THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
COLUMBUS MCKINNON CORPORATION
G.L. INTERNATIONAL INC.
1997 STOCK OPTION PLAN
INTRODUCTION
This prospectus provides important information regarding the
G.L. International inc. 1997 Stock Option Plan ("Plan"). However, the prospectus
is qualified in its entirety by reference to the Plan, copies of which may be
obtained upon request and without charge from Lois H. Demler, Secretary,
Columbus McKinnon Corporation, 140 John James Audubon Parkway, Amherst, New York
14228-1197, (716) 689-5409, and to your Stock Option Agreement. If you have any
questions regarding this prospectus or the Plan, please contact Robert L.
Montgomery, Jr., Executive Vice President and Chief Financial Officer, Columbus
McKinnon Corporation, 140 John James Audubon Parkway, Amherst, New York
14228-1197, (716) 689-5405.
In this prospectus "Company", "Columbus McKinnon", "we", "us",
and "our" refer to Columbus McKinnon Corporation. "GL" refers to G.L.
International inc.
WHERE YOU CAN FIND MORE INFORMATION
Columbus McKinnon files annual, quarterly and current reports,
proxy statements and other documents with the Securities and Exchange
Commission. The SEC allows us to "incorporate" into this prospectus information
we file with the SEC in other documents. This means that we can disclose
important information to you by referring to other documents that contain that
information. The information may include documents filed after the date of this
prospectus. We incorporate by reference the documents listed below and all
future documents filed with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 until we terminate the offering of shares
covered by this prospectus.
SEC Filing
(FILE NO. 0-27618) PERIOD/FILING DATE
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Annual Report on Form 10-K Year ended March 31, 1998
Quarterly Reports on Form 10-Q Quarters ended June 28, 1998;
September 27, 1998 and
December 27,1998
Current Reports on Form 8-K April 8, 1998; October 29, 1998;
May 18, 1999 and May 26, 1999
Description of Capital Stock
contained in the Company's
(1) Registration Statement on Form 8-A January 22, 1996
(2) Form 8-A/A Amendment No. 1 February 21, 1996
Description of Preferred Stock
Purchase Rights contained in
Registration Statement on Form 8-A October 27, 1997
You may request a copy of these documents and a copy of our
most recent annual report to shareholders, and any other reports, proxy
statement and other communications distributed to shareholders. These copies
will be provided at no cost to you. Please make your request to Lois H. Demler,
Secretary of the Company at the address and telephone number shown above.
RECENT DEVELOPMENTS
A group of New York City based stock traders and speculators
owning 8.44% of Columbus McKinnon common stock has proposed a slate of five
directors for election at the Company's Annual Meeting of Shareholders in August
1999. The group's platform is to seek a sale of the Company. The value of
Columbus McKinnon's common stock could be affected by the outcome of this proxy
contest.
GENERAL INFORMATION REGARDING THE PLAN
The Plan was adopted by the Board of Directors of G.L.
International Inc. ("GL") on March 25, 1997, and subsequently approved by
stockholders, for the purposes set forth below. However, the Board of Directors
terminated the Plan effective March 1, 1999, pursuant to an arrangement whereby
GL became a wholly owned subsidiary of the Company. Although the Plan has been
terminated and no new options will be granted under the Plan, all outstanding
options granted pursuant to the Plan remain outstanding and will be exercisable
in accordance with the terms of the Plan and any applicable Stock Option
Agreement. In this regard, all outstanding options have been converted to stock
options for shares of Columbus McKinnon Corporation common stock, par value
$0.01 per share. A total of 92,599 shares of the Company's common stock are
covered by such outstanding options.
The Plan is not a qualified plan under Section 401(a) of the
Internal Revenue Code nor is it subject to any provisions of the Employee
Retirement Income Security Act of 1974.
PURPOSE OF THE PLAN
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The Plan was established to:
o create stockholder value by providing incentives to
selected key employees and directors who contribute
materially to the success of GL and its subsidiaries,
o provide a means of rewarding outstanding performance
by those key employees, and
o enhance the interests of those key employees and
directors in the continued success and progress of GL
by providing them a proprietary interest in GL
The Plan was designed to enhance GL's ability to maintain a competitive position
in attracting and retaining qualified key personnel and directors.
ADMINISTRATION OF THE PLAN
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The Plan provides for administration of the Plan by the Board
of Directors of GL or, at the option of the Board, a committee which is
comprised of two or more non-employee directors appointed by the Board. The Plan
currently is administered by the Board of Directors which, in its capacity as
administrator of the Plan, is referred to in this prospectus as the "Committee."
As directors of GL, members of the Committee serve until their successors are
duly elected and qualified, and are subject to removal in accordance with
applicable law.
Among the powers granted to the Committee are the authority to:
o grant options and determine the terms and conditions
of those options, including the exercise price,
vesting and exercise period of the options
o determine the form and provisions of the Stock Option
Agreements
o interpret the Plan and the Stock Option Agreements
and waive any provisions of any Stock Option
Agreement, provided such waiver is not inconsistent
with the terms of the Plan
o prescribe rules and regulations relating to the Plan
o make all determinations necessary or advisable for
administration of the Plan
The Committee's address and telephone number is: c/o Lois H.
Demler, Secretary, Columbus McKinnon Corporation, 140 John James Audubon
Parkway, Amherst, New York 14228-1197, (716) 689-5409.
GRANTS TO ELIGIBLE PARTICIPANTS IN THE PLAN
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Pursuant to the provisions of the Plan, the Committee granted
options to employees of GL who were determined by it to be key employees on the
date of grant.
TYPES OF OPTIONS THAT HAVE BEEN GRANTED
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Grants of Incentive Stock Options and Nonstatutory Stock
Options have been granted to Key Employees under the Plan. It is intended that
the Incentive Stock Options qualify for special tax treatment under the Internal
Revenue Code. In order to qualify for special tax treatment, the Plan provides,
among other things, that the aggregate fair market value (determined at the time
of grant) of the shares of common stock with respect to which Incentive Stock
Options are exercisable for the first time by you in any calendar year under the
Plan and all plans of GL or its parent or subsidiaries shall not exceed
$100,000. Neither GL, its directors, officers or employees, among others, shall
be liable if the Incentive Stock Options do not in fact qualify for special tax
treatment.
Please refer to the tax discussion of stock options beginning
on page 7.
TERMS AND CONDITIONS OF OPTIONS
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Each stock option granted under the Plan is evidenced by a
written Stock Option Grant and accompanying Stock Option Agreement, as amended
by an Amendment to Stock Option Agreement effective as of March 1, 1999,
(together the Stock Option Grant, accompanying Stock Option Agreement and
Amendment to Stock Option Agreement are referred to as the Stock Option
Agreement) which contain such terms and conditions as the Committee determined,
consistent with the provisions of the Plan, including those shown below. You
should refer to your Stock Option Agreement for the terms and conditions
applicable to your stock options.
(a) EXERCISE PRICE. The Committee determined the exercise
prices of options it granted, subject to the Plan requirement that the exercise
price for any Incentive Stock Option shall not be less than the fair market
value of the GL common stock at the date of grant (or 110% of the fair market
value in the case of an Incentive Stock Option granted to a person who owned
more than 10% of the total combined voting power of all classes of stock of GL
or any of its subsidiaries). Fair market value is the value at the date of grant
of GL as an on-going concern, as determined in good faith by the Committee. The
exercise price of your options is set forth in your Stock Option Agreement.
(b) VESTING. The Committee determined the vesting schedule for
all options granted. The vesting schedule for your options is set forth in your
Stock Option Agreement.
(c) TERM OF STOCK OPTIONS. The Plan authorizes the Committee
to determine the period during which options are exercisable, except that the
Plan provides that no option shall be exercisable more than five years after the
date it was granted. The period during which your options are exercisable is set
forth in your Stock Option Agreement.
(d) OPTIONS NON-TRANSFERRABLE. All options granted are
non-transferrable other than by will or the laws of descent and distribution.
During an optionee's lifetime the options may be exercised only by him, or if he
is disabled, his legal representative.
TERMINATION OF EMPLOYMENT AND DEATH
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Your Stock Option Agreement describes the conditions that
apply to the exercise of your options in the event you cease to be employed by
GL or a subsidiary of Columbus McKinnon. In the event of your death while
employed by GL or a subsidiary of Columbus McKinnon, your estate or the person
or persons to whom your rights under the option are passed under your will or
the laws of descent and distribution may exercise your option to the same extent
that you would be entitled to exercise the option at the date of your death. The
option may only be exercised within the 90-day period following the date of your
death or such other period as may be specified in your Stock Option Agreement,
but in no case later than the expiration date of the option.
DILUTION OR OTHER ADJUSTMENTS
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The number of shares of common stock issuable under any option
granted to you, as well as the exercise price of any option, is subject to
adjustment to reflect any
o stock split
o stock dividend
o recapitalization
o merger
o consolidation
o reorganization
o combination or exchange of shares
o or other similar events
RESTRICTIONS ON ISSUANCE OF SHARES
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Columbus McKinnon is not obligated to sell or issue any shares
of its common stock upon the exercise of any option granted to you unless:
o the shares with respect to which your option is being
exercised have been registered under applicable
federal securities laws or the issuance of the shares
is exempt from such registration
o the prior approval of the sale or issuance has been
obtained from any applicable state regulatory body
having jurisdiction or the sale or issuance is exempt
from such prior approval requirement
o if the common stock of Columbus McKinnon has been
listed on any exchange, the shares with respect to
which your option is being exercised have been duly
listed on that exchange
Your Stock Option Agreement may include other restrictions on
the ownership and transfer of shares of common stock.
RESTRICTIONS ON RESALE OF SHARES ACQUIRED UPON EXERCISE OF OPTIONS
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Subject to any restrictions imposed by the Plan or any Stock
Option Agreement, shares of common stock acquired by a non-affiliate of Columbus
McKinnon upon exercise of an option may be freely resold in ordinary brokerage
transactions pursuant to Sections 4(1) and 4(4) of the Securities Act of 1933.
However, securities acquired by an affiliate of Columbus McKinnon must be
registered for resale by such affiliate unless the resale is made in compliance
with the provisions of Rule 144 under the Securities Act of 1933 or is entitled
to another exemption from the registration requirements of the Securities Act of
1933. For these purposes the term affiliate means a person who directly or
indirectly controls, is controlled by or is under common control with Columbus
McKinnon.
In addition, if you are or become a director or officer of
Columbus McKinnon, or a beneficial owner of 10 percent or more of its common
stock, you should consider the effect of Section 16 of the Securities Exchange
Act of 1934, and the rules thereunder, upon your ability to effect transactions
in the common stock of Columbus McKinnon.
MODIFICATIONS OF THE PLAN
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The Plan may be modified or amended at any time, both
prospectively and retroactively, and in such a manner as to affect outstanding
Incentive Stock Options, if such amendment or modification is necessary for the
Plan and the Incentive Stock Options to qualify under the Internal Revenue Code.
Also, the Plan may be abandoned, suspended or terminated at any time except with
respect to any options then outstanding. As noted above, the Plan was terminated
effective March 1, 1999 and no new options will be granted under the Plan. All
outstanding options remain outstanding and will be exercisable in accordance
with the terms of the Plan and any applicable Stock Option Agreement.
OTHER PROVISIONS
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Nothing in the Plan or any Stock Option Agreement confers upon
you the right to continue in the employment of GL or any other subsidiary of
Columbus McKinnon or restricts the rights of GL or any such other subsidiary to
terminate your employment.
You will not have any rights as a stockholder of Columbus
McKinnon with respect to any share covered by options granted to you unless and
until you become a holder of record of such share.
FEDERAL INCOME TAX TREATMENT
The following is a brief summary of the federal income tax
aspects of the Plan, based on existing law and regulations which are subject to
change. The application of state and local income taxes and other federal taxes,
including, without limitation, gift and estate taxes, is not discussed.
An optionee who is granted an Incentive Stock Option under the
Plan is not required to recognize taxable income at the time of the grant or at
the time of exercise. Under certain circumstances, however, an optionee may be
subject to the alternative minimum tax with respect to the exercise of his
Incentive Stock Options. GL is not entitled to a deduction at the time of grant
or at the time of exercise. If an optionee does not dispose of the shares
acquired pursuant to the exercise of an Incentive Stock Option before the later
of two years from the date of grant of the Incentive Stock Option and one year
from the transfer of the shares to him, any gain or loss realized on a
subsequent disposition of the shares will be treated as capital gain or loss.
Under such circumstances, GL will not be entitled to any deduction for federal
income tax purposes with respect to the Incentive Stock Option. The shares must
be held for more than one year for the gain or loss realized on the disposition
to qualify for long-term capital gain or loss treatment.
If an optionee disposes of the shares received upon the
exercise of an Incentive Stock Option either (1) within one year from the
transfer of the shares to him or (2) within two years after the Incentive Stock
Option was granted, the optionee will generally recognize ordinary compensation
income equal to the lesser of (a) the difference between the fair market value
of the shares on the date the Incentive Stock Option was exercised and the
exercise price of the shares, and (b) the amount of gain realized on the sale.
Any gain realized in excess of the compensation income recognized, and any loss
realized, will be long-term or short-term capital gain or loss, depending upon
the length of the period the optionee held the shares. If an optionee is
required to recognize ordinary compensation income as a result of the
disposition of shares acquired on the exercise of an Incentive Stock Option, GL
, subject to any applicable rules otherwise limiting an employer's deduction of
compensation, will be entitled to a deduction for an equivalent amount.
An optionee who is granted a Nonstatutory Stock Option is not
required to recognize taxable income at the time of grant, but, at the time of
exercise, must include in his gross income, for federal tax purposes, an amount
equal to the excess of the fair market value of the shares on the date of
exercise over the exercise price paid therefor. Subject to any applicable rules
otherwise limiting an employer's deduction of compensation, GL is entitled to a
corresponding deduction for the same amount.
The foregoing summary does not purport to be complete, and you
are advised to consult with your personal tax advisor as to the specific
consequences to you of the issuance of the options, the exercise thereof, and
the disposition of shares acquired upon such exercise, as well as the
consequences under applicable state law.