SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of
1934 (Amendment No. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
COLUMBUS MCKINNON CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as specified in its charter)
Payment of filing fee (check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1)Title of each class of securities to which transaction applies:
(2)Aggregate number of securities to which transaction applies:
(3)Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: __/
(4)Proposed maximum aggregate value of transaction:
(5)Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1)Amount Previously Paid:
(2)Form, Schedule or Registration Statement No.:
(3)Filing Party:
(4)Date Filed:
COLUMBUS MCKINNON CORPORATION
140 JOHN JAMES AUDUBON PARKWAY
AMHERST, NEW YORK 14228-1197
----------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 20, 2001
----------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Columbus
McKinnon Corporation, a New York corporation (the "Company"), will be held at
the Company's corporate offices, 140 John James Audubon Parkway, Amherst, New
York, on August 20, 2001, at 10:00 a.m., local time, for the following purposes:
1. To elect seven Directors to hold office until the 2002 Annual Meeting
and until their successors have been elected and qualified;
2. To take action upon and transact such other business as may be
properly brought before the meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on June 29, 2001,
as the record date for the determination of shareholders entitled to receive
notice of and to vote at the Annual Meeting.
It is important that your shares be represented and voted at the Annual
Meeting. Whether or not you plan to attend, please sign, date and return the
enclosed proxy card in the enclosed postage-paid envelope or vote by telephone
or using the internet as instructed on the enclosed proxy card. If you attend
the Annual Meeting, you may vote your shares in person if you wish. We sincerely
appreciate your prompt cooperation.
LOIS H. DEMLER
Corporate Secretary
Dated: July 23, 2001
COLUMBUS MCKINNON CORPORATION
140 JOHN JAMES AUDUBON PARKWAY
AMHERST, NEW YORK 14228-1197
-------------------------------------------------
PROXY STATEMENT
-------------------------------------------------
This Proxy Statement and the accompanying form of proxy are being
furnished in connection with the solicitation by the Board of Directors of
Columbus McKinnon Corporation, a New York corporation (the "Company"), of
proxies to be voted at the Annual Meeting of Shareholders to be held at the
Company's corporate offices, 140 John James Audubon Parkway, Amherst, New York,
on August 20, 2001, at 10:00 a.m., local time, and at any adjournment or
adjournments thereof. The close of business on June 29, 2001 has been fixed as
the record date for the determination of shareholders entitled to receive notice
of and to vote at the meeting. At the close of business on June 29, 2001, the
Company had outstanding 14,895,172 shares of common stock, $.01 par value per
share ("Common Stock"), the holders of which are entitled to one vote per share
on each matter properly brought before the Annual Meeting.
The shares represented by all valid proxies in the enclosed form will be
voted if received in time for the Annual Meeting in accordance with the
specifications, if any, made on the proxy card. If no specification is made, the
proxies will be voted FOR the nominees for Director named in this Proxy
Statement.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting will
constitute a quorum. Each nominee for election as a Director requires a
plurality of the votes cast in order to be elected. A plurality means that the
nominees with the largest number of votes are elected as Directors up to the
maximum number of Directors to be elected at the Annual Meeting. Under the law
of the State of New York, the Company's state of incorporation, only "votes
cast" by the shareholders entitled to vote are determinative of the outcome of
the matter subject to shareholder vote. Votes withheld will be counted in
determining the existence of a quorum, but will not be counted towards such
nominee's or any other nominee's achievement of plurality.
The execution of a proxy will not affect a shareholder's right to attend
the Annual Meeting and to vote in person. A shareholder who executes a proxy may
revoke it at any time before it is exercised by giving written notice to the
Secretary, by appearing at the Annual Meeting and so stating, or by submitting
another duly executed proxy bearing a later date.
This Proxy Statement and form of proxy is first being sent or given to
shareholders on July 23, 2001.
ELECTION OF DIRECTORS
The Certificate of Incorporation of the Company provides that the Board of
Directors shall consist of not less than three nor more than nine Directors to
be elected at each annual meeting of shareholders and to serve for a term of one
year or until their successors are duly elected and qualified. Currently, the
Board of Directors is comprised of seven members.
Unless instructions to the contrary are received, it is intended that the
shares represented by proxies will be voted for the election as Directors of
Timothy T. Tevens, Robert L. Montgomery, Jr., Herbert P. Ladds, Jr., Randolph A.
Marks, L. David Black, Carlos Pascual and Richard H. Fleming, each of whom is
presently a Director and has been previously elected by the Company's
shareholders. If any of these nominees should become unavailable for election
for any reason, it is intended that the shares represented by the proxies
solicited herewith will be voted for such other person as the Board of Directors
shall designate. The Board of Directors has no reason to believe that any of
these nominees will be unable or unwilling to serve if elected to office.
The following information is provided concerning the nominees for
Director:
TIMOTHY T. TEVENS was elected President and a Director of the Company in
January 1998 and assumed the duties of Chief Executive Officer in July 1998.
From May 1991 to January 1998 he served as Vice President--Information Services
of the Company and was elected Chief Operating Officer in October 1996. From
1980 to 1991, Mr. Tevens was employed by Ernst & Young LLP in various management
consulting capacities.
ROBERT L. MONTGOMERY, JR. joined the Company in 1974 and has served as
Executive Vice President and Chief Financial Officer since 1987 and as a
Director of the Company since 1982. Prior thereto he was employed as a certified
public accountant by PricewaterhouseCoopers LLP.
HERBERT P. LADDS, JR. has been a Director of the Company since 1973 and
was elected Chairman of the Board of Directors of the Company in January 1998.
He served as Chief Executive Officer of the Company from 1986 until his
retirement in July 1998. He was President of the Company from 1982 until January
1998 and was Executive Vice President of the Company from 1981 to 1982 and Vice
President--Sales & Marketing from 1971 to 1980. Mr. Ladds is also a director of
Utica Mutual Insurance Company, Eastman Worldwide, R.P. Adams Company, Inc. and
Fibron Products, Inc.
RANDOLPH A. MARKS has been a Director of the Company since 1986. Mr. Marks
is a private investor and is a retired Chairman of the Board of American Brass
Company. He also serves as a director of Computer Task Group, Inc. and Delaware
North Companies, Inc.
L. DAVID BLACK has been a Director of the Company since 1995. Mr. Black
was the Chairman of the Board of JLG Industries, Inc., from 1993 until his
retirement in February 2001. In addition, he served as its President and Chief
Executive Officer from 1991 until September 2000.
CARLOS PASCUAL has been a Director of the Company since 1998. Since August
1999, Mr. Pascual has been Executive Vice President and President of Developing
Markets Operations for Xerox. From January 1999 to August 1999, he served as
Deputy Executive Officer of Xerox's Industry Solutions Operations. From August
1995 to January 1999, he served as President of Xerox Corporation's United
States Customer Operations, and from July 1997 to January 1999 he also served as
2
a Senior Vice President of Xerox Corporation. Prior thereto, since 1968 he has
served in various capacities with Xerox Corporation.
RICHARD H. FLEMING was appointed a Director of the Company in March 1999.
In February 1999, Mr. Fleming was appointed Executive Vice President and Chief
Financial Officer of USG Corporation. Prior thereto, Mr. Fleming has served USG
Corporation in various executive financial capacities since 1989, including
Senior Vice President and Chief Financial Officer from January 1995 to February
1999 and Vice President and Chief Financial Officer from January 1994 to January
1995.
THE BOARD OF DIRECTORS RECOMMENDS UNANIMOUSLY A VOTE "FOR" EACH OF THE DIRECTOR
NOMINEES.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the year ended March 31, 2001, the Board of Directors held 15
meetings. Each Director attended at least 75% of the aggregate number of
meetings of the Board of Directors and meetings held by all committees of the
Board of Directors on which he served.
AUDIT COMMITTEE
The Board of Directors has a standing Audit Committee (the "Audit
Committee") comprised of Messrs. Black (Chairman), Pascual and Fleming. Each
member of the Audit Committee is independent as defined in the listing standards
of the National Association of Security Dealers. The duties of the Audit
Committee consist of reviewing with the Company's independent auditors and its
management, the scope and results of the annual audit and other services
provided by the Company's independent auditors. The Audit Committee also reviews
the scope and resulting reports of the Company's internal audits. The Audit
Committee held 2 meetings in fiscal 2001. A copy of the Audit Committee's
charter is annexed hereto as Appendix A.
COMPENSATION AND NOMINATION/SUCCESSION COMMITTEE
The Compensation and Nomination/Succession Committee (the "Compensation
Committee") consists of Messrs. Marks (Chairman), Pascual and Fleming, all
non-employee independent directors. The Compensation Committee held 3 meetings
in fiscal 2001. The Compensation Committee makes recommendations concerning the
salaries for officers of the Company and incentive compensation for employees of
and consultants to the Company.
OTHER COMMITTEES
The Board of Directors does not have a standing executive committee, the
functions of which are handled by the entire Board.
A special Independent Committee of the Board of Directors (the
"Independent Committee") was created in April 2000 to investigate strategic
alternatives to enhance shareholder value. The Independent Committee was
dissolved in February 2001. The Independent Committee was comprised of Messrs.
Black (Chairman), Marks, Pascual and Fleming.
3
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding the Directors
and executive officers of the Company:
NAME AGE POSITION(S) HELD
---- --- ----------------
Herbert P. Ladds, Jr. 68 Chairman of the Board
Timothy T. Tevens 45 President, Chief Executive Officer and Director
Robert L. Montgomery, Jr. 63 Executive Vice President, Chief Financial
Officer and Director
Ned T. Librock 48 Vice President-Sales and Marketing
Karen L. Howard 39 Vice President-Controller
Joseph J. Owen 40 Vice President-Strategic Integration
Ernst K. H. Marburg 66 Vice President-Total Quality and Standards
Lois H. Demler 63 Corporate Secretary
Randolph A. Marks 65 Director
L. David Black 64 Director
Carlos Pascual 55 Director
Richard H. Fleming 53 Director
All officers of the Company are elected annually at the first meeting of
the Board of Directors following the Annual Meeting of Shareholders and serve at
the discretion of the Board of Directors. There are no family relationships
between any officers or Directors of the Company. Recent business experience of
the Directors is set forth above under "Election of Directors." Recent business
experience of the executive officers who are not also Directors is as follows:
NED T. LIBROCK was elected Vice President-Sales and Marketing in November
1995. Mr. Librock has been employed by the Company since 1990 in various sales
management capacities. Prior to 1990, Mr. Librock was employed by Dynabrade
Inc., a manufacturer of power tools, as director of Sales and Marketing.
KAREN L. HOWARD was elected Vice President-Controller in January 1997.
From June 1995 to January 1997, Ms. Howard was employed by the Company in
various financial and accounting capacities. Prior to June 1995, Ms. Howard was
employed by Ernst & Young LLP as a certified public accountant.
4
JOSEPH J. OWEN was appointed Vice President-Strategic Integration in
August 1999. From April 1997 to August 1999, Mr. Owen was employed by the
Company as Corporate Director-Materials Management. Prior thereto, he was
employed by Ernst & Young LLP in various management consulting capacities.
ERNST K. H. MARBURG has been employed by the Company since May 1980. Prior
to his election as Vice President-Total Quality and Standards in October 1996,
Mr. Marburg served the Company as Manager of Product Standards and Services for
nearly sixteen years.
LOIS H. DEMLER has been employed by the Company since 1963. She has been
the Corporate Secretary of the Company since 1987.
5
COMPENSATION OF EXECUTIVE OFFICERS
The following Summary Compensation Table sets forth certain information
with respect to the compensation paid by the Company for services rendered
during the fiscal years ended March 31, 1999, 2000 and 2001 for the chief
executive officer and the other four most highly compensated executive officers
of the Company. The amounts shown include compensation for services in all
compensation capacities.
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
------------------------------------ -------------------------------------------
SECURITIES
RESTRICTED UNDERLYING
FISCAL OTHER ANNUAL STOCK OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS(1) SARS(2) COMPENSATION(3)
--------------------------- ---- ------ ----- ------------ --------- ------- ---------------
Timothy T. Tevens, 2001 $450,000 $67,500 $ - - - $8,412
President and Chief 2000 448,769 - - 2,488 54,000 9,485
Executive Officer 1999 410,385 36,511 - - - 9,834
Robert L. Montgomery, Jr., 2001 375,000 56,250 - - - 11,117
Executive Vice President 2000 373,923 - - 2,417 - 12,238
And Chief Financial Officer 1999 339,115 52,609 - - - 12,703
Ned T. Librock, 2001 210,000 31,500 24,867(4) - - 12,220
Vice President - 2000 209,538 - 68,553(4) 1,386 36,000 15,316
Sales and Marketing 1999 195,905 34,272 - - - 14,938
Karen L. Howard, 2001 167,000 25,050 68,056(5) - - 10,975
Vice President - 2000 163,240 - - 1,031 36,000 15,474
Controller 1999 144,636 23,125 - 8,500 - 13,154
Joseph J. Owen, 2001 165,000 21,450 - - - 8,435
Vice President - 2000 160,500 - - 1,016 18,000 11,758
Strategic Integration 1999 142,500 22,625 - 8,500 1,000 7,460
- -------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Tevens was granted 2,488 shares of restricted Common Stock on June 10,
1999, which had a value on such date of $61,900. As of March 31, 2001, the
number of restricted shares of Common Stock held by Mr. Tevens was 2,488,
and the value of such restricted shares was $19,438. Mr. Montgomery was
granted 2,417 shares of restricted Common Stock on June 10, 1999, which
had a value on such date of $60,100, and a value as of March 31, 2001 of
$18,883. Mr. Librock was granted 1,386 shares of restricted Common Stock
on June 10, 1999, which had a value on such date of $34,500, 11,900 shares
of restricted Common Stock on July 22, 1996, which had a value on such
date of $166,600, and 5,100 shares of restricted Common Stock on August 1,
1994, which had a value on such date of $48,996. The restrictions on 5,100
of Mr. Librock's restricted shares of Common Stock lapsed on July 31,
1999, on which date such shares had a value of $116,981. As of March 31,
2001, the number of restricted shares of Common Stock held by Mr. Librock
was 13,286, and the value of such restricted shares was $103,797. Ms.
Howard was granted 1,031 shares of restricted Common Stock on June 10,
1999, which had a value on such date of $25,650, 8,500 shares of
restricted Common Stock on August 17, 1998, which had a value on such date
of $196,563, and 8,500 shares of restricted Common Stock on June 1, 1995,
which had a value on such date of $107,875. The restrictions on 8,500 of
Ms. Howard's restricted shares of Common Stock lapsed on May 31, 2000, on
which date such shares had a value of $116,875. As of March 31, 2001, the
number of restricted shares of Common Stock held by Ms. Howard was 9,531,
and the value of such restricted shares was $74,461. Mr. Owen was granted
1,016 shares of restricted Common Stock on June 10, 1999, which had a
value on such date of $25,300, and 5,000 shares of restricted Common Stock
on April 14, 1997, which had a value on such date of $95,000. As of March
31, 2001, the number of restricted shares of Common Stock held by Mr. Owen
6
was 6,016, and the value of such restricted shares was $47,000. The
Company does not pay dividends on its outstanding shares of restricted
Common Stock, but makes payments of additional compensation in lieu of
such dividends. See footnote (3) below.
(2) Represents options granted to Messrs. Tevens and Librock, Ms. Howard and
Mr. Owen pursuant to the Company's Incentive Stock Option Plan (the
"Incentive Plan") in the amounts of 23,810, 22,345, 22,345, and 19,000,
respectively and options granted to Messrs. Tevens and Librock and Ms.
Howard pursuant to the Company's Non-Qualified Stock Option Plan (the
"Non-Qualified Plan") in the amounts of 30,190, 13,655, and 13,655,
respectively.
(3) Comprised of: (i) the value of shares of Common Stock allocated in fiscal
2001 under the Company's Employee Stock Ownership Plan (the "ESOP") to
accounts for Messrs. Tevens, Montgomery, Librock, Ms. Howard and Mr. Owen
in the amounts of $2,507, $5,232, $2,529, $1,718 and $1,543, respectively,
(ii) premiums for group term life insurance policies insuring the lives of
Messrs. Tevens, Montgomery, Librock, Ms. Howard and Mr. Owen in the amount
of $108 each, (iii) compensation in lieu of dividends on restricted shares
of Common Stock paid to Messrs. Tevens, Montgomery, Librock, Ms. Howard
and Mr. Owen in the amounts of $697, $677, $4,325, $3,970 and $1,684,
respectively and (iv) the Company's matching contributions under its
401(k) plan in the amount of $5,100 for each of Messrs. Tevens, Montgomery
and Librock, Ms. Howard and Mr. Owen.
(4) Represents tax reimbursement payments made by the Company to Mr. Librock
in fiscal 2001 and fiscal 2000 to offset the income tax effects of the
expiration of the restrictions on 5,100 shares of restricted Common Stock
granted to him in fiscal 1995 and released in fiscal 2000. See footnote
(1) above.
(5) Represents tax reimbursement payments made by the Company to Ms. Howard in
fiscal 2001 to offset the income tax effects of the expiration of the
restrictions on 8,500 shares of restricted Common Stock granted to her in
fiscal 1996 and released in fiscal 2000. See footnote (1) above.
OPTIONS GRANTED IN LAST FISCAL YEAR
In fiscal 2001, The Company did not grant any stock options to the
executives named in the Summary Compensation Table set forth above.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information with respect to the named
executives concerning the exercise of options during fiscal 2001 and unexercised
options held at the end of fiscal 2001.
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN THE MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END(1)
--------------------------- ---------------------------
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- -------- ----------- ------------- ----------- -------------
Timothy T. Tevens,
President and Chief
Executive Officer $ --- $ --- 68,000 36,000 $ --- $ ---
Robert L. Montgomery, Jr.,
Executive Vice President
and Chief Financial Officer --- --- --- --- --- ---
Ned T. Librock,
Vice President -
Sales and Marketing --- --- 62,000 24,000 --- ---
7
Karen L. Howard,
Vice President -
Controller --- --- 62,000 24,000 --- ---
Joseph J. Owen,
Vice President -
Strategic Integration --- --- 6,750 12,250 --- ---
- ---------------------------------------------------------------------------------------------------------------------
(1) The closing market value of Common Stock as of March 31, 2001 of $7.813
was less than the exercise prices of the options.
EMPLOYEE PLANS
EMPLOYEE STOCK OWNERSHIP PLAN. The Company maintains the ESOP for the
benefit of substantially all of its domestic non-union employees. The ESOP is
intended to be an employee stock ownership plan within the meaning of Section
4975 (e)(7) of the Internal Revenue Code of 1986, as amended (the "Code") and an
eligible individual account plan within the meaning of Section 407(d)(3) of the
Code. From 1988 through 1998, the ESOP has purchased from the Company 1,373,549
shares of Common Stock (the "ESOP Shares") for the aggregate sum of
approximately $10.5 million. The proceeds of certain institutional loans (the
"ESOP Loans") were used to fund such purchases. The ESOP Loans are secured by
the ESOP Shares, and are guaranteed by the Company. The ESOP acquired 479,900
shares of Common Stock in October 1998 for the aggregate sum of approximately
$7.7 million. The proceeds of a loan from the Company were used to fund the
purchase.
On a quarterly basis, the Company makes a contribution to the ESOP in an
amount determined by the Company's Board of Directors. In fiscal 2001, the
Company's cash contribution was $1,491,494. The ESOP trustees utilize the entire
contribution to make payments of principal and interest on the ESOP Loans.
Common Stock not allocated to ESOP participants ("ESOP Shares") is
recorded in an ESOP suspense account and is held as collateral for repayment of
the ESOP Loans. As payments of principal and interest are received by the
lenders, ESOP Shares are released from the ESOP suspense account annually and
are then allocated to the ESOP participants in the same proportion as a
participant's compensation for such year bears to total compensation of all
participants.
An ESOP participant becomes 100% vested in all amounts allocated to him or
her after five years of service. The shares of Common Stock held by the
participants in the ESOP represent a registration-type class of securities and
are voted by the participants in the same manner as any other share of Common
Stock.
In general, Common Stock allocated to a participant's account is
distributed upon his or her termination of employment at normal retirement (age
65) or death. The distribution is made in whole shares of Common Stock plus cash
in lieu of any fractional shares.
8
Robert L. Montgomery, Jr., Karen L. Howard, Robert H. Myers, Jr. and
Timothy R. Harvey serve as Trustees of the ESOP. As of March 31, 2001, the ESOP
owned approximately 1,458,629 shares of Common Stock. Common Stock allocated
pursuant to the ESOP to Messrs. Tevens, Montgomery and Librock, Ms. Howard and
Mr. Owen as of March 31, 2001 is 4,168 shares, 14,252 shares, 4,250 shares,
1,253 shares and 602 shares, respectively.
PENSION PLAN. The Company has a non-contributory, defined benefit pension
plan (the "Pension Plan") which provides certain of its employees with
retirement benefits. For each year of Plan Participation (as defined in the
"Pension Plan") limited to 35 years, a participant earns an annual pension
benefit equal to 1.00% of Final Average Earnings (as defined in the Pension
Plan) plus .50% of that part, if any, of such compensation in excess of his
Covered Compensation (as defined in the Pension Plan). Pension benefits are not
subject to reduction for social security or other offset amounts. If Messrs.
Tevens, Montgomery and Librock, Ms. Howard and Mr. Owen continue at their
current levels of compensation and retire at age 65, the total estimated annual
pension benefits under the Pension Plan for them would be approximately $64,268,
$41,911, $58,922, $66,920 and $59,547, respectively.
NON-QUALIFIED STOCK OPTION PLAN. In October 1995, the Company adopted the
Columbus McKinnon Corporation Non-Qualified Stock Option Plan (the
"Non-Qualified Plan") and reserved, subject to certain requirements, an
aggregate of 250,000 shares of Common Stock for issuance thereunder. Under the
terms of the Non-Qualified Plan, options may be granted to officers and other
key employees of the Company as well as to non-employee directors and advisors.
In fiscal 2001, the Company granted options to purchase 1,350 shares of Common
Stock under the Non-Qualified Plan.
INCENTIVE STOCK OPTION PLAN. The Company's Columbus McKinnon Corporation
Incentive Stock Option Plan (the "Incentive Plan"), which was adopted in October
1995, authorizes grants to officers and other key employees of the Company and
its subsidiaries of stock options that are intended to qualify as "incentive
stock options" within the meaning of Section 422 of the Code. The Incentive Plan
reserved, subject to certain adjustments, an aggregate of 1,250,000 shares of
Common Stock to be issued thereunder. Options granted under the Incentive Plan
become exercisable over a four-year period at the rate of 25% per year
commencing one year from the date of grant at an exercise price of not less than
100% of the fair market value of the Common Stock on the date of grant. Any
option granted thereunder may be exercised not earlier than one year and not
later than ten years from the date such option is granted. In the event of
certain extraordinary transactions, including a change of control of the
Company, the vesting of such options would automatically accelerate. In fiscal
2001 the Company granted options to purchase 31,350 shares of Common Stock under
the Incentive Plan.
RESTRICTED STOCK PLAN. The Company adopted the Columbus McKinnon
Corporation Restricted Stock Plan (the "Restricted Stock Plan") in October 1995
and reserved, subject to certain adjustments, an aggregate of 100,000 shares of
Common Stock to be issued upon the grant of restricted stock awards thereunder.
Under the terms of the Restricted Stock Plan, the Compensation Committee may
grant to employees of the Company and its subsidiaries restricted stock awards
to purchase shares of Common Stock at a purchase price of not less than $.01 per
share. Shares of Common Stock issued under the Restricted Stock Plan are subject
9
to certain transfer restrictions and, subject to certain exceptions, shall be
forfeited if the grantee's employment with the Company or any of its
subsidiaries is terminated at any time prior to the date the transfer
restrictions have lapsed. Grantees who remain continuously employed with the
Company or its subsidiaries become vested in their shares five years after the
date of the grant, or earlier upon death, disability, retirement or other
special circumstances. The restrictions on any such stock awards automatically
lapse in the event of certain extraordinary transactions, including a change of
control of the Company. In fiscal 2001, no shares of Common Stock were awarded
by the Company under the Restricted Stock Plan.
EVA(R) INCENTIVE PLAN. In fiscal 1998, the Company adopted the Columbus
McKinnon Corporation EVA(R) Incentive Compensation Plan (the "EVA(R) Plan")
which is based upon Stern Stewart Economic Value Added ("EVA(R)" ) concepts.
Under the EVA(R) Plan, for each fiscal year, each employee of the Company is
assigned a target bonus by management ranging from 3% to 30% of base
compensation, depending upon job classification. The actual bonus to be paid to
an employee will be equal to his target bonus times a bonus multiple, which can
be greater or less than 100%, based upon the relationship between actual EVA(R)
results and targeted EVA(R) results. Payments under the EVA(R) Plan will be made
within two and one half months of the completion of the applicable fiscal year.
In fiscal 2001, bonuses paid under this plan to Messrs. Tevens, Montgomery and
Librock, Ms. Howard and Mr. Owen were $67,500, $56,250, $31,500, $25,050 and
$21,450, respectively.
401(K) PLAN. The Company maintains 401(k) retirement savings plans (the
"401(k) Plans") which cover all employees in the United States who have
completed at least 90 days of service. Employees may contribute up to 15% of
their annual compensation (8% for highly compensated employees), subject to an
annual limitation as adjusted by the Code. Employee contributions are matched by
the Company in amount equal to 50% of the employee's Salary Reduction
Contributions (as defined in the 401(k) Plan). The Company's matching
contributions are limited to 3% of the employee's base pay and vest at the rate
of 20% per year.
CHANGE IN CONTROL AGREEMENTS
The Company has entered into change in control agreements (the "Change in
Control Agreements") with Messrs. Tevens, Montgomery and Librock, Ms. Howard,
Mr. Owen and certain other officers and employees of the Company. The Change in
Control Agreements provide for an initial term of one year, which, absent
delivery of notice of termination, is automatically renewed annually for an
additional one year term. Generally, each officer or employee is entitled to
receive, upon termination of employment within thirty-six months of a "Change in
Control" (unless such termination is because of death or disability, by the
Company for "Cause" (as defined in the Change in Control Agreements), or by an
officer or employee other than for "Good Reason" (as defined in the Change in
Control Agreements)), (i) a lump sum severance payment equal to three times the
sum of (A) his or her annual salary and (B) the greater of (1) the annual target
bonus under the EVA(R) Plan in effect on the date of termination and (2) the
annual target bonus under the EVA(R) Plan in effect immediately prior to the
Change in Control, (ii) continued coverage for thirty-six months under the
Company's medical and life insurance plans, (iii) at the option of the executive
10
or employee, either three additional years of deemed participation in the
Company's tax-qualified retirement plans or a lump sum payment equal to the
actuarial equivalent of the pension payment which he or she would have accrued
under the Company's tax-qualified retirement plans had he or she continued to be
employed by the Company for three additional years and (iv) certain other
specified payments. Aggregate "payments in the nature of compensation" (within
the meaning of Section 280(G) of the Internal Revenue Code) payable to any
executive or employee under the Change in Control Agreements is limited to the
amount that is fully deductible by the Company under Section 280(G) of the
Internal Revenue Code less one Dollar. The events that trigger a Change in
Control under the Change in Control Agreements include (i) the acquisition of
20% or more of the Company's outstanding Common Stock by certain persons, (ii)
certain changes in the membership of the Company's Board of Directors, (iii)
certain mergers or consolidations, (iv) certain sales or transfers of
substantially all of the Company's assets and (v) the approval of the
shareholders of the Company of a plan of dissolution or liquidation.
11
COMPENSATION AND NOMINATION/SUCCESSION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation for the executive officers of the Company is administered by
the Compensation and Nomination/Succession Committee which currently consists of
three independent (non-employee) Directors. The Compensation and
Nomination/Succession Committee approves the compensation arrangements of the
Chief Executive Officer and other executive officers of the Company.
The following objectives, established by the Compensation and
Nomination/Succession Committee, are the basis for the Company's executive
compensation program:
o providing a comprehensive program with components including base
salary, performance incentives, and benefits that support and align
with the Company's goal of providing superior value to customers and
shareholders; and
o ensuring that the Company is competitive and can attract and retain
qualified and experienced executive officers and other key
personnel; and
o appropriately motivating its executive officers and other key
personnel to seek to attain short term, intermediate term and long
term corporate and divisional performance goals and to manage the
Company for sustained long term growth.
The Board of Directors of the Company has delegated to the Compensation
and Nomination/Succession Committee responsibility for establishing and
administering the compensation programs for the Chief Executive Officer and
other executive officers.
The Compensation and Nomination/Succession Committee reviews compensation
policy and specific levels of compensation paid to the Chief Executive Officer
and other executive officers of the Company and reports and makes
recommendations to the Board of Directors regarding executive compensation,
policies and programs.
The Compensation and Nomination/Succession Committee is assisted in these
efforts, when required by an independent outside consultant, and by the
Company's internal staff, who provide the Compensation and Nomination/Succession
Committee with relevant information and recommendations regarding compensation
policies and specific compensation matters.
ANNUAL COMPENSATION PROGRAMS
Executive base salaries are compared to manufacturing companies included
in a periodic management survey completed by outside compensation consultants;
all data has been regressed to revenues equivalent to the Company's. This survey
is used because it reflects companies in the same revenue size and industry
sectors as the Company. The Compensation and Nomination/ Succession Committee
believes salaries should be targeted toward the median of the surveyed salaries
12
reported, depending upon the relative experience and individual performance of
the executive.
Salary adjustments are governed by guidelines covering three factors (1)
the individual executive officer's performance (merit), (2) market parity (to
adjust salaries of high performing individuals based on the competitive market),
and (3) promotions (to reflect increases in responsibility). In assessing market
parity, the Company targets groups of companies surveyed and referred to above.
Each executive officer's corporate position is assigned a title
classification reflecting the Company's evaluation of the position's overall
contribution to corporate goals and the value the labor market places on the
associated job skills. A range of appropriate salaries is then assigned to that
title classification. Each April, the salary ranges may be adjusted to reflect
market conditions, including changes in comparison companies, inflation, and
supply and demand in the market. The midpoint of the salary range corresponds to
a "market rate" salary which the Compensation and Nomination/Succession
Committee believes is appropriate for an experienced executive who is performing
satisfactorily, with salaries in excess of the salary range midpoint appropriate
for executives whose performance is superior or outstanding.
The Compensation and Nomination/Succession Committee has recommended that
any progression or regression within the salary range for an executive officer
shall depend upon a formal annual review of job performance, accomplishments and
progress toward individual and/or overall goals and objectives for the segments
of the Company that such executive officer oversees as well as his contributions
to the overall direction of the Company. Long term growth in shareholder value
is an important factor. The results of executive officers' performance
evaluations will form a part of the basis of the Compensation and
Nomination/Succession Committee's decision to approve, at its discretion, future
adjustments in base salaries of executive officers.
CHIEF EXECUTIVE OFFICER COMPENSATION
Compensation decisions affecting the Chief Executive Officer were based on
quantitative and qualitative factors. These factors were accumulated by an
external compensation consulting firm and included comparisons of the Company's
fiscal 1999 financial statistics to peer companies, strategic achievements such
as acquisitions and their integration, comparisons of the base salary level to
the median for comparable companies in published compensation surveys, as well
as assessments prepared internally by other members of executive management. The
bonus cited below was based on the Company's consolidated EVA(R) performance for
fiscal 2000.
There was no adjustment to Mr. Tevens' base salary effective April 2001.
In fiscal 2001, Mr. Tevens received a bonus of $67,500 based upon fiscal
2000 EVA(R) results.
13
SECTION 162(M) OF INTERNAL REVENUE CODE
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation in excess of
$1,000,000 paid to a Company's chief executive officer and any one of the four
other most highly paid executive officers during its taxable year. Qualifying
performance-based compensation is not subject to the deduction limit if certain
requirements are met. Based upon the compensation paid to the Company's
executive officers in fiscal 2001, it does not appear that the Section 162(m)
limitation will have a significant impact on the Company in the near term.
However, the Compensation and Nomination/Succession Committee plans to review
this matter periodically and to take such actions as are necessary to comply
with the new statute to avoid non-deductible compensation payments.
Randolph A. Marks
Carlos Pascual
Richard H. Fleming
14
REPORT OF THE AUDIT COMMITTEE
REVIEW OF THE COMPANY'S AUDITED FINANCIAL STATEMENTS
The Audit Committee has reviewed and discussed the audited financial
statements of the Company for the year ended March 31, 2001 with the Company's
management. The Audit Committee has also discussed with Ernst & Young LLP, the
Company's independent auditors, the matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication with Audit Committees).
The Audit Committee has also received and reviewed the written disclosures
and the letter from Ernst & Young LLP required by Independence Standards Board
Standard No. 1 (Independence Discussion with Audit Committees), and has
discussed the independence of Ernst & Young LLP with that firm.
Based on the review and the discussions noted above, the Audit Committee
recommended to the Board of Directors that the Company's audited financial
statements be included in the Company's Annual Report on Form 10-K for the year
ended March 31, 2001 for filing with the Securities and Exchange Commission.
ERNST & YOUNG LLP INFORMATION
Fees related to services performed on behalf of the Company by Ernst &
Young LLP for the year ended March 31, 2001 are as follows:
($ in thousands)
Audit Fees $ 257
Financial Information Systems
Implementation and Design -
All Other Fees
a. Tax services, statutory services and regulatory
and other SEC requirements and matters 45
b. Other (benefit plan audits) 123
-------
$ 425
=======
The Audit Committee has considered whether the provision of the above
services other than audit services is compatible with maintaining Ernst & Young
LLP's independence and has concluded that it is.
L. David Black
Carlos Pascual
Richard H. Fleming
15
PERFORMANCE GRAPH
The Performance Graph shown below compares the cumulative total shareholder
return on Common Stock, based on the market price of the Common Stock, with the
total return of the S & P MidCap 400 Index and the Dow Jones Industrial -
Diversified Index. The comparison of total return assumes that a fixed
investment of $100 was invested on February 22, 1996 (the effective date of the
Company's initial public offering) in Common Stock and in each of the foregoing
indices and further assumes the reinvestment of dividends. The stock price
performance shown on the graph is not necessarily indicative of future price
performance.
[ILLUSTRATION OF PERFORMANCE GRAPH]
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----
Columbus McKinnon Corporation.............. 100 113 178 132 88 54
S&P Midcap 400 Index....................... 100 111 165 166 229 213
Dow Jones Industrial - Diversified Index... 100 124 201 232 303 264
16
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Nomination/Succession Committee is composed of
Randolph A. Marks, Carlos Pascual and Richard H. Fleming, each an outside
director of the Company. None of the members of the Compensation and
Nomination/Succession Committee was, during fiscal 2001 or prior thereto, an
officer or employee of the Company or any of its subsidiaries. In fiscal 2001,
none of the executive officers of the Company served on the Compensation
Committee of another entity or on any other committee of the Board of Directors
of another entity performing similar functions during such period, except that
Mr. Ladds served on the Compensation Committee of the Board of Directors of
Utica Mutual Insurance Company.
COMPENSATION OF DIRECTORS
The Company pays an annual retainer of $20,000 to its Chairman of the
Board and an annual retainer of $15,000 to each of its other outside directors.
Directors who are employees of the Company do not receive an annual retainer.
The Chairman of the Audit Committee and Compensation and Nomination/Succession
Committee each receive an additional annual retainer of $2,500. In addition,
each non-employee director also receives a fee of $1,000 for each Board of
Directors and committee meeting attended and is reimbursed for any reasonable
expenses incurred in attending such meetings. The Chairman of the Independent
Committee received an annual retainer of $2,500. In addition, each member of the
Independent Committee was paid a fee of $1,000 for each meeting attended and was
reimbursed for any reasonable expenses incurred in attending such meetings.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's Directors and executive officers, and persons who own more than
10% of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission and NASDAQ initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Officers, Directors and greater than 10% shareholders are required
to furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended March 31, 2001 all Section
16(a) filing requirements applicable to its officers, Directors and greater than
10% beneficial owners were complied with.
17
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of May 31, 2001
regarding the beneficial ownership of the Company's Common Stock by (a) each
person who is known by the Company to own beneficially more than 5% of the
Company's Common Stock; (b) by each Director; (c) by each of the executive
officers named in the Summary Compensation Table; and (d) by all executive
officers and Directors of the Company as a group.
NUMBER PERCENTAGE
DIRECTORS, OFFICERS AND 5% SHAREHOLDERS OF SHARES(1) OF CLASS
- --------------------------------------- ------------ ----------
Herbert P. Ladds, Jr. (2)(3)......................... 918,610 6.17
Timothy T. Tevens (2)(4)............................. 99,174 *
Robert L. Montgomery, Jr. (2)(5)..................... 1,151,997 7.73
Randolph A. Marks (2)................................ 238,340 1.60
L. David Black (2)................................... 1,700 *
Carlos Pascual (2)................................... 1,500 *
Richard H. Fleming (2)............................... 1,504 *
Ned T. Librock (2)(6)................................ 85,792 *
Karen L. Howard (2)(7)............................... 82,549 *
Joseph J. Owen (2)(8) ............................... 17,079 *
Columbus McKinnon Corporation Employee Stock
Ownership Plan (2)................................ 1,458,629 9.79
All Directors and Executive Officers
as a Group (13 persons)(9)........................ 2,652,327 17.80
Capital Group International, Inc. (10) .............. 1,625,100 10.91
Gilchrist B. Berg (11) .............................. 1,104,892 7.42
Dimensional Fund Advisors, Inc. (12)................. 946,100 6.35
- --------
* Less than 1%.
(1) Rounded to the nearest whole share. Unless otherwise indicated in the
footnotes, each of the shareholders named in this table has sole voting
and investment power with respect to the shares shown as beneficially
owned by him, except to the extent that authority is shared by spouses
under applicable law.
(2) The address of each of the executive officers and directors and the
Columbus McKinnon Employee Stock Ownership Plan is c/o Columbus McKinnon
Corporation, 140 John James Audubon Parkway, Amherst, New York 14228-1197.
(3) Includes (i) 735,355 shares of Common Stock owned directly, (ii) 163,705
shares of Common Stock owned directly by Mr. Ladds' spouse, and (iii)
19,550 shares of Common Stock held by Mr. Ladds' spouse as trustee for the
grandchildren of Mr. Ladds.
(4) Includes (i) 19,956 shares of Common Stock directly, (ii) 7,000 shares of
Common Stock owned directly by Mr. Tevens' spouse, (iii) 50 shares of
Common Stock owned by Mr. Tevens' son, (iv) 4,168 shares of Common Stock
allocated to Mr. Tevens' ESOP account and (v) 59,708 shares of Common
Stock issuable under currently exercisable options granted to Mr. Tevens
under the Incentive Plan and 8,292 shares of Common Stock issuable under
currently exercisable options granted to Mr. Tevens under the
Non-Qualified Plan. Excludes 14,102 shares of Common Stock issuable under
options granted to Mr. Tevens under the Incentive Plan and 21,898 shares
of Common Stock issuable under options granted to Mr. Tevens under the
Non-Qualified Plan which are not exercisable within 60 days.
(5) Includes (i) 1,052,745 shares of Common Stock owned directly, (ii) 85,000
shares of Common Stock owned directly by Mr. Montgomery's spouse and (iii)
14,252 shares of Common Stock allocated to Mr. Montgomery's ESOP account.
Excludes 1,444,377 additional shares of Common Stock owned by the ESOP for
which Mr. Montgomery serves as one of four trustees and for which he
disclaims any beneficial ownership.
18
(6) Includes (i) 19,390 shares of Common Stock owned directly, (ii) 152 shares
of Common Stock owned by Mr. Librock's son, (iii) 4,250 shares of Common
Stock allocated to Mr. Librock's ESOP account and (iv) 59,708 shares of
Common Stock issuable under currently exercisable options granted to Mr.
Librock under the Incentive Plan and 2,292 shares of Common Stock issuable
under currently exercisable options granted to Mr. Librock under the
Non-Qualified Plan. Excludes 12,637 shares of Common Stock issuable under
options granted to Mr. Librock under the Incentive Plan and 11,363 shares
of Common Stock issuable under options granted to Mr. Librock under the
Non-Qualified Plan which are not exercisable within 60 days.
(7) Includes (i) 19,296 shares of Common Stock owned directly, (ii) 1,253
shares allocated to Ms. Howard's ESOP account, and (iii) 59,708 shares of
Common Stock issuable under currently exercisable options granted to Ms.
Howard under the Incentive Plan and 2,292 shares of Common Stock issuable
under currently exercisable options granted to Ms. Howard under the
Non-Qualified Plan. Excludes (i) 1,457,376 additional shares of Common
Stock owned by the ESOP for which Ms. Howard serves as one of four
trustees and for which she disclaims any beneficial ownership and (ii)
12,637 shares of Common Stock issuable under options granted to Ms. Howard
under the Incentive Plan and 11,363 shares of Common Stock issuable under
options granted to Ms. Howard under the Non-Qualified Plan which are not
exercisable within 60 days.
(8) Includes (i) 8,429 shares of Common Stock owned directly, (ii) 1,298
shares of Common Stock owned by Mr. Owen's spouse, (iii) 602 shares of
Common Stock allocated to Mr. Owen's ESOP account, and (iv) 6,750 shares
of Common Stock issuable under currently exercisable options granted to
Mr. Owen under the Incentive Plan. Excludes 12,250 shares of Common Stock
issuable under options granted to Mr. Owen under the Incentive Plan.
(9) Includes (i) options to purchase an aggregate of 208,950 shares of Common
Stock issuable to certain executive officers under the Incentive Plan and
Non-Qualified Plan, all of which are exercisable within 60 days. Excludes
the shares of Common Stock owned by the ESOP as to which Mr. Montgomery
and Ms. Howard serve as trustees, except for an aggregate of 41,761 shares
allocated to the respective ESOP accounts of the executive officers of the
Company and (ii) options to purchase an aggregate of 115,400 shares of
Common Stock issued to certain executive officers under the Incentive Plan
and Non-Qualified Plan, none of which are exercisable within 60 days.
(10) Based on information set forth in Schedule 13G filed with the Commission
by Capital Group International, Inc. on March 31, 2001. The stated
business address for Capital Group International, Inc. is 333 South Hope
Street, Los Angeles, California 90071.
(11) Based on information set forth in Schedule 13G filed with the Commission
on March 31, 2001 by Gilchrist B. Berg. The stated business address for
Mr. Berg is 225 Water Street, Suite 1987, Jacksonville, Florida 32202.
(12) Based on information set forth in Schedule 13G to be filed with the
Commission on March 31, 2001 by Dimensional Fund Advisors, Inc. The stated
business address for Dimensional Fund Advisors, Inc. is 1299 Ocean Avenue,
11th Floor, Santa Monica, California 90401.
SOLICITATION OF PROXIES
The cost of solicitation of proxies will be borne by the Company,
including expenses in connection with preparing and mailing this Proxy
Statement. In addition to the use of the mails, proxies may be solicited by
personal interviews or by telephone, telecommunications or other electronic
means by Directors, officers and employees of the Company at no additional
compensation. Arrangements will be made with brokerage houses, banks and other
custodians, nominees and fiduciaries for the forwarding of solicitation material
to the beneficial owners of Common Stock, and the Company will reimburse them
for reasonable out-of-pocket expenses incurred by them in connection therewith.
19
OTHER MATTERS
The Company's management does not presently know of any matters to be
presented for consideration at the Annual Meeting other than the matters
described in the Notice of Annual Meeting. However, if other matters are
presented, the accompanying proxy confers upon the person or persons entitled to
vote the shares represented by the proxy, discretionary authority to vote such
shares in respect of any such other matter in accordance with their best
judgment.
OTHER INFORMATION
Ernst & Young LLP has been selected as the independent auditors for the
Company's current fiscal year and has been the Company's independent auditors
for its most recent fiscal year ended March 31, 2001.
Representatives of Ernst & Young LLP are expected to be present at the
2001 Annual Meeting of Shareholders and will have the opportunity to make a
statement, if they so desire, and will be available to respond to appropriate
questions.
Effective April 1, 2001, the Company placed its directors and officers
indemnification insurance coverage with Continental Casualty Company for a term
of one year at a cost of $173,500. This insurance provides coverage to the
Company's executive officers and directors individually where exposures exist
for which the Company is unable to provide direct indemnification.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS
SOLICITED, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K, FOR THE FISCAL YEAR ENDED MARCH 31, 2001, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND THE
SCHEDULES THERETO. Such written request should be directed to Columbus McKinnon
Corporation, 140 John James Audubon Parkway, Amherst, New York 14228-1197,
Attention: Robert L. Montgomery, Jr. Each such request must set forth a good
faith representation that, as of June 29, 2001, the person making the request
was a beneficial owner of securities entitled to vote at the Annual Meeting of
Shareholders.
SHAREHOLDERS' PROPOSALS
Proposals of shareholders intended to be presented at the 2002 Annual
Meeting must be received by the Company by March 18, 2002 to be considered for
inclusion in the Company's Proxy Statement and form of proxy relating to that
meeting. In addition, the Company's by-laws require that notice of shareholder
proposals and nominations for director be delivered to the principal executive
offices of the Company not less than 60 days nor more than 90 days prior to the
first anniversary of the Annual Meeting for the preceding year; provided,
however, if the Annual Meeting is not scheduled to be held within a period
commencing 30 days before such anniversary date and ending 30 days after such
anniversary date, such shareholder notice shall be delivered by the later of (i)
60 days prior to the date of the Annual Meeting or (ii) the tenth day following
the date such Annual Meeting date is first publicly announced or disclosed. The
date of the 2002 Annual Meeting has not yet been established. Nothing in this
paragraph shall be deemed to require the Company to include in its Proxy
Statement and proxy relating to the 2002 Annual Meeting any shareholder proposal
that does not meet all of the requirements for inclusion established by the
20
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
The accompanying Notice and this Proxy Statement are sent by order of the
Board of Directors.
LOIS H. DEMLER
Corporate Secretary
Dated: July 23, 2001
21
APPENDIX A
COLUMBUS MCKINNON CORPORATION
(THE "COMPANY")
AUDIT COMMITTEE CHARTER
Organization
This charter governs the operations of the Audit Committee (the "Committee").
The Committee shall review and reassess the charter at least annually and obtain
the approval of the Board of Directors. The Committee shall be appointed by the
Board of Directors and shall comprise at least three directors, each of whom is
independent of management and the Company. Members of the Committee shall be
considered independent if they have no relationship that may interfere with the
exercise of their independence from management and the Company. All Committee
members shall be financially literate and at least one member shall have
accounting or related financial management expertise.
Statement of Policy
The Committee shall provide assistance to the Board of Directors in fulfilling
its oversight responsibility to the shareholders, potential shareholders, the
investment community, and others relating to the Company's financial statements
and the financial reporting process, the systems of internal accounting and
financial controls, the internal audit function, the annual independent audit of
the Company's financial statements, and the legal compliance and ethics programs
as established by management and the Board of Directors. In so doing, it is the
responsibility of the Committee to maintain free and open communication among
the Committee, independent auditors, the internal auditors, and management of
the Company. In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all books,
records, facilities, and personnel of the Company and the power to retain
outside counsel or other experts for this purpose.
Responsibilities and Processes
The primary responsibility of the Committee is to oversee the Company's
financial reporting process on behalf of the Board of Directors and report the
results of its activities to the Board of Directors. Management is responsible
for preparing the Company's financial statements, and the independent auditors
are responsible for auditing those financial statements. The Committee, in
carrying out its responsibilities, believes its policies and procedures should
remain flexible in order to best react to changing conditions and circumstances.
The Committee should take the appropriate actions to set the overall corporate
"tone" for quality financial reporting, sound business risk practices, and
ethical behavior.
The following shall be the principal recurring processes of the Committee in
carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the Committee may supplement them as
appropriate.
o The Committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the Board of Directors and the Committee, as representatives
of the Company's shareholders. The Committee shall have the ultimate
authority and responsibility to evaluate and, where appropriate, replace
the independent auditors. The Committee shall discuss with the independent
auditors their independence from management and the Company and the matters
included in the written disclosures required by the Independence Standards
Board. Annually, the Committee shall review and recommend to the Board of
Directors for approval the selection of the Company's independent auditors.
o The Committee shall discuss with the internal auditors and the independent
auditors the overall scope and plans for their respective audits including
the adequacy of staffing and compensation. Also, the Committee shall
discuss with management, the internal auditors, and the independent
auditors the adequacy and effectiveness of the accounting and financial
controls, including the Company's system to monitor and manage business
risk, and legal ethical compliance programs. Further, the Committee shall
meet separately with the internal auditors and the independent auditors,
with and without management present, to discuss the results of its
examinations.
o The Committee will ensure that the independent auditors perform a review of
the interim financial statements of the Company, in accordance with
STATEMENT OF AUDITING STANDARDS NO. 71, prior to the filing of the
Company's Quarterly Report on Form 10-Q. Also, the Committee shall discuss
the results of the quarterly review and any other matters required to be
communicated to the Committee by the independent auditors under generally
accepted auditing standards. The chair of the Committee may represent the
entire Committee for the purposes of this review.
o The Committee shall review with management and the independent auditors the
financial statements to be included in the Company's Annual Report on Form
10-K (or the annual report to the shareholders if distributed prior to the
filing of Form 10-K), including its judgment about the quality, not just
acceptability, of accounting principles, the reasonableness of significant
judgments, and the clarity of the disclosures in the financial statements.
Also, the Committee shall discuss the results of the annual audit and any
other matters required to be communicated to the Committee by the
independent auditors under generally accepted auditing standards.
The Committee relies on the representations of management and the expertise of
the independent auditors in order to ensure that the Company's financial
statements are presented in accordance with Generally Accepted Accounting
Principles and this charter is not intended to suggest any responsibility not
consistent with this reliance.
Dated as of May 22, 2000
2
ANNUAL MEETING OF SHAREHOLDERS OF
COLUMBUS MCKINNON CORPORATION
August 20, 2001
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
- ---------------
PLEASE DATE, SIGN AND MAIL YOUR ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED AS
SOON AS POSSIBLE.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
- --------------------------------------------
PLEASE CALL TOLL-FREE 1-800-PROXIES AND FOLLOW THE INSTRUCTIONS. HAVE YOUR
CONTROL NUMBER AND THE PROXY CARD AVAILABLE WHEN YOU CALL.
TO VOTE BY INTERNET
- -------------------
PLEASE ACCESS THE WEB PAGE AT WWW.VOTEPROXY.COM AND FOLLOW THE ON-SCREEN
INSTRUCTIONS. HAVE YOUR CONTROL NUMBER AVAILABLE WHEN YOU ACCESS THE WEB PAGE.
YOUR CONTROL NUMBER IS
--------------- ---------------
PROXY
COLUMBUS MCKINNON CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 20, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints TIMOTHY T. TEVENS and ROBERT L. MONTGOMERY,
JR. and each or any of them, attorneys and proxies, with full power of
substitution, to vote at the Annual Meeting of Shareholders of COLUMBUS McKINNON
CORPORATION (the "Company") to be held at the Company's corporate offices at 140
John James Audubon Parkway, Amherst, New York, on August 20, 2001 at 10:00 a.m.,
local time, and any adjournment(s) thereof revoking all previous proxies, with
all powers the undersigned would possess if present, to act upon the following
matters and upon such other business as may properly come before the meeting or
any adjournment(s) thereof.
1. ELECTION OF DIRECTORS:
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed below
contrary below)
HERBERT P. LADDS, JR.
TIMOTHY T. TEVENS
ROBERT L. MONTGOMERY, JR.
RANDOLPH A. MARKS
L. DAVID BLACK
CARLOS PASCUAL
RICHARD H. FLEMING
(Instruction: To withhold authority to vote
for any individual nominee mark "FOR" all
nominees above and write the name(s) of that
nominee(s) with respect to whom you wish to
withhold authority to vote here:
------------------------------
------------------------------
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" PROPOSAL NO. 1.
Dated: ______________, 2001
------------------------------
Signature
------------------------------
Signature if held jointly
Please sign exactly as name appears. When shares are
held by joint tenants, both should sign. When signing
as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign in full corporate name by
President or other authorized officer. If a
partnership, please sign a partnership name by
authorized person. PLEASE SIGN, DATE AND MAIL THE
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
ANNUAL MEETING OF SHAREHOLDERS OF
COLUMBUS MCKINNON CORPORATION
August 20, 2001
ESOP
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
- ---------------
PLEASE DATE, SIGN AND MAIL YOUR ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED AS
SOON AS POSSIBLE.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
- --------------------------------------------
PLEASE CALL TOLL-FREE 1-800-PROXIES AND FOLLOW THE INSTRUCTIONS. HAVE YOUR
CONTROL NUMBER AND THE PROXY CARD AVAILABLE WHEN YOU CALL.
TO VOTE BY INTERNET
- -------------------
PLEASE ACCESS THE WEB PAGE AT WWW.VOTEPROXY.COM AND FOLLOW THE ON-SCREEN
INSTRUCTIONS. HAVE YOUR CONTROL NUMBER AVAILABLE WHEN YOU ACCESS THE WEB PAGE.
YOUR CONTROL NUMBER IS
--------------- ---------------
COLUMBUS MCKINNON CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
VOTING INSTRUCTION CARD FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 20, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The Trustees of the Columbus McKinnon Corporation Employee Stock Ownership
Plan (the "ESOP") are hereby authorized to represent and to vote as designated
herein the shares of the undersigned held under the ESOP at the Annual Meeting
of Shareholders of COLUMBUS McKINNON CORPORATION (the "Company") to be held at
the Company's corporate offices at 140 John James Audubon Parkway, Amherst, New
York, on August 20, 2001 at 10:00 a.m., local time, and any adjournment(s)
thereof revoking all previous voting instructions, with all powers the
undersigned would possess if present, to act upon the following matters and upon
such other business as may properly come before the meeting or any
adjournment(s) thereof.
THE TRUSTEES MAKE NO RECOMMENDATION WITH RESPECT TO VOTING YOUR ESOP SHARES ON
ANY ITEMS
1. ELECTION OF DIRECTORS:
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed below
contrary below)
HERBERT P. LADDS, JR.
TIMOTHY T. TEVENS
ROBERT L. MONTGOMERY, JR.
RANDOLPH A. MARKS
L. DAVID BLACK
CARLOS PASCUAL
RICHARD H. FLEMING
(Instruction: To withhold authority to vote
for any individual nominee mark "FOR" all
nominees above and write the name(s) of that
nominee(s) with respect to whom you wish to
withhold authority to vote here:
------------------------------
------------------------------
2. In their discretion, the Trustees are authorized to vote upon such other
business as may properly come before the meeting.
WHEN PROPERLY EXECUTED , THIS VOTING INSTRUCTION WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS MADE, THE TRUSTEES WILL VOTE ANY ALLOCATED
ESOP SHARES "FOR" PROPOSAL NO. 1.
Dated: _______________, 2001
------------------------------
Signature
Please sign exactly as name appears. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such. PLEASE
SIGN, DATE AND MAIL THE VOTING INSTRUCTION CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.