SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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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)
............................................................................
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[X] No fee required 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.
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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:
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2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
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paid previously. Identify the previous filing by registration statement
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(MacDermid)
(Chevron )
MACDERMID
Incorporated
245 Freight Street
Waterbury, CT. 06702-0671
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 23, 1997
The Annual Meeting of Shareholders of MacDermid, Incorporated
("MacDermid") will be held at the Four Points Sheraton Hotel, 3580 East
Main Street, Waterbury, CT. on Wednesday, July 23, 1997 at 11:00 A.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 a proposed amendment to the MacDermid,
Incorporated 1995 Equity Incentive Plan;
3. To consider and act upon a proposal to approve the material
terms of the performance goals under which annual executive incentive
compensation is determined under the MacDermid, Incorporated Executive
Incentive Compensation Plan; and
4. 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 30, 1997
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 23, 1997 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)
(Chevron)
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 Four Points Sheraton Hotel, 3580 East Main Street,
Waterbury, CT. on Wednesday, July 23, 1997 at 11:00 A.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
1995 Equity Incentive Plan, for approval of the material terms of the
performance goals under which annual executive compensation is determined
under the MacDermid, Incorporated Executive Incentive Compensation Plan,
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 30, 1997 are entitled to notice of and to vote at the Meeting. On that
date there were 8,247,254 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 the approval
of the other items proposed. 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 Stock as 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 23, 1997. MacDermid's Annual
Report to Shareholders, containing financial statements for the fiscal year
ended March 31, 1997, 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
in 1938. He was elected President in 1954 and
Chairman of the Board in 1977. Mr. Leever is
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
579,243 shares - 7.02 (1)
Chairman of the Executive and Nominating Committees.
Age: 83
- --NOMINEES FOR DIRECTOR --
DANIEL H. LEEVER Mr. Leever joined MacDermid in
1982. In 1989, he was appointed Senior Vice
President and Chief Operating Officer. In the
following year, he was appointed President and
Chief Executive Officer. Mr. Leever attended
undergraduate school 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
825,502 shares - 10.01 (2) (3)
Member of the Executive and Nominating Committees
Age: 48
- ----------------------------------------------------
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
and from 1977 to 1980 Associate Dean of Yale
University's School of Organization and Management.
Earlier he held posts in the U.S. Department of
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
2,747 shares - *(2)
Member of the Audit, Compensation, Executive and Nominating Committees.
Age: 54
--NOMINEES FOR DIRECTOR--
JAMES C. SMITH Mr. Smith is Chairman of
the Board and Chief Executive 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
3,623 shares - * (2)
Member of the Audit, Compensation, Executive and Nominating Committees.
Age: 48
- ----------------------------------------------------------------------------
THOMAS W. SMITH Mr. Smith is and since 1973
has been the General Partner of Prescott
Investors. He is on the board of directors
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 - General Partner of
Prescott Investors.
Director since 1989
635,003 shares - 7.70 (4)
Chairman of the Audit and Compensation Committees and a member of the
Executive and Nominating Committees
Age: 69
- ---------------------------------------------------------------------------
* Indicates less than 1% of the outstanding shares of Common Stock.
Notes to Election of Directors
<1> Includes 65,700 shares owned by his wife, Ruth Ann Leever, as to
all of which shares Mr. Leever disclaims any beneficial interest, and 16,811
shares held by MacDermid's Profit Sharing and Employee Stock Ownership
Plans. Mr. Leever has sole voting power with respect to 497,032 shares.
The Bank of Boston Connecticut, Mr. Daniel Leever and Mr. Thomas Leever
as co-trustees of certain trusts, may have or succeed to the rights to
vote 406,620 shares. A portion of the information for Mr. Leever
was obtained from his amended Schedule 13G dated January 29, 1997.
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 30,079 shares held by MacDermid's Profit Sharing and
Employee Stock Ownership plans, 22,500 shares which are subject to
restrictions on transfer until May 30, 1998, 37,500 shares which are
subject to restrictions on transfer until May 18, 1999 and 10,000 shares
which are subject to restrictions on transfer until June 14, 2000 under the
terms of the Special Stock Purchase Plan and 210,000 shares which may
be acquired upon exercise of options granted under the Special Stock
Purchase Plan. Also includes 13,194, 9,861, and 13,496 shares which
are subject to restrictions on transfer until August 1, 1999, May 14, 2000
and May 14, 2001 respectively under the terms of the MacDermid 1995
Equity Incentive Plan. Includes 24,901 shares held in trust by Mr. Leever
for his sons and 1,130 shares owned by his spouse, as to all of which
Mr. Leever disclaims beneficial interest. This also includes 406,620
shares held by certain trusts established by Mr. Harold Leever, of which
Mr. Daniel Leever is co-trustee.
<4> Includes 603,036 shares held by partnerships in which Mr. Smith is
a general partner and 15,000 shares held by Prescott Investors' Employee
Profit Sharing Plan, as to all of which Mr. Smith shares voting and
investment power and 16,967 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, 1997.
EXECUTIVE COMPENSATION
The Compensation Committee is primarily responsible for
MacDermid's overall executive compensation policy of compensating
MacDermid's officers competitively with those of comparable companies,
rewarding exceptional performance where appropriate and providing
incentive for future performance through cash incentive payments and
equity incentives. MacDermid's executive compensation has three basic
components: base annual salary, short-term cash 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) MacDermid's performance, or in the case of
Division or Group executives, the division's or group's performance,
relative to Committee expectations, (ii) the performance and achievements of
MacDermid's executives, individually, and as a group, (iii) the
responsibilities of each executive, (iv) the compensation practices of
peer companies, and (v) the level of cash compensation and equity
incentives required to attract and hold qualified executives.
MacDermid uses a comparator group of specialty chemical
companies, (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 their
similarity to MacDermid, relative complexity and scope. 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 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
or unit performance, at median market compensation levels for good
performance, and above median market compensation levels for
excellent performance.
Corporate executive officers were eligible to receive
incentive bonuses pursuant to MacDermid's short-term Executive
Incentive Plan, the purpose of which is to motivate executives to
use their best efforts to enhance shareholder value
through improvements in MacDermid's financial performance. The Committee
uses a formula 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 corporate executive officers is subject to adjustment by the
Committee based upon individual performance.
Division (or Group) executives are eligible to receive
incentive bonuses based on the financial performance of their
respective business units based upon similar factors as they apply
to the respective business units. The amount of incentive bonus
that is actually paid to division executives is subject to
adjustment by the Committee based upon individual performance.
During the fiscal year ended March 31, 1997 MacDermid's
executives 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.
Restricted Stock Awards issued under the Equity Incentive
Plan consist of restricted stock having a fair market value equal
to twenty (20) percent of the participant's annual bonus amount made
in lieu of the allocable bonus amount plus a matching portion
equal to a multiple or fraction of the shares awarded in
lieu of the allocable bonus amount. 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.
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 generally exercisable only during the four-year
period beginning on the date of award. However, at the 1996
Annual Meeting, the shareholders approved amendments
to the Special Stock Purchase Plan which may extend the foregoing exercise
period under certain conditions. 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. The Special
Stock Purchase Plan has not been utilized to award options during the last
fiscal year. Fifty Five Thousand Five Hundred Shares remain available
for granting options under the Special Stock Purchase Plan as of May 30, 1997.
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 compensation for Daniel H. Leever, MacDermid's Chief Executive Officer,
was determined utilizing the methods and factors discussed above.
Mr. Leever's base annual salary remained at $275,000 in fiscal 1997.
Mr. Leever's base salary has remained constant at this level for the past
three years. Annual inflationary increases of three percent (3%)
in each of the last three fiscal years, have been deferred and may
be paid with the short-term cash incentive if MacDermid reaches the
minimum performance levels in all categories of the short term cash
incentive plan. Mr. Leever received a bonus for the fiscal
year ended March 31, 1997 based on each of the bonus factors, all of
which exceeded the minimum requirements for payment of a bonus.
MacDermid's performance during the fiscal year ended March 31, 1997
placed MacDermid solidly in the upper quintile of the Comparator Group.
During fiscal year 1997, Mr. Leever received a restricted stock award
of 9,861 shares of Common Stock.
Respectfully submitted by,
THE COMPENSATION COMMITTEE
Thomas W. Smith, Chairman
Donald G. Ogilvie
James C. Smith
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table summarizes annual,
long-term and other compensation paid by MacDermid and its
subsidiaries for each of its three fiscal years ended March 31, 1997
to MacDermid's Chief Executive Officer and four other most highly
compensated officers.
Long-Term
Compensation
Annual Compensation Awards
.................... ............
Securities
Underlying
Options or All other
Name and Year Salary Bonus Restricted Stock Compensation
principal position ($) ($)<F1> (#)<F2> ($)<F3><F4>
____________________________________________________________________________
Daniel H. Leever 1997 275,000 601,340 9,861 33,162
President and 1996 275,000 448,668 13,194 56,569
Chief Executive 1995 275,000 385,000 75,000 47,268
Officer
Arthur J. LoVetere,Jr. 1997 155,000 170,430 5,274 20,083
Executive Vice 1996 120,684 160,000 25,242 79,101
President and Chief 1995 - - - -
Financial Officer <F5>
Michael A. Pfaff 1997 154,000 98,600 2,022 79,870
Vice President 1996 145,000 100,000 4,938 30,688
1995 123,150 144,000 30,000 23,873
Patricia I. Janssen 1997 146,614 93,800 1,056 24,948
Vice President<F5> 1996 38,679 34,000 22,500 1,869
1995 - - - -
Gregory Bolingbroke 1997 90,125 72,100 1,494 17,193
Controller 1996 82,500 68,000 0 14,321
1995 51,742 30,000 0 6,895
<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 those reported in 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 years 1996
and 1997, all awards listed, except for the shares indicated for
Mr. LoVetere in fiscal 1996, consisted of restricted Stock Awards
under the 1995 Equity Incentive Plan. The 25,242 shares noted for
Mr. LoVetere in fiscal 1996 consisted of 22,500 options awarded under
the Special Stock Purchase Plan and 2,742 shares issued under the
1995 Equity Incentive Plan. The amount for each of the fiscal
years have been adjusted for the 3 for 1 Stock Split which
occurred on November 15, 1996.
<F3> For Fiscal Years through 1996 this 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.
<F4> Amounts listed for 1997 include payments by MacDermid
for premiums for split dollar life insurance in the amounts of $4,384
and $7,717 on behalf of, respectively, Messrs. Leever, and Pfaff,;
contributions to the E.S.O.P. in the amounts of $5,615, $6,661, $4,250,
$4,750, and $5,250 on behalf of, respectively, Messrs. Leever, LoVetere,
Pfaff, Janssen and Bolingbroke; contributions to the Profit Sharing Plan
in the amounts of $2,250, $2,250, $2,250, $2,250, and $2,250 on
behalf of, respectively, Messrs. Leever, LoVetere, Pfaff, Janssen
and Bolingbroke; contributions to the Supplemental Executive
Retirement Plan for supplemental profit sharing contributions
of $8,605, $2,475, $1,560, $459 and $122 for Messrs.
Leever, LoVetere, Pfaff, Janssen and Bolingbroke; and premiums
for term life insurance in the amounts of $2,808, $967, $1,395,
$1,338, and $2,072 on behalf of, respectively, Messrs. Leever,
LoVetere, Pfaff, Janssen and Bolingbroke. The amount listed
for Mr. LoVetere in 1996 includes $60,318 in reimbursed
moving expenses. The amount listed for Mr. Pfaff in 1997
includes $56,758 of deemed compensation which arose from
option shares exercised four years earlier and for which the
restrictions on transfer lapsed this year.
<F5> Reported only for the relevant fiscal years in
which Mr. LoVetere and Ms. Janssen were executive officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information with respect to
the aggregate number of unexercised options held by the Chief Executive
Officer and the named officers as of March 31, 1997.
Number of
Securities Value of
Shares Underlying Unexercised
Acquired Unexercised In-the-money
on Exercise Options/SARs Options at
During FY-end FY-end
Fiscal Value (#)<F2> <F3> Exercisable/
1997 Realized Exercisable/ Unexercisable
Name ($)<F3> ($)<F1> Unexercisable (S)<F2><F4>
- -----------------------------------------------------------------------
Daniel H. Leever 30,000 331,250 210,000 6,109,523
Arthur J. LoVetere,Jr 0 0 22,500 550,500
Michael A. Pfaff 15,000 299,247 45,000 1,388,925
Gregory Bolingbroke 0 0 0 0
Patricia Janssen 0 0 22,500 544,256
<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, 1997.
<F3> Reflects a 3 for 1 stock split which occurred on
November 15, 1996.
<F4> Calculated using a market value per share at March 31, 1997
of $34 3/4, 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, 1997 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 20,796 31,194 41,593 51,991 62,389
$200,000 28,296 42,444 56,593 70,741 84,889
$250,000 35,796 53,694 71,593 89,491 107,389
$300,000 43,296 64,944 86,593 108,241 129,889
$350,000 50,796 76,194 101,593 126,991 152,389
$400,000 58,296 87,444 116,593 145,740 174,889
$450,000 65,796 98,694 131,593 164,491 197,389
$500,000 73,296 109,944 146,593 183,241 221,889
$600,000 88,296 132,444 176,593 220,741 264,889
$700,000 103,296 154,944 206,593 258,241 309,889
$800,000 118,296 177,444 236,593 295,741 354,889
$900,000 133,296 199,944 266,593 333,241 399,889
Covered compensation under the Pension Plan includes an
employee's annual salary and bonus, which, for the Chief Executive
Officer and four other named officers, is set forth in the Summary
Compensation Table. Messrs. Leever, LoVetere, Pfaff, Janssen
and Bolingbroke have 16, 8, 15, 2 and 5 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, 1992 (at the market close) and
ending March 31, 1997, 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, 1992 (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 1992 to 1997.
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 continues to
reflect superior comparative performance through 1997.)
Past share performance should not be viewed as necessarily
indicative of future performance.
Graph Dollar Values 1992 1993 1994 1995 1996 1997
MacDermid, Inc. 100 98 97 163 253 403
NASDAQ 100 112 129 137 185 206
Specialty Chemicals 100 104 112 116 135 140
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND OF MANAGEMENT
The following table sets forth information as of May 30, 1997,
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 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 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 579,243 <F1> 7.02%
366 Guilds Hollow Road
Bethlehem, Connecticut 06751
MacDermid Employees Profit Sharing, 1,934,719 <F2> 23.46%
Pension and Stock Ownership Plans
245 Freight Street
Waterbury, Connecticut 06702
Thomas W. Smith and 635,003 <F1> 7.70%
Prescott Investors
323 Railroad Avenue
Greenwich, Connecticut 06830
Bank of Boston Corporation 704,142 <F3> 8.53%
100 Federal Street
Boston, Massachusetts 02110
Vanguard/Primecap Fund, Inc. 567,000 <F5> 6.88%
P.O. Box 2600
Valley Forge, PA 19482
Daniel H. Leever 825,502 <F1> 10.01%
133 Railtree Hill Road
Woodbury, CT. 06798
Thomas M. Leever 472,726 <F4> 5.73%
R.R. Box 230
Perkinsville, VT. 05151
NAMED EXECUTIVE OFFICERS
Daniel H. Leever 825,502 <F1> <F6> <F7> 10.01
Arthur J. LoVetere, Jr. 69,504 <F6> <F7> *
Michael A. Pfaff 107,611 <F6> <F7> 1.30
Gregory Bolingbroke 11,170 <F6> <F7> *
Patricia I. Janssen 25,327 <F6> <F7> *
All Directors and Officer 2,131,476 <F6> <F7> 25.84
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> 1,743,788 shares in the MacDermid Employees Profit
Sharing Plan and in the MacDermid, Incorporated Employee Stock
Ownership Plan and 59,846 shares in the MacDermid Imaging
Technology, Inc. Profit Sharing and Employee Stock Ownership
Plans are beneficially owned by the Trustee of the plans, Fleet Bank,
One Federal Street, Boston, MA 02211, and 131,085 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 14, 1997.
Through its subsidiary, Bank of Boston Connecticut, BOB has
sole voting power with respect to 275,430 shares, shared voting
power with respect to 428,712 shares, sole dispositive power with
respect to 208,003 shares and shared dispositive power with respect
to 406,620 shares.
<F4> Includes 406,620 shares held by certain trusts established
by Mr. Harold Leever, of which Mr. Thomas Leever is co-trustee.
<F5> The information for Vanguard Primecap Fund, Inc.
is taken from its Schedule 13G dated February 10, 1997.
<F6> The beneficial owners of these shares generally have
sole voting and investment power. Includes 825,502; 69,504; 107,611; 11,170;
and 25,327 shares of Common Stock reported for Daniel H. Leever and Messrs.
LoVetere, Pfaff, Bolingbroke and Janssen, respectively, and 177,765 shares of
Common Stock beneficially owned by 12 officers as a group in MacDermid's
Profit Sharing and ESOP Plans. Also includes 210,000, 22,500, and 45,000
shares of Common Stock which may be acquired upon exercise of options
granted to Messrs. Leever, LoVetere, and Pfaff, respectively, and 351,000
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 90,000, 27,000, and 22,500 shares of Common
Stock for Messrs. Leever, Pfaff and Janssen, respectively, which are subject
to restrictions on transfer under the Special Stock Purchase Plan, and
36,551, 9,238, 8,106, and 2,149 and 2,332 shares of Common
Stock for Messrs. Leever, LoVetere, Pfaff, Janssen and Bolingbroke
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 five (5) regular meetings
during the 1997 fiscal year. Each of the five current members of the
Board of Directors attended 80% 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 two (2) times during the 1997
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, the conditions of the grant, and the manner
in which the exercise price shall be payable. The Committee, which
met one (1) time during the 1997 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 1997 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 1997 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 $8,000 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 1997 fiscal year.
ITEM 2
PROPOSAL TO AMEND THE MACDERMID, INCORPORATED
1995 EQUITY INCENTIVE PLAN
The Board of Directors recommends that the shareholders approve
certain amendments (the "Amendments") to the MacDermid, Incorporated 1995
Equity Incentive Plan (the "Plan") intended to (i) increase the number
of shares available for issuance under the Plan from 150,000
(taking into account the 3 for 1 stock split which occurred on
November 15, 1996) to 300,000 shares, and (ii) increase the number
of shares issuable under the Plan in any one year from 25,000 to 50,000
shares. The Board of Directors of the Company adopted the proposed
Amendments, subject to shareholder approval, at a board
meeting held on May 13, 1997.
The Board of Directors is of the opinion that the Plan has been of
significant importance and benefit to the Company and its shareholders in
enabling the Company to attract and retain officers and other key employees
and in aligning their interests with the interests of the shareholders.
In the view of the Board of Directors, the proposed Amendments will
enable the Company to continue to realize the benefits of the
restricted stock grants made under the Plan.
A summary of the proposed Amendments is set forth below, followed
by a description of the terms of the Plan. The full text of the amended
Plan is annexed to this proxy statement as Exhibit A, and the summary
is qualified in its entirety by reference to Exhibit A.
Amendments
Shares subject to the Plan. The Plan as originally approved by the
stockholders at the July 20, 1995 Annual Meeting of Shareholders provided
for 50,000 shares of Common Stock to be available for issuance under the Plan.
Because of the three for one stock split which occurred on November 15, 1996,
the number of shares issuable under the Plan was adjusted to 150,000. The
proposed Amendments increase the number of shares of the Company's
Common Stock issuable under the Plan as restricted stock grants to
300,000 shares. At May 30, 1997 there were 12,852 shares remaining in
the Plan for restricted stock grants.
Grant of Awards. The Plan as originally approved provided that a
maximum of 25,000 shares of restricted stock could be awarded by the
Committee in any one year. In view of the three-for-one stock split
which occurred on November 15, 1996, the proposed amendment
increases the maximum number of restricted shares awardable annually
under the Plan to 50,000.
Summary of the Plan
The principal provisions of the Plan are summarized below. This
summary is qualified in its entirety by reference to the Plan, a copy of
which is attached hereto as Exhibit A.
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 "non-employee director" within the meaning of Rule 16b-3(c) under the
Securities Exchange Act of 1934, as amended ("Rule 16b-3") and an
"outside director" within the meaning of section 162(m)(4)(c)(i) of the
Internal Revenue Code (the "Code"). The Committee may adopt such rules
and regulations as it may deem desirable for administration of the Plan.
Under the Plan, as amended in the manner proposed for consideration,
restricted shares 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. Not more
than 50,000 restricted shares (as amended by the proposal) may be issued
under the Plan in any one year. On May 30, 1997, the closing price
of a share of MacDermid stock on the Nasdaq National Market
was $45-1/4. A participant who is awarded restricted stock will have no
rights with respect to such award unless the participant accepts the
award by written instrument delivered to the Company. Subject to
certain exceptions, all shares of restricted stock issued under the Plan
must be held and cannot be sold or otherwise transferred by the
participant (except to MacDermid for the price paid therefor) for a
period of four (4) years from the date of the award. In its sole discretion,
the Committee may waive the restrictions against transfer applicable to
the shares prior to the expiration of the four (4) year period.
Under the Plan the Committee will select the appropriate
individuals who will participate. Subject to the provisions of the
Plan the Committee will then determine the size of the award of
restricted stock ("Restricted Stock"), the conditions under which
the award will be made, the purchase price to be paid, and the
restrictions to be placed upon the shares. In the case of a
participant who also participates in a MacDermid annual bonus
plan, an award, if any, will be comprised of Restricted Stock
having a fair market value equal to twenty percent (20%) of
the annual bonus payout awarded to the participant under
the applicable bonus plan and will be made in lieu of the
allocable bonus amount. The Committee in its discretion
may also award such a participant an additional number of
shares as long-term compensation in any multiple or fraction
of the number of shares awarded in lieu of the allocable bonus
payout. The total annual award to any participant in any
one year may not exceed an amount equal to that participant's
annual bonus payout for such year. A participant will have all
the rights of a stockholder with respect to the Restricted Stock
awarded to him or her including voting and dividend rights,
subject to any applicable restrictions on transfer and MacDermid
repurchase rights, and subject to any other conditions contained in the award.
If a participant's employment by MacDermid is terminated for any
reason other than death, retirement in accordance with MacDermid's
qualified pension plan at or after attainment of age sixty (60),
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, at MacDermid's option,
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
death or permanent disability any restrictions on the transfer of shares
held by the participant pursuant to the Plan will lapse and such shares
may be freely transferred.
If a participant's employment is terminated by retirement in
accordance with MacDermid's qualified pension plan at or after attainment
of age sixty (60) while the participant holds shares which are subject to
restrictions on transfer imposed by the Plan, the participant will be
required to sell such shares to MacDermid for the price paid therefor if
the Committee, determines that the participant has engaged in
misconduct, or if the participant competes with MacDermid
within the restriction period. If the employment of a holder of
shares of Restricted Stock is terminated due to involuntary termination
without cause, while the shares are subject to restrictions, the
restrictions on such shares will be deemed to have lapsed in
annual installments of twenty-five (25) percent on the first
anniversary of the date of award of such shares and
twenty-five (25) percent on each of the next three anniversaries
of such date. Provision is made in the Plan for waiver of restrictions,
at the discretion of the Committee.
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 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 or otherwise recapitalizes or reorganizes (other than with a
subsidiary controlled by MacDermid), or sells or conveys to another
corporation all or substantially all of MacDermid's assets (each a
"Reorganization"), a Plan participant will have the right upon receipt of
shares pursuant to an award to acquire the same kind and amount of
securities and property which the participant would have been able to
acquire if the participant had received such shares immediately before
the Reorganization. In addition, the Committee will have the right in
connection with any Reorganization to terminate all outstanding awards
and/or to remove restrictions from some or all outstanding shares of
restricted stock.
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 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 issued pursuant to the Plan will immediately lapse unless
all members of the Board, who were members before such event and who
comprise a majority of the Board of Directors, determine otherwise by
unanimous vote.
The Board of Directors may amend, suspend, or terminate the Plan
except that no action may be taken which impairs participants' rights
under outstanding awards without their consent and no amendment may be
made without shareholder approval where such approval is required under
Rule 16b-3. The Committee may substitute new awards for awards previously
granted to participants.
A recipient of Restricted Stock generally will be subject to tax at
ordinary income rates on the fair market value of the stock at the time
the stock is no longer subject to forfeiture, less any amount paid for
the stock. However, a recipient who makes an election under Section
83(b) of the Code within 30 days of the date of issuance of the
Restricted Stock will realize ordinary income on the date of issuance
equal to the fair market value of the shares of Restricted Stock at that
time (measured as if the shares were unrestricted and could be sold
immediately), less any amount paid for the stock. If the election is
made, no taxable income will be recognized when the shares subject to the
election are no longer subject to forfeiture. If the shares subject to
the election are forfeited, the recipient will not be entitled to any
deduction, refund or loss for tax purposes with respect to amounts
previously included in income. Subject to the limitations of Section
162(m) of the Code, MacDermid, in general, will be entitled to a
deduction equal to the amount of income recognized by the recipient in
respect of the transfer of the shares of Restricted Stock. The holding
period to determine whether the recipient has long-term or short-term
capital gain or loss upon sale of the shares after the forfeiture period
has expired begins when the restriction period expires (or upon earlier
issuance of the shares, if the recipient elected immediate recognition of
income under Section 83(b) of the Code).
The choice of individuals who will participate in the Plan is
subject to the discretion of the Committee. In addition, any award made
is subject to acceptance by the participant in accordance with its terms.
As a result, it is not possible to indicate at this time the specific
awards which may be received hereafter by any individual participant or
groups of participants under the Plan.
The Board of Directors recommends a vote "for" adoption of the
proposed Amendment to the MacDermid, Incorporated 1995 Equity
Incentive Plan. 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 this proposal.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR THIS PROPOSAL
ITEM 3
PROPOSAL TO APPROVE THE MATERIAL TERMS OF THE
PERFORMANCE GOALS UNDER WHICH ANNUAL EXECUTIVE
COMPENSATION IS DETERMINED UNDER THE MACDERMID,
INCORPORATED EXECUTIVE INCENTIVE COMPENSATION PLAN.
General
The Board of Directors seeks shareholder approval of the material terms
of the performance goals under which annual executive incentive
compensation is determined under the MacDermid, Incorporated
Executive Incentive Compensation Plan (the "Plan"). The
Compensation Committee of the Board of Directors (the "Committee")
administers the Plan. Officers of the Company designated by the Committee
are eligible to receive annual awards of performance-based incentive
compensation under the Plan.
Shareholder approval is sought so that incentive compensation
which is paid under the Plan to a "covered employee" (as defined in
Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code")) will be fully deductible by the Company. Without
shareholder approval of the material terms, no amount will be paid
pursuant to the Plan to any "covered employee".
Section 162(m) of the Code prohibits the deduction by publicly
held corporations of certain employee compensation exceeding one
million dollars per year which is paid to a "covered employee", unless
specified conditions are satisfied. To be deductible, such compensation
must be paid solely on account of the attainment of one or more
performance goals established by, and the achievement of which is
certified by, a compensation committee consisting of two or more
"outside directors" (within the meaning of Section 162(m)). In addition,
the material terms of the performance goals used to determine the
performance-based compensation for "covered employees" must be
disclosed to and approved by the shareholders prior to payment of
such performance-based compensation.
Material Terms of the Plan
Each year, the Committee (which consists of two or more
"outside directors") will determine which officers will participate
under the Plan and will set target goals for payments of target
incentive compensation awards based solely upon one or more
of the following factors: Earnings per Share Change, Return on Sales,
and Return on Equity. These goals may be set on a corporate,
subsidiary or business unit basis. The Committee will set the
specific targets annually, not later than ninety (90) days after the
beginning of the Company's fiscal year. The specific targets
for the performance goals will not be disclosed because the
Committee has determined that the targets are confidential business
information and their disclosure would adversely affect the Company.
Annual incentive compensation may consist of cash bonus awards
under the MacDermid, Incorporated Executive Incentive Compensation Plan
and/or restricted stock grants under the MacDermid, Incorporated
1995 Equity Incentive Plan. The amount of annual incentive compensation
payable may be adjusted by pre-established objective formulas in
relation to the degree to which the applicable performance goals are
achieved or exceeded. However, unless the minimum threshold goals
are attained in a particular fiscal year of the Company, no annual
incentive compensation will be paid to any "covered employee" for
that year. The maximum amount of annual incentive compensation
which may be paid to any participant under the Plan with respect to
any fiscal year of the Company will be the lesser of (i) 300% of the
participant's fiscal-year-end salary, including any deferred increases,
plus any matching restricted stock grant awarded under the
MacDermid, Incorporated 1995 Equity Incentive Plan; or (ii) 2 million
dollars, with any restricted stock grant valued, for this purpose, based
upon the fair market value of the shares, at the time of granting, as
determined by the Committee.
The amount of incentive compensation paid to any participant with
respect to any particular year, however, may be less than the
amount determined under the applicable objective formula if such
lesser amount is determined to be appropriate by the Committee, in
its discretion. Further, the amount of incentive compensation paid
to a participant who is not a "covered employee" with respect to a particular
year may be greater than the amount determined under the applicable
objective formula, if such greater amount is determined to be appropriate
by the Committee, in its discretion.
The Company may at any time and from time to time amend or
terminate the Plan; provided, however, that no amendment which
requires shareholder approval in order for an award under the Plan
which is intended to comply with Section 162(m) of the Code to
continue to comply therewith will be effective without the requisite
vote of the shareholders of the Company.
The Board of Directors recommends a vote for approval of the
material terms of the performance goals under which annual executive
compensation is determined under the MacDermid, Incorporated
Executive Incentive Compensation Plan. Approval of this proposal
will require the affirmative votes of a majority of the common shares
which are represented at the Annual Meeting of Shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THIS PROPOSAL
INDEPENDENT ACCOUNTANTS
The independent public accountants for MacDermid for fiscal
year 1997 were KPMG Peat Marwick("KPMG"), which firm had been
selected to be MacDermid's auditors for fiscal year 1997 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 1998 ANNUAL MEETING
Shareholder proposals for inclusion in the proxy statement
relating to the 1998 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 23, 1998. 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 23, 1997 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, 1997. Such request should be directed to
John L. Cordani, Corporate Secretary, MacDermid, Incorporated,
245 Freight Street, Waterbury, Connecticut 06702-0671.
EXHIBIT A
MACDERMID, INCORPORATED
1995 EQUITY INCENTIVE PLAN
1. Purposes. The purposes of the MacDermid, Incorporated 1995
Equity Incentive Plan (the "Plan") are (a) to enable MacDermid,
Incorporated and its subsidiary corporations (hereinafter referred to,
unless the context otherwise requires, as the "Company") to provide to
its employees the means to acquire a proprietary interest in the Company,
in order that such persons will have additional financial incentives to
contribute to the Company's growth and profitability, and (b) to
enhance the ability of the Company to attract and retain individuals of
outstanding ability upon whom the success of the Company will depend.
The Plan is intended to accomplish these goals by enabling the Company to
grant awards ("Awards") in the form of restricted stock, all as more
fully described below.
2. Administration. The Plan shall be administered by a committee of
not fewer than two members of the Board of Directors of the Company (the
"Board"). Each member of the Committee shall be a "non-employee director"
within the meaning of Rule 16b-3(c) under the Securities Exchange Act
of 1934, as amended (the "Act") and an "outside director" within the
meaning of Section 162(m)(4)(C)(i) of the Internal Revenue Code
of 1986, as amended (the "Code") and applicable Treasury
regulations thereunder. The Committee may adopt such rules
and regulations as it may deem necessary or advisable for the
administration of the Plan. The Committee 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 or any successor provision.
3. Participants. All employees of the Company shall be eligible to
receive Awards and thereby become participants in the Plan. In granting
Awards the Committee may include or exclude previous participants in the
Plan as the Committee may determine. Receipt of an Award shall in
no way be deemed to constitute a consent to or promise of continued
employment by the Company.
4. Shares Subject to the Plan. Subject to adjustment as provided
herein, an aggregate of up to 300,000 shares of the Common Stock,
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without par value per share (the "Common Stock"), shall be available for
issuance under the Plan. Such shares may be authorized and unissued
shares or shares held in the Company's treasury. If any Award in
respect of shares of Common Stock is forfeited for any reason or settled
in a manner that results in fewer shares of Common Stock
outstanding than were initially awarded, including without limitation
the surrender of shares of Common Stock in payment of any tax
obligation on the Award, the shares of Common Stock subject to
such Award or so surrendered, as the case may be, to the extent of
such forfeiture or decrease, shall again be available for award under
the Plan.
5. Grant of Awards.
(a) Subject to the provisions of the Plan, the Committee may
award shares of restricted stock to a participant under the Plan. A
restricted stock Award entitles the recipient to acquire, for a
purchase price equal to or exceeding par value, shares of Common Stock
subject to the restrictions described in Section 6 below ("Restricted
Stock"). A maximum of 50,000 shares of Restricted Stock may be
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awarded by the Committee in any year.
(b) Subject to the provisions of the Plan, the Committee shall
determine the persons to whom Awards are to be granted, the size of the
Award and all other terms and conditions of the Award, provided, however,
that in the case of a Plan participant who is also then a participant in
a Company annual bonus plan, any Award granted by the Committee to such
participant shall be comprised of:
(i) That number of shares of Restricted Stock having a
fair market value as of the date of the Award, as determined in good
faith by the Committee, equal to twenty (20) percent of the
annual bonus payout awarded to the participant under the applicable bonus
plan (such Award to be in lieu of payment of the allocable bonus amount);
plus
(ii) That additional number of shares, if any, which the
Committee in its sole discretion determines is appropriate to award to
the participant for long-term compensation and which is a fraction or
multiple of the number of shares awarded to the participant under the
immediately preceding clause (i);provided, further, however, that in no
event shall the fair market value of shares awarded to any participant
under the preceding clauses (i) and (ii) exceed in any year one hundred
(100) percent of the annual bonus payout awarded to the participant under
the applicable bonus plan.
6. Terms of Restricted Stock.
(a) A participant who is granted a Restricted Stock Award
will have no rights with respect to such Award unless the participant
accepts the Award by written instrument delivered or mailed
to the Company accompanied by payment in full of the specified purchase
price, if any, of the shares covered by the Award. Payment may be by
certified or bank check or other instrument acceptable to the Committee.
(b) A participant who receives Restricted Stock will have
all rights of a stockholder with respect to the Stock, including voting
and dividend rights, subject to the restrictions described in
this Section 6 and any other conditions imposed by the Committee at the
time of grant. Unless the Committee otherwise determines, certificates
evidencing shares of Restricted Stock will remain in the possession of
the Company until (i) such shares are free of all restrictions under the
Plan and (ii) the participant provides for payment to (or withholding by)
the Company of all amounts, if any, required under then applicable
provisions of the Code and state and local tax laws to be withheld
with respect to the issuance of such shares to the participant.
(c) Except as otherwise specifically provided by the
Plan, Restricted Stock may not be sold, assigned, transferred, pledged or
otherwise encumbered or disposed of, except to the Company (if the
Company agrees to purchase the shares) for an amount equal to the price
paid for the shares, for a period of four (4) years from the date of
issuance pursuant to an Award; 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 shares prior
to the expiration of such four (4) year period.
(d) If the employment of a holder of shares of
Restricted Stock 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 the 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 the shares.
(e) If the employment of a holder of shares of
Restricted Stock is terminated for retirement in accordance with the
Company's qualified pension plan at or after attainment of age
sixty (60), and the Committee, at any time while the shares are subject
to the restrictions described in paragraph (c) above, determines that the
holder, either before or after termination of the holder's employment
by the Company, (i) has committed an act of misconduct for which
he or she could have been discharged for cause by the Company, or
(ii) has engaged, directly or indirectly, in competition
with the Company, whether as an officer, employee, agent,
proprietor or otherwise of, or by having any material investment
or other material interest in, any business that involves in whole or
in part any product or device similar to or competitive with any product
or device sold by the Company during the employment of the holder or
under active development by the Company at the time of the
holder's cessation of employment, 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 the shares.
(f) If the employment of a holder of shares of Restricted Stock
is terminated due to involuntary termination without cause, while the
shares are subject to the restrictions described in paragraph (c) above,
the restrictions on such shares shall be deemed to have lapsed in annual
installments as follows: twenty-five (25) percent on the first anniversary
of the date of award of such shares and twenty-five (25)
percent on each of the next three anniversaries of such date
(reduced in the event of any resulting fraction to the next lowest whole
number).
(g) If the employment of a holder of shares of Restricted Stock
is terminated due to death or permanent disability, while the shares are
subject to the restrictions described in paragraph (c) above, the
restrictions on such shares shall lapse as of the date of such event, and
the holder shall be free to dispose of the shares without further
restriction.
(h) The restrictions imposed under this Section 6 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. Any stock certificate issued in respect
of shares awarded under the Plan 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.
7. Conditions to Effectiveness of the Plan. The Plan shall not
become effective, and any Awards granted under the Plan shall not be
effective, unless and until the Plan shall have been duly approved by the
shareholders of the Company.
8. Amendment and Termination. The Board by resolution at any time
may amend, suspend or terminate the Plan, provided that (a) no such
action shall be taken which impairs the rights of any participant under
any outstanding Award, without such participant's consent, and (b) 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.
9. Effect of Changes in Common Stock. If the Company shall
combine, subdivide or reclassify the shares of Common Stock which have
been or may be awarded under the Plan, or shall declare thereon any
dividend payable in shares of Common Stock, or shall take any other
action of a similar nature affecting the Common Stock, then the number
and class of shares of stock as to which Awards may thereafter be granted
(in the aggregate and to any participant) shall be appropriately adjusted
and, in the case of each Award outstanding at the time of any such
action, the number and class of shares subject to such Award shall
likewise be appropriately adjusted, all to such extent as may be
determined by the Committee in its sole discretion, with the approval of
counsel, to be necessary to preserve unimpaired the rights of the
participant. Each and every such determination shall be conclusive and
binding upon the participants.
10. Effect of Reorganizations. In case of any one or more
reclassifications, changes or exchanges of outstanding shares of Common
Stock or other stock (other than as provided in Section 11), 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 shares of the Company), or in case of any one or more
sales or conveyances to any other 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 receipt of shares
pursuant to an Award, to acquire the same kind and amount of securities
and property which such participant would then have if such participant
had received such shares 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 the same, the adjustment rights in Section 9
and this Section 10 being continuing and cumulative.
Notwithstanding any provision of Section 6 or any foregoing
provision of this Section 10 to the contrary, the Committee shall have
the right in connection with any Reorganization, upon not less
than thirty (30) days' written notice to the participants, to terminate all
outstanding Awards. In connection with such termination, the
Committee in its discretion, prior to the effective date of the
reorganization, may remove the restrictions from some or all outstanding
shares of Restricted Stock.
11. 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, all
restrictions imposed pursuant to Section 6 with respect to shares shall
immediately lapse, unless the Board by unanimous vote of members who
served as directors before such event and who constitute at
least fifty-one (51) percent of the Board determines otherwise.
For purposes of this Section 11, (a) the term "Principal
Stockholder" means 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 11 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 trust 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.
12. General Provisions.
(a) Notwithstanding any other provision of the Plan, to the extent
required to qualify for the exemption provided by Rule 16b-3 under the
Act, and any successor provision, any Common Stock or other equity
security offered under the Plan to a person subject to Section 16 of the
Act may not be sold for at least six months after acquisition.
(b) Each Award under the Plan shall be evidenced by a writing
delivered to the participant specifying the terms and conditions thereof
and containing such other terms and conditions not inconsistent with the
provisions of the Plan as the Committee considers necessary or advisable
to achieve the purposes of the Plan or comply with applicable tax or
regulatory laws and accounting principles.
(c) The terms of each Award need not be identical, and the
Committee need not treat participants uniformly. Except as otherwise
provided by the Plan or a particular Award, any determination with
respect to an Award may be made by the Committee at the time of award or
at any time thereafter.
(d) No Award may be transferred other than by will or by the laws
of descent and distribution.
(e) When a participant purchases Restricted Stock pursuant to an
Award for a price equal to the par value of the Restricted Stock, the
Committee in its discretion may determine that such price has been
satisfied by past services rendered by the participant.
13. 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 23, 1997 at 11:00 A.M., E.D.T.
At The Four Points Sheraton Hotel, 3850 East Main 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 - 4 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 proposed amendment to the MacDermid, Incorporated 1995
Equity Incentive Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of the material terms of the performance goals under
which annual executive incentive compensation is determined under
the MacDermid, Incorporated Executive Incentive Compensation Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. 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:____________________,1997
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.]