<PAGE> 1
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
THE TRANZONIC COMPANIES
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Not Applicable
(2) Aggregate number of securities to which transaction applies:
Not Applicable
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
Not Applicable
(4) Proposed maximum aggregate value of transaction:
Not Applicable
(5) Total fee paid:
Not Applicable
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
Not Applicable
(2) Form, Schedule or Registration Statement No.:
Not Applicable
(3) Filing Party:
Not Applicable
(4) Date Filed:
Not Applicable
<PAGE> 2
THE TRANZONIC COMPANIES
30195 CHAGRIN BOULEVARD
PEPPER PIKE, OHIO 44124
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual Meeting of Shareholders of The
Tranzonic Companies will be held at the Cleveland Marriott East, 3663 Park East
Drive, Beachwood, Ohio, on Monday, June 12, 1995, at 10:30 A.M., local time, for
the purpose of considering and acting upon:
1. The election of three Class I Directors;
2. The selection of independent auditors for the fiscal year ending
February 29, 1996; and
3. The transaction of any other business which properly may come before the
meeting and any adjournments thereof.
Holders of Class A Common Shares and Class B Common Shares of The Tranzonic
Companies of record at the close of business on April 28, 1995 are entitled to
vote at the Annual Meeting and any adjournments thereof.
By order of the Board of Directors
JAMES H. BERICK
Secretary
Cleveland, Ohio
May 12, 1995
***************************************************************************
* *
* SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE *
* ENCLOSED PROXY(IES) IN THE ENVELOPE PROVIDED WHICH REQUIRES NO *
* POSTAGE IF MAILED IN THE UNITED STATES. IF YOU HOLD CLASS A COMMON *
* SHARES AND CLASS B COMMON SHARES, PLEASE RETURN BOTH PROXIES. *
* *
***************************************************************************
<PAGE> 3
May 12, 1995
THE TRANZONIC COMPANIES
30195 CHAGRIN BOULEVARD
PEPPER PIKE, OHIO 44124
PROXY STATEMENT
The accompanying proxies are solicited by the Board of Directors of the
Corporation for use at the Annual Meeting of Shareholders to be held on June 12,
1995 and any adjournments thereof.
Holders of Class A Common Shares and Class B Common Shares of record at the
close of business on April 28, 1995 (the record date) will be entitled to vote
at the Annual Meeting. At that date the Corporation had issued and outstanding
2,185,223 Class A Common Shares without par value and 1,306,765 Class B Common
Shares without par value. Only Class A Common Shares are entitled to vote in the
election of the Corporation's Class I Directors, as described below. Except as
hereinafter described in respect of the election of Directors, (i) each Class A
Common Share is entitled to one vote on all matters properly coming before the
Annual Meeting, and each Class B Common Share is entitled to one-tenth (1/10th)
of one vote on all matters properly coming before the Annual Meeting, (ii) Class
A Common Shares and Class B Common Shares shall vote together as a single class
on all matters properly coming before the Annual Meeting, and (iii) an aggregate
of at least 1,745,995 Class A Common Shares and Class B Common Shares must be
represented at the meeting in person or by proxy in order to constitute a quorum
for the transaction of business.
This Proxy Statement and the accompanying form of proxy were first mailed
to Shareholders on May 12, 1995.
ELECTION OF DIRECTORS
The Corporation's Board of Directors currently consists of nine (9)
persons, divided into three classes (Classes I, II and III) consisting of three
Directors each. Only Class A Common Shares are entitled to vote for Directors in
Classes I and III and only Class B Common Shares are entitled to vote for
Directors in Class II.
<PAGE> 4
At this Annual Meeting, Class I Directors are to be elected for a term
expiring at the 1998 Annual Meeting of Shareholders and until their respective
successors are duly elected and qualified. The Board of Directors has designated
the three (3) persons first named in the table below as nominees for Director
for such term. Each of the nominees presently is a Director.
Pursuant to the Articles of Incorporation of the Corporation, as amended,
and in accordance with the procedures established by the American Stock
Exchange, the holders of Class A Common Shares are entitled to vote separately
as a class for the election of three Class I Directors. At least 1,092,612 Class
A Common Shares of the Corporation must be represented at the meeting in person
or by proxy in order to constitute a quorum for the election of such Directors.
The holders of Class B Common Shares are not entitled to vote in the election of
Class I Directors.
Unless a holder of Class A Common Shares requests that voting of his or her
proxy be withheld for the nominees for election as Class I Directors in
accordance with the instructions set forth on such proxy, it presently is
intended that Class A Common Shares represented by proxies solicited hereby will
be voted for the election as Class I Directors of the nominees designated by the
Board of Directors. All nominees have consented to being named in this Proxy
Statement and to serve if elected. Should any nominee subsequently decline or be
unable to accept such nomination or to serve as a Director, an event which the
Board of Directors does not now expect, the persons voting the Class A Common
Shares represented by proxies solicited hereby may either vote such shares for a
substitute nominee for such class or for a reduced number of nominees, as they
may deem advisable.
In the event holders of Class A Common Shares shall have the right to
cumulate their voting power for the election of Directors (see CUMULATIVE
VOTING), the persons voting the Class A Common Shares represented by proxies
solicited hereby shall have the right to cumulate such voting power as they
possess and to distribute their votes among the three nominees designated for
election by the holders of Class A Common Shares, as they see fit. Cumulative
voting permits a holder of Class A Common Shares to give one nominee a number of
votes equal to the number of Directors to be elected by the holders of Class A
Common Shares multiplied by the number of Shares the Shareholder may vote, or a
holder of Class A Common Shares may distribute votes on the same principle among
two or three nominees.
2
<PAGE> 5
The information concerning the nominees set forth in the following table is
based in part on information received from the respective nominees and in part
on the Corporation's records:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FIRST
NAME OF NOMINEE AGE AS OF DURING PAST FIVE YEARS BECAME
OR DIRECTOR APRIL 28, 1995 AND OTHER DIRECTORSHIPS HELD DIRECTOR
- - - - - - ------------------------- ----------------- ------------------------------------------- ---------------
<S> <C> <C> <C>
NOMINEES TO SERVE UNTIL 1998 ANNUAL MEETING OF SHAREHOLDERS (CLASS I)
James H. Berick+ ++ 62 Chairman of Berick, Pearlman & Mills Co., 1970
L.P.A., Cleveland, Ohio (attorneys) and
Secretary of the Corporation. Also, Presi-
dent and Treasurer of Realty ReFund Trust
(real estate investment trust) and Presi-
dent and Treasurer of Mid-America ReaFund
Advisors, Inc. (its advisor) since January,
1990. Mr. Berick is a Director of MBNA
Corporation and A. Schulman, Inc. and a
Trustee of The Town and Country Trust and
Realty ReFund Trust.
Robert S. Reitman*() 61 Chief Executive Officer, Chairman of the 1960
Board of Directors and President of the
Corporation.
Sylvia K. Reitman 57 Investor, Cleveland, Ohio. 1989
DIRECTORS CONTINUING IN OFFICE UNTIL 1997 ANNUAL MEETING OF SHAREHOLDERS (CLASS III)
David J. Golden*() 62 Senior Vice President of the Corporation. 1958
Morton L. Reitman*() 58 Executive Vice President of the Corpora- 1973
tion.
James C. Spira 52 Group Vice President of the Corpo- 1991
ration since December, 1991. Previously,
President and Chief Executive Officer of
Cleveland Consulting Associates, Inc.
(operations management consultants).
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FIRST
NAME OF NOMINEE AGE AS OF DURING PAST FIVE YEARS BECAME
OR DIRECTOR APRIL 28, 1995 AND OTHER DIRECTORSHIPS HELD DIRECTOR
- - - - - - ------------------------- ----------------- ------------------------------------------- ---------------
<S> <C> <C> <C>
DIRECTORS CONTINUING IN OFFICE UNTIL 1996 ANNUAL MEETING OF SHAREHOLDERS (CLASS II)
Joseph A. Campanella+ ++ 52 Executive Vice President of Star Banc Cor- 1979
poration (bank holding company) since 1991.
Previously, President of Star Bank, N.A.,
Cleveland from 1988 until 1991.
Thomas S. Robertson+ ++ 52 Sainsbury Professor of Marketing, London 1989
Business School since 1994. Prior thereto,
Chairperson of the Department of Market-
ing, The Wharton School, University of
Pennsylvania, from 1988 until 1994.
Steven W. Percy+ ++ 48 President of BP Oil Company and Executive 1994
Vice President of BP America Inc. since
1992. Previously, Chief Executive Officer
of BP Finance International (a division of
BP International Ltd.), and Group Treasurer
of The British Petroleum Company, p.l.c.,
from 1989 until 1992.
- - - - - - ---------------
<FN>
+ Member of the Compensation Committee.
++ Member of the Audit Committee.
* Member of the Executive Committee.
() Member of the Pension Committee.
</TABLE>
The functions performed by the Audit Committee of the Board of Directors
include: (i) recommending to the Board of Directors the appointment of a firm of
independent auditors to examine the books and accounts of the Corporation and
its subsidiaries; (ii) reviewing with the independent auditors the scope of
their work; (iii) reviewing with the Corporation's management matters related to
the examination and to the Corporation's accounting procedures; (iv) reviewing
with the independent auditors compliance with the record keeping and internal
control requirements of the Foreign Corrupt Practices Act of 1977; (v) reviewing
with the independent auditors and approving each non-audit service performed or
proposed to be performed by the independent auditors, as well as the
relationship of audit to non-audit fees; and (vi) considering the effect of the
various non-audit services upon the independence of the auditors. The Audit
Committee held two meetings during the year ended February 28, 1995.
4
<PAGE> 7
The functions performed by the Compensation Committee of the Board of
Directors include making recommendations to the Board of Directors concerning
compensation policies, salaries and other forms of compensation for management
and other employees of the Corporation and its subsidiaries. The Compensation
Committee held two meetings during the year ended February 28, 1995.
The Board of Directors does not have a Nominating Committee.
The Board of Directors held four meetings during the year ended February
28, 1995. All incumbent Directors attended at least seventy-five percent of all
of the meetings of the Directors and any committees thereof on which they served
during the year.
CERTAIN RELATIONSHIPS; COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
David J. Golden and Sylvia K. Reitman are brother and sister. Sylvia K.
Reitman is the wife of Robert S. Reitman. Robert S. Reitman and Morton L.
Reitman are brothers. Alayne L. Reitman, Vice President -- Finance and Treasurer
of the Corporation, is the daughter of Robert S. Reitman and Sylvia K. Reitman.
James H. Berick, Secretary and Director, is Chairman of the law firm
Berick, Pearlman & Mills Co., L.P.A., which is retained by the Corporation as
legal counsel.
COMPENSATION OF DIRECTORS
Each Director who is not an employee of the Corporation receives an annual
Director's fee of $12,000, plus $750 for attendance at each meeting of the Board
or any Committee. In addition, if such a Director elects to have his
compensation deferred and invested in Class B Common Shares pursuant to the
Corporation's Deferred Compensation Plan for Non-Employee Directors, then each
such Director receives, in Class B Common Shares, an additional amount equal to
25% of the amount so deferred and invested.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Corporation's compensation program is administered by the Compensation
Committee, which consists exclusively of non-employee Directors. This
compensation program is designed and administered to align the interests of the
Corporation's executive officers and its other key employees with that of the
Corporation's Shareholders, to link compensation to the performance of the
Corporation as well as to
5
<PAGE> 8
individual contributions and to provide compensation at a level which is
competitive in the marketplace so that the Corporation can continue to attract,
motivate, and retain qualified management.
The Corporation's compensation program for its executive officers
(including the named executive officers) and certain other key employees
consists of an annual salary, bonus (in some instances) and a long-term
incentive represented by stock options and, in some instances, deferred
compensation. The policies in respect of each of these elements, as well as the
basis for determining the compensation of the Chairman of the Board and Chief
Executive Officer, Mr. Robert S. Reitman (the "CEO"), are described below.
The Compensation Committee establishes annual salaries to be competitive
with the marketplace and to reflect the varying levels of responsibilities of
the CEO and the other executive officers. Such salaries are based, in part, on
information provided to the Corporation by independent compensation consultants.
The services of independent compensation consultants also are used by the
Corporation in respect of surveying compensation levels and trends in industry
generally and in respect of structuring the bonus component of the compensation
of the CEO and the other executive officers. For the Corporation's executive
officers, annual bonuses are based upon an evaluation of their respective
division's actual performance against its business plan. Assuming that
performance levels are achieved, the bonus paid is a predetermined percentage of
the division's pretax profits. In the event that predetermined standards are not
achieved, bonuses are subject to reduction. In addition to earnings performance,
the Compensation Committee evaluates other managerial achievements of the
Corporation's executive officers as a component of bonus awards.
The Compensation Committee determines the annual bonus of the CEO based
upon the Corporation's sales, pretax income and return on investment
(collectively, the "Corporation Components") as well as upon a subjective factor
designed to reward individual performance independent of the Corporation
Components. The CEO's bonus is determined in part based upon the Corporation's
attaining certain threshold, target and maximum Corporation Component levels,
which levels are established based upon a Board-approved business plan for the
Corporation. The CEO's fiscal 1995 bonus was determined by weighting the
Corporation Components as follows: 45% of his 1995 bonus was based upon the
levels of Corporation Components achieved (each bearing equal weight) and 55%
was determined subjectively based upon the CEO's overall contributions to the
Corporation.
6
<PAGE> 9
Stock options are awarded to the Corporation's executive officers in
accordance with plans approved by the Shareholders. During the fiscal year ended
February 28, 1995, options were available for grant only under the Corporation's
1995 Incentive Stock Option Plan (The "1995 Plan"). Subject to certain
limitations and based upon management input, the Compensation Committee
determines the persons to whom options will be granted and the numbers of shares
to be represented by such options. In general, the Compensation Committee has
awarded options based upon the individual's position with the Corporation and
potential contribution to corporate profitability. The 1995 Plan provides for
the granting of incentive stock options for Class B Common Shares, the option
price of which may not be less than 100% of the fair market value of such shares
on the date of grant. However, in the case of an optionee who owns or is deemed
to own shares of the Corporation representing more than 10% of the total voting
power of all classes of the Corporation's shares at the time an option is
granted (currently the CEO and two other executive officers), the option price
may not be less than 110% of the fair market value of such shares on the date of
grant. During the fiscal year ended February 28, 1995, stock options were
granted under the 1995 Plan to the named executive officers in amounts indicated
later in this Proxy Statement. It is the intention of the Compensation Committee
that such grants constitute an additional tie between the Corporation's
performance and executive compensation while further aligning the common
long-term interests of the Corporation's executive officers and its
Shareholders.
Stock options also have been granted to two executive officers pursuant to
their employment agreements with the Corporation. Such options were designed to
tie the interests of such executive officers, as new employees of the
Corporation, to the interest of the Corporation's Shareholders and to retain
those executive officers by linking the exercisability of their options to their
continued employment with the Corporation.
In addition, the Corporation has adopted for many of its employees various
benefit plans in which the executive officers are permitted to participate,
subject to any legal limitations on the amounts that may be contributed or the
benefits that may be payable under the plans.
The Compensation Committee:
James H. Berick, Chairman
Joseph A. Campanella
Thomas S. Robertson
Steven W. Percy
7
<PAGE> 10
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation paid by the Corporation or
its subsidiaries during the Corporation's last three fiscal years to the
Corporation's Chief Executive Officer and each of the four most highly
compensated executive officers (as measured by salary and bonus) whose aggregate
salary and bonus during the fiscal year ended February 28, 1995, exceeded
$100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG
TERM
COMPEN-
ANNUAL COMPENSATION SATION
------------------------------------- --------
OTHER
ANNUAL AWARDS ALL OTHER
COMPEN- -------- COMPEN-
NAME AND FISCAL SALARY(1) BONUS SATION(2) OPTIONS SATION
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
- - - - - - ------------------------------ ------- --------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Robert S. Reitman, 1995 407,819 192,531 23,618 2,500 133,312(3)
Chief Executive Officer, 1994 388,419 100,000 -- 9,500 114,090
Chairman of the Board of 1993 368,977 120,000 409,946 4,000 96,268
Directors and President
Morton L. Reitman, 1995 298,893 122,800 -- 2,400 26,115(3)
Executive Vice President 1994 276,677 55,000 -- 2,600 24,645(3)
1993 262,985 98,000 -- 2,000 21,353
Richard J. Sims, 1995 200,712 88,060 -- 2,000 3,967(3)
Vice President 1994 185,654 70,480 -- 2,000 5,051
1993 111,058 30,000 -- 32,000 1,804
James C. Spira, 1995 261,619 -- -- 2,200 5,352(3)
Group Vice President 1994 248,968 -- -- 2,400 7,176
1993 240,000 -- -- -- 1,960
Dennis H. Kelly, 1995 117,415 59,430 -- 1,000 3,595(3)
Vice President 1994 109,904 33,110 -- 1,000 3,038
1993 104,827 20,000 -- 1,500 3,025
- - - - - - ---------------
<FN>
(1) Includes amounts deferred pursuant to the Corporation's Salary Savings and
Profit Sharing Plan (the "Defined Contribution Plan"), a defined
contribution plan under Section 401(k) of the Internal Revenue Code.
(2) Except as otherwise noted, includes the net value (market value less
exercise price) realized in respect of Class A Common Shares and/or Class B
Common Shares purchased from the Corporation pursuant to exercise of stock
options.
</TABLE>
8
<PAGE> 11
(3) Includes (a) Corporation payments of premiums for long-term disability
insurance: Messrs. Robert S. Reitman, Morton L. Reitman and James C. Spira
$780 each; Mr. Sims $768; and Mr. Kelly $457, (b) Corporation contributions
under the Defined Contribution Plan: Mr. Robert S. Reitman $3,215; Mr.
Morton L. Reitman $3,195; Mr. Spira $3,192; Mr. Sims $3,199; and Mr. Kelly
$3,143, (c) Corporation payments of premiums for life insurance: Mr. Robert
S. Reitman $27,425; and Mr. Morton L. Reitman $5,700, (d) amounts accrued
under deferred compensation agreements: Mr. Robert S. Reitman $100,512; and
Mr. Morton L. Reitman $16,440, and (e) Corporation payments of parking fees:
Mr. Robert S. Reitman and James C. Spira $1,380 each.
STOCK OPTIONS
The following table contains information concerning the grant of stock
options during fiscal year 1995 to the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
------------------------------------------------------ REALIZABLE VALUE AT
% OF TOTAL ASSUMED ANNUAL
OPTIONS RATES OF STOCK
GRANTED TO EXERCISE PRICE APPRECIATION
OPTIONS EMPLOYEES IN OR BASE EXPIR- FOR OPTION TERM(3)
GRANTED(1) FISCAL PRICE ATION -------------------
NAME (#) YEAR(2) ($/SH) DATE 5% 10%
- - - - - - ----------------------- ---------- ------------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Robert S. Reitman 2,500 6.95% $13.06 2/28/99 $ 9,025 $19,925
Morton L. Reitman 2,400 6.67% $11.88 2/28/04 $17,928 $45,432
James C. Spira 2,200 6.11% $11.88 2/28/04 $16,434 $41,646
Richard J. Sims 2,000 5.56% $11.88 2/28/04 $14,940 $37,860
Dennis H. Kelly 1,000 2.78% $11.88 2/28/04 $ 7,470 $18,930
<FN>
- - - - - - ---------------
(1) All options are for Class B Common Shares and were granted pursuant to the
Corporation's 1995 Incentive Stock Option Plan. Such options become
exercisable on March 1, 1997.
(2) Based upon an aggregate of 35,950 options granted to all employees in 1995.
(3) The potential realizable values illustrated at 5% and 10% compound annual
appreciation assume that the price of the Corporation's Class B Common
Shares increases from $11.88 per share to $19.35 and $30.81 per share,
respectively, over the 10-year term of the options which were granted to all
named executive officers other than Robert S. Reitman. If those named
executive officers realize those values, the Corporation's Shareholders will
realize aggregate appreciation in the price of the 1,306,765 Class B Common
Shares of the Corporation outstanding of approximately $9,761,535 or
$24,737,061, respectively, over the same period.
</TABLE>
9
<PAGE> 12
The following table contains information concerning stock option exercises
during fiscal year 1995 by the named executive officers and the value of their
unexercised options at February 28, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
YEAR-END (#) AT FISCAL YEAR-END ($)
---------------------- ----------------------
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
- - - - - - --------------------- ---------------- ---------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Robert S. Reitman Class B: 10,600 Class B: 23,618 Class B: 0/16,000 Class B: 0/12,789
Morton L. Reitman None None Class A: 9,300/0 Class A: 96,252/0
Class B: 12,950/7,000 Class B: 77,877/11,662
James C. Spira None None Class B: 34,000/40,600 Class B: 25,500/37,713
Richard J. Sims None None Class B: 0/36,000 Class B: 0/30,992
Dennis H. Kelly None None Class B: 5,700/3,500 Class B: 21,238/4,745
</TABLE>
10
<PAGE> 13
PERFORMANCE GRAPH
The following graph compares total Shareholder returns in respect of the
Corporation's Class A Common Shares ("TNZA") and Class B Common Shares ("TNZB")
over the last five fiscal years to the American Stock Exchange Index ("AMEX")
and the American Stock Exchange Consumer Goods Index ("AMEX Consumer Goods").
Total return values for AMEX, AMEX Consumer Goods, TNZA and TNZB were calculated
based upon market weighting at the beginning of the period and include
reinvestment of dividends. The Shareholder returns shown on the graph below are
not necessarily indicative of future performance.
The following graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Corporation specifically incorporates this
information by reference and otherwise shall not be deemed filed under such
Acts.
<TABLE>
<CAPTION>
DOLLARS
Measurement Period AMEX Con-
(Fiscal Year Covered) TNZA TNZB AMEX sumer Goods
<S> <C> <C> <C> <C>
2/28/90 100 100 100 100
2/28/91 69 65 98 108
2/29/92 132 110 118 168
2/28/93 120 119 115 170
2/28/94 90 91 134 199
2/28/95 119 125 128 188
</TABLE>
11
<PAGE> 14
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
In 1990, the Corporation entered into employment agreements with Robert S.
Reitman and Morton L. Reitman. Robert S. Reitman's employment agreement, which
expires in June 1996, provides for an annual salary of $340,000, which salary
may be reviewed periodically by the Compensation Committee to determine if the
same should be increased. Robert S. Reitman's employment agreement also provides
for payment to Mr. Reitman of an annual incentive based upon certain performance
criteria, the maximum of which amount shall be not less than $160,000, and for
certain disability benefits.
Morton L. Reitman's employment agreement with the Corporation, which
expires in June 1996, provides for an annual salary of $242,000, which salary
may be reviewed periodically by the Compensation Committee to determine if the
same should be increased, and for certain disability benefits. Morton L. Reitman
also has a consultant agreement with the Corporation providing for payment to
Mr. Reitman for consulting services in the amount of $72,000 per year, for a
term of three years commencing upon the termination of his employment.
In 1991, the Corporation entered into an employment agreement with James C.
Spira. Mr. Spira's employment agreement, which expires in February 1996,
provides for an annual salary of $240,000, which salary may be reviewed
periodically by the Compensation Committee to determine if the same should be
increased, and for certain disability benefits. In addition, pursuant to Mr.
Spira's employment agreement, the Corporation granted to Mr. Spira options to
purchase 70,000 Class B Common Shares of the Corporation, the exercise price of
which options is $14.50, the fair market value of such shares on the date of the
grant. The options become exercisable (so long as Mr. Spira shall be a full-time
employee of the Corporation on such date) as follows: 15,000 options on February
28, 1993; 10,000 options on February 28, 1994; 9,000 options on February 28,
1995; 9,000 options on February 29, 1996; 9,000 options on February 28, 1997;
9,000 options on February 28, 1998; and 9,000 options on February 28, 1999.
Mr. Spira may exercise such options during a period of five years from and
after the date on which the last options become exercisable. In the event of the
termination of employment by Mr. Spira for any reason, any options to which Mr.
Spira shall have become entitled to purchase as of the date of such termination
expire 90 days after such date if the same are not purchased. However, in the
event that Mr. Spira's employment is terminated without cause, Mr. Spira has the
right to purchase all of the
12
<PAGE> 15
options not purchased previously, whether or not the same have become
exercisable, within 90 days of such termination.
In March 1995, a wholly-owned subsidiary of the Corporation entered into an
employment agreement with Mr. Dennis H. Kelly. Mr. Kelly's employment agreement,
which expires in February 1998, provides for an annual salary of $120,000 plus
incentives based upon performance.
The Corporation also has deferred compensation agreements with certain key
employees which provide for benefits for a term of 10 years following
retirement, disability or death. These benefits vary according to the employee's
corporate responsibility and the age of the employee at the date of such event.
The ranges of annual benefits under the deferred compensation agreements for
Messrs. Robert S. Reitman and Morton L. Reitman during the first five years of
said term are $32,400 to $68,400 and $14,400 to $36,600, respectively. The
amount of benefits payable to such executive officers during the second five
years of the term is 75% of the benefit payable during the first five years.
The benefits payable to Messrs. Robert S. Reitman and Morton L. Reitman
under the deferred compensation agreements will be replaced with the benefits
payable to them under the Corporation's 1992 Supplemental Benefit Plan (the
"Supplemental Benefit Plan") upon the vesting of each such individual's rights
in that plan. Vesting under the Supplemental Benefit Plan does not occur unless
and until that individual has been a participant in the plan for 10 years or has
attained age 65, whichever first occurs; provided, however, that a participant
who becomes disabled or dies shall be vested after six years of employment by
the Corporation. In addition, in the event that effective control of the
Corporation changes from that management in control at the date of adoption of
the Supplemental Benefit Plan, all participants immediately vest in the plan
benefits. Under the Supplemental Benefit Plan, Messrs. Robert S. Reitman and
Morton L. Reitman will receive $140,000 and $60,000, respectively, in annual
benefits for a term of 15 years following their retirement, death or disability.
In the event that either individual's rights under the Supplemental Benefit Plan
fail to vest, then the benefits under the deferred compensation agreements
remain payable to such non-vested individual.
13
<PAGE> 16
BENEFICIAL OWNERSHIP OF CLASS A COMMON SHARES
AND CLASS B COMMON SHARES
The following tables, together with the accompanying footnotes, describe
the beneficial ownership of the Corporation's Class A Common Shares and Class B
Common Shares as of April 28, 1995 (except as otherwise indicated) of (1) each
person who was known to the Corporation to be the beneficial owner of more than
five percent of the total Shares of either class issued and outstanding on such
date, and (2) each current Director and nominee for election as Director, as
well as all executive officers and Directors as a group. Except as otherwise
indicated, the share figures shown below are based upon information supplied by
the named individuals and group members described in the tables and the
Corporation's records.
As used in the tables, a person is deemed to be the beneficial owner of all
shares in respect of which such person has or shares voting or investment power
(regardless of whether such individual is entitled to receive any economic
benefits derived from such shares). As used herein, "voting power" means the
power to vote, or to direct the voting of, shares and "investment power" means
the power to dispose of, or to direct the disposition of, shares. Also, included
are shares which were not owned on April 28, 1995 but which can be acquired
within 60 days after that date.
As indicated specifically in the footnotes to the tables, certain Class A
Common Shares and Class B Common Shares included for the named individuals in
each table below are deemed to be beneficially owned by more than one of such
named individuals and, as a result, have been so reported. Certain individuals
listed in the tables have disclaimed beneficial ownership with respect to some
of the Shares disclosed as beneficially owned under the definition set forth
above.
14
<PAGE> 17
<TABLE>
BENEFICIAL OWNERSHIP OF MORE THAN FIVE PERCENT OF
CLASS A COMMON SHARES AND CLASS B COMMON SHARES
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP BY CLASS
----------------------------------------
CLASS A CLASS B
NAME AND ADDRESS OF COMMON PERCENT OF COMMON PERCENT OF
BENEFICIAL OWNER SHARES CLASS SHARES(1) CLASS
- - - - - - ----------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
David J. Golden 908,846 41.6% 460,273 35.2%
30195 Chagrin Boulevard (2)(3) (3)(4)
Pepper Pike, Ohio 44124
Sylvia K. Reitman 830,606 38.0% 415,303 31.8%
30195 Chagrin Boulevard (3)(5) (3)(5)
Pepper Pike, Ohio 44124
Estate of Miriam G. Golden 383,662(6) 17.6% 191,831(6) 14.7%
David J. Golden and
Sylvia K. Reitman,
Co-executors
30195 Chagrin Boulevard
Pepper Pike, Ohio 44124
Dimensional Fund 132,400(7) 6.1% 69,150(7) 5.3%
Advisors Inc.
1299 Ocean Avenue,
Suite 650
Santa Monica,
California 90401
Lazard Freres & Co. 108,618(8) 5.0% 79,592(8) 6.1%
One Rockefeller Plaza
New York, New York 10020
- - - - - - ---------------
<FN>
(1) Each Class A Common Share is convertible into one Class B Common Share.
Class B Common Shares issuable upon such conversion are not included. Robert
S. Reitman, having an address at 30195 Chagrin Boulevard, Pepper Pike, Ohio
44124, beneficially owns 77,554 Class A Common Shares and 40,747 Class B
Common Shares, as described in the Table of Beneficial Ownership of
Executive Officers, Directors and Nominees in this Proxy Statement. Upon
conversion of Mr. Reitman's Class A Common Shares into Class B Common
Shares, Mr. Reitman
15
<PAGE> 18
would beneficially own 118,301 Class B Common Shares, representing 9.1% of
such Class.
(2) Includes 7,700 Class A Common Shares held as trustee for the benefit of Mr.
Golden's son.
(3) Includes 383,662 Class A Common Shares or 191,831 Class B Common Shares, as
applicable, in respect of which David G. Golden and Sylvia K. Reitman share
voting and dispositive power as co-executors of the estate of Miriam G.
Golden; and 178,038 Class A Common Shares or 89,019 Class B Common Shares,
as applicable, in respect of which David G. Golden and Sylvia K. Reitman,
acting in concert, share the right to direct the voting and disposition
pursuant to the terms of the Louis B. Golden Insurance Trust u/a/d October
20, 1980.
(4) Includes 2,000 Class B Common Shares which are not owned, but can be
purchased within 60 days upon the exercise of options granted under the
Corporation's 1989 Incentive Stock Option Plan (the "1989 Plan"). Also
includes 7,700 Class B Common Shares held as trustee for the benefit of Mr.
Golden's son.
(5) Does not include 77,554 Class A Common Shares or 40,747 Class B Common
Shares, as applicable, owned by Robert S. Reitman, as to which shares Mrs.
Reitman disclaims beneficial ownership.
(6) The estate of Miriam G. Golden is the record owner of the Shares shown;
however, the co-executors each are deemed to own beneficially all of such
Shares, as reported above.
(7) Information based solely upon Schedules 13G filed by such shareholder with
the Securities and Exchange Commission in January, 1995. Dimensional Fund
Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed to
have beneficial ownership of 132,400 Class A Common Shares and 69,150 Class
B Common Shares, as applicable, as of December 31, 1994, all of which Shares
are held in portfolios of DFA Investment Dimensions Group, Inc., a
registered open-end investment company, in series of the DFA Investment
Trust Company, a Delaware business trust, or in the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, as to all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all of such Shares.
(8) Information based solely upon Schedules 13G filed by such shareholder with
the Securities and Exchange Commission in February, 1995.
</TABLE>
16
<PAGE> 19
BENEFICIAL OWNERSHIP OF EXECUTIVE OFFICERS, DIRECTORS AND NOMINEES
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP BY CLASS
-----------------------------------------
CLASS A CLASS B
NAME OF DIRECTOR COMMON PERCENT OF COMMON PERCENT OF
OR NOMINEE SHARES CLASS SHARES(1)(2) CLASS(1)
- - - - - - ------------------------ --------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
James H. Berick 600 (3) 6,245 (3)
Joseph A. Campanella 500 (3) 4,145 (3)
David J. Golden 908,846(4)(5) 41.6% 460,273(4)(5) 35.2%
Robert S. Reitman 77,554(6) 3.5% 40,747(6) 3.1%
Morton L. Reitman 46,364(7)(8) 2.1% 31,466(7)(8) 2.4%
Sylvia K. Reitman 830,606(4)(9) 38.0% 415,303(4)(9) 31.8%
Thomas S. Robertson 0 0% 3,945 (3)
James C. Spira 4,800 (3) 36,400 2.8%
Steven W. Percy 0 0% 885 (3)
Richard J. Sims 2,520 (3) 12,760 (3)
Dennis H. Kelly 0 0% 8,200 (3)
Executive Officers,
Directors and
Nominees as a Group
(14 persons) 1,881,620 86.1% 1,010,884 77.4%
- - - - - - ---------------
<FN>
(1) Includes the following number of Class B Common Shares which are not owned,
but can be purchased within 60 days upon the exercise of options granted
under the Corporation's 1981 Performance Share Option Plan (the "1981 Plan")
and 1989 Plan (and in the case of Messrs. Spira and Sims, also under their
respective employment agreements): Robert S. Reitman -- 4,000; Morton L.
Reitman -- 13,450; David J. Golden -- 2,000; James C. Spira -- 34,000;
Richard J. Sims -- 12,000; Dennis H. Kelly -- 7,200; and all executive
officers and Directors as a group -- 77,950.
(2) Each Class A Common Share is convertible into one Class B Common Share.
Class B Common Shares issuable upon such conversion are not included.
(3) Less than 1%.
(4) Includes 383,662 Class A Common Shares or 191,831 Class B Common Shares, as
applicable, in respect of which David G. Golden and Sylvia K. Reitman share
voting and dispositive power as co-executors of the estate of Miriam G.
Golden; and 178,038 Class A Common Shares or 89,019 Class B Common Shares,
as
17
<PAGE> 20
applicable, in respect of which David G. Golden and Sylvia K. Reitman,
acting in concert, share the right to direct the voting and disposition
pursuant to the terms of the Louis B. Golden Insurance Trust u/a/d October
20, 1980.
(5) Includes 7,700 Class A Common Shares and 7,700 Class B Common Shares, as
applicable, held as trustee for the benefit of Mr. Golden's son.
(6) Does not include 268,906 Class A Common Shares or 134,453 Class B Common
Shares, as applicable, owned by Mr. Reitman's wife or the Class A Common
Shares and Class B Common Shares, as applicable, described in note (4),
above, as to all of which shares Mr. Reitman disclaims beneficial ownership.
(7) Includes the 6,300 Class A Common Shares and 13,450 Class B Common Shares,
as applicable, which are not owned, but can be purchased within 60 days upon
the exercise of options granted under the Corporation's 1981 Plan and 1989
Plan by Morton L. Reitman.
(8) Includes 1,820 Class A Common Shares or 910 Class B Common Shares, as
applicable, held as custodian for the benefit of Mr. Reitman's adult child.
Does not include 1,200 Class A Common Shares or 600 Class B Common Shares,
as applicable, owned by Mr. Reitman's wife, as to which shares Mr. Reitman
disclaims beneficial ownership.
(9) Does not include 77,554 Class A Common Shares or 40,747 Class B Common
Shares, as applicable, owned by Mrs. Reitman's husband, as to all of which
shares Mrs. Reitman disclaims beneficial ownership.
</TABLE>
SELECTION OF AUDITORS
The Board of Directors of the Corporation has recommended that KPMG Peat
Marwick be selected as independent auditors to examine the books, records and
accounts of the Corporation and its subsidiaries for the fiscal year ending
February 29, 1996. In accordance with past practice, the recommendation is being
presented to holders of Class A Common Shares and Class B Common Shares for
adoption or rejection at the Annual Meeting. KPMG Peat Marwick were the
independent auditors of the Corporation for the fiscal year ended February 28,
1995 and are considered by the Board of Directors to be well qualified.
Representatives of KPMG Peat Marwick are expected to be present at the Annual
Meeting with the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
18
<PAGE> 21
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 10% of the Corporation's Common Shares, to file reports of ownership
and changes in ownership with the Securities and Exchange Commission. Sylvia K.
Reitman and David J. Golden have the exclusive power, acting in concert, to
direct the voting and disposition of the Class A Common Shares and Class B
Common Shares held by the Louis B. Golden Trust u/a/d October 20, 1980 (the
"Trust"). Although such authority was determined in connection with the
administration of the estate of their mother, Miriam G. Golden, such authority
was deemed to have been granted on the date of Mrs. Golden's death in May, 1994.
As a result, Sylvia K. Reitman, Robert S. Reitman and David J. Golden were
deemed to own beneficially, and were required to report their beneficial
ownership of, the shares held of record by the Trust as of the date of Mrs.
Golden's death; their respective reports of beneficial ownership were filed
subsequent to such date. James C. Spira reported his receipt of a stock option
grant in June, 1994 subsequent to the due date for such reporting.
OTHER MATTERS
The Board of Directors knows of no matter to be presented for action at the
Annual Meeting other than those described in this Proxy Statement. Should other
matters come before the meeting, the Class A Common Shares and Class B Common
Shares represented by proxies solicited hereby will be voted with respect
thereto in accordance with the best judgment of the proxy holders.
GENERAL INFORMATION
CUMULATIVE VOTING
If notice in writing is given by any holder of Class A Common Shares to the
President, a Vice President or the Secretary of the Corporation, not less than
forty-eight hours before the time fixed for the holding of the Annual Meeting,
that such Shareholder desires that the voting with respect to the election of
Directors shall be cumulative, and if an announcement of the giving of such
notice is made upon the convening of the meeting by the Chairman or Secretary of
the Meeting or by or on behalf of the Shareholder giving such notice, each
holder of Class A Common Shares shall have the right to cumulate such voting
power as he or she possesses at such election.
19
<PAGE> 22
VOTING OF PROXIES
Class A Common Shares and Class B Common Shares represented by properly
executed Management proxies will be voted at the meeting, and if a holder of
such shares has specified how the same are to be voted, they will be voted in
accordance with such specification. It is intended that Class A Common Shares
represented by proxies in which no specification has been made will be voted for
the election of Directors and Class A Common Shares and Class B Common Shares
represented by proxies in which no specification has been made will be voted for
the selection of the independent auditors.
SHAREHOLDER PROPOSALS
If a holder of Class A Common Shares or Class B Common Shares intends to
present a proposal at the next Annual Meeting of Shareholders presently
scheduled for June 11, 1996, it must be received by the Corporation for
consideration for inclusion in the Corporation's Proxy Statement and form of
proxy relating to that meeting on or before January 12, 1996.
REVOCATION OF PROXIES
A proxy may be revoked at any time before a vote is taken or the authority
granted is otherwise exercised. Revocation may be accomplished by the execution
of a later proxy with regard to the same Class A Common Shares or Class B Common
Shares, as the case may be, or by giving notice in writing or in open meeting.
SOLICITATION OF PROXIES
The cost of soliciting the accompanying proxies will be borne by the
Corporation. The Corporation does not expect to pay any compensation for the
solicitation of proxies but may pay brokers, nominees, fiduciaries and
custodians their reasonable expenses for sending proxy material to principals
and obtaining their instructions. In addition to solicitation by mail, proxies
may be solicited in person, by telephone or telegraph, or by Directors, officers
and regular employees of the Corporation.
By order of the Board of Directors
JAMES H. BERICK
May 12, 1995 Secretary
20
<PAGE> 23
THE TRANZONIC COMPANIES
CLASS A COMMON SHARE PROXY
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R The undersigned holder of Class A Common Shares hereby appoints
JAMES H. BERICK AND ROBERT S. REITMAN as Proxies, each with the
O full power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all
X the Class A Common Shares of The Tranzonic Companies held of record
by the undersigned on April 28, 1995, at the annual meeting
Y of shareholders to be held on June 12, 1995, and at any
adjournments thereof.
<TABLE>
<S> <C>
Election of Directors. (change of address)
James H. Berick, Robert S. Reitman and Sylvia K. Reitman. _________________________________________
_________________________________________
_________________________________________
_________________________________________
(If you have written in the above
space, please mark the
corresponding box on the reverse
side of this card.)
</TABLE>
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES
IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN
AND RETURN THIS PROXY.
SEE REVERSE
SIDE
<PAGE> 24
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / 2. To ratify the se- / / / / / / 3. To vote upon such
Directors lection of KPMG other business as
(see reverse) Peat Marwick as may properly come
independent before the meeting.
For, except vote withheld from the following nominee(s):
_________________________________________________________
THIS PROXY WHEN PROPERLY EXECUTED
WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED HOLDER OF
CLASS A COMMON SHARES. IF NO
DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR
PROPOSALS 1 AND 2.
Change / /
of
Address
Attend / /
Meeting
SIGNATURE(S)____________________________________________________ DATE_________
SIGNATURE(S)____________________________________________________ DATE_________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
</TABLE>
<PAGE> 25
THE TRANZONIC COMPANIES
CLASS B COMMON SHARE PROXY
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R The undersigned holder of Class B Common Shares hereby appoints
JAMES H. BERICK AND ROBERT S. REITMAN as Proxies, each with the
O full power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all
X the Class B Common Shares of The Tranzonic Companies held of record
by the undersigned on April 28, 1995, at the annual meeting
Y of shareholders to be held on June 12, 1995, and at any
adjournments thereof.
<TABLE>
<S> <C>
(change of address)
_________________________________________
_________________________________________
_________________________________________
_________________________________________
(If you have written in the above
space, please mark the
corresponding box on the reverse
side of this card.)
</TABLE>
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES
IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN
AND RETURN THIS PROXY.
SEE REVERSE
SIDE
<PAGE> 26
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
FOR AGAINST ABSTAIN
A. To ratify the se- / / / / / / B. To vote upon such
lection of KPMG other business as
Peat Marwick as may properly come
independent before the
auditors. meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED HOLDER OF CLASS B COMMON
SHARES. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR PROPOSAL A.
Change / /
of
Address
Attend / /
Meeting
SIGNATURE(S)______________________________________________________ DATE________
SIGNATURE(S)______________________________________________________ DATE________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
</TABLE>
