10-K 1 c60953e10-k.txt ANNUAL REPORT 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 Commission file number 1-6450 GREAT LAKES CHEMICAL CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 95-1765035 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 500 East 96th Street, Suite 500 Indianapolis, IN 46240 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 317-715-3000 Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on Title of each class which registered ------------------- ------------------------ Common stock, $1.00 par value New York Stock Exchange Common Stock Purchase Rights Pacific Stock Exchange
Securities registered pursuant to Section 12 (g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to the filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] As of March 5, 2001, the aggregate market value of the voting stock held by non-affiliates of the registrant was $1,688,229,564. As of March 5, 2001, 50,274,853 shares of the registrant's stock were outstanding. DOCUMENTS INCORPORATED BY REFERENCE
Documents Incorporated by Reference Form 10-K Reference ----------------------------------- ------------------- Portions of the 2000 Annual Report to Part I, Item 1; Part II; and Stockholders Part IV, Items 14(a)(1) and (2). Portions of Proxy Statement for 2001 Part III. Annual Meeting of Stockholders
2 PART I Item 1. BUSINESS GENERAL Great Lakes Chemical Corporation is a Delaware corporation incorporated in 1933 having its principal executive offices at 500 East 96th Street, Suite 500, Indianapolis, Indiana 46240. As used in this report, except where otherwise stated or indicated by the context, "Great Lakes" or "the Company" means Great Lakes Chemical Corporation and its consolidated subsidiaries. Great Lakes is a customer-focused supplier of innovative specialty chemical solutions. The Company serves customers and markets through a global network of integrated sales, production, research, technical service and distribution facilities. The Company is organized into four global business units: POLYMER ADDITIVES - The Polymer Additives business unit is a leading developer, producer and marketer of bromine-, phosphorus-, and antimony-based flame retardants and value-added antioxidants; UV light stabilizers; performance additives and fluids; and optical monomers. This business unit integrates these compounds into customer solutions that resist ignition and ensure the stability of products during processing or while in use. PERFORMANCE CHEMICALS - The Performance Chemicals business unit is a collection of individual businesses that apply their expertise in complex chemical synthesis, process development, manufacturing and toxicological testing to meet highly specific requirements for pharmaceutical, agrochemical and a wide range of industrial chemical applications. WATER TREATMENT - The Water Treatment business unit is the world's premier formulator of water treatment biocides and related specialty chemicals that make water better. This business unit extends innovative recreational water treatment products across the value chain to mass merchants, wholesale distributors, specialty store owners and retail customers. Its bromine-based biocides and proprietary polymer-based antiscalants and corrosion inhibitors target industrial customers in the global cooling process, wastewater, paper and desalination industries. ENERGY SERVICES AND PRODUCTS (OSCA) - OSCA provides specialized oil and gas well completion fluids, completion services and downhole completion tools to major oil companies and independent exploration and production companies, primarily in the Gulf of Mexico and in select international markets. Effective June 15, 2000, OSCA completed an initial public offering of its Class A common stock. Great Lakes sold approximately 40% of its ownership in OSCA's outstanding common stock. Great Lakes retained approximately 94% of the combined voting power of OSCA's outstanding voting stock through its ownership of all of the outstanding Class B shares, which have disproportionate voting rights.
Incorporated by Reference From: a) General Development of Business 2000 Annual Report to Stockholders, pages 12-13 and 28; Management's Discussion and Analysis on pages 19-27; and Notes 2, 3 and 4 to consolidated financial statements on pages 34-38. b) Financial Information about 2000 Annual Report to Stockholders pages Industry Segments 14-17 and pages 42-43.
3 c) Narrative Description of Business 2000 Annual Report to Stockholders, pages 14-17 and pages 19-27.
PRODUCTS AND SERVICES The following is a list of the principal products and services, markets and production facilities of the Company: POLYMER ADDITIVES
PRODUCTS & SERVICES PRINCIPAL MARKETS PRODUCTION FACILITIES ------------------- ----------------- --------------------- FLAME RETARDANTS Bromine-, phosphorus- Computer and Business Equipment, El Dorado, AR; Newport, TN; and antimony-based flame Consumer Electronics, Textiles, Nitro, WV; Reynosa, Mexico; retardants Automotive and Construction Aycliffe, UK; Trafford Park, UK POLYMER STABILIZERS Antioxidants, UV absorbers, Computer and Business Equipment, Newport, TN; Catenoy, France; light stabilizers and Appliances, Packaging, Textiles, Persan, France; Waldkraiburg, optical monomers Construction, Automotive and Germany; Pedrengo, Italy; Optical Lenses Ravenna, Italy; Pyongtaek, Korea
PERFORMANCE CHEMICALS
PRODUCTS & SERVICES PRINCIPAL MARKETS PRODUCTION FACILITIES ------------------- ----------------- --------------------- AGRICULTURAL PRODUCTS Methyl bromide Soil Crop and Structural Pest El Dorado, AR Control BROMINE INTERMEDIATES Bromine, bromine derivatives Electronics; Photographic Papers El Dorado, AR; Amlwch, UK and bromine-based specialty and Films; and Rubber Compounds chemicals FLUORINE CHEMISTRY Fire extinguishing agent Telecommunications, Information El Dorado, AR FM-200(R), Organo-fluorine Technology, Electronics and compounds, fluorinated Chemical Industries intermediates FINE CHEMICALS Specialty and fine chemical Pharmaceutical and Agrochemical Newport, TN; Konstanz, Germany; intermediates Industry Halebank, UK; Holywell, UK
4 PERFORMANCE CHEMICALS (CONTINUED)
PRODUCTS & SERVICES PRINCIPAL MARKETS PRODUCTION FACILITIES ------------------- ----------------- --------------------- TOXICOLOGICAL SERVICES All phases of nonclinical Pharmaceutical, Chemical and Ashland, OH toxicological testing and Biotechnology Industries bioanalytical services; Design of specialized toxicological, metabolic and analytical chemistry programs
WATER TREATMENT
PRODUCTS & SERVICES PRINCIPAL MARKETS PRODUCTION FACILITIES ------------------- ----------------- --------------------- RECREATIONAL Water sanitizers - Pool and Spa Dealers and Conyers, GA; Lake Charles, LA; BioGuard(R), OMNI(R), Distributors, Mass Market Adrian, MI; Melbourne, Australia; Guardex(R), Pool Time(R), Retailers, Pool Service and Toronto, Canada; Mundolsheim, France; Vantage(R), AquaBrom(R), Construction Companies Barbera Del Valles, Spain; Kyalami, Bayrol(R), Hydrotech(R), South Africa; Andoversford, UK AquaClear(R), Sun(R), Algicides, oxidizers, PH balancers, mineral balancers and specialty chemicals COMMERCIAL & SPECIALTIES Antiscalants, biocides, Industrial Cooling Water Adrian, MI; El Dorado, AR; corrosion inhibitors, Treatment, Industrial and Conyers, GA; Trafford Park, UK dispersants, antifoams, Municipal Wastewater Treatment, hydantoin derivatives, Municipal Desalination, Pulp and formulated oxidizers Paper Manufacturing, Food and biocide dispensing Preservative Intermediates and equipment Processing, Home Care
ENERGY SERVICES AND PRODUCTS
PRODUCTS & SERVICES PRINCIPAL MARKETS PRODUCTION FACILITIES ------------------- ----------------- --------------------- Completion products and Worldwide Oil and Gas Industry Geismer, LA; Mansfield, TX services, including reservoir analysis, solids-free fluids, sand control, filtration, downhole tools, stimulation and marine well services
5 RAW MATERIALS The sources of essential raw materials for bromine are the brine from Company-owned wells in Arkansas and a sea water extraction plant in Europe. The Arkansas properties are located atop the Smackover lime deposits, which constitute a vast underground sea of bromine-rich brine. The area between El Dorado and Magnolia, Arkansas, (located about 35 miles west of El Dorado) provides the best known geological location for bromine production in the United States and both major domestic bromine manufacturers are located there. Based on projected production rates, the Company's brine reserves are estimated to be adequate for the foreseeable future. Other raw materials used in the business are obtained from outside suppliers through purchase agreements. The cost of raw materials is generally based on market prices, although risk management tools may be utilized, as appropriate, to mitigate short-term market price fluctuations. Other raw materials purchased include chlorine, caustic, hexafluoropropene, phenol bisphenol A and antimony oxide. The Company has multiple suppliers for most key raw materials and uses quality raw materials management principles, such as the establishment of long-term relationships with suppliers and ongoing performance assessment and benchmarking, as part of the total supplier selection process. In addition, the Company uses electricity and natural gas to meet its energy needs. INTERNATIONAL OPERATIONS Great Lakes has a significant presence in foreign markets, principally Western Europe and Asia. Approximately one-third of the Company's assets and sales are outside the United States. The geographic segment data contained in Note 15: "Segment Information" of the Notes to Consolidated Financial Statements on page 42 and 43 of the 2000 Annual Report to Stockholders is incorporated herein by reference. CUSTOMERS AND DISTRIBUTION During the last three years, no single customer accounted for more than 10% of Great Lakes' total consolidated sales. The Company has no material contracts or subcontracts with government agencies. A major portion of the Company's sales are sold to industrial or commercial users for use in the production of other products. Some products, such as recreational water treatment chemicals and supplies, are sold to a large number of retail pool stores, mass merchandisers and distributors. Some export sales are marketed through distributors and brokers. The Company's business does not normally reflect any material backlog of orders at year-end. COMPETITION Great Lakes is in competition with businesses producing the same or similar products as well as businesses producing products intended for similar use. There is one other major bromine producer in the United States which competes with the Company in varying degrees, depending on the product involved, with respect to the sale of bromine and bromine derivatives. There is also one major overseas manufacturer of bromine and brominated products which competes with the Company in the United States and elsewhere. There are several small producers in the United States and overseas which are competitors in several individual products. In addition, there are numerous manufacturers of alternatives to Great Lakes' products that compete with the Company's products. In Polymer Stabilizers, the Company competes with a significantly larger supplier across this entire product line and with a number of smaller companies in individual product areas. The Company competes with several manufacturers and distributors of swimming pool and spa chemicals. Principal methods of competition are price, product quality and purity, technical services and the ability to deliver promptly. The Company is able to move quickly in providing new products to meet identified 6 market demands, and believes its production costs are among the lowest in the world. Management believes these factors, combined with high technical skills, allow the Company to compete effectively. SEASONALITY AND WORKING CAPITAL The products which the Company sells to the agricultural and swimming pool industries exhibit some seasonality which is reflected in relatively higher sales and profits in the first half of each year. Seasonality results in the need to build inventories for rapid delivery at certain times of the year. The pool product season is strongest during the first six months, requiring a build-up of inventory at the beginning of the year. Except for certain arrangements with distributors and dealers of swimming pool and spa products, customers are not permitted to return unsold material at the end of a season. Extended credit terms are granted only in cases where the Company chooses to do so to meet competition. The effect of the above items on working capital requirements is not material. RESEARCH AND DEVELOPMENT AND PATENTS The Company holds various patents and trademarks covering a number of its products and processes. While the Company believes these patents and trademarks offer significant commercial benefits, the Company's management does not believe any individual patent or trademark is of material importance to the Company's business as a whole or that the success of the Company's business is dependent upon its portfolio of patents and trademarks. Research and development expenditures are described in Note 14, "Research and Development Expenses" of the Notes to Consolidated Financial Statements on page 42 of the 2000 Annual Report to Stockholders, which is incorporated herein by reference. ENVIRONMENTAL The Company's operations are subject to various laws and regulations relating to maintaining or protecting the quality of the environment. Information regarding environmental compliance and contingencies is set forth under the "Environmental" caption in "Management's Discussion and Analysis of Financial Condition and Results of Operations on pages 26 and 27 of the 2000 Annual Report to Stockholders, and in Note 18 Commitments and Contingencies on page 44 of the 2000 Annual Report to Stockholders, which is incorporated herein by reference. EMPLOYEES The Company currently employs approximately 5,148 people, 40% of which are employed outside the United States. Approximately 370 employees in the United States are represented by collective bargaining agreements. In 2002, two of the Company's four collective bargaining agreements will expire, covering approximately 200 employees. The Company maintains good employee relations and has successfully concluded its most recent labor negotiations without a work stoppage. The Company, however, cannot predict the outcome of future contract negotiations. BUSINESS RISKS Great Lakes Chemical Corporation is including the following cautionary statement in this Annual Report on Form 10-K to make applicable and take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 with respect to any forward-looking statement made by, or on behalf of, the Company. Forward-looking statements generally may be identified by words such as "believes," "expects," "intends," "may," "will likely result," "estimates," "anticipates," "should," and other similar expressions, or the negative of such words or expressions. The factors identified in this cautionary statement are important factors (but do not necessarily constitute all important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company. 7 Where any such forward-looking statement includes a statement of the assumptions or bases underlying such forward-looking statement, the Company cautions that, while it believes such assumptions or bases to be reasonable and makes them in good faith, assumed facts or bases almost always vary from actual results, and the differences between assumed facts or bases and actual results can be material, depending upon the circumstances. Where, in any forward-looking statement, the Company, or its management, expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished. Taking into account the foregoing, certain factors, including but not limited to, those listed below may cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company. - Economic factors over which the Company has no control, including changes in inflation, tax rates, interest rates and foreign currency exchange rates. - Competitive factors such as pricing pressures on key products and the cost and availability of key raw materials. - Governmental factors including laws and regulations and judicial decisions related to the production or use of key products such as bromine and bromine derivatives. - The difficulties and uncertainties inherent in new product development. New product candidates that appear promising in development may fail to reach the market because of safety concerns, inability to obtain necessary regulatory approvals, difficulty or excessive costs to manufacture, or infringements of the patents or intellectual property rights of others. - Legal factors, including unanticipated litigation of product liability claims, antitrust litigation, environmental matters or patent disputes with competitors, which could preclude commercialization of products or negatively affect the profitability of existing products. - Inability to obtain existing levels of product liability insurance or denial of insurance coverage following a major product liability claim. - Changes in tax laws, including future changes in tax laws related to the remittance of foreign earnings or investments in foreign countries with favorable tax rates. - Changes in accounting standards promulgated by the Financial Accounting Standards Board; the Securities and Exchange Commission; or the American Institute of Certified Public Accountants, which are adverse to the Company. - Internal factors such as changes in business strategies and the impact of cost control efforts and business combinations. - Loss of brine leases or inability to produce the bromide ion in required quantities due to depletion of resources or other causes beyond the Company's control. Item 2. PROPERTIES The Company leases its principal executive offices in Indianapolis, Indiana, and owns its principal corporate facility in West Lafayette, Indiana. The Company operates 28 production facilities in 12 countries. The Company has distribution facilities at all of its plant sites. Listed under "Item 1. Business" above in the table captioned "Products and Services" are the production facilities by business unit. The Company's principal research facilities are in Mt. Prospect, IL; West Lafayette, IN; Decatur, GA; Lafayette, LA; and Trafford Park, UK. Most principal locations are owned. 8 In addition, the Company owns or leases warehouses, distribution centers and space for administrative and sales offices throughout the world. All of the Company's facilities are in good repair; suitable for the Company's businesses; and have sufficient capacity to meet present market demands at an efficient operating level. Item 3. LEGAL PROCEEDINGS The Company has been cooperating with the United States Department of Justice (DOJ) and the European Commission since the spring of 1998 in their respective investigations of the bromine and brominated products industry. Both investigations were initiated after the Company self-reported to those agencies certain business practices that raised questions under antitrust laws. As a result of the Company's cooperation, the Company and its current directors and employees have been accepted into the DOJ's amnesty program. As a result, the Company will be exempt from United States federal criminal prosecution and fines relating to the practices in question if the Company complies with certain conditions, including its full cooperation with the DOJ's investigation and policy regarding reasonable remedial efforts. Concurrently, the Company is seeking favorable treatment under a program in the European Union that also rewards self-reporting and cooperation. The Company believes it has fully complied with all applicable conditions to date and has continued to cooperate with the DOJ in connection with certain follow-up matters arising out of the investigation, all of which are covered by the Company's acceptance into the amnesty program. The Company intends to continue full compliance with the DOJ and European Union programs. Participation in the above programs does not provide the Company with immunity from civil liability, including restitution claims. To date, 10 federal purported class action lawsuits and five California purported class actions have been filed against the Company, each claiming treble damages. These suits claim, among other things, that the Company conspired with others in violation of antitrust laws regarding the pricing of bromine and brominated products. The federal lawsuits have been consolidated in the District Court for the Southern District of Indiana. The plaintiffs have filed a motion to certify a class of purchasers of three particular brominated products, and the Company has opposed the motion. A ruling on the class certification is expected later this year. The California cases have been stayed pending resolution of the federal cases. West Lafayette Corporation, a wholly-owned subsidiary of the Company, is a defendant in a judicial proceeding filed on August 30, 2000, by the State of Illinois in the Circuit Court of Illinois. The State is seeking penalties based on alleged failure to maintain air emission permits required by the State of Illinois and Federal law. The Company is currently investigating the issue and has neither agreed to nor denied the allegations. However, it is the opinion of the Company's management that the liability if any, associated with such allegations, will not have a material adverse effect on the Company. There are also various other lawsuits and claims, other than those mentioned above, pending against the Company and certain of its consolidated subsidiaries. While it is not possible to predict or determine the outcome of legal actions brought against the Company or the ultimate cost of these actions, the Company believes the costs associated with all such actions in the aggregate will not have a material adverse effect on its consolidated financial position, liquidity or results of operations. Furthermore, no director, officer or affiliate of the Company, or any associate of any director or officer is involved, or has a material interest in, any proceeding which would have a material adverse effect on the Company. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the quarter ended December 31, 2000. PART II Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS As of March 5, 2001, there were approximately 2,501 stockholders of record of the Company's Common Stock. Additional information regarding the recent price and dividend history of the Company's Common Stock is set forth under the captions "Stock Price Data" and "Cash Dividends Paid Per Share" on page 45 of the 2000 Annual Report to Stockholders. This information is incorporated herein by reference. Item 6. SELECTED FINANCIAL DATA The selected financial data for the Company for each of the last five years is set forth under the caption "Financial Review" on page 18 of the 2000 Annual Report to Stockholders and is incorporated herein by reference. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information set forth under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 19 through 27 of the 2000 Annual Report to Stockholders is incorporated herein by reference. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk information is set forth under the "Market Risks" caption of "Management's Discussion and Analysis of Financial Condition and Results of Operations" on page 26 of the 2000 Annual Report to Stockholders, which is incorporated herein by reference. 9 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The consolidated financial statements of the Company and its subsidiaries, listed in Item 14(a)(1) and included in the Company's 2000 Annual Report to Stockholders on pages 29-32 (Consolidated Statements of Income, Consolidated Balance Sheets, Consolidated Statements of Cash Flows and Consolidated Statements of Stockholders' Equity), and pages 33-44 (Notes to Consolidated Financial Statements) and the Report of Independent Auditors set forth in the Company's 2000 Annual Report to Stockholders on page 28, are incorporated herein by reference. Information on quarterly results of operations, set forth in the Company's 2000 Annual Report to Stockholders under "Quarterly Results of Operations" (unaudited), at page 45, is incorporated herein by reference. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information regarding directors of the Company is contained under the headings "Proposal One: Election of Directors" in the Proxy Statement for the Company's Annual Meeting of Stockholders to be held on May 3, 2001, which is to be filed with the Securities and Exchange Commission pursuant to Regulation 14A of the Securities Exchange Act of 1934. This information is incorporated herein by reference. The executive officers of the Company are as follows:
Officer Name and Age Office Since ------------ ------ ----- Mark P. Bulriss, 49 Chairman, President and CEO. Mr. Bulriss was 1998 named president and chief executive officer of the Company on April 1, 1998, and became chairman on May 4, 2000. He also serves as chairman of OSCA, Inc. Prior to joining Great Lakes Chemical Corporation, Mr. Bulriss served as president of AlliedSignal Polymers, a $2.1 billion business unit of AlliedSignal Inc. that manufactures polymers and markets nylon, technical fibers, plastics, film and chemical intermediates. Before being named president of its polymers unit, Mr. Bulriss served as president of AlliedSignal Inc.'s electronic materials business. His 24-year career in chemicals and plastics also includes 16 years with GE Plastics, a division of the General Electric Corporation. Mr. Bulriss currently serves as a director of the American Chemistry Council. Mr. Bulriss received a B.S. degree in Chemical Engineering from Clarkson University. Larry J. Bloom, 52 Executive Vice President and President of Water 2000 Treatment. Mr. Bloom assumed the position of Executive Vice President of the Company in 2000. Mr. Bloom joined Great Lakes in 1990 as a result of the acquisition by Great
10 Lakes of BioLab, Inc., where he has served as President since 1987. From 1970 to 1987, he held various sales, marketing and technical positions with BioLab, Inc. Mr. Bloom is a graduate of Georgia Institute of Technology, receiving a B.S. degree in Chemical Engineering. Louis M. Maresca, 49 Executive Vice President and President of 1998 Performance Chemicals. Dr. Maresca joined the Company in August 1998. From 1991 to 1998 he was with The Geon Company where he served as vice president and general manager of the resins business. Prior to 1991 he held technology and general management positions with Union Carbide Corporation and GE Plastics. Dr. Maresca holds a Ph. D. in organic chemistry from Columbia University and an M.B.A. from Case Western Reserve University. Richard T. Higgons, 58 Senior Vice President, Business Development. Mr. 2001 Higgons joined the Company in 2001. Prior to joining Great Lakes, Mr. Higgons was staff vice president for corporate development with Mallinckrodt,Inc., a position he held for five years. From 1991 to 1995, he was vice president for business development for Mallinckrodt's chemical business. From 1988 to 1991, Mr. Higgons held several senior management positions in finance, business development and strategic planning for Imcera Group, Inc. Mr. Higgons holds a B.S. degree in Accounting from Indiana Northern University. Richard J. Kinsley, 43 Senior Vice President, Human Resources & 1999 Communications. Mr. Kinsley joined the Company in April 1999 from AlliedSignal where he was vice president, human resources for the electronic materials division. Prior to his four years with AlliedSignal, Mr. Kinsley spent 10 years with The Pfaudler Companies where he held senior management positions in sales and marketing, business development and human resources. Mr. Kinsley holds dual B.S. degrees in Economics and Business Administration from LeMoyne College and an M.B.A. from the University of Rochester. Jeffrey M. Lipshaw, 46 Senior Vice President, General Counsel & 1999 Secretary. Mr. Lipshaw joined the Company in October 1999 from Dykema Gossett PLLC, a Detroit-based law firm, where he was Of Counsel from February 1998, and previously an associate and partner in the firm from 1979 until 1992. From 1993 through 1997, Mr. Lipshaw was vice president & general counsel of AlliedSignal Automotive in Southfield, Michigan. Mr. Lipshaw holds an A.B. from the University of Michigan and a J.D. from Stanford University. Angelo C. Brisimitzakis, 42 Vice President, Global Supply Chain Management 2000 and Vice President, Flame Retardants. Dr. Brisimitzakis joined the Company in 1998 as Vice President, Global Supply Chain, following 14 years at General Electric Corporation, where he held leadership positions in sales, technology, business development, supply chain, and business management
11 functions. He was named an officer in 2000 and he was named Vice President for Flame Retardants in 2001. He earned a Ph.D. in Chemistry from New York University and an M.B.A. in Marketing from NYU/Pace University. Kevin J. Mulcrone, 49 Vice President and Controller. Mr. Mulcrone 1999 joined the Company in 1991 as director of audit. In 1993, he transferred to BioLab, Inc., a Great Lakes subsidiary, as vice president, finance. In September 1999, Mr. Mulcrone assumed his present position. He is a Certified Public Accountant and holds a B.S. in Accountancy from the University of Illinois (Urbana) and an M.B.A. from Emory University.
Item 11. EXECUTIVE COMPENSATION This information is set forth under the heading "Executive Compensation and Other Information" in the Company's Proxy Statement for the Company's Annual Meeting of Stockholders to be held on May 3, 2001, and is incorporated herein by reference. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT This information is set forth under the heading "Security Ownership of Certain Beneficial Owners and Management" in the Company's Proxy Statement for the Company's Annual Meeting of Stockholders to be held on May 3, 2001, and is incorporated herein by reference. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS This information is set forth under the heading "Compensation Committee Interlocks and Insider Participation" in the Company's Proxy Statement for the Company's Annual Meeting of Stockholders to be held on May 3, 2001, and is incorporated herein by reference. PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a)(1) Financial Statements The following consolidated financial statements of Great Lakes Chemical Corporation and Subsidiaries and related notes thereto, together with the report thereon of Ernst & Young LLP dated, February 9, 2001, appearing on pages 28 through 44 of the 2000 Annual Report to Stockholders, are incorporated herein by reference: Consolidated Statements of Income --Years ended December 31, 2000, 1999 and 1998 Consolidated Balance Sheets -- December 31, 2000 and 1999 Consolidated Statements of Cash Flows -- Years ended December 31, 2000, 1999 and 1998 Consolidated Statements of Stockholders' Equity -- Years ended December 31, 2000, 1999 and 1998 Notes to Consolidated Financial Statements -- December 31, 2000. 12 (a)(2) Financial Statement Schedules The following Consolidated Financial Statement Schedule of Great Lakes Chemical Corporation and subsidiaries is filed as part of Item 14(d) of this report and should be read in conjunction with the Consolidated Financial Statements. Schedule II - Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore, have been omitted. (a)(3) Exhibits:
Exhibit No. Description ----------- ----------- (3)(i) Restated Certificate of Incorporation (incorporated by reference to Exhibit (3)(i) to the Company's Annual Report on Form 10-K for the year ended December 31, 1997) (3)(ii) By-Laws, as amended through January 21, 2000 (4)(i) Rights Agreement dated as of February 15, 1999, between the Company and Harris Trust Company of New York as Rights Agent (incorporated by reference to Exhibit 4.1 to the Company's Form 8-K filed March 23, 1999) Indenture dated as of July 16, 1999, between the Company and The First National Bank of Chicago, as Trustee (incorporated by reference to the Company's Registration Statement on Form S-3 No. 333-78515) (10)(i) Supplemental Retirement Plan, as amended (incorporated by reference to Exhibit (10)(i) to the Company's Annual Report on Form 10-K for the year ended December 31, 1997) (10)(ii)(a) Deferred Compensation Plan, as amended and restated effective January 1, 1997 (incorporated by reference to Exhibit (10)(ii) to the Company's Annual Report on Form 10-K for the year ended December 31, 1997) (10)(ii)(b) Amendment to Deferred Compensation Plan, dated November 20, 1997 (incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1999) (10)(iii)(a) Supplemental Savings Plan effective January 1, 1995 (incorporated by reference to Exhibit (10)(iii) to the Company's Annual Report on Form 10-K for the year ended December 31, 1997) (10)(iii)(b) Amendment to Supplemental Savings Plan effective January 1, 2000, (incorporated by reference to Exhibit (10)(iii) to the Company's Annual Report on Form 10-K for the year ended December 31, 1999) (10)(iv) Standard Form of Severance Agreements (incorporated by reference to Exhibit (10)(iv) to the Company's Annual Report on Form 10-K for the year ended December 31, 1997) (10)(v)(a) Non Employee Directors' Deferred and Long Term Compensation Plan (incorporated by reference to Exhibit (10)(vi) the Company's Annual Report on Form 10-K for the year ended December 31, 1997) (10)(v)(b) Amendment No. 1 to Non Employee Directors' Deferred and Long Term Compensation Plan, effective May 6, 1998 (incorporated by reference to Exhibit (10)(v) to the Company's Annual Report on Form 10-K for the year ended December 31, 1999) (10)(vi) Split-Dollar Life Insurance (incorporated by reference to Exhibit (10)(vii) to the Company's Annual Report on Form 10-K for the year ended December 31, 1997) (10)(vii) Standard Form of Change in Control Agreement (incorporated by reference to Exhibit (10)(viii) to the Company's Annual Report on Form 10-K for the year ended December 31, 1997) (10)(viii) Directors Retirement Plan, effective January 1, 1993 (incorporated by reference to Exhibit (10)(ix) to the Company's Annual Report on Form 10-K for the year ended December 31, 1997) (10)(ix)(a) 1998 Stock Compensation Plan (incorporated by reference to Exhibit 99.1 to the Company's Registration Statement on Form S-8 filed August 17, 1998) (10)(ix)(b) Amendment to 1998 Employee Stock Compensation Plan dated February 15, 1999 (incorporated by reference to Exhibit (10)(ix) to the Company's Annual Report on Form 10-K for the year ended December 31, 1999) (10)(x) 1993 Employee Stock Compensation Plan as amended on November 21, 1997 (incorporated by reference to Exhibit (10)(x) to the Company's Annual Report on Form 10-K for the year ended December 31, 1997)
13 (10)(xi) 1984 Employee Stock Option Plan as amended February 10, 1997 (incorporated by reference to Exhibit (10)(xi) to the Company's Annual Report on Form 10-K for the year ended December 31, 1997) (10)(xii) Employment Agreement with Mark P. Bulriss effective April 1, 1998 (incorporated by reference to Exhibit (10)(b) to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 1998) (10)(xiii) Stock Option and Restricted Stock Agreements with Mark P. Bulriss effective April 1, 1998 (incorporated by reference Exhibit (10)(a) to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1998) (10)(xiv) Employment Agreement with L. Donald Simpson dated December 14, 1999 (incorporated by reference to Exhibit (10)(vii) to the Company's Annual Report on Form 10-K for the year ended December 31, 1999) (13) 2000 Annual Report to Stockholders (21) Subsidiaries (23) Consent of Independent Auditors
(b) Reports on Form 8-K No Reports on Form 8-K were filed during the quarter ended December 31, 2000. 14 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GREAT LAKES CHEMICAL CORPORATION -------------------------------- (Registrant) Date March 21, 2001 /s/ Mark P. Bulriss --------------- ---------------------------------------------------- Mark P. Bulriss, Chairman , President and CEO Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: Date March 21, 2001 /s/ Kevin J. Mulcrone ----------------- ------------------------------------------------ Kevin J. Mulcrone, Vice President and Controller (Principal Accounting Officer) Date March 21, 2001 /s/ Nigel D. T. Andrews ----------------- ------------------------------------------------ Nigel D. T. Andrews, Director Date March 21, 2001 /s/ James W. Crownover ----------------- ------------------------------------------------ James W. Crownover, Director Date March 21, 2001 /s/ Thomas M. Fulton ----------------- ------------------------------------------------ Thomas M. Fulton, Director Date March 21, 2001 /s/ Martin M. Hale ----------------- ------------------------------------------------ Martin M. Hale, Director Date March 21, 2001 /s/ Louis E. Lataif ----------------- ------------------------------------------------ Louis E. Lataif, Director Date March 21, 2001 /s/ John C. Lechleiter ----------------- ------------------------------------------------ John C. Lechleiter, Director Date March 21, 2001 /s/ Mack G. Nichols ----------------- ------------------------------------------------ Mack G. Nichols, Director Date March 21, 2001 /s/ Jay D. Proops ----------------- ------------------------------------------------ Jay D. Proops, Director
15 SCHEDULE II GREAT LAKES CHEMICAL CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS THREE YEARS ENDED DECEMBER 31, 2000
Additions Balance at --------------------------------- Balance Beginning Charges to Costs Charged to at End Description of Period and Expenses Other Accounts Deductions of Period ----------- ----------- ----------- --------- ----------- ----------- 2000: Reserve deducted from asset: Allowance for doubtful accounts receivable $ 4,730,000 $ 226,000 $ -- $ 145,000(A) $ 4,811,000 ----------- ----------- ----------- ----------- ----------- Accumulated amortization of goodwill $22,468,000 $ 8,828,000 $ -- $ 345,000(B) $30,951,000 ----------- ----------- ----------- ----------- ----------- 1999: Reserve deducted from asset: Allowance for doubtful accounts receivable $ 4,134,000 $ 744,000 $ 1,243,000 $ 1,391,000(A) $ 4,730,000 ----------- ----------- ----------- ----------- ----------- Accumulated amortization of goodwill $16,804,000 $ 6,845,000 $ -- $ 1,181,000(B) $22,468,000 ----------- ----------- ----------- ----------- ----------- 1998: Reserve deducted from asset: Allowance for doubtful accounts receivable $ 5,803,000 $ 94,000 $ -- $ 1,763,000(A) $ 4,134,000 ----------- ----------- ----------- ----------- ----------- Accumulated amortization of goodwill $12,645,000 $ 4,288,000 $ -- $ 129,000(B) $16,804,000 ----------- ----------- ----------- ----------- -----------
(A) Uncollectible accounts receivable written off, net of recoveries and foreign currency translation. (B) Foreign currency translation.