SCHEDULE 14A
(Rule 14a-101)
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:
___ Preliminary proxy statement
_X_ Definitive proxy statement
___ Definitive additional materials
___ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Sigma-Aldrich Corporation
(Name of Registrant as Specified in Its Charter)
Sigma-Aldrich Corporation
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
_X_ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
___ $500 per each party to the controversy pursuant to Exchange Act Rule
14A-6(i)(3).
___ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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--- 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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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SIGMA-ALDRICH CORPORATION
3050 Spruce Street
St. Louis, Missouri 63103
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held May 3, 1994
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Sigma-Aldrich Corporation will be held at The Boatmen's National
Bank of St. Louis, 800 Market Street, St. Louis, Missouri 63101 on
Tuesday, May 3, 1994, at 11:00 A.M., Central Daylight Time, for the
following purposes:
1. To elect nine directors; and
2. To transact such other business as may properly come
before the meeting and any adjournments thereof.
Only shareholders of record as of the close of business on March 4,
1994, are entitled to notice of, and to vote at, the meeting.
By Order of the Board of Directors,
/s/ Peter A. Gleich
Peter A. Gleich, Secretary
March 30, 1994
Your vote is important. Even if you expect to attend the meeting
in person, please mark, date and sign the enclosed proxy and return
it to the Company's transfer agent, Boatmen's Trust Company, P.O.
Box 14764, St. Louis, Missouri 63178-9926. A return envelope,
which does not require postage if mailed in the United States, is
enclosed for your convenience. Shareholders who attend the meeting
may revoke their proxies and vote in person if they desire.
SIGMA-ALDRICH CORPORATION
PROXY STATEMENT
Annual Meeting of Shareholders
May 3, 1994
The enclosed proxy is solicited by the Board of Directors of Sigma-
Aldrich Corporation (the "Company") for use at the Annual Meeting
of Shareholders (the "Meeting") to be held on Tuesday, May 3, 1994,
and any adjournments thereof. Any shareholder giving the proxy has
the power to revoke it at any time before it is voted by written
notice mailed to the Company's transfer agent, Boatmen's Trust
Company, P.O. Box 14764, St. Louis, Missouri 63178-9926, or by
submitting a later-dated proxy. If the proxy is not so revoked and
it is not revoked in person at the Meeting, such proxy will be
voted as designated and, if no designation is made, will be voted
in favor of the nominees for directors.
Shareholders of record at the close of business on March 4, 1994,
are entitled to notice and will be entitled to vote at the Meeting
and at any adjournments thereof. As of the close of business on
March 4, 1994, there was a total of 49,827,529 shares of common
stock outstanding. Shareholders will be entitled to one vote for
each share held on all matters, including the election of
directors.
The cost of solicitation of proxies will be borne by the Company.
In addition to the use of the mails, proxies may be solicited
personally, or by telephone or telegraph, by employees of the
Company without additional compensation. Brokers, dealers, banks,
and their nominees will be requested to forward proxy material to
the beneficial owners of stock held by them of record and the
Company will reimburse them for their reasonable out-of-pocket and
clerical expenses upon their request.
This Proxy Statement and accompanying form of proxy are first being
sent to shareholders on or about March 30, 1994.
The mailing address of the Company's principal executive office is
3050 Spruce Street, St. Louis, Missouri 63103.
ELECTION OF DIRECTORS
Nine directors of the Company are to be elected to hold office
until the next annual meeting and until their successors are
elected and qualified. The persons named as proxies in the
accompanying proxy intend to vote for the election of the
nominees named below. If for any reason any of the nominees shall
be unavailable, the persons named in the proxy may exercise
discretionary authority to vote for substitutes
proposed by the Board of Directors.
Nominees for Board of Directors
Following are the nominees for directors of the Company, their
principal occupation, background, period of service as a director
of the Company and age. All of the nominees are presently
directors of the Company and, except for Mr. Spatz, were elected
to their present terms as directors at the 1993 Annual Meeting of
Shareholders. Mr. Spatz was elected at the February 15, 1994,
Board of Directors meeting to replace Donald N. Brandin. Mr.
Brandin served as a director of the Company from 1977 to February
1985 and from November 1985 until his death in January 1994; he was
the retired Chairman of the Board of Boatmen's Bancshares, Inc., a
bank holding company, St. Louis, Missouri, since April 1989. There
are no family relationships between any of the directors or between
any of the directors and any executive officer of the Company or
its subsidiaries.
Carl T. Cori Chairman of the Board, President and Chief
Executive Officer of the Company. Dr. Cori
has been President and Chief Executive Officer
for more than five years. He was elected
Chairman of the Board in May 1991 and has been
a director of the Company since 1977. Age 57.
David R. Harvey Executive Vice President and Chief Operating
Officer of the Company for more than five years.
Dr. Harvey has been a director of the Company
since 1981. Age 54.
Robert J. Hurst General Partner, Goldman, Sachs and Co., an
investment banking firm, New York, New York, for
more than five years. Mr. Hurst has been a
director of the Company since 1993. He is also
a director of USF&G Corporation. Age 48.
David M. Kipnis Distinguished University Professor of Medicine,
Washington University School of Medicine, St.
Louis, Missouri, since October 1992. Prior to
that time, he was Chairman and Professor,
Department of Medicine, Washington University
School of Medicine and Physician-in-Chief, Barnes
Hospital, St. Louis, Missouri, for more than five
years. Dr. Kipnis has been a director of the
Company since 1984. Age 66.
Andrew E. Newman Chairman of the Board, Edison Brothers Stores,
Inc., a specialty fashion retailer, St. Louis,
Missouri, for more than five years. Mr. Newman
has been a director of the Company since 1989.
He is also a director of Edison Brothers Stores,
Inc., Boatmen's Bancshares, Inc. and Lee
Enterprises, Inc. Age 49.
William C. O'Neil, Jr. Chairman of the Board, President and
Chief Executive Officer, ClinTrials
Research, Inc., a clinical research
services company, Nashville, Tennessee,
since November 1989. Prior to that time,
he was Chief Executive Officer and
President of Biotherapeutics, Inc., a
biotherapy laboratory, from January 1989
through May 1989. Mr. O'Neil has been a
director of the Company since 1987. He
is also a director of ClinTrials
Research, Inc., American Healthcorp and
Atrix Laboratories, Inc. Age 59.
Jerome W. Sandweiss Of Counsel, Blumenfeld, Kaplan & Sandweiss,
P.C., Attorneys at Law, St. Louis, Missouri,
since September 1990. Prior to that time, he
was a Principal with such firm for more than
five years. Mr. Sandweiss has been a director
of the Company since 1975. Age 69.
D. Dean Spatz Chairman of the Board, President and Chief
Executive Officer of Osmonics, Inc., a
manufacturer of water purification, fluid
separation and fluid handling products and
equipment, Minneapolis, Minnesota, for more
than five years. Mr. Spatz has been a
director of the Company since February 1994.
He is also a director of Osmonics, Inc. and
Structural Instrumentation Inc. Age 50.
Thomas N. Urban Chairman of the Board and President, Pioneer Hi-
Bred International, Inc., a developer and
producer of hybrid corn and other seeds, Des
Moines, Iowa, for more than five years. Mr.
Urban has been a director of the Company since
1990. He is also a director of Pioneer Hi-Bred
International, Inc. and Equitable of Iowa
Companies. Age 59.
Directors Meetings and Committees
The Board of Directors met four times during 1993. Each incumbent
director attended at least 75% of the aggregate of the meetings of
the Board and its Committees on which he served during 1993. Mr.
Spatz was elected a director in February 1994.
The Board of Directors has three committees which function
throughout the year. The Audit Committee, of which Messrs. Hurst,
Newman (Chairman) and Sandweiss are members, met twice in the past
year. The function of this Committee is to recommend a public
accounting firm to be retained for the coming year, to review the
scope and results of the annual audit by such firm and to review
the Company's financial statements. The Compensation Committee,
consisting of Messrs. Newman, O'Neil (Chairman) and Urban, reviews
all areas of executive compensation and advancement within the
Company. The Committee held two meetings in the past year. The
Nominating Committee, of which Dr. Kipnis and Messrs. Newman,
O'Neil (Chairman) and Urban are members, recommends nominees to the
Board of Directors. It will consider nominees recommended by
shareholders for election to the Board of Directors provided the
names of such nominees, accompanied by relevant biographical
information, are submitted in writing to the Secretary of the
Company. The Committee held one meeting in the past year. Mr.
Brandin was a member of the Compensation and Nominating Committees
at the time of his death.
Director Compensation and Transactions
Directors who are not employed or retained as legal counsel by the
Company are compensated by an annual fee of $10,000 and receive
$2,000 for each directors or committee meeting attended plus
reimbursement of their travel expenses.
During 1993, Blumenfeld, Kaplan & Sandweiss, P.C., of which Mr.
Sandweiss is Of Counsel, billed the Company $365,000 for legal
services rendered. Dr. Kipnis rendered certain consulting services
to the Company during 1993 for which he received $54,000.
SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS
AND PRINCIPAL BENEFICIAL OWNERS
Directors and Executive Officers
The following table sets forth the amount of the Company's common
stock beneficially owned by each of the directors and executive
officers of the Company, and by all directors and executive
officers of the Company as a group, all as of March 4, 1994, based
upon information obtained from such persons:
Shares
Beneficially
Name Company Position Owned (1)(2)
- ------------------- ---------------------------- ---------------
Carl T. Cori Director, Chairman of the Board, 129,268
President and Chief Executive
Officer
Peter A. Gleich Vice President and Secretary 65,740(3)
David R. Harvey Director, Executive Vice President 69,220
and Chief Operating Officer
Robert J. Hurst Director 500
David M. Kipnis Director 5,300
Andrew E. Newman Director 2,000
William C. O'Neil, Jr. Director 2,000
Kirk A. Richter Controller 23,100(3)
Jerome W. Sandweiss Director 7,000
D. Dean Spatz Director 100
Thomas M. Tallarico Vice President and Treasurer 10,350(3)
Thomas N. Urban Director 2,085
Directors and executive officers as a group 316,663(3)
(1) Each nominee has both sole voting power and sole investment
power with respect to the shares set forth in the table
opposite his name, except as follows: Messrs. Gleich and
Richter share voting and investment power as to 42,200 and
18,100 shares, respectively, held in joint tenancy with their
spouses. Shares owned separately by spouses are not included.
(2) Represents less than one percent (1%) of the Company's common
stock outstanding as of March 4, 1994, for each of the named
individuals and the group.
(3) Includes 7,000; 5,000; 10,150; and 22,150 shares subject to
stock options that are exercisable as of or within sixty days
of March 4, 1994, for Messrs. Gleich, Richter and Tallarico
and for the directors and executive officers as a group,
respectively.
Principal Beneficial Owners
The following table sets forth information for each person who, to
the knowledge of the Company, beneficially owned more than five
percent (5%) of the Company's common stock. Each beneficial owner
has sole voting power and sole investmentpower with respect to the
shares set forth opposite their name.
Shares
Beneficially Percent of Shares
Name and Address Owned Outstanding
- ---------------------- ------------- -----------------
Alfred R. Bader 2,883,030 (1) 5.8%
2961 North Shepard Avenue
Milwaukee, WI 53211
State Farm Mutual Automobile
Insurance Co. and its 4,133,040 (2) 8.3%
affiliates
One State Farm Plaza
Bloomington, IL 61710
(1) As set forth in such person's Schedule 13G, dated February 7,
1994, filed with the Securities and Exchange Commission.
(2) As set forth in such company's Schedule 13G, dated January 28,
1994, filed with the Securities and Exchange Commission.
Members of the Broida family and the Fischer family in the
aggregate had sole and shared voting power and sole and shared
investment power with respect to 1,951,316 shares (3.9% of shares
outstanding) and 1,623,289 shares (3.3% of shares outstanding),
respectively, as of March 4, 1994. A member of each of these families
was instrumental in founding the Company and was involved in the
Company prior to retirement.
Reporting Requirements
Section 16(a) of the Securities and Exchange Act of 1934 requires
that the Company's executive officers, directors and persons who
own more than ten percent of the Company's outstanding stock, file
reports of ownership and changes in ownership with the Securities
and Exchange Commission and any national securities exchange on
which the Company's securities are listed and furnish the Company
with copies of all Section 16(a) reports so filed. Based solely on
a review of forms and certain written representations furnished to
the Company, the Company believes that its executive officers and
directors complied with all applicable Section 16(a) filing
requirements during 1993.
INFORMATION CONCERNING EXECUTIVE COMPENSATION
The following table presents compensation information for each of
the five executive officers for the years ended December 31, 1993,
1992 and 1991:
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long-Term Compensation
------------------- ----------------------
No. of Stock
Other Annual Options LTIP All Other
Name/Position Year Salary Comp.(1)(2) Granted Payouts(1) Comp. (3)
- ------------------- ---- ------ ------------ ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Carl T. Cori 1993 $600,000 $299,721 --- $457,150 $2,858
Chairman, President 1992 550,000 177,854 --- 395,870 5,077
& CEO 1991 475,000 346,132 --- 346,132 4,444
Peter A. Gleich 1993 285,000 109,654 20,000 167,250 2,858
Vice President 1992 285,000 76,759 3,000 170,850 5,077
& Secretary 1991 278,000 149,375 --- 149,375 4,444
David R. Harvey 1993 400,000 175,446 --- 267,600 2,858
Executive Vice 1992 400,000 130,941 --- 291,450 5,077
President & COO 1991 346,000 239,000 --- 239,000 4,444
Kirk A. Richter 1993 172,000 51,172 10,000 78,050 2,220
Controller 1992 172,000 36,122 3,000 80,400 4,662
1991 168,000 59,750 --- 59,750 4,444
Thomas M. Tallarico 1993 244,000 --- 10,000 --- 2,858
Vice President 1992 244,000 --- 3,000 --- 5,077
& Treasurer 1991 236,000(4) --- 8,000 --- 1,345 1,345
<FN>
(1) The value of shares issued under the Incentive Stock Bonus
Plan in 1993, 1992 and 1991 relate to performance in
1987, 1986 and 1985, respectively, and are presented as long-term
incentive plan ("LTIP") payouts. Such values
represent the aggregate market value of shares of common stock
issued on the payout date. Cash payouts to cover
Federal income taxes related to the issuance of such shares and
cash are presented as other annual compensation.
Drs. Cori and Harvey and Messrs. Gleich, Richter and Tallarico hold
36,467; 17,500; 7,400; 3,500 and 1,100 Bonus
Units, respectively, as of December 31, 1993. Shares of common
stock issuable upon vesting of such Bonus Units
have a value of $1,750,416; $840,000; $355,200; $168,000 and
$52,800, respectively, based upon the closing price of
the Company's common stock as of such date. See "Incentive Stock
Bonus Plan" for further information.
(2) Excludes the value of personal use of automobiles and club
memberships provided by the Company, the amounts of
which are immaterial for each executive officer.
(3) Represents amounts contributed for each executive officer under
the Company's 401(k) Retirement Savings Plan in
1993 and a predecessor supplemental retirement plan in 1992 and
1991.
(4) Represents annual salary rate. Salary paid in 1991 from date
of employment in February 1991 was $207,875.
</TABLE>
Incentive Stock Bonus Plan
The Company's Incentive Stock Bonus Plan is administered by the
Compensation Committee of the Board. Executive officers and senior
managers whose responsibilities and activities have a direct and
substantial impact on the Company's performance may participate in
the Plan. Each year the Committee establishes a Bonus Pool
determined by a formula based upon the annual increase in the
Company's pre-tax operating income. The Committee then awards
Incentive Stock Bonus Units (the "Bonus Units") to participants
based upon their individual performance, with the value of each
Bonus Unit being equal to the then current market price per share
of the Company's common stock.
Upon completion of five years of employment after the year for
which the Bonus Units were awarded, the Company issues one share of
the Company's common stock for each Bonus Unit awarded. The
Company also makes a cash payment to each participant representing
the amount of Federal income taxes (using the highest marginal
rate) such participant would be required to pay by reason of the
participant's receipt of such stock and cash. Prior to 1992, the
cash payment was equal to the aggregate value of common stock
received by the participant.
The LTIP Payouts presented in the Summary Compensation Table
for 1993, 1992 and 1991 relate to performance in 1987, 1986 and 1985,
respectively. Additionally, LTIP payouts to the Company's senior
management group were $189,550; $80,400 and $59,750 for shares
and $124,275; $36,122 and $59,750 in cash for 1993, 1992 and 1991,
respectively. The following table presents the Bonus Units awarded
to each of the executive officers in 1993 for performance in 1992:
Long-Term Incentive Plan Awards in 1993
Number of Performance or Estimated Future
Bonus Units Other Period Until Payouts of
Name Awarded Maturation or Payout(1) Bonus Units(1)
- ------------------ ----------- ----------------------- ----------------
Carl T. Cori 9,000 5 Years 9,000
Peter A. Gleich 1,000 5 Years 1,000
David R. Harvey 5,000 5 Years 5,000
Kirk A. Richter 500 5 Years 500
Thomas M. Tallarico 600 5 Years 600
(1) The Bonus Units become payable to each of the executive
officers in January 1998 in the form of one share of common stock
for each Bonus Unit awarded plus cash as described above.
Additionally, 5,600 Bonus Units were awarded to six members of the
Company's senior management group. As of the date of this Proxy
Statement, no Bonus Units have been awarded under the Incentive
Stock Bonus Plan for the year ended December 31, 1993.
Stock Options
The Company's Share Option Plan of 1987 is administered by the
Compensation Committee, which grants options to employees as the
Committee determines, taking into account the employees' duties,
their present and potential contributions to the success of the
Company and such other factors as the Committee deems relevant.
The exercise price of the options is determined by the Committee,
however, no incentive stock option may have an exercise price less
than the fair market value of the shares at the date of the grant.
Full payment for stock being purchased must be made in cash or
Company common stock at the time an option is exercised. Options
are not transferable other than by will or by the laws of descent
and distribution. Options expire ten years from the date of grant
or no later than three months after an optionee's termination or
retirement or twelve months after an optionee's death or
disability, if earlier. No options may be granted after February
17, 1997.
The following table sets forth information related to stock options
granted to the executive officers during the year ended December
31, 1993:
<TABLE>
<CAPTION>
Options Granted in 1993
Potential Realizable Value at
Number of % of Total Assumed Annual Rates of
Shares Options Stock Price Appreciation For
Underlying Granted Exercise 10 Year Option Term
Options to all Price Expiration -----------------------------
Name Granted(1) Employees ($/Share)(2) Date 5% 10%
- ------------------- ------------ ---------- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Carl T. Cori --- --- $ --- --- $ --- $ ---
Peter A. Gleich 20,000 5.4% 55.25 1/15/2003 694,929 1,761,085
David R. Harvey --- --- --- --- --- ---
Kirk A. Richter 10,000 2.7% 55.25 1/15/2003 347,464 880,543
Thomas M. Tallarico 10,000 2.7% 55.25 1/15/2003 347,464 880,543
<FN>
(1) Options vest at the rate of 20% per year beginning January 15, 1994.
(2) Exercise price equals the market price per share on the grant date.
(3) Presentation is required by Securities and Exchange Commission rules and is
not intended to forecast possible future price appreciation of the
Company's common stock.
</TABLE>
Additionally, options for 130,000 shares were granted to eight
members of the Company's senior management group and options for
200,000 shares were granted to ninety members of the Company's
management group at exercise prices ranging from $48.00 to $55.75
per share.
The following table presents (i) the unexercised options held by
each executive officer and (ii) the value of all in-the-money
options as of December 31, 1993, as if all such in-the-money
options were vested and exercisable as of December 31, 1993:
<TABLE>
<CAPTION>
Option Values at December 31, 1993
Number of Shares
Underlying Unexercised Value of Unexercised
Options Held(1) In-the-Money Options(2)
----------------------------- ---------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Carl T. Cori --- --- $ --- $ ---
Peter A. Gleich 2,100 20,900 2,625 1,125
David R. Harvey --- --- --- ---
Kirk A. Richter 2,100 10,900 2,625 1,125
Thomas M. Tallarico 5,400 15,600 66,150 32,038
<FN>
(1) No options were exercised by any of the executive officers during
the year ended December 31, 1993.
(2) Calculated as the aggregate closing market price per share of the
Company's common stock on December 31, 1993, for the total number of in-
the-money shares under option, net of the aggregate value of all option
exercise proceeds.
</TABLE>
Pension Plan
The Sigma-Aldrich Corporation Pension Plan provides all eligible
employees, including the executive officers, with a retirement benefit
based upon a formula. The current benefit formula provides an annual
benefit equal to 1.5% of each year's actual compensation, as limited by
the Internal Revenue Code, in excess of "covered compensation"
(compensation upon which social security benefits are earned), plus 0.9%
of "covered compensation" for each year of service after 1992, plus
benefits accrued for service prior to 1993 under a prior formula. The
Company does not have a supplemental pension plan to provide pension
benefits based upon actual earnings, thus certain pension credits have
been and will continue to be restricted by the Internal Revenue Code
limitations. Based upon these limitations and assuming that each
executive officer continues employment until the normal retirement age
of 65 at his current cash compensation level, Drs. Cori and Harvey and
Messrs. Gleich, Richter and Tallarico would receive upon retirement an
annual pension benefit in the form of a single life annuity of $92,490;
$84,225; $104,065; $67,934 and $40,604, respectively.
Employment and Change in Control Agreements
The Company has Employment Agreements ("Agreements") with Drs. Cori and
Harvey and Messrs. Gleich, Richter and Tallarico which provide severance
compensation (with an offset for monies earned elsewhere under certain
defined situations) to each of these executives in the event of his
cessation of employment with the Company or any of its subsidiaries
after the occurrence of a change in control of the Company. "Change in
control" is defined in the Agreements to have occurred when an
individual, partnership, corporation or other entity acquires more than
thirty-five percent of the outstanding shares of the Company's common
stock and there is a change in the majority of the Directors of the
Board (or other body supervising the employment of officers) within any
four hundred day period. Prior to a change in control, the Agreement
may be terminated upon sixty-days notice given by either the executive
or the Company. Unless notice is given to the contrary, the three-year
term of the Agreements is automatically extended for an additional year
at the end of each agreement year. Compensation covered by the
Agreements is set annually by the Compensation Committee, except that
after a change in control, if the executive leaves, the level of
severance pay is the amount last set by the Compensation Committee
immediately prior to the change in control. No payments are made under
the Agreements if the cessation of employment is due to death. If a
change in control of the Company had occurred as of March 4, 1994, and
the employment of the executive officers of the Company had been
terminated, Drs. Cori and Harvey and Messrs. Gleich, Richter and
Tallarico would have collectively received $3,544,000.
The Incentive Stock Bonus Plan also contains provisions that protect the
participants against the loss of Bonus Units earned if there shall have
been a change in control of the Company prior to the scheduled payout of
stock and cash for such earned Bonus Units. "Change in control" is
defined in the Plan in the same manner as it is in the Agreements above.
If a change in control of the Company had occurred as of March 4, 1994,
and the employment of the executive officers of the Company had been
terminated, Drs. Cori and Harvey and Messrs. Gleich, Richter and
Tallarico would have collectively received 49,467 shares of the
Company's common stock and $1,719,000.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Committee
The Committee is composed of the three members named below, none of whom
is an employee of or is involved in any interlocking relationship with the
Company. Mr. Brandin was also a member of the Committee until his death
in January 1994.
Compensation Policy
The Committee believes that increasing share value on a long-term basis is
the goal of shareholders. The Company's compensation policy is designed
to motivate employees to improve productivity and performance, resulting
in increased profitability and, thus, improvement in shareholder value.
To align the financial interests of senior executives and managers with
those of shareholders, the Company uses incentive compensation that is tied
directly to the Company's operating results and is highly sensitive to the
market price of the Company's common stock. Accordingly, the Committee
believes that increasing profits and long-term growth in share value will
be the goals of both management and shareholders. The Company's policy is
to structure compensation such that any executive compensation in excess
of $1 million is tax deductible for the Company.
Compensation for the Company's executive officers includes two elements:
(1) salary and (2) longer term incentive compensation. The Company has no
long-term employment contracts with any of its executive officers other
than the Employment Agreements previously described in this Proxy Statement
which become applicable only if there should be a change in control of the
Company.
Salary
At the end of each fiscal year, the Committee reviews with Dr. Cori an
annual salary plan for the Company's executive officers and then approves
such plan with any modifications it deems appropriate. The Committee
approves the salary plan after assessing the Company's overall performance,
including a review of the operating results of the Company and the
executive officers' responsibilities and after making judgments about past
and expected future contributions of the individual executive officers.
The review of operating results is general in nature, rather than being
based upon any specific weighting formula for measures which include the
Company's sales, earnings and earnings per share growth, profit margins,
acquisition activities and general financial condition. The Committee's
assessment also considers the difficulty of achieving performance levels
based on its understanding of the Company's business and market conditions
as well as competitive pressures. In reviewing the individual executive
officers' responsibilities and performance, the Committee also considers
their non-financial contributions to the Company, such as the quality and
progress of research, marketing and production activities. The Committee
performs its review in a general, subjective manner with consideration
given to all factors, including general knowledge of other executive
officers' salaries and taking particular note of the continued growth in
sales and earnings per share, as illustrated by the following graphs:
(Following are two bar-graphs depicting the following data):
Net Sales Earnings per Share
(millions of dollars) (dollars)
--------------------- ------------------
1989 $441.1 $1.29
1990 529.1 1.44
1991 589.4 1.60
1992 654.4 1.92
1993 739.4 2.15*
(End Graph)
Average Compound Growth Rate:
Sales 14.5%
Earnings per share 13.3%
*Before cumulative effect of accounting changes.
Based upon the business knowledge and experience of the Committee members,
they believe that the executive officers' salaries are appropriate in view
of the level of responsibilities and contributions by each executive
officer.
Incentive Compensation
Incentive Stock Bonus Plan. Awards from the Company's Incentive Stock
Bonus Plan (the "Plan"), a shareholder-approved plan implemented in 1978,
are tied directly to the Company's annual operating results. If the
Company's pre-tax operating income has increased by at least 10% over the
prior year, the Committee establishes a Bonus Pool, with the maximum amount
determined by the following formula:
Maximum bonus pool
Percentage as a percentage of the
increase in pre-tax increase in pre-tax
operating income operating income
------------------- -----------------------
Less than 10% ----
10.0-12.5% 3.0%
12.5-15.0% 4.0%
Greater than 15% 5.0%
The Committee then divides the Bonus Pool into Bonus Units, with each Bonus
Unit being valued at the closing market price per share of the Company's
common stock on the day prior to the award date. The Committee reviews
with Dr. Cori its recommendation for awards of Bonus Units to the executive
officers (other than Dr. Cori) and other senior managers. In the course
of this review, the Committee considers performance evaluations of each of
the executives and senior managers and separately considers and sets the
award to Dr. Cori. In establishing the amount of the Bonus Pool and the
specific awards to the executive officers, including Dr. Cori, the
Committee takes into account operating results and other criteria in a
review similar to that described under Salary above. Because their
responsibilities have more impact on the Company's current and future
operating results, the Committee feels that Drs. Cori and Harvey should
have a greater proportion of their annual compensation tied directly to the
Company's performance. Accordingly, Drs.' Cori and Harvey have a greater
participation in the Incentive Stock Bonus Plan than do the other executive
officers and do not participate in the Share Option Plan.
The Plan provides for issuance of one share of the Company's common stock
for each Bonus Unit awarded. Shares are issued only after the participant
has been employed for five years following the year for which an award has
been made (or earlier in certain limited circumstances). As a result, the
value of Bonus Units awarded for any year under the Plan is sensitive to
the market price of the Company's common stock over a five-year period,
thus providing the participant with a longer-term perspective. The Plan
also provides for payment of cash when the shares are issued so that the
participant is not compelled to sell any of the shares in order to pay U.S.
Federal income taxes. The Committee estimates that the cost of the Plan
since its inception has ranged between 1.0% and 1.4% of cumulative pre-tax
income and that the cost will continue to constitute about 1% of the
Company's cumulative pre-tax income. See "Incentive Stock Bonus Plan" on
page 8 of this Proxy Statement for additional information concerning this
plan.
Share Option Plan of 1987. Each year, the Committee considers the
desirability of granting options under the Company's Share Option Plan of
1987 to key employees. The Committee believes that granting stock options
is desirable because it directly correlates long-term compensation of key
employees with share price appreciation. In determining grants, the
Committee generally considers the same factors as those discussed under
Salary above. The Committee does not consider the amount or terms of prior
stock option grants in determining current grants. Drs. Cori and Harvey
do not currently participate in this plan for the reasons described under
Incentive Stock Bonus Plan above. For options granted to the other
executive officers during 1993, the Committee determined that the options
should vest pro rata over a five-year period to reinforce a long-term
performance perspective. See "Stock Options" on page 9 of this Proxy
Statement for additional information concerning this plan.
1993 CEO and Executive Officer Compensation
The Committee's approach is to have a large amount of Dr. Cori's
compensation dependent on Company performance. In measuring performance,
emphasis is placed on the year-to-year increases in earnings, which is the
criteria used to establish the maximum Bonus Pool under the Company's
Incentive Stock Bonus Plan. Earnings for 1992 compared to 1991 increased
20% after increasing 12% for 1991 compared to 1990. The Committee
recognized Dr. Cori's leadership in improving productivity and utilization
of existing plant capacities, the two most significant factors contributing
to the higher 1992 earnings, by increasing his 1993 salary by 9.1%. Dr.
Cori's Incentive Stock Bonus Plan award in 1993, for the Company's
performance in 1992, was 9,000 Bonus Units compared to 5,000 Bonus Units
for the prior year. The increase in Bonus Units awarded is directly
attributable to the increase in earnings, as Dr. Cori's share of total
Bonus Units awarded remained about the same in both years. Historically,
Dr. Cori has been awarded approximately 40% of the total Bonus Units
awarded each year. This allocation reflects the Committee's judgement of
the appropriate amount to recognize Dr. Cori's responsibilities and his
contribution to the growth of the Company and its desire to have a
sufficiently large amount of Dr. Cori's total compensation directly linked
to performance of the Company and the price of its common stock.
For the other executive officers, the Committee determined that 1993
compensation should include increased award levels under a combination of
the Incentive Stock Bonus Plan and the Share Option Plan, in lieu of salary
increases, to more closely align the interests of these executives with
those of shareholders.
The Committee believes that the compensation policies and programs it has
implemented have committed the executive officers of the Company to
achieving continuous long-term improvement in operating results.
COMPENSATION COMMITTEE
Andrew E. Newman
William C. O'Neil, Jr., Chairman
Thomas N. Urban
PERFORMANCE GRAPH
The following performance graph compares the Company's cumulative
shareholder return (stock price appreciation plus reinvestment of
dividends) for a five-year period ended December 31, 1993, with that of the
Standard and Poor's 500 Composite Stock Price Index and an index of the
companies included in the Value Line Chemical Specialty Industry Group,
assuming that $100 was invested in each on December 31, 1988, and that all
dividends were reinvested. These indices are only included for comparative
purposes as required by Securities and Exchange Commission rules and do not
necessarily reflect management's opinion that such indices are an appropriate
measure of the relative performance of the Company's common stock, and are
not intended to forecast or be indicative of possible future performance of
the common stock.
<TABLE>
<CAPTION>
Comparative Five-Year Returns
(Following is a line graph depicting the following data)
1988 1989 1990 1991 1992 1993
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Sigma-Aldrich $100.00 $123.11 $126.13 $228.89 $249.62 $209.69
S&P 500 100.00 131.49 127.32 166.18 179.11 197.00
Value Line
Chemical Specialty 100.00 124.91 128.77 190.70 215.87 245.46
(End Graph)
</TABLE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The principal accountant selected by the directors for the current year is
Arthur Andersen & Co., independent accountants. Representatives of Arthur
Andersen & Co. are expected to be present at the Meeting and will have the
opportunity to make a statement if they wish to do so, and are expected to
be available to respond to questions.
OTHER MATTERS
The affirmative vote of the holders of a majority of the shares which are
present in person or represented by proxy at the Meeting is required to
elect directors and act on any other matters properly brought before the
Meeting. Shares represented by proxies which are marked "withhold
authority" with respect to the election of any one or more nominees for
election as directors and proxies which are marked to deny discretionary
authority on other matters will be counted for the purpose of determining
the number of shares represented by proxy at the Meeting. Such proxies
will thus have the same effect as if the shares represented thereby were
voted against such nominee or nominees and against such other matters,
respectively. Shares not voted on one or more but less than all such
matters on proxies returned by brokers will be treated as not represented
at the Meeting as to such matter or matters.
Except for a shareholder proposal omitted pursuant to certain rules of the
Securities Exchange Act of 1934, the Company knows of no other matters that
may be presented for consideration at the Meeting. If such shareholder
proposal is properly brought before the Meeting, the persons named in the
accompanying proxy intend to vote all proxies against the proposal. If any
other matters are properly brought before the Meeting, the persons named
in the accompanying proxy intend to vote or act with respect to them in
accordance with their best judgement.
SHAREHOLDER PROPOSALS
Written proposals of shareholders to be included in the proxy statement and
proxy for the next Annual Meeting of Shareholders must be received at the
Company's principal executive office, 3050 Spruce Street, St. Louis,
Missouri 63103, no later than November 30, 1994. Upon receipt of any such
proposal, the Company will determine whether or not to include such
proposal in the proxy statement and proxy in accordance with regulations
governing the solicitation of proxies.
Under the Company's by-laws, timely notice must be received by the Company
in advance of a shareholders' meeting for a shareholder to nominate a
candidate for director or to bring other business before the meeting.
Such notice must be received not less than ten days before the first
anniversary of the preceding year's annual meeting. If the date of
the annual meeting is changed by more than thirty days from such
anniversary date, notice must be received not later than the tenth day
preceding the date of the meeting as announced in the notice of the
meeting or as otherwise publicly disclosed. Any shareholder filing a
notice of nomination must include certain information, including certain
information about the nominee, and any notice regarding a proposal of
other business must include certain information, including a description
of the proposed business, the reasons therefor and any interest the
shareholder has in such business, as well as for either notice, the name
and address of the shareholder and the number of shares of common stock
held by the shareholder. These requirements are separate from and in
addition to the Securities and Exchange Commission's requirements that a
shareholder must meet to have a proposal included in the Company's proxy
statement.
In each case, the proposals or notices described above must be submitted
in writing to Peter A. Gleich, Secretary, Sigma-Aldrich Corporation, 3050
Spruce Street, St. Louis, Missouri 63103.
By Order of the Board of Directors,
/s/ Peter A. Gleich
Peter A. Gleich, Secretary
March 30, 1994
PROXY
SIGMA-ALDRICH CORPORATION
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 3, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints ANDREW E. NEWMAN and WILLIAM C. O'NEIL, JR.,
or either of them, the true and lawful attorneys-in-fact, agents and proxies,
with the power of substitution and revocation, to represent the undersigned
at the Annual Meeting of Shareholders of SIGMA-ALDRICH CORPORATION to be held
at The Boatmen's National Bank of St. Louis, 800 Market Street, St. Louis,
Missouri 63101 on May 3, 1994, at 11:00 A.M., Central Daylight Time (including
all adjournments thereof), and there to vote all shares of stock which the
undersigned is entitled to vote, with all powers which the undersigned would
possess if personally present, as follows:
(1) ELECTIONS OF DIRECTORS:
FOR all nominees listed
(except as marked to the contrary below) ___
WITHHOLD AUTHORITY
to vote for all nominees below ___
Instructions: To withhold authority to vote for any individual nominee strike
a line through the nominee's name in the list below:
Carl T. Cori, David R. Harvey, Robert J. Hurst, David M. Kipnis,
Andrew E. Newman, William C. O'Neil, Jr., Jerome W. Sandweiss,
D. Dean Spatz, Thomas N. Urban
(2) Upon such other business as may properly come before the meeting and any
adjournments thereof.
THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES UNLESS OTHERWISE
DIRECTED AND IN THE DISCRETION OF THE PROXIES ON WHATEVER OTHER BUSINESS MAY
PROPERLY COME BEFORE THE MEETING.
(Continued and to be signed on other side)
(Continued from other side)
The undersigned acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement dated March 30, 1994, and hereby revokes all proxies heretofore
given by the undersigned for said meeting. This proxy may be revoked prior
to its exercise.
Dated,_____________________,1994
________________________________
________________________________
Please sign name or names as appearing on this proxy. If signing for estates,
trusts or corporations, title or capacity should be stated. If shares are
held jointly, every holder should sign.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
