<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / 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
</TABLE>
Roadmaster Industries, Inc.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 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:
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<PAGE> 2
(LOGO)
ROADMASTER INDUSTRIES, INC.
To our Stockholders:
On behalf of the Board of Directors, it is our pleasure to invite you to
attend the Annual Meeting of Stockholders of Roadmaster Industries, Inc.
As shown in the formal notice enclosed herewith, the annual meeting will be
held at the Company's showroom located at its new executive offices in Atlanta,
Georgia on Wednesday, June 14, 1995, at 10:00 a.m. local time. The address of
the showroom is 250 Spring Street, N.W., Suite 3 South, Atlanta, Georgia 30303.
At the meeting, in addition to acting on the matters described in the Proxy
Statement, we will give a current report on the activities of the Company.
Stockholders will have an opportunity at that time to comment on or to inquire
about the affairs of the Company that may be of interest to stockholders
generally.
The subjects proposed for action at the meeting are: (1) the election of
nine directors of the Company; (2) authorization of a new Key Employee Stock
Incentive Plan; (3) approval of the performance goals for Named Executive
Officers under the Company's new Short-Term Incentive Plan for officers and
other key employees of the Company; (4) authorization of a new Directors
Restricted Stock Plan for non-employee directors; (5) ratification of the
selection of Arthur Andersen LLP as the Company's auditors, and (6) the
conducting of such other business as may properly come before the meeting.
To help us plan for the meeting, please mark the appropriate box on your
proxy card telling us if you will be attending in person.
It is important that your shares be represented at this meeting in order
that the presence of a quorum may be assured. WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING, YOU ARE URGED TO DATE, SIGN AND MAIL THE ENCLOSED PROXY CARD IN THE
ENVELOPE PROVIDED.
Thank you for your support.
Sincerely yours,
Henry Fong
President and Chief Executive Officer
<PAGE> 3
ROADMASTER INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 14, 1995
TO THE STOCKHOLDERS OF
ROADMASTER INDUSTRIES, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Roadmaster Industries, Inc., a Delaware corporation (the
"Company") will be held on Wednesday, June 14, 1995, at 10:00 a.m., local time,
at the Company's Atlanta, Georgia showroom located at 250 Spring Street, N.W.,
Suite 3 South, Atlanta, Georgia 30303 for the purpose of considering and acting
upon the following:
(1) the election of nine directors of the Company for terms ending with
the next Annual Meeting of Stockholders and until their successors
are elected and qualified;
(2) authorization of a new Key Employee Stock Incentive Plan;
(3) approval of the performance goals for the Company's Named Executive
Officers under the new Short-Term Incentive Plan for officers and
other key employees;
(4) authorization of a new Directors Restricted Stock Plan for
non-employee directors;
(5) ratification of the selection by the Company's Board of Directors of
Arthur Andersen LLP, independent auditors, to audit the accounts of
the Company and its subsidiaries for 1995; and
(6) the transaction of such other business as may properly come before
the Meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 20, 1995,
will be entitled to notice of and to vote at the Meeting or any adjournment
thereof. The Meeting may be adjourned from time to time without notice other
than by announcement. A list of stockholders entitled to vote at the Meeting
will be available for inspection by any stockholder for any purpose germane to
the Meeting, during ordinary business hours, during the ten days prior to the
Meeting, at Roadmaster Industries, Inc., 250 Spring Street, N.W., Suite 3 South,
Atlanta, Georgia 30303.
By Order of the Board of Directors
Charles E. Sanders
Secretary
Atlanta, Georgia
May 13, 1995
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING, REGARDLESS
OF THE NUMBER OF SHARES YOU HOLD, IN ORDER THAT A QUORUM MAY BE ASSURED. WHETHER
OR NOT YOU PLAN TO BE PRESENT AT THE MEETING IN PERSON, PLEASE COMPLETE, SIGN,
DATE AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING RETURN ENVELOPE TO WHICH NO
POSTAGE NEED BE AFFIXED BY THE SENDER IF MAILED WITHIN THE UNITED STATES. IF YOU
RECEIVE MORE THAN ONE PROXY BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT
NAMES OR ADDRESSES, EACH SUCH PROXY SHOULD BE SIGNED AND RETURNED TO ASSURE THAT
ALL OF YOUR SHARES WILL BE VOTED. THE PROXY SHOULD BE SIGNED BY ALL REGISTERED
HOLDERS EXACTLY AS THE STOCK IS REGISTERED.
<PAGE> 4
ROADMASTER INDUSTRIES, INC.
250 SPRING STREET, N.W., SUITE 3 SOUTH
ATLANTA, GEORGIA 30303
---------------------
PROXY STATEMENT, DATED MAY 13, 1995,
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 14, 1995
---------------------
INTRODUCTION
VOTE BY PROXY
This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of Roadmaster Industries, Inc. (the
"Company") from the holders of common stock, par value $0.01 per share, of the
Company (the "Common Stock") for use at the 1995 Annual Meeting of Stockholders
to be held on Wednesday, June 14, 1995, at 10:00 a.m., local time, and any
adjournment thereof (the "Meeting"), for the purposes set forth in the
accompanying Notice of Meeting and described in detail herein. This Proxy
Statement, together with a form of proxy, is first being mailed to stockholders
on or before May 13, 1995.
All properly executed proxies in the form enclosed received in time for the
Meeting will be voted according to their voting rights in accordance with the
instructions contained thereon and, if no choice is specified, proxies will be
voted FOR the election of the nine directors of the Company named herein, FOR
approval of the Key Employee Stock Incentive Plan ("KESIP"), FOR approval of the
performance goals for the Company's Named Executive Officers under the
Short-Term Incentive Plan ("STIP") for officers and other key employees, FOR
approval of the Directors Restricted Stock Plan ("DRSP"), and FOR ratification
of the selection of Arthur Andersen LLP as independent auditors for 1995.
Any person giving a proxy pursuant to this Proxy Statement may revoke it at
any time before it is exercised at the Meeting by filing with the Secretary of
the Company, at the address of the Company stated above, a written notice of
such revocation or by duly executing a proxy bearing a later date. In addition,
if a person executing a proxy is present at the Meeting, he may, but need not,
revoke his proxy, by notice of such revocation to the Secretary of the Meeting,
and vote his shares in person. Proxies, if in the form enclosed, duly signed and
received in time for voting, and not revoked before they are voted, will be
voted at the Meeting in accordance with the instructions specified therein.
COST OF PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company.
Proxies may be solicited by the Company's directors, officers and regular
employees, without remuneration, in person or by telephone, facsimile
transmission, telegram or mail. It is anticipated that banks, brokerage houses
and other custodians, nominees and fiduciaries will forward soliciting material
to beneficial owners of Common Stock entitled to vote at the Meeting, and such
persons will be reimbursed for out-of-pocket expenses incurred by them in
connection therewith in accordance with the regulations of the Securities and
Exchange Commission and the New York Stock Exchange for sending proxies and
proxy materials to the beneficial owners of common shares.
In connection with the Meeting, the Company has retained D.F. King & Co.,
77 Water Street, Twentieth Floor, New York, New York 10005, to assist the
Company in the distribution and solicitation of proxies. D.F. King & Co.'s
services may include the delivery of proxy materials to brokers, nominees,
fiduciaries and other custodians of Common Stock for distribution to the
beneficial owners of such stock as well as the solicitation of proxies from such
beneficial owners. The Company has agreed to pay D.F. King & Co. a
<PAGE> 5
solicitation fee not to exceed $10,000 and to reimburse D.F. King & Co. for all
printing, postage, freight and other delivery charges incurred by it in
connection with its activities on behalf of the Company.
The Annual Report of the Company for the year ended December 31, 1994,
including financial statements (the "Annual Report"), is being mailed prior to
or concurrently with this Proxy Statement to all stockholders of record as of
April 20, 1995 (the "Record Date"), except for accounts where the stockholder
has filed a written request to eliminate duplicate reports. In addition, the
Company has provided brokers, dealers, banks, voting trustees and their
nominees, at Company expense, with additional copies of the Annual Report so
that such record holders could supply such material to beneficial owners as of
the Record Date. Proxies furnished to employees who participate in the Company's
employee stock ownership plans which are returned will be considered to be
voting instructions to the trustee for the applicable plan with respect to the
shares credited to such accounts.
OUTSTANDING SHARES AND VOTING RIGHTS
The Common Stock is the Company's only class of outstanding securities with
general voting rights. Each share of Common Stock is entitled to one vote on
each matter properly coming before the Meeting. Only stockholders of record as
of the close of business on the Record Date will be entitled to vote at the
Meeting. As of the Record Date, the Company had a total of 49,814,529 shares of
Common Stock issued and outstanding. The number of outstanding shares excludes
4,204,598 shares of treasury stock, which cannot be voted and cannot be counted
in computing the number of shares required for a quorum. Each stockholder has
one vote per share on all business to be conducted at the Meeting, and
cumulation of votes is not permitted. Holders of a majority of the outstanding
shares, if present in person or represented by proxy, will constitute a quorum
at the Meeting. Abstentions and "broker non-votes" are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
In all matters other than the election of directors, only the affirmative vote
of the majority of those shares which are present in person or by proxy at the
Meeting and entitled to vote thereon is required to approve a proposal for
purposes of Delaware law.
The Key Employee Stock Incentive Plan and the Directors Restricted Stock
Plan (collectively, the "Stock Plans") are being submitted to the stockholders
for adoption to, among other things, qualify such plans under Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Approval of
the Stock Plans requires, under Rule 16b-3, the affirmative vote of the majority
of those shares which are present in person or by proxy at the Meeting and
entitled to vote thereon which are cast. For such purpose, abstentions are
counted in calculating shares entitled to vote and thus have the effect of "no"
votes, while broker non-votes are not counted as shares eligible to vote and
have no effect.
The Stock Plans and the Short-Term Incentive Plan or elements thereof also
are being submitted to the stockholders to satisfy a requirement of Section
162(m) of the Internal Revenue Code. Such stockholder approval is a prerequisite
to the deductibility of certain executive compensation by the Company. In order
to satisfy the stockholder approval requirement of Section 162(m), such plans or
elements thereof will be approved if affirmative votes are cast by a majority of
the voting shares. For such purpose, abstentions are not counted as voting and
have no effect. Similarly, broker non-votes will have no effect.
Directors will be elected by a plurality of the votes of the shares present
in person or represented by proxy and casting votes for the position on the
Board which that nominee represents. Accordingly, abstentions and broker
non-votes will have no effect on the outcome of the election of directors or the
selection of auditors.
2
<PAGE> 6
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of April 20, 1995, certain information
concerning ownership of Common Stock by: (i) each person who is known by the
Company to own beneficially more than 5% of the Common Stock, (ii) each director
individually, (iii) the Company's Chief Executive Officer and each other
executive officer listed in the Summary Compensation Table (collectively, a
"Named Executive Officer"), and (iv) all directors and executive officers of the
Company as a group. The determinations of "beneficial ownership" of Common Stock
are based upon Rule 13d-3 under the Exchange Act. Such rule provides that shares
will be deemed "beneficially owned" where a person has, either solely or in
conjunction with others, the power to vote or to direct the voting of shares
and/or the power to dispose, or to direct the disposition of, shares or where a
person has the right to acquire any such power within 60 days after the date
such "beneficial ownership" is determined.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
NAME AND ADDRESS OF BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED(1) OF CLASS
- - ----------------------------------------------------------------------- ------------ --------
<S> <C> <C>
Equitex, Inc(2)........................................................ 5,100,437 10.2%
Henry Fong(3)(4)....................................................... 6,932,242 13.5%
Edward E. Shake(5)(6).................................................. 1,071,273 2.1%
Jeff L. Hinton(7)(8)................................................... 28,983 *
Louis J. Conti(9)(10).................................................. 75,000 *
James H. Rand(11)(12).................................................. 25,000 *
Stephen P. Bradley(13)(14)............................................. 25,000 *
John D. Phillips(15)(16)............................................... 19,194,000 38.5%
Clay C. Long(17)(18)................................................... 55,000 *
Michael P. Marshall(19)(20)............................................ 25,000 *
Carl E. Sanders(21)(22)................................................ 35,000 *
The Actava Group Inc.(23).............................................. 19,169,000 38.5%
All executive officers and directors as a group (10 persons)(24)....... 27,466,498 53.0%
</TABLE>
- - ---------------
* Less than 1%.
(1) Unless otherwise indicated, the named individual or entity has sole voting
and investment power with respect to all shares shown as beneficially owned
by such person. For each beneficial owner, the number of shares outstanding
and the percentage of stock ownership includes the number of common and
common equivalent shares (including options and warrants exercisable within
60 days) owned by such individual or entity.
(2) The address of Equitex, Inc. is 7315 E. Peakview Avenue, Englewood,
Colorado 80111.
(3) The address of Mr. Fong is 1225 U.S. Highway 1, Suite 215, Juno Beach,
Florida 33408.
(4) Henry Fong is the President and a director and 5% shareholder of Equitex,
Inc. ("Equitex"). Includes all 5,100,437 shares of Common Stock owned by
Equitex, as to which Mr. Fong disclaims beneficial ownership. Investment
and voting power is exercised on behalf of Equitex by the investment
committee of Equitex's board of directors, which is composed of Mr. Fong
and two outside directors. Includes 375,000 shares of restricted Common
Stock granted to Mr. Fong pursuant to the Company's KESIP, which plan is
subject to stockholder approval. Includes 240,000 shares of Common Stock
issuable pursuant to warrants exercisable within 60 days and 150,000 shares
issuable pursuant to options exercisable within 60 days. Includes 100
shares held directly by Mr. Fong. Also includes 1,066,705 shares issuable
pursuant to warrants exercisable within 60 days held by a revocable trust
for the benefit of Mr. Fong's minor children and as to which Mr. Fong
disclaims beneficial ownership. Mr. Fong's right to revoke such trust is
subject to conditions precedent which have not occurred.
(5) The address of Mr. Shake is Radio Tower Road and East Street, Olney,
Illinois 62450.
(6) Includes 290,744 shares issuable pursuant to warrants exercisable within 60
days and 56,250 shares issuable pursuant to options exercisable within 60
days. Includes 22,892 shares in the Company's 1990 Employee Stock Ownership
Plan and Trust (the "ESOP") and 401(k) Plan allocated to Mr. Shake, as
3
<PAGE> 7
of the last plan report date. Also includes 90,400 shares of Common Stock
as to which Mr. Shake has shared investment and voting power. Also includes
275,987 shares held directly by Mr. Shake as to which Mr. Shake has sole
voting and investment power. Includes 281,250 shares of restricted Common
Stock granted to Mr. Shake pursuant to the Company's KESIP, which plan is
subject to stockholder approval. Includes 110,000 non-vested shares of
restricted Common Stock issued to employees of Roadmaster Corporation
("RMC") as to which RMC has sole voting power and sole investment power
until the lapse of certain forfeiture provisions.
(7) The address of Mr. Hinton is 250 Spring Street, N.W., Suite 3 South,
Atlanta, Georgia 30303.
(8) Includes 6,000 shares issuable pursuant to warrants exercisable within 60
days and 4,000 shares issuable pursuant to options exercisable within 60
days. Includes 983 shares in the Company's ESOP allocated to Mr. Hinton, as
of the last plan report date. Includes 15,000 shares as to which Mr. Hinton
has shared investment and voting power.
(9) The address of Mr. Conti is 185 Barra Lane, Inverness, Illinois 60067.
(10) Consists of 25,000 shares issuable pursuant to options exercisable within
60 days.
(11) The address of Mr. Rand is 1011 High Ridge Road, Stamford, Connecticut
06905.
(12) Consists of 25,000 shares issuable pursuant to options exercisable within
60 days.
(13) The address of Mr. Bradley is Harvard Business School, Morgan Hall, 240
Soldiers Field Road, Boston, Massachusetts 02163.
(14) Consists of 25,000 shares issuable pursuant to options exercisable within
60 days.
(15) The address of Mr. Phillips is The Actava Group Inc., 945 East Paces Ferry
Road, Suite 2210, Atlanta, Georgia 30326.
(16) Includes all 19,169,000 shares owned by The Actava Group Inc. as to which
Mr. Phillips disclaims beneficial ownership. Also includes 25,000 shares
issuable pursuant to options exercisable within 60 days.
(17) The address of Mr. Long is Long, Aldridge & Norman, One Peachtree Center,
Suite 5300, Atlanta, Georgia 30308.
(18) Includes 25,000 shares issuable pursuant to options exercisable within 60
days.
(19) The address of Mr. Marshall is c/o The Actava Group Inc., 945 East Paces
Ferry Road, Suite 2210, Atlanta, Georgia 30326.
(20) Consists of 25,000 shares issuable pursuant to options exercisable within
60 days.
(21) The address of Mr. Sanders is Troutman Sanders, 600 Peachtree Street, Suite
5200, Atlanta, Georgia 30308.
(22) Consists 25,000 shares issuable pursuant to options exercisable within 60
days.
(23) The address of The Actava Group Inc. is 945 East Paces Ferry Road, Suite
2210, Atlanta, Georgia 30326.
(24) Includes an aggregate of 772,024 shares issuable pursuant to warrants and
options exercisable within 60 days.
AGENDA ITEM ONE
ELECTION OF DIRECTORS
GENERAL INFORMATION REGARDING THE BOARD OF DIRECTORS
A Board of Directors consisting of nine (9) members is to be elected at the
Meeting to serve until the next Annual Meeting of Stockholders and until their
successors are elected and qualified. Under Article V of the Company's
Certificate of Incorporation, the number of directors is fixed at nine and may
not be changed, prior to December 6, 1999, by the Board of Directors without the
consent of at least six members of the Board. In the case of a vacancy, the
Board of Directors may elect another director as a replacement or leave the
vacancy unfilled. The Company, Mr. Fong and Mr. Shake are parties to a
shareholders agreement (such agreement hereinafter the "Shareholders Agreement")
with The Actava Group Inc. ("Actava") entered into on December 6, 1994 in
connection with the acquisition by the Company from Actava of all of the issued
and outstanding capital stock of Diversified Products Corporation, Hutch Sports
USA, Inc., Nelson/Weather-
4
<PAGE> 8
Rite, Inc. and Willow Hosiery Company, Inc. (such companies hereinafter the
"Sports Subsidiaries"). The Shareholders Agreement obligates each party thereto
to use their best efforts to cause the nomination and election of persons
designated by the Company and Actava, respectively, to the Company's Board of
Directors. Pursuant to the Shareholders Agreement, Messrs. Fong, Shake, Conti,
Rand and Bradley have been designated by the Company and Messrs. Phillips, Long,
Marshall and Sanders have been designated by Actava. Recommendations for
nominations to the Board of Directors are made by the Board's Nominating
Committee, which currently is composed of Henry Fong, the Company's President,
and Louis J. Conti and James H. Rand, two of the Company's outside directors.
Nominations for election to the Board may be made by the Board of Directors, the
Nominating Committee or any stockholder holding at least 19,169,000 shares of
Common Stock on December 6, 1994, provided any such stockholder continues to
hold at least 2,000,000 shares of Common Stock at all times after such date.
Nominations for election to the Board may also be made by any stockholder by
written notice in advance of the Meeting in the manner and within the time
periods prescribed by the Company's By-laws.
Proxies received from holders of Common Stock will be voted for the
election of the nominees named below as directors for a term expiring at the
next Annual Meeting of Stockholders, unless authority to do so is withheld. In
the event any nominee is unable or declines to serve as a director at the time
of the Meeting, the persons named as proxies therein will have discretionary
authority to vote the proxies for the election of such person or persons as may
be nominated in substitution by the present Board of Directors. Management knows
of no current circumstances which would render any nominee named herein unable
to accept nomination or election. Both Mr. Fong and Mr. Shake are executive
officers of the Company. If all the nominees are elected, two of the nine
directors will be executive officers of the Company and seven will be outside
directors.
NOMINEES FOR REELECTION
Henry Fong, age 58, has been the President, Chief Executive Officer,
Treasurer and a director of the Company since its inception in 1987. He has also
served as a director of RMC, the Company's principal operating subsidiary, since
August 1987. He has been the President and a director and a significant
stockholder of Equitex, a publicly held business development company, since
January 1983. Equitex is the second largest stockholder of the Company. From
August 1989 to September 1990, Mr. Fong was executive vice president, treasurer
and a director of MGS Acquisition, Inc. ("MGS") and a director of its wholly
owned subsidiary, MacGregor Sports, Inc. ("MSI-2"), which were formed to acquire
the assets of MacGregor Sporting Goods, Inc. ("MSI") out of bankruptcy. After
acquiring the assets of MSI, both MGS and MSI-2 subsequently filed for
protection under the federal bankruptcy laws in February 1991. Since February
1991, Mr. Fong has served as the Chairman of the Board of Directors and
Treasurer of MacGregor Sports and Fitness, Inc., a publicly held company engaged
in the business of marketing and distributing a broad range of sports,
recreational and fitness products under the MacGregor trademark. MacGregor
Sports and Fitness, Inc. was formed for the purpose of acquiring and, in fact,
did in May 1991 acquire, certain of the assets of MSI-2 in that company's
Chapter 11 bankruptcy proceedings. From 1959 to 1982, Mr. Fong served in various
accounting, finance and budgeting positions with the Department of the Air
Force. During the period from 1972 to 1981, he was assigned to senior
supervisory positions at the Department of the Air Force headquarters in the
Pentagon. In 1978, he was selected to participate in the Federal Executive
Development Program and in 1981, he was appointed to the Senior Executive
Service. In 1970 and 1971, he attended the Woodrow Wilson School, Princeton
University as a Princeton Fellow in Public Affairs. Mr. Fong received the Air
Force Meritorious Civilian Service Award in 1982. Mr. Fong is a certified public
accountant. In March 1994, Mr. Fong was one of twelve CEOs selected as Silver
Award winners in Financial World magazine's Corporate American "Dream Team."
Edward E. Shake, age 50, has been the Chief Operating Officer of the
Company since December 1994 and a director of the Company since May 1993. Mr.
Shake has been employed by the Company or its predecessor since 1974. He has
been the President of RMC since February 1991 and was Vice President --
Operations of RMC from April 1984 to February 1991. Mr. Shake has been a
director of RMC since January 1992. Mr. Shake has served as a director of
MacGregor Sports and Fitness, Inc. since December 1991, and the
5
<PAGE> 9
Olney Trust Bank since March 1993. Mr. Shake holds a B.S. from David Lipscomb
University, B.S. and M.S. degrees in engineering from the University of
Tennessee and an A.M.P. degree from Harvard University.
Louis J. Conti, age 75, has served as a director of the Company since
October 1992. He was previously a director of the Company from October 1987
until October 1990. From February 1975 to February 1994, Mr. Conti was a
director of Emerson Electric Company, a publicly held company engaged in the
manufacturing and marketing of electric products for the consumer and industrial
markets. From September 1990 to February 1994, Mr. Conti was a director of Esco
Electronics Corporation, a publicly held company engaged principally in the
manufacture of defense and commercial systems and products. From 1956 to 1982,
he was an officer of GATX Corporation ("GATX"), which provides financial,
leasing capital and transportation services, where he headed various
subsidiaries of that company. Mr. Conti also served on the Board of Directors of
GATX from 1969 to 1978. From 1983 until his retirement in 1985, Mr. Conti was
Chairman and Chief Executive Officer of Marine Transport, Inc. ("Marine"), an
independent ship owner and operator. Mr. Conti also served as a director of
Marine from 1983 to 1987. From 1977 through 1985, Mr. Conti was Chairman of the
Reserve Forces Policy Board of the United States Department of Defense. Mr.
Conti retired from the U.S. Marine Corps Reserve in 1979 as a Major General.
James H. Rand, age 51, has served as a director of the Company since July
1993. Mr. Rand is Chief Executive Officer of Koch Label Company LLC, a private
company engaged in the manufacture of die cut, rotogravure labels for the
international packaging industry. From June 1993 to December 1994, Mr. Rand was
Chief Executive Officer of Kredietbank Global Management, Inc. ("KBGM"), a
registered investment advisory firm. From June 1992 to June 1993, Mr. Rand also
was Chairman of Darien Asset Management, Inc. ("DAM"), a registered investment
advisory firm. Prior to entering the investment management business through DAM
and KBGM, Mr. Rand was from 1990 to 1991 Senior Vice President with Wright
Investor's Service, a registered investment advisor. Between 1986 and 1990, Mr.
Rand was President and sole shareholder of Rand & Company, Inc., an independent
ship owner and ship agency. From 1978 to 1986, Mr. Rand was an officer of Marine
Transport Lines, Inc., an independent ship owner and operator, where he held a
variety of positions, including President and Chief Operating Officer
(1979-1985) and Chairman and Chief Executive Officer (1985-1986). Mr. Rand has
since 1988 been an underwriting member of Lloyd's and since 1987 has served as a
director of Navinvest, Ltd., a private maritime investment company.
Stephen P. Bradley, age 54, has served as a director of the Company since
March 1994. Professor Bradley is the William Ziegler Professor of Business
Administration and the Senior Associate Dean for Faculty Development at the
Harvard Business School. He is currently the Faculty Chairman of the Executive
Program in Competition and Strategy and teaches Competition and Strategy in the
MBA and executive programs. He is a past Chairman of the Managerial Economics
Area at the school. Professor Bradley received his B.E. in Electrical
Engineering from Yale University in 1963, where he was elected to TAU BETA PI,
and his M.S. and Ph.D. in Operations Research from the University of California,
Berkeley, in 1965 and 1968, respectively. Prior to coming to Harvard, he was
with the Center for Exploratory Studies of the IBM Corporation. Professor
Bradley is a member of the board of directors of the Controlled Risk Insurance
Company, Ltd., associate editor of Interfaces, and a past member of the
editorial board of the Harvard Business Review.
John D. Phillips, age 52, has served as a director of the Company since
December 1994. Mr. Phillips has been President, Chief Executive Officer and a
director of The Actava Group Inc. since April 1994. From February 1989 to
September 1993, Mr. Phillips was a director of Resurgens Communications Group
Inc. ("Resurgens"), the Chief Executive Officer thereof from May 1989 to
September 1993 and Chairman of its Board of Directors from June 1989 to
September 1993. In 1993, Resurgens merged with Metromedia Communications
Corporation and LDDS Communications, Inc. in a transaction that created the
fourth largest long-distance company in the country. From 1985 to 1988, Mr.
Phillips was Chairman and Chief Executive Officer of Advanced Telecommunications
Corporation.
Clay C. Long, age 58, has served as a director of the Company since
December 1994. Mr. Long is, and has been for more than five years, the Chairman
and founding partner of the Atlanta, Georgia law firm of Long, Aldridge &
Norman. In addition to serving as Chairman of that firm, Mr. Long engages in a
corporate
6
<PAGE> 10
legal practice with an emphasis on handling the purchase and sale of businesses.
Mr. Long currently serves as the Chairman of the Board of Trustees of the
Georgia Conservancy, a director and member of the Executive Committee of Central
Atlanta Progress and a board member of the Metropolitan Atlanta Community
Foundation. Mr. Long recently was appointed by the Governor of the State of
Georgia to the Jekyll Island Authority and currently holds or has held numerous
other legal, business and community service positions and directorships. Mr.
Long has a B.A. degree from Birmingham-Southern College, attended Kings College,
University of London on a Rotary Foundation Fellowship and received his law
degree from Harvard Law School.
Michael P. Marshall, age 53, has served as a director of the Company since
December 1994. Mr. Marshall is a private investor. Mr. Marshall is, and has been
for more than five years, Chairman, President and a majority stockholder, and
currently is the sole stockholder, of Marshall & Co., a holding company for
various investment banking and securities related businesses. In March 1989, the
securities brokerage and investment banking business of Marshall & Co. was
acquired by Wheat First Securities, Inc. Mr. Marshall was a managing director in
the Atlanta, Georgia office of Wheat First Securities, Inc. from March 1989
through August 1989. Mr. Marshall was Chairman or Co-Chairman of Resurgens from
September 1989 to September 1993. Mr. Marshall has a B.A. degree in finance from
the University of Georgia.
Carl E. Sanders, age 69, has served as a director of the Company since
December 1994. Mr. Sanders is and has been Chief Partner of the Atlanta, Georgia
law firm of Troutman Sanders (or its predecessor firm) since 1967 and was
Governor of the State of Georgia from 1963 to 1966. He was Chairman of the Rules
Committee of the 1964 Democratic National Convention, a member of the Executive
Committee of the National Governors Conference, and Chairman of the Southern
Regional Education Board. He was Chairman of the Southern Governors Conference
in 1965. Prior to becoming Governor, he served one term in the Georgia House of
Representatives and three terms in the Georgia State Senate. He was President
Pro Tem of the State Senate from 1960 to 1963. He also serves as a member of the
board of directors of Carmike Cinemas, Inc., First Union Corporation of Georgia,
Healthdyne, Inc., Learning Technologies, Ltd., Norrell Corporation, and The
Actava Group Inc. He is a member of the Atlanta Committee for the Olympic Games
as well as the National Science Center Foundation. In November, 1989, the
Emperor and Government of Japan bestowed upon Governor Sanders the Order of the
Sacred Treasure, Gold and Silver Award, for significant contributions in
promoting friendly relations between the United States and Japan. Governor
Sanders is a graduate of the University of Georgia, where he also received his
Juris Doctor Degree.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE REELECTION OF
EACH NOMINEE AS A DIRECTOR.
ADDITIONAL EXECUTIVE OFFICERS
Jeff L. Hinton, age 31, has served as Chief Financial Officer of the
Company since December 1994. From August 1993 to December 1994, Mr. Hinton
served as the Company's Director for Financial Planning and Analysis and
Business Development. From October 1992 to August 1993, Mr. Hinton was the
Company's Manager of Internal Audit. From September 1989 to October 1992, Mr.
Hinton held various positions with Northern Telecom, Ltd., a telecommunications
equipment manufacturer, most recently as a Manager in the Internal Audit
Services Group. From October 1985 to September 1989, Mr. Hinton held various
positions with the accounting firm of Ernst & Young LLP or its predecessor. Mr.
Hinton is a certified public accountant and holds an M.B.A. degree from
Vanderbilt University and a B.S. degree in Accounting from David Lipscomb
University.
MEETINGS AND COMMITTEES OF THE BOARD
During fiscal 1994, the Board of Directors of the Company had six (6)
regular meetings and three (3) special meetings. All incumbent directors
attended at least seventy-five percent (75%) of the total number of meetings of
the Board of Directors and any committee of the Board on which they served.
7
<PAGE> 11
GOVERNANCE OF THE COMPANY
In accordance with applicable Delaware state law, the business of the
Company is managed under the direction of its Board of Directors.
There are currently three standing committees of the Board of Directors.
Committee memberships, the number of committee meetings held during 1994 and the
functions of those committees are described below.
AUDIT COMMITTEE
The current members of the Audit Committee are James H. Rand (Chairman) and
Louis J. Conti.
The Audit Committee represents the Board in discharging its
responsibilities relating to the accounting, reporting and financial control
practices of the Company and its subsidiaries. The Audit Committee has general
responsibility for reviewing with management the financial controls, accounting,
and audit and reporting activities of the Company and its subsidiaries. The
Audit Committee annually reviews the qualifications and objectivity of the
Company's independent auditors, makes recommendations to the Board as to their
selection, reviews the scope, fees and results of their audit, reviews their
non-audit services and related fees, reviews their management comment letters
and annually reviews the status of significant current and potential legal
matters. In addition, the Audit Committee reviews the scope of the internal
auditor's plans each year and the results of their audits. The Audit Committee
is also empowered to conduct its own investigations into issues related to the
aforementioned responsibilities and to retain independent counsel or outside
experts for such purposes. The Audit Committee met three (3) times in 1994.
COMPENSATION AND BENEFITS COMMITTEE
The current members of the Compensation and Benefits Committee (the
"Compensation Committee") are Louis J. Conti (Chairman) and James H. Rand.
The Compensation Committee currently consists of two directors, neither of
whom is a current or former employee of the Company or its subsidiaries. The
Compensation Committee oversees incentive compensation plans for officers and
key employees, approves standards for setting compensation levels for Company
executives and grants the specific awards made under the Company's executive
incentive compensation plan. Such Committee also approves the compensation of
certain employees whose salaries are above specified levels as determined from
time to time by the entire Board and makes recommendations to the Board as
required. It also reviews senior management development programs and evaluates
senior management's performance against the Company's business plans and
budgets. Such Committee is authorized to hire and regularly consult with
independent compensation advisors. The Compensation Committee also is
responsible for administering the Company's stock benefit plans established by
the Company.
The Compensation Committee also represents the Board in discharging its
responsibilities with respect to the Company's employee pension, savings and
welfare benefit plans. It appoints the members of management who serve on an
employee benefits administration committee and a benefit plans investment
committee, which are responsible, respectively, for the administration of the
plans of the Company and for the custody and management of assets of those plans
that are funded. The Compensation Committee receives periodic reports from the
administration and benefit plans investment committees on their activities. Such
other committees include non-director members. The Compensation Committee met
four (4) times in 1994.
NOMINATING COMMITTEE
The current members of the Nominating Committee are Louis J. Conti
(Chairman), Henry Fong and James H. Rand.
The Nominating Committee identifies and recommends candidates for election
to the Board. It advises the Board on terms of tenure, retirement policy,
compensation of directors and issues involving potential conflicts of interest.
The Nominating Committee also considers candidates recommended by shareholders.
Any shareholder who wishes to recommend a candidate for election to the Board
should submit such
8
<PAGE> 12
recommendation to the Secretary of the Company. The submission should include a
statement of the candidate's business experience and other business affiliations
and confirmation of the candidate's willingness to be considered as a nominee.
The Nominating Committee did not meet in 1994; instead, nominations were made by
the full Board.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Conti and Mr. Rand served on the Compensation Committee for 1994. The
Company had no compensation committee interlocks or insider participation on the
Compensation Committee.
COMPENSATION COMMITTEE REPORT
Prior to the adoption of the Company's new executive officer compensation
program in the fourth quarter of 1994, which is discussed below in this report,
the Company's compensation program for its executive officers was highly
subjective. Prior to the adoption of the new compensation program, the Chief
Executive Officer, Henry Fong, informed the Board of Directors, and in 1994
informed the Compensation Committee, as to the proposed amount and type of
compensation for himself and the other executive officers. Factors considered by
the CEO and the Compensation Committee in making their recommendations and
decisions included their subjective perception of the individual officer's
performance, significant milestones achieved by the Company, gross margins,
Company sales target levels, the nature of the officer's duties and
responsibilities, the compensation paid to officers of companies competing with
the Company (to the extent known) and a subjective assessment of the
compensation the Company's officers could obtain in the market. While various
components of the Company's performance were considered in setting compensation,
compensation generally was not tied to fixed objective measures of Company
performance nor was any objective ranking or weighing attributed to specific
measures of performance in setting compensation.
Traditionally, the Company paid for its officers' services largely through
a combination of cash and warrants to purchase Common Stock. The Company has
also issued warrants and, on a transactional basis, made cash payments to
officers for services rendered outside of their normal duties or for services
performed in a capacity other than as an officer of the Company. Historically,
direct compensation (salary and annual bonus) were set at levels believed to be
materially below levels paid by the Company's competitors for which information
is available. The Company believes total compensation has also been below that
paid by competitors, especially since a substantial portion of the value of the
compensation paid to Company officers has been in the form of warrants to
purchase Common Stock. This assessment of relative compensation levels and type
of compensation was, and is, largely subjective since few of the Company's
competitors are public companies. The Company's primary competitors in the
bicycle market include several domestic manufacturers including Huffy
Corporation and Murray-Ohio Manufacturing Company, as well as various
distributors of imported bicycles. The Company's major competitors in toy
products include Radio Steel Corporation, Hedstrom Corporation, Huffy
Corporation, the Fischer-Price division of Mattel, Inc. and the Little-Tikes
division of Rubbermaid Incorporated. In fitness equipment, the Company competes
with domestic companies such as ICON Health and Fitness, Inc.
With respect to the compensation of the Company's CEO in 1994, the
Compensation Committee considered the same subjective factors discussed above
plus Mr. Fong's role in the recent expansion of the Company. Historically, there
has been no objective link between the level of Mr. Fong's compensation and the
performance of the Company, although the Compensation Committee has been aware
of the general improvement in the Company's performance in every year since
1987, except for 1990, when its results were adversely affected by a major
customer filing for protection under the federal bankruptcy laws and 1994 when
net earnings were adversely affected by higher than expected costs for raw
materials despite record gross revenues. Mr. Fong did not participate in the
Company's 1994 cash bonus program for senior management but was granted the
right to earn a transaction fee of $595,000 based on the acquisition of, and
assimilation into the Company of, the Sports Subsidiaries. The Committee
concluded that the total compensation furnished to Mr. Fong for his services in
1994 was appropriate.
9
<PAGE> 13
In 1994, the Company retained the services of Hewitt Associates, LLC
("Hewitt"), a compensation consultant, to evaluate the Company's compensation
policies and advise the Compensation Committee with respect to revisions to the
Company's compensation policies. As a result of such study and in connection
with the acquisition in December 1994 of the Sports Subsidiaries from Actava,
the Compensation Committee and the Board have made substantial changes in the
Company's compensation policies effective during the fourth quarter of 1994.
In establishing and evaluating the effectiveness of compensation programs
for the Company's executive officers as well as other employees of the Company,
the Compensation Committee was guided by three basic principles:
- The Company must offer competitive salaries to be able to attract and
retain highly qualified and experienced executive and other management
personnel;
- Executive cash compensation in excess of base salary should be tied to
Company and individual performance;
- The financial interest of the Company's senior executives should be
aligned with the financial interests of the Company's stockholders,
primarily through the award of stock options and restricted stock grants.
Hewitt provided data and advice to the Committee with respect to the
compensation paid to senior officers of the Company. In doing so, it took into
account the manner in which the compensation paid by the Company compares to
such compensation paid by other companies, both within the recreation and
leisure industry, as well as outside of such industry and evaluated the
Company's compensation programs against the programs of other companies of
comparable size as of year end.
Both Hewitt and the Compensation Committee believe that it is appropriate
to benchmark the Company's compensation policies against companies both within
and without the recreation and leisure industry because competition for
executive and managerial talent is not limited to the recreation and fitness
industry. The Committee further believes that any compensation comparison
limited solely to such industry also is inappropriate due to, among other
things, the limited number of public companies in such industry, the significant
variety in product competition within the industry, and the substantial variety
in company size and performance within such industry. The group of twenty-four
"comparator" companies utilized by Hewitt for its compensation analysis included
one toy company with whom the Company competes (such Company is not included in
the S&P Leisure Time Index utilized in the Company's performance graph).
Notwithstanding the limited availability of such information, the
Compensation Committee believes that the total compensation awarded to its
executive officers is in the mid range of compensation with respect to specific
companies with whose products the Company's products compete in one or more
product lines, based on publicly available documents available to the Committee.
Unlike the Hewitt study, such determination was largely subjective due to, among
other things, timing of compensation disclosure, differences in compensation
techniques, vesting periods and the range of compensation awardable under
various compensation programs.
Based in substantial part on the Hewitt study, the Company substantially
revised its compensation programs. This revision was strongly influenced by the
conclusions of the Hewitt study which found that in terms of direct
compensation, the Company's Named Executive Officers were substantially
undercompensated, that in terms of reliance on awards of restricted stock the
use of restricted stock was substantially underutilized, and that in terms of
the use of stock options/warrants the use of options/warrants was somewhat
overutilized. The Hewitt study reviewed total compensation for both the Chief
Executive Officer and Chief Operating Officer paid over a three year period and
the study concluded such compensation averaged approximately one-third below
comparably sized companies based on Company size at year end. The study
considered transaction-based payments for services rendered by various persons
including the CEO which had been awarded prior to the study and valued such
compensation on a present value basis. In connection with the revision of the
Company's compensation program, it was decided that the Company would, beginning
in 1995, cease to utilize transaction-based arrangements to compensate officers
and/or other
10
<PAGE> 14
employees of the Company for services outside of their ordinary duties based on
the implementation of the Company's new compensation program.
The Hewitt study recommended a compensation program whereby the Company's
executive officers would receive competitive compensation packages valued
generally at the 50th percentile of the comparator companies. Such target range
generally was as adopted by the Compensation Committee, and the Company's new
compensation program provides for base salary for the CEO and COO within a 10%
range (plus or minus) of the 50th percentile of market and annual bonus
opportunities within a similar 10% range (plus or minus) of the 50th percentile
of bonus opportunities available at the comparator companies. The
recommendations of the Hewitt study as to base salary are substantially
reflected in the terms of the five-year employment contracts for the Company's
Chief Executive Officer and Chief Operating Officer which were entered into at
the time of the acquisition of the Sports Subsidiaries. The Hewitt study also
recommended and, as discussed herein, the Company has implemented in accordance
with Hewitt's recommendations a long-term compensation program providing for the
award of stock options and restricted stock.
Awards under such program to date, which have been made subject to
stockholder approval, have featured four year incremental vesting for options
and five year vesting for restricted stock grants to emphasize the long-term
nature of such awards. The Compensation Committee did not increase benefits or
other executive perquisites, other than to approve a split dollar insurance plan
for the CEO and COO, and the benefits and other prerequisites available to the
Company's executive officers continue to be below those furnished by the
comparator companies. In summary, while individual components of the total
compensation packages for the Company's CEO and COO vary somewhat based on the
individual's particular circumstances, the overall result of the restructured
compensation program is total compensation packages for the CEO and COO for 1995
which are worth slightly less than compensation packages at the 50th percentile
of the comparator companies in the Hewitt study.
The Company's only other executive officer position, Chief Financial
Officer, was not established until December 1994. The base salary for the CFO
for 1995 has been established, subject to further review, at a level considered
appropriate in light of the duties and responsibilities of such officer's
position, the tenure and experience of the individual officer in such position,
and the levels of compensation paid to members of senior management who are not
executive officers. Such officer's compensation currently is below the 50th
percentile of compensation paid to officers holding equivalent positions at the
comparator companies. Subject to the achievement of Company and individual
performance goals, the Committee has recommended, based on the recommendation of
the Company's CEO and COO, and the recommendation embodied in the Hewitt study
that compensation for the Company's CFO, as well as for other senior members of
management who are not executive officers, transition to a compensation
structure similar to that established for the CEO and COO.
Specific elements of the Company's new compensation program include: (a)
the Company's Short Term Incentive Plan, under which officers and other key
employees are eligible for, and annual bonuses are earned based on, the current
year's performance as compared to business and financial goals for that year
(annual goals for 1995 were established by the Compensation Committee prior to
or during the first quarter of the year) and (b) the Key Employee Stock
Incentive Plan, which authorizes the Compensation Committee to make grants of
stock options and restricted stock. Stock options are granted with an exercise
price equal to the market price of the Company's Common Stock on the date of
grant and generally vest over four years. This approach is designed to increase
stockholder value over the long term since the full benefit of the compensation
package generally cannot be realized unless stock price appreciation occurs over
a number of years. In determining the number of options awarded, the
Compensation Committee may also consider the amount and terms of options already
held by management. The Compensation Committee believes that significant equity
interests in the Company, held by the Company's management, more closely align
the interest of stockholders and management.
The Committee believes that disclosure of actual targets under the STIP
could adversely affect the Company since, among other things, such projections
are not otherwise publicly disclosed and could place the Company at a
competitive disadvantage with respect to hiring and retaining key employees and
could potentially expose the Company to claims by third parties based on such
projections, especially since such
11
<PAGE> 15
projections are not intended as a predictor of future performance on which the
public should rely. The STIP is subject to adjustment based on, among other
things, adjustments to scheduled production runs and other non-anticipated
events, and the Company may adjust the STIP, including targets and utilized
criteria, at such time or times as the Company, in its sole discretion,
determines that the original projections or the bases therefor were materially
incorrect. Such adjustment could adversely affect the deductibility of amounts
awarded under the STIP.
As one of the factors in its review of compensation matters, the
Compensation Committee considers the anticipated tax treatment to the Company
and to the executives of various payments and benefits. Some types of
compensation payments and their deductibility depend upon the timing of an
executive's vesting or exercise of previously granted rights. Further,
interpretations and changes in the tax laws and other factors beyond the
Compensation Committee's control also affect the deductibility of compensation.
For these and other reasons, the Compensation Committee did not in 1994, and in
future years will not necessarily, limit executive compensation to that
deductible under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"). The Compensation Committee will, however, consider various
alternatives to preserving the deductibility of compensation payments and
benefits to the extent reasonably practicable and to the extent consistent with
its other compensation objectives. For example, both the Key Employee Stock
Incentive Plan and the Performance Goals for Named Executive Officers under the
Short Term Incentive Plan are being submitted to the stockholders for their
approval to seek to qualify stock options and cash payments under such
respective plans as performance-based compensation exempt from limitations on
deductibility under Section 162(m) of the Code. Vesting of restricted stock
grants can also be deferred by the Compensation Committee to limit the amount of
non-deductible compensation attributable to the vesting of restricted stock
should the value of such compensation, along with other non-deductible
compensation, exceed the deductibility limitation.
In determining the prospective compensation of Mr. Fong, the Compensation
Committee met with him to evaluate his performance and the performance of the
Company. Factors considered by the Compensation Committee focus on the
performance of the Company and the attainment of financial and business goals.
Specific objectives include those which form the basis for awards under the
Short Term Incentive Plan. The Compensation Committee also considered Mr. Fong's
individual accomplishments, including his efforts in bringing about the
acquisition of the Sports Subsidiaries by the Company, his effective leadership
in expanding the Company's core products, fashioning the Company's working
capital structure and assembling and retaining a high quality management team.
In accordance with the compensation philosophy and process described above,
and in recognition of the individual accomplishments described in the preceding
paragraph, and in the overall performance of the Company over the past five
years as shown in the Performance Graph, the Compensation Committee approved Mr.
Fong's new compensation package. Such package includes a five-year employment
agreement with an annual base salary of $600,000, the grant of 375,000 shares of
restricted Common Stock which vest five years from the date of grant, the award
of options to acquire 750,000 shares of Common Stock, and the right to earn a
cash bonus under the Short Term Incentive Plan in 1995 of 65% of his base salary
assuming the performance goals are met under such plan.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:
Louis J. Conti
James H. Rand
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<PAGE> 16
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total shareholder return on Common Stock with the cumulative total
return, assuming reinvestment of dividends, of (i) the Standard & Poor's 500
Stock Index, (ii) the Leisure Time Index and (iii) Huffy Corp.
<TABLE>
<CAPTION>
Roadmaster
Measurement Period Industries, S&P 500 In- Leisure Time
(Fiscal Year Covered) Inc. dex Huffy Corp. Inde x
<S> <C> <C> <C> <C>
1989 100.00 100.00 100.00 100.00
1990 46.10 96.90 81.41 56.28
1991 69.24 126.42 182.91 83.10
1992 164.07 136.05 136.06 98.16
1993 353.73 149.76 157.64 106.81
1994 297.37 151.74 130.48 103.73
</TABLE>
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<PAGE> 17
EXECUTIVE COMPENSATION AND OTHER INFORMATION
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning compensation received
by the Company's Chief Executive Officer and its two other executive officers in
1994 for services rendered in all capacities (including service as a director or
as an officer or director of the Company's subsidiaries) during the Company's
last three years during which the Named Executive Officer was an executive
officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------- ---------------------------------------
OTHER RESTRICTED
NAME AND ANNUAL STOCK ALL OTHER
PRINCIPAL POSITION BONUS COMPEN- AWARD(S) OPTIONS/ COMPENSATION
AT DECEMBER 31, 1994 YEAR SALARY ($) SATION ($) SARS (#) ($)
- - ------------------------------------------ ---- ------- ------- ------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Henry Fong................................ 1994 71,154(1) 0 -- 1,453,125 (2) 750,000 (3) 1,208,500(4)
President and Chief Executive Officer 1993 35,000(1) 0 -- 0 0 143,667(5)
1992 30,000(1) 0 -- 0 1,576,705(6) 372,532(7)
Edward E. Shake........................... 1994 228,520(1) 67,000 -- 1,089,844 (2) 281,250 (3) 372,532(8)
Chief Operating Officer 1993 195,200(1) 168,000 -- 0 0 293,541(9)
1992 170,000(1) 190,000 -- 0 826,935 12,316(10)
Jeff L. Hinton(11)........................ 1994 70,333 10,500 -- 0 20,000 (3) 65,886(12)
Vice President and Chief Financial 1993 -- -- -- -- -- --
Officer 1992 -- -- -- -- -- --
</TABLE>
- - ---------------
(1) Includes $30,000 for Mr. Fong and $30,000 for Mr. Shake in 1994, $35,000
for Mr. Fong and $35,200 for Mr. Shake in 1993 and $30,000 for Mr. Fong and
Mr. Shake in 1992 for their services as directors of the Company and its
subsidiaries. Effective October 1994, the Company revised its director
compensation policy such that only non-employee directors are eligible to
receive compensation for their service as directors.
(2) Represents the value of restricted stock granted to the named officer
subject to approval of the KESIP by the Company's stockholders. Shares vest
on the fifth anniversary of the date of grant, subject to certain
accelerated vesting rights, including in the event of a Change in Control
of the Company. On December 31, 1994, Mr. Fong and Mr. Shake held 375,000
and 302,250 shares, respectively, of restricted stock valued at $1,359,375
and $1,095,652, respectively, based on the closing sales price of the
Common Stock on the New York Stock Exchange on the last business day prior
to such date.
(3) Represents the number of options granted to the named officer subject to
approval of the KESIP by the Company's stockholders. Twenty percent (20%)
of the total options granted vested as of the date of grant and twenty
percent (20%) vest on each anniversary of the initial date of grant.
(4) Consists of partial payments for services in 1993 rendered in connection
with the successful completion of the offerings for the Company's
Convertible Subordinated Debentures (the "Debenture Offering") and its
Senior Subordinated Notes (the "Notes Offering") and the acquisition of the
Flexible Flyer division of Par Industries, Inc. (the "Flexible
Acquisition"). Payment of the foregoing amount had not been deferred at the
election of the named officer. See footnote 5 below. Excludes $974,400
awarded for the named officer's services in connection with the successful
acquisition of the assets of American Playworld and in negotiating the
Company's 1994 revolving credit facility. At December 31, 1994, payment of
such award had been deferred. Excludes $595,000 payable to the named
officer, subject to conditions subsequent, for services rendered in
connection with activities leading to the acquisition of the Sports
Subsidiaries. As of December 31, 1994, such payment was contingent on the
assimilation of the Sports Subsidiaries into the Company. Also excludes a
one-time award of $510,000 approved by the Company's Board of Directors in
1994, payable in January 1995, subject to the named officer's continued
employment at such time, for services to be performed by Mr. Fong which are
expected to benefit the Company in 1995 and beyond. Payment of the deferred
amounts were not deferred at the election of the named officer.
14
<PAGE> 18
(5) Includes $66,667 earned in 1992 in connection with activities lending to a
recapitalization of the Company's financial structure, but not paid until
1993. In 1993, Mr. Fong earned $2,120,685 for services rendered in
connection with the successful completion of the Debenture Offering, the
Notes Offering and the Flexible Flyer Acquisition. Of such sum, $77,000 was
paid in 1993. Payment of the deferred amount was not deferred at the
election of the named officer.
(6) Includes warrants to purchase 1,276,705 shares of Common Stock issued to
Mr. Fong, who transferred 1,066,705 of such warrants to a revocable trust
for the benefit of his minor children and 210,000 to unrelated third
parties, in each case, before their exercise price was established. Of such
warrants, 1,100,000 were repriced after transfer and the number of warrants
awarded is shown without giving effect to the cancellation and reissuance
of such 1,100,000 warrants.
(7) Consists of payments for services rendered in connection with activities
leading to a recapitalization of the Company's financial structure.
Excludes $66,667 earned in 1992 but not paid until January 1993. Such
$66,667 was not deferred at the election of the named officer.
(8) Includes $367,500 awarded in 1994 for the named officer's services in
connection with the acquisition of the assets of American Playworld and in
negotiating the Company's 1994 revolving credit facility. Also includes
$1,421 representing the Company's matching contribution under its 401(k)
Plan and $3,611 representing the market value of 996 shares allocated to
Mr. Shake pursuant to the ESOP. Excludes a one-time award of $100,000
approved by the Company's Board of Directors in 1994, payable in January
1995, subject to the named officer's continued employment at such time, for
services to be performed by Mr. Shake which are expected to benefit the
Company in 1995 and beyond. Also excludes $60,000 payable to the named
officer, subject to conditions subsequent, for activities leading to the
acquisition of the Sports Subsidiaries. As of December 31, 1994, such
payment was contingent on the assimilation of the Sports Subsidiaries into
the Company. Payment of the deferred amounts were not deferred at the
election of the named officer.
(9) Includes $259,019 earned in 1993 in connection with the successful
completion of the Debenture Offering and the Flexible Acquisition. Also
includes $1,852 representing the Company's matching contribution under its
401(k) Plan and $6,617 representing the market value of 1,963 shares
allocated to Mr. Shake pursuant to the ESOP. For each period indicated, all
of Mr. Shake's ESOP shares are fully vested pursuant to the terms of the
ESOP. Also includes $26,053 in interest forgiven on a loan from the Company
to Mr. Shake described under "Certain Transactions." Excludes $262,500
earned in 1993 in connection with the successful completion of the Notes
Offering payable by the Company on or before December 31, 1995 subject to
compliance with various debt covenants and internal cash management
practices. Payment of the deferred amount was not deferred at the election
of the named officer.
(10) Includes $750 representing the Company's matching contribution under its
401(k) Plan; and $11,566 representing the market value of 5,783 shares
allocated to Mr. Shake pursuant to the ESOP.
(11) Mr. Hinton became an executive officer of the Company upon his appointment
as Vice President and Chief Financial Officer. Accordingly, only
compensation information for 1994 for Mr. Hinton is reported.
(12) Includes $62,120 awarded in 1994 for the named officer's services in
negotiating the Company's 1994 revolving credit facility. Includes $3,566
representing the market value of 983 shares allocated to Mr. Hinton
pursuant to the ESOP. Excludes $27,000 payable to the named officer,
subject to conditions subsequent, for activities leading to the acquisition
of the Sports Subsidiaries. As of December 31, 1994, such payment was
contingent on the assimilation of the Sports Subsidiaries into the Company.
Also excludes a one-time award of $70,000 approved by the Company's Board
of Directors in 1994, payable in January 1995, subject to the named
officer's continued employment at such time, for services to be performed
by Mr. Hinton which are expected to benefit the Company in 1995 and beyond.
Payment of the deferred amounts were not deferred at the election of the
named officer.
STOCK PLANS
In October 1994, the Board of Directors adopted a Key Employee Stock
Incentive Plan pursuant to which, among other things, up to 3,750,000 options to
purchase shares of Common Stock or awards of restricted stock or a combination
thereof may be granted to the Company's key employees. Options granted
15
<PAGE> 19
under the KESIP are at option prices established by the Compensation Committee
equal to the fair market value on the date of grant. Options for 1,031,250
shares were issued to two of the Company's executive officers in December 1994
at an exercise price of $4.00 per share. The exercise of the options granted
pursuant to the KESIP is subject to certain vesting requirements set forth in
each option grant. The KESIP is subject to stockholder approval.
The following table sets forth certain information concerning options which
were granted in 1994 to the Company's Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL VALUE AT
---------------------------------------------- ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK PRICE
OPTIONS APPRECIATION
GRANTED TO FOR OPTION TERM(3)
OPTIONS EMPLOYEES EXERCISE -----------------------------
GRANTED IN FISCAL PRICE EXPIRATION 0% 5% 10%
NAME (#)(1)(2) YEAR ($/SH) DATE ($) ($) ($)
- - ----------------------------- --------- ---------- -------- ---------- --- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Henry Fong................... 750,000 43.0% 4.00 12/07/04 0 1,920,000 4,830,000
Edward E. Shake.............. 281,250 16.1% 4.00 12/07/04 0 720,000 1,811,250
Jeff L. Hinton............... 20,000 1.1% 4.00 12/07/04 0 51,200 128,800
</TABLE>
- - ---------------
(1) Options granted in 1994 under the KESIP have a ten year term and vest
ratably over a four year period beginning with the date of grant.
(2) Each option granted under a KESIP also becomes exercisable upon the
occurrence of a defined recapitalization or change in control or upon the
death or permanent disability of such officer. None of the options
described above are "incentive stock options" as defined in the Code.
(3) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Common Stock and overall market conditions. There can be
no assurance that the amounts reflected in these columns will be achieved
or if achieved will exist at the time of any option exercise.
The following table sets forth certain information concerning unexercised
options held at December 31, 1994 by the Named Executive Officers listed in the
Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES (1)
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE FY-END(#)(2) FY-END($)(3)
NAME EXERCISE(#) REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - --------------------------------- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Henry Fong....................... -- -- 390,000/600,000 514,800/0
Edward E. Shake.................. 40,000 75,800 382,024/555,774 749,796/755,396
Jeff L. Hinton................... -- -- 25,000/22,000 47,295/12,870
</TABLE>
- - ---------------
(1) Options herein includes stock warrants.
(2) Includes options vested under the KESIP as of the date of grant but subject
to stockholder approval.
(3) Based on the closing sales price for the Common Stock as reported on the New
York Stock Exchange on December 30, 1994 of $3.625 per share.
PENSION PLAN
The Roadmaster Corporate Retirement Benefit Plan for Salaried Employees
(the "Pension Plan"), a noncontributory defined benefit plan, was amended
effective December 31, 1989 to provide that no hours of service, years of credit
service, compensation increase or other service performed after December 31,
1989 would be counted for any purpose under the Pension Plan, so that all
benefit accruals under the Pension Plan
16
<PAGE> 20
would cease effective as of December 31, 1989 and all participants in the
Pension Plan would be fully vested in their accrued benefits effective as of
December 31, 1989.
Mr. Shake is the only executive officer eligible to participate in the
Pension Plan. Benefits provided under the Pension Plan for Mr. Shake are frozen
at $7,503 per year. Such benefits are payable at age 65 (normal retirement age).
Benefits provided under the Pension Plan are in addition to normal Social
Security retirement benefits and maximum benefits under the Pension Plan
currently are limited to $115,641 for each participant.
EMPLOYMENT AGREEMENTS
In connection with the acquisitions of the Sports Subsidiaries, Henry Fong
and Edward E. Shake each entered into five year employment agreements with the
Company. Certain provisions of such Employment Agreements are discussed below.
The Employment Agreements are subject to automatic renewal for additional one
year terms unless terminated by either party upon thirty days written notice
prior to the end of the initial or successive terms.
The Employment Agreements for Mr. Fong and Mr. Shake provide that for all
services rendered under such agreements, the Company will pay Mr. Fong and Mr.
Shake a salary of $600,000 per year and $450,000 per year, respectively. In
addition, the Company will provide Mr. Fong and Mr. Shake with such other
benefits as may, from time to time, be approved by the Board of Directors. Mr.
Fong and Mr. Shake are required to devote their full time, attention and
energies to the business of the Company, except that Mr. Fong may continue to
serve as President and a director of Equitex and may pursue such other business
investments (other than as an employee) as he shall elect as long as such duties
and pursuits do not interfere with his duties to the Company and are not in
competition, either directly or indirectly, with the activities of the Company.
Mr. Fong and Mr. Shake have agreed to certain covenants with respect to
confidential information of the Company and have agreed that during the term of
their respective employment and for a period of twenty-four months thereafter,
irrespective of the manner or reason for termination of their employment, that
they will not engage in, supervise, assist or own any interest in any entity
engaged in substantially the same business as the Company in the geographic
areas in which the Company operates.
The Employment Agreements may be terminated "for cause" by the affirmative
vote of a majority of the Board of Directors entitled to vote thereon. "Cause"
is generally defined as (i) conviction with respect to any felony; (ii) a
willful refusal by the employee to perform material duties and responsibilities
required in connection with his employment; (iii) a breach by the employee of
any covenant, warranty, representation or condition in his Employment Agreement;
(iv) substantial disability for a specified period or (v) any misappropriation,
theft or embezzlement of funds of the Company or any other act of fraud or
deceit.
Each Employment Agreement may be terminated without cause by the
affirmative vote of two-thirds of the members of the Company's entire Board of
Directors if the Company is "profitable" and by the affirmative vote of a
majority of the Board if the Company is not "profitable." For purposes of the
Employment Agreements, the Company shall be deemed to be profitable if the most
current audited consolidated financial statements of the Company and its
subsidiaries for the preceding fiscal year reflect positive net income from
continuing operations calculated in accordance with generally accepted
accounting principles.
In the event Mr. Fong's Employment Agreement is terminated without cause
while the Company is profitable, the Company is obligated to continue to pay Mr.
Fong all compensation payable under his Employment Agreement during the
remainder of its then current term. In the event Mr. Shake's Employment
Agreement is terminated without cause while the Company is profitable, the
Company is obligated to continue to pay Mr. Shake all compensation payable under
his Employment Agreement for the longer of the remainder of its then current
term or twenty-four months.
17
<PAGE> 21
AGENDA ITEM TWO
APPROVAL OF THE COMPANY'S KEY EMPLOYEE
STOCK INCENTIVE PLAN
GENERAL
The Board of Directors, on the recommendation of the Compensation
Committee, adopted the Key Employee Stock Incentive Plan as a vehicle to provide
additional incentives to, as a means of further encouraging Common Stock
ownership by the Company's officers, senior management and other key employees.
The KESIP has a ten year term and authorizes the grant of awards for up to
3,750,000 options to purchase Common Stock or shares of restricted Common Stock
or a combination thereof. Options may be awarded in the form of incentive stock
options, non-qualified stock options or both. The maximum aggregate number of
shares for which options may be granted over any five fiscal year period or that
may vest over any five fiscal year period of the Company pursuant to any option
held by a Named Executive Officer is 1,000,000 shares. The maximum aggregate
number of shares issued pursuant to an award of restricted stock that may be
granted over any five fiscal year period or that may vest over any five fiscal
year period of the Company pursuant to any award of restricted stock to a Named
Executive Officer is 500,000 shares. The KESIP will be administered by the
Compensation Committee, which shall have the full power to select qualified
employees who will participate in the KESIP, determine the size and types of
awards, determine the terms and conditions of awards in a manner consistent with
the KESIP, construe and interpret the KESIP and any agreement or instrument
entered into under the KESIP, establish, amend or waive rules and regulations
for the KESIP's administration and, subject to certain conditions, the terms and
conditions of any outstanding award to the extent such terms and conditions are
within the discretion of the Compensation Committee. The Board may, at any time,
and from time to time, alter, amend, suspend or terminate the KESIP in whole or
in part; provided, however, that no amendment which requires stockholder
approval in order for the KESIP to continue to comply with Rule 16b-3 under the
Exchange Act will be effective unless approved by the Company's stockholders.
The option price for each grant of an option under the KESIP is such price as
the Compensation Committee shall establish; provided, however, that such option
price must be equal to at least one hundred percent (100%) of the Fair Market
Value of a share of Common Stock on the date the option is granted. In
connection with the grant of restricted stock awards, the Compensation Committee
may provide that no initial investment will be required by a plan participant.
Persons eligible to participate in the KESIP must be full-time, non-union
employees of the Company. Option awards under the KESIP made to date vest twenty
percent on the date of grant and twenty percent on each anniversary thereof.
Restricted Common Stock grants made to date under the KESIP vest at the end of
five years from the date of grant. All awards under the KESIP are subject to
accelerated vesting in the event of a "Change in Control" of the Company.
"Change in Control of the Company" means: (i) a transfer of all or substantially
all of the assets of the Company; (ii) if any "Person" or "Group" of Persons
either alone or in conjunction with its "Affiliates," other than a person or
group consisting solely of Management Stockholders (as defined below) or their
"Affiliates," becomes the beneficial owner, directly or indirectly, of voting
securities of the Company representing, or securities convertible into, or
exchangeable for, securities representing, more than fifty percent (50%) of the
combined voting power of the Company's then outstanding securities eligible to
vote for the election of directors; or (iii) if any "Person" or "Group" of
Persons either alone or in conjunction with its "Affiliates," acquires the right
or power to nominate and/or control, directly or indirectly, whether through the
ownership of voting securities of the Company, by contract or otherwise, a
majority of the members of the Company's Board of Directors without having first
received the prior written consent of at least two-thirds (including a majority
of the Management Directors (as defined below)) of the members of the Board of
Directors of the Company then in office prior to such person or group of persons
acquiring such right or power. "Management Directors" or "Management
Stockholders" means Henry Fong or Edward E. Shake. In the event of a Change in
Control of the Company, outstanding options become immediately exercisable and
all rights to restricted stock grants immediately vest and forfeiture
limitations cease. Directors who are not otherwise employed by the Company are
not eligible to participate in the KESIP. All awards made prior to approval of
the KESIP by stockholders are subject to forfeiture in the event the KESIP is
not approved by the stockholders. As participants in the KESIP, the Company's
executive officers, Messrs. Fong, Shake and Hinton, have an
18
<PAGE> 22
interest in its adoption. As of April 20, 1995, the closing price of the Common
Stock on the New York Stock Exchange was $2.625 per share.
This summary description of the Key Employee Stock Incentive Plan does not
purport to be complete and is qualified in its entirety by reference to the full
text of the plan which is set forth as Exhibit A hereto. For a discussion of the
Company's compensation policies in general and as they relate to the KESIP, see
also the Compensation Committee Report set forth above.
The following table sets forth certain information concerning grants of
options to purchase Common Stock and awards of restricted stock granted under
the KESIP through the date of this Proxy Statement. Awards that may be received
by or allocated to other eligible participants are not yet determinable.
AWARDS UNDER KEY EMPLOYEE STOCK INCENTIVE PLAN(1)
<TABLE>
<CAPTION>
NO. OF SHARES NO. OF SECURITIES
OF RESTRICTED UNDERLYING OPTIONS EXERCISE
NAME AND POSITION STOCK GRANTED DOLLAR VALUE(2) GRANTED PRICE($/SH)(3)
- - -------------------------------------- ------------- --------------- ------------------ --------------
<S> <C> <C> <C> <C>
Henry Fong............................ 375,000 $ 1,500,000 750,000 $ 4.00
President and Chief Executive
Officer
Edward E. Shake....................... 281,250 $ 1,125,000 281,250 $ 4.00
Chief Operating Officer
Jeff L. Hinton........................ 0 0 20,000 $ 4.00
Vice President and Chief Financial
Officer
All executive officers as a group..... 656,250 $ 2,625,000 1,051,250 $ 4.00
All employees (other than executive
officers) as a group................ 0 0 577,500 $ 4.00
</TABLE>
- - ---------------
(1) All awards granted subject to stockholder approval of the KESIP;
Non-Employee Directors are ineligible to participate in the KESIP.
(2) As of December 7, 1994, the date of the award, based on the closing price of
the Common Stock on the New York Stock Exchange of $4.00.
(3) The exercise price for all options granted to date is based on the Fair
Market Value of the Common Stock on December 7, 1994.
FEDERAL INCOME TAX CONSEQUENCES OF THE OPTION COMPONENT OF THE KEY EMPLOYEE
STOCK INCENTIVE PLAN
Option awards to date have been in the form of non-qualified stock options.
The award of options in the form of non-qualified stock options does not result
in taxable income to the optionee or a deduction to the Company. The Optionee
will, however, recognize income after the exercise of such stock option when the
shares of Common Stock issuable upon such exercise are transferrable or are not
subject to a substantial risk of forfeiture. At such time as the optionee
recognizes taxable income, the excess of the fair market value of the shares
acquired over the option price paid for the shares will be taxable to the
optionee as ordinary income and the Company concurrently may claim a
corresponding deduction for compensation paid in the same amount at the same
time as compensation is taxed to the optionee, provided the Company makes a
proper tax withholding with respect to the exercise. Upon a subsequent
disposition of the shares, any difference between the fair market value of the
shares at the time such option was exercised and the amount realized upon their
disposition would be eligible for treatment as long-term or short-term capital
gain or loss if the minimum holding period is met and depending on the length of
time the shares were held prior to disposition. Incentive stock options granted
under the KESIP are intended to be incentive stock options as defined in Section
422A of the Code. Under the provisions of Section 422A of the Code, neither the
optionee nor the Company will realize income, gain, deduction, or loss upon the
grant or exercise of an incentive stock option. An optionee will be taxed only
when the stock, which was acquired upon the exercise of the option, is sold or
otherwise disposed of in a taxable transaction. If, at the time of such sale or
disposition, the optionee has not held the
19
<PAGE> 23
stock for two years from the date that the option was granted and one year from
the date of exercise, the optionee may realize ordinary income (rather than
capital gain) and the Company will be entitled to a deduction for the amount of
ordinary income realized by the optionee.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ADOPTION OF THE
KEY EMPLOYEE STOCK INCENTIVE PLAN.
AGENDA ITEM THREE
APPROVAL OF THE PERFORMANCE GOALS UNDER
THE COMPANY'S SHORT-TERM INCENTIVE PLAN
The Board of Directors recommends approval by the stockholders of the
performance goals for Named Executive Officers contained in the Short-Term
Incentive Plan as adopted by the Company's Compensation Committee. These
performance goals will govern the award of annual bonuses to the Company's Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer and
generally other future participants in the plan who are Named Executive Officers
of the Company. Similar performance goals are being utilized for other
participants in the STIP, subject to a subjective component for non-Named
Executive Officers. Approval of the performance goals for Named Executive
Officers is being recommended to preserve, for fiscal years 1995 and beyond, the
Company's federal tax deduction for certain compensation paid to any Named
Executive Officer, by complying with provisions of Section 162(m) of the Code
enacted as part of the Omnibus Budget Reconciliation Act of 1993. These
provisions and the proposed regulations issued under Code sec. 162(m) by the
United States Department of Treasury could limit the Company's federal tax
deduction for compensation paid to its Named Executive Officers to $1,000,000
each, unless compensation in excess of this amount is based on the achievement
of performance goals and eligibility requirements that have been approved by a
committee of outside directors and approved by the Company's stockholders. The
STIP is intended to be, and the Compensation Committee believes that the STIP
qualifies as, performance-based compensation and accordingly that all sums paid
thereunder should be deductible by the Company. Under the STIP, the Compensation
Committee for each plan year establishes ranges of performance goals which
correspond to various levels of award opportunities. Each performance goal range
includes a performance target at which one hundred percent (100%) of the target
incentive award is earned. In addition, each performance goal range includes
levels of performance above and below the one hundred percent (100%) performance
level. In 1995, the STIP will allow the Company's CEO, COO and CFO, each to earn
a targeted bonus of 65%, 65% and 40% of their respective base salary based on
the achievement by the Company of Company targeted earnings and targeted income.
The actual amount of the bonus is subject to increase or decrease to minimum and
maximum thresholds based on performance against target which would allow such
officers to earn actual bonus amounts in a range from 50% to 175% of their
targeted bonus. In order to comply with a "safe harbor" under proposed
regulations adopted under Code sec. 162(m), the Compensation Committee will
annually establish Company earnings and income thresholds. Awards under the STIP
vest prorata upon a Change in Control of the Company. As participants in the
STIP, Messrs. Fong, Shake and Hinton, have an interest in the adoption of the
Plan. If the stockholders do not approve the performance goals under the Plan,
the Company will not make any payments to its Named Executive Officers
thereunder and will consider other compensation arrangements which may or may
not involve deductible compensation. With respect to awards other than to Named
Executive Officers, the Compensation Committee has the authority to exercise
subjective discretion in the determination of final awards as well as the
authority to delegate the ability to exercise subjective discretion in this
respect. For a discussion of the Company's compensation policies in general and
as they relate to the STIP, see also the Compensation Committee Report set forth
above.
The actual benefits to be paid under the STIP are not presently
determinable. Prior to awarding any bonuses for the 1995 fiscal year, and all
subsequent years covered by the STIP, the Compensation Committee will evaluate
the performance of the Company to certify that the performance goals have been
met.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE COMPANY'S
PERFORMANCE GOALS UNDER ITS SHORT-TERM INCENTIVE PLAN FOR ITS NAMED EXECUTIVE
OFFICERS.
20
<PAGE> 24
DIRECTORS' FEES AND COMPENSATION
Cash Compensation. In October 1994, the Company adopted a new policy
concerning the payment of fees and compensation to its directors. Annual amounts
payable under the former and the new policies were prorated as of the adoption
date.
Pursuant to the Company's new director compensation policy, each director
who is not an employee of the Company is paid: (i) an annual retainer of
$20,000, payable in equal monthly installments; (ii) $1,000 for each Board
meeting attended and (iii) $1,000 per committee meeting attended for committee
meetings conducted on a date different from the date of a meeting of the Board
of Directors. In addition, each non-employee director is eligible, pursuant to
the Company's Directors Restricted Stock Plan, to receive each year that number
of shares of Common Stock having a Fair Market Value of $10,000 upon annual
reelection to the Board. The award of restricted stock pursuant to the Directors
Restricted Stock Plan is subject to the approval of such plan by the Company's
stockholders. The Company and each of its subsidiaries continue to reimburse all
of their respective directors' Company related and Company approved travel and
entertainment expenses, including their expenses in attending meetings of the
respective boards of directors or committees thereof. Except as described in the
previous sentence, in connection with the adoption of the Company's new director
compensation policy, the Company's subsidiaries no longer provide separate
compensation to any of their directors.
Pursuant to the terms of the Stockholders Agreement entered into in
connection with the acquisition of the Sports Subsidiaries on December 6, 1994,
the Company paid $6,250 to each of Messrs. Phillips, Long, Marshall and Sanders
representing the difference between the per share exercise price of options
granted to the Company's other non-employee directors under the 1994 Directors
Stock Option Plan and the per share exercise price of the options granted to
Messrs. Phillips, Long, Marshall and Sanders under such plan.
Prior to October 1994, directors of the Company served without cash
compensation for their services; however, then directors, who also were
directors of certain of the Company's subsidiaries, were eligible to receive
compensation pursuant to the director compensation policies of such
subsidiaries. Compensation as a director of such subsidiaries was not contingent
on service as a director of the Company.
Prior to October 1994, each director of RMC (Messrs. Fong, Shake, Conti,
Rand and Bradley) was eligible to receive $5,000 for each special or regularly
scheduled bi-monthly meeting of RMC's board of directors. Directors of certain
other subsidiaries of the Company were eligible to receive $200 for each board
of directors' meeting of either such company which the director attended. No
directors' fees were paid by such subsidiaries in 1994.
1994 Directors' Stock Option Plan for Non-Employee Directors. In July
1994, the Company adopted its 1994 Directors' Stock Option Plan for Non-Employee
Directors (the "DSOP"). The DSOP provides for the grant of 25,000 non-qualified
stock options to each non-employee director at a price of one hundred percent
(100%) of the Fair Market Value of the Company's Common Stock as of the date of
grant. Options granted under the DSOP vest one hundred percent (100%) upon grant
but may not be exercised for six months after the date of grant if held by a
person subject to Section 16 of the Exchange Act. Options granted under the DSOP
expire on the earlier of ten years from the date of grant or ninety days after
the optionee ceases to be an Eligible Director (as defined) for any reason other
than death. In the event the optionee ceases to be an Eligible Director because
of the death of the optionee, options granted to the optionee expire six months
after the death of such person, unless exercised prior to such time by the
optionee's estate. The DSOP authorizes the grant of options to purchase an
aggregate of 175,000 shares of Common Stock, all of which options had been
issued as of December 16, 1994.
21
<PAGE> 25
AGENDA ITEM FOUR
APPROVAL OF THE COMPANY'S DIRECTORS
RESTRICTED STOCK PLAN
GENERAL
In October 1994, the Board of Directors adopted a new multi-year Directors
Restricted Stock Plan for its outside directors as a means of encouraging
ownership of the Company's Common Stock and to more closely align the interests
of its outside directors with the interests of the Company's stockholders in
general. The DRSP is intended to be a self-administering plan which permits the
participation of all non-employee directors. The DRSP provides that during the
term of such plan, each individual who is elected to serve as a non-employee
director will, on the day immediately following the non-employee director's
election to the Board, be granted restricted stock having a value on such date
of $10,000. The number of shares to be granted is calculated by dividing $10,000
by the Fair Market Value (as defined) of the Common Stock on the date of grant.
Annual grants in the same amount will be made each time an individual is elected
or re-elected to serve as a non-employee director. Shares generally vest upon
the last day of the director's term for which shares were awarded; provided,
however, that all unvested shares will become one hundred percent (100%) vested
upon the death, disability or retirement of the participant or upon the
effective date of a Change in Control (as defined) of the Company. In the event
the DSRP is approved by the stockholders, shares first will be granted to the
Company's seven existing non-employee directors on June 15, 1995. A total of
87,500 shares are available for grant under the DRSP.
The DRSP may be terminated, amended or modified at any time, and from time
to time, by the Board of Directors; provided, however, that the provisions
regarding the number of shares to be awarded to non-employee directors, the
price of securities awarded and the timing of awards may not be amended more
than once within any six month period other than to comport with changes in the
Code, the Employee Retirement Income Security Act of 1974, as amended from time
to time ("ERISA") or the rules adopted pursuant to the Code or ERISA.
Without the approval of the stockholders of the Company as may be required
by the Code, Section 16 of the Exchange Act or the rules promulgated thereunder,
or the rules and regulations of the New York Stock Exchange or similar
regulatory body having jurisdiction with respect to the DRSP, no such
termination, amendment or modification may (i) increase the total number or
value of the shares which may be available for grants of awards under the DRSP
(except for certain adjustments in the case of mergers, reorganizations,
consolidations, recapitalizations and similar events), (ii) change the class of
participants eligible to participate in the DRSP or (iii) materially increase
the costs of the DRSP or materially increase the benefits accruing to
participants therein. As participants in the DRSP, Messrs. Conti, Rand, Bradley,
Phillips, Long, Marshall and Sanders, have an interest in its adoption. As of
April 20, 1995, the closing price of the Company's Common Stock on the New York
Stock Exchange per share was $2.625.
This summary description of the Directors Restricted Stock Plan does not
purport to be complete and is qualified in its entirety by reference to the full
text of the plan which is set forth as Exhibit B hereto.
The number of shares of Common Stock that will be received by or allocated
to a non-employee director under the DRSP is not determinable. The number of
shares of Common Stock that would have been received
22
<PAGE> 26
by or allocated to the Company's directors as of June 15, 1994 if the DRSP had
been in effect, and if each of the current directors had been elected or
re-elected to the Board as of such date, is set forth in the table below.
HYPOTHETICAL INITIAL PLAN BENEFITS UNDER
THE DIRECTORS RESTRICTED STOCK PLAN
<TABLE>
<CAPTION>
NO. OF SHARES
OF RESTRICTED
NAME AND POSITION(1) STOCK GRANTED(2) DOLLAR VALUE
- - ------------------------------------------------------------------ ---------------- ------------
<S> <C> <C>
Louis J. Conti.................................................... 2,580 $ 10,000
Director
James H. Rand..................................................... 2,580 $ 10,000
Director
Stephen P. Bradley................................................ 2,580 $ 10,000
Director
John D. Phillips.................................................. 2,580 $ 10,000
Director
Clay C. Long...................................................... 2,580 $ 10,000
Director
Michael P. Marshall............................................... 2,580 $ 10,000
Director
Carl E. Sanders................................................... 2,580 $ 10,000
Director
All executive officers as a group................................. N/A N/A
All non-employee directors as a group............................. 18,060 $ 70,000
All non-executive officers employee as a group.................... N/A N/A
</TABLE>
- - ---------------
(1) Messrs. Fong and Shake are not eligible to participate in the DRSP.
(2) Awards under the DRSP are granted on the date following the directors
reelection to the Board, share numbers indicated above are based on
hypothetical grant as of June 15, 1994, the date following the previous
year based on a closing price for the Common Stock of $3.875 on such date.
AGENDA ITEM FIVE
SELECTION OF AUDITORS
Arthur Andersen LLP served as auditors of the Company during the fiscal
year ended December 31, 1994 and also have been selected by the Board of
Directors to serve as auditors for the present fiscal year. The Board of
Directors recommends to the stockholders their ratification of its selection of
Arthur Andersen LLP, independent auditors, to audit the accounts of the Company
and its subsidiaries for 1995. Accordingly, the following resolution will be
offered at the stockholders' meeting:
RESOLVED, that the appointment by the Board of Directors of Arthur Andersen
LLP, independent auditors, to audit the accounts of the Company and its
subsidiaries for 1995 be, and hereby is, ratified and approved.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will consider it a direction to select other auditors for the
subsequent year. Even if the selection is ratified, the Board of Directors, in
its discretion, may direct the appointment of a new independent accounting firm
at any time during the year, if the Board feels that such change would be in the
best interests of the Company and its stockholders.
Arthur Andersen LLP or its predecessor has served as the Company's
independent auditors since 1989.
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<PAGE> 27
A representative of Arthur Andersen LLP is expected to be present at the
Meeting, will have an opportunity to make a statement if he or she so desires to
do so, and is expected to be available to respond to appropriate questions which
stockholders might have.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION OF
ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since its inception in 1987, the Company has engaged Equitex as a
management consultant on a nonexclusive basis for an annual fee, payable in
equal monthly installments. Such annual fee was $144,000 in 1994 and has been
set at $144,000 for 1995. This engagement is renewable annually. Mr. Fong is the
President, a director and approximately a 5% shareholder of Equitex. Equitex is
a business development company which invests in start up or restructuring
companies by providing these companies with management consulting expertise and
interim financing, often accepting equity positions in lieu of all or part of
its fees.
The Company retains office space in Englewood, Colorado which formerly
served as its executive offices. Such space is provided to the Company by
Equitex which, in turn, leases such space for $2,500 per month from a
partnership of which Mr. Fong and his wife are the sole partners. Since 1991,
the Company has paid approximately 50% of the lease, payments and costs of
telephone services. Pursuant to such cost-sharing arrangements, the Company made
payments to Equitex of $80,175 in 1994. The Company believes these terms and its
portion of the underlying lease payment to be no less favorable than those which
could be obtained from non-affiliated parties in the same area.
In connection with the exercise of warrants in February 1993 under the
November 1992 Stock Purchase Plan, the Company made loans to 21 employees to
enable such employees to exercise their warrants. Such loans included a $224,311
loan to Mr. Shake to purchase 165,387 shares of Common Stock. During 1994, the
largest principal amount owed by Mr. Shake was $224,311. The principal amount of
Mr. Shake's loan as of April 20, 1995 was $224,311. Such loan is secured by the
Common Stock obtained by Mr. Shake pursuant to the warrant exercise and
currently bears interest at the rate of prime plus 2% per annum. Such loan
currently matures February 24, 1996.
In April 1994, the Company purchased from Security Pacific Business Credit
Corporation all of its right, title and interest in an approximately $5,000,000
loan made by such lender to Ajay Leisure Products, Inc. ("Ajay Leisure"), a
manufacturer and distributor of golf carts, bags and accessories and a wholly
owned subsidiary of Ajay Sports, Inc., a publicly traded company ("Ajay
Sports"). Such loan was purchased for approximately $5,000,000 and was secured
by all of the outstanding common stock and assets of Ajay Leisure and $1,500,000
million of such loan was guaranteed by Equitex with the guarantee secured by the
pledge of 1,000,000 shares of Common Stock. Pursuant to the terms of the loan
agreement, the Company voted the shares of Ajay Leisure and replaced the former
Ajay Leisure Board of Directors and took possession of the collateral. In 1994,
Ajay Sports redeemed the collateral by satisfying the loan obligations in full.
On December 6, 1994, the Company acquired from Actava all of the issued and
outstanding capital stock of the Sports Subsidiaries for 19,169,000 shares of
Common Stock. The purchase price was determined based on an evaluation of the
business of the Sports Subsidiaries, a fairness opinion and the results of
negotiations conducted by the Company's management under the direction and
supervision of its then Board of Directors which consisted of Messrs. Fong,
Shake, Conti, Rand and Bradley. Messrs. Phillips, Long, Marshall and Sanders
became directors of the Company as a result of such transaction. Mr. Phillips
also is the Chief Executive Officer, a director and stockholder of Actava. Mr.
Sanders was, and is, a director of Actava. Mr. Long was, and is, a partner of
the principal law firm that represented Actava in connection with such
transaction.
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<PAGE> 28
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive
officers, directors and persons who beneficially own more than ten percent of
the Common Stock to file initial reports of ownership of the Company's
securities and reports of changes in such ownership with the Securities and
Exchange Commission (the "SEC"). Persons subject to these reporting requirements
are also required by SEC regulations to furnish the Company with copies of all
Section 16(a) reports they file. Based solely on a review of copies of the SEC
reporting forms furnished to the Company and written representations from the
Company's executive officers and directors, the Company believes that during
fiscal 1994: Stephen P. Bradley did not timely file a Form 4 report upon the
grant of options to purchase 25,000 shares of Common Stock pursuant to the
Company's 1994 DSOP. Such report was inadvertently filed one day late.
AVAILABILITY OF
ANNUAL REPORT TO STOCKHOLDERS AND REPORT ON FORM 10-K
Copies of the Company's Annual Report to Stockholders for the year ended
December 31, 1994, which includes certain financial information about the
Company, are currently being mailed, together with this Proxy Statement, to the
Company's stockholders. ADDITIONAL COPIES OF SUCH ANNUAL REPORT ALONG WITH
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1994, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
(EXCLUSIVE OF DOCUMENTS INCORPORATED BY REFERENCE), ARE AVAILABLE TO
STOCKHOLDERS WHO MAKE WRITTEN REQUEST THEREFOR ADDRESSED TO: THE COMPANY
SECRETARY, ROADMASTER INDUSTRIES, INC., POST OFFICE BOX 344, RADIO TOWER AND
EAST STREET, OLNEY, ILLINOIS 62450. COPIES OF THE ANNUAL REPORT OF FORM 10-K ARE
AVAILABLE WITHOUT CHARGE. COPIES OF EXHIBITS AND BASIC DOCUMENTS FILED WITH THE
ANNUAL REPORT ON FORM 10-K OR REFERENCED THEREIN WILL BE FURNISHED TO
STOCKHOLDERS UPON WRITTEN REQUEST AND PAYMENT OF THE COMPANY'S EXPENSES IN
FURNISHING SUCH DOCUMENTS.
OTHER MATTERS
Management does not intend to present to the Meeting any business other
than the items stated in the "Notice of Meeting of Stockholders" and does not
know of any matters to be brought before the Meeting other than those referred
to above. If however, any other matters properly come before this Meeting, the
persons designated as proxies will vote on each such matter in accordance with
their best judgment.
Whether or not you expect to be at the Meeting in person, please sign, date
and return promptly the enclosed proxy. No postage is necessary if the proxy is
mailed in the United States.
STOCKHOLDER PROPOSALS
If the proxy statement relating to next year's annual meeting is released
to the Company's security holders on the anniversary of the date on which this
Proxy Statement and Form of Proxy are released, any proposal to be presented at
next year's annual meeting must be received at the principal executive offices
of the Company not later than January 14, 1996. Any such proposals should be
directed to the attention of the Secretary for consideration for inclusion in
the Company's proxy statement and form of proxy relating to the next annual
meeting. Any such proposals must comply in all respects with the rules and
regulations of the Securities and Exchange Commission and it is suggested that
proponents of any proposals submit such proposals to the Company sufficiently in
advance of the deadline by Certified Mail-Return Receipt Requested.
25
<PAGE> 29
EXHIBIT A
ROADMASTER INDUSTRIES, INC.
KEY EMPLOYEE STOCK INCENTIVE PROGRAM
<PAGE> 30
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Article 1. Establishment, Purpose and Duration........................................ A-1
Article 2. Definitions................................................................ A-1
Article 3. Administration............................................................. A-3
Article 4. Shares Subject to the Plan................................................. A-4
Article 5. Eligibility and Participation.............................................. A-5
Article 6. Stock Options.............................................................. A-5
Article 7. Restricted Stock........................................................... A-6
Article 8. Beneficiary Designation.................................................... A-7
Article 9. Deferrals.................................................................. A-7
Article 10. Rights of Employees........................................................ A-7
Article 11. Change in Control.......................................................... A-8
Article 12. Amendment, Modification, and Termination................................... A-8
Article 13. Withholding................................................................ A-8
Article 14. Indemnification............................................................ A-9
Article 15. Successors................................................................. A-9
Article 16. Legal Construction......................................................... A-9
</TABLE>
<PAGE> 31
ROADMASTER INDUSTRIES, INC.
KEY EMPLOYEE STOCK INCENTIVE PROGRAM
ARTICLE 1. ESTABLISHMENT, PURPOSE AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Roadmaster Industries, Inc., a Delaware
corporation (hereinafter referred to as the "Company"), hereby establishes an
incentive compensation plan to be known as the "Roadmaster Industries, Inc. Key
Employee Stock Incentive Program" (hereinafter referred to as the "Plan"), as
set forth in this document. The Plan permits the grant of Nonqualified Stock
Options, Incentive Stock Options and Restricted Stock.
Subject to approval by the Company's stockholders, the Plan shall become
effective as of October 25, 1994, (the "Effective Date") and shall remain in
effect as provided in Section 1.3 hereof.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote the success
and enhance the value of the Company by linking the personal interests of
Participants to those of the Company's stockholders, and by providing
Participants with an incentive for outstanding performance.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants upon whose
judgment, interest and special effort the successful conduct of its operation
largely is dependent.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective Date,
as described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Board of Directors to amend or terminate the Plan at any time
pursuant to Article 12 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Award be granted under the Plan on or after October 25, 2004.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter of the word or
words is capitalized:
2.1 "AWARD" means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options or Restricted Stock.
2.2 "AWARD AGREEMENT" means an agreement entered into by the Company and
each Participant, setting forth the terms and provisions applicable to Awards
granted under this Plan.
2.3 "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
2.4 "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company.
2.5 "CHANGE IN CONTROL" of the Company means:
(i) a transfer of all or substantially all of the assets of the
Company;
(ii) if any "Person" or "Group" of Persons (as such terms are
determined pursuant to Sections 13(d) and 14(d) of the Exchange Act and the
rules and regulations promulgated thereunder) either alone or in
conjunction with its "Affiliates" (as that term is defined in Rule 405
under the Securities Act), other than a person or group consisting solely
of Management Stockholders or their "Affiliates" (as that term is defined
in Rule 405 under the Securities Act), becomes the beneficial owner,
directly or indirectly, of voting securities of the Company representing,
or securities convertible into, or exchangeable for, securities
representing, more than fifty percent (50%) of the combined voting power of
the Company's then outstanding securities eligible to vote for the election
of Directors; or
(iii) if any "Person" or "Group" of Persons (as such terms are
determined pursuant to Section 13(d) and 14(d) of the Exchange Act and the
rules and regulations promulgated thereunder) either
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<PAGE> 32
alone or in conjunction with its "Affiliates" (as that term is defined in
Rule 405 under the Securities Act), acquires the right or power to nominate
and/or control, directly or indirectly, whether through the ownership of
voting securities of the Company, by contract or otherwise, a majority of
the members of the Company's Board of Directors without having first
received the prior written consent of at least two-thirds (including a
majority of the Management Directors) of the members of the Board of
Directors of the Company then in office prior to such person or group of
persons acquiring such right or power.
2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
2.7 "COMMITTEE" means the Compensation Committee of the Board, as specified
in Article 3 herein, appointed by the Board to administer the Plan with respect
to grants of Awards.
2.8 "COMPANY" means Roadmaster Industries, Inc., a Delaware corporation,
and its Subsidiaries, as well as any successor to any of such entities as
provided in Article 15 herein.
2.9 "DIRECTOR" means any individual who is a member of the Board of
Directors of the Company.
2.10 "DISABILITY" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan or policy or, if no such plan
or policy shall then be in effect, any physical or mental disability or
incapacity which the Committee determines would render a Participant incapable
of performing the services required of such participant for a period of at least
180 consecutive days or for other periods aggregating 180 days during any
52-week period.
2.11 "EFFECTIVE DATE" shall have the meaning ascribed to such term in
Section 1.1 hereof.
2.12 "EMPLOYEE" means any full-time, nonunion employee of the Company.
Directors who are not otherwise employed by the Company shall not be considered
Employees under this Plan.
2.13 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.14 "FAIR MARKET VALUE" shall be determined on the basis of: (i) the
average sale price of the Company's Common Stock on the applicable day on the
principal stock exchange, or the National Association of Securities Dealers'
Automated Quotation National Market System ("NASDAQ/NMS"), as the case may be,
on which such Common Stock is then listed or admitted to trading, (ii) if no
sale takes place on such day on such exchange or the NASDAQ/NMS, as the case may
be, the average of the last reported closing bid and asked prices on such day as
officially quoted on such exchange or the NASDAQ/NMS, as the case may be, (iii)
if the Common Stock is not then listed or admitted to trading on any stock
exchange or the NASDAQ/ NMS, as the case may be, the average of the last
reported closing bid and asked prices on such day in the over-the-counter
market, as furnished by the NASDAQ system or the National Quotation Bureau, Inc,
(iv) if neither such corporation at the time is engaged in the business of
reporting such prices, as furnished by any similar firm then engaged in such
business, or (v) if there is no such firm, as furnished by any member of the
National Association of Securities Dealers ("NASD") selected mutually by the
Optionee and the Company or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be selected by the
Optionee and one of which shall be selected by the Company.
2.15 "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares
granted under Article 6 herein, and which is designated as an Incentive Stock
Option and is intended to meet the requirements of Section 422 of the Code.
2.16 "INSIDER" shall mean an individual who is, on the relevant date, an
officer, director or ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act.
2.17 "MANAGEMENT DIRECTORS" or "MANAGEMENT STOCKHOLDERS" means Henry Fong
or Edward E. Shake.
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<PAGE> 33
2.18 "NAMED EXECUTIVE OFFICER" means a Participant who, as of the date of
vesting and/or payout of an Award is one of the group of "covered employees," as
defined in the regulations promulgated under Code Section 162(m), or any
successor statute.
2.19 "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.
2.20 "OFFICER" means an Employee of the Company included in the definition
of Officer under Section 16 of the Exchange Act and the rules promulgated
thereunder or other Employees designated as "Officers" by the Board.
2.21 "OPTION" means an Incentive Stock Option or a Nonqualified Stock
Option.
2.22 "OPTION PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option as determined by the Committee.
2.23 "PARTICIPANT" means an Employee who has outstanding an Award granted
under the Plan.
2.24 "PERFORMANCE-BASED EXCEPTION" means the performance-based exception
from the deductibility limitations of Code Section 162(m).
2.25 "PERIOD(S) OF RESTRICTION" means the period(s) during which the
transfer of Shares of Restricted Stock is limited in some way (based on the
passage of time, the achievement of performance goals, or upon the occurrence of
other events as determined by the Committee, at its discretion), and the Shares
are subject to a substantial risk of forfeiture, as provided in Article 7
herein.
2.26 "PERSON" means any corporation, individual, joint stock company, joint
venture, partnership, unincorporated association and, as the context shall
require, shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a "group"
as defined in Section 13(d) thereof.
2.27 "RESTRICTED STOCK" means Shares granted to a Participant pursuant to
Article 7 herein.
2.28 "RETIREMENT" shall have the meaning ascribed to such term in the
Participant's governing tax-qualified retirement plan.
2.29 "SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time or any successor act thereto.
2.30 "SHARES" means the shares of Common Stock, par value $0.01, of the
Company.
2.31 "SUBSIDIARY" means, with respect to any Person, including the Company:
(i) a corporation at least fifty percent (50%) of whose capital stock with
voting power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by such Person, by such Person and one or more
Subsidiaries of such Person or by one or more Subsidiaries of such Person; or
(ii) a partnership in which such Person or a Subsidiary of such Person is, at
the time, a general partner of such partnership; or (iii) any other Person
(other than a corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person, or such Person and more or more Subsidiaries of
such Person, directly or indirectly, at the date of determination thereof has
(x) at least a fifty percent (50%) ownership interest or (y) the power to elect
or direct the election of the directors or other governing body of such Person;
or (iv) any other person who the Committee shall determine is entitled to have
the Employees thereof participate in the Plan under the Code and under the
federal and state securities laws, and which the Committee designates as a
participating entity in the Plan.
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Compensation
Committee of the Board, or by any other Committee appointed by the Board
consisting of not less than two (2) Directors who meet the "disinterested
administration" rules of Rule 16b-3 under the Exchange Act and who are
considered outside directors for the purposes of the Performance-Based
Exception. The members of the Committee shall be appointed from time to time by,
and shall serve at the discretion of, the Board of Directors.
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<PAGE> 34
The Committee shall be comprised solely of Directors who are eligible to
administer the Plan pursuant to Rule 16b-3(c)(2) under the Exchange Act and the
Performance-Based Exception. However, if for any reason the Committee does not
qualify to administer the Plan, as contemplated by Rule 16b-3(c)(2) of the
Exchange Act or the Performance-Based Exception, the Board of Directors may
appoint a new Committee so as to comply with Rule 16b-3(c)(2) and/or the
Performance-Based Exception.
3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees who
shall participate in the Plan; determine the sizes and types of Awards;
determine the terms and conditions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or instrument entered
into under the Plan; establish, amend, or waive rules and regulations for the
Plan's administration; and (subject to the provisions of Article 12 herein),
amend the terms and conditions of any outstanding Award to the extent such terms
and conditions are within the discretion of the Committee as provided in the
Plan. Further, the Committee shall make all other determinations which may be
necessary or advisable for the administration of the Plan. As permitted by law,
the Committee may delegate, from time to time, its authority with respect to the
Plan, administration of the Plan and the making of Awards to one or more
Participants, including, without limitation, the authority described above.
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all Persons,
including the Company, its stockholders, Employees, Participants, and their
estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES AVAILABLE FOR GRANTS OF AWARDS. Subject to adjustment
as provided in Section 4.4 herein, there is hereby reserved for issuance of
Awards under the Plan three million seven hundred fifty thousand (3,750,000)
Shares. To the extent an Award is paid in the form of cash, the authorized Share
pool shall be decreased by the appropriate number of Shares represented by the
cash settlement of the Award, as determined at the sole discretion of the
Committee.
4.2 LIMITS ON GRANTS TO NAMED EXECUTIVE OFFICERS. Unless and until the
Committee determines that an Award to a Named Executive Officer shall not be
designed to comply with the Performance-Based Exception, the following rules
shall apply to grants of such Awards under the Plan.
(a) The maximum aggregate number of Shares for which Options may be granted
over any five (5) fiscal year period, or that may vest over any five (5) fiscal
year period of the Company pursuant to any Option held by any Named Executive
Officer shall be one million (1,000,000) Shares.
(b) The maximum aggregate number of Shares issued pursuant to an Award of
Restricted Stock that may be granted over any five (5) fiscal year period, or
that may vest over any five (5) fiscal year period of the Company pursuant to
any Award of Restricted Stock held by a Named Executive Officer shall be five
hundred thousand (500,000) Shares.
4.3 LAPSED AWARDS. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason, any Shares subject to such Award
again shall be available for the grant of an Award under the Plan.
4.4 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation of the Company, such adjustment
shall be made in the number and class of Shares which may be delivered under
Section 4.1 and/or 4.2, and in the number and class of and/or price of Shares
subject to outstanding Awards granted under the Plan, as may be determined to be
appropriate and equitable by the Committee, in its sole discretion, to prevent
dilution or enlargement of rights; provided, however, that the number of Shares
subject to any Award shall always be a whole number.
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ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan include top
executives or key management of the Company, as determined at the discretion of
the Committee.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, those to
whom Awards shall be granted and shall determine the nature and amount of each
Award.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Employees in such number, and upon such terms, and at
any time and from time to time as shall be determined by the Committee. Subject
to the terms of the Plan, the Committee shall have discretion in determining the
number of Shares subject to Options granted to each Participant.
6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an Option
Award Agreement that shall specify the Option Price, the duration of the Option,
the number of Shares to which the Option pertains, and such other provisions as
the Committee shall determine. The Option Award Agreement also shall specify
whether the Option is intended to be an ISO within the meaning of Section 422 of
the Code, or an NQSO whose grant is intended not to fall under the provisions of
Code Section 422.
6.3 OPTION PRICE. The Option Price for each grant of an Option under this
Plan shall be such price as the Committee shall specify which shall be at least
equal to one hundred percent (100%) of the Fair Market Value of a Share on the
date the Option is granted.
6.4 DURATION OF OPTIONS. Each Option shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that no
Option shall be exercisable later than the tenth (10th) anniversary date of its
grant.
6.5 EXERCISE OF OPTIONS. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
6.6 PAYMENT. Options shall be exercised by the delivery of a written
notice of exercise to the Company, setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by full payment for
the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, or (b) by tendering
Shares having an aggregate Fair Market Value at the time of exercise equal to
the total Option Price, whether issuable in connection with the exercise of the
Option if permitted by the Committee in its sole discretion following prior
written request by the Participant or previously acquired by the Participant
(provided that in such later case, the Shares which are tendered must have been
held by the Participant for at least six (6) months prior to their tender to
satisfy the Option Price), or (c) by a combination of (a) and (b).
The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Committee determines to be consistent with
Plan's purpose and applicable law.
As soon as practicable after receipt of a written notification of exercise
and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Options to be granted hereunder, and on any Shares acquired
pursuant to the exercise of an Option granted under the Plan as it may deem
advisable, including, without limitation, that Options not be exercisable until
registration of the Options and/or the underlying Common Stock, that the Options
not be exercisable until stockholder approval of the Plan, restrictions under
applicable federal securities laws, under the requirements
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<PAGE> 36
of any stock exchange or market upon which such Shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to such
Shares.
6.8 TERMINATION OF EMPLOYMENT. Each Participant's Option Award Agreement
shall set forth the extent to which the Participant shall have the right to
exercise the Option following termination of the Participant's employment with
the Company and its Subsidiaries. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Option Award
Agreement entered into with Participants, need not be uniform among all Options
issued pursuant to the Plan, and may reflect distinctions based on the reasons
for termination of employment.
6.9 NONTRANSFERABILITY OF OPTIONS.
(a) INCENTIVE STOCK OPTIONS. No ISO granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, all ISOs
granted to a Participant under the Plan shall be exercisable during his or her
lifetime only by such Participant.
(b) NONQUALIFIED STOCK OPTIONS. Except as otherwise provided in a
Participant's Award Agreement, no NQSO granted under this Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all NQSOs granted to a
Participant under this Plan shall be exercisable during his or her lifetime only
by such Participant.
ARTICLE 7. RESTRICTED STOCK
7.1 GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to eligible Employees in such amounts as the Committee shall
determine.
7.2 RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the Period or
Periods of Restriction, the number of Shares of Restricted Stock granted, and
such other provisions as the Committee shall determine.
7.3 TRANSFERABILITY. Except as provided in this Article 7, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until the end of the applicable Period or
Periods of Restriction established by the Committee and specified in the
Restricted Stock Award Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Committee in its sole discretion and set forth
in the Restricted Stock Award Agreement. All rights with respect to the
Restricted Stock granted to a Participant under the Plan shall be available
during his or her lifetime only to such Participant.
7.4 OTHER RESTRICTIONS. The Committee may impose such other conditions
and/or restrictions on any Shares of Restricted Stock granted pursuant to the
Plan as it may deem advisable including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of Restricted Stock,
restrictions based upon the achievement of specific performance goals
(Company-wide, divisional and/or individual), time-based restrictions on vesting
following the attainment of the performance goals, and/or restrictions under
applicable federal or state securities laws.
7.5 CERTIFICATE LEGEND. In addition to any legends placed on certificates
pursuant to Section 7.4 herein, each certificate representing Shares of
Restricted Stock granted pursuant to the Plan may bear the following legend:
The sale or other transfer of the Shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the Roadmaster
Industries, Inc. Key Employee Stock Incentive Program, and in a Restricted
Stock Award Agreement. A copy of the Plan and such Restricted Stock Award
Agreement may be obtained from Roadmaster Industries, Inc.
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<PAGE> 37
The Company shall have the right to retain the certificates representing
Shares of Restricted Stock in the Company's possession until such time as all
conditions and/or restrictions applicable to such Shares have been satisfied.
7.6 REMOVAL OF RESTRICTIONS. Except as otherwise provided in this Article
7, Shares of Restricted Stock covered by each Restricted Stock grant made under
the Plan shall become freely transferable by the Participant after the last day
of the Period of Restriction. Once the Shares are released from the
restrictions, the Participant shall be entitled to have the legend required by
Section 7.5 removed from his or her Share certificate.
7.7 VOTING RIGHTS. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.
7.8 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may be
credited with regular cash dividends paid with respect to the underlying Shares
while they are so held. The Committee may apply any restrictions to the
dividends that the Committee deems appropriate.
In the event that any dividend constitutes a "derivative security" or an
"equity security" pursuant to Rule 16(a) under the Exchange Act, such dividend
shall be subject to a vesting period equal to the remaining vesting period of
the Shares of Restricted Stock with respect to which the dividend is paid.
7.9 TERMINATION OF EMPLOYMENT. Each Restricted Stock Award Agreement shall
set forth the extent to which the Participant shall have the right, if any, to
receive unvested Shares of Restricted Stock following termination of the
Participant's employment with the Company and its Subsidiaries. Such provisions
shall be determined in the sole discretion of the Committee, shall be included
in the Award Agreement entered into with the Participants, need not be uniform
among all Shares of Restricted Stock issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination of employment.
ARTICLE 8. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Company during the Participant's lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
ARTICLE 9. DEFERRALS
The Committee may permit a Participant to defer such Participant's receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
such Participant by virtue of the exercise of an Option, any Option treated as a
stock appreciation right for any reason, the lapse or waiver of restrictions
with respect to Restricted Stock. If any such deferral election is required or
permitted, the Committee shall, in its sole discretion, establish rules and
procedures for such payment deferrals.
ARTICLE 10. RIGHTS OF EMPLOYEES
10.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of the
Company.
For purposes of the Plan, a transfer of a Participant's employment between
the Company and a Subsidiary, or between Subsidiaries, shall not be deemed to be
a termination of employment. Upon such a transfer, the Committee may make such
adjustments to outstanding Awards as it deems appropriate to reflect the changed
reporting relationships.
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<PAGE> 38
10.2 PARTICIPATION. No Employee shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.
ARTICLE 11. CHANGE IN CONTROL
11.1 TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence of a Change in
Control, unless otherwise specifically prohibited under applicable laws, or by
the rules and regulations of any governing governmental agencies or national
securities exchanges:
(a) Any and all Options granted hereunder shall become immediately
exercisable, and shall remain exercisable throughout their entire term;
(b) Any Period of Restriction and restrictions imposed on Shares of
Restricted Stock shall lapse; and
(c) Subject to Sections 11.3, 12.2 and Article 15 of this Plan, the
Committee shall have the authority to make any modifications to the Awards
as determined by the Committee to be appropriate before the effective date
of the Change in Control.
11.2 ACCELERATION OF AWARD VESTING. Notwithstanding any provision of this
Plan or any Award Agreement provision to the contrary, the Committee, in its
sole and exclusive discretion, shall have the power at any time to accelerate
the vesting of any Award granted under the Plan, including without limitation
acceleration to such a date that would result in said Awards becoming
immediately vested.
11.3 TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL
PROVISIONS. Notwithstanding any other provision of this Plan or any Award
Agreement provision, the provisions of this Article 11 may not be terminated,
amended, or modified (i) on or after the date of a Change in Control, (ii) in
contemplation of a Change in Control which Change in Control in fact occurs
within six (6) months of such action, in either case, to affect adversely any
Award theretofore granted under the Plan without the prior written consent of
the Participant with respect to said Participant's outstanding Awards; provided,
however, that except as provided above and subject to any employment agreement
or severance benefits agreement between the Participant and the Company, the
Board of Directors, upon recommendation of the Committee, may terminate, amend,
or modify this Article 11 at any time and from time to time prior to the date of
a Change in Control.
ARTICLE 12. AMENDMENT, MODIFICATION, AND TERMINATION
12.1 AMENDMENT, MODIFICATION, AND TERMINATION. The Board may at any time
and from time to time, alter, amend, suspend or terminate the Plan in whole or
in part; provided, however, that no amendment which requires shareholder
approval in order for the Plan to continue to comply with Rule 16b-3 under the
Exchange Act, including any successor to such Rule, shall be effective unless
such amendment shall be approved by the requisite vote of shareholders of the
Company entitled to vote thereon.
The Committee shall have the authority to cancel outstanding Awards and
issue substitute Awards in replacement thereof.
12.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or modification
of the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award.
ARTICLE 13. WITHHOLDING
13.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, local, and any other applicable taxes
(including any foreign taxes and the Participant's FICA obligation) required by
law to be withheld with respect to any taxable event arising as a result of this
Plan.
13.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options, upon the lapse of restrictions on Restricted Stock, or upon
any other taxable event arising as a result of Awards granted
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<PAGE> 39
hereunder, Participants may elect, subject to the approval of the Committee, to
satisfy the withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair Market Value on the date the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction. All such elections shall be irrevocable, made in writing,
signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.
ARTICLE 14. 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 Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her 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 taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit, or proceeding against him or her, provided he
or she shall give the Company 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 Company's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
ARTICLE 15. SUCCESSORS
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 16. LEGAL CONSTRUCTION
16.1 GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular and the singular shall include the plural.
16.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
16.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
16.4 SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions or Rule
16b-3 or its successors under the 1934 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.
16.5 GOVERNING LAW. To the extent not preempted by United States federal
law, the Plan, and all agreements hereunder, shall be construed in accordance
with and governed by the laws of the State of Georgia.
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<PAGE> 40
EXHIBIT B
ROADMASTER INDUSTRIES, INC.
DIRECTORS RESTRICTED STOCK PLAN
<PAGE> 41
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Article 1. Establishment, Purpose, and Duration...................................... B-1
Article 2. Definitions............................................................... B-1
Article 3. Administration............................................................ B-3
Article 4. Shares Subject to the Plan................................................ B-3
Article 5. Eligibility and Participation............................................. B-4
Article 6. Restricted Stock.......................................................... B-4
Article 7. Amendment, Modification, and Termination.................................. B-5
Article 8. Miscellaneous............................................................. B-6
</TABLE>
<PAGE> 42
ROADMASTER INDUSTRIES, INC.
DIRECTORS RESTRICTED STOCK PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Roadmaster Industries, Inc., a Delaware
corporation (hereinafter referred to as the "Company") hereby establishes an
incentive compensation plan to be known as the "Roadmaster Industries, Inc.
Directors Restricted Stock Plan" (the "Plan"), as set forth in this document.
The Plan permits the grant of Restricted Stock to Nonemployee Directors, subject
to the terms and provisions set forth herein.
Subject to approval of the Plan by the Company's stockholders, the Plan
shall become effective as of October 25, 1994 (the "Effective Date"), and shall
remain in effect as provided in Section 1.3 herein.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote the
achievement of long-term objectives of the Company by linking the personal
interests of Nonemployee Directors to those of Company shareholders, and to
attract and retain Nonemployee Directors of outstanding competence.
1.3 DURATION OF THE PLAN. The Plan shall commence on January 1, 1995 and
shall remain in effect, subject to the right of the Board of Directors to
terminate the Plan at any time pursuant to Article 7 herein, until all Shares
subject to it shall have been purchased or acquired according to the Plan's
provisions. However, in no event may an Award be granted under the Plan on or
after January 1, 2005.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter of the word or
words is capitalized:
(a) "AWARD" means, individually or collectively, a grant under this
Plan of Restricted Stock.
(b) "AWARD AGREEMENT" means an agreement entered into by and between
the Company and a Nonemployee Director, setting forth the terms and
provisions applicable to an Award granted under the Plan.
(c) "BENEFICIAL OWNER" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
(d) "BOARD" or "BOARD OR DIRECTORS" means the Board of Directors of
the Company
(e) "CHANGE IN CONTROL OF THE COMPANY" means:
(i) a transfer of all or substantially all of the assets of the
Company;
(ii) if any "Person" or "Group" of Persons (as such terms are
determined pursuant to Sections 13(d) and 14(d) of the Exchange Act and
the rules and regulations promulgated thereunder) either alone or in
conjunction with its "Affiliates" (as that term is defined in Rule 405
under the Securities Act), other than a person or group consisting
solely of Management Stockholders or their "Affiliates" (as that term is
defined in Rule 405 under the Securities Act), becomes the beneficial
owner, directly or indirectly, of voting securities of the Company
representing, or securities convertible into, or exchangeable for,
securities representing, more than fifty percent (50%) of the combined
voting power of the Company's then outstanding securities eligible to
vote for the election of Directors; or
(iii) if any "Person" or "Group" of Persons (as such terms are
determined pursuant to Section 13(d) and 14(d) of the Exchange Act and
the rules and regulations promulgated thereunder) either alone or in
conjunction with its "Affiliates" (as that term is defined in Rule 405
under the Securities Act), acquires the right or power to nominate
and/or control, directly or indirectly, whether through the ownership of
voting securities of the Company, by contract or otherwise, a majority
of the members of the Company's Board of Directors without having first
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<PAGE> 43
received the prior written consent of at least two-thirds (including a
majority of the Management Directors) of the members of the Board of
Directors of the Company then in office prior to such person or group of
persons acquiring such right or power.
(f) "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
(g) "COMPANY" means Roadmaster Industries, Inc., a Delaware
corporation, or any successor thereto as provided in Section 8.6 herein.
(h) "DIRECTOR" means any individual who is a member of the Board of
Directors of the Company.
(i) "DISABILITY" means a permanent and total disability. An individual
is permanently and totally disabled if the individual is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than twelve (12) months. An individual shall not be considered to be
permanently and totally disabled unless the individual furnishes proof of
the existence thereof in such form and manner, and at such times, as the
Secretary may require.
(j) "ELECTED TERM" means the period of time for which a Nonemployee
Director is elected to serve for any one election.
(k) "EMPLOYEE" means any full-time, nonunion, salaried employee of the
Company or of the Company's Subsidiaries. For purposes of the Plan, an
individual whose only employment relationship with the Company is as a
Director shall not be deemed to be an Employee.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
(m) "FAIR MARKET VALUE" shall be determined on the basis of: (i) the
average sale price of the Company's Common Stock on the applicable day on
the principal stock exchange, or the National Association of Securities
Dealers' Automated Quotation National Market System ("NASDAQ/ NMS"), as the
case may be, on which such Common Stock is then listed or admitted to
trading; (ii) if no sale takes place on such day on such exchange or the
NASDAQ/NMS, as the case may be, the average of the last reported closing
bid and asked prices on such day as officially quoted on such exchange or
the NASDAQ/NMS, as the case may be; (iii) if the Common Stock is not then
listed or admitted to trading on any stock exchange or the NASDAQ/NMS, as
the case may be, the average of the last reported closing bid and asked
prices on such day in the over-the-counter market, as furnished by the
NASDAQ system or the National Quotation Bureau, Inc.; (iv) if neither such
corporation at the time is engaged in the business of reporting such
prices, as furnished by any similar firm then engaged in such business; or
(v) if there is no such firm, as furnished by any member of the National
Association of Securities Dealers ("NASD") selected mutually by the
Optionee and the Company or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be selected by
the Optionee and one of which shall be selected by the Company.
(n) "MANAGEMENT DIRECTORS" or "MANAGEMENT STOCKHOLDERS" means Henry
Fong and Edward E. Shake.
(o) "NONEMPLOYEE DIRECTOR" means any individual who is a member of the
Board of Directors of the Company, but who is not otherwise an Employee of
the Company or its Subsidiaries.
(p) "PARTICIPANT" means a Nonemployee Director of the Company who has
outstanding a viable Award granted under the Plan.
(q) "PERIOD(S) OF RESTRICTION" means the period(s) during which the
transfer of Shares of Restricted Stock is limited in some way and the
Shares are subject to a substantial risk of forfeiture, as provided in
Article 6 herein.
(r) "PERSON" means any corporation, individual, joint stock company
joint venture, partnership, unincorporated association and, as the context
shall require, shall have the meaning ascribed to such term
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<PAGE> 44
in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d).
(s) "RESTRICTED STOCK" or "RESTRICTED SHARES" means Shares granted to
a Participant pursuant to Article 6 herein.
(t) "SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time or any successor act thereto.
(u) "SHARES" means the shares of Common Stock, par value $0.01, of the
Company.
(v) "SUBSIDIARY" means, with respect to any Person, including the
Company: (i) a corporation at least fifty percent (50%) of whose capital
stock with voting power, under ordinary circumstances, to elect Directors
is at the time, directly or indirectly, owned by such Person, by such
Person and one or more Subsidiaries of such Person, or by one or more
Subsidiaries of such Person; or (ii) a partnership in which such Person or
a Subsidiary of such Person is, at the time, a general partner of such
partnership; or (iii) any other Person (other than a corporation or a
partnership) in which such Person, one or more Subsidiaries of such Person,
or such Person and one or more Subsidiaries of such Person, directly or
indirectly at the date of determination thereof has (x) at least a fifty
percent (50%) ownership interest or (y) the power to elect or direct the
election of the directors or other governing body of such person; or (iv)
any other person who the Committee shall determine is entitled to have the
Employees thereof participate in the Plan under the Code and under the
federal and state securities laws, and which the Committee designates as a
participating entity in the Plan.
ARTICLE 3. ADMINISTRATION
3.1 THE BOARD OF DIRECTORS. This Plan shall be self-administering;
provided, however, that to the extent this Plan is not self-administering, the
Plan shall be administered either by a committee of the Board of Directors of
the Company (the "Committee") consisting of two or more disinterested persons;
provided, however, that if no members of the Board of Directors are
"disinterested persons," then the Plan shall be administered by the Board of
Directors. So long as the Plan qualifies as a "formula plan" administration by
the Committee or the Board shall be subject to the restrictions set forth in
Section 3.2 of the Plan.
3.2 ADMINISTRATION BY THE BOARD. Subject to the limitations of Section
3.1, the Committee or the Board, as the case may be, shall have the full power,
discretion, and authority to interpret and administer the Plan in a manner which
is consistent with the Plan's provisions. However, in no event shall the
Committee or the Board, as the case may be, have the power to determine Plan
eligibility, or to determine the number (except and to the extent provided in
Section 4.3 hereof), the value, the vesting period, or the timing of Awards to
be made under the Plan (all such determinations being automatic pursuant to the
provisions of the Plan).
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee or the Board, as the case may be, pursuant to the provisions of the
Plan, and all related orders or resolutions of the Committee or the Board, as
the case may be, shall be final, conclusive, and binding on all persons,
including the Company its stockholders, Employees, Participants, and their
estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in Section 4.3
herein, the total number of Shares available for grant under the Plan may not
exceed eighty-seven thousand five hundred (87,500) Shares.
4.2 LAPSED AWARDS. If any Share of Restricted Stock granted under the Plan
terminates, expires, or lapses for any reason, any such Share again shall be
available for grant under the Plan.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, Share combination, or other change in the corporate
structure of the Company affecting the Shares, an adjustment of like kind shall
automatically be
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<PAGE> 45
made in the number and kind of shares which are the subject of unvested Awards;
provided, however, that no such adjustment shall be made if the adjustment may
cause the Plan to fail to comply with the "formula award" exception for grants
of Awards to Directors; and provided further that the Committee or the Board, as
the case may be, may make such adjustments to outstanding Awards as may be
determined to be appropriate and equitable by the Committee or the Board, as the
case may be, in its sole discretion, to prevent dilution or enlargement of
rights
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in the Plan are limited
to Nonemployee Directors who are serving on the Board on the date of each
scheduled grant under the Plan.
5.2 ACTUAL PARTICIPATION. All eligible Nonemployee Directors shall receive
grants of Restricted Stock pursuant to Article 6 herein.
ARTICLE 6. RESTRICTED STOCK
6.1 INITIAL GRANTS OF RESTRICTED STOCK. During the term of this Plan, each
individual who is elected at the first annual meeting of stockholders following
the date of the adoption of this Plan and thereafter each individual who is
elected to serve as a Nonemployee Director shall, on the day immediately
following the Nonemployee Director's election, be granted Restricted Stock
having a value on such date of ten thousand dollars ($10,000). The number of
Shares issuable hereunder shall be calculated to the nearest whole share by
dividing $10,000 by the Fair Market Value of the Common Stock as of the date of
grant. No fractional shares shall be issued or other adjustment or payment made
with respect thereto. Such grants shall be made each time an individual is
elected or reelected to serve as a Nonemployee Director. The specific terms and
provisions of such Restricted Shares shall be incorporated in Restricted Stock
Award Agreements, executed pursuant to Section 6.4 of the Plan.
6.2 ANNUAL GRANTS OF RESTRICTED STOCK. In the case of a multiple year
Elected Term for Nonemployee Directors, and subject to the limitation on the
number of Shares subject to the Plan, on each anniversary date of each election
of a Nonemployee Director to serve on the Board for a given Elected Term
(provided that on each such grant date the individual remains a Nonemployee
Director), each such Nonemployee Director shall be granted Restricted Stock
having a value of ten thousand dollars ($10,000). The number of Shares issuable
hereunder shall be calculated to the nearest whole share by dividing $10,000 by
the Fair Market Value of the Common Stock as of the date of grant. No fractional
shares shall be issued or other adjustment or payment made with respect thereto.
The specific terms and provisions of such Restricted Shares shall be
incorporated in Restricted Stock Award Agreements, executed pursuant to Section
6.4 of the Plan.
6.3 LIMITATION ON GRANTS OF RESTRICTED SHARES. Subject to adjustment as
provided in Section 4.3, other than those grants of Restricted Shares set forth
in Sections 6.1 and 6.2 herein, no additional Restricted Shares shall be granted
under the Plan.
6.4 RESTRICTED STOCK AWARD AGREEMENT. Each Restricted Share grant may be
evidenced by an Award Agreement that shall specify the date of award and number
of Restricted Shares granted and such other ministerial provisions as the Board
shall determine or, in the event this Plan ceases to be self-administering, such
other provisions as the Committee or the Board, as the case may be, shall
determine.
6.5 VESTING OF RESTRICTED SHARES. Subject to the terms of this Plan, all
unvested Restricted Shares granted to a Nonemployee Director under this Plan
shall vest one hundred percent (100%) upon the last day of the Elected Term for
which the Nonemployee Director was elected to serve on the Board, provided the
Participant is then a Nonemployee Director of the Company; provided, however,
that in the case of Participants elected to multiple-year terms, Restricted
Shares granted in one (1) year shall vest on the yearly anniversary date of
Participant's election if the Participant is then a Nonemployee Director of the
Company.
The Company shall have the right to retain the certificates representing
Shares of Restricted Stock in the Company's possession until such time as all
conditions and/or restrictions applicable to such Shares including, without
limitation, the vesting thereof have been satisfied.
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<PAGE> 46
Regardless of the vesting schedule set forth in this Section 6.5, all
unvested Restricted Shares held by a Nonemployee Director shall immediately
become one hundred percent (100%) vested upon the first to occur of the
following:
(a) The death of the Participant; or
(b) The Disability of the Participant; or
(c) The effective date of a Change in Control of the Company
6.6 TERMINATION OF DIRECTORSHIP OTHER THAN BY REASON OF DEATH, DISABILITY,
OR CHANGE IN CONTROL. In the event a Participant ceases to be a Nonemployee
Director for any reason other than death, Disability, or Change in Control, all
Restricted Shares not vested as of the effective date of termination shall be
forfeited and shall revert back to the Company and such Person shall cease to be
eligible to participate in the Plan and no further vesting shall occur with
respect to any grant of Restricted Stock to such Person under the Plan.
6.7 CERTIFICATE LEGEND. Each certificate representing Shares of Restricted
Stock granted pursuant to the Plan may bear the following legend:
"The sale or other transfer of the Shares of stock represented by this
certificate, whether voluntary, involuntary or by operation of law is
subject to certain restrictions on transfer as set forth in the Roadmaster
Industries, Inc. Directors Restricted Stock Plan, and in a Restricted Stock
Award Agreement. A copy of the Plan and such Restricted Stock Award
Agreement may be obtained from Roadmaster Industries, Inc."
6.8 REMOVAL OF RESTRICTIONS. Except as otherwise provided in this Article
6, Shares of Restricted Stock covered by each Restricted Stock grant made under
the Plan shall become freely transferable by the Nonemployee Director after such
Shares vest. Once the Shares are released from the restrictions, the Nonemployee
Director shall be entitled to have the legend required by Section 6.7 removed
from his or her Share certificate.
6.9 VOTING RIGHTS. Prior to vesting, Participants holding Shares of
Restricted Stock granted hereunder may exercise full voting rights with respect
to those Shares.
6.10 DIVIDENDS AND OTHER DISTRIBUTIONS. Prior to vesting, Participants
holding Shares of Restricted Stock granted hereunder shall be entitled to
receive all dividends and other distributions paid with respect to those Shares
while they are so held. If any such dividends or distributions are paid in
Shares, the Shares shall be subject to the same restrictions on transferability
and forfeitability as the Shares of Restricted Stock with respect to which they
were paid.
6.11 RESTRICTIONS ON SHARE TRANSFERABILITY. In addition to the
restrictions set forth in Section 6.12 below, the Committee or the Board may
impose such restrictions on any Restricted Shares granted under the Plan as it
may deem advisable, including, without limitation, restrictions under applicable
federal securities laws, under the requirements of any stock exchange or market
upon which such Shares are then listed and/or traded, and under any blue sky or
state securities laws applicable to such Shares; provided, however, that no such
restriction shall be imposed if the restriction could result in the failure to
comply with the "formula award" exception for grants of Awards to Directors.
6.12 NONTRANSFERABILITY OF RESTRICTED SHARES. No Restricted Share granted
under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated prior to vesting.
ARTICLE 7. AMENDMENT, MODIFICATION, AND TERMINATION
7.1 AMENDMENT, MODIFICATION, AND TERMINATION. Subject to the terms set
forth in this Section 7.1, the Board may terminate, amend, or modify the Plan at
any time and from time to time; provided, however, that the provisions set forth
in the Plan regarding the amount of securities to be awarded to Nonemployee
Directors, the price of securities awarded to Nonemployee Directors, and the
timing of Awards to Nonemployee Directors, may not be amended more than once
within any six (6) month period, other than to
B-5
<PAGE> 47
comport with changes in the Code, the Employee Retirement Income Security Act of
1974 as amended from time to time, or the rules promulgated thereunder.
Without the approval of the stockholders of the Company (as may be required
by the Code, by the insider trading rules of Section 16 of the Exchange Act, by
any national securities exchange or system on which the Shares are then listed
or reported, or by a regulatory body having jurisdiction with respect hereto) no
such termination, amendment, or modification may:
(a) Increase the total number or value of Shares which may be
available for grants of Awards under the Plan, except as provided in
Section 4.3 herein; or
(b) Change the class of Participants eligible to participate in the
Plan; or
(c) Materially increase the cost of the Plan, or materially increase
the benefits accruing to Participants.
7.2 AWARDS PREVIOUSLY GRANTED. Unless required by law, no termination,
amendment, or modification of the Plan shall in any material manner adversely
affect any Award previously granted under the Plan, without the written consent
of the Participant holding the Award.
ARTICLE 8. MISCELLANEOUS
8.1 GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular and the singular shall include the plural.
8.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
8.3 BENEFICIARY DESIGNATION. Each Participant under the Plan may, from
time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
in the event of his or her death. Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Board, and will be effective only when filed by the Participant in writing with
the Board during his or her lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be paid to the
Participant's estate.
8.4 NO RIGHT OF NOMINATION. Nothing in the Plan shall be deemed to create
any obligation on the part of the Board to nominate any Director for reelection
by the Company's shareholders.
8.5 SHARES AVAILABLE. The Shares made available pursuant to Awards under
the Plan may be either authorized but unissued Shares, or Shares which have been
or may be reacquired by the Company as determined from time to time by the
Board.
8.6 SUCCESSORS. All obligations of the Company under the Plan with respect
to Awards granted hereunder shall be binding on any successor to the Company
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of the Company.
8.7 REQUIREMENTS OF LAW. The granting of Awards under the Plan shall be
subject to all applicable laws, rules, and regulations, and to such approvals by
any governmental agencies or national securities exchanges as may be required.
8.8 GOVERNING LAW. To the extent not preempted by United States federal
law, the Plan and all agreements hereunder shall be construed in accordance with
and governed by the laws of the State of Georgia.
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<PAGE> 48
APPENDIX A
ROADMASTER INDUSTRIES, INC.
SHORT-TERM INCENTIVE
COMPENSATION PLAN
<PAGE> 49
<TABLE>
<CAPTION>
TABLE OF CONTENTS
- - ------------------------------------------------------------------------------
PAGE
<S> <C>
Article 1. Establishment and Purpose . . . . . . . . . . . . . . . . . . 1
Article 2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article 3. Administration . . . . . . . . . . . . . . . . . . . . . . . . 4
Article 4. Eligibility and Participation . . . . . . . . . . . . . . . . 4
Article 5. Award Determination . . . . . . . . . . . . . . . . . . . . . 5
Article 6. Payment of Final Awards . . . . . . . . . . . . . . . . . . . 6
Article 7. Termination of Employment . . . . . . . . . . . . . . . . . . 6
Article 8. Named Executive Officers . . . . . . . . . . . . . . . . . . . 7
Article 9. Rights of Participants . . . . . . . . . . . . . . . . . . . . 8
Article 10. Beneficiary Designation . . . . . . . . . . . . . . . . . . . 8
Article 11. Change in Control . . . . . . . . . . . . . . . . . . . . . . 9
Article 12. Amendment, Modification, and Termination . . . . . . . . . . 9
Article 13. Indemnification . . . . . . . . . . . . . . . . . . . . . . . 9
Article 14. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
<PAGE> 50
ROADMASTER INDUSTRIES, INC.
SHORT-TERM INCENTIVE
COMPENSATION PLAN
ARTICLE 1. ESTABLISHMENT AND PURPOSE
1.1 ESTABLISHMENT OF THE PLAN. Roadmaster Industries, Inc., a
Delaware corporation, (the "Company"), hereby establishes an incentive
compensation plan to be known as the "Roadmaster Industries, Inc. Short-Term
Incentive Compensation Plan" (the "Plan"), as set forth in this document. The
Plan permits the awarding of annual cash bonuses to Employees of the Company,
based on the achievement of preestablished performance goals.
1.2 PURPOSE OF THE PLAN. The primary purposes of the Plan are to:
(a) motivate participants toward achieving annual goals that are within group
and/or individual control, and are considered key to the Company's success; (b)
encourage teamwork among Participants in various segments of the Company; and
(c) reward performance with pay that varies in relation to the extent to which
the preestablished goals are achieved.
1.3 DURATION OF THE PLAN. Upon approval by the Board of Directors
of the Company, the Plan shall become effective as of October 25,1994 (the
"Effective Date") and shall remain in effect until terminated by the Board
pursuant to Article 12 herein; provided, however, that the effectiveness of the
Plan or parts thereof with respect to participating Named Executive Officers
shall be subject to stockholder approval to the extent required for an award to
comply with Section 162(m) of the Code.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings
set forth below and, when the defined meaning is intended, the initial letter
of the word or words is capitalized:
2.1 "AWARD OPPORTUNITY" means the various levels of incentive
award payouts which a Participant may earn under the Plan, as established by
the Committee pursuant to Sections 5.1 and 5.2 herein.
2.2 "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the
meaning ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
2.3 "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors
of the Company.
2.4 "CAUSE" means: (a) willful misconduct on the part of a
Participant that is materially detrimental to the Company; or (b) the
conviction of a Participant for the commission of a felony or crime involving
moral turpitude; provided, however, that if the Participant has entered into an
employment agreement that is binding as of the date of employment termination,
and if such
<PAGE> 51
employment agreement defines "Cause," such definition of "Cause" shall apply.
"Cause" under either (a) or (b) shall be determined in good faith by the
Committee.
2.5 "CHANGE IN CONTROL" of the Company means:
(i) a transfer of all or substantially all of the assets
of the Company;
(ii) if any "Person" or "Group" of Persons (as such terms
are determined pursuant to Sections 13(d) and 14(d) of the Exchange
Act and the rules and regulations promulgated thereunder) either alone
or in conjunction with its "Affiliates" (as that term is defined in
Rule 405 under the Securities Act), other than a person or group
consisting solely of Management Stockholders or their "Affiliates" (as
that term is defined in Rule 405), becomes the beneficial owner,
directly or indirectly, of voting securities of the Company
representing, or securities convertible into, or exchangeable for,
securities representing, more than fifty percent (50%) of the combined
voting power of the Company's then outstanding securities eligible to
vote for the election of Directors; or
(iii) if any "Person" or "Group" of Persons (as such terms
are determined pursuant to Section 13(d) and 14(d) of the Exchange Act
and the rules and regulations promulgated thereunder) either alone or
in conjunction with its "Affiliates" (as that term is defined in Rule
405 under the Securities Act), acquires the right or power to nominate
and/or control, directly or indirectly, whether through the ownership
of voting securities of the Company, by contract or otherwise, a
majority of the members of the Company's Board of Directors without
having first received the prior written consent of at least two-thirds
(including a majority of the Management Directors) of the members of
the Board of Directors of the Company then in office prior to such
person or group of persons acquiring such right or power.
2.6 "CODE" means the Internal Revenue Code of 1986, as amended.
2.7 "COMMITTEE" means a committee of two (2) or more individuals,
appointed by the Board to administer the Plan, pursuant to Article 3 herein.
2.8 "COMPANY" means Roadmaster Industries, Inc., a Delaware
corporation, and its Subsidiaries, as well as any successor to any of such
entities as provided in Section 14.5 herein.
2.9 "DISABILITY" shall have the meaning ascribed to such term in
the Participant's governing long-term disability plan or policy or, if no such
plan or policy shall then be in effect, any physical or mental disability or
incapacity which the Committee determines would render a Participant incapable
of performing the services required of such participant for a period of at
least 180 consecutive days or for other periods aggregating 180 days during any
52-week period.
2.10 "EFFECTIVE DATE" means the date the Plan becomes effective, as
set forth in Section 1.1 herein.
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<PAGE> 52
2.11 "EMPLOYEE" means any full-time, nonunion employee of the
Company. Directors who are not otherwise employed by the Company shall not be
considered Employees under this Plan.
2.12 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
2.13 "FINAL AWARD" means the actual award earned during a Plan Year
by a Participant, as determined by the Committee following the end of the Plan
Year.
2.14 "MANAGEMENT DIRECTORS" or "MANAGEMENT STOCKHOLDERS" means
Henry Fong or Edward E. Shake.
2.15 "NAMED EXECUTIVE OFFICER" means a Participant who, as of the
date of a Final Award is earned, is one of the group of "covered employees," as
defined in the Regulations promulgated under Code Section 162(m), or any
successor statute.
2.16 "PERSON" means any corporation, individual, joint stock
company, joint venture, partnership, unincorporated association and, as the
context shall require, shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) thereof.
2.17 "PARTICIPANT" means an Employee who is actively participating
in the Plan.
2.18 "PERFORMANCE-BASED EXCEPTION" means the performance-based
exception from the deductibility limitations of Code Section 162(m).
2.19 "PLAN" means the Roadmaster Industries, Inc. Short-Term
Incentive Compensation Plan, as set forth herein.
2.20 "PLAN YEAR" means the Company's fiscal year.
2.21 "RETIREMENT" shall have the meaning ascribed to such term in
the Company's tax-qualified retirement plan.
2.22 "SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time or any successor act thereof.
2.23 "SUBSIDIARY" means, with respect to any Person, including the
Company, (i) a corporation at least fifty percent (50%) of whose Capital Stock
with voting power, under ordinary circumstances, to elect directors is at the
time, directly or indirectly, is owned by such Person, by such Person and one
or more Subsidiaries of such Person or by one or more Subsidiaries of such
Person, or (ii) a partnership in which such Person or a Subsidiary of such
Person is, at the time, a general partner of such partnership, or (iii) any
other Person (other than a corporation or a
3
<PAGE> 53
partnership) in which such Person, one or more Subsidiaries of such Person, or
such Person and more or more Subsidiaries of such Person, directly or
indirectly, at the date of determination thereof has (x) at least a fifty
percent (50%) ownership interest or (y) the power to elect or direct the
election of the directors or other governing body of such Person or (iv) any
other person who the Committee shall determine is entitled to have the
Employees thereof participate in the Plan under the Code and under the Federal
and state securities laws, and which the Committee designates as a
participating entity in the Plan.
2.24 "TARGET INCENTIVE AWARD" means the award to be paid to
Participants when the Company meets "targeted" performance results, as
established by the Committee.
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the
Compensation Committee of the Board, or by any other committee appointed by the
Board consisting solely of two or more Directors who meet the "disinterested
administration" rules of Rule 16b-3 under the Exchange Act and are outside
directors as defined for the Performance-Based Exception. The members of the
Committee shall be appointed by, and shall serve at the discretion of, the
Board.
3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees who
shall participate in the Plan; determine the size and types of Award
Opportunities and Final Awards; determine the terms and conditions of Award
Opportunities in a manner consistent with the Plan; construe and interpret the
Plan and any agreement or instrument entered into under the Plan; establish,
amend, or waive rules and regulations for the Plan's administration; and
(subject to the provisions of Article 8 herein) amend the terms and conditions
of any outstanding Award Opportunity to the extent such terms and conditions
are within the discretion of the Committee as provided in the Plan. Further,
the Committee shall make all other determinations which may be necessary or
advisable for the administration of the Plan. As permitted by law, the
Committee may delegate its authorities as identified hereunder.
3.3 DECISIONS BINDING. All determinations and decisions of the
Committee as to any disputed question arising under the Plan, including
questions of construction and interpretation, shall be final, binding, and
conclusive upon all parties.
ARTICLE 4. ELIGIBILITY AND PARTICIPATION
4.1 ELIGIBILITY. All Employees shall be eligible to participate in
the Plan for such Plan Year.
4.2 PARTICIPATION. Participation in the Plan shall be determined
annually by the Committee based upon the criteria set forth in Section 4.1
herein. Employees who are chosen to participate in the Plan in any given Plan
Year shall be so notified in writing, and shall be apprised of the
4
<PAGE> 54
performance measure(s), performance goal(s), and related Award Opportunities
for the relevant Plan Year, as soon as is practicable.
4.3 PARTIAL PLAN YEAR PARTICIPATION. Except as provided in Article
8 herein, an Employee who becomes eligible after the beginning of a Plan Year
may participate in the Plan for that Plan Year. Such situations may include,
but are not limited to (a) new hires; (b)when an Employee is promoted from a
position which did not previously meet the eligibility criteria; or (c) when an
Employee is transferred from an affiliate which does not participate in the
Plan.
Subject to the terms of any employment or severance benefits
agreement, the Committee, in its sole discretion, retains the right to prohibit
or allow participation in the initial Plan Year of eligibility for any of the
aforementioned Employees.
4.4 NO RIGHT TO PARTICIPATE. Subject to the terms of any
employment or severance benefits agreement, no Participant or other Employee
shall at any time have a right to be selected for participation in the Plan for
any Plan Year, despite having previously participated in the Plan.
ARTICLE 5. AWARD DETERMINATION
5.1 PERFORMANCE MEASURES AND PERFORMANCE GOALS. Prior to the
beginning of each Plan Year, or as soon as practicable thereafter, the
Committee shall select performance measures and shall establish performance
goals for that Plan Year. Except as provided in Article 8 herein, the
performance measures may be based on any combination of corporate, divisional,
and/or individual goals.
For each Plan Year, the Committee shall establish ranges of
performance goals which will correspond to various levels of Award
Opportunities. Each performance goal range shall include a level of performance
at which one hundred percent (100%) of the Target Incentive Award shall be
earned. In addition, each range shall include levels of performance above and
below the one hundred percent (100%) performance level.
After the performance goals are established, the Committee will align
the achievement of the performance goals with the Award Opportunities (as
described in Section 5.2 herein), such that the level of achievement of the
preestablished performance goals at the end of the Plan Year will determine the
Final Awards. Except as provided in Article 8 herein, the Committee shall have
the authority to exercise subjective discretion in the determination of Final
Awards, as well as the authority to delegate the ability to exercise subjective
discretion in this respect.
5.2 AWARD OPPORTUNITIES. Prior to the beginning of each Plan Year,
the Committee shall establish, in writing, Award Opportunities which correspond
to various levels of achievement of the preestablished performance goals. The
established Award Opportunities shall vary in relation to the job
classification of each Participant. Except as provided in Article 8 herein, in
the event a
5
<PAGE> 55
Participant changes job levels during a Plan Year, the Participant's Award
Opportunity may be adjusted to reflect the amount of time at each job level
during the Plan Year.
5.3 ADJUSTMENT OF PERFORMANCE GOALS AND AWARD OPPORTUNITIES. Once
established, performance goals normally shall not be changed during the Plan
Year. However, except as provided in Article 8 herein, if the Committee
determines that external changes or other unanticipated business conditions
have materially affected the fairness of the goals, then the Committee may
approve appropriate adjustments to the performance goals (either up or down)
during the Plan Year as such goals apply to the Award Opportunities of
specified Participants. In addition, except as provided in Article 8, the
Committee shall have the authority to adjust the Final Award determinations,
upward or downward, based upon any objective or subjective criteria it deems
appropriate.
Notwithstanding any other provision of this Plan, in the event of any
change in corporate capitalization, such as a stock split, or a corporate
transaction, such as any merger, consolidation, separation, including a
spin-off, or other distribution of stock or property of the Company, any
reorganization (whether or not such reorganization comes within the definition
of such term in Code Section 368), or any partial or complete liquidation of
the Company, such adjustment shall be made in the Award Opportunities and/or
the performance measures or performance goals related to then-current
performance periods, as may be determined to be appropriate and equitable by
the Committee, in its sole discretion, to prevent dilution or enlargement of
rights; provided, however, that subject to Article 8 herein, any such
adjustment shall not be made if it would eliminate the ability of Award
Opportunities held by Named Executive Officers to qualify for the
Performance-Based Exception.
5.4 FINAL AWARD DETERMINATIONS. At the end of each Plan Year,
Final Awards shall be computed for each Participant as determined by the
Committee. Subject to the terms of Article 8 herein, Final Award amounts may
vary above or below the Target Incentive Award, based on the level of
achievement of the preestablished individual performance goals and/or
discretionary factors.
5.5 AWARD LIMIT. The Committee may establish guidelines governing
the maximum Final Awards that may be earned by Participants (either in the
aggregate, by Employee class, or among individual Participants) in each Plan
Year. The guidelines may be expressed as a percentage of Company-wide goals or
financial measures, or such other measures as the Committee shall from time to
time determine; provided, however, that the maximum payout with respect to a
Final Award payable to any one Participant in connection with performance in
any one Plan Year shall be one million two hundred fifty thousand dollars
($1,250,000).
5.6 THRESHOLD LEVELS OF PERFORMANCE. The Committee may establish
minimum levels of performance goal achievement, below which no payouts of Final
Awards shall be made to any Participant.
6
<PAGE> 56
ARTICLE 6. PAYMENT OF FINAL AWARDS
6.1 FORM AND TIMING OF PAYMENT. Unless a deferral election is made
by a Participant pursuant to Section 6.2 herein, each Participant's Final Award
shall be paid in cash in two installments. The first installment will be paid
prior to the end of the fiscal year. The amount of the first installment will
be equal to 80 percent of an estimated Final Award which is based on projected
performance to the end of the Plan Year. The final installment amount will
equal the Final Award minus the first installment, and it will be paid within
seventy-five (75) calendar days after the end of each Plan Year.
6.2 DEFERRAL OF FINAL AWARD PAYOUTS. The Committee may permit a
Participant to defer such Participant's receipt of the payment of cash that
would otherwise be due pursuant to his or her Final Award or estimated Final
Award. If any such deferral election is required or permitted, the Committee
shall, in its sole discretion, establish rules and procedures for such payment
deferrals, including but not limited to rules and procedures for the accrual of
interest on such deferrals.
6.3 UNSECURED INTEREST. No participant or any other party claiming
an interest in amounts earned under the Plan shall have any interest whatsoever
in any specific asset of the Company. To the extent that any party acquires a
right to receive payments under the Plan, such right shall be equivalent to
that of an unsecured general creditor of the Company.
ARTICLE 7. TERMINATION OF EMPLOYMENT
7.1 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
RETIREMENT. In the event a Participant's employment is terminated by reason of
death, Disability, or Retirement, the Final Award determined in accordance with
Section 5.4 herein shall be a prorated amount for the portion of the Plan Year
that the Participant was employed by the Company, computed as determined by the
Committee. In the case of a Participant's Disability, the employment
termination shall be deemed to have occurred on the date that the Committee
determines the definition of Disability to have been satisfied.
The Final Award thus determined shall be paid within seventy-five (75)
calendar days following the end of the Plan Year in which employment
termination occurs.
7.2 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event a
Participant's employment is terminated for any reason other than death,
Disability, or Retirement (of which the Committee shall be the sole judge), all
of the Participant's rights to a Final Award for the Plan Year then in progress
shall be forfeited. However, the Committee, in its sole discretion, may pay a
full or prorated award for the portion of the Plan Year that the Participant
was employed by the Company, computed as determined by the Committee.
7
<PAGE> 57
ARTICLE 8. NAMED EXECUTIVE OFFICERS
8.1 APPLICABILITY OF ARTICLE 8. The provisions of this Article 8
shall apply only to Named Executive Officers. In the event of any
inconsistencies between this Article 8 and the other Plan provisions as they
pertain to Named Executive Officers, the provisions of this Article 8 shall
control.
8.2 ESTABLISHMENT OF AWARD OPPORTUNITIES. Except as provided in
Section 8.8 herein, Award Opportunities for Named Executive Officers shall be
established as a function of each Named Executive Officer's Base Salary (as
defined below). Prior to the beginning of each Plan Year, the Committee shall
establish, in writing, various levels of Final Awards which will be paid with
respect to specified levels of attainment of the preestablished performance
goals.
For purposes of this Article 8, "Base Salary" shall mean, as to any
specific Plan Year, a Participant's regular annual salary rate as of the later
of (i) the first day of the Plan Year or (ii) the first date such Employee
becomes eligible to participate in the Plan. Regular salary shall not be
reduced by any salary reduction contributions made to any defined contribution
plan or other deferred compensation plans of the Company, but shall not include
any payments under this Plan or any other bonuses, incentive pay, or special
awards.
8.3 NO PARTIAL PLAN YEAR PARTICIPATION. A Named Executive Officer
who becomes eligible after the beginning of a Plan Year may first participate
in the Plan for the succeeding Plan Year.
8.4 COMPONENTS OF AWARD OPPORTUNITIES. Each Named Executive
Officer's Award Opportunity shall be based on: (i) the Named Executive
Officer's Target Incentive Award; (ii) the potential Final Awards corresponding
to various levels of achievement of the preestablished performance goals, as
established by the Committee; and (iii) Company performance in relation to the
preestablished performance goals.
8.5 NO MID-YEAR CHANGE IN AWARD OPPORTUNITIES. Except as provided
in Section 8.8 herein, each Named Executive Officer's Final Award shall be
based exclusively on the Award Opportunity levels established by the Committee
before the first day of each Plan Year or such other period as may be permitted
by the provisions of Section 162(m).
8.6 NONADJUSTMENT OF PERFORMANCE GOALS. Except as provided in
Section 8.8 herein, performance goals shall not be changed following their
establishment, and Named Executive Officers shall not receive any payout when
the minimum performance goals are not met or exceeded.
8.7 INDIVIDUAL PERFORMANCE AND DISCRETIONARY ADJUSTMENTS. Except
as provided in Section 8.8 herein, subjective evaluations of individual
performance of Named Executive Officers shall not be reflected in their Final
Awards. However, the Committee shall have the discretion to decrease or
eliminate the amount of the Final Award otherwise payable to a Named Executive
Officer.
8
<PAGE> 58
8.8 POSSIBLE MODIFICATIONS. If the Committee determines that Code
Section 162(m) and the Regulations thereunder will not adversely affect the
deductibility for federal income tax purposes of any amount paid under the Plan
by permitting greater discretion and/or flexibility with respect to Award
Opportunities granted to Named Executive Officers pursuant to this Article 8,
then the Committee may, in its sole discretion, apply such greater discretion
and/or flexibility to such Award Opportunities as is consistent with the terms
of this Plan, and without regard to the restrictive provisions of this Article
8.
In the event the Committee determines that compliance with Code
Section 162(m) is not required or appropriate with respect to any Award
Opportunities granted or to be granted under the Plan, then compliance with
Code Section 162(m) will not be required (for example, if such a determination
is made, the performance measures specified in Section 8.4 herein need not be
the only determinants of Final Awards, and subjective discretion may be applied
to increase the Final Awards of Named Executive Officers). In addition, in the
event that changes are made to Code Section 162(m) to permit greater
flexibility with respect to any Award Opportunities under the Plan, the
Committee may, subject to this Article 8, make any adjustments it deems
appropriate.
ARTICLE 9. RIGHTS OF PARTICIPANTS
9.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit
in any way the right of the Company to terminate any Participant's employment
at any time, nor confer upon any Participant any right to continue in the
employ of the Company.
9.2 NONTRANSFERABILITY. No right or interest of any Participant in
the Plan shall be assignable or transferable, or subject to any lien, directly,
by operation of law or otherwise, including, but not limited to, execution,
levy, garnishment, attachment, pledge, and bankruptcy.
ARTICLE 10. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death
before he or she receives any or all of such benefit. Each designation will
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when filed by the
Participant in writing with the Committee during his or her lifetime. In the
absence of any such designation, benefits remaining unpaid at the Participant's
death shall be paid to the Participant's estate.
ARTICLE 11. CHANGE IN CONTROL
In the event of a Change in Control, each Participant shall be
entitled to a pro rata payment of his or her Target Incentive Award for the
Plan Year during which such Change in Control occurs. Such proration shall be
determined as a function of the number of days within the Plan Year prior to
the effective date of the Change in Control, in relation to three hundred
sixty-five (365). Such
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amount shall be paid in cash to each Participant within thirty (30) days after
the effective date of the Change in Control.
ARTICLE 12. AMENDMENT, MODIFICATION, AND TERMINATION
The Committee, in its sole discretion, without notice, at any time and
from time to time, may modify or amend, in whole or in part, any or all of the
provisions of the Plan, or suspend or terminate it entirely; provided, however,
that no such modification, amendment, suspension, or termination may, without
the consent of a Participant (or his or her beneficiary in the case of the
death of the Participant), materially reduce the right of a Participant (or his
or her beneficiary as the case may be) to a payment or distribution hereunder
to which he or she is entitled.
ARTICLE 13. 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 Company against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her 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 taken or failure to act
under the Plan, and against and from any and all amounts paid by him or her in
settlement thereof, with the Company's approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against
him or her, provided he or she shall give the Company 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
Company's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.
ARTICLE 14. MISCELLANEOUS
14.1 WITHHOLDING TAXES. The Company shall have the right to deduct
from all payments under the Plan any Federal, state, local, or other
governmental taxes required by law to be withheld with respect to such
payments.
14.2 GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular, and the singular shall include the plural.
14.3 SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
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14.4 COSTS OF THE PLAN. All costs of implementing and administering
the Plan shall be borne by the Company.
14.5 SUCCESSORS. All obligations of the Company under the Plan
shall be binding upon and inure to the benefit of any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of the Company.
14.6 REQUIREMENTS OF LAW. The granting of Award Opportunities under
the Plan shall be subject to all applicable laws, rules, and regulations, and
to such approvals by any governmental agencies or national securities exchanges
as may be required.
14.7 GOVERNING LAW. To the extent not preempted by United States
federal law, the Plan, and all agreements hereunder, shall be governed by and
construed in accordance with the laws of the State of Georgia.
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APPENDIX B
ROADMASTER INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ROADMASTER
INDUSTRIES, INC. (THE "COMPANY") IN CONNECTION WITH THE COMPANY'S ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON JUNE 14, 1995.
The undersigned hereby appoints Henry Fong, Edward E. Shake and Jeff L.
Hinton and each of them, with full power of substitution as proxies and
attorneys-in-fact on behalf and in the name of the undersigned to represent the
undersigned, at the 1995 Annual Meeting of Stockholders of Roadmaster
Industries, Inc. to be held on June 14, 1995 at 10:00 a.m., local time at the
showroom of the Company located at 250 Spring Street, N.W., Suite 3 South,
Atlanta, Georgia 30303 and at any adjournment thereof with respect to such
business as may properly come before the meeting or any and all adjournments
thereof and to vote all shares of stock which the undersigned would be entitled
to vote if then and there personally present.
The proxies appointed hereby are instructed to vote as indicated herein on
the following proposals as more fully described in the Company's Notice of
Meeting of Stockholders and Proxy Statement, each dated May 13, 1995, receipt of
which is hereby acknowledged, and in their discretion on any other business
which may properly come before the meeting or any adjournment thereof. This card
also provides voting instructions for shares held in the various Employee Stock
Ownership Plans of the Company and its subsidiaries as described in the Proxy
Statement.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE NOMINEES
SPECIFIED IN AGENDA ITEM NO. 1 AND FOR THE PROPOSALS SPECIFIED IN AGENDA ITEM
NOS. 2 THROUGH 5, AND THE PROXY WILL BE SO VOTED UNLESS OTHERWISE SPECIFIED.
1. To elect Henry Fong, Edward E. Shake, Louis J. Conti, James H. Rand, Stephen
P. Bradley, John D. Phillips, Clay C. Long, Michael P. Marshall and Carl E.
Sanders as directors of the Company to serve until the next Annual Meeting of
Stockholders and until their successors are elected and qualified;
<TABLE>
<S> <C>
/ / FOR all nominees (except as marked to the contrary below) / / WITHHOLD authority to vote for the nine nominees
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided below:
</TABLE>
- - --------------------------------------------------------------------------------
2. To authorize the Key Employee Stock Incentive Plan.
/ / FOR / / AGAINST / / ABSTAIN
(Continued and to be signed on reverse side)
(Continued from other side)
3. To approve the performance goals for Named Executive Officers under the new
Short Term Incentive Plan.
/ / FOR / / AGAINST / / ABSTAIN
4. To authorize the Directors Restricted Stock Plan.
/ / FOR / / AGAINST / / ABSTAIN
5. To ratify the selection by the Company's Board of Directors of Arthur
Andersen LLP, independent auditors, to audit the accounts of the Company and
its subsidiaries for 1995;
/ / FOR / / AGAINST / / ABSTAIN
all as set forth in the Proxy Statement.
Please mark, then date and sign this proxy, exactly as your name(s) appear
hereon, and return this entire proxy card in the enclosed postage paid envelope.
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, guardian or in any other fiduciary
capacity, please give full title as such. If a corporation, please sign in full
corporate name by the president or other authorized officer. If a partnership,
please sign in full partnership name by authorized person.
--------------------------------
Signature
--------------------------------
Signature if Held Jointly
Dated:
-------------------------------,
1995
If you also expect to attend
the stockholders' meeting, the
Board of Directors request you
check the box below.
/ / I/we plan to attend the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS INDICATED HEREON OR IT WILL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE BOARD OF DIRECTORS FOR THE NOMINEES SPECIFIED IN AGENDA
ITEM NO. 1 AND FOR THE PROPOSALS SPECIFIED IN AGENDA ITEM NOS. 2 THROUGH 5.
