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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
THE MONARCH MACHINE TOOL COMPANY
(Exact name of registrant as specified in its charter)
OHIO 34-4307810
(State of Incorporation) (I.R.S. Employer Identification No.)
THE MONARCH MACHINE TOOL COMPANY
2600 KETTERING TOWER
DAYTON, OHIO 45423
(Address, including zip code, of
registrant's principal executive offices)
THE MONARCH MACHINE TOOL COMPANY
1999 LONG-TERM INCENTIVE STOCK PLAN
(Full title of the plan)
JOSEPH M. RIGOT, ESQ.
THOMPSON HINE & FLORY LLP
2000 COURTHOUSE PLAZA, N.E.
DAYTON, OHIO 45402
(937) 443-6586
(Name, address and telephone number,
including area code, of agent for service)
<TABLE>
<CAPTION>
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CALCULATION OF REGISTRATION FEE
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Proposed
Amount to be Proposed Maximum Maximum Amount of
Title of Securities Registered Offering Price Per Aggregate Registration
to be Registered Share Offering Price Fee
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares, without par 175,000 (1) $6.25 (2) $1,093,750 (2) $304.00
value
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</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of Common Shares
that may be offered or sold as a result if any adjustments from stock
splits, stock dividends or similar events.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) on the basis of the average of the high and low
prices reported on the New York Stock Exchange Composite Tape on August 26,
1999.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
--------------------------------------------------
Item 3. Incorporation of Documents by Reference.
----------------------------------------
The following documents filed by The Monarch Machine Tool Company (the
"Company") with the Securities and Exchange Commission (the "Commission") are
incorporated herein by reference as of their respective dates of filing:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, filed pursuant to Section 13(a) of the
Securities Exchange Act of 1934 (the "Exchange Act").
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1999 and June 30, 1999 filed pursuant to Section 13(a) of
The Exchange Act.
(c) The description of the Company's common shares contained in the
Registration Statement filed pursuant to Section 12 of the Exchange Act,
including any amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereunder
have been sold or which deregisters all securities then remaining unsold
hereunder shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of filing of such documents.
Item 4. Description of Securities.
--------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
---------------------------------------
Thompson Hine & Flory LLP has provided a legal opinion to the Company
with respect to the common shares of the Company issuable under The Monarch
Machine Tool Company 1999 Long-Term Incentive Stock Plan and registered
hereunder. Members of that Firm own beneficially approximately 7,000 common
shares of the Company and Joseph M. Rigot, a partner of the Firm, is a director
of the Company.
Item 6. Indemnification of Directors and Officers.
------------------------------------------
Article V of the Registrant's Code of Regulations (filed as an Exhibit
hereto), is incorporated herein by reference.
Reference is made to Section 1701.13(E) of the Ohio Revised Code relating
to the indemnification of directors and officers of an Ohio corporation.
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The Registrant maintains insurance policies which presently provide
protection, within the maximum liability limits of the policies and subject to a
deductible amount for each claim, to the Registrant under its indemnification
obligations and to the directors and officers with respect to certain matters
which are not covered by the Registrant's indemnification obligations.
Item 7. Exemption from Registration Claimed.
------------------------------------
Not applicable.
Item 8. Exhibits.
---------
See Index to Exhibits following signature pages.
Item 9. Undertakings.
-------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
this registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement; provided, however, that the undertakings set forth in
paragraphs (i) and (ii) above do not apply if the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant with the Securities
and Exchange Commission or furnished to the Commission pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
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(b) The undersigned registrant hereby further undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 and, where applicable, each filing
of an employee benefit plans annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934, that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dayton, State of Ohio, on this 31st day of August,
1999.
THE MONARCH MACHINE TOOL COMPANY
By /s/ Richard E. Clemens
--------------------------------------
Richard E. Clemens
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
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Name Title Date
- ---- ----- ----
- --------------------------------------------------------------------------------
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/s/ Richard E. Clemens Director, President and August 31, 1999
- ---------------------- Chief Executive Officer
Richard E. Clemens (principal executive
officer)
/s/ Karl A. Frydryk Vice President and Chief August 31, 1999
- ---------------------- Financial Officer (principal
Karl A. Fydryk financial officer)
/s/ Leo E. Dugdale Controller (principal August 31, 1999
- ---------------------- accounting officer)
Leo E. Dugdale
-------------------------------------
*John A. Bertrand Director August 31, 1999
*Gerald L. Connelly Director August 31, 1999
*William A. Enouen Director August 31, 1999
*Waldemar M. Goulet Director August 31, 1999
*William R. Graber Director August 31, 1999
*David E. Lundeen Director August 31, 1999
*Joseph M. Rigot Director August 31, 1999
* The undersigned, by signing his name hereto, executes this
Registration Statement pursuant to powers of attorney executed by the
above-named persons and filed with the Securities and Exchange Commission as an
Exhibit to this Registration Statement.
/s/ Richard E. Clemens
----------------------
Richard E. Clemens
Attorney-in-Fact
INDEX TO EXHIBITS
-----------------
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES:
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4.1 1980 Amended Articles of Incorporation of The Monarch
Machine Tool Company.
4.2 Code of Regulations of The Monarch Machine Tool Company,
as amended May 6, 1980.
4.3 The Monarch Machine Tool Company 1999 Long-Term
Incentive Stock Plan.
(5) OPINION RE LEGALITY
5.1 Opinion of Thompson Hine & Flory LLP
(23) CONSENTS OF EXPERTS AND COUNSEL:
23.1 Consent of Pricewaterhouse Coopers LLP
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Thompson Hine & Flory LLP [contained in their
opinion filed as Exhibit 5.1]
(24) POWERS OF ATTORNEY
24.1 Powers of Attorney of each person whose signature in this
registration statement was signed by another pursuant to
a power of attorney.
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Exhibit 4.1
1980 AMENDED ARTICLES OF INCORPORATION
OF
THE MONARCH MACHINE TOOL COMPANY
FIRST. The name of the corporation is THE MONARCH MACHINE TOOL
COMPANY.
SECOND. The place in Ohio where its principal office is
located is the City of Sidney, in Shelby County.
THIRD. The purpose or purposes for which the Company is formed
are:
(a) To develop, manufacture, assemble, distribute, sell,
lease, or otherwise dispose of, and to deal in or with machine tools,
machinery, and other products.
(b) To manufacture, to purchase, lease, or otherwise acquire,
to hold and use, to sell, lease, or otherwise dispose of, and to deal
in or with personal property of any description and any interest
therein.
(c) To purchase, lease, or otherwise acquire, to invest in,
hold, use, and encumber, to sell, lease, exchange, transfer, or
otherwise dispose of, and to construct, develop, improve, equip,
maintain, and operate structures and real property of any description
and any interest therein.
(d) To borrow money, to issue, sell, and pledge its notes,
bonds, and other evidences of indebtedness, to secure any of its
obligations by mortgage, pledge, or deed of trust of all or any of its
property, and to guarantee and secure obligations of any person, all to
the extent necessary, useful, or conducive to carrying out any of the
purposes of the Company.
(e) To invest its funds in any shares or other securities of
another corporation, business, or undertaking or of a government,
governmental authority, or governmental subdivision.
(f) To do whatever is deemed necessary, useful, or conducive
to carrying out any of the purposes of the Company and to exercise all
other authority enjoyed by corporations generally by virtue of the
provisions of the Ohio General Corporation Law.
FOURTH. The authorized number of shares of the Company is
12,500,000, consisting of 500,000 Preferred Shares without par value ("Preferred
Shares") and 12,000,000
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Common Shares without par value ("Common Shares"). The shares of each class
shall have the following express terms:
DIVISION A EXPRESS TERMS OF PREFERRED SHARES
1. The Preferred Shares may be issued from time to time in one
or more series. Each Preferred Share of any one series shall be identical with
each other share of the same series in all respects, except as to the date from
which dividends thereon shall be cumulative by reason of different dates of
issuance; and all Preferred Shares of all series shall rank equally and shall be
identical, except in respect of the terms which may be fixed by the Board of
Directors as hereinafter provided or which are fixed in Division A-1. Subject to
the provisions of sections 2 through 8 of this Division A, which provisions
shall apply to all Preferred Shares of all series, the Board of Directors is
hereby authorized to cause Preferred Shares to be issued in one or more series
and with respect to each such series, prior to the issuance thereof, to fix:
(a) The designation of the series, which may be by
distinguishing number, letter, or title.
(b) The number of shares of the series, which number the Board
of Directors may increase or decrease, except where otherwise provided
in the creation of the series.
(c) The dividend rate of the series.
(d) The dates on which dividends, if declared, shall be
payable and the dates, if any, from which dividends shall be
cumulative.
(e) The redemption rights and price or prices, if any, for
shares of the series.
(f) The terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series.
(g) Whether the shares of the series shall be convertible into
Common Shares and, if so, the conversion rate or rates or price or
prices and the adjustments thereof, if any, and all other terms and
conditions upon which conversions may be made.
(h) The amounts payable on shares of the series in the event
of any voluntary or involuntary liquidation, dissolution, or winding up
of the affairs of the Company.
(i) Restrictions (in addition to those set forth in sections
6(b) and 6(c) of this Division A) on the issuance of shares of the same
series or of any other class or series.
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The Board of Directors is authorized (as are the shareholders) to adopt from
time to time amendments to the Articles of Incorporation or Amended Articles of
Incorporation of the Company fixing, with respect to each such series, the
matters specified in clauses (a) through (i) of this section 1.
2. The holders of Preferred Shares of each series, in
preference to the holders of Common Shares and any other class of shares ranking
junior to the Preferred Shares, shall be entitled to receive, out of any funds
legally available and when and as declared by the Board of Directors, cash
dividends at the rate (and no more) for such series fixed in accordance with the
provisions of section 1 of this Division A or in Division A-1, payable quarterly
on the dates fixed for such series. Such dividends shall be cumulative from a
date specified, or non-cumulative, as fixed with respect to such series in
accordance with the provisions of section 1 of this Division A or in Division
A-1. No dividends may be paid upon or declared and set apart for any of the
Preferred Shares for any quarterly dividend period unless at the same time a
like proportionate dividend for the same quarterly dividend period, ratably in
proportion to the respective annual dividend rates fixed therefor, shall be
declared and paid or a sum sufficient for payment thereof set apart for the
Preferred Shares of all series.
3. So long as any Preferred Shares are outstanding, no
dividend (except a dividend payable in Common Shares or in other shares of the
Company ranking junior to the Preferred Shares) shall be paid or declared or any
distribution be made (except as aforesaid) in respect of the Common Shares or in
other shares of the Company ranking junior to the Preferred Shares, nor shall
any Common Shares or any other shares of the Company ranking junior to the
Preferred Shares be purchased, retired, or otherwise acquired by the Company
(except out of the proceeds of the sale of Common Shares or other shares of the
Company ranking junior to the Preferred Shares received by the Company
subsequent to December 31, 1967),
(a) Unless all accrued and unpaid dividends on the Preferred
Shares of all series, including the full dividends for the current
quarterly dividend period, shall have been declared and paid or a sum
sufficient for payment thereof set apart; and
(b) Unless redemption of Preferred Shares of any Series shall
have been effected from, and any required payment shall have been made
into, any sinking fund provided for shares of such series in accordance
with the provisions of section 1 of this Division A.
4. (a) Subject to the express terms of each series and to the
provisions of section 6(b)(iii) of this Division A, the Company (i) may from
time to time redeem all or any part of the Preferred Shares of any series at the
time outstanding at the option of the Board of Directors at the applicable
redemption price for such series fixed in accordance with the provisions of
section 1 of this Division A or in Division A-1, or (ii) shall from time to time
make such redemption of the Preferred Shares as may be required to fulfill the
requirements of any sinking fund provided for shares of such series at the
applicable sinking fund redemption price
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fixed in accordance with the provisions of section 1 of this Division A,
together, in each case, with accrued and unpaid dividends to the redemption
date.
(b) Notice of every redemption shall be mailed, by first class
mail, postage prepaid, to the holders of record of the Preferred Shares to be
redeemed, at their respective addresses then appearing on the books of the
Company, not less than 30 nor more than 60 days prior to the date fixed for
redemption. At any time before or after notice has been given as above provided,
the Company may deposit the aggregate redemption price of the Preferred Shares
to be redeemed, together with accrued and unpaid dividends thereon to the
redemption date, with any bank or trust company in Dayton, Cincinnati, or
Cleveland, Ohio, or New York, New York, having capital and surplus of more than
$5,000,000, named in such notice, directed to be paid to the respective holders
of the Preferred Shares so to be redeemed, in amounts equal to the redemption
price of all Preferred Shares so to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, on surrender of the share
certificate or certificates held by such holders, and upon the giving of such
notice and the making of such deposit such holders shall cease to be
shareholders with respect to such shares, and after such notice shall have been
given and such deposit shall have been made such holders shall have no claim
against the Company or privileges with respect to such shares except only to
receive such money from such bank or trust company without interest or the right
to exercise, before the redemption date, any unexpired rights or conversion. In
case less than all of the outstanding Preferred Shares of any series are to be
redeemed, the Company shall select by lot the shares so to be redeemed in such
manner as shall be prescribed by its Board of Directors. If the holders of
Preferred Shares which shall have been called for redemption shall not, within
six years after such deposit, claim the amount deposited for the redemption of
their shares, any such bank or trust company shall, upon demand, pay over to the
Company such unclaimed amounts and thereupon such bank or trust company and the
Company shall be relieved of all responsibility in respect thereof and to such
holders.
(c) Any Preferred Shares which are redeemed by the Company
pursuant to the provisions of this section 4 of this Division A and any
Preferred Shares which are purchased and delivered in satisfaction of any
sinking fund requirements provided for shares of such series and any Preferred
Shares which are converted in accordance with their express terms shall be
cancelled and not reissued. Any Preferred Shares otherwise acquired by the
Company shall be restored to the status of authorized and unissued Preferred
Shares without serial designation.
5. (a) The holders of Preferred Shares of any series shall, in
case of liquidation, dissolution, or winding up of the affairs of the Company,
be entitled to receive in full, out of the assets of the Company, including its
capital, before any amount shall be paid or distributed among the holders of
Common Shares or any other shares ranking junior to the Preferred Shares, the
amounts fixed with respect to shares of any such series in accordance with
section 1 of this Division A or in Division A-1, plus in any such event an
amount equal in all dividends accrued and unpaid thereon to the date of payment
of the amount due pursuant to such liquidation, dissolution, or winding up of
the affairs of the Company. In case the net assets of the
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Company legally available therefor are insufficient to permit the payment upon
all outstanding Preferred Shares of all series of the full preferential amount
to which they are respectively entitled, then such net assets shall be
distributed ratably upon outstanding Preferred Shares of all series in
proportion to the full preferential amount to which each such share is entitled.
After payment to holders of Preferred Shares of full preferential amounts as
aforesaid, holders of Preferred Shares as such shall have no right or claim to
any of the remaining assets of the Company.
(b) The merger or consolidation of the Company into or with
any other corporation, or the merger of any other corporation into it, or the
sale, lease, or conveyance of all or substantially all of the property or
business of the Company, shall not be deemed to be a dissolution, liquidation,
or winding up of the Company for the purposes of this section 5 of this
Division A.
6. (a) The holders of Preferred Shares of all series shall be
entitled to one vote for each such share upon all matters presented to
shareholders; and, except as otherwise provided herein or required by law, the
holders of Preferred Shares of all series and the holders of Common Shares shall
vote together as one class on all matters. If, and as often as, the Company
shall be in default in the payment of the equivalent of six quarterly dividends
(whether or not consecutive) on any series of Preferred Shares at any time
outstanding, whether or not earned or declared, the holders of Preferred Shares
of all series voting separately as a class and in addition to all other rights
to vote for Directors shall thereafter be entitled to elect, as herein provided,
two members of the Board of Directors of the Company; provided, however, that
the special class voting rights provided for herein, when the same shall have
become vested, shall remain so vested until all accrued and unpaid dividends on
the Preferred Shares of all series then outstanding shall have been paid,
whereupon the holders of Preferred Shares shall be divested of their special
class voting rights in respect to subsequent elections of Directors, subject to
the revesting of such special class voting rights in the event hereinabove
specified in this section 6(a). In the event of default entitling the holders of
Preferred Shares to elect two Directors as above specified, a special meeting of
the shareholders for the purpose of electing such Directors shall be called by
the Secretary of the Company upon written request of, or may be called by, the
holders of record of the greater of 10% of the Preferred Shares of all series at
the time outstanding or 50,000 Preferred Shares, and notice thereof shall be
given in the same manner as that required for the annual meeting of
shareholders; provided, however, that the Company shall not be required to call
such special meeting if the annual meeting of shareholders shall be held within
90 days after the date of receipt of the foregoing written request from the
holders of Preferred Shares. At any meeting at which the holders of Preferred
Shares shall be entitled to elect Directors, the holders of not less than the
greater of one-third of the outstanding Preferred Shares of all series or 50,000
Preferred Shares, present in person or by proxy, shall be sufficient to
constitute a quorum and the vote of the holders of a majority of such shares so
present at any such meeting at which there shall be a quorum shall be sufficient
to elect the members of the Board of Directors which the holders of Preferred
Shares are entitled to elect as hereinbefore provided. The two Directors who may
be elected by the holders of Preferred Shares pursuant to
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the foregoing provisions shall be in addition to any other Directors then in
office or proposed to be elected otherwise than pursuant to such provisions, and
nothing in such provisions shall prevent any change otherwise permitted in the
total number of Directors of the Company or require the resignation of any
Director elected otherwise than pursuant to such provisions.
(b) The affirmative vote or consent of the holders of at least
two-thirds of the then outstanding Preferred Shares of all series, given in
person or by proxy, either in writing or at a meeting called for the purpose at
which the holders of Preferred Shares of all series shall vote separately as a
class, shall be necessary to effect any one or more of the following (but,
insofar as the holders of Preferred Shares are concerned, such action may be
effected with such vote or consent):
(i) Any amendment, alteration, or repeal of any of
the provisions of the Articles of Incorporation or of the Regulations
of the Company which affects adversely the voting powers, rights, or
preferences of the holders of Preferred Shares; provided, however, that
for the purpose of this clause (i) only, neither the amendment of the
Articles of Incorporation of the Company to authorize, or to increase
the authorized or outstanding number of, Preferred Shares or of any
shares of any class ranking on a parity with or junior to the Preferred
Shares, nor the increase by the shareholders pursuant to the
Regulations of the number of Directors of the Company shall be deemed
to affect adversely the voting powers, rights, or preferences of the
holders of Preferred Shares; and provided further that, if such
amendment, alteration, or repeal affects adversely the rights or
preferences of one or more but not all then outstanding series of
Preferred Shares, only the affirmative vote or consent of the holders
of at least two-thirds of the number of the then outstanding shares of
the series so affected shall be required;
(ii) The authorization, or the increase in the
authorized number of, shares of any class ranking prior to the
Preferred Shares; or
(iii) The purchase or redemption (whether for sinking
fund purposes or otherwise) of less than all the then outstanding
Preferred Shares except in accordance with a purchase offer made to all
holders of record of Preferred Shares, unless all dividends on all
Preferred Shares then outstanding for all previous quarterly dividend
periods shall have been declared and paid or funds therefor set apart
and all accrued sinking fund obligations applicable to all Preferred
Shares shall have been complied with.
(c) The affirmative vote or consent of the holders of at least
a majority of the then outstanding Preferred Shares of all series, given in
person or by proxy, either in writing or at a meeting called for the purpose at
which the holders of Preferred Shares of all series shall vote separately as
class, shall be necessary (but insofar as the holders of Preferred Shares are
concerned, such action may be effected with such affirmative vote or consent) to
authorize any shares ranking on a parity with the Preferred Shares or an
increase in the authorized number of Preferred Shares.
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7. No holder of Preferred Shares of any series, as such, shall
have any pre-emptive right to purchase or subscribe for shares of the Company,
of any class, or other securities of the Company, of any class, whether now or
hereafter authorized.
8. For the purposes of this Division A:
(a) Whenever reference is made to shares "ranking prior to the
Preferred Shares," such reference shall mean and include all shares of
the Company in respect of which the rights of the holders thereof as to
the payment of dividends or as to distributions in the event of a
voluntary or involuntary liquidation, dissolution, or winding up of the
affairs of the Company are given preference over the rights of the
holders of Preferred Shares.
(b) Whenever reference is made to shares "ranking on a parity
with the Preferred Shares," such reference shall mean and include all
shares of the Company in respect of which the rights of the holders
thereof as to the payment of dividends and as to distributions in the
event of a voluntary or involuntary liquidation, dissolution, or
winding up of the affairs of the Company rank on an equality with the
rights of the holders of Preferred Shares.
(c) Whenever reference is made to shares "ranking junior to
the Preferred Shares," such reference shall mean and include all shares
of the Company other than those defined under clauses (a) and (b) of
this section 8 as shares "ranking prior to" or "ranking on a parity
with" the Preferred Shares.
DIVISION A-1
EXPRESS TERMS OF $1.80 CUMULATIVE
CONVERTIBLE PREFERRED SHARES, SERIES A
There is hereby established a first series of Preferred Shares
to which the following shall be applicable:
Section 1. DESIGNATION OF SERIES. The series shall be
designated "$1.80 Cumulative Convertible Preferred Shares, Series A"
(hereinafter called "Series A Preferred Shares").
Section 2. NUMBER OF SHARES. The number of Series A Preferred
Shares initially fixed is 117,734, which number the Board of Directors may
increase or decrease (but not below the number of shares of the series then
outstanding).
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Section 3. DIVIDEND RATE. The dividend rate for Series A
Preferred Shares is $1.80 per share per annum.
Section 4. DIVIDEND PAYMENT DATES; CUMULATIVE DATES. The dates
at which dividends on the Series A Preferred Shares shall be payable are March
1, June 1, September 1, and December 1 of each year.
Dividends on Series A Preferred Shares shall be cumulative as follows:
(a) In the case of shares issued during the period commencing
immediately after the record date for the payment of a dividend and
terminating at the close of the payment date for such dividend,
dividends shall be cumulative from such last-mentioned dividend payment
date.
(b) In all other cases dividends shall be cumulative from the
dividend payment date next preceding the date of issuance of such
shares.
Section 5. Redemption Price. The redemption price for the
Series A Preferred Shares shall be $40.00 per share.
Section 6. Conversion Rights.
(a) [These 1980 Amended Articles of Incorporation give effect
to adjustments of the conversion price of the Series A Preferred Shares
occurring prior to the filing of these 1980 Amended Articles of Incorporation
with the Ohio Secretary of State and delete provisions in the express terms of
the Series A Preferred Shares that are no longer applicable at the time of the
filing.] The holder of Series A Preferred Shares shall be entitled at any time
(but in the case of such shares which have been called for redemption, such
right shall expire at the close of business on the date fixed for such
redemption, unless default shall be made in the deposit of the redemption
price), to convert, in the manner hereinafter provided (giving to Series A
Preferred Shares for the purpose hereof a value of $39.60 per share) into fully
paid and nonassessable Common Shares at the conversion price of $9.90 for each
Common Share. The conversion price of the Common Shares shall be subject to
adjustment from time to time in certain instances, as hereinafter provided;
provided, however, that no adjustment under paragraph (b) of this Section 6 of
the conversion price shall be made unless such adjustment with any other
adjustments not yet made by reason of this proviso would result in a change of
at least fifty cents in the conversion price in effect.
(b) Except as otherwise hereinafter provided, whenever the
Company shall issue Common Shares (which term shall not include the sale of
treasury shares) in excess of the number of Common Shares theretofore issued and
outstanding without receiving therefor a consideration per share at least equal
to the conversion price per Common Share in effect immediately prior to such
issuance, then, upon such issuance, the conversion price per Common Share shall
be adjusted to the price obtained by:
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<PAGE> 9
(i) Multiplying the number of Common Shares
constituting issued and outstanding shares when the conversion price
then in effect became effective by the conversion price then in effect;
(ii) Adding to the product the total amount of
consideration, if any, received by the Company for the issuance of such
additional Common Shares and for all other issuances of Common Shares
subsequent to the time when the conversion price then in effect became
effective; and
(iii) Dividing the sum so obtained by the total
number of Common Shares constituting issued and outstanding shares
immediately after the issuance of such additional Common Shares,
disregarding in the quotient so obtained fractions of one cent.
(c) For the purpose of making the computations
described in paragraph (b) of this section 6, the following provisions shall be
applicable:
(i) Common Shares issued as a stock dividend or split
and Common Shares issued to change or replace issued Common Shares
shall, except for any money or other property also received by the
Company therefor, be deemed to have then issued for a consideration of
no value.
(ii) Common Shares issued for money or in
extinguishment of debts or obligations of the Company shall be deemed
to have been issued for a consideration equal to the money received by
the Company and the amount of any debt or obligation so extinguished,
plus such reasonable commissions and discounts for the underwriting or
marketing thereof as may have been deducted from the money which
otherwise would have been received by the Company or from the amount of
the debt or obligation which would have been extinguished.
(iii) Common Shares issued for property other than
cash shall be deemed to have been issued for a consideration equal to
the fair value of such property as determined by the Board of Directors
of the Company, plus such reasonable commissions for the underwriting
or marketing of such Common Shares as may have been charged to the
Company or deducted from the property which otherwise would have been
received by the Company.
(iv) In case the Company shall in any manner issue or
sell any shares or obligations (other than the presently authorized
Series A Preferred Shares) which, at the option of the holder thereof,
may be converted into or may be replaced by Common Shares at a price
less than the conversion price in effect immediately prior to the
issuance or sale of such convertible shares or obligations, such
issuance or sale shall be deemed to be an issuance or sale (as of the
date of the issuance or sale of such convertible shares or obligations)
of the maximum number of Common Shares necessary to effect the
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<PAGE> 10
conversion or replacement of all such convertible shares or obligations
and the amount received by the Company as the consideration for the
issuance or sale of such convertible shares or obligations plus the
total amount or additional consideration, if any, payable to the
Company on conversion or replacement (plus such reasonable commissions
and discounts for the underwriting or marketing of such convertible
shares or obligations as may have been charged to the Company or
deducted from the consideration which otherwise would have been
received by the Company) shall be deemed to be consideration actually
received for the issuance or sale of such Common Shares, and such
Common Shares shall be deemed to constitute issued and outstanding
Common Shares as of said date; provided, however, that no further
adjustment of the conversion price shall be made upon the actual
issuance of any Common Shares to effect such conversion or replacement;
and provided further that, if any such convertible shares or
obligations shall be retired by the Company or otherwise cancelled
without the issuance of any Common Shares to effect the conversion or
replacement above provided, a computation as aforesaid shall again be
made in the same manner as though the convertible shares or
obligations, to the extent so retired or cancelled, had not been issued
or sold.
(v) In case the Company shall grant any right or
option (expiring more than 21 days from the date of the grant thereof)
to subscribe for or purchase any Common Shares at a price less than the
conversion price in effect immediately prior to the granting of such
options or rights; such grant shall, except as provided in clause (vi)
below, be deemed to be an issuance (as of the date of the granting of
such right or option) of the maximum number of Common Shares issuable
upon the exercise of such right or option, and the amount, if any,
received by the Company as the consideration for the granting of such
right or option plus the total amount of additional consideration, if
any, payable to the Company upon the exercise of such right or option
(plus such reasonable commissions and discounts for the underwriting or
marketing of such right or option as may have been charged to the
Company or deducted from the consideration which otherwise would have
been received by the Company) shall be deemed to be the consideration
actually received for the issuance of such Common Shares, and such
Common Shares shall be deemed to constitute issued and outstanding
Common Shares as of said date; provided, however, that no further
adjustment of the conversion price shall be made upon the actual
issuance of any Common Shares upon the exercise of any such right or
option; and provided further that, if any such rights or options shall
be terminated or shall expire without being fully exercised, a
computation as aforesaid shall again be made in the same manner as
though the rights or options, to the extent that they remain
unexercised, had not been granted.
(vi) Common Shares issued pursuant to any employee
stock option plan, employee stock purchase plan, or similar plan of the
Company in existence on the date of the first issuance of Series A
Preferred Shares or thereafter approved at a meeting of shareholders of
the Company by the vote of the holders of a majority of the shares
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<PAGE> 11
entitled to vote shall be deemed to have been issued for a
consideration equal to the conversion price in effect at the time of
issuance thereof.
(vii) Common Shares issued upon conversion of a
Series A Preferred Shares shall be deemed to have been issued for a
consideration equal to the conversion price in effect at the time of
issuance thereof.
(d) In the event that shares of any class (other than
Common Shares) are issued by way of a stock divided on outstanding Common
Shares, then, in addition to any Common Shares receivable upon exercise of the
conversion rights to the Series A Preferred Shares, the holder of a Series A
Preferred Share (entitled to receive a specified number of shares of the first
mentioned class were such Series A Preferred Share converted immediately prior
to the declaration and issuance of the stock dividend) shall, upon such exercise
of the conversion rights of the Series A Preferred Shares, be entitled to
receive the same number of the first mentioned class and/or shares of any class
issued successively thereon as a stock dividend and/or any shares issued
successively upon any exchange, replacement, subdivision, or combination
thereof. No adjustment in the conversion price shall be made merely by virtue of
the happening of any event specified in this paragraph (d).
(e) Upon conversion of the Series A Preferred Shares,
no adjustment shall be made for any dividends on the Series A Preferred Shares,
or for any dividends on the shares into which the Series A Preferred Shares are
converted.
(f) In the event that the Company shall effect any
capital reorganization or reclassification of its shares or shall consolidate or
merge with or into any other corporation, involving in any such case the
issuance or delivery to the holders of Common Shares of other stock (or
securities or assets), then in any one or more of such events the Company shall
give notice thereof by mail as hereinafter provided, which notice shall state
the date as of or after which such transaction shall take place and the date as
of which holders of Common Shares shall be entitled to replace their Common
Shares with stock (and other securities and assets, if any) pursuant to such
reclassification, reorganization, merger, or consolidation, to the end that the
holders of the Series A Preferred Shares may at their option on or before the
date so specified surrender them for conversion and thereby be entitled in
respect of the Common Shares issuable upon such conversion to receive such stock
(and other securities and assets, if any), to the same extent and on the same
basis as other holders of Common Shares. The notice herein required to be given
shall be sufficiently given if the Company shall mail a copy thereof to the
holders of the Series A Preferred Shares at their addresses as shown by the
books of the Company, first class, postage prepaid. Such written notice shall be
mailed not less than 30 days before the proposed effective date of any such
transaction and not less than 30 days before the date as of which holders of
Common Shares shall be entitled to replace their Common Shares with stock or
securities pursuant to such reclassification, reorganization, merger, or
consolidation.
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<PAGE> 12
(g) In the event that the Company shall effect any
capital reorganization or reclassification of its shares or shall consolidate or
merge with or into any other corporation or shall sell all or substantially all
of its property as an entirety, lawful provision shall be made as part of the
terms of such transaction that the holders of Series A Preferred Shares may then
or thereafter receive in lieu of each Common Share otherwise issuable to them
upon conversion of the Series A Preferred Shares (but at the conversion price
which would otherwise be in effect at the time of conversion and with the same
protection against dilution, all as herein provided), the same kind and amount
of stock (and other securities and assets, if any) as may be issuable or
distributable upon such transaction with respect to each outstanding Common
Share, and after such transaction the conversion rights of the holders of the
Series A Preferred Shares shall be merely to receive such stock (and other
securities and assets, if any). The foregoing provisions shall similarly apply
to successive transactions of a similar nature by any such successor or
purchaser.
(h) Whenever there shall be any issuance of Common
Shares or there shall happen any other event as a consequence of which the
conversion price of the Common Shares or the conversion rights of the Series A
Preferred Shares shall be altered or varied, the Company shall forthwith file
with the Transfer Agent for the Series A Preferred Shares a statement describing
specifically such issuance of Common Shares or such other event (and, in the
case of a reorganization, reclassification, consolidation, merger, or sale, the
terms thereof) and the adjusted conversion price resulting from such event and
the change, if any, in the stock (and other securities and assets, if any)
issuable or distributable upon conversion. The Transfer Agent may receive and
file such statements without responsibility on its part for the matters therein
recited and as conclusive evidence of the facts therein stated.
(i) When the exercise of the conversion rights of the
Series A Preferred Shares shall result in a fraction of a Common Share issuable
upon such conversion, the Company shall not issue a fractional share but in lieu
thereof shall make a cash adjustment in respect thereof on the basis of the then
existing conversion price of the Common Shares.
(j) Any holder of a Series A Preferred Share desiring
to exercise the right of conversion shall surrender to the Company at the office
of the Transfer Agent (or at the principal office of the Company if, at the time
of such conversion, there be no transfer agent for the Series A Preferred
Shares) the certificate evidencing the Series A Preferred Shares so to be
converted, duly endorsed for transfer to the Company or accompanied by an
appropriate separate instrument of assignment; and promptly thereafter the
Company shall issue and deliver a stock certificate representing the full Common
Shares into which such Series A Preferred Shares shall have been so converted
together with cash adjustments in lieu of fractional shares and certificates
representing any shares to which such holder shall be entitled by reason of the
provisions of paragraph (g) of this section 6, under all suitable regulations to
be prescribed by the Company's Board of Directors. The issuance of the Common
Shares and the issuance of any such other shares shall be as of the date of the
surrender, as aforesaid, of the certificate evidencing the Series A Preferred
Share for conversion, notwithstanding any delay in the delivery of the
certificate for
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<PAGE> 13
the Common Shares into which such Series A Preferred Shares shall have been so
converted or in the delivery of certificates for any such other shares. The
Company shall pay any and all taxes which may be imposed in respect to the
issuance and delivery of the Common Shares (and any such other shares) issuable
upon conversion of Series A Preferred Shares; provided, however, that the
Company shall not be required in any event to pay any transfer or other taxes by
reason of the issuance of such Common Shares (or any such other shares) in a
name or names other than the name of the owner of the Series A Preferred Share
surrendered for conversion.
(k) The Company shall reserve and keep available out
of its authorized but unissued shares, solely for the purpose of delivery upon
exercise of the conversion rights provided in this section 6, such number of
shares as shall from time to time be sufficient to effect the conversion of all
of the Series A Preferred Shares then outstanding. The Company shall from time
to time, in accordance with the laws of the State of Ohio, increase the
authorized number of shares at any time the number of shares remaining unissued
and available for effecting conversion of Series A Preferred Shares shall not be
sufficient to permit the conversion of all then outstanding Series A Preferred
Shares.
(l) All Series A Preferred Shares surrendered for
conversion into the Common Shares shall be cancelled and not again issued.
Section 7. LIQUIDATION RIGHTS. The amount payable on
Series A Preferred Shares in the event of any voluntary liquidation,
dissolution, or winding up of the affairs of the Company shall be $40.00 per
share.
FIFTH. The Company, by action of its directors, and without
action by its shareholders, may purchase its own shares, of any class or series,
in accordance with the provisions of the Ohio General Corporation Law, either in
the open marked or at public or private sale, in such manner and amounts, from
such holder or holders of outstanding shares of the Company, and at such prices
as the Directors shall from time to time determine, subject, however, to such
limitation or restriction, if any, as may be contained in the express terms of
any class or series of shares of the Company outstanding at the time of such
purchase.
SIXTH. No holder of shares of the Company or any class, as
such, shall have any pre-emptive right to purchase or subscribe for shares of
the Company, of any class, or other securities of the Company, of any class,
whether now or hereafter authorized.
SEVENTH. These Amended Articles of Incorporation supersede and
take the place of the existing Articles of Incorporation of the Company.
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<PAGE> 1
Exhibit 4.2
CODE OF REGULATIONS
OF
THE MONARCH MACHINE TOOL COMPANY
As Amended May 6, 1980
ARTICLE I
SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of shareholders of the
Company for the election of directors, the consideration of reports to be laid
before such meeting, and the transaction of such other business as may properly
be brought before such meeting shall be held during the month of April or of May
in each year, at such date and hour and at such place within or without the
State of Ohio, as the Board of Directors may designate and as is specified in
the notice of the meeting, and, if not so designated, then on the first Tuesday
in May at 1:00 o'clock P.M., at the principal office of the Company in Sidney,
Ohio.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders of
the Company may be held on any business day, when called by the Chairman of the
Board, or by the President, or by the Board of Directors acting at a meeting, or
by a majority of the directors acting without a meeting, or by the persons who
hold thirty-five percent of all the shares outstanding and entitled to vote
thereat. Upon request in writing delivered either in person or by registered
mail to the President or the Secretary by any persons entitled to call a meeting
of shareholders, such officer shall forthwith cause to be given to the
shareholders entitled thereto notice of a meeting to be held on a date not less
than ten or more than sixty days after the receipt of such request, as such
officer may fix. If such notice is not given within thirty days after the
delivery or mailing of such request, the persons calling the meeting may fix the
time of the meeting and give notice thereof in the manner provided by law or as
provided in these Regulations, or cause such notice to be given by any
designated representative. Each special meeting shall be called to convene
between nine o'clock A.M. and four o'clock P.M. and shall be held at the
principal office of the Company, unless the same is called by the directors,
acting with or without a meeting, in which case such meeting may be held at any
place within or without the State of Ohio designated by the Board of Directors
and specified in the notice of such meeting.
SECTION 3. NOTICE OF MEETINGS. Not less than ten or more than sixty
days before the date fixed for a meeting of shareholders, written notice stating
the time, place, and purposes of such meeting shall be given by or at the
direction of the Secretary, an Assistant Secretary, or any other person or
persons required or permitted by these Regulations to give such notice. The
notice shall be given by personal delivery or by mail to each shareholder
entitled to notice of the meeting who is of record as of the day next preceding
the day on which notice is given or, if a record date therefor is duly fixed, of
record as of said date; if mailed, the notice shall be addressed to the
shareholders at their respective addresses as they appear on the records of the
Company. Notice of the time, place, and purposes of any meeting of shareholders
may be waived in writing, either before or after
<PAGE> 2
the holding of such meeting, by any shareholders, which writing shall be filed
with or entered upon the records of the meeting. The attendance of any
shareholder at any such meeting without protesting, prior to or at the
commencement of the meeting, the lack of proper notice shall be deemed to be a
waiver by him of notice of such meeting.
SECTION 4. QUORUM; ADJOURNMENT. The shareholders present in person or
by proxy at any meeting, annual or special, for the election of directors or
consideration of reports, shall constitute a quorum for that purpose; but to
constitute a quorum at any annual or special meeting for any other purpose,
there shall be present in person or by proxy the holders of shares entitling
them to exercise a majority of the voting power; but less than a quorum at any
meeting may adjourn from time to time, until a quorum can be obtained; if any
meeting is adjourned, notice of such adjournment need not be given if the time
and place to which such meeting is adjourned are fixed and announced at such
meeting.
SECTION 5. PROXIES. Persons entitled to vote shares or to act with
respect to shares may vote or act in person or by proxy. The person appointed as
proxy need not be a shareholder. Unless the writing appointing a proxy otherwise
provides, the presence at a meeting of the person having appointed a proxy shall
not operate to revoke the appointment. Notice to the Company, in writing or in
open meeting, of the revocation of the appointment of a proxy shall not affect
any vote or act previously taken or authorized.
SECTION 6. APPROVAL AND RATIFICATION OF ACTS OF OFFICERS AND BOARD OF
DIRECTORS. Except as otherwise provided by the Articles of Incorporation or by
law, any contract, act, or transaction, prospective or past, of the Company, or
of the Board of Directors, or of the officers may be approved or ratified by the
affirmative vote at a meeting of the shareholders, or by the written consent,
with or without a meeting, of the holders of record of shares entitling them to
exercise a majority of the voting power of the Company, and such approval or
ratification shall be as valid and binding as though affirmatively voted for or
consented to by every shareholder of the Company.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. NUMBER AND CLASSIFICATION; ELECTION; TERM OF OFFICE. The
Board of Directors shall be divided into three classes; each class shall consist
of such number of directors, not fewer than three, (a) as the shareholders, at
any meeting of shareholders called for the purpose of electing directors at
which a quorum is present, by the affirmative vote of the holders of a majority
of the shares represented at the meeting and entitled to vote on the proposal,
may determine, or (b) as the directors, by the vote of a majority of the
directors then in office, may determine, except that, after the number of
directors in any class has been fixed by the shareholders, the directors may not
increase or decrease that number by more than one. Unless so determined by the
shareholders or by the directors, each class shall consist of three directors.
Whenever the shareholders or the directors
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<PAGE> 3
shall have so determined the number of members of a class, that number shall be
deemed the authorized number of members of that class until the number shall be
changed in the manner set forth herein. At each annual election the directors
elected to the class whose term shall expire in that year shall hold office for
a term of three years and until their respective successors are elected. In case
of any increase in the number of directors of any class, any additional
directors elected to that class shall hold office for a term that shall coincide
with the full term or the remainder of the term, as the case may be, of that
class.
SECTION 2. VACANCIES. In the case of any increase in the number of
directors of any class, any additional director elected to that class shall hold
office for a term that shall coincide with the term of that class. At a meeting
of shareholders at which directors are to be elected, only persons nominated as
candidates for a class of directors shall be eligible for election as directors
of that class. In the event of the occurrence of any vacancy or vacancies in the
Board of Directors, however caused, the remaining directors then in office may,
by the vote of a majority of their members, fill any vacancy for the unexpired
term.
SECTION 3. RESIGNATIONS. Any director may resign at any time by oral
statement to that effect made at a meeting of the Board of Directors or in a
writing to that effect delivered to the Secretary, such resignation to take
effect immediately or at such other time as the director may specify.
SECTION 4. ORGANIZATION MEETING. Immediately after each annual meeting
of the shareholders, the Board of Directors shall hold an organization meeting
for the purpose of electing officers and transacting any other business. Notice
of such meeting need not be given.
SECTION 5. REGULAR MEETINGS. Regular meetings of the Board of Directors
may be held at such times and places as may be provided for in bylaws or
resolutions adopted by the Board of Directors and upon such notice, if any, as
shall be so provided.
SECTION 6. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be held at any time upon call by the Chairman of the Board or the President
or a Vice President or any two directors. Written notice of the time and place
of each such meeting shall be given to each director either by personal delivery
or by mail, telegram, or cablegram at least two days before the meeting, which
notice need not specify the purposes of the meeting; provided, however, that
attendance of any director at any such meeting without protesting, prior to or
at the commencement of the meeting, the lack of proper notice shall be deemed to
be a waiver by him of notice of such meeting and such notice may be waived in
writing, either before or after the holding of such meeting, by any director,
which writing shall be filed with or entered upon the records of the meeting.
Unless otherwise indicated in the notice thereof, any business may be transacted
at any organization, regular, or special meeting.
SECTION 7. QUORUM; ADJOURNMENT. A quorum of the Board of Directors
shall consist of a majority of the directors then in office; provided, that a
majority of the directors present at a meeting duly held, whether or not a
quorum is present, may adjourn such meeting from time to time; if any
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<PAGE> 4
meeting is adjourned, notice of such adjournment need not be given if the time
and place to which such meeting is adjourned are fixed and announced at such
meeting. At each meeting of the Board of Directors at which a quorum is present,
all questions and business shall be determined by a majority vote of those
present except as in these Regulations otherwise expressly provided.
SECTION 8. ACTION WITHOUT A MEETING. Any action which may be authorized
or taken at a meeting of the Board of Directors may be authorized or taken
without a meeting in a writing or writings signed by all of the directors, which
writing or writings shall be filed with or entered upon the records of the
Company.
SECTION 9. COMMITTEES. The Board of Directors may at any time appoint
from its members an Executive, Finance, Compensation or other committee or
committees, consisting of such number of members, not less than three, as the
Board of Directors may deem advisable, together with such alternates as the
Board of Directors may deem advisable, to take the place of any absent member or
members at any meeting of such committee. Each such member and each such
alternate shall hold office during the pleasure of the Board of Directors. Any
such committee shall act only in the intervals between meetings of the Board of
Directors and shall have such authority of the Board of Directors as may, from
time to time, be delegated by the Board of Directors, except the authority to
fill vacancies in the Board of Directors or in any committee of the Board of
Directors. Subject to the aforesaid exceptions, any person dealing with the
Company shall be entitled to rely upon any act or authorization of an act by any
such committee, to the same extent as an act or authorization of the Board of
Directors. Each committee shall keep full and complete records of all meetings
and actions, which shall be open to inspection by the directors. Unless
otherwise ordered by the Board of Directors, any such committee may prescribe
its own rules for calling and holding meetings, and for its own method of
procedure, and may act by a majority of its members at a meeting or without a
meeting by a writing or writings signed by all of its members.
SECTION 10. BYLAWS. The Board of Directors may adopt bylaws for its own
government, not inconsistent with the Articles of Incorporation or these
Regulations.
ARTICLE III
OFFICERS
SECTION 1. ELECTION AND DESIGNATION OF OFFICERS. The Board of
Directors, at its organization meeting, may elect a Chairman of the Board and
shall elect a President, a Secretary, a Treasurer, and, in its discretion, at
any meeting of the Board of Directors, may elect one or more Vice Presidents,
one or more Assistant Secretaries, one or more Assistant Treasurers, and such
other officers as the Board of Directors may deem necessary. The Chairman of the
Board and the President shall be directors, but no one of the other officers
need be a director. Any two or more of such offices may be held by the same
person, but no officer shall execute, acknowledge, or verify any instrument in
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<PAGE> 5
more than one capacity, if such instrument is required to be executed,
acknowledged, or verified by two or more officers.
SECTION 2. TERM OF OFFICE; VACANCIES. The officers of the Company shall
hold office until the next organization meeting of the Board of Directors and
until their successors are elected, except in case of resignation, removal from
office, or death. The Board of Directors may remove any officer at any time with
or without cause by a majority vote of the directors then in office. Any vacancy
in any office may be filled by the Board of Directors.
SECTION 3. CHAIRMAN OF THE BOARD. The Chairman of the Board, if any,
shall preside at all meetings of the Board of Directors and shall have such
other authority and duties as may be delegated or prescribed by the Board of
Directors.
SECTION 4. PRESIDENT. The President shall preside at all meetings of
the shareholders and shall preside at all meetings of the Board of Directors,
except for meetings of the Board of Directors at which the Chairman of the
Board, if any, presides in accordance with the preceding Section. Subject to
directions of the Board of Directors, the President shall have general executive
supervision over the property, business, and affairs of the Company. He may
execute all authorized deeds, mortgages, bonds, contracts, and other obligations
in the name of the Company and shall have such other authority and duties as may
be delegated or prescribed by the Board of Directors.
SECTION 5. VICE PRESIDENTS. The Vice Presidents, in the order
designated, shall perform all of the duties of the President in case of the
absence or disability of the latter or when circumstances prevent the latter
from acting and shall have such other authority and duties as may be delegated
or prescribed by the Board of Directors. The powers of such Vice Presidents to
execute all authorized deeds, mortgages, bonds, contracts, and other obligations
in the name of the Company shall be coordinate with like powers of the President
and any such instrument so executed by any of such Vice Presidents shall be as
valid and binding as though executed by the President.
SECTION 6. SECRETARY. The Secretary shall keep the minutes of meetings
of the shareholders and of the Board of Directors. He shall keep such books as
may be required by the Board of Directors, shall give notices of shareholders'
meetings and of Board meetings required by law, or by these Regulations, or
otherwise, and shall have such other authority and duties as may be delegated or
prescribed by the Board of Directors.
SECTION 7. TREASURER. The Treasurer shall receive and have in charge
all money, bills, notes, bonds, stocks in other corporations, and similar
property belonging to the Company, and shall do with the same as may be ordered
by the Board of Directors. He shall keep accurate financial accounts and hold
the same open for the inspection and examination of the directors and shall have
such other authority and duties as may be delegated or prescribed by the Board
of Directors.
5
<PAGE> 6
SECTION 8. OTHER OFFICERS. The Assistant Secretaries and Assistant
Treasurers, if any, and any other officers whom the Board of Directors may elect
shall have such authority and duties as may be delegated or prescribed by the
Board of Directors.
SECTION 9. DELEGATION OF DUTIES. The Board of Directors is authorized
to delegate the duties of any officer to any other officer and generally to
control the action of the officers and to require the performance of duties in
addition to those mentioned herein.
ARTICLE IV
COMPENSATION
SECTION 1. DIRECTORS AND MEMBERS OF COMMITTEES. Members of the Board of
Directors and members of any committee of the Board of Directors shall, as such,
receive such compensation, which may be either a fixed sum for attendance at
each meeting of the Board of Directors, or at each meeting of the committee, or
stated compensation payable at intervals, or shall otherwise be compensated as
may be determined by the Board of Directors or any committee of the Board of
Directors, which compensation may be in different amounts for various members of
the Board of Directors or any committee. No member of the Board of Directors and
no member of any committee of the Board of Directors shall be disqualified from
being counted in the determination of a quorum or from acting at any meeting of
either the Board of Directors or a committee of the Board of Directors by reason
of the fact that matters affecting his own compensation as a director, member of
a committee of the Board of Directors, officer, or employee are to be
determined.
SECTION 2. OFFICERS AND EMPLOYEES. The compensation of officers and
employees of the Company, or the method of fixing such compensation, shall be
determined by or pursuant to authority conferred by the Board of Directors or
any committee of the Board of Directors. Such compensation may include pension,
disability, and death benefits, and may be by way of fixed salary, or on the
basis of earnings of the Company, or any combination thereof, or otherwise, as
may be determined or authorized from time to time by the Board of Directors or
any committee of the Board of Directors.
ARTICLE V
INDEMNIFICATION OF DIRECTORS AND OFFICERS
SECTION 1. THIRD PARTY ACTIONS. The Company shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (other than an action or suit by or in the
right of the Company), by reason of the fact that he is or was a director,
officer, or employee of the Company, or is or was serving at the request of the
Company as a director, trustee, officer, or
6
<PAGE> 7
employee of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys' fees), judgments, fines, and
amounts paid in settlement actually and reasonably incurred by him in connection
with the action, suit, or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, or conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner that he
reasonably believed to be in or not opposed to the best interests of the Company
or that, with respect to any criminal action or proceeding, he had reasonable
cause to believe that his conduct was unlawful.
SECTION 2. DERIVATIVE ACTIONS. The Company shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending, or completed action or suit by or in the right of the Company to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, or employee of the Company, or is or was serving at the
request of the Company as a director, trustee, officer, or employee of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company, except that no indemnification shall be made in
respect of any claim, issue, or matter as to which that person shall have been
finally adjudged to be liable for negligence or misconduct in the performance of
his duty to the Company unless and only to the extent that the Court of Common
Pleas or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, that person is fairly and reasonably entitled to
indemnity for such expenses as the Court of Common Pleas or the other court
shall deem proper.
SECTION 3. RIGHTS AFTER SUCCESSFUL DEFENSE. To the extent that a
director, trustee, officer, or employee has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to in Section 1
or Section 2, or in defense of any claim, issue, or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
SECTION 4. OTHER DETERMINATIONS OF RIGHTS. Except in a situation
governed by Section 3, any indemnification under Section 1 or Section 2 (unless
ordered by a court) shall be made by the Company only as authorized in the
specific case upon a determination that indemnification of the director,
trustee, officer, or employee is proper in the circumstances because he has met
the applicable standard of conduct set forth in Section 1 or Section 2. The
determination shall be made (a) by a majority vote, at a meeting or directors,
of those directors who constitute a quorum and who also were not and are not
parties to or threatened with any such action, suit, or proceeding or (b), if
such a quorum is not obtainable (or even if obtainable) and a majority of
disinterested directors so directs, in a written opinion by independent legal
counsel (compensated by the Company) or (c) by the affirmative vote in person or
by proxy of the holders of record of a majority of the shares held
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<PAGE> 8
by persons who were not and are not parties to or threatened with any such
action, suit, or proceeding and who are entitled to vote in the election of
directors, without regard to voting power that may thereafter exist upon a
default, failure, or other contingency or (d) by the Court of Common Pleas or
the court in which such action, suit, or proceeding was brought.
SECTION 5. ADVANCES OF EXPENSES. Expenses (including attorneys' fees)
incurred in defending any action, suit, or proceeding referred to in Section 1
or Section 2 may be paid by the Company in advance of final disposition of the
action, suit, or proceeding, as authorized by the Board of Directors in the
specific case, upon receipt of an undertaking by or on behalf of the director,
trustee, officer, or employee to repay the amount unless it shall ultimately be
determined that his is entitled to be indemnified by the Company.
SECTION 6. PURCHASE OF INSURANCE. The Company may purchase and maintain
insurance on behalf of any person who is or was a director, officer, or employee
of the Company, or is or was serving at the request of the Company as a
director, trustee, officer, or employee of another corporation, partnership,
joint venture, trust, or other enterprise, against any liability asserted
against him and incurred by him in any capacity, or arising out of his status as
such, whether or not the Company would have the power to indemnify him against
liability under the provisions of this Article or of the Ohio General
Corporation Law.
SECTION 7. MERGERS. In the case of a merger into this Company of a
constituent corporation that, if its separate existence had continued, would
have been required to indemnify directors, trustees, officers, or employees in
specified situations, any person who served as a director, officer, or employee
of the constituent corporation, or served at the request of the constituent
corporation as a director, trustee, officer, or employee of another corporation,
partnership, joint venture, trust, or other enterprise, shall be entitled to
indemnification by this Company (as the surviving corporation) to the same
extent he would have been entitled to indemnification by the constituent
corporation if its separate existence had continued.
SECTION 8. NON-EXCLUSIVITY; HEIRS. The indemnification provided by this
Article shall not be deemed exclusive of any other rights to which a person
seeking indemnification may be entitled as a matter of law or under the
Articles, this Code of Regulations, any agreement, vote of shareholders or
disinterested directors, any insurance purchased by the Company, or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding an office, and shall continue as to a person who has ceased to be
a director, trustee, officer, or employee and shall inure to the benefit of the
heirs, executors, and administrators of such a person.
8
<PAGE> 9
ARTICLE VI
RECORD DATES
For any lawful purpose, including, without limitation, the
determination of the shareholders who are entitled to:
(1) receive notice of or to vote at a meeting of shareholders;
(2) receive payment of any dividend or distribution;
(3) receive or exercise rights of purchase of or subscription for, or
exchange or conversion of, shares or other securities, subject to contract
rights with respect thereto; or
(4) participate in the execution of written consents, waivers, or
releases;
the Board of Directors may fix a record date which shall not be a date earlier
than the date on which the record date is fixed and, in the cases provided for
in clauses (1), (2), and (3) above, shall not be more than sixty days preceding
the date of the meeting of shareholders, or the date fixed for the payment of
any dividend or distribution, or the date fixed for the receipt or the exercise
of rights, as the case may be. The record date for the purpose of the
determination of the shareholders who are entitled to receive notice of or to
vote at a meeting of shareholders shall continue to be the record date for all
adjournments of such meeting, unless the Board of Directors or the persons who
shall have fixed the original record date shall, subject to the limitations set
forth in this Article, fix another date, and, in case a new record date is so
fixed, notice thereof and of the date to which the meeting shall have been
adjourned shall be given to shareholders of record as of such date in accordance
with the same requirements as those applying to a meeting newly called. The
Board of Directors may close the share transfer books against transfers of
shares during the whole or any part of the period provided for in this Article,
including the date of the meeting of shareholders and the period ending with the
date, if any, to which adjourned. If no record date is fixed therefor, the
record date for determining the shareholders who are entitled to receive notice
of or to vote at a meeting of shareholders shall be the date next preceding the
day on which notice is given, or the date next preceding the day on which the
meeting is held, as the case may be.
ARTICLE VII
CERTIFICATES FOR SHARES
SECTION 1. FORM OF CERTIFICATES AND SIGNATURES. Each holder of shares
shall be entitled to one or more certificates, signed by the Chairman of the
Board or the President or a Vice President and by the Secretary, an Assistant
Secretary, the Treasurer, or an Assistant Treasurer of the Company, which shall
certify the number and class of shares held by him in the Company, but no
certificate
9
<PAGE> 10
for shares shall be executed or delivered until such shares are fully paid. When
such a certificate is countersigned by an incorporated transfer agent or
registrar, the signature of any of said officers of the Company may be
facsimile, engraved, stamped, or printed. Although any officer of the Company
whose manual or facsimile signature is affixed to such a certificate ceases to
be such officer before the certificate is delivered, such certificate
nevertheless shall be effective in all respects when delivered.
SECTION 2. TRANSFER OF SHARE. Shares of the Company shall be
transferable upon the books of the Company by the holders thereof, in person, or
by a duly authorized attorney, upon surrender and cancellation of certificates
for a like number of shares of the same class or series, with duly executed
assignment and power of transfer endorsed thereon or attached thereto, and with
such proof of the authenticity of the signatures to such assignment and power of
transfer as the Company or its agents may reasonable require.
SECTION 3. LOST, STOLEN, OR DESTROYED CERTIFICATES. The Company may
issue a new certificate for shares in place of any certificate theretofore
issued by it and alleged to have been lost, stolen, or destroyed, and the Board
of Directors may, in its discretion, require the owner, or his legal
representatives, to give the Company a bond containing such terms as the Board
of Directors may require to protect the Company or any person injured by the
execution and delivery of a new certificate.
SECTION 4. TRANSFER AGENT AND REGISTRAR. The Board of Directors may
appoint, or revoke the appointment of, transfer agents and registrars and may
require all certificates for shares to bear the signatures of such transfer
agents and registrars, or any of them.
ARTICLE VIII
AUTHORITY TO TRANSFER AND VOTE SECURITIES
The Chairman of the Board, the President, any Vice President, the
Secretary, and the Treasurer of the Company are each authorized to sign the name
of the Company and to perform all acts necessary to effect a transfer of any
shares, bonds, other evidences of indebtedness or obligations, subscription
rights, warrants, and other securities of another corporation owned by the
Company and to issue the necessary powers of attorney for the same; and each
such officer is authorized, on behalf of the Company, to vote such securities,
to appoint proxies with respect thereto, and to execute consents, waivers, and
releases with respect thereto, or cause any such action to be taken.
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<PAGE> 11
ARTICLE IX
FISCAL YEAR
The fiscal year of the Company shall end on the thirty-first day of
December in each year or on such other day as may be fixed from time to time by
the Board of Directors.
ARTICLE X
CORPORATE SEAL
The corporate seal of this Company shall be circular in form and shall
contain the name of the Company. Failure to affix the corporate seal to any
instrument executed on behalf of the Company shall not affect the validity of
such instrument.
ARTICLE XI
AMENDMENTS
The Regulations of the Company may be amended, or new Regulations may
be adopted, by the shareholders at a meeting held for such purpose, by the
affirmative vote of the holders of shares entitling them to exercise a majority
of the voting power on such proposal or, without a meeting, by the written
consent of the holders of shares entitling them to exercise a majority of the
voting power on such proposal. If the Regulations are amended or new Regulations
are adopted without a meeting of the shareholders, the Secretary of the Company
shall mail a copy of the amendment or the new Regulations to each shareholder
who would have been entitled to vote thereon and did not participate in the
adoption thereof.
11
<PAGE> 1
Exhibit 4.3
THE MONARCH MACHINE TOOL COMPANY
--------------------------------
1999 LONG-TERM INCENTIVE STOCK PLAN
-----------------------------------
<PAGE> 2
1999 LONG-TERM INCENTIVE STOCK PLAN
-----------------------------------
SECTION 1. PURPOSE
- ------------------
The purpose of this 1999 Long-Term Incentive Stock Plan (the
"Plan") is to promote the long-term success of The Monarch Machine Tool Company
(the "Company") by providing financial incentives to key employees, officers and
directors of the Company and its subsidiaries who are in positions to make
significant contributions toward such success. The Plan is designed to attract
individuals of outstanding ability to employment with the Company and its
subsidiaries and to encourage key employees to acquire a proprietary interest in
the Company through stock ownership, to continue employment with the Company and
its subsidiaries, and to render superior performance during such employment. To
accomplish the purposes of the Plan, the Board of Directors of the Company
establishes the Plan and authorizes the Committee referred to in Section 4 to
administer the Plan in such manner and on such conditions as it deems
appropriate, subject to the provisions of the Plan.
SECTION 2. DEFINITIONS
- ----------------------
(a) "Board" means the Board of Directors of the Company.
(b) "Change of Control" shall mean and be deemed to have
occurred if (i) any "person," as such term is defined in Section 13(d) of the
Securities Exchange Act of 1934 (the "Act"), other than the Company or an entity
then controlled by the Company is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities except,
however, in determining whether the 20% threshold has been attained by a
particular person, any voting securities of the Company which such person
acquires directly from the Company (other than pursuant to a stock dividend or
split) shall not be taken into consideration in calculating such person's
percentage of ownership of the voting power of the Company; (ii) any "person"
(as such term is defined at Section 13(d) of the Act) other than the Company or
an entity then controlled by the Company is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing 35% or more of
the combined voting power of the Company's then outstanding securities,
including securities such person may have acquired directly from the Company;
(iii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board cease for any reason to constitute
at least a majority thereof unless the election, or the nomination for election
by the Company's shareholders, of each new Director was approved by a vote of at
least two-thirds of the Directors then still in office who were Directors at the
beginning of the period; (iv) the Company merges or consolidates with another
corporation and an entity controlled by the Company immediately prior to the
merger or consolidation is not the surviving entity or if the Company is the
surviving entity, holders of 80% or more of the voting power of the Company
immediately prior to the merger or consolidation do not own, immediately after
the merger or consolidation, 65% or more of the voting power of the surviving
entity; or (v) a sale, lease, exchange, or other disposition of all or
substantially all of the assets of the Company takes place.
<PAGE> 3
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Committee" means the committee referred to in Section 4.
(e) "Company" means The Monarch Machine Tool Company, an Ohio
corporation, and when used with reference to employment of a Participant,
Company includes any Subsidiary of the Company.
(f) "Director" means a member of the Board of Directors of the
Company.
(g) "Employee" means any key employee of the Company or any of
its Subsidiaries.
(h) "Fair Market Value" means the average of the high and low
prices of a Share on the date when the value of a Share is to be determined, as
reported on the New York Stock Exchange-Composite Transactions Tape; or, if no
sale of Shares is reported on such date, then the next preceding date on which a
sale occurred; or if the Shares are no longer listed on such exchange, the
determination of such value shall be made by the Committee in accordance with
applicable provisions of the Code and related regulations promulgated under the
Code.
(i) "Gross Misconduct" shall mean (a) the willful and
continued failure by participant to substantially perform his duties with the
Company or a Subsidiary of the Company (other than any such failure resulting
from his physical or mental illness or other physical or mental incapacity),
after a demand for substantial performance is delivered to participant by the
Company which specifically identifies the manner in which the Company believes
that participant has not substantially performed his duties, or (b) the willful
engaging by participant in gross misconduct which is materially and demonstrably
injurious to the Company or a Subsidiary of the Company resulting or intended to
result, directly or indirectly, in substantial personal gain or substantial
personal enrichment at the expense of the Company or a Subsidiary of the
Company.
(j) "Incentive Award" means an Option, Restricted Share Award
or Performance Award granted under the Plan.
(k) "Incentive Stock Option" means an Option that is an
Incentive Stock Option, as defined in Section 422 of the Code.
(l) "Nonqualified Stock Option" means an Option that is not an
Incentive Stock Option.
(m) "Option" means a right to purchase Shares at a specified
price; "Optionee" means the holder of an Option.
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(n) "Participant" means an Employee selected to receive an
Incentive Award or Director, whether or not employed by the Company, selected to
receive an Incentive Award..
(o) "Performance Award" means a right to receive Restricted
Shares, Shares, cash, or a combination thereof, contingent upon the attainment
of performance objectives determined in the discretion of the Committee as more
fully set forth at Section 8 hereof.
(p) "Reload Option" shall have the meaning ascribed to it at
Section 6(f).
(q) "Restricted Share Award" means a right to receive Shares
that is nontransferable and subject to substantial risk of forfeiture until
specific conditions are met; "Restricted Shares" means Shares which are the
subject of a Restricted Share Award; and "Restricted Period" shall have the
meaning ascribed to it at Section 7(a).
(r) "Shares" means the Common Shares of the Company.
(s) "Subsidiary" means any company more than 50% of the voting
stock of which is owned or controlled, directly or indirectly, by the Company.
(t) "Voting Shares" means any securities of the Company which
vote generally in the election of directors of the Company.
SECTION 3. SHARES SUBJECT TO THE PLAN
- -------------------------------------
(a) MAXIMUM NUMBER-AGGREGATE. The maximum number of Shares
that may be subject to Incentive Awards granted pursuant to the Plan shall be
One Hundred Seventy-five Thousand (175,000), subject to adjustment in accordance
with Section 3(c). The Shares which may be issued pursuant to Incentive Awards
may be authorized and unissued Shares or Shares held in the Company's treasury.
In the event of a lapse, expiration, termination, or cancellation of any
Incentive Award granted under the Plan without the issuance of Shares or the
payment of cash, or if Shares are issued under a Restricted Share Award and are
reacquired by the Company as a result of rights reserved upon the issuance
thereof, the Shares subject to or reserved for such Incentive Award shall no
longer be charged against the 175,000 Share maximum and may again be used for
new Incentive Awards.
(b) MAXIMUM NUMBER-PER EMPLOYEE. The maximum Incentive Awards
that may be granted to each Employee in each fiscal year of the Company
commencing on or after January 1, 1999, is as follows:
(i) With respect to Options, no more than 50,000
may be granted;
(ii) With respect to Restricted Shares (not issued
in connection with Performance Awards), no more than $400,000
of such Shares may be granted; and
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(iii) With respect to Performance Awards, no more
than $400,000 of Performance Shares may be granted (based on
the Fair Market Value of Shares on the date the award is
granted, not the date the award is earned or paid).
(c) RECAPITALIZATION ADJUSTMENT. In the event of any change
affecting the Shares by reason of any share dividend or split, recapitalization,
merger, consolidation, spin-off, combination or exchange of Shares or other
corporate change, or any distribution to a holder of Shares other than ordinary
cash dividends, the Committee shall make such adjustment, if any, as it may deem
appropriate to avoid dilution in the number and kind of shares authorized for
issuance under the Plan, in the number and kind of shares covered by Incentive
Awards and, in the case of Options, in the option price.
SECTION 4. ADMINISTRATION
- -------------------------
(a) COMMITTEE. The Plan shall be administered by a Committee
of the Board, comprised of three or more directors, who shall from time to time
be appointed by, and serve at the pleasure of, the Board. Each director serving
on the Committee shall be a "non-employee director" within the meaning of Rule
16b-3 promulgated under the Securities Exchange Act of 1934 and an "outside
director" within the meaning of Code Section 162(m).
(b) AUTHORITY. The Committee shall have and exercise all the
power and authority granted to it under the Plan. Subject to the provisions of
the Plan, the Committee shall have authority in its sole discretion from time to
time (i) to designate the persons to whom Incentive Awards are granted; (ii) to
prescribe such limitations, restrictions and conditions upon any such awards as
the Committee shall deem appropriate, including establishing and administering
Performance Goals, as defined in Section 8(a), and certifying whether the
Performance Goals have been attained; (iii) to interpret the Plan and to adopt,
amend and rescind rules and regulations relating to the Plan; and (iv) to make
all other determinations and take all other actions necessary or advisable for
the implementation and administration of the Plan.
(c) COMMITTEE ACTIONS. A majority of the Committee shall
constitute a quorum, and the acts of a majority of the members present at a
meeting at which a quorum is present, or acts reduced to or approved in writing
by all members of the Committee, shall be acts of the Committee. All such
actions shall be final, conclusive, and binding. No member of the Committee
shall be liable for any action taken or decision made in good faith relating to
the Plan or any Incentive Award thereunder.
(d) INTERPRETATION AND CONSTRUCTION. Any provision of this
Plan to the contrary notwithstanding, (i) certain designated Incentive Awards
under this Plan are intended to qualify as performance-based compensation within
the meaning of Code Section 162(m)(4)(C) and (ii) any provision of the Plan that
would prevent a designated Incentive Award from so qualifying shall be
administered, interpreted and construed to carry out such intention and any
provision that cannot be so administered, interpreted and construed shall to
that extent be disregarded.
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<PAGE> 6
SECTION 5. ELIGIBILITY AND INCENTIVE AWARDS
(a) ELIGIBLE PERSONS. The Committee may grant Incentive Awards
to key employees, officers, and Directors.
(b) INCENTIVE AWARDS. Incentive Awards may be granted in any
one or more combinations of (i) Incentive Stock Options, (ii) Nonqualified Stock
Options, (iii) Restricted Share Awards and (iv) Performance Awards. All
Incentive Awards shall be subject to such other terms and conditions as may be
established by the Committee. Determinations by the Committee under the Plan,
including without limitation, designation of Participants, the form, amount and
timing of Incentive Awards, the terms and provisions of Incentive Awards, and
the written agreements evidencing Incentive Awards, need not be uniform and may
be made selectively among Employees who receive, or are eligible to receive,
Incentive Awards hereunder, whether or not such Employees are similarly
situated.
(c) EMPLOYMENT. The Plan and the Incentive Awards granted
hereunder shall not confer upon any Employee the right to continued employment
with the Company or affect in any way the right of the Company to terminate the
employment of an Employee at any time and for any reason.
SECTION 6. OPTIONS
- ------------------
The Committee may grant Incentive Stock Options and
Nonqualified Stock Options and such Options shall be subject to the following
terms and conditions and such other terms and conditions as the Committee may
prescribe:
(a) OPTION PRICE. The option price per Share with respect to
each Option shall be determined by the Committee but shall not be less than the
Fair Market Value of a Share on the date the Option is granted.
(b) PERIOD OF OPTION. The period of each Option shall be fixed
by the Committee but in no case may an option be exercised more than ten years
after the date of its grant.
(c) EXERCISE OF OPTION. Subject to the provisions of Section
6(d) relating to continuous employment, an Option may be exercised with respect
to all Shares covered thereby or may be exercised with respect to a specified
number of Shares over a specified period or periods as determined by the
Committee. Any Shares not purchased during a specified period may be purchased
thereafter at any time prior to the expiration of the Option unless the
Committee determines otherwise. The Committee may at any time remove or alter
any restriction on exercise of an Option which was imposed by the Committee.
(d) TERMINATION OF EMPLOYMENT. No Option granted to an
Employee may be exercised under the Plan unless the Optionee has been
continuously employed by the Company
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<PAGE> 7
from the date of grant of the Option to the date of exercise except that an
Option may, subject to the ten year limitation at Section 6(b), be exercised (i)
within 30 days after the Optionee ceases to be employed by the Company if the
cause of cessation of employment was other than retirement, disability, death or
termination of employment by the Company for Gross Misconduct; (ii) within one
year of cessation of employment in the case of early retirement except that the
Committee may, in its discretion, in the case of early retirement, extend the
period of exercise to a date not more than three years after cessation of
employment; and (iii) within three years of cessation of employment in the case
of normal retirement, death or disability. After termination of employment
Options may be exercised only to the extent they could have been exercised on
the date of the Optionee's termination of employment. Whether authorized leave
of absence or absence for military or governmental service shall constitute a
termination of employment shall be determined by the Committee.
(e) LIMITS ON INCENTIVE STOCK OPTIONS. Except as may be
permitted by the Code, the Fair Market Value of Shares (determined at the time
of grant of Options) as to which Incentive Stock Options held by an Optionee
first become exercisable in any calendar year shall not exceed $100,000, or such
other maximum amount permitted by the Code. In addition, no Incentive Stock
Option shall be granted to an Employee who possesses, directly or indirectly
(within the meaning of Code Section 424(d)), at the time of grant more than 10%
of the combined voting power of all classes of stock of the Company unless the
option price is at least 110% of the Fair Market Value of the Shares subject to
the Option on the date such Option is granted and such Incentive Stock Option is
not exercisable after the expiration of five years from the date of grant.
(f) RELOAD OPTION FEATURE. Any Option granted under the Plan
may contain a feature providing for, upon the exercise thereof, the grant of a
Reload Option subject to and in accordance with the provisions of this Section
(6)(f). Whenever the holder of any Option containing a reload feature (the
"Original Option") outstanding under this Plan exercises such Original Option,
the holder of such Original Option (except as provided in Section 6(f)(4) below)
shall be granted on the date of such exercise (the "Reload Date") a new option
(the "Reload Option") for a number of Shares equal to number of Shares used by
the Optionee as full or partial payment of the option price for such Original
Option and used for purposes of tax withholding in accordance with Section 11(b)
hereof. The following additional terms and provisions shall apply to Reload
Options granted under the Plan:
(i) OPTION PRICE. The option price per Share covered
by a Reload Option shall be an amount equal to the Fair Market
Value per Share as of the Reload Date.
(ii) EXPIRATION DATE. The option exercise period
shall expire on, and the Reload Option shall no longer be
exercisable after, the date the Original Option would have
expired if it had not been exercised.
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<PAGE> 8
(iii) VESTING PERIOD. Reload Options granted under
this Section 6(f) shall vest and become exercisable with
respect to all Shares covered thereby on the third anniversary
of the Reload Date or such earlier date as the Committee shall
specify.
(iv) ACTIVE EMPLOYEE. No Reload Option shall be
granted to any person who is not employed by the Company at
the time of exercise of an Original Option.
(g) NOTICE OF EXERCISE AND PAYMENT. An Option granted under
the Plan may be exercised by the Optionee giving written notice of exercise to
the Committee. The Option price for the Shares purchased shall be paid in full
at the time such notice is given. An Option shall be deemed exercised on the
date the Committee receives written notice of exercise, together with full
payment for the Shares purchased. The Option price shall be paid to the Company
either in cash, by delivery to the Company of Shares already-owned by the
Optionee or any combination of cash and such Shares. The Committee may, however,
at any time and in its discretion, adopt guidelines limiting or restricting the
use of already-owned Shares to pay all or any portion of the Option price. In
the event already-owned Shares are used to pay all or a portion of the Option
price, the amount credited to payment of the Option price shall be the Fair
Market Value of the already-owned Shares on the date the Option is exercised.
(h) FRACTIONAL SHARES. No fractional shares shall be issued
pursuant to the exercise of an Option, nor shall any cash payment be made in
lieu of fractional shares.
SECTION 7. RESTRICTED SHARE AWARDS
- ----------------------------------
The Committee may issue Shares to an Employee or Director
which Shares shall be subject to the following terms and conditions and such
other terms and conditions as the Committee may prescribe in connection with the
grant of a Restricted Share Award:
(a) GENERAL. With respect to each grant of Restricted Shares,
the Committee, in its sole discretion, shall determine the period during which
the restrictions set forth at Subsection 7(b) shall apply to the Restricted
Shares (the "Restricted Period").
(b) RESTRICTIONS. At the time of grant of Restricted Shares to
an Employee or Director, a certificate representing the number of Shares granted
shall be registered in his name but shall be held by the Company for the account
of the Employee or Director. The Employee or Director shall have the entire
beneficial ownership interest in, and all rights and privileges of a shareholder
as to, such Restricted Shares, including the right to receive dividends and the
right to vote such Restricted Shares, subject to the following restrictions: (i)
subject to Section 7(c), the Employee shall not be entitled to delivery of the
Share certificate until the expiration of the Restricted Period; (ii) none of
the Restricted Shares may be sold, transferred, assigned, pledged, or otherwise
encumbered or disposed of during the Restricted Period; and (iii) all of the
Restricted Shares shall be forfeited and all rights of the Employee or Director
to such Restricted
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<PAGE> 9
Shares shall terminate without further obligation on the part of the Company
unless the Employee remains in the continuous employment of the Company (or, in
case of a Director, the Director continues as a Director) for the entire
Restricted Period in relation to which such Restricted Shares were granted,
except as provided by Section 7(c). Any Shares received with respect to
Restricted Shares as a result of a recapitalization adjustment pursuant to
Section 3(b) shall be subject to the same restrictions as such Restricted
Shares.
(c)(1) Termination of Employment.
--------------------------
(i) RETIREMENT. If an Employee ceases to be employed
by the Company prior to the end of a Restricted Period by
reason of normal retirement under a retirement plan of the
Company or the Employee otherwise retires with the consent of
the Company, the number of Restricted Shares granted to such
Employee for such Restricted Period shall be reduced in
proportion to the Restricted Period (determined on a quarterly
basis) remaining after the Employee ceases to be an Employee
and all restrictions on such reduced number of Shares shall
lapse. A certificate for such Shares shall be delivered to the
Employee in accordance with the provisions of Section 7(d)
hereof. The Committee may, if it deems appropriate, direct
that the Employee receive a greater number of Shares free of
all restrictions but not exceeding the number of Restricted
Shares then subject to the restrictions of Section 7(b).
(ii) DEATH. If an Employee ceases to be employed by
the Company prior to the end of a Restricted Period by reason
of death, the Restricted Shares granted to such Employee shall
immediately vest in his beneficiary or estate and all
restrictions applicable to such Shares shall lapse. A
certificate for such Shares shall be delivered to the
Employee's beneficiary or estate in accordance with the
provisions of Subsection 7(d).
(iii) ALL OTHER TERMINATIONS. If an Employee ceases
to be an Employee prior to the end of a Restricted Period for
any reason other than retirement or death, the Employee shall
immediately forfeit all Restricted Shares then subject to the
restrictions of Section 7(b) in accordance with the provisions
thereof, except that the Committee may, if it finds that the
circumstances in the particular case so warrant, allow an
Employee whose employment has so terminated to retain any or
all of the Restricted Shares then subject to the restrictions
of Section 7(b) and all restrictions applicable to such
retained shares shall lapse. A certificate for such retained
shares shall be delivered to the Employee in accordance with
the provisions of Section 7(d).
(c)(2) Director Ceases to Hold Office.
-------------------------------
(i) DEATH. If Director ceases to be a Director prior
to the end of a Restricted Period by reason of death, the
Restricted Shares granted to such
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<PAGE> 10
Director shall immediately vest in his beneficiary or estate
and all restrictions applicable to such Shares shall lapse. A
certificate for such Shares shall be delivered to Director's
beneficiary or estate in accordance with the provisions of
Subsection 7(d).
(ii) ALL OTHER TERMINATIONS. If a Director ceases to
be a Director prior to the end of a Restricted Period for any
reason other than death, the Director shall immediately
forfeit all Restricted Shares then subject to the restrictions
of Section 7(b) in accordance with the provisions thereof,
except that the Committee may, if it finds that the
circumstances in the particular case so warrant, allow the
Director whose term of office has so terminated to retain any
or all of the Restricted Shares then subject to the
restrictions of Section 7(b) and all restrictions applicable
to such retained shares shall lapse. A certificate for such
retained shares shall be delivered to the Director in
accordance with the provisions of Section 7(d).
(d) PAYMENT OF RESTRICTED SHARES. At the end of the Restricted
Period or at such earlier time as provided for in Subsection 7(c), all
restrictions applicable to the Restricted Shares shall lapse and a Share
certificate for a number of Shares equal to the number of Restricted Shares,
free of all restrictions, shall be delivered to the Participant or his
beneficiary or estate, as the case may be. The Company shall not be required to
deliver any fractional Share but will pay, in lieu thereof, the Fair Market
Value (measured as of the date the restrictions lapse) of such fractional Share
to the Participant or his beneficiary or estate, as the case may be.
SECTION 8. PERFORMANCE AWARDS
- -----------------------------
The Committee may grant to Employees Performance Awards which
shall be subject to the following terms and conditions and such other terms and
conditions as the Committee may prescribe in connection with the grant of a
Performance Award:
(a) AWARD PERIOD AND PERFORMANCE GOALS. The Committee shall
determine and include in a Performance Award the period of time during which a
Performance Award may be earned ("Award Period"). The Committee shall also
establish performance objectives ("Performance Goals") to be met by the Company,
Subsidiary or division during the Award Period as a condition to payment of the
Performance Award. The Performance Goals may include minimum and optimum
objectives or a single set of objectives.
With respect to Performance Awards that are intended to
qualify as "performance based" within the meaning of Code Section 162(m)(4)(C),
the Committee shall (i) select the Employees for such Incentive Awards, (ii)
establish in writing the applicable performance goals no later than 90 days
after the commencement of the period of service to which the performance goals
relates (or such earlier or later date as may be the applicable deadline for
compensation payable hereunder to qualify as "performance based" within the
meaning of Code Section 162(m)(4)(C)), and (iii) designate the Performance
Awards that are to qualify as "performance based" within the meaning of Code
Section 162(m)(4)(C).
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<PAGE> 11
The Committee shall establish in writing the Performance Goals
for each Award Period which shall be based on any of the following performance
criteria, either alone or in any combination, on either a consolidated or
business unit or divisional level, and which shall include or exclude
discontinued operations and acquisition expenses, as the Committee may
determine: level of sales, earnings per share, income before income taxes and
cumulative effect of accounting changes, income before cumulative effect of
accounting changes, net income, return on assets, return on equity, return on
capital employed, total stockholder return, market valuation, cash flow and
completion of acquisitions. The foregoing criteria shall have any reasonable
definitions that the Committee may specify, which may include or exclude any or
all of the following items, as the Committee may specify: extraordinary, unusual
or non-recurring items; effects of accounting changes; effects of currency
fluctuations; effects of financing activities (e.g., effect on earnings per
share of issuing convertible debt securities); expenses for restructuring or
productivity initiatives; non-operating items; acquisition expenses; and effects
of divestitures. Any such performance criterion or combination of such criteria
may apply to the Participant's award opportunity in its entirety or to any
designated portion or portions of the award opportunity, as the Committee may
specify.
(b) NO DISCRETION. With respect to Performance Awards that are
intended to qualify as "performance based" within the meaning of Code Section
162(m)(4)(C), the Committee has no discretion to increase the amount of the
award due upon attainment of the applicable performance goals. No provision of
this Plan shall preclude the Committee from exercising negative discretion with
respect to any award hereinafter (i.e., to reduce or eliminate the award
payable) within the meaning of Treasury Regulation Section
1.162-27(e)(2)(iii)(A).
(c) PERFORMANCE AWARD EARNED. The Performance Awards shall be
expressed in terms of Shares and referred to as "Performance Shares"or
"Performance Units" as the Committee shall specify. With respect to each
Performance Award, the Committee shall fix the number of allocable Performance
Shares. The level of Performance Goals attained will determine the percentage of
Performance Shares earned for an Award Period. After completion of the Award
Period, the Committee shall certify in writing the extent to which the
Performance Goals and other material terms applicable to such award are
attained. Unless and until the Committee so certifies, the Performance Award
shall not be paid.
(d) PERFORMANCE AWARD PAYMENT. The Committee, in its
discretion, may elect to make payment of the Performance Awards in Restricted
Shares, Shares, cash or any combination of the foregoing. If the Performance
Award is paid in Shares or Restricted Shares, the Company shall issue one Share
or Restricted Share for each Performance Share earned. If the Performance Award
is paid in cash, the cash payable shall be equal to the Fair Market Value of the
Performance Shares earned as of the last day of the Award Period.
(e) REQUIREMENT OF EMPLOYMENT. A grantee of a Performance
Award must remain in the employment of the Company until the completion of the
Award Period in order to be entitled to payment under the Performance Award;
provided that the Committee may, in its sole discretion, provide for a partial
or full payment of the Performance Award that would have
-10-
<PAGE> 12
been payable if the grantee had continued employment for the entire Award
Period, which shall be paid at the same time as would have been paid if no
termination of employment occurred, but only if and to the extent the exercise
of such discretion does not prevent any designated Incentive Award from
qualifying as "performance based" within the meaning of Code Section
162(m)(4)(C).
(f) DIVIDENDS. The Committee may, in its discretion, at the
time of the granting of a Performance Award, provide that any dividends declared
on Shares during the Award Period, and which would have been paid with respect
to Performance Shares had they been owned by a grantee, be (i) paid to the
grantee, or (ii) accumulated for the benefit of the grantee and used to increase
the number of Performance Shares of the grantee.
(g) DELAYED PAYMENT. To the extent that the Committee, in its
sole discretion, determines that the payment of any Performance Award is not
deductible by the Company based on Code Section 162(m), the Company shall delay
the payment of such Performance Award. The unpaid portion of a Performance Award
that is subject to this Section 8(g) shall be paid (in whole or in part), at the
discretion of the Committee, when such payment is deductible in accordance with
Code Section 162(m).
The delayed payment of a Performance Award payable in Shares
or Restricted Shares shall be equal to the number of Performance Shares earned
but unpaid. The delayed payment of a Performance Award payable in cash shall be
equal to the Fair Market Value of the earned but unpaid Performance Shares as of
the appropriate payment date selected by the Committee.
SECTION 9. NON-ASSIGNABILITY OF INCENTIVE AWARDS
- ------------------------------------------------
(a) Except as provided in Section 9(b) with respect to Options
granted hereunder as Nonqualified Stock Options, no Incentive Award granted
under the Plan shall be assigned, transferred, pledged, or otherwise encumbered
by an Employee, otherwise than by will, by designation of a beneficiary after
death on a form approved by the Committee, or by the laws of descent and
distribution, or be made subject to execution, attachment or similar process.
Except as provided in Section 9(b) with respect to Nonqualified Stock Options,
each Incentive Award shall be exercisable during the Employee's lifetime only by
the Employee or, if permissible under applicable law, by the Employee's guardian
or legal representative.
(b) Neither any Option granted hereunder as a Nonqualified
Stock Option nor any right thereunder may be assigned or transferred by the
optionee except by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order (as defined in the Code or the Employee
Retirement Income Security Act of 1974), provided, however, the Committee may by
written action permit any holder of a Nonqualified Stock Option, either before
or after the time of grant, to transfer a Nonqualified Stock Option during his
lifetime to one or more members of his family, to one or more trusts for the
benefit of one or more members of his family, or to a partnership or
partnerships of members of his family, provided that no
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<PAGE> 13
consideration is paid for the transfer and that such transfer would not result
in the loss of any exemption under Rule 16b-3 for any option granted under any
plan of the Company. The transferee of a Nonqualified Stock Option shall be
subject to all restrictions, terms and conditions applicable to the Nonqualified
Stock Option prior to its transfer. The Committee may impose on any transferable
Nonqualified Stock Option and on the Shares to be issued upon the exercise of a
Nonqualified Stock Option such limitations and conditions as the Committee deems
appropriate.
SECTION 10. CHANGE OF CONTROL
- -----------------------------
(a) GENERAL. In order to maintain all of the Employee's rights
in the event of a Change of Control of the Company, the Committee, in its sole
discretion, may, as to any Incentive Award, either at the time that an Incentive
Award is made or any time thereafter, take any one or more of the following
actions:
(i) provide for the acceleration of any time periods
relating to the exercise or realization of any such award, so
that such award may be exercised or realized in full on or
before a date fixed by the Committee,
(ii) provide for the purchase of any such award by
the Company, upon an Employee's request, for an amount of cash
equal to the amount that could have been attained upon the
exercise of such award or realization of such Employee's
rights had such award been currently exercisable or payable,
(iii) make such adjustment to any such award then
outstanding as the Committee deems appropriate to reflect a
Change of Control, or
(iv) cause any such award then outstanding to be
assumed, or new rights substituted therefor, by the acquiring
or surviving corporation, if any, in connection with a Change
of Control.
(b) OPTIONS. All outstanding Options which are not yet
exercisable shall become immediately exercisable in full in the event of a
Change of Control of the Company.
SECTION 11. TAXES
- -----------------
(a) WITHHOLDING FOR TAXES. The Company shall be entitled, if
necessary or desirable, to withhold the amount of any tax attributable to any
amounts payable under any Incentive Award and the Company may defer making
payment of any Incentive Award if any such tax, charge, or assessment may be
pending until indemnified to its satisfaction.
(b) USE OF SHARES FOR TAX WITHHOLDING PAYMENTS. With the
approval of the Committee, Shares may be used in lieu of cash to pay all or any
part of the mandatory federal, state or local withholding tax payments to be
made by the Employee in connection with an Incentive Award, as follows:
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<PAGE> 14
(i) NONQUALIFIED STOCK OPTIONS. (a) The holder of a
Nonqualified Stock Option may elect to have the Company retain
from the Shares to be issued upon exercise of such an option
Shares having a Fair Market Value equal to the withholding tax
to be paid; or (b) the holder of a Nonqualified Stock Option
may deliver to the Company already-owned Shares having a Fair
Market Value equal to the withholding tax to be paid and in
such case, the election to use already-owned Shares for such
purpose and the exercise of the Nonqualified Stock Option may
occur at any time.
(ii) RESTRICTED SHARE AWARDS. If withholding taxes
are to be paid at the time Restricted Shares are issued in the
name of an Employee or at the expiration of the Restricted
Period, then the Employee may elect to have the Company retain
from the Shares to be issued Shares having a Fair Market Value
equal to the withholding tax to be paid or pay such taxes by
delivering to the Company already-owned Shares having a Fair
Market Value equal to the amount of the withholding tax being
paid by the use of already-owned Shares.
(iii) PERFORMANCE SHARES. If withholding taxes are
required to be paid at the time Shares are delivered to an
Employee as a Performance Award, then the Employee may elect
to have the Company retain from the Shares to be issued Shares
having a Fair Market Value equal to the withholding tax to be
paid or pay such taxes by delivering to the Company
already-owned Shares having a Fair Market Value equal to the
amount of the withholding tax being paid by the use of
already-owned Shares.
SECTION 12. COMPLIANCE WITH LAWS AND EXCHANGE REQUIREMENTS
- ----------------------------------------------------------
No Option shall be granted and no Shares shall be issued in
connection with any Incentive Award unless the grant of the Option and the
issuance and delivery of Shares or cash pursuant to the Incentive Award shall
comply with all relevant provisions of state and federal law, including, without
limitation, the Securities Act of 1933, the Securities Exchange Act of 1934, the
rules and regulations promulgated thereunder, and the requirements of any market
system or stock exchange upon which the Shares may then be listed.
SECTION 13. AMENDMENT AND TERMINATION OF PLAN
- ---------------------------------------------
(a) AMENDMENT. The Board may amend, modify, or suspend the
Plan at any time for the purpose of meeting or addressing any changes in the
legal requirements or for any other purpose permitted by law. Subject to changes
in law or legal requirements that would permit otherwise, the Board may not
amend the Plan without shareholder approval so as to:
(i) increase the maximum number of Shares that may be
issued under the Plan except in accordance with Section 3(c);
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<PAGE> 15
(ii) permit the granting of Options with exercise
prices lower than those specified in Section 6;
(iii) materially modify the requirements as to
eligibility of key employees, officers, or directors of the
Company for participation in the Plan; or
(iv) prevent future grant of Incentive Awards to
qualify as "performance based" within the meaning of Code
Section 162(m)(4)(C).
(b) TERMINATION. The Board may at any time terminate the Plan.
(c) EFFECT OF AMENDMENT OR TERMINATION. Any amendment or the
termination of the Plan shall not adversely affect any Incentive Award
previously granted nor disqualify an Incentive Award from being treated as
"performance based" within the meaning of Code Section 162(m)(4)(C). Incentive
Awards outstanding at the time that the Plan is amended or terminated shall
remain in full force and effect as if the Plan had not been amended or
terminated.
SECTION 14. NOTICES
- -------------------
Each notice relating to the Plan shall be in writing and
delivered in person or by certified or registered mail to the proper address.
Each notice to the Committee shall be addressed as follows: The Monarch Machine
Tool Company, 2600 Kettering Tower, Dayton, Ohio 45423, Attention: Compensation
Committee. Each notice to a Participant shall be addressed to the Participant at
the address of the Participant maintained by the Company on its books and
records. Anyone to whom a notice may be given under this Plan may designate a
new address by written notice to the other party to that effect.
SECTION 15. BENEFITS OF PLAN
- ----------------------------
This Plan shall inure to the benefit of and be binding upon
each successor of the Company. All rights and obligations imposed upon a
Participant and all rights granted to the Company under this Plan shall be
binding upon the Participant's heirs, legal representatives and successors.
SECTION 16. PRONOUNS AND PLURALS
- --------------------------------
All pronouns shall be deemed to refer to the masculine,
feminine, singular or plural, as the identity of the person or persons may
require.
SECTION 17. SHAREHOLDER APPROVAL AND TERM OF PLAN
- -------------------------------------------------
(a) The Plan shall become effective upon its adoption by the
Board. No payment of cash or Shares in connection with an Incentive Award shall
be made, and no Option shall be exercised, prior to the approval of the Plan by
the affirmative vote of the holders of a
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<PAGE> 16
majority of the outstanding Shares present, in person or by proxy, and entitled
to vote at an annual meeting of the shareholders of the Company. Unless the Plan
shall be so approved by the shareholders of the Company at the next annual
meeting after its adoption by the Board, the Plan shall terminate and all
Incentive Awards granted under the Plan shall be canceled.
(b) Unless sooner terminated under Section 13, the Plan shall
be in effect from the date of its adoption by the Board and automatically
terminate on the fifth anniversary of its adoption by the shareholders of the
Company.
-15-
<PAGE> 1
Exhibit 5.1
Thompson Hine & Flory LLP
2000 Courthouse Plaza NE
Dayton, Ohio 45402
August 26, 1999
The Monarch Machine Tool Company
2600 Kettering Tower
Dayton, Ohio 45323
Gentlemen:
We have acted as counsel to The Monarch Machine Tool Company, an Ohio
corporation (the "Company"), in connection with The Monarch Machine Tool Company
1999 Long-Term Incentive Stock Plan (the "Plan") and the preparation of the
Company's Registration Statement on Form S-8 being filed with the Securities and
Exchange Commission in connection therewith.
Please be advised that we have examined such proceedings and records of the
Company, and have made investigation of such other matters, as in our judgment
permits us to render an informed opinion on the matters set forth herein.
Based upon the foregoing, it is our opinion that the common shares of the
Company offered under the Plan have been duly authorized and, when issued in
accordance with the terms of the Plan, will be legally issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the Company's
Registration Statement on Form S-8 with respect to the Plan.
Very truly yours,
/s/ Thompson Hine & Flory LLP
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of our report dated February 11, 1999 relating to the
consolidated financial statements, which appears in the 1998 Annual Report to
Shareholders of The Monarch Machine Tool Company, which is incorporated by
reference in The Monarch Machine Tool Company's Annual Report on Form 10-K for
the year ended December 31, 1998. We also consent to the incorporation by
reference of our report dated February 11, 1999 relating to the financial
statement schedule, which appears in such Annual Report on Form 10-K.
/s/ PricewaterhousCoopers LLP
Dayton, Ohio
August 26, 1999
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report in
this registration statement (Form S-8) of The Monarch Machine Tool Company 1999
Long-Term Incentive Stock Plan, and to the incorporation by reference in this
registration statement our report dated May 20, 1999, pertaining to the
consolidated financial statements of Precision Industrial Corporation,
incorporated by reference in The Monarch Machine Tool Company's Form 8-K filed
on July 15, 1999.
/s/ Arthur Andersen LLP
-----------------------
Arthur Andersen LLP
Pittsburgh, Pennsylvania
August 24, 1999
<PAGE> 1
Exhibit 24.1
THE MONARCH MACHINE TOOL COMPANY
LIMITED POWER OF ATTORNEY
WHEREAS, The Monarch Machine Tool Company, an Ohio corporation (the
"Company"), intends to file with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Act"), (i) a Registration Statement
on Form S-8 covering 175,000 of its common shares, without par value, that may
be issued under the Company's 1999 Long-Term Incentive Stock Plan and (ii) a
Registration Statement on Form S-8 covering the 50,000 of its common shares,
without par value, that may be issued under the Company's 1984 Restricted Stock
Bonus Plan (together, the "Registration Statements").
NOW THEREFORE, the undersigned, in his capacity as a director of
the Company, hereby appoints Richard E. Clemens and Karl A. Frydryk and each of
them to be his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, to execute his name, place and stead, as
aforesaid, the Registration Statements and any post-effective amendments
thereto, and any and all other instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission.
Said attorney shall have full power and authority to do and perform, in the name
and on behalf of the undersigned, every act whatsoever necessary or desirable to
be done, as fully to all intents and purposes as the undersigned might or could
do in person. The undersigned hereby ratifies and approves the acts of said
attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 4th day of May, 1999.
/s/ John A. Bertrand /s/ William R. Graber
-------------------------- ---------------------------
John A. Bertrand William R. Graber
/s/ Gerald L. Connelly /s/ William A. Enouen
-------------------------- ---------------------------
Gerald L. Connelly William A. Enouen
/s/ Waldemar M. Goulet /s/ David E. Lundeen
-------------------------- ---------------------------
Waldemar M. Goulet David E. Lundeen
/s/ Joseph M. Rigot
--------------------------
Joseph M. Rigot
