Document jNNebOz37ga4GRdz9r7Mo73YR
FAWICK CORPORATION
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To The Shareholders of Fawick Corporation :
Please Take Notice that a Special Meeting of Shareholders of Fawick Corporation,
a Michigan corporation (hereinafter called "Fawick"), will be held at the Hotel Statler Hilton,
Cleveland, Ohio, on Tuesday, the 26th day of March, 1968 at 2:00 o'clock P.M. (Eastern
Standard Time) for the following purposes:
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1. To consider and vote upon the adoption of the Agreement of Merger dated `.as of
February 1, 1968, between Fawick and Eaton Yale & Towne Inc., am Ohio corporation
(hereinafter sometimes called "EYT"), which is included in the accompanying Proxy
Statement and provides for the merger of Fawick into EYT as the surviving'corpora
tion, and to authorize the directors and appropriate officers of Fawick to take all
action necessary or desirable to accomplish said merger;
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2. To transact such other business as may properly come before/thej'meeting.
Only the shareholders of record at the close of business on March 1, 1968 are entitled to
notice of, and to vote at, this meeting. The affirmative, 'vote of holders of not less than two-
thirds of the outstanding shares of capital stock of,Fawick will be required to accomplish the
proposed merger.
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Shareholders who do not expect to be present at. the meeting are urged to complete,
date, sign and return the enclosed proxy tru the envelope furnished. No postage is needed if
mailed in the United States.
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..;h "By Order of the Board of Directors,
Dated: March 1, 1968-:
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Edward C. Crouch
Secretary
PLAINTIFF'S EXHIBIT
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FAW 03188
FAWICK CORPORATION AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS
Note I. Principles of Consolidation:
The financial statements include' the accounts of the Corporation and all of its subsidiaries, both
domestic and foreign.
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The following changes have occurred in the January 1, 1963-December 31, 1967 period included in the
Consolidated Statement of Income:
a) Fawi.ck N. V., a Netherlands corporation, was formed in 1965;
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b) hr transactions .accounted for as poolings of interests, Fawick Flexi-Grip Company was acquired.. j
in May, 1964 and Olrae Precision, Inc. in September, 1967. The operating results of these com- A,
panies are included for all periods show in the Consolidated Statement of Ineom&7
c) During 1964 and 1965, Fawick Corporation owned approximately 58 per cent qf'the capital stock
of National Friction Products Corp. and the accounts of National are included in.,tlie" income
statements for those years. In 1966, Fawick Corporation's ownership decreased tb. its 'present
43 per cent interest and the accounts of National are not included for any period' 'subsequent
to 1965. The Io.sses of National in 1964 and 1965 were not significant anyrelation.;to;.cbnsolidated net
income.
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The Corporation's equity in the net assets of consolidated subsidiaries,-exceeded itQ'`'mye3trnmit therein by 5230,716 at December 31, 1967, which amount is included in consoDdated.retqmed earnings.
Net current assets of foreign subsidiaries have been expressed in 'Nnitedf &tates dollars at the rates of
ixchange in effect at December 31, 1967. Property, plant and equipment haye'he^r'expressed in United States
lollars at historical rates of exchange. Earnings of foreign subsidiaries have jbqeh .expressed in United States
lollars at an average exchange rate, the unrealized difference.;,being_ reflected in the consolidated statement
>f income.
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^ote 2. Deferred Federal Income Taxes:
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The balance represents the cumulative deferred tax-'effect; arising from the excess of accelerated de
preciation taken for tax purposes over depreciation recorded, in the accounts. The portion applicable to the
'ear 1967 was ?90,000.
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Sote 3. Inventories:
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The amounts of inventories used1- in determination of cost of goods sold were as follows:
December 31, 19674................. December 31,
$3,338,278 3,402,460
December Si, 1963
1,883,423
FAW 03236