SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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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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and 0-11.
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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 21, 1999
The Annual Meeting of Shareholders of MacDermid, Incorporated
("MacDermid") will be held at the Naugatuck Valley Community College,
Fine Arts Center, 750 West Main Street, Waterbury, CT. on Wednesday,
July 21, 1999 at 3:00 P.M. EDT, for the following purposes:
1. To elect six directors to hold office until the next annual
meeting or until their successors are elected and qualified;
2. To consider and act upon a proposal to approve the MacDermid,
Incorporated Stock Option Plan, dated July 6, 1998
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 28, 1999
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 21, 1999 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.
Note:
Shareholders please note that an employee information session will be
held beginning at 1:00 p.m., just prior to the start of the annual
shareholders meeting on Wednesday July 21, 1999. All shareholders are
cordially invited to attend this information session as well at the same
location.
(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 Naugatuck Valley Community College, Fine Arts Center,
Waterbury, CT. on Wednesday, July 21, 1999 at 3:00 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 Stock Option Plan dated July 6, 1998 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, the Corporate Secretary of MacDermid,
will be the Inspector 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 28, 1999 are entitled to notice of and to vote at the Meeting. On that
date there were 25,156,749 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 21, 1999. MacDermid's Annual
Report to Shareholders, containing financial statements for the fiscal year
ended March 31, 1999, 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 six (6) 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-
R. NELSON GRIEBEL Mr. Griebel joined MacDermid
in February of 1999. He currently serves as a
Director, President and Chief Operating Officer
of MacDermid. Prior to joining MacDermid, and
since July 1993, Mr. Griebel served as Executive
Vice President - West Region for BankBoston,
N.A. Mr. Griebel has an A.B. from Dartmouth
College and a J.D. from Suffolk University
School of Law. Mr. Griebel has been involved
in a variety of business and charitable
organizations throughout Connecticut.
Principal occupation - President and Chief Operating Officer of MacDermid.
Director since 1999
22,060 shares - *(2) (5)
Age: 50
- -----------------------------------------------------------------------------
HAROLD LEEVER Mr. Leever joined MacDermid
in 1938. He was elected President in 1954 and
Chairman of the Board in 1977. Mr. Leever is
currently Chairman emeritus. 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 - Director of MacDermid
Director since 1947
1,687,836 shares - 6.7% (1)
Member of the Executive and Nominating Committees.
Age: 85
- -----------------------------------------------------------------------------
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 -Chairman of the Board and Chief Executive Officer of
MacDermid
Director since 1989
2,078,541 shares - 8.3% (3)
Member of the Executive and Nominating Committees
Age: 50
- -----------------------------------------------------------------------------
DONALD G. OGILVIE - Mr. Ogilvie has been
Executive Vice President of the American
Bankers Association since 1985. 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
8,767 shares - *(2)
Member of the Audit, Compensation, Executive and Nominating Committees.
Age: 56
- ----------------------------------------------------------------------------
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
11,395 shares - * (2)
Member of the Audit, Compensation, Executive and Nominating Committees.
Age: 50
- ------------------------------------------------------------------------------
THOMAS W. SMITH Mr. Smith is and since 1973
has been the Managing Partner of Prescott
Investors. He is on the board of directors
of Catalina 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
1,906,000 shares - 7.6% (4)
Chairman of the Audit and Compensation Committees and a member of the
Executive and Nominating Committees
Age: 71
............................................................................
* Indicates less than 1% of the outstanding shares of Common Stock.
Notes to Election of Directors
(1) Includes 265,089 shares owned by his wife, Ruth Ann Leever, as to
all of which shares Mr. Leever disclaims any beneficial interest, and 44,286
shares held by MacDermid's Profit Sharing and Employee Stock Ownership
Plans. BankBoston N.A., Mr. Daniel Leever and Mr. Thomas Leever as co-
trustees of certain trusts, may have or succeed to the rights to vote
1,114,401 shares. A portion of the information for Mr. Leever was obtained
from his amended Schedule 13G. 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 voting power.
(3) Includes 90,813 shares held by MacDermid's Profit Sharing and
Employee Stock Ownership plans (reported as of March 31, 1999), 90,000 shares
which are subject to restrictions on transfer until June 14, 2000 and 67,000
shares which are subject to restrictions on transfer until April 19, 2002
under the terms of the Special Stock Purchase Plan and 462,065 shares which
may be acquired upon exercise of options granted under the Special Stock
Purchase Plan. Does not include options to purchase 500,000 shares of
MacDermid Common Stock which were issued to Mr. Leever on July 6, 1998 in
accordance with the terms of the MacDermid Incorporated Stock Option Plan
dated July 6, 1998 because such options is contingent upon shareholder
approval of the plan and will become exercisable only upon approval of the
plan by the shareholders. Also includes 39,582, 29,583, 40,488, and 10,020
shares which are subject to restrictions on transfer until August 1, 1999, May
14, 2000, May 14, 2001, and May 14, 2002 respectively under the terms of the
MacDermid 1995 Equity Incentive Plan. Includes 74,703 shares held in trust by
Mr. Leever for his sons and 3,390 shares owned by his spouse, as to all of
which Mr. Leever disclaims beneficial interest. This also includes 1,114,401
shares held by certain trusts established by Mr. Harold Leever, of which
Mr. Daniel Leever is co-trustee.
(4) Includes 1,809,108 shares held by partnerships in which Mr. Smith is
a general partner and 45,000 shares held by Prescott Investors' Employee
Profit Sharing Plan, as to all of which Mr. Smith shares voting and
investment power and 51,872 shares held by Mr. Smith personally. A portion of
the information for Prescott Investors, is taken from its amended Schedule 13G
dated December 24, 1998.
(5) Does not include options to purchase 100,000 shares of MacDermid
Canning stock which were issued to Mr. Griebel on February 1, 1999 under the
terms of the Stock Option Plan dated July 6, 1998 because such options are
subject to shareholder approval of the plan and will only become exercisable
upon such approval.
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has furnished the following report on
executive compensation in the fiscal year ended March 31, 1999.
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. In fiscal year 1999,
MacDermid's executive compensation generally had 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 certain cases group
performance, relative to Committee expectations, (ii) the performance and
achievements of MacDermid's executives, individually, and collectively, (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.
Executives, other than the Chief Executive Officer, were eligible to
receive incentive bonuses pursuant to MacDermid's short-term Executive
Incentive Compensation 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 used formulas in determining
the amount of the executive incentive bonus. The formulas utilize at least
one of the following three factors: (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 was paid with respect to a particular factor only if the EPS
Change, ROS or ROE equaled or exceeded 3%, 4% and 14%, respectively. The
factors may be measured on corporate or group performance. The amount of
incentive bonus that is actually paid to corporate executive officers is
subject to downward adjustment by the Committee based upon individual
performance.
During the fiscal year ended March 31, 1999 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"). Subject to shareholder approval of the plan,
executives were eligible to receive stock options under the MacDermid Stock
Option Plan dated July 6, 1998.
The Committee administers the Plans, 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 generally
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.
Subject to shareholder approval of the plan, stock options awarded under
the MacDermid Stock Option Plan dated July 6, 1998 are in the form of options
to purchase a specified number of shares of MacDermid common stock at an
exercise price which is set at a premium over the market price on the date of
the award. The actual premium is set by the Compensation Committee. The
exercise prices for options granted during fiscal year 1999 ranged from 28% to
57% premium above the market price on the date of grant. The period for
exercising an option will begin with the later of (a) the date of grant, or
(b) the date of approval of the plan by the Company's stockholders, and will
end ten years after the date of grant. Vesting requirements, if any, are
established by the Committee. Unless determined otherwise by the Compensation
Committee, the exercise period will automatically terminate ninety (90) days
after the grantee ceases to be employed by the Company on a full time basis,
for any reason. Subject to shareholder approval of the plan, options were
granted to Messrs. Griebel, Largan, Bolingbroke and Cordani to purchase
100,000; 40,000; 15,000; and 15,000 shares of MacDermid common stock under the
terms of the plan during fiscal year 1999. The exercise prices for the
foregoing grants were set at a premium to market price which ranged from 28%
to 57% premium above market price on the date of grant. It is anticipated by
the Compensation Committee that the grants of options to Messrs. Largan and
Griebel are multi year grants and under normal circumstances Messrs. Largan
and Griebel will not be awarded additional option grants until fiscal year
2003.
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 at least 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. No options were granted under the special Stock Purchase Plan
during fiscal years 1998 and 1999.
The Committee believes that the Plans allow executive officers to participate
in the enhancement of shareholder value.
CHIEF EXECUTIVE OFFICER COMPENSATION
Compensation for Daniel H. Leever, MacDermid's Chairman and Chief Executive
Officer, was determined in accordance with the terms of the MacDermid,
Incorporated Executive Compensation Plan, the material terms of which were
approved by the Company's shareholders at the 1998 Annual Meeting. Under the
terms of the plan, no base salary was paid to Mr. Leever. The amount of
performance based short-term annual compensation which was paid to Mr. Leever
was based directly and solely upon the following factors: (I) earnings per
share, and (ii) the two-year average of earnings per share growth.
Compensation under the plan was determined in two components. The first
component was determined by multiplying $6,000.00 by the number of cents per
share the Company has earned for the fiscal year up to $1.00. The second
component was determined by multiplying $6,000.00 by the number of cents per
share earned by the Company, during the fiscal year, above $1.00 further
multiplied by a factor of from 0 to 2.5, which factor is determined based upon
the two year average of earnings per share growth. For fiscal year 1999, the
two year average growth in earnings per share was approximately 30%, and as a
result the factor was 2.5. Mr. Leever's annual performance based compensation
was determined and paid solely in accordance with the terms of the plan as
noted above.
During fiscal year 1999, Mr. Leever was awarded 10,020 shares of
restricted stock under the terms of the 1995 Equity Incentive Plan. In
addition, subject to shareholder approval of the plan, Mr. Leever was awarded
options to purchase 500,000 shares of MacDermid common stock under the terms
of the MacDermid, Incorporated Stock Option Plan dated July 6, 1998 at an
exercise price which was set at a 50% premium to the market price on the date
of grant. It is anticipated by the Compensation Committee that the grant of
options to Mr. Leever is a multiyear grant and under normal circumstances,
Mr. Leever will not be awarded additional option grants until fiscal year
2003.
Respectfully submitted by,
THE COMPENSATION COMMITTEE
Thomas W. Smith, Chairman
Donald G. Ogilvie
James C. Smith
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table summarizes annual, long-term and
other compensation paid by MacDermid and its subsidiaries for each of its
three fiscal years ended March 31, 1999 to MacDermid's Chief Executive Officer
and four other most highly compensated officers.
Long-Term
Compensation
Annual Compensation Awards
------------------- ------------
Securities
Underlying Value of
Options Restricted
Stock All
Name and Year Salary Bonus Awards Other
principal Compensation
position ($) ($)<F1> (#)<F2> $<F3> ($)<F4>
- ------------------------------------------------------------------------------
Daniel H. Leever 1999 0 1,125,000 500,000 328,155 3,389,655
Chairman and 1998 275,000 683,032 12,065 583,702 720,596
Chief Executive 1997 275,000 601,340 0 139,697 33,162
Officer
R. Nelson Griebel 1999 31,250 75,000 100,000 741,250 170,416
President and 1998 - - - - -
Chief Operating 1997 - - - - -
Officer
Stephen Largan 1999 35,342 25,000 40,000 - 4,064
Vice President 1998 - - - - -
1997 - - - - -
Gregory M. Bolingbroke
Controller 1999 99,017 78,000 15,000 28,558 17,657
1998 94,102 56,460 0 36,243 18,300
1997 90,125 72,100 0 21,165 15,122
John L. Cordani 1999 99,017 78,000 15,000 57,116 15,215
Secretary/General 1998 94,100 56,460 0 24,523 11,389
Counsel 1997 89,095 48,800 0 22,440 6,313
- ------------------------------------------------------------------------------
<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.
<F2> Awarded in fiscal year indicated. Awards listed include options to
purchase 500,000; 100,000; 40,000; 15,000; and 15,000 shares of MacDermid
Common Stock for Messrs. Leever, Griebel, Largan, Bolingbroke, and Cordani
respectively which options were granted pursuant to, and subject to
Shareholder approval of, the MacDermid Incorporated Stock Option Plan and
which options will become exercisable only upon shareholder approval of the
Stock Option Plan.
<F3> Awarded in fiscal year indicated. Amounts reported represent the
dollar value of the restricted stock awards on the date of grant. On March
31, 1999, the market price for MacDermid common stock was 33-15/16 per share
and the restricted stock awards made in fiscal year 1999 had a value of
$340,054; $678,750; $29,593; and $59,187 in respect of Messrs. Leever,
Griebel, Bolingbroke and Cordani respectively. The amounts reported for
fiscal year 1999 represent grants of 10,020; 20,000; 872 and 1,744 shares of
MacDermid common stock in respect of Messrs. Leever, Griebel, Bolingbroke and
Cordani respectively. All restricted stock awards were made under the terms
of the 1995 Equity Incentive Plan.
<F4> Amounts listed for fiscal year 1999 include deemed
compensation, which arose from restrictions lapsing on certain optioned shares
exercised under the MacDermid Incorporated Special Stock Purchase Plan, in the
amount of $3,367,271 for Mr. Leever. The foregoing options were granted on
November 18, 1991 and November 23, 1993 and were exercised on May 31, 1994 and
June 2, 1997 respectively. Amounts listed for fiscal year 1999 also include
$169,687.50 of deemed compensation arising out of a lifting of restrictions on
certain restricted shares granted to Mr. Griebel which is included in the
total value of restricted share grants for Mr. Griebel noted in footnote 3
above. Amounts listed for 1999 also include payments by MacDermid for
premiums for split dollar life insurance in the amount of $4,384 on behalf of,
Mr. Leever; contributions to the E.S.O.P. in the amounts of $5,600, $729,
$1,237, $5,442, and $5,476 on behalf of, respectively, Messrs. Leever,
Griebel, Largan, Bolingbroke, and Cordani; contributions to the Profit Sharing
Plan in the amounts of $2,400, $2,332, $2,332, on behalf of, respectively,
Messrs. Leever, Bolingbroke and Cordani.
</FN>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information with respect to the aggregate
number of unexercised options held by the Chief Executive Officer and the
named officers as of March 31, 1999.
Shares Number of Value of
Acquired Securities Underlying Unexercised
on Unexercised In-the-money
Exercise Value Options at Options at
During Fiscal Realized FY-end (#)<F2> FY-end ($)<F3>
Name 1999 # $<F1> Exercisable/ Exercisable/
Unexercisable Unexercisable
- ------------------------------------------------------------------------------
Daniel H. Leever 90,000 2,740,995 462,065/500,000 $13,544,732/0
R. Nelson Griebel 0 0 0/100,000 0/0
Stephen Largan 0 0 0/40,000 0/0
Gregory M. Bolingbroke 0 0 0/15,000 0/0
John L. Cordani 0 0 0/15,000 0/0
<FN>
<F1> Value is determined as the spread between the exercise price
and the market price on the date of exercise.
<F2> 462,065 of Mr. Leever's options were exercisable on the date of
grant and at March 31, 1999. The additional 500,000 of Mr. Leever's
options are subject to and will become exercisable upon
shareholder approval of the MacDermid, Incorporated Stock Option
Plan dated July 6, 1998.
<F3> Value is only reported for the 462,065 options belonging to
Mr. Leever which were exercisable on March 31, 1999 .
All of the options reported for Messrs. Griebel, Largan, Bolingbroke
and Cordani and 500,000 of the options reported for Mr. Leever are
subject to and will become exercisable only upon shareholder
approval of the MacDermid, Incorporated Stock Option Plan dated
July 6, 1998 and were all granted at exercise prices at a premium
above the share price at the date of the grant, which premiums
ranged from 28% - 57% based upon market price on the date of grant,
and remained at a premium to the share price at March 31, 1999.
Calculated using a market value per share at March 31, 1999 of
33-15/16.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding options
granted during the fiscal year ended March 31, 1999 by the Company to each of
the named executive officers:
Number Percemt Potential Realizable
Of of Total Value at Assumed Rates
Shares Options of Stock Price
Underyling Granted Appreciation for
Options to all Exercise Expir- Option Term
Granted Employees Price ation <F2>
Name <F1> in FY1999 ($/Share) Date 5%$ 10%$
- ------------------------------------------------------------------------------
Daniel H. Leever 500,000 75% $45.00 7/6/08 1,945,000 16,405,000
R. Nelson Griebel 100,000 15% $55.00 2/1/09 628,700 4,259,000
Stephen Largan 40,000 6% $55.00 2/1/09 251,480 1,703,600
Gregory M. Bolingbroke 15,000 2% $45.00 2/1/09 244,305 788,850
John L. Cordani 15,000 2% $45.00 2/1/09 244,305 788,850
<FN>
<F1> Represents options granted under the MacDermid Incorporated Stock
Option Plan dated July 6, 1998 subject to shareholder approval of the plan.
All options granted will only become exercisable upon shareholder approval of
this plan. The exercise prices for the foregoing options were set at exercise
prices which ranged from 28% to 57% premium above the market price for
MacDermid common stock on the day of grant.
<F2> Calculated based upon the market price of MacDermid common stock on
the date of grant.
</FN>
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, 1999 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 20,505 30,758 41,010 51,263 61,516
$200,000 28,005 42,008 56,010 70,013 84,016
$250,000 35,505 53,258 71,010 88,763 106,516
$300,000 43,005 64,508 86,010 107,513 129,016
$350,000 50,505 75,758 101,010 126,263 151,516
$400,000 58,005 87,008 116,010 145,013 174,016
$450,000 65,505 98,258 131,010 163,763 196,516
$500,000 73,005 109,508 146,010 182,513 219,016
$600,000 88,005 132,008 176,010 220,013 264,016
$700,000 103,005 154,508 206,010 257,513 309,016
$800,000 118,005 177,008 236,010 295,013 354,016
$900,000 133,005 199,508 266,010 332,513 399,016
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,
Griebel, Largan, Bolingbroke, and Cordani have 18, 0, 0, 6, and 13 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, 1994 (at the market close) and ending March 31, 1999,
the annual change in the cumulative total return on MacDermid's Common Stock
with the Standard and Poors 500 and the Media General Specialty Chemicals
Stock indices, assuming the investment of $100 on March 31, 1994 (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 Standard and Poors 500 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 Standard and Poors Index and for Specialty Chemicals Index are
similar and show fairly even growth from 1994 to 1999. MacDermid's data line
increases well above the comparator indices by the end of 1995 and continues
to reflect superior comparative performance through 1999.)
Past share performance should not be viewed as necessarily indicative of
future performance.
Graph Dollar Values 1994 1995 1996 1997 1998 1999
- -------------------------------------------------------------------------
MacDermid, Inc. 100 169 261 417 1,038 1,229
Standard & Poors 100 116 153 183 27 321
500
Specialty Chemicals 100 105 116 117 152 111
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND OF MANAGEMENT
The following table sets forth information as of May 28, 1999,
(unless otherwise noted) with respect to ownership of common stock
by any person known by to MacDermid to be a beneficial owner of more
than 5% of its common stock, by MacDermid's C.E.O. and four other
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 shares of common stock beneficially owned by the officers includes the
right to acquire ownership through exercisable stock options.
- -----------------------------------------------------------------------------
Number of Shares Percent
Beneficial Owner Beneficially Owned of Class
- -----------------------------------------------------------------------------
FIVE PERCENT BENEFICIAL OWNERS
Harold Leever 1,687,836 <F1> 6.7%
366 Guilds Hollow Road
Bethlehem, Connecticut 06751
MacDermid Employees Profit Sharing, 3,734,332 <F2> 14.8%
Pension and Stock Ownership Plans
245 Freight Street
Waterbury, Connecticut 06702
Thomas W. Smith and 1,906,000 <F1> 7.6%
Prescott Investors
323 Railroad Avenue
Greenwich, Connecticut 06830
Bank of Boston Corporation 2,112,426 <F3> 8.4%
100 Federal Street
Boston, Massachusetts 02110
Vanguard/Primecap Fund, Inc. 1,701,000 <F5> 6.8%
P.O. Box 2600
Valley Forge, PA 19482
FMR CORP. 1,329,325 <F6> 5.3%
82 Devonshire Street
Boston, MA 02109-3614
Daniel H. Leever 2,078,541 <F1> 8.3%
133 Railtree Hill Road
Woodbury, CT 06798
Thomas M. Leever 1,329,325 <F4> 5.3%
R.R. Box 230
Perkinsville, VT. 05151
NAMED EXECUTIVE OFFICERS
Daniel H. Leever 2,078,541<F1> 8.3%
R. Nelson Griebel 22,060<F7> *
Stephen Largan 1,430<F7> *
Gregory M. Bolingbroke 21,398<F7> *
John L. Cordani 14,800<F7> *
All Directors and Officers 5,755,103<F1><F7> 22.9%
as a group (9 persons)
- ----------------------------------------------------------------------------
*Less than 1% of shares outstanding
<FN>
<F1> Additional explanation of the shares beneficially owned by the
Directors is provided in the footnotes under Election of Directors.
<F2> 3,341,077 shares in the MacDermid Employees Profit Sharing and
Employee Stock Ownership Plans, which are beneficially owned by the Trustee
of the plans, Prudential Insurance Co. and 393,255 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 BankBoston, N.A.("BOB") is taken from its
Schedule 13G dated February 14, 1997. BOB has sole voting power with respect
to 826,290 shares, shared voting power with respect to 1,286,136 shares, sole
dispositive power with respect to 624,009 shares and shared dispositive power
with respect to 1,488,417 shares.
<F4> Includes 1,114,401 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, 1999.
<F6> The information for FMR Corp. ("FMR") is taken solely from
its Schedule 13G dated February 10, 1999. Fidelity Management
& Research Company ("Fidelity), a wholly owned subsidiary of FMR
and a registered investment adviser, is the beneficial owner of
1,298,400 shares or approximately 5.2% of MacDermid Common
Stock. FMR, through control of Fidelity, has sole power to
dispose of those 1,298,400 shares of MacDermid Common Stock.
Neither FMR nor Edward C. Johnson, 3rd, the Chairman of FMR, has
the sole power to vote or direct the voting of the shares owned
directly by the Fidelity funds, which power resides with the
funds' Board of Trustees. Fidelity carries out the voting of
the shares under written guidelines established by the funds'
Board of Trustees. Fidelity Management Trust Company ("FMT"), a
wholly owned subsidiary of FMR and a bank as defined under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), is the beneficial owner of 308,400 shares of MacDermid
Common Stock or approximately 1.3% of the MacDermid Common Stock
outstanding as a result of its serving as investment manager of
the institutional account(s). Each of Mr. Johnson and FMR,
through control FMT, has sole dispositive power over those
308,400 shares and sole power to vote or to direct the voting of
302,100 shares and no power to vote or to direct the voting of
6,300 shares of MacDermid Common Stock owned by institutional
account(s). The Johnson family, through their ownership of
voting stock and a stockholders agreement, are a control group
with respect to FMR. Fidelity International Limited ("FIL") is
the beneficial owner of 1,900 shares of MacDermid Common Stock
or .007% of the MacDermid Common Stock outstanding. FIL has
sole power to vote and the sole power to dispose of 1,900 shares
of MacDermid Common Stock. A partnership controlled by Mr.
Johnson and members of his family control 39.89% of the total
votes which may be cast by all holders of FIL voting stock. FMR
and FIL are of the view that they are not acting as a "group"
for the purposes of Section 13(d) under the Exchange Act.
<F7>Includes 60; 230; 9,950; and 9,771 shares which held by Messrs.
Griebel, Largan, Bolingbroke, and Cordani respectively in the
MacDermid Profit Sharing and Employee Stock Ownership Plans
(reported as of March 31, 1999) as well as 15,000; 7,868; and 5,029
held by Messrs. Griebel, Bolingbroke, and Cordani which are subject
to restrictions on transfer under the terms of the MacDermid,
Incorporated 1995 Equity Incentive Plan. Does not include options
to purchase 100,000; 40,000; 17,200; and 17,200 of MacDermid Common
Shares granted to Messrs. Griebel, Largan, Bolingbroke, and Cordani
respectively under the MacDermid Stock Option Plan which option
grants are subject to shareholder approval of the foregoing plan,
and which will become exercisable only upon shareholder approval of
this plan.
</FN>
INTEREST OF MANAGEMENT AND OTHERS
IN CERTAIN TRANSACTIONS AND FAMILY RELATIONSHIPS
Harold Leever is a Director, and a nominee for Director of MacDermid.
Mr. Leever's son, Daniel H. Leever, is Chief Executive Officer, Chairman of
the Board 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 1999 fiscal year. Each of the current members of the Board of Directors
attended all of the 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 1999 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 Stock
Option Plan, determining the persons to whom stock options are to be granted,
the number of options to be granted, the conditions of the grant, and the
manner in which the exercise price shall be payable. The Committee also
administers the MacDermid, Incorporated 1995 Equity Incentive Plan. The
Committee, which met two (2) times during the 1999 fiscal year, includes
Mr. homas 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 1999 fiscal year, includes R. Nelson Griebel,
Daniel H. Leever, Harold 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 1999 fiscal
year, includes Daniel H. Leever, Harold 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 1999 fiscal year.
ITEM 2.
PROPOSAL TO APPROVE THE MACDERMID, INCORPORATED
STOCK OPTION PLAN DATED JULY 6, 1998
On July 6, 1998, the Board of Directors adopted, subject to approval by
the shareholders, the MacDermid, Incorporated Stock Option Plan (the "Plan")
which provides for the ability to grant, to all employees and directors of
MacDermid and its subsidiaries,options to purchase MacDermid Common Stock at
exercise prices which are set by MacDermid's Compensation Committee at a
premium to market on the date of grant and under the terms and conditions of
the Plan. Currently there are six (6) directors, five (5) executive officers
and approximately 1,800 other employees world-wide who would be eligible to
receive option grants under the Plan.
The Board believes that it is advisable to adopt the Plan because it will
enable MacDermid and its subsidiary corporations to grant their employees and
directors the means to acquire a proprietary interest in MacDermid, thereby
providing additional financial incentives for such employees and directors to
contribute to MacDermid's growth and profitability. Further, The Board
believes that the advisability of such incentives will be a factor in
attracting and retaining these highly competent individuals upon whose
judgment and leadership, MacDermid's continuing success in large measure
depends. Since the plan provides for option grants at a premium to market,
the incentives provided closely align the grantee's interests with the
interest of MacDermid's shareholders. The Board of Directors unanimously
recommends that the shareholders approve 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
"disinterested person" 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.
On May 28, 1999, the closing price of share of a MacDermid Common Stock
on the New York Stock Exchange was $40.25.
Under the plan, options may be granted for an aggregate, subject to
certain adjustments, of up to 1,500,000 shares of Common Stock. Such shares
may be treasury shares or may be authorized and unissued shares. The option
exercise price must be set at a premium over the fair market value of the
stock at the time the option is granted. The Committee will determine the
magnitude of the premium and shall determine vesting provisions , if any. The
period for exercising an option ("Exercise Period") will begin with the later
of (a) the date of grant, or (b) the date of approval of the Plan by
MacDermid's shareholders, and will end ten (10) years after the date of
grant. Unless specifically determined otherwise by the Committee, the
exercise period will automatically terminate ninety (90) days after the
grantee ceases to be employed by MacDermid on a full time basis, for any
reason.
Subject to shareholder approval, all options granted under the Plan will
vest in and become exercisable by the grantee immediately upon grant by the
Committee, except as otherwise provided by the Committee at the time of
grant. Full payment for shares purchased, together with the amount of any
exercise due in respect of the sale issue thereof, will be paid at the time
of exercise of an option.
Unless specifically determined otherwise by the Committee, options
granted under the Plan are not assignable or transferable by a participant
except by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined under the Code or Title I of
the Employee Retirement Income Security Act of 1974 or the rules thereunder.
The Board may amend, suspend or terminate the Plan or any portion
thereof at any time provided that (a) no such action will be taken which
impairs the rights of any participant under any outstanding option without
such participant's consent, and (b) no amendment will be made without
stockholder approval if such approval is necessary to comply with any tax or
regulatory requirement.
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 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"), the
Committee shall have the right to substitute in any previously granted
options the same kind and amount of securities and property which the
participant would have been able to acquire if the participant had exercised
such option immediately before the first of such Reorganizations and continued
to hold such securities and property less all securities and property to be
surrendered in connection with such Reorganizations.
A person who is granted an option under the Plan will not have taxable
income on the date of grant unless the option has a readily ascertainable
fair market value at that time. However, generally there is no such readily
ascertainable fair market value for these options. The holder of an option
granted under the Plan that does not have taxable income on the date of grant
will be deemed to have received compensation income on the date of exercise
equal to the difference between the option exercise price and the fair market
value of the shares on the date of exercise. The optionee's basis in such
shares will be increased by the amount which is deemed compensation income.
For the year in which such an option is exercised, the Company will be
entitled to a deduction equal to the amount the optionee is required to
include in his or her income as compensation, provided the Company satisfies
its reporting requirements. When the optionee disposes of such shares, he or
she will recognize capital gain or loss in an amount equal to the difference
between the amount realized on disposition and the basis in the shares (as
increased by the amount of compensation income previously realized by the
optionee). Any capital gain on an optionee's disposition of shares that are
held for more than 12 months will be subject to tax at a maximum long-term
capital gain rate of 20%. Any capital gain on an optionee's disposition of
shares held for 12 months or less will be subject to tax at ordinary rates.
The Plan is not subject to any provisions of the Employee Retirement
Income Security Act of 1974, as amended. The Plan is not intended to be
qualified under Section 401(a) of the Code.
As of May 28, 1999, options have been granted under the Plan, subject to
shareholder approval of the Plan, to purchase an aggregate total of 741,650
shares of common stock of which 674,400 have been granted to executive
officers and 67,250 have been granted to other employees. No options have
been granted to non-employee directors as of May 28, 1999. All options
granted will become exercisable only upon approval of the Plan by the
Company's shareholders. In accordance with the Plan, all of the foregoing
options were granted with an exercise price above the fair market value of
the shares on the date of grant. The exercise prices on the foregoing
options ranged from a 28% to a 57% premium above the market price on the date
of the grant. The exercise price for all of the foregoing options currently
exceeds the fair market value of the shares as of May 28, 1999.
<CAPTIPN>
- ----------------------------------------------------------------------------
MacDermid Incorporated Stock Option Plan
Dated July 6, 1998
- ----------------------------------------------------------------------------
Dollar Number of Shares
Name and Position Value ($)<F1> Underlying
Option Grants<F2>
- ----------------------------------------------------------------------------
Daniel H. Leever, Chairman and C.E.O. 0 500,000
R. Nelson Griebel, President and C.O.O. 0 100,000
Stephen Largan, Vice President 0 40,000
Gregory M. Bolingbroke, Controller 0 17,200
John L. Cordani, Secretary and General
Counsel 0 17,200
Executive Group 0 674,400
Non-Executive Directors 0 0
All Employees 0 741,650
- ----------------------------------------------------------------------------
<FN>
<F1> Reported as of May 28, 1999.
As of May 28, 1999 the exercise price of all options granted exceeded
the market price for MacDermid common stock.
<F2> Reported as of May 28, 1999.
</FN>
The Board of Directors recommends a vote for approval of the MacDermid,
Incorporated Stock Option Plan, dated July 6, 1998. Approval of this proposal
will require the affirmative vote of a majority of the common shares which are
represented at the Annual Meeting of Shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL
INDEPENDENT ACCOUNTANTS
The independent public accountants for MacDermid for fiscal year 1999
were KPMG Peat Marwick("KPMG"), which firm has been selected to be MacDermid's
auditors for fiscal year 2000 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 2000 ANNUAL MEETING
Shareholder proposals for inclusion in the proxy statement relating to
the 2000 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 21, 2000. Such proposals should
be addressed to the attention of John L. Cordani, Corporate Secretary.
Proxies colicited by the Board of Directors for the 2000 annual meeting will
cover discretionary authority to vote on any matters to come before the annual
meeting with respect to which the Company does not receive notice prior to May
8, 2000.
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 21, 1999 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, 1999.
Such request should be directed to John L. Cordani, Corporate Secretary,
MacDermid, Incorporated, 245 Freight Street, Waterbury, Connecticut
06702-0671.
Exhibit A
MACDERMID, INCORPORATED
STOCK OPTION PLAN
Dated July 6, 1998
1. Purposes. The purposes of the MacDermid, Incorporated Stock
Option 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 and directors the means
to acquire a proprietary interest in the Company, in order that such persons
will have additional long term 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(b) 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"). 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. Subject to the terms of the Plan, the
Committee may place restrictions on options granted, as the Committee deems
appropriate.
4. Shares Subject to the Plan. Subject to adjustment as provided
herein, an aggregate of one million five hundred thousand (1,500,000) 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. In no event shall any employee receive, in any calendar year,
options to purchase more than one million shares.
5. Participants. All employees and directors of the Company 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 set by the Committee at a
premium over the fair market value of such shares at the time the option is
granted, with such premium to be determined by the Committee.
7. Vesting. Subject to shareholder approval, all options granted
under the Plan shall vest in and become exercisable by the grantee immediately
upon grant by the Committee, except as otherwise provided by the Committee at
the time of grant.
8. Option Period. Subject to Section 12, the period for exercising
an option (the "Exercise Period") shall begin on the later of (i) the date of
grant, and (ii) the date of approval of the Plan by the Company's
shareholders, and shall end ten (10) years after the date of grant.
Notwithstanding the foregoing, unless specifically determined otherwise by the
Committee, the Exercise Period shall automatically terminate ninety (90) days
after the grantee ceases to be employed by the Company on a full time basis,
for any reason.
9. 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.
10. Nontransferability. Unless specifically determined otherwise
by the Committee, 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, 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," the Committee shall
have the right to substitute in any previously granted options, the same kind
and amount of securities and property which any 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. 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. Effective Date of Plan. Subject to the approval of the
shareholders of the Company, the Plan shall be effective on July 6, 1998.
Prior to such approval, options may be granted under the Plan expressly
subject to such approval.
14. 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.
15. Section 16 Exemption. The Committee shall take all reasonable
measures to qualify for the exemption provided by Rule 16b-3 of the Act, the
grant and exercise of options to acquire Common Stock by the Plan participants
who are subject to Section 16 of the Act. 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.
16. 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 made in the Committee's sole discretion and 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 21, 1999 at 3:00 P.M., E.D.T.
At The Naugatuck Valley Community College, Fine Arts Center,
750 West Main St., Waterbury, Connecticut
The undersigned hereby constitutes and appoints DANIEL H. LEEVER,
attorney and proxy 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 his 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: R. Nelson Griebel, 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 MacDermid, Incorporated Stock Option Plan dated
July 6, 1998.
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: ,1999
------------------------
Signature(s)
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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.]