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 Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
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.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
<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 29, 1996
_____________________________________________________________________________
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 Monday, July 29, 1996, at 11:00 a.m., Eastern Daylight Savings Time, for
the following purposes:
1. To elect two Class II Directors to hold office until the 1999
Annual Meeting and until a successor has been elected and
qualified.
2. To consider and take action upon a proposed amendment to the
Company's Certificate of Incorporation to increase the authorized
shares of the Company's Common Stock, par value $.01 per share,
from 100,000,000 to 200,000,000.
3. To consider and take action upon the proposed Mark IV Industries,
Inc. 1996 Incentive Stock Option Plan.
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 June 3, 1996,
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: June 5, 1996
<PAGE>2
MARK IV INDUSTRIES, INC.
501 John James Audubon Parkway
P.O. Box 810
Amherst, New York 14226-0810
_______________________________
PROXY STATEMENT
This 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 Monday, July
29, 1996, at 11:00 a.m., Eastern Daylight Savings Time, and at any adjournment
or adjournments thereof. The close of business on June 3, 1996, 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 14, 1996, the Company
had outstanding 63,043,877 shares of Common Stock, the holders of which are
entitled to one vote per share. 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. 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 12, 1996.
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.
<PAGE>3
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 Directors. Approval of the proposed amendment to the Company's
Certificate of Incorporation to increase the authorized shares of the
Company's Common Stock and the proposed Mark IV Industries, Inc. 1996
Incentive Stock Option Plan (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
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 Directors of the persons named under
the caption "Election of Directors" 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 Directors, 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 Directors) 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 Directors 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.
<PAGE>4
ELECTION OF DIRECTORS
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 six members: William P.
Montague (elected by the Board of Directors effective March 1, 1996) and
Joseph G. Donohoo, Class I Directors whose terms expire in 1997; Gerald S.
Lippes and Herbert Roth, Jr., Class II Directors whose terms expire in 1998;
and Sal H. Alfiero and Clement R. Arrison, Class III Directors whose terms
expire in 1996. At the Annual Meeting of Stockholders in 1996, two Class III
Directors shall be elected to hold office for a term expiring in 1999. Sal H.
Alfiero and Clement R. Arrison have been nominated by the Board of Directors
for election as such Class III Directors. The Directors 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 Directors.
Unless instructions to the contrary are received, it is intended that
the shares represented by proxies will be voted for the election of Sal H.
Alfiero and Clement R. Arrison who are presently Directors, and have been
previously elected by stockholders. If Messrs. Alfiero and Arrison 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
persons as the Board of Directors shall designate. The Board of Directors has
no reason to believe that Messrs. Alfiero and Arrison will be unable or
unwilling to serve if elected to office.
The following information is provided concerning the Directors and the
nominees for election as Class III Directors:
SAL H. ALFIERO, age 58, 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. He holds a B.S. degree in Aeronautical
Engineering from Rensselaer Polytechnic Institute and holds an M.B.A. degree
from the Harvard Graduate School of Business Administration.
WILLIAM P. MONTAGUE, age 49, has been employed by the Company since
April 1972 and was elected President and a Director effective March 1, 1996.
He was previously a Vice President of the Company since May 1974 and was
elected Executive Vice President and Chief Financial Officer in March 1986.
He holds both 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 Gilbraltar
Steel Corporation and International Imaging Materials, Inc.
GERALD S. LIPPES, age 56, 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 LLP, Buffalo, New York. Mr.
Lippes is also a Director of Gibraltar Steel Corporation.
<PAGE>5
CLEMENT R. ARRISON, age 66, has been a Director of the Company since
November 1976. He was President of the Company from 1976 until his retirement
effective March 1, 1996. Mr. Arrison continues to serve as a consultant to
the Company. Mr. Arrison holds a B.S. degree in engineering from the
University of Michigan and holds a professional engineering license.
HERBERT ROTH, JR., age 67, 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.; and Phoenix
Total Return Fund, Inc., and is a Trustee of Phoenix Series Fund, Phoenix
Multi Portfolio Fund, and The Big Edge Series Fund.
JOSEPH G. DONOHOO, age 77, has been a Director of the Company since its
incorporation. He is Chairman of the Board of The Gibson Group, Inc.
("Gibson"), a marketer of paper board, and Chairman of the Board of Clinch
River Corporation, a manufacturer of semi-chemical corrugating material.
Clinch River is a majority owned subsidiary of Gibson.
The Board of Directors recommends a vote FOR the election of Messrs.
Alfiero and Arrison as Class III Directors.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the fiscal year ended February 29, 1996, the Board of Directors
held a total of 13 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 two meetings during fiscal
1996.
<PAGE>6
Compensation Committee
The Compensation Committee, which consists of Messrs. Donohoo and Roth,
held four meetings during fiscal 1996. 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.
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 *........ 58 Chairman of the Board
and Chief Executive Officer 1996
William P. Montague..... 49 President and Director 1997
Gerald S. Lippes........ 56 Secretary and Director 1998
Clement R. Arrison *.... 66 Director 1996
Joseph G. Donohoo....... 77 Director 1997
Herbert Roth, Jr........ 67 Director 1998
Bruce A. McNiel......... 47 Senior Vice President --
Kurt J. Johansson....... 54 Senior Vice President --
Frederic L. Cook........ 49 Senior Vice President-
Administration --
John J. Byrne........... 47 Vice President and Chief
Financial Officer --
Richard L. Grenolds..... 46 Vice President and Chief
Accounting Officer --
Douglas J. Fiegel....... 48 Vice President, Financial
Control & Reporting --
Patricia A. Richert..... 45 Vice President and Chief
Information Officer --
* Nominee for Class III Director at fiscal 1996 Annual Meeting
<PAGE>7
Recent business experience of the Directors is set forth above under
"Election of Directors." Recent business experience of the executive officers
who are not also Directors is as follows:
BRUCE A. McNIEL was elected Senior Vice President of the Company in
December 1994 and is President of the Company's Dayco Products, Inc. ("Dayco")
subsidiary, headquartered in Miamisburg, Ohio. Mr. McNiel has worldwide
responsibility for the Company's Industrial Division. Mr. McNiel has been
employed by Dayco since 1977, and prior to his appointment as President of
Dayco in March 1993, served in numerous executive positions, including
Executive Vice President of Sales and Marketing, and Senior Vice President of
Finance and Administration. He holds a B.S. degree in accounting from Wright
State University and an M.B.A. degree from the University of Dayton.
KURT J. JOHANSSON was elected Senior Vice President of the Company in
December 1994 and is President of the Company's Dayco Europe AB subsidiary,
headquartered in Solvesborg, Sweden, as well as Executive Vice President of
Dayco. Mr. Johansson has worldwide responsibility for the Company's
Automotive Division. Mr. Johansson has been with Dayco Europe since October
1990. Mr. Johansson studied at the School of Economics and Business
Administration in Stockholm, Sweden, as well as at the Technical University in
Gothenburg, Sweden.
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 L.L.P., 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
was elected Vice President and Chief Financial Officer effective March 1,
1996. He has been a Vice President since March 1986 and 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 L.L.P.,
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.
DOUGLAS J. FIEGEL was elected Vice President, Financial Control and
Reporting in 1990. Prior to that he was the Company's Controller since
joining the Company in 1986. He holds a B.B.A. degree in accounting from
Niagara University and is a certified public accountant.
PATRICIA A. RICHERT has been employed by the Company since 1973, and has
been Vice President and Chief Information Officer since 1990. In August 1994
she was also appointed Dayco's Vice President of Information Technology. She
holds a B.S. degree in accounting from the University of Buffalo.
<PAGE>8
<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 29, 1996. Comparative amounts for fiscal 1994 related to Messrs. McNiel and Johansson have been excluded since
they were not executive officers during that year.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Awards Payouts
Restricted Securities All Other
Name and Principal Fiscal Other Annual Stock Underlying LTIP Compensation
Position Year Salary (A) Bonus(A) Compensation(B) Awards (C) Options (D) Payouts(E) (F) (G) (H)
- ------------------ ------ --------- ------ ------------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sal H. Alfiero -
Chairman of the Board 1996 $521,000 $521,000 $ 60,631 - 52,500 - $338,072
and Chief Executive 1995 $462,166 $462,166 $ 58,136 - 113,006 - $361,576
Officer 1994 $406,000 $400,000 $ 25,037 $5,000,000 - - $253,059
Clement R. Arrison -
President (until 1996 $520,000 $520,000 $ 13,602 - - - $147,706
retirement on 1995 $461,666 $461,666 $ 14,934 - 62,291 - $125,416
March 1, 1996) and 1994 $400,000 $400,000 $ 2,183 $ 500,000 - - $ 90,693
Director
William P. Montague -
Executive Vice President
and Chief Financial
Officer (President 1996 $400,000 $400,000 $ 1,526 - 36,750 - $120,131
and Director 1995 $341,667 $341,667 $ 1,401 $ 44,678 39,138 - $103,042
effective March 1, 1994 $300,000 $300,000 $ 367 $ 300,000 - - $ 72,928
1996)
<PAGE>9
Annual Compensation Long-Term Compensation
Awards Payouts
Restricted Securities All Other
Name and Principal Fiscal Other Annual Stock Underlying LTIP Compensation
Position Year Salary (A) Bonus(A) Compensation(B) Awards (C) Options (D) Payouts(E) (F) (G) (H)
- ------------------ ------ ---------- -------- -------------- -------- ------ ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bruce A. McNiel - 1996 $300,000 $187,500 - - 36,750 - $ 68,850
Senior Vice President 1995 $216,667 $158,167 - $ 44,678 33,371 $17,398 $ 52,190
Kurt J. Johansson - 1996 $300,000 $187,500 - - 36,750 - $ 68,850
Senior Vice President 1995 $216,667 $158,167 - $ 44,678 33,371 $17,398 $ 52,190
<FN>
Notes To Summary Compensation Table
(A) The Company's Non-Qualified Deferred Compensation Arrangements (as defined in Note G below) enable
participants to defer up to 100% of their current salary and/or cash bonus to be hypothetically
invested for a pre-determined fixed period of time. 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 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). Dividends on the Company's Common Stock are paid currently
to the holders of the restricted shares. At the end of fiscal 1996, the cumulative number of
restricted shares of the Company's Common Stock, and related fair market value, held by Messrs.
Alfiero, Montague, McNiel and Johansson were 303,876 shares - $5,788,843; 21,126 shares - $402,450;
2,894 shares - $55,127; and 2,894 shares - $55,127 respectively. As a result of Mr. Arrison's
retirement effective March 1, 1996, the restrictions lapsed on his 30,387 restricted shares, which had
a related market value of $578,872 as of that date.
(D) All amounts have been adjusted to reflect the effects of the Company's 5% stock dividend issued in
April 1996.
<PAGE>10
(E) As discussed in the Long-Term Incentive Plan ("LTIP") table, these payments are contingent upon
meeting certain operating goals in subsequent years, and are subject to partial or total repayment by
the individuals if such goals are not achieved.
(F) The Company's contributions to qualified defined contribution plans for Messrs. Alfiero, Arrison,
Montague and McNiel in fiscal 1996 amounted to $4,377; $6,000; $6,000; and $8,850, respectively. All
such amounts have been included in the "All Other Compensation" column.
(G) As a supplement to the Company's qualified defined contribution plans, the named executive officers
participate in one of the Company's two non-qualified deferred compensation plans ("Deferred
Compensation Arrangements"). Amounts allocated in fiscal 1996 under the terms of the Deferred
Compensation Arrangements amounted to $100,872; $97,519; $71,905; $60,000; and $68,850 for Messrs.
Alfiero, Arrison, Montague, McNiel and Johansson, 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 Arrangements are equal to the greater of the cumulative investment returns which
would be realized if the executive officer's account was 100% invested in the Company's Common Stock
("equity based earnings") or in an interest bearing account ("interest based earnings"). The earnings
amounts are not deemed to be compensation under the rules of the Securities and Exchange Commission
(the "SEC"), and therefore are not included in the Summary Compensation Table.
(H) Includes amounts deemed to be compensation under the rules of the SEC related to the present value of
the premium payments made by the Company for the benefit of the named executive officers under the
Company's split-dollar life insurance program. Such amounts in fiscal 1996 amounted to $232,823;
$44,187; and $42,226 for Messrs. Alfiero, Arrison, and Montague, respectively. The premium payments
will ultimately be recovered by the Company to the extent of the cash surrender value of the policies.
</FN>
</TABLE>
<PAGE>11
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
The following table sets forth information with respect to the named executive officers concerning
options granted to each of them during fiscal 1996. All amounts have been adjusted to reflect the effects
of the 5% stock dividend issued in April 1996.
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price Appreciation
Individual Grants For Option Term
Number of % of Total
Securities Options
Underlying Granted to
Options Employees in Exercise Price Expiration
Name Granted Fiscal Year (A) ($/Share) Date 5% (B) 10% (B)
- --------------- ------- ------------- -------------- --------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Sal H. Alfiero 52,500 7.74% $17.14 12/19/05 $ 566,006 $ 1,434,361
William P. Montague 36,750 5.42% $17.14 12/19/05 $ 396,204 $ 1,004,053
Bruce A. McNiel 26,250 3.87% $17.14 12/19/05 $ 283,003 $ 717,180
10,500 1.55% $19.17 6/01/05 $ 126,608 $ 320,848
Kurt J. Johansson 26,250 3.87% $17.14 12/19/05 $ 283,003 $ 717,180
10,500 1.55% $19.17 6/01/05 $ 126,608 $ 320,848
All Shareholders (C) N/A N/A N/A N/A $754,894,350 $1,913,039,100
<FN>
(A) 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, or upon a Change in Control of the Company.
(B) Represents the potential appreciation of the options, determined by assuming an annual compounded rate of
appreciation of 5% and 10% per year over the ten-year term of the grants. Such assumed annual rates of
appreciation of 5% and 10% would result in the price of the Company's stock increasing 62.9% and 159.4%,
respectively, over a ten-year time frame. The amounts set forth are not intended to forecast future
appreciation, if any, of the stock price.
(C) Represents the potential appreciation for all shareholders over a ten-year period, assuming 63,000,000
shares outstanding and a closing market price of $19.05 per share at February 29, 1996, and assuming the
same annual rates of appreciation of 5% and 10% over the subsequent ten-year period.<PAGE>
</FN>
</TABLE>
<PAGE>12
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
The following table sets forth information with respect to the named executive officers concerning the
exercise of options during fiscal 1996 and unexercised options held at the end of fiscal 1996. All amounts
have been adjusted to reflect the effects of the 5% stock dividend issued in April 1996.
Value of Securities
Number of Securities Underlying
Underlying Unexercised In
Shares Unexercised Options The Money Options
Acquired At Fiscal Year-End At Fiscal Year-End (A)
On Value
Name Exercise(#) Realized Exercisable Unexercisable Exercisable Unexercisable
- -------------- ------------ ------- ---------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sal H. Alfiero -- -- 28,251 137,254 $ 80,210 $384,381
Clement R. Arrison (B) -- -- 52,036 58,873 $306,867 $256,189
William P. Montague -- -- 32,573 73,700 $187,660 $248,359
Bruce A. McNiel -- -- 38,872 62,371 $452,408 $161,395
Kurt J. Johansson -- -- 19,315 68,006 $106,461 $173,872
____________________
<FN>
(A) Represents the difference between the closing market value of the Company's Common Stock on February
29, 1996 ($19.05) and the exercise price of such options.
(B) As a result of Mr. Arrison's retirement effective March 1, 1996, all of his unexercised options became
100% exercisable, and were exercised shortly thereafter.
</FN>
</TABLE>
<PAGE>13
LONG-TERM INCENTIVE PLAN -- AWARDS IN LAST FISCAL YEAR
The following table presents the contingent awards made to the named
executive officers who participate in the Senior Executive Short-Term
Incentive Plan of the Company's Dayco subsidiary (the "Dayco Incentive Plan").
If the participant's employment is terminated during the performance period
for any reason other than disability, retirement or death, or upon a Change in
Control of the Company (as defined), the award is generally canceled. The
award is determined based upon the degree to which inventory levels are
maintained in comparison to certain pre-determined relationships to sales for
the fiscal year, and is calculated as a percentage of the participant's
current cash bonus award for the fiscal year. A contingent payment of the
award is made 1/3 in the year earned, and 1/3 in each of the two subsequent
years, as long as the performance objective is maintained in each subsequent
year.
Performance or Estimated Future
Other Period Payouts Under Non-Stock
Until Maturation Price-Based Plans (A)
Name of Payout Target
- -------------- --------------- ----------------------
Bruce A. McNiel Fiscal 1995-1997 $52,195
Kurt J. Johansson Fiscal 1995-1997 $52,195
(A) To the extent contingent payments have been accrued, but not paid to the
participant, such balance accrues earnings in the same manner as
discussed in Note G to the Summary Compensation Table. The amounts
listed in this column do not include any of such related earnings. The
LTIP Payouts column in the Summary Compensation Table includes 1/3 of
this payout which was made in fiscal 1995. The performance objective
was not maintained in fiscal 1996; therefore, no payouts were made for
the current year.
<PAGE>14
EMPLOYMENT AGREEMENTS
The Company has employment agreements ("Employment Agreements") with
each of the named executive officers. The Employment Agreements for Messrs.
Alfiero and Montague provide for an initial term of five years, which is
automatically extended for an additional 12-month period on each annual
anniversary date. The Employment Agreements for Messrs. McNiel and Johansson
provide for an initial term of three years, which is automatically extended
annually for an additional 12-month term after the initial term. An executive
officer who is a party to an Employment Agreement is eligible to receive cash
bonuses as part of the Company's bonus plans and participate in the Company's
various other benefit and incentive plans. The Employment Agreements do not
provide for a minimum bonus amount. The Employment Agreements provide for the
payment of base salaries of $520,000; $400,000; $300,000 and $300,000 for
Messrs. Alfiero, Montague, McNiel, and Johansson, respectively, which amounts
can be increased at the discretion of the Company. The base salary, cash
bonuses and other benefits provided for under the Employment Agreements are
included in calculating the total cash compensation paid to the various
executives and other information as presented in the Summary Compensation
Table.
The Employment Agreements for Messrs. Alfiero and Montague provide that
in the event the Company terminates the executive prior to age 61 for any
reason other than Cause (as defined), such executive shall be entitled to
receive a lump sum severance benefit equal to the greater of two and one-half
times the sum of such executive's base salary plus bonus earned for the
12-month period immediately preceding the date of his termination, or five
times the executive's then current base salary, in each case including amounts
deferred at the option of the executive. In the event of termination after
the executive attains age 61, such severance benefit is reduced by 20% per
year, beginning at age 61, so that no severance benefit is paid if the
executive is terminated at age 65. The Employment Agreements for Messrs.
McNiel and Johansson provide that in the event of termination, the executive
shall be entitled to receive a benefit equal to one and one-half times his
base salary, payable over an 18-month period, plus a pro rata allocation of
the bonus the executive would have been entitled to receive for the fiscal
year had he not been terminated.
The Employment Agreements further provide for severance benefits upon a
"Change in Control" of the Company. The events that trigger a Change in
Control under the Employment Agreements include (i) certain consolidations or
mergers, (ii) certain sales or transfers of substantially all of the Company's
assets, (iii) the approval of the Company's shareholders of a plan of
dissolution or liquidation of the Company, (iv) the acquisition of 20% or more
of the Company's outstanding Common Stock by certain persons (other than the
Company's executive officers and directors, whether individually or as a
group) and (v) certain changes in the membership of the Company's Board of
Directors. If the executive's employment is terminated within three years of
a Change in Control, other than for Cause, he will be entitled to receive a
lump sum severance payment equal to three times the average of his total cash
compensation during the three-year period immediately preceding his
termination, plus medical and life insurance benefits for the rest of his
life. The Employment Agreements define such total cash compensation to
<PAGE>15
include amounts deferred at the option of the executive. The payments and
benefits payable in the event of a Change in Control are not subject to any
limitations that would prevent them from being considered "excess parachute
payments" subject to excise tax payments or corporate deduction disallowance
under the IRC. Therefore, such lump-sum severance payments could require
excise tax payments on the part of the executive, and deduction disallowance
on the part of the Company. In such instance, the impact of the excise tax
payments on the executive would be reimbursed to the executive by the Company,
including taxes the executive would incur on the gross-up itself.
In addition, upon a termination other than for Cause, or upon retirement
and eligibility to receive benefits under the Company's tax-qualified defined
contribution plan (the "Retirement Plan"), Messrs. Alfiero, Arrison, and
Montague will be entitled to receive from the Company an additional benefit
computed as if the Retirement Plan was not subject to limits imposed on
tax-qualified plans by the IRC or ERISA. Such amounts are included in the
amounts accrued for such executive officers under the Deferred Compensation
Arrangements, and included under the column entitled "All Other Compensation"
in the Summary Compensation Table.
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, the members of which 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 the Compensation
Committee deems relevant each year. In January 1995, the Compensation
Committee increased Mr. Alfiero's annual base salary by $70,000, giving
consideration to the period of time since his previous increase, their
assessment of his commitment to the Company to date, the Company's
consolidated earnings and stock market performance, comparisons of the
Company's performance to that of companies within its Peer Group (as
hereinafter defined), and the impact of the acquisition of Purolator Products,
Inc. ("Purolator") in November 1994. The Compensation Committee also
increased the annual base salaries of Messrs. Arrison and Montague as of the
same date, giving similar consideration to their assessment of the executives'
commitment and the Company's earnings and operating performance. Such
increases resulted in an annual rate of increase over the past five fiscal
years of slightly less than 10% per year for Messrs. Alfiero and Arrison, and
a lesser rate for Mr. Montague. As a part of the election of Messrs. McNiel
and Johansson as executive officers of the Company in December 1994, the
Compensation Committee established an annual base salary of $300,000 for each
of them. Such increased salaries for the named executive officers near the
end of fiscal 1995 were in effect for all of fiscal 1996.
<PAGE>16
Annual bonus awards are determined according to the terms of the
Company's Executive Bonus Plan (the "Bonus Plan"), which has been approved by
shareholders as "performance-based" in accordance with the rules of the IRC.
All of the Company's executive officers participate in this Bonus Plan, with
the exception of Messrs. McNiel and Johansson, who receive annual bonus awards
under the Dayco Incentive Plan. Under the Bonus Plan, each participating
executive officer has the opportunity to earn a bonus of up to 200% of his/her
base salary if the Company's earnings per share reach a specified target, as
established by the Compensation Committee. No bonus is payable unless the
Company achieves its projected earnings per share target. Further, no bonus
is payable if the target is projected to be less than the actual earnings
during the prior fiscal year. Under the bonus 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 200% of base salaries. If such bonus pool
does not reach the maximum amount of 200% of base salaries, the bonuses are
limited to the amount in the bonus pool, without regard to the relationship of
the actual percentage increase to the percentage increase set by the
Compensation Committee.
Under the terms of the Dayco Incentive Plan, participants are eligible
to earn a current bonus equal to a percentage of their base salaries, assuming
certain performance criteria are achieved for the operations under their
control. The bonus formula is keyed to the achievement of certain operating
profit (70% weighting) and cash flow (30% weighting) performance criteria.
Messrs. McNiel and Johansson are eligible to earn a cash bonus under this
formula up to a maximum of 83% of their base salary earned in the fiscal year.
The bonus is also impacted by an inventory management factor which can
increase, decrease, or eliminate, the operating profit/cash flow bonus
determination.
Under the terms of the Bonus Plan and the Dayco Incentive Plan, the
Compensation Committee does not have any authority to modify the bonus amounts
as computed by the bonus plan formulas. The Company exceeded its projected
earnings per share target for fiscal 1996; therefore, a bonus of 100% of the
base salary earned in fiscal 1996 was awarded to each of the participants in
the Bonus Plan, including Messrs. Alfiero, Arrison, and Montague. The
performance of the Dayco-related operations was such that Messrs. McNiel and
Johansson earned a current bonus of approximately 62.5% of their base salary
for fiscal 1996.
As a result of these incentive arrangements, nearly 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.
<PAGE>17
In fiscal 1996, 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 the fair market value of
the Common Stock at the date of grant. The Compensation Committee also
determined it appropriate to grant options to the other named executive
officers in fiscal 1996 to acquire 110,250 shares of the Company's Common
Stock. 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 the
market value of the Company's stock.
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 companies included in the Peer Group are
diversified manufacturing companies with whom investment analysts have
compared or grouped the Company. Based on this review, the Compensation
Committee is of the view that Mr. Alfiero's total base salary and bonus for
fiscal 1996 is near the 33rd percentile for all of the Chief Executive
Officers of the Peer Group companies. The Compensation Committee also
reviewed the Annual Compensation of all of the named executive officers of the
Company in comparison to the amounts earned by the named executive officers in
the Peer Group companies, and found the Company's total of such compensation
to be near the 42nd percentile on a comparable basis. Such amount for Mr.
Alfiero individually, and in total for the named executive officers as a
group, is viewed by the Compensation Committee to be appropriate in view of
the outstanding performance of the Company's stock over the last five years,
placing it ahead of the indicated performance of every company in the Peer
Group. Such performance represents a return that is nearly twice the average
for all of the Peer Group companies.
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 certain compensation paid to any named executive officer in excess of
$1,000,000 annually. The tax deductibility of amounts paid by the Company to
its executive officers through fiscal 1996 has not been affected by IRC
162(m), and it is anticipated that the deduction limitations imposed by IRC
162(m) will not significantly impact the Company for several years.
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.
<PAGE>18
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 ended on February 29, 1996, the end of the Company's most
recent fiscal year.
The Peer Group is made up of the following 12 companies:
- - Cooper Industries, Inc. - M.A. Hanna Company
- - Dana Corporation - Illinois Tool Works, Inc.
- - Dover Corporation - Johnson Controls, Inc.
- - Federal Mogul Corporation - MascoTech, Inc.
- - First Brands Corporation - Parker Hannifin Corporation
- - Gencorp, Inc. - Trinova Corporation
The Company's relative position in the Peer Group, based upon the
Company's performance as of February 29, 1996 and the most recently available
information for the other companies in the Peer Group, is as follows (dollars
in millions):
Peer Group
----------------------------------
Range Average
(Excluding (Excluding Mark IV
Mark IV Mark IV) Mark IV) Rank
--------- ------------ ----------- -------
Annual rate of growth
of an initial
investment over
the 5-year period 35.2% 6.8% to 23.6% 17.0% 1/13
Net Sales $2,089 $1,037 to $8,330 $3,516 7/13
Shareholders'
Equity $ 726 $ 35 to $1,924 $ 883 7/13
Total
Capitalization $1,368 $ 439 to $3,616 $1,613 7/13
CEO's Annual
Salary and
Bonus $ 1.0 $ .6 to $2.6 $ 1.3 9/13
Top-Five
Executives'
Annual Salaries
and Bonuses $ 3.3 $ 1.6 to $6.9 $ 3.3 7/13
<PAGE>19
The Peer Group's performance which is presented in the following graph has
been weighted based upon the relative market capitalization of the Peer Group
companies over the same five-year period ended February 29, 1996.
(Copy of Graph Sent to Charles A. Sjoquist, Branch Chief, by Overnight Mail).<PAGE>
<PAGE>20
APPROVAL OF PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED CAPITAL STOCK
The Company is presently authorized to issue 110,000,000 shares of
capital stock, of which 100,000,000 shares are Common Stock, $.01 par value
per share, and 10,000,000 shares are Preferred Stock, $.01 par value per
share. The Company has not issued any of the Preferred Stock.
During the past five years the Company has issued the equivalent of
approximately 49,400,000 shares of its Common Stock, with (i) 17,000,000
shares issued through public and private equity offerings; (ii) 17,300,000
shares issued through the conversion of outstanding convertible debentures;
(iii) 1,400,000 shares issued through the Company's incentive stock option and
restricted stock plans; and (iv) 13,700,000 shares issued through six 5% stock
dividends and one three for two stock split. After considering the
requirements for existing and proposed authorized shares for the purpose of
granting incentive stock options and restricted stock grants, the Company has
approximately 31,600,000 remaining authorized unreserved shares of Common
Stock. Therefore, the Board of Directors believes it is appropriate to have
additional authorized shares of Common Stock available. Accordingly, the
Board of Directors has recommended that the Stockholders approve an amendment
to Article Fourth of the Certificate of Incorporation of the Company to
increase the number of authorized shares of Common Stock from 100,000,000
shares, $.01 par value per share to 200,000,000 shares, $.01 par value per
share. The proposed amendment would increase the number of authorized
unreserved shares of Common Stock available for future issuance to
approximately 131,600,000.
The Board of Directors believes that it is necessary to have the
additional authorized shares of Common Stock available for possible future
stock dividends, stock splits, employee benefit plans, financing and
acquisition transactions, and other general corporate purposes. No further
action or authorization by the stockholders would be necessary prior to the
issuance of the additional shares authorized by the proposed amendment unless
required in a particular transaction by applicable provision of the Company's
Certificate of Incorporation, by law, or by the regulations of a stock
exchange or other regulatory agency. While increasing the number of such
authorized shares will not affect stockholders' present percentage ownership
of the Common Stock of the Company, any issuance of additional shares may
occur at such times and under such conditions as may result in a dilution of
such percentage ownership. The Company's stockholders do not have pre-emptive
or other rights to subscribe for any of the Company's securities, and they
will not have any such rights with respect to the additional shares of Common
Stock proposed to be authorized.
The increase in authorized Common Stock might be considered as having
the effect of discouraging any attempt by another person or entity, through
the acquisition of a substantial number of shares of Common Stock, to acquire
control of the Company with a view to imposing a merger, sale of all or any
portion of the Company's assets or similar transactions, since the issuance of
any shares could be used to dilute the stock ownership of a person or entity
seeking to obtain a control of the Company.
<PAGE>21
The following is the text of the first paragraph of Article Fourth of
the Certificate of Incorporation of the Company as proposed to be amended:
FOURTH: The total number of shares of stock which the corporation shall
have authority to issue is TWO HUNDRED TEN MILLION (210,000,000),
consisting of TEN MILLION (10,000,000) shares of Preferred Stock, all of
a par value of One Cent (.01) each, and TWO HUNDRED MILLION
(200,000,000) shares of Common Stock, all of a par value of One Cent
($.01) each.
The affirmative vote of the holders of at least a majority of the
outstanding shares of Common Stock is required for the adoption of the
proposed amendment. The Board of Directors believes that the increase in the
authorized number of shares of Common Stock will give the Company the desired
flexibility to meet possible future developments and opportunities and to
provide for additional financing. Accordingly, the Board of Directors
recommends a vote FOR adoption of the proposed amendment.
APPROVAL OF MARK IV INDUSTRIES, INC.
1996 INCENTIVE STOCK OPTION PLAN
The principal features of the Mark IV Industries, Inc. 1996 Incentive
Stock Option Plan (the "1996 Option Plan") are described below. The
description is qualified by reference to the complete text of the 1996 Option
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 12, 1996. No options have been granted
yet under the 1996 Option Plan.
On April 24, 1996, subject to approval by stockholders at the 1996
Annual Meeting, the Board of Directors adopted the 1996 Option Plan, and
allocated 3,000,000 shares of the Company's authorized Common Stock to be used
for the granting of options thereunder. The 1996 Option Plan provides that
the Compensation Committee may grant to officers and other 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. Such grants would be made 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. The options have a
maximum duration of 10 years. Options may be exercised as determined by the
Compensation Committee.
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 of the
assets of the Company, or a "Change in Control" (as defined in the 1996 Option
Plan). Immediate vesting is also 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. The 1996 Option Plan limits the number of shares
<PAGE>22
for which options may be granted to any named executive officer or other
employees of the Company under the 1996 Option Plan to 300,000 shares (subject
to certain anti-dilutive adjustments). This limit preserves the Company's tax
deduction for any subsequent compensation amount related to the exercise of
options under the 1996 Option Plan in accordance with IRC 162(m). The 1996
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 may be made either (i) by cash or certified or bank check payable
to the order of the Company; or (ii) 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; or
(iii) without cash by the Company's retention of shares of the Company's
Common Stock having an aggregate fair market value equal to the total exercise
price payable for the shares of the Company's Common Stock (including retained
shares) to be issued upon the exercise of the options. Options granted under
the 1996 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 1996 Option Plan) also terminate 90 days after the
consummation of a disposition of all or substantially all of the 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 1996 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.
The 1996 Option Plan terminates on April 23, 2006. The Board of
Directors may at any time suspend, amend or terminate the 1996 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 1996 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.
<PAGE>23
The Federal income tax consequences to an employee who receives an
option under the 1996 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, (i) 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; (ii) the employee's tax
basis in such newly issued shares will be the same as the tax basis in the
tendered shares; and (iii) 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, or requests the Company to retain
shares to be issued under the option being exercised, to pay all or part of
the exercise price under an option, such tender will constitute a disposition
of such 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.
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.
<PAGE>24
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.
The affirmative vote of the holders of at least a majority of the shares
of Common Stock represented at the 1996 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 1996 Option Plan.
The Compensation Committee of the Board of Directors believes that the 1996
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
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 1996 Option Plan.
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
which is separate from the Bonus Plan in which the Company's executive
officers participate. The annual retainer paid to each of Messrs. Donohoo and
Roth was $34,500 in fiscal 1996. The Company also made incentive awards under
its bonus plan of $34,500 each to Messrs. Donohoo and Roth in fiscal 1996.
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.
The Company's Non-Qualified Deferred Compensation Plan for Non-Employee
Directors of the Company (the "Directors' Deferred Compensation Plan") allows
the non-employee Directors of the Company to elect to defer receipt of up to
100% of their annual retainer and/or bonus for a pre-determined, fixed period
of time. 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 regulations 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 29, 1996.
<PAGE>26
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of April 30, 1996 (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 Named Executive Officer in the Summary Compensation Table, and
all Executive Officers and Directors as a group. All share amounts and
percents reflect the impact of the 5% stock dividend issued in April 1996.
Number of Percent
Name Shares(1) of Class
Sal H. Alfiero ................. 4,582,991 (2) 7.3%
FMR Corporation................. 6,836,474 (3) 10.9%
Tiger Management Corporation.... 6,081,181 (4) 9.7%
Clement R. Arrison.............. 1,847,370 (5) 2.9%
Gerald S. Lippes................ 1,774,748 (6) 2.8%
William P. Montague............. 849,814 (7) 1.3%
Joseph G. Donohoo............... 26,229 (8) *
Herbert Roth, Jr................ 26,003 *
Bruce A. McNiel................. 56,612 (9) *
Kurt J. Johansson............... 23,661 (10) *
All Executive Officers and
Directors as a Group
(13 persons)................... 9,442,311 (11) 14.9%
______________
* 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, Lippes, and Montague, each of whom is an
executive officer of the Company, have the right to direct the Trustee
of the Company's defined benefit pension plan (the "Plan") with respect
to the voting of and investment in the shares of the Company's Common
Stock owned by such Plan. As of April 30, 1996, the Plans owned
1,588,785 shares of the Company's Common Stock (2.5% of the total
outstanding). Such executive officers are not participants in the Plan
and disclaim any beneficial ownership in the shares, and the shares have
not been included in the amounts listed in this table.
(2) Includes 303,876 shares of Common Stock issued to Mr. Alfiero under the
Mark IV Industries, Inc. 1992 Restricted Stock Plan (the "Restricted
Plan"), as well as 42,722 shares of Common Stock issuable under
currently exercisable options granted under the Mark IV Industries, Inc.
and Subsidiaries 1992 Incentive Stock Option Plan (the "1992 Option
Plan"). Also includes 15,154 shares of Common Stock allocated to Mr.
Alfiero's self-directed accounts in the Company's retirement and 401(k)
savings plan. Does not include 15,276 shares of Common Stock owned by
the Alfiero Family Charitable Foundation of which Mr. Alfiero is one of
four directors and for which he disclaims beneficial ownership.
<PAGE>27
(3) Based on information set forth in a statement on Schedule 13-G filed
with the SEC by FMR Corporation ("FMR") on February 14, 1996, 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 6,836,474 shares (adjusted for the
5% stock dividend issued April 26, 1996) of Common Stock. The power to
vote or direct the voting of such shares 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 April 9, 1996.
Tiger, a corporation controlled by majority shareholder Julian H.
Robertson, Jr., beneficially owns an aggregate of 6,081,181 shares
(adjusted for the 5% stock dividend issued April 26, 1996) of Common
Stock. Excluded from these shares are 306,703 shares (adjusted for the
5% stock dividend issued April 26, 1996) held on behalf of Panther
Partners L.P., an investment corporation controlled by Mr. Robertson.
The stated business address of Tiger is 101 Park Avenue, New York, NY
10178.
(5) Does not include 54,218 shares of Common Stock owned by the Arrison
Family Charitable Foundation of which Mr. Arrison is one of four
directors and for which he disclaims beneficial ownership.
(6) Includes 18,233 shares of Common Stock issued to Mr. Lippes under the
Restricted Plan, as well as 31,336 shares of Common Stock issuable under
currently exercisable options granted pursuant to the 1992 Option Plan.
Does not include 48,755 shares of Common Stock owned by the Lippes
Family Charitable Foundation of which Mr. Lippes is one of four
directors and for which he disclaims beneficial ownership.
(7) Includes 21,127 shares of Common Stock issued to Mr. Montague under the
Restricted Plan, as well as 35,470 shares of Common Stock issuable under
currently exercisable options granted pursuant to the 1992 Option Plan.
Also includes 6,030 shares of Common Stock allocated to Mr. Montague's
self-directed accounts in the Company's retirement and 401(k) savings
plan. Does not include 12,223 shares of Common Stock owned by the
Montague Family Charitable Foundation of which Mr. Montague is one of
four directors and for which he disclaims beneficial ownership.
(8) Includes 8,301 shares of Common Stock held by The Gibson Group, Inc.
Pension Fund, of which Mr. Donohoo is a trustee and has voting power.
(9) Includes 2,894 shares of Common Stock issued to Mr. McNiel under the
Restricted Plan, as well as 40,324 shares of Common Stock issuable under
currently exercisable options granted pursuant to the Company's 1988
Incentive Stock Option Plan (the"1988 Option Plan") and the 1992 Option
Plan. Also includes 2,780 shares of Common Stock allocated to Mr.
McNiel's self-directed accounts in the Company's retirement and 401(k)
savings plan.
<PAGE>28
(10) Includes 2,894 shares of Common Stock issued to Mr. Johansson under the
Restricted Plan, as well as 20,768 shares of Common Stock issuable under
currently exercisable options granted pursuant to the 1988 and 1992
Option Plans.
(11) Includes 388,093 shares of Common Stock issued to the group under the
Restricted Plan, as well as 244,499 shares of Common Stock issuable
under currently exercisable options granted pursuant to the 1988 and
1992 Option Plans. Includes 33,440 shares of Common Stock allocated to
the officers' self directed accounts in the Company's retirement and
401(k) savings plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The firm of Lippes, Silverstein, Mathias & Wexler LLP, of which Mr.
Lippes, Secretary, a Director and general counsel of the Company, is a
partner, serves as counsel to the Company. During fiscal 1996, such firm
received approximately $1,169,000 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 L.L.P. 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 29, 1996.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at the
1996 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 29, 1996, 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 June 3, 1996, the person making the request was a
beneficial owner of securities entitled to vote at the Annual Meeting of
Stockholders.
<PAGE>29
1997 STOCKHOLDERS' PROPOSALS
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting must be received by the Company by February 3, 1997 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: June 5, 1996
_____________________________________________________________________________
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>30
P R O X Y
MARK IV INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JULY 29, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints SAL H. ALFIERO, WILLIAM P. MONTAGUE 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 Monday, July 29, 1996 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 III Director - Sal H. Alfiero
_ FOR _ WITHHOLD AUTHORITY
2. For Class III Director - Clement R. Arrison
_ FOR _ WITHHOLD AUTHORITY
3. Approval of the proposed amendment to the Company's Certificate of
Incorporation to increase the authorized number of shares of the
Company's Common Stock.
_ FOR _ Against _ Abstain
4. Approval of the Mark IV Industries, Inc. 1996 Incentive Stock Option
Plan.
_ 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 NOMINEES AND
PROPOSAL LISTED ABOVE.
Dated:_______________________, 1996
____________________________________
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>31
Exhibit A
MARK IV INDUSTRIES, INC.
1996 INCENTIVE STOCK OPTION PLAN
1. Purpose of Plan; Current Status of the Plan.
The Mark IV Industries, Inc., 1996 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.
<PAGE>32
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 other key employees of the Company and its
Subsidiaries (including, subject to the provisions of Section 422(c)(5) of the
Code, officers or other key employees possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company).
Those individuals to whom options are granted under the terms of this Plan are
sometimes hereinafter referred to as "Optionees". The Committee shall
determine the terms and provisions of the options granted hereunder (which
need not be identical), the time or times at which options shall be granted
and the number of shares of common stock of the Company (sometimes hereinafter
referred to as "Common Stock") (or such number of shares of stock in which
the Common Stock may at any time hereafter be constituted), for which options
are granted. Notwithstanding the foregoing, in no event shall the Committee
grant any options to the Company's Chief Executive Officer, any of the four
(4) most highly compensated officers, or any other employee 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 300,000 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/her 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 three million (3,000,000) shares,
determined as of April 24, 1996, (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.
<PAGE>33
5. Anti-Dilution Provisions
The aggregate number of shares and the class of shares as to which
options may be granted under the Plan, the number and class of shares subject
to each outstanding option, the price per share thereof (but not the total
price), and the number of shares as to which an option may be exercised at any
one time, shall all be adjusted proportionately in the event of any change,
increase or decrease in the outstanding shares of Common Stock or any change
in classification of the Company's Common Stock without receipt of
consideration by the Company which results either from a split-up, reverse
split or consolidation of shares, payment of a stock dividend,
recapitalization, reclassification or other like capital adjustment so that
upon exercise of the option, the Optionee shall receive the number and class
of shares that he would have received had he been the holder of the number of
shares of Common Stock for which the option is being exercised immediately
preceding such change, increase or decrease in the outstanding shares of
Common Stock of the Company. Any such adjustment made by the Committee shall
be final and binding upon all Optionees, the Company, and all other interested
persons. Any adjustment of an incentive stock option under this paragraph
shall be made in such manner as not to constitute a "modification" within the
meaning of Section 424(h)(3) of the Code.
Anything in this Section 5 to the contrary notwithstanding, no
fractional shares or scrip representative of fractional shares shall be issued
upon the exercise of any option. Any fractional share interest resulting from
any change, increase or decrease in the outstanding shares of Common Stock of
the Company or resulting from any reorganization, merger, or consolidation for
which adjustment is provided in this Section 5 shall disappear and be absorbed
into the next lowest number of whole shares, and the Company shall not be
liable for any payment for such fractional share interest to the Optionee upon
his exercise of the option.
6. Option Price
The purchase price for each share of Common Stock which may be
acquired upon the exercise of each option issued under the Plan shall be
determined by the Committee at the time the option is granted, but in no event
shall such purchase price be less than one hundred percent (100%) of the fair
market value of the Company's Common Stock on the date of grant. If the
Common Stock of the Company is listed upon an established stock exchange or
exchanges on the day the option is granted, such fair market value shall be
deemed to be the highest closing price of the Common Stock of the Company on
such stock exchange or exchanges on the day the option is granted, or if no
sale of the Company's Common Stock shall have been made on any stock exchange
on that day, on the next preceding day on which there was a sale of such
stock.
<PAGE>34
7. Option Exercise Periods
a. The time within which any option granted hereunder may be
exercised shall be, by its terms, not earlier than one (1) year from the date
such option is granted and not later than ten (10) years from the date such
option is granted. Except as otherwise provided for herein, the Optionee must
remain in the continuous employment of the Company or any of its Subsidiaries
from the date of the grant of the option to and including the date of exercise
of option in order to be entitled to exercise his option. Options granted
hereunder shall be exercisable in such installments and at such dates as the
Committee may specify. Unless the Committee shall specify otherwise, the
right of each Optionee to exercise his option to purchase the number of shares
to which his option initially related shall accrue on a cumulative basis as
follows:
(i). the Optionee shall have the right to purchase one-
fourth (1/4) of the total number of shares of Common Stock which can be
purchased pursuant to the option (subject to adjustment as provided in Section
5 hereof) at the end of the one (1) year period following the date the option
is granted;
(ii). the Optionee shall have the right to purchase an
additional one-fourth (1/4) of the total number of shares of Common Stock
which can be purchased pursuant to the option (subject to adjustment as
provided in Section 5 hereof) at the end of the two (2) year period following
the date the option is granted;
(iii). the Optionee shall have the right to purchase an
additional one-fourth (1/4) of the total number of shares of Common Stock
which can be purchased pursuant to the option (subject to adjustment as
provided in Section 5 hereof) at the end of the three (3) year period
following the date the option is granted;
(iv). the Optionee shall have the right to purchase the
remaining one-fourth (1/4) of the total number of shares of Common Stock which
can be purchased pursuant to the option (subject to adjustment as provided in
Section 5 hereof) at the end of the four (4) year period following the date
the option is granted.
Continuous employment shall not be deemed to be interrupted by
transfers between the Subsidiaries or between the Company and any Subsidiary,
whether or not elected by termination from any Subsidiary and re-employment by
any other Subsidiary or the Company. Time of employment with the Company
shall be considered to be one employment for the purposes of this Plan,
provided there is no intervening employment by a third party or no interval
<PAGE>35
between employments which, in the opinion of the Committee, is deemed to break
continuity of service. The Committee shall, at its discretion, determine the
effect of approved leaves of absence and all other matters having to do with
"continuous employment". Where an Optionee dies while employed by the Company
or any of its Subsidiaries, his options may be exercised following his death
in accordance with the provisions of Section 10 below.
b. Notwithstanding the foregoing provisions of Section 7(a), in
the event the Company or the shareholders of the Company enter into an
agreement to dispose of all or substantially all of the assets or stock of the
Company by means of a sale, merger, consolidation, reorganization,
liquidation, or otherwise, or in the event a Change of Control (as hereinafter
defined) of the Company shall occur, all unexercised options granted hereunder
shall become immediately exercisable with respect to the full number of shares
subject to that option during the period commencing as of the date of
execution of such agreement and ending as of the earlier of (i) ten (10) years
from the date such option was granted, or (ii) ninety (90) days following the
date on which a Change in Control occurs or the disposition of assets or stock
contemplated by this sentence is consummated. In addition, in the event that
substantially all the stock of any Subsidiary by whom an Optionee is employed
is sold or otherwise disposed of by merger, consolidation, reorganization,
liquidation or otherwise, or in the event that substantially all the assets of
any division of the Company or any division of any Subsidiary by whom the
Optionee is employed are sold or disposed of by means of a sale, merger,
consolidation, reorganization, liquidation or otherwise and, in connection
with any such asset sale, the Optionee's employment with the Company or the
Subsidiary (as the case may be) is terminated, the options of an Optionee
employed by such a division or Subsidiary shall, unless the Optionee remains
in the employ of the Company or any Subsidiary of the Company immediately
following any such sale or other disposition of stock or assets, become
immediately exercisable with respect to the full number of shares subject to
that option during the period commencing as of the date of execution of the
agreement providing for such sale or other disposition and ending as of the
earlier of (x) ten (10) years from the date such option was granted and (y)
ninety (90) days following the date on which the disposition of the assets or
stock contemplated by this sentence is consummated. Ninety (90) days
following the consummation of any disposition of assets or stock referred to
in the preceding sentence, any unexercised options issued hereunder which have
become exercisable pursuant to this paragraph (or any unexercised portion
thereof) shall terminate and cease to be effective. In addition, if any
disposition of assets or stock referred to in this paragraph occurs with
respect to substantially all the assets or stock of the Company or if a Change
in Control occurs, ninety (90) days following such disposition of assets or
stock or Change in Control, this Plan and any unexercised options issued
hereunder which have become exercisable pursuant to this paragraph (or any
unexercised portion thereof) shall terminate and cease to be effective, unless
<PAGE>36
provision is made in connection with such transaction for assumption of
options previously granted or the substitution for such options of new options
covering the securities of a successor corporation or an affiliate thereof,
with appropriate adjustments as to the number and kind of securities and
prices.
c. For purposes of this Plan, a "Change in Control" shall be
deemed to have occurred if:
(i). any "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Act")) becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Act) of more than thirty percent (30%) of the then outstanding voting
stock of the Company, otherwise than through a transaction arranged by, or
consummated with the prior approval of its Board of Directors; or
(ii). during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Company (and any new director whose election to the Board of
Directors or whose nomination for election by the Company's shareholders was
approved by a vote of at least two thirds of the directors then still in
office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) (hereinafter
referred to as the "Continuing Directors") cease for any reason to constitute
a majority thereof; or
(iii). the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger
or consolidation which would result in the voting securities of the Company
immediately prior thereto continuing to represent (either by remaining
outstanding or being converted into voting securities of the surviving entity)
at least 80% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation (provided, however, that if prior to the merger or
consolidation, the Board of Directors of the Company adopts a resolution that
is approved by a majority of the Continuing Directors providing that such
merger or consolidation shall not constitute a "change in control" for
purposes of the Plan, then such a merger or consolidation shall not constitute
a "change in control"); or
(iv). the shareholders of the Company approve an agreement
for the sale or disposition by the Company of all or substantially all the
assets of the Company.
<PAGE>37
d. Any change or adjustment made pursuant to the terms of this
Section 7 shall be made in such a manner so as not to constitute a
"modification" as defined in Section 424 of the Code, and so as not to cause
any incentive stock option issued under this Plan to fail to continue to
qualify as an incentive stock option as defined in Section 422(b) of the Code.
Notwithstanding the foregoing, in the event that any such agreement shall be
terminated without consummating the disposition of said stock or assets, any
unexercised unaccrued portion of any option that had become exercisable solely
by reason of the provisions of this paragraph shall again become unaccrued and
unexercisable as of said termination of such agreement; subject, however, to
such portion of such option accruing pursuant to the normal accrual schedule
provided in the terms under which such option was granted. Any exercise of
any portion of any option prior to said termination of said agreement shall
remain effective despite the fact that such portion became exercisable solely
by reason of the Company or its shareholders entering into said agreement to
dispose of the stock or assets of the Company or the stock or assets of any
Subsidiary of the Company, any division of the Company or any division of any
Subsidiary of the Company.
8. Exercise of Option
Options shall be exercised as follows:
a. Notice and Payment. Each option, or any installment
thereof, shall be exercised, whether in whole or in part, by giving written
notice to the Company at its principal office, (the "Exercise Notice") that
the Optionee intends to exercise all or part of any option he has been granted
and by paying to the Company the purchase price for the number of shares of
Common Stock of the Company which the Optionee desires to purchase at the
price per share (as adjusted) set forth in the option which the Optionee
desires to exercise.
b. The Exercise Notice: (i) shall state the identity of the
options being exercised (by reference to the date of the grant of the option);
(ii) shall state the number of shares to be purchased and the purchase price
to be paid; and (iii) shall contain representations on behalf of the Optionee
that he acknowledges that the Company is selling the shares being acquired by
him under a claim of exemption from registration under the Securities Act of
1933 as amended (hereinafter referred to as the "Act"), as a transaction not
involving any public offering; that he represents and warrants that he is
acquiring such shares with a view to "investment" and not with a view to
distribution or resale; and that he agrees not to transfer, encumber or
dispose of the shares unless: (A) a registration statement with respect to
the shares shall be effective under the Act, together with proof satisfactory
to the Company that there has been compliance with applicable state law; or
(B) the Company shall have received an opinion of counsel in form and content
satisfactory to the Company to the effect that the transfer qualifies under
Rule 144 or some other disclosure exemption from registration and that no
violation of the Act or applicable state laws will be involved in such
transfer, and/or such other documentation in connection therewith as the
Company's counsel may in its sole discretion require.
<PAGE>38
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; (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/her option hereunder; or (iii) by the Company's retention of a portion
of the shares of the Company's Common Stock to be issued in connection with
the exercise of such option, which shares of Common Stock have an aggregate
fair market value equal to the total exercise price payable for that number of
shares of the Company's Common Stock (including retained shares) which is to
be issued upon the exercise by the optionee of the number of options
identified by the optionee in the exercise notice. If shares of the Company's
Common Stock are delivered (or retained by the Company) as payment of the
purchase price for shares of Common Stock to be acquired in connection with
the exercise of options granted hereunder, the shares of Common Stock which
are delivered (or retained by the Company) 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 (or
retained by the Company) in payment of the purchase price for shares of Common
Stock to be acquired in connection with the exercise of options granted
hereunder.
d. Issuance of Certificates. Certificates representing the
shares purchased by the Optionee shall be issued as soon as practicable after
the Optionee has complied with the provisions of Section 8(a) hereof.
e. Rights as a Shareholder. The Optionee shall have no rights
as a shareholder with respect to the shares purchased until the date of the
issuance to him of a Certificate representing such shares.
9. Assignment of Option
Subject to the provisions of Section 10, options granted under
this Plan may not be assigned voluntarily or involuntarily or by operation of
law. Any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of, or to subject to execution, attachment or similar process, any
incentive stock option, or any right thereunder, contrary to the provisions
hereof shall be void and ineffective, shall give no right to the purported
transferee, and shall, at the sole discretion of the Committee, result in
forfeiture of the option with respect to the shares involved in such attempt.
<PAGE>39
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 canceled 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 from the Company or from
any of the Subsidiaries employing the Optionee at such time, the Optionee
shall have the right to exercise such option or options held by him to the
extent that such options have not expired, at any time within three (3) months
after such retirement. The provisions of Section 7 to the contrary
notwithstanding, upon retirement, all options held by an Optionee shall be
immediately exercisable in full. The transfer of an Optionee from the employ
of the Company to a Subsidiary of the Company or vice versa, or from one
Subsidiary of the Company to another, shall not be deemed to constitute a
termination of employment for purposes of this Plan.
c. In the event that an Optionee shall die while employed by
the Company or by any of the Subsidiaries or shall die within three (3) months
after retirement on his Retirement Date (from the Company or any Subsidiary),
any option or options granted to him under this Plan and not theretofore
exercised by him or expired shall be exercisable by the estate of the Optionee
or by any person who acquired such option by bequest or inheritance from the
Optionee in full, notwithstanding Section 7, at any time within one (1) year
after the death of the Optionee. References hereinabove to the Optionee shall
be deemed to include any person entitled to exercise the option after the
death of the Optionee under the terms of this Section.
d. In the event of the termination of employment of an Optionee
by reason of the Optionees' disability, the Optionee shall have the right,
notwithstanding the provisions of Section 7 hereof, to exercise all options
held by him, to the extent that options have not previously expired or been
exercised, at any time within one (1) year after such termination. The term
"disability" shall, for the purposes of this Plan, be defined in the same
manner as such term is defined in Section 105(d)(4) of the Internal Revenue
Code of 1986.
<PAGE>40
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>41
13. Maximum Annual Value of Options Exercisable.
Notwithstanding any provisions of this Plan to the contrary if: (a) the
sum of: (i) the fair market value (determined as of the date of the grant) of
all options granted to an Optionee under the terms of this Plan which become
exercisable for the first time in any one calendar year; and (ii) the fair
market value (determined as of the date of the grant) of all options
previously granted to such Optionee under the terms of this Plan or any other
incentive stock option plan of the Company or its subsidiaries which also
become exercisable for the first time in such calendar year; exceeds (b)
$100,000; then, (c) those options shall continue to be binding upon the
Company in accordance with their terms but, to the extent that the aggregate
fair market of all such options which become exercisable for the first time in
any one calendar year (determined as of the date of the grant) exceeds
$100,000, such options shall not be deemed to be incentive stock options as
defined in Section 422 (b) of the Code. Accordingly, no Optionee shall be
entitled to exercise options granted under any incentive stock option plan of
the Company and any parent or subsidiary of the Company, in any single
calendar year, for shares of Common Stock the value of which (determined at
the timer of grant of the options) exceeds $100,000 except to the extent such
options first become exercisable in previous complete calendar years. For
purposes of the foregoing, the determination of which options shall be
recharacterized as not being incentive stock options issued under the terms of
this Plan shall be made in inverse order of their grant dates and,
accordingly, the last options received by the Optionee shall be the first
options to be recharacterized as not being incentive stock options granted
pursuant to the terms of the Plan.
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.
<PAGE>42
15. Effective Date and Duration of the Plan
The Plan will become effective as of April 24, 1996, assuming, as
required by Section 422 of the Code, the Plan is approved by the Shareholders
of the Company at the 1996 Annual Meeting. The Plan will terminate on April
23, 2006 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 Mark IV
Industries, Inc. 1996 Incentive Stock Option Plan for and on behalf of Mark IV
Industries, Inc. this 25th day of April, 1996.
MARK IV INDUSTRIES, INC.
By: Richard L. Grenolds
Vice President and
Chief Accounting Officer
