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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[ ] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended ___________________
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from April 1, 2001 to December 31, 2001
Commission File Number: 001-13889
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
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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
SIGNATURES
THE PLAN. 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 hereunto duly authorized.
MACDERMID, INCORPORATED PROFIT
SHARING AND EMPLOYEE STOCK OWNERSHIP PLAN
Date: June 26, 2002 By: /s/ Frank Montiero
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Frank Montiero
Member, MacDermid Benefit Plans
Administration Committee
APPENDIX 1
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Financial Statements and Supplemental Schedule
December 31 and March 31, 2001
(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 2
Statements of Changes in Net Assets Available for Plan Benefits 3
Notes to Financial Statements 4
SCHEDULE
Schedule H, Line 4i - Schedule of Assets (Held at End of Period) 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 Administration Committee
MacDermid, Incorporated Profit Sharing and
Employee Stock Ownership Plan:
We have audited the accompanying statements of net assets available for plan
benefits of MacDermid, Incorporated Profit Sharing and Employee Stock Ownership
Plan as of December 31 and March 31, 2001 and the related statements of changes
in net assets available for plan benefits for the nine months ended December 31,
2001 and year ended March 31, 2001. 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 December 31
and March 31, 2001 and the changes in net assets available for plan benefits for
the nine months ended December 31, 2001 and year ended March 31, 2001 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
at end of period 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
May 10, 2002
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Plan Benefits
December 31 and March 31, 2001
DECEMBER 31, MARCH 31,
2001 2001
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Investments, at fair value (note 5):
MacDermid Company Stock Fund $44,908,192 56,254,944
Other investments 50,010,959 51,700,988
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Total investments 94,919,151 107,955,932
Cash 206,810 609,483
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Net assets available for plan benefits $95,125,961 108,565,415
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See accompanying notes to financial statements.
2
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Nine months ended December 31, 2001 and Year ended March 31, 2001
DECEMBER 31, MARCH 31,
2001 2001
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Investment income:
Dividend and interest income on securities $ 323,181 3,884,952
Interest on participant loans 190,129 266,504
Net appreciation (depreciation) in fair value of
investments (note 6) (3,899,683) (37,351,230)
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Total investment income (loss) (3,386,373) (33,199,774)
Contributions:
Employer 929,568 1,559,915
Employee 3,767,973 5,612,126
Rollover 261,399 2,078,844
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Total net additions 1,572,567 (23,948,889)
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Deductions:
Distributions to participants (14,841,955) (18,125,797)
Administrative expenses (94,470) (11,156)
Forfeitures -- (139,653)
Other, net (75,596) (28,866)
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Total deductions (15,012,021) (18,305,472)
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Net decrease (13,439,454) (42,254,361)
Net assets available for plan benefits, beginning of year 108,565,415 150,819,776
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Net assets available for plan benefits, end of year $ 95,125,961 108,565,415
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See accompanying notes to financial statements.
3
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31 and March 31, 2001
(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
Prudential Investments was the Trustee of the Plan through
December 31, 2000. Effective January 1, 2001, First Union National
Bank is the Trustee of the Plan. The assets of the Plan were
transferred in January 2001. Under the terms of a trust agreement
between the Trustee and the MacDermid, Incorporated 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) USE OF ESTIMATES
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management of the Plan 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.
(d) PAYMENT OF BENEFITS
Benefits are recorded when paid.
(e) GENERAL
Effective December 31, 2001, the Plan year changed from a March 31
fiscal year end to a December 31 calendar year end.
(2) PLAN PROVISIONS
The Plan, as amended and restated, is a defined contribution plan
sponsored by MacDermid, Incorporated (the Company).
All domestic employees of the Company are eligible to participate in the
Plan. This includes employees of MacDermid Incorporated and its
continental United States subsidiaries, except MacDermid Equipment, Inc.
and Dynacircuits LLC.
4 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31 and March 31, 2001
Effective March 31, 2002, the Company announced the termination of the
MacDermid Equipment, Inc. 401K Plan (ME4). In connection with the
anticipated termination of the ME4 Plan, the assets will be distributed
to participants (or to their beneficiaries). Distributions may be made,
in whole or in part, in the form of eligible rollover distributions to
the MacDermid, Incorporated Profit Sharing and Employee Stock Ownership
Plan or an IRA. The forfeitable portion of eligible, active participants'
account balances will be fully vested on the date the ME4 Plan is
terminated.
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 are eligible to contribute under
the KSOP, 401(k) and after-tax options on the first of the month
following their date of hire. Participating employees 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 2001 and 2000 to 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 18 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 for the nine months ended December 31, 2001 and the
year ended March 31, 2001.
Employees vest immediately in 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
Company Stock Fund are used to reduce the cash contribution required by
the Company in the following year. Forfeitures available to reduce future
employer contributions amounted to $193,808 and $153,007 at December 31
and March 31, 2001, respectively.
The 1,000-hour rule for credited service was waived for the plan period
ending December 31, 2001. For the plan period April 1, 2001 to December
31, 2001, all participants employed by MacDermid on December 31, 2001
would receive one credited year of service towards vesting.
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 non-forfeitable 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.
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.
5 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31 and March 31, 2001
(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 17 separate investment funds in which
to have their contributions and a portion of the Company's contributions
invested. The 17 investment funds as of December 31, 2001 are as follows:
(1) FIRST UNION STABLE INVESTMENT FUND - Seeks maximum current income
consistent with stability of capital and maintenance of liquidity.
(2) FIRST UNION ENHANCED STOCK MARKET FUND - Seeks to exceed the
performance of the S&P 500 index by investing in a select subset of
the stocks in that index.
(3) AMERICAN CENTURY ULTRA FUND - Seeks capital growth by investing
primarily in common stocks that are considered by management to
have better-than-average prospects for appreciation.
(4) DAVIS NY VENTURE FUND A - Seeks long-term capital appreciation and
income through purchasing high-quality, well managed growing
companies at value prices and holding them for the long term.
(5) EVERGREEN SPECIAL EQUITY FUND I - Seeks growth of capital through
investing mainly in both growth and value-oriented stocks that show
potential for growth in earnings and price.
(6) FEDERATED STOCK TRUST FUND - Seeks growth of income and capital by
investing principally in a professionally managed and diversified
portfolio of common stocks of high quality companies.
(7) FRANKLIN TEMPLETON SMALL/MID CAP GROWTH FUND A - Seeks long-term
capital growth by investing primarily in small and medium-sized
companies with market cap values of less than $1.5 billion or
similar in size to those with the highest market cap values in the
Russell 2000 Index at the time of purchase.
(8) INVESCO DYNAMICS FUND - Seeks capital appreciation.
6 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31 and March 31, 2001
(9) JANUS GROWTH & INCOME FUND - Seeks long-term growth of capital with
a limited emphasis on income.
(10) JANUS WORLDWIDE FUND - Seeks long-term growth of capital by
investing in a diversified portfolio of common stocks of foreign
and domestic issuers of all sizes.
(11) MFS CAPITAL OPPORTUNITIES FUND A - Seeks capital appreciation by
investing primarily in common stocks.
(12) DREYFUS MID-CAP INDEX FUND - Seeks to provide investment results
that correspond to the price and yield performance of
publicly-traded common stocks of medium-size domestic companies in
the aggregate, as represented by the Standard & Poor's MidCap 400
Index.
(13) PUTNAM INTERNATIONAL GROWTH FUND A - Seeks capital appreciation
through a diversified portfolio of international stocks, targeting
companies with established earnings growth that are selling at
below market prices.
(14) EVERGREEN SELECT CORE BOND FUND - Seeks to maximize total return
through a combination of current income and capital growth by
investing mainly in corporate and mortgage securities.
(15) FIDELITY MORTGAGE SECURITIES FUND - Seeks high current income
consistent with prudent investment risk. The fund may also consider
the potential for capital gain.
(16) AIM FUNDS GROUP BALANCED A - Seeks to provide income and long-term
growth of capital and income by investing in companies of all
sizes, both domestic and foreign, and investment-grade bonds.
(17) MACDERMID INCORPORATED COMPANY STOCK FUND - This fund consists
primarily of common stock of MacDermid, Inc.
Participants may elect to transfer amounts from one investment fund to
another, up to once per day, using a voice mail response system or via
the internet.
(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.
7 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31 and March 31, 2001
The following table represents the fair value of investments. Investments
that represent 5% or more of the Plan's net assets are separately
identified:
DECEMBER 31, MARCH 31,
2001 2001
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MacDermid Incorporated Company Stock Fund $44,908,192 56,254,944
First Union Stable Investment Fund 22,841,110 19,855,947
Davis NY Venture Fund A 7,466,240 9,359,039
Other investments 19,703,609 22,486,002
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$94,919,151 107,955,932
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(6) NET APPRECIATION (DEPRECIATION)
During the nine months ended December 31, 2001 and the year ended March
31, 2001, 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
------------------------------------
DECEMBER 31, MARCH 31,
2001 2001
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Company Stock Funds $(3,929,977) (29,227,244)
Other securities 30,294 (8,123,986)
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$(3,899,683) (37,351,230)
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(7) 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 5.75% to
9.0% at December 31, 2001. Principal and interest is paid ratably through
regular payroll deductions.
8 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31 and March 31, 2001
(8) SUBSEQUENT EVENTS
As of January 1, 2002, the deferral amount that participants could
contribute to the Plan was increased from 8% to 10%.
As required by EGTRRA, the Plan adopted new vesting requirements. All
matching contributions made on or after January 1, 2002 will vest
pursuant to a 3-year cliff. All matching contributions prior to January
1, 2002 will remain on a 5-year cliff.
Effective January 1, 2002, the diversification requirement for the
KSOP/ESOP portion of the Plan would be changed from age 55 and 10 years
of service to age 55 only.
Effective January 1, 2002, the stock distributions from the Plan will be
either in-kind or cash.
(9) RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Prudential
prior to January 1, 2001 and subsequently by First Union from January 1,
2001 forward. First Union and Prudential are the Trustees as defined by
the Plan and, therefore, these transactions qualify as party-in-interest
transactions. Fees paid by the Plan for the investment management
services amounted to $94,471 and $11,156 for the nine months ended
December 31, 2001 and the year ended March 31, 2001, respectively.
9 (Continued)
SCHEDULE H, LINE 4i
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEES STOCK OWNERSHIP PLAN
Schedule of Assets (Held at End of Year)
December 31, 2001
IDENTITY OF ISSUER, BORROWER, DESCRIPTION CURRENT
LESSOR, OR SIMILAR PARTY OF INVESTMENT VALUE
------------------------------------------------ --------------- -----------
*First Union Stable Investment Fund 815882 units $22,841,110
*First Union Enhanced Stock Market Fund 3128 units 222,963
*MacDermid Company Stock Fund 2649451 shares 44,908,192
Hercules Company Stock Fund 5278 shares 52,780
American Century Ultra Fund 4598 units 126,213
Davis NY Venture Fund A 293600 units 7,466,240
Evergreen Special Equity Fund I 155672 units 1,752,866
Federated Stock Trust Fund 5575 units 189,212
Franklin Templeton Small Cap Growth Fund A 12403 units 386,597
Invesco Dynamics Fund 17438 units 277,789
Janus Growth & Income Fund 21297 units 440,636
Janus Worldwide Fund 65966 units 1,934,133
MFS Capital Opportunities Fund A 305956 units 4,108,988
Dreyfus S&P Mid-Cap Index Fund 23175 units 488,056
Putnam International Growth Fund A 21263 units 421,435
Evergreen Select Core Bond Fund 165833 units 1,885,806
Fidelity Mortgage Securities Fund 227738 units 2,434,932
AIM Funds Group Balanced A 86312 units 2,238,934
*Participant Loans 5.75% - 9.0% 2,742,269
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Total $94,919,151
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*Represents a party-in-interest.
10