MacDermid, Incorporated Stock Option Plan

Dated February 17, 2006

 

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, officers, 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 “non-employee director” within the meaning of Rule 16B-3(c) under the Securities Exchange Act of 1934, as amended (the “Act”) and an “outside director” within the meaning of Section 162(m)(4)(C)(i) of the Internal Revenue Code of 1986, as amended (the “Code”). 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 one hundred thousand (1,100,000) 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 the Committee grant, in any calendar year, options to purchase more than one million shares.

 

5.  

Participants

 

All employees, officers, 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 of 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 or above the fair market value of such shares at the time the option is granted. The fair market value shall be the average closing price for the Company’s common shares on the five trading days preceding grant. The Committee may not re-price previously granted options.

 

7.  

Vesting

 

Subject to shareholder approval, all options granted under the Plan shall vest in and become exercisable by the grantee on the date which is six (6) years after grant by the Committee, except as otherwise provided by the Committee at the time of grant. Unless determined otherwise by the Committee, any options granted hereunder will automatically be forfeited if the grantee ceases to be employed by the Company on a full time basis for any reason other than normal retirement at or after age 65, or involuntary termination without cause, prior to the vesting date. Option grants shall vest upon normal retirement from the Company at or after age 65. Upon termination of employment without cause, option grants shall be deemed to have vested at the rate of one sixth per year based upon the number of years between the date of termination without cause and the grant date.

 

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 which is six (6) years from 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 other than normal retirement at or after age 65.

 

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 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 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 therefore 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 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 the 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 February 17, 2006. 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.

 

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 Rule16b-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.

Exhibit C

 

MacDermid, Incorporated

1995 Equity Incentive Plan

 

1. Purposes. The purposes of the MacDermid, Incorporated 1995 Equity Incentive Plan (the “Plan”) are (a) to enable MacDermid, Incorporated and its subsidiary corporations (hereinafter referred to, unless the context otherwise requires, as the “Company”) to provide to its employees the means to acquire a proprietary interest in the Company, in order that such persons will have additional financial incentives to contribute to the Company’s growth and profitability, and (b) to enhance the ability of the Company to attract and retain individuals of outstanding ability upon whom the success of the Company will depend. The Plan is intended to accomplish these goals by enabling the Company to grant awards (“Awards”) in the form of restricted stock, all as more fully described below.

 

 Administration. The Plan shall be administered by a committee of not fewer than two members of the Board of Directors of the Company (the “Board). Each member of the Committee shall be a “non-employee director” within the meaning of Rule 16B-3(c) under the Securities Exchange Act of 1934, as amended (the “Act”) and an “outside director” within the meaning of Section 162(m)(4)(C)(i) of the Internal Revenue Code of 1986, as amended (the “Code”) and applicable Treasury regulations thereunder. The Committee may adopt such rules and regulations as it may deem necessary of advisable for the administration of the Plan. The Committee shall have no authority to take any action if the authority to take such action, or the taking of such action, would disqualify the Plan from the exemption provided by Rule 16b-3 under the Act or any successor provision.

 

3.  Participants. All officers, directors and employees of the Company shall be eligible to receive Awards and thereby become participants in the Plan. In granting Awards the Committee may include or exclude previous participants in the Plan as the Committee may determine. Receipt of an Award shall in no way be deemed to constitute a consent to or promise of continued employment by the Company.

 

4.  Shares Subject to the Plan. Subject to adjustment as provided herein, an aggregate of up to 900,000 shares of the Common Stock, without par value per share (the “Common Stock”), shall be available for issuance under the Plan. Such shares may be authorized and unissued shares or shares held in the Company’s treasury. If any Award in respect of shares of Common Stock is forfeited for any reason or settled in a manner that results in fewer shares of Common Stock outstanding than were initially awarded, including without limitation the surrender of shares of Common Stock in payment of any tax obligation on the Award, the shares of Common Stock subject to such Award or so surrendered, as the case may be, to the extent of such forfeiture or decrease, shall again be available for award under the Plan.

 

5.  Grant of Awards.

 

(a)  

Subject to the provisions of the Plan, the Committee may award shares of

restricted stock to a participant under the Plan. A restricted stock Award entitles the recipient to acquire, for a purchase price equal to or exceeding par value, shares of Common Stock subject to the restrictions described in Section 6 below (“Restricted Stock”). A maximum of 150,000 shares of Restricted Stock may be awarded by the Committee in any year.

 

(b)  

Subject to the provisions of the Plan, the Committee shall determine the persons

to whom Awards are to be granted, the size of the Award and all other terms and conditions of the Award. Subject to the terms of the Plan, the Committee may place additional restrictions and/or vesting requirements on any Award as the Committee deems appropriate. 

 

6.  Terms of Restricted Stock.

 

(a)  

A participant who is granted a Restricted Stock Award will have no rights with

respect to such Award unless the participant accepts the Award by written instrument delivered or mailed to the Company accompanied by payment in full of the specified purchase price, if any, of the shares covered by the Award. Payment may be by certified or bank check or other instrument acceptable to the Committee.

 

(b)  

A participant who receives Restricted Stock will have all rights of a stockholder

with respect to the Stock, including voting and dividend rights, subject to the restrictions described in this Section 6 and any other conditions imposed by the Committee at the time of grant. If the Committee determines so, certificates evidencing shares of Restricted Stock will remain in the possession of the Company until (i) such shares are free of all restrictions under the Plan, and (ii) the participant provides for payment to (or withholding by) the Company of all amounts, if any, required under then applicable provisions of the Code and state and local tax laws to be withheld with respect to the issuance of such shares to the participant.

 

(c)  

Except as otherwise specifically provided by the Plan, Restricted Stock may not

be sold, assigned, transferred, pledged or otherwise encumbered or disposed of, except to the Company (if the Company agrees to purchase the shares) for an amount equal to the price paid for the shares, for a period of three (3) years from the date of issuance pursuant to an Award; provided, however, that the Committee in its sole discretion may determine from time to time for any reason to waive in whole or in part the restrictions applicable to any shares prior to the expiration of such three (3) year period.

 

(d)  

If the employment of a holder of shares of Restricted stock is terminated for any

reason other than death, retirement in accordance with the Company’s qualified pension plan at or after attainment of age sixty-five (65), or for permanent disability, or involuntary termination without cause, while the shares are subject to the restrictions described in the immediately preceding paragraph, the holder shall be required to sell such shares to the Company for the price paid therefor by the holder, and all rights of the holder with respect to such shares shall be immediately canceled, unless the Company declines in writing to purchase the shares.

 

(e)  

If the employment of a holder of shares of Restricted Stock is terminated for

retirement in accordance with the Company’s qualified pension plan at or after attainment of age sixty-five (65), and the Committee, at any time while the shares are subject to the restrictions described in paragraph (c) above, determines that the holder, either before or after termination of the holder’s employment by the Company, (i) has committed an act of misconduct for which he or she could have been discharged for cause by the Company, or (ii) has engaged directly or indirectly, in competition with the Company, whether as an officer, employee, agent, proprietor or otherwise of, or by having any material investment or other material interest in, any business that involves in whole or in part any product or device similar to or competitive with any product or device sold by the Company during the employment of the holder or under active development by the Company at the time of the holder’s cessation of employment, the holder shall be required to sell such shares to the Company for the price paid therefor by the holder, and all rights of the holder with respect to such shares shall be immediately canceled, unless the Company declines in writing to purchase the shares.

 

       (f)  If the employment of a holder of shares of Restricted Stock is terminated due to Involuntary termination without cause, while the shares are subject to the restrictions  described in paragraph (c) above, the restrictions on such shares shall be deemed to have lapsed in annual installments as follows: one third on the first anniversary of the date of award of such shares and one third on each of the next two anniversaries of such date (reduced in the event of any resulting fraction to the next lowest whole number).

 

        (g). If the employment of a holder of shares of Restricted Stock is terminated due to death or permanent disability, while the shares are subject to the restrictions described in paragraph (c) above, the restrictions on such shares shall lapse as of the date of such event, and the holder shall be free to dispose of the shares without further restriction.

 

       (h). The restrictions imposed under this Section 6 shall apply as well to all shares or other securities issued in respect of shares in connection with any stock split, reverse stock split, stock dividend, recapitalization, reclassification, spin-off, split-off, merger, consolidation or reorganization. Any stock certificate issued in respect of shares awarded under the Plan shall be registered in the name of the participant, and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such shares.

 

7.  Shares Subject to the Plan. Subject to adjustment as provided herein, an aggregate of Awards granted under the Plan shall not be effective, unless and until the Plan shall have been duly approved by the shareholders of the Company.

 

8.  Amendment and Termination. The Board by resolution at any time may amend, suspend or terminate the Plan, provided that (a) no such action shall be taken which impairs the rights of any participant under any outstanding Award, without such participant’s consent, and (b) no amendment shall be made without shareholder approval if such approval is necessary to comply with any applicable tax or regulatory requirement, including any requirements for exemptive relief under Section 16(b) of the Act, or any successor provision.

 

9. Effect of Changes in Common Stock. If the Company shall combine, subdivide or reclassify the shares of Common Stock which have been or may be awarded under the Plan, or shall declare thereon any dividend payable in shares of Common Stock, or shall take any other action of a similar nature affecting the Common Stock, then the number and class of shares of stock as to which Awards may thereafter be granted (in the aggregate and to any participant) shall be appropriately adjusted and, in the case of each Award outstanding at the time of any such action, the number and class of shares subject to such Award shall likewise be appropriately adjusted, all to such extent as may be determined by the Committee in its sole discretion, with the approval of counsel, to be necessary to preserve unimpaired the rights of the participant. Each and every such determination shall be conclusive and binding upon the participants.

 

10. Effect of Reorganizations. In case of any one or more reclassifications, changes or exchanges of outstanding shares of common Stock or other stock (other than as provided in Section 11), or consolidations of the Company with, or mergers of the Company into, other corporations, or other recapitalizations or reorganizations (other than consolidations with a subsidiary in which the Company is the continuing corporation and which do not result in any reclassifications, changes or exchanges of shares of the Company), or in case of any one or more sales or conveyances to any other corporation of the property of the Company as an entirety, or substantially as an entirety, any and all of which are hereinafter in this Section called “Reorganizations,” a participant shall have the right, upon any subsequent receipt of shares pursuant to an Award, to acquire the same kind and amount of securities and property which such participant would then have if such participant had received such shares immediately before the first of any such Reorganizations and continued to hold all securities and property which came to such participant as a result of that and subsequent Reorganizations, less all securities and property surrendered or canceled pursuant to any of the same, the adjustment rights in Section 9 and this Section 10 being continuing and cumulative.  

 

Notwithstanding any provision of Section 6 or any foregoing provision of this Section 10 to the contrary, the Committee shall have the right in connection with any Reorganization, upon not less than thirty (30) days’ written notice to the participants, to terminate all outstanding Awards. In connection with such termination, the Committee in its discretion, prior to the effective date of the reorganization, may remove the restrictions from some or all outstanding shares of Restricted Stock.

 

11.   Change in Control. In the event that at any time after the effective date of the Plan the Company shall have a “Principal Stockholder,” as hereinafter defined, then notwithstanding anything to the contrary contained herein, upon the date such event occurs, all restrictions imposed pursuant to Section 6 with respect to shares shall immediately lapse, unless the Board by unanimous vote of members who served as directors before such event and who constitute at least fifty-one (51) percent of the Board determines otherwise.

 

For purposes of this Section 11, (a) the term “Principal Stockholder” means any corporation, person or other entity (“person”) owning beneficially, directly or indirectly, shares of the capital stock of the Company entitled to cast twenty-five percent (25%) or more of the votes at the time entitled to be cast generally in the election of Directors by all of the outstanding shares of all classes of capital stock of the Company (other than any such shares held by any qualified employee benefit plan maintained by the Company), considered for purposes of this Section 11 as one class; (b) in determining such ownership, a person shall be deemed to be the beneficial owner of any shares of capital stock of the Company which are beneficially owned, directly or indirectly, by any other person (i) with which it or its “affiliate” or “associate,” as hereinafter defined, has any agreement, arrangement or understanding for the purposes of acquiring, holding, voting or disposing of capital stock of the company or (ii) which is its “affiliate” or “associate;”(c) a person shall be deemed to be an “affiliate” of, or affiliated with, a specified person if such person directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified; and (d) the term “associate” used to indicate a relationship with any person shall mean (A) any corporation or organization (other than the Company or any subsidiary of the Company) of which such person is an officer or partner or is, directly or indirectly, the beneficial owner of ten percent (10%) or more of any class of equity security, (B) any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity, and (C) any relative or spouse of such person, or any relative of such spouse, who has the same home as such person.

 

12.  General Provisions.

 

(a)  

Notwithstanding any other provision of the Plan, to the extent required to qualify

for the exemption provided by Rule 16b-3 under the Act, and any successor provision, any Common Stock or other equity security offered under the Plan to a person subject to Section 16 of the Act may not be sold for at least six months after acquisition. 

 

(b)  

Each Award under the Plan shall be evidenced by a writing delivered to the

participant specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the provisions of the Plan as the Committee considers necessary or advisable to achieve the purposes of the Plan or comply with applicable tax or regulatory laws and accounting principles.

 

(c)  

The terms of each Award need not be identical, and the Committee need not treat

participants uniformly. Except as otherwise provided by the Plan or a particular Award, any determination with respect to an Award may be made by the Committee at the time of award or at any time thereafter.

 

(d)  

No Award may be transferred other than by will or by the laws of descent and

distribution.

 

(e)  

When a participant purchases Restricted Stock pursuant to an Award for a price

equal to the par value of the Restricted Stock, the Committee in its discretion may determine that such price has been satisfied by past services rendered by the participant.

 

13. Interpretation. The interpretation and construction of any provision of the Plan and the adoption of rules and regulations for administering the Plan shall be made by the Committee. Determinations made by the Committee with respect to any matter or provision contained in the Plan shall be final, conclusive and binding upon the Company and upon all participants, their heirs and legal representatives. Any rule or regulation adopted by the Committee (whether under the authority of this Section or Section 2 above) shall remain in full force and effect unless and until altered, amended or repealed by the Committee.