SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
RDO EQUIPMENT CO.
- --------------------------------------------------------------------------------
(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 transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
[LOGO] RDO(R)
EQUIPMENT CO.
2829 SOUTH UNIVERSITY DRIVE
FARGO, NORTH DAKOTA 58103
(701) 297-4288
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 31, 2000
The annual meeting of stockholders of RDO Equipment Co. will be held in
the Centrum Room of the Knutson Center at Concordia College of Moorhead,
Moorhead, Minnesota, beginning promptly at 11:00 a.m. on Wednesday, May 31,
2000, for the following purposes:
1. To elect directors.
2. To transact such other business as may properly come before
the meeting.
Stockholders of record at the close of business on April 7, 2000 are
entitled to vote at the meeting.
A map with directions to the meeting can be found at the end of this
Proxy Statement.
We look forward to seeing you at the meeting. Whether or not you expect
to attend the meeting, please complete, date, sign and promptly return the
enclosed proxy card in the envelope provided, which requires no postage if
mailed in the United States.
For the Board of Directors,
Ronald D. Offutt
Paul T. Horn
Allan F. Knoll
OFFICE OF THE CHAIRMAN
April 14, 2000
<PAGE>
[LOGO] RDO(R)
EQUIPMENT CO.
2829 SOUTH UNIVERSITY DRIVE
FARGO, NORTH DAKOTA 58103
(701) 297-4288
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 31, 2000
INTRODUCTION
The annual meeting of the stockholders ("Annual Meeting") of RDO
Equipment Co., a Delaware corporation ("Company"), will be held in the Centrum
Room of the Knutson Center at Concordia College of Moorhead, Moorhead,
Minnesota, beginning at 11:00 a.m. on Wednesday, May 31, 2000.
A proxy card is enclosed for your use. YOU ARE SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS TO SIGN AND RETURN THE PROXY CARD IN THE ACCOMPANYING
ENVELOPE. No postage is required if mailed within the United States. The cost of
soliciting proxies, including the preparation, assembly and mailing of proxies
and soliciting material to the recordholders of Class A Common Stock and Class B
Common Stock (collectively, "Common Stock") of the Company, as well as the cost
of forwarding such material to the beneficial owners of Class A Common Stock,
will be borne by the Company. Directors, officers and regular employees of the
Company may, without compensation other than their regular compensation, solicit
proxies by telephone or personal conversation. The Company may reimburse
brokerage firms and others for expenses in forwarding proxy materials to the
beneficial owners of Class A Common Stock.
Any stockholder giving a proxy may revoke it at any time prior to its
use at the Annual Meeting either by giving written notice of such revocation to
the Secretary of the Company, by filing a duly executed proxy bearing a later
date with the Secretary of the Company, or by appearing at the Annual Meeting
and filing written notice of revocation with the Secretary of the Company prior
to use of the proxy. Proxies will be voted as specified by stockholders. Proxies
that are signed by stockholders but that lack any such specification will be
voted in favor of the election of the nominees for directors as listed in this
Proxy Statement. Because the seven director nominees who receive the greatest
number of votes cast for the election of directors at the Annual Meeting will be
elected as directors, votes that are withheld from the election of the director
nominees will be excluded entirely from the vote and will have no effect.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF THE
NOMINEES FOR DIRECTORS AS SET FORTH IN THIS PROXY STATEMENT.
The Company expects that this Proxy Statement and proxy card will be
first mailed to stockholders on or about May 5, 2000.
1
<PAGE>
OUTSTANDING SHARES; VOTING
Only holders of Common Stock of record at the close of business on
April 7, 2000 will be entitled to vote at the Annual Meeting. On such date, the
Company had 5,731,008 outstanding shares of Class A Common Stock, each such
share entitling the holder thereof to one vote per share of Class A Common Stock
(an aggregate of 5,731,008 votes) on each matter to be voted on at the Annual
Meeting, and 7,450,492 outstanding shares of Class B Common Stock, each such
share entitling the holder thereof to four votes per share of Class B Common
Stock (an aggregate of 29,801,968 votes) on each matter to be voted on at the
Annual Meeting. Accordingly, the aggregate number of potential votes at the
Annual Meeting is 35,532,976. Ronald D. Offutt, Chairman and Chief Executive
Officer of the Company, is the holder of all outstanding shares of Class B
Common Stock. Holders of shares of Common Stock vote as a single class on all
matters submitted to a vote of stockholders except with respect to future
issuances of Class B Common Stock and as otherwise required by law.
The presence, in person or by proxy, of the holders of a majority of
voting power of the shares of Common Stock entitled to vote at the Annual
Meeting (17,766,489 votes) is required for a quorum for the transaction of
business. In general, shares of Common Stock represented by a properly signed
and returned proxy card will be counted as shares present and entitled to vote
at the Annual Meeting for the purposes of determining a quorum, without regard
to whether the proxy card reflects votes withheld from a director nominee or an
abstention (or is left blank) or reflects a "broker non-vote" on a matter (i.e.,
a card returned by a broker because voting instructions have not been received
and the broker has no discretionary authority to vote). The election of
directors requires the affirmative vote of a plurality of the total shares
present and entitled to vote. Holders of shares of Common Stock are not entitled
to cumulate voting rights.
PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to each
stockholder who the Company believes to be a beneficial owner of more than five
percent of either class of outstanding Common Stock:
<TABLE>
<CAPTION>
NUMBER OF PERCENT NUMBER OF PERCENT
NAME AND ADDRESS CLASS A SHARES OF CLASS CLASS B SHARES OF CLASS
- ---------------- -------------- -------- -------------- --------
<S> <C> <C> <C> <C>
State of Wisconsin Investment Board (1) 794,600 13.9% -- --
P. O. Box 7842
Madison, Wisconsin 53707
Tweedy, Browne Company LLC 628,048 11.0% -- --
and TBK Partners, L.P. (2)
350 Park Avenue
New York, New York 10022
Dimensional Fund Advisors Inc. (3) 370,300 6.5% -- --
1299 Ocean Avenue
Santa Monica, California 90401
Wellington Management Company, LLP (4) 299,100 5.2% -- --
75 State Street
Boston, Massachusetts 02109
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Allan F. Knoll (5) 655,170 10.3% -- --
2829 South University Drive
Fargo, North Dakota 58103
Paul T. Horn (5) 433,580 7.1% -- --
2829 South University Drive
Fargo, North Dakota 58103
Ronald D. Offutt (6) 294,550 5.1% 7,450,492 100.0%
2829 South University Drive
Fargo, North Dakota 58103
</TABLE>
- ----------------------------------
(1) Based solely upon information contained in Schedule 13G, Amendment No. 3,
of the State of Wisconsin Investment Board ("WIB") dated February 10, 2000.
According to this filing with the Securities and Exchange Commission
("SEC"), WIB is a government agency that manages public pension funds, and
WIB has sole voting power and sole dispositive power over these shares.
(2) Based solely upon information contained in Schedule 13D, Amendment No. 4,
of Tweedy, Browne Company LLC ("TBC") and TBK Partners, L.P. ("TBK") dated
April 12, 2000. According to this filing with the SEC, 528,048 of these
shares are held in the accounts of various customers of TBC, and TBC has
sole voting power over 522,028 of these shares, and shared dispositive
power over 528,048 of these shares. In addition, TBK has sole voting power
and sole dispositive power over 100,000 of these shares.
(3) Based solely upon information contained in Schedule 13G of Dimensional Fund
Advisors Inc. ("DFA") dated February 4, 2000. According to this filing with
the SEC, DFA is a registered investment advisor, and these shares are owned
by registered investment companies to which DFA furnishes investment advice
and by other investment vehicles for which DFA serves as investment
manager. This filing also indicates that DFA has sole voting power and sole
dispositive power over these shares.
(4) Based solely upon information contained in Schedule 13G, Amendment No. 1,
of Wellington Management Company, LLP ("WMC") dated February 9, 2000.
According to this filing with the SEC, WMC is a registered investment
adviser, and clients of WMC hold all of these shares. This filing also
indicates that WMC has shared voting power over 252,000 of these shares,
and shared dispositive power over all of these shares.
(5) See "Election of Directors" and "Beneficial Ownership of Management" below
for more information about Messrs. Knoll and Horn, who are directors and
officers of the Company, and their respective beneficial ownership of Class
A Common Stock.
(6) Mr. Offutt is the Company's founder and principal stockholder. See
"Election of Directors" and "Beneficial Ownership of Management" below for
more information about Mr. Offutt and his beneficial ownership of Common
Stock. Mr. Offutt has informed the Company that he intends to vote his
shares in accordance with the recommendations of the Company's Board of
Directors.
ELECTION OF DIRECTORS
NOMINATION
The Company's Bylaws provide that the number of directors that shall
constitute the Board of Directors ("Board") shall be not less than three and not
more than nine members, the exact number of which shall be fixed by the Board.
There are currently seven members of the Board. By action of the Board taken on
March 16, 2000, the Board resolved to fix the number of directors at seven and
to nominate seven persons to stand for election at the 2000 Annual Meeting of
Stockholders. All of the nominees are
3
<PAGE>
currently members of the Board. Directors elected at the Annual Meeting will
hold office until the next Annual Meeting or until their successors are duly
elected and qualified.
The seven director nominees who receive the greatest number of votes
cast for the election of directors at the Annual Meeting will be elected as
directors. Votes that are withheld from the election of the director nominees
will be excluded entirely from the vote and have no effect. The Board recommends
a vote FOR the election of each of the nominees listed in this Proxy Statement.
The Board intends to vote the proxies solicited on its behalf (other than
proxies in which the vote is withheld) for the election of each of the nominees
as directors. If, prior to the Annual Meeting, the Board should learn that any
of the nominees will be unable to serve by reason of death, incapacity or other
unexpected occurrence, the proxies will be cast for another nominee to be
designated by the Board to fill such vacancy, unless a shareholder indicates to
the contrary on his or her proxy. Alternatively, the proxies may, at the Board's
discretion, be voted for such fewer nominees as results from such death,
incapacity or other unexpected occurrence. The Board has no reason to believe
that any of the nominees will be unable to serve. Under an agreement with Deere
& Company ("Deere"), a principal supplier of equipment to the Company, Deere has
the right to have input with respect to the selection of nominees to the
Company's Board and the removal of directors. The Board selected all of the
nominees, and the selections were not based on any input from Deere. There are
no other agreements or arrangements between a nominee and any other person
pursuant to which such nominee was selected.
INFORMATION ABOUT NOMINEES
The following table sets forth certain information as of March 31, 2000
which has been furnished to the Company by the persons who have been nominated
by the Board to serve as directors until the Annual Meeting in calendar 2001:
DIRECTOR
NOMINEES FOR ELECTION AGE PRINCIPAL OCCUPATION SINCE
- --------------------- --- -------------------- -----
Ronald D. Offutt 57 Chairman and Chief Executive Officer 1968
of R.D. Offutt Company
Paul T. Horn 57 President of the Company 1986
Allan F. Knoll 56 Chief Financial Officer and Secretary 1974
of R.D. Offutt Company
Bradford M. Freeman 58 Partner of Freeman Spogli & Co. 1997
Ray A. Goldberg 73 George M. Moffett Professor of 1997
Agriculture and Business, Emeritus,
at the Harvard Graduate School of
Business Administration
Norman M. Jones 69 Member, Board of Directors of LB 1997
Community Bank & Trust
James D. Watkins 52 Owner and President of J.D. Watkins 1997
Enterprises, Inc.
4
<PAGE>
OTHER INFORMATION ABOUT NOMINEES
RONALD D. OFFUTT is the Company's founder, Chairman, Chief Executive
Officer and principal stockholder. He has served as a member of the Company's
Office of the Chairman since December 1998, and served as President of the
Company from its formation in 1968 until August 1996. Mr. Offutt also serves as
Chief Executive Officer and Chairman of the Board of R.D. Offutt Company
("Offutt Co.") and other entities he owns, controls or manages (collectively,
"Offutt Entities") which are engaged in a variety of businesses such as farming,
food processing, auto dealerships and agricultural financing activities, some of
which transact business with the Company. See "Certain Relationships and Related
Transactions." Mr. Offutt spent approximately one-fourth of his time on the
business of the Company during fiscal 2000. He is Former Chairman of the Board
of Regents of Concordia College of Moorhead and is a graduate of Concordia
College of Moorhead with a degree in Economics. Mr. Offutt is the brother-in-law
of Larry E. Scott, Senior Vice President - Special Projects, and the father of
Christi J. Offutt, Senior Vice President - Midwest Agriculture.
PAUL T. HORN has served as a member of the Company's Office of the
Chairman since December 1998, as President of the Company since August 1996, and
as a director of the Company since 1986. Mr. Horn also served as Chief Operating
Officer of the Company from 1986 through 1999. Prior to October 1996, he was an
employee of Offutt Co. and spent approximately one-fourth of his time on the
business of the Company. Since such date, he has been an employee of the Company
and has spent substantially all of his time on the business of the Company. Mr.
Horn serves as a director and officer and is a beneficial stockholder of many of
the Offutt Entities. Mr. Horn currently serves as Vice Chairman of the Board of
Directors of Northern Grain Company, a regional grain elevator. Mr. Horn is a
graduate of Michigan State University with degrees in Business Administration
and Agronomy.
ALLAN F. KNOLL has served as a member of the Company's Office of the
Chairman since December 1998 and as Secretary and a director of the Company
since 1974. He served as Chief Financial Officer of the Company from 1974
through January 1999. Mr. Knoll also serves as Chief Financial Officer and
Secretary of Offutt Co., and serves as a director and officer and is a
beneficial stockholder of many of the Offutt Entities. Mr. Knoll spent
approximately one-third of his time on the business of the Company during fiscal
2000. Mr. Knoll is a graduate of Moorhead State University with degrees in
Business Administration and Accounting.
BRADFORD M. FREEMAN has been a director of the Company since January
1997. Mr. Freeman is a founding partner of Freeman Spogli & Co., a private
equity investment firm with offices in Los Angeles and New York. Since its
founding in 1983, Freeman Spogli & Co. has organized the acquisitions of 30
companies with aggregate transaction values in excess of $10 billion. Mr.
Freeman serves on the Board of Directors of CB Richard Ellis Services, Inc. and
serves on the Board of Trustees of Stanford University. Mr. Freeman is a
graduate of Stanford University and Harvard Business School.
RAY A. GOLDBERG has been a director of the Company since January 1997.
Mr. Goldberg has been a professor at the Harvard Graduate School of Business
Administration since 1955 and became emeritus in July 1997. He also serves as
faculty chairman of the Agribusiness Senior Management Seminar. Mr. Goldberg
serves on the Board of Directors of the following companies: Smithfield Foods,
Inc., the largest vertically integrated producer and marketer of fresh pork and
processed meats in the United States; Cybercrop.com, a global internet company
that puts buyers and sellers of agricultural products together; Daymon
Associates, a private label food leader that also provides coordination between
food manufacturers and retailers; ICS Food One, a business-to-business internet
food manufacturer; and Veritec Inc., a technology company that monitors quality
control for food and pharmaceutical products.
5
<PAGE>
NORMAN M. JONES has been a director of the Company since January 1997.
In December 1996, Mr. Jones organized Metro Bancorp, Inc., a regional banking
firm located in Minneapolis, Minnesota, and served as its Chairman until its
acquisition by LB Community Bank & Trust ("LB") in March 1999 at which time he
became a member of the Board of Directors of LB. From 1995 to July 1997, Mr.
Jones was the Chairman of First Bank Savings, fsb, the thrift subsidiary of U.S.
Bancorp (formerly First Bank System, Inc.). Prior to 1995, Mr. Jones was the
Chairman and Chief Executive Officer of Metropolitan Financial Corporation, a
regional thrift holding company, where he was employed from 1952 through 1995
when U.S. Bancorp acquired it. Mr. Jones is a board member and Chairman of
Luther Seminary Foundation, an Advisory Board Member for Slumberland, Inc., a
retail furniture chain, and an Advisory Board Member for the Board of Pension
for the Evangelical Lutheran Church of America. Mr. Jones is a graduate of
Concordia College of Moorhead.
JAMES D. WATKINS has been a director of the Company since January 1997.
Mr. Watkins founded J.D. Watkins Enterprises, Inc. (an investment company
involved in domestic and international companies, acquisitions and investments)
in June 1993 and continues to serve as its President. Mr. Watkins founded Golden
Valley Microwave Foods, Inc. (a company specializing in food products designed
for use in microwave ovens) in 1978 and continuously served as its Chairman and
Chief Executive Officer until it was acquired by ConAgra, Inc. (a diversified
international food company) in July 1991. Mr. Watkins served in ConAgra's Office
of the President as President and Chief Operating Officer of ConAgra Diversified
Products Companies until July 1997. Mr. Watkins currently serves as a Trustee of
Ronald McDonald House Charities and as a member of the Board of Overseers,
Carlson School of Management, University of Minnesota. Mr. Watkins is a graduate
of the University of Minnesota with a degree in Economics and Fine Arts.
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
The business and affairs of the Company are managed by the Board, which
held four meetings during the fiscal year ended January 31, 2000. Committees
established and maintained by the Board include the Audit Committee, the
Compensation Committee and the Executive Committee. Each director attended at
least 75% of all meetings of the Board and committees on which he served during
fiscal 2000.
The responsibilities of the Audit Committee include the authority to
review (i) the accounting, auditing and reporting practices of the Company, (ii)
the annual financial statements of the Company, (iii) the selection and work of
the Company's independent auditors, and (iv) the adequacy of internal controls.
The Audit Committee held four meetings during fiscal 2000. Messrs. Goldberg,
Jones and Knoll are the current members of the Audit Committee.
The responsibilities of the Compensation Committee include reviewing
and recommending the compensation for executive officers, reviewing Company-wide
employee benefit plans, and administering the Company's 1996 Stock Incentive
Plan (the "Incentive Plan"). The Compensation Committee held three meetings
during fiscal 2000 and took action in writing on one other occasion. Messrs.
Freeman, Knoll and Watkins are the current members of the Compensation
Committee.
The Executive Committee has the authority to take all actions that the
Board as a whole is able to take, except as limited by applicable law. The
Executive Committee did not hold any meetings during fiscal 2000. Messrs.
Freeman, Horn, Knoll and Offutt are the current members of the Executive
Committee.
6
<PAGE>
COMPENSATION OF DIRECTORS
Directors who are not employees or officers of the Company receive
$1,000 per month and $500 for each Board and committee meeting attended.
Directors who are employees or officers of the Company do not receive additional
compensation for service as a director. In addition, all directors are entitled
to be reimbursed for certain expenses in connection with attendance at Board and
committee meetings.
The Incentive Plan provides that a non-employee who becomes a director
of the Company will receive an option to purchase 10,000 shares of Class A
Common Stock, with such vesting periods as the Board or the Compensation
Committee may determine. Directors are eligible to receive options in addition
to these initial grants.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company historically has engaged, and expects to engage in the
future, in business transactions with various Offutt Entities, including Ag
Capital Company ("Ag Capital"), ACL Company, LLC ("ACL") and Farmers Equipment
Rental, Inc. ("FER"), financing institutions which are controlled by Mr. Offutt
and provide significant working capital and floor plan financing to the Company
and/or financing to the Company's customers. Messrs. Offutt, Horn and Knoll each
serve as officers or directors and have ownership interests in various of the
Offutt Entities, including all of the Offutt Entities which have engaged in and
will continue to engage in transactions with the Company, as described below.
The Company believes that all of these transactions were made on terms no less
favorable to the Company than could have been obtained from unaffiliated third
parties. All transactions between the Company and any of the Offutt Entities or
any of the Company's officers, directors, principal stockholders and their
affiliates are approved both by a majority of all members of the Board and by a
majority of the independent and disinterested outside directors, and are on
terms believed to be no less favorable to the Company than could be obtained
from unaffiliated third parties.
The Company had sales to various Offutt Entities of equipment, trucks
and related parts and service totaling $2.2 million in fiscal 2000.
At times during fiscal 2000, the Company leased 26 of its store
locations and real estate for a potential dealership site from an Offutt Entity,
and leased many of its service vehicles from ACL and FER. Total rent expense for
these leases was $5.3 million in fiscal 2000. These leases have terms expiring
at various times from 2000 to 2010. The Company also leased two of its
agricultural dealership facilities from an affiliate of a former officer of the
Company, and three of its construction equipment rental facilities, one rental
administration building and one construction equipment dealership facility from
an affiliate of another former officer of the Company. Total rent expenses in
fiscal 2000 for these leases were $240,000 and $221,640, respectively.
The Company receives corporate support services from various Offutt
Entities, including office space for its executive offices, use of conference
and meeting facilities, use of an aircraft for Company business, administration
of the Company's tax exempt voluntary employee benefit trust, real estate
management services, and clerical and legal services. Total charges for such
services were $455,447 in fiscal 2000. All such services are provided to the
Company pursuant to a corporate services agreement, which is terminable by the
Company in whole or in part on 30 days' notice, on the same cost basis as in
prior years (based on pro rata usage of services or at a fixed charge).
7
<PAGE>
Ag Capital, ACL and FER provide financing to the Company's customers.
The total amount of such customer financing outstanding as of the end of fiscal
2000 was $14.0 million. To facilitate sales to certain customers, the Company
guarantees a portion of the outstanding balances of certain customer notes and
lease contracts financed by third parties, including customer financing provided
by Ag Capital, ACL and FER. The amount guaranteed by the Company to Ag Capital,
ACL and FER for customer financing was $1.4 million as of January 31, 2000.
During fiscal 2000, the Company securitized (i.e., sold) certain loan
and lease receivables to a special-purpose corporation that is a wholly owned
subsidiary of Ag Capital. Upon sale, a gain is recognized on the receivables for
the difference between carrying value and the sales proceeds based on estimates
of future expected cash flows including adjustments for prepayments and credit
losses. The Company serviced the underlying receivables on behalf of the
special-purpose corporation in return for a fee. The Company sold approximately
$29.4 million of loan and lease receivables during fiscal 2000. Approximately
$1.6 million of gains on sales and servicing fee income were recognized. In
connection with the securitization, the Company was liable for up to 10% of the
amount of the aggregate outstanding contracts to the special-purpose
corporation. In December 1999, the Company replaced this securitization
financing structure with a more favorable financing arrangement. This
transaction included repurchasing all of the underlying receivables from the
special-purpose corporation for $53.9 million and selling them to the new
financing sources for a one-time loss of $399,000.
The Company finances certain of its working capital needs, primarily
inventory financing for non-Deere equipment, receivables, fixed assets and
acquisitions, through Ag Capital. Such financing typically bears interest based
on LIBOR and the prime rate as they vary from time to time. Total interest paid
by the Company to Ag Capital was $3.6 million in fiscal 2000. The total amount
outstanding under these financing arrangements at January 31, 2000 was $34.0
million, with interest rates based on LIBOR and the prime rate (8.33% to 8.58%).
Under an agreement with Deere, Mr. Offutt personally guarantees all
Company obligations to Deere. Mr. Offutt has the right to terminate his personal
guaranty at any time, which would require the Company to obtain a letter of
credit in an amount meeting Deere's then current guidelines from a bank
acceptable to Deere. As of January 31, 2000, the required amount of the letter
of credit to replace Mr. Offutt's personal guaranty was approximately $22.4
million. The Company estimates that it would cost approximately $224,000 per
year to replace Mr. Offutt's personal guarantee with a letter of credit.
As part of the consideration paid to acquire the operating assets of an
agricultural dealership in fiscal 1997, the Company signed a five-year note in
the amount of $1.0 million with an interest rate of 8.25% per annum. A former
officer of the Company was the principal stockholder of the acquired dealership.
During fiscal 2000, the Company made scheduled installment payments of principal
and interest on the note in the amounts of $200,000 and $49,500, respectively.
The Company also agreed to pay supplemental consideration in the event the
acquired dealership met certain operating and profit objectives during the three
years ending September 30, 1999. As of January 31, 2000, the amount of $143,000
had been incurred and accrued for as a result of this obligation for periods
prior to fiscal 2000.
Historically and prior to the Company's initial public offering in
January 1997 (the "Offering"), the Company elected to be taxed as an S
corporation. Through fiscal 1996, a portion of the net income of the Company was
distributed to its stockholders, primarily to enable them to pay the tax
liability incurred by them due to the Company's election to be taxed as an S
corporation. During fiscal 1997 and prior to the Offering, the Company declared
dividends to its stockholders of all the net income of the Company for fiscal
1997. Simultaneously with the Offering, the Company paid from the net proceeds
of the Offering to
8
<PAGE>
its pre-Offering stockholders an additional aggregate distribution of $15.0
million. This amount represents substantially all of the previously
undistributed, accumulated net income of the Company as of January 31, 1996 with
respect to which such stockholders had previously paid taxes. The Company
entered into a tax agreement with its pre-Offering stockholders prior to the
Offering. This agreement provides that, to the extent such undistributed taxable
income of the Company, as subsequently established in connection with the filing
of the Company's tax return for the Company's last S corporation tax year, is
less than these distributions, such stockholders will make a payment equal to
such difference to the Company, and if such undistributed taxable income is
greater than these distributions, the Company will make an additional
distribution equal to such difference to such stockholders. This agreement also
provides that the Company will indemnify its pre-Offering stockholders against
additional income taxes resulting from adjustments made (as a result of a final
determination made by a competent tax authority) to the taxable income reported
by the Company as an S corporation for periods prior to termination of the S
corporation status, but only to the extent those adjustments provide a tax
benefit to the Company.
In connection with the termination of the Company's S corporation
status, the Company and Mr. Offutt entered into a mutual indemnification
agreement relating to federal and certain state and local income tax liabilities
of the Company and for tax years during which the Company elected to be treated
as an S corporation. This agreement generally provides that the Company will
indemnify Mr. Offutt, and Mr. Offutt will indemnify the Company, against any
increase in the indemnified party's income tax liabilities (including interest
and penalties and all expenses, attorneys' fees and accountants' fees incurred
in connection therewith) for those jurisdictions in which an S corporation
election was made or deemed to have been made. Mr. Offutt's indemnification is
limited to the prior S corporation distributions he received.
BENEFICIAL OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of Common Stock of the Company as of March 31, 2000, unless otherwise
noted, for (a) each director, nominee for director and officer named in the
Summary Compensation Table (set forth below), and (b) all officers and directors
of the Company as a group. The address for all officers and directors of the
Company is 2829 South University Drive, Fargo, North Dakota 58103.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF TOTAL
----------------------------- CLASS A AND PERCENT OF TOTAL
NAME OF STOCKHOLDER CLASS A(1) CLASS B CLASS B SHARES VOTING POWER(2)
- ------------------- ---------- ------- -------------- ---------------
<S> <C> <C> <C> <C>
Ronald D. Offutt 294,550(3)(4) 7,450,492 58.5% 84.6%
Paul T. Horn 433,580(5) -- 3.3% 1.3%
Allan F. Knoll 655,170(6) -- 5.0% 1.9%
Bradford M. Freeman 72,000 -- * *
Ray A. Goldberg 23,500 -- * *
Norman M. Jones 68,615 -- * *
James D. Watkins 57,000 -- * *
Thomas K. Espel 21,416 -- * *
Kenneth J. Horner, Jr. 7,500 -- * *
Larry E. Scott 207,977(7) -- 1.6% *
John P. Summerville 4,000 -- * *
All officers and directors
as a group (24 persons) 1,215,640(3)(4)(7) 7,450,492 64.2% 86.5%
</TABLE>
9
<PAGE>
- ------------------------------------
* Less than one percent.
(1) Includes 52,000, 13,000, 13,000, 22,000, 22,000, 22,000, 22,000, 6,500,
500, 5,200, 4,000 and 314,250 shares subject to option which are held by
Messrs. Offutt, Horn, Knoll, Freeman, Goldberg, Jones, Watkins, Espel,
Horner, Scott, Summerville and all officers and directors as a group,
respectively, which were exercisable on or within 60 days after March 31,
2000.
(2) In calculating the percent of total voting power, the voting power of
shares of Class A Common Stock (one vote per share) and Class B Common
Stock (four votes per share) is aggregated.
(3) Excludes 7,450,492 shares of Class A Common Stock into which Mr. Offutt's
7,450,492 shares of Class B Common Stock are convertible on a one-for-one
basis.
(4) Excludes 12,903 shares of Class A Common Stock owned by Mr. Offutt's spouse
as to which shares he disclaims any beneficial ownership.
(5) Includes 383,005 shares of Class A Common Stock that Mr. Horn has the right
to acquire from Mr. Offutt pursuant to an option agreement.
(6) Includes 608,595 shares of Class A Common Stock that Mr. Knoll has the
right to acquire from Mr. Offutt pursuant to an option agreement. Excludes
100 shares of Class A Common Stock owned by Mr. Knoll's spouse as to which
shares he disclaims any beneficial ownership.
(7) Excludes 97,784 shares of Class A Common Stock owned by Mr. Scott's spouse
as to which shares he disclaims any beneficial ownership.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and all persons who beneficially own more than 10% of the
outstanding shares of the Company's Class A Common Stock to file with the SEC
initial reports of ownership and reports of changes in ownership of the
Company's Class A Common Stock. Executive officers, directors and greater than
10% beneficial owners are also required to furnish the Company with copies of
all Section 16(a) reports they file. The Company believes that all directors,
executive officers and beneficial owners of more than 10% of the Company's Class
A Common Stock have filed with the SEC on a timely basis all reports required to
be filed under Section 16 of the Exchange Act.
EXECUTIVE COMPENSATION AND OTHER BENEFITS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the cash and non-cash compensation for
each of the last three fiscal years awarded to or earned by the members of the
Office of the Chairman (Messrs. Offutt, Horn and Knoll) and by each of the four
most highly paid officers of the Company for fiscal 2000:
10
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
----------------
ANNUAL COMPENSATION NUMBER OF SHARES
NAME AND PRINCIPAL POSITION(S) FISCAL ----------------------- UNDERLYING ALL OTHER
DURING FISCAL 2000 YEAR SALARY CASH BONUS OPTIONS(1) COMPENSATION(2)
------------------ ---- ------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Ronald D. Offutt 2000 -- -- -- --
CHAIRMAN AND CHIEF EXECUTIVE 1999 -- -- 130,000 --
OFFICER 1998 $50,000 -- -- --
Paul T. Horn 2000 $150,000 -- -- --
PRESIDENT AND CHIEF OPERATING 1999 $150,000 -- 32,500 --
OFFICER 1998 $150,000 -- -- --
Allan F. Knoll 2000 -- -- -- --
CORPORATE SECRETARY 1999 $50,000 -- 32,500 --
1998 $50,000 -- -- --
Thomas K. Espel (3) 2000 $190,000 $40,000 32,500 --
CHIEF FINANCIAL OFFICER 1999 -- -- -- --
Kenneth J. Horner, Jr. (4) 2000 $147,308 $60,000 2,500 --
EXECUTIVE VICE PRESIDENT - 1999 $64,751 -- -- --
CONSTRUCTION EQUIPMENT
Larry E. Scott 2000 $160,000 $47,334 -- --
SENIOR VICE PRESIDENT - SOUTH- 1999 $135,000 $24,435 13,000 --
WEST CONSTRUCTION EQUIPMENT 1998 $130,000 $60,261 -- --
John P. Summerville (5) 2000 $106,731 $115,500 20,000 --
SENIOR VICE PRESIDENT - SOUTH
CENTRAL CONSTRUCTION
EQUIPMENT
</TABLE>
- -----------------------------------------
(1) All options were granted under the Incentive Plan.
(2) No person named in this table received perquisites or other personal
benefits exceeding $50,000 or 10% of such person's total annual salary and
bonus.
(3) Mr. Espel was appointed Executive Vice President - Finance of the Company
in August 1998. Prior to becoming Chief Financial Officer in February 1999,
he did not receive compensation directly from the Company other than the
grant of an option to purchase 32,500 shares of Common Stock.
(4) Mr. Horner became an employee of the Company in July 1998. His compensation
for fiscal 1999 represents the seven-month period through January 1999.
(5) Mr. Summerville became an employee of the Company in May 1999. His
compensation for fiscal 2000 represents the nine-month period through
January 2000.
COO EMPLOYMENT ARRANGEMENTS
Gary L. Weihs became Chief Operating Officer of the Company in January
2000. The terms of his employment included an initial one-time payment of
$100,000 and an initial annual base salary of
11
<PAGE>
$250,000 to be reviewed annually. Mr. Weihs is eligible to receive an annual
bonus based upon the Company and Mr. Weihs achieving various performance
criteria. The amount of the bonus will be fifty percent of his base salary if
target goals are achieved, with a maximum of two hundred percent of his base
salary for exceeding those target goals.
Mr. Weihs was granted an option to purchase 200,000 shares of Common
Stock at an exercise price of $5.875 per share, the fair market value of the
Common Stock on the date of grant. This option vested with respect to 100,000
shares on the date of grant. The remaining 100,000 shares will vest on the fifth
anniversary of the date of grant, or such earlier date as various performance
criteria are achieved. This option expires on the tenth anniversary of its date
of grant.
Additional options will be granted to Mr. Weihs with respect to 33,334
shares of Common Stock on the first anniversary of his date of employment,
33,333 shares on his second anniversary and 33,333 shares on his third
anniversary. These options will have exercise prices equal to the fair market
values of the Common Stock on their respective dates of grant. Each option will
expire on the tenth anniversary of its date of grant.
If Mr. Weihs is discharged for other than just cause, or if there is a
change in control of the Company that results in his discharge, Mr. Weihs will
be entitled to receive his base salary for a two-year period. He will also be
entitled during this two-year period to receive aggregate payments equal to the
bonus payments he received for the two years prior to his discharge.
OPTIONS GRANTED
The following table provides information regarding the only person
named in the foregoing Summary Compensation Table who received an option grant
during fiscal 2000:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL RATES
SHARES PERCENT OF OF STOCK PRICE APPRECIATION
UNDERLYING TOTAL OPTIONS EXERCISE FOR OPTION TERM(1)
OPTIONS GRANTED IN PRICE PER EXPIRATION ------------------
NAME GRANTED FISCAL 2000 SHARE DATE 5% 10%
- ---- ------- ----------- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
John P. Summerville 20,000 (2) 9.1% $8.6875 5/2/09 $109,270 $276,913
</TABLE>
- -----------------------------
(1) The five and ten percent rates of appreciation are set by the rules of the
Securities and Exchange Commission and are not intended to forecast
possible future appreciation, if any, of the price of Common Stock.
(2) This option was granted under the Incentive Plan on May 3, 1999 at the then
fair market value of Common Stock. It becomes exercisable in twenty percent
annual installments commencing May 3, 2000 and becomes immediately
exercisable in full upon death, disability, retirement or change in control
of the Company.
OPTION EXERCISES AND OPTION VALUES
The following table provides information regarding option exercises and
the value of unexercised options held by the persons named in the foregoing
Summary Compensation Table:
12
<PAGE>
AGGREGATED OPTION EXERCISES IN FISCAL 2000
AND OPTION VALUES AT THE END OF FISCAL 2000
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT JANUARY 31, 2000 AT JANUARY 31, 2000(1)
ACQUIRED VALUE ----------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ronald D. Offutt 0 0 52,000 78,000 -- --
Paul T. Horn 0 0 13,000 19,500 -- --
Allan F. Knoll 0 0 13,000 19,500 -- --
Thomas K. Espel 0 0 6,500 26,000 -- --
Kenneth J. Horner, Jr. 0 0 500 2,000 -- --
Larry E. Scott 0 0 5,200 7,800 -- --
John P. Summerville 0 0 0 20,000 -- --
</TABLE>
(1) Since the closing price of Common Stock on the last trading day of fiscal
2000 ($5.94 per share) was less than the exercise prices of all unexercised
options held by these persons, there were no unexercised in-the-money
options at fiscal year end.
CONFIDENTIALITY AGREEMENTS
Option grants to officers of the Company are conditioned upon the
recipient having signed an agreement regarding confidential information,
non-competition and inventions. These agreements generally prohibit disclosure
of confidential information to anyone outside the Company both during and after
employment, restricts the employee from competing with the Company for a period
of time after termination of employment with the Company, and provides that any
inventions or other works of authorship relating to or resulting from the
employee's work for the Company will be the exclusive property of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2000, no member of the Compensation Committee (i) was an
officer, former officer or employee of the Company, except Mr. Knoll, or (ii)
had any business relationship or conducted any transactions with the Company,
other than the relationships disclosed under "Election of Directors - Certain
Relationships and Related Transactions" involving Mr. Knoll.
During fiscal 2000, no officer of the Company served as (i) a member of
the compensation committee (or other board committee performing equivalent
functions or, in the absence of any such committee, the entire board of
directors) of another entity, one of whose officers served on the Board, other
than Messrs. Offutt, Horn and Knoll with respect to the Offutt Entities, Mr.
Espel with respect to Ag Capital, and Ms. Offutt with respect to PROffutt
Limited Partnership (an Offutt Entity), or (ii) a director of another entity,
one of whose officers served on the Board, other than Messrs. Offutt, Horn and
Knoll with respect to the Offutt Entities and Mr. Espel with respect to Ag
Capital.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board (the "Compensation Committee")
is authorized to recommend compensation for the Company's directors and
corporate officers, review compensation for the Company's operating officers,
review the Company's retirement, health and welfare plans that cover
13
<PAGE>
substantially all employees (including the management of such plans), and
administer the Incentive Plan (including determining the participants in the
Incentive Plan and the amount, timing and other terms and conditions of awards
under the Incentive Plan). During fiscal 2000, the Compensation Committee was
comprised of Bradford M. Freeman, Allan F. Knoll and James D. Watkins. The
Compensation Committee has furnished this report on executive compensation for
fiscal 2000.
COMPENSATION PHILOSOPHY AND OBJECTIVES
The Company has developed a compensation policy that is designed to
attract and retain executive officers responsible for the success of the Company
and to motivate these persons to enhance long-term stockholder value. The
executive compensation program presently consists primarily of annual base
salary, short-term incentives in the form of annual cash bonuses, and long-term
incentives in the form of stock options.
BASE SALARY
Messrs. Offutt and Knoll do not receive any salary from the Company,
and Mr. Horn's salary is believed to be substantially below competitive salaries
for corresponding positions at similar organizations of comparable size and
complexity as the Company. The Compensation Committee believes that Messrs.
Offutt, Knoll and Horn are fully motivated to enhance long-term stockholder
value as a result of their beneficial ownership of the Common Stock of the
Company (see "Beneficial Ownership of Management").
Base salaries for other executive officers of the Company are
determined annually. This assessment involves a number of criteria and
information including individual performance, cost of living and total
compensation being paid for comparable positions at companies with which the
Company competes for executive and management talent (e.g., specialty retailers
such as equipment and truck dealership and rental companies). Principles of
internal equity are also considered by evaluating salaries of comparable levels
of responsibility within the Company.
CASH BONUS
All executive officers are eligible to receive annual cash bonuses. The
amount and performance criteria are determined annually and are based, in part,
on an assessment of total compensation being paid for comparable positions at
companies with which the Company competes for executive and management talent.
Cash bonuses for executive corporate officers are based on individual
performance and the Company's overall performance. Cash bonuses for executive
operating officers are determined based on achievement of a variety of
performance factors and criteria, including targeted return on assets, earnings
per share growth, efficiency of asset management, profitability, sales growth,
productivity and product support. Bonuses accrue monthly based on performance
targets and are paid at the end of the fiscal year.
STOCK OPTION PROGRAM
The Company adopted the Incentive Plan in connection with becoming a
public company as a mechanism to advance the best interests of the Company and
its stockholders by attracting, retaining and motivating employees, directors,
advisors and consultants of the Company. The Incentive Plan provides for the
grant of stock options (which may be non-qualified stock options or incentive
stock options for tax purposes), stock appreciation rights issued independent of
or in tandem with such options ("SARs"),
14
<PAGE>
restricted stock awards and performance stock awards, thereby increasing the
personal stake of Incentive Plan participants in the continued success and
growth of the Company. Equity participation in the Company, particularly through
the grant of stock options, is anticipated to continue as an important part of
future executive and management compensation.
CEO COMPENSATION
As the Company's principal stockholder, Mr. Offutt's interests are
closely tied to Company performance and stock price appreciation. The
Compensation Committee believes that Mr. Offutt is fully motivated to enhance
long-term stockholder value.
ADDITIONAL INFORMATION
The Omnibus Reconciliation Act of 1993 added Section 162(m) to the
Internal Revenue Code of 1986, as amended (the "Code"), limiting corporate
deductions to $1,000,000 for certain compensation paid to the chief executive
officer and each of the four other most highly compensated executives of
publicly held companies. The Compensation Committee does not anticipate the
Company will pay "compensation" within the meaning of Section 162(m) to such
executive officers in excess of $1,000,000 in the foreseeable future. Therefore,
the Compensation Committee and the Company do not have a policy at this time
regarding qualifying compensation paid to its executive officers for
deductibility under Section 162(m), but the Compensation Committee will
formulate a policy on behalf of the Company if compensation levels approach
$1,000,000.
The following members of the Compensation Committee are giving this
report:
Bradford M. Freeman
Allan F. Knoll
James D. Watkins
AUDITORS FOR FISCAL 2001
Upon the recommendation of the Company's Audit Committee, the Board has
selected Arthur Andersen LLP, independent public accountants, as auditors of the
Company for the fiscal year ending January 31, 2001. Arthur Andersen LLP has
acted as independent certified public accountants for the Company since 1995.
Representatives of Arthur Andersen LLP are expected to be present at
the Annual Meeting. These representatives will have an opportunity to make a
statement if they so desire, and will also be available to respond to
appropriate questions from stockholders.
OTHER BUSINESS
The Board knows of no other matters to be presented for stockholder
action at the Annual Meeting. However, if other matters do properly come before
the Annual Meeting, the Board intends that the persons named in the proxies will
vote upon such matters in accordance with their best judgment.
15
<PAGE>
COMPARATIVE PERFORMANCE GRAPH
The following performance graph compares the performance of the
Company's Common Stock to the Standard & Poor's 500 Stock Index and the Standard
& Poor's Diversified Machinery Group Index. This graph assumes that $100 was
invested in the Company's Common Stock and in each of the two indices at the
time of the Offering, and that subsequent dividends were reinvested in
connection with those indices.
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
- ------------------ --------------- --------------- --------------- ------------- -------------
1/23/97 1/31/97 1/30/98 1/29/99 1/31/00
- ------------------ --------------- --------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
RDO 100.00 113.71 119.35 54.84 38.31
- ------------------ --------------- --------------- --------------- ------------- -------------
S & P Machinery 100.00 101.05 126.60 102.20 116.88
- ------------------ --------------- --------------- --------------- ------------- -------------
S & P 500 100.00 101.15 128.37 170.07 187.67
- ------------------ --------------- --------------- --------------- ------------- -------------
</TABLE>
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Any stockholder who intends to present a proposal at the annual meeting
of stockholders to be held in calendar 2001 and who wishes to have the proposal
included in the Company's proxy statement and form of proxy for that meeting
must deliver the proposal to the Company at its executive offices no later than
January 5, 2001 and must satisfy applicable SEC requirements.
In addition, the proxy solicited by the Board for the 2001 annual
meeting will confer discretionary authority to vote on any stockholder proposal
presented at that meeting, unless the Company is provided with notice of such
proposal no later than March 21, 2001.
FORM 10-K
Upon written request, the Company will mail without charge a copy of
its annual report on Form 10-K, including the financial statements, schedules
and list of exhibits. Requests should be sent to RDO Equipment Co., Stockholder
Relations, P. O. Box 7160, Fargo, North Dakota 58106-7160, or to
[email protected].
16
<PAGE>
DIRECTIONS TO
ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, MAY 31, 2000
11:00 A.M., CENTRAL TIME
CONCORDIA COLLEGE
KNUTSON CENTER - CENTRUM ROOM
901 EIGHTH STREET SOUTH
MOORHEAD, MINNESOTA
[INSERT MAP HERE]
DIRECTIONS FROM I-94:
Go north on U.S. Highway 75 (also known as 8th Street).
Turn left (west) on 12th Avenue S. to 5th Street S.
Turn right (north) on 5th Street S. to 9th Avenue S.
Turn right (east) on 9th Avenue S. to parking lots.
DIRECTIONS FROM U.S. HIGHWAY 10:
Go south on 8th Street to Concordia College
campus. Parking lot is on the right (west)
side of the street between 7th' Avenue S.
and 10th Avenue S.
17
<PAGE>
RDO EQUIPMENT CO.
ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, MAY 31, 2000
11:00 A.M., CENTRAL TIME
CONCORDIA COLLEGE
KNUTSON CENTER -- CENTRUM ROOM
901 EIGHTH STREET SOUTH
[MAP] MOORHEAD, MINNESOTA
DIRECTIONS FROM I-94:
Go north on U.S. Highway 75 (also known as 8th Street).
Turn left (west) on 12th Avenue S. to 5th Street S.
Turn right (north) on 5th Street S. to 9th Avenue S.
Turn right (east) on 9th Avenue S. to parking lots.
DIRECTIONS FROM U.S. HIGHWAY 10:
Go south on 8th Street to Concordia College campus.
Parking lot is on the right (west) side of the street between
7th Avenue S. and 10th Avenue S.
[LOGO] RDO(R) RDO EQUIPMENT CO.
EQUIPMENT CO. 2829 SOUTH UNIVERSITY DRIVE, FARGO, NORTH DAKOTA 58103 PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON WEDNESDAY, MAY 31, 2000.
The shares of stock you hold in your account will be voted as you specify on the
reverse side.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" THE NOMINEES LISTED IN
ITEM 1.
By signing the proxy, you revoke all prior proxies and appoint Ronald D. Offutt,
Paul T. Horn and Allan F. Knoll, and each of them, with full power of
substitution, to vote your shares on the matters shown on the reverse side and
any other matters which may come before the Annual Meeting and all adjournments.
SEE REVERSE FOR VOTING INSTRUCTIONS.
<PAGE>
[ARROW] PLEASE DETACH HERE [ARROW]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED IN ITEM 1.
<TABLE>
<S> <C>
1. Election of directors:
01 Ronald D. Offutt 05 Ray A. Goldberg [ ] Vote FOR [ ] Vote WITHHELD
02 Paul T. Horn 06 Norman M. Jones all nominees from all nominees
03 Allan F. Knoll 07 James D. Watkins
04 Bradford M. Freeman
_____________________________________
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED | |
NOMINEE, WRITE THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX |_____________________________________|
PROVIDED TO THE RIGHT.)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED
FOR EACH PROPOSAL.
Address Change? Mark Box [ ] Date ______________________, 2000.
Indicate changes below:
_____________________________________
| |
| |
|_____________________________________|
Signature(s) in Box
Please sign exactly as your name(s)
appear on Proxy. If held in joint
tenancy, all persons must sign. Trustees,
administrators, etc., should include
title and authority. Corporations should
provide full name of corporation and
title of authorized officer signing the
proxy.
</TABLE>
