SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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 Rule 14a-11(c) or Rule 14a-12
Mark VII, 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:
MARK VII
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 17, 1995
TO ALL SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Mark VII,
Inc., a Missouri corporation, will be held on the 17th day of May, 1995, at
10:00 a.m., Central Daylight Savings Time, at the Kansas City Airport Embassy
Suites, 7640 N.W. Tiffany Springs Parkway, Kansas City, Missouri, for the
following purposes:
(1) To elect the members of the Board of Directors for the ensuing year or
until their successors are duly elected and qualified;
(2) To approve the adoption of the Mark VII, Inc. 1995 Omnibus Stock
Incentive Plan and the reservation of 600,000 shares of common stock for
issuance thereunder; and
(3) To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on April 3, 1995 as the
record date for the determination of the shareholders entitled to notice of and
to vote at the Annual Meeting or any adjournments or postponements thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ James T. Graves
James T. Graves
Secretary
Dated: April 21, 1995.
IMPORTANT-YOUR PROXY IS ENCLOSED
You are urged to sign, date and mail your proxy even though you may plan to
attend the meeting. No postage is required if mailed in the United States. If
you attend the meeting, you may vote by proxy or you may withdraw your proxy and
vote in person. By returning your proxy promptly, a quorum will be assured at
the meeting, which will prevent costly follow-up and delays.
MARK VII
10100 N.W. Executive Hills Blvd., Suite 200
Kansas City, Missouri 64153
______________________
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 17, 1995
______________________
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of Mark VII, Inc.
(the "Company") for use at its Annual Meeting of Shareholders (the "Annual
Meeting") to be held on Wednesday, May 17, 1995, at 10:00 a.m., Central Daylight
Savings Time, at the Kansas City Airport Embassy Suites, 7640 N.W. Tiffany
Springs Parkway, Kansas City, Missouri, or any adjournments or postponements
thereof. Shares represented by duly executed proxies received prior to the
Annual Meeting will be voted at the Annual Meeting. If a shareholder specifies
a choice on the form of proxy with respect to any matter to be acted upon, the
shares will be voted in accordance with such directions. If no choice is
specified, shares will be voted "FOR" the nominees listed on the proxy and in
this Proxy Statement and "FOR" approval of the adoption of the Mark VII, Inc.
1995 Omnibus Stock Incentive Plan (the "1995 Plan") and the reservation of
600,000 shares of common stock for issuance thereunder. Any person giving a
proxy has the power to revoke it at any time before it is exercised by giving
written notice to the Secretary of the Company at any time prior to its use or
by attending the Annual Meeting and voting in person (although attendance at the
Annual Meeting will not in and of itself constitute a revocation of proxy).
The Company will bear all of the costs of solicitation of proxies. In addition
to the use of the mails, proxies may be solicited by personal contact, telephone
or telegraph by officers or representatives of the Company, and the Company may
reimburse brokers or other persons holding stock in their names or in the names
of nominees for their expenses in sending proxy soliciting material to
beneficial owners. This Proxy Statement and the accompanying form of proxy are
being mailed or given to shareholders on or about April 21, 1995.
Only shareholders of record at the close of business on April 3, 1995 (the
"Record Date") will be entitled to notice of, and to vote at, the Annual
Meeting. On the Record Date, the Company had 4,823,936 shares of common stock
issued and outstanding and entitled to vote. Each outstanding share of common
stock is entitled to one vote on each matter brought to a vote. The presence,
either in person or by properly executed proxy, of the holders of a majority of
the outstanding shares of common stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum. Abstentions and broker non-votes will be
counted in determining whether a quorum has been reached. The affirmative vote
of the holders of at least a majority of the shares of common stock represented
in person or by properly executed proxy and entitled to vote at the Annual
Meeting is required (i) to approve the 1995 Plan and (ii) for election of each
nominee for director. A vote withheld from a particular nominee will have the
same effect as a vote against such nominee. The Company has been advised by the
National Association of Securities Dealers, Inc. (the "NASD") that the election
of directors is considered a "routine" item upon which broker-dealers holding
shares in street name for their customers may vote, in their discretion, on
behalf of any customers who do not furnish voting instructions within ten days
of the date these proxy materials are sent to such customers. Abstentions will
be considered in determining the number of votes required to approve the 1995
Plan. Consequently, an abstention cast as to this proposal will have the same
effect as voting against it. Broker non-votes will not be considered in
determining the number of votes required to approve the 1995 Plan. Each of the
directors and executive officers of the Company (who in the aggregate
beneficially own, as of the Record Date, approximately 39% of the outstanding
common stock) has indicated that he intends to vote "FOR" the 1995 Plan.
Management does not know of any matters, other than those referred to in the
accompanying Notice of Annual Meeting, which are to come before the Annual
Meeting. If any other matters are properly presented to the Annual Meeting for
action, it is intended that the persons named in the accompanying form of proxy,
or their substitutes, will vote in accordance with their judgment of the best
interests of the Company on such matters.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth with respect to the common stock as of April 10,
1995 (unless otherwise indicated): (i) the only persons known to be beneficial
owners of more than five percent of the common stock; (ii) shares beneficially
owned by all directors; (iii) shares beneficially owned by the persons named in
the Summary Compensation Table; and (iv) shares beneficially owned by all
directors and executive officers as a group. Beneficial ownership is direct,
and the holders have sole investment power and sole voting power, unless
otherwise indicated.
<TABLE>
<CAPTION>
Number of
Shares and
Nature of
Beneficial Percent
Name and Address of Beneficial Owners Ownership of Class
<S> <C> <C>
Roger M. Crouch
10100 N.W. Executive Hills
Boulevard, Suite 200
Kansas City, Missouri 64153 1,317,613 (1) 27.0%
R.C. Matney
201 South Emerson Avenue, Suite 130
Greenwood, Indiana 46143 428,690 (2) 8.8%
RCM Capital Management
RCM Limited L.P.
RCM General Corporation
Four Embarcadero Center, Suite 2900
San Francisco, California 94111 406,000 (3) 8.4%
Wellington Management Company
75 State Street
Boston, Massachusetts 02109 346,300 (4) 7.2%
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 254,900 (5) 5.3%
J. Michael Head 69,718 (6) 1.4%
James T. Graves 65,300 (7) 1.3%
David H. Wedaman 42,871 (8) .9%
Douglass Wm. List 12,500 (9) .3%
Robert E. Liss 7,786 (10) .2%
William E. Greenwood 5,000 (11) .1%
Dr. Jay U. Sterling 5,000 (11) .1%
Michael J. Musacchio 4,867 (12) .1%
All Executive Officers and Directors
as a Group (11 persons) 1,991,928 (13) 39.0%
______________________
<FN>
(1) Includes 962,869 shares owned directly; 130,000 shares owned by the Sugar
Lakes Foundation, of which Mr. Crouch is one of three trustees; 100,000
shares owned by the Catherine Fenner Crouch Charitable Remainder Unitrust
I, of which Mr. Crouch is sole trustee; 76,744 shares owned by the Rosalie
Crouch Trust, of which Mr. Crouch is sole trustee and shares voting power
with his wife; and 48,000 shares issuable pursuant to non-qualified stock
options granted under the Company's 1992 Non-Qualified Stock Option Plan
(the "NQSO Plan"). Mr. Crouch has shared voting and investment power with
respect to the shares beneficially owned by the Sugar Lakes Foundation and
has shared voting and sole investment power with respect to 76,744 shares
owned by the Rosalie Crouch Trust.
Mr. Crouch has an obligation to sell 55,106 shares of common stock to Mr.
Thomas F. Laughlin, Vice President, Chief Financial Officer and Treasurer
of MNX Carriers, Inc. ("Carriers"), a wholly owned subsidiary of the
Company, at a price per share of $5.15, pursuant to a Stock Purchase
Agreement, effective June 1, 1985. Under the terms of the Stock Purchase
Agreement, Mr. Crouch is obligated to sell the above shares to Mr. Laughlin
at any time on or before June 1, 1995, on 30 days written notice from Mr.
Laughlin.
(2) Includes 335,430 shares owned indirectly through Mr. Matney's living trust,
45,260 shares owned indirectly through Mr. Matney's individual retirement
account and 48,000 shares issuable pursuant to non-qualified stock options
granted under the NQSO Plan.
(3) RCM Capital Management ("RCM Capital") is a registered investment advisor,
RCM Limited L.P. ("RCM Limited") is the general partner of RCM Capital and
RCM General Corporation ("RCM General") is the general partner of RCM
Limited. RCM Limited and RCM General are deemed to have beneficial
ownership of securities managed by RCM Capital. As of December 31, 1994,
RCM Capital, RCM Limited and RCM General have sole voting power with regard
to 356,000 shares and sole investment power with regard to 406,000 shares.
The information as to the beneficial ownership of RCM Capital, RCM Limited
and RCM General was obtained from the Schedule 13G filed by them.
(4) Wellington Management Company ("Wellington"), a registered investment
advisor, is deemed to have beneficial ownership of 346,300 shares as of
December 31, 1994, which are owned by numerous investment advisory clients.
Wellington has shared voting power with regard to 198,300 shares and shared
investment power with regard to 346,300 shares. The information as to the
beneficial ownership of Wellington was obtained from the Schedule 13G filed
by that company.
(5) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 254,900 shares as of
December 31, 1994, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company,
or in series of the DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, all of which Dimensional
serves as investment manager. Dimensional disclaims beneficial ownership
of all such shares. The information as to the beneficial ownership of
Dimensional was obtained from the Schedule 13G filed by that company.
(6) Includes 4,468 shares owned directly, 14,392 shares issuable pursuant to
incentive stock options granted under the Company's 1986 Incentive Stock
Option Plan (the "ISO Plan"), and 50,858 shares issuable pursuant to non-
qualified stock options granted under the NQSO Plan.
Mr. Head has an obligation to sell 4,468 shares of common stock to Mr.
Laughlin at a price per share of $5.15, pursuant to a Stock Purchase
Agreement, effective June 1, 1985. Under the terms of the Stock Purchase
Agreement, Mr. Head is obligated to sell the above shares to Mr. Laughlin
at any time on or before June 1, 1995, on 30 days written notice from Mr.
Laughlin.
(7) Includes 5,300 shares held in Mr. Graves' individual retirement account and
60,000 shares issuable pursuant to non-qualified stock options granted
under the NQSO Plan.
(8) Includes 8,500 shares held directly by Mr. Wedaman, 33,000 shares issuable
pursuant to incentive stock options granted under the ISO Plan and 1,371
shares allocated to the Mark VII, Inc. Savings and Investment Plan (the
"SIP Plan") account of Mr. Wedaman. Mr. Wedaman has sole investment power
and shared voting power with respect to the shares allocated to his SIP
Plan account.
(9) Includes 400 shares owned directly, 6,100 shares owned indirectly through
Mr. List's individual retirement account and 6,000 shares issuable pursuant
to non-qualified stock options granted under the NQSO Plan.
(10) Includes 6,650 shares owned directly and 1,136 shares owned indirectly
through Mr. Liss's wife's individual retirement account.
(11) Includes 5,000 shares issuable pursuant to non-qualified stock options
granted to each of Mr. Greenwood and Dr. Sterling under the NQSO Plan.
(12) Includes 1,000 shares owned directly and 3,867 shares owned jointly with
Mr. Musacchio's wife.
(13) Includes 51,392 shares issuable pursuant to incentive stock options granted
under the ISO Plan and 222,858 shares issuable pursuant to non-qualified
stock options granted under the NQSO Plan.
</TABLE>
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The shares represented by the enclosed proxy will be voted, unless otherwise
indicated, for the election of the eight nominees for director named below. The
directors to be elected at the Annual Meeting will serve for one year or until
their successors are duly elected and qualified. In the unanticipated event
that any nominee for director should become unavailable, the Board of Directors,
at its discretion, may designate substitute nominees, in which event such shares
will be voted for such substitute nominees.
Management recommends a vote for the election of the eight nominees for
director named below.
Director Principal Occupation for
Director Since Age Last Five Years and Directorships
R. C. Matney 1989 57 Chairman of the Board of the Company since
February 1992 and President and Chief
Executive Officer of the Company since
July 1994. From May 1991 until February
1992, Mr. Matney was President of the
Company. Since July 1987, Mr. Matney has
also been Chairman of the Board of Mark
VII Transportation Company, Inc. ("Mark
VII"), the Company's principal operating
subsidiary. From July 1987 to February
1993, he was also President of Mark VII.
J. Michael Head 1986 41 Executive Vice President, Chief Financial
Officer and Treasurer of the Company since
July 1994. President of the Company from
February 1992 to July 1994 and Chief
Executive Officer of the Company from
November 1988 to July 1994. From May 1991
to February 1992, Mr. Head served as Vice
Chairman of the Board of the Company. Mr.
Head was President of the Company from
October 1984 to May 1991.
James T. Graves 1987 60 Secretary of the Company since May 1992,
General Counsel of the Company since March
1993 and Vice Chairman since May 1993.
President of Missouri-Nebraska Express,
Inc. ("Mo-Neb"), a subsidiary of Carriers,
from September 1991 to May 1993. From
July 1981 until September 1991, Mr. Graves
was a partner in the law firm of Clark,
Mize and Linville in Salina, Kansas.
David H. Wedaman 1994 37 Executive Vice President of the Company
since May 1991 and Chief Operating Officer
of the Company since September 1994.
President of Mark VII since February 1993.
From March 1991 to February 1993, he was
Executive Vice President of Mark VII. Mr.
Wedaman joined Mark VII as Vice President
in February 1989.
Roger M. Crouch 1976 57 Mr. Crouch is under contract with the
Company but is currently unassigned. He
was Vice Chairman of the Board of the
Company from February 1992 to September
1994. Mr. Crouch was Chairman of the
Board of the Company from October 1984 to
February 1992.
Douglass Wm. List(1)(2) 1993 39 Since January 1988, Mr. List has been
President of List & Company, Inc., a
management consulting firm in Baltimore,
Maryland. Mr. List has also been
President, since 1992, of Railway
Engineering Associates, a firm involved in
developing railroad technology. From 1988
to 1992, he was Vice President and General
Manager of Railway Engineering Associates.
Mr. List is a director of Harmon
Industries, Inc., a publicly held company
headquartered in Blue Springs, Missouri.
Harmon Industries, Inc. is a supplier of
communication and safety-related equipment
for railroads worldwide.
William E. Greenwood(2) 1994 56 Mr. Greenwood is currently a self-employed
consultant. He served with the Burlington
Northern Railroad Company, the largest
railroad in the United States and the
principal subsidiary of Burlington
Northern Inc., a publicly held company
headquartered in Fort Worth, Texas, in
various capacities from 1963 to 1994,
serving as Chief Operating Officer from
1990 to 1994. Mr. Greenwood is a director
of Transcisco Industries, Inc., a publicly
held company headquartered in San
Francisco, California. Transcisco
Industries, Inc. is a railcar and
industrial services company operating in
domestic railcar maintenance and repair,
railcar leasing and management and
international railcar leasing.
Dr. Jay U. Sterling(1)(2) 1995 61 Dr. Sterling has been an Associate
Professor of Marketing at the University
of Alabama, Tuscaloosa since 1984. Dr.
Sterling has a Doctor of Philosophy
("Ph.D.") degree in marketing and
logistics from Michigan State University.
In addition to his teaching
responsibilities, he has performed
research and written extensively in the
areas of transportation, distribution and
logistics management and has also
consulted extensively in the areas of
transportation and logistics management.
Prior to obtaining his Ph.D., Dr. Sterling
spent 25 years in industry with Whirlpool
Corporation and The Limited in various
logistics related positions.
__________________________
(1) Member of the Audit Committee.
(2) Member of the Compensation/Stock Option Committee.
The Board of Directors and Board Committees
The Board of Directors held 17 meetings and acted by unanimous written consent
on 24 separate occasions during 1994.
The functions of the Audit Committee are to review significant financial
information of the Company, ascertain the existence of an effective accounting
and internal control system, oversee the audit function and recommend the
appointment of independent auditors for the Company. The Audit Committee held
two meetings in 1994. A representative of the Company's independent auditors
was present at those meetings, as well as at three of the four regular Board
meetings.
The Compensation Committee reviews salaries and bonuses of executive officers
and administers employee bonus plans and other Company compensation programs.
The Compensation Committee held one meeting in 1994.
The functions performed by the Stock Option Committee are the administration
and the granting of stock options under the ISO Plan and the NQSO Plan. The
Stock Option Committee held no meetings and acted by unanimous written consent
on two occasions in 1994.
Effective February 22, 1995, the functions of the Compensation and Stock
Option Committees were combined in one committee. If Proposal No. 2 is approved
by shareholders, this committee will administer the 1995 Plan. See "Proposal
No. 2 -- A Proposal to Approve the 1995 Omnibus Stock Incentive Plan --
Administration."
The Company does not have a standing nominating committee.
All directors attended at least 75% of the total number of meetings held in
1994 of the Board and committees on which they served, with the exception of Mr.
Wedaman who attended one of the three meetings of the Board held after he became
a member of the Board.
Directors' Fees and Related Information
Until October 26, 1994, each non-employee director was paid an annual
director's fee of $2,500 and $1,000 for each meeting of the Board or its
committees which he attended. Effective October 26, 1994, the annual fees were
increased to $15,000 and meeting fees were eliminated. Each non-employee
director also receives an automatic grant of options to purchase shares of
common stock under the NQSO Plan. Effective with meetings of the Board of
Directors on or after May 17, 1995, a revised compensation plan for non-employee
directors has been adopted. Fees will be as follows: (i) $500 per month
retainer, with an additional $250 per month for the chairman of each of the
Compensation and Audit Committees, (ii) meeting fees of $1,500, $750 and $500
for each Board, committee and telephonic Board meeting attended, respectively,
(iii) an annual grant of options to purchase 2,000 shares of common stock
pursuant to the 1995 Plan, which options are immediately exercisable and expire
three years from the date of grant, (iv) grants of 75 shares of common stock
each quarter pursuant to the 1995 Plan and (v) standard per diem rate of $1,500
per day spent on Company affairs which are outside of normal director duties.
The fees described in (iii) and (iv) above are subject to shareholder approval
of the 1995 Plan. See "Proposal No. 2 -- A Proposal to Approve the 1995 Omnibus
Stock Incentive Plan -- Non-Employee Director Options" and "-- Non-Employee
Director Stock Awards."
On February 3, 1994, May 11, 1994, October 26, 1994 and February 22, 1995, H.
B. Oppenheimer, Mr. List, Mr. Greenwood and Dr. Sterling received options to
purchase 1,000 shares, 1,000 shares, 5,000 shares and 5,000 shares,
respectively, of common stock at exercise prices per share of $13 7/8, $12, $10
3/4 and $13 3/4, respectively, pursuant to the NQSO Plan.
H. B. Oppenheimer, a former director who resigned February 22, 1995, waived
the receipt of the annual and per meeting director's fees but billed the Company
for financial consulting services performed by H. B. Oppenheimer & Company
Incorporated, an investment banking firm of which Mr. Oppenheimer is President
and Chief Executive Officer ("HBOC"). In connection with the sale of
substantially all of the assets of the Company's truckload subsidiaries to Swift
Transportation Co., Inc. (the "Asset Sale") and the previously planned spin-off
of the Company's truckload operations (the "Distribution") and the related
refinancing of the Company's lines of credit and equipment leases and loans,
HBOC received fees of $712,392 in 1994 and $281,806 in 1995.
EXECUTIVE OFFICERS AND KEY EMPLOYEES
NAME AGE POSITION
R. C. Matney 57 Chairman of the Board, President and
Chief Executive Officer
James T. Graves 60 Vice Chairman of the Board, General
Counsel and Secretary
J. Michael Head 41 Executive Vice President, Chief
Financial Officer and Treasurer
David H. Wedaman 37 Executive Vice President, Chief
Operating Officer; and President of Mark VII
Janet K. Pullen 40 Vice President of Finance, Assistant
Treasurer and Assistant Secretary since July
1994, Vice President/Chief Financial Officer
from November 1988 to July 1994 and Treasurer
from May 1992 to July 1994; from June 1985
until May 1992, she was also Secretary
Robert E. Liss 43 Executive Vice President/Special
Services Division of Mark VII since May 1993;
from December 1992 to May 1993, he was Vice
President of Mark VII; from January 1989 to
December 1992, he was Vice President-
Intermodal with C. H. Robinson Company, a
third party agent specializing in freight and
produce brokerage
Michael J. Musacchio 43 Executive Vice President/Logistics
Services Division of Mark VII since May 1993;
from December 1992 to May 1993, he was Vice
President of Mark VII; from August 1992 to
December 1992, he was an agent with Mark VII;
from December 1988 to July 1992, he was Vice
President of Transportation with C. H.
Robinson Company
Executive officers will be elected annually by the Board of Directors and will
serve until their successors are elected or until resignation or removal. There
are no family relationships among any of the directors or executive officers.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors, and persons who beneficially own more than ten percent
(10%) of the Company's stock, to file initial reports of ownership and reports
of changes in ownership with the Securities and Exchange Commission (the "SEC")
and the NASD. Executive officers, directors and greater than ten percent (10%)
beneficial owners are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the Company
and written representations from the executive officers and directors, the
Company believes that all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than ten percent (10%) beneficial
owners were met, except for the Form 4 for Mr. Liss for November 1994 which was
filed March 3, 1995, and the Form 4 for Mr. Wedaman for December 1994 which was
filed March 17, 1995, each of which reported one transaction.
EXECUTIVE COMPENSATION
The following table summarizes, for each of the three fiscal years in the
period ended December 31, 1994, the compensation awarded, paid to or earned by
(i) each person who served as the Chief Executive Officer (the "CEO") of the
Company during 1994, (ii) each of the four most highly compensated executive
officers (other than the CEO) whose total annual salary and bonus exceeded
$100,000 and who served as an executive officer of the Company or its
subsidiaries as of December 31, 1994 and (iii) one additional individual for
whom disclosure would have been required under (ii) above except he was not
serving as an executive officer as of December 31, 1994 (collectively, the
"Named Executive Officers").
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
------------
Securities
Annual Compensation Underlying
--------------------- Options/ All Other
Name and Principal Position Year Salary Bonus SAR's(#) Compensation(2)
- - --------------------------- ---- --------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
R.C. Matney, Chairman of 1994 $ 204,636 $115,693 250,000 $ -
the Board, President and 1993 175,000 - - -
Chief Executive Officer 1992 175,000 - 60,000 100
Robert E. Liss, Executive Vice 1994 125,000 145,452 - -
President, Special Services 1993 125,143 4,000 - -
Division of Mark VII 1992 - - - -
David H. Wedaman, Executive 1994 135,111 96,250 (1) 7,500 -
Vice President, Chief Operating 1993 119,820 60,000 (1) - -
Officer and Director; 1992 105,040 55,656 (1) - 100
President, Mark VII
Michael J. Musacchio, Executive 1994 120,142 51,686 - -
Vice President, Logistics 1993 120,142 50,000 - -
Services Division of Mark VII 1992 - - - -
James T. Graves, Vice Chairman 1994 175,000 - - 360
of the Board, Secretary, 1993 181,233 - - 562
General Counsel and Director 1992 170,921 - 60,000 4,355
Roger M. Crouch, Director and 1994 225,000 - - 288
former Vice Chairman of the 1993 233,014 - - 288
Board 1992 208,126 - 60,000 212,001
J. Michael Head, Executive 1994 174,272 - 10,000 700
Vice President, Chief 1993 181,233 - - 902
Financial Officer, Treasurer 1992 171,521 - 60,000 1,916
and Director; former President
and Chief Executive Officer
____________
<FN>
(1) Includes performance bonuses of $43,750, $60,000 and $48,000 and cash
payments pursuant to stock appreciation rights ("SAR's") of $52,500, $0 and
$7,656 in 1994, 1993 and 1992, respectively.
(2) Includes a Company matching contribution of $100 in 1992 to the SIP Plan (a
defined contribution plan) for each of the Named Executive Officers and
Company-paid premiums for an executive long-term disability policy for
Messrs. Head, Crouch and Graves of $1,816, $1,901 and $4,255, respectively.
In addition, Mr. Crouch received a payment of $210,000 in 1992 for entering
into a non-compete agreement with the Company. Amounts in 1993 and 1994
represent Company matching contributions to the SIP Plan.
</TABLE>
The following two tables present information for the last completed fiscal
year relating to (i) grants to and exercises by the Named Executive Officers of
stock options granted pursuant to the NQSO Plan and the ISO Plan and (ii)
holdings at December 31, 1994 by the Named Executive Officers of unexercised
options granted pursuant to the NQSO Plan and the ISO Plan, and stock
appreciation rights ("SAR's") granted pursuant to the Company's Stock
Appreciation Rights Program.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
Individual Grants
--------------------------- Potential Realizable Value
Number of % of Total at Assumed Annual Rates
Securities Options/SAR's of Stock Price Appreciation
Underlying Granted to Exercise or for Option Term (4)
Options/SAR's Employees in Base Price Expiration -----------------------------
Name Granted (#) Fiscal Year ($/Share Date 5% ($) 10% ($)
- - ---------------- ----------- -------------- ----------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
R. C. Matney 250,000 (1) 81% $ 14.00 (1) $2,098,565 $5,363,476
David H. Wedaman 7,500 (2) 2% 11.25 12/30/04 53,063 134,472
J. Michael Head 10,000 (3) 3% 14.00 07/01/99 38,679 85,471
<FN>
(1) Represents options to purchase 214,290 shares and 35,710 shares granted
pursuant to the NQSO Plan and the ISO Plan, respectively. These options
become exercisable ratably over eight years beginning July 1, 1995 and, if
unexercised, expire five years after becoming exercisable. The NQSO Plan
and the ISO Plan each provide that all of these options become exercisable
in the event of a change in control, as defined in the respective plans.
(2) Represents options to purchase 7,500 shares granted pursuant to the ISO
Plan. These options become exercisable ratably over five years beginning
December 30, 1995.
(3) Represents options to purchase 7,142 shares and 2,858 shares granted
pursuant to the ISO Plan and the NQSO Plan, respectively. These options
were immediately exercisable.
(4) The values presented in these two columns are required disclosures under
federal securities laws based on assumed stock price appreciation rates.
THESE ASSUMED APPRECIATION RATES ARE NOT DERIVED FROM THE HISTORIC OR
PROJECTED PRICES OF THE COMPANY'S COMMON STOCK OR RESULTS OF OPERATIONS OR
FINANCIAL CONDITION AND THEY SHOULD NOT BE VIEWED AS A PREDICTION OF
POSSIBLE PRICES FOR THE COMPANY'S COMMON STOCK IN THE FUTURE.
</TABLE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAREND OPTION/SAR VALUES
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the Money
Options/SAR's at Options/SAR's at
Shares Fiscal Yearend Fiscal Yearend (1)
Acquired On Value ---------------------------- --------------------------
Name Exercise(#) Realized Exercisable Unexercisable Exercisable Unexercisable
- - ------------- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
R.C. Matney - $ - 42,000 18,000 $126,000 $ 54,000
- - - 250,000 - - (2)
David H. Wedaman - - 26,401 6,599 184,807 46,193
- - - 7,500 - - (2)
- - - 7,000 - - (2)
James T. Graves - - 60,000 - 180,000 -
Roger M. Crouch - - 42,000 18,000 126,000 54,000
J. Michael Head - - 42,000 18,000 126,000 54,000
- - 10,000 - - (2) -
- - 7,250 - 23,563 -
<FN>
(1) Based on the yearend market price of $11.25.
(2) The exercise price of these options was greater than or equal to the
yearend market price.
</TABLE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
Each of the Named Executive Officers has an employment contract with the
Company which could result in payments in excess of $100,000. A summary of the
base salary and terms provided in the employment contracts follows:
Name Base Salary Expiration of Contract
R.C. Matney $ 235,000 April 1, 2002
Robert E. Liss 125,000 30 days' notice
David H. Wedaman 175,000 January 1, 1997
Michael J. Musacchio 125,000 30 days' notice
James T. Graves 175,000 July 31, 1997
Roger M. Crouch 225,000 December 23, 2002
J. Michael Head 175,000 September 30, 1996
Each of the contracts provides for payment of the contracted base salary and
benefits after termination as follows:
Event of Termination Pay Subsequent to Termination
Death or Disability One year
Termination by Company, except
for cause Remainder of contract term (or one year
if no specified term)
Under each of the contracts, except Mr. Crouch's, the Company's obligation is
reduced following an event of termination if the terminated executive becomes
employed during the payment period. Mr. Head's contract also provides for
payment of base salary and benefits for the greater of the remainder of the
contract term or one year after resignation, unless terminated for cause. Mr.
Wedaman may be terminated by the Company for failure to achieve 50% of planned
operating income in his business unit, in which case he will receive his base
salary and benefits for only one year following the date of termination. Each
of Messrs. Liss and Musacchio may be terminated by the Company with no further
payments for failure to achieve pretax profit (as defined in their respective
agreements) of $250,000 in his business unit for any year. If either of Messrs.
Liss or Musacchio is terminated following a year in which $250,000 of pretax
profit was achieved, he will receive the greater of (i) three times his prior
year's compensation or (ii) $1.4 million for Mr. Liss or $1 million (or $1.4
million if pretax profit exceeded $2 million) for Mr. Musacchio. In the event
either of these two contracts is terminated because pretax profit of $250,000
was not attained but the respective business unit was profitable, the Company
may extend for up to three years the confidentiality, non-compete and
prohibition against solicitation of employees provisions of the respective
agreements by continuing to pay the base salary and making advance annual
payments of $300,000 for the first year, $300,000 for the second year and
$50,000 for the third year to Mr. Liss and $250,000 for the first year, $200,000
for the second year and $200,000 for the third year to Mr. Musacchio.
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1994, Messrs. Head, Oppenheimer and List served on the Company's
Compensation Committee. Mr. Head is Executive Vice President and Chief
Financial Officer of the Company (and was President and Chief Executive Officer
of the Company until July 1994). Mr. Oppenheimer is President and Chief
Executive Officer of HBOC which received fees from the Company totaling $994,000
for consulting services performed in 1994, primarily for consulting services
rendered in connection with the previously proposed Distribution and the Asset
Sale.
BOARD COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee of the Company (the "Committee") during 1994
consisted of Messrs. Head, Oppenheimer and List. The Committee met two times
during December 1993 to review compensation arrangements and long term
employment agreements for the executive officers of the Company and its
subsidiaries, conditioned on the completion of the proposed Distribution. The
Committee also met one time in July 1994 to revise compensation arrangements to
give effect to the Asset Sale.
The Committee has not yet adopted a policy with respect to the $1,000,000
limitation of deductibility of executive compensation under Section 162(m) of
the Internal Revenue Code of 1986, as amended, since current compensation levels
fall well below that amount. The Committee does not expect that the
compensation of its executives will reach that threshold in the foreseeable
future.
There are three major elements of the Company's executive compensation
program: base salary, annual bonus and stock options/SAR's. The objective of
these three elements is to provide the compensation necessary to attract,
motivate and retain dedicated and talented executives, to encourage an
atmosphere of teamwork to achieve the Company's objectives and to provide a link
between the success of the Company's executives and its shareholders.
The Committee considered several factors in determining the amounts of
compensation paid to each of the executive officers as set forth in each of
their respective employment agreements, including: (i) compensation of
executives employed by certain competitors of the Company that are part of the
Nasdaq Trucking and Transportation Stocks Index (the "NASDAQ Industry Index") as
set forth on the performance graph below; (ii) compensation of executives in
other selected companies comparable in size and type of operations to the
Company; (iii) experience and performance history with the Company and with
previous employers and suitability for present assignment; (iv) past
compensation arrangements with the Company (salary history); (v) retention of
key executives of the Company; and (vi) relationship of corporate performance to
increased compensation.
Approximately equal weight was placed on each of the factors considered by the
Committee. Those competitors which were compared to the Company by the
Committee with respect to compensation arrangements include eleven truckload
companies and five transportation services firms: Werner Enterprises, Inc., JB
Hunt Transport Services, Inc., Heartland Express, Inc., Swift Transportation
Co., Inc., Landstar Systems, Inc., M.S. Carriers, Inc., Frozen Food Express
Industries, Inc., Builders Transport, Inc., KLLM Transportation Services, Inc.,
Marten Transport Ltd., Cannon Express, Inc., Fritz Companies, Inc., Air Express
International Corporation, the Harper Group, Expeditors International of
Washington, Inc., and Intertrans Corporation. These other companies selected
for comparison to the Company were chosen on the basis of their similarity in
size to the Company, as measured by revenues, and because these companies are
those most frequently compared to the Company by the two market makers in the
Company's securities, Alex. Brown & Sons, Inc. and Morgan Keegan & Company, Inc.
The Committee considered each item of compensation (base salary, bonus and stock
options/SAR's) awarded to the Company's executive officers against comparable
items as paid by the Company's competitors to their executives.
The Committee also measured corporate performance, based on the Company's
profitability and stock performance relative to the Company's peers, including
those peers listed above and in the Nasdaq Industry Index. The stock price
performance of the Company and its peer group was measured by comparing the
Company's cumulative total shareholder return (as defined below) to the
cumulative total shareholder return of the Nasdaq Industry Index and the
companies listed above. The two market makers in the Company's securities
listed above have, in the past, examined the performance of these companies when
analyzing the Company's stock performance.
Base Salary
Based on the performance of the Company's stock against its peers in the
Nasdaq Industry Index, the determination that the executive officers'
contractual base salaries were approximately in the median of the range paid by
comparable companies (other than Mr. Wedaman, whose base salary prior to the
adjustments described below was at the low end of that range), and the
recommendations of the management team itself, no adjustments were made to the
executive officers' previous compensation arrangements. However, Mr. Wedaman's
base salary was increased from $120,000 to $150,000 on July 1, 1994 and to
$175,000 on January 1, 1995, as a result of the profitability of his business
unit, which includes Mark VII, excluding the logistics, special services and
risk management services divisions. The Company has historically adjusted
salary levels annually.
Annual Bonus
The employment agreement of each of the executive officers, other than Mr.
Wedaman, gives each of them the right to participate equally in any senior
executive management bonus program established by the Company. The Committee
has the discretion to establish this bonus program and to set the goals in such
program. Mr. Wedaman's bonus program is set forth in his employment contract.
The bonus, if any, paid by the Company to its executive officers, other than Mr.
Wedaman, is customarily based on achievement of corporate performance
objectives. This is because the Committee believes that the executives must
work as a team and that the relationship between the efforts of any one
individual and the Company's performance is difficult to quantify; as a result,
the bonuses of the executives tend to track with the performance of the Company.
Historically, the annual bonuses to the executive officers have been based on
attainment of certain earnings per share and return on asset goals. Because of
the significant corporate restructuring, the Committee decided not to establish
a bonus program for the executive officers of the Company, other than Messrs.
Matney (see "CEO Compensation") and Wedaman, in 1994. For this reason, no
bonuses were paid to Messrs. Head, Crouch or Graves for 1994.
Mr. Wedaman's bonus program, as provided for in his employment contract, is
based upon the pretax profit (computed on the basis of generally accepted
accounting principles consistently applied) earned by his business unit as
compared to the annual budget of that unit. Mr. Wedaman's bonus is payable in
increments of 10% of his base salary, from 40% of his base salary if the pretax
profit of his business unit meets what was budgeted, to 100% of his base salary
if the pretax profit of his business unit is 200% or more of that budgeted. No
bonus is payable if the pretax profit of his business unit is less than 100% of
that budgeted, unless the budget for 1992 of $3.9 million is achieved, in which
case his bonus is 25% of base salary. As reported in the Summary Compensation
Table, a bonus of 25% of his January 1, 1995 level of base salary was paid to
Mr. Wedaman based on exceeding the 1992 budget for his business unit in 1994.
Bonus programs for key employees, as provided for in their employment
contracts, are based on the profitability of their respective business units.
Each of Messrs. Liss's and Musacchio's agreements provide for a bonus of 25% of
pretax profit (computed on the basis of generally accepted accounting principles
consistently applied and defined in the respective agreements) earned by his
business unit, reduced to 15% in certain circumstances.
Stock Options/SAR's
Based on the factors set forth above, no stock options or SAR's were granted
in 1994 to the executive officers other than the persons who served as CEO (see
"CEO Compensation") and Mr. Wedaman. Mr. Wedaman was granted options to
purchase 7,500 shares of the Company's common stock pursuant to the ISO Plan at
an exercise price equal to $11.25, the last sale price on December 30, 1994.
These options vest over five years and expire five years from the date of
vesting. In 1990, Mr. Wedaman was granted stock appreciation rights with
respect to 7,000 shares of the Company's common stock. The stock appreciation
rights provide for cash payments to holders of the rights for increases in the
market prices of the Company's common stock as of April 1 of each year. The
adjusted base price as of April 1, 1994 was $14.75 per share, resulting in
payment of $52,500 to Mr. Wedaman under this program in 1994. The base price is
adjusted each April 1 if the market closing price on that date is greater than
the previous base price.
CEO Compensation
The compensation of the CEO is reviewed by the Committee each year against
compensation paid to executives holding comparable positions of responsibility
at transportation services companies of similar size and type of operations.
The Committee considers the same factors when determining CEO compensation as it
does when it sets compensation of other executive officers.
In setting Mr. Matney's compensation, the Committee reviewed the change in
fair market value of the Company since the acquisition of Mark VII, the
Company's principal operating subsidiary, from Mr. Matney in 1989. During that
time, the value of the transportation services business has increased
substantially while the value of the truckload business declined substantially.
The Committee estimated that if the truckload business had maintained its market
value during this period (during which time its peer group increased in value by
approximately 150%), Mr. Matney's holdings in the Company, including options,
would have increased in value by an additional 5% of the estimated market value
of the post-Distribution Company. While no retroactive compensation was
recommended by the Committee, this 5% benchmark was a consideration in
establishing Mr. Matney's initial post-Distribution (and consequently post-Asset
Sale) compensation package.
Effective July 1, 1994, Mr. Matney became President and CEO and Mr. Head,
former CEO, assumed the positions of Executive Vice President, Chief Financial
Officer and Treasurer of the Company. At the same time and conditioned upon
subsequent shareholder approval of the Asset Sale, Mr. Matney and Mr. Head were
granted options to purchase up to 250,000 shares and 10,000 shares,
respectively, at an exercise price equal to $14.00, the last sale price on July
1, 1994. Of the options granted to Mr. Matney, which vest over eight years at a
rate of 31,250 shares per year and expire five years after the date of vesting,
options for 214,290 shares were issued under the NQSO Plan and options for
35,710 shares were granted under the ISO Plan. Of the options granted to Mr.
Head, which vested upon shareholder approval of the Asset Sale and expire on
July 1, 1999, options for 2,858 shares were granted under the NQSO plan and
options for 7,142 shares were granted under the ISO Plan. Based on a review of
the factors set forth above and because of the substantial restructuring of the
Company and officers' responsibilities, the Committee recommended no adjustments
to Mr. Head's base salary in 1994 and did not recommend that any annual bonus be
paid.
Effective July 1, 1994, Mr. Matney's base salary was set as approximately a
factor-weighted average of the compensation received by the chief executive
officers at the five publicly traded transportation services companies in the
Company's peer group (the "transportation services peer group"). The companies
in the transportation services peer group were selected for comparison based on
their reputations for providing superior service to their customers and
financial performance measured by their growth rates and cumulative total
shareholder return (as defined below). The factors used by the Committee as a
reference point for development of Mr. Matney's compensation were calculated as
follows: (a) the average compensation paid by the peer group to each of their
chief executive officers as a percentage of revenues (.11%) was multiplied by
projected 1994 revenues of the Company to obtain an indicated compensation level
on the basis of revenues, (b) the average compensation paid by the peer group to
each of their chief executive officers as a percentage of assets (.24%) was
multiplied by the projected post-Distribution assets of the Company to obtain an
indicated compensation level on the basis of assets, and (c) the average
compensation paid by the peer group to each of their chief executive officers as
a percentage of aggregate market value (.22%) was multiplied by the projected
post-Distribution market value of the Company to obtain an indicated
compensation level on the basis of the market value. These three factor-based
indicators of appropriate compensation levels were added together and the total
amount was divided by three.
Commencing in 1995, Mr. Matney will be paid two annual cash bonuses, neither
of which will exceed half of his base salary. For 1994, the first bonus (which
is reported in the Summary Compensation Table) will be an amount equal to his
base salary multiplied by that percentage (49%) of his base salary by which
consolidated income from continuing operations before income tax for 1994
exceeded $4,199,325 (the fiscal 1993 amount). The base for this calculation
will be increased 25% each year thereafter. For any fiscal year during which a
25% increase in consolidated income from continuing operations before income tax
is not attained, this bonus will not be paid. The second bonus will be an
amount equal to his base salary multiplied by the percentage increase (if any)
in the Company's stock price per share in excess of the increase in the stock
price per share of the transportation services peer group measured from July to
June.
H. B. Oppenheimer Douglass Wm. List J. Michael Head
PERFORMANCE GRAPH
The following line graph compares the yearly percentage change in the
Company's cumulative total shareholder return on the common stock with (i) the
cumulative total return of the CRSP Total Return Index for the Nasdaq Stock
Market (U.S. Companies) and (ii) the cumulative total return of the CRSP Total
Return Index for Nasdaq Trucking & Transportation Stocks for the five year
measurement period. For purposes of this graph, "cumulative shareholder return"
is measured by dividing (1) the sum of (x) the cumulative amount of dividends
for the measurement period, assuming dividend reinvestment, and (y) the
difference between the price of the Company's common stock at the end and
beginning of the measurement period, by (2) the price of the common stock at the
beginning of the measurement period. The measurement period used begins on
January 1, 1990 and ends on December 31, 1994.
<TABLE>
FIVE YEAR TOTAL RETURN COMPARISON
Mark VII, Inc. vs. Industry vs. Nasdaq
<CAPTION>
Nasdaq Nasdaq
Trucking & Stock
Transportation Market
Measurement Period Mark VII, Inc. Stocks (U.S. Companies)
<S> <C> <C> <C>
Measurement Point - 01/01/90 $100.0 $100.0 $ 100.0
Fiscal Year Ended - 12/29/90 68.2 77.7 85.1
Fiscal Year Ended - 12/28/91 125.0 112.9 136.6
Fiscal Year Ended - 01/02/93 136.4 138.2 158.9
Fiscal Year Ended - 01/01/94 213.6 167.8 181.3
Fiscal Year Ended - 12/31/94 204.5 152.2 177.3
</TABLE>
The Company will provide to shareholders, without charge, a list of the
component companies in the CRSP Total Return Index for NASDAQ Trucking and
Transportation Stocks. Requests for the list should be addressed to Mark VII,
Inc., 10100 N.W. Executive Hills Boulevard, Suite 200, Kansas City, Missouri
64153, Attention: J. Michael Head.
PROPOSAL NO. 2 - A PROPOSAL TO APPROVE THE
1995 OMNIBUS STOCK INCENTIVE PLAN
The Company is proposing for shareholder approval the 1995 Plan. The full
text of the 1995 Plan is set forth in this Proxy Statement as Annex A.
Reference should be made to Annex A for a complete statement of the provisions
of the 1995 Plan summarized on the following pages. The 1995 Plan is designed
to enable qualified executive, managerial, supervisory and professional
personnel of the Company to acquire or increase their ownership of the common
stock of the Company on reasonable terms. The opportunity so provided is
intended to foster in participants a strong incentive to put forth maximum
effort for the continued success and growth of the Company, to aid in retaining
individuals who put forth such efforts and to assist in attracting the best
available individuals in the future. Towards these objectives, the 1995 Plan
provides for the granting of stock options, restricted stock awards, performance
share awards and other incentive awards.
The Company previously adopted the NQSO Plan and the ISO Plan. The proposed
1995 Plan provides for the granting of awards which are similar to the types of
awards presently granted under the NQSO Plan and the ISO Plan. In addition, the
1995 Plan contains certain features and provides for several types of awards not
currently found in the prior plans. If the 1995 Plan is approved, no further
awards will be made under the NQSO Plan or the ISO Plan, which as of April 10,
1995 have an aggregate of approximately 327,000 shares of the Company's common
stock available for additional awards thereunder.
ADMINISTRATION
The 1995 Plan provides for administration by the Stock Option Committee of the
Board, or another committee designated by the Board, consisting of two or more
disinterested directors (the "Plan Committee"). Members of the Plan Committee
may participate in the 1995 Plan, but only to the extent set forth below in the
sections titled "Non-Employee Director Options" and "Non-Employee Director Stock
Awards." Among the powers granted to the Plan Committee are the powers to
interpret the 1995 Plan, establish rules and regulations for its operation,
select employees of the Company and its subsidiaries to receive awards and
determine the timing, form, amount and other terms and conditions pertaining to
any award.
ELIGIBILITY FOR PARTICIPATION
Awards may be granted under the 1995 Plan only to employees of the Company or
a subsidiary who have executive, managerial, supervisory or professional
responsibilities. Officers shall be employees for this purpose, whether or not
they are also directors. Awards may also be granted to directors who are not
employees of the Company or its subsidiaries, but only to the extent set forth
below in the sections titled "Non-Employee Director Options" and "Non-Employee
Director Stock Awards." The approximate number of employees who are eligible to
participate in the 1995 Plan is 75.
TYPE OF AWARDS
The Plan provides for the granting of any or all of the following types of
awards: (i) stock options, including non-qualified stock options and stock
options intended to qualify as "incentive stock options" under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), (ii) performance
shares, (iii) restricted common stock, (iv) common stock, and (v) any other
incentive award of, or based on, the Company's common stock which is established
by the Plan Committee and which is consistent with the 1995 Plan's purpose. The
awards may be granted singly, in combination or in tandem as determined by the
Plan Committee.
AMENDMENT OF 1995 PLAN
The Company, through the Board, may suspend or terminate the 1995 Plan. In
addition, the Board may, from time to time, amend the 1995 Plan in any manner,
but may not, without shareholder approval, adopt any amendment which would
materially increase the aggregate number of shares of common stock which may be
issued under the 1995 Plan (except for certain antidilution provisions specified
in Article X of the 1995 Plan), materially increase the benefits accruing to
Insider Participants (as defined in the 1995 Plan) or materially modify the 1995
Plan's eligibility requirements. Notwithstanding the foregoing, certain
amendments to the provisions of the 1995 Plan governing non-employee director
awards may not be amended more than once every six months (even with shareholder
approval), other than to conform with changes in the Code, the Employee
Retirement Income Security Act of 1974, as amended, or the rules and regulations
thereunder.
OTHER COMPONENTS OF THE 1995 PLAN
The 1995 Plan authorizes the Plan Committee to grant awards during the period
beginning on the date the 1995 Plan is approved by the shareholders until
expiration of the 1995 Plan ten years after such date. An aggregate of 600,000
shares of common stock would be reserved for use in connection with awards under
the 1995 Plan. Any shares of common stock related to awards which terminate by
expiration, forfeiture, cancellation or otherwise without the issuance of shares
of common stock, are settled in cash in lieu of common stock, or are exchanged
in the Plan Committee's discretion for awards not involving shares of common
stock, will again be available for use in connection with awards under the 1995
Plan.
STOCK OPTIONS
Under the 1995 Plan, the Plan Committee may grant awards in the form of
options to purchase shares of the Company's common stock (an "Option"). The
Committee will, with regard to each Option, determine the number of shares
subject to the Option, the manner and time of the Option's exercise, and the
exercise price per share of stock subject to the Option. The exercise price of
an Option may, at the discretion of the Plan Committee, be paid by a participant
in cash, shares of the Company's common stock, a combination thereof, or such
other consideration as the Plan Committee may deem appropriate. The Plan
Committee may grant non-qualified options or incentive stock options which
satisfy the applicable requirements of Section 422 of the Code.
NON-EMPLOYEE DIRECTOR OPTIONS
The 1995 Plan automatically grants an option to purchase 2,000 shares of
common stock on each anniversary of the date of approval of the 1995 Plan by the
shareholders of the Company (the "Effective Date") to each person who is a non-
employee director on the Effective Date if he continues to serve in such
capacity on each such anniversary. An individual who becomes a non-employee
director subsequent to the Effective Date will be granted an option to purchase
2,000 shares of common stock on the date he or she becomes a non-employee
director and, thereafter, on each anniversary of the Effective Date occurring in
a calendar year subsequent to the year in which he or she becomes a non-employee
director if he or she continues to serve in such capacity on each such
anniversary. Each Director Option (as defined in the 1995 Plan) is exercisable
immediately with respect to the shares to which it relates. The exercise price
per share shall be equal to the fair market value as defined in the 1995 Plan,
which is the last sale price per share on the Nasdaq Stock Market of one share
of common stock on the date the Director Option is granted. The period within
which each option may be exercised shall expire three years from the date the
option is granted, unless it expires sooner due to the death of the optionee, or
is fully exercised prior to the end of such three year period. Payment of the
option price may be paid in full in cash or by check, bank draft or money order
payable to the order of the Company concurrently with the exercise of the
option. Director Options shall be forfeited if the directorship of an optionee
is terminated on account of any act of fraud, intentional misrepresentation,
embezzlement, misappropriation or conversion of assets or opportunities of the
Company or any of its subsidiaries.
PERFORMANCE SHARES
The 1995 Plan also allows for the granting of performance shares. Under the
1995 Plan, "Performance Share Award" means units which are expressed in terms of
common stock of the Company. Such awards will be contingent upon the attainment
over a period to be determined by the Plan Committee of certain performance
objectives. The performance objectives to be achieved during a performance
period and the measure of whether and to what degree such objectives have been
attained will also be determined by the Plan Committee.
RESTRICTED STOCK AWARDS
The 1995 Plan authorizes the Plan Committee to grant awards in the form of
restricted shares of the Company's common stock ("Restricted Stock Awards").
Such awards will be subject to such terms, conditions, restrictions and/or
limitations, if any, as the Plan Committee deems appropriate including, but not
limited to, restrictions on transferability and continued employment.
OTHER INCENTIVE AWARDS
Under the 1995 Plan, the Plan Committee also has the discretion to grant other
types of awards under which the Company's common stock is or may in the future
be acquired by a participant. Such awards may include grants of debt securities
convertible into or exchangeable for shares of the Company's common stock upon
the attainment of performance goals or such other conditions as the Plan
Committee shall determine.
NON-EMPLOYEE DIRECTOR STOCK AWARDS
An award of 75 shares of the Company's common stock shall be automatically
awarded (i) on the last day of the calendar quarter in which the Effective Date
occurs to each person who is a non-employee director on such date and (ii) on
the last day of each subsequent calendar quarter during which such individual
has continued to serve as a non-employee director ("Director Stock Awards"). An
individual who becomes a non-employee director subsequent to the Effective Date
shall be awarded 75 shares of common stock on the last day of each calendar
quarter during which such individual serves as a non-employee director.
OTHER TERMS OF AWARDS
Options will be exercisable for, and Restricted Stock Awards will be made in,
common stock of the Company. Performance Share Awards may be paid in cash,
common stock or a combination of cash and common stock, as the Plan Committee
shall determine. If an award is granted in the form of a Restricted Stock
Award, Option or Performance Share Award, the Plan Committee may include as part
of such award an entitlement to receive dividends or dividend equivalents.
The 1995 Plan provides for the forfeiture of awards under certain
circumstances as determined by the Plan Committee. The 1995 Plan authorizes the
Plan Committee to promulgate administrative guidelines for the purpose of
determining what treatment will be afforded to a participant under the 1995 Plan
in the event of his death, disability, retirement or termination for an approved
reason.
Upon granting of any award, the Plan Committee may, by way of an award notice
or otherwise, establish such other terms, conditions, restrictions and/or
limitations governing the granting of such award as are not inconsistent with
the 1995 Plan. In addition, the Plan Committee may modify the terms and
conditions of awards under certain circumstances.
CHANGE OF CONTROL EVENT
Upon the occurrence of a Change of Control Event (as defined in the 1995
Plan), a participant may be entitled to the following treatment: (i) all of the
participant's outstanding awards would become immediately vested, fully earned,
exercisable, and/or in the case of Options, converted into stock appreciation
rights, as appropriate, and (ii) the Company would make full payment to each
such participant with respect to any Performance Share Award, stock appreciation
right or other incentive award, deliver certificates to such participant with
respect to each Restricted Stock Award and permit the exercise of Options,
respectively, granted to such participant.
FEDERAL TAX TREATMENT
Under current federal tax law, the following are the federal tax consequences
generally arising with respect to awards under the 1995 Plan.
A participant who is granted an incentive stock option does not realize any
taxable income at the time of the grant or at the time of exercise. Similarly,
the Company is not entitled to any deduction at the time of grant or at the time
of exercise. If the participant makes no disposition of the shares acquired
pursuant to an incentive stock option before the later of two years from the
date of grant of such option and one year of the transfer of such shares to him,
any gain or loss realized on a subsequent disposition of the shares will be
treated as a long-term capital gain or loss. Under such circumstances, the
Company will not be entitled to any deduction for federal income tax purposes.
Conversely, if the participant disposes of shares of common stock acquired
pursuant to an incentive stock option before the later of two years after the
date of grant of such option and one year after the transfer of such shares to
him, any gain or loss realized will be treated as ordinary income and the
Company will be entitled to a deduction for federal income tax purposes.
A participant who is granted a non-qualified stock option does not have
taxable income at the time of grant, but does have taxable income at the time of
exercise equal to the difference between the exercise price of the shares
acquired pursuant to such option and the market value of the shares on the date
of exercise. The Company is entitled to a corresponding deduction for federal
income tax purposes in the same amount.
A participant who has been granted a Performance Share Award will not realize
taxable income at the time of the grant, and the Company will not be entitled to
a deduction at such time. A participant will realize ordinary income at the
time the award is paid and the Company will have a corresponding deduction.
A participant who has been granted a Restricted Stock Award generally will not
realize taxable income at the time of the grant, and the Company will not be
entitled to a deduction at the time of the grant, assuming that the restrictions
constitute a substantial risk of forfeiture for federal income tax purposes.
When such restrictions lapse, the participant will realize taxable income in an
amount equal to the excess of the fair market value of the shares at such time
over the amount, if any, paid for such shares. The Company will be entitled to
a corresponding deduction. Although a recipient of a Restricted Stock Award is
not normally taxed at the time of grant, such recipient may elect under
Section 83(b) of the Code to pay income tax at that time. In such a case, the
recipient will recognize taxable income in an amount equal to the excess of the
fair market value of the shares at the time of grant over the amount, if any,
paid for such shares. The Company will be entitled to a corresponding deduction
at such time.
The award of an outright grant of non-restricted common stock to a participant
will produce immediate tax consequences for both the participant and the
Company. The participant will be treated as having received taxable
compensation in an amount equal to the then fair market value of the common
stock distributed to him. The Company will receive a corresponding deduction
for the same amount.
OTHER INFORMATION
The last sale price of the Company's common stock reported by the Nasdaq Stock
Market on April 10, 1995 was $17 1/2 per share.
<TABLE>
NEW PLAN BENEFITS
<CAPTION>
1995 Omnibus Stock Incentive Plan
------------------------------------------
Name and Position Value(1) Number of Units
- - ---------------------------- -------- ---------------
<S> <C> <C>
Non-Executive Director Group -- 900 (2)
-- 6,000 (3)
<FN>
(1)The dollar value of Director Stock Awards and Director Options is not
determinable. The value of Director Stock Awards will be the fair market
value of such stock on the date of the award. See "Non-Employee Director
Stock Awards." The exercise price per share of Director Options will be the
fair market value of one share of common stock on the date of grant. See
"Non-Employee Director Options."
(2)Based on annual Director Stock Awards of 75 shares per quarter to each of
the three non-employee directors.
(3)Based on annual grants of Director Options to purchase 2,000 shares to each
of the three non-employee directors.
</TABLE>
The benefits and amounts that will be received by employees of the Company who
will be eligible to participant in the 1995 Plan, if the 1995 Plan is approved
by the shareholders, are not presently determinable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with affiliates of the Company have been and will be made on
terms no less favorable to the Company than could be obtained from unaffiliated
third parties. In addition, the Board has adopted a formal policy of not
entering into transactions with officers or affiliates of the Company unless the
Board makes a specific finding that not to enter into such transaction would be
contrary to the best interests of the Company and its public shareholders. Any
such transactions, including loans, with officers or affiliates and/or
shareholders of the Company require the approval of a majority of the
disinterested independent directors.
For financial consulting services provided to the Company in connection with
the Asset Sale and the Distribution and the related refinancing of the Company's
lines of credit and equipment leases and loans, HBOC, an investment banking firm
controlled by one of the Company's former outside directors, H. B. Oppenheimer,
received $712,392 in 1994 and $281,806 in 1995.
In connection with the Asset Sale, Howard C. Petersen, Executive Vice
President of Trucking Services of the Company from May 1993 to September 1994,
President of Carriers from December 1993 to December 2, 1994 and currently in
charge of certain dedicated trucking operations, received $750,000 as a
settlement of claims asserted by Mr. Petersen in connection with his employment
and termination of employment with Carriers. In addition, Mr. Petersen's wife
and son, who also held management positions with Carriers, received aggregate
severance payments of $204,000.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
For the Company's 1994 fiscal year, Arthur Andersen LLP audited the
consolidated financial statements of the Company, including reports to the SEC
and others. It is anticipated that representatives of Arthur Andersen LLP will
attend the Annual Meeting, will have the opportunity to make a statement and
will be available to respond to questions by shareholders.
Management and the Audit Committee of the Board of Directors will make their
recommendation with respect to the method of selection and/or retention of an
independent public accounting firm for the year 1995 at a meeting of the Board
of Directors subsequent to the Annual Meeting of Shareholders.
SHAREHOLDER PROPOSALS
In the event any shareholder intends to present a proposal at the Annual
Meeting of Shareholders to be held in 1996, such proposal must be received by
the Company, in writing, on or before December 23, 1995, to be considered for
inclusion in the Company's next voting Proxy and Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ James T. Graves
James T. Graves
Secretary
April 21, 1995
ANNEX A
MARK VII, INC.
1995 OMNIBUS STOCK INCENTIVE PLAN
TABLE OF CONTENTS
ARTICLE I - PURPOSE 1
1.1 Purpose 1
1.2 Establishment 1
ARTICLE II - DEFINITIONS 1
2.1 Award 1
2.2 Award Notice 2
2.3 Board 2
2.4 Change of Control Event 2
2.5 Code 3
2.6 Committee 3
2.7 Common Stock 3
2.8 Corporation 3
2.9 Date of Grant 3
2.10 Director Options 3
2.11 Director Stock Awards 3
2.12 Eligible Employee 3
2.13 Exchange Act 3
2.14 Fair Market Value 4
2.15 Incentive Stock Option 4
2.16 Option 4
2.17 Other Incentive Award 4
2.18 Participant 4
2.19 Performance Share Award 4
2.20 Plan 4
2.21 Restricted Stock Award 4
2.22 Subsidiary 4
ARTICLE III - ADMINISTRATION 5
3.1 Administration by Committee 5
3.2 Committee to Make Rules and Interpret Plan 6
3.3 Committee Members Ineligible 6
ARTICLE IV - GRANT OF AWARDS; SHARES SUBJECT TO THE PLAN 6
4.1 Committee to Grant Awards 6
4.2 Six-Month Holding Period 7
ARTICLE V - ELIGIBILITY 7
ARTICLE VI - STOCK OPTIONS 8
6.1 Grant of Options 8
6.2 Conditions of Options 8
6.3 Options to Non-Employee Directors 10
ARTICLE VII - PERFORMANCE SHARE AWARDS 12
7.1 Grant of Performance Shares 12
7.2 Conditions of Performance Share Awards 12
ARTICLE VIII - RESTRICTED STOCK AWARDS 13
8.1 Grant of Restricted Stock Awards 13
8.2 Conditions of Restricted Stock Awards 14
ARTICLE IX - OTHER INCENTIVE AWARDS 15
9.1 Grant of Other Incentive Awards 15
9.2 Conditions of Other Incentive Awards 15
9.3 Stock Awards to Non-Employee Directors 15
ARTICLE X - STOCK ADJUSTMENTS 16
ARTICLE XI - GENERAL 17
11.1 Amendment or Termination of Plan 17
11.2 Dividends and Dividend Equivalents 17
11.3 Termination of Employment 18
11.4 Nonassignability 18
11.5 Withholding Taxes 19
11.6 Forfeiture 19
11.7 Change of Control 19
11.8 Amendments to Awards 19
11.9 Regulatory Approval and Listings 20
11.10 Right to Continued Employment 20
11.11 Beneficiaries 20
11.12 Indemnification 21
11.13 Reliance on Reports 21
11.14 Relationship to Other Benefits 21
11.15 Compliance with the Exchange Act 21
11.16 Expenses 22
11.17 Construction 22
11.18 Governing Law 22
MARK VII, INC.
1995 OMNIBUS STOCK INCENTIVE PLAN
ARTICLE I
PURPOSE
1.1 Purpose. The Plan is designed to enable qualified executive,
managerial, supervisory and professional personnel of the Corporation to acquire
or increase their ownership of Common Stock on reasonable terms. The
opportunity so provided is intended to foster in participants a strong incentive
to put forth maximum effort for the continued success and growth of the
Corporation, to aid in retaining individuals who put forth such efforts, and to
assist in attracting the best available individuals in the future. So that the
appropriate incentive can be provided, the Plan provides for granting Stock
Options, Restricted Stock Awards, Performance Shares, and/or Other Incentive
Awards to key employees of the Corporation and its Subsidiaries on the terms and
subject to the conditions set forth in the Plan.
1.2 Establishment. The Plan is effective as of the date it is approved
by the shareholders of the Corporation (the "Effective Date"), and subject to
the provisions of Section 11.1, Awards (as defined in Section 2.1) may be
granted hereunder for a period of ten years after such date.
The Plan shall continue in effect until all matters relating to the payment
of awards and administration of the Plan have been settled.
ARTICLE II
DEFINITIONS
2.1 "Award" means, individually, collectively or in tandem, any Option,
Restricted Stock Award, Performance Share Award, or Other Incentive Award
granted under the Plan by the Committee pursuant to such terms, conditions,
restrictions, and/or limitations, if any, as the Committee may establish by the
Award Notice or otherwise.
2.2 "Award Notice" means any written instrument that establishes the
terms, conditions, restrictions, and/or limitations applicable to an Award in
addition to those established by this Plan and by the Committee's exercise of
its administrative powers.
2.3 "Board" means the Board of Directors of the Corporation.
2.4 "Change of Control Event" means each of the following:
(a) any person or entity is or becomes the beneficial owner (as
defined in the Exchange Act), directly or indirectly, of securities of the
Corporation (excluding securities acquired directly from the Corporation or its
affiliates) representing 25% or more of the combined voting power of the
Corporation's then outstanding securities (other than any beneficial owner of
such percentage or more of such voting power existing as of the Effective Date);
or
(b) during any period of two consecutive years (not including any
period prior to the Effective Date of the Plan), individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person or entity who has entered into an agreement
with the Corporation to effect a transaction described in clause (a), (c) or (d)
of this paragraph) whose election by the Board or nomination for election by the
Corporation's shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously approved,
cease for any reason to constitute a majority thereof; or
(c) the shareholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation,
at least 75% of the combined voting power of the voting securities of the
Corporation or such surviving entity outstanding immediately after such merger
or consolidation, or (ii) a merger or consolidation effected to implement a
recapitalization of the Corporation (or similar transaction) in which no person
or entity acquires more than 50% of the combined voting power of the
Corporation's then outstanding securities; or
(d) the shareholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or disposition by
the Corporation of all or substantially all the Corporation's assets.
2.5 "Code" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations under
such section.
2.6 "Committee" means the Stock Option Committee of the Board, or such
other committee designated by the Board, authorized to administer the Plan under
Article III hereof. The Committee shall consist of not less than two members,
each of whom is, and within the 12 months preceding his or her appointment to
the Committee has been, a "disinterested person" within the meaning of Rule 16b-
3 promulgated under Section 16 of the Exchange Act.
2.7 "Common Stock" means the common stock, par value $.10 per share, of
the Corporation, and after substitution, such other stock as shall be
substituted therefor as provided in Article X.
2.8 "Corporation" means Mark VII, Inc.
2.9 "Date of Grant" means the date on which the granting of an Award is
authorized by the Committee or such later date as may be specified by the
Committee in such authorization.
2.10 "Director Options" means non-qualified Options awarded under Section
6.3 of the Plan.
2.11 "Director Stock Awards" means an Award granted under Section 9.3 of
the Plan.
2.12 "Eligible Employee" means any employee of the Corporation or a
Subsidiary who satisfies all of the requirements of Article V.
2.13 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.14 "Fair Market Value" means (A) during any such time as the Common
Stock is not listed upon an established stock exchange or the NASDAQ/National
Market System, the mean between dealer "bid" and "ask" prices of the Common
Stock in the over-the-counter market on the day for which such value is to be
determined, as reported by the National Association of Securities Dealers, Inc.,
or (B) during such time as the Common Stock is listed upon an established stock
exchange or exchanges or the NASDAQ/National Market System, the highest closing
price of the Common Stock on such stock exchange or exchanges or the last sale
price on the NASDAQ/National Market System on the day for which such value is to
be determined, or if no sale of the Common Stock shall have been made on any
stock exchange or the NASDAQ/National Market System that day, on the next
preceding day on which there was a sale of such Common Stock.
2.15 "Incentive Stock Option" means an Option within the meaning of
Section 422 of the Code.
2.16 "Option" means an Award granted under Article VI of the Plan and
includes both non-qualified Options and Incentive Stock Options to purchase
Stock.
2.17 "Other Incentive Award" means an Award granted under Article IX of
the Plan.
2.18 "Participant" means an Eligible Employee of the Corporation or a
Subsidiary to whom an Award has been granted by the Committee under this Plan.
2.19 "Performance Share Award" means an Award granted under Article VII of
the Plan.
2.20 "Plan" means the Mark VII, Inc. 1995 Omnibus Stock Incentive Plan.
2.21 "Restricted Stock Award" means an Award granted under Article VIII of
the Plan.
2.22 "Subsidiary" means any corporation of which a majority of the
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Corporation.
ARTICLE III
ADMINISTRATION
3.1 Administration by Committee. The Committee shall administer the
Plan. Unless otherwise provided in the bylaws of the Corporation or the
resolutions adopted from time to time by the Board establishing the Committee,
the Board may from time to time remove members from, or add members to, the
Committee; vacancies on the Committee, howsoever caused, shall be filled by the
Board. The Committee shall designate one of its members as Chairman. It shall
hold its meetings at such times and places as it may determine. A majority of
its members shall constitute a quorum, and all determinations of the Committee
shall be made by a majority of its members at the time in office. Any
determination reduced to writing and signed by all members shall be fully as
effective as if it had been made by a majority vote at a meeting duly called and
held. The Committee may appoint a Secretary, who need not be a member of the
Committee, and may establish and amend such rules and regulations for the
conduct of its business as it shall deem advisable.
Subject to the provisions of the Plan, the Committee shall have exclusive
power to:
(a) Select the Eligible Employees to participate in the Plan.
(b) Determine the time or times when Awards will be made.
(c) Determine the form of an Award, whether a Stock Option, a
Restricted Stock Award, a Performance Share Award, or Other Incentive Award
established by the Committee in accordance with Article IX below, the number of
shares of Common Stock subject to the Award or with reference to which the Award
is determined, all the terms, conditions (including performance requirements),
restrictions and/or limitations, if any, of an Award, including the time and
conditions of exercise or vesting, and the terms of any Award Notice, which may
include the waiver or amendment of prior terms and conditions or acceleration or
early vesting or payment of an Award under certain circumstances determined by
the Committee.
(d) Determine whether Awards will be granted singly, in combination
or in tandem.
(e) Grant waivers of Plan terms, conditions, restrictions and
limitations.
(f) Accelerate the vesting, exercise, or payment of an Award or the
performance period of an Award when such action or actions would be in the best
interest of the Corporation.
(g) Take any and all other action it deems necessary or advisable for
the proper operation or administration of the Plan.
The Committee shall also have the authority to grant Awards in replacement
of Awards previously granted under this Plan or any other executive compensation
plan of the Corporation or a Subsidiary.
3.2 Committee to Make Rules and Interpret Plan. The Committee shall have
the authority, subject to the provisions of the Plan, to establish, adopt, or
revise such rules and regulations and to make all such determinations relating
to the Plan as it may deem necessary or advisable for the administration of the
Plan. The Committee's interpretation of the Plan or any Awards granted pursuant
thereto and all decisions and determinations by the Committee with respect to
the Plan shall be final, binding, and conclusive on all parties unless otherwise
determined by the Board.
3.3 Committee Members Ineligible. No Committee member shall be eligible
to participate in the Plan except to the extent set forth in Sections 6.3 and
9.3.
ARTICLE IV
GRANT OF AWARDS; SHARES
SUBJECT TO THE PLAN
4.1 Committee to Grant Awards. The Committee may, from time to time,
grant Awards to one or more Eligible Employees, provided, however, that:
(a) Subject to Article X, an aggregate of 600,000 shares of Common
Stock are hereby reserved for use in connection with Awards under the Plan.
(b) Any shares of Common Stock related to Awards which terminate by
expiration, forfeiture, cancellation, or otherwise without the issuance of
shares of Common Stock, are settled in cash in lieu of Common Stock, or are
exchanged in the Committee's discretion for Awards not involving Common Stock,
shall be available again for grant under the Plan, so long as the holder of any
such Award received no benefits of Common Stock ownership (including but not
limited to dividends) from the shares of Common Stock related to such Award.
(c) Any shares of Common Stock issued by the Corporation through the
assumption or substitution of outstanding grants from an acquired company shall
reduce the shares available for grants under the Plan.
(d) Common Stock delivered by the Corporation in payment of any Award
under the Plan may be authorized and unissued Common Stock or Common Stock held
in the treasury of the Corporation or may be purchased on the open market or by
private purchase.
(e) The Committee shall, in its sole discretion, determine the manner
in which fractional shares arising under this Plan shall be treated.
4.2 Six-Month Holding Period. With respect to Awards granted hereunder
to any person who is, or within the preceding six months was, subject to the
provisions of Section 16 of the Exchange Act (an "Insider Participant"), each
such Award which is an equity security must be held and not transferred by such
Insider Participant for a period of six months from the Date of Grant. Nothing
in this Section 4.2 shall be deemed to prohibit the exercise of Options within
the six month period following the Date of Grant, but the shares of Common Stock
received by an Insider Participant pursuant to the exercise of an Option must be
held and not transferred for a period of six months from the Date of Grant of
the Option so exercised.
ARTICLE V
ELIGIBILITY
Awards may be granted under the Plan only to employees of the Corporation
or a Subsidiary who have executive, managerial, supervisory or professional
responsibilities. Officers shall be employees for this purpose, whether or not
they are also directors. Awards may also be granted to directors who are not
employees of the Corporation or its Subsidiaries ("Non-Employee Directors"), but
only to the extent set forth in Sections 6.3 and 9.3 hereof. Awards may be
granted to Eligible Employees whether or not they have received prior Awards
under the Plan or under any previously adopted plan, and whether or not they are
participants in other benefit plans of the Corporation.
Subject to the provisions of the Plan, the Committee shall, from time to
time, select from the Eligible Employees those to whom Awards shall be granted
and shall determine the type or types of Awards to be made and shall establish
in the related Award Notices the terms, conditions, restrictions and/or
limitations, if any, applicable to the Awards in addition to those set forth in
the Plan and the administrative rules and regulations issued by the Committee.
ARTICLE VI
STOCK OPTIONS
6.1 Grant of Options. The Committee may, from time to time, subject to
the provisions of the Plan and such other terms and conditions as it may
determine, grant Options to Eligible Employees. These Options may be Incentive
Stock Options or non-qualified Options, or a combination of both. Each grant of
an Option shall be evidenced by an Award Notice executed by the Corporation and
the Participant, and shall contain such terms and conditions and be in such form
as the Committee may from time to time approve, subject to the requirements of
Section 6.2.
6.2 Conditions of Options. Each Option so granted shall be subject to
the following conditions:
(a) Exercise price. As limited by Section 6.2(e) below, each Option
shall state the exercise price which shall be set by the Committee at the Date
of Grant, which price shall not, in the case of non-qualified Options, be less
than 85% of the Fair Market Value of the Common Stock on the Date of Grant.
(b) Form of payment. The exercise price of an Option may be paid:
(i) in cash or by check, bank draft or money order payable to the order of the
Corporation; (ii) in shares of Common Stock; (iii) a combination of the
foregoing; or (iv) such other consideration as the Committee may deem
appropriate. In addition to the foregoing, subject to the discretion of the
Committee, any Option granted under the Plan may be exercised by a broker-dealer
acting on behalf of a Participant if (A) the broker-dealer has received from the
Participant or the Corporation a fully- and duly-endorsed agreement evidencing
such Option and instructions signed by the Participant requesting the
Corporation to deliver the shares of Common Stock subject to such Option to the
broker-dealer on behalf of the Participant and specifying the account into which
such shares should be deposited, (B) adequate provision has been made with
respect to the payment of any withholding taxes due upon such exercise, and (C)
the broker-dealer and the Participant have otherwise complied with Section
220.3(e)(4) of Regulation T, 12 CFR, Part 220 and any successor rules and
regulations applicable to such exercise ("Cashless Exercise"); provided,
however, that an Insider Participant may not elect to utilize a Cashless
Exercise within six months of the date the Option is granted (unless death or
disability occurs prior to the expiration of such six-month period), and any
such election must be made during any period beginning on the third business day
following the date of release of a summary statement of the Corporation's
quarterly or annual sales and earnings and ending on the twelfth business day
following such date (the "Window Period"). The Committee shall establish
appropriate methods for accepting Common Stock, and may impose such conditions
as it deems appropriate on the use of such Common Stock in payment of the
exercise price. Common Stock used to exercise an Option shall be valued at its
then Fair Market Value.
(c) Exercise of Options. Options granted under the Plan shall be
exercisable, in whole or in installments, and at such times, and shall expire at
such time, as shall be provided by the Committee in the Award Notice. Exercise
of an Option shall be by written notice stating the election to exercise in the
form and manner determined by the Committee. Every share of Common Stock
acquired through the exercise of an Option shall be deemed to be fully paid at
the time of exercise and payment of the exercise price.
(d) Other terms and conditions. Among other conditions that may be
imposed by the Committee, if deemed appropriate, are those relating to: (i) the
period or periods and the conditions of exercisability of any Option; (ii) the
minimum periods during which Participants must be employed by the Corporation or
its Subsidiaries, or must hold Options before they may be exercised; (iii) the
minimum periods during which shares acquired upon exercise must be held before
sale or transfer shall be permitted; (iv) conditions under which such Options or
shares may be subject to forfeiture; and (v) the frequency of exercise or the
minimum or maximum number of shares that may be acquired at any one time.
(e) Special restrictions relating to Incentive Stock Options.
Options issued in the form of Incentive Stock Options shall, in addition to
being subject to all applicable terms, conditions, restrictions and/or
limitations established by the Committee, comply with the requirements of
Section 422 of the Code (or any successor section thereto), including, without
limitation, the requirement that the exercise price of an Incentive Stock Option
not be less than 100% of the Fair Market Value of the Common Stock on the Date
of Grant, the requirement that each Incentive Stock Option, unless sooner
exercised, terminated, or cancelled, expire no later than ten years from its
Date of Grant, and the requirement that the aggregate Fair Market Value
(determined on the Date of Grant) of the Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by a Participant
during any calendar year (under this Plan or any other Plan of the Corporation
or any Subsidiary) not exceed $100,000.
(f) Application of funds. The proceeds received by the Corporation
from the sale of Common Stock pursuant to Options will be used for general
corporate purposes.
6.3 Options to Non-Employee Directors. Notwithstanding any other
provision herein, no Options shall be granted hereunder to Non-Employee
Directors other than the Director Options granted pursuant to this Section 6.3.
An option to purchase 2,000 shares of Common Stock shall be automatically
granted on each anniversary of the Effective Date to each person who is a Non-
Employee Director on the Effective Date if he or she continues to serve in such
capacity on each such anniversary. An individual who becomes a Non-Employee
Director subsequent to the Effective Date shall be granted an option to purchase
2,000 shares of Common Stock (i) on the date he or she becomes a Non-Employee
Director, and (ii) on each anniversary of the Effective Date occurring in a
calendar year subsequent to the year in which he or she becomes a Non-Employee
Director if he or she continues to serve in such capacity on each such
anniversary.
Each Director Option shall be evidenced by an Award Notice executed by the
Corporation and the Non-Employee Director, and shall include the following terms
and provisions:
(a) Each Director Option to purchase shares of Common Stock shall be
exercisable immediately (subject to Section 4.2) when the Director Option is
granted. The Option exercise price per share shall be equal to the Fair Market
Value of one share of Common Stock on the date the Director Option is granted.
The period within which each Option may be exercised shall expire three years
from the date the option is granted (the "Option Period"), unless it expires
sooner due to the death or termination of the directorship of the optionee, or
if fully exercised prior to the end of such three year period. No Director
Options shall be granted hereunder after the ten-year anniversary of the
Effective Date.
(b) If the directorship of an optionee is terminated within the
Option Period for any reason other than (i) the death of the optionee or (ii) on
account of any act of fraud, intentional misrepresentation, embezzlement,
misappropriation, or conversion of assets or opportunities of the Corporation or
any of its Subsidiaries, the Director Option may be exercised, to the extent the
optionee was able to do so at the date of termination of the directorship,
within the Option Period.
(c) If an optionee dies during the Option Period while a director of
the Corporation, or if an optionee dies within three months of serving as a Non-
Employee Director, the Director Option may be exercised, to the extent the
optionee was entitled to exercise such Option at the date of his or her death,
within one year after such death (if otherwise within the Option Period), by the
executor or the administrator of the estate of the optionee, or by the person or
persons who shall have acquired the Director Option directly from the optionee
by a bequest or an inheritance.
(d) If the directorship of the optionee is terminated within the
Option Period for any of the reasons enumerated in Section 6.3(b)(ii), such
Director Options shall automatically terminate as of the date of termination of
such directorship.
(e) Payment of the option price shall be made in full in cash or by
check, bank draft or money order payable to the order of the Corporation
concurrently with the exercise of the option.
(f) Such Director Option shall be nontransferable by the optionee
other than by will or the laws of descent and distribution, and shall be
exercisable during the optionee's lifetime only by the optionee or the
optionee's guardian or legal representative.
ARTICLE VII
PERFORMANCE SHARE AWARDS
7.1 Grant of Performance Shares. Grants of Performance Share Awards may
be made by the Committee to any Eligible Employee during the term of the Plan.
Each Performance Share Award shall represent one share of Common Stock. Each
Performance Share Award shall be evidenced by an Award Notice. There may be
more than one award in existence at any one time for any Participant and
performance periods for separate Performance Share Awards may differ.
The Performance Shares will be paid out in full or in part on the basis of
performance of the Corporation following the beginning of the Corporation's
fiscal year in which the Performance Share Award is made as hereinafter set
forth. In determining the size of Performance Share Awards, the Committee shall
take into account a Participant's responsibility level, performance, potential,
and cash compensation level, as well as such other considerations as it deems
appropriate. If any Performance Share Award shall be forfeited, cancelled, or
not paid out in full, such Performance Share Award may again be awarded under
the Plan in accordance with Article VII.
7.2 Conditions of Performance Share Awards. A Performance Share Award
shall be subject to the following terms and conditions:
(a) Performance Share Account. Performance Share Awards shall be
credited to a Performance Share account to be maintained for each holder. Each
Performance Share Award shall be deemed to be the equivalent of one share of
Common Stock of the Corporation. A Performance Share Award under the Plan shall
not entitle the holder to any interest in the Common Stock or to any dividend,
voting or other rights of a shareholder. The value of the Performance Shares in
a holder's Performance Share account at the time of Award or the time of payment
shall be the Fair Market Value at any such time of an equivalent number of
shares of the Common Stock.
(b) Performance Period and Criteria. Performance Shares shall be
contingent upon the attainment during a performance period of certain
performance objectives. The length of the performance period for each
Performance Share Award, the performance objectives to be achieved during the
Performance Share Award period and the measure of whether and to what degree
such objectives have been attained shall be conclusively determined by the
Committee in the exercise of its discretion. The Committee may revise
performance objectives at such times as it deems appropriate during the
Performance Share Award period in order to take into account or into
consideration any unforeseen events or changes in circumstances; provided,
however, that any such revision which is adverse to the holder of a Performance
Share Award shall require the holder's consent.
(c) Payment of Award. Following the end of the Performance Share
Award period, the holder of a Performance Share Award shall be entitled to
receive payment of an amount based on the achievement of the performance
measures for such Performance Share Award period. In the event that a recipient
of a Performance Share Award is an Insider Participant, no Performance Share
Award shall be payable within the first six months from the Date of Grant of
such Performance Share Award. The payment to which a holder of a Performance
Share Award shall be entitled at the end of a Performance Share Award period
shall be a dollar amount equal to the Fair Market Value of the number of shares
of Common Stock equal to the number of Performance Shares earned and payable to
such holder.
The Committee may authorize payment of a Performance Share Award in
any combination of cash and Common Stock or all in cash or all in Common Stock,
as it deems appropriate, provided, however, that in the event a payee is an
Insider Participant, no cash payment may be made to such person except during
any period beginning on the third business day following the date of release of
a summary statement of the Corporation's quarterly or annual sales and earnings
and ending on the twelfth business day following such date. Such shares may
include any restrictions on transfer and forfeiture provisions as the Committee,
from time to time, deems appropriate.
(d) Additional terms and conditions. The Committee may, by way of
the Award Notice or otherwise, determine such other terms, conditions,
restrictions and/or limitations, if any, of any Performance Share Award,
provided they are not inconsistent with the Plan.
ARTICLE VIII
RESTRICTED STOCK AWARDS
8.1 Grant of Restricted Stock Awards. The Committee may grant a
Restricted Stock Award to any Eligible Employee. Restricted Stock Awards shall
be awarded in such number and at such times during the term of the Plan as the
Committee shall determine. Each Restricted Stock Award may be evidenced in such
manner as the Committee deems appropriate, including, without limitation, book-
entry registration or issuance of a stock certificate or certificates, and by an
Award Notice setting forth the terms of such Restricted Stock Award.
8.2 Conditions of Restricted Stock Awards. The grant of a Restricted
Stock Award shall be subject to the following:
(a) Restriction period. Vesting of each Restricted Stock Award shall
require the holder to remain in the employment of the Corporation or a
Subsidiary for a prescribed period (a "Restriction Period"). The Committee
shall determine the Restriction Period or Periods which shall apply to the
shares of Common Stock covered by each Restricted Stock Award or portion
thereof. At the end of the Restriction Period the restrictions imposed
hereunder shall lapse with respect to the shares of Common Stock covered by the
Restricted Stock Award.
(b) Restrictions. The holder of a Restricted Stock Award may not
sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the shares
of Common Stock during the applicable Restriction Period. The Committee shall
impose such other restrictions on any shares of Common Stock covered by a
Restricted Stock Award as it may deem advisable including, without limitation,
restrictions under applicable Federal or state securities laws, and may legend
the certificates representing Restricted Stock to give appropriate notice of
such restrictions.
(c) Rights as shareholders. During any Restriction Period, the
Committee may, in its discretion, grant to the holder of a Restricted Stock
Award all or any of the rights of a shareholder with respect to said shares,
including, but not by way of limitation, the right to vote such shares and to
receive dividends. If any dividends or other distributions are paid in shares
of Common Stock, all such shares shall be subject to the same restrictions on
transferability as the shares of Restricted Stock with respect to which they
were paid.
ARTICLE IX
OTHER INCENTIVE AWARDS
9.1 Grant of Other Incentive Awards. The Committee may, in its
discretion, grant other types of awards of, or based on, Common Stock. Other
Incentive Awards are limited to awards under which Common Stock is or may in the
future be acquired. Such awards may include grants of debt securities
convertible into or exchangeable for shares of Common Stock upon such
conditions, including attainment of performance goals, as the Committee shall
determine.
9.2 Conditions of Other Incentive Awards. Each grant of an Other
Incentive Award shall be evidenced by an Award Notice executed by the
Corporation and the Participant, and shall contain such terms and conditions and
be in such form as the Committee may from time to time approve. Other Incentive
Awards may not be sold, assigned, transferred, pledged, or encumbered except as
may be provided in the Award Notice, and in no event may be transferred other
than by will or the laws of descent and distribution or be exercised, during the
life of the Participant, other than by the Participant or the Participant's
guardian or legal representative. The recipient of an Other Incentive Award
will have the rights of a shareholder only to the extent, if any, specified in
the Award Notice governing such Other Incentive Award.
9.3 Stock Awards to Non-Employee Directors. An award of 75 shares of
Common Stock shall be automatically awarded (i) on the last day of the calendar
quarter in which the Effective Date occurs to each person who is a Non-Employee
Director on such date, and (ii) on the last day of each subsequent calendar
quarter during which such individual has continued to serve as a Non-Employee
Director. An individual who becomes a Non-Employee Director subsequent to the
Effective Date shall be automatically awarded 75 shares of Common Stock on the
last day of each calendar quarter during which such individual serves as a Non-
Employee Director.
Each Director Stock Award shall be evidenced by an Award Notice executed by
the Corporation and the Non-Employee Director, and no Director Stock Award shall
be granted hereunder after the ten-year anniversary of the Effective Date.
ARTICLE X
STOCK ADJUSTMENTS
In the event that the shares of Common Stock, as presently constituted,
shall be changed into or exchanged for a different number or kind of shares of
stock or other securities of the Corporation or of another corporation (whether
by reason of merger, consolidation, recapitalization, reclassification, stock
split, combination of shares or otherwise), or if the number of such shares of
Common Stock shall be increased through the payment of a stock dividend, or a
dividend on the shares of Common Stock or rights or warrants to purchase
securities of the Corporation shall be made, then there shall be substituted for
or added to each share available under and subject to the Plan as provided in
Article IV hereof, and each share theretofore appropriated or thereafter subject
or which may become subject to Performance Share Awards, Options, Restricted
Stock Awards or Other Incentive Awards under the Plan, the number and kind of
shares of stock or other securities into which each outstanding share of Common
Stock shall be so changed or for which each such share shall be exchanged or to
which each such share shall be entitled, as the case may be. In the event there
shall be any other change in the number or kind of the outstanding shares of
Common Stock, or any stock or other securities into which the Common Stock shall
have been changed or for which it shall have been exchanged, then if the
Committee shall, in its sole discretion, determine that such change equitably
requires an adjustment in the shares available under and subject to the Plan, or
in any Award theretofore granted or which may be granted under the Plan, such
adjustments shall be made in accordance with such determination, except that no
adjustment of the number of shares of Common Stock available under the Plan or
to which any Award relates that would otherwise be required shall be made unless
and until such adjustment either by itself or with other adjustments not
previously made would require an increase or decrease of at least 1% in the
number of shares of Common Stock available under the Plan or to which any Award
relates immediately prior to the making of such adjustment (the "Minimum
Adjustment"). Any adjustment representing a change of less than such minimum
amount shall be carried forward and made as soon as such adjustment together
with other adjustments required by this Article X and not previously made would
result in a Minimum Adjustment. Notwithstanding the foregoing, any adjustment
required by this Article X which otherwise would not result in a Minimum
Adjustment shall be made with respect to shares of Common Stock relating to any
Award immediately prior to exercise, payment or settlement of such Award.
No fractional shares of Common Stock or units of other securities shall be
issued pursuant to any such adjustment, and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding downward to the
nearest whole share.
ARTICLE XI
GENERAL
11.1 Amendment or Termination of Plan. The Board may suspend or terminate
the Plan at any time. In addition, the Board may, from time to time, amend the
Plan in any manner, but may not without shareholder approval adopt any amendment
which would:
(a) increase the aggregate number of shares of Common Stock available
under the Plan (except by operation of Article X);
(b) materially increase the benefits accruing to Insider Participants
under the Plan; or
(c) materially modify the requirements as to eligibility for
participation in the Plan;
provided, that any amendment to the Plan shall require approval of the
shareholders if, in the opinion of counsel to the Corporation, such approval is
required by Section 16(b) or any other section of the Exchange Act, or any other
Federal or state law or any regulations or rules promulgated thereunder.
Notwithstanding the above, the number of Director Options and Director Stock
Awards to be awarded to Non-Employee Directors pursuant to Sections 6.3 and 9.3,
respectively, the number of shares of Common Stock to be covered by each
Director Option and Director Stock Award, the exercise price per share under
each Director Option, when and under what circumstances each Director Option and
Director Stock Award will be granted and the period within which each Director
Option may be exercised, shall not be amended more than once every six months
(even with shareholder approval), other than to conform with changes in the
Code, the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or the rules and regulations thereunder.
11.2 Dividends and Dividend Equivalents. If an Award is granted in the
form of a Performance Share Award, Restricted Stock Award or an Option, the
Committee may choose, at the time of the grant of such Award or any time
thereafter up to the time of payment of such Award, to include as part of such
Award an entitlement to receive dividends or dividend equivalents subject to
such terms, conditions, restrictions, and/or limitations, if any, as the
Committee may establish. Dividends and dividend equivalents granted hereunder
shall be paid in such form and manner (i.e., lump sum or installments), and at
such time as the Committee shall determine. All dividends or dividend
equivalents which are not paid currently may, at the Committee's discretion,
accrue interest, be reinvested into additional shares of Common Stock or, in the
case of dividends or dividend equivalents credited in connection with a
Performance Share Award, be credited as additional Performance Shares and paid
to the Participant if and when, and to the extent that, payment is made pursuant
to such Performance Share Award.
11.3 Termination of Employment. If a Participant's employment with the
Corporation or a Subsidiary terminates for a reason other than death,
disability, retirement or any approved reason, all unexercised, unearned and/or
unpaid Awards, including, but not by way of limitation, Awards earned but not
yet paid, all unpaid dividends and dividend equivalents, and all interest
accrued on the foregoing, shall be cancelled or forfeited, as the case may be,
unless the Participant's Award Notice provides otherwise. The Committee shall
have the authority to promulgate rules and regulations to (i) determine what
events constitute disability, retirement, or termination for an approved reason
for purposes of the Plan, and (ii) determine the treatment of a Participant
under the Plan in the event of his or her death, disability, retirement, or
termination for an approved reason. Such rules and regulations may include,
without limitation, the method, if any, for prorating a Performance Share Award,
accelerating the vesting of any Options or Restricted Stock Award, or providing
for the exercise of any unexercised Options in the event of a Participant's
death, disability, retirement or termination for an approved reason.
11.4 Nonassignability. No Options, Performance Share Awards or other
derivative securities (as defined in the rules and regulations promulgated under
Section 16 of the Exchange Act) awarded under the Plan to any person who is an
Insider Participant, shall be subject in any manner to alienation, anticipation,
sale, transfer, assignment, pledge, or encumbrance, except for transfer by will
or the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I of ERISA, or the rules and
regulations thereunder. Any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of, or to subject to execution, attachment or similar process,
any Option, Performance Share Award or other derivative security, contrary to
the provisions hereof, shall be void and ineffective and shall give no right to
any purported transferee.
11.5 Withholding Taxes. The Corporation shall be entitled to deduct from
any payment under the Plan, regardless of the form of such payment, the amount
of all applicable income and employment taxes required by law to be withheld
with respect to such payment or may require the Participant to pay to it such
tax prior to and as a condition of the making of such payment. In accordance
with any applicable administrative guidelines it establishes, the Committee may
allow a Participant to pay the amount of taxes required by law to be withheld
from an Award by withholding from any payment of Common Stock due as a result of
such Award, or by permitting the Participant to deliver to the Corporation,
shares of Common Stock, having a Fair Market Value, on the date of payment,
equal to the amount of such required withholding taxes; provided, however, that
in the event the Participant is an Insider Participant, such an election may not
be made within six months of the date the Award is granted (unless death or
disability of the Participant occurs prior to the expiration of such six-month
period), and must be made either six months prior to the date of payment or
during the window period.
11.6 Forfeiture. If the employment of a Participant is terminated on
account of any act of fraud, intentional misrepresentation, embezzlement,
misappropriation or conversion of assets or opportunities of the Corporation or
any of its Subsidiaries, any Award granted hereunder, whether and regardless of
the extent to which such Award is vested, earned or exercisable, shall
automatically terminate as of the date of termination of such employment.
11.7 Change of Control. Awards granted under the Plan to any Participant
may, in the discretion of the Committee, provide that (a) such Awards shall be
immediately vested, fully earned, exercisable, and/or, in the case of Options,
converted into stock appreciation rights, as appropriate, upon a Change of
Control Event, and (b) the Corporation shall make full payment to each such
Participant with respect to any Performance Share Award, stock appreciation
right or Other Incentive Award, deliver certificates to such Participant with
respect to each Restricted Stock Award, and permit the exercise of Options,
respectively, granted hereunder to such Participant.
11.8 Amendments to Awards. The Committee may at any time unilaterally
amend the terms of any Award Notice for any Award, whether or not presently
exercisable, earned, paid or vested, to the extent it deems appropriate;
provided, however, that any such amendment which is adverse to the Participant
shall require the Participant's consent.
11.9 Regulatory Approval and Listings. The Corporation shall use its best
efforts to file with the Securities and Exchange Commission as soon as
practicable following the Effective Date, and keep continuously effective and
usable, a Registration Statement on Form S-8 with respect to shares of Common
Stock subject to Awards hereunder. Notwithstanding anything contained in this
Plan to the contrary, the Corporation shall have no obligation to issue or
deliver certificates representing shares of Common Stock evidencing Restricted
Stock Awards or any other Awards relating to shares of Common Stock prior to:
(a) the obtaining of any approval from, or satisfaction of any
waiting period or other condition imposed by, any governmental agency which the
Committee shall, in its sole discretion, determine to be necessary or advisable;
(b) the admission of such shares to listing on the stock exchange on
which the Common Stock may be listed or the NASDAQ/National Market System, if
listed thereon; and
(c) the completion of any registration or other qualification of said
shares under any state or Federal law or ruling of any governmental body which
the Committee shall, in its sole discretion, determine to be necessary or
advisable.
11.10 Right to Continued Employment. Participation in the Plan shall not
give any Eligible Employee any right to remain in the employ of the Corporation
or any Subsidiary. The Corporation or, in the case of employment with a
Subsidiary, the Subsidiary, reserves the right to terminate any Eligible
Employee at any time. Further, the adoption of this plan shall not be deemed to
give any Eligible Employee or any other individual any right to be selected as a
Participant or to be granted an Award.
11.11 Beneficiaries. Each Participant shall file with the Committee a
written designation of one or more persons as the beneficiary (the
"Beneficiary") who shall be entitled to receive the amount, if any, payable
under the Plan upon his death. A Participant may, from time to time, revoke or
change his Beneficiary designation without the consent of any prior Beneficiary
by filing a new designation with the Committee. The last such designation
received by the Committee shall be controlling; provided, however, that no
designation, or change or revocation thereof, shall be effective unless received
by the Committee prior to the Participant's death, and in no event shall be
effective as of a date prior to such receipt.
If such Beneficiary designation is not in effect at the time of a
Participant's death, or if no designated Beneficiary survives the Participant,
or such designation conflicts with law, the payment of the amount, if any,
payable under the Plan upon his death shall be made to the Participant's estate.
If the Committee is in doubt as to the right of any person to receive such
amount, the Committee may retain such amount, without liability or any interest
thereon, until the rights thereon are determined, or the Committee may pay such
amount into any court of appropriate jurisdiction and such payment shall be a
complete discharge of the liability of the Plan, the Corporation and the
Committee therefor.
11.12 Indemnification. Each person who is or shall have been a member of
the Committee or of the Board shall be indemnified and held harmless by the
Corporation against and from any loss, cost, liability or expense that may be
imposed upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure
to act under the Plan and against and from any and all amounts paid by such
person in satisfaction of judgment in any such action, suit, or proceeding
against such person. He or she shall give the Corporation an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Corporation's Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Corporation may have to indemnify or hold harmless any such person.
11.13 Reliance on Reports. Each member of the Committee and each member of
the Board shall be fully justified in relying or acting in good faith upon any
report made by the independent public accountants of the Corporation and its
Subsidiaries and upon any other information furnished in connection with the
Plan by any person or persons other than himself. In no event shall any person
who is or shall have been a member of the Committee or of the Board be liable
for any determination made or other action taken or any omission to act in
reliance upon any such report or information or for any action taken, including
the furnishing of information, or failure to act, if in good faith.
11.14 Relationship to Other Benefits. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Corporation or any
Subsidiary.
11.15 Compliance with the Exchange Act. With respect to persons subject to
Section 16 of the Exchange Act, transactions under this Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision of the Plan or action by the
Committee fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee. Moreover, in the event
the Plan does not include a provision required by Rule 16b-3 to be stated
therein, such provision (other than one relating to eligibility requirements, or
the price and amount of awards) shall be deemed automatically to be incorporated
by reference into the Plan insofar as Participants subject to Section 16 are
concerned.
11.16 Expenses. The expenses of administering the Plan shall be borne by
the Corporation subject to such allocation to its Subsidiaries as it deems
appropriate.
11.17 Construction. Masculine pronouns and other words of masculine gender
shall refer to both men and women. The titles and headings of the articles and
sections in the Plan are for the convenience of reference only, and in the event
of any conflict, the text of the Plan, rather than such titles or headings,
shall control.
11.18 Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Missouri except as superseded by
applicable Federal law.
MARK VII, INC. PROXY
ANNUAL MEETING OF SHAREHOLDERS
MAY 17, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints R. C. Matney and J. Michael Head, jointly and
individually, as Proxies, each with full power of substitution and hereby
authorizes them to represent and to vote, as designated below, all the shares of
common stock of Mark VII, Inc. which the undersigned would be entitled to vote
if personally present at the Annual Meeting of Shareholders to be held on May
17, 1995 or any adjournments or postponements thereof.
1. ELECTION OF DIRECTORS
/ / FOR ALL NOMINEES LISTED BELOW / / WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all
nominees listed
below
INSTRUCTIONS: To withhold authority to vote for any individual nominee
strike a line through the nominee's name.
R. C. MATNEY, J. MICHAEL HEAD, ROGER M. CROUCH,
DAVID H. WEDAMAN, JAMES T. GRAVES, DOUGLASS WM. LIST,
WILLIAM E. GREENWOOD, DR. JAY U. STERLING
2. APPROVAL OF THE ADOPTION OF THE MARK VII, INC. 1995 OMNIBUS STOCK
INCENTIVE PLAN AND THE RESERVATION OF 600,000 SHARES OF COMMON STOCK FOR
ISSUANCE THEREUNDER.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon 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 GIVEN, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES FOR DIRECTOR AND FOR PROPOSAL NO. 2.
Please date, sign and return this Proxy card by mail. Postage prepaid.
Date: , 1995
-------------------------------
Signature
---------------------------------
Signature
---------------------------------
(PLEASE SIGN EXACTLY AS NAME APPEARS ON STOCK
CERTIFICATE. WHERE STOCK IS REGISTERED JOINTLY,
ALL OWNERS MUST SIGN. CORPORATE OWNERS SHOULD
SIGN FULL CORPORATE NAME BY AN AUTHORIZED PERSON.
EXECUTORS, ADMINISTRATORS, TRUSTEES OR GUARDIANS
SHOULD INDICATE THEIR STATUS WHEN SIGNING.)
