-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, COktYBLxLBp9QG76lkaxZwZCXW+TM3gRp+E5GrMffVZXp8n6rSpoBJGZ3XPHUTBL hxYZd66yLQVQwrOhyhHlVg== 0000950152-96-001521.txt : 19970520 0000950152-96-001521.hdr.sgml : 19970520 ACCESSION NUMBER: 0000950152-96-001521 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960523 FILED AS OF DATE: 19960416 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARK OHIO INDUSTRIES INC CENTRAL INDEX KEY: 0000076282 STANDARD INDUSTRIAL CLASSIFICATION: 3460 IRS NUMBER: 346520107 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-03134 FILM NUMBER: 96547745 BUSINESS ADDRESS: STREET 1: 20600 CHAGRIN BLVD STREET 2: 600 TOWER EAST CITY: CLEVELAND STATE: OH ZIP: 44122 BUSINESS PHONE: 2169919700 MAIL ADDRESS: STREET 1: 20600 CHAGRIN BLVD STREET 2: 600 TOWER EAST CITY: CLEVELAND STATE: OH ZIP: 44122 FORMER COMPANY: FORMER CONFORMED NAME: GROWTH INTERNATIONAL INC DATE OF NAME CHANGE: 19730404 FORMER COMPANY: FORMER CONFORMED NAME: DISCOUNT CENTERS INC DATE OF NAME CHANGE: 19680605 FORMER COMPANY: FORMER CONFORMED NAME: PARK DROP FORGE CO DATE OF NAME CHANGE: 19670723 DEF 14A 1 PARK OHIO DEF 14A 1 - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A (RULE 14A-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the registrant /X/ Filed by a party other than the registrant / / Check the appropriate box: / / Preliminary proxy statement /X/ Definitive proxy statement / / Definitive additional materials / / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12 PARK-OHIO INDUSTRIES, INC. (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (NAME OF PERSON(S) FILING PROXY STATEMENT) Payment of filing fee (Check the appropriate box): /X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2). / / $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). / / Fee computed on table below per Exchange Act Rules 14a-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: (4) Proposed maximum aggregate value of transaction: / / 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: - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- 2 PARK-OHIO INDUSTRIES, INC. 23000 EUCLID AVENUE EUCLID, OHIO 44117 NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS Notice is hereby given that the 1996 annual meeting of shareholders of Park-Ohio Industries, Inc., an Ohio corporation (the "Company"), will be held at the Company's Auditorium, 23000 Euclid Avenue, Euclid, Ohio, on Thursday, May 23, 1996, at 4:00 P.M., Cleveland Time, for the following purposes: 1. To elect four directors, the names of whom are set forth in the accompanying proxy statement, to serve for a term expiring at the annual meeting of shareholders in 1998; 2. To consider and vote upon a proposal to approve the one time grant to Mr. Crawford, Chairman and Chief Executive Officer, of a non-statutory stock option to purchase 500,000 shares of Common Stock; 3. To consider and vote upon a proposal to approve the adoption of the Company's 1996 Non-employee Director Stock Option Plan; 4. To consider and vote upon a proposal to ratify the appointment of Ernst & Young LLP as the Company's independent auditors for 1996; and 5. To act on such other matters as may be properly brought before the annual meeting or any adjournments, postponements or continuations thereof. Only shareholders of record at the close of business on April 10, 1996, are entitled to notice of and to vote at the meeting. All shareholders are invited to attend the annual meeting. To ensure your representation at the annual meeting, however, you are urged to mark, sign and return the enclosed proxy in the accompanying envelope, regardless of whether you expect to attend the annual meeting. No postage is required if mailed in the United States. Any shareholder attending the annual meeting may vote in person even if such shareholder has returned a proxy. By Order of the Board of Directors RONALD J. COZEAN Secretary and General Counsel April 17, 1996 3 PARK-OHIO INDUSTRIES, INC. 23000 EUCLID AVENUE EUCLID, OHIO 44117 PROXY STATEMENT GENERAL INFORMATION This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors (the "Board") of the Company to be voted at the annual meeting of shareholders of the Company to be held at the Company's Auditorium, 23000 Euclid Avenue, Euclid, Ohio, on Thursday, May 23, 1996, at 4:00 P.M., Cleveland Time, and any and all adjournments, postponements or continuations thereof. This proxy statement and the accompanying proxy were first mailed to shareholders on or about April 17, 1996. A shareholder giving a proxy may revoke it, without affecting any vote previously taken, by a later appointment received by the Company or by giving notice to the Company in writing or in open meeting. Attendance at the meeting will not in itself revoke a proxy. Shares represented by properly executed proxies will be voted at the meeting. If a shareholder has specified how the proxy is to be voted with respect to a matter listed on the proxy it will be voted in accordance with such specifications, and if no specification is made the executed proxy will be voted FOR the election of the nominees for directors and FOR the other proposals listed on the proxy; provided, however, that if the election of directors is by cumulative voting, the persons appointed by the accompanying proxy intend to cumulate the votes represented by proxies they receive and distribute such votes in accordance with their best judgment. Under the General Corporation Law of Ohio, cumulative voting means that each shareholder is entitled to a number of votes equal to the number of shares owned by such shareholder multiplied by the number of directors to be elected. Each shareholder may cast all of his or her votes for a single nominee or may distribute his or her votes among as many nominees as he or she sees fit. Shareholders will have cumulative voting if notice in writing is given by any shareholder to the President or any Vice President or the Secretary of the Company, not less than forty-eight hours before the time fixed for holding the meeting, that the shareholder desires that the voting for election of directors be cumulative, and if an announcement of the giving of such notice is made upon the convening of the meeting. Such announcement may be made by the Chairman or the Secretary of the Company or by or on behalf of the shareholder giving such notice. The record date for the determination of shareholders entitled to notice of and to vote at the 1996 Annual Meeting is April 10, 1996. As of March 31, 1996, there were issued and outstanding 10,969,331 shares of Common Stock of the Company. Each share of Common Stock has one vote. So far as the Company is aware, no matters other than those described in this proxy statement will be presented to the meeting for action on the part of the shareholders. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote the shares to which the proxy relates thereon in accordance with their best judgment. Abstentions will be counted as present at the meeting for purposes of determining a quorum and will not be counted as voting, except as otherwise required by law and indicated herein. 1 4 The cost of soliciting proxies, including the charges and expenses incurred by persons holding shares in their name as nominee for the forwarding of proxy materials to the beneficial owners of such shares, will be borne by the Company. Proxies may be solicited by officers and employees of the Company, by letter, by telephone or in person. Such individuals will not be additionally compensated but may be reimbursed by the Company for reasonable out-of-pocket expenses incurred in connection therewith. In addition, the Company has retained Kissel-Blake Inc., a professional proxy soliciting firm, to assist in the solicitation of proxies and will pay such firm a fee, estimated to be $6,000, plus reimbursement of out-of-pocket expenses. ELECTION OF DIRECTORS The authorized number of directors of the Company is presently fixed at seven, divided into two classes: three members and four members, respectively. The directors in each class are elected for two-year terms so that the term of office of one class of directors expires at each annual meeting. The terms of office of Lewis E. Hatch, Jr., Thomas E. McGinty, Lawrence O. Selhorst, and Richard S. Sheetz will expire on the day of the 1996 annual meeting, upon election of successors. The persons named in the accompanying proxy will vote the proxies received by them (unless authority to vote is withheld) for the election of Messrs. Lewis E. Hatch, Jr., Thomas E. McGinty, Lawrence O. Selhorst, and Richard S. Sheetz to serve as directors for a two-year term and until their successors are elected and qualify. All nominees currently serve as directors of the Company. If any nominee is not available at the time of election, the proxy holders will vote in their discretion for a substitute or for holding a vacancy to be filled by the Board. The Company has no reason to believe any nominee will be unavailable. RECOMMENDATION AND VOTE REQUIRED The affirmative vote of a plurality of the shares of Common Stock represented at the meeting is required to elect Lewis E. Hatch, Jr., Thomas E. McGinty, Lawrence O. Selhorst, and Richard S. Sheetz as directors of the Company to serve until the 1998 annual meeting of shareholders. YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR LEWIS E. HATCH, JR., THOMAS E. MCGINTY, LAWRENCE O. SELHORST, AND RICHARD S. SHEETZ AS DIRECTORS. 2 5 Information is set forth below regarding the nominees for election and the directors who will continue in office after the meeting, including their ages, principal occupations during the past five years and other directorships presently held. Also set forth is the date each was first elected as a director of the Company or a corporation that has been merged into the Company.
NOMINEES FOR ELECTION YEAR - - --------------------------------------------------------------------------------------------------- FIRST PRINCIPAL OCCUPATION ELECTED TERM NAME AGE AND OTHER DIRECTORSHIPS DIRECTOR EXPIRING - - ---------------------- --- ------------------------------------------------------------------ -------- -------- Lewis E. Hatch, Jr.+# 69 Retired, Former Chairman and Chief Operating Officer, Rusch 1992 1998 International (international medical device company) from 1986 to July 1992; Director, Teleflex, Incorporated since 1976 Thomas E. McGinty*+ 66 Former Interim Chairman of the Board and Chief Executive Officer 1986 1998 of the Company from November, 1991 to June, 1992; President, Belvoir Consultants, Inc. (management consultants) since 1983 Lawrence O. Selhorst# 63 Chairman of the Board and Chief Executive Officer of American 1995 1998 Spring Wire Corporation (spring wire manufacturer) since 1968; former Chairman of the Board of RB&W Corporation from September, 1992 to March, 1995; Director, Lincoln Electric Company Richard S. Sheetz+ 71 Former Chairman of the Board and Chief Executive Officer of the 1964 1998 Company; Director, Cedar Fair Management Co. from 1987 to 1993; Special General Partner, Cedar Fair, L.P.
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE MEETING YEAR - - --------------------------------------------------------------------------------------------------- FIRST PRINCIPAL OCCUPATION ELECTED TERM NAME AGE AND OTHER DIRECTORSHIPS DIRECTOR EXPIRING - - ---------------------- --- ------------------------------------------------------------------ -------- -------- Edward F. Crawford* 56 Chairman and Chief Executive Officer of the Company since June 17, 1992 1997 1992; former Director of the Company from 1989 until 1991; Chairman and Chief Executive Officer, Crawford Group, Inc. (manufacturing businesses) since 1964; Director, Leaseway Transportation Corp. since 1993 John J. Murray 40 President and Chief Operating Officer of the Company since January 1992 1997 1, 1995; President of KMR Industries, Inc. (business consulting firm) since 1991; President and Chief Operating Officer, Rennoc Corporation (manufacturing company) from 1989 to 1990 James W. Wert*# 49 Senior Executive Vice President and Chief Investment Officer, 1992 1997 KeyCorp (financial services company) since August, 1995; Chief Financial Officer, KeyCorp from 1994 to 1995; Vice Chairman and Chief Financial Officer, Society Corporation (financial services company) from 1990 to 1994 - - --------------- *Member, Executive Committee +Member, Audit Committee #Member, Compensation and Stock Option Committee
3 6 BENEFICIAL OWNERSHIP OF SHARES The following table, furnished as of March 31, 1996, sets forth certain information with respect to beneficial ownership by each director, nominee, and named executive officer individually, and by all directors and named executive officers as a group of the Common Stock of the Company. Unless otherwise indicated, the nature of beneficial ownership consists of sole voting and investment power.
AMOUNT AND PERCENT NATURE OF OF NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS ----------------------------------------------------- -------------------- ------- Ronald J. Cozean..................................... 10,300(1) * Edward F. Crawford................................... 2,903,000(2) 26.0% Lewis E. Hatch, Jr................................... 20,060(3) * Thomas E. McGinty.................................... 110,000 1.0% John J. Murray....................................... 55,000(4) * Lawrence O. Selhorst................................. 31,701 * Richard S. Sheetz.................................... 75,340(5) * James S. Walker...................................... 41,100(6) * James W. Wert........................................ 16,000 * All Directors and Officers as a group (9 persons).... 3,262,501 29.2% - - --------------- * Less than 1% (1) Includes 10,000 shares subject to stock options currently exercisable. (2) Includes 8,500 shares owned by Mr. Crawford's wife as to which Mr. Crawford disclaims beneficial ownership, 22,500 shares owned by L'Accent De Provence over which Mr. Crawford shares voting and investment power, 100,000 shares subject to stock options currently exercisable, and 562,500 shares held by The Huntington Trust Company NA as escrow agent for the benefit of Mr. Crawford over which Mr. Crawford has sole voting power. (3) Includes 2,165 shares owned by Mr. Hatch's wife as to which Mr. Hatch disclaims beneficial ownership. (4) Includes 50,000 shares subject to stock options currently exercisable. (5) Includes 942 shares owned by a family member as to which Mr. Sheetz disclaims beneficial ownership. (6) Includes 40,000 shares subject to stock options currently exercisable.
4 7 The following table, furnished as of March 31, 1996, sets forth certain information concerning each person (or group of affiliated persons) who is known to the Company to be the beneficial owner of more than 5% of its outstanding Common Stock.
AMOUNT AND NATURE TITLE OF NAME AND ADDRESS OF BENEFICIAL PERCENT CLASS OF BENEFICIAL OWNER OWNERSHIP OF CLASS - - ------------- ----------------------------------------------- ----------------- -------- Common Stock Edward F. Crawford 2,903,000(1) 26.0% 26650 Lakeland Boulevard Cleveland, Ohio 44132 Common Stock FMR Corp. 730,450(2) 6.5% 82 Devonshire Street Boston, Massachusetts 02109 Common Stock Pioneering Management Corporation 955,600(3) 8.6% 60 State Street Boston, Massachusetts 02109 - - --------------- (1) Based on information set forth on Amendment No. 3 to Schedule 13D dated May 5, 1995. The total includes 22,500 shares owned by L'Accent De Provence of which Mr. Crawford is President and owner of 25% of its capital stock, 8,500 shares owned by Mr. Crawford's wife as to which Mr. Crawford disclaims beneficial ownership, 100,000 shares subject to stock options currently exercisable, and 562,500 shares held by The Huntington Trust Company NA over which Mr. Crawford has sole voting power. (2) Based on information set forth on Amendment No. 3 to Schedule 13G dated February 14, 1996. FMR Corp. is a parent holding company. Fidelity Management & Research Company, a wholly-owned subsidiary of FMR Corp. and an investment adviser, is the beneficial owner of 570,790 shares as a result of acting as investment adviser to several investment companies. Included in the 570,790 shares are 103,520 shares which would be owned upon the conversion of $2,000,000 principal amount of 7.25% Convertible Subordinated Debentures. FMR Corp., through the control of its subsidiaries, has sole power to dispose of the 570,790 shares. Power to vote these 570,790 shares resides with the Boards of Trustees of the various funds. Fidelity Management Trust Company, a wholly-owned subsidiary of FMR Corp. and a bank, is the beneficial owner of 159,660 shares as a result of its serving as investment manager of several institutional accounts. FMR Corp., through its control of Fidelity Management Trust Company, has sole voting and dispositive power over 149,460 shares of common stock and sole dispositive power over 10,200 shares. (3) Based on information set forth on Amendment No. 1 to Schedule 13G dated January 26, 1996. Pioneering Management Corporation has sole voting power and shared dispositive power over the 955,600 shares.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's officers and directors, and persons who own more than ten percent of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (the "Commission"). Officers, directors and greater than ten-percent shareholders are required by Commission regulation to furnish the Company with copies of all Section 16(a) forms they file. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to the Company during 1995 and Forms 5 and amendments thereto furnished to the Company with respect to 1995, no director, officer, beneficial owner of more than 10% of its outstanding Common Stock or any other person subject to 5 8 Section 16 of the Exchange Act, failed to file on a timely basis since January 1, 1995, reports required by Section 16(a) of the Exchange Act during 1995. CERTAIN MATTERS PERTAINING TO THE BOARD OF DIRECTORS ORGANIZATION AND COMPENSATION OF THE BOARD OF DIRECTORS During 1995, the Board held five meetings, the Audit Committee held two meetings, the Compensation and Stock Option Committee (the "Compensation Committee"), held one meeting and the Executive Committee held no meetings. During 1995, each of the directors attended at least 75% of the meetings of the Board and of any committee on which he served. During 1995, the Audit Committee consisted of Messrs. Hatch, McGinty and Sheetz. In addition to its functions set forth herein under the caption "APPOINTMENT OF INDEPENDENT AUDITORS," the Audit Committee reviews the adequacy of the Company's internal accounting controls and auditing procedures. During 1995, the Compensation Committee consisted of Messrs. Hatch, Selhorst and Wert. In addition to its functions set forth herein under "Stock Option Plan," the Compensation Committee recommends the compensation arrangements for the Company's officers. The Executive Committee consists of Messrs. Crawford, McGinty and Wert. The Executive Committee is empowered to exercise the powers of the Board between meetings of the Board. While there is no standing Nominating Committee, the Board selects nominees for election as directors and considers the performance of directors in determining whether to nominate them for re-election. During 1995, each director, except Mr. Crawford and Mr. Murray, was paid an annual retainer from the Company of $25,000. IF THE COMPANY'S 1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN IS APPROVED, ANNUAL RETAINERS WILL NO LONGER BE PAID. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION Messrs. Hatch, Selhorst and Wert served as members of the Compensation and Stock Option Committee of the Board during 1995. Messrs. Hatch, Selhorst and Wert are not current or former officers or employees of the Company. Mr. Wert is the Chief Investment Officer of KeyCorp, the parent of Society National Bank ("Society"). As of December 31, 1995, the Company was indebted to Society and four other banks in the amount of $94 million under a revolving credit and term loan. Society is also the trustee and investment advisor for the Company's Individual Account Retirement Plan and for two defined benefit plans covering certain hourly employees. The Company maintains its checking accounts at Society, and Society is the registrar and transfer agent for the Company's Common Stock. 6 9 EXECUTIVE COMPENSATION INTRODUCTION The following table sets forth the respective amounts of compensation of the Chief Executive Officer and the other named executive officers of the Company for each of the years 1993, 1994 and 1995. SUMMARY COMPENSATION TABLE
LONG-TERM ANNUAL COMPENSATION COMPENSATION -------------------------------- ------------ SECURITIES UNDERLYING NAME AND OPTIONS/ ALL OTHER PRINCIPAL POSITION YEAR(1) SALARY($) BONUS($) SARs(#)(2) COMPENSATION($)(3) - - ---------------------------- ------- -------- ------- ------------ ------------ Edward F. Crawford Chairman of the Board and Chief Executive Officer... 1995 225,000 0 0 164 1994 225,000 0 0 181 1993 225,000 0 0 336 John J. Murray President and Chief Operating Officer... 1995 250,000 50,000 150,000 1,725 James S. Walker Vice President and Chief Financial Officer... 1995 140,000 25,000 10,000 3,464 1994 140,000 30,000 5,000 3,181 1993 140,000 0 15,000 3,136 Ronald J. Cozean Secretary and General Counsel........... 1995 90,000 20,000 10,000 1,464 1994 45,000 0 20,000 91 - - --------------- (1) Mr. Murray became President and Chief Operating Officer of the Company on January 1, 1995. Mr. Cozean became Secretary and General Counsel of the Company on July 1, 1994. (2) Reflects the number of shares of Common Stock of the Company covered by stock options granted during the years. No stock appreciation rights ("SARs") were granted to the named executives during the years shown. (3) For the year ended December 31, 1995, All Other Compensation includes contributions made by the Company under the Company's Individual Account Retirement Plan as follows: Mr. Cozean, $1,300, and Mr. Walker, $3,300; and taxable portion of benefits under life insurance program, as follows: Mr. Cozean, $164, Mr. Crawford, $164, Mr. Murray, $1,725 and Mr. Walker, $164.
STOCK OPTION PLAN The Company has in effect an Amended and Restated 1992 Stock Option Plan (the "Plan") that permits the granting of "non-statutory stock options" and "incentive stock options." The Plan is administered by the Compensation and Stock Option Committee of the Board of Directors, which has authority to select officers and key employees to be participants and to determine the type and number of awards to be granted. The number of shares currently available for grant under the Plan shall not exceed 850,000, subject to certain adjustments. The option price for stock options granted under the Plan is fixed by the Committee, but in no event will it be less than the fair market value of the Common Stock on the date of grant. Options may be granted under the Plan at any time on or prior to February 18, 2002. 7 10 The following tables set forth information regarding stock option transactions with respect to the named executive officers during 1995.
OPTION/SAR GRANTS IN 1995 INDIVIDUAL GRANTS -------------------------------------------------------- NUMBER % OF OF TOTAL SECURITIES OPTIONS/ POTENTIAL REALIZABLE VALUE AT UNDERLYING SARS ASSUMED ANNUAL RATES OF STOCK OPTIONS/ GRANTED TO PRICE APPRECIATION FOR OPTION SARS EMPLOYEES EXERCISE OR TERM(3) GRANTED(#) IN FISCAL BASE EXPIRATION ------------------------------- NAME (1) YEAR PRICE($/SH)(2) DATE 0%($) 5%($) 10%($) - - ---------------------------- -------- ---------- -------------- --------- --- --------- --------- Ronald J. Cozean 10,000 4.6% 10.625 3/28/05 0 66,800 169,300 Edward F. Crawford 0 0 N/A N/A 0 0 0 John J. Murray 150,000 68.3% 10.625 3/28/05 0 1,002,000 2,539,500 James S. Walker 10,000 4.6% 10.625 3/28/05 0 66,800 169,300 - - --------------- (1) Options become exercisable to the extent of 33 1/3% of the subject shares after one year from the date of grant, 66 2/3% after two years from the date of grant, and 100% after three years from the date of grant. (2) Represents the NASDAQ closing price on the day prior to grant. (3) The assumed rates of appreciation are not intended to represent either past or future appreciation rates with respect to the Company's Common Stock. The rates are prescribed in the applicable Commission rules for use by all companies for the purpose of this table.
AGGREGATED OPTION/SAR EXERCISES IN 1995 AND DECEMBER 31, 1995 OPTION/SAR VALUES
VALUE OF NUMBER OF UNEXERCISED UNEXERCISED IN-THE-MONEY OPTIONS/SARs AT OPTIONS/SARs AT SHARES DECEMBER 31, 1995 DECEMBER 31, 1995 ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/ NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE(1) - - ---------------------------- ------------ --------- ----------------- ------------------- Ronald J. Cozean None N/A 6,667/ 23,333 $ 20,000/$ 95,000 Edward F. Crawford None N/A 100,000/ 0 $1,100,000/$ 0 John J. Murray None N/A 0/150,000 $ 0/$825,000 James S. Walker None N/A 36,667/ 18,333 $ 349,375/$ 98,750 - - --------------- (1) The "Value of Unexercised In-the-Money Options/SARs at December 31, 1995" was calculated by determining the difference between the fair market value of the underlying Common Stock at December 31, 1995 (the NASDAQ closing price of the Company's Common Stock on December 29, 1995 was $16.125) and the exercise price of the option. An option is "In-the-Money" when the fair market value of the underlying Common Stock exceeds the exercise price of the option.
8 11 REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE Mr. Crawford, Chairman and Chief Executive Officer, Mr. Murray, President and Chief Operating Officer, Mr. Walker, Chief Financial Officer and Mr. Cozean, Secretary and General Counsel, are the named executive officers of the Company. Messrs. Crawford, Murray, Walker and Cozean receive an annual salary and are eligible to receive stock options under the Company's Amended and Restated 1992 Stock Option Plan. The Stock Option Plan is administered by the Compensation and Stock Option Committee of the Board ("Committee") which is empowered to grant options to purchase Common Stock of the Company to officers and key employees of the Company and its subsidiaries. The Board believes stock options are an effective incentive which links compensation to shareholder return. Mr. Crawford's compensation was governed by the terms of an Employment Agreement dated June 17, 1992 which expired on June 17, 1995. The Employment Agreement provided for Mr. Crawford to receive an annual salary of $250,000. Consistent with the Company's rigorous cost-cutting program, Mr. Crawford voluntarily reduced his annual salary to $225,000 in 1993. Mr. Crawford did not receive any stock options during 1995. In connection with the expiration of the Employment Agreement, the Committee retained the services of Ernst & Young LLP to review Mr. Crawford's compensation. Ernst & Young advised the Committee that Mr. Crawford's current annual salary is significantly below that of chief executive officers of companies similar in size to the Company. The Committee approved, subject to shareholder approval, the grant of a non-statutory stock option to purchase 500,000 shares of Common Stock. The Committee chose to grant an option to Mr. Crawford rather than increase cash compensation in order to (i) incent Mr. Crawford to devote his utmost effort and skill to the betterment of the Company by allowing him to share in increases in the value of the Company, (ii) comply with Mr. Crawford's preference to receive stock-based compensation, and (iii) avoid the current expense of paying cash compensation. Further the Committee determined that, in an entrepreneurial company, it is appropriate to place a large portion of the CEO's compensation at risk. Thus, unless the share price increases from the date of grant, Mr. Crawford will receive no value from the option grant. Mr. Murray's compensation is governed by the terms of an Employment Agreement effective January 1, 1995. The Employment Agreement provides for (i) an annual salary of $250,000, (ii) a one-time option grant to purchase 150,000 shares of Common Stock, and (iii) other benefits generally provided to executive officers. Mr. Murray received a bonus of $50,000 during 1995. Mr. Walker's compensation for 1995 principally consisted of an annual salary of $140,000, which is identical to his salary for 1994, a bonus of $25,000, and 10,000 stock options. Mr. Cozean's compensation for 1995 principally consisted of an annual salary of $90,000, a bonus of $20,000, and 10,000 stock options. Mr. Crawford, based on his review of the performance of Mr. Walker and Mr. Cozean, recommended that Mr. Walker and Mr. Cozean receive stock options in accordance with the Company's Amended and Restated 1992 Stock Option Plan. Mr. Crawford recommended bonuses for Messrs. Cozean, Murray and Walker particularly for their efforts in connection with the Company's acquisition of RB&W Corporation. The Committee accepted Mr. Crawford's recommendations and granted the bonuses and options. During 1995, the members of the Committee were: Lewis E. Hatch, Jr. Lawrence O. Selhorst James W. Wert, Chairman 9 12 PERFORMANCE COMPARISONS The chart set forth below compares the cumulative total shareholder return of the Company for the five years ended December 31, 1995 to (a) the Total Return Index for the NASDAQ Stock Market (U.S. Companies), and (b) a group of peer companies selected by the Company on the basis of similar business lines and comparable market capitalization, number of employees, and total sales. In all cases shown, the chart assumes the investment of $100 on December 29, 1990 and the reinvestment of all dividends. COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN PARK-OHIO, NASDAQ STOCK MARKET (U.S. COMPANIES) AND SELF-DETERMINED PEER GROUP
NASDAQ Stock Measurement Period Market (U.S. Self-Determined (Fiscal Year Covered) Park Ohio Companies (1) Peer Group (2) 1990 100 100 100 1991 109 161 125 1992 182 187 182 1993 468 215 185 1994 468 210 171 1995 586 297 230 - - --------------- (1) The index is issued by the University of Chicago Graduate School of Business, Center for Research in Security Prices. (2) This peer group is comprised of ABS Industries Inc., Arden Industrial Products, Inc., Gehl Company, Walbro Corporation, Essef Corporation, Ameriwood Industries International Corporation, and Wyman Gordon Corporation. Companies were chosen based on similarity of Standard Industrial Classification codes and a combination of comparable market capitalization, number of employees, and total sales. The returns of each issuer have been weighted according to the respective company's stock market capitalization. Market capitalization is determined by price times shares outstanding at the close of the previous day. Mark Controls Corporation was removed from the peer group because information is no longer available. Arden Industrial Products, Inc. was added to the self-determined peer group this year as a consequence of the Company's acquisition of RB&W Corporation, but the addition had no material impact on the peer group results.
10 13 INFORMATION CONCERNING EXECUTIVE OFFICERS EXECUTIVE AGREEMENTS The Company entered into an employment agreement effective January 1, 1995 (the "Employment Agreement") with Mr. Murray in connection with Mr. Murray's joining the Company as President and Chief Operating Officer. Pursuant to the Employment Agreement, Mr. Murray is to be employed as President and Chief Operating Officer of the Company at a rate of $250,000 per year of employment, subject to discretionary increases by the Board. Mr. Murray is also entitled to all benefits generally provided to Company executive officers. Mr. Murray was granted a non-statutory stock option to purchase 150,000 shares of Common Stock. The option will terminate on March 21, 2005, or the cessation of Mr. Murray's employment with the Company, subject to provisions allowing for the conditional exercise of the option upon such cessation of employment. In the event of a "Change in Control of the Company," as defined in the option agreement, the option will become exercisable in full (whether or not exercisable at such time), and will remain exercisable until it expires pursuant to its terms. Mr. Murray's employment can be terminated under the Employment Agreement for death, incapacitating disability for at least six months, or for certain specific causes. In the event of termination for cause or by death, Mr. Murray shall receive only compensation earned and benefits accrued to the date of termination, and no severance pay. In the event of voluntary resignation, Mr. Murray shall receive a half of a year's salary as severance pay. In the event of termination without cause or for disability, Mr. Murray shall receive severance pay in the amount of one year's salary. Mr. Murray agreed that during the term of his employment and at all times thereafter, he will in no manner disclose any confidential information relating to the Company or any of its affiliates or shareholders except as directed by the Company. Mr. Murray also agreed to refrain for the term of his employment and for one year thereafter, from certain acts of competition or solicitation. RELATED TRANSACTIONS General Aluminum Mfg. Company, a wholly-owned subsidiary of the Company, leases space in two buildings in Conneaut, Ohio. GAMCO is leasing 70,000 square feet of a facility owned by Mr. Crawford at a monthly rent of $9,000 and is leasing a facility owned by Mrs. Crawford, consisting of 50,000 square feet, at a monthly rent of $3,000. The Company, through a wholly-owned subsidiary, purchased substantially all of the assets of The Ajax Manufacturing Company ("Ajax") for $1.5 million ($1,500,000) on August 31, 1995. Mr. Crawford and his son own 100 percent of the stock of Ajax. The non-employee directors approved the transaction after receiving a fairness opinion from Lovemann-Curtis, Inc. In connection with the acquisition, the Company's subsidiary entered into a lease agreement with respect to the building owned by Ajax. The annual rent is $250,000. The Board of Directors received an opinion from a Cleveland real estate company concerning the fairness of the terms of the lease. APPROVAL OF OPTIONS GRANTED TO CHAIRMAN AND CHIEF EXECUTIVE OFFICER As discussed more fully above in the "Report of the Compensation and Stock Option Committee," the Compensation and Stock Option Committee of the Board ("Committee") reviewed with the assistance of 11 14 Ernst & Young LLP the compensation paid to Mr. Crawford, Chairman and Chief Executive Officer in connection with the expiration of his employment agreement on June 17, 1995. Having concluded that Mr. Crawford is currently paid significantly less than chief executive officers of comparably sized companies, the Committee granted on February 22, 1996, subject to shareholder approval, a non-statutory stock option (the "Option") to purchase 500,000 shares of Common Stock at $13.625 per share which was the fair market value as of that date. The Option will vest in cumulative installments of 20 percent (100,000 shares) per year, and will have a term of fifteen years. The Option will terminate on the cessation of Mr. Crawford's employment with the Company, subject to provisions allowing for the conditional exercise of the option upon such cessation of employment. In the event of a "Change in Control of the Company," as defined in the Option Agreement, the Option will become exercisable in full (whether or not otherwise exercisable at such time), and will remain exercisable until it expires pursuant to its terms. The foregoing is only a summary of the material features of the Option Agreement. The full text of the Non-Statutory Stock Option Agreement is attached as Appendix A, and the foregoing summary is qualified in its entirety by reference to it. The closing price of a share of Common Stock on the NASDAQ National Market on April 5, 1996 was $17.3875. For a description of the federal income tax consequences of the issuance and exercise of a non-statutory stock option, please refer to page 13. RECOMMENDATION AND VOTE The affirmative vote of the holders of a majority of the shares of Common Stock present, or represented, and entitled to vote at the Annual Meeting is required for the approval of the Option granted to Mr. Crawford. Abstentions may be specified on the proposal and will be considered present at the Annual Meeting, but will not be counted as affirmative votes. Abstentions, therefore, will have the practical effect of voting against the proposal because the affirmative vote of a majority of the shares present at the Annual Meeting with respect to this matter is required to approve the proposal. Broker non-votes are considered not present at the Annual Meeting with respect to this and, therefore, will not be voted or have any effect on the proposal. YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE OPTION GRANTED TO MR. CRAWFORD. APPROVAL OF THE 1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN At its February 22, 1996 meeting, the Board of Directors adopted, subject to shareholder approval, the Company's 1996 Non-employee Director Stock Option Plan (the "1996 Plan"). Options were granted at the meeting to non-employee directors, pursuant to the 1996 Plan, subject to shareholder approval of the 1996 Plan. The following is a summary of the material features of the 1996 Plan. The full text of the 1996 Plan is attached as Appendix B, and the following summary is qualified in its entirety by reference to it. Purpose of the 1996 Plan. The purpose of the 1996 Plan is to advance the interests of the Company and its shareholders by aligning the interests of certain non-employee directors with both the success of the Company and the financial interests of its shareholders by encouraging stock ownership in the Company and thereby assuring that they have a proprietary interest in the Company's business. The options granted under the 1996 Plan will not qualify as Incentive Stock Options ("Non-Statutory Options"). IT IS THE INTENT OF THE BOARD OF DIRECTORS TO ISSUE THESE NON-STATUTORY OPTIONS IN LIEU OF PROVIDING ANY CASH COMPENSATION TO DIRECTORS. 12 15 Administration. The 1996 Plan shall be administered by the Compensation and Stock Option Committee ("Committee"), composed of not less than two directors appointed by the Board. The Board may also appoint one or more directors as alternate members of the Committee, who may take the place of any absent member or members at any meeting of the Committee. The members and alternate members of the Committee shall, at all times during their service as such, be "disinterested persons" within the meaning of Rule 16b-3(c)(2)(i) promulgated under the Exchange Act. The Committee shall have full power to construe and interpret the 1996 Plan, to establish rules for its administration and to grant options under the 1996 Plan. A majority of the Committee shall constitute a quorum, and the action of a majority of the members (including alternate members) of the Committee present at any meeting at which a quorum is present, or acts unanimously approved in writing by all members, shall be acts of the Committee. Shares. The aggregate number of shares of Common Stock of the Company ("Shares") for which options may be granted under the 1996 Plan shall not exceed 250,000, subject to such adjustment as the Compensation Committee, in its sole discretion, may determine is equitably required as a result of any change in the number or terms of Shares or of other securities into which Shares shall have been changed or for which they shall have been exchanged. Eligible directors will receive an annual option for 6,000 shares on the date of the Annual Meeting of Shareholders, except for the original grant which will be on the date the Board approves the 1996 Plan. The Shares to be issued upon exercise of options granted under the 1996 Plan shall be made available, at the discretion of the Board, from the authorized but unissued Shares or from Shares reacquired by the Company, including Shares purchased in the open market. Any Shares for which an option is granted hereunder which are released from such option for any reason shall be available for other options under the 1996 Plan. Eligibility and Transferability. Only non-employee directors are eligible to participate in the 1996 Plan. There are currently five non-employee directors. The number of persons receiving stock options may vary from year to year. It is not possible to state in advance the exact number or identity of such persons or the amount of such stock option grants. Except for limited circumstances provided for in the 1996 Plan, no option shall be transferable by the optionee, and options may be exercised during the employee's lifetime only by him or her. Option Price, Vesting and Exercise Period. The option price shall be 100 percent of the fair market value (as determined by the 1996 Plan) of the Shares covered by the option at the time the option is granted. Options granted under the 1996 Plan will vest six months after the date of grant. If a director holding an option ceases to be a director (other than due to death or after attainment of age 65), the period of exercise shall be six months from the date on which he ceased to be a director, and will be one year in the event of death or after attainment of age 65, but not later than the date of the expiration of the option. No option granted under the 1996 Plan may be exercised later than 10 years after the date on which the option is granted. The closing price of the Shares on the NASDAQ National Market on April 5, 1996 was $17.3875. Payment. Upon the exercise of an option, payment of the option price may be made in cash or Shares or a combination of cash and Shares. Certain Federal Income Tax Consequences of Non-Statutory Options. Counsel to the Company has advised that under current law the principal federal income tax consequences to the 1996 Plan participants and the Company of Non-Statutory Options granted under the 1996 Plan should be generally as set forth in the following summary. (a) No taxable income will result to a director upon the grant of a Non-Statutory Option. 13 16 (b) Except as noted below, upon the exercise of a Non-Statutory Option by a director, the director will recognize ordinary income in an amount equal to the excess of the fair market value of the Shares at the date of exercise over the option price. If payment of the option price is made by delivering Shares with a fair market value equal to such option price, the director will realize ordinary income in an amount equal to the fair market value of the "additional Shares" received (i.e., the excess of the number of Shares received over the number surrendered) less any cash paid on exercise of the option (which is the same amount of ordinary income as if the option price were paid entirely in cash). Such ordinary income is deductible by the Company on its tax return. (c) On the subsequent sale of Shares, capital gain or loss will generally be recognized in an amount equal to the difference between the tax basis thereof and the amount realized on such sale, assuming the Shares are held as capital assets. The tax basis of Shares acquired by a cash payment of the option price and the tax basis of any "additional Shares" received where the option price is paid by delivering Shares will be the fair market value thereof on the date of exercise. The tax basis of the Shares received equal in number to those surrendered where the option price is paid by delivering Shares will be the same as that of the Shares surrendered. If the Shares are held for more than one year, any such gain or loss will be treated as long-term capital gain or loss. The discussion set forth above with respect to Non-Statutory Options does not purport to be a complete analysis of all potential tax effects relevant to the recipients of options or the Company. It is based on federal tax law and interpretational authorities as of the date of this Proxy Statement, which are subject to change at any time. Option Agreement. The option agreement in which option rights are granted to an employee shall be in the applicable form (consistent with the 1996 Plan) from time to time approved by the Compensation Committee and shall be signed on behalf of the Company by an officer of the Company, and shall be dated as of the date of the granting of the option. Amendment of 1996 Plan. The Board shall have the right to amend, modify, suspend or terminate the 1996 Plan at any time; provided, however, that no such action shall, without the consent of any optionee, affect or in any way impair the rights of such optionee under any option theretofore granted under the 1996 Plan. In addition, no amendment or change shall be made in the 1996 Plan, without further shareholder approval, (a) increasing the total number of Shares as to which options may be granted under the 1992 Plan; (b) changing the minimum option price hereinbefore specified for the optioned Shares or otherwise materially increasing the benefits accruing to participants under the 1992 Plan; or (c) extend the period during which options may be exercised. Notwithstanding any other provision hereof, no action may be taken by the Company which will impair the validity of any option then outstanding. Expiration of 1996 Plan. Options may be granted under the 1996 Plan at any time on or prior to May 31, 2001, on which date the 1996 Plan shall expire but without affecting any options then outstanding. RECOMMENDATION AND VOTE The affirmative vote of the holders of a majority of the shares of Common Stock present or represented, and entitled to vote at the Annual Meeting is required for the approval of the 1996 Non-employee Director Stock Option Plan. Abstentions may be specified on the proposal and will be considered present at the Annual Meeting, but will not be counted as affirmative votes. Abstentions, therefore, will have the practical effect of voting against the proposal because the affirmative vote of a majority of the shares present at the Annual 14 17 Meeting with respect to this matter is required to approve the proposal. Broker non-votes are considered not present at the Annual Meeting with respect to this and, therefore, will not be voted or have any effect on the proposal. YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE 1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN. APPOINTMENT OF INDEPENDENT AUDITORS Subject to ratification by the shareholders, Ernst & Young LLP has been appointed as the independent auditors for the Company for the year 1996. The appointment of independent auditors is approved annually by the Board and subsequently submitted to the shareholders for ratification. The decision by the Board is based on the recommendation of the Audit Committee. In making its recommendation, the Audit Committee reviewed both the audit scope and estimated fees for the audit of the 1995 financial statements. Representatives of Ernst & Young LLP will attend the Annual Meeting, will have an opportunity to make a statement, if they so desire, and will be available to respond to appropriate shareholders' questions. The favorable vote of a majority of the shares voting on this proposal is required for ratification of this appointment. The persons named in the accompanying proxy intend to vote proxies received by them in favor of this proposal unless a choice "Against" or "Abstain" is specified. SHAREHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING Any shareholder who intends to present a proposal at the 1997 annual meeting and who wishes to have the proposal included in the Company's proxy statement and form of proxy for that meeting must, in addition to complying with the applicable laws and regulations governing the submission of such proposals, deliver the proposal to the Company for consideration not later than December 12, 1996. ANNUAL REPORT The Annual Report for the year 1995 has been mailed to shareholders. Additional copies may be obtained from the undersigned. PARK-OHIO INDUSTRIES, INC. RONALD J. COZEAN Secretary and General Counsel April 17, 1996 15 18 APPENDIX A PARK-OHIO INDUSTRIES, INC. NON-STATUTORY STOCK OPTION AGREEMENT THIS AGREEMENT, dated this 22nd day of February, 1996 (being the date this option is granted) by and between Park-Ohio Industries, Inc., an Ohio corporation, (the "Company") and Edward F. Crawford (the "Employee"), Chairman and Chief Executive Officer of the Company. Section 1. The Company hereby grants to the Employee, subject to shareholder approval at the next annual meeting of shareholders, the option of purchasing an aggregate of 500,000 shares of Common Stock of the Company at the price of $13.625 per share, subject to the terms and conditions of this Agreement. Section 2. The option rights are exercisable only if and after the Employee shall have remained in the employ of the Company for one year from the date this option is granted, whereupon such rights shall become exercisable to the extent of 20% of the aggregate number of shares above specified. Thereafter, the rights shall become exercisable to the extent of (i) 40% of the aggregate number of shares above specified on and after two years from the date hereof, (ii) 60% of the aggregate number of shares above specified on and after three years from the date hereof, (iii) 80% of the aggregate number of shares above specified on and after four years from the date hereof, and (iv) 100% of the aggregate number of shares above specified on and after five years from the date hereof. Section 3. This option is exercisable, during the lifetime of the Employee, only by him or his guardian or legal representative. The Employee's option rights and interests herein (including the right to exercise unexercised options) may not be assigned or transferred except that, (i) in the case of the Employee's death, such options, and other rights and interests, shall be transferable to the person or persons to whom the option shall have been transferred by will or the laws of descent and distribution, (ii) the Employee's option, and other rights and interests, may be transferred to (I) any trust or estate in which the original holder (or such holder's spouse or other immediate relative) has a substantial beneficial interest or (II) a spouse or other immediate relative of the original holder, and (iii) the Employee's options, and other rights and interests, may be transferred pursuant to a qualified domestic relations order (as defined in the Tax Code). The option so transferred shall continue to be subject to all the terms and conditions contained in this Agreement. Except as otherwise provided in Sections 5, 6 and 9, this option can be exercised only if the Employee has remained in the employ of the Company continuously from the date this option is granted. Section 4. Notwithstanding any other provision hereof, this option shall not be exercisable after the expiration of fifteen years from the date this option is granted, or upon such earlier date as provided in Sections 5, 6 and 9(a). Section 5. (a) If the Employee shall cease to be employed by the Company by reason of retirement in accordance with any retirement plan or policy of the Company then in effect, then the Employee, at any time within the three-month period following such cessation of employment (but within the fifteen-year period specified in Section 4), may exercise the option rights to the full extent not previously exercised, notwithstanding the provisions of Section 2. (b) If, at any time after the expiration of one year from the date this option is granted, the Employee shall cease to be employed by the Company by a reason other than the retirement in accordance with any 16 19 retirement plan or policy of the Company then in effect, the Employee, at any time within the one-month period following such cessation of employment (but within the fifteen-year period specified in Section 4) may exercise the option rights to the extent he was entitled to exercise the same immediately prior to such cessation of employment. Section 6. If, at any time after the expiration of one year from the date this option is granted, the Employee shall die while in the employ of the Company or he shall die within the three-month period available to him to exercise his option rights under the circumstances provided for in Section 5, then within the six months next succeeding his death (but within the fifteen-year period specified in Section 4), the person entitled by transfer, will or the applicable laws of descent and distribution may exercise the option rights to the extent that the Employee was entitled to exercise the same immediately prior to his death. Section 7. In consideration of the granting of this option, the Employee agrees to remain in the employ of the Company for a period of not less than one year from the date this option is granted, unless during said period his employment shall be terminated on account of incapacity or by the Company. Nothing herein contained shall limit or restrict any right which the Company would otherwise have to terminate the employment of the Employee with or without cause or to adjust his compensation. Section 8. Subject to the provisions of Section 9(a) of this Agreement, in the event that, during the term hereof and while the option as to any of the shares covered hereby shall remain unexercised, each of the outstanding shares of Common Stock of the Company (except shares held by dissenting stockholders) shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation, or for other property, whether through reorganization, recapitalization, stock split, combination of shares, merger or consolidation, or the Company shall issue a stock dividend, then the Employee, upon the subsequent exercise of his option to purchase shares hereunder, shall be entitled to receive, in addition to or in place of the shares specified in this Agreement as to which the option is then being exercised, but without additional cost, the shares and other securities or property which he would have held at the time of such exercise pursuant to all such changes, exchanges and stock dividends as if on the date of this Agreement he had been the record holder of the number of shares of Common Stock as to which this option is then being exercised and as if he had continuously thereafter retained said shares and/or all other shares and securities which would have been distributed in respect of or in lieu of said shares; provided that no fractional shares shall be issued under these provisions; and provided further that if in the opinion of the Compensation and Stock Option Committee the circumstances prevailing at the time of the exercise of the option rights make it impracticable to substitute or add other shares, securities, or property to the complete extent as above provided for, the Committee, at the time of the exercise of option rights, shall make such substitutions and adjustments so far as, in the opinion of counsel for the Committee (who may be counsel for the Company) are equitable and practicable at the time. Section 9. (a) If the Company shall liquidate or dissolve, or shall be a party to a merger or consolidation with respect to which it shall not be the surviving corporation, the Company shall give written notice thereof to the Employee at least thirty days prior thereto, and notwithstanding the provisions of Section 2, the Employee shall have the right within said thirty-day period (but within the fifteen-year period specified in Section 4) to exercise this option in full to the extent not previously exercised. To the extent that this option shall not have been exercised on or prior to the effective date of such liquidation, dissolution, merger or consolidation, it shall terminate on said date, unless it is assumed by another corporation. 17 20 (b) Notwithstanding the provisions of Section 2, the option granted hereby shall become exercisable in full to the extent not previously exercised upon the occurrence of any Change in Control of the Company. For purposes of this Agreement, a "Change in Control of the Company" (assuming such event has not been previously reported) shall mean a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended ("Exchange Act"); provided, without limitation, that a Change in Control of the Company shall be deemed to have occurred if and at such times as (i) any "person" within the meaning of Section 14(d) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of securities of the Company representing 34% or more of the combined voting power of the Company's then outstanding securities, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof unless the election, or the nomination for election by the Company's shareholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. Section 10. Subject to the terms and conditions hereof, this option may be exercised by delivering to the Company at the office of its Treasurer a written notice, signed by the person entitled to exercise the option, of the election and stating the number of shares such person then elects to purchase. Such notice shall be accompanied by the payment in full of the purchase price of the shares then to be purchased. Payment of the full option exercise price may be made, at the election of the Optionee (a) in cash, (b) in Common Stock of the Company, or (c) in any combination of cash and Common Stock of the Company. Common Stock of the Company used in payment of the purchase price shall be valued at its closing bid price on NASDAQ on the trading day immediately preceding the date of exercise. The Employee agrees to pay in cash, within the time period specified by the Company, the amount (if any) required to be withheld for federal, state or local tax purposes on account of the exercise of the option or to make such arrangements to satisfy such withholding requirements as the Company deems appropriate. In the event the option is exercised by any person other than the Employee, evidence satisfactory to the Company that such person has the right to exercise the option must accompany such notice and payment. Subject to the right of the Company to postpone the date upon which exercise of this option becomes effective, as provided in Section 11 hereof, upon the due exercise of the option as hereinbefore provided, the Company shall issue in the name of the person exercising the option, and deliver to him, a certificate or certificates for the shares in respect of which the option shall have been so exercised. The Employee agrees neither he nor any other holder of this option shall have any rights as a stockholder or otherwise in respect of any of the shares as to which the option shall not have been effectively exercised as provided herein. Section 11. This option shall not be exercisable if such exercise would violate: (a) Any applicable state securities law; (b) Any applicable registration or other requirements under the Securities Act of 1933, as amended ("Securities Act"), Exchange Act, or the listing requirements of any stock exchange; or (c) Any applicable legal requirement of any other governmental authority. The Company agrees to make reasonable efforts to comply with the foregoing laws and requirements so as to permit the exercise of this option. Furthermore, if a Registration Statement with respect to the shares to be issued upon the exercise of this option is not in effect or if counsel for the Company deems it necessary or desirable in order to avoid possible violation of the Securities Act, the Company may require, as a condition to its issuance and delivery of certificates for the shares, the delivery to the Company of a commitment in writing by the person exercising the option that at the time of such exercise it is his intention to acquire such shares 18 21 for his own account for investment only and not with a view to, or for resale in connection with, the distribution thereof; that such person understands the shares may be "restricted securities" as defined in Rule 144 of the Securities and Exchange Commission; and that any resale, transfer or other disposition of said shares will be accomplished only in compliance with Rule 144, the Securities Act, or the other Rules and Regulations thereunder. The Company may place on the certificates evidencing such shares an appropriate legend reflecting the aforesaid commitment and may refuse to permit transfer of such certificates until it has been furnished evidence satisfactory to it that no violation of the Securities Act or the Rules and Regulations thereunder would be involved in such transfer. Section 12. References herein to the Company shall include all parents and subsidiaries of the Company, determined consistently with the definitions of parent and subsidiary in Section 424 of the Internal Revenue Code of 1986 and the relevant Treasury Department Regulations. Section 13. BY EXECUTING AND DELIVERING THIS AGREEMENT, THE EMPLOYEE ACKNOWLEDGES AND AGREES THAT, AS IN THE PAST, HE IS AN EMPLOYEE AT WILL OF THE COMPANY. IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate as of the day and year first-above written. PARK-OHIO INDUSTRIES, INC. By: /s/ John J. Murray -------------------------------------- John J. Murray, President /s/ Edward F. Crawford -------------------------------------- Edward F. Crawford 19 22 APPENDIX B PARK-OHIO INDUSTRIES, INC. 1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN 1. PURPOSES The purposes of the Park-Ohio Industries, Inc. 1996 Non-employee Director Stock Option Plan (the "Plan") are to promote the interests of Park-Ohio Industries, Inc. (the "Company") and its subsidiaries by providing an incentive to attract and retain qualified directors for the board of the Company based upon the success and growth of the Company and its subsidiaries and by furthering the identity of interests of the directors and the stockholders of the Company. 2. SHARES SUBJECT TO THE PLAN The maximum aggregate number of shares as to which stock options may at any time be granted under the Plan (the "Options") shall be two hundred fifty thousand (250,000) shares of the Company's common stock, par value $1.00 per share (the "Common Stock"), subject to adjustment in accordance with Section 10. Common Stock issued upon exercise of Options may be either authorized but unissued shares or shares previously issued and reacquired by the Company. If and to the extent Options terminate, expire or are cancelled without having been exercised, the shares subject to such Options shall again be available for purposes of, and may be optioned under, the Plan. All Options shall be "nonqualified" under and for purposes of the Internal Revenue Code of 1986, as amended ("Tax Code"). 3. ELIGIBILITY FOR PARTICIPATION Any member of the Company's Board of Directors ("Board") who is not an employee of the Company or any of its subsidiaries shall be eligible to participate in the Plan. Nothing contained in the Plan shall be construed to limit the right of the Company to grant options to purchase its Common Stock otherwise than under the Plan or to grant a particular person more than one Option. 4. GRANTING OF OPTIONS (a) Each director of the Company who is eligible to participate in this Plan on the date of the Annual Meeting of Shareholders of any year, that is whose term of office will continue for at least the year following such Annual Meeting, shall be granted an Option as of such date, with the number of shares of Common Stock subject to such Option to be equal to 6,000. Each Option shall have an exercise price per share equal to the average Fair Market Value per share of Common Stock for the five (5) trading days immediately preceding the date as of which such Option is granted. Each Option grant to each director shall be in lieu of any and all retainer fees (and meeting fees) otherwise payable to the director for his service as such and/or on any committees of the Board for the 12 month period beginning on the date of the Annual Meeting of Shareholders as of which the Option is granted. Except as otherwise provided herein, all Options granted pursuant to the Plan shall become exercisable six months after the date of grant. (b) For purposes of the Plan, the Fair Market Value of a share of Common Stock as of any trading day shall be the reported closing price for a share of Common Stock on the NASDAQ National Market. 20 23 5. TERM OF OPTIONS Except as provided in Section 7, Options granted hereunder shall be exercisable for a term of ten years from the date of grant (the "Expiration Date"). Notwithstanding anything to the contrary contained herein, no Option shall be exercisable earlier than six months after its date of grant. 6. EXERCISE OF OPTIONS (a) The exercise price of the shares as to which an Option shall be exercised shall be paid in full at the time of exercise in cash or Common Stock (valued at its Fair Market Value at the date of exercise) or a combination of cash and Common Stock. (b) Except as provided in Section 7, no Option may be exercised at any time unless the holder thereof is then a director of the Company and has continuously remained a director of the Company at all times since the date of grant of such Option. (c) Options shall be exercised by the holder thereof giving written notice of such exercise to the Company. An Option may be exercised only with respect to a whole number of shares of Common Stock. Subject to the other provisions hereof, Options may be exercised at any time and in any order. Also subject to the other provisions hereof, subsequent to the death of a director or former director, any Options held by such decedent may be exercised by his personal representative or the person or persons to whom said Option shall have been transferred, as permitted hereunder. (d) An Option shall be exercisable during a director's or former director's lifetime only by the director or former director, the director's transferee, as permitted hereunder, or, if the director or former director has become disabled, by his legal representative. 7. EXERCISE ON TERMINATION OF EMPLOYMENT (a) Except as otherwise provided herein, if a director to whom an Option has been granted ceases to be a member of the Board (otherwise than as a result of his death or after attainment of age 65), such Option may be exercised at any time within six (6) months after the date on which he ceased to be a director; provided, that in no event shall any Option be exercisable for a period of six months from the date of grant. (b) If a director to whom an Option has been granted dies while a member of the Board or, notwithstanding Section 7(a), within six (6) months after he ceases to be a member of the Board, or ceases to be a member of the Board after attainment of age 65, such Option may be exercised at any time within one (1) year after the later of the date of the director's death or the date after attainment of age 65 that the director ceased to be a Board member, as the case may be; provided, that in no event shall any Option be exercisable for a period of six months from the date of grant. (c) Notwithstanding anything to the contrary herein contained, if a director resigns his directorship and such resignation is effective prior to his attainment of age 65, any Option granted to him within six months prior to the effective date of such resignation shall terminate as of the effective date of such resignation. Moreover, at such other time as the right of any Option holder to exercise an Option terminates, such Option, to the extent not theretofore exercised, shall terminate. (d) Notwithstanding anything to the contrary herein contained, in no event shall any Option be exercisable after its Expiration Date. 21 24 8. CONFIDENTIALITY/NONSOLICITATION Each director accepting an Option covenants and agrees that he will not, while a director of Company or at any time thereafter, disclose, duplicate, distribute or use any Confidential Information, other than on behalf and for the benefit of Park-Ohio. The foregoing agreement shall not be construed as superseding or abridging any other stricter requirements or greater restrictions with respect to the subject matter thereof that may also be applicable to such director. The obligations contained in this Section 8 are, and constitute, separate and several obligations of each such director, and such obligations shall not be affected by, but rather shall survive, any termination of the Plan and/or any exercise or termination of any Option. For purposes of this Section 8: (a) "Confidential Information" means customer lists, rating formulae, rate sheets, trade secrets, market studies, financial data and projections, analyses, strategic plans and other documents, material and/or information, whether or not in writing, acquired by a director of the Company as a result of such director's service as such, which are (a) not totally within the public domain and (b) such that a reasonable, prudent businessman would not voluntarily relinquish, disseminate or communicate same to an actual or potential competitor, customer or supplier. (b) "Park-Ohio" includes the Company and also includes any other entity in which the Company owns, whether directly or indirectly, fifty percent (50%) or more of the stock and/or assets. Notwithstanding any other provision of the Plan, any and all unexercised Options and all rights under the Plan of a director or former director who received an Option (or his legal transferee, designated beneficiary or legal representatives) including the right to exercise the unexercised Options, shall be forfeited if, prior to the time of such exercise, the director or former director shall violate any of the agreements and covenants contained in this Section 8. 9. NON-TRANSFERABILITY OF OPTIONS A holder's Options and other rights and interests under the Plan (including the right to exercise unexercised Options) may not be assigned or transferred except that, (i) in the case of a holder's death, such Options, and other rights and interests, shall be transferable to the person or persons to whom the Option shall have been transferred by will or the laws of descent and distribution, (ii) a holder's Options, and other rights and interests, may be transferred to (I) any trust or estate in which the original holder (or such holder's spouse or other immediate relative) has a substantial beneficial interest or (II) a spouse or other immediate relative of the original holder, and (iii) a holder's Options, and other rights and interests, may be transferred pursuant to a qualified domestic relations order (as defined in the Tax Code). Any Option so transferred shall continue to be subject to all the terms and conditions contained in this Plan or any written agreement, pursuant to Section 14. 10. ADJUSTMENTS FOR CERTAIN EVENTS In the event of a stock dividend, recapitalization, merger, consolidation, split-up, combination or any other change in shares of Common Stock of the Company, the Common Stock available for purposes of the Plan or subject to Options outstanding hereunder shall be correspondingly increased, diminished or changed, so that by exercise of any outstanding Option, the holder of the Option shall receive, without change in aggregate purchase price, securities, as so increased, diminished or changed, comparable to the number of shares of Common Stock he would have received if he had exercised his Option prior to such event and had continued to hold the Common Stock so purchased until affected by such event. 22 25 11. AMENDMENT AND TERMINATION The Plan shall terminate on December 31, 2001 and no Options shall be granted hereunder after such date. The Board may at any time and from time to time terminate, modify or amend the Plan; provided, however, that unless also approved or ratified by a vote of the holders of the outstanding shares of the capital stock of the Company in accordance with the requirements of paragraph (b) of Rule 16b-3, any such modification or amendment shall not (subject, however, to the provisions of Section 10): (a) increase the maximum amount of Common Stock for which Options may be granted under the Plan; (b) reduce the Option exercise price at which Options may be granted; (c) extend the period during which Options may be exercised beyond the times originally prescribed; (d) materially modify the requirements as to eligibility for participation in the Plan; or (e) materially increase the benefits accruing to Participants under the Plan; provided, further, that the Plan provisions may not be amended more than once every six months, other than to comport with changes in the Tax Code, the Employee Retirement Income Security Act of 1974, as amended, or in either case the rules thereunder. No such termination, modification or amendment may diminish, limit or other wise impair the rights of a holder of an outstanding Option. Nevertheless, with the consent of the holder affected, any such action may be taken and outstanding Options may be amended in a manner not inconsistent with the terms of the Plan. 12. RIGHTS OF AN OPTION HOLDER Neither the Plan nor any action taken hereunder shall be construed as giving any director any right to be retained as a director of the Company or restrict the right to terminate his Board membership. 13. RIGHTS AS A STOCKHOLDER A holder of an Option shall have no rights as a stockholder with respect to any Common Stock covered by an Option until he shall have become the holder of record of such Common Stock, and, except as provided in Section 10 hereof, no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights in respect of such share for which the record date is prior to the date on which he shall become the holder of record thereof. 14. AGREEMENTS WITH OPTION HOLDERS Each Option granted under the Plan shall be evidenced by a written agreement executed by an officer of the Company and the optionee and containing such terms and conditions not inconsistent with the Plan as may be prescribed by the officer executing the same. 15. REQUIREMENTS FOR ISSUANCE OF SHARES The Company shall have the right to condition the issuance of Common Stock to any holder of an Option upon exercise thereof on such holder's undertaking in writing to comply with such restrictions on his subsequent disposition of such Common Stock as the Company shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and certificates representing such share may be legended to reflect any such restrictions. 16. EFFECTIVE DATE Subject to the approval of the Plan by the holders of a majority of the Common Stock present or represented and entitled to vote at the Company's 1996 Annual Meeting of Shareholders or any adjournment 23 26 thereof at which a quorum is present, the Plan shall be effective as of May 1, 1996. If the condition set forth above is not satisfied, the Plan shall terminate automatically. 17. PLAN ADMINISTRATION The Plan shall be administered by the Compensation and Stock Option Committee of the Board (the "Committee"). The Committee, subject to the other provisions of the Plan, shall have the sole authority to determine any matters arising under the Plan. Subject to the other provisions of the Plan, the Committee shall have full power and authority to administer and interpret the Plan and to adopt or amend such rules, regulations, agreements and instruments for implementing the Plan and for conduct of its business as it deems necessary or advisable, except to the extent, in each case, different provision is made by the Regulations of the Company or by resolution of the Board. Subject to the express provisions of the Plan, the Committee's interpretations of the Plan and all determinations made by the Committee pursuant to the powers vested in it hereunder shall be conclusive and binding on all persons having any interest in the Plan or in any options granted hereunder. A majority of the Committee shall constitute a quorum for purposes of meetings which may be held at such times and places and on such notice as the Committee deems appropriate. All actions and determinations of the Committee shall be made by not less than a majority of its members and may be made at a meeting or by written consent in lieu of a meeting, except to the extent, in each case, different provision is made by the Regulations of the Company or by resolution of the Board. 24 27 Common Stock PARK-OHIO INDUSTRIES, INC. PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS P Edward F. Crawford and James W. Wert or either of them, are hereby authorized, with full power of substitution, to represent and vote the Common Stock of the undersigned at the annual meeting of shareholders of Park-Ohio Industries, Inc. (the "Company") to be held at the R Company's Auditorium, 23000 Euclid Avenue, Euclid Ohio, on May 23, 1996, and any and all adjournments, postponements or continuations thereof. O IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED, SHARES REPRESENTED HEREBY WILL BE VOTED IN THE MANNER SPECIFIED BY THE SHAREHOLDER. IF NO SPECIFICATION IS MADE, SHARES WILL BE VOTED FOR THE ELECTION OF THE PERSONS NOMINATED AS DIRECTORS PURSUANT TO THE PROXY STATEMENT AND FOR X THE OTHER PROPOSALS INDICATED. IN THE EVENT OF CUMULATIVE VOTING FOR DIRECTORS, UNLESS OTHERWISE INDICATED BY THE UNDERSIGNED, A VOTE FOR THE NOMINEES LISTED WILL GIVE THE PROXYHOLDERS DISCRETIONARY AUTHORITY TO CUMULATE ALL VOTES TO WHICH THE UNDERSIGNED IS ENTITLED AND TO Y ALLOCATE THEM IN FAVOR OF ANY ONE OR MORE SUCH NOMINEES AS THE PROXYHOLDERS DETERMINE. Election of Directors, Nominees: (change of address) Lewis E. Hatch, Jr., Thomas E. McGinty, Lawrence O. Selhorst, _______________________________ Richard S. Sheetz _______________________________ _______________________________ _______________________________ (If you have written in the above space, please mark the corresponding box on the reverse side of this card.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD. SEE REVERSE SIDE ------------------------------------------------------------------------------- DETACH CARD 28 X PLEASE MARK YOUR SHARES IN YOUR NAME VOTES AS IN THIS EXAMPLE. FOR WITHHELD FOR AGAINST ABSTAIN 1. Election of [ ] [ ] Director Nominees: 2. Approval of non-statutory stock [ ] [ ] [ ] Directors Lewis E. Hatch, Jr., option to Mr. Crawford, Chairman (see reverse) Thomas E. McGinty, and Chief Executive Officer Lawrence O. Selhorst, Richard S. Sheetz 3. Approval of the 1996 [ ] [ ] [ ] Non-employee Director For, except vote withheld from the following nominee(s): Stock Option Plan - - -------------------------------------------------------- 4. Ratification of appointment of [ ] [ ] [ ] Ernst & Young as independent auditors. 5. The Proxies are authorized, in their discretion, to vote upon such other business as may properly come before the meeting or any adjournment, postponement or continuation thereof. Change [ ] IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED. of Address Attend [ ] Meeting SIGNATURE(S) ___________________________________________________________ DATE _______ SIGNATURE(S) ____________________________________________________________ DATE ______ NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. ----------------------------------------------------------------------------------------------------------------------------------- DETACH CARD
29 Common Stock PARK-OHIO INDUSTRIES, INC. CONFIDENTIAL VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS To Key Trust Company of Ohio, N.A., Trustee of the Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Its Subsidiaries (the "Plan"): The undersigned, a participant in the Plan, hereby directs the Trustee to vote in person or by proxy (a) all common shares of Park-Ohio V Industries, Inc. credited to the undersigned's account under the Plan on O the record date ("allocated shares"); and (b) the proportionate number T of common shares of Park-Ohio Industries, Inc. allocated to the accounts I of other participants in the Plan, but for which the Trustee does not N receive valid voting instructions ("non-directed shares") and as to G which the undersigned is entitled to direct the voting in accordance with the Plan provisions. Under the Plan, shares allocated to the I accounts of participants for which the Trustee does not receive timely N directions in the form of a signed voting instruction card are voted by S the Trustee as directed by the participants who timely tender a signed T voting instruction card. By completing this Confidential Voting R Instruction Card and returning it to the Trustee, you are authorizing U the Trustee to vote allocated shares and a proportionate amount of the C non-directed shares held in the Plan. The number of non-directed shares T for which you may instruct the Trustee to vote will depend on how many I other participants exercise their right to direct the voting of their O allocated shares. Any participant wishing to vote the non-directed N shares differently from the allocated shares may do so by requesting a S separate voting instruction card from the Trustee at 689-3685. If this Confidential Voting Instruction Card is properly executed and returned, shares represented hereby will be voted in the manner specified by the participant. Election of Directors, Nominees: (change of address) Lewis E. Hatch, Jr., Thomas E. McGinty, _______________________________ Lawrence O. Selhorst, Richard S. Sheetz _______________________________ _______________________________ _______________________________ (If you have written in the above space, please mark the corresponding box on the reverse side of this card.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD. SEE REVERSE SIDE - - -------------------------------------------------------------------------------- DETACH CARD 30 X PLEASE MARK YOUR SHARES HELD FOR YOU VOTES AS IN THIS EXAMPLE. FOR WITHHELD FOR AGAINST ABSTAIN 1. Election of [ ] [ ] Director Nominees: 2. Approval of non-statutory stock [ ] [ ] [ ] Directors Lewis E. Hatch, Jr., option to Mr. Crawford, Chairman (see reverse) Thomas E. McGinty, and Chief Executive Officer Lawrence O. Selhorst, Richard S. Sheetz 3. Approval of the 1996 [ ] [ ] [ ] Non-employee Director For, except vote withheld from the following nominee(s): Stock Option Plan - - -------------------------------------------------------- 4. Ratification of appointment of [ ] [ ] [ ] Ernst & Young as independent auditors. 5. The Proxies are authorized, in their discretion, to vote upon such other business as may properly come before the meeting or any adjournment, postponement or continuation thereof. Change [ ] IMPORTANT -- THIS CARD MUST BE SIGNED AND DATED. of Address Attend [ ] Meeting SIGNATURE ___________________________________________________________ DATE ___________ - - -------------------------------------------------------------------------------- DETACH CARD
31 Common Stock PARK-OHIO INDUSTRIES, INC. CONFIDENTIAL VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS V Elizabeth M. Boris, Ronald J. Cozean, and James S. Walker, or any of O them, Trustees of RB&W Corporation Employee Stock Ownership Plan (the T "Plan"), are hereby authorized, with full power of substitution, to I represent and vote the Common Stock of the undersigned Plan Participant N at the annual meeting of shareholders of Park-Ohio Industries, Inc. (the G "Company") to be held at the Company's Auditorium, 23000 Euclid Avenue, Euclid, Ohio, on May 23, 1996, and any and all adjournments, I postponements or continuations thereof. N S IF THIS CONFIDENTIAL VOTING INSTRUCTION CARD IS PROPERLY EXECUTED T AND RETURNED, SHARES REPRESENTED HEREBY WILL BE VOTED IN THE MANNER R SPECIFIED BY THE PLAN PARTICIPANT. IF NO SPECIFICATION IS MADE, SHARES U WILL BE VOTED FOR THE ELECTION OF THE PERSONS NOMINATED AS DIRECTORS C PURSUANT TO THE PROXY STATEMENT AND FOR THE OTHER PROPOSALS INDICATED. T IN THE EVENT OF CUMULATIVE VOTING FOR DIRECTORS, UNLESS OTHERWISE I INDICATED BY THE UNDERSIGNED, A VOTE FOR THE NOMINEES LISTED WILL GIVE O THE TRUSTEES DISCRETIONARY AUTHORITY TO CUMULATE ALL VOTES TO WHICH THE N UNDERSIGNED IS ENTITLED AND TO ALLOCATE THEM IN FAVOR OF ANY ONE OR MORE S SUCH NOMINEES AS THE TRUSTEES DETERMINE. Election of Directors, Nominees: (change of address) Lewis E. Hatch, Jr., Thomas E. McGinty, _______________________________ Lawrence O. Selhorst, Richard S. Sheetz _______________________________ _______________________________ _______________________________ (If you have written in the above space, please mark the corresponding box on the reverse side of this card.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD. SEE REVERSE SIDE - - -------------------------------------------------------------------------------- DETACH CARD 32 [X] PLEASE MARK YOUR SHARES HELD FOR YOU VOTES AS IN THIS EXAMPLE. FOR WITHHELD FOR AGAINST ABSTAIN 1. Election of [ ] [ ] Director Nominees: 2. Approval of non-statutory stock [ ] [ ] [ ] Directors Lewis E. Hatch, Jr., option to Mr. Crawford, Chairman (see reverse) Thomas E. McGinty, and Chief Executive Officer Lawrence O. Selhorst, Richard S. Sheetz 3. Approval of the 1996 [ ] [ ] [ ] Non-employee Director For, except vote withheld from the following nominee(s): Stock Option Plan - - -------------------------------------------------------- 4. Ratification of appointment of [ ] [ ] [ ] Ernst & Young as independent auditors. 5. The Proxies are authorized, in their discretion, to vote upon such other business as may properly come before the meeting or any adjournment, postponement or continuation thereof. Change [ ] IMPORTANT -- THIS CARD MUST BE SIGNED AND DATED. of Address Attend [ ] Meeting SIGNATURE ___________________________________________________________ DATE ___________ - - -------------------------------------------------------------------------------- DETACH CARD
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