PRELIMINARY PROXY STATEMENT
dated July , 1999
THE COLUMBUS MCKINNON SHAREHOLDERS COMMITTEE
c/o MacKenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
--------------------
1999 ANNUAL MEETING OF STOCKHOLDERS
August 16, 1999
PROXY STATEMENT IN SUPPORT OF SHAREHOLDERS
COMMITTEE NOMINEES FOR ELECTION AS DIRECTORS
AND PROPOSAL TO RESTORE BY-LAWS
This Proxy Statement is being furnished to holders of Common Stock, par
value $.01 per share (the "Common Stock"), of Columbus McKinnon Corporation, a
New York corporation (the "Company"), in connection with a proxy solicitation by
the Columbus McKinnon Shareholders Committee (the "Shareholders Committee").
Such proxies are to be used at the Annual Meeting of Stockholders of the Company
to be held at the Company's corporate offices, 140 John James Audubon Parkway,
Amherst, New York 14228, on August 16, 1999, at 10:00 a.m., local time, and at
any adjournment thereof (the "Annual Meeting"). The close of business on June
25, 1999, has been fixed as the record date for the determination of
shareholders entitled to receive notice of and to vote at the meeting. This
Proxy Statement is first being furnished to stockholders on or about ________,
1999. The address of the Shareholders Committee is 660 Madison Avenue, New York,
New York 10021.
COLUMBUS MCKINNON SHAREHOLDERS COMMITTEE
AND PARTICIPANTS IN THE SOLICITATION
The Columbus McKinnon Shareholders Committee is made up of the beneficial
holders of an aggregate of 1,245,545 shares or 8.49% of the Company's
outstanding Common Stock. The Shareholders Committee members have agreed between
themselves to act together to nominate and elect a slate of directors who would
constitute a majority or more of the Company's Board of Directors and would
pursue a value maximization strategy. The terms of their agreement are described
elsewhere herein and in Appendix A to this Proxy Statement.
The Shareholders Committee members are Metropolitan Capital Advisors, Inc.
and Metropolitan Capital III, Inc., acting on their own behalf and as
representatives of the affiliated entities named below (collectively,
"Metropolitan"), Scoggin, Inc. and Scoggin, LLC, acting on their own behalf and
on behalf of the affiliated entities named below (collectively, "Scoggin") and
Lakeway Capital Partners, LLC, acting on its own behalf and on behalf of the
affiliated entities named below (collectively, "Lakeway "). In addition to the
members of the Shareholders Committee, the following individuals
<PAGE>
and entities also may be deemed to be participants in the Shareholders
Committee's proxy solicitation: Bedford Falls Investors, L.P., of which
Metropolitan Capital Advisors, L.P. is the sole general partner, and
Metropolitan Capital Advisors, Inc., which, in turn, is the sole general partner
of Metropolitan Capital Advisors, L.P.; Metropolitan Capital Advisors
International Limited, of which Metropolitan Capital Partners III, L.P. is the
investment advisor, of which Metropolitan Capital III, Inc. is the sole general
partner; Jeffrey E. Schwarz and Karen Finerman, as shareholders, directors and
executive officers of Metropolitan Capital Advisors, Inc. and Metropolitan
Capital III, Inc. (collectively, sometimes herein referred to as the
"Metropolitan Participants"); Yaupon Partners, L.P. and Yaupon Partners II,
L.P., of which Lakeway Capital Partners, LLC is the sole general partner; Robert
F. Lietzow, Jr., as managing member of Lakeway Capital Partners, LLC
(collectively, sometimes referred to as the "Lakeway Participants"); Scoggin
Capital Management, L.P., of which Scoggin, Inc. is the sole general partner;
Scoggin International Fund, Ltd., of which Scoggin, LLC is the investment
advisor; and Curtis Schenker and Craig Effron, as shareholders, directors and
executive officers of Scoggin, Inc. and managing members of Scoggin, LLC
(collectively, sometimes referred to as the "Scoggin Participants"). All of such
persons or entities are sometimes collectively referred to herein as the
"Shareholder Participants".
WHY YOU SHOULD ELECT NEW INDEPENDENT DIRECTORS
The members of the Shareholders Committee are asking you to elect five new,
independent directors (the "Shareholder Nominees") to replace five incumbent
members of the seven-person Board of Directors of the Company. Our slate of
nominees, which includes experienced industry executives and significant
shareholders, is committed to pursuing a strategy designed to realize maximum
value for all shareholders.
We believe the incumbent Board has demonstrated that it views shareholder
interests as secondary to its intention to retain control and continue on their
present plan. We view that plan as a high-risk strategy which has resulted in a
large debt load, a negative tangible book value of approximately $169 Million
and high financing costs. At the same time, this new debt must be carried and
repaid by a business which is now more dependent on selling to customers in the
cyclical automotive industry. As a result, much of the Company's revenues will
now rest on strategic purchase decisions, trends and the economic health of the
automotive industry. We believe this is a significant shift from the Company's
core business as a producer of hoists and related products, where sales were
largely driven by non-discretionary equipment purchases, maintenance and
replacement.
It is time for shareholders to act to protect and maximize their
investment. We need your support because:
- In the period from July 9, 1997 to May 5, 1999, management has
pursued its aggressive acquisition strategy in what we see as the vain
hope that greater value for shareholders would be realized. Instead,
during that time, and prior to the news of our proposal to maximize
value, the price of your stock appreciated only 8.75%, as compared to a
46.8% appreciation in the S&P 500 Index.
- 2 -
<PAGE>
- Starting in 1998, management pushed its acquisition plan into
unfamiliar and cyclical industries with the acquisition of LICO, Inc.
("LICO") and Univeyor. As the Company stated, these acquisitions moved
the Company into the business of designing and supplying engineered
"built to order" systems "overnight." By doing so, management also
moved to a business where revenue is typically dependent on a contract
bidding process, often beset by delays, and recognized 12 to 18 months
after contract. This compares to its core business, where standard
product is often shipped, and revenue recognized, within a week.
Management is promising more of such acquisitions. Though management in
1998 confidently predicted that these acquisitions would generate $225
Million or more of revenues and nearly $25 Million of EBITA for fiscal
1999, they actually produced approximately $165 Million of revenues and
$15 Million of EBITA for the year. As a result, the Company is now
burdened with high debt which must be supported by new and
underperforming, non-core businesses. This significant shift from core
businesses, which began in January 1998 and was the rationale for the
LICO acquisition in March 1998 was followed by eroding share prices in
fiscal 1999. We believe that continuing that strategy will lead to more
of the same in the next year.
- Even as it searches for more acquisitions, management concedes that
it has not fully integrated even the businesses that already have been
acquired. Though on March 31, 1998, it heralded that it had
"successfully completed and integrated nine acquisitions," and that the
March 1998 acquisition of LICO would be "immediately accretive,"
management now says that it needs more time to show results. In its own
proxy material, management has said that integration of past
acquisitions is still ongoing, and that many cost reduction initiatives
are yet to be realized. We believe that the acquisition of LICO
significantly contributed to management lowering fiscal 1999 earnings
projections just months after the acquisition, and then failing to meet
even those lowered expectations.
- We believe the market has expressed its view of management's LICO
acquisition strategy, and of its ability to successfully integrate
non-core businesses. Over the thirteen months following the Company's
acquisition of LICO, the value of Company shares fell approximately
27%, while the S&P 500 Index rose approximately 20%. During that time
the Company continued to buy other businesses, and incur more debt, in
an effort to complement LICO and its other businesses. We believe the
market will reward a different strategy.
- We believe a combination of high debt and a low stock price will make
management's plan for additional acquisitions more expensive, difficult
and higher risk. Despite management acknowledging these difficulties,
the incumbent Board has refused our request to pursue alternative
strategies, such as sale or strategic merger of the Company, that may
provide higher returns to shareholders.
- The Shareholder Nominees include experienced industry executives, and
shareholders, who are committed to considering all alternatives to
enhance the Company's worth, and to maximizing value for shareholders.
They will focus management on realizing the benefits of
- 3 -
<PAGE>
the current businesses and explore and evaluate alternatives. In
particular, they intend to fully evaluate whether a sale of the
business, or a strategic merger with other industry participants would
provide more value to shareholders than continued independent
operation.
Management confidently says that now is not the time to sell the
Company, but management appears unwilling even to explore such a possibility. In
its Definitive Proxy Statement, filed with the SEC on July 13, 1999, management
disclosed that it had agreed to pay Goldman Sachs & Co. $400,000 for assistance
in this proxy contest and had offered Goldman Sachs the right to be the
Company's exclusive financial advisor in the event of certain unsolicited bids
for the Company or if the Company were to be sold. From management's disclosure,
we believe that Goldman Sachs was not retained to explore whether a sale of the
Company would maximize value for shareholders. We believe that it is a mistake
to pay Goldman Sachs a significant fee to help defend their strategy instead of
instructing them to explore all available options including whether their
strategy is the right one for the Company.
OTHER PROPOSALS FOR CONSIDERATION AT THE MEETING
The Shareholders Committee also is soliciting your proxy in support of a
proposal to restore the Company's by-laws to those in effect on May 16, 1999
(the "Original By-Laws"), including restoring the right of shareholders to
nominate directors and propose shareholder actions at any time. If approved,
this proposal will serve to nullify by-law changes made following the
announcement of our intention to nominate directors, as well as to protect
shareholders from any further by-law changes that the incumbent Board may seek
to implement prior to the Annual Meeting.
The Shareholders Committee is not making any recommendation with respect to
how shareholders should vote on the management's proposal to approve the
Amendment and Restatement of the Columbus McKinnon Corporation 1995 Incentive
Stock Option Plan (the "Plan Restatement"). The Shareholders Committee intends
to abstain from voting on the Plan Restatement. Any proxies returned to the
Shareholders Committee without being marked with respect to the Plan Restatement
will be cast as abstaining on such question. At the present time, the
Shareholders Committee does not intend to propose any other nominees or any
other actions for shareholder consideration at the Annual Meeting, but may to
the extent permitted by law and the Company's by-laws do so in response to
management actions that may be taken or disclosed after the date hereof.
- 4 -
<PAGE>
SUPPORT A PLAN TO MAXIMIZE SHAREHOLDER VALUE
Management wants time for its strategy to show results and increase value
for shareholders, but we believe management has had time and has not
demonstrated the success of that plan. For three years, shareholders have waited
patiently for management's strategy to deliver results. Instead, in the thirteen
months following the LICO acquisition, while the stock market continued to soar
and the economy was healthy, your shares lost over 27% of their value. In our
opinion a new strategy must be implemented, and the time to do so is now. We
don't think that shareholders can afford another year of declining share prices.
We proposed and supported the 1997 acquisition of Yale since it was
targeted at the Company's core hoist business and had the potential for
significant synergies. As subsequent acquisitions departed from the core
business, and share value has stagnated, management has declared the need for
more time to integrate Yale and other acquired businesses, to make other
acquisitions and to attain greater visibility for the Company in the investment
community. According to management, these three steps would lead to higher
values for shareholders.
In our view, management has had enough time to implement all three elements
of its plan. The results: synergies, cost savings and operating efficiencies
have not yet been fully realized; new acquisitions have burdened the Company's
capital structure raising long-term debt from $8.3 Million at March 31, 1997, to
$426.6 Million at March 31, 1999. Annual interest costs have risen from $5.3
Million in fiscal 1997, to $35.9 Million in fiscal 1999. The Company is more
widely followed by analysts and investors, and the stagnant share price shows
the market's disapproval of management's plan and its prospects.
Management's largest and most heralded acquisition -- LICO -- did not build
the core business, but was a new venture into the unfamiliar business of
designing and building customized systems, primarily for the automotive
industry. The acquisition resulted in a business heavily in debt, primarily
serving a highly cyclical industry sector. LICO's failure to perform to
expectations has contributed to disappointing earnings, and a stock price that
declined 27% from the date after its completion to the day before we notified
the Company of our plans. We believe, and management has acknowledged, that it
has left the Company with little financial flexibility to make more attractive
acquisitions that may be available in its core business.
At the time of the acquisition, LICO was held out as a "major component" of
management's plan. It represents the kind of "strategic" acquisition that the
incumbent Board today says it will continue to look for in the future. We think
that LICO represents a poor investment of Company resources. In our opinion, it
is the result of a single-minded effort to buy businesses, with little regard to
whether management has the demonstrated ability to integrate an unfamiliar
business in a timely or efficient way. The purchase price for LICO was
approximately 11 x fiscal 1999 EBITA of $14.9 million for the entire
solutions/automotive segment. Fifteen months later, the refusal of management to
recognize that LICO was a poor investment indicates to us that we can expect
future acquisitions to repeat the LICO experience.
- 5 -
<PAGE>
We believe that shareholders cannot afford more of the same. Voting for the
incumbent Board endorses the LICO strategy and more acquisitions like it. Voting
for the Shareholder Nominees is voting to explore all means to realize value
from current businesses while focusing operations on maximizing profitability of
the core businesses.
As shareholders, we have had discussions with industry experts, investment
bankers, and with companies that expressed interest in negotiating with
management to participate in a purchase of the Company, or a strategic merger
with the Company. Those parties indicated an interest in pursuing acquisition
discussions with the Company, if management indicated a willingness to consider
them. As a result of these discussions, we have repeatedly asked management to
discuss with potential buyers and others the alternatives that could be in
shareholders' best interests. Management has told us that they are not
interested in such discussions, and we understand that they have even refused to
discuss such a transaction with at least one interested party.
Members of the Shareholders Committee have performed their own analysis of
the values that may be attained on sale or merger of the Company, and have
reviewed those of independent analysts, such as those recently published by
First Union. These analysis and our discussions lead us to believe that, under
current market conditions, alternatives are available that could generate a
price for the Company that would represent a significant premium above the
market prices that have persisted during the last year. We believe these
alternatives include sale to a financial buyer, merger with a strategic buyer,
or a combination of such alternatives, and others.
There is no assurance that any such transaction would be consummated, that
stockholder value will be maximized, or that a significant premium will be
realized, if the Shareholder Nominees are elected, or the Original By-laws are
restored. However, in deciding who to support, you should carefully consider
whether, even if completely successful, management's plan would attain such
values in one, two or even three years. At the same time, consider the risk to
your investment if management completely fails to execute on its plan, or fails
to execute on schedule. Finally, even if you think management's plan can
succeed, you should consider whether you want a Board that is open to exploring
the alternatives, or one that has refused invitations to explore alternatives
that may be available.
WE HAVE A SINGLE PURPOSE - TO MAXIMIZE SHAREHOLDER VALUE
The Shareholder Nominees are supported by long-time investors who in some
cases have held the Company's Common Stock for over three years. During that
time, we believe management has steadfastly pursued only its strategy of buying
and attempting to integrate other businesses. Jeffrey E. Schwarz and Robert F.
Lietzow, Jr., Shareholder Nominees, repeatedly and openly encouraged management
to explore other alternatives in the interest of all shareholders. The continued
failure of management and the incumbent Board to do so has led the Shareholders
Committee to seek election of new directors who would pursue what we believe to
be the interests of shareholders.
The Shareholder Nominees and the Shareholders Committee have no plan or
intention to remove or replace officers of the Company or actively participate
in day-to-day management. Any
- 6 -
<PAGE>
suggestion otherwise is nothing more than a tactic designed to alarm
shareholders in order to further entrench the incumbent Board. The Shareholders
Committee seeks only to replace a majority of incumbent directors who have
established the Company's current strategy to the exclusion of all others. The
Shareholders Committee wants to elect a new majority that will consider
alternatives to management's strategic plan and pursue the plan best for
shareholders.
Our purpose is to offer shareholders a choice of direction for the Company.
You should consider whether management and the incumbent Board have other
purposes. In our view, management's strategy has failed to reward shareholders
and they are asking for "years" more to show that it can. In an attempt to
guarantee those "years," management has used corporate assets and personnel to
hinder our attempts to offer shareholders a choice. Faced with our announcement
that we intended to nominate candidates, the incumbent Board changed
long-standing by-laws to make it more difficult for us to do so. Then,
management used the Company's money to sue all the members of the Shareholders
Committee.
We have committed our time and resources to offer shareholders a choice for
the direction of their investment: continue management's plan for LICO-type
acquisitions, or choose a shareholder-nominated Board which will look at all
alternatives.
THE SHAREHOLDER NOMINEES ARE EXPERIENCED EXECUTIVES
WHO HAVE DELIVERED SHAREHOLDER VALUE
The Shareholder Nominees include experienced and seasoned executives who
each have experience in situations where the inherent value of a business is not
reflected in its stock price. They have created value for shareholders through
operating businesses, buying and integrating businesses, recapitalization, and
where appropriate, by concluding that sale was the best means to realize value.
If the Shareholder Nominees are elected, they are committed to pursuing a value
maximization strategy, including immediate exploration of the sale of the
Company. To assist in this evaluation, they expect to immediately cause the
Company to retain a nationally recognized investment banking firm.
The Shareholder Nominees include experienced public company executives,
including Larry N. Katsoulis, the former President of Yale International, Inc.,
which was acquired by the Company in 1997, and George G. Raymond, Jr., former
CEO of Raymond Corporation, a major manufacturer of narrow aisle forklifts. Both
were instrumental in operating those companies, and individually or together
with Shareholder Participants, worked to accomplish their sale at a significant
premium for shareholders. As a result, shareholders of Yale received a premium
of 47.7% over the price of Yale shares on May 15, 1996, and Raymond Corp.
shareholders realized a premium of 51.77% over the price of shares on February
17, 1997.
Other Shareholder Nominees are able to present both the operator's view and
the investor perspective on operations, strategic alternatives and sale. Mr.
Jonathan Guss is the Chief Executive Officer of Bogen Communications
International, Inc. ("Bogen"), a publicly owned manufacturer of
- 7 -
<PAGE>
audio and telecommunications equipment, and since August 1994, a director of
Alliant Techsystems Inc., ("ATK"), a NYSE-listed major supplier of defense
equipment and rocket launch systems to the United States and private space
launch contractors. Mr. Guss has an extensive background of buying, operating
and selling manufacturing businesses, as well as evaluating a broad range of
alternatives to enhance shareholder value. Over a six-year period, he was a key
executive in operating and selling assets that serviced the commercial baking
industry, returning to investors over five times their investment. In 1994, with
ATK stock trading for approximately $20 per share, he was part of a
shareholder-nominated slate of directors which was elected to explore
alternatives to enhance shareholder value. Since that time, ATK has acquired
Hercules Aerospace, sold significant business units and accomplished a
substantial repurchase of its own shares, in the market, in privately-negotiated
transactions and in a self-tender. Five years later, at July 9, 1999, ATK stock
closed at a price of $84.25 per share.
Messrs. Jeffrey E. Schwarz and Robert F. Lietzow, Jr. each brings
substantial investment experience and a shareholder perspective to the Board. As
representatives of significant shareholders, their interests are aligned with
yours. Each has served as the catalyst for sale transactions that have delivered
substantial value to shareholders. On behalf of Metropolitan, they have actively
advocated the sale of National Convenience Stores in 1996, Yale Incorporated in
1996, Raymond Corporation in 1997 and Circon Corporation in 1998. In each case,
as here, they first advocated such transactions to management, and turned to
shareholders only when management refused to consider alternatives that could
enhance shareholder value. In such situations, the companies were each sold for
premiums of between 47.7% and 102.4% above the stock prices prior to
Metropolitan announcing its proposal to explore sale and other alternatives.
Each also has closely followed the Company over the past three years, and is
qualified to help determine and implement the best strategies for providing
value to fellow shareholders.
The incumbent Board has had years to show results. Despite an
under-performing stock price, they have chosen to restrict the Company's
alternatives to management's acquisition plan. Even after management has had
time to implement its plan, and has failed to deliver results, they refuse to
take the initiative to seek out, or even listen to, alternatives that would
maximize shareholder value. If you wish to have alternatives explored to
maximize the value of your shares, then the Shareholders Committee urges you to
support the Shareholder Nominees.
YOUR VOTE IS IMPORTANT
TO VOTE FOR THE SHAREHOLDER NOMINEES AND RESTORE THE ORIGINAL BY-LAWS, YOU
MUST SUBMIT THE ENCLOSED GOLD PROXY CARD AND MUST NOT SUBMIT THE COMPANY'S PROXY
CARD, EVEN IF YOU WISH TO VOTE FOR ONE OR MORE OF THE COMPANY NOMINEES.
If you agree with the reasons for the Shareholders Committee's solicitation
set forth herein, and believe that the election of the Shareholder Nominees to
the Board of Directors can make a difference, we urge you to vote for the
election of the Shareholder Nominees and to restore the Original By-Laws, no
matter how many or how few shares you own, by signing, dating and mailing the
enclosed GOLD proxy card.
- 8 -
<PAGE>
The Shareholders Committee urges you NOT to sign any proxy card sent to you
by the Company. ONLY YOUR LATEST DATED PROXY WILL COUNT AT THE ANNUAL MEETING.
If your shares are held in the name of a brokerage firm, bank or nominee, only
they can vote such shares and only upon receipt of your specific instructions.
Accordingly, please contact the person responsible for your account and give
instructions for such shares to be voted.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN VOTING YOUR SHARES, PLEASE
CALL THE SHAREHOLDERS COMMITTEE REPRESENTATIVE, MACKENZIE PARTNERS, INC., AT
(800) 322-2885.
ELIGIBLE SHARES AND VOTE REQUIRED
Only holders of Common Stock of record at the close of business on June 25,
1999 (the "Meeting Record Date") will be entitled to vote at the Annual Meeting.
Holders of record of shares of Common Stock on the Meeting Record Date are urged
to submit a proxy even if such shares have been sold after the Meeting Record
Date. 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. At the close of business on June 25, 1999, the Company had
outstanding __________ shares of Common Stock, the holders of which are entitled
to one vote per share on each matter properly brought before the Annual Meeting.
Each share of Common Stock entitles its owner to one vote. A plurality of votes
cast at the Annual Meeting is necessary to elect each of the Shareholder
Nominees and a majority of votes cast is necessary to restore the Original
By-Laws. For information concerning voting procedures at the Annual Meeting, see
"Voting and Proxy Procedures."
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. A majority of the votes cast is
required to approve the adoption of restoring the Original By-laws. 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. Abstentions, broker non-votes and
withheld votes will not be considered "votes cast."
ADDITIONAL PARTICIPANT INFORMATION
Messrs. Katsoulis, Guss and Raymond also may be deemed "participants" in
the solicitation of proxies for their election, and may be referred to herein,
along with Messrs. Schwarz and Lietzow, as the "Nominee Participants. "
In addition, 17,800 shares of Common Stock are beneficially owned by
employees of certain Shareholder Participants, or by family members of certain
of the Shareholder Participants, or by entities of which such Shareholder
Participants or family members are owners, beneficiaries or trustees. Such
persons or entities have advised the Shareholders Committee that such shares are
expected to be cast in favor of the Shareholder Nominees and the restoration of
the Original By-Laws. The Shareholder Participants disclaim beneficial ownership
of such shares of Common Stock.
- 9 -
<PAGE>
Further information regarding relationships between and among the members
of the Shareholders Committee, the Shareholder Participants and certain other
persons, and further information regarding Common Stock ownership by the
Shareholders Committee, its members and certain of their affiliates is set forth
in Appendix A hereto.
Information concerning the Shareholder Nominees is set forth below under
"Shareholder Nominees for Election as Directors." Additional information
concerning the Shareholder Committee, the Shareholder Nominees and their
holdings of Common Stock is set forth in Appendices A and B hereto.
CONTACTS WITH THE COMPANY
Over the past three years, Shareholder Participants have had numerous
conversations with Company management and others to discuss strategic
alternatives and means of increasing the value of the Company's Common Stock.
The description of certain of these contacts is set forth below, but is not
intended to describe each or every individual conversation or contact that may
have been had over such period, or every subject that may have been discussed
with management, or otherwise.
In 1996, representatives of Metropolitan proposed to management that the
Company explore the acquisition of Yale International, Inc. ("Yale"), a
publicly-owned manufacturer of industrial equipment. At and around the time of
such contacts, with Yale stock trading for $15.00 per share, certain of the
Metropolitan Participants were seeking to have the Yale Board of Directors
explore sale of Yale. As a result of such discussions, the Yale Board explored
alternatives and agreed to sell Yale to the Company in December, 1996 for a
price of $24 per share
In July of 1997, Metropolitan contacted management and proposed that the
Company consider a sale of the Company as the most effective mechanism for
maximizing shareholder value. Throughout 1997, 1998 and 1999, certain
Shareholder Participants continued to encourage management to take steps to
enhance shareholder value, including through the possible sale of the Company or
the repurchase and retirement of Common Stock. Certain Shareholder Participants
also have contacted potential financial and strategic buyers, industry and
investment banking contacts and others to determine the values that would be
available to shareholders in such transactions. Shareholder Participants
requested that management be open to discussions with such parties to determine
whether shareholders interests were best served by such transactions. Management
rejected our request.
In 1998, at a time when Company shares were trading at the lowest values
since its initial public offering, Messrs. Schwarz and Lietzow, both now
Shareholder Nominees, proposed that the Company use a portion of its remaining
borrowing capacity to repurchase and retire Common Stock and enhance value for
continuing shareholders. Management instead used Company money to fund the
ESOP's purchase of 479,900 shares and transfer value and votes to the ESOP.
This, despite the fact that, in our view, the ESOP already had enough shares for
years to come.
At various times from Fall 1998 through March, 1999, Messrs. Schwarz and
Lietzow, as well as certain of the Scoggin Parties, all repeated their request
that Management consider sale of the Company as the best alternative to maximize
shareholder value.
- 10 -
<PAGE>
Following an industry conference in March 1999, Mr. Jeffrey E. Schwarz met
with Mr. Timothy Tevens, at which time Mr. Tevens stated that the Company's
latest acquisition had been difficult to accomplish as a result of the Company's
low stock price and high leverage. Mr. Schwarz suggested that a sale of the
Company or other transaction with a financial or strategic buyer might be
appropriate to achieve higher value for shareholders. Mr. Tevens stated that
management was not interested in pursuing any such alternative.
On March 17, 1999, Messrs. Schwarz and Lietzow met with management at the
Company's headquarters in Amherst, New York and again suggested that management
consider a range of significant strategic transactions that would enhance
shareholder value, including sale of the Company, seeking financial partners to
effect a major recapitalization of the Company or similar transactions.
Management again rejected the request to explore alternatives to its own
strategy.
By letter dated May 5, 1999, the Shareholders Committee informed the
Company that it planned to nominate directors for election at the Company's
upcoming Annual Meeting and that such nominees would be committed to pursuing a
plan to maximize shareholder value, including through a sale of the Company. On
June 17, 1999, Bedford Falls Investors, L.P., delivered to the Company its
nominations of the Shareholder Nominees.
MANAGEMENT ACTIONS IN RESPONSE TO THE SHAREHOLDER NOMINATIONS
On the morning of May 18, 1999, management issued a press release and held
a conference call with shareholders in which management described the financial
results for the year ended March 31, 1999, other business developments and
future prospects. Management did not disclose that on the previous day the Board
of Directors had amended the Company's by-laws to impose new requirements for
shareholder nominations of directors and shareholder proposals (the "Amended
By-Laws"). The Company refused to address the Shareholders Committee proposal
for the nomination of directors, and adoption of a value maximization strategy.
Later that same day, the Company filed with the Securities and Exchange
Commission a Form 8-K, which included the Amended By-Laws approved the previous
day. The Amended By-Laws, among other things, impose new requirements for any
shareholder seeking to nominate directors, including the requirement that such
nominations and shareholder proposals be made at least 60 days and in certain
cases as long as 90 days, in advance of the date of the Annual Meeting,
preserving for management the ability to propose its own nominees and other
actions at any time, and not providing for any means by which shareholders can
propose nominees or proposals in response or in opposition to such management
proposals. Through the date hereof, such Amended By-Laws have not precluded the
Shareholders Committee from nominating persons for election to the Company's
Board; however, such Amended By-laws may be used by the Company to disqualify
substitute or additional nominees that may be hereafter proposed shareholders.
In addition, management has the power to adopt additional by-law provisions
prior to the Annual Meeting without notice or shareholder approval, which may
limit shareholders in their actions or affect corporate governance after the
meeting. The proposal to restore the Original By-Laws would eliminate such new
requirements and allow shareholders to nominate directors and make such
proposals in the manner permitted by the Company's by-laws at all times since
the Company became publicly owned and prior to May 17, 1999.
- 11 -
<PAGE>
By letter dated May 24, 1999, the Shareholders Committee advised management
that it would shortly submit its complete nominations. On May 26, 1999,
management instituted suit against the Shareholder Participants in the United
States District Court Southern District of New York alleging, in part, that the
Shareholder Participants had illegally concealed that they were cooperating to
propose Nominees to the Board in order for management to explore a sale of the
Company. In addition, the Company alleged violations of Sections 13 and 14 of
the Securities Exchange Act of 1934. On July 14, 1999 the Shareholders Committee
filed a counterclaim alleging violations of various proxy rules and regulations.
Instead of allowing shareholders to choose freely, management has instead
determined to utilize their offices and your money to prevent or impede the
Shareholder Committee from nominating a slate of directors. What are they afraid
of? All we ask is to allow shareholders to make a choice in an impartial
election -- all they want is to pre-empt shareholder democratic contests.
SHAREHOLDER NOMINEES FOR ELECTION AS DIRECTORS
At the Annual Meeting, seven directors are to be elected to fill seven
vacancies on the Board of Directors. The directors so elected will serve in such
capacity for a one-year term set to expire at the Company's 2000 Annual Meeting
of Stockholders, and until their successors are elected and qualified.
The Shareholders Committee is proposing the election of five Shareholder
Nominees to the Board of Directors which, if elected, will constitute a majority
of the Board of Directors. The Shareholder Committee does not seek to replace
the incumbent directors who are employees and officers of the company. Proxies
delivered to the Shareholders Committee cannot be voted for more than five
nominees. The Shareholders Committee does not expect that any of the Shareholder
Nominees will be unable to stand for election, but, in the event that a vacancy
in the slate of the Shareholder Nominees should occur unexpectedly, the shares
of Common Stock represented by the enclosed GOLD proxy card will be voted for a
substitute candidate to be selected by the Shareholders Committee.
IF YOU WISH TO VOTE FOR THE SHAREHOLDER NOMINEES, YOU MUST SUBMIT THE
ENCLOSED GOLD PROXY CARD AND MUST NOT SUBMIT THE COMPANY'S PROXY CARD, EVEN IF
YOU WISH TO VOTE FOR ANY OF THE COMPANY NOMINEES. ONLY VOTES FOR THE SHAREHOLDER
NOMINEES MAY BE CASTED ON THE GOLD PROXY CARD.
Certain management Nominees elected to the Board of Directors may decline
to serve, in which case the Shareholder Nominees will seek to fill any of such
vacant positions by appointing other qualified individuals, including, possibly,
members of management. If such individuals decline to serve on the Board, or if
vacancies exist even after their appointment, the Shareholder Nominees will
either leave such positions vacant or will seek to fill such positions as they
deem appropriate.
The following information concerning age, principal occupation, business
experience during the last five years and directorships of other publicly-owned
companies has been furnished to the Shareholders
- 12 -
<PAGE>
Committee by the Shareholder Nominees, all of whom have expressed their
willingness to serve on the Board of Directors of the Company.
LARRY N. KATSOULIS (age 53 )-- Since 1997, Mr. Katsoulis's principal
occupation has been President, Chief Executive Officer and a director of Pillar
Corporation, a privately-held corporation engaged in manufacturing induction
heating power supplies. From 1988 to 1997 Mr. Katsoulis served as an executive
officer of Yale International, Inc. ("Yale"), a leading manufacturer of hoists
and material handling equipment. Mr. Katsoulis served as President of Yale from
1994 to 1997.
JONATHAN G. GUSS (age 40)-- Since 1997, Mr. Guss's principal occupation has
been the Chief Executive Officer and a director of Bogen Communications
International, Inc., a NASDAQ-listed provider of telecommunications peripherals
and sound processing equipment. Mr. Guss also currently serves as a member of
the Executive Committee of the Board of Directors. Since May 1990, Mr. Guss has
been a principal and President of Active Management Group, Inc., a firm that
provides turnaround management services. Since August 1992, Mr. Guss has also
been a principal and Chief Executive Officer of EK Management, Inc., the general
partner of EK Associates, L.P. (also known as "Ekco/Glaco Ltd."), a limited
partnership which, until 1998, provided goods and services to the baking
industry. In addition, since August 1994 Mr. Guss has been a director of Alliant
Techsystems Inc., a NYSE-listed developer of munitions, solid propulsion systems
and defense electronic systems. Mr. Guss is a 1985 graduate of the Harvard
Business School and a 1981 graduate of Reed College.
GEORGE G. RAYMOND, JR. (age 78)--Mr. Raymond is the retired Chairman of the
Board and Chief Executive Officer of Raymond Corporation, a leading supplier of
narrow aisle forklifts. Mr. Raymond served as Chairman of the Board and as an
officer of Raymond Corporation from 1973 until 1995. Mr. Raymond currently is a
managing member of Sankaty Capital Management, LLC, the general partner of
Sankaty Capital Partners, L.P., a private investment partnership. He also is a
lifetime trustee of Alfred University.
JEFFREY E. SCHWARZ (age 40)--Since July 1992, Mr. Schwarz has been the
Chief Executive Officer and a director of Metropolitan Capital Advisors, Inc.
("Metropolitan"), an investment advisory firm. Mr. Schwarz also serves as a
director of two private companies that are affiliated with Metropolitan, KJ
Advisors Inc. and Metropolitan Capital Advisors III, Inc. Since November 1997,
Mr. Schwarz has served as non-executive Co-Chairman of Bogen Communications
International, Inc., a NASDAQ-listed provider of telecommunications peripherals
and sound processing equipment. From October 1997 to April 1999 Mr. Schwarz also
was a director of Emultek Ltd., an American Stock Exchange listed Israeli
company which provides simulation technology for the development, promotion and
support of electronic products. In addition, Mr. Schwarz serves as the Chairman
of EK Management, Inc., the general partner of EK Associates, L.P. (also known
as "Ekco/Glaco Ltd."), a limited partnership which provided goods and services
to the baking industry. Mr. Schwarz graduated summa cum laude from the
University of Pennsylvania's Wharton School receiving a B.S. in Economics, with
a concentration in Accounting, and an M.B.A., with a concentration in Finance.
- 13 -
<PAGE>
ROBERT F. LIETZOW, JR., (age 34)-- Mr. Lietzow is the managing member of
Lakeway Capital Partners, LLC, the general partner of Yaupon Partners, L.P. and
Yaupon Partners II, L.P., each an investment limited partnership. Prior to the
formation of Lakeway Capital Partners, LLC, Mr. Lietzow served as Vice President
of Metropolitan Capital Advisors, Inc., from November 1994 until June 1998.
During the period from February 1992 until October 1994, Mr. Lietzow was the
Managing Director of Lietzow Investments, an investment management company.
The Shareholders Committee has agreed that it will bear all costs and
expenses of, and indemnify against any and all liability incurred by each
Shareholder Nominee in connection with the Shareholder Nominee being a candidate
for election to the Board of Directors. Each Shareholder Nominee, other than
Messrs. Schwarz and Lietzow, will also be paid by a fee of $10,000 for service
as a nominee, whether or not elected. The Shareholders Committee will not seek
reimbursement of such fees from the Company. Each Shareholder Nominee will
receive usual directors' fees upon his election as a director of the Company in
accordance with the Company's practice.
Except as set forth in this Proxy Statement or in the Appendices attached
hereto, none of the members of the Shareholders Committee, any of the persons
participating in this solicitation on behalf of the Shareholders Committee, any
of the Shareholder Nominees, nor any associate of any of the foregoing persons
(i) owns beneficially, directly or indirectly, or has the right to acquire, any
securities of the Company or any parent or subsidiary of the Company, (ii) owns
any securities of the Company of record but not beneficially, (iii) has
purchased or sold any securities of the Company within the past two years, (iv)
has incurred indebtedness for the purpose of acquiring or holding securities of
the Company, (v) is or has been a party to any contract, arrangement or
understanding with respect to any securities of the Company within the past
year, (vi) has been indebted to the Company or any of its subsidiaries since the
beginning of the Company's last fiscal year or (vii) has any arrangement or
understanding with respect to future employment by the Company or with respect
to any future transactions to which the Company or any of its affiliates will or
may be a party. In addition, except as set forth in this Proxy Statement or in
the Appendices hereto, to the best knowledge of the Shareholders Committee, none
of the members of the Shareholders Committee, any of the persons participating
in this solicitation on behalf of the Shareholders Committee, any of the
Shareholder Nominees, nor any associate or immediate family member of any of the
foregoing persons has had or is to have a direct or indirect material interest
in any transaction with the Company since the beginning of the Company's last
fiscal year, or any proposed transaction, to which the Company or any of its
affiliates was or is a party.
None of the corporations or organizations in which any of the Shareholder
Nominees has conducted their principal occupation or employment is a parent,
subsidiary or other affiliate of the Company and none of the Shareholder
Nominees holds any position or office with the Company, has any family
relationship with any executive officer or director of the Company or each
other, or has been involved in any legal proceedings of the type required to be
disclosed by the rules governing this solicitation other than as described
herein.
PROPOSAL TO RESTORE ORIGINAL BYLAWS
- 14 -
<PAGE>
By letter dated June 16, 1999, Bedford delivered to the Company a proposal
to be presented for Stockholder approval at the Company's Annual Meeting. Such
proposal is as follows:
"That the Company's by-laws be amended to restore such by-laws, in their
entirety, to the form in effect on May 16, 1999, and that such amended by-laws
be effective immediately upon approval thereof by shareholders and for purposes
of any proposals or director nominations desired to be made by shareholders at
such meeting."
The purpose of the proposal is to effectively rescind by-law amendments
approved by the incumbent Board on May 17, 1999, as well as any other amendments
that may be approved prior to the Annual Meeting. The adoption of such proposal
would re-establish for shareholders the same right and ability to propose
actions or nominees as existed prior to the May 17, 1999 amendments, which
include the right of shareholders to make proposals and nominations without
having to provide advance notice to the Company. We believe that adopting the
proposal to restore the by-laws will provide shareholders with greater
flexibility in their ability to participate in issues concerning corporate
governance, including initiating shareholder proposals and nominating directors.
If so amended, the Shareholders Committee and its members would have the same
rights as all other shareholders to make nominations and proposals, and may
exercise such rights in furtherance of their proposal to elect nominees who
would pursue a strategy of maximizing shareholder value. However, if the Board
makes no additional changes to the Company's by-laws prior to the Annual
Meeting, adoption of the proposal is unnecessary to ensure that the Shareholder
Nominees stand for election.
SOLICITATION EXPENSES
Pursuant to an agreement among the members of the Shareholders Committee
dated as of May 3, 1999 (the "Agreement"), the expenses of preparing, printing
and distributing this Proxy Statement, the accompanying form of proxy and any
other soliciting proxies for the election of the Shareholder Nominees will be
borne by the members of the Shareholders Committee in proportion to the number
of shares of the Company's Common Stock each member and its affiliates owns.
Such expenses are estimated to range from $ to $ , in part dependent upon the
nature and extent of litigation instituted or pursued by Management. The total
expenditures of the Shareholders Committee to date are estimated to be
approximately $ . The Shareholders Committee intends to seek reimbursement from
the Company without a vote of the Company's security holders for the
Shareholders Committee's expenses incurred in connection with the Shareholders
Committee's solicitation of proxies.
The Shareholders Committee has engaged MacKenzie Partners, Inc. for
consulting services and to assist in the solicitation process. MacKenzie
Partners, Inc. will be paid its reasonable and customary fees for its services,
which will not be less than $15,000 and will be reimbursed for its expenses.
MacKenzie Partners, Inc. will use approximately persons in its solicitation
efforts. In addition to the use of the mails, solicitations of proxies may be
made by means of personal calls upon, or telephonic communications to or with
shareholders or their personal representatives by the Shareholders Committee,
employees of members of the Shareholders Committee and by MacKenzie Partners,
Inc.
- 15 -
<PAGE>
Copies of the Shareholders Committee's soliciting materials will be furnished to
banks, brokerage houses, fiduciaries and other nominees for forwarding to
beneficial owners of shares and the Shareholders Committee will reimburse them
for their reasonable out-of-pocket expenses for forwarding such materials.
VOTING SECURITIES OUTSTANDING;
INFORMATION ABOUT THE COMPANY
There are 14,663,197 shares of Common Stock constituting the only class of
outstanding voting securities, 13,766,083 of which were reported outstanding by
the Company in its Form 10-Q for the quarter ended December 28, 1998, and an
additional 897,114 newly issued shares reported outstanding by the Company in
its March 1, 1999 Press Release. Each share of Common Stock entitles its owner
to one vote.
Certain information regarding the Company's Common Stock, the beneficial
ownership of Company Common Stock held by Company directors, nominees,
management and 5% shareholders, other information concerning the Company's
management, and the procedures for submitting proposals for consideration at the
next Annual Meeting of Shareholders is or will be contained in the Company's
proxy statement and is incorporated herein by reference. The Company has
provided its stockholders with its Annual Report to Stockholders for the year
ended March 31, 1998 and with its Form 10-Q for the quarter ended December 27,
1998, which contain certain information as to the Company's financial condition
and other matters.
The Shareholders Committee assumes no responsibility for the accuracy or
completeness of any information contained herein which is based on, or
incorporated by reference to, the Company's proxy statement, its Annual Report
to Stockholders for the year ended March 31, 1998 or its Form 10-Q for the
quarter ended December 27, 1998.
VOTING AND PROXY PROCEDURES
For the proxy solicited hereby to be voted, the enclosed GOLD proxy card
must be signed, dated and returned to the Columbus McKinnon Shareholders
Committee, c/o MacKenzie Partners, Inc., 156 Fifth Avenue, New York, New York
10010 in the enclosed envelope in time to be voted at the Annual Meeting. IF YOU
WISH TO VOTE FOR THE SHAREHOLDER NOMINEES, OR TO RESTORE THE ORIGINAL BY-LAWS
YOU MUST SUBMIT THE ENCLOSED GOLD PROXY CARD AND MUST NOT SUBMIT THE COMPANY'S
PROXY CARD, EVEN IF YOU WISH TO VOTE FOR ANY OF THE COMPANY NOMINEES. If you
have already returned the Board of Directors' proxy card to the Company, you
have the right to revoke it as to all matters covered thereby and may do so by
subsequently signing, dating and mailing the enclosed GOLD proxy card.
ONLY YOUR LATEST DATED PROXY WILL COUNT AT THE ANNUAL MEETING.
Execution of a GOLD proxy card will not affect your right to attend the
Annual Meeting and to vote in person. Any proxy may be revoked as to all matters
covered thereby at any time prior to the time a vote is taken by (i) filing with
the Secretary of the Company a later dated written revocation, (ii)
- 16 -
<PAGE>
submitting a duly executed proxy bearing a later date to the Secretary of the
Company or (iii) attending and voting at the Annual Meeting in person.
Attendance at the Annual Meeting will not in and of itself constitute a
revocation.
Shares of Common Stock represented by a valid, unrevoked GOLD proxy card
will be voted as specified. You may vote FOR the election of the Shareholder
Nominees or withhold authority to vote for the election of the Shareholder
Nominees by marking the proper box on the GOLD proxy card. You may also withhold
your vote from any of the Shareholder Nominees by writing the name of such
nominee in the space provided on the GOLD proxy card. You may vote in favor of
restoring the Original By-Laws, or withhold authority to approve such proposal,
by marking the proper box on the GOLD proxy card. If no specification is made,
such shares will be voted FOR the election of all of the Shareholder Nominees
and in favor of restoring the Original By-laws.
Except as set forth in this Proxy Statement, the Shareholder Committee is
not aware of any other matter to be considered at the Annual Meeting. However,
if the Shareholder Committee learns of any other proposals made at a reasonable
time before the Annual Meeting, the Shareholder Committee will either supplement
this Proxy Statement and provide an opportunity to Stockholders to vote by proxy
directly on such matter or will not exercise discretionary authority with
respect thereto. If other proposals are made thereafter, the persons named as
proxies on the enclosed GOLD proxy card will vote proxies solicited hereby in
their discretion.
If your shares are held in the name of a brokerage firm, bank or nominee,
only they can vote such shares and only upon receipt of your specific
instructions. Accordingly, please contact the person responsible for your
account and instruct that person to execute on your behalf the GOLD proxy card.
Only holders of record of Common Stock on the Annual Meeting Record Date
established by the Board of Directors for the Annual Meeting, will be entitled
to vote at the Annual Meeting. If you are a Stockholder of record on the Annual
Meeting Record Date, you will retain the voting rights in connection with the
Annual Meeting even if you sell such shares after the Annual Meeting Record
Date. Accordingly, it is important that you vote the shares of Common Stock held
by you on the Annual Meeting Record Date, or grant a proxy to vote such shares
on the GOLD proxy card, even if you sell such shares after such date.
The Shareholders Committee believes that it is in your best interest to
elect the Shareholder Nominees at the Annual Meeting. THE COLUMBUS MCKINNON
SHAREHOLDERS COMMITTEE STRONGLY RECOMMENDS A VOTE FOR THE ELECTION OF THE
SHAREHOLDER NOMINEES.
THE COLUMBUS MCKINNON SHAREHOLDERS
COMMITTEE
, 1999
- 17 -
<PAGE>
Appendix A
----------
INFORMATION CONCERNING PARTICIPANTS IN THE PROXY SOLICITATION
Certain information regarding the members of the Shareholder Committee,
including, but not limited to the aggregate number of shares of the Company's
stock beneficially owned, directly, or indirectly, by each of them as of , 1999
is set forth below. Their transactions in the Company's stock during the past
two years is set forth in Appendix B.
On May 3, 1999, Metropolitan Capital Advisors, Inc., Metropolitan Capital
III, Inc., Lakeway Capital Partners, LLC, Scoggin, Inc. and Scoggin, LLC,
entered into an agreement with respect to the formation and conduct of the
Shareholders Committee (the "Agreement"). Pursuant to the Agreement, the
Shareholders Committee's proxy solicitation expenses will be borne by the
members of the Shareholders Committee pro rata to their shareholdings. The
Agreement prohibits any member of the Shareholders Committee from selling or
otherwise transferring any of its shares of the Company's Common Stock until the
earlier of the Company holding its Annual Meeting or the Company making an
announcement that all of the Company's Common Stock is to be acquired by a third
party, unless the proposed transferee agrees to be bound by the terms of the
Agreement. The Agreement also requires that all of the members of the
Shareholders Committee vote in favor of the Shareholder Nominees. As of , 1999,
and as further described below, members of the Shareholders Committee and their
affiliates beneficially own, in the aggregate, 1,295,545 shares of the Company's
Common Stock, representing approximately 8.49% of the outstanding shares.
Metropolitan Capital Advisors, Inc., a New York corporation ("Metropolitan
Capital"), is the sole General Partner of Metropolitan Capital Advisors, L.P.,
which is the sole General Partner of Bedford Falls Investors, L.P. ("Bedford").
Bedford is in the business of purchasing, for investment and trading purposes,
securities and other financial instruments. Bedford may be deemed to be the
beneficial owner of 366,800 shares of the Company's Common Stock, representing
2.50% of the Company's outstanding shares, of which 100 shares are owned of
record.
Metropolitan Capital III, Inc., a Delaware corporation ("Metropolitan
III"), is the General Partner of Metropolitan Capital Partners III, L.P., a
privately owned partnership which renders investment management and advisory
services to Metropolitan Capital Advisors International Limited ("Metropolitan
International"). Metropolitan International is in the business of purchasing,
for investment and trading purposes, securities and other financial instruments.
Metropolitan International may be deemed to be the beneficial owner of 240,600
shares of the Company's Common Stock, representing 1.64% of the Company's
outstanding shares.
Jeffrey E. Schwarz is a shareholder, Director, and the Chief Executive
Officer, Treasurer and Secretary of Metropolitan Capital and Metropolitan III.
Karen Finerman is a shareholder, Director and the President of Metropolitan
Capital and Metropolitan III.
A-1
<PAGE>
Mr. Schwarz, Ms. Finerman, Metropolitan Capital, Metropolitan III,
Metropolitan International and Bedford (collectively, the "Metropolitan
Participants") collectively may be deemed to be the beneficial owners of an
aggregate of 607,400 shares of the Company's Common Stock, representing 4.14% of
the outstanding Common Stock, as of , 1999. The Metropolitan Participants have a
business address at 660 Madison Avenue, New York, NY 10022. Information
concerning the Metropolitan Participants' purchases and sales of the Company's
Common Stock within the last two years is contained in Appendix B.
In addition to the above, Mr. Schwarz may be deemed the beneficial owner of
7,200 shares representing .05% of the Company's outstanding Common Stock which
he owns individually, 1,200 shares of Common Stock owned by the Jeffrey E.
Schwarz Children's Trust, of which Mr. Schwarz is the grantor, and 2,000 shares
of Common Stock owned by the Schwarz Family Foundation Trust, of which Mr.
Schwarz is a trustee. Mr. Schwarz, the Schwarz Children's Trust and the Schwarz
Family Foundation Trust each has an address of 660 Madison Avenue, New York, NY
10022.
Mr. Schwarz's father, Sherwood Schwarz, may be deemed the beneficial owner
of 3,600 shares of the Company's Common Stock which he owns individually, of
which Mr. Schwarz disclaims beneficial ownership. Sherwood Schwarz has an
address of 425 Park Avenue, New York, NY 10022.
Ms. Finerman's husband, Lawrence E. Golub, may be deemed the beneficial
owner of 8,000 shares of the Company's Common Stock which he owns individually,
of which Ms. Finerman disclaims beneficial ownership. Lawrence E. Golub has an
address of 230 Park Avenue, 19th Floor, New York, New York 10169.
Scoggin, Inc., a Delaware corporation, is the General Partner of S & E
Partners, L.P., the sole General Partner of Scoggin Capital Management, L.P.
("Scoggin Capital"). Scoggin Capital is in the business of purchasing, for
investment and trading purposes, securities and other financial instruments.
Scoggin Capital may be deemed to be the beneficial owner of 322,500 shares of
the Company's Common Stock representing 2.20% of the Company's outstanding
shares.
Scoggin, LLC, a Delaware limited liability company, is in the business of
rendering investment management and advisory services to Scoggin International
Fund, Ltd. ("Scoggin International"). Scoggin International is in the business
of purchasing, for investment and trading purposes, securities and other
financial instruments. Scoggin International may be deemed to be the beneficial
owner of 153,200 shares of the Company's Common Stock representing 1.04% of the
Company's outstanding shares.
Curtis Schenker and Craig Effron each is a shareholder, director and
executive officer of Scoggin, Inc. and a managing member of Scoggin, LLC.
Mr. Schenker, Mr. Effron, Scoggin, Scoggin, Inc., Scoggin, LLC, Scoggin
Capital and Scoggin International (collectively, the "Scoggin Participants")
collectively may be deemed to be the beneficial owner of an aggregate of 475,700
shares of the Company's common stock, representing 3.24% of the outstanding
Common Stock as of , 1999. The Scoggin Participants have a business address
A-2
<PAGE>
of 660 Madison Avenue, New York, NY 10021. Information concerning the Scoggin
Participants' purchases and sales of the Company's Common Stock within the last
two years is contained in APPENDIX B.
In addition to the above, Mr. Schenker is the beneficial owner of 7,500
shares representing .05% of the Company's outstanding shares which he owns
individually, and Mr. Effron is the beneficial owner of 5,000 shares
representing .03% of the Company's outstanding shares which he owns
individually. Mr. Schenker also may be deemed to be the beneficial owner of
2,500 shares of the Company's Common Stock as a result of being the General
Partner of Carolyn Partners, L.P. and 2,500 shares of the Company's Common Stock
as a result of being the General Partner of CJS Partners, L.P. Carolyn Partners,
L.P. and CJS Partners, L.P. each has a business address of 660 Madison Avenue,
New York, NY 10021.
Lakeway Capital Partners, LLC, a Delaware limited liability company
("Lakeway Capital"), is the General Partner of Yaupon Partners, L.P. ("Yaupon")
and Yaupon Partners II, L.P. ("Yaupon II"). Yaupon and Yaupon II each is in the
business of purchasing, for investment and trading purposes, securities and
other financial instruments. Yaupon may be deemed to be the beneficial owner of
116,750 shares of the Company's Common Stock representing .80% of the Company's
outstanding shares, and Yaupon II may be deemed to be the beneficial owner of
3,700 shares of the Company's Common Stock representing .03% of the Company's
outstanding shares.
Robert F. Lietzow, Jr. is the managing member of Lakeway Capital. Mr.
Lietzow, Lakeway Capital, Yaupon and Yaupon II (collectively, the "Lakeway
Participants") collectively may be deemed to be the beneficial owner of 120,450
shares of the Company's Common Stock, representing .82% of the Company's
outstanding shares. The Lakeway Participants have a business address at 660
Madison Avenue, New York, NY 10022. Information concerning the Lakeway
Participants purchases and sales of the Company's common stock within the last
two years is contained in Appendix B.
In addition to the above, Mr. Lietzow is the beneficial owner of 17,295
shares representing .12% of the Company's outstanding shares which he owns
individually.
The Metropolitan Participants, Scoggin Participants and the Lakeway
Participants each have an office address of 660 Madison Avenue, New York, New
York 10021. Metropolitan, Scoggin and Lakeway, their affiliated entities, family
members of their controlling persons, or entities or accounts investing for the
benefit of the above are limited partners in certain of the other Shareholders
Committee members or their affiliates. Such entities also from time to time
share certain office equipment, facilities, employee time and expenses,
consultant and other costs, including costs of due diligence, financial analysis
or other services that may be rendered by any one of them, or by outside
parties. With respect to their investment in the Company Common Stock, certain
of the Metropolitan Participants and Scoggin Participants have agreed to
compensate Robert F. Lietzow, Jr. and/or Lakeway Capital Partners, LLC for
management advice and consultation in connection with their investment in the
Company's securities. The amount and timing of such compensation is not
determined at this time, but
A-3
<PAGE>
is generally agreed to be based upon management fees earned as a result of their
investment in the Company's securities.
Metropolitan and Scoggin, and certain of their affiliates, have in the
past, and expect to continue in the future, to share in certain investment
analysis and opportunities and discuss the merits and evaluation of such
opportunities. Such investment opportunities may include the purchase and sale
of securities in debt of public and private issuers, trading in convertible
securities, investments in real estate securities or interest bearing
instruments or other financial instruments of all kinds. Certain of the
Metropolitan Participants and the Scoggin Participants also may serve together
or support several charitable and educational institutions.
Mr. Jonathan Guss, a Shareholder Nominee, is the Chief Executive Officer
and a director of Bogen Communications International, Inc. ("Bogen"). Mr.
Jeffrey E. Schwarz is Co-Chairman of Bogen, and, through certain of the
Metropolitan Participants and personally, is the owner of 16.8% of the Common
Stock of Bogen. Mr. Guss and Mr. Schwarz have engaged in other business
acquisitions, operations and sales in the past and may do so in the future. Mr.
Guss is not the record or beneficial owner of any shares of Common Stock of the
Company as of the date hereof. Mr. Guss's business address is 50 Spring Street,
P.O. Box 575, Ramsey, New Jersey 07446.
Mr. Larry N. Katsoulis is not the record or beneficial owner of any shares
of Common Stock of the Company. Mr. Katsoulis's business address is 330 East
Kilbourne Avenue, Suite 1185, Milwaukee, Wisconsin 53202.
Mr. George F. Raymond, Jr. is not the record or beneficial owner of any
shares of Common Stock of the Company. In 1997, the Metropolitan Participants
and the Scoggin Participants entered into a shareholders agreement with George
G. Raymond, Jr., for the purpose of encouraging the incumbent Board to explore
alternatives to maximize value, or alternatively to seek replacing a majority of
the Board of Directors of Raymond Corporation. The Board of Raymond Corporation
did then determine to explore such alternatives and Raymond Corporation agreed
to be acquired by BT Industries AB for a price of $33.00 per Share. Mr.
Raymond's business address is 5150 Tamiami Trail, N., Suite 303, Naples, Florida
34103.
A-4
<PAGE>
Appendix B
----------
TRANSACTIONS IN SHARES OF COLUMBUS MCKINNON CORPORATION
The following table sets forth information with respect to all
purchases and sales of shares of Common Stock of the Company by the members of
the Shareholder Committee and certain of their affiliates and the Shareholder
Nominees during the past two years:
TRANSACTION SUMMARY
METROPOLITAN PARTICIPANTS
Transaction in Common Stock by Metropolitan Capital, of which Jeffrey
E. Schwarz and Karen Finerman are principal stockholders and officers, for and
on behalf of Bedford Falls are as follows. All such transactions comprise open
market purchase of Common Stock unless otherwise indicated.
DATE PURCHASE/SALE QUANTITY
---- ------------- --------
01/01/98 * 37,100
01/05/98 S 29,700
04/02/98 S 26,600
10/06/98 S 62,400
10/07/98 S 52,700
10/29/98 S 12,300
12/28/98 P 39,700
01/01/99 P 4,200
01/04/99 P 51,100
01/22/99 P 37,400
02/16/99 P 11,800
* Shares Contributed to Bedford Falls as of January 1, 1998
The shares of the Company's Common Stock held by Bedford may be held
through margin accounts with brokers, which extend margin credit, as and when
required to open or carry positions in such margin accounts, subject to
applicable federal margin regulations, stock exchange rules and credit policies
of such firms. The positions held in the margin accounts, including the shares
of the Company's Common Stock, are pledged as collateral security for the
repayment of debit balances in the respective accounts. The amount of margin
debt is not readily ascertainable.
B-1
<PAGE>
Transactions in Common Stock by Metropolitan III, of which Jeffrey E.
Schwarz and Karen Finerman are principal shareholders and officers, for and on
behalf of Metropolitan International are as follows. All such transactions
comprise open market purchases of Common Stock.
DATE PURCHASE/SALE QUANTITY
---- ------------- --------
07/25/97 P 56,500
07/28/97 S 5,000
08/31/98 P 10,000
10/06/98 S 24,500
10/29/98 S 5,900
10/30/98 S 1,500
11/02/98 S 400
11/03/98 S 2,500
11/04/98 S 12,500
11/19/98 S 14,500
11/20/98 S 1,000
12/28/98 P 10,300
01/01/99 S 4,200
01/04/99 P 13,400
01/04/99 P 109,400
01/22/99 P 32,600
02/16/99 P 3,700
The shares of the Company's Common Stock held by Metropolitan
International may be held through margin accounts with brokers, which extend
margin credit, as and when required to open or carry positions in such margin
accounts, subject to applicable federal margin regulations, stock exchange rules
and credit policies of such firms. The positions held in the margin accounts,
including the shares of the Company's Common Stock, are pledged as collateral
security for the repayment of debit balances in the respective accounts. The
amount of margin debt is not readily ascertainable.
B-2
<PAGE>
Transactions in Common Stock by Jeffrey E. Schwarz are as follows. All such
transactions comprise open market purchases of Common Stock.
DATE PURCHASE/SALE QUANTITY
---- ------------- --------
04/07/98 S 4,800
TRANSACTION SUMMARY
SCOGGIN PARTICIPANTS
Transactions in Common Stock by Scoggin, Inc., of which Curtis Schenker
and Craig Effron are principal stockholders and officers, for and on behalf of
Scoggin Capital as follows. All such transactions comprise open market purchases
of Common Stock.
DATE PURCHASE/SALE QUANTITY
---- ------------- --------
07/21/97 P 10,000
03/18/98 S 2,500
03/20/98 S 2,500
04/01/98 S 9,500
04/01/98 S 500
04/03/98 S 15,000
07/28/98 P 2,500
08/06/98 P 10,000
08/07/98 P 2,500
08/31/98 P 2,500
10/07/98 S 3,500
10/07/98 S 44,000
10/07/98 S 25,000
10/29/98 P 12,000
11/03/98 S 1,500
11/03/98 S 2,000
11/03/98 S 4,500
11/04/98 P 5,000
11/04/98 P 3,000
11/06/98 P 5,000
11/09/98 P 5,000
11/10/98 P 5,000
11/12/98 S 2,000
12/11/98 P 10,000
12/21/98 P 2,000
12/28/98 P 17,500
01/04/99 P 90,000
B-3
<PAGE>
01/04/99 P 5,000
01/22/99 P 90,000
02/16/99 P 10,500
03/23/99 S 2,000
03/23/99 S 500
The shares of the Company's Common Stock held by Scoggin Capital may be
held through margin accounts with brokers, which extend margin credit, as and
when required to open or carry positions in such margin accounts, subject to
applicable federal margin regulations, stock exchange rules and credit policies
of such firms. The positions held in the margin accounts, including the shares
of the Company's Common Stock, are pledged as collateral security for the
repayment of debit balances in the respective accounts. The amount of margin
debt is not readily ascertainable.
Transactions in Common Stock by Scoggin, LLC, of which Curtis Schenker
and Craig Effron are managing members, for and on behalf of Scoggin
International are as follows. All such transactions comprise open market
purchases of Common Stock.
DATE PURCHASE/SALE QUANTITY
---- ------------- --------
07/21/97 P 4,000
07/30/97 P 2,500
10/28/97 P 2,000
11/26/97 P 3,000
12/19/97 P 2,500
12/22/97 P 3,500
12/30/97 P 2,000
12/31/97 P 6,900
01/09/98 P 7,000
01/09/98 P 7,000
01/16/98 P 2,000
01/20/98 P 3,000
02/04/98 P 1,100
02/05/98 P 2,700
04/03/98 S 2,000
04/03/98 S 1,000
04/03/98 S 2,000
06/01/98 P 5,000
06/16/98 P 5,000
06/18/98 P 10,000
06/19/98 P 2,800
06/22/98 P 2,500
06/26/98 P 3,000
06/29/98 P 400
B-4
<PAGE>
07/01/98 P 2,200
07/07/98 P 1,000
07/24/98 P 1,400
07/27/98 P 2,500
07/27/98 P 1,000
07/27/98 P 1,000
07/28/98 P 2,500
08/06/98 P 10,000
08/07/98 P 2,500
10/07/98 S 8,000
10/07/98 S 2,000
10/07/98 S 2,500
10/07/98 S 15,000
10/07/98 S 1,000
10/07/98 S 17,000
10/07/98 S 4,000
10/07/98 S 500
10/07/98 S 2,000
10/07/98 S 2,000
10/07/98 S 3,000
10/07/98 S 2,500
10/07/98 S 3,500
10/07/98 S 2,000
10/07/98 S 6,900
10/07/98 S 7,000
10/07/98 S 6,100
10/07/98 S 900
10/07/98 S 2,000
10/07/98 S 2,800
11/04/98 P 3,000
11/06/98 P 10,000
11/09/98 P 5,000
11/10/98 P 5,000
11/12/98 P 2,000
12/11/98 S 200
12/11/98 S 1,100
12/11/98 S 2,700
12/11/98 S 5,000
12/11/98 S 1,000
12/28/98 P 12,500
01/04/99 P 2,000
01/22/99 P 55,000
02/16/99 P 12,900
03/23/99 S 1,000
B-5
<PAGE>
The shares of the Company's Common Stock held by Scoggin International
may be held through margin accounts with brokers, which extend margin credit, as
and when required to open or carry positions in such margin accounts, subject to
applicable federal margin regulations, stock exchange rules and credit policies
of such firms. The positions held in the margin accounts, including the shares
of the Company's Common Stock, are pledged as collateral security for the
repayment of debit balances in the respective accounts. The amount of margin
debt is not readily ascertainable.
Transactions on Common Stock by Curtis Schenker are as follows. All
such transactions comprise open market transaction.
DATE PURCHASE/SALE QUANTITY
---- ------------- --------
05/23/97 S 4,000
10/27/97 P 1,000
01/08/98 S 1,000
03/12/98 S 1,000
03/13/98 S 1,500
03/13/98 S 1,500
03/17/98 S 400
03/18/98 S 1,100
03/18/98 S 1,000
04/10/98 S 1,500
04/10/98 S 1,000
08/07/98 P 2,500
08/25/98 S 1,000
09/02/98 S 500
09/02/98 S 1,000
09/09/98 P 2,500
09/30/98 S 1,000
12/18/98 P 1,000
12/21/98 P 5,000
03/22/99 S 1,500
03/22/99 S 1,000
Transactions in Common Stock by Craig Effron are as follows. All such
transactions comprise Open Market transactions of Common Stock.
B-6
<PAGE>
DATE PURCHASE/SALE QUANTITY
---- ------------- --------
03/18/98 S 1,000
04/10/98 S 1,000
03/04/99 P 1,900
03/12/99 P 1,100
04/12/99 P 2,000
TRANSACTION SUMMARY
LAKEWAY PARTICIPANTS
Transactions in Common Stock by Lakeway Capital, of which Robert F.
Lietzow, Jr. is the sole managing member, for and on behalf of Yaupon are as
follows. All such transactions comprise open market transactions of Common
Stock.
DATE PURCHASE/SALE QUANTITY
---- ------------- --------
08/31/98 P 10,000
10/07/98 S 10,000
11/04/98 P 8,000
11/10/98 P 12,500
11/10/98 P 5,000
12/21/98 P 10,000
12/28/98 P 6,600
01/04/99 P 24,400
01/22/99 P 29,000
02/10/99 P 2,500
02/11/99 P 1,000
02/12/99 P 2,750
02/17/99 P 15,000
The shares of the Company's Common Stock held by Yaupon may be held
through margin accounts with brokers, which extend margin credit, as and when
required to open or carry positions in such margin accounts, subject to
applicable federal margin regulations, stock exchange rules and credit policies
of such firms. The positions held in the margin accounts, including the shares
of the Company's Common Stock, are pledged as collateral security for the
repayment of debit balances in the respective accounts. The amount of margin
debt is not readily ascertainable.
Transactions in Common Stock by Lakeway Capital, of which Robert F.
Lietzow, Jr. is the sole managing member, for and on behalf of Yaupon II are as
follows. All such transaction comprise open markets of Common Stock.
B-7
<PAGE>
DATE PURCHASE/SALE QUANTITY
---- ------------- --------
01/15/99 P 700
01/22/99 P 1,000
04/12/99 P 2,000
The shares of the Company's Common Stock held by Yaupon II may be held
through margin accounts with brokers, which extend margin credit, as and when
required to open or carry positions in such margin accounts, subject to
applicable federal margin regulations, stock exchange rules and credit policies
of such firms. The positions held in the margin accounts, including the shares
of the Company's Common Stock, are pledged as collateral security for the
repayment of debit balances in the respective accounts. The amount of margin
debt is not readily ascertainable.
Transactions in Common Stock by Robert F. Lietzow, Jr. are as follows. All
such transactions comprise open market purchases of Common Stock.
DATE PURCHASE/SALE QUANTITY
---- ------------- --------
07/25/97 P 5,000
03/12/98 P 2,000
B-8
<PAGE>
PRELIMINARY COPY - July ___, 1999
[FRONT OF PROXY CARD]
PROXY
COLUMBUS MCKINNON CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 16, 1999
THIS PROXY IS SOLICITED BY THE COLUMBUS MCKINNON SHAREHOLDERS COMMITTEE
IN OPPOSITION TO THE BOARD OF DIRECTORS
The undersigned hereby appoints Jeffrey E. Schwarz and Robert F.
Lietzow, Jr., and each or any of them, with full power of substitution and
resubstitution, the attorney(s) and the proxy(ies) of the undersigned, to vote
all shares the undersigned may be entitled to vote, with all powers the
undersigned would possess if personally present at the Annual Meeting of
Stockholders of Columbus McKinnon Corp., to be held at the Company's corporate
offices at 140 John James Audubon Parkway, Amherst, New York, on August 16, 1999
at 10:00 a.m., local time, and at any adjournments or postponements thereof on
the following matters, as instructed below, and, in their discretion, on such
other matters as may properly come before the meeting, including any motion to
adjourn or postpone the meeting, all as more fully described in the Proxy
Statement of The Columbus McKinnon Shareholders Committee, dated June __, 1999.
THE COLUMBUS MCKINNON SHAREHOLDERS COMMITTEE RECOMMENDS A VOTE
"FOR" PROPOSAL NO. 1.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ]WITHHOLD AUTHORITY
(except as indicated to the contrary below) to vote for all nominees
listed below
LARRY N. KATSOULIS JONATHAN G. GUSS
GEORGE G. RAYMOND, JR. JEFFREY E. SCHWARZ
ROBERT F. LIETZOW, JR.
Instruction: To withold 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:
----------------------------------------------------------------
(Continued and to be SIGNED on the reverse side.)
[Reverse of Proxy Card]
THE COLUMBUS MCKINNON SHAREHOLDERS COMMITTEE RECOMMENDS A VOTE
"FOR" PROPOSAL NO. 2.
2. PROPOSAL TO RESTORE THE COMPANY'S ORIGINAL BY-LAWS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE COLUMBUS MCKINNON SHAREHOLDERS COMMITTEE IS NOT MAKING ANY
RECOMMENDATION WITH RESPECT TO PROPOSAL NO. 3.
3. PROPOSAL TO APPROVE THE PROPOSED AMENDMENT AND RESTATEMENT OF THE COLUMBUS
MCKINNON CORPORATION 1995 INCENTIVE STOCK OPTION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. Unless otherwise specified, this proxy
will be voted "FOR" the election of the Columbus McKinnon Shareholders Committee
nominees as directed and "FOR" the shareholder proposal listed above. This proxy
revokes all prior proxies given by the undersigned.
Please sign below exactly as your name appears on this Proxy Card. If
shares are registered in more than one name, all such names should sign. A
corporation should sign in its full corporate name by a duly authorized officer,
stating his title. Trustees, guardians, executors and administrators should sign
in their official capacity, giving their full title as such. If a partnership,
please sign in the partnership name by authorized persons. This Proxy Card votes
all shares held in all capacities.
Dated:_________________________________________, 1999
_____________________________________________________
(Signature)
_____________________________________________________
(Signature if held jointly)
