-----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, SK8HFuDp7MV1BW7ITYkteophYFPavP7G6qDXufoIX9qlrr9b5toRs0zCrV00cLL9 4xAbkcYCrP2HoqawaKmqJw== 0000950152-99-005662.txt : 19990630 0000950152-99-005662.hdr.sgml : 19990630 ACCESSION NUMBER: 0000950152-99-005662 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARK OHIO HOLDINGS CORP CENTRAL INDEX KEY: 0000076282 STANDARD INDUSTRIAL CLASSIFICATION: METAL FORGING & STAMPINGS [3460] IRS NUMBER: 346520107 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-03134 FILM NUMBER: 99654807 BUSINESS ADDRESS: STREET 1: 23000 EUCLID AVE CITY: CLEVELAND STATE: OH ZIP: 44117 BUSINESS PHONE: 2166927200 MAIL ADDRESS: STREET 1: 23000 EUCLID AVE CITY: CLEVELAND STATE: OH ZIP: 44117 FORMER COMPANY: FORMER CONFORMED NAME: PARK OHIO INDUSTRIES INC DATE OF NAME CHANGE: 19920703 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 11-K 1 PARK-OHIO HOLDINGS CORP. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For the fiscal year ended December 31, 1998 or [ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from _____ to _____ Commission file number 0-3134 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: INDIVIDUAL ACCOUNT RETIREMENT PLAN OF PARK-OHIO INDUSTRIES, INC. AND OTHER SPONSORING CORPORATIONS B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: PARK-OHIO HOLDINGS CORP. 23000 EUCLID AVENUE CLEVELAND, OHIO 44117 Page 1 2 INDEX
PAGE (S) Report of Independent Auditors................................................................... F-1 FINANCIAL STATEMENTS Statements of Net Assets Available for Benefits, with Fund Information ........................................................................ F-2--F-3 Statements of Changes in Net Assets Available for Benefits, with Fund Information ............................................................................. F-4--F-5 Notes to Financial Statements.................................................................... F-6--F-17 SUPPLEMENTAL SCHEDULES Schedule I--Schedule of Assets Held for Investment Purposes at December 31, 1998...................................................... F-18 Schedule II--Schedule of Reportable Transactions for the Year Ended December 31, 1998............................................. F-19
EXHIBITS Exhibit Number Description - ------------------ ------------------------------------------------------------- 23 Consent of Independent Auditors * Other supplemental schedules required by Section 2520.103-10 of the Department of Labor rules and Regulations for Reporting and disclosure under ERISA have been omitted because they are not applicable Page 2 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934. The Administrator of the Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Date: June 29, 1999 By /s/ James S. Walker ------------------- James S. Walker Vice President and Chief Financial Officer Page 3 4 Report of Independent Auditors Plan Administrative Committee Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations We have audited the accompanying financial statements and supplementary schedules of the Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations as of December 31, 1998 and 1997, and for the years then ended, as listed in the table of contents. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1998 and 1997, and the changes in its net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1998, and reportable transactions for the year then ended, are presented for the purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The Fund Information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in our audits of the 1998 and 1997 financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Cleveland, Ohio June 11, 1999 F-1 5 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Statement of Net Assets Available for Benefits, with Fund Information December 31, 1998
KeyCorp. Victory KeyCorp. Intermediate Prism Putnam KeyCorp. Income Money New Templeton Victory Value Bond Market Opportunities Growth --------------------------------------------------------------------------- ASSETS Investments, at fair value: KeyCorp Victory Value Fund $ 22,635,366 KeyCorp Victory Intermediate Income Bond Fund $ 3,411,089 KeyCorp Prism Money Market Fund $ 6,081,282 Putnam New Opportunities Fund $ 3,128,695 Templeton Growth Fund $ 1,483,803 George Putnam Fund of Boston KeyCorp EB Money Market Fund Park-Ohio Holdings Corp. Common Stock Participant loans --------------------------------------------------------------------------- Total investments 22,635,366 3,411,089 6,081,282 3,128,695 1,483,803 Receivables: Employer contribution receivable 27,014 4,679 23,011 9,567 6,148 Employee contribution receivable 90,655 13,566 33,133 35,664 21,930 --------------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $ 22,753,035 $ 3,429,334 $ 6,137,426 $ 3,173,926 $ 1,511,881 ===========================================================================
Park-Ohio George Common Loan Putnam Stock Fund Total ------------------------------------------------------------- ASSETS Investments, at fair value: KeyCorp Victory Value Fund $ 22,635,366 KeyCorp Victory Intermediate Income Bond Fund 3,411,089 KeyCorp Prism Money Market Fund 6,081,282 Putnam New Opportunities Fund 3,128,695 Templeton Growth Fund 1,483,803 George Putnam Fund of Boston $ 3,383,843 3,383,843 KeyCorp EB Money Market Fund $ 57,613 57,613 Park-Ohio Holdings Corp. Common Stock 2,301,254 2,301,254 Participant loans $ 755,056 755,056 ------------------------------------------------------------- Total investments 3,383,843 2,358,867 755,056 43,238,001 Receivables: Employer contribution receivable 10,976 7,060 88,455 Employee contribution receivable 35,807 22,264 253,019 ------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $ 3,430,626 $ 2,388,191 $ 755,056 $ 43,579,475 =============================================================
See notes to financial statements. F-2 6 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Statement of Net Assets Available for Benefits, with Fund Information December 31, 1997
KeyCorp. Victory KeyCorp. Intermediate Prism Putnam KeyCorp. Income Money New Templeton Victory Value Bond Market Opportunities Growth -------------------------------------------------------------------------- ASSETS Cash Investments, at fair value: KeyCorp Victory Value Fund $ 17,904,195 KeyCorp Victory Intermediate Income Bond Fund $ 2,772,350 KeyCorp Prism Money Market Fund $ 4,763,595 Putnam New Opportunities Fund $ 1,140,377 Templeton Growth Fund $ 1,489,035 George Putnam Fund of Boston KeyCorp EB Money Market Fund Park-Ohio Holdings Corp. Common Stock Participant loans -------------------------------------------------------------------------- Total investments 17,904,195 2,772,350 4,763,595 1,140,377 1,489,035 Receivables: Employer contribution receivable 23,718 2,903 20,723 6,011 5,422 Employee contribution receivable 86,190 8,232 25,542 24,560 21,555 Accrued fees and expenses -------------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $ 18,014,103 $ 2,783,485 $ 4,809,860 $ 1,170,948 $ 1,516,012 ==========================================================================
Park-Ohio George Common Loan Putnam Stock Fund Total ------------------------------------------------------------ ASSETS Cash $ 11,749 $ 11,749 Investments, at fair value: KeyCorp Victory Value Fund 17,904,195 KeyCorp Victory Intermediate Income Bond Fund 2,772,350 KeyCorp Prism Money Market Fund 4,763,595 Putnam New Opportunities Fund 1,140,377 Templeton Growth Fund 1,489,035 George Putnam Fund of Boston $ 2,132,036 2,132,036 KeyCorp EB Money Market Fund $ 91,182 91,182 Park-Ohio Holdings Corp. Common Stock 2,217,521 2,217,521 Participant loans 522,411 522,411 ------------------------------------------------------------ Total investments 2,132,036 2,308,703 522,411 33,032,702 Receivables: Employer contribution receivable 7,586 5,025 71,388 Employee contribution receivable 26,315 14,507 206,901 Accrued fees and expenses (2,598) (2,598) ------------------------------------------------------------ NET ASSETS AVAILABLE FOR BENEFITS $ 2,165,937 $ 2,325,637 $ 534,160 $ 33,320,142 ============================================================
See notes to financial statements. F-3 7 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Statement of Changes in Net Assets Available for Benefits, with Fund Information Year Ended December 31, 1998
KeyCorp. Victory KeyCorp. Intermediate Prism Putnam KeyCorp. Income Money New Templeton George Victory Value Bond Market Opportunities Growth Putnam ---------------------------------------------------------------------------------------- ADDITIONS Interest income Dividend income $ 3,599,179 $ 177,815 $ 97,863 $ 193,285 $ 312,342 Other income 1,002 274 $ 381 39 68 144 Contributions from employer 295,559 36,753 167,042 79,973 63,820 98,882 Contributions from participants 1,177,610 119,843 335,853 344,742 260,896 372,707 Transfer from other plans 1,388,485 328,565 467,528 903,225 55,622 960,402 Unrealized appreciation (depreciation) in fair value of investments 200,706 33,308 21,870 328,919 (180,943) (30,711) Realized gain (loss) 1,100,429 17,811 250,741 69,803 (42,390) 40,320 Loan transfers ---------------------------------------------------------------------------------------- 7,762,970 714,369 1,243,415 1,824,564 350,358 1,754,086 DEDUCTIONS Distributions to participants (1,592,588) (161,519) (866,415) (217,688) (124,205) (291,415) Transfers (to) from other funds (1,405,237) 100,597 961,182 397,209 (228,419) (193,945) Trustee fees and expenses (26,213) (7,598) (10,616) (1,107) (1,865) (4,037) ---------------------------------------------------------------------------------------- Net increase (decrease) 4,738,932 645,849 1,327,566 2,002,978 (4,131) 1,264,689 Net assets available for benefits at beginning of year 18,014,103 2,783,485 4,809,860 1,170,948 1,516,012 2,165,937 ---------------------------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR $ 22,753,035 $ 3,429,334 $ 6,137,426 $ 3,173,926 $ 1,511,881 $ 3,430,626 ========================================================================================
Park-Ohio Common Loan Stock Fund Total -------------------------------------------------- ADDITIONS Interest income $ 4,194 $ 53,928 $ 58,122 Dividend income 4,380,484 Other income 147 2,055 Contributions from employer 60,819 802,848 Contributions from participants 231,893 2,843,544 Transfer from other plans 26,761 4,130,588 Unrealized appreciation (depreciation) in fair value of investments (372,336) 813 Realized gain (loss) 1,436,714 Loan transfers 98,648 98,648 --------------------------------------------- (48,522) 152,576 13,753,816 DEDUCTIONS Distributions to participants (123,134) (57,376) (3,434,340) Transfers (to) from other funds 242,917 125,696 Trustee fees and expenses (8,707) (60,143) --------------------------------------------- Net increase (decrease) 62,554 220,896 10,259,333 Net assets available for benefits at beginning of year 2,325,637 534,160 33,320,142 --------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR $ 2,388,191 $ 755,056 $ 43,579,475 =============================================
See notes to financial statements. F-4 8 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Statement of Changes in Net Assets Available for Benefits, with Fund Information Year Ended December 31, 1997
KeyCorp. Victory KeyCorp. Fidelity Fidelity KeyCorp. Intermediate Prism KeyCorp. Advisor Advisor Putnam Victory Income Money Victory Income Equity New Value Bond Market International Growth Income Opportunities ----------------------------------------------------------------------------------------------- ADDITIONS Interest income $ 116 $ 4 $ 7 $ 1 $ 10 $ 4 Dividend income 1,540,557 179,827 9,574 10,568 $ 24,956 Other income (expense) 15,823 16 118 18 216 279 (33) Contributions from employer 239,669 29,503 209,025 4,965 10,159 20,653 30,853 Contributions from participants 1,008,744 103,802 291,134 21,547 40,714 97,359 139,943 Transfer from other plans 81,786 22,574 5,558 4,737 15,053 6,236 34,834 Unrealized appreciation (depreciation) in fair value of investments 1,355,565 16,601 82,757 (11,871) (54,021) (427,757) 81,126 Realized gain (loss) 1,058,014 9,588 180,025 5,086 51,505 415,987 62,107 ----------------------------------------------------------------------------------------------- 5,300,274 361,915 768,624 24,483 73,210 123,329 373,786 DEDUCTIONS Distributions to participants (1,993,340) (552,981) (975,537) (5,827) (7,031) (33,209) (16,696) Transfers (to) from other funds 2,672,180 (374,106) (829,846) (722,744) (996,210) (3,769,556) 813,987 Trustee fees and expenses (10,496) (3,866) (5,768) (188) (257) (1,009) (129) ----------------------------------------------------------------------------------------------- Net increase (decrease) 5,968,618 (569,038) (1,042,527) (704,276) (930,288) (3,680,445) 1,170,948 Net assets available for benefits at beginning of year 12,045,485 3,352,523 5,852,387 704,276 930,288 3,680,445 ----------------------------------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR $ 18,014,103 $ 2,783,485 $ 4,809,860 $ 0 $ 0 $ 0 $ 1,170,948 ===============================================================================================
Park-Ohio Templeton George Common Loan Growth Putnam Stock Fund Total ------------------------------------------------------------------ ADDITIONS Interest income $ 3,579 $ 15,273 $ 18,994 Dividend income $ 231,542 $ 164,795 2,161,819 Other income (expense) (192) (103) 145 16,287 Contributions from employer 43,548 63,785 43,462 695,622 Contributions from participants 178,026 235,601 166,556 2,283,426 Transfer from other plans 51,567 23,357 62,348 308,050 Unrealized appreciation (depreciation) in fair value of investments (103,262) 73,242 678,349 1,690,729 Realized gain (loss) 181 22,064 (9,717) 1,794,840 ------------------------------------------------------------------ 401,410 582,741 944,722 15,273 8,969,767 DEDUCTIONS Distributions to participants (59,205) (50,888) (49,177) (5,299) (3,749,190) Transfers (to) from other funds 1,174,335 1,634,886 (104,922) 501,996 Trustee fees and expenses (528) (802) (6,617) (29,660) ------------------------------------------------------------------ Net increase (decrease) 1,516,012 2,165,937 784,006 511,970 5,190,917 Net assets available for benefits at beginning of year 1,541,631 22,190 28,129,225 ------------------------------------------------------------------ NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR $ 1,516,012 $ 2,165,937 $ 2,325,637 $ 534,160 $ 33,320,142 ==================================================================
See notes to financial statements. F-5 9 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Notes to Financial Statements December 31, 1998 A. SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accounting records of the Individual Account Retirement Plan (the "Plan") are maintained on the accrual basis. INVESTMENT VALUE AND INCOME RECOGNITION Purchases of investments are recorded at cost and revalued to market values at the close of each day by the Plan Trustee. All investments are under the control and management of Key Trust Company of Ohio N.A., the Trustee of the Plan. Purchases and sales are accounted for on the trade date. Investment income and realized and unrealized gains and losses are reported as net income derived from investment activities and are allocated among the individual accounts in proportion to their respective balances immediately preceding the valuation date. The investments in the common stock of Park-Ohio Holdings Corp., the parent company of Park-Ohio Industries, Inc., (collectively referred to as the "Company"), KeyCorp Victory Value Fund, KeyCorp Victory Intermediate Income Bond Fund, KeyCorp Putnam New Opportunities Fund, Templeton Growth Fund, and George Putnam Fund of Boston are valued as of the last reported trade price on the last business day of the period. Investments in the KeyCorp Prism Money Market Fund are valued at market, which consider adjustments to the fund value for investment income and trustee expenses. The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. RECLASSIFICATIONS Certain prior year amounts have been reclassified to conform to current year presentation. F-6 10 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Notes to Financial Statements-Continued B. DESCRIPTION OF THE PLAN The Plan, adopted by the Company effective January 1, 1985, is a defined contribution plan which covers substantially all eligible full time employees in the following classifications: 1. Salaried employees of the Ohio Crankshaft Division of the Company except such employment is not considered covered employment after March 4, 1989 for any employee who was an active participant in the Revised Non-Contributory Pension Plan for Hourly-Rated Employees of Ohio Crankshaft Division of Park-Ohio Industries, Inc. on or after July 10, 1983. 2. Former salaried employees of Bennett Industries, Inc. and hourly non-bargaining unit employees of all Bennett Divisions except Lithonia (prior to August 1, 1996). 3. Non-bargaining unit employees of the Corporate Office of the Company, Tocco, Inc., the Park Drop Forge Division of the Company, Castle Rubber Company, and Cleveland City Forge Salary Employees, Kay Home Products, Inc. (Marsh Allan and Quaker Industries Divisions) (effective November 1, 1994), Cleveland City Forge-Division Hourly Employees (effective November 1, 1995), RB&W Corporation (effective April 1, 1995), Green Bearing (effective February 1, 1997), Summerspace Inc. (effective March 1, 1997), FECO Division of TOCCO (effective April 1, 1997), Delo Screw Company (effective May 27, 1997), Arden Industrial Products, Inc. (effective July 25, 1997), Arcon Fastners, Inc. (effective October 3, 1997), and Charken Company (effective November 1, 1998). 4. Employees of General Aluminum Manufacturing Company (effective January 1, 1995), Cicero Flexible Products (effective December 1, 1995), Bargaining and Non-Bargaining Employees of Blue Falcon Forge (effective March 2, 1995), Bargaining and Non-Bargaining Employees of Geneva Rubber Company Division (effective March 1, 1995), Ajax Manufacturing Company and Advanced Vehicles Inc. Salaried Employees (effective January 1, 1996), and Forging Developments International, Inc. (effective May 1, 1997). F-7 11 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Notes to Financial Statements-Continued B. DESCRIPTION OF THE PLAN--CONTINUED 5. Bargaining unit employees of the Ohio Crankshaft Division, pursuant to a collective bargaining agreement between the Company and the United Automobile, Aerospace and Agricultural Implement Workers of America and its Local 91 (effective August 1, 1995), and bargaining unit employees of RB&W Corporation-Coraopolis Plant (effective April 1, 1996). Generally, an employee in one of the above classifications becomes eligible to join the Plan after completing 30 days of continuous employment. Individual accounts are maintained for all participants. All amounts are credited or charged to an account in terms of full and fractional investment units at the investment unit values determined as of the transaction date. Each participant designates how his share of the contributions is to be allocated among the investment funds of the Plan described below: KeyCorp. Victory Value Fund--contributions and earnings are to be invested in marketable equity securities or in any common or collective fund comprised substantially of such investments. The fund invests primarily in stocks with above average income and appreciation potential. KeyCorp. Victory Intermediate Income Bond Fund--contributions and earnings are to be invested in U.S. Government Securities, corporate bonds or in any common or collective fund comprised substantially of such investments. The fund invests in primarily investment grade debt securities with average maturities of 3-8 years. KeyCorp. Prism Money Market Fund--contributions and earnings are to be invested in short-term investments such as certificates of deposit, U.S. Treasury Bills and commercial paper or in any common or collective fund comprised substantially of such investments. F-8 12 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Notes to Financial Statements-Continued B. DESCRIPTION OF THE PLAN--CONTINUED Putnam New Opportunities Fund--contributions and earnings are to be invested in marketable equity securities or in any common or collective fund comprised substantially of such investments within 7 or 8 industry sectors believed to offer exceptional growth potential. The fund, which was an available investment option as of April 1, 1997, invests primarily in stocks of fast-growing innovative companies with above average yields. Templeton Growth Fund--contributions and earnings are to be invested in marketable equity and debt securities or in any common or collective fund comprised substantially of such investments. The fund, which was an available investment option as of April 1, 1997, invests in stocks which have potential for long-term growth and debt obligations of companies and governments of any nation. George Putnam Fund of Boston--contributions and earnings are to be invested in marketable equity and debt securities or in any common or collective fund comprised substantially of such investments. The fund, which was an available investment option as of April 1, 1997, invests in stocks which have potential for capital growth and current income. Park-Ohio Holdings Corp. Common Stock Fund--contributions and earnings are to be invested in common shares of the Company purchased on the open market. The Plan provides for contributions to be made to the Plan pursuant to a qualified cash or deferred arrangement under Section 401(k) of the Internal Revenue Code. If a participant elects to have contributions made for him pursuant to such an arrangement, his compensation is reduced by the amount of such contributions elected and the employer makes Plan contributions equal to the amount of the reduction. Effective January 1, 1998 the Arden Fasteners 401(k) Retirement Plan was merged with the Individual Account Retirement Plan of Park-Ohio Industries, Inc. The balance of assets transferred to Key Trust Company of Ohio, N.A. on January 5, 1998 was $3,899,139. Participants became eligible for the Individual Account Retirement Plan as of the date of acquisition, at which time contributions to the Arden Fasteners 401(k) Retirement Plan were frozen. F-9 13 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Notes to Financial Statements-Continued B. DESCRIPTION OF THE PLAN--CONTINUED The Company may terminate the Plan at any time by resolution of its Board of Directors. In the event of the termination of the Plan, the beneficial interests of all participants under the Plan shall become fully vested. C. CONTRIBUTIONS Contributions by employees to the Plan are made via payroll deductions. Employees may contribute up to 16% of their compensation on a pre-tax basis, not to exceed $10,000 and $9,500, the IRS maximum contribution for 1998 and 1997, respectively. Employee contributions are fully vested and non-forfeitable at all times. The Plan provides for uniform rates of employer contributions for all eligible employees, regardless of employment classification, so that each participant is entitled to basic contributions equal to two percent of credited compensation paid by the employer. The basic contribution is allocated among the investment options based on individual participant's investment allocation designation. Contributions refundable to participants represent current year contributions and earnings on such deposits that must be returned to employees to ensure Plan compliance with additional limitations in the Internal Revenue Code on contributions by highly compensated individuals. Employee contributions and the contribution receivable are shown net of the amounts refundable. The total contributions refundable to participants were $10,911 and $0 in 1998 and 1997, respectively. Participants of the Plan can make changes to their account via the telephone, through the Trust Talk System of Key Trust Company. The current provision of the system permits a participant to change investment allocation percentages once every 30 days and change payroll deferral percentages on the first day of every quarter. F-10 14 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Notes to Financial Statements-Continued D. PARTICIPANT LOANS A participant may borrow from employee 401(k) contributions and earnings a minimum of $1,000 and a maximum of the lesser of 50% of the participant's eligible account or $50,000. Loan repayments are made via payroll deductions on after-tax dollars, which commence thirty to sixty days after receipt and acceptance of the loan check. Terms of the participant loan are five years for a personal loan and 15 years for a mortgage loan, with interest payable at prime plus one percent. E. INVESTMENTS Investments held by the Plan at December 31, 1998 and 1997 are summarized as follows:
1998 1997 ------------------------------- ---------------------------- MARKET VALUE COST MARKET VALUE COST ------------------------------------------------------------ Cash $ 11,749 $ 11,749 KeyCorp Victory Value Fund $ 22,635,366* $ 18,351,266 17,904,195* 13,820,801 KeyCorp Victory Intermediate Income Bond Fund 3,411,089* 3,327,386 2,772,350* 2,721,955 KeyCorp Prism Money Market Fund 6,081,282* 5,744,332 4,763,595* 4,448,515 Putnam New Opportunities Fund 3,128,695* 2,718,650 1,140,377 1,059,251 Templeton Growth Fund 1,483,803 1,768,008 1,489,035 1,592,297 George Putnam Fund of Boston 3,383,843* 3,341,312 2,132,036* 2,058,794 KeyCorp EB Money Market Fund 57,613 57,613 91,182 91,182 Park-Ohio Holdings Corp. Common Shares 2,301,254* 2,573,319 2,217,521* 2,117,250 Participant loans 755,056 522,411 ------------------------------------------------------------ TOTAL INVESTMENTS $ 43,238,001 $ 37,881,886 $ 33,044,451 $ 27,921,794 ============================================================
Realized gains and losses are calculated based upon historical cost of the securities using the average cost method. * Represents investments that are 5% or more of the net assets available for benefits at December 31, 1998 and 1997, respectively. F-11 15 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Notes to Financial Statements--Continued E. INVESTMENTS--CONTINUED
KeyCorp. Fidelity Victory KeyCorp. KeyCorp. Advisor Fidelity Intermediate Prism Victory Income & Advisor KeyCorp. Income Money International Growth Equity Putnam New Templeton Victory Value Bond Market Growth Balanced Income Opportunities Growth ------------------------------------------------------------------------------------------------------- Year Ended December 31, 1998: Selling price $ 4,755,667 $ 735,257 $ 3,959,645 $ 1,699,676 $ 741,126 Cost 3,655,238 717,446 3,708,904 1,629,873 783,516 ------------------------------------------------------------------------------------------------------- Realized gain $ 1,100,429 $ 17,811 $ 250,741 $ 69,803 $ (42,390) =======================================================================================================
Park-Ohio George Common Putnam Stock Total -------------------------------------- Year Ended December 31, 1998: Selling price $ 1,007,092 $ 1,382,637 $ 14,281,100 Cost 966,772 1,382,637 12,844,386 -------------------------------------- Realized gain $ 40,320 $ 0 $ 1,436,714 ======================================
KeyCorp. Fidelity Victory KeyCorp. KeyCorp. Advisor Fidelity Intermediate Prism Victory Income & Advisor KeyCorp. Income Money International Growth Equity Putnam New Templeton Victory Value Bond Market Growth Balanced Income Opportunities Growth ------------------------------------------------------------------------------------------------------- Year Ended December 31, 1997: Selling price $ 4,262,590 $ 1,069,934 $ 3,242,283 $ 789,907 $ 1,206,898 $ 4,006,283 $ 585,935 $ 560,993 Cost 3,204,576 1,060,346 3,062,258 784,821 1,155,393 3,590,296 523,828 560,812 ------------------------------------------------------------------------------------------------------- Realized gain $ 1,058,014 $ 9,588 $ 180,025 $ 5,086 $ 51,505 $ 415,987 $ 62,107 $ 181 =======================================================================================================
Park-Ohio George Common Putnam Stock Total -------------------------------------- Year Ended December 31, 1997: Selling price $ 325,795 $ 954,589 $ 17,005,207 Cost 303,731 964,306 15,210,367 -------------------------------------- Realized gain $ 22,064 $ (9,717) $ 1,794,840 ======================================
F-12 16 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Notes to Financial Statements--Continued E. INVESTMENTS--CONTINUED The net unrealized appreciation (depreciation) of investments included in the Plan equity is as follows:
KeyCorp. Fidelity Victory KeyCorp. KeyCorp. Advisor Fidelity Intermediate Prism Victory Income & Advisor KeyCorp. Income Money International Growth Equity Putnam New Victory Value Bond Market Growth Balanced Income Opportunities --------------------------------------------------------------------------------------- Balance at January 1, 1997 $ 2,727,829 $ 33,794 $ 232,323 $ 11,871 $ 54,021 $ 427,757 Change for the fiscal period 1,355,565 16,601 82,757 (11,871) (54,021) (427,757) $ 81,126 --------------------------------------------------------------------------------------- Balance at December 31, 1997 4,083,394 50,395 315,080 81,126 Change for the fiscal period 200,706 33,308 21,870 328,919 --------------------------------------------------------------------------------------- BALANCE AT DECEMBER 31, 1998 $ 4,284,100 $ 83,703 $ 336,950 $ 0 $ 0 $ 0 $ 410,045 =======================================================================================
Park-Ohio Common Templeton George Stock Growth Putnam Fund Total ----------------------------------------------- Balance at January 1, 1997 $ (578,078) $ 2,909,517 Change for the fiscal period $ (103,262) $ 73,242 678,349 1,690,729 ----------------------------------------------- Balance at December 31, 1997 (103,262) 73,242 100,271 4,600,246 Change for the fiscal period (180,943) (30,711) (372,336) 813 ----------------------------------------------- BALANCE AT DECEMBER 31, 1998 $ (284,205) $ 42,531 $ (272,065) $ 4,601,059 ===============================================
F-13 17 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Notes to Financial Statements--Continued F. BENEFITS A participant is entitled to receive the full value of his account upon (1) normal retirement at age 65; (2) attainment of at least age 55 and 10 years of service; (3) death, or total and permanent disability as determined by the Plan Administrator upon the basis of competent medical opinion, or (4) termination of employment after seven years of credited service. Such benefits may be paid in a lump sum cash payment or through the purchase of a single premium annuity contract. In the event of termination of employment, a participant has a vested right in his share of the Company's contributions determined as follows:
Vested Credited Vesting Service Percentage --------------------------------------------------------- Less than 3 years 0% At least 3 years but less than 4 years 20 At least 4 years but less than 5 years 40 At least 5 years but less than 6 years 60 At least 6 years but less than 7 years 80 7 years or more 100
The portion of the Company's contributions that are not vested in such terminated participants will generally be forfeited and may be used to reduce the Company's future contributions to the Plan. The total of forfeited contributions by participants was $73,411 and $49,529, and contributions required by the employer were reduced by $70,578 and $49,997 in 1998 and 1997, respectively. The balance of forfeited amounts available to the Company to reduce future contributions was $75,205 and $1,043 at December 31, 1998 and 1997, respectively. The majority of current year balance is attributable to forfeited contributions from the Arden Fastener 401(k) Retirement Plan, which were transferred upon the merger with the Individual Account Retirement Plan. A participant may withdraw in cash a portion of his contributions subject to certain limitations and restrictions. The hardship withdrawal may be used to purchase a principal residence, avoid foreclosure on a mortgage, or pay bona fide medical or education expenditures. F-14 18 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Notes to Financial Statements--Continued G. TRANSFER OF ASSETS Effective January 1, 1996, former participants in the RB&W Employee Stock Ownership Plan who are active participants in the Plan, have the option of transferring their balances from the RB&W Employee Stock Ownership Plan to the Plan. The value of assets transferred to the Plan during the year were $7,615 in 1998 and $39,426 in 1997, respectively. H. TRANSACTIONS WITH PARTIES-IN-INTEREST There were no reportable transactions with parties-in-interest during the year. I. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated May 30, 1996, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code"), and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt. J. SUBSEQUENT EVENT Effective May 1, 1999 an instrument of merger was executed to merge The Metalloy Corporation 401(k) Profit Sharing Plan and Trust and The Metalloy Corporation Hourly Employees' 401(k) Plan, (collectively referred to as the "Metalloy Plans") into the Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations. The assets of the Metalloy Plans were transferred to Key Trust Company of Ohio, N.A., the trustee of the Plan on May 5, 1999. The assets transferred had a market value of $10,658,976. F-15 19 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Notes to Financial Statements-Continued K. NUMBER OF PARTICIPANTS BY FUND (UNAUDITED) The number of active participants in each investment option at December 31, 1998 and 1997 are as follows:
1998 1997 ------------------------ KeyCorp Victory Value Fund 1,596 1,429 KeyCorp Intermediate Income Bond Fund 963 866 KeyCorp Prism Money Market Fund 1,530 1,309 Putnam New Opportunities Fund 685 389 Templeton Growth Fund 653 603 George Putnam Fund of Boston 933 682 Park-Ohio Holdings Corp. Common Stock Fund 712 575 Loan Fund 155 125
The total number of participants in the Plan is less than the sum of the number of participants shown above because many individuals were participating in more than one fund. L. YEAR 2000 (UNAUDITED) The Company has determined that it will be necessary to take certain steps in order to ensure that the Plan's information systems are prepared to handle Year 2000 dates. The Company is taking a two phase approach. The first phase addresses internal systems that must be modified or replaced to function properly. Both internal and external resources are being utilized to replace or modify existing software applications, and test the software and equipment for the Year 2000 modifications. The Company anticipates substantially completing this phase of the project during 1999. Costs associated with modifying software and equipment are not estimated to be significant and will be paid by the Company. F-16 20 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations Notes to Financial Statements-Continued L. YEAR 2000 (UNAUDITED)--CONTINUED For the second phase of the project, Plan management established formal communications with its third party service providers to determine that they have developed plans to address their own Year 2000 problems as they relate to the Plan's operations. All third party service providers have indicated that they will be Year 2000 compliant by early 1999. If modification of data processing systems of either the Plan, the Company, or its service providers are not completed timely, the Year 2000 problem could have a material impact on the operations of the Plan. F-17 21 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations EIN 346520107 Plan 011 Form 5500, Line 27(a)--Schedule of Assets Held for Investment Purposes December 31, 1998
Identity of Issuer, Borrower Description Current or Similar Party of Investment Cost Value - ----------------------------------------------------------------------------------------------------------- KeyCorp Victory Value Fund* 1,299,390 units $ 18,351,266 $ 22,635,366 KeyCorp Victory Intermediate Income Bond Fund* 348,782 units 3,327,386 3,411,089 KeyCorp Prism Money Market Fund* 507,747 units 5,744,332 6,081,282 Putnam New Opportunities Fund 53,546 units 2,718,650 3,128,695 Templeton Growth Fund 90,642 units 1,768,008 1,483,803 George Putnam Fund of Boston 187,574 units 3,341,312 3,383,843 Key Trust Company of Ohio, N.A.: Employee Benefits Money Market Fund* 57,613 units 57,613 57,613 Park Ohio Holdings Corp.* 152,149 shares of common stock 2,573,319 2,301,254 Participant loans Interest rates ranging from 9.25% to 9.50% 755,056 --------------------------------- $ 37,881,886 $ 43,238,001 =================================
*Indicates party-in-interest to the Plan. F-18 22 Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations EIN 346520107 Plan 011 Form 5500, Line 27(d)--Schedule of Reportable Transactions Year Ended December 31, 1998
Purchase Selling Cost of Identity of Party Involved Description of Asset Price Price Assets Current Value Net Gain - ----------------------------------------------------------------------------------------------------------------------------------- CATEGORY (I)--INDIVIDUAL TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS KeyCorp Victory Value Fund* $ 3,474,052 $ 3,474,052 $ 3,474,052 CATEGORY (III)--SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS KeyCorp Prism Money Market Fund* Common/Collective Trust 3,959,645 3,708,904 3,959,645 $ 250,741 5,004,721 5,004,721 5,004,721 KeyCorp Victory Intermediate Income Fund* Mutual Fund 735,257 717,446 735,257 17,811 1,322,877 1,322,877 1,322,877 KeyCorp EB Money Market Fund* Employee Benefits Money Market Fund 1,382,637 1,382,637 1,382,637 1,349,068 1,349,068 1,349,068 KeyCorp Victory Value Fund* Mutual Fund 4,755,667 3,655,238 4,755,667 1,100,429 8,183,993 8,183,993 8,183,993 Putnam New Opportunities Fund Mutual Fund 1,699,676 1,629,873 1,699,676 69,803 3,289,272 3,289,272 3,289,272 Templeton Growth Fund Mutual Fund 741,127 783,517 741,127 (42,390) 959,228 959,228 959,228 George Putnam Fund Mutual Fund 1,007,092 966,772 1,007,092 40,320 2,249,290 2,249,290 2,249,290
*Indicates party-in-interest to the Plan. There were no category (ii) or (iv) reportable transactions during 1998. F-19 EX-23 2 EXHIBIT 23 1 Exhibit 23 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement on Form S-8 (33-01047) pertaining to the Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations of our report dated June 11, 1999 with respect to the financial statements and schedules of the Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Other Sponsoring Corporations included in this Annual Report (Form 11-K) for the year ended December 31, 1998. /s/ Ernst & Young LLP Cleveland, Ohio June 25, 1999 -----END PRIVACY-ENHANCED MESSAGE-----