1 Elect Nominees

PROXY Governance Vote Recommendation: FOR

Proposal:

To elect the following four nominees to the board: R. Kohlhepp, G. Mazzalupi, K. Muller, M. Tambakeras

The company has a staggered board.

Analysis:

	•		Board size: 10
	•		New directors since last year: 0
	•		Independent directors: 8
	•		Non-Independent directors: 2

Non-Independent directors: President/COO N. Vande Steeg, Chair/CEO D. Washkewicz

D. Collins, whose term expires in October 2006, and P. Likins, whose term expires in October 2008, will both retire from the board effective as of Oct. 25, 2006 due to the policy of mandatory retirement at age 70. H. Ortino, whose term was set to expire in October 2007, passed away in November 2005.

Unless there is evidence of a breakdown in board monitoring or effectiveness — such as poor corporate performance relative to peers, excessive executive compensation, noncompliance with SEC rules or SRO listing standards, a lack of responsiveness to legitimate shareholder concerns, or various other factors — we presume that the board is properly discharging its oversight role and that it is adequately policing itself in terms of board organization, composition and functioning.

Performance: According to PROXY Governance’s performance analysis, the company has performed in line with peers over the past five years; the company ranks at the 53rd percentile relative to the S&P 1500.

Compensation: The average three-year compensation paid to the CEO is 48% above the median paid to CEOs at peer companies and the average three-year compensation paid to the other named executives is 72% above the median paid to executives at peer companies.

The company’s executive compensation appears somewhat high compared to peers and given its financial performance relative to peers, which we attribute to the high value of stock options and restricted stock awarded to the company’s other named executives.

The company’s long-term incentive compensation for its executive officers included both stock options and restricted stock awards. The restricted stock awarded to an individual executive was based on a target stock incentive dollar value, which was established by the Compensation Committee at the market median of comparable stock compensation for the company’s “Compensation Comparison Group,” a group of primarily Fortune 300 industrial manufacturing companies. Individual payments were determined by comparing the company’s revenue growth, earnings per share, and return on invested capital to a group of approximately 20 peers. For example, President/COO Vande Steeg was awarded $2.7 million in restricted stock, and EVP J. Myslenski was awarded $2.5 million in restricted stock.

The stock option grants were also based on a target value established at the Compensation Comparison Group’s market median of comparable stock incentive compensation. For example, Vande Steeg was granted stock options valued at $1.9 million using a binomial formula, and Myslenski was granted stock options valued at $2.3 million using a binomial formula. The options vest ratably over three years following the grant date.

While the company’s compensation to its other named executives is somewhat high compared to peers, we note that company performance is generally in line, and that the long-term incentive awards are based on comparable stock-based awards within the industry. We will continue to monitor executive compensation.

Rationale/Conclusion:

PROXY Governance believes that the board is properly discharging its oversight role and adequately policing itself. However, we will continue to monitor executive compensation going forward.

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2 Ratify Appointment of Auditors — PricewaterhouseCoopers LLP

PROXY Governance Vote Recommendation: FOR

Proposal:

The Audit Committee has selected PricewaterhouseCoopers LLP as the company’s independent auditors for the next fiscal year.

Analysis:

Barring circumstances where there is an audit failure due to the auditor not following its own procedures or where the auditor is otherwise complicit in an accounting treatment that misrepresents the financial condition of the company, PROXY Governance recommends the company’s choice of auditor. PROXY Governance believes that concerns about a corporation’s choice of auditor and the services performed (e.g., high non-audit fees) should be directed through withhold votes from the members of the audit committee, which is responsible for retaining and compensating the auditor.

We note that PricewaterhouseCoopers LLP has served as the company’s outside auditor since 1938. Given this lengthy tenure, the Audit Committee report or charter should disclose the committee’s policies and process for periodically evaluating the audit firm.

Rationale/Conclusion:

We believe that, in this circumstance, the board/audit committee should be accorded discretion in its selection of the auditor.

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3 Eliminate Classified Board

PROXY Governance Vote Recommendation: AGAINST

Proposal:

The proponent requests that the board take the necessary steps to declassify the board so that all directors are elected annually. Approval of this proposal will not automatically eliminate the classified board structure since to do so would require an amendment of the company’s governing documents.

Proponent:

UNITE HERE

Shareholder View:

The proponent believes that shareholders should have the opportunity to vote on the performance of the entire board each year and notes that institutional investors are calling for the end of classified boards and many large companies are following this practice. The proponent also notes last year’s vote result on the same issue.

Management View:

The company believes that it is in the best interests of shareholders to maintain the classified board structure because it ensures the stability of continuous, experienced directors who have specific knowledge of the company and the industry in which it operates, which helps to support long-term corporate strategies. In addition, a classified board enhances its ability to negotiate the best results for shareholders in a takeover situation since at least two annual meetings would be required to effect a change in control of the board.

Analysis:

PROXY Governance generally believes that, in many situations, classified boards serve a very useful purpose and that they should not always be disparaged as simply another antitakeover device. In some cases, a classified board can enhance director independence, and, at companies with majority voting in director elections, a classified board safeguards against the possibility of all directors failing an election at once.

We note that the arguments against classified boards relating to their antitakeover effect are solely dependent on the classification being coupled with a “removal of directors only for cause” provision. Absent such a provision there would be no antitakeover effect. However, the ability to decouple board classification and “removal for cause only” provisions varies from state to state. We believe, therefore, that much of the motivation for these declassification proposals and rationale for them is misdirected at the classified board concept, when it should be directed — if the proponent is opposed to antitakeover measures — at the “removal for cause” concept.

Under the Ohio General Corporation Law, if a corporation’s board is divided into classes, then directors may be removed by the shareholders only for cause.

We note that the company has performed in line with peers over the past five years; the company ranks at the 53rd percentile relative to the S&P 1500.

We also note that the board is 80% independent and that the average tenure on the board is 5 years.

We note that a shareholder proposal on this issue received support from 78.3% of the votes cast at last year’s annual meeting.

Rationale/Conclusion:

We do not believe the classified board has been detrimental to shareholders and, in fact, can provide benefits such as promoting independence and stability.

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