<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
MULTI-COLOR CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
================================================================================
<PAGE> 2
NOTICE OF ANNUAL MEETING
October 15, 1998
AND PROXY STATEMENT
MULTI-COLOR CORPORATION
205 West Fourth Street, Suite 1140
Cincinnati, Ohio 45202
Dear Shareholder:
We invite you to attend our annual meeting of shareholders on October 15, 1998,
in Cincinnati, Ohio. At the meeting, you will hear a report on our operations
and have a chance to meet your directors and executives.
This booklet includes the formal notice of the meeting and the proxy statement.
The proxy statement tells you more about the agenda and procedures for the
meeting. It also describes how the Board operates and gives personal information
about our director candidates.
Our proxy statement has a new look this year. We hope you find it easy to read
and understand.
Even if you only own a few shares, we want your shares to be represented at the
meeting. I urge you to complete, sign, date, and return your proxy card promptly
in the enclosed envelope.
To attend the meeting in person, please follow the instructions on page 1.
Sincerely yours,
Louis M. Perlman
Chairman of the Board
September 11, 1998
[Company Logo]
<PAGE> 3
NOTICE OF ANNUAL MEETING
OF
SHAREHOLDERS OF MULTI-COLOR CORPORATION
TIME:
12:30 p.m., Eastern Time
DATE:
October 15, 1998
PLACE:
Multi-Color Corporation
205 West Fourth Street
Cincinnati, Ohio 45202
PURPOSE:
. Elect directors
. Vote on the 1998 Non-Employee Director Stock Option Plan
. Ratify appointment of Grant Thornton LLP as the Company's
independent public accountants for fiscal year 1999
. Conduct other business if properly raised
Only shareholders of record on August 24, 1998 may vote at the meeting.
The approximate mailing date of this Proxy Statement and accompanying Proxy
Card is September 11, 1998.
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE, AND RETURN YOUR
PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
William R. Cochran
Secretary
September 11, 1998
<PAGE> 4
TABLE OF CONTENTS PAGE
- -------------------------------------------------------------------------
GENERAL INFORMATION...................................................-1-
ELECTION OF DIRECTORS.................................................-2-
APPROVAL OF 1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN..............-3-
RATIFICATION OF APPOINTMENT OF ACCOUNTANTS............................-4-
DIRECTOR COMPENSATION.................................................-4-
BOARD COMMITTEES......................................................-4-
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION...............-4-
PRINCIPAL SHAREHOLDERS................................................-6-
DIRECTORS AND EXECUTIVE OFFICERS .....................................-7-
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE...............-8-
CERTAIN TRANSACTIONS..................................................-8-
SUMMARY COMPENSATION TABLE...........................................-10-
OPTION GRANTS IN LAST FISCAL YEAR....................................-12-
PERFORMANCE GRAPH....................................................-12-
SHAREHOLDER PROPOSALS FOR NEXT YEAR..................................-13-
QUESTIONS?...........................................................-13-
EXHIBIT A............................................................-14-
<PAGE> 5
-1-
GENERAL INFORMATION
WHO MAY VOTE
Shareholders of Multi-Color, as recorded in our stock register on August 24,
1998, may vote at the meeting. As of that date, Multi-Color had 2,292,460 shares
of Common Stock outstanding.
HOW TO VOTE
You may vote in person at the meeting or by proxy. We recommend you vote by
proxy even if you plan to attend the meeting. You can always change your vote at
the meeting.
HOW PROXIES WORK
Multi-Color's Board of Directors is asking for your proxy. Giving us your proxy
means you authorize us to vote your shares at the meeting in the manner you
direct. You may vote for all, some, or none of our director candidates. You may
also vote for or against the other proposals or abstain from voting.
If you sign and return the enclosed proxy card but do not specify how to vote,
we will vote your shares in favor of our director candidates, in favor of the
1998 Non-Employee Director Stock Option Plan and in favor of the ratification of
Grant Thornton LLP as the Company's independent public accountants for fiscal
year 1999.
You may receive more than one proxy or voting card depending on how you hold
your shares. Shares registered in your name are covered by one card. And if you
hold shares through someone else, such as a stockbroker, you may get material
from them asking how you want to vote.
REVOKING A PROXY
You may revoke your proxy before it is voted by submitting a new proxy with a
later date, by voting in person at the meeting, or by notifying Multi-Color's
Secretary in writing at the address under "Questions?" on page 13.
QUORUM
In order to carry on the business of the meeting, we must have a quorum. This
means at least a majority of the outstanding shares eligible to vote must be
represented at the meeting, either by proxy or in person. Shares owned by
Multi-Color are not voted and do not count for this purpose.
VOTES NEEDED
The director candidates receiving the most votes will be elected to fill the
seats on the Board. Approval of the other proposals require the favorable vote
of a majority of the votes cast. Only votes for or against a proposal count.
Abstentions and broker non-votes count for quorum purposes but not for voting
purposes. Broker non-votes occur when a broker returns a proxy but does not have
authority to vote on a particular proposal.
ATTENDING IN PERSON
Only shareholders, their proxy holders, and Multi-Color's guests may attend the
meeting.
OTHER MATTERS
Any other matters considered at the meeting including adjournment will require
the affirmative vote of a majority of shares voting.
VOTING BY PROXY
All proxies properly signed will, unless a different choice is indicated, be
voted "FOR" the election of all nominees for Directors proposed by the Board of
Directors, "FOR" the adoption of the 1998 Non-Employee Stock Option Plan and
"FOR" ratification of the selection of independent public accountants.
If any other matters come before the meeting or any adjournment, each proxy will
be voted in the discretion of the individuals named as proxies on the card.
<PAGE> 6
-2-
ELECTION OF DIRECTORS
(ITEM 1 ON THE PROXY CARD)
The Board has nominated the director candidates named below.
The Board of Directors oversees the management of the Company on your behalf.
The Board reviews Multi-Color's long-term strategic plans and exercises direct
decision-making authority in key areas, such as, choosing the Chief Executive
Officer, setting the scope of his authority to manage the company's business day
to day, and evaluating his performance. The Board also reviews development and
succession plans for Multi-Color's top executives.
The Company's Code of Regulations requires that the Board of Directors consist
of at least three members with the exact number to be established by
shareholders or the Board of Directors. The Board of Directors has established a
board consisting of six directors.
The Board is nominating for election all of the following: Gordon B. Bonfield,
Charles B. Connolly, Lorrence T. Kellar, Burton D. Morgan, David H. Pease, Jr.,
and Louis M. Perlman. Pursuant to the terms of the Company's Series A
Convertible Preferred Stock, (the "Series A Preferred"), the holders of the
Series A Preferred are entitled to elect one member to the Company's Board of
Directors.
Mr. Perlman was elected to the Board of Directors in May, 1996 as the Board
designee of the holders of the Series A Preferred, and has been nominated for
reelection by the holders of the Series A Preferred as the designee of the
Series A Preferred. Proxies solicited by the Board will be voted for the
election of these nominees. All directors elected at the Annual Meeting will be
elected to hold office until the next annual meeting. In voting to elect
directors, shareholders are not entitled to cumulate their votes.
Most Multi-Color directors - including five of our six nominees - are not
Multi-Color employees. Only non-employee directors serve on Multi-Color's Audit
and Compensation committees. All Multi-Color directors are elected for one-year
terms. Personal information on each of our nominees is given below.
The Board met seven times last year. On average, Multi-Color's directors
attended 96% of Board and committee meetings.
If a director nominee becomes unavailable before the election, your proxy card
authorizes us to vote for a replacement nominee if the Board names one.
Nominees receiving the highest number of votes cast for the positions to be
filled will be elected.
THE BOARD RECOMMENDS YOU VOTE FOR EACH OF THE FOLLOWING CANDIDATES:
- -------------------------------------------------------------------------------
Gordon B. Bonfield Mr. Bonfield was elected a Director in December, 1997
Age 47 and President and Chief Executive Officer of the Company
Director since 1997 on January 7, 1998. He began employment on January 12,
1998. Mr. Bonfield has 23 years of packaging and
printing experience and was most recently president of
Fort James Corporation's Packaging Business, which was
headquartered in Milford, Ohio. He joined Fort James in
1988 as Vice President and General Manager for the
Folding Carton Group. Prior to joining Fort James, Mr.
Bonfield was Vice President and General Manager of the
folding carton division of Packaging Corporation of
America which he joined in 1975 as a sales
representative.
- -------------------------------------------------------------------------------
Charles B. Connolly Mr. Connolly was nominated for appointment to the Board
Age 41 of Directors on August 13, 1998. Mr. Connolly has 19
Nominee in 1998 years of experience in the converting, coating and
packaging industries. He has served as Managing Partner
of Russell-Field Sales, LLC, a Chicago-based converter
of specialty paper and plastic substrates, since April,
1996. From March, 1994 to April, 1996 he served as Vice
President, Sales and Marketing for Lawson Mardon
Packaging. Prior to joining Lawson Mardon Packaging,
Mr. Connolly was Vice President and General Manager of
Camvac America, a subsidiary of Rexam P.L.C, that
produces vacuum metallized films, which he joined in
1984.
- -------------------------------------------------------------------------------
<PAGE> 7
-3-
Lorrence T. Kellar Mr. Kellar was appointed a Director of the Company in
Age 61 January, 1988. Mr. Kellar has been Vice President, Real
Director since 1988 Estate of Kmart Corporation since April, 1996. Prior to
that time, he served as Group Vice President of The
Kroger Co., having joined the company in 1965. His prior
positions with The Kroger Co. included Vice President of
Corporate Development and Vice President-Treasurer. Mr.
Kellar also serves as a Director of BT Office Products,
International and Loehmanns, Inc.
- -------------------------------------------------------------------------------
Burton D. Morgan Mr. Morgan served the Company as Chairman of the Board
Age 82 of Directors from 1985 through August, 1996. Mr. Morgan
Director since 1985 has been President of Basic Search, Inc., an Ohio-based
venture capital firm, since its founding in 1977. Mr.
Morgan founded two companies which produce adhesive
label stock. Mr. Morgan continues to serve as a member
of the Board of Directors of one of these companies,
Morgan Adhesives, Inc.
- -------------------------------------------------------------------------------
David H. Pease, Jr. Mr. Pease has served as a Director of the Company since
Age 69 March, 1987. He is the Chairman and Chief Executive
Director since 1987 Officer of Pease Industries, Inc., a Cincinnati-based
manufacturer of residential building products, and has
held these positions since 1980.
- -------------------------------------------------------------------------------
Louis M. Perlman Mr. Perlman was elected to the Company's Board of
Age 52 Directors in May, 1996 as the Board representative of
Director since 1996 the Series A Preferred and was elected Chairman of the
Board of Directors on March 5, 1998. Mr. Perlman started
as a consultant to the metals and minerals industry and
subsequently expanded into real estate and other
investments, including a group of trade publications
specializing in the chemical industry which included
Chemical Week. For over five years, Mr. Perlman has been
the President of Lazam Partners Ltd, which invests in
real estate.
- -------------------------------------------------------------------------------
APPROVAL OF 1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(ITEM 2 ON THE PROXY CARD)
The Board of Directors recommends the approval of the 1998 Non-Employee Director
Stock Option Plan under which 90,000 shares of Multi-Color Common Stock would be
reserved for issuance. This Plan was adopted by the Board of Directors on August
13, 1998, subject to shareholder approval. The following is a summary of the
Plan which appears in its entirety as Exhibit A to this Proxy Statement.
The Plan provides that options are to be granted with exercise prices at the
fair market value of the Common Stock of the Company on the date of the grant.
The closing price of the Company's Common Stock on August 24, 1998 was $6.00 per
share. Options may be granted for varying periods up to ten years. Options are
to be granted as non-qualified Options that do not qualify for the tax benefits
provided under Section 422 of the Internal Revenue Code of 1986, as amended.
The right to exercise options vests immediately upon the time of grant. Options
may be exercised for cash or for Company Common Stock at its fair market value
on the date of the exercise. If a non-employee director ceases to be a member of
the Board of Directors (other than by reason of death or disability) the option
may be exercised by the director at any time within ninety days after he ceases
to be a director, but not beyond the term of the option.
If the Plan is approved by the Shareholders, the Compensation Committee will
administer the Plan. Immediately after the Plan is approved and on each
anniversary of that date, each current non-employee director shall be granted an
option to purchase 2,000 shares of Company Common Stock. Committee members also
receive 2,000 non-qualified stock options per year per committee, up to a total
of 6,000 non-qualified stock options per fiscal year. All current and
subsequently appointed non-
<PAGE> 8
-4-
employee directors of the Company are eligible to receive awards under the Plan.
Non-employee directors who receive options incur no federal income tax liability
at the time of grant. Such directors exercising non-qualified options recognize
taxable income and the Company has a tax deduction at the time of exercise to
the extent of the difference between the market price on the day of exercise and
the exercise price.
The affirmative vote of a majority of votes cast at the meeting is required to
approve the adoption of the Plan.
RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
(ITEM 3 ON THE PROXY CARD)
Although not required by law, the Board is seeking shareholder ratification of
its selection of Grant Thornton LLP. An affirmative vote of a majority of shares
voting at the meeting is required for ratification. If ratification is not
obtained, the Board intends to continue the employment of Grant Thornton LLP at
least through fiscal 1999. Representatives of Grant Thornton LLP are expected to
be present at the Shareholders' Meeting and will be given an opportunity to
comment, if they so desire, and to respond to appropriate questions that may be
asked by shareholders.
DIRECTOR COMPENSATION
Directors who are not employees for the Company receive a $5,000 annual
retainer, non-qualified options to purchase 2,000 shares per year for serving as
a Director plus $1,000 for each meeting attended. Committee members also receive
2,000 non-qualified stock options per year per committee, up to a total of 6,000
non-qualified stock options per fiscal year. Directors who are not employees of
the Company will be eligible to receive awards under the 1998 Non-Employee
Director Stock Option Plan, if this Plan is approved by the shareholders.
Directors who are employees of the Company are not separately compensated for
serving as Directors.
BOARD COMMITTEES
The Board appoints committees to help carry out its duties. In particular, Board
committees work on key issues in greater detail than would be possible at full
Board meetings. Each committee reviews the results of its meetings with the full
Board. The Board of Directors does not have a nominating committee.
THE AUDIT COMMITTEE is responsible for reviewing the Company's internal
accounting operations. It also recommends the employment of independent
accountants and reviews the relationship between the Company and its outside
accountants. This committee was established in June of 1988.
Committee members: Messrs. Kellar (Chairman), Pease and Perlman.
Meetings last year: four
THE COMPENSATION COMMITTEE is responsible for establishing compensation for
management and administering the Company's stock option plans.
Committee members: Messrs. Kellar, Pease (Chairman) and Perlman.
Meetings last year: one
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION POLICIES
The Company's policies on executive compensation are designed to encourage and
motivate its executive officers to achieve both short-term and long-term
operating, financial and strategic goals, and thereby build shareholder value on
a steady but aggressive basis. To that end, senior executive compensation
packages are increasingly weighted towards incentive plans that emphasize stock
ownership and bonus compensation arrangements which serve to align more closely
the interests of management with shareholders. It is also the policy of the
Committee to reward superior corporate performance, recognize individual
initiative and achievement, and assist the Company in attracting and retaining
qualified executives.
The Omnibus Budget Reconciliation Act of 1993 provides that compensation in
excess of $1,000,000 per year paid to the Chief Executive Officer of a public
company as well as the other executive officers listed in the compensation table
will no longer be deductible unless the compensation is "performance-based" and
approved by the shareholders. The Committee does not believe any action is
required by the Company or its shareholders in order for the compensation paid
to its
<PAGE> 9
-5-
executive officers to meet the requirements for deductibility.
SALARIES
The Committee believes it is important to maintain executive salaries at
competitive levels, and relies heavily on comparisons with other regional
companies of similar size. In determining salary adjustments for executive
officers, the Committee takes into account, among other things, the salaries
paid by comparable regional companies as reported in a study commissioned by the
Company from a local consultant. The Committee believes these materials provide
a broad representation of salaries paid in the region, which gives the Committee
a reasonable basis for establishing salary levels and adjustments.
Salary levels and adjustments targeted are the average of the reported ranges.
In establishing current salaries, the Committee took into account the Company's
recent performance based on certain general financial and operational criteria.
The Committee did not, however, base its decisions on salary levels or
adjustments on specific quantifiable performance goals or targets, but attempted
to maintain salaries at a level which will allow the Company to compete in the
marketplace for executive talent. In addition, the Committee did not compare the
Company's executive compensation with the levels of compensation paid by
companies in the Media General Nasdaq Market Index or the Media General MG
Industry Group 093-Printing Index, nor did the Committee attempt to correlate
executive compensation levels with the Company's relative performance as shown
in the financial performance graph contained in this Proxy Statement.
With respect to the salaries paid to Mr. Court and Mr. Bonfield, who was elected
President to replace Mr. Court on January 7, 1998, the Committee utilized the
salary data, Company performance and the other factors described above. The
committee also evaluated the abilities of Mr. Court and Mr. Bonfield to develop
and implement strategic plans for company growth and profitability. The
Committee determined that their salaries are appropriate in light of these
factors. In addition, Mr. Bonfield's compensation was negotiated in connection
with the terms of his employment in January, 1998.
ANNUAL BONUSES
In its consideration of annual bonus awards, the Committee utilized the
compensation survey mentioned above, but relied on such data to a lesser extent
than in its review of the salary component.
STOCK OPTIONS
The Company's 1985 and 1997 Stock Option Plans are the principal means by which
long-term incentive compensation is provided for key officers and employees of
the Company and the interests of these persons are brought more closely into
tandem with the interests of shareholders. The Plans are administered by the
Compensation Committee.
The Company's policies on executive compensation are applicable to all decisions
regarding the number, pricing, timing and the recipients of stock option grants.
RESPECTFULLY SUBMITTED BY THE MEMBERS OF THE COMPENSATION AND STOCK OPTION
COMMITTEES, LORRENCE T. KELLAR, LOUIS M. PERLMAN, AND DAVID H. PEASE, JR.
(CHAIRMAN)
<PAGE> 10
-6-
PRINCIPAL SHAREHOLDERS
The following persons are the only shareholders known by the Company to own
beneficially 5% or more of its outstanding Common Stock as of August 24, 1998:
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership of Class
------------------------ -------------------- ---------
<S> <C> <C>
Label Venture Group LLC 531,000(1)(2) 22.6%
Burton D. Morgan 384,947(2) 16.7%
John C. Court 582,281(3) 23.9%
Dimensional Fund Advisors Inc. 144,100(4) 6.3%
</TABLE>
The business address of Label Venture Group LLC is 650 Madison Avenue, 21st
Floor, New York, New York 10022. The business address of Dimensional Fund
Advisors Inc. is 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401.
The business address of Mr. Court is 2145 East Hill Avenue, Cincinnati, Ohio
45208. The business address of all other persons is 205 West Fourth Street,
Cincinnati, Ohio 45202.
1. Includes 525,000 shares of Common Stock issuable upon conversion of the
Company's Series A Convertible Preferred Stock. Louis M. Perlman,
Chairman of the Board of Directors of the Company, is a co-manager of
Label Venture Group LLC which owns an equity interest in the Company.
This 525,000 shares does not include 16,000 shares held by the
Multi-Color Defined Benefit Plan of which Mr. Perlman is a trustee.
2. Included in the amount of Common Stock beneficially owned are the
following shares of Common Stock subject to exercisable options or
options exercisable within 60 days: Mr. Morgan - 8,000 shares and Mr.
Perlman - 6,000 shares.
3. Included in the amount of Common Stock beneficially owned are 39,730
shares of Common Stock issuable upon conversion of the Company's Series
B Convertible Preferred Stock. Also included are 106,625 shares of
Common Stock subject to exercisable options or options exercisable
within 60 days and 97,160 shares beneficially owned pursuant to a
deferred compensation agreement.
4. Based on the filing made on February 10, 1998 by DFA Investment
Dimensions Group, Inc. with the Securities and Exchange Commission, all
shares are held in portfolios of DFA Investment Dimensions Group Inc.,
a registered open-end investment company, or in series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group
Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund
Advisors Inc. serves as investment manager. Dimensional Fund Advisors
Inc. disclaims beneficial ownership of all such shares.
<PAGE> 11
-7-
DIRECTORS AND EXECUTIVE OFFICERS
This table lists the executive officers and directors of Multi-Color and shows
how much common stock each owned on August 24, 1998.
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned(1)
Name and Age Position Amount Percentage
- ------------ -------- ------ ----------
<S> <C> <C> <C>
Louis M. Perlman(2)(3)(4)(5) Chairman of the Board of 531,000 22.6%
52 Directors
Gordon B. Bonfield President and Chief 10,000 *
47 Executive Officer, Director
Burton D. Morgan(2) Director 384,947 16.7%
82
John R. Voelker(6) Vice President of Sales & 75,805 3.3%
55 Marketing
Lorrence T. Kellar(3)(4)(7) Director 67,352 2.9%
61
David H. Pease, Jr.(3)(4)(7) Director 45,352 2.0%
69
William R. Cochran(8) Vice President, Chief 17,625 *
45 Financial Officer, Secretary
Francis D. Gerace(9) Vice President of Operations 7,500 *
45
Steven G. Mulch(10) Vice President of Corporate 2,000 *
48 Sales and Business
Development
Charles B. Connolly Nominee for Director 1,667 *
41
All Executive Officers and Directors as 1,143,248 48.2%
a group (Ten Persons)
</TABLE>
- -------------------
1. Included in the amount of Common Stock Beneficially Owned are the
following shares of Common Stock subject to exercisable options or
options exercisable within 60 days: Mr. Perlman - 6,000 shares, Mr.
Morgan - 8,000 shares, Mr. Kellar - 24,000 shares, Mr. Pease - 24,000
shares and Mr. Cochran - 15,125 shares.
2. See "Principal Shareholders."
3. Audit Committee Member
4. Compensation Committee Member
<PAGE> 12
-8-
5. Mr. Perlman is the co-manager of Label Venture Group LLC. Except
through his equity interest in the Company through Label Venture Group
LLC and certain management fees payable by Label Venture to Mr.
Perlman, Mr. Perlman disclaims beneficial ownership of the securities
held of record by Label Venture.
6. Mr. Voelker was appointed Vice President of Sales and Marketing of the
Company in June of 1995. Prior to that time Mr. Voelker served as the
Company's Vice President National Accounts from 1992 to 1995 and Vice
President Multi-Color Graphics from 1989 to 1992.
7. Included in the amount of Common Stock Beneficially Owned are the
following shares of Common Stock issuable upon exercise of the
Company's Series B Convertible Preferred Stock: Mr. Kellar - 19,860
shares and Mr. Pease - 19,860 shares.
8. Mr. Cochran was appointed Vice President, Chief Financial Officer of
the Company in June of 1994 and Secretary in June of 1998. Prior to
joining Multi-Color, Mr. Cochran was Chief Financial Officer of
AluChem, Inc. from 1990 to 1994. From 1975 to 1990, Mr. Cochran was
employed in various accounting functions for Libbey Owens Ford,
Owens-Corning and Deloitte & Touche, LLP.
9. Mr. Gerace was appointed Vice President of Operations of the
Company on April 6, 1998. Prior to joining Multi-Color, Mr. Gerace
was Director of Strategic Business Systems for Fort James
Corporation's Packaging Business from 1993 to 1997. From 1974 to
1993, Mr. Gerace held various general management positions with
Conagra, Inc. and Beatrice Foods Company.
10. Mr. Mulch was appointed Vice President of Corporate Sales and Business
Development on April 6, 1998. Prior to joining Multi-Color, Mr. Mulch
was Vice President and General Manager of a four plant division of Fort
James Packaging Business from 1991 to 1997. From 1972 to 1991, Mr.
Mulch held various positions with Tenneco, Inc. including general
manager of the offset carton converting plant in Grand Rapids,
Michigan.
* Less than 1%
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and persons who own more than 10% of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership. Based on a review of the copies of such forms received
by it, the Company believes that during the last fiscal year, all of its
executive officers, directors and ten percent stockholders complied with the
Section 16 reporting requirements, except that a grant of options to Mr.
Bonfield was reported in a Form 4 three months later than required.
CERTAIN TRANSACTIONS
<PAGE> 13
-9-
During 1992 the Company established a supplemental retirement plan for
key executives which allows the Company to extend a maximum of $300,000 in loans
to such employees with a maximum of $100,000 to any one individual. At March 29,
1998 and March 30, 1997 a $100,000 loan at no interest was outstanding under
this program from John C. Court, the prior President and Chief Executive Officer
of Multi-Color. This loan is to be paid as part of a separation agreement
between the Company and Mr. Court. The agreement provides for the settlement of
all matters between the Company and Mr. Court with mutual releases. In addition,
Multi-Color will distribute to Mr. Court 97,160 shares of Multi-Color common
stock held by the Company under a deferred compensation account established
previously for Mr. Court. Multi-Color will also distribute to Mr. Court, after
it has paid all accrued and unpaid preferred dividends, the following: (i)
$68,270 in payment of a 1996 unpaid bonus; and (ii) $194,948 in payment of a
deferred compensation account less $100,000 to cancel the previously mentioned
no interest loan payable by Mr. Court to Multi-Color. Multi-Color issued to Mr.
Court options to purchase 91,000 shares of its common stock at an exercise price
of $7.375 per share, 12,500 shares at an exercise price of $2.625 per share and
3,125 shares at an exercise price of $6 per share all expiring July 9, 2001.
These options represent the number of optioned shares held by Mr. Court which
had vested pursuant to the Company's stock option plans as of his termination of
employment on April 7, 1998. All other options held by Mr. Court were canceled.
Mr. Court will also be paid three years of severance compensation at $42,000 per
year and $403 per month for three years to cover group health insurance. Mr.
Court also agreed to vote all shares of Common Stock now or hereafter owned by
him in favor of the election of Messrs. Bonfield, Kellar, Morgan, Pease and
Perlman or their replacements as directors of Multi-Color and appointed Messrs.
Bonfield and Perlman or either of them as his proxies for that purpose. Mr.
Court's voting obligation continues until May 1, 2001 so long as Messrs. Kellar
or Pease is willing to serve as a nominee of the Board of Directors for election
to the Board with provisions for the establishment of successors. Mr. Court also
agreed that until May 1, 2001 he would not seek election to nor serve on the
Board of Directors nor vote his shares in favor of changing the number of
directors.
In July 1998 the Company also entered into a separation agreement with
John D. Littlehale, the prior Vice President of Manufacturing of Multi-Color.
After payment of all accrued and unpaid preferred dividends Multi-Color will
distribute $51,183 to Mr. Littlehale in full payment of his deferred
compensation accounts less approximately $7,000 in outstanding obligations to
Multi-Color. Multi-Color also issued to Mr. Littlehale options to purchase
27,300 shares of common stock at an exercise price of $7.325 per share, 5,000
shares at an exercise price of $2.625 per share and 1,250 shares at an exercise
price of $6 per share all expiring July 15, 2001. Those options represent the
number of optioned shares held by Mr. Littlehale which had vested pursuant to
the Company's stock option plan as of March 5, 1998 when Mr. Littlehale's
employment was terminated. All other options held by him were canceled.
Multi-Color will pay Mr. Littlehale two years of severance compensation at the
rate of $10,000 per year and $403 per month for two years to cover group health
insurance. Mr. Littlehale also resigned as a director of Multi-Color and the
parties gave mutual releases.
<PAGE> 14
-10-
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options (#) Compensation(3)
- ------------------ ---- ------- ----- ------------ ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Gordon B Bonfield 1998(4) $ 44,745 $21,000 $11,400(1) 50,000 $ 3,900
President
Chief Executive
John C Court 1998(4) $180,208 -0- $55,271(2) -0- $ 3,740
President 1997 200,004 68,720 49,710 12,500 9,069
Chief Executive 1996 188,335 45,000 33,500 25,000 53,750
John D Littlehale 1998(5) $ 98,087 -0- $14,158(2) -0- $ 3,250
Vice President
Manufacturing, 1997 100,000 $17,180 13,348 5,000 3,729
Secretary 1996 94,177 25,000 8,500 10,000 2,825
John R Voelker 1998 $107,701 -0- $11,543(2) -0- $ 3,434
Vice President 1997 100,000 $17,180 11,061 -0- 3,729
Sales and 1996 93,893 25,000 2,700 10,000 2,817
Marketing
William R. Cochran 1998(6) $100,008 -0- $11,164(2) -0- $ 3,251
Vice President 1997 90,000 $15,462 9,825 2,500 3,319
Finance/CFO, 1996 84,174 21,250 2,300 5,000 2,945
Secretary
</TABLE>
1. The dollar value represents the difference between the purchase
price of $5.36 and the fair market value of $6.50 on the date of
purchase times the 10,000 shares purchased.
2. The Company has established a supplemental retirement program for key
executives based on a percentage of the executive's salary. The
percentage ranges from 8% to 15% of compensation. In fiscal 1998 each
of the Accounts was credited with the following amounts: Mr. Court
$55,271; Mr. Littlehale $14,158; Mr. Voelker $11,543; and Mr. Cochran
$11,164 representing a percentage of salary plus accrued interest under
this plan.
3. All other compensation includes the Company's contribution to the
Multi-Color 401(k) profit sharing retirement savings plan (the
"Retirement Plan"), the Multi-Color Corporation 1987 Employee Stock
Purchase Plan and interest earned through the deferred compensation
plan. Fiscal 1998 amounts are comprised of the Company's contributions
under the Retirement Plan of $3,740 for Mr. Court; $3,250 for Mr.
Littlehale; $3,434 for Mr. Voelker; and $3,251 for Mr. Cochran. Mr.
Bonfield's compensation also includes the payment by the Company of
$3,900 of certain benefits, including automobile allowance, on his
behalf.
4. Mr. Bonfield was elected on January 7, 1998 to replace Mr. Court as
President and Chief Executive Officer beginning January 12, 1998.
5. Mr. Littlehale resigned his positions of Vice President of
Manufacturing and Secretary on March 5, 1998.
6. Mr. Cochran was appointed Secretary on June 15, 1998.
<PAGE> 15
-11-
The Company and Mr. Bonfield have reached an agreement in principle to
employ him through the period ending March 31, 2000 and to pay Mr. Bonfield an
annual salary of $200,000 to be adjusted annually based on his performance as
well as a bonus pursuant to the Executive Incentive Compensation Plan adopted
by the Board of Directors in April, 1998. Pursuant to the Agreement, the
Company will also grant Mr. Bonfield the immediate right to purchase up to
65,000 shares at $6.50 per share of Multi-Color Common Stock along with the
right to purchase up to 35,000 shares before July 12, 1999, also at $6.50 per
share. The Company has granted Mr. Bonfield a five-year option for 100,000
shares of Multi-Color Common Stock pursuant to the 1997 Stock Option Plan. This
option vests one-third on each anniversary of the date of grant. Other details
of the agreement have not been finalized.
The Company maintains stock options plans which authorize the issuance
of incentive and non-qualified stock options. Options granted under the plans
contain such terms and conditions as are established by the Board of Directors
at the time of the grant. All outstanding options generally have either six year
or five year terms and vest twenty percent per year over five years in the case
of six year options and twenty-five percent per year over four years in the case
of five year options.
<PAGE> 16
-12-
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realized Value
of Assumed Annual
% of Total Rates of Price Appreciation
Options for Option Term
Price ---------------
Granted for
Options Employees Exercise
Individual Grants Granted in Fiscal Year ($/Per Share) Expiration Date 5% 10%
- ----------------- ------- -------------- ------------- --------------- --- ---
<S> <C> <C> <C> <C> <C> <C>
Gordon B. Bonfield 50,000 33% $6.77 1/12/2003 $93,521 $206,658
John C. Court -0- -- -- -- -- --
John D. Littlehale -0- -- -- -- -- --
John R. Voelker -0- -- -- -- -- --
William R. Cochran -0- -- -- -- -- --
</TABLE>
No options were exercised during the last fiscal year by any of the
individuals named in the above compensation table.
PERFORMANCE GRAPH
The following performance Graph compares the Company's cumulative total
shareholder return from March 28, 1993 through March 29, 1998, to that of the
Media General Nasdaq Market Index, a broad market index, and Media General MG
Industry Group 093 - Printing, an index of printing industry peer companies. The
Graph assumes that the value of the investment in the Company's Common Stock and
each index was $100.00 on March 28, 1993 and that all dividends were reinvested.
Stock price performances shown in the Graph are not indicative of future price
performances. This data was furnished by Media General Financial Services.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG MULTI-COLOR CORPORATION,
MEDIA GENERAL NASDAQ MARKET
INDEX AND MEDIA GENERAL MG
INDUSTRY GROUP 093--PRINTING
<TABLE>
<CAPTION>
Media General Media General MG
Measurement Period Multi-Color Nasdaq Market Industry Group
(Fiscal Year Covered) Corporation Index 093-Printing
-------------------- ----------- ----- ------------
Measurement Pt.
<S> <C> <C> <C>
03/28/93 $100.00 $100.00 $100.00
04/03/94 117.65 115.57 93.78
04/02/95 47.06 122.61 104.16
03/31/96 52.94 164.91 123.24
03/30/97 67.65 184.50 132.28
03/29/98 73.53 278.82 153.69
</TABLE>
<PAGE> 17
-13-
SHAREHOLDER PROPOSALS FOR NEXT YEAR
The deadline for shareholder proposals to be included in the Proxy
Statement for next year's meeting is February 28, 1999.
The form of Proxy for this meeting grants authority to the designated
proxies to vote in their discretion on any matters that come before the meeting
except those set forth in the Company's Proxy Statement and except for matters
as to which adequate notice is received. In order for a notice to be deemed
adequate for the 1999 Annual Shareholders' Meeting, it must be received prior to
May 14, 1999. If there is a change in the anticipated date of next year's annual
meeting (or these deadlines) by more than 30 days, we will notify you of this
change through our Form 10-Q filings.
QUESTIONS?
If you have questions or need more information about the annual
meeting, write to:
William R. Cochran
Secretary
Multi-Color Corporation
205 West Fourth Street, Suite 1140
Cincinnati, Ohio 45202
or call us at (513) 381-1480.
For information about your record holdings call the Fifth Third Bank
Shareholder Services at 1-800-837-2755. We also invite you to visit
Multi-Color's Internet site at www.multicolorcorp.com. Internet site materials
are for your general information and are not part of this proxy solicitation.
<PAGE> 18
EXHIBIT A
1998 NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN OF
MULTI-COLOR CORPORATION
1. PURPOSE OF THE PLAN. This 1998 Non-Employee Director Stock Option Plan
of Multi-Color Corporation adopted on this 15th day of October, 1998, is
intended to encourage directors of the Company who are not officers or key
employees of the Company or any of its Subsidiaries to acquire or increase their
ownership of common stock of the Company. The opportunity so provided is
intended to foster in participants an incentive to put forth maximum effort for
the continued success and growth of the Company and its Subsidiaries, to aid in
retaining individuals who put forth such efforts, and to assist in attracting
the best available individuals to the Company in the future.
2. DEFINITIONS. When used herein, the following terms shall have the
meanings set forth below:
2.1 "Board" means the Board of Directors of Multi-Color Corporation.
2.2 "Code" means the Internal Revenue Code of 1986, as in effect at
the time of reference, or any successor revenue code which may hereafter be
adopted in lieu thereof, and any reference to any specific provisions of the
Code shall refer to the corresponding provisions of the Code as it may hereafter
be amended or replaced.
2.3 "Committee" means the Compensation Committee of the Board or any
other committee appointed by the Board which is invested by the Board with
responsibility for the administration of the Plan and whose members meet the
requirements for eligibility to serve as set forth in Rule 16b-3 and in the
Plan.
2.4 "Company" means Multi-Color Corporation.
2.5 "Directors" means directors who serve on the Board and who are
not officers or key employees of the Company or any of its Subsidiaries.
2.6 "ERISA" means the Employee Retirement Income Security Act of
1974, as in effect at the time of reference, or any successor law which may
hereafter be adopted in lieu thereof, and any reference to any specific
provisions of ERISA shall refer to the corresponding provisions of ERISA as it
may hereafter be amended or replaced.
2.7 "Exchange Act" means the Securities Exchange Act of 1934, as in
effect at the time of reference, or any successor law which may hereafter be
adopted in lieu thereof, and any reference to any specific
-14-
<PAGE> 19
provisions of the Exchange Act shall refer to the corresponding provisions of
the Exchange Act as it may be amended or replaced.
2.8 "Fair Market Value" means, with respect to the Shares, (a) if
the Shares are listed or admitted for trading on any national securities
exchange or included in The Nasdaq National Market or Nasdaq SmallCap Market,
the last reported sales price of the Shares on the last business day prior to
the date the value is to be determined as reported on such exchange; (b) if the
Shares are not listed or admitted for trading on any national securities
exchange or included in The Nasdaq National Market or Nasdaq SmallCap Market,
the average of the last reported closing bid and asked quotation for the Shares
on the last business day prior to the date the value is to be determined as
reported on the Automated quotation System of NASDAQ or a similar service if
NASDAQ is not reporting such information; (c) if the Shares are not listed or
admitted for trading on any national securities exchange or included in The
Nasdaq National Market or Nasdaq SmallCap Market or quoted by NASDAQ or a
similar service, the average of the last reported bid and asked quotation for
the Shares on the last business day prior to the date the value is to be
determined as quoted by a market maker in the Shares (or if there is more than
one market maker, the bid and asked quotation shall be obtained from two market
makers and the average of the lowest bid and highest asked quotation shall be
the "Fair Market Value"); or (d) if the Shares are not listed or admitted for
trading on any national securities exchange or included in The Nasdaq National
Market or Nasdaq SmallCap Market or quoted by NASDAQ and there is no market
maker in the Shares, the fair market value of the Shares as determined by the
Committee in good faith.
2.9 "Option" means the right to purchase the number of Shares
specified by the Plan at a price and for a term fixed by the Plan, and subject
to such other limitations and restrictions as the Plan and the Committee
imposes.
2.10 "Option Agreement" means a written agreement in such form as may
be, from time to time, hereafter approved by the Committee, which shall be duly
executed by the Company and the Director and which shall set forth the terms and
conditions of an Option under the Plan.
2.11 "Permitted Transferees" means (i) the spouse, children or
grandchildren of a Director, (ii) any trustees of any trust made by the Director
primarily for the benefit of any such person identified in clause (i) or for the
-15-
<PAGE> 20
benefit of the Director, [(iii) a corporation or other entity in which the
Director owns a controlling interest,] and (iv) the beneficiaries of any trust
described in clause (ii).
2.12 "Plan" means the 1998 Non-Employee Director Stock Option Plan of
Multi-Color Corporation.
2.13 "Regulation T" means Part 220, chapter II, title 12 of the Code
of Federal Regulations, issued by the Board of Governors of the Federal Reserve
System pursuant to the Exchange Act, as amended from time to time.
2.14 "Rule 16b-3" means Rule 16b-3 of the General Rules and
Regulations of the Securities and Exchange Commission as in effect at the time
of reference, or any successor rules or regulations which may hereafter be
adopted in lieu thereof, and any reference to any specific provisions of Rule
16b-3 shall refer to the corresponding provisions of Rule 16b-3 as it may
hereafter be amended or replaced.
2.15 "Shares" means shares of the Company's no par value common stock
or, if by reason of the adjustment provisions contained herein, any rights under
an Option under the Plan pertain to any other security, such other security.
2.16 "Subsidiary" or "Subsidiaries" means any corporation or
corporations other than the Company in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
2.17 "Successor" means the legal representative of the estate of a
deceased Director or the person or persons who shall acquire the right to
exercise or receive an Option by bequest or inheritance or by reason of the
death of the Director.
2.18 "Term" means the period during which a particular Option may be
exercised.
3. STOCK SUBJECT TO THE PLAN. There will be reserved for use, upon the
exercise of Options to be granted from time to time under the Plan, an aggregate
of 90,000 Shares, which Shares may be, in whole or in part, as the Board shall
from time to time determine, authorized but unissued Shares, or issued Shares
which shall have been reacquired by the Company. Any Shares subject to issuance
upon exercise of Options but which are not issued because
-16-
<PAGE> 21
of a surrender, lapse, expiration or termination of any such Option prior to
issuance of the Shares shall once again be available for issuance in
satisfaction of Options.
4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee. Subject to the provisions of the Plan, the Committee shall have full
authority, in its discretion, to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan, and generally to interpret
and determine any and all matters whatsoever relating to the administration of
the Plan and the granting of Options hereunder. The Board may, from time to
time, appoint members to the Committee in substitution for or in addition to
members previously appointed and may fill vacancies, however caused, in the
Committee. The Committee shall select one of its members as its chairman and
shall hold its meetings at such times and places as it shall deem advisable. A
majority of its members shall constitute a quorum. Any action of the Committee
may be taken by a written instrument signed by all of the members, and any
action so taken shall be fully as effective as if it had been taken by a vote of
a majority of the members at a meeting duly called and held. The Committee shall
make such rules and regulations for the conduct of its business as it shall deem
advisable and shall appoint a Secretary who shall keep minutes of its meetings
and records of all action taken in writing without a meeting. No member of the
Committee shall be liable, in the absence of bad faith, for any act or omission
with respect to his or her service on the Committee.
5. GRANT OF OPTIONS.
5.1 Existing Directors. On the day after the Plan is approved by the
Company's shareholders ("Effective Date") and on each anniversary of the
Effective Date, each Director who (i) was a director on the Effective Date, and
(ii) is still a Director on each anniversary of the Effective Date, shall be
granted an Option to purchase 2,000 Shares without further action by the Board
or the Committee. In addition, on the Effective Date and on each anniversary of
the Effective Date, each Director who (i) serves on a committee of the Board,
and (ii) is still a member of a committee of the Board, shall receive an
additional Option to purchase 2,000 Shares without further action by the Board
or the Committee, provided that Options to purchase no more than 6,000 Shares
shall be granted to any Director in any one fiscal year of the Company.
5.2 Future Directors. Each Director who joins the Board after the
Effective Date shall be granted an Option on the first day of his initial term
on the Board to purchase 2,000 Shares without further action by the Board
-17-
<PAGE> 22
or the Committee. On each anniversary date of the Effective Date following the
date the Director joined the Board (which first anniversary date is at least six
months following the initial grant date hereunder), each such Director who is
still a Director on such anniversary date shall be granted an Option to purchase
2,000 Shares without further action by the Board or the Committee. In addition,
each such Director who is serving on a committee of the Board shall receive an
additional option to purchase 2,000 Shares on each anniversary of the Effective
Date provided that such Director remains a member of the committee of the Board
on such anniversary of the Effective Date without further action by the Board or
committee, provided that options to purchase no more than 6,000 Shares shall be
granted to any Director in any fiscal year after the fiscal year in which such a
Director first becomes a Director.
5.3 Limitations. If the number of Shares available to grant under
the Plan on a scheduled date of grant is insufficient to make all automatic
grants required to be made pursuant to the Plan on such date, then each eligible
Director shall receive an Option to purchase a pro rata number of the remaining
Shares available under the Plan; provided further, however, that if such
proration results in fractional Shares, then such Option shall be rounded down
to the nearest number of whole Shares.
6. BASIC STOCK OPTION PROVISIONS.
6.1 Option Price. The option price per share of any Option granted
under the Plan shall be the Fair Market Value of the Shares covered by the
Option on the date the Option is granted.
6.2 Terms of Options.
(a) Options granted hereunder shall be exercisable for a Term
of ten (10) years from the date of grant thereof, but shall be subject to
earlier termination as hereinafter provided, and
(b) Any Option granted hereunder may be exercised immediately
after the grant thereof.
6.3 Termination of Directorship. In the event a Director ceases to
be a member of the Board (other than by reason of death or disability), then an
Option must be exercised by the Director (to the extent that the Director was
entitled to do so at the termination of his or her directorship) at any time
within ninety (90) days after he or she ceases to be a member of the Board, but
not beyond the Term of the Option.
6.4 Death or Disability of Director. If a Director dies or becomes
disabled while he or she is a member of the Board, or within ninety (90) days
after the date he or she ceases to be a member of the Board, then an
-18-
<PAGE> 23
Option may be exercised (to the extent the Director shall have been entitled to
do so at the time of his or her death or disability), by his or her Successor,
in the event of death, or by him or her or his or her personal representative,
as the case may be, in the event of disability, at any time within one (1) year
after his or her death or termination of directorship, by reason of disability,
but not beyond the Term of the Option.
7. EXERCISE OF RIGHTS UNDER AWARDS.
7.1 Notice of Exercise. A Director entitled to exercise an Option
may do so by delivery of a written notice to that effect specifying the number
of Shares with respect to which the Option is being exercised and any other
information the Committee may require. The notice shall be accompanied by
payment in full of the purchase price of any Shares to be purchased, which
payment shall be made in cash or by certificates of Shares duly endorsed in
blank, equal in value to the purchase price of the Shares to be purchased based
on their Fair Market Value at the time of exercise or a combination thereof. No
Shares shall be issued upon exercise of an Option until full payment has been
made therefor. All notices or requests provided for herein shall be delivered to
the Company's President, or such other person as the Committee may designate. No
fractional Shares shall be issued.
7.2 Cashless Exercise Procedures. The Company, in its sole
discretion, may establish procedures whereby a Director, subject to the
requirements of Rule 16b-3, Regulation T, federal income tax laws, and other
federal, state and local tax and securities laws, can exercise an Option or a
portion thereof without making a direct payment of the option price to the
Company. If the Company so elects to establish a cashless exercise program, the
Company shall determine, in its sole discretion, and from time to time, such
administrative procedures and policies as it deems appropriate and such
procedures and policies shall be binding on any Director wishing to utilize the
cashless exercise program.
8. OTHER OPTION TERMS AND CONDITIONS. Each Option or each Option
Agreement evidencing the grant of an Option shall contain such other terms and
conditions not inconsistent herewith as shall be approved by the Committee.
9. RIGHTS OF OPTION HOLDER. The holder of an Option shall not have any of
the rights of a stockholder with respect to the Shares subject to purchase or
receipt under his or her Option, except to the extent that
-19-
<PAGE> 24
one or more certificates for such Shares shall be issuable to the Holder upon
the due exercise of the Option and the payment in full of the purchase price
therefor.
10. NONTRANSFERABILITY OF OPTION. An Option shall not be transferable,
other than: (a) by will or the laws of descent and distribution, and an Option
may be exercised, during the lifetime of the holder, of the Option, only by the
holder, or in the event of death, the holder's Successor, or in the event of
disability, the holder's personal representative, (b) pursuant to a qualified
domestic relation order, as defined in the Code or ERISA or the rules
thereunder, or (c) to Permitted Transferees.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes in
all of the outstanding Shares by reason of stock dividends, stock splits,
reclassifications, recapitalization, mergers, consolidations, combinations, or
exchanges of shares, separations, reorganizations or liquidations, or similar
events, or in the event of extraordinary cash or non-cash dividends being
declared with respect to the Shares, or similar transactions or events, the
number and class of Shares available under the Plan in the aggregate, the number
and class of Shares subject to Options theretofore granted, applicable purchase
prices and all other applicable provisions, shall, subject to the provisions of
the Plan, be equitably adjusted by the Committee (which adjustment may, but need
not, include payment to the holder of an option, in cash or in shares, in an
amount equal to the difference between the price at which such Option may be
exercised and the then current fair market value of the Shares subject to such
Option as equitably determined by the Committee). The foregoing adjustment and
the manner of application of the foregoing provisions shall be determined by the
Committee, in its sole discretion. Any such adjustment may provide for the
elimination of any fractional share which might otherwise become subject to an
Option.
12. FORMS OF OPTIONS. An Option shall be granted hereunder on the date or
dates specified in the Plan. Whenever the Plan provides for the receipt of an
Option by a Director, the Company's President or such other person as the
Committee shall appoint, shall forthwith send notice thereof to the Director, in
such form as the Committee shall approve, stating the number of Shares subject
to the Option, its Term, and the other terms and conditions thereof. The notice
shall be accompanied by a written Option Agreement, in such form as may from
time to time hereafter be approved by the Committee, which shall have been duly
executed by or on behalf of the Company. Execution by the
-20-
<PAGE> 25
Director to whom such Option is granted of said Option Agreement in accordance
with the provisions set forth in this Plan shall be a condition precedent to the
exercise of any Option.
13. TAXES.
13.1 Right to Withhold Required Taxes. The Company shall have the
right to require a person entitled to receive Shares pursuant to the exercise of
an Option under the Plan to pay the Company the amount of any taxes which the
Company is or will be required to withhold, if any, with respect to such Shares
before the certificate for such Shares is delivered pursuant to the Option.
Furthermore, the Company may elect to deduct such taxes from any other amounts
then payable in cash or in Shares or from any other amounts payable any time
thereafter to the Director.
13.2 Director Election to Withhold Shares. A Director may satisfy the
withholding tax liability, if any, with respect to the exercise of an Option, by
having the Company withhold Shares otherwise issuable upon exercise of the
Option if such Director makes an election to do so which satisfies the
requirements of Rule 16b-3.
14. TERMINATION OF THE PLAN. The Plan shall terminate ten (10) years from
the date the Plan becomes effective, and an Option shall not be granted under
the Plan after that date although the terms of any Option may be amended at any
date prior to the end of its Term in accordance with the Plan. Any Option
outstanding at the time of termination of the Plan shall continue in full force
and effect according to the terms and conditions of the Option and this Plan.
15. AMENDMENT OF THE PLAN. The Plan may be amended at any time and from
time to time by the Board, but no amendment without the approval of the
stockholders of the Company shall be made if stockholder approval under Rule
16b-3 would be required. Notwithstanding the discretionary authority granted to
the Committee in Section 4 of the Plan, no amendment of the Plan or any Option
granted under the Plan shall impair any of the rights of any holder, without the
holder's consent, under any Option theretofore granted under the Plan.
16. DELIVERY OF SHARES ON EXERCISE. Delivery of certificates for Shares
pursuant to an Option exercise may be postponed by the Company for such period
as may be required for it with reasonable diligence to comply with any
applicable requirements of any federal, state or local law or regulation or any
administrative or quasi-administrative requirement applicable to the sale,
issuance, distribution or delivery of such Shares. The Committee may,
-21-
<PAGE> 26
in its sole discretion, require a Director to furnish the Company with
appropriate representations and a written investment letter prior to the
exercise of an Option or the delivery of any Shares pursuant thereto.
17. FEES AND COSTS. The Company shall pay all original issue taxes on the
exercise of any Option granted under the Plan and all other fees and expenses
necessarily incurred by the Company in connection therewith.
18. EFFECTIVENESS OF THE PLAN. The Plan shall become effective on the
Effective Date.
19. OTHER PROVISIONS. As used in the Plan, and in Option Agreements and
other documents prepared in implementation of the Plan, references to the
masculine pronoun shall be deemed to refer to the feminine or neuter, and
references in the singular or the plural shall refer to the plural or the
singular, as the identity of the person or persons or entity or entities being
referred to may require. The captions used in the Plan and in such Option
Agreements and other documents prepared in implementation of the Plan are for
convenience only and shall not affect the meaning of any provision hereof or
thereof.
20. OHIO LAW TO GOVERN. This Plan shall be governed by and construed in
accordance with the laws of the State of Ohio.
-22-
<PAGE> 27
MULTI-COLOR CORPORATION
- -----------------------------------------------------------------------------
The undersigned hereby appoints GORDON B. BONFIELD and LOUIS
M. PERLMAN, or either one of them, proxies of the
undersigned, each with the power of substitution, to vote
all shares of Common Stock which the undersigned would be
entitled to vote at the Annual Meeting of Shareholders of
Multi-Color Corporation to be held on October 15, 1998 at
12:30 p.m. Eastern Time at the offices of the Corporation,
205 West Fourth Street, Cincinnati, Ohio 45202 and any
adjournment of such meeting on the matters specified below
and in their discretion with respect to such other business
as may properly come before the meeting or any adjournment
thereof.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS:
1. Authority to elect as directors the six (6) nominees listed below.
FOR _______ WITHHOLD AUTHORITY _______
GORDON B. BONFIELD, CHARLES B. CONNOLLY, LORRENCE T. KELLAR, BURTON D. MORGAN,
DAVID H. PEASE, JR. AND LOUIS M. PERLMAN
WRITE NAME OF ANY NOMINEE(S) FOR WHOM AUTHORITY TO VOTE IS WITHHELD
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2. Approval of the 1998 Non-Employee Director Stock Option Plan.
FOR _______ AGAINST _______ ABSTAIN _______
3. Ratification of the appointment of Grant Thornton LLP as independent
public accountants for fiscal 1999.
FOR _______ AGAINST _______ ABSTAIN _______
THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF
DIRECTORS UNLESS A CONTRARY CHOICE IS SPECIFIED.
(This proxy is continued and is to be signed on the reverse side)
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<PAGE> 28
Date , 1998
(Important: Please sign exactly as name
appears hereon indicating, where proper,
official position or representative capacity.
In the case of joint holders, all should sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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