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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12.
SHILOH INDUSTRIES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(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): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] 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.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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[SHILOH LOGO]
Suite 202, 103 Foulk Road
Wilmington, Delaware 19803
Telephone: (302) 998-0592
February 26, 2001
Dear Shiloh Stockholder:
You are cordially invited to attend the 2001 Annual Meeting of Shiloh
Industries, Inc., which will be held on Wednesday, March 28, 2001, at 10:00 a.m.
at the Holiday Inn Select, 15471 Royalton Road, Strongsville, Ohio 44136.
This year, your Board of Directors is recommending that you (i) elect three
Directors of a class whose term is described in the proxy statement, (ii) amend
the 1993 Key Employee Stock Incentive Plan and (iii) approve the appointment of
the independent certified public accountants of the Company for the current
fiscal year.
The Company has enclosed a copy of its Annual Report for the fiscal year
ended October 31, 2000 with this notice of annual meeting of stockholders and
proxy statement. If you would like another copy of the 2000 Annual Report,
please contact Craig A. Stacy at Shiloh Industries, Inc., 5389 W. 130th Street,
Cleveland, Ohio 44130-1094, (216) 267-2600, and you will be sent one.
Please read the enclosed information carefully before completing and
returning the enclosed proxy card. Returning your proxy card as soon as possible
will assure your representation at the meeting, whether or not you plan to
attend. If you do attend the annual meeting, you may, of course, withdraw your
proxy should you wish to vote in person.
Sincerely,
/s/ John F. Falcon
JOHN F. FALCON
President and Chief Executive Officer
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SUITE 202, 103 FOULK ROAD
WILMINGTON, DELAWARE 19803
----------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MARCH 28, 2001
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The Annual Meeting of Stockholders of Shiloh Industries, Inc., a Delaware
corporation (the "Company"), will be held on Wednesday, March 28, 2001, at 10:00
a.m. (the "Annual Meeting"), at the Holiday Inn Select, 15471 Royalton Road,
Strongsville, Ohio 44136, for the purpose of:
(1) Electing three (3) Directors of a class whose term is described in the
proxy statement;
(2) Approving the amendments to the 1993 Key Employee Stock Incentive Plan
to increase the number of shares of Common Stock subject to the plan;
(3) Approving the appointment of the independent certified public
accountants of the Company for the fiscal year ending October 31, 2001;
and
(4) Transacting such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on February 16, 2001
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting or any adjournment or postponement thereof.
By Order of the Board of Directors
/s/ David J. Hessler
DAVID J. HESSLER
Secretary
February 26, 2001
The Company's Annual Report for the fiscal year ended October 31, 2000 (the
"2000 Annual Report") is enclosed. The 2000 Annual Report contains financial and
other information about the Company, but is not incorporated into the Proxy
Statement and is not deemed to be a part of the proxy soliciting material.
EVEN IF YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY COMPLETE,
SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD. A SELF-ADDRESSED ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. STOCKHOLDERS WHO ATTEND THE ANNUAL MEETING MAY REVOKE THEIR PROXIES AND
VOTE IN PERSON IF THEY SO DESIRE.
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SHILOH INDUSTRIES, INC.
Suite 202, 103 Foulk Road
Wilmington, Delaware 19803
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MARCH 28, 2001
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Shiloh Industries, Inc., a Delaware corporation (the
"Company"), of proxies to be used at the annual meeting of stockholders of the
Company to be held on March 28, 2001 (the "Annual Meeting"). This Proxy
Statement and the related proxy card are being mailed to stockholders commencing
on or about February 26, 2001.
If the enclosed proxy card is executed and returned, the shares represented
by it will be voted as directed on all matters properly coming before the Annual
Meeting for a vote. Returning your completed proxy will not prevent you from
voting in person at the Annual Meeting should you be present and desire to do
so. In addition, the proxy may be revoked at any time prior to its exercise
either by giving written notice to the Company or by submission of a later dated
proxy.
Stockholders of record of the Company at the close of business on February
16, 2001 will be entitled to vote at the Annual Meeting. On that date, the
Company had outstanding and entitled to vote 14,798,094 shares of Common Stock.
A list of such holders will be open to the examination of any stockholder for
any purpose germane to the meeting at the place of the Annual Meeting for a
period of ten days prior to the meeting. Each share of Common Stock is entitled
to one vote. At the Annual Meeting, inspectors of election shall determine the
presence of a quorum and shall tabulate the results of the vote of the
stockholders. The holders of a majority of the total number of outstanding
shares of Common Stock entitled to vote must be present in person or by proxy to
constitute the necessary quorum for any business to be transacted at the Annual
Meeting. Properly executed proxies marked "abstain," as well as proxies held in
street name by brokers that are not voted on all proposals to come before the
Annual Meeting ("broker non-votes"), will be considered "present" for purposes
of determining whether a quorum has been achieved at the Annual Meeting.
The three nominees for Director receiving the greatest number of votes cast
at the Annual Meeting in person or by proxy shall be elected. Consequently, any
shares of Common Stock present in person or by proxy at the Annual Meeting, but
not voted for any reason have no impact in the election of Directors, except to
the extent that the failure to vote for an individual may result in another
individual receiving a larger number of votes. All other matters to be
considered at the Annual Meeting require for approval the favorable vote of a
majority of shares voted at the meeting in person or by proxy. Stockholders have
no right to cumulative voting as to any matter, including the election of
Directors. If any proposal at the Annual Meeting must receive a specific
percentage of favorable votes for approval, abstentions in respect of such
proposal are treated as present and entitled to vote under Delaware law and
therefore such abstentions have the effect of a vote against such proposal.
Broker non-votes in respect of any proposal are not counted for purposes of
determining whether such proposal has received the requisite approval.
The shares represented by all valid proxies received will be voted in the
manner specified on the proxies. Where specific choices are not indicated on a
valid proxy, the shares represented by such proxies received will be voted: (i)
for the nominees for Director named in this Proxy Statement; (ii) for approval
of the amendments to the 1993 Key Employee Stock Incentive Plan; (iii) for
approval of the appointment of PricewaterhouseCoopers LLP, as independent
certified public accountants; and (iv) in accordance with the best judgment of
the persons named in the enclosed proxy, or their substitutes, for any other
matters which properly come before the Annual Meeting.
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ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation provides that the Board
of Directors will be divided into three classes of Directors to be as nearly
equal in number of Directors as possible. Class II consists of Ronald C. Houser,
James C. Fanello and James A. Karman and their current term of office will
expire at this Annual Meeting. Class I currently consists of Maynard H. Murch IV
and David J. Hessler and their current term of office will expire at the 2003
annual meeting of stockholders. Class III consists of John F. Falcon, Curtis E.
Moll and Theodore K. Zampetis and their current term of office will expire at
the 2002 annual meeting of stockholders. At each annual stockholders' meeting,
Directors are elected for a term of three years and hold office until their
successors are elected and qualified or until their earlier removal or
resignation. Newly created directorships resulting from an increase in the
authorized number of Directors or any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or other cause may
be filled by a majority of the remaining Directors then in office. All
Directors, other than Directors who are employees of the Company, receive a
retainer of $5,000 per quarter. In addition, each such Director receives a fee
of $1,500 for each Board of Directors meeting and $1,000 for each committee
meeting attended, provided that such fees for attendance at Board meetings and
committee meetings may not exceed $1,500 per day. Directors receive an
additional fee of $500 for serving as Chairman of their respective committees.
In addition, each such Director is reimbursed for any reasonable travel expenses
incurred in attending such meetings.
At the Annual Meeting, three Directors are to be elected to hold office,
each for a term of three years and until his successor is elected and qualified.
The Board of Directors recommends that its three nominees for Director be
elected at the Annual Meeting. The nominees are James C. Fanello, Ronald C.
Houser and James A. Karman. Messrs. Fanello, Houser and Karman currently serve
as Directors of the Company. Mr. Fanello has served as a Director of the Company
since its formation. Mr. Houser has served as a Director of the Company since
December 1999 and Mr. Karman has served as a Director of the Company since
January 1995. If any nominee becomes unavailable for any reason or should a
vacancy occur before the election, which events are not anticipated, the proxies
will be voted for the election of such other person as a Director as the Board
of Directors may recommend.
Information regarding the continuing Directors of the Company is set forth
below:
NAME AGE POSITION(S)
---- --- -----------
John F. Falcon(1)......................... 52 President, Chief Executive Officer and
Director
James C. Fanello(1)....................... 72 Director
David J. Hessler.......................... 57 Secretary and Director
Ronald C. Houser.......................... 54 Director
James A. Karman(2)(3)..................... 63 Director
Curtis E. Moll(1)......................... 61 Chairman of the Board and Director
Maynard H. Murch IV(2)(3)................. 57 Director
Theodore K. Zampetis(2)(3)................ 55 Director
---------------
(1) Member of the Executive Committee.
(2) Member of the Compensation Committee.
(3) Member of the Audit Committee.
DIRECTOR NOMINEES
JAMES C. FANELLO has been a Director of the Company since its formation in
April 1993. Mr. Fanello was the Executive Vice President of the Company from
November 1996 until his retirement in June 2000. Mr. Fanello served as the
President of Stamping and Blanking operations from April 1993 to October 1996.
Mr. Fanello had been employed by Shiloh Corporation and its predecessor since
1951, during which time he has held various positions, including President and
Executive Vice President.
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RONALD C. HOUSER became a Director of the Company in December 1999. Since
August 1996, Mr. Houser has served as Chief Financial Officer of MTD Products
Inc ("MTD Products"), a privately held manufacturer of outdoor power equipment.
In addition, Mr. Houser was appointed as Executive Vice President of MTD
Products in September 1999. Prior to August 1996, Mr. Houser served as Assistant
Comptroller for The Goodyear Tire & Rubber Company, a manufacturer of tires,
belts, hoses and other rubber products for the transportation industry. Mr.
Houser serves as a director of MTD Products.
JAMES A. KARMAN became a Director of the Company in January 1995. Since
1978, Mr. Karman has served as President and Chief Operating Officer, and since
1963 as a member of the Board of Directors, of RPM, Inc., a worldwide producer
of specialty chemicals, coatings and sealants for industrial and consumer
markets. Mr. Karman also serves as a director of Metropolitan Financial Corp.
and A. Schulman, Inc.
CONTINUING DIRECTORS
JOHN F. FALCON has been the President, Chief Executive Officer and a
Director of the Company since April 1999. From 1995 to April 1999, Mr. Falcon
held several positions at Lear Corporation, a supplier of automotive interior
systems, including Director of Interiors for its General Motors division. Prior
to that time, he had over twenty years of experience at General Motors, a
manufacturer of vehicles, where he held several positions, including, among
others, Worldwide Operations Manager for ignition and filtration products.
DAVID J. HESSLER has been the Secretary and a Director of the Company since
its formation in April 1993. Mr. Hessler has been a Senior Partner in the law
firm of Wegman, Hessler, Vanderburg & O'Toole or its predecessors since 1978,
and has been the Secretary of MTD Products since 1977.
CURTIS E. MOLL has served as a Director of the Company since its formation
in April 1993 and become Chairman of the Board in April 1999. Since 1980, Mr.
Moll has served as the Chairman of the Board, President and Chief Executive
Officer of MTD Products. Mr. Moll also serves as a director of The
Sherwin-Williams Company and AGCO Corporation.
MAYNARD H. MURCH IV has served as a Director of the Company since March
2000. Mr. Murch has served as the President of Maynard H. Murch Co., Inc., an
investment company, since January 1985. In addition, Mr. Murch has served as
Vice President of Parker/Hunter Incorporated, an investment company, since 1976.
Mr. Murch also serves as a director of Robbins & Meyers, Inc.
THEODORE K. ZAMPETIS has served as a Director of the Company since July
1993. From 1991 until his retirement in October 1999, Mr. Zampetis served as
President, Chief Operating Officer and a director of The Standard Products
Company, a manufacturer of rubber and plastic parts principally for automotive
original equipment manufacturers. Prior to such time, Mr. Zampetis served in
various managerial positions with The Standard Products Company, including Vice
President and President, Standard Products (Canada) Limited, and Vice
President-Manufacturing, North American Automotive Operations.
COMMITTEES AND DIRECTORS MEETINGS
The Board of Directors has three standing committees: the Executive
Committee, the Audit Committee and the Compensation Committee. These committees
were established in July 1993 in connection with the Company's initial public
offering.
The Executive Committee exercises the power and authority of the Board of
Directors on all matters, except as expressly limited by applicable law, in the
interim period between Board of Directors' meetings. The Executive Committee
held two meetings in fiscal 2000.
The Audit Committee recommends to the Board of Directors, subject to
stockholder approval, the appointment of the Company's independent certified
public accountants. The Audit Committee discusses with the Company's management
and the Company's independent certified public accountants the overall scope and
specific plans for the accountants' audit. The Audit Committee meets at least
semi-annually with the Company's senior management and independent certified
public accountants to discuss the results of the accountants' examination and
the Company's financial reporting. In addition, on May 25, 2000 the Board of
Directors adopted
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the Audit Committee Charter, which is attached to this Proxy Statement as
Exhibit A. The Audit Committee held two meetings in fiscal 2000.
The Compensation Committee oversees all matters relating to human resources
of the Company and administers (i) all stock option or stock-related plans and,
in connection therewith, all awards of options and performance units to
employees pursuant to any such stock option or stock related plan; (ii) all
bonus plans, including, without limitation, the Executive Incentive Bonus Plan;
and (iii) all compensation of the Chief Executive Officer and President of the
Company. The Compensation Committee held three meetings in fiscal 2000.
The Board of Directors held six meetings in fiscal 2000. All of the
Directors attended at least seventy-five percent (75%) of the total meetings
held by the Board of Directors in fiscal 2000 during their tenure as a Director.
In addition, all Directors attended at least seventy-five percent (75%) of the
total number of meetings held by all committees of the board on which they
served, except for Messrs. Fanello and Falcon, each of whom attended fifty
percent (50%) of the meetings held by the Executive Committee in fiscal 2000.
AUDIT FEES
PricewaterhouseCoopers LLP billed fees to the Company of approximately
$212,000, in the aggregate, for professional services rendered by
PricewaterhouseCoopers LLP for the audit of the Company's annual financial
statements for the fiscal year ended October 31, 2000 and the reviews of the
interim financial statements included in the Company's Quarterly Reports on Form
10-Q filed during the fiscal year ended October 31, 2000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
PricewaterhouseCoopers LLP billed fees to the Company of approximately
$40,000, in the aggregate, for professional services related to financial
information systems design and implementation services as described in Paragraph
(c)(4)(ii)(B) of Rule 2-01 of Regulation S-X rendered by PricewaterhouseCoopers
LLP during the fiscal year ended October 31, 2000.
ALL OTHER FEES
PricewaterhouseCoopers LLP billed fees to the Company of approximately
$281,580, in the aggregate, for services rendered by PricewaterhouseCoopers LLP
for all services (other than those covered above under "Audit Fees" and
"Financial Information Systems Design and Implementation Fees") during the
fiscal year ended October 31, 2000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION AND CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
The law firm of Wegman, Hessler, Vanderburg & O'Toole, of which Mr. Hessler
is a Senior Partner, provided services to the Company in fiscal 2000 in the
amount of $462,882 and provides services to the Company on an on-going basis.
Mr. Hessler is the Secretary and a Director of the Company. Although Mr. Hessler
is Secretary of the Company, he receives no compensation for holding such
position.
On June 21, 1999, the Company entered into a purchase agreement with MTD
Products to acquire the automotive division of MTD Products ("MTD Automotive").
Consideration for this acquisition, which was consummated on November 1, 1999,
consisted of $20.0 million and 1,428,571 shares of newly issued Common Stock of
the Company, of which 535,714 shares were contingently returnable at November 1,
1999. Pursuant to the earnout provisions of the Asset Purchase Agreement (the
"Purchase Agreement"), dated as of June 21, 1991, as amended, by and among the
Company, Shiloh Automotive, Inc. and MTD Products Inc, the aggregate
consideration was increased due to the performance of MTD Automotive during the
first twelve months subsequent to consummation of the acquisition. As a result
of the subsequent performance of MTD Automotive, the 535,714 contingently
returnable shares of Common Stock were not required to be returned to the
Company and in January 2001 the Company issued MTD Products Inc an additional
288,960 shares of Common Stock and the Company's wholly owned subsidiary issued
a note in the aggregate principal amount of $4.0 million payable
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in full on November 1, 2001. The Company is guarantor of the note. In addition,
in accordance with the Purchase Agreement, approximately $1.8 million was
returned to the Company for settlement of price concessions and capital
expenditure reimbursements. These adjustments were reflected in the Company's
financial statements for the fiscal year ended October 31, 2000 as adjustments
to the purchase price. Also in accordance with the Purchase Agreement, the
purchase price may be adjusted at the end of fiscal 2001 and fiscal 2002 upon
resolution of certain contingencies set forth in the Purchase Agreement. MTD
Products currently owns approximately 56.8% of the Common Stock, including the
shares of Common Stock issued as consideration for the acquisition of MTD
Automotive and the shares issued as part of the earnout provisions of the
Purchase Agreement for the performance of MTD Automotive following its
acquisition by the Company.
At the closing of the acquisition of MTD Automotive, the Company entered
into a Transitional Services Agreement with MTD Products. Under the terms of
such agreement, MTD Products will continue to provide information management and
other administrative services to MTD Automotive for the earlier of two years
after the consummation of the acquisition of MTD Automotive or the date upon
which the Company can implement its own information services and other
administrative services. As compensation for these services, the Company paid
MTD Products an aggregate of $600,000 in fiscal 2000 in accordance with the
agreement. Such amount may be adjusted during the second year of the agreement
based upon increases in the consumer price index.
In fiscal 2000, the Company made sales to MTD Products in the aggregate
amount of approximately $18.4 million. In addition, MTD Products continues to
provide certain automotive parts to MTD Automotive.
Stockholders Agreement
The Company, Messrs. D. Fanello, J. Fanello, Grissinger and Sutter and
various trusts set up for the benefit of members of the Fanello families, and
MTD Products have entered into the Stockholders Agreement (as defined below).
The Stockholders Agreement provides that the Shiloh Group and MTD Products will
each vote their shares of Common Stock in favor of the election of Directors of
the Company for the three individuals proposed by the Shiloh Group and the three
individuals proposed by MTD Products when such individuals' current terms expire
and such individuals stand for election. The Director nominees proposed for
election at the Annual Meeting by the Shiloh Group and MTD Products are Messrs.
J. Fanello and Houser, respectively. The Stockholders Agreement also provides
for rights of first refusal with respect to transfers of Common Stock by the
Shiloh Group, MTD Products and certain of their respective successors and
assigns. Subject to certain exceptions, if either MTD Products or any of its
permitted transferees or any of the Shiloh Group or any of their permitted
transferees propose to sell or otherwise transfer any of their shares of Common
Stock, such person shall first offer such shares of Common Stock to the other
members of its group, stating the proposed price and terms of such transfer. The
other members of its group may then elect to purchase the offered shares at the
offered price and on the same terms. If the other members of such group do not
exercise their rights to purchase all of the shares of Common Stock offered, the
members of the other group have a similar purchase right with respect to the
remaining shares. If the members of the two groups do not elect to purchase all
of the shares of Common Stock offered, the offering party is then free to sell
such shares to the proposed transferee at the same price and on the same terms
as offered to each group. The Directors' voting provision of the Stockholders
Agreement has a term of ten years. The other provisions of the Stockholders
Agreement terminate on the date on which either MTD Products or the members of
the Shiloh Group cease to own at least 10% of the issued and outstanding shares
of Common Stock.
In June 1993, the Company entered into a registration rights agreement (the
"Registration Agreement"), which grants to both MTD Products and the former
shareholders of Shiloh Corporation, including Messrs. D. Fanello and J. Fanello
as a group (collectively, the "Shiloh Group"), (i) the right to require the
Company on one occasion to register all or part of their holdings of Common
Stock and (ii) certain "piggyback" registration rights to participate in future
registrations of the securities of the Company. Under the Registration
Agreement, the Company is required to pay all expenses incurred in connection
with any such registrations other than any underwriting discounts and
commissions associated with the sale of such Common Stock of such stockholders
or fees of their counsel.
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BENEFICIAL OWNERSHIP OF COMMON STOCK
Except as otherwise noted, the following table sets forth certain
information as of November 30, 2000 as to the security ownership of those
persons owning of record or known to the Company to be the beneficial owner of
more than five percent of the voting securities of the Company and the security
ownership of equity securities of the Company by each of the Directors and each
of the executive officers named in the Summary Compensation Table (the "Named
Executive Officer"), and all Directors and executive officers as a group. Unless
otherwise indicated, all information with respect to beneficial ownership has
been furnished by the respective Director, executive officer or five percent
beneficial owner, as the case may be. Unless otherwise indicated, the persons
named below have sole voting and investment power with respect to the number of
shares set forth opposite their names. Beneficial ownership of the Common Stock
has been determined for this purpose in accordance with the applicable rules and
regulations promulgated under the Securities Exchange Act of 1934 (the "Exchange
Act").
PERCENTAGE
OF SHARES OF
AMOUNT AND COMMON
NATURE STOCK
OF BENEFICIAL BENEFICIALLY
NAMES AND ADDRESSES OWNERSHIP OWNED
OF BENEFICIAL OWNERS OF COMMON STOCK(1) (%)(1)
-------------------- ------------------ ------------
Stockholders Agreement Group(2)
c/o Shiloh Corporation
402 Ninth Avenue
Mansfield, Ohio 44905..................................... 10,562,233 71.4%
James C. Fanello(3)
402 Ninth Avenue
Mansfield, Ohio 44905..................................... 807,912 5.5%
Dominick C. Fanello(4)
402 Ninth Avenue
Mansfield, Ohio 44905..................................... 812,613 5.5%
MTD Products Inc(5)
5965 Grafton Road
Valley City, Ohio 44280................................... 8,405,266 56.8%
Merrill Lynch & Co., Inc.(6)
World Financial Center
250 Vesey Street
New York, New York 10381.................................. 1,209,900 8.2%
Dimensional Fund Advisers, Inc.(7)
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401............................ 817,900 5.5%
John F. Falcon(8)........................................... 50,000 *
David J. Hessler(9)......................................... 17,200 *
Ronald C. Houser(10)........................................ 8,407,266 56.8%
James A. Karman............................................. 1,000 *
Curtis E. Moll(11).......................................... 8,453,266 57.1%
Maynard H. Murch IV......................................... 5,000 *
Theodore K. Zampetis........................................ 2,000 *
David K. Frink(12).......................................... 37,582 *
Craig A. Stacy(13).......................................... 40,400 *
Larry D. Paquin(14)......................................... 10,000 *
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PERCENTAGE
OF SHARES OF
AMOUNT AND COMMON
NATURE STOCK
OF BENEFICIAL BENEFICIALLY
NAMES AND ADDRESSES OWNERSHIP OWNED
OF BENEFICIAL OWNERS OF COMMON STOCK(1) (%)(1)
-------------------- ------------------ ------------
Ronald P. Turner(15)........................................ 12,000 *
All Directors, the Director Nominee and executive officers
as a group (16 persons)................................... 9,468,360 63.2%
---------------
* Less than one percent
(1) For accounting purposes, certain adjustments were made to the purchase
price with respect to the Purchase Agreement. As a result, shares of Common
Stock issued in January 2001 were, for accounting purposes, reflected in
the Company's financial statements for the year ended October 31, 2000. As
a result, as of such date, the Company had 14,798,094 shares of Common
Stock outstanding.
(2) The Company, MTD Products, Robert L. Grissinger Robert E. Sutter and
certain trusts for the benefit of Dominick C. Fanello, James C. Fanello,
Rose M. Fanello and Kathleen M. Fanello have entered into a stockholders
agreement, as amended as of March 11, 1994 to release certain parties to
the original stockholders agreement, relating to the shares of Common Stock
owned by each of the signatories (the "Stockholders Agreement"). As a
result, the parties to the Stockholders Agreement may be deemed to have
acquired beneficial ownership of all the shares of Common Stock subject to
the Stockholders Agreement, an aggregate of 10,562,233 shares, as a "group"
as defined under the Exchange Act. Each of the parties to the Stockholders
Agreement disclaims any beneficial ownership with respect to shares of
Common Stock held by the other parties to the Stockholders Agreement. In
addition, includes 288,960 shares of Common Stock issued by the Company to
MTD Products in January 2001 pursuant to the earnout provisions of the
Purchase Agreement. The number of shares of Common Stock shown for each of
the parties to the Stockholders Agreement named separately in the table
does not include shares that may be deemed to be beneficially owned by such
individuals solely as a result of the Stockholders Agreement.
(3) Includes 637,007 shares owned of record by the James C. Fanello Trust and
held by KeyBank National Association, as trustee under a Trust Agreement,
dated as of May 17, 1993, and includes 170,139 shares owned of record by
the Kathleen Fanello Trust. Mr. Fanello shares voting power with Kathleen
Fanello with respect to the shares held by the Kathleen Fanello Trust.
Under the terms of Mr. Fanello's trust agreement, KeyBank has sole voting
power and shared dispositive power with Mr. Fanello with respect to the
shares held by the trust. In addition, the trust agreement grants Mr.
Fanello the right to revoke such trust at any time upon notice to the
trustee. As a result of its capacity as trustee for Mr. J. Fanello and
certain members of his immediate family, KeyBank's parent corporation,
KeyCorp, claimed to have, as reported on a Schedule 13G filed on February
16, 2001, sole voting power with respect to 874,535 shares of Common Stock
of the Company, sole dispositive power with respect to 873,685 shares of
Common Stock of the Company and shared dispositive power with respect to
850 shares of Common Stock of the Company. The address of KeyCorp is 127
Public Square, Cleveland, Ohio 44114-1306.
(4) Includes 637,007 shares owned of record by the Dominick C. Fanello Trust
and held by The Richland Bank, as trustee under a Trust Agreement, dated as
of January 28, 1988. Under the terms of the trust agreement, the trustee
has sole voting and dispositive power with respect to the shares held by
the trust. Mr. Fanello has the right to revoke such trust at any time upon
written notice to the trustee. Also includes 790 shares owned by Mr.
Fanello's spouse, 174,616 shares owned of record by the Rose Fanello Trust
and 200 shares held by Mr. Fanello as custodian for minor grandchildren.
Mr. Fanello shares voting power with Rose Fanello with respect to the
shares held by Rose Fanello and the Rose Fanello Trust.
(5) Includes 1,104,400 shares of Common Stock beneficially owned by the MTD
Products Inc. Master Employee Benefit Trust, a trust fund established and
sponsored by MTD Products. In addition, includes 288,960 shares of Common
Stock issued by the Company to MTD Products in January 2001 pursuant to the
earnout provisions of the Purchase Agreement. For accounting purposes, the
adjustment to the purchase price was reflected in the Company's financial
statements for the year ended October 31, 2000.
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(6) Information reported is based on a Schedule 13G filed on February 7, 2001.
(7) Based on a Schedule 13G filed on February 1, 2001, the shares of Common
Stock reported are beneficially owned by a registered investment adviser.
In addition, because the named stockholder holds these shares in its
capacity as investment adviser to four registered investment companies and
as investment adviser to certain other investment vehicles (collectively,
the actual owners of such shares), it disclaims beneficial ownership
thereof.
(8) Includes 40,000 shares of Common Stock subject to stock options granted
under the Company's 1993 Key Employee Stock Incentive Plan, which are
currently exercisable.
(9) Based on information as of January 31, 2001, includes 1,000 shares owned by
Mr. Hessler's spouse and includes 4,500 shares held by trusts in which Mr.
Hessler serves as co-trustee. Under the terms of the trust agreements, Mr.
Hessler has shared voting and investment power with respect to these
shares. Mr. Hessler disclaims beneficial ownership of these 5,500 shares.
(10) Includes 7,300,866 shares which are owned of record by MTD Products and
1,104,400 shares of Common Stock beneficially owned by the MTD Products
Inc. Master Employee Benefit Trust, a trust fund established and sponsored
by MTD Products. Mr. Houser is Chief Financial Officer and a director of
MTD Products. Mr. Houser's address is c/o MTD Products Inc, 5965 Grafton
Road, Valley City, Ohio 44280.
(11) Includes 7,300,866 shares which are owned of record by MTD Products and
1,104,400 shares of Common Stock beneficially owned by the MTD Products
Inc. Master Employee Benefit Trust, a trust fund established and sponsored
by MTD Products. Mr. Moll is Chairman of the Board, Chief Executive Officer
and a director of MTD Products. Also includes 500 shares held by Moll
Family Properties, 1000 shares held by Mr. Moll's spouse, 21,500 shares
held by the Belle Moll Estate and 20,000 shares held by the Jochum-Moll
Foundation, a charitable organization in which Mr. Moll shares voting and
investment power over all the foundation's assets. Mr. Moll disclaims
beneficial ownership of these shares. Mr. Moll's address is c/o MTD
Products Inc, 5965 Grafton Road, Valley City, Ohio 44280.
(12) Includes 37,000 shares of Common Stock subject to stock options granted
under the Company's 1993 Key Employee Stock Incentive Plan, which are
currently exercisable.
(13) Includes 39,000 shares of Common Stock subject to stock options granted
under the Company's 1993 Key Employee Stock Incentive Plan which are
currently exercisable. Includes 400 shares of Common Stock held by Mr.
Stacy's spouse.
(14) Includes 10,000 shares of Common Stock subject to stock options granted
under the Company's 1993 Key Employee Stock Incentive Plan, which are
currently exercisable.
(15) Includes 12,000 shares of Common Stock subject to stock options granted
under the Company's 1993 Key Employee Stock Incentive Plan. Mr. Turner
resigned in January 2001.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Form 4s to report the following transactions were filed late due to an
administrative oversight:
- Mr. Hessler made a distribution of 1,500 shares of Common Stock to a
beneficiary of a certain trust. Mr. Hessler serves as co-trustee of such
trust.
- The 1,428,571 shares of Common Stock issued to MTD Products Inc as
partial consideration for the acquisition of MTD Automotive were issued
as of November 1, 1999 and the Form 4s for Mr. Moll and MTD Products Inc
were filed on December 16, 1999.
The Form 3s to report the following events were filed late due to an
administrative oversight:
- Hayden Cotterill became an executive officer of the Company in January
2000.
- Stephen Tomasko became an executive officer of the Company in April 2000.
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COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The table below provides information relating to compensation for the
Company's last three fiscal years for persons serving as the Chief Executive
Officer during the fiscal year and the four most highly compensated executive
officers of the Company serving at the end of the fiscal year. The amounts shown
include compensation for services in all capacities that were provided to the
Company and its direct and indirect subsidiaries and predecessors.
LONG-TERM
COMPENSATION
AWARDS ALL
ANNUAL SECURITIES OTHER
COMPENSATION UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS/SARS SATION ($)
--------------------------- ---- ------------ --------- ------------ ----------
John F. Falcon(1).......................... 2000 $317,825 $ -- 25,000 $ 2,169(2)
President, Chief Executive Officer and 1999 167,309 50,000 45,000 --
Director
David K. Frink............................. 2000 $201,377 $20,000 10,000 $ 2,183(2)
Vice President of 1999 192,014 40,000 12,000 6,364(2)
Steel Processing 1998 166,423 40,000 10,000 7,917(2)
Craig A. Stacy............................. 2000 $169,616 $30,000 12,000 $ 2,514(2)
Chief Financial Officer 1999 152,404 30,000 12,000 6,366(2)
and Treasurer 1998 125,000 30,000 10,000 6,682(2)
Larry D. Paquin(3)......................... 2000 $177,404 $19,000 10,000 $ 2,778(2)
Vice President of Quality 1999 40,385 8,000 -- --
Control and Continuous Improvement
Ronald P. Turner(4)........................ 2000 $181,442 $ -- -- $ 1,978(2)
Vice President of Sales and Marketing 1999 42,692 -- 12,000 15,000(4)
---------------
(1) On April 12, 1999, John F. Falcon was appointed President and Chief
Executive Officer of the Company.
(2) The amounts listed for all years other than fiscal 2000 were contributed by
Shiloh Corporation to Shiloh Corporation's qualified profit sharing
retirement plan, as profit sharing contributions and as matching
contributions relating to before-tax contributions made by such named
executive officer under such plan. The amounts listed for fiscal 2000
reflects matching contributions only.
(3) On August 2, 1999, Larry D. Paquin was appointed Vice President of Quality
Control and Continuous Improvement.
(4) On August 2, 1999, Ronald P. Turner was appointed Vice President of Sales
and Marketing. The amount listed in "All Other Compensation" for fiscal 1999
reflects a $15,000 sign-on bonus. Mr. Turner resigned as of January 3, 2001.
STOCK OPTION HOLDINGS
The following table sets forth information with respect to the Named
Executive Officers concerning grants of stock options made during its last
fiscal year.
INDIVIDUAL
GRANTS POTENTIAL
----------- REALIZABLE VALUE AT
PERCENT OF ASSUMED ANNUAL
NUMBER OF TOTAL EXERCISE RATES OF STOCK
SECURITIES OPTIONS/SARS OR PRICE APPRECIATION
UNDERLYING GRANTED TO BASE FOR OPTION TERM
OPTION/SARS EMPLOYEES IN PRICE EXPIRATION -------------------
NAME GRANTED (#) FISCAL YEAR (%) ($/SH) DATE 5% ($) 10% ($)
---- ----------- --------------- -------- ---------- ------- --------
John F. Falcon........ 25,000 11.3% $9.75 1/12/05 $67,250 $148,750
David K. Frink........ 10,000 4.5% 9.75 1/12/05 26,900 59,500
Craig A. Stacy........ 12,000 5.4% 9.75 1/12/05 33,200 71,400
Larry D. Paquin....... 10,000 4.5% 9.75 1/12/05 26,900 59,500
Ronald P. Turner...... 12,000 5.4% $9.75 1/12/05 $33,200 $ 71,400
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AGGREGATED FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED VALUE OPTIONS/SARS AT FISCAL OPTIONS/SARS AT FISCAL
ON REALIZED YEAR-END (#) YEAR-END ($)
NAME(1) EXERCISE $ EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
------- -------- -------- ------------------------- ----------------------------
John F. Falcon.............. -- -- 40,000/30,000 0/0
David K. Frink.............. -- -- 37,000/0 0/0
Craig A. Stacy.............. -- -- 39,000/0 0/0
Larry D. Paquin............. -- -- 10,000/0 0/0
Ronald P. Turner............ -- -- 12,000/0 0/0
---------------
(1) Only those options held at the end of the last fiscal year of the Company
are listed.
(2) All stock options were out of the money (the exercise price was higher than
the market price) as of October 31, 2000.
PENSION PLANS
Shiloh Corporation Cash Balance Pension Plan
Effective January 1, 2000, the Shiloh Corporation Pension Plan (the "Prior
Plan") was amended to become the Shiloh Corporation Cash Balance Pension Plan
(the "New Pension Plan"). The Prior Plan provided a benefit to participants
pursuant to a defined benefit formula based on final average compensation and
years of service. The New Pension Plan provides a benefit to participants under
a new "cash balance" formula.
Under the new cash balance benefit formula, pension benefits are based on a
participant's hypothetical account balance, rather than final average
compensation and years of service. As of January 1, 2000, each participant's
benefits which accrued under the Prior Plan's formula were converted to an
amount equal to their actuarial present value. That amount became the
participant's hypothetical account balance under the New Pension Plan. That
balance, if any, is increased after January 1, 2000 by hypothetical annual
allocations at the end of each subsequent year of Company service equal to four
percent of the participant's compensation for that year. An equivalent
percentage is allocated to a participant's account for any of the participant's
compensation that exceeds the taxable wage base for Social Security taxes. In
addition, the balance for those participants who were participants in the Prior
Plan and who were age forty or older on January 1, 2000, which includes Messrs.
Falcon, Frink, Paquin and Turner, will receive an additional credit equal to
three percent of the participant's compensation for a period of ten years,
starting on January 1, 2000. The hypothetical account is also increased by
hypothetical interest for each plan year until the benefit is paid, at an annual
rate equal to the average annual rate of interest on 30-year Treasury securities
in effect for the second month preceding the first day of the plan year.
Generally, the "cash balance" benefit is payable in a lump sum equal to the
hypothetical account balance, or in the form of an actuarially equivalent life
annuity selected by the participant.
Under the New Pension Plan's benefit formula, the estimated annual benefit
payable upon retirement at age 65 for John F. Falcon, David K. Frink, Craig A.
Stacy, Larry D. Paquin and Ronald P. Turner is $35,790, $19,036, $135,290,
$7,832 and $1,428, respectively.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This Compensation Committee report shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the Exchange
Act, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
The Compensation Committee ("the Committee") of the Board of Directors is
responsible for establishing and administering an executive compensation program
for the Company, determining the compensation of the chief executive officer and
approving the compensation proposed by the chief executive officer for all other
executive officers of the Company.
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The Committee, comprised of three non-employee directors, has prepared this
report to summarize for the stockholders the Company's policies and practices
with regard to executive compensation.
Objectives. The Company's basic objectives for executive compensation are
to recruit and keep top quality executive leadership focused on attaining
long-term corporate goals and increasing stockholder value.
Elements of Compensation. Total compensation has four components: (i) base
salary; (ii) short-term incentive (cash bonus); (iii) long-term incentive (stock
options); and (iv) deferred compensation (defined benefit retirement plan).
Base Salary. Base salaries for executive officers are set within ranges
that are reasonable, considering comparable positions in companies similar to
the Company in industry and region. Base salaries are also intended to be
equitable, intracompany, and high enough to keep qualified executives from being
overdependent on cash bonuses in a cyclical industry.
Short-Term Incentives. Annual cash bonuses are based on the Company's
attainment of its earnings objectives. In 1997, these incentives were extended
to managers in the Company's various business units. All cash bonuses are tied
to individual and group performance based on goals established at the start of
the year and are available in proportionately greater amounts to those who can
most influence corporate earnings.
Long-Term Incentives. Long-term incentives consisting of stock options are
intended to motivate executives to make and execute plans that improve
stockholders' value over the long-term.
Deferred Compensation. The Company's defined benefit retirement plan and a
profit sharing retirement plan are available for the executive officers of the
Company on the same basis as all other eligible employees of the Company. Both
plans are qualified plans to which the Company makes profit sharing and matching
contributions on behalf of the plan's participants.
CHIEF EXECUTIVE OFFICER COMPENSATION
At the start of fiscal 2000, Mr. Falcon's salary was $300,000. In addition
he was granted 25,000 options in fiscal 2000 for shares of Common Stock pursuant
to the Company's 1993 Key Employee Stock Incentive Plan. On June 15, 2000, Mr.
Falcon's salary was increased to $400,000, which was retroactive to his first
anniversary of commencement of employment with the Company, in consideration for
his efforts in accomplishing the acquisition of MTD Automotive, the ongoing time
and effort spent on analyzing and reviewing other acquisitions that had been
proposed earlier in fiscal 2000 and the successful implementation of current
plant and facility expansions. At the conclusion of fiscal 2000, in light of his
solid accomplishments during the fiscal year in strengthening the management
team and managing the successful integration of MTD Automotive and the
acquisition of A.G. Simpson (Tennessee), Mr. Falcon's salary was increased to
$450,000 for fiscal 2001. These figures reflect amounts commensurate with
similarly situated executives at similarly situated public companies.
This report is submitted on behalf of the Compensation Committee:
Maynard H. Murch, IV, Chairman
James A. Karman
Theodore K. Zampetis
AUDIT COMMITTEE REPORT
The Board of Directors of the Company adopted a written Audit Committee
Charter on May 25, 2000, a copy of which is included as Exhibit A to this proxy
statement. All members of the Audit Committee are independent as set forth in
Rules 4200(a)(15) and 4310(c)(26) of the NASD Manual.
The Audit Committee has reviewed and discussed with the Company's
management and PricewaterhouseCoopers LLP, the Company's independent auditors,
the audited financial statements of the Company contained in the Company's
Annual Report to Stockholders for the year ended October 31, 2000. The Audit
Committee has also discussed with the Company's independent auditors the matters
required to be discussed pursuant to SAS 61 (Codification of Statements on
Auditing Standards, Communication with Audit Committees).
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The Audit Committee has received and reviewed the written disclosures and
the letter from PricewaterhouseCoopers LLP required by Independence Standards
Board Standard No. 1 (titled, "Independence Discussions with Audit Committees"),
and has discussed with PricewaterhouseCoopers LLP such independent auditors'
independence. The Audit Committee has also considered whether the provision of
information technology services and other non-audit services to the Company by
PricewaterhouseCoopers LLP is compatible with maintaining their independence.
Based on the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 2000, filed with the Securities and Exchange Commission.
This report is submitted on behalf of the Audit Committee.
James A. Karman, Chairman
Maynard H. Murch IV
Theodore K. Zampetis
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COMPARATIVE STOCK PERFORMANCE GRAPH
The following graph compares the Company's cumulative total stockholder
return since October 31, 1996 with the Nasdaq composite index and indices of
certain companies selected by the Company as comparative to the Company. The
graph assumes that the value of the investment in the Company's Common Stock and
each index was $100.00 on October 31, 1995.
COMPARISON OF COMPANY'S COMMON STOCK, NASDAQ
COMPOSITE INDEX AND PEER GROUP INDEX
SHILOH PEER INDEX NASDAQ COMP INDEX
------ ---------- -----------------
10/31/95 100 100 100
10/31/96 151.7 152.4 117.9
10/31/97 166.7 195.9 153.8
10/30/98 149.4 182.5 171
10/29/99 86.2 143 286.3
10/31/00 54.6 85.6 325.2
For the period of October 31, 1995 through October 31, 2000, the companies
selected to form the Company's line-of-business peer group index were: A. M.
Castle & Co., Arvin Industries, Inc., Gibraltar Steel Corp., Huntco Inc.,
Olympic Steel, Inc., Steel Technologies, Inc., Tower Automotive, Inc. and
Worthington Industries, Inc. The total return of each member of the Company's
peer group has been weighted according to each member's stock market
capitalization.
APPROVAL OF AMENDMENT AND RESTATEMENT TO THE COMPANY'S AMENDED AND RESTATED 1993
KEY EMPLOYEE STOCK INCENTIVE PLAN
The Company desires to continue its policy of encouraging greater ownership
of Common Stock by its key employees, officers and consultants in order to more
closely align their interests with those of the stockholders. For this purpose,
subject to approval by the stockholders of the Company at the Annual Meeting,
the Board of Directors has amended and restated the 1993 Key Employee Stock
Incentive Plan as the Amended and Restated 1993 Key Employee Stock Incentive
Plan (the "Plan"), which was originally approved by the stockholders in June
1993 and amended by the Board of Directors in December 11, 1997, as approved by
the stockholders of the Company in April 1998. A summary of the proposed
amendments to the Plan is set forth below, followed by a summary of the Plan.
The full text of the Plan, as amended, is annexed to this proxy statement as
Exhibit B and the summary is qualified in its entirety by reference to Exhibit
B.
AMENDMENT
The Board of Directors has amended the Plan to increase the number of
shares of Common Stock of the Company subject to options and restricted stock
awards from 1,200,000 up to an aggregate of 1,700,000. In addition, the Board
has amended the Plan to eliminate provisions which are no longer necessary as a
result of changes in tax or securities laws or regulations and to clarify
certain other minor administrative matters.
PLAN SUMMARY
Purpose and Administration. Key employees, officers and consultants of the
Company are eligible to receive grants of stock options and restricted stock
awards for up to an aggregate of 1,700,000 shares of the Company's
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Common Stock under the Plan. To date 1,147,200 options have been granted at
exercise prices ranging from $3.75 to $18.625. The purpose of the Plan is to
attract and retain officers and other key employees of the Company and to
provide such persons with incentives and rewards for superior performance. The
Plan is administered by the Compensation Committee of the Board of Directors,
which determines the terms and conditions of the options issued under the Plan,
the amounts of the benefits granted, and the officers, key employees and
consultants who shall receive them. The Plan includes provisions authorizing the
Board of Directors to adjust the number of shares of Common Stock covered by the
Plan and outstanding stock options granted thereunder, and the purchase price
per share of Common Stock payable upon the exercise of an outstanding stock
option granted thereunder, in the event of a stock dividend, stock split,
recapitalization, reorganization, merger or other event that causes a change in
the capital structure of the Company. The shares of Common Stock covered by the
Plan may be shares of original issue or shares held in treasury or a combination
thereof.
Awards. The Plan provides for the granting of "incentive stock options"
within the meaning of Section 422 of the Code, "nonqualified stock options,"
which are not intended to qualify under any provision of the Code, and
restricted stock awards. The aggregate fair market value (determined as of the
date of grant of an incentive stock option) of all shares of Common Stock with
respect to which incentive stock options are exercisable for the first time by
an optionee during any calendar year may not exceed $100,000. In the event that
an optionee is eligible to participate in any other stock option plans of the
Company or any of its subsidiaries that are also intended to comply with the
provisions of Section 422 of the Code, the annual $100,000 limitation applies to
the aggregate number of shares of Common Stock with respect to which incentive
stock options may be granted under all such plans. An incentive stock option may
be granted in excess of the $100,000 limitation, but that portion of the option
that is exercisable for shares of Common Stock in excess of the limitation will
be treated as a nonqualified stock option.
An award of restricted stock involves the immediate transfer by the Company
to a participant in the Plan of ownership of a specific number of shares of
Common Stock. The participant is immediately entitled to voting, dividend and
ownership rights of such shares. Restricted stock must be subject to a
"substantial risk of forfeiture" within the meaning of Section 83 of the Code
for a period to be determined by the Compensation Committee. During the period
for which such substantial risk of forfeiture exists, the transferability of the
restricted stock is prohibited or restricted in the manner and to the extent
determined by the Compensation Committee.
Exercise Price and Payment. Stock options are rights to purchase shares of
Common Stock at a price per share that is determined by the Compensation
Committee on the date that the stock options are granted. The purchase price per
share of Common Stock that is payable upon the exercise of nonqualified stock
options granted under the Plan may be less than, equal to or greater than the
fair market value of a share of Common Stock on the date of grant, but the
purchase price per share of Common Stock payable upon the exercise of incentive
stock options must be at least equal to the fair market value of a share of
Common Stock on the date of grant and may not be less than 110 percent of the
fair market value thereof on the date of grant if an incentive stock option is
granted to an optionee who owns stock possessing more than 10 percent of the
total combined voting power of all classes of stock of the Company or any of its
subsidiaries. The market value of a share of Common Stock underlying the option
at the end of the Company's fiscal year was $5.9375, which was the closing price
as reported on the Nasdaq National Market on such date.
The Plan permits payment of the purchase price in cash or by check or, at
the discretion of the Compensation Committee, transfer to the Company of shares
of Common Stock that are already owned by the optionee and have a fair market
value on the date of exercise equal to the aggregate purchase price. The Plan
also permits the Compensation Committee to accept restricted stock previously
awarded under the Plan in payment of the purchase price of any nonqualified
option. In addition, the Plan permits the Compensation Committee to authorize
deferred payment of the purchase price from the proceeds of sale through a bank
or broker on the date of exercise of some or all of the shares of Common Stock
to which the exercise relates.
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The Plan permits an award of restricted stock to be made without additional
consideration from a recipient or in consideration of a payment by the recipient
that is less than the market value of such restricted stock on the date of
grant.
Vesting. The Plan authorizes the Compensation Committee to establish
vesting provisions with respect to each grant of stock options regarding the
period(s) of continuous employment with the Company or any of its subsidiaries
that is necessary before a stock option (or installments thereof) will become
exercisable. In addition, the Plan authorizes the Compensation Committee to
determine the period in which an award of restricted stock shall become
nonforfeitable.
Termination of Awards. The Plan authorizes the Compensation Committee, in
respect of each grant of stock options or award of restricted stock, to
establish provisions consistent with the Plan regarding the termination of the
option or the restricted stock award.
Cancellation. The Plan provides that the Compensation Committee may cancel
any stock option granted thereunder with the consent of the affected optionee.
In the event of any such cancellation, the Compensation Committee may grant a
new stock option, which may or may not cover the same number of shares of Common
Stock as was covered by the canceled stock option, in such manner, at such
exercise price and subject to such terms and conditions as would have been
applicable under the Plan had the canceled stock option not been granted.
Transferability. Stock options granted under the Plan may not be
transferred except by will or the laws of descent and distribution and may not
be exercised during an optionee's lifetime except by the optionee or his
guardian or legal representative acting in a fiduciary capacity on behalf of the
optionee under state law and court supervision. The transferability of the
restricted stock is prohibited or restricted in the manner and to the extent
determined by the Compensation Committee during the period in which a
substantial risk of forfeiture exists.
Termination and Amendment of the Plan. The Plan is of indefinite duration
and will continue in effect until all shares of Common Stock covered thereby
have been sold, unless terminated earlier by the Company, and may be amended
from time to time by the Board of Directors. However, any amendment that
increases the aggregate number of shares of Common Stock covered by the Plan,
changes the class of persons eligible to participate in the Plan or would cause
Rule 16b-3 under the Exchange Act (or any successor rule to the same effect) to
cease to be applicable to the Plan, is subject to approval by the stockholders
of the Company.
FEDERAL INCOME TAX CONSEQUENCES FOR THE PLAN
The following is a brief summary of certain of the federal income tax
consequences to individuals receiving grants of options under the Plan. The
following summary is based upon federal income tax laws currently in effect and
is not intended to be complete or to describe any state or local tax
consequences.
Non-qualified Stock Options. In general, (i) no income will be recognized
by an optionee at the time a non-qualified stock option is granted, (ii) at
exercise, ordinary income will be recognized by the optionee in an amount equal
to the difference between the option price paid for the shares and the fair
market value of the shares, if unrestricted, on the date of exercise, and (iii)
at sale, appreciation (or depreciation) after the date of exercise will be
treated as a capital gain (or loss) depending on how long the shares have been
held.
Incentive Stock Options. No income generally will be recognized by an
optionee upon the grant or exercise of an incentive stock option. If shares of
Common Stock are issued to the optionee pursuant to the exercise of an incentive
stock option, and if no disqualifying disposition of such shares is made by such
optionee within two years after the date of grant or within one year after the
transfer of such shares to the optionee, then upon sale of such shares, any
amount realized in excess of the option price will be taxed to the optionee as a
capital gain and any loss sustained will be a capital loss.
If shares of Common Stock acquired upon the exercise of an incentive stock
option are disposed of prior to the expiration of either holding period
described above, the optionee generally will recognize ordinary income in the
year of disposition in an amount equal to the excess (if any) of the fair market
value of such shares at the time of exercise (or, if less, the amount realized
on the disposition of such shares if a sale or exchange) over the option
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price paid for such shares. Any further gain (or loss) realized by the
participant generally will be taxed as capital gain (or loss).
Tax Consequences to the Company. To the extent that a participant
recognizes ordinary income in the circumstances described above, the
participant's employer or entity for which the participant performs services
should be entitled to a corresponding deduction, provided, among other things,
such income meets the test of reasonableness, is an ordinary and necessary
business expense, is not an "excess parachute payment" within the meaning of
Section 280G of the Code and is not disallowed by the $1 million limitation on
certain executive compensation.
AMENDED AND RESTATED 1993 KEY EMPLOYEE STOCK INCENTIVE PLAN
NUMBER
OF OPTIONS NUMBER
GRANTED IN OF OPTIONS
FISCAL GRANTED
NAME AND POSITION 2000 TO DATE
----------------- ---------- ----------
John F. Falcon
President, Chief Executive Officer and Director........... 25,000 95,000
David K. Frink
Vice President of Steel Processing........................ 10,000 47,000
Craig A. Stacy
Chief Financial Officer and Treasurer..................... 12,000 54,000
Larry D. Paquin
Vice President of Quality Control and Continuous
Improvement............................................ 10,000 20,000
Executive Officers Group.................................... 77,000 286,000
Non-Executive Officers Group................................ 144,800 416,600
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
APPROVAL OF APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors recommends a vote for approval of the appointment of
PricewaterhouseCoopers LLP, as the independent certified public accountants of
the Company and its subsidiaries, to audit the books and accounts for the
Company and its subsidiaries for the fiscal year ended October 31, 2001. During
fiscal 2000, PricewaterhouseCoopers LLP examined the financial statements of the
Company and its subsidiaries, including those set forth in the 2000 Annual
Report. It is expected that representatives of PricewaterhouseCoopers LLP will
attend the Annual Meeting, with the opportunity to make a statement if they so
desire, and will be available to answer appropriate questions.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
SUBMISSION OF STOCKHOLDERS' PROPOSALS AND ADDITIONAL INFORMATION
The Company must receive by October 29, 2001 any proposal of a stockholder
intended to be presented at the 2002 annual meeting of stockholders of the
Company (the "2002 Meeting") and to be included in the Company's proxy, notice
of meeting and proxy statement related to the 2002 Meeting pursuant to Rule
14a-8 under the Exchange Act. Such proposals must be addressed to the Company,
5389 W. 130th Street, Cleveland, Ohio 44130-1094 and should be submitted to the
attention of Craig A. Stacy by certified mail, return receipt requested.
Proposals of stockholders submitted outside the processes of Rule 14a-8 under
the Exchange Act in connection with the 2002 Meeting ("Non-Rule 14a-8
Proposals") must be received by the Company by January 12, 2002 or such
proposals will be considered untimely under Rule 14a-4(c) of the Exchange Act.
The
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Company's proxy related to the 2002 Meeting will give discretionary authority to
the proxy holders to vote with respect to all Non-Rule 14a-8 Proposals received
by the Company after January 12, 2002.
The Company will furnish without charge to each person whose proxy is being
solicited, upon written request of any such person, a copy of the Annual Report
on Form 10-K of the Company for the fiscal year ended October 31, 2000, as filed
with the Securities and Exchange Commission, including the financial statements
and schedules thereto. Requests for copies of such Annual Report on Form 10-K
should be directed to: Craig A. Stacy, Chief Financial Officer and Treasurer,
Shiloh Industries, Inc., 5389 W. 130th Street, Cleveland, Ohio 44130-1904.
SOLICITATION OF PROXIES
The Company will bear the costs of soliciting proxies from its
stockholders. In addition to the use of the mails, proxies may be solicited by
the Directors, officers and employees of the Company by personal interview,
telephone or telegram. Such Directors, officers and employees will not be
additionally compensated for such solicitation, but may be reimbursed for
out-of-pocket expenses incurred in connection therewith. Arrangements will also
be made with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of solicitation materials to the beneficial owners of Common
Stock held of record by such persons, and the Company will reimburse such
brokerage houses, custodians, nominees and fiduciaries for reasonable out-of-
pocket expenses incurred in connection therewith.
OTHER MATTERS
The Directors know of no other matters which are likely to be brought
before the Annual Meeting. The Company did not receive notice by January 11,
2001 of any other matter intended to be raised by a stockholder at the Annual
Meeting. Therefore the enclosed proxy card grants to the persons named in the
proxy card the authority to vote in their best judgment regarding all other
matters properly raised at the Annual Meeting.
By Order of the Board of Directors
/s/ David J. Hessler
DAVID J. HESSLER
Secretary
February 26, 2001
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. EVEN IF YOU EXPECT
TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY COMPLETE, SIGN, DATE AND MAIL THE
ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
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EXHIBIT A
AUDIT COMMITTEE CHARTER
FUNCTION OF THE COMMITTEE
The Committee will assist the Board in fulfilling the Board's oversight
responsibilities relating to accounting for the Company's financial position and
results of operations, as well as such other matters as may from time to time be
specifically delegated to the Committee by the Board.
While the Committee has the powers and responsibilities set forth in this
Charter, it is not the responsibility of the Committee to plan or conduct audits
or to determine that the Company's financial statements are complete and
accurate or are in compliance with generally accepted accounting principles,
which is the responsibility of management and the outside auditor. Likewise, it
is not the responsibility of the Committee to conduct investigations, to resolve
disputes, if any, between management and the outside auditor or to assure
compliance with laws or the Company's corporate compliance program or code of
ethics.
COMPOSITION OF THE COMMITTEE
Requirements. The Committee will consist of at least three Board members.
No member of the Committee may be an officer or employee of the Company or its
subsidiaries, and each member of the Committee must be, in the opinion of the
Board, free of any relationship that would interfere with the exercise of
independent judgment in carrying out the responsibilities as an Committee
member. In determining independence, the Board will observe the requirements of
Rules 4200(a)(15) and 4310(c)(26) of the NASD Manual.
Each member of the Committee must be able to read and understand
fundamental financial statements, including the Company's balance sheet, income
statement, and cash flow statement or must become able to do so with a
reasonable period of time after appointment to the Committee.
At least one member of the Committee must have had past employment
experience in finance or accounting, requisite professional certification in
accounting or any other comparable experience or background that results in that
individual's financial sophistication. Such experience may include being or
having been a chief executive officer, chief financial officer or other senior
officer with financial oversight responsibilities.
Appointment. The Board will appoint the members of the Committee. The Board
will, or will delegate to the members of the Committee the responsibility to,
appoint a Chairman of the Committee. The Chairman of the Committee will, in
consultation with the other members of the Committee, the Company's outside
auditors and the appropriate Officers of the Company, be responsible for calling
meetings of the Committee, establishing agenda therefor and supervising the
conduct thereof.
OUTSIDE AUDITOR
The outside auditor for the Company is ultimately accountable to the Board
and the Committee. The Committee and the Board have the ultimate authority and
responsibility to select, evaluate and, where appropriate, replace the outside
auditor. Alternatively, the Committee and the Board may nominate the outside
auditor to be proposed for shareholder approval in any proxy statement.
RESPONSIBILITIES OF THE COMMITTEE
The Committee will:
1) Recommend Outside Auditors: Recommend to the Board annually, and at
other appropriate times, the firm to be retained as the Company's outside
auditors.
2) Review Independence of Outside Auditors: In connection with
recommending the firm to be retained as the Company's outside auditors,
review the information provided by management and the outside auditors
relating to the independence of such firm, including, among other things,
information related to the non-audit services provided and expected to be
provided by the outside auditors.
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The Committee is responsible for (1) ensuring that the outside auditor
submits on a periodic basis to the Committee a formal written statement
delineating all relationships between the auditor and the Company
consistent with Independence Standards Board Standard No. 1, (2) actively
engaging in dialogue with the outside auditor with respect to any disclosed
relationship or services that may impact the objectivity and independence
of the outside auditor and (3) taking, or recommending that the Board take,
appropriate action to oversee the independence of the outside auditor.
3) Review Audit Plan: Review with the outside auditors their plans
for, and the scope of, their annual audit and other examinations.
4) Conduct of Audit: Discuss with the outside auditors the matters
required to be discussed by Statement on Auditing Standards No. 61 relating
to the conduct of the audit.
5) Review Audit Results: Review with the outside auditors the report
of their annual audit, or proposed report of their annual audit, the
accompanying management letter, if any, the reports of their reviews of the
Company's interim financial statements conducted in accordance with
Statement on Auditing Standards No. 71, and the reports of the results of
such other examinations outside of the course of the outside auditors'
normal audit procedures that the outside auditors may from time to time
undertake.
6) Review Financial Statements: Review with appropriate officers of
the Company and the outside auditors the annual and quarterly financial
statements of the Company prior to public release thereof.
7) Review Internal Audit Plans: Review with the senior internal
auditing executive and appropriate members of the staff of the internal
auditing department the plans for and the scope of their ongoing audit
activities.
8) Review Internal Audit Reports: Review with the senior internal
auditing executive and appropriate members of the staff of the internal
auditing department the annual report of the audit activities, examinations
and results thereof of the internal auditing department.
9) Review Systems of Internal Accounting Controls: Review with the
outside auditors, the senior internal auditing executive, and, if and to
the extent deemed appropriate by the Chairman of the Committee, members of
their respective staffs the adequacy of the Company's internal accounting
controls, the Company's financial, auditing and accounting organizations
and personnel and the Company's policies and compliance procedures with
respect to business practices.
10) Review Recommendations of Outside Auditors: Review with the senior
internal auditing executive and the appropriate members of the staff of the
internal auditing department recommendations made by the outside auditors
and the senior internal auditing executive, as well as such other matters,
if any, as such persons or other officers of the Company may desire to
bring to the attention of the Committee.
11) Securities Exchange Act: Obtain assurance from the outside auditor
that Section 10A of the Securities Exchange Act has not been implicated.
12) Review Other Matters: Review such other matters in relation to the
accounting, auditing and financial reporting practices and procedures of
the Company as the Committee may, in its own discretion, deem desirable in
connection with the review functions described above.
13) Board Reports: Report its activities to the Board in such manner
and at such times as it deems appropriate.
MEETINGS OF THE COMMITTEE
The Committee shall meet at least four times annually, or more frequently
as it may determine necessary, to comply with its responsibilities as set forth
herein. The Committee may request any officer or employee of the Company or the
Company's outside legal counsel or outside auditor to attend a meeting of the
Committee or to meet with any members of, or consultants to, the Committee. The
Committee may meet with management, the outside auditors and others in separate
private sessions to discuss any matter that the Committee, management, the
outside auditors or such other persons believe should be discussed privately.
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CONSULTANTS
The Committee may retain, at such times and on such terms as the Committee
determines in its sole discretion and at the Company's expense, special legal,
accounting or other consultants to advise and assist it in complying with its
responsibilities as set forth herein.
ANNUAL REPORT
The Committee will prepare, with the assistance of management, the outside
auditors and outside legal counsel, a report for inclusion in the Company's
proxy or information statement relating to the annual meeting of security
holders at which directors are to be elected that complies with the requirements
of the federal securities laws.
ANNUAL REVIEW OF CHARTER
The Committee will review and reassess, with the assistance of management,
the outside auditors and outside legal counsel, the adequacy of the Committee's
charter at least annually.
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EXHIBIT B
SHILOH INDUSTRIES, INC.
AMENDED AND RESTATED 1993 KEY EMPLOYEE STOCK INCENTIVE PLAN
1. PURPOSE. The purpose of this Plan is to attract and retain officers and
other key employees of Shiloh Industries, Inc., a Delaware corporation (the
"Corporation"), and its Subsidiaries and to provide such persons with incentives
and rewards for superior performance.
2. DEFINITIONS. As used in this Plan,
"BOARD" means the Board of Directors of the Corporation.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COMMITTEE" means the committee described in Section 13(a) of this
Plan.
"COMMON SHARES" means (i) shares of the common stock, par value $.01
per share, of the Corporation and (ii) any security into which Common
Shares may be converted by reason of any transaction or event of the type
referred to in Section 7 of this Plan.
"DATE OF GRANT" means the date specified by the Board on which a grant
of Option Rights shall become effective, which shall not be earlier than
the date on which the Board takes action with respect thereto.
"EVIDENCE OF AWARD" means an agreement, certificate, resolution or
other type or form of writing or other evidence approved by the Board which
sets forth the terms and conditions of Option Rights or Restricted Shares,
which must be signed by a representative of the Corporation and the
Participant.
"INCENTIVE STOCK OPTION" means an Option Right that is intended to
qualify as an "incentive stock option" under Section 422 of the Code or any
successor provision.
"LESS-THAN-80-PERCENT SUBSIDIARY" means a Subsidiary with respect to
which the Corporation directly or indirectly owns or controls less than 80
percent of the total combined voting or other decision-making power.
"MANAGEMENT OBJECTIVES" means the achievement or performance
objectives that may be established by the Board pursuant to this Plan for
Participants who have received grants of Restricted Shares.
"MARKET VALUE PER SHARE" means the fair market value of the Common
Shares as determined by the Board from time to time.
"NONQUALIFIED OPTION" means an Option Right that is not intended to
qualify as a Tax-Qualified Option.
"OPTIONEE" means the person so designated in an agreement evidencing
an outstanding Option Right.
"OPTION PRICE" means the purchase price payable upon the exercise of
an Option Right.
"OPTION RIGHT" means the right to purchase Common Shares from the
Corporation upon the exercise of a Nonqualified Option or a Tax-Qualified
Option granted pursuant to Section 4 of this Plan.
"PARTICIPANT" means a person who is selected by the Board to receive
benefits under this Plan and (i) is at that time an officer, including
without limitation, an officer who may also be a member of the Board, or
other key employee or consultant of the Corporation or any Subsidiary or
(ii) has agreed to commence serving in any such capacity within 90 days of
the Date of Grant.
"RESTRICTED SHARES" means Common Shares granted or sold pursuant to
Section 5 of this Plan as to which neither the substantial risk of
forfeiture nor the restrictions on transfer referred to in Section 5 hereof
have expired.
"RULE 16B-3" means Rule 16b-3 under the Securities Exchange Act of
1934 or any successor rule to the same effect.
"SUBSIDIARY" means a corporation, partnership, joint venture,
unincorporated association or other entity in which the Corporation has a
direct or indirect ownership or other equity interest; provided,
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however, for purposes of determining whether any person may be a
Participant for purposes of any grant of Incentive Stock Options,
"Subsidiary" means any corporation in which the Corporation owns or
controls directly or indirectly more than 50 percent of the total combined
voting power represented by all classes of stock issued by such corporation
at the time of the grant.
"TAX-QUALIFIED OPTION" means an Option Right that is intended to
qualify under particular provisions of the Code, including without
limitation an Incentive Stock Option.
3. SHARES AVAILABLE UNDER THE PLAN. Subject to adjustment as provided in
Section 7 of this Plan, the number of Common Shares issued or transferred upon
the exercise of Option Rights, as Restricted Shares, or in payment of dividend
equivalents paid with respect to awards made under this Plan, shall not in the
aggregate exceed 1,700,000 Common Shares, which may be Common Shares of original
issuance or Common Shares held in treasury or a combination thereof. For
purposes of this Section 3, Restricted Shares shall be deemed to have been
issued or transferred at the earlier of the time when they cease to be subject
to a substantial risk of forfeiture or the time when dividends are paid thereon.
4. OPTION RIGHTS. The Board may from time to time authorize grants to
Participants of options to purchase Common Shares upon such terms and conditions
as the Board may determine in accordance with the following provisions:
(a) Each grant shall specify the number of Common Shares to which it
pertains; provided, however, that no Participant shall be granted Option
Rights for more than 250,000 shares of Common Stock in any five-year
period, subject to adjustment in the manner provided in Section 7 of this
Plan.
(b) Each grant shall specify an Option Price per Common Share, which
may be less than, equal to or greater than the Market Value per Share on
the Date of Grant, except that the Option Price per Common Share of an
Incentive Stock Option shall be equal to or greater than the Market Value
per Share on the Date of Grant.
(c) Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price and the manner of payment of such
consideration, which may include (i) cash in the form of currency or check
or other cash equivalent acceptable to the Corporation, (ii) the actual or
constructive transfer to the Company of nonforfeitable, unrestricted Common
Shares owned by the Optionee for at least 6 months and have a value at the
time of exercise that is equal to the Option Price, (iii) any other legal
consideration that the Board may deem appropriate, including without
limitation any form of consideration authorized under Section 4(d) below,
on such basis as the Board may determine in accordance with this Plan or
(iv) any combination of the foregoing.
(d) On or after the Date of Grant of any Nonqualified Option, the
Board may determine that payment of the Option Price may also be made in
whole or in part in the form of Restricted Shares or other Common Shares
that are subject to risk of forfeiture or restrictions on transfer. Unless
otherwise determined by the Board on or after the Date of Grant, whenever
any Option Price is paid in whole or in part by means of any of the forms
of consideration specified in this Section 4(d), the Common Shares received
by the Optionee upon the exercise of the Nonqualified Option shall be
subject to the same risks of forfeiture or restrictions on transfer as
those surrendered by the Optionee; provided, however, that such risks of
forfeiture and restrictions on transfer shall apply only to the same number
of Common Shares received by the Optionee as applied to the forfeitable or
restricted Common Shares surrendered by the Optionee.
(e) Any grant may provide for deferred payment of the Option Price
from the proceeds of sale through a broker on the date of exercise of some
or all of the Common Shares to which the exercise relates.
(f) Successive grants may be made to the same Participant regardless
of whether any Option Rights previously granted to the Participant remain
unexercised.
(g) Each grant shall specify the period or periods of continuous
employment of the Optionee by the Corporation or any Subsidiary that are
necessary before the Option Rights or installments thereof shall become
exercisable, and any grant may provide for the earlier exercise of the
Option Rights in the event of a change in control of the Corporation or
other similar transaction or event.
(h) Option Rights granted pursuant to this Section 4 may be
Nonqualified Options or Tax-Qualified Options or combinations thereof.
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(i) On or after the Date of Grant of any Nonqualified Option, the
Board may provide for the payment to the Optionee of dividend equivalents
thereon in cash or Common Shares on a current, deferred or contingent
basis, or the Board may provide that any dividend equivalents shall be
credited against the Option Price.
(j) No Option Right granted pursuant to this Section 4 may be
exercised more than 10 years from the Date of Grant.
(k) Each grant shall be evidenced by an Evidence of Award, which shall
contain such terms and provisions as the Board may determine consistent
with this Plan.
5. RESTRICTED SHARES. The Board may also authorize grants or sales to
Participants of Restricted Shares upon such terms and conditions as the Board
may determine in accordance with the following provisions:
(a) Each grant or sale shall constitute an immediate transfer of the
ownership of Common Shares to the Participant in consideration of the
performance of services, entitling such Participant to dividend, voting and
other ownership rights, subject to the substantial risk of forfeiture and
restrictions on transfer hereinafter referred to.
(b) Each grant or sale may be made without additional consideration
from the Participant or in consideration of a payment by the Participant
that is less than the Market Value per Share on the Date of Grant.
(c) Each grant or sale shall provide that the Restricted Shares
covered thereby shall be subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code for a period to be determined
by the Board on the Date of Grant, and any grant or sale may provide for
the earlier termination of such period in the event of a change in control
of the Corporation or other similar transaction or event.
(d) Each grant or sale shall provide that, during the period for which
such substantial risk of forfeiture is to continue, the transferability of
the Restricted Shares shall be prohibited or restricted in the manner and
to the extent prescribed by the Board on the Date of Grant. Such
restrictions may include without limitation rights of repurchase or first
refusal in the Corporation or provisions subjecting the Restricted Shares
to a continuing substantial risk of forfeiture in the hands of any
transferee.
(e) Any grant of Restricted Shares may specify Management Objectives
which, if achieved, will result in termination or early termination of the
restrictions applicable to such shares and each such grant shall specify in
respect of such specified Management Objectives, a minimum acceptable level
of achievement and shall set forth a formula for determining the number of
Restricted Shares on which restrictions will terminate if performance is at
or above the minimum level, but falls short of full achievement of the
specified Management Objectives.
(f) Any grant or sale may require that any or all dividends or other
distributions paid on the Restricted Shares during the period of such
restrictions be automatically sequestered and reinvested on an immediate or
deferred basis in additional Common Shares, which may be subject to the
same restrictions as the underlying award or such other restrictions as the
Board may determine.
(g) Each grant or sale shall be evidenced by an agreement, which shall
be executed on behalf of the Corporation by any officer thereof and
delivered to and accepted by the Participant and shall contain such terms
and provisions as the Board may determine consistent with this Plan. Unless
otherwise directed by the Board, all certificates representing Restricted
Shares, together with a stock power that shall be endorsed in blank by the
Participant with respect to the Restricted Shares, shall be held in custody
by the Corporation until all restrictions thereon lapse.
6. TRANSFERABILITY. (a) No Option Right or other "derivative security" (as
that term is used in Rule 16b-6) granted under this Plan may be transferred by a
Participant except by will or the laws of descent and distribution. Option
Rights may not be exercised during a Participant's lifetime except by the
Participant or, in the event of the Participant's legal incapacity, by his
guardian or legal representative acting in a fiduciary capacity on behalf of the
Participant under state law and court supervision.
(b) Any award made under this Plan may provide that all or any part of
the Common Shares that are to be issued or transferred by the Corporation
upon the exercise of Option Rights, or are no longer subject to
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the substantial risk of forfeiture and restrictions on transfer referred to
in Section 5 of this Plan, shall be subject to further restrictions upon
transfer.
7. ADJUSTMENTS. The Board may make or provide for such adjustments in the
number of Common Shares covered by outstanding Option Rights, the Option Prices
per Common Share applicable to any such Option Rights, and the kind of shares
(including shares of another issuer) covered thereby, as the Board may in good
faith determine to be equitably required in order to prevent dilution or
expansion of the rights of Participants that otherwise would result from (i) any
stock dividend, stock split, combination of shares, recapitalization or other
change in the capital structure of the Corporation or (ii) any merger,
consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial
or complete liquidation or other distribution of assets, issuance of warrants or
other rights to purchase securities or (iii) any other corporate transaction or
event having an effect similar to any of the foregoing. In the event of any such
transaction or event, the Board may provide in substitution for any or all
outstanding awards under this Plan such alternative consideration as it may in
good faith determine to be equitable under the circumstances and may require in
connection therewith the surrender of all awards so replaced. Moreover, the
Board may on or after the Date of Grant provide in the agreement evidencing any
award under this Plan that the holder of the award may elect to receive an
equivalent award in respect of securities of the surviving entity of any merger,
consolidation or other transaction or event having a similar effect, or the
Board may provide that the holder will automatically be entitled to receive such
an equivalent award. The Board may also make or provide for such adjustments in
the number of Common Shares specified in Section 3 of this Plan as the Board may
in good faith determine to be appropriate in order to reflect any transaction or
event described in this Section 7.
8. FRACTIONAL SHARES. The Corporation shall not be required to issue any
fractional Common Shares pursuant to this Plan. The Board may provide for the
elimination of fractions or for the settlement thereof in cash.
9. WITHHOLDING TAXES. To the extent that the Corporation is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Corporation for the withholding are insufficient,
it shall be a condition to the receipt of any such payment or the realization of
any such benefit that the Participant or such other person make arrangements
satisfactory to the Corporation for payment of the balance of any taxes required
to be withheld. At the discretion of the Board, any such arrangements may
include relinquishment of a portion of any such payment or benefit but only to
the extent of the minimum withholding required by law.
10. PARTICIPATION BY EMPLOYEES OF A LESS-THAN-80-PERCENT SUBSIDIARY. As a
condition to the effectiveness of any grant or award to be made hereunder to a
Participant who is an employee of a Less-Than-80-Percent Subsidiary, regardless
whether the Participant is also employed by the Corporation or another
Subsidiary, the Board may require the Less-Than-80-Percent Subsidiary to agree
to transfer to the Participant (as, if and when provided for under this Plan and
any applicable agreement entered into between the Participant and the
Less-Than-80-Percent Subsidiary pursuant to this Plan) the Common Shares that
would otherwise be delivered by the Corporation upon receipt by the
Less-Than-80-Percent Subsidiary of any consideration then otherwise payable by
the Participant to the Corporation. Any such award may be evidenced by an
agreement between the Participant and the Less-Than-80-Percent Subsidiary, in
lieu of the Corporation, on terms consistent with this Plan and approved by the
Board and the Less-Than-80-Percent Subsidiary. All Common Shares so delivered by
or to a Less-Than-80-Percent Subsidiary will be treated as if they had been
delivered by or to the Corporation for purposes of Section 3 of this Plan, and
all references to the Corporation in this Plan shall be deemed to refer to the
Less-Than-80-Percent Subsidiary except with respect to the definitions of the
Board and the Committee and in other cases where the context otherwise requires.
11. CERTAIN TERMINATIONS OF EMPLOYMENT, HARDSHIP AND APPROVED LEAVES OF
ABSENCE. Notwithstanding any other provision of this Plan to the contrary, in
the event of termination of employment by reason of death, disability, normal
retirement, early retirement with the consent of the Corporation, termination of
employment to enter public service with the consent of the Corporation or leave
of absence approved by the Corporation, or in the event of hardship or other
special circumstances, of a Participant who holds an Option Right that is not
immediately and fully exercisable, any Restricted Shares as to which the
substantial risk of forfeiture or the prohibition or restriction on transfer has
not lapsed, or any Common Shares that are subject to any transfer restriction
pursuant to Section 6(b) of this Plan, the Board may take any action that
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it deems to be equitable under the circumstances or in the best interests of the
Corporation, including without limitation waiving or modifying any limitation or
requirement with respect to any award under this Plan.
12. FOREIGN EMPLOYEES. In order to facilitate the making of any award or
combination of awards under this Plan, the Board may provide for such special
terms for awards to Participants who are foreign nationals, or who are employed
by the Corporation or any Subsidiary outside of the United States of America, as
the Board may consider necessary or appropriate to accommodate differences in
local law, tax policy or custom. Moreover, the Board may approve such
supplements to, or amendments, restatements or alternative versions of, this
Plan as it may consider necessary or appropriate for such purposes without
thereby affecting the terms of this Plan as in effect for any other purpose;
provided, however, that no such supplements, amendments, restatements or
alternative versions shall include any provisions that are inconsistent with the
terms of this Plan, as then in effect, unless this Plan could have been amended
to eliminate the inconsistency without further approval by the stockholders of
the Corporation.
13. ADMINISTRATION OF THE PLAN. (a) This Plan shall be administered by the
Compensation Committee of the Board provided that it is a committee of not less
than three members of the Board, each of whom shall be a "non-employee director"
within the meaning of Rule 16b-3 and "outside directors" within the meaning of
Section 162(m) of the Code. A majority of the members of the Committee shall
constitute a quorum, and the acts of the members of the Committee who are
present at any meeting thereof at which a quorum is present, or acts unanimously
approved in writing by the members of the Committee, shall be the acts of the
Committee.
(b) The interpretation and construction by the Committee of any
provision of this Plan or any agreement, notification or document
evidencing a grant of Option Rights or Restricted Shares, and any
determination by the Committee pursuant to any provision of this Plan or
any such agreement, notification or document, shall be final and
conclusive. No member of the Committee shall be liable for any such action
taken or determination made in good faith.
14. AMENDMENTS AND OTHER MATTERS. (a) This Plan may be amended from time to
time by the Board; provided, however, that any amendment that must be approved
by the shareholders of the Corporation in order to comply with applicable law or
the rules of the Nasdaq Stock Market or, if the Common Shares are not traded on
the Nasdaq Stock Market, the principal national securities exchange upon which
the Common Shares are traded or quoted, shall not be effective unless and until
such approval has been obtained. Presentation of this Plan or any amendment
hereof for shareholder approval shall not be construed to limit the
Corporation's authority to offer similar or dissimilar benefits under other
plans or otherwise with or without shareholder approval. Without limiting the
generality of the foregoing, the Board may amend this Plan to eliminate
provisions which are no longer necessary as a result of changes in tax or
securities laws or regulations, or in the interpretation thereof.
(b) With the concurrence of the affected Participant, the Board may
cancel any agreement evidencing Option Rights or any other award granted
under this Plan. In the event of any such cancellation, the Board may
authorize the granting of new Option Rights or other awards hereunder,
which may or may not cover the same number of Common Shares as had been
covered by the canceled Option Rights or other award, at such Option Price,
in such manner and subject to such other terms, conditions and discretion
as would have been permitted under this Plan had the canceled Option Rights
or other award not been granted.
(c) This Plan shall not confer upon any Participant any right with
respect to continuance of employment or other service with the Corporation
or any Subsidiary and shall not interfere in any way with any right that
the Corporation or any Subsidiary would otherwise have to terminate any
Participant's employment or other service at any time.
(d) To the extent that any provision of this Plan would prevent any
Option Right that was intended to qualify as a Tax-Qualified Option from so
qualifying, any such provision shall be null and void with respect to any
such Option Right; provided, however, that any such provision shall remain
in effect with respect to other Option Rights, and there shall be no
further effect on any provision of this Plan.
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PROXY PROXY
SHILOH INDUSTRIES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
FOR THE ANNUAL STOCKHOLDERS MEETING ON MARCH 28, 2001.
The undersigned hereby constitutes and appoints Curtis E. Moll, John F.
Falcon and David J. Hessler, and each of them, his true and lawful agents and
proxies with full power of substitution in each, to represent the undersigned at
the annual meeting of stockholders of Shiloh Industries, Inc. to be held at the
Holiday Inn Select, 15471 Royalton Road, Strongsville, Ohio 44136 on Wednesday,
March 28, 2001, at 10:00 a.m., and at any adjournments or postponements thereof,
as follows and in accordance with their judgment upon any other matters coming
before said meeting.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING (change of address)
THE APPROPRIATE BOXES, SEE REVERSE SIDE, AND SHARES
REPRESENTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL ------------------------
BE VOTED AS DIRECTED OR, IF DIRECTIONS ARE NOT ------------------------
INDICATED, WILL BE VOTED IN ACCORDANCE WITH THE BOARD ------------------------
OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE ------------------------
YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD. ------------------------
SEE REVERSE SIDE (If you have written in the above
space, please mark the
corresponding oval on the
reverse side of this card.)
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT IN THE
ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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SHILOH INDUSTRIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. Election of Directors --
Nominees: James C. Fanello,
Ronald C. Houser For Withhold For All Change of Address [ ]
and James A. Karman All All Except
0 0 0
(Except nominees written above)
2. Approval of amendments to 1993 Key For Against Abstain Attend Meeting [ ]
Employee Stock Incentive Plan 0 0 0
3. Approval of PricewaterhouseCoopers LLP as For Against Abstain
Independent Accountants 0 0 0
Dated:
---------------------------
Signature(s)
---------------------------------
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.
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN
IT IN THE ENCLOSED ENVELOPE.