<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
MYERS INDUSTRIES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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:
----------------------------------------------------------------------------------------------------------
</TABLE>
================================================================================
<PAGE> 2
[MYERS INDUSTRIES LOGO]
- --------------------------------------------------------------------------------
1293 South Main Street - Akron, Ohio 44301
- --------------------------------------------------------------------------------
March 21, 1997
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held on April 24, 1997, at 9:00 A.M. at the Company's offices, 1293 South Main
Street, Akron, Ohio 44301.
In addition to the election of directors and the ratification of the
appointment of the independent certified public accountants, a proposal to adopt
the 1997 Incentive Stock Plan, and three proposals regarding defensive
structuring measures for the Company, will be presented to the shareholders at
the Annual Meeting. Enclosed with this letter is a Notice of Annual Meeting
together with a Proxy Statement which contains information with respect to the
nominees for director and for each of the proposals.
We believe the proposals discussed in the Proxy Statement are very important
to the Company and the shareholders. It is very important that your shares be
voted, and we hope that you will be able to attend the Annual Meeting. IN EITHER
CASE, WE URGE YOU TO EXECUTE AND RETURN THE ENCLOSED FORM OF PROXY AS SOON AS
POSSIBLE, WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON.
SINCERELY,
/s/ Stephen Myers
------------------------------------
STEPHEN E. MYERS
President and Chief Executive Officer
<PAGE> 3
[MYERS INDUSTRIES LOGO]
- --------------------------------------------------------------------------------
1293 South Main Street - Akron, Ohio 44301
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------
TO BE HELD APRIL 24, 1997
- --------------------------------------------------------------------------------
The Annual Meeting of Shareholders of Myers Industries, Inc., an Ohio
corporation ("Myers" or "Company"), will be held at the Company's offices,
1293 South Main Street, Akron, Ohio 44301, on April 24, 1997, at 9:00 A.M.
(local time), for the following purposes:
1. To elect eight directors.
2. To approve the Myers Industries, Inc. 1997 Incentive Stock Plan.
3. To approve a proposal to amend Myers' Code of Regulations to: (i)
provide for a classified board of directors; (ii) give the board of
directors the authority to determine the number of directors; (iii)
adopt a formal nomination procedure for the election of directors;
(iv) provide that directors can only be removed for "cause" during
their term; and (v) require a two-thirds vote of shareholders to
change these amendments and the provision for calling a special
meeting of the shareholders.
4. To approve a proposal to amend Myers' Articles of Incorporation to
require a vote by two-thirds of the shareholders to approve certain
extraordinary corporate transactions, such as mergers,
consolidations, and majority share acquisitions, unless approved by
the directors and then by a majority vote of the shareholders, and
certain related amendments to the Articles of Incorporation.
5. To approve a proposal to amend Myers' Code of Regulations to make the
Ohio Control Share Acquisition Act inapplicable to Myers.
6. To ratify the appointment of Arthur Andersen LLP, independent public
accountants, as auditors for 1997.
7. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on March 14, 1997 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting. All shareholders are cordially invited to attend
the meeting in person. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN
PERSON, PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD AS SOON AS
POSSIBLE.
By Order of the Board of Directors,
MILTON I. WISKIND
Secretary
Akron, Ohio
March 21, 1997
THE 1996 ANNUAL REPORT TO SHAREHOLDERS ACCOMPANIES THIS NOTICE
<PAGE> 4
MYERS INDUSTRIES, INC.
------------------
PROXY STATEMENT
------------------
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Myers Industries, Inc., an Ohio corporation, of the
accompanying proxy to be voted at the Annual Meeting of Shareholders to be held
on April 24, 1997, at 9:00 A.M. (local time), and at any adjournment thereof.
Shares represented by duly executed proxies in the accompanying form received by
the Board of Directors prior to the meeting will be voted at the meeting. A
shareholder who signs and returns a proxy in the accompanying form may revoke it
prior to or at the meeting by giving notice to the Secretary.
The close of business on March 14, 1997, has been fixed as the record date for
the determination of shareholders entitled to notice of and to vote at the
meeting. On that date Myers had outstanding 16,862,355 shares of common stock,
without par value ("Common Stock"), each of which is entitled to one vote. For
information concerning principal shareholders, see the section headed "Principal
Shareholders" below.
Under Ohio law, the Company's Amended and Restated Articles of Incorporation
and its Code of Regulations, if a quorum is present at the meeting, the nominees
for election as directors who receive a plurality of votes will be elected as
directors. An abstention from voting any share, or a broker non-vote with
respect to the election of any nominee for director, will not affect the
election of directors.
Proposal Nos. 2 (1997 Stock Plan) and 6 (Ratification of Auditors) must be
approved by the affirmative vote of the holders of a majority of the shares of
the Company's Common Stock, present in person or represented by proxy at the
Annual Meeting, assuming a quorum is present. An abstention from voting any
share will have the practical effect of a vote against the proposals. A broker
non-vote with respect to these proposals will not affect the proposals.
Proposal Nos. 3 and 5 (Amendments to the Articles and Code) must be approved
by the affirmative vote of the holders of a majority of the shares of the
Company's Common Stock which are outstanding and eligible to vote at the
meeting. An abstention from voting any share, or a broker non-vote with respect
to these proposals, will have the practical effect of a vote against the
proposals.
Proposal No. 4 (Super-majority Vote on Certain Corporate Transactions) must be
approved by the affirmative vote of the holders of two-thirds of the shares of
the Company's Common Stock which are outstanding and eligible to vote at the
meeting. An abstention from voting any share, or a broker non-vote with respect
to this proposal, will have the practical effect of a vote against the proposal.
A majority of the outstanding shares of Common Stock constitutes a quorum.
Properly executed proxies that are marked "abstain," or are held in "street
name" by brokers, and are not voted on one or more particular items (if
otherwise voted on at least one item) will be
2
<PAGE> 5
counted for purposes of determining whether a quorum has been achieved at the
Annual Meeting.
The mailing address of the principal executive offices of Myers is 1293 South
Main Street, Akron, Ohio 44301. This Proxy Statement, together with the related
proxy card and Myers' 1996 Annual Report to Shareholders, is being mailed to the
shareholders of Myers on or about March 21, 1997.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Set forth below for each nominee for election as a director and for each
director whose term shall continue after the Annual Meeting of Shareholders is a
brief statement, including the age, principal occupation and business experience
during the past five years, and the number of shares of Common Stock
beneficially owned by such director. The Board of Directors has nominated the
persons listed below as nominees, all of whom presently are directors of Myers.
If any nominee should become unavailable for any reason, it is intended that
votes will be cast for a substitute nominee designated by the Board of
Directors. The Board of Directors has no reason to believe that the nominees
named will be unable to serve if elected. The nominees receiving the greatest
number of votes cast by shareholders by proxy or in person at the meeting, a
quorum being present, shall be elected. A majority of the outstanding shares of
Common Stock constitutes a quorum. Proxies cannot be voted for a greater number
of nominees than the number named in the Proxy Statement.
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF THE FOLLOWING NOMINEES:
NOMINEES FOR ELECTION AS DIRECTORS
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION SHARES PERCENT
FOR PAST FIVE YEARS BENEFICIALLY OF
NAME AGE AND OTHER INFORMATION OWNED(1,2) CLASS(1)
- --------------------- ----- -------------------------------------- ---------- ----------
<S> <C> <C> <C> <C>
Karl S. Hay 69 Member of the law firm of Brouse & 375,188(3,4) 2.2%
McDowell, Akron, Ohio. Served as
director since 1969.
Richard P. Johnston 66 Chairman of the Board of Merbanco, 2,993(4,10)
Inc., Jackson Hole, Wyoming; Director
of AGCO, Inc., Norcross, Georgia;
formerly served as Managing Director
of Hamilton Robinson & Company,
Incorporated, New York, New York from
1991 through 1993; formerly served as
President and Chief Executive Officer,
Buckhorn Inc. and Vice President of
the Company from 1987 until December,
1991. Served as a director since 1992.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION SHARES PERCENT
FOR PAST FIVE YEARS BENEFICIALLY OF
NAME AGE AND OTHER INFORMATION OWNED(1,2) CLASS(1)
- --------------------- ----- -------------------------------------- ------------ ----------
<S> <C> <C> <C> <C>
Stephen E. Myers 53 President and Chief Executive Officer 1,507,388(5,6,9) 8.9%
of the Company; Director of FirstMerit
Corporation, Akron, Ohio, a bank
holding company, and director, Reko
International Group, Inc., a
publicly-held manufacturer of tooling
and molds. Served as director since
1972.
Richard L. Osborne 59 Executive Dean, Weatherhead School of 5,706(4)
Management, Case Western Reserve
University, Cleveland, Ohio; Director
of Ohio Savings Financial Corporation,
Cleveland, Ohio, a savings and loan
holding company; Director of Capitol
American Financial Corp., Cleveland,
Ohio, an insurance holding company;
Director of Handex Corporation,
Morganville, New Jersey. Served as
director since 1978.
Jon H. Outcalt 60 Chairman and Chief Executive Officer 9,784(4,7)
of Aberdeen Group, Inc., Beachwood,
Ohio, an investment holding company;
Chairman of NCS HealthCare, Inc.,
Beachwood, Ohio, a provider of
pharmacy services to long-term care
institutions; Director of Ohio Savings
Financial Corporation, Cleveland,
Ohio, a savings and loan holding
company; Director of Capitol American
Financial Corp., Cleveland, Ohio, an
insurance holding company. Served as
director since 1984.
Samuel Salem 73 Formerly served as a Vice President of 7,969(4)
GenCorp, Inc., Akron, Ohio, a
technology-based company in aerospace,
automotive and related polymer
products; formerly served as President
of DiversiTech General, Inc., a
subsidiary of GenCorp, until 1988.
Served as director since 1989.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION SHARES PERCENT
FOR PAST FIVE YEARS BENEFICIALLY OF
NAME AGE AND OTHER INFORMATION OWNED(1,2) CLASS(1)
- --------------------- ----- -------------------------------------- ------------ ----------
<S> <C> <C> <C> <C>
Edwin P. Schrank 70 Formerly served as a Director of 22,272(4)
McNeil Corporation, Akron, a
manufacturer of industrial equipment,
from 1969 until 1986; formerly served
as Chairman and President of McNeil
Akron, Inc., Akron, Ohio (and its
predecessor company), a manufacturer
of machinery; formerly affiliated with
Portage Machine Company, Akron, Ohio
as General Manager; formerly performed
consulting services for Integrated
Corporation, Cleveland, Ohio. Served
as director since 1971.
Milton I. Wiskind 71 Senior Vice President and Secretary of 390,423(8) 2.3%
the Company. Served as director since
1972.
</TABLE>
- ---------------
(1) Number of shares beneficially owned are reported as of February 1, 1997.
Unless otherwise indicated, none of the directors beneficially owns one
percent or more of the outstanding shares of Myers Common Stock.
(2) All directors and executive officers as a group (9 persons) beneficially
owned 2,340,861 shares of Common Stock as of February 1, 1997. This
represents approximately 13.9% of the outstanding shares of Common Stock as
of that date.
(3) Includes 315,000 shares of Common Stock held by Karl S. Hay as trustee of a
trust benefitting certain of the children of Louis S. Myers and 45,425
shares of Common Stock as a trustee of a trust benefitting a grandchild of
Louis S. Myers.
(4) Includes shares with respect to which the non-employee nominee or director
has a right to acquire by exercising options granted under the 1992 Stock
Option Plan.
(5) Stephen E. Myers serves as a trustee of the Louis S. and Mary Myers
Foundation which holds 176,195 shares of Common Stock. By virtue of his
position as trustee of the Foundation, Mr. Myers is deemed to beneficially
own such shares which when excluded from the other shares which he is deemed
to beneficially own, decreases the percentage of shares beneficially owned
by him, and all officers and directors as a group, to 7.9% and 12.8%,
respectively.
(6) Includes 76,576 shares of Common Stock held by Stephen E. Myers as trustee
and/or custodian for certain grandchildren of Louis S. Myers, 2,358 shares
of Common Stock owned by Stephen E. Myers' spouse (for which Mr. Myers
disclaims beneficial ownership) and 5,455 shares of Common Stock issuable
under stock options exercisable within 60 days.
(7) Includes 6,845 shares of Common Stock held by Federal Process Company of
which Mr. Outcalt is Chairman and a director, and as such has the power to
vote and invest such shares. Mr. Outcalt is a controlling shareholder of
Federal Process Company.
(8) Includes 80,598 shares of Common Stock held by Mr. Wiskind's spouse, 83,593
shares of Common Stock held by Mr. Wiskind as trustee of trusts for his
children, 6,320 shares of Common Stock held by Mr. Wiskind as trustee of
trusts for his grandchildren, 87,500 shares of Common Stock held within the
Milton Wiskind Family Limited Partnership and 4,780 shares of Common Stock
issuable under stock options exercisable within 60 days.
5
<PAGE> 8
(9) Stephen E. Myers serves as a trustee of the Semantic Foundation Inc. which
holds 20,600 shares of Common Stock. By virtue of his position as trustee of
the Foundation, Mr. Myers is deemed to beneficially own such shares which
when excluded from the other shares which he is deemed to beneficially own,
decreases the percentage of shares beneficially owned by him, and all
officers and directors as a group, to 8.8% and 13.8%, respectively.
(10) Richard P. Johnston serves as a trustee of the Johnston Family Charitable
Remainder Trust which holds 1,000 shares of Common Stock.
There are, and during the past five years there have been, no legal
proceedings material to an evaluation of the ability of any director or
executive officer of Myers to act in such capacity or concerning his integrity.
In the event Proposal No. 3 is adopted providing for a classified board of
directors, the nominees will be divided into three classes and serve for the
term designated for each class, as follows:
<TABLE>
<S> <C> <C>
Class I Class II Class III
- ---------------------------- ---------------------------- ----------------------------
- ---------------------------- ---------------------------- ----------------------------
---------------------------- ----------------------------
</TABLE>
In the event Proposal No. 3 is not adopted by the shareholders, the directors
elected at the meeting shall serve until the next Annual Meeting of Shareholders
or until their successors are elected and qualified.
COMMITTEES
The Board of Directors of Myers has several committees and has appointed
members to such committees since the 1996 Annual Meeting of Shareholders.
The Audit Committee of the Board of Directors is composed of Karl S. Hay, Jon
H. Outcalt and Edwin P. Schrank. The functions of this Committee, which met
twice in 1996, are to recommend engaging and/or discharging the independent
auditor, directing and supervising special investigations, reviewing the results
of the audit engagement and procedures for internal control, determining
independence of the auditor and reviewing the Company's system of internal
accounting controls.
The Compensation Committee recommends to the Board of Directors plans,
programs or benefits relating to executive and key personnel compensation,
including incentive compensation, and approves salary adjustments and awards in
those areas. The Committee recommends to the Board of Directors individuals who
the Committee believes are "key employees" and deserving of grants of stock
options under the 1992 Stock Option Plan ("1992 Plan"), in addition to
administering the 1992 Plan. The Compensation Committee, which met twice in
1996, had as its members in 1996, Richard L. Osborne, Jon H. Outcalt and Samuel
Salem.
There were a total of four regularly scheduled and special meetings of the
Board of Directors in 1996. During 1996, all Directors attended at least 75% of
the aggregate total number of the
6
<PAGE> 9
meetings of the Board and committees on which they served. The Board of
Directors does not have a nominating committee.
DIRECTOR COMPENSATION
Outside directors are paid a $6,000 annual retainer plus $600 for each Board
of Directors meeting attended, except for Richard L. Osborne, who is compensated
for providing consulting services to the Company. Members of the Audit Committee
are paid $600 for each meeting attended unless such meeting is held on the same
day as a meeting of the Board of Directors.
On April 29, 1992, the shareholders approved the 1992 Plan, part of which
contains provisions for the granting of non-qualified stock options to
non-employee directors (the "Directors Plan"). Under the Directors Plan, up to
56,719 shares of Common Stock may be issued, subject to adjustment in the event
of certain corporate transactions. Each participant is awarded annually, on the
day after the Annual Meeting of Shareholders, NQSOs to purchase 500 shares of
Common Stock, conditioned on the Company's "Return on Equity" as set forth in
the Company's annual report to shareholders for the immediately preceding fiscal
year is equal to or greater than ten percent. The option price per share is 100
percent of the fair market value of a share of Common Stock on the date the
option is granted.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The law firm of Brouse & McDowell performed legal services for Myers in 1996.
Karl S. Hay, a director of Myers, is a shareholder of the law firm. The amount
of Mr. Hay's interest in such fees cannot practically be determined.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Myers'
directors, officers and persons who own more than ten percent of its Common
Stock ("Section 16 Filers") to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the American Stock
Exchange, Inc., and to furnish Myers with copies of all such forms they file.
Myers understands from the information provided to it by the Section 16 Filers
for 1996 that they have adhered to all filing requirements applicable to the
Section 16 Filers.
7
<PAGE> 10
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning the
compensation paid or accrued by Myers, to or on behalf of its chief executive
officer and each of the other most highly compensated executive officers of
Myers determined as of the end of 1996 (the "Named Executive Officers") and for
the fiscal years ended December 31, 1995 and 1994:
SUMMARY COMPENSATION
<TABLE>
<CAPTION>
LONG- TERM
ANNUAL COMPENSATION COMPEN-
------------------------------------------ SATION1
OTHER --------- ALL
ANNUAL SECURITIES OTHER
NAME AND COMPEN- UNDERLYING COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS2 SATION3 OPTIONS/SARS SATION4
- ------------------------- ----- -------- -------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Stephen E. Myers 1996 $235,417 $175,000 -0- 5,000 $4,917
President and Chief 1995 200,000 175,000 -0- -0- 4,805
Executive Officer 1994 200,000 175,000 -0- 7,425 4,897
Milton I. Wiskind 1996 140,000 122,000 -0- 3,000 4,917
Senior Vice President 1995 140,000 116,000 -0- -0- 4,805
1994 138,750 116,000 -0- 4,950 4,897
Gregory J. Stodnick 1996 125,000 105,000 -0- 3,000 5,217
Vice President-Finance 1995 125,000 100,000 -0- -0- 5,180
1994 123,750 100,000 -0- 4,950 5,272
</TABLE>
- ---------------
(1) None of the Named Executive Officers has any restricted stock holdings. No
long-term incentive plan payouts were made in 1996.
(2) Includes amounts earned and accrued in 1996 as bonuses. A bonus is generally
awarded after the close of the fiscal year and then paid 50% in the
following fiscal year, with the balance paid in 25% increments over the next
two years.
(3) Perquisites provided to each of Named Executive Officers, if any, do not
exceed the disclosure thresholds established under Securities and Exchange
Commission ("Commission") rules and are not included in this total.
(4) "All Other Compensation" for 1996 includes the following: (i) contributions
to the Company's Profit Sharing Plan on behalf of each of the Named
Executive Officers, as follows: Mr. Myers, $4,542; Wiskind, $4,542; and Mr.
Stodnick, $4,542; (ii) amounts paid by Myers for excess group life
insurance, and life insurance, as follows: Mr. Myers, $375; Mr. Wiskind,
$375; and Mr. Stodnick, $675; and (iii) amounts paid or accrued by Myers for
director fees, as follows: Mr. Myers, $-0-; and Mr. Wiskind, $-0-.
In 1996, the Board adopted a supplemental compensation plan for Mr. Wiskind in
recognition of his outstanding long-term service to Myers. The terms of the plan
provide that upon his retirement as an employee of the Company, he will be
entitled to receive an amount equal to $75,000 per year for ten years, net of
any required withholding taxes. The annual payments will be paid to Mr.
Wiskind's designated beneficiary in the event he does not survive the ten year
plan period.
8
<PAGE> 11
STOCK OPTIONS
The following table contains information concerning the grant of Stock Options
under Myers' 1992 Plan to the Named Executive Officers:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE AT
------------------------------------------------------------------- ASSUMED ANNUAL
NUMBER OF PERCENTAGE OF RATES OF STOCK
SECURITIES TOTAL OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS/SARS EMPLOYEES IN EXERCISE OR EXPIRATION -------------------
NAME GRANTED(1) FISCAL YEAR BASE PRICE DATE 5% 10%
- -------------------- ------------ ------------------ ----------- ----------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Stephen E. Myers 5,000 6.24% $ 19.55 5/2/01 $15,520 $45,183
Milton I. Wiskind 3,000 3.74% 17.75 5/2/01 14,712 32,510
Gregory J. Stodnick 3,000 3.74% 17.75 5/2/01 14,712 32,510
<FN>
- ---------------
(1) The 1992 Plan generally provides for granting of incentive stock options
("ISOs") and non-qualified stock options ("NQSOs") (collectively "Stock
Options"). The option price per share of ISOs must be equal to the fair
market value of a share of Common Stock on the date granted; the option
price of NQSOs may be set by the Compensation Committee ("Committee"). The
exercise period of ISOs may not be more than ten years from grant, while the
period of NQSOs may be set by the Committee. No Stock Option may be
exercised until six months after the date of grant. The purchase price of
any Stock Option must be paid upon exercise in (i) immediately available
funds, (ii) shares of Common Stock, or (iii) a combination of (i) and (ii).
In the event a participant's employment is terminated due to death,
disability or retirement, ISOs awarded remain exercisable for the maximum
period allowable under the Internal Revenue Code of 1986, as amended
("Code"), and NQSOs remain exercisable for the remainder of the option term
or five years, whichever is less. If a participant's employment is
terminated for any reason, all Stock Options granted will be canceled
immediately; provided, however, that if the Company terminates a participant
for reasons other than misconduct or misfeasance, the participant has 30
days to exercise any Stock Options; and provided further, that if
termination is attributable to a "change in control," any Stock Options
previously granted will continue for their term.
</TABLE>
9
<PAGE> 12
OPTION EXERCISES AND HOLDINGS
The following table contains information concerning the exercise of Stock
Options under Myers' 1992 Plan and its 1982 Plan, and information on unexercised
Stock Options held as of the end of the fiscal year, by the Named Executive
Officers:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS/SARS IN-THE-MONEY
AT FISCAL OPTIONS AT
YEAR-END YEAR-END
SHARES
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE1
- --------------------- ----------- -------- ------------- --------------
<S> <C> <C> <C> <C>
Stephen E. Myers 1,512 $ 1,671 5,455/6,970 $ 6,620/4,414
Milton I. Wiskind 1,664 17,838 4,780/4,380 13,313/5,726
Gregory J. Stodnick 1,664 14,094 4,780/4,380 13,313/5,726
</TABLE>
- ---------------
(1) Based upon the closing price reported on the American Stock Exchange for the
Common Stock of Myers on December 31, 1996.
BENEFICIAL OWNERSHIP
The following table sets forth certain information regarding the named
executives' beneficial ownership of the Common Stock of the Company as of
January 31, 1997.
<TABLE>
<CAPTION>
TITLE OF CLASS NAME OF OFFICER NUMBER OF SHARES(1) PERCENT OF CLASS(2)
- --------------------- --------------------- -------------------- ---------------------
<S> <C> <C> <C>
Common Stock Stephen E. Myers 1,507,388 8.9%
Common Stock Milton E. Wiskind 390,424 2.3%
Common Stock Gregory J. Stodnick 19,138 --
</TABLE>
- ---------------
(1) The amounts shown represent the total shares owned outright by such
individuals together with shares which are issuable upon the exercise of
currently exercisable stock options. These individuals have the right to
acquire the shares indicated after their names, upon the exercise of such
stock options: Mr. Myers, 5,455; Mr. Wiskind, 4,780; and Mr. Stodnick,
4,780.
(2) Unless otherwise listed, none of the listed officers owns more than one
percent of the applicable class.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, which is composed entirely of non-employee
directors, is responsible for setting and administering the policies which
govern both annual compensation and stock option plan for Myers, has furnished
the following report on executive compensation.
The executive compensation program for the Named Executive Officers, which
includes the Chief Executive Officer, is administered by the Compensation
Committee of the Board of Directors. The Committee's function is to review the
performance of the Named Executive
10
<PAGE> 13
Officers and the performance of the Company in determining the amount and type
of compensation to be paid and awarded, including incentive compensation, and
approves the salary adjustments and awards in these areas. In addition, the
Committee reviews and recommends plans, programs and benefits relating to
executive and key personnel compensation. The Committee's focus is on total
compensation which consists primarily of an executive's: (i) base salary, (ii)
bonus, (iii) stock options, and (iv) other benefits, such as health and pension
benefits, which are available to all employees.
Although the compensation of the Chief Executive Officer is determined
individually, the criterion and process used is the same as used in determining
the compensation of the other Named Executive Officers. Determination of
compensation is based upon a number of important factors, including the profit
performance of the Company as a whole in relation to the prior year, and other
factors such as return on equity, net income margin and shareholder return.
With regard to base salaries at the executive officer level, the Committee
believes the base salaries set are modest by industry standards and on an
historic basis have been infrequently adjusted. The Committee also believes that
two of the other components of compensation, the award of bonuses and stock
options, provide the Named Executive Officers with a greater incentive to
perform and to ensure that the executive's interests are closely tied to those
of the Company and its shareholders.
The amount of bonus awarded to the Chief Executive Officer and the other Named
Executive Officers for each year is a function of the profit performance of the
Company as a whole in relation to the prior year, and other factors such as
return on equity, net income margin and shareholder return. None of these
factors are given a specific weighting; instead they are considered as a whole.
In the event the Committee determines to award a bonus, the bonus for any year
is generally determined on or before March 1 of the following year and then
distributed based on a three year partial distribution cycle. Fifty percent of
the total bonus awarded is paid in the first year and 25 percent in each of the
following two years. Any unpaid bonus may be forfeited if the executive officer
is not employed by the Company prior to the full distribution of the bonus
awarded.
The shareholder approved 1992 Plan authorizes grants of options to purchase
stock, generally at current market prices, to executive officers and "key
employees." Whether options are to be granted and if so, the amounts to be
granted, are functions of the Compensation Committee. In the granting of the
stock options, in addition to the factors mentioned above, the individual Named
Executive Officer's level of responsibility and past contributions to the
Company are taken into consideration. In an effort to foster extended
employment, such as with the bonus awards, any options awarded vest at 20
percent per year over a five-year period and expire on the sixth anniversary.
Any unexercised options are forfeited if the executive leaves the Company's
employ voluntarily, or if he is terminated for just cause prior to total
vesting.
The Committee has reviewed the qualifying compensation regulations under
Section 162(m) as issued by the Internal Revenue Service which provide that no
deduction is allowed for
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applicable employee remuneration paid by a publicly-held corporation to a
covered employee to the extent that the remuneration paid to the employee
exceeds $1.0 million for the applicable taxable year, unless certain conditions
are met. Currently, remuneration is not expected to exceed the $1.0 million base
and, therefore, compensation should not be affected by the qualifying
compensation regulations.
The foregoing report has been furnished by the current members of the
Compensation Committee, being:
Richard L. Osborne Jon H. Outcalt Samuel Salem
PROPOSAL NO. 2
APPROVAL OF THE COMPANY'S 1997 INCENTIVE STOCK PLAN
The Board of Directors has adopted, subject to shareholder approval, the Myers
Industries, Inc. 1997 Incentive Stock Plan (the "1997 Stock Plan"). The Board of
Directors believes that approval of the 1997 Stock Plan will advance the
interests of the Company by providing eligible employees the opportunity to
receive equity-based stock awards.
The Company currently has only 79,954 shares available for grant to employees
under the 1992 Plan. The 1992 Plan was approved by the shareholders in 1992.
A total of 500,000 shares of Common Stock have been reserved for issuance
under the 1997 Stock Plan. The number of shares reserved is the amount estimated
to meet the Company's requirements for the next five years. The remaining shares
under the 1992 Stock Plan will remain available for grant.
Awards of discretionary and performance employee stock options can be made
under the 1997 Stock Plan. The maximum annual grant which could be made to any
one individual is limited to one and one-half percent of the total outstanding
shares of Common Stock of the Company at the time of grant. No award may be
granted under the 1997 Stock Plan after ten years from the date of the 1997
Stock Plan, but awards previously granted but unexercised may extend beyond such
date.
As of January 1, 1997, approximately 183 employees, including executive
officers, were eligible to participate in the 1992 Stock Plan. Such individuals
will also be eligible to participate in the 1997 Stock Plan if it is approved.
It is not currently possible to determine the benefits or amounts which may be
received by the future participants of the 1997 Stock Plan.
SUMMARY OF THE 1997 STOCK PLAN
The following summary description of the 1997 Stock Plan is qualified in its
entirety by reference to the full text of the 1997 Stock Plan. Copies of the
plan document may be obtained by a shareholder upon written request to the
Secretary of the Company.
Awards to participants may be either incentive stock options ("ISOs") or
non-qualified stock options ("NQSOs") (collectively, "Stock Options"). The
option price per share for ISOs
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must be at least equal to the fair market value of a share of Common Stock on
the date the option is granted; the option price per share for NQSOs, however,
may be set by the Compensation Committee (the "Compensation Committee" or
"Committee").
The exercise period for ISOs cannot be more than ten years from the date of
grant, while the exercise period for NQSOs may be set by the Committee. Stock
options are not transferable, except by will or the laws of descent and
distribution, and they may not be subjected to any lien or liability. If granted
at the time of an award, a one time reload option may also be granted for stock
options equal to the number of whole shares used by the participant to exercise
the option. The Company may also require a participant to pay or otherwise
satisfy applicable withholding for income and employment taxes. The Committee
may prescribe additional rules governing the exercise of stock options and may
accelerate their exercisability, subject to certain restrictions imposed under
the Code.
In the event a participant's employment is terminated due to death, disability
or retirement, ISOs awarded to the participant will remain exercisable for the
maximum period allowable under the Code, and NQSOs will remain exercisable for
the remainder of the option term or five years, whichever is less. If a
participant's employment is terminated for any reason other than death,
disability or retirement, all stock options granted under the 1997 Stock Plan
will be canceled immediately; provided, however, that if the Company terminates
a participant for reasons other than misconduct or misfeasance, the participant
may be granted 30 days to exercise any Stock Options; and provided further, that
if termination is attributable to a "Change of Control" (as defined in the 1997
Stock Plan), any Stock Options previously granted will continue for their term,
or may immediately vest, as determined by the Committee.
ADMINISTRATION OF THE 1997 STOCK PLAN
The 1997 Stock Plan will be administered by the Compensation Committee of the
Board of Directors. The Compensation Committee is comprised solely of persons
who qualify both as "outside directors" (within the meaning of Section 162(m))
and "non-employee directors" (within the meaning of Rule 16b-3 promulgated under
the Securities Exchange Act of 1934), except that a person who otherwise may not
so qualify may be appointed where a recusal procedure is utilized by the
Committee for awards under the Plan. Subject to the terms of the 1997 Stock
Plan, the Committee has authority to interpret the 1997 Stock Plan; determine
eligibility for the grant of awards; determine, modify or waive the terms and
conditions of any award; and otherwise do all things necessary to carry out the
purposes of the 1997 Stock Plan.
ELIGIBILITY AND PARTICIPATION
In general, the Committee will recommend and select the employees for
participation in the 1997 Stock Plan. Participants will be among the employees
of the Company who are in a position to make a positive contribution to the
success of the Company.
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PAYMENT AND TAX WITHHOLDING
The full purchase price of any stock option must be paid upon exercise either
in (i) immediately available funds, (ii) shares of Common Stock having an
aggregate fair market value equal to the full purchase price, (iii) a
combination of (i) and (ii), or (iv) by use of a cashless exercise procedure.
The Company's obligation to deliver Common Stock upon the exercise of a stock
option is subject to the satisfaction by the participant of all applicable tax
withholding requirements. A participant may satisfy such obligation by delivery
of shares of Common Stock or by the Company withholding Common Stock issuable
upon the exercise.
CHANGES IN CAPITALIZATION; CHANGE OF CONTROL
In the event the outstanding shares of the Company's Common Stock are
increased or decreased as a result of stock dividends, stock splits,
recapitalizations, reorganizations, mergers or other changes in corporate
structure effected without the receipt of consideration, then appropriate
adjustments will be made to the class and/or number of shares under existing
option awards and available for subsequent issuance under the 1997 Stock Plan.
In the event of a Corporate Transaction or Change of Control, all unvested
options which have been outstanding under the 1997 Stock Plan will immediately
vest in full, except (and to the extent) there are limitations at the time the
options are issued under the 1997 Stock Plan which preclude such accelerated
vesting in whole or in part. The acceleration of the vesting could have the
effect of discouraging a Corporate Transaction or Change of Control of the
Company and in management even though such Corporate Transaction or Change of
Control could be favored by a majority of shareholders. "Change of Control"
under the 1997 Stock Plan is basically defined as a change in 30% or more of the
beneficial ownership of the Company or a change of a majority of the Board of
Directors within a two year period.
VALUATION
For purposes of valuation under the 1997 Stock Plan, the fair market value of
a share of Common Stock, on any relevant date, is the reported closing selling
price per share on the American Stock Exchange.
AMENDMENT AND TERMINATION
The Board of Directors may at any time amend, suspend or terminate the 1997
Stock Plan, in whole or part, provided such action does not adversely affect the
rights of participants with respect to outstanding options. No modification to
the 1997 Stock Plan may, without shareholder approval, increase the number of
shares issuable under the 1997 Stock Plan.
Unless sooner terminated by Board action, the 1997 Stock Plan will terminate
upon the earlier of (i) ten years after the date of the Plan, or (ii) the first
date when all the shares of the Company's Common stock available for issuance
thereunder have been issued.
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PRICE OF COMMON STOCK
The closing price of the Common Stock on the American Stock Exchange on
February 28, 1997 was $16 3/8.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes certain federal income tax consequences of
the issuance and exercise of stock options awarded under the 1997 Stock Plan.
The summary does not address all federal tax consequences, nor does it cover
state or local tax consequences.
In general, a participant realizes no taxable income on either the grant or
the vesting of a stock option. The exercise of a NQSO results in ordinary income
(generally subject to withholding, if the participant is an employee) equal to
the difference (the "Option Spread") between the value of the Common Stock
purchased and the option exercise price. A corresponding deduction is available
to the Company. In general, the ordinary income associated with the exercise is
measured and taken into account at the time of exercise. Any subsequent sale of
Common Stock purchased under a NQSO may result in a capital gain or loss.
The exercise of an ISO does not produce ordinary taxable income. However,
because the Option Spread constitutes "alternative minimum taxable income"
(measured and taken into account, in general, at the time of exercise), exercise
of an ISO may result in an alternative minimum tax liability. In addition,
shares purchased under an ISO ("ISO Shares") are subject to special tax holding
rules. If a participant holds on to ISO Shares for at least two years from the
date of the ISO grant and at least one year after exercise, any gain or loss
recognized for tax purposes upon a subsequent sale of the shares will be a
long-term capital gain or loss. A disposition of ISO Shares, however, by the
participant within either of these special holding periods (a so-called
"disqualifying disposition") results in ordinary compensation income in the year
of the disposition equal, in general, to the Option Spread at the time the
option was exercised. The ordinary income realized upon a disqualifying
disposition of ISO Shares is deductible by the Company but is not subject to
withholding. Any additional gain recognized for tax purposes in a disqualifying
disposition will be taxed as short-term or long-term capital gain.
An ISO that is exercised by the participant more than three months following
termination of employment (one year, if termination occurred by reason of total
and permanent disability) is treated for tax purposes as a NQSO. ISOs granted to
a participant under the 1997 Stock Plan (together with ISOs granted to the
participant after 1986 under any other plans of the Company) are also treated as
NQSOs to the extent that, in the aggregate, they first become exercisable in any
calendar year for shares of Common Stock having a fair market value (determined
at time of grant) in excess of $100,000.
Under the so-called "golden parachute" provisions of the Code, certain awards
vested or paid in connection with a Change of Control of the Company may also be
non-deductible to the Company and may be subject to an additional 20% federal
excise tax. Non-deductible "parachute payments" will in general reduce the $1.0
million limit on deductible compensation
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under Section 162(m) of the Code, to the extent such limit is applicable to
remuneration paid under the 1997 Stock Plan or otherwise.
No taxable income is recognized by an optionee upon the grant of a NQSO. The
optionee will in general recognize ordinary income, in the year in which the
option is exercised, equal to the excess of the fair market value of the
purchased shares on the exercise date over the option price paid for such
shares, and the optionee will be required to satisfy the tax withholding
requirements applicable to such income.
The Company will be entitled to a business expense deduction equal to the
amount of ordinary income recognized by the optionee with respect to the
exercised NQSO. The deduction will in general be allowed for the taxable year of
the Company in which ordinary income is recognized by the optionee in connection
with the acquisition of the option shares.
If the 1997 Stock Plan is approved by the shareholders, certain benefits to
executive officers under the 1997 Stock Plan will be eligible for treatment as
"performance based" compensation under Section 162(m) of the Internal Revenue
Code. The 1997 Stock Plan is intended to comply with Section 162(m) by allowing
awards granted under the 1997 Stock Plan to qualify as performance-based
compensation.
The Company anticipates that any compensation deemed paid by it in connection
with disqualifying dispositions of ISOs or exercises of NQSOs granted with an
exercise price equal to the fair market value of the option shares at the time
of grant will qualify as performance-based compensation for purposes of Code
Section 162(m) and will not have to be taken into account for purposes of the
$1.0 million limitation per covered individual on the deductibility of the
compensation paid to certain executive officers of the Company. Accordingly, all
compensation deemed paid with respect to those options will remain deductible by
the Company without limitation under Code Section 162(m).
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of a majority of the shares of the Company
Common Stock present in person or represented by proxy at the Annual Meeting, a
quorum being present, is required for the approval of the 1997 Stock Plan. A
majority of the outstanding shares of Common Stock constitutes a quorum.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR THE APPROVAL OF THE 1997 STOCK PLAN.
PROPOSAL NOS. 3, 4 AND 5
PROPOSALS FOR DEFENSIVE STRUCTURING
OVERVIEW OF PROPOSALS
The Board of Directors has approved amendments to the Company's Articles of
Incorporation and Code of Regulations to effectuate certain basic defensive
structuring procedures against a possible hostile takeover attempt of the
Company (the "Proposed
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Amendments"). The Proposed Amendments are similar to those procedures adopted by
many public companies and their shareholders, and are not in response to any
efforts of which Myers is aware to accumulate Myers stock or to obtain control
of Myers.
The general purposes of the Proposed Amendments are to promote conditions of
continuity and stability in Myers' Board, management, business and policies; to
ensure that all shareholders are afforded the opportunity at shareholder
meetings to discuss fully and consider matters which affect their rights; and to
help assure Myers' shareholders fair and equitable treatment in the event a
third party were to attempt a hostile takeover of Myers.
The Proposed Amendments are divided into three proposals of related matters:
Proposal No. 3 deals with provisions related to the Board of Directors
and would (a) provide for a classified board of directors, divided into
three classes; (b) give the board of directors the right to set the number
of directors; (c) adopt a formal nomination procedure for the election of
directors; (d) provide that directors can only be removed for "cause"
during their term; and (e) require a two-thirds vote of shareholders to
change these amendments and the existing provision for calling a special
meeting of the shareholders.
Proposal No. 4 would increase the vote required by the shareholders in
approving certain extra-ordinary corporate transactions, such as mergers,
consolidations, majority share acquisitions, and certain amendments to the
Articles of Incorporation, from a majority to two-thirds, unless approved
by the Board in advance, and then by a majority vote of the shareholders.
Proposal No. 5 would allow the Company to "opt out" of the Ohio
Control Share Acquisition Act. This Act provides that a company must call a
special shareholders meeting at such times as a person or entity indicates
its intent to acquire a significant amount of the Company's Common Stock.
Although this Act has beneficial features with regard to protection from
hostile takeovers, since its adoption Ohio has enacted other laws which
also provide material protection. The Board believes the costs and
procedures related to compliance with this Act probably outweigh its
benefits to the Company and its shareholders.
The Board of Directors has considered the advantages and disadvantages of
adopting the Proposed Amendments and has determined that the adoption of each of
the Proposed Amendments is in the best interests of the shareholders and Myers.
The shareholders, however, may find the Proposed Amendments disadvantageous to
the extent that they discourage takeovers in which shareholders might receive
for some or all of their shares a price which is higher than the prevailing
market price at the time the takeover attempt is made. Further, to the extent
that the Proposed Amendments may make it less likely that a hostile takeover
attempt opposed by Myers' incumbent Board of Directors will succeed, the effect
may be to assist the Board of Directors and management in retaining their
existing positions.
In considering each of the Proposals, you should review the section in this
Proxy titled "Existing Anti-Takeover Provisions of Ohio Law and in the Company's
Corporate Documents," which appears at the end of the discussion concerning
Proposal No. 5. This section provides
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you with additional information regarding the existing laws and provisions
affecting the Company which may be viewed as having an "anti-takeover" effect.
The following summary descriptions of the Proposed Amendments are not intended
to be complete and are qualified in their entirety by reference to the complete
text of the Proposed Amendments which are attached to this Proxy Statement as
Appendices A and B.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE PROPOSED AMENDMENTS
WHICH ARE PRESENTED AS PROPOSAL NOS. 3, 4 AND 5 BELOW.
APPROVAL OF PROPOSAL NOS. 3 AND 5 REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS
OF A MAJORITY OF MYERS' COMMON STOCK.
APPROVAL OF PROPOSAL NO. 4 REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF
TWO-THIRDS OF MYERS' COMMON STOCK.
PROPOSAL NO. 3
AMENDMENT OF THE CODE OF REGULATIONS TO PROVIDE FOR A
CLASSIFIED BOARD OF DIRECTORS AND OTHER RELATED AMENDMENTS
Overview of Proposal No. 3
Proposal No. 3 consists of a proposal to amend the Code of Regulations to
classify the board of directors into three classes of directors serving
staggered three-year terms and for certain related amendments to the Code of
Regulations. "Related Amendments" to the Code of Regulations would also (a) give
the board of directors the authority to determine the number of directors and to
fill positions created by an increase in the size of the board of directors; (b)
give the board of directors the right to set the number of directors; (c) adopt
a formal nomination procedure for the election of directors; (d) provide that
directors can only be removed for "cause" during their term; and (e) require a
two-thirds vote of shareholders to change these amendments and the provision for
calling a special meeting of the shareholders.
Approval of Proposal No. 3 requires the affirmative vote of the holders of a
majority of Myers' Common Stock.
Purpose and Effect of Proposal
The Board of Directors believes that the adoption of the classified board of
directors is advantageous to Myers and its shareholders because by providing
that directors will serve three-year terms, rather than one-year terms, it
enhances the likelihood of continuity and stability in the composition and in
the policies of Myers' Board of Directors. The Board of Directors believes that
this in turn will permit it to represent more effectively the interests of all
shareholders.
There has been an increasing number of attempts by individuals and entities to
acquire significant minority positions in public companies with the intent of
obtaining actual control of the companies by electing their own slate of
directors, or by achieving some other goal, such as the repurchase of their
shares at a premium, by threatening to obtain such control. An
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individual or entity often can elect a majority of a company's board of
directors through a proxy contest or otherwise even though it does not own a
majority of the company's outstanding shares. This Proposed Amendment to the
Code of Regulations and the Related Amendments may discourage such purchases
because its provisions would operate to delay the purchaser's ability to take
control of the board of directors in a relatively short period of time. The
delay would occur because under the Proposed Amendment, it will generally take a
purchaser at least two Annual Meetings of Shareholders to elect a majority of
the board of directors.
For the same reasons, the adoption of a classified board of directors and the
Related Amendments described above may also deter certain mergers, tender
offers, or other future takeover attempts which some or even a majority of
holders of shares of Myers' capital stock may deem to be in their best interest.
In addition, the proposals to amend the Code of Regulations, if adopted, could
delay shareholders who do not like the policies of the board of directors from
removing a majority of the board of directors for two years unless they can show
cause and obtain the requisite vote.
In addition, if the Proposed Amendments are adopted, early success of a person
or entity in an attempt to take control of the board of directors could be
thwarted by the incumbent directors through increasing the size of the board of
directors and appointing to the new seats persons holding views consistent with
the incumbent directors. This prospect could have a significant deterrent effect
on attempts by third parties or existing shareholders to seek control of the
board of directors.
The Proposed Amendments
Staggered Board of Directors. The Board of Directors approved a resolution to
amend Section 2 of Article II of the Code of Regulations to provide for the
division of the board of directors into three approximately equal classes of
directors serving staggered three-year terms. The exact number of directors
initially will be eight directors, but the number may be varied from time to
time, (a) under the current Code of Regulations, by resolution adopted by the
shareholders, or (b) under one of the Related Amendments discussed below, by
resolution adopted by the board of directors.
Under the Proposed Amendment, one-third of the board of directors would be
elected each year. Initially, however, members of all three classes will be
elected at the Annual Meeting. If the Proposed Amendment is adopted, the slate
of eight directors proposed for election at the Annual Meeting would be proposed
to be elected for three separate classes as follows: two directors (Class I)
would be elected for a term expiring at the 1998 Annual Meeting; three directors
(Class II) would be elected for a term expiring at the 1999 Annual Meeting; and
three directors (Class III) would be elected for a term expiring at the 2000
Annual Meeting.
At each annual meeting after the 1997 Annual Meeting, directors would be
elected to succeed those whose terms expire with each newly elected director to
serve for a three-year term. (See Appendix B for the exact Regulation, as
amended.)
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Authority to Set Number of Directors. Article II, Section 2 of the Code of
Regulations currently provides that the number of directors shall be determined
from time to time by the vote of a majority of the shareholders present in
person or by proxy at a meeting called for that purpose at which a quorum is
present. This is consistent with the rule under Ohio law when no provision is
made in the Articles or Code of Regulations.
Under the Proposed Amendment, the directors would have the sole authority to
set the number of directors. The purpose of the proposed amendment is to prevent
a potential acquiror from accomplishing an increase in the size of the board and
electing thereto persons likely to vote for a change of control.
The Proposed Amendment may have the effect of preventing or discouraging a
third party from attempting to disturb the stability and continuity of the board
of directors or attempting to increase the size of the board so as to defeat the
purpose of the classified board. In addition, the proposed amendment would give
the majority of directors the authority to increase the size of the board and,
through its authority to fill vacancies, to elect persons who have views similar
to their own to fill any added seats, thereby enabling them to maintain control
of the board of directors until a shareholders' meeting is called. (See Appendix
B for the Regulation, as amended).
Procedure for Director Nominations. Neither the Articles nor the Code of
Regulations currently contain provisions prescribing a procedure governing
nomination by shareholders of persons to be elected as directors, except that
only persons nominated as candidates shall be eligible for election as
directors.
One of the Related Amendments would create the following requirements for
shareholders nominating a person for election as director. Shareholders who
intend to nominate a director for election would be required to deliver written
notice to the Secretary of Myers no later than (a) with respect to an election
to be held at an Annual Meeting of Shareholders for the election of directors,
90 days in advance of such meeting, and (b) with respect to an election to be
held at a Special Meeting of Shareholders, the close of business on the seventh
day following the date on which notice of such meeting is first given to
shareholders.
The notice from the shareholder must set forth information concerning the
shareholder and the nominee, including their names and addresses, a
representation that the shareholder is entitled to vote in the meeting and
intends to appear in person or by proxy at the meeting and nominate the person
or persons specified in the notice, a description of all arrangements or
understandings between the shareholder and each nominee, such other information
as is required to be included in a proxy statement, and the consent of each
nominee to serve as a director of Myers if so elected. The chairman of the
meeting may refuse to acknowledge the nomination of any person not made in
compliance with this procedure. (See Appendix B for the exact Regulation, as
amended.)
By regulating shareholder nominations at any meeting of shareholders, the
advance notice requirement affords the board of directors the opportunity to
consider the qualifications of the proposed nominees and, to the extent deemed
necessary or desirable by the board, inform
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shareholders about such qualifications. Although the amendment does not give the
board any power to approve or disapprove shareholder nominations for election of
directors, it may have the effect of discouraging or deterring a dissident
shareholder from conducting a solicitation of proxies to elect his own slate of
directors, without regard to whether this might be harmful or beneficial to
Myers and its shareholders.
Restrictions on Removal of Directors. Under existing law, if no provision to
the contrary is contained in the Articles or the Code of Regulations, a director
may be removed from office, with or without cause, upon the vote of the holders
of a majority of the voting power entitling them to elect directors in place of
those to be removed. Currently, neither the Articles nor the Code of Regulations
addresses the removal of directors. Another Related Amendment would change this
by prohibiting the removal of a director during the term for which he was
elected except for cause, and then only upon the vote of holders of two-thirds
of the shares of stock outstanding and entitled to vote for directors generally.
(See Appendix B for the exact Regulation, as amended.)
The purpose of this Related Amendment is to prevent a hostile acquiror from
gaining control of the board of directors by effecting the removal of directors
previously elected by the shareholders who are antagonistic to the hostile
acquiror's plans.
Increase in Vote Necessary to Modify or Repeal Certain Amendments. Under the
current Code of Regulations, the holders of a majority of the voting power of
the Company may amend or repeal any provision of the Code of Regulations.
Another Related Amendment is to provide, in effect, that the specific provisions
in the Code of Regulations which are being amended by this Proposal No. 3, in
Proposal No. 5, and in Section 2, Article I (Special Meetings of the
Shareholder), could not be amended or rescinded without a vote of two-thirds of
the outstanding voting shares of Myers. The vote required for amendment or
rescission of any other provision of the Code of Regulations would be
unaffected. (See Appendix B for the Regulation, as amended.)
The purpose of this Related Amendment is to ensure that the effect of the
other amendments considered in this Proposal No. 3, as well as the amendment in
Proposal No. 5, and the existing Code of Regulations provision governing who may
call a special meeting of shareholders, would not be circumvented by a simple
majority of the shareholders.
PROPOSAL NO. 4
SUPER-MAJORITY VOTE OF THE SHAREHOLDERS FOR APPROVAL OF CERTAIN
EXTRAORDINARY CORPORATE TRANSACTIONS AND CERTAIN AMENDMENTS TO THE ARTICLES
Overview of Proposal No. 4
The Board of Directors has approved a resolution to amend Article VII of the
Articles. In general, the proposed amendment would: increase from a majority to
two-thirds the vote of shareholders necessary to approve certain mergers,
consolidations, combinations and control share acquisitions, unless the
transaction was approved by a vote of at least 75% of the Board
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of Directors, then by only a majority vote of the shareholders; and would
decrease to a majority the proportion of shareholders necessary to approve all
other events for which Ohio law otherwise would require a proportion greater
than a majority.
Ohio law provides that a proportion greater than a majority--typically
two-thirds--is required for the approval of certain extraordinary corporate
events, such as an amendment to the Articles of Incorporation, the approval of a
merger or other combination, the sale of substantially all the assets of the
corporation, or the dissolution of the corporation. An Ohio corporation may,
however, provide that some or all of those extraordinary events be approved by a
proportion less than two-thirds (but not less than a majority).
Currently, Myers' Articles of Incorporation provide that a "merger,
consolidation, combination or majority share acquisition" (as those terms are
defined under Ohio law) may be approved by holders of a majority of the voting
power of the Company or of any class or classes entitled to vote on such event.
Because not specifically addressed in the Articles, all other matters for which
Ohio law requires a voting proportion greater than a majority, require that
greater proportion for passage.
The Proposed Amendment
Under this Proposed Amendment, approval of: a consolidation; a merger in which
the Company is not a surviving corporation; a combination or majority share
acquisition in which the Company is not an acquiring corporation; or, an
amendment or repeal of this Proposed Amendment, would require the vote of
holders of shares entitling them to exercise two-thirds of the voting power of
the Company or of any required class or classes of shares, unless the board of
directors, by resolution approved by seventy-five percent (75%) of its total
membership, has proposed the measure or has recommended adoption or approval of
the measure. All other matters for which Ohio law requires a greater proportion
than a majority would be approved upon the affirmative vote of the holders of
shares entitling them to exercise a majority of the voting power of the
corporation or of any required class or classes of shares, except for the events
listed above. (See Appendix A for the exact Article, as amended.)
Purpose and Effect of Proposed Amendment
The purpose of this Proposed Amendment is to ensure that final decisions by
the shareholders on matters affecting the future independence of Myers more
closely reflect the views of all the shareholders, by requiring the approval of
two-thirds of the shareholders, instead of the current majority, for
extraordinary transactions where the result would be that Myers is no longer an
independent company. To ensure that the effect of this Proposed Amendment would
not be circumvented by a simple majority of the shareholders, the Proposed
Amendment also provides that it cannot be repealed or modified except upon the
approval of two-thirds of the shareholders.
One possible effect of this Proposed Amendment is that an incumbent board of
directors could be deemed to have a veto over mergers and similar transactions
even though the transaction is desired by a majority of the shareholders. This
could also be deemed to be
22
<PAGE> 25
assisting management in retaining their present positions. Another effect is
that the holders of a minority of the total shares outstanding and entitled to
vote could be deemed to have a veto over a transaction which management, a
majority of the Directors and a majority of the shareholders may believe is
desirable. As of February 14, 1997, an aggregate of 28.4% of the outstanding
voting securities of Myers is owned by management, the Board of Directors and
principal shareholders of Myers.
PROPOSAL NO. 5
PROPOSAL FOR THE COMPANY TO "OPT OUT" OF THE
OHIO CONTROL SHARE ACQUISITION STATUTE
Overview of Proposal No. 5
The Board of Directors has approved a resolution to amend the Code of
Regulations of the Company which, if adopted, would make an Ohio anti-takeover
statute, referred to herein as the "Control Share Acquisition Act," inapplicable
to the Company.
Adoption of the Amendment requires the affirmative vote of the holders of a
majority of the outstanding common shares of the Company.
Reasons for the Proposed Amendment
The Board of Directors believes that the reasons given for adoption of the
Control Share Acquisition Act are not as compelling today as they were when the
law was passed in 1982. Since 1982, there have been significant developments in
Ohio and federal law, which provide significant additional protection to
shareholders when faced with a hostile tender offer or when large blocks of a
corporation's shares are purchased. In addition, the Board believes there are
circumstances under which compliance with the Control Share Acquisition Statute
may be unnecessarily costly to the Company, have a chilling effect on the
willingness of third parties to buy shares of the Company, may deprive
shareholders of the right to sell their shares or may adversely impact the
Board's ability to act in what it believes is the best interests of shareholders
in hostile takeover attempts.
The Board of Directors believes that opting-out of the Control Share
Acquisition Act is advantageous to Myers and its shareholders for the following
reasons:
Developments in Ohio Corporate and Securities Law and Federal Securities
Laws. Since the adoption of the Control Share Acquisition Act, there have been
material additions to Ohio corporate and securities laws that provide
significant protective measures against hostile takeovers.
In 1990, Ohio enacted the Ohio Interested Shareholder Transaction Statute (the
"Merger Moratorium Statute"), which severely limits a purchaser of 10% or more
of the shares of an Ohio corporation from engaging in transactions with the
corporation. Unless the purchaser first
23
<PAGE> 26
obtains approval of the board of directors of the corporation of his
acquisition, he is precluded from taking certain actions for three years.
In 1986, Ohio corporate law was amended to confirm the authority of Ohio
corporations to adopt certain protective plans which are commonly called
"shareholder rights plans." These plans can have the effect of strengthening the
bargaining power of a board of directors in a hostile change of control contest.
The Board of Directors, however, does not presently anticipate adopting such a
plan.
Subsequent to 1982, the provisions of the Ohio Securities Act regulating
"control bids" have been administered by the Ohio Division of Securities in such
a manner that they are presently held to be enforceable and not preempted by
federal law, or invalid under the Constitution of the United States.
Since 1982, there have been amendments to rules and regulations promulgated
under the Securities Exchange Act of 1934 (the "1934 Act") or changes in the
interpretation of such rules and regulations which lessen the "coercive" effect
of tender offers. These changes relate to the length of the tender offer period,
all holders and best price rule, withdrawal of tender offers, required
disclosures and timeliness of disclosures.
Untimely and Costly Special Meetings of Shareholders and Litigation. Under the
Control Share Acquisition Act, the board of directors of a corporation is
required to convene a special meeting of shareholders of the corporation if any
person, even a person who does not own any shares of the corporation, sends an
"acquiring party statement" to the corporation. The statement must indicate,
among other things, that within the next 360 days such person may effect a
control share acquisition and represents to the corporation that he has the
financial capability to effect a control share acquisition.
Under the statute, the meeting to vote on the control share acquisition is
required to be held within 50 days of the corporation's receipt of the acquiring
party statement. Since Myers is subject to the proxy rules promulgated under the
1934 Act, Myers would be required immediately to convene a meeting of its Board
of Directors to determine the Company's position with respect to the proposed
control share acquisition, to authorize and approve appropriate proxy materials
for the special meeting, and generally to take all action necessary and
appropriate to convene a special meeting of shareholders of a public company.
The procedures to comply with the Control Share Acquisition Act's special
meeting and proxy counting requirements are extremely complex, uncertain as to
application and must be completed within an extremely short period of time.
Not only would this be costly to Myers, but the uncertainty of the outcome of
the vote on the control share acquisition could adversely affect trading in
Myers' securities or could adversely impact or delay pending corporate
transactions, such as public or private equity or debt financings, proposed
acquisitions or sales, or other major transaction.
The Ohio public corporations which have been subject to these types of hostile
attempts have also been simultaneously subjected to significant and costly
lawsuits regarding the applicability and constitutionality of the Control Share
Acquisition Act. The costs and time
24
<PAGE> 27
which a corporation must devote to defending against such lawsuits, and in
preparing for and holding the required special meetings, are significant.
Possible Adverse Impact in a Change of Control Contest. On its face, the
Control Share Acquisition Act appears protective of the interests of
shareholders in that it allows the holders of shares which are not interested
shares to determine the outcome of a change of control contest. In many
situations, however, the Board of Directors believes that the uncertainty and
delay caused by the requirements of the statute could hamper the ability of the
Board to induce other parties to present competing offers.
In addition, a situation could develop where if the first person to propose a
control share acquisition owns a substantial percentage of the Company's shares,
e.g. 19%, such a person could be in a position to have a veto power over any
subsequent and competing control share acquisition. This results from the fact
that such a 19% holder would be the holder of a substantial portion of the
shares which would be treated as "disinterested" shares when voting on a
competing control share acquisition since many of the Company's outstanding
shares are likely to be treated as interested shares.
Unnecessary Restriction on the Right of a Shareholder to Sell or Buy
Shares. As noted below, no shareholder is permitted, without the approval of the
holders of interested shares, to sell his shares to any person who as a result
of such purchase would first attain ownership of 20%, 33% or a majority of the
outstanding shares of the Company. The Board believes, as discussed below, that
such a restriction on a shareholder's right to sell shares, or another person's
right to buy shares, is unnecessary in view of the other protections afforded
shareholders by Ohio corporate and federal law.
Background on the Ohio Control Share Acquisition Act
In November 1982, the Ohio General Corporation Law was amended to include the
"Control Share Acquisition Act" which requires that "control share acquisitions"
be approved by shareholders. In adopting the statute, the General Assembly of
Ohio found that Ohio corporate law did not adequately protect the interests of
shareholders of Ohio corporations when confronted with "non-traditional" changes
of control of a corporation, such as changes of control effected by tender
offers or accumulations of significant blocks of shares in the public markets or
private transactions.
The Ohio Control Share Acquisition Act gives shareholders who are not holders
of "interested shares" a veto power over certain acquisitions of shares of an
Ohio corporation. The Control Share Acquisition Act automatically applies to all
corporations incorporated in Ohio and having certain jurisdictional contacts
with Ohio, unless the shareholders vote to "opt out" of the statute.
Summary of Control Share Acquisition Act Procedures
Under the Control Share Acquisition Act, a "control share acquisition" is a
direct or indirect acquisition by any person or entity of such number of voting
shares of a corporation which,
25
<PAGE> 28
when added to those shares which the person or entity already owns or with
respect to which the person or entity may exercise or direct the exercise of the
voting power, would give the person or entity voting power within any of the
following ranges: (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.
A person or entity who proposes to make a control share acquisition must
provide notice of the proposal to the corporation in accordance with specific
requirements. The board of directors must then call a special meeting of the
shareholders within 50 days for the purpose of voting on the proposed control
share acquisition. A quorum for this meeting is achieved only if there is
present at the meeting, in person or by proxy, a majority of the voting power of
the corporation in the election of directors, and a majority of the portion of
such voting power excluding the voting power of "interested shares."
"Interested shares" are those shares of the corporation in respect of which
any of the following persons may exercise or direct the exercise of the voting
power of the corporation in the election of directors: (a) the acquiring person;
(b) any officer of the corporation elected or appointed by the directors of the
corporation; or (c) any employee of the corporation who is also a director of
the corporation. "Interested shares" include any shares of the corporation
acquired, directly or indirectly, by any person from the holder or holders
thereof for a valuable consideration during the period beginning with the date
of the first public disclosure of a proposed control share acquisition of the
corporation or any proposed merger, consolidation, or other transaction that
would result in a change in control of the corporation or in the sale of all or
substantially all of its assets, and ending on the date of any special meeting
of the corporation's shareholders held thereafter for the purpose of voting on a
control share acquisition proposed by an acquiring person if either of the
following applies: (y) 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 $250,000, or (z) the number of shares acquired by the
person who acquired the shares, and any other persons acting in concert with
him, exceeds one-half of one percent of the outstanding shares entitled to vote
in the election of directors.
A proposed control share acquisition may be consummated only if approved at
the meeting by both of the following groups: (1) holders of a majority of the
voting power of the corporation in the election of directors represented at the
meeting by person or by proxy, and (2) holders of a majority of the portion of
such voting power excluding the voting power of interested shares. A proposed
control share acquisition which receives approval in the manner described must
be consummated, in accordance with the terms so authorized, no later than 360
days following shareholder authorization of the control share acquisition.
Existing Anti-Takeover Provisions of Ohio Law and in the Company's Corporate
Documents
As mentioned above, the Ohio Merger Moratorium Statute and the control bid
provisions of the Ohio Securities Act may discourage or impede a change of
control of the Company.
26
<PAGE> 29
Merger Moratorium Law. Under the Merger Moratorium Statute, a corporation is
prohibited from entering into a "Chapter 1704 transaction" with the direct or
indirect beneficial owner of 10% or more of the shares of such corporation (a
"10% shareholder") for at least three years after the shareholder attains his
10% ownership unless the board of directors of the corporation approves, before
the shareholder attains his 10% ownership, either the transaction or the
purchase of shares resulting in his 10% ownership. A "Chapter 1704 transaction"
is broadly defined to include, among other things, a merger or consolidation
involving the corporation and the 10% shareholder, a sale or purchase of
substantial assets between the corporation and the 10% shareholder, a
reclassification, recapitalization, or other transaction proposed by the 10%
shareholder that results in an increase in the proportion of shares beneficially
owned by the 10% shareholder, and the receipt by the 10% shareholder of a loan,
guarantee, other financial assistance, or tax benefit not received
proportionately by all shareholders.
Even after the three-year period, Ohio law restricts these transactions
between the corporation and the 10% shareholder. At that time, such a
transaction may proceed only if (a) the board of directors of the corporation
had approved the purchase of shares that gave the shareholder his 10% ownership,
(b) the transaction is approved by the holders of shares of the corporation with
at least two-thirds of the voting power of the corporation (or a different
proportion set forth in the corporation's articles of incorporation), including
at least a majority of the outstanding shares after excluding shares held or
controlled by the 10% shareholder, or (c) the business combination results in
shareholders, other than the 10% shareholder, receiving a prescribed fair price
plus interest for their shares.
Control Bid Provisions of the Ohio Securities Act. Ohio law further requires
that any offeror making a control bid for any securities of a "subject company"
pursuant to a tender offer must file information specified in the Ohio
Securities Act with the Ohio Division of Securities when the bid commences. The
Ohio Division of Securities must then decide, within three calendar days,
whether it will suspend the bid under the statute. If it does so, it must
initiate hearings on the suspension within 10 calendar days of the suspension
date and make a determination, within 16 calendar days of the suspension date,
of whether to maintain the suspension. For this purpose, a "control bid" is the
purchase of, or an offer to purchase, any equity security of a subject company
from a resident of Ohio that would, in general, result in the offeror acquiring
10% or more of the outstanding shares of such company. A "subject company"
includes any company with both (a) its principal place of business or principal
executive office in Ohio or assets located in Ohio with a fair market value of
at least $1,000,000 and (b) more than 10% of its record or beneficial equity
security holders are resident in Ohio, more than 10% of its equity securities
owned of record or beneficially by Ohio residents, or more than 1,000 of its
record or beneficial equity security holders resident in Ohio.
Authorized Common and Preferred Stock. Article IV of the Articles provides
some protection against attempts by persons or entities to take control of
Myers. This Article provides for authorized Common Stock of 30,000,000 shares
and authorized voting Serial Preferred Stock of 1,000,000 shares. As of January
31, 1997, there are 10,399,272 shares of the Common Stock unissued and not
reserved for issuance, and there are 1,000,000 shares of the Serial Preferred
Stock unissued and not reserved for issuance. Under Ohio law, shareholder
27
<PAGE> 30
approval is unnecessary for the issuance of additional authorized shares of
Common Stock unless the issuance would result in one person or entity owning,
directly or indirectly, 20% or more of the outstanding stock or unless an
acquisition is involved which would result in 20% or greater increase in the
outstanding shares. The Articles provide that Serial Preferred Stock may be
issued in one or more series and expressly vest the board of directors with
authority to determine the designated preferences and certain other rights of
each series. Although the Board of Directors has no present intent of doing so,
shares of Common Stock or Serial Preferred Stock could be issued to a party who
would vote against a particular transaction. The issuance of such additional
shares could increase the absolute cost of a business combination and thereby
discourage a potential buyer.
No Cumulative Voting. Article IX of the Articles eliminates the right of
shareholders to vote cumulatively in the election of directors. The inability to
vote cumulatively increases the difficulty of minority shareholders to obtain
even proportional representation on the board of directors. This provision was
approved by the shareholders at the Annual meeting in 1987.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE PROPOSED AMENDMENTS
PRESENTED AS PROPOSAL NOS. 3, 4 AND 5 ABOVE.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in the
cumulative total shareholder return on Myers' Common Stock against the
cumulative return of the S&P 500 Index and a Peer Group for the period of five
fiscal years commencing January 1, 1991 and ended December 31, 1996.
28
<PAGE> 31
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Myers Industries S&P 500 Peer Group
<S> <C> <C> <C>
1991 $100.00 $100.00 $100.00
1992 $186.13 $107.62 $ 96.71
1993 $210.88 $118.46 $112.50
1994 $162.00 $120.03 $101.12
1995 $210.66 $165.13 $104.84
1996 $219.45 $203.05 $102.54
<FN>
(1) Assumes that the value of the investment in Myers Common Stock, each Index
and the Peer Group was $100 on December 31, 1990 and that all dividends were
reinvested.
(2) The Peer Group consists of the following public companies: Bandag,
Incorporated, Bearings, Inc., Echlin Inc., General Housewares Corp.,
Rubbermaid Incorporated, Selfix, Inc., Snap-On Tools Corporation and The
Standard Products Company. The Peer Group was selected in good faith on a
line-of-business basis and the returns of each component issuer of the group
is weighted using the beginning of period market capitalization as required
by the Commission. As of April, 1996, Premier Industrial Corporation was
acquired and as such is no longer included in the Peer Group.
</TABLE>
PRINCIPAL SHAREHOLDERS
The following table describes the beneficial ownership of Common Stock of each
person who was known by Myers to be the beneficial owner of more than five
percent of the total shares issued and outstanding on February 1, 1997. Under
rules and regulations promulgated by the Commission, a person is deemed to be
the "beneficial owner" of all the shares with respect to which he has or shares
voting power or investment power, regardless of whether he is entitled to
receive any economic benefit from his interest in the shares. As used herein,
the
29
<PAGE> 32
term "voting power" means the power to vote or to direct the voting of shares
and "investment power" means the power to dispose of or to direct the
disposition of shares.
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARES AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP % OF CLASS
- ----------------------- -------------------- ----------
<S> <C> <C>
Stephen E. Myers(1) 1,507,388 8.9%
1293 South Main Street
Akron, Ohio 44301
Mary S. Myers(2) 2,708,461 16.1%
1293 South Main Street
Akron, Ohio 44301
</TABLE>
- ---------------
(1) Stephen E. Myers serves as a trustee of the Louis S. and Mary Myers
Foundation which holds 176,195 shares of Common Stock. By virtue of his
position as trustee of the Foundation, Mr. Myers is deemed beneficially to
own such shares which, when excluded from the other shares he is deemed
beneficially to own, decreases the percentage of shares beneficially owned
by him to 7.9%. Stephen E. Myers serves as a trustee of the Semantic
Foundation Inc. which holds 20,600 shares of Common Stock. By virtue of his
position as trustee of the Foundation, Mr. Myers is deemed to beneficially
own such shares which, when excluded from the other shares he is deemed
beneficially to own, decreases the percentage of shares beneficially owned
by him to 8.8%.
(2) Mary S. Myers serves as a trustee of the Louis S. and Mary Myers Foundation
which holds 176,195 shares of Common Stock. By virtue of her position as
trustee of the Foundation, Mrs. Myers is deemed beneficially to own such
shares which, when excluded from the information above, decreases the
percentage of shares held by her to 15.0%.
PROPOSAL NO.6
RATIFICATION OF APPROVAL OF APPOINTMENT OF AUDITORS
Arthur Andersen LLP, independent certified public accountants, have been
approved by management of the Company to examine the books and accounts of the
Company for the year 1997. They have served as the Company's independent
auditors since 1966. Management recommends that the shareholders ratify the
approval of this appointment. Ratification of this approval requires the vote of
a majority of those shares present at the meeting. A representative of Arthur
Andersen LLP will be present at the Annual Meeting. The representative will be
given the opportunity to make a statement if he desires, and it is expected that
he will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Any proposals to be considered for inclusion in the proxy material to be
provided to shareholders of Myers for its next Annual Meeting of Shareholders to
be held in 1998 may be made only by a qualified shareholder and must be received
by Myers no later than November 11, 1997.
30
<PAGE> 33
GENERAL
The accompanying proxy is solicited by and on behalf of the Board of Directors
of Myers, whose notice of meeting is attached to this Proxy Statement, and the
entire cost of such solicitation will be borne by Myers. In addition to the use
of the mails, proxies may be solicited by personal interview, telephone and
telegram by directors, officers and employees of Myers. Arrangements will be
made with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of solicitation material to the beneficial owners of stock held
of record by such persons, and Myers will reimburse them for reasonable
out-of-pocket expenses incurred by them in connection therewith.
Management of Myers has no information that other matters will be brought
before the meeting. If, however, other matters are properly presented, the
accompanying proxy will be voted in accordance with the best judgment of the
proxy holders with respect to such matters.
MILTON I. WISKIND,
Secretary
Akron, Ohio
March 21, 1997
31
<PAGE> 34
APPENDIX A
PROPOSED AMENDMENT TO THE
ARTICLES OF INCORPORATION
RESOLVED, that the Amended and Restated Articles of Incorporation be amended
by deleting ARTICLE VII and replacing the same with the following:
ARTICLE VII
VOTING POWER
1. Except as provided in Section 2 of this Article VII, notwithstanding any
provision of the laws of the State of Ohio now or hereafter in force requiring
for any proposal the affirmative vote of the holders of shares entitling them to
exercise a proportion greater than a majority of the voting power of the
corporation or of any class or classes of shares thereof, any such proposal may
be approved by the affirmative vote of the holders of shares entitling them to
exercise a majority of the voting power of the corporation or of such class or
classes.
2. Adoption or approval of any of the measures listed in items (a) through (d)
shall require the affirmative vote of the holders of shares entitling them to
exercise two-thirds (2/3) of the voting power of the corporation and of each
class entitled to vote as a class on the measure, unless the Board of Directors,
by resolution approved by seventy-five percent (75%) of the total membership of
the Board of Directors, has proposed the measure or has recommended adoption or
approval of the measure:
(a) A consolidation;
(b) A merger in which the corporation is not a surviving corporation;
(c) A combination or majority share acquisition in which the
corporation is not an acquiring corporation;
(d) An amendment or repeal of this Article VII.
3. For the purposes of this Article VII, the following terms shall have the
meanings given them by General Corporation Laws of the State of Ohio: merger,
consolidation, combination, majority share acquisition, surviving corporation,
and acquiring corporation.
A-1
<PAGE> 35
APPENDIX B
PROPOSED AMENDMENT TO THE
CODE OF REGULATIONS
RESOLVED, that the Amended and Restated Code of Regulations be amended by
deleting Section 2 of Article II, and replacing the same with the following:
SECTION 2 -- NUMBER OF; CLASSES; QUALIFICATIONS:
The Board of Directors of the Corporation shall consist of such number of
directors as may be determined from time to time by resolution adopted by the
Board of Directors. No reduction in the number of the directors shall of itself
have the effect of shortening the term of an incumbent director. A director need
not be a shareholder of the Corporation.
The Board of Directors shall be divided into three classes as nearly equal in
number as possible, with the term of office of one class expiring each year. At
the annual meeting of shareholders in 1997, directors of the first class shall
be elected to hold office for a term expiring at the next succeeding annual
meeting; directors of the second class shall be elected to hold office for a
term expiring at the second succeeding annual meeting; and directors of the
third class shall be elected to hold office for a term expiring at the third
succeeding annual meeting. Thereafter, at each annual meeting of shareholders,
the successors to the class of directors whose term shall then expire shall be
elected to hold office until the third succeeding annual meeting after such
election and until their successors are elected and qualified. When the number
of directors is changed, the newly established directorships shall be
apportioned among the classes so as to make all classes as nearly equal in
number as possible.
------------------------
RESOLVED, that the Amended and Restated Code of Regulations be amended by
deleting Section 3 of Article II, and replacing the same with the following:
SECTION 3 -- NOMINATION AND ELECTION OF DIRECTORS:
The directors shall be elected at each Annual Meeting of Shareholders or at a
Special Meeting called for the purpose of electing directors. At a meeting of
shareholders at which directors are to be elected, only persons nominated as
candidates (as provided below) shall be eligible for election as directors. The
candidates receiving the greatest number of votes shall be elected.
Nominations for the election of directors may be made by the Board of
Directors. Nomination for the election of directors may be made by any
shareholder entitled to vote in the election of directors, but only if written
notice of such shareholder's intent to make such nomination or nominations has
been given by the shareholder to, either by personal delivery or by United
States mail, postage prepaid, and received by the Secretary of the Corporation,
not later than (a) with respect to an election to be held at an Annual Meeting
of Shareholders, ninety (90) days in advance of the date established by the Code
of Regulations for the holding of such meeting, and (b) with respect to an
election to be held at a Special Meeting of Shareholders
B-1
<PAGE> 36
for the election of directors, the close of business on the seventh (7th) day
following the date on which notice of such meeting is first given to
shareholders. Each such notice shall set forth (v) the name and address of the
shareholder who intends to make the nomination and of the person or persons to
be nominated, (w) a representation that the shareholder is a holder of record of
shares of the Corporation entitled to vote a such meeting and intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice, (x) a description of all arrangements or understandings between
the shareholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be
made by the shareholder, (y) such other information regarding each nominee
proposed by such shareholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated, or intended to be nominated, by the
Board of Directors, and (z) the consent of each nominee to serve as a director
of the Corporation if so elected. The chairman of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.
------------------------
RESOLVED, that the Amended and Restated Code of Regulations be amended by
deleting Section 4 of Article II, and replacing the same with the following:
SECTION 4 -- TERM OF OFFICE; VACANCIES:
A director shall hold office until the Annual Meeting of Shareholders at which
his term expires and until his successor is elected, or until his earlier
resignation, removal from office, or death. No director may be removed, by
shareholders or otherwise, during the term of office for which he was elected,
except for good cause, and if removed by shareholders for good cause, only by a
vote holders of two-thirds (2/3) of the shares of capital stock outstanding and
entitled to vote for directors generally. Any director may resign at any time by
oral statement to that effect made at a meeting of the Board of Directors or in
writing to that effect delivered to the Secretary. A resignation will take
effect immediately or at such other time as the director may specify in the
notice.
The directors then in office, though less than a majority of the whole
authorized number of directors, may by the vote of a majority of their number
fill any vacancy in the Board of Directors created for any reason, including,
without limitation, by an increase in the number of authorized directors.
------------------------
RESOLVED, that the Amended and Restated Code of Regulations be amended by
deleting Article X, and replacing the same with the following:
This Amended and Restated Code of Regulations may be amended, or a new Code of
Regulations may be adopted, by the shareholders at a meeting held for such
purpose by an affirmative vote of the holders of shares entitling them to
exercise a majority of the voting power of the Company on such proposal, or
without a meeting by written consent of the holders of shares entitling them to
exercise a majority of the voting power of the Company on
B-2
<PAGE> 37
such proposal; provided, however, that Article I, Section 2; Article II, Section
2; Article II, Section 3; Article II, Section 4; Article XI; and this Article X
may not be amended, rescinded or otherwise modified except upon the affirmative
vote of the holders of shares entitling them to exercise two-thirds (2/3) of the
voting power of the Company on such proposal at a meeting of shareholders held
for such purpose, and in no event by written consent.
------------------------
RESOLVED, that the Amended and Restated Code of Regulations be amended by
adding the following new ARTICLE XI:
The provisions of Section 1701.831 of the Ohio Revised Code, as amended,
requiring shareholder approval of control share acquisitions, as defined in
Section 1701.01(Z) of such Code, as amended, shall not be applicable to the
corporation.
B-3
<PAGE> 38
PROXY
MYERS INDUSTRIES, INC. SOLICITED BY THE BOARD OF DIRECTORS
MILTON I. WISKIND and GREGORY J. STODNICK, or either of them, with full power of
substitution, are hereby authorized to represent the undersigned and to vote all
Common Stock of the undersigned in MYERS INDUSTRIES, INC. ("Company") at the
Annual Meeting of Shareholders of said Company to be held on April 24, 1997, and
any adjournment(s) thereof with respect to the following matters:
1. ELECTION OF EIGHT DIRECTORS.
<TABLE>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for the proposal to set the
(except as marked to the contrary below) number or all nominees listed below
Karl S. Hay, Richard P. Johnston, Stephen E. Myers, Richard L. Osborne,
Jon H. Outcalt, Samuel Salem, Edwin P. Schrank, Milton I. Wiskind
(INSTRUCTION: To withhold authority to vote for the proposal to set the number or
any individual nominee write the proposal and/or that nominee's name on the space provided below.)
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2. To approve the Myers Industries, Inc. 1997 Incentive Stock Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve a proposal to amend Myers' Code of Regulations to: (i) provide for
a classified board of directors; (ii) give the board of directors the
authority to determine the number of directors; (iii) adopt a formal
nomination procedure for the election of directors; (iv) provide that
directors can only be removed for "cause" during their term; and (v) require
a two-thirds vote of shareholders to change these amendments and the
provision for calling a special meeting of the shareholders.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To approve a proposal to amend Myers' Articles of Incorporation to require a
vote by two-thirds of the shareholders to approve certain extra-ordinary
corporate transactions, such as mergers, consolidations, majority share
acquisitions, unless approved by the directors and then by a majority vote of
the shareholders, and certain related amendments to the Articles of
Incorporation.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on reverse side)
(Continued from other side)
5. To approve a proposal to amend Myers' Code of Regulations to make the Ohio
Control Share Acquisition Act inapplicable to Myers.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. Confirm the appointment of Arthur Andersen LLP, independent certified public
accountants, as auditors for the company for the year 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
7. Such other business as properly may come before said meeting and any
adjournment(s) thereof, all in accordance with the notice of this meeting and
the accompanying Proxy Statement, receipt of which is acknowledged.
THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS LISTED ABOVE AND FOR THE
DIRECTORS NOMINATED BY MANAGEMENT UNLESS A CONTRARY VOTE IS INDICATED, IN WHICH
CASE THE PROXY WILL BE VOTED AS DIRECTED.
Please date, sign exactly as stenciled, and return promptly in the enclosed
envelope.
__ __
| | _______________________________
_______________________________
|__ __| DATED: _________________ , 1997
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