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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 26, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PKOH HOLDING CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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OHIO 5072 34-6520107
------------------------------ ------------------------------ ------------------------------
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I R S EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
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23000 Euclid Avenue
Cleveland, Ohio 44117
(216) 692-7200
(Address, including zip code and telephone number, including area code, of
Registrant's principal executive offices)
------------------------
RONALD J. COZEAN
Secretary and General Counsel
PKOH Holding Corp.
23000 Euclid Avenue
Cleveland, Ohio 44117
(216) 692-7200
(Name, address, including zip code
& telephone number, including
area code of agent for service)
------------------------
COPY TO:
MARY ANN JORGENSON, ESQ.
Squire, Sanders & Dempsey L.L.P.
4900 Key Tower, 127 Public Square
Cleveland, Ohio 44114-1304
------------------------
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of this Registration
Statement and the effective time of the Merger, as described in the Proxy
Statement/Prospectus contained herein.
If the securities being registered on 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: [ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF PROPOSED PROPOSED
SECURITIES TO AMOUNT TO MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
BE REGISTERED BE REGISTERED(1) PRICE PER UNIT(2) OFFERING PRICE(2) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
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Common Stock,
$1.00 par value.......... 11,000,000 $16.6875 $183,562,500 $54,151
==============================================================================================================================
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(1) Based upon the number of shares of common stock of Park-Ohio Industries,
Inc. expected to be outstanding immediately prior to the effective time of
the Merger, as described in the Proxy Statement/Prospectus contained herein.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f)(1) based upon the average of the high and low prices
of Park-Ohio Industries, Inc. common stock as reported on the Nasdaq Stock
Market on February 19, 1998.
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.
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PARK-OHIO INDUSTRIES, INC.
23000 EUCLID AVENUE
CLEVELAND, OHIO 44117
APRIL , 1998
Dear Shareholder:
You are cordially invited to attend the 1998 annual meeting of shareholders
of Park-Ohio Industries, Inc., an Ohio corporation (the "Company"), to be held
at the Aurora High School Auditorium, 109 West Pioneer Trail, Aurora, Ohio, on
Thursday, May 28, 1998, at 3:30 P.M., Cleveland Time.
At the meeting, you will be asked to consider and vote upon, among other
things, a proposal to reorganize the Company into a holding company form of
ownership (the "Reorganization"). The Reorganization proposal, which has been
unanimously approved by your Board of Directors, contemplates a tax-free merger
("Merger") involving the Company, a newly formed subsidiary of the Company (the
"Holding Company") and a newly formed subsidiary of the Holding Company ("Merger
Sub"). As a result of the Merger, (i) the shareholders of the Company would
become shareholders of the Holding Company, (ii) the Company would become a
wholly-owned subsidiary of the Holding Company, and (iii) Merger Sub would be
merged out of existence. Your percentage ownership of Holding Company stock
following the Reorganization would be the same as your percentage ownership of
Company stock immediately prior to the Reorganization. Following the
Reorganization, it is expected that the common stock of the Holding Company
would be traded on the Nasdaq Stock Market under the ticker symbol [ ] and the
Company would continue to carry on its business in substantially the same manner
as before the Reorganization.
The primary purpose of the Reorganization is to create new avenues for
expansion and provide greater access to acquisition financing. Under the current
structure, the Company's expansion opportunities are limited by broad financial
and operating covenants contained in its financing arrangements with certain
lenders. These arrangements, while binding upon the Company and its
subsidiaries, expressly allow for the formation of a holding company to conduct
activities which are apart from and do not impair the existing collateral base.
Accordingly, as a result of the Reorganization, the Holding Company would be
free to pursue business strategies and growth opportunities which would not
otherwise be available to the Company. While management presently is not
considering any particular transaction or arrangement for the business of the
Holding Company following the Reorganization, the Reorganization is expected to
make available more opportunities for value-enhancing growth in the future.
YOUR BOARD OF DIRECTORS UNANIMOUSLY BELIEVES THAT THE PROPOSED
REORGANIZATION IS IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND
RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
A detailed explanation of the proposed Reorganization and the other matters
to be acted upon at the meeting is contained in the accompanying Proxy
Statement/Prospectus, which you are urged to read carefully.
It is important that your shares be represented at the meeting. Regardless
of whether you plan to attend the meeting, please mark, sign and return the
enclosed proxy in the accompanying envelope at your earliest convenience.
Sincerely,
EDWARD F. CRAWFORD
Chairman, Chief Executive Officer and
President
<PAGE> 3
PARK-OHIO INDUSTRIES, INC.
23000 EUCLID AVENUE
CLEVELAND, OHIO 44117
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 1998 annual meeting of shareholders of
ParkOhio Industries, Inc., an Ohio corporation (the "Company"), will be held at
the Aurora High School Auditorium, 109 West Pioneer Trail, Aurora, Ohio, on
Thursday, May 28, 1998, at 3:30 P.M., Cleveland Time, for the following
purposes:
1. Election of Directors. To elect four directors, as set forth in the
accompanying Proxy Statement/Prospectus, to serve for a term expiring at
the annual meeting of shareholders in the year 2000;
2. Holding Company Reorganization. To approve the Merger Agreement dated
February 20, 1998 and the transactions contemplated thereby, as more
fully described in the accompanying Proxy Statement/Prospectus;
3. Long-Term Incentive Plan. To approve the 1998 Long-Term Incentive Plan,
the terms of which are described in the accompanying Proxy
Statement/Prospectus;
4. Appointment of Independent Auditors. To ratify the appointment of Ernst
& Young LLP as the Company's independent auditors for 1998; and
5. Other Business. 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 8, 1998 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. Your proxy will not be used if you attend the annual meeting and
vote in person.
By Order of the Board of Directors
RONALD J. COZEAN
Secretary and General Counsel
April , 1998
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PARK-OHIO INDUSTRIES, INC. PKOH HOLDING CORP.
PROXY STATEMENT FOR PROSPECTUS FOR
ANNUAL MEETING OF SHAREHOLDERS 11,000,000 SHARES OF COMMON STOCK,
TO BE HELD ON MAY 28, 1998 PAR VALUE $1.00 PER SHARE
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This Proxy Statement/Prospectus is being furnished to shareholders of
ParkOhio Industries, Inc., an Ohio corporation (the "Company"), in connection
with the solicitation of proxies by the Board of Directors of the Company for
use at the annual meeting of shareholders of the Company to be held in the
Aurora High School Auditorium, 109 West Pioneer Trail, Aurora, Ohio, on
Thursday, May 28, 1998, at 3:30 P.M., Cleveland Time.
This Proxy Statement/Prospectus also serves as the Prospectus of PKOH
Holding Corp., an Ohio corporation (the "Holding Company"), relating to the
offering and issuance of shares of common stock, $1.00 par value per share, of
the Holding Company ("Holding Company Common Stock") pursuant to an Agreement of
Merger, dated February 20, 1998 (the "Merger Agreement"), a copy of which is
attached as Appendix A to this Proxy Statement/Prospectus. The Merger Agreement
provides for a merger (the "Merger") which will effect a reorganization of the
Company into a holding company structure (the "Reorganization").
Upon effectiveness of the Merger, all of the outstanding shares of common
stock, par value $1.00 per share, of the Company ("Park-Ohio Common Stock"),
other than Dissenting Shares (as defined below under the caption "Proposed
Reorganization -- Rights of Dissenting Shareholders"), will be converted, by
operation of law and without any action on the part of the holders thereof, into
an equal number of shares of Holding Company Common Stock. As a result of the
Merger, shareholders of the Company will become shareholders of the Holding
Company and the Company will become a wholly-owned subsidiary of the Holding
Company. Following the Reorganization, the Company and its subsidiaries will
continue to carry on their respective businesses within the new holding company
structure. See "Proposed Reorganization -- Description of the Reorganization."
This Proxy Statement/Prospectus, the accompanying Notice of 1998 Annual
Meeting of Shareholders and the enclosed proxy are first being mailed to
shareholders on or about April , 1998.
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 PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Proxy Statement/Prospectus is April , 1998.
<PAGE> 5
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports and other information with the Securities and Exchange Commission
("Commission"). Such reports and other information can be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices located at Seven World Trade Center, 13th Floor, New York, New York
10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such material may be obtained at prescribed rates by writing the Commission,
Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission maintains a Web site, located at http://www.sec.gov., that contains
reports, proxy and information statements and other information regarding
registrants, including the Company, that file electronically with the
Commission.
If the Reorganization is consummated, the Holding Company will assume
reporting responsibilities under the 1934 Act, similar to the responsibilities
currently performed by the Company. The Holding Company has filed with the
Commission a Registration Statement on Form S-4 under the Securities Act of
1933, as amended (the "1933 Act"), relating to the Holding Company Common Stock
to be issued in connection with the Reorganization. This Proxy
Statement/Prospectus was filed as part of the Registration Statement as the
Prospectus of the Holding Company; however, it does not contain all of the
information set forth in the Registration Statement. The Registration Statement
and the exhibits thereto can be inspected at the Commission's public reference
facilities in Washington, D.C. and the Commission's regional offices in New York
and Chicago at the respective addresses set forth above. In addition, such
reports and other information concerning the Company may be inspected at the
Commission's Web site (at the internet address set forth above) and at the
offices of the National Association of Securities Dealers, Inc., 1735 K Street,
N.W., Washington, D.C. 20006-1506.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1997 (File No. 000-03134), which has been filed by the Company with the
Commission pursuant to the 1934 Act, is incorporated by reference in this Proxy
Statement/Prospectus and shall be deemed to be a part hereof.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this Proxy
Statement/Prospectus and prior to the 1998 annual meeting shall be deemed to be
incorporated by reference in this Proxy Statement/Prospectus and to be a part
hereof from their respective dates of filing. Any statement contained herein or
in any document incorporated or deemed to be incorporated shall be deemed to be
modified or superseded for all purposes of this Proxy Statement/Prospectus to
the extent that a statement contained in this Proxy Statement/Prospectus or in
any subsequently filed document which also is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Proxy Statement/Prospectus.
This Proxy Statement/Prospectus incorporates documents by reference which
are not presented herein or delivered herewith. The Company hereby undertakes to
provide without charge to each person to whom a copy of this Proxy
Statement/Prospectus has been delivered, upon written or oral request of such
person, a copy of any and all of the information that has been incorporated by
reference in this Proxy Statement/Prospectus (other than exhibits to the
information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that this Proxy
Statement/Prospectus incorporates). Persons requesting copies of exhibits to a
document that were not specifically incorporated by reference in such document
will be charged the costs of reproduction and mailing.
These documents are available upon request from Ronald J. Cozean, Secretary
and General Counsel, PKOH Holding Corp., 23000 Euclid Avenue, Cleveland, Ohio
44117, (216) 692-7200. In order to ensure timely delivery of the documents, any
request should be made by May 14, 1998.
2
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TABLE OF CONTENTS
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PAGE
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Available Information....................................... 2
Incorporation of Certain Documents by Reference............. 2
Summary Information Regarding the Reorganization Proposal... 5
General Information......................................... 8
Election of Directors....................................... 9
General................................................... 9
Recommendation and Vote Required.......................... 9
Biographical Information.................................. 9
Principal Shareholders...................................... 11
Certain Matters Pertaining to the Board of Directors........ 13
Board of Directors and its Committees..................... 13
Compensation of the Board of Directors.................... 13
Executive Compensation...................................... 14
Summary of Compensation................................... 14
Stock Options............................................. 14
Report of the Compensation and Stock Option Committee..... 15
Performance Comparisons..................................... 16
Certain Transactions........................................ 16
Proposed Reorganization..................................... 17
Description of the Reorganization......................... 17
Effective Time............................................ 17
Reasons for the Reorganization............................ 17
Recommendation and Vote Required.......................... 17
Other Effects of the Merger............................... 18
Stock Certificates........................................ 19
Rights of Dissenting Shareholders......................... 19
Certain Federal Income Tax Consequences................... 20
Restrictions on Affiliates................................ 21
Conditions to Consummation of Merger...................... 21
Amendment, Termination or Waiver.......................... 22
Description of Holding Company Capital Stock................ 22
Possible Effects of Certain Provisions of Holding Company
Organizational Documents.................................. 22
Authorized But Unissued Shares............................ 23
Classified Board; No Cumulative Voting.................... 23
Special Vote Required to Approve Certain Transactions with
Related Persons........................................ 24
Special Vote Required to Approve Certain Control Share
Acquisitions........................................... 24
Special Vote Required for Certain Amendments to
Organizational Documents............................... 26
Other Provisions.......................................... 26
Comparison of Shareholders' Rights.......................... 26
Authorized Shares......................................... 26
Number and Classification of Directors.................... 26
Responsibilities of Board Under Article SIXTH............. 27
Designated Offices........................................ 27
Cumulative Voting......................................... 27
Indemnification and Insurance............................. 27
Business.................................................... 29
The Company............................................... 29
The Holding Company....................................... 29
Management of the Holding Company........................... 29
Directors................................................. 29
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Officers.................................................. 30
Experts..................................................... 30
Legal Matters............................................... 30
Proposed 1998 Long-Term Incentive Plan...................... 30
General................................................... 30
Summary of 1998 Plan...................................... 31
Certain Federal Income Tax Consequences................... 33
Effect of Reorganization.................................. 34
Recommendation and Vote Required.......................... 34
Appointment of Independent Auditors......................... 34
Shareholder Proposals for the 1999 Annual Meeting........... 35
Annual Report............................................... 35
APPENDICES:
Agreement of Merger dated February 20, 1998................. A-1
Amended and Restated Articles of Incorporation of the
Holding Company........................................... B-1
Code of Regulations of the Holding Company.................. C-1
Dissenters' Rights Under Section 1701.85 of the Ohio Revised
Code...................................................... D-1
1998 Long-Term Incentive Plan............................... E-1
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SUMMARY INFORMATION
REGARDING THE REORGANIZATION PROPOSAL
This summary is necessarily general and abbreviated and has been prepared
to assist the shareholders of the Company in their review of the Proxy
Statement/Prospectus. The summary is not intended to be a complete explanation
of the matters covered in the Proxy Statement/Prospectus and is qualified in all
respects by reference to the more detailed information contained in the Proxy
Statement/Prospectus and the attached Appendices, which the shareholders of the
Company are urged to read carefully.
DESCRIPTION OF THE REORGANIZATION
The Reorganization of the Company into a holding company structure will be
accomplished pursuant to a Merger Agreement dated February 20, 1998 by and among
the Company, the Holding Company and PKOH Merger Corp., a wholly-owned
subsidiary of the Holding Company formed for the purpose of effecting the
Reorganization ("Merger Sub"). The Merger Agreement generally provides for
Merger Sub to be merged with and into the Company, with the Company as the
surviving corporation. Upon the consummation of the Merger, all of the
outstanding shares of Park-Ohio Common Stock (other than Dissenting Shares) will
be converted, by operation of law and without any action on the part of the
holders thereof, into an equal number of shares of Holding Company Common Stock
(on a share-for-share basis). As a result of the Merger: (i) shareholders of the
Company will become shareholders of the Holding Company; (ii) the Company will
become a wholly-owned subsidiary of the Holding Company; (iii) all of the
Holding Company Common Stock issued and outstanding immediately prior to the
Merger will be canceled; (iv) the corporate existence of Merger Sub will cease;
and (v) in all other respects, the pre-Merger corporate structure of the Company
will remain unchanged. See "Proposed Reorganization -- Description of the
Reorganization."
PARTIES TO THE REORGANIZATION
The Holding Company and Merger Sub are newly organized nonoperating
corporations formed under the laws of the State of Ohio for the purpose of
effecting the Reorganization. As noted above, upon the consummation of the
Reorganization, Merger Sub will cease to exist and the Holding Company will
become a holding company for the Company.
The Company (together with its operating subsidiaries) operates diversified
logistics and manufacturing businesses which serve a wide variety of industrial
markets. The Company's Manufactured Products Segment designs and manufactures a
broad range of high quality products engineered for specific customer
applications in the automotive, railroad, truck and aerospace industries. The
Company's Logistics Segment is a leading national supplier of fasteners (e.g.,
nuts, bolts and screws) and other industrial products to manufacturers and
distributors in the transportation, industrial, electrical and lawn and garden
equipment industries. Following the Reorganization, the Company and its
subsidiaries will continue to carry on their respective businesses within the
new holding company structure. See "Business -- The Company."
The principal executive offices of the Holding Company and the Company are
located at 23000 Euclid Avenue, Cleveland, Ohio 44117 and their telephone number
is (216) 692-7200.
EFFECTIVE TIME
The Merger will be effective upon the filing of a certificate of merger
relating to the Merger (the "Certificate of Merger") with the Secretary of State
of Ohio (the "Effective Time"). Such filing will be made as soon as practicable
following the satisfaction or waiver of all conditions set forth in the Merger
Agreement.
REASONS FOR THE REORGANIZATION
The Board of Directors of the Company believes that a holding company
structure will benefit the Company by, among other things, creating new avenues
for expansion and providing greater access to acquisition financing. Under the
current structure, the Company's expansion opportunities are limited by broad
financial and operating covenants contained in its financing arrangements with
certain lenders. These
5
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arrangements, while binding upon the Company and its subsidiaries, expressly
allow for the formation of a holding company to conduct activities which are
apart from and do not impair the existing collateral base. Accordingly, as a
result of the Reorganization, the Holding Company would be free to pursue
business strategies and growth opportunities which would not otherwise be
available to the Company. While management presently is not considering any
particular transaction or arrangement for the business of the Holding Company
following the Reorganization, the Reorganization is expected to make available
more opportunities for value-enhancing growth in the future.
RECOMMENDATION AND VOTE REQUIRED
Holders of record of Park-Ohio Common Stock at the close of business on
April 8, 1998 are entitled to vote at the 1998 annual meeting. A majority of the
outstanding shares of Park-Ohio Common Stock must be voted "FOR" Proposal 2 at
the 1998 annual meeting in order to approve the Reorganization. Your Board of
Directors has unanimously approved the Reorganization proposal and believes the
Reorganization is in the best interests of the Company and its shareholders.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THIS
PROPOSAL.
MANAGEMENT OF HOLDING COMPANY
The authorized number of directors of the Holding Company is presently
fixed at nine. Holding Company directors are divided into three classes and
elected for three-year terms so that the term of office of one class expires at
each annual meeting, upon election of successors. There is presently one vacancy
in the class of directors whose term is due to expire at the annual meeting of
Holding Company shareholders in the year 2001. While the initial directors of
the Holding Company consist of the same eight persons who are currently
directors of the Company, the classification and terms of such directors at the
Holding Company level differ from the classification and terms of such directors
at the Company level. See "Election of Directors" and "Management of the Holding
Company." The officers of the Holding Company consist of the same persons who
are presently serving as officers of the Company.
COMPARISON OF SHAREHOLDERS' RIGHTS
The Amended and Restated Articles of Incorporation and Code of Regulations
of the Holding Company (respectively, the "Holding Company Articles" and
"Holding Company Regulations") contain provisions which vary in some respects
from the Articles of Incorporation and Code of Regulations of the Company
(respectively, the "Company Articles" and "Company Regulations"). In addition,
as is the case with the current Company Articles and Company Regulations,
certain provisions of the Holding Company Articles and Holding Company
Regulations may be deemed to have anti-takeover effects which could delay, deter
or prevent a tender offer or takeover attempt, including one involving a premium
over the market price for the Holding Company Common Stock. While the Board of
Directors of the Holding Company believes that these provisions will have a
positive effect on long-term shareholder value, there can be no assurance that
such provisions would not at some point in time, depending on market and other
conditions, adversely affect the market price for the Holding Company Common
Stock. For a description of the Holding Company Common Stock and comparison of
the respective rights of shareholders of the Company and prospective
shareholders of the Holding Company, see "Description of Holding Company Capital
Stock," "Possible Effects of Certain Provisions of Holding Company
Organizational Documents" and "Comparison of Shareholders' Rights" below.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Merger is intended to qualify for federal income tax purposes as a
taxfree reorganization under Section 368(a)(1)(A) and (a)(2)(E) of the Internal
Revenue Code ("Code"), or as a tax-free exchange under Section 351(a) of the
Code, in which no gain or loss will be recognized by Company shareholders upon
the conversion of their shares of Park-Ohio Common Stock into shares of Holding
Company Common Stock pursuant to the Merger. See "Proposed
Reorganization -- Certain Federal Income Tax Consequences."
6
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RIGHTS OF DISSENTING SHAREHOLDERS
Holders of Park-Ohio Common Stock who comply with the requirements of
Section 1701.85 of the Ohio Revised Code will be entitled to dissenters' rights
if the Merger is consummated. Only shareholders who do not vote in favor of the
proposed Reorganization at the 1998 annual meeting may exercise dissenters'
rights. To perfect their dissenters' rights, such shareholders must send a
written demand for payment for their shares of Park-Ohio Common Stock within ten
days after the 1998 annual meeting and comply with all other requirements of
Section 1701.85. See "Proposed Reorganization -- Rights of Dissenting
Shareholders." See also Appendix D to this Proxy Statement/Prospectus, which
sets forth the text of Section 1701.85.
STOCK CERTIFICATES
No Holding Company Common Stock certificates are expected to be issued
immediately following the Merger. Instead, following the Effective Time, the
Park-Ohio Common Stock certificates which were outstanding immediately prior to
the Effective Time will be deemed for all purposes to represent the shares of
Holding Company Common Stock into which the shares of Park-Ohio Common Stock
formerly evidenced by such certificates were converted pursuant to the Merger.
SHAREHOLDERS OF THE COMPANY SHOULD NOT SURRENDER THEIR PARK-OHIO COMMON STOCK
CERTIFICATES FOR EXCHANGE AT THIS TIME. It is expected that Holding Company
Common Stock certificates will be issued only in connection with future
transfers of Holding Company Common Stock (upon surrender of the Park-Ohio
Common Stock certificate for transfer), or upon specific request by a
shareholder following the consummation of the Merger.
OTHER EFFECTS OF THE MERGER
Approval of the Merger Agreement and the Reorganization by the shareholders
of the Company at the 1998 annual meeting will also constitute approval by such
shareholders, as prospective shareholders of the Holding Company, of the Merger
Agreement provisions relating to the Holding Company, including, among other
things, the adoption by the Holding Company of the Holding Company Articles and
Holding Company Regulations, the use of Holding Company Common Stock in the
administration of certain Company benefit plans, the listing of the Holding
Company Common Stock for trading on the Nasdaq Stock Market and the election to
the Holding Company Board of Directors of the persons who are serving on the
Board of Directors of the Holding Company immediately prior to the Merger, all
as further described herein. See "Proposed Reorganization -- Other Effects of
the Merger."
CONDITIONS TO CONSUMMATION OF THE MERGER
Consummation of the Merger is subject to certain conditions precedent,
including receipt by the Company of an opinion from its legal counsel as to the
federal income tax consequences described herein, the filing and effectiveness
of the Holding Company Articles and the satisfaction of all conditions
established by the Nasdaq Stock Market for listing the Holding Company Common
Stock for trading on such market following the Effective Time. See "Proposed
Reorganization -- Conditions to Consummation of the Merger."
AMENDMENT, TERMINATION OR WAIVER
The Board of Directors of the Company may cause the Merger Agreement to be
amended or terminated (and may cause any term or condition thereof to be waived)
at any time prior to the filing of the Certificate of Merger with the State of
Ohio if it determines for any reason that such amendment, termination or waiver
would be advisable. However, no such amendment or waiver may be effected after
shareholder approval of the Merger Agreement if such amendment or waiver would
(i) alter or change the amount or kind of shares to be received by shareholders
of the Company in the Merger or (ii) result in alterations or changes which,
alone or in the aggregate, materially adversely affect the rights of such
shareholders.
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SHAREHOLDER QUESTIONS
Representatives of Morrow & Co. Inc., which is assisting in the proxy
solicitation, will be available to help answer any questions shareholders may
have concerning the Reorganization proposal or any other matter to be acted upon
at the annual meeting. A special toll-free telephone number, 1-800- ,
has been established for this purpose.
GENERAL INFORMATION
This Proxy Statement/Prospectus is furnished in connection with the
solicitation of proxies by the Board of Directors of the Company to be voted at
the annual meeting of shareholders of the Company to be held at the Aurora High
School Auditorium, 109 West Pioneer Trail, Aurora, Ohio, on Thursday, May 28,
1998, at 3:30 P.M., Cleveland Time, and any and all adjournments, postponements
or continuations thereof. This Proxy Statement/Prospectus and the accompanying
Notice of 1998 Annual Meeting of Shareholders and proxy are first being mailed
to shareholders on or about April , 1998. 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 (as
described below), 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 Company Articles and Ohio law, shareholders are entitled to
request cumulative voting in the election of directors. 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. In an election involving cumulative voting, each shareholder may cast
all votes for a single nominee or may distribute votes among as many nominees as
such shareholder 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 1998 annual meeting is April 8, 1998. As of April 8, 1998,
there were issued and outstanding shares of Park-Ohio Common Stock.
Each share 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 and broker non-votes will be counted as present at the
meeting for purposes of determining a quorum, but will not be counted as voting,
except as otherwise required by law and indicated herein.
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 Morrow &
Co., Inc., a professional proxy soliciting firm, to assist in the solicitation
of proxies and will pay such firm a fee, estimated to be $20,000, plus
reimbursement of out-of-pocket expenses.
8
<PAGE> 12
ELECTION OF DIRECTORS
GENERAL
The authorized number of directors of the Company is presently fixed at
nine, divided into two classes of four members and five members, respectively.
The directors of each class are elected for two-year terms so that the term of
office of one class of directors expires at each annual meeting. One vacancy
presently exists in the class of directors whose term of office is due to expire
at the 1999 annual meeting.
In August 1997, the Board appointed Matthew V. Crawford to fill the vacancy
created by Mr. John J. Murray's resignation and to serve as a director for the
remainder of the unexpired term. In February 1998, following the death of
Richard S. Sheetz, the Board appointed Felix J. Tarorick to serve as a director
for the remainder of Mr. Sheetz' unexpired term. Also in February 1998, the
Board increased the number of authorized directors from seven to nine and
appointed Kevin R. Greene to serve as a director for a term which is due to
expire at the 1999 annual meeting.
The terms of office of Lewis E. Hatch, Jr., Thomas E. McGinty, Lawrence O.
Selhorst and Felix J. Tarorick will expire on the day of the 1998 annual
meeting, upon election of successors. The Board of Directors has nominated each
such director to be re-elected for a two-year term and until his successor is
elected and qualified. The persons named in the accompanying proxy will vote the
proxies received by them (unless authority to vote is withheld) for the election
of Lewis E. Hatch, Jr., Thomas E. McGinty, Lawrence O. Selhorst and Felix J.
Tarorick. If any nominee is not available at the time of election, the proxy
holders may vote in their discretion for a substitute or such vacancy may be
filled later 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 Park-Ohio Common Stock
represented at the meeting is required to elect Lewis E. Hatch, Jr., Thomas E.
McGinty, Lawrence O. Selhorst and Felix J. Tarorick as directors of the Company
to serve until the annual meeting of shareholders in the year 2000.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" LEWIS E. HATCH,
JR., THOMAS E. MCGINTY, LAWRENCE O. SELHORST AND FELIX J. TARORICK AS DIRECTORS.
BIOGRAPHICAL INFORMATION
Information is set forth below regarding the nominees for election and the
directors who will continue in office as directors of the Company 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. While the Holding Company Board presently consists of the same
eight persons listed below, its directors are classified differently and have
different terms of office than do Company directors. If the Reorganization is
approved and consummated, shareholders of the Company will become shareholders
of the Holding Company. For further information concerning the Holding Company
Board of Directors and the ways in which it differs from the Company Board of
Directors, see "Comparison of Shareholders' Rights -- Number and Classification
of Directors" and "Management of the Holding Company -- Directors."
9
<PAGE> 13
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION
- --------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION
NAME AGE AND OTHER DIRECTORSHIPS
---- ------ -----------------------
<S> <C> <C>
Lewis E. Hatch, Jr.+# 71 Director of the Company since 1992; retired, former Chairman
and Chief Operating Officer, Rusch International
(international medical device company) from 1986 to July
1992; Director, Teleflex, Incorporated and ImageMax, Inc.
Thomas E. McGinty*+ 68 Director of the Company since 1986; former Interim Chairman
of the Board and Chief Executive Officer of the Company from
November, 1991 to June, 1992; President, Belvoir
Consultants, Inc. (management consultants) since 1983
Lawrence O. Selhorst#+ 65 Director of the Company since 1995; Chairman of the Board
and Chief Executive Officer of American 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
Felix J. Tarorick 55 Director of the Company since 1998; Vice President of
Operations of the Company since 1996; President of the
Company's Metal Forming Group since 1995; President of Kay
Home Products, Inc. since 1992
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS WHOSE TERMS OF OFFICE
WILL CONTINUE AFTER THE MEETING
- --------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION
NAME AGE AND OTHER DIRECTORSHIPS
---- ------ -----------------------
<S> <C> <C>
Edward F. Crawford* 58 Director of the Company since 1992; Chairman and Chief
Executive Officer of the Company since 1992; President of
the Company since 1997; former Director of the Company from
1989 until 1991; Chairman and Chief Executive Officer,
Crawford Group, Inc. (manufacturing businesses) since 1964;
Director of Continental Global Group, Inc.
Matthew V. Crawford 28 Director of the Company since 1997; Assistant Secretary and
Corporate Counsel of the Company since February 1995;
President of Crawford Container Company since 1991
James W. Wert*# 51 Director of the Company since 1992; retired, former Senior
Executive Vice President and Chief 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;
Director of Continental Global Group, Inc.
Kevin R. Greene 39 Director of the Company since 1998; Chairman and Chief
Executive Officer of Value Investing Partners, Inc.
(international investment banking firm) since 1992; formerly
a management consultant with McKinsey & Company
</TABLE>
- ---------------
*Member, Executive Committee
+Member, Audit Committee
#Member, Compensation and Stock Option Committee
10
<PAGE> 14
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information with respect to
beneficial ownership of Park-Ohio Common Stock by: (i) each person (or group of
affiliated persons) known to the Company to be the beneficial owner of more than
five percent of the outstanding Park-Ohio Common Stock; (ii) each director of
the Company; (iii) each Named Executive Officer individually; and (iv) all
directors and executive officers of the Company as a group. Unless otherwise
indicated, the information is as of March 31, 1998 and the nature of beneficial
ownership consists of sole voting and investment power.
<TABLE>
<CAPTION>
SHARES OF
NAME OF BENEFICIAL OWNER COMMON STOCK PERCENT OF CLASS
------------------------ ------------ ----------------
<S> <C> <C>
Edward F. Crawford.......................................... 2,907,000(a) [26.0]%
Matthew V. Crawford......................................... 313,933(b) [2.9]%
Kevin R. Greene............................................. 0 *
Thomas E. McGinty........................................... 123,700(c) 1.1%
Felix J. Tarorick........................................... 89,167(d) *
James S. Walker............................................. 62,267(e) *
James W. Wert............................................... 47,000(c) *
Lawrence O. Selhorst........................................ 43,701(c) *
Lewis E. Hatch, Jr.......................................... 26,060(c) *
Ronald J. Cozean............................................ 34,667(f) *
Patrick W. Fogarty.......................................... 16,000(g) *
Pioneering Management Corporation........................... 980,000(h) [8.9]%
Kennedy Capital Management, Inc............................. 715,550(i) 6.5%
Dimensional Fund Advisors, Inc.............................. 703,761(j) 6.4%
Artisan Partners Limited Partnership........................ 599,700(k) [5.5]%
Directors and executive officers as a group (11 persons).... [3,663,495] [32.2]%
</TABLE>
- ---------------
* Less than one percent.
<TABLE>
<S> <C>
(a) The total includes 2,112,500 shares over which Mr. E.
Crawford has sole voting and investment power, 22,500 shares
owned by L'Accent de Provence of which Mr. E. Crawford is
President and owner of 25% of its capital stock and over
which Mr. E. Crawford shares voting and investment power,
9,500 shares owned by Mr. E. Crawford's wife as to which Mr.
E. 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. E. Crawford has sole voting power. The address of Mr. E.
Crawford is the business address of the Company.
(b) Includes 8,333 shares of Park-Ohio Common Stock issuable
pursuant to currently exercisable stock options.
(c) Includes 12,000 shares of Park-Ohio Common Stock issuable
pursuant to currently exercisable stock options.
(d) Includes 36,667 shares of Park-Ohio Common Stock issuable
pursuant to currently exercisable stock options.
(e) Includes 36,667 shares of Park-Ohio Common Stock issuable
pursuant to currently exercisable stock options.
(f) Includes 34,667 shares of Park-Ohio Common Stock issuable
pursuant to currently exercisable stock options.
(g) Includes 16,000 shares of Park-Ohio Common Stock issuable
pursuant to currently exercisable stock options.
(h) Based on information set forth on Amendment No. 3 to
Schedule 13G dated January 21, 1998. Pioneering Management
Corporation ("PMC"), a registered investment advisor,
reported sole voting power and sole investment power over
the 980,000 shares beneficially owned as of December 31,
1997. The address for PMC is 60 State Street, Boston,
Massachusetts 02109.
</TABLE>
11
<PAGE> 15
<TABLE>
<S> <C>
(i) Based on information set forth on Amendment No. 1 to
Schedule 13G dated February 10, 1998. Included in the
715,550 shares beneficially owned as of December 31, 1997
are 614,150 shares which Kennedy Capital Management, Inc.
("Kennedy Capital") reports it has sole voting power.
Kennedy Capital reported sole investment power over all the
shares. The address of Kennedy Capital is 10829 Olive Blvd.,
St. Louis, Missouri 63141.
(j) Based on information set forth on Amendment No. 1 to
Schedule 13G dated February 6, 1998. Dimensional Fund
Advisors Inc. ("Dimensional"), a registered investment
advisor, reported beneficial ownership of 703,761 shares of
Park-Ohio Common Stock as of December 31, 1997, 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, for all of which Dimensional 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. The
address for Dimensional is 1299 Ocean Avenue, 11th Floor,
Santa Monica, California 90401.
(k) Based on information set forth on Schedule 13G dated
February 10, 1998. Artisan Partners Limited Partnership
("Artisan Partners") reported beneficial ownership of
599,700 shares as of December 31, 1997. Artisan Partners
reported shared voting and investment power with respect to
all such shares. The address for Artisan Partners is 1000
North Water Street, #1770, Milwaukee, Wisconsin 53202.
</TABLE>
12
<PAGE> 16
CERTAIN MATTERS PERTAINING TO THE BOARD OF DIRECTORS
BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors has established an Executive Committee, an Audit
Committee, a Compensation and Stock Option Committee and an Outside Directors
Committee. During 1997, the Board held six meetings, the Audit Committee held
two meetings, the Compensation and Stock Option Committee (the "Compensation
Committee") held one meeting, the Executive Committee held no meetings and the
Outside Directors Committee held one meeting. During 1997, each of the directors
attended at least 75% of the meetings of the Board and of any committee on which
he served.
The Executive Committee has all powers and rights necessary to exercise the
full authority of the Board of Directors in the management of the business and
affairs of the Company when necessary in between meetings of the Board of
Directors. The Executive Committee consists of Messrs. E. Crawford, McGinty and
Wert, with Mr. McGinty as its chairman.
The Audit Committee is primarily concerned with the effectiveness of the
Company's accounting policies and practices, financial reporting and internal
controls. The Audit Committee is authorized to: (i) make recommendations to the
Board of Directors regarding the engagement of the Company's independent
accountants; (ii) review the plan, scope and results of the annual audit, the
independent auditors' letter of comments and management's response thereto, and
the scope of any nonaudit services which may be performed by the independent
auditors; (iii) manage the Company's policies and procedures with respect to
internal accounting and financial controls; and (iv) review any changes in
accounting policy. The Audit Committee consists of Messrs. Hatch, McGinty and
Selhorst, with Mr. Hatch as its chairman.
The Compensation Committee is authorized and directed to: (i) review and
approve the compensation and benefits of the executive officers; (ii) review and
approve the annual salary plans; (iii) review management organization and
development; (iv) review and advise management regarding the benefits, including
bonuses, and other terms and conditions of employment of other employees; and
(v) administer any stock option plans which may be adopted and the granting of
options under such plans. The Compensation Committee consists of Messrs. Hatch,
Selhorst and Wert, with Mr. Selhorst as its chairman.
The Outside Directors Committee is authorized to review corporate
governance matters, including any potential conflict of interest that may arise
involving certain, if any, employee directors. The Outside Directors Committee
consists of Messrs. Hatch, McGinty, Selhorst and Wert, with Mr. Wert as its
chairman.
COMPENSATION OF THE BOARD OF DIRECTORS
The Company compensates nonemployee directors for serving on the Board of
Directors and reimburses them for any expenses incurred as a result of Board of
Directors meetings. Nonemployee directors receive compensation in the form of
option grants in accordance with the Company's 1996 Non-employee Director Stock
Option Plan approved by the shareholders of the Company at the 1996 Annual
Meeting. During 1997, Messrs. Hatch, McGinty, Selhorst and Wert each received a
nonstatutory stock option to purchase 6,000 shares of Common Stock.
13
<PAGE> 17
EXECUTIVE COMPENSATION
SUMMARY OF COMPENSATION
The following table sets forth the respective amounts of compensation paid
to the Chairman of the Board and Chief Executive Officer and the four other
highest paid executive officers of the Company (collectively, the "Named
Executive Officers") for each of the years indicated.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION SECURITIES ------------
--------------------------- UNDERLYING ALL OTHER
OPTIONS/ COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) SARS(#)(2) SATION($)(3)
--------------------------- ---- --------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Edward F. Crawford.......................... 1997 225,000 80,000 0 164
Chairman of the Board, Chief 1996 225,000 2,000 500,000 164
Executive Officer and President 1995 225,000 0 0 164
Felix J. Tarorick (1)....................... 1997 150,000 45,000 0 3,164
Vice President of Operations 1996 150,000 25,000 10,000 3,164
James S. Walker............................. 1997 170,000 21,250 0 3,164
Vice President and Chief Financial Officer 1996 140,000 30,000 10,000 3,164
1995 140,000 20,000 10,000 3,464
Ronald J. Cozean............................ 1997 100,000 25,000 0 2,664
Secretary and General Counsel 1996 100,000 25,000 7,000 2,664
1995 90,000 20,000 10,000 1,464
Patrick W. Fogarty (1)...................... 1997 110,000 25,000 0 2,864
Director of Corporate Development 1996 110,000 10,000 4,000 2,564
</TABLE>
- ---------------
(1) Mr. Tarorick and Mr. Fogarty became executive officers in 1996.
(2) Reflects the number of shares of Park-Ohio Common Stock covered by stock
options granted during the years shown. No stock appreciation rights
("SARs") were granted to the Named Executive Officers during the years
shown.
(3) For the year ended December 31, 1997, all other compensation includes
contributions made by the Company under the Company's Supplemental Defined
Contribution Plan as follows: Mr. Tarorick $3,000 and Mr. Walker $3,000, and
under the Company's Individual Account Retirement Plan: Mr. Cozean $2,500
and Mr. Fogarty $2,700; and insurance premiums paid by the Company as
follows: Mr. Crawford $164, Mr. Tarorick $164, Mr. Walker $164, Mr. Cozean
$164 and Mr. Fogarty $164.
STOCK OPTIONS
The Company has in effect an Amended and Restated 1992 Stock Option Plan
(the "1992 Plan") that permits the granting of "non-statutory stock options" and
"incentive stock options." The 1992 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 1992 Plan
shall not exceed 850,000, subject to certain adjustments. The option price for
stock options granted under the 1992 Plan is fixed by the Compensation
Committee, but in no event will it be less than the fair market value of the
Park-Ohio Common Stock on the date of grant. The 1992 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 1992 Plan at any time on or prior to February 18, 2002.
No stock options were granted to the Named Executive Officers during 1997.
14
<PAGE> 18
The following table sets forth information regarding the exercise of stock
options by Named Executive Officers in 1997 and the value of unexercised options
as of December 31, 1997.
AGGREGATED OPTION/SAR EXERCISES IN 1997
AND DECEMBER 31, 1997 OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES DECEMBER 31, 1997 DECEMBER 31, 1997
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE(1)
---- ----------- -------- ----------------- -------------------
<S> <C> <C> <C> <C>
Ronald J. Cozean................. None N/A 29,000/8,000 $164,126/$46,999
Edward F. Crawford............... 100,000 $787,500 100,000/400,000 $462,500/$1,850,000
Felix J. Tarorick................ 25,000 $196,875 30,000/10,000 $226,876/$56,249
James S. Walker.................. 25,000 $196,875 30,000/10,000 $226,876/$56,249
Patrick W. Fogarty............... None N/A 14,666/9,334 $59,497/$39,003
</TABLE>
- ---------------
(1) The "Value of Unexercised In-the-Money Options/SARs at December 31, 1997"
was calculated by determining the difference between the fair market value
of the underlying Park-Ohio Common Stock at December 31, 1997 (the Nasdaq
closing price of the Park-Ohio Common Stock on December 31, 1997 was $18.25)
and the exercise price of the option. An option is "In-the-Money" when the
fair market value of the underlying Park-Ohio Common Stock exceeds the
exercise price of the option.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
Mr. Crawford, Chairman, Chief Executive Officer, and President, Mr.
Tarorick, Vice President of Operations, Mr. Walker, Vice President and Chief
Financial Officer, Mr. Cozean, Secretary and General Counsel, and Mr. Fogarty,
Director of Development are the named executive officers of the Company. Messrs.
Crawford, Tarorick, Walker, Cozean and Fogarty receive a base salary and are
eligible to receive a bonus and stock options under the 1992 Plan. The
Compensation and Stock Option Committee of the Board ("Committee") administers
the 1992 Plan and is empowered to grant options to officers and key employees of
the Company and its subsidiaries.
The Committee's objective is to compensate executive officers based on
effort and contribution to the Company. Therefore, base salaries are set below
industry norms, but the executive officer has the opportunity to earn a sizeable
percentage of his base salary as a bonus based on merit. Bonuses for executive
officers, other than the CEO and Vice President of Operations, are recommended
to the Committee by Mr. Crawford based on his subjective determination of the
executive's performance. The Vice President of Operations' bonus is determined
based on the operating profit of the businesses which he principally oversees.
The CEO's bonus is determined by the Committee based on discussions with Mr.
Crawford regarding the earnings performance of the Company and a self-evaluation
of his performance.
During 1997, the base salaries for all executive officers were identical to
base salaries for 1996, except for Mr. Walker who received a $30,000 increase in
his base salary. No options were granted to executive officers in 1997.
Executive officers did receive bonuses. Mr. Crawford recommended that Messrs.
Walker, Cozean, and Fogarty receive bonuses of $21,250, $25,000 and $25,000
respectively. The Committee approved these bonuses. The Committee approved a
bonus of $45,000 for Mr. Tarorick based on the operating profits of the
companies he oversees.
Mr. Crawford's base salary, $225,000, has been constant for the past five
years. Mr. Crawford's bonus for 1997 was $80,000. In light of the Company's
performance in 1997, the Committee believes that Mr. Crawford's compensation for
1997 is below average relative to industry norms.
During 1997, the members of the Committee were:
Lewis E. Hatch, Jr.
Lawrence O. Selhorst, Chairman
James W. Wert
15
<PAGE> 19
PERFORMANCE COMPARISONS
The chart set forth below compares the cumulative total shareholder return
of the Company for the five years ended December 31, 1997 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, 1992
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 PARK-OHIO MARKET (US SELF-DETERMINED
(FISCAL YEAR COVERED) INDUSTRIES, INC. COMPANIES) PEER GROUP
<S> <C> <C> <C>
12/31/92 100 100 100
12/31/93 257.5 114.8 97.7
12/30/94 257.5 112.2 92.7
12/29/95 322.5 158.7 137.0
12/31/96 257.5 195.2 200.6
12/31/97 365.0 239.5 199.6
</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 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.
CERTAIN TRANSACTIONS
GAMCO, a wholly-owned subsidiary of the Company, leases space in three
buildings in Conneaut, Ohio: (i) a 91,500 square foot facility owned by a
company owned by Mr. M. Crawford, at a monthly rent of $26,833; (ii) an
additional 70,000 square foot attached facility owned by Mr. E. Crawford, at a
monthly rate of $9,000; and (iii) a separate 50,000 square foot facility owned
by Mrs. E. Crawford, at a monthly rent of $3,000. Ajax leases a facility in
Cleveland, Ohio at a monthly rent of $20,833. This facility is owned by a
corporation whose shareholders are Mr. E. Crawford and his son, Mr. M. Crawford.
Value Investing Partners, Inc. of which Kevin R. Greene is the Chairman and
Chief Executive Officer, received $100,000 from the Company for its
participation in the placement of the Company's 9-1/4% Senior Subordinated Notes
due 2007.
The Company believes that the foregoing transactions are all on terms at
least as favorable to the Company as if negotiated on an arms-length basis with
unrelated third parties.
16
<PAGE> 20
PROPOSED REORGANIZATION
DESCRIPTION OF THE REORGANIZATION
The Reorganization of the Company into a holding company structure will be
accomplished pursuant to a Merger Agreement dated February 20, 1998 by and among
the Company, the Holding Company and Merger Sub. The Merger Agreement has been
approved by the respective Boards of Directors of the Company, the Holding
Company and Merger Sub. In addition, the Merger Agreement has been approved by
the Company in its capacity as sole shareholder of the Holding Company and by
the Holding Company in its capacity as sole shareholder of Merger Sub.
The Merger Agreement provides for a Merger in which Merger Sub is merged
with and into the Company, with the Company as the surviving corporation. At the
Effective Time, all of the shares of Park-Ohio Common Stock outstanding
immediately prior to the Effective Time will be converted, by operation of law
and without any action on the part of the holders thereof, into an equal number
of shares of Holding Company Common Stock, subject to the rights of Dissenting
Shareholders, as described below under the caption "Rights of Dissenting
Shareholders." All of the shares of Merger Sub outstanding immediately prior to
the Effective Time will be converted at the Effective Time into 100 shares of
Park-Ohio Common Stock, which shares will constitute all of the shares of
ParkOhio Common Stock issued and outstanding immediately following the Effective
Time. The shares of Holding Company Common Stock outstanding immediately prior
to the Effective Time will be canceled and any cash or other property paid by
the Company to subscribe to such shares will be refunded to the Company.
As a result of the Merger, (i) the Company will become a wholly-owned
subsidiary of the Holding Company; (ii) shareholders of the Company will become
shareholders of the Holding Company; (iii) Merger Sub will be merged out of
existence; and (iv) in all other respects, the pre-Merger corporate structure of
the Company and its subsidiaries will remain unchanged.
EFFECTIVE TIME
The Merger will be effective upon the filing of the Certificate of Merger
with the Secretary of State of Ohio. Such filing will be made as soon as
practicable following the satisfaction or waiver of all conditions set forth in
the Merger Agreement.
REASONS FOR THE REORGANIZATION
The Board of Directors of the Company believes that a holding company
structure will benefit the Company by, among other things, creating new avenues
for expansion and providing greater access to acquisition financing. Under the
current structure, the Company's expansion opportunities are limited by broad
financial and operating covenants contained in its financing arrangements with
certain lenders. These arrangements, while binding upon the Company and its
subsidiaries, expressly allow for the formation of a holding company to conduct
activities which are apart from and do not impair the existing collateral base.
Accordingly, as a result of the Reorganization, the Holding Company would be
free to pursue business strategies and growth opportunities which would not
otherwise be available to the Company. While management presently is not
considering any particular transaction or arrangement for the business of the
Holding Company following the Reorganization, the Reorganization is expected to
make available more opportunities for value-enhancing growth in the future.
RECOMMENDATION AND VOTE REQUIRED
The affirmative vote of a majority of the outstanding shares of Park-Ohio
Common Stock is required to approve the Merger Agreement and the Reorganization
proposal.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE REORGANIZATION
PROPOSAL AND BELIEVES THE REORGANIZATION IS IN THE BEST INTERESTS OF THE COMPANY
AND ITS SHAREHOLDERS. ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE "FOR" THIS PROPOSAL.
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OTHER EFFECTS OF THE MERGER
Approval of the Merger Agreement and the Reorganization by the shareholders
of the Company at the 1998 annual meeting will also constitute approval by such
shareholders, as prospective shareholders of the Holding Company Common Stock,
of all provisions of the Merger Agreement which relate to the Holding Company,
including the actions summarized below. Shareholders are urged to review
carefully all of the provisions of the Merger Agreement, the Holding Company
Articles and the Holding Company Regulations, attached as Appendices A, B and C,
respectively, to this Proxy Statement/Prospectus.
Organizational Documents. The Merger Agreement provides that the Holding
Company Articles (in the form of Appendix B attached to this Proxy
Statement/Prospectus) shall be filed with the Secretary of State of Ohio, and
shall become effective in accordance with Ohio law, on or before the Effective
Time. The Merger Agreement further provides that the Holding Company Articles
and Holding Company Regulations in effect immediately prior to the Effective
Time shall be and continue to be the Holding Company Articles and Holding
Company Regulations at and after the Effective Time until thereafter duly
altered, amended or repealed in accordance with the provisions thereof and Ohio
law.
Stock Options. The Merger Agreement provides that each option to purchase
shares of Park-Ohio Common Stock which has been granted under any Company stock
option plan or otherwise and is outstanding immediately prior to the Effective
Time will, by operation of law and without any action on the part of the
optionee, be converted into and become an option to purchase the same number of
shares of Holding Company Common Stock as the number of shares of Park-Ohio
Common Stock purchasable under such option immediately prior to the Effective
Time, at the same option price per share and upon the same terms and subject to
the same conditions as are in effect at the Effective Time.
Use of Holding Company Stock for Certain Company Plans. The Merger
Agreement requires the Holding Company and the Company to take all actions which
may be necessary or desirable to provide for the use, following the Merger, of
Holding Company Common Stock (instead of Park-Ohio Common Stock) in the
administration of the following plans: (i) the Park-Ohio Amended and Restated
1992 Stock Option Plan; (ii) the 1996 Non-Employee Director Stock Option Plan;
and (iii) if approved by the shareholders of the Company at its 1998 annual
meeting of shareholders, the 1998 Long-Term Incentive Plan. Approval of the
Merger Agreement by the shareholders of the Company at the 1998 annual meeting
will not automatically constitute an approval of the 1998 Long-Term Incentive
Plan, which is presented to the Company's shareholders for consideration as a
separate proposal. See "Proposed 1998 Long-Term Incentive Plan" below.
Holding Company Directors. The Merger Agreement provides that the persons
who are directors of the Holding Company immediately prior to the Effective Time
shall continue to be the directors of the Holding Company at and after the
Effective Time for the balance of the terms for which they were elected, subject
to earlier death, resignation or removal.
Nasdaq Listing. The Merger Agreement requires that the parties to the
Merger Agreement to take all actions which may be necessary or appropriate in
order to arrange for the listing for trading on the Nasdaq Stock Market, as of
the Effective Time, of the Holding Company Common Stock to be issued in
connection with the Merger or reserved for issuance pursuant to stock-based
plans of the Company. Park-Ohio Common Stock is presently traded on the Nasdaq
Stock Market under the symbol PKOH. The reported closing price for a share of
ParkOhio Common Stock on , 1998 was $ . Following
consummation of the Merger, it is anticipated that the ticker symbol for the
Holding Company Common Stock on the Nasdaq Stock Market will be . If
the Merger is effected, the Park-Ohio Common Stock (which will then be owned by
the Holding Company) will be delisted from trading on the Nasdaq Stock Market.
Assumption of Certain Agreements. The Merger Agreement provides for the
assignment by the Company and assumption by the Holding Company, as of the
Effective Time, of all indemnification agreements between the Company and any
director, officer or employee of the Company or any of its affiliates
("Indemnification Agreements"). See "Comparison of Shareholder Rights --
Indemnification and Insurance."
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Federal Securities Laws. The Holding Company will be subject to reporting
obligations after the Merger which are similar to those currently performed by
the Company. Following the Merger, the Company will continue to file certain
reports under the 1934 Act from time to time, as required by law or the terms of
its financing arrangements with certain lenders.
STOCK CERTIFICATES
No Holding Company Common Stock certificates are expected to be issued
immediately following the Merger. Instead, following the Effective Time, the
Park-Ohio Common Stock certificates which were outstanding immediately prior to
the Effective Time will be deemed for all purposes to represent the shares of
Holding Company Common Stock into which the shares of Park-Ohio Common Stock
formerly evidenced by such certificates were converted pursuant to the Merger.
SHAREHOLDERS OF THE COMPANY SHOULD NOT SURRENDER THEIR PARK-OHIO COMMON STOCK
CERTIFICATES FOR EXCHANGE AT THIS TIME. It is expected that Holding Company
Common Stock certificates will be issued only in connection with future
transfers of Holding Company Common Stock (upon surrender of the Park-Ohio
Common Stock certificate for transfer), or upon specific request by a
shareholder following the consummation of the Merger.
RIGHTS OF DISSENTING SHAREHOLDERS
Shareholders of the Company who so desire are entitled to relief as
dissenting shareholders under Section 1701.84 of the Ohio Revised Code. Any such
dissenting shareholder ("Dissenting Shareholder") may have the "fair cash value"
of such Dissenting Shareholder's shares of Park-Ohio Common Stock judicially
determined and paid to such Dissenting Shareholder, but only if such Dissenting
Shareholder strictly complies with the requirements of Section 1701.85 of the
Ohio Revised Code ("Section 1701.85"), a copy of which is attached hereto as
Appendix D.
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. Any shareholder of the Company
contemplating exercising Dissenters' Rights with respect to such Dissenting
Shareholder's shares ("Dissenting Shares") is urged to review carefully such
provisions because Dissenters' Rights will be lost if the procedural
requirements of Section 1701.85 are not fully and precisely satisfied.
To perfect Dissenters' Rights, a Dissenting Shareholder must satisfy each
of the following conditions:
(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 relief is sought
as of the date fixed for the determination of shareholders entitled to notice of
the 1998 annual meeting.
(b) No Vote in Favor of the Acquisition. Dissenting Shares must not be
voted in favor of the Reorganization proposal. This requirement will be
satisfied (1) if a proxy is signed and returned with instructions to vote
against such 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 such proposal. A vote in favor of the Reorganization 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 Reorganization proposal and will be deemed a waiver of
Dissenters' Rights. A Dissenting Shareholder may revoke a proxy at any time
before its exercise by filing with the Secretary of the Company an instrument
revoking it or a duly executed proxy bearing a later date, or by attending and
voting at the 1998 annual meeting.
(c) Filing Written Demand. Not later than ten days after the 1998 annual
meeting, a Dissenting Shareholder must deliver to the Company a written demand
(the "Demand") for payment of the fair cash value of the Dissenting Shares. The
Demand should be delivered to the Company at 23000 Euclid Avenue, Cleveland,
Ohio 44117, 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 Reorganization proposal does not itself
satisfy the requirements of a written demand for payment, and therefore does not
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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 such Dissenting Shareholder's 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 the Company. 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 the Company, 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, the Company
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 the Company at the address stated above,
within fifteen days of the sending of such request, to permit the Company 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 the Company terminates that person's rights as
a Dissenting Shareholder at the option of the Company 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 the Company 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 the Company 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.
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 1998 annual 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) the Dissenting Shareholder has not complied with Section
1701.85 (unless the Company waives compliance); (b) the Merger is abandoned or
otherwise not carried out; (c) the Dissenting Shareholder withdraws the Demand
(with the consent of the Company); or (d) no agreement has been reached between
the Company 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 shareholder exercising Dissenters' Rights, see " -- Certain Federal Income
Tax Consequences" below.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Merger is intended to qualify as a tax-free reorganization under
Section 368(a)(1)(A) and (a)(2)(E), or as a tax-free exchange under Section
351(a), of the Code. An advance ruling from the Internal Revenue Service to that
effect has not been obtained and will not be sought. The Company and the Holding
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Company have received an opinion from Squire, Sanders & Dempsey L.L.P., their
counsel, regarding material federal income tax consequences of the
Reorganization, to the effect that, based on certain assumptions and factual
representations:
(a) no gain or loss will be recognized by a holder of Park-Ohio Common Stock
upon the conversion of such Park-Ohio Common Stock into Holding Company
Common Stock pursuant to the Merger;
(b) the basis of shares of Holding Company Common Stock received by a former
holder of Park-Ohio Common Stock pursuant to the Merger in the aggregate
will equal the basis of such former holder's shares of Park-Ohio Common
Stock exchanged therefor, and the holding period for such shares of Holding
Company Common Stock will include the holding period for shares of Park-Ohio
Common Stock exchanged therefor to the extent such shares of Park-Ohio
Common Stock were held as a capital asset at the Effective Time;
(c) no gain or loss will be recognized by the Company or the Holding Company on
account of the Merger or the issuance of shares of Holding Company Common
Stock to the former holders of shares of Park-Ohio Common Stock pursuant to
the Merger Agreement; and
(d) a holder of Park-Ohio Common Stock who receives cash pursuant to the
exercise of dissenters' rights under Ohio law will recognize capital gain or
loss (if such Stock was held as a capital asset at the Effective Time) equal
to the difference, if any, between such holder's basis in the ParkOhio
Common Stock and the amount of cash received, provided such payment of cash
is not essentially equivalent to a dividend within the meaning of Section
302 (a "Dividend Equivalent Transaction"). A holder of Park-Ohio Common
Stock who receives only cash incident to the exercise of dissenters' rights
will generally not be treated as having engaged in a Dividend Equivalent
Transaction if such holder of Park-Ohio Common Stock owns no Holding Company
Common Stock (either actually or constructively within the meaning of
Section 318) at the Effective Time.
The foregoing discussion is a general summary which does not address tax
consequences which may depend on individual circumstances and it does not cover
the tax consequences of the Reorganization under state, local or foreign income
or other tax laws. Each shareholder of the Company is urged to consult with such
shareholder's own tax advisors with respect to the tax effects of the
Reorganization on such shareholder.
RESTRICTIONS ON AFFILIATES
Although the Holding Company Common Stock to be issued upon consummation of
the Merger has been registered under the 1933 Act, certain directors and
officers of the Company and other persons deemed to be affiliates of the Company
and their affiliates may not resell or otherwise dispose of the shares of
Holding Company Common Stock received by them in connection with the Merger
unless such sales are made pursuant to an effective registration under the 1933
Act or pursuant to Rule 144 (and, to the extent applicable, Rule 145)
promulgated by the Commission or another exemption from registration under the
1933 Act.
CONDITIONS TO CONSUMMATION OF THE MERGER
Consummation of the Merger is subject to the following conditions: (i) the
Company shall have received an opinion from its legal counsel to the effect that
the Reorganization will qualify for federal income tax purposes as a tax-free
reorganization under Section 368(a)(1)(A) and (a)(2)(E) of the Code, or as a
tax-free exchange under section 351(a) of the Code, in which no gain or loss
will be recognized by Company shareholders upon the conversion of Park-Ohio
Common Stock into Holding Company Common Stock pursuant to the Merger; (ii) the
Merger Agreement shall have been approved by the respective shareholders of the
Company, the Holding Company and the Merger Sub in accordance with Ohio law and
their respective Articles of Incorporation and Codes of Regulations; (iii) all
conditions for the listing on the Nasdaq Stock Market as of the Effective Time
of the Holding Company Common Stock to be issued and to be reserved for issuance
pursuant to the Merger shall have been satisfied; and (iv) the Holding Company
Articles, in the form of Appendix B attached to this Proxy Statement/Prospectus,
shall have become effective in accordance with Ohio law.
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AMENDMENT, TERMINATION OR WAIVER
The Board of Directors of the Company may cause the Merger Agreement to be
amended or terminated (and may cause any term or condition thereof to be waived)
at any time prior to the filing of the Certificate of Merger with the State of
Ohio if it determines for any reason that such amendment, termination or waiver
would be advisable. However, no such amendment or waiver may be effected after
shareholder approval of the Merger Agreement if such amendment or waiver would
(i) alter or change the amount or kind of shares to be received by shareholders
of the Company in the Merger or (ii) result in alterations or changes which,
alone or in the aggregate, materially adversely affect the rights of such
shareholders.
DESCRIPTION OF HOLDING COMPANY CAPITAL STOCK
Set forth below is a brief description of the Holding Company capital stock
that will be authorized for issuance upon the effectiveness of the Holding
Company Articles, including the Holding Company Common Stock to be issued to the
former shareholders of the Company at the Effective Time. If the Reorganization
proposal is approved by the Company at the 1998 annual meeting, the Holding
Company will cause the Holding Company Articles (in substantially the form
attached as Appendix B to this Proxy Statement/Prospectus) to become effective
prior to the Effective Time.
The Holding Company will be authorized to issue 40,000,000 shares of
Holding Company Common Stock, $1.00 par value per share, and 632,470 shares of
serial preferred stock, $1.00 par value per share ("Serial Preferred Stock"). At
the Effective Time, all shares of Holding Company stock outstanding immediately
prior to the Effective Time will be canceled and the Holding Company will issue
new shares of Holding Company Common Stock to the former shareholders of
Park-Ohio Common Stock, as described above under "Proposed
Reorganization -- Description of the Reorganization." No shares of Serial
Preferred Stock will be outstanding immediately following the Merger. The
Holding Company Articles will permit the Holding Company Board of Directors to
fix the rights and designations of the Serial Preferred Stock, to the extent
allowed by Ohio law.
Holders of outstanding shares of Holding Company Common Stock will be
entitled to one vote per share on all matters submitted to a vote of
shareholders, but will not have the right to vote cumulatively in the election
of directors.
Holders of Holding Company Common Stock will have equal rights to receive
dividends ratably, as and when declared by its Board out of funds legally
available therefor, subject to the dividend rights of holders of Serial
Preferred Stock that may be issued in the future. In the event of any
liquidation, dissolution or winding up of the Holding Company, holders of
Holding Company Common Stock will receive the assets of the Holding Company
available for distribution on a pro rata basis.
No holder of Holding Company Common Stock will have any preemptive or
preferential rights to purchase or subscribe to any shares of any class of the
Holding Company, except to the extent provided by the Holding Company Board of
Directors.
The transfer agent and registrar for the Holding Company Common Stock will
be National City Bank, Cleveland, Ohio.
POSSIBLE EFFECTS OF CERTAIN PROVISIONS OF
HOLDING COMPANY ORGANIZATIONAL DOCUMENTS
The Company's strategic plan, which also will be the plan of the Holding
Company, is focused on the primary goal of building value for the benefit of
long-term shareholders. The Chairman and CEO of the Company (who also is the
Company's largest shareholder) and the Board of Directors of the Company believe
this goal can best be attained by the Company's continued operation as an
independent entity. This concept is reflected in the Holding Company Articles
which, among other things, identify the preservation of value for long-term
shareholders as a founding principle. Under Ohio law, the directors have the
responsibility for selecting the time frame for achieving corporate goals. In
order to assure that the directors can carry out that
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responsibility, the Holding Company Articles and Holding Company Regulations
contain certain provisions (similar to provisions contained in the Company's
existing organizational documents) which may have the effect of discouraging
unilateral tender offers or other attempts to take over and acquire the business
of the Holding Company. If they discourage potential takeover bids, such
provisions could limit the opportunity for Holding Company shareholders to sell
their shares at a premium over then prevailing market prices. Such provisions
are intended to help preserve for the public shareholders of the Holding Company
the long-term value inherent in their investment in Holding Company Common Stock
and guard against offers which are not, or are otherwise made at a time or in a
manner which is not, in the best interests of the Holding Company and its
shareholders.
The Board of Directors of the Holding Company believes that it is in the
best position to consider all of the factors which may be relevant to a
determination of whether a control bid is in the best interests of the Holding
Company and its shareholders. A transaction which is negotiated and approved by
the Holding Company Board can be carefully planned and undertaken at an
opportune time in order to obtain maximum value for the Holding Company and its
shareholders, with due consideration given to matters such as the management and
business of the acquiror, the interests of other constituencies of the Holding
Company and maximum strategic development of the assets of the Holding Company
and its subsidiaries.
By contrast, the Holding Company Board believes that non-negotiated
takeover attempts present to shareholders the risk of a sale on terms which may
be less favorable than might otherwise be available. Such offers may be timed to
exploit fluctuations in the stock market to capture for the acquiror, at the
expense of the target company's public shareholders, the intrinsic value of the
target company's capital stock. Moreover, although a tender offer or other
takeover attempt may be made at a price substantially above the prevailing
market price for the target company's shares, such offers are sometimes made for
less than all of the outstanding target company shares, presenting shareholders
with the alternative of partially liquidating their investment at a time that
may be disadvantageous, or retaining their investment in an enterprise which is
under different management and whose objectives may not be similar to, or as
attractive as, those of the remaining shareholders. Such offers may also be made
for illegitimate or improper purposes (such as "greenmail") which seek to enrich
the bidder at the expense of the target company and its shareholders and may
cause significant disruption of the target company's business and management.
Accordingly, the Holding Company Board of Directors believes that the
provisions described below, which encourage potential acquirors to negotiate
with the Board and discourage the use of improper and coercive tactics, are in
the best interests of the Holding Company and its shareholders. In addition to
such provisions, the Board may, in the future, adopt other measures designed to
discourage non-negotiated takeover attempts, including a shareholder rights
plan. The Board currently is not aware of any plan by any third party to effect
a change of control in the Company.
AUTHORIZED BUT UNISSUED SHARES
Like the Company Articles, the Holding Company Articles will authorize the
issuance of up to 632,470 shares of Serial Preferred Stock. In addition, after
giving effect to the Merger, approximately, shares of Holding
Company Common Stock will be authorized but unissued and not reserved for
issuance. An effect of the existence of authorized but unissued shares of
Holding Company Common Stock and Serial Preferred Stock may be to enable the
Holding Company Board of Directors to render more difficult or discourage a
transaction to obtain control of the Holding Company by issuing such shares
without shareholder approval in transactions which dilute voting or other rights
of the proposed acquiror. The Holding Company has no present plans or intentions
to issue any of such shares.
CLASSIFIED BOARD; NO CUMULATIVE VOTING
The Holding Company's organizational documents provide for a classified
Board of Directors and no cumulative voting in the election of directors. Such
provisions may discourage purchases of a significant minority position because
they tend to delay and render more difficult a purchaser's ability to obtain
control of the Board. Although directors of the Holding Company may be removed
without cause, the Holding Company
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Regulations require the affirmative vote of at least 80% of the outstanding
shares of Holding Company Common Stock in order to remove any director.
SPECIAL VOTE REQUIRED TO APPROVE CERTAIN TRANSACTIONS WITH RELATED PERSONS
Article FIFTH of the Holding Company Articles ("Article FIFTH"), in most
respects, is substantially identical to corresponding provisions of the Company
Articles. See "Comparison of Shareholders' Rights." Except as provided below,
Article FIFTH requires the affirmative vote of 80% of the voting power of the
Holding Company (i) to adopt an agreement for the merger or consolidation of the
Holding Company with or into any entity which is the beneficial owner of more
than five percent (5%) of the voting power of the Company (any such beneficial
owner, a "Related Person"); (ii) to authorize the sale, lease, exchange,
transfer or other disposition of all or substantially all of the assets of the
Holding Company to a Related Person; or (iii) to authorize any purchase by the
Holding Company of any assets or securities of any Related Person in exchange,
in whole or part, for voting shares of the Holding Company.
Notwithstanding the foregoing, Article FIFTH expressly excludes from this
special vote requirement (i) any transaction which, but for such special vote
requirement, would not require the vote or consent of shareholders of the
Holding Company, (ii) any transaction with another person or entity if prior to
such transaction and prior to the time that such other person or entity shall
have become a Related Person, the Board of Directors of the Holding Company,
upon the unanimous recommendation of all directors of the Holding Company who
are neither "associates" nor "affiliates" (as such terms are defined under the
federal securities laws) of the Related Person, shall have approved (A) the
transaction or the entry by the Holding Company into a written understanding
with the Related Person substantially consistent with such transaction or (B)
the acquisition by such other person or entity of beneficial ownership of more
than five percent (5%) of the Voting Shares of the Corporation; or (iii) any
transaction with a corporation a majority of the outstanding voting power of
which is owned of record or beneficially by the Holding Company and its
subsidiaries.
SPECIAL VOTE REQUIRED TO APPROVE CERTAIN CONTROL SHARE ACQUISITIONS
Article SIXTH of the Holding Company Articles ("Article SIXTH"), in most
respects, is substantially identical to corresponding provisions of the Company
Articles. It is also substantially identical to the Ohio Control Share
Acquisition statute, Section 1701.831 of the Ohio Revised Code, as currently in
effect, although Article SIXTH provides for remedies and a level of director
discretion with regard to calling a meeting of shareholders not otherwise found
in Section 1701.831. Like the Company Articles, the Holding Company Articles
provide that the Ohio Control Share Acquisition Statute shall not apply to
acquisitions of its shares.
Article SIXTH provides that no person (or entity or group) shall make a
Control Share Acquisition (as defined below) without first obtaining the
authorization of the Holding Company's shareholders in accordance with certain
procedural requirements. A "Control Share Acquisition" is generally any
acquisition, directly or indirectly, of shares of the Holding Company which,
when added to all other shares of the Holding Company owned or controlled by the
acquiror, would entitle the acquiror, alone or with others, to exercise or
direct the exercise of the voting power of the Holding Company in the election
of directors within any of the following ranges of voting power: (i) one-fifth
or more but less than one-third of such voting power; (ii) one-third or more but
less than a majority of such voting power; or (iii) a majority or more of such
voting power.
Article SIXTH requires that the person proposing to make a Control Share
Acquisition deliver a notice to the Holding Company containing, among other
things, a description of the terms of the proposed acquisition and reasonable
evidence that the proposed Control Share Acquisition, if consummated, would not
be contrary to law and that the person who is giving the Notice has the
financial capacity to make such acquisition. Within 50 days of its receipt of
such notice, the Board of Directors of the Holding Company must call and hold a
special meeting of shareholders to vote on the proposed Control Share
Acquisition unless it has determined that (i) the notice was not given in good
faith, (ii) the proposed Control Share Acquisition would not be in the best
interests of the Holding Company or (iii) the proposed Control Share Acquisition
could not be consummated for financial or legal reasons. The responsibilities of
the Holding Company Board in this regard are substantially identical to the
responsibilities of the Company Board under corresponding provisions
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of the Company Articles, except that the Company Articles contain an additional
provision which requires the Company Board to call a Special Meeting
irrespective of any such determination if the proposed acquisition is for any
and all shares of the Company at a price higher than the highest price at which
shares of Park-Ohio Common Stock have been traded during the 90-day period prior
to the Company receiving requisite notice of the proposed acquisition.
Article SIXTH provides that in determining whether the proposed Control
Share Acquisition would be in the best interests of the Holding Company, a
director must consider the interests of the Holding Company's shareholders and,
in his discretion, may consider any of the following: the interests of the
Holding Company's employees, suppliers, creditors and customers; the economy of
the state and nation; community and societal considerations; and the long term
as well as short term interests of the Holding Company and its shareholders,
including the possibility that these interests may be best served by the
continued independence of the corporation. Article SIXTH also provides that a
determination by the Board that such a special meeting of shareholders should
not be called shall not be deemed void or voidable merely because one or more of
its directors or officers who participated in making such determination may be
deemed to be other than disinterested, if in any such case the material facts of
the relationship giving rise to a basis for self-interest are known to the
directors and the directors, in good faith reasonably justified by the facts,
make such determination by the affirmative vote of a majority of the
disinterested directors, even though the disinterested directors constitute less
than a quorum. For these purposes, a "disinterested director" means a director
whose material contacts with the Holding Company are limited principally to
activities as a director or shareholder. A director would not be deemed to be
other than a "disinterested director" merely because he would no longer be a
director if the proposed Control Share Acquisition were approved and
consummated.
If a special meeting is to be held, the Holding Company's notice to
shareholders must include or be accompanied by both the notice submitted to the
Holding Company by the person proposing to make a Control Share Acquisition and
a statement by the Holding Company of its position or recommendation with
respect to such acquisition or a statement that it has not taken a position or
made a recommendation.
For purposes of Article SIXTH, the person who delivered the notice may make
the proposed Control Share Acquisition if both of the following occur: (i) the
shareholders of the Holding Company authorize such acquisition by an affirmative
vote of a majority of (A) all voting shares represented at such meeting and (B)
all voting shares represented at such meeting which are not "Interested Shares"
(as defined below); and (ii) such acquisition is consummated, in accordance with
the terms so authorized, not later than 360 days following shareholder
authorization of the Control Share Acquisition.
Subject to certain exclusions, the term "Interested Shares" generally
refers to voting shares held or controlled by: (i) the person whose notice
prompted the calling of the special meeting of shareholders; (ii) any officer of
the Holding Company elected or appointed by the directors of the Holding
Company; (iii) any employee of the Holding Company who is also a director of the
Holding Company; (iv) any person who acquired his shares, directly or
indirectly, for valuable consideration during the period beginning with the date
of the first public disclosure of a proposed Control Share Acquisition and
ending on the record date of the special meeting if (A) the aggregate
consideration paid by such acquiring person for such shares exceeds $250,000 or
(B) the number of shares acquired by such acquiring person exceeds one-half of
one percent of the outstanding voting shares of the Holding Company; and (v) any
person who transfers voting shares for valuable consideration after the record
date of the special meeting as to shares so transferred, if accompanied by the
voting power in the form of a blank proxy, an agreement to vote as instructed by
the transferee, or otherwise.
Article SIXTH provides that the issuance or transfer of any shares in
violation of Article SIXTH ("Excess Shares") will be null and void. In the event
the Holding Company is not permitted to treat an issuance or transfer of Excess
Shares as null and void, Article SIXTH further provides that the holders of
Excess Shares will be deemed to hold such shares as agents of the Holding
Company. During the time when such shares are considered Excess Shares, they
will not be entitled to any voting rights, will not be considered to be
outstanding for quorum or voting purposes, and will not be entitled to receive
dividends, interest or any other distribution with respect to the Excess Shares.
Following a transfer of such shares to a person in whose
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hands such shares do not constitute Excess Shares, the Holding Company will
distribute to such transferee any dividends or other distributions which accrued
on such shares and were not previously paid or distributed.
SPECIAL VOTE REQUIRED FOR CERTAIN AMENDMENTS TO ORGANIZATIONAL DOCUMENTS
Certain provisions of the Holding Company Articles, such as those set forth
in Article FIFTH (transactions with related persons) and Article SIXTH (control
share acquisitions) may not be amended, altered or repealed except by the
affirmative vote of at least 80% of the outstanding voting shares of the Holding
Company. Such 80% vote is also required to amend, alter or repeal any of the
provisions of Section 7 (number of directors), Section 9 (classification,
election and term of office of directors) or Section 10 (removal of directors)
of the Holding Company Regulations, unless such amendment has been recommended
by at least two-thirds of the Continuing Directors. As used in the Holding
Company Regulations, the term "Continuing Directors" generally means, as of any
date of determination, members of the Holding Company Board who were either
elected as initial directors of the Holding Company (the eight current
directors) or were nominated for election or elected to the Board with the
approval of a majority of the Continuing Directors in office at the time of such
nomination or election.
OTHER PROVISIONS
Certain other provisions of the Holding Company Articles and Holding
Company Regulations may also tend to discourage attempts to acquire control of
the Holding Company. These include advance notice requirements for director
nominations and shareholder proposals, provisions which require the unanimous
written consent of the holders of all voting shares in order for the
shareholders to take action without a meeting, provisions which permit a special
meeting to be called by shareholders only with the approval of the holders of
50% or more of outstanding voting shares, and provisions which permit the
Holding Company to repurchase outstanding shares of its capital stock as
permitted by law.
COMPARISON OF SHAREHOLDERS' RIGHTS
A vote by the Company shareholders in favor of the Reorganization proposal
will constitute approval of the Holding Company Articles and Holding Company
Regulations. Upon the consummation of the Merger, shareholders of the Company
will become shareholders of the Holding Company and their rights as holders of
Holding Company Common Stock will be governed by the Holding Company Articles
and Holding Company Regulations.
Except in certain respects, the rights of the holders of Holding Company
Common Stock are substantially similar to the rights of the holders of the
ParkOhio Common Stock, as determined by Ohio law and the organizational
documents of each company. Set forth below is a brief summary of the material
differences between the respective rights of holders of Holding Company Common
Stock and the holders of Park-Ohio Common Stock. Such summary is qualified in
its entirety by reference to the information included in the exhibits to the
Registration Statement of which this Proxy Statement/Prospectus is a part and in
materials incorporated herein by reference.
AUTHORIZED SHARES
Upon the effectiveness of the Holding Company Articles, each of the Company
and the Holding Company will have authorized 632,470 shares of Serial Preferred
Stock and neither will have any of such shares outstanding. While the number of
shares of Holding Company Common Stock issued and outstanding immediately after
the Merger is expected to be the same as the number of shares of Park-Ohio
Common Stock issued and outstanding immediately prior to the Merger (assuming no
exercise of dissenters' rights), the total number of authorized shares of the
Holding Company will be significantly greater than the total number of
authorized shares of the Company (40,632,470 authorized shares of Holding
Company capital stock compared to only 20,632,470 authorized shares of Park-Ohio
capital stock).
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NUMBER AND CLASSIFICATION OF DIRECTORS
Both the Board of Directors of the Company and the Board of Directors of
the Holding Company presently consist of eight persons, all of whom serve on
both Boards. The authorized number of directors for each such Board is presently
fixed at nine. However, unlike the Company Regulations, which provide for a
Board of Directors consisting of no fewer than (6) nor more than twelve (12)
members, the Holding Company Regulations provide for a Board of Directors
consisting of no fewer than nine (9) nor more than fifteen (15) members. In
addition, while both the Company Regulations and the Holding Company Regulations
empower their respective shareholders and directors to effect changes in Board
size within the ranges noted above, they differ with respect to the procedure
for effecting such changes. Changes in the authorized number of Company
directors (within the established range) may be made by the holders of a
majority of the voting shares of the Company represented at any annual or
special meeting called for the purpose of electing directors or by a majority of
the directors then in office. The Holding Company Regulations require similar
votes with respect to changes in the authorized number of Holding Company
directors (within the established range), but further require that all such
changes be approved by a majority of the Continuing Directors and provide that
the number of directors fixed by shareholders may not be changed by more than
two (2) without shareholder approval.
In addition to the differences noted above, the Company Regulations and
Holding Company Regulations also differ with respect to the classification of
their respective directors. Unlike the Company's Board of Directors, which is
divided into two classes with directors in each class being elected for two-year
terms, the Holding Company's Board of Directors is divided into three classes
with directors in each class being elected for three-year terms. See "Management
of the Holding Company -- Directors."
RESPONSIBILITIES OF BOARD UNDER ARTICLE SIXTH
The responsibilities of the Holding Company Board under Article SIXTH of
the Holding Company Articles differ in some respects from the responsibilities
of the Company Board under Article SIXTH of the Company Articles. See "Possible
Effects of Certain Provisions of Holding Company Organizational Documents --
Special Vote Required to Approve Certain Control Share Acquisitions."
DESIGNATED OFFICES
Unlike the Company Regulations, the Holding Company Regulations provide for
the office of Vice Chairman. Like the Chairman of the Board, the Vice Chairman
must be selected by the Board from among the directors. In the absence of the
Chairman, the Vice Chairman is empowered to preside at meetings of the
shareholders and directors. The Vice Chairman also has such other powers and
duties as may be prescribed by the directors and, in the event of the death or
permanent incapacity of the Chairman, automatically succeeds to the office of
Chairman until the later of one year or such time as a successor is appointed in
accordance with the Holding Company Regulations.
CUMULATIVE VOTING
Unlike the Company's shareholders who are entitled to request cumulative
voting in the election of directors, shareholders of the Holding Company will
have no right to cumulative voting.
INDEMNIFICATION AND INSURANCE
The provisions of the Holding Company Regulations which allow, and in some
cases require, the Holding Company to provide indemnification to certain persons
and/or entities are, in effect, substantially similar to corresponding
provisions in the Company Regulations. In this regard, the Holding Company
Regulations provide that the Holding Company shall indemnify any director or
officer or any former director or officer of the Holding Company or any person
who is or has served at the request of the Holding Company as a director,
officer or trustee of another corporation, joint venture, trust or other
enterprise (and his heirs, executors and
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<PAGE> 31
administrators) against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement, actually and reasonably incurred by him by
reason of the fact that he is or was such director, officer or trustee in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative to the full extent and
according to the procedures and requirements set forth in the Ohio General
Corporation Law as the same may be in effect from time to time; and further that
such indemnification shall not be deemed to restrict the right of the Holding
Company to indemnify employees, agents and others as permitted by law.
Other provisions of the Holding Company Regulations, which have no
counterpart in the Company Regulations, merely enumerate (without limitation)
certain of the ways in which indemnification may be granted by the Holding
Company (e.g., pursuant to a vote of shareholders or disinterested directors or
pursuant to indemnification agreements) and authorize the Holding Company to
maintain director and officer liability insurance. The powers granted to the
Holding Company under such provisions, including the power to assume certain of
the Company's existing indemnification agreements and the power to enter into
new indemnification agreements, are generally the same as powers exercisable by
the Company pursuant to the Company Articles, the Company Regulations and Ohio
law.
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BUSINESS
THE COMPANY
The Company operates diversified manufacturing and logistics businesses
which serve a wide variety of industrial markets. The Company's Manufactured
Products Segment ("Manufactured Products") designs and manufactures a broad
range of high quality products engineered for specific customer applications.
The principal customers of Manufactured Products are original equipment
manufacturers ("OEMs") and end-users in the automotive, railroad, truck and
aerospace industries. The Company's Logistics Segment ("Logistics") is a leading
national supplier of fasteners (e.g., nuts, bolts and screws) and other
industrial products to OEMs, other manufacturers and distributors. In connection
with the supply of such industrial products, Logistics provides a variety of
value-added, cost-effective procurement solutions. The principal customers of
Logistics are in the transportation, industrial, electrical and lawn and garden
equipment industries. The Company's diversified operations moderate the effect
on the Company of downturns affecting individual operating units and industries
served.
Financial and additional information regarding the Company and its
subsidiaries is also included in the integrated Annual Report and Form 10-K of
the Company for the year ended December 31, 1997 delivered with this Proxy
Statement/Prospectus and incorporated by reference herein.
THE HOLDING COMPANY
The Holding Company is currently a nonoperating corporation that was
organized by the Company under the laws of the State of Ohio in February, 1998
for the purpose of serving as a holding company for the Company. Upon completion
of the Reorganization, the primary business of the Holding Company is expected
to be the ownership of Park-Ohio Common Stock. While it is anticipated that the
Holding Company in the future may pursue other investment opportunities
(including possible diversification through acquisitions and mergers), the
Holding Company presently has no arrangements or understandings regarding any
acquisition or merger opportunities and none is contemplated at this time.
The Holding Company is not expected to own or lease real or personal
property initially. Instead, it intends to utilize the premises, equipment and
furniture of the Company and/or its wholly-owned subsidiaries without the direct
payment of any direct rental fees to the Company or any such subsidiaries.
At the present time, the Holding Company does not intend to employ any
persons other than its management. It will utilize the support staff of the
Company and/or its wholly-owned subsidiaries from time to time and reimburse the
Company or the subsidiary, as the case may be, for the time of such employees.
If the Holding Company acquires other companies or pursues other lines of
business, it may hire additional employees to staff its needs.
It is expected that for the immediate future the competitive conditions to
be faced by the Holding Company will be the same as those faced by the Company.
The Holding Company has not, since its organization, been a party to any
legal proceedings.
The principal executive offices of the Holding Company are located at 23000
Euclid Avenue, Cleveland, Ohio 44117 and their telephone number is (216)
692-7200.
MANAGEMENT OF THE HOLDING COMPANY
DIRECTORS
The Company, which is currently the sole shareholder of the Holding
Company, has elected each of the persons listed below to serve as a director of
the Holding Company for the term set forth opposite his name and until his
successor is elected and qualified. All such persons are currently directors of
the Company. The approval by the Company's shareholders of the Merger Agreement
will constitute the approval by such
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<PAGE> 33
shareholders (as prospective shareholders of the Holding Company) of the
election of such persons to the Board of Directors of the Holding Company for
the terms and in the classes shown below.
<TABLE>
<CAPTION>
NAME TERM EXPIRING
---- -------------
<S> <C>
Thomas E. McGinty........................................... 1999
Kevin R. Greene............................................. 1999
Felix J. Tarorick........................................... 1999
Matthew V. Crawford......................................... 2000
Lewis E. Hatch, Jr.......................................... 2000
Lawrence O. Selhorst........................................ 2000
Edward F. Crawford.......................................... 2001
James W. Wert............................................... 2001
</TABLE>
OFFICERS
The Board of Directors of the Holding Company has appointed each of the
following persons to the office or offices set forth opposite his name:
<TABLE>
<S> <C>
Edward F. Crawford..... Chairman, Chief Executive Officer and President
James S. Walker........ Vice President and Chief Financial Officer
Felix J. Tarorick...... Vice Chairman and Vice President of Operations
Ronald J. Cozean....... Secretary and General Counsel
Matthew V. Crawford.... Assistant Secretary and Corporate Counsel
Patrick W. Fogarty..... Director of Corporate Development
</TABLE>
FOR FURTHER INFORMATION CONCERNING PERSONS SERVING AS DIRECTORS AND/OR
OFFICERS OF THE HOLDING COMPANY, SEE PAGES 9 THROUGH 16 OF THIS PROXY
STATEMENT/PROSPECTUS AND THE INFORMATION SET FORTH UNDER THE CAPTION "EXECUTIVE
OFFICERS OF THE REGISTRANT" FOLLOWING PART IV OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997, WHICH IS INCORPORATED BY
REFERENCE HEREIN.
EXPERTS
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, 1997 incorporated by reference in the Proxy Statement of Park-Ohio
Industries, Inc., which is referred to and made part of this Prospectus and
Registration Statement, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon which is incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the Holding
Company Common Stock will be passed upon by Squire, Sanders & Dempsey L.L.P.
PROPOSED 1998 LONG-TERM INCENTIVE PLAN
GENERAL
As described under "Executive Compensation -- Stock Options" herein, the
Company has in effect an Amended and Restated Stock Option Plan (as previously
defined, the "1992 Plan") pursuant to which certain employees of the Company and
its subsidiaries have been granted "non-statutory stock options" and "incentive
stock options" (collectively, "1992 Plan Stock Options"). The 1992 Plan was
reviewed by the Compensation and Stock Option Committee ("Committee") in early
1998 as part of its periodic assessment
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<PAGE> 34
of the Company's compensation policy for executive officers and key managers.
Based on a number of factors, including [information concerning incentive
programs utilized by other companies similar in size to the Company, the
performance of the Company in recent years and the number of stock options
available for future issuance under the 1992 Plan,] the Committee recommended
the adoption of a new long-term incentive plan to replace the 1992 Plan.
In February, 1998, the Board of Directors of the Company approved, subject
to shareholder approval, the 1998 Long-Term Incentive Plan ("1998 Plan") as a
replacement for the 1992 Plan. The 1998 Plan is intended to promote the longterm
growth and performance of the Company and its subsidiaries by providing an
opportunity for employees of the Company and its subsidiaries to participate
through share ownership in the long-term success and growth of the Company,
enhancing the Company's ability to attract and retain persons with desired
abilities, providing additional incentives for such persons and furthering the
identity of interests of employees and shareholders of the Company.
SUMMARY OF THE 1998 PLAN
The following summary of the essential features of the 1998 Plan is
qualified in its entirety by reference to the full text of the 1998 Plan, which
is attached to this Proxy Statement/Prospectus as Appendix E.
All employees of the Company and its direct and indirect subsidiaries and
other persons whose selection the Committee determines to be in the best
interests of the Company would be eligible to receive awards. At present, there
are approximately persons who would be eligible to participate in the 1998 Plan,
including the executives named in the Summary Compensation Table.
The 1998 Plan will be administered by the Committee, which will have
authority to interpret the 1998 Plan, to grant waivers of 1998 Plan restrictions
and to adopt such rules, regulations and policies for carrying out the 1998 Plan
as it may deem necessary or proper in order to further the purposes of the 1998
Plan. In particular, the Committee will have the authority to (i) select
participants, (ii) determine the number and type of awards to be granted, (iii)
determine the terms and conditions, not inconsistent with the terms of the 1998
Plan, to any award granted, (iv) interpret the terms and provisions of the 1998
Plan and any award granted, (v) prescribe the form of any agreement or
instrument executed in connection with any award and (vi) establish, amend and
rescind such rules, regulations and policies for the administration of the 1998
Plan as it may deem advisable from time to time.
Awards under the 1998 Plan may be in the form of stock options (either
"incentive stock options" within the meaning of Section 422 of the Code or
nonstatutory stock options), stock appreciation rights, restricted shares,
performance shares or stock awards.
Stock options will be exercisable in whole or in such installments and at
such times and upon such terms as may be determined by the Committee, provided
that no stock options will be exercisable more than ten years after the date of
grant. The exercise price of any option may not be less than the fair market
value of a share of Park-Ohio Common Stock on the date of the grant.
Participants may pay the exercise price of a stock option in cash, Park-Ohio
Common Stock, or a combination of cash and Park-Ohio Common Stock.
Stock appreciation rights ("SARs") entitle the recipient to receive a
payment, in cash or Park-Ohio Common Stock, equal to the appreciation in market
value of a stated number of shares of Park-Ohio Common Stock from the exercise
price to the fair market value on the date of exercise or surrender. SARs may be
granted either separately or in conjunction with other awards granted under the
1998 Plan. Any SAR related to a nonstatutory stock option may be granted at the
same time such option is granted or at any time thereafter before exercise or
expiration of such option. Any SAR related to an incentive stock option must be
granted at the same time such option is granted. Any SAR related to an option
will be exercisable only to the extent the related option is exercisable and
such SAR (or the applicable portion thereof) will terminate and will no longer
be exercisable upon the termination or exercise of the related option.
Similarly, upon exercise of an SAR as to some or all of the shares of Park-Ohio
Common Stock covered by a related option, the related option shall be canceled
automatically to the extent of the SARs exercised, and such shares of Park-Ohio
Common Stock will not thereafter be eligible for grant.
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<PAGE> 35
Restricted shares of Park-Ohio Common Stock may be awarded in such numbers
and at such times as the Committee determines. Restricted shares will be subject
to such terms, conditions or restrictions as the Committee deems appropriate
including, but not limited to, restrictions on transferability, requirements of
continued employment, individual performance or financial performance of the
Company. The period of vesting and forfeiture restrictions will be established
by the Committee at the time of grant, except that no restriction period may be
less than 12 months. During the period in which any restricted shares are
subject to forfeiture restrictions, the Committee may, in its discretion, grant
to the participant to whom such shares have been awarded all or any of the
rights of a shareholder with respect to such restricted shares, including the
right to vote such shares and to receive dividends with respect to such shares.
Performance shares may be awarded in the form of shares of Park-Ohio Common
Stock that are earned only after the attainment of predetermined performance
targets as established by the Committee at the time an award is made. A
performance target shall be based upon one or any combination of the following:
(i) revenues of the Company; (ii) operating income of the Company; (iii) net
income of the Company; (iv) earnings per Share; (v) the Company's return on
equity; (vi) cash flow of the Company; (vii) Company shareholder total return;
(viii) return on assets; (ix) return on investment; (x) asset turnover; (xi)
liquidity; (xii) capitalization; (xiii) stock price; (xiv) expenses; (xv)
operating profit and margin; (xvi) retained earnings; (xvii) market share;
(xviii) sales to targeted customers; (xix) customer satisfaction; (xx) quality
measures; (xxi) productivity; (xxii) safety measures; or (xxiii) educational and
technical skills of employees. The Committee shall be permitted to make
adjustments when determining the attainment of a performance target to reflect
extraordinary or nonrecurring items or events, or unusual nonrecurring gains or
losses identified in the Company's financial statements, as long as any such
adjustments are made in a manner consistent with Section 162(m) of the Code to
the extent applicable. Awards of performance shares made to participants subject
to Section 162(m) of the Code are intended to qualify under Section 162(m) and
provisions of such awards will be interpreted in a manner consistent with that
intent to the extent appropriate. The foregoing provisions of this paragraph are
also applicable to awards of restricted shares to the extent such awards of
restricted shares are subject to the financial performance of the Company. At
the end of the applicable performance period, performance shares will be
converted into shares of Park-Ohio Common Stock (or cash or a combination of
shares and cash) and distributed to participants based upon the applicable
performance entitlement. Award payments made in cash rather than the issuance of
shares will not, by reason of such payment in cash, result in additional shares
being available under the 1998 Plan.
Stock awards may be made in shares of Park-Ohio Common Stock or on a basis
valued in whole or in part by reference to, or otherwise based upon, shares of
Park-Ohio Common Stock. Stock awards will be subject to conditions established
by the Committee.
Subject to adjustment in the event of any change in the number of
outstanding shares by reason of a reorganization, recapitalization, stock split,
stock dividend, combination or exchange of shares, merger, consolidation or any
change in the corporate structure or capital stock of the Company, the aggregate
number of shares of Park-Ohio Common Stock which may be awarded under the 1998
Plan in each fiscal year of the Company shall be percent ( %) of the
total outstanding shares of Park-Ohio Common Stock as of the first day of such
year, provided that such number shall be increased in any year by the number of
shares available for grant under the 1998 Plan in previous years which were not
the subject of awards granted under the 1998 Plan in such years. No more than
shares shall be cumulatively available for the grant of incentive
stock options under the 1998 Plan and no more than shares shall be the
subject of awards to any individual participant in any one calendar year. Shares
issuable under the 1998 Plan may consist of authorized and unissued shares of
Park-Ohio Common Stock or shares of Park-Ohio Common Stock held in treasury.
In the event of a Change in Control (as defined in the 1998 Plan) of the
Company, and except as the Board may expressly provide otherwise, (i) all stock
options or SARs then outstanding will become fully exercisable as of the date of
the Change in Control, whether or not then otherwise exercisable, (ii) all
restrictions and conditions of all awards of restricted shares then outstanding
shall be deemed satisfied as of the date of the Change in Control, and (iii) all
awards of performance shares will be deemed to have been fully earned as of the
date of the Change in Control.
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<PAGE> 36
The Board may amend, suspend or terminate the 1998 Plan at any time,
provided that no such action shall be taken that would impair the rights under
an outstanding award without the participant's consent. Similarly, the Board may
amend the terms of any outstanding award, prospectively or retroactively, but no
such amendment shall impair the rights of any participant without the
participant's consent and no such amendment shall have the effect, with respect
to any employee subject to Section 162(m) of the Code, of increasing the amount
of any award from the amount that would otherwise be payable pursuant to the
formula and/or goals previously established for such participant.
Except as may be otherwise provided in the relevant award agreement, no
award or any benefit under the 1998 Plan will be assignable or transferable, or
payable to or exercisable by, anyone other than the participant to whom it was
granted.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary generally describes the principal federal income tax
consequences under current tax laws of certain events under the 1998 Plan. The
summary is general in nature and is not intended to cover all tax consequences
that may apply to a particular participant or to the Company, nor does it
describe foreign, state or local tax consequences.
No income will result to a participant upon the grant or exercise of an
incentive stock option ("ISO") provided that (i) there is no disposition of
stock received upon exercise of an ISO within two years from the date the ISO is
granted or within one year from the date the ISO is exercised (the "ISO holding
periods"); and (ii) the participant is an employee of the Company or a
subsidiary of the Company at all times during the period commencing on the date
of grant and ending on the date three months (or one year in the case of a
participant who is totally and permanently disabled) prior to the date of
exercise.
In the event of a disposition of stock received upon exercise of an ISO
after the ISO holding periods have been satisfied, any gain or loss, equal to
the difference between the amount realized upon such disposition and the option
price, generally will be taxable as capital gain or loss. In the event of a
disposition of stock received upon exercise of an ISO prior to the expiration of
the ISO holding periods, the participant will recognize ordinary income equal to
the excess of the fair market value of such stock at the time of exercise (or
the amount realized upon such disposition, if less) over the option price. If
the amount realized upon such disqualifying disposition exceeds the fair market
value of such stock at the time of exercise, the excess will be taxable as
capital gain.
No deduction is allowable to the Company upon the grant or exercise of an
ISO. In the event that a participant recognizes ordinary income as a result of a
disposition of stock received upon exercise of an ISO prior to the expiration of
the ISO holding periods, the company generally will be entitled to a deduction
in an amount equal to the ordinary income recognized by the participant.
No income is recognized upon the grant of a nonstatutory stock option to a
participant. The participant recognizes ordinary income upon exercise of the
nonstatutory stock option equal to the excess of the fair market value of the
stock received upon exercise of the stock option on the date of exercise over
the option price. Such ordinary income is subject to withholding if the
participant is an employee. The participant's tax basis in these shares will be
their fair market value when purchased. On subsequent sale of such shares, gain
or loss will be recognized in an amount equal to the difference between the tax
basis thereof and the amount realized on such sale.
A participant will not be taxed upon the award of an SAR. Upon exercise of
the SAR, the participant will recognize ordinary income equal to the amount of
cash received and the Company will be entitled to a corresponding deduction. In
the event a participant receives shares upon the exercise of an SAR, the
participant will recognize ordinary income equal to the value of the shares at
such time. If the participant is an employee, any ordinary income recognized
upon the exercise of an SAR is treated as wages subject to withholding.
A participant generally will not recognize taxable income upon the grant of
restricted shares, and the recognition of any income will be postponed until the
time that the restrictions on the shares lapse, at which
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<PAGE> 37
time the participant will recognize ordinary income (subject to withholding if
the participant is an employee) equal to the fair market value of the restricted
shares at the time that such restrictions lapse. A participant may elect to be
taxed at the time of the grant of restricted stock and, if this election is
made, the participant will recognize ordinary income equal to the fair market
value of the restricted shares at the time of grant determined without regard to
any of the restrictions thereon.
When performance shares are earned and stock is issued therefor, a
participant will realize ordinary income (subject to withholding if the
participant is an employee) equal to the fair market value of the performance
shares.
A participant will recognize ordinary income upon the receipt of stock
award (other than an award of performance shares or restricted shares) equal to
the fair market value of such stock on the date of such award. If the
participant is an employee, any ordinary income recognized as a result of a
stock award is treated as wages subject to withholding.
The Company generally will be entitled to a deduction equal to the ordinary
income recognized by the participant in the same taxable year in which the
participant recognizes ordinary income with respect to nonstatutory stock
options, restricted stock, performance shares, stock appreciation rights and
stock awards.
EFFECT OF THE REORGANIZATION
If the 1998 Plan is approved by the Company's shareholders and the
Reorganization is also approved and consummated, the Company and the Holding
Company will take all actions which in their judgment may be necessary or
advisable to provide for the use of Holding Company Common Stock (instead of
Park-Ohio Common Stock) in the administration of the 1998 Plan and the
qualification of the Holding Company as a participating employer with respect to
the 1998 Plan.
RECOMMENDATION AND VOTE REQUIRED
The affirmative vote of a majority of the shares of Park-Ohio Common Stock
represented at the 1998 annual meeting is required to approve the 1998 Plan.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE 1998 PLAN AND BELIEVES
THE 1998 PLAN IS IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THIS
PROPOSAL.
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 calendar year
1998.
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 1997 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.
34
<PAGE> 38
SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
Any shareholder who intends to present a proposal at the 1999 annual
meeting and who wishes to have the proposal included in the Company's (or the
Holding 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 16, 1998.
ANNUAL REPORT
The integrated Annual Report and Form 10-K of the Company for the year
ended December 31, 1997 is being mailed to each shareholder of record with this
Proxy Statement/Prospectus. Additional copies may be obtained from the
undersigned.
PARK-OHIO INDUSTRIES, INC.
RONALD J. COZEAN
Secretary and General Counsel
April , 1998
35
<PAGE> 39
APPENDIX A
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER ("Agreement") is made as of February 20, 1998 by
and among PARK-OHIO INDUSTRIES, INC., an Ohio corporation ("Park-Ohio"), PKOH
MERGER CORP., an Ohio corporation ("Merger Sub") and PKOH HOLDING CORP., an Ohio
corporation ("Holding Company").
WHEREAS, Park-Ohio presently has authorized capital stock consisting of
20,632,470 shares, all of a par value of $1 per share, divided into two classes
as follows: 632,470 shares of serial preferred stock, none of which is issued
and outstanding ("Park-Ohio Serial Preferred Stock"); and 20,000,000 shares of
common stock, of which approximately 11,000,000 shares are issued and
outstanding ("Park-Ohio Common Stock");
WHEREAS, Merger Sub presently has authorized capital stock consisting of
100 shares of common stock, $1 par value per share, all of which is issued and
outstanding and owned beneficially and of record by the Holding Company ("Merger
Sub Common Stock");
WHEREAS, the Holding Company presently has authorized capital stock
consisting of 100 shares of common stock, $1 par value per share, all of which
is issued and outstanding and owned beneficially and of record by Park-Ohio
("Holding Company Common Stock");
WHEREAS, if this Agreement is approved by the Park-Ohio shareholders, then,
prior to the Effective Time (defined below), the Holding Company intends to
amend and restate its Articles of Incorporation to provide for, among other
things, authorized capital stock consisting of 40,632,470 shares, all of a par
value of $1 per share, divided into two classes as follows: 632,470 shares of
serial preferred stock and 40,000,000 shares of Holding Company Common Stock;
and
WHEREAS, the Boards of Directors of the respective parties hereto deem it
advisable to merge Merger Sub with and into Park-Ohio in accordance with the
General Corporation Law of the State of Ohio ("OGCL") and this Agreement for the
purpose of establishing the Holding Company as the parent corporation of
Park-Ohio.
NOW THEREFORE, in consideration of the premises and agreements contained
herein, the parties agree that (i) Merger Sub shall be merged with and into
Park-Ohio (the "Merger"), and (ii) the terms and conditions of the Merger, the
mode of carrying it into effect, the manner of converting shares of capital
stock of the parties hereto and other matters relating thereto shall be as
follows:
ARTICLE 1
THE MERGER
1.1 Effective Time. The Merger shall become effective upon the date and
time of the filing of a certificate of merger with the Secretary of State of
Ohio in accordance with the OGCL, or such later date and/or time as may be
specified in such certificate of merger (the "Effective Time").
1.2 Surviving Corporation. At the Effective Time, Merger Sub shall be
merged with and into ParkOhio. Park-Ohio shall be the surviving corporation
(hereinafter sometimes called the "Surviving Corporation") and shall continue
its corporate existence under the laws of the State of Ohio. At the Effective
Time, the separate corporate existence of Merger Sub shall cease.
1.3 Effect of the Merger. At the Effective Time, the Merger shall have
the effects provided for herein and in Section 1701.82 of the OGCL.
1.4 Articles of Incorporation of the Surviving Corporation. The Articles
of Incorporation of Merger Sub in effect immediately prior to the Effective Time
shall be the Articles of Incorporation of the Surviving Corporation at and after
the Effective Time until thereafter duly altered, amended or repealed in
accordance with the provisions thereof and applicable law; provided, however,
that such Articles of Incorporation shall be
<PAGE> 40
amended as of the Effective Time to change the name of the Surviving Corporation
to "Park-Ohio Industries, Inc."
1.5 Code of Regulations of the Surviving Corporation. The Code of
Regulations of Merger Sub in effect immediately prior to the Effective Time
shall be the Code of Regulations of the Surviving Corporation at and after the
Effective Time until thereafter duly altered, amended or repealed in accordance
with the provisions thereof, the Surviving Company's Articles of Incorporation
and applicable law.
1.6 Directors of the Surviving Corporation. At the Effective Time, the
persons who were directors of Park-Ohio immediately prior to the Effective Time
shall become the directors of the Surviving Corporation for the balance of the
terms for which such persons were elected as directors of Park-Ohio, subject to
earlier death, resignation or removal, all in accordance with the Articles of
Incorporation and Code of Regulations of the Surviving Corporation and the OGCL.
1.7 Officers of the Surviving Corporation. At the Effective Time, the
persons who were officers of Park-Ohio immediately prior to the Effective Time
shall become the officers of the Surviving Corporation and each such person
shall hold the same offices in the Surviving Corporation as he held in Park-Ohio
immediately prior to the Effective Time, all in accordance with the Articles of
Incorporation and Code of Regulations of the Surviving Corporation and the OGCL.
1.8 Articles of Incorporation of the Holding Company. Prior to the
Effective Time, the Holding Company shall cause its Articles of Incorporation to
be amended and restated so that they are in substantially the form of Exhibit A
attached hereto. The Articles of Incorporation of the Holding Company, as so
amended and restated and in effect immediately prior to the Effective Time,
shall be and continue to be the Articles of Incorporation of the Holding Company
at and after the Effective Time until thereafter duly altered, amended or
repealed in accordance with the provisions thereof and applicable law.
1.9 Code of Regulations of the Holding Company. The Code of Regulations
of the Holding Company in effect immediately prior to the Effective Time,
attached hereto as Exhibit B, shall be and continue to be the Code of
Regulations of the Holding Company at and after the Effective Time until
thereafter duly altered, amended or repealed in accordance with the provisions
thereof, the Holding Company's Articles of Incorporation and applicable law.
1.10 Directors and Officers of the Holding Company. The persons who are
directors and officers of the Holding Company immediately prior to the Effective
Time shall continue as directors and officers, respectively, of the Holding
Company in accordance with the Code of Regulations of the Holding Company.
1.11 Appropriate Actions. Subject to the terms and conditions of this
Agreement, and in accordance with the OGCL, the Holding Company, Park-Ohio and
Merger Sub, respectively, shall take all such actions as may be necessary or
appropriate in order to effectuate the transactions contemplated hereby.
ARTICLE 2
MANNER, BASIS AND EFFECT OF CONVERTING SHARES
2.1 Conversion of Shares. At the Effective Time:
(a) all shares of Park-Ohio Common Stock issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted (on a
share-for-share basis) into an equal number of shares of Holding Company
Common Stock; provided, however, that such conversion shall not affect
shares of Park-Ohio Common Stock of holders, if any, who perfect their
rights as dissenting shareholders under Section 1701.85 of the OGCL with
respect to such shares.
(b) all shares of Merger Sub Common Stock issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into 100
shares of Park-Ohio Common Stock, which shares shall constitute all of the
A-2
<PAGE> 41
outstanding shares of Park-Ohio Common Stock immediately following the
Effective Time and shall not be further converted into shares of Holding
Company Common Stock pursuant Section 2.1(a) hereof.
(c) all shares of Holding Company Common Stock issued and outstanding
immediately prior to the Effective Time shall be canceled and any cash or
other property theretofore paid by the Company to subscribe to such shares
shall be refunded to the Company.
2.2 Effect of Conversion. At and after the Effective Time, each stock
certificate which immediately prior to the Effective Time represented
outstanding shares of Park-Ohio Common Stock ("Park-Ohio Stock Certificate")
shall be deemed for all purposes to evidence ownership of, and to represent, the
number of shares of Holding Company Common Stock into which the shares of
Park-Ohio Common Stock represented by such ParkOhio Stock Certificate
immediately prior to the Effective Time have been converted pursuant to Section
2.1 hereof. The registered holder of any Park-Ohio Stock Certificate outstanding
immediately prior to the Effective Time, as such owner appears on the books and
records of Park-Ohio or its transfer agent immediately prior to the Effective
Time, shall, until such Park-Ohio Stock Certificate is surrendered for transfer
or exchange, have and be entitled to exercise all voting and other rights with
respect to and to receive any dividends or other distributions on the shares of
Holding Company Common Stock into which the shares formerly represented by such
Park-Ohio Stock Certificate have been converted pursuant to Section 2.1 hereof.
2.3 Exchange of Certification. Each holder of a Park-Ohio Stock
Certificate shall, upon surrender of such Park-Ohio Stock Certificate to the
Holding Company or its transfer agent for cancellation after the Effective Time,
be entitled to receive from the Holding Company or its transfer agent a
certificate representing the number of shares of Holding Company Common Stock
into which the shares formerly represented by such Park-Ohio Stock Certificate
have been converted pursuant to Section 2.1 hereof.
2.4 Stock Option Plans. Each option to purchase shares of Park-Ohio
Common Stock granted under Park-Ohio's Amended and Restated 1992 Stock Option
Plan, 1996 Non-Employee Director Stock Option Plan or any other stock option as
to which Park-Ohio or any of its affiliates has assumed or incurred obligations
(hereinafter collectively referred to as "Option Plans") which is outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of such optionee, be converted into and become an
option to purchase the same number of shares of Holding Company Common Stock as
the number of shares of Park-Ohio Common Stock purchasable under such option
immediately prior to the Effective Time at the same option price per share and
upon the same terms and subject to the same conditions as are in effect at the
Effective Time. The Holding Company shall reserve for purposes of the Option
Plans a number of shares of Holding Company Common Stock equal to the number of
shares of Park-Ohio Common Stock reserved by Park-Ohio for issuance under the
Option Plans as of the Effective Time. Park-Ohio and the Holding Company shall
take all actions which may be necessary or desirable to provide for the use of
Holding Company Common Stock (instead of Park-Ohio Common Stock) following the
Effective Time in the administration of (i) the Option Plans and (ii) if
approved by the shareholders of Park-Ohio at its 1998 annual meeting of
shareholders, the 1998 Long Term Incentive Plan.
2.5 Stock Transfer Books. The stock transfer books for Park-Ohio Common
Stock shall be deemed to be closed at the Effective Time and no transfer of
shares of Park-Ohio Common Stock outstanding prior to the Effective Time shall
thereafter be made on such books. As of the Effective Time, Holding Company
shall establish a stock register reflecting ownership of Holding Company Common
Stock by the former holders of record of ParkOhio Common Stock whose shares of
Park-Ohio Common Stock were converted into shares of Holding Company Common
Stock in the Merger.
2.6 Post-Merger Rights of Holders. Following the Effective Time, the
holders of Park-Ohio Stock Certificates shall cease to have any rights with
respect to the shares of the Surviving Corporation and their sole rights shall
be with respect to the Holding Company Common Stock into which their shares of
Park-Ohio Common Stock shall have been converted by the Merger, subject to the
rights of any dissenting shareholders under Section 1701.85 of the OGCL.
2.7 Assignment and Assumption of Indemnification Agreements. The Company
hereby assigns to the Holding Company, and the Holding Company hereby accepts
and assumes, all of the Company's
A-3
<PAGE> 42
responsibilities existing as of the Effective Time under the Indemnification
Agreements listed on Schedule 2.7 attached hereto. The Company and the Holding
Company shall take such further actions following the Effective Time as may be
necessary or advisable to evidence such assignment and assumption.
ARTICLE 3
CONDITIONS TO THE MERGER
3.1 Shareholder Approval. The principal terms of this Agreement shall
have been approved by the respective shareholders of Park-Ohio, the Holding
Company and the Merger Sub in accordance with the OGCL and their respective
Articles of Incorporation and Codes of Regulations.
3.2 Listing of Holding Company Common Stock. All conditions for the
listing on the Nasdaq Stock Market as of the Effective Time of the Holding
Company Common Stock to be issued and to be reserved for issuance pursuant to
the Merger shall have been satisfied.
3.3 Holding Company Articles of Incorporation. The Holding Company
Articles of Incorporation shall have been amended and restated in accordance
with Section 1.8 hereof and such Articles of Incorporation, as so amended and
restated, shall have become effective in accordance with the OGCL.
3.4 Tax Opinion. The Company shall have received an opinion from its
legal counsel to the effect that the Merger will qualify for federal income tax
purposes as a tax-free reorganization under Section 368(a)(1)(A), or as a
tax-free exchange under Section 351(a), of the Internal Revenue Code of 1986, as
amended, in which no gain or loss will be recognized by the holders of Park-Ohio
Common Stock upon the conversion of such Park-Ohio Common Stock into Holding
Company Common Stock pursuant to the Merger.
ARTICLE 4
MISCELLANEOUS
4.1 Amendment, Termination or Waiver. The Board of Directors of Park-Ohio
may cause this Agreement to be amended or terminated (and may cause any term or
condition hereof to be waived) at any time prior to the filing of the
certificate of merger with the State of Ohio if it determines for any reason
that such amendment, termination or waiver would be advisable. However, no such
amendment or waiver may be effected after approval of this Agreement by the
pre-Merger shareholders of Park-Ohio if such amendment or waiver would (i)
change the amount or kind of shares to be received by the pre-Merger
shareholders of Park-Ohio pursuant to the Merger or (ii) result in alterations
or changes which, alone or in the aggregate, materially adversely affect the
rights of such shareholders.
4.2 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original hereof.
4.3 Ohio Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Ohio.
A-4
<PAGE> 43
IN WITNESS WHEREOF, the undersigned parties, have executed this Agreement
as of the day and year first above written.
PARK-OHIO INDUSTRIES, INC.
By: /s/ EDWARD F. CRAWFORD
--------------------------------------------------------
Title: Chairman, CEO & President
--------------------------------------------------------
Attest: /s/ RONALD J. COZEAN
--------------------------------------------------------
Title: Secretary & General Counsel
--------------------------------------------------------
PKOH MERGER CORP.
By: /s/ EDWARD F. CRAWFORD
--------------------------------------------------------
Title: Chairman, CEO & President
--------------------------------------------------------
Attest: /s/ RONALD J. COZEAN
--------------------------------------------------------
Title: Secretary & General Counsel
--------------------------------------------------------
PKOH HOLDING CORP.
By: /s/ EDWARD F. CRAWFORD
--------------------------------------------------------
Title: Chairman, CEO & President
--------------------------------------------------------
Attest: /s/ RONALD J. COZEAN
--------------------------------------------------------
Title: Secretary & General Counsel
--------------------------------------------------------
A-5
<PAGE> 44
EXHIBIT A
TO
MERGER AGREEMENT
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PKOH HOLDING CORP.
[SEE APPENDIX B TO THIS PROXY STATEMENT/PROSPECTUS]
A-6
<PAGE> 45
EXHIBIT B
TO
MERGER AGREEMENT
REGULATIONS OF
PKOH HOLDING CORP.
[SEE APPENDIX C TO THIS PROXY STATEMENT/PROSPECTUS]
A-7
<PAGE> 46
SCHEDULE 2.7
TO
MERGER AGREEMENT
INDEMNIFICATION AGREEMENTS
Indemnification Agreements with the following:
Edward F. Crawford
Matthew V. Crawford
Kevin R. Greene
Thomas E. McGinty
Felix J. Tarorick
James S. Walker
James W. Wert
Lawrence O. Selhorst
Lewis E. Hatch, Jr.
Ronald J. Cozean
Patrick W. Fogarty
A-8
<PAGE> 47
APPENDIX B
CERTIFICATE
OF
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PKOH HOLDING CORP.
Edward F. Crawford, who is Chairman of the Board of Directors, President
and Chief Executive Officer, and Ronald J. Cozean, who is Secretary, of the
above-named Ohio corporation for profit with its principal location at
Cleveland, Ohio (the "Corporation") do hereby certify that the following Amended
and Restated Articles of Incorporation were adopted by the Board of Directors of
the Corporation to supersede and take the place of the existing Articles of
Incorporation at a meeting duly called on February 7, 1998, and further that
such Amended and Restated Articles of Incorporation were approved by the sole
shareholder of the Corporation in a writing signed by such shareholder and dated
February 19, 1998, all in accordance with the applicable provisions of the Ohio
Revised Code, including Section 1701.69 thereof.
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
[ ]
FIRST: The name of the Corporation shall be .
SECOND: The place in the State of Ohio where the principal office of the
Corporation will be located is Cleveland, Ohio, in Cuyahoga County, or such
other location as the Board of Directors may from time to time determine.
THIRD: The purposes for which the Corporation is formed are (i) to engage
in any lawful act or activity for which corporations may be formed under
Sections 1701.01 to 1701.98, inclusive, of the Ohio Revised Code, as now in
effect or hereinafter amended, in furtherance of such long-term plans and
strategies as the Board of Directors may from time to time establish for the
Corporation and (ii) to preserve for the Corporation, its shareholders and such
other constituencies as the Board of Directors may from time to time identify,
the benefits expected to be derived from such long term-plans and strategies.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty million six hundred
thirty-two thousand four hundred seventy (40,632,470), all of a par value of $1
per share, divided into two classes as follows: 632,470 shares of Serial
Preferred Stock (hereinafter called the "Serial Stock"); and 40,000,000 shares
of Common Stock (hereinafter called the "Common Stock").
The voting powers and such designations, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions of each class of stock which are fixed by these
Amended and Restated Articles of Incorporation, and the express grant of
authority to the Board of Directors to fix by resolutions the voting powers,
designations, preferences and relative, participating, optional or other rights,
if any, or the qualifications, limitations or restrictions, if any, of the
Serial Stock which are not fixed by these Amended and Restated Articles of
Incorporation, are as follows:
SECTION 1. PROVISIONS APPLICABLE ONLY TO THE SERIAL STOCK
A. The Serial Stock may be issued from time to time in any amount, not
exceeding in the aggregate (including all shares of any and all series thereof
theretofore issued and not theretofore retired) the total number of shares of
the Serial Stock hereinabove authorized, as Serial Stock of one or more series,
as hereinafter provided. All shares of any one series of the Serial Stock shall
be identical in all respects, each series thereof shall be distinctively
designated by letter or descriptive words, and, except as permitted by the
<PAGE> 48
provisions of this Article FOURTH, all series of the Serial Stock shall rank
equally and be identical in all respects.
B. Authority is hereby expressly granted to the Board of Directors from
time to time to issue the Serial Stock as Serial Stock of any series and in
connection with the creation of such series to fix by the resolution or
resolutions providing for the issue of shares thereof the voting powers and
designations, preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions of such series, to the
fullest extent now or hereafter permitted by the laws of the State of Ohio, in
respect of the matters set forth in the following subdivisions (1) to (7),
inclusive:
(1) The designation of such series;
(2) The voting powers, if any, of the holders of Serial Stock of such
series;
(3) The rate and the times and conditions upon which the holders of
Serial Stock of such series shall be entitled to receive dividends, and
whether such dividends shall be cumulative or non-cumulative;
(4) The price or prices and the time or times and the manner in which
the Serial Stock of such series shall be redeemable, if such Serial Stock
is made redeemable;
(5) Whether or not the shares of such series shall be entitled to the
benefit of a sinking fund or purchase fund to be applied to the redemption
or purchase of such series and, if so entitled, the amount of such fund and
the manner of its application;
(6) Whether or not the shares of such series shall be convertible
into, or exchangeable for, shares of any other class or classes or of any
other series of the same or any other class of the Corporation or any other
security, and, if so convertible or exchangeable, the conversion price or
prices or rate or rates, or the rate or rates of exchange, and the
adjustments, if any, in the price or prices or rate or rates at which such
conversion or exchange may be made; and
(7) Any other designations, preferences and relative participating, or
other special rights, and qualifications, limitations or restrictions
thereof, so far as they are not inconsistent with the provisions of these
Amended and Restated Articles of Incorporation, as from time to time
amended.
C. Shares of any series of Serial Stock which have been issued and
reacquired in any manner by the Corporation (excluding, until the Corporation
elects to retire them, shares which are held as treasury shares but including
shares redeemed, shares purchased and retired, whether through the operation of
a retirement or purchase fund or otherwise, and shares which, if convertible or
exchangeable, have been converted into or exchanged for shares of stock of any
other class or classes) shall have the status of authorized and unissued shares
of Serial Stock and may be reissued as a part of the series of which they were
originally a part or may be reissued as part of a new series of Serial Stock to
be created by resolution or resolutions of the Board of Directors or as part of
any other series of Serial Stock, all subject to the conditions or restrictions
on issuance set forth herein or in any resolution or resolutions adopted by the
Board of Directors providing for the issue of any series of Serial Stock.
SECTION 2. PROVISIONS APPLICABLE TO ALL CLASSES OF STOCK
A. Except to the extent that the resolution or resolutions providing for
the issuance of a series of Serial Stock may otherwise provide with respect to
such series, the preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions of the Serial
Stock of all series are as follows:
(1) Out of the unreserved and unrestricted surplus of the Corporation
legally available for dividends, the holders of Serial Stock shall be
entitled to receive, when and as declared by the Board of Directors,
dividends at the rate per annum determined as in this Article FOURTH,
provided therefor, and no more, payable quarterly in each year on such
dates as may be fixed as in this Article FOURTH provided therefor to
holders of record on the respective dates not exceeding forty days
preceding such dividend payment dates as may be determined by the Board of
Directors in advance of the payment of each such dividend (each such
payment day being hereinafter called a dividend date and each quarterly
B-2
<PAGE> 49
period ending with a dividend date being hereinafter called a dividend
period), before any dividends (other than dividends payable in stock
ranking junior to Serial Stock) on any class or classes of stock of the
Corporation ranking junior to Serial Stock as to dividends or on
liquidation shall be declared or paid or set apart for payment. With
respect to each issue of Serial Stock on which dividends are cumulative,
such dividends shall accrue and be cumulative from the "Date of
Cumulation." The term "Date of Cumulation" as used in this Section 2A.(1)
with reference to the Serial Stock shall be deemed to mean the date on
which shares of the Serial Stock of such series are first issued. In the
event of the issue of additional shares of Serial Stock of any then
existing series, all dividends paid on the Serial Stock of such series
prior to the issue of such additional shares, and all dividends declared
and payable to holders of record of the Serial Stock of such series on any
date prior to the issue of such additional shares, shall be deemed to have
been paid on such additional shares. No dividends shall be declared on any
issue of Serial Stock in respect of any dividend period unless there shall
likewise be or have been declared on all shares of Serial Stock of each
other issue at the time outstanding like dividends for all dividend periods
coinciding with or ending before such dividend period, ratably in
proportion to the respective annual dividend rates per annum fixed therefor
as hereinbefore provided. Accruals of dividends shall not bear interest.
(2) The Serial Stock of all issues shall be preferred over the Common
Stock as to assets in the event of any liquidation or dissolution or
winding up of the Corporation, and in that event the holders of the Serial
Stock of each issue shall be entitled to receive, out of the assets of the
Corporation available for distribution to its shareholders the amount
payable upon such liquidation or dissolution or winding up as fixed by the
Board of Directors, plus an amount equal to all dividends accrued and
unpaid thereon to the date of final distribution to such holders, before
any distribution of the assets shall be made to the holders of the Common
Stock; and, if in the event of any such liquidation or dissolution or
winding up of the Corporation, the holders of all issues of the Serial
Stock shall have received all the amounts to which they shall be entitled
as aforesaid, the holders of the Common Stock shall be entitled, to the
exclusion of the holders of the Serial Stock, to share ratably in all the
assets of the Corporation available for distribution to the shareholders
then remaining according to the number of shares of the Common Stock held
by them respectively. If, upon any liquidation or dissolution or winding up
of the Corporation, the amounts payable on or with respect to the Serial
Stock are not paid in full, the holders of shares of the Serial Stock of
all issues shall share ratably in any distribution of assets according to
the respective amounts which would be payable in respect of the shares held
by them upon such distribution if all amounts payable on or with respect to
the Serial Stock of all series were paid in full. For the purposes of this
Section 2A.(2), the voluntary sale, lease, exchange or transfer (for cash,
shares of stock, securities, or other consideration) of all or
substantially all of its property or assets to, or a consolidation or
merger of the Corporation with, one or more corporations shall not be
deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary.
(3) The shares of Serial Stock, or any series or issue thereof, or any
part of any series or issue thereof, which are outstanding and which are by
resolution or resolutions of the Board of Directors creating any series of
Serial Stock, then redeemable, may be redeemed by the Corporation at its
election expressed by resolution of the Board of Directors, upon not less
than thirty (30) nor more than sixty (60) days' previous notice to the
holders of record of the Serial Stock to be redeemed, given by mail or by
publication in such manner as may be prescribed by resolution of the Board
of Directors, at the applicable redemption price, determined as provided in
this Article FOURTH, of the Serial Stock to be redeemed. If less than all
the outstanding Serial Stock of any issue or series is to be redeemed, the
redemption may be made either by lot or pro rata as may be prescribed by
resolution of the Board of Directors. From and after the date fixed in any
such notice as the date of redemption (unless default shall be made by the
Corporation in providing moneys for the payment of the redemption price
pursuant to such notice), or, if the Corporation shall so elect, from and
after a date, prior to the date fixed as the date of redemption, on which
the Corporation shall provide moneys for the payment of the redemption
price by depositing the amount thereof for the account of the holders of
the Serial Stock entitled thereto with a bank or trust company doing
business in the City of Chicago, Illinois, or in the City of New York, New
York, or in the City of Cleveland, Ohio, and having a capital and surplus
of at least fifty million dollars ($50,000,000),
B-3
<PAGE> 50
pursuant to notice of such election included in the notice of redemption
specifying the date on which such deposit will be made, all dividends on
the Serial Stock called for redemption shall cease to accrue and all rights
of the holders thereof as shareholders of the Corporation, except the right
to receive the redemption price as hereinafter provided and, in the case of
such deposit, any conversion rights not theretofore expired, shall cease
and terminate. After the deposit of such amount with such bank or trust
company, the respective holders of record of the Serial Stock to be
redeemed shall be entitled to receive the redemption price at any time upon
actual delivery to such bank or trust company of certificates for the
number of shares to be redeemed, duly endorsed in blank or accompanied by
proper instruments of assignment and transfer thereof duly endorsed in
blank. Any moneys so deposited which shall remain unclaimed by the holders
of such Serial Stock at the end of six (6) years after the redemption date,
together with any interest thereon which shall be allowed by the bank or
trust company with which the deposit shall have been made, shall be repaid
by such bank or trust company to the Corporation upon its request expressed
in a resolution of its Board of Directors, free of any trust theretofore
impressed upon them by the Corporation.
(4) If at the time of any annual meeting of shareholders of the
Corporation for the election of directors a default in preference
dividends, as the term "default in preference dividends" is hereinafter
defined, shall exist, the holders of the Serial Stock voting separately as
a class and without regard to series, shall have the right to elect two
members of the Board of Directors; and the holders of the Common Stock
shall not be entitled to vote in the election of the directors of the
Corporation to be elected by the holders of Serial Stock, as provided
above. Whenever a default in preference dividends shall commence to exist,
the Corporation, upon the written request of the holders of five percent
(5%) or more of the outstanding shares of Serial Stock, shall call a
special meeting of the holders of the Serial Stock, such special meeting or
meetings to be held within one hundred twenty (120) days after the date on
which such request is received by the Corporation, for the purpose of
enabling such holders to elect members of the Board of Directors as
provided above; provided, however, that such special meeting or meetings
need not be called if an annual meeting of shareholders of the Corporation
for the election of directors shall be scheduled to be held within such 120
days. Prior to any such special or annual meeting or meetings, the number
of directors of the Corporation shall be increased to the extent necessary
to provide as additional places on the Board of Directors the directorships
to be filled by the directors to be elected thereat. Any director elected
as aforesaid by the holders of shares of the Serial Stock shall cease to
serve as such director whenever a default in preference dividends shall
cease to exist. If, prior to the end of the term of any director elected as
aforesaid by the holders of shares of Serial Stock, or elected by the
holders of the Serial Stock and Common Stock, a vacancy in the office of
such director shall occur by reason of death, resignation, removal or
disability, or for any other cause, such vacancy shall be filled for the
unexpired term in the manner provided in these Amended and Restated
Articles of Incorporation and the Regulations of the Corporation; provided,
however, that if such vacancy shall be filled by election by the
shareholders at a meeting thereof, the right to fill such vacancy shall be
vested in the holders of that class of stock or series thereof which
elected the director the vacancy in the office of whom is so to be filled,
unless, in any such case, no default in preference dividends shall exist at
the time of such meeting. For the purposes of this Section 2A.(4), a
"default in preference dividends" shall be deemed to have occurred whenever
the amount of cumulative dividends accrued and unpaid upon any series of
the Serial Stock and the amount of non-cumulative dividends unpaid upon any
series of the Serial Stock shall be equivalent to six (6) full
quarter-yearly dividends or more, and, having so occurred, such default in
preference dividends shall be deemed to exist thereafter until, but only
until, all cumulative dividends accrued and unpaid on all shares of the
Serial Stock then outstanding, of each and every class and series, shall
have been paid in full, or declared and funds set aside for their payment,
and until non-cumulative dividends on all shares of the Serial Stock then
outstanding, of each and every series, shall have been paid regularly for
at least one year. Nothing herein contained shall be deemed to prevent an
increase in the number of directors of the Corporation pursuant to its
Regulations so as to provide as additional places on the Board of Directors
the directorships to be filled by the directors so to be elected by the
holders of the Serial Stock or of any class or series thereof, or to
prevent any other change in the number of directors of the Corporation. At
any meeting held for the purpose of electing directors at which the holders
of the
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Serial Stock shall have the special right, voting separately as a group, to
elect directors as provided in this Section 2A.(4), the presence, in person
or by proxy, of the holders of one-third of the aggregate number of shares
of the Serial Stock of all series at the time outstanding shall be required
to constitute a quorum of such group for the election of any director by
the holders of the Serial Stock as a group. At any such meeting or
adjournment thereof, (a) the absence of a quorum of the holders of the
Serial Stock shall not prevent the election of directors other than those
to be elected by the holders of the Serial Stock voting as a group and the
absence of a quorum for the election of such other directors shall not
prevent the election of the directors to be elected by the holders of the
Serial Stock voting as a group, and (b) in the absence of either or both
such quorums, a majority of the holders present in person or by proxy of
the stock or stocks which lack a quorum shall have power to adjourn the
meeting for the election of directors which they are entitled to elect from
time to time without notice other than announcement at the meeting until a
quorum shall be present.
(5) So long as any shares of the Serial Stock of any series shall be
outstanding, (a) the Corporation shall not, without the affirmative vote or
written consent of the holders of at least two-thirds of the aggregate
number of shares of the Serial Stock of all series at the time outstanding,
considered as a single class without regard to series,
(i) alter or change the voting powers, designations, preferences
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions of the Serial Stock as
provided in these Amended and Restated Articles of Incorporation or by
the resolution or resolutions so fixing the same, so as to affect the
Serial Stock adversely, or
(ii) authorize or create any class of stock ranking, either as to
dividends or upon liquidation, prior to the Serial Stock; or
(b) the Corporation shall not, without the affirmative vote or written
consent of the holders of a majority of the aggregate number of shares of
the Serial Stock of all series at the time outstanding, considered as a
single class, increase the authorized amount of Serial Stock or authorize
or create any class ranking, either as to dividends or upon liquidation, on
a parity with Serial Stock; or (c) the Corporation shall not, without the
affirmative vote or written consent of the holders of at least two-thirds
of the aggregate number of shares of the Serial Stock of any series at the
time outstanding, the holders of such series consenting or voting
separately as a series, alter or change the voting powers, designations,
preferences and relative, participating, optional or other special rights
and qualifications, limitations or restrictions specifically applicable to
such series, as provided in these Amended and Restated Articles of
Incorporation or in the resolution or resolutions adopted by the Board of
Directors providing for the issue of such series, so as to affect such
series adversely; or (d) the Corporation shall not (i) declare, or pay, or
set apart for payment, any dividends (other than dividends payable in stock
ranking junior to the Serial Stock) or make any distribution, on any class
or classes of stock of the Corporation ranking junior to the Serial Stock
in any respect, or (ii) redeem, purchase or otherwise acquire, or permit
any subsidiary to purchase or otherwise acquire, any shares of any such
junior class, if at the time of making such declaration, payment,
distribution, redemption, purchase or acquisition, the Corporation shall be
in default with respect to any dividend payable on, or any obligation to
retire, shares of Serial Stock, provided that, notwithstanding the
foregoing, the Corporation may at any time redeem, purchase or otherwise
acquire shares of stock of any such junior class in exchange for, or out of
the net cash proceeds from the sale of, other shares of stock of any junior
class; provided, however, that any vote or consent required by Section
2A.(5)(a)(i) above may be given and made effective by the filing of an
appropriate amendment of these Amended and Restated Articles of
Incorporation without obtaining the vote or consent of the holders of the
Common Stock, the right to give such vote or consent being expressly waived
by all holders of such Common Stock unless the action to be taken would
substantially adversely affect the rights or powers of the Common Stock;
and provided, further, that any vote or consent required by Section
2A.(5)(c) above may be given and made effective by the filing of an
appropriate amendment of these Amended and Restated Articles of
Incorporation without obtaining the vote or consent of the holders of any
other series of the Serial Stock or of the holders of the Common Stock, the
right to give such vote or consent being expressly waived by all holders of
such other series of Serial Stock and
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Common Stock, unless the action to be taken would substantially adversely
affect the rights or powers of such other series of Serial Stock or Common
Stock, as the case may be.
(6) If at any time the Corporation shall have failed to pay dividends
in full on the Serial Stock, thereafter and until dividends in full,
including all accrued and unpaid dividends on the Serial Stock outstanding,
shall have been declared and set apart for payment or paid (a) the
Corporation shall not, without the affirmative vote or written consent of
the holders of at least two-thirds of the aggregate number of shares of the
Serial Stock of all series at the time outstanding, redeem less than all of
the Serial Stock at such time outstanding other than in accordance with
Section 2A.(7), and (b) neither the Corporation nor any subsidiary shall
purchase any Serial Stock except in accordance with a purchase offer made
in writing or by publication (as determined by the Board of Directors) to
all holders of Serial Stock of all series upon such terms as the Board of
Directors, in its sole discretion after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series, shall determine (which determination shall be final and
conclusive) will result in fair and equitable treatment among the
respective series; provided, that (i) unless prohibited by the provisions
applicable to any series, the Corporation, to meet the requirements of any
retirement or sinking fund provisions with respect to any series, may use
shares of such series acquired by it prior to such failure and then held by
it as treasury stock and (ii) nothing shall prevent the Corporation from
completing the purchase or redemption of shares of Serial Stock for which a
purchase contract was entered into for any retirement or sinking fund
purposes, or the notice of redemption of which was initially published,
prior to such failure.
(7) If in any case the amounts payable with respect to any obligations
to retire shares of the Serial Stock are not paid in full in the case of
all series as to which such obligations exist, the number of shares of the
various series to be retired shall be in proportion to the respective
amounts which would be payable on account of such obligations if all
amounts which would be payable on account of such obligations were
discharged in full.
B. For the purposes of this Article FOURTH and of any resolution or
resolutions of the Board of Directors adopted pursuant to this Article FOURTH or
of any certificate filed with the Secretary of State of Ohio (unless otherwise
provided in any such resolution or certificate):
(1) The term "outstanding," when used in reference to shares of stock,
shall mean issued shares, excluding shares held by the Corporation or a
subsidiary and shares called for redemption, funds for the redemption of
which shall have been deposited in trust;
(2) The amount of dividends "accrued and unpaid" on any shares of
Serial Stock of any series as at any quarterly dividend date shall be
deemed (whether or not in any dividend period in respect of which such term
is used there shall have been unreserved and unrestricted surplus legally
available for the payment of dividends) to be the amount of any unpaid
dividends accumulated thereon to and including such quarterly dividend
date, whether or not earned or declared, and the amount of dividends
"accrued and unpaid" on any shares of Serial Stock of any series as at any
date other than a quarterly dividend date shall be calculated as the amount
of any unpaid dividends accumulated thereon to and including the last
preceding quarterly dividend date, whether or not earned or declared, plus
an amount calculated on the basis of the annual dividend rate fixed for the
shares of such series for the period after such last preceding quarterly
dividend date to, and including, the date as of which the calculation is
made, based on a 360-day year of twelve 30-day months;
(3) Any class or classes of stock of the Corporation shall be deemed
to rank:
(a) prior to the Serial Stock either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled
to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of any Serial Stock;
(b) on a parity with the Serial Stock either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment
dates, or redemption or liquidation prices per share thereof be
different from those of any Serial Stock, if the holders of such class
or classes of stock shall be
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entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in
proportion to their respective dividend rates or liquidation prices,
without preference or priority one over the other as between the holders
of such class or classes of stock and the holders of any Serial Stock;
and
(c) junior to the Serial Stock if the rights of the holders of such
class or classes shall be subject or subordinate to the rights of the
holders of the Serial Stock in respect of either the receipt of
dividends or the amounts distributable upon liquidation, dissolution or
winding up.
C. Except as otherwise provided by law or by these Amended and Restated
Articles of Incorporation and except to the extent that the resolution or
resolutions of the Board of Directors providing for the issuance of a series of
Serial Stock may otherwise provide with respect to such series, the holder (or
holders) of each outstanding share of stock of the Corporation, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders or submitted to shareholders for their consent without a
meeting.
D. No shareholder of the Corporation shall by reason of his holding shares
of any class have any preemptive or preferential right to purchase or subscribe
to any shares of any class of the Corporation now or hereafter to be authorized,
or any notes, debentures, bonds, or other securities convertible into or
carrying options or warrants to purchase shares of any class, now or hereafter
to be authorized, whether or not the issuance of any such shares, or such notes,
debentures, bonds or other securities, would adversely affect the dividend or
voting rights of such shareholder, other than such rights, if any, as the Board
of Directors, in its discretion from time to time may grant and at such price as
the Board of Directors in its discretion may fix; and the Board of Directors may
issue shares of any class of the Corporation, or any notes, debentures, bonds,
or other securities convertible into or carrying options or warrants to purchase
shares of any class, without offering any such shares of any class, either in
whole or in part, to the existing shareholders of any class.
FIFTH:
SECTION 1. SPECIAL VOTE FOR CERTAIN BUSINESS COMBINATIONS. Except as set
forth in Section 3 of this Article FIFTH, the affirmative vote of the holders of
eighty percent (80%) of all outstanding shares of the Corporation entitled to
vote in elections of directors, considered for the purposes of this Article
FIFTH and Article SIXTH hereof as one class (such shares hereinafter in this
Article FIFTH, in Article SIXTH and Article EIGHTH hereof referred to as "Voting
Shares"), shall be required:
A. to adopt an agreement for the merger or consolidation of the
Corporation with or into any other entity; or
B. to authorize the sale, lease, exchange, transfer or other
disposition of all or substantially all of the assets of the Corporation,
to another corporation, person or entity; or
C. to authorize any purchase by the Corporation of any assets or
securities of any other corporation, person or entity in exchange, in whole
or in part, for Voting Shares of the Corporation;
if, in any such case referred to in A, B, or C above, as of the record date for
the determination of shareholders entitled to notice thereof and to vote
thereon, such other corporation, person or entity is the beneficial owner,
directly or indirectly, of more than five percent (5%) of the Voting Shares of
the Corporation. Such affirmative vote shall be in addition to any vote of the
shareholders of the Corporation otherwise required.
SECTION 2. BENEFICIAL OWNERSHIP. For the purpose of determining the number
of Voting Shares of the Corporation beneficially owned by any corporation,
person or other entity (but not for the purpose of determining the number of
outstanding Voting Shares) there shall be included, in addition to the
outstanding shares beneficially owned, directly or indirectly, by such
corporation, person or entity, the Voting Shares of the Corporation which such
corporation, person or other entity, or any affiliate or associate thereof, owns
or has the right to acquire presently or in the future pursuant to any agreement
or upon exercise of conversion rights, warrants, options, or otherwise, or which
are the subject of any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of Voting Shares of the Corporation.
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The terms "affiliate" and "associate" as herein used shall have the same meaning
as is given to those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended.
SECTION 3. EXCLUDED TRANSACTIONS. The provisions of the foregoing Sections
1 and 2 of this Article FIFTH shall not be applicable to:
A. any transaction which but for said Sections would not require the
vote or consent of shareholders of the Corporation; or
B. any transaction with another person or entity if prior to such
transaction and prior to the time that such other person or entity shall
have become the beneficial owner, as defined in Section 2 above, of more
than five percent (5%) of the Voting Shares of the Corporation, the Board
of Directors of the Corporation, including the positive vote of all
directors of the Corporation who are neither "associates" nor "affiliates"
(as such terms are defined under the federal securities laws) of such other
person or entity, shall have approved: (i) the transaction or the entry by
the Corporation into a written understanding with such other person or
entity substantially consistent with such transaction; or (ii) the
acquisition by such other person or entity of beneficial ownership of more
than five percent (5%) of the Voting Shares of the Corporation; or
C. any transaction with a corporation or other entity a majority of
the voting shares of which are owned of record or beneficially by the
Corporation.
SECTION 4. DETERMINATION OF BENEFICIAL OWNERSHIP AND OTHER MATTERS. The
determination of the Board of Directors of the Corporation, based on information
known to them and made in good faith, shall be conclusive as to whether any
corporation, person or entity beneficially owns more than five percent (5%) of
the Voting Shares of the Corporation, whether a corporation, person or entity is
an affiliate or associate of another, or whether a written understanding entered
into by the Corporation is substantially consistent with a transaction.
SECTION 5. AMENDMENTS TO ARTICLE FIFTH. Any amendment to the Amended and
Restated Articles of Incorporation of the Corporation whereby this Article FIFTH
is to be amended, altered or repealed or any provisions inconsistent with this
Article FIFTH are to be adopted shall require the affirmative vote or consent of
the holders of at least eighty percent (80%) of the Voting Shares of the
Corporation.
SIXTH: No Person shall make a Control Share Acquisition without the prior
authorization of the Corporation's shareholders.
SECTION 1. PROCEDURE. In order to obtain authorization of a Control Share
Acquisition by the Corporation's shareholders, a Person shall deliver a notice
(the "Notice") to the Corporation at its principal place of business that sets
forth all of the following information:
A. The identity of the Person who is giving the Notice;
B. A statement that the Notice is given pursuant to this Article
SIXTH;
C. The number and class of shares of the Corporation owned, directly
or indirectly, by the Person who gives the Notice;
D. The range of voting power under which the proposed Control Share
Acquisition would, if consummated, fall;
E. A description in reasonable detail of the terms of the proposed
Control Share Acquisition; and
F. Reasonable evidence that the proposed Control Share Acquisition, if
consummated, would not be contrary to law and that the Person who is giving
the Notice has the financial capacity to make the proposed Control Share
Acquisition.
SECTION 2. CALL OF SPECIAL MEETING OF SHAREHOLDERS. The Board of Directors
of the Corporation shall, within ten days after receipt of such Notice by the
Corporation, call a special meeting of shareholders to be held not later than
fifty (50) days after receipt of the Notice by the Corporation, unless the
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Person who delivered the Notice agrees to a later date, to consider the proposed
Control Share Acquisition; provided that the Board of Directors shall have no
obligation to call such meeting if they make a determination within ten days
after receipt of the Notice (i) that the Notice was not given in good faith,
(ii) that the proposed Control Share Acquisition would not be in the best
interests of the Corporation or (iii) that the proposed Control Share
Acquisition could not be consummated for financial or legal reasons. The Board
of Directors may adjourn such meeting if, prior to such meeting, the Corporation
has received a Notice from any other Person and the Board of Directors has
determined that the Control Share Acquisition proposed by such other Person or a
merger, consolidation or sale of assets of the Corporation should be presented
to shareholders at an adjourned meeting or at a special meeting held at a later
date.
For purposes of this Section 2, a director, in determining whether the
proposed Control Share Acquisition would be in the best interests of the
Corporation, shall consider the interests of the Corporation's shareholders and,
in his discretion, may consider any of the following: the interests of the
Corporation's employees, suppliers, creditors and customers; the economy of the
state and nation; community and societal considerations; and the long term as
well as short term interests of the Corporation and its shareholders, including
the possibility that these interests may be best served by the continued
independence of the Corporation.
For purposes of making a determination that a special meeting of
shareholders should not be called pursuant to this Section 2, no such
determination shall be deemed void or voidable with respect to the Corporation
merely because one or more of its directors or officers who participated in
making such determination may be deemed to be other than disinterested, if in
any such case the material facts of the relationship giving rise to a basis for
self-interest are known to the directors and the directors, in good faith
reasonably justified by the facts, make such determination by the affirmative
vote of a majority of the disinterested directors, even though the disinterested
directors constitute less than a quorum. For purposes of this paragraph,
"disinterested directors" shall mean directors whose material contacts with the
Corporation are limited principally to activities as a director or shareholder.
Persons who have substantial, recurring business or professional contacts with
the Corporation shall not be deemed to be "disinterested directors" for purposes
of this provision. A director shall not be deemed to be other than a
"disinterested director" merely because he would no longer be a director if the
proposed Control Share Acquisition were approved and consummated.
SECTION 3. NOTICE OF SPECIAL MEETING. The Corporation shall give notice of
such special meeting to all shareholders of record as of the record date set for
such meeting as promptly as practicable. Such notice shall include or be
accompanied by a copy of the Notice and by a statement of the Corporation,
authorized by the Board of Directors, of its position or recommendation, or that
it is taking no position or making no recommendation, with respect to the
proposed Control Share Acquisition.
SECTION 4. REQUIREMENTS FOR APPROVAL. The Person who delivered the Notice
may make the proposed Control Share Acquisition if both of the following occur:
(i) the shareholders of the Corporation authorize such acquisition at the
special meeting called by the Board of Directors at which a quorum is present
and held for that purpose by an affirmative vote of a majority of the Voting
Shares represented at such meeting in person or by proxy and by a majority of
the portion of such Voting Shares represented at such meeting in person or by
proxy excluding the votes of Interested Shares; and (ii) such acquisition is
consummated, in accordance with the terms so authorized, not later than 360 days
following shareholder authorization of the Control Share Acquisition.
SECTION 5. VIOLATIONS OF RESTRICTION. Shares issued or transferred to any
Person in violation of this Article SIXTH shall be valid only with respect to
such amount of shares as does not result in a violation of this Article SIXTH,
and such issuance or transfer shall be null and void with respect to the
remainder of such shares, any such remainder of shares being hereinafter called
"Excess Shares." If the last clause of the foregoing sentence is determined to
be invalid by virtue of any legal decision, statute, rule or regulation, the
Person who holds Excess Shares shall be conclusively deemed to have acted as an
agent on behalf of the Corporation in acquiring the Excess Shares and to hold
such Excess Shares on behalf of the Corporation. As the equivalent of treasury
securities for such purposes, the Excess Shares shall not be entitled to any
voting rights, shall not be considered to be outstanding for quorum or voting
purposes, and shall not be entitled to
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receive dividends, interest or any other distribution with respect to the Excess
Shares. Any person who receives dividends, interest or any other distribution in
respect to Excess Shares shall hold the same as agent for the Corporation and,
following a permitted transfer, for the transferee thereof. Notwithstanding the
foregoing, any holder of Excess Shares may transfer the same (together with any
distributions thereon) to any person who, following such transfer, would not own
shares in violation of this Article SIXTH. Upon such permitted transfer, the
Corporation shall pay or distribute to the transferee any distributions on the
Excess Shares not previously paid or distributed.
SECTION 6. DEFINITIONS. As used in this Article SIXTH:
A. "Person" includes, without limitation, an individual, a corporation
(whether nonprofit or for profit), a partnership, an unincorporated society
or association, and two or more persons having a joint or common interest.
B. (1) "Control Share Acquisition" means the acquisition, directly or
indirectly, by any Person, of shares of the Corporation that, when added to
all other shares of the Corporation in respect of which such Person may
exercise or direct the exercise of voting power as provided in this Section
6B.(1), would entitle such Person, immediately after such acquisition,
directly or indirectly, to exercise or direct the exercise of the voting
power of the Corporation 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;
(c) A majority or more of such voting power.
A bank, broker, nominee, trustee, or other person who acquires shares
in the ordinary course of business for the benefit of others in good faith
and not for the purpose of circumventing this Article SIXTH shall, however,
be deemed to have voting power only of shares in respect of which such
person would be able to exercise or direct the exercise of votes without
further instruction from others at a meeting of shareholders called under
this Article SIXTH. For purposes of this Article SIXTH, the acquisition of
securities immediately convertible into shares of the Corporation with
voting power in the election of directors shall be treated as an
acquisition of such shares.
(2) The acquisition by any Person of any shares of the Corporation
does not constitute a Control Share Acquisition for the purpose of this
Article SIXTH if the acquisition is consummated in any of the following
circumstances:
(a) Pursuant to the Merger Agreement dated February 20, 1998 by and
among the Corporation, Park-Ohio Industries, Inc. and PKOH Merger Corp.;
(b) By underwriters in good faith and not for the purpose of
circumventing this Article SIXTH in connection with an offering of the
securities of the Corporation to the public;
(c) By bequest or inheritance, by operation of law upon the death
of any individual, or by any other transfer without valuable
consideration, including a gift, that is made in good faith and not for
the purpose of circumventing this Article SIXTH;
(d) Pursuant to the satisfaction of a pledge or other security
interest created in good faith and not for the purpose of circumventing
this Article SIXTH;
(e) Pursuant to a merger or consolidation adopted, or a combination
or majority share acquisition authorized by shareholder vote in
compliance with the provisions of Article FIFTH of these Amended and
Restated Articles of Incorporation and Section 1701.78, or Section
1701.83, of the Ohio Revised Code if the Corporation is the surviving or
new corporation in the merger or consolidation or is the acquiring
corporation in the combination or majority share acquisition and if the
vote of shareholders of the surviving, new, or acquiring corporation is
required by the provisions of Section 1701.78 or 1701.83 of the Ohio
Revised Code; or
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(f) The Person's being entitled, immediately thereafter, to
exercise or direct the exercise of voting power of the Corporation in
the election of directors within the same range theretofore attained by
that person either in compliance with the provisions of this Article
SIXTH or as a result solely of the Corporation's purchase of shares
issued by it.
The acquisition by any Person of shares of the Corporation in a manner
described under this Section 6B.(2) shall be deemed to be a Control Share
Acquisition authorized pursuant to this Article SIXTH within the range of
voting power under Section 6B.(1)(a), (b) or (c) of this Article SIXTH that
such Person is entitled to exercise after such acquisition, provided that,
in the case of an acquisition in a manner described under Section 6B.(2)(c)
or (d), the transferor of shares to such Person had previously obtained any
authorization of shareholders required under this Article SIXTH in
connection with such transferor's acquisition of shares of the Corporation.
(3) The acquisition of shares of the Corporation in good faith and not
for the purpose of circumventing this Article SIXTH the acquisition of
which (a) had previously been authorized by shareholders in compliance with
this Article SIXTH or (b) would have constituted a Control Share
Acquisition but for Section 6B.(2), does not constitute a Control Share
Acquisition for the purpose of this Article SIXTH unless such acquisition
entitles any Person, directly or indirectly, to exercise or direct the
exercise of voting power of the Corporation in the election of directors in
excess of the range of such voting power authorized pursuant to this
Article SIXTH, or deemed to be so authorized under Section 6B.(2).
C. "Interested Shares" means Voting Shares with respect to which any
of the following persons may exercise or direct the exercise of the voting
power:
(1) any Person whose Notice prompted the calling of the meeting of
shareholders;
(2) any officer of the Corporation elected or appointed by the
directors of the Corporation; and
(3) any employee of the Corporation who is also a director of the
Corporation;
(4) any Person that acquires such Voting Shares for a valuable
consideration during the period beginning with the date of the first
public disclosure of a proposed Control Share Acquisition or any
proposed merger, consolidation or other transaction which would result
in a change of control of the Corporation or all or substantially all of
its assets, and ending on the record date of any special meeting held
thereafter pursuant to this Article SIXTH for the purpose of voting on a
Control Share Acquisition proposed by any Person who has delivered a
Notice pursuant to Section 1 of this Article SIXTH if either of the
following applies:
(a) the aggregate consideration paid or given by the Person who
acquired the Voting Shares, and other persons acting in concert with
such Person, for all such Voting Shares exceeds Two Hundred Fifty
Thousand Dollars ($250,000.00); or
(b) the number of Voting Shares acquired by the Person who
acquired the Voting Shares, and other persons acting in concert with
such Person, for all such Voting Shares exceeds one half of one
percent of all Voting Shares; and
(5) any Person that transfers such Voting Shares for valuable
consideration after the record date of any special meeting described in
Section 6(C)(4) of this Article SIXTH as to shares so transferred, if
accompanied by the voting power in the form of a blank proxy, an
agreement to vote as instructed by the transferee, or otherwise.
SECTION 7. PROXIES. No proxy appointed for or in connection with the
shareholder authorization of a Control Share Acquisition pursuant to this
Article SIXTH is valid if it provides that it is irrevocable. No such proxy is
valid unless it is sought, appointed, and received both:
A. In accordance with all applicable requirements of law; and
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B. Separate and apart from the sale or purchase, contract or tender
for sale or purchase, or request or invitation for tender for sale or
purchase, of shares of the Corporation.
SECTION 8. REVOCABILITY OF PROXIES. Proxies appointed for or in connection
with the shareholder authorization of a Control Share Acquisition pursuant to
this Article SIXTH shall be revocable at all times prior to the obtaining of
such shareholder authorization, whether or not coupled with an interest.
SECTION 9. AMENDMENTS. Notwithstanding any other provisions of these
Amended and Restated Articles of Incorporation or the Regulations of the
Corporation, as the same may be in effect from time to time, or any provision of
law that might otherwise permit a lesser vote of the directors or shareholders,
but in addition to any affirmative vote of the directors or the holders of any
particular class or series of shares required by law, the Amended and Restated
Articles of Incorporation or the Regulations of the Corporation, as the same may
be in effect from time to time, the affirmative vote of at least eighty percent
(80%) of the Voting Shares, shall be required to alter, amend or repeal this
Article SIXTH or adopt any provisions in the Amended and Restated Articles of
Incorporation or Regulations of the Corporation, as the same may be in effect
from time to time, which are inconsistent with the provisions of this Article
SIXTH.
SECTION 10. LEGEND ON SHARE CERTIFICATES. Each certificate representing
shares of the Corporation's capital stock shall contain the following legend:
"Transfer of the shares represented by this Certificate is subject to the
provisions of Article SIXTH of the Corporation's Amended and Restated Articles
of Incorporation as the same may be in effect from time to time. Upon written
request delivered to the Secretary of the Corporation at its principal place of
business, the Corporation will mail to the holder of this Certificate a copy of
such provisions without charge within five (5) days after receipt of written
request therefor. By accepting this Certificate the holder hereof acknowledges
that it is accepting same subject to the provisions of said Article SIXTH as the
same may be in effect from time to time and covenants with the Corporation and
each shareholder thereof from time to time to comply with the provisions of said
Article SIXTH as the same may be in effect from time to time."
SEVENTH: The provisions of Section 1701.831 of the Ohio Revised Code shall
not apply to this Corporation.
EIGHTH: Except as otherwise provided in these Amended and Restated
Articles of Incorporation or in the Regulations of the Corporation, the holders
of a majority of the outstanding Voting Shares of the Corporation are authorized
to take any action which but for this Article EIGHTH would require the vote or
other action of the holders of more than a majority of such Voting Shares.
NINTH: Except to the extent that Articles FOURTH, FIFTH and SIXTH
otherwise provide with respect to certain matters therein set forth, the
Corporation reserves the right to amend, alter, change or repeal any provision
contained in these Amended and Restated Articles of Incorporation and to add new
provisions, in the manner now or hereafter prescribed by statute, upon the
affirmative vote of a majority of the outstanding shares of the Corporation,
voting as a Class; and all rights, privileges and preferences of whatsoever
nature conferred upon shareholders, directors and officers pursuant to these
Amended and Restated Articles of Incorporation in their present form or as
hereafter amended are granted subject to this reservation. Notwithstanding the
foregoing, the adoption of any amendment, alteration, change or repeal to these
Amended and Restated Articles of Incorporation as the same may be in effect from
time to time which is inconsistent with or would have the effect of amending,
altering, changing or repealing the provisions of Sections 7, 9 or 10 of the
Regulations of the Corporation as the same may be in effect from time to time
shall require the same affirmative vote of shareholders as would be required
under such Regulations to adopt any amendment, alteration, change or repeal of
said Sections 7, 9 or 10 or to adopt any provisions inconsistent therewith.
TENTH: Without derogation from any other power to purchase shares of the
Corporation, the Corporation may, by action of its Board of Directors and to the
extent not prohibited by law, purchase outstanding shares of any class of this
Corporation's stock.
ELEVENTH: No holder of shares of any class of stock of the Corporation
shall have the right to cumulate his voting power in the election of the Board
of Directors, and the right to cumulative voting
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described in Ohio Revised Code Section 1701.55 is hereby specifically denied to
the holders of any class of stock of the Corporation.
TWELFTH: Except where the law or the Amended and Restated Articles of
Incorporation or Regulations of the Corporation require action to be authorized
or taken by shareholders, all of the authority of the Corporation shall be
exercised by or under the direction of the Board of Directors.
IN WITNESS WHEREOF, the above-named officers, acting for and on behalf of
the Corporation, have subscribed their names this day of ,
1998.
--------------------------------------
Chairman of the Board, President and
Chief Executive Officer
--------------------------------------
Secretary and General Counsel
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APPENDIX C
REGULATIONS
OF
PKOH HOLDING CORP.
MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETING.
The annual meeting of shareholders of the Corporation shall be held at such
time and on such business day as the directors may determine each year. The
annual meeting shall be held at the principal office of the Corporation or at
such other place within or without the State of Ohio as the directors may
determine.
SECTION 2. SPECIAL MEETINGS.
Special meetings of the shareholders may be called at any time by (i) the
Chairman of the Board, (ii) the Vice Chairman, (iii) the President, (iv) the
directors, by action at a meeting or a majority of the directors acting without
a meeting, or (v) the holders of 50% or more of the outstanding shares entitled
to vote thereat. Such meetings may be held within or without the State of Ohio
at such time and place as may be specified in the notice thereof.
SECTION 3. NOTICE OF MEETINGS.
Written notice of every annual or special meeting of the shareholders
stating the time, place and purposes thereof shall be given to each shareholder
entitled to notice as provided by law, not less than seven nor more than ninety
days before the date of the meeting. Such notice may be given by or at the
direction of the Chairman of the Board, the Vice Chairman, the President or the
Secretary by personal delivery or by mail addressed to the shareholder at his
last address as it appears on the records of the Corporation. Any shareholder
may waive in writing notice of any meeting, either before or after the holding
of such meeting, and, by attending any meeting without protesting the lack of
proper notice, shall be deemed to have waived notice thereof.
SECTION 4. PERSONS BECOMING ENTITLED BY OPERATION OF LAW OR TRANSFER.
Every person who, by operation of law, transfer or any other means
whatsoever, shall become entitled to any shares, shall be bound by every notice
in respect of such share or shares which previously to the entering of his name
and address on the records of the Corporation shall have been duly given to the
person from whom he derives his title to such shares.
SECTION 5. QUORUM AND ADJOURNMENTS.
Except as may be otherwise required by law or by the Articles of
Incorporation or these Regulations, the holders of a majority of the
then-outstanding shares entitled to vote in an election of directors, taken
together as a single class ("Voting Shares"), present in person or by proxy,
shall constitute a quorum; provided that any meeting duly called, whether a
quorum is present or otherwise may, by vote of the holders of the majority of
the Voting Shares represented thereat, adjourn from time to time, in which case
no further notice of any such adjourned meeting need be given.
SECTION 6. BUSINESS TO BE CONDUCTED AT MEETINGS.
No business shall be conducted at a meeting of shareholders except in
accordance with the procedures set forth in this Section 6. To be properly
brought before a meeting of shareholders, business must be specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the directors, otherwise properly brought before the meeting by or at the
direction of the directors or otherwise properly brought before the meeting by a
shareholder. For business to be properly brought before a meeting of
shareholders by a
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shareholder, the shareholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than sixty (60) days nor more than ninety (90) days prior
to the meeting; provided, however, that in the event that less than seventy-five
(75) days' notice or prior public disclosure of the date of the meeting is given
or made to the shareholders, notice by the shareholder to be timely must be so
received not later than the close of business on the fifteenth (15th) day
following the earlier of the day on which such notice of the date of the meeting
was mailed or such public disclosure was made. A shareholder's notice to the
Secretary shall set forth as to each matter the shareholder proposes to bring
before the meeting: (i) a brief description of the proposal desired to be
brought before the meeting and a statement of the reasons for making such
proposal at the meeting; (iii) the name and record address of, and the class and
number of shares of the Corporation beneficially owned by (A) the shareholder
offering such proposal, (B) any other beneficial owner of the shares registered
in such shareholder's name and (C) any other shareholder (or beneficial owner of
shares) known by such shareholder to be supporting such proposal on the date of
such shareholder's notice; and (iv) any financial or other material interest of
the shareholder (or any such beneficial owner) in such proposal.
If the Board of Directors, or a designated committee thereof, determines
that any shareholder proposal was not timely made in accordance with the
provisions of this Section 6, or that any proposal conflicts with or violates a
provision of the Articles of Incorporation or Regulations of the Corporation,
then such proposal shall not be presented for action at the meeting in question.
If the Board of Directors, or a designated committee thereof, determines that
the information provided in the shareholder's notice does not satisfy the
informational requirements of this Section 6 in any material respect, the
Secretary of the Corporation shall promptly notify such shareholder of the
deficiency in the notice. Such shareholder shall have the opportunity to cure
such deficiency by providing additional information to the Secretary within the
period of time, not to exceed five (5) days from the date such deficiency notice
is given such shareholder, determined by the Board of Directors or such
committee. If the deficiency is not cured within such period, or if the Board of
Directors or such committee determines that the additional information provided
by the shareholder, together with the information previously provided, does not
satisfy the requirements of this Section 6 in any material respect, then such
proposal shall not be presented for action at the meeting in question.
If neither the Board of Directors nor such committee makes a determination
as to the compliance of any shareholder proposal with the provisions of this
Section 6, as set forth above, the chairman of the meeting of shareholders shall
determine and declare to the meeting, if the facts warrant, that such proposal
was not made in accordance with the provisions of this Section 6, and if he
should so determine, the defective proposal shall be disregarded.
DIRECTORS
SECTION 7. NUMBER.
The number of directors of the Corporation shall be not less than nine (9)
nor more than fifteen (15), as may be determined from time to time upon the
recommendation of a majority of the Continuing Directors (as hereinafter
defined) by the holders of a majority of the outstanding Voting Shares at any
annual meeting or special meeting called for the purpose of electing directors,
and when so fixed such number shall continue to be the authorized number of
directors until changed by the shareholders by vote as aforesaid or by the
directors as hereinafter provided. In addition to the authority of the
shareholders to fix or change the number of directors as described above, the
directors, by majority vote of the Continuing Directors, may change the number
of directors and may fill any vacancy that is created by an increase in the
number of directors. In exercising the foregoing authority, the directors may
not change the number of directors by more than two (2) from the number
authorized by the shareholders at the last annual or special meeting of the
shareholders at which the number of directors was fixed and in no event may the
directors fix the number of directors at less than nine (9) nor more than
fifteen (15). As used herein, the term "Continuing Director" shall mean, as of
any date of determination, any member of the Board of Directors of the
Corporation who (i) was a member of such Board of Directors on the date of the
initial adoption of these Regulations by the shareholder(s) of the
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Corporation or (ii) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of such Board of Directors at the time of such nomination or election.
SECTION 8. NOMINATIONS.
Only persons who are nominated in accordance with the following procedures
shall be eligible for election as directors. Nominations of persons for election
as directors of the Corporation may be made at a meeting of shareholders by or
at the direction of the directors by any nominating committee or person
appointed by the directors or by any shareholder of the Corporation entitled to
vote for the election of directors at the meeting who complies with the notice
procedures set forth in this Section 8. Such nominations, other than those made
by or at the direction of the directors, shall be made pursuant to timely notice
in writing to the Secretary of the Corporation. To be timely, a shareholder's
notice shall be delivered to or mailed and received at the principal executive
offices of the Corporation not less than sixty (60) days nor more than ninety
(90) days prior to the meeting; provided, however, that in the event that less
than seventy-five (75) days' notice or prior public disclosure of the date of
the meeting is given or made to shareholders, notice by the shareholder to be
timely must be so received not later than the close of business on the fifteenth
(15th) day following the earlier of the day on which such notice of the date of
the meeting was mailed or such public disclosure was made. Such shareholder's
notice shall set forth as to each nomination: (i) the name, age and business
address or residence address of any proposed nominee, the nominee's principal
employment or occupation and the other information which is required to be
disclosed in solicitations for proxies for election of directors pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended; (ii) the
name and record address of, and the class and number of shares of the
Corporation beneficially owned by (A) the shareholder offering such nomination,
(B) any other beneficial owner of the shares registered in such shareholder's
name and (C) any other shareholder (or beneficial owner of shares) known by such
shareholder to be supporting such nomination on the date of such shareholder's
notice; and (iii) any financial or other material interest of the shareholder
(or any such beneficial owner) in such nomination. Such notice shall be
accompanied by the written consent of each proposed nominee to serve as a
director of the Corporation, if elected. No person shall be eligible for
election as a director of the Corporation unless nominated in accordance with
the procedures set forth in this Section 8.
If the Board of Directors, or a designated committee thereof, determines
that any shareholder nomination was not timely made in accordance with the
provisions of this Section 8, or that any nomination conflicts with or violates
a provision of the Articles of Incorporation or Regulations of the Corporation,
then such nomination shall not be presented for action at the meeting in
question. If the Board of Directors, or a designated committee thereof,
determines that the information provided in the shareholder's notice does not
satisfy the informational requirements of this Section 8 in any material
respect, the Secretary of the Corporation shall promptly notify such shareholder
of the deficiency in the notice. Such shareholder shall have the opportunity to
cure such deficiency by providing additional information to the Secretary within
the period of time, not to exceed five (5) days from the date such deficiency
notice is given such shareholder, determined by the Board of Directors or such
committee. If the deficiency is not cured within such period, or if the Board of
Directors or such committee determines that the additional information provided
by the shareholder, together with the information previously provided, does not
satisfy the requirements of this Section 8 in any material respect, then such
nomination shall not be presented for action at the meeting in question.
If neither the Board of Directors nor such committee makes a determination
as to the compliance of any shareholder nomination with the provisions of this
Section 8, as set forth above, the chairman of the meeting of shareholders shall
determine and declare to the meeting, if the facts warrant, that such nomination
was not properly brought before the meeting in accordance with the provisions of
this Section 8, and if he should so determine, the defective nomination shall be
disregarded.
SECTION 9. CLASSIFICATION, ELECTION AND TERM OF OFFICE OF DIRECTORS.
Subject to the remaining provisions of this Section 9, the directors shall
be divided into three (3) classes as follows: (i) the first class shall be
composed of three directors, and the directors elected to such class shall
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hold office until the 1999 annual meeting of shareholders and until their
respective successors are elected and qualified; (ii) the second class shall be
composed of three directors, and the directors elected to such class shall hold
office until the 2000 annual meeting of shareholders and until their respective
successors are elected and qualified; and (iii) the third class shall be
composed of three directors, and the directors elected to such class shall hold
office until the 2001 annual meeting of shareholders and until their respective
successors are elected and qualified; in all cases, subject to prior death,
resignation or removal from office. Thereafter, at each annual meeting of
shareholders, directors to succeed those whose terms are expiring at such annual
meeting shall be elected to hold office until the third succeeding annual
meeting of shareholders and until their respective successors are elected and
qualified, subject to prior death, resignation or removal from office. If the
number of directors is changed, any increase or decrease shall be apportioned
between the classes so as to maintain the number of directors in each class as
nearly equal as possible, and any additional director of any class elected to
fill a vacancy resulting from an increase in such class shall hold office for a
term that shall coincide with the remaining term of such class, but in no case
will a decrease in the number of directors shorten the term of any incumbent
director. Election of directors shall be by ballot whenever requested by any
person entitled to vote at the meeting; but unless so requested such election
may be conducted in any way approved at such meeting.
SECTION 10. REMOVAL.
Except as otherwise provided by law, all the directors or all the directors
of a particular class, or any individual director, may be removed from office
without assigning any cause, by the affirmative vote of at least eighty percent
(80%) of the Voting Shares at an annual meeting or at any special meeting duly
called.
SECTION 11. VACANCIES.
Whenever any vacancy shall occur among the directors, the remaining
directors shall constitute the directors of the Corporation until such vacancy
is filled or until the number of directors is changed pursuant to Section 7
hereof. Except in cases where a director is removed as provided by law and these
Regulations and his successor is elected by the shareholders, the remaining
directors may, by a vote of a majority of their number, fill any vacancy for the
unexpired term. A majority of the directors then in office may also fill any
vacancy that results from an increase in the number of directors.
SECTION 12. QUORUM AND ADJOURNMENTS.
A majority of the directors in office at the time shall constitute a
quorum, provided that any meeting duly called, whether a quorum is present or
otherwise, may, by vote of a majority of the directors present, adjourn from
time to time and place to place within or without the State of Ohio, in which
case no further notice of the adjourned meeting need be given. At any meeting at
which a quorum is present, all questions and business shall be determined by the
affirmative vote of not less than a majority of the directors present, except as
is otherwise provided in the Articles of Incorporation or these Regulations or
is otherwise authorized by Section 1701.60(A)(1) of the Ohio Revised Code.
SECTION 13. ORGANIZATION MEETING.
Immediately after each annual meeting of the shareholders at which
directors are elected, or each special meeting held in lieu thereof, the
directors, including those newly elected, if a quorum of all such directors is
present, shall hold an organization meeting at the same place or at such other
time and place as may be fixed by the shareholders at such meeting, for the
purpose of electing officers and transacting any other business. Notice of such
meeting need not be given. If for any reason such organization meeting is not
held at such time, a special meeting for such purpose shall be held as soon
thereafter as practicable.
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SECTION 14. REGULAR MEETINGS.
Regular meetings of the directors may be held at such times and places
within or without the State of Ohio as may be provided for in by-laws or
resolutions adopted by the directors and upon such notice, if any, as shall be
so provided for.
SECTION 15. SPECIAL MEETINGS.
Special meetings of the directors may be held at any time within or without
the State of Ohio upon call by the Chairman of the Board, the Vice Chairman, or
a majority of the directors. Written notice of each such meeting shall be given
to each director by personal delivery or by mail, cablegram or telegram not less
than two days prior to such meeting or such shorter notice as the directors
shall deem necessary and warranted under the circumstances. Any directors may
waive in writing notice of any meeting, and, by attending any meeting without
protesting the lack of proper notice, shall be deemed to have waived notice
thereof. Unless otherwise limited in the notice thereof, any business may be
transacted at any organization, regular or special meeting.
SECTION 16. COMPENSATION.
The directors are authorized to fix reasonable compensation, which may
include pension, disability, and death benefits for services to the Corporation
by directors or a reasonable fee for attendance at any meeting of the directors,
the Executive Committee, or other committees elected under Section 20 hereof, or
any combination of salary and attendance fee. In addition to such compensation
provided for directors, they shall be reimbursed for any expenses incurred by
them in traveling to and from such meetings.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
SECTION 17. MEMBERSHIP AND ORGANIZATION.
(a) The directors, at any time, may elect from their number an Executive
Committee which shall consist of three or more directors of the Corporation,
each of whom shall hold office during the pleasure of the directors and may be
removed at any time, with or without cause, by vote thereof.
(b) Vacancies occurring in the Committee may be filled by the directors.
(c) In the event the directors have not designated a Chairman, the
Committee shall appoint one of its own number as Chairman who shall preside at
all meetings and may also appoint a Secretary (who need not be a member of the
Committee) who shall keep its records and who shall hold office during the
pleasure of the Committee.
SECTION 18. MEETINGS.
(a) Regular meetings of the Committee may be held without notice of the
time, place or purposes thereof and shall be held at such times and places
within or without the State of Ohio as the Committee may from time to time
determine.
(b) Special meetings may be held upon notice of the time, place and
purposes thereof at any place within or without the State of Ohio and until
otherwise ordered by the Committee shall be held at any time and place at the
call of the Chairman or any two members of the Committee.
(c) At any regular or special meeting the Committee may exercise any or all
of its powers, and any business which shall come before any regular or special
meeting may be transacted thereat, provided a majority of the Committee is
present, but in every case the affirmative vote of a majority of all of the
members of the Committee shall be necessary to take any action.
(d) Any authorized action by the Committee may be taken without a meeting
by a writing signed by all the members of the Committee.
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SECTION 19. POWERS.
Except as its powers, duties and functions may be limited or prescribed by
the directors, during the intervals between the meetings of the directors, the
Committee shall possess and may exercise all the powers of the directors
provided that the Committee shall not be empowered to declare dividends, elect
or remove officers, fill vacancies among the directors or Executive Committee,
adopt an agreement of merger or consolidation, recommend to the shareholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, nor recommend to the shareholders a dissolution of the
Corporation or revocation of a dissolution. All actions of the Committee shall
be reported to the directors at their meeting next succeeding such action and
shall be subject to revision or alteration by the directors, provided that no
rights of any third person shall be affected thereby.
SECTION 20. OTHER COMMITTEES.
The directors may elect other committees from among the directors in
addition to or in lieu of an Executive Committee and give to them any of the
powers which under the foregoing provisions could be vested in an Executive
Committee. Sections 17 and 18 shall be applicable to such other committees.
OFFICERS
SECTION 21. OFFICERS DESIGNATED.
The offices of the Corporation shall be a Chairman of the Board, a Vice
Chairman, a President, a Secretary, a Treasurer and, in their discretion, one or
more Vice Presidents, an Assistant Secretary or Secretaries, an Assistant
Treasurer or Treasurers, and such other officers as the Board of Directors may
from time to time deem appropriate. The Chairman of the Board and the Vice
Chairman shall be, and the other officers may, but need not be, chosen from
among the directors. Any two or more of such offices other than that of Chairman
and Vice Chairman, President and Vice President, Secretary and Assistant
Secretary or Treasurer and Assistant Treasurer, may be held by the same person,
but no officer shall execute, acknowledge or verify any instrument in more than
one capacity if such instrument is required by law, the Articles of
Incorporation, these Regulations or any by-laws to be executed, acknowledged, or
verified by two or more officers.
SECTION 22. ELECTION OF OFFICERS; TENURE OF OFFICE.
All officers shall be elected by the Board of Directors. The Board of
Directors may remove any officer at any time with or without cause by a majority
vote of the directors in office at the time. A vacancy, however created, in any
office may be filled by election by the directors.
Notwithstanding anything to the contrary in the preceding paragraph or
elsewhere herein, in the event of the death or permanent incapacity of the
Chairman of the Board, (i) the person then holding the office of Vice Chairman
shall automatically succeed to the office of Chairman for a continuous term
(subject to his continued qualification) of not less than one year from the date
of such succession and (ii) in the event such person's term as a director of the
Corporation is due to expire during the one year period described above, such
person shall be nominated by the Corporation for reelection to the Board of
Directors at the next annual meeting.
SECTION 23. CHAIRMAN OF THE BOARD.
The Chairman of the Board shall be the chief executive officer of the
Corporation, shall preside at meetings of the shareholders and directors, shall
initiate and develop broad corporate policies and shall have such other powers
and duties as may be prescribed by the directors. Except where the signature of
the President is required by law, the Chairman of the Board shall possess the
same power as the President to execute all authorized deeds, mortgages, bonds,
contracts and other instruments and obligations in the name of the Corporation.
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SECTION 24. VICE CHAIRMAN.
The Vice Chairman shall, in the absence of the Chairman of the Board,
preside at meetings of the shareholders and the directors. He shall have such
other powers and duties as may be prescribed by the directors.
SECTION 25. PRESIDENT.
The President shall be the chief operating officer of the Corporation and
shall have general supervision over its property, business and affairs, subject
to the directions of the Chairman of the Board and/or the directors. Unless
otherwise determined by the directors, he shall have authority to execute all
authorized deeds, mortgages, bonds, contracts and other instruments and
obligations in the name of the Corporation, and, in the absence of the Chairman
of the Board and the Vice Chairman, shall preside at meetings of the
shareholders and the directors. He shall have such other powers and duties as
may be prescribed by the directors.
SECTION 26. VICE PRESIDENTS.
The Vice Presidents shall have such powers and duties as may be prescribed
by the directors or as may be delegated by the Chairman of the Board or the
President.
SECTION 27. SECRETARY.
The Secretary shall attend and keep the minutes of all meetings of the
shareholders and of the directors. He shall keep such books as may be required
by the directors, shall have charge of the seal of the Corporation and shall
give all notices of meetings of shareholders and directors; provided, however,
that any persons calling such meetings may, at their option, themselves give
such notice. He shall have such other powers and duties as may be prescribed by
the directors.
SECTION 28. TREASURER.
The Treasurer shall receive and have in charge all money, bills, notes,
bonds, stocks in other corporations and similar property belonging to the
Corporation and shall do with the same as shall be ordered by the directors. He
shall keep accurate financial accounts and hold the same open for inspection and
examination of the directors. On the expiration of his term of office, he shall
turn over to his successor, or the directors, all property, books, papers and
money of the Corporation in his hands. He shall have such other powers and
duties as may be prescribed by the directors.
SECTION 29. OTHER OFFICERS.
The Assistant Secretaries, Assistant Treasurers, if any, and the other
officers, if any, shall have such powers and duties as the directors may
prescribe.
SECTION 30. DELEGATION OF DUTIES.
The directors are authorized to delegate the duties of any officers to any
other officer and generally to control the action of the officers and to require
the performance of duties in addition to those mentioned herein.
SECTION 31. COMPENSATION.
The directors are authorized to determine or to provide the method of
determining the compensation of all officers.
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SECTION 32. BOND.
Any officer or employee, if required by the directors, shall give bond in
such sum and with such security as the directors may require for the faithful
performance of his duties.
SECTION 33. SIGNING CHECKS AND OTHER INSTRUMENTS.
The directors are authorized to determine or provide the method of
determining how checks, notes, bills of exchange and similar instruments shall
be signed, countersigned or endorsed.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
SECTION 34. INDEMNIFICATION.
The Corporation shall indemnify any director or officer or any former
director or officer of the Corporation or any person who is or has served at the
request of the Corporation as a director, officer or trustee of another
corporation, joint venture, trust or other enterprise (and his heirs, executors
and administrators) against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement, actually and reasonably incurred by him by
reason of the fact that he is or was such director, officer or trustee in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative to the full extent and
according to the procedures and requirements set forth in the Ohio General
Corporation Law as the same may be in effect from time to time. The
indemnification provided for herein shall not be deemed to restrict the right of
the Corporation to indemnify employees, agents and others as permitted by such
Law.
The indemnification authorized by the foregoing paragraph shall not be
exclusive of, and shall be in addition to any other rights granted to those
seeking indemnification under the Articles or Incorporation or these Regulations
or any Indemnification Agreement (as hereinafter defined), vote of shareholders
or disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
Without derogation to the power of the Corporation from time to time to
enter into, or assume the obligations of any affiliate of the Corporation under,
any agreement granting rights of indemnification to any person or entity
("Indemnification Agreement"), the Corporation is hereby expressly authorized to
assume the obligations of Park-Ohio Industries, Inc. under any Indemnification
Agreement existing on the effective date of the merger of PKOH Merger Corp. with
and into Park-Ohio Industries, Inc. (the "Merger"), and any obligations so
assumed shall be binding upon the Corporation with the same force and effect as
if the Corporation had been an original party to such Indemnification Agreement.
The Corporation is further authorized to enter into Indemnification Agreements
in substantially the same form as the Indemnification Agreements of Park-Ohio
Industries, Inc. existing on the effective date of the Merger.
The Corporation may purchase and maintain insurance or furnish similar
protection, including but not limited to trust funds, letters of credit or
self-insurance, on behalf of or for any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, trustee, officer, employee or agent of
another corporation, joint venture, trust or other enterprise (and his heirs,
executors and administrators), against any liability asserted against him and
incurred by him in such capacity, or arising out of his status as such,
regardless of whether the Corporation would have indemnified him against such
liability under the foregoing provisions of this Section 34. Insurance may be
purchased from or maintained with a person in which the Corporation has a
financial interest.
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CORPORATE SEAL
SECTION 35. CORPORATE SEAL.
The corporate seal of the Corporation shall be circular in form and shall
contain the name of the Corporation.
PROVISIONS IN ARTICLES OF INCORPORATION
SECTION 36. PROVISIONS IN ARTICLES OF INCORPORATION.
These Regulations are at all times subject to the provisions of the
Articles of Incorporation of the Corporation as the same may be in effect from
time to time, including without limitation, the provisions of Article FOURTH
thereof authorizing the Board of Directors to fix by resolution or resolutions
providing for the issuance of Serial Stock, the voting powers and designation,
preferences and relative rights, qualifications, limitations or restrictions of
such Serial Stock to the fullest extent permitted by the laws of the State of
Ohio.
LOST CERTIFICATES
SECTION 37. LOST CERTIFICATES.
The directors may direct a new certificate to be issued in place of any
certificate theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon such terms and conditions as they may deem advisable
upon satisfactory proof of loss or destruction thereof. When authorizing such
issue of a new certificate, the directors may, as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or his legal representative, to advertise the same in such manner
as the directors shall require and/or to give the Corporation a suitable bond or
indemnity against loss by reason of the issuance of a new certificate.
RECORD DATES
SECTION 38. RECORD DATES.
For any lawful purpose, including, without limitation, the determination of
the shareholders who are entitled to: (i) receive notice of or to vote at a
meeting of shareholders; (ii) receive payment of any dividend or distribution;
(iii) receive or exercise rights of purchase of or subscription for, or exchange
or conversion of, shares or other securities, subject to contract rights with
respect thereto; or (iv) participate in the execution of written consents,
waivers, or releases, the directors may fix a record date which shall not be a
date earlier than the date on which the record date is fixed and, in the cases
provided for in clauses (i), (ii) and (iii) above, shall not be more than sixty
(60) nor fewer than ten (10) days, unless the Articles of Incorporation specify
a shorter or a longer period for such purpose, preceding the date of the meeting
of the shareholders, or the date fixed for the payment of any dividend or
distribution, or the date fixed for the receipt or the exercise of rights, as
the case may be.
AMENDMENTS
SECTION 39. AMENDMENTS.
(a) These Regulations may be altered, changed or amended in any respect or
superseded by new Regulations in whole or in part, by the affirmative vote of
the holders of two-thirds of the outstanding Voting Shares, unless such
alteration, change, amendment or adoption has been recommended by at least
two-thirds of the Board of Directors of the Corporation then in office, in which
event such alteration, change, amendment or adoption may be approved by the
affirmative vote of the holders of a majority of the outstanding Voting
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Shares. No alteration, change or amendment of these Regulations or adoption of
new Regulations in whole or part may be adopted by the shareholders other than
pursuant to a vote of shareholders at an annual or special meeting or pursuant
to a writing or writings signed by the holders of all of the Voting Shares
entitled to notice of a meeting of the shareholders held for such purpose.
(b) Notwithstanding the provisions of Section 39(a) hereof and
notwithstanding the fact that a lesser percentage may be specified by law or in
any agreement with any national securities exchange or any other provision of
these Regulations, the amendment, alteration, change or repeal of, or adoption
of any provisions inconsistent with, Sections 7, 9 or 10 of these Regulations
shall require the affirmative vote of at least eighty percent (80%) of the
outstanding Voting Shares, unless such amendment, alteration, change, repeal or
adoption has been recommended by at least two-thirds of the Continuing Directors
(as defined in Section 7 of these Regulations), in which event the provisions of
Section 39(a) hereof shall apply.
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APPENDIX D
DISSENTERS' RIGHTS UNDER OHIO REVISED CODE SECTION 1701.85
1701.85 QUALIFICATIONS OF AND PROCEDURES FOR DISSENTING SHAREHOLDERS
(A)(l) A shareholder of a domestic corporation is entitled to relief as a
dissenting shareholder in respect of the proposals described in sections
1701.74,1701.76, 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 the proposal was taken at the meeting of the shareholders,
the dissenting 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,
which demand shall state 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 of the Revised Code, the dissenting 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
entity, whether the demand is 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, the dissenting shareholder, within fifteen days
from the date of the sending of such request, shall deliver to the corporation
the certificates requested so 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 dissenting shareholder. A dissenting shareholder's failure to deliver such
certificates terminates his rights as a dissenting shareholder, at the option of
the corporation, exercised by written notice sent to the dissenting shareholder
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.
A request under this paragraph 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 have come to an
agreement on the fair cash value per share of the shares as to which the
dissenting shareholder seeks relief, the dissenting shareholder or the
corporation, which in case of a merger or consolidation may be the surviving or
new entity, within three months after the service of the demand by the
dissenting shareholder, may file a complaint in the court of
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common pleas of the county in which the principal office of the corporation that
issued the shares is located or was located when the proposal was adopted by the
shareholders of the corporation, or, if the proposal was not required to be
submitted to the shareholders, was approved by the directors. Other dissenting
shareholders, within that three-month period, may join as plaintiffs or may be
joined as defendants in any such proceeding, and any two or more such
proceedings nay 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 a complaint is required.
Upon the filing of such a 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 dissenting 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 dissenting 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 that is agreed upon by the parties or 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 the 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 the day on which the vote by the shareholders was taken and, in
the case of a merger pursuant to section 1701.80 or 1701.801 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
who is under no compulsion to sell would be willing to accept and that a willing
buyer who is under no compulsion to purchase would be willing to pay, but in no
event shall the fair cash value of a share 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)(1) 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 any of the following applies:
(a) The dissenting shareholder has not complied with this section,
unless the corporation by its directors waives such failure;
(b) The corporation abandons the action involved or is finally
enjoined or prevented from carrying it out, or the shareholders rescind
their adoption of the action involved;
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(c) The dissenting shareholder withdraws his demand, with the consent
of the corporation by its directors;
(d) The corporation and the dissenting shareholder have not come to an
agreement as to the fair cash value per share, and neither the shareholder
nor the corporation has filed or joined in a complaint under division (B)
of this section within the period provided in that division.
(2) For purposes of division (D)(1) of this section, if the merger or
consolidation has become effective and the surviving or new entity is not a
corporation, action required to be taken by the directors of the corporation
shall be taken by the general partners of a surviving or new partnership or the
comparable representatives of any other surviving or new entity.
(E) From the time of the dissenting shareholder's giving of 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 other
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 E
PARK-OHIO INDUSTRIES, INC.
1998 LONG-TERM INCENTIVE PLAN
1. PURPOSES
The purposes of the Park-Ohio Industries, Inc. 1998 Long-Term Incentive
Plan (the "Plan") are to promote the long-term growth and performance of
Park-Ohio Industries, Inc. (the "Company") and its subsidiaries by providing an
opportunity for employees of the Company and its subsidiaries to participate
through share ownership in the long-term growth and success of the Company,
enhancing the Company's ability to attract and retain persons with desired
abilities, providing additional incentives for such persons and furthering the
identity of interests of employees and shareholders of the Company.
2. DEFINITIONS
(a) "Award" means any form of stock option, stock appreciation right,
restricted shares, share or share-based award or performance share granted to a
Participant under the Plan.
(b) "Award Agreement" means a written agreement between the Company and a
Participant setting forth the terms, conditions and limitations applicable to an
Award.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
(e) "Committee" means the Compensation and Stock Option Committee of the
Company's Board, or such other committee of the Board that is designated by the
Board to administer the Plan, provided that the Committee shall be constituted
so as to satisfy any applicable legal requirements, including the requirements
of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and Section 162(m) of the Code or any respective successor
rule.
(f) "Fair Market Value" means the closing price of Shares as reported on
the Nasdaq Stock Market for the date in question, provided that if no sales of
Shares were made on the Nasdaq Stock Market on that date, the closing price of
Shares as reported on the Nasdaq Stock Market for the preceding day on which
sales of Shares were made on the Nasdaq Stock Market shall be used.
(g) "Participant" means any employee of the Company or its direct or
indirect subsidiaries or any other person whose selection the Committee
determines to be in the best interests of the Company, to whom an Award is made
under the Plan.
(h) "Shares" means the common stock, par value $1.00 per share, of the
Company.
3. SHARES AVAILABLE FOR AWARDS
Subject to adjustment as provided in Section 11 below, the aggregate number
of Shares which may be awarded under the Plan in each fiscal year of the Company
shall be percent ( %) of the total outstanding Shares as of the first
day of such year, provided that such number shall be increased in any year by
the number of Shares available for grant under the Plan in previous years but
not the subject of Awards granted under the Plan in such years, and provided
further that no more than ( ) Shares shall be cumulatively
available for the grant of incentive stock options under the Plan and that no
more than ( ) Shares shall be the subject of Awards to any
individual Participant in any one calendar year. Shares issuable under the Plan
may consist of authorized and unissued Shares or treasury Shares.
Any Shares issued by the Company through the assumption or substitution of
outstanding grants previously made by an acquired corporation or entity shall
not reduce the Shares available for Awards under the Plan. If any Shares subject
to any Award granted under the Plan are forfeited or if such Award otherwise
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terminates without the issuance of such Shares or payment of other consideration
in lieu of such Shares, the Shares subject to such Award, to the extent of any
such forfeiture or termination, shall again be available for grant under the
Plan as if such Shares had not been subject to an Award.
4. ADMINISTRATION
The Plan shall be administered by the Committee, which shall have full
power and authority to interpret the Plan, to grant waivers of Plan restrictions
and to adopt such rules, regulations and policies for carrying out the Plan as
it may deem necessary or proper in order to further the purposes of the Plan. In
particular, the Committee shall have the authority to (i) select Participants to
receive Awards, (ii) determine the number and type of Awards to be granted,
(iii) determine the terms and conditions, not inconsistent with the terms
hereof, of any Award granted, (iv) interpret the terms and provisions of the
Plan and any Award granted, (v) prescribe the form of any agreement or
instrument executed in connection with any Award, and (vi) establish, amend and
rescind such rules, regulations and policies for the administration of the Plan
as it may deem advisable from time to time.
5. AWARDS
The Committee shall determine the type(s) of Award(s) to be made to each
Participant and shall set forth in the related Award Agreement the terms,
conditions and limitations applicable to each Award. Awards may include but are
not limited to those listed in this Section 5. Awards may be made singly, in
combination, in tandem or in exchange for a previously granted Award, and also
may be made in combination or in tandem with, in replacement of, or as
alternatives to, grants or rights under any other employee plan of the Company,
including the plan of any acquired entity.
(a) Stock Options. Awards may be made in the form of stock options, which
may be incentive stock options within the meaning of Section 422 of the Code or
nonstatutory stock options not intended to qualify under Section 422 of the
Code. Incentive stock options may be granted only to employees. The aggregate
Fair Market Value (determined at the time the option is granted) of Shares as to
which incentive stock options are exercisable for the first time by a
Participant during any calendar year (under the Plan and any other plan of the
Company) shall not exceed $100,000 (or such other limit as may be required by
the Code from time to time). The exercise price of stock options granted under
the Plan shall be not less than 100% of Fair Market Value on the date of the
grant. A stock option granted under the Plan shall be exercisable in whole or in
such installments and at such times and upon such terms as may be determined by
the Committee, provided that no stock option shall be exercisable more than ten
years after the date of grant. A participant may pay the exercise price of a
stock option in cash, Shares or a combination of cash and Shares. The Committee
shall establish appropriate procedures for accepting Shares in payment of the
exercise price of a stock option and may impose such conditions as it deems
appropriate on such use of Shares.
(b) Stock Appreciation Rights. Awards may be granted in the form of stock
appreciation rights ("SARs"). SARs shall entitle the recipient to receive a
payment, in cash or Shares, equal to the appreciation in market value of a
stated number of Shares from the price stated in the Award Agreement to the Fair
Market Value on the date of exercise or surrender. SARs may be granted either
separately or in conjunction with other Awards granted under the Plan. Any SAR
related to a nonstatutory stock option may be granted at the same time such
option is granted or any time thereafter before exercise or expiration of such
option. Any SAR related to an incentive stock option must be granted at the same
time such option is granted. Any SAR related to an option shall be exercisable
only to the extent the related option is exercisable. In the case of any SAR
related to any option, the SAR or applicable portion thereof shall terminate and
no longer be exercisable upon the termination or exercise of the related option.
Similarly, upon exercise of an SAR as to some or all of the Shares covered by a
related option, the related option shall be canceled automatically to the extent
of the SARs exercised, and such Shares shall not thereafter be eligible for
grant. The Committee may impose such conditions or restrictions upon the
exercise of any SAR as it shall deem appropriate.
(c) Restricted Shares. Awards may be granted in the form of restricted
Shares in such numbers and at such times as the Committee shall determine.
Awards of restricted Shares shall be subject to such terms,
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conditions or restrictions as the Committee deems appropriate including, but not
limited to, restrictions on transferability, requirements of continued
employment, individual performance or financial performance of the Company. The
period of vesting and forfeiture restrictions shall be established by the
Committee at the time of grant, except that no restriction period shall be less
than 12 months. During the period in which any restricted Shares are subject to
forfeiture restrictions, the Committee may, in its discretion, grant to the
Participant to whom such restricted Shares have been awarded, all or any of the
rights of a shareholder with respect to such restricted Shares, including the
right to vote such Shares and to receive dividends with respect to such Shares.
(d) Performance Shares. Awards may be made in the form of Shares that are
earned only after the attainment of predetermined performance targets as
established by the Committee at the time an Award is made ("Performance
Shares"). A performance target shall be based upon one or any combination of the
following: (i) revenues of the Company; (ii) operating income of the Company;
(iii) net income of the Company; (iv) earnings per Share; (v) the Company's
return on equity; (vi) cash flow of the Company; (vii) Company shareholder total
return; (viii) return on assets; (ix) return on investment; (x) asset turnover;
(xi) liquidity; (xii) capitalization; (xiii) stock price; (xiv) expenses; (xv)
operating profit and margin; (xvi) retained earnings; (xvii) market share;
(xviii) sales to targeted customers; (xix) customer satisfaction; (xx) quality
measures; (xxi) productivity; (xxii) safety measures; or (xxiii) educational and
technical skills of employees. Performance targets may also be based on the
attainment of levels of performance of the Company and/or any of its affiliates
or divisions under one or more of the measures described above relative to the
performance of other businesses. The Committee shall be permitted to make
adjustments when determining the attainment of a performance target to reflect
extraordinary or nonrecurring items or events, or unusual nonrecurring gains or
losses identified in the Company's financial statements, as long as any such
adjustments are made in a manner consistent with Section 162(m) of the Code to
the extent applicable. Awards of Performance Shares made to Participants subject
to Section 162(m) of the Code are intended to qualify under Section 162(m) and
provisions of such Awards shall be interpreted in a manner consistent with that
intent to the extent appropriate. The foregoing provisions of this Section 5(d)
also shall be applicable to Awards of restricted Shares made under Section 5(c)
to the extent such Awards of restricted Shares are subject to the financial
performance of the Company. At the end of the applicable performance period,
Performance Shares shall be converted into Shares (or cash or a combination of
Shares and cash, as set forth in the Award Agreement) and distributed to
Participants based upon the applicable performance entitlement. Award payments
made in cash rather than the issuance of Shares shall not, by reason of such
payment in cash, result in additional Shares being available under the Plan.
(e) Stock Awards. Awards may be made in Shares or on a basis valued in
whole or in part by reference to, or otherwise based upon, Shares. Share awards
shall be subject to conditions established by the Committee and set forth in the
Award Agreement.
6. PAYMENT OF AWARDS; DEFERRALS
Payment of Awards may be made in the form of Shares, cash or a combination
of Shares and cash and may include such restrictions as the Committee shall
determine, including restrictions on transfer and forfeiture provisions. With
Committee approval, payments may be deferred, either in the form of installments
or a future lump sum payment. The Committee may permit Participants to elect to
defer payments of some or all types of Awards in accordance with procedures
established by the Committee to assure that such deferrals comply with
applicable requirements of the Code including the capability to make further
deferrals for payment after retirement. The Committee may also establish rules
and procedures for the crediting of interest on deferred cash payments and
dividend equivalents for deferred payments denominated in Shares.
7. TAX WITHHOLDING
The Company shall have the authority to withhold, or to require a
Participant to remit to the Company, prior to issuance or delivery of any Shares
or cash relating to an Award made under the Plan, an amount sufficient to
satisfy federal, state and local tax withholding requirements associated with
any Award. In addition, the Company may, in its sole discretion, permit a
Participant to satisfy any tax withholding
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requirements, in whole or in part, by (i) delivering to the Company Shares held
by such Participant having a Fair Market Value equal to the amount of the tax or
(ii) directing the Company to retain Shares having such Fair Market Value and
otherwise issuable to the Participant under the Plan.
8. TERMINATION OF EMPLOYMENT
If the employment of a Participant terminates for any reason, all
unexercised, deferred and unpaid Awards shall be exercisable or paid in
accordance with the applicable Award Agreement, which may provide that the
Committee may authorize, as it deems appropriate, the acceleration and/or
continuation of all or any part of Awards granted prior to such termination.
9. NONASSIGNABILITY
Except as may be otherwise provided in the relevant Award Agreement, no
Award or any benefit under the Plan shall be assignable or transferable, or
payable to or exercisable by, anyone other than the Participant to whom it was
granted.
10. CHANGE IN CONTROL
(a) In the event of a Change in Control (as defined below) of the Company,
and except as the Board may expressly provide otherwise, (i) all stock options
or SARs then outstanding shall become fully exercisable as of the date of the
Change in Control, whether or not then otherwise exercisable, (ii) all
restrictions and conditions of all Awards of restricted Shares then outstanding
shall be deemed satisfied as of the date of the Change in Control, and (iii) all
Awards of Performance Shares shall be deemed to have been fully earned as of the
date of the Change in Control.
(b) A "Change in Control" of the Company shall have occurred when any of
the following events shall occur:
(i) The Company is merged, consolidated or reorganized into or with
another corporation or other legal person, and immediately after such
merger, consolidation or reorganization less than a majority of the
combined voting power of the then-outstanding securities of such
corporation or person immediately after such transaction are held in the
aggregate by the holders of Voting Stock (as that term is hereafter
defined) of the Company immediately prior to such transaction;
(ii) The Company sells all or substantially all of its assets to any
other corporation or other legal person, less than a majority of the
combined voting power of the then-outstanding securities of such
corporation or person immediately after such sale are held in the aggregate
by the holders of Voting Stock of the Company immediately prior to such
sale;
(iii) There is a report filed or required to be filed on Schedule 13D
on Schedule 14D-1 (or any successor schedule, form or report), each as
promulgated pursuant to the Exchange Act, disclosing that any person (as
the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act) has become the beneficial owner (as the term "beneficial
owner, is defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities representing 20% or more
of the combined voting power of the then-outstanding securities entitled to
vote generally in the election of directors of the Company ("Voting
Stock");
(iv) The Company files a report or proxy statement with the Securities
and Exchange Commission pursuant to the Exchange Act disclosing in response
to Form 8-K or Schedule 14A (or any successor schedule, form or report or
item therein) that a change in control of the Company has or may have
occurred or will or may occur in the future pursuant to any then-existing
contract or transaction; or
(v) If during any period of two consecutive years, individuals who at
the beginning of any such period constitute the Directors of the Company
cease for any reason to constitute at least a majority thereof, provided,
however, that for purposes of this clause (v), each Director who is first
elected, or first nominated for election by the Company's shareholders by a
vote of at least two-thirds of the Directors of
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the Company (or a committee thereof) then still in office who were
Directors of the Company at the beginning of any such period will be deemed
to have been a Director of the Company at the beginning of such period.
Notwithstanding the foregoing provisions of Section 10(b)(iii) or (iv)
hereof, unless otherwise determined in a specific case by majority vote of the
Board, a "Change in Control" shall not be deemed to have occurred for purposes
of the Plan solely because (i) the Company, (ii) an entity in which the Company
directly or indirectly beneficially owns 50% or more of the voting securities or
interest, or (iii) any Company-sponsored employee stock ownership plan or any
other employee benefit plan of the Company, either files or becomes obligated to
file a report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) under the Exchange Act, disclosing beneficial ownership
by it of shares of Voting Stock, whether in excess of 20% or otherwise, or
because the Company reports that a change in control of the Company has or may
have occurred or will or may occur in the future by reason of such beneficial
ownership.
11. ADJUSTMENTS UPON CHANGES OF CAPITALIZATION
In the event of any change in the outstanding Shares by reason of a
reorganization, recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation or any change in the corporate
structure or Shares of the Company, the number of Shares as to which Awards may
be granted under the Plan, including limitations relating to incentive stock
option Awards and maximum Awards to individual Participants, the number of
Shares issuable pursuant to then outstanding Awards, and/or, if appropriate, the
prices of Shares related to outstanding Awards, shall be appropriately and
proportionately adjusted.
12. RIGHTS OF EMPLOYEES
Nothing in the Plan shall interfere with or limit in any way the right of
the Company or any subsidiary to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continued employment with the
Company or any subsidiary.
13. AMENDMENT, SUSPENSION OR TERMINATION OF PLAN AND AWARDS
The Board may amend, suspend or terminate the Plan at any time, provided
that no such action shall be taken that would impair the rights under an
outstanding Award without the Participant's consent.
The Board may amend the terms of any outstanding Award, prospectively or
retroactively, but no such amendment shall impair the rights of any Participant
without the Participant's consent and no such amendment shall have the effect,
with respect to any employee subject to Section 162(m) of the Code, of
increasing the amount of any Award from the amount that would otherwise be
payable pursuant to the formula and/or goals previously established for such
Participant.
14. GOVERNING LAW
The Plan, together with all determinations and actions made or taken in
connection therewith, to the extent not otherwise governed by the Code or other
laws of the United States, shall be governed by the laws of the State of Ohio.
15. EFFECTIVE AND TERMINATION DATES
The Plan shall become effective on the date it is approved by the
shareholders of the Company. The Plan shall continue in effect until terminated
by the Board, at which time all outstanding Awards shall remain outstanding in
accordance with their applicable terms and conditions.
E-5
<PAGE> 78
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 34 of the Holding Company's Code of Regulations, as currently in
effect, provides that the Holding Company will indemnify any director or officer
or any former director or officer of the Holding Company or any person who is or
has served at the request of the Holding Company as a director, officer or
trustee of another corporation, joint venture, trust or other enterprise (and
his heirs, executors and administrators) against expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement, actually and reasonably
incurred by him by reason of the fact that he is or was such director, officer
or trustee in connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative to the
full extent and according to the procedures and requirements set forth in the
Ohio General Corporation Law as the same may be in effect from time to time.
Section 34 further provides that the indemnification provided for therein
shall not be deemed to restrict the right of the Holding Company to indemnify
employees, agents and others as permitted by such Law, and shall be in addition
to any other rights granted to those seeking indemnification under the Articles
or Incorporation or these Regulations or any Indemnification Agreement (as
hereinafter defined), vote of shareholders or disinterested directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.
In addition, Section 34 provides that, without derogation to the power of
the Holding Company from time to time to enter into, or assume the obligations
of any affiliate of the Holding Company under, any agreement granting rights of
indemnification to any person or entity ("Indemnification Agreement"), the
Holding Company is expressly authorized to assume the obligations of Park-Ohio
Industries, Inc. under any Indemnification Agreement existing on the date of the
initial adoption of the Holding Company Regulations, and any obligations so
assumed will be binding upon the Holding Company with the same force and effect
as if the Holding Company had been an original party to such Indemnification
Agreement.
Section 34 also authorizes the Holding Company to purchase and maintain
insurance or furnish similar protection, including but not limited to trust
funds, letters of credit or self-insurance, on behalf of or for any person who
is or was a director, officer, employee or agent of the Holding Company, or is
or was serving at the request of the Holding Company as a director, trustee,
officer, employee or agent of another corporation, joint venture, trust or other
enterprise (and his heirs, executors and administrators), against any liability
asserted against him and incurred by him in such capacity, or arising out of his
status as such, regardless of whether the Holding Company would have indemnified
him against such liability under any other provision of Section 34. It further
provides that insurance may be purchased from or maintained with a person in
which the Holding Company has a financial interest.
Section 1701.13(E) of the Ohio General Corporation Law provides in regard
to indemnification of directors and officers as follows:
(1) A corporation may indemnify or agree to indemnify any person who
was or is a party or is threatened to be made a party, to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, other than an action by or in the right
of the corporation, by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee,
member, manager, or agent of another corporation, domestic or foreign,
nonprofit or for profit, a limited liability company, or a partnership,
joint venture, trust, or other enterprise, against expenses, including
attorney's fees, judgments, fines, and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit, or
proceeding, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation,
and with respect to any criminal action or proceeding, if he had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit, or proceeding by judgment, order, settlement, or
conviction, or upon a plea
<PAGE> 79
of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful.
(2) A corporation may indemnify or agree to indemnify any person who
was or is a party, or is threatened to be made a party, to any threatened,
pending, or completed action or suit by or in the right of the corporation
to procure a judgment in its favor, by reason of the fact that he is or was
a director, officer, employee, member, manager, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee, member, manager, or agent of another
corporation, domestic or foreign, nonprofit or for profit, a limited
liability company, or a partnership, joint venture, trust, or other
enterprise, against expenses, including attorney's fees, actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made in respect of any
of the following:
(a) Any claim, issue, or matter as to which such person is adjudged
to be liable for negligence or misconduct in the performance of his duty
to the corporation unless, and only to the extent that, the court of
common pleas or the court in which such action or suit was brought
determines, upon application, that, despite the adjudication of
liability, but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses as the
court of common pleas or such other court shall deem proper;
(b) Any action or suit in which the only liability asserted against
a director is pursuant to section 1701.95 of the Revised Code.
(3) To the extent that a director, trustee, officer, employee, member,
manager, or agent has been successful on the merits or otherwise in defense
of any action, suit, or proceeding referred to in division (E)(1) or (2) of
this section, or in defense of any claim, issue, or matter therein, he
shall be indemnified against expenses, including attorney's fees, actually
and reasonably incurred by him in connection with the action, suit, or
proceeding.
(4) Any indemnification under division (E)(1) or (2) of this section,
unless ordered by a court, shall be made by the corporation only as
authorized in the specific case, upon a determination that indemnification
of the director, trustee, officer, employee, member, manager, or agent is
proper in the circumstances because he has met the applicable standard of
conduct set forth in division (E)(1) or (2) of this section. Such
determination shall be made as follows:
(a) By a majority vote of a quorum consisting of directors of the
indemnifying corporation who were not and are not parties to or
threatened with the action, suit, or proceeding referred to in division
(E)(1) or (2) of this section;
(b) If the quorum described in division (E)(4)(a) of this section
is not obtainable or if a majority vote of a quorum of disinterested
directors so directs, in a written opinion by independent legal counsel
other than an attorney, or a firm having associated with it an attorney,
who has been retained by or who has performed services for the
corporation or any person to be indemnified within the past five years;
(c) By the shareholders;
(d) By the court of common pleas or the court in which the action,
suit, or proceeding referred to in division (E)(1)(2) of this section
was brought.
Any determination made by the disinterested directors under division
(E)(4)(a) or by independent legal counsel under division (E)(4)(b) of this
section shall be promptly communicated to the person who threatened or
brought the action or suit by or in the right of the corporation under
division (E)(2) of this section, and, within ten days after receipt of such
notification, such person shall have the right to
II-2
<PAGE> 80
petition the court of common pleas or the court in which such action or
suit was brought to review the reasonableness of such determination.
(5)(a) Unless at the time of a director's act or omission that is the
subject of an action, suit, or proceeding referred to in division (E)(1) or
(2) of this section, the articles or the regulations of a corporation
state, by specific reference to this division, that the provisions of this
division do not apply to the corporation and unless the only liability
asserted against a director in an action, suit, or proceeding referred to
in division (E)(1) or (2) of this section is pursuant to section 1701.95 of
the Revised Code, expenses, including attorney's fees, incurred by a
director in defending the action, suit, or proceeding shall be paid by the
corporation 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 in which he agrees to do both of the following:
(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 the corporation or undertaken with reckless disregard
for the best interests of the corporation;
(ii) Reasonably cooperate with the corporation concerning the
action, suit, or proceeding.
(b) Expenses, including attorney's fees, incurred by a director,
trustee, officer, employee, member, manager, or agent in defending any
action, suit, or proceeding referred to in division (E)(1) or (2) of this
section, may be paid by the corporation as they are incurred, in advance of
the final disposition of the action, suit, or proceeding, as authorized by
the directors in the specific case, upon receipt of an undertaking by or on
behalf of the director, trustee, officer, member, manager, employee, or
agent to repay such amount, if it ultimately is determined that he is not
entitled to be indemnified by the corporation.
(6) The indemnification authorized by this section shall not be
exclusive of, and shall be in addition to, any other rights granted to
those seeking indemnification under the articles, the regulations, any
agreement, a vote of shareholders or disinterested directors, or otherwise,
both as to action in their official capacities and as to action in another
capacity while holding their offices or positions, and shall continue as to
a person who has ceased to be a director, trustee, officer, employee,
member, manager, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
(7) A corporation may purchase and maintain insurance or furnish
similar protection, including, but not limited to trust funds, letters of
credit, or self-insurance, on behalf of or for any person who is or was a
director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, trustee, officer,
employee, member, manager, or agent of another corporation, domestic or
foreign, nonprofit or for profit, a limited liability company, or a
partnership, joint venture, trust, or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under this section.
Insurance may be purchased from or maintained with a person in which the
corporation has a financial interest.
(8) The authority of a corporation to indemnify persons pursuant to
division (E)(1) or (2) of this section does not limit the payment of
expenses as they are incurred, indemnification, insurance, or other
protection that may be provided pursuant to divisions (E)(5), (6), and (7)
of this section. Divisions (E)(1) and (2) of this section do not create any
obligation to repay or return payments made by the corporation pursuant to
division (E)(5), (6), or (7).
(9) As used in division (E) of this section, "corporation" includes
all constituent entities in a consolidation or merger and the new or
surviving bank, so that any person who is or was a director, officer,
employee, trustee, member, manager, or agent of such a constituent entity,
or is or was serving at the request of such constituent entity as a
director, trustee, officer, employee, member, manager, or agent of another
corporation, domestic or foreign, nonprofit or for profit, a limited
liability company, or a partnership, joint venture, trust, or other
enterprise, shall stand in the same position under this section
II-3
<PAGE> 81
with respect to the new or surviving bank as he would if he had served the
new or surviving bank in the same capacity.
Pursuant to the Merger Agreement, the Holding Company has agreed to assume
all indemnity agreements in existence on the Effective Date ("Indemnity
Agreements") between the Company and any director and/or executive officer of
the Company who is also a director or officer of the Holding Company
("Indemnitees"). Pursuant to each Indemnity Agreement, the Company must
indemnify the Indemnitee with respect to his activities as a director or officer
of the Company and/or as a person who is serving or has served on behalf of the
Company ("Representative") as a director, officer or trustee of another
corporation, joint venture, trust or other enterprise, domestic or foreign, in
which the Company has a direct or indirect ownership interest against expenses
(including, without limitation, attorneys' fees, judgments, fines and amounts
paid in settlement) actually and reasonably incurred by him ("Expenses") in
connection with any claim against the Indemnitee which is the subject of any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or otherwise and whether formal or
informal (a "Proceeding"), to which the Indemnitee was, is or is threatened to
be made a party by reason of facts which include the Indemnitee's being or
having been such a director, officer or Representative, to the extent of the
highest and most advantageous to the Indemnitee, as determined by the
Indemnitee, of one or any combination of the following:
(a) The benefits provided by the Company's Regulations as of the date
of the Indemnity Agreement;
(b) The benefits provided by the Articles of Incorporation,
Regulations or By-laws or their equivalent of the Company in effect at the
time Expenses are incurred by the Indemnitee;
(c) The benefits allowable under Ohio law in effect as of the date of
the Indemnity Agreement;
(d) The benefits allowable under the law of the jurisdiction under
which the Company exists at the time Expenses are incurred by the
Indemnitee;
(e) The benefits available under liability insurance obtained by the
Company;
(f) The benefits which would have been available to the Indemnitee
under his Executive Liability Insurance Policy; and
(g) Such other benefits as are or may be otherwise available to the
Indemnitee.
The Indemnitee Agreements provide for the advancement of Expenses to the
Indemnitee if the Indemnitee provides the Company with a written undertaking
that (i) the Indemnitee has notified the Company of any Proceeding; (ii) the
Indemnitee believes he should prevail in the Proceeding and (iii) that the
Indemnitee will reimburse the Company for all Expenses if it is determined that
the Indemnitee is not entitled to indemnification.
The Holding Company also maintains directors' and officers' liability
insurance, pursuant to which directors and officers of the Holding Company are
insured against certain liabilities, including certain liabilities under the
1933 Act.
II-4
<PAGE> 82
ITEM 21. EXHIBITS AND FINANCIAL SCHEDULES
The following exhibits are being filed herewith and made a part hereof:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
- ----------- -----------------------
<S> <C>
2 Agreement of Merger dated February 20, 1998 by and among
Park-Ohio Industries, Inc., PKOH Holding Corp. and PKOH
Merger Corp. (attached as Appendix A to the Proxy
Statement/Prospectus filed as part of this Registration
Statement)
3.1 Amended and Restated Articles of Incorporation of PKOH
Holding Corp. (attached as Appendix B to the Proxy
Statement/Prospectus filed as part of this Registration
Statement)
3.2 Code of Regulations of PKOH Holding Corp. (attached as
Appendix C to the Proxy Statement/Prospectus filed as part
of this Registration Statement)
4 Form of Stock Certificate of PKOH Holding Corp.
5 Form of Opinion of Squire, Sanders & Dempsey L.L.P.
regarding legality of securities
8 Form of Opinion of Squire, Sanders & Dempsey L.L.P.
regarding tax matters
10.1 Proposed Park-Ohio Industries, Inc. 1998 Long-Term Incentive
Plan (attached as Appendix E to the Proxy
Statement/Prospectus filed as part of this Registration
Statement)
13* Park-Ohio Industries, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 1997.
23.1 Consent of Squire, Sanders & Dempsey L.L.P. (included in
Exhibits 5 and 8)
23.2* Consent of Ernst & Young LLP
24 Power of Attorney
99 Form of Proxy of Park-Ohio Industries, Inc.
</TABLE>
* To be filed by amendment.
ITEM 22. UNDERTAKINGS
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 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.
The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.
The registrant undertakes that every prospectus (i) that is filed pursuant
to the immediately preceding paragraph, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Securities Act of 1933 and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-5
<PAGE> 83
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 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.
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 documents
filed subsequent to the effective date of registration statement through the
date of responding to the request.
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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE> 84
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Cleveland, Ohio, on
February 25, 1998.
PKOH HOLDING CORP.
By: /s/ RONALD J. COZEAN
------------------------------------
Ronald J. Cozean
General Counsel and Secretary
Pursuant to the requirements of the 1933 Act, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<S> <C>
* February 25, 1998
- ------------------------------------------------------------ Date
Edward F. Crawford
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
* February 25, 1998
- ------------------------------------------------------------ Date
James S. Walker
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
* February 25, 1998
- ------------------------------------------------------------ Date
Lewis E. Hatch, Jr.
Director
* February 25, 1998
- ------------------------------------------------------------ Date
Thomas E. McGinty
Director
* February 25, 1998
- ------------------------------------------------------------ Date
Lawrence O. Selhorst
Director
* February 25, 1998
- ------------------------------------------------------------ Date
James W. Wert
Director
* February 25, 1998
- ------------------------------------------------------------ Date
Matthew V. Crawford
Director
</TABLE>
II-7
<PAGE> 85
<TABLE>
<S> <C>
* February 25, 1998
- ------------------------------------------------------------ Date
Felix J. Tarorick
Director
* February 25, 1998
- ------------------------------------------------------------ Date
Kevin R. Greene
Director
</TABLE>
* The undersigned pursuant to a Power of Attorney executed by each of the
Directors and Officers identified above and filed with the Securities and
Exchange Commission, by signing his name hereto, does hereby sign and execute
this Registration Statement on behalf of each of the persons noted above, in
the capacities indicated.
<TABLE>
<S> <C>
By: /s/ RONALD J. COZEAN February 25, 1998
-------------------------------------------------------- Date
Ronald J. Cozean, Attorney-in-Fact
</TABLE>
II-8
<PAGE> 86
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
- ----------- -----------------------
<S> <C>
2 Agreement of Merger dated February 20, 1998 by and among
Park-Ohio Industries, Inc., PKOH Holding Corp. and PKOH
Merger Corp. (attached as Appendix A to the Proxy
Statement/Prospectus filed as part of this Registration
Statement)
3.1 Amended and Restated Articles of Incorporation of PKOH
Holding Corp. (attached as Appendix B to the Proxy
Statement/Prospectus filed as part of this Registration
Statement)
3.2 Code of Regulations of PKOH Holding Corp. (attached as
Appendix C to the Proxy Statement/Prospectus filed as part
of this Registration Statement)
4 Form of Stock Certificate of PKOH Holding Corp.
5 Form of Opinion of Squire, Sanders & Dempsey L.L.P.
regarding legality of securities
8 Form of Opinion of Squire, Sanders & Dempsey L.L.P.
regarding tax matters
10.1 Proposed Park-Ohio Industries, Inc. 1998 Long-Term Incentive
Plan (attached as Appendix E to the Proxy
Statement/Prospectus filed as part of this Registration
Statement)
13* Park-Ohio Industries, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 1997.
23.1 Consent of Squire, Sanders & Dempsey L.L.P. (included in
Exhibits 5 and 8)
23.2* Consent of Ernst & Young LLP
24 Power of Attorney
99 Form of Proxy of Park-Ohio Industries, Inc.
</TABLE>
* To be filed by amendment.
<PAGE> 1
EXHIBIT 4
<TABLE>
<CAPTION>
<S> <C> <C>
COMMON STOCK COMMON STOCK
NUMBER SHARES
INCORPORATED UNDER THE LAWS PKOH HOLDING CORP. SEE REVERSE FOR CERTAIN
OF THE STATE OF OHIO DEFINITIONS AND TRANSFER PROVISIONS
CUSIP
This Certifies that
SPECIMEN
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, PAR VALUE $1.00 PER SHARE, OF
PKOH HOLDING CORP.
an Ohio corporation, transferable on the books of the Corporation in person or by duly authorized attorney upon
surrender of this certificate properly endorsed. This certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile signature of its duly authorized officers.
Dated
/s/ Ronald J Cozean PKOH HOLDING CORP. /s/ Edward F. Crawford
CORPORATE
SECRETARY SEAL CHAIRMAN
OHIO
COUNTERSIGNED AND REGISTERED:
BY NATIONAL CITY BANK
TRANSFER AGENT AND REGISTRAR
AUTHORIZED OFFICER
</TABLE>
PKOH HOLDING CORP.
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO
REQUEST THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS OF RESTRICTIONS OF SUCH PREFERENCES AND/OR
RIGHTS. SUCH REQUEST MAY BE MADE TO THE CORPORATION OR TO A TRANSFER AGENT.
Transfer of the shares represented by this Certificate is subject to the
provisions of Article SIXTH of the Corporation's Articles of Incorporation as
the same may be in effect from time to time. Upon written request delivered to
the Secretary of the Corporation at its principal place of business, the
Corporation will mail to the holder of this Certificate a copy of such
provisions without charge within five (5) days after receipt of written request
therefor. By accepting this Certificate the holder hereof acknowledges that it
is accepting same subject to the provisions of said Article SIXTH as the same
may be in effect from time to time and covenants with the Corporation and each
shareholder thereof from time to time to comply with the provisions of said
Article SIXTH as the same may be in effect from time to time.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM-as tenants in common UNIF GIFT MIN ACT-_____Custodian_____
TEN ENT-as tenants by the entireties (Cust) (Minor)
JT TEN -as joint tenants with right of under Uniform Gifts to
survivorship and not as tenants Minors
in common
Act _______
(State)
Additional abbreviations may also be used though not in the above list.
For value received, ________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY CODE OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OR ASSIGNEE)
- -----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
shares
- ------------------------------------------------------------------------
of the capital stock represented by the within Certificate and do hereby
irrevocably constitute and appoint ________________ Attorney to transfer the
said stock on the books of the within named Corporation with full power of
substitution in the premises.
Date ___________
--------------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon
the face of the certificate in every
particular, without alteration enlargement
or any change whatsoever.
<PAGE> 1
EXHIBIT 5
[FORM OF SS&D OPINION]
, 1998
PKOH Holding Corp.
23000 Euclid Avenue
Cleveland, Ohio 44117
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-4 ("Registration
Statement") to be filed by PKOH Holding Corp. in connection with the issuance of
up to 11,000,000 of its common shares, $1.00 par value per share (the "PKOH
Holding Corp. Shares"), upon the terms and conditions set forth in the Merger
Agreement dated February 20, 1998 by and among PKOH Holding Corp., PKOH Merger
Corp. and Park-Ohio Industries, Inc. (the "Merger Agreement"), relating to the
merger of PKOH Merger Corp. with and into Park-Ohio Industries, Inc. We have
examined such documents and matters of law as we have deemed necessary or
appropriate for the purpose of rendering this opinion.
Based upon the foregoing, we are of the opinion that the PKOH Holding Corp.
Shares, when issued by PKOH Holding Corp. as contemplated in the Merger
Agreement and the Registration Statement, will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference of our firm under the caption "Legal
Matters" in the proxy statement/prospectus contained therein.
Respectfully submitted,
<PAGE> 1
EXHIBIT 8
[FORM OF SS&D OPINION]
_____________________, 1998
Park-Ohio Industries, Inc.
23000 Euclid Avenue
Cleveland, Ohio 44117
PKOH Holding Corp.
23000 Euclid Avenue
Cleveland, Ohio 44117
Re: Merger of PKOH Merger Corp. With and Into Park-Ohio Industries, Inc.
Gentlemen:
Pursuant to section 3.5 of the Agreement of Merger, dated February 20,
1998, by and among Park-Ohio Industries, Inc. ("Park-Ohio"), PKOH Holding Corp.,
a newly formed and wholly owned subsidiary of Park-Ohio ("Holding Corp."), and
PKOH Merger Corp., a newly formed and wholly owned subsidiary of Holding Corp.
("Merger Corp.") (the "Merger Agreement"), Park-Ohio and Holding Corp. have
requested our opinion with respect to certain of the federal income tax
consequences of the merger of Merger Corp. with and into Park-Ohio (the
"Merger"). Under the terms of the Merger Agreement, shares of Park-Ohio stock
will be converted into shares of Holding Corp. stock.
Documents Examined
------------------
In connection with the rendering of our opinion, we have examined the
following:
1. The Merger Agreement;
2. The Registration Statement on Form S-4 under the Securities Act of
1933 filed by Holding Corp. with respect to the Holding Corp. stock to
be issued in connection with the Merger (the "Registration
Statement");
<PAGE> 2
Park-Ohio Industries, Inc.
PKOH Holding Corp.
______________, 1998
Page 2
3. The Representation Certificates of Park-Ohio, Holding Corp. and Merger
Corp.; and
4. Such other documents, records, and matters of law as we have deemed
necessary or appropriate in connection with rendering this opinion.
In our review and examination of the foregoing, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals and the conformity to original documents of all documents
submitted to us as certified or duplicate copies thereof. We have further
assumed that the execution and delivery of any of the foregoing have been duly
authorized by all necessary corporate actions in order to make the foregoing
valid and legally binding obligations of the parties, enforceable in accordance
with their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other similar laws, both state and
federal, affecting the enforcement of creditors' rights or remedies in general
from time to time in effect and the exercise by courts of equity powers or their
application of principles of public policy.
Factual Assumptions
-------------------
In rendering this opinion, we have made the following assumptions as to
factual matters.
1. The representations and warranties of the parties contained in the
documents listed in the section entitled DOCUMENTS EXAMINED that may
be deemed material to this opinion are all true in all material
respects as of the date hereof;
2. The representations as to factual matters of Park-Ohio, Holding Corp.
and Merger Corp. contained in one or more Representation Certificates
are all true in all material respects as of the date hereof;
3. The Merger, and all transactions related thereto or contemplated by
the Merger Agreement and the Registration Statement, shall be
consummated in accordance with the terms and conditions of the
applicable documents; and
4. The Merger will qualify as a merger under applicable state corporation
law.
<PAGE> 3
Park-Ohio Industries, Inc.
PKOH Holding Corp.
_______________________, 1998
Page 3
Limitations on Opinion
----------------------
The following limitations apply with respect to this opinion:
1. This opinion is based upon the current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), the Treasury
Regulations promulgated thereunder (including proposed Treasury
regulations), and the interpretations thereof by the Internal Revenue
Service and those courts having jurisdiction over such matters as of
the date hereof, all of which are subject to change either
prospectively or retrospectively. No opinion is rendered with respect
to the effect, if any, of any pending or future legislation or
administrative regulation or ruling that may have a bearing on any of
the foregoing.
2. We have not been asked to render an opinion with respect to any
federal income tax matters except those set forth below, nor have we
been asked to render an opinion with respect to any state or local tax
consequences of the Merger. Accordingly, this opinion should not be
construed as applying in any manner to any tax aspect of the Merger
other than as set forth below.
3. All factual assumptions set forth above are material to all opinions
herein rendered and have been relied upon by us in rendering all such
opinions. Any material inaccuracy in any one or more of the assumed
facts may nullify all or some of the conclusions stated in such
opinion.
Opinion
-------
Based upon and subject to the foregoing, it is our opinion that the Merger
will constitute a reorganization within the meaning of section 368(a)(1)(A) and
(a)(2)(E) of the Code, or a tax-free exchange under section 351 of the Code,
and that, accordingly,
1. No gain or loss will be recognized by the stockholders of Park-Ohio
upon the conversion of their shares of Park-Ohio stock into shares of
Holding Corp. stock (except for any gain or loss attributable to any
cash received pursuant to the exercise of statutory dissenters'
rights).
2. The federal income tax basis of the Holding Corp. stock received by
the stockholders of Park-Ohio for their shares of Park-Ohio stock will
be the same
<PAGE> 4
Park-Ohio Industries, Inc.
PKOH Holding Corp.
____________________, 1998
Page 4
as the federal income tax basis of the Park-Ohio stock surrendered in
exchange therefor.
3. The holding period for the Holding Corp. stock received by the
stockholders of Park-Ohio in exchange for their shares of Park-Ohio
stock will include the period for which the Park-Ohio stock exchanged
therefor was held, provided that the exchanged Park-Ohio stock was
held as a capital asset by such stockholder on the date of the
exchange.
4. A stockholder of Park-Ohio who exercises dissenter's rights under
applicable law with respect to a share of Park-Ohio stock and receives
payment for such stock in cash, will recognize capital gain or loss
(if such stock was held as a capital asset at the Effective Time)
measured by the difference between the amount of cash received and the
stockholder's basis in the such share, provided such payment is not
essentially equivalent to a dividend within the meaning of section 302
of the Code (a "Dividend Equivalent Transaction"). A stockholder of
Park-Ohio who receives only cash incident to the exercise of
dissenters' rights will generally not be treated as having engaged in
a Dividend Equivalent Transaction if such Park-Ohio stockholder owns
no Holding Corp. stock (either actually or constructively within the
meaning of section 318 of the Code) at the Effective Time.
5. No gain or loss will be recognized by Park-Ohio or Holding Corp. as a
result of the Merger.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference of our firm under the caption
"Certain Federal Income Tax Consequences" in the proxy statement/prospectus
contained therein.
Respectfully submitted,
<PAGE> 1
EXHIBIT 24
DIRECTORS AND OFFICERS OF
PKOH HOLDING CORP.
REGISTRATION STATEMENT ON FORM S-4
POWER OF ATTORNEY
The undersigned directors and officers of PKOH Holding Corp., an Ohio
corporation (the "Corporation"), do hereby constitute and appoint James S.
Walker, Ronald J. Cozean, and Patrick W. Fogarty, and each of them, with full
power of substitution and resubstitution, as attorneys-in-fact or
attorney-in-fact of the undersigned, for him/her and in his/her name, place and
stead, to execute and file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933 a Registration Statement on Form
S-4 relating to the registration for the offering and issuance of shares of
common stock of the Corporation pursuant to the merger agreement by and among
the Corporation, Park-Ohio Industries, Inc. and PKOH Merger Corp., as presented
to the Board of Directors (the "Securities"), with any and all amendments,
supplements and exhibits thereto (including pre-effective and post-effective
amendments or supplements), to execute and file any and all other applications
or other documents to be filed with the Commission and all documents required to
be filed with any state securities regulating board or commission pertaining to
such Securities registered pursuant to the Registration Statement on Form S-4,
with any and all amendments, supplements and exhibits thereto each such attorney
to have full power to act with or without the others, and to have full power and
authority to do and perform, in the name and on behalf of the undersigned, every
act whatsoever necessary, advisable or appropriate to be done in the premises as
fully and to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and approving the act of said attorneys and any of them
and any such substitute.
Executed as of February 23, 1998.
<TABLE>
<S> <C>
/s/ Edward F. Crawford /s/ James S. Walker
- ----------------------------------- ------------------------------------
Edward F. Crawford James S. Walker
President, Chief Executive Officer, Vice President, Treasurer and Chief Financial
Chairman of the Board and Director Officer
/s/ Felix J. Tarorick /s/ Ronald J. Cozean
- ----------------------------------- ------------------------------------
Felix J. Tarorick Ronald J. Cozean
Vice President of Operations Secretary and General Counsel
and Director
/s/ Matthew V. Crawford /s/ Kevin R. Greene
- ----------------------------------- ------------------------------------
Matthew V. Crawford Kevin R. Greene, Director
Assistant Secretary, Corporate Counsel
and Director
/s/ Lewis E. Hatch, Jr. /s/ Thomas E. McGinty
- ----------------------------------- ------------------------------------
Lewis E. Hatch, Jr., Director Thomas E. McGinty, Director
/s/ Lawrence O. Selhorst /s/ James W. Wert
- ----------------------------------- ------------------------------------
Lawrence 0. Selhorst, Director James W. Wert, Director
</TABLE>
<PAGE> 1
Exhibit 99
Common Stock
PARK-OHIO INDUSTRIES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
James W. Wert and Kevin R. Greene or either of them, are hereby
authorized, with full power of substitution, to represent and vote
the Common Stock of the undersigned at the annual meeting of
P shareholders of Park-Ohio Industries, Inc. (the "Company") to be
held at the Aurora High School Auditorium, 109 West Pioneer Trail,
R Aurora, Ohio, on May 28, 1998, and any and all adjournments,
postponements or continuations thereof.
O
IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED, SHARES
X REPRESENTED HEREBY WILL BE VOTED IN THE MANNER SPECIFIED BY THE
SHAREHOLDER. IF NO SPECIFICATION IS MADE, SHARES WILL BE VOTED FOR
Y 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.
<TABLE>
<S> <C>
Election of Directors, Nominees: (change of address)
Lewis E. Hatch, Jr., Thomas E. McGinty, ______________________________________
Lawrence O. Selhorst and Felix J. Tarorick ______________________________________
______________________________________
______________________________________
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card.)
</TABLE>
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES
IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN
AND RETURN THIS CARD.
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE> 2
[ X ] PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD
[ ] [ ] Director Nominees:
1. Election of Lewis E. Hatch, Jr.,
Directors Thomas E. McGinty,
(see reverse) Lawrence O. Selhorst,
Felix J. Tarorick
For, except vote withheld from the
following nominee(s):
___________________________________
FOR AGAINST ABSTAIN
2. Adoption of Merger Agreement [ ] [ ] [ ]
and approval of Reorganization
FOR AGAINST ABSTAIN
3. Approval of 1998 Long-Term Incentive Plan [ ] [ ] [ ]
FOR AGAINST ABSTAIN
4. Ratification of appointment of Ernst & Young [ ] [ ] [ ]
as independent auditors.
5. The Proxies are authorized, in their discretion, to vote upon such other
business as may properly come before the meeting or any adjournment,
postponement or continuation thereof.
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> 3
Common Stock
PARK-OHIO INDUSTRIES, INC.
V CONFIDENTIAL VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD
O OF DIRECTORS
T
I To Key Trust Company of Ohio, N.A., Trustee of the Individual
N Account Retirement Plan of Park-Ohio Industries, Inc. and Its
G Subsidiaries (the "Plan"): The undersigned, a participant in the
Plan, hereby directs the Trustee to vote in person or by proxy (a)
I all common shares of Park-Ohio Industries, Inc. credited to the
N undersigned's account under the Plan on the record date ("allocated
S shares"); and (b) the proportionate number of common shares of
T Park-Ohio Industries, Inc. allocated to the accounts of other
R participants in the Plan, but for which the Trustee does not
U receive valid voting instructions ("non-directed shares") and as to
C which the undersigned is entitled to direct the voting in
T accordance with the Plan provisions. Under the Plan, shares
I allocated to the accounts of participants for which the Trustee
O does not receive timely directions in the form of a signed voting
N instruction card are voted by the Trustee as directed by the
S participants who timely tender a signed voting instruction card. By
completing this Confidential Voting Instruction Card and returning
it to the Trustee, you are authorizing the Trustee to vote
allocated shares and a proportionate amount of the non-directed
shares held in the Plan. The number of non-directed shares for
which you may instruct the Trustee to 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.
<TABLE>
<S> <C>
Election of Directors, Nominees: (change of address)
Lewis E. Hatch, Jr., Thomas E. McGinty, ______________________________________
Lawrence O. Selhorst and Felix J. Tarorick ______________________________________
_____________________________________
_____________________________________
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card.)
</TABLE>
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE> 4
[ X ] PLEASE MARK YOUR SHARES HELD FOR YOU
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD
[ ] [ ] Director Nominees:
1. Election of Lewis E. Hatch, Jr.,
Directors Thomas E. McGinty,
(see reverse) Lawrence O. Selhorst,
Felix J. Tarorick
For, except vote withheld from the
following nominee(s):
___________________________________
FOR AGAINST ABSTAIN
2. Adoption of Merger Agreement [ ] [ ] [ ]
and approval of Reorganization
FOR AGAINST ABSTAIN
3. Approval of 1998 Long-Term Incentive Plan [ ] [ ] [ ]
FOR AGAINST ABSTAIN
4. Ratification of appointment of Ernst & Young [ ] [ ] [ ]
as independent auditors.
5. The Proxies are authorized, in their discretion, to vote upon such other
business as may properly come before the meeting or any adjournment,
postponement or continuation thereof.
Change [ ]
of
Address IMPORTANT -- THIS CARD MUST
BE SIGNED AND DATED.
Attend [ ]
Meeting
SIGNATURE _________________________________________________ DATE _____________
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE> 5
Common Stock
PARK-OHIO INDUSTRIES, INC.
V CONFIDENTIAL VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD
O OF DIRECTORS
T
I Elizabeth A. Boris, Ronald J. Cozean, and James S. Walker, or any
N of them, Trustees of RB&W Corporation Employee Stock Ownership Plan
G (the "Plan"), are hereby authorized, with full power of
substitution, to represent and vote the Common Stock of the
undersigned Plan Participant at the annual meeting of shareholders
I of Park-Ohio Industries, Inc. (the "Company") to be held at the
N Aurora High School Auditorium, 109 West Pioneer Trail, Aurora,
S Ohio, on May 28, 1998, and any and all adjournments, postponements
T or continuations thereof.
R
U IF THIS CONFIDENTIAL VOTING INSTRUCTION CARD IS PROPERLY
C EXECUTED AND RETURNED, SHARES REPRESENTED HEREBY WILL BE VOTED IN
T THE MANNER SPECIFIED BY THE PLAN PARTICIPANT. IF NO SPECIFICATION
I IS MADE, SHARES WILL BE VOTED FOR THE ELECTION OF THE PERSONS
O NOMINATED AS DIRECTORS PURSUANT TO THE PROXY STATEMENT AND FOR THE
N OTHER PROPOSALS INDICATED. IN THE EVENT OF CUMULATIVE VOTING FOR
S DIRECTORS, UNLESS OTHERWISE INDICATED BY THE UNDERSIGNED, A VOTE
FOR THE NOMINEES LISTED WILL GIVE THE TRUSTEES 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 TRUSTEES DETERMINE.
<TABLE>
<S> <C>
Election of Directors, Nominees: (change of address)
Lewis E. Hatch, Jr., Thomas E. McGinty, Lawrence O. Selhorst _____________________________________
and Felix J. Tarorick _____________________________________
_____________________________________
_____________________________________
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card.)
</TABLE>
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE
YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE> 6
[ X ] PLEASE MARK YOUR SHARES HELD FOR YOU
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD
[ ] [ ] Director Nominees:
1. Election of Lewis E. Hatch, Jr.,
Directors Thomas E. McGinty,
(see reverse) Lawrence O. Selhorst,
Felix J. Tarorick
For, except vote withheld from the
following nominee(s):
__________________________________
FOR AGAINST ABSTAIN
2. Adoption of Merger Agreement [ ] [ ] [ ]
and approval of Reorganization
FOR AGAINST ABSTAIN
3. Approval of 1998 Long-Term Incentive Plan [ ] [ ] [ ]
FOR AGAINST ABSTAIN
4. Ratification of appointment of Ernst & Young [ ] [ ] [ ]
as independent auditors.
5. The Proxies are authorized, in their discretion, to vote upon such other
business as may properly come before the meeting or any adjournment,
postponement or continuation thereof.
Change [ ]
of
Address IMPORTANT -- THIS CARD MUST
BE SIGNED AND DATED.
Attend [ ]
Meeting
SIGNATURE _________________________________________________ DATE _____________
- --------------------------------------------------------------------------------
DETACH CARD
