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
--------------------------------------------------------------------------------
(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 JULY 30, 2007
----------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Columbus
McKinnon Corporation, a New York corporation, will be held at the Ramada Hotel
and Conference Center, 2402 North Forest Road, Amherst, New York, on July 30,
2007, at 10:00 a.m., local time, for the following purposes:
1. To elect seven Directors to hold office until the 2008 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 8, 2007, 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.
TIMOTHY R. HARVEY
Secretary
Dated: June 27, 2007
COLUMBUS MCKINNON CORPORATION
140 JOHN JAMES AUDUBON PARKWAY
AMHERST, NEW YORK 14228-1197
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PROXY STATEMENT
-------------------------------------------------
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 (the "Annual Meeting")
to be held at the Ramada Hotel and Conference Center, 2402 North Forest Road,
Amherst, New York, on July 30, 2007, at 10:00 a.m., local time, and at any
adjournment or adjournments thereof. The close of business on June 8, 2007 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
8, 2007, we had outstanding 18,862,887 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.
In order for business to be conducted, a quorum must be present at the
Annual Meeting. A quorum is a majority of the outstanding shares of common stock
entitled to vote at the Annual Meeting. Abstentions, broker non-votes and
withheld votes will be counted in determining the existence of a quorum at the
Annual Meeting.
Directors will be elected by a plurality of the votes cast at the Annual
Meeting, meaning the seven nominees receiving the most votes will be elected.
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. Abstentions and broker non-votes will be
counted in determining the existence of a quorum, but will not be counted
towards any other nominee's achievement of plurality or in determining the votes
cast on any other proposal.
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 are first being sent or given to
shareholders on or about June 27, 2007.
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. With the appointment of
Nicholas T. Pinchuk in January 2007, our Board of Directors was increased to
eight members. Carlos Pascual, who has been a Director since 1998, has announced
that he plans to retire as a Director effective as of the date of the Annual
Meeting. Accordingly, Mr. Pascual 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, Richard H. Fleming, Ernest R. Verebelyi, Wallace W. Creek,
Stephen Rabinowitz, Linda A. Goodspeed and Nicholas T. Pinchuk, each of whom is
presently a Director and, except for Mr. Pinchuk, has been previously elected by
our shareholders. 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:
ERNEST R. VEREBELYI, age 59, was appointed a Director of the Company in
January 2003 and was elected Chairman of the Board in August 2005. Mr. Verebelyi
retired from Terex Corporation, a global diversified equipment manufacturer, in
October 2002 where he held the position of Group President. Prior to joining
Terex in 1998, he held executive, general management and operating positions at
General Signal Corporation, Emerson, Hussmann Corporation, and General Electric.
Mr. Verebelyi also serves as a director of CH Energy Group, Inc. (NYSE: CHG).
TIMOTHY T. TEVENS, age 51, was elected President and appointed 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.
RICHARD H. FLEMING, age 60, 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 Corp. (NYSE: USG). Prior thereto, Mr. Fleming
served USG Corp. 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
not-for-profit entities including UCAN and Chicago United.
WALLACE W. CREEK, age 68, was appointed a Director of the Company in
January 2003. From December 2002 through June 2004, he served as Senior Vice
President of Finance for Collins & Aikman, a leading manufacturer of automotive
interior components. Prior to that, Mr. Creek served as Controller of the
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General Motors Corporation from 1992 to 2002 and held several executive
positions in finance at General Motors over a forty-three year career. Mr. Creek
is also a director of CF Industries Holdings, Inc. (NYSE: CF).
STEPHEN RABINOWITZ, age 64, was appointed a Director of the Company in
October 2004. He retired in 2001 from his position as Chairman and Chief
Executive Officer of General Cable Corporation, a leading manufacturer of
electrical, communications and utility cable. Prior to joining General Cable as
President and Chief Executive Officer in 1994, he served as President and CEO of
AlliedSignal Braking Systems, and before that as President and CEO of General
Electric's Electrical Distribution and Control business. He also held management
positions in manufacturing operations and technology at the General Electric
Company and the Ford Motor Company. Mr. Rabinowitz is also a Director of Energy
Conversion Devices, Inc. (Nasdaq: ENER) and Microheat Inc. of Farmington Hills,
Michigan.
LINDA A. GOODSPEED, age 45, was appointed a Director of the Company in
October 2004. In 2001, she joined Lennox International Inc. (NYSE: LII), a
global supplier of climate control solutions, and currently serves as Executive
Vice President and Chief Supply Chain Logistics and Technology Officer of that
company. Prior to that, Ms. Goodspeed served as President and Chief Operating
Officer of PartMiner, Inc., a global supplier of electronic components. She has
also held management positions in product management and development, research
and development and design engineering at General Electric Appliances, Nissan
North America, Inc. and the Ford Motor Company. Ms. Goodspeed also serves as a
director of American Electric Power Co., Inc. (NYSE: AEP) and is a member of the
Development Board of the University of Texas at Dallas.
NICHOLAS T. PINCHUK, age 60, was appointed a Director of the Company in
January 2007. Currently, he is President and Chief Operating Officer of Snap-on
Incorporated (NYSE: SNA), an S&P 500 company. Mr. Pinchuk joined Snap-on in
2002. Prior to that, Mr. Pinchuk served in several executive operational and
financial management positions at United Technologies Corporation, including
President, Global Refrigeration Operations of its Carrier Corporation unit and
President of Carrier's Asia-Pacific Operations. He also served in financial and
engineering managerial staff positions at the Ford Motor Company from 1972 to
1983. Mr. Pinchuk held the rank of First Lieutenant in the United States Army
from 1970 to 1971. Mr. Pinchuk also serves as a director of Snap-on.
THE BOARD OF DIRECTORS RECOMMENDS UNANIMOUSLY A VOTE "FOR" EACH OF THE DIRECTOR
NOMINEES.
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CORPORATE GOVERNANCE
GENERAL CORPORATE GOVERNANCE POLICY
Our Board of Directors believes that its overriding responsibility is to
offer guidance and the benefit of its collective experience to help our
management understand the risks confronting, and opportunities available to, our
Company. In furtherance of this responsibility, our Board of Directors has
adopted a General Corporate Governance Policy setting forth certain policies,
guidelines and procedures it deems important to the successful satisfaction of
this responsibility. These policies and procedures include guidelines as to the
eligibility, independence, evaluation, education, compensation and
indemnification of our Directors, as well as with respect to specific
transactions requiring the prior formal approval of our Board of Directors. A
copy of our General Corporate Governance Policy is posted on the Investor
Relations section of the Company's website at WWW.CMWORKS.COM.
BOARD OF DIRECTORS INDEPENDENCE
Our Board of Directors has determined that each of its current members,
other than Mr. Tevens, is independent within the meaning of the Nasdaq Stock
Market, LLC listing standards as currently in effect.
BOARD OF DIRECTORS MEETINGS AND ATTENDANCE
The Board of Directors and its committees meet regularly throughout the
year and also hold special meetings and act by written consent from time to time
as appropriate. All Directors are expected to attend each meeting of the Board
of Directors and the committees on which he or she serves, and are also invited,
but not required, to attend the Annual Meeting. Agendas for meetings of the
Board of Directors generally include executive sessions for the independent
Directors to meet without management Directors present. During the year ended
March 31, 2007, our Board of Directors held seven 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 or she served, except for Mr. Pascual who was only able to attend
approximately 68% of such meetings due to health issues. All Directors attended
the 2006 Annual Meeting.
AUDIT COMMITTEE
Our Board of Directors has a standing Audit Committee comprised of Mr.
Fleming, as Chairman, and Messrs. Creek and Rabinowitz and Ms. Goodspeed. Each
member of our Audit Committee is independent as defined under Section 10A(m)(3)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
under the Nasdaq Stock Market, LLC rules currently in effect. In addition,
pursuant to the requirements of Section 407 of the Sarbanes-Oxley Act of 2002,
our Board of Directors has determined that each of Messrs. Fleming and Creek
qualifies as an "audit committee financial expert." 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
controls, as well as our independent auditors' report on this assessment, (v)
reviewing insider and affiliated party transactions and (vi) establishing
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procedures for the receipt, retention and treatment of complaints received by us
regarding accounting or internal controls. The Audit Committee is governed by a
written charter approved by the Board of Directors. A copy of this charter is
posted on the Investor Relations section of our website at WWW.CMWORKS.COM. Our
Audit Committee held nine meetings in fiscal 2007.
COMPENSATION AND SUCCESSION COMMITTEE
Our Compensation and Succession Committee consists of Mr. Rabinowitz, as
Chairman, and, at the beginning of fiscal 2007, also included Messrs. Fleming,
Pascual and Herbert P. Ladds, Jr. Mr. Verebelyi replaced Mr. Ladds on this
committee upon Mr. Ladds' retirement from the Board of Directors following our
2006 Annual Meeting. Mr. Pinchuk replaced Mr. Verebelyi on this Committee in
March 2007. Each Director who served on the Compensation and Succession
Committee during fiscal 2007, other than Mr. Ladds, is an independent Director
under the Nasdaq Stock Market, LLC rules currently in effect. The principal
functions of this Committee are to (i) review and make recommendations to the
Board of Directors concerning our compensation strategy, (ii) establish
corporate performance measures and goals under our performance-based incentive
programs, (iii) determine individual compensation targets for our executive
officers under our incentive programs, (iv) evaluate and certify whether
performance goals have been met at the end of the performance period, (v)
determine salary increases and award amounts for individual executive officers,
(vi) review and approve (or recommend to the Board of Directors for approval)
any material changes to our salary, incentive, and benefit programs and assure
that these programs are administered in a manner consistent with the
compensation strategy, (viii) review and make recommendations to the Board of
Directors concerning management requested equity grants and (ix) perform other
functions as identified in the Compensation and Succession Committee charter.
The Compensation and Succession Committee is governed by a written charter
approved by the Board of Directors which is posted on the Investor Relations
section of our website at WWW.CMWORKS.COM. Our Compensation and Succession
Committee held seven meetings in fiscal 2007. Additional information on the
Compensation and Succession Committee's processes and procedures are addressed
in the Compensation Discussion and Analysis below.
CORPORATE GOVERNANCE AND NOMINATION COMMITTEE
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. Creek and, at the beginning of
fiscal 2007, also included Messrs. Pascual and Ladds and Ms. Goodspeed. Mr.
Verebelyi replaced Mr. Ladds on this committee upon Mr. Ladds' retirement from
the Board of Directors following our 2006 Annual Meeting. Mr. Pinchuk replaced
Mr. Verebelyi on this Committee in March 2007. Each Director who served on the
Corporate Governance and Nomination Committee during fiscal 2007, other than Mr.
Ladds, is an independent Director under the Nasdaq Stock Market, LLC rules
currently in effect. Our Corporate Governance and Nomination 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."
Generally, a shareholder who wishes to nominate a candidate for Director must
give us prior written notice thereof, which notice must be personally delivered
or mailed via registered first class mail, return receipt requested, to our
Secretary and must be received by our Secretary not less than 60 days nor more
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than 90 days prior to the first anniversary of the date our proxy statement was
first mailed to shareholders in connection with our previous year's Annual
Meeting. If such nomination is given in connection with a special meeting for
the election of Directors, it must be received no later than the tenth day
following the day on which the date of the special meeting is publicly announced
or disclosed. The shareholder's recommendation for nomination must contain the
following information as to each nominee for Director: the nominee's name, age,
business address and residence address; the nominee's principal occupation or
employment for the previous five years; the number of shares of our common stock
owned by such candidate; and any other information relating to the nominee that
is required to be disclosed in solicitations of proxies for elections of
directors pursuant to Regulation 14A under the Exchange Act. A shareholder's
recommendation must also set forth: such shareholder's name and address as they
appear on our books and records; the number of shares of each class of our
capital stock that are beneficially owned and held of record by such
shareholder; any material interest of such shareholder in such nomination; any
other information that is required to be provided by such shareholder pursuant
to Regulation 14A under the Exchange Act in his or her capacity as a proponent
to a shareholder proposal; and a signed consent from each nominee recommended by
such shareholder that such nominee is willing to serve as a Director if elected.
Any nomination not made in strict accordance with the foregoing provisions will
be disregarded at the direction of our Chairman of the Board. The Corporate
Governance and Nomination Committee is governed by a written charter approved by
the Board of Directors which is posted on the Investor Relations section of our
website at WWW.CMWORKS.COM. Our Corporate Governance and Nomination Committee
held five meetings in fiscal 2007.
CODE OF ETHICS
Our Board of Directors adopted a Code of Ethics which governs all of our
Directors, officers and employees, including our Chief Executive Officer and
other executive officers. This Code of Ethics is posted on the Corporate
Information section of the Company's website at WWW.CMWORKS.COM. The Company
will disclose on its website any amendment to this Code of Ethics or waiver of a
provision of this Code of Ethics, including the name of any person to whom the
waiver was granted.
DIRECTOR STOCK OWNERSHIP GUIDELINE
Our General Corporate Governance Policy contains a guideline whereby all
Directors are asked to beneficially own not less than 8,000 shares of our common
stock within five years of becoming a Director, or by April 1, 2010, whichever
occurs later.
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DIRECTOR COMPENSATION
Effective August 1, 2006, we pay an annual retainer of $80,000 to each of
our outside directors, $30,000 of which is paid in our common stock and the
balance is paid in quarterly cash installments. In addition they receive an
annual award of 1,200 restricted stock units under the Omnibus Plan. Our
Chairman of the Board receives an additional annual retainer of $40,000.
Directors who are also our employees do not receive an annual retainer.
Committee chairmen each receive an additional annual retainer of $6,000, except
for the chairman of the Audit Committee who receives an additional annual
retainer of $12,000. No additional fees are paid for attendance at Board of
Director or committee meetings. Our Directors are reimbursed for any reasonable
expenses incurred in attending such meetings.
The following table sets forth the cash compensation as well as certain
other compensation paid to the Company's directors during the year ended March
31, 2007:
CHANGE IN PENSION
VALUE AND
NON-QUALIFIED
FEES EARNED NON-EQUITY DEFERRED
OR PAID STOCK OPTION INCENTIVE PLAN COMPENSATION ALL OTHER
NAME IN CASH AWARDS AWARDS COMPENSATION EARNINGS COMPENSATION TOTAL
---- ----------- ---------- ------ -------------- ----------------- ------------ -----
Wallace W. Creek $49,333 $26,711(1) $- $- $- $- $76,044
Richard H. Fleming 53,333 26,711(1) - - - - 80,044
Linda A. Goodspeed 46,833 26,711(1) - - - - 73,544
Carlos Pascual 43,833 26,711(1) - - - - 70,544
Nicholas T. Pinchuk (2) 10,000 9,049 - - - - 19,049
Stephen Rabinowitz 49,333 26,711(1) - - - - 76,044
Timothy T. Tevens (3) - - - - - - -
Ernest R. Verebelyi 108,833 26,711(1) - - - - 135,544
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(1) Represents the amount recognized for financial statement reporting purposes
in accordance with FAS No. 123(R) using the assumptions set forth in the
footnotes to the financial statements in our Annual Report on Form 10-K for
the fiscal year ended March 31, 2007.
(2) Mr. Pinchuk became a member of our Board of Directors in January 2007. His
compensation was prorated over the balance of fiscal 2007 and paid in
fiscal 2008.
(3) Mr. Tevens receives no separate compensation as a Director of the Company.
DIRECTORS' AND OFFICERS' INDEMNIFICATION INSURANCE
Effective April 1, 2007, we placed our directors and officers
indemnification insurance coverage with the Cincinnati Insurance Company, Axis
Reinsurance Company and Federal Insurance Company for a term of one year at a
cost of $248,645. The total insurance coverage is $25,000,000 of "Side A"
coverage and $15,000,000 of "Side B" coverage and "Side C" coverage, with
Cincinnati Insurance Company providing $10,000,000 of each type of coverage,
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Axis Reinsurance Company providing $5,000,000 of each type of coverage and
Federal Insurance Company providing $10,000,000 of "Side A" coverage only. This
insurance provides coverage to our executive officers and directors individually
where exposures exist for which we are unable to provide direct indemnification.
CONTACTING THE BOARD OF DIRECTORS
Our Board of Directors has adopted a written policy regarding
communications with our Board of Directors. A copy of this policy is posted on
the Investor Relations section of the Company's website at WWW.CMWORKS.COM.
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OUR EXECUTIVE OFFICERS
EXECUTIVE OFFICERS
The following table sets forth certain information regarding our executive
officers:
NAME AGE POSITION
---- --- --------
Timothy T. Tevens 51 President, Chief Executive Officer and Director
Derwin R. Gilbreath 59 Vice President and Chief Operating Officer
Karen L. Howard 45 Vice President - Finance and Chief Financial Officer
Wolfgang Wegener 59 Vice President and Managing Director - Columbus McKinnon Europe
Joseph J. Owen 46 Vice President and Hoist Group Leader
Richard A. Steinberg 54 Vice President - Human Resources
Timothy R. Harvey 56 General Counsel and Secretary
------------------
All of our executive 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 Mr.
Tevens is set forth above under "Election of Directors." Recent business
experience of our executive officers who are not also Directors is as follows:
DERWIN R. GILBREATH was elected Vice President and Chief Operating Officer
in February 2005. Mr. Gilbreath has more than thirty years of experience in
industrial operations and management, including as Chief Operating Officer of
the Metalworking Solutions and Services Group of Kennametal, Inc. (NYSE: KMT).
Prior to joining Kennametal in 1994, he served in senior operations management
positions at General Signal Corporation and NL Industries.
KAREN L. HOWARD was elected Vice President in January 1997 and named our
Chief Financial Officer in January 2006 after having served as interim Chief
Financial Officer since August 2005 and Treasurer since August 2004. From
January 1997 to August 2004, Ms. Howard served as Vice President - Controller.
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.
WOLFGANG WEGENER was elected Vice President and Managing Director -
Columbus McKinnon Europe in October 2006. From January 1986 to October 2006, Mr.
Wegener served as Managing Director of Yale Industrial Products GmbH, our German
subsidiary. Prior thereto, he served in various financial management positions
within that company.
JOSEPH J. OWEN was elected Vice President 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.
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RICHARD A. STEINBERG has been employed by us since August 2005, initially
as Director - Human Resources and, since November 2005, as Vice President -
Human Resources. Prior to joining us, Mr. Steinberg was employed by Praxair Inc.
for ten years in various human resources capacities, most recently as a Region
Leader and Human Resource Manager. Prior to joining Praxair in 1995, he held the
positions of Human Resources Manager at Computer Task Group Inc. located in
Buffalo, New York and Organizational Development Leader at The Goodyear Tire and
Rubber Company located in Akron, Ohio.
TIMOTHY R. HARVEY has been with us since 1996, initially serving as Manager
- Legal Affairs until his election as Secretary in October 2003. He also serves
as our General Counsel. Prior to 1996, Mr. Harvey was engaged in the private
practice of law in Buffalo, New York.
COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Succession Committee of the Board of Directors
determines the compensation of our Chief Executive Officer and other executive
officers. This Committee is composed entirely of directors who are neither
executive officers nor employees of our Company. In addition to determining the
salary and bonus compensation for our executive officers, the Compensation and
Succession Committee determines the grants under our Equity Plans and oversees
the administration of other compensation plans and programs.
The Compensation and Succession Committee has reviewed the Compensation
Discussion and Analysis set forth below and has discussed it with management. In
reliance on the reviews and discussions referred to above, the Compensation and
Succession Committee recommended to the Board of Directors (and the Board has
approved) that the Compensation Discussion and Analysis be included in this
proxy statement and in the Annual Report on Form 10-K for the year ended March
31, 2007 for filing with the Securities and Exchange Commission.
June 12, 2007 Stephen Rabinowitz, Chairman
Richard H. Fleming
Carlos Pascual
Nicholas T. Pinchuk*
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*appointed to the Compensation and Succession Committee in March 2007
COMPENSATION DISCUSSION AND ANALYSIS
OVERVIEW. We are a leading manufacturer and marketer of hoists, cranes,
chains, conveyors, material handling systems, lift tables and component parts
serving a wide variety of commercial and industrial end-user markets. Our
strategy is to leverage our superior material handling design and engineering
know-how to provide differentiated products, systems and services to move, lift,
position or secure material. We focus on industrial and commercial applications
with the highest potential for increasing market share in countries that offer
the greatest volume and profit potential.
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The successful execution of our business strategy depends on our ability to
attract, motivate, reward, and retain executive talent with the skills to foster
innovative product and service development and grow the business in developing
markets with the greatest opportunity. Our executive compensation program is
designed to support this strategy by:
o attracting and retaining key executive talent by offering a
competitive compensation program;
o motivating executive actions that lead to sustained performance; and
o aligning executive compensation with returns delivered to
shareholders.
EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES. Our executive
compensation program is administered by the Compensation and Succession
Committee of the Board of Directors (the "Compensation Committee"). In fiscal
2007, the Compensation Committee engaged Mercer Human Resource Consulting, an
international compensation consulting firm, to assist it in performing its
functions. The Compensation Committee was also assisted by internal Company
staff. Our Chief Executive Officer ("CEO") makes recommendations to the
Compensation Committee concerning compensation actions for the named executive
officers in the Summary Compensation Table below ("NEOs") other than the CEO. In
developing these recommendations, the CEO receives assistance from the Vice
President - Human Resources (except in the case of recommendations pertaining to
the Vice President - Human Resources). In determining base salary adjustments
and setting incentive targets for individual compensation elements, the
Compensation Committee and CEO typically refer to market data provided by our
consultant. For the CEO, Chief Financial Officer and Chief Operating Officer,
the Compensation Committee has reviewed market data annually. Market data for
all other executive officer positions has been reviewed every two years. Going
forward, the Compensation Committee expects to review market data for all NEOs
and executive officer positions annually. The Compensation Committee's
composition is described in more detail in this proxy statement under the
section above entitled "Corporate Governance - Compensation and Succession
Committee."
The Compensation Committee has outlined the following program objectives:
1) WE HAVE A COMPREHENSIVE COMPENSATION PROGRAM, CONSISTING OF BASE
SALARY, ANNUAL INCENTIVES, LONG-TERM INCENTIVES AND BENEFITS, THAT SUPPORTS
OUR OBJECTIVE OF PROVIDING SUPERIOR VALUE TO SHAREHOLDERS AND CUSTOMERS.
Compensation opportunity for our executives is based in part on market
practice among a defined group of industrial companies that the Compensation
Committee reviews and approves as an appropriate peer group, in part on the
market practice of a broader population of industrial companies of comparable
size (as indicated in published surveys and databases of executive compensation
data), and in part on our own unique strategic business context. Base salary
provides a competitive level of fixed compensation for performance of core
duties and supports our ability to retain a stable executive team. Our incentive
compensation plans include the Executive Management Variable Compensation Plan
("the Variable Compensation Plan"), which is designed to reward annual
performance relative to annual performance targets, and the 2002 Restricted
Stock Plan (the "Restricted Stock Plan"), the 2002 Incentive Stock Option Plan
(the "ISO Plan"), the 2002 Non-Qualified Stock Option Plan (the "Non-Qualified
Plan") and the 2006 Long Term Incentive Plan (the "Omnibus Plan") which provide
rewards through equity for superior financial performance over intermediate and
long-term periods. Benefit plans are designed to be competitive and responsive
11
to the needs and interests of our employees, but are not a major factor in
differentiating us in the labor market.
2) OUR EXECUTIVE COMPENSATION PROGRAMS ARE DESIGNED TO MOTIVATE AND
REWARD OUR EXECUTIVES FOR SUSTAINED PERFORMANCE THROUGH THE USE OF VARIABLE
COMPENSATION TIED TO SHORT, INTERMEDIATE AND LONG-TERM RESULTS
A significant portion of each executive's target total compensation is
provided through variable compensation. Short-term performance relative to our
business strategy and operating plan is addressed through our Variable
Compensation Plan, which rewards annual performance. Our Restricted Stock Plan,
ISO Plan, Non-Qualified Plan and Omnibus Plan (collectively, the "Equity Plans")
are designed to reward superior long-term performance through equity
compensation. We believe that such long-term incentives foster alignment with
shareholders by providing equity awards the ultimate value of which are based on
our stock price performance over time. Additionally, we incorporate specific
performance criteria into the vesting or granting of awards addressing
short-term and intermediate-term results, which are expected to lead to
sustained financial performance and which establish a threshold to assure that
performance goals are appropriately challenging but achievable with significant
and effective effort.
3) OUR BUSINESS SUCCESS DEPENDS ON OUR ABILITY TO ATTRACT AND RETAIN
EXECUTIVE TALENT THROUGH COMPETITIVE COMPENSATION OPPORTUNITY
Our business is cyclical and highly competitive. In recent years, we have
faced a challenging industrial market. Our business strategy emphasizes
expanding globally into new markets, enhancing our focus on distributors,
heightening our focus on a better understanding of, and better connection with,
our end-user customers, providing and maintaining superior service to both our
distributors and end-user customers, and continuing to control costs through
lean manufacturing and similar improvement disciplines. Our strategy requires
that we attract executive talent with these skills and retain executives who are
critical to operational excellence and maintaining and fostering key customer
relationships. To support our ability to attract and retain talent, we target
total compensation opportunity at the market median (50th percentile) for
industrial companies of similar size with opportunity tempered by executive
skills, experience and individual circumstances. We also incorporate flexibility
into our compensation programs and in the assessment process to respond to, and
adjust for, the evolving business environment and individual circumstances.
Actual compensation is expected to vary based on our performance. We support
retention through vesting schedules associated with long-term incentive awards.
EXECUTIVE COMPENSATION POLICIES AND PRACTICES.
OUR TARGET LABOR MARKET. In administering the executive compensation
-----------------------
program, the Compensation Committee relies on market data provided periodically
by its external consultant based on filings made by peer companies with the
Securities and Exchange Commission. For benchmarking compensation, the
Compensation Committee reviews compensation data for industrial companies of
comparable size, which reflects the types of companies with which we compete for
talent. Here, we use a broader industrial market reference because the number of
direct product and service market competitors is limited. Many of the companies
that provide similar products and services are either privately-held or
headquartered overseas; therefore, executive compensation data may be either
unavailable or of limited applicability to the U.S. labor market in which we
principally compete.
12
Historically, we have used a peer group for benchmarking compensation. In
March 2007, the Compensation Committee altered the peer group to broaden and
better align the peer group with our current business context and strategy. The
revised peer group incorporates companies that we consider primary competitors
for talent, capital, and/or customers. The peers consist of industrial companies
of comparable size to us (generally one-half to twice our size in terms of
revenue), which typically have significant employee populations in
manufacturing, product engineering and sales. In selecting the peers, the
Compensation Committee excluded some companies that fit the above description
but had low relative corporate governance ratings.
In addition, we also consider data from compensation surveys published by
leading compensation firms that are compiled by our consultant. The survey
analysis targets companies of comparable size in the durable goods manufacturing
sector, supplemented with general industry data as needed.
One of our NEOs, Mr. Wolfgang Wegener, lives and works in Germany. The
Compensation Committee considers differences in market practice and currency
exchange rates between the U.S. and Germany in making compensation decisions for
Mr. Wegener. In administering Mr. Wegener's compensation, the Compensation
Committee considers both market practice in Germany as well as internal equity
between Mr. Wegener and our other executive officers.
OUR TARGET PAY MIX. The total compensation package for our executive
------------------
officers consists of base salary, variable compensation, long-term incentives
and benefits. In determining both the target level of compensation and mix of
compensation elements, we consider market practice, business objectives and
expectations of our shareholders.
We have chosen a target mix of base salary, variable compensation and
long-term incentives that generally reflects our peer industrial companies with
actual pay mix varying based on the performance of our Company and of the
individual. Peer company practices will continue to be monitored as one
reference point as we make decisions regarding target pay mix. However, we will
also continue to make strategic decisions based on our unique business
objectives, which may differ from common peer company practices.
While our target pay mix includes significant incentive opportunity,
historically much of our compensation has been delivered in the form of base
salary - due in past years to below target performance, resulting in below
target annual incentive payouts, and longer intervals for granting long-term
incentive opportunities. In recent years, we have moved to strengthen our
pay-for-performance orientation with a higher proportion of compensation
provided through variable pay. We believe the current target pay mix achieves
several important objectives: it supports a strong pay-for-performance culture;
it balances the focus on annual and long-term objectives in support of our
business strategy; it satisfies the need for flexibility to motivate and reward
exceptional performance; and it maximizes tax deductibility of compensation.
13
The approximate current target pay mix for our executive officers is set
forth in the table below. The target pay mix for each NEO is based on current
base salary and targeted annual and long-term incentive multiples as a
percentage of base salary. We established long-term incentive targets for our
executive officers in fiscal 2007 with the adoption of our Omnibus Plan;
however, no awards will be granted under this Plan until fiscal 2008.
VARIABLE
COMPENSATION LONG-TERM
EXECUTIVE OFFICER BASE SALARY PROGRAM INCENTIVES
----------------- ----------- ------- ----------
Timothy T. Tevens, 36% 27% 36%
President and Chief Executive Officer
Derwin R. Gilbreath, 43% 23% 34%
Vice President and Chief Operating Officer
Karen L. Howard, 43% 22% 35%
Vice President - Finance and
Chief Financial Officer
Wolfgang Wegener, 59% 26% 15%
Vice President and Managing Director - Columbus
McKinnon Europe
Joseph J. Owen, 51% 23% 26%
Vice President and Hoist Group Leader
-----------------------
Note: Percentages may not total 100% due to rounding
FACTORS CONSIDERED IN MAKING COMPENSATION DECISIONS. Actual
-----------------------------------------------------------
compensation levels are a function of Company and individual performance as
described under each specific compensation element below. When making pay
decisions, the Compensation Committee considers the competitiveness of
individual elements of compensation as well as the aggregate sum of base salary,
annual incentives and the expected value of long-term incentives (determined at
grant) for an executive officer. Awards are generally prorated if a NEO is
promoted during the year, based on the timing of the promotion. The Compensation
Committee may also consider salary increase history, past bonus awards and past
equity awards as context in understanding year-to-year changes in compensation
and retention effect of prior awards. Under the Variable Compensation Plan and
Long-Term Incentive Program, initial award amounts are determined based on
comparison of actual performance to pre-established criteria. The Compensation
Committee retains the discretion to decrease the size of individual awards in
situations where an executive officer's individual performance falls below
expectations. Final decisions on any major element of compensation, as well as
total compensation for executive officers, are made by the Compensation
Committee or the full Board of Directors.
Programs are generally applied consistently to NEOs. Exceptions related to
CEO compensation are noted throughout this report. In addition, Mr. Wegener's
position is located in Germany, and exceptions related to his compensation are
noted throughout this report.
CHIEF EXECUTIVE OFFICER COMPENSATION. The Compensation Committee
------------------------------------
establishes performance objectives for the CEO based on our annual business plan
and long-term strategic goals approved by the Board of Directors. Progress
against these goals is monitored on a quarterly basis. The Compensation
Committee evaluates the CEO's performance against these goals annually. The
14
Compensation Committee also considers market data provided by our consultant,
comparisons of our performance to our peers, strategic achievements during the
year such as acquisitions and their integration into our business, and internal
assessment of the CEO's performance provided by other members of executive
management. Based on these factors, the Compensation Committee makes
recommendations concerning base salary increases, annual incentive award
payments, targets under the Variable Compensation Plan and awards under the
Long-Term Incentive Program. The Compensation Committee has regularly-scheduled
executive sessions to discuss CEO performance and compensation and other matters
without any executive officers present. All aspects of the CEO's compensation
are approved by our full Board of Directors.
OTHER NAMED EXECUTIVE OFFICER COMPENSATION. The Compensation
------------------------------------------------
Committee approves base salary increases, Variable Compensation Plan targets and
awards under the Long-Term Incentive Program and similar arrangements for the
other NEOs after receiving recommendations from our CEO (with input from the
Vice President - Human Resources). The Compensation Committee makes the final
decision and approves compensation decisions for all NEOs.
COMPONENTS OF COMPENSATION
BASE SALARY. Base salary provides a fixed amount of compensation
------------
necessary to attract and retain key executives and to offset the cyclicality of
our business which can cause fluctuations in variable compensation from year to
year. The Compensation Committee reviews base salaries on an annual basis,
recommends adjustments to the CEO's salary to the Board of Directors, and
approves adjustments for other NEOs. Salary adjustments are based on an
assessment of the individual executive's performance and merit, our goal of
achieving market parity with the salaries of executives in the competitive
market, recognition of promotion or other increases in responsibility, the scope
of the executive's role relative to our other executives, and the general
economic environment impacting the Company. History of salary increases may also
be reviewed and considered. Mid-year adjustments are considered when there is a
significant change in the executive's role or responsibility.
In November 2006, we restructured our European operations under the name
Columbus McKinnon Europe to expand the sale of our complete product portfolio
into European markets. Mr. Wegener was selected to lead the expanded business
unit and was promoted to Vice President. Effective December 1, 2006, Mr.
Wegener's annual base salary was increased to reflect his promotion to Vice
President.
In addition, 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 Spring, these salary ranges are reviewed and may be adjusted to
reflect market conditions, including changes in comparison companies, inflation
and supply and demand in the market. The midpoint of the salary range
corresponds to a "market rate" salary which the Compensation Committee believes
is appropriate for an experienced executive who is performing satisfactorily,
with salaries in excess of the salary range midpoint appropriate for executives
whose performance is deemed superior or outstanding.
15
The Compensation Committee has recommended that any progression 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 segment of our business that such executive
officer oversees, as well as his or her contributions to our overall direction.
Long-term growth in shareholder value is an important factor. The results of
executive officers' performance evaluations, as well as their demonstration and
support of strong ethics and sound corporate governance, form a part of the
basis of the Compensation Committee's decision to approve, at its discretion,
future adjustments in base salaries of our executive officers.
Base salary adjustments for fiscal 2007 for our NEOs are shown below:
FISCAL 2006 FISCAL 2007
EXECUTIVE OFFICER BASE SALARY BASE SALARY
----------------- ----------- -----------
Timothy T. Tevens, $525,000 $550,000
President and Chief Executive Officer
Derwin R. Gilbreath, $300,000 $315,000
Vice President and Chief Operating Officer
Karen L. Howard, $206,000(1) $265,000
Vice President - Finance and
Chief Financial Officer
Wolfgang Wegener, $355,546(2) $373,324(2)
Vice President and Managing Director - Columbus
McKinnon Europe
Joseph J. Owen, $204,000 $211,200
Vice President and Hoist Group Leader
-------------------------------
(1) Ms. Howard's base salary was increased to $265,000 in January 2006 upon her
promotion to Chief Financial Officer.
(2) Mr. Wegener's base salary was increased from (euro)266,626 to (euro)279,958
in December 2006 upon his promotion to Vice President. His base salary
amounts shown in the table above reflect the amounts in euros as of March
31, 2006 and March 31,2007 converted to US dollars using the conversion
rate in effect at March 31, 2007.
EXECUTIVE MANAGEMENT VARIABLE COMPENSATION PLAN. The purpose of the
-----------------------------------------------
Variable Compensation Plan is to attract, motivate, reward, and retain highly
qualified executives on a competitive basis and provide financial incentives
that promote Company success. This Plan is designed to maximize the
deductibility of bonuses paid under the Plan under Section 162(m) of the
Internal Revenue Code which requires annual compensation in excess of $1,000,000
to be performance-based in order to be income tax deductible.
At the beginning of each fiscal year, our Board of Directors establishes
the key measures or "Drivers" for the Variable Compensation Plan. The Variable
Compensation Plan focuses on short-term goals most important to our success over
the fiscal year that are generally within the control of the participants. It is
the policy and ongoing intention of our Board of Directors to establish targeted
performance levels for each Driver as soon as the fiscal year budget is adopted,
which typically is just prior to or just after the start of such fiscal year.
Targeted performance levels are generally set for our Company as a whole, but
may also encompass individual business units, groups, or divisions as
appropriate. Drivers and targeted performance levels are based on the Board of
16
Directors' assessment of our priorities, outlook, current and projected economic
conditions and other pertinent factors, and are intended to be challenging but
achievable with significant and effective effort. The Board of Directors reviews
audited year-end results to determine whether targeted performance levels have
been met. The Board of Directors retains discretion to cap, reduce, or eliminate
payments under the Variable Compensation Plan.
The Board of Directors also determines the weighting to be assigned to each
Driver. For each Driver, goals are set at threshold, target, and maximum levels.
Payouts are determined by multiplying the appropriate weighting by the
percentages outlined in the table below; percentages are prorated when
performance falls between levels. The aggregate payout to any NEO may not exceed
300% of target.
PERCENTAGE OF TARGET
DRIVER PERFORMANCE LEVEL (TO BE MULTIPLIED BY WEIGHT FOR EACH DRIVER)
------------------------ --------------------------------------------
Maximum Performance Level (or higher) 300%
Target Performance Level 100%
Threshold Performance Level 50%
Below Threshold Performance Level 0%
Variable compensation targets for fiscal 2007 are shown below:
VARIABLE COMPENSATION TARGET
EXECUTIVE OFFICER (% OF BASE SALARY)
----------------- ------------------
Timothy T. Tevens,
President and Chief Executive Officer 75%
Derwin R. Gilbreath,
Vice President and Chief Operating Officer 55%
Karen L. Howard,
Vice President - Finance and Chief Financial Officer 50%
Wolfgang Wegener,
Vice President and Managing Director -
Columbus McKinnon Europe 45%
Joseph J. Owen,
Vice President and Hoist Group Leader 45%
At the beginning of fiscal 2007, Mr. Gilbreath's Variable Compensation Plan
target incentive was increased from 45% of base salary to 55% and Ms. Howard's
target was increased from 45% to 50%. These changes were made in order to better
align award opportunity with market practice, recognize the importance of their
roles and increase the proportion of total compensation which is variable based
on performance.
Drivers and associated weightings for fiscal 2007, which were established
by the Board of Directors, for each executive officer are shown below. NEOs with
corporate responsibilities are measured primarily on consolidated results.
Fiscal 2007 Drivers reflected the importance to us in fiscal 2007 of
profitability, growth and efficient usage of capital. NEOs with specific
business unit responsibility are measured on both consolidated and business unit
results. Mr. Tevens, as CEO, has a specific Driver associated with succession
planning given the importance of leadership to our future. This is intended to
encourage and enhance his focus on the development and maintenance of sound
17
succession plans for key management positions as well as on meaningful and
robust leadership development processes.
TIMOTHY T. DERWIN R. KAREN L. WOLFGANG JOSEPH J.
FISCAL 2007 DRIVERS TEVENS GILBREATH HOWARD WEGENER OWEN
------------------- ------ --------- ------ ------- ----
Consolidated Earnings Before
Interest and Taxes 50% 50% 50% 12.5% 25%
Consolidated Sales Growth 10% 20% 20% 5% 10%
Consolidated Working Capital as
a Percentage of Net Sales 10% 15% 15% 3.75% 7.5%
Return on Capital for Chain and
Crane Builders groups 10% 15% 15% 3.75% 7.5%
Succession Planning based on the
Committee's evaluation of
performance relative to
specific, pre-established 20% N/A N/A N/A N/A
objectives
Hoist Business Units N/A N/A N/A N/A 50%
Columbus McKinnon Europe N/A N/A N/A 75% N/A
Drivers for the fiscal 2008 Variable Compensation Plan are the same except
that (i) Consolidated Inventory Turns will replace Consolidated Working Capital
as a Percentage of Net Sales as a Driver for all NEOs, (ii) weightings for
Consolidated Earnings Before Interest and Taxes for Mr. Tevens, Mr. Gilbreath,
Ms. Howard and Mr. Owen will be reduced to 40%, 45%, 45% and 22.5%,
respectively, (iii) weightings for Consolidated Sales Growth for Mr. Tevens, Mr.
Gilbreath, Ms. Howard and Mr. Owen will be increased to 20%, 25%, 25% and 12.5%,
respectively, and (iv) weightings for Mr. Wegener for Consolidated Earnings
Before Interest and Taxes, Consolidated Sales Growth, Consolidated Inventory
Turns, Return on Capital for Chain and Crane Builders groups and Columbus
McKinnon Europe will be 25%, 10%, 7.5%, 7.5% and 50%, respectively.
See the Summary Compensation Table for actual awards for fiscal 2007
performance made to NEOs.
Awards to NEOs are made under the Variable Compensation Plan in order to
maximize deductibility of these amounts for federal income tax purposes under
Section 162(m) of the Internal Revenue Code. The portion of Mr. Tevens' award
that is attributable to succession planning is not expected to meet the
performance-based criteria required by Section 162(m) for income tax
deductibility. However, the Compensation Committee has determined that it is in
our best interest to include succession planning as a criteria for Mr. Tevens
even though that portion of the award may not be deductible.
LONG-TERM INCENTIVES. In fiscal 2006, we began to re-evaluate our
---------------------
long-term incentive strategy to better align long-term incentive awards with our
current business and talent needs, resulting in the establishment of our
Long-Term Incentive Program. This process continued through fiscal 2007 as we
adopted the Omnibus Plan which was approved by shareholders in July 2006. Prior
to this time, we had separate equity plans covering different long-term
18
incentive vehicles - restricted stock, non-qualified stock options, and
incentive stock options. All of our Equity Plans are described below.
The objectives of the new Long-Term Incentive Program are to (i) link
executive compensation and our long-term performance, (ii) better align key
employees with our business strategies and with our shareholders' interests and
(iii) provide opportunity for long-term compensation that is competitive with
peer companies and sufficient to attract and retain executive talent to
effectively manage our business objectives.
In developing target levels for long-term incentive compensation for NEOs
in conjunction with the new equity strategy, the following factors were
considered: (i) a competitive analysis provided by our consultant, (ii) the
impact of roles within our Company and (iii) the cost and share usage associated
with the proposed plan. Target long-term incentives (as a percentage of salary)
are as follows:
LONG-TERM INCENTIVE TARGET
EXECUTIVE OFFICER (% OF BASE SALARY)
----------------- ------------------
Timothy T. Tevens,
President and Chief Executive Officer 100%
Derwin R. Gilbreath,
Vice President and Chief Operating Officer 80%
Karen L. Howard,
Vice President - Finance and Chief Financial Officer 80%
Wolfgang Wegener,
Vice President and Managing Director - Columbus McKinnon
Europe 25%
Joseph J. Owen,
Vice President and Hoist Group Leader 50%
These targets may be adjusted by the Compensation Committee.
The target long-term incentive mix for our NEOs consists of non-qualified
stock options (30% of target value), restricted stock (30% of target value), and
performance shares (40% of target value). Dollar values are converted to share
numbers based on an estimate of expected value at grant.
With the July 2006 approval of the Omnibus Plan, we anticipate regular
grants will occur on an annual basis at the beginning of each fiscal year, if
appropriate, based on Company performance. However, the program was introduced
in the second half of fiscal 2007 in connection with a key strategic planning
initiative. A revenue-based performance target was set for a partial award
reflecting second half fiscal 2007 performance. Since this target was not met,
no grants were made under the program for this period.
Going forward, we expect our program to consist of the following:
STOCK OPTIONS AND RESTRICTED STOCK. Stock options are included to
-------------------------------------
link compensation to stock price appreciation and support our growth objectives.
In order to support retention and align executives with our stock performance
over a longer horizon, options vest 25% annually over four years and remain
exercisable for 10 years from the date of grant.
19
Restricted stock awards are designed to support executive retention and
share ownership. Vesting of restricted stock awards under the Restricted Stock
Plan and the Omnibus Plan is at the discretion of the Compensation Committee,
subject to certain limitations; however, the current practice of the
Compensation Committee is to have such awards vest ratably over three years
beginning on the third anniversary of the date of the award.
Beginning in fiscal 2008, grants of stock options and restricted stock in
the following year (e.g., fiscal 2009) will be determined based on an evaluation
of Return on Invested Capital performance for the fiscal year ended. Awards are
determined in the following manner:
RETURN ON INVESTED CAPITAL GRANT VALUE
PERFORMANCE LEVEL (% OF TARGET)
----------------- -------------
Below Threshold 0%
Threshold 50%
Target 100%
Maximum 150%
Grant levels between threshold and maximum will be interpolated based on
results.
PERFORMANCE SHARES. Grants of performance shares will be made
-------------------
annually beginning in 2008 (with vesting beginning in 2010). Actual vesting of
the awards and their ultimate value will be determined by relative three-year
total shareholder return. Total shareholder return is based on annualized rates
of return reflecting stock price appreciation plus reinvestment of dividends, if
applicable. Performance will be assessed against a broader set of peer companies
than is used for compensation benchmarking in order to (i) reduce the
possibility of distortions in performance within a small group, (ii) better
reflect the companies we compete with for capital and (iii) provide a more
stable peer group over the 3-year measuring period, by reducing the effect of
consolidation and attrition. The peer companies consist of companies that are of
comparable size to us (generally one-half to twice our size in terms of revenue)
and that we consider to be primary competitors for talent, capital, and/or
customers. The performance and payout relationship is illustrated in the table
below:
RELATIVE TOTAL SHAREHOLDER PAYOUT
RETURN PERFORMANCE (% OF TARGET)
------------------ -------------
Below 25th Percentile 0%
25th Percentile 25%
Median 100%
75th Percentile and above 150%
Payout levels between threshold and maximum will be interpolated based on
results.
The long-term incentive strategy is designed to support our business
strategy and the interests of our shareholders. Where possible, the program has
been designed such that long-term incentives can qualify as performance-based
compensation so that the expense associated with the program is fully deductible
for federal income tax purposes. Stock options, restricted stock and performance
shares are expected to qualify as performance-based compensation.
20
STOCK OPTION GRANTING PRACTICES. Historically, we have made periodic stock
option grants to NEOs. No grants were made to NEOs in fiscal 2007; the last
grant was made in fiscal 2005, except for NEOs newly hired or promoted. The
exercise price for any stock option is equal to the fair market value on the
date of grant, which is an average of the opening and closing price on the date
of grant. The date of grant is the date of the Board of Directors meeting at
which the award is approved.
During fiscal 2006 and 2007, Mr. Tevens and Ms. Howard had in place plans
under Rule 10b-5 of the Exchange Act. These plans were established during an
appropriate trading window and allowed for the exercise of options due to expire
as of December 31, 2006. These plans established pre-set stock price thresholds
at which a specific number of options would be exercised, with some of the
shares sold to pay the exercise price and the resulting income tax from such
sales. Our stock reached these pre-set threshold levels in March and April of
2006. The plans have now been fully executed.
RETIREMENT AND DEFERRED COMPENSATION. Retirement benefits provided to NEOs
(other than Mr. Wegener) are the same as those provided to our other full-time,
salaried domestic employees. Retirement programs are designed to provide a
competitive benefit to employees while allowing the Company to manage costs.
The Columbus McKinnon Corporation Monthly Retirement Benefit Plan, a
defined benefit pension plan (the "Pension Plan"), provides an annual benefit at
age 65 equal to the product of (i) 1% of the participant's final average
earnings plus 0.5% of that part, if any, of final average earnings in excess of
social security covered compensation, multiplied by (ii) such participant's
years of credited service, limited to 35 years.
Mr. Wegener is covered by a pension plan sponsored by our German
subsidiary, Yale Industrial Products GmbH. This defined benefit pension plan
provides an annual benefit at age 65 equal to the product of (i) 0.5% of the
highest average annual earnings of five years in succession of the last ten
years prior to retirement, multiplied by (ii) credited years of service prior to
age 65.
We also maintain a 401(k) retirement savings plan covering non-union
domestic employees. Highly compensated employees may contribute up to 7% of
annual cash compensation (base salary and payments under the Variable
Compensation Plan) subject to IRS limits. We match 50% of the employee's
contribution up to 3% of salary.
We maintain an Employee Stock Ownership Plan for the benefit of our
domestic, non-union employees including our domestic NEOS. This Plan is
considered a retirement benefit by the Company in conjunction with its defined
benefit pension and 401(k) retirement savings plan.
We do not have a non-qualified retirement or deferred compensation plan in
place at this time. However, the Compensation Committee is considering the
establishment of a deferred compensation plan in fiscal 2008 under which
eligible participants (including our Directors and domestic NEOs) may elect to
defer a portion of their compensation.
OTHER BENEFITS AND PERQUISITES. We provide very limited perquisites and
other compensation to our NEOs. Instead, as previously discussed, we have
elected to provide competitive fixed compensation through salary and benefits
with opportunity for additional compensation through variable compensation based
on Company performance.
21
NEOs may participate in benefit plans that are offered generally to
salaried domestic employees such as those described above, as well as short and
long-term disability, life insurance, health and welfare benefits, and paid time
off.
Because the market for executive talent is national, and in some cases,
global, we may recruit from outside of the regional area in order to obtain top
talent. We may elect to pay relocation costs for full-time employees who are
required to relocate in connection with their employment (including NEOs) to
minimize any financial detriment to the employee. In situations where we pay
relocation cost, we may also provide a payment to cover the cost of any
additional taxes the employee incurs as a result of the reimbursement (a
gross-up payment). See the Summary Compensation Table for amounts provided to
Mr. Gilbreath in connection with his relocation.
Mr. Wegener is employed in Germany and receives government benefits
including health care, pension and unemployment insurance, for which we provide
mandatory contributions. Mr. Wegener is also covered by workers' compensation
insurance, for which we make contributions on his behalf. Mr. Wegener is also
entitled to the use of an automobile for business purposes.
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENTS.
EMPLOYMENT AGREEMENTS. With the exception of Mr. Wegener, the Company
---------------------
has no employment agreements with its NEOs, but does provide these other NEOs
with eligibility for severance benefits under our general severance policy.
Mr. Wegener's agreement, entered into in 1996, does not have a fixed term
and may be terminated by either party upon delivering written notice at least
six months prior to the end of a calendar quarter. Mr. Wegener's base salary is
reviewed and may be adjusted annually. Mr. Wegener also participates in our
Variable Compensation Plan and Long-Term Incentive Program.
Mr. Wegener's agreement contains various restrictive covenants relating to
the protection of confidential information and non-disclosure.
CHANGE IN CONTROL AGREEMENTS. We have entered into change in control
----------------------------
agreements with Messrs. Tevens and Gilbreath, Ms. Howard and Mr. Owen and
certain other of our officers and employees. The intent of these agreements is
to provide executive officers with financial security in the event of a
change-of-control to facilitate a transaction which may benefit shareholders but
result in job loss to executives. 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 NEOs (other than Mr. Wegener) 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 the 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 Variable Compensation Plan in effect on the date of termination and
(2) the annual target bonus under the Variable Compensation Plan in effect
immediately prior to the change in control, (ii) continued coverage for 36
months under our medical and life insurance plans, (iii) 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
22
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 these agreements
include (i) the acquisition of 20% or more of our outstanding common stock by
certain persons, (ii) certain changes in the membership of 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.
Under the Equity Plans, vesting of equity awards is generally not
accelerated upon a change-in-control unless the executive experiences a covered
termination. Change in control benefits are provided only upon a covered
termination in order to support and promote shareholder interests by limiting
cost of these agreements and providing a potential retention vehicle. Severance
benefits payable upon a change in control are also limited to the amount that is
fully tax deductible to us, which limits our cost.
TAX AND ACCOUNTING CONSIDERATIONS. The Compensation Committee has
considered the implications of Section 162(m) of the Internal Revenue Code in
making decisions concerning compensation design and administration. The
Compensation Committee views tax deductibility as an important consideration and
intends to maintain deductibility wherever possible, but also believes that our
business needs should be the overriding factor of compensation design.
Therefore, the Compensation Committee believes it is important to maintain
flexibility and has not adopted a policy requiring that specific programs meet
the requirements of performance-based compensation under Section 162(m). The
Committee also considers tax implications for executives and structures its
compensation programs to comply with Section 409A of the Internal Revenue Code.
Accounting and cost implications of compensation programs are considered in
program design; however, the main factor is alignment with our business needs.
INCENTIVE PLANS
2006 LONG TERM INCENTIVE PLAN. In May 2006, we adopted the Omnibus Plan and
reserved, subject to certain adjustments, an aggregate of 850,000 shares of our
common stock for issuance thereunder. The Omnibus Plan was approved by our
shareholders in July 2006 at our 2006 Annual Meeting. Under the terms of Omnibus
Plan, incentive stock options, non-qualified stock options, stock appreciation
rights, restricted stock, restricted stock units and stock bonuses may be
granted by our Compensation Committee to our officers and other key employees as
well as to non-employee directors. In fiscal 2007, we granted 9,390 shares of
our common stock and 7,200 restricted stock units under the Omnibus Plan.
NON-QUALIFIED STOCK OPTION PLAN. In October 1995, we adopted the
Non-Qualified Plan and reserved, subject to certain adjustments, an aggregate of
250,000 shares of our common stock for issuance thereunder. Under the terms of
the Non-Qualified Plan, which was amended in 1999, options may be granted by our
Compensation Committee to our officers and other key employees as well as to
non-employee directors and advisors. In fiscal 2007, we granted options to
purchase 10,000 shares of our common stock under the Non-Qualified Plan. There
are 63,320 shares remaining for future issuance under the Non-Qualified Plan. We
plan to utilize these available shares in connection with future option grants
where appropriate.
INCENTIVE STOCK OPTION PLAN. Our ISO Plan, which was adopted in October
1995 and amended in 2002, authorizes our Compensation Committee to grant to our
officers and other key employees stock options that are intended to qualify as
"incentive stock options" within the meaning of Section 422 of the Internal
23
Revenue Code. The ISO Plan reserved, subject to certain adjustments, an
aggregate of 1,750,000 shares of common stock to be issued thereunder. Options
granted under the ISO 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 2007, we
granted options to purchase 60,000 shares of our common stock under the ISO.
There are 69,280 shares remaining for future issuance under the ISO Plan. We
plan to utilize these available shares in connection with future option grants
where appropriate.
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 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 2007, we did not grant any restricted stock awards under
the Restricted Stock Plan. There are 48,000 shares remaining for future issuance
under the Restricted Stock Plan. We plan to utilize these available shares in
connection with future awards where appropriate.
EXECUTIVE MANAGEMENT VARIABLE COMPENSATION PLAN. In 2006, we adopted our
Variable Compensation Plan to replace our previous corporate incentive plan and
to pay covered employees appropriate bonuses for their performance and to
obtain, for federal income tax purposes, the deductibility of bonus awards made
under this Plan. Accordingly, the amounts payable under this Plan are intended
to constitute "qualified performance-based compensation" under Section 162(m) of
the Internal Revenue Code. Our executive officers and certain of our managers
are eligible to participate in the Executive Management Variable Compensation
Plan. Under this Plan, for each fiscal year, the objective performance goal(s)
for each participant is set by the Compensation Committee within the first 90
days of the fiscal year. The performance goals will relate to one or more
business criteria within the meaning of Section 162(m) of the Internal Revenue
Code, but limited to: net earnings (either before or after interest, taxes,
depreciation and amortization), economic value-added (as determined by the
Compensation and Succession Committee), sales or revenue, net income (either
before or after taxes), operating earnings or income, cash flow (including, but
not limited to, operating cash flow and free cash flow), cash flow return on
capital, return on investment, return on shareholders' equity, return on assets
or net assets, return on capital, debt reduction, stockholder returns, return on
sales, gross or net profit margin, productivity, expense, margins, operating
efficiency, cost reduction or savings, customer or employee satisfaction,
safety, working capital, earnings or diluted earnings per share, price per share
of our common stock, and market share, any of which may be measured either in
absolute terms or as compared to any incremental increase or as compared to
results of a peer group. After the end of each fiscal year, the Compensation
Committee will determine and certify in writing the amount of bonus to be
24
awarded to each participant in accordance with the limitations established by
the Plan, which bonus will be paid in cash.
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 (7% 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 contributions, as such term is defined in the 401(k) Plan. Our
matching contributions are limited to the first 3.0% of the employee's base pay
and vest at the rate of 20% per year.
25
SUMMARY COMPENSATION TABLE
The following table sets forth the cash compensation as well as certain
other compensation earned during the year ended March 31, 2007, for the
Company's Chief Executive Officer, Chief Financial Officer and each of its three
other most highly compensated executive officers who received annual
compensation in excess of $100,000:
CHANGE IN PENSION
NON-EQUITY VALUE AND
NAME AND PRINCIPAL FISCAL STOCK OPTION INCENTIVE PLAN NON-QUALIFIED DEFERRED ALL OTHER
POSITION YEAR SALARY BONUS AWARD AWARDS(1) COMPENSATION(2) COMPENSATION EARNINGS COMPENSATION TOTAL
-------- ---- ------ ----- ----- --------- --------------- --------------------- ------------ -----
Timothy T. Tevens, 2007 $550,000 $- $- $91,875 $401,198 $37,432(3) $10,357(4) $1,090,862
President and
Chief Executive
Officer
Derwin R. 2007 315,000 - - 84,375 149,030 18,191(3) 222,037(4) 788,633
Gilbreath,
Vice President and
Chief Operating
Officer
Karen L. Howard, 2007 265,000 - - 14,700 113,977 24,252(3) 10,090(4) 428,019
Vice President -
Finance and Chief
Financial Officer
Wolfgang Wegener, 2007 359,332(5) - - 150,338 336,447 661,296(6) - 1,507,413
Vice President and
Managing Director -
Columbus McKinnon
Europe
Joseph J. Owen, 2007 211,200 - - 22,050 94,764 21,033(3) 10,090(4) 359,137
Vice President and
Hoist Group Leader
------------------------------------
(1) Represents the amount recognized for financial statement reporting purposes
in accordance with FAS No. 123(R) using the assumptions set forth in the
footnotes to the financial statements in our Annual Report on Form 10-K for
the fiscal year ended March 31, 2007. These values include expense for
option awards granted prior to fiscal 2007, all or a portion of which
vested in fiscal 2007.
(2) Represents awards under the Variable Compensation Plan earned in fiscal
2007 and paid in fiscal 2008.
(3) Represents the aggregate increase in actuarial value under the Columbus
McKinnon Corporation Monthly Retirement Benefit Plan from December 31, 2005
to December 31, 2006.
(4) Consists of: (i) the value of shares of common stock allocated in fiscal
2007 under our Employee Stock Ownership Plan, or ESOP, to accounts for
Messrs. Tevens and Gilbreath, Ms. Howard and Mr. Owen in the amount of
$3,370 each, (ii) premiums for group term life insurance policies insuring
the lives of Messrs. Tevens and Gilbreath, Ms. Howard and Mr. Owen in the
amount of $120 each and (iii) our matching contributions under our 401(k)
plan for Messrs. Tevens and Gilbreath, Ms. Howard and Mr. Owen in the
amount of $6,600 each. The amount reflected for Mr. Tevens also includes a
service award of $267, and the amount reflected for Mr. Gilbreath reflects
reimbursement of relocation expenses in the amount of $136,499 and (ii) a
tax gross up on such reimbursement of $75,448.
(5) Represents payments to Mr. Wegener of (euro)269,465, as converted based on
the conversion rate in effect on March 31, 2007.
(6) Represents the aggregate increase in actuarial value under the Yale
Industrial Products GmbH Pension Plan from March 31, 2006 to March 31, 2007
of (euro)495,910, as converted based on the conversion rate in effect on
March 31, 2007.
26
GRANTS OF PLAN-BASED AWARDS
The following table sets forth information with respect to plan-based
awards granted in fiscal 2007 to the executives named in the summary
compensation table.
ALL
OTHER
STOCK ALL
AWARDS: OTHER
NUMBER OPTION EXERCISE GRANT
OF AWARDS: OR BASE DATE FAIR
SHARES NUMBER PRICE OF VALUE
OF OF OPTION OF STOCK
ESTIMATED FUTURE ESTIMATED FUTURE STOCK SECURITIES AWARDS AND
PAYOUTS UNDER NON- PAYOUTS UNDER OR UNDERLYING PER OPTION
NAME GRANT DATE EQUITY INCENTIVE PLAN AWARDS(1) EQUITY INCENTIVE PLAN AWARDS UNITS OPTIONS SHARE AWARDS(2)
---- ---------- ------------------------------- ---------------------------- ----- ------- ----- ---------
THRESHOLD TARGET MAXIMUM THRESHOLD TARGET MAXIMUM
--------- ------ ------- --------- ------ -------
Timothy T. Tevens, 4/1/06 $206,250 $412,500 $1,237,500 $- $- $- - - $- $-
President and Chief
Executive
Officer
Derwin R. 4/1/06 86,625 173,250 519,750 - - - - - - -
Gilbreath,
Vice President and
Chief Operating
Officer
Karen L. Howard, 4/1/06 66,250 132,500 397,500 - - - - - - -
Vice President -
Finance and Chief
Financial Officer
Wolfgang Wegener, 4/1/06 81,331 162,662 487,987 - - - - 10,000(3) $20.86 119,100
Vice President and
Managing Director -
Columbus McKinnon
Europe
Joseph J. Owen, 4/1/06 47,520 95,040 285,120 - - - - - - -
Vice President and
Hoist Group Leader
-------------------
(1) Represents the potential payout range under the Variable Compensation Plan
discussed above. The final fiscal 2007 payout can be found in the Summary
Compensation Table in the column entitled "Non-Equity Incentive Plan
Compensation."
(2) Reflects the aggregate grant date fair value of the equity awards as
determined under FAS No. 123(R).
(3) Represents options issued under the Non-Qualified Plan. The options have a
ten year term and vest ratably over a four-year period.
27
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth information with respect to the executives
named in the summary compensation table relating to unexercised stock options,
stock that has not vested, and equity incentive plan awards outstanding as of
March 31, 2007:
OPTION AWARDS STOCK AWARDS
------------- ------------
EQUITY
EQUITY INCENTIVE
INCENTIVE PLAN AWARDS:
EQUITY PLAN AWARDS: MARKET OR
INCENTIVE PLAN NUMBER OF PAYOUT VALUE
NUMBER OF NUMBER OF AWARDS: NUMBER NUMBER OF MARKET VALUE UNEARNED OF UNEARNED
SECURITIES SECURITIES OF SECURITIES SHARES OR OF SHARES OR SHARES, SHARES,
UNDERLYING UNDERLYING UNDERLYING UNITS OF UNITS OF UNITS OR UNITS OR
UNEXERCISED UNEXERCISED UNEXERCISED OPTION OPTION STOCK THAT STOCK THAT OTHER RIGHTS OTHER RIGHTS
OPTIONS OPTIONS UNEARNED EXERCISE EXPIRATION HAVE NOT HAVE NOT THAT HAVE THAT HAVE
NAME EXERCISABLE UNEXERCISABLE OPTIONS PRICE DATE VESTED VESTED NOT VESTED NOT VESTED
---- ----------- ------------- ------- ----- ---- ------ ------ ---------- ----------
Timothy T. Tevens, 23,810(1) - - $20.60 4/1/09 - - - -
President and Chief 30,190(1) - 20.60 4/1/09
Executive Officer 38,620(2) - 10.00 8/20/11
21,380(2) - 10.00 8/20/11
62,500(3) 62,500 5.46 5/17/14
Derwin R. 22,500(4) 22,500 - 13.91 3/29/15 - - - -
Gilbreath,
Vice President and
Chief Operating
Officer
Karen L. Howard, 22,345(1) - - $20.60 4/1/09 - - - -
Vice President - 13,655(1) - 20.60 4/1/09
Finance and Chief 40,500(2) - 10.00 8/20/11
Financial Officer 4,500(2) - 10.00 8/20/11
10,000(3) 10,000 5.46 5/17/14
Wolfgang Wegener, 1,000(5) - - 29.00 6/1/08 - - - -
Vice President and 18,000(1) - 20.60 4/1/09
Managing Director - 15,000(2) - 10.00 8/20/11
Columbus McKinnon 5,000(3) 10,000 5.46 5/17/14
Europe - 10,000(6) 20.86 10/17/16
Joseph J. Owen, 1,000(5) - - 29.00 6/1/08 - - - -
Vice President and 18,000(1) - 20.60 4/1/09
Hoist Group Leader 22,500(2) - 10.00 8/20/11
7,500(3) 15,000 5.46 5/17/14
---------------------
(1) These options were granted on April 1, 1999 and vest ratably over a
four-year period, beginning April 1, 2000.
(2) These options were granted on August 20, 2001 and vest ratably over a
four-year period, beginning August 1, 2002.
(3) These options were granted on May 17, 2004 and vest ratably over a
four-year period, beginning May 17, 2005.
(4) These options were granted on March 29, 2005 and vest ratably over a
four-year period, beginning March 29, 2006.
(5) These options were granted on June 1, 1998 and vest ratably over a
four-year period, beginning June 1, 1999.
(6) These options were granted on October 17, 2006 and vest ratably over a
four-year period, beginning October 17, 2007.
28
OPTIONS EXERCISED AND STOCK VESTED
The following table sets forth information with respect to the executives
named in the summary compensation table relating to the exercise of stock
options, stock appreciation rights and similar rights, and the vesting of stock
in connection therewith, in fiscal 2007:
OPTION AWARDS STOCK AWARDS
------------- ------------
NUMBER OF SHARES VALUE REALIZED ON NUMBER OF SHARES ACQUIRED VALUE REALIZED
NAME ACQUIRED ON EXERCISE EXERCISE(1) ON VESTING ON VESTING
---- -------------------- ----------- ---------- ----------
Timothy T. Tevens, President 39,147 $498,539 - -
and Chief Executive Officer
Derwin R. Gilbreath, - - - -
Vice President and
Chief Operating Officer
Karen L. Howard, 38,833 495,358 - -
Vice President - Finance and
Chief Financial Officer
Wolfgang Wegener, - - - -
Vice President and Managing
Director - Columbus McKinnon
Europe
Joseph J. Owen, 7,500 142,500 - -
Vice President and Hoist
Group Leader
--------------------
(1) Represents the difference between the option exercise price and the average
of the high and low prices of our common stock on the date of exercise as
quoted on Nasdaq.
PENSION PLAN
We have a non-contributory, defined benefit Pension Plan which provides
certain of our domestic 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.
As discussed above, Mr. Wegener is covered by a pension plan sponsored by
our German subsidiary, Yale Industrial Products GmbH. This defined benefit
pension plan provides an annual benefit at age 65 equal to the product of (i)
0.5% of the highest average annual earnings of five years in succession of the
last ten years prior to retirement, multiplied by (ii) credited years of service
prior to age 65.
29
The following table sets forth with respect to each of our plans that
provides retirement benefits to our NEOs, (i) the years of credited service of
each of the executives named in the summary compensation table, (ii) the present
value of his or her accumulated benefit and (iii) payments received by him or
her during fiscal 2007:
NUMBER OF YEARS OF PRESENT VALUE OF PAYMENTS DURING
NAME PLAN NAME CREDITED SERVICE(1) ACCUMULATED BENEFIT LAST FISCAL YEAR
---- --------- ----------------- ------------------- ----------------
Timothy T. Tevens, President Columbus McKinnon 14.67 $225,741(2) -
and Chief Executive Officer Corporation Monthly
Retirement Benefit Plan
Derwin R. Gilbreath, Columbus McKinnon 0.83 18,191(2) -
Vice President and Chief Corporation Monthly
Operating Officer Retirement Benefit Plan
Karen L. Howard, Columbus McKinnon 10.50 122,188(2) -
Vice President - Finance and Corporation Monthly
Chief Financial Officer Retirement Benefit Plan
Wolfgang Wegener, Yale Industrial Products 29.42 2,575,994(3) -
Vice President and Managing GmbH Pension Plan
Director - Columbus McKinnon
Europe
Joseph J. Owen, Columbus McKinnon 8.67 100,644(2) -
Vice President and Hoist Group Corporation Monthly
Leader Retirement Benefit Plan
--------------------
(1) Years of accredited service is determined as of December 31, 2006.
(2) The present value of accumulated benefit under the Columbus McKinnon
Corporation Monthly Benefit Plan is calculated as of December 31, 2006
using (i) a discount rate of 6.00%, (ii) the GAM 1994 Group Annuity Table
for Males and Females and (iii) the earliest retirement age at which
benefits are not reduced (typically, age 65).
(3) The present value of accumulated benefit under the Yale Industrial Products
GmbH Pension Plan is calculated as of March 31, 2007 using (i) a discount
rate of 4.75%, (ii) the Richttafeln 2005G by Klaus Heubeck Mortality Table,
(iii) the retirement age under German social security legislation and (iv)
the euro to dollar conversion rate in effect on March 31, 2007.
NON-QUALIFIED DEFERRED COMPENSATION
We do not have any non-qualified defined contribution or other plan that
provides for the deferral of compensation. However, the Compensation Committee
is considering the establishment of a deferred compensation plan in fiscal 2008
under which eligible participants (including our directors and domestic NEOs)
may elect to defer a portion of their compensation.
OTHER POTENTIAL POST-EMPLOYMENT PAYMENTS
It is our policy to provide severance benefits to each of our domestic
full-time salaried employees and hourly employees not covered by a collective
30
bargaining agreement who involuntarily lose their positions without cause.
Eligible employees who sign a release generally receive (i) one week of base
salary at the rate then in effect for each full year of continuous service (with
any fractions being rounded up) and (ii) continuation of medical, dental and
life insurance benefits for the severance period.
The following table sets forth the amount each NEO would receive under
various termination scenarios described above using the following assumptions:
o Termination of employment on March 31, 2007; and
o Exercise of all options and vesting of all restricted stock based on
the closing market price of $22.39 per share of our common stock on
March 31, 2007.
TERMINATION IN
VOLUNTARY INVOLUNTARY CONNECTION WITH
NAME TERMINATION RETIREMENT(2) TERMINATION CHANGE IN CONTROL DEATH
---- ----------- ---------- ----------- ----------------- -----
Timothy T. Tevens, $1,937,320(1) $2,338,918(2) $2,510,262(3) $5,576,163(4) $2,388,518(5)
President and Chief
Executive Officer
Derwin R. Gilbreath, 220,482(1) 369,912(2) 388,157(3) 1,846,453(4) 419,512(5)
Vice President and Chief
Operating Officer
Karen L. Howard, 814,732(1) 929,109(2) 991,747(3) 2,122,419(4) 978,709(5)
Vice President - Finance
and Chief Financial
Officer
Wolfgang Wegener, 345,045(7) 681,492(8) 1,759,362(9) 1,759,362(10) 681,492(11)
Vice President and
Managing Director -
Columbus McKinnon
Europe(6)
Joseph J. Owen, 458,684(1) 553,848(2) 596,883(3) 1,769,565(4) 603,448(5)
Vice President and Hoist
Group Leader
---------------
(1) Includes (i) the value of vested stock options and (ii) accrued vacation
through the date of termination. In addition, each NEO would be entitled to
receive (i) accrued salary through the date of termination, (ii) the vested
portion of his or her 401(k) Plan account and (iii) benefits under the
Pension Plan (assuming such NEO is vested and eligible to retire).
Generally, employees who voluntarily terminate their employment are not
eligible to receive an award under the Variable Compensation Plan earned in
fiscal 2007 if they are not continuously employed through the date of
payment.
(2) Includes (i) the value of vested stock options, (ii) awards under the
Variable Compensation Plan earned in fiscal 2007 and paid in fiscal 2008,
(iii) accrued vacation through the date of termination and (iv) a company
retirement gift. In addition, each NEO would be entitled to receive (i)
accrued salary through the date of termination, (ii) the vested portion of
his or her 401(k) Plan account, (iii) benefits under the Pension Plan
(assuming such NEO is vested and eligible to retire) and (iv) vested
benefits under our ESOP.
(3) Includes (i) severance (including medical, dental and life insurance
continuation benefits under our severance policy), (ii) the value of vested
stock options, (iv) awards under the Variable Compensation Plan earned in
fiscal 2007 and paid in fiscal 2008 and (iii) accrued vacation through the
date of termination. In addition, each NEO would be entitled to receive (i)
accrued salary through the date of termination, (ii) the vested portion of
31
his or her 401(k) Plan account and (iii) benefits under the Pension Plan
(assuming such NEO is vested and eligible to retire).
(4) Includes (i) termination payments under the change in control agreements
(up to the maximum permitted), (ii) medical, dental and life insurance
continuation benefits, (iii) the value of vested stock options and (iv)
accrued vacation through the date of termination. In addition, each NEO
would be entitled to receive (i) accrued salary through the date of
termination, (ii) the vested portion of his or her 401(k) Plan account and
(iii) benefits under the Pension Plan (assuming such NEO is vested and
eligible to retire).
(5) Includes (i) group term life insurance benefits, (ii) the value of vested
stock options, (iii) awards under the Variable Compensation Plan earned in
fiscal 2007 and paid in fiscal 2008 and (iv) accrued vacation through the
date of termination. In addition, each NEO would be entitled to receive (i)
accrued salary through the date of termination, (ii) the vested portion of
his or her 401(k) Plan account, (iii) benefits under the Pension Plan to
his or her spouse (assuming such NEO is vested and eligible to retire) and
(iv) vested benefits under our ESOP. Under our group term life insurance
plan, all domestic full-time salaried employees and hourly employees are
entitled to a death benefit equal to one times their annual base salary,
with a minimum benefit of $25,000 and a maximum benefit of $50,000.
(6) As a non-domestic employee, Mr. Wegener is not a participant in our Pension
Plan, 401(k) Plan, group term life insurance plan or medical plans.
(7) Represents the value of vested stock options. In addition, Mr. Wegener
would be entitled to receive (i) accrued salary through the date of
termination and (ii) benefits under the Yale Industrial Products GmbH
Pension Plan (assuming he is eligible to retire). Generally, employees who
voluntarily terminate their employment are not eligible to receive an award
under the Variable Compensation Plan earned in fiscal 2007 if they are not
continuously employed through the date of payment.
(8) Includes (i) the value of vested stock options and (ii) awards under the
Variable Compensation Plan earned in fiscal 2007 and paid in fiscal 2008.
In addition, Mr. Wegener would be entitled to receive (i) accrued salary
through the date of termination and (ii) benefits under the Yale Industrial
Products GmbH Pension Plan (assuming he is eligible to retire).
(9) Includes (i) severance, (ii) the value of vested stock options and (iii)
awards under the Variable Compensation Plan earned in fiscal 2007 and paid
in fiscal 2008. In addition, Mr. Wegener would be entitled to receive (i)
accrued salary through the date of termination and (ii) benefits under the
Yale Industrial Products GmbH Pension Plan (assuming he is eligible to
retire).
(10) Mr. Wegener is not subject to in a change in control agreement. The
benefits he would receive following a termination of employment following a
change in control would be the same as he would receive following an
involuntary termination of employment.
(11) Includes (i) death benefits under the Yale Industrial Products GmbH Pension
Plan, (ii) the value of vested stock options and (iii) awards under the
Variable Compensation Plan earned in fiscal 2007 and paid in fiscal 2008.
32
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, 2007, including the
Restricted Stock Plan, Omnibus Plan, Non-Qualified Plan and ISO 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 FIRST COLUMN)
------------- ------------------- ------------------- --------------------------
Equity compensation plans 931,150 $12.28 1,014,010
approved by security holders
Equity compensation plans not - - -
approved by security holders
-------- ------- ---------
Total 931,150 $12.28 1,014,010
RELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee retained Ernst & Young LLP to audit our consolidated
financial statements for fiscal 2007. All services provided on our behalf by
Ernst & Young LLP during fiscal 2006 and 2007 were approved in advance by our
Audit Committee. The aggregate fees billed to us by Ernst & Young LLP for fiscal
2006 and 2007 are as follows:
FISCAL YEAR
-----------
2007 2006
---- ----
($ in thousands)
Audit Fees.................................. $818 $1,007
Audit Related Fees.......................... 117 89
Tax Fees.................................... 152 130
All Other Fees.............................. 0 2
------ ------
Total.............................. $1,087 $1,228
====== ======
Our Audit Committee has selected Ernst & Young LLP, independent certified
public accountants, to act as our independent auditors for fiscal 2008. We
expect that a representative of Ernst & Young LLP will attend the Annual
Meeting, and the representative will have an opportunity to make a statement if
he or she so desires. The representative will also be available to respond to
appropriate questions from shareholders.
33
REPORT OF THE AUDIT COMMITTEE
REVIEW OF OUR AUDITED FINANCIAL STATEMENTS
Our Audit Committee is comprised of the Directors named below, each of whom
is independent as defined under Section 10A(m)(3) of the Exchange Act and under
the Nasdaq Stock Market, LLC listing standards currently in effect. In addition,
pursuant to the requirements of Section 407 of the Sarbanes-Oxley Act of 2002,
our Board of Directors has determined that each of Messrs. Fleming and Creek
qualifies as an "audit committee financial expert."
The Audit Committee operates under a written charter which includes
provisions requiring Audit Committee advance approval of all audit and non-audit
services to be provided by independent public accountants. However, as a matter
of course, we will not engage any outside accountants to perform any audit or
non-audit services without the prior approval of the Audit Committee.
The Audit Committee has reviewed and discussed our audited financial
statements for the year ended March 31, 2007 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, 2007 for
filing with the Securities and Exchange Commission.
Richard H. Fleming, Chairman
Wallace W. Creek
Stephen Rabinowitz
Linda A. Goodspeed
34
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Succession Committee is composed of Carlos Pascual,
Richard H. Fleming, Stephen Rabinowitz, and Nicholas T. Pinchuk, each an
independent Director. No interlocking relationship exists between any member of
our Compensation and Succession Committee or any of our executive officers and
any member of any other company's board of directors or compensation committee
(or equivalent), nor has any such relationship existed in the past. No member of
our Compensation and Succession Committee was, during fiscal 2007 or prior
thereto, an officer or employee of our Company or any of our subsidiaries.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act 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 executive 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, 2007 all Section 16(a) filing
requirements applicable to our executive officers, Directors and greater than
10% beneficial owners were complied with, except Mr. Pinchuk was two days late
in filing his initial statement of beneficial ownership on Form 3.
35
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of March 31, 2007
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 executive officers named in the Summary
Compensation Table 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
--------------------------------------- ---------- --------
Ernest R. Verebelyi (2) 2,565 *
Timothy T. Tevens (2)(3) 263,315 1.40%
Carlos Pascual (2) 11,565 *
Richard H. Fleming (2) 8,069 *
Wallace W. Creek (2) 10,065 *
Stephen Rabinowitz (2) 3,065 *
Linda A. Goodspeed (2) 4,115 *
Nicholas T. Pinchuk(2) 0
Karen L. Howard (2)(4) 136,380 *
Derwin R. Gilbreath (2)(5) 22,650 *
Wolfgang Wegener (2)(6) 44,000 *
Joseph J. Owen (2)(7) 69,027 *
All Directors and Executive Officers as a
Group (14 persons) (8) 594,551 3.16%
Columbus McKinnon Corporation Employee Stock
Ownership Plan (2) 908,430 4.83%
Jeffrey L. Gendell (9) 1,505,711 8.00%
AXA Financial, Inc. (10) 945,425 5.02%
Wells Fargo & Company (11) 1,090,625 5.79%
Fidelity Management & Research Company (12) 1,337,630 7.11%
Artisan Partners LP (13) 1,781,300 9.46%
--------------------
* 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 shareholder, 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) 43,326 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) 5,189 shares of
common stock allocated to Mr. Tevens' ESOP account and (v) 207,750 shares
of common stock issuable under options granted to Mr. Tevens which are
exercisable within 60 days. Excludes 31,250 shares of common stock issuable
under options granted to Mr. Tevens which are not exercisable within 60
days.
(4) Includes (i) 38,168 shares of common stock owned directly, (ii) 2,212
shares allocated to Ms. Howard's ESOP account and (iii) 96,000 shares of
common stock issuable under options granted to Ms. Howard which are
exercisable within 60 days. Excludes (i) 906,218 additional shares of
common stock owned by the ESOP for which Ms. Howard serves as one of three
trustees and for which she disclaims any beneficial ownership and (ii)
5,000 shares of common stock issuable under options granted to Ms. Howard
which are not exercisable within 60 days.
36
(5) Includes (i) 22,500 shares of common stock issuable under options granted
to Mr. Gilbreath which are exercisable within 60 days and (ii) 150 shares
of common stock allocated to Mr. Gilbreath's ESOP account. Excludes 22,500
shares of common stock issuable under options granted to Mr. Gilbreath
which are not exercisable within 60 days.
(6) Includes 44,000 shares of common stock issuable under options granted to
Mr. Wegener which are exercisable within 60 days. Excludes 15,000 shares of
common stock issuable under options granted to Mr. Wegener which are not
exercisable within 60 days.
(7) Includes (i) 9,644 shares of common stock owned directly, (ii) 1,556 shares
of common stock allocated to Mr. Owen's ESOP account, (iii) 1,327 shares of
common stock owned by Mr. Owen's spouse, and (iv) 56,500 shares of common
stock issuable under options granted to Mr. Owen which are exercisable
within 60 days. Excludes 7,500 shares of common stock issuable under
options granted to Mr. Owen which are not exercisable within 60 days.
(8) Includes (i) options to purchase an aggregate of 449,250 shares of common
stock issuable to certain executive officers which are exercisable within
60 days. Excludes the shares of common stock owned by the ESOP as to which
Ms. Howard, Mr. Harvey and Mr. Steinberg serve as trustees, except for an
aggregate of 10,342 shares allocated to the respective ESOP accounts of our
executive officers and (ii) options to purchase an aggregate of 121,250
shares of common stock issued to certain executive officers which are not
exercisable within 60 days.
(9) Information with respect to Jeffrey L. Gendell is based on a Schedule 13G/A
filed with the Securities and Exchange Commission on December 31, 2006 by a
group consisting of Tontine Management, L.L.C., Tontine Partners, L.P.,
Tontine Capital Management, L.L.C., Tontine Associates, L.L.C. and Jeffrey
L. Gendell (individually and as managing member of Tontine Management,
L.L.C., Tontine Capital Management, L.L.C. and Tontine Associates, L.L.C.).
Based solely upon information in this Schedule 13G/A, Jeffrey L. Gendell
and these affiliated entities share voting power and dispositive power with
respect to all of such shares of common stock. The stated business address
for Jeffrey L. Gendell is 55 Railroad Avenue, 3rd Floor, Greenwich,
Connecticut 06830.
(10) Information with respect to AXA Financial, inc. is based on a Schedule 13G
filed with the Securities and Exchange Commission on December 31, 2006 by a
group consisting of AXA Financial, Inc.; three French mutual insurance
companies, ASA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle,
and AXA Courtage Assurance Mutuelle (collectively, the "Mutuelles AXA"), as
a group; AXA; and their subsidiaries. Based solely upon information in this
Schedule 13G, AXA Assurances I.A.R.D. Mutuelle and these affiliated
entities share voting power and dispositive power with respect to all of
such shares of common stock. The stated business address for AXA Financial,
Inc. is 1290 Avenue of the Americas, New York, New York 10104.
(11) Information with respect to Wells Fargo & Company is based on a Schedule
13G filed with the Securities and Exchange Commission on December 31, 2006.
Based solely upon information in this Schedule 13G, Wells Fargo & Company
has sole voting power and dispositive power with respect to all of such
shares of common stock. The stated business address for Wells Fargo &
Company is 420 Montgomery Street, San Francisco, California 94104.
(12) Information with respect to Fidelity Management & Research Company is based
on a Schedule 13G filed by FMR Corp. with the Securities and Exchange
Commission on December 31, 2006 by a group consisting of Edward C. Johnson
3d, members of the family of Edward C. Johnson 3d, Pyramis Global Advisors
Trust Company, and Fidelity International Limited. Based solely upon
information in this Schedule 13G, FMR Corp. and its direct and indirect
subsidiaries share voting power and dispositive power with respect to all
such shares of common stock. The stated business address for FMR Corp. is
82 Devonshire Street, Boston, Massachusetts 02109.
(13) Information with respect to Artisan Partners LP is based on a Schedule
13G/A filed with the Securities and Exchange Commission on December 31,
2006 by a group consisting of Artisan Partners Limited Partnership, Artisan
Investment Corporation, Andrew A. Ziegler and Carlene Murphy Ziegler. Based
solely upon information in this Schedule 13G/A, Artisan Partners LP and
these affiliated entities share voting power and dispositive power with
respect to all such shares of common stock. The business address of Artisan
Partners LP, Artisan Investment Corporation, Mr. Ziegler and Ms. Ziegler is
875 East Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin 53202.
37
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Our Board of Directors has adopted a written policy regarding the review,
approval and ratification of transactions with related persons. The policy
describes the types of transactions covered, the standards to be applied and the
persons responsible for approving and reviewing related person transactions. A
copy of this policy is posted on the Investor Relations section of the Company's
website at WWW.CMWORKS.COM. In 2007, the Company did not engage in any
transaction with a related person in which the amount involved exceeded
$120,000.
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 mail, 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.
SHAREHOLDERS' PROPOSALS
Proposals of shareholders intended to be presented at the 2008 Annual
Meeting must be received by us by February 29, 2008 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 2008
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
2008 Annual Meeting any shareholder proposal that does not meet all of the
requirements for inclusion established by the Exchange Act, and the rules and
regulations promulgated thereunder.
38
OTHER INFORMATION
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, 2007, 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: Secretary. Each
such request must set forth a good faith representation that, as of June 8,
2007, the person making the request was a beneficial owner of securities
entitled to vote at the Annual Meeting.
The accompanying Notice and this Proxy Statement are sent by order of our
Board of Directors.
TIMOTHY R. HARVEY
Secretary
Dated: June 27, 2007
39
COLUMBUS MCKINNON CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 30, 2007
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints TIMOTHY T. TEVENS and KAREN L. HOWARD 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 Ramada Hotel and Conference Center at 2402 North
Forest Road, Amherst, New York, on July 30, 2007 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.
(Continued and to be signed on the reverse side)
ANNUAL MEETING OF SHAREHOLDERS OF
COLUMBUS MCKINNON CORPORATION
July 30, 2007
PROXY VOTING INSTRUCTIONS
MAIL - DATE, SIGN AND MAIL YOUR PROXY CARD IN THE ENVELOPE PROVIDED AS SOON AS
----
POSSIBLE.
- OR -
TELEPHONE - CALL TOLL-FREE 1-800-PROXIES (1 800-776-9437) FROM ANY TOUCH TONE
---------
TELEPHONE AND FOLLOW THE INSTRUCTIONS. HAVE YOUR CONTROL NUMBER AND THE PROXY
CARD AVAILABLE WHEN YOU CALL.
- OR -
INTERNET - ACCESS WWW.VOTEPROXY.COM AND FOLLOW THE ON-SCREEN INSTRUCTIONS. HAVE
-------- -----------------
YOUR CONTROL NUMBER AVAILABLE WHEN YOU ACCESS THE WEB PAGE.
COMPANY NUMBER IS
-------------------
ACCOUNT NUMBER IS
-------------------
You may enter your voting instructions at 1 -800-PROXIES or www.voteproxy.com up
until 11:59 PM Eastern Time the day before the cut-off or meeting date.
Please detach along the perforated line and mail in the envelope provided
IF you are not voting via telephone or the internet.
--
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR ELECTION OF
DIRECTORS. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE /X/
1. ELECTION OF DIRECTORS:
NOMINEES:
|_| FOR ALL NOMINEES o TIMOTHY T. TEVENS
|_| WITHHOLD AUTHORITY o RICHARD H. FLEMING
FOR ALL NOMINEES
o ERNEST R. VEREBELYI
|_| FOR ALL EXCEPT
(see instructions below) o WALLACE W. CREEK
o STEPHEN RABINOWITZ
o LINDA A. GOODSPEED
o NICHOLAS T. PINCHUK
INSTRUCTION: To withhold authority to vote for any individual nominee(s) mark
------------
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold.
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 NOS. 1 and 2.
To change the address on your account, please check the box at right |_|
and indicate your new address in the address space above.
Please note that changes to the registered name(s) on the account
may not be submitted via this method.
Signature of Shareholder Date:
--------------------- -------------------
Signature of Shareholder Date:
--------------------- -------------------
Note: Please sign exactly as name appears on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor, administrator,
attorney, trustee or guardian, please give full title as such. If the signer is
a corporation, please sign in full corporate name by duly authorized officer,
giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
COLUMBUS MCKINNON CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
VOTING INSTRUCTION CARD FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 30, 2007
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 be present and to vote at the Annual
Meeting of Shareholders of COLUMBUS McKINNON CORPORATION (the "Company") to be
held at the Ramada Hotel and Conference Center at 2402 North Forest Road,
Amherst, New York, on July 30, 2007 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.
(Continued and to be signed on the reverse side)
ANNUAL MEETING OF SHAREHOLDERS OF
COLUMBUS MCKINNON CORPORATION
July 30, 2007
ESOP
PROXY VOTING INSTRUCTIONS
MAIL - DATE, SIGN AND MAIL YOUR PROXY CARD IN THE ENVELOPE PROVIDED AS SOON AS
----
POSSIBLE.
- OR -
TELEPHONE - CALL TOLL-FREE 1-800-PROXIES (1 800-776-9437) FROM ANY TOUCH TONE
---------
TELEPHONE AND FOLLOW THE INSTRUCTIONS. HAVE YOUR CONTROL NUMBER AND THE PROXY
CARD AVAILABLE WHEN YOU CALL.
- OR -
INTERNET - ACCESS WWW.VOTEPROXY.COM AND FOLLOW THE ON-SCREEN INSTRUCTIONS. HAVE
-------- -----------------
YOUR CONTROL NUMBER AVAILABLE WHEN YOU ACCESS THE WEB PAGE.
COMPANY NUMBER IS
-------------------
ACCOUNT NUMBER IS
-------------------
You may enter your voting instructions at 1 -800-PROXIES or www.voteproxy.com up
until 11:59 PM Eastern Time the day before the cut-off or meeting date.
Please detach along the perforated line and mail in the envelope provided
IF you are not voting via telephone or the internet.
--
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR THE
ELECTION OF DIRECTORS. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE /X/
THE TRUSTEES MAKE NO RECOMMENDATION WITH RESPECT TO VOTING YOUR ESOP SHARES
ON ANY PROPOSALS.
1. ELECTION OF DIRECTORS:
NOMINEES:
|_| FOR ALL NOMINEES o TIMOTHY T. TEVENS
|_| WITHHOLD AUTHORITY o RICHARD H. FLEMING
FOR ALL NOMINEES
o ERNEST R. VEREBELYI
|_| FOR ALL EXCEPT
(see instructions below) o WALLACE W. CREEK
o STEPHEN RABINOWITZ
o LINDA A. GOODSPEED
o NICHOLAS T. PINCHUK
INSTRUCTION: To withhold authority to vote for any individual nominee(s) mark
------------
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold.
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 NOS. 1 AND 2.
To change the address on your account, please check the box at right |_|
and indicate your new address in the address space above.
Please note that changes to the registered name(s) on the account
may not be submitted via this method.
Signature of Shareholder Date:
--------------------- -------------------
Signature of Shareholder Date:
--------------------- -------------------
Note: Please sign exactly as name appears on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor, administrator,
attorney, trustee or guardian, please give full title as such. If the signer is
a corporation, please sign in full corporate name by duly authorized officer,
giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
BROKER CARD
COLUMBUS MCKINNON CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 30, 2007
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints TIMOTHY T. TEVENS and KAREN L. HOWARD 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 Ramada Hotel and Conference Center at 2402 North
Forest Road, Amherst, New York, on July 30, 2007 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.
(Continued and to be signed on the reverse side)
ANNUAL MEETING OF SHAREHOLDERS OF
COLUMBUS MCKINNON CORPORATION
July 30, 2007
PROXY VOTING INSTRUCTIONS
PLEASE DATE, SIGN AND MAIL
YOUR PROXY CARD IN THE
ENVELOPE PROVIDED AS SOON
AS POSSIBLE
Please detach along the perforated line and mail in the envelope provided IF you
--
are not voting via telephone or the internet.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR THE
ELECTION OF DIRECTORS. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE /X/
1. ELECTION OF DIRECTORS:
NOMINEES:
|_| FOR ALL NOMINEES o TIMOTHY T. TEVENS
|_| WITHHOLD AUTHORITY o RICHARD H. FLEMING
FOR ALL NOMINEES
o ERNEST R. VEREBELYI
|_| FOR ALL EXCEPT
(see instructions below) o WALLACE W. CREEK
o STEPHEN RABINOWITZ
o LINDA A. GOODSPEED
o NICHOLAS T. PINCHUK
INSTRUCTION: To withhold authority to vote for any individual nominee(s) mark
------------
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold.
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 NOS. 1 AND 2.
To change the address on your account, please check the box at right |_|
and indicate your new address in the address space above.
Please note that changes to the registered name(s) on the account
may not be submitted via this method.
Signature of Shareholder Date:
--------------------- -------------------
Signature of Shareholder Date:
--------------------- -------------------
Note: Please sign exactly as name appears on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor, administrator,
attorney, trustee or guardian, please give full title as such. If the signer is
a corporation, please sign in full corporate name by duly authorized officer,
giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.