<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 10, 1995
FILE NO. 33-87230
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PARK-OHIO INDUSTRIES, INC.
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
OHIO 3089 34-6520107
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
ORGANIZATION)
</TABLE>
600 TOWER EAST, 20600 CHAGRIN BOULEVARD, CLEVELAND, OHIO 44122, (216) 991-9700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
RONALD J. COZEAN
SECRETARY AND GENERAL COUNSEL
PARK-OHIO INDUSTRIES, INC.
600 TOWER EAST, 20600 CHAGRIN BOULEVARD
CLEVELAND, OHIO 44122
(216) 991-9700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
Approximate date of commencement of proposed exchange is upon consummation
of the Merger described herein.
If the securities being registered in this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
PARK-OHIO INDUSTRIES, INC.
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATIONS S-K
<CAPTION>
CAPTION IN PROSPECTUS AND JOINT PROXY
FORM S-4 -- ITEM NUMBER AND CAPTION STATEMENT
------------------------------------------ ------------------------------------------
<S> <C> <C>
1. Forepart of Registration Statement and Facing Page of Registration Statement;
Outside Front Cover of Prospectus Cross Reference Sheet; Cover Page of
Prospectus
2. Inside Front and Outside Back Cover Pages Available Information; Incorporation by
of Prospectus Reference; Table of Contents
3. Risk Factors, Ratio of Earnings to Fixed Summary of Prospectus and Joint Proxy
Charges and Other Information Statement
4. Terms of the Transaction Background and Reasons for the Merger; The
Merger; The Restated Agreement
5. Pro Forma Financial Information Pro Forma Condensed Combined Financial
Statements
6. Material Contacts with the Company Being Not Applicable
Acquired
7. Additional Information Required for Not Applicable
Reoffering by Persons and Parties Deemed
to be Underwriters
8. Interests of Named Experts and Counsel Not Applicable
9. Disclosure of Commission Position on Comparison of Shareholders' Rights Under
Indemnification for Securities Act Ohio and Delaware Law -- Director and
Liabilities Officer Liability and Indemnification
10. Information with Respect to S-3 Not Applicable
Registrants
11. Incorporation of Certain Information by Not Applicable
Reference
12. Information with Respect to S-2 or S-3 Available Information; Incorporation by
Registrants Reference
13. Incorporation of Certain Information by Incorporation by Reference
Reference
14. Information with Respect to Other Than S-2 Not Applicable
or S-3 Registrants
15. Information with Respect to S-3 Companies Not Applicable
16. Information with Respect to S-2 or S-3 Available Information; Incorporation by
Companies Reference
17. Information with Respect to Companies Not Applicable
Other Than S-2 or S-3 Companies
18. Information if Proxies, Consents or Summary; Introduction; Park-Ohio Special
Authorizations Are to Be Solicited Meeting; RB&W Special Meeting; Rights of
Dissenting Shareholders; Interests of
Certain Persons in the Merger; The Merger;
Incorporation by Reference
19. Information if Proxies, Consents or Not Applicable
Authorizations Are Not To Be Solicited or
in an Exchange Offer
</TABLE>
<PAGE> 3
[PARK-OHIO INDUSTRIES LOGO]
February 13, 1995
To Our Shareholders:
In early January, 1995, you received a Prospectus and Joint Proxy Statement
detailing the terms and conditions of a proposed stock-for-stock merger of a
subsidiary of Park-Ohio with and into RB&W Corporation ("RB&W") (the "Merger").
Prior to the scheduled February 2, 1995 Special Meeting of the Park-Ohio
Shareholders, Park-Ohio was advised that TransTechnology Corporation
("TransTechnology") had submitted a competing bid for RB&W. The TransTechnology
bid consisted of cash plus preferred and common stock.
Subsequently, Park-Ohio was advised that certain major shareholders of RB&W
had expressed a desire for liquidity in the merger consideration. In response to
this desire, and in its continuing belief in the strategic benefits to be
obtained through the acquisition of RB&W, Park-Ohio's management submitted a
revised offer, approximately 50% cash and 50% Park-Ohio Common Stock, reflecting
essentially the same $9.00 consideration for each share of RB&W stock that was
contained in the original offer. Park-Ohio and RB&W executed an Amended and
Restated Plan and Agreement of Merger detailing the terms and conditions of the
revised offer on February 6, 1995.
Attached is your copy of the Prospectus and Joint Proxy Statement
describing the revised offer, as well as the Notice of the Special Meeting of
the shareholders of Park-Ohio. The meeting will be reconvened on March 7, 1995,
at 10:00 a.m., at Cleveland Athletic Club, 1118 Euclid Avenue, Cleveland, Ohio.
At the reconvened Special Meeting ("Special Meeting"), you will be asked to
authorize and approve the issuance of up to Two Million Two Hundred Forty Eight
Thousand Nine Hundred Forty Two of the Company's common shares (the "Share
Issuance") for the purpose of acquiring, by merger by a wholly-owned subsidiary
of the Company, all of the shares of RB&W in exchange for cash and the
newly-issued common shares.
Your Board of Directors believes that the Share Issuance and Merger
(together, the "Transactions") are in the best interests of the Company and its
shareholders and that they will further the Company's long-term objective of
maximizing shareholder value. The Board has unanimously approved the
Transactions and recommends that you vote FOR the Share Issuance.
The Board continues to believe that the Transactions would enable the
Company to enter into two promising new business areas, the manufacture of cold
formed products and the distribution of products associated with the fastener
industry, which would provide the Company with an important new source of growth
and earnings.
Details of the proposed Transactions and other important information
describing the revised offer appear in the accompanying Prospectus and Joint
Proxy Statement. The proposed Transactions are extremely important to you as a
shareholder. Therefore, I urge you to give your immediate and careful attention
to the proposal.
Whether or not you plan to attend the Special Meeting when it is reconvened
on March 7, 1995, please complete, sign and date the accompanying proxy card and
return it in the enclosed postage-prepaid envelope. If you attend the Special
Meeting, you may vote in person even if you have previously returned the proxy
card. EVEN IF YOU SENT IN A PROXY CARD IN RESPONSE TO THE JANUARY 3, 1995
MAILING OF THE ORIGINAL PROSPECTUS AND JOINT PROXY STATEMENT, PLEASE TAKE THE
TIME TO SEND IN THE NEW PROXY CARD PROVIDED HEREWITH. If you do not
<PAGE> 4
send in a new proxy card, the proxies will vote your shares as permitted or
instructed by your previously submitted proxy card.
Your prompt cooperation will be greatly appreciated. We are gratified by
your continued patience and support throughout this lengthy and complex process.
Sincerely,
/s/ Edward F. Crawford
Edward F. Crawford
Chairman and Chief Executive Officer
<PAGE> 5
PARK-OHIO INDUSTRIES, INC.
NOTICE OF RECONVENED SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of Park-Ohio Industries, Inc.:
The Special Meeting of the Shareholders ("Special Meeting") of Park-Ohio
Industries, Inc. will be reconvened at Cleveland Athletic Club, 1118 Euclid
Avenue, Cleveland, Ohio on March 7, 1995 at 10:00 a.m., Cleveland time, for the
purpose of approving and authorizing the issuance of up to Two Million Two
Hundred Forty Eight Thousand Nine Hundred Forty Two shares of Park-Ohio Common
Stock pursuant to the terms of an Amended and Restated Plan and Agreement of
Merger among Park-Ohio, P.O. Acquisition Company, Inc. and RB&W Corporation
dated February 6, 1995 ("Restated Agreement").
Only shareholders of record at the close of business on December 27, 1994
are entitled to notice of and to vote at the Special Meeting or any
adjournments, postponements or continuations thereof.
All shareholders are invited to attend the Special Meeting. To ensure your
representation at the Special Meeting, however, you are urged to mark, sign and
return the enclosed proxy in the accompanying envelope, whether or not you
expect to attend the Special Meeting. No postage is required if mailed in the
United States. Any shareholder attending the Special Meeting may vote in person
even if such shareholder has returned a proxy.
YOUR VOTE IS IMPORTANT
PARK-OHIO AND YOUR BOARD OF DIRECTORS STRONGLY URGE YOU TO SIGN, DATE AND
COMPLETE THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN
ENVELOPE. IF YOU RETURNED THE PROXY CARD MAILED TO YOU ON JANUARY 3,
1995 IN CONNECTION WITH THE ADJOURNED FEBRUARY 2, 1995 SPECIAL
MEETING, YOUR VOTE ON THAT CARD WILL REMAIN VALID
UNLESS YOU RETURN THE ENCLOSED CARD.
By Order of the Board of Directors
/S/ Ronald J. Cozean
Ronald J. Cozean
Secretary and General Counsel
February 13, 1995
ANY PROXY GIVEN BY A SHAREHOLDER MAY BE REVOKED BY SUBMITTING A DULY EXECUTED
PROXY BEARING A LATER DATE. ANY SHAREHOLDER PRESENT AT THE SPECIAL
MEETING MAY REVOKE HIS OR HER PROXY AND VOTE PERSONALLY ON
EACH MATTER BROUGHT BEFORE THE SPECIAL MEETING.
<PAGE> 6
[RB&W CORPORATION LOGO]
February 13, 1995
To Our Shareholders:
As those of you who have been following the events of the last few weeks
are well aware, these have been exciting but demanding times for your Company
and your Board of Directors. As was announced on February 7, 1995, after careful
deliberation by your Board of Directors with respect to competing offers for
RB&W from Park-Ohio Industries, Inc. ("Park-Ohio") and TransTechnology
Corporation ("TransTechnology"), your Board of Directors approved a revised
offer received from Park-Ohio to amend the existing Agreement and Plan of Merger
dated November 29, 1994 (the "Original Agreement") to provide for consideration
of $4.45 in cash and .33394 of a share of Park-Ohio Common Stock for each share
of RB&W Common Stock outstanding on a fully-diluted basis (the "New Merger
Consideration"). Accordingly, RB&W entered into an Amended and Restated Plan and
Agreement of Merger with Park-Ohio and its wholly-owned subsidiary, P.O.
Acquisition Company, Inc. ("POAC") on February 6, 1995 (the "Restated
Agreement"). Accompanying this letter is a revised copy of the Prospectus and
Joint Proxy Statement originally dated December 27, 1994 which has been revised
to reflect the terms and conditions of the Restated Agreement and to explain
RB&W's and Park-Ohio's reasons for consummating the merger (the "Merger") of
POAC into RB&W (the "Prospectus and Joint Proxy Statement").
As a result of the events leading up to your Board's decision to enter into
the Restated Agreement, the Special Meeting of RB&W to approve the Original
Agreement was convened on February 2, 1995, and adjourned until February 21,
1995. To provide RB&W Shareholders with adequate time to review the Prospectus
and Joint Proxy Statement, the Special Meeting will be reconvened at 10:00 a.m.
on March 7, 1995, at which time the Restated Agreement and the Merger will be
offered to the RB&W Shareholders for approval. The place of the reconvened
Special Meeting will continue to be Argo-Tech Corporation Auditorium, 23555
Euclid Avenue, Euclid, Ohio. The record date for determining shareholders who
may vote at the Special Meeting continues to be December 27, 1994.
Your Board of Directors believes that the Merger is in the best interests
of the Company and its shareholders and that it is the alternative best able to
further the Company's objective of maximizing shareholder value. The Board of
Directors has received an opinion from McDonald & Company Securities, Inc., the
Company's financial advisor, to the effect that, as of the date of execution of
the Restated Agreement, the New Merger Consideration is fair to the holders of
RB&W Common Stock from a financial point of view. The Board has unanimously
approved and recommends that you vote FOR the proposal to approve the Restated
Agreement and the Merger.
As explained further in the Prospectus and Joint Proxy Statement, based on
our review of the competing offers in hand on February 6, 1995, and after
consultation with our investment and legal advisors, your Board unanimously
concluded that the competing offers were substantially equivalent in current
market value and that other significant factors, including probable adverse
effects on RB&W of a continuing bidding process; timing considerations and the
risk of not completing the new Park-Ohio Merger or any transaction at all; and
the long-term value of a significant equity participation in a combined
enterprise, weighed clearly in favor of proceeding with Park-Ohio's improved
offer. It was also our judgment, based on advice of counsel, that our fiduciary
duties required that we not abandon the Park-Ohio transaction and undertake a
more lengthy and complex transaction with TransTechnology.
As your Chairman, I wish to share with you several factors that were
crucial with respect to your Board of Directors' decision to accept the revised
financial terms offered by Park-Ohio.
First, your Board has considered at all times the best interests of all of
the RB&W Shareholders, including the express desire of certain of our larger
shareholders for liquidity in the merger consideration. In this regard, the
Board believes that it is also in the best interests of the RB&W Shareholders to
have an equity
<PAGE> 7
participation in the combination of RB&W and Park-Ohio, two companies with solid
long-term prospects for the future. Throughout this process the Board has
believed that the combination of RB&W and Park-Ohio would provide the greatest
potential for long-term growth.
Second, as the process of evaluating competing offers intensified,
resulting in the aforementioned adjournment of our Special Meeting of
Shareholders, your Directors began to express understandable concern that the
attractiveness of RB&W as a strategic merger partner could very well diminish if
the attentions of management and the Board continued to be diverted by the
time-consuming bidding and evaluation process. Magnifying this concern was the
threat of losing, as a result of continued delay, the attractive new and
improved cash and stock transaction offered by Park-Ohio. In light of these
concerns, the Board firmly believed that a transaction had to be concluded
expeditiously and that Park-Ohio was in the best position to ensure such a
conclusion.
Third, RB&W was bound by the Original Agreement with Park-Ohio and under
that agreement your Board was permitted to accept a competing offer only if it
was clearly superior to Park-Ohio's. The Board of Directors of RB&W was advised
that RB&W had no right to terminate the Merger Agreement for a less-than-
superior offer and that it was important to avoid breaching that agreement, thus
providing Park-Ohio with a right to terminate it. RB&W's Board recognized that
if the Original Agreement were terminated and the TransTechnology offer could
not be consummated, RB&W could easily be left without any strategic combination
to improve shareholder value. The Board concluded that such a turn of events
undoubtedly would have had an adverse effect on the recent gain in the market
price of your RB&W Common Stock.
On behalf of your Board I assure you the process we have conducted has been
a fair and deliberate one, undertaken many months ago with one objective in
mind: to maximize shareholder value for all of the RB&W Shareholders. As you
review the accompanying Prospectus and Joint Proxy Statement, I am sure that you
will agree that RB&W has cooperated with TransTechnology and its representatives
in every regard and that the entire process has been conducted fairly and in
good faith.
Because the Merger is extremely important to you as a shareholder, I urge
you to give your immediate and careful attention to the Prospectus and Joint
Proxy Statement and the proposal to approve the Restated Agreement and the
Merger.
Whether or not you plan to attend the Special Meeting when it is reconvened
on March 7, 1995, please complete, sign and date the accompanying proxy card and
return it in the enclosed postage-prepaid envelope. If you attend the Special
Meeting, you may vote in person even if you have previously returned the proxy
card. EVEN IF YOU SENT IN A PROXY CARD IN RESPONSE TO THE JANUARY 3, 1995
MAILING OF THE ORIGINAL PROSPECTUS AND JOINT PROXY STATEMENT, PLEASE TAKE THE
TIME TO SEND IN THE NEW PROXY CARD PROVIDED HEREWITH. If you do not send in a
new proxy card, the proxies will vote your shares as permitted or instructed by
your previously submitted proxy card.
Your prompt cooperation will be greatly appreciated. We are gratified by
your continued patience and support throughout this lengthy and complex process.
Sincerely,
/S/ Lawrence O. Selhorst
Lawrence O. Selhorst
Chairman of The Board
<PAGE> 8
RB&W
NOTICE OF RECONVENED SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of RB&W Corporation:
The Special Meeting of the Shareholders ("Special Meeting") of RB&W
Corporation ("RB&W") will be reconvened at Argo-Tech Corporation Auditorium,
23555 Euclid Avenue, Euclid, Ohio on March 7, 1995 at 10:00 a.m., Cleveland
time, for the purpose of adopting the Amended and Restated Plan and Agreement of
Merger dated February 6, 1995 (the "Restated Agreement") among Park-Ohio
Industries, Inc., P.O. Acquisition Company, Inc. and RB&W.
The Restated Agreement provides for the merger of P.O. Acquisition Company,
Inc., a wholly-owned subsidiary of Park-Ohio, with and into RB&W, as described
in the accompanying Prospectus and Joint Proxy Statement. The accompanying
document constitutes the proxy statement of RB&W for the special meeting. A copy
of the Restated Agreement is attached to the Prospectus and Joint Proxy
Statement as Appendix A.
Only shareholders of record at the close of business on December 27, 1994
are entitled to notice of and to vote at the Special Meeting or any
adjournments, postponements or continuations thereof.
All shareholders are invited to attend the Special Meeting. To ensure your
representation at the Special Meeting, however, you are urged to mark, sign and
return the enclosed proxy in the accompanying envelope, whether or not you
expect to attend the Special Meeting. No postage is required if mailed in the
United States. Any shareholder attending the Special Meeting may vote in person
even if such shareholder has returned a proxy.
YOUR VOTE IS IMPORTANT
RB&W AND YOUR BOARD OF DIRECTORS STRONGLY URGE YOU TO SIGN, DATE AND COMPLETE
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE.
IF YOU RETURNED THE PROXY CARD MAILED TO YOU ON JANUARY 3, 1995 IN
CONNECTION WITH THE ADJOURNED FEBRUARY 2, 1995 SPECIAL MEETING,
YOUR VOTE ON THAT CARD WILL REMAIN VALID UNLESS YOU RETURN
THE ENCLOSED CARD.
By Order of the Board of Directors
/S/ Kent M. Holcomb
Kent M. Holcomb
Secretary and General Counsel
February 13, 1995
ANY PROXY GIVEN BY A SHAREHOLDER MAY BE REVOKED BY SUBMITTING A DULY EXECUTED
PROXY BEARING A LATER DATE. ANY SHAREHOLDER PRESENT AT THE SPECIAL
MEETING MAY REVOKE HIS OR HER PROXY AND VOTE PERSONALLY ON EACH
MATTER BROUGHT BEFORE THE SPECIAL MEETING.
PLEASE DO NOT RETURN YOUR RB&W STOCK CERTIFICATES WITH THE ENCLOSED PROXY.
<PAGE> 9
JOINT PROXY STATEMENT
OF
PARK-OHIO INDUSTRIES, INC.
AND
RB&W CORPORATION
------------------
PROSPECTUS
OF
PARK-OHIO INDUSTRIES, INC.
SPECIAL MEETING OF SHAREHOLDERS OF PARK-OHIO TO BE HELD ON MARCH 7, 1995;
SPECIAL MEETING OF SHAREHOLDERS OF RB&W TO BE HELD ON MARCH 7, 1995.
This Prospectus and Joint Proxy Statement relates to the acquisition of
RB&W Corporation ("RB&W"), a Delaware corporation, by Park-Ohio Industries, Inc.
("Park-Ohio") through the proposed merger ("Merger") of P.O. Acquisition
Company, Inc. ("POAC"), a Delaware corporation and a wholly-owned subsidiary of
Park-Ohio, with and into RB&W, and is being furnished to the holders of common
stock of RB&W ("RB&W Shareholders") and common stock of Park-Ohio ("Park-Ohio
Shareholders") in connection with the solicitation of proxies by the Board of
Directors of RB&W ("RB&W Board") and the Board of Directors of Park-Ohio
("Park-Ohio Board") for use at the reconvened special meeting of RB&W
Shareholders ("RB&W Special Meeting") to be held on March 7, 1995, and at the
reconvened special meeting of Park-Ohio Shareholders ("Park-Ohio Special
Meeting") to be held on March 7, 1995, and at any adjournments, postponements or
continuations thereof.
This Prospectus and Joint Proxy Statement constitutes a prospectus of
Park-Ohio filed as part of the Registration Statement (defined below) with
respect to the issuance of up to Two Million Two Hundred Forty Eight Thousand
Nine Hundred Forty Two (2,248,942) shares of common stock of Park-Ohio to be
issued pursuant to the Amended and Restated Plan and Agreement of Merger, dated
February 6, 1995 ("Restated Agreement"), among Park-Ohio, POAC and RB&W. A copy
of the Restated Agreement is attached to this Prospectus and Joint Proxy
Statement as Appendix A and is incorporated herein by reference.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
The date of this Prospectus and Joint Proxy Statement is February , 1995.
<PAGE> 10
AVAILABLE INFORMATION
Each of Park-Ohio and RB&W is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Park-Ohio has filed
with the Commission a Registration Statement on Form S-4 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
covering the Park-Ohio securities to be issued to RB&W shareholders in the
Merger. As permitted by the rules and regulations of the Commission, the
Prospectus and Joint Proxy Statement omits certain information, exhibits and
undertakings contained in the Registration Statement. Reference is made to the
Registration Statement and to the exhibits thereto for further information.
Statements contained herein concerning such documents are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement. Each such statement is
qualified in its entirety by such reference.
The Registration Statement and the exhibits thereto, as well as the
reports, proxy statements and other information filed with the Commission by
Park-Ohio and RB&W can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at the Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material can also be obtained from the
public reference section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. In addition, material filed by Park-Ohio can be
inspected at the offices of the National Association of Securities Dealers'
Automated Quotations/National Market System ("NASDAQ/NMS"), 1735 K Street, N.W.,
Washington, D.C. 20006 and material filed by RB&W can be inspected at the
offices of the American Stock Exchange, 86 Trinity Place, New York, New York
10006.
ALL INFORMATION CONTAINED IN OR INCORPORATED IN THIS PROSPECTUS AND JOINT
PROXY STATEMENT WITH RESPECT TO PARK-OHIO WAS SUPPLIED BY PARK-OHIO AND ALL
INFORMATION CONTAINED IN OR INCORPORATED IN THIS PROSPECTUS AND JOINT PROXY
STATEMENT WITH RESPECT TO RB&W WAS SUPPLIED BY RB&W. ALTHOUGH NEITHER PARK-OHIO
NOR RB&W HAS ANY KNOWLEDGE THAT WOULD INDICATE THAT ANY STATEMENTS OR
INFORMATION RELATING TO THE OTHER PARTY CONTAINED HEREIN IS INACCURATE OR
INCOMPLETE, NEITHER PARK-OHIO NOR RB&W CAN WARRANT THE ACCURACY OR COMPLETENESS
OF SUCH DOCUMENTS OR INFORMATION AS THEY RELATE TO THE OTHER PARTY.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PROSPECTUS AND JOINT PROXY STATEMENT INCORPORATES CERTAIN DOCUMENTS OF
PARK-OHIO BY REFERENCE THAT ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH.
THESE DOCUMENTS (WITHOUT EXHIBITS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS AND JOINT PROXY STATEMENT) ARE
AVAILABLE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM
A COPY OF THIS PROSPECTUS AND JOINT PROXY STATEMENT IS DELIVERED, UPON WRITTEN
OR ORAL REQUEST. REQUESTS FOR SUCH DOCUMENTS SHOULD BE DIRECTED TO RONALD J.
COZEAN, SECRETARY, PARK-OHIO INDUSTRIES, INC., 600 TOWER EAST, 20600 CHAGRIN
BOULEVARD, CLEVELAND, OHIO 44122 (TELEPHONE (216) 991-9700). IN ORDER TO ENSURE
TIMELY DELIVERY OF SUCH DOCUMENTS, ANY REQUEST SHOULD BE MADE NO LATER THAN
FEBRUARY 28, 1995.
THIS PROSPECTUS AND JOINT PROXY STATEMENT INCORPORATES CERTAIN DOCUMENTS OF
RB&W BY REFERENCE THAT ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE
DOCUMENTS (WITHOUT EXHIBITS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE INTO THIS PROSPECTUS AND JOINT PROXY STATEMENT) ARE AVAILABLE
WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF
THIS PROSPECTUS AND JOINT PROXY STATEMENT IS DELIVERED, UPON WRITTEN OR ORAL
REQUEST. REQUESTS FOR SUCH DOCUMENTS SHOULD BE DIRECTED TO KENT M. HOLCOMB,
SECRETARY, RB&W CORPORATION, 23001 EUCLID AVENUE, CLEVELAND, OHIO 44117
(TELEPHONE (216) 692-7100). IN ORDER TO ENSURE TIMELY DELIVERY OF SUCH
DOCUMENTS, ANY REQUEST SHOULD BE MADE NO LATER THAN FEBRUARY 28, 1995.
i
<PAGE> 11
The following documents filed with the Commission under the Exchange Act by
Park-Ohio are hereby incorporated by reference into this Prospectus and Joint
Proxy Statement:
Current Report on Form 8-K filed with the Commission on November 1,
1993 (including the Form 8-K/A filed with the Commission on December 30,
1993); Annual Report on Form 10-K for the year ended December 31, 1993;
Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and
September 30, 1994; Current Report on Form 8-K filed with the Commission on
May 6, 1994; and Current Report on Form 8-K filed with the Commission on
June 22, 1994.
The following documents filed with the Commission under the Exchange Act by
RB&W are hereby incorporated by reference into this Prospectus and Joint Proxy
Statement:
Annual Report on Form 10-K for the year ended December 31, 1993 and
Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and
September 30, 1994.
The following documents incorporated by reference are delivered to
shareholders with, and made a part of, this Prospectus and Joint Proxy
Statement:
Annual Report of Park-Ohio on Form 10-K for the year ended December
31, 1993; Quarterly Report of Park-Ohio on Form 10-Q for the nine months
ended September 30, 1994; 1993 Annual Report to Shareholders of RB&W;
Annual Report of RB&W on Form 10-K for the year ended December 31, 1993;
and Quarterly Report of RB&W on Form 10-Q for the nine months ended
September 30, 1994.
------------------
No person is authorized to give any information or to make any
representation not contained in this Prospectus and Joint Proxy Statement, and
if given or made, such information or representation should not be relied upon
as having been authorized. This Prospectus and Joint Proxy Statement does not
constitute an offer to sell, or solicitation of an offer to purchase, the
securities offered by this Prospectus and Joint Proxy Statement, or the
solicitation of a proxy, in any jurisdiction, to or from any person to whom it
is unlawful to make such offer, solicitation of an offer or proxy solicitation
in such jurisdiction. Neither the delivery of this Prospectus and Joint Proxy
Statement nor any distribution of the securities pursuant to this Prospectus and
Joint Proxy Statement shall, under any circumstances, create an implication that
there has been no change in the information set forth herein since the date of
this Prospectus and Joint Proxy Statement.
ii
<PAGE> 12
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
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<S> <C>
AVAILABLE INFORMATION.................................................................. i
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........................................ i
SUMMARY OF PROSPECTUS AND JOINT PROXY STATEMENT........................................ 1
Introduction......................................................................... 1
Terms of the Proposed Merger......................................................... 1
The Parties to the Merger............................................................ 1
Date, Time and Place of Special Meetings............................................. 2
Record Dates; Shareholders Entitled to Vote; Vote Required........................... 2
Reasons for the Merger............................................................... 3
Recommendations of the Boards of Directors........................................... 3
Regulatory Matters................................................................... 3
Certain Federal Income Tax Consequences.............................................. 3
Accounting Treatment................................................................. 3
SELECTED FINANCIAL DATA AND COMPARATIVE PER SHARE DATA................................. 4
INTRODUCTION........................................................................... 9
THE RECONVENED SPECIAL MEETINGS........................................................ 9
The Park-Ohio Special Meeting........................................................ 9
The RB&W Special Meeting............................................................. 10
BACKGROUND AND REASONS FOR THE MERGER.................................................. 10
Background of the Original Merger Proposal........................................... 10
Background of and Reasons for the Revised Merger..................................... 11
Recommendation of the Board of Directors of Park-Ohio................................ 18
Recommendation of the Board of Directors of RB&W..................................... 18
THE RESTATED AGREEMENT................................................................. 18
Terms of the Agreement............................................................... 18
General.............................................................................. 19
Conversion of RB&W Capital Stock into Cash and Park-Ohio Capital Stock............... 19
Representations and Warranties....................................................... 19
Certain Covenants.................................................................... 20
Conditions........................................................................... 21
Waiver; Amendment.................................................................... 21
Termination.......................................................................... 21
Expenses............................................................................. 22
Breakup Fee.......................................................................... 22
THE MERGER............................................................................. 22
Determination of Exchange Ratios..................................................... 22
Environmental Matters................................................................ 23
Certain Federal Income Tax Consequences.............................................. 23
Section 382 Limitations.............................................................. 24
Exchange of Certificates............................................................. 24
Accounting Treatment................................................................. 24
Opinion of RB&W's Financial Advisor.................................................. 24
RB&W Stock Options and Warrants...................................................... 28
Interests of Certain Persons in the Merger........................................... 28
Resales of Park-Ohio Common Stock Received in the Merger............................. 29
RIGHTS OF DISSENTING SHAREHOLDERS...................................................... 29
Rights of Park-Ohio Shareholders..................................................... 29
Rights of RB&W Shareholders.......................................................... 31
</TABLE>
iii
<PAGE> 13
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS...................................... 34
Pro Forma Condensed Combined Balance Sheet........................................... 36
Pro Forma Condensed Combined Statements of Income.................................... 37
Notes to Unaudited Pro Forma Condensed Combined Financial Statements................. 39
DESCRIPTION OF PARK-OHIO COMMON STOCK.................................................. 41
Common Stock......................................................................... 41
Serial Preferred Stock............................................................... 41
Voting Rights........................................................................ 41
Dividends............................................................................ 41
Liquidation.......................................................................... 41
Preemptive Rights.................................................................... 41
Transfer Agent....................................................................... 41
DESCRIPTION OF RB&W COMMON STOCK....................................................... 41
Voting Rights........................................................................ 42
Dividends............................................................................ 42
Liquidation.......................................................................... 42
Preemptive Rights.................................................................... 42
Transfer Agent....................................................................... 42
COMPARISON OF SHAREHOLDERS' RIGHTS UNDER OHIO AND DELAWARE LAW......................... 42
Anti-takeover Statutes............................................................... 42
Mergers and Consolidations........................................................... 44
Other Corporate Transactions......................................................... 44
Cumulative Voting.................................................................... 44
Class Voting......................................................................... 45
Appraisal Rights..................................................................... 45
Dividends............................................................................ 45
Repurchases.......................................................................... 45
Director and Officer Liability and Indemnification................................... 46
LEGAL OPINIONS......................................................................... 47
EXPERTS................................................................................ 48
APPENDIX A -- Amended and Restated Plan and Agreement of Merger........................ A-1
APPENDIX B -- Form of Opinion of McDonald & Company Securities, Inc.................... B-1
APPENDIX C -- Ohio Dissenters' Rights Statute.......................................... C-1
APPENDIX D -- Delaware Dissenters' Rights Statute...................................... D-1
</TABLE>
iv
<PAGE> 14
SUMMARY OF PROSPECTUS AND JOINT PROXY STATEMENT
The following is a summary of certain important terms of the Merger and
related information. This summary does not purport to be complete and is
qualified in its entirety by reference to the more detailed information
appearing in the Prospectus and Joint Proxy Statement and the Appendices.
INTRODUCTION
On January 3, 1995, Park-Ohio and RB&W mailed to their shareholders a
Prospectus and Joint Proxy Statement dated December 27, 1994, which described
the terms and conditions of a Plan and Agreement of Merger executed by
Park-Ohio, POAC and RB&W on November 29, 1994. As a result of subsequent
discussions and negotiations, the terms of the original merger proposal made by
Park-Ohio to RB&W ("Original Merger Proposal") and described in the December 27,
1994 Prospectus and Joint Proxy Statement were modified, and the Boards of
Directors of Park-Ohio and RB&W have each unanimously approved the Amended and
Restated Plan and Agreement of Merger dated February 6, 1995, by and among
Park-Ohio, POAC and RB&W (the "Restated Agreement"). A copy of the Restated
Agreement is attached hereto as Appendix A. The Restated Agreement provides for
the acquisition of RB&W by Park-Ohio through the proposed merger of POAC with
and into RB&W (the "Merger"). The terms of the Merger and information regarding
the Park-Ohio and RB&W Special Meetings are summarized below.
TERMS OF THE PROPOSED MERGER
GENERAL
The Restated Agreement provides for the merger of POAC into RB&W (the
"Merger"), with RB&W being the surviving corporation (the "Surviving
Corporation"). In consideration of such merger, all of the issued and
outstanding shares of capital stock of POAC shall be converted into shares of
the Surviving Corporation, and all of the outstanding shares of RB&W Common
Stock shall be converted into the right to receive cash plus shares of Park-Ohio
Common Stock.
MERGER CONSIDERATION
Each share of POAC common stock outstanding immediately prior to the Merger
will, upon consummation of the Merger, be converted into one share of common
stock of the Surviving Corporation. Each share of RB&W Common Stock outstanding
immediately prior to the Merger will, upon consummation of the Merger, be
converted into a right to receive $4.45 in cash plus 0.33394 of a share of
Park-Ohio Common Stock, provided that, the maximum number of shares of Park-Ohio
Common Stock to be issued pursuant to the Restated Agreement shall be 2,248,942,
which amount is based on a maximum of 6,727,469 shares of RB&W Common Stock
presently outstanding or reserved for issuance under various stock options and
warrants, on a fully diluted basis, immediately prior to the Merger.
RIGHTS TO TERMINATE
The Restated Agreement is subject to termination under certain conditions.
See "THE RESTATED AGREEMENT -- Termination."
THE PARTIES TO THE MERGER
EXECUTIVE OFFICES AND MAILING ADDRESSES
The principal executive offices of Park-Ohio and POAC are located at 600
Tower East, 20600 Chagrin Boulevard, Cleveland, Ohio 44122, and the telephone
number is (216) 991-9700. The principal executive offices of RB&W are located at
23001 Euclid Avenue, Cleveland, Ohio 44117, and the telephone number is (216)
692-7100.
1
<PAGE> 15
PARK-OHIO
Park-Ohio is a diversified manufacturer of plastic containers, molded
plastic and leisure products for the home, office and garden, forged and machine
products, aluminum permanent mold castings, induction heating systems and
industrial rubber products for the industrial and consumer markets.
Headquartered in Cleveland, Ohio, Park-Ohio is publicly held and its shares are
traded on the NASDAQ National Market System ("NASDAQ"). For the nine months
ended September 30, 1994, Park-Ohio had net sales of $145.9 million and at
December 31, 1993, employed approximately 1,700 persons.
POAC
POAC is a wholly-owned subsidiary of Park-Ohio incorporated under the laws
of the State of Delaware on November 21, 1994. POAC was created solely to
facilitate the consummation of the transactions contemplated in the Agreement.
RB&W
RB&W operates in two business segments, manufacturing and distribution.
Manufacturing operations comprise the manufacture of cold formed products, a
significant portion of which are sold to the transportation industry. The
principal business of RB&W's distribution segment is the distribution of all
types of products associated with the fastener industry, primarily components to
original equipment manufacturers. The common stock of RB&W is listed on the
American Stock Exchange. For the nine months ended September 30, 1994, RB&W had
net sales of $127.3 million and at December 31, 1993 employed approximately 713
persons.
DATE, TIME AND PLACE OF SPECIAL MEETINGS
PARK-OHIO SPECIAL MEETING
The Park-Ohio Special Meeting will be held at 10:00 a.m. on March 7, 1995
at Cleveland Athletic Club, 1118 Euclid Avenue, Cleveland, Ohio.
RB&W SPECIAL MEETING
The RB&W Special Meeting will be held at 10:00 a.m. on March 7, 1995 at
Argo-Tech Corporation Auditorium, 23555 Euclid Avenue, Euclid, Ohio.
RECORD DATES; SHAREHOLDERS ENTITLED TO VOTE; VOTE REQUIRED
PARK-OHIO
The record date for the Park-Ohio Special Meeting is December 27, 1994. On
such date, there were approximately 8,943,654 shares of Park-Ohio common stock
("Park-Ohio Common Stock") outstanding. Only Park-Ohio Shareholders of record as
of such date are entitled to notice of, and to vote at, the Park-Ohio Special
Meeting. The affirmative vote of the holders of a majority of the shares of
Park-Ohio Common Stock outstanding on such date is required to authorize the
issuance of additional shares of Park-Ohio Common Stock pursuant to the terms of
the Restated Agreement.
RB&W
The record date for the RB&W Special Meeting is December 27, 1994. On such
date, there were approximately 6,015,885 shares of RB&W common stock ("RB&W
Common Stock") outstanding. Only RB&W Shareholders of record as of such date are
entitled to notice of, and to vote at, the RB&W Special Meeting. The affirmative
vote of the holders of a majority of the shares of RB&W Common Stock outstanding
on such date is required to approve the Merger and adopt the Restated Agreement.
2
<PAGE> 16
REASONS FOR THE MERGER
PARK-OHIO
The Merger with RB&W is consistent with Park-Ohio's strategy of acquiring
underperforming businesses that are engaged in basic manufacturing in order to
fuel its continued growth. The Merger will expand Park-Ohio's sales to certain
existing key customers, providing both stronger market positions and
opportunities to achieve efficiencies, and will provide Park-Ohio with access to
RB&W's customers. See "BACKGROUND AND REASONS FOR THE MERGER -- Reasons for the
Merger -- Park-Ohio."
RB&W
The Board of Directors of RB&W believes that the Merger offers RB&W
Shareholders substantial cash value, a common stock with greater liquidity than
the RB&W Common Stock, and a significant equity participation in a combined
enterprise with great potential for achieving long-term value. Accordingly, the
Board of Directors of RB&W believes that the Merger is the best alternative
available to RB&W for maximizing shareholder value. See "BACKGROUND AND REASONS
FOR THE MERGER -- Reasons for the Merger -- RB&W."
RECOMMENDATIONS OF THE BOARDS OF DIRECTORS
THE BOARD OF DIRECTORS OF PARK-OHIO HAS APPROVED THE RESTATED AGREEMENT AND
UNANIMOUSLY RECOMMENDS THAT PARK-OHIO SHAREHOLDERS VOTE FOR THE PROPOSAL TO
ISSUE ADDITIONAL SHARES OF COMMON STOCK OF PARK-OHIO.
THE BOARD OF DIRECTORS OF RB&W HAS APPROVED THE RESTATED AGREEMENT AND
UNANIMOUSLY RECOMMENDS THAT THE RB&W SHAREHOLDERS VOTE FOR THE MERGER.
REGULATORY MATTERS
Under the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the "HSR Act"), the Merger may not be consummated until a notification is
filed with the Federal Trade Commission ("FTC") and certain waiting periods have
expired. Park-Ohio and RB&W filed the required notifications with the FTC
pursuant to the HSR Act on December 8, 1994 and received early termination
notice from the FTC on December 20, 1994. No further filing with the FTC with
respect to the HSR Act is required.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Merger will constitute a taxable transaction to RB&W Shareholders. RB&W
Shareholders will recognize gain or loss in the Merger in an amount determined
by the difference between the total value of the cash plus the Park-Ohio Common
Stock received and their individual tax basis in the RB&W Common Stock exchanged
therefor. For further information regarding certain federal income tax
consequences to shareholders, see "Certain Federal Income Tax Consequences."
RB&W SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE
THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING THE APPLICATION
AND EFFECT OF STATE, LOCAL AND OTHER TAX LAWS.
ACCOUNTING TREATMENT
The Merger, if completed as proposed, will be treated as a purchase for
accounting purposes. Accordingly, under generally accepted accounting
principles, the assets and liabilities of RB&W will be recorded on the books of
the Surviving Corporation, and will be reported in the consolidated financial
statements of Park-Ohio, at their respective fair market values at the time of
the consummation of the Merger.
3
<PAGE> 17
SELECTED FINANCIAL DATA AND COMPARATIVE PER SHARE DATA
The following tables set forth certain historical financial data and
comparative per share data for Park-Ohio and RB&W. The selected financial data
with respect to Park-Ohio and RB&W have been taken from the financial statements
and other financial information of Park-Ohio and RB&W incorporated herein by
reference. The unaudited pro forma combined selected financial data and
comparative per share data of Park-Ohio and RB&W reflect the acquisition of RB&W
by Park-Ohio through the issuance of 2,248,942 shares of Common Stock ($13.625
per share market value as of February 6, 1995) and cash of $29,969,000 in a
transaction accounted for as a purchase.
The selected financial data and per share data presented herein should be
read in conjunction with the audited financial statements and other historical
and pro forma financial information of Park-Ohio and RB&W included elsewhere or
incorporated by reference in this Prospectus and Joint Proxy Statement and
Management's Discussion and Analysis of Financial Condition and Results of
Operations for each of Park-Ohio and RB&W incorporated by reference herein.
The pro forma information is presented for illustrative purposes only and
is not necessarily indicative of the operating results or financial position
that would have occurred if the Merger had been consummated in the past or which
may be obtained in the future.
4
<PAGE> 18
<TABLE>
PARK-OHIO INDUSTRIES, INC.
SELECTED FINANCIAL DATA
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30 YEAR ENDED DECEMBER 31
------------------- ----------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- --------
(In Thousands, Except Per Share Data)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net sales................ $145,865 $105,661 $147,168 $119,839 $115,497 $125,152 $141,845
Gross profit............. 24,925 18,576 25,369 17,027 19,396 19,735 20,731
Income (loss) from
continuing operations
before cumulative
effect of change in
accounting principle... 8,051 4,123 6,031 (7,655) (4,001) 832 2,524
Net income (loss)........ 8,051 4,123 6,031 (34,546) (10,217) (1,681) 2,699
Income (loss) from
continuing operations
before cumulative
effect of change in
accounting principle
per common share....... $ .97 $ .63 $ .90 $ (1.28) $ (.72) $ .14 $ .45
Net income (loss) per
common share........... $ .97 $ .63 $ .90 $ (5.76) $ (1.83) $ (.31) $ .48
FINANCIAL POSITION
Working capital.......... 25,818 18,260 20,519 15,297 17,932 22,656 24,558
Total assets............. 122,133 79,341 97,664 71,729 62,610 66,785 68,942
Long-term debt........... 24,903 15,272 22,770 10,078 2,631 3,296 4,255
Shareholders' equity..... 42,281 13,101 17,933 8,795 39,742 49,988 51,698
Book value per common
share.................. $ 5.16 $ 2.02 $ 2.65 $ 1.35 $ 6.99 $ 8.79 $ 9.08
<FN>
- ---------------
Note 1 -- No cash dividends per common share were declared or paid in the
periods presented.
Note 2 -- On October 15, 1993, Park-Ohio acquired General Aluminum Mfg. Company
in an exchange of shares. On June 30, 1992, Park-Ohio completed the acquisition
of substantially all of the assets of Kay Home Products, Inc. ("KHP"). These
acquisitions have been accounted for as purchases, and accordingly, their
results of operations have been included in the consolidated results of
operations of Park-Ohio from the respective dates of their acquisition.
Note 3 -- Effective January 1, 1992, Park-Ohio adopted the provisions of
Financial Accounting Standards Board No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," which resulted in a noncash charge
to operations of $26,891,000 as of that date. During 1993, Park-Ohio reduced
costs and revised its actuarial assumptions to reflect experience. The effect of
these changes reduced annual expense from $2,800,000 to $1,200,000.
Note 4 -- During 1991, Park-Ohio discontinued the operation of its metal
abrasives segment. Accordingly, the metal abrasives segment is reported as a
discontinued operation in 1989 through 1991.
Note 5 -- Shareholders' equity increased by $24,348,000 during the nine-month
period ended September 30, 1994 as a result of (1) issuance of 1,150,000 shares
of common stock valued at $12,100,000 to complete the acquisition of KHP in
accordance with an earn-out provision, (2) sale of 273,000 shares of common
stock valued at $4,197,000, and (3) net income during the period of $8,051,000.
</TABLE>
5
<PAGE> 19
<TABLE>
RB&W CORPORATION
SELECTED FINANCIAL DATA
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30 YEAR ENDED DECEMBER 31
------------------- ----------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- --------
(In Thousands, Except Per Share Data)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net sales................ $127,322 $140,375 $176,603 $182,776 $164,249 $173,165 $186,683
Gross profit............. 17,835 18,201 22,495 21,991 14,536 21,668 25,872
Income (loss) before
effect of change in
accounting principle... 2,896 1,967 677 (11,085) (12,350) (4,849) 5,180
Net income (loss)........ 2,896 1,967 677 (15,019) (12,350) (4,849) 5,180
Income (loss) before
effect of change in
accounting principle
per common share....... $ .48 $ .33 $ .11 $ (1.99) $ (2.32) $ (.95) $ 1.02
Net income (loss) per
common share........... $ .48 $ .33 $ .11 $ (2.69) $ (2.32) $ (.95) $ 1.02
FINANCIAL POSITION
Working capital.......... 41,655 32,032 34,620 34,222 42,831 50,573 48,720
Total assets............. 80,383 77,019 73,016 88,592 87,370 103,358 99,574
Long-term debt........... 26,976 23,356 23,581 32,472 31,733 32,677 26,736
Shareholders' equity..... 23,705 19,933 20,780 18,035 34,042 45,551 49,201
Book value per common
share.................. $ 3.99 $ 3.43 $ 3.52 $ 3.11 $ 6.12 $ 8.57 $ 9.68
<FN>
- ---------------
Note 1 -- No cash dividends per common share were declared or paid in the
periods presented.
Note 2 -- During 1993, RB&W wrote down assets held for sale by $1,800,000 in the
fourth quarter.
Note 3 -- During 1992, RB&W recorded a $10,550,000 manufacturing restructuring
charge and incurred a noncash charge of $3,934,000 related to the adoption of
Financial Accounting Standards Board No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions."
Note 4 -- During 1991, RB&W recorded a $5,000,000 charge for special write-offs
and accruals.
Note 5 -- During 1990, RB&W recorded a $4,500,000 provision for a plant closing.
Note 6 -- During 1989, RB&W realized a $1,250,000 gain on sale of a plant.
</TABLE>
6
<PAGE> 20
<TABLE>
PARK-OHIO INDUSTRIES, INC. AND RB&W CORPORATION
PRO FORMA COMBINED SELECTED FINANCIAL DATA
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1994 DECEMBER 31, 1993
------------------ -----------------
(In Thousands, Except Per Share Data)
<S> <C> <C>
OPERATIONS
Net sales............................................. $273,187 $ 323,771
Gross profit.......................................... 42,760 47,864
Net income............................................ 8,197 3,308
Net income per common share........................... $ .77 $ .37
FINANCIAL POSITION
Working capital....................................... 61,473
Total assets.......................................... 241,552
Long-term debt........................................ 78,278
Shareholders' equity.................................. 72,623
<FN>
- ---------------
Note 1 -- The unaudited pro forma combined selected financial data of Park-Ohio
and RB&W reflect the acquisition of RB&W by Park-Ohio through the
issuance of 2,248,942 shares of Common Stock and cash of $29,969,000
in a transaction accounted for as a purchase.
Note 2 -- The Pro Forma adjustments for the year ended December 31, 1993 and as
of and for the nine months ended September 30, 1994 are consistent
with the Pro Forma adjustments made in connection with the Pro Forma
Condensed Financial Information included elsewhere in this Prospectus
and Joint Proxy Statement.
Note 3 -- Pro forma net income per common share for the nine months ended
September 30, 1994 has taken into account imputed goodwill
amortization of $335,000 relating to earn-out provisions of previous
acquisitions of Park-Ohio.
</TABLE>
7
<PAGE> 21
<TABLE>
PARK-OHIO INDUSTRIES, INC. AND RB&W CORPORATION
COMPARATIVE PER SHARE DATA -- (UNAUDITED)
<CAPTION>
RB&W
PARK-OHIO ------------------------
------------------------ EQUIVALENT
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
PER COMMON SHARE
Book value:
September 30, 1994..................... $ 5.16 $ 6.95 $ 3.99 $ 6.77
December 31, 1993...................... 2.65 5.03 3.52 6.13
Market value:
September 30, 1994..................... 13.00 6.25 8.79
December 31, 1993...................... 12.88 6.00 8.75
Net income:
Nine months ended
September 30, 1994................ $ 0.97 $ 0.77 $ 0.48 $ 0.52
Year ended
December 31, 1993................. 0.90 0.37 0.11 0.25
<FN>
- ---------------
Note 1 -- The equivalent pro forma per share amounts for RB&W Common Stock
represent: 1) for book value, the pro forma amounts for Park-Ohio
Common Stock multiplied by .33394 (the exchange ratio) plus $4.45 per
RB&W common share representing the cash portion of the purchase price,
2) for market value, the historical data for Park-Ohio multiplied by
.33394 (the exchange ratio) plus $4.45 per RB&W common share
representing the cash portion of the purchase price and 3) for net
income, the pro forma amounts for Park-Ohio Common Stock multiplied by
.33394 (the exchange ratio) and .3423 and .3455 fractional shares as
of September 30, 1994 and December 31, 1993, respectively,
representing the assumed reinvestment by RB&W Shareholders of the
$4.45 cash portion of the purchase price in Park-Ohio Common Stock.
Note 2 -- Neither Park-Ohio nor RB&W has paid any dividends in the periods
presented above.
Note 3 -- Net Income Per Common Share is based on the average number of common
shares outstanding and assumes the exercise of outstanding dilutive
stock options and, for Park-Ohio only, is also based on issuance of
additional shares subject to certain earn-out provisions of previous
acquisitions of Park-Ohio after adjusting results of operations for
preferred stock dividend requirements.
Note 4 -- The Park-Ohio Common Stock is traded on NASDAQ under the symbol
"PKOH". The RB&W Common Stock is traded on the American Stock Exchange
under the symbol "RBW."
Note 5 -- Pro forma net income per share for Park-Ohio reflects additional
interest expense related to the additional debt incurred to finance
the Merger and additional amortization over 25 years of the excess
purchase price over net assets acquired.
</TABLE>
8
<PAGE> 22
INTRODUCTION
This Prospectus and Joint Proxy Statement is being furnished in connection
with the solicitation of proxies by the Boards of Directors of Park-Ohio and
RB&W for use at each of the reconvened Park-Ohio and RB&W Special Meetings. This
Prospectus and Joint Proxy Statement also serves as a Prospectus for the
issuance of Park-Ohio Common Stock upon the consummation of the Merger (the
"Effective Time"). This Prospectus and Joint Proxy Statement is being mailed to
Shareholders of Park-Ohio and RB&W commencing on or about February 13, 1995.
All information contained in this Prospectus and Joint Proxy Statement
relating to Park-Ohio has been furnished by Park-Ohio, and all information
contained in this Prospectus and Joint Proxy Statement relating to RB&W has been
furnished by RB&W. The party furnishing any such information is responsible for
the accuracy thereof.
THE RECONVENED SPECIAL MEETINGS
THE PARK-OHIO SPECIAL MEETING
DATE, TIME AND PLACE. The Park-Ohio Special Meeting will be reconvened on
March 7, 1995, at 10:00 a.m. Cleveland time, at Cleveland Athletic Club, 1118
Euclid Avenue, Cleveland, Ohio. This Prospectus and Joint Proxy Statement is
being sent to Park-Ohio Shareholders and accompanies a form of proxy which is
being solicited by the Park-Ohio Board of Directors for use at the Park-Ohio
Special Meeting and at any adjournment or postponement thereof.
PURPOSE OF MEETING. The purpose of the Park-Ohio Special Meeting is to
consider and vote upon the issuance of additional Park-Ohio Common Stock for the
purposes set forth in the terms of the Agreement.
RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE. The record date for
the determination of Park-Ohio Shareholders entitled to notice of and to vote at
the Park-Ohio Special Meeting has been fixed by the Board of Directors of
Park-Ohio as the close of business on December 27, 1994 (the "Park-Ohio Record
Date"). As of the Park-Ohio Record Date, there were approximately 8,943,654
shares of Park-Ohio Common Stock issued and outstanding, held by approximately
1,330 shareholders of record. Park-Ohio Shareholders of record on the Park-Ohio
Record Date are entitled to one vote per share and are entitled to exercise
dissenters' rights. See "RIGHTS OF DISSENTING SHAREHOLDERS."
VOTE REQUIRED. The affirmative vote of the holders of a majority of the
shares of Park-Ohio Common Stock outstanding on the Park-Ohio Record Date is
required to adopt the proposal. As of the Park-Ohio Record Date, Park-Ohio's
directors and executive officers and their affiliates owned approximately
3,100,000 shares of Park-Ohio Common Stock, which represents 34.7% of the
outstanding shares of Park-Ohio Common Stock entitled to vote at the Park-Ohio
Special Meeting. The Directors and officers of Park-Ohio intend to vote their
shares FOR the proposal.
VOTING; SOLICITATION AND REVOCATION OF PROXIES. The enclosed Park-Ohio
proxy may be used by Park-Ohio Shareholders to vote at the Park-Ohio Special
Meeting. The proxy may be revoked at any time prior to the voting thereof by
giving notice in writing to the Secretary of Park-Ohio of the revocation, by
filing with the Secretary another proxy duly executed and bearing a later date,
or by giving written notice of the proxy revocation at the Park-Ohio Special
Meeting. Because the Special Meeting scheduled for March 7, 1995 is a
continuation of the Special Meeting adjourned on February 2, 1995, any proxy
that was submitted in connection with the February 2, 1995 Special Meeting will
remain valid unless it is superseded by a valid proxy submitted on the enclosed
proxy card. Shares represented by valid proxies will be voted in accordance with
the instructions noted thereon, but in the absence of such instructions, will be
voted in favor of the adoption of the proposal.
Park-Ohio will bear the cost of any solicitation of proxies from Park-Ohio
Shareholders. Officers and employees of Park-Ohio may, without special
compensation, request the return of proxies by further mailings, personal
conversations, telephone or telefax. Banks, brokerage houses, other
institutions, nominees and fiduciaries will be requested to forward their proxy
soliciting material to their principals and obtain
9
<PAGE> 23
authorizations for the execution of proxies. Upon request, Park-Ohio will pay
the standard expenses for such activities. Park-Ohio has retained Kissel-Blake
Inc. to aid in the solicitation of proxies. The fee of such firm is estimated to
be $6,000 plus reimbursement for out-of-pocket costs and expenses.
THE RB&W SPECIAL MEETING
DATE, TIME AND PLACE. The RB&W Special Meeting will be reconvened on March
7, 1995, at 10:00 a.m. Cleveland time, at Argo-Tech Corporation Auditorium,
23555 Euclid Avenue, Euclid, Ohio. This Prospectus and Joint Proxy Statement is
being sent to RB&W Shareholders and accompanies a form of proxy which is being
solicited by the RB&W Board of Directors for use at the RB&W Special Meeting and
at any adjournment or postponement thereof.
PURPOSE OF MEETING. The purpose of the RB&W Special Meeting is to consider
and vote upon the adoption of the Agreement and the transactions contemplated
thereby.
RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE. The record date for
the determination of RB&W Shareholders entitled to notice of and to vote at the
RB&W Special Meeting has been fixed by the Board of Directors of RB&W as the
close of business on December 27, 1994 (the "RB&W Record Date"). As of the RB&W
Record Date, there were approximately 6,015,885 shares of RB&W Common Stock
issued and outstanding, held by approximately 1,200 shareholders of record. RB&W
Shareholders of record on the RB&W Record Date are entitled to one vote per
share and are entitled to dissenters' rights. See "RIGHTS OF DISSENTING
SHAREHOLDERS."
VOTE REQUIRED. The affirmative vote of the holders of a majority of the
shares of RB&W Common Stock outstanding on the RB&W Record Date is required to
adopt the Agreement. As of the RB&W Record Date, RB&W's directors and executive
officers and their affiliates owned approximately 83,000 shares of RB&W Common
Stock, which represents 1.4% of the outstanding shares of RB&W Common Stock
entitled to vote at the RB&W Special Meeting. The Directors and officers of RB&W
intend to vote their shares FOR the proposal.
VOTING; SOLICITATION AND REVOCATION OF PROXIES. The enclosed RB&W proxy
may be used by RB&W Shareholders to vote at the RB&W Special Meeting. The proxy
may be revoked at any time prior to the voting thereof by giving notice in
writing to the Secretary of RB&W of the revocation, by filing with the Secretary
another proxy duly executed and bearing a later date, or by giving written
notice of the proxy revocation at the RB&W Special Meeting. Because the Special
Meeting scheduled for March 7, 1995 is a continuation of the Special Meeting
adjourned on February 2, 1995, any proxy that was submitted in connection with
the February 2, 1995 Special Meeting will remain valid unless it is superseded
by a valid proxy submitted on the enclosed proxy card. Shares represented by
valid proxies will be voted in accordance with the instructions noted thereon,
but in the absence of such instructions, will be voted in favor of the adoption
of the Agreement.
RB&W will bear the cost of any solicitation of proxies from RB&W
Shareholders. Officers and employees of RB&W may, without special compensation,
request the return of proxies by further mailings, personal conversations,
telephone or telefax. Banks, brokerage houses, other institutions, nominees and
fiduciaries will be requested to forward their proxy soliciting material to
their principals and obtain authorizations for the execution of proxies. Upon
request, RB&W will pay the standard expenses for such activities. RB&W has
retained Kissel-Blake, Inc. to aid in the solicitation of proxies. The fee of
such firm is estimated to be $4,000 plus reimbursement for out-of-pocket costs
and expenses.
BACKGROUND AND REASONS FOR THE MERGER
BACKGROUND OF THE ORIGINAL MERGER PROPOSAL
Since restructuring its business and returning to profitability in 1992,
Park-Ohio has engaged in a program of selectively acquiring businesses and
product lines to support and enhance its core businesses in order to improve
earnings growth potential beyond what would be achievable through internal
growth in light of Park-Ohio's mature businesses. As a part of its acquisition
program, Park-Ohio management identified
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RB&W as an acquisition candidate based on its assessment of the potential for
growth in RB&W's distribution division and the potential for earnings growth in
RB&W's manufacturing division through application of the process used to return
Park-Ohio's manufacturing operations to profitability.
Accordingly, Park-Ohio initiated preliminary discussions with RB&W in June,
1994, leading to a confidentiality agreement between RB&W and Park-Ohio in July,
1994. Preliminary discussions among management and the boards of both companies
resulted in a tentative exchange ratio of .62 Park-Ohio shares for each RB&W
share (the ".62 ratio"). Since Park-Ohio stock was then trading in the $14.50
range, the resulting value of the transaction would have been approximately $60
million dollars. The companies agreed that each would engage an investment
banker to render advice about the transaction.
Park-Ohio engaged Salomon Brothers Inc ("Salomon") to examine the proposed
transaction, with the expectation of Salomon rendering an opinion as to the
fairness, from a financial point of view, to Park-Ohio of the .62 ratio. After
conducting preliminary due diligence with respect to both Park-Ohio and RB&W,
Salomon reported to Park-Ohio management that, if asked, it was not certain that
it would be able to opine to the financial fairness of the .62 ratio. Subsequent
discussions between management and representatives of Salomon revealed certain
areas of disagreement between management and Salomon as to valuation approaches.
Most significantly, management believed that greater value and weight should be
given to the synergies and cost savings that Park-Ohio expected to achieve after
the Merger. Given the differences, Park-Ohio decided it would not be useful to
ask Salomon to render an opinion with respect to the transaction. Pursuant to
its engagement letter with Park-Ohio, Salomon received a non-refundable $50,000
retainer for its services (plus reimbursement of expenses). If Salomon had been
asked to render and had actually rendered a fairness opinion with respect to the
transaction, it would have been entitled to an additional fee of $200,000.
After extensive due diligence and analysis, the Park-Ohio Board of
Directors met on October 17, 1994, to consider the transaction. The Park-Ohio
Board discussed and considered the synergy issue and concluded that the
reductions in cost that Park-Ohio management expected from the merger synergies
were reasonable and achievable. The Park-Ohio Board also concluded that there
were additional values to be gained from the merger that would be realized
through Park-Ohio management, particularly in light of the fact that such
management had successfully improved operations after acquiring other
businesses.
After a review of the diligence process, including the review of an
extensive written memorandum, the Board authorized the execution of a letter of
intent with RB&W for a merger at an exchange ratio of .62 shares of Park-Ohio
Common Stock for each share of RB&W Common Stock. The RB&W Board of Directors
met on October 20, 1994, to consider the transaction, and concluded, after
consultation with its investment advisers, McDonald & Company Securities, Inc.
("McDonald & Company"), that a transaction at an exchange ratio of .62 shares of
Park-Ohio Common Stock for each RB&W share of Common Stock would be inadequate
to the RB&W Shareholders.
After further negotiation between RB&W and Park-Ohio, a letter of intent
was executed on October 25, 1994 calling for the acquisition of RB&W by
Park-Ohio at an exchange ratio of .63745 shares of Park-Ohio Common Stock for
each share of RB&W Common Stock. The parties then negotiated the final form of
the merger agreement which was approved by the Board of Directors of each and
executed on November 29, 1994.
BACKGROUND OF AND
REASONS FOR THE REVISED MERGER
GENERAL. As explained in the Prospectus and Joint Proxy Statement mailed to
the RB&W Shareholders on December 27, 1994, the Board of Directors of RB&W,
after exploring various strategic alternatives, executed a letter of intent with
Park-Ohio on October 25, 1994, calling for the acquisition of RB&W by Park-Ohio
at an exchange ratio of .63745 of a share of Park-Ohio Common Stock for each
share of RB&W Common Stock, and on November 29, 1994, after negotiation with
Park-Ohio, approved and authorized the execution of the Plan and Agreement of
Merger (the "Original Agreement"). The Board of Directors of RB&W concluded that
the Original Agreement offered RB&W's Shareholders a number of potential
benefits in addition to achieving long-term value for such shareholders. These
potential benefits included, among
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others, the opportunity for RB&W Shareholders to participate, as holders of
shares of Park-Ohio Common Stock, in a larger, more diversified company of which
RB&W would continue to be a significant part, an increase in liquidity for RB&W
Shareholders, and the structure of the Original Merger as a tax-free exchange.
Prior to the execution of the letter of intent with Park-Ohio and following
execution of the Original Agreement, RB&W received and rejected various
proposals from TransTechnology Corporation ("TransTechnology") relating to a
possible merger between RB&W and TransTechnology. The background of and reasons
for RB&W's entering into the Restated Agreement, including details of
TransTechnology's various proposals from October 1994 through February 1995, and
the other events culminating in Park-Ohio's revised offer and RB&W's acceptance
thereof on February 6, 1995, are provided below.
TRANSTECHNOLOGY'S 1994 PROPOSALS. From October 18, 1994 through November
15, 1994, TransTechnology made several proposals to acquire RB&W in a merger for
various combinations of cash, common stock or redeemable preferred stock.
TransTechnology also made a $9.00 per share, all-cash proposal on November 18,
1994. All of these proposals were subject to completion of due diligence and
significant financing contingencies, including in most cases a requirement
imposed by TransTechnology's lenders that TransTechnology complete a private
placement of approximately $15 to $20 million of preferred stock prior to the
closing of any transaction with RB&W. Each of these proposals also provided for
payment of a breakup fee equal to TransTechnology's expenses if RB&W accepted a
competing offer. The RB&W Board rejected each of these proposals.
On December 23, 1994, TransTechnology offered to acquire, through merger,
all of the outstanding common stock of RB&W for $9.00 per share in cash. The
offer indicated that, while TransTechnology's current lenders were prepared to
provide TransTechnology with a new line of credit necessary to effectuate the
proposed merger, such lenders continued to require that TransTechnology place
$20 million of preferred stock prior to completion of any merger. With respect
to this contingency, TransTechnology indicated that General Electric Capital
Corp. had provided it with a proposal to purchase such preferred stock subject
to completion of due diligence and legal documentation. This proposal also
called for a breakup fee equal to TransTechnology's expenses. Based on the
foregoing, TransTechnology requested RB&W to terminate the Original Agreement
and execute a letter of intent with TransTechnology on the foregoing terms and
subject to the foregoing contingencies.
On December 28, 1994, at a special meeting, the Board of Directors of RB&W
concluded that it would not accept TransTechnology's all-cash proposal because,
among other things, it was contingent upon TransTechnology's placing $20 million
of preferred stock and such acceptance would place the Original Agreement at
risk. At this meeting, the Board of Directors of RB&W decided to amend
TransTechnology's Confidentiality Agreement with RB&W to permit TransTechnology
the opportunity to attempt to obtain a financing commitment from General
Electric Capital Corp. and to take a number of other possible actions if
TransTechnology so desired, including communicating with RB&W Shareholders. The
Board's decision to reject TransTechnology's proposal was communicated to
Park-Ohio and TransTechnology on December 29, 1994, and a press release
announcing receipt and rejection of TransTechnology's offer was issued by RB&W
on December 30, 1994.
CERTAIN CONSIDERATIONS RELATED TO TRANSTECHNOLOGY'S 1994 PROPOSALS. Each of
TransTechnology's proposals made between October 18, 1994 and December 23, 1994
contained significant financing, as well as, from time to time, other
contingencies that made these proposals unacceptable to the Board of Directors
of RB&W. Additionally, all of the proposals prior to the December 23, 1994
proposal contained financial terms that presented, as communicated by RB&W to
TransTechnology, valuation difficulties for RB&W and its financial advisor. Most
importantly, however, each of TransTechnology's proposals was accompanied by
requests for termination of RB&W's letter of intent or its merger agreement with
Park-Ohio (neither of which was subject to financing contingencies) in favor of
entering into a non-binding letter of intent (subject to financing and other
significant contingencies) with TransTechnology. These repeated requests were
consistently rejected by the Board of Directors of RB&W as threats to the viable
and legally binding transaction with Park-Ohio. The Board of Directors of RB&W
believes that if it were to have acceded to TransTechnology's demands, it would
have breached its fiduciary duties to RB&W Shareholders. Nonetheless, RB&W
continued during this entire period to cooperate and negotiate with
TransTechnology and assist TransTechnology and its lenders in their numerous
efforts to complete expedited due diligence and produce a superior offer free of
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<PAGE> 26
financing and other significant contingencies. This process culminated in
TransTechnology's January 25, 1995 offer which, surprisingly to the RB&W Board
of Directors, was not an all-cash offer but an offer of cash, common stock and,
most surprisingly, the preferred stock that TransTechnology had been unable to
place with General Electric Capital Corp. or other institutional investors.
TRANSTECHNOLOGY'S 1995 OFFERS. On January 25, 1995, RB&W received its first
offer without a financing contingency from TransTechnology. In this offer
TransTechnology proposed to acquire all of the outstanding common stock of RB&W
in a two-step transaction. The first step of the proposed transaction was to be
a tender offer for 67% of the outstanding common stock of RB&W at $9.00 per
share with proration if the tender offer were oversubscribed. The second step of
the proposed transaction was to be a merger of a subsidiary of TransTechnology
into RB&W pursuant to which the remaining outstanding common stock of RB&W would
be exchanged for .13499 of a share of $53.34 par value 10% redeemable senior
preferred stock of TransTechnology and .1454 of a share of common stock of
TransTechnology. This offer also provided that TransTechnology would be entitled
to reimbursement of all of its expenses (which its financial advisors estimated
could substantially exceed $1 million) and a breakup fee of $1.5 million if RB&W
accepted a competing bid prior to completion of TransTechnology's proposed
tender offer or consummated a transaction for the sale of RB&W during the first
nine months following termination of the acquisition agreement contemplated by
TransTechnology's offer.
Upon presenting its offer, TransTechnology indicated that its offer was
subject to approval of the Board of Directors of RB&W and clearance from the
appropriate governmental agencies. TransTechnology further indicated that it was
prepared to commence its proposed tender offer immediately following approval of
the proposed acquisition agreement by the Board of Directors of RB&W.
TransTechnology also indicated that its current lenders had approved the offer
and that there were no longer any financing contingencies associated with it.
Following receipt of TransTechnology's offer, RB&W issued a press release
announcing the terms of such offer and stating that the Board of Directors of
RB&W would consider the offer at its previously scheduled meeting to be held on
January 31, 1995. Prior to such meeting, representatives of TransTechnology and
RB&W completed negotiation of all terms of the proposed TransTechnology
acquisition agreement, except for financial terms, the expense reimbursement and
the breakup fee.
Following receipt on January 25, 1995, of the TransTechnology offer,
certain Directors and officers of RB&W discussed the TransTechnology offer with
certain of RB&W's major shareholders and learned that the cash component of
TransTechnology's offer made such offer potentially more attractive to such
shareholders than the all-stock consideration offered by Park-Ohio pursuant to
the Original Agreement. These discussions were reported to the Board of
Directors of RB&W prior to its January 31, 1995 meeting.
At its meeting on January 31, 1995, the Board of Directors of RB&W
considered the TransTechnology offer and concluded, after consultation with its
financial advisors, that TransTechnology's offer was inadequate because of the
significant discount that the RB&W Board believed would be applied by the market
to the TransTechnology preferred stock and because of the Board's further belief
that the use of such stock limited significantly the possibility of the RB&W
Shareholders participating in the future growth of the combined enterprise. As
such, the Board of Directors of RB&W concluded that the value of
TransTechnology's offer was less than the value of the consideration offered by
Park-Ohio pursuant to the Original Agreement. At this meeting, it continued to
be the consensus of the Board of Directors of RB&W that the stock-for-stock
exchange contemplated by the Original Agreement provided the best value for RB&W
Shareholders. Nonetheless, in view of the discussions between RB&W and certain
of its major shareholders regarding their preference for significant liquidity
in the merger consideration, and the belief of the Board of Directors of RB&W
that based on the current market price of the Park-Ohio Common Stock the value
of the consideration provided in the Original Agreement was now less than $9.00
per share of RB&W Common Stock, the Board of Directors of RB&W decided to
attempt to obtain improved offers for the Company from Park-Ohio and
TransTechnology.
The RB&W Board's decision rejecting TransTechnology's January 25, 1995
offer was communicated to TransTechnology on January 31, 1995. Late in the
evening of that day TransTechnology responded with a revised offer that
continued to provide for a first-step tender offer for 67% of the outstanding
common stock of
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RB&W at $9.00 per share but that now provided for a second-step merger pursuant
to which the remaining outstanding common stock of RB&W was to be exchanged for
.4606 of a share of common stock of TransTechnology (for a total of one million
such shares) and .11515 share of $33.16 par value 12.5% redeemable senior
preferred stock of TransTechnology. On February 1, 1995, the Board of Directors
of RB&W reviewed TransTechnology's revised offer with McDonald & Company and
concluded that the value of such offer was greater than the value of the
consideration being offered by Park-Ohio pursuant to the Original Agreement. The
Board's conclusion was communicated to Park-Ohio. Because, among other reasons,
the revised TransTechnology offer had no expiration date, RB&W did not require
Park-Ohio to respond within any particular time frame.
On February 2, 1995, RB&W issued a press release announcing that it had
received a revised offer from TransTechnology and had been informed that
Park-Ohio intended to respond with a proposal to revise the consideration to be
offered pursuant to the Original Agreement. Accordingly, in light of these
events, RB&W adjourned to February 21, 1995, the Special Meeting of Shareholders
of RB&W convened on February 2, 1995 for the purpose of approving the Merger
with Park-Ohio. Likewise, the Special Meeting of Shareholders of Park-Ohio,
convened on February 2, 1995, was adjourned to February 21, 1995.
On February 6, 1995, RB&W received a letter from Park-Ohio in which
Park-Ohio offered RB&W a choice between two alternatives: (i) continuing with
the tax-free stock-for-stock exchange pursuant to the Original Agreement or (ii)
amending and restating the Original Agreement to provide for a taxable merger
with consideration equal to $4.45 in cash and .32697 of a share of Park-Ohio
Common Stock for each share of RB&W Common Stock. Among other things,
Park-Ohio's letter indicated that its revised offer would expire at 4:00 p.m. on
February 6, 1995, that its legal advisors were preparing an Amended and Restated
Plan and Agreement of Merger to be delivered for execution by the close of
business on February 6, 1995, that there were no financing contingencies to the
Park-Ohio revised offer, and that Park-Ohio would require a $1.5 million breakup
fee and reimbursement of all expenses, which it estimated to be between $1
million and $1.5 million, if RB&W's Board of Directors approved the revised
Park-Ohio offer and subsequently accepted another offer from a third party. A
copy of Park-Ohio's letter was furnished by RB&W to TransTechnology. In light
of, among other factors, the 4:00 p.m. expiration of Park-Ohio's revised offer,
TransTechnology was advised to respond by 3:00 p.m.
Following receipt of Park-Ohio's letter, the Board of Directors of RB&W met
to review the revised Park-Ohio offer and the offer received from
TransTechnology on January 31, 1995. After discussion and review of the relative
values of the revised Park-Ohio offer and the TransTechnology offer, the Board
of Directors of RB&W believed that the aforesaid offers were substantially
equivalent in current market value but less than the minimum $9.00 per share of
current market value that the Board desired to obtain for the RB&W Shareholders.
In view of the foregoing, the RB&W Board of Directors instructed the Chairman of
the Board to ascertain from Park-Ohio whether Park-Ohio could improve its offer
sufficiently to reach the desired $9.00 per share in value and whether Park-Ohio
would reduce its breakup fee. After discussing this matter with Park-Ohio's
Chairman and Chief Executive Officer, RB&W's Chairman reported to the Board that
Park-Ohio would agree to increase the exchange ratio of the stock portion of its
alternative offer from .32697 to .33394 share for each share of RB&W Common
Stock on a fully-diluted basis. RB&W's Chairman also reported that Park-Ohio
would agree to reduce its breakup fee from $1.5 million to $800,000.
After discussion of this revision to Park-Ohio's offer and discussions with
RB&W's financial advisor with respect to the value of the revised offer and
receipt of such advisor's oral opinion that the consideration to be provided in
the revised offer was fair to RB&W Shareholders from a financial point of view,
the Board of Directors of RB&W decided to accept Park-Ohio's revised offer and
enter into the Restated Agreement subject to confirmation that there were no
financing contingencies to Park-Ohio's revised offer and to satisfactory
negotiation of the terms of the Restated Agreement to be delivered by Park-Ohio
later in the day. Park-Ohio and TransTechnology were informed of the Board's
decision, and TransTechnology was furnished with the details of the revised
Park-Ohio offer. It was agreed that RB&W would not issue a press release until
later in the day when the aforesaid conditions were satisfied.
Shortly after 4:00 p.m. on February 6, 1995, RB&W received a revised offer
from TransTechnology pursuant to which TransTechnology proposed to acquire up to
81% of the RB&W Common Stock in a first-
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step tender offer for $9.00 per share and the remaining RB&W Common Stock in a
back-end merger for one million shares of TransTechnology common stock.
TransTechnology indicated that it would reduce its breakup fee to $800,000 plus
actual out-of-pocket expenses in conformance with the revised Park-Ohio offer.
TransTechnology stated that its offer had received verbal approval from its
lenders and such approval would be confirmed in writing on February 7, 1995.
TransTechnology stated that its offer would expire at 9:00 p.m. on February 6,
1995.
The Board of Directors of RB&W reconvened late in the afternoon of February
6, 1995, to review the status of the negotiations with Park-Ohio of the Restated
Agreement and the revised offer received from TransTechnology earlier that
afternoon. At the meeting, RB&W's financial advisor stated that the revised
Park-Ohio offer, which the Board of Directors had conditionally accepted, and
the revised TransTechnology offer were substantially equivalent in value from a
financial point of view based on current market prices for the Park-Ohio Common
Stock and TransTechnology's common stock. The Board of Directors of RB&W
discussed the competing offers and shareholder concerns and interests, and
reviewed with RB&W's legal advisors the obligations of RB&W under the Original
Agreement and the fiduciary duties of the Directors under Delaware law. The
Board also received the oral opinion of its financial advisor that, as of the
date thereof, the aggregate cash and stock consideration to be received by all
of RB&W's Shareholders pursuant to the revised Park-Ohio offer was fair to such
holders. Following this discussion, the Board again expressed its support for
the revised Park-Ohio offer but directed the Chairman of the Board to attempt
once more to negotiate a reduction in the breakup fee and expense reimbursement
Park-Ohio was demanding. After discussing this matter with the Chairman and
Chief Executive Officer of Park-Ohio, the Chairman of the Board of RB&W reported
to the RB&W Board of Directors that Park-Ohio would agree to limit its expense
reimbursement to $1 million but would make no further change in the breakup fee.
The Board of Directors of RB&W then unanimously approved the Restated Agreement
and confirmed acceptance of Park-Ohio's revised offer. In doing so, the Board
noted the continuing validity of its prior conclusions that a Park-Ohio-RB&W
combination was an excellent strategic fit and presented substantial long-term
benefits. The Board also noted that the revised terms of the Park-Ohio offer
provided for a significant cash component and at the same time allowed RB&W's
Shareholders to participate significantly in the ownership of the combined
company. The results of the Board's deliberations were reported to Park-Ohio and
TransTechnology, and a press release announcing the terms of the Restated
Agreement with Park-Ohio was issued by RB&W before the opening of the American
Stock Exchange on February 7, 1995.
REASONS FOR THE MERGER -- RB&W. In choosing the Park-Ohio offer over the
revised offer of TransTechnology, the Board of Directors of RB&W considered the
following factors:
(i) The cash component offered by Park-Ohio and the more liquid market
for Park-Ohio Common Stock addressed the desire of certain major
shareholders for liquidity in the merger consideration;
(ii) The common stock portion of the Park-Ohio merger consideration
provided RB&W Shareholders with an opportunity to participate in the
long-term growth of a combined enterprise;
(iii) The opinion of RB&W's financial advisors that the value of the
revised TransTechnology offer was equivalent, but not superior, to the
value of the Park-Ohio offer;
(iv) The contractual obligations of RB&W under the Original Agreement
and the limitations imposed on the Board's ability to accept an equivalent
but not superior third-party offer;
(v) The limited period of time for which the Park-Ohio revised offer
was open for acceptance;
(vi) The RB&W Board's experiences and negotiations with Park-Ohio had
engendered a high level of confidence in Park-Ohio and its management;
(vii) The ability of Park-Ohio to consummate a merger more
expeditiously than TransTechnology could consummate a tender offer and a
merger;
(viii) The increasing concern that the length and intensity of the
bidding and evaluation process could adversely affect RB&W's operations and
prospects, thereby diminishing its attractiveness as a merger partner; and
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(ix) The potentially adverse consequences of losing the Park-Ohio
merger and not being able to consummate a satisfactory combination with
TransTechnology due to factors beyond RB&W's or TransTechnology's control
during the time it could take to complete TransTechnology's proposed two-
step transaction.
In particular, the RB&W Board of Directors observed that the demanding
process of attempting to merge RB&W had intensified significantly with the
bidding and evaluation process, requiring management to divert attention from
operating the Company's business during the period in which TransTechnology and
its lenders had been permitted to conduct due diligence, arrange financing, meet
with RB&W Shareholders and present the Board of Directors with a bonafide offer
to acquire RB&W. The Board of Directors of RB&W believed that this factor
especially required the Company to conclude a transaction as expeditiously as
possible. After reviewing the situation with its financial and legal advisors,
the Board of Directors of RB&W concluded that the proposed Merger with Park-Ohio
could be concluded promptly and without substantial risk of non-consummation,
whereas the proposed two-step transaction with TransTechnology would require
more time to complete, could involve delays due to required governmental filings
and approvals, and presented a potentially greater risk of non-consummation.
The Board of Directors of RB&W also noted the possibility that the two-step
nature of TransTechnology's offer, involving a first-step tender offer for cash
and a second-step merger for common stock, made it possible for RB&W's
Shareholders to receive disparate consideration if all outstanding shares of
RB&W Common Stock were not tendered in the first step of the transaction, thus
potentially providing those who did so tender with more cash in exchange for
their RB&W Common Stock and leaving those who, for whatever reason, failed to
participate in the first-step tender offer with no cash and all stock in
exchange for their RB&W Common Stock. While the Board of Directors of RB&W did
not put undue weight on this factor, it did believe that it had a duty to obtain
the best reasonable value for all of the RB&W's Shareholders and that this duty
would be fully satisfied pursuant to a merger with Park-Ohio in which all RB&W
Shareholders would be treated equally and be assured of receiving the same
proportion of cash and Park-Ohio Common Stock for their shares of RB&W Common
Stock.
The RB&W Board of Directors also continued to believe that a Park-Ohio and
RB&W combination would provide the greatest potential for long-term growth for
RB&W Shareholders.
BREAKUP FEE. While the Board of RB&W was reluctant to grant Park-Ohio a
breakup fee, it decided to do so because Park-Ohio had made it clear that such a
fee was an absolute prerequisite to its willingness to enter into the Restated
Agreement and consummate the Merger expeditiously. RB&W did succeed, however, in
reducing the amount of the breakup fee from $1.5 million to $800,000 and in
limiting potential reimbursement of Park-Ohio's expenses to $1 million.
In agreeing to grant Park-Ohio a breakup fee, the Board of Directors of
RB&W considered the following factors:
(i) TransTechnology requested an unlimited expense reimbursement
provision and a $1.5 million breakup fee in its January 25 and January 31,
1995 offers and a $800,000 breakup fee in its February 6, 1995 offer;
(ii) Park-Ohio did not ask for a breakup fee under the Original
Agreement, which contained only a $400,000 expense reimbursement provision;
(iii) Under the Restated Agreement the Board of Directors would
continue to be able to consider and negotiate with respect to other offers
if its fiduciary duty to RB&W Shareholders so required;
(iv) The need to consummate a combination expeditiously to avoid
further diversion of management time from operations of RB&W;
(v) The length to date of the process of selling RB&W, the failure of
other bidders to appear, and the importance of retaining the bidder
offering the best reasonable value and significant liquidity for RB&W
Shareholders and the best opportunity to consummate a transaction
expeditiously and without undue risk of non-consummation;
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(vi) The belief of the Board of Directors of RB&W that Park-Ohio and
TransTechnology had each submitted their best and final offers;
(vii) The belief of the Board of Directors of RB&W that Park-Ohio and
TransTechnology improved their initial offers significantly and that the
value of the latest TransTechnology offer still did not exceed that of the
latest Park-Ohio offer; and
(viii) The two-tiered nature of TransTechnology's offer and the
inherent potential for disparate treatment of RB&W Shareholders presented
by the structure of such offer.
FAIRNESS OPINION. McDonald & Company has delivered its written opinion
confirming its oral opinion of February 6, 1995. The full text of the opinion of
McDonald & Company, which sets forth assumptions made, matters considered and
limits on the review undertaken, is attached hereto as Appendix B and is
incorporated herein by reference. See "Opinion of Financial Advisors to RB&W."
FINAL TRANSTECHNOLOGY OFFER. On February 7, 1995, following announcement of
the terms of the Restated Agreement, RB&W received a letter from the Chairman of
TransTechnology stating that TransTechnology was resubmitting, with certain
modifications, its final offer of February 6, 1995, and would leave the modified
offer open until the close of business on the day following the Special Meeting
of RB&W Shareholders in the event that the Restated Agreement was not approved
by RB&W Shareholders. As modified, the TransTechnology proposal involves a
combination of cash and TransTechnology common stock with a proposed value of
$9.00 per share of RB&W Common Stock, but with the amount of consideration to be
reduced by the amount of any breakup fees or expense reimbursements required to
be paid to Park-Ohio which exceed $400,000. The amount of any reduction to the
consideration arising from the foregoing would be assessed by TransTechnology in
its discretion against the cash or stock portion of the proposed transaction.
The structure of the proposed transaction would involve a first-step tender
offer for 81% of the outstanding shares of RB&W common stock at $9.00 per share
(subject to the aforesaid reduction in price) and a back-end merger for the
remaining shares of RB&W common stock at .758 of a share of TransTechnology
common stock (for a total of 1,000,000 shares of such stock but subject to the
aforesaid reduction in price) for each share of RB&W Common Stock. The Chairman
of TransTechnology indicated in the letter that there were no financing
contingencies and that an addendum to the original commitment that it received
from its lenders was being prepared to enable it to proceed with this proposal.
RB&W has requested a copy of such addendum. In this letter, TransTechnology's
Chairman also indicated that it was not TransTechnology's intention to commence
a hostile tender offer. TransTechnology stated that it would be ready to
commence discussions with RB&W to effect its proposal immediately following the
RB&W Shareholders Meeting if the Restated Agreement were not approved at such
meeting. In view of the $1.8 million in breakup fee and potential expense
reimbursement required by Park-Ohio, the RB&W Board believes that the
consideration to be paid to RB&W Shareholders under the TransTechnology proposal
would be reduced substantially. The RB&W Board believes that this reduction
itself makes the TransTechnology proposal inferior to the Park-Ohio offer
accepted by the Board, without consideration of the other factors enumerated
herein that the RB&W Board considered crucial to accepting such offer.
Furthermore, the Board of Directors of RB&W believes that if the Restated
Agreement were not approved and thus terminated, and an acceptable transaction
with TransTechnology were not consummated or agreed to, RB&W could be left
without a strategic partner. In such event, the Board believes that the price of
RB&W Common Stock could drop significantly, including possibly to levels at or
near the prevailing prices of such stock prior to the initial announcement in
October 1994 of the Park-Ohio and RB&W merger.
RECOMMENDATION OF THE RB&W BOARD OF DIRECTORS. For the reasons stated
herein, the Board of Directors of RB&W unanimously recommends that the RB&W
Shareholders approve the Restated Agreement and the Merger. The Board of
Directors of RB&W believes that the Merger offers RB&W Shareholders substantial
cash value, a common stock with greater liquidity than the RB&W Common Stock,
and a significant equity participation in a combined enterprise with great
potential for achieving long-term value. Accordingly, the Board of Directors of
RB&W believes that the Merger is the best alternative available to RB&W for
maximizing shareholder value.
REASONS FOR THE MERGER -- PARK-OHIO. The Park-Ohio Board believes that the
Merger with RB&W is consistent with Park-Ohio's strategy of acquiring
underperforming businesses that are engaged in basic
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manufacturing in order to fuel its continued growth, by providing Park-Ohio a
stronger market position with its current customer base and an opportunity to
expand its customer base with access to RB&W's customers.
In approving the Merger, Park-Ohio's Board of Directors reviewed a number
of factors, including (a) anticipated cost savings attributable to consolidation
of operations, increased efficiencies, economies of scale, and related factors,
(b) increased positions with certain key customers of Park-Ohio and access to
new customers, (c) the ability to improve RB&W's manufacturing business as a
result of Park-Ohio's manufacturing oriented management team, (d) the ability to
improve RB&W's distribution business through access to capital, and (e) a
combined entity with increased financial resources. Park-Ohio believes that its
prior successful experience in effecting a turnaround of its businesses will
assist it in achieving the anticipated cost savings and enhanced revenues.
Park-Ohio's senior management believes it could effect improved operations
through investments in technology. These investments should have a short
pay-back period because better information about operations will allow overall
improvements to be made in RB&W's businesses. Certain risks of the Merger
considered by Park-Ohio's Board and senior management included RB&W's
litigation, environmental, and other legal contingencies, the uncertainties
inherent in any combination of two companies, potential short term earnings
dilution for Park-Ohio Common Stock, additional exposure in the cyclical
industries, i.e., auto and non-automotive vehicles, and the effort and capital
that would be necessary to achieve the anticipated cost savings, increased
efficiencies, and enhanced revenues.
During the review process, Park-Ohio's senior management believed it could
achieve cost reductions over time through consolidating the operations of RB&W,
especially where those operations will overlap or become redundant, and by
achieving greater efficiencies. The cost reductions are expected to result from
consolidation of certain facilities, elimination of duplicate corporate
overhead, and consolidation of other operations. While Park-Ohio believes that
these anticipated cost reductions are realistic and achievable, no assurance can
be given that the cost reductions, in fact, will be achieved, or will be
achieved within the time frame planned by Park-Ohio, or that any cost savings
which are achieved will not be offset by declining revenues or other charges to
earnings.
RECOMMENDATION OF THE BOARD OF DIRECTORS OF PARK-OHIO
THE PARK-OHIO BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE RESTATED
AGREEMENT AND BELIEVES THAT THE MERGER IS FAIR TO AND IN THE BEST INTERESTS OF
PARK-OHIO SHAREHOLDERS. THE PARK-OHIO BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THE PROPOSAL TO ISSUE ADDITIONAL SHARES OF PARK-OHIO COMMON STOCK TO
EFFECT THE MERGER.
RECOMMENDATION OF THE BOARD OF DIRECTORS OF RB&W
THE RB&W BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE RESTATED AGREEMENT
AND BELIEVES THAT THE MERGER IS FAIR TO AND IN THE BEST INTERESTS OF RB&W
SHAREHOLDERS. THE RB&W BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO
APPROVE AND ADOPT THE RESTATED AGREEMENT.
THE RESTATED AGREEMENT
TERMS OF THE AGREEMENT
This portion of the Prospectus and Joint Proxy Statement describes various
aspects of the Merger. The following description does not purport to be complete
and is qualified in its entirety by reference to the Restated Agreement attached
hereto as Appendix A and incorporated herein by reference. The Shareholders of
Park-Ohio and RB&W are urged to read the Restated Agreement in its entirety.
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GENERAL
The Restated Agreement provides that, subject to the satisfaction or waiver
of certain conditions (including, among other things, the adoption of the
Restated Agreement by the shareholders of RB&W and approval of the issuance of
shares by the Park-Ohio shareholders and the receipt of all necessary regulatory
approvals), POAC will be merged with and into RB&W at the Effective Time. The
separate corporate existence of POAC will cease at the Effective Time. RB&W will
be the surviving corporation in the Merger and the Shareholders of RB&W will
become Shareholders of Park-Ohio.
CONVERSION OF RB&W CAPITAL STOCK INTO CASH AND PARK-OHIO CAPITAL STOCK
CONVERSION OF RB&W COMMON STOCK. At the Effective Time, each share of RB&W
Common Stock then issued and outstanding will be cancelled and exchanged for the
right to receive $4.45 in cash and 0.33394 share of Park-Ohio Common Stock. See
"DESCRIPTION OF PARK-OHIO CAPITAL STOCK" and "COMPARISON OF PARK-OHIO AND RB&W
CAPITAL STOCK."
NO EFFECT ON PARK-OHIO COMMON STOCK. At the Effective Time, each share of
Park-Ohio Common Stock then issued and outstanding will continue to be one share
of Park-Ohio Common Stock.
NO FRACTIONAL SHARES OF PARK-OHIO COMMON STOCK TO BE ISSUED. No fractional
shares of Park-Ohio Common Stock will be issued in the Merger and no cash will
be issued in lieu of such fractional shares.
MANNER OF EXCHANGING RB&W CERTIFICATES FOR CASH AND PARK-OHIO CERTIFICATES.
Park-Ohio has selected Society National Bank as the exchange agent (the
"Exchange Agent") to effect the exchange of RB&W Certificates for cash and
Park-Ohio Certificates in connection with the Merger. Promptly after the
Effective Time, the Exchange Agent will mail to each RB&W Shareholder of record
a notice advising the holder of the effectiveness of the Merger, accompanied by
a transmittal form (the "Transmittal Form"). The Transmittal Form will contain
instructions with respect to the surrender of certificates representing RB&W
Common Stock to be exchanged for cash and Park-Ohio Common Stock and will
specify that delivery will be effected, and risk of loss and the title to such
certificates will pass, only upon proper delivery of the certificates to the
Exchange Agent.
RB&W STOCK CERTIFICATES SHOULD NOT BE FORWARDED TO THE EXCHANGE AGENT UNTIL
A RB&W SHAREHOLDER HAS RECEIVED A TRANSMITTAL FORM AND SHOULD NOT BE RETURNED
WITH THE ENCLOSED PROXY.
REPRESENTATIONS AND WARRANTIES
The Restated Agreement contains various customary representations and
warranties of the parties for transactions of this type. These include, among
other things, representations and warranties by RB&W as to (i) RB&W's
organization, (ii) authorization, execution, delivery, performance and
enforceability of the Agreement, (iii) conflicts under RB&W's certificate of
incorporation and by-laws, required consents and approvals and violations of any
agreements or laws, (iv) RB&W's capital structure, (v) RB&W's wholly-owned
subsidiary, Lamson and Sessions of Canada, Limited, (vi) accuracy of filings
made by RB&W with the Commission (vii) vote required to approve the Agreement,
(viii) accounting matters, (ix) title to and condition of RB&W's assets, (x)
collectibility of accounts receivable, (xi) quality of inventory, (xii) RB&W's
insurance, (xiii) the accuracy of RB&W's financial and other information, (xiv)
pending or threatened litigation, (xv) agreements with RB&W's employees,
employee benefit plans and labor matters, (xvi) proper payment of taxes, (xvii)
absence of certain material adverse changes, (xviii) compliance with applicable
law, (xix) environmental matters, (xx) the patents, copyrights, trademarks and
other intellectual property rights of RB&W, (xxi) the contracts of RB&W, and
(xxii) loss contingencies and undisclosed liabilities.
The representations and warranties of Park-Ohio and POAC to RB&W include,
among other things, representations and warranties as to (i) their respective
organization, (ii) authorization, execution, delivery, performance and
enforceability of the Agreement, (iii) conflicts under the certificate of
incorporation, charters, by-laws and regulations and violations of any
agreements or laws, (iv) the capital structure of Park-Ohio, (v) the accuracy of
the documents filed by Park-Ohio with the Commission and its financial
statements,
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(vi) vote required to approve Agreement, (vii) accounting matters, (viii) title
to and condition of assets, (ix) pending or threatened litigation, (x) employee
benefits, (xi) environmental matters, (xii) absence of certain material adverse
changes, and (xiii) absence of material loss contingencies.
CERTAIN COVENANTS
GENERAL. Pursuant to the Restated Agreement each of Park-Ohio and RB&W has
made various covenants customary for transactions of this type, including, among
others, that from the date of the Restated Agreement through the Closing Date,
RB&W will conduct its business only in the ordinary course and consistent with
past practice. In addition, RB&W has agreed that without Park-Ohio's prior
written approval it will not take certain actions, including without limitation,
(i) changing its business policies, (ii) failing to maintain its assets, (iii)
failing to perform obligations under its agreements, (iv) declaring or paying
dividends or other distributions, (v) issuing, redeeming, selling or disposing
of, or creating any obligation to issue, redeem, sell or dispose of, any shares
of its capital stock, (vi) granting any severance or termination pay to any
employees or increasing benefits payable under its severance or termination
policies, (vii) increasing benefits or compensation of its employees, (viii)
entering into or modifying its employment agreements or employee benefit plans,
(ix) taking actions which could have a material adverse effect or would make its
representations or warranties untrue or result in any closing condition not
being satisfied, (x) accelerating its billing or shipments, (xi) incurring
liens, (xii) making capital expenditures in excess of $300,000 (in the
aggregate), (xiii) buying or selling assets other than inventory in the ordinary
course of business, (xiv) entering into any settlement or dispositive agreements
with respect to any litigation for amounts in excess of $5,000, (xv) breaching
or defaulting under its agreements or obligations, (xvi) entering into or
amending any confidentiality agreement or any agreement or arrangement which
would impose a restriction on competition on RB&W, (xvii) subject to certain
exceptions, entering into or amending any material agreements, (xviii)
incurring, assuming or prepaying any material amount of indebtedness or making
loans, advances, guarantees or otherwise becoming liable or responsible for any
material obligations or liabilities of any other person, (xix) moving the
location of RB&W's main offices or any production facility, and (xx) agreeing to
take any of the foregoing actions.
NO SOLICITATION BY RB&W. The Restated Agreement provides that neither RB&W
nor its subsidiary, officers, directors, representatives or agents shall
solicit, initiate or participate in discussions with any third party with
respect to the sale of RB&W, except that RB&W may participate in negotiations or
furnish information if the Board determines, after consultation with its
counsel, that such action is required in the exercise of its fiduciary duties.
RB&W is required to inform Park-Ohio in writing if it receives any proposals or
requests for information from a third party and to provide a copy or summary of
any such proposal or request to Park-Ohio.
CONDUCT OF PARK-OHIO. The Restated Agreement provides that Park-Ohio shall
not issue, deliver or sell any additional shares of Common Stock (except
pursuant to existing benefit or other stock plans or in connection with certain
permitted acquisitions) where the effect would be to dilute the value of
Park-Ohio's Common Stock.
DIRECTORS OF PARK-OHIO. The Restated Agreement provides that after the
Merger Park-Ohio shall expand its Board and designate one member of the Board of
Directors of RB&W, willing to serve on the Park-Ohio Board, to fill the vacancy.
INDEMNIFICATION AND INSURANCE. Directors and officers of RB&W will
continue to have rights to indemnification for acts and omissions prior to the
Merger. Park-Ohio is obligated to make reasonable efforts to provide directors
and officers insurance for past acts and omissions.
STOCK OPTIONS. All outstanding RB&W stock options shall be exercised at or
prior to the Effective Time with the effect that each holder of each option
shall receive cash and Park-Ohio stock in exchange therefor as though such
holders had held shares of RB&W Common Stock.
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RB&W EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP"). The Restated Agreement
provides for the ESOP to be terminated. In accordance with a letter agreement
between RB&W and Park-Ohio dated December 1, 1994, RB&W may approve and accrue a
cash contribution to the ESOP for the year ended December 31, 1994, to be paid
by the Surviving Corporation to the ESOP not later than the last date upon which
a deduction for such contribution may be claimed on RB&W's 1994 federal income
tax return. The amount of the accrual shall be equal to the lesser of (i) 5% of
the 1994 "compensation" of all "active participants" (as such terms are defined
in the ESOP); or (ii) Six Hundred Forty Thousand Dollars ($640,000).
CONDITIONS
The respective obligations of Park-Ohio and POAC, on the one hand, and
RB&W, on the other hand, to consummate the Merger are conditioned upon, among
other things, (i) approval and authorization of the Restated Agreement and the
transactions contemplated thereby by the shareholders of Park-Ohio, RB&W, and
POAC, (ii) the effectiveness under the Securities Act of a registration
statement relating to the Park-Ohio Common Stock to be issued in connection with
the Merger and the absence of a stop order suspending such effectiveness, (iii)
no statute, rule, regulation, restraining order or injunction shall have been
issued or enacted by any governmental agency or regulatory body that would
prevent the consummation of the Merger, and (iv) all necessary consents,
authorizations and approvals shall have been obtained from all Governmental
Agencies and other third parties.
The obligation of Park-Ohio and POAC to consummate the Merger is further
conditioned upon, among other things, (i) the receipt of an opinion of counsel
for RB&W as to certain legal matters, (ii) the accuracy in all material respects
of the representations and warranties by RB&W in the Restated Agreement as of
the Closing Date, (iii) that since the date of the Restated Agreement, RB&W
shall not have suffered a material adverse change, (iv) that RB&W has complied
in all respects with all obligations and agreements to be performed or complied
with at or prior to the Closing Date, and (v) that RB&W Shareholders holding no
more than 5% of the outstanding shares of RB&W stock have perfected dissenters'
rights.
The obligation of RB&W to consummate the Merger is further conditioned
upon, among other things, (i) the receipt of an opinion of counsel for Park-Ohio
and POAC as to certain legal matters, (ii) the accuracy in all material respects
of the representations and warranties by Park-Ohio and POAC in the Restated
Agreement as of the Closing Date, (iii) that since the date of the Restated
Agreement, Park-Ohio shall not have suffered a material adverse change, (iv)
that Park-Ohio and POAC have complied in all material respects with all
obligations and agreements to be performed or complied with at or prior to the
Closing Date, and (v) the receipt of a fairness opinion from McDonald and
Company Securities, Inc.
WAIVER; AMENDMENT
Any condition to consummation of the Merger may be waived at any time by
the party for whose benefit such condition was created and the Restated
Agreement may be amended by written agreement of the parties.
TERMINATION
The Restated Agreement may be terminated (i) by RB&W if Park-Ohio or POAC
shall have failed, in any material respect, to perform their obligations under
the Restated Agreement, except for obtaining third party consents, and by
Park-Ohio and POAC if RB&W shall have failed, in any material respect, to
perform its obligations under the Restated Agreement, except for obtaining third
party consents; (ii) by RB&W on the one hand, or by Park-Ohio and POAC, on the
other hand, if the Closing Date has not occurred on or before March 31, 1995, or
if a third party consent is not obtained and the other party refuses to waive
the condition; (iii) by RB&W if it receives and accepts another bid for the sale
of RB&W ("a Third Party Offer") or enters into a "Third Party Acquisition"; (iv)
by RB&W or Park-Ohio if any requisite governmental consent has been denied and
all possible appeals of such denial have been taken and have been unsuccessful;
and (v) by RB&W or Park-Ohio if consummation of the Merger is enjoined by a
court of competent jurisdiction pursuant to a final, nonappealable order. The
Restated Agreement may also be terminated at any time by the mutual written
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consent of the parties. In the event of termination, the Restated Agreement
shall become void except that certain provisions relating to expenses shall
survive such termination.
EXPENSES
Except as set forth below, whether or not the Merger is consummated, all
costs and expenses incurred in connection with the Restated Agreement and the
transactions contemplated thereby shall be paid by the party incurring such
expense. The Restated Agreement provides that if the Restated Agreement is
terminated due to a material breach by either Park-Ohio or POAC, on the one
hand, or RB&W, on the other hand, then the defaulting party shall pay the
expenses of the non-defaulting party. In addition, the Restated Agreement
provides that if it is terminated by RB&W in the event of a Third Party Offer,
then RB&W shall pay the expenses incurred by Park-Ohio in connection with this
Restated Agreement in an amount not to exceed $1,000,000.
BREAKUP FEE
In the event that RB&W receives and accepts another bid for the sale of
RB&W or enters into a "Third Party Acquisition" prior to termination of the
Restated Agreement or within nine months thereafter, RB&W will pay to Park-Ohio,
within five business days following such event, a cash breakup fee equal to
$800,000. RB&W shall not be liable to Park-Ohio for the breakup fee, however, if
(i) Park-Ohio or POAC has failed, in any material respect, to perform or comply
with any of their obligations under the Restated Agreement or (ii) the Restated
Agreement is terminated due to the failure of the parties to obtain all
necessary consents, authorizations and approvals under the HSR Act and from all
Governmental Agencies which are required to consummate the transactions
contemplated thereby, unless the failure is due to the breach of RB&W of any of
its material obligations under the Restated Agreement. If RB&W Shareholders do
not approve the Restated Agreement and the Merger at the Special Meeting, RB&W
will have to pay the breakup fee and reimburse Park-Ohio for its expenses (up to
$1,000,000) if RB&W enters into a Third Party Acquisition within nine months of
the Special Meeting.
"Third Party Acquisition" means the occurrence of any of the following
events (whether in a single transaction or a series of related transactions):
(i) RB&W is acquired by merger or otherwise by any "person" other than Park-Ohio
or any affiliate thereof (a "Third Party"); (ii) a Third Party acquires more
than 50% of the total assets of RB&W and its subsidiaries taken as a whole;
(iii) a Third Party acquires (whether directly from RB&W or through open market
purchases, a tender offer, privately negotiated purchases or otherwise) more
than 50% of the outstanding RB&W Common Stock or other securities entitling such
person to exercise a majority of the total voting power of RB&W in the election
of directors; (iv) RB&W adopts and implements a plan of liquidation or declares
an extraordinary dividend or similar distribution relating to more than 50% of
its total assets; (v) RB&W or its subsidiary repurchases or otherwise acquires
(by means of a reverse stock split, subdivision, reclassification or combination
of Shares or otherwise) more than 50% of the outstanding RB&W Common Stock, or
(vi) RB&W or its Board of Directors withdraws its recommendation of the Merger
or fails to reaffirm such recommendation upon the request of Park-Ohio.
THE MERGER
DETERMINATION OF EXCHANGE RATIOS
For each share of RB&W Common Stock issued and outstanding or reserved for
issuance under outstanding stock options and warrants, $4.45 in cash and 0.33394
of a fully-paid, nonassessable share of Park-Ohio Common Stock will be issued;
provided, however, that the total number of shares of Park-Ohio Common Stock to
be issued in connection with the Restated Agreement shall in no event exceed Two
Million Two Hundred Forty-Eight Thousand Nine Hundred Forty-Two (2,248,942)
shares. For a discussion of the manner in which RB&W stock certificates are to
be exchanged for cash and Park-Ohio stock certificates, see "THE
MERGER -- Exchange of Certificates."
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ENVIRONMENTAL MATTERS
RB&W's manufacturing facilities, like those in the metal working industry
generally, are subject to numerous laws and regulations designed to protect the
environment. In general, RB&W believes that it is in substantial compliance with
the environmental laws and regulations to which its operations are subject, and
that, to the extent RB&W may not be in compliance with such requirements, such
noncompliance has not had a material adverse effect on RB&W. However, in view of
past manufacturing operations at facilities currently or previously owned by
RB&W, and in view of the fact that environmental laws can impose retroactive,
joint and several liabilities, there can be no assurance that RB&W will not
incur material environmental liabilities in the future. RB&W has been involved
in a number of projects assessing or correcting environmental conditions at
RB&W's current or former facilities. Although to date such projects have not
imposed material costs on RB&W, depending on the conditions which may be
discovered or the requirements which may be imposed, several of the sites could
individually or in the aggregate result in material environmental liabilities.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion, based on current law, of certain of
the expected federal income tax consequences applicable to the RB&W Shareholders
who receive cash and Park-Ohio Common Stock in exchange for RB&W Common Stock
pursuant to the Merger. This summary discusses only certain tax consequences to
United States persons (i.e., citizens or residents of the United States and
domestic corporations) who hold RB&W Common Stock as a capital asset. It does
not discuss the tax consequences to holders of options issued by RB&W who
exercise such options and receive cash and Park-Ohio Common Stock in exchange
for their RB&W Common Stock pursuant to the Merger, nor does it discuss the tax
consequences that might be relevant to shareholders who acquired their RB&W
Common Stock through the exercise of employee stock options or otherwise as
compensation. In addition, it does not discuss the tax consequences that might
be relevant to shareholders entitled to special treatment under the federal
income tax laws (such as Individual Retirement Accounts and other deferred
accounts, life insurance companies and tax exempt organizations) or to
shareholders who hold their shares in special circumstances (such as
shareholders that hold shares as part of a straddle or conversion transaction).
For federal income tax purposes, the Merger will be treated as though
Park-Ohio or POAC purchased the RB&W Common Stock directly from the RB&W
Shareholders. The receipt of cash and Park-Ohio Common Stock by an RB&W
Shareholder pursuant to the Merger will be a taxable transaction to such
Shareholder for federal income tax purposes. Each RB&W Shareholder will
recognize taxable gain or loss for federal income tax purposes equal to the
difference, if any, between the total amount of the cash plus the value of the
Park-Ohio Common Stock received pursuant to the Merger and the Shareholder's tax
basis in the RB&W Common Stock surrendered by such Shareholder in exchange
therefor. In general, such gain or loss will be capital gain or loss if such
RB&W shares are capital assets in the hands of such Shareholder at the time of
the exchange and will be long-term capital gain or loss if, at the time of the
exchange, such Shareholder's holding period for the RB&W shares exchanged is
greater than one year.
Under current law, net capital gains of individuals are taxed at a maximum
federal income tax rate of 28% and net capital gains of corporations are taxed
at the same federal income tax rates as ordinary income. With certain limited
exceptions for individuals, capital losses are deductible only against capital
gains and are not available to offset ordinary income.
Under federal income tax backup withholding rules, the Exchange Agent is
required to withhold and remit to the United States Treasury 31% of the gross
cash proceeds paid to a shareholder or other payee pursuant to the Merger,
unless an exception applies under the applicable law or regulations, or unless
the shareholder or other payee signs a Substitute Form W-9 that provides his or
her taxpayer identification number (employer identification number or Social
Security number) and certifies that such number is correct. Therefore, unless
such an exception exists and can be proved in a manner satisfactory to Park-Ohio
and the Exchange Agent, each Shareholder should complete and sign the Substitute
Form W-9 which will be included as part of the letter of transmittal from the
Exchange Agent to be used to surrender the RB&W Common Stock. The exceptions
provide that certain shareholders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a
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foreign individual to qualify as an exempt recipient, however, he or she must
submit a statement, signed under penalties of perjury, attesting to his or her
exempt status.
Any amounts withheld will be allowed as a credit against the shareholder's
federal income tax liability, or, in general, refunded by the Internal Revenue
Service assuming that the appropriate procedures are followed.
No ruling has been requested from the IRS as to any of the tax consequences
to the RB&W Shareholders of the transactions discussed in this Prospectus and
Joint Proxy Statement, and no opinion of counsel has or will be rendered to the
RB&W Shareholders with respect to any of the tax consequences of the Merger.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS BASED UPON CURRENT
LAW. BECAUSE EACH SHAREHOLDER'S TAX CIRCUMSTANCES MAY DIFFER, EACH SHAREHOLDER
MUST CONSULT HIS OWN TAX ADVISOR CONCERNING THE SPECIFIC TAX CONSEQUENCES OF THE
MERGER TO SUCH SHAREHOLDER, INCLUDING THE APPLICABILITY AND EFFECT OF STATE,
LOCAL AND OTHER TAX LAWS AND ANY PROPOSED CHANGES IN SUCH LAWS.
SECTION 382 LIMITATIONS
Each of Park-Ohio and RB&W has substantial federal income tax loss
carryforwards, which, subject to applicable limitations, are available to offset
future taxable income. In general, under Section 382 of the Code, the timing of
the use of Park-Ohio's and RB&W's tax loss carryforwards and "built-in losses,"
if any, would be affected in the event of an "ownership change" of more than 50%
of Park-Ohio's or RB&W's stock within a three-year period. The Merger will
result in such an "ownership change" with respect to RB&W and may result in such
a change with respect to Park-Ohio.
EXCHANGE OF CERTIFICATES
Upon consummation of the Merger, RB&W Shareholders will be asked to
exchange their stock certificates for cash and Park-Ohio Common Stock
certificates. After the Effective Time, Park-Ohio will mail a transmittal letter
to RB&W Shareholders for use in submitting their stock certificates in exchange
for cash to be received and certificates representing shares of Park-Ohio Common
Stock. RB&W SHAREHOLDERS SHOULD NOT SUBMIT THEIR STOCK CERTIFICATES UNTIL THEY
HAVE RECEIVED THE TRANSMITTAL LETTER.
Each share of Park-Ohio Common Stock into which RB&W Common Stock is
converted pursuant to the Merger will be deemed to have been issued at the
Effective Time. At the Effective Time, holders of certificates formerly
representing RB&W Common Stock will cease to have any rights as RB&W
Shareholders, except as otherwise provided by law, and will be entitled only to
exercise the rights of Park-Ohio Shareholders. Former RB&W Shareholders will be
entitled to receive all dividends and other distributions that may be declared
or payable to Park-Ohio Shareholders following the Effective Time and to
exercise all other rights of a Park-Ohio Shareholder after the Effective Time.
ACCOUNTING TREATMENT
The Merger, if completed as proposed, will be treated as a purchase for
accounting purposes. Accordingly, under generally accepted accounting
principles, the assets and liabilities of RB&W will be recorded on the books of
the Surviving Corporation, and will be reported in the consolidated financial
statements of Park-Ohio, at their respective fair market values at the time of
the consummation of the Merger.
OPINION OF RB&W'S FINANCIAL ADVISOR
OPINION OF MCDONALD & COMPANY SECURITIES, INC. McDonald & Company was retained
by RB&W to evaluate the fairness, from a financial point of view, to RB&W of the
consideration to be paid by Park-Ohio. On November 29, 1994, McDonald & Company
delivered to the Board of Directors of RB&W a written opinion (the "First
Opinion") to the effect that, as of that date and based upon and subject to
certain matters stated therein, the Exchange Ratio was fair, from a financial
point of view, to RB&W. On February 6, 1995, McDonald & Company delivered to the
Board of Directors of RB&W a written opinion (the "Second Opinion" and
collectively with the First Opinion, the "Opinions") to the effect that, as of
that date and
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subject to certain matters stated therein, that the consideration to be received
pursuant to the Restated Agreement is fair, from a financial point of view, to
RB&W Shareholders.
In arriving at its Opinions, McDonald & Company reviewed the financial
terms of the Original Agreement and the Restated Agreement and met with certain
senior officers, directors and other representatives and advisors of RB&W and
certain senior officers and other representatives and advisors of Park-Ohio to
discuss the business, operations and prospects of RB&W and Park-Ohio. McDonald &
Company examined certain publicly available business and financial information
relating to RB&W and Park-Ohio as well as certain financial forecasts and other
data for RB&W and Park-Ohio which were provided to McDonald & Company by RB&W
and Park-Ohio. McDonald & Company reviewed the financial terms of the Merger as
set forth in the Plan and Agreement of Merger in relation to, among other
things, current and historical market prices and trading volumes of RB&W Common
Stock; the earnings and book value per share of RB&W and Park-Ohio; and the
capitalization and financial condition of RB&W and Park-Ohio. McDonald & Company
also considered, to the extent publicly available, the financial terms of
certain other similar transactions recently effected which McDonald & Company
considered comparable to the Merger and analyzed certain financial, stock market
and other publicly available information relating to the businesses of other
companies whose operations McDonald & Company considered comparable to the
operations of RB&W and Park-Ohio. In addition to the foregoing, McDonald &
Company conducted such other analyses and examinations and considered such other
financial, economic and market criteria as McDonald & Company deemed necessary
to arrive at its Opinion. McDonald & Company noted that its Opinion was
necessarily based upon financial, stock market and other conditions and
circumstances existing and disclosed to McDonald & Company as of the date of its
Opinion.
In rendering its Opinions, McDonald & Company assumed and relied, without
independent verification, upon the accuracy and completeness of the financial
and other information publicly available or furnished to or otherwise discussed
with McDonald & Company. With respect to financial forecasts and other
information provided to or otherwise discussed with McDonald & Company, McDonald
& Company assumed that such forecasts and other information were reasonably
prepared on bases reflecting the best currently available estimates and
judgments of the respective managements of RB&W and Park-Ohio as to the expected
future financial performance of RB&W and Park-Ohio. McDonald & Company's
Opinions relate to the relative values of RB&W and Park-Ohio. McDonald & Company
did not express any opinion as to what the value of the Park-Ohio Common Stock
will be when issued to RB&W Shareholders pursuant to the Merger or the price at
which the Park-Ohio Common Stock will trade or otherwise be transferable
subsequent to the Merger. In addition, McDonald & Company did not make or obtain
an independent evaluation or appraisal of the assets or liabilities (contingent
or otherwise) of RB&W or Park-Ohio nor did McDonald & Company make any physical
inspection of the properties or assets of RB&W or Park-Ohio. McDonald & Company
was not asked to consider and its Opinions do not address the relative merits of
the Merger as compared to any alternative business strategies that might exist
for RB&W or the effect of any other transaction in which RB&W might engage. In
addition, although McDonald & Company evaluated the financial terms of the
Merger, McDonald & Company was not asked to and did not recommend the specific
consideration to be paid by Park-Ohio in the Merger. No other limitations were
imposed by RB&W on McDonald & Company with respect to the investigations made or
procedures followed by McDonald & Company in rendering its Opinions.
In rendering the Second Opinion McDonald & Company also reviewed and
analyzed the terms of a letter dated February 6, 1995 from TransTechnology to
RB&W pursuant to which TransTechnology offered to acquire RB&W in a two-step
process involving a cash tender offer for 81% of RB&W Common Stock followed by
an acquisition of the remaining shares via exchange for common stock of
TransTechnology with total aggregate consideration of approximately $9.00 per
share of RB&W Common Stock. The Second Opinion does not, however, address the
relative merits of the transaction contemplated pursuant to the Restated
Agreement as compared to the TransTechnology offer or any other alternative
business transaction that might be available to RB&W.
The full text of the Second Opinion of McDonald & Company, which sets forth
the assumptions made, matters considered and limitations on the review
undertaken, is attached as Appendix B to this Joint Proxy Statement. RB&W
Shareholders are urged to read the Second Opinion carefully in its entirety.
McDonald & Company's Second Opinion is directed only to the fairness of the
consideration from a financial point of view,
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does not address any other aspect of the Merger and does not constitute a
recommendation to any RB&W Shareholder or Park-Ohio Shareholder as to how such
holder should vote at the RB&W Special Meeting or the Park-Ohio Special Meeting,
as the case may be. The summary of the Second Opinion of McDonald & Company set
forth in this Prospectus and Joint Proxy Statement is qualified in its entirety
by reference to the full text of such Second Opinion.
In preparing its Opinions to the Board of Directors of RB&W, McDonald &
Company performed a variety of financial and comparative analyses, including
those described below. The summary of such analyses does not purport to be a
complete description of the analyses underlying McDonald & Company's Opinions.
The preparation of a fairness opinion is a complex analytic process involving
various determinations as to the most appropriate and relevant methods of
financial analyses and the application of those methods to the particular
circumstances and, therefore, such an opinion is not readily susceptible to
summary description. In arriving at its Opinions, McDonald & Company did not
attribute any particular weight to any analysis or factor considered by it, but
rather made qualitative judgments as to the significance and relevance of each
analysis and factor. Accordingly, McDonald & Company believes that its analyses
must be considered as a whole and selecting portions of its analyses and
factors, without considering all analyses and factors, could create a misleading
or incomplete view of the processes underlying such analyses and its Opinions.
In its analyses, McDonald & Company made numerous assumptions with respect to
RB&W and Park-Ohio, industry performance, general business, economic, market and
financial conditions and other matters, many of which are beyond the control of
RB&W and Park-Ohio. The estimates contained in such analyses are not necessarily
indicative of actual values or predictive of future results or values, which may
be significantly more or less favorable than those suggested by such analyses.
In addition, analyses relating to the value of businesses or securities do not
purport to be appraisals or to reflect the prices at which businesses or
securities actually may be sold. Accordingly, such analyses and estimates are
inherently subject to substantial uncertainty.
SELECTED COMPANIES ANALYSIS
McDonald & Company reviewed and compared selected actual and estimated
financial, operating and stock market information for RB&W and Park-Ohio in
comparison with (a) for RB&W: Chicago Rivet & Machine Company, Elco Industries,
Inc., Federal Screw Works, Inc., Hi-Shear Technology Corporation, Medalist
Industries, Inc., Penn Engineering & Manufacturing Corporation and SPS
Technology, Inc. (collectively, the "RB&W Selected Manufacturing Companies"),
and Arden Industrial Products, Inc., Barnes Group, Inc., Bearings Inc., Friedman
Industries, Inc. and Lawson Products, Inc. (collectively, the "RB&W Selected
Distribution Companies") and (b) for Park-Ohio: ABS Industries, Inc., Ameriwood
Industries International Corporation, Essef Corporation, Gehl Company, Walbro
Corporation and Wyman Gordon Company (collectively, the "Park-Ohio Selected
Companies"). Such analysis indicated that (A) leveraged market capitalization as
a multiple of latest twelve-month ("LTM") revenues, earnings before interest,
taxes, depreciation and amortization ("EBITDA") and earnings before interest and
taxes ("EBIT") (i) ranged from 0.4x to 2.6x, 3.7x to 7.1x and 4.6x to 12.2x,
respectively, with medians of 0.6x, 4.5x and 7.5x, for the RB&W Selected
Manufacturing Companies and from 0.3x to 1.5x, 6.6x to 10.1x and 8.8x to 13.2x,
respectively, with medians of 0.6x, 8.2x and 11.4x for the RB&W Selected
Distribution Companies, as compared to corresponding multiples for RB&W of 0.4x,
9.8x and 12.5x and (ii) ranged from 0.5x to 1.4x, 5.0x to 9.5x and 6.5x to
12.4x, respectively, with medians of 0.7x, 6.9x and 8.8x for the Park-Ohio
Selected Companies, as compared to corresponding multiples for Park-Ohio of
0.7x, 7.8x and 11.8x; (B) market price as a multiple of LTM earnings, estimates
of 1994 earnings and estimates of 1995 earnings (i) ranged from 5.9x to 66.4x,
10.2x to 18.0x and 9.5x to 11.3x, respectively, with medians of 9.7x, 14.1x and
10.4x, for the RB&W Selected Manufacturing Companies (based on consensus
analysts' earnings estimates) and from 12.9x to 21.1x, 13.5x to 18.4x and 11.1x
to 15.6x, respectively, with medians of 18.4x, 14.8x and 12.2x for the RB&W
Selected Distribution Companies as compared to corresponding multiples for RB&W
of 47.9x, 13.4x and 6.9x (based on management's estimates of fully-taxed 1994
and 1995 earnings and the closing price of RB&W Common Stock on October 18, 1994
of $6.375) and (ii) ranged from 8.8x to 16.9x, 7.9x to 13.9x and 6.3x to 29.8x,
respectively, with medians of 11.2x, 11.8x and 11.1x, for the Park-Ohio Selected
Companies (based on consensus analysts' earnings estimates) as compared to
corresponding multiples for Park-Ohio of 12.5x, 11.3x and 9.7x (based on
analysts' estimates) and 20.2x, 18.8x and 15.0x (based on fully-taxed historical
and estimated earnings and the closing price of Park-Ohio Common Stock on
October 18, 1994 of
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$14.125; and (C) market capitalizations as a multiple of book value as of the
latest available balance sheet data (i) ranged from 0.8x to 6.2x with a median
of 1.3x for the RB&W Selected Manufacturing Companies and from 1.2x to 2.6x with
a median of 2.3x for the RB&W Selected Distribution Companies, as compared to
the corresponding multiple of 1.8x for RB&W and (ii) ranged from 0.9x to 6.9x
with a median of 1.3x for the Park-Ohio Selected Companies, as compared to the
corresponding multiple of 5.5x for Park-Ohio.
No company, transaction or business used in the selected company and
selected transactions analyses as a comparison is identical to RB&W, Park-Ohio
or the Merger. Accordingly, an analysis of the results of the foregoing is not
entirely mathematical; rather, it involves complex considerations and judgments
concerning differences in financial and operating characteristics and other
factors that could affect the acquisition or public trading value of the
comparable companies or the business segment or company to which they are being
compared.
SELECTED TRANSACTIONS ANALYSIS
McDonald & Company reviewed and analyzed selected financial and operating
information relating to nine transactions involving industrial companies since
May 1990. Such analyses indicated that based on the closing prices of RB&W
Common Stock and Park-Ohio Common Stock of $6.375 and $14.125 as of October 18,
1994, respectively, aggregate levered consideration of these transactions as a
multiple of LTM sales, EBIT and EBITDA ranged from 0.3x to 2.3x, 5.7x to 32.1x
and 3.8x to 22.4x, respectively, with medians of 0.6x, 10.0x and 12.7x,
respectively, and averages of 0.7x, 14.3x and 12.1x, respectively, as compared
to corresponding multiples of (i) 0.5x, 20.0x and 13.6x, respectively, based on
RB&W's 1993 financial results, (ii) 0.5x, 14.0x and 10.6x respectively, based on
management's estimates of RB&W's 1994 financial results and (iii) 0.5x, 8.5x,
and 6.9x, respectively, based on management's estimates of RB&W's 1995 financial
performance.
PRO FORMA MERGER ANALYSIS
McDonald & Company reviewed certain financial information (including
estimates of potential synergies and cost savings) for the pro forma combined
entity resulting from the Merger based on internal financial analyses and
forecasts for RB&W and Park-Ohio prepared by their respective managements. Such
analysis indicated that, based on the Exchange Ratio and based on management's
earnings estimates, the Merger would be dilutive to Park-Ohio's earnings per
share in 1994, but accretive in 1995 and 1996 so long as the estimated cost
savings and synergies were realized in the amounts and at the times estimated.
CONTRIBUTION ANALYSIS
McDonald & Company reviewed certain historical and estimated future
operating and financial information (including, among other things, sales,
EBITDA and pretax income) for RB&W, Park-Ohio and the pro forma combined entity
resulting from the Merger. Such analysis indicated that RB&W's contribution to
sales, EBITDA and pretax income of the pro forma combined entity resulting from
the Merger would have been (i) 54.5%, 37.1% and 15.8%, based on 1993 financial
results for each of RB&W and Park-Ohio, (ii) would be 45.4%, 32.4% and 28.9%
based on 1994 estimates of financial performance for each of RB&W and Park-Ohio
prepared by their respective managements and (iii) would be 45.8%, 38.5% and
37.9% based on 1995 estimates of financial performance for each of RB&W and
Park-Ohio prepared by their respective managements. In addition, based on the
price of RB&W and Park-Ohio Common Stock of $6.375 and $14.125, respectively, at
October 18, 1994, RB&W's market capitalization and levered market capitalization
represented 22.0% and 29.0%, respectively, of the combined market capitalization
and levered market capitalization of RB&W and Park-Ohio.
HISTORICAL STOCK TRADING ANALYSIS
McDonald & Company reviewed and compared the historical stock price
performance of each of RB&W and Park-Ohio. This analysis showed that during the
period from October 1, 1992 through October 19, 1994, RB&W Common Stock traded
at a low price of $2.50 and a high price of $7.125 and that for the same time
period, Park-Ohio Common Stock traded at a low price of $3.375 and high price of
$18.00. The Common
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Stock of both RB&W and Park-Ohio outperformed their respective Selected
Companies groups and S&P 500 Index for that period.
OTHER ANALYSIS
McDonald & Company analyzed available information regarding current
institutional holdings of RB&W and Park-Ohio and pro forma institutional
holdings of common stock of the pro forma combined entity resulting from the
Merger.
Pursuant to the terms of McDonald & Company's engagement, RB&W has agreed
to pay McDonald and Company a fee of $125,000, payable upon the delivery of the
Opinions. RB&W also has agreed to indemnify McDonald & Company and related
persons against certain liabilities, including liabilities under the federal
securities laws, arising out of McDonald & Company's engagement.
McDonald & Company has advised RB&W that, in the ordinary course of
business, it may actively trade the equity securities of RB&W for its own
account or for the account of its customers, and accordingly, may at any time
hold a long or short position on such securities.
McDonald & Company is a nationally recognized investment banking firm and
was selected by RB&W based on McDonald & Company's experience and expertise.
McDonald & Company regularly engages in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive bids, secondary distributions of listed and unlisted
securities, private placements and valuations for estate, corporate and other
purposes.
RB&W STOCK OPTIONS AND WARRANTS
OPTIONS. Non-qualified stock options have been granted to certain RB&W
employees under plans adopted by RB&W. Such options are or will be exercisable
at prices equal to the market price of RB&W's Common Stock at the grant dates.
As of February 1, 1995, options for 371,000 shares of RB&W Common Stock were
outstanding and are or will be exercisable prior to the Effective Time.
WARRANTS. As of February 1, 1995, Metropolitan Life Insurance Company held
warrants to purchase 333,334 shares of RB&W Common Stock at a purchase price of
$6.00 per share through December 31, 1999.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
DIRECTORS AND OFFICERS. The officers of RB&W immediately prior to the
consummation of the Merger shall become the officers of the surviving entity.
The directors of RB&W shall resign as of the consummation of the Merger, and
Edward F. Crawford, James S. Walker, and Ronald J. Cozean, the directors of
POAC, shall become the directors of the surviving entity.
Under the provisions of the Restated Agreement, immediately following the
consummation of the Merger, RB&W shall have the right to submit to Park-Ohio the
names of members of the RB&W Board who are willing to serve as directors of
Park-Ohio. In the event RB&W submits such a list, Park-Ohio shall expand the
size of its board of directors by one position and shall select one person from
the list submitted by RB&W to fill the newly-created position.
SEVERANCE ARRANGEMENTS. Certain of the executive officers of RB&W have
interests in the Merger as a result of employment agreements which they have
entered into with RB&W. These employment agreements contain certain provisions
which are activated upon a "change of control" of RB&W. In the event any such
executive officer is terminated during the period specified in the applicable
employment agreement, which period is no more than one year after the
consummation of the Merger, such officer would be entitled to compensation for
salary for such period. The maximum aggregate value of the compensation for
salary under the severance provisions for the three executive officers who have
employment agreements is approximately $525,000. This value was determined based
on the assumption that all such executive officers' employment would be
terminated and that they would be entitled to the payment as of the Effective
Time. It is unlikely that all such executive officers would be terminated.
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INDEMNIFICATION. Except as may be limited by applicable law, Park-Ohio has
agreed to assume and honor the terms of the indemnification provisions contained
in the charter and bylaws of each of RB&W and its subsidiary, with respect to
any actions or omissions occurring prior to the Effective Time. Park-Ohio is
obligated to make reasonable efforts to provide directors and officers insurance
for past acts and omissions.
RESALES OF PARK-OHIO COMMON STOCK RECEIVED IN THE MERGER
All shares of Park-Ohio Common Stock received by RB&W Shareholders in the
Merger will have been registered under the Securities Act and will be freely
transferable, except for shares of Park-Ohio Common Stock received by persons,
including directors and executive officers of RB&W, who may be deemed to be
"affiliates" of RB&W, as that term is defined in Rule 145 promulgated under the
Rules and Regulations of the Securities Act (or Rule 144 in the case of such
persons who become affiliates of Park-Ohio).
Affiliates may not sell, pledge, transfer or otherwise dispose of the
shares of Park-Ohio Common Stock issued to them in exchange for their shares of
RB&W Common Stock, unless the requirements of Rule 145(d) are satisfied or the
sale, pledge, transfer, or disposition is otherwise in compliance with the
Securities Act and the rules and regulations promulgated thereunder. Generally,
under Rule 145(d) an affiliate of RB&W will be permitted to sell, pledge,
transfer or otherwise dispose of his or her shares of Park-Ohio Common Stock
received pursuant to the Merger if either of the following is satisfied:
(a) The shares are sold in "brokers' transactions" or in transactions
directly with a "market maker," the affiliate does not solicit or arrange for
the solicitation of purchase orders or make any payments in connection with the
sale to anyone other than the broker or market maker, the number of shares sold,
together with all other sales of Park-Ohio Common Stock of such affiliate within
the preceding three months, does not exceed one percent of the outstanding
shares of Park-Ohio Common Stock, and there is publicly available certain
information regarding Park-Ohio; or
(b) The affiliate is not or does not become an affiliate of Park-Ohio and
has been the beneficial owner of the Park-Ohio Common Stock for at least two
years, and there is publicly available certain information regarding Park-Ohio.
THIS IS INTENDED AS A GENERAL STATEMENT OF THE RESTRICTIONS ON THE
DISPOSITION OF THE SHARES OF PARK-OHIO COMMON STOCK TO BE ISSUED IN THE MERGER;
THOSE SHAREHOLDERS OF RB&W WHO MAY BE AFFILIATES OF RB&W SHOULD CONSULT LEGAL
COUNSEL WITH RESPECT TO THESE RESALE RESTRICTIONS.
This Prospectus and Joint Proxy Statement does not cover any reoffers or
resales of Park-Ohio Common Stock received by affiliates of RB&W.
RIGHTS OF DISSENTING SHAREHOLDERS
RIGHTS OF PARK-OHIO SHAREHOLDERS
Park-Ohio Shareholders who so desire are entitled to relief as dissenting
shareholders under Section 1701.84 of the Ohio Revised Code. Any such dissenting
Shareholder (a "Dissenting Shareholder") may have the "fair cash value" of his
shares of Park-Ohio Common Stock judicially determined and paid to him, but only
if he strictly complies with the requirements of Section 1701.85 of the Ohio
Revised Code, a copy of which is attached hereto as Appendix C.
Set forth below is a summary of the procedures relating to the exercise of
a shareholder's rights to relief as a dissenting shareholder ("Dissenters'
Rights"), which summary does not purport to be complete and is qualified in its
entirety by express reference to Section 1701.85 of the Ohio Revised Code. Any
Park-Ohio Shareholder contemplating exercising Dissenters' Rights with respect
to his or her shares ("Dissenting Shares") is urged to review carefully such
provisions since Dissenters' Rights will be lost if the procedural requirements
of Section 1701.85 are not fully and precisely satisfied.
To perfect his Dissenters' Rights, a Dissenting Shareholder must satisfy
each of the following conditions:
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(a) Shareholder as of the Record Date. The Dissenting Shareholder must
have been a record holder of the Park-Ohio Common Stock as to which he seeks
relief as of the date fixed for the determination of shareholders entitled to
notice of the Park-Ohio Special Meeting.
(b) No Vote in Favor of the Acquisition. Dissenting Shares must not be
voted in favor of the proposal. This requirement will be satisfied (1) if a
proxy is signed and returned with instructions to vote against the proposal or
to abstain, (2) if no proxy is returned, or (3) if Dissenting Shares are voted
at the Annual Meeting against approval and authorization of the proposal. A vote
in favor of the proposal constitutes a waiver of Dissenters' Rights. A proxy
that is returned signed but on which no voting preference is indicated will be
voted for the approval and authorization of the proposal and will be deemed a
waiver of Dissenters' Rights. A Dissenting Shareholder may revoke his proxy at
any time before its exercise by filing with the Secretary of Park-Ohio an
instrument revoking it or a duly executed proxy bearing a later date, or by
attending the Annual Meeting and voting thereat.
(c) Filing Written Demand. Not later than ten days after the Park-Ohio
Special Meeting, a Dissenting Shareholder must deliver to Park-Ohio a written
demand (the "Demand") for payment of the fair cash value of the Dissenting
Shares. The Demand should be delivered to Park-Ohio at 600 Tower East, 20600
Chagrin Boulevard, Cleveland, Ohio 44122, Attention: Ronald J. Cozean, and it is
recommended, although not required, that the Demand be sent by registered or
certified mail, return receipt requested. A vote against the proposal does not
itself satisfy the requirements of a written demand for payment, and therefore
does not constitute a Demand.
The Demand must reasonably identify the holder of record of the Dissenting
Shares and the Dissenting Shareholder's address, the number of the Dissenting
Shares and the amount claimed as the fair cash value thereof. A beneficial owner
must, in all cases, have the record holder submit the Demand in respect of his
Dissenting Shares.
From the time the Demand is given, all rights accruing from the Dissenting
Shares, including voting and dividend rights, will be suspended until either the
termination of the rights and obligations under such Demand or the purchase of
such Dissenting Shares by Park-Ohio. If any dividend is paid on the Dissenting
Shares during the suspension, an amount equal to the dividend which would have
been payable on the Dissenting Shares, except for such suspension, shall be paid
to the holder of record of any Dissenting Shares as a credit to the fair cash
value of such Dissenting Shares. If the right to receive fair cash value is
terminated otherwise than by the purchase of the Dissenting Shares by Park-Ohio,
all rights will be restored to the Dissenting Shareholder and any distribution
that would have been made to the holder of record of the Dissenting Shares, but
for the suspension, will be made at the time of the termination.
(d) Endorsement of Certificates. After receiving the Demand, Park-Ohio may
request in writing that the Dissenting Shareholder deliver to it the
certificates representing the Dissenting Shares. The Dissenting Shareholder must
then deliver such certificates to Park-Ohio at the address stated above, within
fifteen days of the sending of such request, to permit Park-Ohio to place a
legend on such certificates, stating that a demand for fair cash value of such
Dissenting Shares has been made, and return them promptly to the Dissenting
Shareholder. Failure of a Dissenting Shareholder to deliver certificates upon
the request of Park-Ohio terminates his rights as a Dissenting Shareholder at
the option of Park-Ohio unless a court directs otherwise. If the Dissenting
Shares represented by a certificate bearing such legend are transferred, a
transferee acquires only the rights which were held by the original Dissenting
Shareholder immediately after the delivery of the Demand.
If the Dissenting Shareholder and Park-Ohio do not reach an agreement on
the fair cash value of the Dissenting Shares, either may, within three months
after the service of the Demand, file a petition in the Court of Common Pleas of
Cuyahoga County, Ohio, or join or be joined in an action similarly brought by
another Dissenting Shareholder of Park-Ohio for a judicial determination of the
fair cash value of the Dissenting Shares. If the Court finds that the Dissenting
Shareholder is entitled to be paid the fair cash value of any shares, the court
may appoint one or more appraisers to recommend the amount of such value.
Payment of the fair cash value of the Dissenting Shares shall be made within 30
days after the date of final determination of such value.
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Fair cash value is the amount which a willing seller, under no compulsion
to sell, would be willing to accept, and which a willing buyer, under no
compulsion to purchase, would be willing to pay, but in no event may the fair
cash value exceed the amount specified in the Demand. The fair cash value is to
be determined as of the day prior to the day of the Park-Ohio Special Meeting.
In computing this value, any appreciation or depreciation in the market value of
the Dissenting Shares resulting from the accomplishment or expectation of the
Merger is excluded.
The Dissenters' Rights of any Dissenting Shareholder will terminate if,
among other things, (a) he or she has not complied with Section 1701.85 (unless
Park-Ohio waives compliance); (b) the Merger is abandoned or otherwise not
carried out; (c) he or she withdraws his or her demand (with the consent of
Park-Ohio); or (d) no agreement has been reached between Park-Ohio and such
Dissenting Shareholder with respect to the fair cash value of the Dissenting
Shares and no petition has been timely filed in the Court of Common Pleas of
Cuyahoga County, Ohio. For a discussion of the tax consequences to a Park-Ohio
Shareholder exercising Dissenter's Rights, see "TERMS OF MERGER -- Certain
Federal Income Tax Consequences."
RIGHTS OF RB&W SHAREHOLDERS
Holders of RB&W Common Stock are entitled to appraisal rights under Section
262 ("Section 262") of the Delaware General Corporation Law ("DGCL"), provided
that they comply with the conditions established by Section 262. Section 262 is
reprinted in its entirety as Appendix D to the Prospectus and Joint Proxy
Statement. The following discussion is not a complete statement of the law
relating to appraisal rights and is qualified in its entirety by reference to
Appendix D. This discussion and Appendix D should be reviewed carefully by any
RB&W Shareholder who wishes to exercise statutory appraisal rights or who wishes
to preserve the right to do so, since failure to comply with the procedures set
forth herein or therein will result in the loss of appraisal rights.
RB&W Shareholders of record who desire to exercise their appraisal rights
must:
- hold RB&W Common Stock on the date of making a demand for appraisal;
- make a written demand for appraisal prior to the vote on the Merger by
RB&W Shareholders;
- continuously hold such shares through the Effective Time;
- not vote in favor of the Merger or consent thereto in writing;
- file any necessary petition in the Delaware Court of Chancery (the
"Delaware Court"), as more fully described below, within 120 days after
the Effective Time; and
- otherwise satisfy all the conditions described more fully below.
A record holder of RB&W Common Stock who makes the demand described below
with respect to such shares, who continuously is the record holder of such
shares through the Effective Time, who otherwise complies with the statutory
requirements of Section 262 and who neither votes in favor of the requirements
of Section 262 and who neither votes in favor of the Merger nor consents thereto
in writing will be entitled to an appraisal by the Delaware Court of the fair
value of his RB&W Common Stock. All references in Section 262 and in this
summary of appraisal rights to a "RB&W Shareholder" or "holders" of shares are
to the record holder or holders of RB&W Common Stock.
Holders of RB&W Common Stock who desire to exercise their appraisal rights
must deliver a separate written demand for appraisal to RB&W prior to the vote
by the RB&W Shareholders on the Merger. A demand for appraisal must be executed
by or on behalf of the holder of record, fully and correctly, as such holder's
name appears on the certificate or certificates representing RB&W Common Stock.
A person having a beneficial interest in RB&W Common Stock that is of record in
the name of another person, such as a broker, fiduciary or other nominee, must
act promptly to cause the record holder to follow the steps summarized herein
properly and in a timely manner to perfect whatever appraisal rights are
available. If RB&W Common Stock is owned of record by a person other than the
beneficial owner, including a broker, fiduciary (such as a trustee, guardian or
custodian) or other nominee, such demand must be executed by or for the record
owner. If RB&W Common Stock is owned of record by more than one person, as in a
joint tenancy
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<PAGE> 45
or tenancy in common, such demand must be executed by or for all joint owners.
An authorized agent, including an agent for two or more joint owners, may
execute the demand for appraisal for a stockholder of record; however, the agent
must identify the record owner and expressly disclose the fact that, in
exercising the demand, such person is acting as agent for the record owner.
A record owner, such as a broker, fiduciary or other nominee, who holds
RB&W Common Stock as a nominee for others, may exercise appraisal rights with
respect to the shares held for all or less than all beneficial owners of shares
as to which such person is the record owner. In such case, the written demand
must set forth the number of shares covered by such demand. Where the number of
shares is not expressly stated, the demand will be presumed to cover all RB&W
Common Stock outstanding in the name of such record owner.
A RB&W Shareholder who elects to exercise appraisal rights should mail or
deliver his or her written demand to: 23001 Euclid Avenue, Cleveland, Ohio
44117, Attention: Secretary. The written demand for appraisal should specify the
RB&W Shareholder's name and mailing address, the number of shares of RB&W Common
Stock owned, and that the holder is thereby demanding appraisal of his or her
shares. A proxy or vote against the Merger will not constitute such a demand.
Within ten days after the Effective Time, the Surviving Corporation must provide
notice to all holders who have complied with Section 262 that the Merger has
become effective.
Within 120 days after the Effective Time, RB&W, as the Surviving
Corporation, or any holder who has complied with the required conditions of
Section 262 may file a petition in the Delaware Court, with a copy served on the
Surviving Corporation in the case of a petition filed by a holder, demanding a
determination of the fair value of the shares of all dissenting holders. The
Surviving Corporation does not presently intend to file an appraisal petition
and holders seeking to exercise appraisal rights should not assume that the
Surviving Corporation will file such a petition or that the Surviving
Corporation will initiate any negotiations with respect to the fair value of
such shares. Accordingly, RB&W Shareholders who desire to have their shares
appraised should initiate any petitions necessary for the perfection of their
appraisal rights within the time periods and in the manner prescribed in Section
262. Within 120 days after the Effective Time, any RB&W Shareholder who has
theretofore complied with the applicable provisions of Section 262 will be
entitled, upon written request, to receive from the Surviving Corporation a
statement setting forth the aggregate number of shares of RB&W Common Stock not
voted in favor of the Merger and with respect to which demands for appraisal
were received by RB&W and the number of holders of such shares. Such statement
must be mailed within 10 days after the written request therefor has been
received by the Surviving Corporation or within 10 days after expiration of the
time for delivery of demands for appraisal under Section 262, whichever is
later.
If a petition for an appraisal is timely filed, at the hearing on such
petition, the Delaware Court will determine which holders are entitled to
appraisal rights and will appraise RB&W Common Stock owned by such holders,
determining the fair value of such shares exclusive of any element of value
arising from the accomplishment or expectation of the Merger, together with a
fair rate of interest, if any, to be paid upon the amount determined to be the
fair value. In determining fair value, the Delaware Court is to take into
account all relevant factors. In Weinberger v. UOP Inc., the Delaware Supreme
Court discussed the factors that could be considered in determining fair value
in an appraisal proceeding, stating that "proof of value by any techniques or
methods which are generally considered acceptable in the financial community and
otherwise admissible in court" should be considered, and that "fair price
obviously requires consideration of all relevant factors involving the value of
a company." The Delaware Supreme Court stated that in making this determination
of fair value the court must consider market value, asset value, dividends,
earning prospects, the nature of the enterprise and any other facts which could
be ascertained as of the date of the merger which throw light on future
prospects of the merged corporation. In Weinberger, the Delaware Supreme Court
stated that "elements of future value, including the nature of the enterprise,
which are known or susceptible of proof as of the date of the merger and not the
product of speculation, may be considered." Section 262, however, provides that
fair value is to be "exclusive of any element of value arising from the
accomplishment or expectation of the merger."
RB&W Shareholders considering seeking appraisal should recognize that the
fair value of their shares determined under Section 262 could be more than, the
same as or less than the consideration they are to
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<PAGE> 46
receive pursuant to the Merger Agreement if they do not seek appraisal of their
shares. The cost of the appraisal proceeding may be determined by the Delaware
Court and taxed against the parties as the Delaware Court deems equitable in the
circumstances. Upon application of a dissenting RB&W Shareholder, the Delaware
Court may order that all or a portion of the expenses incurred by any dissenting
holder in connection with the appraisal proceeding, including without limitation
reasonable attorney's fees and the fees and expenses of experts, be charged pro
rata against the value of all shares entitled to appraisal.
Any holder of RB&W Common Stock who has duly demanded appraisal in
compliance with Section 262 will not, after the Effective Time, be entitled to
vote for any purpose any shares subject to such demand or to receive payment of
dividends or other distributions on such shares, except for dividends or
distributions payable to stockholders of record at a date prior to the Effective
Time.
At any time within 60 days after the Effective Time, any RB&W Shareholder
will have the right to withdraw such demand for appraisal and to accept the
terms offered in the Merger. After this period, such shareholder may withdraw
such demand for appraisal only with the consent of the Surviving Corporation. If
no petition for appraisal is filed with the Delaware Court within 120 days after
the Effective Time, holders' rights to appraisal shall cease, and all holders of
RB&W Common Stock will be entitled to receive the consideration offered pursuant
to the Merger Agreement. Inasmuch as the Surviving Corporation has no obligation
to file such a petition and has no present intention to do so, any holder of
RB&W Common Stock who desires such a petition to be filed is advised to file it
on a timely basis.
33
<PAGE> 47
Pro Forma Condensed
Combined Financial Statements
PARK-OHIO INDUSTRIES, INC.
September 30, 1994
34
<PAGE> 48
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS -- (UNAUDITED)
The following unaudited pro forma condensed combined financial statements
reflect the acquisition of RB&W by Park-Ohio through the issuance of 2,248,942
shares of Common Stock ($13.625 per share market value as of February 6, 1995)
and cash of $29,969,000 in a transaction accounted for as a purchase. Historical
financial data of Park-Ohio and RB&W included in the following data have been
taken from the financial statements and other financial information of Park-Ohio
and RB&W incorporated herein by reference. The pro forma condensed combined
balance sheet includes the unaudited historical accounts of Park-Ohio and RB&W
as of September 30, 1994 and the related pro forma condensed combined statements
of income for the nine months ended September 30, 1994, and for the year ended
December 31, 1993, include the historical financial data of Park-Ohio and RB&W.
The pro forma information presented below is not necessarily indicative of the
results which actually would have been obtained if the Merger had been
consummated in the past or which may be obtained in the future.
The pro forma condensed combined financial statements should be read in
conjunction with the historical consolidated financial statements and notes
thereto of Park-Ohio and RB&W incorporated by reference herein.
35
<PAGE> 49
<TABLE>
PARK-OHIO INDUSTRIES, INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEET -- (UNAUDITED)
SEPTEMBER 30, 1994
<CAPTION>
PRO-FORMA
PARK-OHIO RB&W ADJUSTMENTS(B) ELIMINATIONS CONSOLIDATED
-------- ------- -------------- ------------ ------------
(In Thousands)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents........ $ 975 $ 719 $ 1,694
Accounts receivable......... 28,149 27,265 55,414
Inventories................. 20,219 31,699 51,918
Prepaid expenses............ 1,354 6,000 $ (5,000) 2,354
-------- ------- -------- --------
TOTAL CURRENT ASSETS.......... 50,697 65,683 (5,000) 111,380
Property, plant and
equipment................... 109,262 21,952 $(15,724) 115,490
Less accumulated
depreciation................ 61,857 15,724 15,724 61,857
-------- ------- -------- -------- --------
47,405 6,228 0 53,633
Excess purchase price over net
assets acquired............. 15,790 59,741 (23,705) 51,826
Other assets.................. 8,241 8,472 8,000 24,713
-------- ------- -------- -------- --------
$122,133 $80,383 $ 62,741 $(23,705) $241,552
======== ======= ======== ======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Trade accounts payable and
accrued expenses......... $ 22,898 $22,901 $ 1,000 $ 46,799
Current portion of long-term
liabilities.............. 1,981 1,127 3,108
-------- ------- -------- -------- --------
TOTAL CURRENT LIABILITIES..... 24,879 24,028 1,000 49,907
Long-term debt................ 24,903 26,976 26,399 78,278
Other postemployment
benefits.................... 28,388 3,610 31,998
Other......................... 1,682 2,064 5,000 8,746
-------- ------- -------- -------- --------
54,973 32,650 31,399 119,022
SHAREHOLDERS' EQUITY
Common stock.................. 8,194 5,941 2,249 $ (5,941) 10,443
Additional paid-in capital.... 26,186 15,199 28,093 (15,199) 54,279
Retained earnings............. 7,901 2,673 -- (2,673) 7,901
Minimum pension liability..... (33) -- 33 0
Foreign currency
translation................. (75) -- 75 0
-------- ------- -------- -------- --------
TOTAL SHAREHOLDERS' EQUITY.... 42,281 23,705 30,342 (23,705) 72,623
-------- ------- -------- -------- --------
$122,133 $80,383 $ 62,741 $(23,705) $241,552
======== ======= ======== ======== ========
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
36
<PAGE> 50
PARK-OHIO INDUSTRIES, INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME -- (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
PRO-FORMA PRO-FORMA
PARK-OHIO RB&W ADJUSTMENTS(B) COMBINED
--------- -------- -------------- ---------
(In Thousands, Except Per Share Data)
<S> <C> <C> <C> <C>
Net sales............................. $145,865 $127,322 $273,187
Costs and expenses:
Cost of products sold............... 120,940 109,487 230,427
Selling, general and
administrative................... 15,323 13,015 $ 1,350 29,688
Interest expense.................... 1,441 1,544 1,400 4,385
--------- -------- -------------- ---------
137,704 124,046 2,750 264,500
--------- -------- -------------- ---------
INCOME BEFORE INCOME TAXES............ 8,161 3,276 (2,750) 8,687
Federal and foreign income taxes...... 110 380 490
--------- -------- -------------- ---------
NET INCOME............................ $ 8,051 $ 2,896 $ (2,750) $ 8,197
========= ======== ============== ==========
NET INCOME PER COMMON SHARE........... $ 0.97 $ 0.48
========= ========
PRO FORMA NET INCOME PER COMMON
SHARE............................... $ 0.77
==========
COMMON SHARES USED IN THE COMPUTATION
(C)................................. 7,995 6,074 2,249 10,244
========= ======== ============== ==========
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
37
<PAGE> 51
<TABLE>
PARK-OHIO INDUSTRIES, INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME -- (UNAUDITED)
YEAR ENDED DECEMBER 31, 1993
<CAPTION>
PRO-FORMA
PARK-OHIO RB&W ADJUSTMENTS(B) CONSOLIDATED
--------- -------- -------------- ------------
(In Thousands, Except Per Share Data)
<S> <C> <C> <C> <C>
Net sales............................ $147,168 $176,603 $323,771
Costs and expenses:
Cost of products sold.............. 121,799 154,108 275,907
Selling, general and
administrative.................. 17,854 16,164 1,750 35,768
Interest expense................... 1,242 3,163 1,650 6,055
Other expense, net................. 1,988 1,988
-------- -------- -------- --------
140,895 175,423 3,400 319,718
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES........... 6,273 1,180 (3,400) 4,053
Federal and foreign income taxes..... 242 503 745
-------- -------- -------- --------
NET INCOME........................... $ 6,031 $ 677 (3,400) $ 3,308
======== ======== ======== ========
NET INCOME PER COMMON SHARE.......... $ 0.90 0.11
PRO FORMA NET INCOME PER COMMON
SHARE.............................. $ 0.37
COMMON SHARES USED IN THE COMPUTATION
(C)................................ 6,642 5,907 2,249 8,891
======== ======== ======== ========
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
38
<PAGE> 52
PARK-OHIO INDUSTRIES, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
NOTE A
The Pro Forma Condensed Combined Balance Sheet (Unaudited) reflects the
issuance of 2,248,942 shares of Park-Ohio Common Stock ($13.625 market value per
share at February 6, 1995, total of $30,642,000) and cash of $29,969,000 ($4.45
per share) less proceeds of $3,570,000 from the assumed exercise of outstanding
options and warrants of RB&W, in exchange for all of the outstanding shares of
RB&W Common Stock (6,023,135) and common shares issuable upon exercise of
outstanding options and warrants of RB&W (704,334). This assumes an exchange
ratio of .33394 shares of Park-Ohio Common Stock for each share of RB&W.
The net cash portion of the Merger ($26,399,000) will be financed under
Park-Ohio's existing long-term credit facility with Society National Bank, which
carries interest at one quarter percent over the bank's prime lending rate.
NOTE B
The transaction will be accounted for as a purchase. The following purchase
accounting adjustments were recorded in the accompanying pro forma condensed
combined financial statements, which results in an excess purchase price over
historical cost of $36,036,000, which will be amortized over twenty-five years:
- A $5,000,000 reduction in prepaid tooling and manufacturing supplies of
RB&W to conform RB&W's accounting policy for these items to Park-Ohio's.
- Adjustment of $3,000,000 to RB&W's valuation allowance for deferred tax
assets to reflect the anticipated benefit from the use of a portion of
RB&W's operating loss carryforwards.
- Recognition of RB&W's prepaid pension expense of $5,000,000 reflecting
the fair market value of aggregate pension plan assets in excess of
projected benefit obligations.
- Additional accruals, based on Park-Ohio's estimate, for possible
environmental exposures and product liability matters of $3,000,000 and
$2,000,000, respectively.
The Pro Forma Condensed Combined Balance Sheet (Unaudited) reflects a
$1,000,000 liability for expenses to be incurred in connection with the Merger.
The Pro Forma Condensed Combined Income Statement (Unaudited) reflects
additional interest expense under the credit facility ($1,400,000 for the nine
months ended September 30, 1994 and $1,650,000 for the year ended December 31,
1993) and additional amortization on a straight line basis over twenty-five
years for goodwill arising from the Merger ($1,100,000 for the nine months ended
September 30, 1994 and $1,415,000 for the year ended December 31, 1993) and
amortization on a straight line basis over fifteen years of the prepaid pension
expense ($250,000 for the nine months ended September 30, 1994 and $335,000 for
the year ended December 31, 1993).
Based upon Park-Ohio management's analysis of RB&W's property, plant and
equipment, historical net book value approximates fair market value.
NOTE C
Net Income Per Common Share for Park-Ohio and RB&W is based on the average
number of common shares outstanding and assumes the exercise of outstanding
dilutive stock options and, for Park-Ohio only, is also based on issuance of
additional shares subject to certain earn-out provisions of previous
acquisitions of Park-Ohio after adjusting results of operations for preferred
stock dividend requirements.
Pro forma weighted average shares outstanding for the nine months ended
September 30, 1994 and for the year ended December 31, 1993 reflect the issuance
of 2,248,942 shares of Park-Ohio Common Stock in connection with the Merger.
39
<PAGE> 53
PARK-OHIO INDUSTRIES, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS -- CONTINUED
Historical and Pro forma net income per common share as of September 30,
1994 has taken into account imputed goodwill amortization of $335,000 relating
to earn-out provisions of previous acquisitions of Park-Ohio (See Notes D and
E).
NOTE D
On June 30, 1992, Park-Ohio completed its acquisition of Kay Home Products,
Inc. ("KHP") accounted for as a purchase, in consideration of the assumption of
certain liabilities of KHP and an initial issuance of 850,000 shares of common
stock valued at $3,825,000. An additional 1,150,000 shares of common stock
valued at $12,100,000, which represents purchase price in excess of net assets
acquired, were issued in September 1994 as a result of KHP achieving certain
income levels for the two-year period ended June 30, 1994, as specified in the
purchase agreement.
NOTE E
On October 15, 1993, Park-Ohio completed its acquisition of General
Aluminum Mfg. Company ("GAMCO") by issuing 250,000 shares of its common stock
valued at $3,127,000, in exchange for the outstanding shares of GAMCO. Up to an
additional 750,000 shares of common stock may be issued if GAMCO achieves
certain income levels during the four-year period ending December 31, 1997. In
the first quarter of 1994, 187,500 of the 750,000 shares were included in the
earnings per share calculation as it appeared likely such shares would be issued
pursuant to this agreement. The acquisition has been accounted for as a
purchase.
On December 30, 1993, Park-Ohio acquired Cleveland Steel Container's
("CSC") plastic container facility located in Cleveland, Ohio for $2,400,000 in
cash and assets of Park-Ohio's steel container plant in Peotone, Illinois. The
acquisition has been accounted for as a purchase.
The following unaudited pro forma results of operations assume, in addition
to the merger between Park-Ohio and RB&W, that the acquisitions of GAMCO and CSC
occurred on January 1, 1993. These pro forma results have been prepared for
comparative purposes only (see Pro Forma Condensed Combined Statements of Income
(Unaudited) for the year ended December 31, 1993) and do not purport to be
indicative of the results of operations which actually would have resulted had
the acquisitions occurred on the date indicated, or which may result in the
future. The results of operations for the above acquisitions are included in the
historical statement of income of Park-Ohio for the nine month period ended
September 30, 1994.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1993
-----------------
(In thousands,
except
per share data)
<S> <C>
Net sales..................................... $ 339,724
Gross profit.................................. 50,611
Net income.................................... 5,204
Net income per common share................... $ .57
</TABLE>
40
<PAGE> 54
DESCRIPTION OF PARK-OHIO COMMON STOCK
The following is a summary description of the Park-Ohio capital stock. In
addition to the information described below, reference is made to the section
herein called "COMPARISON OF SHAREHOLDERS' RIGHTS UNDER OHIO AND DELAWARE
LAW -- Anti-takeover Statutes -- Control Share Acquisition" for a description of
certain provisions of Park-Ohio's Amended Articles which would operate only with
respect to an extraordinary corporate transaction involving Park-Ohio.
COMMON STOCK
Park-Ohio is authorized to issue 20,000,000 shares of Common Stock. As of
September 30, 1994, 8,943,654 shares of Common Stock were issued and
outstanding, and 350,000 shares of Common Stock were reserved for issuance under
options granted or to be granted pursuant to Park-Ohio's 1992 Stock Option Plan.
SERIAL PREFERRED STOCK
Park-Ohio is authorized to issue 632,470 shares of Serial Preferred Stock,
$1.00 par value ("Serial Stock"), none of which has been issued. Rights and
designations of the Serial Stock, other than voting rights, may be fixed by the
Park-Ohio Board.
VOTING RIGHTS
Holders of all outstanding shares of Park-Ohio Common Stock are entitled to
one vote per share on all matters submitted to a vote of shareholders.
DIVIDENDS
Holders of Park-Ohio Common Stock have equal rights to receive dividends
ratably, as and when declared by the Board out of funds legally available
therefor, subject to the dividend rights of holders of Serial Stock that may be
issued in the future.
LIQUIDATION
In the event of any liquidation, dissolution or winding up of Park-Ohio,
holders of Common Stock will receive the assets of Park-Ohio available for
distribution on a pro rata basis.
PREEMPTIVE RIGHTS
No holder of Park-Ohio Common Stock has any preemptive or preferential
rights to purchase or subscribe to any shares of any class of Park-Ohio, except
to the extent provided by the Board.
TRANSFER AGENT
The transfer agent and registrar for Park-Ohio Common Stock is Society
National Bank, Cleveland, Ohio.
DESCRIPTION OF RB&W COMMON STOCK
As of November 1, 1994, the authorized capital stock of RB&W consisted of
8,000,000 shares of Common Stock, of which 5,944,469 shares were issued and
outstanding, and 790,000 were reserved for issuance under stock options and
warrants.
41
<PAGE> 55
VOTING RIGHTS
Holders of RB&W Common Stock are entitled to one vote per share on all
matters submitted to stockholders and are not entitled to cumulative voting
rights in the election of directors.
DIVIDENDS
Holders of RB&W Common Stock are entitled to such dividends as may be
declared by the RB&W Board out of funds legally available therefor.
LIQUIDATION
In the event of liquidation, holders of RB&W Common Stock will be entitled
to receive pro rata any assets distributable to stockholders in respect of the
number of shares held by them.
PREEMPTIVE RIGHTS
Holders of RB&W Common Stock are not entitled to preemptive rights for the
purchase of additional shares of any class of RB&W's capital stock.
TRANSFER AGENT
The transfer agent and registrar for RB&W Common Stock is Huntington
National Bank, Cleveland, Ohio.
COMPARISON OF SHAREHOLDERS' RIGHTS UNDER OHIO AND DELAWARE LAW
The rights of RB&W Shareholders were governed by the Delaware General
Corporation Law ("Delaware Statute"). As new shareholders of Park-Ohio, an Ohio
corporation, the rights of the former RB&W Shareholders will be governed by the
Ohio General Corporation Law ("Ohio Statute") rather than the Delaware Statute.
The Ohio Statute and the Delaware Statute differ in a number of respects. The
following is a summary of certain significant differences between the provisions
of these laws as they might affect the rights and interests of the former RB&W
Shareholders, based on the provisions contained in the Park-Ohio Amended
Articles and Regulations.
ANTI-TAKEOVER STATUTES
GENERAL. Section 203 of the Delaware Statute applies to a broad range of
"business combinations" between a Delaware corporation and an "interested
stockholder." The Delaware Statute definition of "business combination" includes
mergers, sales of assets, issuance of voting stock and almost any related party
transaction.
The Delaware Statute prohibits a corporation from engaging in a business
combination with an interested stockholder for a period of three years following
the date on which the stockholder became an "interested stockholder" unless (i)
the board of directors approved the business combination before the stockholder
became an "interested stockholder," or the board of directors approved the
transaction that resulted in the stockholder becoming an "interested
stockholder" (ii) upon consummation of the transaction which resulted in the
stockholder becoming an "interested stockholder," such stockholder owned at
least 85% of the voting stock outstanding when the transaction began, or (iii)
the board of directors approved the business combination after the stockholder
became an "interested stockholder" and the business combination was approved by
at least two-thirds of the outstanding voting stock not owned by such
stockholder. An "interested stockholder" is defined as any person who owns,
directly or indirectly, 15% or more of the outstanding voting stock of a
corporation. A person "owns" voting stock if such person individually or with or
through any of its affiliates or associates (i) beneficially owns such stock,
directly or indirectly, (ii) has the right to acquire or vote such stock
pursuant to any agreement (except that a person who has the right to vote such
stock pursuant
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<PAGE> 56
to an agreement which arises solely from a revocable proxy given in response to
a proxy solicitation made to ten or more persons is not deemed to be an owner
for purposes of the Delaware Statute), or (iii) has any agreement for the
purposes of acquiring, holding, voting or disposing of such stock with any other
person who beneficially owns such stock, directly or indirectly.
Although the Ohio Statute is similar to the Delaware Statute in some
respects, there are significant differences. The Ohio Statute is triggered by
the acquisition of 10% of the voting power of a subject Ohio corporation rather
than 15%. The prohibition imposed by the Ohio Statute continues indefinitely
after the initial three-year period unless the subject transaction is approved
by the requisite vote of the stockholders or satisfies statutory conditions
relating to the fairness of consideration received by stockholders who are not
interested in the subject transaction. During the initial three-year period the
prohibition is absolute absent prior approval by the board of directors of the
acquisition of voting power by which a person became an "interested stockholder"
or of the subject transaction. The Ohio Statute does not provide any exemption
for an "interested stockholder" who acquires a significant percentage of stock
in the transaction which resulted in the stockholder becoming an "interested
stockholder" as does the Delaware Statute. The Ohio Statute's definition of
"beneficial owner" of shares is essentially similar to that of the Delaware
Statute except that the Ohio Statute does not expressly exclude from the
definition of beneficial owner a person who has the right to vote stock pursuant
to an agreement which arises solely from a revocable proxy.
CONTROL SHARE ACQUISITION. Section 1701.831 of the Ohio Statute (the "Ohio
Control Share Acquisition Statute") also provides protection to shareholders
against unfriendly and coercive takeover efforts. The Ohio Control Share
Acquisition Statute provides that certain notice and informational filings and
special shareholder meeting and voting procedures must be followed prior to
consummation of a proposed "control share acquisition," which is defined as any
acquisition of an issuer's shares which would entitle the acquiror, immediately
after such acquisition, directly or indirectly, to exercise or direct the
exercise of voting power of the issuer in the election of directors within any
of the following ranges of such voting power: (a) one-fifth or more but less
than one-third of such voting power; (b) one-third or more but less than a
majority of such voting power; or (c) a majority or more of such voting power.
Assuming compliance with the notice and information filings prescribed by
statute, the proposed control share acquisition may be made only if, at a duly
convened special meeting of shareholders, the acquisition is approved by both a
majority of the voting power of the issuer represented at the meeting and a
majority of the voting power remaining after excluding the combined voting power
of the intended acquiror and the directors and officers of the issuer. The Ohio
Control Share Acquisition Statute may be made inapplicable to a company by its
corporate governance documents, and Park-Ohio has elected to opt out of the
Statute. Park-Ohio has, instead, adopted its own form of control share
acquisition provision. Park-Ohio's control share acquisition provision is
similar to the Ohio Control Share Acquisition Statute except that Park-Ohio's
provision allows the Park-Ohio Board to screen out, and thereby preclude
shareholder review of, certain proposals that do not meet enumerated minimum
standards.
Delaware contains no provision comparable to the Ohio Control Share
Acquisition Statute.
OHIO "ANTI-GREENMAIL" STATUTE. Pursuant to Ohio Statute Section 1707.043,
a public corporation formed in Ohio may recover profits that a shareholder makes
from the sale of the corporation's securities within 18 months after making a
proposal to acquire control or publicly disclosing the possibility of a proposal
to acquire control. The corporation may not, however, recover from a person who
proves either (i) that his sole purpose in making the proposal was to succeed in
acquiring control of the corporation and there were reasonable grounds to
believe that he would acquire control of the corporation or (ii) that his
purpose was not to increase any profit or decrease any loss in the stock. Also,
before the corporation may obtain any recovery, the aggregate amount of the
profit realized by such person must exceed $250,000. Any shareholder may bring
an action on behalf of the corporation if a corporation refuses to bring an
action to recover these profits. The party bringing such an action may recover
his attorneys' fees if the court having jurisdiction over such action orders
recovery of any profits. An Ohio corporation may elect not to be covered by the
"anti-greenmail" statute with an appropriate amendment to its articles of
incorporation, but Park-Ohio has not taken any such corporate action to opt out
of the statute.
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<PAGE> 57
MERGERS AND CONSOLIDATIONS
Under the Delaware Statute, an agreement of merger or consolidation must be
approved by the directors of each constituent corporation and adopted by the
affirmative vote of the holders of a majority of the outstanding shares entitled
to vote thereon, or by a greater vote as provided in the certificate of
incorporation. Under the Delaware Statute the separate vote of any class of
shares is not required. Additionally, the Delaware Statute provides that, unless
its certificate of incorporation provides otherwise, no vote of the stockholders
of the surviving corporation is required to approve the merger if (i) the
agreement of merger does not amend in any respect the corporation's certificate
of incorporation, (ii) each share outstanding immediately prior to the effective
date of the merger is to be an identical outstanding or treasury share of the
surviving corporation after the effective date of the merger, and (iii) the
number of shares of the surviving corporation's common stock to be issued in the
merger plus the number of shares of common stock into which any other securities
to be issued in the merger are initially convertible does not exceed 20% of its
common stock outstanding immediately prior to the effective date of the merger.
Under the Ohio Statute, an agreement of merger or consolidation must be
approved by the directors of each constituent corporation and adopted by
shareholders of each constituent Ohio corporation (other than the surviving
corporation) holding at least two-thirds of the corporation's voting power, or a
different proportion but not less than a majority of the voting power, as
provided in the articles of incorporation. In the case of a merger, the
agreement must, in certain situations, also be adopted by the shareholders of
the surviving corporation by similar vote. Except for the supermajority vote
provisions of Article Fifth described below, the Amended Articles provide that
any such agreement must be adopted by shareholders holding at least a majority
of Park-Ohio's voting power.
Article Fifth of the Amended Articles requires that (1) a merger or
consolidation of Park-Ohio into or with a corporation, person, or entity that is
the beneficial owner of 5% or more of the issued and outstanding shares of a
class of Park-Ohio capital stock ("Interested Party"), (2) the sale, lease or
other disposition of all or substantially all of the assets of Park-Ohio to an
Interested Party, or (3) the purchase by Park-Ohio of the assets or securities
of an Interested Party in exchange, in whole or in part, for Park-Ohio voting
shares, requires the approval of 80% of all outstanding voting shares of
Park-Ohio. This supermajority vote requirement is waived in the event (i) the
transaction has been approved by the Park-Ohio Board prior to the time the
Interested Party beneficially owns 5% or more of the outstanding capital stock
of Park-Ohio, (ii) a shareholder vote on the transaction would not otherwise be
required but for the provision of Article Fifth; or (iii) the transaction
involves certain affiliated parties.
OTHER CORPORATE TRANSACTIONS
The Delaware Statute does not require shareholder approval in the case of
combinations and majority share acquisitions, but does require a majority vote
on disposition of all or substantially all of a corporation's assets and on
dissolutions, unless a greater vote is provided for in the certificate of
incorporation.
Subject to certain exceptions, under the Ohio Statute the approval of
two-thirds of the voting power of the corporation, or a different proportion
(not less than a majority of the corporation's voting power) as provided in the
articles of incorporation, is required for (i) the consummation of combinations
and majority share acquisitions involving the transfer or issuance of such
number of shares as would entitle the holders thereof to exercise at least
one-sixth of the voting power of such corporation in the election of directors
immediately after the consummation of such transaction, (ii) the disposition of
all or substantially all of the corporation's assets other than in the regular
course of business and (iii) voluntary dissolutions. The Amended Articles
provide that a majority of the voting power of Park-Ohio would be required for
approval of such actions except where greater approval is required pursuant to
the provisions of Article Fifth.
CUMULATIVE VOTING
The cumulative voting concept permits a shareholder to cast as many votes
in the election of directors for each share of stock held by him as there are
directors to be elected and each shareholder may cast all his votes
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for a single candidate or distribute such votes among two or more candidates, as
he chooses. Under the Delaware Statute, cumulative voting is permitted only if
it is provided for in the certificate of incorporation.
Under the Ohio Statute, cumulative voting in the election of directors is
mandatory upon proper notice being given to a corporation by any shareholder
unless specifically eliminated by an amendment to the corporation's articles of
incorporation or, in the case of a merger, in the constituent corporation's
merger agreement under certain conditions. Park-Ohio has not taken any corporate
action to opt out of the cumulative voting provision.
CLASS VOTING
The Delaware Statute requires voting by separate classes only with respect
to amendments to the certificate of incorporation which adversely affect the
holders of such classes or which increase or decrease the aggregate number of
authorized shares or the par value of the shares of any such classes.
Under the Ohio Statute, holders of a particular class of shares are
entitled to vote as a separate class if the rights of such class are affected in
certain respects by mergers, consolidations or amendments to the articles of
incorporation.
APPRAISAL RIGHTS
Under the Delaware Statute, appraisal rights are available only in
connection with statutory mergers or consolidations. Even in such cases, unless
the certificate of incorporation otherwise provides, the Delaware Statute does
not recognize appraisal rights for any class or series of stock which is either
listed on a national securities exchange or designated as a national market
system security by the National Association of Securities Dealers, or held of
record by more than 2,000 stockholders, except that appraisal rights are
available for holders of stock who, by the terms of the merger or consolidation,
are required to accept anything except (i) stock of the corporation surviving or
resulting from the merger or consolidation, (ii) shares which at the effective
time of the merger or consolidation are either listed on a national securities
exchange or designated as a national market system security by the National
Association of Securities Dealers, or held of record by more than 2,000
stockholders, (iii) cash in lieu of fractional shares of stock described in the
foregoing clauses (i) and (ii), or (iv) any combination of stock and cash in
lieu of fractional shares described in the foregoing clauses (i), (ii) or (iii).
Under the Ohio Statute, dissenting shareholders are entitled to appraisal
rights in connection with the lease, sale, exchange, transfer or other
disposition of all or substantially all of the assets of a corporation and in
connection with certain amendments to its articles of incorporation. In
addition, shareholders of an Ohio corporation being merged into a new
corporation are also entitled to appraisal rights. Shareholders of an acquiring
corporation are entitled to appraisal rights in a merger, combination or
majority share acquisition in which such shareholders are entitled to voting
rights.
DIVIDENDS
A Delaware corporation may pay dividends out of any surplus and, if it has
no surplus, out of any net profits for the fiscal year in which the dividend was
declared or for the preceding fiscal year provided that such payment will not
reduce capital below the amount of capital represented by all classes of shares
having a preference upon the distribution of assets. An Ohio corporation may pay
dividends out of surplus, however created, but must notify its shareholders if a
dividend is paid out of surplus other than earned surplus.
REPURCHASES
Under the Delaware Statute, a corporation may repurchase or redeem its
shares only out of surplus and only if such purchase does not impair capital.
However, a corporation may redeem preferred stock out of capital if such shares
will be retired upon redemption and the stated capital of the corporation is
thereupon reduced pursuant to a resolution of its board of directors by the
amount of capital represented by such shares.
Under the Ohio Statute, a corporation may purchase or redeem its own shares
if authorized to do so by its articles of incorporation or under certain other
circumstances but may not do so if immediately thereafter its assets would be
less than its liabilities plus its stated capital, if any, or if the corporation
is insolvent or would
45
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be rendered insolvent by such a purchase or redemption. Article Tenth of the
Amended Articles authorizes Park-Ohio to purchase outstanding shares of any
class.
DIRECTOR AND OFFICER LIABILITY AND INDEMNIFICATION
DELAWARE. The Delaware Statute allows a Delaware corporation to include a
provision in its certificate of incorporation limiting or eliminating the
liability of directors for monetary damages for a breach of their duty of care,
provided such directors acted in good faith. Limitation of liability for
breaches of duty of loyalty, however, is not allowed. Statutory authority is
granted to Delaware corporations to indemnify directors, officers and agents,
and mandates indemnification under limited circumstances. Indemnification
against expenses incurred by an officer, director or agent in connection with a
proceeding against such person for actions in such capacity is mandatory to the
extent that that person has been successful on the merits. Advancement of such
expenses (i.e., payment prior to a determination on the merits) is permissive
only and such person must repay such expenses if it is ultimately determined
that he is not entitled to indemnification.
The Delaware Statute also permits a corporation to indemnify a director,
officer or agent for fines, judgments or settlements, as well as expenses in the
context of third-party actions, if such person acted in good faith and in the
best interest of the corporation, or in the case of a criminal action, had no
reason to believe his conduct was unlawful. Indemnification in the context of
derivative actions is restricted to expenses only. Further, if an officer,
director or agent is adjudged liable to the corporation, expenses are not
allowable, subject to limited exceptions where a court deems the award of
expenses appropriate. Determinations regarding permissive indemnification are to
be made by the majority vote of disinterested directors (even if less than a
quorum), or, if there are no such directors, or if such directors so direct, by
independent legal counsel or by the stockholders. Statutory indemnification is
not exclusive. Situations may arise in which a corporation has powers to
indemnify which extend beyond those granted by statute.
The Delaware Statute grants express authority to a Delaware corporation to
purchase insurance for director and officer liability. Such insurance may be
purchased for any officer, director, or agent, regardless of whether that
individual is otherwise eligible for indemnification by the corporation.
The Delaware Statute contains no express statutory provision identifying
the appropriate standard of proof in actions against directors and officers.
Delaware case law indicates that the standard of proof in such actions is a
preponderance of the evidence. Although Delaware has not codified the business
judgment rule, the Delaware courts have developed a "modified" business judgment
rule that places the initial burden on directors and officers in the context of
contests for corporate control or the adoption of defensive measures.
OHIO. Under the Ohio Statute, Ohio corporations are authorized to indemnify
directors, officers and agents within prescribed limits and must indemnify them
under certain circumstances. Ohio law does not provide statutory authorization
for a corporation to indemnify directors and officers for settlements, fines or
judgments in the context of derivative suits. However, it provides that
directors (but not officers) are entitled to mandatory advancement of expenses,
including attorneys' fees, incurred in defending any action, including
derivative actions, brought against the director, provided the director agrees
to cooperate with the corporation concerning the matter and to repay the amount
advanced if it is proved by clear and convincing evidence that his act or
failure to act was done with deliberate intent to cause injury to the
corporation or with reckless disregard for the corporation's best interests.
The Ohio Statute does not authorize payment of expenses or judgments to an
officer or other agent after a finding of negligence or misconduct in a
derivative suit absent a court order. Indemnification is required, however, to
the extent such person succeeds on the merits. In all other cases, if a director
or officer acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, indemnification is
discretionary except as otherwise provided by a corporation's articles of
incorporation, code of regulations or by contract except with respect to the
advancement of expenses of directors.
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The Ohio Statute specifies that determinations regarding discretionary
indemnification are to be made by a majority vote of a quorum of disinterested
directors, or, if a quorum is not available, by independent counsel, the
stockholders, a court of common pleas, or the court in which the proceeding was
brought.
Under Ohio law, a director is not liable for monetary damages unless it is
proved by clear and convincing evidence that his action or failure to act was
undertaken with deliberate intent to cause injury to the corporation or with
reckless disregard for the best interest of the corporation. There is, however,
no comparable provision limiting the liability of officers or other agents of a
corporation.
The statutory right to indemnity is not exclusive in Ohio. The Ohio Statute
provides express authority for Ohio corporations to procure not only insurance
policies, but also to furnish protection similar to insurance, including trust
funds, letters of credit and self-insurance, or to provide similar protection
such as indemnity against loss of insurance.
Unlike Delaware, Ohio has codified the traditional business judgment rule.
The Ohio Statute provides that the business judgment presumption of good faith
may only be overcome by clear and convincing evidence, rather than the
preponderance of the evidence standard applicable in most states. Further, Ohio
law provides specific statutory authority for directors to consider, in addition
to the interests of the corporation's stockholders, other factors such as the
interests of the corporation's employees, suppliers, creditors and customers;
the economy of the state and nation; community and societal considerations; the
long-term and short-term interests of the corporation and its stockholders; and
the possibility that these interests may be best served by the continued
independence of the corporation. Finally, the Ohio Statute specifically provides
that the selection of a time frame for the achievement of corporate goals shall
be the responsibility of directors.
Section 34 of Park-Ohio's Code of Regulations provides that Park-Ohio may
indemnify its directors and officers to the full extent and according to the
procedures set forth in the Ohio General Corporation Law. In addition, the
directors and certain officers of Park-Ohio are each parties to indemnification
agreements with Park-Ohio giving such officer or director the benefits of (i)
the Articles of Incorporation and Code of Regulations, (ii) any insurance
purchased by Park-Ohio to provide such indemnification to the directors,
officers and other persons, and (iii) Ohio law then in effect.
LEGAL OPINIONS
The validity of the shares of Park-Ohio Common Stock to be issued by
Park-Ohio pursuant to the Restated Agreement will be passed upon for Park-Ohio
by its counsel, Squire, Sanders & Dempsey, 4900 Society Center, 127 Public
Square, Cleveland, Ohio 44114.
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EXPERTS
PARK-OHIO. The consolidated financial statements of Park-Ohio Industries, Inc.
appearing in the Company's Annual Report on Form 10-K for the year ended
December 31, 1993, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated by reference
in reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
With respect to the unaudited consolidated condensed interim financial
information for the three-month periods ended March 31, 1994 and 1993, the
three-month and six-month periods ended June 30, 1994 and 1993 and the
three-month and nine-month periods ended September 30, 1994 and 1993,
incorporated by reference in this Prospectus, Ernst & Young LLP have reported
that they have applied limited procedures in accordance with professional
standards for review of such information. However, their separate reports,
included in Park-Ohio Industries, Inc. Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1994, June 30, 1994 and September 30, 1994, and
incorporated herein by reference, state that they did not audit and they do not
express opinions on such interim financial information. Accordingly, the degree
of reliance on their reports on such information should be restricted in light
of the limited nature of the review procedures applied. The independent auditors
are not subject to the liability provisions of Section 11 of the Securities Act
of 1933 (the "Act") for their reports on the unaudited interim financial
information because those reports are not "reports" or "parts" of the
Registration Statement prepared or certified by the auditors within the meaning
of Sections 7 and 11 of the Act.
RB&W. The consolidated financial statements, including financial statement
schedules, of RB&W Corporation and its subsidiary incorporated herein by
reference to the Annual Report on Form 10-K of RB&W for the year ended December
31, 1993, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in accounting and auditing.
48
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APPENDIX A
AMENDED AND RESTATED
PLAN AND AGREEMENT OF MERGER
A-1
<PAGE> 63
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
PLAN AND AGREEMENT OF MERGER
dated as of
February 6, 1995
among
PARK-OHIO INDUSTRIES, INC.,
P.O. ACQUISITION COMPANY, INC.,
and
RB&W CORPORATION
- --------------------------------------------------------------------------------
A-2
<PAGE> 64
<TABLE>
TABLE OF CONTENTS
<CAPTION>
ARTICLE I
THE MERGER
<S> <C> <C>
1.1 The Merger..................................................................... A-10
1.2 Effective Time of the Merger................................................... A-10
1.3 Effects of the Merger.......................................................... A-10
1.4 Continuation of Business....................................................... A-11
1.5 Directors and Officers of Surviving Corporation................................ A-11
1.6 No Further Rights or Transfers................................................. A-11
ARTICLE II
CLOSING
2.1 Closing........................................................................ A-11
2.2 Deliveries at Closing.......................................................... A-11
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF POAC AND RB&W:
CONVERSION OF RB&W SHARES
3.1 Effect on Capital Stock........................................................ A-12
(a) Capital Stock of POAC.................................................... A-12
(b) Exchange Ratio for RB&W Common Stock..................................... A-12
3.2 Conversion of RB&W Shares...................................................... A-12
(a) Exchange Agent........................................................... A-12
(b) Exchange Procedures...................................................... A-12
(c) Distributions with Respect to Unexchanged Shares......................... A-13
(d) No Further Ownership Rights in RB&W Common Stock......................... A-13
(e) Fractional Shares........................................................ A-13
(f) Termination of Exchange Fund............................................. A-13
(g) No Liability............................................................. A-13
ARTICLE IV
JOINT PROXY STATEMENT AND REGISTRATION STATEMENT
4.1 Filing of Registration Statement and Post-Effective Amendment.................. A-14
4.2 Park-Ohio Covenant............................................................. A-14
4.3 RB&W Covenant.................................................................. A-14
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS
5.1 Additional Covenants of All Parties............................................ A-15
(a) Corporate Actions........................................................ A-15
(b) Publicity................................................................ A-15
(c) Notice of Certain Events................................................. A-15
</TABLE>
A-3
<PAGE> 65
<TABLE>
<S> <C> <C> <C>
(d) Further Assurances....................................................... A-15
(e) RB&W Employee Stock Ownership Trust and Plan and Employee
Pension Benefit Plans.................................................... A-15
5.2 Conduct of Business of RB&W Until Closing Date................................. A-16
5.3 Additional Covenants of RB&W................................................... A-17
(a) Approval of RB&W Shareholders............................................ A-17
(b) Access to Information and Confidentiality................................ A-17
(c) No Solicitations......................................................... A-17
(d) No Acquisitions.......................................................... A-18
(e) Third-Party Consents..................................................... A-18
(f) Maximum Shares........................................................... A-18
5.4 Additional Covenants of Park-Ohio.............................................. A-18
(a) Approval of Park-Ohio Shareholders....................................... A-18
(b) NASDAQ Listing........................................................... A-18
(c) Director of Park-Ohio.................................................... A-18
(d) Indemnification and Insurance............................................ A-18
(e) Certain Adjustments...................................................... A-19
(f) Certain Limitations...................................................... A-19
(g) Access to Information and Confidentiality................................ A-19
(h) Stock Options, Warrants and Assumption................................... A-19
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of RB&W......................................... A-20
(a) Due Organization......................................................... A-20
(b) Power and Authority; No Conflicts........................................ A-20
(c) Capital Structure........................................................ A-20
(d) Subsidiaries............................................................. A-21
(e) SEC Documents............................................................ A-21
(f) Vote Required............................................................ A-21
(g) Accounting Matters....................................................... A-21
(h) Title to Assets.......................................................... A-21
(i) Condition of Assets...................................................... A-22
(j) Accounts Receivable...................................................... A-22
(k) Inventory................................................................ A-22
(l) Insurance................................................................ A-22
(m) Dividends and Distributions.............................................. A-22
(n) RB&W and LSC Data; Financial Statements.................................. A-22
(o) Undisclosed Liabilities.................................................. A-23
(p) Investigation or Litigation.............................................. A-23
(q) Certain Agreements....................................................... A-23
(r) Employee Benefits........................................................ A-23
</TABLE>
A-4
<PAGE> 66
<TABLE>
<S> <C> <C> <C>
(s) Labor Matters............................................................ A-24
(t) Taxes.................................................................... A-24
(u) Absence of Certain Changes............................................... A-25
(v) Legal Compliance......................................................... A-25
(w) Environmental Protection................................................. A-25
(x) Patents, Copyrights, Trademarks, Trade Names, etc........................ A-26
(y) Contracts................................................................ A-26
(z) Full Disclosure.......................................................... A-27
(aa) Loss Contingencies....................................................... A-27
(bb) Brokers or Finders....................................................... A-27
6.2 Representations and Warranties of Park-Ohio and POAC........................... A-27
(a) Due Organization......................................................... A-27
(b) Power and Authority; No Conflicts........................................ A-27
(c) Capital Structure........................................................ A-28
(d) SEC Documents............................................................ A-28
(e) Vote Required............................................................ A-28
(f) Accounting Matters....................................................... A-28
(g) Title to and Condition of Assets......................................... A-29
(h) Dividends and Distributions.............................................. A-29
(i) Financial Statements..................................................... A-29
(j) Litigation and Claims.................................................... A-29
(k) Employee Benefits........................................................ A-29
(l) Environmental Protection................................................. A-29
(m) Absence of Certain Changes............................................... A-29
(n) Loss Contingencies....................................................... A-29
(o) Brokers or Finders....................................................... A-29
ARTICLE VII
CONDITIONS
7.1 Conditions Precedent to the Obligations of All Parties......................... A-30
(a) Shareholder Approvals.................................................... A-30
(b) Registration Statement................................................... A-30
(c) Governmental and Other Approvals......................................... A-30
(d) No Injunctions or Restraints............................................. A-30
7.2 Conditions Precedent to the Obligations of RB&W................................ A-30
(a) Representations and Warranties True...................................... A-30
(b) Performance of Obligations and Agreements................................ A-30
(c) Resolutions.............................................................. A-30
(d) Officers' Certificates................................................... A-30
(e) Opinion of Counsel for Park-Ohio and POAC................................ A-31
(f) Fairness Opinion......................................................... A-31
(g) Consents and Approvals................................................... A-31
(h) No P-O Material Adverse Effect........................................... A-31
</TABLE>
A-5
<PAGE> 67
<TABLE>
<S> <C> <C> <C>
7.3 Conditions Precedent to the Obligations of Park-Ohio and POAC.................. A-31
(a) Representations and Warranties True...................................... A-31
(b) Performance of Obligations and Agreements................................ A-31
(c) Resolutions.............................................................. A-32
(d) Officers' Certificate.................................................... A-32
(e) Opinion of Counsel for RB&W.............................................. A-32
(f) Consents and Approvals................................................... A-32
(g) No Material Adverse Effect............................................... A-32
(h) RB&W GECC Agreement...................................................... A-32
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Bases for Termination.......................................................... A-32
8.2 Written Notice................................................................. A-33
8.3 Effect of Termination.......................................................... A-33
8.4 Amendment...................................................................... A-33
ARTICLE IX
GENERAL PROVISIONS
9.1 Expenses....................................................................... A-34
9.2 Break-Up Fee................................................................... A-34
9.3 Notices........................................................................ A-34
9.4 Corporate Action............................................................... A-35
9.5 Governing Law.................................................................. A-35
9.6 Successors..................................................................... A-35
9.7 Assignment..................................................................... A-35
9.8 Counterparts................................................................... A-35
9.9 Entire Agreement............................................................... A-35
</TABLE>
A-6
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<TABLE>
TABLE OF SCHEDULES
<S> <C>
Schedule 1.2 Certificate of Merger
Schedule 5.1(a) Third Party Consents and Approvals
Schedule 5.2(viii) Interests in RB&W Assets
Schedule 5.3(b) Confidentiality Agreement
Schedule 5.4(h) RB&W Options and Warrants
Schedule 6.1(b) Power and Authority; No Conflicts
Schedule 6.1(c) RB&W Capital Structure
Schedule 6.1(e) SEC Documents
Schedule 6.1(h) Title to Assets
Schedule 6.1(i) Condition of Assets
Schedule 6.1(l) Insurance
Schedule 6.1(p) Investigation or Litigation
Schedule 6.1(q) Certain Agreements
Schedule 6.1(r) Employee Benefits
Schedule 6.1(s) Labor Matters
Schedule 6.1(u) Absence of Certain Changes
Schedule 6.1(w) Environmental Protection
Schedule 6.1(x) Patents, Trademarks, Trade Names, etc.
Schedule 6.1(y) Contracts
Schedule 6.1(aa) Loss Contingencies
Schedule 6.2(b) Power and Authority; No Conflicts
Schedule 6.2(c) Park-Ohio's Capital Structure
Schedule 6.2(d) SEC Documents
Schedule 6.2(h) Dividends and Distributions
Schedule 6.2(m) Absence of Certain Changes
Schedule 6.2(n) Loss Contingencies
Schedule 7.3(h) Form of Shareholder Letter
</TABLE>
A-7
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<TABLE>
INDEX OF DEFINED TERMS
<S> <C>
"Agreement".......................................................................... A-10
"Park-Ohio".......................................................................... A-10
"POAC"............................................................................... A-10
"RB&W"............................................................................... A-10
"Merger"............................................................................. A-10
"Code"............................................................................... A-10
"GAAP"............................................................................... A-10
"Surviving Corporation".............................................................. A-10
"Certificate of Merger".............................................................. A-10
"Secretary".......................................................................... A-10
"Effective Time"..................................................................... A-10
"RB&W Certificate"................................................................... A-10
"Closing"............................................................................ A-11
"Closing Date"....................................................................... A-11
"RB&W Shareholders".................................................................. A-12
"Surviving Corporation Common Stock"................................................. A-12
"RB&W Common Stock".................................................................. A-12
"Park-Ohio Common Stock"............................................................. A-12
"Merger Consideration"............................................................... A-12
"Exchange Agent"..................................................................... A-12
"Park-Ohio Certificates"............................................................. A-12
"Exchange Fund"...................................................................... A-12
"Transmittal Letter"................................................................. A-12
"SEC"................................................................................ A-13
"Securities Act"..................................................................... A-13
"Registration Statement"............................................................. A-13
"Exchange Act"....................................................................... A-13
"Joint Proxy Statement".............................................................. A-14
"Joint Proxy Statement and Registration Statement"................................... A-14
"ESOP"............................................................................... A-15
"LSC"................................................................................ A-15
"RB&W Special Meeting"............................................................... A-17
"RB&W Shareholders' Approval"........................................................ A-17
"Park-Ohio Special Meeting".......................................................... A-18
"Park-Ohio Shareholders' Approval"................................................... A-18
"Indemnified Parties"................................................................ A-18
"Permitted Acquisition".............................................................. A-19
"Option"............................................................................. A-19
"Material Adverse Effect"............................................................ A-20
"Governmental Agency"................................................................ A-20
"RB&W SEC Documents"................................................................. A-21
"SEC Investigation".................................................................. A-21
</TABLE>
A-8
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<TABLE>
<S> <C>
"RB&W Data".......................................................................... A-22
"RB&W Unaudited Financial Statements"................................................ A-23
"LSC Unaudited Financial Statements"................................................. A-23
"Audited Consolidated Financial Statements".......................................... A-23
"ERISA".............................................................................. A-23
"ERISA Affiliate".................................................................... A-23
"Plans".............................................................................. A-23
"Returns"............................................................................ A-24
"Environmental Claim" or "Claim"..................................................... A-26
"Environmental Laws"................................................................. A-26
"Materials of Environmental Concern"................................................. A-26
"P-O Material Adverse Effect"........................................................ A-27
"Park-Ohio SEC Documents"............................................................ A-29
</TABLE>
A-9
<PAGE> 71
AMENDED AND RESTATED
PLAN AND AGREEMENT OF MERGER
THIS AMENDED AND RESTATED PLAN AND AGREEMENT OF MERGER (the "Restated
Agreement"), dated as of February 6, 1995, is among PARK-OHIO INDUSTRIES, INC.,
an Ohio corporation ("Park-Ohio"), P.O. ACQUISITION COMPANY, INC., a Delaware
corporation ("POAC") and a wholly-owned subsidiary of Park-Ohio, and RB&W
CORPORATION, a Delaware corporation ("RB&W"), and constitutes an amendment and
restatement of the Plan and Agreement of Merger dated as of November 29, 1994
among Park-Ohio, POAC and RB&W.
WHEREAS, on the terms and subject to the conditions set forth in this
Restated Agreement, Park-Ohio desires to acquire, through merger, One Hundred
Percent (100%) of the shares of common stock of RB&W issued and outstanding on
the date hereof (and to be outstanding on the Closing Date, as defined in
Section 2.1);
WHEREAS, the respective Boards of Directors of Park-Ohio, POAC and RB&W
deem the merger to be advisable and in the best interests of each of Park-Ohio,
POAC and RB&W and have adopted resolutions approving the acquisition by
Park-Ohio of RB&W through the merger of POAC with and into RB&W (the "Merger")
in accordance with the laws of the States of Delaware and Ohio upon the terms
and conditions set forth in this Restated Agreement;
WHEREAS, the Boards of Directors of Park-Ohio, POAC and RB&W have directed
that this Restated Agreement be submitted for consideration at special meetings
of the voting shareholders of each of Park-Ohio, POAC and RB&W; and
WHEREAS, unless the context shall otherwise require, capitalized terms used
herein shall have the meanings assigned thereto;
NOW, THEREFORE, in consideration of their respective agreements and
undertakings set forth herein, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. On the terms and subject to the conditions set forth in
this Restated Agreement and in reliance on the representations, warranties and
covenants set forth herein, at the Effective Time, as defined in Section 1.2,
POAC shall be merged with and into RB&W in accordance with the laws of the State
of Delaware, with RB&W being the surviving corporation (the "Surviving
Corporation").
1.2 Effective Time of the Merger. The Merger shall be effective when a
certificate of merger in the form attached hereto as Schedule 1.2 (the
"Certificate of Merger") shall have been properly executed by POAC and RB&W and
delivered to and accepted for filing by the Secretary of State of the State of
Delaware ("Secretary") in accordance with the Delaware General Corporation Law
("DGCL"), which filing shall be made as promptly as practicable following the
Closing, as defined in Section 2.1. When used in this Restated Agreement, the
term "Effective Time" shall mean the time and the date as of which the
Certificate of Merger shall have been accepted for filing in the office of the
Secretary.
1.3 Effects of the Merger. (a) At the Effective Time, (i) the separate
existence and corporate organization of POAC shall cease, and POAC shall be
merged with and into RB&W; (ii) the Certificate of Incorporation of POAC as in
effect immediately prior to the Effective Time shall become the Certificate of
Incorporation of the Surviving Corporation; and (ii) the By-laws of POAC as in
effect immediately prior to the Effective Time shall be the By-laws of the
Surviving Corporation.
(b) At and after the Effective Time, all the rights, privileges, powers,
immunities and franchises, public or private, of RB&W and POAC, and all the
property, real, personal and mixed, and all debts due on whatever account to
either of them, including subscriptions to shares, and all other things in
action of RB&W and POAC, shall vest in and become the property of the Surviving
Corporation without further act or deed, and the Surviving Corporation shall be
deemed to have assumed and shall be responsible and liable for all the
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liabilities and obligations of POAC and RB&W in the same manner and to the same
extent as if the Surviving Corporation had itself incurred such liabilities and
obligations. A claim existing or action or proceeding pending by or against POAC
or RB&W may be prosecuted as if the Merger had not taken place, or the Surviving
Corporation may be substituted in its place; and the rights of creditors and
liens upon the property of POAC or RB&W shall not be impaired by the Merger.
1.4 Continuation of Business. The Surviving Corporation shall, after the
Effective Time, continue the businesses of POAC and RB&W with the assets of both
of such constituent corporations.
1.5 Directors and Officers of Surviving Corporation. The directors of RB&W
shall resign as of the Effective Time, and the directors of POAC immediately
prior to the Effective Time shall become the directors of the Surviving
Corporation. The officers of RB&W immediately prior to the Effective Time shall
become the officers of the Surviving Corporation. Each of such directors and
officers shall hold office until their respective successors are duly elected or
appointed and qualified in the manner provided in the Certificate of
Incorporation and By-laws of the Surviving Corporation, or as otherwise provided
by law.
1.6 No Further Rights or Transfers. At and after the Effective Time
(a) The stock transfer books of POAC shall be closed, there shall be no
further registration of transfers on the stock transfer books of POAC
thereafter, and Park-Ohio shall cease to have any rights as a shareholder of
POAC.
(b) All shares of RB&W common stock shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and each
holder of a certificate representing any such shares ("RB&W Certificate") shall
cease to have any rights with respect thereto, except the right to receive the
cash payment and shares of Park-Ohio common stock to be issued in consideration
therefor upon the surrender of such RB&W Certificate in accordance with Section
3.2, without interest.
ARTICLE II
CLOSING
2.1 Closing. The closing of the transactions contemplated by this Restated
Agreement (the "Closing") shall take place at the offices of Squire, Sanders &
Dempsey, 4900 Society Center, 127 Public Square, Cleveland, Ohio, at 10:00 am,
local time, on the second business day immediately following the date on which
the last of the conditions set forth in Article VII hereof is fulfilled or
waived, or at such other time and place as Park-Ohio, POAC and RB&W may mutually
agree (the "Closing Date").
2.2 Deliveries at Closing.
(a) At the Closing, RB&W shall deliver to Park-Ohio and POAC:
(i) the resolutions referred to in Section 7.3(c) hereof;
(ii) the certificate referred to in Section 7.3(d) hereof;
(iii) the opinion of counsel referred to in Section 7.3(e) hereof;
(iv) the fairness opinion referred to in Section 7.2(f) hereof;
(v) a certificate representing One Hundred Shares of RB&W Common Stock
duly registered in Park-Ohio's name, duly executed and authenticated;
(vi) any necessary consents, authorizations and approvals; and
(vii) all other documents, instruments and writings reasonably
requested by POAC or Park-Ohio at or prior to Closing pursuant to this
Restated Agreement or otherwise required herein.
(b) At the Closing, POAC and Park-Ohio shall deliver to RB&W:
(i) the resolutions referred to in Section 7.2(c) hereof;
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(ii) the certificates referred to in Section 7.2(d) hereof;
(iii) the opinion of counsel referred to in Section 7.2(e) hereof;
(iv) any necessary consents, authorizations and approvals; and
(v) all other documents, instruments and writings reasonably requested
by RB&W at or prior to Closing pursuant to this Restated Agreement or
otherwise required herein.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF POAC AND RB&W;
CONVERSION OF RB&W SHARES
3.1 Effect on Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of RB&W
common stock ("RB&W Shareholders") or capital stock of POAC:
(a) Capital Stock of POAC. Each issued and outstanding share of the
capital stock of POAC shall be converted into and become one fully paid and
nonassessable share of common stock, par value $1.00 per share, of the Surviving
Corporation ("Surviving Corporation Common Stock").
(b) Exchange Ratio for RB&W Common Stock. Subject to Section 3.2(e), each
issued and outstanding share of the common stock of RB&W, $1.00 par value per
share ("RB&W Common Stock") shall be converted into the right to receive $4.45
in cash (the "Cash Consideration"), plus .33394 of a fully paid and
nonassessable share of Park-Ohio common stock, par value $1.00 per share
("Park-Ohio Common Stock") (the "Stock Consideration"). The total amount of cash
paid to RB&W Shareholders by Park-Ohio shall not exceed Twenty-Nine Million Nine
Hundred Sixty-Eight Thousand Three Hundred Eighty-Seven Dollars ($29,968,387)
and the total number of shares of Park-Ohio Common Stock finally determined to
be issuable shall not exceed Two Million Two Hundred Forty-Eight Thousand Nine
Hundred Forty-Two (2,248,942) shares (the Cash Consideration and the Stock
Consideration together the "Merger Consideration"), and shall be distributed to
the RB&W Shareholders in accordance with Section 3.2, below.
3.2 Conversion of RB&W Shares. (a) Exchange Agent. As of the Effective
Time, Park-Ohio shall deposit with Society National Bank or such other bank or
trust company designated by Park-Ohio (and reasonably acceptable to RB&W) (the
"Exchange Agent"), for the benefit of RB&W Shareholders, for conversion in
accordance with this Article III, through the Exchange Agent, an amount of cash
equal to Twenty-Nine Million Nine Hundred Sixty-Eight Thousand Three Hundred
Eighty-Seven Dollars ($29,968,387) and certificates representing the shares of
Park-Ohio Common Stock issuable pursuant to Section 3.1 in exchange for
outstanding shares of RB&W Common Stock ("Park-Ohio Certificates") (such cash
and shares of Park-Ohio Common Stock, together with any dividends or
distributions with respect thereto, being hereinafter referred to as the
"Exchange Fund").
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record as of the
Effective Time of an RB&W Certificate or Certificates whose shares were
converted into the right to receive cash and shares of Park-Ohio Common Stock
pursuant to Section 3.1(b), (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the RB&W
Certificates shall pass, only upon delivery of the RB&W Certificates to the
Exchange Agent and shall be in such form and have such other provisions as
Park-Ohio and RB&W may reasonably specify)("Transmittal Letter") and (ii)
instructions for use in effecting the surrender of the RB&W Certificates in
exchange for the cash payment and Park-Ohio Certificates. Upon surrender of an
RB&W Certificate for cancellation to the Exchange Agent or to such other agent
or agents as may be appointed by Park-Ohio and POAC, together with such
Transmittal Letter, duly executed, the holder of such RB&W Certificate shall be
entitled to receive in exchange therefor the cash payment specified in Section
3.1(b), above, and a Park-Ohio Certificate representing that number of whole
shares of Park-Ohio Common Stock which such holder has the right to receive
pursuant to the provisions of this Article III, and the RB&W Certificate so
surrendered shall forthwith be canceled. In the event of a transfer of ownership
of RB&W
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Common Stock which is not registered in the transfer records of RB&W, the cash
payment specified in Section 3.1(b), above, and a Park-Ohio Certificate
representing the proper number of shares of Park-Ohio Common Stock may be issued
to a transferee if the RB&W Certificate representing such RB&W Common Stock is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this Section
3.2, each RB&W Certificate shall be deemed at any time after the Effective Time
to represent only the right to receive upon such surrender the cash payment
specified in Section 3.1(b), above, and the Park-Ohio Certificate representing
shares of Park-Ohio Common Stock as contemplated by this Section 3.2.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the Effective Time with respect to
Park-Ohio Common Stock with a record date after the Effective Time shall be paid
to the holder of any unsurrendered RB&W Certificate with respect to the shares
of Park-Ohio Common Stock represented thereby until the holder of record of such
RB&W Certificate shall surrender such RB&W Certificate. Subject to the effect of
applicable laws, following surrender of any such RB&W Certificate, there shall
be paid to the record holder of the Park-Ohio Certificates issued in exchange
therefor, without interest, (i) at the time of such surrender, the amount of
dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to shares of Park-Ohio Common Stock, and (ii) at
the appropriate payment date, the amount of dividends or other distributions
with a record date after the Effective Time but prior to surrender and a payment
date subsequent to surrender payable with respect to such shares of Park-Ohio
Common Stock.
(d) No Further Ownership Rights in RB&W Common Stock. The total amount of
cash paid and shares of Park-Ohio Common Stock issued upon the surrender for
conversion of shares of RB&W Common Stock in accordance with the terms hereof
(including any cash paid pursuant to Section 3.2(c)) shall be deemed to have
been paid and issued in full satisfaction of all rights pertaining to such
shares of RB&W Common Stock, subject, however, to the Surviving Corporation's
obligation to pay any dividends or make any other distributions with a record
date prior to the Effective Time which may have been declared or made by RB&W on
such shares of RB&W Common Stock in accordance with the terms of this Restated
Agreement or prior to the date hereof and which remain unpaid at the Effective
Time. As of the Effective Time, entries shall be made in the stock transfer
books of RB&W to reflect the cancellation of the RB&W Common Stock issued and
outstanding immediately prior to the Effective Time and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of RB&W Common Stock that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, RB&W Certificates are
presented to the Surviving Corporation for any reason, they shall be canceled
and converted as provided in this Article III.
(e) Fractional Shares. No certificates or scrip representing fractional
shares of Park-Ohio Common Stock shall be issued upon the surrender for exchange
of RB&W Certificates, and no cash payments in lieu of fractional shares shall be
made. No dividends or distributions of Park-Ohio shall be payable on or with
respect to any fractional share and any such fractional share interest will not
entitle the owner thereof to vote or to any rights of a shareholder of
Park-Ohio.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund that
remains undistributed to the RB&W Shareholders for six months after the
Effective Time shall be delivered to Park-Ohio, upon demand, and any RB&W
Shareholders who have not theretofore complied with this Article III shall
thereafter look only to Park-Ohio for payment of their claim for cash payment
and Park-Ohio Common Stock and any dividends or distributions with respect to
Park-Ohio Common Stock.
(g) No Liability. Neither Park-Ohio nor RB&W shall be liable to any RB&W
Shareholders for such shares of Park-Ohio Common Stock or dividends or
distributions with respect thereto delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law.
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ARTICLE IV
JOINT PROXY STATEMENT AND REGISTRATION STATEMENT
4.1 Filing of Registration Statement and Post-Effective Amendment.
(a) Registration Statement. Park-Ohio and RB&W have prepared and filed
with the Securities and Exchange Commission ("SEC") (i) a Registration Statement
on Form S-4 to be filed under the Securities Act of 1933 ("Securities Act") by
Park-Ohio in connection with the Merger for the purpose of registering the
shares of Park-Ohio Common Stock to be issued in the Merger pursuant to Article
III hereof (the "Registration Statement") and (ii) a joint proxy statement filed
with the SEC under the Securities Exchange Act of 1934 ("Exchange Act") by
Park-Ohio and RB&W and used by Park-Ohio as a prospectus, and distributed by
Park-Ohio and RB&W, respectively, to the Park-Ohio Shareholders and the RB&W
Shareholders. The Registration Statement was declared effective under the
Securities Act on December 27, 1994. Park-Ohio and RB&W shall also take such
action as may be reasonably required to cause the shares of Park-Ohio Common
Stock issuable pursuant to the Merger to be registered under applicable state
"blue sky" or securities laws; provided, however, that neither Park-Ohio nor
RB&W shall be required to register or qualify as a foreign corporation or to
take other action that would subject it to general service of process in any
jurisdiction where it is not presently so subject. Park-Ohio shall furnish to
RB&W and RB&W shall furnish to Park-Ohio all information concerning itself as
each such other party or its counsel may reasonably request and which is
required or customary for inclusion in the Joint Proxy Statement and
Registration Statement.
(b) Post-Effective Amendment. Park-Ohio and RB&W will prepare and file
with the SEC as soon as possible following the date hereof an amendment to the
Registration Statement reflecting the terms and conditions of this Restated
Agreement (the "Post-Effective Amendment"). Park-Ohio and RB&W shall use
reasonable best efforts to cause the Post-Effective Amendment to be accepted by
the SEC and to be distributed to the Park-Ohio and RB&W Shareholders as soon as
possible after filing.
4.2 Park-Ohio Covenant. Park-Ohio covenants to RB&W that the
Post-Effective Amendment (i) will comply in all material respects with the
applicable provisions of the Exchange Act and the Securities Act and the rules
and regulations of the SEC thereunder and (ii) will not at the respective times
such document is filed with the SEC, and at the time of the mailing of the
Post-Effective Amendment and any amendments thereof or supplements thereto, and
at the time of the RB&W Special Meeting and the Park-Ohio Special Meeting, as
defined in Sections 5.3(a) and 5.4(a), respectively, and, in the case of the
Registration Statement and the Post-Effective Amendment and any amendment
thereof or any supplement thereto, at all times after it becomes effective under
the Securities Act and until the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or necessary to
correct any statement in any earlier filing with the SEC of such Joint Proxy
Statement and Registration Statement or any amendment thereof or any supplement
thereto or any earlier communication (including the Joint Proxy Statement and
Registration Statement) to shareholders of RB&W with respect to the transactions
contemplated by this Restated Agreement; provided, however, that no covenant or
agreement is made by Park-Ohio in this Section 4.2 or any other provision of
this Restated Agreement with respect to information supplied by RB&W for
inclusion in the Joint Proxy Statement, the Registration Statement, the
Post-Effective Amendment, or any amendments or supplements thereto.
4.3 RB&W Covenant. RB&W covenants to Park-Ohio that the Post-Effective
Amendment (i) will comply in all material respects with the applicable
provisions of the Exchange Act and the Securities Act and the rules and
regulations of the SEC thereunder and (ii) will not at the respective times such
document is filed with the SEC, and at the time of the mailing of the
Post-Effective Amendment and any amendments thereof or supplements thereto, and
at the time of the RB&W Special Meeting and the Park-Ohio Special Meeting and,
in the case of the Registration Statement and the Post-Effective Amendment and
any amendment thereof or any supplement thereto, at all times after it becomes
effective under the Securities Act and until the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, or
necessary to correct any statement in any earlier filing with
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the SEC of such Joint Proxy Statement and Registration Statement or any
amendment thereof or any supplement thereto or any earlier communication
(including the Joint Proxy Statement and Registration Statement) to shareholders
of RB&W and Park-Ohio with respect to the transactions contemplated by this
Restated Agreement; provided, however, that no covenant or agreement is made by
RB&W in this Section 4.3 or any other provision of this Restated Agreement with
respect to information supplied by Park-Ohio for inclusion in the Joint Proxy
Statement, the Registration Statement, the Post-Effective Amendment, or any
amendments or supplements thereto.
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS
5.1 Additional Covenants of All Parties. Park-Ohio, POAC and RB&W agree
that:
(a) Corporate Actions. Upon the terms and subject to the conditions of
this Restated Agreement, each of Park-Ohio and POAC, on the one hand, and RB&W,
on the other hand, shall (1) take all necessary corporate and other actions, (2)
obtain all necessary authorizations and approvals, and (3) make all necessary
filings required to carry out the transactions contemplated by this Restated
Agreement, to satisfy the conditions specified in Article VII hereof at the
earliest practicable date and otherwise to perform their obligations under this
Restated Agreement provided that a party's obligation with respect to obtaining
the approval or consent of its shareholders or of any third party listed on
Schedule 5.1(a) shall be fulfilled if it has used all reasonable best efforts to
obtain such approval or consent.
(b) Publicity. Subject to each party's disclosure obligations imposed by
law, Park-Ohio and POAC, on the one hand, and RB&W, on the other hand, shall
consult with each other prior to issuing any press releases or otherwise making
public statements with respect to the transactions contemplated hereby and prior
to making any filings with any federal or state governmental or regulatory
agency or with any securities exchange with respect thereto.
(c) Notice of Certain Events. If in the course of the transactions
contemplated by this Restated Agreement, either Park-Ohio or POAC, on the one
hand, or RB&W, on the other hand, shall acquire knowledge of any fact, law or
circumstance which would be required to be disclosed, either by such party or by
the other party, to avoid a breach of a representation or warranty contained in
this Restated Agreement, then such party shall immediately disclose such fact,
law or circumstance to the other party.
(d) Further Assurances. Before and after the Closing, each of the parties
shall make all reasonable best efforts to execute such other documents and other
papers and take such further actions as may be reasonably required or desirable
to carry out the provisions of this Restated Agreement and the transactions
contemplated hereby.
(e) RB&W Employee Stock Ownership Trust and Plan and Employee Pension
Benefit Plans. On or prior to February 20, 1995, RB&W shall (i) amend each of
the Plans (as such term is defined in Section 6.1(r) hereof) that is intended to
be qualified under Code Section 401(a) to comply with the Code and other
applicable legislation, regulations, and rulings, effective as of the first day
of each such Plan's 1989 plan year; and (ii) file accurate and complete
determination letter applications on behalf of such Plans with the Internal
Revenue Service ("IRS"). RB&W agrees to terminate the RB&W Employee Stock
Ownership Trust and Plan ("ESOP") effective as of the Closing Date, and to take
all actions incidental thereto. With respect to the ESOP, RB&W agrees that (i)
no distribution of benefits to ESOP participants or beneficiaries on account of
plan termination shall occur prior to the issuance by the Internal Revenue
Service of a favorable determination letter pertaining to such termination, and
(ii) no additional contributions shall be made to the ESOP on or after the date
of this Restated Agreement. The Surviving Corporation will provide that former
Participants in the ESOP may elect to participate in a plan of the Surviving
Corporation which qualifies under Section 401(k) of the Code, and the Surviving
Corporation will directly transfer their ESOP assets to such 401(k) plan as soon
as administratively feasible after receipt of the applicable favorable
determination letter from the IRS.
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5.2 Conduct of Business of RB&W Until Closing Date. From the date of this
Restated Agreement until the Closing Date, (i) RB&W shall make available to
Park-Ohio during normal business hours an office at 23001 Euclid Avenue, and
(ii) except with the prior written consent of Park-Ohio, which consent shall not
be unreasonably delayed or withheld, RB&W shall conduct its business in the
ordinary course and consistent with past practices and use its reasonable best
efforts to preserve intact its business organization and goodwill, keep
available the services of its present officers and key employees and preserve
the goodwill and business relationships with suppliers, customers and others
having business relationships with it. Without limiting the generality of the
foregoing, RB&W shall, and covenants and agrees that Lamson and Sessions of
Canada, Limited ("LSC"), its wholly-owned subsidiary, shall:
(a) refrain from changing, in any material respect, any of its business
policies relating to its business;
(b) maintain and keep its assets in good repair, working order and
condition in the ordinary course of its business as presently conducted (except
for obsolescence and ordinary wear and tear and damage due to casualty);
(c) perform in all material respects all of its obligations under all
contracts, leases and any and all other agreements relating to or affecting its
assets or its business;
(d) [omitted];
(e) except as specifically agreed to in writing by Park-Ohio, refrain from:
(i) declaring or paying any dividends or other distributions;
(ii) issuing, redeeming, selling or disposing of, or creating any
obligation to issue, redeem, sell or dispose of, any shares of its capital
stock (whether authorized but unissued or held in treasury) or any security
convertible into capital stock, including, without limitation, making any
contributions to any employee stock ownership or compensation plans or
granting any stock options;
(iii) taking any action with respect to the grant of any severance or
termination pay to any employees or with respect to any increase of
benefits payable under its severance or termination pay policies or
agreements in effect on the date hereof and applicable to employees;
(iv) entering into, adopting, accelerating, modifying or amending in
any other manner any written employment, collective bargaining, consulting,
bonus, incentive compensation, deferred compensation, employee stock
option, profit sharing, employee benefit, welfare benefit or other
agreement, plan or arrangement providing for compensation or benefits to
directors, officers or employees (except as required by law or as necessary
to maintain the tax-qualified status of such plan, trust or other
agreement);
(v) increasing in any manner the compensation or fringe benefits of
any employee or director or paying any benefit or compensation not required
by any existing agreement, plan or arrangement, except the granting (in the
sole discretion of RB&W's Board of Directors and the Chairman of the Board)
of executive and director bonuses in an amount not to exceed $250,000 in
the aggregate, based on 1994 fiscal year-end results;
(vi) taking any action that could be reasonably anticipated to have a
Material Adverse Effect, as defined in Section 6.1(a), or that could cause
any representation or warranty set forth in Article VI hereof to be untrue
or any condition to Closing not to be satisfied;
(vii) accelerating billings, shipments to customers, payments from
customers, orders from suppliers or payment of accounts payable or
adjusting the level of inventory, except in the ordinary course of
business;
(viii) entering into, assuming or permitting any mortgage, pledge,
conditional sale or title retention agreement, lien, easement,
right-of-way, lease, encumbrance or charge of any kind which will continue
on or after the Closing upon the assets of RB&W or LSC, whether now or
hereafter acquired, or creating or assuming any obligation for borrowed
money, except as set forth on Schedule 5.2;
(ix) making capital expenditures in excess of $300,000 in the
aggregate;
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(x) acquiring any of the business, capital stock or assets
constituting a business of any other person, firm, association or
corporation except Importdirect Ltd.;
(xi) selling or otherwise disposing of the assets of RB&W or LSC other
than the sale of inventory in the ordinary course of business;
(xii) entering into any settlement or other dispositive agreements
with respect to any litigation which would obligate RB&W or LSC for amounts
in excess of $5,000 in any one case or $50,000 in the aggregate for all
cases;
(xiii) doing any act or omitting to do any act, or permitting any act
or omission to act, which RB&W or LSC, as the case may be, is aware could
cause a breach or default by RB&W or LSC under any of RB&W's or LSC's
contracts, agreements, commitments or obligations;
(xiv) entering into or amending any confidentiality agreement or any
agreement, contract or arrangement which would impose any restriction on
competition on RB&W or LSC or on the ability to hire employees from any
person, except in connection with discussions contemplated by Section
5.3(c);
(xv) entering into or amending any other agreements, commitments or
contracts which, individually or in the aggregate, are material to RB&W or
LSC, except agreements for the purchase and sale of goods or services in
the ordinary course of business, consistent with past practice and not in
excess of current requirements;
(xvi) assuming or otherwise becoming liable or responsible (whether
directly, contingently or otherwise) for any obligations or liabilities of
any other person;
(xvii) moving the location of RB&W's or LSC's main offices or any
production facility;
(xviii) selling or otherwise disposing of all or any portion of RB&W's
holdings in LSC; or
(xix) agreeing to take any of the foregoing actions.
5.3 Additional Covenants of RB&W. RB&W agrees that:
(a) Approval of RB&W Shareholders. RB&W shall as soon as reasonably
practicable (i) take all steps necessary duly to call, give notice of, convene
and hold a special meeting of RB&W Shareholders (the "RB&W Special Meeting") (A)
for the purpose of adopting this Restated Agreement (the "RB&W Shareholders'
Approval") and (B) for such other purposes as may be necessary or desirable,
(ii) distribute to RB&W Shareholders the proxy statement including the
Post-Effective Amendment in accordance with applicable Federal and state law and
with its Certificate of Incorporation and By-laws, (iii) recommend, through
unanimous resolution of the RB&W Board of Directors, to the RB&W Shareholders
the adoption of this Restated Agreement and such other matters as may be
submitted to such shareholders in connection with this Restated Agreement and
(iv) cooperate and consult with Park-Ohio with respect to each of the foregoing
matters.
(b) Access to Information and Confidentiality. At all times after the date
hereof and until the Effective Time or earlier termination of this Restated
Agreement, RB&W shall, upon reasonable notice, provide Park-Ohio with such
information and permit Park-Ohio's officers and representatives access during
normal business hours to the properties and records of RB&W and LSC, including,
but not limited to, provision of office space as described in Section 5.2, as
well as to the employees, customers, suppliers and management of RB&W and LSC,
as Park-Ohio may reasonably request. The treatment of all such information shall
be governed by the Agreement between RB&W and Park-Ohio dated July 25, 1994, a
copy of which is attached as Schedule 5.3(b).
(c) No Solicitations. From the date of execution of this Restated
Agreement and until the Closing Date, so long as Park-Ohio is acting in good
faith in connection with the transactions contemplated herein, RB&W shall not,
nor shall it permit LSC to, nor shall it authorize or permit any of its
officers, directors or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by it or LSC to, solicit,
encourage, initiate or participate in discussions or negotiations with any third
party concerning the sale of RB&W, except that RB&W may furnish information
about RB&W and access thereto,
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in each case in response to unsolicited requests therefor, to any third party
pursuant to appropriate confidentiality agreements, and may participate in
discussions and negotiate with such third party concerning a sale of RB&W, if
the Board of Directors of RB&W determines, in the exercise of its good faith
judgment as to its fiduciary duties to the RB&W Shareholders and based upon
advice of counsel, that such action is required. RB&W shall promptly inform
Park-Ohio in writing if it receives any proposals or requests for information
from a third party with respect to the sale of RB&W and shall promptly provide
Park-Ohio with a copy (or, if not in writing, a summary) of any such proposal,
offer or information request. RB&W shall not amend, modify or otherwise alter
any confidentiality agreement in effect as of the date of this Restated
Agreement without the prior written consent of Park-Ohio.
(d) No Acquisitions. Except for the acquisition of the capital stock of
Importdirect Ltd., RB&W shall not, and shall not permit LSC to, acquire or agree
to acquire by merging or consolidating with, or by purchasing an equity interest
in or a portion of the assets of, or by any other manner, any business or any
corporation, partnership, association or other business organization or division
thereof.
(e) Third-Party Consents. Prior to the Closing Date, RB&W shall use
reasonable best efforts to obtain all consents or approvals of third parties set
forth in Schedule 6.1(b), and shall provide copies of all such consents and
approvals to Park-Ohio and POAC.
(f) Maximum Shares. On and as of the Closing Date, RB&W shall have issued
and outstanding no more than Six Million, Seven Hundred Thirty-Four Thousand
Four Hundred Sixty-Nine (6,734,469) shares on a fully diluted basis.
5.4 Additional Covenants of Park-Ohio. Park-Ohio hereby unconditionally
agrees that:
(a) Approval of Park-Ohio Shareholders. Park-Ohio shall as soon as
reasonably practicable (i) take all steps necessary to call, give notice of,
convene and hold a special meeting of Park-Ohio Shareholders (the "Park-Ohio
Special Meeting") (A) for the purpose of adopting this Restated Agreement (the
"Park-Ohio Shareholders' Approval"), and (B) for such other purposes as may be
necessary or desirable, (ii) distribute to Park-Ohio Shareholders the Joint
Proxy Statement in accordance with applicable Federal and state law and its
Amended Articles of Incorporation and Regulations, (iii) recommend through
unanimous resolution of the Board of Directors of Park-Ohio to Park-Ohio
Shareholders the adoption of this Restated Agreement and such other matters as
may be submitted to such shareholders in connection with this Restated
Agreement, and (iv) cooperate and consult with RB&W with respect to each of the
foregoing matters.
(b) NASDAQ Listing. Park-Ohio shall use its reasonable best efforts to
cause the Park-Ohio shares to be issued pursuant hereto to be listed for trading
on the National Association of Securities Dealers Automated Quotation system.
(c) Director of Park-Ohio. Park-Ohio agrees that RB&W shall have the right
to submit a list of the names of members of the Board of Directors of RB&W who
are willing to serve on the Board of Directors of Park-Ohio. In the event RB&W
submits such a list on or before the Closing Date, Park-Ohio shall cause the
size of its Board of Directors to be expanded by one, and one member chosen from
the list by Park-Ohio shall be designated to fill the vacancy created thereby on
the Closing Date or as soon thereafter as is practicable.
(d) Indemnification and Insurance. Park-Ohio agrees that all rights to
indemnification now existing in favor of the employees, agents, directors or
officers of RB&W and its subsidiaries (collectively, the "Indemnified Parties")
as provided in their respective charters or by-laws or by agreement in effect on
the date hereof shall survive the Merger and shall, with respect to any action
or omission occurring prior to the Effective Time, continue in full force and
effect in accordance with their terms. Park-Ohio shall use reasonable efforts to
obtain and maintain from the Effective Time through December 31, 1996 standard
director and officer insurance for the directors and executive officers of RB&W
or to obtain "tail insurance" for such directors and officers. Nothing in the
foregoing shall obligate Park-Ohio with respect to indemnification for acts or
omissions occurring after the Effective Time.
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Expenses, including attorney's fees, incurred by directors and officers of
RB&W in defending against an action, suit, or proceeding shall be paid by
Park-Ohio as they are incurred, in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer in which he agrees that he will (i) repay such amount if
it is proved by clear and convincing evidence in a court of competent
jurisdiction that his action or failure to act involved an act or omission
undertaken with deliberate intent to cause injury to Park-Ohio or RB&W or
undertaken with reckless disregard for the best interests of Park-Ohio or RB&W.
(e) Certain Adjustments. In the event that prior to the Effective Time
Park-Ohio shall declare a stock dividend or other distribution payable in
Park-Ohio Common Stock or securities convertible into Park-Ohio Common Stock or
effect a stock split, reclassification, combination or other change with respect
to Park-Ohio Common Stock, the aggregate number of shares of Park-Ohio Common
Stock set forth in Section 3.1(b) into which RB&W Common Stock shall be
converted at the Effective Time shall be adjusted such that each RB&W
Shareholder shall be entitled to receive at the Effective Time that number of
shares of Park-Ohio Common Stock such shareholder would have received had such
dividend, distribution, stock split, reclassification, combination or other
change and the record date, if any, therefor occurred immediately after the
Effective Time.
(f) Certain Limitations. During the period from the date of this Restated
Agreement to the Effective Time, Park-Ohio shall not, except as otherwise
expressly provided in this Restated Agreement, without the prior consent of
RB&W, which shall not be unreasonably withheld:
(i) issue, deliver or sell or agree to issue, deliver or sell any
additional shares of its capital stock or any securities or obligations
convertible into or exchangeable for any shares of its capital stock or
such securities (except pursuant to its employee benefit or other stock
plans and existing convertible securities and except in connection with a
Permitted Acquisition (as defined in clause (ii) below)) where the effect
of such issuance, delivery or sale would be to dilute the value of the
Park-Ohio shares to be issued hereunder; or
(ii) merge or consolidate with or acquire the stock or assets of any
other person or enter into any definitive agreement or agreement in
principle therefor unless the Registration Statement would not be required
to include separate audited financial statements or pro forma financial
statements respecting such other person or such merger, consolidation or
acquisition (whether alone or together with any or all such mergers,
consolidations and acquisitions) and such merger, consolidation or
acquisition would not result in any delay in any material respect in any of
the following and would not increase in any material respect the
possibility of any regulatory or other action which seeks to prevent or
delay the Merger: (A) the filing or effective date of the Registration
Statement or (B) the issuance of the Pooling Press Release (as defined in
Section 7.3(h))(each of such permitted merger, consolidation or
acquisition, a "Permitted Acquisition").
(g) Access to Information and Confidentiality. At all times after the date
hereof and until the Effective Time or earlier termination of this Restated
Agreement, Park-Ohio shall, upon reasonable notice, provide RB&W with such
information and permit RB&W's officers and representatives access during normal
business hours to the properties and records of Park-Ohio, as well as to the
employees, customers, suppliers and management of Park-Ohio, as RB&W may
reasonably request. The treatment of all such information shall be governed by
the Agreement between RB&W and Park-Ohio dated July 25, 1994, a copy of which is
attached as Schedule 5.3(b).
(h) Stock Options, Warrants and Assumption. Schedule 5.4(h) sets forth a
list of each stock option, warrant, or other right to acquire RB&W stock or
securities (an "Option") outstanding on the date of this Restated Agreement and
the Option exercise price, the number of shares subject to the Option, the dates
of grant, vesting, exercisability and expiration of the Option and whether the
Option is either a qualified or nonqualified stock option. Without the written
consent of Park-Ohio, no additional Options shall, after the date of this
Restated Agreement, be granted by RB&W. All rights under Options shall be
treated as provided in this Section.
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Each Option outstanding immediately prior to the Effective Time shall be
exercised at or prior to the Effective Time and with the effect that each holder
of each Option shall thereby be entitled to acquire (on the terms and conditions
set forth herein) cash and Park-Ohio Common Stock as though each share subject
to each Option was a share of RB&W Common Stock.
The Board of Directors of Park-Ohio shall take such action as may be
required under the Option plans or agreements to effectuate the foregoing.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of RB&W. RB&W represents and warrants
to Park-Ohio and POAC as follows:
(a) Due Organization. RB&W is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, has full
corporate power and authority to own its properties and to carry on its business
as it is now being conducted, is duly qualified to do business and is in good
standing in all jurisdictions in which it is required to be so qualified, except
where the failure to so qualify or be in good standing would not, in the
aggregate, have a material adverse effect upon the business, financial condition
or results of operations of RB&W and its subsidiary, taken as a whole (a
"Material Adverse Effect"), and has received all necessary authorizations,
consents and approvals of governmental authorities material to the ownership of
its properties and assets and to the conduct of its business.
(b) Power and Authority; No Conflicts. RB&W has full power and authority
(corporate or otherwise) to enter into and carry out the terms of this Restated
Agreement. The execution and delivery by RB&W of this Restated Agreement and the
other documents and instruments to be executed and delivered by RB&W pursuant
hereto and thereto and the consummation of the transactions contemplated hereby
and thereby by RB&W have been duly authorized by the [unanimous] vote of the
Board of Directors of RB&W. The RB&W Shareholders' Approval is the only other
corporate act or proceeding on the part of RB&W that is necessary to authorize
this Restated Agreement or the other documents and instruments to be executed
and delivered by RB&W pursuant hereto or the transactions contemplated hereby or
thereby. This Restated Agreement has been duly and validly executed by RB&W, and
is, and when executed and delivered, each other document and instrument to be
executed and delivered by RB&W pursuant hereto will constitute, a valid and
binding agreement of RB&W enforceable against it in accordance with their
respective terms subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights generally and except to the extent that the
enforceability of rights and remedies may be limited by general principles of
equity. The execution and delivery of this Restated Agreement does not, and,
subject to any requisite governmental or other consents or approvals, the
consummation of the transactions contemplated hereby will not (i) violate any
provision of the Certificate of Incorporation of RB&W, or the By-laws of RB&W,
in each case as amended, (ii) violate or conflict with any law, ordinance, rule,
regulation, order, judgment or decree to which RB&W is subject or by which RB&W
is bound, or (iii) violate or conflict with or constitute a material default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, or will result in the termination of, or accelerate the
performance required by, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets under, any
term or provision of any material contract, commitment, understanding,
arrangement, agreement or restriction of any kind or character to which RB&W or
LSC is a party or by which RB&W or LSC or any of their assets or properties may
be bound or affected. Except as set forth on Schedule 6.1(b), no consent,
approval, authorization or action by any federal, state, local or foreign
governmental agency, instrumentality, commission, authority, board or body
(collectively, "Governmental Agency") or any other third party is required in
connection with the execution and delivery by RB&W of this Restated Agreement
and the other documents and instruments to be executed and delivered by RB&W
pursuant hereto or the consummation by RB&W of the transactions contemplated
herein or therein.
(c) Capital Structure. RB&W's authorized, issued, outstanding and reserved
capital stock is, as of October 31, 1994, as set forth on Schedule 6.1(c), and
all of the outstanding shares of its capital stock have been duly authorized and
validly issued and are fully paid and nonassessable and free from preemptive
rights.
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There are no outstanding options, warrants, convertible securities,
subscriptions or other rights or agreements providing for the issuance or
delivery of any additional shares of capital stock of RB&W, except as set forth
on Schedule 6.1(c).
(d) Subsidiaries. (i) RB&W has no subsidiaries, either wholly or partially
owned, except LSC, and RB&W is the lawful owner of 100% of the outstanding
shares of LSC, which is incorporated in Ontario, Canada. RB&W has full power and
authority to transfer all right, title and interest in and to such shares
without the consent of any other person, and such shares are free and clear of
all liens, equities, encumbrances and claims of every kind. LSC has no
subsidiaries either wholly or partially owned.
(ii) The authorized capital stock of LSC consists solely of Five
Million (5,000,000) shares of common stock, par value $.01 per share, of
which Two Million Nine Hundred Twenty-Five Thousand (2,925,000) shares are
issued and outstanding. All of the outstanding shares of the capital stock
of LSC have been duly authorized and validly issued and are fully paid and
nonassessable and free from preemptive rights.
(iii) Except for the LSC common stock, there are no LSC debt or equity
securities outstanding and no options, warrants or other rights to
purchase, agreements or other obligations to issue, or other rights to
convert any obligation into, any shares of capital stock of LSC.
(iv) Neither the execution and delivery of this Restated Agreement nor
the consummation of the transactions contemplated hereby will result in a
violation or breach of any agreement by which the shares of LSC are bound,
or give rise to any right in any third party to terminate or modify any
contract by which any shares of LSC are bound.
(v) RB&W is not engaged in, is not a party to, and has no reasonable
basis to anticipate, any legal action or other proceeding before any court
or administrative agency in connection with its shares of LSC.
(e) SEC Documents. RB&W has made available to Park-Ohio a true and
complete copy of each report, schedule, registration statement and definitive
proxy statement filed by RB&W with the SEC since January 1, 1991 (as such
documents have since the time of their filing been amended, the "RB&W SEC
Documents") which are all of the documents (other than preliminary material)
that RB&W was required to file with the SEC since such date. As of their
respective dates, the RB&W SEC Documents complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC thereunder applicable to such RB&W SEC
Documents, and none of the RB&W SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of RB&W included in the RB&W SEC Documents comply as to form in all
material respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto or, in the case of the unaudited statements, as permitted by Form 10-Q
of the SEC) and fairly present (subject, in the case of the unaudited
statements, to normal, recurring audit adjustments) the consolidated financial
position of RB&W as at the dates thereof and the consolidated results of its
operations and cash flows for the periods then ended. Except as disclosed on
Schedule 6.1(e), to the best of its knowledge RB&W is not now, nor has it ever
been, the subject of any review, study, audit, examination, inquiry or other
investigation by the SEC ("SEC Investigation"), nor, to the best knowledge of
RB&W, is any such SEC Investigation pending or threatened.
(f) Vote Required. The affirmative vote of a majority of the votes that
RB&W Shareholders are entitled to cast is the only vote of such shareholders
necessary to approve this Restated Agreement and the transactions contemplated
hereby.
(g) Accounting Matters. Park-Ohio acknowledges that the transactions
contemplated by this Restated Agreement will be treated as a purchase for
purposes of Park-Ohio financial and accounting records.
(h) Title to Assets. Except as set forth on Schedule 6.1(h), RB&W and LSC
have good, marketable and valid title in and to all of their respective assets,
including all real, personal and intangible property, and
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RB&W and LSC hold their respective assets free and clear of any mortgage,
conditional sale agreement, title retention agreement, security interest, lease,
pledge, hypothecation, lien or other encumbrance.
(i) Condition of Assets. All of the assets (whether owned or leased) that
are necessary for the conduct of the business of RB&W and LSC are in normal
operating condition, free from defects other than such minor defects as do not
materially interfere with the continued use thereof in normal operations, except
as set forth on Schedule 6.1(i).
(j) Accounts Receivable. Each of RB&W and LSC has delivered to Park-Ohio
and POAC an accurate aging schedule of all of the accounts receivable reflected
on the books of RB&W and LSC, respectively, as of October 31, 1994. The accounts
receivable (net of reserves) reflected on the books of RB&W and LSC as of the
Closing Date will be fully collectible in the ordinary course of business using
reasonable business methods in light of the nature of the business. Any
receivable due from RB&W Shareholders, any affiliate of RB&W or any employee of
RB&W shall be paid in full in cash on or prior to the Closing Date.
(k) Inventory. All of the inventory of RB&W reflected on the balance sheet
as of October 31, 1994, including tooling inventory, is useable and saleable in
the ordinary course of business, except for any items of obsolete or defective
inventory, which are fully and properly reserved against in the balance sheet of
October 31, 1994.
(l) Insurance. RB&W (a) maintains insurance policies with licensed
insurance carriers on such assets, properties and businesses and against such
risks as is customary for companies engaged in its business, or (b) has reserved
on its financial statements sufficient funds to cover all losses known to it
arising from such risks. Schedule 6.1(l) sets forth a list and brief description
(specifying the insurer and describing each pending claim thereunder) of all
policies, binders or reserves of fire, liability, product liability, workers'
compensation, vehicular and other insurance or self-insurance held by or on
behalf of RB&W or LSC. All such policies are in full force and effect and insure
against risks and liabilities to an extent and in a manner customary in the
industries in which RB&W and LSC operate. Except for claims identified on
Schedule 6.1(l), there are no outstanding unpaid claims under any such policy,
binder or reserve. Except as specifically set forth on Schedule 6.1(l), there
will be no liability of RB&W or LSC, as of the Closing Date, under any such
insurance policy or ancillary agreement with respect thereto in the nature of a
retroactive rate adjustment, loss sharing arrangement or other actual or
contingent liability arising wholly or partially out of events occurring prior
to the Closing Date. RB&W has received no notice of cancellation or nonrenewal
of any such policy or binder. There is no inaccuracy in any application for such
policies or binders, or any failure to pay premiums due. RB&W has not received
any notice from any of its insurance carriers that any insurance premiums will
be materially increased in the future or that any insurance coverage listed on
Schedule 6.1(l) will not be available in the future on substantially the same
terms as now in effect. RB&W has fully and properly reserved against the claims
listed on Schedule 6.1(l) on the Audited Consolidated Financial Statements, and
such reserve is reflected on the October 31, 1994 balance sheet.
(m) Dividends and Distributions. From December 31, 1993 to the date
hereof, neither RB&W nor LSC has declared or paid any dividends on any shares of
its capital stock, nor have they made any other payments or distributions
thereon to their shareholders. All dividends declared by RB&W or LSC prior to
December 31, 1993 have been fully paid or RB&W has fully and properly reserved
against the payment of such dividends, which reserve is reflected on its October
31, 1994 balance sheet.
(n) RB&W and LSC Data; Financial Statements. RB&W and LSC have made
available to Park-Ohio their corporate minutes, articles and regulations, books
and records, all material contracts, all product warranties, all loan
documentation, all notes, all leases, a list of all accounts receivable,
evidence of all bank accounts, an accurate and complete list of each insurance
policy currently providing coverage for the real and personal property owned,
operated or leased together with copies of such policies, information regarding
employee compensation and benefit plans, a list of all outstanding workers
compensation and unemployment claims, all licenses and permits that RB&W or LSC
has with respect to its operations, and all outstanding citations or complaints
relating to environmental, health or safety laws or regulations (collectively,
the "RB&W Data"). RB&W acknowledges that Park-Ohio and POAC have relied on the
RB&W Data in deciding to execute this Restated Agreement and consummate the
transactions contemplated hereby. RB&W has made available to Park-Ohio an
unaudited balance sheet for RB&W as of October 31, 1994, along with
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related statements of income for the month and ten months ended October 31, 1994
(The "RB&W Unaudited Financial Statements"); unaudited balance sheets of LSC as
of October 31, 1994, along with related statements of income for LSC for the
month and ten months ended October 31, 1994 (the "LSC Unaudited Financial
Statements"); and audited consolidated balance sheets of RB&W and LSC as of
December 31, 1993, along with related consolidated statements of income for the
year ended December 31, 1993 (the "Audited Consolidated Financial Statements").
Each of the balance sheets contained in the RB&W Unaudited Financial Statements,
the LSC Unaudited Financial Statements and the Consolidated Audited Financial
Statements (including the related notes and schedules) fairly presents the
financial position of RB&W, LSC or the consolidated entity, as the case may be,
as of its date, and the statements of income included in the RB&W Unaudited
Financial Statements, the LSC Unaudited Financial Statements and the
Consolidated Audited Financial Statements (including any related notes and
schedules) fairly presents the results of operations of RB&W, LSC or the
consolidated entity, as the case may be, for the periods set forth therein in
accordance with generally accepted accounting principles consistently applied.
The present items comprising the inventories of RB&W and LSC are reasonable and
warranted in the present circumstances of RB&W's and LSC's businesses.
(o) Undisclosed Liabilities. Neither RB&W nor LSC has any liabilities or
obligations of any nature, secured or unsecured (absolute, accrued, contingent
or otherwise and whether due or to become due), except (i) liabilities and
obligations that are fully reflected, reserved against or disclosed in the
Consolidated Audited Financial Statements, and (ii) liabilities and obligations
incurred in the ordinary course of business and consistent with past practice.
RB&W has fully and properly reserved against any liabilities or obligations that
may arise under contracts or agreements involving the sale of any division,
facility, plant or segment of the business of RB&W and LSC, including, but not
limited to, the sale of the screw plants located in Rock Falls and Chicago,
Illinois completed on August 17, 1993 pursuant to the Asset Purchase Agreements
dated March 19, 1993 between RB&W and Capital Fastener, Inc. and RB&W and
Capital Bolt, Inc.
(p) Investigation or Litigation. Except as set forth on Schedule 6.1(p),
there is no investigation or review pending or to the best knowledge of RB&W
threatened by any Governmental Agency with respect to RB&W or LSC including
without limitation, investigations or reviews relating to (i) any product
alleged to have been sold by RB&W or LSC, and alleged to have been defective or
improperly designed or manufactured, (ii) hazardous substances, (iii) pollution
or (iv) the environment; nor has any Governmental Agency indicated in writing to
RB&W or LSC an intention to conduct any such investigation or review; nor, to
the knowledge of RB&W, is there any valid basis for any such investigation or
review. Except as set forth in Schedule 6.1(p), there is no claim, action, suit
or proceeding pending before or, to the best knowledge of RB&W, threatened
against or affecting RB&W or LSC at law or in equity by, any Governmental Agency
or arbitrator, including, without limitation, claims, actions, suits or
proceedings relating to (i) any product alleged to have been sold by RB&W or
LSC, and alleged to have been defective or improperly designed or manufactured,
(ii) hazardous substances, (iii) pollution, (iv) the environment, or (v)
workers' compensation, nor is there, to the best knowledge of RB&W, any valid
basis for any such claim, action, suit or proceeding.
(q) Certain Agreements. Except as disclosed in the RB&W SEC Documents
filed prior to the date of this Restated Agreement or in Schedule 6.1(q), and
except for this Restated Agreement, as of the date of this Restated Agreement,
neither RB&W nor LSC is a party to any oral or written (i) consulting agreement
not terminable on 60 days' or less notice, (ii) agreement with any executive
officer or other key employee of RB&W or LSC, or (iii) agreement or plan,
including any stock option plan, stock appreciation rights plan, any of the
Plans (as defined in Section 6.1(r)), restricted stock plan or stock purchase
plan, any of the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Restated Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Restated Agreement.
(r) Employee Benefits. (i) Schedule 6.1(r) contains a true and complete
list of each bonus, deferred compensation, incentive compensation, stock
purchase, stock option, severance or termination pay, hospitalization or other
medical, life or other insurance, supplemental unemployment benefits,
profit-sharing, pension, retirement or other employee benefit plan, program,
practice, agreement or arrangement, including, without limitation, each
"employee benefit plan" as defined in section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), sponsored, maintained,
contributed to or required to be
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contributed to by RB&W or LSC or any trade or business, whether or not
incorporated (an "ERISA Affiliate"), which together with RB&W or LSC would be
deemed a "single employer" within the meaning of section 4001 of ERISA, for the
benefit of current or former employees or directors of RB&W (the "Plans"). RB&W
has delivered or made available to Park-Ohio true and complete copies of all
documents, as they may have been amended to the date hereof, embodying or
relating to the Plans.
(ii) Except as set forth in Schedule 6.1(r), neither RB&W nor LSC
maintains Plans intended to qualify under sections 401(a) or 501(a) of the
Code. Neither RB&W nor any current or former ERISA Affiliate sponsored,
maintained, contributed to or was required to contribute to, during the six
year period ending on the Closing Date, any Plan subject to Title IV of
ERISA or any "multiemployer plan" within the meaning of section 3(37) of
ERISA or any multiemployer or multiple employer welfare benefit plan.
(iii) Each of the Plans has been operated and administered in all
material respects in accordance with applicable laws, including but not
limited to ERISA and the Code. No reportable event within the meaning of
section 403(b) of ERISA or prohibited transaction within the meaning of
section 406 of ERISA or section 4975(c) of the Code has occurred with
respect to any Plan, no civil penalty has been assessed pursuant to
sections 409 or 502(i) of ERISA, and no tax has been imposed pursuant to
sections 4975 or 4976 of the Code.
(iv) There are no pending, or to the best knowledge of RB&W,
threatened or anticipated claims (other than routine claims for benefits)
by, on behalf of or against any of the Plans or any trusts related thereto.
(v) Except as specifically set forth on Schedule 6.1(r), no Plan
provides benefits, including without limitation death or medical benefits
(whether or not insured), with respect to current or former employees or
directors of the business of RB&W or LSC beyond their retirement or other
termination of service other than coverage mandated by applicable law or
deferred compensation benefits accrued as liabilities in compliance with
applicable Financial Accounting Standards Board requirements on the books
of RB&W or LSC.
(vi) Except as specifically set forth in Schedule 6.1(r), with respect
to each Plan that is funded wholly or partially through an insurance
policy, there will be no liability of RB&W or LSC, as of the Closing Date,
under any such insurance policy or ancillary agreement with respect to such
insurance policy in the nature of a retroactive rate adjustment, loss
sharing arrangement or other actual or contingent liability arising wholly
or partially out of events occurring prior to the Closing Date.
(s) Labor Matters. Except as set forth on Schedule 6.1(s), neither RB&W
nor LSC has entered into any collective bargaining agreements or any other
agreements with any labor organization or any other person or group claiming to
represent or bargain collectively for any of RB&W's or LSC's employees. RB&W has
delivered or made available to Park-Ohio true and correct copies of all of the
agreements described on Schedule 6.1(s). There are no unfair labor practice
charges, lawsuits, grievances or administrative charges pending or to the best
knowledge of RB&W threatened, concerning or affecting RB&W or LSC. RB&W has
received no written notice nor has there been any proceeding or adjudication
questioning whether or alleging or determining that RB&W or LSC is not in
compliance, in all material respects, with all federal, state and local laws and
regulations with respect to employment, employment practices and terms and
conditions of employment. There is no work stoppage, strike, slowdown or adverse
job action of any form by any persons or labor organizations occurring or, to
the knowledge of RB&W, threatened against RB&W or LSC.
(t) Taxes. Each of RB&W and LSC has (i) timely filed all tax returns,
schedules, declarations, and tax-related documents including, without
limitation, all Forms 5500 pertaining to the Plans (collectively, "Returns")
required to be filed by any jurisdictions to which it is or has been subject,
(ii) timely paid in full any taxes, interest and penalties with respect thereto,
subject to audit by the taxing authorities by such jurisdictions and timely made
any deposits of tax required by taxing jurisdictions, (iii) fully accrued on its
books an amount sufficient to pay all taxes not yet due but related to
operations through the date hereof, (iv) made timely payments of the taxes
required to be deducted and withheld from the wages paid to employees, and (v)
otherwise satisfied, in all material respects, all legal requirements applicable
to it with respect to all aforementioned obligations to taxing jurisdictions.
All tax returns filed by RB&W and LSC accurately reflect
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in all material respects their income, expenses, deductions, credits and loss
carryovers and the taxes due and are otherwise accurate and complete in all
material respects and have not been amended. Except for any consequences that
may arise from the transactions contemplated by this Restated Agreement, there
have been no ownership changes within the meaning of Section 382(g) of the Code
or any other events that would impair the full availability of the net operating
loss shown on RB&W's federal income tax return for the year ended December 31,
1993. Each of RB&W and LSC has delivered to Park-Ohio true and complete copies
of all federal and state income and franchise tax returns for each of the
taxable years ended December 31, 1991 through December 31, 1993, inclusive. The
most recent period for which an assessment can no longer be made by the IRS with
respect to RB&W's federal income tax is for the fiscal year ended December 31,
1990. Except with respect to the audit of its federal income tax return for the
calendar year ended December 31, 1992, RB&W has no knowledge that an audit of
any of the federal income tax returns of RB&W or LSC is in progress and has no
reason to believe that any such audit is contemplated. There are no other
pending questions relating to, or claims asserted for (or to the knowledge of
RB&W any basis therefor), taxes or assessments of LSC. For purposes of this
Section, "tax" and "taxes" (when not modified by other words such as "income" or
"franchise") shall include all income, gross receipts, franchise, excise, real
and personal property, and other taxes imposed by any U.S. or Canadian federal,
state, municipal, local, or other governmental agency, including assessments in
the nature of taxes.
(u) Absence of Certain Changes. Except as disclosed on Schedule 6.1(u),
since December 31, 1993, neither RB&W nor LSC has suffered any Material Adverse
Effect, it being understood and agreed that (i) nothing reflected directly or
indirectly in the information set forth in Schedule 6.1(u) and (ii) nothing
which Park-Ohio is aware of shall be deemed to constitute a Material Adverse
Effect for purposes of this Section.
(v) Legal Compliance. RB&W and LSC have each complied in all material
respects with all applicable laws, rules, regulations, and ordinances of any
governmental agency having jurisdiction, any trade-mark, tradename or copyright
rules and regulations, and any zoning, occupational safety or environmental
protection laws or any laws relating to the employment of labor. Neither RB&W
nor LSC is in violation of, or in default under, any terms or provisions of any
mortgage, indenture, security agreement, lease, license, contract, agreement,
instrument, order, arbitration award, judgment, injunction or decree. Neither
RB&W nor LSC has received any written notice nor has there been any proceeding
or adjudication questioning whether or alleging or determining that the business
of RB&W or LSC is or has been conducted in violation of any law, ordinance,
regulation, order, decree, judgment or injunction. Neither RB&W nor LSC has
received any written notice nor has there been any proceeding or adjudication
questioning whether or alleging or determining that they have not obtained all
permits, licenses and other authorizations which relate to the assets or the
business of RB&W or LSC. Neither RB&W nor LSC has received any written notice
nor has there been any proceeding or adjudication questioning whether or
alleging or determining that it is not in compliance in all material respects
with all material terms and conditions of such permits, licenses and
authorizations.
(w) Environmental Protection. (i) Except as set forth on Schedule 6.1(w),
RB&W and LSC are in compliance with all Environmental Laws (as hereinafter
defined) applicable to the business of RB&W or LSC, which compliance includes,
but is not limited to, the possession by RB&W or LSC of all permits and other
governmental authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof. Neither RB&W nor LSC has
received any written communication, whether from a Governmental Agency, citizens
group, employee or otherwise, that alleges that the business of RB&W or LSC is
not in such compliance. To the best knowledge of RB&W, there are no
circumstances that may prevent or interfere with such compliance in the future.
All permits and other governmental authorizations currently held by RB&W or LSC
pursuant to the Environmental Laws are identified on Schedule 6.1(w).
(ii) Except as set forth in Schedule 6.1(w), there is no Environmental
Claim pending or, to the best knowledge of RB&W, threatened against RB&W or
LSC or against any person or entity whose liability for any Environmental
Claims RB&W or LSC has or, to the best knowledge of RB&W, may have retained
or assumed either contractually or by operation of law.
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(iii) RB&W has disclosed to Park-Ohio all outside consultants'
reports, internal memoranda, legal documents involving third parties, and
any other information, written or otherwise, in the possession of RB&W or
LSC that relates to the release, emission, discharge or disposal of any
Materials of Environmental Concern.
(iv) Without in any way limiting the generality of the foregoing, (w)
all on-site and off-site locations where RB&W or LSC has stored, disposed
or arranged for the disposal of Materials of Environmental Concern since
January 1, 1989, are identified in Schedule 6.1(w), and (x) all existing
underground storage tanks and, to the best knowledge of RB&W, all areas
impacted by former underground storage tanks, and the capacity and contents
of such existing tanks, located on property owned or leased by RB&W or LSC
are identified in Schedule 6.1(w).
(v) "Environmental Claim" means any claim, action, cause of action,
investigation or notice (written or oral)("Claim") by any person or entity
alleging potential liability (including, without limitation, potential
liability for investigatory costs, cleanup costs, governmental response
costs, natural resources damages, property damages, personal injuries, or
penalties) arising out of, based on or resulting from (x) the presence, or
release into the environment of any Materials of Environmental Concern at
any location, whether or not owned by the Company or (y) circumstances
forming the basis of any violation, or alleged violation, of any
Environmental Law; provided, however, that no such Claim, or group of
Claims arising from a single activity or incident, shall be considered to
be an Environmental Claim under this provision unless the value of such
Claim or group of Claims is in excess of Two Hundred Fifty Thousand Dollars
($250,000).
(vi) "Environmental Laws" means all U.S. or Canadian, in the case of
LSC, federal, state, local and foreign laws and regulations relating to
pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, ground water, land surface
or subsurface strata), including, without limitation, laws and regulations
relating to emissions, discharges, releases or threatened releases of
Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
(vii) "Materials of Environmental Concern" means chemicals,
pollutants, contaminants, wastes, hazardous or toxic substances, petroleum
and petroleum products.
(x) Patents, Copyrights, Trademarks, Trade Names, etc. Schedule 6.1(x)
hereto contains an accurate and complete list of all material patents, patent
applications, trademark registrations, trademark applications, service marks,
trade names and assumed names used in RB&W's or LSC's business and to be
assigned hereunder which are presently owned or held by RB&W or LSC or under
which either of them owns or holds any license or other interest. Such items of
intellectual property constitute all such items used in RB&W or LSC's business.
Neither RB&W nor LSC has received written notice nor has there been any
proceeding or adjudication questioning whether or alleging or determining that
the use thereof by RB&W or LSC infringes on or conflicts with any existing
patents, trademarks or copyrights or any other rights of any person. Neither
RB&W nor LSC has received any written notice of any material claim of a third
party to the use of any such names. RB&W and LSC have the right to use such
patents, trademarks, trade names and copyrights in the business in which they
are currently being used and the consummation of the transactions contemplated
hereby will not alter or impair any such rights. Neither RB&W nor LSC has
received any written notice nor has there been any material proceeding or
adjudication questioning whether or alleging or determining that any services
provided or products manufactured or sold by RB&W or LSC nor any patents,
formulae, processes, know-how, trade secrets, trademarks, trade names, assumed
names, copyrights or designations used in RB&W or LSC's business infringe on any
existing patents, trademarks or copyrights, or any other rights of any person or
corporate entity. Any license included in RB&W or LSC's intellectual property
has been duly and validly executed and delivered by RB&W and constitutes a valid
and binding agreement of RB&W or LSC enforceable in accordance with its terms.
(y) Contracts. Each contract and commitment (whether written or oral) that
individually involves potential future payments by or to RB&W or LSC of $50,000
or more is disclosed on Schedule 6.1(y)(except
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as otherwise indicated therein) and copies of such written contracts or
commitments have been provided to Park-Ohio. RB&W and LSC are not, nor have they
been during the past three years, a partner in any partnership or a party to any
joint venture.
(z) Full Disclosure. There is no fact known to RB&W which has not been
disclosed to Park-Ohio in writing, that has caused, or would reasonably be
anticipated to result in, a Material Adverse Effect.
(aa) Loss Contingencies. Except as disclosed on Schedule 6.1(aa), as of
the date hereof, to the best knowledge of RB&W, RB&W does not have any loss
contingencies coming within the scope of the Statement of Financial Accounting
Standards No. 5, which are reasonably likely to have a Material Adverse Effect,
it being understood and agreed that nothing which Park-Ohio is aware of shall be
deemed to constitute a loss contingency for purposes of this Section 6.1(aa).
All of the loss contingencies disclosed on Schedule 6.1(aa) have been fully and
properly reserved against on the Consolidated Audited Financial Statements and
are reflected on the October 31, 1994 balance sheet of RB&W.
(bb) Brokers or Finders. RB&W has not incurred any liability for any
brokerage fees, commissions, finders' fees or similar fees or expenses in
connection with this Restated Agreement or the transactions contemplated hereby,
other than the fees to be paid to McDonald and Company for the fairness opinion
referred to in Section 7.2(f).
6.2 Representations and Warranties of Park-Ohio and POAC. Park-Ohio and
POAC jointly and severally represent and warrant to RB&W as follows:
(a) Due Organization. Each of Park-Ohio and POAC is a corporation duly
organized, validly existing and in good standing under the laws of the States of
Ohio and Delaware, respectively, has full corporate power and authority to own
its properties and to carry on its business as it is now being conducted, is
duly qualified to do business and is in good standing in all jurisdictions in
which it is required to be so qualified except where the failure to so qualify
or be in good standing would not, in the aggregate, have a material adverse
effect on Park-Ohio and its subsidiaries, taken as a whole (a "P-O Material
Adverse Effect") and has received all necessary authorizations, consents and
approvals of governmental authorities material to the ownership of its
properties and assets and to the conduct of its business other than such which,
if not received, would not have a P-O Material Adverse Effect.
(b) Power and Authority; No Conflicts. Each of Park-Ohio and POAC has full
corporate power and authority to enter into and carry out the terms of this
Restated Agreement. The execution and delivery of this Restated Agreement and
the other documents and instruments to be executed and delivered by Park-Ohio
and POAC pursuant hereto and the consummation of the transactions contemplated
hereby and thereby by Park-Ohio and POAC have been duly authorized by the Board
of Directors of Park-Ohio and POAC and by Park-Ohio as the sole shareholder of
POAC and the Park-Ohio Shareholders' Approval is the only other corporate act or
proceeding on the part of Park-Ohio and POAC that is necessary to authorize this
Restated Agreement or the other documents and instruments to be executed and
delivered by Park-Ohio and POAC pursuant hereto or the transactions contemplated
hereby. This Restated Agreement has been duly and validly executed and delivered
by each of Park-Ohio and POAC and constitutes, and when executed and delivered,
the other documents and instruments to be executed and delivered by each of
Park-Ohio and POAC pursuant hereto will constitute, valid and binding agreements
of Park-Ohio and POAC, enforceable against each of Park-Ohio and POAC in
accordance with their respective terms subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally and except to
the extent that the enforceability of rights and remedies may be limited by
general principles of equity. The execution and delivery of this Restated
Agreement does not, and, subject to any requisite governmental or other consents
or approvals, the consummation of the transactions contemplated hereby and
thereby will not, (i) violate any provision of the Articles of Incorporation or
the regulations of each of Park-Ohio, in each case as amended, and POAC, (ii)
violate or conflict with any law, ordinance, rule, regulation, order, judgment
or decree to which either Park-Ohio or POAC is subject or by which either
Park-Ohio or POAC is bound (other than violations or conflicts which
individually or in the aggregate would not have a P-O Material Adverse Effect or
which would not prevent or delay the consummation of the
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transactions contemplated hereby), or (iii) violate or conflict with or
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or will result in the termination of, or
accelerate the performance required by, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or the
assets under, any term or provision of any contract, commitment, understanding,
arrangement, agreement or restriction of any kind or character to which Park-
Ohio or POAC is a party or by which either of them or any of their assets or
properties may be bound or affected (other than, in any such instance,
violations, conflicts, defaults, terminations, accelerations, liens, security
interests, charges or encumbrances which individually or in the aggregate would
not have a P-O Material Adverse Effect or which would not prevent or delay the
consummation of the transactions contemplated hereby). Except as set forth in
Schedule 6.2(b), no consent, approval, authorization or action by any
Governmental Agency or any other third party is required in connection with the
execution and delivery by each of Park-Ohio and POAC of this Restated Agreement
and the other documents and instruments to be executed and delivered by each of
Park-Ohio and POAC pursuant hereto or the consummation by each of Park-Ohio and
POAC of the transactions contemplated herein or therein.
(c) Capital Structure. Except for changes contemplated by this Restated
Agreement, Park-Ohio's authorized, issued, outstanding and reserved capital
stock is, as of October 31, 1994, as set forth on Schedule 6.2(c), and all of
the outstanding shares of its capital stock have been duly authorized and
validly issued and are fully paid and non-assessable and free from preemptive
rights. There are no outstanding options, warrants, convertible securities,
subscriptions or other rights or agreements providing for the issuance or
delivery of any additional shares of capital stock of Park-Ohio, except as set
forth on Schedule 6.2(c). The shares to be issued pursuant to this Restated
Agreement will be duly authorized and validly issued, fully paid, non-assessable
and free from preemptive rights.
(d) SEC Documents. Park-Ohio has made available to RB&W a true and
complete copy of each report, schedule, registration statement and definitive
proxy statement filed by Park-Ohio with the SEC since January 1, 1994 (as such
documents have since the time of their filing been amended, the "Park-Ohio SEC
Documents") which are all of the documents (other than preliminary material)
that Park-Ohio was required to file with the SEC since such date. As of their
respective dates, the Park-Ohio SEC Documents complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the SEC thereunder applicable to such
Park-Ohio SEC Documents, and none of the Park-Ohio SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of Park-Ohio included in the Park-Ohio SEC Documents comply as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of the unaudited statements, as permitted by
Form 10-Q of the SEC) and fairly present (subject, in the case of the unaudited
statements, to normal, recurring audit adjustments) the consolidated financial
position of Park-Ohio as at the dates thereof and the consolidated results of
its operations and cash flows for the periods then ended. Except as disclosed on
Schedule 6.2(d), to the best of its knowledge Park-Ohio is not now, nor has it
ever been, the subject of any review, study, audit, examination, inquiry or
other investigation by the SEC ("SEC Investigation"), nor, to the best knowledge
of Park-Ohio, is any such SEC Investigation pending or threatened.
(e) Vote Required. The affirmative vote of a majority of the votes that
Park-Ohio Shareholders are entitled to cast is the only vote necessary to
approve this Restated Agreement and the transactions contemplated hereby.
(f) Accounting Matters. Park-Ohio has not, through the date of this
Restated Agreement, taken or agreed to take any action that would prevent
accounting for the business combination to be effected by the Merger as a
pooling of interests.
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(g) Title to and Condition of Assets. Park-Ohio has good, marketable and
valid title in and to all of their respective assets, including all real,
personal and intangible property, and all such assets are in good, and where
appropriate, normal operating condition, except for such defects of title or
condition as would not have a material and adverse affect on Park-Ohio.
(h) Dividends and Distributions. Except as provided on Schedule 6.2(h),
since December 31, 1993, Park-Ohio has not (i) declared or paid any dividends on
any shares of its capital stock, (ii) made any other payments or distributions
on any shares of its capital stock to its shareholders, except mandatory cash
dividends on Park-Ohio preferred stock paid in accordance with the terms thereof
and regular quarterly cash dividends paid to the holders of its common stock, or
(iii) redeemed or repurchased any shares of its capital stock.
(i) Financial Statements. Park-Ohio has made available to RB&W an
unaudited balance sheet for Park-Ohio as of September 30, 1994, along with
related statements of income for the month and nine months ended September 30,
1994 (the "Park-Ohio Unaudited Financial Statements"); and audited consolidated
balance sheets of Park-Ohio as of December 31, 1993, along with related
consolidated statements of income for the year ended December 31, 1993 (the
"Park-Ohio Consolidated Audited Financial Statements"). Each of the balance
sheets contained in the Park-Ohio Unaudited Financial Statements and the
Park-Ohio Consolidated Audited Financial Statements (including the related notes
and schedules) fairly presents the financial position of Park-Ohio, as of its
date, and the statements of income included in the Park-Ohio Unaudited Financial
Statements and the Park-Ohio Consolidated Audited Financial Statements
(including any related notes and schedules) fairly present the results of
operations of Park-Ohio for the periods set forth therein in accordance with
generally accepted accounting principles consistently applied.
(j) Litigation and Claims. Except as set forth in the Park-Ohio SEC
Documents, there is no pending or to the best knowledge of Park-Ohio threatened
litigation, proceeding or investigation against Park-Ohio required to be
disclosed in a Form 10-K or 10-Q.
(k) Employee Benefits. Each of the Park-Ohio employee benefit plans has
been operated and administered in all material respects in accordance with
applicable laws, including but not limited to ERISA and the Code. No reportable
event within the meaning of section 403(b) of ERISA or prohibited transaction
within the meaning of section 406 of ERISA (where applicable) has occurred with
respect to any such plan, no civil penalty has been assessed pursuant to
sections 409 or 502(i) of ERISA, and no tax has been imposed pursuant to
sections 4975 or 4976 of the Code.
(l) Environmental Protection. Park-Ohio is in compliance with all
Environmental Laws applicable to the business of Park-Ohio, except where failure
to so comply would not have a material adverse affect on Park-Ohio.
(m) Absence of Certain Changes. Except as disclosed on Schedule 6.2(m),
since December 31, 1993, Park-Ohio has not suffered any P-O Material Adverse
Effect, it being understood and agreed that (i) nothing reflected directly or
indirectly in the information set forth in Schedule 6.2(m) and (ii) nothing
which RB&W is aware of shall be deemed to constitute a P-O Material Adverse
Effect for purposes of this Section.
(n) Loss Contingencies. Except as disclosed on Schedule 6.2(n), as of the
date hereof, to the best knowledge of Park-Ohio, Park-Ohio does not have any
loss contingencies coming within the scope of the Statement of Financial
Accounting Standards No. 5, which are reasonably likely to have a P-O Material
Adverse Effect, it being understood and agreed that nothing which RB&W is aware
of shall be deemed to constitute a loss contingency for purposes of this Section
6.2(n). All loss contingencies disclosed on Schedule 6.2(n) have been fully and
properly reserved against in the December 31, 1993 financial statements of Park-
Ohio.
(o) Brokers or Finders. Neither Park-Ohio nor POAC has employed any broker
or finder or incurred any liability for any brokerage fees, commissions,
finders' fees or similar fees or expenses in connection with this Restated
Agreement or the transactions contemplated hereby.
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ARTICLE VII
CONDITIONS
7.1 Conditions Precedent to the Obligations of All Parties. The
obligations of each of RB&W, Park-Ohio and POAC under this Restated Agreement
are subject to and shall be conditional upon the satisfaction, or waiver (in
whole or in part) by each, of each of the following conditions prior to the
Closing Date:
(a) Shareholder Approvals. This Restated Agreement shall have been
approved and adopted by the affirmative vote of a majority of the votes that the
RB&W Shareholders are entitled to cast, by the affirmative vote of a majority of
the votes that the Park-Ohio Shareholders are entitled to cast, and by Park-Ohio
as the sole shareholder of POAC.
(b) Registration Statement. The Registration Statement shall have become
effective under the Securities Act and shall not be the subject of any stop
order or proceedings seeking a stop order.
(c) Governmental and Other Approvals. In addition to the filing of the
Registration Statement, (i) RB&W and Park-Ohio shall have made all filings with,
and all relevant waiting periods shall have expired (including all filings
required to be made under the Hart-Scott-Rodino Act and waiting period in
connection therewith), and given all notices to and obtained all necessary
consents, authorizations and approvals from all governmental agencies which are
required to consummate the transactions contemplated in this Restated Agreement,
and (ii) all time for appeal, rehearing or reconsideration thereof shall have
expired.
(d) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order, restraint or prohibition
shall have been issued by any court of competent jurisdiction preventing the
consummation of the transactions contemplated by this Restated Agreement (each
party agreeing to use its reasonable best efforts, including appeals to higher
courts, to have any such order, injunction, legal restraint or prohibition set
aside or lifted), and no action shall have been taken, and no statute, rule or
regulation shall have been enacted, by any state or Federal government or
governmental agency or regulatory body that would prevent the consummation of
the transactions contemplated by this Restated Agreement.
7.2 Conditions Precedent to the Obligations of RB&W. The obligations of
RB&W under this Restated Agreement are subject to and shall be conditional upon
the satisfaction, or waiver (in whole or in part) by RB&W, of each of the
following conditions:
(a) Representations and Warranties True. The representations and
warranties of Park-Ohio and POAC contained herein shall have been true and
correct in all material respects on and as of the date of this Restated
Agreement, and shall be true and correct in all material respects on and as of
the Closing Date as if those representations and warranties were made on and as
of the Closing Date, except for changes permitted by the terms of this Restated
Agreement and except insofar as any of those representations and warranties
relate solely to a particular date or period, in which case they shall be true
and correct in all material respects on and as of the Closing Date with respect
to such date or period.
(b) Performance of Obligations and Agreements. Park-Ohio and POAC shall
each have performed all of their obligations and agreements contained in this
Restated Agreement to be performed or complied with by them on or before the
Closing Date.
(c) Resolutions. Each of Park-Ohio and POAC shall have delivered to RB&W
copies of the resolutions of its Board of Directors and shareholders (or sole
shareholder, in the case of POAC), authorizing and approving the execution of
this Restated Agreement and the consummation of the transactions contemplated
hereby, certified as true and correct on the Closing Date by its Secretary or an
Assistant Secretary.
(d) Officers' Certificates. Each of Park-Ohio and POAC shall have
delivered to RB&W a certificate dated on and as of the Closing Date and signed
by its Chief Executive Officer and Chief Financial Officer to the effect that
the conditions set forth in Sections 7.2(a) and 7.2(b) have been satisfied.
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(e) Opinion of Counsel for Park-Ohio and POAC. On the Closing Date, RB&W
shall have received from Squire, Sanders & Dempsey, counsel to Park-Ohio and
POAC, a written opinion in form and substance reasonably satisfactory to RB&W
dated the Closing Date, substantially to the effect that:
(i) Park-Ohio is a corporation duly organized, validly existing and in
good standing under the laws of the State of Ohio, and POAC is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, each with corporate power and authority to
own its properties and assets and to carry on its business;
(ii) Since the date of this Restated Agreement, there have been no
changes in the authorized or outstanding capital stock of Park-Ohio or the
options, warrants, convertible securities, subscriptions and other rights
or agreements listed on the Schedules to this Restated Agreement with
respect thereto, other than as a result of the exercise or conversion of
such options, warrants, convertible securities and other rights or
agreements and except as contemplated by this Restated Agreement, and all
of the issued and outstanding shares of Park-Ohio's capital stock, as
constituted just prior to the Closing Date, were duly authorized, validly
issued, fully paid, non-assessable and free from preemptive rights.
(iii) This Restated Agreement constitutes a legal, valid and binding
obligation of each of Park-Ohio and POAC enforceable against each of
Park-Ohio and POAC in accordance with its terms, subject to Title 11 United
States Code and other applicable bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium or other laws relating to or
affecting creditors' rights generally and general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity), and except that provisions requiring payment of attorney's
fees may not be enforced by courts applying Ohio law, and each of Park-Ohio
and POAC has the corporate power and has taken all requisite corporate
action to consummate the transactions contemplated in this Restated
Agreement.
(iv) Each share of the Park-Ohio Common Stock issuable under this
Restated Agreement will, when issued in accordance with this Restated
Agreement, be duly authorized, validly issued, fully paid and
non-assessable.
(f) Fairness Opinion. RB&W shall, at the sole expense of RB&W, have
received from McDonald and Company, Inc. an opinion that as of the Closing Date
the Merger Consideration (as set forth in Section 3.1(b)) is fair, from a
financial standpoint, to RB&W.
(g) Consents and Approvals. Park-Ohio shall have obtained all necessary
consents, authorizations and approvals from all governmental agencies.
(h) No P-O Material Adverse Effect. From the date of this Restated
Agreement through the Closing date, Park-Ohio shall not have suffered a P-O
Material Adverse Effect.
7.3 Conditions Precedent to the Obligations of Park-Ohio and POAC. The
obligations of Park-Ohio and POAC under this Restated Agreement are subject to
and shall be conditional upon the satisfaction, or waiver (in whole or in part)
by Park-Ohio and POAC of each of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of RB&W contained herein shall have been true and correct in all
material respects on and as of the date of this Restated Agreement, and shall be
true and correct in all material respects on and as of the Closing Date as if
those representations and warranties were made on and as of the Closing Date,
except for changes permitted by the terms of this Restated Agreement and except
insofar as any of those representations and warranties relate solely to a
particular date or period, in which case they shall be true and correct in all
material respects on and as of the Closing Date with respect to such date or
period.
(b) Performance of Obligations and Agreements. RB&W shall have performed
all of its obligations and agreements contained in this Restated Agreement to be
performed or complied with by it on or before the Closing Date.
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(c) Resolutions. RB&W shall have delivered to Park-Ohio copies of the
resolutions of its Board of Directors and the RB&W Shareholders, authorizing and
approving the execution of this Restated Agreement and the consummation of the
transactions contemplated hereby, certified as true and correct on the Closing
Date by its Secretary or an Assistant Secretary.
(d) Officers' Certificate. RB&W shall have delivered to Park-Ohio a
certificate dated on and as of the Closing Date and signed by the Chief
Executive Officer and the Chief Financial Officer of RB&W to the effect that the
conditions set forth in Sections 7.3(a) and 7.3(b) have been satisfied.
(e) Opinion of Counsel for RB&W. On the Closing Date, Park-Ohio shall have
received from Baker & Hostetler, counsel to RB&W, a written opinion in form and
substance reasonably satisfactory to Park-Ohio, dated the Closing Date,
substantially to the effect that:
(i) RB&W is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with corporate power and
authority to own its properties and assets and to carry on its business;
(ii) Since the date of this Restated Agreement, there have been no
changes in the authorized or outstanding capital stock of RB&W or the
options, warrants, convertible securities, subscriptions and other rights
or agreements listed on the Schedules to this Restated Agreement with
respect thereto, other than as a result of the exercise or conversion of
such options, warrants, convertible securities and other rights or
agreements and except as contemplated by this Restated Agreement, and all
of the issued and outstanding shares of RB&W's capital stock, as
constituted just prior to the Closing Date, were duly authorized, validly
issued, fully paid, non-assessable and free from preemptive rights;
(iii) This Restated Agreement constitutes a legal, valid and binding
obligation of RB&W enforceable against RB&W in accordance with its terms,
subject to Title 11 United States Code and other applicable bankruptcy,
insolvency, reorganization, arrangement, fraudulent conveyance, moratorium
or other laws relating to or affecting creditors' rights generally and
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity) and except that provisions
requiring payment of attorneys' fees may not be enforced by courts applying
Ohio law, and RB&W has the corporate power and has taken all requisite
corporate action to consummate the transactions contemplated in this
Restated Agreement; and
(iv) The authorized capital stock of RB&W consists solely of Ten
Million (10,000,000) shares of common stock, $1.00 par value, of which Five
Million Nine Hundred Forty-Four Thousand Four Hundred Sixty-Nine
(5,944,469) shares are issued and outstanding, Seven Hundred Ninety
Thousand (790,000) shares are reserved for purchase under outstanding stock
purchase rights, and no shares are held as treasury shares.
(f) Consents and Approvals. RB&W shall have obtained all necessary
consents, authorizations and approvals from all Governmental Agencies.
(g) No Material Adverse Effect. From the date of this Restated Agreement
through the Closing Date, RB&W and LSC taken as a whole shall not have suffered
a Material Adverse Effect.
(h) RB&W GECC Agreement. RB&W shall have obtained all necessary approvals
and consents for the consummation of this Restated Agreement as may be required
under the Credit Agreement with General Electric Capital Corporation dated
October 20, 1993 and shall have made no changes with respect to that agreement
that are not acceptable to Park-Ohio.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Bases for Termination. This Restated Agreement may be terminated at
any time prior to the Closing Date, without the creation of any liability by
reason of such act of termination (other than under Section 8.3), as follows:
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(a) By consent evidenced in writing signed by RB&W, Park-Ohio and POAC.
(b) By RB&W:
(i) if the Closing Date has not occurred on or before the later of
March 31, 1995 or the date that is five business days following the RB&W
Special Meeting, or such later time as shall have been agreed to in writing
by Park-Ohio, unless the failure of such to occur has resulted from the
failure of RB&W to satisfy any of the closing conditions set forth in
Sections 7.1 and 7.3 hereof;
(ii) except as otherwise provided in clause (c)(iii) below, if
Park-Ohio or POAC shall have failed, in any material respect, to perform or
comply with their obligations under this Restated Agreement within 10 days
after notice thereof has been given to Park-Ohio and POAC;
(iii) if RB&W is unable, after all reasonable best efforts have been
undertaken, to deliver one or more of the deliveries from third parties
listed on Schedule 5.1(a), and Park-Ohio and POAC refuse to waive such
delivery; or
(iv) if RB&W receives and accepts another bid for the sale of RB&W or
enters into a Third Party Acquisition (as hereinafter defined); provided,
however, that such termination shall in no way prejudice Park-Ohio's and
POAC's rights under Article IX below.
(c) By Park-Ohio and POAC:
(i) if the Closing Date has not occurred on or before the later of
March 31, 1995 or the date that is five business days following the
Park-Ohio Special Meeting, or such later time as shall have been agreed to
in writing by RB&W, unless the failure of such to occur has resulted from
the failure of Park-Ohio to satisfy any of the closing conditions set forth
in Sections 7.1 and 7.2 hereof;
(ii) except as otherwise provided in clause (b)(iii) above, if RB&W
shall have failed in any material respect to perform or comply with its
obligations under this Restated Agreement within 10 days after notice
thereof has been given to RB&W;
(iii) if Park-Ohio and POAC are unable, after all reasonable best
efforts have been undertaken, to deliver one or more of the deliveries from
third parties listed on Schedule 5.1(a), and RB&W refuses to waive such
delivery.
(d) By RB&W or Park-Ohio if (i) any Governmental Agency which is required
to grant a consent, authorization or approval in order to consummate the
transactions contemplated by this Restated Agreement shall have determined not
to grant its consent and all possible appeals of such determination shall have
been taken and have been unsuccessful, or (ii) any court of competent
jurisdiction in the United States or any State shall have issued an order,
judgment or decree (other than a temporary restraining order) restraining,
enjoining or otherwise prohibiting the transactions contemplated in this
Restated Agreement, and such order, judgment or decree shall have become final
and nonappealable.
8.2 Written Notice. In order to terminate this Restated Agreement in
accordance with Section 8.1 hereof, the party so acting shall give written
notice thereof to the other party hereto, specifying the grounds therefor.
8.3 Effect of Termination. In the event of termination of this Restated
Agreement in accordance with Sections 8.1 and 8.2, this Restated Agreement shall
become void and have no further force or effect, and there shall be no liability
on the part of RB&W, Park-Ohio or POAC (or their respective officers, directors,
shareholders, agents or representatives), except to the extent set forth in
Section 9.1.
8.4 Amendment. This Restated Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after the RB&W Shareholders' Approval and the Park-Ohio
Shareholders' Approval, but, after such approvals, no amendment shall be made
that by law requires further approval by such shareholders without such further
approval. This Restated Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
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ARTICLE IX
GENERAL PROVISIONS
9.1 Expenses. Except as provided below in this Section 9.1, all expenses
(including, without limitation, accounting and legal fees) will be paid by the
party incurring them; provided, however, if this Restated Agreement is
terminated pursuant to Section 8.1(b)(ii) or 8.1(c)(ii), then the defaulting
party shall pay the expenses of the non-defaulting party. In the event this
Restated Agreement is terminated by RB&W pursuant to Section 8.1(b)(iv) or by
Park-Ohio pursuant to Section 8.1(d), RB&W shall reimburse Park-Ohio for all
expenses incurred by Park-Ohio in connection with the Agreement dated November
29, 1994 among Park-Ohio, POAC and RB&W, this Restated Agreement and the
transactions contemplated hereby and thereby, such reimbursement in no event to
exceed $1,000,000.
9.2 Break-Up Fee. In the event that RB&W receives and accepts another bid
for the sale of RB&W or enters into a Third Party Acquisition (as hereinafter
defined) prior to the termination of this Restated Agreement or within nine
months thereafter, RB&W shall pay to Park-Ohio, in addition to the expenses
described in Section 9.1 above, within five business days following such event,
a fee, in cash, equal to $800,000. Notwithstanding anything to the contrary
contained in this Section 9.2, RB&W shall not be liable to Park-Ohio for any
amounts described in this Section 9.2 if (i) Park-Ohio or POAC shall have
failed, in any material respect, to perform or comply with any of their
obligations under this Restated Agreement or (ii) this Restated Agreement is
terminated due to the failure of the parties to obtain all necessary consents,
authorizations and approvals under the HSR Act and from all Governmental
Agencies which are required to consummate the transactions contemplated in this
Restated Agreement, unless such failure is due to the breach of RB&W of any of
its material obligations under this Restated Agreement.
"Third Party Acquisition" means the occurrence of any of the following
events (whether in a single transaction or a series of related transactions);
(i) RB&W is acquired by merger or otherwise by any "person" (as such term is
defined in Section 13(d)(3) of the Exchange Act) other than Park-Ohio or any
affiliate thereof (a "Third Party"); (ii) a Third Party acquires more than 50%
of the total assets of RB&W and its subsidiaries taken as a whole; (iii) a Third
Party acquires (whether directly from RB&W or through open market purchases, a
tender offer, privately negotiated purchases or otherwise) more than 50% of the
outstanding RB&W Common Stock or other securities entitling such person to
exercise a majority of the total voting power of RB&W in the election of
directors; (iv) RB&W adopts and implements a plan of liquidation or declares an
extraordinary dividend or similar distribution relating to more than 50% of its
total assets; (v) RB&W or its subsidiary repurchases or otherwise acquires (by
means of a reverse stock split, subdivision, reclassification or combination of
Shares or otherwise) more than 50% of the outstanding RB&W Common Stock, or (vi)
RB&W or its Board of Directors shall have withdrawn its recommendation of the
Merger or shall have failed to reaffirm such recommendation upon the request of
Park-Ohio.
9.3 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given (and shall be deemed to have
been duly received if so given), when addressed as follows:
To Park-Ohio at:
Park-Ohio Industries, Inc.
600 Tower East
20600 Chagrin Boulevard
Cleveland, Ohio 44122
Attention: Ronald J. Cozean, Secretary and General Counsel
With a copy to:
Squire, Sanders & Dempsey
Attn: Mary Ann Jorgenson
4900 Society Center
127 Public Square
Cleveland, Ohio 44114-1304
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To RB&W at:
RB&W Corporation
23001 Euclid Avenue
Cleveland, Ohio 44117
Attn: Ronald K. Leirvik, President and Chief Executive Officer
With a copy to:
Baker & Hostetler
Attn: William Appleton
3200 National City Center
Cleveland, Ohio 44114
Except as otherwise specified herein, all notices and other communications
shall be deemed to have been duly given on the first to occur of (a) the date of
delivery if delivered personally on a business day during normal business hours,
and, if not, on the next occurring business day, (b) five days following posting
if transmitted by mail, (c) the date of transmission with confirmed answer-back
if transmitted by telex on a business day during normal business hours, and, if
not, on the next occurring business day, or (d) the date of receipt if
transmitted by telecopier or facsimile on a business day during normal business
hours, and, if not, on the next occurring business day. Any party may change his
or its address for purposes hereof by notice to the other party given as
provided in this Section.
9.4 Corporate Action. Any waiver by RB&W, Park-Ohio or POAC hereunder shall
be authorized by its Board of Directors. Any action by the Board of Directors of
RB&W, Park-Ohio or POAC shall be evidenced by the certificate of its Secretary
or Assistant Secretary.
9.5 Governing Law. Except to the extent required to comply with the
provisions of other jurisdictions, this Restated Agreement shall be governed by
and construed in accordance with the laws of the State of Ohio, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law.
9.6 Successors. References in this Restated Agreement to particular
persons, firms, agencies, statutes, regulations and the like shall be considered
as references to any successors thereto.
9.7 Assignment. This Restated Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Restated Agreement
nor any of the rights, interests, or obligations hereunder is otherwise
assignable, or shall be assigned (whether by operation of law or otherwise), by
any of the parties without the prior written consent of the other parties.
9.8 Counterparts. This Restated Agreement may be executed in counterparts,
each of which shall be deemed an original, but both of which together shall
constitute one and the same agreement.
9.9 Entire Agreement. This Restated Agreement contains the entire agreement
among the parties hereto with respect to the Merger and the other transactions
contemplated hereby, and supersedes all prior agreements among the parties with
respect to such matters other than the Confidentiality Agreement attached as
Schedule 5.3(b) hereof.
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IN WITNESS WHEREOF, each party hereto has caused this Restated Agreement to
be duly executed as of the date first above written.
PARK-OHIO INDUSTRIES, INC.
By:/s/ EDWARD F. CRAWFORD
Edward F. Crawford
Chairman and Chief Executive
Officer
P.O. ACQUISITION COMPANY, INC.
By:/s/ EDWARD F. CRAWFORD
Edward F. Crawford
Chairman and Chief Executive
Officer
RB&W CORPORATION
By:/s/ LAWRENCE O. SELHORST
Lawrence O. Selhorst
Chairman of the Board of
Directors
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APPENDIX B
FORM OF OPINION OF
MCDONALD & COMPANY SECURITIES, INC.
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MCDONALD & COMPANY
SECURITIES, INC.
MEMBER NEW YORK STOCK EXCHANGE
SUITE 2100
800 SUPERIOR AVENUE
CLEVELAND, OHIO 44114-2603
216-443-2300
February 6, 1995
Board of Directors
RB&W Corporation
23001 Euclid Avenue
Cleveland, Ohio 44106
Gentlemen:
You have requested our opinion as to the fairness, from a financial point
of view, to the holders of the outstanding shares of Common Stock, par value
$1.00 per share ("RB&W Common Stock") of RB&W Corporation ("RB&W" or the
"Company") of the consideration to be received by such holders pursuant to the
Amended and Restated Plan and Agreement of Merger dated February 6, 1995 among
the Company, Park-Ohio Industries, Inc. ("Park-Ohio") and P.O. Acquisition
Company, Inc. (the "Agreement"). Pursuant to the Agreement, each outstanding
share of RB&W Common Stock will be entitled to receive .33394 shares of
Park-Ohio Common Stock and $4.45 in cash.
McDonald & Company Securities, Inc., as part of its investment banking
business, is customarily engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate and
other purposes.
In connection with rendering this opinion, we have reviewed and analyzed,
among other things, the following: (i) the Agreement, including the exhibits and
schedules thereto; (ii) Annual Reports to stockholders and Annual Reports on
Form 10-K of the Company and Park-Ohio for the five years ended December 31,
1993 and Quarterly Reports on Form 10-Q of the Company and Park-Ohio; (iii)
certain other internal information, primarily financial in nature, including
projections, concerning the business and operations of the Company furnished to
us by the Company and Park-Ohio for purposes of our analysis; (iv) certain
publicly available information concerning the trading of, and the trading market
for, the RB&W Common Stock and the Park-Ohio Common Stock; (v) certain publicly
available information with respect to certain other companies that we believe to
be comparable to the Company or to Park-Ohio and the trading markets for certain
of such other companies' securities; and (vi) certain publicly available
information concerning the nature and terms of certain other transactions that
we consider relevant to our inquiry. We have also met with certain officers and
employees of the Company and Park-Ohio to discuss the past and current business
operations, financial condition and future prospects of their respective
companies, as well as other matters we believe relevant to our inquiry. We were
not requested to solicit and did not solicit interest from other parties in a
potential business combination.
In rendering this opinion we have also reviewed and analyzed the terms of a
letter dated February 6, 1995 from TransTechnology Corporation
("TransTechnology") to RB&W pursuant to which TransTechnology offered to acquire
RB&W in a two-step process involving a cash tender offer for 81% of RB&W Common
Stock followed by an acquisition of the remaining shares via exchange for common
stock of TransTechnology with total aggregate consideration of approximately
$9.00 per share of RB&W Common Stock. Our opinion does not, however, address the
relative merits of the transaction contemplated pursuant to the Agreement as
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compared to the TransTechnology offer or any other alternative business
transaction that might be available to the Company.
In our review and analysis and in arriving at our opinion, we have assumed
and relied upon the accuracy and completeness of all of the financial and other
information provided us or publicly available and have assumed and relied upon
the representations and warranties of the Company and Park-Ohio contained in the
Agreement and were not engaged to, nor have we independently attempted to verify
any of such information. We have also relied upon the managements of the Company
and Park-Ohio as to the reasonableness and achievability of the financial and
operating projections (and the assumptions and bases therefor) provided to us
and, with your consent, we have assumed that such projections, including
projected cost savings and operating synergies reflect the best currently
available estimates and judgments of such respective managements of the Company
and Park-Ohio and that such projections and forecasts will be realized in the
amounts and in the time periods currently estimated by the managements of the
Company and Park-Ohio. We express no view as to such projections or the
assumptions on which they are based. In addition, we were not engaged to, nor
have we conducted a physical inspection or appraisal of any of the assets,
properties or facilities of either the Company or Park-Ohio nor have we been
furnished with any such evaluation or appraisal. It should be noted that this
opinion is based on economic and market conditions and other circumstances
existing on, and information made available as of, the date hereof and does not
address any matters subsequent to such date.
In the ordinary course of our business, we may actively trade securities of
both the Company and Park-Ohio for our own account and for the accounts of
customers and, accordingly, may at any time hold a long or short position in
such securities.
Based upon and subject to the foregoing and such other matters as we
consider relevant, it is our opinion that as of the date hereof, the
consideration to be received pursuant to the Agreement is fair, from a financial
point of view, to the holders of RB&W Common Stock.
Very truly yours,
McDONALD & COMPANY SECURITIES, INC.
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<PAGE> 101
APPENDIX C
OHIO DISSENTERS' RIGHTS STATUTE
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RELIEF TO DISSENTING SHAREHOLDER
OF DOMESTIC CORPORATION
OHIO REVISED CODE 1701.85
(A) (1) A shareholder of a domestic corporation is entitled to relief as a
dissenting shareholder in respect of the proposals in sections 1701.71, 1701.74,
and 1701.84 of the Revised Code, only in compliance with this section.
(2) If the proposal must be submitted to the shareholders of the
corporation involved, the dissenting shareholder shall be a record holder of the
shares of the corporation as to which he seeks relief as of the date fixed for
the determination of shareholders entitled to notice of a meeting of the
shareholders at which the proposal is to be submitted, and such shares shall not
have been voted in favor of the proposal. Not later than ten days after the date
on which the vote on such proposal was taken at the meeting of the shareholders,
the shareholder shall deliver to the corporation a written demand for payment to
him of the fair cash value of the shares as to which he seeks relief, stating
his address, the number and class of such shares, and the amount claimed by him
as the fair cash value of the shares.
(3) The dissenting shareholder entitled to relief under division (C) of
section 1701.84 of the Revised Code in the case of a merger pursuant to section
1701.80 of the Revised Code and a dissenting shareholder entitled to relief
under division (E) of section 1701.84 of the Revised Code in the case of a
merger pursuant to section 1701.801 of the Revised Code shall be a record holder
of the shares of the corporation as to which he seeks relief as of the date on
which the agreement of merger was adopted by the directors of that corporation.
Within twenty days after he has been sent the notice provided in section 1701.80
or 1701.801 [1701.80.1] of the Revised Code, the shareholder shall deliver to
the corporation a written demand for payment with the same information as that
provided for in division (A)(2) of this section.
(4) In the case of a merger or consolidation, a demand served on the
constituent corporation involved constitutes service on the surviving or the new
corporation, whether served before, on, or after the effective date of the
merger or consolidation.
(5) If the corporation sends to the dissenting shareholder, at the
address specified in his demand, a request for the certificates representing the
shares as to which he seeks relief, he, within fifteen days from the date of the
sending of such request, shall deliver to the corporation the certificates
requested, in order that the corporation may forthwith endorse on them a legend
to the effect that demand for the fair cash value of such shares has been made.
The corporation promptly shall return such endorsed certificates to the
shareholder. Failure on the part of the shareholder to deliver such certificates
terminates his rights as a dissenting shareholder, at the option of the
corporation, exercised by written notice sent to him within twenty days after
the lapse of the fifteen-day period, unless a court for good cause shown
otherwise directs. If shares represented by a certificate on which such a legend
has been endorsed are transferred, each new certificate issued for them shall
bear a similar legend, together with the name of the original dissenting holder
of such shares. Upon receiving a demand for payment from a dissenting
shareholder who is the record holder of uncertificated securities, the
corporation shall make an appropriate notation of the demand for payment in its
shareholder records. If uncertificated shares for which payment has been
demanded are to be transferred, any new certificate issued for the shares shall
bear the legend required for certificated securities as provided in this
paragraph. A transferee of the shares so endorsed, or of uncertificated
securities where such notation has been made, acquires only such rights in the
corporation as the original dissenting holder of such shares had immediately
after the service of a demand for payment of the fair cash value of the shares.
Such request by the corporation is not an admission by the corporation that the
shareholder is entitled to relief under this section.
(B) Unless the corporation and the dissenting shareholder shall have come
to an agreement on the fair cash value per share of the shares as to which he
seeks relief, the shareholder or the corporation, which in case of a merger or
consolidation may be the surviving or the new corporation, within three months
after the service of the demand by the shareholder, may file a complaint in the
court of common pleas of the county in which the principal office of the
corporation which issued such shares is located, or was located at the time when
the proposal was adopted by the shareholders of the corporation, or, if the
proposal was not required to be
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submitted to the shareholders, was approved by the directors. Other dissenting
shareholders, within the period of three months, may join as plaintiffs, or may
be joined as defendants in any such proceeding, and any two or more such
proceedings may be consolidated. The complaint shall contain a brief statement
of the facts, including the vote and the facts entitling the dissenting
shareholder to the relief demanded. No answer to such complaint is required.
Upon the filing of the complaint, the court, on motion of the petitioner, shall
enter an order fixing a date for a hearing on the complaint, and requiring that
a copy of the complaint and a notice of the filing and of the date for hearing
be given to the respondent or defendant in the manner in which summons is
required to be served or substituted service is required to be made in other
cases. On the day fixed for the hearing on the complaint or any adjournment of
it, the court shall determine from the complaint and from such evidence as is
submitted by either party whether the shareholder is entitled to be paid the
fair cash value of any shares and, if so, the number and class of such shares.
If the court finds that the shareholder is so entitled, the court may appoint
one or more persons as appraisers to receive evidence and to recommend a
decision on the amount of the fair cash value. The appraisers have such power
and authority as is specified in the order of their appointment. The court
thereupon shall make a finding as to the fair cash value of a share, and shall
render judgment against the corporation for the payment of it, with interest at
such rate and from such date as the court considers equitable. The costs of the
proceeding, including reasonable compensation to the appraisers to be fixed by
the court, shall be assessed or apportioned as the court considers equitable.
The proceeding is a special proceeding, and final orders in it may be vacated,
modified, or reversed on appeal pursuant to the rules of appellate procedure
and, to the extent not in conflict with those rules, Chapter 2505 of the Revised
Code. If, during the pendency of any proceeding instituted under this section, a
suit or proceeding is or has been instituted to enjoin or otherwise to prevent
the carrying out of the action as to which the shareholder has dissented, the
proceeding instituted under this section shall be stayed until the final
determination of the other suit or proceeding. Unless any provision in division
(D) of this section is applicable, the fair cash value of the shares as agreed
upon by the parties or as fixed under this section shall be paid within thirty
days after the date of final determination of such value under this division,
the effective date of the amendment to the articles, or the consummation of the
other action involved, whichever occurs last. Upon the occurrence of the last
such event, payment shall be made immediately to a holder of uncertificated
securities entitled to such payment. In the case of holders of shares
represented by certificates, payment shall be made only upon and simultaneously
with the surrender to the corporation of the certificates representing the
shares for which such payment is made.
(C) If the proposal was required to be submitted to the shareholders of the
corporation, fair cash value as to those shareholders shall be determined as of
the day prior to that on which the vote by the shareholders was taken and, in
the case of a merger pursuant to section 1701.80 or 1701.801 [1701.80.1] of the
Revised Code, fair cash value as to shareholders of a constituent subsidiary
corporation shall be determined as of the day before the adoption of the
agreement of merger by the directors of the particular subsidiary corporation.
The fair cash value of a share for the purposes of this section is the amount
that a willing seller, under no compulsion to sell, would be willing to accept,
and that a willing buyer, under no compulsion to purchase, would be willing to
pay, but in no event shall the fair cash value of it exceed the amount specified
in the demand of the particular shareholder. In computing such fair cash value,
any appreciation or depreciation in market value resulting from the proposal
submitted to the directors or to the shareholders shall be excluded.
(D) The right and obligation of a dissenting shareholder to receive such
fair cash value and to sell such shares as to which he seeks relief, and the
right and obligation of the corporation to purchase such shares and to pay the
fair cash value of them terminates if:
(1) Such shareholder has not complied with this section, unless the
corporation by its directors waives such failure;
(2) The corporation abandons, or is finally enjoined or prevented from
carrying out, or the shareholders rescind their adoption, of the action
involved;
(3) The shareholder withdraws his demand, with the consent of the
corporation by its directors;
(4) The corporation and the dissenting shareholder shall not have come
to an agreement as to the fair cash value per share, and neither the
shareholder nor the corporation shall have filed or joined in a complaint
under division (B) of this section within the period provided.
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(E) From the time of giving the demand, until either the termination of the
rights and obligations arising from it or the purchase of the shares by the
corporation, all other rights accruing from such shares, including voting and
dividend or distribution rights, are suspended. If during the suspension, any
dividend or distribution is paid in money upon shares of such class, or any
dividend, distribution, or interest is paid in money upon any securities issued
in extinguishment of or in substitution for such shares, an amount equal to the
dividend, distribution, or interest which, except for the suspension, would have
been payable upon such shares or securities, shall be paid to the holder of
record as a credit upon the fair cash value of the shares. If the right to
receive fair cash value is terminated otherwise than by the purchase of the
shares by the corporation, all rights of the holder shall be restored and all
distributions which, except for the suspension, would have been made shall be
made to the holder of record of the shares at the time of termination.
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APPENDIX D
DELAWARE DISSENTERS'
RIGHTS STATUTE
D-1
<PAGE> 106
DELAWARE DISSENTERS' RIGHTS STATUTE
(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares through
the effective date of the merger or consolidation, who has otherwise complied
with subsection (d) of this section and who has neither voted in favor of the
merger or consolidation nor consented thereto in writing pursuant to sec.228 of
this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of his shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the word
"stockholder" means a holder of record of stock in a stock corporation and also
a member of record of a nonstock corporation; the words "stock" and "share" mean
and include what is ordinarily meant by those words and also membership or
membership interest of a member of a nonstock corporation; and the words
"depository receipt" mean a receipt or other instrument issued by a depository
representing an interest in one or more shares, or fractions thereof, solely of
stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec.sec.251, 252, 254, 257, 258, 263 or 264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the holders of the surviving corporation as
provided in subsection (f) of sec.251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
sec.sec.251, 252, 254, 257, 263 and 264 of this title to accept for such
stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock or depository receipts at the
effective date of the merger or consolidation will be either listed on a
national securities exchange or designated as a national market system
security on an interdealer quotation system by the National Association
of Securities Dealers, Inc. or held of record by more than 2,000
holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under sec.253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a
D-2
<PAGE> 107
provision, the procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsections (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of his shares
shall deliver to the corporation, before taking of the vote on the merger
or consolidation, a written demand for appraisal of his shares. Such demand
will be sufficient if it reasonably informs the corporation of the identity
of the stockholder and that the stockholder intends thereby to demand the
appraisal of his shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as herein
provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to sec.228 or
253 of this title, the surviving or resulting corporation, either before
the effective date of the merger or consolidation or within 10 days
thereafter, shall notify each of the stockholders entitled to appraisal
rights of the effective date of the merger or consolidation and that
appraisal rights are available for any or all of the shares of the
constituent corporation, and shall include in such notice a copy of this
section. The notice shall be sent by certified or registered mail, return
receipt requested, addressed to the stockholder at his address as it
appears on the records of the corporation. Any stockholder entitled to
appraisal rights may, within 20 days after the date of mailing of the
notice, demand in writing from the surviving or resulting corporation the
appraisal of his shares. Such demand will be sufficient if it reasonably
informs the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of his shares.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw his demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
his written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d) hereof, whichever is
later.
(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Registrar in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington,
D-3
<PAGE> 108
Delaware or such publication as the Court deems advisable. The forms of the
notices by mail and by publication shall be approved by the Court, and the costs
thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted his
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that he is
not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertified stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expense incurred by any stockholder in connection with the appraisal proceeding,
including, without limitation, reasonable attorney's fees and the fees and
expenses of experts, to be charged pro rata against the value of all the shares
entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal rights as provided in subsection (d)
of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder shall deliver
to the surviving or resulting corporation a written withdrawal of his demand for
an appraisal and an acceptance of the merger or consolidation, either within 60
days after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery
shall be dismissed as to any stockholder without the approval of the Court, and
such approval may be conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
D-4
<PAGE> 109
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 1701.13(E) of the Ohio General Corporation Law sets forth
provisions which define the extent to which a corporation may indemnify
directors, officers, and employees. Section 34 of Registrant's Code of
Regulations provides that Registrant may indemnify its directors and officers to
the full extent and according to the procedures set forth in the Ohio General
Corporation Law. In addition, the directors and certain officers of the
Registrant are each parties to indemnification agreements with Registrant giving
such officer or director the benefits of (i) the Articles of Incorporation and
Code of Regulations, (ii) any insurance purchased by the Registrant to provide
such indemnification to the directors, officers and other persons, and (iii)
Ohio law then in effect. Under Ohio law directors of Registrant would, under
most circumstances, be entitled to advancement of litigation and similar
expenses related to lawsuits or claims arising from such persons' services as a
director. A director of Registrant would be liable in damages for actions taken
as a director only if shown with clear and convincing evidence that the
director's acting or failure to act was done with deliberate intent to cause
injury to the corporation or with reckless disregard for the best interests of
the corporation. The directors are entitled to mandatory advancement of expenses
incurred in defending any action provided the director agrees to cooperate in
the matter and repay amounts advanced if it is proved by clear and convincing
evidence that his act or failure to act was done with deliberate intent to cause
injury to the corporation or with reckless disregard for its best interests.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
See Exhibit Index at page II-4.
(B) FINANCIAL STATEMENT SCHEDULES
All financial statement schedules have been omitted because the required
information is shown in the financial statements and related notes thereto
contained in the accompanying Annual Reports on Forms 10-K.
ITEM 22. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(b) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant
to Items 4, 10(b), 11, or 13 of this Form, within one business day of
receipt of such request, and to send the incorporated documents by first
class mail or other equally prompt means. This includes information
contained in the documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(c) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(d) The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is
II-1
<PAGE> 110
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to
be presented by Article 3 of Regulation S-X are not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
II-2
<PAGE> 111
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Post-effective Amendment No. 1 to Form S-4 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cleveland, State of Ohio, on February 10, 1995.
PARK-OHIO INDUSTRIES, INC.
By: /s/ RONALD J. COZEAN
Ronald J. Cozean
Secretary and General
Counsel
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------- ------------------------------------- ------------------
<S> <C> <C>
Edward F. Crawford* Chairman, President, Chief Executive February 10, 1995
Edward F. Crawford Officer, and Director
(Principal Executive Officer)
James S. Walker* Vice President, Treasurer and February 10, 1995
James S. Walker Controller (Principal
Financial and Accounting Officer)
John J. Murray* Director February 10, 1995
John J. Murray
Richard S. Sheetz* Director February 10, 1995
Richard S. Sheetz
Thomas E. McGinty* Director February 10, 1995
Thomas E. McGinty
James W. Wert* Director February 10, 1995
James W. Wert
Lewis E. Hatch* Director February 10, 1995
Lewis E. Hatch
</TABLE>
*By /s/ RONALD J. COZEAN
Ronald J. Cozean
Attorney-in-fact
II-3
<PAGE> 112
<TABLE>
INDEX TO EXHIBITS
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGE
- ----------- -------------------------------------------------------------------- -----------
<S> <C> <C>
2.1 Amended and Restated Plan and Agreement of Merger dated February 6,
1995 among Park-Ohio, POAC and RB&W (incorporated herein by
reference to Appendix A to the Prospectus and Joint Proxy Statement
included in this Registration Statement).
5.1 Opinion of Squire, Sanders & Dempsey regarding legality of
securities being offered, including consent.
15.1 Acknowledgment Letter of Ernst & Young LLP
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Price Waterhouse LLP.
23.3 Consent of Squire, Sanders & Dempsey is contained in its opinion
filed as Exhibit 5 hereto.
23.4 Consent of McDonald & Company.
99.1 Form of Proxy for Park-Ohio Reconvened Special Meeting.
99.2 Form of Proxy for RB&W Reconvened Special Meeting.
</TABLE>
II-4
<PAGE> 1
EXHIBIT 5.1
February 10, 1995
Park-Ohio Industries, Inc.
600 Tower East
20600 Chagrin Boulevard
Cleveland, Ohio 44122
Gentlemen:
Reference is made to your Registration Statement on Form S-4 filed with the
Securities and Exchange Commission on December 9, 1994, as amended on December
14, 1994, December 22, 1994 and February 10, 1995, with respect to 2,248,942
shares of common stock, $1.00 par value of Park-Ohio Industries, Inc. ("Park-
Ohio") ("Park-Ohio Common Stock") that may be issued in connection with the
merger of P.O. Acquisition Company ("POAC"), a wholly-owned subsidiary of
Park-Ohio, with and into RB&W Corporation ("RB&W") pursuant to the Amended and
Restated Plan and Agreement of Merger dated February 6, 1995 among Park-Ohio,
POAC and RB&W ("Restated Agreement").
In connection with the following opinion, we have examined such documents
and such questions of fact and law as we consider appropriate and necessary.
Based upon the foregoing, we are of the opinion that the Park-Ohio Common
Stock, when issued and exchanged by Park-Ohio pursuant to the terms and
conditions of the Restated Agreement, will be legally issued, fully paid, and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
aforesaid Registration Statement and to the use of our name under the caption
"Legal Matters" in the Prospectus and Joint Proxy Statement contained therein.
Respectfully Submitted,
/s/ SQUIRE, SANDERS & DEMPSEY
Squire, Sanders & Dempsey
<PAGE> 1
EXHIBIT 15.1
ACKNOWLEDGMENT LETTER OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
Park-Ohio Industries, Inc.
We are aware of the incorporation by reference in Post-Effective Amendment
No. 1 to the Registration Statement on Form S-4 and related Prospectus of
Park-Ohio Industries, Inc. for the registration of 2,248,942 shares of its
common stock of our review reports dated April 15, 1994, July 15, 1994 and
October 28, 1994 relating to the unaudited consolidated condensed interim
financial statements of Park-Ohio Industries, Inc. which are included in its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1994, June 30,
1994 and September 30, 1994.
Pursuant to Rule 436(c) of the Securities Act of 1933 our reports are not a
part of the Registration Statement prepared or certified by accountants within
the meaning of Section 7 or 11 of the Securities Act of 1933.
/s/ ERNST & YOUNG LLP
Ernst & Young LLP
Cleveland, Ohio
February 9, 1995
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Post-Effective Amendment No. 1 to the Registration Statement on Form S-4 and
related Prospectus of Park-Ohio Industries, Inc. for the registration of
2,248,942 shares of its common stock and to the incorporation by reference
therein of our report dated September 24, 1993, with respect to the consolidated
financial statements of General Aluminum Manufacturing Company for the year
ended December 31, 1992, included in Park-Ohio Industries, Inc.'s Current Report
on Form 8-KA as filed with the Securities and Exchange Commission on December
30, 1993, and our report dated February 24, 1994, with respect to the
consolidated financial statements and schedules of Park-Ohio Industries, Inc.
included in its Annual Report on Form 10-K for the year ended December 31, 1993,
filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Ernst & Young LLP
Cleveland, Ohio
February 9, 1995
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of Park-Ohio
Industries, Inc. of our report dated March 3, 1994, which appears on page 20 of
RB&W Corporation's 1993 Annual Report to Shareholders, which is incorporated by
reference in its Annual Report on Form 10-K for the year ended December 31,
1993. We also consent to the incorporation by reference of our report on the
Financial Statement Schedules, which appears on page 13 of such Annual Report on
Form 10-K. We also consent to the reference to us under the heading "Experts" in
such Prospectus.
Price Waterhouse LLP
- --------------------
Cleveland, Ohio
February 10, 1995
<PAGE> 1
EXHIBIT 23.4
CONSENT OF FINANCIAL ADVISOR
We consent to the reference to our firm under the caption "Opinion of
RB&W's Financial Advisor" in the Registration Statement on Form S-4 and related
Prospectus of Park-Ohio Industries, Inc. for the registration of 2,248,942
shares of its common stock and to the incorporation by reference therein of our
opinion dated February 6, 1995.
McDonald & Company Securities, Inc.
By: /s/ JONATHAN O. CRANE
Jonathan O. Crane
Its: Managing Director
Cleveland, Ohio
February 10, 1995
<PAGE> 1
EXHIBIT 99.1
PARK-OHIO INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE RECONVENED SPECIAL MEETING OF SHAREHOLDERS
P The undersigned hereby appoints Edward F. Crawford and Ronald J.
Cozean (and if only one is present then by that one with full power of
substitution and revocation) as proxies, with the powers the
R undersigned would possess if personally present, to vote all shares of
common stock of the undersigned in Park-Ohio Industries, Inc. (and to
exercise all other shareholder rights and powers) at the reconvening
O of the special meeting of its shareholders that was convened and
adjourned on February 2, 1995, and at any further adjournments
thereof, upon all matters that may properly come before the meeting,
X including the matter identified on the reverse side of this proxy and
described in the Prospectus and Joint Proxy Statement furnished
herewith, subject to any directions indicated on the reverse side of
Y this proxy.
<TABLE>
<S> <C>
Your vote for the issuance of up to an additional Two Million Two (change of address)
Hundred Fifty Thousand shares of common stock should be indicated on
the reverse side. ------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card.)
</TABLE>
EXCEPT TO THE EXTENT OTHERWISE SPECIFIED ON REVERSE SIDE, THE BOARD OF DIRECTOR
AND OFFICER PROXIES INTEND TO VOTE FOR THE ISSUE SET FORTH ON THE REVERSE SIDE
PLEASE MARK, SIGN AND DATE ON REVERSE SIDE AND RETURN YOUR PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE
SOCIETY NATIONAL BANK
P.O. Box 5037, Cleveland, Ohio 44197-9839
SEE REVERSE
SIDE
<PAGE> 2
<TABLE>
<S> <C> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME REINVESTMENT SHARES
VOTES AS IN THIS
EXAMPLE.
FOR AGAINST ABSTAIN
PROPOSAL 1. To consider and vote upon the proposal to issue / / / / / / THE BOARD OF DIRECTORS
up to Two Million Two Hundred Fifty Thousand RECOMMENDS A VOTE FOR
shares of common stock pursuant to the Merger. PROPOSAL 1. ---
Change
of / /
Address
Attend
Meeting / /
SIGNATURE(S) DATE
------------------------------------------------------------ ------------
SIGNATURE(S) DATE
------------------------------------------------------------- -----------
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title as such.
</TABLE>
<PAGE> 1
EXHIBIT 99.2
RB&W CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE RECONVENED SPECIAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Murray J. Howe, Frederick J. Mancheski and
Julien L. McCall (and if only one is present then by that one with full power of
substitution and revocation) as proxies, with the powers the undersigned would
possess if personally present, to vote all shares of common stock in RB&W
Corporation (and to exercise all other shareholder rights and powers) at the
reconvening of the special meeting of its shareholders that was convened and
adjourned on February 2, 1995, and at any further adjournments thereof, upon all
matters that may properly come before the meeting, including the matter
identified on the reverse side of this proxy (the amendments and modifications
of which are described in the Prospectus and Joint Proxy Statement furnished
herewith), subject to any directions indicated on the reverse side of this
proxy.
<TABLE>
<S> <C>
Your vote for the approval of the Merger should be indicated on the reverse side.
(Change of Address)
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
(If you have written in the above space, please mark
the corresponding box on the reverse side of this
card)
</TABLE>
THIS PROXY WILL BE VOTED AS DIRECTED, BUT, IF NO DIRECTION IS MADE, IT WILL
BE VOTED FOR PROPOSAL 1. THE BOARD OF DIRECTORS KNOWS OF NO OTHER MATTERS THAT
MAY PROPERLY BE BROUGHT, OR WHICH ARE LIKELY TO BE BROUGHT, BEFORE THE SPECIAL
MEETING. HOWEVER, IF ANY OTHER MATTERS ARE PROPERLY BROUGHT BEFORE THE SPECIAL
MEETING, THE PERSONS NAMED IN THIS PROXY OR THEIR SUBSTITUTES WILL VOTE IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS.
PLEASE MARK, SIGN AND DATE ON REVERSE SIDE
AND RETURN YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE
(See Reverse Side)
(Continued from other side)
/X/ PLEASE MARK YOUR VOTE AS IN THIS EXAMPLE
PROPOSAL 1
TO CONSIDER AND VOTE UPON THE PROPOSAL TO APPROVE THE ACQUISITION OF RB&W
CORPORATION BY PARK-OHIO INDUSTRIES, INC. THROUGH THE MERGER OF P.O. ACQUISITION
COMPANY, INC. INTO RB&W CORPORATION AND TO APPROVE AND ADOPT THE AMENDED AND
RESTATED PLAN AND AGREEMENT OF MERGER AMONG RB&W, PARK-OHIO AND P.O. ACQUISITION
COMPANY.
/ / FOR / / AGAINST / / ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
Change of Address / /
Dated: , 1995
(Signature of Stockholder)
(Signature of Co-Owner)
NOTE: Please sign exactly as
name appears hereon. When
signing as attorney,
executor, administrator,
trustee or guardian,
please give full title as
such.
Proxy Card
