<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
APPLIED POWER INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:(1)
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
__________________________________
1 Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE> 2
[API LOGO]
P.O. BOX 325
MILWAUKEE, WISCONSIN 53201
(414) 781-6600
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
APPLIED POWER INC.:
Notice is hereby given that the Annual Meeting of Shareholders of APPLIED
POWER INC., a Wisconsin corporation, will be held in Ballroom Number 4 at the
Wyndham Milwaukee Center Hotel, 139 East Kilbourn Avenue, Milwaukee, Wisconsin
on Thursday, January 11, 1996, at 3:30 p.m., Central Time, for the following
purposes:
1. To elect a Board of seven directors; and
2. To transact such other business as may properly come before the
Meeting or any adjournment thereof;
all as set forth in the accompanying Proxy Statement.
The Board of Directors has fixed the close of business on November 16, 1995
as the record date for the determination of shareholders entitled to receive
notice of and to vote at the Meeting or any adjournment thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE
AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ACCOMPANYING ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IT IS IMPORTANT THAT YOUR
SHARES BE REPRESENTED AT THE MEETING, WHETHER YOUR HOLDINGS ARE LARGE OR SMALL.
IF FOR ANY REASON YOU SHOULD DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AT ANY
TIME BEFORE IT IS VOTED.
By Order of the Board of Directors
Anthony W. Asmuth III
Secretary
Milwaukee, Wisconsin
November 22, 1995
<PAGE> 3
[API LOGO]
P.O. BOX 325
MILWAUKEE, WISCONSIN 53201
(414) 781-6600
PROXY STATEMENT
---------------
THIS PROXY STATEMENT WAS FIRST MAILED TO
SHAREHOLDERS ON OR ABOUT NOVEMBER 22, 1995
---------------
Accompanying this Proxy Statement is a Notice of Annual Meeting of
Shareholders and a form of proxy for such Meeting solicited by the Board of
Directors of Applied Power Inc. (the "Company"). The Company's Annual Report
on Form 10-K for the year ended August 31, 1995, which constitutes the 1995
Annual Report to Shareholders and accompanies this Proxy Statement, contains
financial statements and certain other information concerning the Company. The
Annual Report and such financial statements are neither a part of this Proxy
Statement nor incorporated herein by reference.
The shares represented by all properly executed proxies received in time
for the Meeting will be voted as specified on such proxies. A proxy may be
revoked at any time before it is exercised. The cost of soliciting proxies,
including forwarding expense to beneficial owners of stock held in the name of
another, will be borne by the Company. No solicitation other than by mail is
contemplated, except that officers and employees of the Company may solicit the
return of proxies from certain shareholders by telephone. Shares held for the
accounts of participants in the Company's Employee Stock Purchase Plan ("ESPP")
and Employee Stock Ownership Plan ("ESOP") will be voted in accordance with the
instructions of the participants or otherwise in accordance with the terms of
such plans.
A majority of the votes entitled to be cast by shares entitled to vote,
represented in person or by proxy, constitutes a quorum for action on a matter
at the Meeting. Directors are elected by a plurality of the votes cast by the
holders of shares entitled to vote in the election at a meeting at which a
quorum is present. A "plurality" means that the individuals who receive the
largest number of votes are elected as directors up to the maximum number of
directors to be elected at the meeting. Shares for which authority is withheld
to vote for director nominees and broker non-votes (i.e., proxies from brokers
or nominees indicating that such persons have not received instructions from
the beneficial owners or other persons entitled to vote shares as to a matter
with respect to which the brokers or nominees do not have discretionary power
to vote) are considered present for purposes of establishing a quorum but will
have no effect on the election of directors except to the extent that the
failure to vote for a director nominee results in another nominee receiving a
larger number of votes. Votes attempted to be cast against a candidate are not
given legal effect and are not counted as votes cast in an election of
directors.
On November 16, 1995, the record date for determining shareholders entitled
to receive notice of and to vote at the Annual Meeting of Shareholders, the
Company's outstanding capital stock consisted of 13,414,015 shares of Class A
Common Stock ("Common Stock"). Each share of Common Stock outstanding on the
record date is entitled to one vote on all matters submitted at the Meeting.
<PAGE> 4
CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of November 16, 1995 unless otherwise
indicated, certain information with respect to the beneficial ownership of
Common Stock by each person known to management to be the beneficial owner of
more than 5% of the Common Stock, by each executive officer of the Company
named in the Summary Compensation Table below and by the Company's executive
officers and directors as a group. Briefly stated, shares are deemed to be
beneficially owned by any person or group having the power to vote or direct
the vote or the power to dispose or direct the disposition of such shares, or
who has the right to acquire beneficial ownership thereof within 60 days.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
- ---------------- ------------ --------
<S> <C> <C>
Brinson Holdings, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 831,900(2) 6.2%
209 South LaSalle Street
Suite 1100
Chicago, IL 60604-1295
Barbara B. Buzard . . . . . . . . . . . . . . . . . . . . . . . . . . . 832,330(3) 6.2%
6144 North Brumder Road
Hartland, WI 53029
Firstar Trust Company . . . . . . . . . . . . . . . . . . . . . . . . . 1,174,061(3)(4) 8.8%
777 East Wisconsin Avenue
Milwaukee, WI 53202
J.P. Morgan & Co. Incorporated . . . . . . . . . . . . . . . . . . . . 1,502,150(5) 11.2%
60 Wall Street
New York, NY 10260
Richard G. Sim . . . . . . . . . . . . . . . . . . . . . . . . . . . . 728,478(6) 5.3%
13000 West Silver Spring Drive
Butler, WI 53007
William J. Albrecht . . . . . . . . . . . . . . . . . . . . . . . . . . 38,799(7) *
Robert C. Arzbaecher . . . . . . . . . . . . . . . . . . . . . . . . . 10,931(8) *
Robert G. Deuster . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,882(9) *
Theodore M. Lecher . . . . . . . . . . . . . . . . . . . . . . . . . . 38,150(10) *
All Executive Officers and Directors as a Group (19 persons) . . . . . 1,304,773(11) 9.3%
- -------------------------
</TABLE>
*Less than 1%.
2
<PAGE> 5
(1) Unless otherwise noted, the specified persons have sole voting power
and/or dispositive power over the shares shown as beneficially owned.
(2) As set forth on Form 13F, dated June 30, 1995, reporting (for two of its
affiliates, Brinson Partners, Inc. and Brinson Trust Company) sole voting
power as to 675,900 shares and sole dispositive power as to 831,900
shares.
(3) Includes 493,350 shares held by a trust with respect to which Barbara B.
Buzard, Donald S. Buzard and Firstar Trust Company share voting and
dispositive power.
(4) Includes 648,973 shares held by Firstar Trust Company as trustee of the
Company's ESOP wherein the voting of such shares and their disposition in
a tender offer is directed by the participants but the trustee has the
power of disposition in all other circumstances, and 31,738 additional
shares of Common Stock of which Firstar Trust Company shares voting power
and/or the power of disposition. Excludes 44,791 shares held by Firstar
Trust Company as administrator of the ESPP; under such plan the
administrator does not have discretion as to disposition, and voting of
the shares is directed by the participants.
(5) As set forth on Form 13F-E, dated June 30, 1995, reporting (for two of its
affiliates, J.P. Morgan Investment Management Inc. and Morgan Guaranty
Trust Co. of New York) sole voting power as to 1,108,950 shares and sole
dispositive power as to 1,502,150 shares.
(6) Includes options to purchase 403,471 shares exercisable currently or
within 60 days of the record date and 2,541 shares allocated to his ESOP
account.
(7) Includes options to purchase 37,388 shares exercisable currently or within
60 days of the record date and 1,411 shares allocated to his ESOP account.
(8) Includes options to purchase 6,750 shares exercisable currently or within
60 days of the record date and 681 shares allocated to his ESOP account.
(9) Includes options to purchase 105,088 shares exercisable currently or
within 60 days of the record date and 1,919 shares allocated to his ESOP
account.
(10) Includes options to purchase 35,975 shares exercisable currently or within
60 days of the record date and 2,099 shares allocated to his ESOP account.
(11) Includes options to purchase 658,262 shares exercisable currently or
within 60 days of the record date, 13,334 shares allocated to executive
officers' ESOP accounts and 188,516 shares held by certain trusts with
respect to which certain officers have voting power and the power of
disposition.
The beneficial ownership information set forth above, and below under
"Election of Directors," is based on information furnished by the specified
persons or known to the Company and is determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934, as required for purposes of this
Proxy Statement. It is not necessarily to be construed as an admission of
beneficial ownership for other purposes.
ELECTION OF DIRECTORS
At the Meeting, seven directors are to be elected to serve until the next
annual meeting of shareholders and until their successors shall be elected. It
is the intention of the persons named in the accompanying form of proxy to
nominate as directors and, unless otherwise specified in a proxy by a
shareholder, to vote such proxy for the election of the persons named below.
In the event any of the nominees should become unable to serve as a director,
an eventuality which management has no reason to believe will occur, proxies
may be voted for another nominee. Each person named below is presently serving
as a director of the Company.
3
<PAGE> 6
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
AT NOVEMBER 16, 1995
--------------------
DIRECTOR NUMBER PERCENT
NAME AND PRINCIPAL OCCUPATION AGE SINCE OF SHARES OF CLASS
----------------------------- --- ------- ----------- --------
<S> <C> <C> <C> <C>
H. Richard Crowther . . . . . . . . . . . . . . . . . . . . . . 63 1995 1,500(4) *
Retired Vice Chairman, Illinois Tool Works Inc.
(manufacturer of engineered components and systems)
Jack L. Heckel (1)(2) . . . . . . . . . . . . . . . . . . . . . 64 1993 3,000(5) *
Retired President and Chief Operating Officer, GenCorp.
Inc. (manufacturer of aerospace and defense, polymer and
automotive products)
Richard M. Jones (1)(2) . . . . . . . . . . . . . . . . . . . . 68 1989 9,000(6) *
Retired Chairman of the Board and Chief Executive
Officer, Guaranty Federal Savings Bank
Richard A. Kashnow (1)(3) . . . . . . . . . . . . . . . . . . . 53 1993 3,500(5) *
Chairman of the Board, President and Chief Executive
Officer, Raychem Corporation (global manufacturer of
materials science-based products for electronics,
telecommunications and industrial applications)
L. Dennis Kozlowski (1)(2)(3) . . . . . . . . . . . . . . . . . 49 1994 2,000(4) *
Chairman of the Board, President and Chief Executive
Officer, Tyco International Ltd. (manufacturer of
fire protection systems, flow control devices, fiber
optics communication cable and disposable products)
Richard G. Sim . . . . . . . . . . . . . . . . . . . . . . . . 51 1985 728,478(7) 5.3%
Chairman of the Board, President and Chief Executive
Officer, Applied Power Inc.
Raymond S. Troubh (1)(3) . . . . . . . . . . . . . . . . . . . 69 1985 67,250(6) *
Financial Consultant
- -------------------------
</TABLE>
*Less than 1%.
(1) Member of the Compensation Committee of the Board of Directors.
(2) Member of the Audit Committee of the Board of Directors.
(3) Member of the Nominating Committee of the Board of Directors.
(4) Includes option to purchase 1,000 shares exercisable currently or within
60 days of the record date.
(5) Includes options to purchase 2,000 shares exercisable currently or within
60 days of the record date.
(6) Includes options to purchase 6,000 shares exercisable currently or within
60 days of the record date.
(7) Includes options to purchase 403,471 shares exercisable currently or
within 60 days of the record date and 2,541 shares allocated to his ESOP
account.
4
<PAGE> 7
All of the directors have held positions with the Company or other
organizations shown in the above table during the past five years, except that
(i) H. Richard Crowther was Vice Chairman of Illinois Tool Works Inc. from
January 1990 through March 1995; (ii) Jack L. Heckel was President and Chief
Operating Officer of GenCorp. Inc. from January 1987 through December 1993;
(iii) Richard M. Jones was Chairman of the Board and Chief Executive Officer of
Guaranty Federal Savings Bank from January 1989 through December 1991; (iv)
Richard A. Kashnow was President of Schuller International Group, Inc. from May
1991 through September 1995 and Senior Vice President and General Manager of
Manville Corporation from September 1987 through April 1991; and (v) L. Dennis
Kozlowski was named President of Tyco International Ltd. in December 1989, its
Chief Executive Officer in July 1992 and its Chairman of the Board in January
1993.
H. Richard Crowther is a director of Illinois Tool Works Inc. Jack L.
Heckel is a director of WD-40 Co. and Advanced Tissue Sciences, Inc. Richard
M. Jones is a director of Baker, Fentress & Co., Guaranty Federal Savings Bank,
Illinois Tool Works Inc. and MCI Communications Corporation. Richard A.
Kashnow is a director of Raychem Corporation. L. Dennis Kozlowski is a
director of Tyco International Ltd. and Thiokol Corporation. Richard G. Sim is
a director of Falcon Building Products Inc., The Gehl Company and IPSCO Inc.
Raymond S. Troubh is a director of ADT Limited, America West Airlines, Inc.,
ARIAD Pharmaceuticals, Inc., Becton Dickinson and Company, Benson Eyecare
Corporation, Foundation Health Corporation, General American Investors Company,
Inc., Manville Corporation, Olsten Corporation, Petrie Stores Corporation,
Riverwood International Corporation, Time Warner Inc., Triarc Companies, Inc.
and WHX Corporation.
BOARD MEETINGS, COMMITTEES AND DIRECTOR COMPENSATION
There were seven meetings of the Board of Directors, two meetings of the
Audit Committee, four meetings of the Compensation Committee and one meeting of
the Nominating Committee during the year ended August 31, 1995. During the
period in the last fiscal year in which they served, all members of the Board
of Directors attended at least 75% of the total number of meetings of the Board
of Directors and all the committees on which they served.
The Audit Committee of the Board of Directors: (i) reviews the scope and
timing of the audit of the Company's financial statements by the Company's
independent accountants; (ii) reviews with the independent accountants, and
with the Company's management, policies and procedures with respect to internal
auditing and financial and accounting controls; and (iii) reviews with the
independent accountants their reports on the Company's financial statements and
recommendations they make for improvements in the Company's internal controls
and the implementation of such recommendations.
The Compensation Committee of the Board of Directors determines the
compensation of the Company's executive officers, awards bonuses to such key
management personnel as the Committee selects and administers the Company's
stock option plans.
The Nominating Committee of the Board of Directors seeks qualified persons
for the position of director to recommend to the entire Board of Directors. In
carrying out its responsibilities, the Nominating Committee will consider
candidates suggested by other directors, employees and shareholders.
Suggestions for candidates, accompanied by biographical material, may be sent
to the Secretary of the Company at its corporate offices.
5
<PAGE> 8
For the 1995 fiscal year, directors who were not employees of the Company
were paid an annual retainer of $19,000 for serving on the Board of Directors
and an attendance fee of $1,000 for each Board of Directors meeting and
committee meeting attended. Directors who are employees of the Company do not
receive separate remuneration in connection with their service on the Board or
Board committees.
In May 1995, the Board of Directors adopted the Outside Directors'
Deferred Compensation Plan (the "Deferred Compensation Plan"). Under the
Deferred Compensation Plan, each non-employee director may elect to defer all
or a specified portion of his annual retainer and attendance fees for future
payment on a date specified by the participant or upon termination of the
participant's service as a director. A participating non-employee director's
deferred compensation is credited to an account, the value of which is based
upon phantom investments in Common Stock. Distributions from the Deferred
Compensation Plan are only made in cash.
Each non-employee director also receives an option each year to purchase
1,000 shares of Common Stock under the 1989 Outside Directors' Stock Option
Plan (the "1989 Plan"). The 1989 Plan is intended to promote the growth and
development of the Company by providing incentives for non-employee directors
of the Company through the grant to such directors of nonqualified stock
options to acquire shares of Common Stock. There is no discretion as to the
amount or timing of options to be granted, which are fixed by the terms of the
1989 Plan. The exercise price at which shares may be purchased under each
option is equal to the fair market value of the shares on the date of grant.
Options are not exercisable until eleven months after the date of grant and
then become fully exercisable, in whole or in part, at any time prior to their
expiration or termination. Unless earlier exercised or terminated, the
expiration date of each option granted under the 1989 Plan is ten years and one
day after the date of grant. All of the non-employee directors (except Mr.
Crowther, who was not a director of the Company at the date of grant) were
granted options in fiscal 1995 for 1,000 shares of Common Stock at an exercise
price of $25.00 per share. At November 16, 1995, options for 5,000 shares had
been exercised, options for 20,000 shares were outstanding and 35,000 shares
were reserved for future grants under the 1989 Plan.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
Development of Compensation Approach and Objectives. The Compensation
Committee of the Board of Directors establishes all of the policies under which
compensation is paid or awarded to the Company's executive officers, and
determines the amount of such compensation. No member of the Committee is
employed by the Company. The Committee's objective is to develop a total
compensation program that is competitive in the marketplace and which provides
significant incentive to increase shareholder value. Each year the Committee
reviews the executive compensation policies with respect to the market
competitiveness of the program, and then determines what changes, if any, are
appropriate in the compensation program for the following year. Compensation
of the Company's executive officers currently consists of three key elements--
salary, bonus and stock options.
The Committee retains an independent outside consultant who provides data
regarding compensation practices in U.S. manufacturing companies. Competitive
pay standards are based upon the results of several compensation surveys,
including comparisons with several hundred manufacturing companies. This data,
along with management's recommendations for particular executive officer
compensation, and information on an executive's experience, expertise and
demonstrated performance, is reviewed by the Committee. The
6
<PAGE> 9
total value of each executive's pay standard is intended to equal the
competitive median for like positions in companies of similar size and type,
but the mix of compensation is atypical. Specifically, cash compensation is
lower than the median: salary standards are targeted at 95% of the market
median and target bonuses are set at 70% of the market median. Stock option
grants, on the other hand, are above the median for other companies in order to
bring the total compensation opportunity up to competitive market standards.
This compensation mix is designed to encourage a continued focus on building
shareholder value. While the Committee does exercise its discretion to vary
compensation from these guidelines, in general, it has followed this approach
in determining executive officer compensation.
Stock Option Component. Stock options are granted annually to executive
officers. Options may also be granted to other key employees whose present and
future contributions are especially important to the Company. All option
grants are priced at 100% of market value as of the date of grant. Unless
earlier terminated, options expire ten years from the date of grant and
generally become exercisable as to half of the shares granted two years after
the date of grant and fully exercisable five years after the date of grant.
The Committee values stock option grants at 50% of the exercise price.
This valuation method is recommended by the Committee's independent consultant
because it reflects the average discounted value of the actual gains produced
by options granted by U.S. industrial firms over the past several decades. The
Committee favors the simplicity of this 50% estimate and believes it to be as
good a predictor of the actual gains and costs of an option grant as other
methods.
Key Measurement Criteria for Bonuses. Bonus payments are made to each
executive based upon the degree of achievement of each year's financial and
personal objectives. An executive may receive more, or less, than the target
bonus based on actual business results and satisfaction of executive-specific
goals.
Each executive responsible for a business unit is measured principally by
the performance of that unit. The measuring index utilized is "Combined
Management Measure" ("CMM"), which is unit operating profit less a charge based
upon the net assets employed by the unit. In fiscal 1995, CMM constituted 60%
of the bonus measurement for Messrs. William J. Albrecht, Robert G. Deuster and
Theodore M. Lecher. Twenty percent of Messrs. Albrecht's, Deuster's and
Lecher's respective bonus paid for fiscal 1995 was based on the Company's
return on net assets ("RONA") and earnings per share ("EPS") for the period,
weighted equally. The remaining 20% of Messrs. Albrecht's, Deuster's and
Lecher's respective bonus was based on other goals specific to the individual,
such as sales growth or business development in specified markets. Business
unit executive officers were eligible for the personal objective portion of
their bonus for fiscal 1995 only if pre-established minimum financial
thresholds were met. For the fiscal year ended August 31, 1995, bonuses earned
and paid to business unit executives ranged from 100% to 126% of their target
bonuses and averaged 110% of such target bonuses.
Bonus payments for Company executives not in charge of business units are
primarily determined by the performance of the Company as a whole. For fiscal
1995, 40% of such an executive's bonus was based on the Company's RONA and 40%
on the Company's EPS for the period. The remaining 20% of such a bonus was
based on the degree of accomplishment of certain pre-determined projects and
programs related to each executive's area of responsibility. For the fiscal
year ended August 31, 1995, bonuses earned and paid to this group ranged from
163% to 174% of their target bonuses and averaged 171% of such target bonuses.
7
<PAGE> 10
Chief Executive Officer Compensation. Competitive data provided by the
Committee's independent consultant established a total compensation value of
$1,127,000 for the chief executive officer position. Following the
compensation philosophy described above for the executive officers, the
compensation opportunity for Richard G. Sim, the Company's Chief Executive
Officer, consisted of a salary of $362,000 (approximately 95% of the market
median), a target bonus of $232,000 (70% of the market median) and a stock
option grant valued at $533,000 (49,900 shares valued at 50% of the exercise
price).
Mr. Sim's fiscal 1995 salary of $362,000 remained unchanged from the prior
year. Mr. Sim's fiscal 1995 bonus was based solely on Company performance, 50%
of which was measured by RONA and 50% by EPS. Mr. Sim's fiscal 1995 bonus of
$411,730, which represents 177% of his target bonus, reflects attainment of
181.6% of the Company's RONA target and 173% of the Company's EPS target.
Tax Deductibility of Executive Compensation. Section 162(m) of the
Internal Revenue Code limits the Company's federal income tax deduction to
$1,000,000 per year for compensation to its chief executive officer or any of
its four other highest paid executive officers. Performance-based compensation
is not, however, subject to the deduction limit, provided certain requirements
of Section 162(m) are satisfied. Under regulations proposed by the Internal
Revenue Service, grants of stock options under the Company's stock option plan
currently qualify under a transition rule as performance-based compensation.
In order to preserve the deductibility of performance-based compensation, the
Company will seek to comply with Section 162(m) of the Internal Revenue Code to
the extent such compliance is practicable and in the best interests of the
Company and its shareholders.
Richard M. Jones, Chairman
Jack L. Heckel
Richard A. Kashnow
L. Dennis Kozlowski
Raymond S. Troubh
SUMMARY COMPENSATION TABLE
The following table sets forth compensation awarded to, earned by or paid
to the Company's Chief Executive Officer and each of the Company's other four
most highly compensated executive officers who were serving as executive
officers at the end of fiscal 1995 for services rendered to the Company and its
subsidiaries during fiscal 1995 ("named executive officers"). Also included in
the table is compensation information for those individuals for fiscal years
1993 and 1994.
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
--------------------- ---------------------
AWARDS
----------- ALL OTHER
SECURITIES UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS/SARS(#)(1) ($)(2)
--------------------------- ---- --------- -------- --------------------- ---------------
<S> <C> <C> <C> <C> <C>
Richard G. Sim
Chairman, President and
Chief Executive Officer 1995 362,000 411,730 49,900 27,674
Chairman, President and
Chief Executive Officer 1994 362,000 176,620 52,000 11,515
Chairman, President and
Chief Executive Officer 1993 362,000 0 52,000 39,917
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
--------------------- ---------------------
AWARDS
----------- ALL OTHER
SECURITIES UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS/SARS(#)(1) ($)(2)
--------------------------- ---- --------- -------- --------------------- --------------
<S> <C> <C> <C> <C> <C>
Robert G. Deuster
Senior Vice President,
Distributed Products 1995 210,000 104,554 19,900 12,381
Senior Vice President,
Distributed Products 1994 186,664 14,400 13,625 5,739
Vice President;
President of Barry Controls 1993 180,000 96,864 14,500 5,739
William J. Albrecht
Senior Vice President,
Engineered Solutions 1995 190,000 90,350 17,800 14,279
Senior Vice President,
Engineered Solutions 1994 162,672 51,374 15,875 12,310
Vice President; President
of APITECH/Power-Packer 1993 140,000 23,068 15,500 11,982
Theodore M. Lecher
Vice President; President of
GB Electrical 1995 160,000 87,941 8,100 11,960
Vice President; President of
GB Electrical 1994 150,000 61,020 11,750 5,329
Vice President; President of
GB Electrical 1993 144,000 65,308 12,000 5,329
Robert C. Arzbaecher
Vice President and Chief
Financial Officer 1995 138,171 120,502 12,000(3) 5,352
Vice President, Finance,
Distributed Products 1994 116,000 30,216 5,000 4,340
Controller 1993 107,500 18,668 5,000 3,896
</TABLE>
_________________________
(1) Consists entirely of stock options. In July or August of each year, the
Compensation Committee awards options applicable to the executive's
compensation for the following fiscal year. Option awards listed for a
given fiscal year reflect the option grant which was made at the end of
the prior fiscal year.
(2) The 1995 amounts represent: (a) the Company's 401(k) matching
contributions as follows: Mr. Sim - $300, Mr. Deuster - $300, Mr.
Albrecht - $300, Mr. Lecher - $300 and Mr. Arzbaecher - $300; (b) Company
allocations under the ESOP as follows: Mr. Sim - $16,159, Mr. Deuster -
$6,732, Mr. Albrecht - $7,241, Mr. Lecher - $6,631 and Mr. Arzbaecher -
$5,052; and (c) premiums paid by the Company for split-dollar life
insurance as follows: Mr. Sim - $11,215, Mr. Deuster - $5,349, Mr.
Albrecht - $6,738, Mr. Lecher - $5,029 and Mr. Arzbaecher - $0.
9
<PAGE> 12
(3) Includes stock option for 10,000 shares granted in October 1994 upon Mr.
Arzbaecher's election as Vice President and Chief Financial Officer.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning stock option grants
during the last fiscal year to the named executive officers. No stock
appreciation rights ("SARs") were granted in fiscal 1995. These grants (other
than the 10,000 share grant to Mr. Arzbaecher) comprise the stock option
element of the executive's fiscal 1996 compensation.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
--------------------------------------------------------------------------- ANNUAL RATES OF
NUMBER OF STOCK PRICE
SECURITIES APPRECIATION FOR
UNDERLYING PERCENT OF TOTAL OPTIONS/SARS EXERCISE OR OPTION TERM(3)
OPTIONS/SARS GRANTED TO EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
GRANTED(#) FISCAL YEAR(1) ($/SH) DATE(2) 5%($) 10%($)
------------ ----------------------------- ----------- ---------- ------- --------
NAME
----
<S> <C> <C> <C> <C> <C> <C>
Richard G. Sim 53,100 23.3% 29.250 7/21/05 976,783 2,475,361
Robert G. Deuster 14,800 6.5% 29.250 7/21/05 272,248 689,931
William J. Albrecht 14,800 6.5% 29.250 7/21/05 272,248 689,931
Theodore M. Lecher 8,400 3.7% 29.250 7/21/05 154,519 391,583
Robert C. Arzbaecher 10,000 4.4% 24.125 10/23/04 151,721 384,490
9,300 4.1% 29.250 7/21/05 171,075 433,538
- -------------------------
</TABLE>
(1) Based on stock option grants for 227,740 shares to all employees during
the fiscal year ended August 31, 1995.
(2) Unless earlier terminated, options expire ten years from the date of grant
and generally become exercisable as to half of the shares granted two
years after the date of grant and fully exercisable five years after the
date of grant.
(3) The dollar amounts under these columns are the result of calculations at
5% and 10% appreciation rates set by the Securities and Exchange
Commission and are not intended to forecast possible future appreciation,
if any, of the Common Stock price.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth information for each of the named executive
officers concerning the exercise of stock options during fiscal 1995 and the
number and value of stock options outstanding at the end of the fiscal year.
No SARs are outstanding.
10
<PAGE> 13
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING EXERCISED VALUE OF UNEXERCISED
ACQUIRED ON VALUE OPTIONS/SARS AT FISCAL IN-THE-MONEY OPTIONS/SARS
NAME EXERCISE(#) REALIZED($) YEAR-END (#) AT FISCAL YEAR-END($)(2)
---- ----------- ----------- ------------------------------ ------------------------------
EXERCISABLE UNEXERCISABLE(1) EXERCISABLE UNEXERCISABLE(1)
----------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Richard G. Sim 0 0 403,471 176,750 6,338,369 2,045,213
Robert G. Deuster 0 0 105,088 53,462 2,049,264 611,101
William J. Albrecht 0 0 35,388 54,987 559,849 654,019
Theodore M. Lecher 13,000 88,094 35,975 33,475 559,600 416,013
Robert C. Arzbaecher 0 0 6,750 28,050 114,594 264,131
</TABLE>
_________________________
(1) Represents unvested options at the end of fiscal 1995.
(2) Based on the $33.125 closing price of the Common Stock on the New York
Stock Exchange at the end of the fiscal year.
PERFORMANCE GRAPHS
The following graph shows the cumulative total shareholder return on the
Common Stock during the preceding five fiscal years as compared to the returns
on the Standard & Poor's 500 Stock Index and the Standard & Poor's Diversified
Manufacturing Index. The graph assumes that $100 was invested on August 31,
1990 in the Common Stock and each index and that all dividends were reinvested.
[ 1990-1995 GRAPH ]
11
<PAGE> 14
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
APPLIED POWER $100.00 $ 90.83 $ 88.68 $ 97.24 $129.05 $193.03
S&P 500 INDEX 100.00 126.91 136.96 157.80 166.43 202.12
S&P DIV. MFG. INDEX 100.00 127.45 125.37 157.61 176.40 230.41
</TABLE>
The following graph shows the cumulative total shareholder return on the
Common Stock since it became publicly traded on August 6, 1987 through August
31, 1995 as compared to the returns on the Standard & Poor's 500 Stock Index
and the Standard & Poor's Diversified Manufacturing Index. The graph assumes
that $100 was invested on August 6, 1987 in the Common Stock and each index and
that all dividends were reinvested.
[ 8/6/87-1995 GRAPH ]
<TABLE>
<CAPTION>
8/6/87 1987 1988 1989 1990 1991 1992 1993 1994 1995
------ ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
APPLIED POWER $100.00 $111.43 $220.26 $278.08 $230.88 $209.72 $204.74 $224.51 $297.95 $445.67
S&P 500 INDEX 100.00 102.39 83.97 116.92 111.09 140.98 152.15 175.30 184.89 224.54
S&P DIV. MFG.
INDEX 100.00 102.88 84.39 104.87 94.99 121.07 119.09 149.71 167.57 218.86
</TABLE>
12
<PAGE> 15
EMPLOYMENT AGREEMENT
The Company entered into an agreement with Richard G. Sim in May 1994
which superseded his employment agreement originally entered into in July 1985.
The agreement provides that if Mr. Sim's employment with the Company is
terminated as a result of his death or permanent disability, he or his
beneficiary will receive his then current salary for a period of one year
following such termination and a pro rata portion of any bonus award earned for
the fiscal year in which such termination occurs. During the term of the
agreement, the Company must maintain Mr. Sim's coverage under its present
long-term disability benefit plan or a substantially similar plan providing at
least comparable benefits. In the event that Mr. Sim qualifies for a long-term
disability benefit under such plan, the Company will supplement any plan
benefit payable to Mr. Sim to the extent necessary to provide a total long-term
disability benefit payment that is equal to 30% of his then base pay. Such
supplemental benefit will be provided at no cost to Mr. Sim.
OTHER INFORMATION
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Based on information available to it, the Company is not aware that any
director, officer or beneficial owner of 10% or more of the Common Stock failed
to file on a timely basis reports required by Section 16(a) of the Securities
Exchange Act of 1934 during the last fiscal year, except that Ms. Barbara R.
Harris, a former officer of the Company, inadvertently failed to file on a
timely basis after leaving the Company, one report relating to four
transactions involving the simultaneous exercise of Company stock options and
sale of the underlying Common Stock. These late filings were cured promptly
after Ms. Harris became aware of them.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP as the
independent certified public accountants to audit the financial statements of
the Company for the fiscal year ending August 31, 1996. The Company expects
that representatives of Deloitte & Touche LLP will be present at the Annual
Meeting and available to respond to appropriate questions and have the
opportunity to make a statement if they desire.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company no later than July
25, 1996 in order to be considered for inclusion in next year's annual meeting
proxy statement.
ADDITIONAL MATTERS
Management is not aware of any matters which will be presented for action
at the Meeting other than the proposal set forth in the Notice of Annual
Meeting and described herein. If other matters do come before the Meeting, it
is intended that proxies will be voted in accordance with the judgment of the
person or persons exercising the authority conferred thereby.
By Order of the Board of Directors
Anthony W. Asmuth III
Secretary
Milwaukee, Wisconsin
November 22, 1995
13
<PAGE> 16
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR
NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, SHAREHOLDERS ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THEIR PROXY AS SOON AS POSSIBLE.
A COPY (WITHOUT EXHIBITS) OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR
THE FISCAL YEAR ENDED AUGUST 31, 1995 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION HAS BEEN PROVIDED WITH THIS PROXY STATEMENT. ADDITIONAL COPIES OF
THE FORM 10-K ARE AVAILABLE, FREE OF CHARGE, UPON REQUEST DIRECTED TO ROBERT C.
ARZBAECHER, VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, APPLIED POWER INC.,
P.O. BOX 325, MILWAUKEE, WISCONSIN 53201.
14
<PAGE> 17
APPLIED POWER INC.
ANNUAL MEETING OF SHAREHOLDERS - JANUARY 11, 1996
P R O X Y
CLASS A COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
RICHARD G. SIM AND ROBERT C. ARZBAECHER, and each of them, are hereby
authorized as Proxies, with full power of substitution, to represent and vote
the Class A Common Stock of the undersigned at the Annual Meeting of
Shareholders of Applied Power Inc., a Wisconsin corporation, to be held on
Thursday, January 11, 1996, or any adjournment thereof, with like effect as if
the undersigned were personally present and voting, upon the following matters:
<TABLE>
<S> <C> <C>
1. Election of Directors [ ] FOR all nominees listed below (except [ ] WITHHOLD AUTHORITY to vote for
as marked to the contrary below) all nominees listed below
</TABLE>
H. RICHARD CROWTHER, JACK L. HECKEL, RICHARD M. JONES, RICHARD A. KASHNOW,
L. DENNIS KOZLOWSKI, RICHARD G. SIM AND RAYMOND S. TROUBH
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the line provided below.)
________________________________________________________________________________
2. In their discretion, upon such other business as may properly come before
the Meeting or any adjournment thereof;
all as set out in the Notice and Proxy Statement relating to the Meeting,
receipt of which is hereby acknowledged.
(Continued on reverse side)
(Continued from reverse side)
ESOP
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER SPECIFIED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSAL 1.
Dated: ____________________, 19___
____________________________________
____________________________________
Signature(s) of Shareholder(s)
PLEASE SIGN PERSONALLY AS NAME
APPEARS AT LEFT. When signing
as attorney, executor, administrator,
personal representative, trustee or
guardian, give full title as such.
If signer is a corporation, sign full
corporate name by duly authorized
officer. If stock is held in the
name of two or more persons,
all should sign.
PLEASE SIGN AND DATE THIS PROXY AND RETURN IN ENCLOSED PREPAID ENVELOPE -
PLEASE DO NOT FOLD
<PAGE> 18
APPLIED POWER INC.
ANNUAL MEETING OF SHAREHOLDERS - JANUARY 11, 1996
P R O X Y
CLASS A COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
RICHARD G. SIM AND ROBERT C. ARZBAECHER, and each of them, are hereby
authorized as Proxies, with full power of substitution, to represent and vote
the Class A Common Stock of the undersigned at the Annual Meeting of
Shareholders of Applied Power Inc., a Wisconsin corporation, to be held on
Thursday, January 11, 1996, or any adjournment thereof, with like effect as if
the undersigned were personally present and voting, upon the following matters:
<TABLE>
<S> <C> <C>
1. Election of Directors [ ] FOR all nominees listed below (except [ ] WITHHOLD AUTHORITY to vote for all
as marked to the contrary below) nominees listed below
</TABLE>
H. RICHARD CROWTHER, JACK L. HECKEL, RICHARD M. JONES, RICHARD A. KASHNOW,
L. DENNIS KOZLOWSKI, RICHARD G. SIM AND RAYMOND S. TROUBH
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the line provided below.)
________________________________________________________________________________
2. In their discretion, upon such other business as may properly come before
the Meeting or any adjournment thereof;
all as set out in the Notice and Proxy Statement relating to the Meeting,
receipt of which is hereby acknowledged.
(Continued on reverse side)
(Continued from reverse side)
ESPP
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER SPECIFIED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSAL 1.
Dated: ____________________, 19___
____________________________________
____________________________________
Signature(s) of Shareholder(s)
PLEASE SIGN PERSONALLY AS NAME
APPEARS AT LEFT. When signing as
attorney, executor, administrator,
personal representative, trustee or
guardian, give full title as such. If
signer is a corporation, sign full
corporate name by duly authorized
officer. If stock is held in the name
of two or more persons, all should sign.
PLEASE SIGN AND DATE THIS PROXY AND RETURN IN ENCLOSED PREPAID ENVELOPE -
PLEASE DO NOT FOLD
<PAGE> 19
APPLIED POWER INC.
ANNUAL MEETING OF SHAREHOLDERS - JANUARY 11, 1996
P R O X Y
CLASS A COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
RICHARD G. SIM AND ROBERT C. ARZBAECHER, and each of them, are hereby
authorized as Proxies, with full power of substitution, to represent and vote
the Class A Common Stock of the undersigned at the Annual Meeting of
Shareholders of Applied Power Inc., a Wisconsin corporation, to be held on
Thursday, January 11, 1996, or any adjournment thereof, with like effect as if
the undersigned were personally present and voting, upon the following matters:
<TABLE>
<S> <C> <C>
1. Election of Directors [ ] FOR all nominees listed below (except [ ] WITHHOLD AUTHORITY to vote for all
as marked to the contrary below) nominees listed below
</TABLE>
H. RICHARD CROWTHER, JACK L. HECKEL, RICHARD M. JONES, RICHARD A. KASHNOW,
L. DENNIS KOZLOWSKI, RICHARD G. SIM AND RAYMOND S. TROUBH
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the line provided below.)
________________________________________________________________________________
2. In their discretion, upon such other business as may properly come before
the Meeting or any adjournment thereof;
all as set out in the Notice and Proxy Statement relating to the Meeting,
receipt of which is hereby acknowledged.
(Continued on reverse side)
(Continued from reverse side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER SPECIFIED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSAL 1.
Dated: ____________________, 19___
____________________________________
____________________________________
Signature(s) of Shareholder(s)
PLEASE SIGN PERSONALLY AS NAME APPEARS
AT LEFT. When signing as attorney,
executor, administrator, personal
representative, trustee or guardian, give
full title as such. If signer is a
corporation, sign full corporate name by
duly authorized officer. If stock is
held in the name of two or more persons,
all should sign.
PLEASE SIGN AND DATE THIS PROXY AND RETURN IN ENCLOSED PREPAID ENVELOPE -
PLEASE DO NOT FOLD
