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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 for the fiscal year ended MARCH 31, 2000; or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from ____________ to ____________
COMMISSION FILE NUMBER 001-13889
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A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
MacDermid, Incorporated Profit Sharing and Employee Stock Ownership Plan
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
MACDERMID, INCORPORATED
245 Freight Street
Waterbury, CT 06702-0671
REQUIRED INFORMATION
In accordance with the rules to Form 11-K, attached as Appendix 1 to this Form
11-K are the plan financial statements and schedules prepared in accordance with
the financial reporting requirements of ERISA and examined by an independent
accountant on a full scope basis.
EXHIBITS
23.1 Consent of KPMG LLP
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
MACDERMID, INCORPORATED PROFIT
SHARING AND EMPLOYEE STOCK
OWNERSHIP PLAN
By: MACDERMID, INCORPORATED
Date October 13, 2000 By: /s/ Frank Montiero
------------------ --------------------------------
Frank Montiero,
Member, MacDermid Benefit Plans
Administration Committee
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
(formerly known as the MacDermid, Incorporated
Employee Profit Sharing Plan)
Financial Statements and Supplemental Schedule
March 31, 2000 and 1999
(With Independent Auditors' Report Thereon)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Table of Contents
Page
Independent Auditors' Report 1
Statements of Net Assets Available for Plan Benefits at March 31, 2000
and 1999 2
Statements of Changes in Net Assets Available for Plan Benefits for the
years ended March 31, 2000 and 1999 3
Notes to Financial Statements 4
Schedule
1 - Schedule of Assets Held for Investment Purposes at End of Year 10
Note: Schedules of reportable transactions, nonexempt transactions, loans or
fixed income obligations in default or classified as uncollectible,
leases in default or classified as uncollectible and investment assets
both acquired and disposed of within the plan year as required by the
Employee Retirement Income Security Act of 1974 and Department of Labor
Regulations have not been included herein as the information is not
applicable.
INDEPENDENT AUDITORS' REPORT
Plan Administrator
MacDermid, Incorporated Profit Sharing and Employee Stock Ownership Plan
Waterbury, Connecticut:
We have audited the accompanying statement of net assets available for plan
benefits of MacDermid, Incorporated Profit Sharing and Employee Stock Ownership
Plan as of March 31, 2000 and 1999 and the related statement of changes in net
assets available for plan benefits for the years ended March 31, 2000 and 1999.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of MacDermid,
Incorporated Profit Sharing and Employee Stock Ownership Plan as of March 31,
2000 and 1999 and the changes in net assets available for plan benefits for the
years ended March 31, 2000 and 1999 in conformity with accounting principles
generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes at end of year is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ KPMG LLP
Hartford, Connecticut
July 14, 2000
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Net Assets Available for Plan Benefits
March 31, 2000 and 1999
Assets 2000 1999
---------------- ---------------
MacDermid common stock $ 85,917,558 130,815,052
Other investments (note 5) 64,902,218 30,358,438
---------------- ---------------
Total investments 150,819,776 161,173,490
Employer contribution receivable - 436,345
---------------- ---------------
Net assets available for plan benefits $ 150,819,776 161,609,835
================ ===============
See accompanying notes to financial statements.
2
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Years ended March 31, 2000 and 1999
2000 1999
---------------- ----------------
Dividends:
MacDermid common stock $ 275,065 230,500
Other securities 2,565,127 565,496
---------------- ----------------
2,840,192 795,996
Interest -- 282,425
Interest on participants loans 214,273 189,296
---------------- ----------------
Total interest and dividends 3,054,465 1,267,717
---------------- ----------------
Net appreciation (depreciation) (note 7) --
MacDermid common stock (21,562,682) 24,823,143
Other securities 31,940 320,197
---------------- ----------------
(21,530,742) 25,143,340
---------------- ----------------
Total investment income (loss) (18,476,277) 26,411,057
Rollover 204,575 541,974
Employer 1,032,186 1,086,415
Employee - after tax 101,939 1,005,759
Employee - before tax 1,356,690 401,748
KSOP 2,030,327 978,555
---------------- ----------------
Total additions (13,750,560) 30,425,508
---------------- ----------------
Distributions to participants (22,331,684) (36,888,580)
Administrative expenses (9,801) (25,201)
Forfeitures (27,358) (209,783)
---------------- ----------------
Total deductions (22,368,843) (37,123,564)
---------------- ----------------
Net decrease prior to transfers (36,119,403) (6,698,056)
Transfer from MacDermid Imaging 401k Plan -- 15,556,063
Tranfer from Canning Gumm 401K Plan 3,031,472 --
Transfer from W. Canning Inc. 401K Plan 956,762 --
Transfer from Polyfibron Technologies Inc. Savings and Investement Plan 21,341,110 --
---------------- ----------------
Net increase (decrease) (10,790,059) 8,858,007
Net assets available for plan benefits:
At beginning of period 161,609,835 152,751,828
---------------- ----------------
At end of period $ 150,819,776 161,609,835
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See accompanying notes to financial statements.
3
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
March 31, 2000 and 1999
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION
The accompanying financial statements have been prepared on an
accrual basis. Current values of investments are determined using
quoted market prices and current yields. Purchases and sales of
securities are recorded on a trade-date basis. The cost of
investments sold is determined on an average cost basis.
(b) TRUST FUND
Fleet National Bank was the Trustee of the Plan through December
31, 1998. As of January 1, 1999, Fleet National Bank was replaced
by Prudential Investment Services as Trustee. Under the terms of a
trust agreement between the Trustee and the MacDermid,
Incorporated Employees Profit Sharing and Employee Stock Ownership
Plan (the Plan), the Trustee manages a trust fund on behalf of the
Plan. The Plan Trustee has discretionary authority concerning
purchases and sales of investments in the trust fund. The
investments and changes therein of this trust fund have been
reported to the Plan by the Trustee as having been determined
through the use of current values for all assets and liabilities.
(c) PLAN MERGERS
During the 2000 plan year, the Company, as a result of
acquisitions, merged the following plans into the Plan: Canning
Gumm 401K Plan, W. Canning 401K Plan, and the Polyfibron
Technologies, Inc. Savings and Investment Plan.
On January 1, 1998, MacDermid Incorporated merged its wholly owned
subsidiary MacDermid Imaging Technology, Inc. into the parent
organization. As a result, the MacDermid Imaging Technology, Inc.
401(k) and Profit Sharing Plan was merged into the Plan effective
January 1, 1999.
(d) USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires the plan
administrator to make estimates and assumptions that affect the
reported amounts of assets, liabilities, and changes therein, and
the disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.
(e) PAYMENT OF BENEFITS
Benefits are recorded when paid.
4 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
March 31, 2000 and 1999
(2) PLAN PROVISIONS
The Plan, as amended and restated, is a defined contribution plan
sponsored by MacDermid, Incorporated (the Company).
Effective January 1, 1999, the ESOP provision of the plan was changed to
allow participants to contribute to the plan using pre-tax dollars to
purchase company stock. This provision is referred to as a KSOP.
Under the terms of the Plan, employees who have completed three months of
service are eligible to contribute under the KSOP, 401(k) and after-tax
options. Participating employee may elect to have up to 8% of pre-tax
wages contributed to the Plan under the 401(k ) option, and up to 7% of
pre-tax wages under the KSOP provision. Participating employees may elect
to have up to 3% deducted from their after-tax wages and invested in the
same investment options as the 401(k) arrangement. The Company will match
50% of the employee's KSOP contribution, up to a maximum of 3.5% of the
employee's compensation. Employees may elect to make pre-tax
contributions up to the IRS limit of $10,500 in 2000 ($10,000 in 1999).
Invested in the same investment options as the 401(k) arrangement.
The Company may make profit-sharing contributions to the Plan. This is a
discretionary contribution determined by the Board of Directors. In order
to be eligible for the profit-sharing contributions, employees must be at
least 21 years of age and have completed five months of service.
Employees will be eligible for profit sharing as of the March 1st
subsequent to their completion of the above requirements. Profit sharing
contributions were $0 and $484,164 for the years ended March 31, 2000 and
1999, respectively.
Employees vest immediately as to their contributions. Full vesting with
respect to the Company's contributions requires five years of credited
service, except that full vesting will apply when an employee attains age
55, dies or becomes totally disabled. Any forfeited amounts related to
the maximum additional 3.5% of compensation allocated to the MacDermid,
Inc. Stock Fund are used to reduce the cash contribution required by the
Company in the following year. At March 31, 2000 and 1999 forfeited
amounts to be used to reduce future employer contributions totaled
$66,304 and $47,818, respectively. All other forfeitures are allocated on
a pro rata basis to Plan participants with at least one year of
participation in the Plan based on eligible compensation. Forfeitures
used to reduce the cash contribution were $47,818 and $68,060 during the
years ended March 31, 2000 and 1999, respectively.
Distribution of participants' accounts upon separation shall be paid in
(a) a lump sum, or (b) equal installments over a period not to exceed 15
years. If the nonforfeitable balance does not, and did not at the time of
any prior distribution, exceed $5,000, the participant's account shall be
distributed in a lump-sum.
5 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
March 31, 2000 and 1999
The Company expects to continue the Plan indefinitely, but necessarily
reserves the right to amend, modify or terminate the Plan at any time. If
it is necessary to discontinue the Plan, the assets in the Trust Fund
will be used to provide benefits in accordance with the provisions of the
Plan document.
(3) FEDERAL INCOME TAXES
The Plan has received a tax determination letter from the Internal
Revenue Service (IRS) dated July 13, 1995 indicating that the Plan
qualifies under the provisions of Section 401(a) of the Internal Revenue
Code (IRC) and is exempt from federal income taxes. The Plan has been
amended since receiving the determination letter. However, the Company
believes the Plan is designed and is currently being operated in
compliance with the applicable sections of the IRC.
Plan participants are taxed on plan benefits at the time of distribution
to the extent such distribution exceeds a participant's post-tax
contribution to the Plan. Effective January 1, 1993, the Plan withholds
the mandatory 20% federal tax from all taxable distributions which are
not direct rollovers. The tax consequences to the participant will depend
on the type of distribution (lump sum, annuity or installments).
(4) INVESTMENT PROGRAMS
Plan participants may elect among fifteen separate investment funds in
which to have their contributions and a portion of the Company's
contributions invested. Company contributions in excess of 5% of a
participant's annual salary must be invested in the Employer Stock Fund.
The fifteen investment funds as of March 31, 2000 are as follows:
(1) MACDERMID COMPANY STOCK FUND (MRD) - This fund consists primarily
of common stock of the Company.
(2) PRUDENTIAL MONEY MART ASSETS FUND A (PBMXX) - This fund seeks to
provide maximum current income consistent with stability of
capital and maintenance of liquidity.
(3) PRUDENTIAL EQUITY FUND A (PBQAX) - This fund's primary objective
is to seek long-term growth of Capital by investing in common
stocks of major established corporations.
(4) PRUDENTIAL GLOBAL TOTAL RETURN FUND A (GTRAX) - This fund's
primary objective is to seek current income and capital
appreciation.
(5) GOLDMAN SACHS GOVERNMENT INCOME FUND A (GSGOX) - This fund seeks
income through investment in U.S. Government securities and
related repurchase agreements.
6 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
March 31, 2000 and 1999
(6) PRUDENTIAL EQUITY INCOME A (PBEAX) - This fund seeks both current
income and Capital appreciation by investing in various assets of
domestic and foreign origin.
(7) PIMCO LOW DURATION FUND A (PTLAX) - This fund seeks total return
and normally invests in debt with an average duration between one
and three years.
(8) AIM BALANCED FUND A (AMBLX) - This fund seeks total return and
invests in both equities and investment grade fixed income
securities.
(9) KEMPER DREMAN HIGH RETURN EQUITY A (KDHAX) - This fund seeks
total return and invests primarily in common stocks that pay high
dividends relative to the dividend yield of the S&P 500 Index.
(10) OPPENHEIMER QUEST VALUE A (QFVFX) - This fund seeks capital
appreciation and invests in companies that are judged to be
undervalued relative to assets, earnings, growth potential and
cash flows.
(11) PRUDENTIAL STOCK INDEX FUND Z (PSIFX) - The fund seeks to
replicate the performance of the S&P 500 Index by investing in
companies that appear in the Index.
(12) VAN KAMPEN AMERICAN VALUE FUND A (MSAVX) - This fund seeks long
term return by investing in companies with market capitalizations
of $1 billion or less.
(13) PRUDENTIAL EUROPE GROWTH FUND A - This fund seeks long term
growth of capital by investing in equities issued in European
countries.
(14) PRUDENTIAL GLOBAL GROWTH FUND A (PRGAX) - This fund seeks long
term capital growth with income becoming secondary. The fund
invests in domestic and foreign common stocks.
(15) PIMCO TOTAL RETURN FUND A (PTTAX)- This fund seeks to provide
maximum total return, taking into consideration income and
capital appreciation potential. It maintains a portfolio
consisting primarily of intermediate-term, high quality fixed
income securities.
Participants may elect to transfer amounts from one investment fund to
another, up to once per day, using a voice mail response system.
7 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
March 31, 2000 and 1999
(5) INVESTMENTS
In September 1999, The American Institute of Certified Public Accountants
issued Statement of Position 99-3, Accounting for and Reporting of
Certain Defined Contribution Plan Investments and Other Disclosure
Matters (SOP 99-3). SOP 99-3 simplifies the disclosure for certain
investments and is effective for plan years ended after December 15,
1999. The Plan adopted SOP 99-3 during the Plan year ended March 31,
2000. Accordingly, information previously required to be disclosed about
participant directed fund investment programs is not presented in the
Plan's financial statements for the year ended March 31, 2000. The Plan's
financial statements for the year ended March 31, 1999 have been
reclassified to conform with the current year's presentation.
The following table represents the cost and fair value of investments.
Investments that represent 5% or more the Plan's net assets are
separately identified:
March 31, 2000 March 31, 1999
----------------------------- ------------------------------
Cost Value Cost Fair value
------------ ------------- ------------ ---------------
MacDermid common stock $ 35,215,455 85,917,558 25,458,888 130,815,052
Norwest Stable Value Fund -- -- 9,918,176 10,121,617
Prudential Money Mart
Assets Fund A 20,124,518 20,124,518 -- --
Prudential Stock Index Fund Z 8,481,862 9,259,846 -- --
Prudential Equity Fund A 8,853,665 8,677,092 -- --
Other funds 27,193,705 26,840,762 20,288,5220 20,236,781
------------ ------------- ------------ ---------------
$ 99,869,205 150,819,776 55,665,586 161,173,450
============ ============= ============ ===============
(7) NET APPRECIATION (DEPRECIATION)
During the years ended March 31, 2000 and 1999, the Plan's investments
(including investments bought and sold, as well as investments held
during the year) appreciated (depreciated) as follows:
Net Appreciation
(depreciation) in fair value
----------------------------------
2000 1999
---------------- ---------------
Common stocks - MacDermid Inc. $ (21,562,682) 24,823,143
Other securities 31,940 320,197
---------------- ---------------
$ (21,530,742) 25,143,340
================ ===============
8 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
March 31, 2000 and 1999
(8) PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their fund accounts a minimum of $1,000 up
to a maximum equal to the lesser of $50,000 or 50% of their vested
account balance. Loan transactions are treated as a transfer to (from)
the investment fund from (to) the Loan Fund. Loan terms range from 1-5
years or up to 10 years for the purchase of a primary residence. The
loans are secured by the balance in the participant's account and bear
interest at a rate commensurate with local prevailing rates as determined
quarterly by the Plan administrator. Interest rates range from 8.75% to
10.50% at March 31, 2000. Principal and interest is paid ratably through
regular payroll deductions.
(9) PARTICIPANT VALUATIONS
In reconciling the year-end balances, it was discovered there was a
discrepancy in the price used in valuing certain assets in the Trust and
the participants' account balances. This discrepancy, in MacDermid Inc.
common stock, was caused by an error in the program used to determine the
daily unit value for participant accounts.
Fleet Bank repriced the units and reprocessed the participants' accounts
before being removed as Trustee on December 31, 1998. The calculated
shortfall was approximately $20,000 with the Plan being made whole before
the assets in the trust were transferred to Prudential Investment
Services, the new trustee.
9
MACDERMID INCORPORATED PROFIT SHARING
AND EMPLOYEES STOCK OWNERSHIP PLAN
Schedule of Investments held for Investment Purposes at End of Year
Year ended March 31, 2000
Description of investment
including maturity date
Identity of issuer, borrower, rate of interest, collateral, Current
lessor, or similar party par or maturity value Cost Value
- -------------------------------------------------- ---------------------------------------- --------------- ----------------
*MacDermid Company Stock 3,242,172 shares $ 35,215,455 85,917,558
*Prudential MoneyMart Assets A 20,124,518 shares 20,124,518 20,124,518
*Prudential Equity Fund A 470,813 shares 8,853,665 8,677,092
*Prudential Global Total Return Fund 6,619 shares 48,516 47,522
Gold Sachs Govt Income Fund A 204,885 shares 2,913,165 2,788,486
*Prudential Equity Income Fund A 43,044 shares 786,967 698,173
PIMCO Low Duration Fund A 343,265 shares 3,411,052 3,367,428
AIM Balanced Fund A 123,024 shares 3,949,219 4,246,784
Kemper Dremen Hi Return Equity Fund 117,967 shares 3,872,278 3,048,277
Oppenheimer Quest Value Fund A 35,743 shares 715,114 655,892
*Prudential Stock Index Fund 278,324 shares 8,481,862 9,259,846
Van Kampen American Value Fund A 144,751 shares 3,570,093 3,766,428
*Prudential Europe Growth Fund 30,736 shares 663,885 717,061
*Prudential Global Growth Fund A 168,509 shares 3,991,935 4,366,057
PIMCO Total Return Fund A 10,488 shares 102,869 104,460
Hercules Company Stock 11,499 shares 319,840 185,422
*Participant loans 7.3%-10.5% 2,848,727 2,848,727
*Prudential Insurance Co. of America 45 45
--------------- ----------------
Total $ 99,869,205 150,819,776
=============== ================
*Party-in-interest
10