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
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
COLUMBUS MCKINNON CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as specified in its charter)
Payment of filing fee (check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies:
(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: __/
(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:
COLUMBUS MCKINNON CORPORATION
140 JOHN JAMES AUDUBON PARKWAY
AMHERST, NEW YORK 14228-1197
----------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 19, 2002
----------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Columbus
McKinnon Corporation, a New York corporation (the "Company"), will be held at
the Company's corporate offices, 140 John James Audubon Parkway, Amherst, New
York, on August 19, 2002, at 10:00 a.m., local time, for the following purposes:
1. To elect six Directors to hold office until the 2003 Annual Meeting
and until their successors have been elected and qualified;
2. To consider and vote upon a proposed amendment to the Amended and
Restated Columbus McKinnon Corporation 1995 Incentive Stock Option Plan;
3. To consider and vote upon a proposed amendment to the Columbus
McKinnon Corporation Restricted Stock Plan; and
4. To take action upon and transact such other business as may be
properly brought before the meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on June 28, 2002,
as the record date for the determination of shareholders entitled to receive
notice of and to vote at the Annual Meeting.
It is important that your shares be represented and voted at the Annual
Meeting. Whether or not you plan to attend, please sign, date and return the
enclosed proxy card in the enclosed postage-paid envelope or vote by telephone
or using the internet as instructed on the enclosed proxy card. If you attend
the Annual Meeting, you may vote your shares in person if you wish. We sincerely
appreciate your prompt cooperation.
LOIS H. DEMLER
Corporate Secretary
Dated: July 19, 2002
COLUMBUS MCKINNON CORPORATION
140 JOHN JAMES AUDUBON PARKWAY
AMHERST, NEW YORK 14228-1197
-------------------------------------------------
PROXY STATEMENT
-------------------------------------------------
This Proxy Statement and the accompanying form of proxy are being
furnished in connection with the solicitation by the Board of Directors of
Columbus McKinnon Corporation, a New York corporation ("our Company", "we" or
"us"), of proxies to be voted at the Annual Meeting of Shareholders to be held
at our corporate offices, 140 John James Audubon Parkway, Amherst, New York, on
August 19, 2002, at 10:00 a.m., local time, and at any adjournment or
adjournments thereof. The close of business on June 28, 2002 has been fixed as
the record date for the determination of shareholders entitled to receive notice
of and to vote at the meeting. At the close of business on June 28, 2002, we had
outstanding 14,895,172 shares of our common stock, $.01 par value per share, the
holders of which are entitled to one vote per share on each matter properly
brought before the Annual Meeting.
The shares represented by all valid proxies in the enclosed form will be
voted if received in time for the Annual Meeting in accordance with the
specifications, if any, made on the proxy card. If no specification is made, the
proxies will be voted FOR the nominees for Director named in this Proxy
Statement, FOR the approval of the proposed amendment to the Amended and
Restated Columbus McKinnon Corporation 1995 Incentive Stock Option Plan and FOR
the approval of the proposed amendment to the Columbus McKinnon Corporation
Restricted Stock Plan.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of common stock entitled to vote at the Annual Meeting will
constitute a quorum. Each nominee for election as a Director requires a
plurality of the votes cast in order to be elected. A plurality means that the
nominees with the largest number of votes are elected as Directors up to the
maximum number of Directors to be elected at the Annual Meeting. A majority of
the votes cast is required to approve the adoption of the proposed amendment to
the Amended and Restated Columbus McKinnon Corporation 1995 Incentive Stock
Option Plan and the proposed amendment to the Columbus McKinnon Corporation
Restricted Stock Plan. Under the law of the State of New York, our state of
incorporation, only "votes cast" by the shareholders entitled to vote are
determinative of the outcome of the matter subject to shareholder vote. Votes
withheld will be counted in determining the existence of a quorum, but will not
be counted towards such nominee's or any other nominee's achievement of
plurality.
The execution of a proxy will not affect a shareholder's right to attend
the Annual Meeting and to vote in person. A shareholder who executes a proxy may
revoke it at any time before it is exercised by giving written notice to the
Secretary, by appearing at the Annual Meeting and so stating, or by submitting
another duly executed proxy bearing a later date.
This Proxy Statement and form of proxy is first being sent or given to
shareholders on July 22, 2002.
PROPOSAL 1
ELECTION OF DIRECTORS
Our Certificate of Incorporation provides that our Board of Directors
shall consist of not less than three nor more than nine Directors to be elected
at each annual meeting of shareholders and to serve for a term of one year or
until their successors are duly elected and qualified. Currently, the Board of
Directors is comprised of six members. A seventh Director, Mr. Randolph A.
Marks, a Director since 1986, resigned from the Board of Directors in June 2002
due to health reasons.
Unless instructions to the contrary are received, it is intended that the
shares represented by proxies will be voted for the election as Directors of
Timothy T. Tevens, Robert L. Montgomery, Jr., Herbert P. Ladds, Jr., L. David
Black, Carlos Pascual and Richard H. Fleming, each of whom is presently a
Director and has been previously elected by our shareholders. If any of these
nominees should become unavailable for election for any reason, it is intended
that the shares represented by the proxies solicited herewith will be voted for
such other person as the Board of Directors shall designate. The Board of
Directors has no reason to believe that any of these nominees will be unable or
unwilling to serve if elected to office.
The following information is provided concerning the nominees for
Director:
TIMOTHY T. TEVENS was elected President and a Director of our Company in
January 1998 and assumed the duties of Chief Executive Officer in July 1998.
From May 1991 to January 1998 he served as our Vice President - Information
Services and was elected Chief Operating Officer in October 1996. From 1980 to
1991, Mr. Tevens was employed by Ernst & Young LLP in various management
consulting capacities.
ROBERT L. MONTGOMERY, JR. joined us in 1974 and has served as our
Executive Vice President and Chief Financial Officer since 1987 and as a
Director of our Company since 1982. Prior to joining us, Mr. Montgomery was
employed as a certified public accountant by PricewaterhouseCoopers LLP.
HERBERT P. LADDS, JR. has been a Director of our Company since 1973 and
was elected our Chairman of the Board of Directors in January 1998. Mr. Ladds
served as our Chief Executive Officer from 1986 until his retirement in July
1998. Mr. Ladds was our President from 1982 until January 1998, our Executive
Vice President from 1981 to 1982 and Vice President - Sales & Marketing from
1971 to 1980. Mr. Ladds is also a director of Utica Mutual Insurance Company,
R.P. Adams Company, Inc. and Fibron Products, Inc.
L. DAVID BLACK has been a Director of our Company since 1995. Mr. Black
was the Chairman of the Board of JLG Industries, Inc., from 1993 until his
retirement in February 2001. In addition, Mr. Black served as its President and
Chief Executive Officer from 1991 until September 2000.
- 2 -
CARLOS PASCUAL has been a Director of our Company since 1998. Since
January 2000, Mr. Pascual has been Executive Vice President and President of
Developing Markets Operations for Xerox. From January 1999 to January 2000, Mr.
Pascual served as Deputy Executive Officer of Xerox's Industry Solutions
Operations. From August 1995 to January 1999, Mr. Pascual served as President of
Xerox Corporation's United States Customer Operations. Prior thereto, he has
served in various capacities with Xerox Corporation.
RICHARD H. FLEMING was appointed a Director of our Company in March 1999.
In February 1999, Mr. Fleming was appointed Executive Vice President and Chief
Financial Officer of USG Corporation. Prior thereto, Mr. Fleming served USG
Corporation in various executive financial capacities, including Senior Vice
President and Chief Financial Officer from January 1995 to February 1999 and
Vice President and Chief Financial Officer from January 1994 to January 1995.
THE BOARD OF DIRECTORS RECOMMENDS UNANIMOUSLY A VOTE "FOR" EACH OF THE DIRECTOR
NOMINEES.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the year ended March 31, 2002, our Board of Directors held nine
meetings. Each Director attended at least 75% of the aggregate number of
meetings of our Board of Directors and meetings held by all committees of our
Board of Directors on which he served, except for Mr. Marks.
AUDIT COMMITTEE
Our Board of Directors has a standing Audit Committee comprised of Mr.
Fleming, as Chairman, and Messrs. Black and Pascual. Each member of our Audit
Committee is independent as defined in the listing standards of the National
Association of Security Dealers. The duties of our Audit Committee consist of
reviewing with our independent auditors and our management, the scope and
results of the annual audit and other services provided by our independent
auditors. Our Audit Committee also reviews the scope and resulting reports of
our internal audits. Our Audit Committee held three meetings in fiscal 2002.
COMPENSATION AND NOMINATION/SUCCESSION COMMITTEE
Our Compensation and Nomination/Succession Committee consists of Mr.
Pascual, as Chairman, and Messrs. Black and Fleming, all of whom are
non-employee independent directors. This committee (i) reviews the performance
of our chief executive officer and other executive officers and makes
recommendations concerning their compensation, (ii) administers and makes
recommendations for grants and awards to our employees under our incentive
compensation programs, (iii) considers and recommends candidates for membership
on our Board of Directors and (iv) reviews and makes recommendations with
respect to our succession plan for all key management positions. Our
Compensation and Nomination/Succession Committee does not solicit direct
nominations from our shareholders, but will give due consideration to written
recommendations for nominees from our shareholders for election as directors
that are submitted in accordance with our by-laws. See the information contained
herein under the heading "Shareholders' Proposals." Our Compensation and
Nomination/Succession Committee held seven meetings in fiscal 2002.
- 3 -
OTHER COMMITTEES
Our Board of Directors does not have a standing executive committee, the
functions of which are handled by our entire Board.
- 4 -
OUR DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding our Directors
and executive officers:
NAME AGE POSITION
Herbert P. Ladds, Jr. 69 Chairman of the Board
Timothy T. Tevens 46 President, Chief Executive Officer
and Director
Robert L. Montgomery, Jr. 64 Executive Vice President, Chief
Financial Officer and Director
L. David Black (1)(2) 65 Director
Carlos Pascual (1)(2) 56 Director
Richard H. Fleming (1)(2) 55 Director
Ned T. Librock 49 Vice President - Sales
Karen L. Howard 40 Vice President - Controller
Joseph J. Owen 41 Vice President - Strategic
Integration
Ernst K. H. Marburg 67 Vice President - Total Quality and
Standards
Robert H. Myers, Jr. 59 Vice President - Human Resources
Lois H. Demler 64 Corporate Secretary
John R. Hansen 63 Treasurer
------------------
(1) Member of our Compensation and Nomination/Succession Committee.
(2) Member of our Audit Committee.
All of our officers are elected annually at the first meeting of our Board
of Directors following the Annual Meeting of Shareholders and serve at the
discretion of our Board of Directors. There are no family relationships between
any of our officers or Directors. Recent business experience of our Directors is
set forth above under "Election of Directors." Recent business experience of our
executive officers who are not also Directors is as follows:
NED T. LIBROCK was elected a Vice President in November 1995. Mr. Librock
has been employed by us since 1990 in various sales management capacities. Prior
to his employment with us, Mr. Librock was employed by Dynabrade Inc., a
manufacturer of power tools, as director of Sales and Marketing.
- 5 -
KAREN L. HOWARD was elected our Vice President - Controller in January
1997. From June 1995 to January 1997, Ms. Howard was employed by us in various
financial and accounting capacities. Previously, Ms. Howard was employed by
Ernst & Young LLP as a certified public accountant.
JOSEPH J. OWEN was appointed Vice President - Strategic Integration in
August 1999. From April 1997 to August 1999, Mr. Owen was employed by us as
Corporate Director - Materials Management. Prior to joining us, Mr. Owen was
employed by Ernst & Young LLP in various management consulting capacities.
ERNST K. H. MARBURG has been employed by us since May 1980. Prior to his
appointment as Vice President - Total Quality and Standards in October 1996, Mr.
Marburg served as our Manager of Product Standards and Services for nearly
sixteen years.
ROBERT H. MYERS, JR. has been employed by us since 1959. In October of
2001, Mr. Myers was appointed Vice President - Human Resources. Prior to October
2001, Mr. Myers served for eight years as Corporate Manager of Environmental
Systems. Prior to that, Mr. Myers served as Human Resources Director of our CM
Hoist Division.
LOIS H. DEMLER has been employed by us since 1963. Ms. Demler has been our
Corporate Secretary since 1987.
JOHN R. HANSEN has been employed by us since 1976. In May of 2001, Mr.
Hansen was appointed Treasurer. Prior to May of 2001, Mr. Hansen served in
various capacities, including Manager - Pension and Benefit Plans and Director -
Employee Benefits.
- 6 -
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the cash compensation as well as certain
other compensation paid during the fiscal years ended March 31, 2000, 2001 and
2002 for our Chief Executive Officer and our other four most highly compensated
executive officers. The amounts shown include compensation for services in all
compensation capacities.
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
------------------------------------ -------------------------------------------
SECURITIES
RESTRICTED UNDERLYING
NAME AND PRINCIPAL FISCAL OTHER ANNUAL STOCK OPTIONS/ ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION AWARDS(1) SARS(2) COMPENSATION(3)
----------------------- ------ ------ ----- ------------ --------- --------- ---------------
Timothy T. Tevens, 2002 $462,548 $ - $ - - 60,000 $ 9,129
President and Chief 2001 450,000 67,500 - - - 8,412
Executive Officer 2000 448,769 - - 2,488 54,000 9,485
Robert L. Montgomery, 2002 385,457 - - - - 10,953
Jr., Executive Vice 2001 375,000 56,250 - - - 11,117
President And 2000 373,923 - - 2,417 - 12,238
Chief Financial Officer
Ned T. Librock, 2002 215,385 - 69,373(4) - 45,000 10,796
Vice President - Sales 2001 210,000 31,500 24,867(5) - - 12,220
2000 209,538 - 68,553(5) 1,386 36,000 15,316
Karen L. Howard, 2002 182,635 - - - 45,000 10,060
Vice President - 2001 167,000 25,050 68,056(6) - - 10,975
Controller 2000 163,240 - - 1,031 36,000 15,474
Joseph J. Owen, 2002 180,673 - - - 45,000 9,010
Vice President - 2001 165,000 21,450 - - - 8,435
Strategic Integration 2000 160,500 - - 1,016 18,000 11,758
------------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Tevens was granted 2,488 shares of restricted common stock on June 10,
1999, which had a value on such date of $61,900, and a value on March 31,
2002, 2002 of $31,846. Mr. Montgomery was granted 2,417 shares of
restricted common stock on June 10, 1999, which had a value on such date
of $60,100, and a value as of March 31, 2002 of $30,938. Mr. Librock was
granted 1,386 shares of restricted common stock on June 10, 1999, which
had a value on such date of $34,500, 11,900 shares of restricted common
stock on July 22, 1996, which had a value on such date of $166,600, and
5,100 shares of restricted common stock on August 1, 1994, which had a
value on such date of $48,996. The restrictions on 5,100 of Mr. Librock's
restricted shares of common stock lapsed on July 31, 1999, on which date
such shares had a value of $116,981 and the restrictions on 11,900 of Mr.
Librock's restricted shares of common stock lapsed on July 21, 2001, on
which date such shares had a value of $121,737. As of March 31, 2002, the
number of restricted shares of common stock held by Mr. Librock was 1,386
and the value of such restricted shares was $17,741. Ms. Howard was
granted 1,031 shares of restricted common stock on June 10, 1999, which
had a value on such date of $25,650; 8,500 shares of restricted common
stock on August 17, 1998, which had a value on such date of $196,563 and
8,500 shares of restricted common stock on June 1, 1995, which had a value
on such date of $107,875. The restrictions on 8,500 of Ms. Howard's
restricted shares of common stock lapsed on May 31, 2000, on which date
such shares had a value of $116,875. As of March 31, 2002, the number of
restricted shares of common stock held by Ms. Howard was 9,531 and the
value of such restricted shares was $121,997. Mr. Owen was granted 1,016
shares of restricted common stock on June 10, 1999, which had a value on
such date of $25,300 and 5,000 shares of restricted common stock on April
14, 1997, which had a value on such date of $95,000. As of March 31, 2002,
the number of restricted shares of common stock held by Mr. Owen was
6,016, and the value of such restricted shares was $77,005. We do not pay
dividends on our outstanding shares of restricted common stock, but we
provide additional compensation in lieu of such dividends. See footnote
(3) below.
(2) Consists of (i) options granted in fiscal 2002 to Messrs. Tevens, and
- 7 -
Librock, Ms. Howard and Mr. Owen pursuant to our Incentive Stock Option
Plan in the amounts of 38,620, 40,500, 40,500 and 40,500, respectively,
(ii) options granted in fiscal 2002 to Messrs. Tevens and Librock, Ms.
Howard and Mr. Owen pursuant to our Non-Qualified Stock Option Plan in the
amounts of 21,380, 4,500, 4,500 and 4,500, respectively, (iii) options
granted in fiscal 2000 to Messrs. Tevens and Librock, Ms. Howard and Mr.
Owen pursuant our Incentive Stock Option Plan in the amounts of 23,810,
22,345, 22,345, and 18,000, respectively, and (iv) options granted in
fiscal 2000 to Messrs. Tevens and Librock and Ms. Howard pursuant to our
Non-Qualified Stock Option Plan in the amounts of 30,190, 13,655 and
13,655, respectively.
(3) Consists of: (i) the value of shares of common stock allocated in fiscal
2002 under our Employee Stock Ownership Plan or, ESOP, to accounts for
Messrs. Tevens, Montgomery, Librock, Ms. Howard and Mr. Owen in the
amounts of $3,242, $5,237, $3,259, $2,551 and $2,539, respectively, (ii)
premiums for group term life insurance policies insuring the lives of
Messrs. Tevens, Montgomery and Librock, Ms. Howard and Mr. Owen in the
amount of $108 each, (iii) compensation in lieu of dividends on restricted
shares of common stock paid to Messrs. Tevens, Montgomery, Librock, Ms.
Howard and Mr. Owen in the amounts of $522, $508, $2,329, $2,546 and
$1,263, respectively, (iv) our matching contributions under our 401(k)
plan for Messrs. Tevens, Montgomery and Librock, Ms. Howard and Mr. Owen
in the amounts of $5,100, $5,100, $5,100, $4,855 and $5,100, respectively.
(4) Represents tax reimbursement payments we made to Mr. Librock in fiscal
2002 to offset the income tax effects of the expiration of the
restrictions on 11,900 shares of restricted common stock granted to him in
fiscal 1997 and released in fiscal 2002. See footnote (1) above.
(5) Represents tax reimbursement payments we made to Mr. Librock in fiscal
2001 and fiscal 2000 to offset the income tax effects of the expiration of
the restrictions on 5,100 shares of restricted common stock granted to him
in fiscal 1995 and released in fiscal 2000. See footnote (1) above.
(6) Represents tax reimbursement payments we made to Ms. Howard in fiscal 2001
to offset the income tax effects of the expiration of the restrictions on
8,500 shares of restricted common stock granted to her in fiscal 1996 and
released in fiscal 2000. See footnote (1) above.
EMPLOYEE PLANS
EMPLOYEE STOCK OWNERSHIP PLAN. We maintain our ESOP for the benefit of
substantially all of our domestic non-union employees. The ESOP is intended to
be an employee stock ownership plan within the meaning of Section 4975(e)(7) of
the Internal Revenue Code of 1986, as amended and an eligible individual account
plan within the meaning of Section 407(d)(3) of the Internal Revenue Code. From
1988 through 1998, the ESOP has purchased from us 1,373,549 shares of common
stock for the aggregate sum of approximately $10.5 million. The proceeds of
certain institutional loans were used to fund such purchases. The ESOP's loans
are secured by our common stock which is held by the ESOP and such loans are
guaranteed by us. The ESOP acquired 479,900 shares of our common stock in
October 1998 for the aggregate sum of approximately $7.7 million. The proceeds
of a loan we made to the ESOP were used to fund the purchase.
On a quarterly basis, we make a contribution to the ESOP in an amount
determined by our Board of Directors. In fiscal 2002, our cash contribution was
approximately $1.1 million. The ESOP's trustees use the entire contribution to
make payments of principal and interest on the ESOP's loans.
Common stock not allocated to ESOP participants is recorded in an ESOP
suspense account and is held as collateral for repayment of the ESOP's loans. As
payments of principal and interest are received by the lenders, these shares are
released from the ESOP suspense account annually and are then allocated to the
ESOP participants in the same proportion as a participant's compensation for
such year bears to the total compensation of all participants.
- 8 -
An ESOP participant becomes fully vested in all amounts allocated to him
or her after five years of service. The shares of our common stock held by the
participants in the ESOP are voted by the participants in the same manner as any
other share of our common stock.
In general, common stock allocated to a participant's account is
distributed upon his or her termination of employment, normal retirement at age
65 or death. The distribution is made in whole shares of common stock with a
cash payment in lieu of any fractional shares.
Messrs. Montgomery, Myers, Harvey and Ms. Howard serve as trustees of the
ESOP. As of March 31, 2002, the ESOP owned 1,384,624 shares of our common stock.
Common stock allocated pursuant to the ESOP to Messrs. Tevens, Montgomery and
Librock, Ms. Howard and Mr. Owen as of March 31, 2002 is 4,422 shares, 14,661
shares, 4,505 shares, 1,452 shares and 800 shares, respectively.
PENSION PLAN. We have a non-contributory, defined benefit Pension Plan
which provides certain of our employees with retirement benefits. As defined in
the Pension Plan, a participant's annual pension benefit at age 65 is equal to
the product of (i) 1% of the participant's final average earnings, as calculated
by the terms of the Pension Plan, plus 0.5% of that part, if any, of final
average earnings in excess of such participant's "social security covered
compensation," as such term is defined in the Pension Plan, multiplied by (ii)
such participant's years of credited service, limited to 35 years. Plan benefits
are not subject to reduction for social security benefits.
The following table illustrates the estimated annual benefits upon
retirement under our Pension Plan if the plan remains in effect and assuming
that an eligible employee retires at age 65. However, because of changes in tax
laws or future adjustments to the provisions of our Pension Plan, actual pension
benefits could differ significantly from the amounts set forth in the table.
YEARS OF SERVICE
------------------------------------------------------------------------------------
FINAL
AVERAGE
EARNINGS 15 20 25 30 35
-------- -- -- -- -- --
125,000 22,380 29,840 37,301 44,761 52,221
150,000 28,005 37,340 46,676 56,011 65,346
175,000 33,630 44,840 56,051 67,261 78,471
200,000 39,255 52,340 65,426 78,511 91,596
250,000 39,257 52,343 65,429 78,515 91,601
300,000 39,257 52,343 65,429 78,515 91,601
350,000 39,257 52,343 65,429 78,515 91,601
400,000 39,257 52,343 65,429 78,515 91,601
450,000 39,257 52,343 65,429 78,515 91,601
500,000 39,257 52,343 65,429 78,515 91,601
A portion of the annual benefit for plan participants is determined by
their final average earnings in excess of "social security covered
compensation," as such term is defined in our Pension Plan. Since this amount
can vary depending on the eligible employee's year of birth, all pension amounts
shown above have been calculated using Mr. Tevens' year of birth and his social
security covered compensation of $76,596. Our Pension Plan excludes final
- 9 -
average earnings in excess of $200,000.
If Messrs. Tevens, Montgomery and Librock, Ms. Howard and Mr. Owen remain
our employees until they reach age 65, the years of credited service under the
Pension Plan for each of them would be 29, 16, 27, 31 and 28, respectively.
NON-QUALIFIED STOCK OPTION PLAN. In October 1995, we adopted our
Non-Qualified Stock Option Plan and reserved, subject to certain adjustments, an
aggregate of 250,000 shares of our common stock for issuance thereunder. Under
the terms of our Non-Qualified Plan, options may be granted by our Compensation
and Nomination/Succession Committee to our officers and other key employees as
well as to non-employee directors and advisors. In fiscal 2002, we granted
options to purchase 119,380 shares of common stock under our Non-Qualified Plan.
INCENTIVE STOCK OPTION PLAN. Our Incentive Stock Option Plan which was
adopted in October 1995, authorizes our Compensation and Nomination/Succession
Committee to grant to our officers and other key employees of stock options that
are intended to qualify as "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code. Our Incentive Plan reserved, subject
to certain adjustments, an aggregate of 1,250,000 shares of common stock to be
issued thereunder. Options granted under the Incentive Plan become exercisable
over a four-year period at the rate of 25% per year commencing one year from the
date of grant at an exercise price of not less than 100% of the fair market
value of our common stock on the date of grant. Any option granted thereunder
may be exercised not earlier than one year and not later than ten years from the
date the option is granted. In the event of certain extraordinary transactions,
including a change in control, the vesting of such options would automatically
accelerate. In fiscal 2002, we granted options to purchase 642,620 shares of our
common stock under the Incentive Plan.
RESTRICTED STOCK PLAN. We adopted our Restricted Stock Plan in October
1995 and reserved, subject to certain adjustments, an aggregate of 100,000
shares of our common stock to be issued upon the grant of restricted stock
awards thereunder. Under the terms of the Restricted Stock Plan, our
Compensation Committee and Nomination/Succession Committee may grant to our
employees restricted stock awards to purchase shares of common stock at a
purchase price of not less than $.01 per share. Shares of common stock issued
under the Restricted Stock Plan are subject to certain transfer restrictions
and, subject to certain exceptions, must be forfeited if the grantee's
employment with us is terminated at any time prior to the date the transfer
restrictions have lapsed. Grantees who remain continuously employed with us
become vested in their shares five years after the date of the grant, or earlier
upon death, disability, retirement or other special circumstances. The
restrictions on any such stock awards automatically lapse in the event of
certain extraordinary transactions, including a change in our control. In fiscal
2002, we did not award any shares of common stock under the Restricted Stock
Plan.
CORPORATE INCENTIVE PLAN. In July 2001, we adopted our Incentive Plan and
our Incentive Plan Addendum to replace our previous plan. Most of our employees
are eligible to participate in the Incentive Plan. Under the Incentive Plan, for
each fiscal year, each participant is assigned a participation percentage by our
management. The actual bonus to be paid to a participant will be equal to his
participation percentage times his base compensation, multiplied by a factor,
which is annual budgeted target percentage determined by the Board of Directors
plus or minus two times the percentage difference between our actual pretax
income and budgeted pretax income for the applicable quarter or year. The bonus
is computed and paid quarterly at 75% of the calculated amount for each of the
first three quarters. No bonus was paid under the Corporate Incentive Plan
- 10 -
for fiscal 2002.
Under the terms of our Incentive Plan Addendum, certain of the our
executive officers and operating group leaders are eligible to receive an
additional bonus equal to one percent per $1 million of the excess of our actual
debt repayment compared to a targeted debt repayment set by our Board of
Directors.
In fiscal 2002, we did not pay any bonuses under our Incentive Plan
Addendum to the executives named in the table set forth above.
401(K) PLAN. We maintain a 401(k) retirement savings plan which covers all
of our non-union employees, including our executive officers, in the U.S. who
have completed at least 90 days of service. Eligible participants may contribute
up to 30% of their annual compensation (9% for highly compensated employees),
subject to an annual limitation as adjusted by the provisions of the Internal
Revenue Code. Employee contributions are matched by us in an amount equal to 50%
of the employee's salary reduction contributions, as such term is defined in the
401(k) Plan. Our matching contributions are limited to 3% of the employee's base
pay and vest at the rate of 20% per year.
CHANGE IN CONTROL AGREEMENTS
We have entered into change in control agreements with Messrs. Tevens,
Montgomery and Librock, Ms. Howard, Mr. Owen and certain other of our officers
and employees. The change in control agreements provide for an initial term of
one year, which, absent delivery of notice of termination, is automatically
renewed annually for an additional one year term. Generally, each of the named
officers is entitled to receive, upon termination of employment within 36 months
of a change in control of our Company (unless such termination is because of
death, disability, for cause or by an officer or employee other than for "good
reason," as defined in the change in control agreements), (i) a lump sum
severance payment equal to three times the sum of (A) his or her annual salary
and (B) the greater of (1) the annual target bonus under the Incentive Plan in
effect on the date of termination and (2) the annual target bonus under the
Incentive Plan in effect immediately prior to the change in control of our
Company, (ii) continued coverage for 36 months under our medical and life
insurance plans, (iii) at the option of the executive or employee, either three
additional years of deemed participation in our tax-qualified retirement plans
or a lump sum payment equal to the actuarial equivalent of the pension payment
which he or she would have accrued under our tax-qualified retirement plans had
he or she continued to be employed by us for three additional years and (iv)
certain other specified payments. Aggregate "payments in the nature of
compensation" (within the meaning of Section 280G of the Internal Revenue Code)
payable to any executive or employee under the change in control agreements is
limited to the amount that is fully deductible by us under Section 280G of the
Internal Revenue Code less one dollar. The events that trigger a change in
control under the change in control agreements include (i) the acquisition of
20% or more of our outstanding common stock by certain persons, (ii) certain
changes in the membership of the our Board of Directors, (iii) certain mergers
or consolidations, (iv) certain sales or transfers of substantially all of our
assets and (v) the approval by our shareholders of a plan of dissolution or
liquidation.
CONSULTING AGREEMENT
In October 2001, we entered into a consulting agreement with Herbert P.
- 11 -
Ladds, Jr., our Chairman of the Board. Under the terms of this consulting
agreement, Mr. Ladds will be available to us approximately 40 hours per month to
advise us on such matters as may be requested by our Board of Directors or Chief
Executive Officer. As compensation for his services, Mr. Ladds will be paid a
monthly fee of $23,750. In the event Mr. Ladds provides more than 40 hours of
services in any month, he will receive an additional payment for such month in
an amount of $200 per hour for each such hour in excess of 40. We will also
reimburse Mr. Ladds for all reasonable out-of-pocket expenses incurred by him in
rendering services pursuant to the consulting agreement. The consulting
agreement terminates on December 31, 2003, and thereafter may be extended for
additional one year terms by mutual agreement of the parties. Either party may
terminate the consulting agreement, for any reason or for no reason, upon
delivery of 60 days prior written notice. The consulting agreement also
terminates automatically upon Mr. Ladds' inability to perform his obligations
arising under the agreement due to his death or disability.
OPTIONS GRANTED IN LAST FISCAL YEAR
The following table contains information concerning the grant of stock
options to our executives named below in fiscal 2002. The exercise price of all
such options is equal to the market value of our common stock on the date of the
grant.
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
PERCENTAGE OF RATES OF STOCK PRICE
TOTAL OPTIONS APPRECIATION
GRANTED TO EXERCISE FOR OPTION TERM
NAME AND OPTION EMPLOYEES IN PRICE PER EXPIRATION --------------------
PRINCIPAL POSITION GRANTS(1) FISCAL YEAR SHARE DATE 5%(2) 10%(3)
------------------ --------- ----------- ----- ---- ----- ------
Timothy T. Tevens, 60,000 7.87% $ 10.00 8/20/11 $ 377,400 $ 956,400
President and Chief
Executive Officer
Robert L. Montgomery, Jr., - - - - - -
Executive Vice President
and Chief Financial Officer
Ned T. Librock, 45,000 5.91% 10.00 8/20/11 283,050 717,300
Vice President - Sales
Karen L. Howard, 45,000 5.91% 10.00 8/20/11 283,050 717,300
Vice President -
Controller
Joseph J. Owen 45,000 5.91% 10.00 8/20/11 283,050 717,300
Vice President -
Strategic Integration
------------------------------
(1) Options granted pursuant to the Incentive Plan and the Non-Qualified Plan
become exercisable in cumulative annual increments of 25% beginning one
year from the date of grant; however, in the event of certain
extraordinary transactions, including a change of control of our Company,
the vesting of such options would automatically accelerate.
(2) Represents the potential appreciation of the options, determined by
assuming an annual compounded rate of appreciation of 5% per year over the
ten-year term of the grants, as prescribed by the rules. The amounts set
forth above are not intended to forecast future appreciation, if any, of
the stock price. There can be no assurance that the appreciation reflected
in this table will be achieved.
- 12 -
(3) Represents the potential appreciation of the options, determined by
assuming an annual compounded rate of appreciation of 10% per year over
the ten-year term of the grants, as prescribed by the rules. The amounts
set forth above are not intended to forecast future appreciation, if any,
of the stock price. There can be no assurance that the appreciation
reflected in this table will be achieved.
- 13 -
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information with respect to our executives
named above concerning the exercise of options during fiscal 2002 and
unexercised options held at the end of fiscal 2002.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END (1)
NAME AND ACQUIRED ON VALUE -------------------------- -------------------------
PRINCIPAL POSITION EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------------------- ----------- -------- ----------- ------------- ----------- -------------
Timothy T. Tevens,
President and Chief
Executive Officer - $ - 77,000 87,000 $ - $168,000
Robert L. Montgomery, Jr.,
Executive Vice President
and Chief Financial - - - - - -
Officer
Ned T. Librock, - - 68,001 62,999 - 126,000
Vice President - Sales
Karen L. Howard,
Vice President - - - 68,001 62,999 - 126,000
Controller
Joseph J. Owen,
Vice President -
Strategic Integration - - 9,750 54,250 - 126,000
-----------------------
(1) Represents the difference between $12.80, the closing market value of our
common stock as of March 31, 2002 and the exercise prices of such options
which are exercisable at an exercise price less than $12.80.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information about our common stock that may
be issued upon the exercise of options, warrants and rights under all of our
existing equity compensation plans as of March 31, 2002, including the
Non-Qualified Plan and the Incentive Plan.
NUMBER OF SECURITIES
REMAINING FOR FUTURE
NUMBER OF SECURITIES TO BE WEIGHTED AVERAGE ISSUANCE UNDER EQUITY
ISSUED UPON EXERCISE OF EXERCISE PRICE OF COMPENSATION PLANS
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, (EXCLUDING SECURITIES
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS REFLECTED IN COLUMN (A))
------------- ------------------- ------------------- ------------------------
Equity compensation plans 1,406,160 $ 14.34 76,340
approved by security holders
Equity compensation plans not - - -
approved by security holders
Total...................... 1,406,160 $ 14.34 76,340
- 14 -
COMPENSATION AND NOMINATION/SUCCESSION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation for our executive officers is administered by our
Compensation and Nomination/Succession Committee which currently consists of
three independent (non-employee) Directors. Our Board of Directors has delegated
to the Compensation and Nomination/Succession Committee responsibility for
establishing, administrating and approving the compensation arrangements of our
Chief Executive Officer and other executive officers.
The following objectives, established by our Compensation and
Nomination/Succession Committee, are the basis for our executive compensation
program:
o providing a comprehensive program with components including base
salary, performance incentives, and benefits that support and align
with our goal of providing superior value to customers and
shareholders; and
o ensuring that we are competitive and can attract and retain
qualified and experienced executive officers and other key
personnel; and
o appropriately motivating our executive officers and other key
personnel to seek to attain short, intermediate and long term
corporate and divisional performance goals and to manage our Company
to achieve sustained long term growth.
The Compensation and Nomination/Succession Committee reviews compensation
policy and specific levels of compensation paid to our Chief Executive Officer
and other executive officers and makes recommendations to our Board of Directors
regarding executive compensation, policies and programs.
The Compensation and Nomination/Succession Committee is assisted in these
efforts, when required by an independent outside consultant, and by our internal
staff, who provide the Compensation and Nomination/Succession Committee with
relevant information and recommendations regarding compensation policies and
specific compensation matters.
ANNUAL COMPENSATION PROGRAMS
Our executives' base salaries are compared to manufacturing companies
included in a periodic management survey completed by outside compensation
consultants and all data has been regressed to revenues equivalent to our
revenues. This survey is used because it reflects companies in the same revenue
size and industry sectors as us. The Compensation and Nomination/Succession
Committee believes salaries should be targeted toward the median of the surveyed
salaries reported, depending upon the relative experience and individual
performance of the executive.
Salary adjustments are determined by three factors: (i) an assessment of
the individual executive officer's performance and merit, (ii) our goal of
achieving market parity with salaries of comparable executives in the
competitive market and (iii) the occurrence of any promotion or other increases
in responsibility of the executive. In assessing market parity, we target groups
of companies surveyed and referred to above.
Each executive officer's corporate position is assigned a title
- 15 -
classification reflecting evaluation of the position's overall contribution to
our corporate goals and the value the labor market places on the associated job
skills. A range of appropriate salaries is then assigned to that title
classification. Each April, the salary ranges may be adjusted to reflect market
conditions, including changes in comparison companies, inflation and supply and
demand in the market. The midpoint of the salary range corresponds to a "market
rate" salary which the Compensation and Nomination/Succession Committee believes
is appropriate for an experienced executive who is performing satisfactorily,
with salaries in excess of the salary range midpoint appropriate for executives
whose performance is superior or outstanding.
The Compensation and Nomination/Succession Committee has recommended that
any progression or regression within the salary range for an executive officer
will depend upon a formal annual review of job performance, accomplishments and
progress toward individual and/or overall goals and objectives for each of our
segments that such executive officer oversees as well as his contributions to
our overall direction. The long-term growth in shareholder value is an important
factor. The results of executive officers' performance evaluations will form a
part of the basis of the Compensation and Nomination/Succession Committee's
decision to approve, at its discretion, future adjustments in base salaries of
our executive officers.
CHIEF EXECUTIVE OFFICER COMPENSATION
Compensation decisions affecting our Chief Executive Officer were based on
quantitative and qualitative factors. These factors were accumulated by an
external compensation consulting firm and included comparisons of our fiscal
2002 financial statistics to peer companies, strategic achievements such as
acquisitions and their integration, comparisons of the base salary level to the
median for comparable companies in published compensation surveys and
assessments prepared internally by other members of our executive management. In
fiscal 2002, Mr. Tevens did not receive a bonus. Based upon the performance of
Mr. Tevens and our results for fiscal 2002, Mr. Tevens will receive a base
salary of $496,250 for fiscal 2003, which represents an increase of 5%.
SECTION 162(M) OF INTERNAL REVENUE CODE
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for compensation in excess of $1.0 million paid to
a company's chief executive officer and any one of the four other most highly
paid executive officers during its taxable year. Qualifying performance-based
compensation is not subject to the deduction limit if certain requirements are
met. Based upon the compensation paid to our executive officers in fiscal 2002,
it does not appear that the Section 162(m) limitation will have a significant
impact on us in the near term. However, the Compensation and
Nomination/Succession Committee plans to review this matter periodically and to
take such actions as are necessary to comply with the statute in order to avoid
non-deductible compensation payments.
Carlos Pascual, Chairman
L. David Black
Richard H. Fleming
- 16 -
REPORT OF THE AUDIT COMMITTEE
REVIEW OF OUR AUDITED FINANCIAL STATEMENTS
The Audit Committee has reviewed and discussed our audited financial
statements for the year ended March 31, 2002 with our management. The Audit
Committee has also discussed with Ernst & Young LLP, our independent auditors,
the matters required to be discussed by Statement on Auditing Standards No. 61,
"Communication with Audit Committees."
The Audit Committee has also received and reviewed the written disclosures
and the letter from Ernst & Young LLP required by Independence Standards Board
Standard No. 1, "Independence Discussion with Audit Committees," and has
discussed the independence of Ernst & Young LLP with that firm.
Based on the review and the discussions noted above, the Audit Committee
recommended to our Board of Directors that our audited financial statements be
included in our Annual Report on Form 10-K for the year ended March 31, 2002 for
filing with the Securities and Exchange Commission.
ERNST & YOUNG LLP INFORMATION
Fees related to services performed on our behalf by Ernst & Young LLP for
the year ended March 31, 2002 are as follows:
($ IN THOUSANDS)
Audit Fees... $408
Financial Information Systems Implementation and Design..... -
All Other Fees
a. Audit related fees, including benefit plan audits... 107
b. Tax services and other matters...................... 194
---
Total....................................................... $709
===
The Audit Committee has considered whether the provision of the above
services other than audit services is compatible with maintaining Ernst & Young
LLP's independence and has concluded that it is.
Richard H. Fleming, Chairman
L. David Black
Carlos Pascual
- 17 -
PERFORMANCE GRAPH
The Performance Graph shown below compares the cumulative total
shareholder return on our common stock based on its market price, with the total
return of the S&P MidCap 400 Index and the Dow Jones Industrial - Diversified
Index. The comparison of total return assumes that a fixed investment of $100
was invested on April 1, 1997 in our common stock and in each of the foregoing
indices and further assumes the reinvestment of dividends. The stock price
performance shown on the graph is not necessarily indicative of future price
performance.
[ILLUSTRATION OF PERFORMANCE GRAPH]
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
Columbus McKinnon Corporation.............. 100 157 116 77 47 79
S&P Midcap 400 Index....................... 100 149 150 207 192 213
Dow Jones Industrial - Diversified Index... 100 162 187 245 213 200
- 18 -
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Nomination/Succession Committee is composed of
Richard Fleming, L. David Black and Richard H. Fleming, each an outside
Director. None of the members of the Compensation and Nomination/Succession
Committee was, during fiscal 2002 or prior thereto, an officer or employee of
our Company or any of our subsidiaries.
COMPENSATION OF DIRECTORS
We pay an annual retainer of $25,000 to our Chairman of the Board and an
annual retainer of $18,000 to each of our other outside directors. Directors who
are also our employees do not receive an annual retainer. The Chairman of our
Audit Committee and Compensation and Nomination/Succession Committee each
receive an additional annual retainer of $3,000. In addition, each of our
non-employee directors also receives a fee of $1,500 for each Board of Directors
and committee meeting attended and is reimbursed for any reasonable expenses
incurred in attending such meetings.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our Directors and executive officers, and persons who own more than 10% of a
registered class of our equity securities, to file with the Securities and
Exchange Commission and NASDAQ initial reports of ownership and reports of
changes in ownership of our common stock and other equity securities. Our
officers, Directors and greater than 10% shareholders are required to furnish us
with copies of all Section 16(a) forms they file.
To our knowledge, based solely on our review of the copies of such reports
furnished to us and written representations that no other reports were required,
during the fiscal year ended March 31, 2002 all Section 16(a) filing
requirements applicable to our officers, Directors and greater than 10%
beneficial owners were complied with.
- 19 -
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of May 31, 2002
regarding the beneficial ownership of our Common Stock by (a) each person who is
known by us to own beneficially more than 5% of our common stock; (b) by each
Director; (c) by each of our five most highly compensated executive officers and
(d) by all of our executive officers and Directors as a group.
NUMBER OF PERCENTAGE
DIRECTORS, OFFICERS AND 5% SHAREHOLDERS SHARES (1) OF CLASS
--------------------------------------- ---------- --------
Herbert P. Ladds, Jr. (2)(3) 914,610 6.03
Timothy T. Tevens (2)(4) 123,867 *
Robert L. Montgomery, Jr. (2)(5) 1,152,406 7.59
L. David Black (2) 1,700 *
Carlos Pascual (2) 1,500 *
Richard H. Fleming (2) 1,504 *
Ned T. Librock (2)(6) 101,047 *
Karen L. Howard (2)(7) 97,748 *
Joseph J. Owen (2)(8) 25,107 *
All Directors and Executive Officers as a
Group (13 persons) (9) 2,484,235 16.37
Columbus McKinnon Corporation Employee Stock
Ownership Plan (2) 1,352,658 8.91
Capital Group International, Inc. (10) 2,168,600 14.29
Dimensional Fund Advisors Inc. (11) 939,200 6.19
Gilchrist B. Berg (12) 810,458 5.34
Cannell Capital, LLC (13) 780,600 5.14
-------
* Less than 1%.
(1) Rounded to the nearest whole share. Unless otherwise indicated in the
footnotes, each of the shareholders named in this table has sole voting
and investment power with respect to the shares shown as beneficially
owned by such stockholder, except to the extent that authority is shared
by spouses under applicable law.
(2) The business address of each of the executive officers and directors is
140 John James Audubon Parkway, Amherst, New York 14228-1197.
(3) Includes (i) 731,355 shares of common stock owned directly, (ii) 163,705
shares of common stock owned directly by Mr. Ladds' spouse, and (iii)
19,550 shares of common stock held by Mr. Ladds' spouse as trustee for the
grandchildren of Mr. Ladds.
(4) Includes (i) 21,896 shares of common stock owned directly, (ii) 7,000
shares of common stock owned directly by Mr. Tevens' spouse, (iii) 50
shares of common stock owned by Mr. Tevens' son, (iv) 4,422 shares of
common stock allocated to Mr. Tevens' ESOP account, (v) 67,857 shares of
common stock issuable under options granted to Mr. Tevens under the
Incentive Plan which are exercisable within 60 days and (vi) 22,642 shares
of common stock issuable under options granted to Mr. Tevens under the
Non-Qualified Plan which are exercisable within 60 days. Excludes 44,573
shares of common stock issuable under options granted to Mr. Tevens under
the Incentive Plan and 28,928 shares of common stock issuable under
options granted to Mr. Tevens under the Non-Qualified Plan which are not
exercisable within 60 days.
- 20 -
(5) Includes (i) 1,052,745 shares of common stock owned directly, (ii) 85,000
shares of common stock owned directly by Mr. Montgomery's spouse and (iii)
14,661 shares of common stock allocated to Mr. Montgomery's ESOP account.
Excludes 1,337,997 additional shares of common stock owned by the ESOP for
which Mr. Montgomery serves as one of four trustees and for which he
disclaims any beneficial ownership.
(6) Includes (i) 19,390 shares of common stock owned directly, (ii) 152 shares
of common stock owned by Mr. Librock's son, (iii) 4,505 shares of common
stock allocated to Mr. Librock's ESOP account, (iv) 66,759 shares of
common stock issuable under options granted to Mr. Librock under the
Incentive Plan which are exercisable within 60 days and (v) 10,241 shares
of common stock issuable under options granted to Mr. Librock under the
Non-Qualified Plan which are exercisable within 60 days. Excludes 46,086
shares of common stock issuable under options granted to Mr. Librock under
the Incentive Plan and 7,914 shares of common stock issuable under options
granted to Mr. Librock under the Non-Qualified Plan which are not
exercisable within 60 days.
(7) Includes (i) 19,296 shares of common stock owned directly, (ii) 1,452
shares allocated to Ms. Howard's ESOP account, (iii) 66,759 shares of
common stock issuable under options granted to Ms. Howard under the
Incentive Plan which are exercisable within 60 days and (iv) 10,241 shares
of common stock issuable under options granted to Ms. Howard under the
Non-Qualified Plan which are exercisable within 60 days. Excludes (i)
1,351,206 additional shares of common stock owned by the ESOP for which
Ms. Howard serves as one of four trustees and for which she disclaims any
beneficial ownership and (ii) 46,086 shares of common stock issuable under
options granted to Ms. Howard under the Incentive Plan and 7,914 shares of
common stock issuable under options granted to Ms. Howard under the
Non-Qualified Plan which are not exercisable within 60 days.
(8) Includes (i) 8,480 shares of common stock owned directly, (ii) 1,327
shares of common stock owned by Mr. Owen's spouse, (iii) 800 shares of
common stock allocated to Mr. Owen's ESOP account and (iv) 14,500 shares
of common stock issuable under options granted to Mr. Owen under the
Incentive Plan which are exercisable within 60 days. Excludes 45,000
shares of common stock issuable under options granted to Mr. Owen under
the Incentive Plan and 4,500 shares under the Non-Qualified Plan which are
not exercisable within 60 days.
(9) Includes (i) options to purchase an aggregate of 282,610 shares of common
stock issuable to certain executive officers under the Incentive Plan and
Non-Qualified Plan which are exercisable within 60 days. Excludes the
shares of common stock owned by the ESOP as to which Mr. Montgomery, Ms.
Howard and Mr. Myers serve as trustees, except for an aggregate of 45,909
shares allocated to the respective ESOP accounts of our executive officers
and (ii) options to purchase an aggregate of 320,440 shares of common
stock issued to certain executive officers under the Incentive Plan and
Non-Qualified Plan which are not exercisable within 60 days.
(10) Information with respect to Capital Group International, Inc. and its
holdings of common stock is based on a Schedule 13G jointly filed by
Capital Group International, Inc. and Capital Guardian Trust Company with
the Securities and Exchange Commission on February 11, 2002. Based solely
upon information in this Schedule 13G, Capital Group International, Inc.
has sole voting power of 1,685,200 shares of such common stock and sole
dispositive power of 2,168,600 shares of such common stock. Capital
Guardian Trust Company is a wholly owned subsidiary of Capital Group
International, Inc. The stated business address for both Capital Group
International, Inc. and Capital Guardian Trust Company is 11100 Santa
Monica Blvd, 15th Floor, Los Angeles, California 90025-3384.
(11) Information with respect to Dimensional Fund Advisors Inc. and its
holdings of common stock is based on a Schedule 13G of Dimensional Fund
Advisors Inc. filed with the Securities and Exchange Commission on
February 12, 2002. The stated business address for Dimensional Fund
Advisors Inc. is 1299 Ocean Avenue, 11th Floor, Santa Monica, California
90401.
(12) Information with respect to Mr. Gilchrist B. Berg and his holdings of
common stock is based on a Schedule 13G filed by Mr. Berg with the
Securities and Exchange Commission on February 5, 2002. The stated
business address for Mr. Berg is 225 Water Street, Suite 1987,
Jacksonville, Florida 32202.
- 21 -
(13) Information with respect to Cannell Capital LLC and its holdings of common
stock is based on a Schedule 13G jointly filed with the Securities and
Exchange Commission on February 14, 2002 by Cannell Capital LLC, J. Carlo
Cannell, The Anegada Fund Limited, The Cuttyhunk Fund Limited, Tonga
Partners, L.P., GS Cannell, LLC, Pleiades Investment Partners, LP and
George S. Sarlo 1995 Charitable Remainder Trust. J. Carlo Cannell is the
managing member and majority owner of Cannell Capital LLC, which is a
registered investment advisor and serves in such capacity for the other
entities listed. The stated business address for Cannell Capital LLC is
2500 18th Street, San Francisco, California 94110.
- 22 -
PROPOSAL 2
AMENDMENT TO AMENDED AND RESTATED
1995 COLUMBUS MCKINNON CORPORATION
INCENTIVE STOCK OPTION PLAN
Our Board of Directors believes it is in the best interest of our Company
to encourage stock ownership by our employees. Accordingly, in October 1995 our
Incentive Stock Option Plan was adopted and authorized the issuance of up to
1,250,000 shares of our common stock for issuance upon exercise of options
granted thereunder. In 1999, the Incentive Stock Option Plan was amended and
restated, but such amendment and restatement did not increase the number of
shares reserved for issuance thereunder. As of March 31, 2002, options covering
1,172,160 shares of our common stock were outstanding under the Incentive Stock
Option Plan and 60,340 shares remained available for future grants. Our Board of
Directors has approved, subject to shareholder approval, an amendment to the
Incentive Stock Option Plan that increases the number of shares of our common
stock authorized for issuance thereunder by 500,000 shares.
If our shareholders approve this amendment, an additional 500,000 shares
of our common stock will be available for options granted under the Incentive
Stock Option Plan. We believe that the additional authorized shares, together
with the remaining available shares, will be sufficient for option grants under
the Incentive Stock Option Plan for approximately three more years.
Information concerning the number of options granted to certain of our
executive officers under the Incentive Stock Option Plan during the last year is
set forth above under the heading "Executive Compensation."
A SUMMARY OF THE PRINCIPAL FEATURES OF THE INCENTIVE STOCK OPTION PLAN IS
PROVIDED BELOW, BUT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT
OF THE INCENTIVE STOCK OPTION PLAN, AS AMENDED AND RESTATED, WHICH IS SET FORTH
AS APPENDIX A TO THIS PROXY STATEMENT. THE PROPOSED AMENDMENT IS SHOWN IN
ITALICS IN APPENDIX A.
PURPOSE. The Incentive Stock Option Plan is intended to provide our
officers and other key employees with an additional incentive for them to
promote our business, to increase their proprietary interest in our success and
to encourage them to remain as our employees.
ADMINISTRATION. The Incentive Stock Option Plan is administered by our
Compensation and Nomination/Succession Committee, which has the sole authority
to grant options under the Incentive Plan. All actions taken by our Compensation
and Nomination/Succession Committee in administering the Incentive Plan are
final.
RESERVATION OF COMMON STOCK. As amended by the proposed amendment,
1,750,000 shares of our common stock will be authorized for issuance under the
Incentive Stock Option Plan. Any options issued under the Incentive Stock Option
Plan which are forfeited or terminated, are available for reissuance. If our
outstanding shares of common stock are increased or decreased as a result of
stock dividends, stock splits, recapitalizations or other means having the same
effect, or if our common stock is converted into other shares or securities as a
result of a reorganization, the number of shares of our common stock available
for issuance under the Incentive Stock Option Plan and the number of shares of
our common stock issuable under outstanding options under the Incentive Stock
Option Plan shall be proportionately adjusted.
PARTICIPANTS. Our Compensation and Nomination/Succession Committee
determines from among the officers and key employees of our Company and its
subsidiaries those individuals to whom options under the Incentive Stock Option
Plan shall be granted, the terms and provisions of the options granted (which
- 23 -
terms need not be identical), the time or times at which options shall be
granted and the number of shares of our common stock for which option are
granted. As of March 31, 2002, 87 employees held options to purchase an
aggregate of 1,172,160 shares of our common stock under the Incentive Stock
Option Plan.
OPTION PRICE. The exercise price of each option granted under the
Incentive Stock Option Plan is determined by our Compensation and
Nomination/Succession Committee at the time the option is granted, but in no
event shall such exercise price be less than 100% of the fair market value of
our common stock on the date of the grant. Notwithstanding the foregoing, if any
options are granted to individuals holding 10% or more of the combined voting
power of all classes of our outstanding capital stock, in no event shall the
exercise price of the options granted to any such individuals be less than 110%
of the fair market value of our common stock on the date of the grant. For
purposes of the Incentive Stock Option Plan, "fair market value" means the
average of the high and low closing sale prices of our common stock in the
NASDAQ National Market System on the day the option is granted, or if no sale of
our common stock shall have been made on the NASDAQ National Market System on
that day, on the next preceding day on which there was a sale of such stock.
OPTION EXERCISE PERIODS; VESTING. Any option granted under the Incentive
Stock Option Plan may be exercised not earlier than one year nor later than ten
years from the date such option is granted, provided that, options granted to
individuals holding 10% or more of the combined voting power of all classes of
our outstanding capital stock may not be exercised later than five years from
the date any such options are granted. The recipient of an option must generally
remain in the continuous employment of our Company or its subsidiaries from the
date of grant of the option to and including the date of exercise of the option.
In addition, with respect to all options granted under the Incentive Stock
Option Plan, unless our Compensation and Nomination/Succession Committee shall
specify otherwise, the right of a recipient to exercise his option shall accrue,
on a cumulative basis, at the rate of 25% per year. Upon a "change in control"
(as defined in the Incentive Stock Option Plan) or upon the retirement, death or
disability of a recipient, all outstanding unexercised options granted to such
recipient under the Incentive Stock Option Plan become immediately exercisable
and shall remain exercisable for the balance of their original term.
FEDERAL TAX CONSEQUENCES. The Internal Revenue Code limits to $100,000 the
value of employer stock subject to incentive stock options that first become
exercisable by any individual optionee in any one year, based on the fair market
value of the stock at the date of grant. Upon exercise, an optionee will not
realize federally taxable income (except that the alternative minimum tax may
apply) and we will not be entitled to any deduction. If the optionee sells the
shares more than two years after the grant date and more than one year after
exercise, the entire gain, if any, realized upon the sale will be federally
taxable to the optionee as long-term capital gain and we will not be entitled to
a corresponding deduction. If the optionee does not satisfy the holding-period
requirements, the optionee will realize ordinary income, in most cases equal to
the difference between the option price of the shares and the lesser of the fair
market value of the shares on the exercise date or the amount realized on a sale
or exchange of the shares, and we will be entitled to a corresponding deduction
unless such deduction is disallowed by Section 162(m) of the Internal Revenue
Code.
TRANSFERABILITY. Generally, options granted under the Incentive Stock
Option Plan are not transferable by a recipient during his lifetime. However, to
the extent that an executive officer of the Company has received options that
first become exercisable in any one year, which options have fair market value
(based on the fair market value of the Common Stock at the date of the option
grant) which exceeds $100,000, such executive officers may transfer to their
immediate family members, options to purchase common stock of the Company having
an aggregate value equal to the amount by which the aggregate value of all
options which first become exercisable in such year exceeds $100,000.
EFFECTIVE DATE. The Incentive Stock Option Plan was approved initially by
- 24 -
our shareholders January 8, 1996. The amendment and restatement of the Incentive
Stock Option Plan was approved by our shareholders on August 16, 1999. The
effective date of the proposed amendment will be the date of its approval by our
shareholders.
VOTE REQUIRED. The Affirmative vote of the holders of a majority of the
shares of our common stock present, in person or by proxy, and entitled to vote
at the Annual Meeting is required to approve the amendment to the Incentive
Stock Option Plant. If the shareholders do not approve the amendment, the
Incentive Stock Option Plan, as previously amended and restated, will remain in
effect, and, as of March 31, 2002, 60,340 shares of our common stock will be
available for future grants thereunder.
THE BOARD OF DIRECTORS RECOMMENDS UNANIMOUSLY A VOTE "FOR" PROPOSAL 2.
- 25 -
PROPOSAL 3
AMENDMENT TO COLUMBUS MCKINNON CORPORATION
RESTRICTED STOCK PLAN
Our Restricted Stock Plan was adopted in October 1995 and authorized the
sale of up to 100,000 shares of our common stock. As of March 31, 2002, 100,000
shares of our common stock authorized for sale under the Restricted Stock Plan
were issued, 61,525 of such shares remained subject to restrictions and no
shares remained available for future issuance. Our Board of Directors has
approved, subject to shareholder approval, an amendment to the Restricted Stock
Plan that increases the number of shares of our common stock authorized for
issuance thereunder by 50,000 shares.
If our shareholders approve this amendment, an additional 50,000 shares of
our common stock will be available for future grants under the Restricted Stock
Plan. We believe that the additional authorized shares will be sufficient for
future sales of our common stock under the Restricted Stock Plan for
approximately three more years.
No shares of common stock were sold to our executive officers under the
Restricted Stock Plan during the last year.
A SUMMARY OF THE PRINCIPAL FEATURES OF THE RESTRICTED STOCK PLAN IS
PROVIDED BELOW, BUT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT
OF THE RESTRICTED STOCK PLAN WHICH IS SET FORTH AS APPENDIX B TO THIS PROXY
STATEMENT. THE PROPOSED AMENDMENT IS SHOWN IN ITALICS IN APPENDIX B.
PURPOSE. The Restricted Stock Plan is intended to provide our officers and
other key employees with an additional incentive for them to promote our
business, to increase their proprietary interest in our success and to encourage
them to remain as our employees.
ADMINISTRATION. The Restricted Stock Plan is administered by our
Compensation and Nomination/Succession Committee. Our Compensation and
Nomination/Succession Committee has the sole authority to issue awards under the
Restricted Stock Plan, and all actions taken by our Compensation and
Nomination/Succession Committee in administering the Restricted Stock Plan are
final.
RESERVATION OF COMMON STOCK. As amended by the proposed amendment, 50,000
shares of our common stock will be authorized for issuance under the Restricted
Stock Plan. Any shares of our common stock sold under the Restricted Stock Plan
which are forfeited or terminated, will be cancelled and will not be available
for reissuance. If our outstanding shares of common stock are increased or
decreased as a result of stock dividends, stock splits, recapitalizations or
other means having the same effect, or if our common stock is converted into
other shares or securities as a result of a reorganization, the number of shares
of our common stock available for issuance under the Restricted Stock Plan and
the number of shares of our common stock previously issued under the Restricted
Stock Plan shall be proportionately adjusted.
PARTICIPANTS. Our Compensation and Nomination/Succession Committee shall
determine from among the officers and key employees of our Company and its
subsidiaries those individuals to whom awards under the Restricted Stock Plan
shall be granted, the purchase price and other terms and provisions of the
awards (which terms need not be identical), the time or times at which awards
shall be granted and the number of shares of our common stock for which awards
are granted. As of March 31, 2002, 90 participants had received awards to
- 26 -
purchase an aggregate of 61,525 shares of our common stock under the Restricted
Stock Plan.
PURCHASE PRICE. The purchase price of each award under the Restricted
Stock Plan is determined by the our Compensation and Nomination/Succession
Committee at the time of the award, but in no event shall such purchase price be
less than $.01 per share.
RESTRICTIONS; VESTING. Shares of our common stock issued under our
Restricted Stock Plan are subject to restrictions on transfer and, subject to
certain exceptions, are forfeited if the purchaser's employment with us is
terminated at any time prior to the date the transfer restrictions lapse, which
is generally five years from the date of purchase. Purchasers of our common
stock under the Restricted Stock Plan who remain continuously employed by us
become vested in their shares five years after the date of purchase, or earlier
upon death, disability, retirement or other special circumstances. The
restrictions on shares purchased under the Restricted Stock Plan automatically
lapse, and such shares become fully vested, upon a change in control (as defined
in the Restricted Stock Plan).
FEDERAL TAX CONSEQUENCES. A participant who receives an award of, and
purchases, shares of our common stock under the Restricted Stock Plan does not
generally recognize taxable income at the time of such award and purchase.
Rather, the participant recognizes ordinary income in the first taxable year in
which his or her interest in the shares becomes either (i) freely transferable
or (ii) no longer subject to substantial risk of forfeiture. The amount of
taxable income is equal to the fair market value of the shares less the
consideration paid for the shares. A participant may elect to recognize income
at the time he or she purchases shares under the Restricted Stock Plan in an
amount equal to the fair market value of the shares (less the consideration paid
for the shares) determined on the date of purchase.
We receive a compensation expense deduction in an amount equal to the
ordinary income recognized by the participant in the taxable year in which
restrictions lapse, or in the taxable year of the participant's purchase if, at
that time, the participant had filed a timely election to accelerate recognition
of income.
TRANSFERABILITY. Generally, shares of our common stock purchased under the
Restricted Stock Plan are not transferable for a period of five years from the
date of purchase, and are not assignable. Upon a change in control (as defined
in the Restricted Stock Plan), all restrictions lapse.
EFFECTIVE DATE. The Restricted Stock Plan was approved initially by our
shareholders October 27, 1995. The effective date of the proposed amendment will
be the date of its approval by our shareholders.
VOTE REQUIRED. The Affirmative vote of the holders of a majority of the
shares of our common stock present, in person or by proxy, and entitled to vote
at the Annual Meeting is required to approve the amendment to the Restricted
Stock Plan. If the shareholders do not approve the amendment, the Restricted
Stock Plan in its current form will remain in effect and no shares of our common
stock will be available for future sales thereunder.
THE BOARD OF DIRECTORS RECOMMENDS UNANIMOUSLY A VOTE "FOR" PROPOSAL 3.
- 27 -
SOLICITATION OF PROXIES
The cost of solicitation of proxies will be borne by us, including
expenses in connection with preparing and mailing this Proxy Statement. In
addition to the use of the mails, proxies may be solicited by personal
interviews or by telephone, telecommunications or other electronic means by our
Directors, officers and employees at no additional compensation. Arrangements
will be made with brokerage houses, banks and other custodians, nominees and
fiduciaries for the forwarding of solicitation material to the beneficial owners
of our common stock, and we will reimburse them for reasonable out-of-pocket
expenses incurred by them in connection therewith.
OTHER MATTERS
Our management does not presently know of any matters to be presented for
consideration at the Annual Meeting other than the matters described in the
Notice of Annual Meeting. However, if other matters are presented, the
accompanying proxy confers upon the person or persons entitled to vote the
shares represented by the proxy, discretionary authority to vote such shares in
respect of any such other matter in accordance with their best judgment.
OTHER INFORMATION
Ernst & Young LLP has been selected as our independent audit firm for the
current fiscal year and has been the Company's independent audit firm for its
most recent fiscal year ended March 31, 2002.
Representatives of Ernst & Young LLP are expected to be present at the
2002 Annual Meeting of Shareholders and will have the opportunity to make a
statement, if they so desire, and will be available to respond to appropriate
questions.
Effective April 1, 2002, we placed our directors and officers
indemnification insurance coverage with Continental Casualty Company for a term
of one year at a cost of $173,500. This insurance provides coverage to our
executive officers and directors individually where exposures exist for which we
are unable to provide direct indemnification.
WE WILL PROVIDE WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS SOLICITED, ON
THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF OUR ANNUAL REPORT ON FORM 10-K,
FOR THE FISCAL YEAR ENDED MARCH 31, 2002, FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO. Such
written request should be directed to Columbus McKinnon Corporation, 140 John
James Audubon Parkway, Amherst, New York 14228-1197, Attention: Robert L.
Montgomery, Jr. Each such request must set forth a good faith representation
that, as of June 28, 2002, the person making the request was a beneficial owner
of securities entitled to vote at the Annual Meeting of Shareholders.
- 28 -
SHAREHOLDERS' PROPOSALS
Proposals of shareholders intended to be presented at the 2003 Annual
Meeting must be received by us by March 19, 2003 to be considered for inclusion
in our Proxy Statement and form of proxy relating to that meeting. In addition,
our by-laws require that notice of shareholder proposals and nominations for
director be delivered to our principal executive offices not less than 60 days
nor more than 90 days prior to the first anniversary of the Annual Meeting for
the preceding year; provided, however, if the Annual Meeting is not scheduled to
be held within a period commencing 30 days before such anniversary date and
ending 30 days after such anniversary date, such shareholder notice shall be
delivered by the later of (i) 60 days prior to the date of the Annual Meeting or
(ii) the tenth day following the date such Annual Meeting date is first publicly
announced or disclosed. The date of the 2003 Annual Meeting has not yet been
established. Nothing in this paragraph shall be deemed to require us to include
in our Proxy Statement and proxy relating to the 2003 Annual Meeting any
shareholder proposal that does not meet all of the requirements for inclusion
established by the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
The accompanying Notice and this Proxy Statement are sent by order of our
Board of Directors.
LOIS H. DEMLER
Corporate Secretary
Dated: July 19, 2002
- 29 -
APPENDIX A
COLUMBUS MCKINNON CORPORATION
1995 INCENTIVE STOCK OPTION PLAN
---------------------------
AMENDMENT AND RESTATEMENT, AS AMENDED
--------------------------
1. PURPOSE OF PLAN. The Columbus McKinnon Corporation Amended and
Restated 1995 Incentive Stock Option Plan (the "Plan") is intended to provide
officers and other key employees of the Company and officers and other key
employees of any subsidiaries of the Company as that term is defined in Section
3 below (hereinafter individually referred to as a "Subsidiary" and collectively
as "Subsidiaries") with an additional incentive for them to promote the success
of the business, to increase their proprietary interest in the success of the
Company and its Subsidiaries, and to encourage them to remain in the employ of
the Company or its Subsidiaries. The above aims will be effectuated through the
granting of certain stock options, as herein provided, which are intended to
qualify as Incentive Stock Options ("ISOs") under Section 422 of the Internal
Revenue Code of 1986, as the same has been and shall be amended ("Code").
2. ADMINISTRATION. The Plan shall be administered by a Committee (the
"Committee") composed of not less than two (2) Directors of the Company who
shall be appointed by and serve at the pleasure of the Board of Directors of the
Company. Any Director that serves as a member of the Committee shall not receive
or be eligible to receive a grant of an option or any other equity security of
the Company or any Subsidiary under this Plan during the period of his or her
service as a member of the Committee and during the one year period prior to his
or her service as a member of the Committee. If the Committee is composed of two
(2) Directors, both members of the Committee must approve any action to be taken
by the Committee in order for such action to be deemed to be an action of the
Committee pursuant to the provisions of this Plan. If the Committee is composed
of more than two (2) Directors, a majority of the Committee shall constitute a
quorum for the conduct of its business, and (a) the action of a majority of the
Committee members present at any meeting at which a quorum is present, or (b)
action taken without a meeting by the approval in writing of a majority of the
Committee members, shall be deemed to be action by the Committee pursuant to the
provisions of the Plan. The Committee is authorized to adopt such rules and
regulations for the administration of the Plan and the conduct of its business
as it may deem necessary or proper.
Any action taken or interpretation made by the Committee under any
provision of the Plan or any option granted hereunder shall be in accordance
with the provisions of the Code, and the regulations and rulings issued
thereunder as such may be amended, promulgated, issued, renumbered or continued
from time to time hereafter in order that, to the greatest extent possible, the
options granted hereunder shall constitute "incentive stock options" within the
meaning of the Code. All action taken pursuant to this Plan shall be lawful and
with a view to obtaining for the Company and the option holder the maximum
advantages under the law as then obtaining, and in the event that any dispute
shall arise as to any action taken or interpretation made by the Committee under
any provision of the Plan, then all doubts shall be resolved in favor of such
having been done in accordance with the said Code and such revenue laws,
amendments, regulations, rulings and provisions as may then be applicable. Any
action taken or interpretation made by the Committee under any provision of the
A-1
Plan shall be final. No member of the Board of Directors or the Committee shall
be liable for any action, determination or interpretation taken or made under
any provision of the Plan or otherwise if done in good faith.
3. PARTICIPATION. The Committee shall determine from among the
officers and key employees of the Company and its Subsidiaries (as such term is
defined in Section 424 of the Code) those individuals to whom options shall be
granted (sometimes hereinafter referred to as "Optionees"), the terms and
provisions of the options granted (which need not be identical), the time or
times at which options shall be granted and the number of shares of the
Company's common stock, $.01 par value per share (hereinafter "Common Stock"),
(or such number of shares of stock in which the Common Stock may at any time
hereafter be constituted), for which options are granted.
In selecting Optionees and in determining the number of shares for
which options are granted, the Committee may weigh and consider the following
factors: the office or position of the Optionee and his degree of responsibility
for the growth and success of the Company and its Subsidiaries, length of
service, remuneration, promotions, age and potential. The foregoing factors
shall not be considered to be exclusive or obligatory upon the Committee, and
the Committee may properly consider any other factors which to it seems
appropriate. The terms and conditions of any option granted by the Committee
under this Plan shall be contained in a written statement which shall be
delivered by the Committee to the Optionee as soon as practicable following the
Committee's establishment of the terms and conditions of such option.
An Optionee who has been granted an option under the Plan may be
granted additional options under the Plan if the Committee shall so determine.
Notwithstanding the foregoing, if during the twelve (12) month
period following the effective date of this amendment and restatement, any
options are granted to employees of the Company that are also members of the
Board of Directors of the Company and if this amendment and restatement is not
approved by the shareholders of the Company during such twelve (12) month
period, any options granted to any employees that are also members of the
Company's Board of Directors shall continue to be binding upon the Company
according to their terms but shall not be deemed to be "incentive stock options"
as defined in Section 422(b) of the Code. In addition, if at the time an option
is granted to an individual under this Plan, the individual owns stock of the
Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any of its Subsidiaries, (or if
such individual would be deemed to own such percentage of such stock under
Section 424(d) of the Code) such option shall continue to be valid and binding
upon the Company according to its terms but shall not be deemed to be an
"incentive stock option" as defined in Section 422(b) of the Code unless: (a)
the price per share at which common stock of the Company may be acquired in
A-2
connection with the exercise of such options is not less than one hundred ten
percent (110%) of the fair market value of such common stock, determined as of
the date of the grant of such options; and (b) the period of time within which
such options must be exercised does not exceed five (5) years from the date on
which such options are granted. Finally, in no event shall any options be
granted under this Plan at any time after the termination date set forth at the
end of this Plan.
4. SHARES SUBJECT TO THE PLAN. The aggregate number of shares of
Common Stock which have been reserved for issuance pursuant to the terms of
options granted pursuant to the terms of this Plan and the aggregate number of
shares of Common Stock which the Company is authorized to issue pursuant to
options granted pursuant to the terms of this Plan is 1,750,000, subject to
anti-dilutive adjustments, if any, made at any time after October 27, 1995,
pursuant to the provisions of Section 5 hereof. With respect to shares which may
be acquired pursuant to options which expire or terminate pursuant to the
provisions of this Plan without having been exercised in full, such shares shall
be considered to be available again for placement under options granted
thereafter under the Plan. Shares issued pursuant to the exercise of incentive
stock options granted under the Plan shall be fully paid and non-assessable.
5. ANTI-DILUTION PROVISIONS. The aggregate number of shares of Common
Stock and the class of such shares as to which options may be granted under the
Plan, the number and class of such shares subject to each outstanding option,
the price per share thereof (but not the total price), and the number of such
shares as to which an option may be exercised at any one time, shall all be
adjusted proportionately in the event of any change, increase or decrease in the
outstanding shares of Common Stock of the Company or any change in
classification of its Common Stock without receipt of consideration by the
Company which results either from a split-up, reverse split or consolidation of
shares, payment of a stock dividend, recapitalization, reclassification or other
like capital adjustment so that upon exercise of the option, the Optionee shall
receive the number and class of shares that he would have received had he been
the holder of the number of shares of Common Stock for which the option is being
exercised immediately preceding such change, increase or decrease in the
outstanding shares of Common Stock. Any such adjustment made by the Committee
shall be final and binding upon all Optionees, the Company, and all other
interested persons. Any adjustment of an incentive stock option under this
paragraph shall be made in such manner as not to constitute a "modification"
within the meaning of Section 424(h)(3) of the Code.
Anything in this Section 5 to the contrary notwithstanding, no
fractional shares or scrip representative of fractional shares shall be issued
upon the exercise of any option. Any fractional share interest resulting from
any change, increase or decrease in the outstanding shares of Common Stock or
resulting from any reorganization, merger, or consolidation for which adjustment
is provided in this Section 5 shall disappear and be absorbed into the next
lowest number of whole shares, and the Company shall not be liable for any
payment for such fractional share interest to the Optionee upon his exercise of
the option.
A-3
6. OPTION PRICE. The purchase price for each share of Common Stock
which may be acquired upon the exercise of each option issued under the Plan
shall be determined by the Committee at the time the option is granted, but in
no event shall such purchase price be less than one hundred percent (100%) of
the fair market value of the Common Stock on the date of the grant.
Notwithstanding the foregoing, in the case of an individual that owns stock of
the Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any of its Subsidiaries (or if
such individual would be deemed to own such percentage of such stock under
Section 424 (d) of the Code), (any such individual being hereinafter referred to
as a "Ten Percent Shareholder") in no event shall the purchase price for each
share of Common Stock which may be acquired upon the exercise of each option
issued to such Ten Percent Shareholder be less than one hundred ten percent
(110%) of the fair market value of the Common Stock on the date of the grant. If
the Common Stock is listed upon an established stock exchange or exchanges on
the day the option is granted, such fair market value shall be deemed to be the
closing price of the Common Stock on such stock exchange or exchanges on the day
the option is granted, or if no sale of the Company's Common Stock shall have
been made on any stock exchange on that day, on the next preceding day on which
there was a sale of such stock.
If the Common Stock is listed in the NASDAQ National Market System,
the fair market value of the Common Stock shall be the average of the
high and low closing sale prices in the NASDAQ National Market System on the day
the option is granted, or if no sale of the Common Stock shall have been made on
the NASDAQ National Market System on that day, on the next preceding day on
which there was a sale of such stock.
7. OPTION EXERCISE PERIODS. The time within which any option granted
hereunder may be exercised shall be, by its terms, not earlier than one (1) year
from the date such option is granted and not later than ten (10) years from the
date such option is granted; provided that, in the case of any options granted
to a Ten Percent Shareholder, the time within which any option granted to such
Ten Percent Shareholder may be exercised shall be, by its terms, not earlier
than one (1) year from the date such option is granted and not later than five
(5) years from the date such option is granted. Subject to the provisions of
Section 10 hereof, the Optionee must remain in the continuous employment of the
Company or any of its Subsidiaries from the date of the grant of the option to
and including the date of exercise of option in order to be entitled to exercise
his option. Options granted hereunder shall be exercisable in such installments
and at such dates as the Committee may specify. In addition, with respect to all
options granted under this Plan, unless the Committee shall specify otherwise,
the right of each Optionee to exercise his option shall accrue, on a cumulative
basis, as follows:
(a) one-fourth (1/4) of the total number of shares of Common
Stock which could be purchased (subject to adjustment as provided in Section 5
hereof) (such number being hereinafter referred to as the "Optioned Shares")
shall become available for purchase pursuant to the option at the end of the one
(1) year period beginning on the date of the option grant;
A-4
(b) one-fourth (1/4) of the Optioned Shares shall become
available for purchase pursuant to the option at the end of the two (2) year
period beginning on the date of the option grant;
(c) one-fourth (1/4) of the Optioned Shares shall become
available for purchase pursuant to the option at the end of the three (3) year
period beginning on the date of the option grant; and
(d) one-fourth (1/4) of the Optioned Shares shall become
available for purchase pursuant to the option at the end of the four (4) year
period beginning on the date of the option grant.
Continuous employment shall not be deemed to be interrupted by
transfers between the Subsidiaries or between the Company and any Subsidiary,
whether or not elected by termination from any Subsidiary of the Company and
re-employment by any other Subsidiary or the Company. Time of employment with
the Company shall be considered to be one employment for the purposes of this
Plan, provided there is no intervening employment by a third party or no
interval between employments which, in the opinion of the Committee, is deemed
to break continuity of service. The Committee shall, at its discretion,
determine the effect of approved leaves of absence and all other matters having
to do with "continuous employment". Where an Optionee dies while employed by the
Company or any of its Subsidiaries, his options may be exercised following his
death in accordance with the provisions of Section 10 below.
Notwithstanding the foregoing provisions of this Section 7, in
the event that the Company or the stockholders of the Company enter into an
agreement to dispose of all or substantially all of the assets or stock of the
Company by means of a sale, merger, consolidation, reorganization, liquidation,
or otherwise, or in the event a Change of Control (as hereinafter defined) shall
occur, each outstanding option shall become immediately exercisable with respect
to the full number of shares subject to that option and shall remain exercisable
until the expiration of the original term of the option. The Committee may
provide in connection with such transaction for assumption of options previously
granted or the substitution for such options of new options covering the
securities of a successor corporation or an affiliate thereof, with appropriate
adjustments as to the number and kind of securities and prices.
For purposes of this Plan, a "Change in Control" shall be
deemed to have occurred if:
(a) there shall be consummated: (i) any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's common stock would be
converted into cash, securities or other property, other than a merger of the
Company in which the holders of the Company's common stock immediately prior to
the merger have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger; or (ii) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company; or
A-5
(b) the stockholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company; or
(c) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
but excluding the Company and each of the Company's officers and directors,
whether individually or collectively), shall become the beneficial owner (within
the meaning of 13d-3 under the Exchange Act) of 20% or more of the Company's
outstanding common stock; or
(d) during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the entire Board of
Directors of the Company shall cease for any reason to constitute a majority
thereof unless the election, or the nomination for election by the Company's
shareholders, of each new director was approved by a vote of a least two-thirds
of the directors then still in office who were directors at the beginning of the
period.
Any change or adjustment made pursuant to the terms of this
paragraph shall be made in such a manner so as not to constitute a
"modification" as defined in Section 424 of the Code, and so as not to cause any
incentive stock option issued under this Plan to fail to continue to qualify as
an incentive stock option as defined in Section 422(b) of the Code.
Notwithstanding the foregoing, in the event that any agreement providing for the
sale or other disposition of all or substantially all the stock or assets of the
Company shall be terminated without consummating the disposition of said stock
or assets, any unexercised unaccrued installments that had become exercisable
solely by reason of the provisions of this paragraph shall again become
unaccrued and unexercisable as of said termination of such agreement; subject,
however, to such installments accruing pursuant to the normal accrual schedule
provided in the terms under which such option was granted. Any exercise of an
installment prior to said termination of said agreement shall remain effective
despite the fact that such installment became exercisable solely by reason of
the Company or its stockholders entering into said agreement to dispose of the
stock or assets of the Company.
8. EXERCISE OF OPTION. Options shall be exercised as follows:
(a) Notice and Payment. Each option, or any installment
thereof, shall be exercised, whether in whole or in part, by giving written
notice to the Company at its principal office, specifying the options being
exercised (by reference to the date of the grant of the option), the number of
shares to be purchased and the purchase price being paid, and shall be
accompanied by the payment of all or such part of the purchase price as shall be
required to be paid in connection with the exercise of such option (as specified
in the written notice of exercise of such option) (i) in cash, certified or bank
check payable to the order of the Company, (ii) by tendering (either actually or
by attestation) shares (or a sufficient portion thereof) valued as determined by
the Committee at the time of exercise, (iii) by authorizing a third party to
sell shares (or a sufficient portion thereof) acquired upon exercise of an
option and to remit to the Company a sufficient portion of the sale proceeds to
pay for all the shares acquired through such exercise and any resulting tax
withholding obligations or (iv) by any other method prescribed by the Committee.
Each such notice shall contain representations on behalf of the Optionee that he
A-6
acknowledges that the Company is selling the shares being acquired by him under
a claim of exemption from registration under the Securities Act of 1933 as
amended (the "Act"), as a transaction not involving any public offering; that he
represents and warrants that he is acquiring such shares with a view to
"investment" and not with a view to distribution or resale; and that he agrees
not to transfer, encumber or dispose of the shares unless: (i) a registration
statement with respect to the shares shall be effective under the Act, together
with proof satisfactory to the Company that there has been compliance with
applicable state law; or (ii) the Company shall have received an opinion of
counsel in form and content satisfactory to the Company to the effect that the
transfer qualifies under Rule 144 or some other disclosure exemption from
registration and that no violation of the Act or applicable state laws will be
involved in such transfer, and/or such other documentation in connection
therewith as the Company's counsel may in its sole discretion require.
(b) Issuance of Certificates. Certificates representing the
shares purchased by the Optionee shall be issued as soon as practicable after
the Optionee has complied with the provisions of Section 8(a) hereof.
(c) Rights as a Stockholder. The Optionee shall have no
rights as a stockholder with respect to the shares of Common Stock purchased
until the date of the issuance to him of a certificate representing such shares.
8. ASSIGNMENT OF OPTION. (a) Subject to the provisions of Sections
9(b) and 10(c) hereof, options granted under this Plan may not be assigned
voluntarily or involuntarily or by operation of law and any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of, or to subject to execution,
attachment or similar process, any incentive stock option, or any right
thereunder, contrary to the provisions hereof shall be void and ineffective,
shall give no right to the purported transferee, and shall, at the sole
discretion of the Committee, result in forfeiture of the option with respect to
the shares involved in such attempt.
(b) Notwithstanding anything to the contrary contained in the
terms of the Plan as in effect at any time prior to the date hereof and
notwithstanding anything to the contrary contained in the terms of any
statement, letter or other document or agreement setting forth the terms and
conditions of any options previously issued pursuant to the terms of this Plan,
any and all Non-Qualified Options (as defined in Section 13 hereof) previously
issued to any officer of the Company (as defined in Rule 16A-a(f) issued under
the Securities and Exchange Act of 1934 (hereinafter an "Executive Officer"))
pursuant to the terms of the Plan and, subject to the approval of the Committee,
any Non-Qualified Options which may be granted or issued to any Executive
Officer of the Company at any time in the future pursuant to the terms of the
Plan shall be transferable by the Executive Officer to whom such Non-Qualified
Options have been or are granted to: (i) the spouse, children or grandchildren
of the Executive Officer (hereinafter "Immediate Family Members"); (ii) a trust
or trusts for the exclusive benefit of such Immediate Family Members; (iii) a
partnership or limited liability company in which such Immediate Family Members
A-7
are the only partners or members; or (iv) a private foundation established by
the Executive Officer; provided that: (x) there may be no consideration for any
such transfer; (y) in the case of Non-Qualified Options which may be granted in
the future, the statement, letter or other document or agreement setting forth
the terms and conditions of any such Non-Qualified Options must expressly
provide for and limit the transferability of such Non-Qualified Options to
transfers which are permitted by the foregoing provisions of this Section 9(b);
and (z) any subsequent transfer of transferred Non-Qualified Options shall,
except for transfers occurring as a result of the death of the transferee as
contemplated by Section 10(e), be prohibited. Following the transfer of any
Non-Qualified Options as permitted by the foregoing provisions of this Section
9(b), any such transferred Non-Qualified Options shall continue to be subject to
the same terms and conditions applicable to such Non-Qualified Options
immediately prior to the transfer; provided that, for purposes of this Plan, the
term "Optionee" shall be deemed to refer to the transferee. Notwithstanding the
foregoing, the events of termination of employment of Section 10 hereof shall
continue to be applied with respect to the original Optionee for the purpose of
determining whether or not the Non-Qualified Options shall be exercisable by the
transferee and, upon termination of the original Optionee's employment, the
Non-Qualified Options shall be exercisable by the transferee only to the extent
and for the periods that the original Optionee (or his estate) would have been
entitled to exercise such Options as specified in Section 10 below.
9. EFFECT OF TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY. (a) In
the event that an Optionee's employment with the Company or the Subsidiary by
whom the Optionee was employed is terminated either by reason of: (i) a
discharge for cause; (ii) voluntary separation on the part of the Optionee
(other than any termination of employment by the Optionee which qualifies as a
termination for "Good Reason" pursuant to the terms of a letter agreement
between the Optionee and the Company (a "Good Reason Termination")) and without
consent of the Company or the Subsidiary by whom the Optionee was employed, any
rights of the Optionee to purchase shares of Common Stock pursuant to the terms
of any option or options granted to him under this Plan shall terminate
immediately upon such termination of employment to the extent such options have
not theretofore been exercised by him.
(b) In the event of the termination of employment of an
Optionee (otherwise than by reason of death or retirement of the Optionee at his
Retirement Date) by the Company or by any of the Subsidiaries employing the
Optionee at such time or pursuant to a Good Reason Termination, any option or
options granted to him under the Plan to the extent not theretofore exercised
shall be deemed cancelled and terminated forthwith, except that, subject to the
provisions of subparagraph (a) of this Section, such Optionee may exercise any
options theretofore granted to him, which have not then expired and which, as of
the date the Optionee's employment with the Company is terminated, were
otherwise exercisable within the provisions of Section 7 hereof, within three
(3) months after such termination. If the employment of an Optionee shall be
terminated by reason of the Optionee's retirement at his Retirement Date by the
Company or by any of the Subsidiaries employing the Optionee at such time, the
Optionee shall have the right to exercise such option or options held by him to
the extent that such options have not expired, at any time within three (3)
months after such retirement. The provisions of Section 7 to the contrary
A-8
notwithstanding, upon retirement, all options held by an Optionee shall be
immediately exercisable in full. The transfer of an Optionee from the employ of
the Company to a Subsidiary of the Company or vice versa, or from one Subsidiary
of the Company to another, shall not be deemed to constitute a termination of
employment for purposes of this Plan.
(c) In the event that an Optionee shall die while employed by
the Company or by any of the Subsidiaries or shall die within three (3) months
after retirement on his Retirement Date (from the Company or any Subsidiary),
any option or options granted to him under this Plan and not theretofore
exercised by him or expired shall be exercisable by the estate of the Optionee
or by any person who acquired such option by bequest or inheritance from the
Optionee in full, notwithstanding the provisions of Section 7 hereof, at any
time within one (1) year after the death of the Optionee. References herein
above to the Optionee shall be deemed to include any person entitled to exercise
the option after the death of the Optionee under the terms of this Section.
(d) In the event of the termination of employment of an
Optionee by reason of the Optionees' disability, the Optionee shall have the
right, notwithstanding the provisions of Section 7 hereof, to exercise all
options held by him, in full, to the extent that such options have not
previously expired or been exercised, at any time within one (1) year after such
termination. The term "disability" shall, for the purposes of this Plan, be
defined in the same manner as such term is defined in Section 22(e)(3) of the
Internal Revenue Code of 1986.
(e) For the purposes of this Plan, "Retirement Date" shall
mean, with respect to an Optionee, the date the Optionee actually retires from
his employment with the Company or, if applicable, the Subsidiary by whom he is
employed; provided that such date occurs on or after the date the Optionee is
otherwise entitled to retire under the terms of the defined benefit pension plan
which the Optionee is a participant in (and which plan is maintained by the
Company or, if applicable, the Subsidiary by whom the Optionee is employed).
10. AMENDMENT AND TERMINATION OF THE PLAN. The Board of Directors of
the Company may at any time suspend, amend or terminate the Plan; provided,
however, that except as permitted in Section 13 hereof, no amendment or
modification of the Plan which would:
(a) increase the maximum aggregate number of shares as to
which options may be granted hereunder (except as contemplated in Section 5); or
(b) reduce the option price or change the method of
determining the option price; or
(c) increase the time for exercise of options to be granted
or those which are outstanding beyond a term of ten (10) years; or
(d) change the designation of the employees or class of
employees eligible to receive options under this Plan, may be adopted unless
with the approval of the holders of a majority of the outstanding shares of
Common Stock represented at a stockholders' meeting of the Company, or with the
written consent of the holders of a majority of the outstanding shares of Common
Stock. No amendment, suspension or termination of the Plan may, without the
consent of the holder of the option, terminate his option or adversely affect
his rights in any material respect.
A-9
11. INCENTIVE STOCK OPTIONS; POWER TO ESTABLISH OTHER PROVISIONS. It is
intended that the Plan shall conform to and (except as otherwise expressly set
forth herein) each option shall qualify and be subject to exercise only to the
extent that it does qualify as an "incentive stock option" as defined in Section
422 of the Code and as such section may be amended from time to time or be
accorded similar tax treatment to that accorded to an incentive stock option by
virtue of any new revenue laws of the United States. The Board of Directors may
make any amendment to the Plan which shall be required so to conform the Plan.
Subject to the provisions of the Code, the Committee shall have the power to
include such other terms and provisions in options granted under this Plan as
the Committee shall deem advisable. The grant of any options pursuant to the
terms of this Plan which do not qualify as "incentive stock options" as defined
in Section 422 of the Code is hereby approved provided that the maximum number
of shares of Common Stock of the Company which can be issued pursuant to the
terms of this Plan (as provided for in Section 4 hereof but subject to
anti-dilutive adjustments made pursuant to Section 5 hereof) is not exceeded by
the grant of any such options and, to the extent that any options previously
granted pursuant to the terms of this Plan were not "incentive stock options"
within the meaning of Section 422 of the Code, the grant of such options is
hereby ratified, approved and confirmed.
12. MAXIMUM ANNUAL VALUE OF OPTIONS EXERCISABLE. Notwithstanding any
provisions of this Plan to the contrary if: (a) the sum of: (i) the fair market
value (determined as of the date of the grant) of all options granted to an
Optionee under the terms of this Plan which become exercisable for the first
time in any one calendar year; and (ii) the fair market value (determined as of
the date of the grant) of all options previously granted to such Optionee under
the terms of this Plan or any other incentive stock option plan of the Company
or its subsidiaries which also become exercisable for the first time in such
calendar year; exceeds (b) $100,000; then, (c) those options shall continue to
be binding upon the Company in accordance with their terms but, to the extent
that the aggregate fair market of all such options which become exercisable for
the first time in any one calendar year (determined as of the date of the grant)
exceeds $100,000, such options (referred to, for purposes of this Plan, as
"Non-Qualified Options") shall not be deemed to be incentive stock options as
defined in Section 422(b) of the Code. For purposes of the foregoing, the
determination of which options shall be recharacterized as not being incentive
stock options issued under the terms of this Plan shall be made in inverse order
of their grant dates and, accordingly, the last options received by the Optionee
shall be the first options to be recharacterized as not being incentive stock
options granted pursuant to the terms of the Plan.
13. GENERAL PROVISIONS (a) No incentive stock option shall be construed
as limiting any right which the Company or any parent or subsidiary of the
Company may have to terminate at any time, with or without cause, the employment
of an Optionee.
A-10
(b) The Section headings used in this Plan are intended
solely for convenience of reference and shall not in any manner amplify, limit,
modify or otherwise be used in the construction or interpretation of any of the
provisions hereof.
(c) The masculine, feminine or neuter gender and the singular
or plural number shall be deemed to include the other whenever the content so
indicates or requires.
(d) No options shall be granted under the Plan after ten (10)
years from the date the Plan is adopted by the Board of Directors of the Company
or approved by the stockholders of the Company, whichever is earlier.
14. EFFECTIVE DATE AND DURATION OF THE PLAN. The Plan became effective
on October 27, 1995, the date the adoption of the Plan was approved by the Board
of Directors of the Company. On January 8, 1996, as required by Section 422 of
the Code, the Plan was approved by the Stockholders of the Company. The Plan
will terminate on October 27, 2005; provided however, that the termination of
the Plan shall not be deemed to modify, amend or otherwise affect the terms of
any options outstanding on the date the Plan terminates.
IN WITNESS WHEREOF, the undersigned has executed this Plan by and on
behalf of the Company on and as of 16th day of June, 1995.
COLUMBUS McKINNON CORPORATION
By: /S/ ROBERT L. MONTGOMERY,
-----------------------------
Robert L. Montgomery
Executive Vice President
DATE ADOPTED BY BOARD OF DIRECTORS: October 27, 1995
DATE APPROVED BY STOCKHOLDERS: January 8, 1996
TERMINATION DATE: October 27, 2005
A-11
APPENDIX B
COLUMBUS MCKINNON CORPORATION
RESTRICTED STOCK PLAN
WHEREAS, Columbus McKinnon Corporation, a New York corporation with
offices at 140 John James Audubon Parkway, Amherst, New York (the "Company")
intends to file a registration statement with the U.S. Securities and Exchange
Commission in connection with a public offering (the "Public Offering") of the
Company's common stock, $.0l par value per share (the "Common Stock"); and
WHEREAS, the Company desires to establish a restricted stock plan prior
to the closing of the Public Offering which will enable the Company to attract
and retain as officers and key employees, individuals with substantial
consulting experience with respect to the legal, financial and operational
concerns of large public and privately held corporations through the use of an
equity based incentive compensation plan which will increase the personal
interest which the executive and managerial employees have in the successful and
profitable operation of the Company;
NOW, THEREFORE, in consideration of the foregoing, the Company hereby
adopts the following as the Columbus McKinnon Corporation Restricted Stock Plan:
1. PURPOSES. The purposes of the Columbus McKinnon Corporation
Restricted Stock Plan (the "Plan") are: (a) to enable the Company and its direct
and indirect wholly owned subsidiaries to attract, reward and retain highly
qualified executive and managerial employees through the use of an equity based
incentive compensation program; and (b) to increase the personal interest which
the executive and managerial employees of the Company and its direct and
indirect wholly owned subsidiaries have in the successful and profitable
operation of the Company by linking the long-term value of the compensation paid
to such employees to the value of the Common Stock.
2. STOCK SUBJECT TO PLAN. The shares of stock which may be awarded
pursuant to this Plan shall be shares of Common Stock. All awards of Common
Stock made pursuant to this Plan shall be subject to the restrictions on
transferability described in Section 6 hereof and to such other restrictions as
may be imposed by the Committee (as defined in Section 3 hereof) in connection
with its making of an award under this Plan (which other restrictions need not
be the same for each Participant). Accordingly, each share of Common Stock
awarded to an employee pursuant to the terms of this Plan is hereinafter
referred to as "Restricted Stock".
The aggregate number of shares of Restricted Stock which may be
granted and awarded under this Plan shall not exceed 150,000. Notwithstanding
the foregoing, the number of shares of Restricted Stock available for awards
under this Plan shall be adjusted proportionately in the event of any change,
increase or decrease in the outstanding shares of Common Stock which results
either from a split-up, reverse split or consolidation of shares, payment of a
stock dividend, recapitalization, reclassification or other like capital
B-1
adjustment; provided, however, that no fractional shares shall be issued in
connection with any such capital adjustment. The Restricted Stock which is
awarded under this Plan may be either authorized but unissued Common Stock or
treasury shares. Shares which are the subject of an award granted under this
Plan shall not again become available for future grants unless the recipient of
an award fails to pay the purchase price for the shares pursuant to Section 5
hereof.
3. COMMITTEE. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company which shall consist of at
least two (2) Directors of the Company, each of whom shall be a "disinterested
person" within the meaning of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
4. ELIGIBILITY AND PARTICIPATION. Each employee of the Company and
each employee of each of the Company's direct and indirect wholly owned
subsidiaries shall be eligible to receive an award of Restricted Stock under the
terms of this Plan. The Compensation Committee shall, from time to time,
determine which employees of the Company or any of its direct or indirect wholly
owned subsidiaries should receive an award of Restricted Stock and the number of
shares of Restricted Stock to be awarded to such employees. In determining which
employees should receive an award of Restricted Stock under the terms of this
Plan, the Committee shall take into account the past performance of the Company,
the employee's contributions to past performance, the capacity of the employee
to contribute in a substantial measure to the performance of the Company in the
future and such other factors as the Committee may consider relevant.
The Committee shall provide an employee who is granted an award
of Restricted Stock written notice of the number of shares of Restricted Stock
contained in the award, the timing and terms for payment by the employee of the
purchase price of the Restricted Stock to be issued pursuant to the award, a
statement of any restrictions imposed on the Restricted Stock to be issued
pursuant to the award and a statement of the date to be used for determining
whether the restrictions imposed by this Plan have lapsed (such date being
hereinafter referred to as the "Award Date").
For purposes of this Plan, if an award of Restricted Stock is
granted to an employee under the terms of this Plan, such employee shall be
deemed to be a "Participant".
5. AWARDS OF RESTRICTED STOCK. Each Participant that receives an award
of Restricted Stock under this Plan shall be required to pay for such Restricted
Stock. The price per share which shall be paid by a Participant that has been
granted an award of Restricted Stock shall be equal to the par value of such
share. The Committee shall determine the time and manner in which a Participant
shall be required to pay for Restricted Stock which the Participant has been
awarded under this Plan. Each share of Restricted Stock awarded to an employee
under the terms of this Plan shall be subject to the restrictions on
transferability contained in Section 6 hereof and such other restrictions as the
Committee may establish at the time the award is made (which other restrictions
need not be the same for each Participant).
The Committee, in its discretion, may require the Participant to
execute an agreement at the time of issuance of the Restricted Stock to the
Participant which agreement shall contain such terms and conditions as may, from
time to time, be established by the Company's Board of Directors.
B-2
6. RESTRICTIONS. The shares of the Restricted Stock sold to a
Participant in connection with this Plan may not be sold, pledged, encumbered or
otherwise alienated or hypothecated by the Participant until the time that these
restrictions have lapsed as hereinafter provided in this Section 6.
The restrictions described in the preceding sentence shall lapse
at the end of the five (5) year period beginning on the Award Date, provided
that the Participant remains in the employ of the Company or any of its direct
or indirect subsidiaries during the entire five (5) year period beginning on the
Award Date.
Notwithstanding the foregoing, if a Participant attains age 65 and
retires from employment with the Company or any of its direct or indirect
subsidiaries prior to the end of the five (5) year period beginning on the Award
Date, provided that the Participant remained in the employ of the Company or any
of its direct or indirect subsidiaries during the entire period beginning on the
Award Date and ending on the date that the Participant, after attaining age 65,
retires from employment with the Company or any of its direct or indirect
subsidiaries, the restrictions described in the first paragraph of this Section
6 shall lapse with respect to a portion of the shares of Restricted Stock
awarded to the Participant on the Award Date. The portion of the shares of
Restricted Stock with respect to which the restrictions described in the first
paragraph of this Section 6 shall lapse upon the employee's retirement after age
65 shall be equal to twenty percent (20%) of the total number of shares of
Restricted Stock awarded to the Participant on the Award Date for each full
twelve (12) month period which elapses between the Award Date and the date the
Participant retires.
The restrictions imposed on shares of Restricted Stock awarded
pursuant to the terms of this Plan shall also lapse upon the occurrence of a
Change in Control. For purposes of this Plan, a Change in Control shall be
deemed to have occurred if:
(a) there shall be consummated: (i) any consolidation or merger
of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's common stock would be
converted into cash, securities or other property, other than a merger of the
Company in which the holders of the Company's common stock immediately prior to
the merger have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger; or (ii) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company; or
(b) the stockholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company; or
(c) any person (as such term is used in Sections 13(d) and 14(d)
(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") but
excluding the Company and each of the Company's officers and directors, whether
individually or collectively), shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of 20% or more of the Company's
outstanding common stock; or
(d) during any period of two (2) consecutive years, individuals
who at the beginning of such period constitute the entire Board of Directors of
the Company shall cease for any reason to constitute a majority thereof unless
B-3
the election, or the nomination for election by the Company's shareholders, of
each new director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
7. STOCKHOLDER RIGHTS. Subject to the other provisions of this Plan,
the Participant snail have all the rights of a stockholder with respect to the
shares of Restricted Stock which are subject to this award including, but not
limited to, the right to receive all dividends on such shares and the right to
vote such shares; provided, however, that non-cash dividends, distributions and
adjustments shall be subject to the same restrictions and risk of forfeiture as
set forth in Sections 6 and 10 hereof as are applicable to the original shares
of Restricted Stock subject to the Participant's award.
8. OTHER RESTRICTIONS. The Committee may impose such other
restrictions on any shares of Restricted Stock sold pursuant to this Plan as it
may deem advisable, including, without limitation, restrictions under the
Securities Act of 1933 as amended (the "Act") restrictions under the
requirements of any stock exchange upon which such shares or shares of the same
class are then listed, and restrictions under any blue sky or securities laws
applicable to such shares.
9. LEGEND. In order to enforce the restrictions imposed on Restricted
Stock granted under this Plan, the Committee shall cause a legend or legends to
be placed on any certificate representing shares of Restricted Stock issued
pursuant to this Plan, which legend or legends shall make appropriate reference
to the restrictions imposed under it.
10. TERMINATION OF EMPLOYMENT. Except as hereinafter provided, if a
Participant's employment with the Company or any of its subsidiaries is
voluntarily or involuntarily terminated at any time prior to the date that the
restrictions imposed by Section 6 hereof have lapsed, any shares of Restricted
Stock issued to such Participant with respect to which such restrictions have
not lapsed shall be forfeited and the price paid by the Participant therefor
shall be returned to the Participant. Notwithstanding the foregoing, the
restrictions to which shares of Restricted Stock are subject pursuant to Section
6 hereof shall lapse: (a) upon the Participant's death or total and permanent
disability (to the extent and in a manner as shall be determined by the
Committee in its sole discretion); or (b) upon the occurrence of such special
circumstances or event as in the opinion of the Committee merits special
consideration.
11. NON-TRANSFERABILITY OF AWARDS. Awards granted under this Plan shall
not be transferable by the Participant otherwise than by will or the laws of
descent and distribution and the right to purchase shares of Restricted Stock
pursuant to an award under this Plan may be exercised or surrendered during a
Participant's lifetime only by the Participant.
12. TAX WITHHOLDING. The Company or subsidiary shall deduct and
withhold, from any cash or other payments to be made to the Participant, such
amounts under federal, state or local tax rules or regulations as it deems
appropriate with respect to an award under the Plan. In any event, the
Participant shall make available to the Company or subsidiary, promptly when
required, sufficient funds to meet the requirements of such withholding, and the
Committee shall be entitled to take and authorize such steps as it may deem
advisable in order to have such funds available to the Company or subsidiary
when required.
B-4
13. ISSUANCE OF SHARES AND COMPLIANCE WITH THE ACT. The Company may
postpone the issuance and delivery of shares of Restricted Stock until: (a) the
admission of such shares to listing on any stock exchange on which shares of
Common Stock are then listed; and (b) the completion of such registration or
other qualification of such shares of Restricted Stock under any state or
federal law, rule or regulation as the Company shall determine to be necessary
or advisable. As a condition precedent to the issuance of shares of Restricted
Stock pursuant to the grant of an award under the Plan, the Company may require
the recipient thereof to make such representations and furnish such information
as may, in the opinion of counsel for the Company, be appropriate to permit the
Company, in the light of the then existence or non-existence with respect to
such shares of an effective Registration Statement under the Act to issue the
shares in compliance with the provisions of that or any comparable act.
14. ADMINISTRATION. The Committee shall have full authority to manage
and control the operation and administration of the Plan. Any interpretation of
the Plan by the Committee and any decision made by the Committee of any matter
within its discretion is final and binding on all persons.
15. EMPLOYEE'S AND PARTICIPANT'S RIGHTS. No employee or other person
shall have any claim or right to be granted an award of Restricted Stock, under
the Plan except as the Committee shall have conferred in its discretion in the
administration of the Plan. Participation in the Plan shall not confer upon any
Participant any right with respect to continuation of employment by the Company
or its subsidiaries, nor interfere with the right of the Company to terminate at
any time the employment of any Participant.
16. AMENDMENT AND TERMINATION. The Board of Directors of the Company
may amend, suspend or terminate the Plan or any portion thereof at any time;
provided that no amendment, suspension or termination shall impair the rights of
any Participant, without the Participant's consent, in any Restricted Stock
previously awarded under this Plan. The Committee may amend the Plan to the
extent necessary for the efficient administration of the Plan, or to make it
practically workable or to confirm it to the provisions of any federal or state
law or regulation. Notwithstanding the foregoing provisions of this Section 16,
in the event that an amendment is required to be approved by stockholders of the
Company in order to comply with Rule 16b-3 under the Exchange Act, such
amendment shall be subject to the requisite approval of the stockholders of the
Company.
17. NON-EXCLUSIVITY OF PLAN. Neither the adoption of this Plan by the
Company's Board of Directors nor the submission of this Plan to the stockholders
of the Company for approval shall be construed as creating any limitations in
the power of the Company's Board of Directors to adopt any other incentive
compensation arrangements it may deem desirable, including, without limitation,
the awarding of Common Stock to employees otherwise than under the terms of this
Plan and such other arrangements as may be either generally applicable or
applicable only in specific cases.
18. GOVERNING LAW. Except as otherwise required by the General
Corporation Law of the State of Delaware, this Plan shall be governed by and
construed in accordance with the laws of the State of New York without regard to
its conflicts of law principles.
B-5
19. EFFECTIVE DATE OF PLAN; STOCKHOLDER APPROVAL. This Plan is
conditioned upon (i) its approval by the holders of a majority of the stock of
the Company present in person or represented by proxy and entitled to vote at a
special meeting of the Company's stockholders and (ii) the closing of the Public
Offering.
In the event that this Plan is not approved by the stockholders
of the Company as aforesaid or in the event the Public Offering is not closed,
this Plan and any awards granted hereunder shall be void and of no force or
effect.
IN WITNESS WHEREOF, the undersigned has executed this Plan by and on
behalf of the Company on and as of 27th day of October, 1995.
COLUMBUS McKINNON CORPORATION
By: /S/ ROBERT L. MONTGOMERY,
------------------------------
Robert L. Montgomery
Executive Vice President
B-6
ANNUAL MEETING OF SHAREHOLDERS OF
COLUMBUS MCKINNON CORPORATION
August 19, 2002
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
---------------
PLEASE DATE, SIGN AND MAIL YOUR ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED AS
SOON AS POSSIBLE.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
--------------------------------------------
PLEASE CALL TOLL-FREE 1-800-PROXIES AND FOLLOW THE INSTRUCTIONS. HAVE YOUR
CONTROL NUMBER AND THE PROXY CARD AVAILABLE WHEN YOU CALL.
TO VOTE BY INTERNET
-------------------
PLEASE ACCESS THE WEB PAGE AT WWW.VOTEPROXY.COM AND FOLLOW THE ON-SCREEN
INSTRUCTIONS. HAVE YOUR CONTROL NUMBER AVAILABLE WHEN YOU ACCESS THE WEB PAGE.
YOUR CONTROL NUMBER IS -------------------> ___________________
PROXY
COLUMBUS MCKINNON CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 19, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints TIMOTHY T. TEVENS and ROBERT L. MONTGOMERY,
JR. and each or any of them, attorneys and proxies, with full power of
substitution, to vote at the Annual Meeting of Shareholders of COLUMBUS McKINNON
CORPORATION (the "Company") to be held at the Company's corporate offices at 140
John James Audubon Parkway, Amherst, New York, on August 19, 2002 at 10:00 a.m.,
local time, and any adjournment(s) thereof revoking all previous proxies, with
all powers the undersigned would possess if present, to act upon the following
matters and upon such other business as may properly come before the meeting or
any adjournment(s) thereof.
THE DIRECTORS RECOMMEND A VOTE "FOR" ALL PROPOSALS.
1. ELECTION OF DIRECTORS:
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed below
contrary below)
HERBERT P. LADDS, JR.
TIMOTHY T. TEVENS
ROBERT L. MONTGOMERY, JR.
L. DAVID BLACK
CARLOS PASCUAL
RICHARD H. FLEMING
(Instruction: To withhold authority to vote
for any individual nominee mark "FOR" all
nominees above and write the name(s) of that
nominee(s) with respect to whom you wish to
withhold authority to vote here:
-------------------------------
-------------------------------
2. PROPOSAL TO APPROVE THE PROPOSED AMENDMENT TO THE AMENDED AND RESTATED 1995
COLUMBUS McKINNON CORPORATION INCENTIVE STOCK OPTION PLAN
|_| FOR |_| AGAINST |_| ABSTAIN
3. PROPOSAL TO APPROVE THE PROPOSED AMENDMENT TO THE COLUMBUS McKINNON
CORPORATION RESTRICTED STOCK PLAN
|_| FOR |_| AGAINST |_| ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" PROPOSALS NOS. 1, 2 AND
3.
Dated: ______________, 2002
-------------------------------
Signature
-------------------------------
Signature if held jointly
Please sign exactly as name appears. When shares
are held by joint tenants, both should sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in full
corporate name by President or other authorized
officer. If a partnership, please sign a
partnership name by authorized person. PLEASE
SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
ANNUAL MEETING OF SHAREHOLDERS OF
COLUMBUS MCKINNON CORPORATION
August 19, 2002
ESOP
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
---------------
PLEASE DATE, SIGN AND MAIL YOUR ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED AS
SOON AS POSSIBLE.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
--------------------------------------------
PLEASE CALL TOLL-FREE 1-800-PROXIES AND FOLLOW THE INSTRUCTIONS. HAVE YOUR
CONTROL NUMBER AND THE PROXY CARD AVAILABLE WHEN YOU CALL.
TO VOTE BY INTERNET
-------------------
PLEASE ACCESS THE WEB PAGE AT WWW.VOTEPROXY.COM AND FOLLOW THE ON-SCREEN
INSTRUCTIONS. HAVE YOUR CONTROL NUMBER AVAILABLE WHEN YOU ACCESS THE WEB PAGE.
YOUR CONTROL NUMBER IS -------------------> ___________________
COLUMBUS MCKINNON CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
VOTING INSTRUCTION CARD FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 19, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The Trustees of the Columbus McKinnon Corporation Employee Stock Ownership
Plan (the "ESOP") are hereby authorized to represent and to vote as designated
herein the shares of the undersigned held under the ESOP at the Annual Meeting
of Shareholders of COLUMBUS McKINNON CORPORATION (the "Company") to be held at
the Company's corporate offices at 140 John James Audubon Parkway, Amherst, New
York, on August 19, 2002 at 10:00 a.m., local time, and any adjournment(s)
thereof revoking all previous voting instructions, with all powers the
undersigned would possess if present, to act upon the following matters and upon
such other business as may properly come before the meeting or any
adjournment(s) thereof.
THE TRUSTEES MAKE NO RECOMMENDATION WITH RESPECT TO VOTING
YOUR ESOP SHARES ON ANY ITEMS
1. ELECTION OF DIRECTORS:
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed below
contrary below)
HERBERT P. LADDS, JR.
TIMOTHY T. TEVENS
ROBERT L. MONTGOMERY, JR.
L. DAVID BLACK
CARLOS PASCUAL
RICHARD H. FLEMING
(Instruction: To withhold authority to vote
for any individual nominee mark "FOR" all
nominees above and write the name(s) of that
nominee(s) with respect to whom you wish to
withhold authority to vote here:
-------------------------------
-------------------------------
2. PROPOSAL TO APPROVE THE PROPOSED AMENDMENT TO THE AMENDED AND RESTATED 1995
COLUMBUS McKINNON CORPORATION INCENTIVE STOCK OPTION PLAN
|_| FOR |_| AGAINST |_| ABSTAIN
3. PROPOSAL TO APPROVE THE PROPOSED AMENDMENT TO THE COLUMBUS McKINNON
CORPORATION RESTRICTED STOCK PLAN
|_| FOR |_| AGAINST |_| ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
WHEN PROPERLY EXECUTED , THIS VOTING INSTRUCTION WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS MADE, THE TRUSTEES WILL VOTE ANY ALLOCATED
ESOP SHARES "FOR" PROPOSALS NOS. 1, 2 AND 3.
Dated: _______________, 2002
-------------------------------
Signature
Please sign exactly as name appears. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such. PLEASE
SIGN, DATE AND MAIL THE VOTING INSTRUCTION CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.