SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by Registrant [X]
Filed by a Party other than the Registratant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
Mark IV Industries, Inc.
(Name of Registrant as Specified In Its Charter)
Richard L. Grenolds
- ---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 1-11(c)(1)(ii), 14A (i) (1), or 14a 6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
________________________________________________________________
2. Aggregate number of securities to which transaction applies:
________________________________________________________________
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 1-11: (1)
_________________________________________________________________
4. Proposed maximum aggregate value of transaction:
_________________________________________________________________
Set forth the amount on which the filing fee is calculated and
state how it was determined.
[X] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1. Amount Previously Paid: $125.00
2. Form, Schedule or Registration Statement No.: PRE14A
3. Filing Party: Mark IV Industries, Inc.
4. Date Filed: May 16, 1994 <PAGE>
<PAGE>1
MARK IV INDUSTRIES, INC.
501 John James Audubon Parkway
P.O. Box 810
Amherst, New York 14226-0810
_____________________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 20, 1994
_____________________________________________________________________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Mark
IV Industries, Inc., a Delaware corporation ("Mark IV" or the "Company"), will
be held at the Buffalo Marriott, 1340 Millersport Highway, Amherst, New York,
on Wednesday, July 20, 1994, at 11:00 a.m., Eastern Daylight Savings Time, for
the following purposes:
1. To elect one (1) Class I Director to hold office until the 1997
Annual Meeting and until a successor has been elected and
qualified.
2. To consider and take action upon the proposed Amendment and
Restatement of the Mark IV Industries, Inc. 1992 Restricted Stock
Plan Effective March 30, 1994.
3. To consider and take action upon the proposed Amendment and
Restatement of the Mark IV Industries, Inc. and Subsidiaries 1992
Incentive Stock Option Plan Effective March 30, 1994.
4. To take action upon and transact such other business as may be
properly brought before the meeting or any adjournment or
adjournments thereof.
The Board of Directors has fixed the close of business on May 24, 1994
as the record date for the determination of stockholders entitled to receive
notice of and to vote at the Annual Meeting.
Stockholders who do not expect to attend the meeting in person are urged
to vote, sign and date the enclosed proxy and return it promptly in the
envelope enclosed for that purpose.
GERALD S. LIPPES
Secretary
Dated: May 31, 1994
<PAGE>2
MARK IV INDUSTRIES, INC.
501 John James Audubon Parkway
P.O. Box 810
Amherst, New York 14226-0810
_______________________________
PROXY STATEMENT
The Proxy Statement and the accompanying form of proxy are being
furnished in connection with the solicitation, by the Board of Directors of
Mark IV Industries, Inc., a Delaware corporation ("Mark IV" or the "Company"),
of proxies to be voted at the Annual Meeting of Stockholders to be held at the
Buffalo Marriott, 1340 Millersport Highway, Amherst, New York, on Wednesday,
July 20, 1994, at 11:00 a.m., Eastern Daylight Savings Time, and at any
adjournment or adjournments thereof. The close of business on May 24, 1994,
has been fixed as the record date for the determination of stockholders
entitled to receive notice of and to vote at the meeting. On May 10, 1994,
the Company had outstanding 42,741,637 shares of Common Stock, the holders of
which are entitled to one vote per share. All share-related amounts in this
Proxy Statement have been adjusted to reflect the effects of the 5% stock
dividend distributed to stockholders of record as of April 15, 1994.
The cost of solicitation of proxies in the accompanying form will be
borne by the Company, including expenses in connection with preparing and
mailing this Proxy Statement. In addition to the use of the mails, proxies
may be solicited by personal interviews and telephone by directors, officers
and employees of the Company. Arrangements will be made with brokerage
houses, banks and other custodians, nominees and fiduciaries for the
forwarding of solicitation material to the beneficial owners of Common Stock,
and the Company will reimburse them for reasonable out-of-pocket expenses
incurred by them in connection therewith.
The affirmative vote of a plurality of the shares of Common Stock
represented in person or by proxy at the Annual Meeting is required for the
election of the Director. Approval of the Amendment and Restatement of the
Mark IV Industries, Inc. 1992 Restricted Stock Plan Effective March 30, 1994,
and the Amendment and Restatement of the Mark IV Industries, Inc. and
Subsidiaries 1992 Incentive Stock Option Plan Effective March 30, 1994
(collectively, the "Proposals") requires the affirmative vote of a majority of
the shares of Common Stock represented at the Annual Meeting in person or by
proxy and entitled to vote, provided that a majority of the outstanding shares
entitled to vote are voted on the Proposals. All shares of Common Stock
represented by valid proxies received pursuant to this solicitation and not
revoked will be voted in accordance with the choices specified; where no
specification is made with respect to any item submitted to a vote, such
shares will be voted for the election as Director of the person named under
the caption "Election of Director" and for the Proposals. Since the proxy
confers discretionary authority to vote upon other matters that properly may
come before the Annual Meeting, shares represented by signed proxies returned
to the Company will be voted in accordance with the judgment of the person or
persons voting the proxies on any other matters that properly may be brought
before the meeting.
With regard to the election of the Director, votes may be cast in favor
or withheld; votes that are withheld will be excluded entirely from the vote
and will have no effect. Abstentions may be specified for the Proposals (but
not on the election of the Director) and will be counted as present for
purposes of determining if a majority of shares have been voted on the
Proposals. Since the Proposals require the affirmative vote of a majority of
shares present in person or by proxy and entitled to vote, abstentions will
have the effect of a negative vote. Under the rules of the New York Stock
Exchange, Inc., brokers who hold shares in street names for customers have the
authority to vote on certain items when they have not received instructions
from the beneficial owners. Brokers that do not receive instructions are
entitled to vote on the election of Director, and the Proposals without
specific instructions from such customers. If a broker indicates on the proxy
that it does not have discretionary authority to vote certain shares, those
shares will not be considered as present and entitled to vote.
The execution of a proxy will not affect a stockholder's right to attend
the Annual Meeting and to vote in person. A stockholder who executes a proxy
may revoke it at any time before it is exercised by giving written notice to
the Secretary, by appearing at the Annual Meeting and so stating, or by
submitting another duly executed proxy bearing a later date.
The date of this Proxy Statement is the approximate date on which the
Proxy Statement and form of proxy were first sent or given to stockholders.
<PAGE>3
ELECTION OF DIRECTOR
The By-laws of the Company provide that the Board of Directors shall
consist of not less than three nor more than six Directors who shall be
divided into three classes, with the term of one class expiring each year.
The Board of Directors is presently comprised of five members: Joseph G.
Donohoo, a Class I Director whose term expires in 1994; Gerald S. Lippes and
Herbert Roth, Jr., Class II Directors whose terms expire in 1995; and Sal H.
Alfiero and Clement R. Arrison, Class III Directors whose terms expire in
1996. At the Annual Meeting of Stockholders in 1994, one Class I Director
shall be elected to hold office for a term expiring in 1997. Joseph G.
Donohoo has been nominated by the Board of Directors for election as such
Class I Director. A Director will be elected by a plurality of the votes cast
at the meeting. Stockholders do not have cumulative voting rights with
respect to the election of the Director.
Unless instructions to the contrary are received, it is intended that
the shares represented by proxies will be voted for the election as Director
of Joseph G. Donohoo, who is presently a Director and has been previously
elected by stockholders. If Mr. Donohoo should become unavailable for
election for any reason, it is intended that the shares represented by the
proxies solicited herewith will be voted for such other person as the Board of
Directors shall designate. The Board of Directors has no reason to believe
that Mr. Donohoo will be unable or unwilling to serve if elected to office.
The following information is provided concerning the Directors and the
nominee for election as Class I Director:
SAL H. ALFIERO, age 56, has been Chairman of the Board and Chief
Executive Officer of the Company since its incorporation. Mr. Alfiero serves
as a Director of Phoenix Home Life Mutual Insurance Company and is also a
Director of Marine Midland Bank, Western Region. He holds a B.S. degree in
Aeronautical Engineering from Rensselaer Polytechnic Institute and a Masters
degree from the Harvard Graduate School of Business Administration.
CLEMENT R. ARRISON, age 64, has been President and a Director of the
Company since November 1976. Mr. Arrison has a B.S. degree in engineering
from the University of Michigan and holds a professional engineering license.
GERALD S. LIPPES, age 54, has been general counsel, Secretary and a
Director of the Company since its incorporation. He has been engaged in the
private practice of law in Buffalo, New York since 1965 and is a partner of
the firm of Lippes, Silverstein, Mathias & Wexler, Buffalo, New York. Mr.
Lippes is also a Director of Gibraltar Steel Corporation.
HERBERT ROTH, JR., age 65, has been a Director of the Company since
September 1985, having been Chairman of the Board and Chief Executive Officer
of LFE Corporation prior to its acquisition by Mark IV in July 1985. Mr.
Roth also serves as a Director of Boston Edison Company, Phoenix Home Life
Mutual Insurance Company; Landauer, Inc.; Tech/Ops Sevcon, Inc.; Key Energy
Group; and Phoenix Total Return Fund, Inc.; and is a Trustee of the Phoenix
Series Fund; Phoenix Multi Portfolio Fund; and the Big Edge Series Fund.
<PAGE>4
JOSEPH G. DONOHOO, age 75, has been a Director of the Company since its
incorporation. He is Chairman of the Board of The Gibson Group, Inc.
("Gibson") and Clinch River Corporation ("Clinch River"). Gibson and Clinch
River filed voluntary petitions for reorganization under Chapter 11 of the
federal bankruptcy laws in January 1990 and April 1990, respectively.
The Board of Directors recommends a vote FOR the election of Mr. Donohoo
as the Class I Director.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the fiscal year ended February 28, 1994, the Board of Directors
held a total of nine meetings. Each Director attended at least 75% of the
aggregate number of meetings of the Board of Directors and meetings held by
all committees of the Board of Directors on which he served.
Audit Committee
The Board of Directors has a standing Audit Committee comprised of
Messrs. Donohoo, Roth and Lippes. The duties of the Audit Committee consist
of reviewing with the Company's independent auditors and its management, the
scope and results of the annual audit, the scope of other services provided by
the Company's auditors, proposed changes in the Company's financial and
accounting standards and principles, the Company's policies and procedures
with respect to its internal accounting, auditing and financial controls, and
making recommendations to the Board of Directors on the engagement of the
independent auditors. The Audit Committee held one formal meeting, as well as
several informal discussions during fiscal 1994.
Compensation Committee
The Compensation Committee, which consists of Messrs. Donohoo and Roth,
held two meetings during fiscal 1994. The Compensation Committee reviews and
recommends the compensation arrangements for officers and other senior
management personnel.
Other Committees
The Board of Directors does not have a standing executive or nominating
committee.
<PAGE>5
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information regarding the
Directors and executive officers of the Company.
Term as
Positions and Offices Director
Name Age with the Company Expires
---- --- ---------------------- -------
Sal H. Alfiero.......... 56 Chairman of the Board
and Chief Executive Officer 1996
Clement R. Arrison...... 64 President and Director 1996
William P. Montague..... 47 Executive Vice President
and Chief Financial Officer --
Gerald S. Lippes........ 54 Secretary and Director 1995
Frederic L. Cook........ 47 Senior Vice President-
Administration --
John J. Byrne........... 45 Vice President-Finance --
Richard L. Grenolds..... 44 Vice President and Chief
Accounting Officer --
Joseph G. Donohoo*...... 75 Director 1994
Herbert Roth, Jr........ 65 Director 1995
* Nominee for Class I Director at fiscal 1994 Annual Meeting
Recent business experience of the Directors is set forth above under
"Election of Director." Recent business experience of the executive officers
who are not also Directors is as follows:
WILLIAM P. MONTAGUE has been employed by the Company since April 1972
and has been a Vice President of the Company since May 1974. He was elected
Executive Vice President and Chief Financial Officer in March 1986. He holds
a B.S. degree in accounting and an M.B.A. degree from Wilkes University and is
a certified public accountant. He is a member of the Chase Manhattan Bank,
N.A. Regional Advisory Board and a Director of Gibraltar Steel Corporation.
FREDERIC L. COOK was elected Senior Vice President-Administration in
March 1988, and prior thereto, he had been Vice President-Finance of the
Company since May 1986. Prior to joining the Company, Mr. Cook was a tax
partner with the accounting firm of Coopers & Lybrand, where he was employed
for 19 years. He holds a B.S. degree in accounting from the Rochester
Institute of Technology and is a certified public accountant.
JOHN J. BYRNE has been employed by the Company since September 1973 and
has been a Vice President since March 1986. He was elected Vice President-
Finance of the Company in March 1988. He holds a B.S. degree in accounting
from Pennsylvania State University and an M.B.A. degree from Canisius College.
RICHARD L. GRENOLDS was elected Vice President and Chief Accounting
Officer in July 1989. Prior to joining the Company, Mr. Grenolds was a
general practice partner with the accounting firm of Coopers & Lybrand, where
he was employed for 17 years. He holds a B.S. degree in accounting from the
Rochester Institute of Technology and is a certified public accountant.
<PAGE>6
<TABLE>
<CAPTION>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following Summary Compensation Table sets forth all compensation earned by the Company's Chief
Executive Officer, and each of the Company's other four most highly compensated executive officers, for the
Company's fiscal year ended February 28, 1994, with comparative amounts for each of the two preceding fiscal
years, except for the amounts in the "Other Annual Compensation" and "All Other Compensation" columns which
are not required to be reported for fiscal 1992 under the transition rules promulgated by the Securities and
Exchange Commission ("SEC").
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
------------------------------------ Awards
Restricted Securities All Other
Name and Principal Fiscal Other Annual Stock Underlying Compensation
Position Year Salary Bonus(A) Compensation(B) Awards (C) Options (D) (E) (F) (G)
- ------------------ ------ ------ -------- --------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Sal H. Alfiero -
Chairman of the Board
and Chief 1994 $406,000 $400,000 $ 25,037 $5,000,000 - $253,059
Executive Officer 1993 $379,000 $400,000 $ 21,866 - - $240,522
1992 $297,900 $292,500 - - - -
Clement R. Arrison -
President and Director 1994 $400,000 $400,000 $ 2,183 $ 500,000 - $ 90,693
1993 $377,000 $400,000 $ 1,954 - 44,100 $ 90,545
1992 $297,400 $292,500 - - - -
William P. Montague -
Executive Vice President
and Chief 1994 $300,000 $300,000 $ 367 $ 300,000 - $ 72,928
Financial Officer 1993 $282,000 $308,000 $ 362 - 27,563 $ 69,777
1992 $225,500 $292,500 - - - -
Frederic L. Cook -
Senior Vice President -
Administration 1994 $191,000 $185,000 $ 89 - - $ 38,521
1993 $190,200 $185,000 $ 87 - 5,787 $ 39,684
1992 $165,900 $157,500 - - - -
John J. Byrne -
Vice President-Finance 1994 $156,000 $155,000 $ 92 - - $ 31,705
1993 $155,200 $155,000 $ 91 - 5,787 $ 31,223
1992 $133,800 $130,500 - - - -
</TABLE>
<PAGE>7
Notes To Summary Compensation Table
(A) Beginning in fiscal 1993, the Company's Non-Qualified Deferred
Compensation Arrangement (as defined in Note F below) was modified to
enable participants to defer up to 100% of their current cash bonus to
be hypothetically invested for a pre-determined fixed period of time.
In fiscal 1994, it was further modified to enable participants to defer
up to 100% of their salary. All deferred amounts are included in the
amounts shown for "Annual Compensation" in the Summary Compensation
Table for each of the years in which the compensation was earned.
(B) The amounts reported in this column represent tax reimbursements paid to
each of the named executives to offset the tax effects of the Company's
term life insurance program and related compensation element under the
rules of the Internal Revenue Code (IRC).
(C) The amounts represent the value of restricted stock awards, as of the
date of grant (less the $.01 per share consideration paid by the
grantee), related to the Company's 1992 Restricted Stock Plan, as
approved by the Company's stockholders at the Company's 1993 Annual
Meeting. Dividends on the Company's Common Stock are paid currently to
the holders of the restricted shares. As of the end of fiscal 1994, the
cumulative number of restricted shares of the Company's Common Stock,
and related fair market value, held by Messrs. Alfiero, Arrison, and
Montague were 275,625 shares - $5,083,438; 27,562 shares - $508,322; and
16,537 shares - $304,989 respectively. The restrictions on Mr.
Arrison's shares will lapse upon his reaching age 65 in March 1995.
Messrs Cook and Byrne did not own any restricted shares as of the end of
fiscal 1994.
(D) All amounts have been adjusted to reflect the effects of the Company's
5% stock dividend issued in April 1994.
(E) The executive officers participate in a qualified defined contribution
plan which requires the Company to contribute an amount equal to 4% of
their cash compensation, up to the maximum compensation limit for
qualified pension plans established under the rules of the IRC ($235,840
in fiscal 1994). The Company's contribution to the qualified defined
contribution plan was $9,434 for each of Messrs. Alfiero, Arrison and
Montague, $5,147 for Mr. Cook and $6,244 for Mr. Byrne in fiscal 1994.
All such amounts have been included in the "All Other Compensation"
column.
(F) As a supplement to the qualified defined contribution plan, and to
replace a previously maintained qualified profit sharing plan of the
Company, the named executives participate in the Company's Non-Qualified
Deferred Compensation Arrangement (the "Deferred Compensation
Arrangement"). The Deferred Compensation Arrangement provides each of
the named executives with an allocation equal to the sum of (i) 4% of
the excess of their total salary and bonus over the amount allowed under
the Company's qualified defined contribution plan (as discussed in Note
E) and (ii) a percentage (6.2% in fiscal 1994) of the excess of their
total salary and bonus over the Social Security Taxable Wage Base.
Amounts allocated in fiscal 1994 for the benefit of the named executives
under the terms of the Deferred Compensation Arrangement amounted to
$71,781; $68,818; $48,311; $29,643 and $21,917 for Messrs. Alfiero,
Arrison, Montague, Cook, and Byrne, respectively. All such amounts have
been included in the "All Other Compensation" column. The earnings on
amounts allocated under the terms of the Deferred Compensation
Arrangement are equal to the greater of the cumulative investment
returns which would be realized if the executive officer's account was
100% invested in both the Company's Common Stock ("equity based
earnings") and in an interest bearing account ("interest based
earnings"). The earnings amounts are not deemed to be compensation
under the rules of the SEC, and therefore are not included in the
Summary Compensation Table.
<PAGE>8
(G) Includes amounts deemed to be compensation under the rules of the IRC
related to the term portion of life insurance provided to the named
executives, including coverage under the Company's split-dollar life
insurance program. Also includes the compensation element related to
the present value of the premium payments made by the Company for the
benefit of the named executives, under the Company's split-dollar life
insurance program, in excess of the term portion. The total of such
amounts in fiscal 1994 amounted to $171,844; $12,441; $15,183; $3,731
and $3,544 for Messrs. Alfiero, Arrison, Montague, Cook, and Byrne,
respectively. The premium payments made by the Company will ultimately
be recovered by the Company to the extent of the cash surrender value of
the policies.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-end Option
Values
The following table sets forth information with respect to the named
executives concerning the exercise of options during fiscal 1994 and
unexercised options held at the end of fiscal 1994. All amounts have been
adjusted to reflect the effects of the 5% stock dividend distributed to
stockholders of record as of April 15, 1994.
<TABLE>
<CAPTION>
Value of Securities
Number of Securities Underlying
Underlying Unexercised In
Shares Unexercised Options the Money Options
Acquired Value At Fiscal Year End At Fiscal Year End (B)
Name and On Realized --------------------- ----------------------
Principal Position Exercise(#) (A) Exercisable Unexercisable Exercisable Unexercisable
- ------------------ ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sal H. Alfiero -- -- -- -- -- --
Clement R. Arrison -- -- 11,025 33,075 $ 54,849 $164,548
William P. Montague -- -- 6,891 20,672 $ 34,283 $102,841
Frederic L. Cook 18,304 $405,434 10,060 4,341 $144,016 $ 21,597
John J. Byrne 1,874 $ 28,382 5,314 4,341 $ 68,626 $ 21,597
____________________
<FN>
(A) Represents the difference between the closing market value of the Company's Common Stock
on the date of exercise and the exercise price of such options.
(B) Represents the difference between the closing market value of the Company's Common Stock
as of February 28, 1994 ($18.375) and the exercise price of such options.
</TABLE>
<PAGE>9
APPROVAL OF AMENDMENT AND RESTATEMENT OF THE
MARK IV INDUSTRIES, INC. 1992 RESTRICTED STOCK PLAN
EFFECTIVE MARCH 30, 1994
An Amendment and Restatement of the Mark IV Industries, Inc. 1992
Restricted Stock Plan Effective March 30, 1994 (the "Restricted Plan") is
being proposed to (i) increase the number of authorized shares of Common Stock
reserved for issuance under the Restricted Plan by 210,000 shares; (ii)
provide for the lapse of restrictions on shares held by employees who are
employed by a division or subsidiary in the event of the Company's sale of
such division or subsidiary; and (iii) allow the participant to utilize a
portion of the shares awarded upon the lapse of restrictions to pay for the
required withholding tax thereon. The principal features of the Restricted
Plan are described below. The description is qualified by reference to the
complete text of the Restricted Plan, which is included as exhibit A to this
Proxy Statement. All amounts have been adjusted to reflect the effects of the
5% stock dividend distributed to stockholders of record as of April 15, 1994.
Under the Restricted Plan, the Compensation Committee may grant to
employees of the Company and its subsidiaries restricted stock awards which
entitle the grantee to purchase shares of the Company's Common Stock, at a
purchase price of $.01 per share, in consideration of the employee's
contribution to the performance of the Company. Such shares, when and if
issued, are subject to transfer restrictions (i.e., the grantees are
restricted from selling such shares) and to substantial risk of forfeiture
until the shares become vested. Grantees normally do not vest in their shares
in the first two fiscal years of the grant. Beginning on the second
anniversary of the date of grant of a restricted stock award, the restrictions
on shares awarded under the Restricted Plan will lapse at the rate of 33-1/3%
per year, but only if the Company's operating performance is such that the
grantee's bonus under the Bonus Plan (as hereinafter defined) is earned for
that year or subsequent years. In any event, grantees become 100% vested in
their shares at the end of five years following the grant date or, if earlier,
on the date the grantee attains age 65, provided that the grantee is still in
the employ of the Company (or a subsidiary) on the applicable date.
The restrictions on shares awarded under the Restricted Plan shall also
lapse (i) upon the death, disability or retirement of the grantee; (ii) upon a
"Change in Control" (as defined in the Restricted Plan); (iii) upon the sale
of the division or subsidiary which employs the grantee, when such grantee
does not remain in the employ of the Company; or (iv) upon such special
circumstance or event as in the opinion of the Compensation Committee merits
special consideration. A grantee generally has the right to vote the
restricted shares issued in his or her name, and to receive all dividends,
distributions and adjustments with respect to the shares that are the subject
of a restricted stock award; however, non-cash dividends, distributions and
adjustments are subject to the same restrictions and risk of forfeiture as are
applicable to the original restricted shares subject to the grantee's award.
The Restricted Plan contains provisions to assure that any disposition of the
Company's Common Stock will not violate the securities laws. The Board of
Directors may at any time amend, suspend or terminate the Restricted Plan and
may, with the consent of the affected holder of an outstanding restricted
stock award, amend, suspend or terminate outstanding restricted stock awards,
and the Compensation Committee may amend the Restricted Plan with respect to
<PAGE>10
its administration or to conform to any Federal or State law or regulation.
Any amendment which would materially increase the benefits accruing to
participants under the Restricted Plan, materially increase the number of
shares issuable under the Restricted Plan, or materially modify the
eligibility requirements under the Restricted Plan, shall be subject to the
approval of the stockholders of the Company.
The federal income tax consequences to an employee who receives a
restricted stock award, and to the Company, generally will, under current law,
be as follows:
An employee will not realize any income when the right to acquire shares
subject to a restricted stock award is granted or when the certificates for
the restricted shares are registered in his or her name. The employee will
realize ordinary income as and when the restricted shares are no longer
subject to a substantial risk of forfeiture (which risk of forfeiture includes
the restrictions imposed by Section 16(b) of the Securities Exchange Act of
1934), in an amount equal to the difference between the fair market value of
the shares as of such date and the price, if any, he or she paid for such
shares. Alternatively, the employee can file a written election with the
Internal Revenue Service no more than 30 days after the restricted shares are
transferred to him or her, to be taxed as of the date of the transfer on the
difference between the then fair market value of the shares and the price, if
any, he or she paid for such shares. Upon any incidence of taxation, the
Company will be required to take appropriate actions to obtain sufficient
funds from the participant to pay the required payroll withholding taxes that
would be due on this "earned compensation." The provisions of the Restricted
Plan allow the Company to retain a sufficient number of the restricted shares
to allow their fair market value to be used to offset the required payroll
withholding amount. Once the employee has realized ordinary income with
respect to the shares, any subsequent increase in the value of the shares
generally will be taxed when the shares are sold as long-term or short-term
capital gain depending on how long the shares are held. The employee's
holding period with respect to the restricted shares will begin on the date he
or she realizes ordinary income with respect thereto and the basis in the
shares will be equal to their then fair market value. Any dividends, or other
distributions paid on the restricted shares generally will be taxable when
distributed to the employee; however, non-cash dividends or distributions
which are subject to the same risk of forfeiture as the original restricted
shares that are the subject of an award will be taxable at the same time and
in the same manner as the original restricted shares. Under current law,
long-term capital gains generally are taxed at a maximum of 28%.
<PAGE>11
Federal tax legislation (IRC 162(m)) was enacted in 1993 to limit
publicly-held companies from deducting, for tax purposes, compensation paid to
any named executive officer in excess of $1,000,000 in certain situations.
The determination of the tax implications of IRC 162(m), if any, on the
restricted shares depends upon, among other factors, the rate of vesting, the
market value of the Company's Common Stock on the date vested, the
individual's employment status, and the individual's other compensation from
the Company. Absent the implications of IRC 162(m), if any, the Company will
be entitled to a tax deduction when, and to the extent, ordinary income is
realized by the employee with respect to the restricted shares.
In addition to the federal income tax consequences discussed above,
Section 280G of the IRC provides that if an officer, stockholder or highly
compensated individual receives a payment which is in the nature of
compensation and which is contingent upon a change in control of the employer,
and such payment equals or exceeds three times his or her "base amount" (as
hereinafter defined), then any amount received in excess of the base amount
shall be considered an "excess parachute payment." An individual's "base
amount" is equal to his or her average annual compensation for federal income
tax purposes over the five-year period (or period of employment, if shorter)
ending with the close of the individual's taxable year immediately preceding
the taxable year in which the change in control occurs. In addition to any
income tax which would otherwise be owed on such payment, the individual will
be subject to an excise tax equal to 20% of such excess payment and the
Company will not be allowed a deduction for such excess payment. If the
taxpayer establishes by clear and convincing evidence that an amount received
is reasonable compensation for past or future services, all or a portion of
such amount may be deemed not to be an excess parachute payment.
Section 280G also provides that payments made pursuant to a contract
entered into within one year of the change in control are presumed to be
parachute payments unless the individual establishes by clear and convincing
evidence that such contract was not entered into in contemplation of a change
in control. In addition, the General Explanation of the Tax Reform Act of
1984 prepared by the Staff of the Joint Committee on Taxation indicates that
the grant of a restricted stock award within one year of the change in control
or the acceleration of a restricted stock award because of a change in control
may be considered a parachute payment in an amount equal to the value of the
restricted stock award or the value of the accelerated portion of the
restricted stock award, as the case may be. Payments received for the
cancellation of a restricted stock award because of a change in control may
also result in parachute payments.
The foregoing summary with respect to federal income taxation does not
purport to be complete, and reference is made to the applicable provisions of
the IRC.
In March 1993, subject to the approval of the Company's 1992 Restricted
Stock Plan by the Company's stockholders, the Compensation Committee granted
restricted stock awards with respect to 336,262 shares of the Company's Common
Stock. The Company's 1992 Restricted Stock Plan was approved at the Company's
1993 Annual Meeting, and accordingly the restricted stock awards have been
included in the Summary Compensation Table forward for each of the named
executives.
<PAGE>12
In March 1994, the Compensation Committee granted restricted stock
awards with respect to 21,000 shares of the Company's Common Stock under the
Restricted Plan to named executives and others, as identified in the following
table.
NEW (AMENDED) PLAN BENEFITS
AMENDMENT AND RESTATEMENT OF THE
MARK IV INDUSTRIES, INC. 1992 RESTRICTED STOCK PLAN
EFFECTIVE MARCH 30, 1994
Dollar Value of Awards Granted
-------------------------------
Name and At Date As Most Recently Number of
Principal Position of Grant (A) Determined (B) Shares
- ------------------ ------------- --------------- ---------
Sal H. Alfiero
Chairman of the Board and
Chief Executive Officer - - -
Clement R. Arrison
President and Director - - -
William P. Montague
Executive Vice President
and Chief Financial Officer $ 44,651 $ 44,927 2,625
Frederic L. Cook
Senior Vice President -
Administration $ 44,651 $ 44,927 2,625
John J. Byrne
Vice President-Finance $ 44,651 $ 44,927 2,625
Executive Group (7 people) $ 178,605 $179,708 10,500
Non-Executive Officer Employees $ 178,605 $179,708 10,500
(A) Value was determined by using the closing market value at the date of
grant, which was $17.02 per share, minus the $.01 per share payable by
the grantee.
(B) Value was determined by using the closing market value as of May 10,
1994, which was $17.125 per share, minus the $.01 per share payable by
the grantee.
The restricted shares and related values listed above have not been
included in the Summary Compensation Table since they relate to fiscal 1995.
Including the fiscal 1995 awards, the cumulative number of restricted shares
granted under the Restricted Plan to Messrs. Alfiero, Arrison, Montague, Cook,
Byrne, the Executive Group (including the named executive officers), and the
Non-Executive Officer Employees totals 275,625; 27,562; 19,162; 2,625; 2,625;
346,762; and 10,500 shares, respectively. Upon stockholders' approval, and
after considering the awards identified above for fiscal 1995, approximately
249,112 shares would remain available for the future granting of shares under
the Restricted Plan.
<PAGE>13
The affirmative vote of the holders of at least a majority of the shares
of Common Stock represented at the 1994 Annual Meeting in person or by proxy
and entitled to vote (provided that a majority of the outstanding shares are
voted on the proposal) is required for the approval of the Restricted Plan.
The Company anticipates filing a Registration Statement on Form S-8 with the
SEC for the Restricted Plan as soon as practical following stockholders'
approval.
The Compensation Committee of the Board of Directors believes that the
Restricted Plan will enable the Company to reward and retain highly qualified
executive employees, and increase the personal interest those employees have
in the successful and profitable operations 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. Accordingly, the Board of Directors recommends a vote
FOR approval of the Restricted Plan.
APPROVAL OF AMENDMENT AND RESTATEMENT OF THE
MARK IV INDUSTRIES, INC. AND SUBSIDIARIES
1992 INCENTIVE STOCK OPTION PLAN
EFFECTIVE MARCH 30, 1994
The Compensation Committee has proposed the Amendment and Restatement of
the Mark IV Industries, Inc. and Subsidiaries 1992 Incentive Stock Option Plan
Effective March 30, 1994 (the "1992 Option Plan") to (i) allow holders of
options employed by a division or subsidiary to become 100% vested in their
options in the event of a sale of such division or subsidiary by the Company;
(ii) allow for the cashless exercise of options; (iii) allow options to be
granted in accordance with IRC Section 422(c)(5) regarding employees owning
10% or more of the Company's outstanding Common Stock; and (iv) establish a
limit on the cumulative number of shares (subject to certain anti-dilutive
adjustments) an individual named executive officer could be granted options to
acquire under the 1992 Option Plan. The principal features of the 1992 Option
Plan are described below. The description is qualified by reference to the
complete text of the 1992 Option Plan, which is included as Exhibit B to this
Proxy Statement. All amounts have been adjusted to reflect the effects of the
5% stock dividend distributed to stockholders of record as of April 15, 1994.
The 1992 Option Plan has been allocated 1,653,750 shares of the
Company's authorized Common Stock to be used for the granting of options. The
1992 Option Plan provides that the Compensation Committee may grant to
officers and key employees of the Company and its subsidiaries "incentive
stock options" (as defined under Section 422 of the IRC) to purchase shares of
the Company's Common Stock at an exercise price equal to no less than 100% of
the market price on the date of grant, in consideration of the employee's
degree of responsibility for the growth and success of the Company, and other
factors related to the employee's service with the Company. As a result of
the proposed amendment, employees owning 10% or more of the Company's
outstanding Common Stock may now be granted qualified stock options, as long
as the option price is no less than 110% of the market price of the Company's
Common Stock on the date of grant, and the exercise period is no longer than 5
years. With respect to all other grantees, the options have a maximum
duration of 10 years. Options may be exercised as determined by the
Compensation Committee.
<PAGE>14
Unless specified otherwise by the Compensation Committee, options become
exercisable in cumulative annual increments of 25% beginning one year from the
date of grant; however, options become immediately exercisable in full upon
the optionee's disability, retirement or death while employed or within three
months of retirement, or upon a disposition of all or substantially all assets
of the Company or a "Change in Control" (as defined in the Option Plan). As a
result of the amendment, immediate vesting is provided to option holders that
are employed by any of the Company's subsidiaries or divisions, in the event
of the sale of such subsidiary or division. As amended, the 1992 Option Plan
also limits the number of shares for which options may be granted to any named
executive officer of the Company under the 1992 Option Plan to 210,000 shares
(subject to certain anti-dilutive adjustments). This limit is being
established to preserve the Company's tax deduction for any subsequent
compensation amount related to the exercise of options under the 1992 Option
Plan in accordance with IRC 162(m), as identified in the federal tax
consequences discussion which follows. The 1992 Option Plan also provides that
the aggregate fair market value (determined at the time the option is granted)
of the Company's Common Stock with respect to which incentive stock options
are exercisable for the first time by an optionee during any calendar year
(under all stock option plans of the Company and its subsidiaries) shall not
exceed $100,000.
Payment of the purchase price for the shares acquired upon the exercise
of options must normally be made by cash or by certified or bank check payable
to the order of the Company. As amended, payment can also be made without
cash by the option holder's tendering of a number of previously owned shares
of the Company's Common Stock which are equivalent in fair market value to the
total exercise price. Options granted under the 1992 Option Plan generally
terminate three months after the optionee's termination of employment with the
Company and its subsidiaries, except that in the event of a termination for
cause or voluntarily without the Company's (or subsidiary's) consent, during
the two-year period beginning on the date of grant, the options terminate
immediately upon such termination of employment. In the event of the
optionee's termination of employment on account of disability, or the
optionee's death while employed or within three months of retirement, the
options are exercisable for one year after such termination or death, by the
optionee or by the optionee's estate or heirs, as the case may be. Options
(and the 1992 Option Plan) also terminate 90 days after the consummation of a
disposition of all or substantially all assets of the Company or a Change in
Control of the Company (rather than a change in control of only a subsidiary
or division), unless provision is made for the assumption or substitution of
the options by the successor corporation.
Each option contains customary anti-dilution provisions which are
applicable in the event of a stock dividend, a split-up, reverse split or
consolidation of shares, recapitalization, reclassification or other like
capital adjustment of the Company. The 1992 Option Plan also contains
provisions to assure that any exercise of an option or disposition of the
Company's Common Stock will not violate the securities laws.
<PAGE>15
The 1992 Option Plan terminates on September 2, 2002. The Board of
Directors may at any time suspend, amend or terminate the 1992 Option Plan and
may, with the consent of the affected holder of an outstanding option, amend,
suspend or terminate outstanding options. Any amendment which would increase
the number of shares as to which options may be granted under the 1992 Option
Plan, reduce the exercise price or change the method of determining the price,
increase the duration of options beyond 10 years, or change the designation or
class of eligible employees, shall be subject to the approval of the
stockholders of the Company.
The Federal income tax consequences to an employee who receives an
option under the 1992 Option Plan, and to the Company, generally will, under
current law, be as follows:
An employee will not realize any income upon the grant or exercise of an
option. If the employee disposes of the shares of Common Stock acquired for
cash upon the exercise of an option at least two years after the date the
option is granted and at least one year after the Common Stock is transferred
to him or her, the employee will realize long-term capital gain in an amount
equal to the excess, if any, of his or her selling price for the shares over
the option exercise price. In such case, the Company will not be entitled to
any tax deduction resulting from the issuance or sale of the shares. If the
employee disposes of the shares of Common Stock acquired upon the exercise of
an option for cash prior to the expiration of two years from the date the
option is granted, or one year from the date the Common Stock is transferred
to him or her, any gain realized will be taxable at such time as follows: (a)
as ordinary income to the extent of the difference between the option exercise
price and the lesser of the fair market value of the shares on the date the
option was exercised or the amount realized from such disposition, and (b) as
capital gain to the extent of any excess, which gain shall be treated as
short-term or long-term capital gain depending on the holding period of the
Common Stock. In such case, the Company may claim an income tax deduction (as
compensation) for the amount taxable to the employee as ordinary income.
Under current law, long-term capital gains generally are taxed at a maximum
rate of 28%.
If an employee elects the cashless exercise of the option by tendering
existing shares of the Company's Common Stock, (a) the holding period for the
newly issued shares equal in value to the tendered shares will include the
period during which the tendered shares were held, (b) the employee's tax
basis in such newly issued shares will be the same as the tax basis in the
tendered shares, and (c) no gain or loss will be realized by the employee on
the tendered shares. However, if an employee uses shares previously acquired
pursuant to the exercise of an option to pay all or part of the exercise price
under an option, such tender will constitute a disposition of such previously
acquired shares for purposes of the one-year (or two-year) holding period
requirement applicable to such option, as discussed above, and such tender may
be treated as a taxable exchange.
IRC 162(m) referred to previously could also impact the tax consequences
of the Company's compensation deduction referred to above. As a result of the
amendment to establish a maximum number of shares to be received by any one
named executive officer, IRC 162(m) is not expected to impact the Company's
possible compensation deduction.
<PAGE>16
In general, the difference between the fair market value of the Common
Stock at the time the option is exercised and the option exercise price will
constitute an item of adjustment for purposes of determining alternative
minimum taxable income, and under certain circumstances may be subject, in the
year in which the option is exercised, to the alternative minimum tax.
In addition to the Federal income tax consequences discussed above,
Section 280G of the IRC provides that if an officer, stockholder or highly
compensated individual receives a payment which is in the nature of
compensation and which is contingent upon a change in control of the employer,
and such payment equals or exceeds three times his or her "base amount" (as
hereinafter defined), then any amount received in excess of the base amount
shall be considered an "excess parachute payment." An individual's "base
amount" is equal to his or her average annual compensation for federal income
tax purposes over the five-year period (or period of employment, if shorter)
ending with the close of the individual's taxable year immediately preceding
the taxable year in which the change in control occurs. In addition to any
income tax which would otherwise be owed on such payment, the individual will
be subject to an excise tax equal to 20% of such excess payment (and the
Company will not be allowed any deduction which might otherwise have been
allowed for such excess payment). If the taxpayer establishes by clear and
convincing evidence that the amount received is reasonable compensation for
past or future services, all or a portion of such amount may be deemed not to
be an excess parachute payment.
Section 280G also provides that payments made pursuant to a contract
entered into within one year of the change in control are presumed to be
parachute payments unless the individual establishes by clear and convincing
evidence that such contract was not entered into in contemplation of a change
in control. In addition, the General Explanation of the Tax Reform Act of
1984 prepared by the Staff of the Joint Committee on Taxation indicates that
the grant of an option within one year of the change in control or the
acceleration of an option because of a change in control may be considered a
parachute payment, in an amount equal to the value of the option or the value
of the accelerated portion of the option, as the case may be. Even if the
grant of an option within one year of the change in control or the
acceleration of an option is not a parachute payment for purposes of Section
280G, the exercise of an option granted within one year of the change in
control or the exercise of the accelerated portion of an option may result in
a parachute payment, in an amount equal to the excess of the fair market value
of the shares received upon exercise of the option over the exercise price.
Payments received for the cancellation of an option because of a change in
control may also result in parachute payments.
The foregoing summary with respect to Federal income taxation does not
purport to be complete and reference is made to the applicable provisions of
the IRC.
No options were granted under the 1992 Option Plan in fiscal 1994;
however, options for 304,762 shares were granted to certain of the Company's
key operating personnel and executive officers in March 1994, at an exercise
price in the range of $17.02 to $18.72. With the exception of Mr. Alfiero,
the exercise price of the options is the market price at the date of grant.
<paage>17
The exercise price for Mr. Alfiero's options is $18.72 per share, which
represents 110% of the market value at the date of grant. The market price of
the Company's Common Stock on the New York Stock Exchange at the close of
business on May 10, 1994, was $17.125 per share. All such options were
granted to named executives and others as identified in the following table.
NEW (AMENDED) PLAN BENEFITS
AMENDMENT AND RESTATEMENT OF THE
MARK IV INDUSTRIES, INC. AND SUBSIDIARIES 1992
INCENTIVE STOCK OPTION PLAN
EFFECTIVE MARCH 30, 1994
Name and Number of
Principal Position Shares Granted
------------------ --------------
Sal H. Alfiero
Chairman of the Board and
Chief Executive Officer 52,500
Clement R. Arrison
President and Director 31,500
William P. Montague
Executive Vice President
and Chief Financial Officer 10,500
Frederic L. Cook
Senior Vice President -
Administration 5,250
John J. Byrne
Vice President-Finance 5,250
Executive Group (7 people) 120,750
Non-executive officer
employees 184,012
The options granted to the named executives have not been included in
the table showing fiscal year-end option values, nor in the Summary
Compensation Table, since they relate to fiscal 1995. Including these fiscal
1995 awards, the cumulative number of shares granted under the 1992 Option
Plan to Messrs. Alfiero, Arrison, Montague, Cook, Byrne, the Executive Group
(including the named executive officers), and the Non-Executive Officer
Employees totals 52,500; 86,310; 38,063; 5,250; 5,250; 219,975; and 295,585
shares, respectively. After considering the awards identified above for
fiscal 1995, approximately 1,124,540 shares would remain authorized for the
future granting of options under the 1992 Option Plan.
<PAGE>18
The affirmative vote of the holders of at least a majority of the shares
of Common Stock represented at the 1994 Annual Meeting in person or by proxy
and entitled to vote (provided that a majority of the outstanding shares are
voted on the proposal) is required for the approval of the 1992 Option Plan.
The Company anticipates filing a Registration Statement on Form S-8 with the
SEC for the 1992 Option Plan as soon as practical following stockholder
approval.
The Compensation Committee of the Board of Directors believes that the
1992 Option Plan will enable the Company to reward and retain highly qualified
executive employees, and increase the personal interest these employees have
in the successful and profitable operations 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. Accordingly, the Board of Directors recommends a vote
FOR approval of the 1992 Option Plan.
EMPLOYMENT AGREEMENTS
The Company has employment agreements ("Employment Agreements") with
each of its executive officers. The Employment Agreements provide for an
initial term of five years (the "Initial Term"), which is automatically
extended for an additional twelve-month period on each annual anniversary
date. The Employment Agreements provide for the payment of a base salary
which can be increased at the discretion of the Company. Additionally, an
executive officer that is a party to an Employment Agreement shall be eligible
to receive cash bonuses as part of the Company's Bonus Plan and participate in
the Company's various other benefit and incentive plans. The base salary and
cash bonuses payable under these Employment Agreements are included in
calculating the total cash compensation paid to the various executives.
The Employment Agreements provide that in the event the Company
terminates the executive subsequent to the Initial Term for any reason other
than cause, such executive shall be entitled to receive a lump sum benefit
equal to two and one-half times such executive's total cash compensation for
the twelve-month period immediately preceding the date of his termination.
The Employment Agreements further provide for severance benefits upon a change
in control of the Company. If the executive's employment is terminated within
three years of a change in control, he may be entitled to receive a lump sum
severance payment equal to $100 less than three times the average of his total
cash compensation during the three-year period immediately preceding his
termination, plus medical, disability and life insurance benefits for the rest
of his life. The payments and benefits otherwise payable in the event of a
change in control are subject to an overall limitation so that the value
thereof would not constitute "excess parachute payments" that would be subject
to excise tax payments or corporate deduction disallowance under the IRC. In
addition, upon a termination due to a change in control or at such time as a
covered executive retires and becomes entitled to receive benefits under any
of the Company's tax-qualified retirement plans (the "Retirement Plans"), he
will be entitled to receive from the Company an additional benefit computed as
if the Retirement Plans were not subject to limits imposed on tax-qualified
plans by the IRC or ERISA, and such amounts are included in the amounts
accrued for the executive officers under the Deferred Compensation
Arrangement, and included under the column entitled "All Other Compensation"
in the Summary Compensation Table presented above.
<PAGE>19
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is designed to attract and
retain top quality executives and to provide them with both an incentive and a
reward for superior performance. The program includes three principal
components - base salary, annual bonus opportunities and long term incentives.
The program is administered by the Compensation Committee of the Board of
Directors. Members of the Compensation Committee are outside Directors who
are not employees of the Company.
The Compensation Committee generally reviews base salary levels for
executive officers each year. Salaries are adjusted to the extent the
Compensation Committee believes is appropriate, taking into account the
executives' and the Company's performance, and other factors that the
Committee deems relevant each year. Base salaries for all executive officers
were the same in fiscal 1991 as in fiscal 1990. In fiscal 1992, executive
officers accepted a 20% reduction in their base salary for a six-month period
of time, in conjunction with a pay freeze for all other Corporate employees.
When the pay freeze was lifted and raises provided to all of the other
Corporate employees in August 1991, the executive officers' base salaries were
reinstated to their fiscal 1990 levels. During fiscal 1993, the Compensation
Committee approved raises for Mr. Alfiero and the other executive officers,
taking into consideration the period of time since the executives' last
increase, their assessment of the individual's commitment to the Company to
date, and the Company's earnings and operating performance. Considering these
factors, the Compensation Committee increased the annual base salary of
Messrs. Alfiero and Arrison by $81,000, an annual rate of increase of slightly
less than 6% per year since their last increase in fiscal 1989. The increase
in the salaries of the remaining named executives in fiscal 1993 represented
an annual rate of increase in the range of 3% to 5% per year since their last
increase in fiscal 1989.
There were no salary increases in fiscal 1994. However, in March 1994,
the Compensation Committee increased Mr. Alfiero's annual base salary for
fiscal 1995 by $44,000 which represented an annualized rate of increase of
slightly more than 6% since the fiscal 1993 increase identified above. The
Compensation Committee also increased the annual base salaries of the other
named executives for fiscal 1995 in a similar manner as of that same date.
Annual bonus awards are determined according to the terms of the
Company's Executive Bonus Plan (the "Bonus Plan"). Under the Bonus Plan, each
executive officer has the opportunity to earn a bonus of up to 100% of his
base salary, if the Company's earnings per share reach a specified target, as
established by the Compensation Committee. No bonus shall be payable unless
the Company achieves its projected earnings per share target. Further, no
bonus shall be payable if the target is projected to be less than the actual
earnings during the prior fiscal year. There are no minimum bonus levels but
there is a maximum bonus level of 100% of the executive officers' cumulative
base salaries for the year, based upon the base rate in effect at the end of
the fiscal year. Under the Bonus Plan formula, a bonus pool equal to 50% of
the Company's net income before taxes in excess of the net income before taxes
which is necessary to meet the target (without considering extraordinary
items) is allocated to the eligible officers until the pool reaches the
maximum bonus level of 100% of base salaries. If such bonus pool does not
reach the maximum amount of 100% of base salaries, then the bonuses are
<PAGE>20
limited to the amount in the bonus pool. Under the terms of the Bonus Plan,
the Committee does not have any authority to modify the bonus amounts as
computed by the Bonus Plan formula. However, an informal arrangement provides
the Compensation Committee with the ability to modify, without limitation, the
total cash compensation of the individual executives, if the situation should
warrant. Such was the case in fiscal 1992 when the bonus was reduced by 20%
as a result of the uncertain economic times, even though the Company's
financial objectives had been achieved for the year. The Company exceeded its
projected earnings per share target for fiscal 1994; therefore, a bonus of
100% of the base salary in effect at the end of fiscal 1994 was awarded to
each of the named executive officers under the Bonus Plan. As a result of
this arrangement, at least 50% of the executive officers' annual cash
compensation is directly linked to the operating performance of the Company,
which the Compensation Committee believes helps to maximize the individual
effort of all executive officers on a consistent basis.
Prior to fiscal 1993 the Company made stock option grants to a few
executive officers on a very infrequent basis. After the end of fiscal 1993,
the Compensation Committee voted to make grants of restricted shares to Mr.
Alfiero and three other executive officers, subject to stockholder approval of
the Company's 1992 Restricted Stock Plan, which approval was provided at the
1993 Annual Meeting. The Compensation Committee also determined in December
1992 to grant options to certain of the Company's executive officers,
exclusive of Mr. Alfiero, to acquire 99,225 shares of the Company's Common
Stock, subject to stockholder approval of the Company's 1992 Incentive Stock
Option Plan, which approval was also provided at the 1993 Annual Meeting. In
making these determinations, the Compensation Committee took into account the
fact that, unlike comparably situated executives at other companies within the
Peer Group (as hereinafter defined), Mr. Alfiero and two of the three other
executive officers had never been granted stock options nor restricted shares,
and the other executive officer had not received any such awards in the past
seven years.
In March 1994, the Compensation Committee determined it appropriate to
grant an incentive stock option to Mr. Alfiero to acquire 52,500 shares of the
Company's Common Stock at an exercise price equal to 110% of the fair market
value of the Common Stock at the date of grant. The grant was made subject
to stockholders' approval of the 1992 Option Plan at the 1994 Annual Meeting,
as described previously under "Approval of Amendment and Restatement of the
Mark IV Industries, Inc. and Subsidiaries 1992 Incentive Stock Option Plan
Effective March 30, 1994." The Compensation Committee also determined it
appropriate to grant options to the other named executives as identified in
the previously referenced section of this Proxy Statement. The Compensation
Committee believes such grants to be appropriate long-term incentive
compensation to reward the executives for their efforts to date, and provide
an incentive element geared to the long-term growth in stockholders' value.
A significant number of shares of the Company's outstanding Common Stock
are owned by the Company's executive officers. In the event of death, their
estates would be forced to liquidate a significant number of shares of the
Company's Common Stock in order to pay related estate taxes. Such events
could result in significant blocks of the Company's Common Stock being sold,
which could decrease its value, and create undue hardships to the heirs, and
also to existing stockholders. As a result, it was deemed appropriate to
establish a life insurance program for the executive officers to enable their
<PAGE>21
heirs and the Company's stockholders to avoid or significantly mitigate such a
problem. The Company established a "split-dollar" life insurance program in
which the executives were provided life insurance coverage in the event of
their death ("single coverage") or in the event of the death of the executive
and his spouse ("second-to-die coverage"). At the end of fiscal 1994, the
coverage provided for certain of the executives was increased. As of February
28, 1994, the second-to-die coverage for Messrs. Alfiero, Arrison, Montague,
Cook and Byrne amounted to $10,000,000; $7,500,000; $8,000,000; $1,000,000 and
$1,000,000 respectively. As of February 28, 1994, Messrs. Alfiero and Arrison
also had single coverage of $40,000,000 and $4,500,000 respectively. The
"compensation" costs of such coverage under the calculation guidelines
established by the SEC are included in the Summary Compensation Table, as
discussed further in Notes B and G thereto. For financial reporting purposes,
the expense recognized by the Company for this coverage is nominal, since the
premium payments result in a substantially offsetting increase in the asset
recognized related to the cash surrender value of the policies. The
Compensation Committee believes such coverage to be appropriate, and in the
best interests of the Company and its stockholders.
During fiscal 1994, the Compensation Committee also considered an
analysis prepared by an executive compensation consultant retained by the
Compensation Committee, which showed that the absence of prior stock-based
incentives resulted in significant underpayment of Mr. Alfiero in comparison
to Chief Executive Officers at other companies, including certain of those
within the Peer Group. The study also showed that the restricted shares
granted to Mr. Alfiero would put his recent compensation at a level
approximately equal to the 75th percentile for the group of companies referred
to above. In light of the Company's outstanding stock market performance over
the prior five and ten year periods, and as an incentive for continued
employment and maximum efforts to increase stockholder value, the Compensation
Committee determined that it would be appropriate to grant restricted shares
to Mr. Alfiero that would result in total compensation at the level indicated.
The Compensation Committee has reviewed the Annual Compensation of Mr.
Alfiero in comparison to the amounts earned by the Chief Executive Officers of
the companies included in the Peer Group identified in the following
Comparative Performance Graphs. The Peer Group Companies are diversified
manufacturing companies with whom investment analysts have compared or grouped
the Company in the past. Based on this review, the Compensation Committee is
of the view that Mr. Alfiero's total base salary and bonus for fiscal 1994 is
at the average level of the Chief Executive Officers of the comparable Peer
Group companies. Such amount for Mr. Alfiero is viewed by the Compensation
Committee to be very reasonable in view of the outstanding performance of the
Company's stock over the last five years, placing it near the 95th percentile
in comparison to the companies in the Peer Group and representing a return
that is 175% greater than the average for the companies in the Peer Group.
During fiscal 1994, federal tax legislation (IRC 162(m)) was enacted to
limit publicly-held companies such as Mark IV from deducting for tax purposes
compensation paid to any named executive officer in excess of $1,000,000 in
certain situations. The tax deductibility of amounts paid by the Company to
its executive officers in fiscal 1994 will not be affected by IRC 162(m). It
is also anticipated that amounts paid by the Company to its executives in
fiscal 1995 will not be affected by IRC 162(m). As a result of the proposed
amendment identified for the 1992 Option Plan which establishes a limit on the
<PAGE>22
cumulative number of shares for which options could be granted to any one
named executive officer, IRC 162 (m) should not have a negative impact on the
Company's ability to deduct compensation amounts related to its 1992 Option
Plan. The Compensation Committee will continue to consider the impact of IRC
162 (m) as the related regulations are developed, and determine whether it
would be appropriate to modify any of its other compensation plans for the
Company's executive officers.
In summary, the Compensation Committee believes that the compensation
program for the Company's executive officers is appropriate and serves the
best interests of the Company and its stockholders.
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS OF
MARK IV INDUSTRIES, INC.
Joseph G. Donohoo
Herbert Roth, Jr.
COMPARATIVE PERFORMANCE GRAPHS
The following graphs compare the performance of the Company's Common
Stock to the performance of a group of companies considered to be peers of the
Company (the "Peer Group"), as well as the performance of the companies
included in the S&P MidCap 400 Index and the S&P 500 Index. The S&P MidCap
400 Index is an aggregate measure of the performance of the equity securities
of 400 companies with market capitalization in the range of $200 million to $5
billion, including the Common Stock of the Company, which makes it an
appropriate, broad-based market performance comparison for the Company. The
broader-based S&P 500 Index has also been included as a comparison since it
tends to be a very common overall measure of the stock market's performance
followed by institutional and individual investors. The graphs plot the
growth in value of an initial $100 investment, with dividends reinvested, over
the five year period ending on February 28, 1994, the end of the Company's
most recent fiscal year.
The Peer Group has been determined based upon a review of various
analysts reports which identify companies they believe to be similar to the
Company, as well as management's awareness of companies with similar
characteristics. The Peer Group's performance has been weighted based upon
the relative market capitalization of the Peer Group Companies over the five
year period. The Peer Group is made up of the following companies:
- - Ametek, Inc. - Harman International Industries
- - Carlisle Companies, Inc. - Imo Industries, Inc.
- - Dover Corporation - Johnson Controls, Inc.
- - Federal Mogul Corporation - MascoTech, Inc.(*)
- - Federal Signal Corporation - Parker Hannifin Corporation
- - First Brands Corporation - Rogers Corporation
- - Gencorp, Inc. - Teleflex, Inc.
- - M.A. Hanna Company - Trinova Corporation
(*) Known as Masco Industries, Inc. prior to its May 1993 name change.
<PAGE>23
COMPARATIVE CUMULATIVE TOTAL RETURNS
(FILED UNDER COVER OF FORM SE)
COMPENSATION OF DIRECTORS
Directors who are not also executive officers of the Company receive an
annual retainer for their services and participate in the Company's Bonus
Plan. The annual retainer paid to each of Messrs. Donohoo and Roth was
$25,000 in fiscal 1994. The Company also made incentive awards under its
Bonus Plan of $25,000 each to Messrs. Donohoo and Roth in fiscal 1994.
Effective March 1994, the annual retainer for each of Messrs. Roth and Donohoo
was increased to $30,000. Directors who are also executive officers of the
Company do not receive any additional compensation for their services as
Directors. Directors do not receive any additional compensation for their
services as a member of any committee of the Board of Directors.
Effective December 16, 1992, the Company adopted a Non-Qualified
Deferred Compensation Plan for Non-Employee Directors of the Company (the
"Directors' Deferred Compensation Plan"). The Directors' Deferred
Compensation Plan allows the non-employee Directors of the Company to elect to
defer receipt of up to 100% of their bonus for a pre-determined, fixed period
of time. In March 1994, such plan was amended to enable participants to defer
up to 100% of their annual retainer. The earnings on such deferred amounts
are equal to the greater of the cumulative investment returns which would be
realized if the Director's account was simultaneously invested in the
Company's Common Stock and a savings account bearing interest at a rate equal
to 120% of the Applicable Federal Rate.
SECTION 16 COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10%
of a registered class of the Company's equity securities, to file with the SEC
and the New York Stock Exchange initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the
Company. Officers, directors and greater than 10% shareholders are required
by SEC regulation to furnish the Company with copies of all Section 16(a)
forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were complied with
during the fiscal year ended February 28, 1994, with the exception of one
report for Mr. Arrison related to the sale by an affiliate of 3,000 shares of
the Company's Common Stock in February 1994, which required report was
inadvertently filed late.
<PAGE>24
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of May 10, 1994 (except as
otherwise noted) with respect to all stockholders known by the Company to be
the beneficial owners of more than 5% of its outstanding Common Stock, each
Director, each Executive Officer named in the Summary Compensation Table, and
all Executive Officers and Directors as a group.
Number of Percent
Name Shares(1) of Class
---- --------- --------
Sal H. Alfiero ................. 4,383,651 (2) 10.3%
FMR Corporation................. 5,292,196 (3) 12.0%
Tiger Management Corporation.... 4,079,864 (4) 9.5%
Clement R. Arrison.............. 1,930,130 (5) 4.5%
Gerald S. Lippes................ 1,752,534 (6) 4.1%
Joseph G. Donohoo............... 39,032 (7) *
Herbert Roth, Jr................ 24,587 *
William P. Montague............. 810,909 (8) 1.9 %
Frederic L. Cook................ 55,454 (9) *
John J. Byrne................... 60,656 (10) *
All Executive Officers and
Directors as a Group
(9 persons).................... 9,098,820 (11) 21.3%
______________
* Less than 1%
(1) Except as otherwise indicated in the following footnotes, each person
listed in the table has both sole voting and sole investment power with
respect to the number of shares of Common Stock set forth opposite his
name. Messrs. Alfiero, Arrison, Lippes, Montague, Cook and Byrne, each
of whom is an executive officer of the Company, have the right to direct
the Trustee of the Company's defined benefit pension plans (the "Plans")
with respect to the voting of the shares of the Company's Common Stock
owned by such Plans. As of May 10, 1994, the Plans owned 892,528 shares
of the Company's Common Stock (2.1% of the total outstanding). Such
executive officers are not participants in any of the Plans and disclaim
any beneficial ownership in the shares, and the shares have not been
included in the amounts listed in this table. All share amounts reflect
the impact of the 5% stock dividend distributed to stockholders of
record as of April 15, 1994.
(2) Includes 275,625 shares of Common Stock issued to Mr. Alfiero under the
Restricted Plan, as well as 12,830 shares of Common Stock allocated to
Mr. Alfiero's self-directed accounts in the Company's Retirement Plan
and the Company's 401(k) Savings Plan (which has no Company-match).
(3) Based on information set forth in a statement on Schedule 13-G filed
with the SEC by FMR Corporation ("FMR") on February 11, 1994, FMR held
on behalf of itself and its subsidiaries, Fidelity Management and
Research Company ("Fidelity"), and Fidelity Management Trust Company
("Fidelity Trust"), an aggregate of 5,292,196 shares of Common Stock,
which amount includes an aggregate of 1,564,700 shares of Common Stock
that FMR and its subsidiaries have the right to acquire through the
conversion into Common Stock of the Company's 6-1/4% Convertible
Debentures. FMR and its subsidiaries have the sole power to vote or
direct the voting of 83,470 shares. The power to vote or direct the
voting of the remaining shares represented resides with the respective
Boards of Trustees of the investment funds established and managed by
FMR and its subsidiaries. The stated business address of FMR, Fidelity
and Fidelity Trust is 82 Devonshire Street, Boston, MA 02109.
(4) Based on information set forth in a statement on Schedule 13-G filed
with the SEC by Tiger Management Corporation ("Tiger") on May 9, 1994.
Tiger, a corporation controlled by majority shareholder Julian H.
Robertson, Jr., beneficially owns an aggregate of 4,079,864 shares of
Common Stock. Excluded from these shares are 315,395 shares held on
behalf of Panther Management Company, L.P., whose sole general partner
is Panther Management Corporation of which Mr. Robertson is Chairman,
Director, and controlling shareholder. The stated business address of
Tiger is 101 Park Avenue, New York, NY 10178.
<PAGE>25
(5) Includes 27,563 shares of Common Stock issued to Mr. Arrison under the
Restricted Plan, as well as 11,025 shares of Common Stock issuable under
currently exercisable options granted pursuant to the 1992 Option Plan.
(6) Includes 16,538 shares of Common Stock issued to Mr. Lippes under the
Restricted Plan, as well as 6,891 shares of Common Stock issuable under
currently exercisable options granted pursuant to the 1992 Option Plan.
(7) Includes 7,531 shares of Common Stock held by The Gibson Group, Inc.
Pension Fund, of which Mr. Donohoo is Chairman of the Board.
(8) Includes 19,163 shares of Common Stock issued to Mr. Montague under the
Restricted Plan, as well as 6,891 shares of Common Stock issuable under
currently exercisable options granted pursuant to the Incentive Stock
Option Plans. Also includes 4,784 shares of Common Stock allocated to
Mr. Montague's self-directed accounts in the Company's Retirement Plan
and the Company's 401(k) Savings Plan (which has no Company-match).
(9) Includes 2,625 shares of Common Stock issued to Mr.Cook under the
Restricted Plan, as well as 11,507 shares of Common Stock issuable under
currently exercisable options granted pursuant to the Company's
Incentive Stock Option Plans.
(10) Includes 2,625 shares of Common Stock issued to Mr. Byrne under the
Restricted Plan, as well as 6,761 shares of Common Stock issuable under
currently exercisable options granted pursuant to the Company's
Incentive Stock Option Plans. Also includes 2,628 shares of Common
Stock allocated to Mr. Byrne's self-directed accounts in the Company's
Retirement Plan and the Company's 401(k) Savings Plan (which has no
Company-match).
(11) Includes 346,763 shares of Common Stock issued to the group under the
Restricted Plan, as well as 74,682 shares of Common Stock issuable under
currently exercisable options granted pursuant to the Company's
Incentive Stock Option Plans. Also includes 20,884 shares of Common
Stock allocated to the officers' self directed accounts in the Company's
Retirement Plan and the Company's 401(k) Savings Plan (which has no
Company-match).
<PAGE>26
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The firm of Lippes, Silverstein, Mathias & Wexler, of which Mr. Lippes,
Secretary, a Director and general counsel of the Company, is a partner, serves
as counsel to the Company. During fiscal 1994, such firm received
approximately $1,700,000 for legal services rendered to the Company.
OTHER MATTERS
The Company's management does not presently know of any matters to be
presented for consideration at the Annual Meeting other than the matters
described in the Notice of Annual Meeting. However, if other matters are
presented, the accompanying proxy confers upon the person or persons entitled
to vote the shares represented by the proxy, discretionary authority to vote
such shares in respect of any such other matter in accordance with their best
judgment.
OTHER INFORMATION
Coopers & Lybrand has been selected as the independent auditors for the
Company's current fiscal year and has been the Company's independent auditors
for its most recent fiscal year ended February 28, 1994. Representatives of
Coopers & Lybrand are expected to be present at the 1994 Annual Meeting of
Stockholders and will have the opportunity to make a statement, if they so
desire, and will be available to respond to appropriate questions.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS
SOLICITED, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K, FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1994, FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL
STATEMENTS AND THE SCHEDULES THERETO. Such written request should be directed
to Mark IV Industries, Inc., P.O. Box 810, Amherst, New York 14226-0810,
Attention: Investor Relations. Each such request must set forth a good faith
representation that, as of May 24, 1994, the person making the request was a
beneficial owner of securities entitled to vote at the Annual Meeting of
Stockholders.
1995 STOCKHOLDERS' PROPOSALS
Proposals of stockholders intended to be presented at the 1995 Annual
Meeting must be received by the Company by February 9, 1995 to be considered
for inclusion in the Company's Proxy Statement and form of proxy relating to
that meeting.
The accompanying Notice and this Proxy Statement are sent by order of
the Board of Directors.
GERALD S. LIPPES
Secretary
Dated: May 31, 1994
_____________________________________________________________________________
STOCKHOLDERS ARE URGED TO EXECUTE THE ACCOMPANYING PROXY AND RETURN IT
PROMPTLY IN THE ACCOMPANYING ENVELOPE, WHETHER OR NOT THEY EXPECT TO ATTEND
THE MEETING. STOCKHOLDERS MAY NEVERTHELESS VOTE IN PERSON IF THEY DO ATTEND.
<PAGE>27
P R O X Y
MARK IV INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JULY 20, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints SAL H. ALFIERO, CLEMENT R. ARRISON and
GERALD S. LIPPES and each or any of them, attorneys and proxies, with full
power of substitution, to vote at the Annual Meeting of Stockholders of MARK
IV INDUSTRIES, INC. to be held at the Buffalo Marriott, 1340 Millersport
Highway, Amherst, New York, 14226, on Wednesday, July 20, 1994 at 11:00 A.M.
local time, and any adjournment(s) thereof revoking all previous proxies, with
all powers the undersigned would possess if present, to act upon the following
matters and upon such other business as may properly come before the meeting
or any adjournment(s) thereof.
1. For Class I Director - Joseph G. Donohoo
__ FOR __ WITHHOLD AUTHORITY
2. Approval of Amendment and Restatement of the Mark IV Industries, Inc.
1992 Restricted Stock Plan Effective March 30, 1994.
__ FOR __ AGAINST __ ABSTAIN
3. Approval of Amendment and Restatement of the Mark IV Industries, Inc.
and Subsidiaries 1992 Incentive Stock Option Plan Effective March 30,
1994.
__ FOR __ AGAINST __ ABSTAIN
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEE AND PROPOSAL
LISTED ABOVE.
Dated:_______________________, 1994
____________________________________
Signature
____________________________________
Signature if held jointly
Please sign exactly as name appears. When
shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such.
If a corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person. PLEASE MARK, SIGN,
DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
<PAGE>28
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. Purposes. 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
<PAGE>29
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.
<PAGE>30
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
<PAGE>31
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
<PAGE>32
(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.
<PAGE>33
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.
<PAGE>34
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.
<PAGE>35
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: /s/ Richard L. Grenolds
-----------------------
Vice President and
Chief Accounting Officer
<PAGE>36
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:
<PAGE>37
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
<PAGE>38
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
<PAGE>39
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:
<PAGE>40
(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
<PAGE>41
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
<PAGE>42
(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.
<PAGE>43
(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.
<PAGE>44
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.
<PAGE>45
(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.
<PAGE>46
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: /s/ Richard L. Grenolds
-----------------------
Vice President and
Chief Accounting Officer
