COLUMBUS MCKINNON CORPORATION
140 JOHN JAMES AUDUBON PARKWAY
AMHERST, NEW YORK 14228-1197
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 18, 1997
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Columbus
McKinnon Corporation, a New York corporation (the "Company"), will be held at
the Company's corporate offices, 140 John James Audubon Parkway, Amherst, New
York, on August 18, 1997, at 10:00 a.m., local time, for the following purposes:
1. To elect five Directors to hold office until the 1998 Annual Meeting
and until their successors have been elected and qualified.
2. To take action upon and transact such other business as may be properly
brought before the meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on June 27, 1997,
as the record date for the determination of shareholders entitled to receive
notice of and to vote at the Annual Meeting.
Shareholders who do not expect to attend the meeting in person are urged
to vote, sign and date the enclosed proxy and return it promptly in the envelope
enclosed for that purpose.
LOIS H. DEMLER
Secretary
Dated: July 16, 1997
<PAGE>
COLUMBUS MCKINNON CORPORATION
140 JOHN JAMES AUDUBON PARKWAY
AMHERST, NEW YORK 14228-1197
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PROXY STATEMENT
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This Proxy Statement and the accompanying form of proxy are being
furnished in connection with the solicitation by the Board of Directors of
Columbus McKinnon Corporation, a New York corporation (the "Company"), of
proxies to be voted at the Annual Meeting of Shareholders to be held at the
Company's corporate offices, 140 John James Audubon Parkway, Amherst, New York,
on August 18, 1997, at 10:00 a.m., local time, and at any adjournment or
adjournments thereof. The close of business on June 27, 1997 has been fixed as
the record date for the determination of shareholders entitled to receive notice
of and to vote at the meeting. At the close of business on June 27, 1997, the
Company had outstanding 13,755,858 shares of common stock, $.01 par value per
share ("Common Stock"), the holders of which are entitled to one vote per share
on each matter properly brought before the Annual Meeting.
The cost of solicitation of proxies in the accompanying form will be borne
by the Company, including expenses in connection with preparing and mailing this
Proxy Statement. In addition to the use of the mails, proxies may be solicited
by personal interviews and telephone by Directors, officers and employees of the
Company. Arrangements will be made with brokerage houses, banks and other
custodians, nominees and fiduciaries for the forwarding of solicitation material
to the beneficial owners of Common Stock, and the Company will reimburse them
for reasonable out-of-pocket expenses incurred by them in connection therewith.
The shares represented by all valid proxies in the enclosed form will be
voted if received in time for the Annual Meeting in accordance with the
specifications, if any, made on the proxy card. If no specification is made, the
proxies will be voted FOR the nominees for Director named in this Proxy
Statement.
The proxy card provides space for a shareholder to withhold voting for any
or all nominees for the Board of Directors or to abstain from voting for any
proposal if the shareholder chooses to do so. 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. Only shares that are voted in favor of a particular nominee will be
counted towards achievement of a plurality; where a shareholder properly
withholds authority to vote for a particular nominee such shares will not be
counted towards such nominee's or any other nominee's achievement of plurality.
The execution of a proxy will not affect a shareholder's right to attend
the Annual Meeting and to vote in person. A shareholder who executes a proxy may
revoke it at any time before it is exercised by giving written notice to the
Secretary, by appearing at the Annual Meeting and so stating, or by submitting
another duly executed proxy bearing a later date.
The date of this Proxy Statement is the approximate date on which the
Proxy Statement and form of proxy were first sent or given to shareholders.
ELECTION OF DIRECTORS
The Certificate of Incorporation of the Company provides that the Board of
Directors shall consist of not less than three nor more than nine Directors to
be elected at each annual meeting of shareholders and to serve for a term of one
year or until their successors are duly elected and qualified. The Board of
Directors is presently comprised of five members.
Unless instructions to the contrary are received, it is intended that the
shares represented by proxies will be voted for the election as Directors of
Edward W. Duffy, Herbert P. Ladds, Jr., Robert L. Montgomery, Jr., Randolph A.
Marks and L. David Black, each of whom is presently a Director. Each of these
nominees has been previously elected by the Company's shareholders. If any of
these nominees
<PAGE>
should become unavailable for election for any reason, it is intended that the
shares represented by the proxies solicited herewith will be voted for such
other person as the Board of Directors shall designate. The Board of Directors
has no reason to believe that any of these nominees will be unable or unwilling
to serve if elected to office.
The following information is provided concerning the nominees for
Director:
Edward W. Duffy has been Chairman of the Board of the Company since 1986.
Mr. Duffy is a retired Chairman of the Board and Chief Executive Officer of
Marine Midland Bank and a retired director of W. R. Grace & Co., Niagara Mohawk
Power Corporation, Oneida Limited and Utica Mutual Insurance Company.
Herbert P. Ladds, Jr. has served as President of the Company since 1982
and has been a Director of the Company since 1973. He was Executive Vice
President of the Company from 1981 to 1982 and Vice President--Sales & Marketing
from 1971 to 1980. Mr. Ladds is also a director of Utica Mutual Insurance
Company and Eastman Machine Company.
Robert L. Montgomery, Jr. joined the Company in 1974 and has served as
Executive Vice President and Chief Financial Officer since 1987 and as a
Director of the Company since 1982. Prior thereto he was employed as a certified
public accountant by Price Waterhouse LLP.
Randolph A. Marks has been a Director of the Company since 1986. Mr. Marks
is a private investor and is a retired Chairman of the Board of American Brass
Company. He also serves as a director of Computer Task Group, Inc.
L. David Black has been a Director of the Company since 1995. Mr. Black
has been the Chairman of the Board, President and Chief Executive Officer of JLG
Industries, Inc., a manufacturer of construction equipment since 1993. Prior
thereto, he served as President of JLG Industries, Inc.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the year ended March 31, 1997, the Board of Directors held ten
meetings. Each Director attended at least 75% of the aggregate number of
meetings of the Board of Directors and meetings held by all committees of the
Board of Directors on which he served.
AUDIT COMMITTEE
The Board of Directors has a standing Audit Committee comprised of Messrs.
Duffy, Marks and Black. The duties of the Audit Committee consist of reviewing
with the Company's independent auditors and its management, the scope and
results of the annual audit and other services provided by the Company's
independent auditors. The Audit Committee held two meetings in fiscal 1997.
COMPENSATION COMMITTEE
The Compensation Committee, which consists of Messrs. Duffy, Marks and
Black, held six meetings in fiscal 1997. The Compensation Committee makes
recommendations concerning the salaries for officers of the Company and
incentive compensation for employees of and consultants to the Company.
OTHER COMMITTEES
The Board of Directors does not have a standing executive or nominating
committee.
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<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding the Directors
and executive officers of the Company:
NAME AGE POSITION(S) HELD
Edward W. Duffy 71 Chairman of the Board
Herbert P. Ladds, Jr. 64 President, Chief Executive Officer and Director
Robert L. Montgomery, Jr. 59 Executive Vice President, Chief Financial Officer
and Director
Timothy T. Tevens 41 Vice President and Chief Operating Officer
Ned T. Librock 44 Vice President-Sales and Marketing
Karen L. Howard 35 Vice President-Controller
Ernst K. H. Marburg 61 Vice President-Total Quality and Standards
Ivan E. Shawvan, Jr. 45 Vice President-Human Resources
Lois H. Demler 59 Corporate Secretary
Randolph A. Marks 61 Director
L. David Black 60 Director
All officers of the Company are elected annually at the first meeting of
the Board of Directors following the Annual Meeting of Shareholders and serve at
the discretion of the Board of Directors. There are no family relationships
between any officers or Directors of the Company. Recent business experience of
the Directors is set forth above under "Election of Directors." Recent business
experience of the executive officers who are not also Directors is as follows:
Timothy T. Tevens joined the Company as Vice President-Information
Services in May 1991 and was elected Chief Operating Officer in October 1996.
From 1980 to 1991, Mr. Tevens was employed by Ernst & Young LLP in various
management consulting capacities.
Ned T. Librock was elected Vice President-Sales and Marketing in November
1995. Mr. Librock has been employed by the Company since 1990 in various sales
management capacities. Prior to 1990, Mr. Librock was employed by Dynabrade
Inc., a manufacturer of power tools, as director of Sales and Marketing.
Karen L. Howard was elected Vice President-Controller in January 1997.
From June 1995 to January 1997, Ms. Howard was employed by the Company in
various financial and accounting capacities. Prior to June 1995, Ms. Howard was
employed by Ernst & Young LLP as a certified public accountant.
Ernst K. H. Marburg has been employed by the Company since May 1980. Prior
to his election as Vice President-Total Quality and Standards in October 1996,
Mr. Marburg served the Company as Manager of Product Standards and Services for
nearly fifteen years.
Ivan E. Shawvan, Jr. was elected Vice President-Human Resources in January
1997. He has been employed by the Company since September 1984 and has served as
General Manager of the Company's Sarasota, Florida operations from October 1988
to August 1996 and as Corporate Human Resources Manager since August 1996.
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<PAGE>
Lois H. Demler has been employed by the Company since 1963. She has been
the Corporate Secretary of the Company since 1987.
COMPENSATION OF EXECUTIVE OFFICERS
The following Summary Compensation Table sets forth certain information
with respect to the compensation paid by the Company for services rendered
during the fiscal years ended March 31, 1995, 1996 and 1997 for the chief
executive officer and the other most highly compensated executive officers of
the Company. The amounts shown include compensation for services in all
compensation capacities.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
-------------------------------- -----------------------------
SECURITIES
----------
UNDERLYING
----------
FISCAL OTHER ANNUAL RESTRICTED OPTIONS/ ALL OTHER
------ ------------ ------------ ---------- ---------------
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK AWARDS (c) SARS (d) COMPENSATION (e)
- --------------------------- ---- ------ ----- ------------ --------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Herbert P. Ladds, Jr., 1997 $354,893 $ 4,900 $ --- $ --- $ 14,474
President and Chief 1996 341,096 144,450 --- --- 11,421
Executive Officer 1995 320,677 135,000 --- --- 13,794
Robert L. Montgomery, Jr., 1997 274,431 3,798 --- --- 13,821
Executive Vice President 1996 259,588 109,935 --- --- 10,702
and Chief Financial Officer 1995 244,302 100,575 --- --- 13,190
Ned T. Librock, 1997 170,623 1,381 --- 166,600 50,000 13,712
Vice President - 1996 100,631 34,459 --- --- 12,491
Sales and Marketing 1995 81,465 38,966 --- --- 8,167
Timothy T. Tevens, 1997 162,411 1,845 217,044 (b) --- 50,000 11,477
Vice President and 1996 127,308 52,200 --- --- 7,086
Chief Operating Officer 1995 115,908 49,500 --- --- 10,000
Kenneth G. McCreadie, (a) 1997 135,600 2,052 --- --- 11,820
Vice President - 1996 140,269 59,400 --- --- 9,054
Administration 1995 132,214 56,250 --- --- 11,673
Peter A. Grant, (a) 1997 128,095 1,818 --- --- 10,165
Vice President - 1996 124,589 52,290 --- --- 8,196
Human Resources 1995 116,105 49,500 --- --- 10,879
Ivan E. Shawvan, Jr., 1997 95,187 1,139 --- --- 50,000 9,030
Vice President - 1996 78,400 31,130 --- --- 11,798
Human Resources 1995 72,943 31,140 --- --- 8,278
- ----------------------------
<FN>
(a) Messrs McCreadie and Grant retired from the Company as of January 3, 1997.
(b) Represents tax reimbursement payments made by the Company to Mr. Tevens in
fiscal 1997 to offset the income tax effects of the expiration of the
restrictions on 17,000 shares of restricted Common Stock granted to him in
1991. See footnote (c) below.
(c) Mr. Librock was granted 11,900 shares of restricted Common Stock on July
22, 1996, which had a value on such date of $166,600 and 5,100 shares of
restricted Common Stock on August 1, 1994, which had a value on such date
of $48,996. As of March 31, 1997, the number of restricted shares of
Common Stock held by Mr. Librock was 17,000, and the value of Mr.
Librock's restricted shares of Common Stock on March 31, 1997 was
$285,350. Mr. Tevens was granted 17,000 shares of restricted Common Stock
on May 1, 1991, which had a value on such date of $135,650. The
restrictions on Mr. Tevens' restricted shares of Common Stock lapsed on
April 30, 1996, on which date such shares had a value of $269,875. Mr.
Shawvan was granted 8,500 shares of restricted Common Stock on August 1,
1994, which had a value on such date of $81,660. As of March 31, 1997, the
number of restricted shares of Common Stock held by Mr. Shawvan was 8,500,
and the value of Mr. Shawvan's restricted shares of Common Stock on March
31, 1997 was $143,375. None of the other officers listed in the above
table hold any restricted shares of Common Stock. The Company does not pay
dividends on its outstanding shares of restricted Common Stock, but makes
payments of additional compensation in lieu of such dividends. See
footnote (e) below.
(d) Represents options granted to Messrs. Librock, Tevens and Shawvan pursuant
to the Company's Incentive Stock Option Plan (the "Incentive Plan").
(e) Comprised of: (i) the value of shares of Common Stock allocated in fiscal
1997 under the Company's Employee Stock Ownership Plan (the "ESOP") to
accounts for Messrs. Ladds, Montgomery, Librock, Tevens, McCreadie, Grant
and Shawvan in the amounts of $12,554, $11,901, $8,800, $8,537, $10,506,
$9,198 and $6,006, respectively, (ii) premiums for group term life
insurance policies insuring the lives of Messrs. Ladds, Montgomery,
Librock, Tevens, McCreadie, Grant and Shawvan in the amounts of $1,920,
$1,920, $1,920, $1,920, $1,314, $967 and $814, respectively, and (iii)
compensation in lieu of dividends on restricted shares of Common Stock
paid to Messrs. Librock, Tevens and Shawvan in the amounts of $2,992,
$1,020 and $2,210, respectively.
</FN>
</TABLE>
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<PAGE>
OPTIONS GRANTED IN LAST FISCAL YEAR
The following table contains information concerning the grant of stock
options to the named executives in fiscal 1997. The exercise price of all such
options is equal to the market value of Common Stock on the date of the grant.
PERCENT OF POTENTIAL REALIZABLE
TOTAL OPTIONS VALUE AT ASSUMED
GRANTED TO EXERCISE ANNUAL RATES OF STOCK
NAME AND EMPLOYEES IN PRICE EXPIR- PRICE APPRECIATION
PRINCIPAL OPTION FISCAL PER ATION FOR OPTION TERM
POSITION GRANTS(a) YEAR SHARE DATE 5%(b) 10%(c)
-------- ------- ---- ----- ---- --- ---
Herbert P. Ladds, Jr.
President and Chief
Executive Officer --- --- $ --- --- $ --- $ ---
Robert L. Montgomery, Jr.,
Executive Vice
President and Chief
Financial Officer --- --- --- --- --- ---
Ned T. Librock,
Vice President -
Sales and Marketing 50,000 25% 15.50 12/31/06 1,262,393 2,010,150
Timothy T. Tevens,
Vice President and
Chief Operating Officer 50,000 25% 15.50 12/31/06 1,262,393 2,010,150
Kenneth G. McCreadie,
Vice President -
Administration --- --- --- --- --- ---
Peter A. Grant,
Vice President -
Human Resources --- --- --- --- --- ---
Ivan E. Shawvan, Jr.,
Vice President -
Human Resources 50,000 25% 15.50 12/31/06 1,262,393 2,010,150
- ---------------------------------
(a) Options granted pursuant to the Incentive Plan become exercisable in
cumulative annual increments of 25% beginning one year from the date of
grant; however, in the event of certain extraordinary transactions,
including a change of control of the Company, the vesting of such options
would automatically accelerate.
(b) Represents the potential appreciation of the options, determined by
assuming an annual compounded rate of appreciation of 5% per year over the
ten-year term of the grants, as prescribed by the rules. The amounts set
forth above are not intended to forecast future appreciation, if any, of
the stock price. There can be no assurance that the appreciation reflected
in this table will be achieved.
(c) Represents the potential appreciation of the options, determined by
assuming an annual compounded rate of appreciation of 10% per year over the
ten-year term of the grants, as prescribed by the rules. The amounts set
forth above are not intended to forecast future appreciation, if any, of
the stock price. There can be no assurance that the appreciation reflected
in this table will be achieved.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information with respect to the named
executives concerning the exercise of options during 1997 and unexercised
options held at the end of 1997.
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<PAGE>
VALUE OF
UNEXERCISED IN
NUMBER OF THE MONEY OPTIONS
UNEXERCISED OPTIONS AT FISCAL YEAR
AT FISCAL YEAR END END(a)
----------------- --------------
SHARES
ACQUIRED ON VALUE EXER- UNEXER- EXER- UNEXER-
EXERCISE REALIZED CISABLE CISABLE CISABLE CISABLE
-------- -------- ------- ------- ------- -------
Herbert P. Ladds, Jr.,
President and Chief
Executive Officer --- $ --- --- --- $ --- $ ---
Robert L. Montgomery, Jr.,
Executive Vice
President and Chief
Financial Officer --- --- --- --- --- ---
Ned T. Librock,
Vice President - Sales
and Marketing --- --- --- 50,000 --- 112,500
Timothy T. Tevens,
Vice President and
Chief Operating Officer --- --- --- 50,000 --- 112,500
Kenneth G. McCreadie,
Vice President -
Administration --- --- --- --- --- ---
Peter A. Grant,
Vice President -
Human Resources --- --- --- --- --- ---
Ivan E. Shawvan, Jr.,
Vice President -
Human Resources --- --- --- 50,000 --- 112,500
- --------------------------------
(a) Represent the difference between $17.75, the closing market value of Common
Stock as of March 31, 1997, and the exercise prices of such options.
EMPLOYEE PLANS
EMPLOYEE STOCK OWNERSHIP PLAN. The Company maintains the ESOP for the
benefit of certain of its salaried and non-union hourly employees. The ESOP is
intended to be an employee stock ownership plan within the meaning of Section
4975 (e)(7) of the Internal Revenue Code of 1986, as amended (the "Code") and an
eligible individual account plan within the meaning of Section 407(d)(3) of the
Code. From 1988 through 1995, the ESOP has purchased from the Company 1,373,549
shares of Common Stock (the "ESOP Shares") for the aggregate sum of
approximately $10.5 million. The proceeds of certain institutional loans (the
"ESOP Loans") were used to fund such purchases. The ESOP Loans are secured by
the ESOP Shares, and are guaranteed by the Company. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."
On a quarterly basis, the Company makes a contribution to the ESOP in an
amount determined by the Company's Board of Directors. In fiscal 1997, the
Company's cash contribution was $1,100,319. The ESOP trustees utilize the entire
contribution to make payments of principal and interest on the ESOP Loans.
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<PAGE>
Common Stock not allocated to ESOP participants ("ESOP Shares") is recorded
in an ESOP suspense account and is held as collateral for repayment of the ESOP
Loans. As payments of principal and interest are received by the lenders, ESOP
Shares are released from the ESOP suspense account annually and are then
allocated to the ESOP participants in the same proportion as a participant's
compensation for such year bears to total compensation of all participants.
An ESOP participant becomes 100% vested in all amounts allocated to him or
her after five years of service. The shares of Common Stock held by the
participants in the ESOP represent a registration-type class of securities and
are voted by the participants in the same manner as any other share of Common
Stock.
In general, Common Stock allocated to a participant's account is
distributed upon his or her termination of employment at normal retirement age
(65) or death. The distribution is made in whole shares of Common Stock plus
cash in lieu of any fractional shares.
Robert L. Montgomery, Jr., Karen L. Howard, Ivan E. Shawvan, Jr. and
Timothy R. Harvey serve as Trustees of the ESOP. As of March 31, 1997, the ESOP
owned approximately 1,225,045 shares of Common Stock. Common Stock allocated
pursuant to the ESOP to Messrs. Ladds, Montgomery, Librock, Tevens, McCreadie,
Grant and Shawvan as of March 31, 1997 is 13,809 shares, 11,900 shares, 2,835
shares, 2,761 shares, 8,373 shares, 7,065 shares and 4,060 shares, respectively.
PENSION PLAN. The Company has a non-contributory, defined benefit pension
plan which provides certain of its salaried and office employees with retirement
benefits. For each year of service with the Company, a participant earns an
annual pension benefit equal to 1.15% of his annual compensation (salary and
bonus) for such year plus .45% of that part, if any, of such compensation in
excess of $10,000. Pension benefits are not subject to reduction for social
security or other offset amounts. If Messrs. Ladds, Montgomery, Librock, Tevens,
McCreadie, Grant and Shawvan continue at their current levels of compensation
and retire at age 65, the total estimated annual pension benefits under this
plan for them would be approximately $35,025, $42,409, $63,249, $71,819,
$20,504, $17,656 and $53,103, respectively.
NON-QUALIFIED STOCK OPTION PLAN. In October 1995, the Company adopted the
Columbus McKinnon Corporation Non-Qualified Stock Option Plan (the
"Non-Qualified Plan") and reserved, subject to certain requirements, an
aggregate of 250,000 shares of Common Stock for issuance thereunder. Under the
terms of the Non-Qualified Plan, options may be granted to officers and other
key employees of the Company as well as to non-employee directors and advisors.
The Company has not granted any options under the Non-Qualified Plan.
INCENTIVE STOCK OPTION PLAN. The Company's Columbus McKinnon Corporation
Incentive Stock Option Plan (the "Incentive Plan"), which was adopted in October
1995, authorizes grants to officers and other key employees of the Company and
its subsidiaries of stock options that are intended to qualify as "incentive
stock options" within the meaning of Section 422 of the Code. The Incentive Plan
has reserved, subject to certain adjustments, an aggregate of 1,250,000 shares
of Common Stock to be issued thereunder. Options granted under the Incentive
Plan become exercisable over a four-year period at the rate of 25% per year
commencing one year from the date of grant at an exercise price of not less than
100% of the fair market value of the Common Stock on the date of grant. Any
option granted thereunder may be exercised not earlier than one year and not
later than ten years from the date such option is granted. In the event of
certain extraordinary transactions, including a change of control of the
Company, the vesting of such options would automatically accelerate. In fiscal
1997 the Company granted options to purchase 200,000 shares of Common Stock
under the Incentive Plan including options to purchase 50,000 shares of Common
Stock to each of Messrs. Librock, Tevens and Shawvan.
RESTRICTED STOCK PLAN. The Company adopted the Columbus McKinnon
Corporation Restricted Stock Plan (the "Restricted Stock Plan") in October 1995
and reserved, subject to certain adjustments, an aggregate of 100,000 shares of
Common Stock to be issued upon the grant of restricted stock awards thereunder.
Under the terms of the Restricted Stock Plan, the Compensation Committee may
grant to employees of the Company and its subsidiaries restricted stock awards
to purchase shares of Common Stock at a purchase price of not less than $.01 per
share. Shares of Common Stock issued under the Restricted Stock Plan are subject
to certain transfer restrictions and, subject to certain exceptions, shall be
forfeited if the grantee's employment with the Company or any of its
subsidiaries is terminated at any
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<PAGE>
time prior to the date the transfer restrictions have lapsed. Grantees who
remain continuously employed with the Company or its subsidiaries become vested
in their shares five years after the date of the grant, or earlier upon death,
disability, retirement or other special circumstances. The restrictions on any
such stock awards automatically lapse in the event of certain extraordinary
transactions, including a change of control of the Company. In fiscal 1997, the
Company awarded 19,800 shares of Common Stock under the Restricted Stock Plan,
including 11,900 shares to Mr. Librock at a purchase price of $1.00 per share.
EXECUTIVE INCENTIVE PLAN. The Company maintains an incentive plan for its
executive officers and other management employees. This plan provides for annual
cash bonuses based upon the Company's attainment of targeted pre-tax earnings
determined annually by the Company's Board of Directors. Incentive awards are a
percentage of base salary, and for the executive officers range from 30% of base
salary, if the financial objective is met, to up to 45% of base salary if the
financial objective is exceeded by 10%. Awards earned under this plan are
reduced by any bonus earned under the Corporate Incentive Plan. In fiscal 1997,
no bonuses were paid under this plan.
CORPORATE INCENTIVE PLAN. The Company maintains an incentive plan for most
of its United States and Canadian based employees. This plan provides for annual
cash bonuses based upon the Company's attainment of targeted pre-tax earnings
determined by the Company's Board of Directors. The incentive pool, if any, is
distributed on the basis of relative compensation. In fiscal 1997, bonuses paid
under this plan to Messrs. Ladds, Montgomery, Librock, Tevens, McCreadie, Grant
and Shawvan were $4,900, $3,798, $1,381, $1,845, $2,052, $1,818 and $1,139,
respectively.
401(k) PLAN. The Company maintains a 401(k) retirement savings plan which
covers all salaried and hourly employees who have completed at least 90 days of
service. Employees may contribute up to 15% of their annual compensation (6% for
highly compensated employees), subject to an annual limitation as adjusted by
the Code. Employee contributions are not matched by the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation for the executive officers of the Company is administered by
the Compensation Committee which currently consists of three independent
(non-employee) Directors. The Compensation Committee approves the compensation
arrangements of the Chief Executive Officer and other officers of the Company.
The following objectives, established by the Compensation Committee, are
the basis for the Company's executive compensation program:
o providing a comprehensive program with components including base
salary, performance incentives, and benefits that support and align
with the Company's goal of providing superior value to customers and
shareholders; and
o ensuring that the Company is competitive and can attract and retain
qualified and experienced executive officers and other key personnel;
and
o appropriately motivating its executive officers and other key personnel
to seek to attain short term, intermediate term and long term corporate
and divisional performance goals and to manage the Company for
sustained long term growth.
The Board of Directors of the Company has delegated to the Compensation
Committee responsibility for establishing and administering the compensation
programs for the Chief Executive Officer and other executive officers.
The Compensation Committee reviews compensation policy and specific levels
of compensation paid to the Chief Executive Officer and other executive officers
of the Company, administers the Company's Annual Executive Incentive Program
(AEIP), and reports and makes recommendations to the Board of Directors
regarding executive compensation, policies and programs.
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<PAGE>
The Compensation Committee is assisted in these efforts, when required by
an independent outside consultant, and by the Company's internal staff, who
provide the Compensation Committee with relevant information and recommendations
regarding compensation policies and specific compensation matters.
ANNUAL COMPENSATION PROGRAMS
Executive base salaries are compared to manufacturing companies included in
an annual management survey completed by outside compensation consultants.
Comparison companies in this survey have sales volumes of $400 million to $650
million. This survey is used because it reflects companies in the same revenue
size and industry sectors as the Company. The Compensation Committee believes
salaries should be maintained between the first and third quartiles of surveyed
salaries reported depending upon the relative experience and individual
performance of the executive.
Salary adjustments are governed by guidelines covering three factors (1)
the individual officer's performance (merit), (2) market parity (to adjust
salaries of high performing individuals based on the competitive market), and
(3) promotions (to reflect increases in responsibility). In assessing market
parity, the Company targets groups of companies surveyed and referred to above.
Each executive officer's corporate position is assigned a salary grade
reflecting the Company's evaluation of the position's overall contribution to
corporate goals and the value the labor market places on the associated job
skills. A range of appropriate salaries is then assigned to that salary grade.
Each April, the salary ranges may be adjusted to reflect market conditions,
including changes in comparison companies, inflation, and supply and demand in
the market. The midpoint of the salary range corresponds to a "market rate"
salary which the Compensation Committee believes is appropriate for an
experienced executive who is performing satisfactorily, with salaries in excess
of the salary range midpoint appropriate for executives whose performance is
superior or outstanding.
The Compensation Committee has recommended that any progression or
regression within the salary range for an executive officer shall depend upon a
formal annual review of job performance, accomplishments and progress toward
individual and/or overall goals and objectives for the segments of the Company
that such officer oversees as well as his contributions to the overall direction
of the Company. Long term growth in shareholder value is an important factor.
The results of executive officers' performance evaluations will form a part of
the basis of the Compensation Committee's decision to approve, at its
discretion, future adjustments in base salaries of executive officers.
CHIEF EXECUTIVE OFFICER COMPENSATION
Compensation decisions affecting the Chief Executive Officer were based on
quantitative and qualitative factors relative to the Company's fiscal 1996
financial and operating results as well as strategic achievements such as
acquisitions. Both the salary increase and bonus payout cited below were based
on performance.
The Compensation Committee increased Mr. Ladds' base salary to $355,000 for
fiscal 1997, representing an increase of 3.83% over his base salary for fiscal
1996. This salary adjustment was made in April 1996.
In June 1996, Mr. Ladds received an incentive compensation award of $4,900
under the Corporate Incentive Plan. No awards were made in fiscal 1997 under the
Executive Incentive Plan because financial targets set for this plan were not
achieved.
SECTION 162(m) OF INTERNAL REVENUE CODE
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation in excess of
$1,000,000 paid to a Company's chief executive officer and any one of the four
other most highly paid executive officers during its taxable year. Qualifying
performance-based compensation is not subject to the deduction limit if certain
requirements are met. Based upon the compensation paid to Mr. Ladds and the
Company's other executive officers in fiscal 1997, it does not appear that the
Section 162(m) limitation will have a significant impact on the Company in the
near term. However, the Compensation Committee plans to review this matter
periodically and to
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take such actions as are necessary to comply with the new statute to avoid
non-deductible compensation payments.
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<PAGE>
PERFORMANCE GRAPH
The Performance Graph shown below compares the cumulative total shareholder
return on Common Stock, based on the market price of the Common Stock, with the
total return of the S & P MidCap 400 Index and the NASDAQ National Market
Industrials Index. The comparison of total return assumes that a fixed
investment of $100 was invested on February 22, 1996 (the effective date of the
Company's initial public offering) in Common Stock and in each of the foregoing
indices and further assumes the reinvestment of dividends. The stock price
performance shown on the graph is not necessarily indicative of future price
performance.
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<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of Edward W. Duffy, Randolph A.
Marks and L. David Black, each an outside director of the Company. None of the
members of the Compensation Committee was, during fiscal 1997 or prior thereto,
an officer or employee of the Company or any of its subsidiaries. In fiscal
1997, none of the executive officers of the Company served on the Compensation
Committee of another entity or on any other committee of the Board of Directors
of another entity performing similar functions during such period, except that
Mr. Ladds served on the Compensation Committee of the Board of Directors of
Utica Mutual Insurance Company.
COMPENSATION OF DIRECTORS
The Company pays an annual retainer of $15,000 to its Chairman of the Board
and an annual retainer of $10,000 to each of its other outside directors.
Directors who are employees of the Company do not receive an annual retainer. In
addition, each non-employee director also receives a fee of $1,000 for each
Board of Directors and committee meeting attended and is reimbursed for any
reasonable expenses incurred in attending such meetings.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's Directors and executive officers, and persons who own more than
10% of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission and NASDAQ initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Officers, Directors and greater than 10% shareholders are required
to furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended March 31, 1997 all Section
16(a) filing requirements applicable to its officers, Directors and greater than
10% beneficial owners were complied with.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of May 31, 1997
regarding the beneficial ownership of the Company's Common Stock by (a) each
person who is known by the Company to own beneficially more than 5% of the
Company's Common Stock; (b) by each Director; (c) by each of the executive
officers named in the Summary Compensation Table; and (d) by all executive
officers and Directors of the Company as a group.
NUMBER PERCENTAGE
------ ----------
DIRECTORS, OFFICERS AND 5% SHAREHOLDERS OF SHARES(a) OF CLASS
- --------------------------------------- ------------ --------
Herbert P. Ladds, Jr.(b)(c) 1,108,355 8.06%
Robert L. Montgomery, Jr.(b)(d) 1,147,228 8.34
Edward W. Duffy(b) 397,239 2.89
Randolph A. Marks(b) 239,840 1.74
L. David Black(b) 1,700 *
Kenneth G. McCreadie(b)(e) 605,702 4.40
Peter A. Grant(b)(f) 119,305 *
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Timothy T. Tevens (b)(g) 20,820 *
Ned T. Librock (b)(h) 20,991 *
Ivan E. Shawvan, Jr. (b)(i) 13,260 *
Columbus McKinnon Corporation
Employee Stock Ownership Plan(b) 1,225,045 8.91
All Directors and Executive Officers as a
Group (13 persons)(j)(k) 3,750,380 27.26
Gilchrist B. Berg(l) 818,100 5.95
- ---------------------------
* Less than 1%.
(a) Rounded to the nearest whole share. Unless otherwise indicated in the
footnotes, each of the shareholders named in this table has sole voting and
investment power with respect to the shares shown as beneficially owned by
him, except to the extent that authority is shared by spouses under
applicable law.
(b) The address of each of the executive officers and directors and the
Columbus McKinnon Employee Stock Ownership Plan is c/o Columbus McKinnon
Corporation, 140 John James Audubon Parkway, Amherst, New York 14228-1197.
(c) Includes (i) 917,201 shares of Common Stock owned directly, (ii) 161,705
shares of Common Stock owned directly by Mr. Ladds' spouse, (iii) 15,640
shares of Common Stock held by Mr. Ladds' spouse as trustee for the
grandchildren of Mr. Ladds and (iv) 13,809 shares of Common Stock allocated
to Mr. Ladds' ESOP account.
(d) Includes (i) 1,050,328 shares of Common Stock owned directly, (ii) 85,000
shares of Common Stock owned directly by Mr. Montgomery's spouse and (iii)
11,900 shares of Common Stock allocated to Mr. Montgomery's ESOP account.
Excludes 1,213,145 additional shares of Common Stock owned by the ESOP for
which Mr. Montgomery serves as one of four trustees and for which he
disclaims any beneficial ownership.
(e) Includes (i) 512,329 shares of Common Stock owned directly, (ii) 85,000
shares of Common Stock owned by Mr. McCreadie's spouse and (iii) 8,373
shares of Common Stock allocated to Mr. McCreadie's ESOP account.
(f) Includes (i) 77,240 shares of Common Stock owned directly, (ii) 35,000
shares of Common Stock owned by Mr. Grant's spouse and (iii) 7,065 shares
of Common Stock allocated to Mr. Grant's ESOP account.
(g) Includes (i) 18,009 shares of Common Stock directly, (ii) 50 shares of
Common Stock owned by Mr. Tevens' son and (iii) 2,761 shares of Common
Stock allocated to Mr. Tevens' ESOP account.
(h) Includes (i) 18,004 shares of Common Stock directly, (ii) 152 shares of
Common Stock owned by Mr. Librock's son and (iii) 2,835 shares of Common
Stock allocated to Mr. Librock's ESOP account.
(i) Includes (i) 9,200 shares of Common Stock owned directly and (ii) 4,060
shares of Common Stock allocated to Mr. Shawvan's ESOP account. Excludes
1,220,985 additional shares of Common Stock owned by the ESOP for which Mr.
Shawvan serves as one of four trustees and for which he disclaims any
beneficial ownership.
(j) Excludes the shares of Common Stock owned by the ESOP as to which Messrs.
Montgomery and Shawvan and Ms. Howard serve as trustees, except for an
aggregate of 60,808 shares allocated to the respective ESOP accounts of the
executive officers of the Company.
(k) Includes the shares of Common Stock beneficially owned by Kenneth G.
McCreadie and Peter A. Grant, each of whom retired as of January 3, 1997.
(l) Based on information set forth in a statement on Schedule 13D filed with
the Securities and Exchange Commission by Gilchrist B. Berg on November 1,
1996. The stated business address for Mr. Gilchrist is 225 Water Street,
Suite 1987, Jacksonville, Florida 32202.
VOTE REQUIRED
The affirmative vote of a plurality of the shares of Common Stock present,
in person or by proxy, is required for the election of each Director, assuming a
quorum is present or represented at the meeting.
The Board of Directors recommends a vote "FOR" each of the nominees for
Director.
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<PAGE>
OTHER MATTERS
The Company's management does not presently know of any matters to be
presented for consideration at the Annual Meeting other than the matters
described in the Notice of Annual Meeting. However, if other matters are
presented, the accompanying proxy confers upon the person or persons entitled to
vote the shares represented by the proxy, discretionary authority to vote such
shares in respect of any such other matter in accordance with their best
judgment.
OTHER INFORMATION
Ernst & Young LLP has been selected as the independent auditors for the
Company's current fiscal year and has been the Company's independent auditors
for its most recent fiscal year ended March 31, 1997.
Representatives of Ernst & Young LLP are expected to be present at the 1997
Annual Meeting of Shareholders and will have the opportunity to make a
statement, if they so desire, and will be available to respond to appropriate
questions.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS
SOLICITED, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K, FOR THE FISCAL YEAR ENDED MARCH 31, 1997, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND THE
SCHEDULES THERETO. Such written request should be directed to Columbus McKinnon
Corporation, 140 John James Audubon Parkway, Amherst, New York 14228-1197,
Attention: Robert L. Montgomery, Jr. Each such request must set forth a good
faith representation that, as of June 27, 1997, the person making the request
was a beneficial owner of securities entitled to vote at the Annual Meeting of
Shareholders.
SHAREHOLDERS' PROPOSALS
Proposals of shareholders intended to be presented at the 1998 Annual
Meeting must be received by the Company by March 20, 1998 to be considered for
inclusion in the Company's Proxy Statement and form of proxy relating to that
meeting.
The accompanying Notice and this Proxy Statement are sent by order of the
Board of Directors.
LOIS H. DEMLER
Secretary
Dated: July 16, 1997
- --------------------------------------------------------------------------------
SHAREHOLDERS ARE URGED TO EXECUTE THE ACCOMPANYING PROXY AND RETURN IT
PROMPTLY IN THE ACCOMPANYING ENVELOPE, WHETHER OR NOT THEY EXPECT TO
ATTEND THE MEETING. A SHAREHOLDER MAY NEVERTHELESS VOTE IN PERSON IF HE
OR SHE DOES ATTEND.
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<PAGE>
PROXY
COLUMBUS MCKINNON CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 18, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints HERBERT P. LADDS, JR. and ROBERT L.
MONTGOMERY, JR. and each or any of them, attorneys and proxies, with full power
of substitution, to vote at the Annual Meeting of Shareholders of COLUMBUS
McKINNON CORPORATION (the "Company") to be held at the Company's corporate
offices at 140 John James Audubon Parkway, Amherst, New York, on August 18, 1997
at 10:00 a.m., local time, and any adjournment(s) thereof revoking all previous
proxies, with all powers the undersigned would possess if present, to act upon
the following matters and upon such other business as may properly come before
the meeting or any adjournment(s) thereof.
ELECTION OF DIRECTORS:
_ _
FOR all nominees listed below |_| WITHHOLD AUTHORITY to vote |_|
(except as marked to the for all nominees listed below
contrary below)
(Instruction: To withhold authority to vote for any individual nominee mark the
box next to the nominee's name below):
_ _
|_| EDWARD W. DUFFY |_| RANDOLPH A. MARKS
|_| HERBERT P. LADDS, JR. |_| L. DAVID BLACK
|_| ROBERT L. MONTGOMERY, JR.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES
LISTED ABOVE.
Dated: ___________, 1997
----------------------------------------
Signature
----------------------------------------
Signature if held jointly
Please sign exactly as name appears. When shares are held by
joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If
a partnership, please sign a partnership name by authorized
person. PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
