We view these various components of compensation as related but distinct. Although our Compensation Committee does review total compensation, we do not believe that significant compensation derived from one component of compensation should negate or reduce compensation from other components. The appropriate level for each compensation component is based in part, but not entirely, on our view of internal equity and consistency, and other considerations we deem relevant, such as rewarding extraordinary performance. Our Compensation Committee has not adopted any formal or informal policies or guidelines for allocating compensation between long-term and currently paid-out compensation, between cash and non-cash compensation or among different forms of non-cash compensation.
Base Salary
We pay base salaries to recognize each executive officer’s unique value and skills, competencies and experience in light of the executive’s position. Base salaries, including any annual or other adjustments, for our executive officers, other than our CEO, are determined after taking into account recommendations by our CEO. Base salaries for all executive officers are determined by the Compensation Committee after considering such factors as competitive industry salaries, a subjective assessment of the nature of the executive officer’s position, the executive officer’s unique value and historical contributions and the experience and length of the service of the executive officer. For 2006, the only significant increase in base salary for our executive officers was for our COO, whose base salary increased 27% to reflect an increase in the scope and influence of his position and responsibilities, his individual performance and external market conditions. Adjustments to base paysalaries are generally considered during the first quarter of each year and, if made, are effective retroactively to the beginning of the year. For 2007, there were no significant increases in base salaries for our executive officers.officers remained the same from 2006, other than for our Secretary and General Counsel, who received an increase of approximately 4% for 2007.
Annual Bonus
Annual bonuses are used to reward our executive officers for achieving key financial and operational objectives, to motivate certain desired individual behaviors and to reward superior individual achievements. Bonus awards for our executive officers, other than for our CEO, are determined by the Compensation Committee after taking into account recommendations by our CEO. The annual bonus awards, other than for our CEO, are fully discretionary and are based on subjective criteria in light of all relevant factors.
We have established the Bonus Plan, which was approved by our shareholders in 2006, for our CEO and any other executive officer selected by the Compensation Committee to participate in the Bonus Plan. The Bonus Plan includes a set of performance measures that can be used to establish the bonus award. Under the Bonus Plan, our CEO or any other selected executive officer is eligible to receive an annual cash bonus depending on the performance of our company against specific performance measures established by the Compensation Committee before the end of the first quarter of each year. For 2006,2007, only our CEO participated in the Bonus Plan and the Compensation Committee selected consolidated adjusted net income before income taxes as the performance measure for our CEO. For 2006,2007, our CEO was entitled to a bonus award equal to 4% of consolidated adjusted net income.income before income taxes. Under the Bonus Plan, the Compensation Committee is authorized to exercise negative discretion and reduce our CEO’s award, but did not do so for 2006.2007.
For 2007, theThe Compensation Committee has established that the performance measure for our CEO under the Bonus Plan for each of 2008, 2009 and 2010 will be 4% of our consolidated income before income taxes. The
10
Compensation Committee believes income before income taxes is an appropriate measure of our core operating performance and directly links our CEO’s annual bonus award to our profitability.
For 2006, our COO was eligible to receive a maximum bonus award of up to 100% of his annual base salary based upon achieving performance objectives. For 2006, these performance objectives related to our profitability, treasury operations, investor relations, strategic planning and corporate development. The achievement of theses objectives by our COO was based on the subjective assessment of the Compensation Committee.
For our other named executive officers, the 20062007 bonus awards were determined by the Compensation Committee, after considering recommendations from our CEO and after taking into account individual performance and our profitability. Information about bonuses paid to our executive officers is contained in the “Summary Compensation Table.”
10
Equity Compensation
We use the grant of equity awards under our 1998 Plan to provide long-term incentive compensation opportunities, which align the executives’ interests with those of our shareholders, and to attract and retain executive officers.
Our Compensation Committee administers our 1998 Plan. Historically, the Compensation Committee has granted options and restricted shares under our 1998 Plan. Other than for grants of equity awards to our CEO, the Compensation Committee typically considers recommendations from our CEO when considering decisions regarding the grant of equity awards to executive officers. The Compensation Committee grants equity awards based on a number of criteria, including the relative rank of the executive officer and the executive’s historical and ongoing contributions to our success based on subjective criteria. There is no set formula for the granting of equity awards to executive officers.
We do not have any program, plan or obligation that requires us to grant equity awards on specific dates. We have not made equity grants in connection with the release or withholding of material, non-public information. Options granted under our 1998 Plan have exercise prices equal to the closing market price of our stockCommon Stock on the day of the grant.
In 2006, the Compensation Committee made awards of restricted shares to our CEO and our COO. The Compensation Committee considered the market survey and peer group data provided by Watson Wyatt in determining the value of the equity awards. The Compensation Committee determined the target value of each equity award should be near the median level for long-term equity compensation of our peer group. Information regarding theseFor 2007, no equity awards grantedwere made to our CEO or our COO. Equity awards were granted in 2007 to our other executive officers and COOinformation about such awards is contained in the “2006“2007 Grants of Plan-Based Awards” table. Information about outstanding equity awards granted to our executive officers is contained in the “Outstanding Equity Awards at December 31, 2006”2007” table.
OtherRetirement Benefits
We also provide other executive benefits that we consider necessary in order to offer fully-competitive opportunities to attract and retain our executive officers. These benefits include life insurance, company carsOur Individual Account Retirement Plan, or car allowances and club dues. Executive officers are eligible to participate in all of our employee benefit plans, such as the 401(k) Plan, is a tax-qualified retirement savings plan and medical, dental, group life, disability and accidental death and dismemberment insurance,that permits our employees, including our executive officers, to defer a portion of their annual salary to the 401(k) Plan on a before-tax basis. Our executive officers participate in each casethe 401(k) Plan on the same basis as all other employees.salaried employees whereby we annually contribute 2% of their salary into the 401(k) Plan on their behalf, subject to Internal Revenue Code limitations. Our executive officers vest in the company contributions ratably over six years of employment service, at which time they are 100% vested.
TerminationFor 2008, the Compensation Committee established a non-qualified defined contribution plan and a non-qualified defined benefit plan for our CEO. These retirement benefits are intended to reward him for his past service to the company, to recognize, over the long term, future service to the company, and to provide a total compensation and benefit package that is at, or above, the median for total compensation for our peer group.
The defined contribution plan, or DC Plan, provides our CEO with an annual credit of Employment$375,000, or DC Benefit, during the seven-year period beginning on January 1, 2008 and Changeending on December 31, 2014. The DC Benefit is credited to an account on our books for our CEO, provided he has not had a termination of Control Arrangementsemployment with the company, as defined in the DC Plan. Our CEO is at all times 100% vested in the DC Benefit. The amount credited under the DC Plan for our CEO will be paid upon his termination of employment.
The defined benefit plan, or DB Plan, provides our CEO with an annual retirement benefit, or DB Benefit, of up to $375,000 upon his termination of employment with the company, as defined in the DB Plan. The annual DB Benefit that our CEO actually receives depends on his years of credited service with the company as of his termination of employment. If he has 20 or more years of credited service, he will receive the full $375,000 annual DB Benefit. If our CEO has attained less than 20 years of credited service as of his termination of employment, he will receive an annual DB Benefit that is reduced proportionately. As of December 31, 2007, our CEO has 13 years of credited service with the company. If our CEO dies while employed by the company, his spouse is entitled to receive an amount equal to 50% of the amount our CEO would have been entitled to receive on the date of his death payable annually for the life of his spouse.
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Deferred Compensation
The company maintains a non-qualified deferred compensation plan that allows certain employees, including our executive officers, to defer a percentage of their salary, to be paid at a time specified by the participant and consistent with the terms of the plan. For 2007, none of our executive officers participated in the non-qualified deferred compensation plan.
Termination-Related Payments
All of our executive officers areemployees-at-will and, as such, do not have employment agreements with us. Therefore, we are not obligated to provide any post-employment compensation or benefits. However, upon a change of control, as defined in the 1998 Plan, all unvested stock option grants become fully exercisable and all outstanding restricted share grants fully vest.
Other Benefits
We also provide other benefits to our executive officers that we consider necessary in order to offer fully-competitive opportunities to attract and retain our executive officers. These benefits include life insurance, company cars or car allowances, executive physicals, and club dues. Executive officers are eligible to participate in all of our employee benefit plans, such as the 401(k) Plan and medical, dental, group life, disability and accidental death and dismemberment insurance, in each case on the same basis as other employees.
Accounting and Tax Treatment
We account for equity compensation paid to our employees under the rules of Financial Accounting Standards Board Statement No. 123 (revised 2004),“Share-Based “Share-Based Payment,” or FAS 123R, which require us to estimate and record an expense over the service period of the award. Accounting rules also require us to record cash compensation as an expense at the time the obligation is accrued.
As part of its role, the Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code, which generally disallows a tax deduction to public corporations for compensation over $1,000,000 paid for any fiscal year to a company’s CEO and fourcertain other most highly-compensated executive officers as of the end of any fiscal year. However, the statute exempts qualifying performance-based compensation from the deduction limit if certain requirements are met.
The Compensation Committee believes that it is generally in our best interest to attempt to structure performance-based compensation, including annual bonuses, to executive officers who may be subject to Section 162(m) in a manner that satisfies the statute’s requirements. However, the Compensation Committee also
11
recognizes the need to retain flexibility to make compensation decisions that may not meet Section 162(m) standards when necessary to enable us to meet our overall objectives, even if we may not deduct all of the compensation. Accordingly, the Compensation Committee has expressly reserved the authority to award non-deductible compensation in appropriate circumstances.
We are not obligated to offset any income taxes due on any compensation or benefits, including, as discussed below, income or excise taxes due on any income from accelerated vesting of outstanding equity grants. To the extent any such amounts are considered “excess parachute payments” under Section 280G of the Internal Revenue Code and thus not deductible by us, the Compensation Committee is aware of that possibility and has decided to accept the cost of that lost deduction. However, the Compensation Committee has not thought it necessary for us to take on the additional cost of reimbursing executives for any taxes generated by the vesting accelerations.
COMPENSATION COMMITTEE REPORT
We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussion with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and in our Annual Report onForm 10-K for the year ended December 31, 2006.2007.
Ronna Romney, Chair
Dan T. Moore III
James W. Wert
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INFORMATION REGARDING CURRENT YEAR’S COMPENSATION/GRANTS
The following table sets forth for fiscal year2007 and 2006, all compensation earned by the individuals who served as our CEO and Chief Financial Officer during the year,fiscal 2007, and by our three highest paid employees serving as other executive officers as of the end of 2006,2007, whom we refer to collectively as our named executive officers, for services rendered.officers.
Summary Compensation Table
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Change in
| | | | | | | | | | | | | | | | | | | Change in
| | | | | |
| | | | | | | | | | | | | | Pension Value
| | | | | | | | | | | | | | | | | | | Pension Value
| | | | | |
| | | | | | | | | | | | | | and
| | | | | | | | | | | | | | | | | | | and
| | | | | |
| | | | | | | | | | | | | | Nonqualified
| | | | | | | | | | | | | | | | | | | Nonqualified
| | | | | |
| | | | | | | | | | | | Non-Equity
| | Deferred
| | All Other
| | | | | | | | | | | | | | | Non-Equity
| | Deferred
| | All Other
| | | |
| | | | | | | | Stock
| | Option
| | Incentive Plan
| | Compensation
| | Compen-
| | | | | | | | | | | Stock
| | Option
| | Incentive Plan
| | Compensation
| | Compen-
| | | |
| | | | Salary
| | Bonus
| | Awards
| | Awards
| | Compensation
| | Earnings
| | sation
| | Total
| | | | | Salary
| | Bonus
| | Awards
| | Awards
| | Compensation
| | Earnings
| | sation
| | Total
| |
Name and Principal Position | | Year | | ($) | | ($)(1) | | ($)(2) | | ($)(3) | | ($)(4) | | ($) | | ($)(5) | | ($) | | | Year | | ($) | | ($)(1) | | ($)(2) | | ($)(3) | | ($)(4) | | ($) | | ($)(5) | | ($) | |
(a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) | | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) | |
|
Edward F. Crawford | | | 2006 | | | | 750,000 | | | | 0 | | | | 245,807 | | | | 69,584 | | | | 968,000 | | | | 0 | | | | 80,720 | | | | 2,114,111 | | | | 2007 | | | | 750,000 | | | | 0 | | | | 812,583 | | | | 69,583 | | | | 1,246,920 | | | | 0 | | | | 81,446 | | | | 2,960,532 | |
Chairman of the Board and Chief Executive Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2006 | | | | 750,000 | | | | 0 | | | | 245,807 | | | | 69,584 | | | | 968,000 | | | | 0 | | | | 80,720 | | | | 2,114,111 | |
Richard P. Elliott | | | 2006 | | | | 300,000 | | | | 125,000 | | | | 0 | | | | 13,916 | | | | 0 | | | | 0 | | | | 7,766 | | | | 446,682 | | | | 2007 | | | | 300,000 | | | | 165,000 | | | | 0 | | | | 41,725 | | | | 0 | | | | 0 | | | | 13,986 | | | | 520,711 | |
Vice President and Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2006 | | | | 300,000 | | | | 125,000 | | | | 0 | | | | 13,916 | | | | 0 | | | | 0 | | | | 7,766 | | | | 446,682 | |
Matthew V. Crawford | | | 2006 | | | | 350,000 | | | | 195,000 | | | | 126,415 | | | | 69,584 | | | | 0 | | | | 0 | | | | 35,429 | | | | 776,428 | | | | 2007 | | | | 350,000 | | | | 250,000 | | | | 417,900 | | | | 69,583 | | | | 0 | | | | 0 | | | | 30,123 | | | | 1,117,606 | |
President and Chief Operating Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2006 | | | | 350,000 | | | | 195,000 | | | | 126,415 | | | | 69,584 | | | | 0 | | | | 0 | | | | 35,429 | | | | 776,428 | |
Robert D. Vilsack | | | 2006 | | | | 230,000 | | | | 138,000 | | | | 9,468 | | | | 19,342 | | | | 0 | | | | 0 | | | | 16,437 | | | | 413,247 | | | | 2007 | | | | 240,000 | | | | 160,000 | | | | 2,504 | | | | 41,725 | | | | 0 | | | | 0 | | | | 17,268 | | | | 461,497 | |
Secretary and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
General Counsel | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Secretary and General Counsel | | | | 2006 | | | | 230,000 | | | | 138,000 | | | | 9,468 | | | | 19,342 | | | | 0 | | | | 0 | | | | 16,437 | | | | 413,247 | |
Patrick W. Fogarty | | | 2006 | | | | 230,000 | | | | 82,000 | | | | 9,468 | | | | 13,916 | | | | 0 | | | | 0 | | | | 20,026 | | | | 355,410 | | | | 2007 | | | | 230,000 | | | | 115,000 | | | | 2,504 | | | | 41,725 | | | | 0 | | | | 0 | | | | 21,793 | | | | 411,022 | |
Director of Corporate Development | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2006 | | | | 230,000 | | | | 82,000 | | | | 9,468 | | | | 13,916 | | | | 0 | | | | 0 | | | | 20,026 | | | | 355,410 | |
| | |
(1) | | Other than Mr. E. Crawford, non-equity bonus awards to the named executive officers were discretionary amountscash bonuses which were not paid pursuant to the Bonus Plan. Bonus awards were givengranted to Messrs. M. Crawford, Elliott, Fogarty and Vilsack based on the discretion of the Compensation Committee. The bonus awards were determined by the Compensation Committee based on recommendations from theour CEO and after taking into account the individual performance of the executive officer and our profitability. These amounts are disclosed as bonuses in column (d) above. For Mr. M. Crawford, the 2006 bonus award was based of the achievement of performance measures relating to operating profit, working capital, and other measures that were related to our goals and market conditions for the year subjectively determined by the Compensation Committee. |
|
(2) | | Grants of restricted shares were made in 2004 to Messrs. Fogarty and Vilsack and in 2006 to Messrs. E. and M. Crawford. Amounts disclosedThe amounts in column (e) above represent the dollar amount recognized for financial statement reporting purposes with respect to 2006the year indicated for awards of restricted shares granted in 2006 and in prior years, in accordance with FAS 123R. Assumptions used in the calculation of the amounts are included in Note I to our consolidated financial statements included in our Annual Report onForm 10-K for 2006.2007. The restricted shares vest one-third each year over the three years following the grant date, except that the 2006 grant to Mr. M. Crawford will vest one-fifth each year over five years. |
|
(3) | | Amounts disclosedThe amounts in column (f) above represent the dollar amount recognized for financial statement reporting purposes with respect to 2006the year indicated for awards of stock options granted in that year and in prior years, in accordance with FAS 123R. The stock options vest one-third each year over the three years following the grant date and expire after ten years, if not exercised before that time. Assumptions used in the calculation of the amounts are included in Note I to our consolidated financial statements included in our Annual Report onForm 10-K for 2006.2007. |
|
(4) | | Mr. E. Crawford received a performance-based award under the Bonus Plan equal to 4% of our consolidated adjusted net income before income taxes for 2006.2007. |
|
(5) | | AmountsThe amounts disclosed in column (i) above for 2007 include life insurance premiums for all of the named executive officers. For Mr. E. Crawford, this amount was $52,065.$52,737. Also included in these amounts are our contributions to the 401(k) savings planPlan for all the named executive officers; car expenses for Messrs. E. Crawford and M. Crawford, and Elliott; car allowances for Messrs. Elliott, Fogarty and Vilsack; telephone expenses for Mr. E. Crawford; and club dues for Messrs. E. Crawford ($19,498), M. Crawford ($27,663)30,123), Fogarty and Vilsack. |
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Grants of Plan-Based Awards Table
The following table sets forth the restricted shareoption grants and Bonus Plan awards granted in 2006:2007:
20062007 Grants of Plan-Based Awards
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | All Other
| | All Other
| | | | | | | | | | | | | | | All Other
| | | | | |
| | | | | | | | | | | | | | | | Stock
| | Option
| | | | | | | | | | | | | | | Option
| | | | | |
| | | | Estimated Possible Payouts
| | Estimated Future Payouts
| | Awards:
| | Awards:
| | | | Grant Date
| | | | | | | | | | | Awards:
| | | | Grant Date
| |
| | | | Under Non-Equity
| | Under Equity
| | Number of
| | Number
| | Exercise or
| | Fair Value
| | | | | Estimated Possible Payouts
| | Number
| | Exercise or
| | Fair Value
| |
| | | | Incentive Plan Awards(1) | | Incentive Plan Awards | | Shares of
| | of Securities
| | Base Price
| | of Stock
| | | | | Under Non-Equity
| | of Securities
| | Base Price
| | of Stock
| |
| | | | Thresh-
| | | | Maxi-
| | Thresh-
| | | | Maxi-
| | Stock or
| | Underlying
| | of Option
| | and Option
| | | | | Incentive Plan Awards(1) | | Underlying
| | of Option
| | and Option
| |
| | Grant
| | old
| | Target
| | mum
| | old
| | Target
| | mum
| | Units
| | Options
| | Awards
| | Awards
| | | Grant
| | Threshold
| | Target
| | Maximum
| | Options
| | Awards
| | Awards
| |
Name | | Date | | (#) | | ($) | | ($) | | (#) | | (#) | | (#) | | (#)(2) | | (#) | | ($/Sh) | | ($)(3) | | | Date | | (#) | | ($) | | ($) | | (#)(2) | | ($/Sh) | | ($)(3) | |
(a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) | | (k) | | (l) | | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | |
|
Edward F. Crawford | | 9/12/2006 | | | | | | | | | | | | | | | | | 175,000 | | | | | | | | 2,437,750 | | | | | | | | | | | | | | | | | | | |
Richard P. Elliott | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4/12/2007 | | | | | | | | | | 10,000 | | 20.00 | | | 116,000 | |
Matthew V. Crawford | | 9/12/2006 | | | | | | | | | | | | | | | | | 150,000 | | | | | | | | 2,089,500 | | | | | | | | | | | | | | | | | | | |
Robert D. Vilsack | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4/12/2007 | | | | | | | | | | 10,000 | | 20.00 | | | 116,000 | |
Patrick W. Fogarty | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4/12/2007 | | | | | | | | | | 10,000 | | 20.00 | | | 116,000 | |
| | |
(1) | | For 2006,2007, Mr. E. Crawford was entitled to a cash bonus equal to 4% of our consolidated adjusted net income before income taxes under the Bonus Plan. Accordingly, there is no threshold, target or maximum award amount, except such award is limited to a maximum of $3.0 million under the terms of the Bonus Plan. For 2006,2007, Mr. E. Crawford earned a cash bonus in the amount of $968,000.$1,246,920. |
|
(2) | | The amounts shown in column (i)(f) above are the number of restricted sharesstock options granted underin 2007. All stock options were granted with an exercise price equal to the 1998 Plan. The restricted shares vest equally over three years for Mr. E. Crawford and equally over five years for Mr. M. Crawford. Restricted shares were expensed basedclosing market price of our Common Stock on the closing price on the September 12, 2006 grant date spread over thethree-year orfive-year vesting periodday of the grant, as applicable.have a ten-year term and will become exercisable over a three-year period beginning on the first anniversary of the grant date. In the case of death, disability, retirement or change in control, the stock options become 100% vested and exercisable. |
|
(3) | | The amounts shown in column (l)(h) above arerepresent the market valuesgrant date fair value calculated in accordance with FAS 123R. Assumptions used in the calculation of the shares represented by each grant, valued at the closing price ofamounts are included in Note I to our stockconsolidated financial statements included in our Annual Report on the September 12, 2006 grant date of $13.93 per share.Form 10-K for 2007. |
For 2006,2007, base salary and bonuses (other than pursuant to non-equity incentive plans) were 35.5%25.3% of total compensation in the Summary Compensation table for Mr. E. Crawford; 70.2%53.7% for Mr. M. Crawford; 95.1%89.3% for Mr. Elliott; 87.8%84.0% for Mr. Fogarty and 89.1%86.7% for Mr. Vilsack.
None of the named executive officers has an employment agreement with us.
None of the named executive officers participated in the company’s non-qualified deferred compensation plan.plan in 2007.
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Outstanding Equity Awards at 20062007 Fiscal Year-End
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | |
| | Option Awards | | Stock Awards | | | | | | | | | | | | | | | | | �� | | Equity
| |
| | | | | | | | | | | | | | | | Equity
| | Equity
| | | | | | | | | | | | | | | | | Equity
| | Incentive
| |
| | | | | | | | | | | | | | | | Incentive
| | Incentive Plan
| | | | | | | | | | | | | | | | | Incentive
| | Plan
| |
| | | | | | | | | | | | | | | | Plan
| | Awards:
| | | | | | | | | | | | | | | | | Plan
| | Awards:
| |
| | | | | | | | | | | | | | | | Awards:
| | Market or
| | | | | | | | | | | | | | | | | Awards:
| | Market or
| |
| | | | | | Equity
| | | | | | | | | | Number of
| | Payout
| | | | | | | Equity
| | | | | | | | | | Number of
| | Payout
| |
| | | | | | Incentive
| | | | | | | | | | Unearned
| | Value of
| | | | | | | Incentive
| | | | | | | | | | Unearned
| | Value of
| |
| | | | | | Plan
| | | | | | | | | | Shares,
| | Unearned
| | | | | | | Plan
| | | | | | | | | | Shares,
| | Unearned
| |
| | | | | | Awards:
| | | | | | | | Market
| | Units or
| | Shares,
| | | | | | | Awards:
| | | | | | | | Market
| | Units or
| | Shares,
| |
| | Number of
| | Number of
| | Number of
| | | | | | Number of
| | Value of
| | Other
| | Units
| | | Number of
| | Number of
| | Number of
| | | | | | Number of
| | Value of
| | Other
| | Units
| |
| | Securities
| | Securities
| | Securities
| | | | | | Shares or
| | Shares or
| | Rights
| | or Other
| | | Securities
| | Securities
| | Securities
| | | | | | Shares or
| | Shares or
| | Rights
| | or Other
| |
| | Underlying
| | Underlying
| | Underlying
| | | | | | Units of
| | Units of
| | That
| | Rights
| | | Underlying
| | Underlying
| | Underlying
| | | | | | Units of
| | Units of
| | That
| | Rights
| |
| | Unexercised
| | Unexercised
| | Unexercised
| | Option
| | | | Stock That
| | Stock That
| | Have
| | That Have
| | | Unexercised
| | Unexercised
| | Unexercised
| | Option
| | | | Stock That
| | Stock That
| | Have
| | That Have
| |
| | Options
| | Options
| | Unearned
| | Exercise
| | Option
| | Have Not
| | Have Not
| | Not
| | Not
| | | Options
| | Options
| | Unearned
| | Exercise
| | Option
| | Have Not
| | Have Not
| | Not
| | Not
| |
| | Exercisable
| | Unexercisable
| | Options
| | Price
| | Expiration
| | Vested
| | Vested
| | Vested
| | Vested
| | | Exercisable
| | Unexercisable
| | Options
| | Price
| | Expiration
| | Vested
| | Vested
| | Vested
| | Vested
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Name | | (#) | | (#)(1) | | (#) | | ($) | | Date | | (#) | | ($)(4) | | (#) | | ($) | | | (#) | | (#)(1) | | (#) | | ($) | | Date | | (#) | | ($)(4) | | (#) | | ($) | |
(a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) | | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) | |
(a) | |
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Edward F. Crawford | | | 300,000 | | | | | | | | | | | | 1.91 | | | | 11/30/2011 | | | | | | | | | | | | | | | | | | | | 300,000 | | | | | | | | | | | | 1.91 | | | | 11/30/2011 | | | | | | | | | | | | | | | | | |
| | | 8,334 | | | | 16,666 | | | | | | | | 14.90 | | | | 05/02/2015 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | 175,000 | (2) | | | 2,821,000 | | | | | | | | | | | | 16,670 | | | | 8,330 | | | | | | | | 14.90 | | | | 05/02/2015 | | | | 116,667 | (2) | | | 2,928,341 | | | | | | | | | |
Richard P. Elliott | | | 5,000 | | | | | | | | | | | | 1.91 | | | | 11/30/2011 | | | | | | | | | | | | | | | | | | | | 5,000 | | | | | | | | | | | | 1.91 | | | | 11/30/2011 | | | | | | | | | | | | | | | | | |
| | | 1,667 | | | | 3,333 | | | | | | | | 14.90 | | | | 05/02/2015 | | | | | | | | | | | | | | | | | | | | 3,334 | | | | 1,666 | | | | | | | | 14.90 | | | | 05/02/2015 | | | | | | | | | | | | | | | | | |
| | | | | | | | 10,000 | | | | | | | | 20.00 | | | | 04/12/2017 | | | | | | | | | | | | | | | | | |
Matthew V. Crawford | | | 275,000 | | | | | | | | | | | | 1.91 | | | | 11/30/2011 | | | | | | | | | | | | | | | | | | | | 275,000 | | | | | | | | | | | | 1.91 | | | | 11/30/2011 | | | | | | | | | | | | | | | | | |
| | | 8,334 | | | | 16,666 | | | | | | | | 14.90 | | | | 05/02/2015 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | 150,000 | (3) | | | 2,418,000 | | | | | | | | | | | | 16,670 | | | | 8,330 | | | | | | | | 14.90 | | | | 05/02/2015 | | | | 120,000 | (3) | | | 3,012,000 | | | | | | | | | |
Robert D. Vilsack | | | 10,000 | | | | | | | | | | | | 3.34 | | | | 03/10/2013 | | | | | | | | | | | | | | | | | | | | 10,000 | | | | | | | | | | | | 3.34 | | | | 03/10/2013 | | | | | | | | | | | | | | | | | |
| | | 10,000 | | | | | | | | | | | | 4.40 | | | | 05/21/2013 | | | | | | | | | | | | | | | | | | | | 10,000 | | | | | | | | | | | | 4.40 | | | | 05/21/2013 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | 1,000 | (2) | | | 16,120 | | | | | | | | | | | | 3,334 | | | | 1,666 | | | | | | | | 14.90 | | | | 05/02/2015 | | | | | | | | | | | | | | | | | |
| | | 1,667 | | | | 3,333 | | | | | | | | 14.90 | | | | 05/02/2015 | | | | | | | | | | | | | | | | | | | | | | | | 10,000 | | | | | | | | 20.00 | | | | 04/12/2017 | | | | | | | | | | | | | | | | | |
Patrick W. Fogarty | | | | | | | | | | | | | | | | | | | | | | | 1,000 | (2) | | | 16,120 | | | | | | | | | | | | 3,334 | | | | 1,666 | | | | | | | | 14.90 | | | | 05/02/2015 | | | | | | | | | | | | | | | | | |
| | | 1,667 | | | | 3,333 | | | | | | | | 14.90 | | | | 05/02/2015 | | | | | | | | | | | | | | | | | | | | | | | | 10,000 | | | | | | | | 20.00 | | | | 04/12/2017 | | | | | | | | | | | | | | | | | |
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(1) | | These stock options become exercisable equally over a three-year period beginning on the first anniversary of the grant date. |
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(2) | | These restricted shares vest equally over a three-year period beginning on the first anniversary of the grant date. |
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(3) | | These restricted shares vest equally over a five-year period beginning on the first anniversary of the grant date. |
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(4) | | TheThese amounts disclosed in column (h) above are based on the closing market price of our Common Stock of $16.12$25.10 per share as of December 29, 2006, the last business day of the year.31, 2007. |
20062007 Option Exercises and Stock Vested
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| | Option Awards | | Stock Awards | | | Option Awards | | Stock Awards | |
| | Number of Shares
| | Value Realized
| | Number of Shares
| | Value Realized
| | | Number of Shares
| | Value Realized
| | Number of Shares
| | Value Realized
| |
| | Acquired on Exercise
| | on Exercise
| | Acquired on Vesting
| | on Vesting
| | | Acquired on Exercise
| | on Exercise
| | Acquired on Vesting
| | on Vesting
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Name | | (#) | | ($) | | (#) | | ($)(1) | | | (#) | | ($) | | (#) | | ($)(1) | |
(a) | | (b) | | (c) | | (d) | | (e) | | | (b) | | (c) | | (d) | | (e) | |
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Edward F. Crawford | | | | | | | | | | | | | | | | | | | 58,333 | | | | 1,557,491 | |
Richard P. Elliott | | | | | | | | | | | | | | | | | | | 0 | | | | 0 | |
Matthew V. Crawford | | | | | | | | | | | | | | | | | | | 30,000 | | | | 801,000 | |
Robert D. Vilsack | | | | | | | 1,000 | | | | 19,810 | | | | | | | | 1,000 | | | | 19,010 | |
Patrick W. Fogarty | | | | | | | 1,000 | | | | 19,810 | | | | | | | | 1,000 | | | | 19,010 | |
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(1) | | TheThese amounts in column (e) above are based on the closing market price of our Common Stock of $19.81 per share as of April 6, 2006,on the day on which the restricted shares vested. |
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PENSION BENEFITS AND NONQUALIFIEDNON-QUALIFIED DEFERRED COMPENSATION
20062007 Pension Benefits and NonqualifiedNon-qualified Deferred Compensation Tables
None of the named executive officers participated in any pension plan or any nonqualifiednon-qualified deferred compensation plan sponsored by us during 2006.2007.
POTENTIAL POST-EMPLOYMENT PAYMENTS
Upon termination of employment for any reason, no special severance benefits are payable to any of the named executive officers. Upon a change of control, or the death, disability, or retirement of a named executive officer, all restricted share grants fully vest and all unvested stock options become immediately exercisable. The value of these vesting accelerations for the named executive officers, as if a change of control had occurred on December 29, 2006,31, 2007, would be as follows:
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| | Stock
| | Restricted
| | | | | Stock
| | Restricted
| | | |
| | Options
| | Shares
| | Total
| | | Options
| | Shares
| | Total
| |
Name | | ($)(1) | | ($)(2) | | ($) | | | ($)(1) | | ($)(2) | | ($) | |
|
Edward F. Crawford | | | 20,332 | | | | 2,821,000 | | | | 2,841,332 | | | | 84,966 | | | | 2,928,341 | | | | 3,013,307 | |
Richard P. Elliott | | | 4,066 | | | | 0 | | | | 4,066 | | | | 67,993 | | | | 0 | | | | 67,993 | |
Matthew V. Crawford | | | 20,332 | | | | 2,418,000 | | | | 2,438,332 | | | | 84,996 | | | | 3,012,000 | | | | 3,096,966 | |
Robert D. Vilsack | | | 4,066 | | | | 16,120 | | | | 20,186 | | | | 67,993 | | | | 0 | | | | 67,993 | |
Patrick W. Fogarty | | | 4,066 | | | | 16,120 | | | | 20,186 | | | | 67,993 | | | | 0 | | | | 67,993 | |
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(1) | | Vesting of previously unexercisable options is valued as the spread between the exercise price of $14.90 and the closing market price of $16.12$25.10 of our Common Stock on December 29, 2006, the last business day of the year.31, 2007. |
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(2) | | Vesting of previously unvested restricted shares is valued at the closing market price of $16.12$25.10 of our Common Stock on December 29, 2006, the last business day of the year.31, 2007. |
No cash payments or other benefits are due the named executive officers upon a change of control, as defined in the 1998 Plan. A change of control is generally defined asas: (i) our corporate reorganization or a sale of substantially all of our assets with the result that the shareholders prior to the reorganization or sale afterwards hold less than a majority of our voting stock; (ii) any person (other than Mr. E. Crawford) becoming the beneficial owner of 20% or more of the combined voting power of our outstanding securities; (iii) we enter into an agreement changing the control of our voting stock; and (iv) a change in the majority of our Board of Directors.
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COMPENSATION OF DIRECTORS
We compensate non-employee directors for serving on our Board of Directors and reimburse them for expenses incurred in connection with Board and committee meetings. During 2006,2007, each non-employee director received as an annual retainer a grant of 2,0002,500 restricted shares. The restricted shares were granted in accordance with the 1998 Plan. The non-employee directors also received $2,000 for each Board meeting attended, or $500 for each Board meeting attended telephonically. Audit Committee and Compensation Committee members received $500 for each meeting attended whether in person or telephonically. Messrs. Hatch and Selhorst retired from the Board effective as of the 2006 annualCommittee Chairpersons received $1,000 per committee meeting of shareholders.chaired.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Change in Pension
| | | | | | | | | | | | | | | Change in Pension
| | | | | |
| | Fees
| | | | | | | | Value and
| | | | | | | Fees
| | | | | | | | Value and
| | | | | |
| | Earned or
| | | | | | Non-Equity
| | Nonqualified
| | | | | | | Earned or
| | | | | | Non-Equity
| | Nonqualified
| | | | | |
| | Paid in
| | Stock
| | Option
| | Incentive Plan
| | Deferred
| | All Other
| | | | | Paid in
| | Stock
| | Option
| | Incentive Plan
| | Deferred
| | All Other
| | | |
| | Cash
| | Awards
| | Awards
| | Compensation
| | Compensation
| | Compensation
| | Total
| | | Cash
| | Awards
| | Awards
| | Compensation
| | Compensation
| | Compensation
| | Total
| |
Name | | ($) | | ($)(1) | | ($) | | ($) | | Earnings | | ($)(2) | | ($) | | | ($) | | ($)(1) | | ($) | | ($) | | Earnings | | ($) | | ($) | |
(a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | |
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Patrick V. Auletta | | | 12,000 | | | | 44,486 | | | — | | — | | — | | | | | | | 56,486 | | | | 12,500 | | | | 50,413 | | | — | | — | | — | | | 0 | | | | 62,913 | |
Kevin R. Greene | | | 12,000 | | | | 44,486 | | | — | | — | | — | | | | | | | 56,486 | | | | 9,000 | | | | 50,413 | | | — | | — | | — | | | 0 | | | | 59,413 | |
Lewis E. Hatch, Jr. | | | 5,500 | | | | 20,951 | | | — | | — | | — | | | 5,000 | | | | 31,451 | | |
Dan T. Moore, III | | | 7,500 | | | | 44,486 | | | — | | — | | — | | | | | | | 51,986 | | |
Dan T. Moore III | | | | 6,500 | | | | 50,413 | | | — | | — | | — | | | 0 | | | | 56,913 | |
Ronna Romney | | | 10,000 | | | | 44,486 | | | — | | — | | — | | | | | | | 54,486 | | | | 8,000 | | | | 50,413 | | | — | | — | | — | | | 0 | | | | 58,413 | |
Lawrence O. Selhorst | | | 4,000 | | | | 20,951 | | | — | | — | | — | | | 5,000 | | | | 29,951 | | |
James W. Wert | | | 11,500 | | | | 44,486 | | | — | | — | | — | | | | | | | 55,986 | | | | 11,000 | | | | 50,413 | | | — | | — | | — | | | 0 | | | | 61,413 | |
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(1) | | Amounts disclosed in column (c) aboveThese amounts represent the dollar amount recognized for financial statement reporting purposes with respect to 20062007 for awards of restricted shares granted in 20062007 and in prior years, in accordance with FAS 123R. The restricted shares vest one year from the date of grant. The closing priceAssumptions used in the calculation of the amounts are included in Note I to our stockconsolidated financial statements included in our Annual Report on the date of grant was $17.89Form 10-K for the 2,000 shares granted July 15, 2005 and $16.81 for the 3,000 shares granted July 13, 2006 (except for Messrs. Hatch and Selhorst).2007. As of December 31, 2006,2007, each director other than Messrs. Hatch and Selhorst, who retired in 2006, held 3,0002,500 outstanding shares subject to restriction. |
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(2) | | Travel vouchers in the amount of $5,000 were issued to each of Messrs. Hatch and Selhorst upon their retirement from the Board in appreciation of their services and leadership on our behalf. |
17
AUDIT COMMITTEE
Audit Committee Report
The Audit Committee oversees our accounting and financial reporting processes and the audits of financial statements. The Audit Committee selects our independent auditors. The Audit Committee is composed of three directors, each of whom is independent as defined under the rules of the Nasdaq Stock Market and SEC rules. Currently, the Audit Committee is composed of Messrs. Auletta, Greene and Wert. The Audit Committee operates under a written charter adopted by the Board of Directors.
Management is responsible for our internal controls and financial reporting process. The independent auditors are responsible for performing an independent audit of our consolidated financial statements in accordance with auditing standards generally accepted in the United States of America and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.
In connection with these responsibilities, the Audit Committee met with management and Ernst & Young LLP to review and discuss the audited consolidated financial statements for the year ended December 31, 2006.2007. The Audit Committee discussed with Ernst & Young LLP its judgments as to the quality, not just the acceptability, of our accounting principles and such other matters as are required by Statement on Auditing Standards No. 61 (Communication with Audit Committees), as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T. In addition, the Audit Committee has received the written disclosures and the letter from Ernst & Young LLP required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), as adopted by the Public Company Accounting Standards Oversight Board in Rule 3600T, has discussed with Ernst & Young LLP its independence from management and has considered the compatibility of nonauditnon-audit services with the auditors’ independence.
The Audit Committee meets with the internal and independent auditors, with and without management present, to discuss the overall scope and plans for their respective audits, the results of audit examinations, their evaluations of our internal controls, and the overall quality of our financial reporting.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, that the audited financial statements be included in the Annual Report onForm 10-K for the fiscal year ended December 31, 2006.2007.
Patrick V. Auletta, Chair
Kevin R. Greene
James W. Wert
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Independent Auditor Fee Information
Audit and Non-Audit Fees
The following table presents fees for professional audit services rendered by Ernst & Young LLP for the audit of our annual financial statements in each of the last two fiscal years:
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| | 2006 | | 2005 | | | 2006 | | 2007 | |
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Audit fees | | $ | 1,084,000 | | | $ | 1,075,000 | | | $ | 1,084,000 | | | $ | 1,043,000 | |
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Audit-related fees | | $ | 83,000 | | | $ | 60,000 | | | $ | 83,000 | | | $ | 75,000 | |
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Tax fees | | $ | 112,000 | | | $ | 179,000 | | | $ | 112,000 | | | $ | 77,800 | |
| | | | | | | | | | |
All other fees | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
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| | $ | 1,279,000 | | | $ | 1,314,000 | | | $ | 1,279,000 | | | $ | 1,195,800 | |
Fees for audit services included fees associated with the annual audit, the reviews of quarterly reports onForm 10-Q, statutory audits required internationally and the audit of management’s assessment of internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002. Audit-related fees principally included fees in connection with pension plan audits and accounting consultations. Tax fees included fees in connection with tax compliance and tax planning services.
Pre-approval policy
The Audit Committee has adopted a formal policy on auditor independence requiring the approval by the Audit Committee of all professional services rendered by our independent auditor prior to the commencement of the specified services.
One hundred percent of the services described in “Audit-Related Fees,” “Tax Fees,” and “All Other Fees” were pre-approved by the Audit Committee in accordance with the Audit Committee’s formal policy on auditor independence.
Independent Auditors
The Audit Committee has retained Ernst & Young LLP as our independent auditor for the year ending December 31, 2007. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting and have an opportunity to make a statement at the Annual Meeting, if they so desire, and will be available to respond to appropriate shareholders’ questions.
TRANSACTIONS WITH RELATED PERSONS
In accordance with our Audit Committee Charter, our Audit Committee is responsible for reviewing and approving the terms and conditions of all related-party transactions. In some cases, however, the Audit Committee will defer the approval of a related-party transaction to the disinterested members of the full Board of Directors.
Neither the Audit Committee nor the Board of Directors has written policies or procedures with respect to the review, approval or ratification of related-party transactions. Instead, the Audit Committee, or the Board of Directors, as applicable, reviews each proposed transaction on acase-by-case basis taking into account all relevant factors, including whether the terms and conditions are at least as favorable to us as if negotiated on an arm’s-length basis with unrelated third parties.
In January 2007, the The following related-party transactions have been approved either by our Board of Directors with Messrs. E. Crawfordor our Audit Committee.
During 2007, we chartered, on an hourly basis, an airplane from a third-party private aircraft charter company. One of the aircraft available for use by us is an aircraft owned jointly by this charter company and M. Crawford abstaining, approved a lease for our corporate headquarters in Mayfield Heights, Ohio, consisting of approximately 60,450 square feet at a monthly rent of $68,488. The building is owned by a company owned by Mr. E. Crawford. In connection withFor 2007, we paid $74,241 for the approvaluse of thethat aircraft.
We lease the Board of Directors received a real estate appraisal establishing the fair market value of the rent.
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Additionally, the Board of Directors previously approved the following transactions with related persons: Park-Ohio Industries, Inc. or General Aluminum Mfg. Company, our wholly-owned subsidiary, leases space in three buildings in Conneaut, Ohio: (a) a 91,300 square foot facility owned by a company owned by Mr. M. Crawford, at a monthly rent of $30,400; (b) an additional 70,000 square foot attached facility
19
owned by the same company, at a monthly rent of $10,000; and (c) a separate 50,000 square foot facility owned by the spouse of Mr. E. Crawford, at a monthly rent of $4,000. In addition, General Aluminum leasesWe lease a 125,000 square foot facility in Huntington, Indiana from a company owned by Mr. E. Crawford, at a monthly rent of $13,500. Park-Ohio Products, Inc., our wholly-owned subsidiary, leasesWe lease a 150,000 square foot facility in Cleveland, Ohio from a company owned by Mr. M. Crawford, at a monthly rent of $28,835. This facility is owned byWe lease a 60,450 square feet building we use as our corporate headquarters in Mayfield Heights, Ohio, from a company owned by Mr. M. Crawford.E. Crawford, at a monthly rent of $68,488.
SHAREHOLDER PROPOSALS FOR THE 2008 ANNUAL MEETING
20082009 Proposals. Any shareholder who intends to present a proposal to include in the proxy materials for the 20082009 annual meeting of shareholders must comply withRule 14a-8 of the Exchange Act. To have the proposal included in our proxy statement and form of proxy for that meeting, the shareholder must deliver the proposal in writing by December 21, 200715, 2008 to the Secretary of the Company, at 23000 Euclid Avenue,6065 Parkland Blvd., Cleveland, Ohio 44117.44124. In connection with proposals of shareholders submitted outside the processes ofRule 14a-8 of the Exchange Act in connection with the 20082009 annual meeting of shareholders, our proxy statement relating to the 20082009 annual meeting of shareholders will give discretionary authority to those individuals named in the accompanying proxy to vote with respect to allnon-Rule 14a-8 proposals received by us after March 5, 2008.February 28, 2009.
Advance Notice Procedures. Under our Regulations, no business may be brought before an annual meeting unless it is specified in the notice of the meeting or otherwise brought before the meeting by or at the direction of the Board of Directors or by a shareholder who has delivered written notice to our Secretary not less than sixty days nor more than ninety days before the meeting. If there was less than seventy-five days notice or prior public disclosure of the date of the meeting given or made to the shareholders, then in order for the notice by the shareholder to be timely it must be received no later than the close of business on the fifteenth day after the earlier of the day on which such notice of the date of the meeting was mailed or such public disclosure was made.
ANNUAL REPORT
Our Annual Report for the year ended December 31, 20062007 is being mailed to each shareholder of record with this Proxy Statement. Additional copies may be obtained from the undersigned.
PARK-OHIO HOLDINGS CORP.
ROBERT D. VILSACK
Secretary
April 19, 200714, 2008
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| | c/o National City Bank Shareholder Services Operations Locator 5352 P. O. Box 94509 Cleveland, OH 44101-4509 |
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If voting by mail, Proxy must be signed and dated below.
ê Please fold and detach card at perforation before mailing.ê | | |
PARK-OHIO HOLDINGS CORP. | | PROXY |
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Patrick V. Auletta and James W. Wert 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 shareholders of Park-Ohio Holdings Corp. to be held at The Cleveland Marriott East, 26300 Harvard Road, Warrensville Heights, Ohio 44122, on May 20, 2008, and any and all adjournments, postponements or continuations thereof.
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| | DATE: | | | , | 2008 |
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| | (Sign here)
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| | 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. |
êPlease fold and detach card at perforation before mailing.ê
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES BELOW, 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. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED BELOW IN PROPOSAL 1.
If this Proxy is properly executed and returned, shares represented hereby will be voted in the manner specified by the shareholder. If no specification is made, shares will be voted FOR the election of the persons nominated as directors pursuant to the Proxy Statement.
| 1. | | THE ELECTION OF DIRECTORS |
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| | q | | FORall nominees listed below | | | | q | | WITHHOLDAuthority |
| | | | (except as otherwise marked below) | | | | | | to vote for all nominees listed below |
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Edward F. Crawford | | Kevin R. Greene | | Dan T. Moore III |
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(Instructions:to withhold authority to vote for any individual nominee, strike a line through that nominee’s name)
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| 2. | | 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. |
(Continued and to be signed on reverse)
c/o National City Bank
Shareholder Services Operations
Locator 5352
P. O. Box 94509
Cleveland, OH 44101-4509
If voting by mail, Proxy must be signed and dated below.
ê Please fold and detach card at perforation before mailing. ê
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PARK-OHIO HOLDINGS CORP. | | CONFIDENTIAL VOTING INSTRUCTIONS |
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CONFIDENTIAL VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
To The Charles Schwab Trust Company, Trustee of the Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Its Subsidiaries (the “Plan”): The undersigned, a participant in the Plan, hereby directs the Trustee to vote in person or by proxy (a) all common shares of Park-Ohio Holdings Corp. credited to the undersigned’s account under the Plan on the record date (“allocated shares”); and (b) the proportionate number of common shares of Park-Ohio Holdings Corp. allocated to the accounts of other participants in the Plan, but for which the Trustee does not receive valid voting instructions (“non-directed shares”) and as to which the undersigned is entitled to direct the voting in accordance with the Plan provisions at the annual meeting of shareholders of Park-Ohio Holdings Corp. to be held at The Manor, 24111 Tungsten/RockwellCleveland Marriott East, 26300 Harvard Road, Euclid,Warrensville, Ohio 44117,44122, on May 24, 2007,20, 2008, and any and all adjournments, postponements, or continuations thereof. Under the Plan, shares allocated to the accounts of participants for which the Trustee does not receive timely directions in the form of a signed voting instruction card are voted by the Trustee as directed by the participants who timely tender a signed voting instruction card. By completing this Confidential Voting Instruction Form 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 form from the Trustee at 800-724-7526.
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DATE: | | | | , 20072008 |
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(Sign here)
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NOTE: Please sign exactly as name appears hereon. |
Directions to The Manor
24111 Tungsten/Rockwell Road
Euclid, Ohio 44117
The Manor is in Heritage Business Park, on the North Side of Euclid Avenue just East of the Park-Ohio Headquarters, between Babbitt Road and East 222.
ê Please fold and detach card at perforation before mailing.ê
Confidential Voting Instruction Form
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES BELOW, 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 FORM. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED BELOW IN PROPOSAL 1.
If This Confidential Voting Instruction Form Is Properly Executed And Returned, Shares Represented Hereby Will Be Voted In The Manner Specified By The Participant.
| 1. | | THE ELECTION OF DIRECTORS |
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| | o | | FORall nominees listed below (except as otherwise marked below) | | | | o | | WITHHOLDAuthority to vote for all nominees listed below |
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Patrick V. AulettaEdward F. Crawford | | Kevin R. Greene | | Dan T. Moore III | | James W. Wert |
(Instructions: to withhold authority to vote for any individual nominee, strike a line through that nominee’s name)
| 2. | | 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. |
(Continued and to be signed on reverse)
c/o National City BankShareholder Services OperationsLocator 5352P. O. Box 94509Cleveland, OH 44101-4509If voting by mail, Proxy must be signed and dated below.
ê Please fold and detach card at perforation before mailing.ê
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PARK-OHIO HOLDINGS CORP. | | PROXY |
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PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Kevin R. Greene and Ronna Romney 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 shareholders of Park-Ohio Holdings Corp. to be held at The Manor, 24111 Tungsten/Rockwell Road, Euclid, Ohio 44117, on May 24, 2007, and any and all adjournments, postponements or continuations thereof.
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DATE: | | | | , 2007 |
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(Sign here)
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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. |
Directions to The Manor
24111 Tungsten/Rockwell Road
Euclid, Ohio 44117
The Manor is in Heritage Business Park, on the North Side of Euclid Avenue just East of the Park-Ohio Headquarters, between Babbitt Road and East 222.
ê Please fold and detach card at perforation before mailing.ê
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES BELOW, 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. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED BELOW IN PROPOSAL 1.
If this Proxy is properly executed and returned, shares represented hereby will be voted in the manner specified by the shareholder. If no specification is made, shares will be voted FOR the election of the persons nominated as directors pursuant to the Proxy Statement.
| 1. | | THE ELECTION OF DIRECTORS |
| | | | | | | | | | |
| | o | | FORall nominees listed below
(except as otherwise marked below) | | | | o | | WITHHOLDAuthority
to vote for all nominees listed below |
| | | | |
Patrick V. Auletta | | Dan T. Moore III | | James W. Wert |
(Instructions: to withhold authority to vote for any individual nominee, strike a line through that nominee’s name)
| 2. | | 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. |
(Continued, and to be signed on reverse)