<PAGE> 1
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
Versa Technologies, Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Versa Technologies, Inc.
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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(i)(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
VERSA TECHNOLOGIES, INC.
9301 WASHINGTON AVENUE, P.O. BOX 085012
RACINE, WISCONSIN 53408-5012
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 23, 1996
To the Shareholders of Versa Technologies, Inc.:
The Annual Meeting of Shareholders of Versa Technologies, Inc. (the
"Company"), will be held on Tuesday, July 23, 1996, at 11:00 a.m., at the
Marriott, 7111 Washington Avenue (Highway 20), Racine, Wisconsin, for the
following purposes as more fully described in the accompanying proxy statement:
1. To elect two Class I directors of the Company for three year terms
expiring in 1999.
2. To consider approval of the Versa Technologies, Inc. 1996 Employee
Stock Purchase and Payroll Savings Plan.
3. To amend the 1992 Versa Technologies, Inc. Employee Incentive Stock
Option Plan.
4. To ratify the appointment of Deloitte & Touche LLP as independent
auditors for the fiscal year ending March 31, 1997.
5. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business of May 31, 1996, as
the record date for the determination of shareholders entitled to vote at the
Annual Meeting and to receive notice thereof. The transfer books of the Company
will not be closed. Examination of the list of shareholders entitled to vote can
be arranged at the office of Robert M. Sukalich, Vice President Finance and
Assistant Secretary, Versa Technologies, Inc., 9301 Washington Avenue,
Sturtevant, Wisconsin, during the period ten days prior to the meeting.
You are cordially invited to attend the meeting and may, of course, vote
your shares in person at that time. However, in order to assist us in preparing
for the meeting, all shareholders are encouraged to date, sign, and return the
enclosed proxy in the enclosed stamped envelope, to which no additional postage
need be affixed if mailed in the United States.
Law.Block Sig
LAWRENCE BLOCK, Secretary
June 17, 1996
<PAGE> 3
VERSA TECHNOLOGIES, INC.
9301 WASHINGTON AVENUE, P.O. BOX 085012
RACINE, WISCONSIN 53408-5012
PROXY STATEMENT
This proxy statement and the accompanying proxy card are being furnished to
shareholders in connection with the solicitation by the Board of Directors of
Versa Technologies, Inc. (the "Company") of proxies for use at the Annual
Meeting of Shareholders to be held on Tuesday, July 23, 1996, at 11:00 a.m. and
at all adjournments of the meeting, for the purposes set forth in the attached
Notice of Annual Meeting of Shareholders. Any proxy given pursuant to this
solicitation may be revoked by the person giving it at any time before it is
exercised in any of the following ways: (1) by a written instruction to the
Secretary of the Company indicating the shareholder's desire to revoke an
existing proxy; (2) by signing and returning to the Company a proxy with a more
recent date than that of the proxy first given; or (3) by signing and returning
a floor ballot at the Annual Meeting.
The Company will bear the cost of preparing, printing and mailing material
in connection with this solicitation of proxies. In addition to the use of the
mails, solicitations may be made by regular employees of the Company personally
and by telephone and facsimile, and the Company intends to reimburse brokerage
firms and others for their reasonable out-of-pocket expenses, including clerical
expenses, in forwarding proxy material to beneficial owners of stock or
otherwise in connection with this solicitation of proxies.
This proxy statement and the accompanying form of proxy are first being
mailed to shareholders on or about June 17, 1996.
RECORD DATE AND VOTING SECURITIES
As of May 31, 1996, the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting, the outstanding voting
securities of the Company consisted of 5,620,298 shares of Common Stock, par
value $.01 per share (the "Common Stock"). All of the outstanding shares of
Common Stock are entitled to vote on all matters which properly come before the
Annual Meeting, and each shareholder will be entitled to one vote for each share
of Common Stock held.
All properly executed proxies received by the Company, unless marked to the
contrary or revoked, will be voted FOR: (1) election of the two nominees for
Class I directors for terms expiring in 1999; (2) approval of the Versa
Technologies, Inc. 1996 Employee Stock Purchase and Payroll Savings Plan; (3)
amendment of the 1992 Versa Technologies, Inc. Employee Incentive Stock Option
Plan; and (4) ratification of the appointment of Deloitte & Touche LLP as
independent auditors for the fiscal year ending March 31, 1997.
A quorum of shareholders is necessary to take action at the Annual Meeting.
A majority of the outstanding shares of Common Stock of the Company, represented
in person or by proxy, will constitute a quorum. Votes cast by proxy or in
person at the Annual Meeting will be tabulated by the inspector of election
appointed for the Annual Meeting. The inspector of election will determine
whether or not a quorum is present at the Annual Meeting. The inspector of
election will treat directions to withhold authority, abstentions and broker
non-votes (which occur when a broker or other nominee holding shares for a
beneficial owner does not vote on a particular proposal, because such broker or
other nominee does not have discretionary voting power with respect to that item
and has not received instructions from the beneficial owner) as present and
entitled to vote for purposes of determining the presence of a quorum for the
transaction of business at the Annual Meeting. Directions to withhold authority
will have no effect on the election of directors, because directors are elected
by a plurality of votes cast. For purposes of determining shareholder approval,
abstentions will be treated as shares of Common Stock voted against approval of
the 1996 Employee Stock Purchase Plan, amendment of the 1992 Employee Incentive
Stock Option Plan, and ratification of the appointment of Deloitte & Touche LLP
as independent auditors for the fiscal year ending March 31, 1997.
The two nominees for director who receive the greatest number of votes cast
in person or by proxy at the Annual Meeting shall be elected directors of the
Company. The vote required for ratification of the appointment of Deloitte &
Touche LLP as independent auditors for the fiscal year 1997 is the affirmative
vote of a majority of the shares of Common Stock present in person or
represented by proxy at the Annual Meeting. For purposes of determining the
approval of any matter submitted to the shareholders for a vote, abstentions
will be treated as shares of Common Stock voted against the ratification of the
appointment of Deloitte & Touche LLP as independent auditors for the fiscal year
1997.
1
<PAGE> 4
PROPOSAL 1
ELECTION OF DIRECTORS
NUMBER OF NOMINEES AND CLASSIFICATION
The Certificate of Incorporation and By-Laws of the Company currently
provide that the Board of Directors shall consist of such number of directors as
shall be fixed from time to time by resolution of the Board of Directors but
shall be not less than five and not more than nine. Currently, the Board of
Directors has fixed the number of directors constituting the Board at seven. The
Certificate of Incorporation divides the Board of Directors into three classes
with terms of three years each, staggered to expire in successive years. Two
directors in Class I whose terms expire in 1996 are standing for reelection. All
nominees for election to the Board of Directors at the 1996 Annual Meeting will
be elected for a term of three years and shall serve until their terms expire at
the 1999 Annual Meeting or until their successors are duly elected and have
qualified. The three directors in Class II will continue to serve until the 1997
Annual Meeting, and the two directors in Class III will continue to serve until
the 1998 Annual Meeting.
The Board of Directors held six meetings during the last fiscal year and
each director attended at least 75 percent of the aggregate of the total number
of meetings of the Board of Directors and all the committees thereof on which he
served.
All properly executed proxies received by the Company, unless marked to the
contrary or revoked, will be voted FOR election of each of the nominees as Class
I directors named below. If, prior to the election, it is determined that a
nominee is unable or unwilling to serve, an event that the Company does not
anticipate, the proxy may be voted in the discretion of the persons named in the
proxy for another person in his stead.
INFORMATION AS TO NOMINEES AND INCUMBENT DIRECTORS
Shown below is information regarding nominees for election and other
directors of the Company.
NOMINEES FOR DIRECTOR
CLASS I
FOR TERMS EXPIRING 1999
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE SINCE
---------------------------------------------------------------- --------
<S> <C>
James E. Mohrhauser, 73......................................... 1970
Denis H. Carroll, 57............................................ 1983
</TABLE>
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
CLASS II
TERMS EXPIRING 1997
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE SINCE
---------------------------------------------------------------- --------
<S> <C>
Herman B. McManaway, 70......................................... 1970
Morris W. Reid, 70.............................................. 1982
Thomas J. Magulski, 52.......................................... 1993
</TABLE>
CLASS III
TERMS EXPIRING 1998
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE SINCE
---------------------------------------------------------------- --------
<S> <C>
William P. Killian, 61.......................................... 1991
Joan R. Lloyd, 46............................................... 1994
</TABLE>
2
<PAGE> 5
BUSINESS EXPERIENCE OF NOMINEES AND INCUMBENT DIRECTORS FOR PAST FIVE YEARS
The five year employment history of each Director Nominee and Incumbent
Director is set forth below.
Denis H. Carroll -- Chairman and Chief Executive Officer of CRL Industries,
Inc. (a holding company) since September 1994. President and Treasurer of
American Couplings Company prior to September 1994.
William P. Killian -- Vice President, Corporate Development and Strategy of
Johnson Controls, Inc., Milwaukee, Wisconsin (a diversified industrial products
manufacturer). Mr. Killian is also a director of Interstate Battery Systems of
America, AquaChem, Inc., and Gehl Company.
Joan R. Lloyd -- President of Joan Lloyd, Inc. since November 1990 (a
consulting firm specializing in organizational change). Prior to 1990 she held a
number of management positions with Northwestern Mutual Life Insurance Company,
Milwaukee, Wisconsin.
Herman B. McManaway -- Retired. Vice President of Ruddick Corporation and
President of Ruddick Investment Co. from September 1973 to December 1986. Mr.
McManaway is also a director of Hughes Supply, Inc.
Thomas J. Magulski -- President and Chief Operating Officer of the Company
since December 14, 1993. Mr. Magulski worked as a business consultant for the
Company from March 1992 through September 1993. Prior to his involvement with
the Company, he was Vice President of Intertech Resources, Inc. from May 1985 to
March 1992. Mr. Magulski is also a director of STERIS Corporation.
James E. Mohrhauser -- Chairman of the Board of Directors and Chief
Executive Officer of the Company, since April 1, 1989. President and Chief
Executive Officer of the Company prior to April 1, 1989.
Morris W. Reid -- Vice Chairman of the Board of Directors of the Company
since April 1, 1989. President of the Company from October 1989 to July 1992.
Chairman of the Board of Directors of the Company prior to April 1, 1989. Mr.
Reid is currently a business advisor and previously served as chairman of J. I.
Case Co. from 1972 to 1978. Mr. Reid is also a director of Research Products
Corporation.
BOARD COMMITTEES
Personnel, Compensation and Stock Option Committee. The Personnel,
Compensation and Stock Option Committee has responsibility for establishing
compensation objectives and policies for all employees and determining
compensation for the Company's executive officers. The Committee, consisting of
J. Lloyd (Chairperson), W. Killian, D. Carroll, and H. McManaway met one time
during the last fiscal year.
Audit Committee. The Audit Committee reviews and evaluates the
effectiveness of the Company's financial and accounting functions, including
review of the scope and results of the audit work performed by the independent
accountants and by the Company's internal accounting staff. The independent
accountants meet with the Audit Committee at least once a year to discuss the
results of their examinations. The Audit Committee, composed of W. Killian
(Chairperson), D. Carroll, J. Lloyd and H. McManaway, met twice during the last
fiscal year.
Nominating Committee. The Nominating Committee is responsible for the
nomination of candidates for election to the Board of Directors. It will
consider nominees recommended to the Secretary of the Company. The Nominating
Committee, composed of H. McManaway (Chairperson), W. Killian, and J. Lloyd, met
once during the last fiscal year.
Executive Committee. The Executive Committee meets on a regular basis to
advise management on important proposals and policy matters and to monitor
management and Company performance. The Executive Committee, currently composed
of J. Mohrhauser (Chairperson), T. Magulski and M. Reid, met eight times during
the last fiscal year.
3
<PAGE> 6
COMPENSATION OF DIRECTORS
Directors who are full-time employees of the Company receive no additional
compensation for services as Directors. Directors not so employed received
annual retainers of $8,500 and fees of $700 for each Board meeting attended and
$500 ($600 for the chairperson) for each committee meeting attended. In lieu of
the annual retainer and meeting fees, Mr. Reid receives $3,000 per month for
service as Vice Chairman of the Board of Directors and as a member of the
Executive Committee.
As of March 31, 1996, D. Carroll, W. Killian, H. McManaway, J. Lloyd, and
M. Reid, directors of the Company, and Mr. Lawrence Block, Secretary of the
Company, each held an option to purchase 5,000 shares of Common Stock of the
Company at a price of $14.12 per share, the fair market value of the Common
Stock on September 27, 1994, the date of grant. The options become exercisable
in increments of 1,250 shares as of the annual anniversaries of the date of
grant and all options expire the earlier of ten years from the date of grant or
upon termination as an officer or director of the Company. W. Killian also held
an option to purchase 5,100 shares of Common Stock of the Company at $14.75 per
share, the fair market value of the Common Stock on January 28, 1992, the date
of grant. This option expires the earlier of five years from the date of grant
or upon termination as a director of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of May 17, 1996, the only persons or entities known to the Company to be
beneficial owners as defined in the rules and regulations under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), of more than five percent of
the issued and outstanding Common Stock were:
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY % OF
NAME ADDRESS OWNED CLASS
- -------------------------------------------- ---------------------------- ------------ -----
<S> <C> <C> <C>
Fenimore Asset Management, Inc. P.O. Box 310 569,483 9.8
Cobleskill, NY 12043
James E. Mohrhauser 9301 Washington Avenue 436,134(1) 7.4
Racine, WI 53408-5012
Brinson Partners, Inc. Three First National Plaza 401,600 6.9
Chicago, IL 60602-4298
State of Wisconsin Investment Board P.O. Box 7842 347,900 6.0
Madison, WI 53707
Quest Advisory Corp. 1414 Avenue of the Americas 311,632 5.4
New York, NY 10019
</TABLE>
- ---------------
(1) Includes 173,436 shares owned by Mr. James E. Mohrhauser's wife, for which
beneficial ownership is disclaimed. Also includes an option to purchase
33,000 shares, exercisable within 60 days of May 17, 1996.
4
<PAGE> 7
Shown below is information reported to the Company, as of May 17, 1996, as
to beneficial ownership of Common Stock of the Company for each nominee for
Director, for each Director continuing in office, for each Officer named in the
Summary Compensation Table below and for all Directors and such named Officers
as a group.
<TABLE>
<CAPTION>
SHARES OF STOCK PERCENT
NAME BENEFICIALLY OWNED OWNED
------------------------------------------------- ------------------ -------
<S> <C> <C>
Denis H. Carroll................................. 7,145(2) *
William P. Killian............................... 7,350(1) *
Joan R. Lloyd.................................... 1,600(1) *
David J. McKendrey............................... 38,500(1) *
Herman B. McManaway.............................. 9,600(1) *
Thomas J. Magulski............................... 25,495(1) *
James E. Mohrhauser.............................. 436,134(3) 7.4%
Morris W. Reid................................... 16,718 *
Robert M. Sukalich............................... 12,800(1) *
All directors and named executive officers as a
group.......................................... 555,342(4) 9.4%
</TABLE>
- ---------------
* Less than one percent of the Company's outstanding shares of Common Stock.
(1) Includes shares issuable pursuant to stock options exercisable within 60
days of May 17, 1996 as follows: W. Killian, 6,350 shares; J. Lloyd, 1,250
shares; D. McKendrey, 22,500 shares; H. McManaway, 1,250 shares; T.
Magulski, 13,495 shares; Morris W. Reid, 1,250; and R. Sukalich, 12,500
shares.
(2) Includes 374 shares owned by Mr. Carroll's daughter for which beneficial
ownership is disclaimed. Also includes 1,250 shares issuable pursuant to
stock options exercisable within 60 days of May 17, 1996.
(3) Includes 173,436 shares owned by Mr. James E. Mohrhauser's wife, for which
beneficial ownership is disclaimed. Also includes an option to purchase
33,000 shares, exercisable within 60 days of May 17, 1996.
(4) Includes 92,845 shares issuable pursuant to stock options exercisable within
60 days of May 17, 1996.
5
<PAGE> 8
EXECUTIVE COMPENSATION AND RELATED MATTERS
The following summary compensation table shows the compensation for the
past three years earned by or awarded or paid to the persons who were the chief
executive officer and the four other executive officers of the Company (the
"Named Officers") whose compensation exceeded $100,000 during fiscal year 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------------- ------------
FISCAL SALARY BONUS OTHER ANNUAL AWARDS
NAME AND PRINCIPAL POSITION YEAR ($) ($) COMPENSATION OPTIONS(#)
- ----------------------------------------- ------ -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
James E. Mohrhauser...................... 1996 $220,000 $ 16,500 0 0
Chairman and Chief Executive Officer 1995 200,000 100,000 0 0
200,000 33,335 0 0
1994
Thomas J. Magulski....................... 1996 $175,000 11,813 0 0
President and Chief Operating 1995
Officer(1) 160,000 72,000 0 25,000
44,903 5,625 0 25,000
1994
Robert M. Sukalich....................... 1996.. $ 95,000 $ 8,550 0 0
Vice President--Finance & Treasurer 1995 84,700 33,880 0 15,000
74,667 8,983 0 0
1994
Raymond T. Aexel......................... 1996 $142,000(4) 0 0 0
President--Custom Components and 1995 121,810 $ 60,625 $ 67,592(3) 15,000
Medical Groups(2) 1994 6,118 0 0 10,000
David J. McKendrey....................... 1996 $128,000 $ 58,539 0 0
President--Fluid Power Group 1995 122,810 53,729 0 15,000
118,085 47,234 0 0
1994
</TABLE>
- ---------------
(1) Mr. Magulski assumed the position of President and Chief Operating Officer
of the Company on December 14, 1993.
(2) Mr. Aexel held the position of President of the Medical Group from March 11,
1994 and to January 3, 1996 and assumed the additional responsibilities of
President--Custom Components Group from November 14, 1994 to January 3,
1996.
(3) Amount represents payments made to Mr. Aexel related to his relocation.
(4) Mr. Aexel's employment with the Company was terminated on January 3, 1996.
6
<PAGE> 9
OPTIONS EXERCISED IN FISCAL YEAR 1996
The following table sets forth the number and value of unexercised options
held by each of the Named Officers at March 31, 1996. None of the Named Officers
exercised any options during fiscal 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
YEAR-END(#) AT FISCAL YEAR END(1)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
James E. Mohrhauser............................ 33,000 0 $49,500 $ 0
Thomas J. Magulski............................. 13,495 36,505 3,125 3,125
Robert M. Sukalich............................. 7,000 18,000 4,500 0
Raymond T. Aexel............................... 8,750 16,250 0 0
David J. McKendrey............................. 22,500 12,500 82,324 1,406
</TABLE>
- ---------------
(1) Represents the difference between $14.00, the closing price of the Company's
Common Stock on March 31, 1996, and the option exercise price.
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Mr. Raymond T. Aexel,
who became President of the Company's Medical Group on March 11, 1994. The
Agreement provides that in the event of a termination of employment on or before
March 10, 1996, other than for cause, voluntary termination of employment,
permanent disability, or death, the Company will continue to pay Mr. Aexel his
then current monthly base compensation for the lesser period of twelve months or
until other employment is secured. Mr. Aexel's employment with the Company was
terminated on January 3, 1996.
The Company entered into an employment agreement with Mr. James E.
Mohrhauser for a three year period ending March 31, 1997. Under the Agreement,
Mr. Mohrhauser will receive a base salary of $200,000, subject to annual review,
and be eligible to receive bonus compensation in accordance with the Company's
bonus plan for executive officers. In the event Mr. Mohrhauser ceases to be
employed by the Company for any reason, excluding termination for cause (as
defined in the Agreement) or voluntary resignation, the Company shall continue
to pay his base salary through March 31, 1997.
PENSION BENEFITS
The Named Officers are participants in the Versa Technologies, Inc.
Salaried, Administrative and Clerical Employees' Pension Plan (the "Pension
Plan"). Remuneration covered by the Pension Plan includes salaries, wages,
overtime payments, bonuses and commissions. For the Named Officers, covered
remuneration is as reported in the Summary Compensation Table. To be eligible to
participate in the Pension Plan an individual must complete at least 1,000 hours
of service during the fiscal year.
7
<PAGE> 10
The following table illustrates the annual single life annuity under the
Pension Plan, before adjustment for Social Security benefits, upon retirement at
age 65 at various average remuneration levels (the average of the five highest
out of the last ten years) and years of service classifications:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
AVERAGE --------------------------------------------------------
REMUNERATION($) 10 15 20 25 30 OR MORE
----------------------------- ------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
$100,000..................... $16,667 $25,000 $ 33,333 $ 41,667 $ 50,000
125,000..................... 20,833 31,250 41,667 52,083 62,500
150,000..................... 25,000 37,500 50,000 62,500 75,000
175,000..................... 29,167 43,750 58,333 72,917 87,500
200,000..................... 33,333 50,000 66,667 83,333 100,000
250,000..................... 41,667 62,500 83,333 104,167 125,000*
300,000..................... 50,000 75,000 100,000 125,000* 150,000*
350,000..................... 58,333 87,500 116,667 145,833* 175,000*
</TABLE>
-----------------------------
* These amounts are subject to reduction because of the annual
pension limitations imposed by the Employee Retirement Income
Security Act of 1974; the extent of any reduction, however, will
vary in individual cases according to circumstances existing at
the time pension payments begin.
The benefit calculation formula provides a benefit of 1 2/3% of average
remuneration, less 1 2/3% of primary Social Security benefits, times years of
service (to a maximum of 30 years). Calculations for the table do not include
the Social Security offset, since the amount of offset varies with the year a
participant attains age 65.
The Pension Plan allows for early retirement upon attainment of age 55. The
amount of the participant's monthly retirement income will be his basic benefit
reduced by an amount equal to .5% for each month that his payments commence
prior to age 65.
As of April 1, 1996, the full years of service credit were, Mr. Mohrhauser
27; Mr. Magulski, 2; Mr. Sukalich, 6; and Mr. McKendrey, 32. In accordance with
the requirements of the Internal Revenue Code, Mr. Mohrhauser's benefits under
the Pension Plan commenced on April 1, 1995. Mr. Mohrhauser received $71,243
during fiscal year 1996.
SUPPLEMENTAL PENSION AGREEMENT
This agreement, entered into on July 15, 1976, provides that the Company
will pay Mr. James E. Mohrhauser annually an amount equal to 2 2/3% of his
average annual compensation (as defined in the Pension Plan), multiplied by his
years of service, and reduced by the sum of (a) 1 2/3% times his primary Social
Security benefit, multiplied by his years of service, and (b) the amount of
retirement benefits received or receivable as a single life annuity from all
other retirement plans maintained by the Company or any of its subsidiaries. Mr.
Mohrhauser's benefits began April 1, 1994. During fiscal year 1996, Mr.
Mohrhauser received the combined annual benefit provided by this agreement and
the Pension Plan in the amount of $148,330.
PERSONNEL, COMPENSATION AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The Personnel, Compensation and Stock Option Committee (the "Committee") of
the Board of Directors establishes compensation objectives and policies for all
employees and determines compensation for the Company's executive officers,
including the Named Officers. The Committee is comprised entirely of independent
outside directors.
The Committee's objectives are to provide rewards which are linked to
Company and individual performance, and ensure that compensation and benefits
are at competitive levels enabling the Company to attract and retain quality
employees.
8
<PAGE> 11
The Committee annually approves the base salaries of all executive
officers. For all executive officers other than the Chief Executive Officer, the
Committee closely reviews with management its recommendations prior to approval
of such salaries. Factors considered by management in its recommendations and by
the Committee in its approval process are the individual performance of each
executive officer and his or her contribution to the overall performance of the
Company or operating division. Company and division performance is measured
against the operating plans, as approved by the Company's Board of Directors.
Achievement of the operating objectives stated in the plans does not result in a
predetermined level of compensation. Compensation practices for comparable
positions outside the Company, as well as each executive officer's
responsibilities and experience are also considered. The practice of
establishing base salaries is subjective.
The Committee approved a 10% increase in Mr. Mohrhauser's annual base
salary to $220,000 for fiscal 1996. The Committee felt the increase was in order
as Mr. Mohrhauser continues to provide strong leadership in the development of
the new management team and the refocus of the company.
Presidents of the Company's operating units participate in bonus plans.
Payments are made in cash pursuant to a plan approved annually by the Committee.
The plan provides for bonuses up to 40% of base salary for operating unit
presidents. Under the formula, up to 50% of bonus is paid for attaining the
business' budgeted operating income goal, up to 30% of bonus is paid for
attaining the division's budgeted sales goal, and up to 20% of bonus is paid for
attaining measurable objectives established for each participant in the plan. An
over-achievement component is included if a business exceeds 100% of its
operating income objective.
Bonuses for executive officers other than operating unit presidents are
paid based on a plan approved by the Committee. The plan is similar to that of
unit presidents in that it provides for bonuses up to 50% of base salary if the
Company achieves established financial goals based principally on achievement of
the Company's net earnings goal and attainment of measurable objectives
established for each participant in the plan. Under this plan, in fiscal year
1996, the Committee awarded Mr. Mohrhauser a bonus in an amount equal to 7.5% of
his base salary. The plan also gives the Committee discretionary authority to
award additional bonuses for outstanding individual performance by an executive
officer.
The Committee is responsible for the administration of the Versa
Technologies, Inc. 1992 Employee Incentive Stock Option Plan ("the Option
Plan"). The purpose of the Option Plan is to promote the long-term success of
the Company by providing financial incentives to key employees who are in
positions to make significant contributions toward such success. Management
makes subjective recommendations to the Committee for the grant of options to
all participants in the Option Plan, including the executive officers except Mr.
Mohrhauser. Mr. Mohrhauser was not granted an option during fiscal 1996.
This report is submitted by the Personnel, Compensation and Stock Option
Committee:
Joan R. Lloyd, Chairperson
Denis H. Carroll
William P. Killian
Herman B. McManaway
9
<PAGE> 12
PERFORMANCE GRAPH
5 Year--Total Return
The following Common Stock performance graph compares the yearly change in
the Company's cumulative total shareholder return on the Company's Common Stock
with the cumulative total return of the S & P Diversified Manufacturers Index
and the Russell 2000 Index during the five year period ended March 31, 1996.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
VERSA TECH- S & P DIVER-
MEASUREMENT PERIOD NOLOGIES, SIFIED MFG. RUSSELL 2000
(FISCAL YEAR COVERED) INC. INDEX INDEX
<S> <C> <C> <C>
3/31/91 100.0 100.0 100.0
3/31/92 109.0 109.7 121.0
3/31/93 99.9 118.8 139.0
3/31/94 118.1 138.6 154.3
3/31/95 113.5 161.5 162.8
3/31/96 121.5 227.6 210.0
</TABLE>
(1) Assumes that the value of the investment in Versa Technologies, Inc.'s
Common Stock and each index was $100 on March 31, 1991 and that all
dividends were reinvested.
(2) The Russell 2000 Index is comprised of medium sized companies ranked by
market capitalization from 1,001 to 3,000. Approximately 60% of the
companies in the index are traded on NASDAQ.
10
<PAGE> 13
PROPOSAL 2
APPROVAL OF VERSA TECHNOLOGIES, INC.
1996 EMPLOYEE STOCK PURCHASE
AND PAYROLL SAVINGS PLAN
On May 17, 1996, the Board of Directors adopted, subject to the approval of
the shareholders, the Versa Technologies, Inc. 1996 Employee Stock Purchase and
Payroll Savings Plan (the "Plan"). If approved by the shareholders, the Plan
will be implemented in December 1996. Should the Plan fail to receive
shareholder approval, the Plan will be considered null and void.
A brief summary of the Plan follows. This summary should be read in
conjunction with the Plan, a copy of which is attached to this proxy statement
as Exhibit A, and which is hereby incorporated by reference herein.
GENERAL
The Plan is designed to encourage savings by employees of the Company and
its subsidiaries and to give eligible employees an opportunity to purchase
Common Stock on an advantageous basis with the proceeds obtained from periodic
payroll savings deductions from the compensation of such employees. As described
below, pursuant to the Plan, eligible employees were granted options on May 17,
1996 to purchase Common Stock ("Options") of the Company. The Plan shall be
administered by the Board of Directors, however, the Board may delegate all or
any part of its functions under the Plan to a committee designated by it.
NUMBER OF SHARES OF COMMON STOCK
The number of shares of Common Stock for which Options may be granted under
the Plan initially is 125,000 shares. The number of shares authorized under the
Plan, the number and class of shares or other securities issued upon exercise of
an Option, the per share Option price and the minimum number of shares subject
to an Option are subject to adjustment in the event of any stock split,
consolidation, recapitalization, reclassification or a similar change in
capitalization or any merger, consolidation or sale of assets of the Company.
ELIGIBLE EMPLOYEES
Every individual who, as of May 17, 1996 was a regular full-time employee
of the Company or any division or subsidiary continuously since April 1, 1996,
except officers of the Company and the presidents of the operating divisions of
the Company, is eligible to participate in the Plan. There were 572 such
employees on May 17, 1996.
OPTIONS GRANTED UNDER THE PLAN
On May 17, 1996, Options to purchase shares of Common Stock were granted to
all eligible employees, subject to shareholder approval of the Plan. Each
eligible employee will be entitled to purchase the lesser of 500 shares of
Common Stock or the whole number of shares equal to 10% of the employee's base
compensation (defined in the Plan as annual base compensation as of May 17,
1996, or in the case of an hourly employee, his or her hourly rate on May 17,
1996 times the number of hours in his or her normal work week, up to 40, times
52) divided by the per share Exercise Price (defined below). The number of
shares subject to an Option may be reduced upon a termination of employment, a
temporary termination (as defined in the Plan), a reduction in payroll savings
deductions, or a decrease in the expected amount of funds available in an
employee's payroll savings account for the purchase of shares pursuant to the
exercise of an Option.
EXERCISE PRICE
On May 17, 1996, the closing price of the Common Stock on the NASDAQ was
$13.625. The per share Exercise Price is $12.27 per share, which is 90% of the
closing price of the Common Stock on May 17, 1996.
11
<PAGE> 14
EMPLOYEE PARTICIPATION IN THE PLAN
Each eligible employee may elect to participate in the Plan by requesting,
on or after December 1, 1996 and on or before 5:00 p.m. on December 16, 1996,
that the Company make deductions from his or her compensation and credit such
amounts to a payroll savings account on his or her behalf. A participant will be
entitled to determine the amount of the deductions from his or her compensation,
provided that such deductions must be sufficient to permit accumulation of at
least $500 during the term of the Plan and may not be larger than the amount
needed to accumulate sufficient funds to purchase the number of shares subject
to the participant's Option at the Exercise Price. Deductions will continue
during a period of approximately two years beginning on January 1, 1997. During
such time a participant may reduce the rate of, or withdraw all of his or her
deductions. A participant may make a cash payment to the Company, or increase
his or her deductions only if he or she recommences employment following a
"temporary termination" (as defined in the Plan) of employment. The Company will
credit the payroll savings account of each participant with interest at an
annual rate of 3.0% compounded quarterly.
TERMS OF OPTIONS
The Option of a participant shall expire, and his or her participation
shall terminate: (a) 30 days following termination of employment, other than a
temporary termination or a termination caused or followed within 30 days by
death; (b) 90 days after the death of a participant occurring while employed,
during a temporary termination or within 30 days of termination of employment;
(c) if the number of shares subject to his or her Option is less than the number
of shares that could be purchased under the Plan with $500; (d) upon his or her
request for a withdrawal from his or her savings account; (e) on the exercise of
his or her Option as to all shares covered thereby; or (f) at 5:00 p.m. on
January 22, 1999 (or the earlier termination of the Plan).
EXERCISE OF OPTIONS
Between January 2, and January 21, 1998 and again between January 4 and
January 22, 1999, each participant may use all or a portion of the funds in his
or her payroll savings account to purchase, at the per share Exercise Price, up
to the number of whole shares of Common Stock subject to his or her Option, so
long as the number of shares purchased is a least equal to the number of shares
that could be purchased under the Plan with $500.
If a participant's employment with the Company terminates during either
exercise period (other than a temporary termination or as a result of death),
each participant may exercise all or a portion of an Option not previously
exercised during the thirty days following the date of termination, but not
later than 5:00 p.m. on January 22, 1999. If a participant's employment with the
Company terminates as a result of death, or if a participant dies within 30 days
after termination of employment, the person acquiring the right to exercise such
Option may exercise all or a portion of such Option during the ninety days
following the participant's death, but not later than 5:00 p.m. on January 22,
1999.
RESTRICTION ON TRANSFERABILITY
During the lifetime of a participant, an Option is not transferable and may
be exercised only by the participant.
TAX ASPECTS OF THE PLAN
A participant will not recognize income, either at the time of grant or
exercise of an Option under the Plan. The Company will not recognize gain or
loss from the transfer of its Common Stock pursuant to the exercise of an
Option.
Upon a disposition of Common Stock acquired pursuant to the exercise of an
Option after the expiration of two years from the date the Option is granted,
and one year from the date the Common Stock is transferred to him or her
pursuant to the exercise of an Option, a participant will recognize taxable gain
in an amount
12
<PAGE> 15
equal to the excess of the proceeds from the sale of the Common Stock over the
Exercise Price. The excess of the fair market value of the Common Stock at the
date of grant over the Exercise Price, will be taxed at ordinary income rates.
The balance of any taxable gain will be taxed at capital gain rates. The
participant could recognize a taxable loss if the Exercise Price exceeds the
sale proceeds. If a participant disposes of Common Stock acquired by the
exercise of an Option after the expiration of both the two-year and one-year
holding periods, the Company will not be entitled to a deduction.
If a participant disposes of Common Stock acquired by the exercise of an
Option prior to the expiration of two years from the date the Option is granted,
and one year from the date the Common Stock is transferred to him or her
pursuant to the exercise of an Option, he or she will recognize ordinary income
in an amount equal to the excess of the fair market value of such Common Stock
at the date of exercise over the Exercise Price. The excess of the sale proceeds
over the sum of (1) the Exercise Price, and (2) the ordinary income recognized,
will be taxed as capital gain. In this situation, the Company will be entitled
to a deduction in an amount equal to the excess of the fair market value of the
Common Stock on the date the Option was exercised over the Exercise Price. The
deduction is reduced by the lesser of (1) the excess of the fair market value of
the Common Stock on the date of grant over the Exercise Price, and (2) the
excess of the fair market value of the Common Stock on the date of disposition
over the Exercise Price.
AMENDMENT OF PLAN
The Board of Directors may amend the Plan; provided that, except for
changes required by the Internal Revenue Code or Federal or state securities
laws, no amendment may adversely affect Options previously granted or rights
previously accrued under the Plan or increase the number of shares of Common
Stock subject to the Plan.
RECOMMENDATION OF THE BOARD OF DIRECTORS
Approval of Proposal 2 requires the affirmative vote of a majority of the
outstanding shares of Common Stock represented at the meeting and entitled to
vote. The Board of Directors recommends that you vote FOR approval of the Plan.
All properly executed proxies received by the Company, unless marked to the
contrary or revoked, will be so voted.
13
<PAGE> 16
PROPOSAL 3
AMENDMENT OF VERSA TECHNOLOGIES, INC.
1992 EMPLOYEE INCENTIVE STOCK OPTION PLAN
On May 17, 1996, the Board of Directors adopted, subject to stockholder
approval, an amendment to the 1992 Versa Technologies, Inc. Employee Incentive
Stock Option Plan (the "Option Plan") increasing the number of shares of Common
Stock that may be made subject to options under the Option Plan from 300,000 to
500,000. As of May 17, 1996, an aggregate of 66,500 options to purchase shares
of Common Stock were available for future grants under the Option Plan. On May
17, 1996, the closing price of the Company's shares of Common Stock was $13.625.
The Board believes that there is a continuing need, and that it is in the best
interests of the Company and its stockholders, to make stock options available
to key employees so that the Company will be able to hire and retain highly
qualified personnel. Accordingly, the Board recommends the proposed increase in
the number of shares of Common Stock as to which options may be granted under
the Option Plan.
GENERAL
The Committee, which is responsible for administering and interpreting the
Option Plan, determines the employees eligible to receive grants of Incentive
Stock Options ("Options") within the meaning of Section 422(b) of the Internal
Revenue Code and, in a manner consistent with the Option Plan, the terms of
those options. Approximately 35 key employees are currently eligible to receive
Options under the Option Plan. The number of Options to be granted in the future
to participants in the Option Plan are not determinable at this time. Reference
is made to the caption entitled "Option Grants in Fiscal Year 1996," and the
disclosure included thereunder which states that no Options were granted under
the Option Plan to the Named Officers during fiscal 1996. All participants in
the Option Plan as a group were granted 17,500 Options during fiscal 1996. The
proposed amendment will not modify the Option Plan in any respect except to
increase the number of shares of Common Stock covered by the Option Plan.
TERMS OF GRANT, EXPIRATION AND EXERCISE
The Option Plan provides that no Options may be granted after the earlier
of March 23, 2002, or the termination of the Option Plan by the Board of
Directors. Options under the Option Plan generally are not exercisable more than
ten years after the date of grant. Any Option granted under the option plan must
have an exercise price of at least 100% of the fair market value of a share of
Common Stock on the date of grant and must expire no later than five years from
that date. No Options may be exercisable on terms more favorable than 25% annual
increments beginning on the first anniversary of the date of grant. The
aggregate fair market value (determined at the time of grant) of the shares of
Common Stock with respect to which Options are exercisable for the first time by
a participant during any calendar year (under all plans of the Company and its
subsidiaries) may not exceed $100,000.
ADJUSTMENTS
The Committee will make appropriate adjustments to the number of shares
authorized under the Option Plan, the number and class of shares issued upon
exercise of an Option and/or the Option price in the event of any stock
dividend, stock split, reclassification or a similar change in capitalization or
any merger, consolidation or sale of assets of the Company.
AMENDMENT OR TERMINATION
The Board of Directors may amend or terminate the Option Plan, provided
that no such action may adversely affect Options previously granted under the
Option Plan. In addition, the Board must obtain shareholder approval in order to
(a) change the number of shares available for grant under the Option Plan; (b)
extend the duration of the Option Plan; (c) increase the maximum terms of
Options under the Option Plan; (d) decrease the exercise price below the par
value of the Common Stock; or (e) change the class of key employees eligible to
participate in the Option Plan.
14
<PAGE> 17
TAX ASPECTS OF OPTIONS GRANTED UNDER THE OPTION PLAN
The following discussion is intended to summarize briefly the general
principles of Federal income tax law applicable to each Option granted under the
Option Plan. A recipient of an Option will not recognize taxable income upon
either the grant or exercise of the Option. The option holder will recognize
long-term capital gain or loss on a disposition of the share of Common Stock
acquired upon exercise of an Option, provided the option holder does not dispose
of those shares of Common Stock within two years from the date the Option was
granted or within one year after the shares of Common Stock were transferred to
such option holder (a "disqualifying disposition"). Currently, for regular
Federal income tax purposes, long-term capital gain is taxed at a maximum rate
of 28%, while ordinary income may be subject to a maximum rate of 39.6%. If the
option holder satisfies both of the foregoing holding periods, then the Company
will not be allowed a deduction by reason of the grant or exercise of an Option.
As a general rule, if the option holder disposes of the shares of Common
Stock in a disqualifying disposition, the gain recognized will be taxed as
ordinary income to the extent of the differences between (a) the lesser of the
fair market value of the shares of Common Stock on the date of exercise or the
amount received for the shares of Common Stock in the disqualifying disposition,
and (b) the adjusted basis of the shares of Common Stock, and the Company will
be entitled to a deduction in that amount. The gain (if any) in excess of the
amount recognized as ordinary income on a disqualifying disposition will be
long-term or short-term capital gain, depending on the length of time the option
holder held the shares of Common Stock prior to the disposition.
The amount by which the fair market value of a share of Common Stock at the
time of exercise exceeds the exercise price will be included in the computation
of such option holder's "alternative minimum taxable income" in the year the
option holder exercises the Option. Currently, the alternative minimum tax rate
is 24%. If an option holder pays alternative minimum tax with respect to the
exercise of an Option, the amount of such tax paid will be allowed as a credit
against regular tax liability in subsequent years. The option holder's basis in
the shares of Common Stock for purposes of the alternative minimum tax will be
adjusted when income is included in alternative minimum taxable income.
RECOMMENDATION OF THE BOARD OF DIRECTORS
Approval of Proposal 3 requires the affirmative vote of a majority of the
outstanding shares of Common Stock represented at the meeting and entitled to
vote. The Board of Directors recommends that you vote FOR approval of the Option
Plan. All properly executed proxies received by the Company, unless marked to
the contrary or revoked, will be so voted.
15
<PAGE> 18
PROPOSAL 4
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors, upon the recommendation of the Audit Committee, has
appointed Deloitte & Touche LLP to serve as auditors for the Company during the
ensuing year. Unless otherwise directed, the proxy will be voted in favor of the
ratification of such appointment. Although this appointment is not required to
be submitted to a vote by shareholders, the Board of Directors believes it
appropriate as a matter of policy to request that shareholders ratify the
appointment. If shareholder ratification is not received, the Board of Directors
will reconsider the appointment.
Deloitte & Touche LLP has served as auditors for the Company since 1976.
It is expected that a representative of the auditors will be present at the
Annual Meeting with the opportunity to make a statement if he or she desires to
do so and will also be available to respond to appropriate questions at the
meeting.
TRANSACTION OF OTHER BUSINESS
The Board of Directors is not aware of any other matters which are to be
presented at the meeting. However, if any other matters should properly come
before the meeting, it is the intention of the persons named in the enclosed
proxy to vote in accordance with the best judgment of a majority of them on the
matters presented.
DEADLINE FOR SHAREHOLDER PROPOSALS--1997 MEETING
A proposal that a shareholder intends to present at the 1997 Annual Meeting
can be considered for inclusion in the proxy materials for that meeting only if
received in writing by the Company at its principal office on or before February
17, 1997.
ANNUAL REPORT
The Company's annual report to shareholders for the fiscal year ended March
31, 1996, accompanies or preceded this proxy solicitation, but the report is not
incorporated in this proxy statement and is not deemed to be a part of the proxy
solicitation materials.
By Order of the Board of Directors
Law.Block Sig
LAWRENCE BLOCK, Secretary
June 17, 1996
16
<PAGE> 19
EXHIBIT A
VERSA TECHNOLOGIES, INC.
1996 EMPLOYEE STOCK PURCHASE AND PAYROLL SAVINGS PLAN
1. Purpose. The Plan is designed to encourage savings by Eligible Employees
of the Company and its Subsidiaries, and to give those employees an opportunity
to acquire Stock of the Company on an advantageous basis over a 24-month period.
To accomplish these objectives, Eligible Employees will be given an
opportunity to authorize Periodic Payroll Savings Deductions which will be
credited to a Payroll Savings Account under the Plan and earn interest. The
Adjusted Balance of the Payroll Savings Account may be applied to the purchase
of Stock of the Company or withdrawn in cash by the Participant, both as
provided below.
2. Definitions. Unless otherwise required by the context, when used in the
Plan, the following words and phrases shall have the meanings set forth below:
(a) "Adjusted Balance" means the balance in a Participant's Payroll
Savings Account (as adjusted periodically to account for (i) credits of
Periodic Payroll Savings Deductions, payments following a Temporary
Termination pursuant to Section 4(d)(i) of the Plan and the accrual of
interest, and (ii) debits for purchases of shares of Stock or voluntary
withdrawals).
(b) "Base Compensation" means an Eligible Employee's annual base
compensation rate as of May 17, 1996. In the case of an Eligible Employee
compensated on an hourly basis, the annual base compensation rate shall
equal the product of the Eligible Employee's hourly rate in effect on May
17, 1996 times the number of hours in his or her normal scheduled work week
(up to a maximum of 40) times 52.
(c) "Board of Directors" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Company" means Versa Technologies, Inc., a Delaware corporation.
(f) "Designated Representative of the Company" means the person or
persons appointed by the Company to accept communications from Participants
under the Plan.
(g) "Effective Date of the Plan" means May 17, 1996.
(h) "Eligible Employee" means (subject to the limitations provided in
Section 20 of the Plan) a person who, on the Effective Date of the Plan, is
a regular full-time employee of the Company, its divisions or Subsidiaries
and who has been so employed since April 1, 1996. A person shall be
considered a regular full-time employee for purposes of this definition if
he or she is customarily employed for more than 20 hours per week and more
than five months per calendar year. Officers of Versa Technologies, Inc.
and presidents of its operating divisions shall not be eligible to
participate in the Plan.
(i) "Exercise an Option" means electing to purchase shares of Stock
pursuant to the provisions of the Plan.
(j) "Minimum Exercisable Option" means an Option for the whole number
of shares of Stock equal to $500 divided by the Per Share Option Price,
subject to adjustment as provided in Section 11 of the Plan.
(k) "Option" means the right to purchase a specified number of shares
of Stock as set forth in and subject to the provisions of the Plan.
(l) "Option Period" means the period beginning on the Effective Date
of the Plan and ending at 5:00 p.m. on January 22, 1999.
A-1
<PAGE> 20
(m) "Participant" means an Eligible Employee who has directed the
Company to make periodic Payroll Savings Deductions from his or her
compensation and credit amounts so deducted to his or her Payroll Savings
Account as provided in Section 4 of the Plan.
(n) "Payroll Savings Account" means the record of money held by the
Company for a Participant pursuant to the provision of the Plan derived
from Periodic Payroll Savings Deductions, payments following a Temporary
Termination pursuant to Section 4(d)(i) of the Plan and interest accrued
thereon.
(o) "Payroll Savings Period" means (i) with respect to an Eligible
Employee compensated on an hourly basis, the 104-week period beginning with
the first day of the payroll period which includes January 1, 1997; and
(ii) with respect to an Eligible Employee compensated on a salaried basis,
the two-year period beginning on January 1, 1997.
(p) "Per Share Option Price" means ninety percent (90%) of the closing
price of the Stock as reported by the NASDAQ/NMS system (rounded, if
necessary, to the next higher whole cent) on the Effective Date of the
Plan.
(q) "Periodic Payroll Savings Deductions" means the periodic
deductions made from the compensation of a Participant and credited to his
or her Payroll Savings Account pursuant to the Participant's direction.
(r) "Plan" means the Versa Technologies, Inc. 1996 Employee Stock
Purchase and Payroll Savings Plan as set forth herein and amended from time
to time.
(s) "Principal Executive Offices" means the offices of the Company
located at 9301 Washington Avenue, Sturtevant, Wisconsin 53177.
(t) "Stock" means the $.01 par value common stock of the Company.
(u) "Subsidiaries" means the wholly-owned subsidiaries of the Company,
Moxness Products, Inc. and its wholly owned subsidiary Moxness
Thermoplastics, Inc., Lovdahl Manufacturing, Milwaukee Cylinder and its
wholly owned subsidiary Power Gear, and Mox-Med, Inc. and any wholly-owned
subsidiary hereafter acquired or created by the Company or any of its
Subsidiaries.
(v) "Termination Date of the Plan" means January 22, 1999 or such
earlier time that the Plan is terminated by the Board of Directors.
(w) "Temporary Termination" means the cessation of employment of a
Participant with the Company and all Subsidiaries under circumstances
making it likely, in the judgment of the Company determined at the date of
such cessation, that the cessation will not be permanent, including but not
limited to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or authorized leave of absence, but not
including any circumstance in which the Participant quits or is discharged
for any reason.
3. Granting of Option and Basis of Participation. As of the Effective Date
of the Plan, each Eligible Employee is hereby granted the Option to purchase
shares of Stock at the Per Share Option Price. The Option hereby granted to an
Eligible Employee will entitle him or her to purchase the lesser of 500 shares
of Stock or the whole number of shares of Stock equal to 10% of the Eligible
Employee's Base Compensation divided by the Per Share Option Price. Within a
reasonable time after the Effective Date of the Plan, the Company shall mail or
deliver to each Eligible Employee a copy of the Plan and a certificate
evidencing the granting of such Option and the terms and provisions thereof.
The total number of shares of Stock authorized for use in the Plan is
125,000; provided that if any time a lesser number of shares of Stock is subject
to Options hereunder, the number of shares of Stock so authorized shall be
deemed to be the number then subject to Options.
4. Participation, Savings Opportunities and Payroll Deductions.
(a) An Eligible Employee will become a Participant if, on or after
December 1, 1996 and prior to 5:00 p.m. on December 16, 1996, he or she
completes, signs and delivers to the Designated
A-2
<PAGE> 21
Representative of the Company at its Principal Executive Offices a request,
directing the Company to make specified uniform Periodic Payroll Savings
Deductions from his or her compensation and credit amounts so deducted to
his or her Payroll Savings Account. Such request will not be valid unless
the sum of the aggregate anticipated Periodic Payroll Savings Deductions
during the Payroll Savings Period equals or exceeds the product of the
number of shares of Stock subject to the Minimum Exercisable Option times
the Per Share Option Price; provided that such sum shall not exceed the
product of the number of shares of Stock subject to the Participant's
Option times the Per Share Option Price.
(b) If the number of shares of Stock subject to a Participant's Option
is reduced pursuant to Section 6(b)(i) of the Plan, the amount of the
authorized Periodic Payroll Savings Deductions for such Participant shall,
if necessary, be deemed reduced to a uniform amount that makes the sum of
the aggregate anticipated Periodic Payroll Savings Deductions during the
Payroll Savings Period equal to the product of the adjusted number of
shares of Stock then subject to the Participant's Option times the Per
Share Option Price.
(c) If the pay period of a Participant is changed during the Payroll
Savings Period, the amount of the Participant's Periodic Payroll Savings
Deductions shall be adjusted so that the predetermined Periodic Payroll
Savings Deduction is a uniform amount necessary to make the sum of the
Adjusted Balance then in the Participant's Payroll Savings Account and
anticipated Periodic Payroll Savings Deduction during the balance of the
Payroll Savings Period equal to the number of shares of Stock subject to
the Participant's Option times the Per Share Option Price.
(d) If a Participant returns to the employ of the Company or any
Subsidiary after incurring a Temporary Termination, then within 30 days
after such return to employment, the Participant may (i) pay to the Company
an amount up to the sum of all Periodic Payroll Savings Deductions which
would have been made during such period of Temporary Termination, which
amount shall be credited to his or her Payroll Savings Account; or (ii)
direct the Designated Representative of the Company to increase the amount
of his or her subsequent Periodic Payroll Savings Deductions by the uniform
amount necessary to make up to the sum of all Periodic Payroll Savings
Deductions which would have been made during such period of Temporary
Termination.
(e) The Participant may, at any time, direct the Designated
Representative of the Company to reduce the amount of future Periodic
Payroll Savings Deductions to any uniform amount; provided that such
reduction may not bring such deductions below the amount needed to make the
sum of the Adjusted Balance then in the Participant's Payroll Savings
Account and anticipated Periodic Payroll Savings Deductions during the
balance of the Payroll Savings Period equal to the product of the Minimum
Exercisable Option times the Per Share Option Price.
5. Deductions, Manner of Holding Funds and Interest.
(a) Subject to adjustment, as provided elsewhere in the Plan, Periodic
Payroll Savings Deductions shall be made in equal installments over the
Participant's regular pay periods falling within the Payroll Savings
Period. All Periodic Payroll Savings Deductions made by the Company
hereunder shall be held, unsegregated, in such manner as the Company
determines.
(b) A Participant may at any time terminate his or her participation
hereunder and withdraw all of the Adjusted Balance of his or her Payroll
Savings Account. (No partial withdrawals are permitted.) Such request shall
be in writing and directed to the Designated Representative of the Company
at its Principal Executive Offices. Amounts requested hereunder shall be
paid within 15 days after the end of the months in which the request was
received, or as soon after said 15th day as reasonably possible.
(c) The Company will credit the Payroll Savings Account of each
Participant on the last day of each December, March, June and September
during the Payroll Savings Period with interest compounded quarterly at the
rate of 3.0 percent per annum on the average Adjusted Balance in such
Participant's Payroll Savings Account as of the first day of such month and
the preceding two months. For purposes of the foregoing computation,
deposits of Periodic Payroll Savings Deductions to a Participant's Payroll
Savings Account shall be deemed made on the last day of the applicable pay
period.
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<PAGE> 22
No interest will accrue for the quarter in which a participant terminates
his or her participation in the Plan and withdraws the Adjusted Balance of
his or her Payroll Savings Account. In no event will interest accrue to a
Payroll Savings Account after December 31, 1998.
(d) The Company shall furnish each Participant with a statement
showing the Adjusted Balance of his or her Payroll Savings Account within
15 days after the end of the months enumerated in subsection (c) next
above.
6. Reduction of Shares Subject to Option.
(a) The number of shares of Stock subject to a Participant's Option
shall be reduced to the Exercisable Amount:
(i) Thirty days after the Participant returns to the employ of the
Company or any Subsidiary following a Temporary Termination, if the
Participant does not make the payment or adjustment provided in Section
4(d) of the Plan;
(ii) Upon the death or termination of employment of the Participant
with the Company and all Subsidiaries, other than a Temporary
Termination;
(iii) If the Participant reduces the amount of his or her Periodic
Payroll Savings Deductions, pursuant to Section 4(e) of the Plan; or
(iv) If at any time the sum of accumulated and anticipated Periodic
Payroll Savings Deductions during the Payroll Savings Period is
projected to be less than the product of the number of shares of Stock
subject to the Participant's Option times the Per Share Option Price.
For purposes of this subsection, "Exercisable Amount" with respect to a
Participant's Options means a number of shares of Stock equal to the sum
of the Adjusted Balance in the Participant's Payroll Savings Account and
anticipated Periodic Payroll Savings Deductions during the balance of
the Payroll Savings Period divided by the Per Share Option Price.
(b) The number of shares of Stock subject to a Participant's Option
shall be reduced as specified in the following circumstances:
(i) If, as of 5:00 p.m. on December 16, 1996 the total number of
shares of Stock subject to all Options granted hereunder exceeds the
number of Shares of Stock authorized for the Plan, as set forth in
Section 3 of the Plan, such excess shares shall be allocated as a
percentage reduction of the shares of Stock subject to each
Participant's Option whose Option is in excess of the Minimum
Exercisable Option. The reduction percentage shall be determined by
dividing the number of excess shares by the total number of shares of
Stock subject to all Participants' Options whose Options are in excess
of the Minimum Exercisable Option; provided, however, that any Option
thus reduced below the level of a Minimum Exercisable Option shall be
restored to the level of a Minimum Exercisable Option; and the total
number of shares thus required to restore Options to the level of a
Minimum Exercisable Option shall be reallocated as a further pro rata
reduction of Options not so reduced to the Minimum Exercisable Option
level. This reallocation process will be repeated to the extent
necessary to maintain all Options at or above the Minimum Exercisable
Option level, so that, except for eliminating fractional shares of Stock
subject to Option as provided in Section 22, the total number of shares
of Stock subject to Options shall equal the total number of shares
authorized for the Plan.
(ii) Upon the exercise of an Option granted hereunder as to less
than all of the shares of Stock subject to such Option, the number of
shares of Stock subject to such Option shall be reduced by the number of
shares of Stock purchased on such exercise.
(c) In the event of a reduction under either (a) or (b), the Company
shall change its records to reflect the reduction and may demand that the
Participant return any certificate previously delivered to him to represent
his or her Option; provided that if the Participant has returned such
certificate, the
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<PAGE> 23
Company shall amend and return the certificate or issue a new certificate
accurately reflecting the number of shares of Stock then subject to the
Participant's Options.
7. Expiration of Option and Termination of Participation.
An Option granted hereunder shall expire and the participation of a
Participant hereunder shall terminate, in any of the following events:
(a) Thirty days after a termination of employment by a Participant
with the Company and all Subsidiaries other than a Temporary Termination or
death;
(b) Ninety days after the death of a Participant which occurs while he
or she is employed, during the 30-day period referred to in (a) next above,
or during a Temporary Termination;
(c) On the exercise of an Option as to all shares of Stock subject to
the Option;
(d) If the number of shares of Stock subject to the Participant's
Option falls below the Minimum Exercisable Option;
(e) If during the Payroll Savings Period, he or she requests
withdrawal of the amount credited to his or her Payroll Savings Account; or
(f) Notwithstanding any other provision of the Plan, at 5:00 p.m. on
January 22, 1999, or on the earlier Termination Date of the Plan.
Upon the termination of participation of a Participant hereunder, Periodic
Payroll Savings Deductions shall cease as to the Participant and, as soon
as practicable thereafter, the Adjusted Balance in the Participant's
Payroll Savings Account will be paid to the Participant.
8. Exercise of Option.
(a) An Option granted under the Plan may be exercised at any of the
following times:
(i) Between January 2, and January 21, 1998; and
(ii) Between January 4, and January 22, 1999
(iii) If the Participant's employment with the Company and all
Subsidiaries terminates during the Option Period, under circumstances
other than a Temporary Termination or death, then during the period
beginning on the date of his or her termination of employment and ending
on the earlier of the 30th day following such termination or 5:00 p.m.
on January 22, 1999.
(iv) If a participant dies during the Option Period while employed,
during the 30-day period referred to in (iii) next above, or during a
Temporary Termination, then during the period beginning with the date of
death and ending on the earlier of 90 days following his or her death or
5:00 p.m. on January 22, 1999.
(b) During each permitted exercise period, the Participant, or if
applicable his or her estate or the person acquiring the right to exercise
the Option upon his or her death by bequest or inheritance, may exercise
the Option in whole or in part, but in no event for a number of shares of
Stock less than the Minimum Exercisable Option or greater than the number
of shares of Stock equal to the Adjusted Balance in his or her Payroll
Savings Account on the permitted exercise date or, if earlier, his or her
date of termination of employment (other than a Temporary Termination)
divided by the Per Share Option Price.
(c) A Participant, or other person specified above, shall Exercise an
Option only by delivering written notification of such exercise to the
Designated Representative of the Company at its Principal Executive
Offices. An exercise will only be effective if it is received at or before
5:00 p.m. on the last day of the period during which the Option is
exercisable. An exercise delivered prior to that deadline will not become
effective until such time, and until effective may be revoked by delivery
of a written revocation of exercise to the Designated Representative of the
Company at its Principal Executive Offices.
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<PAGE> 24
(d) When the Exercise of all or a portion of an Option becomes
effective, the Participant's Payroll Savings Account will be debited in an
amount equal to the product of the number of shares of Stock subject to the
exercise times the Per Share Option Price. As soon as reasonably possible
following such exercise, a certificate representing the shares of Stock
purchased, registered in the name of the Participant (or other permitted
purchaser), shall be delivered to the Participant (or such other
purchaser).
(e) Any portion of the Adjusted Balance remaining in a Participant's
Payroll Savings Account after January 22, 1999 shall be paid to him or her
as soon as possible thereafter.
9. Transferability. No Option may be transferred, assigned, pledged, or
hypothecated (whether by operation of law or otherwise), except as provided by
will or the applicable laws of descent or distribution, and no Option shall be
subject to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation, other disposition of the Option, or levy of
attachment or similar process upon the Option not specifically permitted herein
shall be null and void and without effect. An Option may be exercised only by
the Participant during his or her lifetime, or by his or her estate of the
person who acquires the right to exercise such Option upon his or her death by
bequest or inheritance.
A Participant may not assign, transfer, pledge, or hypothecate in any way
the funds credited to his or her Payroll Savings Account. Any such attempted
assignment, transfer, pledge, hypothecation, or other disposition of amounts
credited to his or her Payroll Savings Account shall be null and void and
without effect.
10. Employment of Eligible Employees. Neither the Plan nor its operation
nor the granting of an Option under the Plan shall confer upon an Eligible
Employee any right to continue to the employ of the Company or of its
Subsidiaries, nor shall they interfere in any way with the right of any Eligible
Employee to terminate his or her employment at any time.
11. Adjustment Provisions.
(a) If:
(i) any recapitalization, reclassification, split-up or
consolidation of Stock is effected;
(ii) The outstanding shares of Stock are exchanged, in connection
with a merger or consolidation of the Company or a sale by the Company
of all its assets for a different number or class of shares of stock or
other securities of the Company or for shares of the stock or other
securities of any other corporation; or
(iii) New, different or additional shares or other securities of
the Company or of another corporation are received by the holders of
Stock;
then the Board of Directors shall make appropriate adjustments to:
(i) The number and class of shares or other securities that may be
issued pursuant to the exercise of an Option;
(ii) The Per Share Option Price;
(iii) The Minimum Exercisable Option; and/or
(iv) The number of shares of Stock authorized for the Plan.
In adjusting the number of shares, the Committee shall drop any
fractional shares from the final calculation of shares of Stock subject
to an Option. In adjusting the Per Share Option Price, such price shall
be rounded if necessary to the next higher whole cent.
(b) Upon the dissolution of liquidation of the Company, or, if the
Board of Directors so determines, upon a merger or consolidation of the
Company, any Option granted hereunder shall expire as of the effective date
of the transaction; provided, however, that the Board of Directors shall
give at least 30 days prior written notice of such expiration and each
Participant's Option shall be exercisable, after receipt of such written
notice and prior to such expiration but only if the Adjusted Balance in the
Payroll Savings
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<PAGE> 25
Account of such Participant equals or exceeds the product of the Minimum
Exercisable Option times the Per Share Option Price and the Participant
exercises his or her Option for a number of shares of Stock equal to or
greater than the number of shares of Stock subject to the Minimum
Exercisable Option. The Adjusted balance of a Participant's Payroll Savings
Account shall be debited with the amount of any purchase made pursuant to
this subsection (b) and each Participant shall be paid the Adjusted
Balance, if any, in his or her Payroll Savings Account remaining after any
such debit as soon as practicable after the effective date of the
transaction which caused his or her Option to expire.
(c) Adjustments under subsection (a) shall be made according to the
sole discretion of the Board of Directors, and its decision shall be
binding and conclusive.
(d) Except as provided in subsections (a) and (b) the issuance by the
Company of shares of stock of any class, or securities convertible into
shares of stock of any class shall not affect an Option.
12. Additional Conditions. Options granted and shares of Stock issued under
the Plan may be granted or issued subject to such uniform conditions (not
inconsistent with Section 423 of the Code), in addition to those specifically
provided in the Plan, as the Board of Directors may impose.
13. Amendment of Plan. The Board of Directors may, at any time, amend the
Plan, but except if necessary for compliance with Section 423 of the Code or
applicable state or federal securities laws, no such amendment shall adversely
affect Options previously granted or rights accrued under the Plan or increase
the total number of shares which may be purchased under the Plan to an amount in
excess of the authorized amount.
14. Securities Laws. Implementation of the Plan by the Company, including
delivery of certificates for Options or shares of Stock by the Company, may be
deferred until any required registration or qualification of the Plan, the
Options, or the Stock under any applicable federal or state securities or other
law is effected, or other action is taken in compliance with any such law and
the Company will use its best efforts to effect such registration or take such
other action.
15. Forms. Every request, direction, revocation or election authorized or
required by the Plan shall be in such form as shall be determined by the Board
of Directors. Any such request, direction, revocation or election shall be
deemed delivered to the Company: (a) on the date it is personally delivered to
the Designated Representative of the Company at its Principal Executive Offices,
or (b) one business day after it is sent by registered or certified mail,
postage prepaid, addressed to such Representative at such Offices.
16. Applicable Law. All questions pertaining to the validity, construction
and administration of the Plan shall be determined in conformity with the laws
of Wisconsin to the extent not inconsistent with Section 423 of the Code.
17. Rights as Shareholders. Eligible Employees shall not, by reason of the
Plan or any Option granted pursuant to it, have any rights of a shareholder of
the Company, except with respect to shares of Stock acquired pursuant to
exercise of an Option under the Plan.
18. Administration of the Plan. The Plan shall be administered by the Board
of Directors. However, the Board of Directors may from time to time delegate all
or any part of its functions under the Plan to a committee designated by it. All
questions of interpretation of the Plan and the application of its provisions,
and all questions of fact, shall be determined from time to time by the Board of
Directors or such committee. All such determinations of the Board of Directors
or such committee made in good faith shall be final and binding, to the extent
not prohibited by law, upon all parties claiming rights under the Plan.
19. Plan Qualification. The Company intends that Options granted and Stock
issued under the Plan shall be treated for all purposes as granted and issued
under an Employee Stock Purchase Plan within the meaning of Section 423 of the
Code. Any requirements of the Code required in the Plan under said Section are
hereby included as fully as though set forth in the Plan at length.
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<PAGE> 26
20. Limitation on Options. Notwithstanding any other provisions of the
Plan:
(a) No employee shall be granted an Option under the Plan if,
immediately after the Option was granted, the employee would own stock
possessing 5% or more of the total combined voting power or value of all
classes of stock of the Company or of its parent or any of its
subsidiaries. For purposes of this subsection (a), stock ownership of an
individual shall be determined under the rules of Section 424(d) of the
Code and stock which the employee may purchase under outstanding Options
shall be treated as stock owned by the employee.
(b) No employee shall be granted an Option under the Plan which
permits his or her rights to purchase stock under all employee stock
purchase plans (as defined in Section 423 of the Code) of the Company and
its parent or subsidiaries to accrue at a rate which exceeds $25,000 of
fair market value of such stock (determined at the time of the grant of
such Option) for each calendar year in which such Option is outstanding at
any time.
21. Shareholder Approval. The plan is adopted subject to the condition that
it be approved by the shareholders of the Company at the Annual Meeting of
shareholders scheduled to be held in July, 1996. The Plan shall be null and void
and of no effect if not so approved by the shareholders of the Company.
22. Elimination of Fractional Shares. Unless otherwise provided, if under
any provision of the Plan which requires a computation of the number of shares
of Stock subject to an Option, the number so computed is not a whole number of
shares of Stock, such number of shares of Stock shall be rounded down to the
next whole number.
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APPENDIX 2
VERSA TECHNOLOGIES, INC.
1992 EMPLOYEE INCENTIVE STOCK OPTION PLAN AS AMENDED
---------------
ARTICLE I
1.1 Purpose. The Purpose of the Plan is to promote the long-term success of
Versa Technologies, Inc. by providing financial incentives to key employees who
are in positions to make significant contributions toward such success. The Plan
is designed to attract individuals of outstanding ability to employment with
Versa Technologies, Inc. and to encourage key employees to continue employment
with Versa Technologies, Inc. and to render superior performance during such
employment.
1.2 Definitions. As used herein, the following definitions shall apply:
(a) "Board of Directors" means the Board of Directors of the Company
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Personnel, Compensation and Stock Option
Committee of the Board of Directors, which committee shall be composed of
not less than three directors as the Board of Directors may designate from
time to time. Notwithstanding anything to the contrary contained herein, no
member of the Board of Directors may exercise discretion with respect to,
or participate in, the administration of the Plan if, at any time while
serving on the Committee or within one year prior to such service on the
Committee he or she has received Common Stock, Options, or any other
derivative security pursuant to the Plan, or any other plan of the Company
or any Parent or Subsidiary, as to which such director exercises any
discretion.
(d) "Common Stock" means the common stock of the Company, par value
$.01 per share or such other class of shares or other securities as to
which the provisions of the Plan may be applicable.
(e) "Company" means Versa Technologies, Inc.
(f) "Fair Market Value" of each share of the Common Stock shall be:
(i) if the Common Stock is listed on the NASDAQ/NMS or a national
securities exchange at the time of granting of an Option, the average of
the high and low price, rounded up to the nearest 1/10th cent, of the
Common Stock on such system or exchange on the date such Option is
granted, or if there were no reported trades on such date, the closing
price on the next prior date on which a trade did occur; or
(ii) if the Common Stock is not listed on a national securities
exchange or system at the time of the granting of an Option, the mean
between the closing bid and asked price on said date, or if there was no
bid and asked price on said date, then the next prior business day on
which there was a bid and asked price.
(g) "Grant Date", as used with respect to a particular Option, means
the date as of which such Option is granted by the Committee pursuant to
the Plan.
(h) "Grantee" means the employee of the Company, its Parent or any
Subsidiary, to whom an Option is granted by the Committee pursuant to the
Plan.
(i) "Option" means an option, granted by the Committee pursuant to
Article II.
(j) "Option Period" means the period beginning on the Grant Date and
ending on the date immediately preceding the tenth anniversary of the Grant
Date or at such earlier date provided under Article II.
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<PAGE> 28
(k) "Parent" means any present or future corporation which would be a
"parent corporation" of the Company under Subsections 424(e) and (g) of the
Code.
(l) "Plan" means the Versa Technologies Inc. 1992 Employee Stock
Option Plan, as amended, as set fourth herein and as may be further amended
from time to time.
(m) "Subsidiary" means any present or future corporation which would
be a "subsidiary corporation" of the Company as defined in Subsections
424(f) and (g) of the Code.
(n) "Total and Permanent Disability", shall mean that an individual
(i) is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months (all within the meaning
of Section 22(e)(3) of the code); and (ii) has satisfied any requirements
imposed by the Committee.
1.3 Aggregate Limitation.
(a) The aggregate number of shares of Common Stock with respect to
which Options may be granted shall not exceed 500,000 shares subject to
adjustment in accordance with Section 3.1.
(b) Shares of Common Stock to be delivered by the Company upon the
exercise of Options shall be issued from the Company's authorized but
unused share of treasury shares.
(c) In the event that any Option expires, lapses or otherwise
terminates prior to being fully exercised, any shares of Common Stock
allocable to the unexercised portion of such Option may again be made
subject to an Option.
1.4 Administration of the Plan.
(a) The Plan shall be administered by the Committee, which shall have
the authority:
(i) To determine key employees of the Company, its Parent or any
Subsidiary to whom, and the times at which, Options shall be granted and
the number of shares of Common Stock to be subject to each Option,
taking into account the nature of the services rendered by the
particular employee, the employee's potential contribution to the
long-term success of the Company, its Parent or any Subsidiary, and such
other factors as the Committee in its discretion shall deem relevant;
(ii) to interpret the Plan and to establish rules and regulations
relating to it;
(iii) to prescribe the terms and provisions of the agreements for
the grant of Options; and
(iv) to make all other determinations necessary or advisable in
order to administer the Plan.
Notwithstanding the preceding provisions of this section, in no event
may any terms or provisions prescribed by the Committee or any other action
taken by the Committee be inconsistent with or prohibited by Section 422 of
the Code or regulations issued thereunder.
(b) All decisions of the committee upon questions concerning the Plan
or any Option shall be conclusive.
(c) A majority of the Entire Committee shall constitute a quorum and
the action of a majority of the members present at any meeting at which a
quorum is present shall be deemed the action of the Committee.
1.5 Eligibility for Awards. The Committee shall designate from time to time
the key employees of the Company, its Parent and any Subsidiary who are to be
granted Options. In no event may a member of the Committee be granted an Option.
1.6 Effective Date And Duration Of Plan. The Plan shall become effective
upon its adoption by the Board of Directors; provided, however, that the Plan
shall be approved by the holders of a majority of the shares of Common Stock
within 12 months of adoption. Any grant of an Option prior to approval of the
Plan by the shareholders of the Company is subject to said shareholder approval.
Unless previously terminated by
2
<PAGE> 29
the Board of Directors, no grant of an Option may be made under the Plan on or
after the tenth anniversary of the earlier of its adoption by the Board of
Directors or its approval by the shareholders of the Company; provided, however,
that the Plan and all Options granted thereunder prior to such tenth anniversary
shall remain in effect and subject to amendment and adjustment as herein
provided until they have been satisfied or terminated in accordance with the
terms of the Plan and the instruments evidencing the Options.
ARTICLE II
STOCK OPTIONS
2.1 Grant of Options. The Committee may, from time to time, subject to the
provisions of the Plan, grant Options to key employees to purchase shares of
common stock allotted in accordance with Section 1.3.
2.2 Options Requirement
(a) An Option shall be evidenced by a written instrument specifying
the number of shares of Common Stock that may be purchased by its exercise
and the Option Period, and containing such other terms and conditions
consistent with the Plan as the Committee shall determine.
(b) An Option shall not be granted on or after the tenth anniversary
of the date upon which the Plan was adopted by the Board of Directors or,
if earlier, the tenth anniversary of the date upon which the Plan was
approved by the shareholders of the Company.
(c) An Option, by its terms, shall not be exercisable after the
expiration of the Option Period or after such earlier date on which the
Option lapses.
(d) The Committee may provide, in the instrument evidencing an Option,
for the lapse of the Option prior to the expiration of the Option Period,
upon the occurrence of any event specified by the Committee. Unless
otherwise determined by the Committee in its sole discretion, the Option
shall lapse prior to the expiration of the Option Period, as follows:
(i) if a Grantee dies while employed by the Company or its Parent
or any Subsidiary, or after termination of employment under
circumstances described in subparagraph (ii) and prior to lapse as
specified in that subparagraph, the Option shall lapse at the expiration
of the twelve-month period which began on the date of death (but in no
event after the expiration of the Option Period);
(ii) if Grantee's employment with the Company or its Parent or
Subsidiary terminates on account of Total and Permanent Disability, as
defined in Section 1.2 of the Plan, and such termination has been
approved for purposes of the Plan by the Committee, the Option shall
lapse at the expiration of the twelve month period which began on the
date of termination of employment except as provided in subparagraph (i)
(but in no event after the expiration of the Option Period); or
(iii) if Grantee's employment with the Company or its Parent or any
Subsidiary terminates under any circumstances other than those set forth
in subparagraphs (i) and (ii) of this subparagraph (d) or if the
Grantee's employer ceases to be the Parent or a Subsidiary of the
Company, the Option shall lapse three months after such termination or
cessation (but in no event after the expiration of the Option Period).
The percentages of shares subject to an Option that are available for purchase
under subparagraph (h) shall be determined at the time of the Grantee's
termination of employment, regardless of whether the Option lapses on a later
date in accordance with this subparagraph (d).
(e) Subject to section 2.3 below, the Option price per share of Common
Stock shall be equal to the Fair Market Value of a share of Common Stock on
the Grant Date; but in no event shall such Option price be less than the
par value of such share.
(f) (i) An Option, by its terms, shall not be transferable other than by
will or the laws of descent and distribution and, during the Grantee's
lifetime, an Option shall be exercisable only by the Grantee.
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<PAGE> 30
(ii) Upon the Grantee's death, the Committee may permit that
Options be transferred to and exercised by legatees of the Grantee under
the Grantee's will, or by his executors, personal representatives or
distributees; provided, that the Committee determines that such transfer
and such exercise comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the rules
and regulations promulgated thereunder, applicable state securities
laws, the requirements of any stock exchange upon which the Common Stock
may then be listed, and the requirements of Section 422 of the Code and
regulations issued thereunder.
(g) A person electing to exercise an Option shall give written notice,
in such form as the Committee may require, of such election to the Company
and shall tender to the Company the full purchase price of the shares of
Common Stock for which the election is made. Payment of the purchase price
shall be made in cash or in such other form as the Company may approve,
including shares of Common Stock of the Company valued at the Fair Market
Value on the date of exercise of the Option.
(h) Except as provided in Section 3.1, the percentage of shares of
Common Stock subject to an Option that are available for purchase at a
particular time shall not be greater than that determined in accordance
with the following schedule:
<TABLE>
<CAPTION>
ANNIVERSARY OF PERCENTAGE OF SHARES
GRANT DATE UNDER GRANT AVAILABLE FOR PURCHASE
- --------------- -----------------------------------
<S> <C> <C>
1st.................................................. 25%
2nd.................................................. 50%
3rd.................................................. 75%
4th.................................................. 100%
</TABLE>
If the Grantee's employment with the Company, its Parent or any Subsidiary
terminates, the percentage of shares that are available for purchase pursuant to
the foregoing schedule shall be determined as of the date of the Grantee's
termination of employment, provided that the Committee, subject to paragraph (k)
below, may permit, in the instrument evidencing an Option, that the Option may
be exercised in full, without regard to the foregoing schedule, in the event the
Grantee's employment with the Company or its Parent or any Subsidiary terminates
on account of Total and Permanent Disability (and such termination is approved
for purposes of the Plan by the Committee), retirement on or after the normal
retirement date as defined in the defined benefit pension plan maintained by the
Company, its Parent or any Subsidiary under which the Grantee is then eligible
to receive benefits, or death.
(i) Each Option granted hereunder is intended to qualify as an
"incentive stock option" within the meaning of Section 422(b) of the Code.
(j) An Option shall not be granted to an individual who, on the Grant
Date, owns capital stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or of its
Parent or any Subsidiary unless the additional restrictions of Section 2.3
are also satisfied.
(k) The aggregate Fair Market Value (determined with respect to each
Option as of the time it is granted) of the shares of Common Stock with
respect to which Options under the Plan (or other time by a Grantee during
any calendar year shall not exceed $100,000.00, determined in accordance
with Section 422(d) of the Code.
2.3 Ten Percent Shareholder Rule. The limitation in Section 2.2(j) above
shall not apply if at the time the Option is granted, the Option price is at
least 110 percent of the Fair Market Value of the Common Stock subject to the
Option and the Option Period by the terms of the Option expires no later than
five years from the Grant Date of the Option.
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<PAGE> 31
ARTICLE III
GENERAL PROVISIONS
3.1 Adjustment Provisions
(a) If:
(i) any recapitalization, reclassification, split-up or
consolidation of Common Stock is effected;
(ii) the outstanding shares of Common Stock are exchanged, in
connection with a merger or consolidation of the company or a sale by
the Company of all of its assets for a different number or class of
shares of stock or other securities of the Company or for shares of
stock or other securities of any other corporation.
(iii) new, different or additional shares of other securities of
the Company or of another corporation are received by the holders of
Common Stock; or
(iv) any distribution is made to the holders of Common Stock other
than a cash dividend; then the Committee shall make appropriate
adjustments to:
(a) the number and class of shares of other securities that may
be issued or transferred pursuant to Options; and
(b) the purchase price to be paid per share under outstanding
Options.
In adjusting the number of shares, the Committee shall drop any fractional
shares from the final calculation of shares subject to an Option and shall
adjust the Option price per share by rounding up to the nearest 1/10th
cent.
(b) Upon the dissolution or liquidation of the Company, or, if the
Committee so determines, upon a merger or consolidation of the Company, the
Plan, together with any Options granted thereunder, shall terminate as of
the effective date of the transaction; provided, however, that the
Committee shall give at least 30 days prior written notice of such
termination to all Grantees and all Options previously granted shall be
exercisable, to the extent otherwise exercisable without regard to
subsection (h) of Section 2.2, after receipt of such written notice and
prior to such termination.
(c) Adjustments under subsection (a) shall be made according to the
sole discretion of the Committee, and its decision shall be binding and
conclusive.
(d) Except as provided in subsections (a) and (b), the issuance by the
Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect the Options.
3.2 Additional Conditions. Any shares of Common Stock issued or transferred
under any provision of the Plan may be issued or transferred subject to such
conditions, in addition to those specifically provided in the Plan, as the
Committee or Company may impose.
3.3 No Right to Employment. Nothing in the Plan or in any instrument
executed pursuant thereto shall confer upon any employee any right to continue
in the employ of the Company or its Parent or any Subsidiary or shall affect the
right of management to terminate the employment of any employee, with or without
cause.
3.4 Legal Restrictions. The Company will not be obligated to issue shares
of Common Stock or make any payment if counsel to the Company determines that
such issuance of payment would violate any law or regulation of any governmental
authority or any agreement between the company and any national securities
exchange upon which the Common Stock is listed. In connection with any stock
issuance or transfer, the person acquiring the shares shall, if requested by the
Company, give assurances satisfactory to counsel to the Company regarding
compliance with all legal requirements. The Company shall in no event be
obligated to take any affirmative action in order to cause the exercise of any
Option or the resulting delivery of shares of Common Stock by the Company to
comply with any law or regulation of any governmental authority.
5
<PAGE> 32
3.5 No Rights as Shareholders. No Grantee, and no beneficiary or other
person claiming through a Grantee, shall have any interest in any shares of
Common Stock allocated for the purposes of the Plan or subject to any Option
until such shares of Common Stock shall have been transferred to the Grantee or
such person. Furthermore, the existence of the Options shall not affect the
right or power of the Company or its shareholders to make adjustments,
recapitalizations, reorganizations or other changes in the Company's capital.
3.6 Withholding Taxes. Upon the exercise of any Option, the Company shall
have the right to require the Grantee to remit to the Company an amount
sufficient to satisfy all federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for shares of Common
Stock.
Upon the disposition of any Common Stock acquired by the exercise of an
Option, the Company shall have the right to require the Grantee to remit to the
Company an amount sufficient to satisfy all federal, state and local withholding
tax requirements as a condition to the registration of the transfer of such
Common Stock on its books.
3.7 Termination and Amendment of the Plan. The Board of Directors, without
further action on the part of shareholders of the Company, may from time to time
alter, amend or suspend the Plan or any Option granted thereunder or may
terminate the Plan. However, no amendment, without approval of the shareholders
of the Company shall (i) expect as provided in Section 3.1, materially increase
the total number of shares of Common Stock that may be issued under the Plan, or
increase the amount or type of benefits that may be granted under the Plan, (ii)
materially change the class of employees eligible under the Plan, or (iii)
materially increase benefits under the Plan to any employee who is subject to
the restrictions of Section 16 of the Security Exchange Act of 1934. No action
taken by the Board of Directors pursuant to this Section 3.7 may, with or
without the approval of the shareholders of the Company, materially and
adversely affect any outstanding Option without the consent of the Grantee.
3.8 Governing Law. The Plan and all rights or obligations thereunder shall
be governed by the laws of the State of Wisconsin, to the extent that such laws
are not preempted by the laws of the United States.
6
<PAGE> 33
VERSA TECHNOLOGIES, INC.
9301 Washington Avenue
P.O. Box 085012
Racine, Wisconsin 53408-5012
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Herman B. McManaway and Morris W. Reid as Proxies,
each with the power to appoint his substitute, and authorizes each of them to
represent and vote, as designated below, all the shares of Common Stock of
Versa Technologies, Inc. held of record by the undersigned on May 31, 1996 at
the annual meeting of shareholders to be held on July 23, 1996 or any
adjournment thereof.
1. Election of Directors
James E. Mohrhauser // FOR // WITHHOLD AUTHORITY
Denis H. Carroll // FOR // WITHHOLD AUTHORITY
2. Approval of the Versa Technologies, Inc. 1996 Employee Stock Purchase and
Payroll
Savings Plan // FOR // AGAINST // ABSTAIN
3. Amendment of the 1992 Versa Technologies, Inc. Employee Incentive Stock
Option Plan
// FOR // AGAINST // ABSTAIN
4. Proposal to ratify the appointment of Deloitte & Touche LLP as independent
auditors for the fiscal year ending March 31, 1997
// FOR // AGAINST // ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting
// FOR // AGAINST // ABSTAIN
(Continued, and to be signed on other side)
(Continued from other side)
<PAGE> 34
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3, AND 4. THIS
PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF BOTH NOMINEES LISTED IN PROPOSAL 1, FOR PROPOSAL 2, FOR
PROPOSAL 3, FOR PROPOSAL 4, AND ON OTHER MATTERS WHICH MAY PROPERLY COME BEFORE
THE MEETING, IN ACCORDANCE WITH THE BEST JUDGMENT OF THE NAMED PROXIES.
Please sign exactly as name appears on the left. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name, executed by the president
or other authorized officer. If a partnership, please sign in partnership name
by authorized person.
_________________________________
Signature
_________________________________
Signature if held jointly
Dated________________________, 1996
PLEASE MARK, SIGN, DATE AND RETURN
PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
.
