-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PGdR3gG+ii0oEotmMnQxK+KgBWqjjweWtoox6LLOuL1gGceT0SGeJem4Sy0VLoUb uTavEye0yXd4trJK0beX6Q== 0000897069-02-000174.txt : 20020414 0000897069-02-000174.hdr.sgml : 20020414 ACCESSION NUMBER: 0000897069-02-000174 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020411 FILED AS OF DATE: 20020226 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LADISH CO INC CENTRAL INDEX KEY: 0000814250 STANDARD INDUSTRIAL CLASSIFICATION: METAL FORGING & STAMPINGS [3460] IRS NUMBER: 311145953 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-23539 FILM NUMBER: 02558343 BUSINESS ADDRESS: STREET 1: 5481 S PACKARD AVE CITY: CUDAHY STATE: WI ZIP: 53110 BUSINESS PHONE: 4147472611 MAIL ADDRESS: STREET 1: 5481 SOUTH PACKARD AVE CITY: CUDAHY STATE: WI ZIP: 53110 DEF 14A 1 slp229.txt DEFINITIVE PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14 LADISH CO., INC. (Name of Registrant as Specified in its Charter) (Name of Person(s) Filing Proxy Statement if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 (Set forth the amount on which the filing fee is calculated and state how it was determined): 4. Proposed maximum aggregate value of transaction: 5. Total fee paid: [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1. Amount Previously Paid: 2. Form, Schedule or Registration Statement No.: 3. Filing Party: 4. Date Filed: Ladish Co., Inc. 5481 South Packard Avenue Cudahy, Wisconsin 53110 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To Stockholders: An Annual Meeting of Stockholders of Ladish Co., Inc., a Wisconsin corporation (the "Company"), will be held in the Creole Meeting Room of the Four Points Hotel Sheraton Milwaukee Airport located at 4747 South Howell Avenue, Milwaukee, Wisconsin on Thursday, April 11, 2002 at 10:00 a.m. Central Daylight Time, for the following purposes: (1) To elect seven (7) Directors, to serve for the term of one year or until their successors have been elected and have duly qualified. (2) To transact such other business as may properly come before the meeting or any adjournment thereof. Only Stockholders of record at the close of business on February 28, 2002 will be entitled to notice of and to vote at the 2002 Annual Meeting or any adjournment thereof, notwithstanding the transfer of any stock on the books of the Company after such record date. A Proxy Statement and proxy card accompany this Notice of Annual Meeting of Stockholders. /s/ Wayne E. Larsen -------------------------- Wayne E. Larsen Secretary Cudahy, Wisconsin February 28, 2002 Ladish Co., Inc. 5481 South Packard Avenue Cudahy, Wisconsin 53110 PROXY STATEMENT For ANNUAL MEETING OF STOCKHOLDERS To Be Held on April 11, 2002 This Proxy Statement is furnished to the stockholders of Ladish Co., Inc. (the "Company") in connection with the solicitation of proxies by the Board of Directors of the Company to be voted at the Annual Meeting of Stockholders of the Company to be held at the Four Points Hotel Sheraton Milwaukee Airport, Creole Meeting Room, 4747 South Howell Avenue, Milwaukee, Wisconsin on Thursday, April 11, 2002 at 10:00 a.m., Central Daylight Time (the "2002 Annual Meeting"), or at any adjournment thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. This Proxy Statement and the enclosed form of proxy are being mailed to stockholders on or about March 11, 2002. RIGHT TO REVOKE PROXY Any stockholder giving the proxy enclosed with this Proxy Statement has the power to revoke such proxy at any time prior to the exercise thereof by filing with the Company a written revocation at or prior to the 2002 Annual Meeting, by executing a proxy bearing a later date or by attending the 2002 Annual Meeting and voting in person the shares of stock that such stockholder is entitled to vote. Unless the persons named in the proxy are prevented from acting by circumstances beyond their control, the proxy will be voted at the 2002 Annual Meeting and at any adjournment thereof in the manner specified therein, or if not specified, the proxy will be voted: (1) FOR the election of the seven (7) nominees listed under "Election of Directors" as nominees of the Company for election as directors to hold office until the next Annual Meeting of Stockholders or until their successors are elected and qualified; (2) At the discretion of the persons named in the enclosed form of proxy, on any other matter that may properly come before the 2002 Annual Meeting or any adjournment thereof. BY WHOM AND THE MANNER IN WHICH PROXY IS BEING SOLICITED The enclosed proxy is solicited by and on behalf of the Board of Directors of the Company. The expense of the solicitation of proxies for the 2002 Annual Meeting, including the cost of mailing, will be borne by the Company. To the extent necessary to assure sufficient representation at the 2002 Annual Meeting, officers and regular employees of the Company, at no additional compensation, may request the return of proxies personally, by telephone, facsimile, mail, or other method. The extent to which this will be necessary depends entirely upon how promptly proxies are received. Stockholders are urged to send in their proxies without delay. The Company will supply brokers, nominees, fiduciaries and other custodians with proxy materials to forward to beneficial owners of shares in connection with the request from the beneficial owners of authority to execute such proxies, and the Company will reimburse such brokers, nominees, fiduciaries and other custodians for their expenses in making such distribution. Management has no knowledge or information that any other person will specifically engage any persons to solicit proxies. 1 VOTING SECURITIES AND STOCKHOLDERS The outstanding voting securities of the Company consist entirely of shares of Common Stock, $0.01 par value per share, each share of which entitles the holder thereof to one vote. The record date for the determination of the stockholders entitled to notice of and to vote at the 2002 Annual Meeting, or any adjournment thereof, has been established by the Board of Directors as the close of business on February 28, 2002. At that date, there were outstanding and entitled to vote 12,976,060 shares of Common Stock. The presence, in person or by proxy, of the holders of record of a majority of the outstanding shares of Common Stock entitled to vote is necessary to constitute a quorum for the transaction of business at the 2002 Annual Meeting, but if a quorum should not be present, the meeting may be adjourned from time to time until a quorum is obtained. A holder of Common Stock will be entitled to one vote per share on each matter properly brought before the meeting. Cumulative voting is not permitted in the election of directors. The proxy card provides space for a stockholder to withhold voting for any nominee for the Board of Directors or to abstain from voting for any other proposal if the stockholder chooses to do so. Under Wisconsin law, directors are elected by a plurality of the votes cast at the meeting. Each other matter to be submitted to the stockholders requires the affirmative vote of a majority of the votes cast at the meeting. For purposes of determining the number of votes cast with respect to any voting matter, only those cast "for" or "against" are included. Abstentions and broker non-votes are counted only for purposes of determining whether a quorum is present at the meeting. As of February 28, 2002, no person was known by the Company to own beneficially more than five percent (5%) of the outstanding shares of Common Stock of the Company, except as shown in the following table:
Number of Shares Name and Address Beneficially Owned Percent Of Beneficial Owner At February 28, 2001 Of Class ------------------- -------------------- -------- Grace Brothers Ltd. 1 3,858,973 29.7% 1650 Sherman Avenue, Suite 900 Evanston, Illinois 60201 Dimensional Fund Advisors Inc. 1 1,086,500 8.4% 1299 Ocean Avenue, 11th Floor Santa Monica, California 90401 State Street Research & Management Company1 925,827 7.1% 1 Financial Center, 30th Floor Boston, Massachusetts 02111 Royce & Associates, Inc. 1 689,900 5.3% 1414 Avenue of the Americas, 9th Floor New York, New York 10019
- -------- 1 Information regarding Grace Brothers Ltd., Dimensional Fund Advisors Inc. and their beneficial ownership of the Company's shares was obtained from the Schedule 13D/A of Grace Brothers Ltd. dated December 13, 2001, the Schedule 13G of Dimensional Fund Advisors Inc. dated January 30, 2002, the Schedule 13G of State Street Research & Management Company dated February 15, 2002 and the Schedule 13F of Royce & Associates, Inc. dated February 7, 2002. 2 The following table shows the number of shares of Common Stock beneficially owned by each director or nominee, by the executive officers named below in the Summary Compensation Table and by all directors, nominees and executive officers as a group, based upon information supplied by them: Number of Shares Beneficially Owned Percent Name At February 28, 2002 2 Of Class - ---- --------------------- -------- Lawrence W. Bianchi 5,000 * Margaret Bertelsen Hampton 2,900 * Leon A. Kranz 0 * Wayne E. Larsen 97,500 * William J. Lazzari 15,600 * Scott D. Roeper 0 * Robert W. Sullivan 15,083 * Randy B. Turner 16,500 * Gary J. Vroman 80,000 * Kerry L. Woody 178,167 1.4% Directors and Executive Officers as a Group (14 persons) 596,584 4.6% * Less than one percent (1%) - ------------- 1 Unless otherwise noted, all shares are owned directly and the owner has the right to vote the shares, except for shares that officers and directors have the right to acquire under the Company's stock option plans as of the record date or within sixty (60) days thereafter, which for Messrs. Woody, Larsen, Lazzari, Vroman and Turner are 78,167, 95,500, 15,000, 70,000 and 16,500 shares, respectively. Kerry L. Woody, 50. Director since 1997. Mr. Woody has been President since 1995 and was appointed Chief Executive Officer of the Company in 1998. Prior to that time he was Vice President-Operations, Vice President-Manufacturing Services and Production Manager. He joined the Company in 1975. In addition, Mr. Woody serves as a Director of Vilter Manufacturing Co. and Milwaukee Lutheran College. Mr. Woody has a B.S. in Engineering from Milliken University. Wayne E. Larsen, 47. Director since 1997. Since 1995 Mr. Larsen has been Vice President Law/Finance and Secretary of the Company. He served as General Counsel and Secretary from 1989 after joining the Company as corporate counsel in 1981. Mr. Larsen is a Trustee of the Ladish Co. Foundation and a Director of the Wisconsin Foundation for Independent Colleges and the South Shore YMCA. Mr. Larsen has a B.A. from Marquette University and a J.D. from Marquette Law School. Gene E. Bunge, 56. Mr. Bunge has served as Vice President, Engineering since November 1991. From 1985 until that time he was General Manager of Engineering. Mr. Bunge has been with the Company since 1973. He has a B.S.E.E. from the Milwaukee School of Engineering. David L. Provan, 52. Mr. Provan has served as Vice President, Materials Management since September 1999. Prior to that time he had been Purchasing Manager, Raw Materials, and Head Buyer. Mr. Provan has been with the Company since 1979. He has a Bachelor's Degree in Business Administration from the University of Wisconsin-Parkside. Gary J. Vroman, 42. Mr. Vroman has served as Vice President, Sales and Marketing since December 1995. From January 1994 to December 1995 he was General Manager of Sales. Prior to that period he had been the Product Manager for jet engine components. Mr. Vroman has been with the Company since 1982. He has a B.S. in Engineering from the University of Illinois and a M.S. in Engineering Management from the Milwaukee School of Engineering. Lawrence C. Hammond, 54. Mr. Hammond has served as Vice President, Human Resources since January 1994. Prior to that time he had served as Director of Industrial Relations at the Company and he had been Labor Counsel at the Company. Mr. Hammond has been with the Company since 1980. He has a B.A. and a Masters in Industrial Relations from Michigan State University and a J.D. from the Detroit College of Law. 3 George Groppi, 53. Mr. Groppi has served as Vice President Quality and Metallurgy since September 1999. He was named Manager of Product Metallurgy in 1992. In 1994 he was appointed Manager of Production Control and recently assumed the position of Manager of Quality & Metallurgy. Mr. Groppi has been with the Company since 1969. He holds a B.S. in Mechanical Engineering from Marquette University. Randy B. Turner, 52. Mr. Turner has served as President of Pacific Cast Technologies, Inc. ("PCT") since it was acquired by the Company in January 2000. Prior to joining the Company, Mr. Turner served as President of the corporate predecessor to PCT. He has a B.S. in Business Management from Lewis and Clark College. William J. Lazzari, 52. Mr. Lazzari has been President of Stowe Machine Co., Inc. ("Stowe") since 2000. He was General Manager at Stowe for over four years prior to becoming President. He holds a B.S. in Marketing from the University of Hartford. ITEM 1 - ELECTION OF DIRECTORS At the 2002 Annual Meeting, seven (7) directors are to be elected who shall hold office until the next Annual Meeting of Stockholders or until their respective successors are duly elected and qualified. It is the intention of the persons named in the Company's proxy to vote for the election of each of the nominees listed below, unless authority is withheld. All nominees have indicated a willingness to serve as directors, but if any of them should decline or be unable to serve as a director, the persons named in the proxy will vote for the election of another person recommended by the Board of Directors. The Board of Directors recommends you vote FOR the election of each of the seven (7) nominees to the Board of Directors set forth below. Nominees - -------------------------------------------------------------------------------- Lawrence W. Bianchi, 61. Director since 1998. Mr. Bianchi in 1993 retired as the Managing Partner of the Milwaukee, Wisconsin office of KPMG Peat Marwick. From 1994 to 1998 Mr. Bianchi served as CFO of the law firm of Foley & Lardner. Mr. Bianchi's principal occupation is investments. - -------------------------------------------------------------------------------- Margaret Bertelsen Hampton, 43. Director since 2001. Ms. Hampton has been a Portfolio Manager at Grace Brothers Ltd., an Evanston, Illinois based investment management firm, since 1997. Previously, Ms. Hampton was a Managing Director for First Chicago Capital Corporation, a position she held for more than five years. - -------------------------------------------------------------------------------- Leon A. Kranz, 62. Director since 2001. Mr. Kranz is President and Chief Executive Officer of Weber Metals, Inc., a Paramount, California based metals processor, a position he has held for ten years. - -------------------------------------------------------------------------------- Wayne E. Larsen, 47. Director since 1997. Since 1995 Mr. Larsen has been Vice President Law/Finance and Secretary of the Company. He served as General Counsel and Secretary from 1989 after joining the Company as corporate counsel in 1981. Mr. Larsen is a Trustee of the Ladish Co. Foundation and a Director of the Wisconsin Foundation for Independent Colleges and the South Shore YMCA of Milwaukee. - -------------------------------------------------------------------------------- Scott D. Roeper, 42. Director since 2001. Mr. Roeper is a Managing Director and Partner for Facilitator Capital Fund ("FCF"), a Wisconsin-based private equity fund. Prior to joining FCF in 1999, Mr. Roeper was a senior banker for Firstar Bank since 1990. Mr. Roeper is a Director of numerous FCF portfolio companies. - -------------------------------------------------------------------------------- Robert W. Sullivan, 43. Director since 1993. Mr. Sullivan is President of The Plitt Company, a seafood distribution concern. Mr. Sullivan had been President of The Martec Group, a sales and marketing consulting group for more than five years. - -------------------------------------------------------------------------------- Kerry L. Woody, 50. Director since 1997. Mr. Woody has been President since 1995 and was appointed Chief Executive Officer of the Company in 1998. Prior to that time he was Vice President-Operations, Vice President-Manufacturing Services and Production Manager. He joined the Company in 1975. Mr. Woody is also a Director of Vilter Manufacturing Co. and a Director of Wisconsin Lutheran College. 4 BOARD MEETINGS AND COMMITTEES The directors hold regular quarterly meetings, in addition to the meeting immediately following the Annual Meeting of Stockholders, attend special meetings, as required, and spend such time on the affairs of the Company as their duties require. At the December 13, 2001 Board of Directors meeting, the directors unanimously added Ms. Hampton and Messrs. Kranz and Roeper to the Board of Directors. During the fiscal year ended December 31, 2001, the Board of Directors held eight (8) meetings. All directors of the Company attended at least seventy-five percent (75%) of the meetings of the Board of Directors and the committees on which they served during the fiscal year ended December 31, 2001. During the fiscal year ended December 31, 2001, there were only two committees, those being an Audit Committee and a Compensation and Stock Option Committee. Mr. Finkl retired from the Board of Directors and both of the above committees as of January 31, 2002. AUDIT COMMITTEE For the year ending December 31, 2001, the members of the Audit Committee were Lawrence W. Bianchi, Charles W. Finkl and Robert W. Sullivan. As of January 31, 2002 the Audit Committee members are Lawrence W. Bianchi, Leon A. Kranz and Scott D. Roeper. The Audit Committee is responsible for recommending annually a firm of independent certified public accountants to serve as the Company's auditors, to meet with and review reports of the Company's auditors and the fees payable to them. The independence of the public accountants auditing the Company's financial statements is one of the factors evaluated by the Audit Committee when recommending auditors. During fiscal year 2001, the Company's auditors, Arthur Andersen LLP, provided audit services and other consulting assistance for fees of $91,000 and $46,000, respectively. The Audit Committee assessed the provision of non-audit services in determining the Company's auditors, Arthur Andersen LLP, to be independent. In addition, the Audit Committee provides oversight to the total financial status of the Company as well as assisting the Company with assessments of pension-asset performance and investment criteria. The Audit Committee met twice in 2001 for these purposes. COMPENSATION AND STOCK OPTION COMMITTEE REPORT The members of the Compensation and Stock Option Committee for the year ending December 31, 2001 were Lawrence W. Bianchi, Kerry L. Woody and Charles W. Finkl. As of January 31, 2002 the Compensation and Stock Option Committee members are Lawrence W. Bianchi, Margaret Bertelsen Hampton and Robert W. Sullivan. The Compensation and Stock Option Committee is responsible for (i) setting the overall policy of the Company's executive compensation program; (ii) establishing the base salary level for the executive officers; (iii) reviewing and approving the annual incentive program for the Company executives; and (iv) functions as the administrator of the Company's 1996 Long Term Incentive Plan. The Compensation and Stock Option Committee met five (5) times in 2001. The Company's executive compensation program is designed to be closely linked to corporate performance and returns to stockholders. To this end, the Company has developed an overall compensation strategy and specific compensation plan that tie a very significant portion of executive compensation to the Company's success in meeting specified performance goals. The primary criteria used by the Compensation and Stock Option Committee in assessing the performance of the Company's Chief Executive Officer are the results of the Company as measured by its earnings before interest, taxes, depreciation and amortization ("EBITDA"). By monitoring the EBITDA of the Company, both as an overall result and as a percentage of net sales, the Compensation and Stock Option Committee determines whether the Chief Executive Officer is achieving their expectations. In addition, the Compensation and Stock Option Committee also assess the accomplishments of the Chief Executive Officer and the other executive officers with respect to activities such as acquisitions, divestitures and the raising of capital for the business. In 2001, sales at the Company were 9.7% more than 2000. However, EBITDA as a percentage of net sales declined to 14.8% from 16.1% in 2000. As the sales growth in 2001 was offset by the decline in profitability, the Chief Executive Officer's incentive compensation for 2001 declined from the level in 2000. 5 In addition, through the use of stock options, the Company ensures that a part of the executives' compensation is closely tied to appreciation in the Company's stock price. The overall objectives of this strategy are to attract and retain the best possible executive talent, to motivate these executives to achieve the goals inherent in the Company's business strategy, to link executive and stockholder interests through equity based plans and, finally, to provide a compensation package that recognizes individual contributions as well as overall business results. In 2001, Messrs. Turner, Lazzari, Groppi and Provan were the only Company executives to be awarded stock options. The Compensation and Stock Option Committee regularly reports their actions and recommendations to the full Board of Directors. In 2001, none of the actions or recommendations of the Compensation and Stock Option Committee were modified or rejected by the Board of Directors. By the Compensation and Stock Option Committee Lawrence W. Bianchi, Charles W. Finkl and Kerry L. Woody COMPENSATION OF DIRECTORS Non-employee directors receive an annual fee of twenty thousand dollars ($20,000.00) which is payable quarterly. In addition, directors who are not officers or employees of the Company receive a fee of one thousand dollars ($1,000.00) for each Board meeting personally attended. EXECUTIVE COMPENSATION AND OTHER MATTERS The following table sets forth information for the Company's fiscal years ended December 31, 2001, 2000, and 1999, with regard to the compensation for their services to the Company of the Chief Executive Officer and each of the other four (4) most highly compensated executive officers serving the Company at the close of the Company's most recently completed fiscal year.
- ---------------------------------------------------------------------------------------------------------------------- SUMMARY COMPENSATION TABLE - ---------------------------------------------------------------------------------------------------------------------- Long Term Annual Compensation 3 Compensation ------------------------------------ -------------------- Restricted Stock Other Stock Option Name and Annual Awards Awards All Other Principal Position Year Salary Bonus 4 Compensation 5 (Shares) (Shares) Compensation 6 - ---------------------------------------- -------- ---------- ---------- -------------- ---------- --------- -------------- Kerry L. Woody 2001 $286,102 $156,465 $774 -- -- $5,216 President & Chief Executive Officer 2000 $286,102 $159,350 $774 -- -- $5,020 1999 $285,005 $115,000 $2,592 -- -- $5,076 - ---------------------------------------- -------- ---------- ---------- ------------- ---------- --------- ----------- Wayne E. Larsen 2001 $180,967 $88,020 $774 -- -- $3,695 Vice President Law/Finance & Secretary 2000 $180,097 $91,800 $774 -- -- $3,549 1999 $180,004 $60,000 $2,592 -- -- $3,023 - ---------------------------------------- -------- ---------- ---------- ------------- ---------- --------- ----------- Randy B. Turner 7 2001 $154,500 $82,810 -- -- 10,000 -- President - Pacific Cast Technologies, 2000 $155,226 $120,680 -- -- 6,500 -- Inc. 1999 -- -- -- -- -- -- - ---------------------------------------- -------- ---------- ---------- ------------- ---------- --------- ----------- Gary J. Vroman 2001 $140,004 $25,200 $468 -- -- 5,029 Vice President - Sales & Marketing 2000 $140,542 $42,000 $468 -- -- $4,811 1999 $132,308 $23,000 $2,592 -- -- $3,990 - ---------------------------------------- -------- ---------- ---------- ------------- ---------- --------- ----------- William J. Lazzari 2001 $126,997 $29,625 -- -- 10,000 $5,976 President - Stowe Machine Co., Inc. 2000 $129,734 $12,500 -- -- -- $5,664 1999 $119,636 $15,000 -- -- 5,000 $5,664 - ---------------------------------------- -------- ---------- ---------- ------------- ---------- --------- ----------- 1 Annual Compensation includes those amounts the executive officers may defer under the 401(k) Plans of the Company and its subsidiaries as well as amounts the executive officers may defer under the Company's Elective Deferred Compensation Plan (the "EDC Plan"). Participants in the EDC Plan may elect to defer salary and/or bonus on an unsecured basis and may select any of eight investment options. 2 An incentive bonus is paid only upon the achievement of a predetermined financial objective set each year by the Board of Directors' Compensation Committee at the beginning of the fiscal year. 3 Other annual compensation includes supplemental life insurance provided to the above listed executives. 4 All other compensation consists principally of automobile allowances 5 Mr. Turner joined the Company in January of 2000 following the acquisition of PCT.
6 PENSION BENEFITS Defined Benefit Plan. The Ladish Co., Inc. Salaried Pension Plan (the "Pension Plan") is a "defined benefit" pension plan generally covering salaried, non-union employees of the Company who are not covered by any other defined benefit plan to which the Company makes contributions pursuant to a collective bargaining agreement. Upon reaching normal retirement at or after age 65, a participant is generally entitled to receive an annual retirement benefit for life. The Pension Plan provides alternative actuarially equivalent forms of benefit payment. Vesting under the Pension Plan occurs after five years of continued service. The monthly retirement benefit at the normal retirement age of at least 65 is determined pursuant to a formula as follows: 1.25% of the average base salary (exclusive of bonuses or other incentive or special compensation) of the individual during the consecutive five year period of service within the ten years preceding termination of employment (or after age 45, if longer) that his/her earnings were highest is multiplied by the number of years of Benefit Service (as defined). Monthly normal retirement benefits are payable on a straight life annuity basis and such amounts are not subject to any deduction for Social Security or other offset amounts. The following table sets forth the annual benefits payable to a participant who qualified for normal retirement in 2001, with the specified highest average earnings during the consecutive five year period of service within the ten years prior to retirement and the specified years of Benefit Service:
- --------------------------------- ----------------------------------------------------------------------------------- Average Annual Earnings for Years of Benefit Service Highest 5-Year Period Within the 10-Years Preceding ------------- ------------- ------------- ------------- ------------- ------------- Retirement 10 15 20 25 30 40 - --------------------------------- ------------- ------------- ------------- ------------- ------------- ------------- $50,000 $6,250 $9,375 $12,500 $15,625 $18,750 $25,000 - --------------------------------- ------------- ------------- ------------- ------------- ------------- ------------- $95,000 $11,875 $17,813 $23,750 $29,688 $35,625 $47,500 - --------------------------------- ------------- ------------- ------------- ------------- ------------- ------------- $100,000 $12,500 $18,750 $25,000 $31,250 $37,500 $50,000 - --------------------------------- ------------- ------------- ------------- ------------- ------------- ------------- $150,000 $18,750 $28,125 $37,500 $46,875 $56,250 $75,000 - --------------------------------- ------------- ------------- ------------- ------------- ------------- ------------- $200,000 $25,000 $37,500 $50,000 $62,500 $75,000 $100,000 - --------------------------------- ------------- ------------- ------------- ------------- ------------- ------------- $250,000 $31,250 $46,875 $62,500 $78,125 $93,750 $125,000 - --------------------------------- ------------- ------------- ------------- ------------- ------------- -------------
The years of Benefit Service for Messrs. Woody, Larsen and Vroman as of January 1, 2002 were 27, 21, and 20, respectively. Deferred Compensation Agreements. The Company has entered into deferred compensation agreements (the "Agreements") with eight current officers of the Company, including Messrs. Woody, Larsen and Vroman. Each employee covered by the Agreements (an "Employee"), upon full vesting, is entitled to receive supplemental disability or retirement benefits; provided that in no event may a person's total retirement benefits under the Agreements exceed 60% of the monthly average base salary (inclusive of bonuses or other compensation) during the five calendar years immediately preceding retirement. The retirement benefit at the normal retirement age of at least 62 is determined pursuant to a formula as follows: 60% of the monthly average of the Employee's base salary plus any incentive compensation which does not exceed twenty percent of the base salary during the five calendar years of highest compensation over ten years immediately preceding retirement multiplied by years of service, up to 15, and divided by 15. If an Employee suffers a disability (as defined), he is entitled to benefits paid under the same formula as in the preceding sentence (with his years of service calculated as if he had retired at age 62), reduced by other disability benefits paid by the Company or through workers' compensation (unless he is receiving fixed statutory payments for certain bodily injuries). 7 Any amount to be paid under the Agreement shall be reduced by any benefit paid to an Employee or his beneficiary pursuant to the Pension Plan. Defined Contribution Plan. The Ladish Co., Inc. Savings and Deferral Investment Plan ("SDIP"), which has been qualified under section 401(k) of the Internal Revenue Code, provides that salaried, non-union employees with six months' service may contribute 1% to 20% of their annual base salary to SDIP and the Company will provide a matching contribution in an amount to be determined by the Board of Directors of the Company. Employees' contributions of 1% to 20% can be "before tax" contributions, "after tax" contributions or a combination of both. The employees' contributions and the matching Company contribution may be placed by the employee in a fixed income fund, an equity investment fund or various combinations of each. Elective Deferred Compensation Plan. The EDC Plan was approved by the Board of Directors during 2000 and became effective during the Fourth Quarter of 2000. Participants in the EDC Plan may elect to defer salary and/or bonus on an unsecured basis and may select any of eight investment options. Total Shareholder Return The following graph compares the period percentage change in Ladish's cumulative total shareholder return on its common stock, assuming dividend reinvestment, with the cumulative total return of (i) the Russell 2000 Small Cap Index, and (ii) a peer group from the Company's industry, for the period of March 9 1998 to December 31, 2001. Ladish's use of less than a five-year period reflects the effective date of the registration of its common stock under Section 12 of the Exchange Act. [GRAPHIC OMITTED]
--------------------- --------------- ---------------- --------------- --------------- ---------------- Mar-9-98 Dec-31-98 Dec-31-99 Dec-31-00 Dec-31-01 --------------------- --------------- ---------------- --------------- --------------- ---------------- Ladish 100 58.8 47.2 74.1 75.3 --------------------- --------------- ---------------- --------------- --------------- ---------------- Russell 2000 100 91.5 109.5 104.9 100.8 --------------------- --------------- ---------------- --------------- --------------- ---------------- Industry Peers 100 55.8 28.6 66.6 46.6 --------------------- --------------- ---------------- --------------- --------------- ----------------
EMPLOYMENT AGREEMENTS The Company has entered into employment agreements with Messrs. Woody, Larsen and Vroman which are substantially similar in all respects. The basic employment agreement provides for a number of benefits, all of which vest after ten years of employment, including group term life insurance, health and dental coverage and long-term disability coverage. 8 The agreements provide that, upon the involuntary termination of the employee other than for cause, the Company is required to pay the employee 24 months of severance pay, determined by the employee's base monthly salary at the time of termination. In the case of Messrs. Woody and Larsen they are entitled to 30 months of severance pay. Upon retirement at age 62, the employee will receive his normal retirement benefits. Such benefits include a monthly payment equal to 60% of the employee's average compensation (i.e., monthly average of compensation for the five years of highest compensation over the ten years prior to retirement) multiplied by a fraction, the numerator of which is the length of service of the employee up to 15 and the denominator of which is 15. There are also provisions adjusting this calculation in the event of early retirement. Disabled employees can also be eligible for certain retirement benefits. All retirement benefits are tolled during any period of re-employment. Each agreement further provides that any compensation paid by the Company shall be reduced by any benefit paid under the Company's salaried employees' retirement plan. In addition to the foregoing, grants of stock options and SARs under the Incentive Plan become immediately exercisable upon a change in control of the Company. Mr. Turner has a separate agreement with the Company which provides for six months of severance pay in the event of involuntary separation other than for cause. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION During the year ending December 31, 2001, Kerry L. Woody, President and Chief Executive Officer of the Company, served on the Compensation and Stock Option Committee of the Company. While serving on the Compensation and Stock Option Committee, Mr. Woody did not vote on any matter in which Mr. Woody had a personal financial interest. No other insider at the Company participated on the Compensation and Stock Option Committee in 2001. THE STOCK OPTION PLAN The Plan has been established by the Company to promote the long-term financial interest of the Company by providing for the award of equity-based incentives to key employees and other persons providing material services to the Company, approximately 35 persons as of February 28, 2002. The Plan provides a means whereby such individuals may acquire shares of Common Stock through the grant of stock options and stock appreciation rights. The Plan is not subject to any provision of ERISA or qualified under Section 401(a) of the Internal Revenue Code. The number of shares of Common Stock subject to awards under the Plan may not exceed 983,333, 753,167 of which were outstanding as of December 31, 2001, or are subject to outstanding options. The number of shares underlying awards made to any one individual in any one-year period may not exceed 166,667 shares. The Common Stock issued under the Plan may be shares currently authorized but unissued or currently held or subsequently acquired by the Company as treasury shares. The number of shares subject to the Plan and the terms of any outstanding award may be adjusted as described in the Plan to reflect certain changes in the capitalization of the Company. The authority to manage and control the operation and administration of the Plan is vested in a committee selected by the Board of Directors of the Company (the "Committee") which shall consist of two or more members of the Board. The Committee has the authority and discretion to determine the individuals who will receive awards under the Plan and to determine the time of receipt, type of award, the number of shares covered by such award and the terms, conditions, performance criteria, restrictions and other provisions applicable to such award. The Committee also has the authority and discretion to interpret the Plan and to establish, amend and rescind any rules and regulations relating to the Plan. Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding on all persons. 9 Subject to the terms and provisions of the Plan, a participant to whom a stock option is granted will have the right to purchase the number of shares of Common Stock covered by the option. Subject to the conditions and limitations of the Plan, the Committee shall determine all of the terms and conditions of such grant, including without limitation, the option price, any vesting schedule and the period of exercisability. No option may be exercised after its expiration date. The expiration date shall be determined by the Committee at the time of grant, but may not be later than the earliest to occur of: (i) the ten-year anniversary of the grant date; (ii) if the participant's termination of employment with Company and its affiliates occurs by reason of death or disability (as defined in the Plan), the one-year anniversary of such termination of employment; (iii) if the participant's termination of employment with the Company and its affiliates occurs by reason of retirement, the three-month anniversary of such termination of employment; or (iv) if the participant's termination with the Company and its affiliates occurs for any other reason, the date of such termination. The full purchase price of each share of Common Stock purchased upon the exercise of an option shall be paid at the time of such exercise in cash or in shares of Common Stock (valued at fair market value as of the date of exercise) that have been held by the participant at least six months, or in any combination thereof, as determined by the Committee. To the extent provided by the Committee, a participant may elect to pay the purchase price upon the exercise of an option through a cashless exercise arrangement. Options awarded under the Plan may be nonqualified options or incentive stock options, as determined in the discretion of the Committee. Under the terms of the Plan, the Committee may also issue stock appreciation rights ("SARs"). Upon exercise, an SAR entitles the holder thereof to a payment equal to the excess of the fair market value of a share of stock on the exercise date over the fair market value of a share of stock on the grant date. If the Committee so determines, SARs may be issued in tandem with stock options. Generally, options and SARs are not transferable prior to the participant's death. However, the Committee may provide that an option or SAR award may be transferred to an immediate family member or to a trust for the benefit of an immediate family member. Upon a change in control of the Company (as defined in the Plan), all options and SARs shall become immediately exercisable. The Board of Directors of the Company may amend or terminate the Plan at any time, provided that no such amendment or termination may materially adversely affect the rights of any participant or beneficiary under any award made under the plan prior to the date such amendment is adopted by the Board. During 2001, no stock options were granted to Messrs. Woody, Larsen or Vroman. Stock options for 10,000 shares of Common Stock were granted to Mr. Turner and stock options for 10,000 shares of Common Stock were granted to Mr. Lazzari in 2001. 10
- ---------------------------------------------------------------------------------------------------------------------- Option Grants In 2001 - --------------------------- ------------ ----------------- ---------------- --------------------- -------------------- Percentage of Shares Total Options Underlying Granted to All Options Employees in Exercise Price Grant Date Present Name Granted 2001 (per share) Expiration Date Value - --------------------------- ------------ ----------------- ---------------- --------------------- -------------------- Kerry L. Woody 0 0% -- -- -- - --------------------------- ------------ ----------------- ---------------- --------------------- -------------------- Wayne E. Larsen 0 0% -- -- -- - --------------------------- ------------ ----------------- ---------------- --------------------- -------------------- Gary J. Vroman 0 0% -- -- -- - --------------------------- ------------ ----------------- ---------------- --------------------- -------------------- William J. Lazzari 10,000 7.7% $10.50 April 4, 2011 $10.50 - --------------------------- ------------ ----------------- ---------------- --------------------- -------------------- Randy B. Turner 10,000 7.7% $10.50 April 4, 2011 $10.50 - --------------------------- ------------ ----------------- ---------------- --------------------- -------------------- - --------------------------------------------------------------------------------------------------------------------- Aggregated Option Exercises in 2001 and Fiscal Year-End Option Values - ----------------------------- ------------- ----------- ------------------------------ ------------------------------ Number of Shares Underlying Value of Unexercised Number of Unexercised Options at In-the-Money Shares Fiscal Year-End Options at Fiscal Year-End Acquired on Value -------------- --------------- ------------- ---------------- Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable - ----------------------------- ------------- ----------- -------------- --------------- ------------- ---------------- Kerry L. Woody -- -- 178,167 0 $651,582 $0 - ----------------------------- ------------- ----------- -------------- --------------- ------------- ---------------- Wayne E. Larsen -- -- 95,500 0 $334,860 $0 - ----------------------------- ------------- ----------- -------------- --------------- ------------- ---------------- Gary J. Vroman 7,500 $56,350 70,000 0 $254,400 $0 - ----------------------------- ------------- ----------- -------------- --------------- ------------- ---------------- William J. Lazzari -- -- 5,000 10,000 $19,075 $4,200 - ----------------------------- ------------- ----------- -------------- --------------- ------------- ---------------- Randy B. Turner -- -- 3,250 13,250 $8,678 $12,878 - ----------------------------- ------------- ----------- -------------- --------------- ------------- ---------------- - ---------------------------------------------------------------------------------------------------------------------- Ten-Year Option/SAR Repricings - ---------------------------- ----------------- --------------- ------------- -------------- ---------- --------------- Market Length of Securities price of original underlying stock at Exercise option term number of time of price at New remaining options/SARs repricing time of exercise at date of repriced or or amend- repricing or price repricing or Name Date amended (#) ment ($) amendment ($) ($) amendment - ---------------------------- ----------------- --------------- ------------- -------------- ---------- --------------- Kerry L. Woody May 21, 1999 100,000 $8.31 $14.50 $8.25 106 months - ---------------------------- ----------------- --------------- ------------- -------------- ---------- --------------- Wayne E. Larsen May 21, 1999 60,000 $8.31 $14.50 $8.25 106 months - ---------------------------- ----------------- --------------- ------------- -------------- ---------- --------------- Gary J. Vroman May 21, 1999 40,000 $8.31 $14.50 $8.25 115 months - ---------------------------- ----------------- --------------- ------------- -------------- ---------- --------------- William J. Lazzari -- -- -- -- -- -- - ---------------------------- ----------------- --------------- ------------- -------------- ---------- --------------- Randy B. Turner -- -- -- -- -- -- - ---------------------------- ----------------- --------------- ------------- -------------- ---------- ---------------
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers, directors and persons who own more than ten percent (10%) of the Company's Common Stock to file initial reports of ownership and changes in ownership with the Securities and Exchange Commission ("SEC"). These reports are also filed with Nasdaq and a copy of each report is furnished to the Company. Additionally, SEC regulations require that the Company identify any individuals for whom one of the referenced reports was not filed on a timely basis during the most recent fiscal year. To the Company's knowledge, based on review of reports furnished to it, each individual who was required to file such a report for the calendar year ending December 31, 2001 did so in a timely manner. 11 RELATIONSHIP WITH INDEPENDENT AUDITORS Arthur Andersen LLP, independent auditors, or a predecessor of that firm, have been the auditors of the accounts of the Company each year since 1993, including the fiscal year ended December 31, 2001. It is anticipated that representatives of Arthur Andersen LLP will be present at the 2002 Annual Meeting, will have the opportunity to make a statement if they so desire and will be available to respond to appropriate questions raised at the 2002 Annual Meeting or submitted to them in writing before the 2002 Annual Meeting. Arthur Andersen LLP has informed the Company that it does not have any direct financial interest in the Company and that it has not had any direct connection with the Company in the capacity of promoter, underwriter, director, officer or employee. As is customary, auditors for the current fiscal year will be appointed by the Board of Directors at their meeting immediately following the 2002 Annual Meeting. OTHER MATTERS Management of the Company is not aware of other matters to be presented for action at the 2002 Annual Meeting; however, if other matters are presented for action, it is the intention of the persons named in the accompanying form of proxy to vote in accordance with their judgment on such matters. STOCKHOLDER PROPOSALS Stockholders who wish to include a proposal in the proxy statement for the Company's Annual Meeting of Stockholders for 2003 pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, must forward the proposal to the Secretary of the Company no later than December 10, 2002. Stockholder proposals other than pursuant to Rule 14a-8 will be considered untimely under the Company's By-laws if received less than 45 days in advance of the Annual Meeting of Stockholders in 2003 and the Company will not be required to present such proposals at the meeting. If the Board of Directors of the Company chooses to present such a proposal despite its untimeliness, the people named in the proxies solicited by the Board of Directors for the 2003 Annual Meeting of Stockholders will have the right to exercise discretionary voting power with respect to such proposal. REPORT ON FORM 10-K Upon the written request of any stockholder, addressed to the Secretary of the Company, the Company will provide to such stockholder, without charge, a copy of the Company's 2001 Annual Report on Form 10-K (without exhibits), as filed with the Securities and Exchange Commission. It is important that proxies be returned promptly to avoid unnecessary expense. Therefore, stockholders are urged, regardless of the number of shares owned, to date, sign and return the enclosed proxy. By Order of the Board of Directors /s/ WAYNE E. LARSEN --------------------------- Wayne E. Larsen February 28, 2002 Secretary 12 Ladish Co., Inc. 5481 South Packard Avenue Cudahy, Wisconsin 53110 PROXY ANNUAL MEETING OF THE STOCKHOLDERS OF LADISH CO., INC. TO BE HELD ON APRIL 11, 2002 This Proxy is being solicited by the Board of Directors of Ladish Co., Inc. (the "Company"). The undersigned hereby appoints Wayne E. Larsen and Kerry L. Woody with full power to act alone and with full power of substitution, as proxy of the undersigned, to attend the Annual Meeting of the Company, to be held on Thursday, April 11, 2002, in the Creole Meeting Room of the Four Points Hotel Sheraton Milwaukee Airport, 4747 South Howell Avenue, Milwaukee, Wisconsin, at 10:00 a.m., Central Daylight Time, and any adjournment or postponement thereof (the "Annual Meeting"), and to vote all shares of Common Stock of the Company held of record by the undersigned on February 28, 2002, upon any and all matters that may properly come before the Annual Meeting. This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder. If no direction is given, this Proxy will be voted FOR the proposals listed below. This Proxy, when properly executed, may be voted in the discretion of the proxy upon any and all other matters that may properly come before the Annual Meeting and the proxy is hereby authorized to vote the shares of Common Stock represented by the proxy on matters incident to the conduct of the Annual Meeting, including any motion to adjourn or postpone the Annual Meeting (although the proxy does not intend, and is not aware at this time of any intention of any other person, to make such a motion). This Proxy may be revoked at any time before the authority hereby granted is exercised by (i) delivering a written statement of revocation to the Secretary of the Company, (ii) submitting a later dated Proxy or (iii) attending the Annual Meeting and voting in person. PROPOSAL (1): To elect seven (7) Directors, to serve for the term of one year or until their successors have been elected and have duly qualified. Lawrence W. Bianchi |_| FOR |_| WITHHOLD Margaret B. Hampton |_| FOR |_| WITHHOLD Leon A. Kranz |_| FOR |_| WITHHOLD Wayne E. Larsen |_| FOR |_| WITHHOLD Scott D. Roeper |_| FOR |_| WITHHOLD Robert W. Sullivan |_| FOR |_| WITHHOLD Kerry L. Woody |_| FOR |_| WITHHOLD Dated , 2002 ------------------------------ Number of Shares: --------------- ------------------------------------------ Signature ------------------------------------------ Signature, if held jointly NOTE: Please sign exactly as name appears. When shares are held by joint tenants, both should sign. When signing as attorney, as executor, administrator, broker or guardian please give full title as such. If a corporation, please have the corporate name signed in full by the president or other authorized officer. If a partnership, please have the partnership name signed by an authorized person. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY. -----END PRIVACY-ENHANCED MESSAGE-----