<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Margate Industries, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
MARGATE INDUSTRIES, INC.
129 NORTH MAIN STREET
YALE, MICHIGAN 48097
(810) 387-4300
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 22, 1995
TO THE SHAREHOLDERS OF MARGATE INDUSTRIES, INC.:
NOTICE HEREBY IS GIVEN that the Annual Meeting of Shareholders of
Margate Industries, Inc., a Delaware corporation (the "Company"), will be
held at the Company's corporate offices at 129 North Main Street, Yale,
Michigan, on June 22, 1995, at 9:00 a.m., Eastern Daylight Time, and at any
and all adjournments thereof, for the purpose of considering and acting upon
the following matters:
1. The election of two (2) Class A Directors of the Company;
2. Approval of the Company's Incentive Stock Option Plan.
3. The transaction of such other business as properly may come before
the meeting or any adjournment thereof.
Only holders of the $.005 par value common stock of the Company of
record at the close of business May 10, 1995, will be entitled to notice of
and to vote at the Meeting or at any adjournment or adjournments thereof.
The proxies are being solicited by the Board of Directors of the Company.
All shareholders, whether or not they expect to attend the Annual
Meeting of Shareholders in person, are urged to sign and date the enclosed
Proxy and return it promptly in the enclosed postage-paid envelope which
requires no additional postage if mailed in the United States. The giving of
a proxy will not affect your right to vote in person if you attend the
Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Yale, Michigan WILLIAM H. HOPTON
May 15, 1995 PRESIDENT
<PAGE>
MARGATE INDUSTRIES, INC.
129 NORTH MAIN STREET
YALE, MICHIGAN 48097
(810) 387-4300
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 22, 1995
GENERAL INFORMATION
The enclosed Proxy is solicited by and on behalf of the Board of
Directors of Margate Industries, Inc., a Delaware corporation (the
"Company"), for use at the Company's Annual Meeting of Shareholders to be
held at the Company's corporate offices, 129 North Main Street, Yale,
Michigan, on June 22, 1995, at 9:00 a.m., Eastern Daylight Time, and at any
adjournment thereof. It is anticipated that this Proxy Statement and the
accompanying Proxy will be mailed to the Company's shareholders on or about
May 15, 1995.
Any person signing and returning the enclosed Proxy may revoke it at any
time before it is voted by giving written notice of such revocation to the
Company, or by voting in person at the Meeting. The expense of soliciting
proxies, including the cost of preparing, assembling and mailing this proxy
material to shareholders, will be borne by the Company. It is anticipated
that solicitations of proxies for the Meeting will be made only by use of the
mails; however, the Company may use the services of its Directors, Officers
and employees to solicit proxies personally or by telephone, without
additional salary or compensation to them. Brokerage houses, custodians,
nominees and fiduciaries will be requested to forward the proxy soliciting
materials to the beneficial owners of the Company's shares held of record by
such persons, and the Company will reimburse such persons for their
reasonable out-of-pocket expenses incurred by them in that connection.
All shares represented by valid proxies will be voted in accordance
therewith at the Meeting.
The Company's Annual Report to Shareholders for the Company's fiscal
year ended December 31, 1994, is being simultaneously mailed to the Company's
shareholders, but does not constitute part of these proxy soliciting
materials.
-1-
<PAGE>
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the Company's
$.005 par value common stock, with each share entitled to one vote. Only
shareholders of record at the close of business on May 10, 1995, are entitled
to notice of and to vote at the Meeting or any adjournment thereof. On May
10, 1995, the Company had 4,675,614 shares of its $.005 par value common
stock outstanding, each share of which is entitled to one vote on all matters
to be voted upon at the Meeting, including the election of Directors.
Cumulative voting in the election of Directors is not permitted.
A majority of the Company's outstanding common stock represented in
person or by proxy shall constitute a quorum at the Meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares of
the Company's $.005 par value common stock owned beneficially, as of May 10,
1995, by any person who is known to the Company to be the beneficial owner of
5% or more of such common stock and, in addition, by each Director of the
Company and its subsidiaries and by all Directors and Officers of the Company
and its subsidiaries as a group. Information as to beneficial ownership is
based upon statements furnished to the Company by such persons.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP CLASS (1)
- --------------------- ----------- -----------
<S> <C> <C>
Calhoun Foundry Company 232,660 5.0%
506 South Clay Street
Homer, MT 49245
Paul L. Cosper 284,120 (2) 6.1%
P.O. Box 96050
Wixom, MI 48096
Charles H. Raches, Jr. 252,840 5.4%
2686 Birch Harbor Lane
West Bloomfield, MI 48003
Frederick G. and 795,147 (3) 17.0%
Patricia W. Schriever
64 Clairview
Grosse Pointe Shores, MI 48236
</TABLE>
-2-
<PAGE>
<TABLE>
<S> <C> <C>
Frederick G. Berlet 225,416 (4) 4.8%
S.W.O. Management
Consultants, Ltd.
35 Parkwood Drive
Tillsonburg, Ontario
Canada N4G 2B7
David A. Widlak 85,000 1.8%
65040 Dequindre
Washington, MI 48095
Delbert W. Mullens 200,000 (5) 4.3%
2888 Bloomfield Crossings
Bloomfield Hills, MI 48013
William H. Hopton 152,060 (6) 3.3%
5448 North River Rd.
Marine City, MI 48039
All Officers and Directors 1,457,623 31.2%
of the Company & Subsidiaries
as a Group (5 Persons)
<FN>
(1) Each person has sole voting and investment power with respect to the
shares shown except as noted.
(2) The shares beneficially owned by Mr. Cosper are held in the name of Paul
L. Cosper, Trustee under an Agreement of Trust executed by Paul L. Cosper
as Grantor. The beneficiaries of this trust are Mr. Cosper's wife and
children.
(3) Includes 562,487 shares held individually and jointly with Patricia W.
Schriever, Mr. Schriever's wife and 232,660 shares which are held by
Calhoun Foundry Company, Inc. of which Mr. Schriever is a principal
shareholder.
(4) The shares beneficially owned by Mr. Berlet are held in joint tenancy
with his wife and children.
(5) Includes 200,000 options to purchase common stock not exercised as of
this date.
(6) Includes 80,060 shares held by William Hopton, individually, 40,000
shares held jointly with his four children, and 32,000 options not
exercised as of this date.
</TABLE>
ELECTION OF DIRECTORS
The Bylaws presently provide for a Board of Directors of not less than
two (2) members. The number of Directors of the Company has been fixed not
to exceed six (6) by the Company's Board of
-3-
<PAGE>
Directors. The Board of Directors are divided into three classes of two
Directors which hold office for a period of three years. Shareholders elect
one class each year for a three year term. Mr. Berlet, the Class C Director,
will be nominated for election at the next Annual Meeting in 1996.
The Company's Board of Directors recommends election of the two (2)
Class B nominees listed below and for the term indicated, to hold office
until the Annual Meeting of Shareholders in the year indicated and until
their successors are elected and qualified or until their earlier death,
resignation or removal. The person named as "proxies" in the enclosed form
of Proxy, who have been designated by Management, intend to vote for the two
(2) nominees for election as Directors unless otherwise instructed in such
proxy. If at the time of the Meeting, if the nominees named below should be
unable to serve, which event is not expected to occur, the discretionary
authority provided in the Proxy will be exercised to vote for such substitute
nominees, if any, as shall be designated by the Board of Directors.
The following table sets forth the name and age of the nominees for
Class B Directors, indicating all positions and offices with the Company
presently held by them, the period during which they have served as such, and
the class and term for which they have been nominated:
CLASS B NOMINEES - TERMS EXPIRING AT THE
ANNUAL SHAREHOLDERS MEETING IN 1998
<TABLE>
<CAPTION>
OTHER POSITIONS PERIOD SERVED
AND OFFICES HELD AS DIRECTOR
NAME AGE WITH THE COMPANY OF THE COMPANY
---- --- ---------------- --------------
<S> <C> <C> <C>
Delbert W. Mullens None July 1990 to Present
David A. Widlak V.P of Mergers
and Acquisitions,
Secretary November 1987 to Present
</TABLE>
The Company's Board of Directors held four (4) meetings during the fiscal
year ended December 31, 1994, and each Director attended all of the meetings
held.
There is no family relationship between any Director or nominee for
Director of the Company and any other Director, nominee or Executive Officer
of the Company.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Set forth below are the names of all Directors, the two Class B Nominees
for Directors and Executive Officers of the Company (there currently are no
persons chosen to become Executive Officers), all positions and offices held
by each such person, the period during which he has served as such, and the
principal occupations and employment of such persons during the last five
years:
-4-
<PAGE>
FREDERICK G. SCHRIEVER has been Chairman of the Company's Board of
Directors since November of 1987. He has been President of Casting Sales,
Inc. from 1972 to present. Casting Sales, Inc. acts as a manufacturer's
representative of foundries. Since 1955 to the present, Mr. Schriever has
also been President of Amber Tool and Engineering which holds real estate and
owns an interest in several companies and President of Trio Machine Products
Corp., a production machine shop. Since 1960 to the present, he has also
been President of J.P. Bell Co., a company specializing in machine levelers,
Vice President of Casting Industries, Inc. and Chairman of Arrow Exit
Systems, Inc. Mr. Schriever received a Bachelor of Science Degree in
chemistry in 1949 from the University of Michigan. Mr. Schriever devotes as
much time as necessary to the business of the Company and its subsidiaries.
DELBERT W. MULLENS has been a Director since July of 1990 and President of
NHF since September 1, 1992. He has been the President, Director, and
principal shareholder of Flint Coatings of Flint, Michigan, a company engaged
in painting automotive parts for major car manufacturers including General
Motors Corporation. Mr. Mullens is also Chairman of Product-SDL Chemical,
Inc. Mr. Mullens received a Bachelor of Science Degree in Business
Administration from Tennessee State University. Mr. Mullens devotes as much
time as is necessary to the business of the Company and its subsidiaries.
WILLIAM H. HOPTON has been President of the Company since April of 1988,
and a Director of the Company since January of 1986. Mr. Hopton also served
as the Company's vice President from January of 1986 to April of 1988. Since
1984, Mr. Hopton has been President of NHF. Effective September 1, 1992, Mr.
Hopton retired as President of NHF but will provide consulting services to
NHF as needed. Also, as of that date, he is devoting his business time to
the management of Margate Industries, Inc. Mr. Hopton received a B.A. Degree
in Business Administration from the University of Detroit in 1964.
FREDERICK G. BERLET has been a Director of the Company since November of
1987 and its Treasurer since April of 1988. He is Vice Chairman of Flock
Manufacturing, Inc. He also serves as Director of Waterloo Scientific, Inc.
and President - Director of N.W.W. Management Consultants Limited. He
graduated with a Masters Degree in Business Administration in 1953 from the
University of Western Ontario. Mr. Berlet devotes as much time as is
necessary to the business of the Company and its subsidiaries.
DAVID A. WIDLAK has been Secretary and a Director of the Company since
November of 1987. He received a Bachelors Degree from Wayne State University
in 1969 and a jurist doctorate Degree in Law from the University of Michigan
in 1972. Effective February 15, 1994 Mr. Widlak was appointed as a director
of acquisitions and devotes a minimum of two days a week in this capacity.
The Officers of the Company and its subsidiaries are elected by the
respective Board of Directors at the first meeting after each annual meeting
of shareholders and hold office until the next annual meeting of directors or
their earlier resignation or removal.
The date of the next annual meeting of the Company will be determined by
the Company's Board of Directors in accordance with Delaware law.
-5-
<PAGE>
No Director holds a directorship in any company with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934 or
subject to the requirements of Section 15(d) of such Act or any company
registered as an investment company under the Investment Company Act of 1940.
COMPLIANCE WITH SECURITIES EXCHANGE ACT REPORTING REQUIREMENTS
To the Company's knowledge, during the fiscal year ended December 31,
1994, the Company's Officers and Directors complied with all applicable
Section 16(a) filing requirements. This statement is based solely on a
review of the copies of such reports furnished to the Company by its officers
and directors and their written representations that such reports accurately
reflect all reportable transactions and holdings.
THE BOARD OF DIRECTORS AND ITS STANDING COMMITTEES
The Company's Board of Directors has the responsibility to review the
overall operations of the Company. The Board members are kept informed of
the Company's results of operations and proposed plans and business
objectives through periodic reports sent to them by the Company's management
or presented at Board and Committee meetings. The Board met four times last
year, once each quarter. All members of the Board of Directors were present
at all of these meetings.
DIRECTORS' COMPENSATION
Directors of the Company receive $6,000 a quarter and reimbursement for
expenses. The Chairman of the Board of Directors receives $7,000 per quarter
and reimbursement for expenses. If a Director fails to attend any meetings
during a quarter his Director's fee is reduced by $2,000 in that quarter.
BOARD COMMITTEES
The Board of Directors has three principal standing committees.
The NOMINATING COMMITTEE recommends to the Board of Directors candidates
to fill vacancies on the Board of Directors and consists of Frederick G.
Schriever, David Widlak and William H. Hopton. The Nominating Committee has
not established any formal policy or procedure for considering nominees
recommended by shareholders.
The AUDIT COMMITTEE recommends to the Board of Directors the appointment
of the independent certified public accountants for the following year. The
Committee reviews with the accountants the scope of the Company's annual
audit, the annual financial statements of the Company, and the auditors'
comments relative to the adequacy of the Company's system of internal
controls and accounting systems. The Committee, which reports directly to
the Board of Directors and is composed of three non-full-time employee
Directors, Messrs. Schriever, Widlak and Berlet, met three times during 1994.
-6-
<PAGE>
The COMPENSATION COMMITTEE, whose report follows, is composed of three
non-full-time employee Directors, reports directly to the Board of Directors,
and is currently composed of three Directors, Messrs. Schriever, Widlak and
Berlet. Mr. Schriever is chairman of the Committee. The Committee met twice
during 1994.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Except for Mr. Widlak, who is employed on a part-time basis as a director
of acquisitions, no other member of the Compensation Committee has served as
a paid officer or employee of the Company or any of its subsidiaries.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE MANAGEMENT
COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
evaluates and approves the overall policies which govern the annual base
salaries of the Company's President and Chief Executive Officer ("CEO") and
other Executive Officers.
The Committee reviews and evaluates the Company's corporate performance
and executive management compensation once each year. In making its
evaluations, the Committee considers a large number of factors including
those set forth under "Compensation Policies" herein, together with other
matters such as the inflation rate, and the Company's past performance,
generally over consecutive three year time frames.
COMPENSATION POLICIES
The Company's compensation policies, particularly as they apply to its
Executive Officers, including Mr. Hopton, the President and CEO, are designed
to achieve the following major objectives:
1. To set base annual salaries (base income) for key Executive Officers which
are deemed reasonably competitive in the context of American industry
generally, and the automotive industry specifically. Business size, level
of responsibility, complexity of operations, and long term performance and
prospects are among the factors considered.
2. The Committee considers a variety of intangible and other factors such as
each person's likely future contribution to the Company's successful growth,
the current state and prospects of the industry and the Company's long-term
goals and strategies which might from time to time require temporary
investment in personnel resources in the absence of immediate positive
results. Further, the Committee considers the compensation and benefits
previously paid to its Executive Officers.
-7-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding the
compensation paid or accrued to the CEO and each Executive Officer (earning
in excess of $100,000) for services rendered in all capacities during each of
the fiscal years ended December 31, 1994, 1993 and 1992:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
----------------------------
ANNUAL COMPENSATION AWARDS PAY-
OUTS
- --------------------------------------------------------------- ------------------- -----
(a) (b) (c) (d) (e) (e) (g) (h) (i)
OTHER ALL
NAME ANNUAL RESTRICTED LTIP OTHER
AND COMPEN- STOCK OPTIONS/ PAY- COMPEN-
PRINCIPAL SALARY BONUS ATION AWARD(S) SARS OUTS SATION
POSITION YEAR(1) ($) ($) ($)(2) ($) (#)(3) ($) ($)
- ----------------- ------- -------- ------- ------- ---------- -------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William H. Hopton 1994 $75,000 $18,000 $24,000 $8,242(4)
President and CEO 1993 $65,000 $10,000 $24,000 $7,342
1992 $60,000 $15,000 $22,000 $7,342
<FN>
(1) Periods presented are for the year ended December 31.
(2) Represents Directors fees.
(3) Number of shares of Common Stock subject to options granted during the
year indicated.
(4) Represents employer contributions for insurance of $5,342, disability
insurance of $500 and car allowance of $2,400.
</TABLE>
STOCK OPTIONS
OPTIONS GRANTED
The following table sets forth the options that have been granted to the
Chief Executive Officer and President listed in the Executive Compensation
Table during the Company's last fiscal year ended December 31, 1994.
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1994)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------
(a) (b) (c) (d) (e)
OPTIONS/ OPTIONS/SARS EXERCISE
SARS GRANTED TO OR BASE
GRANTED EMPLOYEES PRICE EXPIRATION
NAME (#) IN FISCAL YEAR ($/SHARE) DATE
---- ------- -------------- --------- ----------
<S> <C> <C> <C> <C>
William H. Hopton N/A N/A N/A N/A
President and CEO
</TABLE>
-8-
<PAGE>
AGGREGATE OPTIONS EXERCISED IN 1994 AND OPTION VALUES AT DECEMBER 31, 1994
The following table sets forth certain information regarding options to
purchase shares of Common Stock exercised during the Company's 1994 fiscal
year and the number and value of exercisable and unexercisable options to
purchase shares of Common Stock held as of the end of the Company's 1994
fiscal year by the Executive Officers of the Company named in the Summary
Compensation Table:
<TABLE>
<CAPTION>
AGGREGATED OPTIONS EXERCISED IN 1994
AND OPTION VALUES AT DECEMBER 31, 1994
- ------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
12/31/94 12/31/94
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED(1) UNEXERCISABLE UNEXERCISABLE(2)
---- --------------- ----------------- ------------- ----------------
<S> <C> <C> <C> <C>
William H. Hopton 16,000 $50,000 0/48,000 $0/$86,880
President and CEO
<FN>
(1) Value realized is equal to the difference between the fair market value
per share of Common Stock on the date of exercise and the option exercise
price per share multiplied by the number of shares acquired upon exercise
of an option.
(2) Value of exercisable/unexercisable in-the-money options is equal to the
difference between the fair market value per share of Common Stock of
$1.81 at December 31, 1994, and the option exercise price per share
multiplied by the number of shares subject to options.
</TABLE>
-9-
<PAGE>
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The terms of the sale of NHF common stock provide for a commission
contract between NHF and the Company relating to sales in excess of
$35,000,000 annually. The Company will receive $150,000 per year plus 3% on
the difference between actual sales in excess of $35,000,000 but less than
$40,000,000 plus 2% on actual sales that exceed $40,000,000. This
commissions contract will be in effect for a period of not less than fifteen
(15) years beginning in June 1990. The Company earned commissions from NHF
in 1994 of $607,149 and accordingly, has a receivable in the amount of
$66,117 as of December 31, 1994. Also, for a minimum period of fifteen (15)
years beginning in June 1990, the Company and its subsidiaries will provide
cleaning services on all castings produced by NHF on an exclusive basis,
provided the Company retains an ownership interest in NHF. Consolidated net
sales to NHF in 1994 amounted to $5,053,018.
Effective September 1, 1992, William Hopton retired as President of NHF
but continues to provide consulting services to NHF, as needed. Also, as of
that date he has devoted his full time to the management of the Company and
its subsidiaries.
PROPOSAL TO APPROVE 1995 INCENTIVE STOCK OPTION PLAN
On April 15, 1995, the Board of Directors of the Company adopted the
1995 Incentive Stock Option Plan ("1995 ISOP") and is submitting the 1995
ISOP to shareholders for their approval at the Annual Meeting. The 1995 ISOP
relates to 500,000 shares of Common Stock.
The description of the 1995 ISOP is qualified by its entirety by
reference to the full text of such Plan, a copy of which is attached as
Appendix A to this Proxy Statement.
PURPOSE
The purpose of the 1995 ISOP is to provide certain Officers and key
employees of the Company with an added incentive to continue their service to
the Company, to induce them to exert maximum efforts toward the Company's
success, and to provide a closer connection between the interests of the
Company and its employees. The 1995 ISOP provides for administration by a
Board of Directors appointed stock option committee. The committee will
initially consist of Messrs. Hopton and Widlak. The stock option committee
has the authority to determine the employees to be granted options under the
1995 ISOP and the number of shares subject to each option. The exercise
price of any option granted under the 1995 ISOP will be determined by the
stock option committee. However, the exercise price may not be less than the
fair market value of the shares subject to the option on the date of the
grant. Options granted to any person owning more that 10% of the outstanding
Common Stock may not be less than 110% of the fair market value of the shares
underlying such option on the date of grant.
The number of shares of Common Stock for which options may be granted to
any individual, the time or times when options will be granted, and any other
term or condition as to the grant of the options is within the discretionary
authority of the stock option committee. The term of each option and the
manner in which it may be exercised is determined by the stock option
committee, provided that
-10-
<PAGE>
no option may be exercisable in whole or in part prior to six months from the
date it is granted, nor more than 10 years after the date of grant. Subject
to certain rights of cumulation provided for in the 1995 ISOP, each option
shall be exercisable as to not more than one-third of the total number of
shares covered thereby during each 12-month period commencing six months from
the date of granting of the option until all shares covered by the option
shall have been purchased. The Company may accelerate the foregoing schedule
as to the number of shares into which any option is exercisable during a
given period if the officer or employee holding the option retires with the
approval of the Company. The aggregate fair market value of shares for which
options granted to any employee are exercisable for the first time by such
employee during any calendar year (under all stock option plans of the
Company and any related corporation) may not exceed $100,000.
In the event that an option holder shall cease to be employed by the
Company for any reason other than his permanent disability, subject to the
condition that no option shall be exercisable after the expiration of 10
years from the date granted, the option holder shall have the right to
exercise the option at any time within three months after such termination to
the extent the right to exercise the option had accrued at the termination
date. In the event of the permanent disability of an option holder, subject
to the condition that no option shall be exercisable after the expiration of
10 years from the date granted, and to the extent the right to exercise the
option had accrued at the date of such termination, the option holder shall
have the right to exercise the option at any time within one year after such
termination as a result of disability.
In the event that an option holder shall die while in the employ of the
Company, or within a period of three months after the termination of such
employment, to the extent that his option was not previously fully exercised,
the option may be exercised, subject to the condition that no option shall be
exercisable after the expiration of 10 years from the date granted and to the
extent the right to exercise the option accrued at the time of his death, at
any time within three months after the death of the option holder, by the
executors or administrators of the deceased option holder or by persons who
acquired the option directly from the deceased option holder by bequest or
inheritance.
Payment for the shares purchased pursuant to the exercise of an option
shall be made in full at the time of the exercise of the option, in cash or
by check in an amount equal to the exercise price multiplied by the number of
shares as to which the option is exercised. All options and all rights
granted thereunder are non-transferable and non-assignable by the holder
thereof and shall be exercisable only by the holder, except to the extent
that the representative of the estate or the heirs of a deceased option
holder may be permitted to exercise them. All options terminate within a
specified period of time following the option holder's termination of
employment with the Company.
The Board of Directors is authorized, insofar as permitted by law, from
time to time, with respect to any shares at the time not subject to options,
to suspend or discontinue the 1995 ISOP or revise or amend it in any respect
whatsoever except that, without approval of a majority of the stockholders
within one year from such action taken by the Board, no such revision or
amendment shall change the number of shares subject to the 1995 ISOP, change
the designation of the class of employees eligible to receive options,
decrease the price at which options may be granted, or cause the options
-11-
<PAGE>
issued under it to fail to meet the requirements of qualified stock options
as defined in Section 422A of the Internal Revenue Code, as amended.
TAX TREATMENT
The following is a brief description of the federal income tax treatment
which will generally apply to awards made under the 1995 ISOP, based on
federal income tax laws in effect on the date hereof. The exact federal
income tax treatment of awards will depend on the specific nature of any such
award.
Pursuant to the 1995 ISOP, employees may be granted options which are
intended to qualify as incentive stock options ("Incentive Options") under
the provisions of Section 422 of the Internal Revenue Code ("the Code").
Generally, the optionee is not taxed and the Company is not entitled to a
deduction on the grant or the exercise of an Incentive Option at anytime
within (a) one year after the date of transfer of shares to the optionee
pursuant to the exercise of such Incentive Option or (b) two years after the
date of grant of such Incentive Option, then the optionee will recognize
ordinary income in an amount equal to the excess, if any, of the lesser of
the sale price or the fair market value on the date of exercise over the
exercise price of such Incentive Option. The Company will generally be
entitled to a tax deduction in an amount equal to the amount of ordinary
income recognized by such optionee.
The grant of an option or other similar right to acquire stock which
does not qualify for treatment as an Incentive Option is generally not a
taxable event for the optionee. Upon exercise of the option, the optionee
will generally recognize ordinary income in an amount equal to the excess of
the fair market value of the stock acquired upon exercise (determined as of
the date of exercise) over the exercise price of such option, and the Company
will be entitled to a tax deduction equal to such amount.
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was
not aware of any other matter to be presented at the Meeting other than as
set forth herein. However, if any other matters are properly brought before
the Meeting, the shares represented by valid proxies will be voted with
respect to such matters in accordance with the judgement of the persons
voting them. A majority vote of the shares outstanding is necessary to
approve any such matters.
ANNUAL REPORT
The Company's Annual Report for the year ended December 31, 1994,
accompanies this Proxy Statement. The Annual Report is not incorporated into
this Proxy Statement and is not to be considered part of the solicitation
material.
-12-
<PAGE>
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
FOR THE ANNUAL MEETING TO BE HELD IN JUNE, 1996
Any proposal by a shareholder intended to be presented at the Company's
Annual Meeting of Shareholders which is expected to be held in June, 1996,
must be received at the offices of the Company, 129 North Main Street, Yale,
Michigan 48097, no later than February 28, 1996, in order to be included in
the Company's proxy statement and proxy relating to that meeting.
WILLIAM H. HOPTON, PRESIDENT
Yale, Michigan
May 15, 1995
-13-
<PAGE>
MARGATE INDUSTRIES, INC.
INCENTIVE STOCK OPTION PLAN
1. PURPOSE. The purpose of this Incentive Stock Option Plan (the "Plan")
is to further the interests of Margate Industries, Inc. (hereinafter called
"the Company") by providing incentives for officers, regional managers,
district managers, department heads, corporate counsel and other key
employees of the Company who may be designated for participation in the Plan
and to provide additional means of attracting and retaining competent
personnel.
2. ADMINISTRATION. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company consisting of David A.
Widlak and Frederick Berlet and/or their successors. Such committee shall
hereinafter be referred to as the "Executive Compensation Committee" or the
"Committee." Subject to the provisions of the Plan and applicable law, the
Committee is authorized to interpret the Plan and to prescribe, amend and
rescind rules and regulations regulating to the Plan and to any options
granted thereunder, and to make all other determinations necessary or
advisable for the administration of the Plan.
3. PARTICIPANTS AND ALLOTMENTS. The Committee shall determine and
designate from time to time those employees of the Company to whom options
are to be granted and who thereby become participants in the Plan. The
Committee shall allot to such participants (the "Optionees") options to
purchase shares in such amounts as the Committee shall from time to time
determine; provided, however, that the aggregate fair market value
(determined as of the time the option to purchase shares is granted) of the
shares for which any employee of the Company may first exercise an option in
any calendar year (under this Plan and all other incentive stock options
plans of the Company and its parent and subsidiary corporations) shall not
exceed $100,000, and provided further that the Optionee, at the time such
option is granted, does not own stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or its parent or
subsidiary corporations. Key employees who are not full time employees of the
Company shall not be eligible to participate in the Plan. No member of the
Committee shall have any right to vote or decide upon any matter relating
solely to himself or herself or a member of his or her immediate family or
solely to any of his or her rights or benefits (or rights or benefits of a
member of his or her immediate family) under the Plan. Participation in the
Plan shall not confer any right of continuation of service as an employee of
the Company.
4. SHARES SUBJECT TO THE PLAN. Under this Plan, the Committee may from
time to time grant options to key employees of the Company entitling the
holders thereof to purchase shares of the Company's authorized and unissued
Common Stock up to an aggregate of 500,000 shares. If any option granted
under the Plan shall terminate or expire unexercised, in whole or in part,
the shares so released from option may be made the subject of additional
options granted under the Plan. The Company shall reserve and keep available
such number of shares of stock as will satisfy the requirements of all
outstanding options granted under the Plan. In the event there is any change
in the Company's shares of Common Stock, as by stock splits, reverse stock
splits, stock distributions or recapitalization, the number of shares
available for option and the shares subject to option shall be appropriately
adjusted by the Committee.
Appendix A
<PAGE>
5. OPTION PRICE. The option price or prices shall be the fair market
value of issued and outstanding shares of stock of the Company at the date
the option is granted. For the purposes hereof, fair market value shall equal
the mean price per share of the high bid and low asked, as reported by NASDAQ.
6. OTHER PROVISIONS. Each option shall be subject to all provisions of
this Plan, including, but not limited to, the following terms and conditions:
(a) Options granted under the Plan shall be exercisable for a
period of nine years from the date of the grant.
(b) The option may not be exercised during the period ending one
year from the date of the grant.
(c) During the period beginning one year from the date of the grant
and ending two years from the date of the grant, the Optionee shall have the
right to exercise options for at least 25% of the initial number of shares
subject to the option; during the period beginning two years from the date of
the grant and ending three years from the date of the grant, the Optionee
shall have the right to exercise options for at least an additional 25% of
the initial number of shares subject to the option; during the period
beginning three years from the date of the grant and ending four years from
the date of the grant, the Optionee shall have the right to exercise options
for at least a second additional 25% of the initial number of shares subject
to the option; and during the period beginning four years and ending nine
years from the date of the grant, the Optionee shall have the right to
exercise options for all the shares subject to the option. The Committee may
in its discretion grant the Optionee the right to exercise options for a
larger percentage of the shares subject to the option during the period
beginning one year from the date of the grant and ending four years from the
date of the grant. The Optionee's right to purchase stock shall be cumulative.
(d) If the employment of the Optionee by the Company is terminated
for any reason other than (i) his or her death, (ii) his or her discharge for
dishonesty or commission of a crime, or (iii) his or her employment with a
competitor of the Company without the Company's consent, the Optionee may,
within three months thereafter, subject to the provisions of Subsections
6(a), (b) and (c) above, exercise the option to the extent that the option
was exercisable as of the date of termination of his or her employment. All
unexercised options shall terminate, be forfeited and shall lapse upon the
expiration of said three-month period, or immediately if the employment of
the Optionee is terminated by the Company for any of the reasons set forth in
(ii) or (iii) above.
(e) If the Optionee dies while employed by the Company or within
three months after termination of his or her employment for any reason other
than as set forth in Items 6(d)(ii) or (iii) above, then within six months
after the date of the Optionee's death, subject to the provisions of
Subsections 6(a), (b) and (c) above, the option may be exercised by his or
her estate or by any person who has acquired the Optionee's right to exercise
the option by bequest or inheritance to the extent the option was exercisable
as of the date of his or her death. Upon the expiration of said six-month
period, all unexercised options shall terminate, be forfeited and shall lapse.
<PAGE>
(f) Except as otherwise provided in Subsection 6(e) above, the
option and all rights granted hereunder shall not be transferred by the
Optionee, and may not be assigned, pledged, or hypothecated in any way and
shall not be subject to execution, attachment or similar process. Upon any
attempt by the Optionee to transfer the option, or to assign, pledge,
hypothecate or otherwise dispose of such option or of any rights granted
hereunder, contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon such option or such rights, such option
and such rights shall immediately become null and void. The option shall be
exercisable, during the lifetime of the Optionee, only by the Optionee.
7. EXERCISE OF OPTIONS
(a) To exercise the option, the Optionee or his or her successor
shall give written notice to the Company at the Company's principal office,
accompanied by full payment of the shares being purchased and a written
statement that the shares are purchased for investment and not with a view to
distribution. However, this statement shall not be required in the event the
shares subject to the option are registered with the Securities and Exchange
Commission. If the option is exercised by the successor of the Optionee,
following his or her death, proof shall be submitted, satisfactory to the
Committee, of the right of the successor to exercise the option.
(b) Shares of stock issued pursuant to this Plan which have not
been registered with the Securities and Exchange Commission shall bear the
following legend:
"The securities represented by this stock certificate have not been
registered under the Securities Act of 1933 (the "Act") or applicable state
securities law (the "State Acts"), and shall not be sold, pledged,
hypothecated, donated, or otherwise transferred (whether or not for
consideration) by the holder except upon the issuance to the Corporation of
a favorable opinion of its counsel or the submission to the Corporation of
such other evidence as may be satisfactory to counsel for the Corporation,
to the effect that any such transfer shall not be in violation of the Act
and the State Acts."
(c) The Company shall not be required to transfer or deliver any
certificate or certificates for shares purchased upon any exercise of said
option: (i) until after compliance with all then applicable requirements of
law; and (ii) prior to admission of such shares to listing on any stock
exchange on which the stock may then be listed. In no event shall the Company
be required to issue fractional shares to the Optionee.
(d) In lieu of exercising the options in the manner set forth
herein, options subject to the Plan may be exercised one year from the date
of grant and the expiration date by surrender of the option, payment of $.005
for each share acquired pursuant to the Plan and execution of the appropriate
exercise subscription form attached hereto as Exhibit I. The number of
shares to be issued in exchange for the options shall be the product of the
excess of the market price of the Common Stock on the date of surrender of
the options and the exercise subscription form over the per share option
price and the number of shares subject to issuance upon exercise of the
options, divided by the market price of the Common Stock on such date. Upon
such exercise and surrender of the options, the Company will issue a
certificate in the name of the holder for the largest number of whole shares
of the Common Stock to which the
<PAGE>
Holder shall be entitled and, in lieu of any fractional share of the Common
Stock to which the Holder shall be entitled, pay cash equal to the fair value
of such fractional share (determined in such reasonable manner as the
Compensation Committee of the Company shall determine).
8. REGISTRATION. If the Company shall be advised by its counsel that
shares of stock deliverable upon any exercise of an option are required to be
registered under the Securities Act of 1933, or that the consent of any other
authority is required for the issuance of same, the Company may effect
registration or obtain consent, and delivery of shares by the Company may be
deferred until registration is effected or consent obtained.
9. ISSUANCE OF STOCK. No stock shall be issued until full payment for
such stock has been made. The Optionee shall have no rights as a stockholder
with respect to optioned shares until the date of the issuance of a stock
certificate to him or her for such shares. No adjustment shall be made for
distributions or other rights for which the record date is prior to the date
such certificate is issued, except as provided in Sections 4 and 10 hereof.
10. CORPORATE REORGANIZATION. If there shall be any capital
reorganization or merger of the Company with another corporation or
corporations, or any sale of all or substantially all of the Company's
properties and assets to any other corporation or corporations, the Company
shall take such action as may be necessary to enable Optionee to receive upon
any subsequent exercise of their respective options, in whole or in part, in
lieu of shares of common stock, securities or other assets as were issuable
or payable upon such reorganization, merger or sale in respect of, or in
exchange for such shares of common stock.
11. AMENDMENTS AND TERMINATION. The Board of Directors may amend,
suspend, discontinue or terminate the Plan, but no such action may, without
the consent of the Optionee alter or impair his or her option, except as
provided in Section 8.
12. OPTION AGREEMENT. The granting of an option shall take place only
when a written option agreement substantially in the form of the Incentive
Stock Option Agreement which is attached hereto and marked Exhibit 1 is
executed by or on behalf of the Company and the employee to whom the option
is granted and such executed agreement is delivered to the Company.
13. PERIOD OF PLAN. No options shall be granted on or after the tenth
anniversary of the date of adoption of the Plan by the Board of Directors of
the Company. The Plan shall expire on the later of said tenth anniversary
date or the date on which all options granted under the Plan have expired or
been exercised in full.
<PAGE>
EXHIBIT 1
MARGATE INDUSTRIES, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, Made this day of , 1995, by and
between Margate Industries, Inc. (hereinafter called the "Company"), a
Colorado corporation, and , an employee of the
Company (hereinafter called the "Optionee").
WHEREAS, the Board of Directors of the Company has adopted an Incentive
Stock Option Plan (the "Plan"); and
WHEREAS, the Compensation Committee of the Company ("the Committee")
considers it desirable and in the Company's best interests that the Optionee
be given an opportunity to purchase shares of its Common Stock in furtherance
of the Plan to provide incentive for the Optionee to remain in the employ of
the Company and to promote the success of the Company.
NOW, THEREFORE, in consideration of the premises, it is agreed as follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee the right,
privilege and option to purchase ( ) shares of
the Common Stock of the Company, at a purchase price of
Dollars ($ ) per share in the manner and subject to the conditions
hereinafter provided. Said purchase price is not less than the fair market
value of the shares of Common Stock of the Company at the time this option is
granted.
2. PERIOD OF EXERCISE OF OPTION.
(a) The option will be exercisable for a period of nine years from
the date of the grant. The option may not be exercised during the period
ending one year from the date of the grant. During the period beginning one
year from the date of the grant and ending two years from the date of the
grant, the option may be exercised with respect to not more than
percent ( %) of the initial number of shares subject to the option;
during the period beginning two years from the date of the grant and ending
three years from the date of the grant, the option may be exercised with
respect to not more than an additional percent ( %) of the
initial number of shares subject to the option; during the period beginning
three years from the date of the grant and ending four years from the date of
the grant, the option may be exercised with respect to not more than an
additional percent ( %) of the initial number of shares
subject to the option; and during the period beginning four years from the
date of the grant and ending nine years from the date of the grant, the
option may be exercised with respect to one hundred percent of the initial
number of shares subject to the option. The Optionee's right to purchase
stock shall be cumulative.
(b) If the employment of the Optionee by the Company is terminated
for any reason other than (i) his or her death, (ii) his or her discharge for
dishonesty or commission of a crime, or (iii) his or her employment with a
competitor of the Company without the Company's consent, the Optionee may,
within three (3) months thereafter, subject to the
<PAGE>
provisions of subparagraph (a) above, exercise the option to the extent that
the option was exercisable as of the date of termination of his or her
employment. All unexercised portions of the option shall terminate, be
forfeited and shall lapse upon the expiration of said three-month period, or
immediately if the employment of the Optionee is terminated by the Company
for any of the reasons set forth in (ii) or (iii) above.
(c) If the Optionee dies while employed by the Company or within
three months after termination of his or her employment, for any reason other
than as set forth in (b)(ii) or (iii) above, then within six months after the
date of the Optionee's death, subject to the provisions of subparagraph (a)
above, the option may be exercised by his or her estate or by any person who
has acquired the Optionee's right to exercise the option by bequest or
inheritance to the extent the option was exercisable as of the date of his or
her death. Upon the expiration of said six-month period, all unexercised
options shall terminate, be forfeited and shall lapse.
3. METHOD OF EXERCISE. In order to exercise the option, the Optionee
must give written notice to the Company at 129 North Main Street, Yale,
Michigan 48097. Said notice shall be accompanied by full payment for the
shares being purchased; a written statement that the shares are purchased for
investment and not with a view to distribution, and acknowledgment of
restrictions on the transferability of the shares by executing a letter in
the form of the letter attached hereto and marked Exhibit (i). If the option
is exercised by the successor of the Optionee following his or her death,
proof shall also be submitted of the right of the successor to exercise the
option. Shares of stock issued pursuant to the option shall bear the
following legend:
"The securities represented by this stock certificate have not
been registered under the Securities Act of 1933 (the "Act") or
applicable state securities laws (the "State Acts"), and shall not
be sold, pledged, hypothecated, donated, or otherwise transferred
(whether or not for consideration) by the holder except upon the
issuance to the Corporation of a favorable opinion of its counsel
or submission to the Corporation of such other evidence as may
be satisfactory to counsel for the Corporation, to the effect that
any such transfer shall not be in violation of the Act and
the State Acts."
and shall be subject to appropriate stop-transfer instructions. The Company
shall not be required to transfer or deliver any certificate or certificates
for shares purchased upon any such exercise of said option: (a) until after
compliance with all then applicable requirements of law; and (b) prior to
admission of such shares to listing on any stock exchange on which the stock
may then be listed. In no event shall the Company be required to issue
fractional shares to the Optionee.
In lieu of exercising the options in the manner set forth herein,
options subject to the Plan may be exercised one year from the date of grant
and the expiration date by surrender of the option, payment of $.005 for each
share acquired pursuant to the Plan and execution of the appropriate exercise
subscription form at the end hereof. The number of shares to be issued in
exchange for the options shall be the product of the excess of the market
price of the Common Stock on the date of surrender of the options and the
exercise subscription form over the per share option price and the number of
shares subject to issuance upon exercise of the options, divided by the
market price of the Common Stock on such date. Upon such exercise and
<PAGE>
surrender of the options, the Company will issue a certificate in the name of
the holder for the largest number of whole shares of the Common Stock to
which the Holder shall be entitled and, in lieu of any fractional share of
the Common Stock to which the Holder shall be entitled, pay cash equal to the
fair value of such fractional share (determined in such reasonable manner as
the Compensation Committee of the Company shall determine).
4. LIMITATION UPON EXERCISE. The option is not transferable by the
Optionee otherwise than by will or the laws of descent and distribution and
is exercisable, during the lifetime of the Optionee, only by the Optionee.
5. LIMITATION UPON TRANSFER. Except as otherwise provided herein, the
option and all rights granted hereunder shall not be transferred by the
Optionee, and may not be assigned, pledged, or hypothecated in any way and
shall not be subject to execution, attachment or similar process. Upon any
attempt to transfer the option, or to assign, pledge, hypothecate or
otherwise dispose of such option or of any rights granted hereunder, contrary
to the provisions hereof, or upon the levy of any attachment or similar
process upon such option or such rights, such option and such rights shall
immediately become null and void.
6. STOCK ADJUSTMENT. In the event of any change in Common Stock of the
Company by reason of a stock split, stock distribution, recapitalization,
exchange of shares, or other transaction, the number of shares remaining
subject to the option and the option price per share shall be appropriately
adjusted by the Committee.
7. CORPORATION REORGANIZATION. If there shall be any capital
reorganization or merger of the Company with another corporation or
corporations, or any sale of all or substantially all of the Company's
properties and assets to any other corporation or corporations, the Company
shall take such action as may be necessary to enable the Optionee to receive
upon any subsequent exercise of such option, in whole or in part, in lieu of
shares of Common Stock, securities or other assets as were issuable or
payable upon such reorganization, merger or sale in respect of, or in
exchange for such shares of Common Stock.
8. RIGHTS OF STOCKHOLDER. Neither the Optionee, his or her legal
representative, nor other persons entitled to exercise the option shall be or
have any rights of a stockholder in the Company in respect of the shares
issuable upon exercise of the option granted hereunder, unless and until
certificates representing such shares shall have been delivered pursuant to
the terms hereof.
9. STOCK RESERVED. The Company shall at all times during the term of
this Agreement reserve and keep available such number of shares of its Common
Stock as will be sufficient to satisfy the terms of this Agreement and shall
pay any original issue taxes on the exercise of this option.
10. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of any successor or successors of the Company.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.
ATTEST: MARGATE INDUSTRIES, INC.
___________________________________ By: __________________________________
David A. Widlak, William H. Hopton,
Secretary President
WITNESS:
___________________________________ By: __________________________________
OPTIONEE
<PAGE>
EXHIBIT (i)
MARGATE INDUSTRIES, INC.
129 North Main Street
Yale, MI 48097
Ladies and Gentlemen:
This will confirm my understanding with respect to the shares to be
issued (or reissued) to me by reason of my exercise this date of certain
stock option rights granted to me by Margate Industries, Inc. for the
purchase of ( ) shares of Common Stock
(the Shares) as follows:
(a) I am acquiring the Shares for my own account for investment with no
present intention of dividing my interest with others or of reselling or
otherwise disposing of any of the Shares.
(b) The Shares are being issued without registration under the
Securities Act of 1933 (the "Act") in reliance upon the private offering
exemption contained in Section 4(2) of the Act, and such reliance is based in
part on the above representation.
(c) The certificate for the shares of stock to be issued to me will bear
the following legend:
"The securities represented by this stock certificate have not been
registered under the Securities Act of 1933 (the "Act") or applicable state
securities laws (the "State Acts"), and shall not be sold, pledged,
hypothecated, donated, or otherwise transferred (whether or not for
consideration) by the holder except upon the issuance to the Corporation of
a favorable opinion of its counsel or submission to the Corporation of such
other evidence as may be satisfactory to counsel for the Corporation, to
the effect that any such transfer shall not be in violation of the Act and
the State Acts."
Appropriate stop transfer instructions will be issued by the Company to its
transfer agent.
(d) Since the shares have not been registered under the Act, they must
be held indefinitely until an exemption from the registration requirements of
the Act is available or they are subsequently registered, in which event the
representation in Paragraph (a) hereof shall terminate.
(e) These understandings shall not preclude a sale in compliance with
Rule 144 under the Act, as such rule may be amended and in effect at the
time. Sales of the shares made in reliance upon Rule 144 may only be made if
the Rule is then available and then only in limited amounts in accordance
with the terms and conditions of the Rule as in effect at the time of said
sales. I agree to furnish you, prior to any such sale, an executed copy of
the related Form 144, written confirmation of compliance with the Rule by
myself and the broker executing the sale, an
<PAGE>
opinion of counsel satisfactory to you that the sale does not require
registration under the Act, and such other evidence as you shall request of
compliance under the Rule.
(f) Margate Industries, Inc. is not obligated to comply with the
registration requirements of the Act or with the requirements for an
exemption under Regulation A under the Act for my benefit.
Date: By:
--------------------
<PAGE>
P R O X Y
MARGATE INDUSTRIES, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William H. Hopton and Frederick G.
Schriever, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote as designated below, all the shares
of common stock of Margate Industries, Inc. held of record by the undersigned
on May 10, 1995, at the Annual Meeting of Shareholders to be held on June 22,
1995, or any adjournment thereof.
1. The election of two (2) Class B Directors of the Company:
/ / FOR the nominees listed below
(except as marked to the contrary)
/ / WITHHOLD AUTHORITY to vote
for the nominees listed below
CLASS B NOMINEES THREE YEAR TERM:
Delbert W. Mullens
David A. Widlak
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR THE INDIVIDUAL NOMINEE,
CROSS OUT THE NOMINEE'S NAME ABOVE.)
2. Approval of the Company's Incentive Stock Option Plan:
/ / FOR / / AGAINST / / ABSTAIN
3. To transact such other business as may properly come before the
Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN
ACCORDANCE WITH THE SHAREHOLDER'S SPECIFICATIONS ABOVE. THIS PROXY
CONFERS DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR
DETERMINED AT THE TIME OF THE MAILING OF THE NOTICE OF THE ANNUAL
MEETING OF SHAREHOLDERS TO THE UNDERSIGNED.
<PAGE>
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement furnished therewith.
Dated: ___________________ , 1995.
_________________________________________
_________________________________________
Signature(s) of Shareholder(s)
Signature(s) should agree with the name(s)
appearing hereon. Executors, administrators,
trustees, guardians and attorneys should
indicate when signing. Attorneys should submit
powers of attorney.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
MARGATE INDUSTRIES, INC. PLEASE SIGN AND RETURN THIS PROXY IN THE
ENCLOSED PRE-ADDRESSED ENVELOPE. THE GIVING OF A PROXY WILL NOT
AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
