SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
GLOBAL POWER EQUIPMENT GROUP INC.
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(Name of Registrant as Specified In Its Charter)
Not Applicable
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[LOGO] GLOBAL
POWER
EQUIPMENT GROUP
6120 South Yale
Suite 1480
Tulsa, Oklahoma 74136
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 6, 2002
To Our Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Global
Power Equipment Group Inc., a Delaware corporation (the "Company"), will be
held at the DoubleTree Hotel at Warren Place, 6110 South Yale, Tulsa, Oklahoma,
on Thursday, June 6, 2002, at 10:00 a.m., local time, for the following
purposes:
1. To elect three Class I members to the Board of Directors for three-year
terms;
2. To consider and act upon a proposal to ratify the appointment of
PricewaterhouseCoopers LLP as the independent auditor of the Company for
2002; and
3. To transact any other business that may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on April 23, 2002, as
the record date for the meeting, and only holders of the Company's Common Stock
of record at such time will be entitled to notice of and to vote at the meeting
or any adjournment thereof. A complete list of the stockholders entitled to
vote at the meeting will be open to the examination of any stockholder, for any
purpose germane to the meeting, during ordinary business hours for a period of
10 days prior to the date of the meeting at the offices of the Company and at
the time and place of the meeting.
By Order of the Board of Directors,
/s/ John M. Matheson
John M. Matheson
Secretary
Tulsa, Oklahoma
April 26, 2002
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU
ARE URGED TO VOTE BY INTERNET, TELEPHONE OR MAIL SO THAT YOUR SHARES MAY BE
VOTED IN ACCORDANCE WITH YOUR WISHES. IF YOU DO ATTEND THE MEETING, YOU MAY
WITHDRAW YOUR PROXY AND VOTE IN PERSON.
GLOBAL POWER EQUIPMENT GROUP INC.
6120 South Yale
Suite 1480
Tulsa, Oklahoma 74136
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 6, 2002
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Global Power Equipment Group Inc., a Delaware corporation
(the "Company"), of proxies to be voted at the Annual Meeting of Stockholders
of the Company to be held on June 6, 2002, or at any adjournment thereof (the
"Annual Meeting"), for the purposes set forth in the accompanying Notice of
Annual Meeting. This Proxy Statement and accompanying proxy were first
forwarded on or about April 26, 2002, to stockholders of record on April 23,
2002.
If the accompanying proxy is properly executed and returned, the shares
represented by the proxy will be voted at the Annual Meeting. Stockholders
whose shares are registered in their own names may instruct the proxies how to
vote via the Internet or by telephone in lieu of executing and returning the
accompanying proxy, and the shares represented by the proxy will be voted at
the Annual Meeting. Specific instructions to be followed by any registered
stockholder interested in voting via the Internet or telephone are set forth on
the enclosed proxy card. If a stockholder indicates in his or her proxy a
choice with respect to any matter to be acted upon, that stockholder's shares
will be voted in accordance with such choice. If no choice is indicated on a
proxy, such shares will be voted "FOR" (a) the election of all of the nominees
for directors listed below and (b) the ratification of the appointment of the
independent auditor. A stockholder giving a proxy may revoke it by giving
written notice of revocation to the Secretary of the Company at any time before
it is voted, by executing another valid proxy bearing a later date and
delivering such proxy to the Secretary of the Company prior to or at the Annual
Meeting, by voting again by Internet or telephone, or by attending the Annual
Meeting and voting in person.
The expenses of this proxy solicitation, including the cost of preparing and
mailing this Proxy Statement and accompanying proxy will be borne by the
Company. Such expenses will also include the charges and expenses of banks,
brokerage firms, and other custodians, nominees or fiduciaries for forwarding
solicitation material regarding the Annual Meeting to beneficial owners of the
Company's Common Stock. Solicitation of proxies may be made by mail, telephone,
personal interviews or by other means by the Board of Directors or employees of
the Company who will not be additionally compensated therefor, but who may be
reimbursed for their out-of-pocket expenses in connection therewith.
STOCKHOLDERS ENTITLED TO VOTE
Stockholders of record at the close of business on April 23, 2002 (the
"Record Date"), will be entitled to vote at the Annual Meeting. As of the
Record Date, there were issued and outstanding 43,953,340 shares of Common
Stock, par value $.01 per share (the "Common Stock"), of the Company. Each
share of Common Stock is entitled to one vote. There is no cumulative voting
with respect to the election of directors. The presence in person or by proxy
of the holders of a majority of the shares issued and outstanding at the Annual
Meeting and entitled to vote will constitute a quorum for the transaction of
business. Votes withheld from nominees for directors, abstentions and broker
non-votes will be counted for purposes of determining whether a quorum has been
reached. Votes will be tabulated by an inspector of election appointed by the
Board of Directors of the
Company. With regard to the election of directors, votes may be cast in favor
of or withheld from each nominee; votes that are withheld will have no effect
on the vote. Abstentions, which may be specified on all proposals except the
election of directors, will have the effect of a negative vote. Under
applicable Delaware law, a broker non-vote will not be considered present for
the purpose of calculating the vote on any matter.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors is divided into three approximately equal classes.
The terms of the three classes are staggered so that only one class is elected
at the annual meeting of stockholders each year for a three-year term. The term
of the Class I directors, consisting of Adrian Doherty Jr., Edgar Hotard and
Jerry Ryan will expire at the Annual Meeting, and the accompanying proxy
solicits your vote for three Class I directors. The terms of the Class II
directors and the Class lll directors will expire at the annual meeting of
stockholders to be held in 2003 and 2004, respectively.
The Board of Directors has nominated Adrian Doherty Jr., Edgar Hotard and
Jerry Ryan for re-election as directors, each to hold office until the annual
meeting of stockholders in 2005 and until his successor is duly elected and
qualified, or until the earlier of his death, resignation or retirement. The
persons named as proxies in the accompanying proxy, who have been designated by
the Board of Directors, intend to vote, unless otherwise instructed in such
proxy, for the election of Messrs. Doherty, Hotard and Ryan. Should any of the
nominees become unable for any reason to stand for election as a director of
the Company, it is intended that the persons named in such proxy will vote for
the election of such other person as the Board of Directors may recommend. The
Company knows of no reason why any of the nominees will be unavailable or
unable to serve.
The affirmative vote of the holders of a plurality of the shares present in
person or represented by proxy and entitled to vote at the Annual Meeting is
required for the election of directors. Accordingly, the three nominees for
election as directors at the Annual Meeting who receive the greatest number of
votes cast for election by the holders of Common Stock shall be duly elected
directors upon completion of the vote tabulation at the Annual Meeting. The
Board of Directors recommends a vote "FOR" each of the following nominees for
directors.
Nominees for Directors
Class I
(Term Expires 2005)
Adrian Doherty Jr., age 50. Mr. Doherty became a Director of the Company in
March 2002. Mr. Doherty has been in private business since May 2001. He has
participated in the formation of Anzon Energy Limited, a New Zealand oil and
gas exploration company, and serves as one of its directors. Prior to May 2001,
Mr. Doherty was the senior equity markets professional at Salomon Smith Barney
with responsibility for all energy equity offerings. From 1995 to 1999, he was
a managing director and member of the management committee of the Global
Natural Resources Group at J.P. Morgan & Co. Mr. Doherty earned an A.B. degree
in Geology from Amherst College and an M.B.A. from the Wharton School at the
University of Pennsylvania.
Edgar Hotard, age 58. Mr. Hotard has been a Director since the Company's
formation in May 2001 pursuant to the reorganization of GEEG Holdings, L.L.C.
Mr. Hotard has been a private consultant since January 1999. From July 1992 to
January 1999, Mr. Hotard served as president and chief operating officer of
Praxair Inc., an industrial gases, electronics materials, medical services and
surface technology company. From January 1996
2
to March 1997, he also served as chairman of Chicago Bridge & Iron, Inc., a
global engineering and construction company. He has served as a director of
Edgen Corp. since August 1999 and Home Care Supply, Inc. since July 2000, each
of which is a private company managed by Harvest Partners, Inc. Mr. Hotard also
serves as a director of Global Industries, Ltd. Mr. Hotard earned a B.S. in
Mechanical Engineering from Northwestern University and is a member of the
board of directors of the U.S.-China Business Council.
Jerry Ryan, age 59. Mr. Ryan became a Director of the Company in February
2002. Since January 2000, he has served as a consultant to Fintube
Technologies, Inc., a manufacturer of finned tubes used in a variety of heat
recovery operations and a subsidiary of Lone Star Technologies, Inc. Mr. Ryan
served as chairman of the board of the general partner of Fintube Limited
Partnership from February 1999 until its sale to Lone Star Technologies, Inc.
in January 2000, and for more than five years prior thereto, as chairman of the
board and chief executive officer of the general partner of Fintube Limited
Partnership. Mr. Ryan also serves as a director of Lone Star Technologies, Inc.
and of AAON, Inc.
Directors Continuing in Office
Class II
(Term Expires 2003)
Ira Kleinman, age 45. Mr. Kleinman has been a Director of the Company since
the completion of the reorganization transaction in May 2001. He previously
served as a director of GEEG Holdings, L.L.C. from August 2000 to May 2001.
Since 1992, Mr. Kleinman has served as a general partner of Harvest Partners,
Inc. Prior to joining Harvest Partners, Inc., he held financial management
positions at American International Group and Bank of New York. Mr. Kleinman is
a Certified Public Accountant and earned his bachelors degree from the State
University of New York at Binghamton and his M.B.A. from St. John's University.
Bengt Sohlen, age 69. Mr. Sohlen has been a Director of the Company since
the completion of the reorganization transaction in May 2001. From December
2000 to May 2001, he served as a director of GEEG Holdings, L.L.C. Since
January 1997, Mr. Sohlen has served as a member of Harvest Partners, Inc.'s
advisory board, an informal committee that advises Harvest Partners, Inc. on
investment opportunities. From November 1983 until his retirement in September
1997, Mr. Sohlen served as vice president for strategy and corporate
development for ABB Inc., a subsidiary of ABB Ltd., which manufactures
equipment and provides services to the power transmission and distribution,
automation, and oil, gas and petro-chemical industries. Mr. Sohlen served as a
director of ABB Inc. between September 1976 and October 1983. Mr. Sohlen has an
engineering background derived from training in his native Sweden.
Class Ill
(Term Expires 2004)
Larry Edwards, age 52. Mr. Edwards has been a Director and President and
Chief Executive Officer of the Company since the completion of the
reorganization transaction in May 2001. From June 1998 to May 2001, Mr. Edwards
served as a director of and chief executive officer of GEEG Holdings, L.L.C.
and as president and chief executive officer of GEEG, Inc. From February 1994
until June 1998, Mr. Edwards served as the president of Jason Incorporated's
power generation division, the predecessor of GEEG Holdings, L.L.C. From 1976
until 1994, Mr. Edwards held various positions with Braden Manufacturing,
including those of vice president of operations, general manager and president.
Mr. Edwards earned a B.S. in Industrial Engineering and Management from
Oklahoma State University and an M.B.A. with honors from Oklahoma City
University.
3
Stephen Eisenstein, age 40. Mr. Eisenstein has served as Chairman of the
Board of the Company since the completion of the reorganization transaction in
May 2001. He previously served as chairman of the board of GEEG Holdings,
L.L.C. and a director of GEEG, Inc. from August 2000 to May 2001. Mr.
Eisenstein has been a general partner of Harvest Partners, Inc. since September
1999. Before joining Harvest Partners, Inc., he was a founding partner at
Paribas Principal Partners, which was created in 1996. From 1990 to September
1996, Mr. Eisenstein worked at Paribas in the Merchant Banking Group where he
was a managing director specializing in financing and investing in leveraged
buyouts. From 1988 until 1990, he worked at the Chase Manhattan Bank in the
Media and Telecom Corporate Finance Group, and at Paine Webber Inc. in the
Equity Research Department from 1984 to 1986. He earned a B.A. in Economics
from Tufts University and an M.B.A. from the Wharton School at the University
of Pennsylvania.
Compensation of Directors
Employee directors and directors who are affiliated with Harvest Partners,
Inc., an affiliate of the Company's largest stockholder, receive no additional
compensation for service on the Board of Directors or any committee thereof.
Non-employee directors who are not affiliated with Harvest Partners, Inc.
("Outside Directors") receive an annual retainer of $20,000, a fee of $1,000
for each Board meeting or committee meeting attended in person ($750 per such
meeting if by teleconference), and $1,500 per year for serving as chairman of
any committee. Outside Directors are also eligible to receive non-qualified
stock options under the stock option plans maintained by the Company. During
fiscal 2001, Edgar Hotard and Bengt Sohlen were each granted an option to
purchase 12,500 shares of Common Stock at an exercise price of $14.47 per share
(being the fair market value of the Common Stock on the date of grant) under
the Company's 2000 Stock Option Plan. All directors are reimbursed by the
Company for out-of-pocket expenses incurred by them in connection with their
service on the Board of Directors and any committee thereof.
Meetings and Committees of the Board of Directors
During fiscal 2001, the Board of Directors held four meetings. All of the
directors were present at each meeting. In addition, the Board of Directors
took action 12 times during fiscal 2001 by unanimous written consent. The Board
of Directors has three standing committees: the Executive Committee, the Audit
Committee and the Compensation Committee.
The Executive Committee was established in December 2001 and is composed of
Messrs. Edwards, Eisenstein and Kleinman. The Executive Committee is generally
authorized to act for the Board of Directors, except as such authority is
limited by the Board of Directors or by the laws of the State of Delaware. The
Executive Committee did not meet in fiscal 2001.
The Audit Committee was established in May 2001 and, through March 2002, was
composed of Messrs. Hotard and Sohlen. In March 2002, Mr. Doherty was added as
a member to the Audit Committee. Each of these individuals qualifies as an
"independent" director under the current listing standards of the New York
Stock Exchange. The Audit Committee has adopted a charter and it is attached to
this Proxy Statement as Appendix A. The Audit Committee assists the Board of
Directors in fulfilling its oversight responsibilities. The Audit Committee
reviews (a) the Company's financial reporting process, (b) the Company's
systems of internal controls, and (c) the Company's process for monitoring
compliance with its written policies and with laws and regulations. In
addition, the Audit Committee annually considers the qualifications of the
independent auditor of the Company and the independence of the auditor and
makes recommendations to the Board of Directors on the engagement of the
independent auditor. The Audit Committee also reviews (a) any transactions
between the Company and its officers, directors and principal stockholders, (b)
the plans for and results of audits of the
4
Company, and (c) the results of any internal audits, compliance with any of the
Company's written policies and procedures and the adequacy of the Company's
system of internal accounting controls. The Audit Committee met once during
fiscal 2001. All of the members of the Audit Committee were present at such
meeting.
The Compensation Committee was established in July 2001 and, through March
2002, was composed of Messrs. Hotard and Sohlen. In March 2002, Messrs. Doherty
and Ryan were appointed to serve as the members of the Compensation Committee.
The Compensation Committee reviews the compensation of officers of the Company
and makes recommendations to the Board of Directors regarding such compensation
and reviews the Company's executive compensation policies and practices. The
Compensation Committee also administers generally the Company's 2000 Stock
Option Plan and 2001 Stock Option Plan. The Compensation Committee met two
times during fiscal 2001. All of the members of the Compensation Committee were
present at each meeting.
The Company does not have a standing nominating committee. The Company's
amended and restated By-laws provide that nominations of candidates for
election as directors of the Company may be made at a meeting of stockholders
by or at the direction of the Board of Directors or by any stockholder entitled
to vote at such meeting who complies with the advance notice procedures set
forth therein. These procedures generally require any stockholder who intends
to make a nomination for director at the meeting to deliver notice of such
nomination to the Secretary of the Company not less than 90 nor more than 120
days prior to the first anniversary of the preceding year's annual meeting. The
notice must contain all information about the proposed nominee as would be
required to be included in a proxy statement soliciting proxies for the
election of such nominee, including such nominee's written consent to serve as
a director if so elected. If the Chairman of the meeting determines that a
person is not nominated in accordance with the nomination procedure, such
nomination will be disregarded.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee assists the Board of Directors in fulfilling its
oversight responsibilities with respect to, among other matters, the financial
reporting process and systems of internal controls. The Audit Committee
operates pursuant to a Charter that was adopted by the Board of Directors, a
copy of which is attached to this Proxy Statement as Appendix A.
In the performance of its oversight function, the Audit Committee has
reviewed and discussed with management and the independent auditors the
Company's audited financial statements as of and for the fiscal year ended
December 29, 2001. The Audit Committee has discussed with the independent
auditors, who are responsible for expressing an opinion on the conformity of
the Company's audited financial statements with generally accepted accounting
principles, the matters required to be discussed by Statement on Auditing
Standards No. 61, Communication with Audit Committees, as amended, by the
Auditing Standards Board of the American Institute of Certified Public
Accountants.
In addition, the Audit Committee has received and reviewed the written
disclosures and the letter from the independent auditors required by
Independence Standard No. 1, Independence Discussions with Audit Committees, as
amended, by the Independence Standards Board, has considered the compatibility
of non-audit services with the auditors' independence, and has discussed with
the auditors the auditors' independence.
Management of the Company is responsible for preparing the Company's
financial statements, and the independent auditors are responsible for auditing
the financial statements. The Audit Committee acts only in an oversight
capacity and its activities are not designed to supersede or alter those
traditional responsibilities.
5
Members of the Audit Committee rely without independent verification on the
information provided to them and on the representations made by management and
the independent auditors. The Audit Committee's role does not provide any
special assurances with regard to the Company's financial statements, nor does
it involve a professional evaluation of the quality of the audits performed by
the independent auditors.
Based on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the financial statements referred to
above be included in the Company's Annual Report on Form 10-K for the year
ended December 29, 2001, for filing with the Securities and Exchange Commission.
Audit Committee
Edgar Hotard, Chairman
Adrian Doherty Jr.
Bengt Sohlen
INDEPENDENT AUDITOR FEES FOR FISCAL YEAR 2001
Audit Fees. The aggregate audit fees billed by Arthur Andersen LLP for the
audit of the Company's annual financial statements for the fiscal year ended
December 29, 2001, and for the reviews of the financial statements included in
the Company's Quarterly Reports on Form 10-Q for that fiscal year were $313,000.
Financial Information Systems Design and Implementation Fees. The Company
did not engage Arthur Andersen LLP for professional services relating to
financial information systems design and implementation for the fiscal year
ended December 29, 2001.
All Other Fees. All other fees billed by Arthur Andersen LLP for services
rendered to the Company for the fiscal year ended December 29, 2001, were
$2,089,414. These fees related primarily to the provision of tax services and
services in connection with the Company's initial public offering.
The Audit Committee considered whether the provisions of the services by
Arthur Andersen LLP described above under "All Other Fees" is compatible with
maintaining the independence of Arthur Andersen LLP.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
Following a thorough evaluation, and in accordance with the recommendation
of the Audit Committee, the Board of Directors determined on April 8, 2002, to
engage PricewaterhouseCoopers LLP to serve as the Company's independent auditor
for the fiscal year ending December 28, 2002. Prior to the selection of
PricewaterhouseCoopers LLP, Arthur Andersen LLP served as the Company's
independent auditor. Earlier this year, upon recommendation of the Audit
Committee, the Board authorized the Company to solicit proposals from
additional auditing firms in light of the highly publicized events and
uncertainty involving Arthur Andersen LLP. Due to continued uncertainty
surrounding Arthur Andersen LLP, it was determined that selection of
PricewaterhouseCoopers LLP as the Company's new independent auditor was in the
best interests of the Company.
6
Arthur Andersen LLP's reports on the Company's consolidated financial
statements for each of the fiscal years ended December 29, 2001 and December
30, 2000, did not contain an adverse opinion or disclaimer of opinion, nor were
they qualified or modified as to uncertainty, audit scope or accounting
principles. During the fiscal years ended December 29, 2001 and December 30,
2000, and through April 8, 2002, there were no disagreements with Arthur
Andersen LLP on any matter of accounting principle or practice, financial
statement disclosure, or auditing scope or procedure which, if not resolved to
Arthur Andersen LLP's satisfaction, would have caused them to make reference to
the subject matter in connection with their report on the Company's
consolidated financial statements for such years.
During the fiscal years ended December 29, 2001 and December 30, 2000, and
through April 8, 2002, the Company did not consult PricewaterhouseCoopers LLP
with respect to the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on the Company's consolidated financial statements.
A proposal will be presented at the Annual Meeting asking the stockholders
to ratify the appointment of PricewaterhouseCoopers LLP as the Company's
independent auditor. If the stockholders do not ratify the appointment of
PricewaterhouseCoopers LLP, the Board of Directors will reconsider the
appointment.
The affirmative vote of the holders of a majority of the shares present in
person or by proxy at the Annual Meeting and entitled to vote is required for
the adoption of this proposal. The Board of Directors recommends a vote "FOR"
the ratification of PricewaterhouseCoopers LLP as independent auditor for
fiscal year 2002.
The Company expects that a representative of each of PricewaterhouseCoopers
LLP and Arthur Andersen LLP will be present at the Annual Meeting. Each
representative will be given the opportunity to make a statement if he or she
desires to do so and will be available to respond to appropriate questions.
7
PRINCIPAL STOCKHOLDERS AND
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of April 15, 2002,
regarding the ownership of the Company's Common Stock by (a) all persons known
by the Company to be beneficial owners of more than five percent of such stock,
(b) each director and nominee for director of the Company, (c) each of the
executive officers of the Company named in the Summary Compensation Table
below, and (d) all executive officers and directors of the Company as a group.
Unless otherwise noted, the persons named below have sole voting and investment
power with respect to such shares.
Shares
Beneficially Percentage
Name of Owner or Identity of Group Owned of Class(1)
---------------------------------- ------------ -----------
Harvest Associates III, L.L.C.(2)........................... 13,000,263(3) 29.6%
PPM America Inc.(4)......................................... 4,744,622(5) 10.8
Larry Edwards............................................... 1,159,376(6) 2.6
Stephen Eisenstein.......................................... 13,000,263(7) 29.6
Ira Kleinman................................................ 13,000,263(8) 29.6
Bengt Sohlen................................................ 46,384(9) *
Edgar Hotard................................................ 16,500(10) *
Adrian Doherty Jr........................................... -- --
Jerry Ryan.................................................. -- --
John McSweeney.............................................. 647,616(11) 1.5
Gary Obermiller............................................. 892,769(12) 2.0
Gene Schockemoehl........................................... 841,344(13) 1.9
Michael Hackner............................................. 470,650(14) 1.1
All executive officers and directors as a group (13 persons) 17,495,264(15) 38.5
--------
* Represents less than 1% of the Common Stock outstanding.
(1) Shares of Common Stock which were not outstanding but which could be
acquired by a person upon exercise of an option within sixty days of April
15, 2002, are deemed outstanding for the purpose of computing the
percentage of outstanding shares beneficially owned by such person. Such
shares, however, are not deemed to be outstanding for the purpose of
computing the percentage of outstanding shares beneficially owned by any
other person.
(2) The beneficial owner's address is 280 Park Avenue, 33/rd Floor, New York,
New York 10017. /
(3) Includes 11,440,232 shares of Common Stock owned by Harvest Partners III,
L.P., and 1,560,031 shares of Common Stock owned by Harvest Partners III,
GbR, for each of which Harvest Associates III, L.L.C. is the general
partner. Harvest Associates III, L.L.C. has six members, each of whom has
equal voting rights in such company and who may be deemed to share
beneficial ownership of the shares of Common Stock beneficially owned by
it. The six members are Stephen Eisenstein and Ira Kleinman, each of whom
is a director of the Company, and Harvey Wertheim, Harvey Mallement,
William Kane and Thomas Arenz. Each of Messrs. Eisenstein, Kleinman,
Wertheim, Mallement, Kane and Arenz disclaims beneficial ownership of the
shares of Common Stock owned by Harvest Partners III, L.P. and Harvest
Partners III, GbR. Harvest Partners, Inc., which is controlled by Messrs.
Wertheim and Mallement, provides management services for Harvest Associates
III, L.L.C. in connection with Harvest Partners III, L.P. and Harvest
Partners III, GbR and may be deemed to share beneficial ownership of the
shares of Common Stock owned by Harvest Partners III, L.P. and Harvest
Partners III, GbR. Each of Messrs. Wertheim and Mallement disclaim
beneficial ownership of the shares of Common Stock which Harvest Partners,
Inc. may be deemed to share beneficial ownership with Harvest Associates
III, L.L.C.
8
(4) The beneficial owner's address is 225 West Wacker Drive, Suite 1200,
Chicago, Illinois 60606.
(5) PPM America, Inc. ("PPM"), a registered investment advisor, reported the
beneficial ownership (as of December 31, 2001) of such shares in a Schedule
13G filed with the Securities and Exchange Commission on February 13, 2002.
All such shares are owned by Jackson National Life Insurance Company, PPM's
investment advisory client. PPM possesses voting and dispositive powers
with respect to such shares.
(6) Includes options to purchase 452,151 shares of Common Stock.
(7) Includes 11,440,232 shares of Common Stock owned by Harvest Partners III,
L.P. and 1,560,031 shares of Common Stock owned by Harvest Partners III,
GbR, for each of which Harvest Associates III, L.L.C. is the general
partner. Mr. Eisenstein is a member of Harvest Associates III, L.L.C. and
may be deemed to share beneficial ownership of the shares of Common Stock
beneficially owned by it. Mr. Eisenstein disclaims beneficial ownership of
such shares.
(8) Includes 11,440,232 shares of Common Stock owned by Harvest Partners III,
L.P. and 1,506,031 shares of Common Stock owned by Harvest Partners III,
GbR, for each of which Harvest Associates III, L.L.C. is the general
partner. Mr. Kleinman is a member of Harvest Associates III, L.L.C. and may
be deemed to share beneficial ownership of the shares of Common Stock
beneficially owned by it. Mr. Kleinman disclaims beneficial ownership of
such shares.
(9) Includes options to purchase 12,500 shares of Common Stock.
(10) Includes options to purchase 12,500 shares of Common Stock.
(11) Includes options to purchase 15,000 shares of Common Stock.
(12) Includes options to purchase 343,136 shares of Common Stock.
(13) Includes options to purchase 317,105 shares of Common Stock.
(14) Includes options to purchase 184,904 shares of Common Stock.
(15) Includes options to purchase 1,512,862 shares of Common Stock. Also
includes 11,440,232 shares of Common Stock owned by Harvest Partners III,
L.P. and 1,506,031 shares of Common Stock owned by Harvest Partners III,
GbR, for each of which Harvest Associates III, L.L.C. is the general
partner. Messrs. Eisenstein and Kleinman are members of Harvest Associates
III, L.L.C. and may be deemed to share beneficial ownership of the shares
of Common Stock beneficially owned by it. Messrs. Eisenstein and Kleinman
disclaim beneficial ownership of such shares.
9
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information with respect to the
compensation of the Company's Chief Executive Officer and its four other most
highly compensated executive officers (the "named executive officers"), based
on salary and bonus earned during fiscal 2001, for services in all capacities
to the Company and its subsidiaries during each of the Company's last two
fiscal years.
Long-Term Compensation
-------------------------------
Annual Compensation Awards Payouts
- ---------------------------- --------------------- ---------
Securities
Restricted Underlying Long-Term
Other Annual Stock Options/ Incentive All Other
Name and Fiscal Salary Bonus Compensation Award(s) SARs Payouts Compensation
Principal Position Year ($) ($)(1) ($)(2) ($) (#)(3) ($) ($)(4)
------------------ ------ ------- ------- ------------ ---------- ---------- --------- ------------
Larry Edwards, 2001 343,800 515,700 0 0 75,000 0 190,965
President and Chief 2000 275,000 275,000 0 0 377,151 0 3,494,985
Executive Officer
Gary Obermiller, 2001 235,500 259,050 0 0 50,000 0 168,682
Senior Vice President.... 2000 200,000 160,000 0 0 293,136 0 2,834,703
Gene Schockemoehl, 2001 191,200 210,320 0 0 37,500 0 140,502
Senior Vice President.... 2000 157,000 125,600 0 0 279,605 0 2,548,522
John McSweeney, 2001 329,992 0 0 0 15,000 0 31,464
President of Consolidated 2000 48,230 0 0 0 0 0 8,128
Fabricators, Inc.(5)
Michael Hackner, Chief 2001 154,898 129,408 0 0 32,500 0 86,618
Financial Officer and 2000 120,778 72,467 0 0 152,404 0 1,301,636
Vice President of Finance
--------
(1) Represents bonuses accrued under the Company's 2001 Management Incentive
Compensation Plan that were paid in 2002.
(2) Does not include the value of perquisites and other personal benefits
because the aggregate amount of such compensation, if any, is the lesser of
either $50,000 or 10 percent of the total amount of annual salary and bonus
for any named individual.
(3) Consists solely of options to acquire shares of Common Stock granted under
the Company's 2000 Stock Option Plan.
(4) Amounts for fiscal 2001 include: (a) additional cash payments in
consideration for the cancellation of options in connection with the
Company's recapitalization in August 2000 of $182,405, $147,454, $132,785
and $67,349 to Messrs. Edwards, Obermiller, Schockemoehl and Hackner,
respectively; (b) matching contributions under the Company's 401(k) plan of
$6,800, $5,100, $6,800 and $4,647 to the accounts of Messrs. Edwards,
Obermiller, Schockemoehl and Hackner, respectively; (c) contributions of
$15,300 to the account of Mr. Obermiller and $13,941 to the account of Mr.
Hackner under the Deltak Profit Sharing Plan; and (d) the taxable portion
of life insurance premiums of $1,760, $31,464, $828, $917 and $681 for
Messrs. Edwards, McSweeney, Obermiller, Schockemoehl and Hackner,
respectively.
(5) Mr. McSweeney did not become an employee of the Company until October 2000.
10
Option Grants In Last Fiscal Year
The following table sets forth certain information with respect to options
granted to the named executive officers of the Company during fiscal 2001. The
Company did not grant any stock appreciation rights during fiscal 2001.
Individual Grants
-------------------------------------------------------------
% of Total Potential Realizable Value
Number of Options at Assumed Annual Rates
Securities Granted to of Stock Price Appreciation
Underlying Employees Exercise for Option Term(2)
Options in Fiscal Price Expiration ---------------------------
Name Granted (#) Year ($/Sh)(1) Date 5%($) 10%($)
---- ----------- ---------- --------- ---------- ------- ---------
Larry Edwards.... 75,000 13.7 14.47 10/25/11 682,508 1,729,609
Gary Obermiller.. 50,000 9.1 14.47 10/25/11 455,005 1,153,073
Gene Schockemoehl 37,500 6.9 14.47 10/25/11 341,254 869,805
John McSweeney... 15,000 2.7 14.47 10/25/11 136,502 395,922
Michael Hackner.. 32,500 5.9 14.47 10/25/11 295,753 749,497
--------
(1) The exercise price of the option equals the fair market value of the Common
Stock on the date of grant.
(2) Potential realizable value illustrates the value that might be realized
upon exercise of the options immediately prior to the expiration of their
term (10 years from the date of grant), assuming that the Common Stock
appreciates in value from the date of grant to the end of the option term
at rates of 5% and 10%, respectively, compounded annually. These assumed
annual compound rates of stock price appreciation are mandated by the rules
of the SEC and are not intended to represent estimated or expected
appreciation of the Company's Common Stock.
Aggregated Option Exercises In Last Fiscal Year and Fiscal Year-End Option
Values
The following table sets forth certain information with respect to options
exercised by the named executive officers of the Company during fiscal 2001,
and the number and value of unexercised options held by such executive officers
at the end of the fiscal year. The Company has never granted any stock
appreciation rights.
Value of Unexercised
Shares Number of Securities In-the-Money
Acquired Underlying Unexercised Options at Fiscal Year-End
on Value Options at Fiscal Year-End (#) ($)(1)(2)
Exercise Realized ------------------------------ --------------------------
Name (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
Larry Edwards.... -0- -0- 452,151 -0- 5,719,493 -0-
Gary Obermiller.. -0- -0- 343,136 -0- 4,439,008 -0-
Gene Schockemoehl -0- -0- 317,105 -0- 4,224,279 -0-
John McSweeney... -0- -0- 15,000 -0- 13,200 -0-
Michael Hackner.. -0- -0- 184,904 -0- 2,313,136 -0-
--------
(1) Market value of the underlying securities at exercise date or fiscal
year-end, as the case may be, minus the option exercise price.
(2) The closing price for the Common Stock on the New York Stock Exchange on
December 28, 2001, the last trading day of the Company's fiscal year, was
$15.35.
11
Employment Agreements and Change in Control Arrangements
The Company has entered into employment agreements with each of its named
executive officers. The employment agreements provide for annual base salaries
of not less than $275,000 for Mr. Edwards, $200,000 for Mr. Obermiller,
$157,000 for Mr. Schockemoehl, $120,788 for Mr. Hackner and $330,000 for
Mr. McSweeney. The two-year term of each of the employment agreements with
Messrs. Edwards, Obermiller, Schockemoehl and Hackner expires August 1, 2002,
subject to automatic renewal for additional one year periods annually
thereafter unless the Company provides sixty days prior written notice
otherwise. Pursuant to their respective employment agreements, each of Messrs.
Edwards, Obermiller, Schockemoehl and Hackner:
. is entitled to participate in the Company's employee benefit programs;
. is entitled to participate in the Company's Management Incentive
Compensation Plans or, in the event a Management Incentive Compensation
Plan is not in effect for any bonus year, to receive substantially the
same bonus opportunities as were in place for fiscal 2000;
. in the event employment is terminated by the Company without Cause (as
defined in the respective employment agreement) or by the executive
officer for Good Reason (as defined in the respective employment
agreement to include, among other things, removal from such executive's
specified position as an officer of the Company or a reduction in such
executive's annual base salary without, in each case, such executive's
consent), is entitled to receive his base salary for a twelve-month
period and, if termination is three months after commencement of a new
bonus year, a portion of any bonus earned for the year in which
termination occurred determined on a pro rata basis based on the number
of days of such year employed; and
. has agreed not to compete with the businesses of the Company for a
twelve-month period following termination.
Mr. McSweeney's employment agreement is for a three-year period expiring on
October 31, 2003. In the event Mr. McSweeney's employment is terminated by the
Company without Cause (as defined in the employment agreement) or by him for
Good Reason (as defined in the employment agreement to include, among other
things, his removal as President of Consolidated Fabricators, Inc. or a
reduction in his annual base salary without, in each case, his consent), he is
entitled to receive a lump sum payment equal to the amount of base salary
payable through the expiration date of the employment agreement and to certain
benefits through the term of the employment agreement. Pursuant to the
employment agreement, Mr. McSweeney has agreed not to compete with the
businesses of the Company for a twelve-month period following termination.
The Company's 2001 Stock Option Plan provides that all outstanding options
awarded under such plan, regardless of any vesting requirements or
restrictions, become fully exercisable and free of all restrictions in the
event of a "change in control" of the Company, as defined in such plan. In such
event participants may be entitled to receive, at the discretion of the
Compensation Committee, either (i) the consideration received by the holders of
the Company's Common Stock in such transaction, upon exercise of an option, or
(ii) cash payments equal to the value of the per share consideration to be
received in such transaction or the fair market value per share of the
Company's Common Stock, less the exercise price of an option, multiplied by the
number of shares of Common Stock subject to such option.
Report on Executive Compensation
In July 2001, the Board of Directors established the Compensation Committee,
which is comprised of two outside, non-employee directors. Prior to that time,
the Board of Directors had the responsibility for decisions relating to
compensation of the Company's executive officers. The Compensation Committee
administers the
12
Company's executive compensation program. The role of the Compensation
Committee is to review and make recommendations to the Board of Directors
regarding all forms of compensation provided to the Company's executive
officers. In addition, the Compensation Committee administers the Company's
2000 and 2001 Stock Option Plans. All decisions of the Committee relating to
the compensation of the executive officers of the Company are reviewed by the
full Board of Directors.
Overall Executive Compensation Program. The goals of the Company's
executive compensation program are to align compensation with the Company's
business objectives and performance and enable the Company to attract, retain
and motivate qualified executive officers that contribute to the long-term
success of the Company. The key components of the Company's executive
compensation program are:
. base salary;
. annual incentive bonus awards; and
. equity participation in the form of stock options.
Executive officers are also entitled to customary benefits generally
available to all of the Company's employees, including group medical, dental
and life insurance and participation in the Company's 401(k) plan.
Section 162(m) of the Internal Revenue Code of 1986, as amended, provides
that no publicly-held company shall be permitted to deduct from its income
taxes compensation exceeding $1 million paid to its chief executive officer or
any of its four other highest paid executive officers unless (a) the
compensation is payable solely on account of the attainment of performance
goals, (b) the performance goals are determined by a compensation committee of
two or more outside directors, (c) the material terms under which the
compensation is paid are disclosed to and approved by the stockholders, and (d)
the compensation committee certifies that the performance goals were met.
Neither the Committee nor the Company expects this Section to have an impact,
or result in the loss of a material deduction, with respect to compensation
paid to such executive officers, including stock options granted to such
executive officers.
Base Salary. The Company has entered into employment agreements with each
of the Company's named executive officers, which agreements provide for an
annual base salary that may be increased at the discretion of the Board of
Directors. The Compensation Committee is responsible for reviewing the salary
and other terms of new employment agreements entered into with the Company's
executive officers, as well as reviewing existing employment agreements for
recommendations of any adjustments to the base salaries under the terms of such
agreements. The Committee further reviews and recommends the base salaries for
the Company's other officers and key employees. When reviewing base salaries,
including adjustments to base salaries under existing employment agreements,
the Compensation Committee considers the individual's performance, the past
performance of the Company and the individual's contribution to that
performance, the individual's level of responsibility and competitive pay
practices. The Committee believes that there is necessarily some subjectivity
in recommending base salaries for the Company's executive officers and it does
not utilize any specific objective performance criteria in connection therewith.
Management Incentive Compensation Plan. To provide annual incentive bonus
awards, the Company maintains a Management Incentive Compensation Plan. The
Board of Directors currently adopts a new Management Incentive Compensation
Plan prior to the beginning of each new fiscal year. The purpose of the
Management Incentive Compensation Plan is to enhance stockholder value by
providing eligible employees of the Company, including executive officers, with
an added incentive to achieve specific annual Company targets. The Management
Incentive Compensation Plan also assists the Company in attracting, retaining
and motivating qualified personnel to allow the Company to remain competitive
with its industry peers. The targets are intended to be aligned with the
13
Company's mission so that bonus payments are made only if stockholder interests
are advanced. These targets are established prior to the beginning of each
fiscal year. For fiscal year 2001, the Company had in place the 2001 Management
Incentive Compensation Plan (the "2001 Incentive Plan"). Under the 2001
Incentive Plan, the Company's executive officers, other than John McSweeney,
and other employees selected by the Board of Directors were eligible for cash
bonuses under the 2001 Incentive Plan. Each executive officer of the Company
participating in the 2001 Incentive Pan was eligible to earn a cash bonus
expressed as a percentage of such officer's base salary. Executive officer
incentive bonus opportunities varied by level of responsibility. There was no
minimum incentive award. The maximum percentage of base salary payable as an
incentive bonus was (i) up to 150% for the Company's President and Chief
Executive Officer, (ii) up to 110% for the Company's senior vice presidents,
(iii) up to 90% for the Company's vice presidents and (iv) up to 60% for other
executive participants. For fiscal year 2001, the Company surpassed the target
established under the 2001 Incentive Plan so that the executive officers of the
Company (and other eligible employees) received bonus awards under the 2001
Incentive Plan based on the maximum percentage levels. Bonuses are payable in
the first quarter of the following calendar year.
Stock Options. Equity compensation in the form of stock options is a key
component of the Company's executive compensation program. Stock options are
granted to executive officers primarily based on a subjective evaluation of the
officer's actual or expected contribution to the Company's long-term
performance and the consideration of other factors, such as the size of prior
grants and relative job scope, as well as a review of publicly available data
on senior management compensation at other companies. Stock options are granted
by the Company to aid in the retention of executive officers and to align their
interests with those of the Company's stockholders. Stock options have value
for an executive only if the price of the Company's stock increases above the
fair market value on the date of grant and the executive remains in the
Company's employ throughout the vesting period required for the stock option to
be exercisable. In addition, stock options directly link a portion of the
executive's compensation to the interests of the Company's stockholders by
providing an incentive to maximize stockholder value.
CEO Compensation. During fiscal year 2001, Mr. Edwards served as President
and Chief Executive Officer of the Company. Under the terms of his employment
agreement entered into in August 2000, Mr. Edwards' annual base salary was
established at $275,000 but is subject to increase at the discretion of the
Board of Directors. For fiscal year 2001, Mr. Edwards' base salary was
increased by the Board of Directors to $343,800, determined in the manner
described above. Under the terms of the 2001 Incentive Plan, Mr. Edwards'
maximum target bonus was set at 150% of his base salary. Based on the Company's
performance for fiscal year 2001, Mr. Edwards received a cash bonus (paid in
fiscal year 2002) equal to 150% of his base salary. Mr. Edwards was awarded
stock option grants for a total of 75,000 shares of the Company's common stock
in fiscal year 2001. The number of stock options granted to Mr. Edwards was
determined in the same manner as option grants for the Company's other
executive officers as described above.
Board of Directors Compensation Committee
------------------ ----------------------
Adrian Doherty Jr. Adrian Doherty Jr.
Larry Edwards Jerry Ryan
Stephen Eisenstein
Edgar Hotard
Ira Kleinman
Bengt Sohlen
Jerry Ryan
14
Compensation Committee Interlocks and Insider Participation
Prior to July 2001, the Company's Board of Directors was responsible for all
decisions relating to compensation of the Company's executive officers. Larry
Edwards, an executive officer of the Company, participated in Board
deliberations concerning executive officer compensation.
In July 2001, the Board of Directors established the Compensation Committee,
which, during fiscal 2001, consisted of Edgar Hotard and Bengt Sohlen, each of
whom is a non-employee director. During fiscal 2001, there was no interlocking
relationship between the Board of Directors or the Compensation Committee and
the board of directors or compensation committee of any other company.
See "Certain Transactions" for information regarding certain transactions
between the Company and Harvest Partners, Inc. Stephen Eisenstein and Ira
Kleinman are each a general partner of Harvest Partners, Inc.
Performance Graph
The following graph compares the percentage change in the cumulative total
stockholder return on the Company's Common Stock with the cumulative total
return on the Standard & Poor's SmallCap 600 Index and the Russell 2000 Index
from the date of the Company's initial public offering, May 17, 2001, through
December 29, 2001. Because the Company is the only publicly-traded firm engaged
principally in the design, engineering and fabrication of equipment for gas
turbine power plants, there is no similar industry peer group with which to
compare the Company. The Company has selected for comparison purposes the
Standard & Poor's SmallCap 600 Index and the Russell 2000 Index, which are
separate indices of companies with comparable market capitalizations. The
comparison assumes $100 was invested at the beginning of the period in the
Company's Common Stock (at its initial public offering price) and in each of
the foregoing indices and assumes reinvestment of dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN
Among Global Power Equipment Group Inc., the S&P SmallCap 600 Index and Russell
2000 Index
[CHART]
Amount Invested
5/17/01 12/29/01
----------------------------------------------------------------------
Global Power Equipment Group Inc. ......... $100.00 76.75
S&P SmallCap 600 Index .................... 100.00 101.83
Russell 2000 Index ........................ 100.00 97.79
15
CERTAIN TRANSACTIONS
The Company entered into a management agreement with Harvest Partners, Inc.
in August 2000 in connection with the Company's recapitalization. Under the
management agreement, Harvest Partners, Inc. received a one-time fee of $5.0
million for structuring and implementing the recapitalization and its equity
investment and was entitled to receive certain fees for financial advisory and
strategic planning services provided to the Company. In connection with the
Company's initial public offering in 2001, the management agreement was amended
whereby Harvest Partners, Inc. is entitled to receive an annual management fee
of $1.2 million, payable semi-annually in advance commencing August 1, 2001,
for financial advisory and strategic planning services to be provided to the
Company. In fiscal 2001, the Company paid Harvest Partners, Inc. aggregate fees
and reimbursed expenses of $1,102,000 for financial advisory and strategic
planning services to the Company and its affiliates. In addition, the Company
paid Harvest Partners, Inc. a fee of $500,000 in connection with the
refinancing of the Company's senior credit facility. Stephen Eisenstein and Ira
Kleinman, each a director of the Company, are each a general partner of Harvest
Partners, Inc. and a member of Harvest Associates III, L.L.C., the beneficial
owner of approximately 29.6% of the Company's outstanding shares of Common
Stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10 percent of the Common Stock, to report their initial ownership of the Common
Stock and any subsequent changes in that ownership to the SEC and the New York
Stock Exchange, and to furnish the Company with a copy of each such report. SEC
regulations impose specific due dates for such reports, and the Company is
required to disclose in this Proxy Statement any failure to file by these dates
during and with respect to fiscal 2001.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during and with respect to fiscal 2001, its officers,
directors and more than 10 percent stockholders complied with all applicable
Section 16(a) filing requirements.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be considered by the Company for
inclusion in the proxy materials for the Company for the Company's 2003 Annual
Meeting of Stockholders must be submitted in accordance with the applicable
regulations of the SEC and received by the Company at its principal executive
offices no later than December 27, 2002.
In accordance with the Company's amended and restated By-laws, any
stockholder who intends to present a proposal at the Company's 2003 Annual
Meeting of Stockholders and has not sought inclusion of the proposal in the
Company's proxy materials must provide written notice of such proposal to the
Secretary of the Company not less than 90 nor more than 120 days prior to the
first anniversary date of this year's Annual Meeting of Stockholders.
16
OTHER MATTERS
The Board of Directors knows of no matters other than those described in
this Proxy Statement which will be brought before the Annual Meeting for a vote
of the stockholders. If, however, any other matter requiring a vote of
stockholders arises, the persons named in the accompanying proxy will vote
thereon in accordance with their best judgment. The enclosed proxy confers
discretionary authority to take action with respect to any additional matters
that may come before the meeting.
By Order of the Board of Directors,
/s/ John M. Matheson
John M. Matheson
Secretary
April 26, 2002
Tulsa, Oklahoma
17
APPENDIX A
GLOBAL POWER EQUIPMENT GROUP INC.
AUDIT COMMITTEE CHARTER
Mission Statement
The audit committee of the board of directors of Global Power Equipment
Group Inc. shall assist the board in fulfilling its oversight responsibilities.
The audit committee shall review the financial reporting process, the system of
internal control, the audit process, and the company's process for monitoring
compliance with laws and regulations and the company's code of conduct. In
performing these duties, the audit committee shall work with the board of
directors, management, and the external auditors. Each audit committee member
shall acquire an understanding of the detailed responsibilities of committee
membership as well as the company's business, operations, and risks.
Organization
.. Only current directors of the company are eligible to serve on the audit
committee.
.. The audit committee shall be composed of at least three directors, each of
whom shall be an independent director, free from any relationship that in
the board's opinion would interfere with the exercise of the member's
judgment independent of the company's management.
.. Each audit committee member shall have a working familiarity with basic
finance and accounting practices, and at least one member shall have
expertise related to accounting or financial management.
.. No person may serve as a member of the audit committee if the person or
anyone in the person's immediate family has been an officer or employee of
the company (or any of its affiliates) in the last three years.
.. No person may serve as a member of the audit committee if he or she is an
executive officer of an organization on whose audit committee any executive
officer of the company serves as a member.
.. No person may serve as a member of the audit committee if that person (or
any organization in which that person is a partner, controlling
shareholder, or executive officer) has had a business relationship with the
company in the last three years (including a commercial, industrial,
banking, consulting, legal, accounting or other relationship), unless the
board of directors has specifically determined that, in the board's best
judgment, the relationship does not interfere with the person's exercise of
independent judgment. In making this determination, the board shall
consider, among other things, the materiality of the relationship to the
company and to the person and, if applicable, to the organization with
which the person is affiliated.
Roles and Responsibilities
In carrying out the duties described above and listed below, the audit
committee shall have the power and authority to take any actions consistent
with this charter, the company's by-laws and governing law that the committee
or the board deem necessary or appropriate. As the external auditors are
accountable ultimately to the board of directors and the audit committee, the
board of directors and audit committee shall have the authority and
responsibility to select, evaluate and, where appropriate, replace the external
auditors. The committee shall also have the power to institute special
investigations and, if appropriate, to hire independent counsel and accountants
or other experts to assist in investigations.
A-1
Audit Committee Charter
The audit committee will review this charter and its adequacy annually, and
update it upon receiving approval of changes from the board of directors.
Compliance with Laws and Regulations
The audit committee will:
. Review the effectiveness of the system for monitoring compliance with
laws and regulations and the results of management's investigation and
follow-up (including disciplinary action) of any fraudulent acts or
accounting irregularities.
. Periodically obtain updates from management, the general counsel, and the
tax director or equivalent regarding compliance.
. Be satisfied that all regulatory compliance matters have been considered
in the preparation of the financial statements.
. Review the findings of any examinations by regulatory agencies such as
the Securities and Exchange Commission.
Compliance with Code of Conduct
The audit committee will:
. Ensure that there is a written code of conduct and that all employees are
aware of it.
. Evaluate whether management is communicating the importance of the code
of conduct and the guidelines for acceptable business practices.
. Review the program for monitoring compliance with the code of conduct.
. Periodically obtain updates from management and general counsel regarding
compliance.
Internal Control
The audit committee will:
. Evaluate whether management is communicating the importance of internal
control and ensuring that all persons understand their roles and
responsibilities relating thereto.
. Examine the extent to which internal and external auditors review
computer systems and applications, the security of such systems and
applications, and the contingency plan for processing financial
information in the event of a systems breakdown.
. Ascertain whether internal control recommendations made by internal and
external auditors have been implemented by management.
. Ensure that the external auditors inform the audit committee of any
fraud, illegal acts, deficiencies in internal control, and similar
matters.
A-2
Internal Audit
The audit committee will:
. Meet with the internal auditor annually to review the scope, approach and
plan for internal audits.
. Review with the internal auditor all internal audits.
. Review the activities and organizational structure of the internal audit
function.
. Review the qualifications required for the internal audit function and
concur in the appointment, replacement, reassignment, or dismissal of the
director of internal audit.
. Review the effectiveness of the internal audit function.
External Audit
The audit committee will:
. Meet with the independent accountants at least twice during each year at
the call of the chairman of the audit committee and at such other times
as the chairman may deem necessary or appropriate for any reason,
including a request of the independent accountants.
. Review the external auditors' proposed audit scope and approach.
. Review the performance of the external auditors and recommend to the
board of directors the appointment or discharge of the external auditors.
. Review and confirm the independence of the external auditors by (1)
ensuring that the external auditors submit to the audit committee on a
periodic basis a formal written statement delineating all relationships
between the auditor and the company and (2) reviewing the relationships
disclosed, any nonaudit services provided, and the auditors' assertion of
their independence, in accordance with professional standards.
Financial Reporting
General
The audit committee will:
. Review significant accounting and reporting issues, including recent
professional and regulatory pronouncements, and understand their impact
on the financial statements.
. Question management and the internal and external auditors about
significant risks and exposures and the plans to minimize such risks.
Annual Financial Statements
The audit committee will:
. Review annual financial statements and determine whether they are
complete and consistent with the information known to audit committee
members, and assess whether the financial statements reflect appropriate
accounting principles.
. Closely examine complex or unusual transactions such as restructuring
charges and derivative disclosures.
A-3
. Focus on judgmental areas such as the valuation of assets and liabilities
and the accounting and disclosure of environmental liabilities,
litigation reserves, and other commitments and contingencies.
. Meet with management and the external auditors to review the financial
statements and the results of the audit.
. Review management's handling of proposed audit adjustments identified by
the external auditors.
. Review management's discussion and analysis and other sections of the
annual report before it is released and consider whether the information
provided is adequate and consistent with the members' knowledge of the
company and its operations.
. Ensure that the external auditors communicate required matters to the
audit committee.
. Recommend to the board of directors the amendment or approval for
issuance of the annual financial statements.
Interim Financial Statements
The audit committee will:
. Arrange a briefing on how management develops and summarizes quarterly
financial information, the extent of internal audit involvement, the
extent to which the external auditors review quarterly financial
information, and whether that review is performed on a pre- or
post-issuance basis.
. Meet with management and, if a pre-issuance review was completed, with
the external auditors, either telephonically or in person, to review the
interim financial statements and the results of the review.
. Ensure that the external auditors communicate required matters to the
committee.
. To gain insight into the fairness of the interim statements and
disclosures, obtain explanations from management and from the internal
and external auditors on whether:
. actual financial results for the quarter or interim period varied
significantly from budgeted or projected results;
. changes in financial ratios and relationships in the interim financial
statements are consistent with changes in the company's operations and
financing practices;
. generally accepted accounting principles have been consistently applied;
. there are any actual or proposed changes in accounting or financial
reporting practices;
. there are any significant or unusual events or transactions;
. the company's financial and operating controls are functioning
effectively;
. the company has complied with the terms of loan agreements or security
indentures; and
. the interim financial statements contain adequate and appropriate
disclosures.
Other Responsibilities
The audit committee will:
. Meet with the external auditors, director of internal audit, and
management in separate executive sessions to discuss any matters that the
audit committee or these groups believe should be discussed privately.
A-4
. Ensure that significant findings and recommendations made by the internal
and external auditors are received and discussed on a timely basis.
. Review, with the company's counsel, any legal matters that could have a
significant impact on the company's financial statements.
. Review the policies and procedures in effect for considering officers'
expenses and perquisites.
. Perform other oversight functions as requested by the full board of
directors.
Reporting Responsibilities
The audit committee will:
. Regularly update the board of directors about audit committee activities
and make appropriate recommendations.
. Keep minutes of each meeting of the audit committee which shall be filed
with the minutes of the meetings of the board of directors.
. Establish a meeting schedule which shall be provided to the board of
directors in advance.
A-5
DETACH HERE
PROXY
GLOBAL POWER EQUIPMENT GROUP INC.
This Proxy is Solicited on Behalf of the Board of Directors
for the Annual Meeting of Stockholders to be held June 6, 2002
The undersigned hereby appoints Larry Edwards and John Matheson, and each
of them, with full power of substitution, as proxies to represent and vote all
of the shares of Common Stock the undersigned is entitled to vote at the Annual
Meeting of Stockholders of Global Power Equipment Group Inc. to be held on the
6th day of June, 2002, at 10:00 a.m., local time, at the DoubleTree Hotel at
Warren Place, 6110 South Yale, Tulsa, Oklahoma, and at any and all adjournments
thereof, on all matters coming before said meeting.
PLEASE MARK, SIGN AND DATE THE PROXY ON THE OTHER SIDE
AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
---------------- ----------------
SEE REVERSE SIDE (continued on other side) SEE REVERSE SIDE
---------------- ----------------
GLOBAL POWER EQUIPMENT
GROUP INC.
C/O EQUISERVE
P.O. BOX 43068
PROVIDENCE, RI 02940
----------------- ----------------
Vote by Telephone Vote by Internet
----------------- ----------------
It's fast, convenient, and immediate! It's fast, convenient, and your vote
Call Toll-Free on a Touch-Tone Phone is immediately confirmed and posted.
1-877-PRX-VOTE (1-877-779-8683).
------------------------------------- --------------------------------------
Follows these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement and Proxy Card. Statement and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/geg
3. Enter your Voter Control Number 3. Enter your Voter Control Number
located on your Proxy Card located on your Proxy Card
above your name. above your name.
4. Follow the recorded instructions. 4. Follow the instructions provided.
------------------------------------- --------------------------------------
Your vote is important! Your vote is important!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/geg
anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet
DETACH HERE ZGPE11
Please mark
[X] votes as in
this example.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS
1 AND 2.
THE BOARD RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
1. Election of Directors
Nominees: (01) Adrian Doherty Jr., (02) Edgar Hotard and
(03) Jerry Ryan as Class I Directors.
FOR WITHHELD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
[ ] ___________________________________________________________
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided.
2. Ratification of PricewaterhouseCoopers LLP FOR AGAINST ABSTAIN
as independent auditor of the Company for [ ] [ ] [ ]
fiscal 2002.
3. In their discretion, the proxies are
authorized to vote upon such other
business as may properly come before
the meeting or any adjournments thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
Please sign exactly as name appears herein, date and return promptly. When
shares are held by joint tenants, both must sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by duly authorized officer and
give title of officer. If a partnership, please sign in partnership name by
authorized person and give title or capacity of person signing.
Signature:________________ Date:_______ Signature:________________ Date:________