THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
COLUMBUS MCKINNON CORPORATION
LARCO INDUSTRIAL SERVICES LTD.
1997 STOCK OPTION PLAN
INTRODUCTION
This prospectus provides important information regarding the
Larco Industrial Services Ltd. 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. "Larco" refers to Larco
Industrial Services Ltd.
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 Larco on
March 26, 1997 for the purposes set forth below. However, the Board of Directors
terminated the Plan effective March 1, 1999, pursuant to an arrangement whereby
Larco became an indirect 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 62,249 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 Larco and its
affiliates, as defined in the Plan,
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
Larco and its affiliates by providing them a
proprietary interest in Larco
The Plan was designed to enhance Larco'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 Larco 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 Larco, members of the Committee serve for one-year terms and
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 has
granted options to employees of Larco who were determined by it to be key
employees on the date of grant. The Committee also granted options to a
non-employee director of Larco.
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. 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
Larco or an affiliate of Larco. In the event of your death while employed by
Larco or an affiliate, 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
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
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 provided such resale is
effected in the United States of America 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 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 Larco or any of its affiliates or
restricts the rights of Larco or any affiliate 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.
CANADIAN FEDERAL INCOME TAX TREATMENT
The following is a brief summary of the Canadian federal
income tax aspects of the Plan, based on existing law and regulations which are
subject to change. The application of provincial income taxes and any other
taxes, is not discussed.
An optionee is not required to recognize taxable income at the
time of grant of an option, but, at the time of exercise, must include in his
gross income, for Canadian 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 and any amount paid by the optionee to acquire the option.
If the exercise price related to the option is not less than
the fair market value of the shares at the time the agreement relating to the
option was made and the optionee is not related to Columbus McKinnon, the
optionee may deduct an amount equal to one-quarter of the amount otherwise
included in his income.
Neither Larco nor Columbus McKinnon is entitled to a deduction
for Canadian federal tax purposes with respect to the grant or exercise of an
option.
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 any applicable U.S., foreign, provincial, or state law.