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
___ 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 Rule 14a-11(c) or Rule 14a-12
Sigma-Aldrich Corporation
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(Name of Registrant as Specified in Its Charter)
Sigma-Aldrich Corporation
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(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) or
Item 22)a)(2) of Schedule 14A.
___ $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 transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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___ 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:
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SIGMA-ALDRICH CORPORATION
3050 Spruce Street
St. Louis, Missouri 63103
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held May 2, 1995
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 2, 1995, at 11:00 A.M., Central Daylight Time, for the
following purposes:
1. To elect nine directors;
2. To consider and vote upon approval of the Company's
Share Option Plan of 1995;
3. To consider and vote upon a shareholder proposal
as described herein; and
4. 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 7,
1995, are entitled to notice of, and to vote at, the meeting.
By Order of the Board of Directors,
/s/ Thomas M. Tallarico
Thomas M. Tallarico, Secretary
March 30, 1995
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 2, 1995
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 2, 1995,
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, for approval of the Share Option
Plan of 1995 and against the shareholder proposal described herein.
Shareholders of record at the close of business on March 7, 1995,
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 7, 1995, there was a total of 49,850,757 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, 1995.
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 were elected to their present terms
as directors at the 1994 Annual Meeting of Shareholders. 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 and Chief Executive
Officer of the Company. Dr. Cori has been
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. He served as President
of the Company for more than five years until
March 1995. Age 58.
David R. Harvey President and Chief Operating Officer of the
Company. Dr. Harvey has been Chief Operating
Officer for more than five years and was elected
President in March 1995, after serving as
Executive Vice President for more than five years.
He has been a director of the Company since 1981.
Age 55.
Robert J. Hurst General Partner, Goldman, Sachs & 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 and VF Corporation.
Age 49.
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 67.
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 50.
William C. O'Neil, Jr. Chairman of the Board, President and
Chief Executive Officer, ClinTrials
Research, Inc., a clinical research
services company, Nashville, Tennessee,
for more than five years. Mr. O'Neil has been a
director of the Company since 1987. He
is also a director of ClinTrials
Research, Inc., American Healthcorp, Advocat,
Inc. and Atrix Laboratories, Inc. Age 60.
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 70.
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 1994.
He is also a director of Osmonics, Inc. and
Structural Instrumentation, Inc. Age 51.
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 60.
Directors Meetings and Committees
The Board of Directors met four times during 1994. Each director
attended at least 75% of the aggregate of the meetings of the Board
and its Committees on which he served during 1994.
The Board of Directors has three committees which function
throughout the year. The Audit Committee, of which Messrs. Hurst
(Chairman), Newman, Sandweiss, and Spatz 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 one meeting 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 two meetings in the past year.
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
$2,500 for each directors or committee meeting attended plus
reimbursement of their travel expenses.
During 1994, Blumenfeld, Kaplan & Sandweiss, P.C., of which Mr.
Sandweiss is Of Counsel, received from the Company $398,000 for legal
services rendered. Dr. Kipnis rendered certain consulting services
to the Company during 1994 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 7, 1995, based
upon information obtained from such persons:
Shares
Beneficially
Name Company Position Owned (1)(2)
------------------- ---------------------------- ---------------
Carl T. Cori Director, Chairman of the Board 138,468
and Chief Executive Officer
Peter A. Gleich Vice President and Treasurer 69,740 (3)
David R. Harvey Director, President and Chief 71,720
Operating Officer
Robert J. Hurst Director 500
David M. Kipnis Director 4,943
Andrew E. Newman Director 2,000
William C. O'Neil, Jr. Director 2,000
Kirk A. Richter Controller 26,200 (3)
Jerome W. Sandweiss Director 7,000
D. Dean Spatz Director 1,100
Thomas M. Tallarico Vice President and Secretary 14,450 (3)
Thomas N. Urban Director 2,453
Directors and executive 340,574 (3)
officers as a group
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(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,
Richter and Spatz share voting and investment power as to 42,200,
19,200 and 1,100 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 7, 1995, for each of the named
individuals and the group.
(3) Includes 11,000, 7,000, 14,250, and 32,250 shares subject to
stock options that are exercisable as of or within sixty days
of March 7, 1995, 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 investment power with respect to the
shares set forth opposite their name.
Shares
Beneficially Percent of Shares
Name and Address Owned Outstanding
---------------------------- ------------- -----------------
Alfred R. Bader 2,881,030 (1) 5.8%
2961 North Shepard Avenue
Milwaukee, WI 53211
State Farm Mutual Automobile
Insurance Company and 4,194,040 (2) 8.4%
its affiliates
One State Farm Plaza
Bloomington, IL 61710
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(1) As set forth in such person's Schedule 13G, dated January 25,
1995, filed with the Securities and Exchange Commission.
(2) As set forth in such company's Schedule 13G, dated January 28,
1995, 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 1,855,964 shares (3.7% of shares
outstanding) and 1,468,289 shares (2.9% of shares outstanding),
respectively, at March 7, 1995. 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 1994.
APPROVAL OF SHARE OPTION PLAN OF 1995
The Board of Directors believes that the Company's stock option program
constitutes an important part of the Company's compensation program for
key employees and should be carried forward by providing a new Share
Option Plan of 1995 (the "1995 Option Plan") to permit the granting of
stock options which may, but need not, constitute "incentive" stock
options within the meaning of Section 422 of the Internal Revenue Code.
Incentive stock options receive special tax treatment which in the
judgment of the Board will benefit the Company by assisting to attract,
retain and motivate key employees.
Shareholders have previously authorized grants of employee stock options
under the Share Option Plan of 1987 (the "1987 Option Plan"). The 1987
Option Plan provided for the granting of options to acquire up to 1,000,000
shares of the Company's common stock, most of which were awarded by
December 31, 1994. If the 1995 Option Plan is approved by the shareholders,
no further options will be issued under the 1987 Option Plan, and
the balance of the shares that have been reserved for issuance under the
1987 Option Plan, for which no options have been granted, will be
released from the 1987 Option Plan.
Principal Features of the 1995 Option Plan
The full text of the 1995 Option Plan is set forth in Appendix A hereto,
and shareholders are urged to refer to it for a complete description of
the 1995 Option Plan. The summary of the principal features of the 1995
Option Plan that follows is qualified entirely by such reference.
The 1995 Option Plan permits the granting of options for an aggregate of
2,000,000 shares of the Company's common stock. These shares may be
either authorized but unissued shares or shares reacquired by the
Company as treasury shares. The number of shares reserved for issuance
upon the exercise of options granted under the 1995 Option Plan,
if the 1995 Option Plan is approved, will be adjusted during the time
the 1995 Options Plan is in effect to reflect any change in the shares of
the Company's common stock through merger, consolidation, reorganization,
reclassification, recapitalization, subdivision, stock dividends, stock
split-ups or other change in the Company's corporate structure if the
Company's Compensation Committee ("Committee"), in its discretion, deems
such adjustment to be appropriate. Options for any shares which expire
or terminate without being exercised will be available for regrant.
The 1995 Option Plan is administered by the Committee, presently
consisting of three non-management members of the Company's Board
of Directors, which will grant options to employees for such shares
and at such times as the Committee determines, taking into account
the duties of the employees, their present and potential contributions
to the success of the Company and such other factors as the Committee
deems relevant in connection with the accomplishment of the purposes
of the 1995 Option Plan. It is not possible to state in advance which
key employees will be granted options by the Committee in the future nor
is it possible to state which key employees would have received options
under the 1995 Option Plan in 1994 had the 1995 Option Plan been in
existence during 1994. The members of the Committee are not eligible
to receive options under the 1995 Option Plan while serving on the Committee.
Under the 1995 Option Plan, an optionee may not exercise for the first
time in any one calendar year incentive stock options for common stock
of the Company having an aggregate market value (determined at the time
of the grant) under all stock option plans of the Company in excess of
$100,000. In addition, no single participant may receive grants of
options during any single fiscal year for more than an aggregate of
100,000 shares of common stock. No options may be granted to an officer
or to a member of the Company's Board of Directors who is not at the
time of the grant a full-time employee of the Company or one of its
subsidiaries, nor to any person owning, directly or indirectly
(including shares subject to the option), more than ten percent (10%)
of the voting power or value of all shares of the Company.
Options may be "incentive" stock options within the meaning of Section 422
of the Internal Revenue Code or "non-qualified" stock options. The option
price of shares covered by options shall be determined by the Committee.
However, no incentive stock option may have an option price of less than
the fair market value of the shares at the date of the grant.
Options are exercisable at such times and under such conditions, not
inconsistent with the 1995 Option Plan, as may be determined by the
Committee. Stock purchased under the 1995 Option Plan must be fully
paid for at the time an option is exercised, which payment shall be in
cash or in the form of stock of the Company previously acquired by the
optionee. Options are not transferable other than by will or by the
laws of descent and distribution.
No option may be exercisable for less than ten (10) share lots nor in
any amount after a date ten (10) years after the date of the option
grant. Except for the death or disability of an optionee, no option
under the 1995 Option Plan may be exercised prior to the expiration of
a twelve (12) month (or such longer period as may be selected by the
Committee) period from the date of the grant of the option (the "Non-
exercise Period"). If an optionee's employment with the Company or any
of its subsidiaries is terminated for cause or is terminated for any
reason during the Non-exercise Period, the optionee's right to exercise
the option shall terminate and all rights thereunder will cease. Once
the Non-exercise Period has passed as to any particular stock option,
the stock options under the 1995 Option Plan will terminate upon the
date of the voluntary termination of employment of the optionee or three
(3) months after an optionee's retirement or involuntary termination of
employment without cause (other than by reason of death). In the event
of an optionee's death occurring during employment or within three (3)
months thereafter, the option will terminate one year from the date of
death. No options may be granted later than February 21, 2005.
The Company's Board of Directors may modify or amend the 1995 Option
Plan as it deems advisable. The Board of Directors, however, cannot
increase the total number of shares upon which options may be granted
under the 1995 Option Plan, may not withdraw the administration of the
1995 Option Plan from the Committee, may not change the class of
employees eligible to be granted options under the 1995 Option Plan,
may not change the manner of determining the option price, and may not
extend the termination date of the 1995 Option Plan, without in each
such instance obtaining the approval of the shareholders.
The closing price for each share of the common stock of the Company in
the over-the-counter market for National Market Issues on March 7,
1995, based upon the reports of the National Quotation Bureau,
Incorporated (from NASDAQ), was $35.50.
Federal Income Tax Consequences
If an option awarded under the 1995 Option Plan is an incentive stock
option, the employee will recognize no income upon grant of the incentive
stock option and incur no regular income tax liability due to the exercise
of the incentitive stock option. However, the employee may be subject to
the alternative minimum tax. The Company will not be allowed a deduction
for federal income tax purposes as a result of the exercise of an
incentive stock option, regardless of the applicability of the alternative
minimum tax. Upon the sale or exchange of the shares at least two (2)
years after grant of the option and one (1) year after exercise of the
shares by the employee, any gain to the employee will be treated as
long-term capital gain. If these holding periods are not satisfied, the
employee will recognize ordinary income equal to the difference between
the exercise price and the lower of the fair market value of the shares
at the date of the option exercise or the sales price of the shares and
the Company will be entitled to a deduction in the same amount as the
ordinary income recognized by the employee. Any gain recognized on such
a "disqualification" caused by such a premature disposition of the shares
in excess of the amount treated as ordinary income will be characterized
as capital gain.
All other options which do not qualify as incentive stock options are
referred to as non-qualified options. An employee will not recognize
any taxable income at the time the employee is granted a non-qualified
option. However, upon its exercise, the employee will recognize
ordinary income for tax purposes measured by the excess of the then fair
market value of the shares over the option price and the Company will be
entitled to a deduction in the same amount as the ordinary income
recognized by the employee. The income recognized by an employee will
be subject to tax withholding by the Company by payment in cash. Upon
the subsequent sale of any such shares by the employee, any difference
between the sales price and the exercise price, to the extent not
recognized as ordinary income as provided above, will be treated as
capital gain or loss.
Under Section 162(m) of the Internal Revenue Code, the Company may be
limited as to federal income tax deductions to the extent that total
individual compensation paid to the Company's Chief Executive Officer
or to any of the other four most highly compensated executive officers
exceeds $1,000,000 in any one year. The Company can preserve the
deductibility of certain compensation in excess of $1,000,000, however,
provided that it complies with conditions imposed by Section 162(m)
of the Internal Revenue Code, including the payment of performance-based
compensation pursuant to a plan approved by shareholders. The 1995
Option Plan is designed to provide the Company flexibility and the
opportunity to qualify certain aspects of compensation as
performance-based compensation under Section 162(m) of the
Internal Revenue Code.
The foregoing summary of the effect of federal income taxation upon
the employee and the Company with respect to awards under the 1995
Option Plan does not purport to be complete, and reference should be
made to the applicable provisions of the Internal Revenue Code. In
addition, this summary does not discuss the provisions of the income
tax laws of any municipality, state or foreign country in which the
employee may reside.
A favorable vote of the majority of the outstanding shares will be
required for approval of the adoption of the 1995 Option Plan.
The Board of Directors recommends a vote FOR approval of the 1995
Option Plan.
SHAREHOLDER PROPOSED RESOLUTION CONCERNING
EARNINGS ANNOUNCEMENTS
The Company has been informed that Dr. Alfred Bader, 2961 North Shepard
Avenue, Milwaukee, Wisconsin 53211, the beneficial owner of more than
2,500,000 shares of the common stock of Sigma-Aldrich Corporation,
intends to present the following resolution for adoption at the meeting:
Proposed Resolution
RESOLVED, that the shareholders recommend to the Board of Directors
that the Board (or a Committee of outside directors of the Board)
review the Company's internal financial statements monthly to determine
whether in their judgment the Company's performance for the quarter is
likely to differ materially from the current consensus or mean earnings
estimate published by recognized financial sources for that quarter.
If they differ, the Board or the Committee shall determine whether it
is appropriate to make disclosure well in advance of the normal
quarterly announcement.
Statement in Support of the Proposal
After the market closed on July 20, 1994, the Company reported earnings
for the second quarter of $.54 per share, which was only equal to the
second quarter's earnings for 1993. This was the first time that the
Company had not reported an increase in earnings over the prior year's
quarter. The results were below the consensus estimate of $.60 per
share. The next day, the stock price fell approximately 15% from the
close on the prior day.
Investors are naturally disappointed by unfavorable results. Their
disappointment increases when the results are also a surprise. Much
of the Company's stock is held by institutions and institutional
investors are particularly concerned with surprises.
Analysts that make predictions on a company's stock typically are in
contact with that company to determine whether their estimates are
reasonable. While the Company should not provide one investor with
"inside information", it may make public announcements to inform the
market when earnings estimates made by others are unrealistic.
In the situation which occurred, either the Company was unaware of
the likely earnings for the second quarter or failed to warn the
market that earnings estimates were unrealistic. The Board should
implement procedures to guard against either situation occurring
again.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSED RESOLUTION
FOR THE FOLLOWING REASONS:
First, the proposed resolution, in the Board's view, lacks clarity as
it does not define when the Board should determine to issue a public
announcement; instead, the proposed resolution simply calls for an
assessment as to when disclosure is "appropriate". Although the
proposed resolution could be construed to leave the Board with discretion
in making such a determination, the Board believes adoption of such a
resolution is ill advised in light of its ambiguity which carries the
risk that others might seek to construe it to create a standard
independent of the Board's exercise of its best judgment.
Second, if the proposed resolution is construed simply to require the
Board to consider periodically when public announcements are, from time
to time, appropriate, the Board does not believe the resolution
prescribes a new standard of conduct for it to follow. Rather, the
resolution merely requests that the Board continue what it is in large
measure already doing. Thus, contrary to the inferences in the
proponent's statement, the Board believes that had the proposed
resolution, so construed, been in effect during the past year, the
market performance of the Company's common stock would not have been
different.
The Board already periodically reviews the Company's disclosure
practices and the manner in which it communicates the Company's
business to the public. Each month every member of the Board
reviews the Company's internal financial statements and copies of
analysts' reports received by the Company. In connection with such
review, each member of the Board is expected to consider whether it
is appropriate to make any public disclosures, even if the Board does
not formally meet that month. Additionally, the Company complies
with the rules and requirements of the federal securities laws and
the Nasdaq National Market (on which the Company's common stock is
traded) relating to prompt disclosure to the public of material
information. Judgment must be exercised in the timing of disclosures
as premature, incomplete announcements can simply introduce uncertainty
which can be detrimental to the stock price and the shareholders. The
Board has demonstrated its willingness to exercise judgment and to
announce financial results ahead of schedule from time to time when it
deems it appropriate.
Further, shareholders should be aware that the proponent is a former
member of the Board of Directors and was not renominated to the Board
in 1992 by unanimous vote of the continuing directors.
ACCORDINGLY, YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
AGAINST THE PROPOSED RESOLUTION, AND PROXIES WILL BE SO VOTED UNLESS
SHAREHOLDERS SPECIFY IN THEIR PROXIES EITHER A CONTRARY CHOICE OR A
DESIRE TO ABSTAIN.
INFORMATION CONCERNING EXECUTIVE COMPENSATION
The following table presents compensation information for each of
the five named executive officers for the years ended December 31, 1994,
1993 and 1992:
<TABLE>
<CAPTION>
Summary Compensation Table
Long-term Compensation
----------------------
Annual Compensation No. of Shares
------------------------- Underlying
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 1994 $600,000 $285,002 --- $434,700 $2,000
Chairman & CEO 1993 600,000 299,721 --- 457,150 2,858
1992 550,000 177,854 --- 395,870 5,077
Peter A. Gleich 1994 285,000 68,153 20,000 103,950 2,000
Vice President 1993 285,000 109,654 20,000 167,250 2,858
& Treasurer 1992 285,000 76,759 3,000 170,850 5,077
David R. Harvey 1994 400,000 123,914 --- 189,000 2,000
President & COO 1993 400,000 175,446 --- 267,600 2,858
1992 400,000 130,941 --- 291,450 5,077
Kirk A. Richter 1994 172,000 34,076 10,000 51,975 2,000
Controller 1993 172,000 51,172 10,000 78,050 2,220
1992 172,000 36,122 3,000 80,400 4,662
Thomas M. Tallarico 1994 244,000 --- 10,000 --- 2,000
Vice President 1993 244,000 --- 10,000 --- 2,858
& Secretary 1992 244,000 --- 3,000 --- 5,077
<FN>
(1) The value of shares issued under the Incentive Stock Bonus
Plan in 1994, 1993 and 1992 relates to performance in 1988,
1987 and 1986, respectively, and is 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 are presented as other
annual compensation. Drs. Cori and Harvey and Messrs. Gleich,
Richter and Tallarico hold 33,767, 17,000, 5,950, 2,800 and 1,600
Bonus Units, respectively, as of December 31, 1994. Shares of
common stock issuable upon vesting of such Bonus Units have a value
of $1,114,311, $561,000, $196,350, $92,400 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 1994 and 1993 and a
predecessor supplemental retirement plan in 1992.
</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.
The LTIP payouts to each of the named executive officers as presented
in the Summary Compensation Table for the years ended December 31, 1994,
1993 and 1992 relate to performance in the years ended December 31, 1988,
1987 and 1986, respectively. Additionally, LTIP payouts to the Company's
senior management group were $138,175, $189,550 and $80,400 for shares
and $72,330, $124,275 and $36,122 in cash for 1994, 1993 and 1992,
respectively. The following table presents the Bonus Units awarded
to each of the executive officers in 1994 for performance in 1993.
Long-Term Incentive Plan Awards in 1994
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 6,500 5 Years 6,500
Peter A. Gleich 750 5 Years 750
David R. Harvey 3,500 5 Years 3,500
Kirk A. Richter 400 5 Years 400
Thomas M. Tallarico 500 5 Years 500
-----------------------------------------------------------------------------
(1) The Bonus Units become payable to each of the executive
officers in January 1999 in the form of one share of common stock
for each Bonus Unit awarded plus cash as described above.
Additionally, 4,200 Bonus Units were awarded to five members of the
Company's senior management group. No Bonus Units will be awarded under
the Incentive Stock Bonus Plan for the year ended December 31, 1994.
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 named executive officers during the year ended December
31, 1994:
<TABLE>
<CAPTION>
Options Granted in 1994
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 (3)
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 4.8% 36.25 11/07/2004 455,949 1,155,463
David R. Harvey --- --- --- --- --- ---
Kirk A. Richter 10,000 2.4% 36.25 11/07/2004 227,974 577,732
Thomas M. Tallarico 10,000 2.4% 36.25 11/07/2004 227,974 577,732
<FN>
(1) Options vest at the rate of 20% per year beginning November 8, 1995.
(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 nine
members of the Company's senior management group and options for
249,000 shares were granted to 141 members of the Company's
management group at exercise prices ranging from $36.25 to $40.00
per share.
The following table presents (i) the unexercised options held by
each named executive officer and (ii) the value of all in-the-money
options as of December 31, 1994, as if all such in-the-money
options were vested and exercisable as of December 31, 1994:
<TABLE>
<CAPTION>
Option Values at December 31, 1994
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 7,000 36,000 0 0
David R. Harvey --- --- --- ---
Kirk A. Richter 5,000 18,000 0 0
Thomas M. Tallarico 10,150 20,850 0 0
<FN>
(1) No options were exercised by any of the executive officers during
the year ended December 31, 1994.
(2) Calculated as the aggregate closing market price per share of the
Company's common stock on December 31, 1994, 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 $92,466,
$84,188, $104,002, $67,869 and $40,571, 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 7, 1995, 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 7, 1995,
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 44,617 shares of the
Company's common stock and $1,038,453.
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.
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 $1,000,000 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
(In millions of dollars) (dollars)
------------------------ ------------------
1990 $529.1 $1.44
1991 589.4 1.60
1992 654.4 1.92
1993 739.4 2.15*
1994 851.2 2.21
(End Graph)
Average Compounded Growth Rate:
Sales 14.1%
Earnings per share 11.4%
*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 cost of the Plan since its inception has ranged
between 1.0% and 1.4% of cumulative pre-tax income, except for 1994 where
no Bonus Units will be awarded. The Committee expects that the future cost
will continue to constitute about 1% of the Company's cumulative pre-tax
income. See "Incentive Stock Bonus Plan" on page 13 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 1994, 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 14 of this Proxy
Statement for additional information concerning this plan.
1994 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. For 1994, the Committee determined that Dr.
Cori's compensation should be based more on awards, if any, under the
Incentive Stock Bonus Plan, in lieu of a salary increase, to more closely
align his interests with those of shareholders. Accordingly, Dr. Cori's
salary for 1994 was equal to his 1993 salary. Earnings for 1993
(before considering the impact of accounting changes) compared to 1992
increased 12% after increasing 20% for 1992 compared to 1991. In
setting the salary for 1993 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 1994, for the Company's performance in 1993, was 6,500 Bonus
Units compared to 9,000 Bonus Units for the prior year. The decrease in
Bonus Units awarded is directly attributable to the lower percentage
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 judgment 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 1994
and 1993 compensation should include increased awards under either
the Incentive Stock Bonus Plan or 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, 1994, 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, 1989, 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)
1989 1990 1991 1992 1993 1994
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Sigma-Aldrich $100.00 $102.43 $185.81 $202.64 $170.20 $118.03
S&P 500 100.00 96.83 126.41 136.25 150.00 151.73
Value Line
Chemical Specialty 100.00 103.17 152.73 172.54 196.16 191.27
(End Graph)
</TABLE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The principal accountant selected by the directors for the current year is
Arthur Andersen LLP, independent accountants. Representatives of Arthur
Andersen LLP 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 appropriate 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 the approval of the Share Option Plan of 1995,
the shareholder proposal and 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
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.
The Company knows of no other matters to be presented for
consideration at the Meeting. 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 judgment.
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, 1995. 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 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 Thomas M. Tallarico, Secretary, Sigma-Aldrich Corporation, 3050
Spruce Street, St. Louis, Missouri 63103.
By Order of the Board of Directors,
/s/ Thomas M. Tallarico
Thomas M. Tallarico, Secretary
March 30, 1995
APPENDIX A
SHARE OPTION PLAN OF 1995
1. Purpose and Definitions
This plan shall be known as the "Share Option Plan of 1995"
(hereinafter referred to as the "Plan"). The purpose of the Plan is
to provide certain key employees of SIGMA-ALDRICH CORPORATION (the
"Company"), and its subsidiaries, with additional incentive to increase
their efforts on behalf of the Company or a subsidiary thereof, and to
remain in the employ of the Company or any of its subsidiaries, by
granting such key employees options to purchase common stock of the
Company. The options granted under this Plan may, but need not,
constitute "incentive" options within the meaning of Section 422 of the
Internal Revenue Code. An option granted which does not constitute an
incentive option shall, for purposes of this Plan, constitute a
"non-qualified" option. The term "subsidiary" or "subsidiaries" means
any corporation in which the Company directly or indirectly owns stock
possessing 50% or more of the total combined voting power of all classes
of stock.
2. Administration
The Compensation Committee (the "Committee"), consisting of not
less than three (3) members of the Board of Directors of the Company
(the "Board of Directors"), shall be established by the Board of Directors.
Members of the Committee shall be designated from time to time by the
Board of Directors from among its members, with full authority to act in
all matters pertaining to the Plan. Without limiting the generality of
the foregoing provision, the Committee is authorized and shall have full
power and authority, subject to the provisions of the Plan, to establish
such rules and regulations as it may deem appropriate for the proper
administration and operation of the Plan, and to make such determinations
under, and such interpretations of, and to take such steps in connection
with, the Plan and the options granted thereunder as it may deem
necessary or advisable. A director shall be a member of the Committee
only if that director is not eligible during membership on the Committee,
and has not been eligible at any time within one year prior to becoming
a member of the Committee, for selection as a person to whom options may
be granted pursuant to the Plan.
3. Shares
The shares to be optioned under the Plan shall be the Company's
common stock of the par value of One Dollar ($1.00) per share (the
"shares"), which shares may either be authorized but unissued shares or
treasury shares. The aggregate number of shares for which options may be
granted under the Plan shall (subject to the provision of Paragraph 11
hereof) be (a) Two Million (2,000,000) shares, plus (b) the total number
of shares as to which options granted under the Plan terminate (including
options terminated by mutual agreement of the Company and the optionee)
or expire without being wholly exercised. New options may be granted
under the Plan covering the number of shares to which such termination
or expiration relates.
4. Granting of Options, Eligibility and Limitations
The Committee may, prior to February 21, 2005, grant options
for such numbers of shares and to such eligible individuals, as the
Committee shall designate. The individuals eligible to receive options
shall be key employees of the Company or its present or future subsidiaries
(as defined in Section 424(f) of the Internal Revenue Code), other than
(a) persons who are directors or officers of the Company but who are not
employed by the Company on a full-time basis, and (b) persons who own at
the time the option is granted, directly or indirectly (in accordance with
the rules of attribution in Section 424(d) of the Internal Revenue Code),
shares possessing more than ten percent (10%) of the total combined voting
power or value of all classes of shares of the Company or any present or
future subsidiary of the Company.
An individual optionee may be granted (a) an incentive option
or (b) a non-qualified option.
The aggregate fair market value (determined as of the time the
option is granted) of the stock with respect to which incentive stock
options are exercisable for the first time by any employee in any calendar
year (under all such plans of the Company and its subsidiaries) shall not
exceed One Hundred Thousand Dollars ($100,000).
Options shall be evidenced by an option certificate signed by
the Company in such form and with such terms and conditions as the
Committee shall designate. Such certificates shall include by reference
the terms of the Plan as a condition under which the option is issued and
received.
No single participant may receive grants of options during any
single fiscal year of the Company for more than an aggregate of 100,000
shares of common stock.
5. Price
The option price per share for options granted hereunder shall
be determined by the Committee. No incentive option granted under the
Plan shall have an option price less than the fair market value of the
shares on the date of grant of such option as determined by the Committee.
6. Exercise Period and Conditions
Except as provided in Paragraph 8(b)(ii), no option granted
under this Plan may be exercised prior to the expiration of twelve (12)
months from the date it is granted. The Committee may specify a longer
period of time during which an option may not be exercised (hereinafter
referred to as the "Non-exercise Period") at the time each option is
granted. No option shall be exercisable for less than ten (10) share
lots nor in any amount after a date ten (10) years from the date it was
granted.
An option is outstanding until such option is exercised
in full or expires under the terms hereof or by reason of lapse of
time.
Subject to the specific provisions of this Paragraph 6 and of
Paragraph 8 hereof with respect to exercise and termination of options
granted under this Plan, each such option shall be exercisable in such
manner (including installments), at such time or times and subject to
such conditions or limitations as shall be fixed by the Committee, in
its sole discretion at the time such option is granted.
7. Non-Transferability of Option Rights
No option shall be transferable by an optionee otherwise than
by will or the laws of descent and distribution, nor shall any optionee
pledge, hypothecate or otherwise create any lien thereon. During the
lifetime of any optionee, an option shall be exercisable only by the
optionee.
8. Effect of Termination of Employment or Death
(a) Termination of Employment During the Non-exercise Period
If, during the Non-exercise Period, the optionee's
employment with the Company and every subsidiary of the Company
shall terminate for any reason, the optionee's right to exercise
the option shall terminate and all rights thereunder shall cease.
(b) Termination of Employment After the Non-exercise Period
(i) By Retirement or Termination of Employment by
the Company Without Cause
If the Non-exercise Period shall have elapsed
and the optionee's employment with the Company and every
subsidiary of the Company shall have been terminated by
the Company thereafter without cause (as hereinafter
defined) or shall terminate because of the retirement of
an optionee on a permitted Retirement Date from the
Company and all subsidiaries, the optionee shall have the
right to exercise the unexercised portion of the option
at any time during a period of three (3) months after the
date of termination or retirement, in whole or in part,
to the extent the optionee could have exercised such
option had the optionee remained in the employ of the Company
during the three (3) month period. The unexercised portion of
the option shall terminate no later than three (3) months
after an optionee ceases to be an employee for any of the
foregoing reasons, and any unexercised portion shall
terminate immediately if and when the optionee becomes an
employee, agent or principal of a competitor of the
Company, or of any subsidiary of the Company, without the
consent of the Company.
If an optionee dies within such three (3) month
period at a time when the optionee is not an employee,
agent or principal of a competitor of the Company or of
any subsidiary (or when the Company has consented to such
relationship with a competitor), the option may be
exercised at any time during the period of twelve (12)
months after the date of the death of the optionee by a
designee, for the number of shares which the deceased
optionee could have acquired by the exercise of such
option had the deceased optionee survived for the twelve
(12) month period, without regard to the requirement of
exercise within three (3) months after termination of
employment.
For purposes of this Plan, the term "designee"
means the deceased optionee's personal representative
or any person who acquired the right to exercise such
option by bequest or inheritance or by reason of the
laws of descent and distribution. The term "Retirement
Date" shall have the meaning set forth in the Employees'
Retirement Plan, as in effect from time to time, of the
optionee's employer, and shall include, where applicable,
the Normal Retirement Date, the Early Retirement Date,
and Retirement By Reason of Disability as defined in such
Plan, or, if the optionee's employer has no such plan,
the term shall have the meaning set forth in the Federal
Social Security Act, as in effect from time to time.
(ii) By Death or Permanent and Total Disability
If an optionee dies or is totally and permanently
disabled (within the meaning of Section 22(e)(3) of
the Internal Revenue Code) while in the employ of the
Company or any subsidiary, the option may be exercised
by the optionee or by his personal representative at
any time during the twelve (12) month period after the
date of such death or disability for the total number
of shares which were or would have become exercisable
under the option, but only to the extent the optionee
could have exercised such option had he remained in
the employ of the Company for the twelve (12) month period.
(iii) By Termination of Employment for Cause
If an optionee's employment is terminated by the
Company and every subsidiary for cause, any unexercised
portion of any option granted to the optionee shall
terminate with his termination of employment. As used
herein, the term "cause" means (a) the failure of the
optionee to carry out the duties assigned as a result of
incompetence or willful neglect, or (b) such other
reasons, including the existence of a conflict of interest
or the commission of a crime, as the Committee may
determine.
(iv) By Voluntary Termination of Employment
If an optionee voluntarily terminates employment
with the Company and every subsidiary for any reason
other than the retirement of an optionee on the
Retirement Date, any unexercised portion of an
outstanding option shall terminate with the termination
of employment.
No transfer of an option by the optionee pursuant
to subparagraphs (i) and (ii) above by will or by the laws
of descent and distribution shall be effective unless the
Company shall have been furnished with written notice thereof
and a copy of the will and/or such other evidence as the Committee
may deem necessary to establish the validity of the transfer
and the acceptance by the designee or designees of the terms
and conditions of the option. In the event of disability, the
Committee may demand medical records and/or such other evidence
as it deems necessary to establish the total and permanent
disability of the optionee and, in the absence of such evidence,
may refuse to permit the exercise of any option later than (3)
months after the date of termination of employment. Under no
circumstances shall the right of any such designee to exercise any
any such option extend beyond the twelve (12) month period from
date of death.
Nothing in this paragraph 8 shall be construed to
permit the exercise of an option more than ten (10) years after
the date it was granted.
Whether military or government service shall constitute
termination of employment for the purposes of this Plan or any
option granted hereunder shall be determined in each case by the
Committee in its sole discretion, subject to then current
applicable law and regulation.
9. Payment for Shares
Payment for shares purchased upon exercise of an option granted
hereunder shall be made in full for all shares purchased at the time of
exercise. Full or partial payment for the stock purchased hereunder may
be made with stock of the Company previously acquired by the optionee.
Such previously acquired stock shall be valued at its fair market value
on the date the option is exercised.
10. Rights as a Shareholder
An optionee or a designee of an optionee shall have no rights
as a shareholder with respect to any shares covered by an option until
the optionee or designee shall have become the holder of record of such
shares, and no adjustment, except as may be effected pursuant to the
provisions of Paragraph 11, shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights in respect of such shares for which the
record date is prior to the date on which the person shall become the
holder of record thereof.
11. Merger, Consolidation, Reclassification, Stock Dividend, etc.
If there shall be any change in the shares through merger,
consolidation, reorganization, reclassification, recapitalization,
subdivision, stock dividend, stock split-up or other change in the
Company's corporate structure, such adjustments, if any, as the
Committee in its discretion deems appropriate to reflect such change
shall be made in the aggregate number of shares subject to the Plan
and the number of shares and the price per share subject to outstanding
options.
12. Company's Right to Terminate Employment
Nothing contained herein or in any share option certificate
shall restrict the right of the Company or any subsidiary to terminate
the employment of any optionee at any time, with or without cause, or to
adjust the compensation of any optionee.
13. Indemnification and Exculpation
Each person who is or shall have been a member of the Board
of Directors or of the Committee shall be indemnified and held harmless
by the Company against and from any and all loss, cost, liability or
expense that may be imposed upon or reasonably incurred in connection with
or resulting from any claim, action, suit or proceeding to which the
person may be a party or in which they may be involved by reason of any
action taken or failure to act under this Plan and against and from any
and all amounts paid by them in settlement thereof (with the Company's
written approval) or paid by them in satisfaction of a judgment in any
such action, suit or proceeding, except a judgment based upon a finding
of his bad faith; subject, however, to the condition that upon the
institution of any claim, action, suit or proceeding against them, they
shall in writing give the Company an opportunity, at its own expense,
to handle and defend the same before undertaking to handle and defend
it on their own behalf. The foregoing right to indemnification shall
not be exclusive of any other right to which such person may be entitled
as a matter of law or otherwise, or any power that the Company may have
to indemnify or hold such person harmless.
Each member of the Board of Directors or of the Committee, and
each officer and employee of the Company shall be fully justified in
relying or acting upon any information furnished to or on behalf of the
Company by any person or persons, other than said individual, in
connection with the administration of this Plan. In no event shall any
person who is or shall have been a member of the Board of Directors or
of the Committee, or an officer or employee of the Company, be liable
for any determination made or other action taken or any omission to act
in reliance upon any such information, or for any action (including the
furnishing of information) taken or any failure to act, if in good faith.
14. Use of Proceeds
The proceeds received from the sale of shares pursuant to the
Plan will be used for general corporate purposes.
15. Amendment and Termination of the Plan
The Board of Directors may at any time terminate this Plan.
The Board of Directors may make such amendments and modifications as it
deems advisable, in its sole discretion, including those amendments as
may be necessary or desirable to comply with or conform to the Internal
Revenue Code, as amended, or Regulations or Rulings promulgated thereunder,
or superseding legislation, except that the Board of Directors may not,
without approval of the shareholders (a) increase the total number of
shares on which options may be granted under the Plan, except as may be
effected pursuant to the provisions of Paragraph 11 hereof, (b) withdraw
the administration of the Plan from the Committee, (c) permit any person
then a member of the Committee to be eligible to receive an option under
the Plan, (d) change the class of employees eligible to be granted options
under the Plan, (e) change the manner of determining the option price, or
(f) extend the termination date of the Plan or of any option granted
thereunder. Unless sooner terminated, this Plan shall terminate on
February 21, 2005. No amendment, modification or termination of the Plan
shall in any manner affect any option theretofore granted under the Plan
without the consent of the optionee or the transferee of the option.
16. Approval by Shareholders
The Plan has been approved by the Board of Directors and shall
be submitted within twelve (12) months for approval by the affirmative
vote of a majority of the shares voting at the next meeting of shareholders.
17. Implementation of the Plan
The Plan shall become effective February 21, 1995 (the effective
date), and, except as hereinafter provided, may be implemented thereafter
by the Board of Directors and the Committee. Before implementing this
Plan, the Board of Directors may, from time to time, request such ruling
or rulings as it may deem appropriate from the Internal Revenue Service
concerning the income tax consequence of this Plan or from any other
governmental agency concerning the applicability of any restrictive
regulation to this Plan.
IN WITNESS WHEREOF, the Company has executed the Plan as of
this 21st day of February, 1995.
SIGMA-ALDRICH CORPORATION
By: /s/ Carl T. Cori
Chairman of the Board
and Chief Executive Officer
PROXY
SIGMA-ALDRICH CORPORATION
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 2, 1995
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 2, 1995, 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:
The Board of Directors recommends a vote For all nominees listed and
approval of the Company's Share Option Plan of 1995:
(1) ELECTION 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) Approval of the Company's Share Option Plan of 1995.
___ For
___ Against
___ Abstain
The Board of Directors recommends a vote Against the following proposal:
(3) Approval of a shareholder proposal concerning earnings announcements.
___ For
___ Against
___ Abstain
(4) Upon such other business as may properly come before the meeting and any
adjournments thereof.
(Continued and to be signed on other side)
(Continued from other side)
This proxy will be voted for the election of all nominees, for the approval
of the Share Option Plan of 1995 and against the shareholder proposal unless
otherwise directed; and in the discretion of the proxies on whatever other
business may properly come before the meeting.
The undersigned acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement dated March 30, 1995, and hereby revokes all proxies heretofore
given by the undersigned for said meeting. This proxy may be revoked prior
to its exercise.
Dated,_____________________,1995
________________________________
________________________________
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.
