1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the fiscal year ended December 31, 1998 ------------------ OR __TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from to ---------- --------- Commission file number 33-75622 --------- A. Full title of the plan and the address of the plan, if different from that of the issuer named below: SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Albemarle Corporation 330 S. Fourth Street Richmond, Virginia 23219

2 REQUIRED INFORMATION See Appendix 1. SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION BY: s/Charles B. Walker ------------------------ Charles B. Walker Chairman of the Savings Plan Committee Dated: June 30, 1999

3 Appendix I SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION ANNUAL REPORT DECEMBER 31, 1998 AND 1997

4 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION INDEX OF FINANCIAL STATEMENTS AND SCHEDULES Page Report of Independent Accountants 2 Financial Statements: Statement of Assets Available for Benefits With Fund Information at December 31, 1998 3 Statement of Assets Available for Benefits With Fund Information at December 31, 1997 4 Statement of Changes in Assets Available for Benefits With Fund Information for the Year Ended December 31, 1998 5 Notes to Financial Statements 6-13 Supplemental Schedules: Assets Held for Investment Purposes, December 31, 1998 14 Nonexempt Party-in-Interest Transactions for the Year Ended December 31, 1998 * Obligations in Default for the Year Ended December 31, 1998 15 Leases in Default for the Year Ended December 31, 1998 * Reportable Transactions for the Year Ended December 31, 1998 16 *Trustee reported no such transactions or leases in default. -1-

5 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of The Savings Plan for the Employees of Albemarle Corporation In our opinion, the accompanying statements of assets available for benefits and the related statements of changes in assets available for benefits present fairly, in all material respects, the assets available for benefits of the Savings Plan for the Employees of Albemarle Corporation (the "Plan") at December 31, 1998 and 1997, and the changes in assets available for benefits for the year ended December 31, 1998 in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes at December 31, 1998, obligations in default and reportable transactions for the year ended December 31, 1998, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of assets available for benefits and the statement of changes in assets available for benefits is presented for purposes of additional analysis rather than to present the assets available for plan benefits and changes in assets available for benefits of each fund. These supplemental schedules and fund information are the responsibility of the Plan's management. These supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. PricewaterhouseCoopers LLP June 21, 1999 -2-

6 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION STATEMENT OF ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION December 31, 1998 Participant Directed ------------------------------------------------------------------------ Common Common Stock Co-Mingled Stock Inactive Options Trusts ----------- --------------------------- ------------------------------- Albemarle Ethyl Tredegar Merrill Lynch Corporation Corporation Industries, Inc. Retirement Merrill Lynch Common Common Common Preservation Equity Index Stock Stock Stock Trust Trust ----------- ----------- --------------- -------------- ---------------- Assets: Cash $230,539 $15,442 $101 $28,106 ----------- ----------- -------------- ---------------- ---------------- Investments: Co-Mingled Trusts: Merrill Lynch Retirement Preservation Trust(cost $37,691,936) 37,691,936 Merrill Lynch Equity Index Trust (cost $35,941,349) $46,551,220 Mutual Funds: PIMCO Total Return Fund (cost $6,479,924) Merrill Lynch Capital Fund, Inc. (cost $10,786,215) Davis New York Venture Fund, Inc. (cost $4,049,297) Alliance Premier Growth Fund (cost $4,607,896) Merrill Lynch Growth Fund (cost $2,180,059) Franklin Small Cap Growth Fund (cost $3,507,910) Ivy International Fund (cost $1,200,296) Loan Fund: Loan Fund Common Stocks: Albemarle Corporation (cost $59,930,665) Participant directed 52,932,663 Non- participant directed Ethyl Corporation (cost $16,954,752) 12,788,184 Tredegar Industries, Inc. (cost $715,566) 12,500,550 ------------- ------------ --------------- --------------- --------------- Total Investments 52,932,663 12,788,184 12,500,550 37,691,936 46,551,220 Receivables: Interest and dividends 24,158 Employee contributions 13,479 8,070 14,523 Employer contributions Loan repayments Assets available ------------- ------------ --------------- --------------- --------------- for benefits $53,176,681 $12,803,626 $12,500,651 $37,752,270 $46,565,743 ------------- ------------ --------------- --------------- --------------- ------------- ------------ --------------- --------------- --------------- The accompanying notes are an integral part of the financial statements. -3-

7 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION STATEMENT OF ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION December 31, 1998 Participant Directed ------------------------------------------------------------------------ Mutual Funds ------------------------------------------------------------------------ PIMCO Merrill Davis Alliance Merrill Total Lynch New York Premier Lynch Return Capital Venture Growth Growth Fund Fund, Inc. Fund, Inc. Fund Fund ----------- ----------- -------------- ---------------- --------------- Assets: Cash ----------- ----------- -------------- ---------------- ---------------- Investments: Co-Mingled Trusts: Merrill Lynch Retirement Preservation Trust(cost $37,691,936) Merrill Lynch Equity Index Trust (cost $35,941,349) Mutual Funds: PIMCO Total Return Fund (cost $6,479,924) $6,352,216 Merrill Lynch Capital Fund, Inc. (cost $10,786,215) $10,586,699 Davis New York Venture Fund, Inc.(cost $4,049,297) $4,388,435 Alliance Premier Growth Fund (cost $4,607,896) $5,770,756 Merrill Lynch Growth Fund (cost $2,180,059) $1,751,887 Franklin Small Cap Growth Fund (cost $3,507,910) Ivy International Fund (cost $1,200,296) Loan Fund: Loan Fund Common Stocks: Albemarle Corporation (cost $59,930,665) Participant directed Non- participant directed Ethyl Corporation (cost $16,954,752) Tredegar Industries, Inc. (cost $715,566) ------------- ------------ --------------- --------------- --------------- Total 6,352,216 10,586,699 4,388,435 5,770,756 1,751,887 Investments Receivables: Interest and dividends Employee contributions 2,664 6,681 2,346 2,273 954 Employer contributions Loan repayments Assets available ------------- ------------ --------------- --------------- --------------- for benefits $6,354,880 $10,593,380 $4,390,781 $5,773,029 $1,752,841 ------------- ------------ --------------- --------------- --------------- ------------- ------------ --------------- --------------- --------------- The accompanying notes are an integral part of the financial statements. -3-

8 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION STATEMENT OF ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION December 31, 1998 Non-Participant Participant Directed Directed ------------------------------------- ------------------ Loan Common Mutual Funds Fund Stock ----------------------- ------------- ------------------ ---------------- Franklin Ivy Albemarle Small Cap International Loan Corporation Growth Fund Fund Fund Common Stock Total ----------- ----------- -------------- ----------------- -------------- Assets: Cash $274,188 ----------- ----------- -------------- ---------------- ---------------- Investments: Co-Mingled Trusts: Merrill Lynch Retirement Preservation Trust(cost $37,691,936) 37,691,936 Merrill Lynch Equity Index Trust (cost $35,941,349) 46,551,220 Mutual Funds: PIMCO Total Return Fund (cost $6,479,924) 6,352,216 Merrill Lynch Capital Fund, Inc.(cost $10,786,215) 10,586,699 Davis New York Venture Fund, Inc.(cost $4,049,297) 4,388,435 Alliance Premier Growth Fund (cost $4,607,896) 5,770,756 Merrill Lynch Growth Fund (cost $2,180,059) 1,751,887 Franklin Small Cap Growth Fund (cost $3,507,910) $3,539,211 3,539,211 Ivy International Fund (cost $1,200,296) $1,212,910 1,212,910 Loan Fund: Loan Fund $2,525,318 2,525,318 Common Stocks: Albemarle Corporation (cost $59,930,665) Participant directed 52,932,663 Non- participant directed $43,637,026 43,637,026 Ethyl Corporation (cost $16,954,752) 12,788,184 Tredegar Industries, Inc. (cost $715,566) 12,500,550 ------------- ------------- --------------- --------------- --------------- Total 3,539,211 1,212,910 2,525,318 43,637,026 242,229,011 Investments Receivables: Interest and dividends 24,158 Employee contributions 1,418 292 52,700 Employer contributions 24,159 24,159 Loan repayments 7,929 7,929 Assets available ------------- ------------ --------------- --------------- --------------- for benefits $3,540,629 $1,213,202 $2,533,247 $43,661,185 $242,612,145 ------------- ------------ --------------- --------------- --------------- ------------- ------------ --------------- --------------- --------------- The accompanying notes are an integral part of the financial statements. -3-

9 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION STATEMENT OF ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION December 31, 1997 Participant Directed ------------------------------------------------------------------------- Common Common Stock Co-Mingled Stock Inactive Options Trusts ------------ --------------------------- ------------------------------- Albemarle Ethyl Tredegar Merrill Lynch Corporation Corporation Industries, Inc. Retirement Merrill Lynch Common Common Common Preservation Equity Index Stock Stock Stock Trust Trust ------------ ----------- -------------- ---------------- --------------- Assets: Cash $50,725 ------------ ----------- -------------- ---------------- ---------------- Investments: Co-Mingled Trusts: Merrill Lynch Retirement Preservation Trust(cost $37,708,235) 37,708,235 Merrill Lynch Equity Index Trust (cost $36,444,235) $37,749,800 Mutual Funds: PIMCO Total Return Fund (cost $6,344,260) Merrill Lynch Capital Fund, Inc. (cost $10,828,717) Davis New York Venture Fund, Inc, (cost $900,552) Alliance Premier Growth Fund (cost $794,843) Merrill Lynch Growth Fund (cost $881,787) Franklin Small Cap Growth Fund (cost $1,207,779) Ivy International Fund (cost $316,096) Loan Fund: Loan Fund Common Stocks: Albemarle Corporation (cost $55,986,394) Participant directed 56,146,418 Non- participant directed Ethyl Corporation (cost $18,701,465) 19,001,575 Tredegar Industries, Inc. (cost $719,260) 13,806,159 ------------- ------------ --------------- --------------- --------------- Total Investments 56,146,418 19,001,575 13,806,159 37,708,235 37,749,800 Receivables: Interest and dividends 182 Assets available ------------- ------------ --------------- --------------- --------------- for benefits $56,146,418 $19,001,575 $13,806,159 $37,759,142 $37,749,800 ------------- ------------ --------------- --------------- --------------- ------------- ------------ --------------- --------------- --------------- The accompanying notes are an integral part of the financial statements. -4-

10 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION STATEMENT OF ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION December 31, 1997 Participant Directed ------------------------------------------------------------------------ Mutual Funds ------------------------------------------------------------------------ PIMCO Merrill Davis Alliance Merrill Total Lynch New York Premier Lynch Return Capital Venture Growth Growth Fund Fund, Inc. Fund, Inc. Fund Fund ----------- ----------- -------------- ---------------- --------------- Assets: Cash $28,354 $126,816 $15,417 $280,917 ----------- ----------- -------------- ---------------- ---------------- Investments: Co-Mingled Trusts: Merrill Lynch Retirement Preservation Trust(cost $37,708,235) Merrill Lynch Equity Index Trust (cost $36,444,235) Mutual Funds: PIMCO Total Return Fund (cost $6,344,260) 6,239,540 Merrill Lynch Capital Fund, Inc. (cost $10,828,717) $10,643,543 Davis New York Venture Fund, Inc. (cost $900,552) 916,056 Alliance Premier Growth Fund (cost $794,843) 817,150 Merrill Lynch Growth Fund (cost $881,787) 901,104 Franklin Small Cap Growth Fund (cost $1,207,779) Ivy International Fund (cost $316,096) Loan Fund: Loan Fund Common Stocks: Albemarle Corporation (cost $55,986,394) Participant directed Non- participant directed Ethyl Corporation (cost $18,701,465) Tredegar Industries, Inc. (cost $719,260) ------------- ------------ --------------- --------------- --------------- Total 6,239,540 10,643,543 916,056 817,150 901,104 Investments Receivables: Interest and dividends 102 454 55 1,006 Assets available ------------- ------------ --------------- --------------- --------------- for benefits $6,267,996 $10,643,543 $1,043,326 $832,622 $1,183,027 ------------- ------------ --------------- --------------- --------------- ------------- ------------ --------------- --------------- --------------- The accompanying notes are an integral part of the financial statements. -4-

11 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION STATEMENT OF ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION December 31, 1997 Non-Participant Participant Directed Directed ------------------------------------- ----------------- ---------------- Loan Common Mutual Funds Fund Stock ----------------------- ------------- ---------------- ---------------- Franklin Ivy Albemarle Small Cap International Loan Corporation Growth Fund Fund Fund Common Stock Total ----------- ----------- -------------- ---------------- --------------- Assets: Cash $8,104 $510,333 ----------- ----------- -------------- ---------------- ---------------- Investments: Co-Mingled Trusts: Merrill Lynch Retirement Preservation Trust(cost $37,708,235) 37,708,235 Merrill Lynch Equity Index Trust (cost $36,444,235) 37,749,800 Mutual Funds: PIMCO Total Return Fund (cost $6,344,260) 6,239,540 Merrill Lynch Capital Fund, Inc. (cost $10,828,717) 10,643,543 Davis New York Venture Fund, Inc. (cost $900,552) 916,056 Alliance Premier Growth Fund (cost $794,843) 817,150 Merrill Lynch Growth Fund (cost $881,787) 901,104 Franklin Small Cap Growth Fund (cost $1,207,779) 1,246,066 1,246,066 Ivy International Fund (cost $316,096) $316,206 316,206 Loan Fund: Loan Fund $680,128 680,128 Common Stocks: Albemarle Corporation (cost $55,986,394) Participant directed 56,146,418 Non- participant directed $40,841,050 40,841,050 Ethyl Corporation (cost $18,701,465) 19,001,575 Tredegar Industries, Inc. (cost $719,260) 13,806,159 ------------- ------------- --------------- --------------- --------------- Total 1,246,066 316,206 680,128 40,841,050 227,013,030 Investments Receivables: Interest and dividends 28 1,827 Assets available ------------- ------------ --------------- --------------- --------------- for benefits $1,254,198 $316,206 $680,128 $40,841,050 $227,525,190 ------------- ------------ --------------- --------------- --------------- ------------- ------------ --------------- --------------- --------------- The accompanying notes are an integral part of the financial statements. -4-

12 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION for the Year Ended December 31, 1998 Participant Directed ------------------------------------------------------------------------ Common Common Stock Co-Mingled Stock Inactive Options Trusts ----------- --------------------------- ------------------------------- Albemarle Ethyl Tredegar Merrill Lynch Corporation Corporation Industries, Inc. Retirement Merrill Lynch Common Common Common Preservation Equity Index Stock Stock Stock Trust Trust ----------- ----------- --------------- ------------- ----------------- Investment Income: Dividends and Interest $836,794 $592,249 $81,185 2,264,596 Loan Interest 45,139 17,716 $54,089 Net appreciation (depreciation) in the fair value of investments (463,710) (4,696,548) 232,231 10,426,672 ----------- ------------ -------------- ------------- ----------------- 418,223 (4,104,299) 313,416 2,282,312 10,480,761 Contributions: Employee contributions 2,806,815 1,257,405 3,600,214 Employer contributions ----------- ------------ -------------- ------------- ----------------- Total contributions 2,806,815 1,257,405 3,600,214 ----------- ------------ -------------- ------------- ----------------- Total additions (deductions) 3,225,038 (4,104,299) 313,416 3,539,717 14,080,975 ----------- ------------ -------------- ------------- ----------------- Benefit Payments (1,444,292) (351,265) (184,883) (4,784,804) (3,223,685) Interfund Transfers (4,736,573) (1,742,385) (1,423,979) 1,234,252 (2,041,457) Other, net (13,910) (10,062) 3,963 110 ----------- ------------ -------------- -------------- ---------------- Total (deductions) additions (6,194,775) (2,093,650) (1,618,924) (3,546,589) (5,265,032) ----------- ------------ -------------- -------------- --------------- Net increase (decrease) for the year ended December 31, 1998 (2,969,737) (6,197,949) (1,305,508) (6,872) 8,815,943 Assets available for benefits, beginning of year 56,146,418 19,001,575 13,806,159 37,759,142 37,749,800 ----------- ------------ -------------- -------------- --------------- Assets available for benefits, end of year $53,176,681 $12,803,626 $12,500,651 $37,752,270 $46,565,743 ----------- ------------ -------------- -------------- --------------- ----------- ------------ -------------- -------------- --------------- The accompanying notes are an integral part of the financial statements. -5-

13 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION for the Year Ended December 31, 1998 Participant Directed ------------------------------------------------------------------------ Mutual Funds ------------------------------------------------------------------------ PIMCO Merrill Davis Alliance Merrill Total Lynch New York Premier Lynch Return Capital Venture Growth Growth Fund Fund, Inc. Fund, Inc. Fund Fund ----------- ------------ -------------- -------------- ----------------- Investment Income: Dividends and Interest $590,766 $674,565 $107,378 $111,840 $34,071 Loan Interest 4,983 8,382 3,286 6,085 5,426 Net appreciation (depreciation) in the fair value of investments (33,409) (7,122) 360,780 1,170,958 (474,043) ----------- ------------ -------------- ------------- ----------------- 562,340 675,825 471,444 1,288,883 (434,546) Contributions: Employee contributions 458,058 982,349 452,668 402,846 265,348 Employer contributions ----------- ------------ -------------- ------------- ----------------- Total contributions 458,058 982,349 452,668 402,846 265,348 ----------- ------------ -------------- ------------- ----------------- Total additions (deductions) 1,020,398 1,658,174 924,112 1,691,729 (169,198) ----------- ------------ -------------- ------------- ----------------- Benefit Payments (1,891,219) (588,847) (33,653) (23,380) (43,982) Interfund Transfers 958,305 (1,119,490) 2,459,199 3,272,202 788,924 Other, net (600) (2,203) (144) (5,930) ----------- ------------ -------------- -------------- ---------------- Total (deductions) additions (933,514) (1,708,337) 2,423,343 3,248,678 739,012 ----------- ------------ -------------- -------------- --------------- Net increase (decrease) for the year ended December 31, 1998 86,884 (50,163) 3,347,455 4,940,407 569,814 Assets available for benefits, beginning of year 6,267,996 10,643,543 1,043,326 832,622 1,183,027 ----------- ------------ -------------- -------------- --------------- Assets available for benefits, end of year $6,354,880 $10,593,380 $4,390,781 $5,773,029 $1,752,841 ----------- ------------ -------------- -------------- --------------- ----------- ------------ -------------- -------------- --------------- The accompanying notes are an integral part of the financial statements. -5-

14 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION for the Year Ended December 31, 1998 Non-Participant Participant Directed Directed ------------------------------------- ------------------ ---------------- Loan Common Mutual Funds Fund Stock ------------------------- ----------- ------------------ ---------------- Franklin Ivy Albemarle Small Cap International Loan Corporation Growth Fund Fund Fund Common Stock Total ----------- ------------- ----------- ------------------ ---------------- Investment Income: Dividends and Interest $50,037 $20,425 $633,686 $5,997,592 Loan Interest 4,144 1,165 150,415 Net appreciation (depreciation) in the fair value of investments 21,605 13,219 (87,760) 6,462,873 ----------- ------------ -------------- ------------- ----------------- 75,786 34,809 545,926 12,610,880 Contributions: Employee contributions 440,828 106,727 10,773,258 Employer contributions 5,109,964 5,109,964 ----------- ------------ -------------- ------------- ----------------- Total contributions 440,828 106,727 0 5,109,964 15,883,222 ----------- ------------ -------------- ------------- ----------------- Total additions (deductions) 516,614 141,536 0 5,655,890 28,494,102 ----------- ------------ -------------- ------------- ----------------- Benefit Payments (53,626) (1,735) ($35,777) (724,980) (13,386,128) Interfund Transfers 1,823,615 757,195 1,880,967 (2,110,775) 0 Other, net (172) 7,929 (21,019) ----------- ------------ -------------- -------------- ---------------- Total (deductions) additions 1,769,817 755,460 1,853,119 (2,835,755) (13,407,147) ----------- ------------ -------------- -------------- --------------- Net increase (decrease) for the year ended December 31, 1998 2,286,431 896,996 1,853,119 2,820,135 15,086,955 Assets available for benefits, beginning of year 1,254,198 316,206 680,128 40,841,050 227,525,190 ----------- ------------ -------------- -------------- --------------- Assets available for benefits, end of year $3,540,629 $1,213,202 $2,533,247 $43,661,185 $242,612,145 ----------- ------------ -------------- -------------- --------------- ----------- ------------ -------------- -------------- --------------- The accompanying notes are an integral part of the financial statements. -5-

15 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: GENERAL: The accompanying financial statements of the Savings Plan For The Employees Of Albemarle Corporation (the "Plan") have been prepared in conformity with generally accepted accounting principles. On September 30, 1998, Albemarle Corporation ("Albemarle" or the "Company") finalized the purchase of 5,738,241 of its common shares through a self-tender offer at a price of $19.50 per share plus expenses. Participants in the Plan holding Albemarle stock were allowed to participate in the tender offer. In connection with this transaction, 109,796 shares of participant directed Albemarle common stock were redeemed for total net proceeds of $2,135,474. Proceeds received for the shares sold were transferred to the Merrill Lynch Retirement Preservation Trust and allocated to the appropriate participants' accounts. On July 31, 1995, Albemarle sold the assets and transferred the technology for its electronic materials business to MEMC Pasadena, Inc. ("MEMC") for approximately $59 million. Effective May 1, 1997, Albemarle and MEMC revised the operating agreements signed originally on July 31, 1995. Any employee whose employment with Albemarle was terminated as a result of the sale and who was employed by MEMC immediately following termination, is considered fully vested in their account balances. ACCOUNTING ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires the Plan to make significant estimates and assumptions that affect the reported amounts of assets as of the date of the financial statements and the reported amounts of changes in assets available for plan benefits during the reporting periods. Actual results could differ from those estimates. RISKS AND UNCERTAINTIES: The Plan provides for various mutual fund investment options in stocks, bonds and fixed income securities. Investments are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statements of assets available for plan benefits and the statement of changes in assets available for plan benefits. -6-

16 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED: SECURITIES VALUATION: Investments are stated at values determined as follows: Common stocks -last published sale price on the New York Stock Exchange Mutual funds and Equity Index Trust -quoted market value Retirement Preservation Trust -Investments in Guaranteed Insurance Contracts (GIC's) and Bank Investment Contracts (BIC's) with benefit responsive features are carried at cost plus accrued interest (contract value). Synthetic investment contracts are stated at the contract book value which approximates amortized cost. Money market instruments and US Government agency obligations are valued at amortized cost. Loans to participants -balances due which approximate fair value SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME: Securities transactions are accounted for on a trade-date basis and dividend income is recorded on the ex-dividend date. Interest income is recorded as earned. The Plan presents in the statement of changes in assets available for benefits the "net appreciation (depreciation) in the fair value of investments" which consists of realized gains and losses and changes in the unrealized appreciation (depreciation) on those investments. Investment income is allocated to participant accounts in proportion to the participant's account balance. -7-

17 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION NOTES TO THE FINANCIAL STATEMENTS 2. DESCRIPTION OF PLAN: The Plan is a defined contribution plan. It is subject to the provisions of the Employee Retirement Income Security Act of 1974. Information regarding Plan benefits, priority of distributions upon termination of the Plan, and vesting is provided in the Plan agreement which is available at the main office of the Plan administrator at 451 Florida Street, Baton Rouge, Louisiana 70801. 3. INVESTMENT FUNDS: Effective November 1, 1997, Merrill Lynch Trust Company of America was appointed trustee and Merrill Lynch, Price, Fenner & Smith, Inc. was appointed investment manager and record keeper of the Plan (collectively "Merrill Lynch"). Prior to November 1, 1997, NationsBank of Georgia, N.A. ("NationsBank") was the investment manager, record keeper and trustee of the Plan. At the time of the transition, all of the money invested in the active funds offered by NationsBank were transferred to the new investment funds offered by Merrill Lynch. The Plan consists of ten active funds and two inactive funds. The active funds are as follows: Albemarle Corporation Common Stock Fund, invested in common stock of Albemarle. Merrill Lynch Retirement Preservation Trust, a collective trust maintained by Merrill Lynch Trust Company of America and invested primarily in a broadly diversified portfolio of GIC's and BIC's, synthetic GIC's and separate accounts in obligations of U.S. government and U.S. government agency securities, and in high-quality money market securities. PIMCO Total Return Fund, invested in shares of a registered investment company that invests in a diversified portfolio of fixed income securities of varying maturities, including some high-yield and foreign fixed income securities. Merrill Lynch Capital Fund, Inc., invested in shares of a registered investment company that invests in domestic and/or foreign equity, debt, and convertible securities. Merrill Lynch Equity Index Trust, a collective trust maintained by Merrill Lynch Trust Company of America indexed to the S&P 500 Index and invested in a portfolio of equity securities designed to substantially match the S&P 500 index. -8-

18 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION NOTES TO THE FINANCIAL STATEMENTS 3. INVESTMENT FUNDS, CONTINUED: Davis New York Venture Fund, Inc., invested in shares of a registered investment company that invests primarily in common stocks or convertible securities of companies with a market capitalization of at least $250 million. Cash or fixed-income securities may also be included in the portfolio. Alliance Premier Growth Fund, invested in shares of a registered investment company that invests primarily in equity securities of a limited number of carefully selected, large capitalization companies. Merrill Lynch Growth Fund, invested in shares of a registered investment company that invests in equity securities considered undervalued compared to market averages or the company's historic values. Franklin Small Cap Growth Fund, invested in shares of a registered investment company that invests primarily in equity securities of companies which have market capitalizations of less than $1 billion at the time of investment. Ivy International Fund, invested in shares of a registered investment company that invests primarily in equity securities traded in European, Pacific Basin and Latin American markets. Inactive funds are the Tredegar Industries, Inc. Common Stock Fund, which invested in common stock of Tredegar Industries, Inc., and the Ethyl Corporation Common Stock Fund, which invested in common stock of Ethyl Corporation. Participants currently in the Plan may select a program for investment in any of the ten active funds, or in any combination thereof. Contributions made by Albemarle are invested in the non-participant directed Albemarle Corporation Common Stock Fund, which contains both participant and non-participant directed balances. Participants may not contribute to the two inactive funds nor transfer funds from other options into those funds; however, dividends earned are reinvested in the inactive funds. Transfers may be made between active funds and out of the inactive funds. In addition, participants have a one time election to transfer the Company's contributions from the Albemarle Corporation Common Stock fund to other active funds during the course of their employment. Any shares tendered in connection with Albemarle's offer to purchase shares of its common stock dated September 30, 1998, are not considered as the use of the one time election. -9-

19 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION NOTES TO THE FINANCIAL STATEMENTS 3. INVESTMENT FUNDS, CONTINUED: At December 31, 1998 and 1997, there were 2,328 and 2,330 employees participating in the Plan, respectively. As of December 31, 1998 and 1997, approximately 2,215 and 2,262 employees were eligible to participate in the Plan, respectively. Participation in each fund was as follows: Number of Participants* December 31, ------------------------ 1998 1997 --------- -------- Albemarle Common Stock Fund 2,328 2,330 Ethyl Corporation Common Stock Fund 1,732 1,865 Tredegar Industries, Inc. Common Stock Fund 802 888 Merrill Lynch Retirement Preservation Trust 1,734 1,900 PIMCO Total Return Fund 509 483 Merrill Lynch Capital Fund, Inc. 629 615 Merrill Lynch Equity Index Trust 1,389 1,369 Davis New York Venture Fund, Inc. 347 70 Alliance Premier Growth Fund 313 47 Merrill Lynch Growth Fund 204 71 Franklin Small Cap Growth Fund 286 76 Ivy International Fund 153 34 * Includes former employees. -10-

20 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION NOTES TO THE FINANCIAL STATEMENTS 4. CONTRIBUTIONS: Participants in the Plan make pre-tax and/or after-tax contributions as defined in the Plan document limited to a percentage of their base salaries. Albemarle makes a matching contribution to the Plan equal to a percentage of each participant's contribution. These percentages vary for different groups of participating employees. Participant contributions are 100% vested at all times. 5. DISTRIBUTIONS: Benefits are recorded when paid. Employees become fully vested in the Company's matching contribution after completing five years of service. Employees are considered partially vested if they have completed from three to five years of service. Employees may decide whether benefits will be received directly in the form of a lump sum or rolled over to an individual IRA account or to another qualified plan. 6. PARTICIPANT LOANS Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50 percent of their account balance. Loan transactions are treated as a transfer to (from) the investment fund from (to) the Loan fund. Loan terms range from 1-5 years or up to 25 years for the purchase of a primary residence. The loans are secured by the balance in the participant's account and bear interest at a rate of prime plus one percent on the last day of the quarter. The interest rate as of December 31, 1998 and 1997, was 8.75% and 9.5%, respectively. Principal and interest is paid ratably through payroll deductions. 7. FEDERAL INCOME TAXES: The Internal Revenue Service advised the Plan administrator on July 10, 1995, that the Plan constitutes a qualified trust under Section 401 of the Internal Revenue Code (the "Code") and is therefore exempt from federal income taxes. The Plan has been amended since July 10, 1995, and was restated effective November 1, 1997. Currently the U.S. Treasury Department has not reviewed these new amendments. However, the plan administrator and the Plan's legal counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. Until such time as participants withdraw all or part of their accumulated account balance, their invested funds are not subject to federal income taxes for contributions made by them and on their behalf by Albemarle or for investment income received on such investments. -11-

21 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION NOTES TO THE FINANCIAL STATEMENTS 8. STOCK PRICES: Closing stock prices per share at December 31, 1998 and 1997 were as follows: 1998 1997 Albemarle Corporation common stock $23.750 $23.875 Ethyl Corporation common stock 5.625 7.687 Tredegar Industries, Inc. common stock* 22.500 21.958 *A 3-for-1 stock split occurred in 1998, the 1997 common stock amount was restated to give effect to the stock split. 9. ADMINISTRATION EXPENSES: Expenses totaling $9,226 for administering the Plan are borne entirely by Albemarle and no charge is made to the Plan with respect thereto. 10. FORFEITURES: Employees who leave Albemarle before becoming fully vested in Albemarle contributions forfeit the value of their nonvested account. Forfeitures during a Plan year serve to reduce required Company contributions and are reflected in the statement of changes in assets available for benefits with fund information in the year in which the forfeitures are applied to Albemarle's contribution. For the year ended December 31, 1998, $28,805 of forfeitures became available and will be used as a reduction of required Company contributions for the 1999 Plan year. For the year ended December 31, 1997, $17,945 of forfeitures became available and were used as a reduction of required Company contributions for the 1998 Plan year. 11. PLAN TERMINATION: Although Albemarle has not expressed any intent to do so, it has the right under the Plan to discontinue its contributions at any time and terminate the Plan subject to the provisions of the Employee Retirement Income Security Act of 1974. In the event of Plan termination, participants will become 100% vested in the Company's matching account balances and the assets of the Plan shall be allocated to participants in proportion to their account balances as of the effective date of termination. -12-

22 12. PLAN AMENDMENT: Effective October 1, 1998, the Plan was amended to allow non-highly compensated participants, as defined by the Plan document, to make a pre-tax or after-tax election percentage ranging from a minimum of one percent (1%) to a maximum of fifteen percent (15%) to be contributed into the Plan. -13-

23 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION, ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES December 31, 1998 (a)(b)(c) (d) (e) Description Cost of Current Each Item Value* - ---------------------------------- ----------- ------------ ** Merrill Lynch Retirement Preservation Trust (37,691,936 units) $37,691,936 $37,691,936 PIMCO Total Return Fund (602,677 units) 6,479,924 6,352,216 ** Merrill Lynch Capital Fund, Inc. (307,663 units) 10,786,215 10,586,699 ** Merrill Lynch Equity Index Trust (554,696 units) 35,941,349 46,551,220 Davis New York Venture Fund, Inc. (175,467 units) 4,049,297 4,388,435 Alliance Premier Growth Fund (190,706 units) 4,607,896 5,770,756 ** Merrill Lynch Growth Fund (81,445 units) 2,180,059 1,751,887 Franklin Small Cap Growth Fund (156,810 units) 3,507,910 3,539,211 Ivy International Fund (29,440 units) 1,200,296 1,212,910 ** Albemarle Corporation common stock, $.01 par value (4,066,092 shares) 59,930,665 96,569,689 Ethyl Corporation common stock, $1.00 par value (2,273,455 shares) 16,954,752 12,788,184 Tredegar Industries, Inc. common stock, no par value (555,580 shares) 715,566 12,500,550 Loan fund --- 2,525,318 -------------- -------------- Total plan investments $184,045,865 $242,229,011 -------------- -------------- -------------- -------------- *See Note 1 of Notes to Financial Statements **Denotes a party-in-interest to the Plan -14-

24 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION ITEM 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS for the year ended December 31, 1998 a. b. Identity and c. Original amount Amount received address of obligor of loan during the year d. Principal e. Interest - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- 1. Participant $25,732.92 $1,780.22 $883.18 2. Participant 18,000.00 485.14 252.42 3. Participant 5,281.00 70.92 37.28 4. Participant 5,000.00 93.10 48.74 * Loans are considered in default because of termination of employment. Amounts are deemed as taxable events. -15-

25 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION ITEM 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS for the year ended December 31, 1998 a. b. Identity and f. Unpaid g. Detailed description Amount Overdue address of obligor balance of loan including at end dates of making and of year maturity, interest rate, the type and value of h. Principal i. Interest collateral, any renegotiation of the loan and the terms of the renegotiation and other material - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- 1. Participant $23,952.70 Issued 5/18/98 $23,952.70* -- Maturity 5/15/03 Interest Rate 8.5% 2. Participant $17,514.86 Issued 5/27/98 17,514.86* Maturity 5/18/03 Interest Rate 8.5% 3. Participant $5,210.08 Issued 2/24/98 5,210.08* -- Maturity 2/21/03 Interest Rate 8.5% 4. Participant $4,906.90 Issued 1/5/98 4,906.90* -- Maturity 1/3/03 Interest Rate 8.5% * Loans are considered in default because of termination of employment. Amounts are deemed as taxable events. -15-

26 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS for the year ended December 31, 1998 a. Identity of b. Description of c. Purchase d. Selling party involved asset (include interest Price Price rate and maturity in case of a loan) - ----------------------------------------------------------------------- - ----------------------------------------------------------------------- PURCHASES: *Albemarle Corporation Common Stock $6,830,484 --- *Merrill Lynch Equity Index Trust 7,783,440 --- *Merrill Lynch Retirement Preservation Trust 16,856,143 --- SALES: *Albemarle Corporation Common Stock --- $9,405,885 *Merrill Lynch Equity Index Trust --- 9,408,692 *Merrill Lynch Retirement Preservation Trust --- 16,872,442 (1) Ordinary brokerage charges on purchases or sales transactions are included in purchase price or shown as a reduction of sale price. *Denotes a party-in-interest to the Plan. -16-

27 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS for the year ended December 31, 1998 a. Identity of b. Description of e. Lease f. Expense g. Cost party involved asset (include interest Rental incurred of rate and maturity in with asset case of a loan) transaction (1) - ----------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------- PURCHASES: *Albemarle Corporation Common Stock --- --- $6,830,484 *Merrill Lynch Equity Index Trust --- --- 7,783,440 *Merrill Lynch Retirement Preservation Trust --- --- 16,856,143 SALES: *Albemarle Corporation Common Stock --- --- 6,353,903 *Merrill Lynch Equity Index Trust --- --- 8,286,327 *Merrill Lynch Retirement Preservation Trust --- --- 16,872,442 (1) Ordinary brokerage charges on purchases or sales transactions are included in purchase price or shown as a reduction of sale price. *Denotes a party-in-interest to the Plan. -16-

28 SAVINGS PLAN FOR THE EMPLOYEES OF ALBEMARLE CORPORATION ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS for the year ended December 31, 1998 a. Identity of b. Description of h. Current i. Net party involved asset (include interest value of gain rate and maturity in asset on case of a loan) transaction date - ----------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------- PURCHASES: *Albemarle Corporation Common Stock $6,830,484 --- *Merrill Lynch Equity Index Trust 7,783,440 --- *Merrill Lynch Retirement Preservation Trust 16,856,143 --- SALES: *Albemarle Corporation Common Stock 9,405,885 $3,051,982 *Merrill Lynch Equity Index Trust 9,408,692 1,122,365 *Merrill Lynch Retirement Preservation Trust 16,872,442 --- (1) Ordinary brokerage charges on purchases or sales transactions are included in purchase price or shown as a reduction of sale price. *Denotes a party-in-interest to the Plan. -16-

29 Consent of Independent Accountants We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-75622) of Albemarle Corporation of our report dated June 21, 1999, relating to the financial statements of the Savings Plan for the Employees of Albemarle Corporation, which appears in this Form 11-K. PricewaterhouseCoopers LLP Richmond, Virginia June 30, 1999