SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
COLUMBUS MCKINNON CORPORATION
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(Name of Registrant as specified in its charter)
Payment of filing fee (check the appropriate box):
[X] No fee required
[ ] 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: __/
(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:
COLUMBUS MCKINNON CORPORATION
140 JOHN JAMES AUDUBON PARKWAY
AMHERST, NEW YORK 14228-1197
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 18, 2003
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Columbus
McKinnon Corporation, a New York corporation (the "Company"), will be held at
the Company's corporate offices, 140 John James Audubon Parkway, Amherst, New
York, on August 18, 2003, at 10:00 a.m., local time, for the following purposes:
1. To elect seven Directors to hold office until the 2004 Annual Meeting
and until their successors have been elected and qualified; and
2. To take action upon and transact such other business as may be properly
brought before the meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on June 27, 2003,
as the record date for the determination of shareholders entitled to receive
notice of and to vote at the Annual Meeting.
It is important that your shares be represented and voted at the Annual
Meeting. Whether or not you plan to attend, please sign, date and return the
enclosed proxy card in the enclosed postage-paid envelope or vote by telephone
or using the internet as instructed on the enclosed proxy card. If you attend
the Annual Meeting, you may vote your shares in person if you wish. We sincerely
appreciate your prompt cooperation.
LOIS H. DEMLER
Corporate Secretary
Dated: July 25, 2003
COLUMBUS MCKINNON CORPORATION
140 JOHN JAMES AUDUBON PARKWAY
AMHERST, NEW YORK 14228-1197
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PROXY STATEMENT
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This Proxy Statement and the accompanying form of proxy are being
furnished in connection with the solicitation by the Board of Directors of
Columbus McKinnon Corporation, a New York corporation ("our Company", "we" or
"us"), of proxies to be voted at the Annual Meeting of Shareholders to be held
at our corporate offices, 140 John James Audubon Parkway, Amherst, New York, on
August 18, 2003, at 10:00 a.m., local time, and at any adjournment or
adjournments thereof. The close of business on June 27, 2003 has been fixed as
the record date for the determination of shareholders entitled to receive notice
of and to vote at the meeting. At the close of business on June 27, 2003, we had
outstanding 14,896,172 shares of our common stock, $.01 par value per share, the
holders of which are entitled to one vote per share on each matter properly
brought before the Annual Meeting.
The shares represented by all valid proxies in the enclosed form will be
voted if received in time for the Annual Meeting in accordance with the
specifications, if any, made on the proxy card. If no specification is made, the
proxies will be voted FOR the nominees for Director named in this Proxy
Statement.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of common stock entitled to vote at the Annual Meeting will
constitute a quorum. Each nominee for election as a Director requires a
plurality of the votes cast in order to be elected. A plurality means that the
nominees with the largest number of votes are elected as Directors up to the
maximum number of Directors to be elected at the Annual Meeting. Under the law
of the State of New York, our state of incorporation, only "votes cast" by the
shareholders entitled to vote are determinative of the outcome of the matter
subject to shareholder vote. Votes withheld will be counted in determining the
existence of a quorum, but will not be counted towards such nominee's or any
other nominee's achievement of plurality.
The execution of a proxy will not affect a shareholder's right to attend
the Annual Meeting and to vote in person. A shareholder who executes a proxy may
revoke it at any time before it is exercised by giving written notice to the
Secretary, by appearing at the Annual Meeting and so stating, or by submitting
another duly executed proxy bearing a later date.
This Proxy Statement and form of proxy is first being sent or given to
shareholders on July 25, 2003.
PROPOSAL 1
ELECTION OF DIRECTORS
Our Certificate of Incorporation provides that our Board of Directors
shall consist of not less than three nor more than nine Directors to be elected
at each annual meeting of shareholders and to serve for a term of one year or
until their successors are duly elected and qualified. Currently, the Board of
Directors is comprised of eight members. Mr. L. David Black, who has been a
Director since 1995, has announced that he plans to retire as a Director
effective as of the date of the Annual Meeting. Accordingly, Mr. Black has not
been nominated for re-election as a Director and, effective as of the Annual
Meeting, the Board of Directors will be reduced to seven members.
Unless instructions to the contrary are received, it is intended that the
shares represented by proxies will be voted for the election as Directors of
Timothy T. Tevens, Robert L. Montgomery, Jr., Herbert P. Ladds, Jr., Carlos
Pascual, Richard H. Fleming, Ernest R. Verebelyi and Wallace W. Creek, each of
whom is presently a Director. Each of these nominees has been previously elected
by our shareholders, except for Mr. Verebelyi and Mr. Creek who were appointed
Directors by our Board of Directors in January 2003. If any of these nominees
should become unavailable for election for any reason, it is intended that the
shares represented by the proxies solicited herewith will be voted for such
other person as the Board of Directors shall designate. The Board of Directors
has no reason to believe that any of these nominees will be unable or unwilling
to serve if elected to office.
The following information is provided concerning the nominees for
Director:
TIMOTHY T. TEVENS was elected President and a Director of our Company in
January 1998 and assumed the duties of Chief Executive Officer in July 1998.
From May 1991 to January 1998 he served as our Vice President - Information
Services and was also elected Chief Operating Officer in October 1996. From 1980
to 1991, Mr. Tevens was employed by Ernst & Young LLP in various management
consulting capacities.
ROBERT L. MONTGOMERY, JR. joined us in 1974 and has served as our
Executive Vice President and Chief Financial Officer since 1987 and as a
Director of our Company since 1982. Prior to joining us, Mr. Montgomery was
employed as a certified public accountant by PricewaterhouseCoopers LLP.
HERBERT P. LADDS, JR. has been a Director of our Company since 1973 and
was elected our Chairman of the Board of Directors in January 1998. Mr. Ladds
served as our Chief Executive Officer from 1986 until his retirement in July
1998. Mr. Ladds was our President from 1982 until January 1998, our Executive
Vice President from 1981 to 1982 and Vice President - Sales & Marketing from
1971 to 1980. Mr. Ladds is also a director of Utica Mutual Insurance Company and
R.P. Adams Company, Inc.
CARLOS PASCUAL has been a Director of our Company since 1998. Since
January 2000, Mr. Pascual has been Executive Vice President and President of
Developing Markets Operations for Xerox. From January 1999 to January 2000, Mr.
Pascual served as Deputy Executive Officer of Xerox's Industry Solutions
Operations. From August 1995 to January 1999, Mr. Pascual served as President of
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Xerox Corporation's United States Customer Operations. Prior thereto, he has
served in various capacities with Xerox Corporation. Mr. Pascual also serves as
Chairman of the Board of Directors of Xerox de Espana S.A. (Spain).
RICHARD H. FLEMING was appointed a Director of our Company in March 1999.
In February 1999, Mr. Fleming was appointed Executive Vice President and Chief
Financial Officer of USG Corporation. Prior thereto, Mr. Fleming served USG
Corporation in various executive financial capacities, including Senior Vice
President and Chief Financial Officer from January 1995 to February 1999 and
Vice President and Chief Financial Officer from January 1994 to January 1995.
Mr. Fleming also serves as a member of the Board of Directors for several
non-for-profit entities including FamilyCare Services of Illinois, the Child
Welfare League of America, and Chicago United. He is also a member of the
Advisory Board of FM Global, a mutual insurance company.
ERNEST R. VEREBELYI was appointed a Director of the Company in January
2003. Mr. Verebelyi retired from Terex Corporation, a global diversified
equipment manufacturer, in October 2002 from his position as Group President,
Terex Americas. Prior to joining Terex in 1998, he held executive general
management and operating positions at General Signal Corporation, Emerson,
Hussmann Corporation, and General Electric. He is also a director of The Nash
Engineering Company and Chairman of its Compensation Committee.
WALLACE W. CREEK was appointed a Director of the Company in January 2003.
He was appointed Senior Vice President of Finance of Collins & Aikman, a leading
manufacturer of automotive interior components, in December 2002. Prior to that,
Mr. Creek was the Controller of General Motors Corporation for nearly ten years
and held several executive positions in finance at GM. Mr. Creek is an Ex
Officio member of the Board of Directors of Quantum Fuel Systems Technologies
Worldwide, Inc.
THE BOARD OF DIRECTORS RECOMMENDS UNANIMOUSLY A VOTE "FOR" EACH OF THE DIRECTOR
NOMINEES.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the year ended March 31, 2003, our Board of Directors held 15
meetings. Each Director attended at least 75% of the aggregate number of
meetings of our Board of Directors and meetings held by all committees of our
Board of Directors on which he served.
AUDIT COMMITTEE
Our Board of Directors has a standing Audit Committee comprised of Mr.
Fleming, as Chairman, and Messrs. Black, Pascual and Creek. Each member of our
Audit Committee is independent as defined in the listing standards of the
National Association of Security Dealers. The duties of our Audit Committee
consist of (i) appointing or replacing our independent auditors, (ii)
pre-approving all auditing and permitted non-audit services provided to us by
our independent auditors, (iii) reviewing with our independent auditors and our
management the scope and results of our annual audited financial statements, our
quarterly financial statements and significant financial reporting issues and
judgments made in connection with the preparation of our financial statements,
(iv) reviewing our management's assessment of the effectiveness of our internal
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controls, as well as our independent auditors' report on this assessment, (v)
reviewing insider and affiliated party transactions and (vi) establishing
procedures for the receipt, retention and treatment of complaints received by us
regarding accounting or internal controls. Our Audit Committee held five
meetings in fiscal 2003. A copy of the charter of our Audit Committee is annexed
to this proxy statement as APPENDIX A.
COMPENSATION AND NOMINATION/SUCCESSION COMMITTEE
Our Compensation and Nomination/Succession Committee consists of Mr.
Pascual, as Chairman, and Messrs. Black and Fleming, all of whom are
non-employee independent directors. This committee (i) reviews the performance
of our chief executive officer and other executive officers and makes
recommendations concerning their compensation, (ii) administers and makes
recommendations for grants and awards to our employees under our incentive
compensation programs, (iii) considers and recommends candidates for membership
on our Board of Directors and (iv) reviews and makes recommendations with
respect to our succession plan for all key management positions. Our
Compensation and Nomination/Succession Committee does not solicit direct
nominations from our shareholders, but will give due consideration to written
recommendations for nominees from our shareholders for election as directors
that are submitted in accordance with our by-laws. See the information contained
herein under the heading "Shareholders' Proposals." Our Compensation and
Nomination/Succession Committee held four meetings in fiscal 2003.
In March 2003, our Board of Directors resolved to separate our
Compensation and Nomination/Succession Committee into two committees -- the
Compensation and Succession Committee and the Corporate Governance and
Nomination Committee. The Compensation and Succession Committee is comprised of
Mr. Pascual, as Chairman, and Messrs. Black, Fleming and Verebelyi, each of whom
is a non-employee independent director. The principal functions of this
Committee are to (i) review and make recommendations to our Board of Directors
with respect to our compensation strategy, (ii) evaluate the performance of our
executive officers in light of our compensation goals and objectives, (iii)
evaluate the performance of our chief executive officer and chief financial
officer and review and establish their compensation, (iv) administer and make
recommendations for grants and awards to our employees under our incentive
compensation programs and (v) review and make recommendations with respect to
our succession plans for all key management positions and provide assurance to
our Board of Directors that our process in preparing our succession plans is
appropriate. A copy of the charter of our Compensation and Succession Committee
is annexed to this proxy statement as APPENDIX B.
Our Corporate Governance and Nomination Committee is responsible for (i)
evaluating the composition, organization and governance of our Board of
Directors and its committees, (ii) monitoring compliance with our system of
corporate governance and (iii) developing criteria, investigating and making
recommendations with respect to candidates for membership on our Board of
Directors. This Committee is chaired by Mr. Black and also includes Messrs.
Fleming, Pascual, Creek and Verebelyi. Each of these members is a non-employee
independent director. A copy of the charter of our Corporate Governance and
Nomination Committee is annexed to this proxy statement as APPENDIX C.
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OTHER COMMITTEES
Our Board of Directors does not have a standing executive committee, the
functions of which are handled by our entire Board.
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OUR DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding our Directors
and executive officers:
NAME AGE POSITION
---- --- --------
Herbert P. Ladds, Jr. 70 Chairman of the Board
Timothy T. Tevens 47 President, Chief Executive
Officer and Director
Robert L. Montgomery, Jr. 65 Executive Vice President, Chief
Financial Officer and Director
L. David Black (1)(2)(3)(4)(5) 66 Director
Carlos Pascual (1)(2)(3)(4) 57 Director
Richard H. Fleming (1)(2)(3)(4) 56 Director
Ernest R. Verebelyi (3)(4) 55 Director
Wallace W. Creek (2)(4) 64 Director
Ned T. Librock 50 Vice President - Sales
Karen L. Howard 41 Vice President - Controller
Joseph J. Owen 42 Vice President - Strategic
Integration
Robert H. Myers, Jr. 60 Vice President - Human
Resources
Lois H. Demler 65 Corporate Secretary
John R. Hansen (6) 64 Treasurer
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(1) Member of our Compensation and Nomination/Succession Committee.
(2) Member of our Audit Committee.
(3) Member of our Compensation and Succession Committee.
(4) Member of our Corporate Governance and Nomination Committee.
(5) Mr. Black has announced that he is plans to retire as a Director effective
as of the date of the Annual Meeting and is not seeking re-election as a
Director at the Annual Meeting.
(6) Mr. Hansen resigned as Treasurer effective April 14, 2003.
All of our officers are elected annually at the first meeting of our Board
of Directors following the Annual Meeting of Shareholders and serve at the
discretion of our Board of Directors. There are no family relationships between
any of our officers or Directors. Recent business experience of our Directors is
set forth above under "Election of Directors." Recent business experience of our
executive officers who are not also Directors is as follows:
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NED T. LIBROCK was elected a Vice President in November 1995. Mr.
Librock has been employed by us since 1990 in various sales management
capacities. Prior to his employment with us, Mr. Librock was employed by
Dynabrade Inc., a manufacturer of power tools, as director of Sales and
Marketing.
KAREN L. HOWARD was elected our Vice President - Controller in January
1997. From June 1995 to January 1997, Ms. Howard was employed by us in various
financial and accounting capacities. Previously, Ms. Howard was employed by
Ernst & Young LLP as a certified public accountant.
JOSEPH J. OWEN was appointed Vice President - Strategic Integration in
August 1999. From April 1997 to August 1999, Mr. Owen was employed by us as
Corporate Director - Materials Management. Prior to joining us, Mr. Owen was
employed by Ernst & Young LLP in various management consulting capacities.
ROBERT H. MYERS, JR. has been employed by us since 1959. In October of
2001, Mr. Myers was appointed Vice President - Human Resources. Prior to October
2001, Mr. Myers served for eight years as Corporate Manager of Environmental
Systems. Prior to that, Mr. Myers served as Human Resources Director of our CM
Hoist Division.
LOIS H. DEMLER has been employed by us since 1963. Ms. Demler has been
our Corporate Secretary since 1987.
JOHN R. HANSEN resigned as our Treasurer effective April 14, 2003 in
anticipation of his planned retirement in June 2003. He had been employed by us
since 1976. In May of 2001, Mr. Hansen was appointed Treasurer. Prior to May of
2001, Mr. Hansen served in various capacities, including Manager - Pension and
Benefit Plans and Director - Employee Benefits.
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COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the cash compensation as well as certain
other compensation paid during the fiscal years ended March 31, 2001, 2002 and
2003 for our Chief Executive Officer and our other four most highly compensated
executive officers. The amounts shown include compensation for services in all
compensation capacities.
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
------------------------------------- -----------------------------------------
SECURITIES
RESTRICTED UNDERLYING
FISCAL OTHER ANNUAL STOCK OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS(1) SARS(2) COMPENSATION(3)
--------------------------- ------ -------- ------- ------------ --------- -------- ---------------
Timothy T. Tevens, 2003 $492,827 $66,620 $ - - - $5,958
President and Chief 2002 462,548 - - - 60,000 9,129
Executive Officer 2001 450,000 67,500 - - - 8,412
Robert L. Montgomery, Jr., 2003 410,462 39,555 - - - 5,958
Executive Vice President 2002 385,457 - - - - 10,953
and Chief Financial Officer 2001 375,000 56,250 - - - 11,117
Ned T. Librock, 2003 230,577 31,015 23,874(4) - - 5,958
Vice President - Sales 2002 215,385 - 69,373(4) - 45,000 10,796
2001 210,000 31,500 24,867(5) - - 12,220
Karen L. Howard, 2003 196,135 18,796 - - - 5,958
Vice President - 2002 182,635 - - - 45,000 10,060
Controller 2001 167,000 25,050 68,056(6) - - 10,975
Joseph J. Owen, 2003 193,894 26,062 37,640(7) - - 5,958
Vice President - 2002 180,673 - - - 45,000 9,010
Strategic Integration 2001 165,000 21,450 - - - 8,435
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(1) Mr. Tevens was granted 2,488 shares of restricted common stock on June
10, 1999, which had a value on such date of $61,900, and a value on
March 31, 2003 of $4,006. Mr. Montgomery was granted 2,417 shares of
restricted common stock on June 10, 1999, which had a value on such
date of $60,100, and a value as of March 31, 2003 of $3,891. Mr.
Librock was granted 1,386 shares of restricted common stock on June 10,
1999, which had a value on such date of $34,500 and a value as of March
31, 2003 of $2,231. Ms. Howard was granted 1,031 shares of restricted
common stock on June 10, 1999, which had a value on such date of
$25,650; and 8,500 shares of restricted common stock on August 17,
1998, which had a value on such date of $196,563. As of March 31, 2003,
the number of restricted shares of common stock held by Ms. Howard was
9,531 and the value of such restricted shares was $15,345. Mr. Owen was
granted 1,016 shares of restricted common stock on June 10, 1999, which
had a value on such date of $25,300 and 5,000 shares of restricted
common stock on April 14, 1997, which had a value on such date of
$95,000. The restrictions on 5,000 of Mr. Owen's restricted shares of
common stock lapsed on April 12, 2002, on which date such shares had a
value of $67,500. As of March 31, 2003, the number of restricted shares
of common stock held by Mr. Owen was 1,016, and the value of such
restricted shares was $1,636. We do not pay dividends on our
outstanding shares of restricted common stock. In the event we declare
any dividends on our common stock in the future, we would provide
additional compensation to holders of our restricted common stock in
lieu of such dividends.
(2) Consists of (i) options granted in fiscal 2002 to Messrs. Tevens, and
Librock, Ms. Howard and Mr. Owen pursuant to our Incentive Stock Option
Plan in the amounts of 38,620, 40,500, 40,500 and 40,500 shares,
respectively and (ii) options granted in fiscal 2002 to Messrs. Tevens
and Librock, Ms. Howard and Mr. Owen pursuant to our Non-Qualified
Stock Option Plan in the amounts of 21,380, 4,500, 4,500 and 4,500
shares, respectively.
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(3) Consists of: (i) the value of shares of common stock allocated in
fiscal 2003 under our Employee Stock Ownership Plan, or ESOP, to
accounts for Messrs. Tevens, Montgomery, Librock, Ms. Howard and Mr.
Owen in the amount of $347 each, (ii) premiums for group term life
insurance policies insuring the lives of Messrs. Tevens, Montgomery and
Librock, Ms. Howard and Mr. Owen in the amount of $111 each and (iii)
our matching contributions under our 401(k) plan for Messrs. Tevens,
Montgomery and Librock, Ms. Howard and Mr. Owen in the amount of $5,500
each.
(4) Represents tax reimbursement payments we made to Mr. Librock in fiscal
2003 and 2002 to offset the income tax effects of the expiration of the
restrictions on 11,900 shares of restricted common stock granted to him
in fiscal 1997 and released in fiscal 2002.
(5) Represents tax reimbursement payments we made to Mr. Librock in fiscal
2001 to offset the income tax effects of the expiration of the
restrictions on 5,100 shares of restricted common stock granted to him
in fiscal 1995 and released in fiscal 2000.
(6) Represents tax reimbursement payments we made to Ms. Howard in fiscal
2001 to offset the income tax effects of the expiration of the
restrictions on 8,500 shares of restricted common stock granted to her
in fiscal 1996 and released in fiscal 2000.
(7) Represents tax reimbursement payments we made to Mr. Owen in fiscal
2003 to offset the income tax effects of the expiration of the
restrictions on 5,000 shares of restricted common stock granted to him
in fiscal 1998 and released in fiscal 2003. See footnote (1) above.
EMPLOYEE PLANS
EMPLOYEE STOCK OWNERSHIP PLAN. We maintain our ESOP for the benefit of
substantially all of our domestic non-union employees. The ESOP is intended to
be an employee stock ownership plan within the meaning of Section 4975(e)(7) of
the Internal Revenue Code of 1986, as amended and an eligible individual account
plan within the meaning of Section 407(d)(3) of the Internal Revenue Code. From
1988 through 1998, the ESOP has purchased from us 1,373,549 shares of common
stock for the aggregate sum of approximately $10.5 million. The proceeds of
certain institutional loans were used to fund such purchases. The ESOP's loans
are secured by our common stock which is held by the ESOP and such loans are
guaranteed by us. The ESOP acquired 479,900 shares of our common stock in
October 1998 for the aggregate sum of approximately $7.7 million. The proceeds
of a loan we made to the ESOP were used to fund the purchase.
On a quarterly basis, we make a contribution to the ESOP in an amount
determined by our Board of Directors. In fiscal 2003, our cash contribution was
approximately $1.2 million. The ESOP's trustees use the entire contribution to
make payments of principal and interest on the ESOP's loans.
Common stock not allocated to ESOP participants is recorded in an ESOP
suspense account and is held as collateral for repayment of the ESOP's loans. As
payments of principal and interest are received by the lenders, these shares are
released from the ESOP suspense account annually and are then allocated to the
ESOP participants in the same proportion as a participant's compensation for
such year bears to the total compensation of all participants.
An ESOP participant becomes fully vested in all amounts allocated to him or
her after five years of service. The shares of our common stock held by the
participants in the ESOP are voted by the participants in the same manner as any
other share of our common stock.
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In general, common stock allocated to a participant's account is
distributed upon his or her termination of employment, normal retirement at age
65 or death. The distribution is made in whole shares of common stock with a
cash payment in lieu of any fractional shares.
Messrs. Montgomery, Myers, Harvey and Ms. Howard serve as trustees of the
ESOP. As of March 31, 2003, the ESOP owned 1,298,172 shares of our common stock.
Common stock allocated pursuant to the ESOP to Messrs. Tevens, Montgomery and
Librock, Ms. Howard and Mr. Owen as of March 31, 2003 is 4,637 shares, 14,877
shares, 4,721 shares, 1,668 shares and 1,016 shares, respectively.
PENSION PLAN. We have a non-contributory, defined benefit Pension Plan
which provides certain of our employees with retirement benefits. As defined in
the Pension Plan, a participant's annual pension benefit at age 65 is equal to
the product of (i) 1% of the participant's final average earnings, as calculated
by the terms of the Pension Plan, plus 0.5% of that part, if any, of final
average earnings in excess of such participant's "social security covered
compensation," as such term is defined in the Pension Plan, multiplied by (ii)
such participant's years of credited service, limited to 35 years. Plan benefits
are not subject to reduction for social security benefits.
The following table illustrates the estimated annual benefits upon
retirement under our Pension Plan if the plan remains in effect and assuming
that an eligible employee retires at age 65. However, because of changes in tax
laws or future adjustments to the provisions of our Pension Plan, actual pension
benefits could differ significantly from the amounts set forth in the table.
YEARS OF SERVICE
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FINAL
AVERAGE
EARNINGS 15 20 25 30 35
-------- -- -- -- -- --
125,000 22,286 29,714 37,143 44,572 52,000
150,000 27,911 37,214 46,518 55,822 65,125
175,000 33,536 44,714 55,893 67,072 78,250
200,000 39,161 52,214 65,268 78,322 91,375
250,000 39,161 52,214 65,268 78,322 91,375
300,000 39,161 52,214 65,268 78,322 91,375
350,000 39,161 52,214 65,268 78,322 91,375
400,000 39,161 52,214 65,268 78,322 91,375
450,000 39,161 52,214 65,268 78,322 91,375
500,000 39,161 52,214 65,268 78,322 91,375
A portion of the annual benefit for plan participants is determined by
their final average earnings in excess of "social security covered
compensation," as such term is defined in our Pension Plan. Since this amount
can vary depending on the eligible employee's year of birth, all pension amounts
shown above have been calculated using Mr. Tevens' year of birth and his social
security covered compensation of $77,856. Our Pension Plan excludes final
average earnings in excess of $200,000.
If Messrs. Tevens, Montgomery and Librock, Ms. Howard and Mr. Owen remain
our employees until they reach age 65, the years of credited service under the
Pension Plan for each of them would be 29, 16, 27, 31 and 28, respectively.
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NON-QUALIFIED STOCK OPTION PLAN. In October 1995, we adopted our
Non-Qualified Stock Option Plan and reserved, subject to certain adjustments, an
aggregate of 250,000 shares of our common stock for issuance thereunder. Under
the terms of our Non-Qualified Plan, options may be granted by our Compensation
and Succession Committee to our officers and other key employees as well as to
non-employee directors and advisors. In fiscal 2003, we did not grant any
options to purchase shares of our common stock under our Non-Qualified Plan.
INCENTIVE STOCK OPTION PLAN. Our Incentive Stock Option Plan which was
adopted in October 1995 and amended in 2002, authorizes our Compensation and
Succession Committee to grant to our officers and other key employees of stock
options that are intended to qualify as "incentive stock options" within the
meaning of Section 422 of the Internal Revenue Code. Our Incentive Plan
reserved, subject to certain adjustments, an aggregate of 1,750,000 shares of
common stock to be issued thereunder. Options granted under the Incentive Plan
become exercisable over a four-year period at the rate of 25% per year
commencing one year from the date of grant at an exercise price of not less than
100% of the fair market value of our common stock on the date of grant. Any
option granted thereunder may be exercised not earlier than one year and not
later than ten years from the date the option is granted. In the event of
certain extraordinary transactions, including a change in control, the vesting
of such options would automatically accelerate. In fiscal 2003, we did not grant
any options to purchase shares of our common stock under the Incentive Plan.
RESTRICTED STOCK PLAN. Our Restricted Stock Plan which was adopted in
October 1995 and amended in 2002, reserves, subject to certain adjustments, an
aggregate of 150,000 shares of our common stock to be issued upon the grant of
restricted stock awards thereunder. Under the terms of the Restricted Stock
Plan, our Compensation and Succession Committee may grant to our employees
restricted stock awards to purchase shares of common stock at a purchase price
of not less than $.01 per share. Shares of common stock issued under the
Restricted Stock Plan are subject to certain transfer restrictions and, subject
to certain exceptions, must be forfeited if the grantee's employment with us is
terminated at any time prior to the date the transfer restrictions have lapsed.
Grantees who remain continuously employed with us become vested in their shares
five years after the date of the grant, or earlier upon death, disability,
retirement or other special circumstances. The restrictions on any such stock
awards automatically lapse in the event of certain extraordinary transactions,
including a change in our control. In fiscal 2003, we awarded 1,000 shares of
common stock under the Restricted Stock Plan.
CORPORATE INCENTIVE PLAN. In July 2001, we adopted our Incentive Plan and
our Incentive Plan Addendum to replace our previous plan. Most of our employees
are eligible to participate in the Incentive Plan. Under the Incentive Plan, for
each fiscal year, each participant is assigned a participation percentage by our
management. The actual bonus to be paid to a participant will be equal to his
participation percentage times his base compensation, multiplied by a factor,
which is the annual budgeted target percentage determined by the Board of
Directors plus or minus two times the percentage difference between our actual
pretax income and budgeted pretax income for the applicable quarter or year. The
bonus is computed and paid quarterly at 75% of the calculated amount for each of
the first three quarters. In fiscal 2003, bonuses paid under the Incentive Plan
to Messrs. Tevens, Montgomery and Librock, Ms. Howard and Mr. Owen were $47,471,
$39,555, $22,098, $18,796 and $18,582, respectively.
Under the terms of our Incentive Plan Addendum, certain of the our
executive officers and operating group leaders were eligible to receive an
additional bonus equal to one percent per $1 million of the excess of our actual
- 11 -
debt repayment in fiscal 2002 compared to a targeted debt repayment set by our
Board of Directors.
In fiscal 2003, bonuses paid under the Incentive Plan Addendum to Messrs.
Tevens, Librock and Owen were $19,149, $8,917 and $7,480, respectively. Mr.
Montgomery and Ms. Howard were entitled to receive bonuses under the Incentive
Plan Addendum in fiscal 2003 of $15,958 and $7,561, respectively, but declined
to accept such bonuses.
401(K) PLAN. We maintain a 401(k) retirement savings plan which covers all
of our non-union employees in the U.S., including our executive officers, who
have completed at least 90 days of service. Eligible participants may contribute
up to 30% of their annual compensation (9% for highly compensated employees),
subject to an annual limitation as adjusted by the provisions of the Internal
Revenue Code. Employee contributions are matched by us in an amount equal to 50%
of the employee's salary reduction contributions, as such term is defined in the
401(k) Plan. Our matching contributions are limited to 3% of the employee's base
pay and vest at the rate of 20% per year.
CHANGE IN CONTROL AGREEMENTS
We have entered into change in control agreements with Messrs. Tevens and
Librock, Ms. Howard, Mr. Owen and certain other of our officers and employees.
The change in control agreements provide for an initial term of one year, which,
absent delivery of notice of termination, is automatically renewed annually for
an additional one year term. Generally, each of the named officers is entitled
to receive, upon termination of employment within 36 months of a change in
control of our Company (unless such termination is because of death, disability,
for cause or by an officer or employee other than for "good reason," as defined
in the change in control agreements), (i) a lump sum severance payment equal to
three times the sum of (A) his or her annual salary and (B) the greater of (1)
the annual target bonus under the Incentive Plan in effect on the date of
termination and (2) the annual target bonus under the Incentive Plan in effect
immediately prior to the change in control of our Company, (ii) continued
coverage for 36 months under our medical and life insurance plans, (iii) at the
option of the executive or employee, either three additional years of deemed
participation in our tax-qualified retirement plans or a lump sum payment equal
to the actuarial equivalent of the pension payment which he or she would have
accrued under our tax-qualified retirement plans had he or she continued to be
employed by us for three additional years and (iv) certain other specified
payments. Aggregate "payments in the nature of compensation" (within the meaning
of Section 280G of the Internal Revenue Code) payable to any executive or
employee under the change in control agreements is limited to the amount that is
fully deductible by us under Section 280G of the Internal Revenue Code less one
dollar. The events that trigger a change in control under the change in control
agreements include (i) the acquisition of 20% or more of our outstanding common
stock by certain persons, (ii) certain changes in the membership of the our
Board of Directors, (iii) certain mergers or consolidations, (iv) certain sales
or transfers of substantially all of our assets and (v) the approval by our
shareholders of a plan of dissolution or liquidation.
CONSULTING AGREEMENT
In October 2001, we entered into a consulting agreement with Herbert P.
Ladds, Jr., our Chairman of the Board. Under the terms of this consulting
agreement, Mr. Ladds was available to us up to approximately 40 hours per month
to advise us on such matters as may have been requested by our Board of
- 12 -
Directors or Chief Executive Officer. As compensation for his services, Mr.
Ladds was paid a monthly fee of $23,750. In the event Mr. Ladds provided more
than 40 hours of services in any month, he would receive an additional payment
for such month in an amount of $200 per hour for each such hour in excess of 40.
We also reimbursed Mr. Ladds for all reasonable out-of-pocket expenses incurred
by him in rendering services pursuant to the consulting agreement. The
consulting agreement was terminated in January 2003.
OPTIONS GRANTED IN LAST FISCAL YEAR
No stock options were granted to our executives in fiscal 2003.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information with respect to our executives
named above concerning the exercise of options during fiscal 2003 and
unexercised options held at the end of fiscal 2003.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END (1)
SHARES --------------------------- ---------------------------
NAME AND ACQUIRED VALUE
PRINCIPAL POSITION ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------ ----------- -------- ----------- ------------- ----------- -------------
Timothy T. Tevens,
President and Chief
Executive Officer $ - $ - 119,000 45,000 $ - $ -
Robert L. Montgomery, Jr.,
Executive Vice President
and Chief Financial - - - - - -
Officer
Ned T. Librock, - - 97,250 33,750 - -
Vice President - Sales
Karen L. Howard,
Vice President - - - 97,250 33,750 - -
Controller
Joseph J. Owen,
Vice President -
Strategic Integration - - 30,250 33,750 - -
-----------------------
(1) Represents the difference between $1.61, the closing market value of our
common stock as of March 31, 2003 and the exercise prices of such options
which are exercisable at an exercise price less than $1.61, of which there
were none.
- 13 -
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information about our common stock that may be
issued upon the exercise of options, warrants and rights under all of our
existing equity compensation plans as of March 31, 2003, including the
Non-Qualified Plan and the Incentive Plan.
NUMBER OF SECURITIES
REMAINING FOR FUTURE
NUMBER OF SECURITIES TO BE WEIGHTED AVERAGE ISSUANCE UNDER EQUITY
ISSUED UPON EXERCISE OF EXERCISE PRICE OF COMPENSATION PLANS
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, (EXCLUDING SECURITIES
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS REFLECTED IN COLUMN (A))
------------- ------------------- ------------------- ------------------------
Equity compensation plans 1,311,750 $14.05 670,750
approved by security holders
Equity compensation plans not - - -
approved by security holders
Total...................... 1,311,750 $14.05 670,750
- 14 -
COMPENSATION AND SUCCESSION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation for our executive officers is administered by the Compensation
and Succession Committee, which currently consists of four independent
(non-employee) Directors. Our Board of Directors has delegated to the
Compensation and Succession Committee responsibility for establishing,
administrating and approving the compensation arrangements of the Chief
Executive Officer and other executive officers.
The following objectives, established by our Compensation and Succession
Committee, are the basis for the Company's executive compensation program:
o providing a comprehensive program with components including base salary,
performance incentives, and benefits that support and align with our goal of
providing superior value to customers and shareholders;
o ensuring that we are competitive and can attract and retain qualified and
experienced executive officers and other key personnel; and
o appropriately motivating our executive officers and other key personnel
to seek to attain short, intermediate and long-term corporate and divisional
performance goals and to manage our Company to achieve sustained long term
growth.
The Compensation and Succession Committee reviews compensation policy and
specific levels of compensation paid to our Chief Executive Officer and other
executive officers and makes recommendations to our Board of Directors regarding
executive compensation, policies and programs.
The Compensation and Succession Committee is assisted in these efforts,
when required, by an independent outside consultant and by our internal staff,
who provide the Compensation and Succession Committee with relevant information
and recommendations regarding compensation policies and specific compensation
matters.
ANNUAL COMPENSATION PROGRAMS
Our executives' base salaries are compared to manufacturing companies
included in a periodic management survey completed by outside compensation
consultants and all data have been regressed to revenues equivalent to our
revenues. This survey is used because it reflects companies with similar revenue
and in the same industry sectors as us. The Compensation and Succession
Committee believes salaries should be targeted toward the median of the surveyed
salaries reported, depending upon the relative experience and individual
performance of the executive.
Salary adjustments are determined by four factors: (i) an assessment of the
individual executive officer's performance and merit, (ii) our goal of achieving
market parity with salaries of comparable executives in the competitive market,
(iii) the occurrence of any promotion or other increases in responsibility of
the executive and (iv) the general economic environment in which we are
operating. In assessing market parity, we target groups of companies surveyed
and referred to above.
- 15 -
Each executive officer's corporate position is assigned a title
classification reflecting evaluation of the position's overall contribution to
our corporate goals and the value the labor market places on the associated job
skills. A range of appropriate salaries is then assigned to that title
classification. Each April, the salary ranges may be adjusted to reflect market
conditions, including changes in comparison companies, inflation, and supply and
demand in the market. The midpoint of the salary range corresponds to a "market
rate" salary which the Compensation and Succession Committee believes is
appropriate for an experienced executive who is performing satisfactorily, with
salaries in excess of the salary range midpoint appropriate for executives whose
performance is superior or outstanding.
The Compensation and Succession Committee has recommended that any
progression or regression within the salary range for an executive officer will
depend upon a formal annual review of job performance, accomplishments and
progress toward individual and/or overall goals and objectives for each of our
segments that such executive officer oversees as well as his contributions to
our overall direction. The long-term growth in shareholder value is an important
factor. The results of executive officers' performance evaluations will form a
part of the basis of the Compensation and Succession Committee's decision to
approve, at its discretion, future adjustments in base salaries of our executive
officers.
CHIEF EXECUTIVE OFFICER COMPENSATION
Compensation decisions affecting our Chief Executive Officer were based on
quantitative and qualitative factors. These factors were accumulated by an
external compensation consulting firm and included comparisons of our fiscal
2003 financial statistics to peer companies, strategic achievements such as
acquisitions and their integration, comparisons of the base salary level to the
median for comparable companies in published compensation surveys and
assessments prepared internally by other members of our executive management. In
fiscal 2003, Mr. Tevens received a bonus in the amount of $66,620. Based upon
the performance of Mr. Tevens and our results for fiscal 2003, the Compensation
and Succession Committee determined that the base salary of Mr. Tevens should
remain the same for fiscal 2004. However, as a cost savings measure, Mr. Tevens
voluntarily requested that his base salary be decreased to $472,500 for fiscal
2004, a decrease of approximately 5%.
SECTION 162(M) OF INTERNAL REVENUE CODE
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for compensation in excess of $1.0 million paid to
a company's chief executive officer and any one of the four other most highly
paid executive officers during its taxable year. Qualifying performance-based
compensation is not subject to the deduction limit if certain requirements are
met. Based upon the compensation paid to the Company's executive officers in
fiscal 2003, it does not appear that the Section 162(m) limitation will have a
significant impact on us in the near term. However, the Compensation and
Succession Committee plans to review this matter periodically.
Carlos Pascual, Chairman
L. David Black
Richard H. Fleming
Ernest R. Verebelyi
- 16 -
REPORT OF THE AUDIT COMMITTEE
REVIEW OF OUR AUDITED FINANCIAL STATEMENTS
The Audit Committee has reviewed and discussed our audited financial
statements for the year ended March 31, 2003 with our management. The Audit
Committee has also discussed with Ernst & Young LLP, our independent auditors,
the matters required to be discussed by Statement on Auditing Standards No. 61,
"Communication with Audit Committees."
The Audit Committee has also received and reviewed the written disclosures
and the letter from Ernst & Young LLP required by Independence Standards Board
Standard No. 1, "Independence Discussion with Audit Committees," and has
discussed the independence of Ernst & Young LLP with that firm.
Based on the review and the discussions noted above, the Audit Committee
recommended to our Board of Directors that our audited financial statements be
included in our Annual Report on Form 10-K for the year ended March 31, 2003 for
filing with the Securities and Exchange Commission.
ERNST & YOUNG LLP INFORMATION
Fees related to services performed on our behalf by Ernst & Young LLP for
the year ended March 31, 2003 are as follows:
($ IN THOUSANDS)
Audit Fees... $ 434
Financial Information Systems Implementation and Design...... -
All Other Fees
a. Audit related fees, including benefit plan audits.... 77
b. Tax services......................................... 1,091
c. Other Matters........................................ 13
------
Total........................................................ $1,615
======
The Audit Committee has considered whether the provision of the above
services other than audit services is compatible with maintaining Ernst & Young
LLP's independence and has concluded that it is.
Richard H. Fleming, Chairman
L. David Black
Carlos Pascual
Wallace W. Creek
- 17 -
PERFORMANCE GRAPH
The Performance Graph shown below compares the cumulative total shareholder
return on our common stock based on its market price, with the total return of
the S&P MidCap 400 Index and the Dow Jones Industrial - Diversified Index. The
comparison of total return assumes that a fixed investment of $100 was invested
on April 1, 1998 in our common stock and in each of the foregoing indices and
further assumes the reinvestment of dividends. The stock price performance shown
on the graph is not necessarily indicative of future price performance.
[ILLUSTRATION OF PERFORMANCE GRAPH]
1998 1999 2000 2001 2002 2003
---- ---- ---- ---- ---- ----
Columbus McKinnon Corporation.............. 100 74 49 30 50 6
S&P Midcap 400 Index....................... 100 100 139 129 153 117
Dow Jones Industrial - Diversified Index... 100 115 151 131 123 87
- 18 -
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Succession Committee is composed of Carlos Pascual,
Richard H. Fleming, L. David Black and Ernest R. Verebelyi, each an outside
Director. None of the members of the Compensation and Succession Committee was,
during fiscal 2003 or prior thereto, an officer or employee of our Company or
any of our subsidiaries.
COMPENSATION OF DIRECTORS
We pay an annual retainer of $100,000 to our Chairman of the Board and an
annual retainer of $18,000 to each of our other outside directors. Directors who
are also our employees do not receive an annual retainer. Committee chairmen
each receive an additional annual retainer of $3,000. In addition, each of our
non-employee directors (other than our Chairman of the Board) also receives a
fee of $1,500 for each Board of Directors and committee meeting attended and is
reimbursed for any reasonable expenses incurred in attending such meetings.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our Directors and executive officers, and persons who own more than 10% of a
registered class of our equity securities, to file with the Securities and
Exchange Commission and NASDAQ initial reports of ownership and reports of
changes in ownership of our common stock and other equity securities. Our
officers, Directors and greater than 10% shareholders are required to furnish us
with copies of all Section 16(a) forms they file.
To our knowledge, based solely on our review of the copies of such reports
furnished to us and written representations that no other reports were required,
during the fiscal year ended March 31, 2003 all Section 16(a) filing
requirements applicable to our officers, Directors and greater than 10%
beneficial owners were complied with.
- 19 -
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of May 31, 2003
regarding the beneficial ownership of our Common Stock by (i) each person who is
known by us to own beneficially more than 5% of our common stock; (ii) by each
Director; (iii) by each of our five most highly compensated executive officers
and (iv) by all of our executive officers and Directors as a group.
NUMBER OF PERCENTAGE
DIRECTORS, OFFICERS AND 5% SHAREHOLDERS SHARES (1) OF CLASS
--------------------------------------- ---------- --------
Herbert P. Ladds, Jr. (2)(3) 914,610 5.99
Timothy T. Tevens (2)(4) 158,913 1.04
Robert L. Montgomery, Jr. (2)(5) 1,152,622 7.55
L. David Black (2) 1,700 *
Carlos Pascual (2) 1,500 *
Richard H. Fleming (2) 1,504 *
Ernest R. Verebelyi (2) 1,000
Wallace W. Creek (2) 6,500
Ned T. Librock (2)(6) 121,513 *
Karen L. Howard (2)(7) 120,714 *
Joseph J. Owen (2)(8) 41,598 *
All Directors and Executive Officers as a
Group (13 persons) (9) 2,573,818 16.86
Columbus McKinnon Corporation Employee Stock
Ownership Plan (2) 1,298,172 8.50
Capital Group International, Inc. (10) 2,007,350 13.15
Dimensional Fund Advisors Inc. (11) 1,011,587 6.62
Keane Capital Management, Inc. (12) 852,275 5.58
-------
* Less than 1%.
(1) Rounded to the nearest whole share. Unless otherwise indicated in the
footnotes, each of the shareholders named in this table has sole voting
and investment power with respect to the shares shown as beneficially
owned by such stockholder, except to the extent that authority is shared
by spouses under applicable law.
(2) The business address of each of the executive officers and directors is
140 John James Audubon Parkway, Amherst, New York 14228-1197.
(3) Includes (i) 731,355 shares of common stock owned directly, (ii) 163,705
shares of common stock owned directly by Mr. Ladds' spouse, and (iii)
19,550 shares of common stock held by Mr. Ladds' spouse as trustee for the
grandchildren of Mr. Ladds.
(4) Includes (i) 28,226 shares of common stock owned directly, (ii) 7,000
shares of common stock owned directly by Mr. Tevens' spouse, (iii) 50
shares of common stock owned by Mr. Tevens' son, (iv) 4,637 shares of
common stock allocated to Mr. Tevens' ESOP account, (v) 83,465 shares of
common stock issuable under options granted to Mr. Tevens under the
Incentive Plan which are exercisable within 60 days and (vi) 35,535 shares
of common stock issuable under options granted to Mr. Tevens under the
Non-Qualified Plan which are exercisable within 60 days. Excludes 28,965
shares of common stock issuable under options granted to Mr. Tevens under
the Incentive Plan and 16,035 shares of common stock issuable under
options granted to Mr. Tevens under the Non-Qualified Plan which are not
exercisable within 60 days.
- 20 -
(5) Includes (i) 1,052,745 shares of common stock owned directly, (ii) 85,000
shares of common stock owned directly by Mr. Montgomery's spouse and (iii)
14,877 shares of common stock allocated to Mr. Montgomery's ESOP account.
Excludes 1,283,295 additional shares of common stock owned by the ESOP for
which Mr. Montgomery serves as one of four trustees and for which he
disclaims any beneficial ownership.
(6) Includes (i) 19,390 shares of common stock owned directly, (ii) 152 shares
of common stock owned by Mr. Librock's son, (iii) 4,721 shares of common
stock allocated to Mr. Librock's ESOP account, (iv) 82,470 shares of
common stock issuable under options granted to Mr. Librock under the
Incentive Plan which are exercisable within 60 days and (v) 14,780 shares
of common stock issuable under options granted to Mr. Librock under the
Non-Qualified Plan which are exercisable within 60 days. Excludes 30,375
shares of common stock issuable under options granted to Mr. Librock under
the Incentive Plan and 3,375 shares of common stock issuable under options
granted to Mr. Librock under the Non-Qualified Plan which are not
exercisable within 60 days.
(7) Includes (i) 21,796 shares of common stock owned directly, (ii) 1,668
shares allocated to Ms. Howard's ESOP account, (iii) 82,470 shares of
common stock issuable under options granted to Ms. Howard under the
Incentive Plan which are exercisable within 60 days and (iv) 14,780 shares
of common stock issuable under options granted to Ms. Howard under the
Non-Qualified Plan which are exercisable within 60 days. Excludes (i)
1,296,504 additional shares of common stock owned by the ESOP for which
Ms. Howard serves as one of four trustees and for which she disclaims any
beneficial ownership and (ii) 30,375 shares of common stock issuable under
options granted to Ms. Howard under the Incentive Plan and 3,375 shares of
common stock issuable under options granted to Ms. Howard under the
Non-Qualified Plan which are not exercisable within 60 days.
(8) Includes (i) 9,005 shares of common stock owned directly, (ii) 1,327
shares of common stock owned by Mr. Owen's spouse, (iii) 1,016 shares of
common stock allocated to Mr. Owen's ESOP account and (iv) 29,125 shares
of common stock issuable under options granted to Mr. Owen under the
Incentive Plan which are exercisable within 60 days and (iv) 1,125 shares
of common stock issuable under options granted to Mr. Owen under the
Non-Qualified Plan which are exercisable within 60 days. Excludes 30,375
shares of common stock issuable under options granted to Mr. Owen under
the Incentive Plan and 3,375 shares under the Non-Qualified Plan which are
not exercisable within 60 days.
(9) Includes (i) options to purchase an aggregate of 373,525 shares of common
stock issuable to certain executive officers under the Incentive Plan and
Non-Qualified Plan which are exercisable within 60 days. Excludes the
shares of common stock owned by the ESOP as to which Mr. Montgomery, Ms.
Howard and Mr. Myers serve as trustees, except for an aggregate of 35,316
shares allocated to the respective ESOP accounts of our executive officers
and (ii) options to purchase an aggregate of 189,675 shares of common
stock issued to certain executive officers under the Incentive Plan and
Non-Qualified Plan which are not exercisable within 60 days.
(10) Information with respect to Capital Group International, Inc. and its
holdings of common stock is based on a Schedule 13G jointly filed by
Capital Group International, Inc. and Capital Guardian Trust Company with
the Securities and Exchange Commission on February 11, 2003. Based solely
upon information in this Schedule 13G, Capital Group International, Inc.
has sole voting power of 1,489,100 shares of such common stock and sole
dispositive power of 2,007,350 shares of such common stock. Capital
Guardian Trust Company is a wholly owned subsidiary of Capital Group
International, Inc. The stated business address for both Capital Group
International, Inc. and Capital Guardian Trust Company is 11100 Santa
Monica Blvd, Los Angeles, California 90025.
(11) Information with respect to Dimensional Fund Advisors Inc. and its
holdings of common stock is based on a Schedule 13G of Dimensional Fund
Advisors Inc. filed with the Securities and Exchange Commission on
February 10, 2003. The stated business address for Dimensional Fund
Advisors Inc. is 1299 Ocean Avenue, 11th Floor, Santa Monica, California
90401.
(12) Information with respect to Keane Capital Management, Inc. and its
holdings of common stock is based on a Schedule 13G of Keane Capital
Management, Inc. filed with the Securities and Exchange Commission on
March 31, 2003. The stated business address for Keane Capital Management,
Inc. is 3420 Toringdon Way, Suite 350, Charlotte, North Carolina, 28277.
- 21 -
SOLICITATION OF PROXIES
The cost of solicitation of proxies will be borne by us, including
expenses in connection with preparing and mailing this Proxy Statement. In
addition to the use of the mails, proxies may be solicited by personal
interviews or by telephone, telecommunications or other electronic means by our
Directors, officers and employees at no additional compensation. Arrangements
will be made with brokerage houses, banks and other custodians, nominees and
fiduciaries for the forwarding of solicitation material to the beneficial owners
of our common stock, and we will reimburse them for reasonable out-of-pocket
expenses incurred by them in connection therewith.
OTHER MATTERS
Our management does not presently know of any matters to be presented for
consideration at the Annual Meeting other than the matters described in the
Notice of Annual Meeting. However, if other matters are presented, the
accompanying proxy confers upon the person or persons entitled to vote the
shares represented by the proxy, discretionary authority to vote such shares in
respect of any such other matter in accordance with their best judgment.
OTHER INFORMATION
Ernst & Young LLP has been selected as our independent audit firm for the
current fiscal year and has been the Company's independent audit firm for its
most recent fiscal year ended March 31, 2003.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting of Shareholders and will have the opportunity to make a
statement, if they so desire, and will be available to respond to appropriate
questions.
Effective April 1, 2003, we placed our directors and officers
indemnification insurance coverage with the Great American Insurance Company,
Liberty Mutual Insurance Company and One Beacon American Insurance Company for a
term of one year at a cost of $503,400. Each of these insurance companies
provides coverage of $5,000,000, for a total coverage of $15,000,000. This
insurance provides coverage to our executive officers and directors individually
where exposures exist for which we are unable to provide direct indemnification.
WE WILL PROVIDE WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS SOLICITED, ON
THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF OUR ANNUAL REPORT ON FORM 10-K,
FOR THE FISCAL YEAR ENDED MARCH 31, 2003, FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO. Such
written request should be directed to Columbus McKinnon Corporation, 140 John
James Audubon Parkway, Amherst, New York 14228-1197, Attention: Robert L.
Montgomery, Jr. Each such request must set forth a good faith representation
that, as of June 27, 2003, the person making the request was a beneficial owner
of securities entitled to vote at the Annual Meeting of Shareholders.
- 22 -
SHAREHOLDERS' PROPOSALS
Proposals of shareholders intended to be presented at the 2004 Annual
Meeting must be received by us by March 19, 2004 to be considered for inclusion
in our Proxy Statement and form of proxy relating to that meeting. In addition,
our by-laws require that notice of shareholder proposals and nominations for
director be delivered to our principal executive offices not less than 60 days
nor more than 90 days prior to the first anniversary of the Annual Meeting for
the preceding year; provided, however, if the Annual Meeting is not scheduled to
be held within a period commencing 30 days before such anniversary date and
ending 30 days after such anniversary date, such shareholder notice shall be
delivered by the later of (i) 60 days prior to the date of the Annual Meeting or
(ii) the tenth day following the date such Annual Meeting date is first publicly
announced or disclosed. The date of the 2004 Annual Meeting has not yet been
established. Nothing in this paragraph shall be deemed to require us to include
in our Proxy Statement and proxy relating to the 2004 Annual Meeting any
shareholder proposal that does not meet all of the requirements for inclusion
established by the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
The accompanying Notice and this Proxy Statement are sent by order of our
Board of Directors.
LOIS H. DEMLER
Corporate Secretary
Dated: July 25, 2003
- 23 -
APPENDIX A
COLUMBUS MCKINNON CORPORATION
(THE "COMPANY")
AUDIT COMMITTEE CHARTER
ORGANIZATION
------------
The Audit Committee shall consist of no fewer than three members. The members of
the Audit Committee shall meet the independence and experience requirements of
Nasdaq, Section 10A(m)(3) of the Securities Exchange Act of 1934 (the "Exchange
Act") and the rules and regulations of the Commission, including financial
literacy. At least one member of the Audit Committee shall be a financial expert
as defined by the Commission. Audit committee members shall not simultaneously
serve on the audit committees of more than two other public companies.
The members of the Audit Committee shall be appointed by the Board. Audit
Committee members may be replaced by the Board.
STATEMENT OF POLICY AND RESPONSIBILITIES
----------------------------------------
The Audit Committee is appointed by the Board to assist the Board in monitoring
(1) the integrity of the financial statements of the Company, (2) the Company's
internal accounting and financial controls, (3) the independent auditor's
qualifications and independence, (4) the performance of the Company's internal
audit function and independent auditors, and (5) the compliance by the Company
with legal and regulatory requirements.
The Audit Committee shall have the sole authority to appoint or replace the
independent auditor (subject, if applicable, to shareholder ratification). The
Audit Committee shall be directly responsible for the compensation and oversight
of the work of the independent auditor (including resolution of disagreements
between management and the independent auditor regarding financial reporting)
for the purpose of preparing or issuing an audit report or related work. The
independent auditor shall report directly to the Audit Committee.
The Audit Committee shall pre-approve all auditing services and permitted
non-audit services (including the fees and terms thereof) to be performed for
the Company by its independent auditor, subject to the de minimus exceptions for
non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which
are approved by the Audit Committee prior to the completion of the audit.
The Audit Committee shall prepare the report required by the rules of the
Securities and Exchange Commission (the "Commission") to be included in the
Company's annual proxy statement.
In discharging its oversight role, the Committee is authorized to investigate
any matter brought to its attention with full access to all books, records,
facilities, and personnel of the Company.
A-1
PRINCIPAL FUNCTIONS
-------------------
The Committee, in carrying out its responsibilities, believes its policies and
procedures should remain flexible in order to best react to changing conditions
and circumstances. The Committee will take appropriate action to set the overall
Company "tone" for quality financial reporting, sound business risk practices,
and ethical behavior. The following functions are set forth as a guide to be
supplemented and carried out as the Committee deems necessary and appropriate.
The following shall be the principal recurring functions of the Committee in
carrying out its responsibilities for FINANCIAL STATEMENT AND DISCLOSURE
MATTERS:
o Review and discuss with management and the independent auditor the
annual audited financial statements, including disclosures made in
management's discussion and analysis, and recommend to the Board
whether the audited financial statements should be included in the
Company's Form 10-K.
o Review and discuss with management and the independent auditor the
Company's quarterly financial statements prior to the filing of its
Form 10-Q, including the results of the independent auditor's review of
the quarterly financial statements.
o Discuss with management and the independent auditor significant
financial reporting issues and judgments made in connection with the
preparation of the Company's financial statements, including any
significant changes in the Company's selection or application of
accounting principles, any major issues as to the adequacy of the
Company's internal controls and any special steps adopted in light of
material control deficiencies.
o Review and discuss reports from the independent auditors on:
(a) All critical accounting policies and practices to be used.
(b) All alternative treatments of financial information within
generally accepted accounting principles that have been
discussed with management, ramifications of the use of such
alternative disclosures and treatments, and the treatment
preferred by the independent auditor.
(c) Other material written communications between the
independent auditor and management, such as any management
letter or schedule of unadjusted differences.
o Discuss with management the Company's earnings press releases,
including the use of "pro forma" or "adjusted" non-GAAP information, as
well as financial information and earnings guidance provided to
analysts and rating agencies. Such discussion may be done generally
(consisting of discussing the types of information to be disclosed and
the types of presentations to be made).
o Discuss with management and the independent auditor the effect of
regulatory and accounting initiatives as well as off-balance sheet
structures on the Company's financial statements.
A-2
o Discuss with management the Company's major financial risk exposures
and the steps management has taken to monitor and control such
exposures, including the Company's risk assessment and risk management
policies.
o Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit, including any difficulties encountered in the
course of the audit work, any restrictions on the scope of activities
or access to requested information, and any significant disagreements
with management.
o Review disclosures made to the Audit Committee by the Company's CEO and
CFO during their certification process for the Form 10-K and Form 10-Q
about any significant deficiencies in the design or operation of
internal controls or material weaknesses therein and any fraud
involving management or other employees who have a significant role in
the Company's internal controls.
o The Committee shall review management's assertion on its assessment of
the effectiveness of internal controls as of the end of the most recent
fiscal year, as well as the independent auditor's report on
management's assertion.
The following shall be the principal recurring functions of the Committee in
carrying out its responsibilities for OVERSIGHT OF THE COMPANY'S RELATIONSHIP
WITH THE INDEPENDENT AUDITOR MATTERS:
o Review and evaluate the lead partner of the independent auditor team.
o Obtain and review a report from the independent auditor at least
annually regarding (a) the independent auditor's internal
quality-control procedures, (b) any material issues raised by the most
recent internal quality-control review, or peer review, of the firm, or
by any inquiry or investigation by governmental or professional
authorities within the preceding five years respecting one or more
independent audits carried out by the firm, (c) any steps taken to deal
with any such issues, and (d) all relationships between the independent
auditor and the Company. Evaluate the qualifications, performance and
independence of the independent auditor, including considering whether
the auditor's quality controls are adequate and the provision of
permitted non-audit services is compatible with maintaining the
auditor's independence, and taking into account the opinions of
management and internal auditors. The Audit Committee shall present its
conclusions with respect to the independent auditor to the Board.
o Ensure the rotation of the lead (or coordinating) audit partner having
primary responsibility for the audit and the audit partner responsible
for reviewing the audit as required by law. Consider whether, in order
to assure continuing auditor independence, it is appropriate to adopt a
policy of rotating the independent auditing firm on a regular basis.
o Recommend to the Board policies for the Company's hiring of employees
or former employees of the independent auditor who participate in any
capacity in the audit of the Company.
A-3
o Meet with the independent auditor prior to the audit to discuss the
planning and staffing of the audit.
The following shall be the principal recurring functions of the Committee in
carrying out its responsibilities for COMPLIANCE OVERSIGHT RESPONSIBILITIES:
o Obtain from the independent auditor assurance that Section 10A(b) of
the Exchange Act has not been implicated.
o Review reports and disclosures of insider and affiliated party
transactions. Advise the Board with respect to the Company's policies
and procedures regarding compliance with applicable laws and
regulations and with the Company's Code of Business Conduct and Ethics.
o Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters, and the confidential,
anonymous submission by employees of concerns regarding questionable
accounting or auditing matters.
o Discuss with management and the independent auditor any correspondence
with regulators or governmental agencies and any published reports,
which raise material issues regarding the Company's financial
statements or accounting policies.
o Discuss with the Company's General Counsel legal matters that may have
a material impact on the financial statements or the Company's
compliance policies.
o Review and approve the report of the Internal Auditor's annual
examination of the business expenditures of the Company's CEO and CFO.
LIMITATION OF AUDIT COMMITTEE'S ROLE
------------------------------------
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements and disclosures are
complete and accurate and are in accordance with generally accepted accounting
principles and applicable rules and regulations. These are the responsibilities
of management and the independent auditor.
OTHER MATTERS
-------------
The Audit Committee may form and delegate authority to subcommittees consisting
of one or more members when appropriate, including the authority to grant
pre-approvals of audit and permitted non-audit services, provided that decisions
of such subcommittee to grant pre-approvals shall be presented to the full Audit
Committee at its next scheduled meeting.
The Audit Committee shall have the authority, to the extent it deems necessary
or appropriate, to retain independent legal, accounting or other advisors. The
Company shall provide for appropriate funding, as determined by the Audit
Committee, for payment of compensation to the independent auditor for the
A-4
purpose of rendering or issuing an audit report and to any advisors employed by
the Audit Committee.
The Audit Committee shall make regular reports to the Board. The Audit Committee
shall review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval. The Audit Committee shall
annually review the Audit Committee's own performance.
MEETINGS
--------
The Audit Committee shall meet as often as it determines, but not less
frequently than bi-annually. The Audit Committee shall meet periodically with
management, the internal auditors and the independent auditor in separate
executive sessions. The Audit Committee may request any officer or employee of
the Company or the Company's outside counsel or independent auditor to attend a
meeting of the Committee or to meet with any members of, or consultants to, the
Committee.
A-5
APPENDIX B
COLUMBUS MCKINNON CORPORATION
(THE "COMPANY")
COMPENSATION AND SUCCESSION COMMITTEE CHARTER
ORGANIZATION
------------
This charter governs the operations of the Compensation and Succession Committee
(the "Committee"). The Committee shall be appointed by the Board of Directors,
with one member designated as Chairperson of the Committee, and shall comprise
at least three directors, each of whom is independent of the Company, Company
management, and other directors. Members of the Committee shall be considered
independent if they have no relationship or attribute that may interfere with
the exercise of their independence from the Company, Company management or other
directors.
STATEMENT OF POLICY AND RESPONSIBILITIES
----------------------------------------
The Committee's basic responsibility with respect to COMPENSATION matters is to
assure that the Chief Executive Officer ("CEO") and other executive officers of
the Company are compensated effectively in a manner consistent with the
compensation strategy of the Company (attached hereto as Exhibit A). The
Committee shall also produce an annual report on executive compensation for
inclusion in the Company's proxy materials in order to communicate to
shareholders the Company's compensation policies and the reasoning behind such
policies as required by applicable rules and regulations.
The Committee's basic responsibility with respect to SUCCESSION matters is to
assure that appropriate succession plans have been made and are currently valid
with respect to all Company key management positions.
PRINCIPAL FUNCTIONS
-------------------
The following functions are set forth herein as a guide with the understanding
that the Committee should supplement them as it deems appropriate.
The following shall be the principal recurring functions of the Committee in
carrying out its responsibilities for COMPENSATION matters:
o Review and make recommendations to the Board of Directors with respect
to the Company's compensation strategy (the "Compensation Strategy"),
Exhibit A.
o Review the list of peer companies to which the Company shall compare
itself for compensation purposes.
B-1
o In furtherance of the Compensation Strategy, (i) review and approve the
Company's compensation goals and objectives, (ii) evaluate the
performance of the Company's executive officers and other associates in
light of those goals and objectives, and (iii) set comparison levels
for the Company's executive officers and other associates based on such
evaluations and on their respective contributions to the Company's
growth, profitability, and financial well-being.
o Based upon an annual performance evaluation of the CEO and the Chief
Financial Officer ("CFO") and with reference to current comparable
industry and company size survey information, review and establish the
individual elements of total compensation for the CEO and CFO.
o Based upon an annual performance evaluation of the executive officers
of the Company other than the CEO and CFO and with reference to current
comparable industry and company size survey information, review and
approve the individual elements of total compensation as recommended by
management for such officers.
o Communicate in the annual Committee Report on Executive Compensation
included in the Proxy Statement to shareholders those matters that are
required by current applicable law.
o Review and approve material changes to the Company's basic salary and
wage structure, aggregate annual increases, and on-going administration
of the compensation program consistent with the current compensation
strategy.
o Assure that the Company's annual incentive program and the long-term,
equity-based incentive program are administered in a manner consistent
with the Company's current compensation strategy as to participation,
target annual incentive awards, Company financial goals, awards paid to
Officers, and total funds reserved for payment under compensation
plans.
o Review and recommend for consideration by the Board of Directors all
management requested grants and other actions with respect to
restricted stock, stock options, and other equity-based compensation.
o Review and recommend for consideration by the shareholders and/or the
Board of Directors, as appropriate, all new equity-related incentive
plans.
o Review the Company's employee benefit programs and recommend material
changes for consideration by the shareholders and/or the Board of
Directors, as appropriate.
o If appropriate, hire experts in the field of compensation to assist the
Committee with its responsibilities.
o Review annually for the CEO, CFO and other executive officers, (i)
employment agreements, severance arrangements, and change in control
agreements, where appropriate, and (ii) any special or supplemental
benefits.
B-2
o Such other responsibilities as may be assigned to the Committee, from
time to time, by the Board of Directors or as designated in plan
documents.
The following shall be the principal recurring processes of the Committee in
carrying out its responsibilities for SUCCESSION matters.
o Review and recommend for consideration by the Board of Directors, at
least annually, the validity and acceptability of the specific
Succession plans of the Company as they relate to the executive
officers of the Company.
o Review and recommend for consideration by the Board of Directors, at
least annually, the process employed by the Company in preparing
current Succession plans for all key management positions within the
Company; provide assurance to the Board of Directors that the process
is appropriate.
OTHER MATTERS
-------------
The Committee has full authority to engage the services of external resources,
including compensation consultants, as deemed appropriate and necessary. The
Committee shall also have the authority to obtain advice and assistance from
internal or external legal, accounting, or other advisors.
The Committee has full authority to form, and delegate specific responsibilities
to, ad hoc sub-committees, as deemed appropriate, it being understood that the
Committee shall retain primary responsibility therefore.
The Committee shall review and reassess the adequacy of this Charter at least
annually and recommend any changes to the Board of Directors.
The Committee shall annually review its own performance.
MEETINGS
--------
The Committee shall meet as often as necessary to perform its functions and to
carry out its responsibilities. Meetings may be called by the Chairman of the
Committee or by management of the Company. All meetings shall be held pursuant
to the by-laws of the Company, and written minutes of each meeting will be filed
with the Company records. Reports of the Committee meetings shall be made to the
Board of Directors at its next regularly scheduled meeting.
B-3
EXHIBIT A
COLUMBUS MCKINNON CORPORATION
(THE "COMPANY")
COMPENSATION AND SUCCESSION COMMITTEE CHARTER
COMPANY COMPENSATION STRATEGY
OVERALL STRATEGIC OBJECTIVE
---------------------------
Align the compensation system of the Company with shareholder interests, the
interests of other stakeholders, and the objectives of the Company by
attracting, retaining, and motivating well-qualified people for all Company
positions.
SPECIFIC OBJECTIVES
-------------------
o The compensation system should seek to achieve fairness, internal
equity, competitive parity, and compliance with all appropriate
regulatory bodies.
o The compensation system may include all elements - base pay, annual
incentives, long-term equity based incentives, and employee benefits -
as appropriate for the various responsibility levels within the
Company.
o Aggregate compensation should target median (50th percentile) levels
compared with current comparable industry and company size survey
information, as tempered by experience, performance, and individual
circumstances.
o The compensation system should provide a mix of current and long-term
pay as appropriate for the various responsibility levels within the
Company with reference to general practice as shown in applicable
survey data as a guide.
o The compensation system should provide an appropriate mix of fixed and
variable pay as appropriate for the various responsibility levels
within the Company with reference to general practice as shown in
applicable survey data as a guide.
B-4
APPENDIX C
COLUMBUS MCKINNON CORPORATION
(THE "COMPANY")
CORPORATE GOVERNANCE AND NOMINATION COMMITTEE CHARTER
ORGANIZATION
------------
This charter governs the operations of the Corporate Governance and Nomination
Committee (the "Committee"). The Committee shall be appointed by the Board of
Directors, with one member designated as Chairperson of the Committee, and shall
comprise at least three directors, each of whom is independent of the Company,
Company management, and other directors. Members of the Committee shall be
considered independent if they have no relationship or attribute that may
interfere with the exercise of their independence from the Company, Company
management or other directors. The Board of Directors shall have the authority
at any time to change the membership of the Committee and to fill vacancies in
its membership, subject to such new member(s) satisfying the applicable
independence requirements.
STATEMENT OF POLICY AND RESPONSIBILITIES
----------------------------------------
The Committee's basic responsibility with respect to CORPORATE GOVERNANCE
matters is to oversee, develop, and review the policies and procedures that
describe the Company's system of corporate governance, ascertain that such
policies and procedures are consistent with the interests of the Company's
shareholders and other relevant stakeholders, that they provide an adequate and
appropriate level of corporate oversight consistent with best practices for a
company of similar size and situation, and ascertain that such governance
policies and principles are complied with by the directors, officers, and
employees of the Company.
The Committee's basic responsibility with respect to NOMINATION matters is to
assure that the composition of the Board of Directors includes:
o appropriate breadth, depth and diversity of experience and capabilities,
o an appropriate number and proportion of independent directors,
o sufficient accounting and financial expertise, and
o other characteristics appropriate for the current and anticipated future
needs and business of the Company.
PRINCIPAL FUNCTIONS
-------------------
The following functions are set forth herein as a guide with the understanding
that the Committee should supplement them as it deems appropriate.
The following shall be the principal recurring functions of the Committee in
carrying out its responsibilities for CORPORATE GOVERNANCE matters:
C-1
o Through direct knowledge and with the assistance of appropriate
external sources maintain a current understanding and knowledge of
legal, regulatory, and relevant best practices corporate governance
developments and principles.
o Conduct an annual review (more frequently as circumstance indicate) of
the "Board of Directors General Governance Policy," and recommend
changes for consideration by the Board of Directors.
o On an ongoing basis, oversee an evaluation of the composition,
organization, and governance of the Board and its Committees as related
to current and anticipated future requirements.
o Through its own efforts and observations, coordination with other
directors and committees of the Board of Directors, surveys of Company
management, reviews of the findings of the Internal and Independent
Auditors, and such other sources as deemed appropriate, monitor
compliance with Company's system of corporate governance.
o On an ongoing basis, oversee, review, and reassess the Company's code
of ethics and corporate governance guidelines and procedures, and
recommend any proposed changes to the Board of Directors.
The following shall be the principal recurring functions of the Committee in
carrying out its responsibilities for NOMINATION matters
o Review annually the breadth, depth and diversity of experience and
capabilities and performance of the membership of the Board of
Directors; the number and proportion of members who are independent of
the Company, Company management and other Directors; appropriate
financial and accounting expertise; and other characteristics deemed to
be appropriate for the current and anticipated future needs and
business of the Company, such as age, business experience, education,
reputation, title and responsibilities of current position,
availability, and track record; and recommend appropriate action for
consideration by the Board of Directors.
o Develop qualification criteria for Directors, carry out appropriate
investigation of, and interview, candidates for membership on the Board
of Directors as recommended by the Committee, the Chairman, the CEO
and/or others as designated by the Board of Directors, advise the Board
of Directors of the Committee's findings, and recommend to the Board of
Directors the appropriate action with respect to each prospective
member's candidacy.
OTHER MATTERS
-------------
The Committee has full authority to engage the services of external resources,
including executive search firms, as deemed appropriate and necessary. The
Committee also has the authority to obtain advice and assistance from internal
or external legal, accounting, or other advisors.
C-2
The Committee has full authority to form, and delegate specific responsibilities
to, ad hoc sub-committees, as deemed appropriate, it being understood that the
Committee shall retain primary responsibility therefore.
The Committee shall review and reassess the adequacy of this Charter at least
annually and recommend any changes to the Board of Directors.
The Committee shall annually review its own performance.
MEETINGS
--------
The Committee shall meet as often as necessary to perform its functions and to
carry out its responsibilities. Meetings may be called by the Chairman of the
Committee or by management of the Company. All meetings shall be held pursuant
to the by-laws of the Company, and written minutes of each meeting will be filed
with the Company records. Reports of the Committee meetings shall be made to the
Board of Directors at its next regularly scheduled meeting.
C-3
ANNUAL MEETING OF SHAREHOLDERS OF
COLUMBUS MCKINNON CORPORATION
August 18, 2003
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
---------------
PLEASE DATE, SIGN AND MAIL YOUR ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED AS
SOON AS POSSIBLE.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
--------------------------------------------
PLEASE CALL TOLL-FREE 1-800-PROXIES AND FOLLOW THE INSTRUCTIONS. HAVE YOUR
CONTROL NUMBER AND THE PROXY CARD AVAILABLE WHEN YOU CALL.
TO VOTE BY INTERNET
-------------------
PLEASE ACCESS THE WEB PAGE AT WWW.VOTEPROXY.COM AND FOLLOW THE ON-SCREEN
INSTRUCTIONS. HAVE YOUR CONTROL NUMBER AVAILABLE WHEN YOU ACCESS THE WEB PAGE.
YOUR CONTROL NUMBER IS
-------------------- --------------------
PROXY
COLUMBUS MCKINNON CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 18, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints TIMOTHY T. TEVENS and ROBERT L. MONTGOMERY,
JR. and each or any of them, attorneys and proxies, with full power of
substitution, to vote at the Annual Meeting of Shareholders of COLUMBUS McKINNON
CORPORATION (the "Company") to be held at the Company's corporate offices at 140
John James Audubon Parkway, Amherst, New York, on August 18, 2003 at 10:00 a.m.,
local time, and any adjournment(s) thereof revoking all previous proxies, with
all powers the undersigned would possess if present, to act upon the following
matters and upon such other business as may properly come before the meeting or
any adjournment(s) thereof.
1. ELECTION OF DIRECTORS:
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed below
contrary below)
HERBERT P. LADDS, JR.
TIMOTHY T. TEVENS
ROBERT L. MONTGOMERY, JR.
CARLOS PASCUAL
RICHARD H. FLEMING
ERNEST R. VEREBELYI
WALLACE W. CREEK
Instruction: To withhold authority to vote for any individual nominee mark "FOR"
all nominees above and write the name(s) of that nominee(s) with respect to whom
you wish to withhold authority to vote here:
----------------------------
----------------------------
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" PROPOSAL NO. 1.
Dated: ______________, 2003
----------------------------
Signature
----------------------------
Signature if held jointly
Please sign exactly as name appears. When shares
are held by joint tenants, both should sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in full
corporate name by President or other authorized
officer. If a partnership, please sign a
partnership name by authorized person. PLEASE
SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
ANNUAL MEETING OF SHAREHOLDERS OF
COLUMBUS MCKINNON CORPORATION
August 18, 2003
ESOP
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
---------------
PLEASE DATE, SIGN AND MAIL YOUR ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED AS
SOON AS POSSIBLE.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
--------------------------------------------
PLEASE CALL TOLL-FREE 1-800-PROXIES AND FOLLOW THE INSTRUCTIONS. HAVE YOUR
CONTROL NUMBER AND THE PROXY CARD AVAILABLE WHEN YOU CALL.
TO VOTE BY INTERNET
-------------------
PLEASE ACCESS THE WEB PAGE AT WWW.VOTEPROXY.COM AND FOLLOW THE ON-SCREEN
INSTRUCTIONS. HAVE YOUR CONTROL NUMBER AVAILABLE WHEN YOU ACCESS THE WEB PAGE.
YOUR CONTROL NUMBER IS
-------------------- --------------------
COLUMBUS MCKINNON CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
VOTING INSTRUCTION CARD FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 18, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The Trustees of the Columbus McKinnon Corporation Employee Stock Ownership
Plan (the "ESOP") are hereby authorized to represent and to vote as designated
herein the shares of the undersigned held under the ESOP at the Annual Meeting
of Shareholders of COLUMBUS McKINNON CORPORATION (the "Company") to be held at
the Company's corporate offices at 140 John James Audubon Parkway, Amherst, New
York, on August 18, 2003 at 10:00 a.m., local time, and any adjournment(s)
thereof revoking all previous voting instructions, with all powers the
undersigned would possess if present, to act upon the following matters and upon
such other business as may properly come before the meeting or any
adjournment(s) thereof.
THE TRUSTEES MAKE NO RECOMMENDATION WITH RESPECT TO VOTING
YOUR ESOP SHARES ON ANY ITEMS
1. ELECTION OF DIRECTORS:
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed below
contrary below)
HERBERT P. LADDS, JR.
TIMOTHY T. TEVENS
ROBERT L. MONTGOMERY, JR.
CARLOS PASCUAL
RICHARD H. FLEMING
ERNEST R. VEREBELYI
WALLACE W. CREEK
Instruction: To withhold authority to vote for any individual nominee mark "FOR"
all nominees above and write the name(s) of that nominee(s) with respect to whom
you wish to withhold authority to vote here:
----------------------------
----------------------------
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
WHEN PROPERLY EXECUTED , THIS VOTING INSTRUCTION WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS MADE, THE TRUSTEES WILL VOTE ANY ALLOCATED
ESOP SHARES "FOR" PROPOSAL NO. 1.
Dated: _______________, 2003
----------------------------
Signature
Please sign exactly as name appears. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such. PLEASE
SIGN, DATE AND MAIL THE VOTING INSTRUCTION CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.