SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
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Check the appropriate box:
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[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14
Ladish Co., Inc.
(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.
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1. Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
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4. Date Filed:
Ladish Co., Inc.
5481 South Packard Avenue
Cudahy, Wisconsin 53110
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Stockholders:
An Annual Meeting of Stockholders of Ladish Co., Inc., a Wisconsin
corporation (the "Company"), will be held in the Creole Meeting Room of the Four
Points Hotel Sheraton Milwaukee Airport located at 4747 South Howell Avenue,
Milwaukee, Wisconsin on Tuesday, April 3, 2001 at 10:00 a.m. Central Daylight
Time, for the following purposes:
(1) To elect five (5) Directors, to serve for the term of one year or
until their successors have been elected and have duly qualified.
(2) To authorize the amendment of the Company's 1996 Long-Term
Incentive Plan (the "Plan") whereby an additional one hundred fifty
thousand (150,000) shares of authorized but unissued shares of common stock
of the Company will be added to the Plan for awards pursuant to the Plan.
The exercise price and the vesting period for each award shall be
determined by the Compensation and Stock Option Committee of the Board of
Directors.
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only Stockholders of record at the close of business on February 16, 2001
will be entitled to notice of and to vote at the 2001 Annual Meeting or any
adjournment thereof, notwithstanding the transfer of any stock on the books of
the Company after such record date.
A Proxy Statement and proxy card accompany this Notice of Annual Meeting of
Stockholders.
Wayne E. Larsen
Secretary
Cudahy, Wisconsin
February 16, 2001
Ladish Co., Inc.
5481 South Packard Avenue
Cudahy, Wisconsin 53110
PROXY STATEMENT
For
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 3, 2001
This Proxy Statement is furnished to the stockholders of Ladish Co., Inc.
(the "Company") in connection with the solicitation of proxies by the Board of
Directors of the Company to be voted at the Annual Meeting of Stockholders of
the Company to be held at the Four Points Hotel Sheraton Milwaukee Airport,
Creole Meeting Room, 4747 South Howell Avenue, Milwaukee, Wisconsin on Tuesday,
April 3, 2001 at 10:00 a.m., Central Daylight Time (the "2001 Annual Meeting"),
or at any adjournment thereof, for the purposes set forth in the accompanying
Notice of Annual Meeting of Stockholders.
This Proxy Statement and the enclosed form of proxy are being mailed to
stockholders on or about March 3, 2001.
RIGHT TO REVOKE PROXY
Any stockholder giving the proxy enclosed with this Proxy Statement has the
power to revoke such proxy at any time prior to the exercise thereof by filing
with the Company a written revocation at or prior to the 2001 Annual Meeting, by
executing a proxy bearing a later date or by attending the 2001 Annual Meeting
and voting in person the shares of stock that such stockholder is entitled to
vote. Unless the persons named in the proxy are prevented from acting by
circumstances beyond their control, the proxy will be voted at the 2001 Annual
Meeting and at any adjournment thereof in the manner specified therein, or if
not specified, the proxy will be voted:
(1) FOR the election of the five (5) nominees listed under "Election of
Directors" as nominees of the Company for election as directors to hold office
until the next Annual Meeting of Stockholders or until their successors are
elected and qualified;
(2) FOR the amendment of the Company's 1996 Long-Term Incentive Plan (the
"Plan") whereby an additional one hundred fifty thousand (150,000) shares of
authorized but unissued shares of common stock of the Company will be added to
the Plan for awards pursuant to the Plan. The exercise price and the vesting
period for each award shall be determined by the Compensation and Stock Option
Committee of the Board of Directors.
(3) At the discretion of the persons named in the enclosed form of proxy,
on any other matter that may properly come before the 2001 Annual Meeting or any
adjournment thereof.
BY WHOM AND THE MANNER IN WHICH PROXY IS BEING SOLICITED
The enclosed proxy is solicited by and on behalf of the Board of Directors
of the Company. The expense of the solicitation of proxies for the 2001 Annual
Meeting, including the cost of mailing, will be borne by the Company. To the
extent necessary to assure sufficient representation at the 2001 Annual Meeting,
officers and regular employees of the Company, at no additional compensation,
may request the return of proxies personally, by telephone, facsimile, mail, or
other method. The extent to which this will be necessary depends entirely upon
how promptly proxies are received. Stockholders are urged to send in their
proxies without delay. The Company will supply brokers, nominees, fiduciaries
and other custodians with proxy materials to forward to beneficial owners of
shares in connection with the request from the beneficial owners of authority to
execute such proxies, and the Company will reimburse such brokers, nominees,
fiduciaries and other custodians for their expenses in making such distribution.
Management has no knowledge or information that any other person will
specifically engage any persons to solicit proxies.
1
VOTING SECURITIES AND STOCKHOLDERS
The outstanding voting securities of the Company consist entirely of shares
of Common Stock, $0.01 par value per share, each share of which entitles the
holder thereof to one vote. The record date for the determination of the
stockholders entitled to notice of and to vote at the 2001 Annual Meeting, or
any adjournment thereof, has been established by the Board of Directors as the
close of business on February 16, 2001. At that date, there were outstanding and
entitled to vote 12,912,477 shares of Common Stock.
The presence, in person or by proxy, of the holders of record of a majority
of the outstanding shares of Common Stock entitled to vote is necessary to
constitute a quorum for the transaction of business at the 2001 Annual Meeting,
but if a quorum should not be present, the meeting may be adjourned from time to
time until a quorum is obtained. A holder of Common Stock will be entitled to
one vote per share on each matter properly brought before the meeting.
Cumulative voting is not permitted in the election of directors.
The proxy card provides space for a stockholder to withhold voting for any
nominee for the Board of Directors or to abstain from voting for any other
proposal if the stockholder chooses to do so. Under Wisconsin law, directors are
elected by a plurality of the votes cast at the meeting. Each other matter to be
submitted to the stockholders requires the affirmative vote of a majority of the
votes cast at the meeting. For purposes of determining the number of votes cast
with respect to any voting matter, only those cast "for" or "against" are
included. Abstentions and broker non-votes are counted only for purposes of
determining whether a quorum is present at the meeting.
As of February 14, 2001, no person was known by the Company to own
beneficially more than five percent (5%) of the outstanding shares of Common
Stock of the Company, except as shown in the following table:
Number of Shares
Name and Address Beneficially Owned Percent
Of Beneficial Owner At February 14, 2001 Of Class
------------------- -------------------- --------
Grace Brothers Ltd.1 3,806,773 29.5%
1650 Sherman Avenue, Suite 900
Evanston, Illinois 60201
Dimensional Fund Advisors Inc. 1 1,073,900 8.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
State Street Research & Management
Company1 1,019,827 7.9%
1 Financial Center, 30th Floor
Boston, Massachusetts 02111
- -------------
1 Information regarding Grace Brothers Ltd., Dimensional Fund Advisors Inc. and
their beneficial ownership of the Company's shares was obtained from the Form 4
of Grace Brothers Ltd. dated February 1, 2000, the Schedule 13G of Dimensional
Fund Advisors Inc. dated February 2, 2001 and the Schedule 13G of State Street
Research & Management Company dated February 14, 2001.
2
The following table shows the number of shares of Common Stock
beneficially owned by each director or nominee, by the executive officers named
below in the Summary Compensation Table and by all directors, nominees and
executive officers as a group, based upon information supplied by them:
Number of Shares
Beneficially Owned Percent
Name At February 14, 2001 1 Of Class
- ---- --------------------- --------
Lawrence W. Bianchi 5,000 *
Charles W. Finkl 51,000 *
Wayne E. Larsen 97,500 *
Robert J. Noel 81,436 *
Robert W. Sullivan 15,083 *
Randy B. Turner 6,500 *
Gary J. Vroman 87,500 *
Kerry L. Woody 178,167 1.4%
Directors and Executive Officers
as a Group (13 persons) 676,603 5.2%
* Less than one percent (1%)
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1 Unless otherwise noted, all shares are owned directly and the owner has the
right to vote the shares, except for shares that officers and directors have the
right to acquire under the Company's stock option plans as of the record date or
within sixty (60) days thereafter, which for Messrs. Woody, Larsen, Noel, Vroman
and Turner are 178,167, 95,500, 77,500, 77,500 and 6,500 shares, respectively.
Kerry L. Woody, 49. Director since 1997. Mr. Woody has been President since
1995 and was appointed Chief Executive Officer of the Company in 1998. Prior to
that time he was Vice President-Operations, Vice President-Manufacturing
Services and Production Manager. He joined the Company in 1975. In addition, Mr.
Woody serves as a Director of Vilter Manufacturing Co. and Milwaukee Lutheran
College. Mr. Woody has a B.S. in Engineering from Milliken University.
Wayne E. Larsen, 46. Director since 1997. Since 1995 Mr. Larsen has been
Vice President Law/Finance and Secretary of the Company. He served as General
Counsel and Secretary from 1989 after joining the Company as corporate counsel
in 1981. Mr. Larsen is a Trustee of the Ladish Co. Foundation and a Director of
the Wisconsin Foundation for Independent Colleges. Mr. Larsen has a B.A. from
Marquette University and a J.D. from Marquette Law School.
Gene E. Bunge, 55. Mr. Bunge has served as Vice President, Engineering
since November 1991. From 1985 until that time he was General Manager of
Engineering. Mr. Bunge has been with the Company since 1973. He has a B.S.E.E.
from the Milwaukee School of Engineering.
Robert J. Noel, 60. Mr. Noel has served as Vice President Corporate
Business Development/ Technology since September 1999. Mr. Noel had been Vice
President, Quality and Technology since March 1991. He had been Manager of
Metallurgy since 1985 and prior to that period was a Product Metallurgist for
jet engine components. Mr. Noel has been with the Company since 1963. He has a
B.S. in Mechanical Engineering from Marquette University.
David L. Provan, 51. Mr. Provan has served as Vice President, Materials
Management since September 1999. Prior to that time he had been Purchasing
Manager, Raw Materials, and Head Buyer. Mr. Provan has been with the Company
since 1979. He has a Bachelor's Degree in Business Administration from the
University of Wisconsin-Parkside.
Gary J. Vroman, 41. Mr. Vroman has served as Vice President, Sales and
Marketing since December 1995. From January 1994 to December 1995 he was General
Manager of Sales. Prior to that period he had been the Product Manager for jet
engine components. Mr. Vroman has been with the Company since 1982. He has a
B.S. in Engineering from the University of Illinois and a M.S. in Engineering
Management from the Milwaukee School of Engineering.
3
Lawrence C. Hammond, 53. Mr. Hammond has served as Vice President, Human
Resources since January 1994. Prior to that time he had served as Director of
Industrial Relations at the Company and he had been Labor Counsel at the
Company. Mr. Hammond has been with the Company since 1980. He has a B.A. and a
Masters in Industrial Relations from Michigan State University and a J.D. from
the Detroit College of Law.
George Groppi, 52. Mr. Groppi has served as Vice President Quality and
Metallurgy since September 1999. He was named Manager of Product Metallurgy in
1992. In 1994 he was appointed Manager of Production Control and recently
assumed the position of Manager of Quality & Metallurgy. Mr. Groppi has been
with the Company since 1969. He holds a B.S. in Mechanical Engineering from
Marquette University.
Randy B. Turner, 51. Mr. Turner has served as President of Pacific Cast
Technologies, Inc. ("PCT") since it was acquired by the Company in January 2000.
Prior to joining the Company, Mr. Turner served as President of the corporate
predecessor to PCT. He has a B.S. in Business Management from Lewis and Clark
College.
William J. Lazzari, 51. Mr. Lazzari has been President of Stowe Machine
Co., Inc. ("Stowe") since 2000. He was General Manager at Stowe for over four
years prior to becoming President. He holds a B.S. in Marketing from the
University of Hartford.
ITEM 1 - ELECTION OF DIRECTORS
At the 2001 Annual Meeting, five (5) directors are to be elected who shall
hold office until the next Annual Meeting of Stockholders or until their
respective successors are duly elected and qualified. It is the intention of the
persons named in the Company's proxy to vote for the election of each of the
five (5) nominees listed below, unless authority is withheld. All nominees have
indicated a willingness to serve as directors, but if any of them should decline
or be unable to serve as a director, the persons named in the proxy will vote
for the election of another person recommended by the Board of Directors.
The Board of Directors recommends you vote FOR the election of each of the
five (5) nominees to the Board of Directors set forth below.
Nominees
- --------------------------------------------------------------------------------
Lawrence W. Bianchi, 60. Director since 1998. Mr. Bianchi in 1993 retired as the
Managing Partner of the Milwaukee, Wisconsin office of KPMG Peat Marwick. From
1994 to 1998 Mr. Bianchi served as CFO of the law firm of Foley & Lardner. Mr.
Bianchi's principal occupation is investments.
- --------------------------------------------------------------------------------
Charles W. Finkl, 80. Director since 1998. Mr. Finkl is a Director and the
Chairman and Chief Executive Officer of A. Finkl & Sons, Co., a Chicago,
Illinois based metals processor, a position he has held for more than ten years.
- --------------------------------------------------------------------------------
Wayne E. Larsen, 46. Director since 1997. Since 1995 Mr. Larsen has been Vice
President Law/Finance and Secretary of the Company. He served as General Counsel
and Secretary from 1989 after joining the Company as corporate counsel in 1981.
Mr. Larsen is a Trustee of the Ladish Co. Foundation and a Director of the
Wisconsin Foundation for Independent Colleges.
- --------------------------------------------------------------------------------
Robert W. Sullivan, 42. Director since 1993. Mr. Sullivan is President of The
Plitt Company, a seafood distribution concern. Mr. Sullivan had been President
of The Martec Group, a sales and marketing consulting group for more than five
years.
- --------------------------------------------------------------------------------
Kerry L. Woody, 49. Director since 1997. Mr. Woody has been President since 1995
and was appointed Chief Executive Officer of the Company in 1998. Prior to that
time he was Vice President-Operations, Vice President-Manufacturing Services and
Production Manager. He joined the Company in 1975. Mr. Woody is also a Director
of Vilter Manufacturing Co. and a Director of Wisconsin Lutheran College.
- --------------------------------------------------------------------------------
4
BOARD MEETINGS AND COMMITTEES
The directors hold regular quarterly meetings, in addition to the meeting
immediately following the Annual Meeting of Stockholders, attend special
meetings, as required, and spend such time on the affairs of the Company as
their duties require. During the fiscal year ended December 31, 2000, the Board
of Directors held eleven (11) meetings. All directors of the Company attended at
least seventy-five percent (75%) of the meetings of the Board of Directors and
the committees on which they served during the fiscal year ended December 31,
2000. During the fiscal year ended December 31, 2000, there were only two
committees, those being an Audit Committee and a Compensation and Stock Option
Committee
AUDIT COMMITTEE
The members of the Audit Committee are Lawrence W. Bianchi, Wayne E. Larsen
and Robert W. Sullivan. The Audit Committee is responsible for recommending
annually a firm of independent certified public accountants to serve as the
Company's auditors, to meet with and review reports of the Company's auditors
and the fees payable to them. The independence of the public accountants
auditing the Company's financial statements is one of the factors evaluated by
the Audit Committee when recommending auditors. During fiscal year 2000, the
Company's auditors, Arthur Andersen LLP, provided audit services and other
consulting assistance for fees of $92,000 and $33,850, respectively. The Audit
Committee assessed the provision of non-audit services in determining the
Company's auditors, Arthur Andersen LLP, to be independent. In addition, the
Audit Committee provides oversight to the total financial status of the Company
as well as assisting the Company with assessments of pension-asset performance
and investment criteria. The Audit Committee met twice in 2000 for these
purposes. The Audit Committee Charter, as adopted on November 29, 1999, is
attached as Exhibit "A" to this Proxy Statement.
COMPENSATION AND STOCK OPTION COMMITTEE REPORT
The members of the Compensation and Stock Option Committee are Lawrence W.
Bianchi, Kerry L. Woody and Charles W. Finkl. The Compensation and Stock Option
Committee is responsible for (i) setting the overall policy of the Company's
executive compensation program; (ii) establishing the base salary level for the
executive officers; (iii) reviewing and approving the annual incentive program
for the Company executives; and (iv) functions as the administrator of the
Company's 1996 Long Term Incentive Plan. The Compensation and Stock Option
Committee met three (3) times in 2000. The Company's executive compensation
program is designed to be closely linked to corporate performance and returns to
stockholders. To this end, the Company has developed an overall compensation
strategy and specific compensation plan that tie a very significant portion of
executive compensation to the Company's success in meeting specified performance
goals. The primary criteria used by the Compensation and Stock Option Committee
in assessing the performance of the Company's Chief Executive Officer are the
results of the Company as measured by its earnings before interest, taxes,
depreciation and amortization ("EBITDA"). By monitoring the EBITDA of the
Company, both as an overall result and as a percentage of net sales, the
Compensation and Stock Option Committee determines whether the Chief Executive
Officer is achieving their expectations. In addition, the Compensation and Stock
Option Committee also assess the accomplishments of the Chief Executive Officer
and the other executive officers with respect to activities such as
acquisitions, divestitures and the raising of capital for the business. In 2000,
sales and net income at the Company were 35% and 76%, respectively, more than
1999. EBITDA as a percentage of net sales increased to 16.1% from 14.3% in 1999.
Based upon the accomplishments in 2000 as well as the acquisition and
integration of PCT, the Chief Executive Officer had his incentive compensation
for 2000 increased by 38.6% from the level in 1999.
In addition, through the use of stock options, the Company ensures that a
part of the executives' compensation is closely tied to appreciation in the
Company's stock price. The overall objectives of this strategy are to attract
and retain the best possible executive talent, to motivate these executives to
achieve the goals inherent in the Company's business strategy, to link executive
and stockholder interests through equity based plans and, finally, to provide a
compensation package that recognizes individual contributions as well as overall
business results. In 2000, Mr. Turner was the only Company executive to be
awarded stock options.
5
The Compensation and Stock Option Committee regularly reports their actions
and recommendations to the full Board of Directors. In 2000, none of the actions
or recommendations of the Compensation and Stock Option Committee were modified
or rejected by the Board of Directors.
By the Compensation and Stock Option Committee
Lawrence W. Bianchi
Kerry L. Woody
Charles W. Finkl
COMPENSATION OF DIRECTORS
Non-employee directors receive an annual fee of twenty thousand dollars
($20,000.00) which is payable quarterly. In addition, directors who are not
officers or employees of the Company receive a fee of one thousand dollars
($1,000.00) for each Board meeting personally attended.
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth information for the Company's fiscal years
ended December 31, 2000, 1999 and 1998, with regard to the compensation for
their services to the Company of the Chief Executive Officer and each of the
other four (4) most highly compensated executive officers serving the Company at
the close of the Company's most recently completed fiscal year.
- ----------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- ----------------------------------------------------------------------------------------------------------------------
Long Term
Annual Compensation1 Compensation
Name and Restricted Stock All Other
Principal Position Year Other Annual Stock Option Compen-
Salary Bonus2 Compen- Awards Awards sation4
ation3 (Shares) (Shares)
- --------------------------------------------------------------------------------------------------------------------------
Kerry L. Woody 2000 $286,102 $159,350 $774 -- -- $5,020
President & Chief Executive Officer 1999 $285,005 $115,000 $2,592 -- -- $5,076
1998 $274,179 $103,455 $2,280 -- 100,000 $5,738
- --------------------------------------------------------------------------------------------------------------------------
Wayne E. Larsen 2000 $180,097 $91,800 $774 -- -- $3,549
Vice President Law/Finance & Secretary 1999 $180,004 $60,000 $2,592 -- -- $3,023
1998 $171,556 $49,158 $2,280 -- 60,000 $3,993
- --------------------------------------------------------------------------------------------------------------------------
Randy B. Turner5 2000 $155,226 $120,680 -- -- 6,500 --
President - Pacific Cast Technologies, 1999 -- -- -- -- -- --
Inc. 1998 -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------
Robert J. Noel 2000 $140,542 $40,600 $2,304 -- -- $8,566
Vice President - Corporate Business 1999 $140,004 $20,000 $2,592 -- -- $4,000
Development/ Technology 1998 $145,927 $23,800 $2,280 -- 40,000 $4,508
- --------------------------------------------------------------------------------------------------------------------------
Gary J. Vroman 2000 $140,542 $42,000 $468 -- -- $4,811
Vice President - Sales & Marketing 1999 $132,308 $23,000 $2,592 -- -- $3,990
1998 $135,500 $26,100 $2,280 -- 40,000 $4,788
- --------------------------------------------------------------------------------------------------------------------------
- ---------------
1 Annual Compensation includes those amounts the executive officers may defer under the 401(k) Plans of the Company
and its subsidiaries as well as amounts the executive officers may defer under the Company's Elective Deferred
Compensation Plan (the "EDC Plan"). Participants in the EDC Plan may elect to defer salary and/or bonus on an
unsecured basis and may select any of eight investment options.
2 An incentive bonus is paid only upon the achievement of a predetermined financial objective set each year by the
Board of Directors' Compensation Committee at the beginning of the fiscal year.
3 Other annual compensation includes supplemental life insurance provided to the above listed executives.
4 All other compensation consists principally of automobile allowances.
5 Mr. Turner joined the Company in January of 2000 following the acquisition of PCT.
6
PENSION BENEFITS
Defined Benefit Plan. The Ladish Co., Inc. Salaried Pension Plan (the
"Pension Plan") is a "defined benefit" pension plan generally covering salaried,
non-union employees of the Company who are not covered by any other defined
benefit plan to which the Company makes contributions pursuant to a collective
bargaining agreement.
Upon reaching normal retirement at or after age 65, a participant is
generally entitled to receive an annual retirement benefit for life. The Pension
Plan provides alternative actuarially equivalent forms of benefit payment.
Vesting under the Pension Plan occurs after five years of continued service.
The monthly retirement benefit at the normal retirement age of at least 65
is determined pursuant to a formula as follows: 1.25% of the average base salary
(exclusive of bonuses or other incentive or special compensation) of the
individual during the consecutive five year period of service within the ten
years preceding termination of employment (or after age 45, if longer) that
his/her earnings were highest is multiplied by the number of years of Benefit
Service (as defined). Monthly normal retirement benefits are payable on a
straight life annuity basis and such amounts are not subject to any deduction
for Social Security or other offset amounts.
The following table sets forth the annual benefits payable to a participant
who qualified for normal retirement in 2000, with the specified highest average
earnings during the consecutive five year period of service within the ten years
prior to retirement and the specified years of Benefit Service:
- --------------------------------------------------------------------------------
Average Annual Earnings Years of Benefit Service
for Highest 5-Year Period
Within the 10-Years
Preceding Retirement 10 15 20 25 30 40
- --------------------------------------------------------------------------------
$50,000 $6,250 $9,375 $12,500 $15,625 $18,750 $ 25,000
$95,000 $11,875 $17,813 $23,750 $29,688 $35,625 $ 47,500
$100,000 $12,500 $18,750 $25,000 $31,250 $37,500 $ 50,000
$150,000 $18,750 $28,125 $37,500 $46,875 $56,250 $ 75,000
$200,000 $25,000 $37,500 $50,000 $62,500 $75,000 $100,000
$250,000 $31,250 $46,875 $62,500 $78,125 $93,750 $125,000
- --------------------------------------------------------------------------------
The years of Benefit Service for Messrs. Woody, Larsen, Noel and Vroman as
of January 1, 2001 were 26, 20, 38 and 19, respectively.
Deferred Compensation Agreements. The Company has entered into deferred
compensation agreements (the "Agreements") with nine current officers of the
Company, including Messrs. Woody, Larsen, Noel and Vroman. Each employee covered
by the Agreements (an "Employee"), upon full vesting, is entitled to receive
supplemental disability or retirement benefits; provided that in no event may a
person's total retirement benefits under the Agreements exceed 60% of the
monthly average base salary (inclusive of bonuses or other compensation) during
the five calendar years immediately preceding retirement.
The retirement benefit at the normal retirement age of at least 62 is
determined pursuant to a formula as follows: 60% of the monthly average of the
Employee's base salary plus any incentive compensation which does not exceed
twenty percent of the base salary during the five calendar years of highest
compensation over ten years immediately preceding retirement multiplied by years
of service, up to 15, and divided by 15. If an Employee suffers a disability (as
defined), he is entitled to benefits paid under the same formula as in the
preceding sentence (with his years of service calculated as if he had retired at
age 62), reduced by other disability benefits paid by the Company or through
workers' compensation (unless he is receiving fixed statutory payments for
certain bodily injuries).
7
Any amount to be paid under the Agreement shall be reduced by any benefit
paid to an Employee or his beneficiary pursuant to the Pension Plan.
Defined Contribution Plan. The Ladish Co., Inc. Savings and Deferral
Investment Plan ("SDIP"), which has been qualified under section 401(k) of the
Internal Revenue Code, provides that salaried, non-union employees with six
months' service may contribute 1% to 20% of their annual base salary to SDIP and
the Company will provide a matching contribution in an amount to be determined
by the Board of Directors of the Company. Employees' contributions of 1% to 20%
can be "before tax" contributions, "after tax" contributions or a combination of
both. The employees' contributions and the matching Company contribution may be
placed by the employee in a fixed income fund, an equity investment fund or
various combinations of each.
Elective Deferred Compensation Plan. The EDC Plan was approved by the Board
of Directors during 2000 and became effective during the Fourth Quarter of 2000.
Participants in the EDC Plan may elect to defer salary and/or bonus on an
unsecured basis and may select any of eight investment options.
Total Shareholder Return
The following graph compares the period percentage change in Ladish's
cumulative total shareholder return on its common stock, assuming dividend
reinvestment, with the cumulative total return of (i) the Russell 2000 Small Cap
Index, and (ii) a peer group from the Company's industry, for the period of
March 9 1998 to December 31, 2000. Ladish's use of less than a five-year period
reflects the effective date of the registration of its common stock under
Section 12 of the Exchange Act.
[GRAPHIC OMITTED]
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Mar-9-98 Dec-31-98 Dec-31-99 Dec-31-00
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Ladish 100 58.8 47.2 74.1
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Russell 2000 100 91.5 109.5 104.9
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Industry Peers 100 55.8 28.6 66.6
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EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Messrs. Woody,
Larsen, Noel and Vroman which are substantially similar in all respects. The
basic employment agreement provides for a number of benefits, all of which vest
after ten years of employment, including group term life insurance, health and
dental coverage and long-term disability coverage.
8
The agreements provide that, upon the involuntary termination of the
employee other than for cause, the Company is required to pay the employee 24
months of severance pay, determined by the employee's base monthly salary at the
time of termination. In the case of Messrs. Woody and Larsen they are entitled
to 30 months of severance pay. Upon retirement at age 62, the employee will
receive his normal retirement benefits. Such benefits include a monthly payment
equal to 60% of the employee's average compensation (i.e., monthly average of
compensation for the five years of highest compensation over the ten years prior
to retirement) multiplied by a fraction, the numerator of which is the length of
service of the employee up to 15 and the denominator of which is 15. There are
also provisions adjusting this calculation in the event of early retirement.
Disabled employees can also be eligible for certain retirement benefits. All
retirement benefits are tolled during any period of re-employment. Each
agreement further provides that any compensation paid by the Company shall be
reduced by any benefit paid under the Company's salaried employees' retirement
plan. In addition to the foregoing, grants of stock options and SARs under the
Incentive Plan become immediately exercisable upon a change in control of the
Company. Mr. Turner has a separate agreement with the Company which provides for
six months of severance pay in the event of involuntary separation other than
for cause.
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
During the year ending December 31, 2000, Kerry L. Woody, President and
Chief Executive Officer of the Company, served on the Compensation and Stock
Option Committee of the Company. While serving on the Compensation and Stock
Option Committee, Mr. Woody did not vote on any matter in which Mr. Woody had a
personal financial interest. No other insider at the Company participated on the
Compensation and Stock Option Committee in 2000.
ITEM 2 - AMENDMENT OF THE STOCK OPTION PLAN
At the 2001 Annual Meeting, stockholders will be asked to authorize the
amendment of the Company's 1996 Long-Term Incentive Plan (the "Plan") to add
options for one hundred fifty thousand (150,000) shares of authorized but
unissued shares of common stock of the Company. The exercise price and vesting
period for each award shall be determined by the Compensation and Stock Option
Committee of the Company. It is the intention of the persons named in the
Company's proxy to vote for the authorization of the above-described amendment
to the Plan.
The Board of Directors recommends you vote FOR the authorization of the
above-described amendment of the Plan.
THE STOCK OPTION PLAN
The Plan has been established by the Company to promote the long-term
financial interest of the Company by providing for the award of equity-based
incentives to key employees and other persons providing material services to the
Company, approximately 30 persons as of February 16, 2001. The Plan provides a
means whereby such individuals may acquire shares of Common Stock through the
grant of stock options and stock appreciation rights.
The Plan is not subject to any provision of ERISA or qualified under
Section 401(a) of the Internal Revenue Code.
The number of shares of Common Stock subject to awards under the Plan may
not exceed 833,333, all of which have been issued as of December 31, 2000, or
are subject to outstanding options. The number of shares underlying awards made
to any one individual in any one-year period may not exceed 166,667 shares. The
Common Stock issued under the Plan may be shares currently authorized but
unissued or currently held or subsequently acquired by the Company as treasury
shares.
The number of shares subject to the Plan and the terms of any outstanding
award may be adjusted as described in the Plan to reflect certain changes in the
capitalization of the Company.
9
The authority to manage and control the operation and administration of the
Plan is vested in a committee selected by the Board of Directors of the Company
(the "Committee") which shall consist of two or more members of the Board. The
Committee has the authority and discretion to determine the individuals who will
receive awards under the Plan and to determine the time of receipt, type of
award, the number of shares covered by such award and the terms, conditions,
performance criteria, restrictions and other provisions applicable to such
award. The Committee also has the authority and discretion to interpret the Plan
and to establish, amend and rescind any rules and regulations relating to the
Plan. Any interpretation of the Plan by the Committee and any decision made by
it under the Plan is final and binding on all persons.
Subject to the terms and provisions of the Plan, a participant to whom a
stock option is granted will have the right to purchase the number of shares of
Common Stock covered by the option. Subject to the conditions and limitations of
the Plan, the Committee shall determine all of the terms and conditions of such
grant, including without limitation, the option price, any vesting schedule and
the period of exercisability.
No option may be exercised after its expiration date. The expiration date
shall be determined by the Committee at the time of grant, but may not be later
than the earliest to occur of: (i) the ten-year anniversary of the grant date;
(ii) if the participant's termination of employment with Company and its
affiliates occurs by reason of death or disability (as defined in the Plan), the
one-year anniversary of such termination of employment; (iii) if the
participant's termination of employment with the Company and its affiliates
occurs by reason of retirement, the three-month anniversary of such termination
of employment; or (iv) if the participant's termination with the Company and its
affiliates occurs for any other reason, the date of such termination.
The full purchase price of each share of Common Stock purchased upon the
exercise of an option shall be paid at the time of such exercise in cash or in
shares of Common Stock (valued at fair market value as of the date of exercise)
that have been held by the participant at least six months, or in any
combination thereof, as determined by the Committee. To the extent provided by
the Committee, a participant may elect to pay the purchase price upon the
exercise of an option through a cashless exercise arrangement.
Options awarded under the Plan may be nonqualified options or incentive
stock options, as determined in the discretion of the Committee. Under the terms
of the Plan, the Committee may also issue stock appreciation rights ("SARs").
Upon exercise, an SAR entitles the holder thereof to a payment equal to the
excess of the fair market value of a share of stock on the exercise date over
the fair market value of a share of stock on the grant date. If the Committee so
determines, SARs may be issued in tandem with stock options.
Generally, options and SARs are not transferable prior to the participant's
death. However, the Committee may provide that an option or SAR award may be
transferred to an immediate family member or to a trust for the benefit of an
immediate family member.
Upon a change in control of the Company (as defined in the Plan), all
options and SARs shall become immediately exercisable.
The Board of Directors of the Company may amend or terminate the Plan at
any time, provided that no such amendment or termination may materially
adversely affect the rights of any participant or beneficiary under any award
made under the plan prior to the date such amendment is adopted by the Board.
During 2000, no stock options were granted to Messrs. Woody, Larsen, Noel
and Vroman. Stock options for 6,500 shares of Common Stock were granted to Mr.
Turner.
10
Option Grants In 2000
- -----------------------------------------------------------------------------------------------------------------
Percentage of
Shares Total Options
Underlying Granted to All
Options Employees in Exercise Price Grant Date
Name Granted 2000 (per share) Expiration Date Present Value
- -----------------------------------------------------------------------------------------------------------------
Kerry L. Woody 0 0% -- -- --
- -----------------------------------------------------------------------------------------------------------------
Wayne E. Larsen 0 0% -- -- --
- -----------------------------------------------------------------------------------------------------------------
Robert J. Noel 0 0% -- -- --
- -----------------------------------------------------------------------------------------------------------------
Gary J. Vroman 0 0% -- -- --
- -----------------------------------------------------------------------------------------------------------------
Randy B. Turner 6,500 100% $8.25 December 7, 2010 $9.50
- -----------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Aggregated Option Exercises in 2000 and Fiscal Year-End Option Values
- ------------------------------------------------------------------------------------------------------------------------
Number of Number of Shares Underlying Value of Unexercised
Shares Unexercised Options at In-the-Money
Acquired on Value Fiscal Year-End Options at Fiscal Year-End
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------------
Kerry L. Woody -- -- 178,167 0 $621,129 $0
- ------------------------------------------------------------------------------------------------------------------------
Wayne E. Larsen -- -- 95,500 0 $288,625 $0
- ------------------------------------------------------------------------------------------------------------------------
Robert J. Noel -- -- 77,500 0 $278,125 $0
- ------------------------------------------------------------------------------------------------------------------------
Gary J. Vroman -- -- 77,500 0 $278,125 $0
- ------------------------------------------------------------------------------------------------------------------------
Randy B. Turner -- -- 0 6,500 $0 $16,250
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Ten-Year Option/SAR Repricings
- ------------------------------------------------------------------------------------------------------------------------
Market Length of
Securities price of original
underlying stock at Exercise New option term
number of time of price at exercise remaining
Name Date options/SARs repricing time of price at date of
repriced or or repricing or ($) repricing or
amended (#) amendment amendment ($) amendment
($)
- ------------------------------------------------------------------------------------------------------------------------
Kerry L. Woody May 21, 1999 100,000 $8.31 $14.50 $8.25 106 months
- ------------------------------------------------------------------------------------------------------------------------
Wayne E. Larsen May 21, 1999 60,000 $8.31 $14.50 $8.25 106 months
- ------------------------------------------------------------------------------------------------------------------------
Robert J. Noel May 21, 1999 40,000 $8.31 $14.50 $8.25 115 months
- ------------------------------------------------------------------------------------------------------------------------
Gary J. Vroman May 21, 1999 40,000 $8.31 $14.50 $8.25 115 months
- ------------------------------------------------------------------------------------------------------------------------
Randy B. Turner -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who own more than ten percent (10%) of
the Company's Common Stock to file initial reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). These reports are
also filed with Nasdaq and a copy of each report is furnished to the Company.
Additionally, SEC regulations require that the Company identify any
individuals for whom one of the referenced reports was not filed on a timely
basis during the most recent fiscal year. To the Company's knowledge, based on
review of reports furnished to it, each individual who was required to file such
a report for the calendar year ending December 31, 2000 did so in a timely
manner.
11
RELATIONSHIP WITH INDEPENDENT AUDITORS
Arthur Andersen LLP, independent auditors, or a predecessor of that firm,
have been the auditors of the accounts of the Company each year since 1993,
including the fiscal year ended December 31, 2000. It is anticipated that
representatives of Arthur Andersen LLP will be present at the 2001 Annual
Meeting, will have the opportunity to make a statement if they so desire and
will be available to respond to appropriate questions raised at the 2001 Annual
Meeting or submitted to them in writing before the 2001 Annual Meeting.
Arthur Andersen LLP has informed the Company that it does not have any
direct financial interest in the Company and that it has not had any direct
connection with the Company in the capacity of promoter, underwriter, director,
officer or employee.
As is customary, auditors for the current fiscal year will be appointed by
the Board of Directors at their meeting immediately following the 2001 Annual
Meeting.
OTHER MATTERS
Management of the Company is not aware of other matters to be presented for
action at the 2001 Annual Meeting; however, if other matters are presented for
action, it is the intention of the persons named in the accompanying form of
proxy to vote in accordance with their judgment on such matters.
STOCKHOLDER PROPOSALS
Stockholders who wish to include a proposal in the proxy statement for the
Company's Annual Meeting of Stockholders for 2002 pursuant to Rule 14a-8 under
the Securities Exchange Act of 1934, must forward the proposal to the Secretary
of the Company no later than December 10, 2001. Stockholder proposals other than
pursuant to Rule 14a-8 will be considered untimely under the Company's By-laws
if received less than 45 days in advance of the Annual Meeting of Stockholders
in 2002 and the Company will not be required to present such proposals at the
meeting. If the Board of Directors of the Company chooses to present such a
proposal despite its untimeliness, the people named in the proxies solicited by
the Board of Directors for the 2002 Annual Meeting of Stockholders will have the
right to exercise discretionary voting power with respect to such proposal.
REPORT ON FORM 10-K
Upon the written request of any stockholder, addressed to the Secretary of
the Company, the Company will provide to such stockholder, without charge, a
copy of the Company's 2000 Annual Report on Form 10-K (without exhibits), as
filed with the Securities and Exchange Commission.
It is important that proxies be returned promptly to avoid unnecessary
expense. Therefore, stockholders are urged, regardless of the number of shares
owned, to date, sign and return the enclosed proxy.
By Order of the Board of Directors
/s/ WAYNE E. LARSEN
----------------------------------
Wayne E. Larsen
February 16, 2001 Secretary
12
EXHIBIT A
---------
AUDIT COMMITTEE CHARTER
-----------------------
The Audit Committee is appointed by the Board to assist the Board in monitoring
(1) the integrity of the financial statements of the Company, (2) the compliance
by the Company with legal and regulatory requirements and (3) the independence
and performance of the Company's internal and external auditors.
The Audit Committee shall have the authority to retain special legal, accounting
or other consultants to advise the Committee. The Audit Committee may request
any officer or employee of the Company or the Company's outside counsel or
independent auditor to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee.
The Audit Committee shall make regular reports to the Board.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and submit it to
the Board for approval.
2. Review the annual audited financial statements with management, including
major issues regarding accounting and auditing principles and practices as
well as the adequacy of internal controls that could significantly affect
the Company's financial statements.
3. Review an analysis prepared by management and the independent auditor of
significant financial reporting issues and judgments made in connection
with the preparation of the Company's financial statements.
4. Meet periodically with management to review the Company's major financial
risk exposures and the steps management has taken to monitor and control
such exposures.
5. Review major changes to the Company's auditing and accounting principles
and practices as suggested by the independent auditor or management.
6. Recommend to the Board the appointment of the independent auditor, which
firm is ultimately accountable to the Audit Committee and the Board.
7. Approve the fees to be paid to the independent auditor.
8. Receive periodic reports from the independent auditor regarding the
auditor's independence, discuss such reports with the auditor, and if so
determined by the Audit Committee, recommend that the Board take
appropriate action to insure the independence of the auditor.
A-1
9. Evaluate the performance of the independent auditor and, if so determined
by the Audit Committee, recommend that the Board replace the independent
auditor.
10. Obtain reports from management and the independent auditor that the
Company's subsidiary/foreign affiliated entities are in conformity with
applicable legal requirements and the Company's Conflict of Interest
Policy.
11. Review with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by the
auditor and the Company's response to that letter. Such review should
include:
(a) Any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access to
required information.
(b) Any changes required in the planned scope of the audit.
12. Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy statement.
13. Advise the Board with respect to the Company's policies and procedures
regarding compliance with applicable laws and regulations and with the
Company's Conflict of Interest Policy.
14. Review with the Company's General Counsel legal matters that may have a
material impact on the financial statements, the Company's compliance
policies and any material reports or inquiries received from regulators or
governmental agencies.
15. Meet at least annually with the Chief Financial Officer and the independent
auditor.
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent auditor. Nor is it the duty of
the Audit Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditor or to assure compliance with laws
and regulations and the Company's Conflict of Interest.
A-2
Ladish Co., Inc.
5481 South Packard Avenue
Cudahy, Wisconsin 53110
PROXY
ANNUAL MEETING OF THE STOCKHOLDERS OF LADISH CO., INC.
TO BE HELD ON APRIL 3, 2001
This Proxy is being solicited by the Board of Directors of Ladish Co., Inc.
(the "Company"). The undersigned hereby appoints Wayne E. Larsen and Kerry L.
Woody with full power to act alone and with full power of substitution, as proxy
of the undersigned, to attend the Annual Meeting of the Company, to be held on
Tuesday, April 3, 2001, in the Creole Meeting Room of the Four Points Hotel
Sheraton Milwaukee Airport, 4747 South Howell Avenue, Milwaukee, Wisconsin, at
10:00 a.m., Central Daylight Time, and any adjournment or postponement thereof
(the "Annual Meeting"), and to vote all shares of Common Stock of the Company
held of record by the undersigned on February 16, 2001, upon any and all matters
that may properly come before the Annual Meeting. This Proxy, when properly
executed, will be voted in the manner directed herein by the undersigned
stockholder. If no direction is given, this Proxy will be voted FOR the
proposals listed below. This Proxy, when properly executed, may be voted in the
discretion of the proxy upon any and all other matters that may properly come
before the Annual Meeting and the proxy is hereby authorized to vote the shares
of Common Stock represented by the proxy on matters incident to the conduct of
the Annual Meeting, including any motion to adjourn or postpone the Annual
Meeting (although the proxy does not intend, and is not aware at this time of
any intention of any other person, to make such a motion).
This Proxy may be revoked at any time before the authority hereby granted
is exercised by (i) delivering a written statement of revocation to the
Secretary of the Company, (ii) submitting a later dated Proxy or (iii) attending
the Annual Meeting and voting in person.
PROPOSAL (1): To elect five (5) Directors, to serve for the term of one
year or until their successors have been elected and have duly qualified.
Lawrence W. Bianchi |_| FOR |_| WITHHOLD
Charles W. Finkl |_| FOR |_| WITHHOLD
Wayne E. Larsen |_| FOR |_| WITHHOLD
Robert W. Sullivan |_| FOR |_| WITHHOLD
Kerry L. Woody |_| FOR |_| WITHHOLD
PROPOSAL (2): To authorize the amendment of the Company's 1996 Long-Term
Incentive Plan (the "Plan") whereby an additional one hundred fifty thousand
(150,000) shares of authorized but unissued shares of common stock of the
Company will be added to the Plan for awards pursuant to the Plan. The exercise
price and the vesting period for each award shall be determined by the
Compensation and Stock Option Committee of the Board of Directors.
|_| FOR |_| AGAINST |_| ABSTAIN
Dated _____________________________, 2001
Number of Shares: _________________
Signature
Signature, if held jointly
NOTE: Please sign exactly as name appears. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
broker or guardian please give full title as such. If a corporation, please have
the corporate name signed in full by the president or other authorized officer.
If a partnership, please have the partnership name signed by an authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY.