<PAGE>
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[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 (S) 240.14a-11(c) or (S) 240.14a-12
COMMERCIAL INTERTECH CORP.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] $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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a) (2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[COMMERCIAL INTERTECH CORP. LOGO/LETTERHEAD]
TO OUR SHAREHOLDERS:
A Special Meeting of Shareholders will be held at [ ] A.M. on August
30, 1996, at [ ], Youngstown, Ohio. At the Special
Meeting, we will consider and vote on the question of whether or not to
authorize, in accordance with Section 1701.831 of the Ohio Revised Code, the
acquisition by United Dominion Industries Limited, a Canadian corporation
("United Dominion"), and Opus Acquisition Corporation, a Delaware corporation
("OAC") and an indirect wholly owned subsidiary of United Dominion (or one or
more subsidiaries of United Dominion), of common shares, par value $1.00 per
share (the "Common Shares"), of the Company that, when added to all other
shares of the Company in respect of which United Dominion and OAC may exercise
or direct the exercise of voting power in the election of the Company's
directors, would entitle United Dominion and OAC to exercise at least a
majority of such voting power. The acquisition, if so authorized by the
shareholders, would be carried out by means of a tender offer made by OAC to
purchase all outstanding Common Shares, $1.00 par value per share, of the
Company and associated preferred share rights (the "Rights"; the Rights and
the Common Shares are referred to, collectively, as the "Shares") at a price
of $30.00 per Share, net to the seller in cash, without interest thereon (the
"Offer").
The Board of Directors has unanimously concluded that the Offer is
inadequate and not in the best interests of the Company, its shareholders,
employees, customers, suppliers, labor organizations, the communities in which
the Company does business and its other constituencies, and does not
adequately reflect the long-term value or prospects of the Company.
ACCORDINGLY, THE MATTER TO BE CONSIDERED AT THE SPECIAL MEETING IS OF CRITICAL
IMPORTANCE TO THE COMPANY'S FUTURE, AND WE URGE YOU TO ATTEND THE MEETING AND
VOTE AGAINST THE "CONTROL SHARE ACQUISITION" PROPOSED BY OAC AND UNITED
DOMINION. This matter is described in more detail in the attached Proxy
Statement, which we urge you to read carefully.
The formal Notice of the Special Meeting and the Proxy Statement
containing information relative to the meeting follow this letter.
Please be sure to sign and return the enclosed WHITE proxy card, whether
or not you plan to attend the meeting, so that your shares will be voted. If
you own Common Shares or Preferred Shares through the Commercial Intertech
Employee Stock Ownership Plan or certain other benefit plans (as discussed on
page 15 of the attached Proxy Statement), please be sure to date, sign and
return the enclosed card ("Trustee Instruction Card") providing instructions
to the trustee of the applicable plan so that your Common Shares and Preferred
Shares will be voted. PLEASE NOTE THAT THERE IS A
<PAGE>
CERTIFICATION SET FORTH ON THE WHITE PROXY CARD AND THE TRUSTEE INSTRUCTION
CARD THAT WILL BE USED TO ASSIST IN DETERMINING WHETHER THE PROPOSED "CONTROL
SHARE ACQUISITION" IS AUTHORIZED BY SHAREHOLDERS; EACH SHAREHOLDER WHO IS
ELIGIBLE TO DO SO (AS EXPLAINED IN THE ATTACHED PROXY STATEMENT) SHOULD
COMPLETE AND SIGN THIS CERTIFICATION. FAILURE TO COMPLETE THE CERTIFICATION
WILL RESULT IN THE COMMON SHARES AND PREFERRED SHARES REPRESENTED BY THE PROXY
CARD BEING PRESUMED TO BE INTERESTED SHARES (AS DEFINED IN THE ATTACHED PROXY
STATEMENT) THAT ARE INELIGIBLE TO VOTE IN CONNECTION WITH THE SECOND MAJORITY
AUTHORIZATION AS DESCRIBED BEGINNING ON PAGE 11 OF THE ATTACHED PROXY
STATEMENT. If you do attend the meeting, and the Board of Directors joins me
in hoping that you will, there will be an opportunity to vote in person if you
prefer.
Sincerely yours,
PAUL J. POWERS
Chairman of the Board, President
and Chief Executive Officer
August __, 1996
<PAGE>
[COMMERCIAL INTERTECH CORP. LOGO AND LETTERHEAD]
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
AUGUST __, 1996
To the Shareholders:
A special meeting of shareholders of Commercial Intertech Corp. (the
"Company"), called pursuant to the requirements of Section 1701.831 of the Ohio
Revised Code (the "831 Special Meeting"), will be held on August 30, 1996 at [
] a.m. at [ ], Youngstown, Ohio, solely for the following
purposes:
1. To consider and vote upon whether or not to authorize, in accordance
with Section 1701.831 of the Ohio Revised Code, the acquisition by United
Dominion Industries Limited, a Canadian corporation ("United Dominion") and Opus
Acquisition Corporation, a Delaware corporation ("OAC") and an indirect wholly
owned subsidiary of United Dominion (or one or more subsidiaries of United
Dominion), of common shares, par value $1.00 per share (the "Common Shares"), of
the Company that, when added to all other shares of the Company in respect of
which United Dominion and OAC may exercise or direct the exercise of voting
power in the election of the Company's directors, would entitle United Dominion
and OAC to exercise at least a majority of such voting power.
2. To consider and vote upon such procedural matters as may properly come
before the 831 Special Meeting.
Shareholders of record at the close of business of August 7, 1996 will be
entitled to vote at the 831 Special Meeting and at any adjournment thereof.
The Proxy Statement accompanies this notice.
By Order of the Board
of Directors.
SHIRLEY M. SHIELDS
Secretary
VOTING YOUR PROXY IS IMPORTANT
--------------------------------------------------------
Your prompt dating, signing and returning of the enclosed WHITE proxy card
(or, if applicable, the enclosed card providing voting instructions to the
trustee of certain of the Company's plans) in the enclosed envelope would be
appreciated. Those who are eligible to do so (as explained in the attached
Proxy Statement) should also complete the certification set forth therein. If
you attend the 831 Special Meeting, you may nevertheless
<PAGE>
vote in person should you desire. The return of proxies is important, regardless
of the number of shares owned.
<PAGE>
[COMMERCIAL INTERTECH CORP. LOGO AND LETTERHEAD]
PRELIMINARY PROXY MATERIALS DATED JULY 23, 1996
THE INFORMATION INCLUDED HEREIN IS SUBSTANTIALLY AS IT IS EXPECTED TO BE WHEN
THE DEFINITIVE PROXY STATEMENT IS MAILED TO SHAREHOLDERS OF COMMERCIAL INTERTECH
CORP. THIS PRELIMINARY PROXY STATEMENT WILL BE REVISED TO REFLECT ACTUAL FACTS
AT THE TIME OF MAILING OF THE DEFINITIVE PROXY STATEMENT.
PROXY STATEMENT
OF
COMMERCIAL INTERTECH CORP.
FOR THE SPECIAL MEETING OF SHAREHOLDERS
UNDER SECTION 1701.831 OF THE OHIO REVISED
CODE TO BE HELD ON AUGUST 30, 1996
This Proxy Statement is being mailed on or about August [ ], 1996 to
the shareholders of Commercial Intertech Corp., an Ohio corporation (the
"Company"), in connection with the solicitation by the Board of Directors of the
enclosed form of proxy (the WHITE proxy card) for the Special Meeting of
Shareholders (the "831 Special Meeting") under Section 1701.831 (the "Ohio
Control Share Acquisition Law" or "Section 831") of the Ohio Revised Code to be
held August 30, 1996, and at any and all adjournments of the 831 Special
Meeting. Pursuant to the Ohio General Corporation Law, a shareholder may revoke
a written proxy at any time prior to the vote either by giving notice to the
Company in writing or in open meeting. The cost of soliciting the WHITE proxy
cards will be borne by the Company.
The 831 Special Meeting will be held on August 30, 1996, at [10:00]
a.m., Eastern Daylight Time, at [ ], Youngstown, Ohio. The Board of
Directors has fixed the close of business on August 7, 1996 as the record date
for determining shareholders entitled to notice of the meeting and to vote
thereat (the "Record Date").
Holders of voting power of "interested shares" as such term is defined in
Section 1701.01(CC) of the Ohio General Corporation Law are not eligible to vote
such Interested Shares (as defined on page 11 of this Proxy Statement) in
connection with the Second Majority (as defined on page 11 of this Proxy
Statement). The Board of Directors
<PAGE>
has authorized, and the Company, after consultation with the Presiding Inspector
of Election and the Inspector of Election described below, has instituted
procedures to implement the legislative mandate to exclude the voting power of
Interested Shares, including a requirement that each shareholder certify to the
Company the number of Common Shares and Preferred Shares (as each term is
defined below) being voted that are eligible to vote in respect of the Second
Majority. UNDER THE PROCEDURES FOR THE 831 SPECIAL MEETING ADOPTED BY THE
COMPANY, WITH THE CONCURRENCE OF THE PRESIDING INSPECTOR OF ELECTION AND THE
INSPECTOR OF ELECTION, ALL COMMON SHARES AND PREFERRED SHARES THAT ARE VOTED
WITHOUT SUCH A CERTIFICATION SHALL BE PRESUMED TO BE INELIGIBLE TO VOTE IN
RESPECT OF THE SECOND MAJORITY. See "Vote of Two Separate Majorities Required;
Certain Voting Procedures At 831 Special Meeting" and "Shares Outstanding and
Eligible to Be Voted in First Majority and Second Majority" in this Proxy
Statement and the additional information set forth in Exhibit B to this Proxy
Statement.
PURPOSE OF SPECIAL MEETING
The sole purpose of the 831 Special Meeting is for the shareholders of the
Company to consider and vote upon whether to authorize, in accordance with the
Ohio Control Share Acquisition Law, the acquisition by United Dominion
Industries Limited, a Canadian corporation ("United Dominion"), and Opus
Acquisition Corporation, a Delaware corporation ("OAC") and an indirect wholly
owned subsidiary of United Dominion (or one or more subsidiaries of United
Dominion), of Shares (as defined below) that, when added to all other shares of
the Company in respect of which United Dominion and OAC may exercise or direct
the exercise of voting power in the election of the Company's directors, would
entitle United Dominion and OAC to exercise at least a majority of such voting
power (such acquisition hereinafter referred to as the "Control Share
Acquisition"). Section 831 requires that, prior to any person acquiring any
interest in common or preferred shares that would entitle such person directly
or indirectly to control 20% or more of the voting power of an Ohio corporation
in the election of its directors, such person obtain the authorization of the
shareholders of the corporation. THE COMPANY'S BOARD OF DIRECTORS (THE "BOARD
OF DIRECTORS") HAS DETERMINED THAT THE REVISED OFFER (AS DEFINED BELOW) IS
INADEQUATE AND NOT IN THE BEST INTERESTS OF THE COMPANY, ITS SHAREHOLDERS,
EMPLOYEES, CUSTOMERS, SUPPLIERS, LABOR ORGANIZATIONS, THE COMMUNITIES IN WHICH
THE COMPANY DOES BUSINESS AND ITS OTHER CONSTITUENCIES, AND DOES NOT ADEQUATELY
REFLECT THE LONG-TERM VALUE OR PROSPECTS OF THE COMPANY. ACCORDINGLY, THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS REJECT THE REVISED OFFER
AND UNANIMOUSLY RECOMMENDS A VOTE AGAINST THE AUTHORIZATION OF THE CONTROL SHARE
ACQUISITION.
-2-
<PAGE>
To authorize the Control Share Acquisition, Section 831 requires (i) the
presence of a quorum at the 831 Special Meeting, (ii) the affirmative vote of
the majority of the voting power of the Company (entitled to vote in the
election of the directors), represented in person or by proxy at the 831 Special
Meeting and (iii) the affirmative vote of the majority of such voting power
excluding the voting power of Interested Shares (as described below). Section
831 provides that a quorum shall be deemed to be present at the 831 Special
Meeting if a majority of the voting power, and a majority of the voting power
including only "disinterested" Shares, are represented at the 831 Special
Meeting.
On August 7, 1996, the Record Date, there were [ ] Common
Shares and [ ] shares of ESOP Convertible Preferred Stock - Series B
("Preferred Shares") outstanding. The Common Shares and Preferred Shares vote
together as a single class. Subject to limitations imposed by the Ohio Control
Share Acquisition Law (as described below), each Common Share and each Preferred
Share is entitled to one vote on the matter to be presented at the 831 Special
Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST AUTHORIZATION OF THE
CONTROL SHARE ACQUISITION PURSUANT TO UNITED DOMINION AND OAC'S INADEQUATE
REVISED OFFER. Please promptly date, sign and return the accompanying WHITE
proxy card. To be sure your Common Shares are voted AGAINST the authorization,
we recommend that you discard, and do not return, United Dominion and OAC's
BLUE-STRIPED proxy card. With respect to Common Shares and Preferred Shares held
for you in ESOPs or Plans (as defined below), promptly date, sign and return the
enclosed card (the "Trustee Instruction Card") providing the ESOP Trustee and
the Plan Trustee (as both terms are defined below) with voting instructions.
The three persons named in the enclosed WHITE proxy card have been selected
by the Board of Directors and will vote shares represented by valid Proxies
solicited on behalf of the Board of Directors. Unless otherwise specified in
the proxy card, they intend to vote AGAINST the authorization of the Control
Share Acquisition.
If you have any questions or need assistance in voting, please contact
Morrow & Co., Inc. at 1-800-566-9061 (Toll-Free).
THE OFFER
On May 10, 1996, at the request of William R. Holland, the Chief Executive
Officer of United Dominion, Mr. Holland met with Paul J. Powers, the Chairman
and Chief Executive Officer of the Company, in Youngstown, Ohio. During this
meeting, Mr. Holland expressed the view that a combination of the Company with
United Dominion would be attractive and suggested a price of $27.00 per share.
Mr. Powers
-3-
<PAGE>
indicated that the Company has a policy of independence, and that he believed
the Company's prospects on a stand-alone basis were strong.
On June 27, Mr. Holland faxed to Mr. Powers a letter, which was released to
the news media on the same day, containing an unsolicited proposal to acquire
the Company pursuant to a transaction in which the Company's shareholders would
receive $27.00 in cash for their Common Shares.
On July 11, 1996, OAC and United Dominion, announced an unsolicited tender
offer to purchase all of the Company's outstanding Common Shares and the
associated preferred share purchase rights (the "Rights") issued pursuant to the
Shareholder Rights Agreement, dated as of November 29, 1989 (the "Rights
Agreement") between the Company and the Mahoning National Bank of Youngstown, as
Rights Agent (the Common Shares, together with the Rights, are hereinafter
referred to as the "Shares") for a purchase price of $27.00 per Share, net to
the seller in cash, without interest thereon (the "Original Offer"). On the
same date, the Board of Directors unanimously determined that the Original Offer
was inadequate, and not in the best interests of the Company, its shareholders,
employees, customers, suppliers, labor organizations, the communities in which
the Company does business and its other constituencies, and did not adequately
reflect the long-term value or prospects of the Company. At that meeting, the
Board of Directors unanimously determined not to proceed with a planned public
offering of up to 20% of the stock of the Company's Cuno Incorporated fluid
filtration and purification subsidiary ("Cuno"), but instead to proceed with a
previously considered plan to spin off 100% of the stock of Cuno to the
Company's shareholders (the "Spin-Off"), subject to customary conditions,
including the receipt of an opinion of counsel with respect to the tax-free
nature of the Spin-Off. The Board of Directors had previously been considering,
together with its financial adviser, Goldman Sachs & Co. ("Goldman Sachs"),
either a 100% spin-off or a public offering of up to 20% of Cuno as a first step
toward a subsequent spin-off. At the July 11 meeting, the Board decided to
accelerate this process and proceed with a 100% spin-off to provide more direct
and immediate value to shareholders. The Board also unanimously approved a
program to repurchase up to 2,500,000 Common Shares in open market and privately
negotiated transactions (the "Repurchase Program"). On July 12, 1996, United
Dominion and OAC filed with the Company an Acquiring Person Statement under the
Ohio Control Share Acquisition Law in order to cause the Company to call the 831
Special Meeting. OAC and United Dominion's Acquiring Person Statement, dated
July 12, 1996 is included herein without attachments as Exhibit A to this Proxy
Statement.
On July 15, 1996, the purchase price of the Original Offer was increased to
$30.00 per Share, net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Revised Offer to Purchase,
dated July 16, 1996 (the "Revised Offer"). The stated purpose of the Revised
Offer is to acquire control of, and the entire equity interest in, the Company.
According to the Revised Offer to Purchase, dated July 16, 1996 (the "Revised
Offer to Purchase"), United Dominion intends, following completion of the
Revised Offer, to seek to have the Company consummate a merger or similar
business combination with OAC or another subsidiary of United Dominion at the
same price per
-4-
<PAGE>
Common Share to be paid in the Revised Offer (the "Proposed Merger"), subject to
the terms and conditions described in the Revised Offer to Purchase.
According to the Revised Offer to Purchase, the Revised Offer is
conditioned upon, among other things, the following significant matters:
(1) The Minimum Condition: There must be validly tendered and not properly
---------------------
withdrawn prior to expiration of the Revised Offer a number of Common Shares
which, when added to the Common Shares beneficially owned by OAC and its
affiliates, constitutes at least two-thirds of the total voting power of all
Common Shares outstanding on a fully diluted basis on the date of purchase.
(2) The Control Share Condition: The approval of the Control Share
---------------------------
Acquisition shall have been obtained from the Company's shareholders or OAC
shall be satisfied, in its sole discretion, that the Ohio Control Share
Acquisition Law is invalid or inapplicable to the acquisition of Common Shares
pursuant to the Revised Offer.
(3) The Business Combination Condition: OAC must be satisfied, in its sole
----------------------------------
discretion, that the restrictions contained in Chapter 1704 (the "Ohio Business
Combination Law") of the Ohio Revised Code will not apply to the acquisition of
Common Shares pursuant to the Revised Offer or to the Proposed Merger.
The Ohio Business Combination Law prohibits certain combinations and other
transactions (each, a "Chapter 1704 Transaction"), such as the Proposed Merger,
between an issuing public corporation (such as the Company) and any "Interested
Shareholder" (defined generally as any person that, directly or indirectly, is
entitled to exercise or direct the exercise of 10% or more of the outstanding
voting power of a corporation in the election of directors) for a period of
three years after the date the person becomes an Interested Shareholder. After
such three year period, a Chapter 1704 Transaction between an issuing public
corporation and such Interested Shareholder is prohibited unless either certain
"fair price" provisions are complied with or the Chapter 1704 Transaction is
approved by certain supermajority shareholder votes. The Ohio Business
Combination Law restrictions do not apply to a Chapter 1704 Transaction with an
Interested Shareholder if either the acquisition of the corporation's shares
that would cause the Interested Shareholder to become an Interested Shareholder,
or the Chapter 1704 Transaction, is approved by a resolution of the board of
directors of the corporation adopted prior to the date on which the Interested
Shareholder became an Interested Shareholder. For a description of certain
litigation relating to the Ohio Business Combination Law, see "Certain
Litigation."
-5-
<PAGE>
(4) The Rights Condition: The Rights shall have been redeemed by the
--------------------
Company or OAC shall be satisfied, in its sole discretion, that the Rights have
been invalidated or are otherwise inapplicable to the Revised Offer and the
Proposed Merger.
(5) The Articles Amendment Condition: Article SIXTH of the Company's
--------------------------------
Amended Articles of Incorporation (the "Articles") (which requires a 95% vote to
approve a business combination which does not meet certain "fair price" and
procedural criteria), shall have been repealed or otherwise amended with the
effect that, or OAC shall be otherwise satisfied, in its sole discretion, that,
the provisions of such Article will not apply to the Proposed Merger.
On July 17, 1996, the Board of Directors unanimously concluded that the
Revised Offer is inadequate, and not in the best interests of the Company, its
shareholders, employees, customers, suppliers, labor organizations, the
communities in which the Company does business and its other constituencies, and
does not adequately reflect the long-term value or prospects of the Company. At
that meeting, the Board of Directors unanimously reaffirmed the Company's prior
determination to proceed with the Spin-Off. The Board of Directors also
unanimously reaffirmed the Repurchase Program.
CERTAIN LITIGATION
On July 11, 1996, United Dominion and OAC commenced litigation (the
"District Court Litigation") in the Federal District Court for the Southern
District of Ohio, Eastern Division (the "Court"), against the Company, the Board
of Directors, the acting Commissioner of Securities of the Ohio Division of
Securities, the Ohio Director of Commerce and the State of Ohio. Plaintiffs are
seeking declarations that, among other things, (i) Section 1701.01(CC)(2) of
Ohio's Control Share Acquisition Law is unconstitutional becuase it is claimed
to conflict with the United States Constitution, and (ii) the Rights Agreement
and the Rights are invalid, unlawful, null and void. Plaintiffs also sought,
among other things, to enjoin (i) the enforcement of Sections 1701.01(CC)(2) and
1701.831(E) of Ohio's Control Share Acquisition Law, (ii) the Company's
directors from taking any action to enforce or amend the Rights Agreement (other
than to redeem the Rights or to amend certain provisions that limit the ability
of the Company to redeem the Rights), and (iii) the Company from commencing or
prosecuting in any court other than the court in which the action was filed, any
action or proceeding relating to the plaintiffs' tender offer. Further, the
plaintiffs sought an order to compel the Company to redeem the Rights and to
amend certain provisions of the Rights Agreement that limit the ability of the
Company to redeem the Rights. On July 15, 1996, the Court scheduled a hearing
for July 29, 1996 with respect to United Dominion and OAC's motion to enjoin
preliminarily the enforcement of Sections 1701.01(CC)(2) and 1701.831(E) of the
Ohio Control Share Acquisition Law and the parties are commencing discovery with
respect thereto. For a description of Sections 1701.01(CC)(2) and 1701.831(E) of
the Ohio Control Share Acquisition Law, see page 11 of this Proxy Statement.
On July 15, 1996, United Dominion and OAC filed an amended complaint
asserting as additional claims that the directors of the Company had violated
their fiduciary duties to the Company's shareholders by determining to undertake
the Repurchase Program, undertaking to effect the Spin-Off and refusing to
negotiate with United Dominion and OAC; that the Company's Schedule 14D-9
contained false and misleading statements in violation of the Securities and
Exchange Act of 1934 (the "Exchange Act"); and that the Company's repurchase of
shares in the Repurchase Program violated the Exchange Act. The plaintiffs
sought to enjoin preliminarily and permanently: (1) the Board of Directors from
refusing to negotiate with United Dominion and OAC; (2) the Repurchase Program;
and (3) the Company from refusing to amend its Schedule 14D-9 with respect to
the Repurchase Program and the Spin-Off.
-6-
<PAGE>
On July 18, 1996, the Company filed its answer to the amended complaint of
United Dominion and OAC denying all substantive allegations and raising, as
counterclaims, that there were disclosure violations in the state and federal
filings by United Dominion and OAC associated with the Revised Offer. The
Company also sought a declaratory judgment that, if United Dominion and OAC
obtain proxies representing more than 10% of the voting power of the Company's
Common Shares in the election of directors, United Dominion and OAC would be
"interested shareholders" within the meaning of the Ohio Business Combination
Law and thus be prohibited from engaging in certain transactions with the
Company, including completing their Proposed Merger, for a minimum of three
years and thereafter, unless they comply with the Ohio Business Combination Law.
On July 19, 1996, United Dominion and OAC moved for leave to file a second
amended complaint and for a preliminary injunction, based on their claim that
the Spin-Off would violate the claimed rights of the Company's shareholders to
vote at the 831 Special Meeting and another special meeting that United Dominion
and OAC intended to call. The Court set a briefing schedule to rule upon the
right of United Dominion and OAC to raise such claims and their right to
discovery and also set a tentative hearing on their motion for preliminary
injunction for August 14, 1996.
RECOMMENDATION BY THE COMPANY'S BOARD OF DIRECTORS
At a meeting of the Board of Directors held on July 11, 1996, the Board of
Directors of the Company met with its financial and legal advisers and reviewed
the Original Offer of $27.00 per Share. At that meeting, the Board of Directors
unanimously concluded that the Original Offer was inadequate and not in the best
interests of the Company, its shareholders, employees, customers, suppliers,
labor organizations, the communities in which the Company does business and its
other constituencies, and did not adequately reflect the long-term value or
prospects of the Company. At that meeting, the Board of Directors unanimously
determined to proceed with the Spin-Off, subject to customary conditions,
including the receipt of an opinion of counsel with respect to the tax-free
nature of the Spin-Off. The Board of Directors had previously been considering,
together with Goldman Sachs, either a 100% spin-off or a public offering of up
to 20% of Cuno as a first step toward a subsequent spin-off. At the July 11
meeting, the Board decided to accelerate this process and proceed with a 100%
spin-off to provide more direct and immediate value to shareholders. The Board
also unanimously approved the Repurchase Program.
On July 15, 1996, United Dominion and OAC issued a press release announcing
the Revised Offer.
On July 17, 1996, the Board of Directors of the Company met to review
the Revised Offer with its financial and legal advisors. The Board of Directors
unanimously concluded that the Revised Offer is inadequate and not in the best
interests of the Company, its shareholders, employees, customers, suppliers,
labor organizations,
-7-
<PAGE>
the communities in which the Company does business and its other constituencies,
and does not adequately reflect the long-term value or prospects of the Company.
At that meeting, the Board of Directors unanimously reaffirmed the Company's
prior determination to proceed with the Spin-Off. The Board also unanimously
reaffirmed the Repurchase Program.
In reaching its conclusions referred to above, the Board of Directors
considered numerous factors, including but not limited to:
(i) the Board of Directors' familiarity with the business, financial
condition, prospects and current business strategy of the Company, the
nature of the businesses in which the Company operates and the Board of
Directors' belief that the Revised Offer does not reflect the long-term
values inherent in the Company;
(ii) the Company's financial performance in recent years, including
its record results for its 1995 fiscal year and three consecutive years of
improving operating results, including strong improvements in operating
performance and profitability by Cuno;
(iii) the Company's long-term strategic plan to build value for its
shareholders by growing its core businesses;
(iv) the Company's plan to proceed with the Spin-Off, in light of the
belief of the Board of Directors and management that:
-- the Spin-Off should enhance the abilities of the managements of
the Company and Cuno to focus more closely on the objectives of their
respective businesses, enhance the two companies' ability to create
incentives that align the interests of their management and employees with
the performance of their respective companies, and permit Cuno to use its
publicly traded stock as a currency for expansion through acquisitions; and
-- the Spin-Off should enable shareholders of the Company to benefit
in the near term from the value of a high-growth, high-multiple business,
which has not previously received appropriate market recognition because of
the Company's mix of industrial businesses, which typically trade at lower
multiples. The Board of Directors took into consideration that there is
some risk that the tax-free nature of the Spin-Off could be impacted, with
attendant adverse tax consequences to the Company and certain of its
shareholders, in the event of an acquisition of the Company by certain
third parties (including United Dominion) following a spin-off;
(v) the Board of Directors' belief that the Repurchase Program will
provide investors who desire to obtain liquidity for their investment in
the
-8-
<PAGE>
Company with an opportunity to sell all, or a portion of, their investment
in the Company; these shareholders may be more likely to support actions
that would make it more difficult for the Company to resist an inadequate
bid, which in the view of the Board of Directors would not be in the best
interests of the Company, its shareholders and its other constituencies;
accordingly, the Repurchase Program may stabilize the Company's base of
long-term shareholders and may give long-term shareholders who desire to
participate in the benefits of the Spin-Off and the future growth of the
Company and Cuno a greater opportunity to do so; the Board of Directors
also considered the fact that the Repurchase Program is expected to be
accretive to the Company's earnings per Share;
(vi) the Board of Directors' belief, in light of the Company's
strategic plan and its plan to proceed with the Spin-Off, that this is not
the appropriate time to sell the Company;
(vii) the Board of Directors' belief that the interests of the
Company, its shareholders and other constituencies would best be served by
the Company continuing as an independent entity, proceeding with its plans
to effect the Spin-Off, and effecting the Repurchase Program;
(viii) the opinion of Goldman Sachs, the Company's financial advisor,
after reviewing with the Board of Directors many of the factors referred to
above and other financial criteria used in assessing an offer, that the
Revised Offer is inadequate; and
(ix) the disruptive effect consummation of the Revised Offer would
have on the Company's employees, suppliers, customers and the communities
where the Company operates.
The Company recognizes that a vote to authorize the Revised Offer is not
the same as a decision to tender your Shares. HOWEVER, IN LIGHT OF THE BOARD OF
DIRECTORS' CONCLUSIONS THAT THE REVISED OFFER IS INADEQUATE, IS NOT IN THE BEST
INTERESTS OF THE COMPANY, ITS SHAREHOLDERS AND OTHER CONSTITUENCIES, AND DOES
NOT ADEQUATELY REFLECT THE LONG-TERM VALUE OR PROSPECTS OF THE COMPANY, THE
BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THE CONTROL SHARE
ACQUISITION. Please promptly date, sign and return the accompanying WHITE proxy
card. To be sure your Common Shares are voted AGAINST the authorization, we
recommend you discard, and do not return, United Dominion and OAC's BLUE-STRIPED
proxy card. With respect to Common Shares and Preferred Shares you hold through
the Company's ESOPs or Plans (as both terms are defined below), please promptly
date, sign and return the enclosed Trustee Instruction Card to have the trustee
vote your Common Shares and Preferred Shares AGAINST the Control Share
Acquisition.
-9-
<PAGE>
OHIO CONTROL SHARE ACQUISITION LAW
Section 831 provides, among other things, that, unless the articles of
incorporation or the regulations of an issuing public corporation provide
otherwise, any control share acquisition of such corporation shall be made only
with the prior authorization of its shareholders. An "issuing public
corporation" is defined as a corporation, organized for profit under the laws of
Ohio, with fifty or more shareholders, that has its principal place of business,
principal executive offices or substantial assets within Ohio, and as to which
no valid close corporation agreement is in existence. The Company is an
"issuing public corporation."
A "control share acquisition" is defined as the acquisition, directly or
indirectly, by any person of shares of an issuing public corporation that, when
added to all other shares of the issuing public corporation in respect of which
such person may exercise or direct the exercise of voting power, would entitle
such person, immediately after such acquisition, directly or indirectly, alone
or with others, to exercise or direct the exercise of the voting power of such
issuing public corporation in the election of directors of the following ranges
of such voting power: (a) one-fifth or more but less than one-third of such
voting power; (b) one-third or more but less than a majority of such voting
power; or (c) a majority or more of such voting power.
Section 831 provides that any person who proposes to make a control share
acquisition shall deliver an "acquiring person statement" to the issuing public
corporation. Such acquiring person statement shall include (i) the identity of
the acquiring person; (ii) a statement that the acquiring person statement is
given pursuant to Section 831; (iii) the number of shares of the issuing public
corporation owned, directly or indirectly, by the acquiring person; (iv) the
range of voting power in the election of directors under which the proposed
control share acquisition would, if consummated, fail; (v) a description in
reasonable detail of the terms of the proposed acquisition; and (vi)
representations of the acquiring person (together with a statement in reasonable
detail of the facts upon which the representations are based) that the proposed
control share acquisition, if consummated, will not be contrary to law, and that
the acquiring person has the financial capacity to make the proposed control
share acquisition.
Within ten days of receipt of an acquiring person statement that complies
with Section 831, the directors of the issuing public corporation must call a
special meeting of shareholders of the issuing public corporation to vote on the
proposed control share acquisition. Such special meeting must be held within
fifty days of receipt of the acquiring person statement unless the acquiring
person agrees otherwise. If the acquiring person requests in writing at the
time of delivery of the acquiring person statement, such special meeting shall
be held no sooner than 30 days after receipt by the issuing public corporation
of the acquiring person statement.
-10-
<PAGE>
The issuing public corporation is required to send a notice of the special
meeting to all shareholders of record as of the record date set for the meeting,
together with a copy of the acquiring person statement and a statement by the
issuing public corporation, authorized by its directors, of its position or
recommendation with respect to the proposed control share acquisition.
Pursuant to Ohio Revised Code Section 1701.831(E)(1), the acquiring person
may make the proposed control share acquisition only if (a)(i) a quorum is
present at the special meeting, (ii) the acquisition is authorized by an
affirmative vote of a majority of the voting power entitled to vote in the
election of directors and represented in person or by proxy at such meeting
("First Majority"), and (iii) by a majority of the portion of such voting power
excluding the voting power of "interested shares" ("Second Majority"), as
defined below, and (b) such control share acquisition is consummated, in
accordance with the terms so authorized, no later than 360 days following such
shareholder authorization of the control share acquisition.
Ohio Revised Code Section 1701.01(CC) (1) defines "interested shares" as
the shares of an issuing public corporation as to which any of the following
persons may exercise (or direct the exercise of) voting power of the corporation
in the election of directors: (i) the acquiring person; (ii) an officer of the
issuing public corporation elected or appointed by its directors; or (iii) any
employee of the issuing public corporation who is also a director of such
corporation. Ohio Revised Code Section 1701.01(CC) (2) also defines "interested
shares" (the shares defined under either Section 1701.01(CC)(1) and (2)
hereinafter referred to as "Interested Shares") to mean shares of the issuing
public corporation acquired, directly or indirectly, by any person for valuable
consideration during the period beginning with the date of the first public
disclosure of a proposed control share acquisition of the issuing public
corporation or any proposed merger, consolidation or other transaction which
would result in a change in control of the corporation or all or substantially
all of its assets, and ending on the date of any special meeting of the
corporation's shareholders held thereafter pursuant to Section 831 for the
purpose of voting on a control share acquisition proposed by an acquiring
person, if either (i) the aggregate consideration paid or otherwise given by the
person who acquired the shares, and any other persons acting in concert with
such person, exceeds $250,000 or (ii) the number of shares acquired by the
person who acquired the shares, and any other persons acting in concert with
such person, exceeds one-half of 1% of the outstanding shares of the corporation
entitled to vote in the election of directors.
In earlier cases brought with respect to the constitutionality of Section
1701.01(CC)(2), the Court interpreted Section 1701.01(CC)(2) as requiring the
determination of the status of shares as Interested Shares to be made as of the
date of the special meeting held pursuant to Section 1701.831, taking into
account all purchases of shares between the date of the first public disclosure
of a proposed control share
-11-
<PAGE>
acquisition up to the time of such special meeting. Although the Company has
reserved its right to contest this interpretation on appeal, the Company has
adopted procedures for the 831 Special Meeting that the Company believes are
consistent with the Court's interpretation.
June 27, 1996 is the date on which United Dominion first publicly disclosed
the proposed control share acquisition that is the subject of the 831 Special
Meeting. Accordingly, pursuant to the Court's interpretation of Section
1701.01(CC)(2), should the aggregate consideration paid or otherwise given by a
person who acquires Common Shares or Preferred Shares, and by any other persons
acting in concert with such person, during the period that commenced on June 27,
1996 and ends on the date of the 831 Special Meeting (or of any reconvening of
such meeting pursuant to proper adjournment thereof) exceed $250,000 in the
aggregate, such shares will constitute "Interested Shares."
THE AUTHORIZATION BY THE SHAREHOLDERS OF THE CONTROL SHARE ACQUISITION IS
INDEPENDENT OF ANY DECISION BY SHARE-HOLDERS WHETHER OR NOT TO TENDER THEIR
SHARES PURSUANT TO THE REVISED OFFER. Consummation of the transactions described
in the Revised Offer, however, is conditioned, among other things, upon
shareholder authorization of the Control Share Acquisition pursuant to Section
831.
The foregoing summary does not purport to be a complete statement of the
provisions of Section 831 and the related provisions of the Ohio Revised Code.
The foregoing summary is qualified in its entirety by reference to Section 831
and the Ohio Revised Code.
VOTE OF TWO SEPARATE MAJORITIES REQUIRED; CERTAIN VOTING PROCEDURES AT 831
SPECIAL MEETING
As discussed earlier, for the Control Share Acquisition to be authorized
under the Ohio Control Share Acquisition Law, two separately determined
majorities of the Common Shares and Preferred Shares (voting together as a
single class) voted at the 831 Special Meeting (the First Majority and Second
Majority) for each such authorization must authorize the Control Share
Acquisition, and a separately determined quorum must be present at the 831
Special Meeting.
The First Majority authorization is that of a majority of the voting power
of all of the Common Shares and Preferred Shares present or represented at the
831 Special Meeting; all of the outstanding Common Shares and Preferred Shares
of the Company as of the Record Date are eligible to vote in determining the
approval of this First Majority. The quorum required for this authorization is
a majority of the voting power of all the outstanding Common Shares and
Preferred Shares.
-12-
<PAGE>
The Second Majority authorization required is that of a majority of the
Common Shares and Preferred Shares present or represented at the 831 Special
Meeting, excluding the voting power of Common Shares and Preferred Shares that
are Interested Shares; Interested Shares are ineligible to vote in determining
the authorization of this Second Majority. The quorum required for the Second
Majority authorization is a majority of the voting power of outstanding Common
Shares and Preferred Shares excluding the voting power of Interested Shares.
Holders of the voting power of Interested Shares are not eligible to vote
such Interested Shares in connection with the Second Majority. The Board of
Directors has authorized, and the Company (after consultation with the Presiding
Inspector of Election and the Inspector of Election described below) has
instituted, procedures to implement the Ohio legislative mandate to exclude the
voting power of Interested Shares, including a requirement that each shareholder
certify to the Company the number of Common Shares and Preferred Shares being
voted that are eligible to vote in respect of the Second Majority. UNDER
PROCEDURES FOR THE 831 SPECIAL MEETING ADOPTED BY THE COMPANY, WITH THE
CONCURRENCE OF THE PRESIDING INSPECTOR OF ELECTION AND THE INSPECTOR OF
ELECTION, ALL COMMON SHARES AND PREFERRED SHARES THAT ARE VOTED WITHOUT SUCH A
CERTIFICATION SHALL BE PRESUMED TO BE INELIGIBLE TO VOTE IN RESPECT OF THE
SECOND MAJORITY. See "Shares Outstanding and Eligible to Be Voted in First
Majority and Second Majority" in this Proxy Statement and the additional
information set forth in Exhibit B to this Proxy Statement.
In the event that a quorum is not present at the 831 Special Meeting for
one or both of the votes to be taken on the Control Share Acquisition, that vote
could not be taken under the Ohio Control Share Acquisition Law, and the Control
Share Acquisition would not be authorized. The holders of a majority of Common
Shares and Preferred Shares represented at the 831 Special Meeting, whether or
not a quorum is present, could vote to adjourn the 831 Special Meeting to not
later than the close of business on August 31, 1996, at which time another
determination would be made as to whether the required quorum was present.
If the Control Share Acquisition is not authorized by both of the majority
votes required, United Dominion and OAC may not proceed further with the Control
Share Acquisition unless the Ohio Control Share Acquisition Law is declared
unconstitutional. If the Control Share Acquisition is authorized by both the
required majorities, United Dominion and OAC would not be prohibited by the Ohio
Control Share Acquisition Law from completing the Revised Offer and the Control
Share Acquisition. However, authorization of the Control Share Acquisition for
purposes of the Ohio Control Share Acquisition Law would not require any
shareholder to accept the Revised Offer or to tender shares to OAC. Moreover, in
the event that the shareholders of the Company do authorize the Control Share
Acquisition, there can be no assurance that the Revised Offer will be
consummated. As
-13-
<PAGE>
previously described under "The Revised Offer," the Revised Offer is subject to
numerous conditions. For a description of certain litigation relating to these
conditions, see "The Revised Offer." The Board of Directors of the Company
believes there is substantial uncertainty as to whether the conditions to the
Revised Offer will be satisfied, and there may be significant delay before the
Revised Offer can be consummated, even if all of the conditions to the Revised
Offer can be satisfied.
If a shareholder abstains from voting on the Control Share Acquisition
(marking "abstain" on the form of proxy), those Common Shares and Preferred
Shares will be considered as present at the 831 Special Meeting for quorum
purposes, but the abstention will have the practical effect of a "no" vote. If
a broker indicates on the form of proxy that it does not have discretionary
authority as to certain Common Shares and Preferred Shares to vote on the
Control Share Acquisition, those Common Shares and Preferred Shares will be
considered as present at the 831 Special Meeting for quorum purposes but not
entitled to vote with respect to the 831 Special Meeting and thus will also have
the practical effect of a "no" vote. If the Company's proxy is properly signed
and returned without specifying a choice, the Common Shares and Preferred Shares
represented thereby will be voted AGAINST the Control Share Acquisition.
Certain Common Shares and Preferred Shares are held of record by Mellon
Bank, N.A., as trustee (the "ESOP Trustee") for the Commercial Intertech
Employee Stock Ownership Plan and Commercial Intertech Retirement Stock
Ownership and Savings Plan (the "ESOPs"). The trust for these plans (the "ESOP
Trust") contain pass-through voting provisions for the participants of the
ESOPs, with Common Shares and Preferred Shares that are allocated to a
participant's account voted by the ESOP Trustee as instructed by the participant
and Common Shares and Preferred Shares that either are not allocated to any
participant's account or are allocated but for which no instruction from the
participant has been received by the ESOP Trustee voted by the ESOP Trustee
proportionately as the allocated shares for which instructions were received are
voted. PARTICIPANTS IN THE ESOPS CAN ONLY VOTE COMMON SHARES AND PREFERRED
SHARES HELD IN THE ESOPS ON THEIR BEHALF BY INSTRUCTING THE ESOP TRUSTEE ON THE
TRUSTEE INSTRUCTION CARD PROVIDED TO PARTICIPANTS FOR THAT PURPOSE. According to
proxy materials filed with the Securities and Exchange Commission by United
Dominion and OAC, United Dominion and OAC believe that, notwithstanding the
express terms of the trust document, the ESOP Trustee has a fiduciary duty under
the Employee Retirement Income Security Act of 1974 ("ERISA") to exercise its
discretion with respect to voting Common Shares or Preferred Shares held in the
ESOPs which are allocated to any participant's account but for which no
instructions are received by it and for all Common Shares or Preferred Shares
held in ESOPs which are not allocated to any participant's account. United
Dominion and OAC also believe, according to such proxy materials, that the
indemnification provisions in favor of the ESOP Trustee contained in the trust
documents, which provide full indemnification for the ESOP Trustee only for
actions taken upon the written direction of the participants and in accordance
with the terms of the ESOP, violate ERISA. According to such proxy materials,
United Dominion and OAC believe that the Department of Labor has successfully
advanced similar positions in a federal district court case, Reich v.
--------
NationsBank of Georgia, N.A., and Martin v. NationsBank of Georgia, N.A., an
- ---------------------------- --------------------------------------
earlier opinion in the same proceeding.
In addition, Common Shares are held of record by National City Bank, N.E.,
as trustee (the "Plan Trustee") for the Commercial Intertech Non-Qualified Stock
Purchase Plan and the Commercial Intertech Employee Savings and Stock Purchase
Plan (the "Plans"). The trusts for these plans (the "Plan Trusts") contain pass-
through voting provisions for the participants of the Plans, with Common Shares
that are allocated to a participant's account voted by the Plan Trustee as
instructed by the participant and Common Shares for which no instruction from
the
-14-
<PAGE>
participant has been received by the Plan Trustee voted by the Plan Trustee, in
its sole discretion. PARTICIPANTS IN THE PLANS CAN ONLY VOTE COMMON SHARES HELD
IN THE PLANS ON THEIR BEHALF BY INSTRUCTING THE PLAN TRUSTEE ON THE TRUSTEE
INSTRUCTION CARD PROVIDED TO PARTICIPANTS FOR THAT PURPOSE.
Proxies representing Common Shares held of record will include Common
Shares allocated to participants under the Automatic Dividend Reinvestment Plan
(the "Dividend Reinvestment Plan") for shareholders of the Company. The form of
Proxy accompanying this Proxy Statement can be used to vote such Common Shares
held under the Automatic Dividend Reinvestment Plan.
SHARES OUTSTANDING AND ELIGIBLE TO BE VOTED IN FIRST MAJORITY AND SECOND
MAJORITY
As discussed above, Common Shares and Preferred Shares are the only shares
entitled to be voted at the 831 Special Meeting. The Common Shares and
Preferred Shares are each entitled to one vote and vote together as a single
class. On August 7, 1996, the Record Date for the 831 Special Meeting, there
were [ ] Common Shares and [ ] Preferred Shares
outstanding, all of which are eligible to be voted in determining whether the
Control Share Acquisition has been approved by the First Majority required under
the Ohio Control Share Acquisition Law.
The number of Common Shares and Preferred Shares eligible to be voted in
determining whether the Control Share Acquisition has been approved by the
Second Majority required under the Ohio Control Share Acquisition Law,
consisting of the voting power of all the outstanding Common Shares and
Preferred Shares excluding the voting power of Interested Shares, will be
determined as of the time of the 831 Special Meeting in the manner described in
this Proxy Statement. The categories of Interested Shares that will not be
eligible to be voted in determining the Second Majority are as follows:
a. Shares owned by the acquiring person (United Dominion and OAC).
According to the Schedule 14D-1 filed by United Dominion and OAC on July 12,
1996, United Dominion and OAC, and their respective affiliates own in the
aggregate 1,000 Common Shares, which are, for this purpose, Interested Shares.
b. Shares owned by officers of the Company elected or appointed by its
Board of Directors (16 individuals) and by any employee of the Company who is
also a director of the Company (Paul J. Powers and William W. Cushwa). These
individuals own, in the aggregate, 643,662 Common Shares and Preferred Shares,
-15-
<PAGE>
which are, for this purpose, Interested Shares. As such, these Common Shares
will not be eligible to be voted in determining the Second Majority. To the best
of the Company's knowledge, these individuals intend to vote their Common Shares
and Preferred Shares against the Control Share Acquisition in determining the
First Majority.
c. The Ohio Control Share Acquisition Law also excludes from the vote in
determining approval of the Control Share Acquisition by the Second Majority the
voting power of "any shares . . . acquired, directly or indirectly, by any
person from the holder or holders thereof for a valuable consideration during
any period beginning with the date of the first public disclosure of a proposed
control share acquisition . . . and ending on the date of the [831 Special
Meeting], for the purpose of voting on a control share acquisition . . . if . .
. the following [applies]: (a) the aggregate consideration paid or given by the
person who acquired the shares, and any other persons acting in concert with
him, for all such shares exceeds two hundred fifty thousand dollars. . . ."
Such Shares are Interested Shares for this purpose. It is the Company's
position that, pursuant to Section 1701.01 (CC)(2) of the Ohio Revised Code, any
Common Shares or Preferred Shares acquired (directly or indirectly) during the
period beginning on June 27, 1996, the date United Dominion first publicly
disclosed its unsolicited proposal to purchase all of the Company's Common
Shares, through the date of the 831 Special Meeting and that are held on the
date of the 831 Special Meeting are Interested Shares if the aggregate
consideration paid or given by a holder of such shares (or any person acting in
concert with such holder) exceeds $250,000.
Under the Ohio Control Share Acquisition Law, Common Shares and Preferred
Shares owned by directors who are not employees of the Company, and who do not
fall into any other category described in subparagraph (a), (b) or (c)
immediately above, would not be Interested Shares. The Company's directors
(excluding director/officers) owned an aggregate of 390,567 Common Shares and
Preferred Shares as of June 30, 1996, and, to the best of Company's knowledge,
none of these Common Shares and Preferred Shares is an Interested Share. To the
best of Company's knowledge, these directors intend to vote their Common Shares
and Preferred Shares against approval of the Control Share Acquisition in
determining the First and the Second Majorities.
The Board of Directors has authorized, and the Company has instituted,
after consultation with the Presiding Inspector of Election and the Inspector of
Election described below, procedures to determine, as of the time of the 831
Special Meeting, how many and which of the outstanding Common Shares and
Preferred Shares of the Company will be Interested Shares under the definition
quoted in subparagraph (c) immediately above. The validity of certain
provisions of the Ohio Control Share
-16-
<PAGE>
Acquisition Law is at issue in the District Court Litigation. It is the
Company's position that these provisions of the Ohio Control Share Acquisition
Law are valid, and the procedures described below have been designed to
implement these provisions. If the Court determines that these provisions are
not valid, or that these provisions are valid but the procedures described below
must be modified, the Company will modify these procedures to comply with any
final order of the Court. The Company will promptly notify shareholders of such
modifications, if any. Absent such an order, the procedures described below and
the presumptions described herein regarding the determination of eligibility of
Common Shares and Preferred Shares to be voted will apply. Under these
procedures:
1(a) All proxy cards solicited for ballots voted at the 831 Special
Meeting must set forth or be accompanied by a certification for signature by the
shareholder to the effect that all, or an indicated number of, the Common Shares
and Preferred Shares owned by that shareholder are eligible to vote in
determining the Second Majority (namely, in determining whether the Control
Share Acquisition is authorized by the Second Majority required under the Ohio
Control Share Acquisition Law) because such Common Shares and Preferred Shares
are not Interested Shares. See Exhibit B to this Proxy Statement for specific
information as to the circumstances under which a shareholder may, or may not,
sign the certification. Banks, brokerage houses, other institutions, nominees,
and fiduciaries holding shares beneficially owned by other parties will be
requested to include this certification on all materials distributed to such
beneficial owners seeking instructions from the beneficial owners as to how to
vote such Common Shares and Preferred Shares. The Company will also supply
shareholders with a separate certification form that shareholders using the
BLUE-STRIPED proxy card circulated by United Dominion and OAC may use to certify
their eligibility (if the BLUE-STRIPED proxy card does not provide a
certification of eligibility conforming to the certification on the WHITE proxy
card circulated by the Company). The Company will request that United Dominion
and OAC include a conforming certification of eligibility in the BLUE-STRIPED
proxy card.
(b) Each proxy card and ballot also sets forth or must be accompanied by a
statement to the effect that, if the certification of eligibility is signed by
the shareholder, the shareholder submitting the proxy card or the ballot
undertakes to advise the Company of any changes in the status of the Common
Shares and Preferred Shares represented by the proxy card or ballot, between the
date the certification is originally signed and the time of the 831 Special
Meeting, known to such shareholder to have caused such Common Shares and
Preferred Shares to have become Interested Shares or of any other change in the
eligibility of such shares to vote. Each shareholder is being provided with a
second postage paid envelope and a duplicate proxy card addressed to the Company
for the purpose of providing such additional information, if necessary. If the
certification is signed by the shareholder and no such additional information is
received, the Common
-17-
<PAGE>
Shares and Preferred Shares subject to the certification of eligibility on the
proxy card or ballot will be presumed not to be Interested Shares and,
therefore, will be eligible to be voted in determining whether the Control Share
Acquisition has been approved by the Second Majority.
2(a) The Company will submit to the Presiding Inspector of Election:
(i) information from publicly available sources, such as filings with the
Securities and Exchange Commission;
(ii) information made available to the Company by its transfer agent, its
proxy soliciting firm, The Depository Trust Company, and similar sources;
(iii) information that becomes available to the Company in the course of
the litigation initiated by United Dominion and OAC; and
(iv) any other information that may assist in identifying which Common
Shares and Preferred Shares are Interested Shares for purposes of challenging
any certification of eligibility or lack thereof made on a proxy card or ballot
that the Company, on the basis of such information, may believe to be incorrect.
Under procedures approved by the Company's Board of Directors, such challenges
are to be made as soon as possible, and in no event more than seven days after
the date of the 831 Special Meeting.
(b) All such challenges will be resolved by the Presiding Inspector of
Election pursuant to an agreement among the Company and the Inspectors
specifying the procedures and regulations for challenges and other activities of
the Inspectors. Each ruling by the Presiding Inspector is to be made on the
basis of the information presented to the Inspectors in a challenge, or in a
rebuttal to a challenge, as the Presiding Inspector shall find, in his sole
judgment, to be probative on a basis consistent with the language and purpose of
the Ohio Control Share Acquisition Law and the efficient and fair administration
of the 831 Special Meeting thereunder.
All Common Shares and Preferred Shares as to which a signed certification
of eligibility, as described above, has been provided on the proxy card or
ballot relating to such Common Shares and Preferred Shares will be presumed by
the Presiding Inspector to be eligible to be voted in determining whether the
Control Share Acquisition is approved by the Second Majority; this presumption
may be rebutted if a shareholder signing the proxy card or ballot provides
subsequent information indicating that some or all of the Common Shares and
Preferred Shares represented by the original proxy card or ballot have become,
or lost their status as, Interested Shares or a successful challenge is made to
such certification on the basis of information available to the challenging
party. It is the Company's position that Common Shares and Preferred Shares
subject to a proxy
-18-
<PAGE>
card or ballot without a certification of eligibility completed by the
shareholder shall be presumed to be Interested Shares and, therefore, not
eligible to be voted in determining whether the Control Share Acquisition has
been approved by the Second Majority.
IT IS ALSO THE COMPANY'S POSITION THAT ALL COMMON SHARES AND PREFERRED
SHARES SUBJECT TO ONE OF THE BLUE-STRIPED PROXY CARDS PREVIOUSLY DISTRIBUTED BY
UNITED DOMINION AND OAC, WHICH CONTAIN NO CERTIFICATION OF ELIGIBILITY, AS
DESCRIBED ABOVE, SHALL ALSO BE PRESUMED TO BE INTERESTED SHARES, UNLESS THE
SHAREHOLDER SIGNING THE PROXY CARD SIGNS AND PRESENTS EITHER (1) A PROXY CARD
BEARING A LATER DATE WITH A SIGNED CERTIFICATION OF ELIGIBILITY OR (2) A
SEPARATE CERTIFICATION OF ELIGIBILITY IN THE FORM PROVIDED TO SHAREHOLDERS BY
THE COMPANY. The Company's proxy soliciting firm, Morrow & Co., Inc., will upon
request in writing or by telephone furnish shareholders with WHITE proxy cards
or Trustee Instruction Cards, as applicable, that contain a certification of
eligibility or, if requested, the separate certification of eligibility for use
with a BLUE-STRIPED proxy card. The address and telephone number to be used in
requesting such proxy cards or separate certifications of eligibility are as
follows: Commercial Intertech Corp., c/o Morrow & Co., Inc., 909 3rd Avenue,
20th Floor, New York, New York 10022-4799 (telephone for holders in street
name: 1-800-662-5200; telephone for all others: 1-800-566-9061).
INSPECTORS OF ELECTION
The Company has retained Samuel H. Porter to serve as Presiding Inspector
of Election at the 831 Special Meeting. Mr. Porter is a partner at the law firm
of Porter, Wright, Morris & Arthur of Columbus, Ohio. As Presiding Inspector of
Election, Mr. Porter will have, among other responsibilities, authority to
determine the validity of any challenges to the certifications of eligibility
described above. The Company has agreed to pay Mr. Porter at his usual hourly
rate for his services, plus reasonable out-of-pocket costs and expenses
(including legal fees and expenses for assistance provided by his law firm at
its usual rates).
The Company has also retained CT Corporation System, Inc. to act as an
Inspector of Election under the direction of Mr. Porter and to assist in the
tabulation of votes and determination of quorums at the 831 Special Meeting.
The Company has agreed to pay CT Corporation System, Inc. its standard fees for
its services plus reasonable out-of-pocket costs and expenses.
Neither Mr. Porter nor CT Corporation System, Inc. is subject to any
disability known to the Company by reason of any conflict of interest with the
Company, United
-19-
<PAGE>
Dominion, OAC, or any of their respective affiliates or advisors. The Company is
indemnifying the Inspectors of Election against certain liabilities in
connection with possible litigation.
VOTING, SOLICITATION AND REVOCATION OF PROXIES
WHITE proxy cards solicited by the Board of Directors of the Company
accompany this Proxy Statement. A shareholder may use that proxy card if he or
she is unable to attend the 831 Special Meeting in person. The proxy may be
revoked in writing by the person giving it at any time before it is exercised by
notice of such revocation to the Secretary of the Company, 1775 Logan Avenue,
Youngstown, Ohio 44501, or by submitting a proxy card having a later date, or by
such person appearing at the 831 Special Meeting and electing to vote in person.
A shareholder may revoke a BLUE-STRIPED proxy card with a date later than the
date of the proxy card submitted to United Dominion and OAC or by appearing at
the 831 Special Meeting and electing to vote in person.
All proxies validly submitted and not revoked will be voted in the manner
specified therein in determining whether the Control Share Acquisition has been
approved by the First Majority. All proxy cards validly submitted will be voted
as to Common Shares and Preferred Shares the eligibility of which has been
certified in the manner specified therein in determining whether the Control
Share Acquisition has been approved by the Second Majority, except to the extent
that the presumption that the Common Shares and Preferred Shares represented by
the proxies are eligible to be voted in the Second Majority is rebutted. See
"Shares Outstanding and Eligible to be Voted in First Majority and Second
Majority." If no specification is made on a WHITE proxy card, the Common Shares
and Preferred Shares represented by a WHITE proxy card will be voted AGAINST
approval of the Control Share Acquisition. Neither abstentions nor broker non-
votes will be counted as voting in favor of the Control Share Acquisition. As a
consequence, abstentions and broker non-votes will have the same effect as votes
against approval of the Control Share Acquisition. PARTICIPANTS IN THE ESOPS
AND THE PLANS CAN VOTE COMMON AND PREFERRED SHARES , AS APPLICABLE, HELD IN THE
ESOPS AND THE PLANS ON THEIR BEHALVES BY USING THE ENCLOSED FORM OF TRUSTEE
INSTRUCTION CARD, WHICH WILL SERVE AS VOTING INSTRUCTION TO THE TRUSTEE FROM
SUCH PARTICIPANTS.
The costs of solicitation will be borne by the Company. In addition to
solicitation by mail, directors, officers and regular employees of the Company
may solicit proxies in person, by telephone, by personal interview, e-mail, or
by telecopier, none of whom will receive additional compensation for such
solicitations. The Company has requested banks, brokerage houses and other
custodians, nominees and fiduciaries to forward its
-20-
<PAGE>
solicitation materials to the beneficial owners of the Common Shares and
Preferred Shares they hold of record and obtain authorization for, and
appropriate certification in connection with, the execution of proxy cards. The
Company will reimburse these record holders for customary mailing expenses
incurred by them in forwarding these materials. The Company also has retained
Morrow & Co., Inc. to assist the Company in connection with communications with
shareholders and to provide other services in connection with the solicitation
and the Revised Offer. The fee of Morrow & Co. is estimated to be [ ]
plus reasonable out-of-pocket costs and expenses.
Except as described above, neither the Company nor, to the best of the
Company's knowledge, any person acting on its behalf has retained any other
person to make solicitations or recommendations to security holders on its
behalf in connection with the transactions contemplated by the Revised Offer.
OTHER FEES
Pursuant to a letter agreement dated June 28, 1996 (the "Letter
Agreement"), the Company has retained Goldman Sachs as financial advisor with
respect to the Revised Offer and certain other possible transactions. In
addition, Goldman Sachs will act as exclusive financial advisor with respect to
any proxy or consent solicitation (including this solicitation) involving United
Dominion and OAC. Pursuant to the Letter Agreement, the Company has agreed to
pay to Goldman Sachs:
(a) a fee of $250,000 payable on the date of the Letter Agreement;
(b) an additional fee of $250,000 in the event of the commencement by
United Dominion or any affiliate or other party of a tender offer, payable upon
the commencement of the tender offer;
(c) if 15% or more of the outstanding Shares of the Company are acquired by
United Dominion or any other person or group (including the Company), in one or
a series of transactions or if all or substantially all of the assets of the
Company are transferred, in one or a series of transactions, by way of a sale,
distribution or liquidation, an additional fee equal to 0.85% of the aggregate
value of all such transactions (in the event at least 50% of the outstanding
Shares of the Company are acquired by United Dominion or any other person or
group, including the Company, such aggregate value shall be determined as if
such acquisition were of 100% of the Shares of the Company);
(d) if the Company or any other entity formed or owned in substantial part
or controlled by the Company or one or more members of senior management of the
Company or any employee benefit plan of the Company or any of its subsidiaries
effects certain recapitalization transactions not covered by subparagraph (c), a
fee (to be negotiated) equal to between 0.85% and 1.0% of the aggregate value of
such transaction;
-21-
<PAGE>
(e) in the event that the Company acquires the securities or assets of
another company or sells, distributes or liquidates all or a portion of the
assets of the Company, including any pension-related assets, or sells or
distributes securities of the Company, whether such distribution is made by
dividend or otherwise, and no fee has become payable to Goldman Sachs with
respect to such transaction pursuant to subparagraphs (c) and (d) above,
additional fees customary to such transactions based on the aggregate value of
the transaction; and
(f) subject to certain conditions, in the event no transaction of the type
described in subparagraphs (c) and (d) has been consummated by January 1, 1997,
a fee of $500,000 on each such date as of which no transaction has been
consummated: January 1, 1997, April 1, 1997, July 1, 1997, October 1, 1997,
January 1, 1998 and April 1, 1998 less any amounts paid under subparagraphs (a)
and (b) above.
Any fees paid pursuant to subparagraphs (a), (b) and (f) above shall be
credited against any fees payable pursuant to subparagraphs (d) and (e) above.
The Company has also agreed to reimburse Goldman Sachs periodically for its
reasonable out-of-pocket expenses, including the fees and disbursements of its
attorneys, plus any sales, use or similar taxes (including additions to such
taxes, if any) arising in connection with any matter referred to in the Letter
Agreement. In addition, the Company has agreed to indemnify Goldman Sachs
against certain liabilities, including liabilities under federal securities
laws.
OTHER MATTERS
No matter other than the Control Share Acquisition is to be considered at
the 831 Special Meeting. However, if any procedural matter properly comes
before the 831 Special Meeting, the proxies also confer authority to the persons
named in the accompanying proxy to vote the Common Shares and Preferred Shares
to which the proxy relates on such matter at their discretion.
The Acquiring Person Statement delivered to the Company by United Dominion
and OAC, Exhibit A to this Proxy Statement, and the Revised Offer to Purchase
contain important information and should be read by shareholders before any
decision is made with respect to voting on the Control Share Acquisition.
Only holders of record of the Common Shares and Preferred Shares as of the
close of business on the Record Date will be entitled to vote at the 831 Special
Meeting or any adjournment thereof. Shareholders of record on the Record Date
will retain their voting rights for the 831 Special Meeting even if such Common
Shares and Preferred Shares are sold after the Record Date or are tendered
pursuant to the Revised Offer, whether before or after the Record Date. The
tender of Shares pursuant to the Revised Offer does not constitute the grant
-22-
<PAGE>
to United Dominion or OAC of a proxy or any voting rights with respect to the
tendered Shares until such time as such Shares are accepted for payment by OAC.
Proxies representing any Common Shares and Preferred Shares held in the
names of a brokerage firm, bank, bank nominee or other institution on the Record
Date can only be executed upon receipt of specific instructions by such
brokerage firm, bank, bank nominee or other institution. Accordingly, please
contact the person responsible for your account and instruct that person to
execute the WHITE proxy card with respect to Common Shares and Preferred Shares
you own beneficially.
Participants in the ESOPs can only vote Common Shares and Preferred Shares
held in the ESOPs on their behalf by instructing the ESOP Trustee on the Trustee
Instruction Card provided to participants for that purpose.
Similarly, participants in the Plans can only vote Common Shares held in
the Plans on their behalves by instructing the Plan Trustee on the Trustee
Instruction Card provided to participants for that purpose.
PLEASE SIGN, DATE AND MAIL THE ACCOMPANYING WHITE PROXY CARD PROMPTLY. BY
DATING, SIGNING AND MAILING THE ACCOMPANYING WHITE PROXY CARD, ANY PROXY
PREVIOUSLY SIGNED BY YOU WITH RESPECT TO THE CONTROL SHARE ACQUISITION WILL BE
AUTOMATICALLY REVOKED.
INTERESTS OF CERTAIN PERSONS
The Stock Option and Award Plans; Form of Option Agreement:
- -----------------------------------------------------------
The Company's Stock Option and Award Plans allow for the grant of a variety
of stock incentive instruments, including nonqualified (i.e., not tax-preferred)
and incentive stock options, stock appreciation rights, restricted stock and
performance shares. For many years, the Company has granted stock options to
its key executives to create a direct link between shareholder and executive
interests. In the past the Company has also periodically granted time-lapse
restricted stock to its key executives.
The performance share program, first initiated in fiscal 1993, is a longer-
term incentive program designed to motivate key executives whose efforts result
in the achievement of sustained financial results leading to increased
shareholder value. Designed to replace substantially the restricted stock
grants previously made to key
-23-
<PAGE>
executives, the Management Evaluation and Compensation Committee of the Board of
Directors (the "Committee") believes performance shares better align executive
and shareholder financial interests. The Committee selected 63 executives
throughout the Company for participation in the performance share program.
Depending on responsibilities within the Company, performance shares are
earned based on average corporate and/or group Return On Equity (ROE),
divisional operating income and, for certain executives, individual specific
objectives over a three-year performance period. In future years, the Committee
may consider other measures of shareholder value and performance periods, as
appropriate, in light of the Company's strategic objectives. Threshold levels
of ROE and, in certain cases, operating income must be achieved before any
distributions are made.
Historically the Company has granted stock options on an annual basis while
performance shares are granted every other year. In determining stock option
awards, the Committee considers such factors as median competitive award levels,
the size of previous stock option awards and Company and individual performance.
The Company has modified its practice of awarding restricted stock to key
executives. Restricted stock is now used only in special circumstances, such as
to attract new key executives for employment with the Company and in other
comparable non-recurring circumstances.
Pursuant to the terms of the Company's Stock Option and Award Plan of 1989,
the Stock Option and Award Plan of 1993 and the Stock Option and Award Plan of
1995 (collectively, the "Stock Option and Award Plans"), the Committee may
provide, upon a change of control (as defined in the Stock Option and Award
Plans and which would include the consummation of the Revised Offer), that (i)
any and all stock appreciation rights outstanding on the date that such change
of control is determined to have occurred and any and all stock options awarded
under the Stock Option and Award Plans not previously exercisable and vested
shall become fully exercisable and vested and (ii) restrictions applicable to
any and all restricted stock and performance share awards shall lapse and such
shares and awards shall be fully vested.
Similarly, pursuant to the terms of the Company's form of Option Agreement,
the options granted thereunder and not yet exercisable shall become exercisable
and vested upon a change of control or a potential change of control (as both
terms are defined in the Option Agreement and which would include the
consummation of the Revised Offer).
Employment Agreements:
- ----------------------
-24-
<PAGE>
On July 27, 1994, the Company entered into an Employment Agreement with
Paul J. Powers. Mr. Powers' Employment Agreement expires on February 28, 2000.
The Employment Agreement provides for the payment of a base salary which can be
increased at the discretion of the Company. Mr. Powers' annual base salary for
1995 was $481,667. Additionally, Mr. Powers shall be eligible to (1) receive
cash bonuses as part of the Company's Salaried Employee Incentive Plan ("SEIP");
and (2) participate in other incentive, stock option, profit sharing and similar
plans maintained by the Company for the benefit of its executives. In addition,
the employment agreement with Mr. Powers provides that in the event of his
termination without cause (as defined in his employment agreement), Mr. Powers
shall receive a lump sum payment equal to two and one-half times his most recent
annual cash compensation. Finally, Mr. Powers will be included in all other
employee benefit plans to the extent that he is eligible. Such plans include,
but are not limited to, group life insurance plans, hospitalization and medical
plans and long-term disability plans.
On May 18, 1992, the Company entered into an Employment Agreement with
Bruce C. Wheatley and on December 3, 1993, the Company entered into an
Employment Agreement with Mark G. Kachur. Mr. Wheatley's Employment Agreement
is for a term of three years and Mr. Kachur's Employment Agreement is for a term
of three years. The Employment Agreement with Mr. Wheatley provides for a base
salary of $200,000 and Mr. Kachur's Employment Agreement provides for a base
salary of $240,000. Both employment agreements provide for participation in the
Company's SEIP as well as other Company benefit programs, including group life
insurance, hospitalization and medical plans. These Employment Agreements also
provide for the grant of stock options under certain stock option plans, subject
to vesting requirements, and also provide for participation in a supplemental
deferred compensation arrangement. In the event of a change in control of the
Company, these Employment Agreements provide for a lump sum severance payment in
the amount of two years' cash compensation as well as continued participation in
Company benefit programs for two years following termination.
Termination Benefits:
- ---------------------
On February 15, 1988, the Company entered into a Severance Compensation and
Consulting Agreement with Paul J. Powers. On September 28, 1989, the Company
entered into separate Severance Compensation Agreements with each of Gilbert M.
Manchester, William W. Cushwa, Steven J. Hewitt, Edward J. Barnard, Patrick C.
Reardon, Kenneth W. Marcum and Robert A. Calcagni. On June 25, 1992, the
Company entered into a Severance Compensation Agreement with John Gilchrist, on
July 20, 1992 with Bruce C. Wheatley, on March 25, 1995 with Mark G. Kachur and,
on February 29, 1996, with Hubert Jacobs van Merlen. The Severance Compensation
and Consulting
-25-
<PAGE>
Agreement and the Severance Compensation Agreements are referred to collectively
as the "Agreements." The Agreements were the result of a determination by the
Board of Directors that it is appropriate and in the best interest of the
Company and its shareholders that, in the event of a possible change in control
of the Company, the stability and continuity of management would be maintained,
free of the distractions incident to any change in control.
For purposes of the Agreements, a "change in control" shall be deemed to
have occurred if (i) there shall be consummated (a) any consolidation or merger
of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's Common Stock would be
converted into cash, securities or other property, other than a merger of the
Company in which the holders of the Company's Common Stock immediately prior to
the merger have substantially the same proportionate ownership of common stock
of the surviving corporation immediately after the merger, or (b) any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company, or (ii) the
shareholders of the Company shall approve any plan or proposal for the
liquidation or dissolution of the Company, or (iii) any person [as such term is
used in Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")], other than the Company or a subsidiary or any
employee benefit plan sponsored by the Company or a subsidiary, shall become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company representing 30% or more of the combined voting power
of the Company's then outstanding securities ordinarily (and apart from rights
accruing in special circumstances) having the right to vote in the election of
directors, as a result of a tender or an exchange offer, open market purchases,
privately negotiated purchases or otherwise, or (iv) at any time during a period
of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company shall cease for any reason to
constitute at least the majority thereof, unless the election or the nomination
for election by the Company's shareholders of each new director during such two-
year period is approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such two-year period.
Benefits are payable under the Agreements only if a change in control has
occurred and within two years after such change in control the officer's
employment is terminated involuntarily without cause or voluntarily by the
officer for specified reasons, such as demotion, reduction in base salary,
relocation, loss of benefits or other changes. The principal benefits to be
provided to Mr. Powers under his Agreement are (i) a lump sum payment equal to
two times his annual cash compensation (base salary and incentive compensation),
(ii) continued participation in the Company's employee benefit programs
-26-
<PAGE>
for three years following termination, and (iii) a consulting fee equal to his
annual cash compensation in consideration for consulting services over a one-
year period after termination. The principal benefits to be provided to Messrs.
Manchester, Cushwa, Hewitt, Barnard, Reardon, Marcum, Jacobs van Merlen,
Calcagni, Kachur, Wheatley, and Gilchrist under the Agreements are (i) a lump
sum payment equal to two times the officer's annual cash compensation (base
salary and incentive compensation) and (ii) continued participation in the
Company's employee benefit programs for two years following termination. If the
officer's termination occurs after age 62, separation payments are reduced by a
factor based upon the number of months remaining until the officer reaches age
65. The Agreements are not employment agreements, and do not impair the right of
the Company to terminate the employment of the executive with or without cause
prior to a change in control, or the right of the executive to voluntarily
terminate his employment. Each Agreement generally terminates on the earlier of
the date on which the officer reaches age 65 or five years from the date of the
Agreement, provided that the term of the Agreement will be automatically
extended for additional one-year periods until the officer reaches age 65 or the
Company or the officer determines not to extend the Agreement.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of June 30, 1996 (unless a
different date is specified in the notes to the table) with respect to (a) each
current director of the Company, (b) each of the Named Executive Officers (as
defined in Item 402(a) (3) of Regulation S-K of the Exchange Act) and (c) all
directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Amount and Nature Percent
Name of Beneficial of Beneficial of All Voting
Owner Ownership Shares**
- -------------------------------------- --------------------------------- --------------
<S> <C> <C>
William J. Bresnahan 300 *
Charles B. Cushwa III 220,380 (1)(4)(5) 1.48%
(8)(12)(16)
William W. Cushwa 238,925 (1)(2)(3)(4)(6)(7) 1.61%
(8)(13)(14)(16)(17)
John M. Galvin 5,750 (8) *
John Gilchrist 32,032 (8)(10)(14) *
Richard J. Hill 10,397 (8)(9) *
Neil D. Humphrey 6,635 (8)(9) *
Hubert Jacobs van Merlen 13,103 *
Mark G. Kachur 32,086 (8) *
William E. Kassling 5,000 *
Gerald C. McDonough 4,500 (8) *
C. Edward Midgley 10,000 *
Paul J. Powers 329,041 (2)(8)(10)(14) 2.22%
George M. Smart 2,750 (8) *
</TABLE>
-27-
<PAGE>
<TABLE>
<S> <C> <C>
Don E. Tucker 136,855 (1)(2)(8)(11) *
Bruce E. Wheatley 34,714 (8)(15) *
All Directors and Executive Officers 1,198,805 8.08%
as a Group (19 people)
</TABLE>
*less than 1%
**Percent of All Voting Shares based on total outstanding Common Shares and
Preferred Shares as of July 19, 1996.
(1) Does not include Common Shares owned by the members of the above-mentioned
directors' families who share their homes, as follows: of Mr. Charles
Cushwa - 947 shares; of Mr. William Cushwa - 26,308 shares; and of Mr.
Tucker - 1,146 shares. Beneficial ownership thereof is disclaimed by the
respective directors.
(2) Includes the beneficial interest in Common Shares (fractional shares not
shown) credited to the accounts of the above-mentioned beneficial owners by
the Trustee acting under the provisions of the Company's Employee Savings
and Stock Purchase Plan, as follows: Mr. William Cushwa - 4,347 shares;
Mr. Powers - 1,630 shares; and Mr. Tucker - 9,446 shares.
(3) Includes Common Shares held by the directors as custodians for their minor
children as follows: minor children of Mr. William Cushwa - 4,011 shares.
(4) Charles B. Cushwa III and William W. Cushwa are two of three beneficiaries
of a trust, of which they are not trustees, which consists of 294,000
Common Shares the income from which will be paid to the beneficiaries
equally during their lives. These shares are not included in the amounts
shown in the table.
(5) Includes 44,000 Common Shares held in trust, in which the children of
Charles B. Cushwa III have a remainder interest, and of which National City
Bank, N.E. and Charles B. Cushwa III are co-trustees. Beneficial ownership
thereof is disclaimed by Mr. Charles B. Cushwa III.
(6) Does not include 11,250 Common Shares held in trust, of which William W.
Cushwa is not a trustee, for the benefit of his child and of which
beneficial ownership is disclaimed by Mr. William W. Cushwa.
(7) Includes 44,000 Common Shares held in trust, in which the children of
William W. Cushwa have a remainder interest, and of which National City
Bank, N.E. and William W. Cushwa are co-trustees. Beneficial ownership
thereof is disclaimed by Mr. William W. Cushwa.
(8) Includes Common Shares acquirable within 60 days of June 30, 1996 upon
exercise of options issued under the Company's Stock Option and Award Plans
as follows: Mr. Charles Cushwa - 2,250 shares; Mr. William Cushwa - 1,875
shares; Mr. Galvin - 2,250 shares; Mr. Gilchrist - 11,250 shares; Mr.
Hill - 2,250 shares; Mr. Humphrey - 1,500 shares; Mr. McDonough - 2,250
shares; Mr. Powers - 137,250 shares; Mr. Wheatley - 11,250 shares; Mr.
Kachur - 7,500 shares; Mr. Smart - 750 shares; and Mr. Tucker - 750 shares.
-28-
<PAGE>
(9) Includes Common Shares (fractional shares not shown) credited to the
accounts of the above-mentioned beneficial owners by the administrator of
the Company's Automatic Dividend Reinvestment Plan, as follows: Mr. Hill -
3,147 shares; and Mr. Humphrey - 1,485 shares.
(10) Includes in each case 317 Preferred Shares (fractional shares not shown)
and the following number of Common Shares (fractional shares not shown)
credited to the accounts of the above-mentioned beneficial owners by the
Trustee acting under the provisions of the Company's 401(k) plan: Mr.
Gilchrist - 441 shares; and Mr. Powers - 5,011 shares.
(11) Includes 206 Preferred Shares (fractional shares not shown) and 5,036
Common Shares (fractional shares not shown) credited by the Trustee acting
under the provisions of the Company's 401(k) plan.
(12) Includes 38,396 Common Shares held in trust, in which the children of
Charles B. Cushwa III have a remainder interest, and of which National City
Bank, N.E. and Charles B. Cushwa III are co-trustees. Beneficial ownership
thereof is disclaimed by Mr. Charles B. Cushwa III.
(13) Includes 61,000 Common Shares held in trust, in which the children of
William W. Cushwa have a remainder interest, and of which National City
Bank, N.E. and William W. Cushwa are co-trustees. Beneficial ownership
thereof is disclaimed by Mr. William W. Cushwa.
(14) Includes in each case two Common Shares (fractional shares not shown) as a
result of participation in the Company's Employee Stock Ownership Plan and
the following number of Preferred Shares (fractional shares not shown) as a
result of participation in the Company's Employee Stock Ownership Plan:
Mr. William Cushwa - 324 shares; Mr. Gilchrist - 398 shares; and Mr.
Powers - 719 shares.
(15) Includes 96 Preferred Shares (fractional shares not shown) and 1,890 Common
Shares (fractional shares not shown) held under the provisions of the
Company's 401(k) plan. Includes 110 Preferred Shares (fractional shares
not shown) as a result of participation in the Company's Employee Stock
Ownership Plan.
(16) Charles B. Cushwa III and William W. Cushwa are two of three beneficiaries
of a trust, of which they are not trustees, containing 75,000 shares
distribution of which is dependent upon the resolution of certain probate
estate matters. The shares are not included in the amounts shown in the
table.
(17) Includes 300 Preferred Shares (fractional shares not shown) and 903 Common
Shares (fractional shares not shown) credited by the trustee acting under
the provisions of the Company's 401(k) plan.
The information set forth above concerning the security holdings of the
beneficial owners is based on information received from the persons named. None
of such beneficial owners, directly or indirectly, owns beneficially any equity
securities of any subsidiary of the Company.
-29-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The name of any person or "group" (as that term is used in the Exchange
Act) known by the Company to be the beneficial owner of more than five percent
(5%) of any class of the Company's voting securities as of June 30, 1996 is set
forth below:
<TABLE>
<CAPTION>
Amount and
Title Name and Address Nature of Percent Percent of
of of Beneficial of All Voting
Class Beneficial Owner Ownership Class** Shares**
- ----------- ----------------------- ------------- -------- -----------
<S> <C> <C> <C> <C>
Common National City Bank N.E. 989,707 (1) 7.17% 6.67%
P.O. Box 450
Youngstown, OH 44501
Series B Mellon Bank N.A. 1,039,657 (2) 100.00% 7.00%
Preferred P.O. Box 444
Pittsburgh, PA 15230
</TABLE>
** Percent of All Voting Shares and Percent of Class based on total
outstanding Common Shares and Preferred Shares as of July 19, 1996.
(1) This figure includes 172,409 Common Shares held in trust by National City
Bank, N.E. (trustee) for the benefit of participants in the Company's
Employee Savings and Stock Purchase Plan. This figure also includes 1,597
Common Shares held in trust by National City Bank, N.E. (trustee) for the
benefit of participants in the Company's Non-Qualified Stock Purchase Plan.
National City Bank has sole voting power over 644,032 shares and shared
voting power over 170,806 shares. National City Bank has sole investment
power over 277,613 shares and shared investment power over 712,094 shares.
(2) This figure represents all of the outstanding ESOP Convertible Preferred
Stock-Series B held of record by Mellon Bank N.A. (trustee) for the benefit
of participants in the ESOPs. The trust for these plans contains
provisions for pass-through voting rights to the employee participants in
the plans.
Mellon Bank has shared voting power and shared investment power over all
Preferred Shares.
NO DISSENTERS RIGHTS
Dissenters rights are not available to the shareholders of an "issuing
public corporation" in connection with the authorization of a "control share
acquisition" under the Ohio Control Share Acquisition Law.
-30-
<PAGE>
SHAREHOLDER PROPOSALS
Proposals of security holders to be presented at the 1997 Annual Meeting of
shareholders of the Company must be in proper form and received by the Company
by October 1, 1996.
By Order of the Board of Directors,
Shirley M. Shields,
Secretary
Youngstown, Ohio
August __, 1996
-31-
<PAGE>
Exhibit A
ACQUIRING PERSON STATEMENT
Pursuant to Section 1701.831 of
the Ohio Revised Code/*/
COMMERCIAL INTERTECH CORP.
(Name of Issuing Public Corporation)
1775 LOGAN AVENUE,
YOUNGSTOWN, OHIO 44510
(Address of Principal Executive Offices)
OPUS ACQUISITION CORPORATION
and
UNITED DOMINION INDUSTRIES LIMITED
(Acquiring Persons)
This Acquiring Person Statement is being delivered to Commercial Intertech
Corp., an Ohio corporation (the "Company"), pursuant to Section 1701.831 of the
Ohio Revised Code by United Dominion Industries Limited, a Canadian company
("Parent"), and Opus Acquisition Corporation, a Delaware corporation and an
indirect wholly owned subsidiary of Parent (the "Purchaser"), and relates to the
transactions contemplated by the tender offer by the Purchaser to purchase all
outstanding Common Shares, par value $1.00 per share (including the associated
preferred share purchase rights), of the Company ("Common Shares") (including
Common Shares issuable upon conversion of shares of ESOP Convertible Preferred
Stock Series B, without par value, of the Company ("Preferred Shares")), upon
the terms and subject to the conditions set forth in the Offer to Purchase dated
July 12, 1996 (as the same may hereafter be amended from time to time, the
"Offer to Purchase"), a copy of which is attached hereto as Exhibit A and
incorporated herein by reference.
/*/ Notwithstanding the making and delivery of this Statement, all rights are
reserved (i) to challenge the constitutionality, validity and/or legality of all
or any part of Section 1701.831 and related provisions of the Ohio Revised Code
and their application to the Offer to Purchase and/or (ii) to seek an amendment
to the Code of Regulations of the Company to provide that Section 1701.831 and
related provisions of the Ohio Revised Code do not apply to control share
acquisitions of Common Shares, including pursuant to the Offer to Purchase.
<PAGE>
ITEM 1. IDENTITY OF THE ACQUIRING PERSON.
The acquiring persons are United Dominion Industries Limited ("Parent") and Opus
Acquisition Corporation (the "Purchaser"). The address of the principal
executive offices of the Purchaser and Parent are 2300 One First Union Center,
Charlotte, North Carolina 28202-6039.
The information set forth in the Introduction and in the section entitled
"Certain Information Concerning Parent and the Purchaser" of the Offer to
Purchase is incorporated herein by reference.
ITEM 2. DELIVERY OF ACQUIRING PERSON STATEMENT.
This Acquiring Person Statement is given pursuant to Section 1701.831 of the
Ohio Revised Code.
The Purchaser and Parent hereby request that a special meeting of the
shareholders of the Company, which is required to be called by the directors of
the Company pursuant to division (C) of Section 1701.831 of the Ohio Revised
Code as a result of the delivery of this Acquiring Person Statement, be held no
sooner than thirty (30) days after the Company's receipt of this Acquiring
Person Statement.
ITEM 3. OWNERSHIP OF SHARES BY ACQUIRING PERSON.
On the date of this Acquiring Person Statement, the Purchaser owns 500 Common
Shares and no Preferred Shares, and Parent owns 1,000 Common Shares (500
directly and 500 indirectly through the Purchaser) and no Preferred Shares.
ITEM 4. RANGE OF VOTING POWER.
The Purchaser and Parent propose to acquire all of the outstanding Common Shares
in accordance with and as contemplated by the terms of the Offer to Purchase.
The proposed control share acquisition, if consummated, would result in the
acquisition of a majority or more of the voting power as described in
subparagraph (c) of paragraph (Z)(1) of Section 1701.01 of the Ohio Revised
Code.
ITEM 5. TERMS OF THE PROPOSED CONTROL SHARE ACQUISITION.
The offer price is $27 per Common Share (and associated Right), net to the
seller in cash without interest thereon, subject to change as described in the
section entitled "Terms of the Offer" of the Offer to Purchase incorporated
herein by reference. Other information as set forth in the Offer to Purchase is
incorporated herein by reference. For a description of the terms of the
proposed control share acquisition, reference is made in particular to the
information set forth in the Introduction, and in the sections entitled "Terms
of the
-2-
<PAGE>
Offer", "Procedures for Tendering Shares", "Withdrawal Rights", "Acceptance for
Payment and Payment", "Source and Amount of Funds", "Purpose of the Offer; Plans
for the Company", "Dividends and Distributions", "Certain Conditions of the
Offer" and "Certain Legal Matters" of the Offer to Purchase.
ITEM 6. REPRESENTATIONS OF LEGALITY; FINANCIAL CAPACITY.
The Purchaser and Parent represent that the proposed control share acquisition
will not be contrary to law and that they have the financial capacity to make
such proposed control share acquisition. The facts upon which these
representations are based are set forth in reasonable detail in the sections
entitled "Certain Information Concerning Parent and the Purchaser", "Certain
Legal Matters" and "Source and Amount of Funds" of the Offer to Purchase and
such information is incorporated herein by reference.
OPUS ACQUISITION CORPORATION
Dated: July 12, 1996 By: /s/ B. Bernard Burns, Jr.
-------------------------
Name: B. Bernard Burns, Jr.
Title: Vice President and Secretary
UNITED DOMINION INDUSTRIES LIMITED
Dated: July 12, 1996 By: /s/ B. Bernard Burns, Jr.
-------------------------
Name: B. Bernard Burns, Jr.
Title: Senior Vice President,
General Counsel and Secretary
-3-
<PAGE>
Exhibit B
---------
PROXY CARD/TRUSTEE INSTRUCTION CARD
CERTIFICATION OF ELIGIBILITY
It is the Company's position that a shareholder must sign the
certification of eligibility on the proxy card or Trustee Instruction Card or
the separate certification of eligibility in the form provided to shareholders
by the Company in order to be eligible to vote in determining whether the
Control Share Acquisition has been approved by the Second Majority (as defined
in the Proxy Statement). IT IS ALSO THE COMPANY'S POSITION THAT COMMON SHARES
AND PREFERRED SHARES REPRESENTED BY A PROXY CARD OR TRUSTEE INSTRUCTION CARD
WITHOUT A COMPLETED CERTIFICATION SHALL BE PRESUMED TO BE INTERESTED SHARES (AS
DEFINED IN THE ATTACHED PROXY STATEMENT) THAT ARE INELIGIBLE TO VOTE IN
CONNECTION WITH THE SECOND MAJORITY AUTHORIZATION AS DESCRIBED ON PAGE 11 OF THE
ATTACHED PROXY STATEMENT. If either of the following circumstances apply to
Common Shares and Preferred Shares owned by a shareholder, the shareholder is
entitled to sign the certification as to those Common Shares and Preferred
Shares:
a. The Common Shares and Preferred Shares were owned by the
shareholder before June 27, 1996, and the shareholder is not United
Dominion, OAC, an officer of the Company elected or appointed by its Board
of Directors, or an employee of the Company who is also a director of the
Company; or
b. The Common Shares and Preferred Shares were purchased by the
shareholder on or after June 27, 1996, and the aggregate purchase price of
all Common Shares and Preferred Shares, together with any Common Shares and
Preferred Shares purchased by any person acting in concert with the
shareholder, on or after June 27, 1996, and that will be held as of the
date of the 831 Special Meeting, is $250,000 or less.
If, however, any of the following circumstances apply to any of the
Common Shares and Preferred Shares represented by the proxy card, the
shareholder is not entitled to, and must not, sign the certification as to such
Common Shares and Preferred Shares:
1. The shareholder is United Dominion, OAC, an officer of the Company
elected or appointed by its Board of Directors, or an employee of the
Company who is also a Director of the Company; or
2. The sum of
<PAGE>
(i) the aggregate consideration paid for the Common Shares and
Preferred Shares acquired, directly or indirectly, by the
shareholder and any person acting in concert with the shareholder
during the period beginning on or after June 27, 1996 and ending
on or prior to August 7, 1996; and
(ii) the aggregate consideration paid for the Common Shares and
Preferred Shares acquired, directly or indirectly, by the
shareholder and any person acting in concert with the shareholder
after August 7, 1996 and on or prior to the 831 Special Meeting
is more than $250,000.
In addition, a shareholder is not entitled to sign the certification
with respect to Common Shares and Preferred Shares that were sold after August
7, 1996 to a third person (the "Buyer") known to the shareholder to meet the
test of Paragraph (1) or (2) above.
IF THE SHAREHOLDER SIGNS THE CERTIFICATION OF ELIGIBILITY BUT LATER
LEARNS THAT THE CIRCUMSTANCES IN EITHER (1) OR (2) ABOVE APPLY TO THE COMMON
SHARES AND PREFERRED SHARES, OR THE SHAREHOLDER LATER TRANSFERS COMMON SHARES
AND PREFERRED SHARES TO ANOTHER PERSON WHO THE SHAREHOLDER LEARNS IS NOT, OR
AFTER GIVING EFFECT TO THE TRANSFER WILL NOT BE, ELIGIBLE TO SIGN THE
CERTIFICATION, OR THE SHAREHOLDER LATER LEARNS OTHER FACTS THAT CHANGE THE
ELIGIBILITY OF THE COMMON SHARES OR THE PREFERRED SHARES TO VOTE IN DETERMINING
WHETHER THE CONTROL SHARE ACQUISITION HAS BEEN APPROVED BY THE SECOND MAJORITY,
THE SHAREHOLDER SHOULD (AND BY SIGNING THE CERTIFICATION UNDERTAKES TO) SO
NOTIFY THE COMPANY BY USE OF THE DUPLICATE PROXY CARD AND THE ADDITIONAL
ENVELOPE PROVIDED.
<PAGE>
[FORM OF PROXY FOR COMMON SHARES NOT IN ESOPS OR PLANS]
[FRONT]
COMMERCIAL INTERTECH CORP.
THIS PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 30, 1996 IS SOLICITED BY THE BOARD OF DIRECTORS
At the Special Meeting of Shareholders of COMMERCIAL INTERTECH CORP. to be held
on August 30, 1996, and at any adjournment thereof, [ ],
[ ], and [ ], and each of them,
with several powers of substitution and resubstitution, are hereby authorized to
represent me and vote my shares upon the proposal to authorize as required by
Section 1701.831 of the Ohio Revised Code the proposed control share acquisition
by Opus Acquisition Corporation, as more fully described in the Company's proxy
statement dated July __, 1996 (the "Proxy Statement"):
Proposed Control Share Acquisition by FOR AGAINST ABSTAIN
Opus Acquisition Corporation [ ] [ ] [ ]
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE AGAINST THE
PROPOSAL
[REVERSE]
[CERTIFICATION OF ELIGIBILITY TO VOTE]
As of the date upon which the undersigned signs and delivers this Proxy Card
EITHER
[ ] All of the Common Shares represented by this Proxy Card are eligible to be
voted in determining whether the proposed control share acquisition has
been approved by the "Second Majority" (as defined in the Proxy Statement).
Instruction: check the above box if all of the Common Shares represented by
this proxy meet the eligibility criteria stated in Exhibit B of the Proxy
Statement.
OR
[ ] _________ of the Common Shares represented by this Proxy Card are eligible
to be voted in determining whether the proposed control share acquisition
has been approved by the Second Majority.
Instruction: check the above box if some, but not all, of the Common
Shares represented by this proxy meet the eligibility criteria stated in
Exhibit B of the Proxy Statement and fill in the blank with the number of
Common Shares that are eligible.
<PAGE>
THE COMMON SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED AS DIRECTED, OR
IF NO DIRECTION IS SPECIFIED, WILL BE VOTED AGAINST THE PROPOSAL.
IF NO CERTIFICATION IS MADE, IT WILL BE PRESUMED THAT NONE OF THE COMMON SHARES
REPRESENTED BY THIS PROXY CARD IS ELIGIBLE TO BE VOTED IN DETERMINING WHETHER
THE PROPOSED CONTROL SHARE ACQUISITION HAS BEEN APPROVED BY THE SECOND MAJORITY.
PARTICIPANTS IN THE ESOPS CAN ONLY VOTE COMMON SHARES AND PREFERRED SHARES HELD
IN THE ESOPS ON THEIR BEHALF BY INSTRUCTING THE ESOP TRUSTEE ON THE TRUSTEE
INSTRUCTION CARD PROVIDED TO PARTICIPANTS FOR THAT PURPOSE.
SIMILARLY, PARTICIPANTS IN THE PLANS CAN ONLY VOTE SHARES HELD IN THE PLANS ON
THEIR BEHALF BY INSTRUCTING THE PLAN TRUSTEE ON THE TRUSTEE INSTRUCTION CARD
PROVIDED TO PARTICIPANTS FOR THAT PURPOSE.
By signing below, you (a) instruct that this Proxy Card be voted as marked; (b)
certify the eligibility of your Common Shares to be voted as indicated above;
and (c) UNDERTAKE TO NOTIFY THE COMPANY IF, AT ANY TIME ON OR AFTER THE DATE YOU
SIGN THIS PROXY CARD AND ON OR BEFORE THE DATE OF THE SPECIAL MEETING OF
SHAREHOLDERS (THE "831 SPECIAL MEETING"), any of the following should occur:
(1) you, or any other persons acting in concert with you, acquire additional
Common Shares and the aggregate consideration paid or given by you, and any
other persons acting in concert with you, for all Common Shares acquired,
indirectly or directly, by you, and any persons acting in concert with you,
on or after June 27, 1996 exceeds $250,000;
(2) you transfer Common Shares to another person who, to your knowledge, is not,
or after giving effect to the transfer will not be, eligible to sign the
certification of eligibility; or
(3) to your knowledge, the eligibility of any of the Common Shares to which this
Certificate of Eligibility relates otherwise changes.
SIGNATURE(S) DATE
- --------------------------- -------------------------
<PAGE>
SIGNATURE(S) DATE
- -------------------------- ------------------------
NOTE: Please sign your name exactly as it appears in print and, in case of
multiple or joint ownership, all should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
<PAGE>
[FORM OF TRUSTEE INSTRUCTION CARD FOR COMMON SHARES IN
PLANS -- NON-QUALIFIED STOCK PURCHASE PLAN]
[FRONT]
CONFIDENTIAL VOTING INSTRUCTIONS
TO: NATIONAL CITY BANK, N.E.
AS TRUSTEE ON BEHALF OF THE
NON-QUALIFIED STOCK PURCHASE PLAN
OF COMMERCIAL INTERTECH CORP.
("TRUSTEE")
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF SHAREHOLDERS
UNDER SECTION 1701.831 OF THE OHIO REVISED
CODE TO BE HELD ON AUGUST 30, 1996
The undersigned hereby directs the Trustee to vote all Common Shares of
Commercial Intertech Corp. allocated to the undersigned's account under the plan
on the record date for the Special Meeting of Shareholders of Commercial
Intertech Corp., to be held at the [ ], Youngstown, Ohio on Friday,
August 30, 1996 at [ ] a.m., or at any adjournments or postponements
thereof, upon the matter as set forth in the Notice of Special Meeting and Proxy
Statement ("Proxy Statement"), receipt of which is hereby acknowledged.
The Trustee is directed to vote as specified below, or if no specification is
made, AGAINST the proposed Control Share Acquisition by Opus Acquisition
Corporation. To vote in accordance with the Board of Directors'
recommendations, just sign below without checking any boxes. If you fail to
sign and return these instructions, the Trustee will vote, in its sole
discretion, any shares held under the plan which are not voted.
<PAGE>
PLEASE SIGN, DATE AND RETURN THIS CONFIDENTIAL VOTING SHEET PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. THESE CONFIDENTIAL VOTING INSTRUCTIONS WILL BE
SEEN ONLY BY AUTHORIZED PERSONNEL APPOINTED BY THE TRUSTEE.
Dated: ______________, 1996 _____________________________________
Signature of Participant
_____________________________________
Social Security Number
Proposed Control Share Acquisition by FOR AGAINST ABSTAIN
Opus Acquisition Corporation [ ] [ ] [ ]
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE AGAINST THE
PROPOSAL
[REVERSE]
[CERTIFICATION OF ELIGIBILITY TO VOTE]
As of the date upon which the undersigned signs and delivers this Trustee
Instruction Card
EITHER
[ ] All of the Common Shares represented by this Trustee Instruction Card are
eligible to be voted in determining whether the proposed control share
acquisition has been approved by the "Second Majority" (as defined in the
Proxy Statement).
Instruction: check the above box if all of the Common Shares represented by
this Trustee Instruction Card meet the eligibility criteria stated in
Exhibit B of the Proxy Statement.
OR
[ ] _________ of the Common Shares represented by this Trustee Instruction Card
are eligible to be voted in determining whether the proposed control share
acquisition has been approved by the Second Majority.
Instruction: check the above box if some, but not all, of the Common Shares
represented by this Trustee Instruction Card meet the eligibility criteria
stated in Exhibit B of the Proxy Statement and fill in the blank with the
number of Common Shares that are eligible.
<PAGE>
THE COMMON SHARES REPRESENTED BY THIS TRUSTEE INSTRUCTION CARD WILL BE VOTED AS
DIRECTED, OR IF NO DIRECTION IS SPECIFIED, WILL BE VOTED AGAINST THE PROPOSAL.
IF NO CERTIFICATION IS MADE, IT WILL BE PRESUMED THAT NONE OF THE COMMON SHARES
REPRESENTED BY THIS TRUSTEE INSTRUCTION CARD IS ELIGIBLE TO BE VOTED IN
DETERMINING WHETHER THE PROPOSED CONTROL SHARE ACQUISITION HAS BEEN APPROVED BY
THE SECOND MAJORITY.
By signing below, you (a) instruct that this Trustee Instruction Card be voted
as marked; (b) certify the eligibility of your Common Shares to be voted as
indicated above; and (c) UNDERTAKE TO NOTIFY THE COMPANY IF, AT ANY TIME ON OR
AFTER THE DATE YOU SIGN THIS TRUSTEE INSTRUCTION CARD AND ON OR BEFORE THE DATE
OF THE SPECIAL MEETING OF SHAREHOLDERS (THE "831 SPECIAL MEETING"), any of the
following should occur:
(1) you, or any other persons acting in concert with you, acquire additional
Common Shares and the aggregate consideration paid or given by you, and any
other persons acting in concert with you, for all Common Shares acquired,
indirectly or directly, by you, and any persons acting in concert with you,
on or after June 27, 1996 exceeds $250,000;
(2) you transfer Common Shares to another person who, to your knowledge, is not,
or after giving effect to the transfer will not be, eligible to sign the
certification of eligibility; or
(3) to your knowledge, the eligibility of any of the Common Shares to which this
Certificate of Eligibility relates otherwise changes.
SIGNATURE(S) DATE
- -------------------------- ---------------------------
<PAGE>
[FORM OF TRUSTEE INSTRUCTION CARD FOR COMMON SHARES IN
PLANS -- EMPLOYEE SAVINGS AND STOCK PURCHASE PLAN]
[FRONT]
CONFIDENTIAL VOTING INSTRUCTIONS
TO: NATIONAL CITY BANK, N.E.
AS TRUSTEE ON BEHALF OF THE
EMPLOYEE SAVINGS AND STOCK PURCHASE PLAN
OF COMMERCIAL INTERTECH CORP.
("TRUSTEE")
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF SHAREHOLDERS
UNDER SECTION 1701.831 OF THE OHIO REVISED
CODE TO BE HELD ON AUGUST 30, 1996
The undersigned hereby directs the Trustee to vote all Common Shares of
Commercial Intertech Corp. allocated to the undersigned's account under the plan
on the record date for the Special Meeting of Shareholders of Commercial
Intertech Corp., to be held at the [ ], Youngstown, Ohio on Friday,
August 30, 1996 at [ ] a.m., or at any adjournments or postponements
thereof, upon the matter as set forth in the Notice of Special Meeting and Proxy
Statement ("Proxy Statement"), receipt of which is hereby acknowledged.
The Trustee is directed to vote as specified below, or if no specification is
made, AGAINST the proposed Control Share Acquisition by Opus Acquisition
Corporation. To vote in accordance with the Board of Directors'
recommendations, just sign below without checking any boxes. If you fail to
sign and return these instructions, the Trustee will vote, in its sole
discretion, any shares held under the plan which are not voted.
<PAGE>
PLEASE SIGN, DATE AND RETURN THIS CONFIDENTIAL VOTING SHEET PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. THESE CONFIDENTIAL VOTING INSTRUCTIONS WILL BE
SEEN ONLY BY AUTHORIZED PERSONNEL APPOINTED BY THE TRUSTEE.
Dated:______________, 1996 ________________________________________
Signature of Participant
________________________________________
Social Security Number
Proposed Control Share Acquisition by FOR AGAINST ABSTAIN
Opus Acquisition Corporation [ ] [ ] [ ]
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE AGAINST THE
PROPOSAL
[REVERSE]
[CERTIFICATION OF ELIGIBILITY TO VOTE]
As of the date upon which the undersigned signs and delivers this Trustee
Instruction Card
EITHER
[ ] All of the Common Shares represented by this Trustee Instruction Card are
eligible to be voted in determining whether the proposed control share
acquisition has been approved by the "Second Majority" (as defined in the
Proxy Statement).
Instruction: check the above box if all of the Common Shares represented by
this Trustee Instruction Card meet the eligibility criteria stated in
Exhibit B of the Proxy Statement.
OR
[ ] _________ of the Common Shares represented by this Trustee Instruction Card
are eligible to be voted in determining whether the proposed control share
acquisition has been approved by the Second Majority.
Instruction: check the above box if some, but not all, of the Common Shares
represented by this Trustee Instruction Card meet the eligibility criteria
stated in Exhibit B of the Proxy Statement and fill in the blank with the
number of Common Shares that are eligible.
<PAGE>
THE COMMON SHARES REPRESENTED BY THIS TRUSTEE INSTRUCTION CARD WILL BE VOTED AS
DIRECTED, OR IF NO DIRECTION IS SPECIFIED, WILL BE VOTED AGAINST THE PROPOSAL.
IF NO CERTIFICATION IS MADE, IT WILL BE PRESUMED THAT NONE OF THE COMMON SHARES
REPRESENTED BY THIS TRUSTEE INSTRUCTION CARD IS ELIGIBLE TO BE VOTED IN
DETERMINING WHETHER THE PROPOSED CONTROL SHARE ACQUISITION HAS BEEN APPROVED BY
THE SECOND MAJORITY.
By signing below, you (a) instruct that this Trustee Instruction Card be voted
as marked; (b) certify the eligibility of your Common Shares to be voted as
indicated above; and (c) UNDERTAKE TO NOTIFY THE COMPANY IF, AT ANY TIME ON OR
AFTER THE DATE YOU SIGN THIS TRUSTEE INSTRUCTION CARD AND ON OR BEFORE THE DATE
OF THE SPECIAL MEETING OF SHAREHOLDERS (THE "831 SPECIAL MEETING"), any of the
following should occur:
(1) you, or any other persons acting in concert with you, acquire additional
Common Shares and the aggregate consideration paid or given by you, and any
other persons acting in concert with you, for all Common Shares acquired,
indirectly or directly, by you, and any persons acting in concert with you,
on or after June 27, 1996 exceeds $250,000;
(2) you transfer Common Shares to another person who, to your knowledge, is not,
or after giving effect to the transfer will not be, eligible to sign the
certification of eligibility; or
(3) to your knowledge, the eligibility of any of the Common Shares to which this
Certificate of Eligibility relates otherwise changes.
SIGNATURE(S) DATE
___________________________ ________________________
<PAGE>
[FORM OF TRUSTEE INSTRUCTION CARD
FOR COMMON SHARES
AND PREFERRED SHARES IN ESOPS --
EMPLOYEE STOCK OWNERSHIP PLAN]
[FRONT]
CONFIDENTIAL VOTING INSTRUCTIONS TO: MELLON BANK N.A.
AS TRUSTEE ON BEHALF OF THE COMMERCIAL INTERTECH
EMPLOYEE STOCK OWNERSHIP PLAN
("TRUSTEE")
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
SPECIAL MEETING OF SHAREHOLDERS UNDER SECTION 1701.831
OF THE OHIO REVISED CODE TO BE HELD ON AUGUST 30, 1996
ESOP
The undersigned hereby directs the Trustee to vote all Common Shares or
Preferred Shares of Commercial Intertech Corp. deemed credited to the
undersigned's account under the plan on the record date for the Special Meeting
of Shareholders of Commercial Intertech Corp., to be held at the [
], Youngstown, Ohio on Friday, August 30, 1996 at [ ] a.m., or at any
adjournments or postponements thereof, upon the matter as set forth in the
Notice of Special Meeting and Proxy Statement ("Proxy Statement"), receipt of
which is hereby acknowledged.
The Trustee is directed to vote as specified below, or if no specification is
made, AGAINST the proposed Control Share Acquisition by Opus Acquisition
Corporation. To vote in accordance with the Board of Directors'
recommendations, just sign below without checking any boxes. If you fail to
sign and return these instructions, the Trustee will vote all shares deemed
credited to your account in the same proportion as the shares deemed credited to
the accounts of participants who have directed it.
PLEASE SIGN, DATE AND RETURN THIS CONFIDENTIAL VOTING CARD PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. THESE CONFIDENTIAL VOTING INSTRUCTIONS WILL BE
SEEN ONLY BY AUTHORIZED PERSONNEL APPOINTED BY THE TRUSTEE. ADDITIONAL
INFORMATION CONCERNING THE VOTING OF SHARES HELD UNDER THE PLAN APPEARS IN THE
PROXY STATEMENT.
Dated:______________, 1996 _________________________________
Signature of Participant
<PAGE>
__________________________________
Social Security Number
Proposed Control Share Acquisition by FOR AGAINST ABSTAIN
Opus Acquisition Corporation [ ] [ ] [ ]
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE AGAINST THE
PROPOSAL
[REVERSE]
[CERTIFICATION OF ELIGIBILITY TO VOTE]
As of the date upon which the undersigned signs and delivers this Trustee
Instruction Card
EITHER
[ ] All of the Common Shares and Preferred Shares represented by this Trustee
Instruction Card are eligible to be voted in determining whether the
proposed control share acquisition has been approved by the "Second
Majority" (as defined in the Proxy Statement).
Instruction: check the above box if all of the Common Shares and Preferred
Shares represented by this Trustee Instruction Card meet the eligibility
criteria stated in Exhibit B of the Proxy Statement.
OR
[ ] _________ of the Common Shares and ___________________ of the Preferred
Shares represented by this Trustee Instruction Card are eligible to be
voted in determining whether the proposed control share acquisition has
been approved by the Second Majority.
Instruction: check the above box if some, but not all, of the Common Shares
and Preferred Shares represented by this Trustee Instruction Card meet the
eligibility criteria stated in Exhibit B of the Proxy Statement and fill in
the blank with the number of Common Shares and Preferred Shares that are
eligible.
THE COMMON SHARES AND PREFERRED SHARES REPRESENTED BY THIS TRUSTEE INSTRUCTION
CARD WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS SPECIFIED, WILL BE VOTED
AGAINST THE PROPOSAL.
IF NO CERTIFICATION IS MADE, IT WILL BE PRESUMED THAT NONE OF THE COMMON SHARES
AND PREFERRED SHARES REPRESENTED BY THIS TRUSTEE INSTRUCTION CARD IS ELIGIBLE TO
BE VOTED IN DETERMINING WHETHER THE PROPOSED CONTROL SHARE ACQUISITION HAS BEEN
APPROVED BY THE SECOND MAJORITY.
<PAGE>
By signing below, you (a) instruct that this Trustee Instruction Card be voted
as marked; (b) certify the eligibility of your Common Shares and Preferred
Shares to be voted as indicated above; and (c) UNDERTAKE TO NOTIFY THE COMPANY
IF, AT ANY TIME ON OR AFTER THE DATE YOU SIGN THIS TRUSTEE INSTRUCTION CARD AND
ON OR BEFORE THE DATE OF THE SPECIAL MEETING OF SHAREHOLDERS (THE "831 SPECIAL
MEETING"), any of the following should occur:
(1) you, or any other persons acting in concert with you, acquire additional
Common Shares and Preferred Shares and the aggregate consideration paid or
given by you, and any other persons acting in concert with you, for all
Common Shares and Preferred Shares acquired, indirectly or directly, by you,
and any persons acting in concert with you, on or after June 27, 1996
exceeds $250,000;
(2) you transfer Common Shares and Preferred Shares to another person who, to
your knowledge, is not, or after giving effect to the transfer will not be,
eligible to sign the certification of eligibility; or
(3) to your knowledge, the eligibility of any of the Common Shares and Preferred
Shares to which this Certificate of Eligibility relates otherwise changes.
SIGNATURE(S) DATE
- ---------------------- ----------------------
NOTE: Please sign your name exactly as it appears in print. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such.
<PAGE>
[FORM OF TRUSTEE INSTRUCTION CARD
FOR COMMON SHARES
AND PREFERRED SHARES IN ESOPS --
RETIREMENT STOCK OWNERSHIP AND SAVINGS PLAN]
[FRONT]
CONFIDENTIAL VOTING INSTRUCTIONS TO: MELLON BANK N.A.
AS TRUSTEE ON BEHALF OF THE COMMERCIAL INTERTECH
RETIREMENT STOCK OWNERSHIP AND SAVINGS PLAN
("TRUSTEE")
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
SPECIAL MEETING OF SHAREHOLDERS UNDER
SECTION 1701.831 OF THE OHIO REVISED
CODE TO BE HELD ON AUGUST 30, 1996
401(K)
The undersigned hereby directs the Trustee to vote all Common Shares or
Preferred Shares of Commercial Intertech Corp. deemed credited to the
undersigned's account under the plan on the record date for the Special Meeting
of Shareholders of Commercial Intertech Corp., to be held at the [
], Youngstown, Ohio on Friday, August 30, 1996 at [ ] a.m., or at any
adjournments or postponements thereof, upon the matter as set forth in the
Notice of Special Meeting and Proxy Statement ("Proxy Statement"), receipt of
which is hereby acknowledged.
The Trustee is directed to vote as specified below, or if no specification is
made, AGAINST the proposed Control Share Acquisition by Opus Acquisition
Corporation. To vote in accordance with the Board of Directors'
recommendations, just sign below without checking any boxes. If you fail to
sign and return these instructions, the Trustee will vote all shares deemed
credited to your account in the same proportion as the shares deemed credited to
the accounts of participants who have directed it.
PLEASE SIGN, DATE AND RETURN THIS CONFIDENTIAL VOTING CARD PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. THESE CONFIDENTIAL VOTING INSTRUCTIONS WILL BE
SEEN ONLY BY AUTHORIZED PERSONNEL APPOINTED BY THE TRUSTEE. ADDITIONAL
INFORMATION CONCERNING THE VOTING OF SHARES HELD UNDER THE PLAN APPEARS IN THE
PROXY STATEMENT.
Dated:______________, 1996 _______________________________
Signature of Participant
<PAGE>
________________________________
Social Security Number
Proposed Control Share Acquisition by FOR AGAINST ABSTAIN
Opus Acquisition Corporation [ ] [ ] [ ]
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE AGAINST THE
PROPOSAL
[REVERSE]
[CERTIFICATION OF ELIGIBILITY TO VOTE]
As of the date upon which the undersigned signs and delivers this Trustee
Instruction Card
EITHER
[ ] All of the Common Shares and Preferred Shares represented by this Trustee
Instruction Card are eligible to be voted in determining whether the
proposed control share acquisition has been approved by the "Second
Majority" (as defined in the Proxy Statement).
Instruction: check the above box if all of the Common Shares and Preferred
Shares represented by this Trustee Instruction Card meet the eligibility
criteria stated in Exhibit B of the Proxy Statement.
OR
[ ] _________ of the Common Shares and ___________________ of the Preferred
Shares represented by this Trustee Instruction Card are eligible to be
voted in determining whether the proposed control share acquisition has
been approved by the Second Majority.
Instruction: check the above box if some, but not all, of the Common Shares
and Preferred Shares represented by this Trustee Instruction Card meet the
eligibility criteria stated in Exhibit B of the Proxy Statement and fill in
the blank with the number of Common Shares and Preferred Shares that are
eligible.
THE COMMON SHARES AND PREFERRED SHARES REPRESENTED BY THIS TRUSTEE INSTRUCTION
CARD WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS SPECIFIED, WILL BE VOTED
AGAINST THE PROPOSAL.
IF NO CERTIFICATION IS MADE, IT WILL BE PRESUMED THAT NONE OF THE COMMON SHARES
AND PREFERRED SHARES REPRESENTED BY THIS TRUSTEE INSTRUCTION CARD IS ELIGIBLE TO
BE VOTED IN DETERMINING WHETHER THE PROPOSED CONTROL SHARE ACQUISITION HAS BEEN
APPROVED BY THE SECOND MAJORITY.
<PAGE>
By signing below, you (a) instruct that this Trustee Instruction Card be voted
as marked; (b) certify the eligibility of your Common Shares and Preferred
Shares to be voted as indicated above; and (c) UNDERTAKE TO NOTIFY THE COMPANY
IF, AT ANY TIME ON OR AFTER THE DATE YOU SIGN THIS TRUSTEE INSTRUCTION CARD AND
ON OR BEFORE THE DATE OF THE SPECIAL MEETING OF SHAREHOLDERS (THE "831 SPECIAL
MEETING"), any of the following should occur:
(1) you, or any other persons acting in concert with you, acquire additional
Common Shares and Preferred Shares and the aggregate consideration paid or
given by you, and any other persons acting in concert with you, for all
Common Shares and Preferred Shares acquired, indirectly or directly, by you,
and any persons acting in concert with you, on or after June 27, 1996
exceeds $250,000;
(2) you transfer Common Shares and Preferred Shares to another person who, to
your knowledge, is not, or after giving effect to the transfer will not be,
eligible to sign the certification of eligibility; or
(3) to your knowledge, the eligibility of any of the Common Shares and Preferred
Shares to which this Certificate of Eligibility relates otherwise changes.
SIGNATURE DATE
- ---------------------- ----------------------------
NOTE: Please sign your name exactly as it appears in print. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such.
<PAGE>
SPECIAL MEETING VOTING INSTRUCTIONS
COMMERCIAL INTERTECH CORP.
Voting Procedures for Beneficial Owners of
Common Shares and Preferred Shares of Commercial Intertech Corp.
TO ALL BANKS, BROKERS AND NOMINEES:
Commercial Intertech Corp. (the "Company") shareholders who were holders of
record on August 7, 1996 AND who certify their eligibility under the criteria
set forth in Exhibit B (the "Eligibility Criteria") to the Company's Proxy
statement dated July __, 1996 (the "Proxy Statement") for the Special Meeting of
Shareholders to be held on August 30, 1996 (the "Special Meeting") will be
eligible to have their Common Shares and Preferred Shares voted in determining
whether the "Control Share Acquisition" (as defined in the Proxy Statement) by
Opus Acquisition Corporation ("OAC") and United Dominion Industries Limited
("United Dominion") has been approved by the "Second Majority" (as defined in
the Proxy Statement) as required by Section 1701.831 of the Ohio Revised Code.
To enable the Inspectors of Election to tabulate the voting by beneficial owners
of Common Shares and Preferred Shares held in your name, a special WHITE proxy
and related certification of eligibility has been devised for you in tabulating
the number of shares that are eligible to be voted in determining whether the
Control Share Acquisition has been approved by the Second Majority. On this
card, the beneficial owner must certify the eligibility of his Common Shares and
Preferred Shares to be voted and, by the same signature, give instructions as to
the voting of the shares he beneficially owns and give undertakings to advise
the Company of certain specified subsequent changes in circumstances that would
change the eligibility of the beneficially owned shares to participate in
determining the Second Majority. You will also receive from the Company a
separate certification form that beneficial owners using the BLUE-STRIPED proxy
card circulated by OAC and United Dominion may use to certify eligibility (if
the BLUE-STRIPED proxy card does not provide a certification of eligibility
conforming to the certificate on the WHITE proxy card circulated by the
Company).
IT IS THE COMPANY'S POSITION THAT ALL COMMON SHARES AND PREFERRED SHARES THE
ELIGIBILITY OF WHICH IS NOT CERTIFIED BY THE BENEFICIAL OWNER WILL BE PRESUMED
TO BE INELIGIBLE TO BE VOTED IN DETERMINING WHETHER THE CONTROL SHARE
ACQUISITION HAS BEEN APPROVED BY THE SECOND MAJORITY. IT IS THE COMPANY'S
POSITION THAT ALL COMMON SHARES AND PREFERRED SHARES SUBJECT TO ONE OF THE BLUE-
STRIPED CARDS PREVIOUSLY CIRCULATED BY OAC
<PAGE>
AND UNITED DOMINION, WHICH CONTAIN NO CERTIFICATION OF ELIGIBILITY, AS DESCRIBED
ABOVE, SHALL BE PRESUMED TO BE INELIGIBLE UNLESS THE BENEFICIAL OWNER SIGNS AND
PRESENTS TO THE COMPANY EITHER (1) A PROXY CARD BEARING A LATER DATE WITH A
SIGNED CERTIFICATION OF ELIGIBILITY CONFORMING TO THE CERTIFICATE ON THE WHITE
PROXY CARD CIRCULATED BY THE COMPANY OR (2) A SEPARATE CERTIFICATION OF
ELIGIBILITY IN THE FORM PROVIDED BY THE COMPANY.
IF YOU ARE A BROKER, DO NOT CERTIFY THE ELIGIBILITY OF COMMON SHARES AND
PREFERRED SHARES. Only the beneficial owner can certify the eligibility of
Common Shares and Preferred Shares represented by the Proxy Card.
IF YOU ARE A BANK, YOU MAY WISH TO FOLLOW YOUR USUAL PROCEDURES AND FURNISH THE
PROXY CARD TO THE BENEFICIAL OWNER. The beneficial owner will vote his
beneficial ownership including completion of the certification of eligibility.
The beneficial owner may return the Proxy Card either to you or to Commercial
Intertech Corp. c/o Morrow & Co., Inc., 909 3rd Avenue, 20th Floor, New York,
New York 10022-4799.
August __, 1996
<PAGE>
[FORM OF BROKER'S AND NOMINEE'S PROXY CARD]
COMMERCIAL INTERTECH CORP.
BROKER'S AND NOMINEE'S PROXY
THIS PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 30, 1996 IS SOLICITED BY THE BOARD OF DIRECTORS
At the Special Meeting of Shareholders of COMMERCIAL INTERTECH CORP. to be held
on August 30, 1996, and at any adjournment thereof, [ ], [
], and [ ], and each of them, with several powers of
substitution and resubstitution, are hereby authorized to represent me and vote
my shares upon the proposal to authorize as required by Section 1701.831 of the
Ohio Revised Code the proposed control share acquisition by Opus Acquisition
Corporation, as more fully described in the Company's Proxy Statement dated July
__, 1996 (the "Proxy Statement"):
Common Shares and Preferred Shares eligible to be voted in determining Second
Majority
_______ FOR _______ AGAINST _______ ABSTAIN
Common Shares and Preferred Shares not eligible to be voted in determining
Second Majority
_______ FOR _______ AGAINST _______ ABSTAIN
THE COMMON SHARES AND PREFERRED SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
AS DIRECTED OR, IF NO DIRECTION IS SPECIFIED, WILL BE VOTED AGAINST THE PROPOSAL
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE PROPOSAL
The undersigned confirms that the Common Shares and Preferred Shares reflected
in the above tabulation are based upon actual votes of beneficial holders.
SIGNATURE(S) DATE
- ---------------------- --------------------------
SIGNATURE(S) DATE
- ----------------------- ---------------------------
<PAGE>
[COMMERCIAL INTERTECH CORP. LOGO AND LETTERHEAD]
CERTIFICATION OF ELIGIBILITY TO VOTE
AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 30, 1996
THIS CERTIFICATION OF ELIGIBILITY TO VOTE IS NOT A PROXY CARD. TO HAVE YOUR
COMMON SHARES AND PREFERRED SHARES VOTED AT THE SPECIAL MEETING IN DETERMINING
THE SECOND MAJORITY, YOU MUST EITHER SIGN AND RETURN A PROXY CARD IN ADDITION TO
SIGNING AND RETURNING THIS CERTIFICATION OF ELIGIBILITY OR SIGN AND RETURN A
PROXY CARD THAT INCLUDES A CONFORMING CERTIFICATION OF ELIGIBILITY
As of the date upon which the undersigned signs and delivers this certification
card
EITHER
[ ] All of the Common Shares to which this certification relates are eligible to
be voted in determining whether the proposed control share acquisition has
been approved by the "Second Majority" (as defined in the Company's Proxy
Statement dated [ ], 1996 (the "Proxy Statement")).
Instruction: check the above box if all of the Common Shares to which this
certification relates meet the eligibility criteria stated in Exhibit B of
the Proxy Statement.
OR
[ ] _______ of the Common Shares to which this certification relates are
eligible to be voted in determining whether the proposed control share
acquisition has been approved by the Second Majority.
Instruction: check the above box if some, but not all, of the Common Shares
to which this certification relates meet the eligibility criteria stated in
Exhibit B of the Proxy Statement and fill in the blank with the number of
Common Shares that are eligible.
<PAGE>
CERTIFICATION OF ELIGIBILITY TO VOTE
------------------------------------
IF NO CERTIFICATION IS MADE, IT WILL BE PRESUMED THAT NONE OF THE COMMON SHARES
TO WHICH THIS CERTIFICATION RELATES IS ELIGIBLE TO BE VOTED IN DETERMINING
WHETHER THE PROPOSED CONTROL SHARE ACQUISITION HAS BEEN APPROVED BY THE SECOND
MAJORITY.
By signing below, you (a) certify the eligibility of your Common Shares to be
voted as indicated above; and (b) UNDERTAKE TO NOTIFY THE COMPANY IF, AT ANY
TIME ON OR AFTER THE DATE YOU SIGN THIS CERTIFICATE OF ELIGIBILITY AND ON OR
BEFORE THE DATE OF THE SPECIAL MEETING OF SHAREHOLDERS (THE "831 SPECIAL
MEETING"), any of the following should occur:
(1) you, or any other persons acting in concert with you, acquire additional
Common Shares and the aggregate consideration paid or given by you, and any
other persons acting in concert with you, for all Common Shares acquired,
indirectly or directly, by you, and any persons acting in concert with you,
on or after June 27, 1996 exceeds $250,000;
(2) you transfer Common Shares to another person who, to your knowledge, is not,
or after giving effect to the transfer will not be, eligible to sign the
certification of eligibility; or
(3) to your knowledge, the eligibility of any of the Common Shares to which this
Certificate of Eligibility relates otherwise changes.
SIGNATURE(S) DATE
- --------------------------- ---------------------------
SIGNATURE(S) DATE
- --------------------------- ----------------------------
NOTE: Please sign your name exactly as it appears in print and, in case of
multiple or joint ownership, all should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
