<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
[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 and
Education Center, One Cleveland Center, 1375 E. 9th Street, Cleveland, Ohio, on
Tuesday, October 17, 1995, at 1:30 p.m., local time, for the purpose of
considering and acting on the following:
1. Election of three (3) persons to be directors of Class II 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, 1996.
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, 1995 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
meeting.
By order of the Board of Directors.
ROBERT C. STINSON
Secretary
September 15, 1995
***************************************************************************
* *
* 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
[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., local time, on Tuesday, October 17, 1995,
at The Forum Conference and 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 15, 1995. 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 Secretary of 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, 1995
will be entitled to vote at the meeting. As of the record date there were
outstanding 7,830,765 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 II are to be elected for a term of three years
expiring in 1998. 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 III for a
term expiring in 1996 and as directors of Class I for a term expiring in 1997
will continue in office.
The nominees for directors of Class II are William G. Bares, Russel B.
Every and John J. Kahl. Each of the nominees presently serves as a director of
the Corporation and was elected to his position at an annual meeting of the
shareholders of the Corporation. George L. LaMore, a director since 1983, is
retiring and will not be standing for reelection. 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. 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
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.
<TABLE>
<CAPTION>
NAME AND YEAR INFORMATION ABOUT
FIRST ELECTED NOMINEES AND
A DIRECTOR DIRECTORS
------------- -----------------
<S> <C>
NOMINEES FOR ELECTION AS DIRECTORS OF CLASS II FOR A TERM EXPIRING IN 1998
William G. Bares(b)(c)(e) Mr. Bares is President, Chief Operating Officer and a director of
1986 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 54 years of age and serves
as a director of Oglebay Norton Company and KeyCorp.
Russel B. Every(c)(d) Mr. Every has been a business consultant since his retirement as
1986 Chairman of The Lamson & Sessions Co. in 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. He served as a
director of The Lamson & Sessions Co. from 1979 to April 1995. 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 70 years of age.
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 54 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) of Eaton Corporation, a
1987 global manufacturer of highly engineered products which serve vehi-
cle, industrial, construction, commercial, aerospace and marine
markets. Principal products include truck transmissions and axles,
engine components, hydraulic products, electrical power
distribution and control equipment, ion implanters and a wide
variety of controls. He was Chief Executive Officer (from September
1991 to September 1995), President (from 1989 to January 1992) and
Chief Operating Officer (from 1989 to September 1991), and has
served as a director of that company since 1989. He is 64 years of
age and also serves as a director of Ferro Corporation, The
Goodyear Tire & Rubber Co., 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 49 years of age.
</TABLE>
4
<PAGE> 5
<TABLE>
<CAPTION>
NAME AND YEAR INFORMATION ABOUT
FIRST ELECTED NOMINEES AND
A DIRECTOR DIRECTORS
------------- -----------------
<S> <C>
Russell R. Gifford(d)(e) Mr. Gifford is President (since September 1994) of CNG Energy
1992 Services Corp., a subsidiary of Consolidated Natural Gas Company.
CNG Energy Services Corp. is an unregulated energy services market-
ing company. He was President and Chief Executive Officer (from
1989 to September 1994) of The East Ohio Gas Company, the largest
distribution subsidiary of Consolidated Natural Gas Company. Mr.
Gifford is 56 years of age and serves as a trustee of First Union
Real Estate Equity and Mortgage Investments.
PERSONS SERVING 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 is 57 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 1989 to January 1992) and Executive Vice President and
General Manager of the Corporation's wholly-owned subsidiary, King
Bearing, Inc. (from 1990 to October 1991). He is 53 years of age.
Dr. Jerry Sue Thornton(d)(e) 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 48 years of age.
<FN>
---------------
(a) Member of the Executive Committee.
(b) Member of the Director Nominating 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
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, 1995.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
------------------- ----------------------- --------
<S> <C> <C>
Norwest Corporation 888,900(2) 11.4%
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479
The Prudential Insurance Company 621,100(3) 8.0%
of America
Three Gateway Center
Newark, New Jersey 07102-4077
The Capital Group Companies, Inc. 620,300(4) 8.0%
333 South Hope Street
Los Angeles, California 90071
Trimark Investment Management, Inc. 551,800(5) 7.1%
One First Canadian Place
Suite 5600
P.O. Box 487
Toronto, Ontario M5X 1E5
<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 4, 1995, Norwest Corporation has confirmed that at
June 30, 1995 it had sole voting power for 821,400 shares, shared voting
power for 0 shares, sole dispositive power for 887,550 shares, and shared
dispositive power for 1,350 shares. The foregoing shares are held in a
fiduciary or representative capacity, and Norwest Corporation disclaims
beneficial ownership of these shares.
(3) By letter dated August 22, 1995, The Prudential Insurance Company of America
has confirmed that at June 30, 1995 it had sole voting and dispositive power
for 421,450 shares, and shared voting and dispositive power for 199,650
shares.
(4) The Capital Group Companies, Inc. filed a Schedule 13G dated February 10,
1995 indicating it has sole voting power for 320,000 shares, sole
dispositive power for 620,300 shares, and shared voting and dispositive
power for 0 shares.
(5) By letter dated August 8, 1995, Trimark Investment Management, Inc. has
confirmed that at June 30, 1995 it had sole voting and dispositive power for
551,800 shares, and shared voting and dispositive power for 0 shares.
</TABLE>
6
<PAGE> 7
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the beneficial ownership of the Common Stock of
the Corporation, as of June 30, 1995, 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.
<TABLE>
<CAPTION>
COMMON SHARES
BENEFICIALLY OWNED
ON PERCENT OF
NAME OF INDIVIDUAL JUNE 30, 1995(1) CLASS(2)
------------------ ------------------ ----------
<S> <C> <C>
William G. Bares................................. 7,136(3)
William E. Butler................................ 900
John C. Dannemiller.............................. 116,230(4) 1.5%
Russel B. Every.................................. 7,261
Russell R. Gifford............................... 2,060
L. Thomas Hiltz.................................. 378,418(5) 4.9%
John J. Kahl..................................... 7,875
George L. LaMore................................. 19,306
Francis A. Martins............................... 15,668(6)
John C. Robinson................................. 59,584(4)
Robert C. Stinson................................ 30,049(4)
Dr. Jerry Sue Thornton........................... 0
John R. Whitten.................................. 30,315(4)
All present directors and executive officers
as a group (15 individuals).................... 694,562(7) 8.8%
<FN>
---------------
(1) Determined in accordance with Rule 13d-3 under the Securities Exchange Act
of 1934. Individuals may disclaim beneficial ownership for other purposes.
Except as otherwise indicated, the director or executive officer has sole
voting and dispositive power over the number of shares indicated.
(2) Percent of class is not indicated if less than 1%.
(3) Includes 1,000 shares owned by Mr. Bares' spouse, who has sole voting and
dispositive power.
(4) Includes shares that could be acquired within 60 days after June 30, 1995,
pursuant to exercise of stock options as follows: Mr. Dannemiller -- 46,925;
Mr. Robinson -- 22,726; Mr. Stinson -- 13,742; and Mr. Whitten -- 13,592.
(5) 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.
(6) Includes 150 shares owned by Mr. Martins' son, who has sole voting and
dispositive power.
(7) Includes 97,360 shares that could be acquired within 60 days after June 30,
1995, pursuant to the exercise of stock options. In determining the
percentage of share ownership, the 97,360 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
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table summarizes compensation earned during the fiscal years
ended June 30, 1995, 1994 and 1993, by those persons who were, during the fiscal
year ended June 30, 1995, the Chief Executive Officer and the four other most
highly compensated executive officers of the Corporation.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------
ANNUAL AWARDS
COMPENSATION --------------------------
--------------------- RESTRICTED NUMBER ALL OTHER
NAME AND BONUS STOCK AWARD(S) OF COMPENSATION
PRINCIPAL POSITION YEAR SALARY (1) (2) OPTIONS (3)
------------------ ----- -------- -------- -------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
John C. Dannemiller 1995 $411,117 $451,153 $952,500 0 $ 42,142
Chairman & Chief 1994 374,567 379,771 0 0 36,394
Executive Officer 1993 346,333 302,743 715,000 0 4,333
John C. Robinson 1995 283,333 241,027 476,250 0 21,625
President & Chief 1994 258,333 224,602 0 0 26,163
Operating Officer 1993 230,000 189,014 393,250 0 4,345
Robert C. Stinson 1995 165,000 132,874 238,125 0 12,163
Vice President -- 1994 151,333 82,802 0 0 11,691
Administration, 1993 140,000 80,876 178,750 0 2,818
Human Resources,
General Counsel &
Secretary
John R. Whitten 1995 175,667 117,429 238,125 0 11,353
Vice President -- 1994 165,000 124,932 0 0 7,486
Finance & Treasurer 1993 148,333 86,702 178,750 0 3,615
Francis A. Martins 1995 158,000 114,704 238,125 0 14,085
Vice President -- 1994 146,667 96,439 0 0 12,185
Sales & Marketing 1993 140,000 69,836 178,750 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 10 and 11. Pursuant to the Deferred
Compensation Plan, described on page 15 hereof, the following named
executive officers deferred, and had invested in Corporation Common Stock in
August 1995, the corresponding percentages of their earnings under the 1995
Management Incentive Plan: Mr. Dannemiller, 80%; Mr. Robinson, 64%; Mr.
Stinson, 50%; Mr. Whitten, 50%; and Mr. Martins, 60%.
(2) Amounts reported in this column represent Performance-Accelerated Restricted
Stock awards ("PARS") under the 1990 Long-Term Performance Plan described in
the Executive Organization & Compensation Committee Report on pages 11 and
12, valued at the closing market price of the Common Stock of the
Corporation on the dates of grant. Dividends are paid on PARS at the same
rate paid to all shareholders. All of the PARS granted in fiscal 1993 vested
during fiscal 1994. At June 30, 1995, the persons listed above held the
following number of unvested PARS, valued at the closing market price of the
Common Stock of the Corporation on that date: Mr. Dannemiller, 30,000
shares, $918,750; Mr. Robinson, 15,000 shares, $459,375; Mr. Stinson, 7,500
shares, $229,688; Mr. Whitten, 7,500 shares, $229,688; and Mr. Martins,
7,500 shares, $229,688.
(3) Amounts reported in this column for fiscal 1995 include the following:
(a) The values 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 401(k)
Savings Plan and Trust as follows: Mr. Dannemiller, $3,947; Mr.
Robinson, $4,156; Mr. Stinson, $3,416; Mr. Whitten, $3,379; and Mr.
Martins, $5,100.
(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: Mr. Dannemiller,
$2,103; Mr. Robinson, $2,103; Mr. Stinson, $2,103; Mr. Whitten, $2,103;
and Mr. Martins, $2,103. These amounts 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 additional
Corporation Common Stock equal to 10% of the amount of earnings
deferred into Corporation Common Stock. The values of the additional
shares credited to the accounts of named executive officers under the
Deferred Compensation Plan are as follows: Mr. Dannemiller, $36,092;
Mr. Robinson, $15,366; Mr. Stinson, $6,644; Mr. Whitten, $5,871; and
Mr. Martins, $6,882.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth information concerning stock option
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, 1995, and the values of in-the-money options held by those individuals on
June 30, 1995.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
SECURITIES UNDERLYING UNEXERCISED THE-MONEY OPTIONS AT FISCAL
UNDERLYING OPTIONS AT FISCAL YEAR END YEAR END
OPTIONS ----------------------------- -----------------------------
NAME EXERCISED VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ---------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John C. Dannemiller.... 20,000 $ 36,250 46,925 7,775 $ 622,633 $78,236
John C. Robinson....... 5,000 9,063 22,726 5,000 277,934 50,313
Robert C. Stinson...... 5,000 9,063 13,742 1,975 188,112 19,873
John R. Whitten........ 7,000 12,688 13,592 1,925 186,603 19,370
Francis A. Martins..... 0 0 0 0 0 0
</TABLE>
ESTIMATED RETIREMENT BENEFITS
UNDER SUPPLEMENTAL EXECUTIVE RETIREMENT BENEFITS PLAN(1)
The following table shows estimated annual benefits payable at retirement
to certain selected executive officers under the Corporation's Supplemental
Executive Retirement Benefits Plan.
<TABLE>
<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
350,000 39,375 78,750 118,125 157,500
400,000 45,000 90,000 135,000 180,000
450,000 50,625 101,250 151,875 202,500
500,000 56,250 112,500 168,750 225,000
550,000 61,876 123,750 185,626 247,500
<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) Mr. Robinson has in excess of 20 years of service with the Corporation and
is, therefore, entitled to a full retirement benefit under the plan. Messrs.
Dannemiller and Stinson have 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. Stinson -- $25,000; and Mr. Whitten -- $25,000.
(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>
9
<PAGE> 10
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 13 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, adopted 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 1995, Messrs. Dannemiller and Robinson had the corporate goals as
their individual goals. The corporate goals for fiscal 1995 included objectives
based on the Corporation's pre-tax return on assets, improvement in pre-tax
income, and sales, distribution and administrative expenses as a percentage of
net sales. These goals were equally weighted. The other executive officers,
including Messrs. Stinson, Whitten and Martins, had individual goals (in
addition to the
10
<PAGE> 11
corporate goals) relating specifically to their job responsibilities. These
goals may vary in 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,
1994, and 1995, payments were made pursuant to the 1993, 1994 and 1995
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 1995 was $292,000, being 60%
(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
$704,000 effective for the twelve-month period commencing November 1, 1994, the
date on which executive compensation changes are made each year. Mr.
Dannemiller's actual annual base salary for fiscal 1995 was $411,117, his target
incentive was $292,000, and total cash compensation assuming target performance
under the Management Incentive Plan was $703,117. 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 1995, Mr. Dannemiller received total cash compensation of $862,270
($411,117 base salary, plus $451,153 under the Management Incentive Plan), as
compared with the total market median cash compensation of $704,000. A similar
philosophy applies to the other executive officers. Responsibility percentages
for the other executive officers during fiscal 1995, including those named in
the Summary Compensation Table, ranged from 30% 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 15
hereof. The Deferred Compensation Plan was adopted in part to encourage
increased investment in Corporation Common Stock by the Corporation's executive
officers. All of the participants in the 1995 Management Incentive Plan (except
for one executive officer who retired mid-year) elected under the Deferred
Compensation Plan to defer a portion of their Management Incentive Plan awards,
with deferral percentages ranging from 20% to 85%. 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 more than 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, 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
11
<PAGE> 12
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.
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. After vesting, a portion of the shares could
be sold to pay the resulting income taxes; the remaining shares were legended to
prevent resale for the two-year period following vesting, with limited resale
authority for an additional two years thereafter. The Committee approved these
restrictions to promote continued ownership of the shares by the executive
officers. These restrictions on transfer were, however, modified in October 1994
to permit the tender of a limited number of shares to the Corporation in payment
of the exercise price of previously-granted stock options.
In October 1994, new PARS awards were made to the executive officers. Once
again, the shares vest six years from the date of grant, although the shares may
vest at an earlier date if certain performance hurdles are met. Fifty percent of
the PARS vest on reaching either a pre-tax return on assets ("ROA") of 10%, or a
stock price of $46.00 per share for ten consecutive trading days. The remaining
fifty percent vest on reaching either a ROA of 12%, or a stock price of $54.00
per share for ten consecutive trading days. The two ROA figures equate to the
Corporation's two best performance years with respect to ROA (fiscal 1988 and
1989). The $46.00 stock price was almost 50% higher than the closing price on
the date of grant, $31.13. According to the Independent Consultant's survey of
other companies utilizing stock-based long-term performance awards, if the PARS
vest within the first two years, the awards would represent the 85th percentile
of competitive compensation. If, however, the performance hurdles are not met
and the PARS vest after the full six years, the compensation on a competitive
basis would be in the 20th percentile.
No new stock options or PARS awards can be made to the executive officers
until 100% of the PARS vest, either by meeting the performance hurdles or by
passage of the six-year term, and in no event can a new award be made during the
two-year period immediately following the date of grant of the previous awards.
An exception was made in October 1994 with respect to the aforementioned
two-year limitation for two executive officers. These individuals were granted
PARS awards within the previous two years upon assuming their current positions
of responsibility. The two-year limitation on the grant of additional awards was
waived to permit the grant of new PARS awards to these individuals in October
1994 and to put all of the executive officers on the same award cycle.
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 awards are 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 Committee has taken steps so that the awards made to certain executive
officers under the Long-Term Performance Plan will qualify as performance-based
under proposed Internal
12
<PAGE> 13
Revenue Service regulations. 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
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, 1990 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>
1990 100.00 100.00 100.00
1991 106.36 107.39 102.65
1992 84.08 121.71 112.57
1993 105.78 138.67 133.73
1994 159.78 140.59 150.71
1995 157.72 177.19 174.86
<FN>
Source: Value Line Institutional Services
</TABLE>
13
<PAGE> 14
COMPENSATION OF DIRECTORS
Corporate officers do not receive any additional compensation for service
as a director. Non-employee directors receive a quarterly retainer of $4,500, 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, and directors who serve as chairmen of committees receive a quarterly
retainer of $400. 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 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 Key Trust Company of Ohio, N.A., as
Trustee. Deferred fees will be invested by the Trustee, at a director's option,
in a money market fund and/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.
14
<PAGE> 15
There are presently eight non-employee directors of the Corporation. Of
those non-employee directors, Messrs. Bares, Every, Hiltz, Kahl and LaMore
presently defer all of their retainer and meeting fees and invest such fees in
Common Stock of the Corporation.
DEFERRED COMPENSATION PLAN
In 1993, the shareholders of the Corporation approved the Bearings, Inc.
Deferred Compensation Plan (the "Plan") effective beginning in fiscal 1994. The
purpose of the Plan is to allow participants in an annual Management Incentive
Plan to defer a portion or all of the awards payable under the Management
Incentive Plan and to 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.
All of those eligible to participate in the Plan in 1995 elected to do so,
except for one executive officer who retired mid-year.
SEVERANCE PAYMENT AGREEMENTS
The Corporation has severance payment agreements (the "Agreements") with
Messrs. Dannemiller, Robinson, Stinson, Whitten and Martins. An additional
agreement has been entered into between the Corporation and one other executive
officer. 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
Mr. Martins and one and one-half times for Messrs. Stinson and 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
15
<PAGE> 16
at the levels in effect immediately prior to termination. The terms of the
additional Agreement is essentially the same as for the named officers, except
that the additional Agreement provides for a lump sum severance payment equal to
one and one-half times the officer's annual base salary. With respect to Mr.
Martins, who is not fully vested in the Corporation's employee benefit plans,
the Agreement also provides for a lump sum payment equal to the value of any
non-vested benefits that are forfeited. Under the terms of the Agreements,
escrow funds have been established with Key Trust Company of Ohio, N.A., 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, 1995, the Board of Directors had six
meetings, four of which were regularly scheduled quarterly meetings. 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 or she served.
The Board of Directors has established an Audit Committee, an Executive
Organization & Compensation Committee and a Director Nominating Committee.
The Audit Committee 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. Russel B. Every, Russell R.
Gifford, John J. Kahl and Dr. Jerry Sue Thornton serve as members of the
committee. The Audit Committee met three times during the fiscal year ended June
30, 1995.
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, serve as
members of the committee. The Executive Organization & Compensation Committee
met three times during the fiscal year ended June 30, 1995.
16
<PAGE> 17
The Director Nominating 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. L. Thomas Hiltz, William G. Bares,
William E. Butler, John C. Dannemiller and John J. Kahl serve as members of the
committee. There are no procedures established for submissions by shareholders;
the committee would, however, consider a qualified nominee submitted by
shareholders. The Director Nominating Committee met once during the fiscal year
ended June 30, 1995.
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, 1996. 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 1995 all
Section 16(a) filing requirements applicable to its executive officers,
directors and greater than ten percent beneficial owners were complied with.
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Proposals by shareholders for inclusion in the 1996 Annual Meeting Proxy
Statement must be received by the Corporation's Secretary at its executive
offices, 3600 Euclid Avenue, Cleveland, Ohio 44115, no later than May 18, 1996.
All such proposals are subject to the applicable rules and requirements of the
Securities and Exchange Commission.
17
<PAGE> 18
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
Secretary
Dated: September 15, 1995
18
<PAGE> 19
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 17, 1995, 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:
(The Board of Directors recommends a vote FOR Items 1 and 2.)
<TABLE>
<S> <C>
1. Election of Directors of Class II (for a term of 3 (change of address)
years)
----------------------------------
The nominees are:
William G. Bares, Russel B. Every and John J. Kahl ----------------------------------
2. Ratification of the appointment of Deloitte & Touche LLP ----------------------------------
as independent auditors for the current fiscal year.
----------------------------------
3. In their discretion, the Proxies are authorized to vote (If you have written in the above
on such other business as may properly come before the space, please mark the
meeting. corresponding box on the reverse
side of this card.)
</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
--------------------------------------------------------------------------------
DETACH CARD
<PAGE> 20
<TABLE>
<S> <C> <C>
[X] PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
WITHHOLD
FOR VOTE FOR
ALL ALL
NOMINEES NOMINEES FOR AGAINST ABSTAIN
1. Election of 2. Ratification of the
Directors [ ] [ ] appointment of [ ] [ ] [ ] PLEASE SIGN, DATE
of Class II Deloitte & Touche AND RETURN THIS
(see reverse) LLP as indepen- PROXY CARD PROMPTLY
dent auditors for USING THE ENCLOSED
the current fiscal ENVELOPE.
year.
For, except vote withheld from the following nominee(s):
Change
of [ ]
Address
SIGNATURE(S) DATE , 1995
-------------------------------------------------- ---------------------
SIGNATURE(S) DATE , 1995
-------------------------------------------------- ---------------------
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.
----------------------------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
<PAGE> 21
CONFIDENTIAL VOTING INSTRUCTIONS
TO: KEY TRUST COMPANY OF OHIO, N.A., TRUSTEE (THE "TRUSTEE") FOR
BEARINGS, INC. RETIREMENT 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 17, 1995.
(The Board of Directors recommends a vote FOR Items 1 and 2.)
<TABLE>
<S> <C>
1. Election of Directors of Class II (for a term of 3 years)
(change of address)
The nominees are:
William G. Bares, Russel B. Every and John J. Kahl --------------------------------------
2. Ratification of the appointment of Deloitte & Touche LLP --------------------------------------
as independent auditors for the current fiscal year.
--------------------------------------
3. In its discretion, the Trustee is authorized to vote on such (If you have written in the above
other business as may properly come before the meeting. space, please mark the corresponding
box on the reverse side of this card.)
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
-----------------------------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
<PAGE> 22
<TABLE>
<S> <C> <C>
[X] PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
WITHHOLD
FOR VOTE FOR
ALL ALL
NOMINEES NOMINEES FOR AGAINST ABSTAIN
1. Election of 2. Ratification of the
Directors [ ] [ ] appointment of [ ] [ ] [ ]
of Class II Deloitte & Touche
(see reverse) LLP as indepen-
dent auditors for
the current fiscal
year.
For, except vote withheld from the following nominee(s):
-----------------------------------------------------------
Change
of [ ]
Address
PLEASE MARK, SIGN, DATE AND RETURN
THESE INSTRUCTIONS PROMPTLY USING
THE ENCLOSED ENVELOPE
SIGNATURE(S) DATE , 1995
---------------------------------------------------- ---------------------
NOTE: Please sign exactly as name appears hereon.
---------------------------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
