<PAGE> 1
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SCHEDULE 14A
(RULE 14a)
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
ZARING NATIONAL CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
ZARING NATIONAL CORPORATION
11300 Cornell Park Drive
Suite 500
Cincinnati, Ohio 45242
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 24, 2000
TO THE SHAREHOLDERS OF ZARING NATIONAL CORPORATION:
The Annual Meeting of Shareholders (the "Meeting") of Zaring National
Corporation (the "Company") will be held on Wednesday, May 24, 2000 at 9:00 a.m.
at the Queen City Club, 331 East Fourth Street, Cincinnati, Ohio 45202, for the
following purposes:
1. To elect six directors to hold office until the 2001 Annual Meeting of
Shareholders and until such time as their successors are duly elected
and qualified;
2. To confirm the appointment of Arthur Andersen LLP as independent
auditors of the Company for the 2000 fiscal year; and
3. To transact such other business as may properly come before the meeting
and any adjournment thereof.
Shareholders of record at the close of business on March 17, 2000 will be
entitled to vote at the meeting and at any adjournment thereof.
/s/ RONALD G. GRATZ
RONALD G. GRATZ
Secretary
April 14, 2000
IMPORTANT
Your prompt dating, signing and returning of the enclosed proxy in the
enclosed envelope would be appreciated. If you attend the Meeting, you may
nevertheless vote in person should you desire. The return of proxies is
important, regardless of the number of shares owned.
<PAGE> 3
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Zaring
National Corporation (the "Company"), 11300 Cornell Park Drive, Suite 500,
Cincinnati, Ohio 45242, for use at the Annual Meeting of Shareholders of the
Company to be held on May 24, 2000, and at any adjournment thereof (the
"Meeting"). This Proxy Statement is being mailed to shareholders on or about
April 28, 2000.
On March 17, 2000, the record date for the determination of shareholders
entitled to vote at the Meeting (the "Record Date"), there were 4,591,488 of the
Company's common shares without par value (the "Common Shares") outstanding, and
each such share is entitled to one vote on each matter coming before the
Meeting. In voting on the proposal to elect directors of the Company, the
nominees receiving the greatest number of votes will be elected. Approval of any
other matter properly coming before the Meeting requires the vote of the holders
of a majority of the Common Shares present in person or represented by proxy at
the Meeting, and entitled to vote.
VOTING AND REVOCATION OF PROXIES
HOLDERS OF COMMON SHARES
An abstention from voting will be tabulated as a vote withheld (and thus
will have the practical effect of a "no" vote in voting on the proposal to elect
directors), but will be included in computing the number of Common Shares
present for purposes of determining the presence of a quorum at the Meeting. If
a broker indicates on the form of proxy that it does not have discretionary
authority as to certain Common Shares to vote on a particular matter, those
Common Shares will be considered as present but not entitled to vote with
respect to that matter. If a proxy card is signed and returned without
specifying choices, the shares represented thereby will be voted (1) to elect as
directors the six persons named below, (2) to confirm Arthur Andersen LLP as
independent auditors of the Company for fiscal year 2000 and (3) as recommended
by the individuals named on the proxy card in their discretion with regard to
other matters as may properly come before the Meeting.
The members of the proxy committee, whose names are set forth on the
accompanying form of proxy, were named by the Board of Directors of the Company.
A shareholder giving a proxy in the accompanying form retains the power to
revoke it by making a later appointment or by giving notice of revocation to the
proxy tabulator, The Fifth Third Bank, 38 Fountain Square, Cincinnati, Ohio
45263. Attendance at the Meeting does not in itself revoke the appointment;
however, it may be revoked by giving notice in open meeting. A revocation made
during the Meeting will not affect any vote previously taken.
PARTICIPANTS IN RETIREMENT BENEFIT PLAN
Separate proxy cards are being submitted to all persons who have Common
Shares allocated to their accounts as participants or beneficiaries under the
Zaring National Corporation Retirement Benefit Plan (the "RBP Plan"). It is
anticipated that a representative of PNC Bank, National Association ("PNC"),
which acts as Trustee for the RBP Plan, will attend the Meeting in order to
vote, in accordance with the instructions of the participants or their
beneficiaries, the shares which it holds of record as Trustee and which have
been allocated to the participants' accounts. If a proxy card is signed and
returned without specifying choices, the shares represented thereby will be
voted (1) to elect as directors the six persons named below and (2) to confirm
Arthur Andersen LLP as independent auditors of the Company for fiscal year 2000.
If no proxy card is received from a participant or beneficiary, no vote will be
cast as to the shares represented thereby as to the above two matters.
1
<PAGE> 4
PNC, as Trustee of the RBP Plan, will determine the vote of the shares held by
such plan as to any matters other than the above two items which properly come
before the Meeting.
Any RBP Plan participant or beneficiary giving a proxy in the accompanying
form retains the power to revoke it by making a later appointment or by giving
notice of revocation to PNC. Under the rules of the RBP Plan, only PNC, as the
Trustee of the plan, can vote the shares allocated to the accounts of
participants, even if such participants or their beneficiaries attend the
Meeting in person.
COSTS OF SOLICITATION
The Company will bear the costs of solicitation of proxies, including the
charges and expenses of stock brokerage firms, banks, trust companies and others
for forwarding solicitation materials to beneficial owners of shares. In
addition to solicitation by mail, directors, officers and regular employees of
the Company may solicit proxies in person or by telephone.
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" THE ELECTION OF THE NOMINEES.
The Company's Amended Regulations provide that the number of directors
shall be not less than five or more than nine and that such number shall be
determined by the affirmative vote of a majority of the whole Board of Directors
present at any meeting of the Board of Directors at which a quorum is present.
Directors are elected for a one-year term until the next Annual Meeting of
Shareholders.
INFORMATION CONCERNING NOMINEES
Six directors will be elected at the Meeting. The Board of Directors has
nominated Allen G. Zaring, III, John R. Brooks, Murat H. Davidson, Daniel W.
Geeding, Robert N. Sibcy and John H. Wyant to serve as directors of the Company
until the 2001 Annual Meeting of Shareholders and until such time as their
respective successors are elected and qualified.
If any nominee is unable or unwilling to serve as a director on the date of
the Meeting (a situation which is not contemplated by the Board of Directors at
the present time), proxies will be voted by the proxy committee for the election
of such substitute as the Board of Directors may recommend and for the remaining
nominees.
The following table sets forth information with respect to the age and
experience of nominees for election as directors.
<TABLE>
<CAPTION>
POSITIONS WITH YEAR FIRST ELECTED
NOMINEE AGE THE COMPANY A DIRECTOR
- ------- --- -------------- ------------------
<S> <C> <C> <C>
John R. Brooks (a)..................... 55 Director 1979
Murat H. Davidson...................... 55 Director 1989
Daniel W. Geeding (a).................. 57 Director 1993
Robert N. Sibcy........................ 56 Director 1995
John H. Wyant (a)...................... 53 Vice-Chairman of the Board 1994
Allen G. Zaring, III (a)............... 57 Chairman of the Board 1964
</TABLE>
2
<PAGE> 5
- ---------------
(a) Member of the Executive Committee of the Board of Directors. The membership
of the Executive Committee includes the Chairman of the Board.
John R. Brooks is a member of the Audit, Executive and Compensation
Committees. Mr. Brooks is the President and Director of John R. Brooks
Associates, Inc., a financial consulting firm. From 1996 to 1997, Mr. Brooks
served as a consultant to The Seven Hills Schools, a private school in
Cincinnati. From 1990 to 1996, Mr. Brooks served as the Director of Business
Affairs (CFO) of The Seven Hills Schools.
Murat H. Davidson is a member of the Compensation Committee and has been a
director of the Company since 1989. Mr. Davidson is a partner and the managing
director of Regan Partners, L.P. From 1993 to 1995, he was the managing director
of Tiger Management Corp. Prior to joining Tiger, Mr. Davidson was the managing
director of Dreman Value Management L.P. He has 25 years of portfolio management
experience.
Daniel W. Geeding is a member of the Executive, Audit and Compensation
Committees. Mr. Geeding is the Director of the Center for International Business
at Xavier University and a Professor of Management at Xavier University. From
1988 to 1997, Mr. Geeding was the Dean of the Xavier University College of
Business Administration. He was on the Board of Directors of Fidelity Financial
of Ohio and is currently on the Board of Directors of Frisch's Restaurants,
Inc., and the Vice President of Finance of The Health Foundation of Greater
Cincinnati.
Robert N. Sibcy has been a director of the Company since 1995, and is a
member of the Audit Committee. Mr. Sibcy is President and the owner of Sibcy
Cline, Inc., a real estate brokerage firm in Cincinnati.
John H. Wyant is currently Vice Chairman of the Board of the Company and a
member of the Executive, Audit and Compensation Committees. He is the founder
and general partner of Blue Chip Venture Capital Fund, a venture capital fund
formed in 1992 to invest in privately-held companies. He has served as Chief
Executive Officer of Nutrition Technology Corporation and Home Entertainment
Network.
Allen G. Zaring, III formed the principal predecessor to the Company in
1964 and is currently Chairman of the Board and Chief Executive Officer of the
Company. He is a member of the Executive Committee of the Board of Directors.
Mr. Zaring is on the local advisory board of PNC Bank, National Association and
is a member of the Board of Advisors of Blue Chip Venture Capital Fund. Allen G.
Zaring, III is the father of Allen G. Zaring, IV.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and positions of the executive officers of the Company are
as follows:
<TABLE>
<CAPTION>
AGE
NAME (AS OF 3/17/00) TITLE
- ---- --------------- ----------------------------------------------------
<S> <C> <C>
ZARING NATIONAL CORPORATION
Allen G. Zaring, III.......... 57 Chairman of the Board and Chief Executive Officer
Daniel W. Jones............... 40 President and Chief Operating Officer
Ronald G. Gratz............... 52 Chief Financial Officer, Secretary and Treasurer
Theresa J. Peard.............. 50 Corporate Assistant Vice President of Administration
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
AGE
NAME (AS OF 3/17/00) TITLE
- ---- --------------- ----------------------------------------------------
<S> <C> <C>
ZARING HOMES, INC.
Patricia A. Payne............. 51 Senior Vice President, Marketing and Sales
Douglas C. Hinger............. 40 Vice President, Operations and Process Control
David E. Metz................. 39 Executive Vice President
Allen G. Zaring, IV........... 30 Executive Vice President
HOMEMAX, INC.
Matthew S. Massarelli......... 33 President and Chief Operating Officer
Lloyd C. McCaskill, Jr........ 43 Chief Financial Officer
</TABLE>
Allen G. Zaring, III formed the principal predecessor to the Company in
1964 and is currently Chairman of the Board and Chief Executive Officer. Mr.
Zaring, III has a B.S. in Economics and Finance from Babson College. Mr. Zaring,
III is a graduate of the Owner/President's Management Program of the Harvard
Graduate School of Business. Mr. Zaring also serves as a director of PNC Bank,
National Association, and is a member of the Board of Advisors of the Blue Chip
Venture Capital Fund, both located in Cincinnati, Ohio.
Daniel W. Jones joined the Company in 1982 as a production superintendent.
Mr. Jones served as Vice President of Construction for the Company's Nashville
Division from 1989 to 1992. Mr. Jones returned to Cincinnati in 1992 as
Executive Vice President of Production and became Cincinnati Divisional
President. In 1996, Mr. Jones was promoted to Midwest Regional President. In
1997, Mr. Jones was promoted to Executive Vice President, Chief Operating
Officer of Zaring Homes. In 1999, Mr. Jones was promoted to President and Chief
Operating Officer of Zaring National Corporation. Mr. Jones received a B.S. in
Construction from the University of Cincinnati.
Ronald G. Gratz joined the Company in 1995 as Vice President and Chief
Financial Officer. Mr. Gratz was the Treasurer of Borror Corporation since 1979
and Chief Financial Officer since 1992. Mr. Gratz is a Certified Public
Accountant registered in the State of Ohio and has a B.S. in Business
Administration and Accounting from The Ohio State University.
Theresa J. Peard joined the Company in 1989 and served as Office Manager
and Administrative Assistant to the Chairman of the Board and President. In
1995, Ms. Peard was promoted to Corporate Assistant Vice President of
Administration and Secretary. Ms. Peard received a B.A. in Business
Administration and Human Services from the College of Notre Dame of Maryland.
Patricia A. Payne joined the Company in 1987 and served as Vice President
of Merchandising from 1988 to 1993. In 1993, Ms. Payne was promoted to Corporate
Vice President of Marketing. In 1997, Ms. Payne was promoted to Senior Vice
President, Marketing and Sales of Zaring Homes. Ms. Payne received a B.A. from
Edgecliff College.
Douglas C. Hinger joined the Company in 1993 as Brand Manager. In 1994, Mr.
Hinger was promoted to Director of Sales and Marketing and, in 1996 Mr. Hinger
was promoted to Vice President of Marketing and Sales. In 1997, Mr. Hinger was
promoted to Vice President of Strategic Planning. In 1998, Mr. Hinger was
promoted to Vice President of Product and Community Planning for Zaring Homes.
In 1999, Mr. Hinger was promoted to Vice President of Community Planning and
Development for Zaring National Corporation. In 2000, Mr. Hinger was promoted to
Vice President of Operations and Process Control. Mr. Hinger received a B.A. in
Environmental Design from Miami University.
4
<PAGE> 7
David E. Metz joined the Company in 1993 as a Builder. Mr. Metz was
promoted to Vice President of Process and Improvement for the Cincinnati
Division in 1996. Mr. Metz was promoted to Division President of the
Indianapolis Division in 1997 and was promoted to Corporate Vice President of
Process Improvement in 1998. In 1999, Mr. Metz was promoted to Executive Vice
President of Zaring Homes. Mr. Metz has a B.S. in Operations and Production
Management from The Ohio State University School of Business.
Allen G. Zaring, IV joined the Company in 1996 as Director of Acquisition
and Development and in 1997 was promoted to President and Chief Executive
Officer of Hearthside Homes. From 1990 to 1996, Mr. Zaring, IV was President and
Chief Executive Officer of A Z Homes, Inc. In 1999, Mr. Zaring was promoted to
Executive Vice President of Zaring Homes. Mr. Zaring, IV has a B.A. in Business
Administration from Babson College.
Matthew S. Massarelli joined the Company in 1996 as Vice President and
General Counsel. In 1997, Mr. Massarelli was promoted to Executive Vice
President and Chief Executive Officer of HomeMax. In 1999, Mr. Massarelli was
promoted to President and Chief Operating Officer of HomeMax. Mr. Massarelli was
Associate Attorney for Caterpillar Financial Services Corporation, Nashville,
Tennessee from April 1996 to September 1996. Mr. Massarelli received a B.S. in
Finance from Miami University and a J.D. from Case Western Reserve University.
Lloyd C. McCaskill, Jr. joined the Company in 1997 as Chief Financial
Officer of HomeMax. From 1995 to 1997, Mr. McCaskill was Director Interim
Financial Management Division, Ostrande Burch & Company, Raleigh, North
Carolina. From 1982 to 1995, Mr. McCaskill was Chief Financial Officer of MCNC
in Raleigh, North Carolina. Mr. McCaskill is a Certified Public Accountant
registered in the state of North Carolina and has a B.S. in Accounting from the
University of North Carolina and a M.B.A. from the Kenan-Flagler School of
Business in North Carolina.
5
<PAGE> 8
SECURITY OWNERSHIP
The following table sets forth information, as of March 17, 2000 (unless a
different date is specified in the notes to the table), with respect to (a) each
person known by the Board of Directors of the Company to be the beneficial owner
of more than 5% of the Company's outstanding Common Shares, (b) each current
director and nominee for director of the Company, (c) each current executive
officer of the Company named in the Summary Compensation Table herein, and (d)
all directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT
SHAREHOLDER OWNERSHIP(A) OF CLASS
- ----------- ----------------- --------
<S> <C> <C>
Allen G. Zaring, III.................................... 2,864,269(b)(c) 62.38%
The Zaring Family Limited Partnership................... 2,000,000(b) 43.56%
John R. Brooks.......................................... 120,779(c) 2.63%
Murat H. Davidson....................................... 24,939(c) *
Daniel W. Geeding....................................... 8,039(c) *
Ronald G. Gratz......................................... 30,948(c) *
Daniel W. Jones......................................... 49,143(c) 1.07%
Matthew S. Massarelli................................... 8,450(c) *
Robert N. Sibcy......................................... 306,739(c) 6.68%
John H. Wyant........................................... 7,439(c) *
Douglas C. Hinger....................................... 22,691(c) *
All directors and executive officers as a group (54
persons).............................................. 3,644,043 79.37%
</TABLE>
- ---------------
* Percent of class is less than 1%
(a) The Securities and Exchange Commission has defined "beneficial owner" of a
security to include any person who has or shares voting power or investment
power with respect to any such security or who has the right to acquire
beneficial ownership of any such security within 60 days. Unless otherwise
indicated, the amounts owned reflect (i) direct beneficial ownership, and
(ii) the person indicated has sole voting and investment power.
(b) Includes the following Common Shares: 759,447 owned individually by Allen G.
Zaring, III, 11,012 owned by Mr. Zaring's spouse, Anne M. Zaring, and
2,000,000 held by the Zaring Family Limited Partnership of which Allen G.
Zaring, III and Anne M. Zaring are general partners.
(c) Includes Common Shares subject to outstanding options under the Company's
stock option plans. The percentages shown in the foregoing table are
calculated on the basis that outstanding shares include Common Shares
subject to outstanding options under the Company's stock option plans that
are exercisable by
6
<PAGE> 9
directors and officers within 60 days, in addition to the number of Common
Shares actually outstanding. Such amounts are:
<TABLE>
<S> <C>
Allen G. Zaring, III........................................ 93,810
John R. Brooks.............................................. 4,939
Murat H. Davidson........................................... 4,939
Daniel W. Geeding........................................... 4,939
Ronald G. Gratz............................................. 20,126
Daniel W. Jones............................................. 38,441
Matthew S. Massarelli....................................... 7,602
Robert N. Sibcy............................................. 4,439
John H. Wyant............................................... 4,939
Douglas C. Hinger........................................... 11,912
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, directors and persons who own more than 10% 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. Officers, directors and
greater than 10% shareholders are required to furnish the Company with copies of
all Section 16(a) forms they file. Based solely on the Company's review of the
copies of such forms received by it, and by statements of officers and directors
that they complied with all applicable filing requirements, the Company's
officers, directors and greater than 10% beneficial owners complied with all
filing requirements applicable to them.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee, the members of which are not
officers or employees of the Company. The Audit Committee, which held four
meetings during fiscal year 1999, recommends to the Board of Directors the
independent auditors to be employed by the Company; consults with the
independent auditors on the scope of the annual audit; approves the fees paid to
the independent auditors for audit services; reviews reports of examination of
the independent auditors, internal auditors and regulatory authorities; and
reports to the Board of Directors with respect to all of the foregoing. The
members of the Audit Committee are Messrs. Geeding (Chairman), Brooks, Sibcy and
Wyant.
The Board of Directors has a Compensation Committee, the members of which
are not officers or employees of the Company. The Compensation Committee, which
held one meeting during fiscal year 1999, is responsible for developing the
Company's executive compensation principles, policies and programs and
recommending them to the Board of Directors. The Compensation Committee also
recommends to the Board of Directors, on an annual basis, the amount and type of
compensation to be paid to the Chief Executive Officer and, with advice from the
Chief Executive Officer, to each of the other executive officers of the Company.
The members of the Compensation Committee are Messrs. Brooks (Chairman),
Davidson, Geeding and Wyant. See "Report of the Compensation Committee of the
Board of Directors on Executive Compensation."
The Board of Directors has an Executive Committee, which held two meetings
during fiscal year 1999. During intervals between meetings of the Board of
Directors, the Executive Committee has the authority to exercise all the powers
of the Board of Directors, except that it is not empowered to declare dividends,
to elect or remove officers, or to fill vacancies on the Board of Directors or
on the Executive Committee. All actions of the
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<PAGE> 10
Executive Committee are reported to the Board of Directors at its next meeting
and are subject to revision or alteration by the Board of Directors. The members
of the Executive Committee are Messrs. Zaring (Chairman), Brooks, Geeding and
Wyant.
The Board of Directors held eight meetings during fiscal year 1999. Each
current director who held that office throughout the fiscal year attended 75% or
more of those meetings and the meetings held during the fiscal year by all board
committees on which he served.
The Board of Directors does not have a Nominating Committee.
EXECUTIVE COMPENSATION
The following table summarizes all annual and long-term compensation paid
by the Company for services rendered the Company in all capacities for the
fiscal years ended December 31, 1997 through December 31, 1999, for (i) the
Chief Executive Officer and (ii) the four most highly compensated executive
officers of the Company who were serving as executive officers as of December
31, 1999 (collectively, the "Named Officers"):
SUMMARY COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------------
SECURITIES ALL
UNDERLYING OTHER
SALARY BONUS OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) SARS(#)(1) ($)(2)
- --------------------------- ---- -------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Allen G. Zaring, III.............. 1999 $125,000 $ 6,225 21,546 $114,094
Chairman & CEO 1998 129,807 0 7,865 160,671
1997 77,885 0 70,953 107,002
Daniel W. Jones................... 1999 $195,481 $ 9,000 25,735 $ 8,981
President & COO 1998 149,424 62,252 9,438 11,558
1997 121,323 70,280 7,421 3,651
Ronald G. Gratz................... 1999 $168,077 $ 4,860 9,164 $ 9,489
CFO/Secretary/Treasurer 1998 138,269 18,606 8,494 10,260
1997 124,038 26,199 5,676 3,672
Matthew S. Massarelli............. 1999 $173,018 $25,000 0 $ 7,562
President & COO 1998 137,596 15,938 7,602 7,749
HomeMax, Inc. 1997 107,885 6,372 0 2,322
Douglas C. Hinger................. 1999 $109,807 $ 0 6,022 $ 6,676
VP Operations & Process Control 1998 86,471 16,192 5,349 4,736
Zaring Homes, Inc. 1997 76,681 18,230 541 560
</TABLE>
- ---------------
(1) For additional information regarding options granted to the Named Officers
in fiscal year 1999, see the table captioned "Options/SAR Grants in Last
Fiscal Year."
8
<PAGE> 11
(2) The Company maintains split-dollar life insurance on the life of Mr. Zaring,
III. The Company paid $6,033 allocated to the term portion of the
split-dollar coverage in 1999. Mr. Zaring, III reimbursed the Company for
this portion of the insurance coverage. The terms of the split-dollar
agreement between the Company and Mr. Zaring, III state that the Company is
to be reimbursed for its payment of premiums. The actuarial value of the
excess of the cash value over the premiums paid by the Company for 1999 was
$101,855. The amount was based upon the assumption that the policies will be
paid in full and remain in effect until Mr. Zaring, III's retirement, with
the amount representing the weighted average for retirement at ages 58, 60
and 65. The Company contributed: $1,587 as a premium on a life insurance
policy on the life of Mr. Zaring, III, $1,388 to the Employee Stock Purchase
Plan (the "Stock Purchase Plan," described below), $2,375 to the Executive
Deferred Compensation Plan (the "Deferred Compensation Plan," described
below) and $6,889 to the Zaring National Corporation Retirement Benefit Plan
(the 401(k) plan described below).
Includes in 1999, for the other Named Officers: for Mr. Jones the Company
contributed: $482 as a premium on a life insurance policy on the life of Mr.
Jones, $100 to the Stock Purchase Plan and $8,399 to the 401(k) Plan; for Mr.
Gratz the Company contributed: $1,205 as a premium on a life insurance policy on
the life of Mr. Gratz, $54 to the Stock Purchase Plan, and $8,230 to the 401(k)
Plan; for Mr. Massarelli the Company contributed: $324 as a premium on a life
insurance policy on the life of Mr. Massarelli and $7,238 to the 401(k) Plan;
and for Mr. Hinger the Company contributed: $296 as a premium on a life
insurance policy on the life of Mr. Hinger, $615 to the Stock Purchase Plan and
$5,765 to the 401(k) Plan.
STOCK PURCHASE PLAN
The Stock Purchase Plan is intended to enable certain full-time employees
of the Company and its subsidiaries which participate in the plan (with the
Company and such subsidiaries being referred to as the "Employer" in this
paragraph) to acquire a proprietary interest in the growth and performance of
the Employer and thereby an increased incentive to work for the future success
of the Employer, by offering such employees the opportunity to acquire Common
Shares. An eligible employee is able to have a percentage (1% to 10%) of his or
her base salary or wages, and/or his or her cash compensation other than his or
her base salary or wages, (such non-base compensation being referred to in this
paragraph as his or her "incentive pay") deducted on an after-tax basis from his
or her pay in order to be used to buy Common Shares. The Employer will match the
amount of an eligible employee's pay deductions under the Stock Purchase Plan in
an amount equal to one-ninth of such pay deductions. An eligible employee's pay
deductions and any matching contributions made by the Employer under the Stock
Purchase Plan are allocated to an account in the name of the eligible employee
and generally used thereafter to purchase Common Shares for the employee.
DEFERRED COMPENSATION PLAN
The Deferred Compensation Plan is intended to provide retirement income to
a select group of key employees of the Company and its subsidiaries which
participate in the plan (with the Company and such subsidiaries being referred
to as the "Employer" in this paragraph). The retirement income paid under the
Deferred Compensation Plan is paid from the general assets of the Employer, and
such payments are not secured in advance by any fund that is beyond the
creditors of the Employer in the event of the Employer's insolvency or
bankruptcy. Under the Deferred Compensation Plan, eligible key employees are
able to defer, on a pre-tax basis, up to 25% of their base salary for a calendar
year and/or up to 100% of their bonuses made for such calendar year (and paid
during such year or within six months of the end of such year). Under the plan,
eligible employees may designate how they want their deferred earnings to be
assumed to be invested for purposes of the plan among certain investment funds,
one of such investment funds being a Company Common Stock Fund (which is a fund
9
<PAGE> 12
which is assumed to invest substantially all of its assets in Common Shares).
The Employer also credits additional amounts to an eligible employee's account
under the Deferred Compensation Plan for each calendar quarter in an amount
equal to the lesser of: (i) 100% of the amount of the base salary and bonuses
which the eligible employee has deferred during such calendar quarter under the
plan and for which the eligible employee has directed that the initial assumed
investment of such amount will be the Company Common Stock Fund; or (ii) 25% of
the total amount of base salary and bonuses which the eligible employee defers
under the plan in such calendar quarter. Once an eligible employee has made
deferrals of at least $10,000, subject to certain adjustments, in any calendar
year, no further deferrals of base salary or bonuses in the rest of the calendar
year are considered in determining any additional matching amount for the
eligible employee's account under the plan. Any matching amounts allocated to
the eligible employee's account under the plan are always assumed to be invested
in the Company's Common Stock Fund. After an eligible employee terminates
employment with the Employer, the amounts credited to his or her account under
the Deferred Compensation Plan are paid to him or her in a lump sum payment (or,
if the eligible employee otherwise elects within a certain period of time prior
to his or her termination of employment, in up to ten annual installment
payments).
401(k) PLAN
The 401(k) Plan is a defined contribution plan intended to enable certain
employees of the Company and its subsidiaries which participate in such plan
(with the Company and such subsidiaries being referred to as the "Employer" in
the paragraph) to save for retirement out of their pay on a tax-deferred basis
and obtain additional Employer-provided retirement benefits. An eligible
employee is able to have a percentage (1% to 25%) of his or her compensation
contributed to such plan on a pre-tax basis (up to $10,000, or as such amount
may be adjusted by the Internal Revenue Service for cost-of-living). In
addition, the Employer contributes 25% of the portion of an eligible employee's
pre-tax salary contribution for each pay day that exceeds 6% of the employee's
compensation on such day as a matching contribution to the Plan. Further
beginning with 1998, the Employer contributes for any calendar year 3.75% of the
compensation for such year of each eligible employee who is employed by the
Employer on the last day of such year (or who terminated employment during the
year by reason of his or her death or disability or after attaining age 65). An
eligible employee is fully vested in all amounts allocated for his or her
account under such plan and can direct the investment of such amounts while held
in such plan among several investment funds, including a fund principally
investing in Common Shares. An eligible employee can receive the amounts
allocated to his or her account under such plan, generally either in a lump sum,
in installments, or as an annuity, after he or she ceases employment with the
Employer. He or she generally can also receive certain hardship withdrawals of
his or her pre-tax salary contributions to the plan.
10
<PAGE> 13
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM*
- -------------------------------------------------------------------------------------- ----------------------
(a) (b) (c) (d) (e) (f) (g)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ---------------------------- ------------- ------------- ----------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Allen G. Zaring, III(1)..... 5,723 2.6% $8.38 4/29/09 $78,073 $124,318
Allen G. Zaring, III(2)..... 823 0.4 8.38 4/29/09 11,227 17,878
Allen G. Zaring, III(3)..... 15,000 6.7 8.48 3/01/09 207,195 329,924
Daniel W. Jones(1).......... 9,385 4.2 8.38 4/29/09 128,030 203,867
Daniel W. Jones(2).......... 1,350 0.6 8.38 4/29/09 18,417 29,326
Daniel W. Jones(3).......... 15,000 6.7 8.48 3/01/09 207,195 329,924
Ronald G. Gratz(1).......... 8,012 3.6 8.38 4/29/09 109,300 174,041
Ronald G. Gratz(2).......... 1,152 0.5 8.38 4/29/09 15,716 25,024
Douglas C. Hinger(1)........ 5,265 2.4 8.38 4/29/09 71,825 114,369
Douglas C. Hinger(2)........ 765 0.3 8.38 4/29/09 10,327 16,444
</TABLE>
- ---------------
* The dollar gains under these columns result from calculations assuming 5% and
10% growth rates as set by the Securities and Exchange Commission and are not
intended to forecast future price appreciation of the Company's Common
Shares. The gains reflect a future value based upon growth at these
prescribed rates. The Company did not use an alternative formula for a grant
date valuation, an approach which would state gains at present, and therefore
lower, value. The Company is not aware of any formula which will determine
with reasonable accuracy a present value based on future unknown or volatile
factors.
It is important to note that options have value to the Named Officers and to
all option recipients only if the stock price advances beyond the base price
shown in the table during the effective option period.
(1) These awards were stock options made pursuant to the Key Employees Stock
Option Plan. An option granted under the Key Employees Stock Option Plan
will become void as to all Common Shares which were subject to the option if
the key employee to whom the option is granted fails to purchase Common
Shares during the Company's fiscal year during which the option is granted
at a cost to the key employee of at least 10% of his or her incentive
compensation earned for such fiscal year from the Company and it's
affiliated companies. The option will also become void as to any Common
Shares subject to the option that are not purchased either within a certain
period of time after the applicable key employee terminates his or her
employment as an employee or a director with the Company and its affiliate
companies or within the ten year period beginning on the date the option is
granted.
(2) These awards were made pursuant to the 1997 Stock Option Plan. Under this
plan, an option will, in general, be able to be exercised as to the total
number of Common Shares granted under the option at any time on or after the
first anniversary date on which the option is granted. The option will,
however, become void as to any Common Shares subject to the option that are
not purchased either within a certain period of time after the employee to
whom the option was granted terminated employment with the Company and its
affiliated companies or within the ten year period beginning on the date the
option is granted.
11
<PAGE> 14
(3) These stock options were granted during March 1999 in which Allen G. Zaring,
III and Daniel W. Jones received 15,000 options each. For these grants, the
option will, in general, be able to be exercised on or after the date of the
issuance of the Company's Form 10-K for fiscal 1999 and upon achievement of
certain earnings per share goals.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Allen G. Zaring, III is a member of the Blue Chip Venture Company board of
advisors. John H. Wyant is a general partner of Blue Chip Venture Company and is
a member of the Compensation Committee.
REPORT OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
consists entirely of outside directors, currently four in number. The Committee
is responsible for developing the Company's executive compensation principles,
policies and programs and recommending them to the Board of Directors. In
addition, the Committee, with advice from the Chief Executive Officer,
recommends to the Board of Directors on an annual basis the compensation to be
paid to the Chief Executive Officer and to each of the other executive officers
of the Company, including those named in the Summary Compensation Table.
The Committee believes that, in representing the Board of Directors, it
must act in the best interests of the shareholders as it reviews and determines
the Company's executive compensation principles, policies and programs. The
Committee's essential goal is to create a balance by which the Company is able
to attract and retain qualified management personnel while at the same time
maximizing the Company's financial performance and safeguarding the Company's
assets. In compensating the Company's executive officers, the Committee seeks to
achieve the following goals:
- motivate executive officers to strive for and achieve outstanding
corporate performance that provides a direct benefit to shareholders;
- attract highly-qualified key management personnel; and
- reward superior performance in reaching corporate objectives with
aggressive compensation levels and provide that a significant portion of
compensation is dependent on the Company's annual performance.
In fiscal year 1999, executive officer compensation had two primary
elements: base salary and incentive cash bonuses. These elements are discussed
in more detail below.
BASE SALARY COMPENSATION
Base salaries for executive officers in fiscal 1999 were determined after
review of an analysis of salaries paid for comparable positions and
consideration of the competition for executive talent within the Company's
industry. The Committee's review included the companies used in the Peer Group
for the performance information graph (see "Shareholder Return Performance
Information," below) as well as additional companies in the homebuilding
industry. The Company's compensation philosophy is to target executive salaries
close to the mean of the market rate paid for comparable positions within the
homebuilding industry.
12
<PAGE> 15
INCENTIVE CASH BONUS COMPENSATION
The Incentive Cash Bonus Compensation, which is paid out in the form of
quarterly bonuses during the year, was established to provide a direct financial
incentive to achieve both individual and corporate goals. Each year the Company
enters into incentive cash bonus arrangements with its executive officers. Under
this program, an executive may earn a maximum bonus between 30% and 100% of his
or her base salary. The bonus is based upon the achievement of certain goals,
including customer satisfaction, the time to construct homes, the level of
revenues, the level of profits, inventory turnover and return on managed assets.
STOCK OPTION AWARDS
During 1999, the Company awarded two types of stock options to its
executive officers. Under the Key Employees Stock Option Plan, stock options of
a level set by the plan's terms were awarded and allocated among certain key
employees, based upon their level of annual base salary. The option granted to
any key employee under such plan generally will not be exercisable unless the
employee purchases a certain number of the Company's Common Shares (under the
Key Employees Stock Option Plan or otherwise) equal to 10% of his or her
incentive compensation for the Company's fiscal year in which the option was
granted. In addition, under the 1997 Stock Option Plan, stock options of a level
set by the plan's terms were awarded and allocated among all executive officers
and full-time employees of the Company and its subsidiaries (excluding HomeMax,
Zaring Financial Services and subsidiaries of such companies), based generally
upon their annual rates of base salary and wages.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
At the request of Allen G. Zaring, III, the Company's Chief Executive
Officer, the only compensation he received during 1996 was health insurance
coverage and payment of associated health expenses for himself and his family
and the value of split dollar life insurance maintained on his life by the
Company.
In 1997 and continuing through 1999, Mr. Zaring, III, became more actively
involved in the day-to-day management of the Company and its subsidiaries than
he had in recent years. In recognition of his increased involvement in the
management of the Company and its subsidiaries, the Committee and Mr. Zaring,
III, agreed that he receive an annual salary in the amount of $125,000. Mr.
Zaring also received health insurance coverage and payment of associated health
expenses for himself and his family and the value of split dollar life insurance
maintained on his life by the Company.
The Compensation Committee
John R. Brooks, Chairman
Murat H. Davidson
Daniel W. Geeding
John H. Wyant
13
<PAGE> 16
SHAREHOLDER RETURN PERFORMANCE INFORMATION
The following graph portrays a comparison of the percentage change in the
Company's cumulative total shareholder return on its Common Shares (as measured
by dividing (i) the sum of (A) the cumulative amount of dividends, assuming
dividend reinvestment during the periods presented, and (B) the difference
between the Company's share price at the end and the beginning of the periods
presented; by (ii) the share price at the beginning of the periods presented)
since December 31, 1994 with the NASDAQ U.S. Composite Index and a Peer Group
Index. The Peer Group consists of Engle Homes, Inc., FPA Corporation, Inco Homes
Corporation, Oriole Homes Corp., and Washington Homes, Inc.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG ZARING NATIONAL CORPORATION,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND A PEER GROUP
<TABLE>
<CAPTION>
ZARING NATIONAL NASDAQ STOCK
CORPORATION PEER GROUP MARKET (US)
--------------- ---------- ------------
<S> <C> <C> <C>
12/31/94 100 100 100
12/31/95 153.54 113.99 141.33
12/31/96 181.82 108.28 173.89
12/31/97 145.45 150.02 213.07
12/31/98 141.41 141.03 300.25
12/31/99 74.75 111.58 542.43
</TABLE>
* $100 INVESTED ON 12/31/94 IN STOCK OR INDEX INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
--------------------------------------------------------------------
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
ZARING NATIONAL CORPORATION.............. $100.00 $153.54 $181.82 $145.45 $141.41 $ 74.75
PEER GROUP............................... 100.00 113.99 108.28 150.02 141.03 111.58
NASDAQ STOCK MARKET (US)................. 100.00 141.33 173.89 213.07 300.25 542.43
</TABLE>
14
<PAGE> 17
DIRECTOR COMPENSATION
Directors who are not employees of the Company are paid directors' fees for
their services at the rate of $1,000 per Board meeting attended, $500 per
Committee meeting attended and an annual retainer of $15,000. Total payments to
such directors for the Company's last fiscal year amounted to $112,707, which
includes amounts paid as reimbursement for travel expenses.
In addition to such remuneration, outside directors (directors who are not
also employees of the Company) will receive stock options under the Company's
Outside Directors Stock Option Plan (the "Outside Directors Option Plan"). The
Outside Directors Option Plan provides for the grant to all outside directors of
options to purchase Common Shares of the Company over an extended period of time
at a set purchase price. The full Board of Directors of the Company interprets
the Outside Directors Option Plan to the extent any interpretation is necessary.
Any option granted under the Outside Directors Option Plan is exercisable
after the date on which occurs the first annual meeting of shareholders of the
Company which follows the date on which the option was granted (provided the
outside director has attended at least 75% of the meetings of the Company's
Board of Directors which occurred in the Company's fiscal year during which the
option was granted). Any such option will not be exercisable as to any Common
Shares subject to the option that are not purchased, either within a certain
period of time after the outside director to whom the option was granted ceased
to be an outside director of the Company or within the ten year period beginning
on the date the option is granted. The price at which shares can be purchased
under any option will be equal to the fair market value of such shares at the
time the option is granted. Each option granted under the Outside Directors
Option Plan will be granted within ten years from the date the plan was adopted
by the Company.
The total number of Common Shares of the Company that may be issued
pursuant to the Outside Directors Option Plan on or after January 31, 1998 is
75,000 subject to adjustments to prevent dilution or enlargement of rights of
participants in certain circumstances. 5,000 options were awarded under the
Outside Directors Option Plan (1,000 options to each outside director) during
the Company's last fiscal year. As of December 31, 1999, 50,805 options remain
available to grant under the Outside Directors Option Plan.
TRANSACTIONS INVOLVING DIRECTORS AND EXECUTIVE OFFICERS
During 1998, in an effort to provide additional liquidity and financing to
the Company, two organizations were formed; First Cincinnati Leasing LLC
(Leasing) and First Cincinnati Land LLC (Land). In March 1999, First Cincinnati
Leasing 99 LLC was formed (Leasing 99) and in February 2000, First Cincinnati
Leasing 2000 LLC (Leasing 2000) was formed.
Leasing and Leasing 99 (limited liability companies owned by Allen G.
Zaring, III) purchased and subsequently leased back $14.2 million of model homes
collectively from Zaring Homes. Leasing and Leasing 99 lease the model homes to
Zaring Homes on a triple net basis, wherein Zaring Homes is responsible for
taxes, insurance, maintenance and homeowner fees, if applicable. As of December
31, 1999, Zaring Homes paid rent equal to the sales price of the model home
times the prime interest rate. To finance the purchase of the model homes,
Leasing and Leasing 99 entered into loan agreements whereby an amount of up to
$10.0 million and $3.0 million, respectively could be borrowed. As of December
31, 1999, the loans had outstanding balances of $6.1 million and $2.9
respectively.
15
<PAGE> 18
During February 2000, Leasing 2000 purchased and subsequently leased back
$5.8 million of model homes from Zaring Homes. The leasing terms are the same as
those of Leasing and Leasing 99. The financing for the purchase of the model
homes was completed through a member contribution by Allen G. Zaring, III.
In addition, Land (a limited liability company owned equally by Allen G.
Zaring, III and his two sons, Allen G. Zaring, IV and Mark Zaring), purchased
$4.3 million in undeveloped land inventory from Zaring Homes and $5.6 million of
undeveloped land from unrelated third parties. Subsequently, Land executed
various three-year land option contracts expiring July 2001 through September
2001 in which Zaring Homes will purchase the undeveloped land inventory from
Land. The land option contract requires Zaring Homes to make monthly payments
equal to Land's interest and other carrying cost (real estate taxes, sewer,
water). Zaring Homes' purchase price of the land will equal the original cost
plus 15%. To finance the purchase of the land, Land entered into a loan
agreement whereby an amount of up to $10.0 million could be borrowed through
March 31, 1999. As of December 31, 1999, the loan had an outstanding balance of
$8.7 million.
The Board of Directors concluded that the financing arrangements with
Leasing, Leasing 99, Leasing 2000 and Land contained more favorable terms than
those which could have been obtained utilizing independent commercial resources.
In 1999, Allen G. Zaring, III provided $2.0 million of temporary financing
to the Company which was repaid. In addition, Allen G. Zaring, III provided to
the Company $5.0 million in subordinated notes payable, interest payable monthly
at the greater of 9 7/8% or the prime rate plus 1 5/8% (10 1/8% at December 31,
1999), principal due September, 2002. Interest expense in relation to the
temporary financing and subordinated notes payable was $127,000 during 1999.
In 1999, the Company sold residential homes to certain executive officers
for a total of approximately $880,000.
INDEPENDENT AUDITORS
The Board of Directors has appointed Arthur Andersen LLP as independent
auditors of the Company for fiscal year 2000. Arthur Andersen LLP has served the
Company in that capacity since 1983.
While there is no legal requirement that the selection of auditors be
submitted to a vote of the shareholders, the Board of Directors believes that
the selection of auditors is of sufficient importance to justify shareholder
ratification. In the event that the shareholders do not confirm the selection of
Arthur Andersen LLP, the Board of Directors will reconsider its selection. It is
anticipated that a representative of Arthur Andersen LLP will attend the
Meeting, will have an opportunity to make a statement if he or she desires to do
so and will be available to respond to appropriate questions that may be asked
by shareholders.
Confirmation of the appointment of Arthur Andersen LLP will require the
affirmative vote of the holders of a majority of Company Common Shares present
in person or represented by proxy and entitled to vote at the Meeting. THE BOARD
OF DIRECTORS RECOMMENDS THAT THE SELECTION OF ARTHUR ANDERSEN LLP BE CONFIRMED.
SHAREHOLDER PROPOSALS
Proposals of security holders intended by such holders to be presented at
the next annual meeting of shareholders of the Company must be received by the
Company no later than December 29, 2000 for inclusion in the Company's proxy
statement and proxy relating to that meeting. A shareholder proposal submitted
outside the processes of Rule 14a-8 will be considered untimely if submitted to
the Company after March 14, 2001. As to
16
<PAGE> 19
any such proposal submitted for consideration at the 2001 Annual Meeting, the
Company's management will use its discretionary voting authority when the
proposal is raised at the annual meeting. Proposals should be sent to Ronald G.
Gratz, Secretary, Zaring National Corporation, 11300 Cornell Park Drive, Suite
500, Cincinnati, Ohio 45242.
OTHER BUSINESS
The Board of Directors knows of no other matter to be presented, or to be
acted upon, at the Meeting. If any other matter comes before the Meeting or any
adjournment thereof, the members of the proxy committee named in the enclosed
proxy will vote upon such matter in accordance with their best judgment.
This Proxy Statement and the above Notice are sent by order of the Board of
Directors.
/s/ RONALD G. GRATZ
RONALD G. GRATZ
Secretary
April 14, 2000
17
<PAGE> 20
[Zaring National LOGO]
ZARING NATIONAL CORPORATION
PROXY--ANNUAL MEETING OF SHAREHOLDERS, MAY 24, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder appoints Allen G. Zaring, III, John R.
Brooks and John H. Wyant and each of them, as attorneys, with full power of
substitution, to vote all shares in ZARING NATIONAL CORPORATION (the "Company")
that the undersigned is entitled to vote at the annual meeting of the Company's
shareholders to be held on Wednesday, May 24, 2000 at 9:00 A.M. at the Queen
City Club, 331 East Fourth Street, Cincinnati, Ohio 45202 and at any adjournment
thereof, upon the matters indicated below and fully described in the Company's
proxy statement dated on or about April 14, 2000 as well as upon any other
matter properly coming before the meeting.
The shares represented by this proxy will be voted as directed or, if
no direction is specified, will be voted FOR the election of Directors and FOR
confirmation of the appointment of independent auditors.
1. Election of Directors:
FOR ALL NOMINEES [ ] WITHHOLD AUTHORITY [ ]
(except as noted below) to vote for all nominees
Nominees: Allen G. Zaring, III, John R. Brooks, Murat H. Davidson, Daniel W.
Geeding, Robert N. Sibcy and John H. Wyant
For, except votes withheld from the following nominee(s):_______________________
____________________________________________________
2. To confirm appointment of Arthur Andersen LLP as independent auditors of the
Company for fiscal year 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued, and to be dated and signed on the reverse side)
<PAGE> 21
[Zaring National Letterhead]
fold and detach here
- --------------------------------------------------------------------------------
3. In their discretion, to act upon such other matters as may properly come
before the meeting.
Please sign name(s) exactly
as printed hereon. In signing
as attorney, administrator,
executor, guardian or trustee,
please give title as such.
Date:___________________, 2000
------------------------------
Signature
------------------------------
Signature if held jointly
Votes must be indicated (X)
in Black or Blue ink. PLEASE
MARK, SIGN AND RETURN THIS
PROXY CARD PROMPTLY, USING
THE ENVELOPE PROVIDED.
<PAGE> 22
[Zaring National LOGO]
ZARING NATIONAL CORPORATION
PROXY INSTRUCTION--ANNUAL MEETING OF SHAREHOLDERS, MAY 24, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEE OF THE
ZARING NATIONAL CORPORATION RETIREMENT BENEFIT PLAN
The undersigned shareholder instructs PNC Bank, National Association
("PNC"), as Trustee for the Zaring National Corporation Retirement Benefit Plan
(the "RBP Plan"), to vote all shares in ZARING NATIONAL CORPORATION (the
"Company") that are held in the RBP Plan and as to which the undersigned has the
right under the policies of the RBP Plan to instruct the vote at the annual
meeting of the Company's shareholders to be held on Wednesday, May 24, 2000 at
9:00 A.M. at the Queen City Club, 331 East Fourth Street, Cincinnati, Ohio 45202
and at any adjournment thereof, in the manner indicated below and fully
described in the Company's proxy statement dated on or about April 14, 2000.
The shares represented by this proxy will be voted as directed or, if
this proxy is signed and returned to PNC but no direction as to the matters
noted below is specified, will be voted FOR the election of Directors and FOR
confirmation of the appointment of independent auditors. 1. Election of
Directors: FOR ALL NOMINEES [ ] WITHHOLD AUTHORITY [ ]
(except as noted below) to vote for all nominees Nominees:
Allen G. Zaring, III, John R. Brooks, Murat H. Davidson, Daniel W. Geeding,
Robert N. Sibcy and John H. Wyant For, except votes withheld from the following
nominee(s):_______________________
____________________________________________________ 2. To confirm appointment
of Arthur Andersen LLP as independent auditors of the Company for fiscal year
2000. [ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued, and to be dated and signed on the reverse side)
<PAGE> 23
[Zaring National LOGO]
ZARING NATIONAL CORPORATION
C/O CORPORATE TRUST SERVICES
MAIL DROP 10AT66--4129
38 FOUNTAIN SQUARE PLAZA
CINCINNATI, OH 45263
fold and detach here
- --------------------------------------------------------------------------------
Please sign name(s)
exactly as printed hereon.
Date:___________________, 2000
------------------------------
Signature
Votes must be indicated (X)
in Black or Blue ink. PLEASE
MARK, SIGN AND RETURN THIS
PROXY CARD PROMPTLY TO PNC,
USING THE ENVELOPE PROVIDED.
