (3) This Plan and each other plan that must be in a Mandatory Aggregation Group are Top-Heavy Plans if, after application of paragraph (2), the Interests of all Key Employees in the Aggregation Group exceed sixty percent (60%) of the combined Interests of all participants in the Aggregation Group. (d) Albemarle Corporation may create an Optional Aggregation Group, but a qualified plan may not be part of an Optional Aggregation Group unless all qualified plans APPENDIX A-2

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 within the Aggregation Group continue to meet the requirements of Code sections 401(a)(4) and 410 with each added qualified plan taken into account. An Optional Aggregation Group may not be created unless, after application of subsection (c)(2), the Interests of all Key Employees in the Optional Aggregation Group do not exceed sixty percent (60%) of the combined Interests of all participants in the Optional Aggregation Group. (e) If, at any time during the five-year period ending on the applicable Determination Date, an individual has not performed services for an Affiliate maintaining this Plan or a plan that is a part of this Plan's Aggregation Group, the Interest of such individual is not taken into account for purposes of this section. 4. Interests Measured ------------------ (a) An individual's Interest in a Defined Contribution Plan is equal to his account balance for that plan determined in accordance with the rules described in Code section 416(g) and regulations promulgated thereunder by the Secretary of the Treasury. (b) An individual's Interest in a Defined Benefit Plan is equal to the present value of his cumulative accrued benefit for that plan as of the Top- Heavy Determination Date determined in accordance with the rules described in Code section 416(g) and regulations promulgated thereunder by the Secretary of the Treasury and in accordance with the following paragraphs: (1) There are no specific prescribed actuarial assumptions that must be used for determining the present value of a cumulative accrued benefit. The assumptions used must be reasonable and need not relate to the plan's actual investment and other experience. The assumptions need not be the same as those used for minimum funding purposes or for purposes of determining the actuarial equivalence of optional benefits under the plan. For purposes of this Plan, if a plan that is part of the same Aggregation Group as this Plan does not specify the actuarial assumptions it uses for determining the present value of a cumulative accrued benefit, the assumptions used must be those used in that plan for purposes of determining the actuarial equivalence of optional benefits under the plan (or, if no optional benefits are available, those used for minimum funding purposes), except that the interest assumption must be (as described in 29 C.F.R. (S) 2619.26(c)(2)(iv)) the PBGC interest rate for immediate annuities in effect on the Top-Heavy Valuation Date as set forth in Appendix B (as amended) to Part 2619 of 29 C.F.R. If a plan specifies the actuarial assumptions it uses for determining the present value of its cumulative accrued benefit, those assumptions govern for purposes of this Plan as to that plan's cumulative accrued benefits. (2) The present value must be computed using an interest and a post- retirement mortality assumption but consistent with paragraph (1). Pre- retirement mortality and future increases in costs of living (but not in the maximum dollar amount APPENDIX A-3

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 permitted by Code section 415(d)) may also be assumed. However, assumptions as to future withdrawal or future salary increases may not be used. (3) In the case of a Defined Benefit Plan that provides a joint and survivor annuity within the meaning of Code section 401(a)(11) as a normal form of benefit, for purposes of determining the present value of the cumulative accrued benefit, the participant's spouse may be assumed to be the same age as the participant. (4) Unless a Defined Benefit Plan provides for a non-proportional subsidy according to paragraph (7), the present value must reflect a benefit payable beginning at the plan's normal retirement age (or attained age, if later). Benefits not relating to retirement benefits, such as pre- retirement death and disability benefits and post-retirement medical benefits, must not be taken into account. Subsidized early retirement benefits and subsidized benefit options must not be taken into account unless they are nonproportional subsidies according to paragraph (7). (5) If a Defined Benefit Plan provides for a nonproportional subsidy, the benefit should be assumed to begin at the age at which the benefit is most valuable. (6) If two or more Defined Benefit Plans are being tested under Appendix section 3, the actuarial assumptions used for all plans within an Aggregation Group must be the same. If paragraph (1) would otherwise cause the preceding sentence to be violated, Albemarle Corporation must select one plan's assumptions and use them as adjusted according to the other paragraphs in this subsection. (7) For purposes of this subsection, a subsidy is nonproportional unless the subsidy applies to a group of employees that would independently satisfy the requirements of Code section 410(b). 5. Minimum Benefits for Top-Heavy Plans ------------------------------------ (a) For any Plan Year in which this Plan is a Top-Heavy Plan, the provisions of this section supersede conflicting Plan provisions regarding contributions, allocations, and accrual of benefits under this Plan. (b) For purposes of this section, all Defined Contribution Plans that are part of an Aggregation Group with this Plan are treated as one Defined Contribution Plan, and all Defined Benefit Plans that are part of an Aggregate Group with this Plan are treated as one Defined Benefit Plan. According to the other provisions of this Appendix, Albemarle Corporation may elect to satisfy the minimum benefit requirements of this Plan section within this Plan, within any one or more of the other plans within this Plan's Aggregation Group, or by aggregating amounts from this Plan and one or more of those other plans. APPENDIX A-4

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (c) Each Non-Key Employee with regard to this Plan who is eligible under the Plan for an allocation from contributions that the Company might make must receive the minimum benefit required by Code section 416(c)(2), as described in subsection (d), if he has not separated from service at the end of the Plan Year. In addition, each Non-Key Employee with regard to this Plan who has not separated from service at the end of the Plan Year and who has otherwise failed to satisfy this Plan's requirements to be eligible to receive an allocation (in full or in part) from contributions that the Company or an Affiliate might make (whether the ineligibility relates to insufficient service during the Plan Year, absence of required contributions, or insufficient Earnings) must also receive the Code section 16(c)(2) minimum benefit if he must be considered for this Plan to satisfy the coverage requirements of Code section 410(b) in accordance with Code section 401(a)(5). (d) Except as provided in subsection (e), this Plan will satisfy the minimum benefit required by Code section 416(c)(2) if the sum of employer contributions and forfeitures allocated to the account of each Non-Key Employee for each Plan Year in which the Plan is a Top-Heavy Plan equals three percent (3%) of such Non-Key Employee's compensation (within the meaning of Code section 415) for that Plan Year. (e) The percentage referred to in subsection (d) for any Plan Year may not exceed the highest percentage at which employer contributions and forfeitures are allocated to any Key Employee for the Plan Year under this Plan or any plan within this Plan's Aggregation Group. The highest percentage will be determined as the ratio of the sum of employer contributions made (or required to be made without regard to waivers granted pursuant to Code section 412(d)) and forfeitures allocated to such Key Employee's account divided by his Earnings for the Plan Year. (f) Subsection (e) does not apply if this Plan must be part of a Mandatory Aggregation Group and if this Plan enables a Defined Benefit Plan included in such Mandatory Aggregation Group to meet the requirements of Code section 401(a) or 410. The alternative lower percentage in such situation is computed in the same manner as described in subsection (e) except that the dependent Defined Benefit Plan's benefits for Key Employees are included in the computation after having been converted to equivalent contributions pursuant to the procedures prescribed in Rev. Rul. 81-202, 1981-2 C.B. 93. (g) An individual's minimum benefit described in this section that is required from this Plan for a Plan Year is equal to the full benefit described in subsection (d), (e) or (f) reduced by the total of all allocations received for the Plan Year from any employer contributions or from forfeitures from any other Defined Contribution Plan. (h) In the case of a Member who is also covered under a Defined Benefit Plan that is part of this Plan's Aggregation Group, this Plan will be deemed to satisfy the minimum benefit requirement of Code section 416(c)(2) if each Non- Key Employee Member receives a minimum benefit under the Defined Benefit Plan that satisfies Code section 16(c)(1). APPENDIX A-5

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 (i) In determining a Member's minimum-benefit entitlement and in determining whether that entitlement has been satisfied, any employer contribution attributable to a salary reduction or similar arrangement is not taken into account. 6. Aggregate Contribution and Benefit Limitations ---------------------------------------------- (a) For any Plan Years in which this Plan is a Top-Heavy Plan, the provisions of this section supersede conflicting Plan provisions regarding limitations on contribution and benefits under this Plan. (b) Plan sections 8.02(b)(1) and (2) will be applied by substituting "1.0" for "1.25," and Plan section 8.02(d) will be applied by substituting "$41,500" for "$51,875." (c) Subsection (b) will not apply with respect to this Plan if the requirements of (1) and (2) below are met with respect to the Plan. (1) The requirements of this paragraph are met with respect to the Plan if this Plan (and any plan in this Plan's Mandatory Aggregation Group) meets the minimum benefit requirement of Appendix section 6 applied by substituting "four percent" (4%) for "three percent" (3%). (2) The requirements of this paragraph are met with respect to the Plan if this Plan would not be a Top-Heavy Plan as determined under Appendix section 3 if "ninety percent" (90%) were substituted for "sixty percent" (60%) each place it appears. APPENDIX A-6

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 EXHIBIT I --------- SPECIAL PROVISIONS APPLICABLE TO CERTAIN UNION EMPLOYEES -------------------------------------------------------- A. Applicability ------------- This Exhibit I describes the conditions of participation for Employees that are members of certain collective bargaining units or other employee groups specified below. The effective dates and the specific conditions of participation for Employees of each such collective bargaining unit and employee group are set forth below. Existing provisions of the Plan shall remain in effect except to the extent that they are modified or superseded by this Exhibit I. In addition, unless otherwise specifically modified, terms used in this Exhibit I not expected to be capitalized by normal rules of capitalization shall have the meanings set forth in the Plan. B. Provisions Applicable to Union Employees at the Houston, Texas Plant of ----------------------------------------------------------------------- Albemarle Corporation --------------------- Employees represented by the Oil, Chemical and Atomic Workers International Union, AFL-CIO, Local Union No. 4-16000, Houston, Texas, the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, AFL-CIO, Local Union 211, Houston, Texas, the Sheet Metal Workers International Association, AFL-CIO, Local Union No. 54, Houston, Texas, and the International Brotherhood of Electrical Workers, AFL-CIO, Local Union No. 716, Houston, Texas, are eligible to become Members of the Plan pursuant to agreements between the collective bargaining representatives of such unions and the Company. Employees so represented are Members of the Plan subject to the following specific terms and conditions: 1. After-Tax Contributions. Notwithstanding Plan section 3.01, for ----------------------- each Member covered by a collective bargaining agreement described in this Exhibit I, section B, the percentage of Base Pay designated in an After-Tax Election may range from a minimum of one percent (1%) to a maximum of ten percent (10%), determined in even multiples of one percent (1%); provided, however, that the elected percentage for a Payroll Period, when added to the Pre-Tax Election percentage in effect for such Member under Plan section 3.03 (as limited by the terms specified in this Exhibit I, section B) for that Payroll Period, shall not exceed ten percent (10%) of his Base Pay for that Payroll Period. 2. Pre-Tax Elections. Notwithstanding Plan section 3.03, for each ----------------- Member covered by a collective bargaining agreement described in this Exhibit I, section B, the percentage of Base Pay designated in a Pre-Tax Election may range from a minimum of one percent (1%) to a maximum of ten percent (10%), determined in even multiples of EXHIBIT I-1

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 one percent (1%); provided, however, that the elected percentage for a -------- ------- Payroll Period, when added to the After-Tax Contribution percentage in effect for such Member under Plan section 3.01 (as limited by the terms specified in this Exhibit I, section B) for that Payroll Period, shall not exceed ten percent (10%) of his Base Pay for that Payroll Period. 3. Company Matching Contributions. Notwithstanding Plan section ------------------------------ 3.08, the Company shall contribute each Payroll Period on behalf of each contributing Member covered by a collective bargaining agreement described in this Exhibit I, section B, an amount equal to the following: For Payroll Periods beginning March 1, 1994, and ending October 31, 1994, fifty percent (50%) of each such Member's After-Tax Contributions deducted for that Payroll Period pursuant to numbered paragraph (1) above and fifty percent (50%) of each such Member's Pre-Tax Contribution allocated for that Payroll Period pursuant to numbered paragraph (2) above, provided, however, that the contribution made by the Company on behalf of each such Member for any Payroll Period shall not exceed two percent (2%) of his Base Pay for that Payroll Period. For Payroll Periods beginning November 1, 1994, and ending October 31, 1995, fifty percent (50%) of each such Member's After-Tax Contributions deducted for that Payroll Period pursuant to numbered paragraph (1) above and fifty percent (50%) of each such Member's Pre-Tax Contribution allocated for that Payroll Period pursuant to numbered paragraph (2) above, provided, however, that the contribution made by the Company on behalf of each such Member for any Payroll Period shall not exceed three percent (3%) of his Base Pay for that Payroll Period. For Payroll Periods beginning November 1, 1995, fifty percent (50%) of each such Member's After-Tax Contributions deducted for that Payroll Period pursuant to numbered paragraph (1) above and fifty percent (50%) of each such Member's Pre-Tax Contribution allocated for that Payroll Period pursuant to numbered paragraph (2) above, provided, however, that the contribution made by the Company on behalf of each such Member for any Payroll Period shall not exceed five percent (5%) of his Base Pay for that Payroll Period. C. Provisions Applicable to Union Employees at the Baton Rouge, Louisiana ---------------------------------------------------------------------- Process Development Center of Albemarle Corporation --------------------------------------------------- Employees represented by the Allied Oil Workers Union, Baton Rouge, Louisiana (Affiliate No. 7 of the National Federation of Independent Unions) and designated as performing production and maintenance services, are eligible to become Members of the Plan pursuant to agreements between the collective bargaining representatives of such unions and the Company. Employees so represented are Members of the Plan subject to the following specific terms and conditions: EXHIBIT I-2

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 1. After-Tax Contributions. Notwithstanding Plan section 3.01, for ----------------------- each Member covered by a collective bargaining agreement described in this Exhibit I, section C, the percentage of Base Pay designated in an After-Tax Election may range from a minimum of one percent (1%) to a maximum of ten percent (10%), determined in even multiples of one percent (1%); provided, however, that the elected percentage for a Payroll Period, when added to the Pre-Tax Election percentage in effect for such Member under Plan section 3.03 (as limited by the terms specified in this Exhibit I, section C) for that Payroll Period, shall not exceed ten percent (10%) of his Base Pay for that Payroll Period. 2. Pre-Tax Elections. Notwithstanding Plan section 3.03, for each ----------------- Member covered by a collective bargaining agreement described in this Exhibit I, section C, the percentage of Base Pay designated in a Pre-Tax Election may range from a minimum of one percent (1%) to a maximum of ten percent (10%), determined in even multiples of one percent (1%); provided, however, that the elected percentage for a Payroll Period, when added to the After-Tax Contribution percentage in effect for such Member under Plan section 3.01 (as limited by the terms specified in this Exhibit I, section C) for that Payroll Period, shall not exceed ten percent (10%) of his Base Pay for that Payroll Period. 3. Company Matching Contributions. Notwithstanding Plan section ------------------------------ 3.08, the Company shall contribute each Payroll Period on behalf of each contributing Member covered by a collective bargaining agreement described in this Exhibit I, section C, an amount equal to the following: For Payroll Periods beginning March 1, 1994, and ending September 30, 1995, fifty percent (50%) of each such Member's After-Tax Contributions deducted for that Payroll Period pursuant to numbered paragraph (1) above and fifty percent (50%) of each such Member's Pre-Tax Contribution allocated for that Payroll Period pursuant to numbered paragraph (2) above, provided, however, that the contribution made by the Company on behalf of each Member based on his After-Tax Contributions and Pre-Tax Contributions for any Payroll Period shall not exceed three percent (3%) of his Base Pay for that Payroll Period. For Payroll Periods beginning October 1, 1995, and ending December 31, 1996, fifty percent (50%) of each such Member's After-Tax Contributions deducted for that Payroll Period pursuant to numbered paragraph (1) above and fifty percent (50%) of each such Member's Pre-Tax Contribution allocated for that Payroll Period pursuant to numbered paragraph (2) above, provided, however, that the contribution made by the Company on behalf of each Member based on his After-Tax Contributions and Pre-Tax Contributions for any Payroll Period shall not exceed four percent (4%) of his Base Pay for that Payroll Period. EXHIBIT I-3

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 For Payroll Periods beginning January 1, 1997, fifty percent (50%) of each such Member's After-Tax Contributions deducted for that Payroll Period pursuant to numbered paragraph (1) above and fifty percent (50%) of each such Member's Pre-Tax Contribution allocated for that Payroll Period pursuant to numbered paragraph (2) above, provided, however, that the contribution made by the Company on behalf of each Member based on his After-Tax Contributions and Pre-Tax Contributions for any Payroll Period shall not exceed five percent (5%) of his Base Pay for that Payroll Period. D. Provisions Applicable to Bargaining Unit Employees at the Orangeburg, South --------------------------------------------------------------------------- Carolina Plant of Albemarle Corporation --------------------------------------- Employees represented by the General Drivers, Warehousemen And Helpers, Local Union #509 Affiliated With The International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, are eligible to become Members of the Plan pursuant to an agreement between the collective bargaining representative of such union and the Company. Employees so represented are Members of the Plan subject to the following specific terms and conditions: 1. After-Tax Contributions. Notwithstanding Plan section 3.01, for ----------------------- each Member covered by a collective bargaining agreement described in this Exhibit I, section D, the percentage of Base Pay designated in an After-Tax Election may range from a minimum of one percent (1%) to a maximum of ten percent (10%), determined in even multiples of one percent (1%); provided, however, that the elected percentage for a Payroll Period, when added to the Pre-Tax Election percentage in effect for such Member under Plan section 3.03 (as limited by the terms specified in this Exhibit I, section D) for that Payroll Period, shall not exceed ten percent (10%) of his Base Pay for that Payroll Period. 2. Pre-Tax Elections. Notwithstanding Plan section 3.03, for each ----------------- Member covered by a collective bargaining agreement described in this Exhibit I, section D, the percentage of Base Pay designated in a Pre-Tax Election may range from a minimum of one percent (1%) to a maximum of ten percent (10%), determined in even multiples of one percent (1%); provided, however, that the elected percentage for a Payroll Period, when added to the After-Tax Contribution percentage in effect for such Member under Plan section 3.01 (as limited by the terms specified in this Exhibit I, section D) for that Payroll Period, shall not exceed ten percent (10%) of his Base Pay for that Payroll Period. 3. Company Matching Contributions. Notwithstanding Plan section ------------------------------ 3.08, the Company shall contribute each Payroll Period on behalf of each contributing Member covered by a collective bargaining agreement described in this Exhibit I, section D, an amount equal to the following: EXHIBIT I-4

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 For Payroll Periods beginning March 1, 1994, and ending September 30, 1994, fifty percent (50%) of each such Member's After-Tax Contributions deducted for that Payroll Period pursuant to numbered paragraph (1) above and fifty percent (50%) of each such Member's Pre-Tax Contribution allocated for that Payroll Period pursuant to numbered paragraph (2) above, provided, however, that the contribution made by the Company on behalf of each such Member for any Payroll Period shall not exceed one percent (1%) of his Base Pay for that Payroll Period. For Payroll Periods beginning October 1, 1994, and ending May 31, 1996, fifty percent (50%) of each such Member's After-Tax Contributions deducted for that Payroll Period pursuant to numbered paragraph (1) above and fifty percent (50%) of each such Member's Pre-Tax Contribution allocated for that Payroll Period pursuant to numbered paragraph (2) above, provided, however, that the contribution made by the Company on behalf of each such Member for any Payroll Period shall not exceed two percent (2%) of his Base Pay for that Payroll Period. For Payroll Periods beginning June 1, 1996, and ending May 31, 1997, fifty percent (50%) of each such Member's After-Tax Contributions deducted for that Payroll Period pursuant to numbered paragraph (1) above and fifty percent (50%) of each such Member's Pre-Tax Contribution allocated for that Payroll Period pursuant to numbered paragraph (2) above, provided, however, that the contribution made by the Company on behalf of each such Member for any Payroll Period shall not exceed three percent (3%) of his Base Pay for that Payroll Period. For Payroll Periods beginning June 1, 1997, fifty percent (50%) of each such Member's After-Tax Contributions deducted for that Payroll Period pursuant to numbered paragraph (1) above and fifty percent (50%) of each such Member's Pre-Tax Contribution allocated for that Payroll Period pursuant to numbered paragraph (2) above, provided, however, that the contribution made by the Company on behalf of each such Member for any Payroll Period shall not exceed four percent (4%) of his Base Pay for that Payroll Period. EXHIBIT I-5

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 EXHIBIT II ---------- SPECIAL PROVISIONS APPLICABLE TO CERTAIN FORMER AMOCO EMPLOYEES ------------------------------- A. Applicability and Scope ----------------------- (1) The provisions of this Exhibit II apply in addition to the other terms of the Plan, of which this Exhibit II is a part. Any situation not addressed by the provisions of this Exhibit II are controlled by the general terms of the Plan. (2) The provisions of this Exhibit II apply to any Member who is a Transferred Employee and who was a participant in the Amoco Plan on June 26, 1992, and whose account balance (including any notes) was transferred to the Ethyl Plan as of September 1, 1992. (3) The provisions of this Exhibit II apply only with respect to the Amoco Amount. B. Definitions ----------- For purposes of this Exhibit II, any term defined below will have the indicated meaning. Any term used in this Exhibit II that is not defined below has the meaning set forth in the Plan. (1) Affected Member means any Member who was a Transferred Employee and whose account balance that was transferred to the Plan includes the Amoco Amount. (2) Amoco means the Amoco Company and any other entity that adopted the Amoco Plan prior to June 26, 1992. (3) Amoco Amount means with respect to each Affected Member, the applicable portion of the total amount transferred to the Plan from the Ethyl Plan (including any notes), as set forth in Schedule A. (4) Amoco Plan means the Amoco Employee Savings Plan. C. Special Provisions ------------------ (1) Without regard to Plan section 7.06(a)(1), each Affected Member shall have the right to withdraw in cash up to one hundred percent (100%) of the Amoco Amount that is attributable to any after-tax employee contributions (less any prior EXHIBIT II-1

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 withdrawals), but in no event shall an Affected Member withdraw more than the balance of the applicable account as of the effective date of the withdrawal. (2) Each Affected Member shall have the right to withdraw in cash up to one hundred percent (100%) of the Amoco Amount attributable to Amoco contributions (other than pre-tax contribution amounts that are treated as employer contributions and less any prior withdrawals), but in no event shall an Affected Member withdraw more than the balance of the applicable account as of the effective date of the withdrawal. (3) Each Affected Member shall have the right to withdraw in cash up to one hundred percent (100%) of the Amoco Amount attributable to pre-tax employee contributions for the purpose of paying funeral expenses for a family member, provided that all other applicable provisions for hardship withdrawals, set forth in Plan section 7.06(b)(2), are met. (4) Upon termination from the employment of the Company for any reason prior to retirement, each Affected Member shall have the right to receive the Amoco Amount (less any prior withdrawals) in the form of: a. a lump sum which he may elect to receive at any time up to age sixty-five (65) ; or b. in ten (10) annual equal cash installments commencing as soon as practicable after his employment terminates. However, in no event shall such right extend to more than the balance of the Affected Member's account as of the effective date of the distribution. (5) Upon an Affected Member's termination from employment of the Company on or after attaining age sixty-five (65) or on or after attaining age fifty (50) and completing fifteen (15) years of service with the Company (including service with Amoco and Ethyl), each Affected Member shall have the right to receive a. the Amoco Amount in the form of a lump sum at any time before age seventy and one-half (70 1/2); or b. the Amoco Amount in the form of monthly, quarterly or annual cash installments, the frequency and amount of which may be changed at any time; and c. the right to receive any portion of the Amoco Amount in cash at least once per month. EXHIBIT II-2

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 However, in no event shall such right extend to more than the balance of the Affected Member's account as of the effective date of the distribution. Any such distribution method must comply with Code section 401(a)(9). (6) For any Affected Member for whom the Amoco Amount includes any note for an outstanding loan: a. the Affected Member may retire such loan at any time and have the outstanding amount, including interest, treated as a withdrawal; b. if the outstanding amount of the loan is not prepaid at the time the Affected Member ceases employment with the Company, the loan will be treated as a distribution upon the Affected Member's separation; c. if the Affected Member at any time defaults on an outstanding loan, the Administrator may take any action it deems necessary to protect the interest of the Plan; and d. amounts the Affected Member repays in accordance with the terms of a note shall be allocated as follows: (i) Each payment (i.e., principal plus interest) will be credited on a pro rata basis to the Affected Member's Pre-Tax Account, Rollover Account, After-Tax Account, and/or Matching Contribution Account in an amount that bears the same relationship to the total repayment amount as the amount originally borrowed from that account bears to the total amount originally borrowed and (ii) repayments credited to each account will be invested in accordance with the Affected Member's investment election with respect to his Account in effect at the time payment is received. If the Affected Member has not elected an investment option for a particular account, repayments credited to that account will be invested in the Money Market Fund. EXHIBIT II-3

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 SCHEDULE A TO EXHIBIT II ------------------------ THE AMOCO AMOUNT* ----------------- <TABLE> <CAPTION> ================================================================================================================================ Amoco After-Tax After-Tax Contributions Unmatched Matchable Interest on Attributable Employee Employee Amoco Matching Rollover to Pre-tax Employee SS# Contributions/1/ Contributions/2/ Contributions/3/ Amounts Elections/4/ Totals/5/ -------- --- ---------------- ---------------- ---------------- ------- ------------ --------- ================================================================================================================================ <S> <C> <C> <C> <C> <C> <C> <C> M.P. Allred ###-##-#### -0- 8,850.51 1.48 8,872.01 17,724.00 -------------------------------------------------------------------------------------------------------------------------------- R.A. Armstrong ###-##-#### 978.88 6,358.01 .71 4,263.38 11,600.98 -------------------------------------------------------------------------------------------------------------------------------- G.A. Caston ###-##-#### 8,095.10 4,704.70 1.70 8,694.86 21,496.36 -------------------------------------------------------------------------------------------------------------------------------- S. Foster ###-##-#### 2,748.65 3,875.68 .81 980.81 7,605.95 -------------------------------------------------------------------------------------------------------------------------------- J.E. Henry ###-##-#### 83.41 7,479.90 1.14 7,374.35 14,938.80 -------------------------------------------------------------------------------------------------------------------------------- R.J. McClure ###-##-#### 6,247.54 8,273.14 2.09 15,865.41 30,388.18 -------------------------------------------------------------------------------------------------------------------------------- K.D. Mitchell ###-##-#### 8,154.49 1.57 7,840.01 15,996.07 -------------------------------------------------------------------------------------------------------------------------------- G.L. Morace ###-##-#### 8,489.53 31,922.95 7.99 55,552.04 95,972.51 -------------------------------------------------------------------------------------------------------------------------------- B.A. Nawrocki ###-##-#### 40,111.60 87,464.89 13.42 3,968.42 131,558.33 -------------------------------------------------------------------------------------------------------------------------------- J.L. Paul ###-##-#### 1,390.94 8,241.33 1.78 21,228.00 30,862.05 -------------------------------------------------------------------------------------------------------------------------------- F. Sidorowicz ###-##-#### 14,348.13 55,913.57 6.13 2,703.37 72,971.20 -------------------------------------------------------------------------------------------------------------------------------- R.S. Szwabowski ###-##-#### 404.33 3,904.62 .82 3,435.06 7,744.83 -------------------------------------------------------------------------------------------------------------------------------- H.W. Whittington ###-##-#### 10,948.48 19,046.16 3.19 -0- 29,997.83 ================================================================================================================================ </TABLE> _________________________ * See definition in Exhibit II. /1/ Amounts in this account as of August 31, 1992, were combined with amounts in the after-tax matchable employee contribution account and transferred to the After-Tax Account under the Ethyl Plan. /2/ Amounts in this account as of August 31, 1992, were combined with amounts in the after-tax unmatched employee contribution account and transferred to the After-Tax Account under the Ethyl Plan. /3/ Amounts in this account as of August 31, 1992, were transferred to the Matching Account under the Ethyl Plan. /4/ Amounts in this account as of August 31, 1992, were transferred to the Pre-Tax Account under the Ethyl Plan. /5/ The Amoco Amount received on behalf of each Affected Member was invested in either Option D or E under the Ethyl Plan in the percent directed by the Affected Member as of September 1, 1992. Effective November 1, 1993, or as soon as administratively feasible thereafter, each Affected Member was permitted to direct the investment of his Amoco amounts in any of the Active Investment Funds under the Ethyl Plan in accordance with the applicable provisions of Plan section 5.05 of the Ethyl Plan. EXHIBIT II-4

Savings Plan For The Employees Of Albemarle Corporation As Amended and Restated Effective January 1, 2001 EXHIBIT III ----------- INVESTMENT FUNDS ---------------- The following Investment Funds are available under the Plan as of November 1, 1997 (or as of the date thereafter that the Trustee's transition ("black- out") period has expired. Pooled Investment Funds ----------------------- Merrill Lynch Retirement Preservation Trust PIMCO Total Return Fund Class A Merrill Lynch Capital Fund Class A Merrill Lynch Equity Index Trust 1 Davis New York Venture Fund Class A Merrill Lynch Growth Fund Class A Franklin Small Cap Growth Fund Ivy International Fund Class A Alliance Premier Growth Fund Class A Oppenheimer Capital Appreciation Fund (added effective January 1, 2001) Oppenheimer International Growth Fund (added effective January 1, 2001) Stock Funds ----------- Albemarle Corporation Common Stock Fund Ethyl Corporation Common Stock Fund Tredegar Industries, Inc. Common Stock Fund * The Pooled Investment Funds and the Albemarle Stock Fund also are referred to as Active Investment Funds. The Ethyl Stock Fund and Tredegar Stock Fund are referred to as Inactive Investment Funds. EXHIBIT III-1

EXHIBIT 10.5 ALBEMARLE CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN As Amended and Restated Effective April 26, 2000

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 TABLE OF CONTENTS ----------------- <TABLE> <CAPTION> Section Page ------- ---- <S> <C> INTRODUCTION................................................................. 1 ARTICLE I DEFINITIONS........................................................ 2 1.01. Actuarial Equivalent............................................... 2 1.02. Affiliate.......................................................... 2 1.03. Annuity Starting Date.............................................. 2 1.04. Beneficiary........................................................ 2 1.05. Board.............................................................. 2 1.06. Code............................................................... 2 1.07. Committee.......................................................... 2 1.08. Company............................................................ 2 1.09. Control Change Date................................................ 2 1.10. Disability or Disabled............................................. 2 1.11. Eligible Employee.................................................. 2 1.12. Participant........................................................ 3 1.13. Plan............................................................... 3 1.14. Qualified Preretirement Survivor's Annuity......................... 3 1.15. Retirement and Retire.............................................. 3 1.16. Retirement Plan.................................................... 3 1.17. Savings Plan....................................................... 3 1.18. Supplemental Retirement Account.................................... 3 ARTICLE II PARTICIPATION..................................................... 3 ARTICLE III BENEFITS......................................................... 4 3.01. Amount of Benefit.................................................. 4 3.02. Death Benefits..................................................... 7 3.03. Timing and Form of Payment......................................... 8 ARTICLE IV VESTING........................................................... 9 ARTICLE V COORDINATION OF BENEFITS........................................... 9 ARTICLE VI GUARANTEES........................................................ 10 ARTICLE VII TERMINATION, AMENDMENT OR MODIFICATION OF PLAN................... 10 7.01. Plan Termination................................................... 10 7.02. Notice Requirement................................................. 10 7.03. Effect of Plan Termination......................................... 11 </TABLE> -i-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 <TABLE> <CAPTION> Page ---- <S> <C> ARTICLE VIII OTHER BENEFITS AND AGREEMENTS................................... 11 ARTICLE IX RESTRICTIONS ON TRANSFER OF BENEFITS.............................. 11 ARTICLE X ADMINISTRATION OF THE PLAN......................................... 12 10.01. THE COMMITTEE..................................................... 12 10.02. INDEMNIFICATION OF THE COMMITTEE.................................. 12 10.03. POWERS OF THE COMMITTEE........................................... 12 10.04. INFORMATION....................................................... 12 10.05. CLAIMS REVIEW PROCEDURES.......................................... 12 ARTICLE XI MISCELLANEOUS..................................................... 13 11.01. NO GUARANTEE OF EMPLOYMENT........................................ 13 11.02. BINDING NATURE.................................................... 13 11.03. GOVERNING LAW..................................................... 13 11.04. MASCULINE AND FEMININE; SINGULAR AND PLURAL....................... 13 ARTICLE XII ADOPTION......................................................... 13 APPENDIX I................................................................... 15 APPENDIX II.................................................................. 16 </TABLE> -ii-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 INTRODUCTION ------------ Albemarle Corporation has adopted the Albemarle Corporation Supplemental Executive Retirement Plan (the "Plan") effective April 26, 2000. The Plan represents an amendment and restatement of the Albemarle Corporation Excess Benefit Plan and the Albemarle Corporation Supplemental Retirement Plan which were originally adopted by the Board on February 8, 1994. The Excess Benefit Plan and the Supplemental Retirement Plan were amended effective April 26, 2000, to simplify the Plans' administration with respect to the calculation of benefits and to clarify the benefits provided to certain employees. In addition, effective as of April 26, 2000, the Excess Benefit Plan and the Supplemental Plan are merged. The resulting plan is renamed the Albemarle Corporation Supplemental Executive Retirement Plan. The Board believes that the adoption of the Plan will assist it in attracting and retaining those employees, whose judgment, abilities and experience will contribute to the Company's success. The Plan is intended to be a plan that is unfunded and maintained primarily for the purpose of providing deferred compensation for a "select group of management or highly compensated employees" (as such phrase is used in the Employee Retirement Income Security Act of 1974, as amended). The Plan must be administered and construed in a manner that is consistent with that intent. The Plan provides the following benefits: 1. The difference between (i) the actuarially equivalent value of the benefits actually received by such employee under the Company's tax- qualified employee pension benefit plans and (ii) the actuarially equivalent value of the benefits such employee would have received under such plans but for the application of Code section 415; 2. The difference between (i) the employee's accrued benefits under the Company's tax-qualified employee pension benefit plans, as amended from time to time, in light of the compensation cap provided under Code section 401(a)(17) and (ii) the full value of the benefits such employee would otherwise have received under such plans but for such limitation; 3. The benefits lost as a result of the limitations under Code sections 401(k), 401(m), and 402(g). 4. The Board also approved the provision of supplemental executive retirement benefits to designated executives whose relatively short service with the Company or an Affiliate would otherwise limit their career retirement benefits. To the extent an individual who is designated specially as a Plan participant is entitled to such benefits, they are provided hereunder. -1-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 ARTICLE I DEFINITIONS 1.01. Actuarial Equivalent means a benefit of equivalent value based on the -------------------- factors and assumptions employed in determining actuarial equivalencies to the normal form of benefit under the Retirement Plan. 1.02. Affiliate means any entity that is a member of a controlled group of --------- corporations as defined in Code section 1563(a), determined without regard to Code sections 1563(a)(4) and 1563(e)(3)(c), of which the Corporation is a member according to Code section 414(b), and which has, with the approval of the Board, adopted the Plan by action of its board. 1.03. Annuity Starting Date means the first day of the first month for which --------------------- a benefit is payable under the Plan. 1.04. Beneficiary means the person, persons, entity, entities or the estate ----------- of a Participant which is designated by the Retirement Plan or a Participant, contingent annuitant or beneficiary, in accordance with the Retirement Plan, to receive any benefits that may become payable under the Retirement Plan or, if none, to the person or entity so designated under the Savings Plan as a result of the Participant's death or on a form provided by the Company for such purpose. 1.05. Board means the Board of Directors of Albemarle Corporation. ----- 1.06. Code means the Internal Revenue Code of 1986, as amended. ---- 1.07. Committee means the Executive Committee of the Board which shall, in --------- accordance with the provisions of Article X hereof, be responsible for the management and administration of the Plan. 1.08. Company means Albemarle Corporation. ------- 1.09. Control Change Date is defined in Appendix II attached hereto. ------------------- 1.10. Disability or Disabled shall have the same meanings such terms ---------- -------- disability benefit plan. 1.11. Eligible Employee means an individual employed by the Company or an ----------------- Affiliate who is in a select group of management or is a highly compensated employee of the Company and its Affiliates. An individual shall remain an Eligible Employee only so long as the individual remains in such select management group or continues to be highly compensated. -2-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 1.12. Participant means, so long as he remains so designated or to the ----------- extent he has accrued a vested benefit under the Plan, an Eligible Employee who becomes a participant in the Plan in accordance with Article II. 1.13. Plan means the Albemarle Corporation Supplemental Executive Retirement ---- Plan, which is a result of the April 26, 2000, merger of the Albemarle Corporation Supplemental Retirement Plan and the Albemarle Corporation Excess Benefit Plan. 1.14. Qualified Preretirement Survivor's Annuity means the monthly benefit ------------------------------------------ payable to the surviving spouse, if any, on the death of a Participant prior to his Annuity Starting Date in the form determined under Section 7.01(c)(1) or (2) of the Retirement Plan, as applicable. 1.15. Retirement and Retire mean separation from employment with the ---------- ------ Company or an Affiliate at or after satisfying the requirements for early retirement under the terms of the Retirement Plan and the commencement of benefits thereunder. 1.16. Retirement Plan means, unless another plan or plans are specifically --------------- designated by the Committee in lieu thereof in the case of any Plan Participant, the Retirement Income Plan for the Employees of Albemarle Corporation or, in the case of a Plan Participant employed by an Affiliate which has adopted the Plan but which does not participate in the Retirement Income Plan for the Employees of Albemarle Corporation, any defined benefit plan sponsored by such Affiliate in which the Participant in question participates. 1.17. Savings Plan means, unless another plan or plans are specifically ------------ designated by the Committee in lieu thereof in the case of any Plan Participant, the Savings Plan for the Employees of Albemarle Corporation or, in the case of a Plan Participant employed by an Affiliate which has adopted the Plan but which does not participate in the Savings Plan for the Employees of Albemarle Corporation, any defined contribution plan sponsored by such Affiliate in which the Participant in question participates. 1.18. Supplemental Retirement Account means an account established under a ------------------------------- funded plan on behalf of a Plan Participant who also participates in such plan. ARTICLE II PARTICIPATION Each Eligible Employee shall automatically become a Participant in the Plan, with respect to the excess benefits and supplemental benefits provided under Plan sections 3.01(a) and (b), as of the date his benefit under the Retirement Plan or Savings Plan is first limited by Code section 401(a)(17) and/or 415. An Eligible Employee recommended by the Company's Executive Committee and approved by the Executive Compensation Committee shall become a Participant in the Plan, with respect to the short service benefit provided under Plan -3-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 sections 3.01(c), 3.01(e) and (g), as of the effective date designated by the Company's Executive Committee. An Eligible Employee who becomes a Participant with respect to a benefit under Plan sections 3.01(c), 3.01(e) and (g), shall continue to participate in the Plan with respect to such benefit until such date as the Company's Executive Committee may declare the individual in question no longer eligible to participate. ARTICLE III BENEFITS 3.01. Amount of Benefit. ----------------- Except as provided in Article V (Coordination of Benefits) and subject to the limitations set forth in Articles IV (Vesting), VI (Guarantees) and VII (Termination, Amendment, or Modification of Plan), the benefits of a Participant and his Beneficiary shall be as follows: (a) Excess Benefit. A Participant shall be entitled to a benefit equal to --------------- the Actuarial Equivalent of the difference between (i) the benefits that accrue to the Participant under the Retirement Plan plus the employer-provided accrued benefit (exclusive of earnings reduction contributions) under the Savings Plan and (ii) the benefits the Participant would have accrued under the Retirement Plan plus the employer-provided accrued benefit (exclusive of earnings reduction contributions) under the Savings Plan but for the application of Code section 415 (the annual limit on benefits under the Retirement Plan ($135,000 for 2000) and the annual limit on contributions under the Savings Plan ($30,000 for 2000)). (b) Supplemental Benefit. A Participant shall be entitled to a benefit --------------------- equal to (i) and (ii) below where: (i) equals the Actuarial Equivalent of the difference between the benefits the Participant would have accrued under the Retirement Plan but for the application of the limits set forth in Code section 401(a)(17) (the annual limit on compensation taken into account under the Retirement and Savings Plan ($170,000 for 2000)) and Code section 415, as applicable, and the benefits that accrued to the Participant under the Retirement Plan; and (ii) equals the value of a bookkeeping account which is credited each year with the number of shares of Albemarle Corporation Common Stock equal to the Matching Contributions that would have been allocated under the Savings Plan without regard to the following limitations: (i) the limits set forth in Code section 401(a)(17), if applicable; (ii) the limits set forth under Code section 415, if applicable; and (iii) the limitations imposed by Code sections 401(k), 401(m) and 402(g) on the amount of Pre-Tax, After-Tax or Matching Contributions that can be made under the Savings Plan. -4-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 For purposes of this subsection, the terms "Pre-Tax Contribution," "After- Tax Contribution" and "Matching Contribution" shall have the same meanings as set forth in Article I of the Savings Plan. (c) Short Service Benefit. Participants who have completed five years ---------------------- of service with the Company or an Affiliate (including service with Ethyl Corporation or one of its affiliates) and who are specifically designated for this purpose, in accordance with Article II, and who become Disabled or Retire from the Company or an Affiliate or are while employed by the Company or an Affiliate, participating in the Plan shall also accrue an additional benefit hereunder equal to the Actuarial Equivalent of (i) minus (ii) below, where: (i) is a benefit commencing on the first day of the month coincident with or next following his sixty-fifth birthday and payable for life with sixty monthly payments guaranteed equal to the product of 4% times the Participant's total years of service with the Company or an Affiliate (up to a maximum of fifteen), expressed in years and fractions of years and measured in cumulative monthly increments from the Participant's initial date of employment, excluding any intervening period during which the Participant was not in the employ of the Company or an Affiliate, times the Participant's Final Average Compensation; and (ii) equals the sum of the Actuarial Equivalents of: (A) the Participant's employer-provided Retirement Plan benefit; (B) the employer-provided benefit (exclusive of earnings reduction contributions) under the Savings Plan; (C) 100% of the Participant's Primary Social Security Benefit payable at his Social Security Retirement Age, as determined under the provisions of the Social Security Act in effect at the date of the occurrence triggering the determination, assuming that the Participant had continued in the employ of the Company at the annual base salary he was earning at the time such event occurred until what would have been his Social Security Retirement Age; (D) 100% of the employer-provided benefits (exclusive of earnings reduction contributions) payable to the Participant under any employee pension benefit plan, as defined under Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended, of any other employer; (E) the benefit accrued by the Participant under Plan section 3.01(a); and (F) the benefit accrued by the Participant under Plan section 3.01(b). -5-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 For purposes of determining the reduction attributable to a defined contribution plan benefit described in paragraph (B), (D), (E) or (F), such benefit shall be converted to a life annuity with sixty monthly payments guaranteed in the case of benefits payable as a result of the Participant's death or to an annuity payable in the form elected by the Participant under the Retirement Plan that is the Actuarial Equivalent of a life annuity with sixty monthly payments guaranteed. Further, the payment of any benefit under this Plan section shall be conditioned on a Participant furnishing such information as the Committee may require to enable it to make the calculation called for under paragraph (D). For purposes of determining a Participant's benefit under Plan Sections 3.01(c) and (g), Final Average Compensation means, effective April 26, 2000, for a Participant as of any date, one-third of the sum of (i) the Participant's annual base salary and (ii) 100% of any annual cash bonus paid pursuant to the Albemarle Corporation 1998 Incentive Plan (or any successor Plan) received by the Participant during the three consecutive highest paid calendar years of employment by the Company or an Affiliate during the ten consecutive calendar years or the total period of employment, if less, immediately preceding the date of the event the occurrence of which triggers the determination. Final Average Compensation is calculated without regard to any elections by a Participant to defer any amount that otherwise would have been paid to the Participant for the relevant period in the absence of such an election. (d) For purposes of determining a Participant's accrued benefit under Plan section 3.01(a) or (b), compensation used in the calculation of benefits that the Participant would have accrued under the Retirement Income Plan for the Employees of Albemarle Corporation but for the limitations of Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, shall include the income recognized on account of a bonus (whether in the form of cash or other property) granted to such Participant on April 24, 1996, who was a full-time employee of the Company on such date, and any cash payment made by the Company to reimburse the Participant for the federal and state income taxes resulting from such income recognition. (e) For any Participant who is specifically designated for this purpose, compensation and service in the calculation of benefits under Plan section 3.01(a) or (b), shall include the Participant's service and compensation with Ethyl Corporation and with the Company. Such Participant shall have his benefit determined under the formula described in 3.01(a) or (b) even if such Participant has waived participation in the Retirement and Savings Plans. Benefits payable under the Plan to such Participant shall be offset by any benefits payable under the qualified retirement plans sponsored by Ethyl Corporation and the Company and any benefits payable under non-qualified retirement plans sponsored by Ethyl Corporation and the Company. (f) A Participant shall accrue benefits under this Plan section, as applicable, from the effective date of his eligibility to participate in the Plan through the date of his death, Disability or Retirement or other separation from service or the date he is notified by the Company's Executive Committee that he is no longer eligible to participate. In no event shall a Participant accrue a duplicate benefit attributable to the same service or compensation under Plan sections 3.01(a), or (b). -6-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 (g) A Participant who is specifically designated for this purpose by the Board or Executive Committee of the Board, shall also accrue a supplemental benefit hereunder equal to the Actuarial Equivalent of (i) minus (ii) below, where: (i) is a benefit equal to the product of four percent times the Participant's years of service with the Company or an Affiliate (up to a maximum of fifteen) earned on and after a date specified by the Board or the Executive Committee of the Board, expressed in years and fractions of years, times the Participant's Final Average Compensation (as defined in Plan section 3.01(c)) and such benefit shall commence on the first day of the month coincident with or next following his sixty-fifth birthday and payable for life with sixty monthly payments guaranteed; (ii) equals the sum of the Actuarial Equivalents of: (A) the benefit accrued by the Participant under Plan section 3.01(a), if any; and (B) the benefit accrued by the Participant under Plan section 3.01(b), if any. For purposes of this subsection (g), if a Participant retires early upon the recommendation of the Chief Executive Officer and the approval of the Executive Compensation Committee, dies or becomes Disabled (as defined below) while employed by the Company, his years of service shall include those years between his date of retirement, death or Disability (as defined below) and what would have been his normal retirement date (as defined in the Retirement Plan). Final Average Compensation shall be determined by using the Participant's base pay as in effect on his date of retirement, death or Disability and increasing such amount by 5% for each year between such date and the Participant's normal retirement date plus a bonus percentage equal to the average of the three highest (or less, if the period worked is less than three years) actual bonus percentages earned since the Participant's service date (as shown on Appendix I). Disabled or Disability means, solely for purposes of this subsection (g), any physical or mental condition which significantly impairs the Participant's ability to continue to devote his full attention and time to his current position. The Executive Compensation Committee will make the determination of disability based on the recommendation of the Chief Executive Officer and the medical evidence provided by the Participant. 3.02. Death Benefits -------------- (a) With respect to the vested benefits attributable to the Retirement Plan accrued by a Participant under Plan section 3.01(a) or (b) or benefits accrued under Plan section 3.01(c), if a Participant dies prior to what would have been his Annuity Starting Date under the Retirement Plan, the Participant's surviving spouse, if any, shall be entitled only to a Qualified Preretirement Survivor's Annuity commencing on what could have been the Participant's earliest early retirement date under the Retirement Plan. -7-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 (b) Preretirement death benefits accrued under Plan section 3.01(a) or (b) and attributable to the employer-provided benefit (exclusive of earnings reduction contributions) under the Savings Plan shall be paid in cash to the Participant's surviving spouse (or, if none, to his Beneficiary). (c) In the event of a Participant's death after his Annuity Starting Date, benefits will be paid in accordance with the form of payment elected by the Participant under the terms of the Retirement Plan or if the Participant is not a member of the Retirement Plan, in accordance with an election form completed by the Participant and approved by the Committee. In the event of a Participant's death after his Annuity Starting Date, any benefit that should have been paid to the Participant but had not been paid as of the date of the Participant's death shall be paid to the Participant's personal representative, determined in accordance with state law. (d) With respect to the benefits accrued by a Participant under Plan section 3.01(g), or with respect to any Participant designated under Plan section 3.01(e) who does not participate in the Retirement Plan, if such Participant dies prior to his Annuity Starting Date, the participant's surviving spouse, if any, shall be entitled to a 100% survivor's annuity based on the Participant's accrued benefit under the Plan as of his date of death, calculated using the actuarial assumptions and methods set forth in the Retirement Plan. 3.03. Timing and Form of Payment -------------------------- The Plan's benefit payments shall begin as of the later of (i) the date the Participant's benefits commence under the Retirement Plan, or (ii) the first day of the month following the Participant's separation from service and shall be paid in the manner designated by the Executive Committee of the Board in its sole discretion. If the Executive Committee of the Board has made no designation of the manner in which the Plan's benefits shall be paid as of the date such benefits become payable to the Participant, the Executive Committee of the Board shall be deemed to have made a designation that the Plan's benefit payments shall be payable to the Participant, contingent annuitant, or the Beneficiary designated pursuant to the Retirement Plan for the same period and in the same form as the Participant elected under the Retirement Plan. Benefits not paid in the normal form or commencing prior to what would have been the Participant's normal retirement date, as provided for under the Retirement Plan, must be an actuarial equivalent of the normal form of benefit and reduced to reflect early commencement based on the factors and assumptions employed under the Retirement Plan. Notwithstanding the preceding, benefits accrued under Plan sections 3.01(a) and (b) with respect to the Savings Plan, shall be paid in a lump sum in cash as of the later of (i) the date they would have been paid under the Savings Plan but for the applicable Code section 415, 401(a)(17), 402(g), 401(k), and 401(m) limitations, or (ii) the last day of the month in which the Participant separates from service. -8-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 ARTICLE IV VESTING A Participant's right to receive a benefit under Plan section 3.01(a) and (b) exists only if his employment terminates at a time or as a result of an event that would have caused such benefit to vest under the terms of the Retirement Plan or Savings Plan, as applicable, while the Plan is in effect and the Participant remains designated as a Participant. No benefits are payable under Plan sections 3.01(c) or (g) unless the Participant becomes Disabled or Retires. A Participant who dies prior to what would have been his Annuity Starting Date shall be entitled only to any death benefit available under Plan section 3.02. Despite the foregoing, a Participant forfeits all benefits from the Plan if the Committee determines that his employment is terminated as a result of fraud, dishonesty, conviction of or pleading guilty to a felony, or embezzlement from the Company or an Affiliate. Further, in the event the Committee determines that a Participant who has separated from service for any reason is guilty of fraud or dishonesty against the Company or an Affiliate or is convicted of or pleads guilty to a felony against or embezzlement from the Company or an Affiliate shall forfeit his entitlement to any further payments or benefits under the Plan. Notwithstanding the preceding, in the event the employment of a Participant who is in the employ of the Company on a Control Change Date is terminated (for reasons other than fraud, dishonesty, conviction of or pleading guilty to a felony, or embezzlement from the Company or an Affiliate, as provided above) before the end of the period commencing on the Control Change Date and ending on the third anniversary of such date, and whether or not he is a Participant at such time, he shall be fully vested in the benefit he accrued under Article III as of the date his employment is terminated and such accrued benefit shall be paid in a cash lump sum no later than 30 days following his termination of employment. ARTICLE V COORDINATION OF BENEFITS The amount payable in any month to a Participant, or a Beneficiary under the Plan shall be reduced, but not below zero, by the Actuarial Equivalent of any amount paid or payable to the Participant for the month in question or a prior or future month from a Supplemental Retirement Account. This limitation shall not apply to the extent that its application would result in the payment of an after-tax benefit under the Plan and a Supplemental Retirement Account that is less than the benefit otherwise payable under Article III on an after-tax basis. In determining the -9-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 amount payable under the Plan and from a Supplemental Retirement Account on an after-tax basis, the Committee shall make its determination using the maximum rates of federal, state, and local income taxes that are applicable to the Participant or Beneficiary. ARTICLE VI GUARANTEES Albemarle Corporation and any Affiliate participating in the Plan has only a contractual obligation to pay the benefits described in Article III. All benefits are to be satisfied solely out of the general corporate assets of the Company or the appropriate Affiliate which shall remain subject to the claims of its creditors. No assets of the Company or a participating Affiliate will be segregated or committed to the satisfaction of its obligations to any Participant or Beneficiary under this Plan. If the Company in its sole discretion, elects to purchase life insurance on the life of a Participant in connection with the Plan, the Participant must submit to a physical examination, if required by the insurer, and otherwise cooperate in the issuance of such policy or his rights under the Plan will be forfeited. ARTICLE VII TERMINATION, AMENDMENT OR MODIFICATION OF PLAN 7.01. Plan Termination ---------------- Except as otherwise specifically provided, the Company reserves the right to terminate, amend or modify this Plan, wholly or partially, at any time and from time to time. Any such termination, amendment or change may not affect or alter the benefits paid or obligations to any employee who died, became Disabled or Retired before the termination, amendment, or change or whose benefits vested in accordance with Article IV. Such right to terminate, amend or modify the Plan shall be exercised for the Company either by its Board or Executive Committee. 7.02. Notice Requirement ------------------ (a) Plan section 7.01 notwithstanding, no action to terminate the Plan shall be taken except upon written notice to each Participant to be affected thereby. (b) Any notice which shall be or may be given under the Plan shall be in writing and shall be mailed by United States mail, postage prepaid. If notice is to be given to the Company, such notice shall be addressed to it at Post Office Box 1335, Richmond, Virginia 23218; addressed to the attention of the Corporate Secretary. If notice is to be given to a Participant, such notice shall be addressed to the Participant's last known address. -10-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 7.03. Effect of Plan Termination -------------------------- Except as provided in Plan section 7.01, upon the termination of this Plan by the Board or Executive Committee, the Plan shall no longer be of any further force or effect, and, except as provided in Plan section 7.01, neither the Company nor any Participant shall have any further obligation or right under this Plan. Likewise, except to the same extent protected in the event of termination, amendment or modification of the Plan, the rights of any individual who was a Participant and who is declared by the Committee to be no longer eligible shall cease upon such action. ARTICLE VIII OTHER BENEFITS AND AGREEMENTS Except as provided in Article V, the benefits provided for a Participant and his Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program of the Company or a participating Affiliate for its employees, and, except as may otherwise be expressly provided for, the Plan shall supplement and shall not supersede, modify or amend any other plan or program of the Company or a participating Affiliate in which a Participant is participating. ARTICLE IX RESTRICTIONS ON TRANSFER OF BENEFITS No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefit. If any Participant or Beneficiary under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then such right or benefit, in the discretion of the Committee, shall cease and terminate, and, in such event, the Committee may hold or apply the same or any part thereof for the benefit of such Participant or Beneficiary, his or her spouse, children, or other dependents, or any of them, in such manner and in such portion as the Committee may deem proper. -11-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 ARTICLE X ADMINISTRATION OF THE PLAN 10.01. The Committee ------------- The Plan shall be administered by the Committee. Subject to the provisions of the Plan, the Committee may adopt such rules and regulations as may be necessary to carry out the purposes hereof. The Committee's interpretation and construction of any provision of the Plan shall be final and conclusive. 10.02. Indemnification of the Committee -------------------------------- The Company shall indemnify and save harmless each member of the Committee against any and all expenses and liabilities arising out of his membership on the Committee, excepting only expenses and liabilities arising out of his own willful misconduct. Expenses against which a member of the Committee shall be indemnified hereunder shall include without limitation, the amount of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted, or a proceeding brought or settlement thereof. The foregoing right of indemnification shall be in addition to any other rights to which any such member may be entitled. 10.03. Powers of the Committee ----------------------- In addition to the powers hereinabove specified, the Committee shall have the power to compute and certify the amount and kind of benefits from time to time payable to Participants, and Beneficiaries under the Plan, and to authorize all disbursements for such purposes. 10.04. Information ----------- To enable the Committee to perform its functions, the Company and any participating Affiliate shall supply full and timely information to the Committee on all matters relating to the compensation of all Participants, their retirement, death or other cause for termination of employment, and such other pertinent facts as the Committee may require. 10.05. Claims Review Procedures ------------------------ The benefit claims review procedure set forth in the Retirement Plan, as amended from time to time, is incorporated herein by reference and made applicable to the Plan. -12-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 ARTICLE XI MISCELLANEOUS 11.01. No Guarantee of Employment -------------------------- The Plan does not in any way limit the right of the Company or any participating Affiliate at any time and for any reason to terminate the employment of a Participant in its employ. In no event shall the Plan, by its terms or by implication, constitute an employment contract of any nature whatsoever between the Company and a Participant. 11.02. Binding Nature -------------- The Plan shall be binding upon the Company, any participating Affiliate and successors and assigns, and, subject to the powers set forth in Article VII, upon a Participant's, his Beneficiary's or any of their assigns, heirs, executors and administrators. 11.03. Governing Law ------------- To the extent not preempted by federal law, the Plan shall be governed and construed under the laws of the Commonwealth of Virginia (including its choice- of-law rules, except to the extent those laws would require the application of the law of a state other than Virginia) as in effect from time to time. 11.04. Masculine and Feminine; Singular and Plural ------------------------------------------- Masculine pronouns wherever used shall include feminine pronouns and the use of the singular shall include the plural. ARTICLE XII ADOPTION The Company has adopted this Plan pursuant to action taken by the Board. With the approval of the Board, any Affiliate may adopt this Plan by action of its board of directors. -13-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 As evidence of its adoption of the Plan, Albemarle Corporation has caused this document to be signed by its duly authorized officer, this 8/th/ day of December, 2000, and made effective as of April 26, 2000. ALBEMARLE CORPORATION By: /s/ C.B. WALKER ----------------------------------- -14-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 APPENDIX I PARTICIPANTS DESIGNATED FOR PLAN SECTIONS 3.01(c), 3.01(e) or 3.01(g) Plan Section Name Service Date ------------ ---- ------------ 3.01(c) Mark C. Rohr 3/22/1999 3.01(c) Jack P. Harsh 11/16/1998 3.01(g) Charles B. Walker 2/1/1998 3.01(e) Floyd D. Gottwald 3/1/1996 3.01 (e) William Gottwald 9/1/1996 -15-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 APPENDIX II Albemarle Corporation Change In Control Provision --------------------------- 1. Change in Control means the occurrence of any of the following events: ----------------- (a) any Person, or "group" as defined in section 13(d)(3) of the Securities Exchange Act of 1934 (excluding Floyd D. Gottwald, Bruce C. Gottwald, members of either of their families and any Affiliate), becomes, directly or indirectly, the Beneficial Owner of 20% or more of the combined voting power of the then outstanding Albemarle securities that are entitled to vote generally for the election of Albemarle's directors (the "Voting Securities") (other than as a result of an issuance of securities by Albemarle approved by Continuing Directors, or open market purchases approved by Continuing Directors at the time the purchases are made); (b) as the direct or indirect result of, or in connection with, a reorganization, merger, share exchange or consolidation (a "Business Combination"), a contested election of directors, or any combination of these transactions, Continuing Directors cease to constitute a majority of Albemarle's board of directors, or any successor's board of directors, within two years of the last of such transactions; (c) the shareholders of Albemarle approve a Business Combination, unless immediately following such Business Combination, (i) all or substantially all of the Persons who were the Beneficial Owners of the Voting Securities outstanding immediately prior to such Business Combination Beneficially Own more than 70% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Company resulting from such Business Combination (including, without limitation, a company which as a result of such transaction owns Albemarle through one or more Subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Voting Securities, (ii) no Person (excluding Floyd D. Gottwald, Bruce C. Gottwald, members of either of their families and any Affiliate and any employee benefit plan or related trust of Albemarle or the Company resulting from such Business Combination) Beneficially Owns 30% or more of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Company resulting from such Business Combination and (iii) at least a majority of the members of the board of directors of the Company resulting from such Business Combination are Continuing Directors. 2. Definitions ----------- (a) Affiliate and Associate shall have the respective meanings ----------------------- ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended and as in effect on the date of this Agreement (the "Exchange Act"). -16-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 (b) Albemarle means Albemarle Corporation. --------- (c) Beneficial Owner means that a Person shall be deemed the ---------------- "Beneficial Owner" and shall be deemed to "beneficially own," any securities: (i) that such Person or any of such Person's Affiliates or Associates owns, directly or indirectly; (ii) that such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed to be the "Beneficial Owner" of, or to "beneficially own," securities tendered pursuant to a tender or exchange offer made by such Person or any such Person's Affiliates or Associates until such tendered securities are accepted for purchase or exchange; (iii) that such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to vote, including pursuant to any agreement, arrangement or understanding, whether or not in writing; provided, however, that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," any security under this subsection as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding: (1) arises solely from a revocable proxy given in response to a public proxy solicitation made pursuant to, and in accordance with the applicable provisions of the General Rules and Regulations under the Exchange Act and (2) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or -17-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 (iv) that are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associates thereof) with which such Person (or any of such Person's Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the proviso to subsection (iii) of this definition) or disposing of any voting securities of Albemarle provided, however, that notwithstanding any provision of this definition, any Person engaged in business as an underwriter of securities who acquires any securities of Albemarle through such Person's participation in good faith in a firm commitment underwriting registered under the Securities Act of 1933, shall not be deemed the "Beneficial Owner" of, or to "beneficially own," such securities until the expiration of forty days after the date of acquisition; and provided, further, that in no case shall an officer or director of Albemarle be deemed (1) the beneficial owner of any securities beneficially owned by another officer or director of Albemarle solely by reason of actions undertaken by such persons in their capacity as officers or directors of Albemarle; or (2) the beneficial owner of securities held of record by the trustee of any employee benefit plan of Albemarle or any Subsidiary of Albemarle for the benefit of any employee of Albemarle or any Subsidiary of Albemarle, other than the officer or director, by reason of any influences that such officer or director may have over the voting of the securities held in the trust. (d) Company means Albemarle or any successor thereto. ------- (e) Continuing Director means any member of Albemarle's Board, while ------------------- a member of that Board, and (i) who was a member of Albemarle's Board prior to April 27, 2000, or (ii) whose subsequent nomination for election or election to Albemarle's Board was recommended or approved by a majority of the Continuing Directors. (f) Control Change Date means the date on which an event described in ------------------- paragraph 1 occurs. If a Change in Control occurs on account of a series of transactions, the Control Change Date is the date of the last of such transactions. (g) Person means any individual, firm, company, partnership or other ------ entity. (h) Subsidiary means, with references to any Person, any company or ---------- other entity of which an amount of voting securities sufficient to elect a majority of the directors or Persons having similar authority of such company or other entity is beneficially owned, directly or indirectly, by such Person, or otherwise controlled by such Person. -18-

Albemarle Corporation Supplemental Executive Retirement Plan As Amended and Restated Effective April 26, 2000 Path: DOCSOPEN\RICHMOND\05582\48362\000001\@@0C04!.DOC Doc #: 479532; V. 5 Doc Name: Albemarle - Supplemental Benefit Plan Author: Marriott, Catherine, 05582 -19-

EXHIBIT 10.6 ------------ ALBEMARLE CORPORATION NON-EMPLOYEE DIRECTORS' STOCK COMPENSATION PLAN Effective November 1, 1999

Albemarle Corporation Non-Employee Directors' Stock Compensation Plan Effective November 1, 1999 ARTICLE I DEFINITIONS ----------- 1.01. Administrator ------------- Administrator means the Company's General Counsel. 1.02. Board ----- Board means the Board of Directors of the Company. 1.03. Common Stock ------------ Common Stock means the common stock of the Company. 1.04. Company ------- Company means Albemarle Corporation and any successor business by merger, purchase, or otherwise that maintains the Plan. 1.05. Date of Grant ------------- Date of Grant means the first business day after October 31 of each year. 1.06. Non-Employee Director --------------------- Non Employee Director means a member of the Board who is not an employee of the Company or any of its affiliates. 1.07. Participant ----------- Participant means, for each year during the term of the Plan, a Non- Employee Director who is a member of the Board on November 1 of such year and who was not an employee of the Company or any of its affiliates on the preceding December 31. 1.08. Plan ---- Plan means the Albemarle Corporation Non-Employee Directors' Stock Compensation Plan. -1-

Albemarle Corporation Non-Employee Directors' Stock Compensation Plan Effective November 1, 1999 ARTICLE II PURPOSES -------- The Plan is intended to promote a greater identity of interest between Participants and the Company's shareholders through awards of Common Stock and to enable Non-Employee Directors of the Company to participate in the Company's success through ownership of Common Stock. ARTICLE III ADMINISTRATION -------------- The Plan shall be administered by the Administrator. The Administrator shall have complete authority to interpret all provisions of this Plan; to adopt, amend, and rescind rules and regulations pertaining to the administration of this Plan; and to make all other determinations necessary or advisable for the administration of this Plan. The express grant in the Plan of any specific power to the Administrator shall not be construed as limiting any power or authority of the Administrator. Any decision made, or action taken, by the Administrator or in connection with the administration of this Plan shall be final and conclusive. The Administrator shall not be liable for any act done in good faith with respect to this Plan. All expenses of administering this Plan shall be borne by the Company. ARTICLE IV -2-

Albemarle Corporation Non-Employee Directors' Stock Compensation Plan Effective November 1, 1999 STOCK SUBJECT TO PLAN --------------------- Shares of Common Stock awarded pursuant to the Plan shall be purchased by the Company on the open market. ARTICLE V STOCK AWARDS ------------ 5.01. Awards ------ (a) For 1999. On the Date of Grant, each Participant who was a member --------- of the Board on the previous June 30 shall be awarded a number of whole shares when multiplied by the Closing Price of Common Stock on the immediately preceding business day, as reported in the Wall Street Journal, that as nearly as possible equals, but does not exceed, sixteen thousand dollars ($16,000). (b) For 2000 and thereafter. On the Date of Grant, each Participant ------------------------ who was a member of the Board on the previous June 30 shall be awarded a number of whole shares when multiplied by the Closing Price of Common Stock on the immediately preceding business day, as reported in the Wall Street Journal, that as nearly as possible equals, but does not exceed, eighteen thousand dollars ($18,000). (c) Partial Years of Service. Each Participant who becomes a member ------------------------- of the Board on or after July 1 of any year during the term of the Plan shall be awarded a number of whole shares of Common Stock that is one-half of the amount determined under (a) or (b) above, as applicable. 5.02. Vesting ------- -3-

Albemarle Corporation Non-Employee Directors' Stock Compensation Plan Effective November 1, 1999 All of the shares of Common Stock issued under this Article V shall be immediately and fully vested. 5.03. Transferability --------------- All of the shares of Common Stock issued under this Article V shall be immediately transferable. ARTICLE VI COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES ----------------------------------------------------- No certificates for shares of Common Stock shall be purchased or delivered under this Plan except in compliance with all applicable federal and state laws and regulations, any listing agreement to which the Company is a party, and the rules of all domestic stock exchanges on which the Company's shares may be listed. ARTICLE VII GENERAL PROVISIONS ------------------ 7.01. Effect on Service ----------------- Neither the adoption of this Plan, its operation, nor any documents describing or referring to this Plan (or any part thereof) shall confer upon any Participant any right to continue service as a member of the Board. 7.02. Unfunded Plan ------------- -4-

Albemarle Corporation Non-Employee Directors' Stock Compensation Plan Effective November 1, 1999 The Plan, insofar as it provides for awards, shall be unfunded, and the Company shall not be required to segregate any assets that may at any time be represented by awards under this Plan. Any liability of the Company to any person with respect to any award under this Plan shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company. 7.03. Rules of Construction --------------------- Headings are given to the Articles and Sections of this Plan solely as a convenience to facilitate reference. The reference to any statute, regulation, or other provision of law shall be construed to refer to any amendment to or successor of such provision of law. This Plan is created, adopted and maintained according to the laws of the Commonwealth of Virginia (other than its choice-of- law rules). 7.04. Amendment and Termination of the Plan ------------------------------------- The Board may amend this Plan from time to time or terminate this Plan at any time or for any reason. 7.05. Effective Date of Plan ---------------------- This Plan is effective November 1, 1999. -5-

Exhibit 11 ALBEMARLE CORPORATION COMPUTATION OF PRO FORMA EARNINGS PER SHARE for the years ended December 31, 2000 and 1999 (In thousands except per share amounts) Pro Forma Pro Forma 2000 1999 --------- --------- BASIC EARNINGS PER SHARE Numerator: --------- Net income after effect of applying SFAS No. 123 "Accounting for Stock Based Compensation" $ 100,437 $ 88,018 --------- --------- Denominator: ----------- Average number of shares of common stock outstanding 45,882 45,889 ========= ========= Basic earnings per share $ 2.19 $ 1.88 ========= ========= DILUTED EARNINGS PER SHARE Numerator: --------- Net income after effect of applying SFAS No. 123 "Accounting for Stock Based Compensation" $ 100,437 $ 88,018 --------- --------- Denominator: ----------- Average number of shares of common stock outstanding 45,882 46,889 --------- --------- Shares issuable upon the assumed exercise of outstanding stock options 724 624 --------- --------- Total pro forma shares 46,606 46,889 ========= ========= Diluted earnings per share $ 2.16 $ 1.85 ========= =========

Exhibit 21 LIST OF ALBEMARLE CORPORATION SUBSIDIARIES Albemarle Asano Corporation Albemarle Asia Pacific Company Albemarle Asia Pacific Company LLC Albemarle Chemicals SAS Albemarle Chimie Albemarle China Corporation Albemarle Europe SPRL Albemarle Foreign Sales Corporation Albemarle France S.A.R.L. Albemarle Holdings Company Limited Albemarle International Corporation Albemarle International Company LLC Albemarle Marketing Company Limited Albemarle Overseas Development Corporation Albemarle Overseas Development Corporation LLC Albemarle PPC Albemarle Services Company Limited Albemarle TCI Limited Albemarle UK Limited Albemarle Ventures Company Limited Albemarle Virginia Corporation Albemarle Virginia, L.P. ANY, Inc.

Exhibit 23.1 Consent of Independent Accountants We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Files No. 33-75622 and 33-83237) of Albemarle Corporation and Subsidiaries as of our report dated January 23, 2001 relating to the financial statements, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP Richmond, Virginia February 28, 2001