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SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14c INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
|_| Preliminary information statement |_| Confidential, for use by the
Commission Only (as permitted
by Rule 14c-5(d)(2))
|X| Definitive information statement
RVM INDUSTRIES, INC.
(Name of Registrant as Specified in Charter)
JOHN J. STITZ, RVM INDUSTRIES, INC.
753 WEST WATERLOO ROAD, AKRON, OHIO 44314-1519;(330)753-4545
(Name of Person(s) Filing the Information Statement)
Payment of filing fee (check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14c-5(g)
and 0-11
|_| Fee paid previously with preliminary materials
|_| Check box if any part of the fee is offset as provided by
Exchange Act Rule 0- 11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
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RVM INDUSTRIES, INC.
753 WEST WATERLOO ROAD
AKRON, OH 44314-1519
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 9, 1998
TO THE SHAREHOLDERS OF RVM INDUSTRIES, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of RVM
Industries, Inc. (the "Company") for the fiscal year ended March 31, 1998 will
be held at the Akron West Hilton, 3180 W. Market Street, Fairlawn, Ohio on
September 9, 1998 at 10:00 a.m., Eastern Standard Time, for the following
purposes:
1. To elect two (2) persons as directors of the Company for a
term of three (3) years and one (1) person as a director of
the Company for a term of two (2) years; and
2. To amend the RVM Industries, Inc. Stock Option Plan (formerly
the Ravens Metal Products, Inc. Stock Option Plan) to increase
by 100,000 shares the number of shares with respect to which
the Board of Directors is authorized to grant options
thereunder; and
3. To transact such other business as may properly come before
the Annual Meeting and any adjournments thereof.
The directors have set the close of business on August 3, 1998 as the record
date for the Annual Meeting. Shareholders of record at the close of business on
the record date have the right to receive notice of and to vote at the Annual
Meeting and any adjournments thereof. Management of the Company is not
soliciting proxies in connection with the Annual Meeting, and shareholders are
requested NOT to send proxies to the Company.
Nicholas T. George
Secretary
Akron, Ohio
August 10, 1998
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RVM INDUSTRIES, INC.
INFORMATION STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD SEPTEMBER 9, 1998
GENERAL INFORMATION
This Information Statement is being furnished to shareholders of RVM Industries,
Inc., a Delaware corporation (the "Company"), on or about August 10, 1998, in
connection with the Annual Meeting of Shareholders of the Company, to be held at
the Akron West Hilton, 3180 W. Market Street, Fairlawn, Ohio at 10:00 a.m.,
Eastern Standard Time, on September 9, 1998 and at any adjournment thereof
(the"Meeting"). The Company's principal executive offices are located at 753 W.
Waterloo Road, Akron, Ohio 44314-1519; telephone (330) 753-4545.
WE ARE NOT ASKING YOU FOR A PROXY, AND YOU
ARE REQUESTED NOT TO SEND US A PROXY
VOTING SECURITIES AND RECORD DATE
Only shareholders of record at the close of business on August 3, 1998 (the
"Record Date") have the right to receive notice of and to vote at the Meeting
and any adjournment thereof. As of the Record Date, 1,936,755 shares of the
Company's $.01 par value common stock (the "Common Stock") were issued and
outstanding. There were no shares of preferred stock of the Company issued and
outstanding as of the Record Date, and there are presently no such shares issued
and outstanding. Each shareholder of record is entitled to one vote for each
share held.
Under Delaware law and the Company's Certificate of Incorporation and By-Laws,
if a quorum is present at the Meeting, the nominees for election as directors
who receive the greatest number of votes cast for the election of directors at
the Meeting by the shares present and entitled to vote will be elected as
directors. The election of directors is the subject of Proposal No. 1, which is
presented below. An abstention from voting any share with respect to the
election of a nominee for director will have the practical effect of a vote
against the nominee. A broker non-vote with respect to any share will not affect
the election of a director, since the share is not considered present for voting
purposes. Proposal No. 2, also discussed below, reflects a recommendation by the
Board of Directors to amend the Company's Stock Option Plan to increase the
number of shares with respect to which options can be granted thereunder to key
personnel. An abstention from voting any share on Proposal No. 2, or a broker
non-vote with respect thereto, will have the practical effect of a vote against
Proposal No. 2. However, Jacob Pollock can ensure the election of any or all of
the nominees for director by voting his shares in favor of such nominee or
nominees, and he can assure passage of Proposal No. 2 by voting his shares in
favor thereof. (See "Vote of Principal Shareholder," below). One-third of the
outstanding shares of the Common Stock is required to be present in person or by
proxy at the Meeting to constitute a quorum for the transaction of business.
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VOTE OF PRINCIPAL SHAREHOLDER
Jacob Pollock, Chairman of the Board and Chief Executive Officer, who owns
82.09% of the Common Stock, has advised the Company that he intends to vote his
shares for the election of each nominee for director (Proposal No. 1) and for
the amendment to increase the number of shares with respect to which options can
be granted under the Company's Stock Option Plan (Proposal No. 2). Thus, the
required vote is assured, and it is expected that each nominee will receive the
necessary votes for election and that the amendment to the Stock Option Plan
will be adopted.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the knowledge of the Company, the only owner of record or holder, as of
August 3, 1998, of more than 5% of the Company's Common Stock is set forth in
the following table:
NAME AND
TITLE OF ADDRESS OF AMOUNT AND NATURE OF PERCENT
CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
Common Stock Jacob Pollock 1,589,918(1) 82.09%
753 W. Waterloo Road
Akron, Ohio 44314
(1) Jacob Pollock has sole voting and investment power with respect to the
listed shares.
The following table shows the number of shares of the Company's Common Stock
beneficially owned directly or indirectly by each director and nominee, each
named executive officer and by all directors and executive officers of the
Company as a group, as of August 3, 1998.
TITLE OF NAME OF AMOUNT AND NATURE OF PERCENT
CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
Common Stock Jacob Pollock 1,589,918(2) 82.09%
Nicholas T. George 57,690(3) 2.98%
C. Stephen Clegg 0 0.00%
Richard D. Pollock 81,535(3) 4.21%
Lowell P. Morgan 0 0.00%
All directors and 1,671,453 86.30%
officers as a group
(6 persons).
(2) Jacob Pollock has sole voting and investment power with respect to the
listed shares.
(3) 57,690 shares are held in an irrevocable trust for the benefit of Richard
Pollock's children. Richard Pollock and Nicholas T. George, as co-trustees,
equally share voting and investment power with respect to these shares. 19,230
shares listed for Richard Pollock are owned by his
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spouse; Mr. Pollock disclaims beneficial ownership of these shares. The
remaining 4,615 shares are owned directly by Mr. Pollock.
No Preferred Stock is currently outstanding.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Two (2) current directors, whose terms are expiring, are proposed for
re-election at the Meeting to serve for a term of three (3) years; provided,
however, that each would continue to serve thereafter until his successor were
elected and qualified. One (1) new director also is proposed for election at the
Meeting to serve for a term of two (2) years or until his successor is elected
and qualified.
The following information is furnished with respect to the two current directors
who have been nominated for re-election as directors of the Company, each of
whom has agreed to serve a three-year term if re-elected:
NAME AGE DIRECTOR PRINCIPAL OCCUPATION;
SINCE BUSINESS EXPERIENCE
& OTHER DIRECTORSHIPS
C. Stephen Clegg 48 May 3, 1991 Chairman of the Board of Directors
(For term and Chief Executive Officer of
expiring in Diamond Home Services, Inc., a
2001) marketer and contractor of installed
home improvement products, since
February 1996; Chairman of the Board of
Directors of Mid-West Spring
Manufacturing Company, Inc., a
manufacturer of specialty springs, and
Globe Building Materials, Inc., a
manufacturer of home building products,
for more than five years; and Director
of Birmingham Steel Corporation.
Richard D. Pollock 42 May 3, 1991 President of the Company since
(For term March 31, 1997; President of Albex
expiring in since May 1991; Vice President of J.
2001) Pollock & Company since February
1990; and prior to joining J. Pollock &
Company, Vice President and then
President of Barmet Aluminum Corporation
for more than five years. Richard
Pollock is the son of Jacob Pollock.
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The following information is furnished with respect to the one nominee for
election as director who has agreed to serve a two-year term if elected:
Louis N. Strike 52 (For term Managing Director and Partner of
expiring in Ballenger, Strike and Associates
2000) LLP, management consultants, from
January 1996 to present; President,
CINPAC, Inc., a food processing and
packaging contractor, from April 1992 to
December 1995.
Each of the following individuals is a member of the Board of Directors, whose
present term of office will continue beyond the Meeting for the period
indicated:
Jacob Pollock 74 May 3, 1991 Chairman of the Board of Directors,
(Term expires in Chief Executive Officer, and
1999) Treasurer since May 3, 1991, the
date he acquired controlling interest in
the Company; Chairman of the Board and
President of J. Pollock & Company, a
company principally engaged in the sale
of aluminum, private investment, and
consulting, since April 1989; Chief
Executive Officer of Barmet Aluminum
Corporation, an aluminum company, from
1949-1989; Director of Mid- West Spring
Manufacturing Company, Inc., Diamond
Home Services, Inc. and several
nonpublic companies.
Nicholas T. George 54 May 3, 1991 Attorney; Secretary of the Company
since May 1991; President of the law
firm of Nicholas T. George &
Associates from 1979 to 1997;
joined the law firm of Buckingham,
Doolittle & Burroughs as a partner
in 1997.
BOARD OF DIRECTORS
During the fiscal year ended March 31, 1998, the Company's Board of Directors
held three regular meetings. Each director attended all meetings of the Board
and all committees on which he served during the fiscal year.
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The Company has a standing Audit Committee of the Board of Directors, currently
composed of Richard Pollock, Chairman, and Nicholas T. George. Functions of the
Audit Committee include recommending the independent public accountants to be
engaged by the Company, approving the scope of the audit performed by the
independent public accountants, reviewing with the independent public
accountants the financial statements and their accompanying report, and
reviewing the Company's system of internal controls. The Audit Committee held
two meetings during the fiscal year ended March 31, 1998.
The Board of Directors does not have a standing Nominating Committee. The
functions of a nominating committee are performed by the Board of Directors as a
whole.
The Company's Board of Directors has a standing Compensation Committee composed
of Jacob Pollock, Chairman, and C. Stephen Clegg. The Compensation Committee did
not meet during the fiscal year ended March 31, 1998.
The Board's Pension Committee is currently composed of Jacob Pollock, Chairman,
and Nicholas T. George. Functions of this committee include administration of
the plans and recommending amounts of contributions by the Company to the plans.
The Committee did not meet during the fiscal year ended March 31, 1998.
The Stock Option Committee consists of Jacob Pollock, Chairman, and Richard
Pollock. The Stock Option Committee is responsible for administering the RVM
Industries, Inc. Stock Option Plan. The Committee met once during the fiscal
year ended March 31, 1998.
EXECUTIVE OFFICERS
Mr. Morgan, age 64, previously was employed by the Company from 1959 to 1983.
During his former tenure with the Company, he served as an officer and director
for many years. Subsequently, he was Product Manager for East Manufacturing
Corporation from 1983-1990 and Vice President of Travis Body and Trailer, Inc.
from 1990-1991. All his former employers manufactured truck trailers.
Mr. Stitz, age 42, a Certified Public Accountant, received an M.B.A. degree from
The Wharton School of the University of Pennsylvania in 1988 and a B.S. degree
in Accounting from Wake Forest University in 1978. He served as Chief Financial
Officer of Environmental Tectonics Corporation, a manufacturer, from 1988-1989,
and as Assistant to the Chairman of Strick Companies, a manufacturer and lessor
of truck trailers, in 1990. He was employed by Coopers & Lybrand, CPAs, from
1978-1984.
Officers serve at the pleasure of the Board of Directors without specific terms
of office. All other executive officers are directors; information concerning
these persons appears above under the caption "Proposal No. 1, Election of
Directors."
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of copies of Forms 3, 4 and 5 furnished to the
Company during or with respect to the fiscal year ended March 31, 1998, the
Company is not aware of any person
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subject to Section 16 of the Securities Exchange Act of 1934 with respect to the
Company who failed to file on a timely basis reports required by Section 16(a)
during the most recent fiscal year or prior fiscal years, except that Jacob
Pollock, Richard Pollock and Nicholas George, each an officer and director of
the Company, John Stitz and Lowell Morgan, each an officer of the Company, and
C. Stephen Clegg, a director of the Company, each filed a late Form 5 containing
one transaction that was not reported on a timely basis.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table discloses compensation in excess of $100,000 awarded to,
earned by or paid to any executive officer:
NAME AND PRINCIPAL FISCAL ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION
(1)
Jacob Pollock (2) 1998 $127,600 $ 0 $ 0
Chief Executive Officer
Richard D. Pollock (2) 1998 183,700 0 5,511
President
Lowell P. Morgan 1998 $82,944 $21,580 $1,045
President, Ravens, Inc. 1997 $82.975 $20,836 $1,038
1996 $82,300 $21,945 $1,042
(1) Amount contributed to the named person's 401(k) plan account.
(2) Jacob Pollock and Richard D. Pollock did not receive any cash or noncash
compensation from the Company until January 1, 1998. The Company paid $330,000,
$428,000 and $314,000 in 1998, 1997 and 1996, respectively, to J. Pollock &
Company for general management services. The compensation disclosed was paid by
the Company from January 1, 1998 to March 31, 1998 and by J. Pollock & Company
from April 1997 to December 31, 1997.
In 1993, RVM adopted a Stock Option Plan which provides for the granting of
options to acquire up to 50,000 shares of the Company's Common Stock. The Plan
authorizes the granting of incentive stock options to employees of the Company
and nonqualified stock options to employees, officers and directors, whether or
not on the Company's payroll or otherwise paid for services. The Plan provides
that the option price shall not be less than 100% (110% in the case of a person
owning more than 10% of the Company's stock) of the current market price of the
stock on the date of the grant and that the term of the option shall be fixed at
the date of the grant. The Plan terminates on July 7, 2003.
Directors of RVM are paid $1,000 for Board of Directors meetings which they
attend. Additional compensation is not paid for committee meetings. In 1995, C.
Stephen Clegg and Nicholas T.
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George were each granted options to purchase 250 shares of Common Stock. The
options have an exercise price of $4.00 per share and expire on April 7, 1999.
In 1998, Mr. Clegg and Mr. George were each granted options to purchase 1,000
shares of Common Stock. The options have an exercise price of $12.00 per share
and expire on March 27, 2003.
The following table discloses for each of the named executive officers
information regarding stock options granted during 1998:
OPTION GRANTS IN LAST FISCAL YEAR
- ---------------------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Individual Grants Annual Rates of Stock
Price Appreciation for
Option Term (2)
------------------------------------------------------------------- ----------------------------------
Number of % of total
Securities Options Exercise
Underlying Granted to or Base
Options Employees Price Expiration
Name Granted in Fiscal ($/sh) Date 5%($) 10%($)
(#) Year (1)
- ------------------- ---------------- ---------------- -------------- ----------------- ------------- -------------------
Jacob 4,000 13.3% $13.20 3/27/03 $ 8,480 $24,520
Pollock
Richard D. 4,625 15.4 12.00 3/27/03 15,355 33,901
Pollock
Lowell P. 2,200 7.3 12.00 3/27/03 7,304 16,126
Morgan
(1) The Company granted options representing 30,021 shares to employees during
1998.
(2) The dollar amounts in these columns represent the value of the options
assuming 5% and 10% rates of appreciation from the market price of the Common
Stock at the date of grant. These appreciation rates are required by the
Securities and Exchange Commission when the "Potential Realizable Value"
alternative is used and are not intended to represent a forecast of the
Company's stock price. Actual gains, if any, in the stock price and on stock
option exercises are dependent on the future performance of the Common Stock and
overall market conditions.
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The following table discloses certain additional information regarding options
held by the named executive officers:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised In-the-
Underlying Unexercised Money Options at March 31,
Options at March 31, 1998 1998 ($)
(#)
---------------------------------------- ----------------------------------------
Shares
Acquired Value
Name on Realized Exercisable Unexercisable Exercisable Unexercisable
Exercise
(#)
- ----------------- --------------- -------------- ----------------- --------------------- ------------------ ---------------------
Jacob 4,000 0 $ 0 $0
Pollock
Richard D. 4,625 0 0 0
Pollock
Lowell P. 4,700 0 20,000 0
Morgan
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board of Directors consists of Jacob
Pollock, Chief Executive Officer, and C. Stephen Clegg. Mr. Pollock is a
Director and Mr. Clegg is Chairman of the Board of Directors of Mid-West Spring
Manufacturing Company, Inc. and Diamond Home Services, Inc., public companies,
and Globe Building Products, Inc., a nonpublic company. Mr. Pollock is a member
of the Compensation and Benefits Committee of the Board of Directors of Mid-West
Spring Manufacturing Company, Inc.
REPORT OF COMPENSATION COMMITTEE
The Committee has not formulated policies for compensation to Mr. Pollock or
other executive officers which relate compensation to corporate performance. The
compensation of each executive officer is determined by negotiation between the
executive officer and Mr. Pollock subject to the approval of the Committee and
the Board of Directors.
By: Jacob Pollock, Chairman
C. Stephen Clegg
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PERFORMANCE GRAPH
The following line graph shows a comparison of cumulative total returns,
assuming reinvestment of dividends, for a hypothetical investment of $100 made
on March 31, 1993 in the Common Stock of the Company, the NASDAQ Composite Index
and an index of peer companies ("peer group") selected by the Company. The peer
group consists of the following companies: Dorsey Trailers, Inc., Featherlite
Mfg., Inc., Miller Industries, Inc./TN, Wabash National Corp., Supreme
Industries, Inc., Easco, Inc., International Aluminum Corporation and Tredegar
Industries, Inc.
Fruehauf Trailer Corp. ceased business in 1998, was deleted from the peer group,
and was replaced by Supreme Industries, Inc. Easco, Inc., International Aluminum
Corporation, and Tredegar Industries, Inc. manufacture aluminum extrusions,
among other products, and were added to the peer group to provide peer companies
to the Albex portion of the Company.
The Company believes that the large returns in 1998 and 1997 are due to J.C.
Bradford & Co. making a market in the Company's Common Stock beginning in the
first quarter of 1997 and Herzeg Heine Guduld making a market beginning in the
fourth quarter of 1998. In addition, the Company retained investor relations
consultants in January 1998. Prior to May 1996, the Company's Common Stock did
not actively trade, but a market maker quoted bid prices and traded shares
infrequently.
RVM NASDAQ PEER
INDUSTRIES, COMPOSITE GROUP
INC. INDEX
3/31/93 100.00 100.00 100.00
3/31/94 1,000.00 107.73 110.68
3/31/95 2,500.00 118.41 144.91
3/31/96 1,875.00 158.64 127.74
3/31/97 13,750.00 177.02 162.95
3/31/98 30,000.01 265.99 226.87
[GRAPH]
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
J. Pollock & Company, wholly owned by Jacob Pollock, a Director and majority
shareholder of RVM, purchases materials and provides or contracts for certain
administrative services for the Company and charges the Company at its cost.
Such transactions totaled $634,151 in 1998. J. Pollock & Company provided
management services to the Company under agreements which terminated on December
31, 1997. The Company paid $330,000 in 1998 for these services. $2,872 was owed
at March 31, 1998.
The Company leases office and manufacturing space from a corporation in which
Richard Pollock and Bruce Pollock are shareholders. The lease has a term of five
years expiring December 31, 1999 at a monthly base rent of $9,300 with annual
increases determined by the change in the Consumer Price Index, plus the
Company's share of utilities, real estate taxes, insurance, and property
maintenance. The Company paid approximately $116,000 in 1998. Richard Pollock
and Bruce Pollock are sons of Jacob Pollock.
Since September 1, 1997, the Company has leased office space from Pollock Real
Estate, Ltd., of which Jacob Pollock and his wife are members. The lease is for
three years expiring August 31, 2000 at a monthly base rent of $5,500 plus the
Company's share of utilities, real estate taxes, insurance and property
maintenance. The Company paid $44,192 in 1998.
The Company purchased aluminum materials from The Aluminum Warehouse, Inc., of
which Richard Pollock and his family are shareholders, totaling $114,356 in
1998. $7,801 was owed at March 31, 1998. The Company sold aluminum extrusions to
The Aluminum Warehouse, Inc. totaling $1,306,480 in 1998. $222,657 was owed at
March 31, 1998.
The Company hired temporary personnel from Flex-Team Incorporated, wholly owned
by the Jacob Pollock Irrevocable Trust, of which Richard Pollock and other
family members are beneficiaries, totaling $160,518 in 1998. $47,993 was owed at
March 31, 1998.
See Notes 2 and 12 to the consolidated financial statements regarding
acquisitions from and notes payable to related parties. See Notes 5 and 6 to the
consolidated financial statements regarding guarantees of certain debt of the
Company by related parties. The financial statements are included in the 1998
Annual Report being delivered with this Information Statement and also were
filed as part of the Company's Annual Report on Form 10-K for its fiscal year
ended March 31, 1998.
Management believes that the terms of the above transactions are comparable to
those which would have been obtainable from unaffiliated sources.
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PROPOSAL NO. 2
AMENDMENT OF STOCK OPTION PLAN
TO INCREASE AUTHORIZED SHARES
On July 7, 1993, the Board of Directors adopted the Ravens Metal Products, Inc.
Stock Option Plan (the "Plan"). The Plan was subsequently approved by the
holders of a majority of the Company's Common Stock at the annual meeting of
shareholders held September 9, 1993. Following the Company's reorganization the
Plan was renamed the "RVM Industries, Inc. Stock Option Plan." The purpose of
the Plan is to provide the Company with a means of attracting and retaining the
services of directors, executive personnel and key employees and to advance the
interests of the Company and its shareholders by affording to certain key
directors, officers and employees, upon whose judgment, initiative and efforts
the Company is largely dependent for the successful conduct of its business, an
opportunity to acquire and retain a proprietary interest in the Company by
ownership of its Common Stock.
The Plan authorizes the grant from time to time of both incentive stock options
("ISOs"), which qualify under Section 422 of the Internal Revenue Code, and
nonqualified stock options ("NQSOs"). ISOs may be granted only to employees and
officers of the Company or any now existing or subsequently acquired or created
subsidiary. NQSOs may be granted to employees, officers or directors, whether or
not on the Company's payroll or otherwise paid for services.
The number of shares of the Company's Common Stock which may be subject to
options granted under the Plan is 50,000. Such shares may be either authorized
but unissued shares or shares acquired by the Company, including shares
purchased in the open market, as shall be determined by the Board of Directors.
Shares subject to options which are no longer exercisable shall then become
available for issuance pursuant to other options. The Company proposes to
increase by 100,000 shares the number of shares that may be subject to options
granted under the Plan. Upon approval of Proposal No. 2, the aggregate number of
shares which may be subject to options granted under the Plan will be 150,000.
INDEPENDENT PUBLIC ACCOUNTANTS
No independent public accountants have yet been selected or recommended to the
shareholders because the Company desires to maintain flexibility regarding the
choice of auditors. Under the Company's by-laws and Certificate of
Incorporation, the authority to select the Company's independent public
accountants is reserved to the Board of Directors. Ernst & Young LLP served as
the Company's independent public accountants for the fiscal year ended March 31,
1998. Management of the Company wishes to reserve the right to reevaluate this
choice with regard to the current fiscal year, although Ernst & Young LLP has
not resigned or been terminated, and the Company has no definitive intention to
change auditors at this time. A representative of Ernst & Young LLP is not
expected to be present at the Meeting.
At a meeting held on December 15, 1997, the Board of Directors of the Company
approved the engagement of Ernst & Young LLP as its independent auditors for the
fiscal year ending March
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31, 1998 to replace Coopers & Lybrand L.L.P., who were dismissed as auditors of
the Company. The Audit Committee of the Board of Directors approved the change
in auditors on December 15, 1997.
The reports of Coopers & Lybrand L.L.P. on the Company's financial statements
for the past two fiscal years did not contain an adverse opinion or a disclaimer
of opinion and were not qualified or modified as to uncertainty, audit scope, or
accounting principles.
In connection with the audits of the Company's financial statements for each of
the two fiscal years ended March 31, 1997, and in the subsequent interim period,
there were no disagreements with Coopers & Lybrand L.L.P. on any matters of
accounting principles or practices, financial statement disclosure, or auditing
scope and procedures which, if not resolved to the satisfaction of Coopers &
Lybrand L.L.P., would have caused Coopers & Lybrand L.L.P. to make reference to
the matter in their report.
SHAREHOLDERS' PROPOSALS
All proposals intended to be presented by a shareholder at the 1999 Annual
Meeting of the Company's Shareholders must be received by the Company no later
than June 10, 1999 at the Company's offices addressed to 753 W. Waterloo Road,
Akron, Ohio 44314-1519, for inclusion in the Company's proxy material or
Information Statement for the 1999 Annual Meeting of Shareholders.
The Company's 1998 Annual Report is being delivered to shareholders with this
Information Statement. A copy of the Company's Form 10-K for the fiscal year
ended March 31, 1998, as filed with the Securities and Exchange Commission, may
be obtained from the Company by following the procedure described in the 1998
Annual Report under the caption "Form 10-K."
By Order of the Board of Directors,
Nicholas T. George
Secretary
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