<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
CHECK THE APPROPRIATE BOX:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
BEARINGS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
BEARINGS, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
[Table omitted as inapplicable].
------------------------
/ / 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.
[Table omitted as inapplicable].
<PAGE> 2
INSERT LOGO
3600 EUCLID AVENUE
CLEVELAND, OHIO 44115
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual Meeting of the Shareholders of
Bearings, Inc. (the "Corporation") will be held at The Forum Conference &
Education Center, One Cleveland Center, 1375 E. 9th Street, Cleveland, Ohio, on
Tuesday, October 18, 1994, at 1:30 p.m., Eastern Daylight Time, for the purpose
of considering and acting on the following:
1. Election of three (3) persons to be directors of Class I for a term of
three (3) years.
2. Ratification of the appointment by management of independent auditors of
the Corporation for the fiscal year ending June 30, 1995.
3. Transaction of such other business as may properly come before the
meeting and all adjournments thereof.
The Board of Directors has fixed September 1, 1994 as the record date for
the determination of the shareholders entitled to notice of and to vote at the
meeting. The transfer books of the Corporation will not be closed. A list of the
shareholders as of the record date will be available for examination at the
offices of the Corporation during the ten-day period prior to the meeting.
By order of the Board of Directors.
R. C. STINSON
Vice President-General Counsel
& Secretary
September 16, 1994
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE> 3
INSERT LOGO
PROXY STATEMENT
------------------
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Bearings, Inc., 3600 Euclid Avenue, Cleveland, Ohio 44115 (the
"Corporation") for use at the Annual Meeting of the Shareholders of the
Corporation to be held at 1:30 p.m., Eastern Daylight Time, on Tuesday, October
18, 1994, at The Forum Conference & Education Center, One Cleveland Center, 1375
E. 9th Street, Cleveland, Ohio.
The Corporation will bear the cost of solicitation of proxies. This
statement and the accompanying proxy will be sent to shareholders by mail on or
about September 16, 1994. The Corporation will also pay the standard charges and
expenses of brokerage houses, or other nominees or fiduciaries, for forwarding
such instruments to and obtaining proxies from securities holders and
beneficiaries for whose account they hold registered title to shares of the
Corporation. In addition to using the mails, directors, officers and other
employees of the Corporation, acting on its behalf, may also solicit proxies,
and Georgeson & Company Inc., New York, New York, has been retained, at an
estimated cost of $6,000 plus expenses, to aid in the solicitation of proxies
from brokers and institutional holders. Proxies may be solicited personally, by
telephone or by telegram.
Any shareholder giving a proxy has the right to revoke it at any time
before it is voted by giving notice of revocation to the Corporation in writing
or in open meeting. Presence at the meeting does not in and of itself revoke a
proxy.
VOTING AT THE MEETING
Only shareholders of record at the close of business on September 1, 1994
will be entitled to vote at the meeting. As of the record date there were
outstanding 7,595,947 shares of Common Stock, without par value, of the
Corporation. Each share is entitled to one vote. Abstentions and broker
non-votes are counted in determining the votes present at a meeting.
Consequently, an abstention or a broker non-vote has the practical effect of a
vote against a proposal, as each abstention or broker non-vote is one less vote
in favor of a proposal.
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes. At the Annual
Meeting, directors of Class I are to be elected for a term of three years
expiring in 1997. The properly nominated candidates receiving the greatest
number of votes for the director positions to be filled shall be elected to
those positions. The persons presently serving as directors of Class II for a
term expiring in 1995 and as directors of Class III for a term expiring in 1996
will continue in office.
The nominees for directors of Class I are John C. Dannemiller, John C.
Robinson and Dr. Jerry Sue Thornton. Messrs. Dannemiller and Robinson are
presently serving as directors of the Corporation and were elected to their
terms at an annual meeting of the shareholders of the Corporation. Dr. Thornton
is also presently serving as a director of the Corporation, having been elected
by the Board to fill a vacancy in January 1994. The proxies named in the
accompanying proxy intend to vote for the election of the three nominees unless
authority is withheld. If any of the nominees should be unable or unwilling to
serve as a director, the proxies reserve full discretion to vote for such other
person or persons as may be nominated at the meeting and/or to vote to reduce
the number of directors to nine. Management is not aware of any existing
circumstances that would cause any of the nominees to be unwilling or unable to
serve as directors.
3
<PAGE> 4
<TABLE>
Certain information concerning the nominees and the directors continuing in
office is given below. Unless otherwise stated, the nominees and directors have
held the positions indicated for the last five years.
<CAPTION>
NAME AND YEAR INFORMATION ABOUT
FIRST ELECTED NOMINEES AND
A DIRECTOR DIRECTORS
- - --------------------------------------- -------------------------------------------------------------------
<S> <C>
NOMINEES TO BE ELECTED AS DIRECTORS OF CLASS I FOR A TERM EXPIRING IN 1997
John C. Dannemiller(a)(b) Mr. Dannemiller is Chairman & Chief Executive Officer of the Corpo-
1985 ration (since January 1992). He was President (from January 1990 to
January 1992) and Chief Operating Officer (from 1988 to January
1992). He was Executive Vice President of the Corporation (from
1988 to January 1990). He is 56 years of age and serves as a
director of The Lamson & Sessions Co. and Star Banc Corporation.
John C. Robinson(a) Mr. Robinson is President & Chief Operating Officer of the Corpora-
1991 tion (since January 1992). He was Vice President of the Corporation
(from October 1989 to January 1992) and Executive Vice President
and General Manager of the Corporation's wholly-owned subsidiary,
King Bearing, Inc. (from June 1990 to October 1991). He was Direc-
tor of Development/Strategic Planning of the Corporation (from 1987
to October 1989). He is 52 years of age.
Dr. Jerry Sue Thornton Dr. Thornton is President (since January 1992) of Cuyahoga Commu-
1994 nity College, the largest community college in Ohio. From 1985 to
December 1991, Dr. Thornton was President of Lakewood Community
College in White Bear Lake, Minnesota. She is 47 years of age.
PERSONS SERVING AS DIRECTORS OF CLASS II FOR A TERM EXPIRING IN 1995
William G. Bares(b)(c)(e) Mr. Bares is President (since 1982), Chief Operating Officer (since
1986 1987) and a director (since 1981) of The Lubrizol Corporation, a
specialty chemical company. Lubrizol specializes in products
created through the application of advanced chemical, mechanical
and biological technologies for use in specialty additive systems
for gasoline and diesel engine oils, automatic transmission fluids,
gear oils, marine and tractor lubricants, and specialty products
for industrial fluids, fuel additives and process chemicals. He is
53 years of age and serves as a director of Oglebay Norton Company
and KeyCorp (formerly Society Corporation).
Russel B. Every(c)(d) Mr. Every has been a business consultant since his retirement as
1986 Chairman of The Lamson & Sessions Co. in December 1989. In
furtherance of his consulting business, he was hired as President
and Chief Executive Officer in October 1991 by the Board of
Directors of Sudbury, Inc., a diversified manufacturer of
industrial products, for the purpose of restructuring that company.
When Sudbury, Inc. filed for bankruptcy under Chapter 11 of the
U.S. Bankruptcy Code in January 1992, Mr. Every was elected
Chairman and director to continue the restructuring of that company
and to find a new Chief Executive Officer. A plan of reorganization
was confirmed and a new Chief Executive Officer selected;
therefore, Mr. Every's assignment with Sudbury, Inc. concluded in
August 1992. From 1985 until his retirement in December 1989, he
was Chairman of the Board of The Lamson & Sessions Co. He has
served as a director of that company since 1979. The Lamson &
Sessions Co. is a supplier of a variety of fabricated and machined
metal components and parts for use by original equipment
manufacturers principally in the transportation equipment industry.
Its Carlon Division is a leading domestic producer of thermoplastic
conduit, ducts, fittings, enclosures and accessories used
principally in electrical applications. He is 69 years of age.
</TABLE>
4
<PAGE> 5
<TABLE>
<CAPTION>
NAME AND YEAR INFORMATION ABOUT
FIRST ELECTED NOMINEES AND
A DIRECTOR DIRECTORS
- - --------------------------------------- -------------------------------------------------------------------
<S> <C>
John J. Kahl(b)(d) Mr. Kahl is Chairman and Chief Executive Officer of Manco, Inc., a
1992 manufacturer of pressure sensitive tapes for household and automo-
tive repair, including Duck(R) Brand Tapes, mailing and shipping
supplies for both home and office under the CareMail(R) brand,
weatherstripping and related home energy products for the "do-it-
yourselfer" and labels for both home and office. He is 53 years of
age.
George L. LaMore(a) Mr. LaMore was Chairman of the Board of the Corporation from
1983 January 1990 until his retirement in January 1992 and Chief Execu-
tive Officer from 1988 to January 1992. From 1983 to January 1990,
he was President of the Corporation. He is 68 years of age.
PERSONS SERVING AS DIRECTORS OF CLASS III FOR A TERM EXPIRING IN 1996
William E. Butler(b)(c) Mr. Butler is Chairman (since January 1992), Chief Executive
1987 Officer (since September 1991) and a director (since February 1989)
of Eaton Corporation, a manufacturer of highly engineered products
serving automotive, industrial, commercial and military markets.
Principal products include truck and automobile components,
electrical equipment and controls. He was President (from February
1989 to January 1992) and Chief Operating Officer (from February
1989 to September 1991) for that company. He is 63 years of age and
serves as a director of Ferro Corporation, Pitney Bowes, Inc. and
Zurn Industries, Inc.
L. Thomas Hiltz(a)(b)(c)(e) Mr. Hiltz is an attorney in Covington, Kentucky and is one of five
1981 trustees of the H.C.S. Foundation, a charitable trust which has
sole voting and dispositive power with respect to 369,000 shares of
Common Stock of the Corporation. He is 48 years of age.
Russell R. Gifford(d)(e) Mr. Gifford is President (effective September 1994) of CNG Energy
1992 Services Corp., a newly created subsidiary of Consolidated Natural
Gas Company. CNG Energy Services Corp. is an unregulated energy
services marketing company. He was President (from January 1989 to
September 1994) and Chief Executive Officer (from November 1989 to
September 1994) of The East Ohio Gas Company, the largest
distribution subsidiary of Consolidated Natural Gas Company, and
Chief Operating Officer of that company (from January 1989 to
November 1989). Mr. Gifford is 55 years of age and serves as a
trustee of First Union Real Estate Equity and Mortgage Investments.
<FN>
- - ---------------
(a) Member of the Executive Committee.
(b) Member of the Director Search Committee.
(c) Member of the Executive Organization & Compensation Committee.
(d) Member of the Audit Committee.
(e) Member of the Corporate Governance Committee.
</TABLE>
5
<PAGE> 6
<TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table lists the shareholders known to be beneficial owners of
more than five percent (5%) of the Common Stock of the Corporation as of June
30, 1994.
<CAPTION>
PERCENT
NAME AND ADDRESS AMOUNT AND NATURE OF OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS(1)
- - ---------------------------------------------- -------------------- ----------
<S> <C> <C>
Norwest Corporation 880,075(2) 11.7%
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479
The Capital Group, Inc. 749,700(3) 9.9%
333 South Hope Street
Los Angeles, California 90071
Trimark Investment Management, Inc. 585,000(4) 7.8%
Suite 5200, Scotia Plaza
Toronto, Canada M5H 3Z3
<FN>
- - ---------------
(1) Determined in accordance with Rule 13d-3 under the Securities Exchange
Act of 1934. Beneficial ownership may be disclaimed for other purposes.
(2) By letter dated August 10, 1994, Norwest Corporation has confirmed that
at June 30, 1994 it had sole voting power for 832,475 shares and sole
dispositive power for 880,075 shares. The foregoing shares are held in
a fiduciary or representative capacity, and Norwest Corporation
disclaims beneficial ownership of these shares.
(3) The Capital Group, Inc. filed a Schedule 13G dated March 9, 1993
indicating it has sole voting power for 399,700 shares and sole
dispositive power for 749,700 shares.
(4) By letter dated August 10, 1994, Trimark Investment Management, Inc.
has confirmed that at June 30, 1994 it had sole voting power and sole
dispositive power for 585,000 shares.
</TABLE>
6
<PAGE> 7
<TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the beneficial ownership of the Common Stock of
the Corporation, as of June 30, 1994, by all directors, the executive officers
named in the Summary Compensation Table on page 8 and all present directors and
executive officers as a group.
<CAPTION>
COMMON SHARES
BENEFICIALLY OWNED
ON PERCENT OF
NAME OF INDIVIDUAL JUNE 30, 1994 CLASS (1)
- - ------------------------------------------------- ------------------ ----------
<S> <C> <C>
William G. Bares................................. 5,804(2)
William E. Butler................................ 900
John C. Dannemiller.............................. 81,071(3) 1.1%
Russel B. Every.................................. 6,066
Russell R. Gifford............................... 937
L. Thomas Hiltz.................................. 374,586(4) 4.9%
John J. Kahl..................................... 6,953
George L. LaMore................................. 82,936(3) 1.1%
Francis A. Martins............................... 6,022
Fred L. Mohr..................................... 34,527(3)
John C. Robinson................................. 34,934(3)
Dr. Jerry Sue Thornton........................... 0
John R. Whitten.................................. 25,719(3)
All present directors and executive officers
as a group (16 individuals).................... 689,911(5) 8.9%
<FN>
- - ---------------
(1) Determined in accordance with Rule 13d-3 under the Securities Exchange Act
of 1934. Individuals may disclaim beneficial ownership for other purposes.
Percent of Class is not indicated if less than 1%. Except as otherwise
indicated, the director or executive officer has sole voting and dispositive
power over the number of shares indicated.
(2) Includes 1,000 shares owned by Mr. Bares' spouse, who has sole voting and
dispositive power.
(3) Includes shares that could be acquired within 60 days after June 30, 1994,
pursuant to exercise of stock options as follows: Mr. Dannemiller -- 53,250;
Mr. LaMore -- 60,857; Mr. Mohr -- 20,405; Mr. Robinson -- 20,794; and Mr.
Whitten -- 16,712.
(4) Includes 369,000 shares held by the H.C.S. Foundation, a charitable trust of
which L. Thomas Hiltz is one of five trustees, with sole voting and
dispositive power. Pursuant to a Schedule 13D filed by H.C.S. Foundation
dated December 20, 1989, the trustees, including Mr. Hiltz, disclaimed
beneficial ownership of those shares.
(5) Includes 187,080 shares that could be acquired within 60 days after June 30,
1994, pursuant to the exercise of stock options. In determining the
percentage of share ownership, the 187,080 stock option shares are added to
both the denominator and the numerator, pursuant to Instruction 1 to Item
403 of Regulation S-K and Rule 13d-3(d)(1) under the Securities Exchange Act
of 1934.
</TABLE>
7
<PAGE> 8
<TABLE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table summarizes compensation earned during the fiscal years
ended June 30, 1994, 1993 and 1992, by those persons who were, during the fiscal
year ended June 30, 1994, the Chief Executive Officer and the four other most
highly compensated executive officers of the Corporation.
<CAPTION>
LONG-TERM COMPENSATION
--------------------------
ANNUAL COMPENSATION AWARDS
--------------------------
--------------------- RESTRICTED NUMBER ALL OTHER
NAME AND BONUS STOCK AWARD(S) OF COMPENSATION
PRINCIPAL POSITION YEAR SALARY (1) (2) OPTIONS (3)(4)
- - ---------------------------- ----- -------- -------- -------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
John C. Dannemiller 1994 $374,567 $379,771 $ 0 0 $ 36,641
Chairman & Chief 1993 346,333 302,743 715,000 0 4,333
Executive Officer 1992 305,000 0 0 31,100
John C. Robinson 1994 258,333 224,602 0 0 26,410
President & Chief 1993 230,000 189,014 393,250 0 4,345
Operating Officer 1992 177,500 0 0 20,000
John R. Whitten 1994 165,000 124,932 0 0 7,733
Vice President -- 1993 148,333 86,702 178,750 0 3,615
Finance & Treasurer 1992 135,000 0 0 7,700
Fred L. Mohr 1994 157,250 100,500 0 0 12,608
Vice President -- 1993 155,833 79,388 178,750 0 3,124
Sales & Marketing 1992 153,000 0 0 11,000
Francis A. Martins 1994 146,667 96,439 0 0 12,432
Vice President -- 1993 140,000 69,836 178,750 0 0
Marketing (5) 1992 23,333 0 0 0
<FN>
- - ---------------
(1) Amounts reported in this column are earnings pursuant to the annual
Management Incentive Plan, described in the Execution Organization &
Compensation Committee Report on pages 11 and 12. Pursuant to the Deferred
Compensation Plan, described on page 16 hereof, the following named
executive officers deferred, and in August 1994 had invested in Corporation
Common Stock, the corresponding percentages of their earnings under the 1994
Management Incentive Plan: Mr. Dannemiller, 80%; Mr. Robinson, 85%; Mr.
Mohr, 50%; and Mr. Martins, 50%.
(2) Amounts reported in this column represent Performance-Accelerated Restricted
Stock awards under the 1990 Long-Term Performance Plan described in the
Executive Organization & Compensation Committee report on pages 12 and 13,
valued at the closing market price of the Common Stock of the Corporation on
the date of grant. As noted in the report, all of the
Performance-Accelerated Restricted Stock awards vested in the fiscal year
ended June 30, 1994 due to the achievement of specified hurdles relative to
the price of the Corporation's Common Stock. Dividends were paid on
Performance-Accelerated Restricted Stock at the same rate paid to all
shareholders.
(3) In accordance with transitional provisions of the Securities and Exchange
Commission's revised rules on executive compensation disclosure, amounts of
All Other Compensation have not been included for the fiscal year ended June
30, 1992.
(4) Amounts reported in this column include the following:
(a) The value of shares of the Corporation's Common Stock purchased with
contributions made by the Corporation and credited to the individual
accounts of the named executive officers under the Corporation's
Section 401(k) Savings Plan as follows: (i) in the fiscal year ended
June 30, 1994, Mr. Dannemiller, $3,347; Mr. Robinson, $4,406; Mr.
Whitten, $4,820; Mr. Mohr, $4,670; and Mr. Martins, $4,697; and (ii) in
the fiscal year ended June 30, 1993, Mr. Dannemiller, $2,245; Mr.
Robinson, $2,257; Mr. Whitten, $2,078; and Mr. Mohr, $1,665.
(b) Contributions made by the Corporation under the Employees'
Profit-Sharing Trust, a tax-qualified profit-sharing trust, to the
individual accounts of the named executive officers as follows: (i) for
the fiscal year ended June 30, 1994, Mr. Dannemiller, $2,913; Mr.
Robinson, $2,913; Mr. Whitten, $2,913; Mr. Mohr, $2,913; and Mr.
Martins, $2,913; and (ii) for the fiscal year ended June 30, 1993, Mr.
Dannemiller, $2,088; Mr. Robinson, $2,088; Mr. Whitten, $1,537; and Mr.
Mohr, $1,459. The contribution amounts for the fiscal year ended June
30, 1994 are estimated and subject to year-end adjustment.
</TABLE>
8
<PAGE> 9
(c) Pursuant to the Deferred Compensation Plan, each of the participant
Common Stock deferral accounts were credited with Corporation Common
Stock equal to an additional 10% of the amount of earnings deferred
into Corporation Common Stock. The value of the additional shares
credited to the accounts of named executive officers under the Deferred
Compensation Plan in the fiscal year ended June 30, 1994 are as
follows: Mr. Dannemiller, $30,381; Mr. Robinson, $19,091; Mr. Mohr,
$5,025; and Mr. Martins, $4,822.
(5) Mr. Martins joined the Corporation in May 1992.
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth information concerning stock option and
tandem stock appreciation right ("SAR") exercises by the Chief Executive Officer
and the four other most highly compensated executive officers of the Corporation
in the fiscal year ended June 30, 1994, and the value of in-the-money options
held by those individuals on June 30, 1994.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
SECURITIES UNDERLYING UNEXERCISED MONEY OPTIONS AT FISCAL YEAR
UNDERLYING OPTIONS AT FISCAL YEAR END(1) END
OPTIONS/SARS ----------------------------- -----------------------------
NAME EXERCISED VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ----------------------- --------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John C. Dannemiller.... 7,500 $ 16,560 53,250 21,450 $ 519,822 $ 277,584
John C. Robinson....... 0 0 20,794 11,932 222,382 145,805
John R. Whitten........ 9,000 19,872 16,712 5,805 158,273 77,407
Fred L. Mohr........... 12,250 29,778 20,405 7,969 204,707 104,893
Francis A. Martins..... 0 0 0 0 0 0
<FN>
- - ---------------
(1) All SARs granted in tandem with certain remaining unexercised stock options
were waived by the optionees in March 1994.
</TABLE>
9
<PAGE> 10
<TABLE>
ESTIMATED RETIREMENT BENEFITS
UNDER SUPPLEMENTAL EXECUTIVE RETIREMENT BENEFITS PLAN(1)
The following table shows estimated annual benefits payable on retirement
to certain selected executive officers under the Corporation's Supplemental
Executive Retirement Benefits Plan.
<CAPTION>
YEARS OF SERVICE(2)(3)
----------------------------------------------
REMUNERATION(4) 5 10 15 20
- - --------------- ------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 125,000 $14,063 $ 28,125 $ 42,188 $ 56,250
150,000 16,875 33,750 50,625 67,500
175,000 19,688 39,375 59,063 78,750
200,000 22,500 45,000 67,500 90,000
225,000 25,313 50,625 75,938 101,250
250,000 28,125 56,250 84,375 112,500
275,000 30,938 61,875 92,813 123,750
300,000 33,750 67,500 101,250 135,000
325,000 36,563 73,125 109,688 146,250
350,000 39,375 78,750 118,125 157,500
375,000 42,188 84,375 126,563 168,750
400,000 45,000 90,000 135,000 180,000
425,000 47,813 95,625 143,438 191,250
450,000 50,625 101,250 151,875 202,500
<FN>
- - ---------------
(1) Amounts shown in the table are computed on the basis of a straight life
annuity and are not subject to deduction of Social Security or other offset
amounts.
(2) Messrs. Robinson and Mohr have in excess of 20 years of service with the
Corporation and are, therefore, entitled to a full retirement benefit under
the plan. Mr. Dannemiller has in excess of five years of service with the
Corporation and Mr. Whitten has in excess of ten years of service. Mr.
Martins joined the Corporation in May 1992.
(3) Regardless of years of service and highest average salary, the plan provides
minimum annual benefits at age 65 to persons listed in the Summary
Compensation Table as follows: Mr. Dannemiller -- $70,000; Mr. Robinson --
$35,000; Mr. Whitten -- $25,000; and Mr. Mohr -- $50,000.
(4) Amounts in this column represent, and benefits are based on, highest average
salary for three consecutive years. The salaries for the Chief Executive
Officer and the four other most highly compensated executive officers for
the past three fiscal years are found in the Summary Compensation Table.
</TABLE>
10
<PAGE> 11
REPORT OF THE EXECUTIVE ORGANIZATION & COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
OVERVIEW
The Executive Organization & Compensation Committee ("Committee") is
comprised entirely of independent outside directors. The Committee is
responsible for setting the Corporation's executive officer compensation
policies. The purpose of the executive officer compensation program is to
attract and retain qualified executives and to provide appropriate incentives,
both monetary and stock-based, to achieve the Corporation's business strategies
and ultimately enhance shareholder value over the long term.
The major components of the Corporation's executive officer compensation
program applicable to the Chief Executive Officer and the other executive
officers, including those named in the Summary Compensation Table appearing on
page 8 hereof, are:
(a) Annual base salary; and,
(b) The 1990 Long-Term Performance Plan.
ELEMENTS OF COMPENSATION PROGRAM
(a) ANNUAL BASE SALARY
The Committee utilizes an annual competitive pay analysis compiled by an
independent nationally recognized compensation and benefits consulting firm (the
"Independent Consultant") which provides data on similar positions in
comparably-sized non-manufacturing companies. The analysis provides the
Committee with the market median base salary for each executive officer
position, together with the market median for incentive compensation and for
total cash compensation (both of which are discussed later in this report). The
competitive pay analysis is based on survey data from a broader range of
companies than those included in the published industry index shown in the stock
performance graph appearing on page 14 hereof; however, there is some overlap.
In addition to the competitive pay analysis, the Committee generally considers
time and level of experience in the position in setting the annual base salary.
As a general rule, annual base salaries have been set by the Committee below
market medians; however, the Committee would consider setting annual base
salaries at higher levels coincident with sustained corporate earnings
improvement. The Committee's overall executive compensation philosophy is to put
greater weight on the performance-driven portions of the compensation
package -- namely the awards under the Corporation's 1990 Long-Term Performance
Plan.
(b) 1990 LONG-TERM PERFORMANCE PLAN
(1) MANAGEMENT INCENTIVE PLAN
The annual Management Incentive Plan, as adopted for fiscal 1995 under the
Long-Term Performance Plan, is the Corporation's program for compensating
executive officers for the achievement of goals set for a particular fiscal
year. Under the Management Incentive Plan, each executive officer, including the
Chief Executive Officer and the other executive officers named in the Summary
Compensation Table, presents the Committee with individual goals for the fiscal
year. Corporate goals for the fiscal year are also presented to the Committee.
The Committee reviews and discusses the goals with the executive officers and
then sets the goals for the year. Both the individual and the corporate goals
are expressed in terms of threshold, target (midpoint) and maximum levels of
required performance.
In fiscal 1994, Messrs. Dannemiller and Robinson had the corporate goals as
their individual goals. The corporate goals for fiscal 1994 included objectives
based on the Corporation's pre-tax return on assets and improvement in pre-tax
income. The other executive officers, including Messrs. Whitten, Mohr and
Martins, had three to five individual goals (in addition to the corporate goals)
relating specifically to their job responsibilities. These goals may vary in
11
<PAGE> 12
relative weight. The size of the Management Incentive Plan payment for any of
the executive officers depends on the amount of performance achieved on both the
individual and the corporate goals. Although all or some of the individual goals
under the Plan were met in fiscal 1990, 1991 and 1992, corporate goals were not
met and, for that reason, no payments were made under the Plan in those years.
Because the corporate goals were met in fiscal 1993 and 1994, payments were made
pursuant to the 1993 and 1994 Management Incentive Plans as set forth in the
Summary Compensation Table.
Assuming that corporate and individual goals are met, the amount of the
individual award is based on a formula, the components of which are the market
median salary and a responsibility percentage assigned to the executive officer.
These are set by the Committee. Thus, the Chief Executive Officer target
incentive payment set by the Committee in fiscal 1994 was $248,050, being 55%
(the responsibility percentage) multiplied by the market median salary. The
annual base salary set by the Committee, plus the target incentive payment, has
generally been less than the total market median cash compensation. Thus, for
Mr. Dannemiller, the recommended total market median cash compensation was
$646,000 effective for the twelve-month period commencing November 1, 1993, the
date on which executive compensation changes are made each year. Mr.
Dannemiller's actual annual base salary for fiscal 1994 was $374,567, his target
incentive was $248,050, and total cash compensation assuming target performance
under the Management Incentive Plan was $622,617. If, however, performance for
corporate and individual goals equals or exceeds the maximum level set by the
Committee, the executive officers, including the Chief Executive Officer and the
named executive officers, can earn more than the market median for total cash
compensation. Thus, because maximum performance was achieved on his goals in
fiscal 1994, Mr. Dannemiller received total cash compensation of $754,338
($374,567 base salary, plus $379,771 under the Management Incentive Plan), as
compared with the total market median cash compensation of $646,000. A similar
philosophy applies to the other executive officers. Responsibility percentages
for the other executive officers during fiscal 1994, including those named in
the Summary Compensation Table, ranged from 25% to 45%.
In October 1993, the shareholders of the Corporation approved the adoption
of the Deferred Compensation Plan, which is described in detail on page 16
hereof. The Deferred Compensation Plan was adopted in part to encourage
increased investment in Corporation Common Stock by the Corporation's executive
officers. Of the eleven participants in the 1994 Management Incentive Plan,
eight elected under the Deferred Compensation Plan to defer a portion of their
Management Incentive Plan awards, with deferral percentages ranging from 20% to
100%. All but one of those persons elected to have their deferred awards
invested solely in the Corporation's Common Stock, with the remaining person
electing to invest one-half of his total award in Corporation Common Stock.
(2) STOCK-BASED AWARDS
Until fiscal 1993, the only types of stock-based awards under the 1990
Long-Term Performance Plan were stock options. In order to more closely align
the executive officers with the interests of the Corporation's shareholders and
to compensate the executive officers based on performance measures that directly
enhance shareholder value, the Committee chose in October 1992 to make awards of
Performance-Accelerated Restricted Stock ("PARS") under the Plan. At the time
the awards were made, the stock price was $17.88. The awards were intended to
replace ongoing stock option grants to executive officers, but would not affect
past stock option grants. The PARS were awards of restricted shares of
Corporation Common Stock to the executive officers, which shares would vest six
years from the date of grant; however, the PARS could vest automatically at an
earlier date if certain performance hurdles based on stock price and pre-tax
return on assets were met. No new stock option or PARS awards could be made to
the executive officers until 100% of the PARS had vested, either by meeting the
performance hurdles or by passage of the six-year term, and in no event could a
new award be made during the two-year period immediately following the date of
grant of the previous awards.
12
<PAGE> 13
In November 1993, fifty percent of the PARS awards vested on reaching a
stock price of $28.00 per share for ten consecutive trading days. The remaining
fifty percent vested in March 1994 on reaching a stock price of $34.00 per share
for ten consecutive trading days. The $28.00 stock price hurdle was more than
50% higher than the price on the date of grant in October 1992. The $34.00 stock
price hurdle exceeded the Corporation's then-highest historical stock price of
$32.88 per share. After vesting, a portion of the shares could be sold to pay
the resulting income taxes; the remainder of the shares were legended to prevent
resale for the two-year period following vesting, with limited resale authority
for an additional two years thereafter. This was required by the Committee to
promote continued ownership of the shares by the executive officers. The
Committee may consider granting additional stock-based long-term performance
awards, including PARS, in October 1994. The total amount of all stock-based
awards is limited by the annual limitation set forth in the Long-Term
Performance Plan of 2% of shares outstanding on the first day of the fiscal year
in which the award is made.
(c) BENEFITS
Benefits provided to the executive officers are those generally provided to
the Corporation's other associates with variations consistent with executive
benefits in the competitive marketplace.
FEDERAL INCOME TAX DEDUCTIBILITY
Section 162(m) of the Internal Revenue Code limits the amount of
compensation a publicly-held corporation may deduct as a business expense for
federal income tax purposes. That limit, which applies to the Chief Executive
Officer and the four other most highly compensated executive officers, is $1
million per individual per year, subject to certain exceptions. One of the
exceptions is for compensation that is performance-based.
The limit imposed by Section 162(m) is effective for fiscal 1995. The
Committee has already taken steps to qualify as performance-based, under
transitional rules included in proposed Internal Revenue Service regulations,
the awards made to certain executive officers under the annual Management
Incentive Plan. In the future, the Committee will continue to seek ways to
preserve the full deductibility of compensation paid to the Corporation's
executive officers without compromising the Committee's flexibility in designing
an effective compensation program.
EXECUTIVE ORGANIZATION &
COMPENSATION COMMITTEE
William E. Butler
William G. Bares
Russel B. Every
L. Thomas Hiltz
13
<PAGE> 14
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
OF BEARINGS, INC., S&P 500 INDEX AND PEER INDUSTRY GROUP
The graph set forth below compares the five-year cumulative total return
from investing $100 on June 30, 1989 in each of the Corporation's Common Stock,
the Standard and Poor's 500 Index and the Value Line Machinery Industry Index,
assuming dividend reinvestment.
<TABLE>
<CAPTION>
Measurement Period Bearings, Machinery
(Fiscal Year Covered) Inc. S&P 500 Industry
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 85.81 116.32 106.98
1991 91.37 124.93 108.87
1992 72.15 141.75 119.60
1993 90.77 161.03 142.12
1994 137.10 163.18 160.92
</TABLE>
In the fourth quarter of fiscal 1992, the Corporation announced a
restructuring plan. During fiscal 1993 and 1994, the Corporation's Common Stock
outperformed the S&P 500 and the Value Line Machinery Industry Index, having a
cumulative total shareholder return of 90.0%, compared to 15.1% for the S&P 500
and 34.6% for the Value Line Machinery Industry Index.
COMPENSATION OF DIRECTORS
Corporate officers do not receive any additional compensation for service
as a director. Non-employee directors receive a quarterly retainer of $3,500, a
fee of $1,500 for the first directors' meeting or committee meeting attended on
a given day, and $500 for each additional meeting attended on the same day, up
to a maximum of $2,500 per day. The directors may be similarly compensated if
they attend other meetings or conferences at the request of the Chairman or
President. In addition, the directors receive $500 for any action taken by
unanimous written consent or via telephone conference of less than 30 minutes in
duration. All non-employee directors are eligible to participate in the Deferred
Compensation Plan for Non-employee Directors described below. Participants in
the plan may elect to receive their director compensation in the form of Common
Stock of the Corporation, in which case they receive an additional amount equal
to 25% of the director compensation deferred. The amount of compensation
received by non-employee directors is reviewed from time to time by the
Corporation's management. If management believes that a change in the amount of
non-employee director compensation is required to make the level of such
compensation competitive relative to the size and nature of the Corporation's
business, management recommends the change to the Board of Directors and
approval of any such change requires the affirmative vote of a majority of the
14
<PAGE> 15
directors then serving in office. The directors participate in the Corporation's
travel accident plan and may participate in the Corporation's contributory
health insurance plan.
DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
In 1991, the shareholders of the Corporation approved the Bearings, Inc.
Deferred Compensation Plan for Non-employee Directors (the "Plan"). The purpose
of the Plan is to allow non-employee directors to defer receipt of the
compensation payable for services as a director and to help build loyalty to the
Corporation through increased investment in the Corporation's Common Stock.
In 1993, the Plan was amended to permit a non-employee director to elect,
prior to any calendar quarter, to defer payment of the compensation for future
services as a director. Once an election is made, it is irrevocable with respect
to compensation earned. Directors may change their election to receive or defer
receipt of compensation for future services commencing with the calendar quarter
following the election. Amendments that serve only to change a director's
beneficiary are permitted at any time and as often as necessary.
As directors' compensation would otherwise become due and payable, the
Corporation will transfer an amount equal to the compensation deferred pursuant
to the Plan to a trust maintained by Society National Bank, as Trustee. Deferred
fees will be invested by the Trustee, at a director's option, in either a money
market fund or Common Stock of the Corporation. If a director elects to have his
compensation invested in Common Stock of the Corporation, then the Corporation
will contribute to the trust an additional amount equal to 25% of the amount so
deferred.
The Plan is administered by a committee consisting of not less than three
members, not necessarily members of the Board of Directors, which is authorized
to interpret and administer the Plan, but has no discretion with respect to Plan
contributions, investment direction or distributions.
Distribution of a director's account commences as designated by the
director in his election on a date that is not more than thirty days after (i)
the director's termination as a director due to resignation, retirement, death
or otherwise, or (ii) the director's attainment of the age (not younger than age
55) specified in his deferral election form; or upon a Change of Control (as
defined in the Plan) of the Corporation.
There are presently eight non-employee directors of the Corporation. Of
those non-employee directors, Messrs. Bares, Every, Gifford, Hiltz, Kahl and
LaMore have elected to defer all of their retainer and meeting fees and to
invest all such fees in Common Stock of the Corporation.
G. L. LAMORE CONSULTING AGREEMENT
Mr. LaMore retired in January 1992 as Chairman & Chief Executive Officer
after nearly 50 years of service with the Corporation. During that period, Mr.
LaMore developed invaluable relationships with significant customers and
suppliers of the Corporation. The Corporation entered into a consulting
agreement with Mr. LaMore effective on the date of his retirement for a term of
three years to provide advice and assistance to the Corporation in connection
with the maintenance, development and strengthening of relationships with
significant suppliers and customers, as well as to advise the Corporation with
respect to the industrial distribution business. In consideration for those
services, the Corporation agreed to pay Mr. LaMore a lump sum of $75,000 per
annum, with payments having been made in January of 1992, 1993 and 1994.
15
<PAGE> 16
DEFERRED COMPENSATION PLAN
In 1993, the shareholders of the Corporation approved the Bearings, Inc.
Deferred Compensation Plan (the "Plan") effective as of fiscal 1994. The purpose
of the Plan is to allow participants in a Bearings, Inc. Management Incentive
Plan to defer a portion or all of the awards payable under a Management
Incentive Plan and to help increase loyalty and efforts on behalf of the
Corporation through increased investment in the Corporation's Common Stock.
The Plan gives each participant in a Management Incentive Plan the
opportunity to elect to defer payment of his or her cash award from the
Management Incentive Plan. Any participant who elects to make such a deferral
may have such amounts invested in the Corporation's Common Stock and/or in a
money market fund. In the event a participant elects to have an amount equal to
at least 50% of a Management Incentive Plan award invested in the Corporation's
Common Stock, an additional ten percent of that amount will be credited to that
participant under the Plan. Such deferral and investment opportunities and such
incentive for investment in the Corporation's Common Stock are similar to the
opportunities and incentives available to non-employee directors under the
Bearings, Inc. Deferred Compensation Plan for Non-employee Directors and are
part of the Corporation's overall effort to align management with the interests
of the Corporation's shareholders.
The Plan is administered by the Executive Organization & Compensation
Committee of the Board of Directors, which is authorized to interpret and
administer the Plan, but has no discretion with respect to participant-elected
deferrals or investments under the Plan.
Distribution of a participant's deferrals under the Plan will be made in a
lump sum or in installments over a period not in excess of ten years, as
specified in the participant's deferral election form. Other than dates
specified in the deferral election forms, a withdrawal is permitted while
employed only due to a severe financial and unexpected hardship.
Eleven persons participated in the 1994 Management Incentive Plan and were
eligible to participate in the Plan. Of those eligible persons, eight elected to
participate in the Plan, including Messrs. Dannemiller, Robinson, Mohr and
Martins.
SEVERANCE PAYMENT AGREEMENTS
The Corporation has severance payment agreements (the "Agreements") with
Messrs. Dannemiller, Robinson, Whitten, Mohr and Martins. Additional agreements
have been entered into between the Corporation and two other executive officers.
The Agreements obligate the Corporation to provide certain severance benefits,
described below, to any of those officers whose employment is terminated for any
reason other than death if such termination of employment occurs within two
years (three years for Messrs. Dannemiller and Robinson) after a change in
control, as defined in the Agreements. The principal benefits to be provided to
the named officers under the Agreements are (a) a lump sum severance payment
equal to three times annual base salary (at the highest rate in effect since the
change in control) for Messrs. Dannemiller and Robinson, two times for Messrs.
Martins and Mohr and one and one-half times for Mr. Whitten, reduced
proportionately if the officer would reach age 65 within the respective three,
two and one and one-half year periods after the termination; (b) a cash payment,
in lieu of exercising any stock options held by the officer on the date of
termination, equal to the difference between the exercise price thereunder, and
the higher of the mean of the high and low trading prices on the New York Stock
Exchange on the date of termination, or the highest price paid for the
Corporation's Common Stock in connection with the change in control; and (c)
continued participation in the Corporation's employee benefit plans, or
equivalent benefits for two years (three years for Messrs. Dannemiller and
Robinson) after the termination at the levels in effect immediately prior to
termination. The terms of the two additional Agreements are essentially the same
as for the named officers, except each of the additional Agreements
16
<PAGE> 17
provides for a lump sum severance payment equal to one and one-half times the
officer's annual base salary. With respect to those executive officers who are
not fully vested in the Corporation's employee benefit plans (including Messrs.
Dannemiller and Martins), the Agreements also provide for a lump sum payment
equal to the value of any non-vested benefits that are forfeited. Presently
those plans include the Corporation's Employees' Profit-Sharing Trust and
Section 401(k) Savings Plan. Under the terms of the Agreements, escrow funds
have been established with Society National Bank to secure payment of the
benefits. The Corporation has deposited in the escrow funds a percentage of the
amounts which would be payable to each of the officers under the Agreements.
Additional deposits may be made in future years. No officer has any right to
make a claim on the escrow funds unless the Corporation is in default of its
obligations under the Agreements. All earnings on the escrow funds are payable
to the Corporation. The Agreements also provide that in the event any covered
executive is required to pay the excise tax imposed by Section 4999 of the
Internal Revenue Code, the Corporation shall make an additional payment to such
executive in an amount sufficient (after payment of any taxes on the additional
payment) to pay the excise tax.
The purpose of the Agreements is to reinforce and encourage the continued
attention and dedication of these officers to their assigned duties without
distraction in the face of the potentially disturbing circumstances arising from
the possibility of a change in control of the Corporation. The Agreements may
make it more expensive to accomplish a change in control of the Corporation and
could under certain circumstances adversely affect the ability of shareholders
of the Corporation to benefit from a change in control of the Corporation.
However, the Board of Directors approved the Agreements because it believes that
the continued attention and dedication of the officers to their duties under
adverse circumstances is ultimately in the best interests of the Corporation and
its shareholders, and can under some circumstances result in a higher price
being paid to the shareholders in connection with a change in control.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended June 30, 1994, the Board of Directors had
seven meetings, four of which were regularly scheduled quarterly meetings. With
the exception of Dr. Jerry Sue Thornton, who was unable to attend one of the two
meetings of the Board of Directors held since her election to the Board in
January 1994, each of the directors attended at least 75% of the aggregate total
number of meetings of the Board of Directors and all committees of the Board on
which he served.
The Board of Directors has established an Audit Committee, an Executive
Organization & Compensation Committee and a Director Search Committee.
The Audit Committee, consisting of Russel B. Every, Russell R. Gifford and
John J. Kahl, recommends the appointment of independent auditors, reviews with
the independent auditors the scope of the examination to be made, reviews the
scope of non-audit services performed by the independent auditors and considers
the effect of such non-audit services upon the independence of the independent
auditors, reviews with management and the independent auditors the results of
the audit after the audit has been completed, reviews with management the
adequacy of the Corporation's internal accounting controls and reviews with
management and the independent auditors the auditors' letter report on internal
accounting control and other recommendations. The Audit Committee met three
times during the fiscal year ended June 30, 1994.
The Executive Organization & Compensation Committee reviews and makes
recommendations to the Board of Directors regarding both compensation of
executives and planning for executive organization and succession. The committee
also administers the 1990 Long-Term Performance Plan, including the Management
Incentive Plan. William E. Butler, William G. Bares, Russel B. Every and L.
Thomas Hiltz, all being non-employee directors of the Corporation,
17
<PAGE> 18
serve as members of the committee. The Executive Organization & Compensation
Committee met five times during the fiscal year ended June 30, 1994.
The Director Search Committee considers and reviews possible nominees for
the Board to fill vacancies which arise from time to time and makes appropriate
recommendations to the Board. The members of the committee are William G. Bares,
William E. Butler, John C. Dannemiller, L. Thomas Hiltz and John J. Kahl. There
are no procedures established for submissions by shareholders; the committee
would, however, consider a qualified nominee submitted by shareholders. The
Director Search Committee met informally one time during the fiscal year ended
June 30, 1994.
RATIFICATION OF AUDITORS
The firm of Deloitte & Touche LLP, certified public accountants, has been
the independent auditor of the Corporation since 1966 and has been appointed by
management, subject to ratification by the shareholders, to serve the
Corporation as independent auditor for the fiscal year ending June 30, 1995. The
Corporation has been advised by Deloitte & Touche LLP that no partner of the
firm has had any direct financial interest or any material indirect financial
interest in the Corporation or its subsidiaries or any connection during the
past three years with the Corporation or any of its subsidiaries in the capacity
of promoter, underwriter, voting trustee, director, officer or employee.
Unless otherwise indicated, the accompanying proxy will be voted in favor
of the ratification of the appointment of Deloitte & Touche LLP. The vote of a
majority of the shares represented at the meeting is sufficient to constitute
ratification. In the event that Deloitte & Touche LLP should withdraw or
otherwise become unavailable for reasons not presently known, the persons named
as proxies will vote for such other independent auditors as they may deem
appropriate.
A representative of Deloitte & Touche LLP is expected to be present at the
meeting. He will be given the opportunity to make a statement if he so desires,
and will be available to respond to appropriate questions.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's executive officers and directors, and persons who beneficially own
more than ten percent of the Corporation's Common Stock, to file initial reports
of ownership and reports of changes in ownership with the Securities and
Exchange Commission and the New York Stock Exchange. Executive officers,
directors and greater than ten percent beneficial owners are required by SEC
regulations to furnish the Corporation with copies of all Section 16(a) forms
they file.
Based solely on a review of the copies of such forms furnished to the
Corporation and written representations from the Corporation's executive
officers and directors, the Corporation believes that during fiscal 1994 all
Section 16(a) filing requirements applicable to its executive officers,
directors and greater than ten percent beneficial owners were complied with,
except that 500 stock options were inadvertently omitted from Richard C. Shaw's
Form 3 (Initial Statement of Beneficial Ownership of Securities) filed in July
1993. The Corporation prepares Forms 3, 4 and 5 for all officers and directors.
When the error was discovered, an amended Form 3 was filed including Mr. Shaw's
stock option holdings.
SHAREHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Proposals by shareholders for inclusion in the 1995 Annual Meeting Proxy
Statement must be received by the Corporation's Secretary at its executive
offices, 3600 Euclid Avenue,
18
<PAGE> 19
Cleveland, Ohio 44115, no later than May 19, 1995. All such proposals are
subject to the applicable rules and requirements of the Securities and Exchange
Commission.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the
meeting other than those set forth in Items 1 and 2 of the attached Notice of
Annual Meeting of Shareholders, but should any other matters requiring a vote of
shareholders arise, including the question of adjourning the meeting, the
persons named in the accompanying proxy will vote thereon according to their
best judgment in the interest of the Corporation.
By order of the Board of Directors.
ROBERT C. STINSON
Vice President - General Counsel
& Secretary
Dated: September 16, 1994
19
<PAGE> 20
BEARINGS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R The undersigned hereby appoints J. C. Dannemiller, J. R. Whitten
O and R. C. Stinson and each of them, as Proxies, with full power of
X substitution, to attend the Annual Meeting of Shareholders of
Y Bearings, Inc., an Ohio corporation, on October 18, 1994, and any
adjournments, and to represent and vote the shares which the
undersigned is entitled to vote thereat on the following matters as
directed on the reverse side:
<TABLE>
<S> <C>
(The Board of Directors recommends a vote FOR Items 1 and 2.)
1. Election of Directors of Class I (for a term of 3 years) (change of address)
The nominees are: ____________________________________________
John C. Dannemiller, John C. Robinson and ____________________________________________
Dr. Jerry Sue Thornton ____________________________________________
2. Ratification of the appointment of Deloitte & Touche LLP ____________________________________________
as independent auditors for the current fiscal year. (If you have written in the above space, please
3. In their discretion, the Proxies are authorized to vote mark the corresponding box on the reverse side
on such other business as may properly come before the of this card.)
meeting.
</TABLE>
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER
DIRECTED ON THE REVERSE SIDE OF THIS CARD; IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
SEE REVERSE
SIDE
<PAGE> 21
<TABLE>
<S> <C> <C> <C> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
FOR WITHHOLD
ALL VOTE FOR ALL
NOMINEES NOMINEES FOR AGAINST ABSTAIN
1. Election of / / / / 2. Ratification of the / / / / / / PLEASE SIGN, DATE AND
Directors appointment of RETURN THIS PROXY CARD
of Class I Deloitte & Touche PROMPTLY USING THE
(see reverse) LLP as independent ENCLOSED ENVELOPE.
auditors for the
current fiscal year.
For, except vote withheld from the following nominee(s):
________________________________________________________
Change
of / /
Address
SIGNATURE(S) _______________________________ DATE _________, 1994
SIGNATURE(S) _______________________________ DATE _________, 1994
NOTE: Please sign exactly as your name appears above. If the
signature is by a representative such as an attorney,
executor, administrator, trustee, corporate officer, partner
or joint owner, that person should also sign indicating the
title or other capacity in which the person is signing.
</TABLE>
<PAGE> 22
CONFIDENTIAL VOTING INSTRUCTIONS
TO: SOCIETY NATIONAL BANK, TRUSTEE (THE "TRUSTEE") FOR BEARINGS,
INC. SECTION 401(K) SAVINGS PLAN (THE "PLAN").
I, the undersigned, as a Participant in the Plan hereby instruct
the Trustee to vote (in person or by proxy), all shares of Common
Stock of Bearings, Inc. (the "Corporation") allocated to my account
under the Plan on the record date for the Annual Meeting of
Shareholders of the Corporation to be held on October 18, 1994.
(The Board of Directors recommends a vote FOR Items 1 and 2.)
<TABLE>
<S> <C>
1. Election of Directors of Class I (for a term of 3 years) (change of address)
The nominees are: _________________________________
John C. Dannemiller, John C. Robinson and _________________________________
Dr. Jerry Sue Thornton _________________________________
2. Ratification of the appointment of Deloitte & Touche LLP _________________________________
as independent auditors for the current fiscal year. (If you have written in the above
3. In its discretion, the Trustee is authorized to vote on space, please mark the
such other business as may properly come before the corresponding box on the reverse
meeting. side of this card.)
</TABLE>
WHEN PROPERLY EXECUTED, THESE INSTRUCTIONS WILL BE VOTED IN THE
MANNER DIRECTED ON THE REVERSE SIDE OF THIS CARD; IF NO DIRECTION IS
MADE, THIS CARD WILL BE VOTED FOR ITEMS 1 AND 2.
SEE REVERSE
SIDE
<PAGE> 23
<TABLE>
<S> <C> <C> <C> <C> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
FOR WITHHOLD
ALL VOTE FOR ALL
NOMINEES NOMINEES FOR AGAINST ABSTAIN
1. Election of / / / / 2. Ratification of the / / / / / /
Directors appointment of
of Class I Deloitte & Touche
(see reverse) LLP as indepen-
dent auditors for
the current fiscal
For, except vote withheld year.
from the following
nominee(s):
_______________________________________________
Change
of / /
Address
PLEASE MARK, SIGN, DATE AND
RETURN THESE INSTRUCTIONS
PROMPTLY USING THE ENCLOSED
ENVELOPE.
SIGNATURE(S) ___________________________ DATE ___________________ , 1994
NOTE: Please sign exactly as name appears hereon.
</TABLE>
