Exhibit 10.10

Compensation Arrangement with Luther C. Kissam, IV, dated August 29, 2003

August 29, 20003

Luther C. Kissam, IV
34 Godwin Lane
Ladue, MO 63124

Dear Luke:

I will summarize Albemarle's offer to you to join the company as Vice President,
General Counsel and Secretary. Since there are several components, I will
address each separately.

1.     Salary - $260,000   2.

Bonuses - Target is 50% of base salary under the Annual Incentive Plan of the
corporation, which is performance based. Attached is a copy of the plan
description for your reference. As the plan is calculated for the calendar year,
your first year bonus amount will be prorated for 2003 based on time worked and
actual performance, with a minimum payment of $65,000.

  3.

In addition to the minimum bonus noted above, Albemarle will pay you a total of
$65,000 for loss of 2003 annual incentive earnings at your current employer.
This payment will be made on the first pay period following your date of hire.
The full amount of this payment is to be repaid should you leave the company
voluntarily within three years of your date of hire.

  4.

Albemarle will award you fifty thousand stock options under the company's
existing plan. A copy of the plan description is also attached. The price of
those options will be the composite closing price of the stock on your first day
of employment. The options will have a ten year term and will completely vest
after three years from the date of grant. These will be confirmed as a separate
agreement following your hire.

5.

The company will issue to you a grant of 10,000 Performance Units upon your hire
under the same terms and conditions as all other eligible employees received
through a grant made by the Board of Directors in January 2002. This grant of
Performance Units, where each unit is valued equivalent to a share of common
stock, is contingent on the company achieving Growth in Operating Profit and
Return on Gross Assets targets over the four calendar years starting with 2002
and ending with 2005. In early

       

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Luther C. Kissam, IV
August 29, 2003
Page Two

 

2006 a determination of an earned award based on actual corporate performance
will be made which may be anywhere from 0 to 200% of the original grant. Once
earned, the award will be vested in three equal amounts, paid half in stock and
half in cash in January of the next three years. This grant of Performance Units
will be confirmed as a separate notice of award following your hire.

6.    

Albemarle's retirement program, subject to approval by its Executive
Compensation Committee, provides a bridge for mid-career senior executives
joining the company. The idea behind this provision assures the executive who
works 15 years for Albemarle a retirement equal to 60 percent of final average
pay. You would accumulate four percent for each year of service with a cap of 60
percent. This is then offset by benefits from other qualified pension plans,
social security, etc. which will include benefits earned at your previous
employer. Attached is a copy of the Supplemental Executive Retirement Plan,
which contains these provisions.

7.

You will participate in Albemarle's savings plan, which provides a company match
of 50% on personal savings contributed by you of up to ten percent. Should the
amounts exceed so-called high income caps, such excess will be carried by the
company until paid out at retirement.

8.

You will be eligible to participate in the Albemarle Executive Deferred
Compensation Plan at the next enrollment period later this year. The program
allows participants to defer up to 50% of salary and up to 100% of bonus (net of
FICA, including Medicare, taxes) each year. Deferrals are credited to one or
more accounts which may be distributed at or before retirement based on your
election. Deferrals are credited with the investment performance of funds which
largely mirror those available in the Savings Plan. Attached is a booklet which
describes this program.

9.

In the event a Change of Control were to occur and one or more of the following
events happen with respect to your employment within a period of 24 months
thereafter, you may resign and receive a lump sum payment and other benefits as
described below. The events include: (1) a change or diminution of
responsibilities or compensation, (2) a reduction of benefit eligibility or
benefit level (3) refusal by a successor company to assume this severance
agreement, or (4) termination.

 

If you resign or are terminated under conditions described in the paragraph
above, you will receive: (1) a lump sum payment equal to two times your annual
salary and Annual Incentive at the previous year's payment amount, (2) all
vested outstanding stock options become exercisable, (3) all vested restricted
stock becomes nonforfeitable, and (4) as a mid-career hire, should a Change of
Control under conditions as described in the paragraph above occur during the
first ten years of

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Luther C. Kissam,
IV August 29, 2003
Page Three

 

employment, you will receive an adjusted benefit payable at normal retirement
age under the pension plan described in item 6 of this letter calculated without
offset from other benefits.

10.    

In the event that your employment is terminated within the first five years for
reasons other than for cause, Albemarle will pay you a severance equal to one
times your then current annual compensation including both salary and annual
incentive compensation at target.

12.

You will be eligible for the full benefit package provided by the company.
Information on health and life insurance and other benefits are attached.
Answers to questions you have will be provided separately by Jack Harsh.

13.

Relocation allowances provide full coverage for moving and packing household
goods. You will be entitled to the provisions of the policy as are transferred
employees. If you can sell your residence, the company prefers you do so. In the
event you cannot do so in a reasonable time, the company will buy the house
based on the average of two appraisals. The mechanics of this transaction are
covered in the relocation policy.

14.

Your vacation eligibility is four weeks per year starting in 2004.

15.

Your expected date of employment is on or before October 1, 2003.

This offer is subject to a preemployment physical examination and substance
screening under the company's policy. In addition, upon your acceptance of this
offer and start of employment with Albemarle, this letter will represent our
mutual agreement relating to the terms of your employment with Albemarle.

Sincerely,        Mark C. Rohr  President, CEO 

Enclosures

cc: F. D. Gottwald, Jr. W. M. Gottwald J. P. Harsh

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