U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-30270
Crompton Corporation
(Exact name of registrant as specified in its charter)
Delaware 52-2183153
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One American Lane
Greenwich, Connecticut 06831-2559
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(203)552-2000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $0.01 par value New York 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
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such 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. [ ]
The aggregate market value of the voting stock held by non-
affiliates of the registrant, computed as of March 1, 2002, was
$1,108,911,813.
The number of shares of Common Stock of the registrant
outstanding as of March 1, 2002, was 113,188,090.
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Stockholders for fiscal year
ended December 31, 2001 ........ Parts I, II and IV
Proxy Statement for Annual Meeting of
Stockholders on April 30, 2002 ........ Part III
Page
PART I
Item 1. Business 1
Polymer Products 2
Specialty Products 6
Item 2. Properties 14
Item 3. Legal Proceedings 15
Item 4. Submission of Matters to a Vote of
Security Holders 17
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters 17
Item 6. Selected Financial Data 17
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 18
Item 7A. Quantitative and Qualitative Disclosures about
Market Risk 18
Item 8. Financial Statements and Supplementary Data 18
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 18
PART III
Item 10. Directors and Executive Officers of the
Registrant 18
Item 11. Executive Compensation 20
Item 12. Security Ownership of Certain Beneficial Owners
and Management 21
Item 13. Certain Relationships and Related Transactions 21
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K 21
PART I
ITEM 1. BUSINESS
(a) General Development of Business
Crompton Corporation (together with its consolidated
subsidiaries, the "Corporation" or "Registrant"), formerly known as CK
Witco Corporation, was incorporated in Delaware in 1999 in connection
with the merger of Crompton & Knowles Corporation and Witco
Corporation on September 1, 1999 (the "Merger").
Crompton & Knowles Corporation ("Crompton & Knowles") was
incorporated in Massachusetts in 1900. Crompton & Knowles engaged in
the manufacture and sale of specialty chemicals beginning in 1954 and,
beginning in 1961, in the manufacture and sale of polymer processing
equipment. Crompton & Knowles substantially expanded both its
specialty chemical and its polymer processing equipment businesses
through a number of acquisitions in both the United States and Europe,
including the acquisition in 1996 of Uniroyal Chemical Company, Inc.,
("Uniroyal") a multinational manufacturer of performance chemicals,
including rubber chemicals and additives for plastics and lubricants,
crop protection chemicals, and polymers, which include Royalene(R) EPDM
rubber, Paracril(R) nitrile rubber and Adiprene(R)/Vibrathane(R)
urethane prepolymers.
Witco Corporation ("Witco") was incorporated in Delaware in 1958
as Witco Chemical Company, Inc., at which time it succeeded by merger
to the business of Witco Chemical Company, an Illinois corporation
formed in 1920. Witco was a global manufacturer and marketer of
specialty chemical products for use in a wide variety of industrial
and consumer applications. In 1995, Witco acquired OSi Specialties
Holding Company, an entity engaged in the manufacture of silicone
surfactants, organofunctional silanes, specialty fluids and amine
catalysts with manufacturing and blending facilities throughout the
world. In 1998, Witco acquired Ciba Specialty Chemicals Inc.'s
("Ciba") worldwide polyvinyl chloride heat stabilizers business and
related assets and Ciba acquired Witco's global epoxy systems and
adhesives business and related assets.
In December 2001, the Corporation sold its industrial colors
business to Sensient Technologies Corporation. Also in December 2001,
the Corporation sold its interest in a 40,000 metric ton nitrile
rubber plant in Altamira, Mexico to its joint venture partner, GIRSA
S.A. de C.V. ("GIRSA"). In July 2001, the Corporation announced a
restructuring plan designed to yield $60 million in cost improvements
by the end of 2002 through plant closures and workforce reductions.
The manufacturing facilities that will close are those in Naugatuck,
CT; Edison, NJ; Newark, NJ; Nutley, NJ; Reading, PA; Huddersfield,
United Kingdom; and Luton, United Kingdom. In October 2001, the
Corporation announced the relocation of its corporate headquarters to
its facility in Middlebury, CT. The move is anticipated to be
completed during the second half of 2002.
(b) Financial Information About Industry Segments
Information as to the sales, operating profit, depreciation and
amortization, assets and capital expenditures attributable to each of
the Corporation's business segments during each of its last three
fiscal years is set forth in the Notes to Consolidated Financial
Statements on pages 34 and 35 of the Corporation's 2001 Annual Report
to Stockholders, and such information is incorporated herein by
reference.
The Corporation's businesses are grouped into two units, "Polymer
Products" and "Specialty Products." Polymer Products consists of
separate reporting segments for Polymer Additives (plastic additives,
rubber chemicals and urethane chemicals), Polymers (EPDM, urethanes
and nitrile joint venture) and Polymer Processing Equipment (Davis-
Standard). Specialty Products consists of separate reporting segments
for OrganoSilicones (silanes and specialty silicones), Crop Protection
(specialty actives, industrial surfactants and Gustafson Joint
Venture) and Other (petroleum additives, refined products, industrial
colors and glycerine/fatty acids).
(c) Narrative Description of Business
Products and Services
The Corporation manufactures and markets a wide variety of
polymer and specialty products. Most of the Corporation's products
are sold to industrial customers for use as additives, ingredients or
intermediates that impart particular characteristics to the customers'
end products. The Corporation's products are currently marketed in
more than 120 countries and serve a wide variety of end use markets
including tires, agriculture, automobiles, textiles, plastics,
lubricants, petrochemicals, leather, construction, recreation, mining,
paper, packaging, home furnishings, personal care and appliances. The
principal products and services offered by the Corporation are
described below.
POLYMER PRODUCTS
Polymer Additives
The Polymer Additives business supplies a number of specialty
chemicals to the plastics, rubber and coatings/adhesives industries.
The Polymer Additives business had net sales for fiscal 2001 of $878.6
million.
Plastic Additives
The Corporation is a global leader in supplying a broad line of
additives to the plastics industry. These additives are often
specially developed and formulated for a customer's specific
manufacturing requirements. The Corporation manufactures stabilizers,
lubricants, plasticizers and peroxide catalysts, and markets UV
stabilizers and antistats, which are used in the manufacture of PVC
resins and compounds for applications such as pipes, fittings, siding,
flooring, window profiles and packaging materials. In addition, the
Corporation is a manufacturer and supplier of polymerization
inhibitors, polymerization catalysts and initiators, antioxidants,
lubricants, chemical foaming agents, polymer modifiers and chemical
intermediates as additives for the olefins and styrenics industries
for use in the manufacture of resins and compounds that are employed
in a broad spectrum of applications used in packaging, automobiles,
construction, furniture and appliances. The Corporation also produces
organotin compounds for the production of PVC stabilizers, biocides
for commercial marine paints and industrial wood preservatives, and
pharmaceuticals, and for use as a catalyst in the production of
polymers and in certain glass applications.
Net sales of plastic additives during fiscal 2001, 2000 and 1999
were 19.5%, 19.0% and 14.2% of the Corporation's net sales,
respectively.
Rubber Chemicals
This product line of the Polymer Additives business contains over
100 different chemicals for use in processing rubber. These products
include accelerators, antioxidants, antiozonants, chemical foaming
agents and specialty waxes. Accelerators are used for curing natural
and synthetic rubber, and have a wide range of activation
temperatures, curing ranges and use forms. Antiozonants protect
rubber compounds from flex cracking and ozone, oxygen and heat
degradation. Antioxidants provide rubber compounds with protection
against oxygen, light and heat. Foaming agents produce gas by thermal
decomposition or via a chemical reaction with other components of a
polymer system and are mixed with rubber to produce sponge rubber
products. Waxes inhibit static atmospheric ozone cracking in rubber.
Tire manufacturers accounted for approximately 57% of the
Corporation's rubber chemical sales in fiscal 2001, with the balance
of such sales going to industrial rubber goods, which includes
numerous manufacturers of hoses, belting, sponge and a wide variety of
other engineered rubber products. The Corporation believes it is one
of the three largest producers of rubber chemicals in the world.
Net sales of rubber chemicals during fiscal 2001, 2000 and 1999
were 7.6%, 8.6% and 12.7% of the Corporation's net sales,
respectively.
Urethane Chemicals
The Urethane Chemicals business is comprised of three product
groupings that offer technologically advanced materials to a diverse
and global customer base: Fomrez(R) saturated polyester
polyols, Witcobond(R) polyurethane dispersions, and Witcothane(R)
Polyurethane systems. Polyester polyols are employed in industrial
applications such as flexible foam for seating, thermoplastic
urethanes for structural parts, adhesives and coatings. The
polyurethane dispersions are sold to a larger and more diverse
customer base primarily for coating applications such as flooring,
fiberglass sizing and textiles. The polyurethane systems business,
which supplies products primarily for use by the shoe sole industry,
is a highly service intensive business.
Baxenden Chemicals Limited, the Corporation's 53.5% owned
subsidiary (Croda Inc. owns 46.5%), is engaged in the manufacture and
marketing of isocyanate derivatives, polyester polyols and specialty
polymer systems used in a wide range of applications. The major
markets served by Baxenden are automotive, construction, surface
coatings, leather and textile finishing. Sub-markets include
coatings, adhesives, sealants, elastomers and insulation for the above
markets. Baxenden is focused on specialty polymer and resin chemistry
and novel curing mechanisms for such polymers. The core technology is
urethane and acrylic chemistry and also includes novel polyesters and
esterification processes.
Polymer additives are sold through a specialized sales force,
including technical service professionals who address customer
inquiries and problems. The technical service professionals generally
have degrees in chemistry and/or chemical engineering and are
knowledgeable in specific product application fields. The sales and
technical service professionals identify and focus on customers'
growth opportunities, working not only with the customers'
headquarters staff, but also with their research and development and
manufacturing personnel on a worldwide basis.
Polymers
The Polymers business, which had net sales for fiscal 2001 of
$288.7 million, has three principal product lines:
Adiprene(R)/Vibrathane(R) urethane prepolymers, Royalene(R) EPDM
Rubber and Paracril(R) nitrile rubber.
Urethanes
The Corporation believes that it is the leading manufacturer of
high performance liquid castable urethane prepolymers in the world.
Among the most common applications using these prepolymers are solid
industrial tires, printing rollers, industrial rolls,
abrasion-resistant mining products such as chutes, hoppers and slurry
transport systems, mechanical goods and a variety of sports equipment
and other consumer items. The Corporation competes effectively in
this business by providing efficient customer service and technical
assistance through a highly regarded technical service staff and a
proven ability to develop new products and technologies for its
customers. Over 150 grades of urethane prepolymers are commercially
available from the Corporation.
Adiprene(R)/Vibrathane(R) urethane prepolymers are sold directly
by a dedicated sales force in the United States, Canada and Australia
and through direct sales distributorships in Europe, Latin America and
the Far East. Adiprene(R)/Vibrathane(R) customers are serviced
worldwide by a dedicated technical staff. Technical service personnel
support field sales, while a research and development staff is
dedicated to support new product and process development to meet
rapidly changing customer needs. Technical support is a critical
component of the product offering.
EPDM
Ethylene-propylene-diene rubber ("EPDM") is commonly known as
"crackless rubber" because of its ability to withstand sunlight and
ozone without cracking. EPDM's application end uses include various
automobile components, single-ply roofing, hoses, electrical
insulation, tire sidewalls, mechanical seals and gaskets, oil
additives and plastic modifiers. The Corporation produces and markets
more than 30 different EPDM polymer variations.
The Corporation believes it is one of the three largest suppliers
of EPDM polymers in the world, and the largest North American producer
of EPDM. The Corporation's success in this business has been due to
several factors, including product performance, low cost
manufacturing, customized products, and outstanding technical and
customer service supported by a highly qualified staff of technical
service specialists with extensive field and rubber processing
experience, which have earned the Corporation a reputation for
excellence and strong customer loyalty.
Royalene(R) products are primarily sold through a dedicated sales
force; however, in certain geographic areas outside the United States,
Royalene(R) products are sold through distributors.
Nitrile Rubber
In December 2001, the Corporation sold its interest in
ParaTec S.A. de C.V. ("ParaTec") to its joint venture partner,
GIRSA. The Corporation will continue to market certain nitrile
rubber products for ParaTec during 2002.
Polymer Processing Equipment
The Corporation's wholly owned subsidiary, Davis-Standard
Corporation, manufactures and sells polymer processing equipment,
which includes extruders, electronic controls, and integrated
extrusion systems, and offers specialized service and modernization
programs for in-place polymer processing systems. The polymer
processing equipment business had net sales for fiscal 2001 of $202.7
million.
Integrated polymer processing systems, which include extruders in
combination with controls and other equipment, are used to process
polymers into various products such as plastic sheet and profiles used
in appliances, automobiles, home construction, and furniture;
extruded shapes used as house siding, furniture trim, and substitutes
for wood molding; and cast and blown film used to package many
consumer products. Integrated extrusion systems are also used to
compound engineered polymers, to recycle and reclaim plastics, to coat
paper, cardboard and other materials used as packaging, and to apply
plastic or rubber insulation to power cables for electrical utilities
and to wire for the communications, construction, automotive, and
appliance industries. Industrial blow molding equipment produced by
the Corporation is sold to manufacturers of non-disposable plastic
items such as tool cases and beverage coolers.
The Corporation is a leading producer of polymer processing
equipment for the polymers industry and competes with domestic and
foreign producers of such products. The Corporation is one of a
number of producers of this type of polymer processing machinery.
In the United States, most of the Corporation's sales of polymer
processing equipment are made by its own dedicated sales force. In
other parts of the world, and for export sales from the United States,
the Corporation's sales of such equipment are made largely through
agents.
SPECIALTY PRODUCTS
OrganoSilicones
The OrganoSilicones business manufactures and sells over 500
silicone-based chemical intermediate products to manufacturers of
fiberglass, reinforced plastics, polyurethane foam, textiles,
coatings, automotive components, adhesives, rubber, pharmaceuticals,
thermoplastics, sealants and electrical products throughout the world.
The OrganoSilicones business had net sales for fiscal 2001 of $432.3
million.
Regardless of form, most silicones share a combination of
properties, including electrical resistance, ability to maintain
performance across a broad range of temperatures, resistance to aging,
water repellence, lubricating characteristics and relative chemical
and physical inertness. The versatility of silicone-based
intermediates has led to a wide variety of applications across a broad
spectrum of industries in all major countries.
Silanes
The Corporation is the world's largest producer of
organofunctional silanes. Depending on their major organofunctional
group (amino, epoxy, methacryl, sulfur, vinyl, etc.), silanes can act
as coupling agents or cross-linkers. As a coupling agent, they have
the unique ability to bond organic materials to inorganic materials
and are used in a variety of end use products, including fiberglass,
rubber and adhesive sealants. As cross-linkers, silanes have become
the standard in the manufacture of thermoplastics where they promote
the cross-linking of polyolefins in applications such as wire and
cable.
There continue to be opportunities for silanes in the tire
industry, especially in Europe where there has been a growing demand
for sulfur-functional silanes, which are necessary when silica is used
in place of carbon black in tire tread. Silica-tires, or
"greentyres," provide improved handling, safety and other
environmental benefits by lowering fuel consumption.
Specialty Silicones
Silicone fluids have several distinctive properties, which
include chemical and physical inertness, good low-temperature
performance, high compressibility, low-surface tension, stable
viscosity with a change in the temperature or rate of shear, and
thermal and oxidative stability. In addition to allowing these
products to bond with various materials, these properties also offer
improved antistatic, lubricity, and water-repellency performance.
With these distinctive properties, silicone fluids serve a variety of
end markets including the textile market where silicone fluids serve
as textile softeners and wetting modifiers; the personal care market
for hair and skin care products; the pharmaceutical market where they
serve as a protective barrier in creams and lotions; the paper and
pulp industry where they act as antifoams, surfactants, or release
agents; and the automotive and furniture industries where silicone
fluids are used in polishes and coatings because of their low-surface
tension, lubricating properties, and water repellency.
In the early 1950's the OrganoSilicones business (while part of
Union Carbide Corporation) invented the use of silicone surfactants in
the manufacture of urethane foam. This fundamental technological
advance facilitated a lower-cost, continuous manufacturing method,
resulting in accelerated growth in the urethane foam industry. The
largest end markets for urethane additives are flexible, molded and
rigid polyurethane foams in which urethane additives are used to
control cell size and stabilize the foam.
The Corporation markets its OrganoSilicone products worldwide
primarily directly through its own sales force.
Crop Protection
The Crop Protection business manufactures and markets a wide
variety of agricultural chemicals for many major food crops, including
grains, fruits, nuts and vegetables, and many non-food crops, such as
tobacco, cotton, turf, flax and ornamental plants. The business
focuses its efforts mainly on products used on high-value cash crops,
such as ornamentals, nuts, citrus and tree and vine fruits as opposed
to commodity crops such as soybeans and corn. The Crop Protection
business had net sales for fiscal 2001 of $411.3 million.
Specialty Actives
The Specialty Actives business offers four major crop protection
chemical product lines: fungicides; miticides and insecticides;
growth regulants; and herbicides. Each product line is composed of
numerous formulations for specific crops and geographic regions.
The Corporation has a substantial presence in its targeted
segments of the agrichemicals market due to its strategy of focusing
research, product development, and sales and marketing on highly
profitable market niches that are less sensitive to competitive
pricing pressures than commodity segments of the market. While the
products of the Specialty Actives business represent a relatively
small percentage of the grower's overall costs, these products are
often critical to the success or failure of the crops being treated.
In addition, product line extensions, attention to application
effectiveness and customer service are important factors in developing
strong customer loyalty.
In Australia, the Corporation's subsidiary, Hannaford Seedmaster
Services Pty. Ltd., provides seed treatment chemicals and treating
services to the local market as well as agricultural chemicals for
various crop and non-crop uses.
The Crop Protection business, under the Uniroyal name, promotes
seed treatment chemicals in all regions of the world other than North
America and Australia, and enjoys a substantial position in the
international seed treatment market. The Corporation anticipates
continuing growth in seed treatment, which is environmentally
attractive because it involves very localized use of agricultural
chemicals and very low use rates compared to broad foliar or soil
treatment.
The Crop Protection business markets its products in North
America through a direct sales force selling to a distribution network
consisting of more than one hundred distributors and direct customers.
In the international market, the Crop Protection business' direct
sales force services over 300 distributors, dealers and agents.
Net sales of specialty actives during fiscal 2001, 2000 and 1999
were 9.0%, 7.9% and 11.9% of the Corporation's net sales,
respectively.
Industrial Surfactants
The Corporation's Industrial Surfactants business manufactures
and sells a broad line of non-ionic and anionic surfactants to a range
of industries, primarily agriculture, oil field, emulsion (water
based) polymers, paints and coatings and, to a lesser extent,
personal care, soap, detergent, and textile markets. Surfactants
change the surface tension (spreadability) of liquids. In
agricultural applications, surfactants separate pesticides into small
particles, thereby increasing their efficiency via dispersion and
penetration. In the oil field, surfactants are used as demulsifiers
that aid in the clean separation of oil from water.
Gustafson Joint Venture
In November 1998, the Corporation formed joint ventures with
Bayer Corporation to serve the agricultural seed treatment markets in
North America based on Gustafson, Inc. ("Gustafson"), formerly a
wholly owned subsidiary, which is a leading producer of seed treatment
formulations and equipment. Bayer acquired a 50 percent interest in
the Gustafson seed treatment business.
Gustafson has a leading share of the North American commercial
seed treatment formulation market and is recognized as a technological
leader in this market. Gustafson is engaged directly and through
cooperative ventures in developing and formulating seed treatment
systems, offering a broad line of chemical formulations which contain
fungicides, insecticides and seed conditioning aids in addition to
commercial seed treating equipment. Gustafson's expertise enables it
to develop and produce formulations consisting of multiple components
to obtain optimum efficacy against seed and soil disease pathogens and
insects.
For the last several years, Gustafson has maintained a
developmental program in the field of naturally occurring biological
control agents targeted for disease. Gustafson has focused its
efforts on naturally occurring organisms as opposed to genetically
engineered organisms.
Other
The other businesses of the Corporation, with net sales for
fiscal 2001 of $519.0 million, included four principal product lines:
Petroleum Additives, Refined Products, Industrial Colors and
Glycerine/Fatty Acids. The Industrial Colors business was sold to
Sensient Technologies Corporation in December 2001.
Petroleum Additives
The Corporation is a global manufacturer and marketer of high-
performance additive components used in transport and industrial
lubricant applications. The component product line includes Hybase(R)
overbased calcium sulfonates and Lobase(R) neutral calcium sulfonates
used in motor oils and marine lubricants. These sulfonates are oil
soluble surfactants and their properties include detergency and
corrosion protection to help lubricants keep car, truck and ship
engines clean with minimal wear. Also in the product line are barium
and sodium sulfonates which provide corrosion protection and
emulsification in metalworking fluids. Other key products are the
Naugalube(R) antioxidants widely used by the Corporation's customers in
engine oils, gear oils, industrial oils and greases and Synton(R) high
viscosity poly alpha olefins (PAO) used in the production of synthetic
lubricants for automotive, aviation and industrial applications (e.g.
compressor oils and gear oils). Products under development include
new friction modifiers and antiwear additives to meet customers'
performance requirements in automotive applications.
Refined Products
The Refined Products business is engaged in the manufacture and
marketing of a wide range of high purity hydrocarbon products,
including white oils and ink oils, petrolatums, microcrystalline
waxes, cable compounds, and refrigeration oils and compressor
lubricants, serving numerous global markets predominantly requiring
food grade quality. The business' products serve as lubricants,
emollients, moisture barriers, plasticizers and carriers and are
characterized by their chemical inertness and high quality. Refined
Products are used in four major market segments: polymers (including
polystyrene, polyolefin, thermoplastic elastomers and PVC
applications), personal care, refrigeration oils and
telecommunication cables, as well as additional minor markets.
In 1998, Petro-Canada Lubricants of Mississauga, Ontario, Canada,
became Refined Products' supplier for most grades of paraffinic white
oils used in certain applications and Refined Products became Petro-
Canada's exclusive distributor of these white oils in North America,
Latin America and Asia Pacific. The Refined Products sales, marketing
and distribution organization services Refined Products' and Petro-
Canada's paraffinic white mineral oil customers for a variety of
applications.
Glycerine/Fatty Acids
The Corporation is a producer of fatty acids, glycerine as a co-
product, and derivatives of fatty acids (esters, stearates and amides
(purchased for resale)). These products modify surfaces either as
direct lubricants or emulsifiers or as intermediates for ingredients
that modify surfaces. Fatty acids are carboxylic acids derived from
or contained in animal fat or vegetable oil. Examples of diverse
applications of fatty acids include their use as lubricants in
polymers (rubber and plastic); their use as components of personal
care products such as soaps, creams and lotions; and their use as
release agents or components of curing systems for rubber.
Glycerine is used to improve smoothness, provide lubrication, or
maintain moisture in suppositories, cough syrups, elixirs and
expectorants in medical and pharmaceutical applications. Glycerine is
also used as a lubricant and solvent in personal care products
including toothpastes, products for hair and skin care, soaps and
mouthwashes.
The Corporation markets its petroleum additives, refined products
and glycerine/fatty acids worldwide primarily directly through its own
sales force.
* * *
Sources of Raw Materials
Chemicals, steel, castings, parts, machine components and other
raw materials required in the manufacture of the Corporation's
products are generally available from a number of sources, some of
which are foreign. The Corporation also uses significant amounts of
petrochemical feedstocks in many of its chemical manufacturing
processes. Large increases in the cost of petrochemical feedstocks or
other raw materials could adversely affect the Corporation's operating
margins. While temporary shortages of raw materials used by the
Corporation may occur occasionally, such raw materials are currently
readily available. However, their continuing availability and price
are subject to domestic and world market and political conditions and
regulations. Major requirements for key raw materials are typically
purchased pursuant to multi-year contracts. The Corporation is not
dependent on any one supplier for a material amount of its raw
material requirements; however, the OrganoSilicones business
purchases, in the aggregate, approximately 50% of its raw materials
from Dow Corning Corporation and The Dow Chemical Company under
various long-term agreements, which expire at various times through
2010.
The Corporation holds a 50% interest in Rubicon Inc. ("Rubicon"),
a manufacturing joint venture between Uniroyal and Huntsman
Corporation, located in Geismar, Louisiana, which supplies both
Huntsman and the Corporation with aniline, and the Corporation with
diphenylamine ("DPA"). The Corporation believes that its aniline and
DPA needs in the foreseeable future will be met by production from
Rubicon.
Patents and Licenses
The Corporation has over 3,500 United States and foreign patents
and pending applications and has trademark protection for
approximately 700 product names. Patents, trade names, trademarks,
know-how, trade secrets, formulae, and manufacturing techniques
assist in maintaining the competitive position of certain of the
Corporation's products. Patents, formulae, and know-how are of
particular importance in the manufacture of a number of specialty
chemicals manufactured and sold by the Corporation, and patents and
know-how are also significant in the manufacture of certain wire
insulating and polymer processing machinery product lines. The
Corporation is licensed to use certain patents and technology owned
by other companies, including some foreign companies, to manufacture
products complementary to its own products, for which it pays
royalties in amounts not considered material to the consolidated
results of the enterprise. Products to which the Corporation has such
rights include certain crop protection chemicals and polymer
processing machinery.
While the existence of a patent is prima facie evidence of its
validity, the Corporation cannot assure that any of its patents will
not be challenged nor can it predict the outcome of any such
challenge. The Corporation believes that no single patent, trademark,
or other individual right is of such importance, however, that
expiration or termination thereof would materially affect its
business.
Seasonal Business
With the exception of the Crop Protection business, the sales of
which are influenced by agricultural growing seasons, no material
portion of any segment of the business of the Corporation is seasonal.
Customers
With the exception of a single customer which accounted for
approximately 17% of the sales by the Crop Protection reporting
segment, the Corporation does not consider any reporting segment of
its business dependent on a single customer or a few customers, the
loss of any one or more of whom would have a material adverse effect
on the reporting segment. No one customer's business accounts for
more than ten percent of the Corporation's gross revenues nor more
than ten percent of its earnings before taxes.
Backlog
Because machinery production schedules range from about 60 days
to 10 months, backlog is significant to the Corporation's polymer
processing equipment business. Firm backlog of customers' orders for
this business at the end of 2001 totaled approximately $83 million
compared with $105 million at the end of 2000. It is expected that
most of the 2001 backlog will be shipped during 2002. Orders for
specialty chemicals and polymers are generally filled from inventory
stocks and thus are excluded from backlog.
Competitive Conditions
The Corporation is a major manufacturer of polymer products and
specialty products. Competition varies by product and by geographic
region, except that in rubber chemicals the market is fairly
concentrated. In that market, the Corporation and its two principal
competitors together account for approximately 40% of total worldwide
sales. In addition, the EPDM market is fairly concentrated. The
Corporation and its two principal competitors together account for
approximately 60% of sales within North America and approximately 50%
worldwide.
Product performance, quality, technical and customer service, and
price are all important factors in competing in the polymer product
and specialty product businesses.
Research and Development
The Corporation conducts research and development on a worldwide
basis at a number of facilities, including field stations that are
used for crop protection research and development activities.
Research and development expenditures by the Corporation totalled
$82.3 million for the year 2001, $84.6 million for the year 2000, and
$68.0 million for the year 1999.
Environmental Matters
Chemical companies are subject to extensive environmental laws
and regulations concerning, among other things, emissions to the air,
discharges to land, surface, subsurface strata and water and the
generation, handling, storage, transportation, treatment and disposal
of waste and other materials and are also subject to other federal,
state and local laws and regulations regarding health and safety
matters.
Environmental Regulation. The Corporation believes that its
business, operations and facilities have been and are being operated
in substantial compliance in all material respects with applicable
environmental and health and safety laws and regulations, many of
which provide for substantial fines and criminal sanctions for
violations. The ongoing operations of chemical manufacturing plants,
however, entail risks in these areas and there can be no assurance
that material costs or liabilities will not be incurred. In addition,
future developments, such as increasingly strict requirements of
environmental and health and safety laws and regulations and
enforcement policies thereunder, could bring into question the
handling, manufacture, use, emission or disposal of substances or
pollutants at facilities owned, used or controlled by the Corporation
or the manufacture, use or disposal of certain products or wastes by
the Corporation and could involve potentially significant
expenditures. To meet changing permitting and regulatory standards,
the Corporation may be required to make significant site or
operational modifications, potentially involving substantial
expenditures and reduction or suspension of certain operations. The
Corporation incurred $17.5 million of costs for capital projects and
$52.1 million for operating and maintenance costs related to
environmental compliance at its facilities during fiscal 2001. In
fiscal 2002, the Corporation expects to incur approximately $16.5
million of costs for capital projects and $50.9 million for operating
and maintenance costs related to environmental compliance at its
facilities. During fiscal 2001, the Corporation spent $21.3 million
to clean up previously utilized waste disposal sites and to remediate
current and past facilities. The Corporation expects to spend
approximately $18.0 million during fiscal 2002 to clean up such waste
disposal sites and current and past facilities.
Beginning in 2003, European environmental regulations will limit
the use of lead-based heat stabilizers that until now have been
essential to the manufacture of polyvinyl chloride construction pipe.
As an alternative to these lead-based products, the Corporation has
patented new technology for an organic-based, heavy metal-free
product. Capacity has been added at the Corporation's Lampertheim,
Germany plant to produce this product. In October 2001, the
International Maritime Organization passed a regulation banning the
use of TBTO in paints for ships. The regulation goes into effect one
year after 25% of the member nations representing at least 25% of the
world's shipping tonnage adopt the regulation. The Corporation
manufactures TBTO at its Bergkamen, Germany plant.
Pesticide Regulation. The Corporation's Crop Protection business
is subject to regulation under various federal, state, and foreign
laws and regulations relating to the manufacture, sales and use of
pesticide products.
In August, 1996, Congress enacted the Food Quality Protection Act
of 1996 ("FQPA"), which made significant changes to the Federal
Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), governing U.S.
sale and use of pesticide products, and the Federal Food, Drug, and
Cosmetic Act ("FFDCA"), which limits pesticide residues on food. FQPA
facilitated registrations and reregistrations of pesticides for
special (so called "minor") uses under FIFRA and authorized collection
of maintenance fees to support pesticide reregistrations.
Coordination of regulations implementing FIFRA and FFDCA is now
required. Food safety provisions of FQPA establish a single standard
of safety for pesticide residue on raw and processed foods; require
that information be provided through large food retail stores to
consumers about the health risks of pesticide residues and how to
avoid them; preempt state and local food safety laws if they are
based on concentrations of pesticide residues below recently
established federal residue limits (called "tolerances"); and ensure
that tolerances protect the health of infants and children.
FFDCA, as amended by FQPA, authorizes the EPA to set a tolerance
for a pesticide in or on food at a level which poses "a reasonable
certainty of no harm" to consumers. The EPA is required to review all
tolerances for all pesticide products by August 2006. Some of the
Corporation's products are currently under review and other products
will be reviewed under this standard in the future.
The European Commission ("EC") has established procedures whereby
all existing active ingredient pesticides will be reviewed. This EC
regulation became effective in 1993 and will result in a review of all
commercial products. The initial round of reviews covered ninety
products, four of which are the Corporation's products. Other of the
Corporation's products will be reviewed in future years and all data
from the Corporation pertaining to its products must be submitted for
review by mid-2003. The process may lead to full reregistration in
member states of the EC or may lead to some restrictions, if adverse
data is discovered.
Employees
The Corporation had approximately 7,340 employees on December 31,
2001.
Geographic Information
The information with respect to sales and property, plant and
equipment attributable to each of the major geographic areas served by
the Corporation for each of the Corporation's last three fiscal years,
set forth in the Notes to Consolidated Financial Statements on page 35
of the Corporation's 2001 Annual Report to Stockholders, is
incorporated herein by reference.
The Corporation considers that the risks relating to operations
of its foreign subsidiaries are comparable to those of other U.S.
companies which operate subsidiaries in developed countries. All of
the Corporation's international operations are subject to fluctuations
in the relative values of the currencies in the various countries in
which its activities are conducted.
ITEM 2. PROPERTIES
The following table sets forth information as to the principal
operating properties and other significant properties of the
Corporation and its subsidiaries. All properties are owned in fee
except where otherwise indicated:
Location Facility Products/Businesses
UNITED STATES
Alabama
Bay Minette Plant Polymer Additives
Connecticut
Bethany Research Center Crop
Greenwich Corporate Offices* Corporate Headquarters
Middlebury Corporate Offices,
Research Center* Corporate Headquarters
Naugatuck Plant, Research Center Crop, Polymer Additives,
Polymers, Other
Pawcatuck Office, Plant,
Laboratory, Crop, Polymer Additives, Other
Machine Shop, Tech
Center Polymer Processing Equipment
Illinois
Mapleton Plant Polymer Additives
Louisiana
Geismar Plant Crop, Polymer Additives,
Polymers, Other
Taft Plant Polymer Additives
Gretna Plant Other
New Jersey
Perth Amboy Plant Other
Somerville Office, Plant,
Machine Shop Polymer Processing Equipment
New York
Tarrytown Research Center* Polymer Additives,
OrganoSilicones, Other
North Carolina
Gastonia Plant Crop, Polymers
Ohio
Dublin Research Center Crop, Other
Pennsylvania
Petrolia Plant Other
Tennessee
Memphis Plant Polymer Additives, Other
Texas
Fort Worth Plant Crop
Houston Plant Crop, Polymer Additives,
Other
Marshall Plant Polymer Additives
West Virginia
Sistersville Plant OrganoSilicones
South Charleston Administrative,
Research, Sales
Office* OrganoSilicones
INTERNATIONAL
Australia
Regency Park,
S.A. Office, Machine Shop* Crop
Seven Hills Office, Laboratory* Polymers
Belgium
Antwerp Plant* OrganoSilicones
Brussels Office* Crop, Polymer
Additives, Polymers,
Other
Brazil
Itatiba Plant OrganoSilicones
Rio Claro Plant Crop, Polymer
Additives, Polymers
Canada
Elmira Plant Crop, Polymer
Additives, Polymers,
Other
Guelph Research Center Crop, Polymer
Additives, Polymers,
Other
Scarborough Plant* Other
West Hill Plant Other
France
Dannemarie Office Polymer Processing Equipment
Germany
Bergkamen Plant* Polymer Additives
Erkrath Office, Plant,
Machine Shop,
Laboratory Polymer Processing Equipment
Haan Office and Machine
Shop Polymer Processing Equipment
Lampertheim Plant Polymer Additives
Italy
Latina Plant Crop, Polymer Additives,
Polymers, Other
Termoli Plant OrganoSilicones
Korea
Ansan Plant Polymer Additives,
OrganoSilicones
Mexico
Altamira Plant Polymer Additives, Other
Cuatitlan Plant Polymer Additives,
OrganoSilicones
The Netherlands
Ankerwag Plant Crop
Amsterdam Plant Other
Haarlem Plant Other
Koog aan de Zaan Plant Other
Republic of China
Kaohsiung Plant** Polymer Additives, Other
Singapore Plant Crop
Singapore Administrative,
Research, Sales
Office* Crop, Polymer Additives,
Polymers, OrganoSilicones,
Other
Switzerland
Meyrin Administrative,
Research, Sales
Office* Crop, Polymer Additives,
OrganoSilicones, Other
Thailand
Mapthaphut Plant* Polymer Additives,
OrganoSilicones
United Kingdom
Accrington Plant*** Polymer Additives
Birmingham Office, Plant,
Machine Shop Polymer Processing
Equipment
Droitwich Plant*** Polymer Additives
Evesham Research Center Crop
Langley Office* Crop, Polymer Additives,
Polymers, Other
____________________________
* Facility leased by the Corporation.
** Facility owned by Uniroyal Chemical Taiwan Ltd., which is 80%
owned by Uniroyal.
*** Facility owned by Baxenden Chemicals Limited, which is 53.5%
owned by the Corporation.
All facilities are considered to be in good operating condition, well
maintained, and suitable for the Corporation's requirements.
ITEM 3. LEGAL PROCEEDINGS
The Corporation is involved in claims, litigation, administrative
proceedings and investigations of various types in a number of
jurisdictions. A number of such matters involve claims for a material
amount of damages and relate to or allege environmental liabilities,
including clean-up costs associated with hazardous waste disposal
sites, natural resource damages, property damage and personal injury.
Environmental Liabilities. Each quarter, the Corporation
evaluates and reviews estimates for future remediation and other costs
to determine appropriate environmental reserve amounts. For each
site, a determination is made of the specific measures that are
believed to be required to remediate the site, the estimated total
cost to carry out the remediation plan, the portion of the total
remediation costs to be borne by the Corporation and the anticipated
time frame over which payments toward the remediation plan will occur.
The total amount accrued for such environmental liabilities at
December 31, 2001, was $145 million. The Corporation estimates the
potential liabilities to range from $120 million to $160 million at
December 31, 2001. It is reasonably possible that the Corporation's
estimates for environmental remediation liabilities may change in the
future should additional sites be identified, further remediation
measures be required or undertaken, the interpretation of current laws
and regulations be modified or additional environmental laws and
regulations be enacted.
The Corporation and some of its subsidiaries have been identified
by federal, state or local governmental agencies, and by other
potentially responsible parties (a "PRP") under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, or comparable state statutes, as a PRP with respect to costs
associated with waste disposal sites at various locations in the
United States. Because these regulations have been construed to
authorize joint and several liability, the EPA could seek to recover
all costs involving a waste disposal site from any one of the PRP's
for such site, including the Corporation, despite the involvement of
other PRP's. In many cases, the Corporation is one of several hundred
PRPs so identified. In a few instances, the Corporation is one of
only a handful of PRP's. In certain instances, a number of other
financially responsible PRP's are also involved, and the Corporation
expects that any ultimate liability resulting from such matters will
be apportioned between the Corporation and such other parties. In
addition, the Corporation is involved with environmental remediation
and compliance activities at some of its current and former sites in
the United States and abroad. The more significant of these matters
are described below.
.. Laurel Park -The EPA, the State of Connecticut, and the Laurel
Park Coalition (consisting of Uniroyal and a number of other parties)
have entered into a Consent Decree governing the design and
implementation of the selected remedy for the Laurel Park site.
Remedial construction began at the Laurel Park site in July 1996, and
was completed in 1998. Operation and maintenance activities at the
site are ongoing.
Litigation brought by the Laurel Park Coalition seeking
contribution to the costs from the owner/operators of the site and
later from other identified generator parties has resulted in
substantial recoveries from a number of parties. In December 2000 and
January 2001, the United States District Court for the District of
Connecticut issued final judgment allowing recovery against various
municipalities by the Laurel Park Coalition in the aggregate amount
of approximately $1,044,000, and declaring that the defendants at the
Laurel Park site are liable for certain stated percentages of future
response costs. As a result of a settlement with one municipality,
the aggregate amount of the outstanding judgment has been reduced to
approximately $761,000. Appeals and cross-appeals have been filed
with the Second Circuit by various parties to the litigation.
.. Vertac - Uniroyal and its Canadian subsidiary, Uniroyal Chemical
Co./Cie (formerly known as Uniroyal Chemical Ltd./Ltee) were joined
with others as defendants in consolidated civil actions brought in the
United States District Court, Eastern District of Arkansas, Western
Division ("Court") by the United States of America, the State of
Arkansas and Hercules Incorporated ("Hercules"), relating to a Vertac
Chemical Corporation site in Jacksonville, Arkansas. Uniroyal has
been dismissed from the litigation. On May 21, 1997, the Court
entered an order finding that Uniroyal Chemical Co./Cie is jointly and
severally liable to the United States, and finding that Hercules and
Uniroyal Chemical Co./Cie are liable to each other in contribution.
On October 23, 1998, the Court entered an order granting the United
States' motion for summary judgment against Uniroyal Chemical Co./Cie
and Hercules as to the amount of its claimed removal and remediation
costs of $102.9 million at the Vertac site. Trial on the allocation
of these costs as between Uniroyal Chemical Co./Cie and Hercules was
concluded on November 6, 1998, and on February 3, 2000, the Court
entered an Order finding Uniroyal Chemical Co./Cie liable to the
United States for approximately $2,300,000 and liable to Hercules in
contribution for approximately $700,000. On April 10, 2001, the
United States Court of Appeals for the Eighth Circuit ("Appeals
Court") (i) reversed a decision in favor of the United States and
against Hercules with regard to the issue of divisibility of harm and
remanded the case back to the Court for a trial on the issue; (ii)
affirmed the finding of arranger liability against Uniroyal Co./Cie;
and (iii) set aside the findings of contribution between Hercules and
Uniroyal Co./Cie by the Court pending a decision upon remand. The
Appeals Court also deferred ruling on all constitutional issues raised
by Hercules and Uniroyal Co./Cie pending subsequent findings by the
Court. On June 6, 2001, the Appeals Court denied Uniroyal Co./Cie's
petition for rehearing by the full Appeals Court on the Appeals
Court's finding of arranger liability against Uniroyal Co./Cie and on
December 10, 2001, Uniroyal Co./Cie's Petition for a Writ of
Certiorari to the United States Supreme Court with regard to the issue
of its arranger liability was denied. On December 12, 2001, the Court
concluded hearings pursuant to the April 10, 2001 remand by the
Appeals Court. A decision from the Court is expected during the
second quarter of 2002.
The Corporation intends to assert all meritorious legal defenses
and all other equitable factors which are available to it with respect
to the above matters. The Corporation believes that the resolution of
these matters will not have a material adverse effect on its
consolidated financial position. While the Corporation believes it is
unlikely, the resolution of these matters could have a material
adverse effect on its consolidated results of operations in any given
year if a significant number of these matters are resolved
unfavorably.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during
the fourth quarter of the fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The information concerning the range of market prices for the
Corporation's Common Stock on the New York Stock Exchange and the
Amount of dividends per share paid thereon during the past two
years, set forth in the Notes to Consolidated Financial
Statements on page 35 of the Corporation's 2001 Annual Report to
Stockholders, is incorporated herein by reference.
The number of registered holders of Common Stock of the
Corporation on December 31, 2001, was 6,040.
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data for the Corporation for each of its
last five fiscal years, set forth under the heading "Five Year
Selected Financial Data" on page 37 of the Corporation's 2001 Annual
Report to Stockholders, is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Management's discussion and analysis of the Corporation's
financial condition and results of operations, set forth under the
heading "Management's Discussion and Analysis of Financial Condition
and Results of Operations" on pages 9 through 16 of the Corporation's
2001 Annual Report to Stockholders, is incorporated herein by
reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk and risk management policy is summarized under the
heading "Management's Discussion and Analysis of Financial Conditions
and Results of Operations" on pages 11 and 12 of the Corporation's
2001 Annual Report to Stockholders and is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Corporation, notes thereto, and
supplementary data, appearing on pages 17 through 37 of the
Corporation's 2001 Annual Report to Stockholders, are 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 called for by this item concerning directors of the
Corporation is included in the definitive proxy statement for the
Corporation's Annual Meeting of Stockholders to be held on April 30,
2002, which is to be filed with the Commission pursuant to Regulation
14A of the Securities Exchange Act of 1934, and such information is
incorporated herein by reference.
The executive officers of the Corporation are as follows:
Vincent A. Calarco, age 59, has served as Chairman, President and
Chief Executive Officer of the Registrant since 1999. Mr. Calarco
served as President and Chief Executive Officer of Crompton & Knowles
from 1985 to 1999, and Chairman of the Board from 1986 to 1999. Mr.
Calarco has been a member of the Board of Directors of the Registrant
since 1999 and was a member of the Board of Directors of Crompton &
Knowles from 1985 to 1999.
Robert W. Ackley, age 60, has served as Executive Vice President,
Polymer Processing Equipment of the Registrant since 1999. Mr. Ackley
served as Vice President, Polymer Processing Equipment, of Crompton &
Knowles from 1998 to 1999 and as President of Davis-Standard
Corporation (prior to 1995, Davis-Standard Division) since 1983.
Peter Barna, age 58, has served as Senior Vice President and Chief
Financial Officer of the Registrant since 1999. Mr. Barna served as
Senior Vice President and Chief Financial Officer of Crompton &
Knowles in 1999 and as Vice President-Finance of Crompton & Knowles
from 1996 to 1999. Mr. Barna was the Principal Accounting Officer of
Crompton & Knowles from 1986 to 1999 and its Treasurer from 1980 to
1996.
James J. Conway, age 58, has served as Executive Vice President,
Performance Chemicals and Elastomers, of the Registrant since 1999.
Mr. Conway served as Vice President, Colors, of Crompton & Knowles
from 1998 to 1999 and President of Crompton & Knowles Colors
Incorporated since 1997. Mr. Conway was Senior Vice President and
General Manager of International Specialty Products, Inc. from 1992 to
1997.
Joseph B. Eisenberg, Ph.D., age 59, retired effective December 31,
2001. Dr. Eisenberg served as Executive Vice President, Polymer
Additives of the Registrant from 1999 to 2001, Vice President, Rubber
Chemicals, EPDM and Nitrile Rubber, of Crompton & Knowles from 1998 to
1999 and as Executive Vice President, Chemicals & Polymers, of
Uniroyal since 1994.
John T. Ferguson II, age 55, has served as Senior Vice President and
General Counsel of the Registrant since 1999 and served as Secretary
of the Registrant from 1999 to 2000. Mr. Ferguson served as Vice
President of Crompton & Knowles from 1996 to 1999, and General Counsel
and Secretary of Crompton & Knowles from 1989 to 1999. Mr. Ferguson
served as a member of the Board of Directors of the Registrant in
1999.
Gerald H. Fickenscher, age 58, has served as Regional Vice President,
Europe, Africa & Middle East of the Registrant since 1999. Mr.
Fickenscher served as President, Dyes & Chemicals International
Operations, of Crompton & Knowles from 1994 to 1999.
Mary L. Gum, PhD., age 54, has served as Executive Vice President, OSi
Specialties & Urethanes, of the Registrant since 2002. Dr. Gum served
as Executive Vice President, OSi, from 1999 to 2002; Vice President of
Silanes, OSi, from 1997 to 1999 and as Vice President of Specialty
Fluids, OSi, from 1995 to 1997.
Edward L. Hagen, age 60, has served as Senior Vice President, Strategy
& Development of the Registrant since 2001. Mr. Hagen served as
Regional Vice President-Asia/Pacific of Uniroyal from 1995 to 2001.
Marvin H. Happel, age 62, has served as Senior Vice President,
Organization & Administration of the Registrant since 1999. Mr.
Happel served as Vice President-Organization and Administration of
Crompton & Knowles from 1996 to 1999 and Vice President-Organization
from 1986 to 1996.
Alfred F. Ingulli, age 60, has served as Executive Vice President,
Crop Protection, of the Registrant from 1999. Mr. Ingulli served as
Vice President, Crop Protection, of Crompton & Knowles from 1998 to
1999 and as Executive Vice President, Crop Protection of Uniroyal
since 1994.
John R. Jepsen, age 46, has served as Vice President and Treasurer of
the Registrant since 1999. Mr. Jepsen served as Treasurer of Crompton
& Knowles from 1998 to 1999. Mr. Jepsen served with the International
Paper Company as Assistant Treasurer, International from 1996 to 1998
and, prior to that, as Director of Corporate Finance from 1986 to
1996.
Walter K. Ruck, age 59, has served as Senior Vice President,
Operations, of the Registrant since 1999. Mr. Ruck has served as Vice
President, Operations, of Uniroyal since 1998; and served as Vice
President, Manufacturing, of Uniroyal from 1997 to 1998. He served as
Regional Vice President, Americas of Uniroyal from 1995 to 1997 and
Regional Vice President of Uniroyal from 1994 to 1995.
Barry J. Shainman, age 59, has served as Secretary of the Registrant
since 2000 and has served as Assistant General Counsel of the
Registrant since 1999. Mr. Shainman served as Secretary of Uniroyal
from 1998 to 2000 and has served as Senior Corporate Counsel of
Uniroyal since 1990.
William A. Stephenson, age 54, has served as Executive Vice President,
Plastics & Petroleum Additives, of the Registrant since 2001. Mr.
Stephenson served as Executive Vice President, Urethanes and Petroleum
Additives from 1999 to 2001; Vice President, Specialty Additives and
Urethanes, of Crompton & Knowles from 1998 to 1999 and has served as
Executive Vice President, Specialties of Uniroyal since 1994.
Michael F. Vagnini, age 45, has served as Corporate Controller of the
Registrant since 1999 and as Corporate Controller of Crompton &
Knowles from 1998 to 1999. Mr. Vagnini has served as Corporate
Controller of Uniroyal since 1995.
The term of office of each of the above-named executive officers
is until the first meeting of the Board of Directors following the
next annual meeting of stockholders and until the election and
qualification of his or her successor.
There is no family relationship between any of such officers, and
there is no arrangement or understanding between any of them and any
other person pursuant to which any such officer was selected as an
officer.
ITEM 11. EXECUTIVE COMPENSATION
Information called for by this item is included in the definitive
proxy statement for the Corporation's Annual Meeting of Stockholders
to be held on April 30, 2002, which is to be filed with the Commission
pursuant to Regulation 14A, and such information is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information called for by this item is included in the definitive
proxy statement for the Corporation's Annual Meeting of Stockholders
to be held on April 30, 2002, which is to be filed with the Commission
pursuant to Regulation 14A, and such information is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information called for by this item is included in the definitive
proxy statement for the Corporation's Annual Meeting of Stockholders
to be held on April 30, 2002, which is to be filed with the Commission
pursuant to Regulation 14A, and such information is incorporated
herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K
(a) The following documents are filed as part of this report:
1. Financial statements and Independent Auditors' Report, as
required by Item 8 of this form, which appear on pages 17
through 36 of the Corporation's 2001 Annual Report to
Stockholders and are incorporated herein by reference:
(1) Consolidated Statements of Operations for the fiscal years
ended 2001, 2000, and 1999;
(ii) Consolidated Balance Sheets for the fiscal years ended
2001 and 2000;
(iii) Consolidated Statements of Cash Flows for the fiscal
years ended 2001, 2000, and 1999;
(iv) Consolidated Statements of Stockholders' Equity for the
fiscal years ended 2001, 2000 and 1999;
(v) Notes to Consolidated Financial Statements; and
(vi) Independent Auditors' Report of KPMG LLP.
2. Independent Auditors' Report and Consent, and Financial
Statement Schedule II, Valuation and Qualifying Accounts,
required by Regulation S-X. Pages S-1 and S-2 hereof.
3. The following exhibits are either filed herewith or
incorporated herein by reference to the respective reports and
registration statements identified in the parenthetical clause
following the description of the exhibit:
Exhibit No. Description
2.0 Agreement and Plan of Reorganization dated as of May 31,
1999, by and among Crompton & Knowles Corporation, Park Merger
Co. and Witco Corporation (incorporated by reference to
Appendix A to the Joint Proxy Statement-Prospectus dated July
28, 1999, as part of the Registrant's Registration Statement
on Form S-4, Registration No. 333-83901, dated July 28, 1999
("Joint Proxy Statement-Prospectus S-4 Registration
Statement")).
2.1 Amendment No. 1 to Agreement and Plan of Reorganization
dated as of July 27, 1999, by and among Crompton & Knowles
Corporation, CK Witco Corporation (formerly known as Park
Merger Co.) and Witco Corporation (incorporated by reference
to Appendix A-1 to the Joint Proxy Statement-Prospectus S-4
Registration Statement).
2.2 Agreement and Plan of Merger dated April 30, 1996, by and
among Crompton & Knowles, Tiger Merger Corp. and Uniroyal
Chemical Corporation ("UCC") (incorporated by reference to
Exhibit 2 to the Crompton & Knowles Form 10-Q for the period
ended March 31, 1996).
2.3 Acquisition Agreement dated November 29, 1999, by and among
Yorkshire Group PLC, Yorkshire Americas, Inc., as Purchasers
and CK Witco Corporation, Crompton & Knowles Europe S.P.R.L.,
Uniroyal Chemical European Holdings B.V. and Crompton &
Knowles Colors Incorporated, as Sellers (incorporated by
reference to Exhibit 2.3 of the Registrant's Form 10-K for the
fiscal year ended December 31, 1999 ("1999 Form 10-K")).
2.4 Limited Liability Company Agreement by and between
Gustafson, Inc. and Trace Chemicals, Inc., effective as of
September 23, 1998, (incorporated by reference to Exhibit 2.1
to the Crompton & Knowles Form 8-K/A dated January 21, 1999
("Form 8-K/A")).
2.5 First Amendment to Limited Liability Company Agreement by
and among GT Seed Treatment Inc. (f/k/a Gustafson, Inc.),
Ecart Inc. (f/k/a Trace Chemicals, Inc.) and Bayer
Corporation, dated as of November 20, 1998, (incorporated by
reference to Exhibit 2.2 to Form 8-K/A).
2.6 Purchase Agreement by and among the Crompton & Knowles,
Uniroyal, Trace Chemicals, Inc. and Gustafson, Inc. as
Sellers, and Bayer Corporation, as Purchaser, and Gustafson
LLC, as the Company, dated as of November 20, 1998,
(incorporated by reference to Exhibit 2.3 to Form 8-K/A).
2.7 Purchase Agreement by and between Uniroyal Chemical Co./Cie
and Bayer Inc., effective as of November 20, 1998,
(incorporated by reference to Exhibit 2.4 to Form 8-K/A).
2.8 Partnership Agreement of Gustafson Partnership by and
between Uniroyal Chemical Co./Cie and Bayer Inc., effective as
of November 20, 1998, (incorporated by reference to Exhibit
2.5 to Form 8-K/A).
2.9 Joint Venture Agreement and Shareholders Agreement dated
September 18, 1998, by and between Uniroyal and GIRSA S.A. de
C.V. (incorporated by reference to Exhibit 2.6 to the
Crompton & Knowles Form 10-K for the fiscal year ended
December 26, 1998 ("1998 Form 10-K")).
2.10 Stock Purchase Agreement dated as of December 8, 1998, by
and among Crompton & Knowles and Ingredient Technology
Corporation, as Sellers, and Chr. Hansen Inc., as Purchaser
(incorporated by reference to Exhibit 2.7 to the 1998 Form 10-
K).
3(i)(a)Amended and Restated Certificate of Incorporation of the
Registrant dated September 1, 1999 (filed herewith*).
3(i)(b)Certificate of Amendment of Amended and Restated
Certificate of Incorporation of the Registrant dated April
27, 2000 (filed herewith*).
3(i)(c)Certificate of Change of Location of Registered Office and
of Registered Agent dated May 18, 2000 (filed herewith*).
3(ii) By-laws of the Registrant (filed herewith*).
4.1 Rights Agreement dated as of September 2, 1999, by and
between the Registrant and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent (incorporated by reference to Form
8-A dated September 28, 1999).
4.2 Form of Indenture, dated as of February 8, 1993, among
Uniroyal and State Street Bank and Trust Company, as Trustee,
relating to the 102% Notes, including form of securities
(incorporated by reference to Exhibit 4.1 to the Registration
Statement on UCC Form S-1, Registration No. 33-45296 and 33-
45295 (AUCC Form S-1, Registration No. 33-45296/45295")).
4.3 Form of First Supplemental Indenture, dated as of December
9, 1998, among UCC, as Issuer, Uniroyal, as successor to the
Issuer, and State Street Bank and Trust Company, as Trustee,
relating to the 102% Senior Notes due 2002 (incorporated by
reference to Exhibit 4.4 to Form 10-K for the fiscal year
ended December 26, 1998).
4.4 Form of Second Supplemental Indenture, dated as of December
6, 1999, among UCC, as Issuer, Uniroyal, as successor to the
Issuer, and State Street Bank & Trust Company, as Trustee,
relating to the 10 1/2% Senior Notes due 2002 (incorporated
by reference to Exhibit 4.18 to the 1999 Form 10-K).
4.5 Form of $600 Million 364-Day Credit Agreement dated as of
October 28, 1999, by and among the Registrant, certain
subsidiaries of the Registrant, various banks, The Chase
Manhattan Bank, as Syndication Agent, Citibank, N.A., as
Administrative Agent and Bank of America, N.A. and Deutsche
Bank Securities Inc., as Co-Documentation Agents (incorporated
by reference to Exhibit 4.1 to the 10-Q for the quarter ended
September 30, 1999 ("September 30, 1999 10-Q")).
4.6 Form of $125 Million Amended and Restated 364-Day Credit
Agreement dated as of September 24, 2001, among the
Registrant, certain subsidiaries of the Registrant, various
banks, The Chase Manhattan Bank, as Syndication Agent,
Citibank, N.A., as Administrative Agent, Bank of American,
N.A., as Documentation Agent and J.P. Morgan Securities Inc.,
as Lead Arranger and Sole Bookrunner (incorporated by
reference to Exhibit 4.1 to the 10-Q for the quarter ended
September 30, 2001 ("September 30, 2000 10-Q")).
4.7 First Amendment dated as of December 21, 2001, to the
Amended and Restated 364-Day Credit Agreement dated as of
October 28, 1999, (as amended and restated in the form of the
Amended and Restated Credit Agreement as of September 24,
2001) among the Registrant, certain subsidiaries of the
Registrant, various banks, J.P. Morgan Bank (formerly known as
The Chase Manhattan Bank), as Syndication Agent, Citicorp USA,
Inc. (as successor to Citibank, N.A.), as Administrative
Agent, and Bank of America, N.A. and Deutsche Bank Alex Brown
Inc., as Co-Documentation Agents (filed herewith*).
4.8 Waiver No. 1 dated as of June 30, 2001, to the 364-Day
Credit Agreement dated as of October 28, 1999 as amended as of
October 26, 2000, among the Registrant, certain subsidiaries
of the Registrant, various banks, The Chase Manhattan Bank, as
Syndication Agent, Citibank, N.A., as Administrative Agent and
Bank of America, N.A. and Deutsche Bank Securities Inc., as Co-
Documentation Agents (incorporated by reference to Exhibit No.
4.1 to the 10-Q for the quarter ended June 30, 2001 ("June 30,
2001 10-Q")).
4.9 Form of $400 Million Five-Year Credit Agreement dated as of
October 28, 1999, by and among the Registrant, certain
subsidiaries of the Registrant, various banks, The Chase
Manhattan Bank, as Syndication Agent, Citibank, N.A., as
Administrative Agent and Bank of America, N.A. and Deutsche
Bank Securities Inc., as Co-Documentation Agents (incorporated
by reference to Exhibit 4.2 to the September 30, 1999 10-Q).
4.10 First Amendment dated as of September 24, 2001, to the Five-
Year Credit Agreement dated as of October 28, 1999, by and
among the Registrant, certain subsidiaries of the Registrant,
various banks, The Chase Manhattan Bank, as Syndication Agent,
Citibank, N.A., as Administrative Agent, Bank of America, N.A.
and Deutsche Bank Alex Brown Inc., as Co-Documentation Agents,
and J.P. Morgan Securities Inc., as Lead Arranger and Sole
Bookrunner (incorporated by reference to the September 30,
2001 10-Q).
4.11 Second Amendment dated as of December 21, 2001, to the Five-
Year Credit Agreement dated as of October 28, 1999, by and
among the Registrant, certain subsidiaries of the Registrant,
various banks, J.P. Morgan Chase Bank (formerly known as The
Chase Manhattan Bank), as Syndication Agent, Citicorp USA,
Inc. (as successor to Citibank, N.A.), as Administrative Agent
and Bank of America, N.A. and Deutsche Bank Alex Brown Inc.,
as Co-Documentation Agents (filed herewith*).
4.12 Waiver No. 1 dated as of June 30, 2001, to the Five-Year
Credit Agreement dated as of October 28, 1999, by and among
the Registrant, certain subsidiaries of the Registrant,
various banks, The Chase Manhattan Bank, as Syndication Agent,
Citibank, N.A., as Administrative Agent and Bank of America,
N.A. and Deutsche Bank Securities Inc., as Co-Documentation
Agents (incorporated by reference to Exhibit 4.2 to the June
30, 2001 Form 10-Q).
4.13 Form of Indenture, dated as of March 1, 2000, by and between
the Registrant and Citibank, N.A., relating to $600 Million
of 8 1/2% Senior Notes due 2005, including as Annex A thereto,
Form of Senior Note Pledge Agreement by and among the
Registrant, certain foreign subsidiaries of the Registrant,
and Citibank, N.A., as Collateral Agent (incorporated by
reference to Exhibit 4.13 of the 1999 Form 10-K).
4.14 Form of Purchase Agreement, dated as of March 2, 2000, by
and among the Registrant, as Seller, and Merrill Lynch, ABN
AMRO Incorporated, Banc of America Securities LLC, Chase
Securities Inc., Deutsche Bank Securities Inc., Goldman, Sachs
& Co. and Salomon Smith Barney Inc. (together, the "Initial
Purchasers"), relating to $600 Million of 8 1/2% Senior Notes
due 2005 (incorporated by reference to Exhibit 4.14 of the
1999 Form 10-K).
4.15 Form of Indenture, dated as of February 1, 1993, by and
between Witco and the Chase Manhattan Bank, N.A., as Trustee,
relating to Witco's 6.60% Notes due 2003, 7.75% Debentures due
2023, 6 1/8% Notes due 2006 and 6 7/8% Debentures due 2026,
including form of securities (incorporated by reference to
Post-Effective Amendment No. 2 to the Registration Statement
on Form S-3, Registration No. 33-58066, filed March 19, 1993).
4.16 Form of First Supplemental Indenture, dated February 1,
1996, by and among Witco, Chase Manhattan Bank, N.A., the
Initial Trustee, and Fleet National Bank of Connecticut, the
Note Trustee, relating to Witco's 6 1/8% Notes due 2006 and 6
7/8% Notes due 2026 (incorporated by reference to
Registration Statement on Form S-3, Registration Number 33-
65203, filed January 25, 1996).
4.17 Form of $600 Million of 8.50% Senior Notes due 2005, dated
June 9, 2000, registered for public trading with the U.S.
Securities and Exchange Commission and issued in exchange for
identical securities sold in March 2000, which were not
registered for public trading (incorporated by reference to
Exhibit 4 of the Registrant's Form 10-Q for the quarter ended
June 30, 2000).
10.1+ Supplemental Medical Reimbursement Plan (incorporated by
reference to Exhibit 10(n) to the Crompton & Knowles Form 10-K
for the fiscal year ended December 27, 1980).
10.2+ Supplemental Dental Reimbursement Plan (incorporated by
reference to Exhibit 10(o) to the Crompton & Knowles Form 10-K
for the fiscal year ended December 27, 1980).
10.3+ Form of Employment Agreement entered into in 1988, 1989, 1992,
1994, 1996 and 1998 between Crompton & Knowles or one of its
subsidiaries and ten of the executive officers of Crompton &
Knowles (incorporated by reference to Exhibit 10(k) to the
Crompton & Knowles Form 10-K for the fiscal year ended
December 26, 1987).
10.4+ Form of Employment Agreement dated as of August 21, 1996,
between a subsidiary of the Registrant and three executive
officers of the Registrant (incorporated by reference to
Exhibit 10.28 to the UCC/Uniroyal Form 10-K for the fiscal
year ended September 28, 1996).
10.5+ Form of Supplemental Retirement Agreement dated as of
August 21, 1996, between a subsidiary of the Registrant and
two executive officers of the Registrant (incorporated by
reference to Exhibit 10.29 to the UCC/Uniroyal Form 10-K for
the fiscal year ended September 28, 1996).
10.6+ Form of Supplemental Retirement Agreement dated as of
August 21, 1996, between a subsidiary of the Registrant and
two executive officers of the Registrant (incorporated by
reference to Exhibit 10.30 to the UCC/Uniroyal Form 10-K for
the fiscal year ended September 28, 1996).
10.7+ Supplemental Retirement Agreement Trust Agreement dated
October 20, 1993, between Crompton & Knowles and Shawmut
Bank, N.A. (incorporated by reference to Exhibit 10(l) to
the Crompton & Knowles Form 10-K for the fiscal year ended
December 25, 1993).
10.8+ Amended Benefit Equalization Plan dated October 20, 1993
(incorporated by reference to Exhibit 10(m) to the Crompton
& Knowles Form 10-K for the fiscal year ended December 25,
1993).
10.9+ Amended Benefit Equalization Plan Trust Agreement dated
October 20, 1993, between Crompton & Knowles and Shawmut
Bank, N.A. (incorporated by reference to Exhibit 10(n) to
the Crompton & Knowles Form 10-K for the fiscal year ended
December 25, 1993).
10.10+ Amended Crompton Corporation 1988 Long Term Incentive Plan
(filed herewith*).
10.11 Trust Agreement dated as of May 15, 1989, between Crompton
& Knowles and Shawmut Worcester County Bank, N.A. and First
Amendment thereto dated as of February 8, 1990
(incorporated by reference to Exhibit 10(w) to the Crompton
& Knowles Form 10-K for the fiscal year ended December 30,
1989).
10.12+ Restricted Stock Plan for Directors of Crompton & Knowles
approved by the stockholders on April 9, 1991 (incorporated
by reference to Exhibit 10(z) to the Crompton & Knowles Form
10-K for the fiscal year ended December 28, 1991).
10.13+ Amended 1993 Stock Option Plan for Non-Employee Directors
(incorporated by reference to Exhibit 10.21 to the Crompton &
Knowles Form 10-K for the fiscal year ended December 26,
1998).
10.14+ UCC Purchase Right Plan, as amended and restated as of
March 16, 1995 (incorporated by reference to Exhibit 10.1 to
the UCC Form 10-Q for the period ended April 2, 1995 (AUCC
April 1995 Form 10-Q@)).
10.15+ UCC 1993 Stock Option Plan (incorporated by reference to
Exhibit 28.1 to UCC's Registration Statement No. 33-62030 on
Form S-8, filed on May 4, 1993).
10.16+ Form of Amendment No. 2 to the UCC 1993 Stock Option Plan
(incorporated by reference to Exhibit 10.2 to the UCC April
1995 Form 10-Q).
10.17+ Form of Executive Stock Option Agreement, dated as of
November 15, 1993 (incorporated by reference to Exhibit
10.22 to the UCC 1994 Form 10-K).
10.18+ Form of Amended and Restated 1996 - 1998 Long Term Performance
Award Agreement entered into in 1996 between Crompton &
Knowles or one of its subsidiaries and thirteen of the
executive officers of Crompton & Knowles (incorporated by
reference to Exhibit 10.27 to the Crompton & Knowles Form 10-K
for the fiscal year ended December 27, 1997).
10.19 Second Amended and Restated Lease Agreement between the
Middlebury Partnership, as Lessor, and Uniroyal, as Lessee,
dated as of August 28, 1997 (incorporated by reference to
Exhibit 10 to the UCC/Uniroyal 10-Q for the quarter ended
September 27, 1997) .
10.20 Form of Receivables Sale Agreement, dated as of December
11, 1998, by and among Crompton & Knowles, as Initial
Collection Agent, Crompton & Knowles Receivables
Corporation, as Seller, ABN AMRO Bank N.V., as Agent, the
Enhancer, and the Liquidity Provider, and Windmill Funding
Corporation (incorporated by reference to Exhibit 10.291 to
the Crompton & Knowles Form 10-K for the fiscal year ended
December 26, 1998).
10.201 Amended and Restated Receivables Sale Agreement, dated as of
January 18, 2002, among Crompton & Knowles Receivables
Corporation, as the Seller, the Registrant, as the Initial
Collection Agent, ABN AMRO Bank N.V., as the Agent, certain
liquidity providers, ABN AMRO Bank, N.V., as the Enhancer, and
Amsterdam Funding Corporation (filed herewith*).
10.202 Form of Receivables Purchase Agreement, dated as of December
11, 1998, by and among Crompton & Knowles, as Initial
Collection Agent, and certain of its subsidiaries, as Sellers,
Crompton & Knowles Receivables Corporation, as Buyer, and ABN
AMRO Bank N.V., as Agent (incorporated by reference to
Exhibit 10.292 to the Crompton & Knowles Form 10-K for the
fiscal year ended December 26, 1998).
10.203 Amendment Number 1 dated as of December 9, 1999, to the
Receivables Purchase Agreement, dated as of December 11, 1998,
by and among CK Witco Corporation (as successor by merger to
Crompton & Knowles), as Initial Collection Agent, and certain
of its subsidiaries, as Sellers, Crompton & Knowles
Receivables Corporation, as Buyer, and ABN AMRO Bank N.V., as
Agent (incorporated by reference to Exhibit 10.265 to Form 10-
K for the fiscal year ended December 31, 2000 ("2000 Form 10-
K").
10.204 Amendment Number 2 dated as of November 20, 2000, to the
Receivables Purchase Agreement, dated as of December 11, 1998,
by and among the Registrant (as successor to Crompton &
Knowles), as Initial Collection Agent, and certain of its
subsidiaries, as Sellers, Crompton & Knowles Receivables
Corporation, as Buyer, and ABN AMRO Bank N.V., as Agent
(incorporated by reference to Exhibit 10.266 to the 2000 Form
10-K).
10.205 Amendment Number 3 dated as of February 1, 2001, to the
Receivables Purchase Agreement dated as of December 11, 1998,
by and among the Registrant (as successor to Crompton &
Knowles), as Initial Collection Agent, and certain of its
subsidiaries, as Sellers, Crompton & Knowles Receivables
Corporation, as Buyer, and ABN AMRO Bank N.V., as Agent
(incorporated by reference to Exhibit 10.267 to the 2000 Form
10-K).
10.206 Letter Agreement dated as of January 18, 2002, to the
Receivables Purchase Agreement dated as of December 11, 1998,
by an among the Registrant (as successor to Crompton &
Knowles), as Initial Collection Agent, and certain of its
subsidiaries, as Sellers, Crompton & Knowles Receivables
Corporation, as Buyer, and Crompton Sales Company, Inc. and
ABN AMRO Bank N.V., as Agent (filed herewith*).
10.21+ Amended Crompton Corporation 1998 Long Term Incentive Plan
(filed herewith*).
10.22+ Amended and Restated Employment Agreement by and between
Crompton & Knowles and Vincent A. Calarco dated May 31, 1999
(incorporated by reference to Exhibit 10.1 to the Crompton &
Knowles Form 10-Q for the quarter ended June 26, 1999).
10.23+ Form of Merger Synergy Restricted Stock Agreement, dated as of
October 19, 1999, by and between the Registrant and various of
its executive officers (incorporated by reference to Exhibit
10.32 to the 1999 Form 10-K).
10.24+ Form of Supplemental Retirement Agreement, dated as of October
21, 1999, by and between the Registrant and various of its
executive officers (incorporated by reference to Exhibit 10.35
of the 1999 Form 10-K).
10.25+ Form of 2001-2002 Long Term Incentive Award Agreement, dated
as of January 31, 2001, by and between the Registrant and
various of its executive officers (incorporated by reference
to Exhibit 10 to the 10-Q for the quarter ended March 31,
2001).
10.26+ Form of 2001 Management Incentive Plan dated as of March 20,
2001, by and between the Registrant and various key management
personnel (filed herewith*).
10.27+ Form of 2002 Management Incentive Plan dated as of February 8,
2002, by and between the Registrant and various key management
personnel (filed herewith*).
13 2001 Annual Report to Stockholders of the Registrant. (Not
to be deemed filed with the Securities and Exchange Commission
except those portions expressly incorporated by reference into
this report on Form 10-K.) (filed herewith*).
21 Subsidiaries of the Registrant (filed herewith*).
23 Consent of independent auditors. (See Item 14(a)2 herein.)
(filed herewith*).
24 Power of attorney from directors and executive officers of
the Registrant authorizing signature of this report.
(Original on file at principal executive offices of
Registrant.) (filed herewith*).
* Copies of these Exhibits are annexed to this report on Form 10-K
provided to the Securities and Exchange Commission and the New York
Stock Exchange.
+ This Exhibit is a compensatory plan, contract or arrangement in
which one or more directors or executive officers of the Registrant
participate.
(b) Reports on Form 8-K filed in fourth quarter 2001
During the fiscal fourth quarter of 2001, the Registrant did not
file a Current Report on Form 8-K.
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.
CROMPTON CORPORATION
(Registrant)
Date: March 28, 2002 By:/s/Peter Barna
Peter Barna
Senior Vice President &
Chief Financial Officer
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 date
indicated.
Name Title
Vincent A. Calarco* Chairman of the Board, President,
and Director (Principal Executive
Officer)
Peter Barna* Senior Vice President
(Chief Financial Officer)
Michael F. Vagnini* Corporate Controller
(Principal Accounting Officer)
Robert A. Fox* Director
Roger L. Headrick* Director
Leo I. Higdon, Jr.* Director
Harry G. Hohn* Director
C. A. Piccolo* Director
Bruce F. Wesson* Director
Patricia K. Woolf* Director
Date: March 28, 2002 *By:/s/Peter Barna
Peter Barna
as attorney-in-fact
Independent Auditors' Report and Consent
The Board of Directors and Stockholders
Crompton Corporation:
Under date of January 31, 2002, we reported on the consolidated
balance sheets of Crompton Corporation and subsidiaries (the
Company) as of December 31, 2001 and 2000, and the related
consolidated statements of operations, stockholders' equity and
cash flows for each of the years in the three-year period ended
December 31, 2001, which are incorporated by reference in this
Form 10-K for the year 2001. In connection with our audits of
the aforementioned consolidated financial statements, we also
audited the related consolidated financial statement schedule
included in this Form 10-K for the year 2001. This financial
statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion on this
financial statement schedule based on our audit.
In our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
We consent to the incorporation by reference in the registration
statements (Nos. 33-21246, 33-42280, 33-67600, 333-62429, 333-
87035, 333-60422, 333-71030 and 333-71032) on Form S-8 of
Crompton Corporation of our report, dated January 31, 2002, with
respect to the consolidated balance sheets of Crompton
Corporation and subsidiaries as of December 31, 2001 and 2000,
and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the years in the
three-year period ended December 31, 2001, which report is
incorporated by reference in the December 31, 2001 Annual Report
on Form 10-K of Crompton Corporation.
/s/KPMG LLP
Stamford, Connecticut
March 27, 2002
S - 1
Schedule II
CROMPTON CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
(In thousands of dollars)
Additions
Balance at charged to Adjustments Balance
Beginning costs and at end
of year expenses Recurring Other of year
Fiscal Year ended
December 31, 2001:
Allowance for
doubtful accounts $ 22,134 $ 4,499 $ (8,864)(1) $ (873)(2) $ 16,896
Accumulated
amortization
of cost in
excess of
acquired net
assets 73,796 26,056 (220)(3) (2,568)(4) 97,064
Accumulated
amortization
of other
intangible
assets 148,388 12,804 (244)(3) (81)(5) 160,867
Fiscal Year ended
December 31, 2000:
Allowance for
doubtful accounts $ 23,356 $ 3,773 $ (4,995)(1) $ 0 $ 22,134
Accumulated
amortization
of cost in
excess of
acquired net
assets 49,403 26,465 (155)(3) (1,917)(6) 73,796
Accumulated
amortization
of other
intangible
assets 135,539 12,805 (98)(3) 142(6) 148,388
Fiscal Year ended
December 31, 1999:
Allowance for
doubtful accounts $ 9,768 $ 3,937 $ (5,206)(1) $ 14,857(7) $ 23,356
Accumulated
amortization
of cost in
excess of
acquired net
assets 44,647 12,382 (939)(3) (6,687)(6) 49,403
Accumulated
amortization
of other
intangible
assets 120,860 15,078 (232)(3) (167)(6) 135,539
(1) Represents accounts written off as uncollectible (net of
recoveries), and the translation effect
of accounts denominated in foreign currencies.
(2) Represents the disposition of the industrial colors business.
(3) Represents the translation effect of intangible assets denominated
in foreign currencies.
(4) Represents primarily impairment of goodwill related to the rubber
chemicals and trilene businesses.
(5) Represents primarily the disposition of the industrial colors
business partially offset by the impairment of intangible assets
relating to the rubber chemicals business.
(6) Represents primarily intangible asset retirements.
(7) Represents primarily the acquisition of Witco Corporation.
S - 2