<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended February 28, 1994 Commission File No. 1-8862
MARK IV INDUSTRIES, INC.
__________________________________________________________________________
(Exact name of Registrant as specified in its charter)
Delaware 23-1733979
______________________________ ___________________________________
(State or other jurisdiction of (IRS employer Identification number)
incorporation or organization)
501 John James Audubon Pkwy., P.O. Box 810, Amherst, NY 14226-0810
_______________________________________________________ __________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (716) 689-4972
Securities registered pursuant to Section 12(b) of the Act:
Name of exchange on
Title of Class which registered
______________ ___________________
Common Stock, $.01 par value New York Stock Exchange
6-1/4% Convertible Subordinated
Debentures due February 15, 2007 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X . No .
The aggregate market value of the voting stock of the Registrant held by
non-affiliates of the Registrant based on the closing price of the Common
Stock on May 18, 1994 on the New York Stock Exchange was $564,880,881.
As of May 18, 1994, the number of outstanding shares of Registrant's
Common Stock, $.01 par value, was 42,743,594 shares.
Documents Incorporated By Reference
Portions of the Registrant's definitive proxy statement to be filed
pursuant to Regulation 14A not later than 120 days after the end of the fiscal
year are incorporated by reference into Part III.
<PAGE>2
MARK IV INDUSTRIES, INC.
INDEX TO ANNUAL REPORT
ON FORM 10-K
PART I Page
Item 1: Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2: Properties . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Item 3: Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . .16
Item 4: Submission of Matters to a Vote
of Security Holders . . . . . . . . . . . . . . . . . . . . . .16
PART II
Item 5: Market for the Company's Common Stock and
Related Security Holder Matters . . . . . . . . . . . . . . . .17
Item 6: Selected Financial Data. . . . . . . . . . . . . . . . . . . . .18
Item 7: Management's Discussion and Analysis
of Financial Condition and Results
of Operations . . . . . . . . . . . . . . . . . . . . . . . . .20
Item 8: Financial Statements and Supplementary
Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Item 9: Disagreement on Accounting and Financial
Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . .53
PART III
Item 10: Directors and Executive Officers of the
Registrant. . . . . . . . . . . . . . . . . . . . . . . . . . .53
Item 11: Executive Compensation . . . . . . . . . . . . . . . . . . . . .53
Item 12: Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . . . . . . . . . .53
Item 13: Certain Relationships and Related
Transactions. . . . . . . . . . . . . . . . . . . . . . . . . .53
PART IV
Item 14: Exhibits, Financial Statement Schedules and
Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . .54
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . .63
Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . . 64
<PAGE>3
PART I
ITEM 1. BUSINESS
General
Mark IV Industries, Inc. ("Mark IV", or "the Company") is a diversified
manufacturer of a wide variety of proprietary and other products which are
primarily grouped into three core businesses: Power and Fluid Transfer;
Transportation; and Professional Audio. Many of Mark IV's product groups have
a significant, and in certain instances the leading share of their respective
markets. Its products principally serve specialized needs in markets in which
relatively few manufacturers compete. The products are sold directly, and
through independent distributors, to other manufacturers and commercial users
in the United States and Europe, and to a lesser extent in Canada and the Far
East. Mark IV operates 52 separate manufacturing facilities and employs
approximately 12,500 people.
Mark IV's business strategy in fiscal 1992 and 1993 was focused on the
accelerated reduction of debt and the enhancement of its three core
businesses. By February 28, 1993, Mark IV had significantly reduced the
amount of its outstanding long-term debt (by $220,500,000) from the beginning
of fiscal 1992, bringing the Company's long-term debt as a percentage of total
capitalization from 80.8% at February 28, 1991 to 59.0% at February 28, 1993.
Having accomplished significant debt reductions by the end of fiscal 1993, the
Company's emphasis shifted to building its core businesses by expanding their
product coverages and increasing their global presence.
In fiscal 1994, the Company announced the discontinuance of its non-core
businesses, and completed the sale of certain of those businesses for cash
proceeds of approximately $35,000,000. In June 1993, the Company acquired
Pirelli Trasmissioni Industriali S.p.A (PTI) for a cash purchase price of
$65,000,000 and the assumption of PTI bank indebtedness of $50,000,000.
Financing for the PTI acquisition was provided by the Company's new credit
agreements, as well as the proceeds from the sale of discontinued operations.
PTI's operations are based in Italy, and include manufacturing and
distribution centers in 5 other Western European countries and in the U.S.
<PAGE>4
Segment Information
As a result of the Company's discontinuance and sale of certain of its
non-core businesses in fiscal 1994 and 1993, and its PTI acquisition in June
1993, the Company has modified its industry segment definitions and
descriptions for fiscal 1994. The company now classifies its operations into
the following three core business segments:
(i) Power and Fluid Transfer, which includes the design and
manufacture of automotive aftermarket and OEM belts, hose,
couplings, accessory drive systems and fluid transfer assemblies;
industrial belts, hose and fittings, and garden hose.
(ii) Transportation, which includes the design and manufacture of
products and systems for mass transit, such as door systems,
lighting, and informational display devices and applications for
bus and rail transit vehicles; traffic, such as advanced traffic
control and management systems, directional information and
warning signs for roads and highways, and automatic (intelligent)
vehicle identification for toll collection and traffic control;
and commercial aviation, such as aircraft interior lighting and
air-diffusion, and aircraft emergency lighting and night vision
compatibility.
(iii) Professional Audio, which includes the design and manufacture of
products and systems used primarily in the high-performance
professional audio market, such as professional performance
microphones, speakers, mixers, and amplifiers; high-fidelity
public address and musical instrument loudspeaker systems; audio
signal processors, sound reinforcement equipment, and sound
enhancement and noise canceling equipment.
<PAGE>5
Summary financial information concerning the Company's business segments
for fiscal 1994 follows. The comparative information for fiscal 1993 and 1992
has been restated to exclude discontinued operations and to recognize the
effects of adopting SFAS No. 109, Accounting For Income Taxes. The summary
information has been derived from the more detailed information regarding
industry segments in accordance with generally accepted accounting principles
as presented in Note 15 to the Company's audited consolidated financial
statements included elsewhere herein. Such summary information is as follows
(dollars in thousands):
<TABLE>
1994 1993 1992
________________ ________________ ________________
(As Restated) (As Restated)
Percent Percent Percent
Amount of Sales Amount of Sales Amount of Sales
______ ________ ______ ________ ______ _______
<S> <C> <C> <C> <C> <C> <C>
NET SALES
TO CUSTOMERS
Power and
Fluid Transfer $ 852,100 68.5% $ 709,400 65.3% $ 635,200 63.3%
Transportation 218,600 17.6% 199,500 18.4% 199,900 19.9%
Professional
Audio 173,500 13.9% 176,800 16.3% 169,200 16.8%
Total net sales
to customers $1,244,200 100.0% $1,085,700 100.0% $1,004,300 100.0%
OPERATING INCOME (1)
Power and
Fluid Transfer $ 97,800 11.5% $ 79,200 11.2% $ 67,000 10.5%
Transportation 27,000 12.4% 24,900 12.5% 27,100 13.6%
Professional
Audio 21,900 12.6% 22,000 12.4% 23,900 14.1%
Total operating
income $ 146,700 11.8% $ 126,100 11.6% $ 118,000 11.7%
<FN>
(1) Operating income represents income from continuing operations before
corporate expenses, interest expense, securities transactions and taxes.
</TABLE>
<PAGE>6
A description of the Company's three business segments follows:
Power and Fluid Transfer
Mark IV's largest business group, the Power and Fluid Transfer segment,
is a global business, primarily operating under the name of Dayco. Around the
world, Dayco's products can be identified by their many registered trademarks,
including: Dayco, Dayflex, Gold Label, Isoran, Petroflex, Poly-Rib, Stecko,
Swan, and Top Cog.
Mark IV entered the power and fluid transfer business through the
acquisition in October 1988 of Armtek Corporation, of which Dayco was a
principal component. Dayco's business expanded significantly with its
November 1990 acquisition of Anchor Swan. At the time of its acquisition,
Anchor Swan manufactured and distributed garden hoses, general purpose air,
water and agricultural spray, air compressor and other hose products; Dayco
produced many of the same hose products, plus industrial belts, industrial,
hydraulic and appliance hoses and fittings and belts and hoses for original
equipment manufacturers (OEMs) and the automotive aftermarket. The Power and
Fluid Transfer segment was further expanded by the Company's acquisitions in
June 1991 of System Stecko Limited, a United Kingdom-based manufacturer of
hose couplings used primarily for high pressure industrial applications, and
its June 1992 acquisition of Tecaflex International S.p.A., an Italian
manufacturer primarily of hoses for automotive applications. Dayco's
acquisition of the power transmission business of Pirelli Trasmissioni
Industriali, S.p.A. (PTI) in June 1993, significantly expanded the company's
presence in Europe, by adding highly automated manufacturing capacity and a
research and development center in Europe, as well as experienced management,
a strong market presence, and brand name recognition. In North America, the
addition of PTI significantly enhanced Dayco's belt product line.
The Power and Fluid Transfer segment accounted for about 68% of
Mark IV's total revenue and 67% of its operating income (before corporate
expenses) in fiscal 1994. Also included in this business segment is
Protective Closures, which manufactures plastic and metal caps, plugs, seals
and protective netting sold to a broad base of industrial and automotive OEM
customers; and Mokon, which produces oil and water-based temperature control
systems. The segment has been divided into three, market-focused sub-groups -
- - - Industrial, Automotive OEM, and Automotive Aftermarket -- each of which is
unique in terms of its products, markets, customers and strengths. Therefore,
despite the overall size of this segment, no single business, market or
customer has dominant influence over the Company's operations.
<PAGE>7
Industrial
Approximately 44% of the Power and Fluid Transfer group's sales are to
Industrial customers, making it the largest sub-group within this segment.
The Industrial group supplies a variety of belts, hose, tensioners, pulleys,
couplings and assemblies for a variety of markets, including agricultural, oil
field, mining, lawn and garden, food and beverage handling, construction,
environmental, chemical and specialty applications. Many of the Industrial
group's products are sold to OEMs for use in products such as snowmobiles,
washing machines, golf carts, vacuum cleaners, outboard motors, lawn mowers
and farm equipment. The balance of the group's sales are divided between
distributors of industrial replacement belts and hose, and lawn and garden
product distributors, such as hardware chains, home centers, mass
merchandisers, and lawn and garden retailers.
Concern for the environment and environmental legislation are among the
key factors in the growth of the segment's Industrial business. One of the
fastest growing product lines is vapor recovery hose systems, which capture
gasoline fumes released while refueling, and return them to an underground
storage tank. Currently, 74 metropolitan areas and 32 states in the U.S.
mandate the use of vapor recovery systems, with an opportunity for continued
growth. Competition is increasing, but with its early entry into the market
and innovative products, such as new hose compounds formulated to handle the
newer gasoline additives, Dayco is well-positioned for the future. In
addition, Dayco's vapor recovery hose is lighter and easier to use than many
competing products.
Environmental concerns also are propelling growth in underground fuel
storage systems. Dayco is the exclusive supplier of the "hose within a hose"
used by Total Containment, Inc. in its EnviroflexTM flexible underground
piping system. This system is designed to capture any fluid that might leak
from an underground piping system, and is used together with a detection
system to reduce the risk of damage to the environment. Several states now
require the use of secondary containment systems, and many more are expected
to follow suit in order to meet the 1998 deadline for compliance with the
Underground Tank Storage Regulations Act. Total Containment has introduced a
similar product in Europe in response to increasing environmental regulations
there, which should also increase demand for this product.
The acquisition of PTI has provided Dayco with the opportunity to
produce a full line of high-torque synchronous belts and sprockets for the
industrial OEM and replacement markets. This line of more efficient timing
belts is referred to as RPPTM (Reinforced Parabolic Profile) belts. These
belts are used in situations where timing is critical, such as on large
conveyor systems or copy machines, or to prevent slippage of the belt in a
drive system, such as on a motorcycle or a large-scale industrial fan. The
marketing strategies for this product line include targeting new OEM
customers, and introducing this line of belts to current Dayco distributors.
<PAGE>8
Dayco's position as a leading manufacturer of garden hose in North
America will be further enhanced through the introduction of several new
products under the SWAN(R) brand. Dayco is scheduled to introduce the PERFECT
GARDENERTM brand of premium garden hose. This hose offers greater kink-
resistance, flexibility, soil resistance and coiling capabilities than any
competing brand. Also in this market, a new line of packaging for Dayco's
higher-quality SWAN garden hose products will be introduced in August 1994,
for the 1995 garden hose season. The new DURA-DISCTM vinyl boards -- circular
packaging placed on the coils of hose -- will replace traditional cardboard
packaging. DURA-DISC boards are expected to maintain their "like-new"
appearance throughout the entire selling season, thus benefitting our retail
distributors.
Automotive OEM
Approximately 32% of the Power and Fluid Transfer segment's sales are to
Automotive OEM customers. Dayco participates in the worldwide automotive OEM
market by supplying an extensive array of automotive systems and assemblies,
including entire accessory drive, cam drive, fuel, air conditioning; and power
steering systems; and radiator, heater, fuel, engine and transmission oil
cooler assemblies, consisting of various hose, belts, tensioners, brackets,
pulleys, canisters and sprockets. Revenues in this group are split about
evenly between automotive belt and hose products and systems.
In fiscal 1994, Dayco's Automotive OEM sub group was reorganized into a
single global business unit to better meet the needs of its worldwide
customers. Such reorganization has helped Dayco to eliminate useless
duplication, increase efficiencies, and maximize the use of its resources on a
global basis.
At its research and development center near Detroit, Dayco engineers and
technical support personnel work hand-in-hand with OEM customers during the
design phase, to develop complete power or fluid transfer systems from
individual components, for a specific vehicle. In Europe, Dayco's research
and development facility in Turin, Italy, is also involved in the design of
automotive systems, including fuel, air conditioning and power steering
systems developed for use in European-made vehicles.
Dayco does business with virtually all major automobile manufacturers
around the world. Growth in the automotive OEM market will be boosted by
Dayco's increasing activity with the U.S. operations of foreign-based
automotive OEMs. Dayco is currently selling to -- or has an active product
development program with -- most of the leading foreign-based OEMs, including
Diamond Star (Mitsubishi), Auto Alliance (Mazda), Nissan, Toyota, Isuzu and
BMW. Looking ahead, Dayco has multiple development programs with the Detroit
OEMs and most of the major European automotive manufacturers, as well as with
the foreign-based OEMs.
<PAGE>9
Automotive Aftermarket
The Automotive Aftermarket accounted for roughly 24% of the Power and
Fluid Transfer segment's sales in fiscal 1994. The products in this group
include a vast array of automotive belts, hose and accessories sold to
automotive warehouse distributors, oil companies, retail and auto parts
chains, mass merchandisers, farm and fleet stores, and hardware distributors.
Products include multiple-ribbed belts, V-belts, snowmobile and timing
belts; radiator, automotive service, fuel line and heater hose and assemblies;
as well as fan clutches, transmission and oil coolers, fan blades, electric
fans, tensioners, couplings and pulleys.
Of primary importance in the Automotive Aftermarket is the distribution
of products. When vehicle owners need a replacement belt or hose to make
their engine run, availability is of significant importance. The Dayco
distribution centers ship to a warehouse distributor, who is the direct Dayco
customer, and the one who pays for the product. The next level on the
distribution chain is a "jobber." The jobber sells to a walk-in do-it-
yourselfer, or to a garage mechanic, either of whom actually puts the belt or
hose on the vehicle. Automotive Aftermarket products aren't really "consumed"
until they are installed on a vehicle. Dayco's support is provided at every
level of this distribution chain. Dayco has made major investments in its
primary distribution center in Waynesville, North Carolina, to upgrade both
the facility and the distribution process.
The Automotive Aftermarket strategy for growth includes widening its
product offerings within current lines in order to gain market share. As part
of this strategy, Dayco has leveraged its position as a supplier to the
automotive OEMs, to introduce new products into the aftermarket. For
instance, a new heater hose assembly developed for the OEM market, has been
subsequently introduced to Dayco's aftermarket customers.
Not all of the products supplied to the aftermarket carry the Dayco
brand name. Some customers prefer to have their own, or a private label
(other than Dayco), on their products. This is one of the fastest growing
areas in the aftermarket, and Dayco is well-positioned to take advantage of
this growth. Also, as the average age of vehicles on the road continues to
rise, and with the number of miles driven increasing for the 12th straight
year, the need for aftermarket parts is growing.
<PAGE>10
Transportation
Mark IV's Transportation business segment supplies products and systems
for the Mass Transit, Traffic Management, and Commercial Aviation markets.
Customers include OEMs of mass transit bus and rail vehicles and commercial
aircraft, as well as state and local highway and transportation agencies.
Products in this segment are also sold to the aftermarket.
Mark IV entered the transportation business in 1984 through its LFE
acquisition (traffic signals and highway signs) as supplemented by its 1986
acquisition of Gulton Industries, Inc., through which Mark IV acquired its
Luminator businesses. Mark IV enhanced its international presence in the mass
transit and traffic control business through several strategic acquisitions
which expanded the Company's product lines in this segment. In August 1990,
the Company acquired a Canadian-based manufacturer of electromagnetic display
devices for use in destination signs, gasoline pumps and other information
displays (F-P Electronics). In December 1990, the Company acquired a
manufacturer of door systems and certain electrical controls for buses and
rail cars, with operations in both Canada and the U.S. (Vapor). In January
1993, Mark IV acquired a French company which supplies passenger information,
display and automatic bus location systems to the European market (SLE).
The Transportation segment is predominantly contract driven, with many
of the contracts spanning one or more years. At times, there are delays in
the completion of contracts which are beyond the Company's control -- a
problem which affected the market for the Company's bus and rail products in
the latter half of fiscal 1994. This can cause fluctuations in the timing of
revenues, and allow inventories to build. Also inherent to this business are
backlogs -- firm orders for products which are to be delivered at a future
date. As of February 28, 1994, the Transportation business segment's backlog
of orders believed to be firm was approximately $141,000,000, of which,
approximately $80,000,000 is expected to be shipped during fiscal 1995. The
Transportation business segment's backlog as of February 28, 1993 was
approximately $127,200,000.
The Company's Transportation products are sold primarily in North
America and Europe, with 34% of total segment revenue coming from outside of
the U.S. In fiscal 1994, this segment accounted for 18% of both the
consolidated sales and operating income (before corporate expenses) of Mark
IV. The segment is divided into three sub-groups, each of which is unique in
terms of its products, markets, customers and strengths.
<PAGE>11
Mass Transit
The Mass Transit group -- the largest group within the Transportation
segment -- provides door systems, electronic controls, vehicle information
systems, interior lighting, and passenger information display systems and
components, for mass transit buses and rail cars. While most of the products
in this group are sold directly to vehicle manufacturers, there is also a
large market for replacement parts used to repair or upgrade mass transit
vehicles. The Company's marketing efforts are directed primarily at OEMs, but
are also focused on transit agencies, who can specify that Mark IV products be
included in their mass transit systems.
Through Vapor, the Company has a commanding lead in the bus and rail
vehicle door closure market, supplying complete door systems as well as basic
components to the North American transit industry. Vapor is known for its
innovative design capabilities, reliability and quality of performance. Vapor
Canada supplies complete door systems for the London Underground Limited
(LUL), the largest subway system in the world, and has already delivered
three-quarters of a 700-subway car order it received for the LUL Central Line.
Vapor was recently awarded another contract to supply door systems for 354
cars on the LUL's Jubilee Line extension running to Canary Wharf.
Also included in the Mass Transit group is Luminator Mass Transit, a
leading producer of interior lighting and passenger information systems, air
diffusers, overhead storage racks and accessories for transit buses and
passenger rail cars. Together with its sister companies in Europe, LLE and
SLE, Luminator is a significant worldwide supplier of electronic passenger
information displays for public transportation vehicles.
F-P Electronics, a significant worldwide manufacturer of electro-
mechanical display components used in airport, bus and rail passenger
information displays -- both on the vehicle (mobile) and in the station
(fixed) -- is also a part of the Mass Transit group. Its customers include
manufacturers of mass transit equipment and gasoline dispensing pumps, as well
as commercial sign companies. F-P's products are also used for programmable
highway, time and temperature, scoreboard, stock exchange and other commercial
displays.
<PAGE>12
Traffic Management
The Traffic Management portion of the Transportation segment provides
traffic control and management systems, traffic controllers and signals;
automatic toll collection and vehicle identification systems; and highway
information displays. These products, which are sold to state and local
governments as well as transportation agencies primarily in the U.S. and
Canada, help to reduce traffic congestion, pollution and gridlock on highways,
city streets and at toll booths.
Automatic Signal/Eagle Signal is a leading, full-line supplier of
traffic control equipment and systems in the U.S. Its range of products
includes traffic lights, which control vehicular and pedestrian traffic; pre-
timed and traffic-adjusted controllers (boxes at intersections programmed to
control the operation of an individual traffic light); and complete traffic
management systems. Its MONARCTM system, a fully computerized transportation
management and control system, is in use at a number of locations in the U.S.
This system can coordinate and control all of the traffic lights and various
traffic information signs in an entire metropolitan area. The MONARC also is
able to control video surveillance equipment within a transportation network,
and can be fully integrated with other Intelligent Vehicle Highway Systems
(IVHS) technologies.
Mark IV is an active participant in the rapidly growing IVHS market. In
March 1994, Mark IV IVHS equipment was selected by the Interagency Group (IAG)
- - -- a group representing seven toll authorities in New Jersey, New York and
Pennsylvania -- for use on the new E-ZPasssm electronic toll collection
system. The Company's equipment has now been recommended to the governing
boards of each of the individual agencies within the IAG, and a contract was
recently signed with MTA Bridges and Tunnels (formerly the Triborough Bridge
and Tunnel Authority). Mark IV IVHS will provide the tag and reader equipment
for the E-ZPasssm system, which is designed to eliminate the need for
motorists to exchange cash, tokens, or tickets at toll booths. Tolls will be
paid electronically, as vehicles pass through the booths, reducing congestion,
increasing accuracy in toll collection, and improving driver convenience on
toll roads, bridges and tunnels. In addition to an increase in automated toll
systems, the group is also seeing significant growth in the market for
electronic variable message displays, which are produced by F-P Electronics.
These systems can be found on the highway in applications such as overhead
message, speed limit and lane control signs, and in toll collection stations.
F-P Electronics also has a new line of high light intensity fiber optic
traffic displays, specifically designed to improve visibility on the highway.
Also serving the Traffic Management market is the company's Interstate Highway
Sign operation -- a leading manufacturer of reflective directional,
informational, regulatory and warning signs for the nation's highways and
other roadways. Interstate Highway Signs is also producing new signs using
exterior light that provide better visibility and are easier to maintain.
<PAGE>13
Commercial Aircraft
Luminator Aircraft Products supplies interior lighting and other
passenger comfort systems for commercial aircraft, including the MD-11 and new
MD-90, and every other McDonnell Douglas aircraft produced since the DC-3. In
addition, Luminator provides components for several Boeing aircraft models.
Luminator also supplies aircraft panel, navigation, landing and emergency
lights to general aviation customers, such as Beechcraft and Cessna, and makes
a comprehensive line of night vision compatible interior and exterior lighting
used in military applications. Luminator's interior aircraft products include
fluorescent cabin lighting, overhead reading lights, emergency lighting, and
"Exit", "No Smoking" and other passenger information signs, as well as self-
powered light sources used to illuminate these displays.
Professional Audio
The Professional Audio business segment accounted for approximately 14%
of Mark IV's total revenue and 15% of its operating income (before corporate
expenses) in fiscal 1994. This group of companies, known in the marketplace
as "Mark IV Audio," provides a comprehensive range of high-quality, high-
performance audio products used by professional musicians, broadcast and
recording studios, touring bands, and in sound system installations of all
types -- from stadiums to churches, theaters to airports, and amusement parks
to factories.
Mark IV entered the professional audio business in 1986 through its
acquisition of Gulton Industries, Inc., which had two operations engaged in
the audio business -- Electro-Voice and Altec Lansing. Since that time, Mark
IV has made four additional strategic acquisitions of companies engaged in the
manufacture of audio equipment for commercial and professional use, thereby
giving this segment a manufacturing and distribution presence in many parts of
the world.
Mark IV Audio produces a full-line of the components required in sound
systems, which has enabled it to align itself with retailers, contractors and
distributors around the world. The Mark IV Audio group includes some of the
industry's oldest and most prestigious brand names, and is the leader in many
segments of the professional audio market. EV's recently-introduced System
200 has set a new standard for performance in a compact, portable loudspeaker
system, and is gaining market share in live music and audio-visual
applications. EV microphones are a significant brand among leading radio
personalities and television news people. Electro-Voice products are also
used in movie theaters and large sports venues.
<PAGE>14
Altec Lansing was a pioneer in the market for installed engineered sound
systems. Sound contractors around the world continue to look to Altec Lansing
for products and technical support for the audio systems they install in
airports, theme parks, hotels, churches, theaters, convention centers, and
other locations where sound quality and speech intelligibility are important.
Altec's products can be found at Euro Disneyland, in France, and at the new
Cancun Convention Center, Mexico's largest convention center.
The Mark IV Audio group's Vega microphones were used at the recent
Academy Awards presentations. Klark Teknik's signal processing electronics
are used where performance demands are critical in studio, touring and fixed
installation applications around the world. Its Midas XL3 mixing console has
been established as a clear choice for mid-sized systems in touring and live
theater applications. Another Mark IV Audio company, DDA, produces consoles
for use in live sound, post-production for videos, and fixed installations.
Using EV's established distribution network, the group's Dynacord
products from Germany are being introduced to musicians in North America,
under a new brand name -- EV/Dynacord. Dynacord is also prominent in the
fixed installation market in Europe, working in conjunction with the Altec, EV
and University brands to present a full line of products to sound contractors.
Approximately 59% of Mark IV Audio's sales are to customers outside of
the United States. The group has company-owned distributors in Australia,
Canada, France, Hong Kong, Japan and Switzerland, as well as in the countries
where Mark IV Audio products are manufactured, which include the U.S., Germany
and the U.K. Recently, Mark IV Audio made some major changes to its
organizational structure, in order to better focus its widely diversified
strengths in technology, brand recognition, geographic distribution, and
manufacturing. General administration, research and development, and
manufacturing responsibilities have now been centralized for all Mark IV Audio
companies, enabling the group to more effectively coordinate and utilize its
resources. These changes have been implemented in order to increase the rate
of technological innovation, reduce lead-time on new product development,
maintain world-class quality and competitive costs in production, and shorten
lines of communication within the organization.
Also as part of this reorganization, marketing, sales and other business
development activities have been divided into three regions -- The Americas,
Europe (including the Middle East, Africa and part of Asia), and The Pacific
(Australia, Southeast Asia, Japan and China). Each region is structured with
a business development team whose mission is to identify and aggressively
pursue growth opportunities within its territory. All Mark IV Audio products
will be available for sale in each region. With its regional decision-making,
this new strategy will enable Mark IV Audio to provide products, pricing and
programs tailored to the specific needs of customers in each area, with an
understanding of the cultures, conditions and business practices of the given
region.
<PAGE>15
Marketing and Competition
Mark IV's products are marketed primarily in the United States and
Europe, and to a lesser extent in Canada and the Far East. The Company uses
its own sales engineers and other sales personnel, independent distributors
and sales representatives to market its products.
A majority of the Company's products have a significant and in many
instances the leading market share in their respective markets. Most of the
markets for the Company's products are characterized by a limited number of
competitors. However, competition in certain of those markets is intense.
Some of the Company's competitors are substantially larger than Mark IV and
have greater financial resources. The Company competes on the basis of price,
quality, technical innovation and its ability to fill orders promptly, with
the relative importance of each factor depending on the market for the
particular product.
Backlog
The Company does not believe that the backlog of orders for any of its
products is material to the Company as a whole. However, as discussed
previously, backlogs are a significant factor in the Transportation business
segment.
Patents and Trademarks
Although a number of patents and trademarks have been issued to the
Company and its subsidiaries, the Company believes its competitive position is
more dependent on its technical knowledge and processes than on patent or
trademark protection. The Company believes, however, that its trademarks and
tradenames used in connection with certain products may be significant to its
business.
<PAGE>16
Research and Development
The Company is engaged in ongoing research and development in connection
with new and existing products. Research and development expenditures are
expensed as incurred, and amounted to $30,900,000; $26,100,000; and
$24,900,000 in the Company's continuing operations in fiscal 1994, 1993 and
1992, respectively.
Raw Materials and Supplies
The materials and supplies used to produce the Company's products are
generally obtained from a wide variety of suppliers, and the Company has not
experienced any shortages. Although certain materials used in the manufacture
of flip-dots, electrostatic control equipment, self-illuminating lights and
smoke-detector ionization elements are readily available from only a few
suppliers, the Company does not anticipate any significant difficulties in
obtaining any of these raw materials in the foreseeable future.
Government Regulation
Certain of the Company's process control systems, electrostatic control
devices, smoke-detector ionization elements and self-illuminating lights have
radioactive components, the production, storage and transportation of which
are subject to federal, state and local laws and regulations. Federal and
state regulations also limit the amount of exposure the Company's employees
may have to such radioactive materials. The Company has obtained all licenses
and approvals required for its businesses and believes it is in material
compliance with all applicable regulations concerning radioactive materials
and employee safety.
A portion of the Company's business is conducted pursuant to U.S.
Government contracts or sub-contracts. Generally, government contracts and
sub-contracts contain provisions permitting termination at any time at the
convenience of the Government upon payment to the Company of costs incurred
plus a profit related to the work performed to the date of termination.
Substantially all of the Company's government contracts and sub-contracts
contain these provisions. The Company, as a government contractor, is subject
to various statutes and regulations governing defense contracts.
Other than as described above with respect to radioactive components,
the Company is not subject to any particular environmental laws or regulations
which are not generally applicable to all manufacturing companies. The
Company believes that it is in material compliance with all applicable
environmental laws and regulations. Mark IV does not anticipate having to
incur material capital expenditures for environmental compliance in fiscal
1995 or fiscal 1996.
<PAGE>17
Employees
The Company currently employs approximately 12,500 persons, of whom
approximately 8,700 are production employees, with the remainder serving in
executive, administrative, engineering or sales capacities. Approximately
3,400 production employees are covered by nine (9) collective bargaining
agreements which expire at various times through June 1999. The Company
believes its relationship with its employees is good.
Other
Mark IV was incorporated in Delaware in 1970 and its executive offices
are at 501 John James Audubon Parkway, Amherst, New York 14228. Its telephone
number is (716) 689-4972.
ITEM 2. PROPERTIES
The table below summarizes the approximate floor space of the Company's
corporate office and principal manufacturing facilities by business segment.
Approximate Floor Space
(In Thousands of Square Feet)
Owned Leased Total
Corporate Office - 23 23
Power and Fluid Transfer (1) 4,975 538 5,513
Mass Transit and Traffic Control (2) 684 914 1,598
Professional Audio (3) 490 192 682
(1) Consisting of the following twenty-seven facilities:
North American facilities (approximately 4,505,000 square feet):
Waynesville, NC; Springfield, MO; Walterboro, SC; Williston, SC; Ocala,
FL; Fort Scott, KS; Fort Worth, TX; Alliance, NE; Eldora, IA; McCook,
NE; Fayetteville, AR; Red Wing, MI; Weston, Ontario, Canada; Walnut, CA;
Rock Island, IL; Easley, SC; Bucyrus, OH; Lexington, TN; Buffalo, NY;
Vero Beach, FL.
European Facilities (approximately 1,008,000 square feet): Halesowen,
U.K.; Torino, Italy; Barcelona, Spain; Baudour, Belgium; Chieti, Italy;
Manopello, Italy (2).
(2) Consisting of the following fourteen facilities:
North American facilities (approximately 1,548,000 square feet): Plano,
TX; Montreal, Quebec, Canada; Niles, IL; Mississauga, Ontario, Canada
(2); Cobourg, Ontario, Canada; Little Rock, AR; Denton, TX; Austin, TX;
Grand Island, NY; Clinton, MA; Hudsonville, MI.
European facilities (approximately 50,000 square feet): Rastatt,
Germany and Nice, France.
<PAGE> 18
(3) Consisting of the following eleven facilities:
North American facilities (approximately 535,000 square feet):
Buchanan, MI; Newport, TN; Sevierville, TN; Mishawaka, IN; Oklahoma
City, OK; Sun Valley, CA; El Monte, CA.
European facilities (approximately 147,000 square feet):
Straubing, West Germany; Hohenwarth, West Germany; Kidderminster,
Worchester, U.K.; Hounslow, Middlesex, U.K.
The Company also owns or leases various small production facilities,
sales offices and distribution centers which are not included in the above
list of properties.
The Company believes that its existing facilities have sufficient
capacity to meet its anticipated needs in each of its industry segments for
the foreseeable future.
ITEM 3. LEGAL PROCEEDINGS
A subsidiary of the Company was the defendant in a patent infringement
case which was tried in the latter part of fiscal 1994. The decision of the
Court was reached in April 1994 in favor of the plaintiff, awarding them
damages and issuing an injunction which prohibits the Company from any further
use of the technology at issue. Prior to the court's decision, the Company
had stopped using the technology in question; therefore, the injunction will
have no impact on the Company's future sales and marketing efforts. If the
judgement for the plaintiff is upheld on appeal, the after-tax cost to the
Company could be in the range of $2,300,000. Management of the Company has
been advised by its legal counsel as to the merits of its arguments, and
continues to believe it has not infringed on the plaintiff's patent.
In view of the above, management has directed its legal counsel to
pursue the appeal process as diligently as possible. Management believes the
ultimate conclusions of law will be decided upon by the appeals court in favor
of the Company. However, in view of the trial court's findings, an accrual
has been established to provide for the cost of the resolution of this issue
in the event the Company is not successful. The litigation accrual did not
have an effect on income, since the effects of establishing it have been
offset by the reversal of accrued liabilities related to an acquisition in
fiscal 1991 which management has determined are no longer required.
The Company is involved in various other legal and environmental related
claims or disputes in the ordinary course of business. In the opinion of
management, the ultimate cost to resolve these matters will not have a
material adverse effect on the Company's financial position.
<PAGE>19
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED
SECURITY HOLDER
MATTERS
The Company's Common Stock is listed on the New York Stock Exchange
(Symbol: IV). The following table sets forth, for the fiscal periods
indicated, the high and low closing sale prices per share of the Company's
Common Stock as reported by the New York Stock Exchange. All amounts have
been adjusted for the 5% stock dividend paid in April 1994.
Fiscal 1994 Fiscal 1993
Low High Low High
1st Quarter $15.65 $18.81 $11.88 $14.04
2nd Quarter $18.93 $22.02 $11.45 $13.39
3rd Quarter $17.98 $24.52 $11.11 $14.06
4th Quarter $17.14 $20.00 $13.61 $17.57
As of February 28, 1994, the approximate number of holders of record of
the Company's Common Stock was 2,500.
The Company declared total cash dividends of $.098 and $.084 per share
during fiscal 1994 and 1993, respectively.
<PAGE>20
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
The following table sets forth selected consolidated financial information
of the Company for each of the five fiscal years in the period ended February 28,
1994. This table should be read in conjunction with the audited consolidated
financial statements of the Company and the related notes thereto included
elsewhere herein.
<CAPTION>
FIVE YEAR SUMMARY OF OPERATIONS
(Amounts in thousands, except per share data)
Fiscal Year Ended the Last Day of February,
______________________________________________________
1994 (1) 1993 (2) 1992 (2) 1991 (2) 1990 (2)
________ ________ ________ ________ _______
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales $1,244,200 $1,085,700 $1,004,300 $ 789,700 $ 672,700
========== ========== ========== ========== =========
Operating income (3) $ 131,800 $ 113,600 $ 108,600 $ 88,000 $ 77,700
Interest expense 50,100 51,600 64,700 60,600 51,200
__________ __________ _________ __________ _________
Operating income,
net of interest
expense $ 81,700 $ 62,000 $ 43,900 $ 27,400 $ 26,500
========== ========== ========== ========== ==========
Income from
continuing
operations:
Before securities
transactions $ 51,100 $ 39,100 $ 28,400 $ 17,000 $ 16,300
Securities
transactions - - (1,600) 600 3,600
__________ __________ __________ _________ _________
Total from
continuing
operations 51,100 39,100 26,800 17,600 19,900
Discontinued
operations - 3,600 2,000 4,700 39,800
Extraordinary items (21,700) (3,700) (4,500) 700 10,000
Cumulative effect of
accounting change (26,000) - - - -
__________ __________ __________ __________ ________
NET INCOME $ 3,400 $ 39,000 $ 24,300 $ 23,000 $ 69,700
========== ========== ========== ========== ==========
Primary income
per share (4):
Continuing
operations:
Before securities
transactions $ 1.20 $ .93 $ .86 $ .68 $ .58
Securities
transactions - - (.05) .02 .13
__________ __________ __________ __________ _________
Total from
continuing
operations 1.20 .93 .81 .70 .71
Discontinued
operations - .09 .06 .18 1.41
Extraordinary items (.51) (.09) (.14) .03 .36
Cumulative effect of
accounting change (.61) - - - -
__________ __________ __________ __________ __________
NET INCOME $ .08 $ .93 $ .73 $ .91 $ 2.48
========== ========== ========== ========== ==========
<PAGE>21
1994 (1) 1993 (2) 1992 (2) 1991 (2) 1990 (2)
------- -------- -------- -------- --------
Fully-diluted income
per share (4):
Continuing
operations:
Before
securities
transactions $ 1.09 $ .87 $ .78 $ .59 $ .52
Securities
transactions - - (.04) .02 .10
_________ __________ _________ __________ __________
Total from
continuing
operations 1.09 .87 .74 .61 .62
Discontinued
operations - .07 .05 .14 1.09
Extraordinary
items (.43) (.07) (.12) .02 .28
Cumulative effect of
accounting change (.51) - - - -
__________ __________ __________ __________ _________
NET INCOME $ .15 $ .87 $ .67 $ .77 $ 1.99
========== ========== ========== ========== =========
Weighted average
number of shares
outstanding (4):
Primary 42,481 41,993 33,140 25,256 28,153
Fully-diluted 50,747 50,325 38,358 33,351 36,283
Balance Sheet Data:
Working capital $ 312,800 $ 275,400 $ 285,500 $ 345,100 $ 262,300
Total assets $1,282,300 $1,124,800 $1,104,500 $1,100,100 $ 872,100
Long-term debt $ 567,200 $ 497,100 $ 525,400 $ 717,600 $ 544,200
Stockholders'
equity (5) $ 345,400 $ 345,600 $ 311,900 $ 170,000 $ 159,700
<PAGE>22
<FN>
____________________________
(1) Includes the results of operations of the PTI business from its June 1993
acquisition date, and excludes the results of discontinued operations.
(2) Income Statement data has been restated to reflect the effects of the
adoption of SFAS #109, Accounting For Income Taxes, and to exclude the
results of discontinued operations. Balance Sheet Data has been restated
to reflect the adoption of SFAS #109.
(3) Represents income from continuing operations before interest expense,
securities transactions and taxes.
(4) Adjusted to reflect the three-for-two stock distributions in April 1992 and
November 1989, and the 5% stock dividends paid in April 1994, May 1993,
July 1992, April 1991 and July 1990.
(5) The Company declared cash dividends of approximately $.098; $.084; $.066
and $.058 per share in fiscal 1994, 1993, 1992 and 1991, respectively. No
cash dividends were paid in years preceding fiscal 1991.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Financial Condition
In early fiscal 1992, management stated its intention to significantly
reduce long-term debt levels by the application of cash generated through
earnings, reductions in working capital requirements, and the sale of non-core
businesses and non-operating assets. At the end of fiscal 1993, long-term
debt had been reduced by approximately $220,500,000 (31%) from the
$717,600,000 level at February 28, 1991 to $497,100,000 at February 28, 1993.
The reduction brought the Company's level of long-term debt as a percentage of
total capitalization from 80.8% at February 28, 1991 to 59.0% at February 28,
1993.
Having accomplished significant debt reductions by the end of fiscal
1993, the Company's emphasis shifted to building its core businesses by
expanding their product coverage and increasing their global presence.
<PAGE>23
In June 1993, the Company completed its acquisition of Pirelli
Trasmissioni Industriali S.p.A. (PTI) for a cash purchase price of $65,000,000
and the assumption of PTI bank indebtedness of $50,000,000. Financing for the
PTI acquisition was provided by the Company's new credit agreements, as well
as the proceeds from the sale of discontinued operations, as discussed below.
PTI's operations are based in Italy, and include manufacturing and
distribution centers in 5 other Western European countries, and in the U.S.
In fiscal 1994, the Company announced the discontinuance of its non-
core businesses, and completed the sale of certain of those businesses for
cash proceeds of approximately $35,000,000.
In March 1993, the Company commenced a tender offer to purchase its
13-3/8% Subordinated Debentures for a cash price of $1,137.50 per $1,000
principal amount, plus accrued interest. As a result of the tender offer and
certain open-market purchases, the Company acquired approximately $138,000,000
principal amount of these debentures. The Company then completed an "in-
substance defeasance" in which approximately $60,400,000 was deposited in an
irrevocable trust to cover both the remaining outstanding principal amount
($52,000,000) and related interest expense requirements of these debentures.
In March 1993, the Company also completed a public offering of
$258,000,000 principal amount of its 8-3/4% Senior Subordinated Notes due
April 1, 2003. A substantial portion of the net proceeds from the sale of the
notes was used to fund the retirement of the Company's outstanding 13-3/8%
Subordinated Debentures referred to above.
In May 1993, the Company entered into a revolving credit agreement
("Multi-Currency Agreement") providing for a five year multi-currency
revolving credit facility with a group of financial institutions in the U.S.
and Europe. The Multi-Currency Agreement provides for a revolving loan
commitment for the first two years of the equivalent of $100,000,000. The
commitment declines by $12,500,000 at each of six semi-annual dates beginning
in June 1995, with the remaining $25,000,000 of commitment expiring in May
1998. Interest rates on borrowings under the Multi-Currency Agreement are
subject to change based on a specified pricing grid which increases from LIBOR
plus 0.625% to LIBOR plus 1.375% per annum based on the Company's senior debt
rating (as defined in the Multi-Currency Agreement). The Company is currently
paying interest at LIBOR plus 1.25% on borrowings under the Multi-Currency
Agreement. The Multi-Currency Agreement also contains certain affirmative and
negative covenants customary in an agreement of this nature.
<PAGE>24
In July 1993, the Company entered into a Credit Agreement providing for
a $300,000,000 five year revolving credit facility with a group of financial
institutions. A portion of the credit facility was used to repay amounts
outstanding under the Company's revolving credit facility dated June 19, 1990,
which was then canceled. Interest on the Credit Agreement is based on a
pricing grid which is either prime per annum or, under a LIBOR option, LIBOR
plus 0.375% to LIBOR plus 1.375% per annum based on the Company's senior
unsecured long-term debt ratings (as defined in the Credit Agreement). The
Company is currently paying interest at LIBOR plus 0.75% on borrowings under
the Credit Agreement. The Credit Agreement contains certain affirmative and
negative covenants customary in an agreement of this nature and is secured by
a pledge of the stock of certain of the Company's subsidiaries.
As a result of the above, net cash provided from earnings of continuing
operations was $91,200,000 in fiscal 1994, a 46% increase over the $62,600,000
provided in fiscal 1993. As of February 28, 1994, the Company had working
capital of $312,800,000 and borrowing availability under its primary credit
agreements of $211,000,000 and additional availability under its various
domestic and foreign demand lines of credit of approximately $51,700,000. The
Company's long-term debt as a percentage of total capitalization was 62.1% at
February 28, 1994. If the Company's $114,200,000 of 6-1/4% Convertible
Subordinated Debentures, which are callable in February 1995, were considered
to have been converted at February 28, 1994, long-term debt as a percentage of
total capitalization would be approximately 49.6% at that date.
Despite the recent increase in long-term debt resulting from the
Company's PTI acquisition, management will continue to emphasize the reduction
of long-term debt as a percentage of its total capital. It is anticipated
that debt reductions will continue to be achieved through a combination of the
application of cash generated from operations and reduced working capital
requirements in the Company's existing businesses. Management believes that
cash generated from operations should be sufficient to support working capital
requirements and anticipated capital expenditures for the foreseeable future.
Results of Operations
The Company classifies its operations in three core business segments:
Power and Fluid Transfer, Transportation, and Professional Audio. The
Company's current business strategy is focused upon the enhancement of its
three core business segments through internal growth, cost control, and
quality improvement programs and selective, strategic acquisitions, with an
emphasis on expanding the Company's international presence.
The results of operations of PTI have been included in the Company's
results of operations for fiscal 1994 from its June 2, 1993 acquisition date.
The Company's results of operations for fiscal 1993 and 1992 have been
restated to exclude the results of operations of the Company's discontinued
businesses and to recognize the effects of the Company's retroactive adoption
of SFAS No. 109, Accounting for Income Taxes.
<PAGE>25
<TABLE>
In reviewing the Company's sales performance, the following results by
segment should be considered for each of the fiscal years presented (dollars
in thousands):
<CAPTION>
1994 1993 1992
_________________ ________________ ____________
(As Restated) (As Restated)
% Increase % Increase
Over Prior Over Prior
Amount Year Amount Year Amount
______ __________ _______ _________ ______
<S> <C> <C> <C> <C> <C>
NET SALES TO CUSTOMERS
Power and Fluid Transfer $ 852,100 20.1% $ 709,400 11.7% $ 635,200
Transportation 218,600 9.6% 199,500 (0.2)% 199,900
Professional Audio 173,500 (1.9)% 176,800 4.5% 169,200
__________ __________ ___________
Total net sales
to customers $1,244,200 14.6% $1,085,700 8.1% $1,004,300
========== ========== ==========
</TABLE>
The increase in the Power and Fluid Transfer sales in fiscal 1994 is
the result of internal growth of approximately $41,000,000 (5.8%), and the
inclusion of the PTI operations. Excluding PTI and the negative effect of
foreign currency movements, the internal growth was approximately $57,900,000
(8.2%), with $36,200,000 (5.1%) of such growth generated from the segment's
U.S. operations and the balance from its foreign based operations. In fiscal
1993, the $74,200,000 (11.7%) increase over fiscal 1992 resulted from a
combination of increased unit sales and the inclusion of the results of
operations for the full year of a business acquired in the second half of
fiscal 1992. The effects of foreign currency movements in fiscal 1993 were
not significant in comparison to the amounts reported for fiscal 1992.
<PAGE>26
The sales increase in the Transportation segment in fiscal 1994 is the
result of internal growth of approximately $16,600,000 (8.3%), and the SLE
acquisition at the end of fiscal 1993, net of certain negative effects of
foreign currency movements in fiscal 1994. The sales increase was most
significantly generated by the segment's foreign operations. Slower sales
growth than anticipated was experienced in the segment's U.S. operations in
fiscal 1994 as a result of delays in the development of the IVHS (Intelligent
Vehicle Highway System) toll collection and traffic control markets. Sales in
fiscal 1993 remained comparable to fiscal 1992, with increases in the
segment's foreign operations substantially offset by declines in the segment's
U.S. operations. Sales in the Professional Audio segment in fiscal 1994
remained comparable to fiscal 1993, with a slight increase in U.S. sales being
offset by a decline in the segment's foreign operations. The modest increase
in the Professional Audio segment's fiscal 1993 sales over fiscal 1992 was
equally split between its U.S. and foreign operations.
The Cost of Products Sold as a percentage of consolidated net sales was
64.6%, 64.4%, and 64.0% in fiscal 1994, 1993, and 1992, respectively. This
consistent level of costs reflects the positive effects of the Company's cost
control programs, which have helped to substantially offset the negative
pressures on the margins experienced by each of the Company's three business
segments. The slightly higher costs in fiscal 1994 are also caused by the
contract delays referred to above and economic weakness experienced in our
European markets.
Selling and Administration costs as a percentage of consolidated net
sales were 19.0%, 19.8%, and 20.0% in fiscal 1994, 1993, and 1992,
respectively. The reduction in fiscal 1994 is primarily the result of
operating synergies achieved from the combination of the PTI business with the
previously existing European operations of the Power and Fluid Transfer
business segment. The relatively consistent level of costs indicates the
Company's continued emphasis on cost control has been successful in
substantially offsetting the impact of inflation on such costs.
Research and Development costs increased by $4,800,000 (18.4%) in
fiscal 1994 over fiscal 1993, which in turn increased by $1,200,000 (4.8%)
over fiscal 1992. The increase in fiscal 1994 is primarily caused by the PTI
acquisition. As a percentage of consolidated net sales, such costs were
approximately 2.5% in each of fiscal 1994, 1993, and 1992. This consistent
level of investment reflects the Company's continuing emphasis on new product
development.
Depreciation and Amortization expense increased by $9,600,000 (29.9%)
in fiscal 1994 over fiscal 1993, which in turn increased by $3,800,000 (13.4%)
over fiscal 1992. The increase in fiscal 1994 is primarily attributable to
the PTI acquisition. The fiscal 1994 amount also includes $800,000 related to
the restricted stock grants made in fiscal 1994. The remaining increases are
primarily the result of increased capital equipment expenditures.
<PAGE>27
The above sales and operating expense movements result in the following
operating income for each of the fiscal years presented (dollars in
thousands):
<TABLE>
<CAPTION>
1994 1993 1992
______________ _______________ _______________
(As Restated) (As Restated)
% of % of % of
Related Related Related
Amount Sales Amount Sales Amount Sales
________ _______ ______ _______ ________ ______
<S> <C> <C> <C> <C> <C> <C>
OPERATING INCOME
Power and Fluid Transfer $ 97,800 11.5% $ 79,200 11.2% $ 67,000 10.5%
Transportation 27,000 12.4% 24,900 12.5% 27,100 13.6%
Professional Audio 21,900 12.6% 22,000 12.4% 23,900 14.1%
Total operating income 146,700 11.8% 126,100 11.6% 118,000 11.7%
General corporate (14,900) (1.2)% (12,500) (1.1)% (9,400) (0.9)%
Continuing operations,
before interest,
securities transactions,
and taxes $131,800 10.6% $113,600 10.5% $108,600 10.8%
======== ===== ======== ===== ======== =====
</TABLE>
In spite of the increased interest cost resulting from the PTI
acquisition, interest expense of continuing operations in fiscal 1994 was down
$1,500,000 (2.9%) from the amount incurred in fiscal 1993, which in turn was
down $13,100,000 (20.3%) from fiscal 1992. The reduction in fiscal 1994 was
primarily the result of the Company's repurchase and in-substance defeasance
of its 13-3/8% subordinated debentures at the beginning of the fiscal year,
which was refinanced with the issuance of the Company's 8-3/4% Senior
Subordinated Notes. The reduction in fiscal 1993 was accomplished primarily
as a result of the Company's debt reduction program in fiscal 1993 and 1992,
which substantially reduced the outstanding amounts of high interest rate
debt. The Company's improved financial position at the end of fiscal 1992, as
well as the overall reduction in the economic interest rate as compared to
fiscal 1992, also contributed to lower interest costs in fiscal 1993. The
interest expense amounts reported for continuing operations also reflect the
allocation of $2,200,000; $5,00,000; and $6,400,000 to discontinued operations
in fiscal 1994, 1993, and 1992, respectively, since the proceeds from the
disposal of these businesses have been utilized to reduce indebtedness, and
therefore related interest expense as well.
The loss on securities transactions in fiscal 1992 reflects costs of
$2,100,000 related to the Company's conversion of its 7% Convertible
Subordinated Debentures, as well as the net effects of the Company's sale of
certain other investments and idle assets.
<PAGE>28
The Company's provision for income tax as a percentage of the pre-tax
accounting income was approximately 37.5%, 37.0%, and 35.4% in fiscal 1994,
1993, and 1992, respectively. The succeeding higher rates in fiscal 1994 and
1993 are primarily the result of increased income in foreign locations with
higher statutory tax rates than in the U.S. The effective tax rate in fiscal
1994 was not quite as high as previously anticipated, due to certain one-time
permanent tax differences. However, the rate is expected to increase in
fiscal 1995 as a result of the increased foreign income as a percentage of
total consolidated income.
As a result of all of the above, the Company's income from continuing
operations in fiscal 1994 increased $12,000,000 (30.7%) over fiscal 1993. In
turn, fiscal 1993 income from continuing operations increased $12,300,000
(45.9%), most notably by the reduction in interest expense over fiscal 1992.
As a result of the debt extinguishment referred to above, the Company
incurred extraordinary losses, net of related tax benefits, of $21,700,000;
$3,700,000; and $4,500,000 in fiscal 1994, 1993, and 1992, respectively.
Additionally, the Company's adoption of SFAS No. 106 in fiscal 1994 resulted
in the recognition of a net of tax charge of $26,000,000 as the cumulative
effect of the accounting change in fiscal 1994. The above extraordinary items
and one-time charge resulted in significantly reduced net income of $3,400,000
in fiscal 1994 in comparison to the $39,000,000 earned in fiscal 1993. Since
the discontinued operations and extraordinary charges were comparable in
fiscal 1993 and 1992, the net income reported in those years is consistent
with the reported income from continuing operations discussed above.
Impact of Inflation
Generally, the Company has been able to pass on or offset inflation-
related cost increases; consequently, inflation has had no material impact on
income from operations.
Recently Issued Accounting Standards
In November 1992, the Financial Accounting Standards Board issued
Statement No 112, Employers' Accounting for Postemployment Benefits (SFAS No.
112), which requires that accrual accounting be used to value the cost of
benefits provided to former or inactive employees who have not yet retired.
The benefits covered by the statement include salary continuation, disability,
severance, and health care. The statement will be effective for the Company's
1995 fiscal year, and could require a cumulative catch-up charge against
income, measured as of the beginning of fiscal 1995. The Company is currently
evaluating the impact of this statement; however, it is not expected to be
significant.
<PAGE>29
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements
Page
Report of Independent Accountants for
each of the three fiscal years in the
period ended February 28, 1994. . . . . . . . . . . . . . . . . . . . . .27
Financial Statements:
Consolidated Balance Sheets at February 28, 1994 and 1993 . . . . . . . . .28
Consolidated Statements of Income for each of
the three fiscal years in the period ended
February 28, 1994. . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Consolidated Statements of Stockholders' Equity for
each of the three fiscal years in the period
ended February 28, 1994. . . . . . . . . . . . . . . . . . . . . . . . . .30
Consolidated Statements of Cash Flows
for each of the three fiscal years in
the period ended February 28, 1994 . . . . . . . . . . . . . . . . . . . .31
Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . .32
<PAGE>30
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
of Mark IV Industries, Inc.
We have audited the accompanying consolidated balance sheets of Mark IV
Industries, Inc. and subsidiaries as of February 28, 1994 and 1993, and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three fiscal years in the period ended February 28, 1994.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Mark IV Industries, Inc. and subsidiaries as of February 28, 1994 and 1993,
and consolidated results of its operations and its cash flows for each of the
three fiscal years in the period ended February 28, 1994, in conformity with
generally accepted accounting principles.
As discussed in Notes 10 and 12 to the consolidated financial statements, the
Company changed its method of accounting for income taxes and postretirement
benefits other than pensions, in accordance with statements of the Financial
Accounting Standards Board.
COOPERS & LYBRAND
Rochester, New York
March 29, 1994, except as
to the information presented
in the first and second
paragraphs of Note 13 and
in the first paragraph of
Note 14, for which the
date is April 8, 1994
<PAGE>31
<TABLE>
<CAPTION>
MARK IV INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
FEBRUARY 28, 1994 AND 1993
(Dollars in Thousands)
ASSETS 1994 1993
____ ____
(As Restated)
<S> <C> <C>
Current Assets:
Cash $ 500 $ 2,700
Accounts receivable 275,100 228,100
Inventories 265,000 243,800
Other current assets 42,100 21,800
Total current assets 582,700 496,400
Pension related and other
non-current assets 126,300 114,100
Property, plant and equipment, net 365,300 318,300
Cost in excess of net assets acquired
and deferred charges 208,000 196,000
TOTAL ASSETS $1,282,300 $1,124,800
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current maturities of debt $ 45,000 $ 34,800
Accounts payable 99,700 77,600
Compensation related liabilities 43,100 39,600
Accrued interest 13,600 14,200
Accrued expenses and other liabilities 67,000 45,100
Income taxes payable 1,500 9,700
Total current liabilities 269,900 221,000
Long-Term Debt:
Senior debt 195,000 194,300
Subordinated debt 372,200 302,800
Total long-term debt 567,200 497,100
Other non-current liabilities 99,800 61,100
Stockholders' Equity:
Common stock - $.01 par value;
Authorized 100,000,000 shares;
Issued 42,697,864 shares in 1994 and
42,188,178 shares in 1993 400 400
Additional paid-in capital 261,500 219,300
Retained earnings 88,600 128,300
Foreign currency translation adjustment (5,100) (2,400)
Total stockholders' equity 345,400 345,600
TOTAL LIABILITIES
& STOCKHOLDERS' EQUITY $1,282,300 $1,124,800
========== ==========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>32
<TABLE>
<CAPTION>
MARK IV INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED THE LAST DAY OF FEBRUARY 1994, 1993 and 1992
(Amounts in Thousands, Except Per Share Data)
1994 1993 1992
____ _____ ____
(As Restated) (As Restated)
<S> <C> <C> <C>
Net sales $1,244,200 $1,085,700 $1,004,300
Operating costs:
Cost of products sold 803,500 698,800 641,900
Selling and administration 236,300 215,100 200,600
Research and development 30,900 26,100 24,900
Depreciation and amortization 41,700 32,100 28,300
Total operating costs 1,112,400 972,100 895,700
Operating income 131,800 113,600 108,600
Interest expense 50,100 51,600 64,700
Loss on securities transactions - - 2,400
Income from continuing operations
before provision for taxes 81,700 62,000 41,500
Provision for taxes 30,600 22,900 14,700
Income from continuing operations 51,100 39,100 26,800
Income from discontinued operations,
net of tax - 3,600 2,000
Income before extraordinary items
and cumulative effect of
accounting change 51,100 42,700 28,800
Extraordinary loss from early
extinguishment of debt, net of tax
benefit of $12,300; $2,000; and $2,500 (21,700) (3,700) (4,500)
Cumulative effect of a change in
accounting principle (26,000) - -
NET INCOME $ 3,400 $ 39,000 $ 24,300
========== ========== ==========
Net income per share of common stock:
Primary:
Income from continuing operations $ 1.20 $ .93 $ .81
Income from discontinued operations - .09 .06
Extraordinary loss (.51) (.09) (.14)
Cumulative effect of a change in
accounting principle (.61) - -
NET INCOME $ .08 $ .93 $ .73
========== ========== ==========
Fully-diluted:
Income from continuing operations $ 1.09 $ .87 $ .74
Income from discontinued operations - .07 .05
Extraordinary loss (.43) (.07) (.12)
Cumulative effect of a change in
accounting principle (.51) - -
NET INCOME $ .15 $ .87 $ .67
========== ========== ==========
Weighted average shares outstanding:
Primary 42,481 41,993 33,140
========== ========== ==========
Fully-diluted 50,747 50,325 38,358
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>33
<TABLE>
<CAPTION>
MARK IV INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED THE LAST DAY OF FEBRUARY 1994, 1993 AND 1992
(Dollars in Thousands Except Per Share Data)
Retained Foreign
Additional Earnings Currency
Common Paid-in (As Translation
Stock Capital Restated) Adjustment
______ ________ ________ __________
<S> <C> <C> <C> <C>
Balance at February 28, 1991 $ 300 $ 66,400 $134,600 $ 3,600
Net income for fiscal 1992 24,300
Cash dividends of $.066 per share (2,400)
Retirement of treasury stock (100) (34,800)
Public sale of common
stock at $7.50 per share 100 60,400
Sale of common stock to
Pension Plan at $9.79 per share 6,800
Conversion of 7%
Convertible Debentures 100 55,900
Exercise of stock options 100
Translation adjustments (3,400)
Balance at February 29, 1992 400 154,800 156,500 200
Net income for fiscal 1993 39,000
Cash dividends of $.084 per share (3,600)
Stock dividend of 5%
issued in July 1992 27,900 (27,900)
Stock dividend of 5%
issued in May 1993 35,700 (35,700)
Exercise of stock options 900
Translation adjustments (2,600)
Balance at February 28, 1993 400 219,300 128,300 (2,400)
Net income for fiscal 1994 3,400
Cash dividends of $.098 per share (4,200)
Stock dividend of 5% issued
in April 1994 38,900 (38,900)
Restricted stock grants, net 800
Conversion of 6-1/4% Convertible
Debentures 100
Exercise of stock options,
including related tax benefits 2,400
Translation adjustments (2,700)
Balance at February 28, 1994 $ 400 $261,500 $ 88,600 $ (5,100)
===== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>34
<TABLE>
<CAPTION>
MARK IV INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED THE LAST DAY OF FEBRUARY 1994, 1993 AND 1992
(Dollars in Thousands)
1994 1993 1992
____ ____ ____
(As Restated) (As Restated)
<S> <C> <C> <C>
Cash flows from operating activities:
Income from continuing operations $ 51,100 $ 39,100 $ 26,800
Items not affecting cash:
Depreciation and amortization 41,700 32,100 28,300
Pension and compensation related (12,400) (12,500) (10,700)
Deferred income taxes 10,800 3,900 2,200
Net cash provided by earnings 91,200 62,600 46,600
Changes in assets and liabilities, net
of effects of businesses acquired and
discontinued:
Accounts receivable (27,200) (12,000) 25,600
Inventories (7,700) 1,300 22,300
Other assets (5,700) 6,000 1,900
Accounts payable (2,600) 3,800 3,800
Other liabilities (8,400) (21,400) (15,400)
Net cash provided by
continuing operations 39,600 40,300 84,800
Discontinued operations,
before non-cash items 1,100 8,800 7,200
Extraordinary items, before
deferred charges (30,100) (4,900) (6,200)
Net cash provided
by operating activities 10,600 44,200 85,800
Cash flows from investing activities:
Acquisitions (65,000) (4,000) (9,300)
Divestitures 35,000 12,200 -
Purchase of plant and equipment, net (38,000) (32,900) (19,200)
Proceeds from sale of assets - 1,300 23,000
Net cash used in investing activities (68,000) (23,400) (5,500)
Cash flows from financing activities:
Credit agreement borrowings, net (30,000) 65,000 (116,500)
Multi-currency credit agreement
borrowings, net 48,400 - -
Purchases of senior and
subordinated debt (190,200) (62,800) (121,700)
Issuance of subordinated debt 258,000 - 114,300
Other changes in long-term debt, net (18,900) (33,600) (18,600)
Changes in short-term bank borrowings (8,300) 11,700 (3,800)
Common stock transactions 800 900 67,400
Cash dividends paid (4,100) (3,300) (2,400)
Net cash provided by (used in)
financing activities 55,700 (22,100) (81,300)
Effect of exchange rate fluctuations (500) (600) (300)
Net decrease in cash (2,200) (1,900) (1,300)
Cash and cash equivalents:
Beginning of the year 2,700 4,600 5,900
End of the year $ 500 $ 2,700 $ 4,600
======== ======== ========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>35
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
all of its subsidiaries. All significant intercompany transactions have been
eliminated.
Foreign Currency
The assets and liabilities of the Company's foreign subsidiaries are
translated at year-end exchange rates. Translation gains and losses are not
included in determining net income, but are accumulated in a separate
component of stockholders' equity. Foreign currency transactions are included
in income as realized, and amounted to gains (losses) of $300,000; ($700,000)
and $300,000 in fiscal 1994, 1993, and 1992, respectively. During fiscal
1994, the Company entered into foreign currency forward contracts, of which
the notional amount outstanding was $27,000,000 at February 28, 1994. The
forward contracts hedge transactions in existing non-U.S. dollar denominated
inter-company receivables and payables.
Net Income Per Share of Common Stock
Primary net income per share is calculated on the basis of the weighted
average number of shares outstanding during each period, adjusted for
subsequent stock distributions. Common stock equivalents which would arise
from the exercise of stock options, using the treasury stock method, were not
significant and have not been included in the calculation.
Fully-diluted net income per share, in addition to the weighted average
determined above, includes common stock equivalents which would arise from the
exercise of stock options using the treasury stock method, and assumes the
conversion of the Company's 6-1/4% and 7% Convertible Subordinated Debentures
(for the periods outstanding), as well as the elimination of related interest
expense, net of income tax effects.
All income per share amounts have been calculated as if the stock split
distributed in April 1992, and the stock dividends distributed in April 1994,
May 1993 and July 1992 had occurred on March 1, 1991, the beginning of fiscal
1992. The weighted average number of shares outstanding have been determined
as if shares issued pursuant to the stock distributions had been issued at
that date and income per share amounts for fiscal 1993 and 1992 have been
restated accordingly.
<PAGE>36
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Changes in Accounting Policies
As discussed in Note 10, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 109, Accounting for Income Taxes, effective March 1,
1993, the beginning of fiscal 1994. The Company adopted SFAS No. 109 by
restating prior years' financial statements for all years back to and
including fiscal 1986. As discussed in Note 12, the Company also adopted SFAS
No. 106, Employers' Accounting for Postretirement Benefits Other Than
Pensions, as of March 1, 1993. The Company adopted SFAS No. 106 by the
immediate recognition of its accumulated benefit obligation.
Statements of Cash Flows
For purposes of cash flows, the Company considers overnight investments as
cash equivalents. Interest and investment earnings are netted against
interest expense and amounted to approximately $400,000; $300,000; and
$700,000 in fiscal 1994, 1993 and 1992, respectively. The Company paid
interest of approximately $52,900,000; $58,700,000; and $74,100,000 in fiscal
1994, 1993 and 1992, respectively. Such amounts include $2,200,000; $5,000,000
and $6,400,000 allocated to the costs of discontinued operations in fiscal
1994, 1993 and 1992, respectively. The Company paid income taxes of
approximately $13,700,000; $11,800,000; and $7,700,000 in fiscal 1994, 1993
and 1992, respectively. Liabilities recorded in connection with businesses
acquired, excluding bank indebtedness, amounted to approximately $82,000,000;
$3,600,000; and $63,800,000 in fiscal 1994, 1993 and 1992, respectively.
2. Acquisition
On June 2, 1993, the Company purchased the stock and assets comprising Pirelli
Trasmissioni Industriali S.p.A. ("PTI"), the power transmission business of
Pirelli S.p.A., for approximately $115,000,000. PTI is a manufacturer of a
variety of timing belts, v-belts, v-ribbed belts and hydraulic hose sold to
customers in automotive and industrial markets. PTI has manufacturing,
distribution, engineering and marketing operations in six Western European
countries and the United States, and employs approximately 1,500 people
worldwide. PTI is a significant addition to the Company's Power and Fluid
Transfer business segment. The purchase price consisted of $65,000,000 in
cash and the assumption of approximately $50,000,000 of existing bank
indebtedness of PTI and its subsidiaries. The funding for the transaction was
provided substantially by borrowings under the Company's multi-currency credit
agreement.
<PAGE>37
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The acquisition has been accounted for under the purchase method, and the
results of operations of PTI are included in the Company's results of
operations from the date of acquisition. The Company has made a
determination and allocation of the purchase price as of the acquisition date,
consisting of the following (dollars in thousands):
Accounts receivable $37,000
Inventories 34,600
Other current assets 6,700
Current notes payable to banks (18,600)
Accounts payable and other
current liabilities (52,800)
Net working capital acquired 6,900
Fixed assets 77,200
Cost in excess of net assets acquired 33,000
Long-term indebtedness to banks (32,300)
Other non-current items, net (19,800)
Cash purchase price paid at closing $65,000
An independent appraisal firm has been retained by the Company to determine
the fair market value of all of the fixed assets included in the PTI
acquisition. The above amounts are based upon the preliminary results of such
appraisal, and are subject to adjustment to the extent the final valuation
differs from the preliminary determination. The financial position of PTI as
of February 28, 1994 has been included in the accompanying consolidated
balance sheet of the Company as of that date based upon the allocation
identified above. The cost in excess of net assets will be amortized over 40
years.
The following table presents the pro-forma consolidated condensed results of
operations for the fiscal years ended February 28, 1994 and 1993. The pro-
forma amounts give effect to the acquisition of PTI as if it had occurred on
March 1, 1992, the beginning of fiscal 1993. The pro-forma amounts do not
purport to be indicative of the results that actually would have been obtained
had the acquisition taken place on March 1, 1992, nor are they intended to be
a projection of future results (dollars in thousands, except per share data):
1994 1993
(Unaudited)
Net Sales $1,286,700 $1,243,300
Income from continuing operations $ 52,100 $ 42,800
Earnings per share from continuing operations:
Primary $ 1.23 $ 1.02
Fully-diluted $ 1.11 $ .94
<PAGE>38
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Discontinued Operations
Effective May 31, 1993 (the "measurement date") the Company decided to sell
its non-core business units. Such units have been accounted for as
discontinued operations, and their results of operations have been excluded
from continuing operations in the consolidated statement of income for fiscal
1994. The consolidated statements of income for fiscal 1993 and 1992 have
been restated to exclude the discontinued operations in a similar manner.
In June 1993, the Company sold certain of its non-core instruments businesses
for cash consideration of approximately $35,000,000. The businesses sold had
sales of approximately $54 million for the Company's fiscal year ended
February 28, 1993. The proceeds from the sale were used to repay a portion of
the debt incurred to finance the acquisition of PTI, as discussed in Note 2.
The remaining net assets of discontinued operations as of February 28, 1994
amount to approximately $28,100,000. Such amounts have been segregated in the
balance sheet and offset by a corresponding amount of long-term debt, on the
assumption that the net sale proceeds will equal or exceed the net asset
amount, and all such proceeds will be utilized to offset existing borrowings
of the Company.
The results of operations of these discontinued businesses in fiscal 1993 and
1992 were as follows (dollars in thousands):
1993 1992
Sales $136,300 $141,300
Income before provision for taxes $ 5,600 $ 3,100
Provision for taxes 2,000 1,100
Income from discontinued operations $ 3,600 $ 2,000
Sales of the discontinued operations in fiscal 1994 were $26,800,000 through
the measurement date, and approximately $42,300,000 from the measurement date
through February 28, 1994. The related income from these operations has been
deferred until the ultimate disposition of the businesses, which is expected
to occur in fiscal 1995.
4. Accounts Receivable
Accounts receivable are reflected net of allowances for doubtful accounts of
$17,600,000 and $13,000,000 at February 28, 1994 and 1993, respectively. The
amount at February 28, 1993 includes $800,000 related to discontinued
operations.
<PAGE>39
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Inventories
Inventories include contracts in process, and are stated at the lower of cost
or market. The cost of inventories is determined primarily on the last-in,
first-out (LIFO) method. As a result of the fair value determination of
inventories required by the purchase method of accounting for acquired
companies as of their acquisition date, LIFO costs exceed FIFO costs by
approximately $35,000,000 and $39,800,000 at February 28, 1994 and 1993,
respectively. The excess at February 28, 1993 includes $2,800,000 related to
discontinued operations.
Inventories consist of the following at February 28, 1994 and 1993 (dollars in
thousands):
1994 1993
(As Restated)
Raw materials, parts, and sub-assemblies $ 67,700 $ 70,300
Work-in-process 43,500 62,400
Finished goods 157,100 123,500
268,300 256,200
Less progress billings 3,300 12,400
Inventories $265,000 $243,800
The amount at February 28, 1993 includes $21,100,000 related to discontinued
operations, which is net of related progress billings of $10,900,000.
6. Property, Plant and Equipment
Property, plant and equipment is stated at cost and consists of the following
at February 28, 1994 and 1993 (dollars in thousands):
1994 1993
(As Restated)
Land and land improvements $ 35,700 $ 31,800
Buildings 115,700 99,600
Machinery and equipment 324,700 296,700
Total property, plant and equipment 476,100 428,100
Less accumulated depreciation 110,800 109,800
Property, plant and equipment, net $365,300 $318,300
The cost of property, plant and equipment retired or otherwise disposed of,
and the accumulated depreciation thereon, are eliminated from the asset and
related accumulated depreciation accounts, and any resulting gain or loss is
reflected in income. The net amount at February 28, 1993 includes $31,000,000
related to discontinued operations.
<PAGE>40
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company provides for depreciation of plant and equipment on methods and
rates designed to amortize the cost of such plant and equipment over its
useful life. Depreciation is provided principally on the straight-line method
and amounted to approximately $33,200,000; $29,800,000; and $26,900,000 in
fiscal 1994, 1993 and 1992, respectively. Of such amounts, approximately
$4,000,000 and $3,600,000 relates to discontinued operations in fiscal 1993
and 1992, respectively.
7. Cost in Excess of Net Assets Acquired and Deferred Charges
Cost in excess of net assets acquired, net of accumulated amortization,
amounted to approximately $196,100,000 and $187,800,000 at February 28, 1994
and 1993 respectively. The change in fiscal 1994 includes approximately
$33,000,000 related to the Company's PTI acquisition, and also reflects the
elimination of approximately $18,200,000 related to the Company's discontinued
operations. The costs related to continuing operations are being amortized on
the straight-line method over 40-year periods from the acquisition dates of
the respective businesses, and resulted in amortization expense of
approximately $5,700,000; $4,700,000 and $3,900,000 in fiscal 1994, 1993 and
1992, respectively. Accumulated amortization of such costs was approximately
$22,700,000 and $17,000,000 at February 28, 1994 and 1993, respectively.
Deferred charges, net of accumulated amortization, amounted to approximately
$11,900,000 and $8,200,000 at February 28, 1994 and 1993, respectively. Such
amounts include costs incurred in connection with the issuance of the
Company's credit agreements and the sale of subordinated debentures, and are
being amortized over their respective terms.
8. Long-Term Debt
Long-term debt consists of the following at February 28, 1994 and 1993
(dollars in thousands):
1994 1993
Senior debt:
Credit Agreement $140,000 $170,000
Multi-Currency Agreement 48,400 -
Other items 40,500 30,200
Total 228,900 200,200
Less current maturities (5,800) (5,900)
Less amounts allocated
to discontinued operations (28,100) -
Net senior debt 195,000 194,300
Subordinated debt:
8-3/4% Senior Subordinated Notes 258,000 -
6-1/4% Convertible Subordinated Debentures 114,200 114,300
13-3/8% Subordinated Debentures - 188,500
Total subordinated debt 372,200 302,800
Total long-term debt $567,200 $497,100
<PAGE>41
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In July 1993, the Company entered into a Credit Agreement providing for a
$300,000,000 five-year revolving credit facility with a group of financial
institutions. A portion of the credit facility was used to repay amounts
outstanding under the Company's revolving credit facility dated June 19, 1990,
which was then canceled. Interest on the Credit Agreement is based on a
pricing grid which is either prime per annum or, under a LIBOR option, LIBOR
plus 0.375% to LIBOR plus 1.375% per annum based on the Company's senior
unsecured long-term debt ratings (as defined in the Credit Agreement). The
Company is currently paying interest at LIBOR plus 0.75% on borrowings under
the Credit Agreement. The Credit Agreement contains certain affirmative and
negative covenants customary in an agreement of this nature, and is secured by
the stock of certain of the Company's subsidiaries.
In May 1993, the Company entered into a revolving credit agreement ("Multi-
Currency Agreement") providing for a five year multi-currency revolving credit
facility with a group of financial institutions in the U.S. and Europe. The
Multi-Currency Agreement provides for a revolving loan commitment for the
first two years of the equivalent of $100,000,000. The commitment declines by
$12,500,000 at each of six semi-annual dates beginning in June 1995, with the
remaining $25,000,000 of commitment expiring in May 1998. Interest rates on
borrowings under the Multi-Currency Agreement are subject to change based on a
specified pricing grid which increases from LIBOR plus 0.625% to LIBOR plus
1.375% per annum based on the Company's senior debt rating (as defined in the
Multi-Currency Agreement). The Company is currently paying interest at LIBOR
plus 1.25% on borrowings under the Multi-Currency Agreement. The Multi-
Currency Agreement also contains certain affirmative and negative covenants
customary in an agreement of this nature.
In March 1993, the Company completed a public offering of $258,000,000
principal amount of its 8-3/4% Senior Subordinated Notes due April 2003. A
substantial portion of the net proceeds from the sale of the notes was used to
fund the retirement of the Company's 13-3/8% Subordinated Debentures. There
are no sinking fund requirements on the Senior Subordinated Notes and they may
not be redeemed until April 1998. At such date they are redeemable at
104.375% of principal amount, and thereafter at an annually declining premium
over par until April 2001 when they are redeemable at par. The Indenture
limits the payment of dividends and the repurchase of capital stock, and
includes certain other restrictions and limitations customary with
subordinated indebtedness of this type.
The 6-1/4% Convertible Subordinated Debentures are convertible into shares of
the Company's common stock at a conversion price of $14.37 per share, subject
to adjustment. The Company is required to make sinking fund payments
commencing February 2002, calculated to retire 50% of the debentures prior to
their February 2007 maturity. The debentures may not be redeemed until
February 1995. At such date they are redeemable at 104.375% of principal
amount, and thereafter at an annually declining premium over par until
February 2002, when they are redeemable at par.
<PAGE>42
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In March 1993, the Company offered to purchase its 13-3/8% Subordinated
Debentures for a cash price of $1,137.50 per $1,000 principal amount, plus
accrued interest. As a result of the offer, and certain open-market
purchases, the Company acquired approximately $138,000,000 principal amount of
these debentures. The Company then completed an "in-substance defeasance" in
which approximately $60,400,000 was deposited in an irrevocable trust to cover
both the remaining outstanding principal amount ($52,000,000) and the related
interest expense requirements of these debentures. The Company recognized an
extraordinary loss, net of tax, of approximately $21,700,000 as a result of
the extinguishment of this debt in fiscal 1994. The Company also acquired or
defeased approximately $63,000,000 and $122,000,000 of its indebtedness and
recognized an extraordinary loss, net of tax, of $3,700,000 and $4,500,000 in
fiscal 1993 and 1992, respectively.
The fair value of the 6-1/4% Convertible Subordinated Debentures exceeds their
recorded value by approximately $48,000,000 as of February 28, 1994, based
upon the quoted market value of the debentures as of that date. The fair
value of the 8-3/4% Senior Subordinated Notes exceeds their recorded value by
approximately $6,000,000 as of February 28, 1994, based upon the quoted market
value of such notes as of that date. Since the rest of the Company's notes
payable and senior debt are primarily floating rate debt, their recorded
amounts approximate their fair values as of February 28, 1994. The recorded
amounts for other financial instruments, such as cash and accounts receivable,
approximate their fair value.
Annual maturities of the Company's long-term debt for the next five fiscal
years are: 1995-$5,800,000; 1996-$18,200,000; 1997-$4,000,000; 1998-
$26,900,000; and 1999-$138,200,000.
9. Leases
The Company has operating leases which expire at various dates through 2002
with, in some instances, renewal privileges. Certain leases provide for
escalation of the rentals primarily for increases in maintenance costs and
property taxes. Total rental expense for continuing operations under
operating leases was $15,900,000; $15,900,000; and $15,400,000 in fiscal 1994,
1993 and 1992, respectively.
Minimum rental payments under operating leases of continuing operations and
having an initial or remaining noncancellable term in excess of 12 months are:
1995-$13,200,000; 1996-$11,200,000; 1997-$10,100,000; 1998-$9,100,000;
1999-$7,400,000; 2000 and thereafter $22,100,000.
<PAGE>43
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. Income Taxes
The company adopted Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes (SFAS No. 109), in fiscal 1994. The adoption of
this standard changed the Company's method of accounting for income taxes from
the deferred method to the liability method. The Company adopted SFAS No. 109
retroactively by restating prior years' financial statements for all years
back to and including fiscal 1986.
Income from continuing operations and the related provision for taxes under
SFAS No. 109 for fiscal 1994, 1993 and 1992 consists of the following (dollars
in thousands):
1994 1993 1992
(As Restated) (As Restated)
Income from continuing operations
before provision for taxes:
United States $45,800 $41,400 $27,800
Foreign 35,900 20,600 13,700
Total income from continuing
operations before provision
for taxes $81,700 $62,000 $41,500
Provision for taxes on income from
continuing operations:
Currently payable:
United States $14,500 $10,900 $ 6,900
Foreign 5,300 8,100 5,600
Total currently payable 19,800 19,000 12,500
Deferred:
United States 3,600 4,200 2,800
Foreign 7,200 (300) (600)
Total deferred 10,800 3,900 2,200
Total provision for taxes $30,600 $22,900 $14,700
The cumulative effect of the January 1993 increase in the U.S. statutory tax
rate was not significant. As a result of the exercise of certain employees'
incentive stock options, the Company realized a tax benefit of $1,700,000
which has been recognized as a direct increase in additional paid-in capital.
<PAGE>44
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The tax effects of temporary differences which give rise to a significant
portion of deferred tax assets (liabilities) consist of the following at
February 28, 1994 and 1993 (dollars in thousands):
1994 1993
____ ____
Current:
Accounts receivable $ 3,900 $ 3,000
Inventories (9,500) (9,500)
Compensation related 3,400 3,100
Tax credit and net
operating loss carryforwards 9,000 -
Other items 7,500 800
Total current asset (liability) 14,300 (2,600)
Valuation allowance (4,000) -
Net current asset (liability) $ 10,300 $ (2,600)
Non-current:
Fixed and intangible assets $(39,500) $(47,800)
Pension and other benefit plans (21,400) (31,800)
Tax credit and net
operating loss carryforwards 29,400 35,900
Capital loss carryforwards 11,300 19,300
All other items 19,600 23,400
Total non-current liability (600) (1,000)
Valuation allowance (16,800) (19,300)
Net non-current liability $(17,400) $(20,300)
The net current amount is included in other current assets at February 28,
1994, and in income taxes payable at February 28, 1993. The net non-current
amount is included in other non-current liabilities at February 28, 1994 and
1993.
The current valuation allowance offsets foreign tax benefits established in
the PTI acquisition which may not be realized. To the extent the benefits are
realized, the valuation allowance will be reversed with a corresponding
reduction in the cost in excess of net assets acquired resulting from the PTI
acquisition. The non-current valuation allowance is primarily attributable to
the capital loss carryforwards, which are available to use primarily through
fiscal 1996. The change in the non-current valuation allowance relates to
capital loss carryforward benefits realized in discontinued operations.
<PAGE>45
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Management of the Company has determined, based on the Company's history of
prior operating earnings and its expectations for the future, that operating
income will more likely than not be sufficient to utilize the tax credit and
net operating loss carryforwards in their carryforward periods, which run
substantially through fiscal 2007. The undistributed earnings of the
Company's foreign subsidiaries have been reinvested in each country, and are
not expected to be remitted back to the parent company. Accordingly, no
federal income taxes have been provided on such earnings as of February 28,
1994. The determination of the possible tax effect relating to such
reinvested income is not practicable.
The provision for taxes on income from continuing operations for fiscal 1994,
1993, and 1992 differs from the amount computed using the United States
statutory income tax rate as follows (dollars in thousands):
1994 1993 1992
____ ____ ____
(As Restated) (As Restated)
Expected tax at United States
statutory income tax rate $28,600 $21,100 $14,100
Permanent differences 1,200 900 400
State and local income taxes 1,200 600 700
Tax credits (500) (400) (800)
Foreign tax rate differences 100 700 300
Total provision for taxes $30,600 $22,900 $14,700
As a result of prior acquisitions, the retroactive adoption of SFAS No. 109
resulted in increases in property, plant and equipment of $17,800,000; cost in
excess of net assets acquired of $43,000,000; deferred tax assets of
$19,000,000 and deferred tax liabilities of $79,800,000. The adoption of SFAS
No. 109 also resulted in a cumulative decrease in stockholders' equity as of
February 28, 1991 of $7,800,000, which adjustment included increased tax
expense for preceding years through fiscal 1991 of $800,000. The increase in
property, plant and equipment and cost in excess of net assets acquired
resulted in increased depreciation and amortization in prior years of
approximately $2,500,000 per year, of which $2,000,000 relates to continuing
operations, and $500,000 relates to discontinued operations. The effects of
this accounting change on the results of continuing operations for fiscal 1993
and 1992 are as follows (dollars in thousands, except per share data):
1993 1992
____ ____
Income from continuing operations
before provision for taxes $(2,000) $(2,000)
Provision for taxes (600) 300
Income from continuing operations $(2,600) $(1,700)
Income per share from continuing operations:
Primary $ (.06) $ (.05)
Fully-diluted $ (.05) $ (.04)
<PAGE>46
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. Pension and Profit Sharing Plans
The Company has a variety of defined benefit plans covering both union and
non-union employees. Under the union plans, employee benefits are computed
based on a dollar amount multiplied by the number of years of service.
Benefits under the non-union plans are computed in a similar manner for
certain plans, and based on the employees' earnings in other plans.
The following table sets forth the funded status of the defined benefit plans
and the amounts recognized in the Company's consolidated balance sheets at
February 28, 1994 and 1993 (dollars in thousands):
1994 1993
____ ____
(As Restated)
Actuarial present value of benefit obligations:
Vested $(233,300) $(202,900)
Accumulated $(236,100) $(204,800)
Projected $(241,900) $(211,100)
Plan assets at fair value 314,300 300,100
Plan assets in excess of projected
benefit obligation 72,400 89,000
Unrecognized net loss and
differences in assumptions 36,400 6,800
Unrecognized prior service costs 3,100 2,600
Prepaid pension cost recognized in the
consolidated balance sheets $ 111,900 $ 98,400
========= =========
The plans' assets consist of corporate and government bonds, guaranteed
investment contracts, listed common stocks and real estate investments.
Included in the plans' assets are common stock of the Company with a market
value of approximately $16,500,000 and the Company's 6-1/4% and 8-3/4%
subordinated debentures with a market value of $11,800,000 at February 28,
1994.
Net pension income for the defined benefit plans in fiscal 1994, 1993, and
1992 includes the following components (dollars in thousands):
1994 1993 1992
(As Restated) (As Restated)
Service cost-benefits
earned during the period $ (2,900) $ (2,700) $ (2,500)
Interest cost on projected
benefit obligation (18,200) (17,300) (16,900)
Actual return on assets 32,100 36,600 36,400
Net amortization and deferral 2,500 (4,100) (6,300)
Net pension income $ 13,500 $ 12,500 $ 10,700
======== ======== ========
<PAGE>47
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following assumptions were utilized to measure net pension income for each
of the fiscal years presented, as well as the projected benefit obligation as
of the end of the fiscal years:
1994 1993 1992
____ ____ ____
Discount rate 7.75% 9.00% 9.00%
Expected long-term rate of return 12.00% 12.00% 12.00%
Average increase in compensation 5.00% 5.00% 5.00%
As a result of the change in the discount rate, the projected benefit
obligation as of February 28, 1994 is approximately $25,000,000 more than it
would have been using the previous 9% discount rate. The change had no effect
on net pension income in fiscal 1994, and is expected to reduce pension income
in fiscal 1995 by approximately $500,000.
The Company also has defined contribution pension and profit sharing plans for
a significant number of its salaried and hourly employees. The Company's
contributions to these plans is based on various percentages of compensation,
and in some instances is based upon the amount of the employees' contributions
to the plans. The annual cost of these plans amounted to approximately
$6,700,000; $6,600,000; and $6,000,000 in fiscal 1994, 1993 and 1992,
respectively.
12. Postretirement Benefits
The Company currently provides health and life insurance benefits to a number
of existing retirees from certain of its operations under the provisions of a
number of different plans. Contributions currently required to be paid by the
retirees towards the cost of such plans range from zero to 100%. The Company
also has a number of active employees who might receive such benefits upon
their retirement. The plans which relate to retirees and active non-union
employees include provisions which allow the Company to increase the cost to
participants, or otherwise modify or terminate them as determined by
management. The plans which relate to active union employees are subject to
modification in the same manner as are all other compensation and benefits
matters in the process of the Company's negotiations of contracts covering its
union employees. The cash cost incurred by the Company for its retirees
amounted to approximately $4,600,000; $3,600,000; and $3,300,000 in fiscal
1994, 1993 and 1992, respectively. Through fiscal 1993, the Company accounted
for the cost of these postretirement benefits on the cash basis as they were
paid.
<PAGE>48
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Financial Accounting Standards Board (FASB) issued Statement No. 106,
Employers Accounting for Postretirement Benefits Other Than Pensions (SFAS No.
106) in December 1990. SFAS No. 106 requires the estimated present-value of
the Company's liability for its commitments to provide health and life
insurance benefits to its retirees to be included in the balance sheet, either
entirely as of the date of adoption, or over a transition period. Such
liability is referred to as the Accumulated Benefit Obligation (ABO). The
related expense is required to be recognized on the accrual method over the
remaining years of the employees' active service, up to the dates of
individual eligibility to retire and begin receiving the benefit. The Company
adopted this new accounting rule as of March 1, 1993, the beginning of fiscal
1994. Prior to its adoption of SFAS No. 106, the Company advised the
participants of certain plan design changes, including the establishment of
caps on the amount of annual expense to be incurred by the Company. The
participants are now required to pay 100% of the excess of costs incurred over
the established annual caps, in addition to whatever contribution percent is
required of the retirees for amounts incurred up to the amount of the caps.
Actuarial calculations indicate the Company's actual costs are not expected to
reach the substantial majority of the caps until fiscal 1996, and assume an
annual health-care cost trend rate of 10% until that time.
The Company adopted SFAS No. 106 by recognizing the ABO entirely in fiscal
1994. The ABO was calculated on an actuarial basis using a 9% discount rate,
and amounted to approximately $40,000,000 as of the March 1, 1993 adoption
date. Since the Company also adopted SFAS No. 109 - Accounting for Income
Taxes at the same date, the Company recognized a deferred tax asset of
$14,000,000 representing the future tax benefits to be received related to the
ABO. The resulting net charge of $26,000,000 ($.51 per fully diluted share)
from the adoption of SFAS No. 106 has been included as the cumulative effect
of a change in accounting principle in the consolidated statement of income
for fiscal 1994. The company continues to fund such costs on the cash-basis,
and such cash costs for these plans in fiscal 1994 have been charged against
the ABO.
The ABO for fiscal 1994, and the reconciliation to the amount provided in the
consolidated balance sheet, is comprised of the following elements (dollars in
thousands):
Fiscal 1994
_______________________
End Beginning
of the year of the year
___________ ___________
Accumulated post-retirement benefit obligation:
Retirees and beneficiaries receiving benefits $34,700 $29,300
Active employees, fully eligible for benefits 4,600 4,900
Active employees,
not fully eligible for benefits 6,500 5,800
Total accumulated benefit obligation 45,800 40,000
Unrecognized net loss (6,600) -
Post-retirement benefit liability
recognized in the balance sheet $39,200 $40,000
======= =======
<PAGE>49
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company's postretirement benefit expense for fiscal 1994 on the accrual
method was $3,800,000. The expense is made up of a service cost for active
employees of $400,000 and interest on the ABO of $3,400,000. Such cost was
approximately $800,000 less than the cash-basis expense for the year, or
$500,000 after tax effects ($.01 per share). The unrecognized net loss is
primarily the result of a change in the discount rate from 9% at the beginning
of the year to 7-3/4% at the end of the year, plus the excess of the cash-
basis expense over the accrual basis expense. The change in the discount rate
and the amortization of the unrecognized net loss will not have a significant
effect on the Company's postretirement benefit expense for fiscal 1995. As a
result of the cost caps, a 1% change in the health-care cost trend rate would
have a nominal effect on the Company's ABO and annual cost.
13. Legal Proceedings
A subsidiary of the Company was the defendant in a patent infringement case
which was tried in the latter part of fiscal 1994. The decision of the Court
was reached in April 1994 in favor of the plaintiff, awarding them damages and
issuing an injunction which prohibits the Company from any further use of the
technology at issue. Prior to the court's decision, the Company had stopped
using the technology in question; therefore, the injunction will have no
impact on the Company's future sales and marketing efforts. If the judgement
for the plaintiff is upheld on appeal, the after-tax cost to the Company could
be in the range of $2,300,000. Management of the Company has been advised by
its legal counsel as to the merits of its arguments, and continues to believe
it has not infringed on the plaintiff's patent.
In view of the above, management has directed its legal counsel to pursue the
appeal process as diligently as possible. Management believes the ultimate
conclusions of law will be decided upon by the appeals court in favor of the
Company. However, in view of the trial court's findings, an accrual has been
established to provide for the cost of the resolution of this issue in the
event the Company is not successful. The litigation accrual did not have an
effect on income, since the effects of establishing it have been offset by the
reversal of accrued liabilities related to an acquisition in fiscal 1991 which
management has determined are no longer required.
The Company is involved in various other legal and environmental related
issues. In the opinion of the Company's management, the ultimate cost to
resolve these matters will not have a material adverse effect on the Company's
financial position.
14. Stockholders' Equity and Stock Options
The Company's Board of Directors declared five percent stock dividends which
were distributed in April 1994, May 1993 and July 1992, and a three-for-two
stock split in fiscal 1992. All earnings per share amounts have been
calculated as if the stock distributions had occurred on March 1, 1991, the
beginning of fiscal 1992. As a result of these stock distributions, the
conversion price of the Company's 6-1/4% Convertible Subordinated Debentures
is $14.37 per share and approximately 7,944,000 shares have been reserved for
such conversion.
<PAGE>50
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In December 1993, the Company's Board of Directors authorized the repurchase
of approximately 4,200,000 shares, or approximately 10 percent of the
Company's outstanding common stock. This authorization, in addition to
authorizations remaining from previous years, gives the Company the authority
to repurchase a total of 6,400,000 additional shares, or 15% of its
outstanding common stock as of February 28, 1994. The Company did not acquire
any of its common stock in fiscal 1994 or fiscal 1993.
The Company's Incentive Stock Option Plans provide for granting officers and
other key employees options to purchase the Company's common stock at an
exercise price equal to 100% of the market price on the date of grant. The
options may be exercised in cumulative annual increments of 25% commencing one
year after the date of grant, and have a maximum duration of seven to ten
years. There were 1,449,467 and 1,447,735 shares reserved for the future
granting of options at February 28, 1994 and 1993.
The following table summarizes the Company's stock option transactions for
fiscal 1994, 1993 and 1992:
1994 1993 1992
_________________ ________________ _______________
Average Average Average
Option Option Option Option Option Option
Shares Price Shares Price Shares Price
______ ______ ______ _____ ______ ______
Balance at
beginning
of year 737,285 $ 7.65 843,097 $ 4.25 526,175 $2.94
Activity during
the year:
Granted 13,650 $19.29 233,399 $13.05 342,078 $6.26
Exercised (167,314) $ 3.88 (335,738) $ 3.00 (24,941) $2.65
Canceled (15,383) $ 9.64 (3,473) $ 6.19 (215) $3.49
Balance at
end of year:
Outstanding 568,238 $ 8.98 737,285 $ 7.65 843,097 $4.25
======= ======= =======
Exercisable 255,050 $ 7.17 258,841 $ 4.12 486,661 $2.90
======= ======= =======
The Company's Board of Directors established a Restricted Stock Plan in fiscal
1993. In fiscal 1994, the Company granted certain executives restricted stock
awards with respect to 336,262 shares at $.01 par value per share. As a
result, common stock and additional paid-in capital have been increased by a
total of $6,600,000 based upon the market value of the stock as of the grant
date. The restrictions on the stock lapse after a five year period, or sooner
if certain performance measurements of the Company are achieved. Therefore,
the expense will be recognized as it is earned over the restriction period,
with $800,000 recognized as an expense in fiscal 1994. The unearned balance
of $5,800,000 as of February 28, 1994 has been presented as an offset to
additional paid-in capital. Approximately 50,000 shares remain available for
issuance under this plan as of February 28, 1994.
<PAGE>51
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
At a special meeting of the company's stockholders in December 1991, the
Company's Certificate of Incorporation was amended to increase the authorized
shares of the Company's common stock, from 25,000,000 to 100,000,000 and to
increase the authorized shares of the Company's preferred stock, from
1,000,000 to 10,000,000. There are no shares of preferred stock outstanding
at the present time.
15. Industry Segments and Geographic Areas
As a result of the Company's discontinuance and sale of certain of its non-
core businesses in fiscal 1994 and 1993, and its PTI acquisition in June 1993,
it has modified its industry segment definitions and descriptions for fiscal
1994. The Company now classifies its operations into the following three core
business segments:
(i) Power and Fluid Transfer, which includes the design and manufacture
of automotive aftermarket and OEM belts, hose, couplings, accessory
drive systems and fluid transfer assemblies; industrial belts, hose
and fittings, and garden hose.
(ii) Transportation, which includes the design and manufacture of
products and systems for mass transit, such as door systems,
lighting, and informational display devices and applications for bus
and rail transit vehicles; traffic, such as advanced traffic control
and management systems, directional information and warning signs
for roads and highways, and automatic (intelligent) vehicle
identification for toll collection and traffic control; and
commercial aviation, such as aircraft interior lighting and air-
diffusion, and aircraft emergency lighting and night vision
compatibility.
(iii) Professional Audio, which includes the design and manufacture of
products and systems used primarily in the high-performance
professional audio market, such as professional performance
microphones, speakers, mixers, and amplifiers; high-fidelity public
address and musical instrument loudspeaker systems; audio signal
processors, sound reinforcement equipment, and sound enhancement and
noise canceling equipment.
<PAGE>52
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The continuing operations and classifications for fiscal 1993 and 1992 have
been presented in a manner consistent with the information presented for
fiscal 1994. All sold or discontinued operations have been excluded from the
following industry segment and geographic information, and included in the
Corporate category where applicable. Information concerning the Company's
business segments for fiscal 1994, 1993 and 1992 is as follows (dollars in
thousands):
1994 1993 1992
__________ ____________ ____________
(As Restated) (As Restated)
NET SALES TO CUSTOMERS
Power and Fluid Transfer $ 852,100 $ 709,400 $ 635,200
Transportation 218,600 199,500 199,900
Professional Audio 173,500 176,800 169,200
Total net sales
to customers $1,244,200 $1,085,700 $1,004,300
========== ========== ==========
OPERATING INCOME
Power and Fluid Transfer $ 97,800 $ 79,200 $ 67,000
Transportation 27,000 24,900 27,100
Professional Audio 21,900 22,000 23,900
Total operating income 146,700 126,100 118,000
General corporate (14,900) (12,500) (9,400)
Interest expense and loss
on securities transactions (50,100) (51,600) (67,100)
Income from continuing
operations, before
provision for taxes $ 81,700 $ 62,000 $ 41,500
========== ========== ==========
IDENTIFIABLE ASSETS
Power and Fluid Transfer $ 826,000 $ 622,500 $ 618,400
Transportation 236,100 220,600 194,900
Professional Audio 162,700 158,900 159,400
General corporate 57,500 122,800 131,800
Total
identifiable assets $1,282,300 $1,124,800 $1,104,500
========== ========== ==========
DEPRECIATION AND AMORTIZATION
Power and Fluid Transfer $ 27,500 $ 19,100 $ 16,500
Transportation 7,100 6,700 5,600
Professional Audio 4,500 4,400 4,300
General corporate 2,600 1,900 1,900
Total depreciation
and amortization $ 41,700 $ 32,100 $ 28,300
========== ========== ==========
CAPITAL OUTLAYS
Power and Fluid Transfer $ 31,900 $ 25,800 $ 13,100
Transportation 7,000 6,800 4,300
Professional Audio 2,500 1,700 1,600
General corporate - 1,200 1,700
Total capital outlays $ 41,400 $ 35,500 $ 20,700
========== ========== ==========
<PAGE>53
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Operating income represents total revenues less operating expenses, and
excludes general corporate expenses, interest expense and income taxes.
Litigation costs are considered to be corporate expenses. Identifiable assets
are those assets employed in each segment's operation, including an allocated
value to each segment of cost in excess of net assets acquired. Corporate
assets consist primarily of cash, marketable securities, investments and
assets not employed in production and net assets of discontinued operations.
The Company's foreign operations are located primarily in Europe, and to a
lesser extent in Canada and the Far East. Information concerning the
Company's operations by geographic area for fiscal 1994, 1993 and 1992 is as
follows (dollars in thousands):
1994 1993 1992
__________ _____________ ____________
(As Restated) (As Restated)
NET SALES TO CUSTOMERS
United States $ 884,500 $ 815,200 $ 798,500
Foreign 359,700 270,500 205,800
Total net sales
to customers $1,244,200 $1,085,700 $1,004,300
========== ========== ==========
OPERATING INCOME
United States $ 105,700 $ 102,100 $ 99,700
Foreign 41,000 24,000 18,300
Total operating income $ 146,700 $ 126,100 $ 118,000
========== ========== ==========
IDENTIFIABLE ASSETS
United States $ 898,700 $ 916,800 $ 873,400
Foreign 383,600 208,000 231,100
Total identifiable assets $1,282,300 $1,124,800 $1,104,500
========== ========== ==========
The net sales to customers reflect the sales of the operating units in each
geographic area to unaffiliated customers. Export sales from the United
States to unaffiliated customers were $71,300,000; $67,800,000 and $66,500,000
in fiscal 1994, 1993, and 1992, respectively. Inter-segment sales are not
material. Sales between geographic areas are accounted for at prices which
are competitive with prices charged to unaffiliated customers.
<PAGE>54
<TABLE>
<CAPTION>
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. Quarterly Financial Data and Information (Unaudited)
The following table sets forth the unaudited quarterly results of operations for
each of the fiscal quarters in the years ended February 28, 1994 and 1993. As a
result of the decision to discontinue the Company's non-core businesses and the
adoption of SFAS No. 109, the Company's results of operations for each of its
fiscal quarters in the year ended February 28, 1993 have been restated (dollars in
thousands, except per share data):
First Second Third Fourth Total
Fiscal 1994 Quarter Quarter Quarter Quarter Year
___________ _______ _______ _______ _______ _____
<S> <C> <C> <C> <C> <C>
Net sales $287,800 $316,600 $320,000 $319,800 $1,244,200
Gross profit (a) $102,000 $110,800 $113,800 $114,100 $ 440,700
Income from
continuing operations $ 13,600 $ 13,100 $ 12,800 $ 11,600 $ 51,100
Extraordinary items (21,700) - - - (21,700)
Cumulative effect of
accounting change (26,000) - - - (26,000)
________ _________ ________ _________ __________
Net income $(34,100) $ 13,100 $ 12,800 $ 11,600 $ 3,400
======== ========= ======== ========= ==========
Income per share (b) (c):
Primary:
Continuing operations $ .32 $ .31 $ .30 $ .27 $ 1.20
Extraordinary items (.51) - . - (.51)
Cumulative effect of
accounting change (.62) - - - (.61)
________ _________ ________ _________ __________
Net income $ (.81) $ .31 $ .30 $ .27 $ .08
======== ========= ======== ========= ==========
Fully-diluted:
Continuing operations $ .29 $ .28 $ .27 $ .25 $ 1.09
Extraordinary items (.43) - - - (.43)
Cumulative effect of
accounting change (.51) - - - (.51)
________ _________ ________ _________ __________
Net income $ (.65) $ .28 $ .27 $ .25 $ .15
======== ========= ======== ========= ==========
Fiscal 1993
___________
Net sales $271,000 $268,600 $270,700 $ 275,400 $1,085,700
Gross profit (a) $ 97,200 $ 95,100 $ 98,000 $ 96,600 $ 386,900
Income from continuing
operations $ 10,300 $ 8,900 $ 10,800 $ 9,100 $ 39,100
Income from discontinued
operations 1,300 2,400 500 (600) 3,600
Extraordinary items - (400) (1,600) (1,700) (3,700)
________ ________ ________ _________ _________
Net income $ 11,600 $ 10,900 $ 9,700 $ 6,800 $ 39,000
======== ======== ======== ========= =========
Income per share (b) (c):
Primary:
Continuing operations $ .25 $ .21 $ .26 $ .22 $ .93
Discontinued operations .03 .06 .01 (.02) .09
Extraordinary items - (.01) (.04) (.04) (.09)
________ ________ ________ _________ _________
Net income $ .28 $ .26 $ .23 $ .16 $ .93
======== ======== ======== ========= =========
Fully-diluted:
Continuing operations $ .23 $ .20 $ .24 $ .20 $ .87
Discontinued operations .02 .05 .01 (.01) .07
Extraordinary items - (.01) (.03) (.03) (.07)
________ ________ ________ _________ _________
Net income $ .25 $ .24 $ .22 $ .16 $ .87
======== ======== ======== ========= =========
<PAGE>55
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<FN>
___________________________________
(a) Excluding depreciation expense.
(b) The sum of the quarterly amounts do not equal the total as a result of
the common stock transactions discussed in Note 14. The impact of those
transactions on the determination of the weighted average number of
shares outstanding is different in each quarter, and for the year in
total.
(c) Restated to reflect the five percent stock dividend issued in April 1994.
</TABLE>
<PAGE>56
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Items 10-13
The information required for Items 10, 11, 12 and 13 has been omitted as
such information will be set forth in the definitive Proxy Statement for the
Company's 1994 Annual Meeting of Stockholders which will be filed with the
Securities and Exchange Commission not later than 120 days after February 28,
1994, which information is incorporated herein by reference.
PART IV
ITEM 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
Page
(a) (1) Financial Statements
Report of Independent Accountants for
each of the three fiscal years in the
period ended February 28, 1994. . . . . . . . . . . . . . . . . . .27
Financial Statements:
Consolidated Balance Sheets at February 28, 1994 and 1993 . . . . .28
Consolidated Statements of Income for each of
the three fiscal years in the period ended
February 28, 1994 . . . . . . . . . . . . . . . . . . . . . . . .29
Consolidated Statements of Stockholders' Equity for
each of the three fiscal years in the period
ended February 28, 1994 . . . . . . . . . . . . . . . . . . . . .30
Consolidated Statements of Cash Flows
for each of the three fiscal years in
the period ended February 28, 1994. . . . . . . . . . . . . . . .31
Notes to Consolidated Financial Statements. . . . . . . . . . . . .32
(2) Financial Statement Schedules
Report of Independent Accountants
for each of the three fiscal years in the
period ended February 28, 1994. . . . . . . . . . . . . . . . . .58
Financial Statement Schedules:
V. Property, plant and equipment cost . . . . . . . . . . . . .59
VI. Accumulated depreciation and amortization
of property, plant and equipment. . . . . . . . . . . . . .60
VIII. Valuation and qualifying accounts. . . . . . . . . . . . . .61
X. Supplementary income statement information . . . . . . . . .62
All other schedules and statements have been omitted as the required
information is inapplicable or is presented in the financial
statements or notes thereto.
<PAGE>57
(b) Reports on Form 8-K
No reports on Form 8-K were required to be filed pertaining to
events occurring during the quarter ended February 28, 1994.
(c) Exhibits
2.1 Share Purchase Agreement dated April 29, 1993 among Mark IV
Industries, Inc., a Delaware Corporation, and its indirect
wholly-owned subsidiary, Dayco Italy, S.p.A., an Italian
Corporation, and Pirelli S.p.A., an Italian Corporation
(incorporated by reference to exhibit 2.1 to the Company's
Current Report on Form 8-K dated May 27, 1993, as filed on June
17, 1993). All schedules and other attachments to this exhibit,
as identified on the last page of the exhibit, have been
omitted.
3.1 Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 28.1 to the Company's Registration
Statement No. 33-45215 on Form S-3, as filed with the SEC on
January 24, 1993).
4.1 Indenture dated as of March 15, 1989 between the Company and the
First National Bank of Boston, as Trustee (including the form of
13-3/8% Subordinated Debentures due March 15, 1999)
(incorporated by reference to Exhibit 4.10 to the Company's
Current Report on Form 8-K, dated May 23, 1989).
4.2 Specimen Common Stock Certificate (incorporated by reference to
Exhibit 4.11 to Amendment No. 1 to the Registrant's Registration
Statement No. 33-41553 on Form S-3 dated August 6, 1991).
4.3 By-Laws of the Registrant (incorporated by reference to Exhibit
4.12 To Amendment No. 1 to the Registrant's Registration
Statement No. 33-41553 on Form S-3, dated August 6, 1991).
4.4 Conformed copy of the Indenture, dated as of February 13, 1992,
between Mark IV Industries, Inc. and Marine Midland Bank, N.A.,
including the form of 6-1/4% Convertible Subordinated Debentures
due February 15, 2007 (incorporated by reference to Exhibit 4.1
to the Company's Current Report on Form 8-K dated February 13,
1992).
4.5 Conformed copy of the Indenture, dated as of March 15, 1993,
between Mark IV Industries, Inc. and Citibank, N.A.; including
the form of Senior Subordinated Notes due April 1, 2003
(incorporated by reference to Exhibit 4.1 to the Company's
Current Report on Form 8-K dated March 29, 1993).
<PAGE>58
Executive Compensation Plans and Arrangements (10.1 -10.9)
10.1 Employment Agreements dated May 1, 1989 between the Company and
each of Sal Alfiero, Clement R. Arrison, Gerald S. Lippes,
William P. Montague, John J. Byrne and Frederic L. Cook
(incorporated by reference to Exhibit 10.27 to the Company's
Form 10-K for the fiscal year ended February 28, 1989).
10.2 Employment Agreement dated July 1, 1989 between the Company and
Richard L. Grenolds (incorporated by reference to Exhibit 10.33
to the Company's Form 10-Q for the fiscal quarter ended May 31,
1989).
10.3 Amendment and Restatement of Mark IV Industries, Inc. and
Subsidiaries Incentive Stock Option Plan, as of February 8, 1988
(incorporated by reference to Exhibit 10.13.1 to the Company's
Registration Statement No. 33-42307 on Form S-8 dated August 19,
1991).
10.4* Amendment and Restatement of the Mark IV Industries, Inc. and
Subsidiaries 1992 Incentive Stock Option Plan Effective March
30, 1994.
10.5* Amendment and Restatement of the Mark IV Industries, Inc. 1992
Restricted Stock Plan Effective March 30, 1994.
10.6 Mark IV Industries, Inc. Executive Bonus Plan (incorporated by
reference to Exhibit 10.8 to the Company's Annual Report on Form
10-K for the fiscal year ended February 28, 1991).
10.7 First Amendment and Restatement of the Mark IV Industries, Inc.
Enhanced Executive Incentive Plan (incorporated by reference to
Exhibit 10.16 to the Company's Annual Report on Form 10-K dated
February 29, 1992).
10.8* Third Amendment and Restatement of the Non-Qualified Plan of
Deferred Compensation of Mark IV Industries, Inc. Effective
September 1, 1993.
10.9* First Amendment and Restatement of the Non-Qualified Plan of
Deferred Compensation for Non-Employee Directors of Mark IV
Industries, Inc. Effective December 1, 1993.
<PAGE>59
Other Material Contract Exhibits
10.10 Revolving Credit Facility Agreement dated May 27, 1993, among
Mark IV Industries, Inc., a Delaware Corporation, Dayco Italy
S.p.A., an Italian Corporation, Bank of America National Trust
and Savings Association, Chemical Investment Bank Limited, and
Citibank, N.A. and Chase Manhattan Bank N.A., as co-agents for
various financial institutions that are signatories thereto
(incorporated by reference to the Company's Current Report on
Form 8-K dated May 27, 1993 as filed on June 17, 1993). All
schedules and other attachments to this exhibit, as identified
on page v of the exhibit, have been omitted.
10.11 Credit Agreement dated July 20, 1993 among Mark IV Industries,
Inc., and certain of its subsidiaries and Bank of America
National Trust and Savings Association, Continental Bank N.A.,
Citibank, N.A., The Bank of Nova Scotia, The Bank of New York,
The Chase Manhattan Bank, N.A., and certain other banks
(incorporated by reference to the Company's Current Report on
Form 8-K dated July 20, 1993 as filed on August 4, 1993). All
schedules and exhibits listed on page v of this exhibit have
been omitted.
11* Statement regarding computation of per share earnings.
21* Subsidiaries of the Registrant.
23* Consent of Independent Accountants.
______________________
* Filed herewith by direct transmission pursuant to the EDGAR program.
<PAGE>60
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
of Mark IV Industries, Inc.
Our report on the consolidated financial statements of Mark IV Industries,
Inc. is included in Item 8 of this Form 10-K. In connection with our audit of
such financial statements, we have also audited the related financial
statement schedules listed in Item 14 of this Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND
Rochester, New York
March 29, 1994
<PAGE>61
<TABLE>
<CAPTION>
MARK IV INDUSTRIES, INC.
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT COST
Balance at Changes Balance at
Beginning Add (Deduct) End of
Classifications of Period Additions(a) Retirements (b)(c)(d) Period
_______________ _________ ____________ ___________ ____________ ________
<S> <C> <C> <C> <C> <C>
Year ended February 28, 1994
Land and land improvements $ 31,800,000 $ 9,000,000 $ (100,000) $ (5,000,000) $ 35,700,000
Buildings 99,600,000 27,200,000 (400,000) (10,700,000) 115,700,000
Machinery and equipment 296,700,000 82,400,000 (6,800,000) (47,600,000) 324,700,000
$428,100,000 $118,600,000 $ (7,300,000) $(63,300,000) $476,100,000
Year ended February 28, 1993
Land and land improvements $ 32,100,000 $ 100,000 $ (300,000) $ (100,000) $ 31,800,000
Buildings 100,500,000 2,300,000 (3,200,000) - 99,600,000
Machinery and equipment 275,900,000 33,100,000 (6,700,000) (5,600,000) 296,700,000
$408,500,000 $ 35,500,000 $(10,200,000) $ (5,700,000) $428,100,000
Year ended February 29, 1992
Land and land improvements $ 26,600,000 $ 400,000 $ - $ 5,100,000 $ 32,100,000
Buildings 107,000,000 3,300,000 (2,200,000) (7,600,000) 100,500,000
Machinery and equipment 261,500,000 30,000,000 (6,600,000) (9,000,000) 275,900,000
$395,100,000 $ 33,700,000 $ (8,800,000) $(11,500,000) $408,500,000
<FN>
(a) Includes property, plant and equipment of subsidiaries acquired as follows:
1994 1993 1992
Land and land improvements $ 9,000,000 $ - $ 400,000
Buildings 22,800,000 - 2,300,000
Machinery and equipment 45,400,000 200,000 10,300,000
$ 77,200,000 $ 200,000 $13,000,000
(b) Includes foreign currency adjustments of $(14,400,000), $(8,500,000) and $(2,500,000) for fiscal 1994,
1993 and 1992, respectively.
(c) Includes purchase price adjustments related to fiscal 1992 and 1991 acquired companies of $2,800,000 and
$(9,000,000) for fiscal 1993 and 1992, respectively.
(d) Includes amounts related to discontinued operations of $(48,900,000) for fiscal 1994.
</TABLE>
<PAGE>62
<TABLE>
<cption>
MARK IV INDUSTRIES, INC.
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
Balance at Changes Balance at
Beginning Add (Deduct) End of
Classifications of Period Additions Retirements (a)(b) Period
_______________ _________ _________ ___________ ___________ __________
<S> <C> <C> <C> <C> <C>
Year ended February 28, 1994
Land improvements $ 500,000 $ 100,000 $ - $ (200,000) $ 400,000
Buildings 15,300,000 3,500,000 (100,000) (3,900,000) 14,800,000
Machinery and equipment 94,000,000 29,600,000 (3,600,000) (24,400,000) 95,600,000
$109,800,000 $ 33,200,000 $ (3,700,000) $(28,500,000) $110,800,000
Year ended February 28, 1993
Land improvements $ 300,000 $ 200,000 $ - $ - $ 500,000
Buildings 12,800,000 3,600,000 (800,000) (300,000) 15,300,000
Machinery and equipment 76,000,000 26,000,000 (4,500,000) (3,500,000) 94,000,000
$ 89,100,000 $ 29,800,000 $(5,300,000) $(3,800,000) $109,800,000
Year ended February 29, 1992
Land improvements $ 200,000 $ 100,000 $ - $ - $ 300,000
Buildings 10,100,000 3,700,000 (900,000) (100,000) 12,800,000
Machinery and equipment 56,300,000 23,100,000 (2,700,000) (700,000) 76,000,000
$ 66,600,000 $ 26,900,000 $ (3,600,000) $ (800,000) $89,100,000
<FN>
(a) Includes foreign currency adjustments of $(7,300,000), $(3,800,000) and $(800,000) for fiscal 1994,
1993 and 1992, respectively.
(b) Includes amounts related to discontinued operations of $(21,200,000) for fiscal 1994.
</TABLE>
<PAGE>63
<TABLE>
<CAPTION>
MARK IV INDUSTRIES, INC.
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
Additions
Charged Deductions
Beginning (Credited) Accounts Ending
Classifications Balance to Expense Charged Off Other Balance
_______________ _________ __________ ___________ _____ _______
<S> <C> <C> <C> <C> <C>
Year ended February 28, 1994
Allowance for doubtful
accounts $ 13,000,000 $ 3,000,000 $ (3,100,000) $ 4,700,000(a) $ 17,600,000
Year ended February 28, 1993
Allowance for doubtful
accounts $ 13,300,000 $ 2,700,000 $ (3,000,000) $ - $ 13,000,000
Year ended February 29, 1992
Allowance for doubtful
accounts $ 11,100,000 $ 2,700,000 $ (1,200,000) $ 700,000(b) $ 13,300,000
<FN>
(a) Represents the following
Reserve at date of acquisition of subsidiary $3,900,000
Net change in reserve for customer
returns and allowances 2,000,000
Reclassification from other reserves 300,000
Reserves of discontinued operations
at February 28, 1993 (800,000)
Foreign currency translation adjustment (700,000)
$4,700,000
(b) Represents reserve at date of acquisition of subsidiaries.
</TABLE>
<PAGE>64
<TABLE>
<CAPTION>
MARK IV INDUSTRIES, INC.
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
(Dollars in Thousands)
February 28, February 28, February 29,
1994 1993 1992
___________ ___________ ___________
<S> <C> <C> <C>
Repairs and maintenance $21,505,000 $19,961,000 $17,981,000
Advertising Costs $13,567,000 $12,981,000 $11,278,000
</TABLE>
<PAGE>65
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MARK IV INDUSTRIES, INC.
By: /s/ Sal H. Alfiero
______________________________
Sal H. Alfiero, Chairman of the
Board and Chief Executive Officer
Dated: May 24, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report on Form 10-K has been signed below by the following persons in
the capacities and on the date indicated.
Signature Title Date
/s/ Sal H. Alfiero Chairman of the Board May 24, 1994
Sal H. Alfiero and Chief Executive Officer
/s/ Clement R. Arrison President, Director May 24, 1994
Clement R. Arrison
/s/ William P. Montague Executive Vice President May 24, 1994
William P. Montague and Chief Financial Officer
/s/ Frederic L. Cook Senior Vice President- May 24, 1994
Frederic L. Cook Administration
/s/ John J. Byrne Vice President-Finance May 24, 1994
John J. Byrne
/s/ Richard L. Grenolds Vice President - May 24, 1994
Richard L. Grenolds Chief Accounting Officer
/s/ Gerald S. Lippes Secretary and Director May 24, 1994
Gerald S. Lippes
/s/ Joseph G. Donohoo Director May 24, 1994
Joseph G. Donohoo
/s/ Herb Roth, Jr. Director May 24, 1994
Herb Roth, Jr.
<PAGE>66
Exhibit Index
2.1 Share Purchase Agreement dated April 29, 1993 among Mark IV
Industries, Inc., a Delaware Corporation, and its indirect
wholly-owned subsidiary, Dayco Italy, S.p.A., an Italian
Corporation, and Pirelli S.p.A., an Italian Corporation
(incorporated by reference to exhibit 2.1 to the Company's
Current Report on Form 8-K dated May 27, 1993, as filed on June
17, 1993). All schedules and other attachments to this exhibit,
as identified on the last page of the exhibit, have been
omitted.
3.1 Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 28.1 to the Company's Registration
Statement No. 33-45215 on Form S-3, as filed with the SEC on
January 24, 1993).
4.1 Indenture dated as of March 15, 1989 between the Company and the
First National Bank of Boston, as Trustee (including the form of
13-3/8% Subordinated Debentures due March 15, 1999)
(incorporated by reference to Exhibit 4.10 to the Company's
Current Report on Form 8-K, dated May 23, 1989).
4.2 Specimen Common Stock Certificate (incorporated by reference to
Exhibit 4.11 to Amendment No. 1 to the Registrant's Registration
Statement No. 33-41553 on Form S-3 dated August 6, 1991).
4.3 By-Laws of the Registrant (incorporated by reference to Exhibit
4.12 To Amendment No. 1 to the Registrant's Registration
Statement No. 33-41553 on Form S-3, dated August 6, 1991).
4.4 Conformed copy of the Indenture, dated as of February 13, 1992,
between Mark IV Industries, Inc. and Marine Midland Bank, N.A.,
including the form of 6-1/4% Convertible Subordinated Debentures
due February 15, 2007 (incorporated by reference to Exhibit 4.1
to the Company's Current Report on Form 8-K dated February 13,
1992).
4.5 Conformed copy of the Indenture, dated as of March 15, 1993,
between Mark IV Industries, Inc. and Citibank, N.A.; including
the form of Senior Subordinated Notes due April 1, 2003
(incorporated by reference to Exhibit 4.1 to the Company's
Current Report on Form 8-K dated March 29, 1993).
<PAGE>67
Executive Compensation Plans and Arrangements (10.1 -10.9)
10.1 Employment Agreements dated May 1, 1989 between the Company and
each of Sal Alfiero, Clement R. Arrison, Gerald S. Lippes,
William P. Montague, John J. Byrne and Frederic L. Cook
(incorporated by reference to Exhibit 10.27 to the Company's
Form 10-K for the fiscal year ended February 28, 1989).
10.2 Employment Agreement dated July 1, 1989 between the Company and
Richard L. Grenolds (incorporated by reference to Exhibit 10.33
to the Company's Form 10-Q for the fiscal quarter ended May 31,
1989).
10.3 Amendment and Restatement of Mark IV Industries, Inc. and
Subsidiaries Incentive Stock Option Plan, as of February 8, 1988
(incorporated by reference to Exhibit 10.13.1 to the Company's
Registration Statement No. 33-42307 on Form S-8 dated August 19,
1991).
10.4* Amendment and Restatement of the Mark IV Industries, Inc. and
Subsidiaries 1992 Incentive Stock Option Plan Effective March
30, 1994. Beginning on Page 67.
10.5* Amendment and Restatement of the Mark IV Industries, Inc. 1992
Restricted Stock Plan Effective March 30, 1994. Beginning on
Page 78.
10.6 Mark IV Industries, Inc. Executive Bonus Plan (incorporated by
reference to Exhibit 10.8 to the Company's Annual Report on Form
10-K for the fiscal year ended February 28, 1991).
10.7 First Amendment and Restatement of the Mark IV Industries, Inc.
Enhanced Executive Incentive Plan (incorporated by reference to
Exhibit 10.16 to the Company's Annual Report on Form 10-K dated
February 29, 1992).
10.8* Third Amendment and Restatement of the Non-Qualified Plan of
Deferred Compensation of Mark IV Industries, Inc. Effective
September 1, 1993. Beginning on Page 86.
10.9* First Amendment and Restatement of the Non-Qualified Plan of
Deferred Compensation for Non-Employee Directors of Mark IV
Industries, Inc. Effective December 1, 1993. Beginning on Page
125.
<PAGE>68
Other Material Contract Exhibits
10.10 Revolving Credit Facility Agreement dated May 27, 1993, among
Mark IV Industries, Inc., a Delaware Corporation, Dayco Italy
S.p.A., an Italian Corporation, Bank of America National Trust
and Savings Association, Chemical Investment Bank Limited, and
Citibank, N.A. and Chase Manhattan Bank N.A., as co-agents for
various financial institutions that are signatories thereto
(incorporated by reference to the Company's Current Report on
Form 8-K dated May 27, 1993 as filed on June 17, 1993). All
schedules and other attachments to this exhibit, as identified
on page v of the exhibit, have been omitted.
10.11 Credit Agreement dated July 20, 1993 among Mark IV Industries,
Inc., and certain of its subsidiaries and Bank of America
National Trust and Savings Association, Continental Bank N.A.,
Citibank, N.A., The Bank of Nova Scotia, The Bank of New York,
The Chase Manhattan Bank, N.A., and certain other banks
(incorporated by reference to the Company's Current Report on
Form 8-K dated July 20, 1993 as filed on August 4, 1993). All
schedules and exhibits listed on page v of this exhibit have
been omitted.
11* Statement regarding computation of per share earnings.
Beginning on Page 151.
21* Subsidiaries of the Registrant. Beginning on Page 153.
23* Consent of Independent Accountants. Beginning on Page 156.
______________________
* Filed herewith by direct transmission pursuant to the EDGAR program.
Exhibit 10.4
MARK IV INDUSTRIES, INC.
AND SUBSIDIARIES, 1992
INCENTIVE STOCK OPTION PLAN
______________________________
Amendment and Restatement
Effective March 30, 1994
______________________________
WHEREAS, Mark IV Industries, Inc., a Delaware corporation with offices at
One Towne Centre, 501 John James Audubon Parkway, Amherst, New York (the
"Company"), by resolution of the Company's Board of Directors adopted on
September 3, 1992, adopted an incentive stock option plan known as the "Mark
IV Industries, Inc. and Subsidiaries 1992 Incentive Stock Option Plan (the
"Plan") to provide a tool to the Company's management to attract, retain and
motivate highly skilled employees of the Company and its subsidiaries; and
WHEREAS, on December 16, 1992, the Plan was amended to provide that the Plan
would be administered by the Compensation Committee of the Company's Board of
Directors in order to comply with the provisions of Rule 16b promulgated under
the Securities Exchange Act of 1934; and
WHEREAS, as contemplated by Section 422 of the Internal Revenue Code, on
August 17, 1993, the Plan was approved by the Company's shareholders; and
WHEREAS, the Company, amended the Plan effective November 11, 1993, to
provide Optionees that are employed by a division of the Company, a Subsidiary
(as hereinafter defined) or a division of a Subsidiary, the immediate right to
exercise their options in the event the Optionee's employment with the Company
or such Subsidiary is terminated in connection with a sale of all or
substantially all the assets of the division or Subsidiary by which the
Optionee is employed or in the event that all or substantially all the stock
of the Subsidiary by whom the Optionee is employed is sold; and
WHEREAS, the Company, as permitted by Section 11 of the Plan, desires to
amend the Plan to permit key employees and officers which own more than ten
percent (10%) of the outstanding stock of the Company to receive options under
the terms of the Plan; and
WHEREAS, the Company, as permitted by Section 11 of the Plan, desires to
amend the Plan to permit Optionees to pay the purchase price for shares of
common stock of the Company which may be acquired pursuant to options granted
under this Plan with previously acquired shares of the Company's common stock
and to make certain other technical corrections to the Plan;
NOW, THEREFORE, in consideration of the foregoing, Mark IV Industries, Inc.
hereby adopts the following Amendment and Restatement of the Mark IV
Industries, Inc. and Subsidiaries 1992 Incentive Stock Option Plan effective
March 30, 1994:
1. Purpose of Plan; Current Status of the Plan.
The Mark IV Industries, Inc. and Subsidiaries, 1992 Incentive Stock Option
Plan (hereinafter called the "Plan") is intended to provide officers and other
key employees of Mark IV Industries, Inc., a Delaware corporation (hereinafter
called the "Company") and officers and other key employees of each Subsidiary
of the Company as that term is defined in Section 3 below (hereinafter
individually referred to as a "Subsidiary" and collectively as "Subsidiaries")
with an additional incentive for them to promote the success of the business,
to increase their proprietary interest in the success of the Company and its
Subsidiaries, and to encourage them to remain in the employ of the Company or
its Subsidiaries. The above aims will be effectuated through the granting of
certain stock options, as herein provided, which are intended to qualify as
Incentive Stock Options (hereinafter called "ISOs") under Section 422 of the
Internal Revenue Code of 1986, as the same has been and shall be amended
(hereinafter called the "Code").
2. Administration
The Plan shall be administered by the Compensation Committee of the Board of
Directors of the Company (hereinafter called the "Committee") composed of not
less than two (2) directors of the Company, each of whom, shall be a
"disinterested person" within the meaning of Rule 16b-3 under the Exchange Act
(as defined in Section 7 hereof). The Committee is authorized to adopt such
rules and regulations for the administration of the Plan and the conduct of
its business as may seem to it proper.
Any action taken or interpretation by the Committee under any provision of
the Plan or any option granted hereunder shall be in accordance with the
provisions of the Code, and the regulations and rulings issued thereunder as
such may be amended, promulgated, issued, renumbered or continued from time to
time hereafter in order that the options granted hereunder shall constitute
"incentive stock options" within the meaning of the Code. All action taken
pursuant to this Plan shall be lawful and with a view to obtaining for the
Company and the option holder the maximum advantages under the law as then
obtaining, and in the event that any dispute shall arise as to any action
taken or interpretation by the Committee under any provision of the Plan, then
all doubts shall be resolved in favor of such having been done in accordance
with the said Code and such revenue laws, amendments, regulations, rulings and
provisions as may then be applicable. Any action taken or interpretation by
the Committee under any provision of the Plan shall be final. No member of
the Committee shall be liable for any action, determination or interpretation
under any provision of the Plan or otherwise if done in good faith.
3. Participation
The Committee shall determine which of the employees of the Company and
its Subsidiaries will receive options under the terms of this Plan from among
officers and key employees of the Company and its Subsidiaries (including,
subject to the provisions of Section 422(c)(5) of the Code, officers or key
employees that own stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company). Those
individuals to whom options are granted under the terms of this Plan are
sometimes hereinafter referred to as "Optionees". The Committee shall
determine the terms and provisions of the options granted hereunder (which
need not be identical), the time or times at which options shall be granted
and the number of shares of common stock of the Company (sometimes
hereinafter referred to as "Common Stock") (or such number of shares of stock
in which the Common Stock may at any time hereafter be constituted), for which
options are granted. Notwithstanding the foregoing, in no event shall the
Committee grant any options to the Company's Chief Executive Officer or any of
the four (4) most highly compensated officers of the Company if the aggregate
number of shares of Common Stock which can be purchased by any such individual
through the exercise of all options granted to him or her under the Plan
exceeds 200,000 shares of Common Stock, adjusted as provided for in Section 5
hereof. For purposes of this Plan, the term "Subsidiary" shall mean any
corporation which satisfies the definition of a "subsidiary corporation" as
contained in Section 424(f) of the Code and the term "Subsidiaries" shall mean
all corporations which satisfy the definition of a "subsidiary corporation" as
contained in Section 424(f) of the Code when, in each case, for purposes of
applying such definition, the "employer corporation" is deemed to mean the
Company.
In selecting Optionees and in determining the number of shares for which
options are granted, the Committee may weigh and consider the following
factors: the office or position of the Optionee and his degree of
responsibility for the growth and success of the Company, length of service,
remuneration, promotions and potential. The foregoing factors shall not be
considered to be exclusive or obligatory upon the Committee, and the Committee
may properly consider any other factors which to it seems appropriate.
An Optionee who has been granted an option under the Plan may be granted
additional options under the Plan if the Committee shall so determine.
In no event shall any options be granted under this Plan at any time
after the termination date set forth at the end of this Plan.
4. Shares Subject to the Plan
Subject to adjustment as provided in Section 5 of this Plan, the
aggregate number of reserved shares of Common Stock for which options may be
granted hereunder shall not exceed one million five hundred thousand
(1,500,000) shares, determined as of September 3, 1992, (the effective date of
this Plan); provided, however, that as to shares subject to options which
expire or terminate pursuant to the provisions of this Plan without having
been exercised in full, such shares shall be considered to be available again
for placement under options granted thereafter under the Plan. Shares issued
pursuant to the exercise of incentive stock options granted under the Plan
shall be fully paid and non-assessable.
5. Anti-Dilution Provisions
The aggregate number of shares and the class of shares as to which
options may be granted under the Plan, the number and class of shares subject
to each outstanding option, the price per share thereof (but not the total
price), and the number of shares as to which an option may be exercised at any
one time, shall all be adjusted proportionately in the event of any change,
increase or decrease in the outstanding shares of Common Stock or any change
in classification of the Company's Common Stock without receipt of
consideration by the Company which results either from a split-up, reverse
split or consolidation of shares, payment of a stock dividend,
recapitalization, reclassification or other like capital adjustment so that
upon exercise of the option, the Optionee shall receive the number and class
of shares that he would have received had he been the holder of the number of
shares of Common Stock for which the option is being exercised immediately
preceding such change, increase or decrease in the outstanding shares of
Common Stock of the Company. Any such adjustment made by the Committee shall
be final and binding upon all Optionees, the Company, and all other interested
persons. Any adjustment of an incentive stock option under this paragraph
shall be made in such manner as not to constitute a "modification" within the
meaning of Section 424(h)(3) of the Code.
Anything in this Section 5 to the contrary notwithstanding, no fractional
shares or scrip representative of fractional shares shall be issued upon the
exercise of any option. Any fractional share interest resulting from any
change, increase or decrease in the outstanding shares of Common Stock of the
Company or resulting from any reorganization, merger, or consolidation for
which adjustment is provided in this Section 5 shall disappear and be absorbed
into the next lowest number of whole shares, and the Company shall not be
liable for any payment for such fractional share interest to the Optionee upon
his exercise of the option.
6. Option Price
The purchase price for each share of Common Stock which may be acquired
upon the exercise of each option issued under the Plan shall be determined by
the Committee at the time the option is granted, but in no event shall such
purchase price be less than one hundred percent (100%) of the fair market
value of the Company's Common Stock on the date of grant. If the Common Stock
of the Company is listed upon an established stock exchange or exchanges on
the day the option is granted, such fair market value shall be deemed to be
the highest closing price of the Common Stock of the Company on such stock
exchange or exchanges on the day the option is granted, or if no sale of the
Company's Common Stock shall have been made on any stock exchange on that day,
on the next preceding day on which there was a sale of such stock.
7. Option Exercise Periods
(a) The time within which any option granted hereunder may be exercised
shall be, by its terms, not earlier than one (1) year from the date such
option is granted and not later than ten (10) years from the date such option
is granted. Except as otherwise provided for herein, the Optionee must remain
in the continuous employment of the Company or any of its subsidiaries from
the date of the grant of the option to and including the date of exercise of
option in order to be entitled to exercise his option. Options granted
hereunder shall be exercisable in such installments and at such dates as the
Committee may specify. Unless the Committee shall specify otherwise, the
right of each Optionee to exercise his option to purchase the number of shares
to which his option initially related shall accrue on a cumulative basis as
follows:
(i) the Optionee shall have the right to purchase one-fourth (1/4)
of the total number of shares of Common Stock which can be purchased pursuant
to the option (subject to adjustment as provided in Section 5 hereof) at the
end of the one (1) year period following the date the option is granted;
(ii) the Optionee shall have the right to purchase an additional
one-fourth (1/4) of the total number of shares of Common Stock which can be
purchased pursuant to the option (subject to adjustment as provided in Section
5 hereof) at the end of the two (2) year period following the date the option
is granted;
(iii) the Optionee shall have the right to purchase an additional
one-fourth (1/4) of the total number of shares of Common Stock which can be
purchased pursuant to the option (subject to adjustment as provided in Section
5 hereof) at the end of the three (3) year period following the date the
option is granted;
(iv) the Optionee shall have the right to purchase the remaining
one-fourth (1/4) of the total number of shares of Common Stock which can be
purchased pursuant to the option (subject to adjustment as provided in Section
5 hereof) at the end of the four (4) year period following the date the option
is granted.
Continuous employment shall not be deemed to be interrupted by transfers
between the Subsidiaries or between the Company and any Subsidiary, whether or
not elected by termination from any Subsidiary and re-employment by any other
Subsidiary or the Company. Time of employment with the Company shall be
considered to be one employment for the purposes of this Plan, provided there
is no intervening employment by a third party or no interval between
employments which, in the opinion of the Committee, is deemed to break
continuity of service. The Committee shall, at its discretion, determine the
effect of approved leaves of absence and all other matters having to do with
"continuous employment". Where an Optionee dies while employed by the Company
or any of its Subsidiaries, his options may be exercised following his death
in accordance with the provisions of Section 10 below.
(b) Notwithstanding the foregoing provisions of Section 7(a), in the
event the Company or the shareholders of the Company enter into an agreement
to dispose of all or substantially all of the assets or stock of the Company
by means of a sale, merger, consolidation, reorganization, liquidation, or
otherwise, or in the event a Change of Control (as hereinafter defined) of the
Company shall occur, all unexercised options granted hereunder shall become
immediately exercisable with respect to the full number of shares subject to
that option during the period commencing as of the date of execution of such
agreement and ending as of the earlier of (i) ten (10) years from the date
such option was granted, or (ii) ninety (90) days following the date on which
a Change in Control occurs or the disposition of assets or stock contemplated
by this sentence is consummated. In addition, in the event that substantially
all the stock of any Subsidiary by whom an Optionee is employed is sold or
otherwise disposed of by merger, consolidation, reorganization, liquidation or
otherwise, or in the event that substantially all the assets of
any division of the Company or any division of any Subsidiary by whom the
Optionee is employed are sold or disposed of by means of a sale, merger,
consolidation, reorganization, liquidation or otherwise and, in connection
with any such asset sale, the Optionee's employment with the Company or the
Subsidiary (as the case may be) is terminated, the options of an Optionee
employed by such a division or Subsidiary shall, unless the Optionee remains
in the employ of the Company or any Subsidiary of the Company immediately
following any such sale or other disposition of stock or assets, become
immediately exercisable with respect to the full number of shares subject to
that option during the period commencing as of the date of execution of the
agreement providing for such sale or other disposition and ending as of the
earlier of (x) ten (10) years from the date such option was granted and (y)
ninety (90) days following the date on which the disposition of the assets or
stock contemplated by this sentence is consummated. Ninety (90) days
following the consummation of any disposition of assets or stock referred to
in the preceding sentence, any unexercised options issued hereunder which have
become exercisable pursuant to this paragraph (or any unexercised portion
thereof) shall terminate and cease to be effective. In addition, if any
disposition of assets or stock referred to in this paragraph occurs with
respect to substantially all the assets or stock of the Company or if a Change
in Control occurs, ninety (90) days following such disposition of assets or
stock or Change in Control, this Plan and any unexercised options issued
hereunder which have become exercisable pursuant to this paragraph (or any
unexercised portion thereof) shall terminate and cease to be effective, unless
provision is made in connection with such transaction for assumption of
options previously granted or the substitution for such options of new options
covering the securities of a successor corporation or an affiliate thereof,
with appropriate adjustments as to the number and kind of securities and
prices.
(c) For purposes of this Plan, a "Change in Control" shall be deemed to
have occurred if:
(i) any "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Act"))
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act) of
more than thirty percent (30%) of the then outstanding voting stock of the
Company, otherwise than through a transaction arranged by, or consummated with
the prior approval of its Board of Directors; or
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of the Company
(and any new director whose election to the Board of Directors or whose
nomination for election by the Company's shareholders was approved by a vote
of at least two thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) (hereinafter referred to as the
"Continuing Directors") cease for any reason to constitute a majority thereof;
or
(iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger
or consolidation which would result in the voting securities of the Company
immediately prior thereto continuing to represent (either by remaining
outstanding or being converted into voting securities of the surviving entity)
at least 80% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation (provided, however, that if prior to the merger or
consolidation, the Board of Directors of the Company adopts a resolution that
is approved by a majority of the Continuing Directors providing that such
merger or consolidation shall not constitute a "change in control" for
purposes of the Plan, then such a merger or consolidation shall not constitute
a "change in control"); or
(iv) the shareholders of the Company approve an agreement for the
sale or disposition by the Company of all or substantially all the assets of
the Company.
(d) Any change or adjustment made pursuant to the terms of this Section 7
shall be made in such a manner so as not to constitute a "modification" as
defined in Section 424 of the Code, and so as not to cause any incentive stock
option issued under this Plan to fail to continue to qualify as an incentive
stock option as defined in Section 422(b) of the Code. Notwithstanding the
foregoing, in the event that any such agreement shall be terminated without
consummating the disposition of said stock or assets, any unexercised
unaccrued portion of any option that had become exercisable solely by reason
of the provisions of this paragraph shall again become unaccrued and
unexercisable as of said termination of such agreement; subject, however, to
such portion of such option accruing pursuant to the normal accrual schedule
provided in the terms under which such option was granted. Any exercise of
any portion of any option prior to said termination of said agreement shall
remain effective despite the fact that such portion became exercisable solely
by reason of the Company or its shareholders entering into said agreement to
dispose of the stock or assets of the Company or the stock or assets of any
Subsidiary of the Company, any division of the Company or any division of any
Subsidiary of the Company.
8. Exercise of Option
Options shall be exercised as follows:
(a) Notice and Payment. Each option, or any installment thereof, shall
be exercised, whether in whole or in part, by giving written notice to the
Company at its principal office, (the "Exercise Notice") that the Optionee
intends to exercise all or part of any option he has been granted and by
paying to the Company the purchase price for the number of shares of Common
Stock of the Company which the Optionee desires to purchase at the price per
share (as adjusted) set forth in the option which the Optionee desires to
exercise.
(b) The Exercise Notice: (i) shall state the identity of the options
being exercised (by reference to the date of the grant of the option); (ii)
shall state the number of shares to be purchased and the purchase price to be
paid; and (iii) shall contain representations on behalf of the Optionee that
he acknowledges that the Company is selling the shares being acquired by him
under a claim of exemption from registration under the Securities Act of 1933
as amended (hereinafter referred to as the "Act"), as a transaction not
involving any public offering; that he represents and warrants that he is
acquiring such shares with a view to "investment" and not with a view to
distribution or resale; and that he agrees not to transfer, encumber or
dispose of the shares unless: (A) a registration statement with respect to
the shares shall be effective under the Act, together with proof satisfactory
to the Company that there has been compliance with applicable state law; or
(B) the Company shall have received an opinion of counsel in form and content
satisfactory to the Company to the effect that the transfer qualifies under
Rule 144 or some other disclosure exemption from registration and that no
violation of the Act or applicable state laws will be involved in such
transfer, and/or such other documentation in connection therewith as the
Company's counsel may in its sole discretion require.
(c) Payment of the purchase price for shares of Common Stock to be
acquired in connection with the exercise of any options granted under this
Plan shall be made: (i) by delivery to the Company of cash or a certified or
bank check payable to the order of the Company in an amount equal to the
portion of the purchase price which is payable in connection with the exercise
of such option; or (ii) by delivery to the Company of previously acquired
shares of the Company's common Stock having an aggregate fair market value
equal to the portion of the purchase price which is payable in connection with
the exercise of such option provided that such previously acquired shares of
Common Stock have been held by the Optionee for at least six (6) months or
such other period of time as may be required by the Committee at the time such
shares are delivered to the Company in connection with the Optionee's exercise
of his or her option hereunder. If shares of the Company's Common Stock are
delivered as payment of the purchase price for shares of Common Stock to be
purchased in connection with the exercise of options granted hereunder, the
shares of Common Stock which are delivered in payment of such purchase price
shall be equal to the fair market value (determined in accordance with the
principles set forth in Section 6 hereof) of the Common Stock on the day
immediately preceding the day on which such Common Stock is delivered in
payment of the purchase price for shares of Common Stock to be acquired in
connection with the exercise of options granted hereunder.
(d) Issuance of Certificates. Certificates representing the shares
purchased by the Optionee shall be issued as soon as practicable after the
Optionee has complied with the provisions of Section 8(a) hereof.
(e) Rights as a Shareholder. The Optionee shall have no rights as a
shareholder with respect to the shares purchased until the date of the
issuance to him of a Certificate representing such shares.
9. Assignment of Option
Subject to the provisions of Section 10, options granted under this Plan
may not be assigned voluntarily or involuntarily or by operation of law. Any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of, or
to subject to execution, attachment or similar process, any incentive stock
option, or any right thereunder, contrary to the provisions hereof shall be
void and ineffective, shall give no right to the purported transferee, and
shall, at the sole discretion of the Committee, result in forfeiture of the
option with respect to the shares involved in such attempt.
10. Effect of Termination of Employment, Death or Disability
(a) In the event of the termination of employment of an Optionee during
the two (2) year period after the date of issuance of an option to him either
by reason of (i) a discharge for cause, or (ii) voluntary separation on the
part of the Optionee and without consent of the Company or the Subsidiary for
whom the Optionee was employed, any option or options theretofore granted to
him under this Plan, to the extent not theretofore exercised by him, shall
forthwith terminate.
(b) In the event of the termination of employment of an Optionee
(otherwise than by reason of death or retirement of the Optionee at his
Retirement Date) by the Company or by any of the Subsidiaries employing the
Optionee at such time, any option or options granted to him under the Plan to
the extent not theretofore exercised shall be deemed cancelled and terminated
forthwith, except that, subject to the provisions of subparagraph (a) of this
Section, such Optionee may exercise any options theretofore granted to him,
which have not then expired and which are otherwise exercisable within the
provisions of Section 7 hereof, within three (3) months after such
termination. If the employment of an Optionee shall be terminated by reason
of the Optionee's retirement at his Retirement Date by the Company or by any
of the Subsidiaries employing the Optionee at such time, the Optionee shall
have the right to exercise such option or options held by him to the extent
that such options have not expired, at any time within three (3) months after
such retirement. The provisions of Section 7 to the contrary notwithstanding,
upon retirement, all options held by an Optionee shall be immediately
exercisable in full. The transfer of an Optionee from the employ of the
Company to a Subsidiary of the Company or vice versa, or from one Subsidiary
of the Company to another, shall not be deemed to constitute a termination of
employment for purposes of this Plan.
(c) In the event that an Optionee shall die while employed by the Company
or by any of the Subsidiaries or shall die within three (3) months after
retirement on his Retirement Date (from the Company or any Subsidiary), any
option or options granted to him under this Plan and not theretofore exercised
by him or expired shall be exercisable by the estate of the Optionee or by any
person who acquired such option by bequest or inheritance from the Optionee in
full, notwithstanding Section 7, at any time within one (1) year after the
death of the Optionee. References hereinabove to the Optionee shall be deemed
to include any person entitled to exercise the option after the death of the
Optionee under the terms of this Section.
(d) In the event of the termination of employment of an Optionee by
reason of the Optionees' disability, the Optionee shall have the right,
notwithstanding the provisions of Section 7 hereof, to exercise all options
held by him, to the extent that options have not previously expired or been
exercised, at any time within one (1) year after such termination. The term
"disability" shall, for the purposes of this Plan, be defined in the same
manner as such term is defined in Section 105(d)(4) of the Internal Revenue
Code of 1986.
(e) For the purposes of this Plan, "Retirement Date" shall mean any date
an employee is otherwise entitled to retire under the Company's retirement
plans.
11. Amendment and Termination of the Plan
The Board of Directors of the Company may at any time suspend, amend or
terminate the Plan; provided, however, that except as permitted in Section 13
hereof, no amendment or modification of the Plan which would:
(a) increase the maximum aggregate number of shares as to which options
may be granted hereunder (except as contemplated in Section 5); or
(b) reduce the option price or change the method of determining the
option price; or
(c) increase the time for exercise of options to be granted or those
which are outstanding beyond the terms of ten (10) years; or
(d) change the designation of the employees or class of employees
eligible to receive options under this Plan, may be adopted unless with the
approval of the holders of a majority of the outstanding shares of Common
Stock represented at a shareholders' meeting of the Company, or with the
written consent of the holders of a majority of the outstanding shares of
Common Stock. No amendment, suspension or termination of the Plan may,
without the consent of the holder of the option, terminate his option or
adversely affect his rights in any material respect.
12. Incentive Stock Options Power to Establish Other Provisions.
It is intended that the Plan shall conform to and each option shall
qualify and be subject to exercise only to the extent that it does qualify as
an "incentive stock option" as defined in Section 422 of the Code and as such
section may be amended from time to time or be accorded similar tax treatment
to that accorded to an incentive stock option by virtue of any new Revenue
Laws of the United States. The Board of Directors may make any amendment to
the Plan which shall be required so to conform the Plan. Subject to the
provisions of the Code, the Committee shall have the power to include such
other terms and provisions in options granted under this Plan as the Committee
shall deem advisable, provided, however, that no option shall be granted
hereunder which does not qualify under the Code.
13. Maximum Annual Value of Options Exercisable.
Any other provisions of this Plan notwithstanding, after December 31,
1987 no employee to whom options are granted hereunder shall receive options,
under all stock plans of the Company and any parent or subsidiary of the
Company, first exercisable during any single calendar year, for shares, the
fair market value of which (determined at the time of the grant of the
options) exceeds $100,000. Accordingly, no Optionee shall be entitled to
exercise options granted under any stock option plan of the Company and any
parent or subsidiary of the Company, in any single calendar year, except to
the extent first exercisable in previous complete calendar years, for shares
of stock the value of which (determined at the time of grant of the options)
exceeds $100,000.
14. General Provisions
(a) No incentive stock option shall be construed as limiting any right
which the Company or any parent or subsidiary of the Company may have to
terminate at any time, with or without cause, the employment of an Optionee.
(b) The Section headings used in this Plan are intended solely for
convenience of reference and shall not in any manner amplify, limit, modify or
otherwise be used in the construction or interpretation of any of the
provisions hereof.
(c) The masculine, feminine or neuter gender and the singular or plural
number shall be deemed to include the other whenever the content so indicates
or requires.
(d) No options shall be granted under the Plan after ten (10) years from
the date the Plan is adopted by the Board of Directors of the Company or
approved by the stockholders of the Company, whichever is earlier.
15. Effective Date and Duration of the Plan
The Plan became effective on September 3, 1992, the date adoption of the
Plan was approved by the Board of Directors of the Company. On August 17,
1993, as required by Section 422 of the Code, the Plan was approved by the
Shareholders of the Company. The Plan will terminate on September 2, 2002;
provided however, that the termination of the Plan shall not be deemed to
modify, amend or otherwise affect the term of any options outstanding on the
date the Plan terminates.
IN WITNESS WHEREOF, the undersigned has executed this Amendment and
Restatement to the Mark IV Industries, Inc. and Subsidiaries 1992 Incentive
Stock Option Plan for and on behalf of Mark IV Industries, Inc. this 16th day
of May, 1994.
MARK IV INDUSTRIES, INC.
By: Richard L. Grenolds
Vice President and
Chief Accounting Officer
Exhibit 10.5
MARK IV INDUSTRIES, INC.
1992 RESTRICTED STOCK PLAN
________________________
Amendment and Restatement
Effective March 30, 1994
________________________
WHEREAS, Mark IV Industries, Inc., a Delaware corporation with offices
at One Towne Centre, 501 John James Audubon Parkway, Amherst, New York (the
"Company"), by resolution of its Board of Directors, adopted a restricted
stock plan known as the Mark IV Industries, Inc. 1992 Restricted Stock Plan
(hereinafter the "Plan") effective December 16, 1992; and
WHEREAS, pursuant to the terms of the Plan, the Company was authorized,
effective December 16, 1992, to issue, in connection with restricted stock
awards granted by the Compensation Committee of the Company's Board of
Directors up to 350,000 shares of restricted stock (subject to certain anti-
dilutive adjustments); and
WHEREAS, the Company, as permitted by Section 17 of the Plan, desires to
amend the Plan to increase the number of shares of restricted stock which may
be issued pursuant to the Plan by 200,000; and
WHEREAS, the Company, as permitted by Section 17 of the Plan, desires to
amend the Plan to provide that the restrictions imposed upon shares of
restricted stock awarded to employees of divisions or subsidiaries of the
Company will lapse if substantially all the stock of a subsidiary by whom the
employee is employed is sold or if the employee's employment with the Company
or any of the Company's subsidiaries is terminated in connection with a sale
of all or substantially all the assets of the division or subsidiary by whom
the employee is employed;
NOW, THEREFORE, in consideration of the foregoing, Mark IV Industries,
Inc. hereby adopts the following Amendment and Restatement of the Mark IV
Industries, Inc. 1992 Restricted Stock Plan effective March 30, 1994:
1. Purpose. The purposes of the Mark IV Industries, Inc. 1992
Restricted Stock Plan (the "Plan") are: (a) to enable Mark IV Industries, Inc.
(the "Company") and its direct and indirect wholly owned subsidiaries to
attract, reward and retain highly qualified executive and managerial employees
through the use of an equity based incentive compensation program; and (b) to
increase the personal interest which the executive and managerial employees of
the Company and its direct and indirect wholly owned subsidiaries have in the
successful and profitable operation of the Company by linking the long-term
value of the compensation paid to such employees to the value of the Company's
common stock.
2. Stock Subject to Plan. The shares of stock which may be the
subject of awards pursuant to this Plan shall be shares of the Company's
common stock ("Common Stock"). All awards of Common Stock made pursuant to
this Plan shall be subject to the restrictions on transferability described in
Section 6 hereof and to such other restrictions as may be imposed by the
Committee (as defined in Section 3 hereof) in connection with its making of an
award under this Plan (which other restrictions need not be the same for each
Participant). Accordingly, each share of Common Stock which is the subject of
an award pursuant to the terms of this Plan is hereinafter referred to as
"Restricted Stock".
On December 16, 1992, (the date on which the Plan became effective), the
aggregate number of shares of Common Stock reserved for issuance in connection
with Restricted Stock awards made pursuant to the terms of this Plan was three
hundred fifty thousand (350,000), subject to adjustment as hereinafter
provided in this Section 3. Effective March 30, 1994, in addition to the
number of shares of Common Stock reserved for issuance effective March 29,
1994 in connection with Restricted Stock awards which could be made pursuant
to the terms of the Plan, an additional two hundred thousand (200,000) shares
of Common Stock shall be reserved and available for issuance in connection
with Restricted Stock awards made pursuant to the Plan.
The number of shares of Restricted Stock available for awards under this
Plan shall be adjusted proportionately in the event of any change, increase or
decrease in the outstanding shares of common stock of the Company which
results either from a split-up, reverse split or consolidation of shares,
payment of a stock dividend, recapitalization, reclassification or other like
capital adjustment; provided, however, that no fractional shares shall be
issued in connection with any such capital adjustment. The Restricted Stock
which is awarded under this Plan may be either authorized but unissued Common
Stock or treasury shares. Shares which are the subject of an award granted
under this Plan shall not again become available for future grants unless the
recipient fails to pay the purchase price for the shares pursuant to Section 5
hereof.
3. Committee. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company (the "Committee") which
shall consist of at least two Directors of the Company, each of whom shall be
a "disinterested person" within the meaning of Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended (hereinafter referred to as
the "Act").
4. Eligibility and Participation. Each employee of the Company and
each employee of each of the Company's direct and indirect wholly owned
subsidiaries shall be eligible to receive an award of Restricted Stock under
the terms of this Plan. The employees of the Company (or any of its direct or
indirect wholly owned subsidiaries) to whom awards of Restricted Stock are to
be granted under the Plan and the number of shares of Restricted Stock with
respect to which awards are to be granted to each such employee shall be
determined by the Committee. In determining which employees should receive an
award of Restricted Stock under the terms of the Plan, the Committee shall
take into account the past performance of the Company, the employee's
contributions to past performance, the capacity of the employee to contribute
in a substantial measure to the performance of the Company in the future and
such other factors as the Committee may consider relevant.
The Committee shall provide an employee who is granted such an award
written notice of the number of shares of Restricted Stock contained in the
award, the timing and terms for payment by the employee of the purchase price
of the Restricted Stock to be issued pursuant to the award, a statement of any
restrictions imposed on the Restricted Stock to be issued pursuant to the
award and a statement of the date to be used for determining whether the
restrictions imposed by this Plan have lapsed (such date being hereinafter
referred to as the "Award Date").
For purposes of this plan, if an award of Restricted Stock is granted to
an employee under the terms of this Plan, such employee shall be deemed to be
a "Participant".
5. Awards of Restricted Stock. Each Participant who is granted an
award of Restricted Stock under this Plan shall be required to pay for such
Restricted Stock. The price per share which shall be paid by a Participant
granted an award of Restricted Stock shall be equal to the par value of such
share. The Committee shall determine the time and manner in which a
Participant shall be required to pay for Restricted Stock which he has been
awarded under this Plan. Each share of Restricted Stock awarded to an
employee under the terms of this Plan shall be subject to the restrictions on
transferability contained in Section 6 hereof and such other restrictions as
the Committee may establish at the time the award is granted (which other
restrictions need not be the same for each Participant).
The Committee shall require the Participant to execute an agreement at
the time of issuance of the Restricted Stock to the Participant, which
agreement shall contain such terms and conditions as may be established by the
Committee.
6. Restrictions. The shares of the Restricted Stock sold to a
Participant in connection with this Plan may not be sold, pledged, encumbered
or otherwise alienated or hypothecated by the Participant until the time that
these restrictions have lapsed as hereinafter provided in Section 7 hereof.
7. Termination of Restrictions. The restrictions on the
transferability of shares of Restricted Stock imposed by Section 6 hereof and
any other restrictions which may be imposed by the Committee on shares of
Restricted Stock pursuant to Section 5 hereof shall terminate and lapse:
(a) with respect to all shares of Restricted Stock contained in
a Restricted Stock award, at the end of the five (5) year period beginning on
the Award Date with respect to such Restricted Stock award;
(b) with respect to one third of the shares of Restricted Stock
contained in a Restricted Stock award, for each fiscal year of the Company,
beginning with the Company's fiscal year which begins at least one (1) full
fiscal year after the Company's fiscal year containing the Award Date for such
Restricted Stock award and for each fiscal year thereafter, provided that the
operating performance of the Company is such that the Participant is entitled
to payment of a bonus under the Company's Executive Bonus Plan as adopted by
the Company's Board of Directors on May 27, 1986 and as amended from time to
time thereafter (hereinafter the "Executive Bonus Plan"). If the restrictions
on any shares of Restricted Stock awarded to a Participant will lapse as
provided for in this Section 7(b), the date on which such restrictions will
lapse shall be the date on which the Participant receives written notice from
or on behalf of the Committee that the Participant is entitled to payment of a
bonus under the Executive Bonus Plan;
(c) with respect to all shares of Restricted Stock awarded to a
Participant if: (i) the Participant is employed by a division of the Company,
any corporation in which the Company, directly or indirectly, owns stock
possessing more than fifty percent (50%) of the total combined voting power of
all classes of stock issued by such corporation (hereinafter individually
referred to as a "Subsidiary" and collectively as the "Subsidiaries") or any
division of any Subsidiary of the Company and: (A) all or substantially all of
the stock of the Subsidiary by whom the Participant is employed is sold to an
unrelated third party; (B) all or substantially all the assets of the division
of the Company, the Subsidiary or the division of the Subsidiary by whom the
Participant is employed are sold to an unrelated third party; and (C)
following the sale of stock or assets described in this Section 7(c), the
Participant is not otherwise employed by the Company or any of its
Subsidiaries;
(d) with respect to all shares of Restricted Stock awarded to a
Participant, upon the Participant's attainment of age 65 or upon the
Participant's death, total and permanent disability (to the extent and in a
manner as shall be determined by the Committee in its sole discretion) or
retirement (as determined by the Committee in its sole discretion);
(e) with respect to such portion of the shares of Restricted
Stock awarded to the Participant as may be determined by the Committee, in its
sole discretion, upon the occurrence of such special circumstance or event as,
in the sole discretion of the Committee, merits special consideration; and
(f) with respect to all shares of Restricted Stock awarded to a
Participant, upon the occurrence of a Change in Control which, for purposes of
this Plan, shall be deemed to have occurred if:
(i) any "person" or "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Act) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Act) of more than thirty percent (30%) of the then
outstanding voting stock of the Company, otherwise than through a transactions
arranged by, or consummated with the prior approval of its Board of Directors;
or
(ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Company (and any new director whose election to the Board of
Directors or whose nomination for election by the Company's shareholders was
approved by a vote of at least two thirds of the directors then still in
office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) (hereinafter
referred to as the "Continuing Directors") cease for any reason to constitute
a majority thereof; or
(iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger
of consolidation which would result in the voting securities of the Company
immediately prior thereto continuing to represent (either by remaining
outstanding or being converted into voting securities of the surviving entity)
at least 80% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation (provided, however, that if prior to the merger or
consolidation, the Board of Directors of the Company adopts a resolution that
is approved by a majority of the Continuing Directors providing that such
merger or consolidation shall not constitute a "change in control" for
purposes of the Plan, then such a merger or consolidation shall not constitute
a "change in control"); or
(iv) the shareholders of the Company approve an agreement
for the sale or disposition by the Company of all or substantially all the
assets of the Company.
8. Stockholder Rights. Subject to the other provisions of this Plan,
the Participant shall have all the rights of a stockholder with respect to the
shares of Restricted Stock which are subject to his award including, but not
limited to, the right to receive all dividends, distributions and adjustments
with respect to such shares and the right to vote such shares; provided,
however, that non-cash dividends, distributions and adjustments shall be
subject to the same restrictions and risk of forfeiture set forth in Section 6
and 10 hereof as are applicable to the original shares of Restricted Stock
subject to the Participant's award.
9. Other Restrictions. The Committee may impose such other
restrictions on any shares of Restricted Stock sold pursuant to this Plan as
it may deem advisable, including, without limitation, restrictions required
under the Securities Act of 1933 as amended, restrictions under the
requirements of any stock exchange upon which such shares or shares of the
same class are then listed, and restrictions under any blue sky or securities
laws applicable such shares.
10. Legend. In order to enforce the restrictions imposed on
Restricted Stock granted under this Plan, the Committee shall cause a legend
or legends to be placed on any certificate representing shares of Restricted
Stock issued pursuant to this Plan, which legend or legends shall make
appropriate reference to the restrictions imposed under it.
11. Termination of Employment. Except as hereinafter provided, if a
Participant's employment with the Company or any of its subsidiaries is
voluntarily or involuntarily terminated at any time prior to the date that the
restrictions imposed by Section 6 hereof have lapsed, any shares of Restricted
Stock issued to such Participant with respect to which such restrictions have
not lapsed shall be forfeited and the price paid by the Participant therefor
shall be returned to the Participant.
12. Non-Transferability of Awards. Awards granted under this Plan
shall not be transferable by the Participant otherwise than by will or the
laws of descent and distribution and the right to purchase shares of
Restricted Stock pursuant to an award under this Plan may be exercised or
surrendered during a Participant's lifetime only by the Participant.
13. Tax Withholding. The Company or subsidiary shall deduct and
withhold, from any cash payments to be made to the Participant or from any
stock to be issued to the Participant upon a lapse of the restrictions
provided for hereunder, such amounts under federal, state or local tax rules
or regulations as it deems appropriate with respect to an award under the
Plan. In addition, the Committee may, in its discretion and subject to such
rules as it may adopt, permit a Participant to satisfy the amount of tax
required by law to be withheld, in whole or in part, by electing to have the
Company withhold from any payment under the Plan, shares of Common Stock of
the Company having a fair market value equal to the amount of taxes required
to be withheld. In any event, the Participant shall make available to the
Company or subsidiary, promptly when required, sufficient funds to meet the
requirements of such withholding, and the Committee shall be entitled to take
and authorize such steps as it may deem advisable in order to have such funds
available to the Company or subsidiary when required.
14. Issuance of Shares and Compliance with Securities Act. The
Company may postpone the issuance and delivery of shares of Restricted Stock
until (a) the admission of such shares to listing on any stock exchange on
which shares of Common Stock are then listed and (b) the completion of such
registration or other qualification of such shares of Restricted Stock under
any state or federal law, rule or regulation as the Company shall determine to
be necessary or advisable. As a condition precedent to the issuance of shares
of Restricted Stock pursuant to the grant of an award under the Plan, the
Company may require the recipient thereof to make such representations and
furnish such information as may, in the opinion of counsel for the Company, be
appropriate to permit the Company, in the light of the then existence or non-
existence with respect to such shares of an effective Registration Statement
under the Securities Act of 1933, as amended, to issue the shares in
compliance with the provisions of that or any comparable act.
15. Administration. The Committee shall have full authority to manage
and control the operation and administration of the Plan. Any interpretation
of the Plan by the Committee and any decision made by the Committee of any
matter within its discretion is final and binding on all persons.
16. Employees' and Participants' Rights. No employee or other person
shall have any claim or right to be granted an award of Restricted Stock under
the Plan except as the Committee shall have conferred in its discretion in the
administration of the Plan. Participation in the Plan shall not confer upon
any Participant any right with respect to continuation of employment by the
Company or its subsidiaries, nor interfere with the right of the Company to
terminate at any time the employment of any Participant.
17. Amendment and Termination. The Board of Directors of the Company
may amend, suspend or terminate the Plan or any portion thereof at any time;
provided that no amendment, suspension or termination shall impair the rights
of any Participant, without the Participant's consent, in any Restricted Stock
previously awarded under this Plan. The Committee may amend the Plan to the
extent necessary for the efficient administration of the Plan, or to make it
practically workable or to conform it to the provisions of any federal or
state law or regulation. Notwithstanding the foregoing provisions of this
Section 17, in the event that an amendment is required to be approved by
stockholders of the Company in order to comply with Rule 16b-3 under the Act,
such amendment shall be subject to the requisite approval of the stockholders
of the Company.
18. Non-Exclusivity of Plan. Neither the adoption of this Plan by the
Company's Board of Directors nor the submission of this Plan to the
stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Company's Board of Directors to adopt any
other incentive compensation arrangements it may deem desirable, including,
without limitation, the awarding of Common Stock to employees otherwise than
under the terms of this Plan and such other arrangements as may be either
generally applicable or applicable only in specific cases.
19. Governing Law. Except as required by Delaware corporate law, this
Plan shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to principles of conflict of laws.
20. Effective Date of Amendment and Restatement; Stockholder Approval.
This amendment and restatement of the Plan is conditioned upon its approval
at the next annual meeting of the stockholders of the Company after March 30,
1994, by the holders of a majority of the stock of the Company present in
person or represented by proxy and entitled to vote at such meeting, except
that this amendment and restatement of the Plan is adopted and approved by the
Board of Directors of the Company effective as of March 30, 1994, to permit
the grant of awards hereunder prior to the approval of this amendment and
restatement of the Plan by the stockholders of the Company as aforesaid.
Certificates representing shares of Restricted Stock which are the subject of
any award under the Plan granted prior to such stockholder approval shall in
no event be issued before the date on which such stockholder approval is
obtained. In the event that this amendment and restatement of the Plan is
approved by the stockholders of the Company as aforesaid, the grantee of any
award made prior thereto shall be entitled to the following:
(a) an amount of cash, payable by the Company, equal to the
amount of cash dividends to which he would have been entitled had he actually
owned, as of the Award Date and through the date of issuance of such shares,
the shares of Restricted Stock subject to the award, and
(b) if there shall be declared and paid a stock dividend upon
the Common Stock or the Common Stock shall be split up, converted, exchanged,
reclassified or in any way substituted for, such number and kind of securities
or cash or other property to which he would have been entitled had he actually
owned the shares subject to the award at the time of the occurrence of any
stock dividend, split up, conversation, exchange, reclassification or
substitution, and the aggregate purchase price payable by the grantee shall be
the same as if the original shares of common stock subject to the award were
being purchased thereunder; provided, however, that any securities or other
property (other than cash) shall be subject to the same restrictions and risk
of forfeiture as are applicable to the original shares of Restricted Stock
subject to the award.
In the event that this amendment and restatement of the Plan is not
approved by the stockholders of the Company as aforesaid, this amendment and
restatement of the Plan and any awards made hereunder which could not have
been made based on the number of shares of Restricted Stock available for
issuance prior to this amendment and restatement shall be void and of no force
or effect and the terms and conditions of the Plan as in effect on March 29,
1994 shall be and remain the terms and conditions of the Plan.
IN WITNESS WHEREOF, the undersigned has executed this Amendment and
Restatement of the Mark IV Industries, Inc. 1992 Restricted Stock Plan for and
on behalf of Mark IV Industries, Inc. this 16th day of May, 1994.
MARK IV INDUSTRIES, INC.
By: Richard L. Grenolds
Vice President and
Chief Accounting Officer
Exhibit 10.8
NON-QUALIFIED PLAN OF DEFERRED COMPENSATION OF
MARK IV INDUSTRIES, INC.
________________________________
Third Amendment
and
Restatement
_________________________________
Effective September 1, 1993
NON-QUALIFIED PLAN OF DEFERRED COMPENSATION
OF
MARK IV INDUSTRIES, INC.
_______________________________________
Third Amendment and Restatement
______________________________________
WHEREAS, Mark IV Industries, Inc., a Delaware corporation having its
principal place of business at One Town Centre, John James Audubon Parkway,
Amherst, New York ("Mark IV") adopted a non-qualified plan of deferred
compensation known as the "Non-Qualified Plan of Deferred Compensation for
Employees of Mark IV Industries, Inc. (the "Plan") effective February 20, 1990
in order to provide a select group of its highly compensated management
employees the same amount of retirement income such highly compensated
management employees would have been entitled to receive if the provisions of
the Internal Revenue Code as amended by the Tax Reform Act of 1986, did not
require Mark IV to change the manner in which it administers the Mark IV
Retirement Savings Plan, (a tax qualified retirement plan maintained by Mark
IV for the benefit of certain of its employees), and the Mark IV Industries,
Inc. and Subsidiaries Master Defined Contribution Pension Plan (a tax
qualified retirement plan maintained by Mark IV for certain of its employees);
and
WHEREAS, the Plan provides for the hypothetical investment of amounts
hypothetically credited to accounts established to maintain records of the
amounts payable to Participants in the Plan; and
WHEREAS, Mark IV amended and restated the Plan effective December 1,
1991 to provide that the value of the accounts of certain Participants will be
the greater of the amount hypothetically allocated to the account of the
Participant together with interest thereon and the value of common stock of
Mark IV which is to be hypothetically allocated to the account of such
Participant, and to make certain other conforming changes to the Plan; and
WHEREAS, Mark IV amended and restated the Plan effective December 16,
1992, to provide certain Participants the opportunity to defer the receipt of
payment of any bonus or other incentive compensation which they may be
entitled to receive under the terms of certain executive bonus arrangements
and to provide that the amount of the incentive bonus, if any, which the
Participant defers shall be credited with hypothetical earnings and paid in
accordance with the terms of this Plan; and
WHEREAS, Mark IV desires to provide that, effective September 1,
1993, certain Participants shall be permitted to defer the receipt of all or
any part of the salary or wages they are entitled to receive and to provide
that the amount of the salary or wages deferred by the Participant, if any,
shall be credited with hypothetical earnings and paid in accordance with the
terms of this Plan;
NOW, THEREFORE, Mark IV hereby adopts the following as the Third
Amendment and Restatement of the Plan effective September 1, 1993:
SECTION 1.
Definitions
1.01 Employer means Mark IV Industries, Inc. and any other corporation or
other business entity affiliated with Mark IV or which is a successor in
interest to such corporation or which, hereafter, with the approval of the
Board of Directors of Mark IV, adopts the provisions and obligations of the
Plan with respect to its employees by resolution of its own Board of Directors
or similar governing body.
1.02 Plan means this non-qualified plan of deferred compensation known as
the Non-Qualified Plan of Deferred Compensation for Employees of Mark IV
Industries, Inc.
1.03 Trust Fund means one or more trust funds which may be established by
Mark IV pursuant to this Plan, and all the assets at any time held by the
Trustee of such trust funds.
1.04 Trustee means the person or persons, firm or corporation designated
by the Board of Directors of Mark IV to serve as Trustee of any Trust Fund
which may be created pursuant to the provisions of this Plan, and who, by
joining in the execution of the agreement creating such Trust Fund or any
amendments thereunder, signifies his acceptance of the Trust Fund and any
person or persons, firm or corporation duly appointed as successor Trustee.
1.05 Eligible Employee means any officer or other key employee of the
Employer.
1.06 Board of Directors means the Board of Directors of Mark IV.
1.07 Participant means any Eligible Employee of the Employer who becomes
a participant in the Plan.
1.08 Beneficiary means any person or persons designated, in writing, by a
Participant to share in the benefits of the Plan after his death, or if none,
his spouse, or, if neither, his estate.
1.09 Committee means the administrative committee, referred to in Section
6.01, designated by the Board of Directors of Mark IV to administer the Plan.
1.10 Effective Date means February 20, 1990.
1.11 Anniversary Date means March 1, of each year.
1.12 Valuation Date means the last day of February of each calendar year.
1.13 Plan Year means the 12 consecutive month period beginning on March 1
of each calendar year.
1.14 Compensation means total salary or wages paid by the Employer to an
Eligible Employee at his regular rate for services actually rendered during
the calendar year ending within the Plan Year including bonuses which are
payable with respect to services performed during the fiscal year of the
Employer in which such calendar year ends but which bonuses are paid after the
end of such calendar year (whether or not such salary, wages or bonuses are
actually paid as a result of the Eligible Employee's election to defer receipt
of such Compensation) and further including overtime and amounts contributed
by the Participant to the Mark IV Retirement Savings Plan, a tax qualified
master 401(k) plan maintained by Mark IV, but excluding any portion of the
Annual Deferred Compensation Commitment allocated to the Account of an
Eligible Employee under this Plan or any other contributions or benefits made
to or for the benefit of any Eligible Employee under any other pension, profit
sharing, insurance, hospitalization or other plan or policy maintained by the
Employer for the benefit of any such Eligible Employee. The decision of the
Committee as to what constitutes Compensation within the meaning of the
foregoing definition shall be conclusive.
1.15 Annual Deferred Compensation Commitment means, for each Plan Year,
the amount, if any, established by the Board of Directors of Mark IV and
entered on Schedule A attached hereto, representing the total amount of the
deferred compensation (excluding interest) which Mark IV has agreed and
committed to allocate and pay with respect to such Plan Year in the future, to
the Participants in the Plan.
1.16 Compensation Deferral means, for the Plan Year ending February 28,
1993, for the four (4) month period beginning September 1, 1993 and ending
December 31, 1993 and for each calendar year beginning on or after January 1,
1994, the amount, if any, of the salary, wages, bonus or other incentive
compensation payable to a Participant which the Participant has elected to
defer the receipt of payment of pursuant to Section 3.02 hereof and which Mark
IV has agreed and committed to allocate and pay to such Participant in the
future under the terms of this Plan.
1.17 Applicable Interest Rate means, for each Plan Year, a variable rate
of interest, adjusted on a quarterly basis as of March 1, June 1, September 1
and December 1 of each calendar year and equaling one hundred twenty percent
(120%) of the Federal long-term interest rate established for such months by
the Secretary of the Treasury pursuant to the provisions of Section 1274 of
the Internal Revenue Code and the regulations thereunder.
1.18 Taxable Wage Base means, for each Plan Year, the maximum amount of
earnings which may be considered wages under Internal Revenue Code Section
3121(a)(l), determined as of the last day of the calendar year ending with or
within the Plan Year.
1.19 Authorized Absence means a leave of absence from the Employer or any
Affiliate for a period not exceeding twenty-four (24) months or absence to
enter the Armed Services of the United States during a period of national
emergency or at any time through the operation of a compulsory military
service law of the United States. Leaves of absence may be granted in the
event of illness or accident of an Eligible Employee or a member of his family
or for the continuation of the training or education of the Eligible Employee.
For purposes of this Plan, an Eligible Employee who leaves on an Authorized
Absence shall not be deemed to have incurred a termination of employment with
the Employer or any Affiliate solely by reason of his leaving on such
Authorized Absence. However, the failure of any Eligible Employee to return
to active employment with the Employer or any Affiliate after a leave of
absence or authorized extension thereof or during the period after his
separation from military service in which his reemployment rights are
guaranteed by law shall be deemed a termination of employment at the later of
the date of commencement of such leave of absence or such military leave or
the date for which he was last credited with an Hour of Service. Leaves of
absence shall be granted in accordance with the Employer's normal policies and
practices in a uniform and non-discriminatory manner.
1.20 Year of Service means each Plan Year in which the Eligible Employee
has not less than 1,000 Hours of Service.
1.21 Hour of Service means each hour for which an Eligible Employee is
paid, or entitled to payment, by the Employer or any Affiliate for the
performance of duties. In addition, an Hour of
Service means each hour for which an Eligible Employee is paid, or entitled to
payment, directly or indirectly by the Employer or any Affiliate on account of
a period of time during which no duties are performed (irrespective of whether
the employment relationship has terminated) due to vacation, holiday, illness,
an Employer or Affiliate approved sick or disability leave, layoff, leave of
absence, military leave or jury duty. Notwithstanding the above, the hours
required to be credited to an Eligible Employee pursuant to the provisions of
the preceding sentence shall not include hours for which payment is made or
due under a plan maintained solely for the purpose of complying with
applicable Workers' Compensation laws, or Unemployment Compensation or
disability insurance laws, and no more than 501 hours shall be credited to an
Eligible Employee on account of any single continuous period during which the
Eligible Employee performs no duties. In addition, no hours shall be credited
for a payment which solely reimburses an Eligible Employee for medical or
medically related expenses incurred by the Eligible Employee.
An Hour of Service also means each hour for which back pay,
irrespective of mitigation of damages, has been either awarded or agreed to by
the Employer or any Affiliate; provided, however, that in no event shall the
same hours be credited under both this paragraph and the other paragraphs of
this Section 1.21.
The computation period to which Hours of Service shall be credited
and the number of Hours of Service to be credited for reasons other than the
performance of duties shall be determined under Title 29, Subchapter C,
Section 2530.200b(b) and (c) of Code of Federal Regulations, which is hereby
incorporated by reference. Hours of Service shall be determined from records
maintained by the Employer or Affiliate.
1.22 Vesting Computation Period means each Plan Year.
1.23 Break in Service means each Plan Year during which the Eligible
Employee has completed no more than 500 Hours of Service due to a termination
of employment with the Employer and any Affiliate. A termination of
employment shall not occur upon a Participant's transfer between the
employment of the Employer and any Affiliate.
In the case of an Eligible Employee who is absent from work for any
period by reason of:
(a) the pregnancy of the Eligible Employee;
(b) the birth of a child of the Eligible Employee;
(c) the placement of a child with the Eligible Employee in
connection with the adoption of such child by such Eligible Employee; or
(d) the need to care for such child for a period beginning
immediately following the birth or placement of such child with such Eligible
Employee;
such Eligible Employee shall receive an Hour of Service for each Hour of
Service which the Eligible Employee would have been credited with during the
period of such absence had the Eligible Employee not been absent. If the
Committee is unable to determine the number of Hours of Service which the
Eligible Employee would have been credited with had such Eligible Employee not
been absent, such Eligible Employee shall be credited with 8 Hours of Service
per work day of such absence. Notwithstanding the foregoing, an Eligible
Employee shall not be credited with more than the number of Hours of Service
required to prevent such Eligible Employee from incurring a Break in Service
nor be credited with more than 501 Hours of Service by reason of any absence
described in this paragraph. The Hours of Service credited under this
paragraph shall be credited in the computation period in which the absence
begins if the crediting is necessary to prevent the Eligible Employee from
incurring a Break in Service in that computation period or, in all other
cases, in the following computation period. The provisions of this paragraph
shall be used solely for purposes of determining whether an Eligible Employee
has incurred a Break in Service for participation and vesting purposes.
1.24 Account means the account or accounts established and maintained by
the Committee for each Participant to reflect the amount of the deferred
compensation payable to each Participant under the terms of this Plan and, in
the event a Trust Fund is established pursuant to Section 5.01 hereof, to
reflect the interest of each Participant in the Trust Fund.
1.25 Annual Allocation Account means a sub-account maintained by the
Committee within each Participant's Account for each Plan Year with respect to
which an Annual Deferred Compensation Commitment is to be made and established
by the Committee for the purpose of valuing the total aggregate amount of each
of the Annual Deferred Compensation Commitments made by the Employer to the
Participant's Account together with any earnings thereon as provided for in
this Plan. In the event a Trust Fund is established pursuant to Section 5.01
hereof, the "Annual Allocation Account" shall mean a sub-account established
and maintained by the Committee for each Plan Year with respect to which an
Annual Deferred Compensation Commitment is to be made and which reflects the
amount, if any, which is allocated to the Participant's Account for such Plan
Year, increased or decreased to reflect the proportionate share of the
earnings or losses of the Trust Fund attributable to such portion of the
Participant's Account.
1.26 Compensation Deferral Account means a sub-account maintained by the
Committee within the Account of each Participant that has made a Compensation
Deferral and established by the Committee for the purpose of valuing the
amount of the Compensation Deferrals made by the Participant together with any
earnings thereon as provided for in this Plan. In the event a Trust Fund is
established pursuant to Section 5.01 hereof, the "Compensation Deferral
Account" shall mean a sub-account established and maintained by the Committee
for each Participant that has made a Compensation Deferral and which reflects
the aggregate amount of the Compensation Deferrals allocated to the
Participant's Account, increased or decreased to reflect the proportionate
share of the earnings or losses of the Trust Fund attributable to such portion
of the Participant's Account.
1.27 Phantom Stock means the shares of common stock of Mark IV, if
any, which are hypothetically allocated to a Participant's Account pursuant to
the terms of this Plan.
1.28 Dollar Value means, except as otherwise specifically provided in
Section 3.10 hereof, an amount equal to the sum of (a) the dollar amount
credited to a Participant's Account, if any, under the terms of the Plan,
determined as of November 30, 1991 including the interest credited thereon as
provided for in this Plan; and (b) the total of the dollar amounts credited to
each of the Annual Allocation Accounts and the Compensation Deferral Account
contained within the Participant's Account including the interest credited
thereon as provided for in this Plan.
1.29 Share Value means an amount equal to (a) the sum of (i) the
number of shares of Phantom Stock, if any, credited to a Participant's Account
as of November 30, 1991 under the terms of this Plan; and (ii) the total of
the number of shares of Phantom Stock, if any, credited to each of the Annual
Allocation Accounts and the Compensation Deferral Account contained within the
Participant's Account; multiplied by (b) the applicable price per share of
common stock of Mark IV as determined pursuant to Section 3.07 hereof.
1.30 Fiduciary means any person with respect to the Plan to the extent:
(a) He exercises any discretionary authority or discretionary
control respecting management of the Plan or exercises any authority or
control respecting management or disposition of its assets;
(b) He renders investment advice for a fee or other compensation,
direct or indirect, with respect to any moneys or other property of the Plan
or has any authority or responsibility to do so; or
(c) He has any discretionary authority or discretionary
responsibility in the administration of the Plan.
This term also includes persons designated by the Committee to carry
out fiduciary responsibilities under the Plan. A Fiduciary may serve in more
than one fiduciary capacity (including service as both Trustee and Committee)
with respect to this Plan.
1.31 Investment Manager means that person so designated by the Committee
to manage and invest designated Plan assets, who acknowledges his acceptance
in writing and who is either (a) registered in good standing as an Investment
Adviser under the Investment Advisers Act of 1940, (b) a bank, as defined in
that Act, or (c) an insurance company qualified to perform investment
management services under the laws of more than one state.
1.32 ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and corresponding provisions of future laws, as amended.
1.33 Affiliate means any corporation under common control with the
Employer within the meaning of Internal Revenue Code Section 414(b) and any
trade or business (whether or not incorporated) under common control with the
Employer within the meaning of Internal Revenue Code Section 414(c).
1.34 Internal Revenue Code, Code and IRC each mean the Internal Revenue
Code of 1986, as amended.
1.35 Mark IV Retirement Savings Plan means a master profit
sharing/401(k) plan established effective March 1, 1987 and maintained by Mark
IV Industries, Inc. and any successor plan to such master profit
sharing/401(k) plan.
1.36 Profit Sharing Adoption Agreement means an adoption agreement
which provides for the continuation of the provisions of the Employees Profit
Sharing Plan of Mark IV Industries, Inc. (a profit sharing plan established by
Mark IV Industries, Inc. effective July 1, 1973) within the framework of the
Mark IV Retirement Savings Plan.
1.37 Mark IV Industries, Inc. and Subsidiaries Master Defined
Contribution Pension Plan means a master defined contribution pension plan
established effective March 1, 1987 and maintained by Mark IV Industries, Inc.
and any successor plan to such master defined contribution pension plan.
1.38 Pension Plan Adoption Agreement means an adoption agreement
which provides for the continuation of the provisions of the Employees
Retirement Plan of Mark IV Industries, Inc. (a defined contribution pension
plan established by Mark IV Industries, Inc. effective July 1, 1973) within
the framework of the Mark IV Industries, Inc. Master Defined Contribution
Pension Plan.
SECTION 2.
Eligibility
2.01 Employees Eligible.The Committee shall determine which Eligible
Employees will participate in the Plan and the determination of the Committee
concerning which Eligible Employees shall participate in the Plan shall be
conclusive and binding on all persons. An Eligible Employee shall become a
Participant in the Plan on the date that the Committee gives such Eligible
Employee written notice that he or she has become a Participant in the Plan.
Schedule B attached hereto contains a list of the Eligible Employees that
were Participants in the Plan effective as of September 1, 1993.
2.02 Participation Form. The Committee shall furnish each Eligible
Employee who becomes a Participant in the Plan with a form containing such
information as the Committee may desire, including, but not limited to, date
of birth of the Eligible Employee, and the Beneficiary designation of such
Eligible Employee.
SECTION 3.
Annual Deferred Compensation Commitment
and
Compensation Deferrals
3.01 Annual Deferred Compensation Commitment. For each Plan Year
(including the Plan Year ending on February 28, 1990) and not later than the
time prescribed by law for filing the Federal Income Tax Return of Mark IV for
the fiscal year of Mark IV in which such Plan Year ends (including extensions
thereof), Mark IV shall, with respect to such fiscal year, establish the
amount of the Annual Deferred Compensation Commitment to be allocated among
the Participants in the Plan that were employed by the Employer as of the end
of the Plan Year ending with or within such fiscal year. The amount of the
Annual Deferred Compensation Commitment for any Plan Year together with
earnings thereon as provided by Section 3.10 hereof, shall represent the
amount which Mark IV has (subject to the vesting provisions of this Plan)
agreed to pay to Participants in the Plan as of the end of the Plan Year for
which such Annual Deferred Compensation Commitment has been made and, unless a
Trust Fund is established pursuant to Section 5.01 hereof, no segregation of
any assets of Mark IV for the purpose of paying such Annual Deferred
Compensation Commitment shall be required. For each Plan Year, the amount of
the Annual Deferred Compensation Commitment shall be determined by the Board
of Directors of Mark IV and shall be entered on Schedule A attached to this
Plan. The amount of the Annual Deferred Compensation Commitment as determined
by the Board of Directors of Mark IV shall be conclusive and binding on Mark
IV, all Participants, the Committee and the Employer.
3.02 Compensation Deferrals. For each Plan Year beginning with the Plan
Year ending February 28, 1993, each Participant identified in Schedule B
attached hereto may elect to defer his receipt of payment of all or any part
of the bonus or other incentive compensation to which he is entitled as
provided for in the executive bonus and other incentive plans of Mark IV. If
a Participant makes a Compensation Deferral with respect to his bonus or other
incentive compensation payable in connection with the services he has provided
to the Employer for any Plan Year ending on or after February 28, 1993, the
amount of the bonus or other incentive compensation which the Participant has
elected to defer the receipt of shall not be paid to the Participant by his
Employer except as provided for hereunder.
For the four (4) month period beginning September 1, 1993 and ending
December 31, 1993, and for each calendar year beginning on or after January 1,
1994, each Participant identified in Schedule B attached hereto may elect to
defer the receipt of payment of all or any part of the salary or wages, to
which he is entitled. If a Participant makes a Compensation Deferral with
respect to the salary or wages to which he is entitled for the four (4) month
period beginning September 1, 1993 and ending December 31, 1993 or for any
calendar year thereafter, the portion of the salary or wages which the
Participant has elected to defer the receipt of shall not be paid by his
Employer except as provided for hereunder.
The total amount of the Compensation Deferrals made by a Participant
(which shall include the total amount of the salary, wages, bonus or other
incentive compensation which the Participant has elected to defer the receipt
of payment of) together with any earnings thereon as provided by Section 3.10
hereof, shall represent the amount which Mark IV has agreed to pay to the
Participant that makes such Compensation Deferral and, unless a Trust Fund is
established pursuant to Section 5.01 hereof, no segregation of any assets of
Mark IV for the purpose of paying such Compensation Deferral shall be
required.
A Participant that is eligible to make Compensation Deferrals may make a
Compensation Deferral by executing and delivering to the Committee, a form,
supplied by the Committee, which provides a description of the amount of the
Participant's salary or wages which the Participant elects to defer the
receipt of together with a description of the portion of the bonus or other
incentive compensation which the Participant elects to defer the receipt of (a
"Deferred Compensation Election Form"). The Deferred Compensation Election
Form shall also contain a statement of the period of time over which payment
of the Participant's salary, wages, bonus or other incentive compensation is
to be deferred (which period of time may extend beyond the Participant's
Normal Retirement Date and may be different for separate and distinct portions
(identified by the Participant) of the salary or wages, bonus or incentive
compensation which the Participant has elected to defer). The Deferred
Compensation Election Form shall provide, among other things, that the
Participant's election to defer the receipt of payment of the salary or wages
otherwise payable to the Participant is irrevocable for the calendar year for
which the election is made, that the Participant's election to defer the
receipt of payment of any bonus or other incentive compensation payable to the
Participant is irrevocable and that the Participant waives his right to make
any claim for payment of the salary, wages, bonus or other incentive
compensation which the Participant has elected to defer except to the extent
such amount is payable pursuant to this Plan.
Notwithstanding the provisions of the preceding paragraph, a
Participant's election to defer the receipt of any portion of his salary or
wages shall be effective only for the calendar year immediately following the
date the Participant delivers his Deferred Compensation Election Form to the
Committee and a Participant's election to defer the receipt of any portion of
the bonus or other incentive compensation to which he may be entitled shall be
effective only for the bonus or other incentive compensation which is payable
as of the end of the Plan Year immediately following the date the Participant
delivers his Deferred Compensation Election Form to the Committee. Therefore,
in the event a Participant identified in Schedule B attached hereto desires to
defer the receipt of any portion of the salary or wages which he is otherwise
entitled to for a calendar year following the calendar year in which payment
of the Participant's salary or wages has been deferred, the Participant must
execute and deliver a new Deferred Compensation Election Form to the Committee
within the time set forth in the following paragraph. In addition, in the
event a Participant identified in Schedule B desires to defer the receipt of
any portion of the bonus or other incentive compensation he is entitled to for
a Plan Year following the Plan Year in which any portion of his bonus or other
incentive compensation was deferred, the Participant must execute and deliver
a new Deferred Compensation Election Form to the Committee within the time set
forth in the following paragraph.
If a Participant that is eligible to defer the receipt of payment of a
portion of his Compensation desires to defer a portion of his Compensation
effective September 1, 1993, the Participant shall deliver an executed
Deferred Compensation Election Form to the Committee on or before September 1,
1993. If a Participant desires to defer the receipt of a portion of his
Compensation for any calendar year beginning on or after January 1, 1994, the
Participant shall deliver an executed Deferred Compensation Election Form to
the Committee on or before December 31 of the calendar year preceding the
calendar year in which the Participant desires to have the receipt of such
Compensation deferred.
3.03 Participant's Account.The Committee shall establish and maintain
an Account in the name of each Participant to which the Committee shall
credit such Participant's share of each AnnualDeferred Compensation
Commitment made pursuant to the provisions of this Plan together with
interest thereon as determined by Section 3.10 hereof and, if applicable,
Phantom Stock as determined pursuant to Section 3.06 hereof
Beginning with the Plan Year ending on February 29, 1992 and for each
calendar year thereafter in which an Annual Deferred Compensation Commitment
is made pursuant to this Plan, the Committee shall establish and maintain,
within each Participant's Account, an Annual Allocation Account in the name of
such Participant which shall be credited with such Participant's share of the
Annual Deferred Compensation Commitment to be made for such Plan Year as
determined pursuant to Section 3.04 hereof together with interest thereon as
determined pursuant to Section 3.10 hereof and, if applicable, the number of
shares of Phantom Stock determined pursuant to Section 3.06 hereof.
Beginning with the Plan Year ending February 28, 1993 and for each
calendar year beginning on or after January 1, 1994, in which a Participant
makes a Compensation Deferral pursuant to this Plan, the Committee shall
establish and maintain, within each Participant's Account, a Compensation
Deferral Account in the name of such Participant which shall be credited with
the amount of such Participant's Compensation Deferral pursuant to the terms
of the Deferred Compensation Election Form executed by the Participant and
effective for such calendar year, together with interest thereon as determined
pursuant to Section 3.10 hereof and the number of shares of Phantom Stock
determined pursuant to Section 3.06 hereof.
In the event a Trust Fund is established pursuant to Section 5.01 hereof,
the Committee shall establish and maintain, within the Trust Fund, an Account
in the name of each Participant. At the time the Trust Fund is established,
the Committee shall credit the Account of a Participant with an amount equal
to the greater of the Dollar Value and, if applicable, the Share Value of the
Participant's Account at the time the Trust Fund is established and,
thereafter, the Committee shall credit such Participant's Account with the
Participant's share of the net earnings of the Trust Fund and charge such
Participant's Account with the net losses of the Trust Fund and distributions
from the Trust Fund made on the Participant's behalf. In the event that this
Plan is continued by Mark IV or its successor following the establishment of a
Trust Fund, the Committee shall establish a Compensation Deferral Account
within the Account of a Participant that is eligible to make a Compensation
Deferral, which Compensation Deferral Account shall be credited with the
amount of Compensation Deferrals made to the Plan by the Participant together
with earnings or losses thereon. In addition, if the Plan is continued by
Mark IV or its successor following the establishment of a Trust Fund, for each
Plan Year following the establishment of the Trust Fund, the Committee shall
establish within each Participant's Account in the Trust Fund, an Annual
Allocation Account in the name of such Participant which shall be credited
with such Participant's share of the Annual Deferred Compensation Commitment
for such Plan Year together with all earnings or losses thereon.
3.04 Allocation of Annual Deferred Compensation Commitment. The
Committee shall allocate the Annual Deferred Compensation Commitment for each
Plan Year among the Accounts of the several Participants in the following
manner:
(a) There shall first be allocated to the Annual Allocation Account
of each Participant, an amount equal to four percent (4%) of the amount by
which the Compensation of such Participant exceeds the lesser of: (i)(A) for
the Plan Years ending prior to March 1, 1994, an amount equal to $200,000 or
such other amount as may be established by the Secretary of the Treasury under
IRC Section 401(a)(17); and (B) for Plan Years beginning March 1, 1994 and
thereafter, an amount equal to $150,000 or such other amount as may be
established by the Secretary of the Treasury under IRC Section 401(a)(17); and
(ii) for Plan Years beginning March 1, 1993 and thereafter, the actual amount
of Compensation paid to the Participant during the calendar year ending within
the Plan Year (excluding, for this purpose, the amount of Compensation which
the Participant has elected to defer the receipt of pursuant to Section 3.02
hereof. In the event the Annual Deferred Compensation Commitment is
insufficient to make the foregoing allocation, there shall be allocated to
each Participant's Annual Allocation Account, an amount which bears the same
ratio to the Annual Deferred Compensation Commitment as the portion of such
Participant's Compensation described in the preceding sentence bears to the
total Compensation of all Participants described in the preceding sentence.
(b) Following the allocation of the Annual Deferred Compensation
Commitment as provided in Section 3.04(a) above, there shall be allocated to
each Participant's Annual Allocation Account, an amount equal to that
percentage of each Participant's Compensation in excess of the Taxable Wage
Base for the Plan Year for which the Annual Deferred Compensation Commitment
is being made, which percentage equals the rate of tax provided for by IRC
Section 3111(a) as determined on the last day of the calendar year ending with
or within such Plan Year. In the event that the Annual Deferred Compensation
Commitment is insufficient to make the foregoing allocation, there shall be
allocated to each Participant's Annual Allocation Account, an amount which
bears the same ratio to the Annual Deferred Compensation Commitment as such
Participant's Compensation for such Plan Year in excess of the Taxable Wage
Base for the Plan Year for which the Annual Deferred Compensation Commitment
is being made bears to the total Compensation of all of the Participants in
excess of such Taxable Wage Base.
(c) The remaining amount of the Annual Deferred Compensation
Commitment, if any, shall then be allocated among the Annual Allocation
Accounts of the several Participants in the same ratio as such Participant's
Compensation for the fiscal year bears to the total Compensation of all
Participants for such fiscal year.
3.05 Time of Allocation. For purposes of determining the Dollar Value of
a Participant's Account: (a) the amount of the Annual Deferred Compensation
Commitment to be allocated to the Account of a Participant for a Plan Year
shall be deemed to be allocated to such Participant's Account, and to the
Annual Allocation Account established for such Plan Year, as of the end of
such Plan Year, (b) the amount of the salary or wages deferred by a
Participant in connection with a Compensation Deferral shall be deemed to be
credited to the Participant's Account and the Compensation Deferral Account
established for the Participant as of the end of the calendar month during
which the services giving rise to such salary or wages were performed, and (c)
the amount of any bonus or other incentive compensation deferred by a
Participant in connection with a Compensation Deferral shall be deemed to be
credited to such Participant's Account, and to the Compensation Deferral
Account established for the Participant as of the end of the Plan Year ending
with or within the fiscal year of the Company with respect to which such bonus
or other incentive compensation is payable. For purposes of determining the
Share Value of a Participant's Account as of the end of any Plan Year, the
number of shares of Phantom Stock to be allocated to the Account of a
Participant for a Plan Year shall be deemed to be allocated to such
Participant's Account, to the Participant's Compensation Deferral Account, if
any, and to the Annual Allocation Account established for such Plan Year, as
of the end of such Plan Year.
3.06 Allocations of Phantom Stock. If the Dollar Value of a Participant's
Account determined as of November 30, 1991 exceeds $25,000, the Committee
shall allocate to the Account of such Participant, as of December 1, 1991, the
number of shares of Phantom Stock which could be purchased at a price per
share determined in accordance with Section 3.07 hereof using the Dollar Value
of the Participant's Account determined as of November 30, 1991.
In addition, if the Dollar Value of a Participant's Account determined as
of November 30, 1991 was less than $25,000 but the Dollar Value of such
Participant's Account determined as of the end of any Plan Year thereafter
exceeds $25,000, (including the amount, if any, of the portion of the Annual
Deferred Compensation Commitment to be allocated to the Participant's Annual
Allocation Account for such Plan Year and the amount, if any, of the
Compensation Deferrals credited to the Participant's Compensation Deferral
Account as of the end of such Plan Year), the Committee shall allocate to such
Participant's Account as of the end of such Plan Year, the number of shares of
Phantom Stock which could be purchased at a price per share determined in
accordance with Section 3.07 hereof using the Dollar Value of the
Participant's Account determined as of the end of such Plan Year. For
purposes of this paragraph, the number of shares of Phantom Stock allocated to
the Participant's Account as of the end of such Plan Year shall be allocated
by the Committee among the various sub-accounts established by the Committee
for the Participant in proportion to the respective Dollar Values of such sub-
accounts.
Beginning with the Plan Year ending February 29, 1992, for the Plan Year
ending February 28, 1993 and for each Plan Year thereafter, unless a Trust
Fund has been established pursuant to Section 5.01 hereof, if the Dollar Value
of a Participant's Account exceeds $25,000, the Committee shall credit the
Annual Allocation Account to be established for such Participant with the
number of shares of Phantom Stock which could be purchased at a price per
share determined pursuant to Section 3.07 hereof using an amount equal to the
portion of the Annual Deferred Compensation Commitment which is to be
allocated to such Participant's Annual Allocation Account for such Plan Year.
In addition, if the Dollar Value of a Participant's Account exceeds $25,000,
and the Participant is eligible to make a Compensation Deferral, as of the end
of each calendar month, the Committee shall credit the Participant's
Compensation Deferral Account with the number of shares of Phantom Stock, if
any, which could be purchased at a price per share determined pursuant to
Section 3.07 hereof using the amount of salary or wages, if any, deferred by
the Participant in connection with the services performed by such Participant
for such calendar month and, as of the end of each Plan Year, the Committee
shall credit the Participant's Compensation Deferral Account with the number
of shares of Phantom Stock, if any, which could be purchased at a price per
share determined pursuant to Section 3.07 hereof using the amount of the bonus
or other incentive compensation, if any, deferred by the Participant with
respect to services performed by the Participant during such Plan Year.
3.07 Pricing of Mark IV Common Stock. For purposes of determining the
number of shares of Phantom Stock, if any, to be allocated to the Account of a
Participant as of December 1, 1991, the price per share of common stock of
Mark IV shall be deemed to be the average of the closing prices per share of
common stock of Mark IV during the month of November, 1991, as determined from
the closing prices per share of common stock of Mark IV as reported by the New
York Stock Exchange Composite Index for such month.
For purposes of determining the number of shares of Phantom Stock, if
any, to be allocated to the Account of a Participant, as of the end of any
calendar month in connection with the salary or wages deferred by the
Participant as provided for by Section 3.06 hereof, the price per share of
common stock of Mark IV shall be deemed to be the average of the closing
prices per share of common stock of Mark IV during such calendar month as
determined from the closing prices per share of common stock of Mark IV. For
purposes of determining the number of shares of Phantom Stock, if any, to be
allocated to the Account of a Participant as of the end of each Plan Year with
respect to the bonus or other incentive compensation deferred by the
Participant as provided for by Section 3.06 hereof, the price per share of
common stock of Mark IV shall be deemed to be the average of the closing
prices per share of common stock of Mark IV during the month of February for
the Plan Year for which such bonus or other incentive compensation was
deferred. For purposes of determining the number of shares of Phantom Stock,
if any, to be allocated to the Account of a Participant, as of the end of each
Plan Year in connection with any Annual Deferred Compensation Commitment
allocated to the Participant's Account as of the end of such Plan Year
pursuant to Section 3.06 hereof, the price per share of common stock of Mark
IV shall be deemed to be the average of the closing prices per share of common
stock of Mark IV during the month of February for the Plan Year for which the
Annual Deferred Compensation Commitment is to be made. For purposes of
determining the average of the closing prices per share of common stock of
Mark IV as required by this paragraph, such closing prices shall be determined
from the closing prices per share of common stock of Mark IV reported by the
New York Stock Exchange Composite Index for such month.
For purposes of determining the amount of the funds to be transferred to
any Trust Fund established pursuant to Section 5.01 hereof, the price per
share of common stock of Mark IV shall be the closing price per share of
common stock of Mark IV on the day a Change in Control (as defined in Section
5.03 hereof) occurs, as reported by the New York Stock Exchange Composite
Index.
For purposes of determining the Share Value of a Participant's Account if
the Participant's employment with the Employer is voluntarily or involuntarily
terminated for any reason including, but not limited to, the Participant's
retirement, death or suffering of a total and permanent disability, the price
per share of common stock of Mark IV shall be deemed to be the average of the
closing prices per share of common stock of Mark IV as reported by the New
York Stock Exchange Composite Index for the thirty (30) day period ending on
the day the Participant's employment with the Employer is terminated.
If, pursuant to Section 4.05 hereof, a Participant has elected to receive
payment of all or any portion of the Participant's Account attributable to
Compensation Deferrals while the Participant is still employed by the
Employer, for purposes of determining the Share Value of such portion of the
Participant's Account, if any, at the time or times for payment of such
portion of the Participant's Account, the price per share of the common stock
of Mark IV shall be deemed to be the average of the closing prices per share
of common stock of Mark IV during the calendar month ending immediately prior
to the date for payment of all or any such portion of the Participant's
Account as determined by the closing prices per share of common stock of
Mark IV for such period as reported by the New York Stock Exchange Composite
Index for such month.
3.08 Anti-Dilution Provisions. The aggregate number of shares of
Phantom Stock allocated to a Participant's Account shall be adjusted
proportionately in the event of any change, increase or decrease in the total
number of issued and outstanding shares of common stock of Mark IV or any
change in classification of the shares of common stock of Mark IV without the
receipt of consideration by Mark IV as a result of any stock split, reverse
stock split or other consolidation of shares of common stock of Mark IV or as
a result of any payment of a stock dividend, recapitalization,
reclassification or other adjustment in the capital of Mark IV without receipt
of consideration by Mark IV.
3.09 Fractional Shares and Dividends. In the event that any cash
dividends are paid with respect to any Phantom Stock allocated to a
Participant's Account, an amount equal to the amount of the cash dividends
which would be payable with respect to the number of shares of Phantom Stock
contained in the Participant's Account shall be allocated by the Committee to
the Participant's Account as of the date for payment of such cash dividends
specified by Mark IV in the resolution authorizing the payment of such cash
dividends. Such cash dividends shall be allocated among the respective sub-
accounts established by the Committee for the Participant in proportion to the
number of shares of Phantom Stock contained in such sub-accounts.
In addition, if any fractional shares of common stock of Mark IV would
result from the allocation of a portion of any Annual Deferred Compensation
Commitment to a Participant's Account, from the crediting of any Compensation
Deferral to a Participant's Account, or in connection with any change in the
total number of issued and outstanding shares of common stock of Mark IV
without the receipt of compensation by Mark IV, an amount equal to such
fractional share of common stock of Mark IV shall be allocated to the Annual
Allocation Account or Compensation Deferral Account, as the case may be,
established for the Plan Year in which such fractional share becomes allocable
to the Participant's Account.
3.10 Allocation of Interest. Subject to the provisions of the
following paragraphs, unless a Trust Fund has been established pursuant to
Section 5.01 hereof, as of the end of each Plan Year, the Committee shall
increase the Dollar Value of each Participant's Account by an amount equal to
the Applicable Interest Rate multiplied by the Dollar Value of such
Participant's Account determined as of the end of the preceding Plan Year. In
addition, if a Participant has elected to defer the receipt of all or any
portion of his salary or wages by making a Compensation Deferral and if a
Trust Fund has not been established pursuant to Section 5.01 hereof, as of the
end of each Plan Year, the Committee shall increase the Dollar Value of each
Participant's Account by an amount equal to the amount of interest which would
have been earned by applying the Applicable Interest Rate for the immediately
preceding Plan Year (adjusted for periods of less than one year) to each of
the monthly allocations of the salary or wages deferred by the Participant
during the Plan Year but only for the period between the date a monthly
allocation of the Participant's salary or wages is made to the Participant's
Deferral Compensation Account and the end of the Plan Year. For purposes of
this Section 3.10, the amount of the interest to be allocated to the
Participant's Account as of the end of such Plan Year shall be allocated among
the respective sub-accounts established by the Committee for the Participant
in proportion to the Dollar Values of such sub-accounts, determined as of the
end of the preceding Plan Year. Notwithstanding the foregoing, the proportion
of a Participant's Annual Allocation Account or Compensation Deferral Account,
if any, which is attributable to cash dividends which would be payable with
respect to the shares of common stock of Mark IV allocated to the
Participant's Annual Allocation Account or Compensation Deferral Account,
respectively, shall only be increased by the Applicable Interest Rate for the
immediately preceding Plan Year (adjusted for periods of less than one year)
for the period between the date such cash dividends would be allocated to the
Participant's Annual Allocation Account or Compensation Deferral Account,
respectively, and the end of the Plan Year.
If a Trust Fund has not been established and a Participant's employment
with the Employer is terminated on account of his death, retirement or
suffering of a Total and Permanent Disability, the Committee shall increase
the Dollar Value of such a Participant's Account by an amount equal to the
amount of interest which would have been earned by the Dollar Value of the
Participants' Account determined as of the end of the Plan Year ending prior
to the Participant's death, retirement or Total and Permanent Disability and
applying the Applicable Interest Rate for such immediately preceding Plan Year
(adjusted for periods of less than one year) to such Dollar Value for the
period from the end of such Plan Year to the date the Participant's employment
with the Employer is terminated on account of the Participant's retirement,
death or suffering of a Total and Permanent Disability. In addition, if a
Participant has elected to make Compensation Deferrals, a Trust Fund has not
been established and the Participant's employment with the Employer is
terminated on account of his death, retirement or suffering of a Total and
Permanent Disability, the Committee shall increase the Dollar Value of such
Participant's Account by an amount equal to the amount of interest which would
have been earned by applying the Applicable Interest Rate (adjusted for
periods of less than one year) to each of the monthly allocations of salary or
wages made to the Participant's Compensation Deferral Account for the period
between the date such monthly allocation is made to the Participant's
Compensation Deferral Account and the date the Participant's employment with
the Employer is terminated on account of his retirement, death or suffering of
a Total and Permanent Disability. As soon as practicable following the
termination of a Participant's employment with the Employer on account of
death, retirement or Total and Permanent Disability, the Committee shall
compare the Dollar Value of the Participant's Account determined as of the
date of the Participant's retirement, death or Total and Permanent Disability
(including the amount of any interest thereon as provided for by the two
preceding sentences) with the Share Value of the Participant's Account
determined as of the date of the Participant's retirement, death or Total and
Permanent Disability and the greater of such values shall, thereafter, be
deemed the Dollar Value of the Participant's Account determined as of the date
the Participant's employment with the Employer is terminated on account of the
Participant's death, retirement or Total and Permanent Disability.
Thereafter, if a Trust Fund has not been established, the Dollar Value (as
determined pursuant to the preceding sentence) of the Account of a Participant
whose employment with the Employer has been terminated on account of his
death, retirement or suffering of a Total and Permanent Disability, shall be
credited with interest for the period beginning on the date the Participant's
employment with the Employer is terminated as a result of his death,
retirement or Total and Permanent Disability and ending on the date the value
of the Participant's Account is distributed. For each Plan Year or portion
thereof which elapses during the period beginning on the date a Participant's
employment with the Employer is terminated on account of his death, retirement
or Total and Permanent Disability and ending on the date the value of the
Participant's Account is distributed, the interest rate which shall be applied
to the Dollar Value of the Account of such Participant shall be the Applicable
Interest Rate as in effect for the immediately preceding Plan Year.
If a Trust Fund has not been established and a Participant's employment
with the Employer is terminated for any reason prior to his death, retirement
or suffering of a Total and Permanent Disability, the Share Value of the
Participant's Account, if any, shall be determined as provided in Section 3.07
hereof, and the Committee shall compare the Dollar Value of the Participant's
Account determined as of the end of the immediately preceding calendar month
with the Share Value of the Participant's Account as of the end of the
immediately preceding calendar month and the greater of such values shall,
thereafter, be deemed the Dollar Value of such Participant's Account
determined as of the date the Participant's employment with the Employer is
terminated. Thereafter, the Participant's Account shall be credited with
interest during the period beginning on the date the Participant's employment
with the Employer is terminated and ending on the last day of the calendar
month ending immediately before the calendar month in which the Participant's
Account is distributed. The amount of such interest for any such period shall
be equal to the Applicable Interest Rate for the immediately preceding Plan
Year multiplied by the Dollar Value of the Participant's Account determined as
of the end of the immediately preceding Plan Year. For purposes of this
paragraph, the amount of interest to be allocated to the Participant's Account
as of the end of a Plan Year shall be allocated among the respective sub-
accounts established by the Committee for the Participant in proportion to the
Dollar Values of such sub-accounts, determined as of the end of the preceding
Plan Year.
Upon the occurrence of a Change in Control as defined in Section 5.03
hereof, the Committee shall increase the Dollar Value of each Participant's
Account by an amount equal to the amount of interest which would have been
earned by the Dollar Value of such Participant's Account determined as of the
Plan Year ending prior to the Change in Control and applying the Applicable
Interest Rate for such immediately preceding Plan Year to such Dollar Value
for the period from the end of such Plan Year to the date on which the Change
in Control occurs. In addition, upon the occurrence of a Change in Control,
the Committee shall increase the Dollar Value of the Account of a Participant
that has elected to make Compensation Deferrals by an amount equal to the
amount of interest, if any, which would have been earned by applying the
Applicable Interest Rate for the immediately preceding Plan Year (adjusted for
periods of less than one year) to each of the monthly allocations of salary or
wages, if any, made to the Participant's Compensation Deferral Account for the
period between the date such monthly allocation is made to the Participant's
Compensation Deferral Account and the date the Change in Control occurs.
If a Trust Fund has been established pursuant to Section 5.01 hereof and
a Participant's employment with the Employer is terminated for any reason
prior to his death, retirement or disability, during the period between the
date such Participant's employment with the Employer is terminated and the
date that distribution of the Participant's Account begins, such Participant's
Account shall be credited or charged with its proportionate share of the
earnings or losses of the Trust Fund.
3.11 Allocation of Forfeitures. As of each Valuation Date, the Committee
shall allocate the amounts, if any, forfeited in accordance with Section 4.07
hereof among the Accounts of the several Participants as if said amounts were
an additional Annual Deferred Compensation Commitment of Mark IV with respect
to the Plan Year of containing such Valuation Date.
3.12 Allocations Upon Death, Disability or Retirement. If a
Participant's employment with the Employer is terminated due to the
Participant's retirement, death or suffering of a Total and Permanent
Disability after the Participant has completed at least 1000 Hours of Service,
as soon as practicable following such Participant's termination of employment
with the Employer (but in no event later than thirty (30) days following the
date the Participant's employment with the Employer is terminated due to the
Participant's death, retirement or suffering of a Total and Permanent
Disability) the Committee shall allocate an additional amount to the
Participant's Account. The additional amount to be allocated to a
Participant's Account as described in the preceding sentence shall be equal to
the amount, if any, which would have been allocated to the Participant's
Account based on the Participant's Compensation during the calendar year in
which the Participant's employment with the Employer is terminated had the
amount of the Annual Deferred Compensation Commitment for the Plan Year
containing the Participant's termination of employment been equal to the
amount required to make the full allocations set forth in Sections 3.04(a) and
(b) hereof.
3.13 Participants Eligible for Allocation. Except as otherwise provided
by Section 3.12 hereof, for purposes of Section 3.04 hereof, the term
"Participant" shall only include those Participants who (a) have completed at
least 1,000 Hours of Service with the Employer during the Plan Year for which
the allocation of the Annual Deferred Compensation Commitment is to be made;
and (b) are employed by the Employer on the last day of the Plan Year for
which the allocation of the Annual Deferred Compensation Commitment is to be
made.
3.14 Allocation Does Not Vest Any Interest. The fact that an amount is
credited to the Account of a Participant shall not vest in such Participant or
any Beneficiary any right, title or interest in any assets of Mark IV except
at such time or times and upon the terms and conditions herein provided. In
addition, in the event a Trust Fund is established pursuant to Section 5.01
hereof, the fact that an amount is credited to the Account of a Participant
shall not vest in such Participant or any Beneficiary any right, title or
interest in the assets of the Trust Fund except at such time or times and upon
the terms and conditions provided herein.
3.15 Contributions. In the event a Trust Fund is established pursuant to
Section 5.01 hereof and, following the establishment of such Trust Fund, Mark
IV or its successor elects to continue this Plan, for each Plan Year in which
an Annual Deferred Compensation Commitment is made under this Plan and not
later than the time prescribed by law for filing of the Federal Income Tax
Return of Mark IV or its successor, Mark IV or its successor shall make a
contribution to the Trust Fund in an amount equal to the Annual Deferred
Compensation Commitment for such Plan Year. In addition, in the event a Trust
Fund is established pursuant to Section 5.01 hereof and, following the
establishment of such Trust Fund, Mark IV or its successor elects to continue
this Plan, for each Plan Year in which a Participant makes a Compensation
Deferral, Mark IV or its successor, as the case may be shall, within fifteen
(15) days following the end of the calendar month in which any portion of the
Participant's Compensation is to be allocated to his Compensation Deferral
Account contribute to the Trust Fund an amount equal to the Compensation
Deferrals made for such calendar month.
3.16 Valuation of Trust Fund. In the event a Trust Fund is established
pursuant to Section 5.01 hereof, as of each Valuation Date, the Trustee shall
determine the net worth of the assets of the Trust Fund and report such value
to the Committee in writing. In determining such net worth, the Trustee shall
value the assets of the Trust Fund at their fair market value as of such
Valuation Date and shall deduct all fees and expenses chargeable to the Trust
Fund. Such valuation shall not include the portion of any Compensation
Deferral for such Plan Year which is attributable to the Participant's
election to defer receipt of his bonus or other incentive compensation nor
shall such valuation include any contribution to be made by Mark IV or its
successor to reflect the Annual Deferred Compensation Commitment for the Plan
Year ending on such Valuation Date. The Committee shall then adjust the net
credit balance in the Accounts of all Participants upward or downward, pro
rata, so that the total of such net credit balances will equal such net worth
of the Trust Fund as of such Valuation Date. Finally, the Committee shall add
to the Account of each Participant, the portion of the contribution, if any,
to be made by Mark IV or its successor to reflect the Annual Deferred
Compensation Commitment for the Plan Year ending on such Valuation Date to
which the Participant is entitled pursuant to Section 3.04 hereof and the
amount, if any, of the Participant's Compensation Deferral.
3.17 Statement of Account. As soon as practicable following Mark IV's
establishment of the Annual Deferred Compensation Commitment for a Plan Year,
the Committee shall deliver to each Participant a statement of the Dollar
Value and, if applicable, the Share Value of his Account including a statement
of: (a) the amount of the Annual Deferred Compensation Commitment to be
allocated to his Annual Allocation Account for such Plan Year; (b) the amount
of the portion of the Participant's Compensation Deferral which is
attributable to the Participant's deferral of salary or wages and which has
been allocated to the Participant's Compensation Deferral Account for the Plan
Year (c) the amount of the Participant's Compensation Deferral which is
attributable to the Participant's deferral of his bonus or other incentive
compensation and which is to be allocated to the Participant's Compensation
Deferral Account as soon as practicable following the end of such Plan Year;
(d) the number of shares of Phantom Stock, if any, to be allocated to his
Annual Allocation Account and, if applicable, his Compensation Deferral
Account for such Plan Year; (e) the Dollar Value of the Participant's Account
(including the Dollar Value of the vested and non-vested portions of the
Participant's Account) together with a statement of the interest to be
allocated to such Participant's Account for such Plan Year and the manner in
which such interest is to be allocated among the respective sub-accounts
established by the Committee for the Participant in connection with its
administration of the Plan; and, (f) the Share Value, if any, of the
Participant's Account (including the Share Value of the vested and non-vested
portions of the Participant's Account).
SECTION 4.
Distributions
4.01 Retirement. Every Participant shall retire for purposes of this
Plan upon his termination of employment on his normal retirement date or his
deferred retirement date, as such dates are defined below, and shall continue
to participate until his actual retirement. Notwithstanding anything to the
contrary contained in Section 4.04 hereof, upon a Participant's retirement,
the Dollar Value and, if applicable, the Share Value of his Account shall
become fully and nonforfeitably vested and his participation hereunder shall
cease.
As soon as practicable following a Participant's retirement, the
Committee shall direct Mark IV to distribute to the Participant in one lump
sum payment in cash or by check drawn on an account containing sufficient
funds, an amount equal to the Dollar Value of the Participant's Account as
determined pursuant to Section 3.10 hereof, together with an amount equal to
any additional allocation to which the Participant may be entitled pursuant to
Section 3.12 hereof.
If a Trust Fund has been established pursuant to Section 5.01 hereof,
following a Participant's retirement, the Committee shall direct the Trustee
to distribute to the Participant in one lump sum payment in cash or by check
drawn on an account containing sufficient funds, the value of such
Participant's Account within the Trust Fund, determined as of the preceding
Valuation Date. In addition, if a Trust Fund has been established pursuant to
Section 5.01 hereof, following a Participant's retirement, the Committee shall
direct Mark IV or its successor to distribute to the Participant in one lump
sum payment in cash or by check drawn on an account containing sufficient
funds, the amount of any additional allocation to which the Participant may be
entitled pursuant to Section 3.12 hereof. The payments required to be made to
a Participant pursuant to this paragraph shall be delivered to the Participant
no later than sixty (60) days following the date the Participant retires from
employment with the Employer.
For purposes of this Plan:
(a) Normal Retirement Date means the first day of the first calendar
month next following such Participant's fifty-fifth (55th) birthday; and
(b) Deferred Retirement Date means the first day of the month after
such Participant actually leaves the service of the Employer, provided it is
subsequent to his Normal Retirement Date.
4.02 (a) Death Notwithstanding anything to the contrary contained in
Section 4.04 hereof, upon the death of a Participant before retirement or
other termination of employment, the Dollar Value and, if applicable, the
Share Value of his Account shall become fully and nonforfeitably vested. As
soon as practicable thereafter, the Committee shall direct Mark IV to
distribute to any surviving Beneficiary designated by the Participant, or, if
none, to the Participant's surviving spouse, or if neither to the
Participant's estate, in one lump sum payment in cash or by check drawn on an
account containing sufficient funds, an amount equal to the Dollar Value of
the deceased Participant's Account as determined pursuant to Section 3.10
hereof, together with an amount equal to any additional allocation to which
the deceased Participant may be entitled pursuant to Section 3.12 hereof.
If a Trust Fund has been established pursuant to Section 5.01 hereof,
following a Participant's death, the Committee shall direct the Trustee to
distribute to any surviving Beneficiary designated by the Participant, or, if
none, to the Participant's surviving spouse, or, if neither, to the
Participant's estate, in one lump sum payment in cash or by check drawn on an
account containing sufficient funds, the value of such Participant's Account
within the Trust Fund determined as of the preceding Valuation Date. In
addition, if a Trust Fund has been established pursuant to Section 5.01
hereof, following the Participant's death, the Committee shall direct Mark IV
or its successor to distribute to any surviving Beneficiary designated by the
Participant or, if none, to the Participant's surviving spouse, or, if
neither, to the Participant's estate, in one lump sum payment in cash or by
check drawn on an account containing sufficient funds, an amount equal to any
additional allocation to which the Participant may be entitled pursuant to
Section 3.12 hereof. The payments required to be made pursuant to this
paragraph shall be delivered to the Participant's Beneficiary, or if none to
the Participant's surviving spouse, or if neither to the Participant's estate
no later than 60 days following the Participant's death.
(b) Proof of Death The Committee may require such proper proof of
death and such evidence of the right of any person to receive payment of a
deceased Participant's Account as the Committee may deem desirable. The
Committee's determination shall be conclusive.
(c) Designation of Beneficiary Each Eligible Employee, upon
becoming a Participant, may designate a Beneficiary of his own choosing and
may, in addition, name a contingent Beneficiary. Such designation shall be
made in a form satisfactory to the Committee. Any Participant may at any time
revoke or change his Beneficiary designation by filing written notice with the
Committee.
4.03 (a) Disability. Notwithstanding anything to the contrary
contained in Section 4.04 hereof in the event of a Participant's Total and
Permanent Disability before retirement or other termination of employment, the
Dollar Value and, if applicable, the Share Value of his Account shall become
fully and nonforfeitably vested. As soon as practicable following the date it
is determined that a Participant suffers from a total and permanent
disability, the Committee shall direct Mark IV, to distribute and pay to the
Participant in one lump sum payment in cash or by check drawn on an account
containing sufficient funds, an amount equal to the Dollar Value of the
Participant's Account as determined pursuant to Section 3.10 hereof, together
with an amount equal to any additional allocation to which the Participant may
be entitled pursuant to Section 3.12 hereof.
If a Trust Fund has been established pursuant to Section 5.01, after
it is determined that the Participant suffers from a Total and Permanent
Disability, the Committee shall direct the Trustee to distribute and pay to
the Participant in one lump sum payment in cash or by check drawn on an
account containing sufficient funds, an amount equal to the value of such
Participant's Account within the Trust Fund determined as of the preceding
Valuation Date. In addition, if a Trust Fund has been established pursuant to
Section 5.01 hereof, after it is determined that the Participant suffers from
a total and permanent disability, the Committee shall direct Mark IV or its
successors to distribute to the Participant in one lump sum payment in cash or
by check drawn on an account containing sufficient funds, an amount equal to
any additional allocations to which the Participant may be entitled pursuant
to Section 3.12 hereof. The payments required to be made pursuant to this
paragraph shall be delivered to the Participant no later than 60 days
following the date it is determined that the Participant suffers from a Total
and Permanent Disability.
(b) Total and Permanent Disability. For purposes of this Plan,
Total and Permanent Disability shall mean a presumably permanent physical or
mental condition of a Participant resulting from a bodily injury or disease or
mental disorder which renders him incapable of continuing in the employment of
the Employer or any Affiliate.
(c) Determination of Total and Permanent Disability. The total and
permanent disability of any Participant shall be determined by a licensed
physician in accordance with uniform principles consistently applied, upon the
basis of independent medically determined evidence.
4.04 Vesting. Each Participant in the employ of the Employer on December
1, 1991 shall at all times have a 100% vested interest in the entire Dollar
Value and the entire Share Value, if any, of his Account including the Dollar
Value and Share Value, if any, of his Account determined as of December 1,
1991, and the Dollar Value and Share Value, if any, of his Account
attributable to amounts credited to each of his Annual Allocation Accounts
under the terms of this Plan with respect to any additional allocations made
to each of the Participant's Annual Allocation Accounts after December 1,
1991. Each Participant shall at all times have a 100% vested interest in the
Dollar Value and the Share Value, if any, of his Account attributable to
amounts credited to his Compensation Deferral Account under the terms of this
Plan.
The vested interest in an Annual Allocation Account of a Participant that
first performs an Hour of Service for the Employer at any time on or after
December 2, 1991 shall be determined on the basis of the number of the
Participant's whole Years of Service occurring after the Plan Year for which
an Annual Deferred Compensation Commitment is allocated to such Participants's
Annual Allocation Account. Such vested interest shall be determined in
accordance with the following schedule:
Completed Years of
Service After Allocation
of Annual Deferred Percent
Compensation Commitment Vested
Less than 1 20%
1 but less than 2 40%
2 but less than 3 60%
3 but less than 4 80%
4 or more 100%
A Participant's vested interest in any of his Annual Allocation Accounts
for any Plan Year can be determined at any point in time by using the above
schedule. Notwithstanding the above schedule, a Participant shall become
fully and nonforfeitably vested in the entire Dollar Value and, the entire
Share Value, if any, of his Account upon the occurrence of a Change in Control
as defined in Section 5.03 hereof, including any Dollar Value or Share Value
attributable to amounts credited to the Participant's Account following the
Change in Control.
For purposes of this Section 4.04, Years of Service shall be determined
on the basis of the Vesting Computation Period. All Years of Service of an
Eligible Employee with the Employer and any Affiliate shall be taken into
account. However, in determining a Participant's vested interest in any of
his Annual Allocation Accounts subsequent to the rehiring of a terminated
Eligible Employee who has incurred a Break in Service, Years of Service
completed by a Participant prior to such Break in Service shall not be counted
under the following circumstances:
(a) If the Eligible Employee fails to complete a Year of Service
after his rehiring; or
(b) If the Eligible Employee incurred five (5) consecutive Breaks in
Service and had no vested interest in the value of his Account at the time of
his termination of employment.
4.05 Distribution of Compensation Deferrals. A Participant shall be
entitled to receive payment of all or any portion of the amount of his
Compensation Deferral for a Plan Year at the time or times specified in the
Deferred Compensation Election Form executed by the Participant with respect
to such Plan Year notwithstanding the fact that the Participant is actively
employed by the Employer at the time such payment is to be made to the
Participant. As soon as practicable following the date specified by the
Participant in his Deferred Compensation Election Form (and, in no event later
than ten (10) days following such date), the Committee shall distribute and
pay to the Participant in one (1) lump sum payment in cash or by check drawn
on an account containing sufficient funds, the percentage, specified in the
Participant's Deferred Compensation Election Form, of the Dollar Value or the
Share Value, whichever is greater, of the Participant's Compensation Deferral
made in connection with such Deferred Compensation Election Form. If a
Participant's Deferred Compensation Election Form provides for the partial
payment to a Participant of the Participant's Compensation Deferral, the
Dollar Value and the Share Value of the Participant's Compensation Deferral
Account shall be reduced in an amount equal to the percentage of the
Compensation Deferral that is to be paid to the Participant.
If a Trust Fund has been established pursuant to Section 5.01 hereof, at
the time a Participant is entitled to payment of all or any portion of his
Compensation Deferral for a Plan Year as provided for the Deferred
Compensation Election Form executed by the Participant for such Plan Year, the
Committee shall direct the Trustee to distribute to the Participant in one (1)
lump sum payment in cash or by check drawn on an account containing sufficient
funds, the portion of the Participant's Account which is attributable to the
portion of the Compensation Deferral which the Participant is entitled to
receive payment of together with any earnings (or less any losses) of the
Trust Fund attributable to such amount.
4.06 Termination of Employment and Distribution of Vested Benefits.
Upon a Participant's voluntary or involuntary termination of employment with
the Employer and any Affiliate with a vested interest in his Account other
than by reason of retirement, death or disability, the Dollar Value, as
determined pursuant to Section 3.10 hereof, of the vested portion of such
Participant's Account shall be distributed to, or in the case of the
Participant's death, on behalf of, the Participant within sixty (60) days
following the date the Participant's employment with the Employer is
terminated. As soon as practicable after such former Participant is entitled
to distribution as provided in the preceding sentence, the Committee shall
direct Mark IV to distribute the Dollar Value of the vested portion of the
Participant's Account as determined pursuant to Section 3.10 hereof together
with any earnings thereon to such former Participant or his Beneficiary in one
lump sum payment in cash or by check drawn on an account containing sufficient
funds. If a Trust Fund has been established pursuant to Section 5.01 hereof,
following the date a former Participant is entitled to a distribution as
provided in this Section 4.06, the Committee shall direct the Trustee to
distribute to or on behalf of the Participant in one lump sum payment in cash
or by check drawn on an account containing sufficient funds, an amount equal
to the value of the vested portion of the Participant's Account within the
Trust Fund. Payments required to be made from the Trust Fund to or on behalf
of a former Participant as provided in this paragraph shall be made no later
than sixty (60) days following the date the Participant's employment with the
Employer is terminated. During the period between the date a Participant's
employment with the Employer is terminated and the date the Participant's
Account is to be distributed, the Participant's Account shall be credited with
interest as provided in Section 3.10 or, if a Trust Fund has been established
pursuant to Section 5.01, the Participant's Account shall be credited or
charged with its proportionate share of the earnings or losses of the Trust
Fund.
At the time a former Participant is entitled to distribution, according
to its records, the Committee shall send, by registered or certified mail
directed to his address last known to the Committee, a notice informing him as
to his rights with respect to any amounts held for him and requesting
confirmation of his address and age. Each Participant and former Participant
has the obligation to keep the Committee informed of his address. In the
event the Committee is unable to locate such former Participant within four
(4) years, the amount held for his benefit shall be forfeited; provided,
however, if a claim is made by the Participant or his Beneficiary for the
forfeited amount, such amount shall be reinstated into his Account.
4.07 Forfeitures. If a Participant terminates his employment with the
Employer before he has acquired a 100% vested interest in any portion of any
of his Annual Allocation Accounts, the portion of each of such Annual
Allocation accounts which is not vested, shall be forfeited as of the end of
the first Plan Year in which the Participant incurs a Break in Service and, as
of the end of the first Plan Year in which the Participant incurs a Break in
Service, an amount equal to the greater of the Dollar Value or the Share Value
of the portion of each of such Annual Allocation Accounts which is not vested
shall be reallocated among the Accounts of the remaining Participants in
accordance with Section 3.11 hereof. For purposes of determining the amount
to be reallocated among the Accounts of the remaining Participants, if any
portion of an Account which is to be forfeited pursuant to this Section 4.07
was allocated to the purchase of Phantom Stock, the price per share of such
Phantom Stock shall equal the average of the closing prices per share of
common stock of Mark IV during the month of February for the Plan Year in
which such Account is to be forfeited as determined from the closing prices
per share of common stock of Mark IV reported by the New York Stock Exchange
Composite Index for such month.
If a Participant's employment with his Employer is terminated before he
acquires a one hundred percent (100%) vested interest in each of his Annual
Allocation Accounts and, at the time of such Participant's termination of
employment, a Trust Fund had been established pursuant to Section 5.01 hereof,
the value within the Trust Fund of the portion of each of such Participant's
Annual Allocation Accounts which is not 100% vested shall be maintained in a
suspense account within the Trust Fund until the end of the first Plan Year in
which the Participant incurs a Break in Service, at which time, the amount of
such suspense account shall be forfeited and reallocated among the accounts of
the remaining Participants in accordance with Section 3.11. Such suspense
account shall be for accounting purposes only, shall not require a segregation
of assets within the Trust Fund to such Account and shall not share in the
gains, losses, income or expenses of the Trust Fund. The amount of the assets
necessary to maintain the suspense account shall be deemed an expense
chargeable to the Trust Fund. The Committee shall maintain records so that
each former Participant's share of the suspense account is clearly
identifiable.
If the terminated Participant returns to the employ of the Employer or
any Affiliate before he has incurred five (5) consecutive one year Breaks in
Service, the balance in his Account upon reparticipation in the Plan shall be
equal to the greater of the vested portion of the Dollar Value and, if
applicable, the Share Value of his Account as of the end of the first Plan
Year in which he incurs a Break in Service. The amount previously forfeited
by the Participant shall not be restored to such Participant's Account.
4.08 Certain Additional Payments by Mark IV. In the event that a "Change
in Control" as defined in Section 5.03 occurs and, thereafter, it shall be
determined that any payment or distribution by Mark IV to or for the benefit
of any Participant under this Plan, whether paid or payable or distributed or
distributable pursuant to this Plan would be subject to any income, excise or
other tax under the Internal Revenue Code of 1986, as amended, or any interest
or penalties with respect to such income, excise or other tax (the aggregate
amount of any such income, excise or other taxes together with any interest or
penalties relating to such income, excise and other taxes being hereinafter
collectively referred to as the "Taxes") then such Participant shall be
entitled to payment by Mark IV or its successor of an additional payment (the
"Gross Up Payment") in an amount such that the net amount distributed to or on
behalf of the Participant, after payment by such Participant or his
Beneficiary of all Taxes (including any Taxes imposed on the Gross-Up Payment)
equals the value of the Participant's Account which is paid and distributed to
the Participant under the terms of this Plan. The determination of the amount
of the Gross-Up Payment shall be made by Mark IV within thirty (30) days
following the date a Participant becomes entitled to payment under the
provisions of this Plan, or, if earlier, within thirty (30) days following
written notice from a Participant that the Internal Revenue Service has made a
claim that amounts paid or payable, or distributed or distributable under this
Plan are subject to income, excise or other taxes; provided that the
Participant gives written notice to the Committee of such Internal Revenue
Service claim at least ten (10) days following receipt of the same. The
determination of the amount of the Gross-Up Payment to be made by Mark IV
shall be based on:
(a) the applicable marginal rate of Federal income taxation which
would be in effect with respect to the calendar year in which the Gross-Up
Payment is to be made for a total Compensation equal to the sum of: (i) amount
of the payment to be made under this Plan which is subject to Taxes and (ii)
the amount of the Gross-Up Payment; and
(b) any applicable state and local taxes at the applicable marginal
rate of such taxes with respect to the calendar year in which the Gross-Up
Payment is to be made based upon a total Compensation equal to the sum of: (i)
the amount of the payment to be made under this Plan which is subject to Taxes
and (ii) the amount of the Gross-Up Payment.
4.09 Effects of Vesting. Each Participant, upon (a) acquiring a vested
interest in his Account pursuant to the terms of this Plan; and (b) otherwise
satisfying the requirements for payment and distribution of his Account
pursuant to the terms of this Plan, shall have a valid and enforceable claim
against Mark IV for payment of the amount described in the applicable
provisions of this Plan together with the amount of any applicable Gross-Up
Payment. Notwithstanding the foregoing, no Participant, spouse or Beneficiary
shall have any interest in any particular assets of Mark IV by reason of the
right to receive deferred compensation under this Plan and any such
Participant, spouse or Beneficiary shall have only the rights of a general
unsecured creditor of Mark IV with respect to any deferred compensation
payable under this Plan.
4.10 No Duplication of Benefits. It is the intent of Mark IV and
each Employer that the deferred compensation to be provided under this Plan
shall, with respect to the employment of an Eligible Employee by the Employer
during the periods this Plan is in effect, supersede any other deferred
compensation (a) to which an Eligible Employee is entitled under the terms of
any written employment agreement between any Employer and such Eligible
Employee, covering periods of such Eligible Employee's employment with the
Employer during the periods with respect to which this Plan is in effect; and
(b) provided for under any such written employment agreement, but only to the
extent that the deferred compensation provided under such written employment
agreement is based upon the amounts which could have been accrued by such
Eligible Employee under the Profit Sharing Adoption Agreement as in effect for
periods beginning on and after March 1, 1989 or under the Pension Plan
Adoption Agreement as in effect for periods beginning on and after March 1,
1989 and without giving effect to any limitations of the Internal Revenue Code
or ERISA relating to (i) any restrictions contained in the Mark IV Retirement
Savings Plan or the Mark IV Industries, Inc. and Subsidiaries Master Defined
Contribution Pension Plan (collectively the "Qualified Plans") on the use of
employer contributions for any employee who is among the group of the twenty-
five most highly paid employees; (ii) any restrictions in the Qualified Plans
upon the maximum benefits payable pursuant to the Internal Revenue Code; (iii)
any limitations on the amount of compensation which may be taken into account
with respect to an employee under the Qualified Plans pursuant to Section
401(a)(17) of the Internal Revenue Code; (iv) any limitations on the amount of
the annual benefit which may be accrued by an employee under the Qualified
Plans pursuant to Section 415 of the Internal Revenue Code or (v) any other
direct or indirect restriction of the benefits which may be payable to an
employee under the Qualified Plans under the Internal Revenue Code or ERISA.
Accordingly, notwithstanding anything to the contrary under this Plan, to the
extent the amounts payable to a Participant under this Plan are otherwise
payable to a Participant under the terms of a written employment agreement
between a Participant and any Employer, the deferred compensation payable to
such Participant under the terms of this Plan shall be reduced to reflect
deferred compensation payable to the Participant under the terms of a written
employment agreement which are attributable to amounts which could have been
accrued under the Qualified Plans had none of the limitations described in the
preceding sentence been in effect.
SECTION 5.
Trust Established Upon Change in Control
5.01 Establishment of Trust. Upon the occurrence of a Change in Control
(as hereinafter defined), Mark IV or its successors shall establish a Trust
Fund for the purpose of holding and investing assets of Mark IV to be used for
payment of the deferred compensation to be provided to Participants under this
Plan. The terms and conditions of the agreement containing the terms of the
Trust Fund shall be consistent with the terms and conditions required by
rulings and regulations of the Internal Revenue Service for a trust to be
classified as a "Rabbi Trust" within the scope of Internal Revenue Service
Private Letter Ruling No. 8113017 and Internal Revenue Service Private Letter
Ruling No. 8907034 such that the amounts payable under this Plan will not be
immediately taxable to the Participants to whom such amounts are payable under
the terms of this Plan by virtue of the establishment of such Trust Fund and
contribution of assets thereto or by virtue of the acquisition by any such
Participants of a vested interest in the deferred compensation payable
hereunder.
5.02 Contributions to Trust. Promptly upon the occurrence of a Change in
Control (as hereinafter defined), but in any event not later than sixty (60)
days following the occurrence of the Change in Control, Mark IV or its
successor shall determine for each Participant, the Dollar Value and the Share
Value of the Participant's Account as of the date the change in Control
occurs. Thereafter, Mark IV or its successor shall pay to the Trustee, to be
held pursuant to the Trust Fund, cash or immediately available funds, an
amount for each Participant which is equal to the greater of the Dollar Value
and the Share Value of the Participant's Account determined as of the date the
Change in Control occurs.
5.03 Change in Control. For purposes of this Plan, a Change in Control
shall occur if (i) any "person" or "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Act")) becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Act) of more than twenty percent (20%) of the then outstanding voting stock of
Mark IV, otherwise than through a transaction arranged by, or consummated with
the prior approval of its Board of Directors, or (ii) during any period of two
(2) consecutive years, individuals who at the beginning of such period
constitute the Board of Directors (and any new director whose election to the
Board of Directors or whose nomination for election by Mark IV's shareholders
was approved by a vote of at least two thirds (2/3) of the directors then
still in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved)
(hereinafter referred to as the "Continuing Directors") cease for any reason
to constitute a majority thereof; or (iii) the shareholders of Mark IV approve
a merger or consolidation of Mark IV with any other corporation, other than a
merger or consolidation which would result in the voting securities of Mark IV
immediately prior thereto continuing to represent (either by remaining
outstanding or being converted into voting securities of the surviving entity)
at least eighty percent (80%) of the combined voting power of the voting
securities of Mark IV or such surviving entity outstanding immediately after
such merger or consolidation (provided, however, that if prior to the merger
or consolidation, the Board of Directors adopts a resolution that is approved
by a majority of the Continuing Directors providing that such merger or
consolidation shall not constitute a "change in control" for purposes of the
Plan, then such a merger or consolidation shall not constitute a "change in
control"), or (iv) the shareholders of Mark IV approve an agreement for the
sale or disposition by Mark IV or all or substantially all the assets of Mark
IV. Notwithstanding the provisions of Sections 7.01 and 7.02 hereof, the
foregoing provisions of Sections 5.01, 5.02 and 5.03 hereof may not be amended
within three (3) years following a "change in control" without the written
consent of a majority in both number and interest of the Participants who are
actively employed by the Employer, both immediately prior to the "change in
control" and at the date of such amendment.
5.04 Investment Policy. In determining its investments hereunder, the
Trustee or any duly appointed Investment Manager shall consider the short and
long range needs of the Plan communicated to them by the Committee. Benefits
may be provided through any combination of investment media designated to
provide the requisite liquidity, growth and security appropriate to this Plan.
5.05 Trustee Responsibilities. Following the establishment of a Trust
pursuant to Section 5.01 hereof, the Trustee appointed to administer the Trust
Fund shall be deemed a Fiduciary and shall discharge his duties for the
exclusive benefit of Participants in the Plan.
SECTION 6.
Administration
6.01 The Committee. The Board of Directors of Mark IV shall appoint an
administrative committee to administer the Plan as the plan administrator.
The Committee shall be the named fiduciary of the Plan with respect to Plan
administration and, if a Trust Fund is established pursuant to Section 5.01
hereof, the Committee shall be a named fiduciary with respect to the
appointment of an Investment Manager to manage any assets of the Plan. The
Committee shall consist of officers or other employees of the Employer, or any
other individuals, who shall serve at the pleasure of the Board of Directors
of Mark IV. Any member may resign by delivering his written resignation to
the Board of Directors. Vacancies arising by resignation, death, removal or
otherwise shall be filled by the Board of Directors of Mark IV. If at any
time no members are currently serving as the Committee, or if no Committee is
appointed, the Board of Directors of Mark IV shall be deemed to be the
Committee.
6.02 General Duties and Responsibilities. The Committee shall administer
the Plan in accordance with its terms and shall have all powers necessary to
carry out the provisions of the Plan. Any interpretation, construction or
determination made in good faith shall be final and conclusive. The Committee
may correct any defect, supply any omission, or reconcile any inconsistency in
such manner and to such extent as shall be deemed necessary or advisable to
carry out the purpose of this Plan. The Committee as named fiduciary may
employ attorneys, accountants and such other advisors to advise it with
respect to its duties and obligations as it deems appropriate.
6.03 Funding Policy. In the event a Trust Fund is established pursuant
to Section 5.01 hereof, the Committee shall establish a funding policy and
method consistent with the requirements of law and designed to protect the
interests of Plan Participants. The Committee shall thereafter review, and if
necessary, change such funding policy and method.
6.04 Allocation and Delegation of Responsibilities. As the named
fiduciary, the Committee may engage agents to assist it in carrying out its
functions hereunder. The Committee members are expressly authorized to
allocate among themselves and/or delegate to other named persons or parties,
fiduciary responsibilities, other than Trustee responsibilities. In the event
a Trust Fund is established pursuant to Section 5.01 hereof, the Committee may
appoint an Investment Manager and delegate to him the authority to manage,
acquire, invest or dispose of all or any part of the Trust Fund assets. With
regard to the assets entrusted to his care, the Investment Manager shall
provide written instructions and directions to the Trustee, who shall in turn,
be entitled to rely thereon. Appointments and delegations shall be evidenced
by a signed written document, which must be retained with the other Plan
documents.
6.05 Bonding. The Committee shall be responsible for procuring bonding
for any persons dealing with the Plan or its assets as may be required by law
or by this Plan.
6.06 Records, Reporting and Disclosure. The Committee shall maintain all
the records necessary for the administration of the Plan. The Committee shall
also be responsible for preparing and filing such annual reports and tax forms
as may be required by law. The Committee shall furnish and/or make available
for inspection by each Participant covered under the Plan and to each
Beneficiary who is entitled to receive benefits under the Plan, such
information and reports as may be required by law.
6.07 Expenses and Compensation. The expenses necessary to administer the
Plan shall be borne by Mark IV and, if necessary, shall be reimbursed to the
Plan. In the event a Trust Fund is established pursuant to Section 5.01
hereof, upon the failure of Mark IV to pay said expenses, the Trustee shall
pay said expenses out of the Plan assets. Expenses include, but are not
limited to, those involved in retaining necessary professional assistance from
an attorney, an accountant, an actuary, or an investment advisor. The
Employer shall furnish the Committee with such clerical and other assistance
as is necessary in the performance of its duties. The Committee, with the
approval of the Employer, may receive reasonable compensation for services
rendered in administering this Plan, provided the member performing the
services is not a full-time employee of any Employer maintaining this Plan.
6.08 Information from Employer. To enable the Committee to perform its
functions, the Employer shall supply full and timely information to the
Committee on all matters relating to the Compensation of all Participants,
their employment, their retirement, death, disability or termination of
employment, and such other pertinent facts as the Committee may require. The
Committee shall advise the Trustee of such of the foregoing facts as may be
pertinent to the Trustee's duties under the Plan. The Committee is entitled
to rely on such information as is supplied by the Employer and shall have no
duty or responsibility to verify such information.
6.09 Multiple Signatures. In the event that more than one person has
been duly nominated to serve on the Committee, one signature may be relied
upon by any interested party as conclusive evidence that the Committee has
duly authorized the action therein set forth and as representing the will of
and binding upon the whole Committee. No person receiving such documents or
written instructions and acting in good faith and in reliance thereon shall be
obliged to ascertain the validity of such action under the terms of this Plan
and Trust. The Committee shall act by a majority of its members at the time
in office and such action may be taken either by a vote at a meeting or in
writing without a meeting.
6.10 General Fiduciary Liability. The Employer, its Board of Directors,
the Committee, the Trustee and any Fiduciary with respect to this Plan and, if
applicable, the Trust Fund created pursuant hereto shall not be liable for any
actions taken or omitted by any of them except for such acts involving gross
negligence or willful misconduct of the party to be charged and except as
required by ERISA. Nothing contained in this Section 6.10 shall be deemed to
release, discharge or otherwise limit the liability of Mark IV, or, if a Trust
Fund is established pursuant to Section 5.01 hereof, the liability of the
Trust Fund and any successor in interest to Mark IV for payment to
Participants of the amounts described in this Plan.
6.11 Liability Insurance. The Committee may purchase, as an authorized
expense of the Plan, liability insurance for the Plan and/or for its
Fiduciaries to cover liability or losses occurring by reason of the act or
omission of a Fiduciary, providing such insurance contract permits recourse by
an Insurer against the Fiduciary in the case of breach of fiduciary obligation
by such Fiduciary. Any Fiduciary may purchase on behalf of himself, insurance
to protect himself in the event of a breach of fiduciary duty and the Employer
may also purchase insurance to cover the potential liability of one or more
persons who serve in a fiduciary capacity with regard to this Plan.
6.12 Benefit Claims Procedures. The Committee shall establish a benefit
claims procedure. Such procedure shall provide for the filing of claims for
benefits, adequate notice in writing to any Participant or Beneficiary whose
claim for benefits has been denied, setting forth the specific reasons for
such denial and written in a manner calculated to be understood by the
Participant, and afford a reasonable opportunity to any Participant whose
claim for benefits has been denied for a full and fair review by the Committee
of the decision denying the claim.
SECTION 7.
Amendment, Termination and Merger
7.01 Amendment. The Board of Directors of Mark IV shall have the right
at any time and from time to time without the consent of any Participant or
Beneficiary to amend, in whole or in part, any or all of the provisions of
this Plan. No amendment to the Plan shall be effective to the extent that it
has the effect of decreasing the value of a Participant's Account or depriving
any Participant or the Beneficiary of any Participant of any amount payable
(whether immediately or in the future) to such Participant or Beneficiary
under the terms of this Plan as in effect on the date of such amendment.
7.02 Termination. Mark IV, by action of its Board of Directors shall
have the right at any time to discontinue its contributions hereunder and to
terminate this Plan. Upon complete termination of the Plan or upon the
occurrence of any event which constitutes a partial termination pursuant to
IRC Section 411(d)(3), whether by action of the Board of Directors or
otherwise, all Participants shall become fully and nonforfeitably vested in
the value of their respective Accounts; provided, however, in the case of a
partial termination, full vesting shall only be applicable to that part of the
Plan and the Participants covered thereunder that is terminated.
7.03 Continuation of Plan by Successor. Mark IV will require any person,
firm, corporation or other entity that becomes a successor to Mark IV,
(whether direct or indirect, by purchase of stock or assets, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of Mark IV to expressly assume and agree to perform the provisions of
this Plan as in effect at the time any such person, firm, corporation or other
entity becomes a successor to Mark IV, in the same manner and to the same
extent that Mark IV would be required to perform it if no such succession had
taken place. Unless this Plan be sooner terminated, a successor to the
business of Mark IV by whatever form or manner resulting, may continue this
Plan after such person, firm, corporation or entity becomes a successor to
Mark IV by executing an appropriate supplemental agreement. In the event any
successor to the business of Mark IV shall not elect to continue this Plan
within the ninety days after such person, firm, corporation or other entity
becomes a successor to Mark IV, this Plan shall be deemed to be terminated and
the obligation to pay to each Participant the amounts described herein at the
times provided for herein shall become fixed and binding obligations of such
successor.
SECTION 8.
Miscellaneous
8.01 No Rights Created by Plan and Trust - Terms of Employment Not
Affected. Neither the establishment of the Plan or Trust nor any modification
hereof, nor the creation of any fund or account, nor the payment of any
benefits, shall be construed as giving to any Participant, Beneficiary or
other person any legal or equitable right against the Employer or any officer
or Employee thereof, or the Trustee, or the Committee, except as herein
provided. Under no circumstances shall participation in this Plan by an
Employee constitute a contract of continuing employment or in any manner
obligate the Employer to continue the services of an Employee.
8.02 Participants Rights Unsecured. Unless the establishment of a Trust
Fund is required pursuant to Section 5.01 hereof, the Plan shall at all times
be entirely unfunded and no provision shall at any time be made with respect
to segregating any assets of Mark IV for payment of any distributions
hereunder. The rights of a Participant or his Beneficiary to receive a
distribution hereunder shall be an unsecured claim against the general assets
of Mark IV and neither the Participant nor his Beneficiary shall have any
rights in or against any specific assets of Mark IV including, but not limited
to, any assets contained in any Trust Fund established pursuant to Section
5.01 hereof.
8.03 No Guaranty of Benefits. Nothing contained in this Plan shall be
deemed to constitute a guaranty by Mark IV or any other entity or person that
the assets of Mark IV will be sufficient to pay the benefits hereunder.
8.04 Execution of Receipts and Releases. Any payment to any Participant,
or to his legal representatives or Beneficiary, in accordance with the
provisions of this Plan, shall to the extent thereof be in full satisfaction
of all claims hereunder against the Plan, and the Committee may require such
Participant, legal representative, or Beneficiary, as a condition precedent to
such payment, to execute a receipt and release therefor in such form as it
shall determine.
8.05 Benefits Non-Assignable. No benefit which shall be payable to any
person under this Plan, (including a Participant or his Beneficiary), whether
payable out of the general assets of Mark IV or payable out of the Trust Fund,
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge the same shall be
void and no such benefit shall in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements or torts or any such person, nor
shall it be subject to attachment or legal process for or against such person,
and the same shall not be recognized by the Committee or the Trustee, except
to such extent as may be required by law.
8.06 Construed Under Applicable Federal Law and New York Law. This Plan
shall be construed according to applicable Federal
Law and the laws of the State of New York and all provisions hereof shall be
administered according to such laws.
8.07 Masculine Gender to Include Feminine; Singular to Include Plural.
Wherever any words are used herein in the masculine gender they shall be
construed as though they were also used in the feminine gender in all cases
where they would so apply, and wherever any words are used herein in the
singular form, they shall be construed as though they were also used in the
plural form in all cases where they would so apply.
8.08 Heading No Part of Plan. Heading of sections and subsections of
this instrument are inserted for convenience of reference only. They
constitute no part of this Plan are not to be construed in the construction
hereof.
8.09 Counterparts. This instrument may be executed in several
counterparts, each of which shall be deemed an original, and said counterparts
shall constitute but one and the same instrument and may be sufficiently
evidenced by any one counterpart.
IN WITNESS WHEREOF, the Mark IV Industries, Inc. has caused this Plan
to be executed as of the 30th day of November, 1993.
MARK IV INDUSTRIES, INC.
BY: Richard L. Grenolds
Vice President and
Chief Accounting
Officer
Exhibit 10.9
NON-QUALIFIED PLAN OF DEFERRED COMPENSATION
FOR NON-EMPLOYEE DIRECTORS
OF
MARK IV INDUSTRIES, INC.
________________________________
First Amendment and Restatement
_________________________________
Effective December 1, 1993
NON-QUALIFIED PLAN OF DEFERRED COMPENSATION
FOR NON-EMPLOYEE DIRECTORS
OF
MARK IV INDUSTRIES, INC.
____________________________________
First Amendment and Restatement
_____________________________________
WHEREAS, Mark IV Industries, Inc., a Delaware corporation having its
principal place of business at One Towne Centre, 501 John James Audubon
Parkway, Amherst, New York ("Mark IV") adopted a non-qualified plan of
deferred compensation known as the "Non-Qualified Plan of Deferred
Compensation for Non-Employee Directors of Mark IV Industries, Inc.
(the "Plan"); and
WHEREAS, the Plan permits the non-employee directors of Mark IV to
defer the receipt of payment of all or part of the bonus or other incentive
compensation which they may be entitled to receive under the terms of the
executive bonus arrangements in effect from time to time for the non-employee
directors of Mark IV and to further provide that the amount of the bonus or
other incentive compensation, if any, which the Participant defers shall be
credited with hypothetical earnings and paid in accordance with the terms of
the Plan; and
WHEREAS, Mark IV desires to amend the Plan to provide that, effective
December 1, 1993, non-employee directors shall be permitted to defer the
receipt of all or any part of the salary or wages they are entitled to
receive and to provide that the amount of the salary or wages deferred by such
non-employee directors if any, shall be credited with hypothetical earnings
paid in accordance with the terms of this Plan;
NOW, THEREFORE, Mark IV hereby adopts the following as the First
Amendment and Restatement of the Non-Qualified Plan of Deferred Compensation
for Non-Employee Directors of Mark IV Industries, Inc. effective as of December
1, 1993:
SECTION 1.
Definitions
1.01 Plan means this non-qualified plan of deferred compensation known as
the Non-Qualified Plan of Deferred Compensation for Non-Employee Directors of
Mark IV Industries, Inc.
1.02 Trust Fund means one or more trust funds which may be established by
Mark IV pursuant to this Plan, and all the assets at any time held by the
Trustee of such trust funds.
1.03 Trustee means the person or persons, firm or corporation designated
by the Board of Directors of Mark IV to serve as Trustee of any Trust Fund
which may be created pursuant to the provisions of this Plan, and who, by
joining in the execution of the agreement creating such Trust Fund or any
amendments thereto, signifies his acceptance of the Trust Fund and any
person or persons, firm or corporation duly appointed as successor Trustee.
1.04 Board of Directors means the Board of Directors of Mark IV.
1.05 Participant means each member of the Board of Directors that is not
an employee of Mark IV or any of its divisions or subsidiaries if such non-
employee director has elected or elects to defer the receipt of payment of all
or any portion of his Compensation (as hereinafter defined) in accordance with
the provisions of this Plan, including any bonus or other incentive
compensation to which he may be entitled.
1.06 Beneficiary means any person or persons designated, in writing,
by a Participant to share in the benefits of the Plan after his death, or if
none, his spouse, or, if neither, his estate.
1.07 Committee means the administrative committee, referred to in Section
6.01, designated by the Board of Directors of Mark IV to administer the Plan.
1.08 Effective Date means December 16, 1992.
1.10 Anniversary Date means March 1, of each year.
1.11 Valuation Date means the last day of February of each calendar year.
1.12 Plan Year means the approximately two and one-half month period
beginning December 16, 1992 and ending February 28, 1993 and, thereafter, each
12 consecutive month period beginning on March 1 of each calendar year.
1.13 Compensation means the total salary or wages paid by Mark IV to a
Participant for services rendered to Mark IV as a non-employee director of
Mark IV during the fiscal year of Mark IV, including any bonus or other
incentive compensation, whether or not such salary, wages, bonuses or other
incentive compensation is actually paid as a result of the Participant's
election to defer receipt of such Compensation. The decision of the
Committee as to what constitutes Compensation within the meaning of the
foregoing definition shall be conclusive.
1.14 Compensation Deferral means, for each Plan Year, the amount, if any,
of the salary, wages, bonuses or other incentive compensation payable to a
Participant which the Participant has elected to defer the receipt of payment of
pursuant to Section 3.01 hereof and which Mark IV has agreed and committed to
allocate and pay to such Participant in the future under the terms of this
Plan.
1.15 Applicable Interest Rate means, for each Plan Year, a variable rate
of interest, adjusted on a quarterly basis as of March 1, June 1,
September 1 and December 1 of each calendar year and equaling one hundred
twenty percent (120%) of the Federal long-term interest rate established for
such months by the Secretary of the Treasury pursuant to the provisions of
Section 1274 of the Internal Revenue Code and the regulations thereunder.
1.16 Account means the account or accounts established and maintained by
the Committee for each Participant to reflect the amount of the deferred
compensation payable to each Participant under the terms of this Plan and,
in the event a Trust Fund is established pursuant to Section 5.01 hereof,
to reflect the interest of each Participant in the Trust Fund.
1.17 Phantom Stock means the shares of common stock of Mark IV, if any,
which are hypothetically allocated to a Participant's Account pursuant to the
terms of this Plan.
1.18 Dollar Value means, except as otherwise specifically provided in
Section 3.08 hereof, an amount equal to the total dollar amount of the
Incentive Compensation Deferrals credited to the Participant's Account
together with the interest credited thereon as provided for in this Plan.
1.19 Share Value means an amount equal to (a) the number of shares of
Phantom Stock, if any, credited to a Participant's Account, multiplied by
(b) the applicable price per share of common stock of Mark IV as determined
pursuant to Section 3.05 hereof.
1.20 Fiduciary means any person with respect to the Plan to the extent:
(a) He exercises any discretionary authority or discretionary
control respecting management of the Plan or exercises any authority or
control respecting management or disposition of its assets;
(b) He renders investment advice for a fee or other compensation,
direct or indirect, with respect to any moneys or other property of the Plan
or has any authority or responsibility to do so; or
(c) He has any discretionary authority or discretionary
responsibility in the administration of the Plan.
This term also includes persons designated by the Committee to carry out
fiduciary responsibilities under the Plan. A Fiduciary may serve in more than
one fiduciary capacity (including service as both Trustee and Committee) with
respect to this Plan.
1.21 Investment Manager means that person so designated by the Committee
to manage and invest designated Plan assets, who acknowledges his acceptance
in writing and who is either (a) registered in good standing as an Investment
Adviser under the Investment Advisers Act of 1940, (b) a bank, as defined
in that Act, or (c) an insurance company qualified to perform investment
management services under the laws of more than one state.
1.22 ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and corresponding provisions of future laws, as amended.
1.23 Affiliate means any corporation under common control with the Employer
within the meaning of Internal Revenue Code Section 414(b) and any trade or
business (whether or not incorporated) under common control with the Employer
within the meaning of Internal Revenue Code Section 414(c).
1.24 Internal Revenue Code, Code and IRC each mean the Internal Revenue
Code of 1986, as amended.
SECTION 2.
Eligibility
2.01 Directors Eligible. Each member of the Board of Directors that is
not an employee of Mark IV or any of its direct or indirect wholly owned
subsidiaries shall be eligible to participate in the Plan and shall become a
Participant in the Plan by delivering the Committee a written election to
defer, in accordance with the provisions of this Plan all or part of the
salary, wages, bonus or other incentive compensation to which he is
otherwise entitled.
2.02 Participation Form. The Committee shall furnish each non-employee
Director a form containing such information as the Committee may desire,
including, but not limited to, date of birth of the Participant and the
Beneficiary designation of such Participant.
SECTION 3.
Incentive Compensation Deferrals
3.01 Compensation Deferrals. For each Plan Year beginning with the Plan
Year ending February 28, 1993, each non-employee Director of Mark IV may elect
to defer his receipt of payment of all or any part of the bonus or other
incentive compensation to which he is entitled as provided for in the
executive bonus and other incentive compensation plans for non-employee
Directors of Mark IV. If a Participant makes a Compensation Deferral with
respect to his bonus or other incentive compensation payable in connection
with the services he has provided for any Plan Year ending on or after
February 28, 1993, the amount of the bonus or other incentive compensation
which the Participant has elected to defer the receipt of shall not be paid
by Mark IV except as provided for hereunder and shall be deemed to be
contributed to the Plan as of the end of the Plan Year ending with or within
the fiscal year of Mark IV with respect to which such bonus or other
incentive compensation is payable to the Participant.
For each calendar year beginning on or after January 1, 1994, each
participant may elect to defer the receipt of payment of all or any part of
the salary or wages to which he is entitled. If a Participant makes a
Compensation Deferral with respect to all or any part of the salary or wages
to which he is entitled, the portion of the salary or wages which the
Participant has elected to defer the receipt of shall not be paid by Mark IV
except as provided for hereunder and a pro-rata portion of the salary or wages
which the Participant is entitled to for each calendar year shall be deemed to
be contributed to the Plan as of the end of each calendar month which elapses
in a calendar year in which the Participant has elected to defer the receipt
of such salary or wages.
The total amount of Compensation Deferrals made by a Participant (which
shall include the total amount of salary, wages, bonus or other incentive
compensation which the Participant has elected to defer the receipt of) for a
Plan Year, together with any earnings thereon as provided by Section 3.08
hereof, shall represent the amount which Mark IV has agreed to pay to the
Participant that makes such Compensation Deferral and, unless a Trust Fund
is established pursuant to Section 5.01 hereof, no segregation of any assets
of Mark IV for the purpose of paying such Compensation Deferral shall be
required.
A Participant that is eligible to make Compensation Deferrals may make a
Compensation Deferral by executing and delivering to the Committee, a form,
supplied by the Committee, which provides a description of the amount of the
Participant's salary or wages which the Participant elects to defer the
receipt of and a description of the portion of the bonus or other incentive
compensation which the Participant elects to defer the receipt of (a
"Deferred Compensation Election Form"). The Deferred Compensation Election
Form shall also contain a statement of the period of time over which payment
of the Participant's salary, wages, bonus or other incentive compensation is
to be deferred (which period of time may extend beyond the Participant's
Normal Retirement Date and may be different for separate and distinct
portions (identified by the Participant) of the salary, wages or bonus or
incentive compensation which the Participant has elected to defer).
The Deferred Compensation Election Form shall provide, among other things,
that the Participant's election to defer the receipt of payment of the
salary, wages, bonus or other incentive compensation payable to the
Participant is irrevocable and that the Participant waives his right to make
any claim for payment of the salary, wages, bonus or other incentive
compensation which the Participant has elected to defer except to the extent
such amount is payable pursuant to this Plan.
Notwithstanding the provisions of the preceding paragraph, a Participant's
election to defer the receipt of any portion of his salary or wages shall be
effective only for the calendar year immediately following the date the
Participant delivers his Deferred Compensation Election Form to the
Committee and a Participant's election to defer the receipt of any portion
of the bonus or other incentive compensation to which he may be entitled
shall be effective only for the bonus or other incentive compensation which
is payable as of the end of the Plan Year immediately following the date
the Participant delivers his Deferred Compensation Election Form to the
Committee. Therefore, in the event a Participant desires to defer the
receipt of any portion of the salary or wages which he is otherwise entitled
to for a calendar year following a calendar year in which payment of the
Participant's salary or wages has been deferred, the Participant must
execute and deliver a new Deferred Compensation Election Form
to the Committee on or before December 31 of the calendar year preceding the
calendar year in which the Participant desires to have the receipt of such
Compensation deferred. In addition, in the event a Participant desires to
defer the receipt of any portion of the bonus or other incentive
compensation he is entitled to for a Plan Year following the Plan Year in
which any portion of the bonus or other incentive compensation was deferred,
the Participant must execute and deliver a new Deferred Compensation
Election Form to the Committee on or before December 31 of the calendar year
preceding the calendar year in which the Participant desires to have the
receipt of such Compensation deferred.
3.02 Participant's Account. The Committee shall establish and maintain
an Account in the name of each Participant that makes a Compensation Deferral,
which Account shall be credited with the amount of the Compensation Deferral
made by the Participant pursuant to the terms of the Deferred Compensation
Election Form executed by the Participant and effective for such Plan Year,
together with interest thereon as determined pursuant to Section 3.08 hereof
and the number of shares of Phantom Stock determined pursuant to
Section 3.04 hereof.
In the event a Trust Fund is established pursuant to Section 5.01 hereof,
the Committee shall establish and maintain, within the Trust Fund, an Account
in the name of each Participant. At the time the Trust Fund is established,
the Committee shall credit the Account of a Participant with an amount equal
to the greater of the Dollar Value and, if applicable, the Share Value of the
Participant's Account at the time the Trust Fund is established and,
thereafter, the Committee shall credit such Participant's Account with the
Participant's share of the net earnings of the Trust Fund and charge such
Participant's Account with the net losses of the Trust Fund and
distributions from the Trust Fund made on the Participant's behalf.
In the event that this Plan is continued by Mark IV or its successor
following the establishment of a Trust Fund, the Committee shall credit
the Participant's Account with the amount of Incentive Compensation
Deferrals made to the Plan by the Participant together with earnings or
losses thereon.
3.03 Time of Allocation. For purposes of determining the Dollar Value of
a Participant's Account, the amount of the Compensation Deferral to be
credited to the Account of a Participant with respect to any salary or wages
deferred by the Participant in connection with such Compensation Deferral
shall be deemed to be credited to a Participant's Account as of the end of
each calendar month during which the Participant was a non-employee Director
of Mark IV and the amount of any bonus or other incentive compensation
deferred by a Participant in connection with a Compensation Deferral shall
be deemed to be credited to such Participant's Account as of the end of the
Plan Year ending with or within the fiscal year of Mark IV with respect to
which such bonus or other incentive compensation is payable. For purposes
of determining the Share Value of a Participant's Account as of the end of
any Plan Year, the number of shares of Phantom Stock to be allocated to
the Account of a Participant for a Plan Year shall be deemed to be allocated
to such Participant's Account, as of the end of such Plan Year.
3.04 Allocations of Phantom Stock. If a Participant elects to defer all
or any portion of his salary or wages as permitted by Section 3.01 hereof, as
of the end of each calendar month, the Committee shall credit such
Participant's Account with the number of shares of Phantom Stock which could
be purchased at a price per share determined pursuant to Section 3.05 hereof
using the amount of salary or wages deferred by the Participant for such
calendar month, which amount shall be equal to one twelfth of the
Compensation (excluding incentive compensation and bonus) which is payable
to such Participant for the calendar year for which such deferral is made.
If a Participant elects to defer all or any portion of his bonus or other
incentive compensation, as of the end of each Plan Year, the Committee shall
allocate to the Account of each Participant, the number of shares of Phantom
Stock which could be purchased at a price per share determined in accordance
with Section 3.05 hereof using an amount equal to the bonus or other
incentive compensation deferred by the Participant for such Plan Year.
3.05 Pricing of Mark IV Common Stock. For purposes of determining the
number of shares of Phantom Stock to be allocated to the Account of a
Participant as of the end of any calendar month in connection with the
salary or wages deferred by the Participant as provided for by Section 3.01
hereof, the price per share of common stock of Mark IV shall be deemed to be
the average of the closing prices per share of common stock of Mark IV
during such calendar month as determined from the closing prices per share
of common stock of Mark IV. For purposes of determining the number of
shares of Phantom Stock, if any, to be allocated to the account of a
Participant as of the end of each Plan Year with respect to the bonus or
other incentive compensation deferred by the Participant as provided for
by Section 3.01 hereof, the price per share of common stock Mark IV shall
be deemed to be the average of the closing prices per share of common
stock of Mark IV during the month of February for the Plan Year
such bonus or other incentive compensation was deferred.
For purposes of determining the Share Value of a Participant's Account in
connection with the determination of the amount of the funds to be transferred
to any Trust Fund established pursuant to Section 5.01 hereof, the price per
share of common stock of Mark IV shall be the closing price per share of
common stock of Mark IV on the day a Change in Control (as defined in
Section 5.03 hereof) occurs, as reported by the New York Stock Exchange
Composite Index.
For purposes of determining the Share Value of a Participant's Account if
the Participant's status as a member of the Board of Directors of Mark IV is
voluntarily or involuntarily terminated for any reason including, but not
limited to, the Participant's retirement, death or suffering of a total and
permanent disability, the price per share of common stock of Mark IV shall
be the average of the closing prices per share of the common stock of
Mark IV as reported by the New York Stock Exchange Composite Index for the
thirty (30) day period ending on the day the Participant's status as a
member of the Board of Directors of Mark IV is terminated.
If, pursuant to Section 4.05 hereof, a Participant has elected to receive
payment of all or any portion of the Participant's Account attributable to
Compensation Deferrals while the Participant is still a member of the Board of
Directors of Mark IV, for purposes of determining the Share Value of such
portion of the Participant's Account, at the time or times for payment of
such portion of the Participant's Account, the price per share of the common
stock of Mark IV shall be deemed to be the average of the closing prices per
share of common stock of Mark IV during the calendar month ending
immediately prior to the date for payment of all or any such portion of
the Participant's Account as determined by the closing prices per share of
common stock of Mark IV for such period as reported by the New York Stock
Exchange Composite Index for such month.
3.06 Anti-Dilution Provisions. The aggregate number of shares of Phantom
Stock allocated to a Participant's Account shall be adjusted proportionately
in the event of any change, increase or decrease in the total number of
issued and outstanding shares of common stock of Mark IV or any change in
classification of the shares of common stock of Mark IV without the receipt
of consideration by Mark IV as a result of any stock split, reverse stock
split or other consolidation of shares of common stock of Mark IV or as a
result of any payment of a stock dividend, recapitalization,
reclassification or other adjustment in the capital of Mark IV without
receipt of consideration by Mark IV.
3.07 Fractional Shares and Dividends. In the event that any cash
dividends are paid with respect to any Phantom Stock allocated to a
Participant's Account, an amount equal to the amount of the cash dividends which
would be payable with respect to the number of shares of Phantom Stock
contained in the Participant's Account shall be allocated by the Committee to
the Participant's Account as of the date for payment of such cash dividends
specified by Mark IVin the resolution authorizing the payment of such cash
dividends.
In addition, if any fractional shares of common stock of Mark IV
would result from the crediting of any Compensation Deferral to a
Participant's Account, or in connection with any change in the total number
of issued and outstanding shares of common stock of Mark IV without the
receipt of compensation by Mark IV, an amount equal to such fractional share
of common stock of Mark IV shall be allocated to the Participant's Account for
the Plan Year.
3.08 Allocation of Interest. Subject to the provisions of the
following paragraphs, unless a Trust Fund has been established pursuant to
Section 5.01 hereof, as of the end of each Plan Year, the Committee shall
increase the Dollar Value of each Participant's Account by an amount equal
to the Applicable Interest Rate multiplied by the Dollar Value of such
Participant's Account determined as of the end of the preceding Plan Year.
In addition, if a Participant has elected to defer the receipt of all or any
portion of his salary or wages by making a Compensation Deferral and if a
Trust Fund has not been established pursuant to Section 5.01 hereof, as of
the end of each Plan Year, the Committee shall increase the Dollar Value of
each such Participant's Account by an amount equal to the amount of interest
which would have been earned by applying the Applicable Interest Rate for the
immediately preceding Plan Year (adjusted for periods of less than one year)
to each of the monthly allocations of salary or wages deferred by the
Participant during the Plan Year but only for the period between the date a
monthly allocation of the Participant's salary or wages is Participant's
Account and the end of the Plan Year. Notwithstanding the foregoing, the
proportion of a Participant's Account, if any, which is attributable to cash
dividends which would be payable with respect to the shares of common stock
of Mark IV allocated to the Participant's Account shall only increased by the
Applicable Interest Rate for the immediately preceding Plan (adjusted for
periods of less than one year) for the period between the date such
cash dividends would be allocated to the Participant's Account and the end
of the Plan Year.
If a Trust Fund has not been established and a Participant's status as a
member of the Board of Directors of Mark IV is terminated on account of his
death, retirement or suffering of a Total and Permanent Disability, the
Committee shall increase the Dollar Value of such a Participant's Account by
an amount equal to the amount of interest which would have been earned by
the Dollar Value of the Participants' Account determined as of the end of
the Plan Year ending prior to the Participant's death, retirement or Total
and Permanent Disability and applying the Applicable Interest Rate for such
immediately preceding Plan Year (adjusted for periods of less than one year)
to such Dollar Value for the period from the end of such Plan Year to the
date the Participant's status as a member of the Board of Directors of
Mark IV is terminated on account of the Participant's retirement, death or
suffering of a Total and Permanent Disability. In addition, if a Participant
has elected to make Compensation Deferrals, a Trust Fund has not been
established and the Participant's status as a member of the Board of
Directors of Mark IV is terminated on account of his death, retirement
or suffering of a Total and Permanent Disability, the Committee shall
increase the Dollar Value of such Participant's Account by an amount equal
to the amount of interest which would have been earned by applying the
Applicable Interest Rate (adjusted for periods of less than one year) to
each of the monthly allocations of salary or wages made to the Participant's
account for the period between the date such monthly allocation to the
Participant's Account and the date the Participant's status as a member of
the Board of Directors of Mark IV is terminated on account of the
Participant's retirement, death or suffering of a Total and Permanent
Disability. As soon as practicable following the termination
of a Participant's status as a member of the Board of Directors of Mark IV
on account of death, retirement or Total and Permanent Disability, the
Committee shall compare the Dollar Value of the Participant's Account
determined as of the date of the Participant's retirement, death or Total
and Permanent Disability (including the amount of any interest thereon as
provided for by the two preceding sentences) with the Share Value of the
Participant's Account determined as of the date of the Participant's
retirement, death or Total and Permanent Disability and the greater of such
values shall, thereafter, be deemed the Dollar Value of the Participant's
Account determined as of the date the Participant's status as a member of
the Board of Directors of Mark IV is terminated on account of the
Participant's death, retirement or Total and Permanent Disability.
Thereafter, if a Trust Fund has not been established, the Dollar
determined pursuant to the preceding sentence) of the Account of a Participant
whose status as a member of the Board of Directors of Mark IV has been
terminated on account of his death, retirement or suffering of a Total and
Permanent Disability, shall be credited with interest for the period
beginning on the date the Participant's status as a member of the Board of
Directors of Mark IV is terminated as a result of his death, retirement or
Total and Permanent Disability and ending on the date the value of the
Participant's Account is distributed. For each Plan Year or portion thereof
which elapses during the period beginning on the date a Participant's status
as a member of the Board of Directors of Mark IV is terminated on account
of his death, retirement or Total and Permanent Disability and ending on the
date the value of the Participant's Account is distributed, the interest
rate which shall be applied to the Dollar Value of the Account of such
Participant shall be the Applicable Interest Rate as in effect
for the immediately preceding Plan Year.
If a Trust Fund has not been established and a Participant's status as a
member of the Board of Directors of Mark IV is terminated for any reason prior
to his death, retirement or suffering of a Total and Permanent Disability, the
Share Value of the Participant's Account, if any, shall be determined as
provided in Section 3.05 hereof, and the Committee shall compare the Dollar
Value of the Participant's Account determined as of the end of the
immediately preceding calendar month with the Share Value of the
Participant's Account as of the end of such immediately preceding calendar
month, and the greater of such values shall, thereafter, be deemed the
Dollar Value of such Participant's Account determined as of the date the
Participant's status as a member of the Board of Directors of Mark IV is
terminated. Thereafter, the Participant's Account shall be credited with
interest during the period beginning on the date the Participant's status as
a member of the Board of Directors of Mark IV is terminated and ending on
the last day of the calendar month ending immediately before the calendar
month in which the Participant's Account is distributed. The amount of such
interest for any such period shall be equal to the Applicable
Interest Rate for the immediately preceding Plan Year multiplied by the
Dollar Value of the Participant's Account determined as of the end of
the immediately preceding Plan Year.
Upon the occurrence of a Change in Control as defined in Section 5.03
hereof, the Committee shall increase the Dollar Value of each Participant's
Account by an amount equal to the amount of interest which would have been
earned by the Dollar Value of such Participant's Account determined as of
the Plan Year ending prior to the Change in Control and applying the
Applicable Interest Rate for such immediately preceding Plan Year to such
Dollar Value for the period from the end of such Plan Year to the date on
which the Change in Control occurs. In addition, upon the occurrence of a
Change in Control, the Committee shall increase the Dollar Value of the
Participant's Account by an amount equal to the amount of interest, if any,
which would have been earned by applying the Applicable Interest Rate for
the immediately preceding Plan Year (adjusted for periods of less than one
year) to each of the monthly allocations of salary or wages, if any,
made to the Participant's Account for the period between the date
such monthly allocation is made to the Participant's Account and the date
the Change in Control occurs.
If a Trust Fund has been established pursuant to Section 5.01 hereof and
a Participant's status as a member of the Board of Directors of Mark IV is
terminated for any reason prior to his death, retirement or disability, during
the period between the date such Participant's status as a member of the Board
of Directors of Mark IV is terminated and the date that distribution of the
Participant's Account begins, such Participant's Account shall be credited or
charged with its proportionate share of the earnings or losses of the
Trust Fund.
3.09 Allocation Does Not Vest Any Interest. The fact that an amount is
credited to the Account of a Participant shall not vest in such Participant or
any Beneficiary any right, title or interest in any assets of Mark IV except
at such time or times and upon the terms and conditions herein provided. In
addition, in the event a Trust Fund is established pursuant to Section 5.01
hereof, the fact that an amount is credited to the Account of a Participant
shall not vest in such Participant or any Beneficiary any right, title or
interest in the assets of the Trust Fund except at such time or times and
upon the terms and conditions provided herein.
3.10 Contributions. In the event a Trust Fund is established pursuant to
Section 5.01 hereof and, following the establishment of such Trust Fund,
Mark IV or its successor elects to continue this Plan, for each Plan Year
in which a Participant makes a Compensation Deferral with respect to the
bonus or other incentive compensation payable to the Participant, Mark IV or
its successor, as the case may be shall, within thirty (30) days following
the end of such Plan Year, contribute to the Trust Fund an amount equal to
the sum of all such Compensation Deferrals made for the Plan Year. In
addition, in the event a Trust Fund is established pursuant to Section 5.01
hereof and, following the establishment of such Trust Fund, Mark IV or its
successor elects to continue this Plan, for each Plan Year in which a
Participant makes a Compensation Deferral with respect to salary or wages
payable to such Participant, Mark IV or its successor, as the case may be,
shall, within fifteen (15) days following the end of the calendar month in
which any portion of the Participant's Compensation is to be allocated to
his Account contribute to the Trust Fund an amount equal to the Compensation
Deferrals made by all Participants for such month.
3.11 Valuation of Trust Fund. In the event a Trust Fund is established
pursuant to Section 5.01 hereof, as of each Valuation Date, the Trustee shall
determine the net worth of the assets of the Trust Fund and report such value
to the Committee in writing. In determining such net worth, the Trustee
shall value the assets of the Trust Fund at their fair market value as of
such Valuation Date and shall deduct all fees and expenses chargeable to the
Trust Fund. Such valuation shall not include any portion of the
Compensation Deferral made by the Participant with respect to his bonus or
other incentive compensation for the Plan Year ending on such Valuation Date.
The Committee shall then adjust the net credit balance in the Accounts of
all Participants upward or downward, pro rata, so that the total of such net
credit balances will equal such net worth of the Trust Fund as of such
Valuation Date. Finally, the Committee shall add to the Account of
each Participant, the portion of the contribution, if any, to be made
by Mark IV or its successor to reflect the amount, if any, of the
Participant's Compensation Deferral with respect to the Participant's
bonus or other incentive compensation.
3.12 Statement of Account. As soon as practicable following the end of
each Plan Year, the Committee shall deliver to each Participant a statement of
the Dollar Value and the Share Value of his Account including a statement
of: (a) the amount of the Participant's Compensation Deferral which is
attributable to the deferral of salary or wages and which has been allocated
to the Participant's Account for such Plan Year; (b) the amount of the
Participant's Compensation Deferral which is attributable to the
Participant's deferral of his bonus or other compensation which is to be
allocated to the Participant's Account as soon as practicable following the
end of such Plan Year; (c) the number of shares of Phantom Stock to be
allocated to his Account for such Plan Year; (d) the total Dollar Value
of the Participant's Account together with a statement of the
interest to be allocated to such Participant's Account for such
Plan Year and, (e) the total Share Value, of the Participant's Account.
SECTION 4.
Distributions
4.01 Retirement. Every Participant shall retire for purposes of
this Plan upon the acceptance of his resignation from membership in the
Board of Directors of Mark IV.
As soon as practicable following a Participant's retirement, the
Committee shall direct Mark IV to distribute to the Participant in one lump
sum payment in cash or by check drawn on an account containing sufficient
funds, an amount equal to the Dollar Value of the Participant's Account as
determined pursuant to Section 3.08 hereof.
If a Trust Fund has been established pursuant to Section 5.01
hereof, following a Participant's retirement, the Committee shall direct
the Trustee to distribute to the Participant in one lump sum payment in
cash or by check drawn on an account containing sufficient funds, the value
of such Participant's Account within the Trust Fund, determined as of the
preceding Valuation Date. The payments required to be made to a Participant
pursuant to this paragraph shall be delivered to the Participant no later
than sixty (60) days following the date the Participant retires from
employment with the Employer.
4.02 4.03 Death As soon as practicable following the death of a
Participant, the Committee shall direct Mark IV to distribute to any
surviving Beneficiary designated by the Participant, or, if none, to the
Participant's surviving spouse, or if neither to the Participant's estate,
in one lump sum payment in cash or by check drawn on an account containing
sufficient funds, an amount equal to the Dollar Value of the deceased
Participant's Account as determined pursuant to Section 3.08 hereof.
If a Trust Fund has been established pursuant to Section 5.01
hereof, following a Participant's death, the Committee shall direct the
Trustee to distribute to any surviving Beneficiary designated by the
Participant, or, if none, to the Participant's surviving spouse, or, if
neither, to the Participant's estate, in one lump sum payment in cash or
by check drawn on an account containing sufficient funds, the value of
such Participant's Account within the Trust Fund determined as of the
preceding Valuation Date. The payments required to be made pursuant to
this paragraph shall be delivered to the Participant's Beneficiary,
or if none to the Participant's surviving spouse, or if neither to
the Participant's estate no later than 60 days following the
Participant's death.
(a) Proof of Death The Committee may require such proper proof
of death and such evidence of the right of any person to receive payment of a
deceased Participant's Account as the Committee may deem desirable. The
Committee's determination shall be conclusive.
(b) Designation of Beneficiary Each Participant may designate a
Beneficiary of his own choosing, and may in addition name a contingent
Beneficiary. Such designation shall be made in a form satisfactory to the
Committee. Any Participant may at any time revoke or change his Beneficiary
designation by filing written notice with the Committee.
4.04 (a) Disability. As soon as practicable following the date it is
determined that a Participant suffers from a total and permanent disability,
the Committee shall direct Mark IV, to distribute and pay to the Participant
in one lump sum payment in cash or by check drawn on an account containing
sufficient funds, an amount equal to the Dollar Value of the Participant's
Account as determined pursuant to Section 3.08 hereof.
If a Trust Fund has been established pursuant to Section 5.01, after it is
determined that the Participant suffers from a Total and Permanent Disability,
the Committee shall direct the Trustee to distribute and pay to the
Participant in one lump sum payment in cash or by check drawn on an account
containing sufficient funds, an amount equal to the value of such
Participant's Account within the Trust Fund determined as of the preceding
Valuation Date. The payments required to be made pursuant to this paragraph
shall be delivered to the Participant no later than 60 days following the
date it is determined that the Participant suffers from a Total and
Permanent Disability.
(b) Total and Permanent Disability. For purposes of this Plan,
Total and Permanent Disability shall mean a presumably permanent physical or
mental condition of a Participant resulting from a bodily injury or disease or
mental disorder which renders him incapable of continuing in the employment of
the Employer or any Affiliate.
(c) Determination of Total and Permanent Disability. The total and
permanent disability of any Participant shall be determined by a licensed
physician in accordance with uniform principles consistently applied, upon the
basis of independent medically determined evidence.
4.05 Vesting. Each Participant shall at all times have a 100% vested
interest in the entire Dollar Value and the entire Share Value of his Account.
4.06 Distribution of Compensation Deferrals. A Participant shall be
entitled to receive payment of all or any portion of the amount of his
Compensation Deferral for a Plan Year at the time or times specified in the
Deferred Compensation Election Form executed by the Participant with respect
to such Plan Year notwithstanding the fact that the Participant is an active
member of the Board of Directors of Mark IV at the time such payment is to
be made to the Participant. As soon as practicable following the date
specified by the Participant in his Deferred Compensation Election Form
(and, in no event later than ten (10) days following such date), the Committee
shall distribute and pay to the Participant in one (1) lump sum payment in
cash or by check drawn on an account containing sufficient funds, the
percentage, specified in the Participant's Deferred Compensation Election
Form, of the Dollar Value or the Share Value, whichever is greater, of the
Participant's Compensation Deferral made in connection with such Deferred
Compensation Election Form. If a Participant's Deferred Compensation
Election Form provides for the partial payment to a Participant of the
Participant's Compensation Deferral, the Dollar Value and the Share Value
of the Participant's Compensation Deferral Account shall be reduced in an
amount equal to the percentage of the Compensation Deferral that is to be
paid to the Participant.
If a Trust Fund has been established pursuant to Section 5.01 hereof, at
the time a Participant is entitled to payment of all or any portion of his
Compensation Deferral for a Plan Year as provided for the Deferred
Compensation Election Form executed by the Participant for such Plan Year,
the Committee shall direct the Trustee to distribute to the Participant in
one (1) lump sum payment in cash or by check drawn on an account containing
sufficient funds, the portion of the Participant's Account which is
attributable to the portion of the Compensation Deferral which the
Participant is entitled to receive payment of together with any earnings
(or less any losses) of the Trust Fund attributable to such amount.
4.07 Termination of Board Membership and Distribution of Vested Benefits.
Upon a Participant's voluntary or involuntary termination of his status as a
member of the Board of Directors of Mark IV other than by reason of
retirement, death or disability, the Dollar Value, as determined pursuant to
Section 3.08 hereof, of such Participant's Account shall be distributed to,
or in the case of the Participant's death, on behalf of, the Participant
within sixty (60) days following the date the Participant's status as a
member of the Board of Directors is terminated. As soon as practicable
after such former Participant is entitled to distribution as provided in the
preceding sentence, the Committee shall direct Mark IV to distribute the
Dollar Value of the Participant's Account as determined pursuant to
Section 3.08 hereof together with any earnings thereon to such former
Participant or his Beneficiary in one lump sum payment in cash or by check
drawn on an account containing sufficient funds. If a Trust Fund has been
established pursuant to Section 5.01 hereof, following the date a former
Participant is entitled to a distribution as provided in this Section 4.06,
the Committee shall direct the Trustee to distribute to or on behalf of the
Participant in one lump sum payment in cash or by check drawn on an account
containing sufficient funds, an amount equal to the value of the
Participant's Account within the Trust Fund. Payments required to be made
from the Trust Fund to or on behalf of a former Participant as provided in
this paragraph shall be made no later than sixty (60) days following the
date the Participant's status as a member of the Board of Directors is
terminated. During the period between the date a Participant's status as
a member of the Board of Directors of Mark IV is terminated and the
date the Participant's Account is to be distributed, the Participant's
Account shall be credited with interest as provided in Section 3.08 or, if
a Trust Fund has been established pursuant to Section 5.01, the Participant's
Account shall be credited or charged with its proportionate share of the
earnings or losses of the Trust Fund.
At the time a former Participant is entitled to distribution, according to
its records, the Committee shall send, by registered or certified mail
directed to his address last known to the Committee, a notice informing him
as to his rights with respect to any amounts held for him and requesting
confirmation of his address and age. Each Participant and former
Participant has the obligation to keep the Committee informed of his address.
In the event the Committee is unable to locate such former Participant
within four (4) years, the amount held for his benefit shall be forfeited;
provided, however, if a claim is made by the Participant or his Beneficiary
for the forfeited amount, such amount shall be reinstated into his Account.
4.08 Certain Additional Payments by Mark IV. In the event that a "Change
in Control" as defined in Section 5.03 occurs and, thereafter, it shall be
determined that any payment or distribution by Mark IV to or for the benefit
of any Participant under this Plan, whether paid or payable or distributed or
distributable pursuant to this Plan would be subject to any income, excise or
other tax under the Internal Revenue Code of 1986, as amended, or any interest
or penalties with respect to such income, excise or other tax (the aggregate
amount of any such income, excise or other taxes together with any interest or
penalties relating to such income, excise and other taxes being hereinafter
collectively referred to as the "Taxes") then such Participant shall be
entitled to payment by Mark IV or its successor of an additional payment
(the "Gross Up Payment") in an amount such that the net amount distributed
to or on behalf of the Participant, after payment by such Participant or his
Beneficiary of all Taxes (including any Taxes imposed on the Gross-Up
Payment) equals the value of the Participant's Account which is paid and
distributed to the Participant under the terms of this Plan. The
determination of the amount of the Gross-Up Payment shall be made by Mark IV
within thirty (30) days following the date a Participant becomes entitled
to payment under the provisions of this Plan, or, if earlier, within
thirty (30) days following written notice from a Participant that the
Internal Revenue Service has made a claim that amounts paid or payable, or
distributed or distributable under this Plan are subject to income, excise or
other taxes; provided that the Participant gives written notice to the
Committee of such Internal Revenue Service claim at least ten (10) days
following receipt of the same. The determination of the amount of the
Gross-Up Payment to be made by Mark IV shall be based on:
(a) the applicable marginal rate of Federal income taxation which
would be in effect with respect to the calendar year in which the Gross-Up
Payment is to be made for a total Compensation equal to the sum of:
(i) amount of the payment to be made under this Plan which is subject to Taxes
and (ii) the amount of the Gross-Up Payment; and
(b) any applicable state and local taxes at the applicable marginal rate
of such taxes with respect to the calendar year in which the Gross-Up Payment
is to be made based upon a total Compensation equal to the sum of: (i) the
amount of the payment to be made under this Plan which is subject to Taxes
and (ii) the amount of the Gross-Up Payment.
4.09 Right to Payment of Deferred Compensation. Each Participant, upon
satisfying the requirements for payment and distribution of his Account
pursuant to the terms of this Plan, shall have a valid and enforceable claim
against Mark IV for payment of the amount described in the applicable
provisions of this Plan together with the amount of any applicable Gross-Up
Payment. Notwithstanding the foregoing, no Participant, spouse or Beneficiary
shall have any interest in any particular assets of Mark IV by reason of the
right to receive deferred compensation under this Plan and any such
Participant, spouse or Beneficiary shall have only the rights of a general
unsecured creditor of Mark IV with respect to any deferred compensation
payable under this Plan.
SECTION 5.
Trust Established Upon Change in Control
.01 Establishment of Trust. Upon the occurrence of a Change in Control
(as hereinafter defined), Mark IV or its successors shall establish a Trust
Fund for the purpose of holding and investing assets of Mark IV to be used
for payment of the deferred compensation to be provided to Participants under
this Plan. The terms and conditions of the agreement containing the terms of
the Trust Fund shall be consistent with the terms and conditions required by
rulings and regulations of the Internal Revenue Service for a trust to be
classified as a "Rabbi Trust" within the scope of Internal Revenue Service
Private Letter Ruling No. 8113017 and Internal Revenue Service Private Letter
Ruling No. 8907034 such that the amounts payable under this Plan will not be
immediately taxable to the Participants to whom such amounts are payable
under the terms of this Plan by virtue of the establishment of such Trust
Fund and contribution of assets thereto or by virtue of the acquisition by
any such Participants of a vested interest in the deferred compensation
payable hereunder.
5.02 Contributions to Trust. Promptly upon the occurrence of a Change in
Control (as hereinafter defined), but in any event not later than sixty (60)
days following the occurrence of the Change in Control, Mark IV or its
successor shall determine for each Participant, the Dollar Value and the
Share Value of the Participant's Account as of the date the change in Control
occurs. Thereafter, Mark IV or its successor shall pay to the Trustee, to be
held pursuant to the Trust Fund, cash or immediately available funds, an
amount for each Participant which is equal to the greater of the Dollar Value
and the Share Value of the Participant's Account determined as of the date
the Change in Control occurs.
5.03 Change in Control. For purposes of this Plan, a Change in Control
shall occur if (i) any "person" or "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Act")) becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Act) of more than twenty percent (20%) of the then outstanding voting
stock of Mark IV, otherwise than through a transaction arranged by, or
consummated with the prior approval of its Board of Directors, or (ii) during
any period of two (2) consecutive years, individuals who at the beginning of
such period constitute the Board of Directors (and any new director whose
election to the Board of Directors or whose nomination for election by Mark
IV's shareholders was approved by a vote of at least two thirds (2/3) of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) (hereinafter referred to as the "Continuing Directors") cease for
any reason to constitute a majority thereof; or (iii) the shareholders of
Mark IV approve a merger or consolidation of Mark IV with any other
corporation, other than a merger or consolidation which would result
in the voting securities of Mark IV immediately prior thereto continuing
to represent (either by remaining outstanding or being converted into voting
securities of the surviving entity) at least eighty percent (80%) of the
combined voting power of the voting securities of Mark IV or such surviving
entity outstanding immediately after such merger or consolidation (provided,
however, that if prior to the merger or consolidation, the Board of Directors
adopts a resolution that is approved by a majority of the Continuing
Directors providing that such merger or consolidation shall not constitute
a "change in control" for purposes of the Plan, then such a merger or
consolidation shall not constitute a "change in control"), or (iv) the
shareholders of Mark IV approve an agreement for the sale or disposition by
Mark IV or all or substantially all the assets of Mark IV. Notwithstanding
the provisions of Sections 7.01 and 7.02 hereof, the foregoing provisions of
Sections 5.01, 5.02 and 5.03 hereof may not be amended within three (3) years
following a "change in control" without the written consent of a majority in
both number and interest of the Participants who are actively employed by the
Employer, both immediately prior to the "change in control" and at the date
of such amendment.
5.04 Investment Policy. In determining its investments hereunder, the
Trustee or any duly appointed Investment Manager shall consider the short and
long range needs of the Plan communicated to them by the Committee. Benefits
may be provided through any combination of investment media designated to
provide the requisite liquidity, growth and security appropriate to this Plan.
5.05 Trustee Responsibilities. Following the establishment of a Trust
pursuant to Section 5.01 hereof, the Trustee appointed to administer the Trust
Fund shall be deemed a Fiduciary and shall discharge his duties for the
exclusive benefit of Participants in the Plan.
SECTION 6.
Administration
6.01 The Committee. The Board of Directors of Mark IV shall appoint an
administrative committee to administer the Plan as the plan administrator.
The Committee shall be the named fiduciary of the Plan with respect to Plan
administration and, if a Trust Fund is established pursuant to Section 5.01
hereof, the Committee shall be a named fiduciary with respect to the
appointment of an Investment Manager to manage any assets of the Plan.
The Committee shall consist of officers or other employees of the Employer, or
any other individuals, who shall serve at the pleasure of the Board of
Directors of Mark IV. Any member may resign by delivering his written
resignation to the Board of Directors. Vacancies arising by resignation,
death, removal or otherwise shall be filled by the Board of Directors of
Mark IV. If at any time no members are currently serving as the Committee,
or if no Committee is appointed, the Board of Directors of Mark IV shall be
deemed to be the Committee.
6.02 General Duties and Responsibilities. The Committee shall administer
the Plan in accordance with its terms and shall have all powers necessary to
carry out the provisions of the Plan. Any interpretation, construction or
determination made in good faith shall be final and conclusive. The Committee
may correct any defect, supply any omission, or reconcile any inconsistency in
such manner and to such extent as shall be deemed necessary or advisable to
carry out the purpose of this Plan. The Committee as named fiduciary may
employ attorneys, accountants and such other advisors to advise it with
respect to its duties and obligations as it deems appropriate.
6.03 Funding Policy. In the event a Trust Fund is established pursuant to
Section 5.01 hereof, the Committee shall establish a funding policy and method
consistent with the requirements of law and designed to protect the interests
of Plan Participants. The Committee shall thereafter review, and if
necessary, change such funding policy and method.
6.04 Allocation and Delegation of Responsibilities. As the named
fiduciary, the Committee may engage agents to assist it in carrying out its
functions hereunder. The Committee members are expressly authorized to
allocate among themselves and/or delegate to other named persons or parties,
fiduciary responsibilities, other than Trustee responsibilities. In the
event a Trust Fund is established pursuant to Section 5.01 hereof, the
Committee may appoint an Investment Manager and delegate to him the authority
to manage, acquire, invest or dispose of all or any part of the Trust Fund
assets. With regard to the assets entrusted to his care, the Investment
Manager shall provide written instructions and directions to the Trustee, who
shall in turn, be entitled to rely thereon. Appointments and delegations
shall be evidenced by a signed written document, which must be retained with
the other Plan documents.
6.05 Bonding. The Committee shall be responsible for procuring bonding for
any persons dealing with the Plan or its assets as may be required by law
or by this Plan.
6.06 Records, Reporting and Disclosure. The Committee shall
maintain all the records necessary for the administration of the Plan. The
Committee shall also be responsible for preparing and filing such annual
reports and tax forms as may be required by law. The Committee shall furnish
and/or make available for inspection by each Participant covered under the
Plan and to each Beneficiary who is entitled to receive benefits under the
Plan, such information and reports as may be required by law.
6.07 Expenses and Compensation. The expenses necessary to administer the
Plan shall be borne by Mark IV and, if necessary, shall be reimbursed to the
Plan. In the event a Trust Fund is established pursuant to Section 5.01
hereof, upon the failure of Mark IV to pay said expenses, the Trustee shall
pay said expenses out of the Plan assets. Expenses include, but are not
limited to, those involved in retaining necessary professional assistance
from an attorney, an accountant, an actuary, or an investment advisor.
The Employer shall furnish the Committee with such clerical and other
assistance as is necessary in the performance of its duties. The Committee,
with the approval of the Employer, may receive reasonable compensation for
services rendered in administering this Plan, provided the member performing
the services is not a full-time employee of any Employer maintaining this
Plan.
6.08 Information from Employer. To enable the Committee to perform its
functions, the Employer shall supply full and timely information to the
Committee on all matters relating to the Compensation of all Participants,
their employment, their retirement, death, disability or termination of
employment, and such other pertinent facts as the Committee may require.
The Committee shall advise the Trustee of such of the foregoing facts as may
be pertinent to the Trustee's duties under the Plan. The Committee is
entitled to rely on such information as is supplied by the Employer and shall
have no duty or responsibility to verify such information.
6.09 Multiple Signatures. In the event that more than one person has been
duly nominated to serve on the Committee, one signature may be relied upon by
any interested party as conclusive evidence that the Committee has duly
authorized the action therein set forth and as representing the will of and
binding upon the whole Committee. No person receiving such documents or
written instructions and acting in good faith and in reliance thereon shall
be obliged to ascertain the validity of such action under the terms of this
Plan and Trust. The Committee shall act by a majority of its members at the
time in office and such action may be taken either by a vote at a meeting or
in writing without a meeting.
6.10 General Fiduciary Liability. The Employer, its Board of Directors,
the Committee, the Trustee and any Fiduciary with respect to this Plan and, if
applicable, the Trust Fund created pursuant hereto shall not be liable for any
actions taken or omitted by any of them except for such acts involving gross
negligence or willful misconduct of the party to be charged and except as
required by ERISA. Nothing contained in this Section 6.10 shall be deemed to
release, discharge or otherwise limit the liability of Mark IV, or, if a Trust
Fund is established pursuant to Section 5.01 hereof, the liability of the
Trust Fund and any successor in interest to Mark IV for payment to
Participants of the amounts described in this Plan.
6.11 Liability Insurance. The Committee may purchase, as an authorized
expense of the Plan, liability insurance for the Plan and/or for its
Fiduciaries to cover liability or losses occurring by reason of the act or
omission of a Fiduciary, providing such insurance contract permits recourse
by an Insurer against the Fiduciary in the case of breach of fiduciary
obligation by such Fiduciary. Any Fiduciary may purchase on behalf of
himself, insurance to protect himself in the event of a breach of fiduciary
duty and the Employer may also purchase insurance to cover the potential
liability of one or more persons who serve in a fiduciary capacity with
regard to this Plan.
6.12 Benefit Claims Procedures. The Committee shall establish a benefit
claims procedure. Such procedure shall provide for the filing of claims for
benefits, adequate notice in writing to any Participant or Beneficiary whose
claim for benefits has been denied, setting forth the specific reasons for
such denial and written in a manner calculated to be understood by the
Participant, and afford a reasonable opportunity to any Participant whose
claim for benefits has been denied for a full and fair review by the
Committee of the decision denying the claim.
SECTION 7.
Amendment, Termination and Merger
7.01 Amendment. The Board of Directors of Mark IV shall have the
right at any time and from time to time without the consent of any
Participant or Beneficiary to amend, in whole or in part, any or all of the
provisions of this Plan. No amendment to the Plan shall be effective to the
extent that it has the effect of decreasing the value of a Participant's
Account or depriving any Participant or the Beneficiary of any Participant
of any amount payable (whether immediately or in the future) to such
Participant or Beneficiary under the terms of this Plan as in effect on
the date of such amendment.
7.02 Termination. Mark IV, by action of its Board of Directors shall have
the right at any time to discontinue its contributions hereunder and to
terminate this Plan. Upon complete termination of the Plan or upon the
occurrence of any event which constitutes a partial termination pursuant to
IRC Section 411(d)(3), whether by action of the Board of Directors or
otherwise, all Participants shall become fully and nonforfeitably vested in
the value of their respective Accounts; provided, however, in the case of a
partial termination, full vesting shall only be applicable to that part of
the Plan and the Participants covered thereunder that is terminated.
7.03 Continuation of Plan by Successor. Mark IV will require any person,
firm, corporation or other entity that becomes a successor to Mark IV,
(whether direct or indirect, by purchase of stock or assets, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of Mark IV to expressly assume and agree to perform the
provisions of this Plan as in effect at the time any such person, firm,
corporation or other entity becomes a successor to Mark IV, in the same
manner and to the same extent that Mark IV would be required to perform it if
no such succession had taken place. Unless this Plan be sooner terminated, a
successor to the business of Mark IV by whatever form or manner resulting,
may continue this Plan after such person, firm, corporation or entity becomes
a successor to Mark IV by executing an appropriate supplemental agreement.
In the event any successor to the business of Mark IV shall not elect to
continue this Plan within the ninety days after such person, firm,
corporation or other entity becomes a successor to Mark IV, this Plan
shall be deemed to be terminated and the obligation to pay to each
Participant the amounts described herein at the times provided for herein
shall become fixed and binding obligations of such successor.
SECTION 8.
Miscellaneous
8.01 No Rights Created by Plan and Trust - Terms of Employment Not
Affected. Neither the establishment of the Plan or Trust nor any modification
hereof, nor the creation of any fund or account, nor the payment of any
benefits, shall be construed as giving to any Participant, Beneficiary or
other person any legal or equitable right against the Employer or any
officer or Employee thereof, or the Trustee, or the Committee, except as
herein provided. Under no circumstances shall participation in this Plan by
an Employee constitute a contract of continuing employment or in any manner
obligate the Employer to continue the services of an Employee.
8.02 Participants Rights Unsecured. Unless the establishment of a Trust
Fund is required pursuant to Section 5.01 hereof, the Plan shall at all times
be entirely unfunded and no provision shall at any time be made with respect
to segregating any assets of Mark IV for payment of any distributions
hereunder. The rights of a Participant or his Beneficiary to receive a
distribution hereunder shall be an unsecured claim against the general
assets of Mark IV and neither the Participant nor his Beneficiary shall have
any rights in or against any specific assets of Mark IV including, but not
limited to, any assets contained in any Trust Fund established pursuant to
Section 5.01 hereof.
8.03 No Guaranty of Benefits. Nothing contained in this Plan shall be
deemed to constitute a guaranty by Mark IV or any other entity or person that
the assets of Mark IV will be sufficient to pay the benefits hereunder.
8.04 Execution of Receipts and Releases. Any payment to any Participant,
or to his legal representatives or Beneficiary, in accordance with the
provisions of this Plan, shall to the extent thereof be in full satisfaction
of all claims hereunder against the Plan, and the Committee may require such
Participant, legal representative, or Beneficiary, as a condition precedent
to such payment, to execute a receipt and release therefor in such form as
it shall determine.
8.05 Benefits Non-Assignable. No benefit which shall be payable to any
person under this Plan, (including a Participant or his Beneficiary), whether
payable out of the general assets of Mark IV or payable out of the Trust Fund,
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge the same shall be
void and no such benefit shall in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements or torts or any such person, nor
shall it be subject to attachment or legal process for or against such
person, and the same shall not be recognized by the Committee or the Trustee,
except to such extent as may be required by law.
8.06 Construed Under Applicable Federal Law and New York Law. This Plan
shall be construed according to applicable Federal Law and the laws of the
State of New York and all provisions hereof shall be administered according
to such laws.
8.07 Masculine Gender to Include Feminine; Singular to Include Plural.
Wherever any words are used herein in the masculine gender they shall be
construed as though they were also used in the feminine gender in all cases
where they would so apply, and wherever any words are used herein in the
singular form, they shall be construed as though they were also used in the
plural form in all cases where they would so apply.
8.08 Heading No Part of Plan. Heading of sections and subsections of this
instrument are inserted for convenience of reference only. They constitute no
part of this Plan are not to be construed in the construction hereof.
8.09 Counterparts. This instrument may be executed in several
counterparts, each of which shall be deemed an original, and said counterparts
shall constitute but one and the same instrument and may be sufficiently
evidenced by any one counterpart.
IN WITNESS WHEREOF, the Mark IV Industries, Inc. has caused
this Plan to be executed as of the 30th day of November, 1993.
MARK IV INDUSTRIES, INC.
By: Richard L. Grenolds
Vice President and
Chief Accounting Officer
EXHIBIT 11
<TABLE>
<CAPTION>
MARK IV INDUSTRIES, INC.
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(Amounts in Thousands, Except Per Share Data)
For the Fiscal Year Ended
the Last Day of February
_______________________________
Primary Earnings Per Share 1994 1993 1992
__________________________ ____ ____ ____
<S> <C> <C> <C>
Primary Shares Outstanding:
Weighted average number of
shares outstanding 42,481 41,993 33,140
Net effect of dilutive stock options (1) 316 330 438
Total 42,797 42,323 33,578
Income from continuing operations $ 51,100 $39,100 $26,800
Income per share from continuing operations $ 1.20 $ 0.93 $ 0.81
Income from discontinued operations $ - $ 3,600 $ 2,000
Income per share from
discontinued operations $ - $ 0.09 $ 0.06
Loss from extraordinary items $(21,700) $(3,700) $(4,500)
Loss per share from extraordinary items $ (0.51) $ (0.09) $ (0.14)
Loss from cumulative accounting change $(26,000) $ - $ -
Loss per share from cumulative
accounting change $ (0.61) $ - $ -
======== ====== =======
Fully-diluted Earnings Per Share
Fully-diluted Shares Outstanding:
Weighted average number of shares
outstanding 42,481 41,993 33,140
Shares issuable upon conversion
of the Company's:
7% Convertible Subordinated Debentures - - 4,292
6-1/4% Convertible Subordinated Debentures 7,950 7,951 348
Net effect of dilutive
stock options (1) 316 381 578
Total 50,747 50,325 38,358
Income from continuing operations $ 51,100 $39,100 $26,800
Interest, net of tax effect, for:
7% Convertible Subordinated Debentures - - 1,200
6-1/4% Convertible Subordinated Debentures 4,400 4,700 200
Income applicable to fully diluted shares $ 55,500 $43,800 $28,200
Income per share from continuing operations $ 1.09 $ 0.87 $ 0.73
Income from discontinued operations $ - $ 3,600 $ 2,000
Income per share from discontinued operations $ - $ 0.07 $ 0.05
Loss from extraordinary items $(21,700) $(3,700) $(4,500)
Loss per share from extraordinary items $ (0.43) $ (0.07) $ (0.12)
Loss from cumulative accounting change $(26,000) $ - $ -
Loss per share from
cumulative accounting change $ (0.51) $ - $ -
======== ======= =======
<FN>
_________________
(1) The net effects for fiscal 1994, 1993 and 1992 are based upon the treasury
stock method using average market prices during the periods for the primary
amounts, and the higher of the average market prices or the market price at
year-end for the fully-diluted amounts.
(2) Primary earnings per share for fiscal 1994, 1993 and 1992 have been reported
on the Company's financial statements based only upon the shares of common
stock outstanding, since the dilutive effect of the stock options is not
considered to be material.
</TABLE>
EXHIBIT 21
SUBSIDIARIES
The following is a list of the subsidiaries of Mark IV Industries, Inc.
at May 15, 1994. Except as otherwise indicated, the names of indirectly-
owned subsidiaries are indented under the names of their immediate parent.
Alston Corporation (Delaware)
Audubon Leasing, Inc. (Delaware)
Automatic Signal/Eagle Signal Corporation (Delaware)
F-P Technologies Holding Corporation (Delaware) (a subsidiary of the Company
owned 100% by the Company and Mark IV Industries Limited)
Pinnacle Audio, Inc. (Delaware)
Gulton Industries, Inc. (Delaware)
F-P Displays, Inc. (Massachusetts)
Altec Lansing Corporation (Delaware)
Altec Lansing International Limited (United Kingdom)
Electro-Voice, Incorporated (Delaware)
Mark IV Audio Canada Inc. (Canada) (an indirect
subsidiary of the Company 100% owned, in the aggregate,
by Electro-Voice, Incorporated, Gulton Industries, Inc.
and Altec Lansing Corporation)
University Sound Inc. (Delaware)
Mark IV Hong Kong Limited (Hong Kong)
Audio Consultants Co., Limited (Hong Kong)
Mark IV Audio (Aust) Pty. Limited (Australia) (an indirect subsidiary
of the Company owned 100% by Gulton Industries, Inc. and
Electro-Voice, Inc.)
Mark IV Holding AG (Switzerland)
Mark IV Audio AG (Switzerland)
F-P Displays AG (Switzerland)
LFE Industrial Systems Corporation (Connecticut)
Luminator Service, Inc. (New York)
Mark IV Audio Japan Ltd. (Japan) (88% owned)
Mark IV France S.A. (France) (an indirect subsidiary of the
Company 100% owned, in the aggregate, by Gulton Industries,
Inc. and Dayco Products, Inc.)
Dayco Products Europe S.A.R.L. (France)
Mark IV Audio France S.A. (France)
Gulton S.A. (France)
SLE S.A.R.L. (France)
Gulton-Statham Transducers, Inc. (Delaware)
Interstate Highway Sign Corp. (Delaware)
Kirkhof/Goodrich Corp. (Delaware)
Mark IV Transportation Products Corp. (Delaware)
Mark IV Audio, Inc. (Delaware)
Armtek International Holding Company, Inc. (Delaware)
Dayco Pacific Pty. Limited (Australia) (an indirect subsidiary of the
Company 100% owned in the aggregate by Armtek Int'l Holding Company,
Inc. and Dayco Products, Inc.)
Dayco Products Singapore PTE Limited (Singapore)
Dayco TSA Singapore PTE Limited (Singapore) (66% owned)
Dayco Products-International, Inc. (Delaware)
Dayco Products-United Kingdom, Inc. (Delaware)
Eagle Funding Corporation (Delaware)
Mark IV Industries GmbH (Germany)
Mark IV Vertriebs GmbH (Germany)
Dayco Europe GmbH (Germany)
Dynacord Electronic-und Geratebau GmbH (Germany) (80% owned)
Dynacord Electronic-und Geratebau GmbH & Co. KG (Germany) (80% owned)
Dynacord France S.A. (France) (100% owned, in the aggregate, by
Dynacord GmbH and Dynacord KG)
Clarke Container Company, Inc. (New York)
Glar-Ban Incorporated (New York)
Mark IV Holdings Inc. (Delaware)
Mark IV Industries Overseas, Ltd. (Barbados)
Aerospace Sub, Inc. (Delaware)
Mark IV Industries Ireland (Ireland) (100% owned by the Company and
Mark IV Holdings, Inc.)
Mark IV IVHS, Inc. (Delaware)
Madison Industrial Properties, Inc. (Delaware)
NRD, Inc. (New York)
Protective Closures Co., Inc. (New York)
LFE Corporation (Delaware)
Dayco Products, Inc. (Delaware)
Dayco Canada Holdings, Inc. (Canada)
Dayco Products Canada Inc. (Ontario, Canada)
Mark IV Industries Limited (Canada)
Vapor Canada Inc. (Canada)
Control Eldoro Dayco S.A. de C.V. (Mexico)
Dayco Products - Eaglemotive, Inc. (Delaware)
Dayco Italy S.p.A. (Italy)
Dayco PTI S.p.A. (Italy)
Dayco SACIC S.A. (Belgium)
Dayco PTI S.A. (Spain)
Dayco PTI GmbH (Germany)
United Investors S.p.A. (Italy)
Dayco Europe S.p.A. (Italy)
Saig Tubiflex S.r.l. (Italy)
Lunkoflex Iberica, S.A. (53% owned) (Spain)
Dayco Europe AB (Sweden)
Anchor Swan, Inc. (Delaware)
Dayco PTI, Inc. (Delaware)
U.S. Rubber Acquisition Corp. (Delaware)
Mark IV Holdings, S.A. (Belgium)
Mark IV Audio Magnetic, Inc. (Delaware)
Mark IV PLC (United Kingdom)
Dayco Europe Ltd. (United Kingdom)
Dayco PTI Ltd. (United Kingdom)
Cetec International Limited (United Kingdom)
Klark Teknik Plc (United Kingdom)
Nivenfield (1992) Limited (United Kingdom)
Klark-Teknik (Singapore) Pte. Limited (Singapore)
Dearden-Davies Associates Limited (United Kingdom)
Klark-Teknik Electronics, Inc. (New York)
Mark IV Transportation Products Ltd. (United Kingdom)
Caplugs Ltd. (United Kingdom)
Mark IV Netherlands B.V. (Netherlands)
Vapor Corporation (Illinois)
Pietranera S.r.L. (Italy) (a subsidiary of the Company owned 100% by the
Company and Armtek International Holding Company, Inc.)
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statements of
Mark IV Industries, Inc. on Form S-8 of our report dated March 29, 1994, on
our audits of the consolidated financial statements and financial statement
schedules of Mark IV Industries, Inc. as of February 28, 1994 and 1993, and
for each of the three fiscal years in the period ended February 28, 1994,
which reports are included in the Annual Report on Form 10-K.
COOPERS & LYBRAND
Rochester, New York
May 23, 1994
