<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 COMMISSION ONLY (AS
[X] Definitive Proxy Statement PERMITTED BY RULE 14a-6(e)(2))
[ ] 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)
XXXXXXXXXXXXXXX
(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)(l) 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 No.:
------------------------------
(3) Filing Party:
------------------------------
(4) Date Filed:
------------------------------
===============================================================================
<PAGE> 2
MULTI-COLOR CORPORATION
205 WEST FOURTH STREET, SUITE 1140
CINCINNATI, OHIO 45202
Dear Shareholder:
We invite you to attend our annual meeting of shareholders at 10:30 a.m. on
Thursday, August 17, 2000 at Queen City Club, 331 East Fourth Street,
Cincinnati, Ohio 45202. After 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.
Your vote is important. Whether or not you plan to attend, please complete,
sign, date and return your proxy card promptly in the enclosed envelope. If you
do attend the meeting, you may vote your shares in person.
Sincerely yours,
[logo of Multi-Color]
/s/ Lorrence T. Kellar
Lorrence T. Kellar
Chairman of the Board
July 14, 2000
<PAGE> 3
NOTICE OF ANNUAL MEETING
OF
SHAREHOLDERS OF MULTI-COLOR CORPORATION
TIME:
10:30 a.m., Eastern Time
DATE:
August 17, 2000
PLACE:
Queen City Club
331 East Fourth Street
Cincinnati, Ohio 45202
PURPOSE:
1. Election of directors
2. Ratification of the appointment of Grant Thornton LLP as Multi-Color's
independent public accountants for fiscal year ending March 31, 2001
3. Conduct other business, if properly raised
Only shareholders of record on June 30, 2000 may vote at the meeting.
The approximate mailing date of this proxy statement and accompanying proxy card
is July 14, 2000.
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE, AND RETURN YOUR
PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
/s/ Dawn H. Bertsche
Dawn H. Bertsche
Vice President-Finance, Chief Financial Officer
and Secretary
July 14, 2000
<PAGE> 4
MULTI-COLOR CORPORATION
205 WEST FOURTH STREET, SUITE 1140
CINCINNATI, OHIO 45202
---------------------------
PROXY STATEMENT
---------------------------
GENERAL INFORMATION
TIME AND PLACE OF ANNUAL MEETING
The annual meeting will be held on Thursday August 17, 2000 at 10:30 a.m. at
Queen City Club, 331 East Fourth Street, Cincinnati, Ohio 45202.
RECORD DATE
Record holders of Common Stock of Multi-Color, as shown on our stock register on
June 30, 2000, may vote at the meeting. As of that date, Multi-Color had
2,449,540 shares of Common Stock outstanding.
FIRST MAILING DATE
This Proxy Statement, the Notice of the Annual Meeting of Shareholders and the
accompanying proxy card are being mailed to shareholders on or about July 14,
2000.
INFORMATION ABOUT VOTING
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.
All proxies will be voted in accordance with the instructions specified. If you
sign and return the enclosed proxy card but do not specify how to vote, we will
vote your shares in favor of (1) the election of all nominees for directors
proposed by the Board and (2) the ratification of the appointment of Grant
Thornton LLP as independent public accountants for fiscal year ending March 31,
2001. Management does not know of any other matters to be presented for action
at the Annual Meeting. If any other matter properly comes before the Annual
Meeting, however, the proxies will vote such matters in their discretion.
You may receive more than one proxy or voting card depending on how you hold
your shares. Please sign and return all proxies. 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 16.
SOLICITATION
The proxies are being solicited by Multi-Color's Board of Directors. All
expenses of Multi-Color in connection with this solicitation will be borne by
Multi-Color. Solicitation will be made principally by mail, but officers and
regular employees may solicit proxies by telephone or personal contact with
nominal
1
<PAGE> 5
expense to Multi-Color. Multi-Color will request brokers and other nominees who
hold Common Stock in their names to solicit proxies from the beneficial owners
and will pay the standard charges and expenses associated with that
solicitation.
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
Nominees for director receiving the highest number of votes cast will be elected
to fill the seats on the Board. Ratification of the appointment of Grant
Thornton LLP requires 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.
ELECTION OF DIRECTORS
(ITEM 1 ON THE PROXY CARD)
The Board of Directors oversees the management of Multi-Color 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 Multi-Color's business day
to day, and evaluating his performance. The Board also reviews development and
succession plans for Multi-Color's top executives.
Multi-Color's Code of Regulations requires that the Board consist of at least
three members with the exact number to be established by shareholders or the
Board. The Board has established a board consisting of seven directors effective
as of the date of the meeting.
The board is nominating for election each of the following: Gordon B. Bonfield,
Charles B. Connolly, Francis D. Gerace, Lorrence T. Kellar, Burton D. Morgan,
David H. Pease and Roger A. Keller. During the last year, Multi-Color redeemed
its Series A Preferred Stock. Accordingly Mr. Louis M. Perlman, who served as
the Series A Preferred Stock representative on the Board, will not stand for
reelection as a director. Proxies solicited by the Board will be voted for the
election of these nominees. All directors elected at the 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.
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.
Most Multi-Color directors - including six of our seven nominees - are not
Multi-Color employees. Personal information on each of our nominees is given
below.
The Board met nine times last year. All of Multi-Color's directors attended at
least 75% of Board and committee meetings.
2
<PAGE> 6
Pursuant to a Separation Agreement with Mutual Releases, dated July 7, 1998,
between Multi-Color and John Court, former President and Chairman of
Multi-Color, John Court agreed to vote all shares of Multi-Color Common Stock,
then owned or thereafter acquired or controlled by him, in favor of the election
of Messrs. Bonfield, Morgan, Kellar, Pease and Perlman or their replacements.
This obligation will continue until May 1, 2001, so long as Mr. Kellar or Mr.
Pease, if willing to serve, is a nominee of the Board of Directors for election
to the Board or a member of the Board, subject to provisions for the
establishment of successors. Mr. Court also agreed that until May 1, 2001, he
would not seek election nor serve on the Board of Directors nor vote his shares
in favor of changing the number of directors. Mr. Court currently owns
approximately 20.8% of Multi-Color.
THE BOARD RECOMMENDS YOU VOTE FOR EACH OF THE FOLLOWING NOMINEES:
================================================================================
Gordon B. Bonfield Mr. Bonfield was elected a director in December 1997
Age 48 Mr. Bonfield has served as President of the Consumer
Director since 1997 Packaging Division of Ivex Packaging Corporation
since June 1999. Mr. Bonfield served as President of
Multi-Color from January 12, 1998 to May 19, 1999.
Mr. Bonfield has 24 years of packaging and printing
experience and was president of Fort James
Corporation's Packaging Business, prior to being
named President of Multi-Color. He joined Fort James
in 1988 as Vice President and General Manager for the
Folding Carton Group.
================================================================================
Charles B. Connolly Mr. Connolly was elected a director of Multi-Color in
Age 43 October 1998. Mr. Connolly has 20 years of experience
Director since 1998 in the converting, coating and packaging industries.
He has served as Managing Partner of Connemara
Converting, 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 papers and films, which he
joined in 1984.
================================================================================
3
<PAGE> 7
Lorrence T. Kellar Mr. Kellar was elected a director of Multi-Color in
Age 62 January 1988. Mr. Kellar has been Vice President,
Director since 1988 Real Estate of Kmart Corporation since April 1996.
Prior to that time, he served as Group Vice President
of The Kroger Co. (a grocery retailer), having joined
The Kroger Co. 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 Frisch's Restaurants and
Loehmanns, Inc. (the specialty retailer of women's
fashion apparel) and a trustee of Bartlett Capital
Trust (a mutual fund group).
================================================================================
Burton D. Morgan Mr. Morgan served Multi-Color as Chairman of the
Age 83 Board from 1985 through August 1996. Mr. Morgan has
Director since 1985 been President of Basic Search, Inc., an Ohio-based
venture capital firm, since its founding in 1977. Mr.
Morgan founded two adhesive label stock companies.
================================================================================
Francis D. Gerace Mr. Gerace was appointed as President of Multi-Color,
Age 47 replacing Mr. Bonfield on May 19, 1999, and elected a
Director since 1999 director in May 1999. Mr. Gerace served as
Multi-Color's Vice-President of Operations from April
1998 through May 1999. 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.
================================================================================
David H. Pease, Jr. Mr. Pease has served as a Director of Multi-Color
Age 69 from March 1987 to August 1999 and from October 1999
Director March 1987 - to the present. He is the retired Chairman and Chief
August 1999; October Executive Officer of Pease Industries, Inc., a
1999 - Present Cincinnati-based manufacturer of residential building
products, and held these positions from 1980 until
his retirement in 2000.
================================================================================
Roger A. Keller Mr. Keller would be new to the Board. Since July
Age 55 1993, Mr. Keller has served as Vice President,
General Counsel and Secretary to Mallinckrodt, Inc.,
a health-care company.
================================================================================
4
<PAGE> 8
DIRECTOR COMPENSATION
Directors who are not employees of Multi-Color are eligible to receive awards
under the 1998 Non-Employee Director Stock Option Plan. Non-Employee Directors
receive annually a $5,000 retainer and non-qualified stock options for 2,000
shares plus $1,000 for each meeting attended. Committee members also receive
non-qualified stock options for an additional 2,000 shares per year per
committee, but no director may receive non-qualified stock options for more than
6,000 shares per year. Directors who are employees of Multi-Color are not
separately compensated for serving as directors.
BOARD COMMITTEES
The Board appoints committees in order to more effectively perform its duties.
Board committees are able to consider 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 does not have a nominating committee.
THE AUDIT COMMITTEE is responsible for reviewing Multi-Color's internal
accounting operations. It also recommends the appointment of independent
accountants and reviews the relationship between Multi-Color and its independent
accountants. Only non-employee directors serve on Multi-Color's Audit Committee.
Committee members: Messrs. Perlman (Chairman), Kellar and Pease.
Meetings last year: 2
THE COMPENSATION COMMITTEE is responsible for establishing compensation for
management and administering Multi-Color's stock option plans. Only non-employee
directors serve on Multi-Color's Compensation Committee.
Committee members: Messrs. Connolly (Chairman), Bonfield and Kellar.
Meetings last year: 2
DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL SHAREHOLDERS
This table lists directors, director nominees, certain executive
officers and shareholders known by Multi-Color to own beneficially five percent
(5%) or more or its outstanding Common Stock as of June 30, 2000:
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned (1)
Name Position Amount Percentage
------------------------------------------- --------------------------- ---------------------- --------------
<S> <C> <C> <C>
John C. Court (2) Principal Shareholder 531,279 20.8%
Phronesis Partners LP (3) Principal Shareholder 164,930 6.7%
Dimensional Fund Advisors, Inc.(4) Principal Shareholder 134,900 5.5%
Gordon B. Bonfield, III Director 16,000 *
</TABLE>
5
<PAGE> 9
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned (1)
Name Position Amount Percentage
------------------------------------------- --------------------------- ---------------------- --------------
<S> <C> <C> <C>
Charles B. Connolly Director 14,780 *
Burton D. Morgan(5) Director 489,804 19.9%
David H. Pease, Jr. Director 59,352 2.4%
Louis M. Perlman Director 22,000 *
Dawn H. Bertsche (6) Vice President-Finance, 3,000 *
Chief Financial Officer,
Secretary
William R. Cochran(7) Former Vice President, 25,600 1.0%
Chief Financial Officer
and Secretary
Francis D. Gerace Chief Executive Officer, 48,832 2.0%
President, Director
Lorrence T. Kellar Chairman of the Board of 120,352 4.8%
Directors
Roger A. Keller Director Nominee 94,000 3.8%
Steven G. Mulch (8) Senior Vice President of 43,432 1.7%
Sales and Marketing
John R. Voelker (9) Vice President of Sales, 84,797 3.5%
In-Mold Labels
Executive Officers and Directors serving 902,349 34.0%
as of 6/30/00 as a group (10 persons)
</TABLE>
------------------------------------------
* Indicates less than one percent.
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 of the record date, June 30, 2000;
Mr. Bonfield - 6,000 shares, Mr. Cochran - 12,500 shares, Mr. Connolly
- 12,000 shares, Mr. Court - 106,625 shares, Mr. Gerace - 33,332
shares, Mr. Kellar - 42,000 shares, Mr. Morgan - 14,000 shares, Mr.
Mulch - 33,332 shares, Mr. Pease
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<PAGE> 10
- 38,000 shares; Mr. Perlman - 22,000 shares, and Mr. Voelker - 5,001
shares. All stockholders have sole investment and voting power unless
otherwise indicated.
2. Based on a Form 4 dated June 18, 2000 filed with the Securities and
Exchange Commission. The business address of Mr. Court is 2145 East
Hill Avenue, Cincinnati Ohio 45208.
3. Based on a Schedule 13G/A filed on February 17, 2000 with the
Securities and Exchange Commission. and other information available to
Multi-Color. All shares are held by Phronesis Partners, LP, which has
sole voting power and dispositive power with respect to 164,930 shares
of Common Stock. The principal business address of Phronesis Partners,
LP is 197 East Broad Street, Suite 200, Columbus, Ohio 43215.
4. Based on a Schedule 13G filed on February 3, 2000 by Dimensional Fund
Advisors, Inc. with the Securities and Exchange Commission. All shares
are held in portfolios of Dimensional Fund Advisors, Inc., a registered
investment advisor. Dimensional Fund Advisors, Inc. disclaims
beneficial ownership of all such shares. The business address of
Dimensional Fund Advisors, Inc. is 1299 Ocean Avenue, 11th Floor, Santa
Monica, California 90401.
5. Mr. Morgan disclaims beneficial ownership of 475,804 shares.
6. Ms. Bertsche was appointed Vice President-Finance, Chief Financial
Officer and Secretary of Multi-Color on August 23, 1999. Prior to
joining Multi-Color, Ms. Bertsche was Chief Financial Officer for Hill
Top Research, Inc., a Cincinnati-based clinical research company from
1997 until 1999. From 1987-1997 she was Vice President and Controller
of Clopay Corporation, a diversified Cincinnati-based manufacturer of
building products and specialty plastic films, where she was involved
in all aspects of several successful acquisitions.
7. Mr. Cochran resigned as Vice President, Chief Financial Officer and
Secretary in August 1999.
8. Mr. Mulch was promoted to Senior Vice President of Sales and Marketing
in April of 2000. He previously held the position of Vice President of
Corporate Sales and Business Development with Multi-Color from April
1998 to April 2000. 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.
9. Includes 3,776 shares held in Mr. Voelker's 401(k) plan. Mr. Voelker
was appointed Vice President of Sales and Marketing of Multi-Color in
June of 1995. Prior to that time Mr. Voelker served as Multi-Color's
Vice President National Accounts from 1992 to 1995 and Vice President
of Multi-Color Graphics from 1989 to 1992.
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<PAGE> 11
RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR FISCAL YEAR ENDING MARCH 31, 2001 (ITEM 2 ON THE PROXY CARD)
The Board is seeking shareholder ratification of its appointment of Grant
Thornton LLP as independent public accountants for fiscal year ending March 31,
2001. Although action by the shareholders in this matter is not required, the
Board believes that it is appropriate to seek shareholder ratification of this
appointment in light of the critical role played by independent auditors in
maintaining the integrity of Multi-Color's financial controls and reporting. An
affirmative vote of a majority of votes cast 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 year ending March 31,
2001. Representatives of Grant Thornton LLP are expected to be present at the
Annual 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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities and Exchange Act of 1934 requires
Multi-Color's executive officers, directors and persons who own more than 10% of
a registered class of Multi-Color'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, Multi-Color believes that during the last fiscal year,
except as described below, all of its executive officers, directors and ten
percent shareholders complied with the Section 16 reporting requirements. A Form
4 reflecting four share purchases by Mr. Mulch, a Form 4 reflecting two share
purchases by Mr. Kellar, a Form 4 reflecting 36 purchases by Mr. Morgan, a Form
4 reflecting 13 sales by Mr. Perlman and a Form 4 reflecting one purchase by Mr.
Gerace were inadvertently filed late. Based upon share ownership information
provided to Multi-Color in Mr. Voelker's director and officer questionnaire, and
comparing such information to Form 4s filed, it appears that Mr. Voelker
purchased 4,986 shares without filing a Form 4.
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation for
Multi-Color's Chief Executive Officer and four most highly compensated executive
officers for the fiscal years ended March 31, 2000, 1999 and 1998, respectively.
8
<PAGE> 12
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
Awards
Fiscal
Year Securities
Name and Ended Other Annual Underlying All Other
Principal Position March 31 Salary Bonus Compensation Options(#) Compensation(3)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Francis D. Gerace 2000 $ 175,000 $124,785(1) $ 14,000(2) 45,000 $ -0-
President and Chief 1999 175,000 69,360 11,248(2) -0- -0-
Executive Officer(4) 1998 5,833 -0- -0- 50,000 -0-
Gordon B. Bonfield 2000 $ 83,335 $ -0- $ 2,667(2) 6,000(5) $ 688
former President 1999 200,000 99,086 16,000(2) 50,000 9,060
Chief Executive Officer(6) 1998 44,745 21,000 11,400(7) 50,000 -0-
Dawn H. Bertsche 2000 $ 91,888 $ 62,393(1) $ 7,258(2) 25,000 $ 1,506
Chief Financial Officer,
Vice President-Finance and
Secretary(8)
William R. Cochran 2000 $ 78,750 $ 14,974(1) $ 2,100(2) 5,000 $28,426
former Vice President 1999 105,000 31,212 13,887(2) 5,000 3,745
Finance/CFO, Secretary(9) 1998 100,008 -0- 11,164 -0- 3,251
Steven G. Mulch 2000 $ 150,000 $106,959(1) $ 12,000(2) 15,000 $ 3,093
Senior Vice President of 1999 150,000 74,315 12,049(2) -0- 5,137
Sales and Marketing 1998 6,250 -0- -0- 50,000 -0-
John R. Voelker 2000 $ 105,000 $ 44,923(1) $ 8,400(2) 5,000 $ 2,887
Vice President of Sales, 1999 105,000 31,212 16,163(2) 5,000 3,912
In-Mold Labels 1998 107,701 -0- 11,543 -0- 3,434
</TABLE>
1. The bonus was earned in the fiscal year ended March 31, 2000 and paid
in fiscal 2001.
2. Multi-Color has established a supplemental retirement program for key
executives based on 8% of the executive's salary; the amounts listed
represent the percentage of salary plus accrued interest under this
plan.
3. The amounts listed reflect Multi-Color's contributions under the
Multi-Color Corporation 401(k) profit sharing plan and in the case of
Mr. Cochran, for the 2000 fiscal year, include a $26,250 payment made
in connection with his resignation.
4. Mr. Gerace joined Multi-Color in March 1998, was appointed President on
May 19, 1999 to replace Mr. Bonfield and became Chief Executive Officer
in August 1999.
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<PAGE> 13
5. 6,000 options were granted to Mr. Bonfield pursuant to the 1998
Non-Employee Directors Stock Option Plan after he resigned as an
executive officer. See footnote 6.
6. Mr. Bonfield was appointed on January 7, 1998 to replace Mr. Court as
President and Chief Executive Officer beginning January 12, 1998. Mr.
Bonfield resigned his positions as President and Chief Executive
Officer on May 19, 1999.
7. The dollar value represents the difference between the purchase price
of $5.36 per share and the fair market value of $6.50 per share on the
date of purchase of 10,000 shares of treasury stock purchased by Mr.
Bonfield.
8. Ms. Bertsche joined Multi-Color as Vice President, Chief Financial
Officer and Secretary in August 1999.
9. Mr. Cochran was appointed Vice President and Chief Financial Officer of
Multi-Color in June 1994 and Secretary on June 15, 1998 and resigned
from all positions in August 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Value Underlying Unexercised In-the-Money Options at
Shares Acquired Realized Options at Fiscal Year End Fiscal Year End
on Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable(1)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Francis D. Gerace -0- -0- 33,332/61,668 $25,932/39,878
Gordon B. Bonfield -0- -0- 6,000/0 4,128/0
Dawn H. Bertsche -0- -0- 0/25,000 0/14,950
William R. Cochran 13,000 $29,628.75(2) 12,500/0 17,385/0
Steven G. Mulch -0- -0- 33,332/31,668 25,932/21,938
John R. Voelker 5,000 $16,875(3) 1,667/8,333 1,780/12,935
</TABLE>
1. Based upon a fair market value of $7.188 on March 31, 2000 (closing
price of stock on this date).
2. The dollar value represents the difference between the purchase price
of $2.625 and the fair market value of $6.063 on December 21, 1999, the
date of purchase of 1,250 shares; the difference between the purchase
price of $2.625 and the fair market value of $6.500 on November 15,
1999, the date of purchase of 3,750 shares and the difference between
the
10
<PAGE> 14
purchase price of $4.65 and the fair market value of $6.00 on January
6, 2000, the date of purchase of 8,000 shares.
3. The dollar value represents the difference between the purchase price
of $2.625 per share and the fair market value of $6.00 on December 29,
1999, on the date of purchase of the 5,000 shares.
EMPLOYMENT AGREEMENTS
Multi-Color and Mr. Gerace entered into an employment agreement dated
as of March 16, 1998. The agreement was amended on May 18, 1999 to appoint Mr.
Gerace as President of Multi-Color and set his salary at $175,000. The initial
term of employment extends through June 30, 2000. The term automatically renews
for successive one year periods until either party gives the other at least
three (3) months written notice. Mr. Gerace's annual salary of $175,000 may be
adjusted annually based on his performance. Mr. Gerace is also entitled to a
bonus pursuant to the Executive Incentive Compensation Plan, as amended from
time to time. Pursuant to his employment agreement, Multi-Color also granted Mr.
Gerace an option to purchase 50,000 shares of common stock at $6.410 per share.
The option has a term of five years and vests one-third on each anniversary of
the date of grant. In the event that Mr. Gerace terminates his employment for
any reason within one year of a Change in Control (as defined in his agreement),
he is entitled to: (i) his annual salary through the date of termination, (ii) a
bonus of 50% of his annual salary prorated through the date of termination,
(iii) any deferred compensation and other non-qualified benefit plan balances
and (iv) an amount equal to his annual salary paid over a two year period in
monthly installments. In the event of a Change in Control and Mr. Gerace's
position is eliminated or if Mr. Gerace is terminated by Multi-Color for any
reason other than Cause (as defined in his agreement), he will receive the same
severance compensation as stated above except that the compensation provided in
item (iv) above will be paid in a lump sum.
Multi-Color and Mr. Mulch entered into an employment agreement dated
as of March 16, 1998. The initial term of employment extends through September
30, 2000. The term automatically renews for successive one year periods until
either party gives the other at least three (3) months written notice. Mr.
Mulch's annual salary of $150,000 may be adjusted annually based on his
performance. Mr. Mulch is also entitled to a bonus pursuant to the Executive
Incentive Compensation Plan, as amended from time to time. Pursuant to his
employment agreement, Multi-Color also granted Mr. Mulch an option to purchase
50,000 shares of common stock at $6.410 per share. The option has a term of five
years and vests one-third on each anniversary of the date of grant. In the event
that Mr. Mulch terminates his employment for any reason within one year of a
Change in Control (as defined in his employment agreement), he is entitled to:
(i) his annual salary through the date of termination, (ii) a bonus of 50% of
his annual salary prorated through the date of termination, (iii) any deferred
compensation and other non-qualified benefit plan balances and (iv) an amount
equal to his annual salary paid over a two year period in monthly installments.
In the event of a Change in Control and Mr. Mulch's position is eliminated or if
Mr. Mulch is terminated by Multi-Color for any reason other than Cause (as
defined in his agreement), he will receive the same severance compensation as
stated above except that the compensation provided in item (iv) above will be
paid in a lump sum.
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<PAGE> 15
Upon termination of employment, other than for cause, Ms. Bertsche, Mr.
Yamasaki and Mr. Vogt would be entitled to payments equal to one year's salary
($150,000, $130,000 and $120,000, respectively) paid over a one-year period.
Multi-Color maintains stock options plans which authorize the issuance
of incentive and non-qualified stock options. Options granted under the plans
contain such terms and conditions as are established by the Board at the time of
the grant. Outstanding options granted to employees generally have five year
terms and vest ratably over three years. The options vest upon a change in
control.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential
Realized Value
of Assumed Annual
% of Total Rates of Price
Options Appreciation
Granted for for Option Term (2)
Options Employees Exercise --------------------
Granted in Fiscal Price Expiration
Individual Grants (1) Year ($/Per Share) Date 5% 10%
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gordon B. Bonfield* 0 0 n/a n/a
Francis D. Gerace 45,000 35% $ 6.59 9/13/2004 81,931 181,047
Dawn H. Bertsche 25,000 19 6.59 9/13/2004 45,517 100,582
William R. Cochran 5,000 4 5.313 4/20/2004 7,339 16,218
Steven G. Mulch 15,000 12 6.59 9/13/2004 27,310 60,349
John R. Voelker 5,000 4 5.313 4/20/2004 7,339 16,218
</TABLE>
* Mr. Bonfield resigned his positions as President and Chief Executive Officer
on May 19, 1999. All options then held by him terminated at that time. Mr.
Bonfield received 6,000 options pursuant to the 1998 Non-Employee Directors
Stock Option Plan after he resigned as an executive officer.
(1) All options are non-qualified options, granted at fair market value, and
vest ratably over three years.
(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates required by the applicable regulations of the Securities and
Exchange Commission and therefore are not intended to forecast possible future
appreciation, if any, of the Common Stock price.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION POLICIES
Multi-Color'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
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<PAGE> 16
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 Multi-Color 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 currently required by Multi-Color or its shareholders in
order for the compensation paid to its 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
Multi-Color 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 salaries for Messrs. Gerace, Mulch, and Voelker and Ms.
Bertsche, the Committee took into account Multi-Color'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 Multi-Color to compete in the marketplace for executive
talent. In addition, the Committee did not compare Multi-Color'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 325-Packaging
and Containers, nor did the Committee attempt to correlate executive
compensation levels with Multi-Color's relative performance as shown in the
financial performance graph contained in this Proxy Statement.
With respect to the salary paid to Mr. Bonfield while he was President
and to Mr. Gerace as Multi-Color's current President, the Committee utilized the
salary data, company performance and other factors described above. The
Committee also evaluated the ability of Messrs. Bonfield and Gerace to develop
and implement strategic plans for company growth and profitability. The
Committee determined their salaries were 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 and Mr. Gerace's employment agreement
was amended on May 18, 1999 to reflect his appointment as President and the
additional responsibilities associated with that role.
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<PAGE> 17
ANNUAL BONUSES
In its determining 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 AND RESTRICTED STOCK
Multi-Color's 1985 and 1997 Stock Option Plans and Multi-Color's 1999
Long Term Incentive Plan are the principal means by which long-term incentive
compensation is provided for key officers and employees of Multi-Color 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. Multi-Color's policies on executive compensation are applicable to
all decisions regarding the number, pricing, timing and the recipients of stock
option grants and restricted stock awards.
RESPECTFULLY SUBMITTED BY THE MEMBERS OF THE COMPENSATION COMMITTEE, CHARLES B.
CONNOLLY (CHAIRMAN), LORRENCE T. KELLAR, AND GORDON B. BONFIELD, III.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
On October 19, 1999 the Board of Directors approved the redemption of
the outstanding Series A and Series B Preferred Shares. The Series A Preferred
Shares were redeemed as of November 22, 1999. Label Ventures Group, LLC, a
Delaware limited liability company of which Mr. Perlman, a director of
Multi-Color is co-manager, owned all the 52,500 outstanding Series A Preferred
Shares. Each Series A Preferred Share was redeemable at $54.00 per share plus
accrued dividends. Each of the outstanding 13,242 Series B Preferred Share was
redeemable at $43.20 per share plus accrued dividends or was convertible into
ten shares of Multi-Color's Common Stock. The holders of the Series B Preferred
Shares elected to convert to common shares. Mr. Court, a principal shareholder
of Multi-Color, owned 3,973 Series B Preferred Shares and Phronesis Partners,
LP, a principal shareholder of Multi-Color, owned 3,9730 Series B Preferred
Shares. Mr. Kellar and Mr. Pease, both directors of Multi-Color, each owned
1,986 Series B Preferred Shares.
Mr. John Yamasaki joined Multi-Color as Vice President of Sales and
Product Development, Heat-Shrink Labels after Multi-Color's acquisition of
Uniflex in June 2000. Mr. Yamaski had served as President and a shareholder of
Uniflex. In connection with the acquisition of Uniflex, Multi-Color entered into
a Non-Competition Agreement with Mr. Yamasaki which provided for a $150,000 cash
payment at closing and an additional $600,000 in four equal installments over
four years.
PERFORMANCE GRAPH
The following performance graph compares Multi-Color's cumulative
total shareholder return from April 1, 1995 through March 31, 2000, to that of
the Media General Nasdaq Market Index, a broad market index, and Media General
MG Industry Group 325 - Packaging and Containers, an index of printing and
packaging industry peer companies. The graph assumes that the value of the
investment in the Common Stock and each index was $100 on April 1, 1995 and that
all dividends
14
<PAGE> 18
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.
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
MULTI-COLOR CORPORATION 100.00 112.50 143.75 156.25 159.38 179.69
MG GROUP INDEX 100.00 101.37 105.16 107.35 83.76 71.28
NASDAQ MARKET INDEX 100.00 134.51 150.48 227.41 297.18 547.25
</TABLE>
INCORPORATION BY REFERENCE
Multi-Color's Annual Report, which contains Multi-Color's financial
statements for the fiscal year ended March 31, 2000, is incorporated by
reference into this Proxy Statement and is deemed to be part of this Proxy
Statement. The Annual Report accompanies this Proxy Statement.
PROPOSALS OF SHAREHOLDERS FOR 2001 ANNUAL MEETING
In order for a shareholder proposal to be included in Multi-Color's
proxy statement for presentation at next year's annual meeting, it must be
received, in writing, by the Secretary of Multi-Color at its principal executive
offices, 205 West Fourth Street, Suite 1140, Cincinnati, Ohio 45202, not later
than March 16, 2001. If Multi-Color does not receive written notice of the
shareholder proposal by March 16, 2001, proxies received by Multi-Color for next
year's annual meeting will be voted in accordance with management on any such
proposal. If there is a change in the anticipated date of next year's annual
meeting (or this deadline) by more than 30 days, we will notify you of this
change through our Form 10-Q filings or by any other practicable means.
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<PAGE> 19
QUESTIONS?
If you have questions or need more information about the annual meeting, write
to:
Dawn H. Bertsche
Vice President-Finance, Chief Financial Officer
and 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. Information contained on
this website is not part of this proxy solicitation.
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<PAGE> 20
MULTI-COLOR CORPORATION
The undersigned hereby appoints Francis D. Gerace and Dawn H. Bertsche,
or either 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 Thursday, August 17, 2000 at 10:30 a.m. Eastern Time
at Queen City Club, 331 East 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 SEVEN (7) NOMINEES LISTED BELOW.
FOR [ ] WITHHOLD AUTHORITY [ ]
GORDON B. BONFIELD, CHARLES B. CONNOLLY, FRANCIS D. GERACE,
LORRENCE T. KELLAR, BURTON D. MORGAN, DAVID H. PEASE, JR. AND ROGER A. KELLER
WRITE THE NAME OF ANY NOMINEE(S) FOR WHOM AUTHORITY TO VOTE IS WITHHELD
_______________________________________________________________________________
2. RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING MARCH 31, 2001.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS UNLESS A
CONTRARY CHOICE IS SPECIFIED.
__________________, 2000 ___________________________________
___________________________________
Signature(s) of shareholder(s)
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.
