<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 Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-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] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) 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 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
__________________________________
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: _____________________
<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 at the offices of the
Company, 13000 West Silver Spring Drive, Butler, Wisconsin, on Friday, January
9, 1998, at 3:00 p.m., Central Time, for the following purposes:
1. To elect a Board of six directors;
2. To consider and vote upon a proposal to amend the Company's
Amended and Restated Articles of Incorporation to increase the
number of authorized shares of Class A Common Stock; and
3. 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 14,
1997 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 20, 1997
<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 20, 1997
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, 1997, which constitutes the 1997
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. The Company has retained Georgeson &
Company Inc. to aid in the solicitation of proxies, including the solicitation
of proxies from brokerage firms, banks, nominees, custodians and fiduciaries,
for a fee not anticipated to exceed $7,500 plus expenses. In addition,
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.
<PAGE> 4
If a quorum exists, the affirmative vote of two-thirds of all shares
entitled to vote thereon shall be required for approval of the proposed
amendment to the Company's Amended and Restated Articles of Incorporation.
Because abstentions and broker non-votes are not affirmative votes, they will
have the effect of votes cast against the proposal.
On November 14, 1997, 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 13,863,778
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.
CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of November 14, 1997 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 who has 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 Partners, Inc 850,000(2) 6.1%
209 South LaSalle Street
Chicago, IL 60604-1295
The Prudential Insurance Company 827,900(3) 6.0%
of America
Prudential Plaza
Newark, NJ 07102-3777
</TABLE>
-2-
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
- ---------------- ------------ --------
<S> <C> <C>
Richard G. Sim 833,481(4) 6.0%
13000 West Silver Spring Drive
Butler, WI 53007
William J. Albrecht 67,696(5) *
Robert C. Arzbaecher 29,039(6) *
Gustav H.P. Boel 11,824(7) *
Philip T. Burkart 11,225(8) *
All Executive Officers and Directors
as a Group (14 persons) 1,207,710(9) 8.7%
</TABLE>
*Less than 1%.
(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 an Amendment No. 2 to Schedule 13G dated February 12,
1997, reporting (for itself and its affiliates, Brinson Trust
Company, Brinson Holdings, Inc., SBC Holding (USA), Inc. and Swiss Bank
Corporation) shared voting and dispositive power as to all 850,000
shares.
(3) As set forth on a Schedule 13G dated February 14, 1996 (with respect
to which the Company has received no notice of an amendment),
reporting shared voting and dispositive power with respect to 68,900
shares and sole voting and dispositive power with respect to the
remaining 759,000 shares.
(4) Includes options to purchase 502,721 shares exercisable currently or
within 60 days of the record date, 2,424 shares allocated to Mr.
Sim's ESOP account and 8,130 shares held by a custodian for Mr. Sim's
minor children (with respect to which Mr. Sim disclaims beneficial
ownership).
(5) Includes options to purchase 66,138 shares exercisable currently or
within 60 days of the record date and 1,558 shares allocated to Mr.
Albrecht's ESOP account.
(6) Includes options to purchase 21,650 shares exercisable currently or
within 60 days of the record date, 889 shares allocated to Mr.
Arzbaecher's ESOP account, 1,500 shares owned by Mr. Arzbaecher's
spouse and 1,000 shares held by a custodian for Mr. Arzbaecher's
minor children (with respect to which Mr. Arzbaecher disclaims
beneficial ownership).
-3-
<PAGE> 6
(7) Includes options to purchase 10,250 shares exercisable currently or
within 60 days of the record date and 184 shares allocated to Mr.
Boel's ESOP account.
(8) Includes options to purchase 9,075 shares exercisable currently or
within 60 days of the record date and 1,062 shares allocated to Mr.
Burkart's ESOP account.
(9) Includes options to purchase 689,569 shares exercisable currently or
within 60 days of the record date, 9,890 shares allocated to
executive officers' ESOP accounts, 138,696 shares held by
certain trusts with respect to which certain officers have voting and
dispositive power and 11,530 shares owned by family members of the
directors and executive officers (beneficial ownership of which is, in
certain instances, disclaimed and with respect to 8,130 shares of which
another executive officer acts as custodian).
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.
-4-
<PAGE> 7
ELECTION OF DIRECTORS
At the Meeting, six 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.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
OWNED AT
NOVEMBER 14, 1997
-----------------
DIRECTOR NUMBER PERCENT
NAME AND PRINCIPAL POSITION AGE SINCE OF SHARES OF CLASS
--------------------------- --- ----- --------- --------
<S> <C> <C> <C> <C>
H. Richard Crowther (1)(2)(3) 65 1995 4,000(4) *
Retired Vice Chairman, Illinois
Tool Works Inc. (manufacturer of
engineered components and systems)
Jack L. Heckel (1)(3) 66 1993 6,500(5) *
Retired President and Chief
Operating Officer, GenCorp.
Inc. (manufacturer of
aerospace and defense,
polymer and automotive
products)
Richard A. Kashnow (2)(3) 55 1993 6,000(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)
</TABLE>
-5-
<PAGE> 8
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
OWNED AT
NOVEMBER 14, 1997
-----------------
DIRECTOR NUMBER PERCENT
NAME AND PRINCIPAL POSITION AGE SINCE OF SHARES OF CLASS
--------------------------- --- ----- --------- --------
<S> <C> <C> <C> <C>
L. Dennis Kozlowski (2)(3) 51 1994 4,500(6) *
Chairman of the Board, President
and Chief Executive Officer,
Tyco International Ltd.
(manufacturer of disposable
and specialty products, fire
and safety services, flow control,
and electrical and electronic
components)
John J. McDonough(1)(3) 61 1996 6,900(7) *
President and Chief Executive
Officer of McDonough Capital
Company LLC (venture capital
investment firm)
Richard G. Sim 53 1985 833,481(8) 6.0%
Chairman of the Board, President
and Chief Executive Officer,
Applied Power Inc.
</TABLE>
*Less than 1%.
(1) Member of the Audit Committee of the Board of Directors.
(2) Member of the Nominating Committee of the Board of Directors.
(3) Member of the Compensation Committee of the Board of Directors.
(4) Includes options to purchase 2,500 shares exercisable currently or
within 60 days of the record date.
(5) Includes options to purchase 4,500 shares exercisable currently or
within 60 days of the record date.
(6) Includes options to purchase 3,500 shares exercisable currently or
within 60 days of the record date.
(7) Includes options to purchase 1,500 shares exercisable currently or
within 60 days of the record date and 900 shares held in a trust for
the benefit of Mr. McDonough's daughter who shares Mr. McDonough's
household (with respect to which Mr. McDonough disclaims beneficial
ownership).
(8) Includes options to purchase 502,721 shares exercisable currently or
within 60 days of the record date, 2,424 shares allocated to Mr.
Sim's ESOP account and 8,130 shares held by a custodian for Mr. Sim's
minor children (with respect to which Mr. Sim disclaims beneficial
ownership).
-6-
<PAGE> 9
All of the directors have held the 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 A. Kashnow was President of Schuller International Group, Inc.
from May 1991 through September 1995; (iv) 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; and (v)
John J. McDonough was Chairman of SoftNet Systems, Inc. from July 1995 through
July 1997 and also served as its Chief Executive Officer from September 1996
through July 1997, Vice Chairman of DENTSPLY International Inc. from February
1995 through October 1995, Vice Chairman and Chief Executive Officer of
DENTSPLY International Inc. from June 1993 through February 1995, and Chairman
and Chief Executive Officer of GENDEX Corporation prior to June 1993.
H. Richard Crowther is a director of Illinois Tool Works Inc. Jack L.
Heckel is a director of WD-40 Co., Inc. and Advanced Tissue Sciences, Inc.
Richard A. Kashnow is a director of Raychem Corporation. L. Dennis Kozlowski
is a director of Tyco International Ltd., Raytheon Company and RJR Nabisco
Holdings Corp. John J. McDonough is a director of AMRESCO, Inc., Lunar
Corporation, Newell Corporation and Plexus Corporation. Richard G. Sim is a
director of IPSCO Inc. and Oshkosh Truck Corporation.
BOARD MEETINGS, COMMITTEES AND DIRECTOR COMPENSATION
There were five meetings of the Board of Directors, two meetings of
the Audit Committee, three meetings of the Compensation Committee and one
meeting of the Nominating Committee during the year ended August 31, 1997.
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 except for
Mr. Kashnow, who was unable to attend two Board meetings and two meetings of
committees on which he served, three of which were held on the same day.
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 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 incentive 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 of candidates to be considered by the Nominating Committee,
accompanied by biographical material, may be sent to the Secretary of the
Company at its corporate offices.
-7-
<PAGE> 10
For the 1997 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 grant each year to
purchase 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 were granted
options in fiscal 1997 for 1,500 shares of Common Stock each at an exercise
price of $38.6875 per share. At November 14, 1997, options for 6,000 shares
had been exercised, options for 30,500 shares were outstanding and 23,500
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 is responsible for establishing all of the
policies under which compensation is paid or awarded to the Company's executive
officers, and also 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
provides significant incentive to increase shareholder value. Each year the
Committee reviews its executive compensation policies relative to market
competitiveness, and then determines what changes in the compensation program,
if any, are appropriate 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 the compensation practices of 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
-8-
<PAGE> 11
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 total value of each executive's
pay package is intended to equal the competitive median for like positions in
companies of similar size and type, but the mix of compensation is somewhat
atypical. In particular, 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 incentives, on the other hand, are above
the median for other companies in order to bring the total compensation
opportunity to a level competitive in the marketplace. This compensation mix,
which is consistent with the Committee's approach in prior years, is designed
to encourage the executive's continued focus on building shareholder value.
However, in appropriate circumstances, the Committee may exercise its
discretion to vary compensation from these guidelines.
As an added benefit to the Company's key management personnel, in
fiscal 1997 the Compensation Committee proposed, and the Board of Directors
adopted, the Applied Power Inc. Executive Deferred Compensation Plan (the
"Deferred Plan"). The Deferred Plan allows certain highly compensated
employees (including executive officers) to defer payment of a portion of their
salary and bonus each year, generally until a date specified by the participant
or termination of employment. Amounts deferred pursuant to the Deferred Plan
are deemed to accrue interest at an annual rate equal to (a) the simple average
of the annual rate paid by ten-year U.S. Treasury notes during each September
preceding each plan year with respect to which compensation has been deferred,
plus (b) 1.50%.
Stock Incentive 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.
In 1997, the Board of Directors adopted amendments to the Company's
stock option plans permitting optionees who earn more than $100,000 per year to
elect to defer receipt of option shares upon exercise of an option and payment
of the applicable exercise price. Such amendments were designed to allow such
optionees an opportunity to defer the taxable income attributable to the option
exercise if they so choose. Throughout the deferral period, the option shares
are credited with "deemed dividends" in an amount equal to what the optionee
would have received upon payment of a dividend if the optionee held the
deferred shares at the time of payment. Any such cash dividend payments will
be converted into shares of Common Stock and distributed to the optionee upon
delivery of the optionee's deferred shares.
-9-
<PAGE> 12
Key Measurement Criteria for Bonuses. Bonus payments are made to each
executive officer based upon the degree of achievement of the year's financial
objectives. An executive may receive more, or less, than the target bonus
based on actual business results.
Each executive responsible for a business unit (or multiple business
units) is measured principally by the performance of that unit (or units). For
multi-business unit executives, the measuring index utilized is "Combined
Management Measure" ("CMM"), which is unit operating profit before amortization
less a charge based upon the net assets employed by the unit. In fiscal 1997,
CMM constituted 80% of the bonus measurement for such executives. Twenty
percent of such executive's respective bonuses paid for fiscal 1997 was based
on the Company's return on net assets ("RONA") and earnings per share ("EPS")
for the period, weighted equally. The measuring index for the bonus of an
executive officer responsible for a single business unit is based on operating
profit before amortization for the applicable unit measured against targeted
objectives. The bonus of such an executive officer was based entirely on the
profits of his business unit. For the fiscal year ended August 31, 1997,
bonuses for business unit executives ranged from 24% to 199% of their target
bonuses.
Bonus payments for Company executives not in charge of business units
are determined by the performance of the Company as a whole. For fiscal 1997,
50% of each such executive's bonus was based on the Company's RONA and 50% on
the Company's EPS for the period. For the fiscal year ended August 31, 1997,
bonuses for this group equaled 120% of the executives' targeted bonuses.
Chief Executive Officer Compensation. Competitive data provided by
the Committee's independent consultant established a total compensation value
of $1,337,000 for the chief executive officer position. Following the
compensation philosophy described above for executive officers, the
compensation opportunity for Richard G. Sim, the Company's Chief Executive
Officer, consisted of a salary of $440,000 (approximately 95% of the market
median), a target bonus of $310,000 (70% of the market median) and a stock
option grant valued at approximately $587,000 (36,000 shares valued at 50% of
the exercise price).
Mr. Sim's fiscal 1997 bonus was based on Company performance, 50% of
which was measured by RONA and 50% by EPS. Mr. Sim's fiscal 1997 bonus of
$372,000, which represents 120% of his target bonus, reflects attainment of 80%
of the Company's RONA target and 160% 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
$1,000,000 per year for compensation paid to its chief executive officer or any
of the other executive officers named in the summary compensation table of this
Proxy Statement. Performance-based compensation is not, however, subject to
the deduction limit, provided certain requirements of Section 162(m) are
satisfied. The Company believes that its stock plans comply with the final
Section 162(m) regulations adopted by the Internal Revenue Service. In order
to preserve the deductibility of performance-based compensation, the Company
will generally seek to comply with Section 162(m) of the Internal Revenue Code
to the extent such compliance is practicable and in the best interests of the
Company and its shareholders.
-10-
<PAGE> 13
Richard A. Kashnow (Chairman)
H. Richard Crowther
Jack L. Heckel
L. Dennis Kozlowski
John J. McDonough
SUMMARY COMPENSATION TABLE
The following table sets forth compensation awarded to, earned by or
paid to the Company's Chief Executive Officer and each of the Company's other
four most highly compensated executive officers who were serving as executive
officers at the end of fiscal 1997 for services rendered to the Company and its
subsidiaries during fiscal 1997 ("named executive officers"). Also included in
the table is compensation information for those individuals for fiscal years
1995 and 1996.
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<PAGE> 14
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------ ------------
AWARDS
------
SECURITIES ALL OTHER
UNDERLYING COMPEN-
OPTIONS/ SATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) SARS(#)(1) ($)(2)
--------------------------- ---- --------- -------- ---------- ------
<S> <C> <C> <C> <C> <C>
Richard G. Sim
Chairman, President and
Chief Executive Officer 1997 433,000 372,000 36,000 18,190
Chairman, President and
Chief Executive Officer 1996 398,000 268,200 53,100 17,065
Chairman, President and
Chief Executive Officer 1995 362,000 411,730 49,900 16,015
William J. Albrecht
Senior Vice President,
Engineered Solutions 1997 218,330 219,120 12,800 17,271
Senior Vice President,
Engineered Solutions 1996 210,000 37,880 14,800 16,146
Senior Vice President;
Engineered Solutions 1995 190,000 90,350 17,800 11,538
Robert C. Arzbaecher
Vice President and Chief
Financial Officer 1997 175,834(3) 120,000(3) 9,100 11,311
Vice President and Chief
Financial Officer 1996 155,000 70,000 9,300 10,186
Vice President and
Chief Financial Officer 1995 138,171 120,502 12,000(4) 4,800
Gustav H.P. Boel
Vice President; President
of Enerpac 1997 193,334 24,000 10,000 14,275
Vice President; President
of Enerpac 1996 175,667 39,092 10,500(5) 3,128(6)
Managing Director of Power-
Packer Europe 1995 122,214 12,625 2,000 36,677(6)
</TABLE>
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<PAGE> 15
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------ ------------
AWARDS
------
SECURITIES ALL OTHER
UNDERLYING COMPEN-
OPTIONS/ SATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) SARS(#)(1) ($)(2)
--------------------------- ---- --------- -------- ---------- ------
<S> <C> <C> <C> <C> <C>
Philip T. Burkart
Vice President; President of
Wright Line, Inc. 1997 173,000(8) 122,275(8) 10,000 13,574
Vice President; President of
Wright Line, Inc. (7) 1996 140,000 122,877 5,000 12,449
</TABLE>
(1) Consists entirely of stock options. Historically, the Compensation
Committee awarded options in July or August of each year applicable to
the executive's compensation for the following fiscal year.
Accordingly, option awards listed for 1995 and 1996 in this table
reflect the option grants which were made at the end of 1994 and 1995,
respectively, unless otherwise noted. Beginning with fiscal 1997,
option grants are made following the commencement of the relevant
fiscal year.
(2) The 1997 amounts represent: (a) the Company's 401(k) matching
contributions as follows: Mr. Sim - $2,475, Mr. Albrecht - $2,475, Mr.
Arzbaecher - $2,475, Mr. Boel - $2,475 and Mr. Burkart - $2,475; (b)
Company allocations under the ESOP as follows: Mr. Sim - $4,500, Mr.
Albrecht - $4,500, Mr. Arzbaecher - $4,500, Mr. Boel - $4,500 and Mr.
Burkart - $4,500; and (c) premiums paid by the Company for
split-dollar life insurance as follows: Mr. Sim - $11,215, Mr.
Albrecht - $10,295, Mr. Arzbaecher - $4,336, Mr. Boel - $7,300 and Mr.
Burkart - $6,599.
(3) Includes $15,600 of salary and $30,000 of bonus, payment of which has
been deferred pursuant to the Applied Power Inc. Executive Deferred
Compensation Plan.
(4) Includes stock option for 10,000 shares granted in October 1994 upon
Mr. Arzbaecher's election as Vice President and Chief Financial
Officer.
(5) Includes stock option for 7,500 shares granted in December 1995 upon
Mr. Boel's election as Vice President and President of Enerpac.
(6) Consists entirely of amounts contributed by the Company on Mr. Boel's
behalf to a private defined contribution pension plan.
-13-
<PAGE> 16
(7) Mr. Burkart became an executive officer of the Company during fiscal
1996. As a result, pursuant to applicable Securities and Exchange
Commission rules, compensation information for Mr. Burkart for fiscal
1995 has been omitted.
(8) Includes $32,954 of salary and $61,137 of bonus, payment of which has
been deferred pursuant to the Applied Power Inc. Executive Deferred
Compensation Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning stock option
grants during the last fiscal year to the named executive officers. No stock
appreciation rights ("SARs") were granted in fiscal 1997.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------
PERCENT
OF TOTAL POTENTIAL REALIZABLE
OPTIONS/ VALUE AT ASSUMED
NUMBER OF SARS ANNUAL RATES OF
SECURITIES GRANTED TO STOCK PRICE
UNDERLYING EMPLOYEES EXERCISE APPRECIATION FOR
OPTIONS/ IN OR BASE OPTION TERM(3)
SARS FISCAL PRICE EXPIRATION --------------
NAME GRANTED(#) YEAR(1) ($/SH) DATE(2) 5%($) 10%($)
---- ---------- ------- ------ ------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Richard G. Sim 36,000 15.7% 35.50 10/31/06 803,727 2,036,803
William J. Albrecht 12,800 5.6% 35.50 10/31/06 285,770 724,197
Robert C. Arzbaecher 9,100 4.0% 35.50 10/31/06 203,164 514,859
Gustav H.P. Boel 10,000 4.4% 35.50 10/31/06 223,258 565,779
Philip T. Burkart 10,000 4.4% 35.50 10/31/06 223,258 565,779
</TABLE>
(1) Based on stock option grants for an aggregate of 229,250 shares made
to all employees during the fiscal year ended August 31, 1997.
(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 the 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.
-14-
<PAGE> 17
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 number and value of stock options outstanding
at the end of the fiscal year. No options were exercised by the named
executive officers during fiscal 1997 and no SARs are outstanding.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR-END(#) FISCAL YEAR-END($)(2)
------------------ ------ --------------
EXER- UNEXER- EXER- UNEXER-
NAME CISABLE CISABLE(1) CISABLE CISABLE(1)
- ---- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
Richard G. Sim 502,721 113,500 22,807,564 4,213,106
William J. Albrecht 66,138 37,037 2,950,663 1,366,746
Robert C. Arzbaecher 21,650 22,250 863,138 772,750
Gustav H.P. Boel 6,500 21,000 287,063 656,688
Philip T. Burkart 9,075 17,500 353,780 562,500
</TABLE>
(1) Represents unvested options at the end of fiscal 1997.
(2) Based on the $63.50 closing price of the Common Stock on the New York
Stock Exchange at the end of the fiscal year.
-15-
<PAGE> 18
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, 1992 in the Common Stock and each index and that all dividends were
reinvested.
[ 1992-1997 GRAPH ]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
APPLIED POWER $100.00 109.65 145.53 217.68 197.92 420.07
S&P 500 INDEX 100.00 115.21 121.52 147.58 175.22 246.44
S&P DIV. MFG. INDEX 100.00 125.72 140.71 183.78 227.86 323.28
</TABLE>
-16-
<PAGE> 19
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, 1997 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.
[ 8/6/87-1997 GRAPH ]
<TABLE>
<CAPTION>
8/6/87 1987 1988 1989 1990 1991
------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
APPLIED POWER $100.00 $111.43 $220.27 $278.09 $230.89 $209.72
S&P 500 INDEX 100.00 102.39 83.98 116.93 111.10 140.99
S&P DIV. MFG. INDEX 100.00 102.88 84.40 104.87 95.00 121.08
<CAPTION>
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
APPLIED POWER INC. $204.74 $224.51 $297.95 $445.68 $405.22 $860.07
S&P 500 INDEX 152.16 175.31 184.90 224.55 266.61 374.98
S&P DIV. MFG. INDEX 119.10 149.73 167.58 218.88 271.38 385.02
</TABLE>
-17-
<PAGE> 20
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.
PROPOSAL TO AMEND THE AMENDED AND RESTATED ARTICLES OF INCORPORATION,
AS AMENDED, OF APPLIED POWER INC.
On November 4, 1997, the Board of Directors of the Company determined
that it was necessary and in the best interests of the Company and its
shareholders to amend the Company's Amended and Restated Articles of
Incorporation, as amended (the "Articles"), to increase the authorized number
of shares of Class A Common Stock. Accordingly, the Board of Directors has
proposed an amendment to the Articles increasing the number of authorized
shares of Class A Common Stock from 40,000,000 to 80,000,000 for
submission to the Company's shareholders at the 1998 Annual Meeting. As of the
Record Date, there were 13,863,778 shares of Class A Common Stock outstanding
and 2,776,358 shares were reserved for issuance in connection with various
employee benefit plans. The current authorization is sufficient to meet all
presently known requirements; however, the Board of Directors believes that it
is desirable for the Company to have the flexibility to issue a substantial
number of shares of Class A Common Stock without further shareholder action
(although in certain situations the rules of the New York Stock Exchange would
require shareholder approval if the issuance involved a number of shares equal
to or in excess of 20% of the number of shares then outstanding). While the
Board of Directors continually considers the Company's capital structure and
various financing alternatives, including possible stock splits, stock
dividends and equity offerings in public and private transactions, the Board
has no formalized plans or commitments to issue any additional shares of Class A
Common Stock at this time. The availability of additional shares would enhance
the Company's ability to engage in such future actions as well as expanded
employee benefit programs and corporate mergers and acquisitions. The Board
of Directors will determine whether, when and on what terms the issuance of
shares may be warranted in connection with any of those purposes. Holders of
Class A Common Stock do not have preemptive rights to subscribe for or purchase
any part of any such future issuances. As stated above, the Company has no
current intention of using additional shares of Class A Common Stock as an
anti-takeover defense; however, such an issuance could be used to create
impediments to or otherwise discourage persons attempting to gain control of
the Company (through dilutive offerings or otherwise).
For the reasons set forth above, the Board of Directors has proposed
that the following resolution, which embodies an amendment to the Articles
effecting the increased authorization, be submitted to the Company's
shareholders for approval at the 1998 Annual Meeting:
-18-
<PAGE> 21
RESOLVED, that Section 3.1(a) of Article III of the Company's
Amended and Restated Articles of Incorporation be amended to read as
follows:
"(a) Class A Common Stock. 80,000,000 shares of Class A
Common Stock, having a par value of $.20 per share."
If this amendment is approved by the Company's shareholders, the entire
authorized capital stock of the Company will consist of 80,000,000 shares of
Class A Common Stock, 7,500,000 shares of Class B Common Stock and 800,000
shares of Cumulative Preferred Stock. No Class B Common Stock or Cumulative
Preferred Stock is currently outstanding.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE PROPOSED AMENDMENT
TO THE COMPANY'S AMENDED AND RESTATED ARTICLES OF INCORPORATION AS BEING
NECESSARY AND IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS, AND
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THIS PROPOSAL.
OTHER INFORMATION
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, the
Company's directors, executive officers and persons who beneficially own 10% or
more of the Common Stock are required to report their initial ownership of
Common Stock and subsequent changes in that ownership to the Securities and
Exchange Commission and the New York Stock Exchange. Specific due dates for
those reports have been established and the Company is required to disclose in
this Proxy Statement any failure to file by those due dates during fiscal
1997. Based upon a review of such reports furnished to the Company, or written
representations that no reports were required, the Company believes that all of
those filing requirements were satisfied with respect to fiscal 1997, except
that a form reporting a 200 share purchase by Richard D. Carroll was
inadvertently filed one month late.
INDEPENDENT PUBLIC ACCOUNTANTS
On November 3, 1997, the Audit Committee of the Board of Directors
recommended the replacement of Deloitte & Touche LLP with Coopers & Lybrand LLP
as the Company's independent public accountants for the fiscal year ended
August 31, 1998. On November 4, 1997, the Board of Directors of the Company
accepted and approved the Audit Committee's recommendation. On the same day,
Deloitte & Touche LLP was notified of its dismissal and Coopers & Lybrand LLP
was notified of its engagement. During fiscal 1996 and 1997 and fiscal 1998
through November 4, 1997, there were no disagreements with Deloitte & Touche
LLP on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not
resolved to the satisfaction of Deloitte & Touche LLP, would have caused that
firm to make reference to the subject matter of the disagreement in connection
with its report. Deloitte & Touche LLP's report on the Company's financial
statements for the previous two fiscal years contained no adverse opinion or
disclaimer of opinion and was not qualified or modified as to uncertainty,
audit scope, or accounting principles.
-19-
<PAGE> 22
The Company does not expect that representatives of Coopers & Lybrand
LLP will be present at the Annual Meeting. The Company does expect that
representatives of Deloitte & Touche LLP will be present at the Annual Meeting
and available to respond to appropriate questions and make a statement if
desired.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company no later than
July 23, 1998 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 Annual Meeting other than the election of directors and the
proposal to amend the Company's Amended and Restated Articles of Incorporation,
as amended. If other matters do come before the Annual 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 20, 1997
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 PROXIES 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, 1997 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.
-20-
<PAGE> 23
APPLIED POWER INC.
ANNUAL MEETING OF SHAREHOLDERS-JANUARY 9, 1998
PROXY
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 Friday, January 9,
1998, or any adjoumment thereof, with like effect as if the undersigned were
personally present and voting, upon the matters indicated on the reverse side
of this card.
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 PROPOSALS 1 AND 2.
(continued on reverse side)
<PAGE> 24
APPLIED POWER INC.
ANNUAL MEETING OF SHAREHOLDERS-JANUARY 9, 1998
PROXY
CLASS A COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
- DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED -
(continued from reverse side)
APPLIED POWER INC. 1998 ANNUAL MEETING
<TABLE>
<S><C>
1. ELECTION OF DIRECTORS: 1 - H. Richard Crowther 2 - Jack L. Heckel 3 - Richard A. Kashnow / / FOR all nominees
4 - L. Dennis Kozlowski 5 - John J. McDonough 6 - Richard G. Sim listed to the left (except
as specified below).
/ / WITHHOLD AUTHORITY
to vote for all nominees
listed to the left.
(Instructions: To withhold authority to vote for any indicated nominee, write the number(s)
of the nominee(s) in the box provided to the right.)
----------------------------------
2. To approve the amendment to the Company's Amended and Restated Articles of Incorporation: / / FOR / / AGAINST / / ABSTAIN
3. 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.
Check appropriate box
Indicate changes below: Date NO. OF SHARES
Address Change? / / Name Change? / / ----------------------------
---------------------------------------
---------------------------------------
Signature(s) in Box
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.
</TABLE>
<PAGE> 25
APPLIED POWER INC.
ANNUAL MEETING OF SHAREHOLDERS-JANUARY 9, 1998
PROXY
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 Friday, January 9,
1998, or any adjoumment thereof, with like effect as if the undersigned were
personally present and voting, upon the matters indicated on the reverse side
of this card.
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 PROPOSALS 1 AND 2.
(continued on reverse side)
<PAGE> 26
APPLIED POWER INC.
ANNUAL MEETING OF SHAREHOLDERS-JANUARY 9, 1998
PROXY
CLASS A COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
- DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED -
(continued from reverse side)
APPLIED POWER INC. 1998 ANNUAL MEETING
EMPLOYEE STOCK OWNERSHIP PLAN
<TABLE>
<S><C>
1. ELECTION OF DIRECTORS: 1 - H. Richard Crowther 2 - Jack L. Heckel 3 - Richard A. Kashnow / / FOR all nominees
4 - L. Dennis Kozlowski 5 - John J. McDonough 6 - Richard G. Sim listed to the left (except
as specified below).
/ / WITHHOLD AUTHORITY
to vote for all nominees
listed to the left.
(Instructions: To withhold authority to vote for any indicated nominee, write the number(s)
of the nominee(s) in the box provided to the right.)
----------------------------------
2. To approve the amendment to the Company's Amended and Restated Articles of Incorporation: / / FOR / / AGAINST / / ABSTAIN
3. 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.
Check appropriate box
Indicate changes below: Date NO. OF SHARES
Address Change? / / Name Change? / / ----------------------------
---------------------------------------
---------------------------------------
Signature(s) in Box
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.
</TABLE>
<PAGE> 27
APPLIED POWER INC.
ANNUAL MEETING OF SHAREHOLDERS-JANUARY 9, 1998
PROXY
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 Friday, January 9,
1998, or any adjoumment thereof, with like effect as if the undersigned were
personally present and voting, upon the matters indicated on the reverse side
of this card.
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 PROPOSALS 1 AND 2.
(continued on reverse side)
<PAGE> 28
APPLIED POWER INC.
ANNUAL MEETING OF SHAREHOLDERS-JANUARY 9, 1998
PROXY
CLASS A COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
- DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED -
(continued from reverse side)
APPLIED POWER INC. 1998 ANNUAL MEETING
EMPLOYEE STOCK PURCHASE PLAN
<TABLE>
<S><C>
1. ELECTION OF DIRECTORS: 1 - H. Richard Crowther 2 - Jack L. Heckel 3 - Richard A. Kashnow / / FOR all nominees
4 - L. Dennis Kozlowski 5 - John J. McDonough 6 - Richard G. Sim listed to the left (except
as specified below).
/ / WITHHOLD AUTHORITY
to vote for all nominees
listed to the left.
(Instructions: To withhold authority to vote for any indicated nominee, write the number(s)
of the nominee(s) in the box provided to the right.)
----------------------------------
2. To approve the amendment to the Company's Amended and Restated Articles of Incorporation: / / FOR / / AGAINST / / ABSTAIN
3. 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.
Check appropriate box
Indicate changes below: Date NO. OF SHARES
Address Change? / / Name Change? / / ----------------------------
---------------------------------------
---------------------------------------
Signature(s) in Box
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.
</TABLE>
