SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[X] Filed by the Registrant
[ ]Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule14a-12
BALDOR ELECTRIC COMPANY
(Name of Registrant as Specified in Its Charter)
--------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)Title of each class of securities to which transaction applies:
(2)Aggregate number of securities to which transaction applies:
(3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was determined):
(4)Proposed maximum aggregate value of transaction:
(5)Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and
the date of its filing.
(1)Amount Previously Paid:
(2)Form, Schedule or Registration Statement No.:
(3)Filing Party:
(4)Date Filed:
BALDOR ELECTRIC COMPANY
P. O. Box 2400
5711 R. S. Boreham, Jr. Street
Fort Smith, Arkansas 72902
March 15, 2002
To our Shareholders:
You are cordially invited to attend our 2002 Annual Shareholders' Meeting.
On the following pages you will find the Notice of Meeting, which lists the matters to be conducted at the meeting, and the Proxy
Statement. Our Shareholders' Meeting will also include a review of 2001 activities and a discussion of the opportunities and
challenges ahead of us. We believe you will find it interesting.
If you plan on attending the Annual Meeting and need information, such as directions to the Annual Meeting location or lodging
suggestions, please contact the Company's Shareholder Relations at (479) 646-4711. All shareholders are invited to attend the
meeting in person. However, to assure your representation at the meeting, you are urged to vote your proxy as soon as possible.
You can now vote electronically over the Internet or by telephone. You may also vote by using a traditional proxy card and
mailing it to us in the enclosed postage-paid return envelope. Detailed voting instructions can be found on your proxy card.
Your vote is important.
We appreciate your continuing support.
Sincerely,
R. S. Boreham, Jr.
Chairman
BALDOR ELECTRIC COMPANY
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
Date: Saturday, April 20, 2002
Time: 10:30 a.m., local time
Location: Breedlove Auditorium on the campus of the
University of Arkansas - Fort Smith
5210 Grand Avenue
Fort Smith, Arkansas
Items of Business: 1. To elect directors; and
2. To transact such other business as may properly come before the meeting and all adjournments
thereof.
Record Date: Only shareholders of record as of the close of business on March 6, 2002, are entitled to notice of, and
to vote at, the Annual Meeting and all adjournments.
Annual Report: Our 2001 Annual Report to Shareholders for the fiscal year ended December 29, 2001, is available. This
Annual Report is not a part of the proxy soliciting material. To request additional copies of the
Company's literature, please contact us at:
Attn: Shareholder Relations
Phone: 479-646-4711 Baldor Electric Company
Fax: 479-648-5752 P O Box 2400
Website: www.baldor.com Fort Smith AR 72902
Proxy Voting: Shareholders of record can vote by one of the following methods and a proxy may be revoked as described
in the following Proxy Statement:
1. By telephone,
2. By Internet, or
3. By proxy card
By order of the Board of Directors
Lloyd G. Davis
Secretary
March 15, 2002
TABLE OF CONTENTS
Page
General Information ........................................................................................... 1
Voting ....................................................................................................... 1
Shareholders entitled to vote ......................................................................... 1
Quorum ................................................................................................ 1
Vote required ........................................................................................ 1
Voting methods ........................................................................................ 1
Vote at the annual meeting ........................................................................... 2
Voting by employee-participants ....................................................................... 2
Proxies ............................................................................................... 2
Cost of proxy solicitation ............................................................................ 2
Proposal 1 - Election of Directors ............................................................................. 2
Nominees .............................................................................................. 3
Other directors ....................................................................................... 3
General information about the Board of Directors ...................................................... 4
Committees of the Board of Directors .................................................................. 4
Director compensation ................................................................................. 5
Security Ownership of Certain Beneficial Owners and Management ................................................. 6
Executive Compensation ........................................................................................ 8
Summary compensation table ............................................................................ 8
Option grants in last fiscal year ..................................................................... 9
Aggregated option exercises in last fiscal year and FY-end option values .............................. 10
Change of control arrangements ........................................................................ 10
Compensation Committee interlocks and insider participation ........................................... 10
Report of the Board of Directors on executive compensation ............................................ 11
Performance graph ..................................................................................... 13
Audit Committee Report ......................................................................................... 14
Statement of director independency .................................................................... 15
Independent Auditors ........................................................................................... 16
Shareholder Proposals and Nomination Deadlines ................................................................. 16
Other Matters .................................................................................................. 16
BALDOR ELECTRIC COMPANY
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
Date, time, and place of meeting...The enclosed proxy is solicited on behalf of the Board of Directors of Baldor Electric Company
(the "Company") for use at the Annual Meeting of its shareholders. The meeting will be held as follows:
Time: 10:30 a.m., local time Location: Breedlove Auditorium on the campus of the
University of Arkansas - Fort Smith
Date: Saturday, April 20, 2002 5210 Grand Avenue
Fort Smith, Arkansas
Company location and proxy mailing...The Company's principal executive offices are located at 5711 R. S. Boreham, Jr. Street,
Fort Smith, Arkansas 72901. This Proxy Statement and the accompanying form of proxy are first being sent to our shareholders on
or about March 15, 2002.
VOTING
Shareholders entitled to vote...Only the holders of record of the Company's common stock, par value $0.10 per share (the "Common
Stock"), at the close of business on March 6, 2002, will be entitled to notice of and to vote at the Annual Meeting. There were
33,964,718 shares of Common Stock outstanding as of the close of business on March 6, 2002. Each share of Common Stock entitles
the holder to one vote on each item of business to be presented for shareholder vote at the Annual Meeting.
Quorum...A majority of the issued and outstanding shares entitled to vote and represented in person or by proxy will constitute a
quorum for the transaction of business at the Annual Meeting. Shares represented by properly executed proxies will be counted for
determining whether a quorum exists. If a broker indicates on the proxy that it does not have discretionary authority to vote on
a particular matter (a "broker non-vote"), the related shares will only be considered as present and entitled to vote for that
particular matter.
Vote required...The affirmative vote of the holders of a majority of the shares constituting the quorum is required for the
election of directors as set forth in Proposal 1. Shares represented by proxies that direct that the shares be voted to abstain
or to withhold a vote on a matter, and broker non-votes deemed to be present, will have the effect of a vote against that
proposal. Shares represented by proxies that are marked to deny discretionary authority on other matters will be treated as
shares present and entitled to vote on those matters and will have the same effect as a vote against approval of such proposals.
Voting methods...You may vote your shares by telephone, over the Internet, or by mail as indicated on the attached proxy card.
If you vote by telephone or Internet, you do not need to return your proxy card. If you choose to vote by mail, simply mark your
proxy card, date and sign it, and return it in the enclosed postage-paid envelope.
Vote at the Annual Meeting...Your vote by telephone, Internet, or mail will not limit your right to vote at the Annual Meeting.
If you are not a shareholder of record, you must obtain a proxy, executed in your favor, from the holder of record to be able to
vote at the meeting.
Voting by employee-participants... The Company maintains the Baldor Electric Company Employees' Profit Sharing and Savings Plan
(the "Profit Sharing and Savings Plan"). One of the investment alternatives for employee-participants is the Baldor Stock Fund.
Employee-participants individually have the right to direct the trustee of the Profit Sharing and Savings Plan how to vote the
shares of Common Stock that are allocated to their individual accounts. Employee-participants may use the telephone, Internet, or
mail to direct the trustee on how to vote their shares. Instructions on the various voting methods can be found on the
employee-participants direction card. The Profit Sharing and Savings Plan requires the trustee to vote the shares of Common Stock
not yet allocated to the accounts of employee-participants in proportion to the votes cast by employee-participants.
Proxies...The persons named in the proxy are authorized to vote the shares of the shareholders giving the proxy for any nominee
except those nominees with respect to whom authority has been withheld. All shares that have been properly voted and not revoked
will be voted at the Annual Meeting in accordance with the instructions received. If the form of proxy is signed and returned
without any direction, shares of the Company's Common Stock will be voted FOR the election of the Board's slate of nominees. A
properly voted proxy may be revoked at any time before it is exercised either by attending the meeting and voting in person or by
written notice to the Secretary of the Company at the address found in this proxy statement under the caption "Company location
and proxy mailing".
Cost of proxy solicitation...The Company will pay for the cost of the solicitation of proxies. Regular employees of the Company,
without additional compensation, may personally solicit proxies or use mail systems, facsimile, telephone, or other reasonable
means to solicit proxies. Brokerage firms, banks, nominees, and others will be requested to forward proxy materials to the
beneficial owners of the Company's Common Stock held of record by them. Currently, there is no plan to solicit proxies by
specially engaged employees or other paid solicitors; however, this may be done if deemed necessary.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Company's Restated Articles of Incorporation and Bylaws, as amended, provide for a classified Board of Directors. The Board
is divided into three classes. Each class expires at different times. Three members are to be elected to the Board of Directors
in 2002. Each member elected in 2002 will serve for a term of three years.
The persons named in the enclosed proxy intend to vote such proxy for the election of the three nominees named below as directors
of the Company. Each nominee listed below will be voted FOR unless the shareholder indicates on the proxy that the vote for any
one or more of the nominees should be withheld or contrary directions are indicated.
The Board of Directors has no reason to doubt the availability of the nominees and each has indicated a willingness to serve if
elected. If any nominee shall decline or be unable to serve, the Board of Directors, in its discretion, may either reduce the
size of the Board or the proxies will be voted for a substitute nominee designated by the Board of Directors.
Information Regarding the Nominees for Directors
to be Elected in 2002 for Terms Ending in 2005
Jefferson W. Asher, Jr. ... Independent Management Consultant, providing assistance to corporations, attorneys, banking
institutions, and other creditors, for more than five years; Director of California Beach Restaurants, Inc. (OTC); Director of
Zing Wireless, Inc.
Richard E. Jaudes ... Partner at Thompson Coburn LLP, a law firm which provides legal counsel to the Company, since 1997; a
partner at Peper, Martin, Jensen, Maichel and Hetlage, a law firm, prior to 1997.
Robert J. Messey ... Senior Vice President and Chief Financial Officer of Arch Coal, Inc. (NYSE), the nation's second largest coal
producer, since December 2000; Vice President - Financial Services of Jacobs Engineering Group, Inc. (NYSE), one of the nation's
largest engineering firms, from 1999 thru December 2000; Senior Vice President and Chief Financial Officer of Sverdrup Corporation
from 1993 to 1999.
Information Regarding the Directors Who Are Not Nominees for Election
and Whose Terms Continue Beyond 2002
Merlin J. Augustine, Jr. ... Associate Vice Chancellor for Finance and Administration and Director of Customer Relations at the
University of Arkansas in Fayetteville for more than five years; Member of the Board of Arkansas Science and Technology Authority
since 2000; Founder and Chief Executive Officer of the M & N Augustine Foundation for Human Development, Inc. since 1992.
R. S. Boreham, Jr. ... The Company's Chairman of the Board since 1981 and Chief Executive Officer from 1978 through 1992; Director
of USA Truck, Inc. (NASDAQ) since 1992.
John A. McFarland ... The Company's Chief Executive Officer since January 2000, President since November 1996, Executive Vice
President - Sales and Marketing from August 1996 to November 1996, and Vice President - Sales from May 1991 to August 1996.
Robert L. Proost ... Financial Consultant and Lawyer; Former Director, Corporate Vice President, Chief Financial Officer, and
Director of Administration of A.G. Edwards & Sons, Inc., a securities brokerage and investment banking firm which has historically
provided investment banking services to the Company (retired March 2001); Former Director, Vice President, and Chief Financial
Officer of A.G. Edwards, Inc. (NYSE), and of various subsidiaries (retired March 2001).
R. L. Qualls ... The Company's Vice Chairman of the Board from 1996 through 2000, Chief Executive Officer from 1993 through 1997,
and President from 1990 through 1996; Director of Bank of the Ozarks, Inc. (NASDAQ) since 1997.
Barry K. Rogstad...President of the American Business Conference, a coalition of mid-size fast-growing firms, which promotes
public policies to encourage growth, job creation, and a higher standard of living for all Americans, for more than five years.
General Information Regarding
Current Directors and Nominees for Election
Year of Director Current Term
Name Birth Since Expires
-------------------------------- ------------------ -------------------- --------------------
Jefferson W. Asher, Jr. 1924 1973 2002
Merlin J. Augustine, Jr. 1943 2000 2003
R. S. Boreham, Jr. 1924 1961 2004
Richard E. Jaudes 1943 1999 2002
John A. McFarland 1951 1996 2003
Robert J. Messey 1946 1993 2002
Robert L. Proost 1937 1988 2003
R. L. Qualls 1933 1987 2004
Barry K. Rogstad 1940 2001 2004
Information About the Board of Directors
and Committees of the Board
Board of Directors ... In addition to its normal responsibilities, the Board of Directors, as a whole, approves executive
compensation. During the fiscal year ended December 29, 2001 ("fiscal year 2001"), the Board of Directors held four meetings.
Below are the current committee memberships and other information about the committees of the Board of Directors.
Executive Audit Stock Option Nominating
Name Committee Committee Committee Committee
-------------------------------- ---------------- --------------- ------------------- -------------------
Jefferson W. Asher, Jr. Chairman
-------------------------------- ---------------- --------------- ------------------- -------------------
-------------------------------- ---------------- --------------- ------------------- -------------------
Merlin J. Augustine, Jr. *
-------------------------------- ---------------- --------------- ------------------- -------------------
-------------------------------- ---------------- --------------- ------------------- -------------------
R. S. Boreham, Jr. Chairman *
-------------------------------- ---------------- --------------- ------------------- -------------------
-------------------------------- ---------------- --------------- ------------------- -------------------
Richard E. Jaudes *
-------------------------------- ---------------- --------------- ------------------- -------------------
-------------------------------- ---------------- --------------- ------------------- -------------------
John A. McFarland * Chairman
-------------------------------- ---------------- --------------- ------------------- -------------------
-------------------------------- ---------------- --------------- ------------------- -------------------
Robert J. Messey * Chairman
-------------------------------- ---------------- --------------- ------------------- -------------------
-------------------------------- ---------------- --------------- ------------------- -------------------
Robert L. Proost * *
-------------------------------- ---------------- --------------- ------------------- -------------------
-------------------------------- ---------------- --------------- ------------------- -------------------
R. L. Qualls *
-------------------------------- ---------------- --------------- ------------------- -------------------
-------------------------------- ---------------- --------------- ------------------- -------------------
Barry K. Rogstad
================================ ================ =============== =================== ===================
================================ ================ =============== =================== ===================
Meetings held during
fiscal year 2001 7 4 4 0 **
-------------------------------- ---------------- --------------- ------------------- -------------------
* Committee membership
** Nominating Committee meetings were held in December 2000 and January 2002.
Executive Committee ... Between meetings of the Board, the Executive Committee is empowered to act in lieu of the Board of
Directors except on those matters for which the Board of Directors has specifically reserved authority to itself or as set forth
in the Company's Bylaws, as amended. The Executive Committee administers the 1989 Stock Option Plan for Non-Employee Directors
(the "1989 Plan") and the 1996 Stock Option Plan for Non-Employee Directors (the "1996 Plan") both of which have expired except
for options outstanding. The Executive Committee also administers the Stock Option Plan for Non-Employee Directors (the "Director
Plan") that was approved by the Company's shareholders in 2001. The Executive Committee is comprised of directors who are also
executive officers and employees of the Company and a non-employee director.
Audit Committee ... The Audit Committee performs the following functions: assists the Board of Directors in the selection of
independent auditors, directs and supervises investigations into matters relating to audit functions, reviews with independent
auditors the plans and results of the audit engagement, reviews the degree of independence of the auditors, considers the range of
audit and non-audit fees, and reviews the adequacy of the Company's system of internal accounting controls. More information
regarding the Audit Committee can be found in this proxy statement under the captions "The Audit Committee Report" and "Statement
of Director Independency". The Audit Committee is comprised of three non-employee independent directors.
Stock Option Committee ... The Stock Option Committee administers the Company's 1987 Incentive Stock Plan (the "1987 Plan") and
1994 Incentive Stock Plan (the "1994 Plan"). These plans are employee stock plans. The Stock Option Committee also administers
the 1990 Stock Plan for District Managers (the "1990 Plan"). The 1987 Plan has expired except for outstanding options. Awards can
be made from the 1994 Plan and the 1990 Plan. The Stock Option Committee has the exclusive authority to determine which of the
eligible participants are to receive awards and to determine the amount and the terms and conditions of the awards made to each
participant. The Stock Option Committee is comprised of three non-employee independent directors.
Nominating Committee ... The Nominating Committee is responsible for searching for and reviewing possible candidates for the
Board of Directors. The Committee is also responsible for proposing to the Board of Directors a slate of directors for election
by the shareholders at each annual meeting and proposing candidates to fill any vacancies on the Board.
Director Compensation ... Under the terms of the 1996 Plan, each non-employee director received an option grant on January 31,
2001. Each grant included: (1) an option to purchase 3,240 shares of the Company's Common Stock having an exercise price of
$21.82 (the composite closing price of the Common Stock on that date), and (2) an option to purchase 2,160 shares of the Company's
Common Stock having an exercise price of $10.91 (50% of the composite closing price of the Common Stock on that date). Under the
terms of the Director Plan, eligible directors received an option grant on April 30, 2001. Each grant included: (1) an option to
purchase 3,240 shares of the Company's Common Stock having an exercise price of $20.86 (the composite closing price of the Common
Stock on that date), and (2) an option to purchase 2,160 shares of the Company's Common Stock having an exercise price of $10.43
(50% of the composite closing price of the Common Stock on that date). Only two of the Company's seven non-employee directors
were eligible for the grant on April 30, 2001. The annual option grants become exercisable immediately and all options expire ten
years after the grant date. Only non-employee independent directors are compensated for their services on the Board of
Directors. A summary of the quarterly fees paid for board and committee service for fiscal year 2001 follows.
Executive Audit Stock Option Nominating
Director Committee Committee Committee Committee
---------------- ------------ ---------------- --------------- ------------------- ----------------
Chairman $ 0 $ 0 $ 3,250 $ 800 $ 0
---------------- ------------ ---------------- --------------- ------------------- ----------------
---------------- ------------ ---------------- --------------- ------------------- ----------------
Member $ 4,250 $ 1,500 $ 2,200 $ 800 $ 400
---------------- ------------ ---------------- --------------- ------------------- ----------------
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 6, 2002, regarding all persons known to the Company to be the beneficial
owners of more than five percent of the Company's Common Stock. The table also includes security ownership for each director of
the Company, each nominee for election as a director, each of the executive officers named in the Summary Compensation Table (the
"Named Executive Officers"), and all executive officers and directors as a group.
Amount and Nature of Percent of
Name Beneficial Ownership Class (1)
The Baldor Electric Company
Profit Sharing and Savings Plan 3,578,623 (2) 10.5 %
P. O. Box 2400
Fort Smith, Arkansas 72902
Fred C. Ballman 3,052,904 (3) 9.0 %
P. O. Box 6638
Fort Smith, Arkansas 72906
R. S. Boreham, Jr. 1,585,013 (4) 4.6 %
Lloyd G. Davis 319,301 (5) *
John A. McFarland 305,021 (6) *
R. L. Qualls 189,907 (7) *
Gene J. Hagedorn 122,344 (8) *
Jefferson W. Asher, Jr. 100,609 (9) *
Robert L. Proost 81,540 (10) *
Robert J. Messey 64,934 (11) *
Randal G. Waltman 55,485 (12) *
Richard E. Jaudes 11,914 (13) *
Merlin J. Augustine, Jr. 10,539 (14) *
Barry K. Rogstad 6,400 (15) *
All executive officers and directors
as a group (19 persons) 3,244,877 (16) 9.3 %
_______________
* Less than 1%.
(1) Percentage is calculated in accordance with Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended. The
numerator consists of the number of shares of the Company's Common Stock owned by each individual (including shares issuable
upon exercise of stock options which are currently exercisable or exercisable within 60 days of March 6, 2002). The
denominator consists of all issued and outstanding shares of the Company's Common Stock plus those shares that are issuable
upon the exercise of stock options for that individual or group of individuals. All "exercisable" options as defined on
this page include shares issuable upon exercise of stock options that are currently exercisable or exercisable within 60
days of March 6, 2002.
(2) Based on correspondence dated March 6, 2002, received from the trustee of the Company's Profit Sharing and Savings Plan,
participants in such Plan have sole voting power and shared investment power over 3,578,623 shares.
(3) Shared voting and shared investment power over 3,020,504 shares; includes exercisable options to purchase 32,400 shares.
(4) Shared voting and shared investment power over 185,799 shares; sole voting and sole investment power over 1,213,594 shares;
sole voting and shared investment power over 2,388 shares in the Profit Sharing and Savings Plan; includes exercisable
options to purchase 183,232 shares.
(5) Sole voting and sole investment power over 98,983 shares; shared voting and shared investment power over 13,334 shares; sole
voting and shared investment power over 20,162 shares and shared voting and shared investment power over 2,856 shares in the
Profit Sharing and Savings Plan; includes exercisable options to purchase 152,233 shares directly and 31,733 indirectly.
(6) Shared voting and shared investment power over 127,422 shares; sole voting and shared investment power over 29,599 shares in
the Profit Sharing and Savings Plan; includes exercisable options to purchase 148,000 shares.
(7) Sole voting and sole investment power over 175,145 shares; shared voting and shared investment power over 9,362 shares;
includes exercisable options to purchase 5,400 shares.
(8) Shared voting and shared investment power over 46,858 shares; sole voting and shared investment power over 6,153 shares in
the Profit Sharing and Savings Plan; includes exercisable options to purchase 69,333 shares.
(9) Sole voting and sole investment power over 73,609 shares; includes exercisable options to purchase 27,000 shares.
(10) Sole voting and sole investment power over 14,100 shares; shared voting and shared investment power over 18,840 shares;
includes exercisable options to purchase 48,600 shares.
(11) Sole voting and sole investment power over 362 shares; shared voting and shared investment power over 8,712 shares; includes
exercisable options to purchase 55,860 shares.
(12) Sole voting and sole investment power over 12,412 shares; sole voting and shared investment power over 4,907 shares in the
Profit Sharing and Savings Plan; includes exercisable options to purchase 38,166 shares.
(13) Sole voting and sole investment power over 1,114 shares; includes exercisable options to purchase 10,800 shares.
(14) Shared voting and shared investment power over 1,899 shares; includes exercisable options to purchase 8,640 shares.
(15) Shared voting and shared investment power over 3,160 shares; includes exercisable options to purchase 3,240 shares.
(16) Sole voting and sole investment power over 1,636,631 shares; shared voting and shared investment power over 499,094 shares;
sole voting and shared investment power over 94,920 shares in the Profit Sharing and Savings Plan; includes exercisable
options to purchase 1,014,232 shares.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation paid during each of the Company's last three fiscal
years to each of the Company's Named Executive Officers.
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards Payouts
Other Restricted Securities All
Annual Stock Underlying LTIP Other
Name and Principal Position Year Salary Bonus ompensation Award(s) Options Payouts Compensation (1)
($) ($) ($) ($) (#) ($) ($)
John A. McFarland 2001 270,000 221,704 0 0 26,000 0 25,489
President and 2000 250,000 247,500 0 0 26,000 0 26,129
Chief Executive Officer 1999 215,000 215,000 0 0 26,000 0 26,903
R. S. Boreham, Jr. 2001 210,000 172,436 0 0 13,000 0 52,457
Chairman 2000 270,000 267,300 0 0 19,500 0 57,186
1999 363,000 362,000 0 0 23,400 0 53,975
Lloyd G. Davis 2001 206,000 169,152 0 0 14,300 0 26,739
Executive Vice President, 2000 200,000 198,000 0 0 14,300 0 27,401
Chief Operating Officer, and 1999 190,000 150,000 0 0 14,300 0 29,367
Secretary
Gene J. Hagedorn 2001 125,000 53,373 0 0 6,500 0 19,628
Vice President - Materials 2000 120,000 59,400 0 0 6,500 0 19,555
1999 112,000 53,000 0 0 8,800 0 20,124
Randal G. Waltman 2001 115,000 61,584 0 0 6,500 0 18,270
Vice President - 2000 110,000 54,450 0 0 6,500 0 17,657
Motor Engineering and 1999 108,000 32,000 0 0 7,800 0 17,298
Operations
______________
(1) The amounts disclosed in this column include contributions to the Company Profit Sharing and Savings Plan, a defined
contribution plan. This is comprised of two plans: profit sharing plan and 401(k) savings. The Company makes a
contribution to the profit sharing plan equal to 12% of pre-tax earnings for participating companies. The profit sharing
contribution is allocated among eligible employees in proportion to their total compensation. The Company makes matching
contributions to the savings plan at a rate no greater than 25% of the first 6% of the participating employee's
compensation. Due to the limits on the total amount of Company and employee contributions, the above Named Executive
Officers did not receive their full allocation amounts to the Profit Sharing and Savings Plan. The Company also maintains a
split-dollar life insurance plan for all executive officers. The Company makes the premium payments on the split-dollar
life insurance policies that vary according to age and insurance coverage for each officer. Each executive officer
reimburses the Company for a portion of the premium that represents the full value attributable to term life coverage. The
amounts included as compensation for each Named Executive Officer were calculated using the interest-foregone method that
more accurately reflects the benefit received by the participant. The fiscal year 2001 amounts in this column represent
Company contributions consisting of the following:
Contributions Contributions Split-Dollar
to the to the Life Insurance
Name Profit Sharing Plan 401(k) Savings Premiums
($) ($) ($)
John A. McFarland 15,354 2,006 8,129
R. S. Boreham, Jr. 15,354 2,253 34,850
Lloyd G. Davis 15,354 2,550 8,835
Gene J. Hagedorn 15,354 1,875 2,399
Randal G. Waltman 14,245 1,581 2,444
Option Grants in Last Fiscal Year
Individual Grants
Number of % of Total Market
Securities Options Price
Underlying Granted to on Grant Date
Options Employees in Exercise Grant Expiration Present
Name Granted Fiscal Year Price Date Date Value (1)
(#) ($/sh) ($/sh) ($)
John A. McFarland 20,000 (2) 5.0% 21.35 21.35 2/4/2011 70,400
6,000 (3) 1.5% 10.68 21.35 2/4/2011 63,420
R. S. Boreham, Jr. 10,000 (2) 2.5% 21.35 21.35 2/4/2011 35,200
3,000 (3) 0.8% 10.68 21.35 2/4/2011 31,710
Lloyd G. Davis 11,000 (2) 2.8% 21.35 21.35 2/4/2011 38,720
3,300 (3) 0.8% 10.68 21.35 2/4/2011 34,881
Gene J. Hagedorn 5,000 (2) 1.3% 21.35 21.35 2/4/2011 17,600
1,500 (3) 0.4% 10.68 21.35 2/4/2011 15,855
Randal G. Waltman 5,000 (2) 1.3% 21.35 21.35 2/4/2011 17,600
1,500 (3) 0.4% 10.68 21.35 2/4/2011 15,855
_______________
(1) The Company used the Black-Scholes option pricing model to determine grant date present value. Calculations are based on a
ten-year option term and the following weighted average variables assumptions: expected option life of 8 years; interest
rate of 5.2%; annual dividend yield of 2.4%; and volatility of 3.6%. Because the present values are based on estimates and
assumptions, the amounts reflected in this table may not be achieved.
(2) Incentive stock options to purchase shares of Common Stock of the Company were granted at the composite closing price of the
Common Stock on the date of grant and are 100% exercisable six months and one day following the grant date.
(3) Non-qualified options to purchase shares of restricted Common Stock of the Company were granted at 50% of the composite
closing price of the Common Stock on the date of grant with full vesting occurring on the fifth anniversary date. Vesting
may be accelerated by early exercise or when certain events relating to change of the Company's ownership occur. Until
vesting occurs, the restricted shares acquired on exercise of such options: (a) have dividend rights, (b) may be voted, (c)
cannot be sold or transferred until they are vested, and (d) are forfeitable under certain circumstances. The options are
100% exercisable six months and one day following the grant date.
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
Number of
Securities Underlying Value of
Shares Unexercised Unexercised
Acquired on Value Options In-the-Money Options
Name Exercise Realized (1) at FY-End (#) at FY-End ($) (2)
(#) ($) (Exercisable) (Unexercisable) (Exercisable) (Unexercisable)
John A. McFarland 14,534 211,651 166,000 0 721,700 0
R. S. Boreham, Jr. 10,000 120,729 183,232 0 979,707 0
Lloyd G. Davis 12,000 164,200 183,966 0 1,169,572 0
Gene J. Hagedorn 3,566 47,332 85,333 0 558,752 0
Randal G. Waltman 0 0 38,166 0 133,960 0
_______________
(1) Represents the difference between the option exercise price and the composite closing price of the Common Stock on the date
of exercise multiplied by the number of shares acquired upon exercise.
(2) Represents the difference between the $20.75 composite closing price of the Common Stock as reported by the New York Stock
Exchange on December 28, 2001, the last trading day of fiscal year 2001, and the exercise price of the options multiplied by
the number of shares of Common Stock underlying the options. The numbers shown reflect the value of options accumulated over
a nine-year period.
Change of Control Arrangements
Pursuant to agreements under the 1987 Plan and the 1994 Plan, outstanding restricted Common Stock of the Company acquired by an
early exercise of a non-qualified stock option will fully vest and be free of restrictions without the requirement of any
further act by the Company or the shareholder in the event of a "Change of Control" of the Company as defined in those
agreements.
Compensation Committee Interlocks and Insider Participation
Although the Company has no standing compensation committee of the Board of Directors, the Executive Committee performs
functions similar to those customarily performed by such committee by making recommendations to the Board; however, the Board of
Directors, as a whole, approves the salary and contingent compensation arrangements for executive officers and the remuneration
arrangements for directors. The Stock Option Committee administers the 1981 Plan, the 1987 Plan, and the 1994 Plan, all Plans
relating to employees. The Executive Committee administers the 1989 Plan, the 1996 Plan, and the Director Plan, all relating to
non-employee directors. The 1981 Plan and all outstanding grants from the 1981 Plan expired in 2001. The 1987 Plan, the 1989
Plan, and the 1996 Plan have expired except for options outstanding. The members of the Executive Committee are the following
directors: R. S. Boreham, Jr., John A. McFarland, and R. L. Qualls. Messrs. Boreham and McFarland were executive officers of
the Company during fiscal year 2001. The members of the Stock Option Committee are the following non-employee independent
directors: Richard E. Jaudes, Robert J. Messey, and Robert L. Proost.
Report of the Board of Directors on Executive Compensation
The Company applies a consistent philosophy to compensation for all employees, including senior management. This philosophy is
based on the premise that the achievements of the Company result from the coordinated efforts of all individuals working toward
common objectives. The Company strives to achieve those objectives through teamwork that is focused on meeting the expectations
of customers and shareholders.
The Company's Officers' Compensation Plan (the "Plan") is objective, formula driven, and has been consistently applied since
1973. The Plan is designed to ensure that an appropriate relationship exists between executive pay and the creation of
shareholder value. The primary goals of the Plan are to ensure that total compensation is fair internally, is competitive
externally, and offers performance motivation. For purposes of this report, total compensation is defined as salary plus
contingent compensation. The Plan combines annual base compensation with contingent compensation, both of which are based upon
individual performance and the Company's performance. The Company believes that the goals of the Plan are met by providing
competitive compensation that will motivate and retain key employees.
Total compensation for all executive officers is established within the range of salaries and bonuses for persons holding
similar positions at other comparably-sized manufacturing companies, utilizing independent salary survey data. The survey data
is a composite of all manufacturing companies that are comparably sized based upon sales volume. The independent survey does
not provide a detailed list of all participating companies; however, many of the participating companies are listed, some of
which are included in the Performance Graph. In general, the total compensation for all executive officers is expected to be
slightly below the median for similar positions compared to the independent survey data. This is accomplished by establishing
the annual base portion of compensation at the low end of the survey with the potential incentive portion being slightly above
the median. This results in a greater emphasis being placed upon individual performance and the Company's performance.
The total compensation individual officers may earn is subjective based upon the individual's position, experience, and ability
to affect the Company's performance. In establishing each officer's annual base and potential contingent portion of
compensation, additional consideration includes the individual's past performance, initiative and achievement, and future
potential, as well as the Company's performance.
The potential contingent compensation pool is based upon the sales and earnings performance of the Company and the relative
weights are 75% sales and 25% earnings. Compensation attributable to the sales component increases or decreases in relation to
sales. Compensation attributable to the earnings component increases if earnings exceed a percentage of shareholders' equity as
determined by the Board of Directors and decreases if earnings are less than such amount. Each individual executive officer's
participation in the potential contingent compensation pool is determined as described above and is assigned such that if the
Company achieves its sales and earnings objectives, the salary and contingent compensation combined will be competitive with the
industry and will remain consistent with the Company's philosophy and the Plan. The outcome of the Company's sales and earnings
for fiscal year 2001 resulted in actual bonuses equaling 30% to 45% of total compensation for the Named Executive Officers.
The factors considered in determining the compensation package for the Chief Executive Officer for fiscal year 2001 were the
same as those described above for executive officers. The total compensation for the Chief Executive Officer is considerably
below the median of comparably sized manufacturing companies. This median was obtained from independent salary survey data that
was utilized in the same manner for all executive officers. With 50% of the compensation at risk available in the form of
performance contingent compensation, the CEO's total compensation was competitive, reflected the increase in responsibilities
and experience, and reflective of the Company's performance. In fiscal year 2001, the CEO's contingent compensation decreased
10% as a result of the Company's performance in sales and earnings.
The Company also maintains stock option plans to provide additional incentives to executive officers and other employees to work
to maximize shareholder value. The Stock Option Committee has granted incentive options to purchase shares of Common Stock of
the Company (at the composite closing price of the Common Stock on the date of grant) and non-qualified options to purchase
shares of restricted stock (at 50% of the composite closing price of the Common Stock on the date of grant) to executive
officers and other employees. Grants were made in fiscal year 2001 to Named Executive Officers and other employees to continue
to encourage long-term growth and profitability. The number of options granted to each executive officer is subjective based
upon individual performance, future potential, and ability to affect the Company's performance.
The CEO received incentive stock options to purchase 26,000 shares of Common Stock, which represented 6.5% of the total shares
granted. The number of options granted was subjective based upon the CEO's ability to affect the Company's performance as well
as individual performance and future potential.
The Board of Directors, as a whole, and the Board's Executive Committee and Stock Option Committee, as appropriate, continually
review the executive compensation policies in regards to Section 162(m) of the Internal Revenue Code of 1986, as amended,
pertaining to the Company's $1,000,000 deductibility limitation for applicable compensation paid to Named Executive Officers.
In fiscal year 2001, the deductibility of the Company's executive compensation was not affected by the limitation under Section
162(m).
BOARD OF DIRECTORS
R. S. Boreham, Jr...................................Chairman
Jefferson W. Asher, Jr. Robert J. Messey
Merlin J. Augustine, Jr. Robert L. Proost
Richard E. Jaudes R. L. Qualls
John A. McFarland Barry K. Rogstad
Performance Graph
Comparison of Five-Year Cumulative Total Return
Among Baldor Electric Company, the S&P 500 Index, and the
Dow Jones Electrical Components & Equipment Group Index
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Baldor 100.00 119.43 113.46 103.96 124.30 125.18
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
S&P 500 100.00 133.36 171.48 207.56 188.66 169.53
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
DJ ELQ 100.00 113.58 127.12 187.34 126.42 89.23
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Assumes $100 invested at year-end 1996 in
Baldor Electric Company, the S&P 500 Index, and the
Dow Jones Electrical Components & Equipment Group Index
- -------------------------------------------------------------------------------------------------------------------------
Compound Annual Growth Rate
- -------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------- --------------------------------------- ---------------------------------------
Baldor $125 4.6%
- ----------------------------------------- --------------------------------------- ---------------------------------------
- ----------------------------------------- --------------------------------------- ---------------------------------------
S&P 500 $170 11.1%
- ----------------------------------------- --------------------------------------- ---------------------------------------
- ----------------------------------------- --------------------------------------- ---------------------------------------
DJ ELQ $89 -2.3%
- ----------------------------------------- --------------------------------------- ---------------------------------------
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of the Company oversees the Company's financial reporting process on behalf of the
Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including
the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the
audited financial statements in the Annual Report with management, including a discussion of the quality, not just the
acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the
financial statements. The Audit Committee makes the following statements:
o The Audit Committee is governed by a formal written charter (1);
o The Audit Committee is comprised of directors that the Company's Board of Directors has determined to be "independent of
management" (2);
o The Audit Committee has reviewed and discussed the annual audited financial statements with management;
o The Audit Committee has discussed with the independent auditors the matters required by Statement on Auditing Standards No.
61, Communications with Audit Committees;
o The Audit Committee has received from the independent auditors the required written communication and discussed with them
their independence as required by Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees;
o The Audit Committee has considered the compatibility of non-audit services with the auditors' independence; and
o The Audit Committee, based on the above reviews and discussions, recommended to the Board of Directors that the audited
financial statements be included in the Company's Annual Report on Form 10-K for filing with the Securities and Exchange
Commission.
____________
(1) There have been no amendments to the Company's Audit Committee Charter that was adopted by the Company's Board of
Directors on February 5, 2001, and included in the Company's Proxy Statement issued in March 2001.
(2) A detailed determination of member independency is included in this Proxy Statement under the sub-caption "Statement of
Director Independency".
AUDIT COMMITTEE
Jefferson W. Asher, Jr. ...............................................Chairman
Robert J. Messey Robert L. Proost
Statement of Director Independency
The Company's Board of Directors, as a whole, strongly believes that the Audit Committee and its function are extremely important
to the integrity of the Company. All members of this Committee are appointed, in substantial part, because they are financially
astute, having the experience, education, and ability to read and understand financial information and regulations. The
independence of each member of the Audit Committee is critically reviewed for the following requirements:
o There is not, and has not been in the last five years, any known family relationship between any member of the Audit
Committee and any other member of the Board of Directors or any employee of the Company.
o No member of the Audit Committee accepts compensation from the Company other than for board service and committee membership
service.
o Members of the Audit Committee are appointed because of their qualifications of being "financially literate" and
knowledgeable of securities regulations.
The Company's Board of Directors has paid close attention to the independency of the members of the Company's Audit Committee.
Based on the factors mentioned above, it is the opinion of the Board of Directors, as a whole, that each member of the Audit
Committee has no relationship which would interfere with the exercise of independent judgment as an Audit Committee member,
provides services and qualifications that are in the best interests of the Company and its shareholders, and is "independent of
management" so that the member's participation on the Company's Audit Committee does not violate para. 3.03 of the Listed Company
Manual of the New York Stock Exchange.
BOARD OF DIRECTORS
R. S. Boreham, Jr............................................Chairman
Jefferson W. Asher, Jr. Robert J. Messey
Merlin J. Augustine, Jr. Robert L. Proost
Richard E. Jaudes R. L. Qualls
John A. McFarland Barry K. Rogstad
INDEPENDENT AUDITORS
The Company is presently utilizing the services of Ernst & Young LLP, which has been the Company's independent auditor and
principal accountant since 1972. The Audit Committee and the Board of Directors will consider the reappointment of Ernst & Young
LLP as the Company's independent auditors and principal accountant for the fiscal year ending December 28, 2002, at the Company's
next regular Board of Directors meeting in April. The Company has no reason to believe that Ernst & Young LLP will not be
reappointed; however, no final determination has yet been made by the Board of Directors. Representatives of Ernst & Young LLP
will be present at the Annual Meeting with an opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions. A summary of the fees associated with the services performed by Ernst & Young LLP for fiscal
year 2001 follows. All "other" fees primarily relate to audit related services, tax return compilations, and tax consultations.
Type of Fee Amount of Fee
- -------------------------------------------------------------------------------- ---------------------
- -------------------------------------------------------------------------------- ---------------------
Audit $150,000
Other $115,536
Consulting (other than accounting and tax related) $0
Financial information systems design and implementation $0
SHAREHOLDER PROPOSALS and NOMINATION DEADLINES
Any shareholder of the Company eligible to vote in an election may make shareholder proposals and nominations for the 2003 Annual
Meeting. In order to be considered for inclusion in the 2003 Proxy Statement and considered at the Annual Meeting to be held in
2003, all shareholder proposals, nominations, and notifications must: (1) comply with the Company's Bylaws, as amended, and (2) be
appropriately received by the Secretary of the Company on or after September 16, 2002, and on or before November 15, 2002. The
Nominating Committee of the Company's Board of Directors will consider candidates for Board membership proposed by shareholders
who have complied with these procedures.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented for consideration at the meeting by the Board of Directors or by
shareholders who have requested inclusion of proposals in the Proxy Statement. If any other matter shall properly come before the
meeting, the persons named in the accompanying form of proxy intend to vote on such matters in accordance with their judgment.
March 15, 2002
FRONT OF DIRECTION CARD
[ LOGO ]
PROFIT SHARING AND SAVINGS PLAN PROFIT SHARING AND SAVINGS PLAN
BALDOR ELECTRIC COMPANY
Annual Meeting of Shareholders on April 20, 2002
The undersigned, a participant in the Baldor Electric Company Profit Sharing and Savings Plan (the "Plan"), hereby
directs Wachovia Bank of North Carolina, N.A., as Trustee (the "Trustee") of the Plan Trust (the "Trust"), at the Annual
Meeting of Shareholders of Baldor Electric Company, to be held in the Breedlove Auditorium on the campus of the
University of Arkansas - Fort Smith located at 5210 Grand Avenue, Fort Smith, Arkansas, on Saturday, April 20, 2002, at
10:30 a.m., local time, and all adjournments thereof, to vote, as indicated on the reverse side of this direction card,
the shares of Common Stock of Baldor Electric Company which the undersigned is entitled to vote with all the powers the
undersigned would possess if present at the meeting.
This direction card, when properly executed, will be voted in the manner directed herein by the undersigned participant.
As Trustee, you are authorized to vote the shares of the undersigned upon such other business as may properly come before
the meeting and all adjournments thereof.
If no direction is made, voting will be controlled by the terms of the Plan and the Trust.
In order for the Trustee to vote the shares of the Plan, your voting direction must be received
no later than 12:00 noon, local time, on April 18, 2002.
PLEASE VOTE YOUR SHARES PROMPTLY USING THE INTERNET, MAIL, OR TELEPHONE.
ADDRESS CHANGES OR COMMENTS? _________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FOLD AND DETACH HERE
Wachovia Bank of North Carolina, N.A. is the trustee for the
Baldor Electric Company Profit Sharing and Savings Plan.
Access to your Baldor investment elections
is available on the Internet at
www.wachoviaretirement.com
To access this service, visit the website above.
You will be asked for your Social Security Number and your 4 digit Personal Identification Number (PIN).
If you do not know your PIN, you should call Wachovia at 888-367-7526 as soon as possible to request a new PIN.
Wachovia will mail a new PIN directly to your home.
BACK OF DIRECTION CARD
Proxy by Mail Please mark your votes like this [ X ]
BALDOR ELECTRIC COMPANY PROFIT SHARING AND SAVINGS PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR":
1. Election of Directors For All Nominees Withhold For All Except
[ ] [ ] [ ]
Nominees: Jefferson W. Asher, Jr.
Richard E. Jaudes To withhold authority to vote for any nominee listed above,
Robert J. Messey mark the "For All Except" box and write the name(s) of the
nominee(s)from whom you wish to withhold authority to vote
in the space provided below.
___________________________________________________
Mark the box to the right if you plan to attend the Annual Meeting on April 20, 2002. [ ]
IF YOU WISH TO VOTE ELECTRONICALLY, COMPANY NUMBER:
PLEASE READ THE INSTRUCTIONS BELOW. PROXY NUMBER:
ACCOUNT NUMBER:
Please be sure to sign and date this Direction Card.
Signature __________________________________ Signature ___________________________________ Date ___________________
Please sign exactly as your name(s) appear(s) hereon. When signing as Attorney, Executor, Trustee, Guardian, or Officer
of a Corporation, please give title as such. For joint accounts, all named holders should sign. If you receive more
than one direction card, please follow the instructions indicated on each card.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FOLD AND DETACH HERE
VOTE BY TELEPHONE OR INTERNET
[ TELEPHONE GRAPHIC ] [ COMPUTER GRAPHIC ]
QUICK * * * EASY * * * IMMEDIATE
BALDOR ELECTRIC COMPANY
o You can vote your shares electronically through the Internet or the telephone.
o Voting electronically eliminates the need to return the direction card.
o Your electronic vote authorizes the named proxies to vote your shares in the same manner as if you had marked,
signed, dated, and returned the direction card.
TO VOTE YOUR PROXY BY INTERNET www.continentalstock.com
Have your direction card in hand when you access the above website. Select "ContinentaLink Proxy Voting". You will be
prompted to enter the company number, proxy number, and account number to create an electronic ballot. Follow the
prompts to vote your shares.
TO VOTE YOUR PROXY BY MAIL
Mark, sign, and date your direction card above, detach it, and return it in the postage-paid envelope provided.
TO VOTE YOUR PROXY BY PHONE 1-800-293-8533
Use any touch-tone telephone to vote your proxy. Have your direction card in hand when you call. You will be prompted
to enter the company number, proxy number, and account number. Follow the voting instructions to vote your shares.
PLEASE DO NOT RETURN THE ABOVE CARD IF YOU VOTED ELECTRONICALLY.
FRONT OF PROXY CARD
[ LOGO ]
COMMON STOCK COMMON STOCK
BALDOR ELECTRIC COMPANY
Proxy Solicited on Behalf of the Board of Directors
for Annual Meeting of Shareholders on April 20, 2002
The undersigned hereby appoints R. S. Boreham, Jr. and John A. McFarland, and each of them, with power of substitution, as proxies
of the undersigned, to attend the Annual Meeting of Shareholders of Baldor Electric Company, to be held in the Breedlove
Auditorium on the campus of the University of Arkansas - Fort Smith located at 5210 Grand Avenue, Fort Smith, Arkansas, on
Saturday, April 20, 2002, at 10:30 a.m., local time, and all adjournments thereof, and there to vote, as indicated on the reverse
side of this proxy card, the shares of Common Stock of Baldor Electric Company which the undersigned is entitled to vote with all
the powers the undersigned would possess if present at the meeting.
This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder. In their
discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting and all
adjournments thereof.
If no direction is made, this proxy will be voted FOR the election of directors.
PLEASE VOTE YOUR SHARES PROMPTLY USING THE INTERNET, MAIL, OR TELEPHONE.
ADDRESS CHANGES OR COMMENTS? _________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FOLD AND DETACH HERE
Continental Stock Transfer & Trust Company
is the transfer agent for Baldor Electric Company.
Access to your Baldor shareholder account information and
other shareholder services are available on the Internet at
www.continentalstock.com
To access this service, visit the website above.
You will be asked for your 4 digit Personal Identification Number (PIN).
If you do not know your PIN, or need assistance with Internet access or any other shareholder service,
please contact Continental at 1-800-509-5586.
BACK OF PROXY CARD
Proxy by Mail Please mark your votes like this [
X ]
BALDOR ELECTRIC COMPANY COMMON STOCK
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR":
1. Election of Directors For All Nominees Withhold For All Except
[ ] [ ] [ ]
Nominees: Jefferson W. Asher, Jr.
Richard E. Jaudes To withhold authority to vote for any nominee listed, mark the
Robert J. Messey "For All Except" box and write the name(s) of the nominee(s)
from whom you wish to withhold authority to vote in the space
provided below.
___________________________________________________
Mark the box to the right if you plan to attend the Annual Meeting on April 20, 2002. [ ]
IF YOU WISH TO VOTE ELECTRONICALLY, COMPANY NUMBER:
PLEASE READ THE INSTRUCTIONS BELOW. PROXY NUMBER:
ACCOUNT NUMBER:
Please be sure to sign and date this Proxy Card.
Signature __________________________________ Signature ___________________________________ Date ___________________
Please sign exactly as your name(s) appear(s) hereon. When signing as Attorney, Executor, Trustee, Guardian, or Officer of a
Corporation, please give title as such. For joint accounts, all named holders should sign. If you receive more than one proxy
card, please follow the instructions indicated on each card.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FOLD AND DETACH HERE
VOTE BY TELEPHONE OR INTERNET
[ TELEPHONE GRAPHIC ] [ COMPUTER GRAPHIC ]
QUICK * * * EASY * * * IMMEDIATE
BALDOR ELECTRIC COMPANY
o You can vote your shares electronically through the Internet or the telephone.
o Voting through the Internet or by telephone eliminates the need to return the proxy card.
o Your electronic vote authorizes the named proxies to vote your shares in the same manner as if you had marked, signed, dated,
and returned the proxy card.
TO VOTE YOUR PROXY BY INTERNET www.continentalstock.com
Have your proxy card in hand when you access the above website. Select "ContinentaLink Proxy Voting". You will be prompted to
enter the company number, proxy number, and account number to create an electronic ballot. Follow the prompts to vote your shares.
TO VOTE YOUR PROXY BY MAIL
Mark, sign, and date your proxy card above, detach it, and return it in the postage-paid envelope provided.
TO VOTE YOUR PROXY BY TELEPHONE 1-800-293-8533
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. You will be prompted to enter the
company number, proxy number, and account number. Follow the voting instructions to vote your shares.
PLEASE DO NOT RETURN THE ABOVE CARD IF YOU VOTED ELECTRONICALLY.
