<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. 1)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/ / 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):
/ / $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
/X/ 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 Friday, June 28, 1996, at 10:30 A.M., local time, for
the purpose of considering and acting upon:
1. The election of three Class II Directors;
2. A proposal to convert the Class B Common Shares to Class A Common Shares
and to amend the Amended Articles of Incorporation to (i) eliminate the
Class B Common Shares, (ii) rename the Class A Common Shares as Common
Shares, and (iii) provide that the number of authorized Common Shares
shall be 12,000,000;
3. The selection of independent auditors for the fiscal year ending
February 28, 1997; and
4. 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 May 9, 1996 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
June ___ , 1996
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
June ___ , 1996
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 28,
1996 and any adjournments thereof.
Holders of Class A Common Shares and Class B Common Shares of record at the
close of business on May 9, 1996 (the record date) will be entitled to vote at
the Annual Meeting. At that date the Corporation had issued and outstanding
2,183,603 Class A Common Shares without par value and 1,313,585 Class B Common
Shares without par value. Only Class B Common Shares are entitled to vote in the
election of the Corporation's Class II 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 1,748,595 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 June ___ , 1996.
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 II Directors are to be elected for a term
expiring at the 1999 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 B Common Shares are entitled to vote separately
as a class for the election of three Class II Directors. At least 656,793 Class
B 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 A Common Shares are not entitled to vote in the election of
Class II Directors.
Unless a holder of Class B Common Shares requests that voting of his or her
proxy be withheld for the nominees for election as Class II Directors in
accordance with the instructions set forth on such proxy, it presently is
intended that Class B Common Shares represented by proxies solicited hereby will
be voted for the election as Class II 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 B 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 B Common Shares shall have the right to
cumulate their voting power for the election of Directors (see GENERAL
INFORMATION -- CUMULATIVE VOTING), the persons voting the Class B 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 B Common Shares, as
they see fit. Cumulative voting permits a holder of Class B Common Shares to
give one nominee a number of votes equal to the number of Directors to be
elected by the holders of Class B Common Shares multiplied by the number of
Shares the Shareholder may vote, or a holder of Class B 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 MAY 9, 1996 AND OTHER DIRECTORSHIPS HELD DIRECTOR
- ------------------------- ----------------- ------------------------------------------- ---------------
<S> <C> <C> <C>
NOMINEES TO SERVE UNTIL 1999 ANNUAL MEETING OF SHAREHOLDERS (CLASS II)
Joseph A. Campanella+++ 53 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+++ 53 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+++ 49 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.
DIRECTORS CONTINUING IN OFFICE UNTIL 1998 ANNUAL MEETING OF SHAREHOLDERS (CLASS I)
James H. Berick+++ 63 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.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FIRST
NAME OF NOMINEE AGE AS OF DURING PAST FIVE YEARS BECAME
OR DIRECTOR MAY 9, 1996 AND OTHER DIRECTORSHIPS HELD DIRECTOR
- ------------------------- ----------------- ------------------------------------------- ---------------
<S> <C> <C> <C>
Robert S. Reitman*() 62 Chief Executive Officer, Chairman of the 1960
Board of Directors and President of the
Corporation. Mr. Reitman is a Director of
Weirton Steel Corporation.
Sylvia K. Reitman 58 Investor, Cleveland, Ohio. 1989
DIRECTORS CONTINUING IN OFFICE UNTIL 1997 ANNUAL MEETING OF SHAREHOLDERS (CLASS III)
David J. Golden*() 63 Senior Vice President of the Corporation. 1958
Morton L. Reitman*() 59 Executive Vice President of the Corpora- 1973
tion.
James C. Spira 53 Managing Partner, Diamond Technology 1991
Partners (management consultants), since
November 1995. Previously Group Vice
President of the Corporation, from 1991 un-
til 1995.
<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 29, 1996.
The functions performed by the Compensation Committee of the Board of
Directors include making recommendations to the Board of Directors concerning
compensa-
4
<PAGE> 7
tion 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 29, 1996.
The Board of Directors does not have a Nominating Committee.
The Board of Directors held four meetings during the year ended February
29, 1996. All incumbent Directors attended 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 $850 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 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.
5
<PAGE> 8
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 1996 bonus was determined by weighting the
Corporation Components as follows: 45% of his 1996 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.
Stock options are awarded to the Corporation's executive officers in
accordance with plans approved by the Shareholders. During the fiscal year ended
February 29, 1996, options were available for grant only under the Corporation's
1995 Incentive
6
<PAGE> 9
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 29, 1996, 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 certain executive officers pursuant
to their employment agreements with the Corporation (one of which employment
agreements now is terminated). 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 six most highly
compensated executive officers (as measured by salary and bonus) whose aggregate
salary and bonus during the fiscal year ended February 29, 1996, 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, 1996 424,208 89,987 -- 2,500 137,156(3)
Chief Executive Officer, 1995 407,819 192,531 23,618 2,500 133,312
Chairman of the Board of 1994 388,419 100,000 -- 9,500 114,090
Directors and President
Morton L. Reitman, 1996 355,535 -- 53,250 2,400 31,109(3)
Executive Vice President 1995 298,893 122,800 -- 2,400 26,115
1994 276,677 55,000 -- 2,600 24,645
Richard J. Sims, 1996 217,062 169,305 -- 2,400 4,011(3)
Vice President 1995 200,712 116,000(4) -- 2,000 3,967
1994 185,654 70,480 -- 2,000 5,051
James C. Spira, 1996 181,042 -- -- 2,400 3,724(3)
Group Vice President(5) 1995 261,619 -- -- 2,200 5,352
1994 248,968 -- -- 2,400 7,176
James L. Glenn, 1996 159,538 11,130 25,000(6) 1,000 1,342(3)
Vice President(6) 1995 152,550 -- 23,888 1,000 66,718
1994 144,700 20,000 -- 1,000 842
Dennis H. Kelly, 1996 123,600 79,936 4,250 1,000 3,618(3)
Vice President 1995 117,415 59,430 -- 1,000 3,595
1994 109,904 33,100 -- 1,000 3,038
<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.
</TABLE>
8
<PAGE> 11
(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.
(3) Includes (a) Corporation payments of premiums for long-term disability
insurance: Messrs. Robert S. Reitman, Morton L. Reitman and Sims $743 each;
Mr. Spira $510; Mr. Glenn $588; and Mr. Kelly $456, (b) Corporation
contributions under the Defined Contribution Plan: Mr. Robert S. Reitman
$2,949; Mr. Morton L. Reitman $2,897; Mr. Spira $2,294; Mr. Sims $3,267; Mr.
Glenn $754; and Mr. Kelly $3,163, (c) Corporation payments of premiums for
life insurance: Mr. Morton L. Reitman $5,700, (d) amounts accrued under
deferred compensation agreements: Mr. Robert S. Reitman $132,084; and Mr.
Morton L. Reitman $21,768, and (e) Corporation payments of parking fees: Mr.
Robert S. Reitman $1,380 and Mr. Spira $920.
(4) The final calculation of Mr. Sim's fiscal 1995 bonus resulted in a higher
bonus than that reported in the Corporation's Proxy Statement dated May 12,
1995, which was calculated based upon figures available at that time.
(5) Mr. Spira's employment with the Corporation as an executive officer
terminated effective October 31, 1995. The 1996 compensation figures for Mr.
Spira reflect the period from March 1, 1995 through October 31, 1995.
(6) Mr. Glenn's employment with the Corporation terminated at the end of March,
1996 in connection with the Corporation's sale of its housewares division.
Mr. Glenn was paid $25,000 in respect of such termination.
STOCK OPTIONS
The following table contains information concerning the grant of stock
options during fiscal year 1996 to the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
------------------------------------------------------ REALIZABLE VALUE AT
% OF TOTAL ASSUMED ANNUAL
OPTIONS RATES OF STOCK
GRANTED TO EXERCISE PRICE APPRECIATION
OPTIONS EMPLOYEES IN OR BASE EXPIR- FOR OPTION TERM(3)
GRANTED(1) FISCAL PRICE ATION -------------------
NAME (#) YEAR(2) ($/SH) DATE 5% 10%
- ----------------------- ---------- ------------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Robert S. Reitman 2,500 6.54% $16.02 2/29/00 $11,075 $24,450
Morton L. Reitman 2,400 6.27% $14.56 2/28/05 $21,984 $55,680
James C. Spira 2,400 6.27% $14.56 2/28/05 $21,984 $55,680
Richard J. Sims 2,400 6.27% $14.56 2/28/05 $21,984 $55,680
James L. Glenn 1,000 2.61% $14.56 2/28/05 $ 9,160 $23,200
Dennis H. Kelly 1,000 2.61% $14.56 2/28/05 $ 9,160 $23,200
</TABLE>
9
<PAGE> 12
- ---------------
(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, 1998.
(2) Based upon an aggregate of 38,250 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 $14.56 per share to $23.72 and $37.76 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 1,313,585 Class B Common
Shares of the Corporation outstanding of approximately $12,032,439 or
$30,475,172, respectively, over the same period.
The following table contains information concerning stock option exercises
during fiscal year 1996 by the named executive officers and the value of their
unexercised options at February 29, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
YEAR-END (#) AT FISCAL YEAR-END ($)
---------------------- ----------------------
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
- --------------------- ---------------- ---------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Robert S. Reitman None None Class B: 4,000/14,500 Class B: 0/0
Morton L. Reitman Class A: 3,000 Class A: 36,000 Class A: 6,300/0 Class A: 31,225/0
Class B: 1,500 Class B: 17,250 Class B: 13,450/7,400 Class B: 19,363/0
James C. Spira None None Class B: 34,000/0 Class B: 0/0
Richard J. Sims None None Class B: 12,000/26,000 Class B: 0/0
James L. Glenn None None Class B: 3,200/3,000 Class B: 0/0
Dennis H. Kelly Class B: 2,000 Class B: 4,250 Class B: 5,200/3,000 Class B: 750/0
</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>
2/28/91 100 100 100 100
2/29/92 192 169 120 157
2/28/93 174 183 118 158
2/28/94 131 140 136 186
2/28/95 173 193 131 175
2/29/96 128 152 162 209
</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 1997, currently provides for an annual salary of $425,000, 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, currently provides for an annual salary of $303,000, 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 terminated October 31, 1995,
provided for an annual salary of $273,000. 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. 34,000 of the options became exercisable prior to the termination of Mr.
Spira's employment and Mr. Spira may exercise such options until February 29,
2000. Mr. Spira's remaining 36,000 unvested options expired on October 31, 1995.
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, currently provides for an annual salary of
$124,000 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 $34,800 to $68,400
12
<PAGE> 15
and $15,600 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.
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 May 9, 1996 (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, (2) each current Director and nominee for election as Director, as well as
all executive officers and Directors as a group and (3) all Shareholders, other
than Current Directors, nominees and executive officers, as a group. In
addition, the following tables set forth the aggregate voting power of each of
the aforementioned persons both prior to the proposed conversion of Class B
Common Shares into Class A Common Shares (see the proposal commencing on Page 19
of this proxy statement) and after giving effect to such conversion. 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.
13
<PAGE> 16
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 May 9, 1996 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
BENEFICIAL OWNERSHIP OF MORE THAN FIVE PERCENT OF
CLASS A COMMON SHARES AND CLASS B COMMON SHARES
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL PRO FORMA
OWNERSHIP BY CLASS AGGREGATE
----------------------------------------------------- VOTES
CLASS A CLASS B AGGREGATE ASSUMING
NAME AND ADDRESS OF COMMON PERCENT OF COMMON PERCENT OF VOTES CONVERSION
BENEFICIAL OWNER SHARES CLASS SHARES(1) CLASS /% (2) /%(3)
- ------------------------------- --------- ---------- --------- ---------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
David J. Golden 864,337 39.6% 435,668 33.2% 907,903.8 1,300,005
30195 Chagrin Boulevard (4)(5) (5)(6) /39.2%(4)(5)(6) /37.2%(4)(5)(6)
Pepper Pike, Ohio 44124
Robert S. Reitman 863,651 39.6% 443,295 33.7% 907,980.5 1,306,946
30195 Chagrin Boulevard (7) (7) /39.2%(7) /37.4%(7)
Pepper Pike, Ohio 44124
Sylvia K. Reitman 863,651 39.6% 443,295 33.7% 907,980.5 1,306,946
30195 Chagrin Boulevard (5)(8) (5)(8) /39.2%(5)(8) /37.4%(5)(8)
Pepper Pike, Ohio 44124
Estate of Miriam G. Golden 383,662 17.6% 191,831 14.6% 402,845.1 575,493
David J. Golden and (9) (9) /17.4%(9) /16.5%(9)
Sylvia K. Reitman,
Co-executors
30195 Chagrin Boulevard
Pepper Pike, Ohio 44124
Dimensional Fund 132,400 6.1% 69,150 5.3% 139,315.0 201,550
Advisors Inc. (10) (10) /6.0%(10) /5.8%(10)
1299 Ocean Avenue,
Suite 650
Santa Monica,
California 90401
Lazard Freres & Co. 108,618 5.0% 79,592 6.1% 116,577.2 188,210
One Rockefeller Plaza (11) (11) /5.0%(11) /5.4%(11)
New York, New York 10020
</TABLE>
- ---------------
(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.
(2) Aggregate Class A Common Share and Class B Common Share voting power,
expressed as a number of votes and as a percentage of total available votes
(based upon 2,183,603 Class A votes and 131,358.5 Class B votes,
aggregating 2,314,961.5 votes), of the respective named Shareholders. The
figures shown reflect one vote for each Class A Common Share and 1/10th of
one vote for each Class B Common Share held by each such named Shareholder.
The figures shown do not take into account that the Class A Common shares
and Class B Common Shares vote for separate classes of Directors and,
therefore, are not aggregated for that purpose.
15
<PAGE> 18
(3) Pro forma voting power, expressed as a number of votes and as a percentage
of total available votes (based upon an aggregate of 3,497,188 votes), of
the respective named Shareholders, after giving effect to the proposed
conversion of each Class B Common Share into one Class A Common Share, as
described in the proposal commencing on page 19 of this proxy statement.
The figures shown reflect one vote for each Common Share which would be
held by each such named Shareholder subsequent to the proposed conversion.
(4) Includes 7,700 Class A Common Shares held as trustee for the benefit of Mr.
Golden's son.
(5) Includes 383,662 Class A Common Shares or 191,831 Class B Common Shares, as
applicable, in respect of which David J. Golden and Sylvia K. Reitman share
voting and dispositive power as co-executors of the estate of Miriam G.
Golden; and 133,529 Class A Common Shares or 66,764 Class B Common Shares,
as applicable, in respect of which David J. 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.
(6) Includes 3,500 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 3,850 Class B Common Shares held as trustee for the benefit of Mr.
Golden's son.
(7) Includes 268,906 Class A Common Shares and 134,453 Class B Common Shares,
as applicable, owned by Sylvia K. Reitman, Mr. Reitman's wife, and the
Class A Common Shares and Class B Common Shares, as applicable, described
in Note (5), above, as to all of which shares Mr. Reitman disclaims
beneficial ownership.
(8) Includes 77,554 Class A Common Shares or 50,247 Class B Common Shares, as
applicable, owned by Robert S. Reitman, Mrs. Reitman's husband, as to which
shares Mrs. Reitman disclaims beneficial ownership.
(9) 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.
(10) 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.
(11) Information based solely upon Schedules 13G filed by such shareholder with
the Securities and Exchange Commission in February, 1995, in respect of
Class A Common Shares, and February 1996, in respect of Class B Common
Shares.
16
<PAGE> 19
BENEFICIAL OWNERSHIP OF EXECUTIVE OFFICERS, DIRECTORS AND NOMINEES
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP BY CLASS PRO FORMA
------------------------------------------------------- AGGREGATE
CLASS B VOTES
CLASS A COMMON AGGREGATE ASSUMING
NAME OF DIRECTOR COMMON PERCENT OF SHARES PERCENT OF VOTES CONVERSION
OR NOMINEE SHARES CLASS (1)(2) CLASS(1) /%(3) /%(4)
- --------------------------- ------- ---------- ------- ---------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
James H. Berick 600 (5) 8,410 (5) 1,441.0 9,010
/(5) /(5)
Joseph A. Campanella 500 (5) 6,310 (5) 1,131.0 6,810
/(5) /(5)
David J. Golden 864,337(6)(7) 39.6% 435,668(6)(7) 33.2% 907,903.8 1,300,005
/39.2%(6)(7) /37.2%(6)(7)
Robert S. Reitman 863,651(8) 39.6% 443,295(8) 33.7% 907,980.5 1,306,946
/39.2%(8) /37.4%(8)
Morton L. Reitman 47,564 (9)(10) 2.2$ 34,646(10) 2.6% 51,028.6 82,210
/2.2%(9)(10) /2.4%(9)(10)
Sylvia K. Reitman 863,651(6)(11) 39.6% 443,295(6)(11) 33.7% 907,980.5 1,306,946
/39.2%(6)(11) /37.4%(6)(11)
Thomas S. Robertson 0 0% 6,110 (5) 611.0 6,110
/(5) /(5)
James C. Spira 4,800 (5) 36,400 2.8% 8,440.0 41,200
/(5) /1.2%
Steven W. Percy 0 0% 2,955 (5) 295.5 2,955
/(5) /(5)
Richard J. Sims 1,520 (5) 20,760 1.6% 3,596.0 22,280
/(5) /(5)
Dennis H. Kelly 0 0% 9,200 (5) 920.0 9,200
/(5) /(5)
James L. Glenn 0 0% 4,200 (5) 420.0 4,200
/(5) /(5)
Executive Officers, 1,278,131 58.5% 758,634 57.8% 1,353,994.4 2,036,765
Directors and /58.5% /58.2%
Nominees as a Group (14
persons)
All Shareholders other than 905,472 41.5% 554,951 42.2% 960,967.1 1,460,423
Executive Officers, /41.5% /41.8%
Directors and Nominees as
a Group
</TABLE>
17
<PAGE> 20
- ---------------
(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 Mr. Spira under his employment
agreement which was terminated and Mr. Sims, under his existing employment
agreement): Robert S. Reitman -- 13,500; Morton L. Reitman -- 16,050; David
J. Golden -- 3,500; James C. Spira -- 34,000; Richard J. Sims -- 20,000;
Dennis H. Kelly -- 6,200; and all executive officers and Directors as a
group -- 102,050.
(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) Aggregate Class A Common Share and Class B Common Share voting power,
expressed as a number of votes and as a percentage of total available votes
(based upon 2,183,603 Class A votes and 131,358.5 Class B votes,
aggregating 2,314,961.5 votes), of the respective named Shareholders. The
figures shown reflect one vote for each Class A Common Share and 1/10th of
one vote for each Class B Common Share held by each such named Shareholder.
The figures shown do not take into account that the Class A Common Shares
and Class B Common Shares vote for separate classes of Directors and,
therefore, are not aggregated for that purpose.
(4) Pro forma voting power, expressed as a number of votes and as a percentage
of total available votes (based upon an aggregate of 3,497,188 votes), of
the respective named Shareholders, after giving effect to the proposed
conversion of each Class B Common Share into one Class A Common Share, as
described in the proposal commencing on page 19 of this proxy statement.
The figures shown reflect one vote for each Common Share which would be
held by each such named Shareholder subsequent to the proposed conversion.
(5) Less than 1%.
(6) Includes 383,662 Class A Common Shares or 191,831 Class B Common Shares, as
applicable, in respect of which David J. Golden and Sylvia K. Reitman share
voting and dispositive power as co-executors of the estate of Miriam G.
Golden; and 133,529 Class A Common Shares or 66,764 Class B Common Shares,
as applicable, in respect of which David J. 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.
(7) Includes 7,700 Class A Common Shares and 3,850 Class B Common Shares, as
applicable, held as trustee for the benefit of Mr. Golden's son.
(8) Includes 268,906 Class A Common Shares and 134,453 Class B Common Shares,
as applicable, owned by Sylvia K. Reitman, Mr. Reitman's wife, and the
Class A Common Shares and Class B Common Shares, as applicable, described
in note (6), above, as to all of which shares Mr. Reitman disclaims
beneficial ownership.
(9) Includes the 6,300 Class A Common Shares, which are not owned, but can be
purchased within 60 days upon the exercise of options granted under the
Corporation's 1981 Plan by Morton L. Reitman.
(10) Includes 1,820 Class A Common Shares or 910 Class B Common Shares, as
applicable, held as custodian for the benefit of Morton L. Reitman's adult
child. Also includes 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.
(11) Includes 77,554 Class A Common Shares or 50,247 Class B Common Shares, as
applicable, owned by Robert S. Reitman, Mrs. Reitman's husband, as to all
of which shares Mrs. Reitman disclaims beneficial ownership.
18
<PAGE> 21
PROPOSAL: CONVERSION OF CLASS B COMMON SHARES
TO CLASS A COMMON SHARES, AND AMENDMENT TO THE
AMENDED ARTICLES OF INCORPORATION TO ELIMINATE
THE CLASS B COMMON SHARES, REDESIGNATE THE CLASS A
COMMON SHARES AS "COMMON SHARES", AND PROVIDE THAT
THE NUMBER OF AUTHORIZED COMMON SHARES SHALL BE 12,000,000
INTRODUCTION
At its meeting held April 29, 1996, the Board of Directors of the
Corporation approved, and determined to submit to the shareholders for their
approval, (i) the conversion of Class B Common Shares to Class A Common Shares
(the "Conversion") and (ii) an amendment (referred to in this Section of the
proxy statement as the "Amendment") to Article Fourth of the Corporation's
Amended Articles of Incorporation to (a) eliminate the Class B Common Shares,
(b) redesignate the Class A Common Shares as "Common Shares" (the "Common
Shares"), and (c) provide that the number of authorized Common Shares shall be
12,000,000.
Following shareholder approval of the Conversion and the Amendment and
approval for listing of the additional Common Shares to be issued upon the
Conversion on the American Stock Exchange, the Class B Common Shares outstanding
on June ___ , 1996 shall be converted on June 28, 1996 to Class A Common
Shares. Upon the Conversion, each Class B Common Share outstanding will be
converted to one Class A Common Share (the "Converted Shares") and all Class A
Common Shares (including the Converted Shares) will be redesignated as "Common
Shares". The affirmative vote of holders of a majority of the outstanding Class
A Common Shares and Class B Common Shares of the Corporation entitled to vote at
the meeting, voting as separate classes, is required to adopt this proposal.
The foregoing items as well as other matters in respect of the Conversion
and the Amendment are discussed in greater detail below.
PURPOSE
The Class B Common Shares were authorized in 1988 primarily to enable the
Corporation to raise capital for acquisitions, expansion or general corporate
purposes through the issuance of Class B Common Shares or debt securities
convertible into such shares. Since the authorization of the Class B Common
Shares, there has existed no need to utilize such shares for capital raising
purposes and the Board of Directors presently does not anticipate such a need in
the future. Accordingly, the Board of
19
<PAGE> 22
Directors believes that it would be in the best interests of the Corporation to
convert the outstanding Class B Common Shares into Class A Common Shares to
simplify the Corporation's capital stock structure and potentially to increase
the liquidity in the market for the holders of the Class A Common Shares and
Class B Common Shares. After the Conversion of the Class B Common Shares and the
redesignation of the Class A Common Shares, the Corporation's capital stock will
consist only of two classes, Common Shares without par value and Serial
Preferred Shares without par value. No Serial Preferred Shares are outstanding.
The Amendment will effect the redesignation of the Class A Common Shares as
"Common Shares" and provide that the number of authorized Common Shares shall be
12,000,000, the aggregate number of presently authorized Class A Common Shares
and Class B Common Shares.
DESCRIPTION OF THE REDESIGNATED COMMON SHARES
The express terms of the Common Shares shall be identical in all respects
to the Class A Common Shares, other than in respect of the election of Directors
and there will be no right to convert the Common Shares to shares of any other
class, and are set forth in full in the Amendment, the text of which is attached
hereto as Exhibit A. The following summary is qualified in its entirety by
reference to Exhibit A.
1. Voting. Subsequent to the Conversion, each Common Share will entitle the
holder to one vote on all matters submitted to a vote of shareholders, including
the election of Directors in each of the three existing classes. Presently, each
Class A Common Share entitles the holder to one vote and each Class B Common
Share entitles the holder to one-tenth of one vote. The Class A Common Shares
and the Class B Common Shares presently are voted together as a single class,
except that only the holders of Class A Common Shares are entitled to vote for
Directors in Classes I and III and only the holders of Class B Common Shares are
entitled to vote for Directors in Class II (the Class subject to election at
this Annual Meeting). Notwithstanding the Conversion, the Directors in Class II
elected at this Annual Meeting by the holders of Class B Common Shares will
serve their designated term and until their respective successors are duly
elected and qualified.
Under Ohio law, the vote of holders of at least a majority of the
outstanding Common Shares will be required for any amendment to the Articles
which would change the express terms of such shares in any manner substantially
prejudicial to the holders thereof.
2. Dividends. The Board of Directors intends to pay dividends on the Common
Shares, following shareholder approval of the Conversion, from funds legally
availa-
20
<PAGE> 23
ble therefor. The Board of Directors anticipates that the aggregate amount of
such dividends to the holders of Common Shares will increase over the combined
aggregate dividends paid in recent quarters to the holders of Class A Common
Shares and Class B Common Shares. However, the Board of Directors anticipates
that initially such dividend will be $.07 per quarter, which is less than the
dividend currently paid to holders of Class B Common Shares. The Corporation has
paid the following cash dividends in the first fiscal quarter of 1997 and in its
last two fiscal years ended February 29 and 28, respectively:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
QUARTER 1997 1997 1996 1996 1995 1995
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
1 $.050 $.090 $.045 $.085 $.045 $.085
2 -- -- $.050 $.090 $.045 $.085
3 -- -- $.050 $.090 $.045 $.085
4 -- -- $.050 $.090 $.045 $.085
</TABLE>
No assurance can be given as to the payment of any dividends in the future or
the amounts thereof. The Corporation is not in arrears in dividends in respect
of either Class A Common Shares or Class B Common Shares.
3. Transferability. The Common Shares will be transferrable freely and will
be listed for trading under the symbol "TNZ", on the American Stock Exchange, on
which Exchange the Class A Common Shares and Class B Common Shares currently are
listed. However, no assurance can be given as to the price at which the Common
Shares will trade.
4. Other. The Class A Common Shares and Class B Common Shares do not, and
the Common Shares will not, carry any pre-emptive rights enabling a holder to
subscribe or receive shares of the Corporation. The Board of Directors will
continue to possess the power to issue authorized but unissued Common Shares
without further shareholder action. The Shareholder's equity of each holder of
Class A Common Shares and of Class B Common Shares will not be diluted or
otherwise affected by reason of the Conversion.
DISSENTING SHAREHOLDERS
Any holder of Class B Common Shares who does not vote any such shares in
favor of this proposal is entitled to make written demand for the payment to
such shareholder of the fair cash value of its Class B Common Shares not so
voted. The written demand must be delivered by such shareholder to the
Corporation not later than July 8, 1996 and must contain such shareholder's
address, the number of Class B
21
<PAGE> 24
Common Shares not voted in favor of this proposal, and the amount claimed by
such shareholder as the fair cash value of such shares. In the event any such
shareholder does not make the aforementioned written demand in accordance with
this paragraph and in accordance with Section 1701.85 of the Ohio Revised Code,
such shareholder's right to demand payment of the fair cash value of its Class B
Common Shares not voted in favor of this proposal will terminate.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL CONCERNING THE
CONVERSION OF CLASS B COMMON SHARES INTO CLASS A COMMON SHARES AND THE AMENDMENT
TO THE AMENDED ARTICLES OF INCORPORATION TO ELIMINATE THE CLASS B COMMON SHARES,
REDESIGNATE THE CLASS A COMMON SHARES AS "COMMON SHARES" AND PROVIDE THAT THE
AUTHORIZED COMMON SHARES SHALL BE 12,000,000.
SELECTION OF AUDITORS
The Board of Directors of the Corporation has recommended that KPMG Peat
Marwick LLP be selected as independent auditors to examine the books, records
and accounts of the Corporation and its subsidiaries for the fiscal year ending
February 28, 1997. 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 LLP were the
independent auditors of the Corporation for the fiscal year ended February 29,
1996 and are considered by the Board of Directors to be well qualified.
Representatives of KPMG Peat Marwick LLP 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.
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. James C.
Spira reported the expiration of stock options in October 1995, subsequent to
the due date for such reporting.
22
<PAGE> 25
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 B 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 B Common Shares shall have the right to cumulate such voting
power as he or she possesses at such election.
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 B 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 proposal to convert the Class B Common Shares and amend the Amended Articles
of Incorporation and 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 16, 1997, it must be received by the Corporation for
consideration for
23
<PAGE> 26
inclusion in the Corporation's Proxy Statement and form of proxy relating to
that meeting on or before January 12, 1997.
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.
FINANCIAL INFORMATION
The following financial statements of the Corporation and the Independent
Auditors' Report of KPMG Peat Marwick LLP are set forth on pages [18 through 27]
of the Corporation's 1996 Annual Report to Shareholders and are incorporated
herein by reference:
Consolidated Balance Sheets at February 29, 1996 and February 28, 1995
Consolidated Statements of Operations for the years ended February 29,
1996 and February 28, 1995 and 1994
Consolidated Statements of Shareholders' Equity for the years ended
February 29, 1996 and February 28, 1995 and 1994
Consolidated Statements of Cash Flows for the years ended February 29,
1996 and February 28, 1995 and 1994.
Notes to Consolidated Financial Statements for the years ended
February 29, 1996 and February 28, 1995 and 1994.
24
<PAGE> 27
Management's Discussion and Analysis of Financial Condition and Results of
Operations of the Corporation is set forth on pages 14 through 17 of the
Corporation's 1996 Annual Report to Shareholders and is incorporated herein by
reference.
By order of the Board of Directors
JAMES H. BERICK
June ___ , 1996 Secretary
25
<PAGE> 28
EXHIBIT A
AMENDMENT AND RESTATEMENT OF ARTICLE "FOURTH" OF THE
AMENDED ARTICLES OF INCORPORATION
FOURTH: The number of shares which the Corporation is authorized to have
outstanding is 12,200,000 consisting of (i) 12,000,000 Common Shares without par
value (collectively, the "Common Shares" and individually, a "Common Share") and
(ii) 200,000 Serial Preferred Shares without par value ("Serial Preferred
Shares") .
The shares of such classes shall have the following express terms:
DIVISION A
EXPRESS TERMS OF COMMON SHARES
The Common Shares shall be subject to the express terms of the Serial
Preferred Shares and any series thereof. Each Common Share shall be equal to
every other Common Share. Each holder of Common Shares shall be entitled to one
vote for each Common Share so held upon all matters presented to Shareholders.
The Common Shares will not carry any pre-emptive rights enabling a holder to
subscribe or receive shares of the Corporation. The Board of Directors shall
possess the power to issue authorized but unissued Common Shares without further
shareholder action.
DIVISION B
EXPRESS TERMS OF SERIAL PREFERRED SHARES
Section 1. Serial Preferred Shares may be issued from time to time in one
or more series. All Serial Preferred Shares shall be of equal rank and shall be
identical, except in respect of the matters that may be fixed by the Board of
Directors as hereinafter provided, and each share of each series shall be
identical with all other shares of such series, except as to the date from which
dividends are cumulative.
Subject to the provisions of Section 2 to 7, inclusive, of this Division B,
which provisions shall apply to all Serial Preferred Shares, the Board of
Directors hereby is authorized to cause Serial Preferred Shares to be issued in
one or more series and with respect to each such series prior to the issuance
thereof to fix:
(a) The designation of the series, which may be by distinguishing
number, letter or title.
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<PAGE> 29
(b) The number of shares of the series, which number the Board of
Directors may (except where otherwise provided in the creation of the
series) increase or decrease (but not below the number of shares thereof
then outstanding).
(c) The annual dividend rate of the series.
(d) The dates at which dividends, if declared, shall be payable, and
the dates from which dividends shall be cumulative.
(e) The redemption rights and price or prices, if any, for shares of
the series.
(f) The terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series.
(g) The amounts payable on shares of the series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation.
(h) Whether the shares of the series shall be convertible into Common
Shares, and, if so, the conversion price or prices, any adjustments
thereof, and all other terms and conditions upon which such conversion may
be made.
(i) Restrictions (in addition to those set forth in Section 6(b) of
this Division) on the issuance of shares of the same series or of any other
class or series .
The Board of Directors is authorized to adopt from time to time amendments
to the Amended Articles of Incorporation fixing, with respect to each such
series, the matters described in clauses (a) to (i) , inclusive, of this Section
1.
Section 2. The holders of Serial Preferred Shares of each series, in
preference to the holders of Common Shares and of any other class of shares
ranking junior to the Serial Preferred Shares, shall be entitled to receive out
of any funds legally available and when and as declared by the Board of
Directors, dividends in cash at the rate for such series fixed in accordance
with the provisions of Section 1 of this Division B and no more, payable
quarterly on the dates fixed for such series. Such dividends shall be
cumulative, in the case of shares of each particular series, from and after the
date or dates fixed with respect to such series. No dividends may be paid upon
or declared or set apart for any of the Serial Preferred Shares for any
quarterly dividend period unless at the same time a like proportionate dividend
for the same quarterly dividend
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<PAGE> 30
period, ratably in proportion to the respective annual dividend rates fixed
therefor, shall be paid upon or declared or set apart for all Serial Preferred
Shares of all series then issued and outstanding and entitled to receive such
dividend.
Section 3. In no event so long as any Serial Preferred Shares shall be
outstanding shall any dividends, except a dividend payable in Common Shares or
other shares ranking junior to the Serial Preferred Shares be paid or declared
or any distribution be made except as aforesaid on the Common Shares or any
other shares ranking junior to the Serial Preferred Shares, nor shall any Common
Shares or any other shares ranking junior to the Serial Preferred Shares be
purchased, retired or otherwise acquired by the Corporation (except out of the
proceeds of the sale of Common Shares or other shares ranking junior to the
Serial Preferred Shares received by the Corporation on or subsequent to the date
on which the Serial Preferred Shares authorized herein are first issued):
(a) Unless all accrued and unpaid dividends on Serial Preferred
Shares, including the full dividends for the current dividend period, shall
have been declared and paid or a sum sufficient for payment thereof set
apart; and
(b) Unless there shall be no arrearages with respect to the redemption
of Serial Preferred Shares of any series from any sinking fund provided for
shares of such series in accordance with the provisions of Section 1 of
this Division B.
Section 4.
(a) Subject to the express terms of each series and to the provisions
of Section 6(b) (iii) of this Division B, the Corporation may from time to
time redeem all or any part of the Serial Preferred Shares of any series at
the time outstanding (i) at the option of the Board of Directors at the
applicable redemption price for such series fixed in accordance with the
provisions of Section 1 of this Division B, or (ii) in fulfillment of the
requirements of any sinking fund provided for shares of such series at the
applicable sinking fund redemption price, fixed in accordance with the
provisions of Section 1 of this Division B, together in each case with an
amount equal to all dividends accrued and unpaid thereon (whether or not
such dividends shall have been earned or declared) to the redemption date.
(b) Notice of every such redemption shall be mailed, postage prepaid
to the holders of record of the Serial Preferred Shares to be redeemed at
their respective addresses then appearing on the books of the Corporation,
not less than 30 days nor more than 60 days prior to the date fixed for
such redemption. At any time
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<PAGE> 31
before or after notice has been given as above provided, the Corporation
may deposit the aggregate redemption price of the Serial Preferred Shares
to be redeemed with any bank or trust company in Cleveland, Ohio or New
York, New York, having capital and surplus of more than $5,000,000, named
in such notice, and direct that such deposited amount be paid to the
respective holders of the Serial Preferred Shares so to be redeemed, in
amounts equal to the redemption price of all Serial Preferred Shares so to
be redeemed, on surrender of the share certificate or certificates held by
such holders. Upon the making of such deposit such holders shall cease to
be shareholders with respect to such shares, and after such notice shall
have been given and such deposit shall have been made such holders shall
have no interest in or claim against the Corporation with respect to such
shares except only to receive such money from such bank or trust company
without interest or the right to exercise, before the redemption date, any
unexpired privileges conversion. In case less than all of the outstanding
Serial Preferred Shares are to be redeemed, the Corporation shall select
pro rata or by lot the shares so to be redeemed in such manner as shall be
prescribed by its Board of Directors. If the holders of Serial Preferred
Shares which shall have been called for redemption shall not, within six
years after such deposit, claim the amount deposited for the redemption
thereof, any such bank or trust company shall, upon demand, pay over to the
Corporation such unclaimed amounts and thereupon such bank or trust company
and the Corporation shall be relieved of all responsibility in respect
thereof and to such holders.
(c) Any Serial Preferred Shares which are redeemed by the Corporation
pursuant to the provisions of this Section 4 and any Serial Preferred
Shares which are purchased and delivered in satisfaction of any sinking
fund requirements provided for shares of such series and any Serial
Preferred Shares which are converted in accordance with the express terms
thereof shall be cancelled and not reissued. Any Serial Preferred Shares
otherwise acquired by the Corporation shall resume the status of authorized
and unissued Serial Preferred Shares without serial designation.
Section 5.
(a) The holders of Serial Preferred Shares of any series shall, in
case of liquidation, dissolution or winding up of the affairs of the
Corporation, be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be paid or
distributed among the holders of the Common Shares or any other shares
ranking junior to the Serial Preferred Shares, the amounts
A-4
<PAGE> 32
fixed with respect to shares of such series in accordance with Section I of
this Division B, plus an amount equal to all dividends accrued and unpaid
thereon (whether or not such dividends shall have been earned or declared)
to the date of payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation. In case the
net assets of the Corporation legally available therefor are insufficient
to permit the payment upon all outstanding Serial Preferred Shares and any
shares ranking on a parity therewith of the full preferential amount to
which they are respectively entitled, then such net assets shall be
distributed ratably upon outstanding Serial Preferred Shares and any shares
ranking on a parity therewith in proportion to the full preferential amount
to which each such share is entitled.
After payment to holders of Serial Preferred Shares of the full
preferential amounts as aforesaid, holders of Serial Preferred Shares as
such shall have no right or claim to any of the remaining assets of the
Corporation.
(b) The merger or consolidation of the Corporation into or with any
other corporation, or the merger of any other corporation into it, or the
sale, lease or conveyance of all or substantially all the property or
business of the Corporation, shall not be deemed to be a dissolution,
liquidation or winding up for the purposes of this Section 5.
Section 6.
(a) The holders of Serial Preferred Shares shall be entitled to one
vote for each share; and, except as otherwise provided herein or required
by law, the holders of Serial Preferred Shares and the holders of Common
Shares shall vote together as one class on all matters. No adjustment of
the voting rights of holders of Serial Preferred Shares shall be made for
an increase or decrease in the number of Common Shares authorized or issued
or for share splits or combinations of the Common Shares or for share
dividends on any class of shares payable solely in Common Shares.
If, and so often as, the Corporation shall be in default in dividends
in an amount equivalent to six full quarterly dividends on any series of
Serial Preferred Shares at the time outstanding, whether or not earned or
declared, the holders of Serial Preferred Shares of all series, voting
separately as a class and in addition to all other rights to vote for
Directors, shall be entitled to elect, as herein provided, two members of
the Board of Directors of the Corporation; provided, however, that the
holders of Serial Preferred Shares shall not have or exercise such special
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<PAGE> 33
class voting rights except at meetings of the shareholders for the election
of Directors at which the holders of not less than 45% of the outstanding
Serial Preferred Shares of all series then outstanding are present in
person or by proxy; and provided further that the special class voting
rights provided for herein when the same shall have become vested shall
remain so vested until all accrued and unpaid dividends on the Serial
Preferred Shares of all series then outstanding shall have been paid,
whereupon the holders of Serial Preferred Shares shall be divested of their
special class voting rights in respect of subsequent elections of
Directors, subject to the revesting of such special class voting rights in
the event hereinabove specified in this paragraph.
In the event of default entitling the holders of Serial Preferred
Shares to elect two Directors as above specified, a special meeting of the
shareholders for the purpose of electing such Directors shall be called by
the Secretary of the Corporation upon written request of, or may be called
by, the holders of record of at least 15% of the Serial Preferred Shares of
all series at the time outstanding, and notice thereof shall be given in
the same manner as that required for the annual meeting of shareholders;
provided, however, that the Corporation shall not be required to call such
special meeting if the annual meeting of shareholders shall be held within
90 days after the date of receipt of the foregoing written request from the
holders of Serial Preferred Shares. At any meeting at which the holders of
Serial Preferred Shares shall be entitled to elect Directors, the holders
of 45% of the then outstanding Serial Preferred Shares of all series,
present in person or by proxy, shall be sufficient to constitute a quorum,
and the vote of the holders of a majority of such shares so present at any
such meeting at which there shall be such a quorum shall be sufficient to
elect the members of the Board of Directors which the holders of Serial
Preferred Shares are entitled to elect as hereinabove provided.
The two Directors who may be elected by the holders of Serial
Preferred Shares pursuant to the foregoing provisions shall be in addition
to any other Directors then in office or proposed to be elected otherwise
than pursuant to such provisions, and nothing in such provisions shall
prevent any change otherwise permitted in the total number of Directors of
the Corporation or require the resignation of any Director elected
otherwise than pursuant to such provisions.
(b) The affirmative vote of the holders of at least a majority of the
Serial Preferred Shares at the time outstanding, given in person or by
proxy at a meeting called for the purpose at which the holders of Serial
Preferred Shares shall vote
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<PAGE> 34
separately as a class, shall be necessary to effect any one or more of the
following (but so far as the holders of Serial Preferred Shares are
concerned, such action may be effected with such vote) :
(i) Any amendment, alteration or repeal of any of the provisions
of the Amended Articles of Incorporation or of the Code of Regulations
of the Corporation which affects adversely the voting powers, rights or
preferences of the holders of Serial Preferred Shares; provided,
however, that, for the purpose of this clause (i) only, neither the
amendment of the Amended Articles of Incorporation so as to authorize or
create, or to increase the authorized or outstanding amount of, Serial
Preferred Shares or of any shares of any class ranking on a parity with
or junior to the Serial Preferred Shares, nor the amendment of the
provisions of the Code of Regulations so as to increase the number of
Directors of the Corporation, shall be deemed to affect adversely the
voting powers, rights or preferences of the holders of Serial Preferred
Shares; and provided further, that if such amendment, alteration or
repeal affects adversely the rights or preferences of one or more but
not all series of Serial Preferred Shares at the time outstanding, only
the vote of the holders of at least a majority of the number of the
shares at the time outstanding of the series so affected shall be
required;
(ii) The authorization or creation of, or the increase in the
authorized amount of, any shares of any class, or any security
convertible into shares of any class, ranking prior to the Serial
Preferred Shares;
(iii) The purchase or redemption (for sinking fund purposes or
otherwise) of less than all of the Serial Preferred Shares then
outstanding except in accordance with a share purchase offer made to all
holders of record of Serial Preferred Shares, unless all dividends upon
all Serial Preferred Shares then outstanding for all previous quarterly
dividend periods shall have been declared and paid or funds therefor set
apart and all accrued sinking fund obligations applicable thereto shall
have been complied with;
(iv) The consolidation of the Corporation with or its merger into
any other corporation unless the corporation resulting from such
consolidation or merger will have after such consolidation or merger no
class of shares either authorized or outstanding ranking prior to or on
a parity with the Serial Preferred Shares except the same number of
shares ranking prior to or on a parity with the Serial Preferred Shares
and having the same rights and preferences as the shares of the
Corporation authorized and outstanding
A-7
<PAGE> 35
immediately preceding such consolidation or merger, and each holder of
Serial Preferred Shares immediately preceding such consolidation or
merger shall receive the same number of shares, with the same rights and
preferences, of the resulting corporation; or
(v) The authorization of any shares ranking on a parity with the
Serial Preferred Shares or an increase in the authorized number of
Serial Preferred Shares.
Section 7. For the purpose of this Division B:
Whenever reference is made to shares "ranking prior to the Serial
Preferred Shares" or "on a parity with the Serial Preferred Shares", such
reference shall mean and include all shares of the Corporation in respect
of which the rights of the holders thereof as to the payment of dividends
or as to distributions in the event of a voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation
are given preference over, or rank on an equality with (as the case may be)
the rights of the holders of Serial Preferred Shares; and whenever
reference is made to shares "ranking junior to the Serial Preferred
Shares", such reference shall mean and include all shares of the
Corporation in respect of which the rights of the holders thereof as to the
payment of dividends and as to distributions in the event of a voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation are junior and subordinate to the rights of the holders of
Serial Preferred Shares.
A-8
<PAGE> 36
THE TRANZONIC COMPANIES
CLASS A COMMON SHARE PROXY
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R
O The undersigned holder of Class A Common Shares hereby appoints
X JAMES H. BERICK AND ROBERT S. REITMAN as Proxies, each with the
Y full power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all the Class A Common
Shares of The Tranzonic Companies held of record by the undersigned
on May 9, 1996, at the annual meeting of shareholders to be held on
June 28, 1996, and at any adjournments thereof.
<TABLE>
<S> <C>
Conversion of the Class B Common Shares to Class A Common (change of address)
Shares and Amendment of the Amended Articles of ___________________________________
Incorporation to (i) eliminate the Class B Common Shares, ___________________________________
(ii) rename the Class A Common Shares as Common Shares, and ___________________________________
(iii) provide that the number of authorized Common Shares ___________________________________
shall be 12,000,000. (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
- --------------------------------------------------------------------------------
DETACH CARD
Dear Shareholder,
Included in this year's proxy statement, is a proposal by the
Corporation's Board of Directors to consolidate the Corporation's
two classes of Common Shares. The recommendation has been made
for the purpose of simplifying the Corporation's capital stock
structure and potentially increasing the liquidity in the market
for all Tranzonic shareholders.
We urge you to read thoroughly the entire proxy statement, but
call your particular attention to the information beginning on
page 19 concerning the purpose of the consolidation proposal and its
impact upon your dividends.
As always, we appreciate your interest in and support of the
Corporation.
Robert S. Reitman
Chairman, President and Chief Executive Officer
<PAGE> 37
<TABLE>
<C> <S> <C>
/X/ PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
<CAPTION>
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C> <C>
1. To Convert / / / / / / 2. To ratify the / / / / / /
the Class B selection of
Common KPMG Peat
Shares and Marwick LLP
Amend the Amended Articles of Incorp- as independent
oration (see reverse) auditors.
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>
DETACH CARD
<PAGE> 38
THE TRANZONIC COMPANIES
CLASS B COMMON SHARE PROXY
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R
O The undersigned holder of Class B Common Shares hereby appoints
X JAMES H. BERICK AND ROBERT S. REITMAN as Proxies, each with the
Y full power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all the Class B Common
Shares of The Tranzonic Companies held of record by the undersigned
on May 9, 1996, at the annual meeting of shareholders to be held on
June 28, 1996, and at any adjournments thereof.
<TABLE>
<S> <C>
1. Election of Directors. (change of address)
Joseph A. Campanella, Thomas S. Robertson _____________________________________
and Steven W. Percy _____________________________________
_____________________________________
2. Conversion of the Class B Common Shares to Class A _____________________________________
Common Shares and Amendment of the Amended Articles (If you have written in the
of Incorporation to (i) eliminate the Class B Common above space, please mark the
Shares, (ii) rename the Class A Common Shares as corresponding box on the
Common Shares and (iii) provide that the number of reverse side of this card.)
authorized Common Shares shall be 12,000,000.
</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
- --------------------------------------------------------------------------------
DETACH CARD
Dear Shareholder,
Included in this year's proxy statement, is a proposal by the
Corporation's Board of Directors to consolidate the Corporation's
two classes of Common Shares. The recommendation has been made
for the purpose of simplifying the Corporation's capital stock
structure and potentially increasing the liquidity in the market
for all Tranzonic shareholders.
We urge you to read thoroughly the entire proxy statement, but
call your particular attention to the information beginning on
page 19 concerning the purpose of the consolidation proposal, its
impact upon your dividends, and the information on pages 20 and 21
under the caption "Dissenting Shareholders" concerning your
rights should the proposal be approved contrary to your wishes.
You also have a right of cumulative voting in respect of election of
Directors as set forth on page 23 of the proxy statement under
the caption "Cumulative Voting."
As always, we appreciate your interest in and support of the
Corporation.
Robert S. Reitman
Chairman, President and Chief Executive Officer
<PAGE> 39
<TABLE>
<C> <S> <C>
/X/ PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / 2. To Convert the / / / / / /
Directors Class B Common
(see reverse) Shares and Amend
the Amended
For, except vote withheld from the following nominee(s): Articles of
_______________________________________________________ Incorporation
(see reverse)
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
3. To ratify the / / / / / /
selection of
KPMG Peat
Marwick LLP
as independent auditors.
<S> <C> <C>
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 PROPOSALS 1, 2 AND 3.
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>
DETACH CARD
