<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Confidential, for use of the commission only (as permitted by rule
14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to section 240.14a-11(c) or section 240.14a-12
SHOPSMITH, INC.
------------------------------------------------
(name of registrant as specified in its charter)
------------------------------------------------
(name of person(s) filing proxy statement if other than the registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per exchange act rules 14a-6(i)(4) and 0-11.
(1) title of each class of securities to which transaction applies:
-----------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to exchange act rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
<PAGE> 2
[ ] Check box if any part of the fee is offset as provided by exchange act
rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) amount previously paid:
-----------------------------------------------------------------
2) form, schedule or registration statement no.:
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3) filing party:
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4) date filed:
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SHOPSMITH, INC.
6530 Poe Avenue
Dayton, Ohio 45414
==================
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 29, 1998
The Annual Meeting of Shareholders of Shopsmith, Inc. will be held at
the offices of the Company, 6530 Poe Avenue, Dayton, Ohio at 9:30 a.m. on
Wednesday, July 29, 1998 for the following purposes:
1. To elect three directors to serve for a term of two years.
2. To approve the appointment of independent public accountants for the
Company.
3. To transact such other business as may properly come before the
meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on June 19, 1998
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting and at any adjournment thereof.
WE HOPE THAT YOU WILL BE ABLE TO ATTEND THE MEETING. WHETHER OR NOT YOU
PLAN TO ATTEND, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED.
By Order of the Board of Directors
J. Michael Herr
Secretary
Dayton, Ohio
June 25, 1998
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SHOPSMITH, INC.
PROXY STATEMENT
June 25, 1998
Mailing Date
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Shopsmith, Inc., an Ohio corporation (the
"Company"), of proxies to be used at the Annual Meeting of Shareholders to be
held at the principal executive offices of the Company, 6530 Poe Avenue, Dayton,
Ohio at 9:30 a.m. on Wednesday, July 29, 1998.
The close of business on June 19, 1998 has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the meeting. The Company has one class of shares outstanding, namely Common
Shares, of which 2,610,375 were outstanding at the close of business on the
record date. Each share entitles the holder thereof to one vote.
All shares represented by properly executed proxies will be voted in
accordance with the shareholder's directions specified on the proxy. Unless
otherwise directed by the giver of the proxy, all proxies will be voted for the
election of Messrs. John R. Folkerth, J. Michael Herr and Edward A. Nicholson as
directors of the Company; in favor of the approval of the appointment of Crowe,
Chizek and Company as independent public accountants for the Company; and, at
the discretion of the persons acting under the proxy, in the transaction of such
other business as may properly come before the meeting and any adjournment
thereof. A shareholder signing and returning a proxy has the power to revoke it
at any time prior to its exercise by giving notice of revocation to the Company
in writing or in open meeting, but without affecting any vote previously taken.
Abstentions and broker non-votes will be included in the determination
of the number of shares represented at the meeting, but will not count as votes
in the election of directors.
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Abstentions and broker non-votes will have the effect of votes against the
proposal to approve the Company's independent public accountants.
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into one class of three
directors and one class of four directors. The term of office of each class is
two years, and one class is elected at each Annual Meeting. Of the seven Board
positions, three make up the Class of 1998 (whose term of office expires at this
Annual Meeting) and four make up the Class of 1999.
At the 1998 Annual Meeting, three directors will be elected to the
Class of 2000 and will hold office until the 2000 Annual Meeting of
Shareholders. Should any of the nominees for election as members of the Class of
2000 become unavailable for election, the proxies solicited hereby will be voted
for a substitute nominee designated by the Board of Directors.
Set forth below is information with respect to each nominee for
election as a director and each director whose term of office continues after
the 1998 Annual Meeting.
Class of 2000
- -------------
Nominees to be Elected for a Term Expiring in 2000:
JOHN R. FOLKERTH, 65, is the founder and the President of the Company
and has been a director and the Chief Executive Officer of the Company
since 1972. Mr. Folkerth has also been Chairman of the Board since
1986.
J. MICHAEL HERR, 54, has been a director of the Company since 1975 and
Secretary since 1985. Mr. Herr has been a member of the law firm of
Thompson Hine & Flory LLP, Dayton, Ohio since 1989. Thompson Hine &
Flory LLP serves as counsel to the Company.
EDWARD A. NICHOLSON, 58, has been a director of the Company since 1984.
Dr. Nicholson has been the President of Robert Morris College in
Coraopolis, Pennsylvania since 1989. From 1987 to 1989, Dr. Nicholson
was a Professor and Executive Vice President of Academic and Student
Affairs at Lamar University in Beaumont, Texas. From 1980 to 1987, he
was Vice Chancellor and a Professor of Business Administration
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and Public and Environmental Affairs at Indiana University - Purdue
University at Fort Wayne. Dr. Nicholson is also an independent
management consultant.
Class of 1999
- -------------
Directors Continuing in Office until 1999:
ROBERT L. FOLKERTH, 41, has been a director of the Company since
November 1994 and its Vice President of Sales and Marketing since 1996.
Mr. Folkerth was a Corporate Vice President and Secretary of Digitron,
Inc. from 1991 until 1996. Robert L. Folkerth is the son of John R.
Folkerth.
JOHN L. SCHAEFER, 63, has been a director of the Company since 1983.
From 1986 until his retirement in 1990, Mr. Schaefer was Vice President
of The James River Corporation, a forest products company. Mr. Schaefer
was Chairman of the Board and President of The Specialty Papers
Company, a manufacturer of flexible packaging material, from 1968 until
1986 when Specialty Papers was acquired by James River.
BRADY L. SKINNER, 47, has been a director of the Company since 1995.
Since January 1997, Mr. Skinner has been associated with the Dayton,
Ohio-based accounting firm of Brady, Ware & Schoenfeld, Inc. Mr.
Skinner was self-employed as an accountant from June 1996 through
December 1996. From 1994 to June 1996, Mr. Skinner was an Audit Partner
with the Dayton, Ohio-based accounting firm of Flagel, Huber, Flagel &
Co. He was an Audit Partner in the accounting firm of Coopers and
Lybrand L.L.P. from 1983 to 1994. He is also President of Ken Anderson
Beverage Co.
RICHARD L. SNELL, 63, has been a director of the Company since 1974.
Since 1976, Mr. Snell has been the Chief Executive Officer of Tipp
Machine & Tool, Inc., a tool and die manufacturing company located in
Tipp City, Ohio. Mr. Snell is also a director of Tipp Machine & Tool,
Inc. and a Vice President and director of Automotive Tech, Inc.
Directors are elected by a plurality of the votes cast. Under the
statutes of Ohio, if any shareholder gives notice in writing to the President, a
Vice President or the Secretary of the Company, not less than 48 hours before
the time fixed for holding the Annual Meeting, that such shareholder desires the
voting at the election of directors to be cumulative, an announcement of the
giving of such notice will be made upon the convening of the meeting and
thereupon each shareholder will have the right to cumulate his/her voting power
in the election of directors. Under cumulative voting, each shareholder is
entitled to give one candidate as many votes as the
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number of directors to be elected multiplied by the number of his/her shares, or
to distribute his/her votes on the same principle among two or more candidates,
as he/she sees fit. In the event that directors are elected by cumulative voting
and cumulated votes represented by proxies solicited hereby are insufficient to
elect all the nominees named herein, the holders of the proxies will vote such
proxies cumulatively for the election of as many of such nominees as possible
and in such order as the holders of the proxies may determine.
Information Concerning the Board of Directors
- ---------------------------------------------
There are two committees of the Board, an Audit Committee and a
Compensation Committee. Messrs. Schaefer, Skinner and Snell serve as members of
the Audit Committee, and Messrs. Herr, Nicholson and Schaefer serve as members
of the Compensation Committee. Mr. Skinner is Chairman of the Audit Committee,
and Mr. Schaefer is Chairman of the Compensation Committee.
The Audit Committee recommends annually to the Board the engagement of
independent public accountants and reviews the scope of and the results of the
annual audit. The Committee also reviews and investigates such other matters
relative to financial and accounting matters as the Committee deems appropriate.
The Compensation Committee has the broad responsibility of recommending
to the Board a compensation program designed to effectively compensate the
officers and key management personnel of the Company in a manner that is
internally equitable and externally competitive. The Committee also administers
the Company's employee stock option plans and consults with the Chief Executive
Officer concerning management succession planning.
During the fiscal year ended April 4, 1998, there were four meetings of
the Board of Directors, three meetings of the Audit Committee, and three
meetings of the Compensation Committee. Each director, other than Messrs.
Skinner and Snell, attended at least 75% of the meetings of the Board and of the
committees, if any, on which he served. Non-employee directors receive a fee of
$700 per month for services as a director.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
Set forth in the table below is information as of May 5, 1998 with
respect to the number of Common Shares of the Company beneficially owned by each
director and executive officer of the Company and by all directors and executive
officers as a group.
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For purposes of this table, an individual is considered to
"beneficially own" any Common Shares (i) over which he exercises sole or shared
voting or investment power, or (ii) of which he has the right to acquire
beneficial ownership at any time within 60 days after May 5, 1998. Unless
otherwise indicated, voting power and investment power is exercised solely by
the named individual or individuals in the group or is shared by such individual
and his spouse or children.
<TABLE>
<CAPTION>
Number of Shares Total as a
Individual or Beneficially Owned Percentage of the
Group as of May 5, 1998 Class (a)
--------------- --------------------- -------------------
<S> <C> <C>
William C. Becker (b) 62,905(c)(d)(e) 2.4%
John R. Folkerth (b) 598,165 (d)(e) 22.4%
Robert L. Folkerth (b) 168,222(d)(e) 6.3%
J. Michael Herr 1,200 (f)
Edward A. Nicholson 100 (f)
John L. Schaefer 25,257(g) (f)
Brady L. Skinner 5,000 (f)
Richard L. Snell 30,507(g) 1.1%
Directors and
Executive Officers
as a Group
(8 persons) 891,356(c)(d) 31.9%
<FN>
- ------------------------
(a) The percentages are calculated on the basis of the number of Common
Shares outstanding as of May 5, 1998 plus the number of Common Shares subject to
outstanding options exercisable within 60 days thereafter that are held by the
individual or group, as the case may be.
(b) The business address of John R. Folkerth, Robert L. Folkerth and
William C. Becker is 6530 Poe Avenue, Dayton, Ohio 45414.
</FN>
</TABLE>
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(c) Includes 150 shares held jointly with a relative of Mr. Becker.
(d) Includes 34,250, 60,000, 43,334 and 185,098 shares that may be
acquired at any time within 60 days after May 5, 1998 by William C. Becker, John
R. Folkerth, Robert L. Folkerth, and by all directors and executive officers as
a group, respectively, upon the exercise of options granted under the Company's
Stock Option Plans.
(e) The table includes 14,246, 7,255, 291 and 21,792 shares held in the
Company's Savings Plan for the benefit of John R. Folkerth, Robert L. Folkerth,
William C. Becker and all directors and executive officers as a group,
respectively. The Savings Plan's participants have the right to vote shares held
for their accounts, but disposition of the shares is restricted and may be made
only in accordance with the terms of the Plan. Information with respect to
shares held in the Savings Plan is as of April 4, 1998.
(f) Less than 1.0%.
(g) Includes 23,757 shares that may be acquired at any time within 60
days after May 5, 1998 by each of Messrs. Schaefer and Snell under the Company's
1988 Director Option Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Federal securities laws require the Company's directors and officers
and persons who own more than 10% of the outstanding Common Shares of the
Company to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and to furnish the Company with copies of all
such reports. Based solely upon the Company's review of the copies of these
reports received by it and written representations that no other reports were
required to be filed, the Company believes that, during the fiscal year ended
April 4, 1998, all filing requirements applicable to its directors, officers and
greater than 10% shareholders were met.
EXECUTIVE COMPENSATION
Summary Compensation Table
- --------------------------
The following table sets forth certain summary information concerning
the compensation of John R. Folkerth, Chairman, President and Chief Executive
Officer, and William C. Becker, Vice President of Finance and Treasurer, during
the last three fiscal years. The table also sets forth certain summary
information concerning the compensation of Robert L. Folkerth, Vice President of
Sales and Marketing, during the period from the commencement of his employment
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with the Company in April 1996 through the remainder of fiscal 1997 and for all
of fiscal 1998. The named individuals are the only executive officers of the
Company.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
------------------- -------------
Securities All Other
Underlying Compensation
Name and Principal Position Year Salary($) Bonus($) Options (#) ($)(1)(2)(3)
- --------------------------- ---- --------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
John R. Folkerth, Chairman, 1998 $150,000 $125,000 28,000 $ 8,834
President and Chief Executive
Officer 1997 150,000 150,000 -0- 13,250
1996 150,000 100,000 -0- 6,537
Robert L. Folkerth, Vice 1998 96,332 22,373 22,000 1,353
President of Sales and
Marketing 1997 80,686 (4) 27,688 60,000 814
William C. Becker, Vice 1998 95,212 22,066 22,000 2,653
President of Finance and
Treasurer 1997 90,870 29,823 -0- 3,555
1996 87,342 21,710 -0- 2,922
</TABLE>
(1) Includes, for 1998, 1997 and 1996, respectively, $3,334, $2,250 and
$1,037 representing the Company's 401(k) plan contributions made on behalf of
Mr. John R. Folkerth, and $5,500, $11,000 and $5,500 for 1998, 1997 and 1996,
respectively, representing the whole life insurance premiums paid by the Company
for insurance benefitting Mr. Folkerth.
(2) Includes, for 1998, 1997 and 1996, respectively, $1,570, $1,824 and
$1,404 representing the Company's 401(k) plan contributions made on behalf of
Mr. Becker, and $1,083, $1,731 and $1,518 for 1998, 1997 and 1996, respectively,
representing the whole life insurance premiums paid by the Company for insurance
benefitting Mr. Becker.
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(3) Includes $1,353 and $814 representing the Company's 401(k) plan
contributions made on behalf of Mr. Robert L. Folkerth in 1998 and 1997,
respectively.
(4) Mr. Robert L. Folkerth joined the Company shortly after the
beginning of the 1997 fiscal year. His initial salary was at the annual rate of
$88,140.
Stock Options
- -------------
The following table contains information concerning the grant of stock
options to the Company's executive officers during the fiscal year ended April
4, 1998. No stock appreciation rights were granted during the fiscal year.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
---------------------------------------------------------------- Potential Realizable Value at
Number of % of Total Assumed Annual Rates of Stock
Securities Options Price Appreciation for
Underlying Granted to Option Term
Options Employees in Exercise Price ------------------------------
Name Granted (#) Fiscal Year ($/Sh) Expiration Date 5%($) 10%($)
- ---- ----------- ----------- ------ --------------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
John R. Folkerth 28,000(1) 20.0% $3.17 7/29/02 $14,000 $41,160
Robert L. Folkerth 22,000(1) 15.7% $3.17 7/29/02 $11,000 $32,340
William C. Becker 22,000(1) 15.7% $2.88 7/29/07 $25,520 $60,060
- ----------------
<FN>
(1) The option is exercisable in three equal annual installments in
July 1998, 1999 and 2000. The exercisability of each installment of the option
is dependent upon the Company meeting certain pre-tax earnings performance
thresholds in the fiscal year last preceding the date upon which the installment
first becomes exercisable The Company did not meet the performance standard for
this fiscal year ended April 4, 1998 and consequently, one-third of the options
granted terminated.
</FN>
</TABLE>
The following table sets forth information concerning unexercised
options held by Messrs. John R. Folkerth, Becker and Robert L. Folkerth as of
April 4, 1998. No options were exercised by any of them during the fiscal year
ended April 4, 1998.
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<TABLE>
<CAPTION>
FISCAL YEAR-END OPTION TABLE
Number of Securities Underlying Value of Unexercised In-the-
Unexercised Options at April 4, 1998 Money Options at April 4, 1998
------------------------------------ ------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
John R. Folkerth 60,000 18,667 $23,600 -0-
Robert L. Folkerth 43,334 31,333 $32,867 $12,333
William C. Becker 34,250 14,667 $18,880 -0-
</TABLE>
REPORT OF COMPENSATION COMMITTEE
CONCERNING EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is comprised of
John L. Schaefer, Chairman, J. Michael Herr and Edward A. Nicholson. The duties
of the Compensation Committee include fixing (or making recommendations to the
full Board with respect to) the salaries of executive officers, administering
the Company's option plans, and making recommendations to the full Board with
respect to annual incentive compensation programs.
The approach of the Compensation Committee to executive compensation
during the last several years has been generally to keep base salary levels
relatively steady with selective adjustments, and to provide performance-related
incentives through cash incentive compensation plans and stock options. The cash
incentive compensation plans have been designed so that incentive awards are
tied directly to pre-tax earnings. Stock options are also performance-related in
that the value of the options is tied to increases in shareholder value which is
in turn reflective of performance. Furthermore, as more fully discussed below,
most of the stock options granted during the last several years have conditioned
exercisability upon achievement of certain earnings thresholds.
Salaries of executive officers are reviewed annually. Effective as of
April 1995, Mr. John R. Folkerth's salary was fixed at $150,000. At its 1996 and
1997 reviews of executive officer salaries, the Compensation Committee continued
Mr. Folkerth's salary at the $150,000 level. The salaries of the other executive
officers were increased 3.9% at the 1996 review and 5% at the 1997 review. The
salary of Robert L. Folkerth was further adjusted in November 1997 in
recognition of additional responsibilities assumed by Mr. Folkerth.
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Although, except as noted below, there has been no specific
relationship between the salaries of executive officers and the Company's
performance, the Compensation Committee and the Board of Directors do consider
that performance in setting executive salaries. With specific reference to Mr.
John R. Folkerth's salary, the primary factor in fixing his salary has been his
historical salary level.
For each of the fiscal years ended March 30, 1996, April 5, 1997, and
April 4, 1998, the Board adopted incentive compensation plans under which cash
bonuses could be earned by executive officers and other key employees. The
threshold for payment of bonuses for each year was pre-tax earnings of $500,000.
Under the terms of the plans, bonuses increase as earnings increase although the
relationship is not directly proportional.
The Compensation Committee has exercised discretionary authority over
bonuses payable to Mr. John R. Folkerth for each of the last several fiscal
years. After the end of fiscal 1997, the Committee awarded to Mr. Folkerth a
bonus of $150,000 for that year. The percentage increase in Mr. Folkerth's total
cash compensation from fiscal 1996 to fiscal 1997 approximated the year-to-year
percentage increase in the Company's earnings before taxes and extraordinary
items. After the end of fiscal 1998, the Committee awarded to Mr. Folkerth a
bonus of $125,000 for that year. The percentage decrease in Mr. Folkerth's total
cash compensation from fiscal 1997 to fiscal 1998 approximated the year-to-year
percentage decrease in the Company's pre-tax earnings.
The Compensation Committee has made use of stock options as an element
of executive compensation. The purchase price under stock options granted by the
Committee has been not less than the fair market value of a Common Share of the
Company on the date of grant.
In July 1997, the Compensation Committee awarded options covering a
total of 135,000 shares to seven management employees, including an award of
28,000 shares to Mr. John R. Folkerth. The options are exercisable in three
equal annual installments in July 1998, 1999 and 2000. Exercisability of each
installment of the option is dependent upon the Company meeting certain pre-tax
earning performance thresholds in the fiscal year last preceding the date upon
which the installment first becomes exercisable. The Company did not meet the
performance standard (for fiscal 1998) applicable to exercise of the first
installment of the options.
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A separate option award, not involving performance conditions, was made
to one other management employee during the fiscal year ended April 4, 1998.
John L. Schaefer, Chairman
J. Michael Herr
Edward A. Nicholson
COMPANY STOCK PERFORMANCE GRAPH
The graph that follows compares the Company's cumulative total return
to shareholders for the five-year period ended April 4, 1998 with the Total
Return Index for The Nasdaq Stock Market (US Companies) and the Total Return
Index for Nasdaq Retail Trade Stocks for such five-year period. The graph
assumes that $100 was invested on April 3, 1993 in the Company's Common Shares
and in each of the two indexes and that dividends were reinvested.
<TABLE>
<CAPTION>
04/03/93 04/02/94 04/01/95 03/30/96 04/05/97 04/04/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Shopsmith Inc. 100.0 73.7 47.4 71.0 100.0 113.1
NASDAQ US 100.0 111.3 123.8 168.1 188.9 286.3
NASDAQ Retail 100.0 106.0 103.9 130.2 131.6 196.4
</TABLE>
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
At the recommendation of the Audit Committee of the Board of Directors,
the full Board has appointed Crowe, Chizek and Company as independent public
accountants for the Company for the fiscal year ending April 3, 1999. It is
intended that the persons acting under the
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accompanying proxy will vote the shares represented thereby in favor of the
approval of such appointment.
It is anticipated that representatives of Crowe, Chizek will be present
at the Annual Meeting of Shareholders to respond to appropriate questions and to
make a statement if such representatives so desire.
OTHER MATTERS
The Board of Directors does not know of any other matters or business
that may be brought before the meeting. If any such other matter or business
should properly come before the meeting and any adjournment thereof, it is
intended that the persons acting under the accompanying proxy will vote the
shares represented thereby at their discretion.
The cost of preparing, assembling and mailing this Proxy Statement and
the accompanying Proxy is to be borne by the Company. The Company may, upon
request, reimburse banks, brokerage houses and other institutions for their
expenses in forwarding proxy materials to their principals. Proxies may be
solicited personally or by telephone by directors, officers and employees of the
Company, none of whom will receive additional compensation therefor.
SHAREHOLDERS' PROPOSALS
A proposal by a shareholder that is intended for inclusion in the
Company's Proxy Statement and form of Proxy for the 1999 Annual Meeting of
Shareholders must be received by the Company at 6530 Poe Avenue, Dayton, Ohio
45414, Attention: Secretary, on or before February 26, 1999 in order to be
eligible for inclusion.
Dayton, Ohio
June 25, 1998
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<PAGE> 16
SHOPSMITH, INC.
PROXY FOR ANNUAL MEETING
OF SHAREHOLDERS - JULY 29, 1998
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY
The undersigned hereby appoints John R. Folkerth and Richard L. Snell, and
each or either of them, attorneys and proxies, with power of substitution and
with all the powers the undersigned would possess if personally present, to vote
all of the Common Shares of Shopsmith, Inc. that the undersigned is entitled to
vote at the Annual Meeting of Shareholders to be held at 9:30 a.m. on Wednesday,
July 29, 1998, at the offices of the Company, 6530 Poe Avenue, Dayton, Ohio, and
at any adjournment thereof, as follows:
Election of directors.
_ FOR all nominees listed below (except as _ WITHHOLD AUTHORITY to vote
marked to the contrary below) for all nominees listed below:
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME BELOW:
JOHN R. FOLKERTH J. MICHAEL HERR EDWARD A. NICHOLSON
Approval of the appointment of Crowe, Chizek and Company as independent public
accountants for the Company.
_ FOR _ AGAINST _ ABSTAIN
The proxies are authorized to vote at their discretion upon such other business
as may properly come before the meeting.
(Continued and to be signed on the other side)
FOLD AND DETACH HERE
(Continued from the other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
Date_______________________________, 1998
--------------------------------------
--------------------------------------
Signature(s) of Shareholder(s)
Please sign as name(s) appear at left.
Executors, trustees, etc. should indicate the
capacity in which they sign.
SHOPSMITH , INC.
C/o Corporate Trust Services
Mail Drop 1090F5
38 Fountain Square Plaza
Cincinnati, OH 45263
