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):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2002
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
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
MacDermid Equipment, Inc. 401K 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
The following financial statements shall be furnished for the plan:
1. An audited statement of financial condition as of the end of the latest
two fiscal years of the plan (or such lesser period as the plan has been in
existence).
2. An audited statement of income and changes in plan equity for each of
the latest three fiscal years of the plan (or such lesser period as the plan has
been in existence).
3. The statements required by Items 1 and 2 shall be prepared in
accordance with the applicable provisions of Article 6A of Regulation S-X (17
CFR 210.6A-01--.6A-05).
4. In lieu of the requirements of Items 1-3 above, plans subject to ERISA
may file plan financial statements and schedules prepared in accordance with the
financial reporting requirements of ERISA. To the extent required by ERISA, the
plan financial statements shall be examined by an independent accountant, except
that the "limited scope exemption" contained in Section 103(a)(3)(C) of ERISA
shall not be available.
Note: A written consent of the accountant is required with respect to the
plan annual financial statements which have been incorporated by reference in a
registration statement of Form S-8 under the Securities Act of 1933. The
consent should be filed as an exhibit to this annual report. Such consent shall
be currently dated and manually signed.
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 18, 2003 By: /s/ Frank Monteiro
-------------------------------
Frank Montiero
Member, MacDermid Benefit Plans
Administration Committee
APPENDIX 1
MACDERMID EQUIPMENT, INC. 401K PLAN
Financial Statements and Supplemental Schedule
December 31, 2002 and 2001
(With Independent Auditors' Report Thereon)
MACDERMID EQUIPMENT 401K 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 Year) . 9
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 (ERISA) and Department of Labor Regulations have not been
included herein as the information is not applicable.
INDEPENDENT AUDITORS' REPORT
Plan Administration Committee
MacDermid Equipment, Inc. 401K Plan:
We have audited the accompanying statements of net assets available for plan
benefits of MacDermid Equipment, Inc. 401K Plan as of December 31, 2002 and 2001
and the related statements of changes in net assets available for plan benefits
for the year ended December 31, 2002 and the nine months ended December 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
Equipment, Inc. 401K Plan as of December 31, 2002 and 2001 and the changes in
net assets available for plan benefits for the year ended December 31, 2002 and
the nine months ended December 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 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.
As discussed in Note 1 to the accompanying financial statements, the Plan was
terminated effective March 31, 2002. In connection with the termination of the
Plan, the participants' balances were distributed.
Hartford, Connecticut
April 15, 2003
MACDERMID EQUIPMENT, INC. 401K PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2002 and 2001
ASSETS . . . . . . . . . . . . . . . . . . . . . 2002 2001
------- ----------
Assets:
Investments, at fair value (note 5):
MacDermid Company Stock Fund. . . . . . . . $ 50 283,305
Other investments . . . . . . . . . . . . . 69,049 1,035,947
------- ----------
Total investments. . . . . . . . . . . 69,099 1,319,252
Cash . . . . . . . . . . . . . . . . . . . . . . 15 (6,168)
------- ----------
Total assets . . . . . . . . . . . . . 69,114 1,313,084
------- ----------
Liabilities:
Due to trustee. . . . . . . . . . . . . . . . - (10,944)
------- ----------
Total liabilities. . . . . . . . . . . - (10,944)
------- ----------
Net assets available for plan benefits $69,114 1,302,140
======= ==========
See accompanying notes to financial statements.
MACDERMID EQUIPMENT, INC. 401K PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Year ended December 31, 2002 and nine months ended December 31, 2001
2002 2001
------------ ----------
Investment income:
Dividend and interest income on securities. . . . . . . . $ 2,318 8,291
Interest on participant loans . . . . . . . . . . . . . . 986 4,151
Net appreciation (depreciation) in fair value of
investments (note 6) . . . . . . . . . . . . . . . . . . 80,435 (55,334)
------------ ----------
Total investment income (loss) . . . . . . . . . . 83,739 (42,892)
Contributions:
Employer. . . . . . . . . . . . . . . . . . . . . . . . . - 40,965
Employee. . . . . . . . . . . . . . . . . . . . . . . . . 10,195 83,714
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 10,944 -
------------ ----------
Total additions. . . . . . . . . . . . . . . . . . 104,878 81,787
------------ ----------
Distributions to participants (note 1) . . . . . . . . . . . (954,306) (235,349)
Transfers to other plan (note 1) . . . . . . . . . . . . . . (354,763) (17,720)
Administrative expenses (note 8) . . . . . . . . . . . . . . (28,375) (1,611)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . (460) (5,102)
------------ ----------
Total deductions . . . . . . . . . . . . . . . . . (1,337,904) (259,782)
------------ ----------
Net decrease . . . . . . . . . . . . . . . . . . . (1,233,026) (177,995)
Net assets available for plan benefits, beginning of period. 1,302,140 1,480,135
------------ ----------
Net assets available for plan benefits, end of period. . . . $ 69,114 1,302,140
============ ==========
See accompanying notes to financial statements.
(Continued)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION
The MacDermid Equipment, Inc. (the Company) 401K Plan (the Plan) is a defined
contribution plan that was established as of January 1, 1989 under the name of
the Hollmuller America, Inc. 401(k) Plan. MacDermid, Inc. had owned 50% of
Hollmuller America, Inc. During 1995, MacDermid, Inc. purchased the remaining
50% of Hollmuller America, Inc., and the name of the Plan was changed to the
MacDermid Equipment, Inc. 401K Plan. All employees of the Company were eligible
to participate in the Plan.
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.
The Company announced the termination of the Plan on March 31, 2002. In
connection with the termination of the Plan, the Plan's assets were distributed
to participants (or to their beneficiaries). Distributions were made by the
Plan, 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
were fully vested on the date the Plan was terminated.
(B) TRUST FUND
Wachovia Bank N.A. ("Wachovia Bank") is the Trustee of the Plan. Under the
terms of a trust agreement between the Trustee and 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 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.
(F) RECLASSIFICATION
Certain amounts in the 2001 financial statements have been reclassified to
conform with the current year presentation.
(2) PLAN PROVISIONS
Under the terms of the Plan, an employee is eligible to become a participant in
the Plan (for the purpose of making employee contributions) upon the completion
of 30 days of employment and reaching the age of 18. For the purpose of
receiving Company contributions, an employee is eligible after completing at
least 1,000 hours of employment with the Company during the current Plan year
and if they are a participant on the last day of the Plan year.
An employee may make voluntary pre-tax contributions to the Plan totaling from
1% to 15% of the employee's gross pay, subject to IRS limitations. Contributions
toward Company stock (up to 6%) are matched by the Company $0.50 per dollar, to
a maximum of 3% of employees' gross pay. Each participant shall direct (to
funds) 100% of their contributions.
The Company may make profit-sharing contributions to the Plan. This is a
discretionary contribution determined by the Board of Directors. Profit-sharing
contributions were $0 for the year ended December 31, 2002 and the nine months
ended December 31, 2001.
Employees were 100% vested as of January 1, 2002. If a participant withdraws
from the Plan before they are fully vested, the nonvested portion of the Company
contributions will be applied to reduce the Company's contributions to the Plan.
Employees vest immediately in their contributions. Full vesting with respect to
the Company's contribution required 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% of
compensation allocated to the MacDermid Incorporated Company Stock Fund shall be
applied to reduce contributions by the Company for the Plan year, or allocated
to Plan participants who are participants on the last day of the Plan year in
the proportion that each participant's compensation bears to the total
compensation of all such participants, or to be used for fees and other plan
expenses. Forfeitures available amounted to $69,069 and $66,468 at December 31,
2002 and 2001, respectively. Forfeitures used to reduce plan expenses amounted
to $26,674 and $0 for the year ended December 31, 2002 and the nine months ended
December 31, 2001, respectively.
Distribution of participants' accounts upon separation shall be paid in (a) a
lump sum, or (b) equal installments.
(3) FEDERAL INCOME TAXES
The Plan is a volume submitted plan maintained by Nutter, McClennen & Fish, LLP.
Nutter, McClennen & Fish, LLP has obtained an opinion letter on the plan dated
June 18, 2002 stating that the form of the plan is acceptable under section 401
of the Internal Revenue Code. Generally, the Plan Administrator and the Plan
may rely on the opinion letter received by Nutter, McClennen & Fish, LLP as to
the form of the Plan qualifying under the Internal Revenue Code (except as
otherwise noted in the opinion letter). Additionally, the Plan Administrator
believes that the Plan is currently being operated in compliance with the
applicable requirements of the Internal Revenue Code.
(4) INVESTMENT PROGRAMS
Plan participants elected from among 13 separate investment funds in which to
have their contributions and a portion of the Company's contribution invested.
The 13 investment funds of the Plan were as follows:
(1) Wachovia Bank Stable Investment Fund - Seeks maximum current income
----------------------------------------
consistent with stability of capital and maintenance of liquidity.
(2) 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.
(3) 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.
(4) Federated Stock Trust Fund - Seeks growth of income and capital by
-----------------------------
investing principally in a professionally managed and diversified portfolio of
common stock of high quality companies.
(5) Invesco Dynamics Fund - Seeks capital appreciation.
-----------------------
(6) Janus Growth & Income Fund - Seeks long-term growth of capital with a
-----------------------------
limited emphasis on income.
(7) 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.
(8) MFS Capital Opportunities Fund A - Seeks capital appreciation by
------------------------------------
investing primarily in common stocks.
(9) Dreyfus S&P 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.
(10) 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.
(11) Fidelity Mortgage Securities Fund - Seeks high current income
------------------------------------
consistent with prudent investment risk. The fund may also consider the
potential for capital gain.
(12) 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.
(13) 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
using a voice response system or via the internet. Once an election is made to
allocate funds to the MacDermid Company Stock Fund, the funds may not be
transferred out, except that participants over the age of 55 may transfer
certain funds out of the MacDermid Incorporated Company Stock Fund.
(5) INVESTMENTS
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
--------- ---------
2002 2001
--------- ---------
Wachovia Bank Stable Investment Fund. . . $ 69,049 126,498
Davis NY Venture Fund A . . . . . . . . . - 279,315
Janus Growth & Income Fund. . . . . . . . - 136,863
AIM Funds Group Balanced A. . . . . . . . - 180,105
Evergreen Select Core Bond Fund . . . . . - 75,390
MacDermid Incorporated Company Stock Fund 50 283,305
Other investments . . . . . . . . . . . . - 237,776
--------- ---------
$ 69,099 1,319,252
========= =========
(6) APPRECIATION (DEPRECIATION) IN FAIR VALUE OF ASSETS HELD
During the year ended December 31, 2002 and the nine months ended December 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
--------------- --------------
2002 2001
--------------- --------------
Common stocks $ 75,259 (28,414)
Mutual funds. 5,176 (26,920)
--------------- --------------
$ 80,435 (55,334)
=============== ==============
(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. Loans are secured by the balance in a
participant's account and bear interest at a rate equal to the prime rate.
Principal and interest is paid ratably through regular payroll deductions.
(8) RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Wachovia Bank.
Wachovia Bank is the Trustee 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 $28,375 and $1,611 for the
year ended December 31, 2002 and the nine months ended December 31, 2001,
respectively.
Schedule H, Line 4i
MACDERMID EQUIPMENT, INC. 401K PLAN
Schedule of Assets (Held at End of Year)
December 31, 2002
IDENTITY OF ISSUER, BORROWER,. . . . DESCRIPTION CURRENT
LESSOR, OR SIMILAR PARTY . . . . . . OF INVESTMENT VALUE
- ------------------------------------ ------------- ------ --------
* Wachovia Bank Stable Investment Fund 2,407 units $ 69,049
* MacDermid Company Stock Fund . . . . 2 shares 50
--------
Total $ 69,099
========
*Represents a party-in-interest.