UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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-12
The Ohio Art Company
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(Name of Registrant as Specified In Its Charter)
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(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:
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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 previously paid with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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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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THE OHIO ART COMPANY
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 5, 2001
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Bryan, Ohio
May 10, 2001
To the Shareholders of
The Ohio Art Company
NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders
of THE OHIO ART COMPANY will be held at the Summit Club, 110 W. Berry
Street, Fort Wayne, Indiana, on June 5, 2001 at 10:00 AM local time for the
following purposes:
1. To elect three directors to serve for a term of two years.
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only shareholders of record at the close of business on April 26, 2001 are
entitled to notice of and to vote at the meeting.
William C. Killgallon
Chairman of the Board
IMPORTANT
WHETHER YOU OWN FEW OR MANY SHARES, IT IS IMPORTANT THAT YOUR STOCK BE
REPRESENTED AT THIS MEETING; THEREFORE, PLEASE FILL IN, DATE, AND SIGN THE
ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO STAMP IS
NECESSARY IF MAILED IN THE U.S.
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THE OHIO ART COMPANY
One Toy Street
Bryan, OH 43506
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PROXY STATEMENT
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Annual Meeting of Shareholders, June 5, 2001
The accompanying proxy is solicited on behalf of the Board of Directors for
use at the annual meeting of shareholders to be held on June 5, 2001. The proxy
and this proxy statement are being mailed to shareholders on or about May 10,
2001. The expense of this solicitation is to be borne by the Company, and the
Company may also reimburse persons holding shares in their names or in the names
of their nominees for their reasonable expenses in sending proxies and proxy
material to their principals.
Unless authority is withheld, proxies in the accompanying form which are
properly executed and duly returned to the Company will be voted at the meeting.
Each proxy granted is revocable and may be revoked either by executing a later
dated proxy or by giving notice to the Company in writing or in open meeting
before any vote is taken.
Abstentions will be treated as votes cast on a particular matter as well as
shares present for purposes of establishing a quorum. Where nominee record
holders do not vote on specific issues because they did not receive specific
instructions on those issues from the beneficial owners of the shares (broker
"non-votes"), those broker non-votes will not be treated as either votes cast or
shares present or represented for purposes of establishing a quorum.
As of April 26, 2001, the record date, the Company had outstanding and
entitled to vote at the meeting or at any adjournments thereof 886,784 shares of
Common Stock. Each shareholder of record on the record date is entitled to one
vote for each share held.
INFORMATION WITH RESPECT TO DIRECTORS AND NOMINEES
The Board of Directors of the Company is divided into two classes, with one
class being elected each year for a two-year term. The Company's Code of
Regulations provides that the Board of Directors shall consist of seven
directors or such other number as may be fixed at a meeting of shareholders.
Shareholders are being asked to elect three directors to serve for a term of two
years or until their respective successors are elected and qualified. Proxies
given to the Board of Directors will be voted in accordance with the direction
of the shareholders. It is expected that shares held by the Killgallon Family
(as defined below) will be voted to elect the three nominees set forth in the
following tabulation. Directors will be elected by a plurality of the votes cast
by the shareholders present in person or by proxy and entitled to vote at the
meeting.
2
If any nominee named herein shall be unable to serve, the proxies will be
voted for a substitute nominee and for the other nominees. The Company has no
reason to believe that any listed nominee will be unable to serve.
Position with the Company
or Other Principal Occupation Director
Name and Age and Other Directorships Since
------------ ----------------------------- --------
NOMINEES TO SERVE UNTIL 2003
Martin L. Killgallon II (53)..President since June 1989. 1981
Frank L. Gallucci (76)........Attorney; Chairman and Managing 1995
Director Devonshire Limited (an
investment company). Previously
served as Senior Partner of
Gallucci, Hopkins & Theisen
(a law firm) from 1976 to 1993.
Joseph A. Bockerstette (43)...Partner, Equity Mangement Group 1997
(an investment company).
Previously President of Seyfert
Foods, Inc.
DIRECTORS CONTINUING TO SERVE UNTIL 2002
Neil H. Borden, Jr. (69)......Professor of Business 1988
Administration (Emeritus), Darden
Graduate School of Business
Administration, University of
Virginia, 1963 to present.
William C. Killgallon (62)....Chairman of the Board and Chief 1965
Executive Officer since June 1989.
Also Director of Columbia Ventures.
Wayne E. Shaffer (78).........Senior Partner of Newcomer, 1996
Shaffer & Spangler (a law firm).
William C. Killgallon and Martin L. Killgallon are brothers. The Messrs.
Killgallon are "control" persons at the Company, as such term is defined by
regulations of the Securities and Exchange Commission.
SECURITIES BENEFICIALLY OWNED BY PRINCIPAL
SHAREHOLDERS AND MANAGEMENT
Under regulations of the Securities and Exchange Commission, persons who
have power to vote or dispose of shares of the Company, either alone or jointly
with others, are deemed to be beneficial owners of such shares.
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Set forth in the following table are the beneficial holdings on the
basis described above as of April 26, 2001 of: (a) each person known by the
Company to own beneficially more than 5% of its outstanding stock, (b) directors
or nominees not listed in (a), and (c) officers and directors as a group and
certain members of the Killgallon family, the owners in each case having the
sole voting and investment power, except as otherwise noted.
% OF
NAME SHARES CLASS
----------------------- ------ -----
William C. Killgallon* ............... 204,013 (1)(2)(3) 23.0%
P.O. Box 111
Bryan, Ohio 43506
Martin L. Killgallon II* ............. 266,213 (1)(3)(4) 30.0%
P.O. Box 111
Bryan, Ohio 43506
William C. Killgallon and Martin
L. Killgallon II as Trustees of
the Company's Employee Stock
Ownership Plan ....................... 77,757 (3) 8.8%
P.O. Box 111
Bryan, Ohio 43506
(b) Joseph A Bockerstette ................ 0
Neil H. Borden, Jr ................... 604 **
Frank L. Gallucci .................... 1,000 **
Wayne E. Shaffer ..................... 1,000 **
(c) Officers and Directors as a Group .... 395,589 (5) 44.6%
(10 Persons)
* A director
** Less than 1%
(1) Includes 1,200 shares held by the Killgallon Foundation, of which William C.
Killgallon, and Martin L. Killgallon II are officers and directors, and as
to which beneficial ownership is disclaimed.
(2) Does not include 5,390 shares owned by his wife or 74,680 shares held by his
wife as trustee for the benefit of children.
(3) Includes 77,757 shares which reflect allocated and unallocated shares held
in the ESOP (as defined below) as to which William C. Killgallon and Martin
L. Killgallon II, as trustees and members of the ESOP's Plan Committee have
shared investment power. Of these 77,757 shares, 16,189 shares reflect
shares that have not been allocated to participants' accounts and to which
William C. Killgallon and Martin L. Killgallon II, as trustees and members
of the Plan Committee have shared voting power. Of the 61,568 allocated
shares, 5,650 and 5,475 shares have been allocated to the accounts of
William C. Killgallon and Martin L. Killgallon II, respectively, as to which
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they have sole voting power. Messrs. Killgallon have no voting power with
respect to the remaining 50,443 shares in the ESOP. Messrs. Killgallon
disclaim beneficial ownership of all the shares held in the ESOP other than
those allocated to their respective accounts.
(4) Includes 31,860 shares held for children of Martin L. Killgallon II as to
which beneficial ownership is disclaimed, but does not include 2,329 shares
owned by his wife or 27,523 shares held by adult children.
(5) Includes shares held by directors in (a) and (b) above, but excludes
duplications.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the annual compensation for the Company's
Chief Executive Officer and the Chief Operating Officer as well as the total
compensation paid to each individual for the Company's three previous fiscal
years:
ANNUAL COMPENSATION
---------------------------------
NAME AND (a) OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY COMPENSATION
---- -------- -------------
William C. Killgallon 2001 $245,736 $ 8,499
Chairman of the Board 2000 230,054 23,678
1999 233,620 --
Martin L. Killgallon II 2001 $245,736 $18,323
President 2000 230,054 --
1999 233,620 --
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors of the Company has
furnished the following report on executive compensation:
The fundamental philosophy of the Company's compensation program is to
offer competitive compensation opportunities for all employees, based primarily
on the individual employee's personal performance relative to their area of
responsibility and the contribution to the short-term and long-term strategic
objectives of the Company. The philosophy is further driven by the concept of
paying minimal annual inflationary increases and, instead, rewarding the
employee through a generous incentive program when the Company is profitable.
The compensation of the executive officers of the Company and its
subsidiaries, and those employees drawing over $75,000 per year is reviewed
annually and recommended by the Compensation Committee to the Board of Directors
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for their approval. Unanimous approval of the recommendation was made by the
Directors. The "committee" is comprised entirely of non-employee directors.
The foundation of the Company's executive compensation program is based
upon the promotion of the Company's short-term and long-term business
objectives, the creation of a performance-oriented environment, and the
enhancement of shareholder value through the greatest achievable profitability.
The elements of the Company's executive compensation program are:
- Base salary compensation
- Annual incentive compensation
Base salary compensation is intended to compensate the executive officers
at a level commensurate with their responsibilities and contribution to the
short- and long-term objectives of the Company. The Committee further takes into
account the local and general economic conditions, future business prospects,
and length of employment with the Company.
Annual incentive compensation is purely short-term performance based, and
is comprised of the Company's Cash Bonus Incentive Plan and the ESOP Profit
Sharing Plan. These plans provide annual incentive awards, payable in cash and
the Company's common stock, respectively, based upon the profitability of the
Company and other considerations.
In its annual review of executive officer compensation for fiscal 2001, and
based on interim financial statements available for fiscal 2001, the Committee
considered the bonus of the Company's Chief Executive Officer, William C.
Killgallon, and Chief Operating Officer, Martin L. Killgallon II, for fiscal
2001 and the level of base salary for 2001 in light of the Company's estimated
overall performance for fiscal 2001, and the performance of the CEO and COO
relative to the long-term objectives of the Company. Based on that review, no
bonuses were paid for fiscal 2001; in addition, the Committee recommended no
salary increases for fiscal 2002. Historically, the Committee takes into account
the success of the Company in meeting its financial performance objectives for
the prior year and the CEO's and COO's length of service to the Company in
determining base salary.
The foregoing report is submitted by the members of the Company's
Compensation Committee.
Wayne E. Shaffer
Neil H. Borden, Jr.
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STOCK PERFORMANCE GRAPH
The following graph sets forth the cumulative total shareholder return,
assuming reinvestment of dividends, to the shareholders of the Company (OAR)
during the five-year period ended January 31, 2001, as well as an overall stock
market index (The Russell 2000 Index) and the Company's peer group index.
Comparison of Five-Year Cumulative Total Return
Ohio Art Company, Russell 200 Index and Peer Group
(Performance Results Through 1/31/2001)
[GRAPH]
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1/31/96 1/31/97 1/31/98 1/31/99 1/31/00 1/31/01
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Ohio Art Company $100.00 $62.96 $52.76 $63.50 $73.19 $11.63
Russell 2000 Index $100.00 $118.89 $140.19 $140.31 $163.14 $164.95
Peer Group $100.00 $105.89 $149.69 $107.29 $56.79 $66.41
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Assumes $100 invested at the close of trading on 1/31/96 in Ohio Art Company
stock, Russell 2000 Index, and Peer Group.
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The Company maintains defined benefit qualified retirement plans applicable
to employees of the Company and its subsidiaries, providing a pension based on
compensation and years of service.
Set forth below are estimated annual benefits payable for the lifetime of a
participant who is in both of the Company's defined benefit plans on retirement
at age 65 in the remuneration and service class specified. Plan beneficiaries
may elect actuarially equivalent benefits including lump sum benefits under one
plan.
ESTIMATED ANNUAL RETIREMENT BENEFITS (1)
Years of Service at Retirement (2)
Average ------------------------------------------
Compensation (3) 10 20 25 30
--------------- ------- ------- ------- -------
$100,000 ............... $14,000 $27,600 $34,300 $41,100
200,000 ............... 26,300 52,200 65,100 78,000
250,000 ............... 32,500 64,500 80,500 96,400
300,000 ............... 38,600 76,800 95,800 114,900
350,000 ............... 44,800 89,100 111,200 133,300
400,000 ............... 50,900 101,400 126,600 151,800
(1) One plan was amended on March 13, 1992 to comply with Tax Reform Act of
1986. Individuals' benefits are never less than the benefits based on the
provisions of the plan prior to amendment, determined as of March 31, 1992,
or, for certain highly compensated employees, as of December 30, 1989.
(2) Benefits will vary slightly between individuals because benefit rate
increases under one plan apply only to service after the effective date of
the increase. Benefits shown include the maximum benefit payable for
retirements during 2001 under this plan.
(3) Under one plan, based on the average of the highest five consecutive years
of the ten years prior to retirement. The Internal Revenue Code limits the
amount of annual compensation that may be taken into account in determining
an individual's benefit accrued under a qualified retirement plan. The
current maximum amount of annual compensation is $170,000, and this limit is
expected to be adjusted annually to reflect cost-of-living increases.
The years of credited service for participants listed in the remuneration
table are William C. Killgallon 32 years and Martin L. Killgallon II, 22 years.
Although current IRS regulations limit compensation that may be taken into
account in determining an individual's pension to $170,000 per year and lower
amounts prior to 2000, the Company has a non-qualified supplemental pension plan
which will make up the difference between actual compensation and the IRS
limitation. The plan covers both individuals listed under Compensation of
Executive Officers. Based on the supplemental plan, the current covered
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compensation for both of the above individuals is William C. Killgallon $323,861
and Martin L. Killgallon II $319,539.
BOARD OF DIRECTORS
The Company's Board of Directors had five regular meetings in the calendar
year 2000. Members of the Board who are not otherwise compensated by the
Company, received a fee of $12,000 for their services in the calendar year 2000,
and in addition, were compensated at a rate of $1,000 for each committee meeting
held on a date other than a Board meeting date and each Board meeting in excess
of five per year attended. Each incumbent director attended and or participated
telephonically in at least 50% of the meetings of the Board and committees of
which he was a member.
COMMITTEES
The Company has standing Executive, Audit, and Compensation Committees, but
no Nominating Committee, changes in the Board of Directors being considered by
the whole Board.
Executive Committee. The members of the Executive Committee are
William C. Killgallon, and Martin L. Killgallon II. The Executive Committee met
two times in calendar year 2000. The Executive Committee has all of the
authority of the Board of Directors (except for action relating to dividends,
stock issuances, and certain fundamental corporate changes) between Board
meetings.
Audit Committee. The members of the Audit Committee are Wayne E. Shaffer,
Neil H. Borden, Jr. and Joseph A. Bockerstette. In calendar year 2000, this
Committee met three times. The Committee advised on the appointment of
independent auditors and consulted with management and with the Company's
independent auditors with respect to the scope of the audit performed by such
auditors, reviewed the audit report and management letter received from the
independent auditors and management's response to the letter, reviewed the
system of internal controls, reviewed performance of the Company personnel
responsible for accounting matters, and discussed fees paid to the independent
auditors.
Compensation Committee. The members of the Compensation Committee are Wayne
E. Shaffer and Neil H. Borden, Jr. In calendar year 2000, this Committee met
once. This Committee reviews and recommends compensation of those employees
drawing over $75,000 per year.
AUDIT COMMITTEE REPORT
The responsibilities of the Audit Committee, which are set forth in the
Audit Committee Charter adopted by the Board of Directors (a copy of which is
attached to this Proxy Statement as Appendix A), include providing oversight to
the Company's financial reporting process through periodic meetings with the
Company's independent auditors and management to review accounting, auditing,
internal controls and financial reporting matters. The management of the Company
is responsible for the preparation and integrity of the financial reporting
information and related systems of internal controls. The Audit Committee, in
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carrying out its role, relies on the Company's senior management, including
senior financial management, and its independent auditors.
We have reviewed and discussed with senior management the Company's
audited financial statements included in the 2000 Annual Report to Stockholders.
Management has confirmed to us that such financial statements (i) have been
prepared with integrity and objectivity and are the responsibility of management
and, (ii) have been prepared in conformity with generally accepted accounting
principles.
We have discussed with Crowe, Chizek and Company LLP, our independent
auditors, the matters required to be discussed by SAS 61 (Communications with
Audit Committee). SAS 61 requires our independent auditors to provide us with
additional information regarding the scope and results of their audit of the
Company's financial statements, including with respect to (i) their
responsibility under generally accepted auditing standards, (ii) significant
accounting policies, (iii) management judgments and estimates, (iv) any
significant audit adjustments, (v) any disagreements with management, and (vi)
any difficulties encountered in performing the audit.
We have received from Crowe Chizek a letter providing the disclosures
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) with respect to any relationships between
Crowe Chizek and the Company that in their professional judgment may reasonably
be thought to bear on independence. Crowe Chizek has discussed its independence
with us, and has confirmed in such letter that, in its professional judgment, it
is independent of the Company within the meaning of the federal securities laws.
Based on the review and discussions described above with respect to the
Company's audited financial statements included in the Company's 2000 Annual
Report to Stockholders, we have recommended to the Board of Directors that such
financial statements be included in the Company's Annual Report on Form 10-K for
filing with the Securities and Exchange Commission..
As specified in the Audit Committee Charter, it is not the duty of the
Audit Committee to plan or conduct audits or to determine that the Company's
financial statements are complete and accurate and in accordance with generally
accepted accounting principles. That is the responsibility of management and the
Company's independent auditors. In giving our recommendation to the Board of
Directors, we have relied on (i) management's representation that such financial
statements have been prepared with integrity and objectivity and in conformity
with generally accepted accounting principals, and (ii) the report of the
Company's independent auditors with respect to such financial statements.
Joseph A. Bockerstette
Neil H. Borden, Jr.
Wayne E. Shaffer
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INDEPENDENT AUDITORS
The Board of Directors selected PriceWaterhouseCoopers LLP, to be the
independent auditors for the current year. On November 3, 2000, the Company was
informed that PriceWaterhouseCoopers LLP had sold their Fort Wayne, Indiana
practice to Crowe, Chizek and Company LLP. Effective November 3, 2000, the
Company terminated its appointment of PriceWaterhouseCoopers LLP as the
Company's principal accountants.
The Audit Committee of the Company's Board of Directors and the full
Board of Directors approved Crowe, Chizek and Company LLP as its principal
accountants. Representatives of Crowe, Chizek and Company LLP are expected to be
present at the annual meeting and will be given the opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.
Audit Fees
The aggregate fees billed by The Company's independent auditors for professional
services rendered in connection with (i) the audit of the Company's annual
financial statements set forth in the Company's Annual Report on Form 10-K for
the year ended January 31, 2001, and (ii) the review of the Company's quarterly
financial statements set forth in the Company's Quarterly Reports on Form 10-Q
for the quarters ended April 30, 2000, July 30, 2000 and October 30, 2000, were
approximately $114,000.
Financial Information Systems Design and Implementation Fees
The aggregate fees billed by the Company's independent auditors for the
Company's most recent fiscal year for professional services rendered in
connection with (i) operating or supervising the operation of, the Company's
information system or managing the Company's local area network and (ii)
designing or implementing a hardware or software system that aggregates source
data underlying the financial statements or generates information that is
significant to the Company's financial statements taken as a whole, were
approximately $103,000.
All Other Fees
The aggregate fees for all other services rendered by its independent auditors
for the Company's most recent fiscal year were approximately $22,000. These fees
were incurred for work performed by the independent auditors with respect to
review of the Company's pension plans, as well as research into tax issues and
requirements for SEC filings.
The Audit Committee has advised the Company that it has determined that the
non-audit services rendered by the Company's independent auditors during the
Company's most recent fiscal year are compatible with maintaining the
independence of such auditors.
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SHAREHOLDER PROPOSALS
For inclusion in the Company's 2002 proxy statement, all shareholder
proposals for consideration at the annual meeting of the shareholders of the
Company to be held in 2002 must be received at the
Company's executive offices by December 3, 2001. Proposals must also comply with
regulations of the Securities and Exchange Commission.
OTHER BUSINESS
The management knows of no other business to be transacted, but if any
other business does come before the meeting, the persons named as proxies will
vote or act with respect to such business in accordance with their best
judgment.
William C. Killgallon
Dated: May 10, 2001 Chairman of the Board
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Appendix A
AUDIT COMMITTEE CHARTER
Organization
There shall be a committee of the Board of Directors to be known as the Audit
Committee. The Audit Committee shall be composed of three or more directors, as
determined by the Board. The members of the Audit Committee will meet the
current independence and experience requirements of the American Stock Exchange
(AMEX).
Statement of Policy
The Audit Committee shall provide assistance to the corporate directors in
fulfilling their responsibility to the shareholders relating to corporate
accounting, reporting practices of the company, and the quality and integrity of
the financial reports of the company. In so doing, it is the responsibility of
the Audit Committee to maintain free, effective, and open means of communication
among the directors, the independent auditors, and the financial management of
the company.
Responsibilities
In carrying out its responsibilities, the Audit Committee believes its policies
and procedures should remain flexible, in order to best react to changing
conditions and to ensure to the directors and shareholders that the corporate
accounting and reporting practices of the company are in accordance with all
requirements and are of the highest quality.
In carrying out these responsibilities, the Audit Committee will:
Review and recommend to the directors, the independent auditors to be selected
to audit the financial statement of the company, and its divisions and
subsidiaries. The company's independent auditors are ultimately accountable to
the Audit Committee and the Board of Directors, and the Audit Committee and the
Board of Directors have the ultimate authority and responsibility to select,
evaluate and, where appropriate, replace the independent auditors.
Assess the external auditors' process for identifying and responding to key
audit and internal control risks.
Review the external auditors' identification of issues and business and
financial risks and exposures.
Confirm and assure the independence of the independent auditors, including a
review of the nature of all services provided by the independent auditors and
the related fees.
Require the independent auditors to periodically submit a formal written
statement delineating all relationships between the auditors and the company,
actively engage in a dialogue with the independent auditors with respect to any
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disclosed relationships or services that may impact the objectivity and
independence of the independent auditors, and, if appropriate, recommend that
the Board of Directors take appropriate action in response to the independent
auditors' report to satisfy itself of the independent auditors' independence.
Meet with the independent auditors and financial management of the company to
review the scope of the proposed audit for the current year and the audit
procedures to be utilized, and at the conclusion thereof review such audit,
including any comments or recommendations of the independent auditors.
Review with the independent auditors, and financial and accounting personnel,
the adequacy and effectiveness of the accounting and financial controls of the
company, and elicit any recommendation for the improvement of such internal
control procedures or particular areas where new or more effective controls or
procedures are desirable. Particular emphasis should be given to the adequacy of
such internal controls to expose any payment, transactions, or procedures that
might be deemed illegal or otherwise improper. Further, the Audit Committee
periodically should review company policy statements to determine their
adherence to the code of conduct.
Instruct the independent accountants to advise in writing to the Audit Committee
and management of the company of any matters identified through procedures
followed for interim quarterly financial statements, such notification to be
made prior to any public release.
Provide sufficient opportunity for the independent auditors to meet with the
members of the Audit Committee without members of management present. Among the
items to be discussed in these meetings are the independent auditors' evaluation
of the company's financial, accounting, and auditing personnel, and the
cooperation that the independent auditors received during the course of the
audit.
Review accounting and financial human resources and succession planning within
the company.
Submit the minutes of all meetings of the Audit Committee to, or discuss the
matters discussed at each committee meeting with, the Board of Directors.
Investigate any matters brought to its attention within the scope of its duties,
with the power to retain outside counsel for this purpose at the company's
expense if, in its judgment, that is appropriate.
Review and reassess the adequacy of this charter on an annual basis and
recommend any proposed changes to the Board of Directors for approval.
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PROXY SOLICITED BY BOARD OF DIRECTORS
THE OHIO ART COMPANY - MEETING OF SHAREHOLDERS - JUNE 5, 2001
The undersigned hereby appoints Joseph A. Bockerstette and Jerry D. Kneipp,
and each of them and each with power of substitution to vote the stock of the
undersigned at the annual meeting of shareholders of THE OHIO ART COMPANY to be
held June 5, 2001 or at any adjournment thereof, with all the powers the
undersigned would possess if present. The proxies are instructed to vote as
follows:
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ITEM 1. IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
(Continued and to be signed and dated on the other side)
Please mark boxes or X in blue or black ink.
1. ___ FOR ___ WITHHOLD AUTHORITY to elect, except as indicated, the
three nominees listed below:
Martin L. Killgallon II, Frank L. Gallucci, Joseph A. Bockerstette
Instructions: To withhold authority to vote for any nominee, write
the nominee's name on this line:
- ---------------------------------------------------------------------
2. In their discretion on all other matters which may properly come
before the meeting.
Please sign name(s) exactly as imprinted.
Executors, administrators, trustees, and others
signing in a representative capacity should
indicate the capacity in which they sign.
Dated: _________________________,2001
-------------------------------------
(Signature)
-------------------------------------
(Signature)
PLEASE DATE, SIGN, AND RETURN THIS PROXY