UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the
Registrant
x
Filed by a
Party other than the Registrant
¨
Check the
appropriate box:
¨
|
Preliminary Proxy Statement
|
¨
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|
x
|
Definitive Proxy Statement
|
¨
|
Definitive Additional Materials
|
¨
|
Soliciting Material under §240.14a-12
|
NEWMARKET CORPORATION
(Name of registrant as specified in its
charter)
(Name of person(s) filing proxy statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
¨
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
|
|
(1)
|
Title of each class of securities to which the transaction applies:
|
|
(2)
|
Aggregate number of securities to which the transaction applies:
|
|
(3)
|
Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined):
|
|
(4)
|
Proposed maximum aggregate value of the transaction:
|
¨
|
Fee paid previously with preliminary materials.
|
¨
|
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
|
|
(1)
|
Amount Previously Paid:
|
|
(2)
|
Form, Schedule or Registration Statement No.:
|
NEWMARKET CORPORATION
330 South Fourth Street
Richmond, Virginia 23219
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of NewMarket Corporation will be held in the Virginia
Historical Society building, 428 N. Boulevard, Richmond, Virginia, on Thursday, April 21, 2011, at 10:00 a.m., Eastern Daylight Time, for the following purposes, as more fully described in the accompanying proxy statement:
|
1.
|
To elect a board of directors to serve for the ensuing year;
|
|
2.
|
To ratify the appointment of PricewaterhouseCoopers LLP as NewMarkets independent registered public accounting firm for the fiscal year ending December 31,
2011;
|
|
3.
|
To consider and act on an advisory vote regarding the approval of compensation paid to certain executive officers;
|
|
4.
|
To consider and act on an advisory vote regarding the frequency of shareholder approval of the compensation paid to certain executive officers; and
|
|
5.
|
To transact such other business as may properly come before the meeting.
|
The record date for the determination of shareholders entitled to notice of and to vote at the annual meeting is February 24, 2011. Accordingly, only shareholders of record as of that date will be
entitled to notice of and to vote at the annual meeting or any adjournment or postponement thereof.
Your vote is very
important to us. Regardless of whether you expect to attend the meeting, please act promptly to vote your shares. You may vote your shares by telephone or over the Internet, as described in the Notice of Internet Availability of Proxy Materials. If
you are present at the meeting and hold shares in your name, you may vote in person even if you have previously submitted your proxy by mail, by telephone or over the Internet. If your shares are held in street name with your broker or by a nominee
and you wish to vote in person at the meeting, you will need to obtain a legal proxy from the institution that holds your shares and provide that legal proxy at the meeting.
|
By Order of the Board of Directors
|
|
M. R
UDOLPH
W
EST
,
Secretary
|
March 8, 2011
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR
THE 2011 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 21, 2011
The companys Proxy Statement for the 2011 Annual Meeting of Shareholders and the companys Annual Report to Shareholders
and Annual Report on Form 10-K for the fiscal year ended December 31, 2010 are available at www.envisionreports.com/NEU.
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
OF
NEWMARKET CORPORATION
Approximate date of mailing March 8, 2011
Date, Time and Place of Annual Meeting
The annual meeting of shareholders
of NewMarket Corporation is scheduled to be held as follows:
|
|
|
Date:
|
|
Thursday, April 21, 2011
|
|
|
Time:
|
|
10:00 a.m., Eastern Daylight Time
|
|
|
Place:
|
|
Virginia Historical Society
|
|
|
428 N. Boulevard
|
|
|
Richmond, Virginia 23221
|
Proposals to be Considered at
the Annual Meeting
At the annual meeting, you will be asked to consider and vote on the following proposals:
|
|
|
to elect seven directors;
|
|
|
|
to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2011;
|
|
|
|
to consider and act on an advisory vote regarding the approval of the compensation paid to certain executive officers (say-on-pay);
|
|
|
|
to consider and act on an advisory vote regarding the frequency of say-on-pay votes (say-on-frequency); and
|
|
|
|
to transact such other business as may properly come before the annual meeting.
|
In the event that a quorum is not present at the annual meeting, you may also be asked to vote upon a proposal to adjourn or postpone the
annual meeting to solicit additional proxies.
Record Date
Our Board of Directors has fixed the close of business on February 24, 2011 as the record date for the annual meeting and only holders of record of NewMarket common stock on the record date are
entitled to vote at the annual meeting. On the record date, there were outstanding 13,863,011 shares of NewMarket common stock.
Voting
Rights and Quorum
Each share of NewMarket common stock is entitled to one vote. The presence in person or representation
by proxy of holders of a majority of the shares of NewMarket common stock issued and outstanding as of the close of business on February 24, 2011 will constitute a quorum at the annual meeting. If a share is represented for any purpose at the
meeting, it is deemed to be present for the transaction of all business. Abstentions, withheld votes and shares held of record by a broker or its nominee that are voted on any matter are included in determining the number of votes present. Broker
shares that are not voted on any matter at the meeting will not be included in determining whether a quorum is present. In the event that a quorum is not present at the annual meeting, it is expected that the annual meeting will be adjourned or
postponed to solicit additional proxies.
1
Vote Required
|
|
|
The election of each nominee for director requires the affirmative vote of the holders of a plurality of the shares of NewMarket common stock voted in
the election of directors. Withheld votes will have no effect in the election of nominees for directors.
|
|
|
|
The appointment of PricewaterhouseCoopers LLP will be ratified if the votes cast in favor of ratification exceed the number of votes cast against
ratification. Abstentions will have no effect on the proposal to ratify the appointment of PricewaterhouseCoopers LLP.
|
|
|
|
The say-on-pay advisory resolution approving the compensation paid to certain executives will be adopted if the votes cast in favor of adoption exceed
the number of votes cast against adoption. Abstentions will have no effect on the say-on-pay advisory proposal.
|
|
|
|
The advisory vote on the frequency of say-on-pay votes will be adopted for state law purposes if the votes for one of the three options (one, two, or
three years) exceed the votes cast for the other two options combined. However, the company will consider shareholders to have expressed a non-binding preference for the frequency option that receives the most favorable votes. Abstentions will have
no effect on the say-on-frequency vote.
|
If you hold your shares of NewMarket common stock in street name
through a brokerage account, your broker may or may not vote your shares in its discretion depending on the proposals before the meeting in the absence of your voting instructions. Under the rules of the New York Stock Exchange, your broker may vote
your shares in its discretion on routine matters. We believe that the ratification of the appointment of our independent registered public accounting firm is a routine matter on which brokers will be permitted to vote on behalf of their
clients if no voting instructions are furnished. We believe that the election of directors, the say-on-pay advisory vote and the say-on-frequency advisory vote are not routine matters. When a matter is not routine and brokers have not received
voting instructions from their clients, brokers cannot vote the shares on that matter. This is commonly referred to as a broker non-vote. Broker non-votes will have no effect on any of the proposals to be voted on at this years annual meeting.
Voting and Revocation of Proxies
After carefully reading and considering the information contained in this proxy statement, you should vote over the Internet by following the instructions provided in the Notice of Internet Availability
of Proxy Materials (the Notice). Alternatively, you may vote by telephone or order a paper copy of the proxy materials at no charge on or before April 11, 2011 by following the instructions provided in the Notice. You can also vote
in person at the meeting. The Notice and identification will be required to vote in person at the meeting.
Unless you specify
to the contrary, all of your shares represented by valid proxies will be voted
FOR
all director nominees,
FOR
the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm,
FOR
the advisory resolution approving the compensation paid to certain executive officers, for a say-on-pay vote every
ONE YEAR
, and in the discretion of the proxy holders on any other matters that properly come
before the annual meeting or any adjournments or postponements of the annual meeting.
The persons you name as proxies may
propose and vote for one or more adjournments or postponements of the annual meeting, including adjournments or postponements to permit further solicitations of proxies.
Until exercised at the annual meeting, you can revoke your proxy and change your vote in any of the following ways:
|
|
|
by delivering written notification to NewMarket at its principal executive offices at 330 South Fourth Street, Richmond, Virginia 23219, Attention:
Corporate Secretary;
|
2
|
|
|
by changing your vote or revoking your proxy by telephone or over the Internet;
|
|
|
|
if you hold shares in your name, by attending the annual meeting and voting in person (your attendance at the meeting will not, by itself, revoke your
proxy; you must vote in person at the meeting);
|
|
|
|
if you have instructed a broker or bank to vote your shares, by following the directions received from your broker or bank to change those
instructions; or
|
|
|
|
if you hold shares in street name with your broker or by a nominee, by obtaining a legal proxy from the institution that holds your shares, attending
the annual meeting and voting in person (your attendance at the meeting will not, by itself, revoke your proxy; you must vote in person at the meeting).
|
If you decide to vote by completing, signing, dating and returning a proxy card, you should retain a copy of the voter control number found on the proxy card in the event that you decide later to change
or revoke your proxy by telephone or over the Internet.
Solicitation of Proxies
The accompanying proxy is being solicited by our Board of Directors, and we will pay for the entire cost of the solicitation. Arrangements
will also be made with brokerage houses and other custodians, nominees and fiduciaries for forwarding the solicitation material to the beneficial owners of NewMarket common stock held of record by those persons, and we may reimburse them for
reasonable transaction and clerical expenses. In addition to the use of the mail, proxies may be solicited personally or by telephone, facsimile or other means of communication by our officers and regular employees. These people will receive no
additional compensation for these services, but will be reimbursed for any expenses incurred by them in connection with these services. We have engaged Alliance Advisors LLC, a proxy solicitation firm, to assist in the solicitation of proxies. We
will pay that firm $5,500 for its services and reimburse its out-of-pocket expenses for such items as mailing, copying, phone calls, faxes and other related matters, and will indemnify Alliance Advisors LLC against any losses arising out of that
firms proxy soliciting services on our behalf.
PROPOSAL 1:
ELECTION OF DIRECTORS
The Nominating and Corporate Governance Committee has recommended to our Board of Directors, and our Board of Directors has approved, the persons named below as nominees for election to our Board of
Directors. Each of the nominees presently serves as a director. Proxies will be voted for the election as directors for the ensuing year of the persons named below (or if for any reason unavailable, of such substitutes as our Board of Directors may
designate). Our Board of Directors has no reason to believe that any of the nominees will be unavailable to serve.
Phyllis L. Cothran
; age 64; director since 1995; retired, having previously served as President and Chief Operating Officer of Trigon Healthcare, Inc., formerly Blue Cross and Blue Shield of
Virginia (health insurance company), where before being President she held positions of increasing responsibility including Chief Financial Officer. Ms. Cothran previously served on the board of directors of Tredegar Corporation from 1993
through 2005. Ms. Cothran brings to the Board of Directors business leadership, corporate strategy and financial expertise.
Mark M. Gambill
; age 60; director since 2009; co-founder, Managing Director and Chairman of Cary Street Partners (financial advisory and wealth management firm), having previously worked for Wheat
First Securities from 1972, including serving as chairman of the underwriting committee, until it was sold to First Union Corporation (now Wachovia Corporation) in 1998. Other directorships: Speedway Motorsports, Inc. and Triangle Capital
Corporation. Mr. Gambill brings to the Board of Directors over thirty-five years of involvement in the capital markets. Mr. Gambill also adds to the Board of Directors his entrepreneurial and financial expertise as well as his board and
board committee experiences as a director of other public companies.
Bruce C. Gottwald
; age 77;
director since 1962; Chairman of the Board and Chairman of the Executive Committee since June 1, 2001, having previously served as Chief Executive Officer and Chairman of the Board of Ethyl Corporation. From 1998 through 2004, Mr. Gottwald
served as an independent director of CSX Corporation. As
3
the former Chief Executive Officer of Ethyl Corporation, Mr. Bruce Gottwald contributes to the Board of Directors key operational and leadership experience with the company and extensive
knowledge of the chemical industry and history of the company. His background and experience enable him to add institutional and industry insight to Board discussions.
Thomas E. Gottwald
; age 50; director since 1994; President and Chief Executive Officer of NewMarket since
March 3, 2004, having previously served as President and Chief Executive Officer of Ethyl Corporation from June 1, 2001 through June 30, 2004 and President and Chief Operating Officer of Ethyl prior thereto. As President and Chief
Executive Officer of the company, Mr. Thomas Gottwald brings to the Board of Directors knowledge of the companys operations and history as well as expertise regarding the industry as a whole.
Patrick D. Hanley
; age 66; director since 2004; retired, having previously served as Senior Vice
President-Finance and Accounting of UPS Ground Freight, Inc., formerly Overnite Corporation (truckload and less-than-truckload carrier and wholly owned subsidiary of United Parcel Service, Inc.), also having previously served as Director, Senior
Vice President and Chief Financial Officer of Overnite Corporation. Other directorship: Xenith Bankshares, Inc. Mr. Hanley brings to the Board of Directors insight and knowledge into the management of public companies as well as accounting,
finance and SEC reporting experience.
James E. Rogers
; age 65; director since 2003; retired, having
previously served as President of SCI Investors Inc. (private equity investment firm) until January 1, 2011. Other directorship: Owens & Minor, Inc. Mr. Rogers brings to the Board of Directors leadership experience and expertise
regarding the management of public companies due to his ongoing board and board committee experience, such as his current role as an independent director of Owens & Minor, and his previous membership on the boards of Caraustar Industries,
Inc., Wellman, Inc. and Cadmus Communications, Inc.
Charles B. Walker
; age 72; director since 1989;
retired, having previously served as Vice Chairman of the Board of Albemarle Corporation (specialty chemicals company) from June 14, 2002 through January 31, 2003 and Vice Chairman of the Board and Chief Financial Officer of Albemarle
Corporation prior thereto. Mr. Walker brings to the Board of Directors his familiarity with issues facing the specialty chemical industry and his expertise in accounting and finance.
Our Board of Directors recommends that you vote FOR all of the nominees listed above.
Board of Directors
Our
company is managed under the direction of our Board of Directors, which has adopted Corporate Governance Guidelines to set forth certain corporate governance practices. The Corporate Governance Guidelines are available on our Internet website at
http://www.newmarket.com
under Investor Relations, Corporate Governance.
Independence of Directors
Upon the recommendation of our Nominating and Corporate Governance Committee, our Board of Directors has affirmatively
determined that each of the following directors is independent under the general listing standards of the New York Stock Exchange, the exchange on which shares of NewMarket common stock are listed, and our Corporate Governance
Guidelines: Messrs. Gambill, Hanley, Rogers and Walker, and Ms. Cothran. Our Board has adopted categorical standards, as part of our Corporate Governance Guidelines, to assist it in making determinations of independence. Each of the directors
identified as independent in this proxy statement meets these standards. A copy of these standards is attached as
Annex A
to this proxy statement.
Board Meetings
Our Board of Directors meets on a regularly
scheduled basis during the year to review significant developments affecting our company and to act on matters requiring board approval, and may hold special meetings between scheduled meetings when appropriate. During 2010, our Board held five
meetings. During 2010, each of the directors attended at least 75 % of the aggregate of (1) the total number of meetings of all committees of our Board on which the director then served and (2) the total number of meetings of our
Board of Directors.
4
Meetings of Non-Management Directors; Presiding Director
Our Corporate Governance Guidelines require that the non-management members of our Board of Directors meet in executive session at each
regularly scheduled board meeting. Our Board of Directors has determined that an independent presiding director should chair all meetings of non-management directors, as provided in our Corporate Governance Guidelines. The presiding director
position will rotate among the chairs of each of the independent board committees in the following order: Compensation Committee, Audit Committee and Nominating and Corporate Governance Committee. During those meetings, the presiding director has
the responsibilities to lead the meeting, set the agenda and determine the information to be provided to the other non-management directors at the meeting. Shareholders and other interested persons may contact any of the non-management directors
through the method described in Communications with Our Board below. Our Corporate Governance Guidelines also require that the independent members of our Board of Directors meet in executive session at each regularly scheduled
board meeting.
Director Attendance at Annual Meeting
Our policy is that directors attend the annual meeting of shareholders each year. All directors, who were directors on the date of last
years annual meeting of shareholders, attended last years annual meeting of shareholders.
Communications
with Our Board
Our Board of Directors unanimously has approved a process for shareholders to send communications to
the Board and individual directors. Shareholders and other interested persons may communicate with the full Board of Directors, a specified committee of our Board, the non-management directors or a specified individual member of our Board in writing
by mail c/o NewMarket Corporation, 330 South Fourth Street, Richmond, Virginia 23219, Attention: Chief Legal Officer. All communications will be forwarded to our Board of Directors, the specified committee of our Board or the specified individual
director, as appropriate. We screen all regular mail for security purposes.
Board Leadership Structure
Our Chairman of the Board, Bruce Gottwald, retired as the Chief Executive Officer of Ethyl Corporation (NewMarkets predecessor) in
June 2001, and has since served as non-executive Chairman of the Board. As a former Chief Executive Officer of the company, Mr. Gottwald brings to the chairmanship extensive experience in the industry generally and the companys business
in particular. The Board of Directors believes this background enhances the role of Chairman of the Board in the development of long-term strategic plans and oversight of senior management in the implementation of those plans. Our Corporate
Governance Guidelines provide that independent directors will meet in executive session without management present at the time of each regular Board meeting and additionally as deemed appropriate or necessary. Because Mr. Gottwald is not
independent under NYSE standards, the chair at these executive sessions rotates among the chairman of the Compensation Committee, the Audit Committee and the Nominating and Governance Committee. The Board of Directors believes our current structure
allows multiple directors to exercise important leadership roles, and also provides for focused engagement by the Board committees and their chairs in their respective areas of responsibility. This structure helps facilitate clear and open
communications between the Board of Directors and senior management, while providing for active oversight by independent directors. For the above reasons, the Board of Directors believes the current leadership structure is appropriate for the
company.
Boards Role in Risk Oversight
The companys management team is primarily responsible for the day-to-day assessment and management of the companys risk exposure. The Board of Directors provides oversight in connection with
these efforts, with a particular focus on the most significant risks facing the company. The Board of Directors believes that full and open communication between the management team and the Board of Directors is essential for both effective risk
management and for meaningful oversight. To this end, the Board of Directors regularly meets with our chief executive officer and the other members of our senior management team to discuss strategies, key challenges, and risks and opportunities for
the company. Management periodically presents to the Board of Directors strategic overviews of the companys most significant issues, including risks, affecting the company.
5
In order to help facilitate its risk oversight responsibilities, the Board of Directors
utilizes each of its committees to oversee specific areas of risk that are appropriately related to the committees areas of responsibility. The Audit Committee assists the Board of Directors in discharging its oversight responsibilities in the
areas of internal control over financial reporting, disclosure controls and procedures and legal and regulatory compliance. The Audit Committee discusses with management, the internal audit group and the independent auditor guidelines and policies
with respect to risk assessment and risk management. The Audit Committee also discusses with management the companys major financial risk exposures and the steps management has taken to monitor and control such exposure. The Compensation
Committee assists the Board of Directors in discharging its oversight responsibilities regarding the risks related to the attraction and retention of personnel as well as the risks associated with the design of compensation programs and arrangements
applicable to both executive officers and to all employees. The Nominating and Corporate Governance Committee monitors and evaluates the implementation of our Corporate Governance Guidelines. While the Board committees are responsible for initially
monitoring certain risks, the entire Board of Directors is kept informed of the significant risks facing the company through management and committee reports about such risks and the steps being taken to mitigate these risks.
Risk Assessment of Compensation Policies and Practices
The Compensation Committee oversees managements evaluation of whether the companys employee compensation policies and practices pose any risks that are reasonably likely to have a material
adverse effect on the company. In conducting this evaluation, management reviews the companys overall compensation structure, taking into account the overall mix of compensation and the overall business risk. Management undertakes such a
review periodically and reports to the Compensation Committee any finding that a risk related to the companys compensation structure may exist, as well as any factors which may mitigate the risk posed by the particular compensation policy or
practice. The company has determined that there are currently no risks arising from its compensation policies and practices that are reasonably likely to have a material adverse effect on the company.
Committees of Our Board
Our Board of Directors has established various committees to assist it with the performance of its responsibilities. These committees and
their current members are described below.
Executive Committee
The Executive Committee currently consists of Messrs. Bruce C. Gottwald (Chairman), Thomas E. Gottwald and Rogers. During 2010, the
Executive Committee did not meet. The Executive Committee exercises all of the powers of our Board of Directors in the management of the ordinary business of our company when our Board of Directors is not in session.
Audit Committee
Messrs. Walker (Chairman), Gambill and Hanley and Ms. Cothran currently serve on the Audit Committee. The Audit Committee operates under a written charter adopted by our Board of Directors, which is
available on our Internet website at
http://www.newmarket.com
under Investor Relations, Corporate Governance. During 2010, the Audit Committee met on five occasions. The primary function of the Audit Committee is to assist our Board of
Directors in discharging its oversight responsibilities relating to our accounting, reporting, including our internal control over financial reporting, and financial practices by monitoring:
(1) these practices, generally,
(2) the integrity of the financial statements and other financial information provided by us to any governmental body or the public,
6
(3) our compliance with legal and regulatory requirements,
(4) our independent registered public accounting firms qualifications and independence and
(5) the performance of our independent registered public accounting firm and internal audit function.
The Audit Committee also reviews and discusses with management the companys major financial risk exposures and the steps management
has taken to monitor and control such exposures, including the companys policies with respect to risk assessment and risk management. Additionally, the Audit Committee approves the engagement of our independent registered public accounting
firm, subject to shareholder ratification. For a further description of the Audit Committees specific responsibilities, see the Audit Committees charter. Upon the recommendation of our Nominating and Corporate Governance Committee, our
Board of Directors has determined that each of the members of the Audit Committee is independent, as that term is defined under the enhanced independence standards for Audit Committee members in the Securities Exchange Act of 1934 (the
Exchange Act) and the rules thereunder, as incorporated into the listing standards of the New York Stock Exchange, and in accordance with our Audit Committee charter. Our Board of Directors has also determined that each of the members of the Audit
Committee is an Audit Committee financial expert, as that term is defined in the rules promulgated by the Securities and Exchange Commission under the Sarbanes-Oxley Act of 2002. Our Board has further determined that each of the members
of the Audit Committee is financially literate and that each of the members of the Audit Committee has accounting or related financial management expertise, as such terms are interpreted by our Board in its business judgment.
Compensation Committee
Messrs. Rogers (Chairman), Hanley and Walker and Ms. Cothran currently serve on the Compensation Committee. The Compensation Committee operates under a written charter adopted by our Board of
Directors, which is available on our Internet website at
http://www.newmarket.com
under Investor Relations, Corporate Governance. Our Board of Directors has determined that each of the members of the Compensation Committee is
independent under the general independence standards of the listing standards of the New York Stock Exchange and our Corporate Governance Guidelines. During 2010, the Compensation Committee met on seven occasions. This committee approves
the compensation of our directors, management-level employees and, together with all of our independent directors, approves the compensation of our Chief Executive Officer. It also approves all bonus awards, certain consultant agreements and initial
salaries of new management-level personnel and grants awards under the 2004 Incentive Plan. The committee has the sole authority to retain and terminate compensation consultants or other advisors to assist it with its duties. The committee has the
sole authority to approve the fees and other retention terms of any such consultant or advisor. The committee may form and delegate its authority to subcommittees where appropriate. For a discussion of the objectives and philosophy of our executive
compensation program, see Compensation Discussion and Analysis beginning on page 13.
Nominating and
Corporate Governance Committee
The Nominating and Corporate Governance Committee currently consists of Messrs. Hanley
(Chairman), Gambill and Rogers and Ms. Cothran. The Nominating and Corporate Governance Committee operates under a written charter adopted by our Board of Directors, which is available on our Internet website at
http://www.newmarket.com
under Investor Relations, Corporate Governance. Our Board of Directors has determined that each of the members of the Nominating and Corporate Governance Committee is independent under the general independence standards of the listing
standards of the New York Stock Exchange and our Corporate Governance Guidelines. The Nominating and Corporate Governance Committee met on two occasions during 2010. This committee develops and recommends to our Board of Directors appropriate
corporate governance guidelines and policies, monitors and evaluates the implementation of these guidelines and policies, identifies individuals qualified to act as directors and recommends director candidates to our Board for nomination by our
Board.
Nominating and Corporate Governance Committee Process for Identifying and Evaluating Director Candidates.
The
Nominating and Corporate Governance Committee evaluates all director candidates in accordance with the director qualification standards described in our Corporate Governance Guidelines. The Nominating and Corporate Governance Committee evaluates any
candidates qualifications to serve as a member of our Board based on the skills and experience of individual board members as well as the skills and experience of our Board as a whole. In addition, the Nominating and
7
Corporate Governance Committee will evaluate a candidates independence, skills and experience in the context of our Boards needs. While the Board of Directors has not adopted a
diversity policy, the Nominating and Corporate Governance Committee and the Board believe it is desirable for the Board to be composed of individuals who represent a mix of backgrounds, skills and experience in order to enhance the Boards
deliberations and discussions.
Director Candidate Recommendations and Nominations by Shareholders.
The Nominating and
Corporate Governance Committees charter provides that the Nominating and Corporate Governance Committee will consider director candidate recommendations by shareholders. Shareholders should submit any such recommendations for the Nominating
and Corporate Governance Committee through the method described under Communications with Our Board above. In addition, in accordance with our amended bylaws, any shareholder entitled to vote for the election of directors may
nominate persons for election to our Board of Directors so long as that shareholder complies with the procedures set forth in our amended bylaws and summarized in Shareholder Proposals beginning on page 33. There are no differences in
the manner in which the committee evaluates director candidates based on whether the candidate is recommended by a shareholder. The Nominating and Corporate Governance Committee did not receive any recommendations from any shareholders in connection
with the annual meeting.
Code of Conduct
We have adopted a Code of Conduct, which is available on our Internet website at
http://www.newmarket.com
under Investor Relations,
Corporate Governance, that outlines the principles, policies and laws that are intended to guide our directors, officers and employees (including our Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer). We
maintain several methods for the reporting of violations of our Code of Conduct or other concerns, including a toll-free hotline. We prohibit retaliation of any kind against employees for good faith reports of ethical violations.
We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K relating to amendments to or waivers from any provision
of our Code of Conduct applicable to the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer by posting this information on our Internet website.
Availability of Corporate Governance Guidelines, Code of Conduct and Committee Charters
Our Corporate Governance Guidelines, Code of Conduct and the charters of the Audit Committee, Compensation Committee and Nominating and
Corporate Governance Committee are available on our Internet website at
http://www.newmarket.com
under Investor Relations, Corporate Governance and in print to any shareholder upon request by contacting our corporate secretary as described in
Certain Matters Relating to Proxy Materials and Annual Reports Notice of Internet Availability of Proxy Materials on page 35.
8
Compensation of Directors
Our Board determines the form and amount of compensation for our non-employee directors based on the recommendation of the Compensation Committee, which conducts an annual review of compensation for our
non-employee directors. As part of its review, the Compensation Committee considers whether a directors independence will be jeopardized (1) if director compensation and perquisites exceed customary levels, (2) if our company makes
charitable contributions to organizations with which a director is affiliated or (3) if our company enters into contracts with, or provides other indirect forms of compensation to, a director or organization with which a director is affiliated.
The following table and related footnotes present information relating to total compensation of our non-employee directors
for the fiscal year ended December 31, 2010 and information relating to Mr. Thomas E. Gottwalds retirement benefit as a director.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned
or Paid
in
Cash
($)
|
|
|
Stock
Awards
(1)
($)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
|
Change in Pension
Value and Non-
qualified Deferred
Compensation
Earnings (2)
($)
|
|
|
All
Other
Compensation
($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
Phyllis L. Cothran
|
|
$
|
63,500
|
|
|
$
|
19,996
|
|
|
$
|
0
|
|
|
$
|
3,522
|
|
|
$
|
0
|
|
|
$
|
87,018
|
|
|
|
|
|
|
|
|
Mark M. Gambill
|
|
|
53,000
|
|
|
|
19,996
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
72,996
|
|
|
|
|
|
|
|
|
Bruce C. Gottwald
|
|
|
174,500
|
|
|
|
19,996
|
|
|
|
0
|
|
|
|
3,176
|
|
|
|
0
|
|
|
|
197,672
|
|
|
|
|
|
|
|
|
Patrick D. Hanley
|
|
|
68,500
|
|
|
|
19,996
|
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
88,496
|
|
|
|
|
|
|
|
|
James E. Rogers
|
|
|
56,000
|
|
|
|
19,996
|
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
75,996
|
|
|
|
|
|
|
|
|
Charles B. Walker
|
|
|
65,500
|
|
|
|
19,996
|
|
|
|
0
|
|
|
|
4,498
|
|
|
|
0
|
|
|
|
89,994
|
|
(1)
|
Represents the aggregate grant date fair market value of the 229 shares of NewMarket common stock awarded to each non-employee director under the terms of our 2004
Incentive Plan, computed in accordance with FASB ASC Topic 718. For a description of this plan, see 2004 NewMarket Corporation Incentive Compensation and Stock Plan below.
|
(2)
|
Represents the aggregate change in the actuarial present value from January 1, 2010 to December 31, 2010 of the retirement benefits described under
Directors Retirement Benefits below for eligible directors. The current actuarial present value of this benefit for Mr. Thomas E. Gottwald is zero based on his actuarial life expectancy and assumed board retirement age.
Messrs. Gambill, Hanley and Rogers are not eligible for this benefit.
|
Non-Employee Directors Fees
During 2010, we paid each of our non-employee directors (a) $1,500 for attendance at each board meeting and
(b) $1,500 for attendance at each meeting of a committee of our Board of Directors of which he or she is a member. In addition, we paid each the following quarterly retainers: (a) $7,500 to our non-employee directors; (b) $35,000 to
our Chairman of the Board; (c) $1,250 to each member of our Audit Committee and $2,500 to the Chairman of our Audit Committee; (d) $1,250 to the Chairman of our Compensation Committee; and (e) $1,250 to the Chairman of our Nominating
and Corporate Governance Committee. Each non-employee director was eligible for an annual stock grant of $20,000. We do not pay retainer or attendance fees to employee members of our Board of Directors for their service on our Board or its
committees.
9
Directors Retirement Benefits
Any director who was elected to our Board on or before February 23, 1995 and who retires from our Board will receive $12,000 per year
for life after age 60. The $12,000 is payable in quarterly installments. The retirement payments to former directors may be discontinued under certain circumstances. Of our current directors, Messrs. Bruce C. Gottwald, Thomas E. Gottwald and Charles
B. Walker, and Ms. Phyllis L. Cothran are eligible for this benefit upon their retirement after age 60.
2004
NewMarket Corporation Incentive Compensation and Stock Plan
Under the 2004 Incentive Plan, each non-employee director
is awarded on each July 1 that number of whole shares of NewMarket common stock that, when multiplied by the closing price of NewMarket common stock on the immediately preceding business day, as reported in
The Wall Street Journal
, equal
as nearly as possible but do not exceed $20,000. The shares of NewMarket common stock awarded under the 2004 Incentive Plan are nonforfeitable and the recipient directors immediately and fully vest in the NewMarket common stock issued under 2004
Incentive Plan. Subject only to the limitations on transfer as may be specified by applicable securities laws, directors may sell their shares acquired pursuant to the 2004 Incentive Plan at any time.
Certain Relationships and Related Transactions
Thomas E. Gottwald, President, Chief Executive Officer and director of our company, is a son of Bruce C. Gottwald, Chairman of the Board of Directors of our company. The members of the family of Bruce C.
Gottwald may be deemed to be control persons of our company.
Our policy is to require that any transaction with a related
person required to be reported under applicable Securities and Exchange Commission rules be reviewed and approved or ratified by a committee consisting of independent directors. We have not adopted procedures for review of, or standards for approval
of, these transactions, but instead review related person transactions on a case-by-case basis.
Section 16(a) Beneficial Ownership
Reporting Compliance
Based solely on our review of the forms required by Section 16(a) of the Exchange Act that we
have received, we believe that there has been compliance with all filing requirements applicable to our officers and directors and beneficial owners of greater than 10% of NewMarket common stock, except for two inadvertent late filings for Mark M.
Gambill. The late filings were related to two dispositions made by a managed account owned by Mr. Gambill. A Form 4 was promptly filed once Mr. Gambill became aware of these transactions.
10
Stock Ownership
Principal Shareholders
The following table lists any person
(including any group as that term is used in Section 13(d)(3) of the Exchange Act) who, to our knowledge, was the beneficial owner as of January 31, 2011, of more than 5% of our outstanding voting shares.
|
|
|
|
|
|
|
|
|
|
|
Title of Class
|
|
Name and Address of
Beneficial Owners
|
|
Number of
Shares
|
|
|
Percent of
Class
|
|
|
|
|
|
Common Stock
|
|
Bruce C. Gottwald
330 South
Fourth Street
Richmond, Virginia 23219
|
|
|
1,381,080
|
(a)
|
|
|
9.95
|
%
|
|
|
|
|
|
|
Floyd D. Gottwald, Jr.
330
South Fourth Street
Richmond, Virginia 23219
|
|
|
836,350
|
(b)
|
|
|
6.02
|
%
|
|
|
|
|
|
|
BlackRock, Inc.
40 East
52
nd
Street
New York, NY
|
|
|
760,547
|
(c)
|
|
|
5.48
|
%
|
|
|
|
|
|
|
LSV Asset Management
1 N.
Wacker Drive
Suite 4000
Chicago,
Illinois 60606
|
|
|
744,675
|
(d)
|
|
|
5.36
|
%
|
(a)
|
As of January 31, 2011, Bruce C. Gottwald had sole voting and investment power over all of the shares disclosed except 18,731 shares held by his wife and 33,220
shares held in a charitable foundation as to which he disclaims beneficial ownership. This amount does not include an aggregate of 1,354,865 shares (9.76%) of NewMarket common stock beneficially owned by the adult sons of Bruce C. Gottwald or
an aggregate of 637,220 shares (4.59%) beneficially owned by three separate trusts of which each of the adult sons of Bruce C. Gottwald and his wife are co-trustees. Bruce C. Gottwald and his adult sons have no agreement with respect to the
acquisition, retention, disposition or voting of NewMarket common stock.
|
(b)
|
Information provided is based solely on an amendment to Schedule 13G filed on February 14, 2011 by Floyd D. Gottwald, Jr., who has sole voting and investment power
over all of the shares, except 150 shares held by his wife and 33,220 shares held in a charitable foundation as to which he disclaims beneficial ownership. This amount does not include any shares of NewMarket common stock beneficially owned by the
adult sons of Floyd D. Gottwald, Jr. Floyd D. Gottwald, Jr. and his adult sons have no agreement with respect to the acquisition, retention, disposition or voting of NewMarket common stock.
|
(c)
|
Information provided is based solely on Schedule 13G filed on February 7, 2011 by BlackRock, Inc., which has sole voting and dispositive power over all 760,547
shares.
|
(d)
|
Information provided is based solely on Schedule 13G filed on February 9, 2011 by LSV Asset Management, which has sole voting and dispositive power over all
744,765 shares.
|
11
Directors and Executive Officers
The following table sets forth as of January 31, 2011, the beneficial ownership of NewMarket common stock by all of our directors,
our Chief Executive Officer and our other executive officers listed under Compensation of Executive Officers on page 21 and all of our directors and current executive officers as a group. Unless otherwise indicated, each person listed
below has sole voting and investment power over all shares beneficially owned by him or her.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Beneficial Owner or Number of Persons in Group
|
|
Number of Shares
with Sole Voting and
Investment Power(1)
|
|
|
Number of Shares
with
Shared Voting
and Investment Power
|
|
|
Total
Number
of Shares
|
|
|
Percent of
Class (2)
|
|
|
|
|
|
|
Phyllis L. Cothran
|
|
|
4,218
|
|
|
|
|
|
|
|
4,218
|
|
|
|
|
|
|
|
|
|
|
Steven M. Edmonds
|
|
|
3,772
|
|
|
|
|
|
|
|
3,772
|
|
|
|
|
|
|
|
|
|
|
David A. Fiorenza
|
|
|
4,567
|
|
|
|
|
|
|
|
4,567
|
|
|
|
|
|
|
|
|
|
|
Mark M. Gambill
|
|
|
802
|
|
|
|
|
|
|
|
802
|
|
|
|
|
|
|
|
|
|
|
Bruce C. Gottwald
|
|
|
1,329,129
|
|
|
|
51,951
|
(3)
|
|
|
1,381,080
|
|
|
|
9.95
|
%
|
|
|
|
|
|
Thomas E. Gottwald
|
|
|
493,891
|
|
|
|
30,785
|
(4)
|
|
|
524,676
|
|
|
|
3.77
|
%
|
|
|
|
|
|
Patrick D. Hanley
|
|
|
2,679
|
|
|
|
1,000
|
|
|
|
3,679
|
|
|
|
|
|
|
|
|
|
|
Bruce R. Hazelgrove, III
|
|
|
20,736
|
|
|
|
1,101
|
|
|
|
21,837
|
|
|
|
|
|
|
|
|
|
|
C. S. Warren Huang
|
|
|
15,245
|
|
|
|
|
|
|
|
15,245
|
|
|
|
|
|
|
|
|
|
|
James E. Rogers
|
|
|
4,433
|
|
|
|
|
|
|
|
4,433
|
|
|
|
|
|
|
|
|
|
|
Charles B. Walker
|
|
|
15,249
|
|
|
|
|
|
|
|
15,249
|
|
|
|
|
|
|
|
|
|
|
Directors and executive officers as a group (14 persons)
|
|
|
1,908,436
|
|
|
|
84,837
|
|
|
|
1,993,273
|
|
|
|
14.34
|
%
|
(1)
|
The amounts in this column include shares of NewMarket common stock with respect to which certain persons had the right to acquire beneficial ownership within 60 days
of January 31, 2011, pursuant to the exercise of options granted under the 1982 Stock Option Plan: Thomas E. Gottwald: 15,000 shares; and the directors and current executive officers as a group
:
15,000 shares.
|
(2)
|
Except as indicated, each person or group owns less than 1% of NewMarket common stock.
|
(3)
|
Mr. Bruce C. Gottwald disclaims beneficial ownership of all 51,951 of such shares.
|
(4)
|
Mr. Thomas E. Gottwald disclaims beneficial ownership of all 30,785 of such shares.
|
12
COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
2010 Business
Highlights
2010 was the companys most profitable year ever, and our strong financial results were reflected in our executive
compensation program. Our 2010 business highlights include:
|
|
|
Net income for 2010 increased to $177.1 million, or $12.09 per share, an improvement of 9% over net income for 2009.
|
|
|
|
Earnings per share for 2010 increased 14% over 2009.
|
|
|
|
Total shareholder return (TSR) for our 1-, 3- and 5-year periods ending December 31, 2010 was 9.1%, 32.3%, and 40.0%, respectively, which compares
favorably to TSR for other companies in our industry. The TSR for the companies in the S&P Specialty Chemicals Index for the same periods was 31.9%, 9.1% and 13.4%.
|
2010 Compensation Decisions
Highlights of our 2010 executive compensation program
include:
|
|
|
We awarded our officers discretionary cash bonuses for 2010 tied in part to the companys strong performance with respect to operating profit and
the achievement of our corporate and the executives individual goals.
|
|
|
|
We granted modest stock-based awards to our named executives designed to align the executives interests with those of our shareholders. The
executives must hold the shares for at least one year.
|
|
|
|
Our executive compensation program continues to reflect good corporate governance practices. We have not entered into long-term employment agreements
with any of our named executive officers, do not provide our named executives with significant perquisites of any kind, and do not gross-up any of our named executives for taxes on any compensatory payments they may receive.
|
Compensation Philosophy and Objectives
Our executive compensation philosophy is to create a long-term direct relationship between pay and our performance. Our executive compensation program is designed to provide a balanced total compensation
package over the executives career with our company. The compensation program objectives are to attract, motivate and retain the qualified executives that help ensure our future success, to provide incentives for increasing our profits by
awarding executives when individual and corporate goals are achieved and to align the interests of executives and long-term shareholders. The compensation package of our named executive officers consists of four main elements:
|
1.
|
base salary for our executives that is competitive relative to the market, and that reflects individual performance, retention and other relevant considerations;
|
|
2.
|
discretionary annual bonus awards payable in cash and tied in part to the satisfaction of corporate and individual objectives;
|
|
3.
|
equity-based grants intended to achieve unity of interest between executives and shareholders; and
|
|
4.
|
benefit plans designed to promote long-term employment.
|
13
Process for Setting Executive Compensation
The Compensation Committee, referred to as the Committee in this discussion, is responsible for developing and overseeing the
implementation of our philosophy with respect to the compensation of executives and for monitoring the implementation and results of the compensation philosophy to ensure compensation remains competitive, creates proper incentives to enhance
shareholder value and rewards superior performance. The Committee annually reviews and approves for each named executive officer, and particularly with regard to the Chief Executive Officer, all components of the executives compensation. The
Committee has the discretion to award annual bonuses to each of the named executives, and reviews and approves the process and factors (including individual and corporate performance measures and actual performance versus such measures) used by the
Chief Executive Officer to recommend such awards. Additionally, the Committee reviews and approves the base salary, equity-incentive awards (if any) and any other special or supplemental benefits of the named executive officers. All of our
independent directors also approve the Chief Executive Officers compensation.
The Chief Executive Officer annually
provides the Committee a written evaluation of each named executive officers performance, based in part on the individual performance goals and objectives developed by the Chief Executive Officer at the beginning of the year, as well as other
factors. The Chairman of the Board provides a written evaluation for the Chief Executive Officer. These evaluations serve as the bases for the annual bonus recommendations which are submitted to the Committee for each named executive, as described
more fully below under Program Components Annual Bonus.
Under its charter, the Committee has the sole
authority to retain and terminate one or more compensation consultants or other advisors to assist it with its duties. For 2010, the Committee engaged Frederic W. Cook & Co., Inc. (FWC) as its compensation consultant to advise
it on our executive and director compensation programs and to provide it with market compensation data. FWC does not perform any other services for the company, other than the executive and director compensation consulting services it provides to
the Committee. FWC provides the Committee comparative market data on compensation practices and programs of the companys peer group and companies of comparable size. FWC also advised the Committee on the design and implementation of the
companys executive stock award program for 2010, as described below under the heading Program Components Stock Awards.
Our Compensation Peer Group
With the assistance of FWC, the Committee selected a compensation peer group of companies similar to us in size or business. The peer group is used to compare executive compensation levels against
companies that have executive positions with responsibilities similar in breadth and scope to ours and have businesses that compete with us for executive talent. The Committee reviews the peer group compensation data prepared by FWC to ensure that
our executive compensation program is competitive.
The following 12 companies comprise the peer group used in connection with 2010
compensation:
|
|
|
|
|
Albemarle Corporation
|
|
Innospec
|
|
A. Schulman, Inc.
|
Arch Chemicals, Inc.
|
|
Lubrizol
|
|
Sensient Technologies Corp.
|
Compass Minerals Group, Inc.
|
|
Minerals Technologies Inc.
|
|
Stepan Company
|
Fuller
|
|
OM Group, Inc.
|
|
Tredegar Corporation
|
Program Components
Our executive compensation program consists of the following elements:
Base Salary
Our base salary structure is designed to encourage internal growth, attract and retain new talent, and reward strong leadership that will sustain our growth and profitability. The base salary for each
named executive officer reflects our past and current operating profits, the named executive officers individual contribution to our success throughout his career, internal pay equity and market data regarding comparable positions within peer
group and, in certain cases, market survey companies. In determining and setting base salary, the Committee considers all of these factors, though it does not assign specific weights to any factor. The Committee generally considers revisions to base
salary for each named officer one year after the last change to base salary for that officer.
14
For each of our named executive officers, we review base salary data for comparable
executive positions in our peer group to ensure that the base salary rate for each executive is competitive relative to the market. In general, for most of our executives, we regard a base salary rate that is near the 50th percentile (median) of the
peer group base salary data as appropriately competitive, and have historically found that maintaining salaries within a 15% range of that percentile allows us to retain our existing executives and hire the desired caliber of new talent when
required. However, we do not automatically set base salary rates at any particular percentile or range of the peer group data, and we may pay a salary that is significantly higher or lower than the median base salary level if we deem it appropriate
under the circumstances.
For 2010, two of our named executive officers Messrs. Edmonds and Fiorenza received
merit-based salary increases of 4% and 3%, respectively. Overall, the salary increases fell within the 2010 merit increase guidelines for rewarding performance based upon the accomplishment of the corporate and individual performance goals
established for each executive at the beginning of the year. Messrs. Gottwald and Hazelgrove received salary increases in 2010 of 7% and 7%, respectively, which included both a merit-based component consistent with the size of the merit increase for
the previous two named executives, as well as a component designed to bring these executives salaries in line with the peer group median for their positions as reported in the peer group compensation data we reviewed. For 2010, the base
salaries of all our named executive officers, other than Mr. Huang, were slightly below the 50th percentile base salary level for comparable executives positions in our peer group.
Mr. Huang received a more substantial salary increase in 2010 than the other named executive officers. This placed
Mr. Huangs 2010 base salary substantially above the market median for base salaries for his position (Mr. Huangs 2010 base salary was slightly above the 75th percentile of the market base salary level for his position). The
Compensation Committee determined that paying Mr. Huang a base salary for 2010 that was substantially higher than the market median was appropriate, given Mr. Huangs strong individual performance during the prior year and the strong
performance of the operating subsidiary Afton Chemical Corporation (Afton) for which Mr. Huang is primarily responsible. Afton is the companys primary operating subsidiary, and as president of Afton, Mr. Huang performs
a function that for the company that is similar to the function performed by the chief operating officer at other companies in our peer group. Aftons size and operations make its performance critical to the overall success of the company. As
such, the Committee feels it important to pay Mr. Huang a base salary that reflects the importance and scope of the duties he performs for the company, that appropriately rewards him for his and Aftons strong performance in prior years,
and that, given his demonstrated record of performance, provides him with a strong incentive to remain with the company for the foreseeable future. The Committee believes that the size of Mr. Huangs 2010 base salary was appropriately
designed to meet these goals.
The market data we reviewed for purposes of determining the competitiveness of
Mr. Huangs compensation for 2010 was based on the peer group compensation data described above, supplemented by compensation data derived from an average of two national general industry surveys. We supplemented the peer group data with
the blended survey data in Mr. Huangs case in order to obtain a fuller picture of market competitive compensation levels for Mr. Huang for 2010, since peer group compensation data for a position equivalent to Mr. Huangs,
i.e., the president of a primary operating subsidiary, was limited. The compensation data from the market surveys was adjusted to take into account the different sizes of the companies that were included in the surveys, relative to the
companys size. (Blended market survey data was also obtained for the other named executives, but was used by the Compensation Committee only to obtain a general understanding of current compensation practices in the industry, not as a
reference point for setting compensation for any executive other than Mr. Huang.)
Annual Bonus
The objectives of our Management Bonus Plan (the Bonus Plan) are to encourage and reward our employees, including the named executive
officers, who contribute to and participate in our success by their invention, ability, industry, leadership, loyalty or exceptional service and to recruit additional executives who will contribute to that success. Each of our named executive
officers is eligible for consideration for an annual cash award under the Bonus Plan. The Chief Executive Officer makes recommendations regarding bonus awards for the named executive officers and the Chairman of the Board provides the bonus
recommendation for the Chief Executive Officer. However, the Committee has sole and final authority and discretion in designating to whom awards are made, the size of the award, if any, and its terms
15
and conditions. The bonus recommendation for each of the named executive officers depends on a number of factors, including (i) the overall size of the bonus pool for the year, (ii) the
satisfaction of certain individual and corporate performance measures, and (iii) other factors, such as the executives total cash compensation in relation to the total cash compensation for similarly situated executives in the
companys peer group and individual performance of the executive. How these factors influence the bonus recommendations is discussed in further detail below.
Bonus Pool
The annual bonus pool is calculated as a percentage of
operating profit excluding nonrecurring items. Since the Bonus Plans inception we have used operating profit as the financial indicator from which to create the bonus pool. The Committee believes that operating profit effectively represents
the quality and quantity of corporate performance for determining whether bonuses should be given in the existing environment.
The percentage of operating profit used to fund the bonus pool is determined on an annual basis and may change from year to year. The
companys internal compensation team, led by the Vice President Corporate Resources, initially develops a preliminary percentage based on projected operating profit for the year through its annual budgeting and planning process. The
final percentage is recommended to the Committee by the Chief Executive Officer and is considered and approved by the Committee after the fiscal year has ended and before bonuses are paid. Equity awards (if any) are funded from the same bonus pool
as the cash bonuses. The actual cash bonuses and equity awards paid for any given fiscal year must approximate the bonus pool that is approved for the year.
For 2010, the Chief Executive Officer recommended and the Committee approved a bonus pool equal to 3% of operating profit. The value of the stock awards granted in 2010, as discussed below under
Stock Awards, was equal to approximately 1% of operating profit. The remaining bonus pool (approximately 2% of operating profit) was reserved for payment of the annual cash bonuses for 2010.
Measuring Individual Performance and Corporate Performance
Annually, the companys internal compensation team also develops target bonus opportunities for each of the senior executives. For
2010, the target bonus opportunity for each of the named executive officers was equal to 60% of each executives 2010 base salary. In approving the amount of the bonus to each named executive officer, the Committee does not set any formal
minimum or maximum bonus amounts.
Each named executive is initially eligible to receive a percentage of the target bonus
opportunity based on the satisfaction of certain individual and corporate performance measures. For executive-level employees (including the named executives), corporate performance measures are weighted more heavily than individual performance
measures. This practice ensures that managers who have the most influence over corporate results receive awards that are primarily based on corporate results. For 2010, 80% of each named executives target bonus opportunity (the target
corporate performance component) was based on the companys performance with respect to certain corporate performance measures and 20% (the target individual performance component) was based on the satisfaction of certain
individual performance goals. Corporate performance measures for the named executives are generally based on the companys annual operating plan goals for the fiscal year. However, the Chief Executive Officer may look to and take into account
corporate performance measures other than the annual operating plan goals. In formulating his bonus recommendations for the named executives, the determination of which corporate performance measures to take into account, the weighting of those
measures and the relevant level of company performance versus those measures is ultimately made by the Chief Executive Officer in his discretion. The Chief Executive Officer may recommend that up to 100% of the target corporate performance component
for each named executive be paid.
The principal corporate performance measures which the Chief Executive Officer proposed to
the Committee and which the Committee considered in determining the 2010 bonuses payable to the named executive officers were:
|
|
|
An increase in earnings from continuing operations, excluding special item consisting of a loss on interest rate swaps.
|
|
|
|
The companys safety performance rating ranked among the best in the industry.
|
16
Based on these measures and the companys performance with respect to these measures,
the Chief Executive Officer recommended payment at 100% of the target corporate performance component for each of the named executive officers for 2010.
At the beginning of each year, senior management (including the named executive officers) establishes individual goals and objectives for the upcoming year. The goals and objectives are reviewed by the
Chief Executive Officer. After the end of each year, each named executive officer receives an annual performance review and is assigned a rating based on individual performance. The rating determines the percentage of the target individual
performance component which the Chief Executive Officer will take into account in formulating his bonus recommendation for each executive. For 2010, the possible ratings for each named executive officer ranged from 1 to 4, with 1 corresponding to a
recommended payout percentage for the individual performance component of the 2010 bonus at 150% of target, 2 to a recommended payout at 100% of target, 3 to a recommended payout at 50% of target, and 4 to no recommended payout.
The individual goals for the named executives are both qualitative and quantitative in nature and cover a broad array of performance
measures for each executive. Examples of the individual performance goals established for each of the named executive officers for 2010 were as follows:
Mr. Gottwald
: Meet annual operating plan profit and volume targets for the company and various subsidiaries; increase shareholder value; develop succession plans for senior management
personnel; improve the companys safety and environmental performance; evaluate the companys capital structure and balance this with the outlook for acquisitions and business performance.
Mr. Huang
: Meet established 2010 budget projections (i.e. volume, gross profit, and operating profit); continue to improve
Aftons health, safety and environmental performance; implement Aftons long term strategy on the regional and functional levels; streamline Aftons business processes; grow the companys geographic footprint; drive Aftons
acquisition strategy.
Mr. Hazelgrove
: Develop plans for organizational structure within the company and its
subsidiaries; review the companys information technology platforms and globalize information technology as appropriate; review the companys employee benefit plans to explore design alternatives; provide support in the development and
evolution of the senior management team; work with department leadership to develop talent/succession plans for global organizations; focus on safety, customer service and cost in the delivery of general services; track legislative issues that
affect NewMarkets businesses.
Mr. Fiorenza
: Direct the companys acquisition activities; implement
enhancements to the comprehensive internal audit function that identifies and manages NewMarkets risks; implement corporate governance programs across all functions; increase process efficiencies within the companys Treasury group.
Mr. Edmonds
: Promote business and legal ethics practices among NewMarket employees; manage litigation activity and
contain expenses for legal services; update NewMarkets contract policy and implement an electronic contract approval policy; provide counsel in merger and acquisition activity; evaluate patent strategy and implementation to ensure maximum
protection of companys intellectual property.
For 2010, based on the assessment of their performance versus these
goals, each of the named executive officers received an individual performance rating of 1. This increased the size of their initial recommended bonus opportunities from 60% to 66% of their 2010 annual base salaries.
Other Factors.
The Chief Executive Officer arrives at an initial recommended bonus amount for each of the named executive
officers, other than himself, based on the target opportunities and examination of the individual and corporate performance factors described above. Subject to the overall size of the bonus pool, the Chief Executive Officer then may propose
adjustments to the initial bonus amounts based on any factors he deems relevant, including (a) the executives position and responsibilities, (b) the relationship between (i) the cash compensation levels payable to the executive
and (ii) the total cash compensation amounts paid to similarly situated executives in the companys peer group or market survey data; and (c) individual performance of the executive. The Chief Executive Officer then presents and
recommends these adjusted amounts to the Committee for approval. The Chairman of the Board goes through a similar process with respect to determining the bonus recommendation for our Chief Executive Officer.
17
For 2010, increases were recommended to the initial bonus payments for
all of the named executives. The final recommended bonus amounts for each of the named executives as a percentage of each executives 2010 base salary were as follows: Mr. Gottwald, 89%; Mr. Fiorenza, 67%; Mr. Huang, 83%;
Mr. Edmonds, 91%; and Mr. Hazelgrove, 101%. The Chief Executive Officer recommended increases for the initial bonus amounts payable to Messrs. Edmonds, Fiorenza, Hazelgrove, and Huang, and the Chairman of the Board recommended an increase
to the bonus payable to Mr. Gottwald, in recognition of the companys strong performance in 2010 and the executives attainment of the companys corporate and their individual goals. The size of the recommended increase varied
from individual executive to executive depending on the Chief Executive Officers (in the case of the named executives other than himself) and the Chairman of the Boards (in the case of the Chief Executive Officer) assessment of each
executives individual performance for 2010, as well as each executives level of total cash compensation relative to the peer group and market survey data. After adjustment, the recommended bonus payments for each named executive officer
other than Mr. Huang placed each executives total cash compensation for 2010 from slightly below to slightly above the market median for total cash compensation for comparable positions in our peer group, and in Mr. Huangs case
place his total cash compensation for 2010 slightly above the 75
th
percentile for total cash compensation in the blended market survey data. Mr. Huangs total cash compensation for 2010 was significantly higher than the market median for his position for the
same reasons discussed above under Base Salary.
Committee approval
. In reaching its determination
regarding whether to pay an annual bonus and the amount of such bonus, if any, the Committee considers the bonus recommendations of the Chief Executive Officer (with respect to the bonuses payable to the named executives other than
Mr. Gottwald) and the Chairman of the Board (with respect to the bonus payable to Mr. Gottwald) and the process and factors used by them in arriving at the bonus recommendations as described above. The Committee uses these recommendations
as guidelines to determine the bonus payments to the named executives, but has discretion to raise or lower the recommended bonus amounts for any executive. The final determination of the bonus amounts payable to each of the named executives is in
all cases made by the Committee in its sole discretion.
For 2010, the Committee determined that the process the Chief
Executive Officer and the Chairman of the Board used to recommend bonus amounts for each of the named executive officers for 2010 was reasonable and that the proposed amounts of the 2010 bonuses were appropriate. The Committee determined in its
discretion to pay bonus amounts to the named executives equal in each case to the recommended amounts, and did not make any further discretionary adjustments to these amounts.
Stock Awards
We encourage, but do not insist on, executive
ownership of NewMarket common stock. Methods of supporting ownership include the 2004 Incentive Plan and the company sponsored Savings Plan, which is discussed under Retirement Benefits below.
On November 15, 2010, we granted stock awards to our named executive officers under the 2004 Incentive Plan, as reported in the
Grants of Plan Based Awards Table below. The stock awards were immediately vested but may not be transferred by the executives (other than shares withheld to pay applicable withholding taxes) until November 15, 2011. Prior to these grants, the
company has not granted long term incentive awards to its executives for several years. The Compensation Committee recognizes the importance of having a portion of the named executive officers compensation be paid in the form of equity, to
help align the executives interests with the interests of the companys shareholders. These stock grants are designed to achieve that objective, as well as recognize and reward the executives for their contributions toward the
companys long-term success. Our stock award program is relatively modest compared to the size of equity-based incentive awards granted to comparably situated executives in our peer group and market survey data. The addition of the long term
incentive grant still positions our named executives below the 50th percentile of total direct compensation when compared to peer group and market-competitive counterparts. To this point, the Compensation Committee has chosen to emphasize the annual
cash-based incentive award program over a long-term incentive program because it believes the discretionary nature of the cash-based incentive program gives it the needed flexibility to factor in and reward the attainment of longer-term goals for
the company and the executives, as the Committee deems appropriate.
18
We have not timed nor do we plan to time our release of material non-public information for
the purpose of affecting the value of executive compensation.
Retirement Benefits
We offer a number of retirement-related plans to provide security for current and future needs of our employees, including our named
executive officers and their families. We believe that our benefit plans further our goals of attracting and retaining highly-qualified named executive officers. Our retention programs create management stability and solidify alignment of interest
between the named executive officers and our long-term shareholders.
Pension Plan
. We maintain a tax-qualified,
defined benefit pension plan, which we refer to in this proxy statement as the Pension Plan, aimed at allowing employees, including the named executive officers, to retire comfortably at age 65. The Pension Plan is a final average pay plan based on
an average of the participants three consecutive highest-paid years in the ten year period preceding retirement. Benefits are paid on a monthly basis according to the participants elected form of payment.
Savings Plan
. In addition to the Pension Plan, we maintain a tax-qualified savings plan, which we refer to in this proxy statement
as the Savings Plan, designed to provide employees, including the named executive officers, with a tax-effective method for saving for a comfortable retirement. We contribute 50% of the first 10% of base pay that the participant contributes to the
Savings Plan in the form of NewMarket common stock. The participants contribution is 100% vested at all times, while company contributions vest incrementally until five years of service, when they become fully vested.
Based on research we conducted with Towers Watson, our actuarial consulting firm, we believe that the retirement benefits provided to our
named executive officers under our pension and savings plans are reasonable and competitive compared to benefit plans maintained by other peer group companies.
Excess Benefit Plan
. Because the Internal Revenue Code places limitations on the contributions highly-paid employees, such as the named executive officers, can make to the Pension Plan and the
Savings Plan, we also provide an excess benefit plan, which we refer to in this proxy statement as the Excess Benefit Plan, to which we credit additional amounts for each participant such that the participant receives the benefits that would have
been received but would otherwise exceed Internal Revenue Code limitations. A participant does not become eligible to receive payments under the Excess Benefit Plan unless employment terminates at a time or as a result of an event that would have
caused the benefits to vest under the Pension Plan. All benefits under the Excess Benefit Plan are paid out of our general assets.
Agreements with Executive Officers
We currently do not have employment agreements or change in control agreements with any of our executive officers.
Other Policies
Internal Revenue Code Section 162(m) allows us to
deduct compensation in excess of $1 million paid to our executive officers if certain criteria are satisfied. The stock awards described above under Program Components Stock Awards do not meet such criteria. Bonus Plan awards also
do not meet such criteria because the Committee exercises discretion in determining awards based on such factors the Committee deems relevant as described above under Program Components Annual Bonus. The Committee does not,
however, anticipate awarding compensation under the Bonus Plan that would result in the loss of a material tax deduction.
19
THE COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management and, based on such review
and discussions, the Compensation Committee has recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
|
|
|
THE COMPENSATION COMMITTEE
|
|
|
|
|
James E. Rogers, Chairman
|
|
|
Phyllis L. Cothran
|
|
|
Patrick D. Hanley
|
|
|
Charles B. Walker
|
February 17, 2011
20
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table presents information with respect to total compensation of our Chief Executive Officer, our Principal Financial Officer and the three other most highly compensated executive officers
of our company, whom we refer to in this proxy statement as the named executive officers, for the fiscal year ended December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
|
Salary
(1)
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
(2)
($)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
(3)
($)
|
|
|
All Other
Compensation (4)
($)
|
|
|
Total
($)
|
|
Thomas E. Gottwald
President and Chief Executive Officer
|
|
|
2010
2009
2008
|
|
|
$
|
725,000
675,000
650,000
|
|
|
$
|
650,000
595,000
475,000
|
|
|
$
|
99,885
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
253,596
276,171
184,043
|
|
|
$
|
36,250
33,750
32,500
|
|
|
$
|
1,764,731
1,579,921
1,341,543
|
|
|
|
|
|
|
|
|
|
|
|
David A. Fiorenza
Vice President, Treasurer and Principal Financial Officer
|
|
|
2010
2009
2008
|
|
|
$
|
294,174
285,558
276,308
|
|
|
$
|
200,000
190,000
150,000
|
|
|
$
|
49,943
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
218,944
236,008
153,422
|
|
|
$
|
14,708
14,278
13,815
|
|
|
$
|
777,769
725,844
593,545
|
|
|
|
|
|
|
|
|
|
|
|
C. S. Warren Huang
President of Afton Chemical Corporation
|
|
|
2010
2009
2008
|
|
|
$
|
600,000
370,725
355,100
|
|
|
$
|
500,000
470,000
425,000
|
(5)
|
|
$
|
99,885
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
662,201
594,441
248,932
|
|
|
$
|
30,000
293,536
217,755
|
|
|
$
|
1,892,086
1,728,702
1,246,787
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Edmonds
Vice President and General Counsel
|
|
|
2010
2009
2008
|
|
|
$
|
301,149
286,850
272,975
|
|
|
$
|
275,000
225,000
175,000
|
|
|
$
|
49,943
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
85,348
80,957
50,570
|
|
|
$
|
15,057
14,343
13,649
|
|
|
$
|
726,497
607,150
512,194
|
|
|
|
|
|
|
|
|
|
|
|
Bruce R. Hazelgrove, III
Vice President-Corporate Resources
|
|
|
2010
2009
2008
|
|
|
$
|
295,000
275,600
265,600
|
|
|
$
|
300,000
275,000
190,000
|
|
|
$
|
49,943
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
83,397
88,956
49,622
|
|
|
$
|
14,750
13,780
13,280
|
|
|
$
|
743,090
653,336
518,502
|
|
(1)
|
The amounts in this column represent salaries before compensation reduction payments under the Savings Plan. The Savings Plan is a plan qualified under Section 401
of the Internal Revenue Code.
|
(2)
|
Represents the aggregate grant date fair value of the awards made as computed in accordance with FASB ASC Topic 718. These amounts do not correspond to the actual value
that may be recognized by each named executive officer. The assumptions used in determining the grant date fair values of the stock are set forth in Note 15 to our consolidated financial statements, included in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2010.
|
(3)
|
The amounts indicate the aggregate change in the actuarial present value of each of the named executive officers accrued benefit under the
Pension Plan and the Excess Benefit Plan, which collectively we refer to in this proxy statement as the pension retirement plans, from December 31, 2009, the measurement date used for financial statement reporting purposes with respect to our
audited financial statements for the fiscal year ended December 31, 2009, to December 31, 2010, the measurement date used for financial statement reporting purposes with respect to our audited financial statements for the fiscal year ended
December 31, 2010. For purposes of computing the actuarial present value of the accrued benefit payable to the named executive officers, we used the same assumptions used for financial reporting purposes under GAAP, including that (a) the
retirement age is the normal retirement age (age 65) under the pension retirement plans, (b) a 5.875% discount rate for the measurement period ended December 31, 2009 and a 5.875% discount rate for the measurement period ended
December 31, 2010, (c) the named executive officer will remain in our employ until he reaches the normal retirement age and (d) payments
|
21
|
will be made on a straight-life monthly annuity basis. For a description of the assumptions we used, see Note 19 to our consolidated financial statements and the discussion in
Managements Discussion and Analysis of Financial Condition and Results of Operations both of which are included in our annual report on Form 10-K for the fiscal year ended December 31, 2010 and incorporated by reference into
this proxy statement.
|
(4)
|
We credited the following amounts under each of the plans listed below to each named executive officer in 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Savings Plan
($)
|
|
|
Excess Benefit
Plan
($)
|
|
|
Total
($)
|
|
|
|
|
|
Thomas E. Gottwald
|
|
$
|
12,250
|
|
|
$
|
24,000
|
|
|
$
|
36,250
|
|
|
|
|
|
David A. Fiorenza
|
|
|
12,250
|
|
|
|
2,458
|
|
|
|
14,708
|
|
|
|
|
|
C. S. Warren Huang
|
|
|
12,250
|
|
|
|
17,750
|
|
|
|
30,000
|
|
|
|
|
|
Steven M. Edmonds
|
|
|
12,250
|
|
|
|
2,807
|
|
|
|
15,057
|
|
|
|
|
|
Bruce R. Hazelgrove, III
|
|
|
12,250
|
|
|
|
2,500
|
|
|
|
14,750
|
|
(5)
|
This amount includes a $60,000 special bonus granted to Mr. Huang in June 2008 by the Compensation Committee in consideration for the successful management of our
Afton Chemical Corporation subsidiary.
|
Grants of Plan-Based Awards
The following table sets forth information concerning individual grants of plan-based awards made during the year ended December 31,
2010 to the Name Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Grant Date
|
|
Approval Date
|
|
All Other Stock
Awards: Number of
Shares of Stock or
Units
(#)
|
|
|
Grant Date Fair
Value of Stock
Awards ($) (1)
|
|
|
|
|
|
|
Thomas E. Gottwald
|
|
11/15/2010
|
|
10/18/2010
|
|
|
824
|
|
|
$
|
99,885
|
|
|
|
|
|
|
David A. Fiorenza
|
|
11/15/2010
|
|
10/18/2010
|
|
|
412
|
|
|
|
49,943
|
|
|
|
|
|
|
C. S. Warren Huang
|
|
11/15/2010
|
|
10/18/2010
|
|
|
824
|
|
|
|
99,885
|
|
|
|
|
|
|
Steven M. Edmonds
|
|
11/15/2010
|
|
10/18/2010
|
|
|
412
|
|
|
|
49,943
|
|
|
|
|
|
|
Bruce R. Hazelgrove, III
|
|
11/15/2010
|
|
10/18/2010
|
|
|
412
|
|
|
|
49,943
|
|
(1)
|
The grant date fair value of the stock awards is computed in accordance with FASB ASC Topic 718.
|
Stock Awards
On October 18, 2010 the Compensation Committee of the
Board of Directors approved grants of stock awards to the companys named executive officers. The awards were granted on November 15, 2010 (the Grant Date) pursuant to the companys 2004 Incentive Compensation and Stock
Plan. The number of shares granted was determined by dividing the cash value of each executive officers award by the closing price of the stock on the Grant Date. Any fractional shares were disregarded. The company also retained and withheld
shares of stock from each award to satisfy minimum statutory tax obligations for each executive officer. The stock vested immediately on the Grant Date and may not be sold or otherwise transferred until November 15, 2011.
22
Outstanding Equity Awards at Fiscal Year-End
The following table presents information concerning the number and value of unexercised stock options for the named executive officers
outstanding as of the end of the fiscal year ended December 31, 2010. There were no other equity awards such as SARs or similar instruments, nonvested stock (including restricted stock, restricted stock units or other similar instruments) or
incentive plan awards for the named executive officers outstanding as of the end of the fiscal year ended December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
|
|
Equity
Incentive Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
|
|
Option
Exercise
Price ($)
|
|
|
Option Expiration
Date
|
|
|
|
|
|
|
|
Thomas E. Gottwald
|
|
|
15,000
|
(1)
|
|
|
0
|
|
|
|
0
|
|
|
$
|
4.35
|
|
|
|
September 28, 2011
|
|
|
|
|
|
|
|
David A. Fiorenza
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. S. Warren Huang
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Edmonds
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce R. Hazelgrove, III
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
(1)
|
We issued these options in 2001 under Ethyl Corporations 1982 Stock Option Plan. We provided stock-based compensation opportunities for executives and key
employees under the 1982 Stock Option Plan until March 2, 2004, when the plan terminated. No further options will be granted under the 1982 Stock Option Plan
|
Option Exercises and Stock Vested
The following table presents information
concerning the number and value of stock awards vested and stock options exercised by the named executive officers during the fiscal year ended December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option awards
|
|
|
Stock awards
|
|
Name
|
|
Number of shares
acquired on exercise
(#)
|
|
|
Value realized on
exercise
(1) ($)
|
|
|
Number of
shares acquired
on vesting (2) (#)
|
|
|
Value realized
on vesting (3)
|
|
|
|
|
|
|
Thomas E. Gottwald
|
|
|
15,000
|
|
|
$
|
1,725,450
|
|
|
|
824
|
|
|
$
|
99,885
|
|
|
|
|
|
|
David A. Fiorenza
|
|
|
|
|
|
|
|
|
|
|
412
|
|
|
|
49,942
|
|
|
|
|
|
|
C.S. Warren Huang
|
|
|
|
|
|
|
|
|
|
|
824
|
|
|
|
99,885
|
|
|
|
|
|
|
Steven M. Edmonds
|
|
|
|
|
|
|
|
|
|
|
412
|
|
|
|
49,942
|
|
|
|
|
|
|
Bruce R. Hazelgrove, III
|
|
|
|
|
|
|
|
|
|
|
412
|
|
|
|
49,942
|
|
(1)
|
The value realized is calculated by determining the difference between the market price of the underlying securities at exercise and the exercise price. The market
price is based on the last sales price of our common stock as reported by the NYSE.
|
(2)
|
On October 18, 2010 the Compensation Committee of the Board of Directors approved grants of stock awards to the companys named executive officers. The awards
were granted on November 15, 2010 (the Grant Date) pursuant to the companys 2004 Incentive Compensation and Stock Plan. The number of shares granted was determined by dividing the cash value of each executive officers
award by the closing price of the stock on the Grant Date. Any fractional shares were disregarded. The company also retained and withheld shares of stock from each award to satisfy minimum statutory tax obligations for each executive officer. The
stock vested immediately on the Grant Date and may not be sold or otherwise transferred until November 15, 2011.
|
23
(3)
|
The value realized is equal to the number of shares vested, multiplied by the closing market price of the companys common stock on the vesting date.
|
Pension Benefits
The following table presents information as of December 31, 2010 concerning each defined benefit plan of our company that provides for payments or other benefits to the named executive officers at,
following or in connection with retirement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Plan Name
|
|
Number of
Years Credited
Service
(#)
|
|
|
Present Value of
Accumulated Benefit
($)
|
|
|
Payments During
Last Fiscal Year
($)
|
|
|
|
|
|
|
Thomas E. Gottwald
|
|
Pension Plan
Excess Benefit
Plan (Pension Plan Component)
|
|
|
19
19
|
(1)
(1)
|
|
$
|
198,828
977,251
|
|
|
$
|
0
0
|
|
|
|
|
|
|
David A. Fiorenza
|
|
Pension Plan
Excess Benefit
Plan (Pension Plan Component)
|
|
|
37
37
|
|
|
|
554,298
656,030
|
|
|
$
|
0
0
|
|
|
|
|
|
|
C. S. Warren Huang
|
|
Pension Plan
Excess Benefit
Plan (Pension Plan Component)
|
|
|
31
31
|
|
|
|
486,254
1,831,888
|
|
|
$
|
0
0
|
|
|
|
|
|
|
Steven M. Edmonds
|
|
Pension Plan
Excess Benefit
Plan (Pension Plan Component)
|
|
|
8
8
|
|
|
|
209,307
140,372
|
|
|
$
|
0
0
|
|
|
|
|
|
|
Bruce R. Hazelgrove, III
|
|
Pension Plan
Excess Benefit
Plan (Pension Plan Component)
|
|
|
14
14
|
|
|
|
183,202
157,304
|
|
|
$
|
0
0
|
|
(1)
|
As of December 31, 2010, Mr. Thomas Gottwald had 24 years of service with our company and affiliate or predecessor employers, but only 19 years were
applicable as credits for service under the Pension Plan and Excess Benefit Plan. Mr. Thomas Gottwald could not apply his full 24 years of service with our company and affiliate or predecessor employers because he had not continuously worked
for our company and affiliate or predecessor employers for 24 years. For a period of time, he worked for an entity unrelated to our company and affiliate or predecessor employers.
|
For purposes of computing the actuarial present value of the accrued benefit payable to the named executive officers, we used the same
assumptions used for financial reporting purposes under GAAP, including that (a) the retirement age is the normal retirement age (age 65) under the pension retirement plans, (b) a 5.875% discount rate for the measurement period ended
December 31, 2010, (c) the named executive officer will remain in our employ until he reaches the normal retirement age and (d) payments will be made on a straight-life monthly annuity basis. For a description of the assumptions we
used, see Note 19 to our consolidated financial statements and the discussion in Managements Discussion and Analysis of Financial Condition and Results of Operations both of which are included in our annual report on Form 10-K for
the fiscal year ended December 31, 2010 and incorporated by reference into this proxy statement.
Pension Plan
We maintain the Pension Plan, which is a defined benefit plan that covers, generally, full-time salaried U.S.
employees of our company and participating subsidiaries who are not covered by a collective bargaining agreement. We have reserved the right to terminate or amend the Pension Plan at any time, subject to certain restrictions identified in the
Pension Plan.
The benefit formula under the Pension Plan is based on the participants final-average earnings, which are
defined as the average of the highest three consecutive calendar years earnings (base pay plus 50% of incentive bonuses paid in
24
any fiscal year) during the 10 consecutive calendar years immediately preceding the date of determination. The years of pension benefit service for each of our named executive officers as of
December 31, 2010, were: Thomas E. Gottwald, 19; David A. Fiorenza, 37; C. S. Warren Huang, 31; Steven M. Edmonds, 8; and Bruce R. Hazelgrove, III, 14. Benefits under the pension retirement plans are computed on the basis of a life annuity with
60 months guaranteed payments. The benefits are not subject to reduction for Social Security. On December 31, 2000, we terminated our tax-qualified defined benefit plan for our salaried employees in the United States, which for the purposes of
this discussion we refer to as the prior plan, and implemented the Pension Plan with an identical formula on January 1, 2001. For purposes of determining pension benefit service under the Pension Plan, participants receive credit for years of
pension benefit service earned under the prior plan; however, their benefits under the Pension Plan are offset by benefits that we paid to them under the prior plan.
Subject to certain limitations, a participant who reaches normal retirement age (65 years of age) receives an annuity for life payable monthly beginning on his normal retirement date (as defined in the
Pension Plan) at a monthly allowance equal to the difference between the following:
|
|
|
1.1% of his final average pay plus 1.5% of the excess of his final average pay over his covered compensation, multiplied by his number of years of
pension benefit service; and
|
|
|
|
the sum of (1) any annual benefit accrued or paid under any other qualified defined benefit plan sponsored or previously maintained by an
affiliate of our company or any predecessor employer, (2) any annual benefit accrued under a multi-employer defined benefit plan contributed to by an affiliate of our company on behalf of the participant and (3) the participants
December 31, 2000 accrued benefit under the prior plan, which we paid out when we terminated the prior plan.
|
Subject to certain limitations, a participant who retires before his normal retirement date and who has completed 10 years of vesting service and reached age 55 may receive a monthly annuity beginning on
his early retirement date (as defined in the Pension Plan).
The early retirement annuity is based on the participants
normal retirement benefit but is reduced actuarially to reflect commencement prior to age 65.
Excess Benefit Plan
The Internal Revenue Code limits the amount of pension benefits companies may pay under federal income tax qualified
plans. As a result, our Board of Directors adopted the Excess Benefit Plan, under which we will make additional payments so that a person affected by the Internal Revenue Code limitations will receive the same amount he otherwise would have received
under the Pension Plan and the Savings Plan but for the Internal Revenue Code limitations. We have reserved the right to terminate or amend the Excess Benefit Plan at any time.
We maintain the Excess Benefit Plan in the form of a nonqualified pension plan that provides eligible individuals the difference between
the benefits they actually accrue under our Pension Plan and Savings Plan and the benefits they would have accrued under those plans but for the maximum benefit and the limit on annual additions and the limitation on compensation that may be
recognized under the Internal Revenue Code. The Excess Benefit Plan is divided into two components, a component for excess contributions credited under the Savings Plan formula and a component for excess benefits accrued under the Pension Plan
formula. With respect to the Pension Plan component of the Excess Benefit Plan, which we refer to in this proxy statement as the Pension Plan component, the eligible individuals will accrue the amount that they would have accrued under the Pension
Plan but for the limitations recognized by the Internal Revenue Code. With respect to the Savings Plan component of the Excess Benefit Plan, which we refer to as the Savings Plan component, the eligible individuals will be credited with the matching
contributions that the company would have made to the Savings Plan but for the limitations recognized by the Internal Revenue Code. The Savings Plan component is hypothetically invested phantom shares of NewMarket common stock based on the fair
market value at the end of the month in which the amounts are credited. The amounts credited to the Savings Plan component reflect contributions that cannot be made to the Savings Plan because of Internal Revenue Code limitations or are phantom
dividends on shares of phantom stock already credited to the participants account.
25
Benefits accrued under the two components of the Excess Benefit Plan are distributed in the
following manner: (1) the Pension Plan component is paid in cash (A) with respect to benefits earned prior to January 1, 2005 at the same time and in the same form as benefits are paid to the eligible individuals under the Pension
Plan and (B) with respect to benefits earned after December 31, 2004, in an annuity form elected by the participant and (2) the Savings Plan component is paid in cash (a cash amount equal to the fair market value of NewMarket common
stock on the date of payment) in a lump sum following termination of employment. For those participants who are considered key employees under the Internal Revenue Code, generally they will not begin to receive payment on benefits they
earn under the Excess Benefit Plan after December 31, 2004 for six months following termination of their employment. The fair market value of NewMarket common stock was $114.77 on December 31, 2009 and $123.37 on December 31, 2010.
All benefits under the Excess Benefit Plan vest if the participant is terminated (other than for reasons of fraud and dishonesty) within three years of a change in control of our company (as defined in the Excess Benefit Plan).
Nonqualified Deferred Compensation
The following table presents information concerning the Savings Plan component of our Excess Benefit Plan, which provides for the deferral of compensation paid to or earned by the named executive officers
on a basis that is not tax qualified, and the benefit credited to Mr. Huang under the Original Additional Benefit Agreement (described below). For a discussion of our Excess Benefit Plan, see Pension BenefitsExcess Benefit
Plan on page 25.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
in Last
FY
($)
|
|
|
Registrant
Contributions in
Last FY
(1) ($)
|
|
|
Aggregate
Earnings in
Last
FY
($)
|
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
|
Aggregate
Balance at
Last
FYE
($)
|
|
|
|
|
|
|
|
Thomas E. Gottwald
|
|
$
|
0
|
|
|
$
|
24,000
|
|
|
$
|
130,992
|
|
|
$
|
0
|
|
|
$
|
1,514,733
|
|
|
|
|
|
|
|
David A. Fiorenza
|
|
|
0
|
|
|
|
2,458
|
|
|
|
17,560
|
|
|
|
0
|
|
|
|
219,046
|
|
|
|
|
|
|
|
C. S. Warren Huang
|
|
|
0
|
|
|
|
17,750
|
|
|
|
58,151
|
|
|
|
0
|
|
|
|
1,166,566
|
(2)
|
|
|
|
|
|
|
Steven M. Edmonds
|
|
|
0
|
|
|
|
2,807
|
|
|
|
5,940
|
|
|
|
0
|
|
|
|
47,556
|
|
|
|
|
|
|
|
Bruce R. Hazelgrove, III
|
|
|
0
|
|
|
|
2,500
|
|
|
|
3,332
|
|
|
|
0
|
|
|
|
14,347
|
|
(1)
|
For further discussion, see footnote 4 under the Summary Compensation Table on page 21.
|
(2)
|
For Mr. Huang, $600,000 of his Aggregate Balance is attributable to his Original Additional Benefit Agreement and $566,566 is attributable to his account under the
Savings Plan component of our Excess Benefit Plan.
|
26
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Additional Benefit Agreement with Mr. Huang
On May 1, 2006, we entered into the Original Additional Benefit Agreement with Mr. Huang. Pursuant to the terms of this agreement, commencing on January 1, 2006 and through
December 31, 2008, we credited monthly to Mr. Huang an amount equal to 1/12
th
of $200,000. One hundred percent of the amount credited to Mr. Huang became vested on December 31, 2008. Generally, Mr. Huang will not be eligible to receive this additional benefit, which
will be paid in cash, until six months after termination of his employment from our company or our affiliates. In the event that Mr. Huang is dismissed for cause (for fraud, dishonesty or the conviction of, or pleading guilty to, a felony, or
embezzlement from our company or an affiliate) or he engages, without the consent of our company, in prohibited conduct within 36 months following the termination of his employment for any reason from our company, he will forfeit his entire interest
in the agreement.
Except in the case of death or disability, Mr. Huang first becomes eligible to receive payments under
the Original Additional Benefit Agreement when his employment with our company ends but payments do not begin earlier than the first day of the month following the six-month anniversary of Mr. Huangs termination of employment.
Mr. Huang has elected to receive those payments in cash.
Assuming Mr. Huang had resigned from our company on
December 31, 2010, or if he had been dismissed on that date for reasons other than for cause, he would at that time have been 100% vested in his benefit and would have been entitled to a single, lump sum payment of $600,000.
Assuming Mr. Huang had died or had become disabled on December 31, 2010, he or his beneficiary would have been entitled to 100%
of the value of his benefit, or $600,000. We would have made this payment in a single, lump sum.
Assuming Mr. Huang dies
or becomes disabled after December 31, 2010, but prior to his termination of employment with our company, he or his beneficiary will be entitled to the vested percentage (100%) of the value of his benefit as of the date of death or
disability. We will pay that amount in a single, lump sum. If Mr. Huang dies after payments have begun but before the distribution of his entire interest in the account, his beneficiary will be entitled to the remaining balance of the account
in a single, lump sum payment.
2004 Incentive Plan
Subject to the terms of any agreements accompanying awards under the 2004 Incentive Plan, on or after the date of a change in control of our company (as defined in the 2004 Incentive Plan), any option
award granted to the executive and any SAR granted along with that option vests immediately, any stock award granted to the executive becomes immediately transferable and nonforfeitable and any incentive award granted to the executive is deemed
earned in its entirety.
The Compensation Committee, which administers the 2004 Incentive Plan, may prescribe at the time it
makes awards under the Plan in the agreements accompanying the awards other provisions related to vesting, transferability or forfeitability of awards in the case of death, disability, retirement or termination of the named executive officers.
Excess Benefit Plan
Termination Following a Change in Control
. In the event of a change in control of our company (as defined in the Excess Benefit Plan), if the executive is terminated within a three-year period
commencing on the change in control date, for reasons other than fraud, dishonesty, conviction of, or pleading guilty to, a felony or embezzlement from our company, he will be fully vested in all benefits he has accrued under the Excess Benefit Plan
as of the date his employment is terminated.
Upon termination, the executive will receive benefits under the Pension Plan
component of the Excess Benefit Plan (1) with respect to benefits earned prior to January 1, 2005, the date the executives benefits commence under the
27
Pension Plan with respect to the Pension Plan component or (2) with respect to benefits earned on and after January 1, 2005, on the later of separation from service or
participants early retirement date under the Pension Plan, the Savings Plan component is paid the first day of the month following the executives separation from service. Benefits under the Savings Plan component are paid in cash in a
single lump sum. Benefits under the Pension Plan component are paid in an annuity form. For those participants who are considered key employees under the Internal Revenue Code, generally they will not begin to receive payment on benefits
they earn under the Excess Benefit Plan after December 31, 2004 for six months following termination of their employment.
Retirement; Other Terminations; Disability; and Death.
If an executive retires, becomes disabled, dies or terminates employment
with our company due to reasons other than fraud, dishonesty, conviction of or pleading guilty to a felony or embezzlement, and any one of those events occurs at a time that would have caused his benefits under the terms of the Pension Plan or
Savings Plan to vest, the executive will be entitled to a benefit equal to the actuarial equivalent of the difference between the benefits that have accrued to the executive under the Pension Plan plus the employer-provided accrued benefit
(exclusive of earnings reduction contributions) under the Savings Plan and the benefits the executive would have accrued under the Pension Plan plus the company-provided accrued benefit (exclusive of earnings reduction contributions) under the
Savings Plan but for the application of Internal Revenue Code Sections 415 and 401(a)(17).
Upon the occurrence of any of the
events described above, the executive or his beneficiary will receive benefits under the Pension Plan component of the Excess Benefit Plan (1) with respect to benefits earned prior to January 1, 2005, the date the executives benefits
commence under the Pension Plan or (2) with respect to benefits earned on and after January 1, 2005, on the later of separation from service or participants early retirement date under the Pension Plan, the Savings Plan component is
paid the first day of the month following the executives separation from service. Benefits under the Savings Plan component are paid in cash in a single lump sum. Benefits under the Pension Plan component are paid in an annuity form. For those
participants who are considered key employees under the Internal Revenue Code, generally they will not begin to receive payment on benefits they earn under the Excess Benefit Plan after December 31, 2004 for six months following
termination of their employment.
The table included below provides information with respect to the present value of the
benefits we would have had to pay to the named executive officers or their beneficiaries under the provisions of the Excess Benefit Plan assuming any of the events described above had occurred on December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Retirement
|
|
|
Termination
|
|
|
Termination Due to a
Change in Control
|
|
|
Disability
|
|
|
Death (1)
|
|
|
|
|
|
|
|
Thomas E. Gottwald
|
|
$
|
0
|
(2)
|
|
$
|
977,251
|
|
|
$
|
977,251
|
|
|
$
|
977,251
|
|
|
$
|
454,910
|
|
|
|
|
|
|
|
David A. Fiorenza (3)
|
|
|
633,514
|
|
|
|
656,030
|
|
|
|
656,030
|
|
|
|
656,030
|
|
|
|
305,710
|
|
|
|
|
|
|
|
C. S. Warren Huang (3)
|
|
|
1,765,880
|
|
|
|
1,831,888
|
|
|
|
1,831,888
|
|
|
|
1,831,888
|
|
|
|
861,995
|
|
|
|
|
|
|
|
Steven M. Edmonds
|
|
|
0
|
(2)
|
|
|
140,372
|
|
|
|
140,372
|
|
|
|
140,372
|
|
|
|
66,389
|
|
|
|
|
|
|
|
Bruce R. Hazelgrove, III
|
|
|
0
|
(2)
|
|
|
157,304
|
|
|
|
157,304
|
|
|
|
157,304
|
|
|
|
73,571
|
|
(1)
|
The amounts to which the named executive officers surviving spouses or beneficiaries would have been entitled on December 31, 2010 are reduced because the
Excess Benefit Plan provides that if a participant dies while in the service of our company, his surviving spouse will receive payments in the form of a joint and survivor annuity at a rate reduced by 50%.
|
(2)
|
As of December 31, 2010, Messrs. Thomas Gottwald, Edmonds and Hazelgrove had not met the requirements that would make them eligible to receive an early retirement
payment. To be eligible for such a payment, an individual must attain the age of 55 and have been in our companys employ for 10 years.
|
(3)
|
The amounts presented for Messrs. Fiorenza and Huang are based on an immediate commencement of benefits as they were both eligible to retire on December 31, 2010.
|
28
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is composed of four independent directors and operates under a written charter adopted by
the Board of Directors. Management is responsible for NewMarkets financial reporting process, including the effectiveness of its internal control over financial reporting. The independent registered public accounting firm is responsible for
performing an independent audit of NewMarkets consolidated financial statements and the effectiveness of NewMarkets internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight
Board (United States) and for issuing reports thereon. The Audit Committees responsibility is, among other things, to monitor and oversee these processes and to report thereon to the Board of Directors. In this context, the Audit Committee has
met and held discussions with management and PricewaterhouseCoopers LLP, NewMarkets independent registered public accounting firm.
Management represented to the Audit Committee that NewMarkets consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has
reviewed and discussed the consolidated financial statements with management and PricewaterhouseCoopers LLP.
The Audit
Committee has discussed with PricewaterhouseCoopers LLP the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA,
Professional Standards
, Vol. 1. AU section 380), as adopted by the Public Company
Accounting Oversight Board in Rule 3200T.
The Audit Committee also has received the written disclosures and the letter from
PricewaterhouseCoopers LLP required by Public Company Accounting Oversight Board Rule 3526 (Communication with Audit Committees Concerning Independence), and has discussed with PricewaterhouseCoopers LLP that firms independence from NewMarket.
Based upon the Audit Committees discussions with management and PricewaterhouseCoopers LLP and the Audit
Committees review of the representation of management and the report of PricewaterhouseCoopers LLP to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in
NewMarkets Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission.
Audit Committee Pre-Approval Policy
The Audit Committee has adopted an Audit Committee Pre-Approval Policy for the pre-approval of audit services and permitted non-audit services by NewMarkets independent registered public accounting
firm in order to assure that the provision of such services does not impair the independent registered public accounting firms independence from NewMarket. Unless a type of service to be provided by the independent registered public accounting
firm has received general pre-approval, it will require specific pre-approval by the Audit Committee. Any proposed services exceeding pre-approved cost levels also will require specific pre-approval by the Audit Committee. In all pre-approval
instances, the Audit Committee will consider whether such services are consistent with the Securities and Exchange Commissions rules on auditor independence.
The Audit Committee has designated in the Audit Committee Pre-Approval Policy specific services that have the pre-approval of the Audit Committee and has classified these pre-approved services into one of
four categories: Audit, Audit-Related, Tax and All Other. The term of any pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee will revise the list of
pre-approved services from time to time, based on subsequent determinations.
Pre-approval fee levels for all services to be
provided by the independent registered public accounting firm will be established periodically by the Audit Committee. Any proposed services exceeding these levels will require specific pre-approval by the Audit Committee. The Audit Committee
recognizes the overall relationship of fees for audit and non-audit services in determining whether to pre-approve any such services. For each fiscal year, the Audit Committee may determine the appropriate ratio between the total amount of fees for
Audit, Audit-related, and Tax services, and the total amount of fees for services classified as permissible All Other services.
29
The Audit Committee has designated the Principal Financial Officer to monitor the
performance of the services provided by the independent registered public accounting firm and to determine whether such services are in compliance with the Audit Committee Pre-Approval Policy. Both the Principal Financial Officer and management will
immediately report to the Chairman of the Audit Committee any breach of the Audit Committee Pre-Approval Policy that comes to the attention of the Principal Financial Officer or any member of management.
|
THE AUDIT COMMITTEE
|
|
Charles B. Walker, Chairman
|
Phyllis L. Cothran
|
Mark M. Gambill
|
Patrick D. Hanley
|
February 17, 2011
30
PROPOSAL 2:
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING
FIRM
The Audit Committee has appointed PricewaterhouseCoopers LLP, an independent registered public accounting firm, as
our independent registered public accounting firm for the fiscal year ending December 31, 2011, subject to shareholder approval. A representative of PricewaterhouseCoopers LLP is expected to be present at the annual meeting with an opportunity
to make a statement and to be available to respond to appropriate questions.
PricewaterhouseCoopers LLPs principal
function is to audit managements assessment of the effectiveness of NewMarkets internal control over financial reporting and our consolidated financial statements and, in connection with that audit, to review certain related filings with
the Securities and Exchange Commission and to conduct limited reviews of the financial statements included in our quarterly reports.
The Audit Committee and our Board of Directors recommend that you vote FOR the proposal to ratify the appointment of PricewaterhouseCoopers LLP as NewMarkets independent registered
public accounting firm for the fiscal year ending December 31, 2011.
Fees Billed by PricewaterhouseCoopers LLP
The following table sets forth the fees billed to us for the audit and other services provided by PricewaterhouseCoopers LLP to us for the
fiscal years ended December 31, 2010 and 2009:
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
2009
|
|
|
|
|
Audit Fees
|
|
$
|
1,574,500
|
|
|
$
|
1,462,000
|
|
|
|
|
Audit-Related Fees
|
|
|
|
|
|
|
|
|
|
|
|
Tax Fees
|
|
|
1,029,400
|
|
|
|
434,000
|
|
|
|
|
All Other Fees
|
|
|
154,000
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fees
|
|
$
|
2,757,900
|
|
|
$
|
1,900,000
|
|
|
|
|
|
|
|
|
|
|
Audit Fees include fees for services performed to comply with the standards of the Public Company Accounting
Oversight Board (United States), including the recurring audit of our consolidated financial statements. This category also includes fees for audits provided in connection with statutory filings or services that generally only the principal auditor
reasonably can provide to a client, consents and assistance with and review of documents filed with the Securities and Exchange Commission.
Audit-Related Fees include fees associated with assurance and related services that are reasonably related to the performance of the audit or review of our financial statements.
Tax Fees primarily include fees associated with tax audits, tax compliance, tax consulting, as well as domestic and international tax
planning. During 2010, this included additional international tax work related to our acquisition of the Polartech companies.
All Other Fees include licensing fees associated with our use of PricewaterhouseCoopers LLPs on-line information database
containing accounting pronouncements and other authoritative guidance. All Other Fees for 2010 also included a charge of $150,000 for an information technology review.
As a part of its deliberations, the Audit Committee has considered whether the provision of services described above under All Other Fees is compatible with maintaining the independence of
PricewaterhouseCoopers LLP.
31
PROPOSAL 3:
ADVISORY VOTE ON EXECUTIVE COMPENSATION (SAY-ON-PAY)
The Dodd-Frank Wall
Street Reform and Consumer Protection Act requires us to seek a non-binding advisory vote from our shareholders to approve the compensation as disclosed in the Compensation Discussion & Analysis (CD&A), tabular disclosures
and narrative sections accompanying the tabular disclosures in this proxy statement. Since the required vote is advisory, the result of the vote is not binding upon the Board.
The Compensation Committee and the Board of Directors has created a compensation program designed to attract, motivate and retain the qualified executives that help ensure the companys future
success, to provide incentives for increasing profits by awarding executives when individual and corporate goals are achieved and to align the interests of executives and long-term shareholders.
The Board of Directors urges shareholders to read the CD&A beginning on page 13 of this proxy statement, which describes in more
detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, appearing on pages 21
through 28, which provide detailed information on the compensation of our named executive officers. The Board of Directors and the Compensation Committee believe that the policies and procedures articulated in the CD&A are effective in achieving
our goals and that the compensation of our named executive officers reported in this proxy statement reflects and supports these compensation policies and procedures.
In accordance with recently adopted Section 14A of the Exchange Act, and as a matter of good corporate governance, shareholders will be asked at the Annual Meeting to approve the following advisory
resolution:
RESOLVED, that the shareholders approve the compensation awarded by the company to the named executive
officers, as described in the CD&A, tabular disclosures, and other narrative executive compensation disclosures in the proxy statement for the 2011 Annual Meeting of Shareholders as required by the rules of the Securities and Exchange
Commission.
Effect of Proposal
The say-on-pay resolution is non-binding. The approval or disapproval of this proposal by shareholders will not require the Board or the Committee to take any action regarding the companys executive
compensation practices. The final decision on the compensation and benefits of our named executive officers and on whether, and if so, how, to address stockholder approval or disapproval remains with the Board of Directors and the Compensation
Committee.
The Board of Directors believes that the Compensation Committee is in the best position to consider the extensive
information and factors necessary to make independent, objective, and competitive compensation recommendations and decisions that are in the best interest of the company and its shareholders.
The Board of Directors values the opinions of the companys shareholders as expressed through their votes and other communications.
Although the resolution is non-binding, the Board of Directors will carefully consider the outcome of the advisory vote on executive compensation and those opinions when making future compensation decisions.
Our Board of Directors unanimously recommends that you vote FOR the non-binding resolution on executive compensation.
32
PROPOSAL 4:
ADVISORY VOTE ON THE FREQUENCY OF SAY-ON-PAY VOTES (SAY-ON-FREQUENCY)
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, at least once every six years we are required to submit for
shareholder vote a non-binding resolution to determine whether the advisory shareholder vote on executive compensation described in Proposal 3 above shall occur every one, two, or three years.
After careful consideration, the Board of Directors has determined that holding an annual advisory vote on executive compensation is the
most appropriate policy for the company at this time, and recommends that shareholders vote for future advisory votes on executive compensation to occur every ONE year. The Board of Directors believes an annual advisory vote is appropriate because
the Compensation Committee evaluates, adjusts and approves the compensation of our named executive officers on an annual basis. Additionally, an annual advisory vote promotes corporate transparency, and gives shareholders the opportunity to provide
frequent direct input on compensation matters.
The proxy card provides shareholders with four choices (every one, two, or
three years, or abstain). Shareholders are not voting to approve or disapprove the Boards recommendation.
Effect of Proposal
The frequency vote is non-binding. Shareholder approval of a one, two, or three-year frequency vote will not require the
company to implement an advisory vote on executive compensation every one, two, or three years. The final decision on the frequency of the advisory vote on executive compensation remains with the Board of Directors and/or its committees.
The Board values the opinions of the companys shareholders as expressed through their votes and other communications. Although the
resolution is non-binding, the Board and the Compensation Committee will carefully consider the outcome of the frequency vote and other communications from shareholders when making future decisions regarding the frequency of say-on-pay votes.
Our Board of Directors unanimously recommends that you vote for a frequency of ONE YEAR.
SHAREHOLDER PROPOSALS
Under the regulations of the Securities and Exchange Commission, any shareholder desiring to make a proposal to be acted upon at the 2012 annual meeting of shareholders must present such proposal to our
companys corporate secretary at our principal executive offices at 330 South Fourth Street, Richmond, Virginia 23219 not later than November 9, 2011, in order for the proposal to be considered for inclusion in our proxy statement. We will
consider such proposals in accordance with the Securities and Exchange Commissions rules governing the solicitation of proxies. We anticipate holding the 2012 annual meeting on April 26, 2012.
The NewMarket amended bylaws provide that a NewMarket shareholder entitled to vote for the election of directors may nominate persons for
election to our Board of Directors by delivering written notice to our companys corporate secretary. With respect to an election to be held at an annual meeting of shareholders, such notice generally must be delivered not later than the close
of business on the ninetieth day prior to the annual meeting and not earlier than the close of business on the one-hundred twentieth day prior to the first anniversary of the preceding years annual meeting. With respect to an election to be
held at a special meeting of shareholders, such notice must be delivered not earlier than the close of business on the one-hundred twentieth day prior to such special meeting, and not later than the close of business on the later of the ninetieth
day prior to such special meeting or the tenth day following the day on which public announcement is made of the date of the special meeting and of the nominees proposed by our Board of Directors to be elected at such special meeting.
The shareholders notice must include:
|
|
|
as to each person whom the shareholder proposes to nominate for election as a director:
|
33
|
|
|
all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest
or is otherwise required pursuant to Regulation 14A under the Exchange Act; and
|
|
|
|
such persons written consent to being named in the proxy statement as a nominee and to serving as such a director if elected; and
|
|
|
|
as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made:
|
|
|
|
the name and address of such shareholder, as they appear on our books, and of such beneficial owner;
|
|
|
|
the class and number of shares of our capital stock that are owned beneficially and of record by such shareholder and such beneficial owner;
|
|
|
|
a representation that the shareholder is a holder of record of our stock entitled to vote at such meeting and intends to appear in person or by proxy
at the meeting to propose such nomination; and
|
|
|
|
a representation whether the shareholder or the beneficial owner, if any, intends or is part of a group that intends (1) to deliver a proxy
statement and/or form of proxy to holders of at least the percentage of our outstanding capital stock required to elect the nominee and/or (2) otherwise to solicit proxies from shareholders in support of such nomination.
|
Because the 2012 annual meeting is to be held on April 26, 2012, our corporate secretary must receive
written notice of a shareholder proposal to be acted upon at the 2012 annual meeting not later than the close of business on January 27, 2012 nor earlier than December 23, 2011.
In order for a shareholder to bring other business before a shareholder meeting, timely notice must be received by us within the time
limits described in the immediately preceding paragraph. The shareholders notice must contain:
|
|
|
a brief description of the business desired to be brought before the meeting;
|
|
|
|
the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a
proposal to amend the NewMarket bylaws, the language of the proposed amendment);
|
|
|
|
the reasons for conducting such business at the meeting; and
|
|
|
|
any material interest in such business of such shareholder and for the beneficial owner, if any, on whose behalf the proposal is made; and
|
|
|
|
as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made, the information described above with
respect to the shareholder proposing such business.
|
The requirements found in the NewMarket amended bylaws
are separate from and in addition to the requirements of the Securities and Exchange Commission that a shareholder must meet to have a proposal included in our proxy statement.
We will furnish any shareholder desiring a copy of our amended bylaws without charge by writing to our corporate secretary as described
in Certain Matters Relating to Proxy Materials and Annual Reports Notice of Internet Availability of Proxy Materials.
34
CERTAIN MATTERS RELATING TO PROXY MATERIALS
AND ANNUAL REPORTS
Notice of Internet Availability of Proxy Materials
If you received a Notice by mail, you will not receive a paper copy of the proxy materials unless you request one. Instead, the Notice will instruct you as to how you may access and review the proxy
materials on the Internet. The Notice will also instruct you as to how you may access your proxy card to vote over the Internet. Alternatively, you may vote by telephone or order a paper copy of the proxy materials at no charge on or before
April 11, 2011 by following the instructions provided in the Notice.
Householding of Proxy Materials and Annual Reports
for Record Owners
The Securities and Exchange Commission rules permit us, with your consent, to deliver a single Notice to
any household at which two or more shareholders of record reside at the same address. This procedure, known as householding, reduces the volume of duplicate information you receive and helps to reduce our expenses. Shareholders of record
who reside at the same address and receive a single Notice may also request a separate copy of future proxy statements and annual reports by calling 1-800-625-5191 (toll-free).
We will provide without charge to each person to whom this proxy statement has been delivered, on the written request of any such
person, a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, including the financial statements. Requests should be directed to our corporate secretary as described above. A list of the exhibits to the Annual
Report on Form 10-K, showing the cost of each, will be delivered with a copy of the Annual Report on Form 10-K. Any of the exhibits listed will be provided upon payment of the charge noted on the list.
35
DIRECTIONS TO THE ANNUAL MEETING
Virginia Historical Society
422 N. Boulevard
Richmond, Virginia 23221
From Southside, Petersburg, Emporia (I-95)
Take I-95 North. Immediately after crossing the James River Bridge on I-95, take the first exit (74A) onto I-195 (Downtown Expressway). There is a $0.70 toll. Take the Boulevard exit. Proceed on
Idlewood Avenue until it intersects with the Boulevard. Turn right on the Boulevard. The Virginia Historical Society is on your left at the corner of Kensington Avenue and Boulevard. Free parking in the Virginia Historical Society lot behind the
building.
From Washington D.C. and Fredericksburg (I-95)
Take I-95 South/ I-64 East to Exit 78 (Boulevard). Turn right onto Boulevard (heading south). Proceed on Boulevard, crossing over Broad Street, Grace Street, Monument Avenue, and Patterson Avenue. Turn
right onto the next street (Kensington Avenue). The Virginia Historical Society is on your left at the corner of Kensington Avenue and Boulevard. Free parking in the Virginia Historical Society lot behind the building.
From Charlottesville, Waynesboro, and Staunton (I-64)
Take I-95/ I/64 East to Exit 78 (Boulevard). Turn right onto Boulevard (heading south). Proceed on Boulevard, crossing over Broad Street, Grace Street, Monument Avenue, and Patterson Avenue. Turn right
onto the next street (Kensington Avenue). The Virginia Historical Society is on your left at the corner of Kensington Avenue and Boulevard. Free parking in the Virginia Historical Society lot behind the building.
From Virginia Beach and Norfolk (I-64)
Take I-64 West. Take exit 78 (the Boulevard). Following signs for the Boulevard, turn left off exit ramp (proceed 0.1 miles). Turn right onto Robin Hood
Road and move to the left lane (proceed 0.1 miles). Turn left onto the Boulevard (proceed 1.2 miles). Turn right onto Kensington Avenue. The Virginia Historical Society is at the corner of Kensington Avenue and Boulevard. Free parking in the
Virginia Historical Society lot behind the building.
OTHER MATTERS
Our Board of Directors is not aware of any matters to be presented for action at the annual meeting other than as set forth in this proxy
statement. However, if any other matters properly come before the annual meeting, or any adjournment or postponement thereof, the person or persons voting the proxies will vote them in accordance with their discretion.
36
Annex A
NEWMARKET CORPORATION
Independence Determination Guidelines
For a director to be deemed independent, the Board of Directors of NewMarket Corporation (NewMarket) shall
affirmatively determine that the director has no material relationship with NewMarket either directly or as a partner, shareholder or officer of an organization that has a relationship with NewMarket. In making this determination, the Board of
Directors shall apply the following standards, in which case a director will be deemed not independent:
|
1.
|
A director is, or has been within the last three years, an employee of NewMarket, or an immediate family member is, or has been within the last three years, an
executive officer, of NewMarket. Employment as an interim Chairman, Chief Executive Officer or other executive officer will not disqualify a director from being considered independent following such employment.
|
|
2.
|
A director has received or has an immediate family member, serving as an executive officer, who has received, during any twelve-month period within the last three
years, more than $120,000 in direct compensation from NewMarket (excluding director and committee fees and pensions or other forms of deferred compensation for prior service, provided such compensation is not contingent in any way on continued
service). Compensation received by a director for former service as an interim Chairman, Chief Executive Officer or other executive officer will not count toward the $120,000 limitation.
|
|
3.
|
(A) A director or an immediate family member is a current partner of a firm that is NewMarkets internal or external auditor; (B) a director is a current
employee of such a firm; (C) a director has an immediate family member who is a current employee of such a firm and who personally participates in the audit of NewMarket; or (D) a director or an immediate family member was within the last
three years (but is no longer) a partner or employee of such a firm and personally worked on NewMarkets audit within that time.
|
|
4.
|
A director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of NewMarkets
present executive officers at the same time serves or served on that companys compensation committee.
|
|
5.
|
A director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from,
NewMarket for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other companys consolidated gross revenues.
|
A-1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic Voting
Instructions
|
|
|
|
|
|
You can vote by Internet or telephone!
|
|
|
|
|
|
Available 24 hours a day, 7 days a week!
|
|
|
|
|
|
Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your
proxy.
|
|
|
|
|
|
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE
BAR.
|
|
|
|
|
|
Proxies submitted by the Internet or telephone must
be received by
11:59 p.m., Eastern Time, on April 20, 2011.
|
|
|
|
|
|
|
|
Vote by Internet
|
|
|
|
|
|
|
Log on to the Internet and go to
www.
envisionreports.com/NEU
|
|
|
|
|
|
|
Follow the steps outlined on the secured website.
|
|
|
|
|
|
|
|
Vote by telephone
|
|
|
|
|
|
|
Call toll free 1-800-652-VOTE (8683) within the USA,
US territories & Canada any time on a touch tone
telephone. There is
NO CHARGE
to you for the
call.
|
|
|
Using a
black ink
pen, mark your votes with an
X
as shown in this example. Please do not write outside the designated areas.
|
|
x
|
|
|
|
|
Follow the instructions provided by the recorded message.
|
|
q
IF YOU HAVE NOT VOTED VIA THE INTERNET
OR
TELEPHONE,
FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
|
|
|
|
A
|
|
Proposals The Board of Directors recommends a vote
FOR
all the nominees in Proposal 1,
FOR
Proposal 2 and
|
Proposal 3, and for
ONE YEAR
for Proposal 4.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
+
|
1. Election of Directors:
|
|
For
|
|
Withhold
|
|
|
|
For
|
|
Withhold
|
|
|
|
For
|
|
Withhold
|
|
|
|
01 - Phyllis L. Cothran
|
|
¨
|
|
¨
|
|
02 - Mark M. Gambill
|
|
¨
|
|
¨
|
|
03 - Bruce C. Gottwald
|
|
¨
|
|
¨
|
|
|
|
04 - Thomas E. Gottwald
|
|
¨
|
|
¨
|
|
05 - Patrick D. Hanley
|
|
¨
|
|
¨
|
|
06 - James E. Rogers
|
|
¨
|
|
¨
|
|
|
|
07 - Charles B. Walker
|
|
¨
|
|
¨
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
|
|
|
|
|
|
2. Ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting
firm for the Corporation for the fiscal year ending December 31, 2011.
|
|
|
|
¨
|
|
¨
|
|
¨
|
|
3. Approval, on an advisory basis, of the compensation of the named executive officers of NewMarket
Corporation.
|
|
¨
|
|
¨
|
|
¨
|
|
|
1 Yr
|
|
2 Yrs
|
|
3 Yrs
|
|
Abstain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Approval, on an advisory basis, of the frequency of holding an advisory vote on executive
compensation.
|
|
¨
|
|
¨
|
|
¨
|
|
¨
|
|
5. In their discretion, the Proxyholders are authorized to vote upon such other business and matters as may
properly come before the Annual Meeting.
|
|
|
|
|
|
|
Change of Address
Please print new address below.
|
|
|
C
|
|
Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below
|
Please sign name exactly as it appears on the stock certificate. Only one of several joint owners or co-owners need sign.
|
|
|
|
|
Date (mm/dd/yyyy) Please print date below.
|
|
Signature 1 Please keep signature within the box.
|
|
Signature 2 Please keep signature within the box.
|
|
|
|
|
|
|
|
¢
|
|
|
|
|
|
+
|
01AFSC
q
IF YOU HAVE NOT VOTED VIA THE INTERNET
OR
TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE
ENCLOSED ENVELOPE.
q
Proxy NewMarket Corporation
Richmond, Virginia
This Proxy is Solicited on behalf of the Board of Directors for the Annual Meeting
of Shareholders to be held on April 21, 2011
The undersigned hereby appoints Bruce
C. Gottwald and James E. Rogers, or either of them, with full power of substitution in each, proxies to vote all shares of the undersigned in NewMarket Corporation, at the annual meeting of shareholders to be held April 21, 2011, and at any and
all adjournments or postponements thereof (the Annual Meeting):
This Proxy when properly executed will be voted as specified.
If no specification is made, this Proxy will be voted FOR all nominees listed in Proposal 1, FOR Proposal 2 and Proposal 3, for ONE YEAR for Proposal 4, and according to the discretion of the proxy holders on any other matters that may properly come
before the Annual Meeting.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(Items to be voted appear on reverse side.)
NewMarket (NYSE:NEU)
過去 株価チャート
から 6 2024 まで 7 2024
NewMarket (NYSE:NEU)
過去 株価チャート
から 7 2023 まで 7 2024