<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
PARK-OHIO INDUSTRIES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
================================================================================
<PAGE> 2
PARK-OHIO INDUSTRIES, INC.
23000 EUCLID AVENUE
EUCLID, OHIO 44117
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 1997 annual meeting of shareholders of
Park-Ohio Industries, Inc., an Ohio corporation (the "Company"), will be held at
Euclid High School's Little Theatre, 711 East 222nd Street, Euclid, Ohio, on
Thursday, May 22, 1997, at 3:30 P.M., Cleveland Time, for the following
purposes:
1. To elect three directors, the names of whom are set forth in the
accompanying proxy statement, to serve for a term expiring at the annual
meeting of shareholders in 1999;
2. To consider and vote upon a proposal to ratify the appointment of Ernst
& Young LLP as the Company's independent auditors for 1997; and
3. To act on such other matters as may be properly brought before the
annual meeting or any adjournments, postponements or continuations
thereof.
Only shareholders of record at the close of business on April 2, 1997, are
entitled to notice of and to vote at the meeting.
All shareholders are invited to attend the annual meeting. To ensure your
representation at the annual meeting, however, you are urged to mark, sign and
return the enclosed proxy in the accompanying envelope, regardless of whether
you expect to attend the annual meeting. No postage is required if mailed in the
United States. Any shareholder attending the annual meeting may vote in person
even if such shareholder has returned a proxy.
By Order of the Board of Directors
RONALD J. COZEAN
Secretary and General Counsel
April 16, 1997
<PAGE> 3
PARK-OHIO INDUSTRIES, INC.
23000 EUCLID AVENUE
EUCLID, OHIO 44117
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of the Company to be voted at
the annual meeting of shareholders of the Company to be held at Euclid High
School's Little Theatre, 711 East 222nd Street, Euclid, Ohio, on Thursday, May
22, 1997, at 3:30 P.M., Cleveland Time, and any and all adjournments,
postponements or continuations thereof. This proxy statement and the
accompanying proxy were first mailed to shareholders on or about April 17, 1997.
A shareholder giving a proxy may revoke it, without affecting any vote
previously taken, by a later appointment received by the Company or by giving
notice to the Company in writing or in open meeting. Attendance at the meeting
will not in itself revoke a proxy. Shares represented by properly executed
proxies will be voted at the meeting. If a shareholder has specified how the
proxy is to be voted with respect to a matter listed on the proxy it will be
voted in accordance with such specifications, and if no specification is made
the executed proxy will be voted FOR the election of the nominees for directors
and FOR the other proposals listed on the proxy; provided, however, that if the
election of directors is by cumulative voting, the persons appointed by the
accompanying proxy intend to cumulate the votes represented by proxies they
receive and distribute such votes in accordance with their best judgment.
Under the General Corporation Law of Ohio, cumulative voting means that
each shareholder is entitled to a number of votes equal to the number of shares
owned by such shareholder multiplied by the number of directors to be elected.
Each shareholder may cast all of his or her votes for a single nominee or may
distribute his or her votes among as many nominees as he or she sees fit.
Shareholders will have cumulative voting if notice in writing is given by any
shareholder to the President or any Vice President or the Secretary of the
Company, not less than forty-eight hours before the time fixed for holding the
meeting, that the shareholder desires that the voting for election of directors
be cumulative, and if an announcement of the giving of such notice is made upon
the convening of the meeting. Such announcement may be made by the Chairman or
the Secretary of the Company or by or on behalf of the shareholder giving such
notice.
The record date for the determination of shareholders entitled to notice of
and to vote at the 1997 Annual Meeting is April 2, 1997. As of March 31, 1997,
there were issued and outstanding 10,769,237 shares of Common Stock of the
Company. Each share of Common Stock has one vote.
So far as the Company is aware, no matters other than those described in
this proxy statement will be presented to the meeting for action on the part of
the shareholders. If any other matters are properly brought before the meeting,
it is the intention of the persons named in the accompanying proxy to vote the
shares to which the proxy relates thereon in accordance with their best
judgment. Abstentions will be counted as present at the meeting for purposes of
determining a quorum and will not be counted as voting, except as otherwise
required by law and indicated herein.
1
<PAGE> 4
The cost of soliciting proxies, including the charges and expenses incurred
by persons holding shares in their name as nominee for the forwarding of proxy
materials to the beneficial owners of such shares, will be borne by the Company.
Proxies may be solicited by officers and employees of the Company, by letter, by
telephone or in person. Such individuals will not be additionally compensated
but may be reimbursed by the Company for reasonable out-of-pocket expenses
incurred in connection therewith. In addition, the Company has retained
Kissel-Blake Inc., a professional proxy soliciting firm, to assist in the
solicitation of proxies and will pay such firm a fee, estimated to be $6,000,
plus reimbursement of out-of-pocket expenses.
ELECTION OF DIRECTORS
The authorized number of directors of the Company is presently fixed at
seven, divided into two classes: three members and four members, respectively.
The directors in each class are elected for two-year terms so that the term of
office of one class of directors expires at each annual meeting. The terms of
office of Edward F. Crawford, John J. Murray, and James W. Wert will expire on
the day of the 1997 annual meeting, upon election of successors.
The persons named in the accompanying proxy will vote the proxies received
by them (unless authority to vote is withheld) for the election of Messrs.
Edward F. Crawford, John J. Murray, and James W. Wert to serve as directors for
a two-year term and until their successors are elected and qualify. All nominees
currently serve as directors of the Company. If any nominee is not available at
the time of election, the proxy holders will vote in their discretion for a
substitute or for holding a vacancy to be filled by the Board. The Company has
no reason to believe any nominee will be unavailable.
RECOMMENDATION AND VOTE REQUIRED
The affirmative vote of a plurality of the shares of Common Stock
represented at the meeting is required to elect Edward F. Crawford, John J.
Murray, and James W. Wert as directors of the Company to serve until the 1999
annual meeting of shareholders.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EDWARD F.
CRAWFORD, JOHN J. MURRAY, AND JAMES W. WERT AS DIRECTORS.
2
<PAGE> 5
Information is set forth below regarding the nominees for election and the
directors who will continue in office after the meeting, including their ages,
principal occupations during the past five years and other directorships
presently held. Also set forth is the date each was first elected as a director
of the Company or a corporation that has been merged into the Company.
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION YEAR
- - --------------------------------------------------------------------------------------------------- FIRST
PRINCIPAL OCCUPATION ELECTED TERM
NAME AGE AND OTHER DIRECTORSHIPS DIRECTOR EXPIRING
- - ---------------------- --- ------------------------------------------------------------------ -------- --------
<S> <C> <C> <C> <C>
Edward F. Crawford* 57 Chairman and Chief Executive Officer of the Company since June 17, 1992 1999
1992; former Director of the Company from 1989 until 1991;
Chairman and Chief Executive Officer, Crawford Group, Inc.
(manufacturing businesses) since 1964
John J. Murray 41 President and Chief Operating Officer of the Company since January 1992 1999
1, 1995; President of KMR Industries, Inc. (business consulting
firm) since 1991
James W. Wert*# 50 Retired, Former Senior Executive Vice President and Chief 1992 1999
Investment Officer, KeyCorp (financial services company) from
August, 1995 to July, 1996; Chief Financial Officer, KeyCorp from
1994 to 1995; Vice Chairman and Chief Financial Officer, Society
Corporation (financial services company) from 1990 to 1994
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS WHOSE TERMS OF OFFICE
WILL CONTINUE AFTER THE MEETING YEAR
- - --------------------------------------------------------------------------------------------------- FIRST
PRINCIPAL OCCUPATION ELECTED TERM
NAME AGE AND OTHER DIRECTORSHIPS DIRECTOR EXPIRING
- - ---------------------- --- ------------------------------------------------------------------ -------- --------
<S> <C> <C> <C> <C>
Lewis E. Hatch, Jr.+# 70 Retired, Former Chairman and Chief Operating Officer, Rusch 1992 1998
International (international medical device company) from 1986 to
July 1992; Director, Teleflex, Incorporated since 1976
Thomas E. McGinty*+ 67 Former Interim Chairman of the Board and Chief Executive Officer 1986 1998
of the Company from November, 1991 to June, 1992; President,
Belvoir Consultants, Inc. (management consultants) since 1983
Lawrence O. Selhorst# 64 Chairman of the Board and Chief Executive Officer of American 1995 1998
Spring Wire Corporation (spring wire manufacturer) since 1968;
former Chairman of the Board of RB&W Corporation from September,
1992 to March, 1995; Director, Lincoln Electric Company
Richard S. Sheetz+ 72 Former Chairman of the Board and Chief Executive Officer of the 1964 1998
Company; Director, Cedar Fair Management Co. from 1987 to 1993;
Special General Partner, Cedar Fair, L.P.
</TABLE>
- - ---------------
*Member, Executive Committee
+Member, Audit Committee
#Member, Compensation and Stock Option Committee
3
<PAGE> 6
BENEFICIAL OWNERSHIP OF SHARES
The following table, furnished as of March 31, 1997, sets forth certain
information with respect to beneficial ownership by each director, nominee, and
named executive officer individually, and by all directors and executive
officers as a group, of the Common Stock of the Company. Unless otherwise
indicated, the nature of beneficial ownership consists of sole voting and
investment power.
<TABLE>
<CAPTION>
AMOUNT AND PERCENT
NATURE OF OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
----------------------------------------------------- -------------------- -------
<S> <C> <C>
Ronald J. Cozean..................................... 22,333(1) *
Edward F. Crawford................................... 2,904,000(2) 26.5%
Lewis E. Hatch, Jr................................... 26,060(3) *
Thomas E. McGinty.................................... 118,000(4) 1.1%
John J. Murray....................................... 113,184(5) 1.0%
Lawrence O. Selhorst................................. 37,701(6) *
Richard S. Sheetz.................................... 81,340(7) *
Felix J. Tarorick.................................... 80,833(8) *
James S. Walker...................................... 54,433(9) *
James W. Wert........................................ 31,000(10) *
All Directors and Officers as a group (12 persons)... 3,687,549 32.8%
</TABLE>
- - ---------------
* Less than 1%
(1) Includes 22,333 shares subject to stock options currently exercisable.
(2) Includes 9,500 shares owned by Mr. Crawford's wife as to which Mr. Crawford
disclaims beneficial ownership, 22,500 shares owned by L'Accent De Provence
over which Mr. Crawford shares voting and investment power, 200,000 shares
subject to stock options currently exercisable, and 562,500 shares held by
The Huntington Trust Company NA as escrow agent for the benefit of Mr.
Crawford over which Mr. Crawford has sole voting power.
(3) Includes 2,165 shares owned by Mr. Hatch's wife as to which Mr. Hatch
disclaims beneficial ownership and 6,000 shares subject to stock options
currently exercisable.
(4) Includes 6,000 shares subject to stock options currently exercisable.
(5) Includes 107,667 shares subject to stock options currently exercisable and
517 shares which would be owned upon the conversion of 7.25% Convertible
Subordinated Debentures of the Company.
(6) Includes 6,000 shares subject to stock options currently exercisable.
(7) Includes 942 shares owned by a family member as to which Mr. Sheetz
disclaims beneficial ownership and 6,000 shares subject to stock options
currently exercisable.
(8) Includes 53,333 shares subject to stock options currently exercisable.
(9) Includes 53,333 shares subject to stock options currently exercisable.
(10) Includes 6,000 shares subject to stock options currently exercisable.
4
<PAGE> 7
The following table, furnished as of the dates stated herein, sets forth
certain information concerning each person (or group of affiliated persons) who
is known to the Company to be the beneficial owner of more than 5% of its
outstanding Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
TITLE OF NAME AND ADDRESS OF BENEFICIAL PERCENT
CLASS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- - ------------- ----------------------------------------------- ----------------- --------
<S> <C> <C> <C>
Common Stock Edward F. Crawford 2,904,000(1) 26.5%
26650 Lakeland Boulevard
Cleveland, Ohio 44132
Common Stock Pioneering Management Corporation 1,095,000(2) 10.0%
60 State Street
Boston, Massachusetts 02109
Common Stock Kennedy Capital Management 703,228(3) 6.2%
10829 Olive Boulevard
St. Louis, Missouri 63141
Common Stock Dimensional Fund Advisors 658,161(4) 6.0%
1299 Ocean Avenue
Santa Monica, California 90401
</TABLE>
- - ---------------
(1) Information is as of March 31, 1997. The total includes 2,109,500 shares
over which Mr. Crawford has sole voting and investment power, 22,500 shares
owned by L'Accent De Provence of which Mr. Crawford is President and owner
of 25% of its capital stock and over which Mr. Crawford shares voting and
investment power, 9,500 shares owned by Mr. Crawford's wife as to which Mr.
Crawford disclaims beneficial ownership, 200,000 shares subject to stock
options currently exercisable, and 562,500 shares held by The Huntington
Trust Company NA over which Mr. Crawford has sole voting power.
(2) Based on information set forth on Amendment No. 2 to Schedule 13G dated
January 23, 1997. Pioneering Management Corporation reported sole voting
power over the 1,095,000 shares beneficially owned as of December 31, 1996,
sole investment power over 10,000 shares, and shared investment power over
1,085,000 shares.
(3) Based on information set forth on Schedule 13G dated February 10, 1997.
Included in the 703,228 shares beneficially owned as of December 31, 1996
are 415,528 shares which Kennedy Capital Management reports it has the right
to acquire. Kennedy Capital Management reported sole voting and investment
power over all the shares.
(4) Based on information set forth on Schedule 13G dated February 5, 1997.
Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, reported beneficial ownership of 658,161 shares of Park-Ohio
Industries stock as of December 31, 1996, all of which shares were held in
portfolios of DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in series of the DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of
which Dimensional Fund Advisors Inc. serves as investment manager.
Dimensional reported sole voting and investment power with respect to all of
such shares, but disclaims beneficial ownership of all such shares.
5
<PAGE> 8
CERTAIN MATTERS PERTAINING TO THE BOARD OF DIRECTORS
ORGANIZATION AND COMPENSATION OF THE BOARD OF DIRECTORS
During 1996, the Board held four meetings, the Audit Committee held two
meetings, the Compensation and Stock Option Committee (the "Compensation
Committee") held two meetings and the Executive Committee held one meeting.
During 1996, each of the directors attended at least 75% of the meetings of the
Board and of any committee on which he served, except for Mr. Wert. During 1996,
the Audit Committee consisted of Messrs. Hatch, McGinty and Sheetz. In addition
to its functions set forth herein under the caption "APPOINTMENT OF INDEPENDENT
AUDITORS," the Audit Committee reviews the adequacy of the Company's internal
accounting controls and auditing procedures. During 1996, the Compensation
Committee consisted of Messrs. Hatch, Selhorst and Wert. In addition to its
functions set forth herein under "Stock Option Plan," the Compensation Committee
recommends the compensation arrangements for the Company's officers. The
Executive Committee consists of Messrs. Crawford, McGinty and Wert. The
Executive Committee is empowered to exercise the powers of the Board between
meetings of the Board. While there is no standing Nominating Committee, the
Board selects nominees for election as directors and considers the performance
of directors in determining whether to nominate them for re-election.
During 1996, each director, except Mr. Crawford and Mr. Murray, received a
non-statutory stock option to purchase 6,000 shares of Common Stock, The option
grants were made in accordance with the Company's 1996 Non-employee Director
Stock Option Plan approved by the shareholders at the 1996 Annual Meeting. Prior
to the approval of the Non-employee Director Stock Option Plan, the non-employee
directors received $6,250 for the first quarter of 1996. Commencing with second
quarter of 1996, directors ceased receiving annual cash retainers for service as
a director.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Hatch, Selhorst and Wert served as members of the Compensation
Committee of the Board during 1996. Messrs. Hatch, Selhorst and Wert are not
current or former officers or employees of the Company.
Mr. Wert was the Chief Investment Officer of KeyCorp, the parent of KeyBank
("Key"), until July 31, 1996. As of December 31, 1996, the Company was indebted
to Key and four other banks in the amount of $58.5 million under a revolving
credit and term loan. Key is also the trustee and investment advisor for the
Company's Individual Account Retirement Plan and for two defined benefit plans
covering certain hourly employees. The Company maintains checking accounts at
Key, and Key is the registrar and transfer agent for the Company's Common Stock.
6
<PAGE> 9
EXECUTIVE COMPENSATION
INTRODUCTION
The following table sets forth the respective amounts of compensation of
the Chief Executive Officer and the other named executive officers of the
Company for each of the years indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------- ------------
SECURITIES
UNDERLYING
NAME AND OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR(1) SALARY($) BONUS($) SARS(#)(2) COMPENSATION($)(3)
- - ---------------------------- ------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Edward F. Crawford
Chairman of the Board and
Chief Executive Officer... 1996 225,000 2,000 500,000 164
1995 225,000 0 0 164
1994 225,000 0 0 181
John J. Murray
President and
Chief Operating Officer... 1996 250,000 100,000 23,000 4,725
1995 250,000 50,000 150,000 1,725
Felix J. Tarorick
Vice President of
Manufacturing............. 1996 150,000 25,000 10,000 3,164
James S. Walker
Vice President and
Chief Financial Officer... 1996 140,000 30,000 10,000 3,164
1995 140,000 20,000 10,000 3,464
1994 140,000 10,000 5,000 3,181
Ronald J. Cozean
Secretary and
General Counsel........... 1996 100,000 25,000 7,000 2,664
1995 90,000 20,000 10,000 1,464
1994 45,000 0 20,000 91
</TABLE>
- - ---------------
(1) Mr. Murray joined the Company as President and Chief Operating Officer of
the Company on January 1, 1995. Mr. Cozean joined the Company as Secretary
and General Counsel of the Company on July 1, 1994. Mr. Tarorick became an
executive officer in 1996.
(2) Reflects the number of shares of Common Stock of the Company covered by
stock options granted during the years shown. No stock appreciation rights
("SARs") were granted to the named executives during the years shown.
(3) For the year ended December 31, 1996, all other compensation includes
contributions made by the Company under the Company's Supplemental Defined
Contribution Plan as follows: Mr. Murray $3,000, Mr. Tarorick $3,000, and
Mr. Walker $3,000, and under the Company's Individual Account Retirement
Plan: Mr. Cozean $2,500; and insurance premiums paid by the Company as
follows: Mr. Crawford $164, Mr. Murray $1,725, Mr. Tarorick $164, Mr. Walker
$164, and Mr. Cozean $164.
7
<PAGE> 10
STOCK OPTIONS
The Company has in effect an Amended and Restated 1992 Stock Option Plan
(the "Plan") that permits the granting of "non-statutory stock options" and
"incentive stock options." The Plan is administered by the Compensation
Committee of the Board of Directors, which has authority to select officers and
key employees to be participants and to determine the type and number of awards
to be granted.
The number of shares currently available for grant under the Plan shall not
exceed 850,000, subject to certain adjustments. The option price for stock
options granted under the Plan is fixed by the Compensation Committee, but in no
event will it be less than the fair market value of the Common Stock on the date
of grant. The Plan provides that the fair market value shall be the NASDAQ
closing price on the trading day immediately preceding the date on which the
option is granted. Options may be granted under the Plan at any time on or prior
to February 18, 2002.
At the 1996 Annual Meeting, the shareholders approved a one time grant to
Mr. Crawford, Chairman and Chief Executive Officer, of a non-statutory stock
option to purchase 500,000 shares of Common Stock.
The following tables set forth information regarding stock option
transactions with respect to the named executive officers during 1996.
OPTION/SAR GRANTS IN 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------
% OF
NUMBER OF TOTAL
SECURITIES OPTIONS/ POTENTIAL REALIZABLE VALUE AT
UNDERLYING SARS ASSUMED ANNUAL RATES OF STOCK
OPTIONS/ GRANTED TO PRICE APPRECIATION FOR OPTION
SARS EMPLOYEES EXERCISE OR TERM(3)
GRANTED(#) IN FISCAL BASE EXPIRATION ------------------------------
NAME (1) YEAR PRICE($/SH)(2) DATE 0%($) 5%($) 10%($)
- - ----------------------------- ---------- ---------- -------------- --------- ----- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Ronald J. Cozean 7,000 1.0% 13.625 2/22/06 0 59,991 152,028
Edward F. Crawford 500,000 74.8% 13.625 2/22/11 0 7,350,688 21,643,312
John J. Murray 23,000 3.4% 13.625 2/22/06 0 197,113 499,520
Felix J. Tarorick 10,000 1.5% 13.625 2/22/06 0 85,701 217,183
James S. Walker 10,000 1.5% 13.625 2/22/06 0 85,701 217,183
</TABLE>
- - ---------------
(1) Options become exercisable to the extent of 33 1/3% of the subject shares
after one year from the date of grant, 66 2/3% after two years from the date
of grant, and 100% after three years from the date of grant, except Mr.
Crawford's which vest over a five year period in 20% increments.
(2) Represents the NASDAQ closing price on the day prior to grant.
(3) The assumed rates of appreciation are not intended to represent either past
or future appreciation rates with respect to the Company's Common Stock. The
rates are prescribed in the applicable Commission rules for use by all
companies for the purpose of this table.
8
<PAGE> 11
AGGREGATED OPTION/SAR EXERCISES IN 1996
AND DECEMBER 31, 1996 OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES DECEMBER 31, 1996 DECEMBER 31, 1996
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE(1)
- - ---------------------------- ------------ --------- ----------------- -----------------
<S> <C> <C> <C> <C>
Ronald J. Cozean None N/A 16,666/ 20,334 $ 7,500/$ 15,000
Edward F. Crawford None N/A 100,000/500,000 $775,000/$ 0
John J. Murray None N/A 50,000/123,000 $112,500/$225,000
Felix J. Tarorick None N/A 46,666/ 18,334 $257,500/$ 15,000
James S. Walker None N/A 46,666/ 18,334 $257,500/$ 15,000
</TABLE>
- - ---------------
(1) The "Value of Unexercised In-the-Money Options/SARs at December 31, 1996"
was calculated by determining the difference between the fair market value
of the underlying Common Stock at December 31, 1996 (the NASDAQ closing
price of the Company's Common Stock on December 31, 1996 was $12.875) and
the exercise price of the option. An option is "In-the-Money" when the fair
market value of the underlying Common Stock exceeds the exercise price of
the option.
9
<PAGE> 12
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
Mr. Crawford, Chairman and Chief Executive Officer, Mr. Murray, President
and Chief Operating Officer, Mr. Tarorick, Vice President of Manufacturing, Mr.
Walker, Chief Financial Officer and Mr. Cozean, Secretary and General Counsel,
are the named executive officers of the Company. Messrs. Crawford, Murray,
Tarorick, Walker and Cozean receive an annual salary and are eligible to receive
stock options under the Company's Amended and Restated 1992 Stock Option Plan.
The Stock Option Plan is administered by the Compensation and Stock Option
Committee of the Board ("Committee") which is empowered to grant options to
purchase Common Stock of the Company to officers and key employees of the
Company and its subsidiaries. The Committee believes stock options are an
effective incentive which links compensation to shareholder return.
Mr. Crawford's compensation was governed by the terms of an employment
agreement which expired on June 17, 1995. The employment agreement provided for
Mr. Crawford to receive an annual salary of $250,000. Consistent with the
Company's rigorous cost-cutting program, Mr. Crawford voluntarily reduced his
annual salary to $225,000 in 1993. In connection with the expiration of the
Employment Agreement, the Committee retained the services of Ernst & Young LLP
to review Mr. Crawford's compensation. Ernst & Young advised the Committee that
Mr. Crawford's current annual salary is significantly below that of chief
executive officers of companies similar in size to the Company. Mr. Crawford's
salary for 1996 remained at $225,000.
The Committee approved, subject to shareholder approval, the grant to Mr.
Crawford of a non-statutory stock option to purchase 500,000 shares of Common
Stock. The Committee chose to grant an option to Mr. Crawford rather than
increase cash compensation because the Committee determined that, in an
entrepreneurial company, it is appropriate to place a large portion of the CEO's
compensation at risk. Thus, unless the share price increases from the date of
grant, Mr. Crawford will receive no value from the option grant. The
shareholders approved the option grant at the 1996 Annual Meeting.
Mr. Murray's compensation is governed by the terms of an Employment
Agreement effective January 1, 1995. The Employment Agreement provides for an
annual salary of $250,000 and other benefits generally provided to executive
officers. Mr. Murray received a bonus of $100,000 and 23,000 stock options
during 1996.
Mr. Tarorick's compensation for 1996 principally consisted of an annual
salary of $150,000, a bonus of $25,000, and 10,000 stock options. Mr. Tarorick
received his bonus, prior to becoming an executive officer, based on the
performance of RB&W Manufacturing. Mr. Walker's compensation for 1996
principally consisted of an annual salary of $140,000, which is identical to his
salary for 1995, a bonus of $30,000, and 10,000 stock options. Mr. Cozean's
compensation for 1996 principally consisted of an annual salary of $100,000, a
bonus of $25,000, and 7,000 stock options.
Mr. Crawford, based on his review of the performance of Mr. Murray, Mr.
Tarorick, Mr. Walker and Mr. Cozean, recommended that they receive stock options
in accordance with the Company's Amended and Restated 1992 Stock Option Plan.
Mr. Crawford recommended bonuses for Messrs. Cozean, Murray and Walker
particularly for their efforts in connection with the sale of Bennett
Industries, Inc. The Committee accepted Mr. Crawford's recommendations and
granted the bonuses and options. The Committee granted Mr. Crawford a $2,000
bonus for his efforts related to the sale of Bennett.
During 1996, the members of the Committee were:
Lewis E. Hatch, Jr.
Lawrence O. Selhorst
James W. Wert, Chairman
10
<PAGE> 13
PERFORMANCE COMPARISONS
The chart set forth below compares the cumulative total shareholder return
of the Company for the five years ended December 31, 1996 to (a) the Total
Return Index for the NASDAQ Stock Market (U.S. Companies), and (b) a group of
peer companies selected by the Company on the basis of similar business lines
and comparable market capitalization, number of employees, and total sales. In
all cases shown, the chart assumes the investment of $100 on December 31, 1991
and the reinvestment of all dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
PARK-OHIO, NASDAQ STOCK MARKET (U.S. COMPANIES) AND
SELF-DETERMINED PEER GROUP
<TABLE>
<CAPTION>
NASDAQ Stock
Measurement Period Market (U.S. Self-Determined
(Fiscal Year Covered) Park Ohio Companies)(1) Peer Group (2)
<S> <C> <C> <C>
1991 100 100 100
1992 167 116 145
1993 429 134 142
1994 429 131 129
1995 538 185 183
1996 429 227 264
</TABLE>
- - ---------------
(1) The index is issued by the University of Chicago Graduate School of
Business, Center for Research in Security Prices.
(2) This peer group is comprised of Arden Industrial Products, Inc., Gehl
Company, Walbro Corporation, Essef Corporation, Ameriwood Industries
International Corporation, and Wyman Gordon Corporation. Companies were
chosen based on similarity of Standard Industrial Classification codes and a
combination of comparable market capitalization, number of employees, and
total sales. The returns of each issuer have been weighted according to the
respective company's stock market capitalization. Market capitalization is
determined by price times shares outstanding at the close of the previous
day. ABS Industries, Inc. was removed from the peer group because
information is no longer available.
11
<PAGE> 14
INFORMATION CONCERNING EXECUTIVE OFFICERS
EXECUTIVE AGREEMENTS
The Company entered into an employment agreement effective January 1, 1995
(the "Employment Agreement") with Mr. Murray in connection with Mr. Murray's
joining the Company as President and Chief Operating Officer. Pursuant to the
Employment Agreement, Mr. Murray is to be employed as President and Chief
Operating Officer of the Company at a rate of $250,000 per year of employment,
subject to discretionary increases by the Board. Mr. Murray is also entitled to
all benefits generally provided to Company executive officers. Mr. Murray was
granted a non-statutory stock option to purchase 150,000 shares of Common Stock.
The option will terminate on March 21, 2005, or the cessation of Mr. Murray's
employment with the Company, subject to provisions allowing for the conditional
exercise of the option upon such cessation of employment. In the event of a
"Change in Control of the Company," as defined in the option agreement, the
option will become exercisable in full (whether or not exercisable at such
time), and will remain exercisable until it expires pursuant to its terms.
Mr. Murray's employment can be terminated under the Employment Agreement
for death, incapacitating disability for at least six months, or for certain
specific causes. In the event of termination for cause or by death, Mr. Murray
shall receive only compensation earned and benefits accrued to the date of
termination, and no severance pay. In the event of voluntary resignation, Mr.
Murray shall receive a half of a year's salary as severance pay. In the event of
termination without cause or for disability, Mr. Murray shall receive severance
pay in the amount of one year's salary.
Mr. Murray agreed that during the term of his employment and at all times
thereafter, he will in no manner disclose any confidential information relating
to the Company or any of its affiliates or shareholders except as directed by
the Company. Mr. Murray also agreed to refrain for the term of his employment
and for one year thereafter, from certain acts of competition or solicitation.
RELATED TRANSACTIONS
General Aluminum Mfg. Company ("GAMCO"), a wholly-owned subsidiary of the
Company, leases space in two buildings in Conneaut, Ohio. GAMCO is leasing
70,000 square feet of a facility owned by Mr. Crawford at a monthly rent of
$9,000 and is leasing a facility owned by Mrs. Crawford, consisting of 50,000
square feet, at a monthly rent of $3,000.
The Ajax Manufacturing Company, a wholly-owned subsidiary of the Company,
leases a facility in Euclid, Ohio at an annual rent of $250,000. The facility is
owned by a corporation whose shareholders are Mr. Crawford and his son, Matthew
Crawford. The Board of Directors received an opinion from a Cleveland real
estate company concerning the fairness of the terms of the lease.
GAMCO has agreed to lease an additional 91,376 square feet of space to be
built as an attachment to the building currently being leased from Mr. Crawford.
The annual rent will be approximately $322,000. Matthew Crawford is the owner of
the company which is going to own the expanded space. The Board of Directors
approved the transaction after receiving an opinion from a Cleveland real estate
company concerning the fairness of the terms of the lease.
12
<PAGE> 15
APPOINTMENT OF INDEPENDENT AUDITORS
Subject to ratification by the shareholders, Ernst & Young LLP has been
appointed as the independent auditors for the Company for the year 1997.
The appointment of independent auditors is approved annually by the Board
and subsequently submitted to the shareholders for ratification. The decision by
the Board is based on the recommendation of the Audit Committee. In making its
recommendation, the Audit Committee reviewed both the audit scope and estimated
fees for the audit of the 1996 financial statements.
Representatives of Ernst & Young LLP will attend the Annual Meeting, will
have an opportunity to make a statement, if they so desire, and will be
available to respond to appropriate shareholders' questions.
The favorable vote of a majority of the shares voting on this proposal is
required for ratification of this appointment. The persons named in the
accompanying proxy intend to vote proxies received by them in favor of this
proposal unless a choice "Against" or "Abstain" is specified.
SHAREHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
Any shareholder who intends to present a proposal at the 1998 annual
meeting and who wishes to have the proposal included in the Company's proxy
statement and form of proxy for that meeting must, in addition to complying with
the applicable laws and regulations governing the submission of such proposals,
deliver the proposal to the Company for consideration not later than December
17, 1997.
ANNUAL REPORT
The integrated Annual Report and Form 10-K of the Company for the year
ended December 31, 1996 is being mailed to each shareholder of record with this
Proxy Statement. Additional copies may be obtained from the undersigned.
PARK-OHIO INDUSTRIES, INC.
RONALD J. COZEAN
Secretary and General Counsel
April 16, 1997
13
<PAGE> 16
Common Stock PARK-OHIO INDUSTRIES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P Lewis E. Hatch, Jr. and Lawrence O. Selhorst or either of them, are hereby
R authorized, with full power of substitution, to represent and vote the
O Common Stock of the undersigned at the annual meeting of shareholders of
X Park-Ohio Industries, Inc. (the "Company") to be held at Euclid High
Y School's Little Theatre, 711 East 222nd Street, Euclid, Ohio, on May 22,
1997, and any and all adjournments, postponements or continuations thereof.
IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED, SHARES REPRESENTED
HEREBY WILL BE VOTED IN THE MANNER SPECIFIED BY THE SHAREHOLDER. IF NO
SPECIFICATION IS MADE, SHARES WILL BE VOTED FOR THE ELECTION OF THE PERSONS
NOMINATED AS DIRECTORS PURSUANT TO THE PROXY STATEMENT AND FOR THE OTHER
PROPOSALS INDICATED. IN THE EVENT OF CUMULATIVE VOTING FOR DIRECTORS,
UNLESS OTHERWISE INDICATED BY THE UNDERSIGNED, A VOTE FOR THE NOMINEES
LISTED WILL GIVE THE PROXYHOLDERS DISCRETIONARY AUTHORITY TO CUMULATE ALL
VOTES TO WHICH THE UNDERSIGNED IS ENTITLED AND TO ALLOCATE THEM IN FAVOR OF
ANY ONE OR MORE SUCH NOMINEES AS THE PROXYHOLDERS DETERMINE.
Election of Directors, Nominees:
Edward F. Crawford, John J. Murray, James W. Wert
(change of address)
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
- - --------------------------------------------------------------------------------
DETACH CARD
<PAGE> 17
[X] PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
<TABLE>
<CAPTION>
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C> <C>
1. Election of [ ] [ ] Director Nominees: 2. Ratification of appointment of [ ] [ ] [ ]
Directors Edward F. Crawford, Ernst & Young as independent
(see reverse) John J. Murray, auditors.
James W. Wert
3. The Proxies are authorized, in their discretion, to vote
For, except vote withheld from the upon such other business as may properly come before the
following nominee(s): meeting or any adjournment, postponement or continuation
thereof.
----------------------------------
</TABLE>
Change [ ]
of
Address
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED.
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.
- - --------------------------------------------------------------------------------
DETACH CARD
<PAGE> 18
Common Stock PARK-OHIO INDUSTRIES, INC.
CONFIDENTIAL VOTING INSTRUCTIONS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS
V To Key Trust Company of Ohio, N.A., Trustee of the Individual Account
O Retirement Plan of Park-Ohio Industries, Inc. and Its Subsidiaries (the
T "Plan"): The undersigned, a participant in the Plan, hereby directs the
I Trustee to vote in person or by proxy (a) all common shares of Park-Ohio
N Industries, Inc. credited to the undersigned's account under the Plan on
G the record date ("allocated shares"); and (b) the proportionate number of
common shares of Park-Ohio Industries, Inc. allocated to the accounts of
I other participants in the Plan, but for which the Trustee does not receive
N valid voting instructions ("non-directed shares") and as to which the
S undersigned is entitled to direct the voting in accordance with the Plan
T provisions. Under the Plan, shares allocated to the accounts of
R participants for which the Trustee does not receive timely directions in
U the form of a signed voting instruction card are voted by the Trustee as
C directed by the participants who timely tender a signed voting instruction
T card. By completing this Confidential Voting Instruction Card and returning
I it to the Trustee, you are authorizing the Trustee to vote allocated shares
O and a proportionate amount of the non-directed shares held in the Plan. The
N number of non-directed shares for which you may instruct the Trustee to
S vote will depend on how many other participants exercise their right to
direct the voting of their allocated shares. Any participant wishing to
vote the non- directed shares differently from the allocated shares may do
so by requesting a separate voting instruction card from the Trustee at
(216) 689-3685.
If this Confidential Voting Instruction Card is properly executed and
returned, shares represented hereby will be voted in the manner specified
by the participant.
Election of Directors, Nominees:
Edward F. Crawford, John J. Murray, James W. Wert
(change of address)
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
- - --------------------------------------------------------------------------------
DETACH CARD
<PAGE> 19
[X] PLEASE MARK YOUR SHARES HELD FOR YOU
VOTES AS IN THIS
EXAMPLE.
<TABLE>
<CAPTION>
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C> <C>
1. Election of [ ] [ ] Director Nominees: 2. Ratification of appointment of [ ] [ ] [ ]
Directors Edward F. Crawford, Ernst & Young as independent
(see reverse) John J. Murray, auditors.
James W. Wert
3. The Proxies are authorized, in their discretion, to vote
For, except vote withheld from the upon such other business as may properly come before the
following nominee(s): meeting or any adjournment, postponement or continuation
thereof.
----------------------------------
</TABLE>
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED.
Change [ ]
of
Address
Attend [ ]
Meeting
SIGNATURE ______________________________________________________ DATE _________
- - --------------------------------------------------------------------------------
DETACH CARD
<PAGE> 20
Common Stock PARK-OHIO INDUSTRIES, INC.
CONFIDENTIAL VOTING INSTRUCTIONS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS
V Elizabeth A. Boris, Ronald J. Cozean, and James S. Walker, or any of them,
O Trustees of RB&W Corporation Employee Stock Ownership Plan (the "Plan"),
T are hereby authorized, with full power of substitution, to represent and
I vote the Common Stock of the undersigned Plan Participant at the annual
N meeting of shareholders of Park-Ohio Industries, Inc. (the "Company") to be
G held at Euclid High School's Little Theatre, 711 East 222nd Street, Euclid,
Ohio, on May 22, 1997, and any and all adjournments, postponements or
I continuations thereof.
N
S IF THIS CONFIDENTIAL VOTING INSTRUCTION CARD IS PROPERLY EXECUTED AND
T RETURNED, SHARES REPRESENTED HEREBY WILL BE VOTED IN THE MANNER SPECIFIED
R BY THE PLAN PARTICIPANT. IF NO SPECIFICATION IS MADE, SHARES WILL BE VOTED
U FOR THE ELECTION OF THE PERSONS NOMINATED AS DIRECTORS PURSUANT TO THE
C PROXY STATEMENT AND FOR THE OTHER PROPOSALS INDICATED. IN THE EVENT OF
T CUMULATIVE VOTING FOR DIRECTORS, UNLESS OTHERWISE INDICATED BY THE
I UNDERSIGNED, A VOTE FOR THE NOMINEES LISTED WILL GIVE THE TRUSTEES
O DISCRETIONARY AUTHORITY TO CUMULATE ALL VOTES TO WHICH THE UNDERSIGNED IS
N ENTITLED AND TO ALLOCATE THEM IN FAVOR OF ANY ONE OR MORE SUCH NOMINEES AS
S THE TRUSTEES DETERMINE.
Election of Directors, Nominees:
Edward F. Crawford, John J. Murray, James W. Wert
(change of address)
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
- - --------------------------------------------------------------------------------
DETACH CARD
<PAGE> 21
[X] PLEASE MARK YOUR SHARES HELD FOR YOU
VOTES AS IN THIS
EXAMPLE.
<TABLE>
<CAPTION>
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C> <C>
1. Election of [ ] [ ] Director Nominees: 2. Ratification of appointment of [ ] [ ] [ ]
Directors Edward F. Crawford, Ernst & Young as independent
(see reverse) John J. Murray, auditors.
James W. Wert
3. The Proxies are authorized, in their discretion, to vote
For, except vote withheld from the upon such other business as may properly come before the
following nominee(s): meeting or any adjournment, postponement or continuation
thereof.
----------------------------------
</TABLE>
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED.
Change [ ]
of
Address
Attend [ ]
Meeting
SIGNATURE ______________________________________________________ DATE _________
- - --------------------------------------------------------------------------------
DETACH CARD
