SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use
of the Commission Only
(as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MacDermid, Incorporated
(Name of Registrant as Specified In Its Charter)
............................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
............................................................................
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction
applies:
.......................................................................
2) Aggregate number of securities to which transaction applies:
.......................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
.......................................................................
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
(MacDermid)
(Logo)
MACDERMID
Incorporated
245 Freight Street
Waterbury, CT. 06702-0671
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 25, 1996
The Annual Meeting of Shareholders of MacDermid, Incorporated
("MacDermid") will be held at the Marriot Courtyard, 63 Grand Street,
Waterbury, Connecticut, on Thursday, July 25, 1996 at 3:30 P.M. EDT,
for the following purposes:
1. To elect five directors to hold office until the next
annual meeting and until their successors are elected and qualified;
2. To consider and act upon proposed amendment to the
MacDermid, Incorporated Special Stock Purchase Plan dated November 15,
1991; and
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on May 31,
1996 as the record date for the determination of shareholders who will
be entitled to notice of and to vote at the meeting.
You are requested to promptly vote, date and sign the enclosed
proxy and return it in the enclosed postage-paid envelope at your
earliest convenience prior to the meeting. Because it is impractical
to eliminate duplication, separate proxies are mailed to persons whose
names are shown in more than one way on MacDermid's stock records.
Therefore, you may receive more than one proxy. Please vote, date, sign
and return all proxies received.
If you are an employee participating in MacDermid's Employees
Profit Sharing or Employee Stock Ownership Plans, you will receive
separate instructions covering shares held for your account in such
plan or plans.
Your proxy vote is very important. Prompt return of all your
proxies will minimize proxy solicitation expense, assure a quorum and
avoid confusion and delay at the meeting.
By Order of the Board of Directors,
Waterbury, Connecticut JOHN L. CORDANI
June 24, 1996 Corporate Secretary
(IN ORDER TO AVOID UNNECESSARY EXPENSE), we urge you to indicate
voting instructions on the enclosed proxy and date, sign and return
it promptly PRIOR to the meeting in the envelope provided, no matter
how large or small your holdings may be.
(MacDermid
(Logo)
MACDERMID
Incorporated
245 Freight Street
Waterbury, Connecticut 06702-0671
PROXY STATEMENT GENERAL
The accompanying proxy is being solicited by the Board of Directors
of MacDermid, Incorporated ("MacDermid") for use at the annual meeting
of Shareholders of MacDermid and at any and all adjournments thereof
(the "Meeting") to be held, pursuant to the accompanying Notice of Annual
Meeting of Shareholders, at Marriot Courtyard, 63 Grand Street, Waterbury,
Connecticut on Thursday, July 25, 1996 at 3:30 P.M., EDT.
Each holder of MacDermid's common stock (the "Common Stock") is
entitled to one vote per share on each matter to be brought before
the Meeting. Valid proxies will be voted as specified thereon at
the Meeting. Any shareholder giving a proxy in the accompanying form
(a "Proxy") retains the power to revoke it at any time prior to the
exercise of the powers conferred thereby by (1) delivering written
notice of such revocation to John L. Cordani, Corporate Secretary,
MacDermid, Incorporated, 245 Freight Street, Waterbury, Connecticut
06702-0671; (2) delivering to the Corporate Secretary a duly executed
Proxy or other proxy form bearing a date subsequent to the date on
the given Proxy; or (3) appearing at the Meeting and requesting to
vote his or her shares in person. Any shareholder who attends the
Meeting in person will not be deemed thereby to revoke the Proxy
unless such shareholder affirmatively indicates at the Meeting his
intention to vote the shares in person.
Unless a shareholder provides contrary instructions on a Proxy,
all shares represented by the Proxy (if not revoked before such shares
are voted) will be voted for the election of the nominees for
directors named below, for approval of the proposed amendment to
the MacDermid, Incorporated Special Stock Purchase Plan dated November
15, 1991, and by the persons granted the proxies in their discretion
on any other business properly to come before the Meeting.
MacDermid has retained D.F. King & Co., Inc. of New York, New
York ("King") to assist with the solicitation of Proxies and the
mailing and distribution of proxy material. The anticipated cost of
King's services, including reimbursement for expenses, is approximately
$8,500. MacDermid will bear the cost of the solicitation of Proxies,
which may include the reasonable expenses of brokerage firms and others
for forwarding Proxies and proxy material to the beneficial owners of
Common Stock of MacDermid. In addition to the use of the mails, Proxies
may be solicited by King and by regular employees of MacDermid personally
or by telephone or telegram. Votes will be counted by employees of Harris
Trust Company of New York, New York ("Harris"), the Corporation's transfer
agent. MacDermid currently anticipates that Mr. John L. Cordani and Ms.
Sharon J. Stone, employees of MacDermid, will be the Inspectors of
Election who will certify the votes at the meeting of shareholders.
Only holders of Common Stock of record at the close of business on
May 31, 1996 are entitled to notice of and to vote at the Meeting. On
that date there were 2,791,530 shares of Common Stock outstanding and
entitled to be voted. Holders of a majority of such outstanding
shares, present in person or represented by proxy, will be necessary
to constitute a quorum at the Meeting. If a quorum is present, the
affirmative vote of a majority of the shares present in person or
represented by proxy at the Meeting will be necessary for the election
of each nominee for director and for approval of the proposed amendment
to the MacDermid, Incorporated Special Stock Purchase Plan dated
November 15, 1991. Abstentions and broker non-votes are counted for
purposes of determining the presence or absence of a quorum.
Abstentions are counted in determining the shares represented at the
Meeting with respect to each proposal presented to shareholders, but
broker non-votes are not counted for such purpose.
Any shares held for the account of a shareholder who participates
in the MacDermid Dividend Reinvestment Plan will be voted automatically
with the shareholder's other shares of Common Stockas directed by the
shareholder on the enclosed Proxy.
The approximate date on which this Proxy Statement and the
accompanying Proxy are first sent to shareholders is June 24, 1996.
MacDermid's Annual Report to Shareholders, containing financial
statements for the fiscal year ended March 31, 1996, accompanies these
proxy materials to each shareholder.
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
Please complete, sign and return your proxy card in the enclosed envelope.
ITEM 1: ELECTION OF DIRECTORS
The Board of Directors, pursuant to the By-Laws, has fixed at
five the number of directors to be elected at the Meeting. Shares
represented by Proxies will be voted for the election of the
nominees for Director listed below, unless otherwise indicated.
Each Director of MacDermid shall serve until the next annual
meeting or until his successor has been elected and qualified.
All the nominees are currently Directors of MacDermid.
Management has no reason to believe that any nominee named
below will be unable to serve as a Director. If at the time of the
Meeting a nominee should be unable to stand for election, it is the
intention of the persons granted the Proxies to vote in their
discretion for such person as may be designated as a nominee by the
Board of Directors of MacDermid.
The following information has been provided by each Director nominee.
-NOMINEES FOR DIRECTOR-
HAROLD LEEVER Mr. Leever joined MacDermid (Full face photo of
in 1938. He was elected President in 1954 and Harold Leever will
Chairman of the Board in 1977. Mr. Leever is be placed here.)
active in a number of organizations concerned
with education, health and youth development.
Mr. Leever has a B.S. degree in Chemical
Engineering from Michigan State University.
Principal occupation - Chairman of the Board of MacDermid
Director since 1947
203,832 shares - 7.30%(1)
Chairman of the Executive and Nominating Committees.
Age: 82
- ----------------------------------------------------------------------
DANIEL H. LEEVER Mr. Leever joined MacDermid
(Full face photo of in 1982. In 1989, he was appointed Senior
Mr. Daniel H. Leever Vice President and Chief Operatintg Officer.
will be placed here) In the following year, he was appointed
President and Chief Executive Officer. Mr.
Leever attended undergraduate schoo at Kansas
State University and the Graduate School at
the University of New Haven School of Business.
Principal occupation - President and Chief Executive Officer of MacDermid
Director since 1989
133,749 shares - 4.79%(2) (3)
Member of the Executive and Nominating Committees
Age: 47
DONALD G. OGILVIE - Mr. Ogilvie has been the
Executive Vice President of the American Bankers
Association since 1980. He was from 1980 to
1985 a Vice President of Celanese Corporation (Full face
and from 1977 to 1980 Associate Dean of Yale photo of Donald
University's School of Organization and Management. G. Ogilvie will
Earlier he held posts in the U.S. Department of be placed here)
Defense and in the Executive Office of the President
as Associate Director of National Security and
International Affairs in the Office of Management
and Budget. Mr. Ogilvie has a B.A. degree from Yale
University and an M.B.A. from Stanford University's
School of Business.
Principal occupation - Executive Vice President of American Bankers
Association
Director since 1986
838 shares - *(2)
Member of the Audit, Compensation, Executive and Nominating
Committees.
Age: 53
- ----------------------------------------------------------------------
(Full face photo of JAMES C. SMITH Mr. Smith is Chairman
James C. Smith of the Board and Chief Executive
will be placed here) Officer of Webster Financial Corporation
and its subsidiary, Webster Bank of
Connecticut. He also serves and has
served since prior to 1987 as President
of Webster. Mr. Smith is active in a
number of organizations dedicated to
enhancing the quality of life in the
communities served by Webster. Mr.
Smith has an AB degree from Dartmouth
College.
Principal occupation - Chairman of the Board and Chief Executive
Officer of Webster Financial Corporation and its subsidiary, Webster
Bank of Connecticut.
Director since 1994
1,130 shares - * (2)
Member of the Audit, Compensation, Executive and Nominating Committees.
Age: 47
THOMAS W. SMITH Mr. Smith is and since 1973 (Full face photo of
has been the Managing Partner of Prescott Thomas W. Smith
Investors. He is on the board of directors will be placed here)
of Cataline Marketing Corporation and the
National Center for Policy Analysis. Mr.
Smith has a B.A. degree from Miami University
and an M.A. from the University of California
at Berkeley.
Principal occupation - Managing Partner of
Prescott Investors.
Director since 1989
211,590 shares - 7.58%(4)
Chairman of the Audit and Compensation Committees and a member of
the Executive and Nominating Committees
Age: 68
- ------------------------------------------------------------------------
* Indicates less than 1% of the outstanding shares of Common Stock.
Notes to Election of Directors
(1) Includes 21,900 shares owned by his wife, Ruth Ann Leever,
as to all of which shares Mr. Leever disclaims any beneficial
interest, and 5,757 shares held by MacDermid's Profit Sharing and
Employee Stock Ownership Plans. Mr. Leever has sole voting power
with respect to 176,175 shares. The Bank of Boston Connecticut, as
trustee of a revocable trust, may have or succeed to the rights to
vote 146,175 shares. A portion of the information for Mr. Leever was
obtained from his amended Schedule 13G dated February 6, 1996.
MacDermid has entered into an agreement with Mr. Leever that up to
the greater of $522,988 or the then face amount of a life insurance
policy held by MacDermid on Mr. Leever's life will be used to purchase
a portion of his MacDermid shares upon his death. The total purchases
to be made are not to exceed the total of the state and federal estate
taxes and funeral and administration expenses of Mr. Leever's estate.
The price per share of such purchase is to be the market price at the
time of death.
(2) Owner has sole investment and voting power.
(3) Includes 9,410 shares held by MacDermid's Profit Sharing and
Employee Stock Ownership plans, 7,500 shares which are subject to
restrictions on transfer until May 30, 1998 and 12,500 shares which
are subject to restrictions on transfer until May 18, 1999 both under
the terms of the Special Stock Purchase Plan and 80,000 shares which
may be acquired upon exercise of options granted under the Special
Stock Purchase Plan. Also includes 4,398 and 3,287 shares which are
subject to restrictions on transfer until August 1, 1999 and May 14,
2000 respectively under the terms of the MacDermid 1995 Equity
Incentive Plan. Includes 7,887 shares held in trust by Mr. Leever
for his sons and 202 shares owned by his spouse, as to all of which
Mr. Leever disclaims beneficial interest.
(4) Includes 201,012 shares held by partnerships in which Mr. Smith
is a general partner and 5,000 shares held by Prescott Investors'
Employee Profit Sharing Plan, as to all of which Mr. Smith shares voting
and investment power and 5,578 shares held by Mr. Smith personally.
A portion of the information for Prescott Investors, is taken from
its amended Schedule 13D dated August 3, 1990.
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has furnished the following report on
executive compensation in the fiscal year ended March 31, 1996.
EXECUTIVE OFFICER COMPENSATION
The Compensation Committee is primarily responsible for
implementing MacDermid's overall executive officer compensation policy
ofcompensating MacDermid's executive officers with base salaries
competitive with those of comparable companies, rewarding exceptional
performance where appropriate and providing incentive for future such
performance through incentive bonuses and equity incentives.
MacDermid's executive compensation has three basic components: base
annual salary, incentive bonus and equity incentives (long term
compensation).
In establishing levels of annual salary, incentive bonus and equity
incentives, the Committee generally considers, in order of emphasis, the
following factors: (i) the compensation policies and practices of
competitive and other businesses, (ii) the level and degree of
responsibility of each officer, (iii) the level of compensation and
equity incentives which would be required to attract and hold qualified
and experienced officers, (iv) the individual and collective performance
and achievements of MacDermid's executive officers and (v) MacDermid's
performance, growth and achievements relative to the industries in which
MacDermid competes.
MacDermid uses a comparator group of companies,some of which are
in the specialty chemicals industry, (the "Comparator Group") to serve
as a factor for determining the appropriate cash and equity incentive
components of the program.The companies in the Comparator Group are
selected based upon theirsimilarity to MacDermid, as determined by total
revenue. Earnings trends, return on equity and other performance
measures are compared. The size and composition of the Comparator Group
may change from year to year. The Comparator Group differed from the
group of companies included in the Media General Specialty Chemical stock
index used in the Comparative Stock Performance graph on page 10. The
Media General Specialty Chemical stock index, which consists of
approximately 70 companies, is too unwieldy to use for compensation
purposes because of the large number of companies and their disparate
compensation practices. The Comparator Group is not used in the
performance graph principally because of the need to maintain
consistency in the indices or peer groups used in the graph.
Before considering the other compensation factors discussed above
the Committee targets base annual compensation at a level which,
together with incentive bonuses, would provide cash compensation to
individual executives at below median market compensation levels for
poor corporate performance, at median market compensation levels for
good corporate performance, and above median market compensation levels
for excellent corporate performance.
Executive officers were eligible to receive incentive bonuses
pursuant to MacDermid's Executive Incentive Bonus Plan, the purpose
of which is to motivate executive officers to use their best efforts
to enhance shareholder value through improvements in MacDermid's
financial performance. The Committee uses a formula as a guide in
determining the initial amount of the executive incentive bonus.
The formula utilizes the following three factors, each of which is
given equal weight: (i) the increase in consolidated earnings per
share averaged over the most recent two-year period (the "EPS Change"),
(ii) the relationship of net earnings to net sales ("ROS") and (iii)
the relationship of net earnings to average shareholders' equity
("ROE"). An incentive bonus is paid with respect to a particular
factor only if the EPS Change, ROS or ROE equal or exceed 3%, 4%
and 14%, respectively. The amount of incentive bonus that is actually
paid to executive officers is subject to adjustment by the Committee
based upon individual performance and the results of the individual
business units for which they are respectively responsible.
During the fiscal year ended March 31, 1996 MacDermid's executive
officers were eligible to receive equity incentives (Stock Options or
Restricted Stock Awards) under the MacDermid Special Stock Purchase
Plan (the "Special Stock Purchase Plan") and the MacDermid, Incorporated
1995 Equity Incentive Plan (the "Equity Incentive Plan"). The
Committee administers the Plans, which were approved by MacDermid's
shareholders in 1992 and 1995 respectively, and awards equity incentives
to executives and other employees of MacDermid. The purpose of
awarding equity incentives under the Plans is to enable MacDermid to
attract, retain and motivate its employees to exert their best efforts
to enhance shareholder value by giving them the ability to participate
in the long-term growth of MacDermid. The Committee generally considers
the same factors in establishing the amounts of equity awards for
MacDermid's executive officers as those listed above. The amounts
of the awards are based upon the relative position of each executive
officer within MacDermid and individual performance independent of the
terms and amount of awards previously granted.
Stock Options awarded under the Special Stock Purchase Plan are
in the form of options to purchase a specified number of restricted
shares of MacDermid Common Stock at an exercise price equal to 66.6%
of the market price of the Common Stock on the date of award. The
options are exercisable only during the four-year period beginning on
the date of award. The shares of Common Stock acquired upon any
exercise are treated as restricted stock for a period of four years
commencing on the date of exercise. Such shares may not be sold
during such period (other than to MacDermid at the exercise price)
and must be resold to MacDermid at the exercise price if the
participant's employment with MacDermid is terminated during such
period, except in the case of death, retirement, permanent disability
or involuntary termination without cause. Such restrictions may,
however, be waived by the Committee in its discretion from time to time.
Restricted Stock Awards issued under the Equity Incentive Plan
generally consist of restricted stock awards equal to twenty (20)
percent of the amount of a participant's annual bonus payout awarded
to the participant under the participant's bonus plan in lieu of
payment of the allocable bonus amount plus some additional amount
of matching awards, which amount is determined by the Committee.
The restricted stock awards may not be sold or transferred during a
period of four (4) years from the date of the award. The restricted
stock is forfeited to MacDermid if the participant's employment with
MacDermid is terminated during the restricted period, except in the
case of death, permanent disability, involuntary termination without
cause or retirement. Such restrictions may, however, be waived by
the Committee in its discretion from time to time.
The Committee believes that the Plans allow executive officers
to participate in the enhancement of shareholder value but only
after requiring them to share in the risk of share ownership by
holding restricted stock for a period of four years.
CHIEF EXECUTIVE OFFICER COMPENSATION
The base annual salary and incentive bonus for Daniel H. Leever,
MacDermid's Chief Executive Officer, were determined utilizing the
methods and factors discussed above. Mr. Leever's base annual salary
remained at $275,000 in fiscal 1996. Mr. Leever's base salary has
remained constant at this level for the past two years, with any
potential increase being deferred to the performance based bonus.
Mr. Leever received a bonus for the fiscal year ended March 31, 1996
based on each of the bonus factors, all of which exceeded the minimum
requirements for payment of a bonus. MacDermid's performance during
the fiscal year ended March 31, 1996 placed MacDermid solidly in the
upper quintile of the Comparator Group. Approximately one-half of
the incentive bonus was paid with respect to the EPS change with the
balance attributable to the ROS and the ROE. During fiscal year 1996,
Mr. Leever received a restricted stock award of 4,398 shares of
Common Stock.
Respectfully submitted by,
THE COMPENSATION COMMITTEE
Thomas W. Smith, Chairman
Donald G. Ogilvie
James C. Smith
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table summarizes annual, long-
term and other compensation paid by MacDermid and its subsidiaries
for each of its three fiscal years ended March 31, 1996 to
MacDermid's Chief Executive Officer and four other most highly
compensated executive officers.
Long-Term
Compensation
Annual Compensation Awards
------------------- -----------
Securities All
Underlying Other
Options or Compen-
Name and Year Salary Bonus Restricted Stock sation
principal position ($) ($)<F1> (#)<F2> ($)<F3><F4>
- -----------------------------------------------------------------------
Daniel H. Leever 1996 275,000 448,668 4,398 56,569
President and 1995 275,000 385,000 25,000 47,268
Chief Executive 1994 260,725 125,000 25,000 15,854
Officer
Arthur J. LoVetere,Jr.1996 120,684 160,000 8,414 79,101
Vice President and 1995 - - - -
Chief Financial 1994 - - - -
Officer <F5>
Terrence C. Copeland 1996 145,000 - 1,646 33,185
Vice President <F6> 1995 120,800 144,000 5,000 27,901
1994 119,492 30,000 2,000 21,016
Michael A. Pfaff 1996 145,000 100,000 1,646 30,688
Vice President 1995 123,150 144,000 10,000 23,873
1994 109,969 105,000 5,000 14,480
Peter E. Kukanskis 1996 115,000 40,000 951 22,299
Vice President 1995 104,000 83,200 2,000 16,861
1994 100,000 30,000 2,000 14,400
<FN>
<F1> The bonuses reported were actually paid in the following
fiscal year but calculated and accrued based upon performance in
the fiscal year indicated in each case. 1995 bonuses were adjusted
downward from the 1995 proxy because of the 20% reduction required
by the MacDermid, Incorporated 1995 Equity Incentive Plan which
was approved by the Shareholders at the 1995 Annual Meeting.
<F2> Awarded in fiscal year indicated. For Fiscal 1996, all awards
listed, except for the shares indicated for Mr. LoVetere, consisted of
restricted Stock Awards under the 1995 Equity Incentive Plan. The
8,414 shares noted for Mr. LoVetere consisted of 7,500 options awarded
under the Special Stock Purchase Plan and 914 shares issued under the
1995 Equity Incentive Plan.
<F3> Includes certain amounts which, previous to 1992 would have
been included in MacDermid's contribution to the Profit Sharing Plan.
Employees, generally, have the right to contribute this amount to the
Profit Sharing Plan under 401(k) rules. However, due to limitations
imposed by Internal Revenue Service Rules, certain executive officers
are prevented from making such a contribution and receive the amount
as additional cash compensation. For Fiscal 1996 these amounts were
$19,584, $6,051, $8,670, $8,670 and $5,940 for Messrs. Leever,
LoVetere, Copeland, Pfaff and Kukanskis respectively.
<F4> Amounts listed for 1996 include payments by MacDermid for
premiums for split dollar life insurance in the amounts of $4,384,
$8,198, $5,024, and $5,174 on behalf of, respectively, Messrs.
Leever, Copeland, Pfaff, and Kukanskis; contributions to the
E.S.O.P. in the amounts of $3,750, $3,750, $3,750, and $1,982 on
behalf of, respectively, Messrs. LoVetere, Copeland, Pfaff, and
Kukanskis; contributions to the Profit Sharing Plan in the amounts
of $29,793, $8,015, $11,172, $11,172, and $7,865 on behalf of,
respectively, Messrs. Leever, LoVetere, Copeland, Pfaff, and
Kukanskis; and premiums for term life insurance in the amounts of
$2,808, $967, $1,395, $2,072, and $1,338 on behalf of, respectively,
Messrs. Leever, LoVetere, Copeland, Pfaff, and Kukanskis. The
amount listed for Mr. LoVetere includes $60,318 in reimbursed
moving expenses.
<F5> Reported only for the fiscal year in which Mr. LoVetere
became an executive officer, Fiscal Year 1996.
<F6> Mr. Copeland resigned as an executive officer and employee
of MacDermid effective April 15, 1996.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information with respect to
stock options granted to the Chief Executive Officer and the
named executive officers during the fiscal year ended March 31,
1996.
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------
Percent Potential realizable value at
Number of of total assumed annual rates of stock
securities options price appreciation for option
underlying granted to Exercise Market term <F2>
options employees or base price -----------------------------
granted in fiscal price on date Expiration
Name (#) <F1> year ($/Sh) of grant date 0% ($) 5% ($) 10% ($)
- -----------------------------------------------------------------------------------------------------
Arthur J. 7,500 50% $30.85 $46.25 10/3/99 $115,500 $281,100 $512,175
LoVetere, Jr.
<FN>
<F1> (1) Shares of Common Stock acquired upon exercise of an option
are treated as restricted stock for a period of four years commencing
on the date of exercise. Such shares may not be sold during such
period (other than to MacDermid at the exercise price) and must be
resold to MacDermid at the exercise price if the participant's
employment with MacDermid is terminated during such period, except
in the case of death, retirement, permanent disability or involuntary
termination without cause. Such restrictions may, however, be waived
by the Compensation Committee in its discretion from time to time.
<F2> (2) Amounts are based upon an actual option term together
with a restricted period totaling eight years. At the end of eight
years, the total value of the 2,794,231 shares owned as of March 31,
1996 by the shareholders of MacDermid at 5% and 10% compounding from
the market price on the date of grant would be approximately $68.33
and $99.14 per share or an aggregate value for all shares of
$190,930,000 and $277,019,000, respectively.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information with respect to the
aggregate number of unexercised options held by the Chief Executive
Officer and the named executive officers as of March 31, 1996.
Shares Number of Securities Value of
Acquired Underlying Unexercised
on Unexercised In-the-money
Exercise Options/SARs at Options at
During FY-end (#) <F2> FY-end ($)
Name Fiscal Value Exercisable/ Exercisable/
1996 Realized Unexercisable Unexercisable
# $ <F1> <F2> <F3>
- -----------------------------------------------------------------------------
Daniel H. Leever 12,500 348,100 80,000 3,918,853
Arthur J. LoVetere,Jr 3,000 81,966 7,500 262,688
Terrence C.Copeland 4,000 120,392 12,000 585,872
Michael A. Pfaff 1,268 36,896 20,000 981,130
Peter E. Kukanskis 0 0 10,000 497,911
<FN>
<F1> Value is determined as the spread between the exercise price
and the market price on the date of exercise.
<F2> All options were exercisable on the date of grant and at March
31, 1996.
<F3> Calculated using a market value per share at March 29, 1996 of
$65 7/8, as reported by NASDAQ Stock Market ("NASDAQ").
EMPLOYEES PENSION PLAN
The MacDermid Employees Pension Plan (the "Pension Plan") is
a qualified defined benefit plan. Pension payments may be made
under the Pension Plan upon normal retirement commencing when an
executive reaches age 60 based upon credited years of service up
to a maximum of 30 years. Annual benefits are calculated on a
single-life annuity basis and are subject to offsets for (i) amounts
based on the value of the executive's interest in the Profit Sharing
Plan as of March 31, 1976, if any, and (ii) 0.45% of the lesser of
covered compensation or final average compensation, as defined by
the Internal Revenue Code (the "Code") Section 401(1), multiplied by
the years of service.
Under the MacDermid, Incorporated Supplemental Executive
Retirement Plan (the "Supplemental Plan"), executive officers are
entitled to the difference between the benefits actually paid to them
under the Pension Plan and the benefits which they would have received
under the Pension Plan were it not for certain restrictions imposed
under the Code relating to the amount of benefits payable under the
Pension Plan and the amount of annual compensation which may be taken
into account in determining benefits under the Pension Plan.
Assuming that there are no changes in the Pension Plan and that
participants historically have had earnings at least equal to the
maximum Social Security wage base in each year of employment with
MacDermid, the following table illustrates the estimated annual benefit
payable for life under the Pension Plan and the Supplemental Plan to an
employee retiring at age 60 on March 31, 1996 with maximum service under
the Plan of up to 30 years. These benefits neither reflect an offset for
the participant's March 31, 1976 interest in the Profit Sharing Plan nor
do they recognize a Social Security supplement which is payable under the
Pension Plan until the employee reaches age 65.
ESTIMATED ANNUAL PENSION PAYABLE AT NORMAL
RETIREMENT BASED ON YEARS OF SERVICE INDICATED
- ---------------------------------------------------------------------
Final Average
Earnings 10 Years 15 Years 20 Years 25 Years 30 Years
- ---------------------------------------------------------------------
$150,000 20,899 31,334 41,778 52,223 62,668
$200,000 28,389 42,584 56,778 70,973 85,168
$250,000 35,889 53,834 71,778 89,723 107,668
$300,000 43,389 65,084 86,778 108,473 130,168
$350,000 50,889 76,334 101,778 127,223 152,668
$400,000 58,389 87,584 116,778 145,973 175,168
$450,000 65,889 98,834 131,778 164,723 197,668
$500,000 73,389 110,084 146,778 183,473 220,168
$600,000 88,389 132,584 176,778 220,973 265,168
$700,000 103,389 155,084 206,778 258,473 310,168
Covered compensation under the Pension Plan includes an employee's
annual salary and bonus, which, for the Chief Executive Officer and four
other named executive officers, is set forth in the Summary Compensation
Table. Messrs. Leever, LoVetere, Copeland, Pfaff, and Kukanskis have 15,
7, 9, 14, and 27 years of credited service, respectively, under the
Pension Plan.
COMPARATIVE STOCK PERFORMANCE
The following graph and chart compare, during the five-year
period commencing March 31, 1991 (at the market close) and ending
March 31, 1996, the annual change in the cumulative total return
on MacDermid's Common Stock with the Nasdaq Stock Market (U.S. &
Foreign) and the Media General Specialty Chemicals Stock indices,
assuming the investment of $100 on March 31, 1991 (at the market
close) and the reinvestment of any dividends.
FIVE YEAR CUMULATIVE TOTAL RETURN
(Graph)
(The graph provided here has three data lines. Each line
provides a representation of the cumulative total return achieved on
MacDermid Common Stock, the Nasdaq Stock Market (U.S. and Foreign)
and the Media General Specialty Chemicals Stock indices respectively.
The three lines each begin at $100 and then diverge, connecting each
of their respective five other data points. The lines for the Nasdaq
Stock Market and for Specialty Chemicals are similar and show fairly
even growth from 1991 to 1996. MacDermid's data line generally trails
Nasdaq and Specialty Chemicals through 1994 and, in 1995, increases
to well above the comparator indices by the end of 1995 and through
1996.)
Past share performance should not be viewed as necessarily
indicative of future performance.
Graph Dollar Values 1991 1992 1993 1994 1995 1996
MacDermid, Inc. 100 118 116 114 192 297
NASDAQ 100 105 118 136 145 195
Specialty Chemicals 100 123 127 137 142 165
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND OF MANAGEMENT
The following table sets forth information as of May 31, 1996,
with respect to ownership of common stock by any person known to
MacDermid to be a beneficial owner of more than 5% of its common
stock, by MacDermid's five most highly compensated executive officers
and by all directors and officers of MacDermid as a group. Unless
otherwise noted, each person has sole voting and disposition power
with respect to such person's shares. The total of shares of common
stock beneficially owned by the executive officers includes the right
to acquire ownership through exercise of stock options.
- ----------------------------------------------------------------------
Number of Shares Percent
Beneficial Owner Beneficially Owned of Class
- ----------------------------------------------------------------------
FIVE PERCENT BENEFICIAL OWNERS
Harold Leever 203,832 <F1> 7.30%
366 Guilds Hollow Road
Bethlehem, Connecticut 06751
MacDermid Employees Profit Sharing, 664,285 <F2> 23.80%
Pension and Stock Ownership Plans
245 Freight Street
Waterbury, Connecticut 06702
Thomas W. Smith and 211,590 <F1> 7.58%
Prescott Investors
323 Railroad Avenue
Greenwich, Connecticut 06830
Bank of Boston Corporation 289,375 <F3> 10.37%
100 Federal Street
Boston, Massachusetts 02110
Vanguard/Primecap Fund, Inc. 189,000 <F5> 6.77%
P.O. Box 2600
Valley Forge, PA 19482
Lazard Freres & Co. 139,700 (F4) 5.00%
One Rockefeller Plaza
New York, N.Y. 10020
NAMED EXECUTIVE OFFICERS
Daniel H. Leever 133,749 <F1> <F6> <F7> 4.79%
Arthur J. LoVetere, Jr. 21,481 <F6> <F7> *
Terrence C. Copeland 21,244 <F6> *
Michael A. Pfaff 35,360 <F6> <F7> 1.27%
Peter E. Kukanskis 20,480 <F6> <F7> *
All Directors and Officers 729,894 <F6> <F7> 26.15%
as a group (15 persons)
<FN>
- -----------------------------------------------------------------------
*Less than 1% of shares outstanding
<F1> Additional explanation of the shares beneficially owned by the
Directors is provided in the footnotes under Election of Directors.
<F2> 620,590 shares in the MacDermid Employees Profit Sharing Plan
and in the MacDermid, Incorporated Employee Stock Ownership Plan are
beneficially owned by the Trustee of the plans, Fleet Bank, One
Federal Street, Boston, MA 02211, and 43,695 shares in the MacDermid,
Incorporated Employees Pension Plan are beneficially owned by the
Trustee of the plan, Investors Bank & Trust Company, 24 Federal Street,
Boston, MA 02110. Under the terms of the Profit Sharing Plan and the
ESOP, participants have the right to vote the shares credited to their
accounts; however, the Trustee may, in its discretion, vote any shares
(including unallocated shares) not voted by the participants. The
trustee of the Pension Plan may vote all the MacDermid shares
beneficially owned thereunder.
<F3> The information for Bank of Boston Corporation ("BOB") is taken
from its Schedule 13G dated February 13, 1996. Through its subsidiary,
Bank of Boston Connecticut, BOB has sole voting power with respect to
289,375 shares, shared voting power with respect to no shares, sole
dispositive power with respect to 119,805 shares and shared dispositive
power with respect to 169,570 shares. 146,175 of the shares held by
BOB are also beneficially owned by Mr. Harold Leever. See footnote (1)
under Election of Directors.
<F4> The information for Lazard Freres & Co. is taken from its
Schedule 13G dated February 14, 1996.
<F5> The information for Vanguard Primecap Fund, Inc. is taken
from its Schedule 13G dated February 14, 1996.
<F6> The beneficial owners of these shares generally have sole
voting and investment power. Includes 133,749; 21,481; 21,244;
35,360; and 20,480 shares of Common Stock held by Daniel H. Leever
and Messrs. Lovetere, Copeland, Pfaff, and Kukanskis, respectively,
and 73,943 shares of Common Stock beneficially owned by 12 officers
as a group in MacDermid's Profit Sharing and ESOP Plans. Also
includes 80,000, 7,500, 20,000,and 10,000 shares of Common Stock
which may be acquired upon exercise of options granted to Messrs.
Leever, LoVetere, Pfaff, and Kukanskis respectively, and 165,000
shares of Common Stock in the aggregate which may be acquired
upon exercise of options granted to 11 officers as a group through
MacDermid's Special Stock Purchase Plan.
<F7> Includes 20,000, and 4,000 shares of Common Stock for Messrs.
Leever, and Pfaff, respectively, which are subject to restrictions
on transfer under the Special Stock Purchase Plan, and 7,685, 1,758,
2,320, and 1,244 shares of Common Stock for Messrs. Leever, LoVetere,
Pfaff, and Kukanskis respectively, which are subject to restrictions
on transfer under MacDermid's 1995 Equity Incentive Plan.
INTEREST OF MANAGEMENT AND OTHERS
IN CERTAIN TRANSACTIONS AND FAMILY RELATIONSHIPS
Harold Leever is the Chairman, a Director, and a nominee for Director
of MacDermid. Mr. Leever's son, Daniel H. Leever, is President, Chief
Executive Officer, a Director and a nominee for Director of MacDermid.
ADDITIONAL INFORMATION RELATING TO THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held a total of eight (8) regular meetings
during the 1996 fiscal year. Each of the five current members of the
Board of Directors attended 75% or more of the aggregate number of
meetings of the Board and the committees of which they were members.
The Board has Audit, Compensation, Executive and Nominating Committees.
The Audit Committee recommends independent auditors, reviews the
scope of the audit examination and the independence of the auditors,
reviews and approves non-audit services provided by the auditors,
reviews findings and recommendations of the auditors and management's
response thereto and reviews MacDermid's internal audit function. The
Committee met three (3) times during the 1996 fiscal year. Members of
the Committee are: Thomas W. Smith, Chairman, Donald G. Ogilvie and
James C. Smith.
The Compensation Committee reviews and makes recommendations to
the Board with respect to officer compensation and it administers the
MacDermid, Incorporated Special Stock Purchase Plan and the MacDermid,
Incorporated 1995 Equity Incentive Plan, determining the persons to whom
equity incentives are to be granted, the number of shares to be granted
and the manner in which the exercise price shall be payable. The
Committee, which met six (6) times during the 1996 fiscal year, includes
Mr. Thomas W. Smith, Chairman, Donald G. Ogilvie and James C. Smith.
The Executive Committee may exercise, subject to limitations
prescribed by law, those powers assigned to it by the Board of Directors.
The Committee, which did not meet during the 1996 fiscal year, includes
Harold Leever, Chairman; Daniel H. Leever, Donald G. Ogilvie, Thomas W.
Smith, and James C. Smith.
The Nominating Committee reviews and makes recommendations to the
Board with regard to director nominees. Any shareholder wishing to
recommend a nominee to the Board should do so in writing addressed to
John L. Cordani, Corporate Secretary, MacDermid, Incorporated, 245 Freight
Street, Waterbury, Connecticut 06702-0671. The Committee, which met once
during the 1996 fiscal year, includes Harold Leever, Chairman; Daniel H.
Leever; Donald G. Ogilvie, Thomas W. Smith, and James C. Smith.
Directors who are employees of MacDermid received no compensation in
addition to their salaries and benefits received as employees. Directors
who are not employees were paid $500 for each meeting of the Board
attended, an additional $500 for each meeting of the Board exceeding four
hours duration, $150 for each committee meeting attended not coincident
with a meeting of the Board, a quarterly cash retainer of $750, and an
annual retainer of $2,000 payable in shares of MacDermid Common Stock.
MacDermid provided up to $50,000 group term life insurance for each
outside director for which it paid a total of $635 in premiums during the
1996 fiscal year.
ITEM 2: PROPOSAL TO AMEND THE MACDERMID, INCORPORATED
SPECIAL STOCK PURCHASE PLAN
The Board of Directors proposes that the shareholders approve
certain amendments (the "Amendments") to the MacDermid, Incorporated
Special Stock Purchase Plan (the "Plan") intended to align more closely
the interests of shareholders and MacDermid employees granted options
under the Plan. The Amendments, which are described below, extend the
period during which certain options may be exercised, allow employees
limited use of their options as collateral and provide specific
protections for the exempt status of the Plan under Rule 16b-3 of the
Securities Exchange Act of 1934. The Plan, as proposed to be modified
by the Amendments, is attached to this Proxy Statement as Exhibit A
(capitalized portions are additions to the original Plan and "^" denotes
a deletion therefrom).
The original Plan was approved by the shareholders of MacDermid at
the 1992 Annual Meeting of Shareholders. In February 1996, the Board of
Directors approved the Amendments, subject to shareholder approval.
PRINCIPAL RROVISIONS OF THE ORIGINAL PLAN.
The Plan is administered by a committee of not fewer than two
members of the Board of Directors (the "Committee"), each of whom must
be a "disinterested person" under Rule 16b-3 under the Securities
Exchange Act of 1934, as amended ("Rule 16b-3"). The Committee
determines the persons to whom options are to be granted, the number of
shares to be optioned and the manner in which the option price shall be
payable. Additionally, the Committee may adopt such rules and
regulations as it may deem desirable for administration of the Plan.
Under the Plan, options may be granted for an aggregate, subject
to certain adjustments, of up to 300,000 shares of Common Stock. Such
shares may be treasury shares or may be authorized and unissued shares.
The purchase price per share upon exercise of an option under the Plan
shall be equal to 66.6% of the fair market value of such shares at the
time the option is granted. Any option granted under the Plan may be
exercised only within four years from the date of grant (or, if later,
within four years from the date that the Plan is approved by the
shareholders of MacDermid). However, in the event that a participant
retires, dies or otherwise leaves the employment of MacDermid, any
option held by the participant must be exercised, if at all, as follows:
(i) within three months following retirement in accordance with
MacDermid's established retirement policies, (ii) within six months
following death and (iii) within one month following termination of
employment with MacDermid for reasons other than retirement or death;
provided that in no event may any option be exercised more than four
years after the date of grant (or shareholder approval). Upon request
by a retiring participant, the Committee may extend the three month
period within which his or her options may be exercised.
The shares purchased by a participant upon exercise of an option
must be held and may not be transferred by the participant (except to
MacDermid) for a period of four years commencing on the date of exercise
of the option. In its sole discretion, the Committee may waive the
restrictions against transfer applicable to the shares prior to the
expiration of the four year period.
If a participant's employment with MacDermid is terminated for
any reason other than death, retirement in accordance with MacDermid's
established retirement policies, permanent disability or involuntary
termination without cause while the participant holds shares which are
subject to restrictions on transfer imposed by the Plan, the participant
is required to sell such shares to MacDermid for the price he or she
paid for the shares. However, if a participant's employment is
terminated due to one of the reasons listed in the preceding sentence,
any restrictions on the transfer of shares held by the participant
pursuant to the Plan will lapse and such shares may be freely transferred.
For federal income tax purposes, no taxable income results to the
optionee upon the grant of a stock option under the Plan or upon the
issuance of shares upon the exercise of the option. Correspondingly, no
deduction is allowed to MacDermid upon either the grant or the exercise
of an option. The optionee will be deemed to have received compensation
equal to the difference between the exercise price of the option for the
shares purchased and the fair market value of the shares upon the
expiration of the restrictions described above. If, however, a
participant makes an election under Section 83(b) of the Code within 30
days of the exercise of the option, the participant will realize
ordinary income on the date of exercise equal to the fair market value of
the shares at that time (measured as if the shares were unrestricted and
could be sold immediately) less the exercise price paid for such shares.
If the election is made, no taxable income will be realized when the
shares subject to such election are no longer subject to the restrictions
on transfer. If the shares subject to an election are repurchased by
MacDermid, the participant will not be entitled to any deduction, refund
or loss for tax purposes with respect to the repurchased shares. Upon
sale of the shares after the restrictions on transfer have expired, the
holding period to determine whether the participant has long-term or
short-term capital gain or loss begins when the restriction period
expires (or upon earlier issuance of the shares, if the participant
elected immediate recognition of income under Section 83(b) of the Code.)
Full payment of the exercise price, together with the amount of any
taxes due, must be made at the time any option granted under the Plan is
exercised. Payment may be made in cash, by certified or cashiers check
or, at the discretion of the Committee, by delivery of shares of Common
Stock having a fair market value equivalent to the amount required to be
paid.
Provision is made in the Plan for hardship withdrawals and waiver
of restrictions, at the discretion of the Committee, where there is a
demonstrated need which cannot be satisfied from other reasonably
available resources. Hardship may include medical expenses incurred by
the participant or the participants dependents, payment of tuition for
post-secondary education or expenditures to prevent eviction of the
participant from his or her principal residence.
In the event that MacDermid's outstanding shares of Common Stock
are increased or decreased as the result of a stock dividend, stock
split, recapitalization or other similar event, the number of shares
available for issuance under the Plan, the number of shares issuable
pursuant to any outstanding option and the exercise price of any option
outstanding under the Plan may be adjusted to the extent the Committee
deems appropriate, with the approval of counsel, to preserve the rights
of the participants.
In addition, if MacDermid reclassifies or exchanges outstanding
shares of Common Stock, consolidates or merges with or into another
corporation (other than with a subsidiary controlled by MacDermid)
or otherwise recapitalizes or reorganizes, or sells or conveys to
another corporation all or substantially all of its assets
(collectively referred to herein as "Reorganizations"), each
participant shall have the right upon any subsequent exercise of an
option to acquire the same kind and amount of securities and property
which the participant would have been able to acquire if the
participant had exercised the option immediately before the
Reorganization. In addition, the Committee shall have the right
in connection with any Reorganization to cause any outstanding
options to become immediately exercisable in whole or in part.
If any person or entity owns or acquires, directly or indirectly,
shares of the capital stock of MacDermid entitled to cast 25% or more
of the votes entitled to be cast generally in an election of directors
(other than any such shares owned or acquired by any qualified employee
benefit plan maintained by MacDermid), all restrictions imposed on any
shares of Common Stock pursuant to the Plan will immediately lapse and all
options outstanding under the Plan will become immediately exercisable.
The Board of Directors may amend, suspend, or terminate the Plan
except that no action may be taken which impairs particpants' rights
under outstanding options without their consent and no amendment shall
be made without shareholder approval where such approval is required
under Rule 16b-3. The Committee may substitute new options for options
previously granted to participants, including without limitation,
previously granted options having higher exercise prices.
PROPOSED AMENDMENTS
OPTION PERIOD
The original Plan provides that any option granted may be
exercised only within four (4) years from the date of grant (or, if
later, within four (4) years from the date that the Plan is approved by
the Shareholders). The proposed Amendments would extend this exercise
period for previously granted but unexercised options from four (4)
years to ten (10) years on a share for share basis, depending upon the
number of options previously exercised by a participant at any point in
time. For example, a participant having a total of 10,000 options
granted under the Plan, with 4,000 of those 10,000 exercised, would be
allowed, under the Amendments, an additional six (6) years to exercise
4,000 of the 6,000 remaining options. The final 2,000 options would
expire according to their original terms after four (4) years.
RESTRICTIONS ON SHARES ISSUED UNDER THE PLAN
The original Plan provided that Shares issued upon exercise of
an option under the Plan may not be sold, transferred or otherwise
hypothecated, except to the Company for an amount equal to the price
paid for such Shares upon exercise, for a period of four (4) years
from the date of issuance pursuant to such exercise. The Amendments
would allow participants to pledge such Shares as security for
obligations directly related to the acquisition of shares under the
Plan, during the restriction period, subject to the restrictions on
sale and transfer. Further, the Amendments specify that retirement,
for purposes of the Plan means retirement, in accordance with the
Company's qualified pension plan, at or after the attainment of age
sixty (60). Payment of tuition for post-secondary education has been
deleted as a specifically listed hardship.
AMENDMENT AND TERMINATION; MODIFICATION
The Plan allows the Committee the ability to substitute new
options for options previously granted to participants. The
Amendments add additional clarity by specifying that the Committee
may modify the terms of options previously granted to participants,
provided that no such action may be taken which impairs the rights
of any participant under any outstanding option, without obtaining
the consent of such participant.
SECTION 16 EXEMPTION
The Amendments provide specific protection for the exempt status
of the Plan under Rule 16b-3 of the Securities Exchange Act of 1934
(the "Act"), by specifying that Shares acquired by a Plan participant
who is subject to Section 16 of the Act, may not be sold for six (6)
months after the latter of the grant of the option and, if applicable,
the date on which the exercise period of the option was extended to ten
years pursuant to the Amendments.
In addition, the Amendments prevent any action by the Committee or
the Board if such action would disqualify the Plan from the exemption
provided by Rule 16b-3 or any successor provision.
The Board of Directors adopted the Amendments effective February
13, 1996 subject to the approval of the Shareholders at the 1996 Annual
Meeting of Shareholders. The affirmative vote of the holders of a
majority of the Common Shares of MacDermid represented at the Annual
Meeting of Shareholders is necessary for approval of the Amendments.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
INDEPENDENT ACCOUNTANTS
The independent public accountants for MacDermid for fiscal year
1996 were KPMG Peat Marwick ("KPMG"), which firm had been selected to
be MacDermid's auditors for fiscal year 1996 by the Board of Directors.
At the Meeting, a representative of KPMG will have the opportunity to
make a statement if he or she wishes to do so and will be available to
answer any appropriate questions that may be asked by shareholders.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Shareholder proposals for inclusion in the proxy statement relating
to the 1997 annual meeting must comply in all respects with the rules
and regulations of the Securities and Exchange Commission and be received
at MacDermid's principal executive offices at 245 Freight Street,
Waterbury, Connecticut 06702-0671 no later than February 24, 1997. Such
proposals should be addressed to the attention of John L. Cordani,
Corporate Secretary.
MISCELLANEOUS
The Board of Directors knows of no matters other than those
referenced in the Notice of Annual Meeting which are to be brought
before the Meeting. However, if any other matters are properly
presented, it is the intention of the persons named in the Proxy to
vote the Proxy in accordance with their best judgment.
It is important that Proxies be returned prior to the Meeting.
Shareholders are urged to sign and date the enclosed Proxy and
promptly return it in the enclosed envelope.
June 24, 1996 JOHN L. CORDANI
Corporate Secretary
MacDermid, Incorporated will provide without charge, to any
shareholder, upon written request, a copy of its Annual Report on Form
10-K to the Securities and Exchange Commission for the fiscal year ended
March 31, 1996. Such request should be directed to John L. Cordani,
Corporate Secretary, MacDermid, Incorporated, 245 Freight Street,
Waterbury, Connecticut 06702-0671.
EXHIBIT A
MACDERMID, INCORPORATED
SPECIAL STOCK PURCHASE PLAN
Dated November 15, 1991
(Restated November 1, 1992 and
Amended Effective February 13, 1996)
1. PURPOSES. The purposes of the MacDermid, Incorporated Special
Stock Purchase Plan (the "Plan") are (i) to enable MacDermid,
Incorporated and its subsidiary corporations (hereinafter referred to,
unless the context otherwise requires, as the "Company") to grant to its
employees who are in a position to make a notable contribution to the
welfare of the Company, the means to acquire a proprietary interest in
the Company, in order that such persons will have financial incentives to
contribute to the Company's growth and profitability, and (ii) to enhance
the ability of the Company to attract and retain in its employ individuals
of outstanding ability upon whom the success of the Company will depend.
2. ADMINISTRATION. The Plan shall be administered by a committee
of not fewer than two members of the Board of Directors (the "Committee")
appointed by the Board of Directors of the Company (the "Board"). Each
member of the Committee shall be a "disinterested person" within the
meaning of Rule 16b-3(c) under the Securities Exchange Act of 1934, as
amended (the "Act"). The Committee may adopt such rules and regulations
as it may deem necessary or advisable for the administration of the Plan.
3. GRANT OF AWARDS. Subject to the terms and provisions of the
Plan, options to purchase shares of Common Stock of the Company shall be
granted on behalf of the Company by the Committee.
4. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided
herein, an aggregate of 300,000 shares of the Common Stock of the Company
(the "Common Stock"), shall be available for issuance pursuant to options
granted under the Plan. Such shares may be authorized and unissued shares
or shares held in the Company's treasury. All shares subject to options
that shall have terminated or shall have been forfeited in whole or in
part or canceled for any reason (other than by surrender for cancellation
upon any exercise of all or part of such options) shall be available for
issuance pursuant to options granted subsequently under the Plan.
5. PARTICIPANTS. All employees of the Company who are in a position
to make a notable contribution to its welfare shall be eligible to receive
options and thereby become participants in the Plan. Receipt of an option
shall in no way be deemed to constitute a contract or promise of continued
employment by the Company.
6. OPTION PRICE. The purchase price per share purchasable upon
exercise of an option under the Plan shall be equal to sixty-six and six
tenths percent (66.6%) of the fair market value of such shares at the
time the option is granted, as determined in good faith by the Committee.
7. OPTION PERIOD. Subject to Sections 12 and 13 and the following
provisions of this Section 7, the period for exercising an option (the
"Exercise Period") shall begin with the later of the date of grant of the
option and the date of approval of the Plan by the Company's stockholders
and shall end four (4) years thereafter.
NOTWITHSTANDING THE FOREGOING, AND SUBJECT TO THE APPROVAL OF THE
PLAN AS AMENDED BY THE COMPANY'S STOCKHOLDERS, THE EXERCISE PERIOD FOR
THAT NUMBER OF OPTIONS HELD BY A PARTICIPANT AT THE END OF SUCH FOUR (4)
YEARS (THE "ORIGINAL TERMINATION DATE") THAT IS EQUAL TO THE LESSER OF:
(A) ONE-HALF (1/2) OF THE TOTAL NUMBER OF OPTIONS GRANTED TO SUCH
PARTICIPANT UNDER THE PLAN, AND
(B) THE TOTAL NUMBER OF OPTIONS GRANTED TO SUCH PARTICIPANT UNDER
THE PLAN THAT HAVE BEEN EXERCISED BY THE PARTICIPANT ON OR PRIOR TO
THE ORIGINAL TERMINATION DATE,
SHALL BE EXTENDED AUTOMATICALLY AS OF THE ORIGINAL TERMINATION DATE
FOR AN ADDITIONAL SIX (6) YEARS THEREAFTER.
ALL EXTENSIONS OF THE EXPIRATION DATE OF OUTSTANDING OPTIONS
UNDER THE PLAN WILL BE DOCUMENTED PROMPTLY AFTER THE ORIGINAL
TERMINATION DATE BY THE ISSUANCE OF A NEW STOCK OPTION AGREEMENT,
ALTHOUGH THE FAILURE TO DO SO SHALL NOT BE CONSTRUED TO INVALIDATE
ANY SUCH EXTENSION.
If a participant retires in accordance with the Company's
established retirement policies at any time between the commencement and
the expiration of the Exercise Period, an option shall be exercisable
by him or her only during the three (3) months following his or her
retirement (but in no event after the expiration of the Exercise Period)
and only as to the number of shares, if any, as to which it was
exercisable immediately prior to retirement. At the written request of a
participant, the Committee may, at its sole discretion, extend the period
for exercise of a particular option beyond said three-month period. Any
such request shall be delivered to the Committee at the principal business
office of the Company at least one (1) month prior to expiration of said
three-month period and shall set forth the reasons for the request.
If a participant dies at any time between the commencement and the
expiration of the Exercise Period, an option shall be exercisable by his
or her executor or administrator or, if not so exercised, by the legatees
or the distributees of his or her estate, only during the six (6) months
following his or her death (but in no event after the expiration of the
Exercise Period), and only as to the number of shares, if any, as to
which it was exercisable immediately prior to death.
If a participant ceases to be an employee of the Company for any
reason other than retirement or death at any time between the
commencement and the expiration of the Exercise Period, an option shall
be exercisable by him or her during the thirty (30) days following the
cessation of his or her employment (but in no event after the expiration
of the Exercise Period) and only as to the number of shares, if any, as
to which it was exercisable immediately prior to cessation of employment.
8. PAYMENT FOR SHARES AND RELATED MATTERS. Full payment for shares
purchased, together with the amount of any tax or excise due in respect
of the sale and issue thereof, shall be paid at the time of exercise of
an option and shall be made in cash or by certified or bank cashier's
check or, in the discretion of the Committee, in whole or in part by
delivery of shares of Common Stock of the Company having a fair market
value at the date of such delivery (determined in a manner approved by
the Committee) of not less than the amount for which payment is being
made by delivery of the shares. The Company shall issue no certificates
for shares until (a) full payment therefor has been made and (b) the
participant purchasing such shares provides for payment to (or
withholding by) the Company of all amounts required under then applicable
provisions of the Internal Revenue Code of 1986, as amended, and state
and local tax laws to be withheld with respect to such purchase, and a
participant shall have none of the rights of a stockholder until
certificates for the shares purchased are issued to him or her.
9. RESTRICTIONS ON SHARES ISSUED UNDER THE PLAN. Shares of COMMON
STOCK issued upon exercise of an option under the Plan may not be sold or
otherwise transferred, ^ except to the Company for an amount equal to the
price paid for such shares upon exercise, for a period of four (4) years
from the date of issuance pursuant to such exercise, provided, however,
that the Committee in its sole discretion may determine from time to time
for any reason to waive in whole or in part the restrictions applicable
to any such shares prior to the expiration of such four (4) year period.
NOTWITHSTANDING THE FOREGOING, SUCH SHARES OF COMMON STOCK MAY BE
PLEDGED, SUBJECT TO THE RESTRICTIONS UNDER THIS SECTION 9, AS SECURITY
FOR OBLIGATIONS, DIRECTLY RELATED TO THE ACQUISITION OF SUCH SHARES OF
COMMON STOCK HEREUNDER, PRIOR TO THE EXPIRATION OF SUCH FOUR (4) YEAR
PERIOD, AND NOTHING HEREIN SHALL PREVENT THE PLEDGEE FROM RECOVERING ON
SUCH SECURITY (TO THE EXTENT OF AND CONSISTENT WITH THE PROVISION OF THIS
SECTION 9) IN THE EVENT OF A DEFAULT ON ANY SUCH OBLIGATION.
If the employment of the holder of shares issued upon exercise of
an option under the Plan is terminated for any reason other than death,
retirement in accordance with the Company's ^ QUALIFIED PENSION PLAN AT
OR AFTER ATTAINMENT OF AGE SIXTY (60), permanent disability or
involuntary termination without cause while such shares are subject to
the restrictions described in the immediately preceding paragraph, the
holder shall be required to sell such shares to the Company for the price
paid therefor by the holder, and all rights of the holder with respect to
such shares shall be immediately canceled, unless the Company declines in
writing to purchase such shares.
Notwithstanding the foregoing provisions of this Section 9, if the
employment of the holder of shares issued upon exercise of an option
under the Plan is terminated due to death, retirement in accordance with
the Company's ^ QUALIFIED PENSION PLAN AT OR AFTER ATTAINMENT OF AGE
SIXTY (60), permanent disability or involuntary termination without
cause, the restrictions on such shares shall lapse as of the date of
such event, and such holder shall be free to dispose of the shares
without further restriction.
The restrictions imposed under this Section 9 shall apply as
well to all shares or other securities issued in respect of shares in
connection with any stock split, reverse stock split, stock dividend,
recapitalization, reclassification, spinoff, split-off, merger,
consolidation or reorganization. In the event any stock certificate
is issued in respect of shares awarded upon the exercise of an option
under this Plan, such certificate shall be registered in the name of
the participant, and shall bear an appropriate legend referring to the
terms, conditions and restrictions applicable to such shares.
10. NONTRANSFERABILITY. No option shall be assignable or
transferable by a participant otherwise than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations
order as defined by the Internal Revenue Code of 1986, as amended, or
Title I of the Employee Retirement Income Security Act of 1974, or the
rules thereunder. Each option shall be exercisable during the lifetime
of a participant only by such participant, except that, if permissible
under applicable law, an option may also be exercised by the guardian
or legal representative of a participant.
11. EFFECT OF CHANGES IN COMMON STOCK. In the event that the
outstanding shares of Common Stock of the Company are increased or
decreased as a result of a stock dividend, stock split, recapitalization
or other means having the same effect, the number of shares available
for issuance under the Plan, the number of shares issuable pursuant to
any outstanding option, and the exercise price of any option outstanding
under the Plan, shall be adjusted as the Committee shall deem
appropriate, in its sole discretion and with the approval of counsel, to
preserve unimpaired the rights of the participants. All determinations
made by the Committee hereunder shall be conclusive and binding upon the
participants.
12. EFFECT OF REORGANIZATIONS. In case of any one or more
reclassifications, changes or exchanges of outstanding shares of Common
Stock or consolidations of the Company with, or mergers of the Company
into, other corporations, or other recapitalizations or reorganizations
(other than consolidations with a subsidiary in which the Company is
the continuing corporation and which do not result in any
reclassifications, changes or exchanges of outstanding shares of Common
Stock), or in case of any one or more sales or conveyances to another
corporation of the property of the Company as an entirety, or
substantially as an entirety, any and all of which are hereinafter in
this Section called "Reorganizations," a participant shall have the
right, upon any subsequent exercise of an option, to acquire the same
kind and amount of securities and property which such participant would
then have if such participant had exercised such option immediately
before the first of any such Reorganizations and continued to hold all
securities and property which came to such participant as a result of
that and subsequent Reorganizations, less all securities and property
surrendered or canceled pursuant to any of same, the adjustment rights
in Section 11 and this Section being continuing and cumulative, except
that, anything to the contrary herein contained notwithstanding, the
Committee shall have the right in connection with any Reorganizations,
upon not less than thirty (30) days' written notice to the participants,
to terminate the term of any outstanding options so that, in such event,
all outstanding options may be exercised in whole or in part, only at a
time prior to or simultaneously with the consummation of such
Reorganization. The provisions and term of options held by participants
who are no longer employees of the Company shall not be affected pursuant
to the preceding sentence. In any such event, such options may be
exercised or converted, to the extent permitted by their terms, prior to
or simultaneously with the consummation of such Reorganization.
13. CHANGE IN CONTROL. In the event that at any time after the
effective date of the Plan the Company shall have a "Principal
Stockholder," as hereinafter defined, then notwithstanding anything to
the contrary contained herein, upon the date such event occurs (a) all
restrictions imposed pursuant to Section 9 with respect to shares shall
immediately lapse, and (b) all outstanding options shall be exercisable
immediately in whole or in part.
For purposes of this Section 13, (a) the term "Principal
Stockholder" shall mean any corporation, person, or other entity
("person") owning beneficially, directly or indirectly, shares of the
capital stock of the Company entitled to cast twenty-five percent (25%)
or more of the votes at the time entitled to be cast generally in the
election of Directors by all of the outstanding shares of all classes
of capital stock of the Company (other than any such shares held by any
qualified employee benefit plan maintained by the Company), considered
for purposes of this Section 13 as one class; (b) in determining such
ownership, a person shall be deemed to be the beneficial owner of any
shares of capital stock of the Company which are beneficially owned,
directly or indirectly, by any other person (i) with which it or its
"affiliate" or "associate," as hereinafter defined, has any agreement,
arrangement or understanding for the purposes of acquiring, holding,
voting or disposing of capital stock of the Company or (ii) which is
its "affiliate" or "associate"; (c) a person shall be deemed to be an
"affiliate" of, or affiliated with, a specified person if such person
directly, or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, the person
specified; and (d) the term "associate" used to indicate a relationship
with any person shall mean (A) any corporation or organization (other
than the Company or any subsidiary of the Company) of which such person
is an officer or partner or is, directly or indirectly, the beneficial
owner of ten percent (10%) or more of any class of equity security, (B)
any trusts or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in
a similar fiduciary capacity, and (C) any relative or spouse of such
person, or any relative of such spouse, who has the same home as
such person.
14. HARDSHIP WITHDRAWALS. Notwithstanding anything to the
contrary contained in Section 9 above, the Committee, in its sole
discretion, may waive the restrictions imposed by Section 9 on any
shares issued upon exercise of options under the Plan upon demonstration
by a participant of financial hardship. For purposes hereof, financial
hardship shall mean an immediate and heavy financial need of the
participant such that the waiver of the restrictions imposed by Section
9 is necessary to satisfy that need. Such an immediate and heavy
financial need may be deemed to exist with respect to the following
expenditures:
(a) Medical expenses incurred by the participant or his or her
spouse or dependents (as defined in Section 152 of the Internal
Revenue Code of 1986, as amended);
^
(b) Expenditures to prevent eviction of the participant from his
or her principal residence or foreclosure of a mortgage on the same.
A distribution will be deemed to be necessary to satisfy such
a need only if it is demonstrated on the basis of all the facts and
circumstances that it does not exceed the amount required to satisfy
the need and the need cannot be satisfied from other reasonably
available resources.
15. EFFECTIVE DATE ON PLAN. Subject to the approval of the
shareholders of the Company, the Plan shall be effective on November
19, 1991. Prior to such approval, options may be granted under the
Plan expressly subject to such approval.
16. AMENDMENT AND TERMINATION; MODIFICATION. The Board by
resolution at any time may amend, suspend or terminate the Plan,
provided that (i) no such action shall be taken which impairs the
rights of any participant under any outstanding option, without such
participant's consent, and (ii) no amendment shall be made without
shareholder approval if such approval is necessary to comply with
any applicable tax or regulatory requirement, including any
requirements for exemptive relief under Section 16(b) of the Act, or
any successor provision. The Committee may substitute new options
for, OR MODIFY THE TERMS OF, options previously granted to
participants, including, without limitation, previously granted
options having higher exercise prices, PROVIDED THAT NO SUCH ACTION
SHALL BE TAKEN WHICH IMPAIRS THE RIGHTS OF ANY PARTICIPANT UNDER ANY
OUTSTANDING OPTION, WITHOUT SUCH PARTICIPANT'S CONSENT.
17. SECTION 16 EXEMPTION. NOTWITHSTANDING ANY OTHER PROVISION
OF THE PLAN, IN ORDER TO QUALIFY FOR THE EXEMPTION PROVIDED BY RULE
16B-3 UNDER THE ACT, OR ANY SUCCESSOR PROVISION, ANY SHARES OF COMMON
STOCK ACQUIRED BY A PLAN PARTICIPANT WHO IS SUBJECT TO SECTION 16 OF
THE ACT UPON EXERCISE OF AN OPTION GRANTED UNDER THE PLAN MAY NOT BE
SOLD FOR SIX MONTHS AFTER THE LATTER OF THE GRANT OF THE OPTION AND,
IF APPLICABLE, THE DATE ON WHICH THE EXERCISE PERIOD OF THE OPTION
WAS EXTENDED TO TEN YEARS PURSUANT TO SECTION 7 HEREOF. THE COMMITTEE
AND THE BOARD SHALL HAVE NO AUTHORITY TO TAKE ANY ACTION IF THE
AUTHORITY TO TAKE SUCH ACTION, OR THE TAKING OF SUCH ACTION, WOULD
DISQUALIFY THE PLAN FROM THE EXEMPTION PROVIDED BY RULE 16B-3 UNDER
THE ACT, AND ANY SUCCESSOR PROVISION.
18. INTERPRETATION. The interpretation and construction of
any provision of the Plan and the adoption of rules and regulations
for administering the Plan shall be made by the Committee.
Determinations made by the Committee with respect to any matter or
provision contained in the Plan shall be final, conclusive and
binding upon the Company and upon all participants, their heirs and
legal representatives. Any rule or regulation adopted by the
Committee (whether under the authority of this Section or Section 2
above) shall remain in full force and effect unless and until altered,
amended or repealed by the Committee.
Appendix A
FORM OF PROXY
Front
PROXY MACDERMID, INCORPORATED PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Shareholders -- July 25, 1996 at 3:30 P.M., E.D.T.
At The Marriot Courtyard, 63 Grand Street, Waterbury,Connecticut
The undersigned hereby constitutes and appoints HAROLD LEEVER and
DANIEL H. LEEVER, or either of them, with full power of substitution in
each, attorneys and proxies to act on behalf of the undersigned at said
meeting and at any adjournment thereof (the "Meeting"), with authority
to vote on the following matters all shares of stock which the
undersigned would be entitled to vote at the Meeting if personally
present as directed on the reverse side hereof with respect to the items
set forth in the accompanying Proxy Statement and in their discretion
upon such other matters as may properly come before the Meeting.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY VOTING INSTRUCTION CARD
IN THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
Reverse
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
A vote FOR items 1 and 2 is recommended by the Board of Directors.
1. Election of Directors
Nominees: Harold Leever, Daniel H. Leever,
Donald G. Ogilvie, James C. Smith and
Thomas W. Smith
FOR WITHHOLD FOR ALL (Except Nominee(s)
[ ] [ ] [ ] written below)
2. Approval of the Amendment to the MacDermid, Incorporated
Special Stock Purchase Plan
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, upon any other
matters as may properly come before
the meeting.
AUTHORITY AUTHORITY
GRANTED WITHHELD
[ ] [ ]
This proxy, when properly executed, will be
voted in the manner directed herein by the
stockholder. If no direction is made, this
proxy will be voted FOR the above matters.
Dated:____________________,1996
Signature(s)_____________________________
_____________________________
NOTE: Please sign exactly as name
appears hereon. For joint accounts
both owners should sign. When
signing as executor, administrator,
attorney, trustee, guardian,
corporate officer, etc., please give
your full title.
[Space is provided for a mailing label containing
the shareholder's name, address, account number,
CUSIP number, sequence number and number of shares.]