ALBEMARLE CORPORATION DIRECTORS? DEFERRED COMPENSATION PLAN

1.

PURPOSE . The Albemarle Corporation Directors’ Deferred Compensation Plan (the “Plan”), is intended to constitute a deferred compensation plan for corporate directors’ fees.

2.

DEFINITIONS . The following definitions apply to this Plan and to the Deferral Election Forms.

(a)

Administrator means the Company’s Chief Financial Officer.

(b)

Beneficiary or Beneficiaries means a person or persons or other entity designated on a Beneficiary Designation Form by a Participant as allowed in subsection 7(c) to receive a Deferred Benefit. If there is no valid designation by the Participant, or if the designated Beneficiary or Beneficiaries fail to survive the Participant or otherwise fail to take the benefit, the Participant’s Beneficiary is the first of the following who survives the Participant: a Participant’s spouse (the person legally married to the Participant when the Participant dies); the Participant’s children in equal shares and the Participant’s estate.

(c)

Beneficiary Designation Form means a form acceptable to the Administrator or his designee used by a Participant according to this Plan to name his Beneficiary or Beneficiaries who will receive his Deferred Benefits under this Plan if he dies.

(d)

Board means the board of directors of the Company.

(e)

Common Stock means the common stock of the Company.

(f)

Company means Albemarle Corporation and any successor business by merger, purchase, or otherwise that maintains the Plan.

(g)

Compensation means a Director’s Meeting Fees and Retainer Fees for the Deferral Year.

(h)

Deferral Election Form means a document governed by the provisions of section 4 of this Plan, including the portion that is the Distribution Election Form and the related Beneficiary Designation Form that applies to all of that Participant’s Deferred Benefits under the Plan.

(i)

Deferral Year means a calendar year for which a Director has an operative Deferral Election Form.

(j)

Deferred Benefit means either a Deferred Cash Benefit or a Deferred Stock Benefit under the Plan for a Participant who has submitted an operative Deferral Election Form pursuant to section 4 of this Plan.

(k)

Deferred Cash Account means that bookkeeping record established for each Participant who elects a Deferred Cash Benefit. A Deferred Cash Account is established only for purposes of measuring a Deferred Cash Benefit and not to segregate assets or to identify assets that may or must be used to satisfy a Deferred Cash Benefit. A Deferred Cash Account will be credited with the Participant’s Compensation deferred as a Deferred Cash Benefit according to a Deferred Election Form and according to section 6 of this Plan. A Deferred Cash Account will be credited periodically with amounts based upon interest rates established by the Administrator under subsection 6(b) of this Plan.

(l)

Deferred Cash Benefit means the Deferred Benefit elected by a Participant under section 4 that results in payments governed by sections 6 and 8 of this Plan.

(m)

Deferred Stock Account means that bookkeeping record established for each Participant who elects a Deferred Stock Benefit. A Deferred Stock Account is established only for purposes of measuring a Deferred Stock Benefit and not to segregate assets or to identify assets that may or must be used to satisfy a Deferred Stock Benefit. A Deferred Stock Account will be credited with the Participant’s Compensation deferred as a Deferred Stock Benefit according to a Deferral Election Form and according to section 7 of this Plan. A Deferred Stock Account will be credited periodically with amounts determined under subsection 7(b) of this Plan.

(n)

Deferred Stock Benefit means the Deferred Benefit elected by a Participant under section 4 that results in payments governed by sections 7 and 8 of this Plan.

(o)

Directors means those duly elected members of the Board who are not employees of the Company.

(p)

Distribution Election Form means that part of a Deferral Election Form used by a Participant according to this Plan to establish the duration of deferral and the frequency of payments of a Deferred Benefit. If a Deferred Benefit has no Distribution Election Form that is operative according to section 4 of this Plan, distribution of that Deferred Benefit is governed by section 8 of this Plan.

(q)

Election Date means the date established by this Plan as the date before which a Director must submit a valid Deferral Election Form to the Administrator. For each Deferral Year, the Election Date is December 31 of the preceding calendar year. However, for an individual who becomes a Director during a Deferral Year, the Election Date is the thirtieth day following the date that he becomes a Director. Subject to the provisions of section 17 of this Plan, the Election Date for Compensation payable in 1996 on or after July 1, 1996, is the thirtieth day after the annual meeting of the Company’s shareholders. Despite the preceding

sentences, the Administrator may set an earlier date as the Election Date for any Deferral Year.

(r)

Fair Market Value means, on any given date, the closing price of a share of Common Stock as reported on the New York Stock Exchange composite tape on such day or, if the Common Stock was not traded on the New York Stock Exchange on such day, then the next preceding day that the Common Stock was traded on such exchange, all as reported by such source as the Administrator may select. If shares of Common Stock are not then traded on the New York Stock Exchange, the Fair Market Value shall be determined by the Administrator using an reasonable method in good faith.

(s)

Meeting Fees means the portion of a Director’s Compensation that is based upon his attendance at Board meetings and meetings of the Company’s committees, according to the Company’s established rules and procedures for compensating Directors.

(t)

Participant means, with respect to any Deferral Year, a Director whose Deferral Election Form is operative for that Deferral Year.

(u)

Plan means the Albemarle Corporation Directors’ Deferred Compensation Plan.

(v)

Retainer Fee means that portion of a Director’s Compensation that is fixed and paid without regard to his attendance at meetings and which is payable in cash.

(w)

Terminate , Terminating , or Termination , with respect to a Participant, mean cessation of his relationship with the Company as a Director whether by death, disability or severance for any other reason.

3.

PARTICIPATION . A Director becomes a Participant for any Deferral Year by filing a valid Deferral Election Form according to section 4 on or before the Election Date for that Deferral Year, but only if his Deferral Election Form is operative according to section 4.

4.

DEFERRAL ELECTION . A deferral election is valid when a Deferral Election Form is completed, signed by the electing Director, and received by the Administrator. Deferral elections are governed by the provisions of this section.

(a)

A Participant may elect a Deferred Benefit for any Deferral Year if he is a Director at the beginning of that Deferral Year or becomes a Director during that Deferral Year.

(b)

Before each Deferral Year’s Election Date, each Director will be provided with a Deferral Election Form and a Beneficiary Designation Form. Under the Deferral Election Form for a single Deferral Year, a Director may elect on or before the

Election Date to defer the receipt of all or part of his Retainer Fee (in 10% multiples) or all or part of his Meeting Fees (in 10% multiples), or both for the Deferral Year that will be earned and payable after the Election Date.

(c)

A Participant’s Deferral Election Form for the Participant’s Retainer Fee may specify either a Deferred Cash Benefit (in 10% increments of the deferred amount) or a Deferred Stock Benefit (in 10% increments of the deferred amount), or a combination thereof and for the Participant’s Meeting Fees may specify a Deferred Cash Benefit (in 10% increments of the deferred amount) or a Deferred Stock Benefit (in 10% increments of the deferred amount), or a combination thereof. A Participant may not elect to convert a Deferred Cash Benefit to a Deferred Stock Benefit or to convert a Deferred Stock Benefit to a Deferred Cash Benefit.

(d)

Each Distribution Election Form is part of the Deferral Election Form on which it appears or to which it states that it is related. The Administrator may allow a Participant to file one Distribution Election Form for all of his Deferred Stock Benefits, all of his Deferred Cash Benefits or all of his Deferred Benefits. The Administrator may allow a Participant to file multiple Distribution Election Forms that each relate to Deferred Stock Benefits, Deferred Cash Benefits, or both for one or more Deferral Years. The provisions of section 8 of this Plan apply to any Deferred Benefit under this Plan if there is no operative Distribution Election Form for that Deferred Benefit.

(e)

If he does so before the last business day of the Deferral Year, the Administrator may reject any Deferral Election Form or any Distribution Election Form or both, and the Administrator is not required to state a reason for any rejection. The Administrator may modify any Distribution Election Form at any time to the extent necessary to comply with any federal securities laws or regulations. However, the Administrator’s rejection of any Deferral Election Form or any Distribution Election Form or the Administrator’s modification of any Distribution Election Form must be based upon action taken without regard to any vote of the Director whose Deferral Election Form or Distribution Election Form is under consideration, and the Administrator’s rejections must be made on a uniform basis with respect to similarly situated Directors. If the Administrator rejects a Deferral Election Form, the Director must be paid the amounts he would then have been entitled to receive if he had not submitted the rejected Deferral Election Form.

(f)

A Director may not revoke a Deferral Election Form or a Distribution Election Form after the Deferral Year begins. Any revocation before the beginning of the Deferral Year is the same as a failure to submit a Deferral Electio