<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 13, 1998
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
OSHKOSH TRUCK CORPORATION*
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WISCONSIN
(STATE OR OTHER JURISDICTION
OF INCORPORATION)
3711
(PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER)
39-0520270
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
P.O. BOX 2566
OSHKOSH, WISCONSIN 54903-2566
(920) 235-9151
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
CHARLES L. SZEWS
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
OSHKOSH TRUCK CORPORATION
P.O. BOX 2566
OSHKOSH, WISCONSIN 54903-2566
(920) 235-9151
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
BENJAMIN F. GARMER, III, ESQ.
FOLEY & LARDNER
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
(414) 271-2400
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: Upon
consummation of the Exchange Offer referred to herein.
------------------------
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER NOTE(1) PRICE REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New 8 3/4% Senior Subordinated Notes
due 2008(2)........................ $100,000,000 100% $100,000,000 $29,500
- ---------------------------------------------------------------------------------------------------------------------------------
Guarantees for the New 8 3/4 Senior
Subordinated Notes due 2008(3)..... $0 0% $0 $0
=================================================================================================================================
</TABLE>
(1) Estimated solely for purposes of determining the registration fee.
(2) Calculated pursuant to Rule 457(f) under the Securities Act of 1933.
(3) Pursuant to Rule 457(n) under the Securities Act of 1933, no registration
fee is required with respect to the guarantees.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
*TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
PRIMARY
STATE OR OTHER STANDARD
JURISDICTION OF INDUSTRY I.R.S. EMPLOYER
NAME, ADDRESS AND INCORPORATION CLASSIFICATION IDENTIFICATION
TELEPHONE NUMBER (1) OR ORGANIZATION NUMBER NUMBER
-------------------- --------------- -------------- ---------------
<S> <C> <C> <C>
Pierce Manufacturing Inc............................. Wisconsin 3711 39-0139830
Summit Performance Systems, Inc...................... Wisconsin 3711 39-1799489
McNeilus Companies, Inc.............................. Minnesota 3711 41-1656668
McNeilus Truck & Manufacturing, Inc.................. Minnesota 3711 41-0967369
Iowa Contract Fabricators, Inc....................... Iowa 3711 42-1418425
McIntire Fabricators, Inc............................ Iowa 3711 42-1418424
Kensett Fabricators, Inc............................. Iowa 3711 42-1451986
McNeilus Financial, Inc.............................. Texas 3711 41-1314126
</TABLE>
- -------------------------
(1) The address of these additional registrants is P.O. Box 2566, Oshkosh,
Wisconsin 54903-2566. Their telephone number is (920) 235-9151.
<PAGE> 3
SUBJECT TO COMPLETION, DATED MARCH 13, 1998
PROSPECTUS
OFFER TO EXCHANGE
ALL OUTSTANDING
8 3/4% SENIOR SUBORDINATED NOTES DUE 2008
($100,000,000 PRINCIPAL AMOUNT OUTSTANDING)
FOR
NEW 8 3/4% SENIOR SUBORDINATED NOTES DUE 2008
($100,000,000 PRINCIPAL AMOUNT)
OF
OSHKOSH TRUCK CORPORATION
THE EXCHANGE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK TIME, ON
, 1998, UNLESS EXTENDED
Oshkosh Truck Corporation, a Wisconsin corporation (the "Company"), hereby
offers (the "Exchange Offer"), upon the terms and subject to the conditions set
forth in this Prospectus and the accompanying Letter of Transmittal (the "Letter
of Transmittal"), to exchange up to an aggregate principal amount of
$100,000,000 of its new 8 3/4% Senior Subordinated Notes due 2008 (the "New
Senior Subordinated Notes" or "New Notes") for an equal principal amount of its
outstanding 8 3/4% Senior Subordinated Notes due 2008 (the "Senior Subordinated
Notes" or the "Notes"), in integral multiples of $1,000. The New Notes will be
fully and unconditionally guaranteed (the "New Note Guarantees") on a senior
subordinated basis by, and will be joint and several obligations of, Pierce
Manufacturing Inc., a Wisconsin corporation and a subsidiary of the Company,
Summit Performance Systems, Inc., a Wisconsin corporation and a subsidiary of
the Company, McNeilus Companies, Inc., a Minnesota corporation and a subsidiary
of the Company, McNeilus Truck & Manufacturing, Inc., a Minnesota corporation
and a subsidiary of the Company, Iowa Contract Fabricators, Inc., an Iowa
corporation and a subsidiary of the Company, McIntire Fabricators, Inc., an Iowa
corporation and a subsidiary of the Company, Kensett Fabricators, Inc., an Iowa
corporation and a subsidiary of the Company, and McNeilus Financial, Inc., a
Texas corporation and a subsidiary of the Company (collectively, the "Subsidiary
Guarantors"). The New Notes will be senior subordinated unsecured obligations of
the Company and are substantially identical (including principal amount,
interest rate, maturity and redemption rights) to the Notes for which they may
be exchanged pursuant to this offer, except that (i) the offering and sale of
the New Notes will have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), and (ii) holders of New Notes will not be
entitled to certain rights of holders under a Registration Rights Agreement of
the Company and the Subsidiary Guarantors dated as of February 26, 1998 (the
"Registration Rights Agreement"). The Senior Subordinated Notes have been, and
the New Senior Subordinated Notes will be, issued under an Indenture dated as of
February 26, 1998 (the "Senior Subordinated Note Indenture" or the "Indenture"),
among the Company, the Subsidiary Guarantors and Firstar Trust Company, as
trustee (the "Trustee"). See "Description of the New Notes." There will be no
proceeds to the Company from this offering; however, pursuant to the
Registration Rights Agreement, the Company will bear certain offering expenses.
------------------------
SEE "RISK FACTORS," COMMENCING ON PAGE 16, FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER NOTES IN THE EXCHANGE
OFFER.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE
------------------------
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE> 4
The Company will accept for exchange any and all validly tendered Notes on
or prior to 12:00 midnight New York City time, on , 1998, unless the
Exchange Offer is extended (the "Expiration Date"). Tenders of Notes may be
withdrawn at any time prior to 12:00 midnight, New York City time, on the
Expiration Date; otherwise such tenders are irrevocable. Firstar Trust Company
will act as Exchange Agent with respect to the Senior Subordinated Notes (in
such capacity, the "Exchange Agent") in connection with the Exchange Offer. The
Exchange Offer is not conditioned upon any minimum principal amount of Notes
being tendered for exchange, but is otherwise subject to certain customary
conditions.
The Notes were sold by the Company on February 26, 1998 in a transaction
not registered under the Securities Act in reliance upon the exemption provided
in Section 4(2) of the Securities Act. The Notes were subsequently resold to
qualified institutional buyers in reliance upon Rule 144A under the Securities
Act or to persons outside the United States in reliance on Regulation S under
the Securities Act. Based on information provided by the Initial Purchaser (as
defined), the Company believes no Notes were resold to institutional accredited
investors in a manner exempt from registration under the Securities Act.
Accordingly, the Notes may not be reoffered, resold or otherwise transferred in
the United States unless registered under the Securities Act or unless an
applicable exemption from the registration requirements of the Securities Act is
available. The New Notes are being offered hereunder in order to satisfy certain
obligations of the Company under the Registration Rights Agreement. See "The
Exchange Offer."
The New Senior Subordinated Notes will bear interest from February 26,
1998, the date of issuance of the Senior Subordinated Notes that are tendered in
exchange for the New Senior Subordinated Notes (or the most recent date to which
interest on such Notes has been paid) at a rate equal to 8 3/4% per annum.
Interest on the New Notes will be payable semiannually on March 1 and September
1 of each year (each an "Interest Payment Date"), commencing September 1, 1998.
The New Notes will mature on March 1, 2008, unless previously redeemed. The
Company will not be required to make any mandatory redemption or sinking fund
payment on the New Notes prior to maturity. The New Notes are redeemable at the
option of the Company, in whole or in part, at any time on or after March 1,
2003, at the redemption prices set forth herein, plus accrued and unpaid
interest, and Liquidated Damages (as defined), if any, to the date of
redemption. Prior to March 1, 2001, up to 35% of the initially outstanding
aggregate principal amount of New Senior Subordinated Notes may be redeemable at
the option of the Company, on one or more occasions, from the net proceeds of
public offerings of common stock of the Company, at a price of 108.75% of the
principal amount of the New Senior Subordinated Notes, together with accrued and
unpaid interest, and Liquidated Damages, if any, to the date of redemption;
provided that New Senior Subordinated Notes of an aggregate principle amount of
at least 65% of the initially outstanding aggregate principal amount of Senior
Subordinated Notes remains outstanding immediately after such redemption. See
"Description of the New Notes -- Optional Redemption."
Upon the occurrence of a Change of Control (as defined), each Holder (as
defined) of New Notes may require the Company to repurchase all or a portion of
such Holder's New Notes at 101% of the aggregate principal amount of the New
Senior Subordinated Notes, together with accrued and unpaid interest, and
Liquidated Damages, if any, to the date of repurchase. See "Description of the
New Notes -- Repurchase at the Option of Holders -- Change of Control."
The New Notes will be general, unsecured obligations of the Company,
subordinated in right of payment to all present and future Senior Debt (as
defined) of the Company, including the Company's obligations under the Senior
Credit Facility (as defined). The New Notes will rank senior or pari passu in
right of payment to any future senior subordinated indebtedness of the Company
and any other subordinated indebtedness of the Company. The New Notes will be
unconditionally guaranteed, on a senior subordinated basis, by all of the
Company's domestic Restricted Subsidiaries (as defined) other than McNeilus
Financial Services, Inc. ("MFSI"). Each Subsidiary Guarantee (as defined) will
be a general unsecured obligation of each Subsidiary Guarantor, subordinated in
right of payment to all present and future senior indebtedness of such
Subsidiary Guarantor ("Subsidiary Guarantor Senior Debt"). As of December 31,
1997, on a pro forma basis, after giving effect to the Transactions (as
defined), the Company would have had approximately $263.4 million of Senior Debt
outstanding and the Subsidiary Guarantors would have had approximately $2.9
million of Subsidiary Guarantor Senior Debt outstanding (excluding guarantees of
the Senior Credit Facility). See
(cover page continued)
i
<PAGE> 5
"Capitalization," "Description of Indebtedness -- Senior Credit Facility" and
"Description of the New Notes."
Based on interpretations by the staff of the Securities and Exchange
Commission (the "Commission") set forth in no-action letters issued to third
parties, the Company believes that New Notes issued pursuant to the Exchange
Offer in exchange for Notes may be offered for resale, resold and otherwise
transferred by any holder thereof (other than any such holder which is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act) without compliance with the registration and prospectus delivery provisions
of the Securities Act, provided that such New Notes are acquired in the ordinary
course of such holder's business and that such holder does not intend to
participate in a distribution of such New Notes.
Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with the initial resale of such New Notes. The Letter of Transmittal
delivered with this Prospectus states that by so acknowledging and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of New Notes received in exchange for Notes where
such Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company will make this Prospectus
available to any broker-dealer for use in connection with any such resale in
accordance with the terms of the Registration Rights Agreement.
Any Holder who tenders in the Exchange Offer with the intention to
participate, or for purpose of participating, in a distribution of the New Notes
cannot rely on the position of the staff of the Commission enunciated in Exxon
Capital Holdings Corporation (available April 13, 1989), or Morgan Stanley &
Co., Inc. (available June 5, 1991) or similar no-action letters and, in the
absence of an exemption therefrom, must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with the
resale of the New Notes. Failure to comply with such requirements in such
instance may result in such Holder incurring liability under the Securities Act
for which the Holder is not indemnified by the Company.
The Company does not intend to list the New Notes on any securities
exchange, or to seek admission thereof to trading in the National Association of
Securities Dealers Automated Quotation System. BancAmerica Robertson Stephens
(the "Initial Purchaser") has advised the Company that it intends to make a
market in the New Notes; however, it is not obligated to do so and any
market-making may be discontinued at any time. As a result, the Company cannot
determine whether an active public market will develop for the New Notes.
ANY NOTES NOT TENDERED AND ACCEPTED IN THE EXCHANGE OFFER WILL REMAIN
OUTSTANDING. TO THE EXTENT ANY NOTES ARE TENDERED AND ACCEPTED IN THE EXCHANGE
OFFER, A HOLDER'S ABILITY TO SELL UNTENDERED NOTES COULD BE ADVERSELY AFFECTED.
FOLLOWING CONSUMMATION OF THE EXCHANGE OFFER, THE HOLDERS OF NOTES WILL CONTINUE
TO BE SUBJECT TO THE EXISTING RESTRICTIONS UPON TRANSFER THEREOF AND THE COMPANY
WILL HAVE FULFILLED ONE OF ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS
AGREEMENT. HOLDERS OF NOTES WHO DO NOT TENDER THEIR NOTES GENERALLY WILL NOT
HAVE ANY FURTHER REGISTRATION RIGHTS UNDER THE REGISTRATION RIGHTS AGREEMENT OR
OTHERWISE. SEE "THE EXCHANGE OFFER -- CONSEQUENCES OF FAILURE TO EXCHANGE."
The New Notes issued pursuant to this Exchange Offer generally will be
issued in the form of Global New Notes (as defined), which will be deposited
with, or on behalf of, The Depository Trust Company (the "Depository" or "DTC")
and registered in its name or in the name of Cede & Co., its nominee. Beneficial
interests in the Global New Notes representing the New Notes will be shown on,
and transfers thereof will be effected through, records maintained by the
Depository and its participants. Notwithstanding the foregoing, Notes held in
certificated form will be issued in exchange for the Global New Notes only on
the terms set forth in the Indenture. See "Description of the New
Notes -- Book-Entry, Delivery and Form."
(cover page continued)
ii
<PAGE> 6
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
OSHKOSH TRUCK CORPORATION, P.O. BOX 2566, OSHKOSH, WISCONSIN 54903-2566, (920)
235-9151. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST
SHOULD BE MADE BY , 1998.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED (THE "EXCHANGE ACT"). ALL STATEMENTS OTHER THAN STATEMENTS
OF HISTORICAL FACT INCLUDED IN THIS PROSPECTUS, INCLUDING, WITHOUT LIMITATION,
STATEMENTS REGARDING THE COMPANY'S FUTURE FINANCIAL POSITION, BUSINESS STRATEGY,
BUDGETS, PROJECTED COSTS AND PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE
OPERATIONS, ARE FORWARD-LOOKING STATEMENTS. IN ADDITION, FORWARD-LOOKING
STATEMENTS GENERALLY CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY
SUCH AS "MAY," "WILL," "EXPECT," "INTEND," "ESTIMATES," "ANTICIPATE," "BELIEVE,"
"SHOULD," "PLANS" OR "CONTINUE" OR THE NEGATIVE THEREOF OR VARIATIONS THEREON OR
SIMILAR TERMINOLOGY. WITHOUT LIMITING THE FOREGOING, FORWARD-LOOKING STATEMENTS
ARE SET FORTH HEREIN UNDER THE CAPTIONS "PROSPECTUS SUMMARY," "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" AND "BUSINESS." ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS
REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, IT CAN GIVE NO
ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT. IMPORTANT
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE COMPANY'S
EXPECTATIONS ("CAUTIONARY STATEMENTS") ARE DISCLOSED UNDER "RISK FACTORS" AND
ELSEWHERE IN THIS PROSPECTUS, INCLUDING, WITHOUT LIMITATION, THE FOLLOWING: (I)
THE CONSEQUENCES OF FINANCIAL LEVERAGE; (II) THE CYCLICAL NATURE OF THE
CONSTRUCTION INDUSTRY; (III) THE RISKS RELATED TO REDUCTIONS OR CHANGES IN
GOVERNMENT EXPENDITURES; (IV) THE UNCERTAINTY INHERENT IN GOVERNMENT CONTRACTS;
(V) THE CHALLENGES OF INTEGRATION OF ACQUIRED BUSINESSES; (VI) COMPETITION;
(VII) DISRUPTIONS IN THE SUPPLY OF PARTS OR COMPONENTS FROM SOLE SOURCE
SUPPLIERS AND SUBCONTRACTORS; (VIII) PRODUCT LIABILITY AND WARRANTY CLAIMS; AND
(IX) LABOR RELATIONS AND MARKET CONDITIONS. ALL SUBSEQUENT WRITTEN AND ORAL
FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY, OR PERSONS ACTING ON ITS
BEHALF, ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS.
2
<PAGE> 7
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and consolidated financial
statements and pro forma financial statements (including the notes thereto)
appearing elsewhere in this Prospectus. Unless otherwise indicated, all
references in this Prospectus to the Company's business and pro forma data give
effect to the Transactions (as defined). See "-- The Transactions." As used
herein, the "Company" refers to Oshkosh Truck Corporation, including Pierce
Manufacturing Inc. ("Pierce") and its other wholly-owned subsidiaries and, after
the Acquisition (as defined), McNeilus Companies, Inc. ("McNeilus"), and
"Oshkosh" refers to Oshkosh Truck Corporation and its wholly-owned subsidiaries
prior to the Acquisition.
THE COMPANY
OVERVIEW
The Company is a leading designer, manufacturer and marketer of a broad
range of fire apparatus and specialty commercial and military trucks under the
"Oshkosh," "Pierce," "McNeilus" and "MTM" trademarks. The Company's custom and
commercial fire apparatus include pumpers, aerial and ladder trucks, tankers,
heavy-duty rescue vehicles, wildland rough terrain response vehicles and
aircraft rescue and firefighting ("ARFF") vehicles. The Company's commercial
truck lines include refuse truck bodies, rear- and forward-discharge concrete
mixers and snow removal vehicles. As the leading manufacturer of severe-duty
heavy tactical trucks for the United States Department of Defense (the "DoD"),
the Company manufactures vehicles that perform a variety of demanding tasks,
such as hauling tanks, missile systems, ammunition, fuel and cargo for combat
units. For the twelve months ended December 31, 1997, on a pro forma basis, the
Company generated net sales of $1,011.3 million and EBITDA (as defined) of $79.4
million.
The Company is focused on four principal markets:
Fire Apparatus. The Company, through Pierce, is among the leading domestic
manufacturers of custom and commercial fire apparatus. The Company primarily
serves domestic governmental markets, but also sells fire apparatus to airports,
universities and large industrial companies. In addition, the Company sells fire
apparatus in international markets. Pierce's history of research and development
in consultation with firefighters has resulted in a broad product line that
features a wide range of innovative, high-quality custom and commercial
firefighting equipment with advanced fire suppression capabilities. The
Company's engineering expertise also allows it to design its vehicles to meet
stringent government regulations for safety and effectiveness.
Refuse Truck Bodies. Management believes the Company, through McNeilus, is
a leading domestic manufacturer of refuse truck bodies for the waste services
industry. The Company manufactures a wide range of automated rear, front, side
and top loading refuse truck bodies, which the Company mounts on commercial
chassis. The Company sells its refuse vehicles primarily to commercial waste
management companies. Management believes the Company's refuse vehicles have a
reputation for efficient, cost-effective, dependable operation that supports the
Company's continued expansion into municipal and international markets.
Concrete Mixers and Snow Removal Vehicles. Management believes the Company
is a leading domestic manufacturer of rear- and forward-discharge concrete
mixers. The Company sells rear- and forward-discharge concrete mixers and
portable concrete mixer plants to construction companies throughout the United
States and internationally. Management believes the Company is one of the only
domestic concrete mixer manufacturers that markets both rear- and
forward-discharge concrete mixers.
The Company is also among the leading domestic manufacturers of snow
removal vehicles for airports. The Company's specially designed airport snow
removal vehicles can cast up to 4,000 tons of snow per hour and are used by some
of the largest airports in the United States, such as Denver International
Airport, LaGuardia International Airport, Minneapolis-St. Paul International
Airport and O'Hare International Airport. Management believes the reliability of
the Company's high performance snow removal vehicles contribute to its strong
market position.
3
<PAGE> 8
Defense Trucks. The Company has sold products to the DoD for over 70 years
and is the leading manufacturer of a broad line of severe-duty heavy tactical
trucks for the DoD. The Company's proprietary military all-wheel drive product
line includes: (i) the Palletized Load System ("PLS"), a highly mobile self-
contained truck and trailer system that loads and unloads a wide range of cargo
in a short period of time; (ii) the Heavy Expanded Mobility Tactical Truck
("HEMTT"), a cross-country cargo and supply carrier that, among other tasks, is
used for direct rearming of the Multiple Launch Rocket System, transport of
Patriot erector/launchers, resupply of field artillery ammunition and refueling
of tanks, trucks and helicopters in forward areas; (iii) the Heavy Equipment
Transporter ("HET"), the primary hauler of the M1A1 main battle tank and also a
hauler of other tanks, fighting and recovery vehicles, self-propelled howitzers
and construction equipment; and (iv) the Logistic Vehicle System ("LVS"), a
highly mobile cargo carrier with a maximum payload capacity of 20 tons. The
Company also exports its severe-duty heavy tactical trucks to approved foreign
customers.
COMPETITIVE STRENGTHS
The following competitive strengths support the Company's business
strategy:
Strong Market Positions. The Company has developed strong market positions
in each of its core businesses, which management attributes to the Company's
reputation for innovation, vehicle performance, reliability and customer
service. The Company has the leading share of the severe-duty heavy tactical
truck segment of the domestic defense truck market, and also believes it has a
leading share in: (i) custom and commercial fire apparatus, including pumpers,
aerial and ladder trucks, tankers, heavy duty rescue, wildland rough terrain
response vehicles and ARFF vehicles for the domestic fire apparatus market; (ii)
the domestic refuse truck body market; (iii) the domestic rear- and
forward-discharge concrete mixer markets; and (iv) the domestic airport snow
removal vehicle market. The Company intends to continue to strengthen its market
share by capitalizing on its strong reputation, introducing innovative products
and services and leveraging its extensive distribution capabilities.
Extensive Distribution Capabilities. With the addition of the commercial
and municipal distribution capabilities of Pierce and McNeilus, the Company has
established an extensive domestic and international distribution system for
specialty trucks and truck bodies covering over 70 countries. In addition to its
network of dealers and distributors, the Company employs over 100 in-house sales
and service representatives. Management believes the Company's broad
distribution system has enabled the Company to: (i) maximize sales of new
products and technologies; (ii) become a benchmark for government customers
establishing their bid specifications; (iii) provide customer service on a
national and international scale; and (iv) reduce distribution expenses through
significant economies of scale.
Flexible and Efficient Manufacturing. The Company believes it has
competitive advantages over larger truck manufacturers in its specialty truck
markets due to its manufacturing flexibility and custom fabrication
capabilities. For example, the Company has successfully configured its defense
truck and fire apparatus manufacturing plants for the simultaneous manufacture
of many different types and models of vehicles on the same assembly line at the
same time. In addition, the Company believes it has a competitive advantage over
smaller competitors due to its: (i) manufacturing in relatively higher volumes;
(ii) purchasing power across its product lines; and (iii) investing in fixturing
and robotics to improve efficiency and reduce costs.
Quality Products and Customer Service. Oshkosh, Pierce and McNeilus have
each developed strong brand recognition based on their commitments to meet the
stringent product quality and reliability requirements of their customers and
the specialty truck markets they serve. The Company's commitment to product
quality is exemplified by the ISO 9001 certification of Oshkosh. Pierce is
targeting achievement of ISO 9001 certification in 1998. The Company also
achieves high quality customer service through its extensive service and parts
support program, which is available to domestic customers 365 days a year in all
product lines throughout the Company's distribution systems.
Proprietary Components. The Company's advanced design and engineering
capabilities have contributed to the development of proprietary, severe-duty
components which enhance truck performance, reduce manufacturing costs and
strengthen customer relationships. These proprietary components include front
drive
4
<PAGE> 9
and steer axles, transfer cases, cabs, the ALL-STEER electronic all-wheel
steering system, central tire inflation, independent suspension, the Sky-Arm
articulating aerial ladder and the McNeilus Auto Reach Arm. Management believes
these proprietary components provide the Company a competitive advantage by
increasing its vehicles' durability, operating efficiency and effectiveness. The
integration of many of these components across various product lines also
reduces the Company's costs to manufacture its products compared to
manufacturers who simply assemble purchased components.
BUSINESS STRATEGY
The Company is focused on increasing its net sales, profitability and cash
flow by capitalizing on its competitive strengths. Key elements of the Company's
business strategy include:
Focusing on Specialized Truck Markets. The Company plans to continue its
focus on those specialized truck and truck body markets where it has strong
market positions and where the Company can leverage synergies in purchasing,
manufacturing, technology and distribution. The Company's objective is to
achieve and maintain market leadership through internal growth and strategic
acquisitions. Management believes the higher sales volumes associated with
market leadership would allow the Company to continue to enhance productivity in
manufacturing operations, fund innovative product development and invest in
further expansion.
Expanding Distribution and International Sales. The Company plans to add
new distribution capabilities for the municipal segment of the refuse truck body
market and in targeted geographic areas in the domestic fire apparatus market.
The Company intends to increase international sales beyond the $58.9 million pro
forma volume achieved in the twelve months ended December 31, 1997 by
introducing McNeilus refuse truck bodies, rear-discharge concrete mixers and
ready-mix batch plants to international markets and by continuing the expansion
of Pierce's international customer base through the Company's expanding
international distribution capabilities.
Reducing Costs While Maintaining Quality. The Company actively benchmarks
its competitors' costs and best industry practices, and continuously seeks to
implement process improvements to increase cash flow and improve profitability.
With each of its acquisitions, the Company has established cost reduction
targets. At Pierce, the Company exceeded its first-year cost reduction target of
$3.4 million in fiscal 1997 as a result of consolidating facilities,
reengineering the manufacturing process and leveraging increased purchasing
power. The Company is planning for additional cost savings at Pierce in fiscal
1998. The Company intends to improve efficiencies after the acquisition of
McNeilus by taking advantage of the Company's greater purchasing power and by
developing additional manufacturing synergies across product lines.
Introducing New Products. The Company has increased its emphasis on new
product development in recent years, and seeks to expand sales by introducing
new or improved products in its core markets, either through internal
development or strategic acquisition. For example, in December 1997, the Company
purchased the aerial fire apparatus product line of Nova Quintech, a division of
Nova Bus Corporation. This acquisition broadened Pierce's aerial product line
and is expected to provide Pierce with three new products in the first half of
calendar 1998.
Diversifying DoD Contracts. The Company is seeking to diversify its
business with the DoD beyond its traditional contracts relating to the
manufacture of severe-duty heavy tactical trucks. Management believes the
Company has a reputation within the DoD for advanced engineering, quality
manufacturing and vehicle performance that will assist the Company in obtaining
contracts to provide other types of vehicles to the DoD. For example, the
Company was one of two manufacturers selected to participate in a DoD program to
produce upgraded medium-duty prototype vehicles for the Medium Tactical Truck
Remanufacture ("MTTR") program. The Company expects the testing and validation
phase for the MTTR program to conclude in the first half of 1998 and the initial
production contract to be awarded to the Company or the competing bidder in the
fourth quarter of 1998. The Company is also one of two manufacturers competing
for the DoD's Family of Medium Tactical Vehicles ("FMTV") contract. The Company
and the other participating manufacturer are currently preparing prototype FMTV
trucks for testing by the DoD.
5
<PAGE> 10
Increasing Aftermarket Sales and Service. The Company is focused on
increasing its aftermarket sales and service revenues. In the fire apparatus and
commercial truck markets, the Company has expanded and plans to continue to
expand its refurbishment facilities and parts distribution capabilities. In the
defense truck market, the Company plans to continue to pursue parts and
maintenance contracts for upgrading and reconditioning trucks at both domestic
and international U.S. military bases.
Pursuing Strategic Acquisitions. Following the integration of McNeilus, the
Company intends to selectively pursue additional strategic acquisitions, both
domestically and internationally, in order to enhance its product line and
expand its international presence in specialized truck markets. The Company
intends to focus its acquisition strategy in specialty truck and truck body
markets where it can enhance its strong market positions and achieve significant
acquisition synergies.
6
<PAGE> 11
THE TRANSACTIONS
THE ACQUISITION
On December 8, 1997, Oshkosh entered into a definitive agreement (the
"Stock Purchase Agreement") pursuant to which, on February 26, 1998, it acquired
all of the outstanding capital stock of McNeilus and entered into related
non-compete and ancillary agreements for an aggregate acquisition price of
$250.0 million (the "Acquisition"). At November 30, 1997, McNeilus had
unrestricted cash of $17.7 million ($20.2 million less an estimated $2.5 million
required for capital and surplus at McNeilus' captive insurance subsidiary). The
Stock Purchase Agreement required, among other things, that the selling
stockholders of McNeilus prepay certain notes and purchase selected assets of
McNeilus, which provided net proceeds to Oshkosh of approximately $16.1 million.
As a result, management estimates that the effective cost to the Company in
connection with the Acquisition was approximately $216.2 million. Concurrently
with the consummation of the Acquisition, the Company consummated the Note
Offering (as defined), established the Senior Credit Facility, applied the net
proceeds from the Note Offering and the Senior Credit Facility to consummate the
Acquisition, refinanced existing Oshkosh indebtedness, paid fees and expenses
and established the Lease Financing Facility (as defined) (collectively, the
"Transactions").
THE SENIOR CREDIT FACILITY
The Senior Credit Facility is comprised of a multi-tranche Term Loan
Facility (as defined) aggregating $225.0 million and a $100.0 million Revolving
Credit Facility (as defined). The Senior Credit Facility is guaranteed by all of
the Company's domestic Restricted Subsidiaries (other than MFSI). See
"Description of Indebtedness -- Senior Credit Facility."
THE LEASE FINANCING FACILITY
Oshkosh/McNeilus Financial Services, Inc. (the "Leasing Partner"), a
subsidiary of MFSI, entered into a general partnership (the "Leasing
Partnership"), effective February 26, 1998, which offers lease financing to
customers of the Company and administers existing leases contributed to the
Leasing Partnership (the "Lease Financing Facility"). Indebtedness under the
Lease Financing Facility is secured by the underlying leases and assets of, and
is recourse to, the Leasing Partnership; such indebtedness is off-balance sheet
and non-recourse to the Company. See "Description of Indebtedness -- Lease
Financing Facility."
SOURCES AND USES OF FUNDS
<TABLE>
<CAPTION>
SOURCES
<S> <C>
Senior Credit Facility:
Revolving Credit Facility(1)...... $ 13.0
Term Loan Facility................ 225.0
Notes offered hereby................ 100.0
------
Total Sources.................. $338.0
======
</TABLE>
<TABLE>
<CAPTION>
USES
<S> <C>
McNeilus Acquisition, net........... $216.2
Refinance Oshkosh debt.............. 102.8
Estimated fees and expenses......... 15.4
Taxes related to lease
financing(2)...................... 3.6
------
Total Uses..................... $338.0
======
</TABLE>
- -------------------------
(1) The Revolving Credit Facility provides maximum borrowing availability
(including letters of credit) of $100.0 million, subject to certain
borrowing conditions. See "Capitalization" and "Description of Indebtedness
-- Senior Credit Facility."
(2) The Company incurred taxes payable as a result of the transfer of MFSI's
current lease portfolio to the Leasing Partnership.
------------------
The Company is a Wisconsin corporation with its executive offices located
at 2307 Oregon Street, Oshkosh, Wisconsin 54903-2566, and its telephone number
is (920) 235-9151.
7
<PAGE> 12
THE NOTE OFFERING
THE NOTES..................... The Notes were sold by the Company on February
26, 1998 and were subsequently resold either to
qualified institutional buyers pursuant to Rule
144A under the Securities Act or to persons in
transactions outside the United States in
reliance on Regulation S under the Securities
Act; based on information supplied by the
Initial Purchaser, the Company believes no
sales were made to institutional investors that
are accredited investors in a manner exempt
from registration under the Securities Act (the
"Note Offering").
Registration Rights
Agreement..................... In connection with the Note Offering, the
Company entered into the Registration Rights
Agreement, which grants Holders of the Notes
certain exchange and registration rights, which
generally terminate upon the consummation of
the Exchange Offer.
THE EXCHANGE OFFER
Securities Offered............ $100,000,000 in aggregate principal amount of
the Company's new 8 3/4% Senior Subordinated
Notes due 2008.
The Exchange Offer............ $1,000 principal amount of New Notes in
exchange for each $1,000 principal amount of
the Notes. As of the date hereof, $100,000,000
aggregate principal amount of Senior
Subordinated Notes are outstanding. The Company
will issue the New Notes to Holders on or
promptly after the Expiration Date.
Expiration Date............... 12:00 midnight, New York City time on
, 1998, unless the Exchange
Offer is extended, in which case the term
"Expiration Date" means the latest date and
time to which the Exchange Offer is extended.
Interest on the New Notes
and the Notes................. The New Notes will bear interest from February
26, 1998, the date of issuance of the Notes
that are tendered in exchange for the New Notes
(or the most recent date to which interest on
such Notes has been paid). Accordingly, Holders
of Notes that are accepted for exchange will
not receive interest on the Notes that is
accrued but unpaid at the time of tender, but
such interest will be payable on the first
March 1 or September 1, as the case may be,
after the Expiration Date.
Conditions to the Exchange
Offer......................... The Exchange Offer is subject to certain
customary conditions, which may be waived by
the Company. See "The Exchange Offer --
Conditions."
Procedures for Tendering
Notes......................... Each Holder of Notes wishing to accept the
Exchange Offer must complete, sign and date the
relevant accompanying Letter of Transmittal, or
a facsimile thereof, in accordance with the
instructions contained herein and therein, and
mail or otherwise deliver such Letter of
Transmittal, or such facsimile, together with
the Notes and any other required documentation
to the relevant Exchange Agent at the address
set forth in the Letter of Transmittal. The
Letter of Transmittal should be used to tender
Notes. By executing the Letter of Transmittal,
each Holder will represent to
8
<PAGE> 13
the Company that, among other things, the
Holder or the person receiving such new Notes,
whether or not such person is the Holder, is
acquiring the New Notes in the ordinary course
of business and that neither the Holder nor any
such other person has any arrangement or
understanding with any person to participate in
a distribution of such New Notes. In lieu of
physical delivery of the certificates
representing Notes, tendering Holders may
transfer Notes pursuant to the procedure for
book-entry transfer as set forth under "The
Exchange Offer -- Procedures for Tendering."
Special Procedures for
Beneficial Owners............. Any beneficial owner whose Notes are registered
in the name of a broker, dealer, commercial
bank, trust company or other nominee and who
wishes to tender should contact such registered
Holder promptly and instruct such registered
Holder to tender on such beneficial owner's
behalf. If such beneficial owner wishes to
tender on such beneficial owner's own behalf,
such beneficial owner must, prior to completing
and executing the Letter of Transmittal and
delivering its Notes, either make appropriate
arrangements to register ownership of the Notes
in such beneficial owner's name or obtain a
properly completed bond power from the
registered Holder. The transfer of registered
ownership may take considerable time.
Guaranteed Delivery
Procedures.................... Holders of Notes who wish to tender their Notes
and whose Notes are not immediately available
or who cannot deliver their Notes, the Letter
of Transmittal or any other documents required
by the Letter of Transmittal to the Exchange
Agent (or comply with the procedures for
book-entry transfer) prior to the Expiration
Date must tender their Notes according to the
guaranteed delivery procedures set forth in
"The Exchange Offer -- Guaranteed Delivery
Procedures."
Withdrawal Rights............. Tenders may be withdrawn at any time prior to
12:00 midnight, New York City time, on the
Expiration Date pursuant to the procedures
described under "The Exchange Offer -- Terms of
the Exchange Offer."
Acceptance of Notes and
Delivery of New Notes......... The Company will accept for exchange any and
all Notes that are properly tendered in the
Exchange Offer prior to 12:00 midnight, New
York City time, on the Expiration Date. The New
Notes issued pursuant to the Exchange Offer
will be delivered promptly following the
Expiration Date. See "The Exchange Offer --
Terms of the Exchange Offer."
Federal Income Tax
Consequences.................. The issuance of the New Notes to Holders of the
Notes pursuant to the terms set forth in this
Prospectus will not constitute an exchange for
federal income tax purposes. Consequently, no
gain or loss would be recognized by Holders of
the Notes upon receipt of the New Notes. See
"The Exchange Offer -- Certain Federal Income
Tax Consequences of the Exchange Offer."
Use of Proceeds............... There will be no proceeds to the Company from
the exchange of Notes pursuant to the Exchange
Offer.
9
<PAGE> 14
Effect on Holders of Notes.... As a result of the making of this Exchange
Offer, the Company will have fulfilled certain
of its obligations under the Registration
Rights Agreement, and Holders of Notes who do
not tender their Notes will generally not have
any further registration rights under the
Registration Rights Agreement or otherwise.
Such Holders will continue to hold the
untendered notes and will be entitled to all
the rights and subject to all the limitations
applicable thereto under the Indenture, except
to the extent such rights or limitations, by
their terms, terminate or cease to have further
effectiveness as a result of the Exchange
Offer. All untendered Notes will continue to be
subject to certain restrictions on transfer.
Accordingly, if any Notes are tendered and
accepted in the Exchange Offer, the trading
market for the untendered Notes could be
adversely affected.
Exchange Agent................ Firstar Trust Company is serving as Exchange
Agent in connection with the Exchange Offer.
See "The Exchange Offer -- Exchange Agent."
SUMMARY OF TERMS OF NEW NOTES
The form and terms of the New Notes are the same as the form and terms of
the Notes (which they will replace) except that (i) the New Notes have been
registered under the Securities Act and, therefore, will not bear legends
restricting the transfer thereof and (ii) the Holders of New Notes generally
will not be entitled to further registration rights under the Registration
Rights Agreement, which rights generally will be satisfied when the Exchange
Offer is consummated. The New Notes will evidence the same debt as the Notes and
will be entitled to the benefits of the Indenture. See "Description of the New
Notes."
Issuer........................ Oshkosh Truck Corporation.
Securities Offered............ $100,000,000 principal amount of new 8 3/4%
Senior Subordinated Notes due 2008.
Maturity Date................. March 1, 2008.
Interest Payment Dates........ March 1 and September 1, commencing September
1, 1998.
Mandatory Sinking Fund or
Redemption.................. None.
Optional Redemption........... The New Notes may be redeemed, in whole or in
part, at any time on or after March 1, 2003 at
the option of the Company, at the redemption
prices set forth herein, plus, in each case,
accrued and unpaid interest and Liquidated
Damages, if any, to the date of redemption. In
addition, at any time prior to March 1, 2001,
the Company may, at its option, redeem up to
35% of the initially outstanding aggregate
principal amount of the New Notes issued under
the Indenture at a redemption price of 108.75%
of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages, if
any, to the date of redemption, with the net
cash proceeds of one or more public offerings
of common stock of the Company, provided that
New Notes of an aggregate principal amount of
at least 65% of the initially outstanding
aggregate principal amount of Notes remains
outstanding immediately after the occurrence of
such redemption.
Change of Control............. In the event of a Change of Control, each
Holder of the New Notes will have the right to
require the Company to make an offer
10
<PAGE> 15
to repurchase such Holder's New Notes, in whole
or in part, at a price of 101% of the aggregate
principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any,
to the date of repurchase.
Ranking....................... The New Notes will be general unsecured
obligations of the Company, subordinated in
right of payment to all present and future
Senior Debt of the Company, including the
Company's obligations under the Senior Credit
Facility. The New Notes will rank pari passu
with any future senior subordinated
indebtedness of the Company and will rank
senior to any other subordinated indebtedness
of the Company. As of December 31, 1997, on a
pro forma basis, the Company would have had
approximately $263.4 million of Senior Debt
outstanding and the Subsidiary Guarantors would
have had approximately $2.9 million of
Subsidiary Guarantor Senior Debt outstanding
(excluding guarantees of the Senior Credit
Facility).
Subsidiary Guarantees......... The New Notes will be unconditionally
guaranteed on a senior subordinated basis as to
the payment of principal and interest and
Liquidated Damages, if any, by the Subsidiary
Guarantors. Each Subsidiary Guarantee will be a
general unsecured obligation of such Subsidiary
Guarantor, subordinated in right of payment to
all Subsidiary Guarantor Senior Debt of such
Subsidiary Guarantor.
Certain Covenants............. The Indenture pursuant to which the New Notes
will be issued will, among other things, limit
the ability of the Company and its Restricted
Subsidiaries to: (i) incur additional
indebtedness or issue preferred stock; (ii)
make certain Restricted Payments; (iii) grant
Liens on assets; (iv) merge, consolidate or
transfer substantially all of their assets; (v)
enter into transactions with Affiliates; (vi)
sell assets; (vii) sell capital stock of
Subsidiaries; (viii) enter into certain sale
and leaseback transactions; (ix) impose
restrictions on any Restricted Subsidiary's
ability to pay dividends to the Company; (x)
incur other senior subordinated indebtedness;
and (xi) enter into certain lines of business.
Exchange Offer;
Registration Rights......... Under certain circumstances, the Company will
file and use its best efforts to cause to
become effective under the Securities Act a
Shelf Registration Statement (as defined) with
respect to the resale of the Notes and keep
such Shelf Registration Statement effective
generally until two years after the effective
date thereof. In the event the foregoing
registration requirements are not met, a
Registration Default (as defined) shall be
deemed to have occurred and specified
Liquidated Damages will become payable with
respect to the Notes until such Registration
Default has been cured. See "Description of the
New Notes -- Exchange Offer; Registration
Rights."
Risk Factors.................. See "Risk Factors" for a discussion of certain
factors that should be considered by
prospective purchasers of the New Notes,
including factors affecting forward-looking
statements.
A description of the terms of the New Notes, including definitions of terms
which are capitalized above, is set forth herein under "Description of the New
Notes."
11
<PAGE> 16
SUMMARY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
The following table sets forth summary unaudited pro forma condensed
consolidated balance sheet data of the Company as of December 31, 1997 and
summary unaudited pro forma condensed consolidated income statement data of the
Company for the fiscal year ended September 30, 1997, for the three months ended
December 31, 1997 and for the twelve months ended December 31, 1997. Oshkosh's
fiscal year ends on September 30, while McNeilus' fiscal year ends on the last
day of February. The pro forma condensed consolidated balance sheet data as of
December 31, 1997 give effect to the Transactions as if they had occurred on
December 31, 1997. The pro forma condensed consolidated income statement data
and other data for the fiscal year ended September 30, 1997, for the three
months ended December 31, 1997 and for the twelve months ended December 31, 1997
gives effect to the Transactions as if they had occurred at the beginning of the
period presented. Such pro forma data are not necessarily indicative of the
future results of operations of the Company or the results of operations that
would have been realized had the Transactions occurred as of the dates or for
the periods presented. The following information should be read in conjunction
with "Management's Discussion and Analysis of Consolidated Financial Condition
and Results of Operations" and the historical consolidated financial statements
of Oshkosh, the unaudited pro forma condensed consolidated financial statements
of the Company and the historical consolidated financial statements of McNeilus
and the related notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
THREE TWELVE
FISCAL YEAR MONTHS MONTHS
ENDED ENDED ENDED
SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1997 1997 1997
------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales................................................... $1,009,786 $219,096 $1,011,267
Cost of sales............................................... 863,330 185,105 862,087
---------- -------- ----------
Gross income............................................ 146,456 33,991 149,180
Operating expenses:
Selling, general and administrative....................... 74,521 18,883 76,172
Engineering, research and development..................... 8,546 2,257 8,696
Amortization of goodwill and other intangibles............ 11,112 2,786 11,106
---------- -------- ----------
Total operating expenses................................ 94,179 23,926 95,974
---------- -------- ----------
Income from operations...................................... 52,277 10,065 53,206
Interest expense............................................ 30,697 7,555 30,693
Other income, net........................................... 646 414 686
---------- -------- ----------
Income from operations before income taxes and equity in
income of unconsolidated partnership...................... 22,226 2,924 23,199
Provision for income taxes.................................. 9,049 1,250 9,147
---------- -------- ----------
13,177 1,674 14,052
Equity in income of unconsolidated partnership.............. 1,918 451 1,918
---------- -------- ----------
Income from continuing operations........................... $ 15,095 $ 2,125 $ 15,970
========== ======== ==========
OTHER FINANCIAL DATA:
EBITDA(1)................................................... $ 78,774 $ 16,574 $ 79,432
EBITDA margin % (1)......................................... 7.8% 7.6% 7.9%
Depreciation and amortization............................... 25,907 6,240 25,636
Capital expenditures........................................ 9,311 2,956 9,666
Ratio of EBITDA to cash interest expense(2).................................................. 2.7x
Ratio of long-term debt to EBITDA............................................................ 4.3x
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
1997
------------
<S> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 2,698
Working capital............................................. 77,835
Total assets................................................ 696,990
Long-term debt, including current portion................... 340,932
Shareholders' equity........................................ 122,992
</TABLE>
12
<PAGE> 17
- -------------------------
(1) EBITDA represents income from operations plus depreciation and amortization.
EBITDA also reflects the reduction of certain operating expenses that were
incurred at the direction of former stockholders of McNeilus. Information
concerning EBITDA has been included because management believes that EBITDA
is generally accepted as providing useful information regarding a company's
ability to service and/or incur debt. EBITDA should not be considered in
isolation or as a substitute for net income, cash flows or other income or
cash flow data prepared in accordance with generally accepted accounting
principles or as a measure of a company's profitability or liquidity. The
Company understands that, while EBITDA is frequently used by securities
analysts in the evaluation of companies, EBITDA, as used herein, is not
necessarily comparable to other similarly titled captions of other companies
due to potential inconsistencies in the method of calculation. EBITDA is not
intended as an alternative to cash flow from operating activities as a
measure of liquidity, an alternative to net income as an indicator of
operating performance or an alternative to any other measure of performance
in conformity with generally accepted accounting principles. EBITDA margin
percentage is calculated by dividing EBITDA by net sales.
The calculation of pro forma EBITDA is set forth below (dollars in
thousands):
<TABLE>
<CAPTION>
FISCAL YEAR THREE MONTHS TWELVE MONTHS
ENDED ENDED ENDED
SEPTEMBER 30, 1997 DECEMBER 31, 1997 DECEMBER 31, 1997
------------------ ----------------- -----------------
<S> <C> <C> <C>
Income from operations................... $52,277 $10,065 $53,206
Depreciation and amortization, excluding
amortization of debt issue costs....... 24,681 5,933 24,410
Operating expense adjustment............. 1,816 576 1,816
------- ------- -------
EBITDA................................. $78,774 $16,574 $79,432
======= ======= =======
</TABLE>
(2) Cash interest expense represents total interest expense as reduced for
interest expense relating to the amortization of deferred debt issuance
costs. Amortization of deferred debt issuance costs equalled $1,226, $307
and $1,226 for the fiscal year ended September 30, 1997, the three months
ended December 31, 1997 and the twelve months ended December 31, 1997,
respectively.
13
<PAGE> 18
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA FOR OSHKOSH
The following table presents summary historical consolidated financial and
other data of Oshkosh as of and for the fiscal years ending September 30, 1997,
1996 and 1995, which have been derived from the audited consolidated financial
statements of Oshkosh, and as of and for the three months ended December 31,
1997 and 1996, which have been derived from the unaudited interim financial
statements of Oshkosh. The consolidated financial statements of Oshkosh for the
fiscal years 1997, 1996 and 1995 were audited by Ernst & Young LLP, independent
auditors. In the opinion of management, the interim consolidated financial
statements reflect all adjustments (consisting only of normal and recurring
adjustments) necessary to fairly present the information presented for such
periods. The results of operations for the three months ended December 31, 1997
are not necessarily indicative of the results of operations to be expected for
the full fiscal year. The following information should be read in conjunction
with "Management's Discussion and Analysis of Consolidated Financial Condition
and Results of Operations" and the historical consolidated financial statements
of Oshkosh and the related notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED THREE MONTHS ENDED
SEPTEMBER 30, DECEMBER 31,
------------------------------ -------------------
1997 1996(1) 1995 1997 1996
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales................................. $683,234 $413,455 $438,557 $151,801 $150,320
Gross income.............................. 88,844 35,079 53,978 22,307 19,583
Total operating expenses.................. 60,059 38,680 34,685 14,945 13,150
Income (loss) from operations............. 28,785 (3,601) 19,293 7,362 6,433
OTHER FINANCIAL DATA:
EBITDA(2)................................. $ 42,637 $ 9,316 $ 27,702 $ 10,591 $ 9,934
EBITDA margin %(2)........................ 6.2% 2.3% 6.3% 7.0% 6.6%
Depreciation and amortization............. 14,070 8,798 8,409 3,283 3,556
Capital expenditures...................... 6,263 5,355 5,347 1,697 1,342
</TABLE>
- -------------------------
(1) On September 18, 1996, Oshkosh acquired for $156,926 in cash all of the
issued and outstanding stock of Pierce, a manufacturer and marketer of fire
trucks and other fire apparatus. The acquisition was accounted for using the
purchase method of accounting and accordingly, the income statement data
includes the operating results of Pierce since the date of acquisition.
(2) EBITDA represents income (loss) from operations plus depreciation and
amortization. EBITDA also includes the add-back of the non-cash write-off of
certain Oshkosh investments of $4.1 million in the fiscal year ended
September 30, 1996. Information concerning EBITDA has been included because
management believes that EBITDA is generally accepted as providing useful
information regarding a company's ability to service and/or incur debt.
EBITDA should not be considered in isolation or as a substitute for net
income, cash flows or other income or cash flow data prepared in accordance
with generally accepted accounting principles or as a measure of a company's
profitability or liquidity. The Company understands that, while EBITDA is
frequently used by securities analysts in the evaluation of companies,
EBITDA, as used herein, is not necessarily comparable to other similarly
titled captions of other companies due to potential inconsistencies in the
method of calculation. EBITDA is not intended as an alternative to cash flow
from operating activities as a measure of liquidity, an alternative to net
income as an indicator of operating performance or an alternative to any
other measure of performance in conformity with generally accepted
accounting principles. EBITDA margin percentage is calculated by dividing
EBITDA by net sales.
14
<PAGE> 19
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA FOR MCNEILUS
The following table presents summary historical consolidated financial and
other data of McNeilus as of and for the fiscal years ending February 28, 1997,
February 29, 1996 and February 28, 1995, which have been derived from the
audited consolidated financial statements of McNeilus, and as of and for the
nine months ended November 30, 1997 and 1996, which have been derived from the
unaudited interim consolidated financial statements of McNeilus. The
consolidated financial statements of McNeilus for the fiscal years 1997, 1996
and 1995 were audited by Larson, Allen, Weishair and Co., LLP, independent
auditors. In the opinion of management, the interim consolidated financial
statements reflect all adjustments (consisting only of normal and recurring
adjustments) necessary to fairly present the information presented for such
periods. The results of operations for the nine months ended November 30, 1997
are not necessarily indicative of the results of operations to be expected for
the full fiscal year. The following information should be read in conjunction
with "Management's Discussion and Analysis of Consolidated Financial Condition
and Results of Operations" and the historical financial statements of McNeilus
and related notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED NINE MONTHS ENDED
------------------------------------------ NOVEMBER 30,
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, -------------------
1997 1996 1995 1997 1996
------------ ------------ ------------ -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.............................. $312,999 $331,359 $305,730 $246,774 $233,221
Gross profit........................... 55,836 49,569 46,293 43,084 41,291
Total operating expenses............... 29,092 27,457 29,319 25,844 24,853
Income from operations................. 26,744 22,112 16,974 17,240 16,438
OTHER FINANCIAL DATA:
EBITDA(1).............................. $ 31,587 $ 27,597 $ 21,445 $ 21,200 $ 20,541
EBITDA margin %(1)..................... 10.1% 8.3% 7.0% 8.6% 8.8%
Depreciation and amortization.......... 4,077 4,286 3,399 2,812 3,005
Capital expenditures................... 2,922 5,427 9,977 2,621 2,495
</TABLE>
- -------------------------
(1) EBITDA represents income from operations plus depreciation and amortization.
Information concerning EBITDA has been included because management believes
that EBITDA is generally accepted as providing useful information regarding
a company's ability to service and/or incur debt. EBITDA should not be
considered in isolation or as a substitute for net income, cash flows or
other income or cash flow data prepared in accordance with generally
accepted accounting principles or as a measure of a company's profitability
or liquidity. The Company understands that, while EBITDA is frequently used
by securities analysts in the evaluation of companies, EBITDA, as used
herein, is not necessarily comparable to other similarly titled captions of
other companies due to potential inconsistencies in the method of
calculation. EBITDA is not intended as an alternative to cash flow from
operating activities as a measure of liquidity, an alternative to net income
as an indicator of operating performance or an alternative to any other
measure of performance in conformity with generally accepted accounting
principles. EBITDA margin percentage is calculated by dividing EBITDA by net
sales.
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<PAGE> 20
RISK FACTORS
Holders of Notes should carefully consider the Risk Factors set forth below
prior to making a decision to tender into the Exchange Offer. This Prospectus
includes Forward-Looking Statements. Although the Company believes that its
plans, intentions and expectations reflected in such forward-looking statements
are reasonable, it can give no assurance that such plans, intentions or
expectations will be achieved. Important factors that could cause actual results
to differ materially from those included in or suggested by any Forward-Looking
Statements are set forth below and elsewhere in this Prospectus. All
Forward-Looking Statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by the Risk Factors set forth
below. See "Disclosure Regarding Forward-Looking Statements."
LEVERAGE AND DEBT SERVICE REQUIREMENTS
The Company is and will continue to be highly leveraged as a result of the
substantial indebtedness it incurred in connection with the Transactions. On
December 31, 1997, on a pro forma basis, the Company would have had total
Indebtedness (as defined) of approximately $366.3 million and shareholders'
equity of approximately $123.0 million, and the Company's pro forma ratio of
earnings to fixed charges for the twelve months ended December 31, 1997 would
have been 1.6 to 1. The Company will be permitted to incur additional
indebtedness in the future subject to certain limitations. See "Capitalization,"
"Description of Indebtedness -- Senior Credit Facility" and "Description of the
New Notes."
The Company's ability to make scheduled payments of principal of, or to pay
the interest or Liquidated Damages, if any, on, or to refinance, its
indebtedness (including the New Notes) or to fund planned capital expenditures
will depend on its future performance, which, to a certain extent, is subject to
general economic, financial, competitive, legislative, regulatory and other
factors that are beyond its control. Based upon the current level of operations
of the Company, management believes that cash flow from operations and available
cash, together with available borrowings under the Senior Credit Facility, will
be adequate to meet the Company's future liquidity needs until the scheduled
expiration of the Senior Credit Facility, at which time the Company would expect
to replace the Senior Credit Facility. There can be no assurance, however, that
the Company's business will generate sufficient cash flow from operations, that
anticipated growth opportunities and operating improvements will be realized or
that future borrowings will be available under the Senior Credit Facility in an
amount sufficient to enable the Company to service its indebtedness, including
the New Notes, or to fund its other liquidity needs. The Senior Credit Facility
and the term loans thereunder mature prior to the maturity of the New Notes, and
there can be no assurance that the Company will be able to replace the Senior
Credit Facility, or refinance any other Indebtedness, on commercially reasonable
terms or at all. See "Management's Discussion and Analysis of Consolidated
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."
The degree to which the Company is and will continue to be leveraged as a
result of the Transactions could have important consequences to Holders of the
New Notes, including, but not limited to: (i) making it more difficult for the
Company to satisfy its obligations with respect to the New Notes; (ii)
increasing the Company's vulnerability to general adverse economic and industry
conditions; (iii) limiting the Company's ability to obtain additional financing
to fund future working capital, capital expenditures and other general corporate
requirements, or to fund future acquisitions; (iv) requiring the dedication of a
substantial portion of the Company's cash flow from operations to the payment of
principal of, and interest on, its indebtedness, thereby reducing the
availability of such cash flow to fund working capital, capital expenditures,
research and development or other general corporate purposes; (v) limiting the
Company's flexibility in planning for, or reacting to, changes in its business
and the industries it serves; and (vi) placing the Company at a competitive
disadvantage compared to less leveraged competitors. In addition, the Indenture
and the Senior Credit Facility contain financial and other restrictive covenants
that limit the ability of the Company to, among other things, borrow additional
funds. Failure by the Company to comply with such covenants could result in an
event of default which, if not cured or waived, could have a material adverse
effect on the Company's financial condition, results of operations and debt
service capability. See "Description of Indebtedness -- Senior Credit Facility"
and "Description of the New Notes."
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<PAGE> 21
SUBORDINATION AND RANKING OF THE NEW NOTES AND SUBSIDIARY GUARANTEES
The New Notes will be subordinated in right of payment to all current and
future Senior Debt of the Company, and the Subsidiary Guarantees will be
subordinated in right of payment to all current and future Subsidiary Guarantor
Senior Debt. Upon any distribution to creditors of the Company or any Subsidiary
Guarantor in a liquidation or dissolution of the Company or any Subsidiary
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or such Subsidiary Guarantor or its
property, the holders of Senior Debt of the Company or Subsidiary Guarantor
Senior Debt, respectively, will be entitled to be paid in full before any
payment may be made with respect to the New Notes or any of the Subsidiary
Guarantees. The Company's obligations under the Senior Credit Facility are
secured by substantially all of the Company's assets and the stock of its
Restricted Subsidiaries, and the Indenture permits future Senior Debt to be
secured. In addition, the subordination provisions of the Indenture provide that
payments with respect to the New Notes and the Subsidiary Guarantees will be
blocked for an indefinite period so long as a payment default on Designated
Senior Debt (as defined) has occurred and is continuing and may be blocked for
up to 179 days each year in the event of certain non-payment defaults on
Designated Senior Debt. In the event of a bankruptcy, liquidation or
reorganization of the Company, Holders of the New Notes will participate ratably
with all holders of subordinated indebtedness of the Company that is deemed to
be of the same class as the New Notes, and potentially with all general
creditors of the Company other than holders of Senior Debt, based upon the
respective amounts owed to each holder or creditor, in the remaining assets of
the Company. In any of the foregoing events, there can be no assurance that
there would be sufficient assets in the Company or the Subsidiary Guarantors to
pay amounts due on the New Notes. As a result of the foregoing, Holders of the
New Notes may receive less, ratably, than the holders of Senior Debt. See
"Description of the New Notes -- Subordination."
As of December 31, 1997, on a pro forma basis, the aggregate Senior Debt of
the Company (including borrowings under the Senior Credit Facility) would have
been approximately $263.4 million and the aggregate Subsidiary Guarantor Senior
Debt of the Subsidiary Guarantors would have been approximately $2.9 million
(excluding guarantees of the Senior Credit Facility), and approximately $78.8
million would have been available for additional borrowing under the terms of
the Senior Credit Facility. The Indenture permits the incurrence of additional
indebtedness, including Senior Debt, by the Company and its Subsidiaries in the
future, subject to certain limitations. See "Description of Indebtedness --
Senior Credit Facility," "Description of the New Notes -- Incurrence of
Indebtedness and Issuance of Preferred Stock."
UNCERTAINTY INHERENT IN U.S. GOVERNMENT CONTRACTS
Approximately 29% of the Company's pro forma net sales for the twelve
months ended December 31, 1997 were made to the U.S. government under long-term
contracts and programs in the defense truck, fire apparatus and airport snow
removal markets. Companies engaged in supplying defense-related and other
equipment and services to U.S. government agencies are subject to certain
peculiar business risks. These risks include the ability of the U.S. government
to unilaterally suspend its contractors from receiving new contracts in the
event of certain violations of law or regulations. Although the Company has not
faced any such suspension, it has been involved in governmental investigations
of various matters in the past, and there can be no assurance that the U.S.
government will not continue to pursue such matters or that additional
investigations will not occur. The U.S. government also has the right to
terminate contracts either for its convenience or the default of the contractor.
In addition, certain costs and expenses are not allowable charges under U.S.
government contracts. The Company, as a U.S. government contractor, is subject
to financial audits and other reviews by the U.S. government of performance of,
and the accounting and general practices relating to, U.S. government contracts,
and like most large government contractors, the Company is audited and reviewed
on a continual basis. Costs and prices under such contracts may be subject to
adjustment based upon the results of such audits and reviews and the Company has
been required to pay adjustments in the past and is subject to a pending audit
seeking adjustments. There can be no assurance that the effects of audits,
reviews or governmental investigations will not have a material adverse effect
on the Company's financial condition, results of operations or debt service
capability. See "Business -- Government Contracts."
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<PAGE> 22
Congress usually appropriates funds for a given program on an annual basis
even though contract performance may take more than one year. Consequently, at
the outset of a major program, the contract is usually partially funded, and
additional monies are normally committed to the contract by the procuring agency
only as appropriations are made by Congress for future government fiscal years.
Failure of Congress to appropriate expected funding for the Company's programs
could have a material adverse effect on the Company's financial condition,
results of operations and debt service capability.
Trends in DoD procurement are difficult to predict and subject to change,
and therefore there are substantial uncertainties and risks associated with the
Company's efforts to diversify its offerings to meet the possible future demands
of the DoD. The loss or significant curtailment of the Company's material U.S.
military contracts (including without limitation those identified in "Business
- -- Products and Markets"), or the failure to renew or replace material contracts
upon expiration or completion as a result of budget cuts or for other reasons,
could materially adversely affect the Company's financial condition, results of
operations and debt service capability.
Substantially all of the Company's net sales to the DoD for the twelve
months ended December 31, 1997 were derived from fixed-price contracts. Although
the Company regularly fixes the supply costs of its contracts over the life of
the contract, inherent in such contracts is the risk that if a bid is submitted
and a contract is subsequently awarded, actual performance costs may exceed the
projected costs on which the fixed contract prices were based. To the extent
that actual costs exceed such projected costs, the Company's financial
condition, results of operations and debt service capability could be materially
adversely affected. See "Business -- Customers and Backlog" and "Business --
Government Contracts."
The Company's existing "family contracts" with the DoD for the PLS, HEMTT,
HET and LVS and for DoD vehicle parts expire in fiscal years 1999 and 2000,
prior to the maturity of the Notes. There can be no assurance such contracts
will be extended or renewed, or replaced with new contracts with the DoD. The
Company is currently competing for the MTTR program and FMTV contracts. There
can be no assurance that the Company will be awarded these or other new
contracts with the DoD, or that the Company will accurately project the costs of
such contracts or be able to fulfill such contracts at a profit to the Company.
The Company's failure to obtain these or other new contracts or to extend or
replace those expiring in fiscal years 1999 and 2000, or to accurately project
costs on any new contracts awarded by DoD, could have a material adverse effect
on the Company's financial condition, results of operations and debt service
capability.
DEPENDENCE ON KEY CUSTOMER; RISKS OF FURTHER REDUCTIONS OR CHANGES IN GOVERNMENT
EXPENDITURES
Sales under contracts with the DoD, including U.S. government Foreign
Military Sales ("FMS") or under subcontracts that identified the DoD as the
ultimate purchaser, represented $290.8 million of the Company's pro forma net
sales for the twelve months ended December 31, 1997, down from $423.8 million in
Oshkosh's fiscal 1994. The Company expects fiscal 1998 sales to the DoD to
decrease an additional $20.0 to $30.0 million from fiscal 1997 levels. The U.S.
defense budget has declined significantly in recent years, resulting in a
slowing of new program starts, program delays and program cancellations. The
reduction in these budgets has caused many government contractors to experience
declining net sales, increased pressure on operating margins and, in some cases,
net losses. There can be no assurance the U.S. government defense budget or
programs for which the Company sells products or competes will not be further
reduced or that any such further reductions will not have a material adverse
effect on the Company's financial condition, results of operations or debt
service capability.
CYCLICAL NATURE OF CONSTRUCTION INDUSTRY
The ready-mix concrete market served by the Company is highly cyclical and,
in large part, impacted by the strength of the economy generally, by prevailing
interest rates and by other factors which may have an effect on the level of
construction activity, either regionally or nationally. The U.S. construction
industry has generally been expanding in recent years, but has experienced
significant downturns in the past. Such downturns have materially and adversely
affected the net sales, profitability and cash flow of suppliers to the
construction industry, including the Company, and there can be no assurance that
such industry will not
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<PAGE> 23
experience similar downturns in the future. An economic recession may impact
substantially leveraged companies, such as the Company, more than similarly
situated companies with less leverage. A cyclical decline in overall customer
demand for concrete mixers could have a material adverse effect on the Company's
financial condition, results of operations and debt service capability.
CHALLENGES OF BUSINESS INTEGRATION; ACQUISITION STRATEGY
Realization of the benefits of the business combination of Oshkosh with
McNeilus will require the integration of each company's sales and marketing,
distribution, manufacturing, engineering, finance and administrative
organizations. The successful integration of the companies will require
substantial attention from the companies' management teams. The diversion of
management attention, as well as any other difficulties which may be encountered
in the transaction and integration processes, could have an adverse impact on
the financial condition, results of operations or debt service capabilities of
the Company. Integrating the companies could, for example, result in a loss of
McNeilus or Oshkosh customers. There can be no assurance that Oshkosh will be
able to integrate the operations of Oshkosh and McNeilus successfully or that
the McNeilus business will continue to operate as profitably after the
Acquisition.
In addition, there can be no assurance that the Company will be able to
identify additional acquisition candidates, obtain financing for future
acquisitions or consummate future acquisitions. If any such future acquisitions
are consummated, there can be no assurance that the Company will be able to
successfully integrate the acquired businesses or operate them profitably.
COMPETITION
The Company operates in highly competitive industries. The Company competes
in the highly competitive fire apparatus and defense truck markets principally
on the basis of the lowest qualified bid. To submit a qualified bid, it must be
demonstrated that the fire apparatus or defense truck meets stringent
specifications, and for most defense truck contracts, passes extensive testing.
In addition, decreases in the DoD budget have resulted in a reduction in the
number and size of contracts, which has intensified the competition for
remaining available contracts. Substantial efforts are continually undertaken by
the Company and its competitors in order to maintain existing levels of defense
business and to succeed in bid competitions for available contracts. In the
refuse truck body and concrete mixer markets, the Company also faces intense
competition on the basis of price, innovation, quality, service and product
performance capabilities. As the Company seeks to expand its sales of refuse
truck bodies to municipal customers, the principal basis of competition for such
business will be lowest qualified bid. Several of the Company's competitors have
greater financial, marketing, manufacturing and distribution resources than the
Company. There can be no assurance that the Company's products will continue to
compete successfully with the products of competitors or that the Company will
be able to retain its customer base or to improve or maintain its profit margins
on sales to its customers, all of which could materially adversely affect the
Company's financial condition, results of operations and debt service
capability. See "Business -- Competition."
INTELLECTUAL PROPERTY MATTERS
The Company's patents and licenses are important in the operation of its
business. Although the Company intends to protect its intellectual property
rights vigorously, there can be no assurance that it will be successful in doing
so. The Company has received, and may in the future receive, communications from
third parties claiming that one or more of the Company's products infringe upon
such party's intellectual property. If a third party were to make a valid claim,
the Company would likely need to obtain a license from such third party on
commercial terms, which would likely increase the Company's costs. Litigation,
which could result in substantial cost to, and diversion of resources of, the
Company could be necessary to enforce patents or other intellectual property
rights of the Company or to defend the Company against claimed infringement of
the rights of others. Infringement cases are brought against the Company from
time to time, and certain cases are presently pending. Although the Company
believes that its products do not infringe upon a valid claim of any patent and
that it has meritorious defenses to each presently pending lawsuit, it is not
possible to predict the outcomes of any of these lawsuits. The failure to obtain
necessary licenses or an adverse outcome in any
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<PAGE> 24
pending or future litigation relating to patent infringement or other
intellectual property matters could have a material adverse effect on the
Company's financial condition, results of operations and debt service
capability.
LABOR RELATIONS AND LABOR MARKET CONDITIONS
Certain of the hourly employees at the Company's manufacturing facilities
in Oshkosh, Wisconsin, representing approximately 23% of the Company's employees
in the United States at December 31, 1997, are represented by the United Auto
Workers. None of the employees at any of the Company's other facilities are
represented by unions. A dispute between the Company and its employees could
result in a work stoppage that could have a material adverse effect on the
Company's financial condition, results of operations and debt service
capability. In addition, sustained economic growth in the United States has
resulted in lower unemployment and higher demand for labor in many locations,
including certain locations in which the Company operates. There can be no
assurance that future labor disputes, contract renegotiations or market
conditions will not materially impact the Company's operations or costs in the
future.
PRODUCT LIABILITY AND WARRANTY CLAIMS
The Company's businesses expose it to potential product liability risks
that are inherent in the design, manufacture and sale of its products. While the
Company currently maintains what it believes to be suitable product liability
insurance, there can be no assurance that it will be able to maintain such
insurance on acceptable terms or that any such insurance will provide adequate
protection against potential liabilities. In the event of a claim against the
Company, a lack of sufficient insurance coverage could have a material adverse
effect on the Company and its business, financial condition, results of
operations and debt service capability. Moreover, even if the Company maintains
adequate insurance, any successful claim could materially and adversely affect
the reputation of the Company and its business, financial condition, results of
operations and debt service capability.
The design, manufacture and marketing of the Company's products, as well as
the inclusion of parts from other suppliers in the Company's products,
necessarily entails an inherent risk of product warranty claims. For example,
Oshkosh recorded charges of $9.7 million in fiscal 1997 and $7.7 million in
fiscal 1996 relating to warranty claims from continuing operations. There can be
no assurance that the provisions currently maintained by the Company for such
claims will be adequate to protect it in the event a significant warranty claim
is successfully asserted against the Company beyond the scope of its historical
experience, and such a claim could have a material adverse effect on the
Company's business, financial condition, results of operations and debt service
capability. See "Business -- Legal Proceedings."
ENVIRONMENTAL MATTERS
The Company is subject to various federal, state, and local environmental
laws and regulations. The Company believes its operations are in material
compliance with such laws and regulations. However, there can be no assurance
that violations will not occur or be identified, or that environmental laws and
regulations will not change in the future, in a manner that could materially and
adversely affect the Company.
Under certain circumstances, such environmental laws and regulations also
may impose joint and several liability for investigation and remediation of
contamination at locations owned or operated by the Company or its predecessors,
or at locations at which wastes or other contamination attributable to the
Company or its predecessors have come to be located. The Company can give no
assurance that such liability at facilities the Company currently owns or
operates, or at other locations, will not arise or be asserted against the
Company or entities for which it may be responsible. Such other locations could
include, for example, facilities formerly owned or operated by the Company (or
an entity or business that the Company has acquired), or locations to which
wastes generated by the Company (or an entity or business that the Company has
acquired) have been sent. Pierce has been identified as a potentially
responsible party under the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), for investigation
and remediation costs at a site neither owned nor operated by the Company. In
addition, groundwater contamination has been identified at and about the
Company's Oshkosh, Wisconsin facility. At either of these
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<PAGE> 25
locations the Company could become subject to liability that, except under
certain circumstances, is joint and several for the total cost of investigating
and remediating the site. See "Business -- Environmental Matters" for additional
information relating to these locations. Such liability, or liability at
locations yet to be identified, could have a material adverse effect on the
Company's financial condition, results of operations and debt service
capability.
DEPENDENCE ON LIMITED OR SOLE SOURCE SUPPLIERS AND SUBCONTRACTORS
The Company requires specific types of engines, transmissions, pumps,
flatracks and other parts for the manufacture of its products. The Company
obtains certain of these materials from limited or single source suppliers and
subcontractors with whom the Company has no long-term guaranteed supply
agreements. The Company has experienced problems with suppliers and
subcontractors and has incurred costs and expenses related to such problems. For
example, the Company has experienced production delays associated with its IPF
(as defined) subcontract with Steeltech (as defined), as discussed under the
caption "Management's Discussion and Analysis of Consolidated Financial
Condition and Results of Operations." There can be no assurance that in the
future significant disruption or termination of the supply of these parts or
components or a significant increase in the cost of these parts or components
will not occur and result in a material adverse effect on the Company's
financial condition, results of operations or debt service capability.
INTERNATIONAL BUSINESS
For the twelve months ended December 31, 1997, on a pro forma basis,
approximately 6% of the Company's net sales were attributable to products sold
outside of the United States, and expanded international sales are part of the
Company's growth strategy. Foreign sales are subject to various risks, including
exposure to currency fluctuations, political, religious and economic
instability, local labor market conditions, the imposition of foreign tariffs
and other trade barriers, and changes in governmental policies. The Company may
incur increased costs and experience delays or disruptions in product deliveries
and payments in connection with its foreign sales that could cause loss of
revenue. There can be no assurance that any such developments would not have a
material adverse effect on the Company's business, financial condition, results
of operations and debt service capability.
EXPOSURE TO INCREASES IN INTEREST RATES
Amounts to be drawn under the Senior Credit Facility bear interest at
variable rates, and the Company has no present plan to enter into any hedging
arrangements that would have the effect of fixing its interest rates. A
substantial increase in interest rates could materially increase the interest
paid by the Company under the Senior Credit Facility and such increase could
have a material adverse effect on the Company's business, financial condition,
results of operation, and debt service. See Note (f) of Notes to Unaudited Pro
Forma Condensed Consolidated Financial Statements.
POSSIBLE INABILITY TO REPURCHASE NEW NOTES UPON A CHANGE OF CONTROL OFFER
Upon a Change of Control, the Company will be required to offer to
repurchase all outstanding New Notes at 101% of the principal amount thereof
plus accrued and unpaid interest and Liquidated Damages, if any, to the date of
repurchase. However, there can be no assurance that sufficient funds will be
available at the time of any Change of Control to make any required repurchases
of New Notes tendered or that lenders under the Senior Credit Facility will
allow the Company to make such required repurchases, which are prohibited by the
terms of the Senior Credit Facility. Notwithstanding these provisions, subject
to certain limitations, the Company could enter into certain transactions,
including certain recapitalizations, that would not constitute a Change of
Control but would increase the amount of debt outstanding at such time. See
"Description of the New Notes -- Repurchase at the Option of Holders -- Change
of Control."
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RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S INDEBTEDNESS
The Indenture restricts, among other things, the Company's and the
Subsidiary Guarantors' ability to incur additional indebtedness, create liens,
pay dividends or make other restricted payments, consummate certain asset sales,
enter into certain transactions with affiliates, incur indebtedness that is
subordinate in right of payment to any Senior Debt and senior in right of
payment to the New Notes or the Subsidiary Guarantees, as the case may be,
impose restrictions on the ability of a Restricted Subsidiary to pay dividends
or make certain payments to the Company, merge or consolidate with any other
person or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the assets of the Company. In addition, the Senior Credit
Facility contains other and more restrictive covenants and prohibits the Company
from prepaying its other indebtedness (including the New Notes). See
"Description of Indebtedness -- Senior Credit Facility" and "Description of the
New Notes -- Certain Covenants." The Senior Credit Facility also requires the
Company to maintain specified financial ratios and satisfy certain financial
condition tests. The Company's ability to meet those financial ratios and tests
can be affected by events beyond its control, and there can be no assurance that
the Company will meet those tests. A breach of any of the foregoing covenants
could result in a default under the Senior Credit Facility and/or the Indenture.
Upon the occurrence of an event of default under the Senior Credit Facility, the
lenders thereunder could elect to declare all amounts outstanding under the
Senior Credit Facility, together with accrued and unpaid interest, to be
immediately due and payable, which would, in turn, result in an event of default
under the Indenture.
ABSENCE OF A PUBLIC MARKET; RESTRICTIONS ON TRANSFER
The Notes are currently owned by a relatively small number of beneficial
owners. The Notes have not been registered under the Exchange Act and will be
subject to restrictions on transferability to the extent that they are not
exchanged for the New Notes. The New Notes will constitute a new issue of
securities with no established trading market. Although the New Notes will
generally be permitted to be resold or otherwise transferred by Holders who are
not affiliates of the Company without compliance with the registration
requirements under the Securities Act, the Company does not intend to list the
New Notes on any securities exchange or to seek admission thereof to trading in
the National Association of Securities Dealers Automated Quotation System.
Although BancAmerica Robertson Stephens has advised the Company that it
currently intends to make a market in the New Notes, it is not obligated to do
so and may discontinue such market making at any time without notice. If a
trading market does not develop or is not maintained, holders of the New Notes
may experience difficulty in reselling the New Notes or may be unable to sell
them at all. If a market for the New Notes develops, any such market may be
discontinued at any time. See "Notice to Investors." In addition, such market
making activity will be subject to the limits imposed by the Exchange Act. See
"Description of the New Notes -- Exchange Offer; Registration Rights."
Accordingly, there can be no assurance as to the development or liquidity of any
market for the New Notes.
COMPLIANCE WITH EXCHANGE OFFER PROCEDURES; RESTRICTIONS ON RESALES
Issuance of the New Notes in exchange for Notes pursuant to the Exchange
Offer will be made only after a timely receipt by the Exchange Agent of such
Notes, a properly completed and duly executed Letter of Transmittal and all
other required documents. Therefore, Holders of the Notes desiring to tender
such Notes in exchange for New Notes should allow sufficient time to ensure
timely delivery. The Company is under no duty to give notification of defects or
irregularities with respect to the tenders of Notes for exchange. Notes that are
not tendered or are tendered but not accepted will, following the consummation
of the Exchange Offer, continue to be subject to the existing restrictions upon
transfer thereof and, upon consummation of the Exchange Offer, the registration
rights under the Registration Rights Agreement generally will terminate. In
addition, any Holder of Notes who tenders in the Exchange Offer for the purpose
of participating in a distribution of the New Notes may be deemed to have
received restricted securities and, if so, will be required to comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale. Each broker-dealer that receives New Notes for its
own account in exchange for Notes, where such Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities must acknowledge that it will deliver a prospectus in connection with
the initial resale of such New Notes. To
22
<PAGE> 27
the extent that Notes are tendered and accepted in the Exchange Offer, the
trading market for untendered and tendered but unaccepted Notes could be
adversely affected. See "The Exchange Offer."
FRAUDULENT CONVEYANCE
Under applicable provisions of federal bankruptcy law or comparable
provisions of state fraudulent transfer law, if, among other things, the Company
or any Subsidiary Guarantor, at the time it incurred the indebtedness evidenced
by the New Notes or its Subsidiary Guarantees, (i) (a) was or is insolvent or
rendered insolvent by reason of such incurrence or (b) was or is engaged in a
business or transaction for which the assets remaining with the Company or such
Subsidiary Guarantor constituted unreasonably small capital or (c) intended or
intends to incur, or believed or believes that it would incur, debts beyond its
ability to pay such debts as they mature; and (ii) the Company, or such
Subsidiary Guarantor received or receives less than reasonably equivalent value
or fair consideration for the incurrence of such indebtedness, then the New
Notes and the Subsidiary Guarantees, and any pledge or other security interest
securing such indebtedness, could be voided, or claims in respect of the New
Notes or the Subsidiary Guarantees could be subordinated to all other debts of
the Company or such Subsidiary Guarantor, as the case may be. In addition, the
payment of interest and principal by the Company pursuant to the New Notes or
the payments of amounts by a Subsidiary Guarantor pursuant to a Subsidiary
Guarantee could be voided and required to be returned to the person making such
payment, or to a fund for the benefit of the creditors of the Company or such
Subsidiary Guarantor, as the case may be.
The measures of insolvency for purposes of the foregoing considerations
will vary depending upon the law applied in any proceeding with respect to the
foregoing. Generally, however, the Company or a Subsidiary Guarantor would be
considered insolvent if: (i) the sum of its debts, including contingent
liabilities, were greater than the saleable value of all of its assets at a fair
valuation or if the present fair saleable value of its assets were less than the
amount that would be required to pay its probable liability on its existing
debts, including contingent liabilities, as they become absolute and mature; or
(ii) it could not pay its debts as they become due.
On the basis of historical financial information, recent operating history
and other factors, the Company and each Subsidiary Guarantor believes that,
after giving effect to the Indebtedness incurred in connection with the
Transactions, it will not be insolvent, will not have unreasonably small capital
for the business in which it is engaged and will not incur debts beyond its
ability to pay such debts as they mature. There can be no assurance, however, as
to what standard a court would apply in making such determinations or that a
court would agree with the Company's or the Subsidiary Guarantors' conclusions
in this regard.
CONTROL BY CERTAIN SHAREHOLDERS
The Company has two classes of common equity: Common Stock and Class A
Common Stock. The voting rights of the Common Stock are limited to the election
of 25% of the Company's Board of Directors and such other voting rights required
by law. The Class A Common Stock has the right to elect 75% of the Company's
Board of Directors and to vote on any other matter brought to a vote of the
Company's shareholders. Therefore, effective control of the Company is vested in
the holders of the Class A Common Stock, which is closely held. See "Principal
Shareholders."
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THE EXCHANGE OFFER
The following discussion sets forth or summarizes the material terms of the
Exchange Offer, including those set forth in the Letter of Transmittal
distributed with this Prospectus. This summary is qualified in its entirety by
reference to the full text of the documents underlying the Exchange Offer,
copies of which are filed as exhibits to the Registration Statement of which
this Prospectus is a part and are incorporated by reference herein.
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Notes were sold by the Company to the Initial Purchaser on February 26,
1998, and were subsequently resold to either qualified institutional buyers
pursuant to Rule 144A under the Securities Act or to persons in transactions
outside the United States in reliance on Regulation S under the Securities Act.
In connection with the Note Offering, the Company entered into the Registration
Rights Agreement, which requires, among other things, that promptly following
the completion of the Note Offering, the Company and the Subsidiary Guarantors
(i) file with the Commission a registration statement under the Securities Act
with respect to an issue of new Notes of the Company identical in all material
respects to the Notes, (ii) use their best efforts to cause such registration
statement to become effective under the Securities Act and (iii) upon the
effectiveness of that registration statement, offer to the Holders of the Notes
the opportunity to exchange their Notes for a like principal amount of new
Notes, which would be issued without a restrictive legend and generally may be
reoffered and resold by the holder without restrictions or limitations under the
Securities Act (other than any such holder that is an "affiliate" of the Company
within the meaning of Rule 405 under the Securities Act). A copy of the
Registration Rights Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. This Prospectus, the Registration
Statement of which it is a part and the Exchange Offer are made pursuant to and
as required by the Registration Rights Agreement. The term "Holder" with respect
to the Exchange Offer means any person in whose name the Notes are registered on
the books of the Company or any other person who has obtained a properly
completed bond power from the registered holder.
Because the Exchange Offer is for any and all Notes, the number of Notes
tendered and exchanged in the Exchange Offer will reduce the principal amount of
Notes outstanding. Following the consummation of the Exchange Offer, Holders of
the Notes who did not tender their Notes generally will not have any further
registration rights under the Registration Rights Agreement, and such Notes will
continue to be subject to certain restrictions on transfer. Accordingly, the
liquidity of the market for such Notes could be adversely affected. The Notes
are currently eligible for sale pursuant to Rule 144A through the PORTAL System
of the National Association of Securities Dealers, Inc. Because the Company
anticipates that most holders of Notes will elect to exchange such Notes for New
Notes due to the absence of restrictions on the resale of New Notes under the
Securities Act, the Company anticipates that the liquidity of the market for any
Notes remaining after the consummation of the Exchange Offer may be
substantially limited.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Notes
validly tendered and not withdrawn prior to 12:00 midnight, New York City time,
on the Expiration Date. The Company will issue $1,000 principal amount of New
Senior Subordinated Notes in exchange for each $1,000 principal amount of
outstanding Senior Subordinated Notes accepted in the Exchange Offer. Holders
may tender some or all of their Notes pursuant to the Exchange Offer. However,
Notes may be tendered only in integral multiples of $1,000.
The form and terms of the New Notes are the same as the form and terms of
the Notes except that (i) the New Notes have been registered under the
Securities Act and hence will not bear legends restricting the transfer thereof
and (ii) the holders of the New Notes generally will not be entitled to certain
rights under the Registration Rights Agreement, which rights generally will
terminate upon consummation of the Exchange Offer. The New Notes will evidence
the same debt as the Notes and will be entitled to the benefits of the
Indenture.
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Holders of Notes do not have any appraisal or dissenters' rights under the
Wisconsin Business Corporation Law or the Indenture in connection with the
Exchange Offer. The Company intends to conduct the Exchange Offer in accordance
with the applicable requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, including Rule 14e-1 thereunder.
The Company shall be deemed to have accepted validly tendered Notes when,
as and if the Company has given oral or written notice thereof to the Exchange
Agent. The Exchange Agent will act as agent for the tendering Holders for the
purpose of receiving the New Notes from the Company.
If any tendered Notes are not accepted for exchange because of an invalid
tender, the occurrence of certain other events set forth herein or otherwise,
the certificates for any such unaccepted Notes will be returned, without
expense, to the tendering Holder thereof as promptly as practicable after the
Expiration Date.
Holders who tender Notes in the Exchange Offer will not be required to pay
brokerage commissions or fees or, subject to the instructions in the Letter of
Transmittal, transfer taxes with respect to the exchange of Notes pursuant to
the Exchange Offer. The Company will pay all charges and expenses, other than
transfer taxes in certain circumstances, in connection with the Exchange Offer.
See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 12:00 midnight, New York City time,
on , 1998, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
To extend the Exchange Offer, the Company will notify the Exchange Agent of
any extension by oral or written notice, followed by a public announcement
thereof no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date.
The Company reserves the right, in its reasonable judgment, (i) to delay
accepting any Notes, to extend the Exchange Offer or to terminate the Exchange
Offer if any of the conditions set forth below under "-- Conditions" shall not
have been satisfied, by giving oral or written notice of such delay, extension
or termination to the Exchange Agent or (ii) to amend the terms of the Exchange
Offer in any manner. Any such delay in acceptance, extension, termination or
amendment will be followed as promptly as practicable by a public announcement
thereof. If the Exchange Offer is amended in a manner determined by the Company
to constitute a material change, the Company will promptly disclose such
amendment by means of a prospectus supplement that will be distributed to the
registered Holders, and, depending upon the significance of the amendment and
the manner of disclosure to the registered Holders, the Company will extend the
Exchange Offer for five to ten business days if the Exchange Offer would
otherwise expire during such five to ten business-day period.
If the Company does not consummate the Exchange Offer, or, in lieu thereof,
the Company does not file and cause to become effective a resale shelf
registration for the Notes within the time periods set forth therein, Liquidated
Damages will accrue and be payable on the Notes either temporarily or
permanently. See "Description of the New Notes -- Registration Rights;
Liquidated Damages."
INTEREST ON NEW NOTES
The New Senior Subordinated Notes will bear interest from February 26,
1998, the date of issuance of the Notes that are tendered in exchange for the
New Notes (or the most recent date to which interest on such Notes has been
paid). Accordingly, Holders of Notes that are accepted for exchange will not
receive interest that is accrued but unpaid on the Notes at the time of tender,
but such interest will be payable on the first March 1 or September 1, as the
case may be, after the Expiration Date. Interest on the New Notes will be
payable semiannually on each March 1 and September 1, commencing on September 1,
1998.
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<PAGE> 30
PROCEDURES FOR TENDERING
Only a holder of Notes may tender such Notes in the Exchange Offer. To
tender in the Exchange Offer, a Holder must complete, sign and date the relevant
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with the Notes
and any other required documents, to the Exchange Agent so as to be received by
the Exchange Agent at the address set forth below prior to 12:00 midnight, New
York City time, on the Expiration Date. The Letter of Transmittal must be used
to tender Notes. Delivery of the Notes may be made by book-entry transfer in
accordance with the procedures described below. Confirmation of such book-entry
transfer must be received by the Exchange Agent prior to the Expiration Date.
By executing the Letter of Transmittal, each Holder will make to the
Company the representation set forth below in the second paragraph under the
heading "-- Resale of New Notes."
The tender by a Holder and the acceptance thereof by the Company will
constitute an agreement between such Holder and the Company in accordance with
the terms and subject to the conditions set forth herein and in the Letter of
Transmittal.
THE METHOD OF DELIVERY OF NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE
HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN
OVERNIGHT OR HAND DELIVERY SERVICE. IF DELIVERY BY MAIL IS NEVERTHELESS USED,
REGISTERED MAIL IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED
TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER
OF TRANSMITTAL OR NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR
RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO
EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner whose Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to tender
should contact the registered Holder promptly and instruct such registered
Holder to tender on such beneficial owner's behalf.
Signatures on the Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined) unless
the Notes tendered pursuant thereto are tendered (i) by a registered Holder who
has not completed the box entitled "Special Registration Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. In the event that signatures on a Letter of
Transmittal or a notice of withdrawal, as the case may be, are required to be
guaranteed, such guarantee must be by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act (an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than the
registered Holder of any Notes listed therein, such Notes must be endorsed or
accompanied by a properly completed bond power, signed by such registered Holder
as such registered Holder's name appears on such Notes with the signature
thereon guaranteed by an Eligible Institution.
If the Letter of Transmittal or any Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the Company,
evidence satisfactory to the Company of their authority to so act must be
submitted with the Letter of Transmittal.
The Company understands that the Exchange Agent will make a request
promptly after the date of this Prospectus to establish accounts with respect to
the Notes at the Depository for the purpose of facilitating the Exchange Offer,
and subject to the establishment thereof, any financial institution that is a
participant in the
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<PAGE> 31
Depository's system may make book-entry delivery of the Notes by causing the
Depository to transfer such Notes into the Exchange Agent's account with respect
to the Notes in accordance with the Depository's procedures for such transfer.
Although delivery of the Notes may be effected through book-entry transfer into
the Exchange Agent's account at the Depository, an appropriate Letter of
Transmittal properly completed and duly executed with any required signature
guarantee and all other required documents must in each case be transmitted to
and received or confirmed by the Exchange Agent at its address set forth below
on or prior to the Expiration Date, or, if the guaranteed delivery procedures
described below are complied with, within the time period provided under such
procedures. Delivery of documents to the Depository does not constitute delivery
to the Exchange Agent.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Notes and withdrawal of tendered Notes will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and all
Notes not properly tendered or any Notes the Company's acceptance of which
would, in the opinion of counsel for the Company, be unlawful. The Company also
reserves the right to waive any defects, irregularities or conditions of tender
as to particular Notes. The Company's interpretation of the terms and conditions
of the Exchange Offer (including the instructions in the Letter of Transmittal)
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Notes must be cured within such
time as the Company shall determine. Although the Company intends to notify
Holders of defects or irregularities with respect to tenders of Notes, none of
the Company, the Exchange Agent or any other person shall incur any liability
for failure to give such notification. Tenders of Notes will not be deemed to
have been made until such defects or irregularities have been cured or waived.
Any Notes received by the Exchange Agent that are not properly tendered and as
to which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering Holders, unless otherwise
provided in the Letter of Transmittal, as soon as practicable following the
Expiration Date.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Notes and (i) whose New Notes are not
immediately available, (ii) who cannot deliver their Notes, the Letter of
Transmittal or any other required documents to the relevant Exchange Agent or
(iii) who cannot complete the procedures for book-entry transfer, prior to the
Expiration Date, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the Holder, the certificate number(s)
of such Notes and the principal amount of Notes tendered, stating that the
tender is being made thereby and guaranteeing that, within three New York
Stock Exchange trading days after the Expiration Date, the Letter of
Transmittal (or facsimile thereof), together with the certificate(s)
representing the Notes (or a confirmation of book-entry transfer of such
Notes into the Exchange Agent's account at the Depository) and any other
documents required by the Letter of Transmittal, will be deposited by the
Eligible Institution with the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing all tendered
Notes in proper form for transfer (or a confirmation of book-entry transfer
of such Notes into the Exchange Agent's account at the Depository) and all
other documents required by the Letter of Transmittal, are received by the
Exchange Agent within three New York Stock Exchange trading days after the
Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to Holders who wish to tender their Notes according to the guaranteed
delivery procedures set forth above.
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WITHDRAWALS OF TENDERS
Except as otherwise provided herein, tenders of Notes may be withdrawn at
any time prior to 12:00 midnight New York City time, on the Expiration Date.
To withdraw a tender of Notes in the Exchange Offer, a written or facsimile
transmission notice of withdrawal must be received by the Exchange Agent at its
address set forth herein prior to 12:00 midnight New York City time, on the
Expiration Date. Any such notice of withdrawal must (i) specify the name of the
person having deposited the Notes to be withdrawn (the "Depositor"), (ii)
identify the Notes to be withdrawn (including the certificate number(s) and
principal amount of such Notes, or, in the case of Notes transferred by
book-entry transfer, the name and number of the account at the Depository to be
credited), (iii) be signed by the Holder in the same manner as the original
signature on the Letter of Transmittal by which such Notes were tendered
(including any required signature guarantees) or be accompanied by documents of
transfer sufficient to have the Trustee with respect to the Notes register the
transfer of such Notes into the name of the person withdrawing the tender, and
(iv) specify the name in which any such Notes are to be registered, if different
from that of the Depositor. All questions as to the validity, form and
eligibility (including time or receipt) of such notices will be determined by
the Company, whose determination shall be final and binding on all parties. Any
Notes so withdrawn will be deemed not to have been validly tendered for purposes
of the Exchange Offer and no New Notes will be issued with respect thereto
unless the Notes so withdrawn are validly retendered. Any Notes which have been
tendered but which are not accepted for exchange will be returned to the Holder
thereof without cost to such Holder as soon as practicable after withdrawal,
rejection of tender or termination of the Exchange Offer. Properly withdrawn
Notes may be retendered by following one of the procedures described above under
"-- Procedures for Tendering" at any time prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or to exchange New Notes for, any Notes, and
may terminate or amend the Exchange Offer as provided herein before the
acceptance of such Notes, if any law, statute, rule, regulation or
interpretation by the staff of the Commission is proposed, adopted or enacted,
which, in the reasonable judgment of the Company, might materially impair the
ability of the Company to proceed with the Exchange Offer or materially impair
the contemplated benefits of the Exchange Offer to the Company.
If the Company determines in its reasonable judgment that any of the
conditions are not satisfied, the Company may (i) refuse to accept any Notes and
return all tendered Notes to the tendering Holders, (ii) extend the Exchange
Offer and retain all Notes tendered prior to the expiration of the Exchange
Offer, subject, however, to the rights of Holders to withdraw such Notes (see
"Withdrawals of Tenders") or (iii) waive such unsatisfied conditions with
respect to the Exchange Offer and accept all properly tendered Notes which have
not been withdrawn. If such waiver constitutes a material change to the Exchange
Offer, the Company will promptly disclose such waiver by means of a prospectus
supplement that will be distributed to the registered holders, and, depending
upon the significance of the waiver and the manner of disclosure to the
registered Holders, the Company will extend the Exchange Offer for a period of
five to ten business days if the Exchange Offer would otherwise expire during
such five to ten business-day period.
EXCHANGE AGENT
Firstar Trust Company will act as Exchange Agent for the Exchange Offer
with respect to the Notes (the "Exchange Agent").
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<PAGE> 33
Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter of Transmittal for the Notes and requests for
copies of Notice of Guaranteed Delivery should be directed to the Exchange
Agent, addressed as follows:
By Registered or Certified Mail, Overnight Mail or Courier Service or in
Person By Hand:
Firstar Trust Company
1555 North River Center Drive
Suite 301
Milwaukee, Wisconsin 53212
Attention: Pamela Warner
By Facsimile:
(414) 905-5049
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telephone, facsimile or in person by officers and
regular employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers or other persons
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith and pay
other registration expenses, including fees and expenses of the Trustee, filing
fees, blue sky fees and printing and distribution expenses.
The Company will pay all transfer taxes, if any, applicable to the exchange
of the Notes pursuant to the Exchange Offer. If, however, certificates
representing the New Notes or the Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be issued in the name
of, any person other than the registered Holder of the Notes tendered, or if
tendered Notes are registered in the name of any person other than the person
signing the Letter of Transmittal, or if a transfer tax is imposed for any
reason other than the exchange of the Notes pursuant to the Exchange Offer, then
the amount of any such transfer taxes (whether imposed on the registered Holder
or any other person) will be payable by the tendering Holder.
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Notes,
which is the aggregate principal amount of the Notes, as reflected in the
Company's accounting records on the date of exchange. Accordingly, no gain or
loss for accounting purposes will be recognized in connection with the Exchange
Offer. The expenses of the Exchange Offer will be amortized over the term of the
New Notes.
RESALE OF NEW NOTES
Based on interpretations by the staff of the Commission set forth in
no-action letters issued to third parties, the Company believes that New Notes
issued pursuant to the Exchange Offer in exchange for Notes may be offered for
resale, resold and otherwise transferred by any Holder of such New Notes (other
than any such Holder which is an "affiliate" of the Company within the meaning
of Rule 405 under the Securities Act) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such Holder's business and such
Holder does not intend to participate, and has no arrangement or understanding
with any person to participate, in a distribution of such New Notes. Any Holder
who tenders in the Exchange Offer with the intention to participate, or for the
purpose of participating, in a distribution of the New Notes may not rely on the
position of the staff of the Commission enunciated in Exxon Capital Holdings
Corporation (available April 13, 1989) and Morgan Stanley & Co., Incorporated
(available June 5, 1991), or similar no-action letters, but rather must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any resale
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<PAGE> 34
transaction. In addition, any such resale transaction should be covered by an
effective registration statement containing the selling security holder's
information required by Item 507 or 508 of Regulation S-K of the Securities Act,
as applicable. Each broker-dealer that receives New Notes for its own account in
exchange for Notes, where such Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities, may be a
statutory underwriter and must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes.
By tendering in the Exchange Offer, each Holder will represent to the
Company that, among other things, (i) the New Notes acquired pursuant to the
Exchange Offer are being obtained in the ordinary course of business of the
person receiving such New Notes, whether or not such person is a Holder, (ii)
neither the Holder nor any such other person has an arrangement or understanding
with any person to participate in a distribution of such New Notes and (iii) the
Holder and such other person acknowledge that if they participate in the
Exchange Offer for the purpose of distributing the New Notes (a) they must, in
the absence of an exemption therefrom, comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale of the New Notes and cannot rely on the no-action letters referenced
above and (b) failure to comply with such requirements in such instance could
result in such Holder incurring liability under the Securities Act for which
such Holder is not indemnified by the Company. Further, by tendering in the
Exchange Offer, each Holder that may be deemed an "affiliate" (as defined under
Rule 405 of the Securities Act) of the Company will represent to the Company
that such Holder understands and acknowledges that the New Notes may not be
offered for resale, resold or otherwise transferred by that Holder without
registration under the Securities Act or an exemption therefrom.
CONSEQUENCES OF FAILURE TO EXCHANGE
As a result of the making of this Exchange Offer, the Company will have
fulfilled one of its obligations under the Registration Rights Agreement, and
Holders of Notes who do not tender their Notes generally will not have any
further registration rights under the Registration Rights Agreement or
otherwise. Accordingly, any Holder of Notes that does not exchange that Holder's
Notes for New Notes will continue to hold the untendered Notes and will be
entitled to all the rights and limitations applicable thereto under the
Indenture, except to the extent that such rights or limitations, by their terms,
terminate or cease to have further effectiveness as a result of the Exchange
Offer.
The Notes that are not exchanged for New Notes pursuant to the Exchange
Offer will remain restricted securities. Accordingly, such Notes may be resold
only (i) to the Company (upon redemption thereof or otherwise), (ii) pursuant to
an effective registration statement under the Securities Act, (iii) so long as
the Notes are eligible for resale pursuant to Rule 144A, to a qualified
institutional buyer within the meaning of Rule 144A under the Securities Act in
a transaction meeting the requirements of Rule 144A, (iv) outside the United
States to a foreign person pursuant to the exemption from the registration
requirements of the Securities Act provided by Regulation S thereunder, (v)
pursuant to an exemption from registration under the Securities Act provided by
Rule 144 thereunder (if available), or (vi) to an institutional accredited
investor in a transaction exempt from the registration requirements of the
Securities Act, in each case in accordance with any applicable securities laws
of any state of the United States. See "Risk Factors -- Restrictions on
Transfer."
OTHER
Participation in the Exchange Offer is voluntary and Holders should
carefully consider whether to accept. Holders of the Notes are urged to consult
their financial and tax advisors in making their own decision on what action to
take.
The Company may in the future seek to acquire untendered Notes in open
market or privately negotiated transactions, through subsequent exchange offers
or otherwise. The Company has no present plans to acquire any Notes that are not
tendered in the Exchange Offer or to file a registration statement to permit
resales of any untendered Notes.
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<PAGE> 35
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OFFER
The following discussion is based upon current provisions of the Internal
Revenue Code of 1986, as amended, applicable Treasury regulations, judicial
authority and administrative rulings and practice. There can be no assurance
that the Internal Revenue Service (the "IRS") will not take a contrary view, and
no ruling from the IRS has been or will be sought. Legislative, judicial or
administrative changes or interpretations may be forthcoming that could alter or
modify the statements and conditions set forth herein. Any such changes or
interpretations may or may not be retroactive and could affect the tax
consequences to Holders. Certain Holders of the Notes (including insurance
companies, taxexempt organizations, financial institutions, broker-dealers,
foreign corporations and persons who are not citizens of residents of the United
States) may be subject to special rules not discussed below. Each Holder of a
Note should consult his, her or its own tax advisor as to the particular tax
consequences of exchanging such Holder's Notes for New Notes, including the
applicability and effect of any state, local or foreign tax laws.
The issuance of the New Notes to Holders of the Notes pursuant to the terms
set forth in this Prospectus will not constitute an exchange for federal income
tax purposes. Consequently, no gain or loss would be recognized by Holders of
the Notes upon receipt of the New Notes, and ownership of the New Notes will be
considered a continuation of ownership of the Notes. For purposes of determining
gain or loss upon the subsequent sale or exchange of the New Notes, a Holder's
basis in the New Notes should be the same as such Holder's basis in the Notes
exchanged therefor. A Holder's holding period for the New Notes should include
the Holder's holding period for the Notes exchanged therefor. The issue price,
and other tax characteristics of the New Notes should be identical to the issue
price, and other tax characteristics of the Notes exchanged therefor. See also
"Certain Federal Income Tax Considerations."
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THE TRANSACTIONS
THE ACQUISITION
On December 8, 1997, Oshkosh entered into the Stock Purchase Agreement
pursuant to which, on February 26, 1998, it acquired all of the outstanding
capital stock of McNeilus and entered into related non-compete and ancillary
agreements for an aggregate acquisition price of $250.0 million. At November 30,
1997, McNeilus had unrestricted cash of $17.7 million ($20.2 million less an
estimated $2.5 million required for capital and surplus at McNeilus' captive
insurance subsidiary). The Stock Purchase Agreement required, among other
things, that the selling stockholders of McNeilus prepay certain notes and
purchase selected assets of McNeilus, which provided net proceeds to Oshkosh of
approximately $16.1 million. As a result, management estimates that the
effective cost to the Company in connection with the Acquisition was
approximately $216.2 million. Concurrently with the consummation of the
Acquisition, the Company consummated the Note Offering, established the Senior
Credit Facility, applied the net proceeds from the Note Offering and the Senior
Credit Facility to consummate the Acquisition, refinanced existing Oshkosh
indebtedness, paid fees and expenses and established the Lease Financing
Facility.
The Stock Purchase Agreement contained customary representations and
warranties from McNeilus and the majority shareholders of McNeilus with respect
to McNeilus and the stock of McNeilus. The majority shareholders of McNeilus
have agreed to indemnify Oshkosh, its affiliates and McNeilus for any loss
resulting from: (i) any breach of any such representation or warranty; (ii) the
failure of McNeilus or the shareholders of McNeilus to comply with covenants
contained in the Stock Purchase Agreement; or (iii) any taxes imposed on
McNeilus or Oshkosh in connection with the disposition of certain assets of
McNeilus prior to closing of the Acquisition (the "Closing"); provided, however,
that such indemnity is limited to cover only losses in excess of $4.0 million in
the aggregate and less than $24.0 million in the aggregate. Such indemnification
obligations of the majority shareholders of McNeilus generally expire eighteen
months after the Closing. Oshkosh has agreed to indemnify the shareholders of
McNeilus for any loss resulting from: (i) any breach of any representation or
warranty made by Oshkosh pursuant to the Stock Purchase Agreement; (ii) the
failure of Oshkosh to comply with covenants contained in the Stock Purchase
Agreement; (iii) the operation of McNeilus after the Closing; or (iv) certain of
Oshkosh's actions in seeking financing for Oshkosh.
THE SENIOR CREDIT FACILITY
The Senior Credit Facility is comprised of a multi-tranche Term Loan
Facility aggregating $225.0 million and a $100.0 million Revolving Credit
Facility entered into with Bank of America National Trust and Savings
Association ("Bank of America"), as agent and a lender, and certain other
financial institutions. The Senior Credit Facility is guaranteed by all of the
Company's domestic Restricted Subsidiaries (other than MFSI). See "Description
of Indebtedness -- Senior Credit Facility."
THE LEASE FINANCING FACILITY
The Leasing Partner entered into a general partnership with BA Leasing &
Capital Corporation ("BALCAP"), an affiliate of the Initial Purchaser and Bank
of America, effective February 26, 1998. The Leasing Partnership offers lease
financing to customers of the Company and administers existing leases
contributed to the Leasing Partnership. Indebtedness under the Lease Financing
Facility is secured by the underlying leases and assets of, and is recourse to,
the Leasing Partnership; such indebtedness is off-balance sheet and non-recourse
to the Company. See "Description of Indebtedness -- Lease Financing Facility."
32
<PAGE> 37
SOURCES AND USES OF FUNDS
The following table sets forth the estimated sources and uses of funds
assuming the Transactions were consummated as of December 31, 1997 (in
millions):
<TABLE>
<S> <C>
SOURCES
Senior Credit Facility:
Revolving Credit Facility(1)...... $ 13.0
Term Loan Facility................ 225.0
Notes offered hereby................ 100.0
------
Total Sources.................. $338.0
======
USES
McNeilus Acquisition, net........... $216.2
Refinance Oshkosh debt.............. 102.8
Estimated fees and expenses......... 15.4
Taxes related to lease
financing(2)...................... 3.6
------
Total Uses..................... $338.0
======
</TABLE>
- -------------------------
(1) The Revolving Credit Facility provides maximum borrowing availability
(including letters of credit) of $100.0 million, subject to certain
borrowing conditions. See "Capitalization" and "Description of Indebtedness
-- Senior Credit Facility."
(2) The Company incurred taxes payable as a result of the transfer of MFSI's
current lease portfolio to the Leasing Partnership.
33
<PAGE> 38
USE OF PROCEEDS
The gross proceeds of $100.0 million from the sale of the Notes, together
with borrowings under the Senior Credit Facility, were used by the Company to:
(i) fund the cash purchase price payable in connection with the Acquisition;
(ii) repay in full certain existing indebtedness of Oshkosh; and (iii) pay fees
and expenses in connection with the Transactions. The existing indebtedness of
Oshkosh repaid in connection with the Transactions was comprised of
approximately $102.8 million of borrowings under the Existing Bank Credit
Agreement (as defined) (which bore interest at a blended rate of approximately
7.78% at December 31, 1997 and which would have matured beginning on September
30, 1999). See "The Transactions."
CAPITALIZATION
The following table sets forth: (i) Oshkosh's actual unaudited consolidated
capitalization as of December 31, 1997; and (ii) the Company's unaudited
consolidated capitalization, on a pro forma basis to give effect to the
Transactions, as if they had occurred on December 31, 1997. This table should be
read in conjunction with the information contained herein under the captions
"The Transactions," "Use of Proceeds," "Management's Discussion and Analysis of
Consolidated Financial Condition and Results of Operations," the unaudited
historical consolidated and unaudited pro forma condensed consolidated financial
statements of the Company, including the related notes thereto, and the
unaudited consolidated historical financial statements of McNeilus, including
the related notes thereto, included elsewhere in this Offering Memorandum.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
----------------------------
PRO FORMA FOR
ACTUAL THE TRANSACTIONS
------ ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Cash and marketable securities........................ $ 198 $ 2,698
======== ========
Long-term debt, including current maturities:
Existing Bank Credit Agreement...................... $102,820 $ --
McNeilus notes payable.............................. -- 2,884
Senior Credit Facility:
Revolving Credit Facility(1)..................... -- 13,048
Term Loan Facility............................... -- 225,000
Notes............................................... -- 100,000
-------- --------
Total long-term debt(2)..................... 102,820 340,932
Shareholders' equity.................................. 123,747 122,992
-------- --------
Total capitalization........................ $226,567 $463,924
======== ========
</TABLE>
- -------------------------
(1) At the Closing, the following amounts were drawn under the Senior Credit
Facility: (i) $100.0 million on Term Loan A, which matures in six years;
(ii) $62.5 million on Term Loan B, which matures in seven years; (iii) $62.5
million on Term Loan C, which matures in eight years; and (iv) on a pro
forma basis at December 31, 1997, approximately $13.0 million on the $100.0
million Revolving Credit Facility, which matures in six years. The undrawn
amount under the Revolving Credit Facility is available for working capital
and general corporate purposes, including the issuance of letters of credit,
which were approximately $8 million. After giving effect to the
Transactions, the Company had approximately $79 million of availability
under the terms of the Revolving Credit Facility on a pro forma basis. See
"Description of Indebtedness -- Senior Credit Facility."
(2) Does not include off-balance sheet indebtedness under the Lease Financing
Facility. Such indebtedness is secured by the underlying leases and other
assets of, and is recourse to, the Leasing Partnership; such indebtedness is
non-recourse to the Company.
34
<PAGE> 39
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA FOR OSHKOSH
The following table presents selected historical consolidated financial and
other data of Oshkosh as of and for the fiscal years ended September 30, 1997,
1996, 1995, 1994 and 1993, which have been derived from the audited consolidated
financial statements of Oshkosh, and as of and for the three months ended
December 31, 1997 and 1996, which have been derived from the unaudited interim
consolidated financial statements of Oshkosh. The consolidated financial
statements of Oshkosh for the fiscal years 1997, 1996, 1995, 1994 and 1993 were
audited by Ernst & Young LLP, independent auditors. The interim consolidated
financial statements of Oshkosh as of and for the three months ended December
31, 1997 and 1996 have been derived from, and should be read in conjunction
with, the unaudited consolidated financial statements of Oshkosh and the related
notes thereto, included elsewhere herein. In the opinion of management, such
interim consolidated financial statements reflect all adjustments (consisting
only of normal and recurring adjustments) necessary to fairly present the
information presented for such periods. The results of operations for the three
months ended December 31, 1997 are not necessarily indicative of the results of
operations to be expected for the full fiscal year. The selected historical
consolidated financial and other data set forth below should be read in
conjunction with "Management's Discussion and Analysis of Consolidated Financial
Condition and Results of Operations" and the historical consolidated financial
statements of Oshkosh and the related notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEAR ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
---------------------------------------------------- -------------------
1997 1996(1) 1995 1994 1993 1997 1996
---- ------- ---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales..................................... $683,234 $413,455 $438,557 $581,275 $537,065 $151,801 $150,320
Cost of sales................................. 594,390 378,376 384,579 513,204 483,082 129,494 130,737
-------- -------- -------- -------- -------- -------- --------
Gross income.......................... 88,844 35,079 53,978 68,071 53,983 22,307 19,583
Operating expenses:
Selling, general and administrative....... 47,742 32,205 29,242 38,404 33,076 11,676 10,025
Engineering, research and development..... 7,847 6,304 5,443 6,597 8,973 2,143 1,993
Amortization of goodwill and other
intangibles............................. 4,470 171 -- -- -- 1,126 1,132
-------- -------- -------- -------- -------- -------- --------
Total operating expenses.............. 60,059 38,680 34,685 45,001 42,049 14,945 13,150
-------- -------- -------- -------- -------- -------- --------
Income (loss) from operations................. 28,785 (3,601) 19,293 23,070 11,934 7,362 6,433
Other income (expense), net................... (12,283) 1,619 (371) (968) (3,349) (2,267) (3,361)
Income (loss) from continuing operations
before income taxes......................... 16,502 (1,982) 18,922 22,102 8,585 5,095 3,072
Provision (credit) for income taxes........... 6,496 (1,741) 7,285 8,544 2,901 1,955 1,448
-------- -------- -------- -------- -------- -------- --------
Income (loss) from continuing operations...... 10,006 (241) 11,637 13,558 5,684 3,140 1,624
Cumulative effect of change in accounting for
post-retirement benefits, net............... -- -- -- -- (4,088) -- --
Loss from discontinued operations, net (2).... -- (2,859) (2,421) (504) (533) -- --
-------- -------- -------- -------- -------- -------- --------
Net income (loss)............................. $ 10,006 $ (3,100) $ 9,216 $ 13,054 $ 1,063 $ 3,140 $ 1,624
======== ======== ======== ======== ======== ======== ========
Earnings (loss) per share:
Income (loss) from continuing
operations.............................. $ 1.18 $ (.03) $ 1.32 $ 1.56 $ .65 $ .38 $ .19
Net income (loss)......................... 1.18 (.35) 1.04 1.50 .12 .38 .19
Earnings (loss) per share assuming dilution:
Income (loss) from continuing
operations.............................. $ 1.17 $ (.03) $ 1.31 $ 1.56 $ .65 $ .37 $ .19
Net income (loss)......................... 1.17 (.35) 1.04 1.50 .12 .37 .19
Dividends per share:
Class A Common Stock...................... $ 0.435 $ .0435 $ 0.435 $ 0.435 $ 0.435 $0.10875 $0.10875
Common Stock.............................. 0.500 0.500 0.500 0.500 0.500 0.12500 0.12500
OTHER FINANCIAL DATA:
EBITDA(3)..................................... $ 42,637 $ 9,316 $ 27,702 $ 32,348 $ 20,226 $ 10,591 $ 9,934
EBITDA margin %(3)............................ 6.2% 2.3% 6.3% 5.6% 3.8% 7.0% 6.6%
Depreciation and amortization................. 14,070 8,798 8,409 9,278 8,292 3,283 3,556
Capital expenditures.......................... 6,263 5,355 5,347 5,178 7,697 1,697 1,342
Net cash provided by (used in):
Continuing operating activities........... 65,782 (16,237) 6,166 67,423 35,544 16,779 25,142
Discontinued operating activities......... (1,658) 4,743 10,482 (2,851) 702 (491) (326)
Investing activities...................... (7,400) (166,231) (6,170) (6,136) (11,692) (6,097) (1,227)
Financing activities...................... (33,632) 148,136 3,402 (43,192) (24,183) (33,212) (18,871)
Ratio of earnings to fixed charges(4)......... 2.3x N/A 19.7x 16.8x 3.0x 3.0x 1.9x
BALANCE SHEET DATA:
Cash and cash equivalents..................... $ 23,219 $ 127 $ 29,716 $ 15,836 $ 592 $ 198 $ 4,845
Working capital(5)............................ 50,113 67,469 91,777 82,010 100,967 29,252 62,045
Total assets.................................. 420,394 435,161 200,916 198,678 235,386 381,458 402,244
Long-term debt, including current portion..... 135,000 157,882 -- 610 40,338 102,820 140,000
Shareholders' equity.......................... 120,900 121,602 133,413 121,558 112,004 123,747 122,237
</TABLE>
35
<PAGE> 40
- -------------------------
(1) On September 18, 1996, Oshkosh acquired for $156,926 in cash all of the
issued and outstanding stock of Pierce, a manufacturer and marketer of fire
trucks and other fire apparatus. The acquisition was accounted for using the
purchase method of accounting and accordingly, the income statement data
includes the operating results of Pierce since the date of acquisition.
(2) On June 2, 1995, Oshkosh sold certain assets associated with its motor home,
bus and van chassis business. The consideration included cash of $23,815 and
the assumption by the buyer of certain liabilities. The disposition of the
chassis business has been accounted for as a discontinued operation and
accordingly, the income statement data for 1995, 1994 and 1993 reflect the
chassis business as a discontinued operation.
(3) EBITDA represents income (loss) from operations plus depreciation and
amortization. EBITDA also includes the add-back of the non-cash write-off of
certain Oshkosh investments of $4.1 million in the fiscal year ended
September 30, 1996. Information concerning EBITDA has been included because
management believes that EBITDA is generally accepted as providing useful
information regarding a company's ability to service and/or incur debt.
EBITDA should not be considered in isolation or as a substitute for net
income, cash flows or other income or cash flow data prepared in accordance
with generally accepted accounting principles or as a measure of a company's
profitability or liquidity. The Company understands that, while EBITDA is
frequently used by securities analysts in the evaluation of companies,
EBITDA, as used herein, is not necessarily comparable to other similarly
titled captions of other companies due to potential inconsistencies in the
method of calculation. EBITDA is not intended as an alternative to cash flow
from operating activities as a measure of liquidity, an alternative to net
income as an indicator of operating performance or an alternative to any
other measure of performance in conformity with generally accepted
accounting principles. EBITDA margin percentage is calculated by dividing
EBITDA by net sales.
(4) For purposes of the computation, the ratio of earnings to fixed charges has
been calculated by dividing (i) income from continuing operations before
income taxes plus fixed charges by (ii) fixed charges. Fixed charges are
equal to interest expense plus the portion of the rent expense (one-third)
estimated to represent interest expense. Earnings were inadequate to cover
fixed charges in 1996 resulting in a deficiency of $1,982.
(5) Working capital represents total current assets less total current
liabilities. Working capital at September 30, 1997, 1996, 1995, 1994 and
1993 includes net current assets (liabilities) related to discontinued
operations of ($1,536), ($1,975), $3,273, $15,882 and $12,084, respectively.
Working capital at December 31, 1997 and 1996 includes net current
(liabilities) related to discontinued operations of $(1,376) and $(1,801),
respectively.
36
<PAGE> 41
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA FOR MCNEILUS
The following table presents selected historical consolidated financial and
other data of McNeilus as of and for the fiscal years ended February 28, 1997,
1995, 1994 and 1993, and the fiscal year ended February 29, 1996, which have
been derived from the audited consolidated financial statements of McNeilus, and
as of and for the nine months ended November 30, 1997 and 1996, which have been
derived from the unaudited interim consolidated financial statements of
McNeilus. The consolidated financial statements of McNeilus for the fiscal years
1997, 1996, 1995, 1994 and 1993 were audited by Larson, Allen, Weishair and Co.,
LLP, independent auditors. The interim consolidated financial statements of
McNeilus as of and for the nine months ended November 30, 1997 and 1996 have
been derived from, and should be read in conjunction with, the unaudited
consolidated financial statements of McNeilus and the related notes thereto,
included elsewhere herein. In the opinion of management, such interim
consolidated financial statements reflect all adjustments (consisting only of
normal and recurring adjustments) necessary to fairly present the information
presented for such periods. The results of operations for the nine months ended
November 30, 1997 are not necessarily indicative of the results of operations to
be expected for the full fiscal year. The historical consolidated selected
financial and other data set forth below should be read in conjunction with
"Management's Discussion and Analysis of Consolidated Financial Condition and
Results of Operations" and the historical consolidated financial statements of
McNeilus and the related notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
NINE MONTHS
FISCAL YEAR ENDED ENDED
------------------------------------------------------------------------ NOVEMBER 30,
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28, FEBRUARY 28, -------------------
1997 1996 1995 1994 1993 1997 1996
------------ ------------ ------------ ------------ ------------ -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales....................... $312,999 $331,359 $305,730 $211,010 $131,632 $246,774 $233,221
Cost of sales................... 257,163 281,790 259,437 175,021 109,011 203,690 191,930
-------- -------- -------- -------- -------- -------- --------
Gross profit................ 55,836 49,569 46,293 35,989 22,621 43,084 41,291
Operating expenses:
Selling....................... 12,286 10,823 9,339 8,743 6,668 9,868 9,804
General and administrative.... 16,806 16,634 19,980 15,065 10,843 15,976 15,049
-------- -------- -------- -------- -------- -------- --------
Total operating expenses.... 29,092 27,457 29,319 23,808 17,511 25,844 24,853
-------- -------- -------- -------- -------- -------- --------
Income from operations........ 26,744 22,112 16,974 12,181 5,110 17,240 16,438
Other income, net............... 2,124 2,949 1,999 2,776 3,128 3,037 1,760
Income from continuing
operations before income
taxes......................... 28,868 25,061 18,973 14,957 8,238 20,277 18,198
Provision for income taxes...... 10,920 9,503 8,923 6,152 2,934 7,423 7,013
-------- -------- -------- -------- -------- -------- --------
Income from continuing
operations.................... 17,948 15,558 10,050 8,805 5,304 12,854 11,185
Income from discontinued
operations, net(1)............ 117 271 849 604 473 602 421
-------- -------- -------- -------- -------- -------- --------
Net income...................... $ 18,065 $ 15,829 $ 10,899 $ 9,409 $ 5,777 $ 13,456 $ 11,606
======== ======== ======== ======== ======== ======== ========
OTHER FINANCIAL DATA:
EBITDA(2)....................... $ 31,587 $ 27,597 $ 21,445 $ 16,491 $ 8,857 $ 21,200 $ 20,541
EBITDA margin %(2).............. 10.1% 8.3% 7.0% 7.8% 6.7% 8.6% 8.8%
Depreciation and amortization... 4,077 4,286 3,399 2,740 2,165 2,812 3,005
Capital expenditures............ 2,922 5,427 9,977 8,795 2,839 2,621 2,495
Net cash provided by (used in):
Continuing operating
activities.................. 25,981 17,323 9,802 11,713 (2,231) 10,846 15,191
Discontinued operating
activities.................. 117 271 849 502 473 602 421
Investing activities.......... (17,799) (38,353) (32,704) (32,078) (1,802) 2,697 (20,365)
Financing activities.......... 556 26,001 22,241 28,512 (2,084) (18,127) 486
BALANCE SHEET DATA:
Cash and cash equivalents....... $ 24,743 $ 16,005 $ 11,034 $ 11,695 $ 3,548 $ 20,159 $ 11,317
Working capital(3).............. 52,052 38,786 29,547 32,542 14,915 57,830 43,980
Total assets(1)................. 304,220 293,395 231,460 176,378 116,451 274,720 291,744
Long-term debt-leasing,
including current portion..... 121,570 107,664 77,478 58,774 33,534 113,639 120,315
Other long-term debt, including
current portion............... 7,741 13,469 10,458 13,878 282 2,884 11,480
Stockholders' equity............ 77,102 61,659 54,582 45,189 39,857 90,558 73,261
</TABLE>
37
<PAGE> 42
- -------------------------
(1) In December 1997, McNeilus entered into agreements to sell its ready-mix,
credit life insurance and travel operations. The dispositions of these
businesses have been accounted for as discontinued operations and
accordingly, the financial statement data as of and for fiscal years ended
February 28, 1997, 1995, 1994, 1993 and February 29, 1996, and for the nine
months periods ended November 30, 1997 and 1996, has been restated to
reflect these businesses as discontinued operations.
(2) EBITDA represents income from operations plus depreciation and amortization.
Information concerning EBITDA has been included because management believes
that EBITDA is generally accepted as providing useful information regarding
a company's ability to service and/or incur debt. EBITDA should not be
considered in isolation or as a substitute for net income, cash flows or
other income or cash flow data prepared in accordance with generally
accepted accounting principles or as a measure of a company's profitability
or liquidity. The Company understands that, while EBITDA, is frequently used
by securities analysts in the evaluation of companies, EBITDA, as used
herein, is not necessarily comparable to other similarly titled captions of
other companies due to potential inconsistencies in the method of
calculation. EBITDA is not intended as an alternative to cash flow from
operating activities as a measure of liquidity, an alternative to net income
as an indicator of operating performance or an alternative to any other
measure of performance in conformity with generally accepted accounting
principles. EBITDA margin percentage is calculated by dividing EBITDA by net
sales.
(3) Working capital represents total current assets less total current
liabilities. Working capital at February 28, 1997, 1995, 1994 and 1993, and
February 29, 1996, and November 30, 1997 and 1996, includes no net assets
(liabilities) related to discontinued operations.
38
<PAGE> 43
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following contains Forward-Looking Statements. These statements are
subject to risks, uncertainties and other factors that could cause actual
results to differ materially from those described in or suggested by any such
statement. See "Disclosure Regarding Forward-Looking Statements."
HISTORICAL RESULTS OF OPERATIONS -- OSHKOSH
The following discussion provides additional information regarding the
financial condition and results of operations of Oshkosh for the three-month
periods ended December 31, 1997 and 1996 and for each of the fiscal years ended
September 30, 1997, 1996 and 1995. The discussion should be read in conjunction
with "Selected Historical Consolidated Financial Data for Oshkosh" and Oshkosh's
historical consolidated financial statements and the notes thereto appearing
elsewhere in this Offering Memorandum.
On December 8, 1997, Oshkosh entered into the Stock Purchase Agreement
pursuant to which, on February 26, 1998, it acquired all of the outstanding
capital stock of McNeilus and entered into related non-compete and ancillary
agreements for an aggregate acquisition price of $250.0 million. At November 30,
1997, McNeilus had unrestricted cash of $17.7 million ($20.2 million less an
estimated $2.5 million required capital and surplus at McNeilus' captive
insurance subsidiary). The Stock Purchase Agreement required, among other
things, that the selling stockholders of McNeilus prepay certain notes and
purchase selected assets of McNeilus, which provided net proceeds to Oshkosh of
approximately $16.1 million. As a result, management estimates that the
effective cost to the Company in connection with the Acquisition was
approximately $216.2 million. Concurrently with the consummation of the
Acquisition, the Company consummated the Note Offering, established the Senior
Credit Facility, applied the net proceeds from the Note Offering and the Senior
Credit Facility to consummate the Acquisition, refinanced existing Oshkosh
indebtedness, paid fees and expenses and established the Lease Financing
Facility. The Acquisition has been recorded using the purchase method of
accounting and McNeilus is being operated as a subsidiary of Oshkosh.
Accordingly, the discussion and analysis of historical periods does not reflect
the significant impact the Acquisition has had and will have on Oshkosh. See
"The Transactions," "Business -- The Acquisition" and "Unaudited Pro Forma
Condensed Consolidated Financial Statements."
Three Months Ended December 31, 1997 Compared to Three Months Ended December 31,
1996
Oshkosh reported net income of $3.1 million, or $0.38 per share, on sales
of $151.8 million for the first quarter of fiscal 1998, compared to net income
of $1.6 million, or $0.19 per share, on sales of $150.3 million for the first
quarter of fiscal 1997.
Sales of commercial products decreased slightly in the first quarter of
fiscal 1998 compared to the first quarter of fiscal 1997 while sales of defense
products increased slightly. Commercial sales in the first quarter of fiscal
1998 decreased $2.7 million or 3.3% from the first quarter of fiscal 1997 to
$80.5 million. An increase in sales of fire trucks and other fire apparatus was
more than offset by a decrease in sales of refuse vehicles and the elimination
of sales of commercial van trailers as Oshkosh substantially exited this line of
business. Sales of defense products totaled $71.3 million in the first quarter
of fiscal 1998, an increase of $4.2 million or 6.3% as compared to the first
quarter of fiscal 1997. The increase in defense sales principally results from
sales of LVS vehicles to the U.S. government. Management does not expect the
increase in defense product sales to continue through the remainder of fiscal
1998.
Gross income in the first quarter of fiscal 1998 totaled $22.3 million or
14.7% of sales compared to $19.6 million or 13.0% in the first quarter of fiscal
1997. Fiscal 1997 first quarter margins were adversely affected by increased
warranty and other costs related to refuse vehicle sales.
Operating expenses totaled $14.9 million or 9.8% of sales in the first
quarter of fiscal 1998 compared to $13.2 million or 8.7% of sales in the first
quarter of fiscal 1997. The increase in operating expenses in the first quarter
of fiscal 1998 relates principally to increased selling expenses of Pierce
associated with its growth in fire apparatus sales.
39
<PAGE> 44
Interest expense decreased to $2.5 million in the first quarter of fiscal
1998 compared to $3.6 million in the first quarter of fiscal 1997 due to
accelerated payments against the term loan used to finance the acquisition of
Pierce.
The effective income tax rate for combined federal and state income taxes
for the first quarter of fiscal 1998 was 38.4% compared to 47.1% for the first
quarter of fiscal 1997. Fiscal 1998 benefitted from the reversal of $0.3 million
of income tax provisions recognized in earlier periods.
Additional Acquisition
In addition to the Acquisition, on December 19, 1997, Oshkosh through its
wholly-owned subsidiary, Pierce, acquired certain inventory, machinery and
equipment, and intangible assets of Nova Quintech, a manufacturer of aerial
ladders, with available cash of $3.5 million.
Fiscal Year Ended September 30, 1997 Compared to Fiscal Year Ended September 30,
1996
Oshkosh reported net income of $10.0 million, or $1.18 per share, on sales
of $683.2 million for the year ended September 30, 1997, compared to a net loss
of $3.1 million, or $0.35 per share, on sales of $413.5 million for the year
ended September 30, 1996. The fiscal 1997 results include a full year of sales
and earnings of Pierce, a leading manufacturer and marketer of fire trucks and
other fire apparatus in the U.S., which was acquired on September 18, 1996 (see
"-- Acquisitions"). The fiscal 1996 results were adversely affected by after-tax
charges of $11.3 million, including $3.2 million related to a defense
subcontract to Steeltech Manufacturing, Inc. ("Steeltech"), $3.5 million
associated with Oshkosh's Mexican bus affiliates, and warranty and other related
costs of $4.6 million. In fiscal 1996, Oshkosh also recognized after-tax
benefits of $2.0 million on the reversal of income tax provisions and related
accrued interest.
Sales of both commercial and defense products increased in fiscal 1997
compared to fiscal 1996. Commercial sales in fiscal 1997 were $394.6 million, an
increase of $232.6 million, or 143.6% from 1996, principally due to inclusion of
a full year of Pierce sales in fiscal 1997. Commercial export sales totaled
$20.7 million and $20.4 million, respectively, in fiscal 1997 and fiscal 1996.
Sales of defense products totaled $288.6 million in fiscal 1997, an increase of
$37.2 million, or 14.8% compared to fiscal 1996. The increase in defense sales
is primarily due to an increase in sales of ISO-Compatible Palletized Flatracks
("IPF"), which are being produced by Steeltech, from $8.7 million in fiscal 1996
to $41.4 million in fiscal 1997. Defense export sales also increased to $16.6
million in fiscal 1997 compared to $2.1 million in fiscal 1996.
Gross income in fiscal 1997 totaled $88.8 million, or 13.0% of sales,
compared to $35.1 million, or 8.5% of sales, in fiscal 1996. The increase in
gross income in fiscal 1997 was principally due to increased sales volume as a
result of the acquisition of Pierce. In addition, fiscal 1996 gross income was
reduced by pre-tax charges of $5.1 million related to production delays and cost
overruns associated with the IPF subcontract to Steeltech and increased warranty
and other related costs of $5.5 million (pre-tax).
Operating expenses totaled $60.1 million, or 8.8% of sales, in fiscal 1997
compared to $38.7 million, or 9.4% of sales, in fiscal 1996. The increase in
operating expenses in fiscal 1997 related principally to the operating expenses
of Pierce and amortization of goodwill and other intangible assets associated
with the acquisition of Pierce. Oshkosh recognized pre-tax charges of $3.2
million in fiscal 1996 to write off its investment in Steeltech and to write off
its remaining investments and advances associated with its Mexican bus
affiliates due to prolonged weakness in the Mexican economy and continuing high
losses and high leverage reported by the Mexican affiliates.
Interest expense increased to $12.7 million in fiscal 1997 compared to $0.9
million in fiscal 1996 as a result of the financing for the Pierce acquisition
(see "-- Liquidity and Capital Resources").
Miscellaneous expense was $0.3 million in fiscal 1997 compared to
miscellaneous income of $1.5 million in fiscal 1996. The miscellaneous income in
fiscal 1996 arose primarily from the reversal of accrued interest related to
income taxes.
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The provision for income taxes in fiscal 1997 was $6.5 million, or 39.4% of
pre-tax income, compared to a credit for income taxes of $1.7 million in fiscal
1996. Fiscal 1997 and fiscal 1996 benefitted from the reversal of $0.9 million
and $1.0 million, respectively, of income tax provisions recognized in earlier
periods. In addition, the effective income tax rate in fiscal 1997 was adversely
affected by non-deductible goodwill of $2.6 million arising from the Pierce
acquisition.
The $2.9 million after-tax loss from discontinued operations ($4.7 million
pre-tax) in fiscal 1996 resulted from the write-off of receivables of $2.6
million (pre-tax) related to the company's Mexican bus affiliates and from a
$2.1 million pre-tax charge for additional warranty and other related costs with
respect to Oshkosh's former U.S. chassis business which was sold in June 1995.
Fiscal Year Ended September 30, 1996 Compared to Fiscal Year Ended September 30,
1995
Oshkosh reported a net loss of $3.1 million, or $0.35 per share, on sales
of $413.5 million for the year ended September 30, 1996, compared to net income
of $9.2 million, or $1.04 per share, on sales of $438.6 million for the year
ended September 30, 1995. The fiscal 1996 results were adversely affected by
after-tax charges of $11.3 million, including $3.2 million related to Steeltech,
$3.5 million associated with the company's Mexican bus affiliates, and warranty
and other related costs of $4.6 million. Oshkosh also recognized after-tax
benefits of $2.0 million on the reversal of income tax provisions and related
accrued interest in fiscal 1996. During the third quarter of fiscal 1995,
Oshkosh sold its chassis manufacturing business in the U.S. and its interest in
a joint venture in Mexico producing chassis for the Mexican market to
Freightliner Corporation ("Freightliner"). The activities of these businesses
are reported as discontinued operations and resulted in a charge to income in
fiscal 1995. In fiscal 1996, further after-tax charges of $1.3 million were
reported with respect to warranty and other related costs of the discontinued
operations. The results of Pierce from the date of acquisition to September 30,
1996, which were not material, have been included in the consolidated results of
Oshkosh.
Sales of both commercial and defense products declined in fiscal 1996
compared to fiscal 1995. Commercial sales in fiscal 1996 decreased $14.8
million, or 8.4%, from fiscal 1995 to $162.0 million, primarily due to a decline
in sales of commercial van trailers of $31.7 million as Oshkosh substantially
exited this line of business. Sales of all other commercial product lines
increased in fiscal 1996. Commercial export sales totaled $20.4 million and
$17.5 million, respectively, in fiscal 1996 and fiscal 1995. Sales of defense
products totaled $251.5 million in fiscal 1996, a decrease of $10.3 million, or
3.9%, compared to fiscal 1995. The decrease in defense sales was a result of
delays in production of IPFs. Defense export sales were $2.1 million in fiscal
1996 compared to $1.6 million in fiscal 1995.
Gross income in fiscal 1996 totaled $35.1 million, or 8.5% of sales,
compared to $54.0 million, or 12.3% of sales, in fiscal 1995. Fiscal 1996
margins were reduced by pre-tax charges of $5.1 million ($3.1 million in the
third quarter and $2.0 million in the fourth quarter) related to production
delays and cost overruns associated with a subcontract to Steeltech (see below),
increased warranty and other related costs of $5.5 million (pre-tax) of which
$2.1 million was recorded in the fourth quarter, and lower volume.
Oshkosh subcontracted production under an $85 million IPF contract for the
U.S. Army to Steeltech, a minority-owned firm, pursuant to Department of Defense
regulations under the IPF contract. Due to financial difficulties encountered by
Steeltech, Oshkosh advanced working capital requirements to Steeltech in fiscal
1995 and 1996. As a result of delays in the start-up of full-scale production
under the IPF contract, Oshkosh wrote off advances of $3.1 million and its
investment in Steeltech of $.2 million in the third quarter of fiscal 1996 based
on projections of Steeltech's cash flows through completion of the IPF
subcontract.
At June 30, 1996, Oshkosh believed that it was not necessary to write-off
its 50% interest in a joint venture that leased equipment to Steeltech nor
provide for its guarantee of the joint venture's debt, because Steeltech was
current with respect to its lease payments, and Oshkosh believed the equipment
could be sold at a value which would permit Oshkosh to recover its investment in
the joint venture. However, by September 30, 1996, Oshkosh concluded that
Steeltech would not likely achieve and sustain adequate cash flow to satisfy the
lease payments. Additionally, after further investigation, Oshkosh determined
that the equipment could not likely be sold at a value adequate to recover
Oshkosh's investment and satisfy the joint venture's
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debt. Accordingly, Oshkosh wrote-off its investment in the joint venture and
accrued its guarantee at September 30, 1996 in an aggregate amount of $2.0
million.
Operating expenses totaled $38.7 million, or 9.4% of sales, in fiscal 1996
compared to $34.7 million, or 7.9% of sales, in fiscal 1995. The company
recognized pre-tax charges of $3.2 million in fiscal 1996 to write off its
investment in Steeltech of $.2 million (see above) and to write off its
remaining investments and advances associated with its Mexican bus affiliates of
$3.0 million.
Miscellaneous income increased to $1.5 million in fiscal 1996 compared to
miscellaneous expense of $0.5 million in fiscal 1995 as a result of the reversal
of accrued interest related to income taxes in fiscal 1996.
The credit for income taxes totaled $1.7 million in fiscal 1996, benefiting
from the reversal of $1.0 million in income tax provisions recognized in earlier
periods, compared to a provision for income taxes of $7.3 million in fiscal
1995.
The $2.9 million after-tax loss from discontinued operations ($4.7 million
pre-tax) in fiscal 1996 resulted from the write-off of receivables of $2.6
million (pre-tax) related to Oshkosh's Mexican bus affiliates and from a $2.1
million pre-tax charge for additional warranty and other related costs with
respect to Oshkosh's former U.S. chassis business which was sold in June 1995.
The $2.4 million after-tax loss from discontinued operations in fiscal 1995
reflects losses on the sale of Oshkosh's former U.S. chassis business and from
the sale of an interest in a former Mexican bus affiliate.
Acquisitions
On September 18, 1996, Oshkosh acquired for cash all of the issued and
outstanding stock of Pierce, a leading manufacturer and marketer of fire trucks
and other fire apparatus in the U.S. The acquisition price of $156.9 million,
including acquisition costs and net of cash acquired, was financed from
borrowings under a bank credit facility. On November 9, 1995, Oshkosh through
its wholly-owned subsidiary, Summit Performance Systems, Inc., acquired the
inventory, land, buildings, machinery and equipment, and technology of Friesz
Manufacturing Company, a manufacturer of concrete mixer systems and related
aftermarket replacement parts, from available cash for $3.9 million.
HISTORICAL RESULTS OF OPERATIONS -- MCNEILUS
The following discussion provides additional information regarding the
results of operations of McNeilus for the nine-month periods ended November 30,
1997 and 1996 and for each of the fiscal years ended February 28, 1997, February
29, 1996 and February 28, 1995. The discussion should be read in conjunction
with "Selected Historical Consolidated Financial Data for McNeilus" and
McNeilus' historical consolidated financial statements and the notes thereto
appearing elsewhere in this Offering Memorandum.
McNeilus sells concrete mixers mounted on truck chassis ("mixers") and
concrete mixers only ("mixer only"). McNeilus also sells refuse packer units
mounted on truck chassis ("packers") and packer units only ("packer only").
McNeilus' product lines also include ready-mix concrete mixer plants, as well as
replacement parts for all of McNeilus' products. McNeilus sells its products to
third parties and its lease financing subsidiary, MFSI.
On December 8, 1997, the shareholders of McNeilus executed a definitive
agreement pursuant to which, on February 26, 1998, they sold all of the
outstanding capital stock of McNeilus to Oshkosh. The Stock Purchase Agreement
provided for the sale of certain of McNeilus' operating subsidiaries prior to
the consummation of the transaction with Oshkosh. As a result, McNeilus has
accounted for the subsidiaries being sold as discontinued operations and,
accordingly, prior period financial statements of McNeilus have been
reclassified to reflect the discontinuation of these operations. Other than this
reclassification, the discussion and analysis of historical periods does not
reflect the significant impact the Acquisition is expected to have on McNeilus.
See "Unaudited Pro Forma Condensed Consolidated Financial Statements."
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Nine Months Ended November 30, 1997 Compared to Nine Months Ended November 30,
1996
McNeilus reported net income of $13.5 million for the nine months ended
November 30, 1997 compared to net income of $11.6 million for the nine month
period ended November 30, 1996.
Net sales for the nine months ended November 30, 1997 increased by $13.6
million or 5.8% over the prior year period to $246.8 million. Total unit volume
was comparable between periods, and the impact on net sales from significant
increases in packer only volume and increases in mixer and packer unit volumes
was offset by decreases in mixer only sales.
Gross profit for the nine months ended November 30, 1997 totaled $43.1
million or 17.5% of net sales compared to $41.3 million or 17.7% of net sales
for the nine months ended November 30, 1996. The gross margin decrease was
principally as a result of the sale of a relatively lower proportion of higher
margin mixer only sales.
Operating expenses for the nine months ended November 30, 1997 increased to
$25.8 million or 10.5% of net sales compared to $24.9 million or 10.7% of net
sales for the nine months ended November 30, 1996, generally reflecting the
higher sales volume.
Net other income (which includes net leasing income) increased to $3.0
million for the nine months ended November 30, 1997 from $1.8 million for the
nine months ended November 30, 1996, primarily because interest expense
decreased due to lower average borrowings outstanding.
Fiscal Year Ended February 28, 1997 Compared to Fiscal Year Ended February 29,
1996
McNeilus reported net income of $18.1 million in fiscal 1997 compared to
net income of $15.8 million in fiscal 1996.
Net sales in fiscal 1997 decreased $18.4 million or 5.5% from fiscal 1996
to $313.0 million. The decrease resulted primarily from a substantial decrease
in packer and packer only sales as certain of McNeilus' largest commercial
customers curtailed capital spending. Mixer and mixer only sales in the
aggregate decreased 2.6% due to a shift in unit volume from mixer sales, which
include the price of the truck chassis, to mixer only sales, which are sold
without the truck chassis.
Gross profit for fiscal 1997 totaled $55.8 million or 17.8% of net sales
compared to $49.6 million or 15.0% of net sales for fiscal 1996. Gross profit
increased due to the relatively higher proportion of mixer and mixer only sales,
which have higher overall margins compared to packer and packer only sales.
Improvements in manufacturing efficiencies and lower warranty expense also
helped improve gross profit.
Operating expenses for fiscal 1997 increased to $29.1 million or 9.3% of
net sales compared to $27.5 million or 8.3% of net sales for fiscal 1996,
primarily due to increased advertising and bonuses.
Net other income for fiscal 1997 decreased to $2.1 million from $2.9
million in fiscal 1996 because interest expense increased due to higher average
borrowings.
Fiscal Year Ended February 29, 1996 Compared to Fiscal Year Ended February 28,
1995
McNeilus reported net income of $15.8 million in fiscal 1996 compared to
net income of $10.9 million in fiscal 1995.
Net sales in fiscal 1996 increased $25.7 million or 8.4% from fiscal 1995
to $331.4 million. Mixer and mixer only sales were down slightly, while packer
and packer only sales were up substantially in fiscal 1996 compared to fiscal
1995. The increase in packer and packer only sales was primarily due to the
continued expansion of the McNeilus packer product line which permitted
increased sales to large commercial customers.
Gross profit for fiscal 1996 totaled $49.6 million or 15.0% of net sales
compared to $46.3 million or 15.1% of net sales for fiscal 1995. Gross profit
increased primarily as a result of higher sales volume, as gross margin
decreased slightly because of the shift in mix toward lower margin packer
product sales.
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Operating expenses for fiscal 1996 decreased to $27.5 million or 8.3% of
net sales compared to $29.3 million or 9.5% of net sales for fiscal 1995,
principally due to a decrease in charitable contribution expense.
Net other income for fiscal 1996 increased $0.9 million from fiscal 1995 to
$2.9 million primarily as a result of increased interest income.
LIQUIDITY AND CAPITAL RESOURCES
Pro Forma
Assuming consummation of the Transactions as of December 31, 1997, the
Company would have had pro forma Indebtedness of approximately $366.3 million
(including the Notes, but excluding additional borrowings available under the
revolving credit portion of the Senior Credit Facility). At the Closing, the
following amounts were drawn under the Senior Credit Facility: (i) $100.0
million on Term Loan A, which matures in six years; (ii) $62.5 million on Term
Loan B, which matures in seven years; (iii) $62.5 million on Term Loan C, which
matures in eight years; and (iv) on a pro forma basis at December 31, 1997,
approximately $13.0 million on the $100.0 million Revolving Credit Facility,
which matures in six years. The undrawn amount under the Revolving Credit
Facility is available for working capital and general corporate purposes,
including the issuance of letters of credit, which were approximately $8
million. After giving effect to the Transactions, the Company had approximately
$79 million of availability under the terms of the Revolving Credit Facility on
a pro forma basis. The Company's primary cash requirements include working
capital, interest and principal payments on indebtedness, capital expenditures,
dividends and potentially future acquisitions. The primary sources of cash are
cash flow from operations and borrowings under the Senior Credit Facility. Based
upon current and anticipated future operations, the Company believes that
capital resources will be adequate to meet future working capital, debt service
and other capital requirements. There can be no assurance, however, that the
Company's business will generate cash flow that, together with the other sources
of capital, will enable the Company to meet those requirements.
The Company's cash flow from operations has, and will likely continue to,
fluctuate significantly from period to period as the Company uses working
capital when producing orders and generates working capital when shipping those
orders. For example, the Company's use ($16.2 million) of cash in operations in
1996 and generation of $65.8 million in cash in 1997 resulted in significant
part from a substantial increase in inventories in 1996 and a corresponding
decrease in inventories in 1997, as certain large orders produced during 1996
were shipped during the first quarter of fiscal 1997. Similarly, if received, an
award of the MTTR or any other major DoD contract would likely entail increases
in the Company's working capital needs as it uses working capital to produce
vehicles or other equipment for shipment.
The Leasing Partner entered into the Leasing Partnership effective February
26, 1998. The Leasing Partnership provides capital lease financing to customers
of the Company. MFSI had historically provided lease financing to customers of
McNeilus and, at the Closing, assigned its lease portfolio to the Leasing
Partner, which contributed the portfolio to the Leasing Partnership. Under the
terms of the Lease Partnership agreement, the Leasing Partner may be required to
make future equity contributions to the Lease Partnership based upon its pro
rata ownership interest and growth of the Leasing Partnership.
The Senior Credit Facility and the Indenture, and other instruments of the
Company may, pose various restrictions and covenants on the Company that could
potentially limit the Company's ability to respond to market conditions, to
provide for unanticipated capital investments, to raise additional debt or
equity capital or to take advantage of business opportunities. See "Description
of Indebtedness -- Senior Credit Facility" and "Description of the New Notes --
Certain Covenants."
The Senior Credit Facility accrues interest at variable rates. The Company
presently has no plans to enter into interest rate swap arrangements to limit
its exposure to future increases in interest rates.
The Company's capital expenditures for fiscal years 1998 through 2000 are
expected to be approximately $12.0 to $15.0 million annually.
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The Company expects to continue to pay regular quarterly dividends of
$.10875 per share of Class A Common Stock and $.125 per share for Common Stock,
although the Company's ability to do so may be limited by the covenants
concerning restricted payments in the Indenture and the Senior Credit Facility.
Historical
On September 18, 1996, Oshkosh entered into a bank credit agreement (the
"Existing Bank Credit Agreement") to finance the acquisition of Pierce and to
refinance a previous revolving credit facility. The Existing Bank Credit
Agreement initially consisted of a $150 million term loan which required annual
principal payments of $15 million through fiscal 2002 and a final payment of $60
million on September 30, 2003, and a $50 million revolving credit facility for
working capital purposes which would have expired on September 30, 1999. Through
December 31, 1997, Oshkosh made the $15 million principal payments due in
September 1997 and 1998, and paid another $25 million which was prorated against
the principal payments required in fiscal 1999 through fiscal 2003. At December
31, 1997, Oshkosh had borrowings under the revolving credit facility of $7.8
million and $8.2 million of standby letters of credit which reduced available
capacity under the revolving credit facility to $34.0 million. The total of all
term loan and revolving credit facility borrowings, excluding letters of credit,
would have been required to be reduced to or below $145.0 million and $130.0
million for 60 consecutive days in fiscal 1998 and 1999, respectively.
On May 2, 1997, Oshkosh and Freightliner formally terminated a strategic
alliance formed on June 2, 1995. Oshkosh repurchased from Freightliner 350,000
shares of its Common Stock and 1,250,000 warrants for the purchase of additional
shares of Common Stock for a total of $6.8 million. Oshkosh and Freightliner
will continue to supply each other with parts and components.
STOCK BUYBACK
In July 1995, Oshkosh's Board of Directors authorized the repurchase of up
to 1,000,000 shares of Common Stock. As of December 31, 1997, Oshkosh had
purchased 461,535 shares under this program at a cost of $6.6 million. The
Indenture and the Senior Credit Facility will contain covenants which will limit
such repurchases after the consummation of the Transactions.
YEAR 2000
Certain of the Company's older computer programs were written using two
digits rather than four to define the applicable year. As a result, those
computer programs may misinterpret a date using "00" as the year 1900 rather
than the year 2000. This could cause a system failure, miscalculations or other
disruptions in the business.
Oshkosh maintains two primary computer systems at its Oshkosh operations
and one at its Pierce operations. Oshkosh is planning to install upgrades to its
present computer systems at Oshkosh by December 31, 1998. At Pierce, Oshkosh has
commenced a project, with outside consultants, to install new hardware and
software by February 1, 1999, to replace an obsolete hardware and software
system. The total cost of these projects during fiscal 1998 and 1999 is
estimated at approximately $6.6 million which includes $6.3 million for the
purchase of new hardware and software that will be capitalized and $0.3 million
that will be expensed as incurred. Oshkosh believes that following the
completion of these projects, the year 2000 issue will not pose significant
disruptions to its business; however, if such projects are not completed on a
timely basis, the year 2000 could have a material impact on the operations of
Oshkosh.
McNeilus has entered into an agreement with an outside consultant to
upgrade its present computer systems by August 1998. The total cost of this
upgrade, which is intended to, among other things, prevent any disruptions
related to year 2000 issues, is estimated at approximately $400,000 and will be
expensed. The Company believes that following the conclusion of this upgrade,
the year 2000 issue will not pose significant disruptions to McNeilus' business;
however, if such upgrades are not completed on a timely basis, the year 2000
could have a material impact on the operations of McNeilus.
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NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive
Income." SFAS No. 130 establishes the standards for reporting and displaying
comprehensive income and its components (revenues, expenses, gains, and losses)
as part of a full set of financial statements. This statement requires that all
elements of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. The statement
is effective for fiscal years beginning after December 15, 1997. Since this
statement applies only to the presentation of comprehensive income, it will not
have any impact on the Company's results of operations, financial position or
cash flows.
In June 1997, the Financial Accounting Standards Board also issued SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information." SFAS
No. 131 establishes the standards for the manner in which public enterprises are
required to report financial and descriptive information about their operating
segments. The statement defines operating segments as components of an
enterprise for which separate financial information is available and evaluated
regularly as a means for assessing segment performance and allocating resources
to segments. A measure of profit or loss, total assets and other related
information are required to be disclosed for each operating segment. In
addition, this statement requires the annual disclosure of information
concerning revenues derived from the enterprise's products or services,
countries in which it earns revenue or holds assets, and major customers. The
statement is also effective for fiscal years beginning after December 15, 1997.
The adoption of SFAS No. 131 will not affect the Company's results of operations
or financial position, but will affect the disclosure of segment information.
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BUSINESS
THE COMPANY
The Company is a leading designer, manufacturer and marketer of a broad
range of fire apparatus and specialty commercial and military trucks under the
"Oshkosh," "Pierce," "McNeilus" and "MTM" trademarks. The Company's custom and
commercial fire apparatus include pumpers, aerial and ladder trucks, tankers,
heavy-duty rescue vehicles, wildland rough terrain response vehicles and ARFF
vehicles. The Company's commercial truck lines include refuse truck bodies,
rear- and forward-discharge concrete mixers and snow removal vehicles. As the
leading manufacturer of severe-duty heavy tactical trucks for the DoD, the
Company manufactures vehicles that perform a variety of demanding tasks such as
hauling tanks, missile systems, ammunition, fuel and cargo for combat units. For
the twelve months ended December 31, 1997, on a pro forma basis, the Company
generated net sales of $1,011.3 million and EBITDA of $79.4 million.
The Company's objective is to continue to enhance market positions by
providing innovative design, sophisticated engineering, efficient, low-cost
manufacturing, extensive distribution and superior customer service to its
commercial, municipal and military customers within its core markets.
COMPETITIVE STRENGTHS
The following competitive strengths support the Company's business
strategy:
Strong Market Positions. The Company has developed strong market positions
in each of its core businesses, which management attributes to the Company's
reputation for innovation, vehicle performance, reliability and customer
service. The Company has the leading share of the severe-duty heavy tactical
truck segment of the domestic defense truck market, and also believes it has a
leading share in: (i) custom and commercial fire apparatus, including pumpers,
aerial and ladder trucks, tankers, heavy duty rescue, wildland rough terrain
response vehicles and ARFF vehicles for the domestic fire apparatus market; (ii)
the domestic refuse truck body market; (iii) the domestic rear- and
forward-discharge concrete mixer markets; and (iv) the domestic airport snow
removal vehicle market. The Company intends to continue to strengthen its market
share by capitalizing on its strong reputation, introducing innovative products
and services and leveraging its extensive distribution capabilities.
Extensive Distribution Capabilities. With the addition of the commercial
and municipal distribution capabilities of Pierce and McNeilus, the Company has
established an extensive domestic and international distribution system for
specialty trucks and truck bodies covering over 70 countries. In addition to its
network of dealers and distributors, the Company employs over 100 in-house sales
and service representatives. Management believes the Company's broad
distribution system has enabled the Company to: (i) maximize sales of new
products and technologies: (ii) become a benchmark for government customers in
establishing their bid specifications; (iii) provide customer service on a
national and international scale; and (iv) reduce distribution expenses through
significant economies of scale.
Flexible and Efficient Manufacturing. The Company believes it has
competitive advantages over larger truck manufacturers in its specialty truck
markets due to its manufacturing flexibility and custom fabrication
capabilities. For example, the Company has successfully configured its defense
truck and fire apparatus manufacturing plants for the simultaneous manufacture
of many different types and models of vehicles on the same assembly line. In
addition, the Company believes it has a competitive advantage over smaller
competitors due to its: (i) manufacturing in relatively higher volumes; (ii)
purchasing power across its product lines; and (iii) investing in fixturing and
robotics to improve efficiency and reduce costs.
Quality Products and Customer Service. Oshkosh, Pierce and McNeilus have
each developed strong brand recognition based on their commitments to meet the
stringent product quality and reliability requirements of their customers and
the specialty truck markets they serve. The Company's commitment to product
quality is exemplified by the ISO 9001 certification of Oshkosh. Pierce is
targeting achievement of ISO 9001 certification in 1998. The Company also
achieves high quality customer service through its
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extensive service and parts support program, which is available to domestic
customers 365 days a year in all product lines throughout the Company's
distribution systems.
Proprietary Components. The Company's advanced design and engineering
capabilities have contributed to the development of proprietary, severe-duty
components which enhance truck performance, reduce manufacturing costs and
strengthen customer relationships. These proprietary components include front
drive and steer axles, transfer cases, cabs, the ALL-STEER electronic all-wheel
steering system, central tire inflation, independent suspension, the Sky-Arm
articulating aerial ladder and the McNeilus Auto Reach Arm. Management believes
these proprietary components provide the Company a competitive advantage by
increasing its vehicles' durability, operating efficiency and vehicle
effectiveness. The integration of many of these components across various
certain product lines also reduces the Company's costs to manufacture its
products compared to manufacturers who simply assemble purchased components.
BUSINESS STRATEGY
The Company is focused on increasing its net sales, profitability and cash
flow by capitalizing on its competitive strengths. Key elements of the Company's
business strategy include:
Focusing on Specialized Truck Markets. The Company plans to continue its
focus on those specialized truck and truck body markets where it has strong
market positions and where the Company can leverage synergies in purchasing,
manufacturing, technology and distribution. The Company's objective is to
achieve and maintain market leadership through internal growth and strategic
acquisitions. Management believes the higher sales volumes associated with
market leadership would allow the Company to continue to enhance productivity in
manufacturing operations, fund innovative product development and invest in
further expansion.
Expanding Distribution and International Sales. The Company plans to add
new distribution capabilities for the municipal segment of the refuse truck body
market and in targeted geographic areas in the domestic fire apparatus market.
The Company intends to increase international sales beyond the $58.9 million pro
forma volume achieved in the twelve months ended December 31, 1997 by
introducing McNeilus refuse truck bodies, rear-discharge concrete mixers and
ready-mix batch plants to international markets and by continuing the expansion
of Pierce's international customer base through the Company's expanding
international distribution capabilities.
Reducing Costs While Maintaining Quality. The Company actively benchmarks
its competitors' costs and best industry practices, and continuously seeks to
implement process improvements to increase cash flow and improve profitability.
With each of its acquisitions, the Company has established cost reduction
targets. At Pierce, the Company exceeded its first-year cost reduction target of
$3.4 million in fiscal 1997 as a result of consolidating facilities,
reengineering the manufacturing process and leveraging increased purchasing
power. The Company is planning for additional cost savings at Pierce in fiscal
1998. The Company intends to improve efficiencies after the acquisition of
McNeilus by taking advantage of the Company's greater purchasing power and by
developing additional manufacturing synergies across product lines.
Introducing New Products. The Company has increased its emphasis on new
product development in recent years, and seeks to expand sales by introducing
new or improved products in its core markets, either through internal
development or strategic acquisition. For example, in December 1997, the Company
purchased the aerial fire apparatus product line of Nova Quintech, a division of
Nova Bus Corporation. This acquisition broadened Pierce's aerial product line
and is expected to provide Pierce with three new products in the first half of
calendar 1998.
Diversifying DoD Contracts. The Company is seeking to diversify its
business with the DoD beyond its traditional contracts relating to the
manufacture of severe-duty heavy tactical trucks. Management believes the
Company has a reputation within the DoD for advanced engineering, quality
manufacturing and vehicle performance that will assist the Company in obtaining
contracts to provide other types of vehicles to the DoD. For example, the
Company was one of two manufacturers selected to participate in a DoD program to
produce upgraded medium-duty prototype vehicles for the MTTR program. The
Company expects the testing and
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validation phase for the MTTR program to conclude in the first half of 1998 and
the initial production contract to be awarded to the Company or the competing
bidder in the fourth quarter of 1998. The Company is also one of two
manufacturers competing for the DoD's FMTV contract. The Company and the other
participating manufacturer are currently preparing prototype FMTV trucks for
testing by the DoD.
Increasing Aftermarket Sales and Service. The Company is focused on
increasing its aftermarket sales and service revenues. In the fire apparatus and
commercial truck markets, the Company has expanded and plans to continue to
expand its refurbishment facilities and parts distribution capabilities. In the
defense truck market, the Company plans to continue to pursue parts and
maintenance contracts for upgrading and reconditioning trucks at both domestic
and international U.S. military bases.
Pursuing Strategic Acquisitions. Following the integration of McNeilus, the
Company intends to selectively pursue additional strategic acquisitions, both
domestically and internationally, in order to enhance its product line and
expand its international presence in specialized truck markets. The Company
intends to focus its acquisition strategy in specialty truck and truck body
markets where it can enhance its strong market positions and achieve significant
acquisition synergies.
THE ACQUISITION
On December 8, 1997, Oshkosh entered into the Stock Purchase Agreement
pursuant to which, on February 26, 1998, it acquired all of the outstanding
capital stock of McNeilus and entered into related non-compete and ancillary
agreements for an aggregate acquisition price of $250.0 million. At November 30,
1997, McNeilus had unrestricted cash of $17.7 million ($20.2 million less an
estimated $2.5 million required for capital and surplus at McNeilus' captive
insurance subsidiary). The Stock Purchase Agreement required, among other
things, that the selling stockholders of McNeilus prepay certain notes and
purchase selected assets of McNeilus, which provided net proceeds to Oshkosh of
approximately $16.1 million. As a result, management estimates that the
effective cost to the Company in connection with the Acquisition was
approximately $216.2 million. Concurrently with the consummation of the
Acquisition, the Company consummated the Note Offering, established the Senior
Credit Facility, applied the net proceeds from the Note Offering and the Senior
Credit Facility to consummate the Acquisition, refinanced existing Oshkosh
indebtedness, paid fees and expenses and established the Lease Financing
Facility.
PRODUCTS AND MARKETS
Following the Pierce and McNeilus acquisitions, the Company is focused on
the following core specialty truck and truck body markets:
Fire Apparatus. The Company, through Pierce, is among the leading domestic
manufacturers of custom and commercial fire apparatus. The Company primarily
serves domestic governmental markets, but also sells fire apparatus to airports,
universities and large industrial companies. In addition, the Company sells fire
apparatus in international markets. Pierce's history of research and development
in consultation with firefighters has resulted in a broad product line that
features a wide range of innovative, high-quality custom and commercial
firefighting equipment with advanced fire suppression capabilities. The
Company's engineering expertise also allows it to design its vehicles to meet
stringent government regulations for safety and effectiveness.
Refuse Truck Bodies. Management believes the Company, through McNeilus, is
a leading domestic manufacturer of refuse truck bodies for the waste services
industry. The Company manufactures a wide range of automated rear, front, side
and top loading refuse truck bodies, which the Company mounts on commercial
chassis. The Company sells its refuse vehicles primarily to commercial waste
management companies. Management believes the Company's refuse vehicles have a
reputation for efficient, cost-effective, dependable operation that supports the
Company's continued expansion into municipal and international markets.
Concrete Mixers and Snow Removal Vehicles. Management believes the Company
is a leading domestic manufacturer of rear- and forward-discharge concrete
mixers. The Company sells rear- and forward-discharge concrete mixers and
portable concrete mixer plants to construction companies throughout the United
States
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and internationally. Management believes the Company is one of the only domestic
concrete mixer manufacturers that markets both rear- and forward-discharge
concrete mixers.
The Company is also among the leading domestic manufacturers of snow
removal vehicles for airports. The Company's specially designed airport snow
removal vehicles can cast up to 4,000 tons of snow per hour and are used by some
of the largest airports in the United States, such as Denver International
Airport, LaGuardia International Airport, Minneapolis-St. Paul International
Airport and O'Hare International Airport. Management believes the reliability of
the Company's high performance snow removal vehicles contribute to its strong
market position.
Defense Trucks. The Company has sold products to the DoD for over 70 years
and is the leading manufacturer of a broad line of severe-duty heavy tactical
trucks for the DoD. The Company's proprietary military all-wheel drive product
line includes: (i) the PLS, a highly mobile self-contained truck and trailer
system that loads and unloads a wide range of cargo in a short period of time;
(ii) the HEMTT, a cross-country cargo and supply carrier that, among other
tasks, is used for direct rearming of the Multiple Launch Rocket System,
transport of Patriot erector/launchers, resupply of field artillery ammunition
and refueling of tanks, trucks and helicopters in forward areas; (iii) the HET,
the primary hauler of the M1A1 main battle tank and also a hauler of other
tanks, fighting and recovery vehicles, self-propelled howitzers and construction
equipment; and (iv) the LVS, a highly mobile cargo carrier with a maximum
payload capacity of 20 tons. The Company also exports its severe-duty heavy
tactical trucks to approved foreign customers.
The Company has developed a strong relationship with the DoD that has
resulted in the Company operating under "family contracts" with the DoD for the
PLS, HEMTT, HET and LVS and for DoD vehicle parts. Under the vehicle family
contracts, the DoD orders a specified range of volume of trucks at fixed prices,
which allows the Company to predict and plan its products and delivery schedules
for vehicles. These family contracts were established in 1996 and 1997 and
expire in fiscal years 1999 and 2000.
<TABLE>
<CAPTION>
MARKETS AND PRODUCTS DESCRIPTION
-------------------- -----------
<S> <C>
Fire Apparatus Market
Custom Pumpers....................... Firefighting apparatus that are equipped with a water tank,
water pump, and foam system (optional). The Pierce line of
custom pumpers is available on each of these custom chassis:
- Quantum -- Flagship of the Pierce line. Features advanced
ergonomics, unique styling, enhanced maneuverability, and
a cab that seats up to 10 personnel.
- Lance -- Features a split-tilt cab. High gross vehicle
weight rating enables this truck to support aerial devices.
- Dash 2000 -- Custom tilt cab, designed for comfort, space
and maneuverability.
- Saber -- Value-priced chassis featuring a tilt-cab, select
options, and seating for up to 8 personnel.
- Arrow -- Cab-forward design.
Commercial Pumpers................... Firefighting apparatus that are equipped with a water tank,
water pump and foam system (optional). Commercial pumpers
have the firefighting bodies mounted on customer-specified
commercial truck chassis.
</TABLE>
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<TABLE>
<CAPTION>
MARKETS AND PRODUCTS DESCRIPTION
-------------------- -----------
<S> <C>
Aerial Apparatus..................... Firefighting apparatus with an aerial device mounted on the
body for access and rescues in elevated locations. These
devices are available on the Pierce line of custom chassis.
Products include:
- 105' and 85' aerial platforms.
- 75' and 105' heavy-duty ladders.
- 105' super heavy-duty ladder.
- 105' aerial tiller -- Tractor-drawn trailer has an aerial
ladder mounted on the trailer and steering capability for
the rear axle.
- Sky Arm -- Four-section, 100-foot aerial ladder with an
articulating platform.
- Sky Five -- Five-section aerial ladder that is available
in rear- and mid-mount configurations. The Company believes
that, at rest, this is the shortest 100-foot aerial ladder
available.
- Sky Boom -- Elevated water tower boom with an attached
ladder. Available in 55' and 60' lengths.
Rescue Vehicles...................... These units are designed to carry personnel and large
quantities of equipment. Pierce rescue vehicles are used for
extrication, water rescue, hazardous materials response,
fire fighting, command center, and lighting operations.
Mini-Pumper.......................... This initial response vehicle is a fast, lightweight,
scaled-down version of full-sized pumper.
Elliptical Tanker.................... Elliptical tankers are used to transport large amounts of
water to fire scenes and can be equipped with a variety of
pumping packages so the vehicles can also be used as a front
line of attack. Water capacity ranges from 1,500 to 5,000
gallons.
Hawk Wildland Rapid Response
Vehicle............................ Four-wheel-drive vehicle takes firefighters into off-road
terrain that can be difficult or even unpassable for larger,
two-wheel-drive pumpers. Designed specifically as a
first-strike vehicle, the Hawk features a water tank, water
pump, and a compressed air foam system.
Refuse Truck Body Market
Front Loader......................... Refuse is loaded into a container at the front of the
vehicle; the container is lifted by large arms and dumped
into the body. The front loader can carry 40 to 43 cubic
yards of refuse and is available on a selection of
commercial chassis. A self-leveling system for keeping the
container level during dumping cycle is optional.
Rear Loader.......................... McNeilus offers three different models of rear-loading
refuse bodies. Refuse is loaded into the rear of the vehicle
and compacted toward the front of the refuse body. McNeilus
rear loaders can carry from 17 to 32 cubic yards of refuse.
Autoreach Automated Side Loader...... This refuse body features a boomless arm for loading large
containers of refuse from the side of the vehicle. The
side-loading arm is designed to articulate left to right and
dump from any angle. The driver can keep the vehicle in one
position after stopping for a pick-up rather than having to
move the vehicle to put the arm in the proper position for
lifting the next refuse container. The McNeilus Autoreach is
available in 28-, 33- and 36-yard capacities and features a
continuous packing cycle.
</TABLE>
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<TABLE>
<CAPTION>
MARKETS AND PRODUCTS DESCRIPTION
-------------------- -----------
<S> <C>
Manual Side Loader................... Designed for one-person refuse collection operations and can
carry up to 33 cubic yards. The body can be loaded from
either side and is typically mounted on a low-entry chassis.
Concrete Mixer and Snow Removal
Vehicle Market
F-Series............................. Designed for a variety of severe-duty all-wheel drive
applications, including rear-discharge concrete mixers,
concrete block trucks, dry wall haulers, wall form trucks,
digger derricks, aerial buckets and oil field service.
S-Series............................. A forward-discharge concrete mixer that allows the driver to
approach a job with greater visibility, improved placement
and greater safety. The two-speed transfer case and front
driving gear gives extra power to maneuver into tighter
spots in any kind of terrain.
H-Series............................. An airport snow removal vehicle that can clear 4,000 tons of
snow per hour. Optional sweepers, blowers and plows are
available.
P-Series............................. A super heavy-duty frame vehicle that can break through
heavily drifted snow. The vehicle also has the added
flexibility of being durable enough to meet the demands of
off-road applications.
Bridgemaster III..................... Rear-discharge mixer featuring a trailing axle. This mixer
lineup can carry from 9 to 11.5 cubic yards of concrete. The
Bridgemaster IIIs are available on a variety of commercial
truck chassis.
Standard Rear Discharge Mixer........ Rear-discharge concrete mixer that can handle from 4 to 11
cubic yards and are available with a variety of axle
configurations including tag axles. Options include remote
pendant controls for controlling discharge near the rear of
the vehicle.
Sliding Mixer System................. Mounted on a trailer that can be extended up to 13 feet
depending on the size of the mixer selected. It is designed
for transport and large pours. It typically can carry 11 to
13 yards of concrete.
Defense Truck Market
Heavy Expanded Mobility Tactical
Truck ("HEMTT").................... Cross-country cargo and supply carrier with maximum payload
capacity of 11 tons. The HEMTT is used for direct rearming
of the Multiple Launch Rocket System, transport of Patriot
erector/launchers and resupply of field artillery ammunition
and refueling of tanks, trucks and helicopters in forward
areas.
Heavy Equipment Transporter
("HET")............................ Primary hauler of the M1A1 main battle tank and also
transports other tanks, fighting and recovery vehicles,
self-propelled howitzers and construction equipment.
Palletized Load System ('PLS")....... Cargo hauler with maximum payload capacity of 33 tons. The
truck and trailer system hauls a variety of cargo and can
load or unload in a short period of time.
Logistic Vehicle System ("LVS")...... Highly mobile cargo carriers with a maximum payload capacity
of 20 tons. The LVS can carry military vehicles and supply
containers over rough terrain and steep grades due to its
separating chassis module design.
</TABLE>
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SALES AND DISTRIBUTION
The Company believes it differentiates itself from many of its larger
competitors by tailoring its distribution to the needs of its specialized truck
markets and from its smaller competitors with its national and global sales and
service capabilities. Distribution personnel use demonstration trucks to show
customers how to properly use the Company's trucks and truck bodies, compared to
the showroom sales approach of the typical dealers of large truck manufacturers.
The Company backs all products by same-day parts shipment, and its service
technicians are available in person or by telephone to domestic customers 365
days a year. The Company believes that its dedication to keeping its trucks
in-service in demanding conditions worldwide has contributed to customer
loyalty.
The Company provides its salespeople, representatives and distributors with
product and sales training on the operation and specifications of its products.
The Company's engineers, along with its product managers, develop operating
manuals and provide field support at truck delivery for certain markets.
Distributors, where used, enter into agreements with the Company that allow
for termination by either party generally upon 90 days' notice. Distributors are
not permitted to market and sell competitive products.
Fire Apparatus Market. The Company believes that the geographical breadth,
size and quality of its fire apparatus sales and service organization are
competitive advantages in a market characterized by a few large manufacturers
and numerous small, regional competitors. Pierce's fire apparatus are sold
through 38 sales and service organizations with more than 260 sales
representatives nationwide, which combine broad geographical reach with
frequency of contact with fire departments and municipal government officials.
Management believes that frequency of contact and local presence are important
to cultivate major, and typically infrequent, purchases involving the city or
town council and fire department, purchasing, finance, and mayoral offices,
among others, that may participate in a fire truck bid and selection. After the
sale, Pierce's nationwide local parts and service capability is available to
help municipalities maintain peak readiness for this vital municipal service.
Pierce primarily focused its sales efforts in rural and small suburban
domestic markets prior to its acquisition by Oshkosh. Due to its expertise and
long-standing relationships in numerous large urban markets, the Company has
extended Pierce's sales focus into several key metropolitan areas. As a direct
result of a targeted approach to major urban markets, Pierce was awarded the two
largest U.S. fire truck contracts in its history in fiscal 1997.
Pierce substantially strengthened its competitive position overseas in
fiscal 1997. Pierce's worldwide distribution network was expanded to include 43
international representatives. This network has delivered several new orders
including the award in December 1997 of a $35 million contract for 130 custom
fire trucks for Saudi Arabia to be delivered from November 1998 through October
1999.
The Company has invested in the development of sales tools for its
representatives which it believes creates a competitive advantage in the sale of
fire apparatus. For example, Pierce's Pride II PC-based sales tool can be used
by its sales representatives to develop the detail specifications, price the
base truck and options and draw the configured truck on the customer's premises.
The quote, if accepted, is directly interfaced into Pierce's sales order
systems.
Refuse Truck Body, Concrete Mixer and Snow Removal Vehicle Markets. Oshkosh
maintains four distribution centers with 26 in-house sales and service
representatives in the U.S. to sell and service its forward- and rear-discharge
concrete mixers. All of the Oshkosh facilities provide full service, mounting
and parts distribution to customers in their geographic regions, while two also
have paint facilities. In addition, Oshkosh utilizes three independent
distributors in this market. Oshkosh also maintains 22 full sales and service
dealers focused on the sale of snow removal vehicles, principally to airports,
but also to municipalities, counties and other governmental entities.
McNeilus operates eight distribution centers with 83 in-house sales and
service representatives in the U.S. to sell and service its refuse truck bodies,
rear-discharge concrete mixers and ready-mix batch plants. Six of such
distribution centers provide full service, mounting and parts distribution to
customers in their
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geographic regions while the remainder are primarily sales offices with limited
parts and service capabilities. Five of the McNeilus distribution centers also
have paint facilities and provide significant additional paint and mounting
services during peak demand periods.
With respect to McNeilus, the Company plans to:
- Combine the McNeilus and Oshkosh distribution capabilities. Because there
is little geographic overlap between the rear-discharge markets of
McNeilus and the forward-discharge markets of Oshkosh, management
presently intends to maintain all existing distribution centers of both
companies. The Company believes that the combined network will represent
one of the largest refuse truck body and concrete mixer distribution
networks in the U.S.
- Apply Oshkosh's and Pierce's sales and marketing expertise in municipal
markets to increase sales of McNeilus refuse truck bodies to municipal
customers. Virtually all McNeilus refuse truck body sales have been to
commercial customers, which the Company believes represent a majority of
the refuse truck body market. However, many municipalities purchase their
own refuse trucks, and the Company believes that it is positioned to
create an effective municipal distribution in the refuse truck body market
by building upon its present base of municipal distributors.
- Offer McNeilus refuse truck bodies, rear-discharge concrete mixers and
ready-mix batch plants to Oshkosh's 43 international dealers for sales and
service worldwide. McNeilus' international sales have historically been
limited because McNeilus has focused on the domestic market. However,
management believes that refuse body exports are a significant percentage
of certain competitors' sales, and represents a meaningful opportunity for
the Company. The Company believes that its international Oshkosh and
Pierce dealers are capable of effectively selling and servicing the
McNeilus product line and plans to use its experience at Pierce to develop
sales of McNeilus products.
Defense Truck Market. Substantially all domestic defense products are sold
direct to principal branches of the DoD. The Company maintains a liaison office
in Washington, D.C. to represent its interests with the Pentagon, Congress and
the Office of the President. The Company also sells and services defense
products to foreign governments directly through four Company-owned
international sales offices, through agents, consultants and representatives,
and through the United States FMS program. The DoD has begun to rely on industry
for support and sustainability of its vehicles which has opened up new
opportunities for maintenance, service and contract support to the U.S. Army and
U.S. Marine Corps.
In addition to marketing its current truck offerings and competing for new
contracts in the medium- and light-duty segments, the Company actively works
with the Armed Services to develop new applications for its vehicles. For
example, the Company is:
- Developing new applications for its PLS vehicle beyond its traditional
ammunition transportation role. A contract for construction models has
already been awarded, and several other models of the PLS are currently
under evaluation.
- Modifying its HEMTT vehicle for alternate uses. The Company has
integrated a foam proportioning fire fighting package on a HEMTT for use
by the U.S. military and other governmental agencies in the extinguishment
of wildland fires. The HEMTT has also been modified to include a load
handling system to meet lower payload requirements.
- Upgrading existing products such as the HEMTT, PLS and HET in order to
achieve better performance and new technology. As an example, the Company
has separate development contracts for each product with the U.S. Army to
develop a new HEMTT, HET and PLS with new engines, transmissions, transfer
cases and numerous other components that increase reliability and
performance at reduced costs.
COMPETITION
The Company operates in highly competitive industries. The Company competes
in the fire apparatus and defense truck markets principally on the basis of
lowest qualified bid. To submit a qualified bid, the bidder
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must demonstrate that the fire apparatus or defense truck meets stringent
specifications, and for most defense truck contracts, passes extensive testing.
In addition, decreases in the DoD budget have resulted in a reduction in the
number and size of contracts, which has intensified the competition for
remaining available contracts. The Company and its competitors continually
undertake substantial efforts in order to maintain existing levels of defense
business and to succeed in bid competitions for available contracts. In the
refuse truck body and concrete mixer markets, the Company also faces intense
competition on the basis of price, innovation, quality, service and product
performance capabilities. As the Company seeks to expand its sales of refuse
truck bodies to municipal customers, management believes the principal basis of
competition for such business will be lowest qualified bid.
In all of the Company's markets, competitors include smaller, specialized
manufacturers as well as large, mass producers. The Company believes that, in
its specialized truck markets, it has been able to effectively compete against
large, mass producers due to its manufacturing flexibility and specialized
distribution systems. The Company believes that its competitive cost structure,
engineering expertise and global distribution systems have enabled it to
effectively compete with other specialized manufacturers.
Pierce's principal competitors in the fire apparatus market include
Emergency One, Inc. (a subsidiary of Federal Signal Corporation), FWD
Corporation (a subsidiary of Corsta Corporation), Kovatch Mobile Equipment
Corp., and numerous small, regional manufacturers. Principal competitors of
McNeilus, in the refuse truck body market, include The Heil Company (a
subsidiary of Dover Corporation), Leach Company, McClain E-Z Pack, Inc. and
Pak-Mor Manufacturing Company. Principal competitors of McNeilus and Oshkosh in
concrete mixer markets include Advance Mixer, Inc., London Machinery, Inc., Mack
Trucks, Inc., Maxim Truck Company, Inc., Rexworks, Inc., and T.L. Smith Machine
Co., Inc. Oshkosh's principal competitors in snow removal markets include Monroe
Truck Equipment, Inc. and Stewart & Stevenson Services, Inc. Oshkosh's principal
competitors for DoD contracts include AM General Corporation and Stewart &
Stevenson Services, Inc. The Company also faces competition from its competitors
for acquisition opportunities.
Several of the Company's competitors have greater financial, marketing,
manufacturing and distribution resources than the Company. There can be no
assurance that the Company's products will continue to compete successfully with
the products of competitors or that the Company will be able to retain its
customer base or to improve or maintain its profit margins on sales to its
customers, all of which could materially adversely affect the Company's
financial condition, results of operations and debt service capability.
CUSTOMERS AND BACKLOG
Sales to the DoD comprised approximately 29% of the Company's pro forma net
sales for the twelve months ended December 31, 1997. No other single customer
accounted for more than 2% of the Company's pro forma sales for this period. A
substantial majority of the Company's net sales are derived from customer orders
prior to commencing production.
The Company's pro forma backlog at December 31, 1997 was $483.3 million.
The backlog at December 31, 1997 includes $147.0 million related to DoD
contracts, $159.0 million related to fire apparatus and $132.3 million related
to other commercial products. Substantially all of the Company's backlog
pertains to fiscal 1998 business.
Reported backlog excludes purchase options and announced orders for which
definitive contracts have not been executed. Additionally, backlog excludes
unfunded portions of DoD long-term family contracts. Backlog information and
comparisons thereof as of different dates may not be accurate indicators of
future sales or the ratio of the Company's future sales to the DoD versus its
sales to other customers.
GOVERNMENT CONTRACTS
Approximately 29% of the Company's pro forma net sales for the twelve
months ended December 31, 1997 were made to the U.S. government under long-term
contracts and programs, substantially all of which were in the defense truck
market. Accordingly, a significant portion of the Company's sales are subject to
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inherent risks, including uncertainty of economic conditions, changes in
government policies and requirements that may reflect rapidly changing military
and political developments and the availability of funds.
The Company's sales into defense truck markets are substantially dependent
upon periodic awards of new contracts and the purchase of base vehicle
quantities and the exercise of options under existing contracts. The Company's
existing contracts with the DoD may be terminated at any time for the
convenience of the government. Upon such termination, the Company would
generally be entitled to reimbursement of its incurred costs and, in general, to
payment of a reasonable profit for work actually performed.
In November 1996, the U.S. Army Tank Automotive and Armaments Command
awarded the Company and one other defense contractor $6.9 million prototype
contracts for Phase I competition of the MTTR program. The MTTR program was
initiated to update and modernize the 5-ton tactical vehicle fleet of the U.S.
Marine Corps and the U.S. Army. The goal of the U.S. Marine Corps portion of the
program is to remanufacture the current configuration to carry a much greater
payload with substantially increased cross-country mobility. The U.S. Army
portion of the program is designed to increase the useful life and decrease
operation and support costs of a portion of the U.S. Army's existing fleet.
Phase I covers the design, development, and production of five prototype test
vehicles for the U.S. Marine Corps and five additional prototype test vehicles
for the U.S. Army. Testing of the ten prototype test vehicles commenced August
1997 and will be concluded in April 1998. Phase II of the program is currently
expected to include the production of up to 11,500 U.S. Marine Corps and U.S.
Army units at a value that could exceed $1.0 billion over a period of years.
Competition for the Phase II production contract is intense between the two
Phase I contractors. Phase I testing along with the Phase II proposal will
determine the single supplier of any production contract awarded. No assurance
can be given that the DoD will award a Phase II Contract or that federal budgets
will provide future funding for a Phase II contract, as further discussed under
"Risk Factors -- Uncertainty Inherent in U.S. Government Contracts" and "--
Risks of Further Reductions or Changes in Government Expenditures."
The U.S. Army has announced a competition to add a second supplier to build
FMTV trucks. Up to three contractors will build several trucks for testing by
the DoD pursuant to a request for proposal currently under development by the
DoD. The Company currently has received two existing vehicles for intense study
in preparation for the competition. Based on current plans announced by the DoD,
the winner of the competition would be awarded an initial production contract
for approximately 3,000 vehicles. Upon completion of this production contract
and the current supplier's present contract, the U.S. Army is expected to
conduct a competition between these two manufacturers for the production of
approximately 50,000 FMTV trucks. No assurance can be given that the DoD will
award the FMTV contract or that federal budgets will provide future funding for
the FMTV contract, as further discussed under "Risk Factors -- Uncertainty
Inherent in U.S. Government Contracts" and "-- Risks of Further Reductions or
Changes in Government Expenditures."
Under firm fixed-price contracts with the government, the price paid to the
Company is generally not subject to adjustment to reflect the Company's actual
costs, except costs incurred as a result of contract changes ordered by the
government. The Company generally attempts to negotiate with the government the
amount of increased compensation to which the Company is entitled for
government-ordered changes which result in higher costs. In the event that the
Company is unable to negotiate a satisfactory agreement to provide such
increased compensation, the Company may file an appeal with the Armed Services
Board of Contract Appeals or the U.S. Claims Court. The Company has no such
appeals pending.
The Company, as a U.S. government contractor, is subject to financial
audits and other reviews by the U.S. government of performance of, and the
accounting and general practices relating to, U.S. government contracts, and
like most large government contractors, the Company is audited and reviewed on a
continual basis. Costs and prices under such contracts may be subject to
adjustment based upon the results of such audits and reviews. Additionally, such
audits and reviews can and have led to civil, criminal or administrative
proceedings. Such proceedings could involve claims by the government for fines,
penalties, compensatory and treble damages, restitution and/or forfeitures.
Under government regulations, a company or one or more of its subsidiaries can
also be suspended or debarred from government contracts, or lose its export
privileges based
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on the results of such proceedings. Additional information is included under the
caption "Risk Factors -- Uncertainty Inherent in U.S. Government Contracts." The
Company believes, based on all available information, that the outcome of all
such audits, reviews and proceedings will not have a material adverse effect on
its consolidated financial condition or results of operations.
SUPPLIERS
The Company is highly dependent on its suppliers and subcontractors in
order to meet commitments to its customers, and many major components are
procured or subcontracted on a sole-source basis with a number of domestic and
foreign companies. Through its reliance on this supply network for the purchase
of certain components, the Company is able to avoid many of the preproduction
and fixed costs associated with the manufacture of those components. The Company
maintains an extensive qualification and performance measurement system to
control risks associated with such reliance on suppliers. The Company
occasionally experiences problems with supplier and subcontractor performance
and must identify alternate sources of supply and/or address related warranty
claims from customers.
While the Company purchases many costly components such as engines,
transmissions and axles, it manufactures certain proprietary components that are
deemed material to the Company's business. These components include front drive
and steer axles, transfer cases, cabs, the ALL-STEER electronic all-wheel
steering system, central tire inflation, independent suspension, the Sky-Arm
articulating aerial ladder, the McNeilus Auto Reach Arm, body structures and
many smaller parts which add uniqueness and value to the Company's products.
Some of these proprietary components are marketed to other manufacturers.
ENGINEERING, RESEARCH AND DEVELOPMENT
The Company maintains three facilities for new product development and
testing with a staff of 46 engineers and technicians who are responsible for
improving existing products and development and testing of new trucks, truck
bodies and components. The Company prepares annual new product development and
improvement plans for each of its markets and measures progress against those
plans.
Virtually all of the Company's sales of fire apparatus require some custom
engineering to meet the customer's specifications. Engineering is also a
critical factor in defense truck markets due to the severe operating conditions
under which the Company's trucks are utilized, new customer requirements and
stringent government documentation requirements. In the refuse truck body,
concrete mixer and snow equipment markets, product innovation is highly
important to meet customers' changing requirements. Accordingly, the Company
maintains a permanent staff of over 240 engineers and engineering technicians,
and it regularly outsources significant engineering activities in connection
with major DoD bids and proposals.
For fiscal years 1997, 1996 and 1995, Oshkosh incurred engineering,
research and development expenditures of $7.8 million, $6.3 million and $5.4
million, respectively, portions of which were recoverable from customers,
principally the U.S. government.
INTELLECTUAL PROPERTY
Patents and licenses are important in the operation of the Company's
business, as one of management's key objectives is developing proprietary
components in order to provide the Company's customers with advanced
technological solutions at attractive prices. The Company holds in excess of 50
active domestic patents. Management believes patents for all-wheel steer and
independent suspension systems, which have remaining lives of 9 to 19 years,
provide the Company with a competitive advantage in the fire apparatus business
and the sale of ARFF and snow removal vehicles. The independent suspension
system was also added to the U.S. Marine Corps portion of the MTTR program,
which the Company believes should be a competitive advantage in the competition
for the Phase II production contract. Management believes that none of the
Company's other patents individually are significant to the business.
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<PAGE> 62
The Company holds trademarks for "Oshkosh," "Pierce," "McNeilus" and "MTM."
These trademarks are considered to be important to the future success of the
Company's business.
QUALITY MANAGEMENT
In 1994, Oshkosh commenced a program to educate and train all employees at
its Oshkosh facilities in quality principles and to seek ISO 9001 certification
to improve the Company's competitiveness in its global markets. Employees at all
levels of the Company are encouraged to understand customer and supplier
requirements, measure performance, develop systems and procedures to prevent
nonconformance with requirements and produce continuous improvement in all work
processes. In 1995, Oshkosh achieved ISO 9001 certification and Pierce is
targeting achievement of ISO 9001 certification in 1998. The Company is
evaluating whether to pursue ISO 9001 certification for McNeilus. Although
management does not consider such certification essential for McNeilus' domestic
markets, the Company may conclude it is valuable in marketing to certain
international customers.
EMPLOYEES
As of December 31, 1997, on a pro forma basis, the Company had
approximately 3,500 employees, of which approximately 1,300, 1250 and 600
employees are located at its principal facilities in Oshkosh, Wisconsin,
Appleton, Wisconsin and Dodge Center, Minnesota, respectively. Production
workers totaling approximately 800 employees at the Company's Oshkosh facilities
are represented by the United Auto Workers union. The Company's five-year
contract with the United Auto Workers union extends through September 30, 2001.
The Company believes its relationship with employees is satisfactory.
MANUFACTURING
The Company manufactures trucks and truck bodies at ten manufacturing
facilities. Employee involvement is encouraged to improve production processes
and product quality. In order to reduce production costs, the Company maintains
a continuing emphasis on the development of proprietary components,
self-sufficiency in fabrication, just-in-time inventory management, improvement
in production flows, interchangeability and simplification of components among
product lines, creation of jigs and fixtures to ensure repeatability of quality
processes, utilization of robotics, and performance measurement to assure
progress toward cost reduction targets.
With the Acquisition, the Company intends to continue to upgrade its
manufacturing capabilities by adopting best practices across its manufacturing
facilities, relocating manufacturing activities to the most efficient facility,
investing in further fixturing and robotics, re-engineering manufacturing
processes and adopting lean manufacturing management practices across all
facilities.
The Company plans to draw upon its recent experience with the Pierce
acquisition in integrating the McNeilus manufacturing facilities. Within the
first year following the Pierce acquisition, the Company consolidated three
Pierce manufacturing facilities down to two while increasing Pierce's capacity
by improving product flow. In addition, among other things, the Company reduced
the number of operating shifts at the Pierce paint plant from three to one to
substantially reduce utility costs, implemented indexing of production lines and
relocated chassis frame build-up to Oshkosh to improve production efficiencies,
and eliminated storage rooms to relocate inventory to point of use thereby
eliminating duplicate material handling.
PROPERTIES
Management believes the Company's equipment and buildings are modern,
well-maintained and adequate for its present and anticipated needs. As of
December 31, 1997, on a pro forma basis, the Company operated in ten
manufacturing plants. In addition, the Company maintains twelve distribution
centers
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<PAGE> 63
throughout the United States and four sales offices internationally. The
Company's manufacturing plants include:
<TABLE>
<CAPTION>
APPROXIMATE
SQUARE FOOTAGE
----------------- PRINCIPAL
LOCATION (# OF FACILITIES) OWNED LEASED PRODUCTS MANUFACTURED
-------------------------- ----- ------ ---------------------
<S> <C> <C> <C>
Oshkosh, Wisconsin(3)................ 636,000 52,000 Defense Trucks; Front-Discharge Mixers; Snow
Removal Vehicles; ARFF Vehicles
Appleton, Wisconsin(2)............... 589,000 19,000 Fire Apparatus
Dodge Center, Minnesota(1)........... 604,000 Rear-Discharge Mixers; Refuse Truck Bodies
Bradenton, Florida(1)................ 287,000 Defense Trucks; Rear-Discharge Mixers
Riceville, Iowa(1)................... 108,000 Components for Rear-Discharge Mixers and
Refuse Truck Bodies
Kensett, Iowa(1)..................... 65,000 Not currently in use
McIntire, Iowa(1).................... 28,000 Components for Rear-Discharge Mixers and
Refuse Truck Bodies
Weyauwega, Wisconsin(1).............. 28,000 Rear-Discharge Mixers
</TABLE>
The Company's facilities are pledged as collateral under the terms of the
Senior Credit Facility.
The Company's manufacturing facilities generally operate five days per week
on one shift, except for one week shutdowns in July and December. Management
believes the Company's manufacturing capacity could be approximately doubled
with limited capital spending by working an additional shift at each facility.
ENVIRONMENTAL MATTERS
As part of its routine business operations, the Company disposes of and
recycles or reclaims certain industrial waste materials, chemicals and solvents
at third party disposal and recycling facilities which are licensed by
appropriate governmental agencies. In some instances, these facilities have been
and may be designated by the United States Environmental Protection Agency
("EPA") or a state environmental agency for remediation. Under CERCLA and
similar state laws, each potentially responsible party ("PRP") that contributed
hazardous substances may be jointly and severally liable for the costs
associated with cleaning up the site. Typically, PRPs negotiate a resolution
with the EPA and/or the state environmental agencies. PRPs also negotiate with
each other regarding allocation of the cleanup cost.
As to one such site, Pierce is one of 414 PRPs participating in the costs
of addressing the site and has been assigned an allocation share of
approximately 0.04%. Currently a remedial investigation/feasibility study is
being completed, and as such, an estimate for the total cost of the remediation
of this site has not been made to date. However, based on estimates and the
assigned allocations, the Company believes its liability at the site will not be
material and its share is adequately covered through reserves established by the
Company at September 30, 1997. Actual liability could vary based on results of
the study, the resources of other PRPs and the Company's final share of
liability.
The Company is addressing a regional trichloroethylene ("TCE") groundwater
plume on the south side of Oshkosh, Wisconsin. The Company believes there may be
multiple sources in the area. TCE was detected at the Company's North Plant
facility with recent testing showing the highest concentrations in a monitoring
well located on the upgradient property line. Because the investigation process
is still ongoing, it is not possible for the Company to estimate its long-term
total liability associated with this issue at this time. Also, as part of the
regional TCE groundwater investigation, the Company conducted a groundwater
investigation of a former landfill located on Company property. The landfill,
acquired by the Company in 1972, is approximately 2.0 acres in size and is
believed to have been used for the disposal of household waste. Based on the
investigation, the Company does not believe the landfill is one of the sources
of the TCE contamination. Based upon current knowledge, the Company believes its
liability associated with the TCE issue will not be material and is adequately
covered through reserves established by the Company at September 30, 1997.
However, this may change as investigations proceed by the Company, other
unrelated property owners, and government entities.
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<PAGE> 64
The Company is subject to other environmental matters which arise in the
ordinary course of business. Although the final results of all such matters
cannot be predicted with certainty, management believes that the ultimate
resolution of all such matters, after taking into account the liabilities
accrued with respect to such matters, will not have a material adverse effect on
the Company's financial condition or results of operations. Actual results could
vary, among other things, due to the uncertainties involved in environmental
investigations and remediation.
LEGAL PROCEEDINGS
The Company is engaged in litigation against Super Steel Products
Corporation ("SSPC"), the Company's former supplier of mixer systems for
forward-discharge concrete mixer trucks under a long-term supply contract. SSPC
sued the Company in state court claiming the Company breached the contract. The
Company counterclaimed for repudiation of contract. On July 26, 1996, a jury
returned a verdict for SSPC awarding damages totaling $4.5 million. On October
10, 1996, the state court judge overturned the verdict against the Company,
granted judgment for the Company on its counterclaim, and ordered a new trial
for damages on the Company's counterclaim. Both SSPC and the Company have
appealed the state court judge's decision. The Wisconsin Court of Appeals has
agreed to hear the case and both the Company and SSPC have filed briefs in this
matter.
The Company currently is engaged in the arbitration of certain disputes
between the Oshkosh Florida Division and O.V. Containers, Inc. ("OV"), which
arose out of the performance of a contract to deliver 690 skeletal container
chassis. The dispute involves a warranty claim originally filed in an
arbitration forum by OV against the Company in 1992. The Company settled the
arbitration, but subsequently obtained information that the failed chassis at
the heart of the dispute were subject to misuse and abuse and that certain
information requested at the time of the arbitration was improperly withheld.
The Company filed a lawsuit in the U.S. District Court for the Middle District
of Florida seeking damages of approximately $1.6 million. OV filed a demand for
arbitration of the matters underlying the Company's lawsuit, and successfully
stayed the Company's lawsuit pending the arbitration. OV has also asserted a
counterclaim in the arbitration for alleged breach of warranty and are seeking
damages of approximately $9.0 million. The arbitration is being conducted before
a three-member panel under the commercial dispute rules of the American
Arbitration Association, and is not expected to conclude before May 1998. The
Company is vigorously contesting warranty and other claims made against it, and
has asserted substantial claims against OV. The outcome of these matters cannot
be predicted at the present time.
The Company is subject to other legal proceedings and claims, including
patent, antitrust and state dealership regulation compliance proceedings.
Although the final results of all such claims cannot be predicted with
certainty, management believes that the ultimate resolution of all claims, after
taking into account the liabilities accrued with respect to such claims, will
not have a material adverse effect on the Company's financial condition or
results of operations. Actual results could vary, among other things, due to the
uncertainties involved in litigation.
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<PAGE> 65
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information as of January 15, 1998
concerning the Company's executive officers and directors. All of the Company's
officers serve terms of one year and until their successors are elected and
qualified. Each of the Company's directors are elected each year to serve for a
term of one year and until his or her successor is elected and qualified.
<TABLE>
<CAPTION>
NAME AGE TITLE
---- --- -----
<S> <C> <C>
Robert G. Bohn................. 44 President, Chief Executive Officer and Director
Timothy M. Dempsey............. 57 Vice President, General Counsel and Secretary
Paul C. Hollowell.............. 56 Executive Vice President and General Manager, Defense
Business
Charles L. Szews............... 41 Executive Vice President and Chief Financial Officer
Matthew J. Zolnowski........... 44 Vice President, Administration
J. David Brantingham........... 40 Vice President, Information Systems
Fred C. Fielding............... 63 Vice President, Government Operations, Washington D.C.
Office
Dan J. Lanzdorf................ 49 Vice President and General Manager, Commercial Business
Mark A. Meaders................ 39 Vice President, Corporate Purchasing and Logistics
John W. Randjelovic............ 53 Vice President and General Manager, Pierce Manufacturing,
Inc.
Donald H. Verhoff.............. 51 Vice President, Technology
J. William Andersen............ 59 Director
Daniel T. Carroll.............. 71 Director
Gen. Frederick M. Franks, 61 Director
Jr...........................
Michael W. Grebe............... 57 Director
Kathleen J. Hempel............. 47 Director
Stephen P. Mosling............. 51 Director
J. Peter Mosling, Jr........... 53 Director
Richard G. Sim................. 53 Director
</TABLE>
Robert G. Bohn. Mr. Bohn joined the Company in 1992 as Vice
President-Operations. He was appointed President and Chief Operating Officer in
1994. He was appointed President and Chief Executive Officer in October 1997.
Prior to joining the Company, Mr. Bohn was Director-European Operations for
Johnson Controls, Inc., Milwaukee, Wisconsin, which manufactures, among other
things, automotive products. He worked for Johnson Controls from 1984 until
1992. He was elected a Director of the Company in June 1995.
Timothy M. Dempsey.Mr. Dempsey joined the Company in October 1995 as Vice
President, General Counsel and Secretary. Mr. Dempsey has been and continues to
be a partner in the law firm of Dempsey, Magnusen, Williamson and Lampe in
Oshkosh, Wisconsin.
Paul C. Hollowell. Mr. Hollowell joined the Company in April 1989 as Vice
President-Defense Products and assumed his present position in February 1994.
Charles L. Szews. Mr. Szews joined the Company in March 1996 as Vice
President and Chief Financial Officer and assumed his present position in
October 1997. Mr. Szews was previously employed by Fort Howard Corporation, a
manufacturer of tissue products, from June 1988 until March 1996 in various
positions, including Vice President and Controller from September 1994 until
March 1996.
Matthew J. Zolnowski. Mr. Zolnowski joined the Company as Vice
President-Human Resources in January 1992 and assumed his present position in
February 1994.
J. David Brantingham. Mr. Brantingham joined the Company in April 1995 as
Manager of Technical Services and assumed his present position in November 1997.
Mr. Brantingham was previously employed by Western Publishing, Inc., a printer
and publisher of children's books and a manufacturer of adult games, in various
positions including Director of Technical Services from May 1989 through April
1995.
Fred C. Fielding. Mr. Fielding joined the Company in October 1989 and
assumed his present position in January 1991.
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<PAGE> 66
Dan J. Lanzdorf. Mr. Lanzdorf joined the Company in 1973 as a design
engineer and has served in various assignments including Chief Engineer --
Defense, Director of Defense Engineering, Director of the Defense Business unit,
and Vice President of Manufacturing prior to assuming his current position in
November 1997.
Mark A. Meaders. Mr. Meaders joined the Company as Director of Purchasing
for Pierce in September 1996 and assumed his present position as Vice
President-Corporate Purchasing and Logistics in November 1997. Prior to joining
the Company, Mr. Meaders was Vice President-Purchasing for the CA Short Co.,
Inc., a provider of premium incentives, from 1995 until joining Pierce. Mr.
Meaders began his career at the Company's former Chassis Division as the plant
manager from 1993-1995. He previously served 13 years in the U.S. Army and
departed after attaining the rank of Major.
John W. Randjelovic. Mr. Randjelovic joined the Company in October 1992 as
Vice President and General Manager in charge of the Bradenton, Florida Division.
In September 1996, he was appointed Vice President of Manufacturing, Purchasing,
and Materials for Pierce and assumed his present position in October 1997. Prior
to joining the Company, Mr. Randjelovic worked as a consultant for Workplace
Transformation.
Donald H. Verhoff. Mr. Verhoff joined the Company in May 1973 as a
development engineer. He has held positions as Manager of the Test Lab, and
Director of New Product Development prior to assuming his present position in
November 1997.
J. William Andersen. Mr. Andersen has served as a Director of the Company
since 1976 and had been the Executive Director of Development, University of
Wisconsin-Oshkosh from 1980 through his retirement in 1994.
Daniel T. Carroll. Mr. Carroll has served as a Director of the Company
since 1991. Effective October 1997, he was elected Chairman of the Board of
Directors. He is Chairman of The Carroll Group, a management consulting firm
located in Avon, Colorado. Mr. Carroll is also a director of Wolverine Worldwide
Inc.; Comshare, Inc.; Aon Corp.; Diebold Incorporated; A.M. Castle & Company;
American Woodmark Corporation; Woodhead Industries, Inc.; Holmes Protection
Group, Inc.; and Diversa Inc.
Gen. Frederick M. Franks, Jr. Gen. Franks has served as a Director of the
Company since May 1997. He was the Commander of the U.S. Army Training and
Doctrine Command from 1991 to 1994 and commanded the U.S. Army VII Corps during
Operation Desert Storm. He retired from the Army in 1994.
Michael W. Grebe. Mr. Grebe has served as a Director of the Company since
1990. He has been a partner in the law firm of Foley & Lardner in Milwaukee
since 1977. The Company retained Mr. Grebe's firm for legal services in 1997 and
is similarly doing so in 1998.
Kathleen J. Hempel. Ms. Hempel was elected as a Director of the Company in
December 1997. She was Vice Chairman and Chief Financial Officer of Fort Howard
Corporation, a manufacturer of paper and paper products, from 1992 until its
merger into Fort James Corporation in 1997. She is a director of Whirlpool
Corporation.
J. Peter Mosling, Jr. Mr. Mosling has served as a Director of the Company
since 1976 having joined the Company in 1969. He had served in various senior
executive capacities since joining the Company through his retirement in 1994.
Stephen P. Mosling. Mr. Mosling has served as a Director of the Company
since 1976, having joined the Company in 1971. He had served in various senior
executive capacities since joining the Company through his retirement in 1994.
Richard G. Sim. Mr. Sim has served as a Director of the Company since March
1997. He is Chairman, President and Chief Executive Officer of Applied Power,
Inc., Milwaukee, Wisconsin, which manufactures hydraulic equipment and
electrical consumables.
Stephen P. Mosling and J. Peter Mosling are brothers. Other than as noted,
none of the Company's executive officers or directors has any family
relationship with any other executive officer or Director.
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<PAGE> 67
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of each class of the Company's stock by each director, each person
known by the Company to own beneficially more than 5.0% of either the Company's
Class A Common Stock or the Company's Common Stock, the Company's current and
former chief executive officer, the four other most highly compensated executive
officers of the Company in fiscal 1997, and all directors and executive officers
as a group as of January 15, 1998. Except as indicated, persons listed have sole
voting and investment power over the shares beneficially owned.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK COMMON STOCK
--------------------- -----------------------
PERCENT OF PERCENT OF
SHARES CLASS SHARES CLASS
------ ---------- ------ ----------
<S> <C> <C> <C> <C>
J. Peter Mosling, Jr.(1)(2)(3)..................... 226,508 55.8% 236,532 3.0%
P.O. Box 2566, Oshkosh, WI 54903
Stephen P. Mosling(1)(2)(3)(4)..................... 156,458 38.5% 362,052 4.5%
P.O. Box 2566, Oshkosh, WI 54903
Cadence Company(1)................................. 106,695 26.3% 39,242 *
C/O J. Peter Mosling, Jr.
P.O. Box 3146, Oshkosh, WI 54903
J. William Andersen(3)(5).......................... 1,890 * 3,000 *
Robert G. Bohn(3)(7)............................... 0 * 64,888 *
Daniel T. Carroll(3)............................... 0 * 4,000 *
Timothy M. Dempsey(3)(6)(7)........................ 1,980 * 46,620 *
Gen. Frederick M. Franks, Jr....................... 0 * 200 *
Kathleen J. Hempel................................. 0 * 0 *
R. Eugene Goodson(3)(7)(8)......................... 0 * 172,904 2.2%
Michael W. Grebe(3)................................ 0 * 4,000 *
Paul C. Hollowell(3)(7)............................ 0 * 75,156 *
Richard G. Sim..................................... 0 * 1,000 *
Charles L. Szews(3)(7)............................. 0 * 10,647 *
All Directors and executive officers as a group (19
persons)(3)...................................... 351,270 86.5% 1,049,030 13.1%
Franklin Resources, Inc.(9)........................ 0 * 826,800 10.3%
Quest Advisory Corp.(10)........................... 0 * 577,200 7.2%
</TABLE>
- -------------------------
* The amount shown is less than 1% of the outstanding shares of such class.
(1) Cadence Company is a partnership, of which Stephen P. Mosling, J. Peter
Mosling, Jr. and a trust of which Stephen P. Mosling is trustee each are
one-sixth partners. Amounts shown for Stephen P. Mosling reflect beneficial
ownership of one-third of the amounts set forth for Cadence company. As
managing partner of Cadence Company, J. Peter Mosling, Jr. has voting and
dispositive power and is a beneficial owner of all shares owned by the
partnership; amounts shown for J. Peter Mosling, Jr. include 106,695 shares
of Class A Common Stock and 39,242 shares of Common Stock owned
beneficially through Cadence Company.
(2) J. Peter Mosling, Jr. and Stephen P. Mosling are parties to an agreement
relating to Class A Common Stock. Under the agreement, Messrs. Mosling each
have agreed with the Company that, in the event of their deaths or earlier
incapacities, together their shares of Class A Common Stock then will be
exchanged for a like number of shares of Common Stock. Were that to occur,
a consequence would be the automatic conversion, pursuant to the Company's
Articles of Incorporation as restated and amended at the 1997 Annual
Shareholders Meeting, of all outstanding shares of Class A Common Stock on
a share for share basis for shares of Common Stock.
(3) Amounts shown include 3,000 shares each of Common Stock for J. Peter
Mosling, Stephen P. Mosling, J. William Andersen, Daniel T. Carroll and
Michael W. Grebe, 56,167 shares of Common Stock for Robert G. Bohn, 38,917
shares of Common Stock for Paul C. Hollowell, 6,666 shares of Common Stock
63
<PAGE> 68
for Timothy M. Dempsey, 2,833 shares of Common Stock for Charles L. Szews
and 181,082 shares of Common Stock for Directors and executive officers as
a group represented by stock options exercisable within 60 days of January
15, 1998.
(4) Amounts shown include 102,912 shares of Common Stock held by Stephen P.
Mosling as trustee under a trust.
(5) Amounts shown do not include 90 shares of Class A Common Stock owned by
Dulce W. Andersen, Mr. Andersen's wife, as to which he disclaims beneficial
ownership.
(6) Amounts shown include 1,125 shares of Common Stock held by Linda D.
Dempsey, Mr. Dempsey's wife, as Wisconsin Marital Property and 7,170 shares
of Common Stock held by Mr. Dempsey as trustee of trusts for unrelated
parties.
(7) Amounts shown include restricted shares of Common Stock awarded as of
October 31, 1997, as 1997 bonus compensation. Restrictions are against
resale, and are eliminated ratably after one, two and three years.
(8) Mr. Goodson resigned as Chairman of the Board and Chief Executive Officer
of the Company in October 1997.
(9) Amount shown is as described in Schedule 13(g) filing with the Securities
and Exchange Commission on November 10, 1997. Percent of class shown is
without inclusion of options exercisable as depicted in footnote (3),
above. Franklin Resources, Inc. is located at 777 Mariner's Blvd., San
Mateo, California 94403, and manages closed-end investment companies and
other managed investment accounts.
(10) Amount shown is as described in Schedule 13(g) filing with the Securities
and Exchange Commission on February 6, 1997. Percent of class shown is
without inclusion of options exercisable as depicted in footnote (3),
above. Quest Advisory Corp. is located at 1414 Avenue of the Americas, New
York, New York 10019, and manages investment accounts.
CERTAIN TRANSACTIONS
During fiscal year 1997, and continuing through 1999, Oshkosh incurred and
will continue to incur rental expense of $128,400 per year under a lease between
Oshkosh and Cadence Company, a partnership of which Stephen P. Mosling and J.
Peter Mosling, Jr., together with their four sisters, are equal partners. The
lease relates to property and a building used by Oshkosh as a new product
development center. The lease will expire on July 31, 1999. Management believes
that the terms of the lease are at least as favorable as could be obtained in an
arm's length transaction with an unrelated third party.
The Compensation Committee of Oshkosh's Board of Directors extended the
time for exercise of certain stock options held by Stephen P. Mosling and J.
Peter Mosling, Jr. to February 10, 1998. All of such options were exercised on
January 14, 1998.
On April 10, 1997, in conjunction with the termination of the Strategic
Alliance Agreement entered into on June 5, 1995, with Freightliner, Oshkosh
repurchased for the sum of $6,750,000, 350,000 shares of Common Stock and
Warrants for the further purchase of 1,250,000 shares of Common Stock which had
been purchased by Freightliner on June 5, 1995, for the sum of $9,437,500.
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<PAGE> 69
DESCRIPTION OF INDEBTEDNESS
The following sets forth information concerning the Company's indebtedness,
other than the Notes, outstanding immediately following the consummation of the
Transactions.
SENIOR CREDIT FACILITY
The Company has entered into the Senior Credit Facility, pursuant to which
the Company has available a revolving credit facility (the "Revolving Credit
Facility"), and three term loan facilities ("Term Loan A," "Term Loan B" and
"Term Loan C" and, collectively, the "Term Loan Facility"). At the Closing, an
aggregate of $225.0 million under the Term Loan Facility was drawn under the
Senior Credit Facility, consisting of: (a) Term Loan A in the principal amount
$100.0 million, which matures on March 31, 2004; (b) Term Loan B in the
principal amount $62.5 million, which matures on March 31, 2005; and (c) Term
Loan C in the aggregate principal amount $62.5 million, which matures on March
31, 2006. The $100.0 million Revolving Credit Facility, which matures in
approximately six years, is available for working capital and general corporate
purposes, including the issuance of letters of credit, subject to compliance
with certain conditions. At the Closing, on a pro forma basis at December 31,
1997, approximately $13.0 million was drawn and an aggregate of approximately $8
million of letters of credit were issued and outstanding under the Revolving
Credit Facility.
Term Loan A will amortize by $5.0 million in fiscal 1998, $11.0 million in
fiscal 1999, $13.5 million in fiscal 2000, $15.0 million in fiscal 2001, $19.5
million in fiscal 2002 and $24.0 million in fiscal 2003, with the remaining
outstanding balance due in fiscal 2004. Term Loan B and Term Loan C will each
have amortization of $156,250 per quarter, through March 31, 2004 for Term Loan
B and March 31, 2005 for Term Loan C, with the remaining outstanding balance of
Term Loan B and Term Loan C due in quarterly installments through March 31, 2005
and March 31, 2006, respectively.
The initial interest rates applicable to the loans under the Senior Credit
Facility are equal to the Base Rate or, at the Company's election, the IBOR Rate
plus the Applicable Margins. As of the Closing, the Applicable Margins were as
follows:
<TABLE>
<CAPTION>
APPLICABLE MARGINS
---------------------
TYPE OF LOAN BASE RATE IBOR RATE
- ------------ --------- ---------
<S> <C> <C>
Revolving Loan 0.75% 2.00%
Term Loan A 0.75% 2.00%
Term Loan B 1.00% 2.25%
Term Loan C 1.25% 2.50%
</TABLE>
The initial rates for borrowings under the Revolving Credit Facility and
the Term Loan Facility remain in effect until the third business day following
delivery to the Administrative Agent of the Company's financial statements for
the quarter ending June 30, 1998, following which they may be increased or
reduced according to a pricing grid. The Company may elect interest periods of
one, two, three or six months for IBOR borrowings. For IBOR loans, interest is
calculated on the basis of actual days elapsed in a 360-day year and for Base
Rate loans calculated based on the reference rate, interest is calculated on the
number of days elapsed in a 365- or 366-day year, as applicable. Interest on
IBOR loans is payable at the end of each interest period, but not less
frequently than once every three months; interest on Base Rate loans is payable
on the last day of March, June, September and December of each year. The "IBOR
Rate" is the Administrative Agent's inter-bank offered rate for U.S. dollars in
off-shore markets. The "Base Rate" is higher of the Administrative Agent's
reference rate and the federal funds rate plus 0.5%.
All domestic Restricted Subsidiaries of the Company other than MFSI
guarantee the Company's indebtedness under the Senior Credit Facility. All
extensions of credit under the Senior Credit Facility to the Company and the
guarantees of the Subsidiary Guarantors are secured by all existing and
after-acquired personal property of the Company and the Subsidiary Guarantors,
including all outstanding capital stock of the Company's domestic Restricted
Subsidiaries (other than, at the outset of the Transactions, MFSI) and 65% of
the outstanding capital stock of the Company's foreign Restricted Subsidiaries,
and any intercompany
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<PAGE> 70
debt obligations, and subject to exceptions agreed upon, all existing and
after-acquired real property fee and leasehold interests. With certain
exceptions agreed upon, the Company and its Restricted Subsidiaries (other than
MFSI) are prohibited from pledging any of their assets other than under the
Senior Credit Facility.
Under the Senior Credit Facility, the letter of credit fee is equal to the
applicable IBOR margin for the Revolving Credit Facility, plus customary issuing
fees.
Indebtedness under the Senior Credit Facility may be prepaid in whole or in
part without premium or penalty (subject in some cases to related IBOR breakage
costs) and the Lenders' commitments relative thereto reduced or terminated upon
such notice and in such amounts as may be agreed upon. Voluntary prepayments of
the Term Loan Facility will be applied to the Term Loan or Term Loans designated
by the Company to scheduled installments in order of maturity in the 12 months
following the date of such prepayment, with any excess applied pro rata to
scheduled installments of the designated Term Loans.
The Company is required to make mandatory prepayments with respect to
excess cash flow (defined in the Senior Credit Facility), in an amount equal to
50.0% of such excess cash flow, payable on each January 15, beginning January
15, 1999.
The Company is required to make mandatory prepayments with respect to all
proceeds of asset sales to the extent not applied to buy certain other fixed
assets.
The Senior Credit Facility contains customary and appropriate
representations and warranties, including without limitation those relating to
due organization and authorization, no conflicts, financial condition, no
material adverse changes, title to properties, liens, litigation, payment of
taxes, compliance with laws, environmental liabilities and full disclosure.
The conditions to all borrowings and issuances of letters of credit include
requirements relating to prior written notice of borrowing or issuance, the
accuracy of representations and warranties, and the absence of any default or
potential event of default, and will otherwise be customary and appropriate for
financings of this type.
The Senior Credit Facility also contains customary affirmative and negative
covenants (including, where appropriate, certain exceptions and baskets mutually
agreed upon), including but not limited to furnishing information and
limitations on other indebtedness, liens, investments, guarantees, restricted
payments, mergers and acquisitions, sales of assets, capital expenditures,
leases, and affiliate transactions. The Senior Credit Facility also contains the
following financial covenants: minimum net worth; minimum fixed charge coverage
ratio; and maximum ratio of total debt to EBITDA.
Events of default under the Senior Credit Facility are usual and customary,
including without limitation, those relating to: (i) non-payment of interest,
principal, fees or letter of credit obligations payable under the Senior Credit
Facility; (ii) non-performance of certain covenants; (iii) cross-default or
cross-acceleration to other material debt of the Company and its subsidiaries;
(iv) bankruptcy or insolvency; (v) unsatisfied judgments in excess of specified
amounts; (vi) impairment of security interests in collateral; (vii) invalidity
of guarantees; and (viii) materially inaccurate or false representations or
warranties.
LEASE FINANCING FACILITY
The Leasing Partner entered into a general partnership with BALCAP, an
affiliate of the Initial Purchaser and Bank of America, effective February 26,
1998. The Leasing Partnership offers lease financing to customers of the Company
and administers existing lease transactions contributed to the partnership by
both partners. MFSI assigned to the Leasing Partner, which then contributed to
the Leasing Partnership, all of its current lease asset investments, which as of
November 30, 1997 had an aggregate total equipment value of approximately $122
million and associated liabilities of approximately $114 million. BALCAP has
contributed approximately $4.1 million of unencumbered lease assets to the
Leasing Partnership. BALCAP's initial net equity interest in the Leasing
Partnership therefore totals approximately 30.0% while the Leasing Partner's
interest is approximately 70.0%. Both the Leasing Partner and BALCAP are general
partners and the only partners of the Leasing Partnership. BALCAP acts as
managing partner of the Leasing Partnership. The
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Leasing Partner acts as the tax matters partner of the Leasing Partnership and
also acts as the portfolio partner of the Leasing Partnership. The portfolio
partner services the Lease Assets conveyed by the Leasing Partner to the Leasing
Partnership and also services new Lease Assets originated by the Leasing
Partnership.
The Leasing Partner has certain partnership obligations to BALCAP,
including the Company's obligation to offer future Lease Transactions to the
Leasing Partnership during the term of the Leasing Partnership. The Company will
indemnify the Leasing Partnership against losses relating to breaches of certain
representations and warranties made in connection with the conveyance of Lease
Assets to the Leasing Partnership by the Leasing Partner, as well as losses
relating to the performance of the Leasing Partner's obligations as the tax
matters partner and as portfolio partner.
The Leasing Partnership manages the contributed assets and liabilities and
engages in new vendor lease business providing financing to customers of the
Company. The partners finance purchases of trucks to be leased to user-customers
by investing equity in an amount equal to approximately 11.0% to 14.0% of the
cost of the trucks. Banks and other lenders lend to the Leasing Partnership the
remaining percentage, with recourse solely to the Leasing Partnership, secured
by a pledge of the user-leases. Each partner funds one-half of the equity needed
to finance the new truck purchases, and each partner is allocated its
proportionate share of Leasing Partnership cash flow and taxable income.
Indebtedness under the Lease Financing Facility is secured by the underlying
leases and assets of, and is recourse to, the Leasing Partnership; such
indebtedness is off-balance sheet and non-recourse to the Company.
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DESCRIPTION OF THE NEW NOTES
GENERAL
The New Notes will be issued pursuant to the same Indenture (the
"Indenture") among the Company, the Subsidiary Guarantors and Firstar Trust
Company, as trustee (the "Trustee"), under which the Notes were issued. The
terms of the New Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (the "Trust
Indenture Act"). The New Notes are subject to all such terms, and Holders of New
Notes are referred to the Indenture and the Trust Indenture Act for a statement
thereof. The following summary of the material provisions of the Indenture does
not purport to be complete and is qualified by reference to the Indenture,
including the definitions therein of certain terms used below. Copies of the
Indenture and Registration Rights Agreement are available as set forth below
under "-- Additional Information". The definitions of certain terms used in the
following summary are set forth below under "-- Certain Definitions." For
purposes of this summary, the term "Company" refers only to Oshkosh Truck
Corporation and not to any of its Subsidiaries.
The New Notes will rank senior in right of payment to all subordinated
Indebtedness of the Company issued in the future, if any. The New Notes will be
general unsecured obligations of the Company and will be subordinated in right
of payment to all current and future Senior Debt. As of December 31, 1997, on a
pro forma basis giving effect to the Transactions, the Company would have had
Senior Debt of approximately $263.4 million. The Indenture permits the
incurrence of additional Senior Debt in the future.
The operations of the Company are conducted in part through its
Subsidiaries, and the Company may, therefore, be dependent upon the cash flow of
its Subsidiaries to meet its debt obligations, including its obligations under
the New Notes. As of the date of this Prospectus, Nations Casualty Insurance,
Inc., a captive insurance company, and Oshkosh/McNeilus Financial Services,
Inc., a newly established Leasing Subsidiary, are the Company's only
Unrestricted Subsidiaries. MFSI, the Company's existing Leasing Subsidiary, is a
Restricted Subsidiary as of the date of this Prospectus, but is treated as if it
were an Unrestricted Subsidiary for purposes of certain of the restrictive
covenants set forth in the Indenture. Unrestricted Subsidiaries are subject to
many of the restrictive covenants set forth in the Indenture. Under certain
circumstances, the Company will be able to designate current or future
Subsidiaries, including MFSI, as Unrestricted Subsidiaries.
PRINCIPAL, MATURITY AND INTEREST
The New Notes will be issued in an aggregate principal amount of up to
$100.0 million on or about the Expiration Date, and the Company may, subject to
the provisions of the Indenture, issue up to $50.0 million of additional New
Notes from time to time in the future. The New Notes will mature on March 1,
2008. Interest on the New Notes will accrue at the rate of 8 3/4% per annum and
will be payable semi-annually in arrears on March 1 and September 1, commencing
on September 1, 1998, to Holders of record on the immediately preceding February
15 and August 15. Interest on the New Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
February 26, 1998. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months. Principal, premium, Liquidated Damages, if
any, and interest on the New Notes will be payable at the office or agency of
the Company maintained for such purpose within the City and State of New York
or, at the option of the Company, payment of interest and Liquidated Damages may
be made by check mailed to the Holders of the New Notes at their respective
addresses set forth in the register of Holders of New Notes; provided that all
payments of principal, premium, interest and Liquidated Damages with respect to
Holders of New Global Notes and New Notes the Holders of which have given wire
transfer instructions to the Company will be required to be made by wire
transfer of immediately available funds to the accounts specified by the Holders
thereof. Until otherwise designated by the Company, the Company's office or
agency in New York will be the office of the Trustee maintained for such
purpose. The New Notes will be issued in denominations of $1,000 and integral
multiples thereof.
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SUBSIDIARY GUARANTEES
The Company's payment obligations under the New Notes will be jointly and
severally guaranteed (the "Subsidiary Guarantees") by the Subsidiary Guarantors.
The Subsidiary Guarantee of each Subsidiary Guarantor will be subordinated to
the prior payment in full in cash or Cash Equivalents of all Senior Debt of such
Subsidiary Guarantor, which would include approximately $2.9 million of Senior
Debt outstanding as of December 31, 1997, and the amounts for which the
Subsidiary Guarantors are liable under the guarantees issued from time to time
with respect to Senior Debt. The obligations of each Subsidiary Guarantor under
its Subsidiary Guarantee are limited with the intention that such Subsidiary
Guarantee not constitute a fraudulent conveyance under applicable law. See,
however, "Risk Factors -- Fraudulent Conveyance Matters."
The Indenture provides that no Subsidiary Guarantor may consolidate with or
merge with or into (whether or not such Subsidiary Guarantor is the surviving
Person) another corporation, Person or entity, whether or not affiliated with
such Subsidiary Guarantor unless: (i) subject to the provisions of the following
paragraph, the Person formed by or surviving any such consolidation or merger
(if other than such Subsidiary Guarantor) assumes all the obligations of such
Subsidiary Guarantor, pursuant to a supplemental indenture in form and substance
reasonably satisfactory to the Trustee, under the New Notes, the Indenture, the
Registration Rights Agreement and the Subsidiary Guarantees; (ii) immediately
after giving effect to such transaction, no Default or Event of Default exists;
and (iii) the Company would be permitted by virtue of the Company's pro forma
Fixed Charge Coverage Ratio, immediately after giving effect to such
transaction, to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the covenant described below under
the caption "Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock."
The Indenture provides that in the event of a sale or other disposition of
all of the assets of any Subsidiary Guarantor, by way of merger, consolidation
or otherwise, or a sale or other disposition of all of the capital stock of any
Subsidiary Guarantor, then such Subsidiary Guarantor (in the event of a sale or
other disposition, by way of such a merger, consolidation or otherwise, of all
of the capital stock of such Subsidiary Guarantor) or the corporation acquiring
the property (in the event of a sale or other disposition of all of the assets
of such Subsidiary Guarantor) will be released and relieved of any obligations
under its Subsidiary Guarantee; provided that the Net Proceeds of such sale or
other disposition are applied in accordance with the applicable provisions of
the Indenture. See "Redemption or Repurchase at Option of Holders -- Asset
Sales."
SUBORDINATION
The payment of principal of, premium, Liquidated Damages, if any, and
interest and other Obligations on the New Notes will be subordinated in right of
payment, as set forth in the Indenture, to the prior payment in full in cash or
Cash Equivalents of all Senior Debt, whether outstanding on the date of the
Indenture or thereafter incurred.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities, the holders of Senior Debt will be entitled to receive
payment in full in cash or Cash Equivalents of all Obligations in respect of
such Senior Debt (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Debt) before the
Holders of the New Notes will be entitled to receive any payment of cash,
properties or securities, with respect to the New Notes, and until all
Obligations with respect to Senior Debt are paid in full in cash or Cash
Equivalents, any distribution to which the Holders of the New Notes would be
entitled shall be made to the holders of Senior Debt (except that Holders of the
New Notes may receive and retain Permitted Junior Securities and payments made
from the trust described under the caption "-- Legal Defeasance and Covenant
Defeasance").
The Company also may not directly or indirectly, (x) make any payment of
cash, properties or securities, upon or in respect of the New Notes (except in
Permitted Junior Securities or from the trust described under the caption "--
Legal Defeasance and Covenant Defeasance") or (y) acquire any of the New Notes
(except
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in exchange for Permitted Junior Securities) if: (i) a default in the payment of
the principal of, premium, if any, interest or other Obligations on Significant
Senior Debt occurs and is continuing or (ii) any other default occurs and is
continuing with respect to Designated Senior Debt that permits holders of the
Designated Senior Debt as to which such other default relates to accelerate its
maturity and the Trustee receives a notice of such default (a "Payment Blockage
Notice") from the holders (or their Representative, if applicable) of any
Designated Senior Debt. Payments on the New Notes may and shall be resumed: (a)
in the case of a payment default, upon the date on which such default is cured
or waived and (b) in case of a nonpayment default, the earlier of the date on
which such nonpayment default is cured or waived or 179 days after the date on
which the applicable Payment Blockage Notice is received, unless the maturity of
any Designated Senior Debt has been accelerated in which case (a) above shall
become applicable. No new period of payment blockage may be commenced pursuant
to (ii) above unless and until: (i) 360 days have elapsed since the initial
effectiveness of the immediately prior Payment Blockage Notice and (ii) all
scheduled payments of principal, premium and Liquidated Damages, if any, and
interest on the New Notes that have come due have been paid in full in cash. No
nonpayment default that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice unless such default shall have been cured or
waived for a period of not less than 180 days.
The Indenture further requires that the Company promptly notify holders of
Senior Debt if payment of the New Notes is accelerated because of an Event of
Default.
As a result of the subordination provisions described above, in the event
of a liquidation or insolvency, Holders of the New Notes may recover less
ratably than other creditors of the Company, including holders of Senior Debt.
See "Risk Factors -- Subordination." The Indenture limits, subject to certain
financial tests, the amount of additional Indebtedness, including Senior Debt,
that the Company and its subsidiaries can incur. See "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock."
OPTIONAL REDEMPTION
The New Notes will not be redeemable at the Company's option prior to March
1, 2003. Thereafter, the New Notes will be subject to redemption at any time at
the option of the Company, in whole or in part, upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the applicable redemption date, if
redeemed during the twelve-month period beginning on March 1 of the years
indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2003........................................................ 104.375%
2004........................................................ 102.917%
2005........................................................ 101.458%
2006 and thereafter......................................... 100.000%
</TABLE>
Notwithstanding the foregoing, at any time prior to March 1, 2001, the
Company may on any one or more occasions redeem up to 35% of the aggregate
principal amount of New Notes originally issued under the Indenture at a
redemption price of 108.750% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date,
with the net cash proceeds of one or more public offerings of common stock of
the Company; provided that New Notes of an aggregate principal amount of at
least 65% of the aggregate principal amount of Notes issued on the date of the
Indenture remain outstanding immediately after the occurrence of such redemption
(excluding New Notes held by the Company and its Subsidiaries); and provided,
further, that such redemption shall occur within 45 days of the date of the
closing of such public offering.
SELECTION AND NOTICE
If less than all of the New Notes are to be redeemed at any time, selection
of New Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange,
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if any, on which the New Notes are listed, or, if the New Notes are not so
listed, on a pro rata basis, by lot or by such method as the Trustee shall deem
fair and appropriate; provided that no New Notes of $1,000 or less shall be
redeemed in part. Notices of redemption shall be mailed by first class mail at
least 30 but not more than 60 days before the redemption date to each Holder of
New Notes to be redeemed at its registered address. Notices of redemption may
not be conditional. If any New Note is to be redeemed in part only, the notice
of redemption that relates to such New Note shall state the portion of the
principal amount thereof to be redeemed. A new New Note in principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original New Note. New Notes called for
redemption become due on the date fixed for redemption. On and after the
redemption date, interest ceases to accrue on New Notes or portions of them
called for redemption.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder of New Notes will
have the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's New Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer price in
cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase New Notes on the date specified in such notice, which date shall
be no earlier than 30 days and no later than 60 days from the date such notice
is mailed (the "Change of Control Payment Date"), pursuant to the procedures
required by the Indenture and described in such notice. The Company will comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the New Notes as
a result of a Change of Control.
On the Change of Control Payment Date, the Company will, to the extent
lawful: (i) accept for payment all New Notes or portions thereof properly
tendered pursuant to the Change of Control Offer; (ii) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all New
Notes or portions thereof so tendered; and (iii) deliver or cause to be
delivered to the Trustee the New Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of New Notes or portions
thereof being purchased by the Company. The Paying Agent will promptly mail to
each Holder of New Notes so tendered the Change of Control Payment for such New
Notes, and the Trustee will promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new New Note equal in principal
amount to any unpurchased portion of the New Notes surrendered, if any; provided
that each such new New Note will be in a principal amount of $1,000 or an
integral multiple thereof. The Company will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
The Change of Control provisions described above will be applicable whether
or not any other provisions of the Indenture are applicable. Except as described
above with respect to a Change of Control, the Indenture does not contain
provisions that permit the Holders of the New Notes to require that the Company
repurchase or redeem the New Notes in the event of a takeover, recapitalization
or similar transaction.
The Senior Credit Agreement prohibits the Company from purchasing any New
Notes prior to their maturity and also provides that certain change of control
events with respect to the Company would constitute a default thereunder. Any
future credit agreements or other agreements relating to Senior Debt to which
the Company becomes a party may contain similar restrictions and provisions. The
Indenture provides that, prior to complying with the provisions of this
covenant, but in any event within 90 days following a Change of Control, the
Company will either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt to
permit the repurchase of New Notes required by this covenant. If the Company
does not obtain such a consent or repay such borrowings, the Company will remain
prohibited from purchasing New Notes. In such case, the Company's failure to
purchase tendered New Notes would constitute an Event of Default under the
Indenture which would, in turn, constitute a
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default under the Senior Credit Agreement. In such circumstances, the
subordination provisions in the Indenture would likely restrict payments to the
Holders of New Notes. There can be no assurance that upon a Change in Control
the Company would have sufficient assets to satisfy its obligation to purchase
all of the New Notes that might be delivered by Holders seeking to exercise
their repurchase right and any repurchase obligation under any Senior Debt then
outstanding.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the Company and
purchases all New Notes validly tendered and not withdrawn under such Change of
Control Offer.
The definition of Change of Control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"
of the assets of the Company and its Subsidiaries taken as a whole. Although
there is a developing body of case law interpreting the phrase "substantially
all," there is no precise established definition of the phrase under applicable
law. Accordingly, the ability of a Holder of New Notes to require the Company to
repurchase such New Notes as a result of a sale, lease, transfer, conveyance or
other disposition of less than all of the assets of the Company and its
Subsidiaries taken as a whole to another Person or group may be uncertain.
ASSET SALES
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, consummate an Asset Sale unless: (i) the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee) of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 75% of the
consideration therefor received by the Company or such Subsidiary is in the form
of cash; provided that the amount of (x) any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet), of the
Company or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the New Notes or any
guarantee thereof) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability and (y) any securities, notes or
other obligations received by the Company or any such Subsidiary from such
transferee that are contemporaneously (subject to ordinary settlement periods)
converted by the Company or such Restricted Subsidiary into cash (to the extent
of the cash received), shall be deemed to be cash for purposes of this
provision.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, (a) to permanently
reduce Senior Debt (or, if such Senior Debt is revolving Indebtedness under a
Credit Facility, to permanently reduce any related commitments of lenders under
the Senior Debt (provided that such reductions shall have no effect on the
amount of Indebtedness permitted to be incurred pursuant to clause (ii)(b) of
the second paragraph of the covenant described under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock")), or
(b) to the acquisition of a majority of the assets of, or a majority of the
Voting Stock of, another Permitted Business, the making of a capital expenditure
or the acquisition of other assets that are not classified as current assets
under GAAP and are used or useful in a Permitted Business. Pending the final
application of any such Net Proceeds, the Company may temporarily reduce
revolving credit borrowings or otherwise invest such Net Proceeds in any manner
that is not prohibited by the Indenture. Any Net Proceeds from Asset Sales that
are not applied or invested as provided in the first sentence of this paragraph
will be deemed to constitute "Excess Proceeds." When the aggregate amount of
Excess Proceeds exceeds $10.0 million, the Company will be required to make an
offer (pro rata in proportion to the principal amount (or accreted value, if
applicable) outstanding in respect of any asset sale offer required by the terms
of any pari passu Indebtedness incurred in accordance with the Indenture) to all
Holders of New Notes (an "Asset Sale Offer") to purchase the maximum principal
amount of New Notes that may be purchased out of the Excess Proceeds, at an
offer price in cash in an amount equal to 100% of the principal amount thereof
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the
date of purchase, in accordance with the procedures set forth in the Indenture.
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To the extent that any Excess Proceeds remain after consummation of an Asset
Sale Offer, the Company may use such Excess Proceeds for any purpose not
otherwise prohibited by the Indenture. If the aggregate principal amount of New
Notes tendered into such Asset Sale Offer surrendered by Holders thereof (and
any pari passu Indebtedness, as aforesaid) exceeds the amount of Excess
Proceeds, the Trustee shall select the New Notes to be purchased on a pro rata
basis. Upon completion of such offer to purchase, the amount of Excess Proceeds
shall be reset at zero.
CERTAIN COVENANTS
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt) and that the Company will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that the Company may
incur Indebtedness (including Acquired Debt) or issue shares of Disqualified
Stock and any Subsidiary Guarantor may incur Indebtedness or issue preferred
stock if the Fixed Charge Coverage Ratio for the Company's most recently ended
four full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock or preferred stock is issued would have been at least
2.0 to 1, determined on a pro forma basis (including a pro forma application of
the net proceeds therefrom), as if the additional Indebtedness had been
incurred, or the Disqualified Stock or preferred stock had been issued, as the
case may be, at the beginning of such four-quarter period.
The provisions of the first paragraph of this covenant will not apply to
the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by the Company and the Subsidiary Guarantors of
term Indebtedness under the Senior Credit Agreement (or, if the Senior
Credit Agreement has matured or been terminated or repaid in whole or in
part, any other Credit Facility); provided that the aggregate principal
amount of all term Indebtedness outstanding under the Credit Facilities
after giving effect to such incurrence does not exceed the greater of (a)
the aggregate amount of term Indebtedness borrowed under the Senior Credit
Agreement on the date of the Indenture less the aggregate amount of all
repayments, optional or mandatory, of the principal of any term
Indebtedness under the Senior Credit Agreement (other than payments that
are immediately reborrowed) that have been made since the date of the
Indenture and (b) $30.0 million;
(ii) (a) the incurrence by the Company and the Subsidiary Guarantors
of revolving Indebtedness and letters of credit pursuant to the Senior
Credit Agreement; provided that the aggregate principal amount of all
revolving Indebtedness (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the Company
and its Restricted Subsidiaries thereunder) at any time outstanding under
the Senior Credit Agreement pursuant to this subsection (ii)(a) after
giving effect to such incurrence does not exceed $100.0 million, less the
aggregate amount of all Net Proceeds of Asset Sales applied to permanently
reduce revolving commitments with respect to the Senior Credit Agreement
pursuant to the covenant described above under the caption "-- Asset
Sales"; (b) the incurrence by the Company and the Subsidiary Guarantors of
additional revolving Indebtedness and letters of credit pursuant to the
Credit Facilities; provided that the aggregate principal amount of all such
additional revolving Indebtedness (with letters of credit being deemed to
have a principal amount equal to the maximum potential liability of the
Company and its Subsidiary Guarantors thereunder) at any time outstanding
under all Credit Facilities after giving effect to each incurrence does not
exceed (i) the Borrowing Base minus (ii) $100.0 million (or such lesser
amount as may then be the maximum aggregate commitments under the Senior
Credit Agreement); and (c) the incurrence by Foreign Subsidiaries of
revolving Indebtedness and letters of credit pursuant to Credit Facilities;
provided that the aggregate principal amount of all revolving Indebtedness
(with letters of credit being deemed to have a
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principal amount equal to the maximum potential liability of the Foreign
Subsidiaries thereunder) at any \time outstanding to Foreign Subsidiaries
under all Credit Facilities after giving effect to such incurrence does not
exceed the greater of (i) $15.0 million and (ii) the Foreign Borrowing
Base;
(iii) the incurrence by the Company and the Subsidiary Guarantors of
Indebtedness under any Floor Plan Financing Facility; provided that the
aggregate principal amount of all Indebtedness at any time outstanding
under all Floor Plan Financing Facilities after giving effect to such
incurrence does not exceed the total cost of the vehicles and equipment
securing such Indebtedness;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of the Existing Indebtedness;
(v) the incurrence by the Company of Indebtedness represented by the
New Notes and the incurrence by the Subsidiary Guarantors of the Subsidiary
Guarantees;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Company or a Subsidiary Guarantor, in an aggregate
principal amount not to exceed $25.0 million at any time outstanding;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace Indebtedness
(other than intercompany Indebtedness) that was permitted by the Indenture
to be incurred pursuant to the preceding paragraph or clause (iv) or (v) of
this paragraph;
(viii) the incurrence by the Company or any of the Subsidiary
Guarantors of intercompany Indebtedness between or among the Company and
any of the Subsidiary Guarantors or the incurrence by Wholly Owned
Restricted Subsidiaries of intercompany Indebtedness between or among
Wholly Owned Restricted Subsidiaries; provided, however, that: (i) if the
Company is the obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all Obligations with
respect to the Senior Debt and the New Notes; and (ii)(A) any subsequent
issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Subsidiary
Guarantor and (B) any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Subsidiary Guarantor shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by
the Company or such Subsidiary Guarantor, as the case may be, that was not
permitted by this clause (viii);
(ix) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of
fixing or hedging: (i) interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding; (ii) the value of foreign currencies purchased or received by
the Company in the ordinary course of business, or (iii) commodities
purchased in the ordinary course of business for use in a Permitted
Business and not for speculation;
(x) the guarantee by the Company or any of the Subsidiary Guarantors
of Indebtedness of the Company or a Subsidiary Guarantor that was permitted
to be incurred by another provision of this covenant;
(xi) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness incurred in respect of performance, surety and
similar bonds and letters of credit (and reimbursement obligations with
respect thereto) provided by the Company and the Restricted Subsidiaries in
the ordinary course of business for commercial purposes and not for or
related to money borrowed;
(xii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness for letters of credit relating to workers'
compensation claims and self-insurance or similar requirements in the
ordinary course of business;
(xiii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness arising from guarantees of Indebtedness of the
Company or any of its Restricted Subsidiaries or other
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agreements of the Company or any of its Restricted Subsidiaries providing
for indemnification, adjustment of purchase price or similar obligations,
in each case, incurred or assumed in connection with the disposition of any
business, assets or Subsidiary, other than guarantees of Indebtedness
incurred by any person acquiring all or any portion of such business,
assets or Subsidiary for the purpose of financing such acquisition,
provided that the maximum aggregate liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds actually received
by the Company and its Subsidiaries in connection with such disposition;
(xiv) the incurrence by a Leasing Subsidiary of Indebtedness in
connection with a Leasing Transaction;
(xv) the incurrence by the Company or any Restricted Subsidiary of
Indebtedness in connection with the acquisition of assets or a new
Subsidiary Guarantor; provided such Indebtedness was incurred by the prior
owner of such assets or such Subsidiary Guarantor prior to such acquisition
by the Company or one of its Subsidiary Guarantors and was not incurred in
connection with, or in contemplation of, such acquisition by the Company or
a Subsidiary Guarantor; and provided further that the principal amount (or
accreted value, as applicable) of such Indebtedness, together with any
other outstanding Indebtedness secured pursuant to this clause (xv) and any
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (xv), does not exceed
$10.0 million; and
(xvi) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (xvi), not to exceed
$20.0 million; provided, however, that the principal amount (or accreted
value, as applicable) of Indebtedness of Restricted Subsidiaries that are
not Subsidiary Guarantors, at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (xvi), does not exceed $5.0
million.
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xvi) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant. Accrual of interest, accretion or
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the form of additional shares of
the same class of Disqualified Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of this covenant;
provided, in each such case, that the amount thereof is included in Fixed
Charges of the Company as accrued. Nothing in this covenant shall prohibit the
incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt
(excluding Indebtedness owed by such Unrestricted Subsidiary to the Company);
provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt
of an Unrestricted Subsidiary, such event shall be deemed to constitute an
incurrence of Indebtedness by a Restricted Subsidiary of the Company.
RESTRICTED PAYMENTS
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly: (i) declare or pay
any dividend or make any other payment or distribution on account of the
Company's or any of its Restricted Subsidiaries' Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Company or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Company's or any of its Restricted Subsidiaries' Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company or to
the Company or a Restricted Subsidiary of the Company); (ii) purchase, redeem or
otherwise acquire or retire for value (including, without limitation, in
connection with any merger or consolidation involving the Company) any Equity
Interests of the Company, (iii) make any payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
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Indebtedness that is subordinated to the New Notes, except a payment of interest
or principal at Stated Maturity; or (iv) make any Restricted Investment (all
such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as "Restricted Payments"), unless, at the time of
and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
the covenant described above under caption "-- Incurrence of Indebtedness
and Issuance of Preferred Stock"; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Subsidiaries after
the date of the Indenture (excluding Restricted Payments permitted by
clauses (ii), (iii) and (iv) of the next succeeding paragraph), is less
than the sum, without duplication, of (i) 50% of the Consolidated Net
Income of the Company for the period (taken as one accounting period) from
the beginning of the first fiscal month commencing after the date of the
Indenture to the end of the Company's most recently ended fiscal quarter
for which internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is
a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net
cash proceeds received by the Company since the date of the Indenture as a
contribution to its common equity capital or from the issue or sale of
Equity Interests of the Company (other than Disqualified Stock) or from the
issue or sale of Disqualified Stock or debt securities of the Company that
have been converted into such Equity Interests (other than Equity Interests
(or Disqualified Stock or convertible debt securities) sold to a Subsidiary
of the Company), plus (iii) to the extent that any Restricted Investment
that was made after the date of the Indenture is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (A) the cash return of capital
with respect to such Restricted Investment (less the cost of disposition,
if any) and (B) the initial amount of such Restricted Investment, plus (iv)
50% of any cash dividends or other cash distributions received by the
Company or a Restricted Subsidiary that is a Subsidiary Guarantor after the
date of the Indenture from MFSI or an Unrestricted Subsidiary of the
Company (other than dividends or distributions made by Nations Casualty
Insurance, Inc.), to the extent that such dividends or other cash
distributions were not otherwise included in Consolidated Net Income of the
Company for such period, plus (v) to the extent that any Unrestricted
Subsidiary designated as such after the date of the Indenture is
redesignated as a Restricted Subsidiary after the date of the Indenture,
the lesser of (A) the fair market value of the Company's Investment in such
Subsidiary as of the date of such redesignation or (B) such fair market
value as of the date on which such Subsidiary was originally designated as
an Unrestricted Subsidiary, plus (vi) after the sale or liquidation of
Nations Casualty Insurance, Inc., 50% of the excess of (A) any cash
dividends or other cash distributions received by the Company or a
Subsidiary Guarantor after the date of the Indenture from Nations Casualty
Insurance, Inc. over (B) any Investment in Nations Casualty Insurance, Inc.
permitted pursuant to clause (h) of the definition of Permitted
Investments, plus (vii) other Restricted Payments in an aggregate amount
not to exceed $5.0 million.
The foregoing provisions will not prohibit: (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at said date of
declaration such payment would have complied with the provisions of the
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
in exchange for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Subsidiary of the Company) of, other Equity Interests of
the Company (other than any Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause (c)
(ii) of the preceding paragraph; (iii) the defeasance, redemption, repurchase or
other acquisition of subordinated Indebtedness with the net cash proceeds from
an incurrence of Permitted Refinancing Indebtedness; (iv) the payment of any
dividend by a Subsidiary of the Company to the holders of its common Equity
Interests on a pro rata basis; and (v) the repurchase, redemption or other
acquisition or
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retirement for value of any Equity Interests of the Company or any Subsidiary of
the Company held by any member of the Company's (or any of its Subsidiaries')
management pursuant to any management equity subscription agreement or stock
option agreement in effect as of the date of the Indenture; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $1.0 million in any twelve-month period and
shall not at any time exceed $5.0 million in the aggregate and no Default or
Event of Default shall have occurred and be continuing immediately after such
transaction; (vi) Investments in securities not constituting cash or Cash
Equivalents and received in connection with an Asset Sale made pursuant to the
provisions of the covenant described under "-- Certain Covenants -- Limitation
on Asset Sales" above or any other disposition of assets not constituting an
Asset Sale by reason of the threshold contained in the definition thereof; and
(vii) repurchases of Equity Interests deemed to occur upon exercise of stock
options if such Equity Interests represent a portion of the exercise price of
such options.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default; provided
that in no event shall all or substantially all of the business currently
operated by the Company, McNeilus Truck & Manufacturing Inc., or Pierce
Manufacturing Inc. be transferred to or held by an Unrestricted Subsidiary. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated will be deemed to be Restricted Payments at the
time of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of this covenant. All such outstanding
Investments will be deemed to constitute Investments in an amount equal to the
fair market value of such Investments at the time of such designation. Such
designation will only be permitted if such Restricted Payment would be permitted
at such time and if such Restricted Subsidiary otherwise meets the definition of
an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Subsidiary, as the
case may be, pursuant to the Restricted Payment. The fair market value of any
non-cash Restricted Payment shall be determined by the Board of Directors whose
resolution with respect thereto shall be delivered to the Trustee, such
determination to be based upon an opinion or appraisal issued by an accounting,
appraisal or investment banking firm of national standing if such fair market
value exceeds $5.0 million. Not later than five Business Days after making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by the covenant "Restricted
Payments" were computed, together with a copy of any fairness opinion or
appraisal required by the Indenture.
LIENS
The Indenture provides that the Company will not, and will not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer
to exist any Lien securing Indebtedness or trade payables on any asset now owned
or hereafter acquired, or any income or profits therefrom or assign or convey
any right to receive income therefrom, except Permitted Liens.
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to: (i)(a) pay dividends or make any
other distributions to the Company or any of its Restricted Subsidiaries (1) on
its Capital Stock or (2) with respect to any other interest or participation in,
or measured by, its profits, or (b) pay any indebtedness owed to the Company or
any of its Restricted Subsidiaries; (ii) make loans or advances to the Company
or any of its Restricted Subsidiaries; or (iii) transfer any of its properties
or assets to the Company or any of its Restricted Subsidiaries. However, the
foregoing restrictions will not apply to encumbrances or restrictions existing
under or by reason of (a) Existing Indebtedness or the Senior Credit Agreement
as in effect as of the date of the Indenture, and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings thereof, provided that the provisions contained in such amendments,
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modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive, taken as a whole, with
respect to such dividend and other payment restrictions than those contained in
the Senior Credit Agreement or the agreement governing such Existing
Indebtedness, as applicable, as in effect on the date of the Indenture, (b) the
Indenture and the New Notes, (c) applicable law, (d) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in contemplation
of such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the Indenture to
be incurred by the acquiring Company or Restricted Subsidiary, as applicable, at
the time of such acquisition, (e) customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices, (f) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so acquired, (g) any agreement for the sale of a
Restricted Subsidiary that restricts distributions by that Restricted Subsidiary
pending its sale, (h) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those contained in
the agreements governing the Indebtedness being refinanced, (i) secured
Indebtedness otherwise permitted to be incurred pursuant to the provisions of
the covenant described above under the caption "-- Liens" that limits the right
of the debtor to dispose of the assets securing such Indebtedness, (j) any
Indebtedness incurred by a Foreign Subsidiary pursuant to clause (ii)(c) of the
second paragraph of the covenant described above under the caption "--
Indebtedness and Issuance of Preferred Stock," (k) provisions with respect to
the disposition or distribution of assets or property in an Asset Sale (or in a
transaction which, but for it size, would be an Asset Sale), or in joint venture
agreements and other similar agreements entered into in the ordinary course of
business and (l) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.
MERGER, CONSOLIDATION, OR SALE OF ASSETS
The Indenture provides that the Company may not consolidate or merge with
or into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions, to another
corporation, Person or entity unless: (i) the Company is the surviving
corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia; (ii) the entity or Person formed
by or surviving any such consolidation or merger (if other than the Company) or
the entity or Person to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made assumes all the obligations of the
Company under the Registration Rights Agreement, the New Notes and the Indenture
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee; (iii) immediately after such transaction no Default or Event of Default
exists; and (iv) except in the case of a merger of the Company with or into a
Wholly Owned Restricted Subsidiary of the Company, the Company or the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made will, at the time of such transaction and
after giving pro forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph of the covenant described above under the
caption "-- Incurrence of Indebtedness and Issuance of Preferred Stock."
TRANSACTIONS WITH AFFILIATES
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer
or otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement,
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understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), unless: (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Subsidiary with an unrelated Person; and (ii)
the Company delivers to the Trustee (a) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $1.0 million, a resolution of the Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of Directors
and (b) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million, an
opinion as to the fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment banking
firm of national standing. Notwithstanding the foregoing, the following items
shall not be deemed to be Affiliate Transactions: (i) any employment or
severance agreement and any amendment thereto entered into by the Company or any
of its Subsidiaries in the ordinary course of business; (ii) transactions
between or among the Company and/or its Restricted Subsidiaries and transactions
between or among the Company or any Restricted Subsidiary and any Leasing
Subsidiary in the ordinary course of business (including the contribution of
overhead costs consistent with past practice and in the ordinary course of
business); (iii) undertakings customary in lease securitization transactions for
the benefit of any Leasing Subsidiary (whether undertaken in connection with a
lease securitization or other transaction involving any Leasing Subsidiary),
including Leasing Subsidiary Undertakings and guarantees thereof; (iv) transfers
of Lease Assets by MFSI to any Leasing Subsidiary (provided that such transfer
includes an assumption of MFSI's Indebtedness in respect of such Lease Assets
and a release of MFSI's liability therefor); (v) payment of reasonable
directors' fees and benefits, provided that the amount of such fees and benefits
paid to any Affiliate does not exceed the amount of such fees and benefits paid
to any Person who is not otherwise an Affiliate of the Company; (vi) Restricted
Payments that are permitted by the provisions of the Indenture described above
under the caption "-- Restricted Payments"; (vii) provision of officers' and
directors' indemnification and insurance in the ordinary course of business to
the extent permitted by applicable law; (viii) payment of employee salaries,
bonuses and employee benefits in the ordinary course of business (including
payment of commissions on behalf of any Leasing Subsidiary by the Company or any
of its Restricted Subsidiaries consistent with past practices and in the
ordinary course of business) and (ix) payment of amounts owing under the
existing lease between the Company and Cadence Company and under any amendment
or extension thereof so long as any such amendment or extension is not
disadvantageous to the Holders of the Notes in any material respect.
SALE AND LEASEBACK TRANSACTIONS
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, enter into any sale and leaseback
transaction; provided that the Company may enter into a sale and leaseback
transaction if: (i) the Company could have (a) incurred Indebtedness in an
amount equal to the Attributable Debt relating to such sale and leaseback
transaction pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of the covenant described above under the caption "-- Incurrence
of Additional Indebtedness and Issuance of Preferred Stock" and (b) incurred a
Lien to secure such Indebtedness pursuant to the covenant described above under
the caption "-- Liens;" (ii) the gross cash proceeds of such sale and leaseback
transaction are at least equal to the fair market value (as determined in good
faith by the Board of Directors and set forth in an Officers' Certificate
delivered to the Trustee) of the property that is the subject of such sale and
leaseback transaction; and (iii) the transfer of assets in such sale and
leaseback transaction is permitted by, and the Company applies the proceeds of
such transaction in compliance with, the covenant described above under the
caption "Repurchase at the Option of the Holders -- Asset Sales."
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BUSINESS ACTIVITIES
The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Company and its Subsidiaries taken as a whole.
PAYMENTS FOR CONSENT
The Indenture provides that neither the Company nor any of its Restricted
Subsidiaries will, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any New Notes for or as an inducement to any consent, waiver or amendment of any
of the terms or provisions of the Indenture or the New Notes unless such
consideration is offered to be paid or is paid to all Holders of the New Notes
that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.
NO SENIOR SUBORDINATED DEBT
The Indenture provides that: (i) the Company will not incur, create, issue,
assume, guarantee or otherwise become liable for any Indebtedness that is
subordinate or junior in right of payment to any Senior Debt and senior in any
respect in right of payment to the New Notes; and (ii) no Subsidiary Guarantor
will incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to Guarantees of
Senior Debt or to Senior Debt of such Subsidiary Guarantor and senior in any
respect in right of payment to the Subsidiary Guarantees.
ADDITIONAL SUBSIDIARY GUARANTEES
The Indenture provides that (i) if the Company or any of its Restricted
Subsidiaries shall, after the date of the Indenture, transfer or cause to be
transferred, including by way of any Investment, in one or a series of
transactions (whether or not related), any assets, businesses, divisions, real
property or equipment having an aggregate fair market value (as determined in
good faith by the Board of Directors) in excess of $1.0 million to any
Restricted Subsidiary (other than any Leasing Subsidiary) that is not a
Subsidiary Guarantor or a Foreign Subsidiary, (ii) if the Company or any of its
Restricted Subsidiaries shall acquire another Restricted Subsidiary other than a
Foreign Subsidiary having total assets with a fair market value (as determined
in good faith by the Board of Directors) in excess of $1.0 million, or (iii) if
any Restricted Subsidiary other than a Foreign Subsidiary shall incur
Indebtedness in excess of $1.0 million, then the Company shall, at the time of
such transfer, acquisition or incurrence cause such Restricted Subsidiary that
is the transferee of such transfer, is so acquired, or incurs such Indebtedness
(if not then a Subsidiary Guarantor) to become a Subsidiary Guarantor and
execute a Supplemental Indenture and deliver an Opinion of Counsel, in
accordance with the terms of the Indenture; provided, that: (i) the Subsidiary
Guarantee of such Subsidiary Guarantor may be subordinated to Senior Debt of
such Subsidiary Guarantor; and (ii) such Restricted Subsidiary shall not be
required to issue a Subsidiary Guarantee if such Restricted Subsidiary is a
Foreign Subsidiary and such Foreign Subsidiary has not guaranteed and does not
guarantee any other Indebtedness of the Company or any other Restricted
Subsidiary of the Company that is not a Foreign Subsidiary.
LIMITATION ON ISSUANCES AND SALES OF EQUITY INTERESTS IN WHOLLY OWNED
RESTRICTED SUBSIDIARIES
The Indenture provides that the Company (i) will not, and will not permit
any Wholly Owned Restricted Subsidiary of the Company to, transfer, convey,
sell, lease or otherwise dispose of any Equity Interests in any Wholly Owned
Restricted Subsidiary of the Company to any Person (other than the Company or a
Wholly Owned Restricted Subsidiary of the Company), unless (a) such transfer,
conveyance, sale, lease or other disposition is of all the Equity Interests in
such Wholly Owned Restricted Subsidiary and (b) the cash Net Proceeds from such
transfer, conveyance, sale, lease or other disposition are applied in accordance
with the covenant described above under the caption "-- Asset Sales," and (ii)
will not permit any Wholly Owned Restricted Subsidiary of the Company to issue
any of its Equity Interests (other than, if necessary, shares of
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its Capital Stock constituting directors' qualifying shares) to any Person other
than to the Company or a Wholly Owned Restricted Subsidiary of the Company.
REPORTS
The Indenture provides that, whether or not required by the rules and
regulations of the Commission, so long as any New Notes are outstanding, the
Company will furnish to the Holders of Notes: (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Consolidated
Financial Condition and Results of Operations" that describes the financial
condition and results of operations of the Company and its consolidated
Subsidiaries (showing in reasonable detail, either on the face of the financial
statements or in the footnotes thereto, the financial condition and results of
operations of the Company and its Restricted Subsidiaries separate from the
financial condition and results of operations of the Unrestricted Subsidiaries
of the Company, if material) and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants and (ii) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports, in each case within the
time periods specified in the Commission's rules and regulations. In addition,
following the consummation of this Exchange Offer, whether or not required by
the rules and regulations of the Commission, the Company will file a copy of all
such information and reports with the Commission for public availability within
the time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, the
Company and the Subsidiary Guarantors have agreed that, for so long as any New
Notes remain outstanding (unless the Company is subject to the reporting
requirements of the Exchange Act), they will furnish to the Holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the New Notes (whether or not prohibited by
the subordination provisions of the Indenture); (ii) default in payment when due
of the principal of or premium, if any, on the New Notes whether or not
prohibited by the subordination provisions of the Indenture); (iii) failure by
the Company or any of its Subsidiaries to comply with the provisions described
under the captions "-- Repurchase at the Option of the Holder -- Change of
Control," "Repurchase at the Option of the Holder -- Asset Sales," "Certain
Covenants -- Restricted Payments," "Certain Covenants -- Incurrence of
Indebtedness and Issuance of Preferred Stock," or "Merger, Consolidation or Sale
of Assets"; (iv) failure by the Company or any of its Subsidiaries for 60 days
after notice from the Trustee or the Holders of at least 25% in principal amount
of the outstanding New Notes to comply with any of its other agreements in the
Indenture or the New Notes; (v) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Subsidiaries) whether such Indebtedness or guarantee now exists, or is created
after the date of the Indenture, which default (a) is caused by a failure to pay
principal of or premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the date of such
default (a "Payment Default") or (b) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $10.0 million or more; (vi) failure
by the Company or any of its Subsidiaries to pay final judgments aggregating in
excess of $5.0 million, which judgments are not paid, discharged or stayed for a
period of 60 days; (vii) except as permitted by the Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor, shall
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deny or disaffirm its obligations under its Subsidiary Guarantee; and (viii)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Significant Subsidiaries.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding New Notes
may declare all the New Notes to be due and payable by notice in writing to the
Company and the Trustee specifying the respective Event of Default and that it
is a "notice of acceleration" (the "Acceleration Notice") and the same (i) shall
become immediately due and payable or (ii) if there are any amounts outstanding
under the Senior Credit Agreement, shall become due and payable upon the first
to occur of an acceleration under the Senior Credit Agreement, or five business
days after receipt by the Company and the Representative under the Senior Credit
Agreement of such Acceleration Notice. In the event of a declaration of
acceleration because an Event of Default set forth in clause (v) of the
preceding paragraph has occurred and is continuing, such declaration of
acceleration shall be automatically annulled if (A) the missed payments in
respect of the applicable Indebtedness have been paid or if the holders of the
Indebtedness that is subject to acceleration have rescinded their declaration of
acceleration, in each case within 60 days thereof and (B) all existing Events of
Default, except non-payment of principal or interest which have become due
solely because of the acceleration of the New Notes, have been cured or waived.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company, any
Subsidiary Guarantor constituting a Significant Subsidiary or any group of
Subsidiary Guarantors that, taken together, would constitute a Significant
Subsidiary, all outstanding New Notes will become due and payable without
further action or notice. Holders of the New Notes may not enforce the Indenture
or the New Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
New Notes may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of the New Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest) if it determines that withholding notice
is in their interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the New Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the New Notes. If an Event of Default occurs prior to
March 1, 2003 by reason of any willful action (or inaction) taken (or not taken)
by or on behalf of the Company with the intention of avoiding the prohibition on
redemption of the New Notes prior to March 1, 2003, then the premium specified
in the Indenture shall also become immediately due and payable to the extent
permitted by law upon the acceleration of the New Notes.
The Holders of a majority in aggregate principal amount of the New Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the New Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the New Notes.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND SHAREHOLDERS
No director, officer, employee, incorporator or shareholder of the Company
or any Subsidiary Guarantor, as such, shall have any liability for any
obligations of the Company or any Subsidiary Guarantor under the New Notes, the
Indenture or the Subsidiary Guarantees or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of New Notes by
accepting a New Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the New Notes and the
Subsidiary Guarantees. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the Commission that such
a waiver is against public policy.
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LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding New Notes ("Legal
Defeasance") except for: (i) the rights of Holders of outstanding New Notes to
receive payments in respect of the principal of, premium, if any, and interest
and Liquidated Damages on such New Notes when such payments are due from the
trust referred to below; (ii) the Company's obligations with respect to the New
Notes concerning issuing temporary New Notes, registration of New Notes,
mutilated, destroyed, lost or stolen New Notes and the maintenance of an office
or agency for payment and money for security payments held in trust; (iii) the
rights, powers, trusts, duties and immunities of the Trustee, and the Company's
obligations in connection therewith; and (iv) the Legal Defeasance provisions of
the Indenture. In addition, the Company may, at its option and at any time,
elect to have the obligations of the Company released with respect to certain
covenants that are described in the Indenture ("Covenant Defeasance") and
thereafter any omission to comply with such obligations shall not constitute a
Default or Event of Default with respect to the New Notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "Events of
Default" will no longer constitute an Event of Default with respect to the New
Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders of the New Notes, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and interest and Liquidated Damages,
if any, on the outstanding New Notes on the stated maturity or on the applicable
redemption date, as the case may be, and the Company must specify whether the
New Notes are being defeased to maturity or to a particular redemption date;
(ii) in the case of Legal Defeasance, the Company shall have delivered to the
Trustee an opinion of counsel in the United States reasonably acceptable to the
Trustee confirming that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of the
Indenture, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such opinion of counsel shall
confirm that, the Holders of the outstanding New Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the
Company shall have delivered to the Trustee an opinion of counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
outstanding New Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Covenant Defeasance had not occurred; (iv)
no Default or Event of Default shall have occurred and be continuing on the date
of such deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit) or insofar as Events of
Default from bankruptcy or insolvency events are concerned, at any time in the
period ending on the 91st day after the date of deposit; (v) such Legal
Defeasance or Covenant Defeasance will not result in a breach or violation of,
or constitute a default under any material agreement or instrument (other than
the Indenture) to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound; (vi) the Company must
have delivered to the Trustee an opinion of counsel to the effect that, assuming
no intervening bankruptcy of the Company between the date of deposit and the
91st day following the deposit and assuming no Holder of New Notes is an insider
of the Company, after the 91st day following the deposit, the trust funds will
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally; (vii) the
Company must deliver to the Trustee an Officers' Certificate stating that the
deposit was not made by the Company with the intent of preferring the Holders of
New Notes over the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and (viii)
the Company must deliver to the Trustee an Officers' Certificate and an opinion
of counsel, each stating that all conditions precedent provided for relating to
the Legal Defeasance or the Covenant Defeasance have been complied with.
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TRANSFER AND EXCHANGE
A Holder may transfer or exchange New Notes in accordance with the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company is not required to transfer or exchange
any New Note selected for redemption. Also, the Company is not required to
transfer or exchange any New Note for a period of 15 days before a selection of
New Notes to be redeemed.
The registered Holder of a New Note will be treated as the owner of it for
all purposes.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the Indenture or
the New Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the New Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, New Notes), and any existing default
or compliance with any provision of the Indenture or the New Notes may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding New Notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, New
Notes).
Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any New Notes held by a non-consenting Holder): (i) reduce the
principal amount of New Notes whose Holders must consent to an amendment,
supplement or waiver; (ii) reduce the principal of or change the fixed maturity
of any New Note or alter the provisions with respect to the redemption of the
New Notes (other than provisions relating to the covenants described above under
the caption "-- Repurchase at the Option of Holders"); (iii) reduce the rate of
or change the time for payment of interest on any New Note; (iv) waive a Default
or Event of Default in the payment of principal of or premium, if any, or
interest on the New Notes (except a rescission of acceleration of the New Notes
by the Holders of at least a majority in aggregate principal amount of the New
Notes and a waiver of the payment default that resulted from such acceleration);
(v) make any New Note payable in money other than that stated in the New Notes;
(vi) make any change in the provisions of the Indenture relating to waivers of
past Defaults or the rights of Holders of New Notes to receive payments of
principal of or premium, if any, or interest on the New Notes; (vii) waive a
redemption payment with respect to any New Note (other than a payment required
by one of the covenants described above under the caption "-- Repurchase at the
Option of Holders") or (viii) make any change in the foregoing amendment and
waiver provisions. In addition, any amendment to the provisions of Article 10 of
the Indenture (which relate to subordination) will require the consent of the
Holders of at least 66 2/3% in aggregate principal amount of the New Notes then
outstanding if such amendment would adversely affect the rights of Holders of
New Notes.
Notwithstanding the foregoing, without the consent of any Holder of New
Notes, the Company and the Trustee may amend or supplement the Indenture or the
New Notes to cure any ambiguity, defect or inconsistency, to provide for
uncertificated New Notes in addition to or in place of certificated New Notes,
to provide for the assumption of the Company's or any Subsidiary Guarantor's
obligations to Holders of New Notes in the case of a merger or consolidation or
sale of all or substantially all of the Company's or such Subsidiary Guarantor's
assets, to make any change that would provide any additional rights or benefits
to the Holders of New Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder, or to comply with requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions;
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however, if it acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the Commission for permission to continue or resign.
The Holders of a majority in principal amount of the then outstanding New
Notes will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur (which shall not be cured), the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the conduct
of his own affairs. Subject to such provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request of any Holder of New Notes, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability or
expense.
ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain a copy of the Indenture and
Registration Rights Agreement without charge by writing to Oshkosh Truck
Corporation, 2307 Oregon Street, P.O. Box 2566 Oshkosh, Wisconsin 54903, Attn:
Chief Financial Officer.
BOOK-ENTRY, DELIVERY AND FORM
The New Notes initially being issued in exchange for the Notes will be
represented by one or more registered global notes without interest coupons
(collectively, the "Global New Notes"). Notwithstanding the foregoing, Notes
held in certificated form will be exchanged solely for New Notes in certificated
form as discussed below. Upon issuance, the Global New Notes will be deposited
with the Trustee, as custodian for The Depository Trust Company ("DTC"), in New
York, New York, and registered in the name of DTC or its nominee, for credit to
the accounts of DTC's Direct and Indirect Participants (as defined below).
Transfers of beneficial interests in any Global New Notes will be subject to the
applicable rules and procedures of DTC and its Direct or Indirect Participants,
which may change from time to time.
The Global New Notes may be transferred, in whole and not in part, only to
another nominee of DTC or to a successor of DTC or its nominee in certain
limited circumstances. Beneficial interests in the Global New Notes may be
exchanged for New Notes in certificated form in certain limited circumstances.
See "-- Transfer of Interests in Global New Notes for Certificated Notes."
Initially, the Trustee will act as Paying Agent and Registrar. The New
Notes may be presented for registration of transfer and exchange at the offices
of the Registrar.
Depositary Procedures
DTC has advised the Company that DTC is a limited-purpose trust company
created to hold securities for its participating organizations (collectively,
the "Direct Participants") and to facilitate the clearance and settlement of
transactions in those securities between Direct Participants through electronic
book-entry changes in accounts of Participants. The Direct Participants include
securities brokers and dealers (including the Initial Purchaser), banks, trust
companies, clearing corporations and certain other organizations. Access to
DTC's system is also available to other entities that clear through or maintain
a direct or indirect, custodial relationship with a Direct Participant
(collectively, the "Indirect Participants").
DTC has advised the Company that, pursuant to DTC's procedures, (i) upon
deposit of the Global New Notes, DTC will credit the accounts of the Direct
Participants designated by the Exchange Agent with portions of the principal
amount of the Global New Notes, and (ii) DTC will maintain records of the
ownership interests of such Direct Participants in the Global New Notes and the
transfer of ownership interests by and between Direct Participants. DTC will not
maintain records of the ownership interests of, or the transfer of ownership
interests by and between, Indirect Participants or other owners of beneficial
interests in the Global New Notes. Direct Participants and Indirect Participants
must maintain their own records of the ownership interests of, and the transfer
of ownership interests by and between, Indirect Participants and other owners of
beneficial interests in the Global New Notes.
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Investors in the Global New Notes may hold their interests therein directly
through DTC if they are Direct Participants in DTC or indirectly through
organizations that are Direct Participants in DTC. All ownership interests in
any Global New Notes are subject to the procedures and requirements of DTC.
The laws of some states in the United States require that certain persons
take physical delivery in definitive, certificated form, of securities that they
own. This may limit or curtail the ability to transfer beneficial interests in a
Global New Note to such persons. Because DTC can act only on behalf of Direct
Participants, which in turn act on behalf of Indirect Participants and others,
the ability of a person having a beneficial interest in a Global New Note to
pledge such interest to persons or entities that are not Direct Participants in
DTC, or to otherwise take actions in respect of such interests, may be affected
by the lack of physical certificates evidencing such interests. For certain
other restrictions on the transferability of the Notes see "-- Transfers of
Interests in Global Notes for Certificated Notes."
Except as described in "-- Transfers of Interests in Global New Notes for
Certificated New Notes," owners of beneficial interests in the Global New Notes
will not have New Notes registered in their names, will not receive physical
delivery of New Notes in certificated form and will not be considered the
registered owners or holders thereof under the Indenture for any purpose.
Under the terms of the Indenture, the Company ,the Subsidiary Guarantors
and the Trustee will treat the persons in whose names the New Notes are
registered (including New Notes represented by Global New Notes) as the owners
thereof for the purpose of receiving payments and for any and all other purposes
whatsoever. Payments in respect of the principal, premium, Liquidated Damages,
if any, and interest on Global New Notes registered in the name of DTC or its
nominee will be payable by the Trustee to DTC or its nominee as the registered
holder under the Indenture. Consequently, neither the Company, the Trustee nor
any agent of the Company or the Trustee has or will have any responsibility or
liability for (i) any aspect of DTC's records or any Direct Participant's or
Indirect Participant's records relating to or payments made on account of
beneficial ownership interests in the Global New Notes or for maintaining,
supervising or reviewing any of DTC's records or any Direct Participant's or
Indirect Participant's records relating to the beneficial ownership interests in
any Global New Note or (ii) any other matter relating to the actions and
practices of DTC or any of its Direct Participants or Indirect Participants.
DTC has advised the Company that its current payment practice (for payments
of principal, interest and the like) with respect to securities such as the New
Notes is to credit the accounts of the relevant Direct Participants with such
payment on the payment date in amounts proportionate to such Direct
Participant's respective ownership interests in the Global New Notes as shown on
DTC's records. Payments by Direct Participants and Indirect Participants to the
beneficial owners of the New Notes will be governed by standing instructions and
customary practices between them and will not be the responsibility of DTC, the
Trustee, the Company or the Subsidiary Guarantors. Neither the Company, the
Subsidiary Guarantors nor the Trustee will be liable for any delay by DTC or its
Direct Participants or Indirect Participants in identifying the beneficial
owners of the New Notes and the Company and the Trustee may conclusively rely on
and will be protected in relying on instructions from DTC or its nominee as the
registered owner of the New Notes for all purposes.
The Global New Notes will trade in DTC's Same-Day Funds Settlement System
and, therefore, transfers between Direct Participants in DTC will be effected in
accordance with DTC's procedures, and will be settled in immediately available
funds. Transfers between Indirect Participants who hold an interest through a
Direct Participant will be effected in accordance with the procedures of such
Direct Participant but generally will settle in immediately available funds.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of New Notes only at the direction of one or more Direct
Participants to whose account interests in the Global New Notes are credited and
only in respect of such portion of the aggregate principal amount of the New
Notes to which such Direct Participant or Direct Participants has or have given
direction. However, if there is an Event of Default under the New Notes, DTC
reserves the right to exchange Global New Notes (without the direction of one or
more of its Direct Participants) for New Notes in certificated form, and to
distribute such certificated forms of New Notes to its Direct Participants. See
"-- Transfers of Interests in Global New Notes for Certificated New Notes."
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Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the Global New Notes among Direct Participants, it is under no
obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. None of the Company, the Subsidiary
Guarantors, the Initial Purchaser or the Trustee shall have any responsibility
for the performance by DTC or its respective Direct and Indirect Participants of
their respective obligations under the rules and procedures governing any of
their operations.
The information in this section concerning DTC and its book-entry systems
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
Transfers of Interests in Global New Notes for Certificated New Notes
An entire Global New Note may be exchanged for definitive New Notes in
registered, certificated form without interest coupons ("Certificated New
Notes") if (i) DTC (x) notifies the Company that it is unwilling or unable to
continue as depositary for the Global New Notes and the Company thereupon fails
to appoint a successor depositary within 90 days or (y) has ceased to be a
clearing agency registered under the Exchange Act, (ii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the issuance of
Certificated New Notes or (iii) there shall have occurred and be continuing a
Default or an Event of Default with respect to the New Notes. In any such case,
the Company will notify the Trustee in writing that, upon surrender by the
Direct and Indirect Participants of their interest in such Global New Note,
Certificated New Notes will be issued to each person that such Direct and
Indirect Participants and DTC identify as being the beneficial owner of the
related New Notes.
Beneficial interests in Global New Notes held by any Direct or Indirect
Participant may be exchanged for Certificated Notes upon request to DTC, by such
Direct Participant (for itself or on behalf of an Indirect Participant), to the
Trustee in accordance with customary DTC procedures. Certificated New Notes
delivered in exchange for any beneficial interest in any Global New Note will be
registered in the names, and issued in any approved denominations, requested by
DTC on behalf of such Direct or Indirect Participants (in accordance with DTC's
customary procedures).
Neither the Company, the Subsidiary Guarantor nor the Trustee will be
liable for any delay by the holder of any Global New Note or DTC in identifying
the beneficial owners of New Notes, and the Company and the Trustee may
conclusively rely on, and will be protected in relying on, instructions from the
holder of the Global New Note or DTC for all purposes.
Same Day Settlement and Payment
The Indenture requires that payments in respect of the New Notes
represented by the Global New Notes (including principal, premium, if any,
interest and Liquidated Damages, if any) be made by wire transfer of immediately
available same day funds to the accounts specified by the holder of such Global
New Note. With respect to Certificated New Notes, the Company will make all
payments of principal, premium, if any, interest and Liquidated Damages, if any,
by wire transfer of immediately available same day funds to the accounts
specified by the holders thereof or, if no such account is specified, by mailing
a check to each such holder's registered address. The Company expects that
secondary trading in the Certificated New Notes will also be settled in
immediately available funds.
EXCHANGE OFFER; REGISTRATION RIGHTS
The Company and the Initial Purchaser entered into the Registration Rights
Agreement on the Closing Date. Pursuant to the Registration Rights Agreement,
the Company agreed to file with the Commission the Exchange Offer Registration
Statement of which this Prospectus is a part on the appropriate form under the
Securities Act with respect to the New Notes. Pursuant to the Exchange Offer,
the Company is offering to the Holders of Transfer Restricted Securities who are
able to make certain representations the opportunity to exchange their Transfer
Restricted Securities for New Notes. If any Holder of Transfer Restricted
Securities notifies the Company prior to the 20th day following consummation of
the Exchange Offer that (A) it is
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prohibited by law or Commission policy from participating in the Exchange Offer
or (B) that it may not resell the New Notes acquired by it in the Exchange Offer
to the public without delivering a prospectus and the prospectus contained in
the Exchange Offer Registration Statement is not appropriate or available for
such resales or (C) that it is a broker-dealer and owns Notes acquired directly
from the Company or an affiliate of the Company, the Company will file with the
Commission a Shelf Registration Statement to cover resales of the Notes by the
Holders thereof who satisfy certain conditions relating to the provision of
information in connection with the Shelf Registration Statement. The Company
will use its best efforts to cause the applicable registration statement to be
declared effective as promptly as possible by the Commission. For purposes of
the foregoing, "Transfer Restricted Securities" means each Note until: (i) the
date on which such Note has been exchanged by a person other than a
broker-dealer for a New Note in the Exchange Offer; (ii) following the exchange
by a broker-dealer in the Exchange Offer of a Note for a New Note, the date on
which such New Note is sold to a purchaser who receives from such broker-dealer
on or prior to the date of such sale a copy of the prospectus contained in the
Exchange Offer Registration Statement; (iii) the date on which such Note has
been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement; or (iv) the date on which such
Note is distributed to the public pursuant to Rule 144 under the Act.
The Registration Rights Agreement provides, among other things, that: (i)
unless the Exchange Offer would not be permitted by applicable law or Commission
policy, the Company will commence the Exchange Offer and use its best efforts to
issue on or prior to 30 business days after the date on which the Exchange Offer
Registration Statement was declared effective by the Commission, New Notes in
exchange for all Notes tendered prior thereto in the Exchange Offer and (ii) if
obligated to file the Shelf Registration Statement, the Company will use its
best efforts to file the Shelf Registration Statement with the Commission on or
prior to 60 days after such filing obligation arises and to cause the Shelf
Registration to be declared effective by the Commission on or prior to 150 days
after such obligation arises. If (a) the Company fails to file any of the
Registration Statements required by the Registration Rights Agreement on or
before the date specified for such filing, (b) any of such Registration
Statements is not declared effective by the Commission on or prior to the date
specified for such effectiveness (the "Effectiveness Target Date"), or (c) the
Company fails to consummate the Exchange Offer within 30 business days of the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement, or (d) the Shelf Registration Statement or the Exchange Offer
Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of Transfer Restricted Securities
during the periods specified in the Registration Rights Agreement (each such
event referred to in clauses (a) through (d) above a "Registration Default"),
then the Company will pay Liquidated Damages to each Holder of Notes, with
respect to the first 90-day period immediately following the occurrence of the
first Registration Default in an amount equal to $.05 per week per $1,000
principal amount of Notes held by such Holder. The amount of the Liquidated
Damages will increase by an additional $.05 per week per $1,000 principal amount
of Notes with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum amount of Liquidated Damages for all
Registration Defaults of $.25 per week per $1,000 principal amount of Notes. All
accrued Liquidated Damages will be paid by the Company on each Damages Payment
Date to the Global Note Holder by wire transfer of immediately available funds
or by federal funds check and to Holders of Certificated Notes by wire transfer
to the accounts specified by them or by mailing checks to their registered
addresses if no such accounts have been specified. Following the cure of all
Registration Defaults, the accrual of Liquidated Damages will cease.
Holders of Notes will be required to make certain representations to the
Company (as described in the Registration Rights Agreement) in order to
participate in the Exchange Offer and will be required to deliver certain
information to be used in connection with the Shelf Registration Statement and
to provide comments on the Shelf Registration Statement within the time periods
set forth in the Registration Rights Agreement in order to have their Notes
included in the Shelf Registration Statement and benefit from the provisions
regarding Liquidated Damages set forth above.
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CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 25% or more of the Voting Stock of a Person shall be
deemed to be control.
"Asset Sale" means: (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) other than sales of inventory in the ordinary course of business
(provided that the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole will be governed by the provisions of the Indenture described above under
the caption "-- Change of Control" and/or the provisions described above under
the caption "-- Merger, Consolidation or Sale of Assets" and not by the
provisions of the Asset Sale covenant); and (ii) the issue or sale by the
Company or any of its Subsidiaries of Equity Interests of any of the Company's
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair market
value in excess of $1.5 million or (b) for net proceeds in excess of $1.5
million. Notwithstanding the foregoing, the following items shall not be deemed
to be Asset Sales: (i) a transfer of assets by the Company to a Wholly Owned
Restricted Subsidiary or by a Wholly Owned Restricted Subsidiary to the Company
or to another Wholly Owned Restricted Subsidiary, (ii) an issuance of Equity
Interests by a Wholly Owned Restricted Subsidiary to the Company or to another
Wholly Owned Restricted Subsidiary, (iii) a Restricted Payment that is permitted
by the covenant described above under the caption "-- Restricted Payments," (iv)
the sale by the Company of Equity Interests in, or assets of, Summit Performance
Systems, Inc. for net proceeds that include promissory notes in an aggregate
principal amount of not more than $5.0 million (v) the initial transfers of
Lease Assets from MFSI to another Leasing Subsidiary and (vi) transfer of Lease
Assets to or by a Leasing Subsidiary in the ordinary course of business.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Borrowing Base" means, as of any date, an amount equal to the sum of (a)
85% of the face amount of all accounts receivable owned by the Company and the
Subsidiary Guarantors that are not Foreign Subsidiaries as of such date that are
not more than 90 days past due, and (b) 65% of the book value of all inventory
owned by the Company and its Subsidiary Guarantors that are not Foreign
Subsidiaries as of such date; minus the sum of (a) the aggregate amount of trade
payables of the Company and its Subsidiary Guarantors that are not Foreign
Subsidiaries as of such date, and (b) the aggregate outstanding Indebtedness
under any Floor Plan Financing Facility as of such date, all calculated on a
consolidated basis and in accordance with GAAP.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
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"Capital Stock" means: (i) in the case of a corporation, corporate stock;
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock; (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Cash Equivalents" means (i) United States dollars or, solely with respect
to any Foreign Subsidiary, its local currency equivalent; (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof (provided that the full faith and credit
of the United States is pledged in support thereof) having maturities of not
more than six months from the date of acquisition; (iii) certificates of deposit
and eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any lender party to the Senior
Credit Agreement or with any domestic commercial bank having capital and surplus
in excess of $500 million and a Thompson Bank Watch Rating of "B" or better;
(iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications specified
in clause (iii) above; (v) commercial paper having the highest rating obtainable
from Moody's Investors Service, Inc. or Standard & Poor's Corporation and in
each case maturing within six months after the date of acquisition; and (vi)
money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (i) - (v) of this definition.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act); (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company; (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which
is that any "person" (as defined above), other than the Principals and their
Related Parties, becomes the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is currently exercisable or is exercisable
only upon the occurrence of a subsequent condition), directly or indirectly, of
more than 35% of the Voting Stock of the Company (measured by voting power
rather than number of shares); or (iv) the Company consolidates with, or merges
with or into, any Person, or any Person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction in which any of
the outstanding Voting Stock of the Company is converted into or exchanged for
cash, securities or other property, other than any such transaction where the
Voting Stock of the Company outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified Stock) of
the surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance).
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus: (i) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income); plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent that
such provision for taxes was included in computing such Consolidated Net Income;
plus (iii) consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income; plus (iv) depreciation, amortization
(including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) and
other
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non-cash expenses (including, without limitation, LIFO charges but excluding any
such non-cash expense to the extent that it represents an accrual of or reserve
for cash expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its Subsidiaries for such
period to the extent that such depreciation, amortization and other non-cash
expenses were deducted in computing such Consolidated Net Income; minus (v)
non-cash items increasing such Consolidated Net Income for such period
(including without limitation under any LIFO credit), in each case, on a
consolidated basis and determined in accordance with GAAP. Notwithstanding the
foregoing, the provision for taxes on the income or profits of, and the
depreciation and amortization and other non-cash expenses of, a Subsidiary of
the referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent that a corresponding amount would be
permitted at the date of determination to be dividended or otherwise distributed
to the Company by such Subsidiary without prior governmental approval (that has
not been obtained), and without direct or indirect restriction pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that: (i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Subsidiary
thereof that is a Subsidiary Guarantor; (ii) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders; (iii) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded; (iv) the cumulative effect of a change in
accounting principles shall be excluded; (v) the Net Income (or loss) of any
Unrestricted Subsidiary that is a Leasing Subsidiary shall be included;
provided, that such Net Income shall be so included only to the extent of cash
dividends or other cash distributions paid by such Leasing Subsidiary during
such period to the Company or a Restricted Subsidiary; and (vi) the Net Income
(but not loss) of any Unrestricted Subsidiary (other than a Leasing Subsidiary)
shall be excluded, whether or not distributed to the Company or one of its
Restricted Subsidiaries. MFSI shall be considered an Unrestricted Subsidiary for
purposes of this definition provided that (a) MFSI incurs no Indebtedness other
than Indebtedness of MFSI existing on the date of the Indenture and has no
Indebtedness other than Indebtedness that would be Non-Recourse Debt but for the
existence of the Letter Agreements and (b) none of the Company or any of its
Restricted Subsidiaries have made any payment or contribution in connection with
any Letter Agreement.
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Senior Credit Agreement) or commercial paper facilities with
banks or other institutional lenders providing for revolving credit loans, term
loans, receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time. Indebtedness incurred under Credit Facilities in
existence on the date on which Notes are first issued and authenticated under
the Indenture shall be deemed to have been incurred on such date in reliance on,
and shall be permitted by, the exceptions provided by clause (i) or (ii), as
applicable, of the definition of Permitted Indebtedness.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Designated Senior Debt" means: (i) any Indebtedness outstanding under the
Senior Credit Agreement and (ii) any other Senior Debt permitted under the
Indenture the principal amount of which is $25 million or more and that has been
designated by the Company (with, so long as the Senior Credit Agreement is in
effect, the consent of the Representative thereunder) as "Designated Senior
Debt."
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"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the Holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Notes mature; provided, however, that any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Company to repurchase such Capital Stock upon the occurrence of a
Change of Control or an Asset Sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Company may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with the covenant described above under the caption
"-- Certain Covenants -- Restricted Payments."
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Senior Credit Agreement) in
existence on the date of the Indenture, until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of: (i) the consolidated interest expense of such Person
and its Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings (other than letters of credit
posted in lieu of performance or completion bonds), and net payments (if any)
pursuant to Hedging Obligations); and (ii) the consolidated interest of such
Person and its Restricted Subsidiaries that was capitalized during such period;
and (iii) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries (whether or
not such Guarantee or Lien is called upon); and (iv) the product of (a) all
dividend payments, whether or not in cash, on any series of preferred stock of
such Person or any of its Restricted Subsidiaries, other than dividend payments
on Equity Interests payable solely in Equity Interests of the Company (other
than Disqualified Stock) or to the Company or a Restricted Subsidiary of the
Company, times (b) a fraction, the numerator of which is one and the denominator
of which is one minus the then current combined federal, state and local
statutory tax rate of such Person, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP. MFSI shall not be considered a
Restricted Subsidiary for purposes of this definition provided that (a) MFSI
incurs no Indebtedness other than Indebtedness of MFSI existing on the date of
the Indenture and has no Indebtedness other than Indebtedness that would be
Non-Recourse Debt but for the existence of the Letter Agreements and (b) none of
the Company or any of its Restricted Subsidiaries have made any payments or
contribution in connection with any Letter Agreement.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the referent
Person or any of its Restricted Subsidiaries incurs, assumes, Guarantees or
redeems any Indebtedness (other than revolving credit or floor plan borrowings)
or issues or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated but prior
to the date on which the event for which the calculation of the Fixed Charge
Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage
Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee or redemption of Indebtedness, or such issuance or
redemption of preferred stock, as if the same had occurred at the beginning of
the applicable four-quarter reference period. In addition, for purposes of
making the computation referred to above (i) acquisitions that have been made by
the Company or any of its Subsidiaries, including through mergers or
consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date shall be deemed to have occurred on the first day
of the four-quarter reference period and Consolidated Cash Flow
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for such reference period shall be calculated (x) without giving effect to
clause (iii) of the proviso set forth in the definition of Consolidated Net
Income and (y) to include the pro forma adjustments reflected in the unaudited
pro forma condensed consolidated financial statements prepared in connection
with the acquisition of McNeilus Companies, Inc. and included in this Prospectus
with respect to the Notes, and an adjustment of up to $1.0 million reflecting
the difference between $1.3 million and the actual charitable contributions made
by the Company for any four quarter period ending on or prior to March 31, 1999
and (ii) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, and (iii) the Fixed Charges
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall be
excluded, but only to the extent that the obligations giving rise to such Fixed
Charges will not be obligations of the referent Person or any of its Restricted
Subsidiaries following the Calculation Date.
"Floor Plan Financing Facility" means any facility entered or to be entered
into by the Company or any Restricted Subsidiary pursuant to which such Person
may (i) incur Indebtedness to purchase vehicles and/or related equipment from
certain vendors for the prompt resale to customers in the ordinary course of
business and (ii) grant a security interest in such vehicles and/or related
equipment to secure such borrowings.
"Foreign Borrowing Base" means, as of any date, an amount equal to the sum
of (a) 85% of the face amount of all accounts receivable owned by Restricted
Subsidiaries that are Foreign Subsidiaries as of such date that are not more
than 90 days past due, and (b) 65% of the book value of all inventory owned by
Restricted Subsidiaries that are Foreign Subsidiaries as of such date; minus the
aggregate amount of trade payables of Restricted Subsidiaries that are Foreign
Subsidiaries as of such date, all calculated on a consolidated basis and in
accordance with GAAP.
"Foreign Subsidiary" means any Subsidiary not organized and validly
existing under the laws of the United States or any state thereof or the
District of Columbia.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of the Indenture.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness; provided, however, that the
Letter Agreements shall not be deemed Guarantees.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under: (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements; (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates; and (iii) agreements or arrangements designed to protect such Person
against fluctuations in the value of foreign currency.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all Indebtedness of others secured
by a Lien on any asset of such Person (whether or not such Indebtedness is
assumed by such Person) and, to the extent not otherwise included, the Guarantee
by such Person of any Indebtedness of any other Person. The amount of any
Indebtedness outstanding as of any date shall be (i) the accreted value thereof,
in the case of any Indebtedness issued with original issue discount, and (ii)
the
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principal amount thereof, together with any interest thereon that is more than
30 days past due, in the case of any other Indebtedness.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Subsidiary of the Company sells or otherwise disposes of
any Equity Interests of any direct or indirect Subsidiary of the Company such
that, after giving effect to any such sale or disposition, such Person is no
longer a Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of the covenant described
above under the caption "-- Restricted Payments."
"Lease Assets" means, with respect to any lease, all of the following
property and interests in property whether now existing or existing in the
future or hereafter acquired or arising: (i) all vehicles or equipment
manufactured or refurbished by the Company or any of its Subsidiaries (and truck
chassis, cement block boom trucks and similar vehicles or equipment manufactured
or refurbished by third parties) and acquired by a Leasing Subsidiary in
connection with such assets being contemporaneously leased to a third party;
(ii) all leases and other contracts or agreements relating to the lease
financing by a customer of vehicles or equipment manufactured or refurbished by
the Company or any of its Subsidiaries; (iii) all accounts receivable and other
obligations incurred by lessees in connection with the foregoing, no matter how
evidenced; (iv) all rights to any vehicles or equipment subject to any of the
foregoing after or in connection with creation of the foregoing, including,
without limitation, returned or repossessed goods; (v) all reserves and credit
balances with respect to any such lease contracts or agreements or lessees; (vi)
all letters of credit, security or guarantees for any of the foregoing; (vii)
all insurance policies or reports relating to any of the foregoing; and (viii)
all books and records relating to any of the foregoing.
"Leasing Subsidiary" means MFSI, Oshkosh/McNeilus Financial Services, Inc.,
Oshkosh/McNeilus Financial Services Partnership and any other Subsidiary (or
partnership of which a Subsidiary of the Company is a general partner) that is
designated by the Board of Directors of the Company as a Leasing Subsidiary and
that is exclusively engaged in Leasing Transactions and activities related
thereto. If at any time any Leasing Subsidiary should engage in a transaction or
activity other than those described above, it shall thereafter cease to be a
Leasing Subsidiary for purpose of the Indenture.
"Leasing Subsidiary Undertaking" means a guarantee (i) of indemnification
obligations with respect to representations and warranties made by a Leasing
Subsidiary in connection with a transfer of Lease Assets to a partnership that
is a Leasing Subsidiary, provided that such representations and warranties are
similar to those that would customarily be made in connection with a transfer of
assets in a lease securitization; (ii) of the performance by a Leasing
Subsidiary of its obligations as tax matters partner or as portfolio manager of
a partnership that is a Leasing Subsidiary; or (iii) of the performance by a
Leasing Subsidiary of its obligations as a partner to a partnership that is a
Leasing Subsidiary, provided, however, that the guarantee of obligations set
forth in clause (iii) shall not at any time exceed the amount that the Company
could then invest in a Leasing Subsidiary pursuant to clause (f) of the
definition of Permitted Investments and, provided further, that the guarantees
set forth in clauses (i), (ii) and (iii) above shall not include guarantees of
Indebtedness of a Leasing Subsidiary or obligations to make loans, investments
or capital contributions in or to a partnership that is a Leasing Subsidiary.
"Leasing Transaction" means (i) the sale or other disposition to a third
party of Lease Assets or an interest therein; (ii) the borrowing of money
secured by Lease Assets; or (iii) the sale or other disposition of Lease Assets
or an interest therein to a Leasing Subsidiary followed by a financing
transaction in connection with such sale or disposition of such Lease Assets
(whether such financing transaction is effected by such Leasing Subsidiary or by
a third party to whom such Leasing Subsidiary sells such Lease Assets or
interests
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therein); provided that in each of the foregoing, the Company or its Restricted
Subsidiaries receive or have received at least 95% of the aggregate sale price
attributed to the vehicles and equipment that underlie the Leases financed in
such transaction.
"Letter Agreement" means (i) a guarantee in place on the date of the
Indenture in an amount not to exceed $1.0 million by McNeilus Truck and
Manufacturing, Inc. of obligations of MFSI to FBS Business Finance Corporation
and (ii) letter agreements in effect on the date of the Indenture concerning the
maintenance by McNeilus Companies, Inc. of a minimum net worth of MFSI for the
benefit of the lenders to MFSI on the date of the Indenture and related
documents in favor of Navistar Financial Corporation.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"MFSI" means McNeilus Financial Services, Inc.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however: (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries; and (ii) any extraordinary or nonrecurring gain
(but not loss), together with any related provision for taxes on such
extraordinary or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Senior Debt
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness as to which neither the Company nor
any of its Restricted Subsidiaries (i) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness, but excluding undertakings customary in lease securitization
transactions for the benefit of any Leasing Subsidiary, and guarantees thereof),
(ii) is directly or indirectly liable (as a guarantor or otherwise), or (iii)
constitutes the lender.
"Obligations" means any principal, interest (including interest accruing
after the commencement of any bankruptcy, reorganization, insolvency or similar
proceeding relating to the Company or any of its Subsidiaries whether or not
allowed as a claim in such proceeding), penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.
"Permitted Business" means (a) any business in which the Company and its
Subsidiaries are engaged on the date of the Indenture or any reasonable
extension or expansion of such businesses and (b) any business similar or
related to the manufacture, design, leasing, marketing, financing, servicing,
refurbishment, distribution or resale of specialty trucks or truck bodies or of
parts or components thereof.
"Permitted Investments" means (a) any Investment in the Company or in a
Subsidiary Guarantor; (b) any Investment in Cash Equivalents; (c) any Investment
by the Company or any Restricted Subsidiary of the Company in a Person, if as a
result of such Investment (i) such Person becomes a Wholly Owned
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Restricted Subsidiary of the Company and a Subsidiary Guarantor or (ii) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company
or a Wholly Owned Restricted Subsidiary of the Company that is a Subsidiary
Guarantor and that is engaged in the same or a similar line of business as the
Company and its Subsidiaries were engaged in on the date of the Indenture; (d)
any Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with the covenant
described above under the caption "-- Repurchase at the Option of
Holders -- Asset Sales"; (e) any acquisition of assets solely in exchange for
the issuance of Equity Interests (other than Disqualified Stock) of the Company;
(f) Investments in Leasing Subsidiaries having an aggregate fair market value
(measured on the date such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (f) that are at the time outstanding, not to exceed
$15.0 million; provided, that Investments made by a Leasing Subsidiary in
another Leasing Subsidiary do not count against such $15.0 million limitation;
(g) contributions of Lease Assets from one Leasing Subsidiary to another Leasing
Subsidiary; (h) Investments that are Leasing Subsidiary Undertakings; (i)
Investments in Nations Casualty Insurance, Inc. in an aggregate amount not to
exceed the aggregate amount of dividends paid to the Company by Nations Casualty
Insurance, Inc. after the date of the Indenture; (j) Investments in Permitted
Joint Ventures, Unrestricted Subsidiaries or Foreign Subsidiaries having an
aggregate fair market value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (j) that are at the time
outstanding; not to exceed $15.0 million; and (k) other Investments in any
Person having an aggregate fair market value (measured on the date each such
Investment was made and without giving effect to subsequent changes in value),
when taken together with all other Investments made pursuant to this clause (k)
that are at the time outstanding, not to exceed $10.0 million.
"Permitted Joint Venture" means any joint venture, partnership or other
Person incorporated or otherwise formed in a jurisdiction outside the United
States or the District of Columbia designated as a Permitted Joint Venture by
the Board of Directors, all of whose Indebtedness is Non-Recourse Debt or
otherwise permitted to be incurred by such entity pursuant to clause (ii)(c)
and/or (xvi) of the second paragraph of the covenant described above under the
caption "-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock" and (ii) which is engaged in a Permitted Business. Any such
designation or designation to the contrary shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"Permitted Junior Securities" means Equity Interests in the Company or any
Subsidiary Guarantor or debt securities that are subordinated to all Senior Debt
(and any debt or equity securities issued in exchange for Senior Debt) to
substantially the same extent as, or to a greater extent than, the New Notes are
subordinated to Senior Debt pursuant to Article 10 of the Indenture.
"Permitted Liens" means: (i) Liens securing Indebtedness and Guarantees
under Credit Facilities or other Senior Debt that was permitted by the terms of
the Indenture to be incurred; (ii) Liens on vehicles or related equipment
securing Indebtedness under Floor Plan Financing Facilities that was permitted
by the terms of the Indenture to be incurred; (iii) Liens on assets of a Leasing
Subsidiary securing Indebtedness under Leasing Transactions, that were permitted
by terms of the Indenture to be incurred; (iv) Liens in favor of the Company and
its Subsidiary Guarantors; (v) Liens on property of a Person existing at the
time such Person is merged into or consolidated with the Company or any
Subsidiary of the Company; provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Company; (vi) Liens on property existing at the time of acquisition thereof by
the Company or any Subsidiary of the Company, provided that such Liens were in
existence prior to the contemplation of such acquisition; (vii) Liens to secure
obligations in respect of statutory obligations, surety or appeal bonds,
performance bonds or other obligations of a like nature incurred in the ordinary
course of business; (viii) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (vi) of the second paragraph of the covenant
entitled "Incurrence of Indebtedness and Issuance of Preferred Stock" covering
only the assets acquired with such
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Indebtedness; (ix) Liens (including Liens to secure Indebtedness under the
Senior Credit Agreement) existing on the date of the Indenture; (x) Liens for
taxes, assessments or governmental charges or claims that are not yet delinquent
or that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (xi) Liens on assets of Subsidiary Guarantors to secure
Senior Debt of such Subsidiary Guarantors that was permitted by the Indenture to
be incurred; (xii) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries; (xiii) Liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security; (xiv)
easements, rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
interfere with the ordinary course of business of the Company or any of the
Restricted Subsidiaries; (xv) any interest or title of a lessor in the property
subject to any Capitalized Lease or operating lease; (xvi) Liens arising from
filing Uniform Commercial Code financing statements regarding leases; (xvii)
Liens in favor of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with the importation of goods;
(xviii) Liens on customer deposits in favor of the depositor; (xix) Liens
encumbering customary initial deposits and margin deposits, and other Liens that
are either within the general parameters customary in the industry and incurred
in the ordinary course of business, in each case securing Hedging Obligations;
(xx) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by the Company or any of
the Restricted Subsidiaries in the ordinary course of business in accordance
with the past practices of the Company and the Restricted Subsidiaries prior to
the date on which the Notes were issued; (xxi) carriers', warehousemen's,
mechanics', landlords' materialmen's, repairmen's or other like Liens arising in
the ordinary course of business in respect of obligations not overdue for a
period in excess of 60 days or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently prosecuted; provided
that any reserve or other appropriate provision as shall be required to conform
with GAAP shall have been made therefor; (xxii) any attachment or judgment Lien
not constituting an Event of Default under clause (vi) of the first paragraph of
the section described above under the caption "Events of Default and Remedies";
and (xxiii) Liens on property of the Company or any Subsidiary of the Company
with respect to obligations that do not exceed $5.0 million in the aggregate at
any one time outstanding.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
accrued interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith); (ii) such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the New Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of payment
to, the New Notes on terms at least as favorable to the Holders of New Notes as
those contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness
is incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Principal" means J. Peter Mosling, Jr., Stephen P. Mosling and Cadence
Company, as long as a majority of its economic interest is held by J. Peter
Mosling, Jr., Stephen P. Mosling and their Related Parties.
"Related Parties" with respect to any Principal means (A) 70% (or more)
owned Subsidiary, or spouse or immediate family member (in the case of an
individual) of such Principal or (B) any trust, corporation, partnership or
other entity, the beneficiaries, stockholders, partners, owners or Persons
beneficially holding an
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70% or more controlling interest of which consist of such Principal and/or such
other Persons referred to in the immediately preceding clause (A).
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Debt; provided that, if and
for so long as any Designated Senior Debt lacks such a representative, then the
Representative for such Designated Senior Debt shall at all times constitute the
holders of a majority in outstanding principal amount of such Designated Senior
Debt in respect of any Designated Senior Debt.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Senior Credit Agreement" means that certain Credit Agreement, dated as of
the date of the Indenture, by and among the Company, Bank of America National
Trust and Savings Association (as administrative agent) and the Lenders named
therein, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended, modified, renewed, refunded, replaced or refinanced (directly or
indirectly) in whole or in part from time to time.
"Senior Debt" means: (i) all Indebtedness now or hereafter outstanding
under Credit Facilities and all Hedging Obligations with respect thereto; (ii)
any other Indebtedness permitted to be incurred by the Company under the terms
of the Indenture, unless the instrument under which such Indebtedness is
incurred expressly provides that it is on a parity with or subordinated in right
of payment to the New Notes and (iii) all Obligations with respect to the
foregoing. Notwithstanding anything to the contrary in the foregoing, Senior
Debt will not include (v) Indebtedness which is classified as non-recourse in
accordance with GAAP or any unsecured claim arising in respect hereof by reason
of application of section 1111(b)(1) of the U.S. bankruptcy code, (w) any
liability for federal, state, local or other taxes owed or owing by the Company,
(x) any Indebtedness of the Company to any of its Subsidiaries or other
Affiliates, (y) any trade payables or (z) any Indebtedness that is incurred in
violation of the Indenture.
"Significant Senior Debt" means any (i) Indebtedness outstanding under
Credit Facilities or (ii) Senior Debt with principal amount due (as accreted
value with respect to Senior Debt issued at a discount) in excess of $5.0
million upon initial issuance thereof.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Act, as such Regulation is in effect on the date hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person: (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof); and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantees" means the Guarantees of the payment obligations in
respect of the New Notes by the Subsidiary Guarantors.
"Subsidiary Guarantor" means each of (i) McNeilus Truck & Manufacturing,
Inc., Iowa Contract Fabricators, Inc., McIntire Fabricators, Inc., Kensett
Fabricators, Inc., McNeilus Companies, Inc. McNeilus Financial, Inc., Pierce
Manufacturing, Inc., and Summit Performance Systems, Inc. and (ii) any other
Person that executes a Subsidiary Guarantee in accordance with the provisions of
the Indenture, and their respective successors and assigns.
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"Subsidiary Guarantor Senior Debt" means any Indebtedness of a Subsidiary
Guarantor that would constitute Senior Debt if incurred by the Company
(including, without limitation, Guarantees of Obligations under Credit
Facilities).
"Unrestricted Subsidiary" means Nations Casualty Insurance, Inc.,
Oshkosh/McNeilus Financial Services, Inc. and any Subsidiary that is designated
by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution; but only to the extent that such Subsidiary: (i) has no Indebtedness
other than Non-Recourse Debt; (ii) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company; (iii) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (x) to subscribe for additional Equity Interests or (y) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; and (iv) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company or any of its Restricted Subsidiaries (excluding assumption of
Indebtedness of MFSI by any Leasing Subsidiary). Any such designation by the
Board of Directors shall be evidenced to the Trustee by filing with the Trustee
a certified copy of the Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by the covenant described above under the
caption "Certain Covenants -- Restricted Payments." If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary of the Company as of
such date (and, if such Indebtedness is not permitted to be incurred as of such
date under the covenant described under the caption "Incurrence of Indebtedness
and Issuance of Preferred Stock," the Company shall be in default of such
covenant). The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if: (i) such
Indebtedness is permitted under the covenant described under the caption
"Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock," calculated on a pro forma basis as if such designation had occurred at
the beginning of the four-quarter reference period; and (ii) no Default or Event
of Default would be in existence following such designation.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Subsidiaries of
such Person and one or more Wholly Owned Subsidiaries of such Person.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
THIS SUMMARY IS OF A GENERAL NATURE AND IS INCLUDED HEREIN SOLELY FOR
INFORMATIONAL PURPOSES. IT IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED AS
BEING, LEGAL OR TAX ADVICE. NO REPRESENTATION WITH RESPECT TO THE CONSEQUENCES
TO ANY PARTICULAR PURCHASER OF THE NEW NOTES IS MADE. PROSPECTIVE PURCHASERS
SHOULD CONSULT THEIR OWN TAX ADVISERS WITH RESPECT TO THEIR PARTICULAR
CIRCUMSTANCES.
The following discussion is a summary of certain United States federal
income tax considerations relevant to the purchase, ownership and disposition of
the New Notes by holders thereof, based upon current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), judicial decisions, and
administrative interpretations, all of which are subject to change at any time
by legislative, judicial or administrative action. Any such changes may be
applied retroactively in a manner that could adversely affect a holder of the
New Notes. There can be no assurance that the Internal Revenue Service (the
"IRS") will not challenge the conclusions stated below, and no ruling from the
IRS has been or will be sought on any of the matters discussed below.
The following discussion does not purport to be a complete analysis of all
the potential federal income tax effects relating to the purchase, ownership and
disposition of the New Notes, and, without limiting the generality of the
foregoing, this summary does not address the effect of any special rules
applicable to certain types of purchasers (including dealers in securities,
insurance companies, financial institutions, tax-exempt entities, and persons
who hold New Notes as part of a straddle, hedge, or conversion transaction). In
addition, this discussion is limited to holders who are the initial purchasers
of the New Notes and hold the New Notes as capital assets within the meaning of
Section 1221 of the Code. This discussion does not address the effect of any
state, local, or foreign tax laws.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES TO U.S. PERSONS
The term "U.S. Person" means (i) an individual who is a citizen or resident
of the United States, (ii) a corporation or partnership created or organized in
or under the laws of the United States or any state thereof, (iii) an estate the
income of which is subject to United States federal income taxation regardless
of its source, or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have the authority to control all substantial
decisions of the trust. The term "Foreign Person" means a person other than a
U.S. Person.
Taxation of Interest and Liquidated Damages
Any interest or Liquidated Damages earned on a New Note held by a U.S.
Person is generally required to be included in the holder's gross income for
federal income tax purposes at the time that the interest or Liquidated Damages
is paid or accrued, in accordance with the holder's method of accounting for
federal income tax purposes.
For purposes of determining whether the New Notes are issued with original
issue discount, the Company has made a determination (which is binding on the
holders of the New Notes unless a holder explicitly discloses on its timely
filed federal income tax return that its determination in this regard is
different from the Company's determination) that the possibility that any
Liquidated Damages will be paid on the New Notes is remote. Accordingly, the
Company will treat the New Notes as being issued without any original issue
discount.
Sale or Exchange of Notes
In the case of a sale or exchange (including a redemption) of a New Note,
the holder will recognize gain or loss equal to the difference, if any, between
the amount received (other than any amount representing accrued but unpaid
stated interest) and the holder's adjusted tax basis in the New Note. Any such
gain or loss will be treated as a capital gain or loss. Any capital gain or loss
on a sale or exchange of a New Note will be treated as a long-term capital gain
or loss if, at the time of the sale or exchange, the New Note has been held
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by the holder for more than one year; otherwise, the capital gain or loss will
be short-term. An individual's long-term capital gain is subject to federal
income tax at a maximum stated rate of either 20%, if the individual has held
the New Notes for more than 18 months prior to the sale or exchange, or 28%, if
the individual has held the New Notes for not more than 18 months prior to the
sale or exchange. An individual's short-term capital gain is taxed at ordinary
income tax rates. An individual's capital loss is first deductible against other
capital gains and then the amount of any remaining capital loss, up to $3,000
(or $1,500 for married persons filing separately), is deductible against other
income. Capital losses in excess of these amounts will carry over as a capital
loss to succeeding years.
In addition, the recognition of capital gain on the New Notes could cause
an individual to exceed certain income thresholds which, in turn, could cause
items of income otherwise not taxable to the individual to become taxable and/or
could affect the individual's ability to utilize all or a portion of his or her
personal exemptions, certain itemized deductions and certain other deductions.
For corporations, a capital gain is subject to federal income tax at a
stated maximum rate of 35%, while any capital loss can be offset only against
capital gains. Any unutilized capital loss generally can be carried back three
years and forward five years to be offset against net capital gains generated in
those years.
CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX CONSEQUENCES TO FOREIGN PERSONS
The following is a general discussion of certain United States federal
income and estate tax consequences of the ownership and disposition of New Notes
by a Foreign Person. This discussion is limited to Foreign Persons other than
former United States citizens described in Section 877(a) of the Code or former
residents of the United States described in Sections 877(e) or 7701(b)(10) of
the Code. Holders of New Notes who are Foreign Persons are urged to consult
their own tax advisers regarding the specific tax consequences to them of owning
and disposing of New Notes.
Any interest or Liquidated Damages earned on a New Note by a holder who is
a Foreign Person will be considered "portfolio interest" and will not be subject
to United States federal income tax or withholding if:
(1) such Foreign Person is neither (i) a "controlled foreign
corporation" that is related to the Issuer as described in Section
881(c)(3)(C) of the Code, (ii) a bank that has purchased New Notes pursuant
to an extension of credit made in the ordinary course of its trade or
business, nor (iii) a person who owns, directly or under the attribution
rules of Section 871(h)(3)(C) of the Code, 10% or more of the voting power
in the Company;
(2) the person who would otherwise be required to withhold tax from
payments of such interest or Liquidated Damages (the "withholding agent")
is furnished an IRS Form W-9 (or equivalent), signed under penalties of
perjury, identifying the beneficial owner of the Note and stating that the
beneficial owner of the New Note is a Foreign Person; and
(3) the interest or Liquidated Damages is not effectively connected
with the conduct of a trade or business within the United States by the
Foreign Person.
The United States Treasury Department recently promulgated final
regulations regarding withholding and information reporting, which regulations
are generally effective for payments made after December 31, 1998. In general,
the final regulations do not significantly alter the substantive withholding and
information reporting requirements but unify current certification procedures
and forms and clarify reliance standards. Special rules apply which permit the
shifting of primary responsibility for withholding to certain financial
intermediaries acting on behalf of beneficial owners. In the case of interest
paid to a foreign partnership (other than a partnership that has entered into a
withholding agreement with the IRS), the final regulations specify that the
"portfolio interest" exemption will not apply unless the withholding agent
receives appropriate certifications from the partners in addition to receiving
certain certifications from the partnership. A look-through rule applies in the
case of tiered partnerships.
Any interest or Liquidated Damages (other than "portfolio interest") earned
on a New Note by a Foreign Person will be subject to United States federal
income tax and withholding at a rate of 30% (or at a
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lower rate under an applicable tax treaty) if this interest or Liquidated
Damages is not effectively connected with the conduct of a trade or business
within the United States by this Foreign Person.
Any interest or Liquidated Damages earned on a New Note, and any gain
realized on a sale or exchange (including a redemption) of a New Note, that is
effectively connected with the conduct of a trade or business within the United
States by a Foreign Person will be subject to United States federal income tax
at regular graduated rates (and, if the Foreign Person is a corporation, may
also be subject to a United States branch profits tax). Such income will not be
subject to United States income tax withholding, however, if the Foreign Person
furnishes the proper certificate to the withholding agent.
Any gain realized by a Foreign Person on a sale or exchange (including a
redemption) of a New Note will not be subject to United States federal income
tax or withholding if (i) the gain is not effectively connected with the conduct
of a trade or business within the United States by the Foreign Person; and (ii)
in the case of a Foreign Person who is an individual, such individual is not
present in the United States for 183 days or more in the taxable year of the
sale or exchange, or the individual does not have a "tax home" in the United
States and the gain is not attributable to an office or other fixed place of
business maintained in the United States by the individual.
Any New Notes owned by an individual who is not a citizen or resident (as
specially defined for United States federal estate tax purposes) of the United
States at the date of death will be included in such individual's estate for
United States federal estate tax purposes, unless all of the interest on such
New Notes constitutes "portfolio interest" (without regard to whether the
"portfolio interest" certification requirements are met), or unless an
applicable tax treaty provides otherwise.
BACKUP WITHHOLDING AND INFORMATION REPORTING
A U.S. Person who holds New Notes will generally be subject to information
reporting and to backup withholding at a 31% rate with respect to interest on
the New Notes, and with respect to proceeds received on the sale or exchange of
New Notes through a broker. Information reporting and backup withholding will
generally not apply, however, with respect to payments made to certain exempt
recipients, such as corporations. In addition, backup withholding will generally
not apply to a U.S. Person who provides a taxpayer identification number and who
certifies, under penalties of perjury, that such number is correct and that the
holder has not been notified by the IRS that it is subject to backup withholding
for failure to report interest and dividend payments. Generally, such
certification is made on Form W-9.
Information reporting on IRS Form 1099 and backup withholding will not
apply to payments made by the Company or any agent thereof to a holder of a New
Note if the holder has furnished a certification under penalties of perjury that
it is a Foreign Person, or has otherwise demonstrated that it qualifies for an
applicable exemption, provided that neither the Company nor such agent has
actual knowledge to the contrary. The interest and any Liquidated Damages earned
by a Foreign Person with respect to a New Note will generally be reported,
however, by the Company on IRS Form 1042S.
If a Foreign Person sells a New Note through a United States office of a
broker, the broker is required to file an information report and is required to
withhold 31% of the sale proceeds unless the Foreign Person certifies under
penalties of perjury its non-United States status (and the broker does not have
actual knowledge to the contrary) or otherwise establishes an exemption. If a
Foreign Person sells a New Note through a foreign office of a broker, backup
withholding is not required; but information reporting is required if the broker
does not have documentary evidence that the holder is a Foreign Person and if
(i) the broker is a U.S. Person, (ii) the broker is a "controlled foreign
corporation" (as defined in Section 957 of the Code), (iii) the broker derives
50% or more of its gross income for a specified three year period from the
conduct of a trade or business in the United States, or (iv) in the case of
payments made after December 31, 1998, the broker is a foreign partnership with
certain connections to the United States.
Any amount withheld from payment to a holder under the backup withholding
rules will generally be allowed as a credit against such holder's United States
federal income tax liability, if any, and may entitle such holder to a refund,
provided that the required information is furnished to the IRS.
102
<PAGE> 107
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account (a
"Participating Broker-Dealer") pursuant to the Exchange Offer must acknowledge
that it will deliver a Prospectus in connection with the initial sales of such
New Notes. This Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with the sales
of New Notes received in exchange for Notes where such Notes were acquired as
the result of market-making activities or other trading activities. The Company
will make this Prospectus, as amended or supplemented, available to any
Participating Broker-Dealer for use in connection with any such resale and
Participating Broker-Dealers shall be authorized to deliver this Prospectus for
the period specified in the Registration Rights Agreement.
The Company will not receive any proceeds from any sales of the New Notes
by Participating Broker-Dealers. New Notes received by Participating
Broker-Dealers for their own account pursuant to the Exchange Offer may be sold
from time to time, in one or more transactions in the over-the-counter market,
in negotiated transactions, through the writing of options on the New Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such Participating Broker-Dealer that resells the New Notes
that were received by it for its own account pursuant to the Exchange Offer. Any
broker or dealer that participates in a distribution of such New Notes may be
deemed to be an "underwriter" within the meaning of the Securities Act and may
profit on any such resale of New Notes and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that by acknowledging that
it will deliver and by delivering a Prospectus, a Participating Broker-Dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
The Initial Purchaser and certain of its affiliates have, from time to
time, performed certain banking, financial advisory and investment banking
services for the Company and certain of its affiliates, for which they have
received customary fees and expenses. A portion of the net proceeds from the
Note Offering was used to repay outstanding indebtedness under the Existing Bank
Credit Agreement of which Bank of America, an affiliate of BancAmerica Robertson
Stephens, is a lender. Bank of America is the lead agent and a lender under the
Senior Credit Facility, for which it receives customary fees and expenses.
BALCAP, an affiliate of BancAmerica Robertson Stephens, is a partner with the
Leasing Partner under the Lease Financing Facility.
LEGAL MATTERS
The validity of the New Notes offered hereby will be passed upon on behalf
of the Company by Foley & Lardner, Milwaukee, Wisconsin, legal advisors to the
Company. Michael W. Grebe, a partner in the firm of Foley & Lardner, is a
director of the Company.
EXPERTS
The consolidated financial statements of Oshkosh at September 30, 1997 and
1996 and for each of the three years in the period ended September 30, 1997
appearing in this Prospectus and Registration Statement and the financial
statement schedule incorporated by reference from Oshkosh's Annual Report (Form
10-K) for the year ended September 30, 1997 have been audited by Ernst & Young
LLP, independent auditors, as set forth in their reports thereon appearing
elsewhere herein and incorporated by reference therein, and are included in
reliance upon such reports given upon the authority of such firm as experts in
accounting and auditing. The consolidated financial statements of McNeilus as of
February 28, 1997 and February 29, 1996 and for each of the three years in the
period ended February 28, 1997 included in this Prospectus and Registration
Statement have been audited by Larson, Allen, Weishair and Co., LLP, independent
auditors, as set forth in their report thereon appearing elsewhere herein, and
are included in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
103
<PAGE> 108
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Oshkosh are hereby
incorporated by reference into this Prospectus except as superseded or modified
herein: (1) the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997; (2) the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended December 31, 1997; (3) the Proxy Statement for the
Company's 1998 Annual Meeting of Shareholders dated December 29, 1997; and (4)
the Company's Current Reports on Form 8-K dated February 6, 1998 and February
26, 1998. All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and through the period specified in the Registration Rights Agreement
during which Participating Broker-Dealers are authorized to deliver this
Prospectus shall be deemed to be incorporated by reference into this Prospectus
and to be a part hereof from the date of filing of such documents (such
documents, and the documents enumerated above, being hereinafter referred to as
"Incorporated Documents"). Any statement contained in any Incorporated Document
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Statements in this
Prospectus with respect to the subject matter presented in the Incorporated
Documents are intended to supersede such statements in the Incorporated
Documents. Any such statement so modified or superseded shall not be deemed,
except as modified or superseded, to constitute a part of this Prospectus. The
Company will provide without charge to each person, including any beneficial
owner, to whom this Prospectus is delivered, upon written or oral request of
such person, a copy of any and all of the documents that have been or may be
incorporated by reference herein (other than exhibits to such documents which
are not specifically incorporated by reference into such documents). Such
requests should be directed to Oshkosh Truck Corporation, P.O. Box 2566,
Oshkosh, Wisconsin 54903-2566, telephone number (920) 235-9151. The information
relating to the Company contained in this Prospectus does not purport to be
comprehensive and should be read together with the information contained in the
Incorporated Documents.
AVAILABLE INFORMATION
Oshkosh Truck Corporation is subject to the informational requirements of
the Exchange Act, and in accordance therewith files reports, proxy statements
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549, and at the Commission's following regional Offices: Suite 1400,
Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois 60661; and
13th Floor, Seven World Trade Center, New York, New York 10048. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549. The Company's shares of Common Stock are quoted for trading on the Nasdaq
National Market and reports, proxy statements and other information concerning
the Company also may be inspected at the offices of the National Association of
Securities Dealers, 9513 Key West Avenue, Rockville, Maryland 20850. The
Commission maintains a World Wide Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The address of the site is
http://www.sec.gov.
The Company has filed with the Commission a registration statement on Form
S-4 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is made to the Registration
Statement.
104
<PAGE> 109
INDEX TO HISTORICAL FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
OSHKOSH TRUCK CORPORATION
Report of Ernst & Young LLP, Independent Auditors........... F-2
Consolidated Balance Sheets as of September 30, 1997 and
1996, and as of December 31, 1997 (unaudited)............. F-3
Consolidated Statements of Income (Loss) for each of the
three fiscal years in the period ended September 30, 1997,
and for the three month periods ended December 31, 1997
and 1996 (unaudited)...................................... F-4
Consolidated Statements of Shareholders' Equity for each of
the three fiscal years in the period ended September 30,
1997, and for the three month period ended December 31,
1997 (unaudited).......................................... F-5
Consolidated Statements of Cash Flows for each of the three
fiscal years in the period ended September 30, 1997, and
for the three month periods ended December 31, 1997 and
1996 (unaudited).......................................... F-6
Notes to Consolidated Financial Statements.................. F-7
MCNEILUS COMPANIES, INC.
Report of Larson, Allen, Weishair and Co., LLP, Independent
Auditors.................................................. F-22
Consolidated Balance Sheets as of February 28, 1997 and
February 29, 1996, and as of November 30, 1997
(unaudited)............................................... F-23
Consolidated Statements of Income for each of the three
fiscal years in the period ended February 28, 1997, and
for the nine month periods ended November 30, 1997 and
1996 (unaudited).......................................... F-24
Consolidated Statements of Stockholders' Equity for each of
the three fiscal years in the period ended February 28,
1997, and for the nine month period ended November 30,
1997
(unaudited)............................................... F-25
Consolidated Statements of Cash Flows for each of the three
fiscal years in the period ended February 28, 1997, and
for the nine month periods ended November 30, 1997 and
1996 (unaudited).......................................... F-26
Notes to Consolidated Financial Statements.................. F-27
</TABLE>
F-1
<PAGE> 110
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors
Oshkosh Truck Corporation
We have audited the accompanying consolidated balance sheets of Oshkosh Truck
Corporation (the Company) as of September 30, 1997 and 1996, and the related
consolidated statements of income (loss), shareholders' equity and cash flows
for each of the three years in the period ended September 30, 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of the Company at
September 30, 1997 and 1996, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended September 30,
1997, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Milwaukee, Wisconsin
October 31, 1997, except for
Notes 4 and 13, as to which
the date is December 8, 1997
F-2
<PAGE> 111
OSHKOSH TRUCK CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
1997 1996 1997
------------- ------------- ------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................... $ 23,219 $ 127 $ 198
Receivables, net.................................. 81,235 76,624 54,215
Inventories....................................... 76,497 106,289 86,744
Prepaid expenses.................................. 3,405 3,619 3,487
Refundable income taxes........................... -- 6,483 418
Deferred income taxes............................. 9,479 7,055 9,169
-------- -------- --------
Total current assets........................... 193,835 200,197 154,231
Deferred charges.................................... 1,067 2,645 793
Other long-term assets.............................. 6,660 7,834 7,455
Property, plant and equipment:
Land.............................................. 7,172 7,131 7,172
Buildings......................................... 42,220 40,421 42,392
Machinery and equipment........................... 78,270 77,485 79,566
-------- -------- --------
127,662 125,037 129,130
Less accumulated depreciation..................... (72,174) (67,002) (73,790)
-------- -------- --------
Net property, plant and equipment.............. 55,488 58,035 55,340
Goodwill and other intangible assets, net........... 163,344 166,450 163,639
-------- -------- --------
Total assets........................................ $420,394 $435,161 $381,458
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................. $ 48,220 $ 49,178 $ 40,556
Customer advances................................. 30,124 27,793 35,261
Payroll-related obligations....................... 15,157 12,843 12,897
Accrued warranty.................................. 12,320 8,942 11,103
Other current liabilities......................... 21,365 16,997 15,966
Net current liabilities of discontinued
operations..................................... 1,536 1,975 1,376
Current maturities of long-term debt and revolving
credit facility................................ 15,000 15,000 7,820
-------- -------- --------
Total current liabilities...................... 143,722 132,728 124,979
Long-term debt...................................... 120,000 142,882 95,000
Postretirement benefit obligations.................. 10,147 9,517 10,244
Other long-term liabilities......................... 1,811 1,843 3,756
Net long-term liabilities of discontinued
operations........................................ 1,362 2,581 1,031
Deferred income taxes............................... 22,452 24,008 22,701
Shareholders' equity:
Class A Common Stock.............................. 4 4 4
Common Stock...................................... 89 89 89
Paid-in capital................................... 13,591 16,059 13,989
Retained earnings................................. 120,085 114,246 122,112
Cost of Common Stock in treasury.................. (12,869) (8,796) (12,447)
-------- -------- --------
Total shareholders' equity..................... 120,900 121,602 123,747
-------- -------- --------
Total liabilities and shareholders' equity.......... $420,394 $435,161 $381,458
======== ======== ========
</TABLE>
See accompanying notes.
F-3
<PAGE> 112
OSHKOSH TRUCK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, DECEMBER 31,
-------------------------------- --------------------
1997 1996 1995 1997 1996
---- ---- ---- ---- ----
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Continuing operations:
Net sales............................... $683,234 $413,455 $438,557 $151,801 $150,320
Cost of sales........................... 594,390 378,376 384,579 129,494 130,737
-------- -------- -------- -------- --------
Gross income....................... 88,844 35,079 53,978 22,307 19,583
Operating expenses:
Selling, general and administrative..... 47,742 32,205 29,242 11,676 10,025
Engineering, research and development... 7,847 6,304 5,443 2,143 1,993
Amortization of goodwill and other
intangibles.......................... 4,470 171 -- 1,126 1,132
-------- -------- -------- -------- --------
Total operating expenses........... 60,059 38,680 34,685 14,945 13,150
-------- -------- -------- -------- --------
Income (loss) from operations............. 28,785 (3,601) 19,293 7,362 6,433
Other income (expense):
Interest expense........................ (12,722) (929) (679) (2,504) (3,558)
Interest income......................... 717 1,040 774 165 206
Miscellaneous, net...................... (278) 1,508 (466) 72 (9)
-------- -------- -------- -------- --------
(12,283) 1,619 (371) (2,267) (3,361)
-------- -------- -------- -------- --------
Income (loss) from continuing operations
before income taxes..................... 16,502 (1,982) 18,922 5,095 3,072
Provision (credit) for income taxes....... 6,496 (1,741) 7,285 1,955 1,448
-------- -------- -------- -------- --------
Income (loss) from continuing
operations.............................. 10,006 (241) 11,637 3,140 1,624
Discontinued operations:
Loss from discontinued operations, net
of income tax benefit of $1,623...... -- -- (3,137) -- --
Gain (loss) on disposal of operations,
net of income tax benefit of $1,827
in 1996 and $357 in 1995............. -- (2,859) 716 -- --
-------- -------- -------- -------- --------
-- (2,859) (2,421) -- --
-------- -------- -------- -------- --------
Net income (loss)......................... $ 10,006 $ (3,100) $ 9,216 $ 3,140 $ 1,624
======== ======== ======== ======== ========
Earnings (loss) per share:
Continuing operations................... $ 1.18 $ (.03) $ 1.32 $ .38 $ .19
Discontinued operations................. -- (.32) (.28) -- --
-------- -------- -------- -------- --------
Net income (loss)....................... $ 1.18 $ (.35) $ 1.04 $ .38 $ .19
======== ======== ======== ======== ========
Earnings (loss) per share assuming
dilution:
Continuing operations................... $ 1.17 $ (.03) $ 1.31 $ .37 $ .19
Discontinued operations................. -- (.32) (.27) -- --
-------- -------- -------- -------- --------
Net income (loss)....................... $ 1.17 $ (.35) $ 1.04 $ .37 $ .19
======== ======== ======== ======== ========
</TABLE>
See accompanying notes.
F-4
<PAGE> 113
OSHKOSH TRUCK CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
PENSION
COMMON PAID-IN RETAINED TREASURY LIABILITY
STOCK CAPITAL EARNINGS STOCK ADJUSTMENT TOTAL
------ ------- -------- -------- ---------- -----
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1994............ $90 $ 7,623 $116,890 $ (2,591) $ (454) $121,558
Net income............................... -- -- 9,216 -- -- 9,216
Cash dividends:
Class A Common Stock
($.435 per share).................... -- -- (191) -- -- (191)
Common Stock ($.500 per share)......... -- -- (4,218) -- -- (4,218)
Sale of 350,000 shares of Common Stock... 3 5,247 -- -- -- 5,250
Sale of 1,250,000 stock warrants......... -- 4,187 -- -- -- 4,187
Common Stock issuance costs and cost of
stock restriction agreement............ -- (863) -- -- -- (863)
Purchase of Common Stock for treasury.... -- -- -- (933) -- (933)
Exercise of stock options................ -- 12 -- 121 -- 133
Incentive compensation awards............ -- 327 -- -- -- 327
Pension liability adjustment............. -- -- -- -- (1,053) (1,053)
--- ------- -------- -------- ------- --------
Balance at September 30, 1995............ 93 16,533 121,697 (3,403) (1,507) 133,413
Net loss................................. -- -- (3,100) -- -- (3,100)
Cash dividends:
Class A Common Stock
($.435 per share).................... -- -- (177) -- -- (177)
Common Stock ($.500 per share)......... -- -- (4,174) -- -- (4,174)
Purchase of Common Stock for treasury.... -- -- -- (5,618) -- (5,618)
Exercise of stock options................ -- 43 -- 225 -- 268
Termination of incentive compensation
awards................................. -- (517) -- -- -- (517)
Pension liability adjustment............. -- -- -- -- 1,507 1,507
--- ------- -------- -------- ------- --------
Balance at September 30, 1996............ 93 16,059 114,246 (8,796) -- 121,602
Net income............................... -- -- 10,006 -- -- 10,006
Cash dividends:
Class A Common Stock
($.435 per share).................... -- -- (177) -- -- (177)
Common Stock ($.500 per share)......... -- -- (3,990) -- -- (3,990)
Purchase of Common Stock for treasury.... -- -- -- (4,246) -- (4,246)
Purchase of 1,250,000 stock warrants..... -- (2,504) -- -- -- (2,504)
Exercise of stock options................ -- 36 -- 173 -- 209
--- ------- -------- -------- ------- --------
Balance at September 30, 1997............ 93 13,591 120,085 (12,869) -- 120,900
Net income............................... -- -- 3,140 -- -- 3,140
Cash dividends:
Class A Common Stock ($.10875 per
share)............................... -- -- (45) -- -- (45)
Common Stock ($.12500 per share)....... -- -- (1,068) -- -- (1,068)
Issuance of stock under incentive
compensation plan...................... -- 398 -- 422 -- 820
--- ------- -------- -------- ------- --------
Balance at December 31, 1997
(Unaudited)............................ $93 $13,989 $122,112 $(12,447) $ -- $123,747
=== ======= ======== ======== ======= ========
</TABLE>
See accompanying notes.
F-5
<PAGE> 114
OSHKOSH TRUCK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, DECEMBER 31,
--------------------------------- -------------------
1997 1996 1995 1997 1996
---- ---- ---- ---- ----
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) from continuing operations....... $ 10,006 $ (241) $11,637 $ 3,140 $ 1,624
Depreciation and amortization...................... 14,070 8,798 8,409 3,283 3,556
Write-off of investments........................... 200 4,125 -- -- --
Deferred income taxes.............................. (3,980) (1,381) 2,577 559 (177)
(Gain) loss on disposal of property, plant and
equipment........................................ (43) 77 (21) (18) 6
Changes in operating assets and liabilities:
Receivables...................................... (4,611) (10,648) (4,349) 27,020 20,972
Inventories...................................... 29,792 (25,071) (809) (8,357) 11,492
Prepaid expenses................................. 214 469 (540) (82) 405
Deferred charges................................. 1,578 333 (94) 274 (308)
Accounts payable................................. (958) 13,314 (4,314) (7,664) (11,494)
Customer advances................................ 2,331 930 (1,887) 5,137 (758)
Income taxes..................................... 7,446 (5,268) 636 (1,381) 2,739
Payroll-related obligations...................... 2,314 213 313 (1,440) (3,121)
Accrued warranty................................. 3,378 2,094 (639) (1,217) 578
Other current liabilities........................ 3,447 (4,646) 11 (4,517) (497)
Other long-term liabilities...................... 598 665 (4,764) 2,042 125
-------- --------- ------- -------- --------
Net cash provided from (used for) operating
activities................................ 65,782 (16,237) 6,166 16,779 25,142
INVESTING ACTIVITIES:
Acquisitions of businesses, net of cash acquired... -- (160,838) -- (3,461) --
Additions to property, plant and equipment......... (6,263) (5,355) (5,347) (1,697) (1,342)
Proceeds from sale of property, plant and
equipment........................................ 395 2,086 114 66 289
Increase in other long-term assets................. (1,532) (2,124) (937) (1,005) (174)
-------- --------- ------- -------- --------
Net cash used for investing activities....... (7,400) (166,231) (6,170) (6,097) (1,227)
NET CASH PROVIDED FROM (USED FOR) DISCONTINUED
OPERATIONS....................................... (1,658) 4,743 10,482 (491) (326)
FINANCING ACTIVITIES:
Net borrowings (repayments) of long-term debt and
revolving credit facility........................ (22,882) 157,882 -- (32,180) (17,882)
Sale of Common Stock and Common Stock warrants, net
of issuance costs................................ -- -- 8,574 -- --
Purchase of Common Stock, Common Stock warrants and
proceeds from exercise of stock options, net..... (6,541) (5,350) (800) -- 85
Dividends paid..................................... (4,209) (4,396) (4,372) (1,032) (1,074)
-------- --------- ------- -------- --------
Net cash provided from (used for) financing
activities................................ (33,632) 148,136 3,402 (33,212) (18,871)
-------- --------- ------- -------- --------
Increase (decrease) in cash and cash equivalents... 23,092 (29,589) 13,880 (23,021) 4,718
Cash and cash equivalents at beginning of period... 127 29,716 15,836 23,219 127
-------- --------- ------- -------- --------
Cash and cash equivalents at end of period......... $ 23,219 $ 127 $29,716 $ 198 $ 4,845
======== ========= ======= ======== ========
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest:
Continuing operations.......................... $ 12,974 $ 538 $ 759 $ 2,498 $ 3,451
Discontinued operations........................ -- -- 709 -- --
Cash paid (received) for income taxes............ 2,998 3,116 2,114 2,777 (1,115)
</TABLE>
See accompanying notes.
F-6
<PAGE> 115
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1997 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
OPERATIONS -- Oshkosh Truck Corporation and its wholly-owned subsidiaries
(the company) is a leading manufacturer of a wide variety of heavy duty
specialized trucks. The company sells its products into three principal markets
- -- fire and emergency support, defense, and other commercial truck markets. The
company's fire and emergency support business is principally conducted through
its wholly-owned subsidiary, Pierce Manufacturing Inc. (Pierce).
PRINCIPLES OF CONSOLIDATION AND PRESENTATION -- The consolidated financial
statements include the accounts of Oshkosh Truck Corporation and all its
wholly-owned subsidiaries and are prepared in conformity with U.S. generally
accepted accounting principles. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
All significant intercompany accounts and transactions have been eliminated.
CASH AND CASH EQUIVALENTS -- The company considers all highly liquid
investments with a maturity of three months or less when purchased to be cash
equivalents. Cash equivalents, consisting principally of commercial paper,
totaled $23,022 at September 30, 1997. The cost of these securities, which are
considered "available for sale" for financial reporting purposes, approximates
fair value at September 30, 1997, and December 31, 1997.
INVENTORIES -- The company values its inventories at the lower of cost,
computed principally on the last-in, first-out (LIFO) method, or market.
PROPERTY, PLANT AND EQUIPMENT -- Property, plant and equipment are recorded
at cost. Depreciation is provided over the estimated useful lives of the
respective assets principally on accelerated methods.
DEFERRED CHARGES -- Deferred charges include certain engineering and
technical support costs incurred in connection with multi-year government
contracts. These costs are charged to cost of sales when the related project is
billable to the government, or are amortized to cost of sales as base units are
delivered under the related contracts.
OTHER LONG-TERM ASSETS -- Other long-term assets include capitalized
software and related costs which are amortized on a straight-line method over a
three to five year period, deferred financing costs which are amortized to
interest expense over the term of the debt, prepaid funding of pension costs and
certain investments. During fiscal 1996, the company wrote off its $3,025 equity
investment in a Mexican bus manufacturer due to prolonged weakness in the
Mexican economy and continuing high losses and high leverage reported by the
Mexican affiliate. Also, in fiscal 1996, the company wrote off a $200 equity
investment in Steeltech Manufacturing, Inc. (Steeltech) and a $900 investment in
a joint venture which leases equipment to Steeltech (see Note 11).
GOODWILL AND OTHER INTANGIBLE ASSETS -- The cost of goodwill and other
intangible assets is amortized on a straight-line basis over the estimated
periods benefitted ranging from 13 to 40 years.
IMPAIRMENT OF LONG-LIVED ASSETS -- Property, plant and equipment, other
long-term assets and goodwill and other intangible assets are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. If the sum of the expected undiscounted
cash flows is less than the carrying value of the related asset or group of
assets, a loss is recognized for the difference between the fair value and
carrying value of the asset or group of assets. Such analyses necessarily
involve significant judgment.
F-7
<PAGE> 116
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CUSTOMER ADVANCES -- Customer advances principally represent amounts
received in advance of the completion of a fire apparatus vehicle. Certain of
these advances bear interest at variable rates approximating the prime rate.
REVENUE RECOGNITION -- Sales under fixed-price defense contracts are
recorded as units are accepted by the government. Change orders are not invoiced
until agreed upon by the government. Recognition of profit on change orders and
on contracts which do not involve fixed prices is based upon estimates which may
be revised during the terms of the contracts. Sales to commercial customers are
recorded when the goods or services are billable at time of shipment or delivery
of the trucks.
RESEARCH AND DEVELOPMENT -- Research and development costs are charged to
expense as incurred and amounted to approximately $7,847, $6,304, and $5,443 for
continuing operations during fiscal 1997, 1996, and 1995, respectively.
WARRANTY -- Provisions for estimated warranty and other related costs are
recorded at the time of sale and are periodically adjusted to reflect actual
experience. Amounts expensed with respect to continuing operations in fiscal
1997, 1996, and 1995 were $9,658, $7,741, and $4,518, respectively.
INCOME TAXES -- Deferred income taxes are provided to recognize temporary
differences between the financial reporting basis and the income tax basis of
the company's assets and liabilities using currently enacted tax rates and laws.
FAIR VALUES -- The carrying amounts of receivables, accounts payable and
long-term debt approximated fair value as of September 30, 1997 and 1996.
ENVIRONMENTAL REMEDIATION COSTS -- Statement of Position 96-1
"Environmental Remediation Liabilities" (SOP 96-1) became effective for the
company in fiscal 1997. In accordance with SOP 96-1, the company accrues for
losses associated with environmental remediation obligations when such losses
are probable and reasonably estimable. Costs of future expenditures for
environmental remediation obligations are not discounted to their present value.
Recoveries of environmental remediation costs from other parties are recorded as
assets when their receipt is deemed probable. The accruals are adjusted as
further information develops or circumstances change.
EARNINGS (LOSS) PER SHARE -- In February 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards (SFAS) No.
128, "Earnings per Share". SFAS No. 128 replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per share.
Unlike primary earnings per share, basic earnings per share excludes any
dilutive effects of options, warrants and convertible securities. Earnings per
share amounts for all periods have been presented and, where appropriate,
restated to conform to SFAS No. 128 requirements.
The following table sets forth the computation of basis and diluted
weighted average shares used in the per share calculations:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, DECEMBER 31,
--------------------------------- ---------------------
1997 1996 1995 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Denominator for basic earnings per
share................................. 8,502,166 8,828,224 8,823,766 8,340,854 8,645,106
Effect of dilutive options, warrants and
incentive compensation awards......... 43,916 -- 47,643 96,621 25,741
--------- --------- --------- --------- ---------
Denominator for dilutive earnings per
share................................. 8,546,082 8,828,224 8,871,409 8,437,475 8,670,847
========= ========= ========= ========= =========
</TABLE>
NEW ACCOUNTING STANDARDS -- In June 1997, the Financial Accounting
Standards Board issued SFAS No. 130, "Reporting Comprehensive Income." SFAS No.
130 establishes the standards for reporting and displaying comprehensive income
and its components (revenues, expenses, gains, and losses) as part of a full set
of financial statements. This statement requires that all elements of
comprehensive income be reported in a
F-8
<PAGE> 117
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
financial statement that is displayed with the same prominence as other
financial statements. The statement is effective for fiscal years beginning
after December 15, 1997. Since this statement applies only to the presentation
of comprehensive income, it will not have any impact on the company's results of
operations, financial position or cash flows.
In June 1997, the Financial Accounting Standards Board also issued SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information." SFAS
No. 131 establishes the standards for the manner in which public enterprises are
required to report financial and descriptive information about their operating
segments. The statement defines operating segments as components of an
enterprise for which separate financial information is available and evaluated
regularly as a means for assessing segment performance and allocating resources
to segments. A measure of profit or loss, total assets and other related
information are required to be disclosed for each operating segment. In
addition, this statement requires the annual disclosure of information
concerning revenues derived from the enterprise's products or services,
countries in which it earns revenue or holds assets, and major customers. The
statement is also effective for fiscal years beginning after December 15, 1997.
The adoption of SFAS No. 131 will not affect the company's results of operations
or financial position, but will affect the disclosure of segment information.
2. BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------ DECEMBER 31,
RECEIVABLES 1997 1996 1997
----------- ---- ---- ------------
(UNAUDITED)
<S> <C> <C> <C>
U.S. Government:
Amounts billed............................... $34,399 $ 27,353 $24,417
Amounts unbilled............................. 1,782 4,918 1,635
------- -------- -------
36,181 32,271 26,052
Commercial customers........................... 45,603 41,510 30,175
Other.......................................... 1,421 3,909 --
------- -------- -------
83,205 77,690 56,227
Less allowance for doubtful accounts........... (1,970) (1,066) (2,012)
------- -------- -------
$81,235 $ 76,624 $54,215
======= ======== =======
</TABLE>
The unbilled amounts represent estimated claims for government-ordered
changes which will be invoiced upon completion of negotiations and price
adjustment provisions which will be invoiced when they are agreed upon by the
government.
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------ DECEMBER 31,
INVENTORIES 1997 1996 1997
----------- ---- ---- ------------
(UNAUDITED)
<S> <C> <C> <C>
Finished products.............................. $ 6,430 $ 15,208 $ 6,798
Partially finished products.................... 36,661 51,533 43,437
Raw materials.................................. 44,455 47,580 47,696
------- -------- -------
Inventories at FIFO cost....................... 87,546 114,321 97,931
Less: Progress payments on U.S. government
contracts........................... (2,988) -- (2,988)
Excess of FIFO cost over LIFO cost....... (8,061) (8,032) (8,199)
------- -------- -------
$76,497 $106,289 $86,744
======= ======== =======
</TABLE>
Title to all inventories related to government contracts which provide for
progress payments vests in the government to the extent of unliquidated progress
payments.
F-9
<PAGE> 118
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------- DECEMBER 31,
GOODWILL AND OTHER INTANGIBLE ASSETS 1997 1996 1997
------------------------------------ ---- ---- ------------
USEFUL LIVES (UNAUDITED)
------------
<S> <C> <C> <C> <C>
Goodwill 40 Years.................. $103,887 $102,523 $103,887
Distribution network 40 Years.................. 53,000 53,000 53,000
Other 13-40 Years............... 11,098 11,098 12,519
-------- -------- --------
167,985 166,621 169,406
Less accumulated amortization................... (4,641) (171) (5,767)
-------- -------- --------
$163,344 $166,450 $163,639
======== ======== ========
</TABLE>
The increase in goodwill from fiscal 1996 to fiscal 1997 is due to
finalization of purchase accounting related to the Pierce acquisition.
The company engaged third party business valuation appraisers to determine
the fair value of the distribution network in connection with its acquisition of
Pierce (see Note 3). The company believes Pierce maintains the largest North
American fire apparatus distribution network and has exclusive contracts with
each distributor related to the fire apparatus product offerings manufactured by
Pierce. To establish the useful life of the distribution network, a historical
turnover analysis was performed.
3. ACQUISITIONS
On September 18, 1996, the company acquired for cash all of the issued and
outstanding stock of Pierce, a leading manufacturer and marketer of fire trucks
and other fire apparatus in the U.S. The acquisition price of $156,926,
including acquisition costs and net of cash acquired, was financed from
borrowings under a bank credit facility (see Note 4).
The acquisition was accounted for using the purchase method of accounting
and, accordingly, the operating results of Pierce are included in the company's
consolidated statements of income (loss) since the date of acquisition. The
purchase price, including acquisition costs, was allocated based on the
estimated fair values of the assets acquired and liabilities assumed at the date
of the acquisition and was subsequently adjusted during fiscal 1997.
Approximately $62,000 of the purchase price was allocated to the distribution
network and other intangible assets. The excess of the purchase price over the
estimated fair value of net assets acquired amounted to $103,887 which has been
accounted for as goodwill.
Pro forma unaudited consolidated operating results of the company, assuming
Pierce had been acquired as of October 1, 1995 and 1994, are summarized below:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
SEPTEMBER 30,
--------------------
1996 1995
---- ----
<S> <C> <C>
Net sales................................................ $605,439 $618,555
Income (loss) from continuing operations................. (1,262) 7,699
Net income (loss)........................................ (4,121) 4,901
Earnings (loss) per share:
Continuing operations............................... $ (0.14) $ 0.87
Net income (loss)................................... (0.47) 0.56
</TABLE>
These pro forma results have been prepared for informational purposes only
and include certain adjustments to depreciation expense related to acquired
plant and equipment, amortization expense arising from goodwill and other
intangible assets, interest expense on acquisition debt, elimination of certain
non-recurring expenses incurred by Pierce prior to the acquisition, and the
estimated related income tax effects of
F-10
<PAGE> 119
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
all such adjustments. Anticipated efficiencies from the consolidation of
Pierce's manufacturing facilities and from the synergies related to the
consolidation of certain functions among Pierce and the company were not fully
determinable and therefore have been excluded from the amounts included in the
pro forma operating results. These pro forma results do not purport to be
indicative of the results of operations which would have resulted had the
combination been in effect as of October 1, 1995 and 1994 or of the future
results of operations of the consolidated entities.
On November 9, 1995, the company through its wholly-owned subsidiary,
Summit Performance Systems, Inc. (Summit), acquired the land, buildings,
machinery and equipment, and technology of Friesz Manufacturing Company (Friesz)
from available cash for $3,912. Friesz was engaged in the manufacture and sale
of concrete mixer systems and related aftermarket replacements parts.
Approximately $2,150 of the purchase price has been allocated to intangible
assets, principally designs and related technology. The acquisition was
accounted for using the purchase method of accounting and, accordingly, the
operating results of Friesz are included in the company's consolidated
statements of income (loss) since the date of acquisition. Had the acquisition
occurred as of October 1, 1995 or 1994, there would have been no material pro
forma effects on the net sales, net income (loss) or earnings (loss) per share
of the company in fiscal 1996 or 1995.
4. LONG-TERM DEBT
On September 18, 1996, the company entered into a bank credit agreement
(the Bank Credit Agreement) to finance the acquisition of Pierce (see Note 3)
and to refinance a previous revolving credit facility. The Bank Credit Agreement
consists of a $150,000 term loan which requires annual principal payments of
$15,000 through fiscal 2002 and a final payment of $60,000 on September 30,
2003, and a $50,000 revolving credit facility for working capital purposes which
expires on September 30, 1999. The total of all term loan and revolving credit
facility borrowings, excluding letters of credit, must be reduced to or below
$145,000, and $130,000 for 60 consecutive days in fiscal 1998 and 1999,
respectively.
Interest on the term loan and the revolving credit facility is payable at
prime or at the applicable Eurodollar rate plus 2.25% and 1.875%, respectively,
subject to adjustment if certain financial criteria are met (weighted-average
rate of 7.98% and zero, respectively, at September 30, 1997, 8.25% and 8.25%,
respectively, at September 30, 1996, and 7.72% and 8.5%, respectively, at
December 31, 1997).
The company is charged a 0.25% fee with respect to any unused balance under
its revolving credit facility, and a 1.875% fee with respect to any letters of
credit issued under the revolving credit facility. These fees are subject to
adjustment if certain financial criteria are met. At September 30, 1997, $2,962
of standby letters of credit reduced available capacity under the revolving
credit facility to $47,038.
At September 30, 1997, substantially all the tangible and intangible assets
of the company are pledged as collateral under the Bank Credit Agreement. Among
other restrictions, the Bank Credit Agreement: (1) limits payments of dividends,
purchases of the company's stock, and capital expenditures; (2) requires that
certain financial ratios be maintained at prescribed levels; (3) restricts the
ability of the company to make additional borrowings, or to consolidate, merge
or otherwise fundamentally change the ownership of the company; and (4) limits
investments, dispositions of assets and guarantees of indebtedness. The company
believes that such limitations should not impair its future operating
activities.
The aggregate annual maturities of long-term debt for the five years
succeeding September 30, 1997, are as follows: 1998 -- $15,000; 1999 -- $15,000;
2,000 -- $15,000; 2001 -- $15,000; and 2002 -- $15,000.
From October 1, 1997 through December 8, 1997, the company paid from
available cash the $15,000 mandatory principal payment due September 30, 1998
and paid an additional $25,000 on the term loan which will be applied on a pro
rata basis to the principal payments due in the fiscal years 1999 to 2003.
F-11
<PAGE> 120
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
5. INCOME TAXES
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30,
-------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
INCOME TAX PROVISION (CREDIT)
Current:
Federal........................................... $ 8,236 $ 2,988 $5,572
State............................................. 1,866 368 873
------- ------- ------
Total current................................ 10,102 3,356 6,445
Deferred:
Federal........................................... (3,271) (4,630) 763
State............................................. (335) (467) 77
------- ------- ------
Total deferred............................... (3,606) (5,097) 840
------- ------- ------
$ 6,496 $(1,741) $7,285
======= ======= ======
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30,
-------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
EFFECTIVE RATE RECONCILIATION
U.S. federal tax rate.............................. 35.0% (34.0)% 35.0%
State income taxes, net............................ 6.0 (5.0) 3.5
Reduction of prior years' excess tax provisions.... (5.5) (50.5) --
Foreign sales corporation.......................... (1.5) (5.2) (0.6)
Goodwill amortization.............................. 5.4 -- --
Other, net......................................... -- 6.9 0.6
---- ----- ----
39.4% (87.8)% 38.5%
==== ===== ====
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30,
-----------------------
1997 1996
---- ----
<S> <C> <C>
DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets:
Other current liabilities............................ $ 5,277 $ 6,625
Accrued warranty..................................... 4,439 3,194
Postretirement benefit obligations................... 3,916 3,674
Investments.......................................... 1,887 1,801
Payroll-related obligations.......................... 1,846 818
Other................................................ 729 419
-------- --------
Total deferred tax assets....................... 18,094 16,531
Deferred tax liabilities:
Intangible assets.................................... 23,402 24,150
Property, plant and equipment........................ 4,175 5,972
Inventories.......................................... 2,341 1,922
Deferred charges..................................... 1,091 1,091
Other................................................ 58 349
-------- --------
Total deferred tax liabilities.................. 31,067 33,484
-------- --------
Net deferred tax liability...................... $(12,973) $(16,953)
======== ========
</TABLE>
The company has not recorded a valuation allowance with respect to any
deferred tax assets.
F-12
<PAGE> 121
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
6. EMPLOYEE BENEFIT PLANS
The company has defined benefit pension plans covering substantially all
employees. The plans provide benefits based on compensation, years of service
and date of birth. The company's policy is to fund the plans in amounts which
comply with contribution limits imposed by law.
Components of net periodic pension cost for these plans for fiscal 1997,
1996, and 1995, including costs of discontinued operations which are not
significant in any year presented but excluding Pierce pension costs for 1996
due to the proximity of its acquisition to the company's fiscal year end, are as
follows:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30,
--------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Service cost -- benefits earned during year........ $ 1,387 $ 1,149 $ 1,140
Interest cost on projected benefit obligations..... 2,439 1,979 1,862
Actual return on plan assets....................... (8,789) (3,347) (2,505)
Net amortization and deferral...................... 6,123 1,232 438
------- ------- -------
Net periodic pension cost.......................... $ 1,160 $ 1,013 $ 935
======= ======= =======
</TABLE>
The following table summarizes the funded status of the pension plans and
the amounts recognized in the company's consolidated balance sheets at September
30, 1997 and 1996:
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------
1997 1996
---- ----
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested................................................... $29,334 $26,009
Nonvested................................................ 694 602
------- -------
Accumulated benefit obligations............................ 30,028 26,611
Adjustment for projected benefit obligations............... 4,759 4,731
------- -------
Projected benefit obligations.............................. 34,787 31,342
Plan assets at fair value.................................. 39,556 31,089
------- -------
Plan assets in excess of (less than) projected benefit
obligations.............................................. 4,769 (253)
Unrecognized net transition asset.......................... (594) (661)
Unrecognized net (gain) loss............................... (1,538) 4,811
Unrecognized prior service cost............................ 1,229 345
------- -------
Prepaid pension asset...................................... $ 3,866 $ 4,242
======= =======
</TABLE>
The plans' assets are comprised of investments in commingled equity and
fixed income funds and individually managed equity portfolios.
Actuarial assumptions are as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Discount rate............................................ 7.75% 7.75% 7.50%
Rate of increase in compensation......................... 4.50 4.50 4.50
Expected long-term rate of return on plan assets......... 9.25 9.25 9.25
</TABLE>
In addition to providing pension benefits for the majority of its
employees, the company provides health benefits to certain of its retirees and
their eligible spouses. Approximately 50% of the company's employees become
eligible for these benefits if they reach normal retirement age while working
for the company.
F-13
<PAGE> 122
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table summarizes the status of the postretirement benefit
plan and the amounts recognized in the company's consolidated balance sheets for
the periods indicated:
<TABLE>
<CAPTION>
SEPTEMBER 30,
-----------------
1997 1996
---- ----
<S> <C> <C>
Postretirement benefit obligations:
Retirees.................................................. $ 2,828 $2,929
Fully eligible active participants........................ 522 397
Other active participants................................. 5,647 4,865
------- ------
8,997 8,191
Unrecognized net gain....................................... 1,150 1,326
------- ------
Postretirement benefit obligations.......................... $10,147 $9,517
======= ======
</TABLE>
Net periodic postretirement benefit cost for fiscal 1997, 1996, and 1995,
including discontinued operations which is not significant in any year
presented, includes the following components:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
SEPTEMBER 30,
------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Service cost................................................ $366 $353 $372
Interest cost on the accumulated postretirement benefit
obligation................................................ 613 580 610
Amortization of unrecognized net gain....................... (32) -- --
---- ---- ----
Net periodic postretirement benefit cost.................... $947 $933 $982
==== ==== ====
</TABLE>
Net change in postretirement benefit obligations includes the following:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
SEPTEMBER 30,
-----------------
1997 1996
---- ----
<S> <C> <C>
Balance at beginning of year................................ $ 9,517 $8,839
Benefits paid............................................... (317) (255)
Net periodic postretirement benefit cost.................... 947 933
------- ------
Balance at end of year...................................... $10,147 $9,517
======= ======
</TABLE>
The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation was 10.2% in fiscal 1997, declining to 6.5% in
fiscal 2006. The weighted average discount rate used in determining the
postretirement benefit obligation was 7.75% in fiscal 1997 and 1996. If the
health care cost trend rate was increased by 1%, the postretirement benefit
obligation at September 30, 1997 would increase by $799 and net periodic
postretirement benefit cost for fiscal 1997 would increase by $107.
The company has defined contribution 401(k) plans covering substantially
all employees. The plans allow employees to defer 2% to 19% of their income on a
pre-tax basis. Each employee who elects to participate is eligible to receive
company matching contributions. Amounts expensed for company matching
contributions for continuing operations were $825, $401, and $407 in fiscal
1997, 1996, and 1995, respectively.
7. SHAREHOLDER'S EQUITY
The company is authorized to issue 1,000,000 shares of $.01 par value Class
A Common Stock of which 406,878 shares and 409,258 shares were issued and
outstanding at September 30, 1997 and 1996, respectively. The company is
authorized to issue 18,000,000 shares of $.01 par value Common Stock. At
September 30,
F-14
<PAGE> 123
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
1997, 8,951,287 and 7,900,481 shares of Common Stock were issued and
outstanding, respectively. At September 30, 1996, 8,948,907 and 8,227,770 shares
of Common Stock were issued and outstanding, respectively. The company is also
authorized to issue up to 2,000,000 shares of $.01 par value Preferred Stock,
none of which were issued or outstanding at September 30, 1997 or 1996.
On May 2, 1997, the company and Freightliner Corporation (Freightliner)
formally terminated a strategic alliance formed on June 2, 1995. The company
repurchased from Freightliner 350,000 shares of its Common Stock and 1,250,000
warrants for the purchase of additional shares of Common Stock for a total of
$6,750. The company and Freightliner will continue to supply each other with
parts and components.
The company has a stock restriction agreement with two shareholders owning
the majority of the company's Class A Common Stock. The agreement is intended to
allow for an orderly transition of Class A Common Stock into Common Stock. The
agreement provides that at the time of death or incapacity of the survivor of
them, the two shareholders will exchange all of their Class A Common Stock for
Common Stock, and at that time, if not earlier, will support an amendment to the
Articles of Incorporation which will provide for a mandatory conversion of all
Class A Common Stock into Common Stock.
Each share of Class A Common Stock is convertible into Common Stock on a
one-for-one basis. As of September 30, 1997, 406,878 shares of Common Stock are
reserved for the conversion of Class A Common Stock. In July 1995, the company
authorized the buyback of up to one million shares of the company's Common
Stock. As of September 30, 1997 and 1996, the company had purchased 461,535
shares of its Common Stock at an aggregate cost of $6,551.
Dividends are required to be paid on both the Class A Common Stock and
Common Stock at any time that dividends are paid on either. Each share of Common
Stock is entitled to receive 115% of any dividend paid on each share of Class A
Common Stock, rounded up or down to the nearest $0.0025 per share.
Holders of the Common Stock have the right to elect or remove as a class
25% of the entire Board of Directors of the company rounded to the nearest whole
number of directors, but not less than one. Holders of Common Stock are not
entitled to vote on any other company matters, except as may be required by law
in connection with certain significant actions such as certain mergers and
amendments to the company's Articles of Incorporation, and are entitled to one
vote per share on all matters upon which they are entitled to vote. Holders of
Class A Common Stock are entitled to elect the remaining directors (subject to
any rights granted to any series of Preferred Stock) and are entitled to one
vote per share for the election of directors and on all matters presented to the
shareholders for vote.
The Common Stock shareholders are entitled to receive a liquidation
preference of $7.50 per share before any payment or distribution to holders of
the Class A Common Stock. Thereafter, holders of the Class A Common Stock are
entitled to receive $7.50 per share before any further payment or distribution
to holders of the Common Stock. Thereafter, holders of the Class A Common Stock
and Common Stock share on a pro rata basis in all payments or distributions upon
liquidation, dissolution or winding up of the company.
8. STOCK OPTION AND PERFORMANCE SHARE AWARD PLANS
The company has reserved 756,071 shares of Common Stock at September 30,
1997 to provide for the exercise of outstanding stock options and warrants, and
the issuance of Common Stock under incentive compensation awards. Under the 1990
Incentive Stock Plan for the Key Employees (the Plan), officers, other key
employees and directors may be granted options to purchase up to an aggregate of
825,000 shares of the company's Common Stock at not less than the fair market
value of such shares on the date of grant. Participants may also be awarded
grants of restricted stock under the Plan. The Plan expires on April 9, 2000.
Options become exercisable ratably on the first, second, third anniversary of
the date of grant. Options to purchase shares expire not later than ten years
and one month after the grant of option.
F-15
<PAGE> 124
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table summarizes the transactions of the Plan for the three
year period ended September 30, 1997.
<TABLE>
<CAPTION>
NUMBER OF WEIGHTED-AVERAGE
OPTIONS EXERCISE PRICE
--------- ----------------
<S> <C> <C>
Unexercised options outstanding --
September 30, 1994................................. 400,649 $10.22
Options granted................................. 100,500 13.84
Options exercised............................... (14,250) 9.31
Options forfeited or expired.................... (9,831) 12.24
------- ------
Unexercised options outstanding --
September 30, 1995................................. 477,068 10.96
Options granted................................. 14,500 14.68
Options exercised............................... (24,515) 9.72
Options forfeited or expired.................... (6,251) 12.58
------- ------
Unexercised options outstanding --
September 30, 1996................................. 460,802 11.12
Options granted................................. 5,000 12.00
Options exercised............................... (20,331) 10.34
Options forfeited or expired.................... (7,570) 12.97
------- ------
Unexercised options outstanding --
September 30, 1997................................. 437,901 $11.14
======= ======
Price range $7.88 -- $11.25 (weighted-average
contractual life of 5.6 years and weighted-average
exercise price of $9.78)........................... 303,151
Price range $12.00 -- $15.25 (weighted-average
contractual life of 7.3 years and weighted-average
exercise price of $14.19).......................... 134,750
-------
437,901
=======
Exercisable options at September 30, 1997............ 391,403
Shares available for grant at September 30, 1997..... 318,170
</TABLE>
SFAS No. 123, "Accounting for Stock-Based Compensation", became effective
for the company in fiscal 1997. As allowed by SFAS 123, the company has elected
to continue to follow Accounting Principles Board Opinion (APB) No. 25,
"Accounting for Stock Issued to Employees" in accounting for the Plan. Under APB
No. 25, the company does not recognize compensation expense on the issuance of
its stock options because the option terms are fixed and the exercise price
equals the market price of the underlying stock on the grant date.
As required by SFAS 123, the company has determined the pro forma
information as if the company had accounted for stock options granted since
September 30, 1995 under the fair value method of SFAS 123. The Black-Scholes
option pricing model was used with the following weighted-average assumptions:
risk-free interest rates of 6.27% in 1997 and 5.39% and 6.38% in 1996; dividend
yield of 4.17% in 1997 and 3.60% and 3.28% in 1996; expected common stock market
price volatility factor of .305; and a weighted-average expected life of the
options of six years. The weighted-average fair value of options granted in 1997
and 1996 was $3.07 and $4.08 per share, respectively. The pro forma effect of
these options on net earnings and earnings per share was not material. These pro
forma calculations only include the effects of 1996 and 1997 grants. As such,
the impacts are not necessarily indicative of the effects on reported net income
of future years.
F-16
<PAGE> 125
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
9. OPERATING LEASES
Total rental expense for plant and equipment charged to continuing
operations under noncancelable operating leases was $886, $797, and $1,004 in
fiscal 1997, 1996, and 1995, respectively. Minimum rental payments due under
operating leases for subsequent fiscal years are: 1998 -- $937; 1999 -- $545;
2000 -- $212; 2001 -- $123; and 2002 -- $71.
Included in rental expense are charges of $128, $128, and $215 in fiscal
1997, 1996, and 1995, respectively, relating to leases between the company and
certain shareholders.
10. DISCONTINUED OPERATIONS
On June 2, 1995, Freightliner acquired certain assets of the company's
motor home, bus and van chassis business. The consideration included cash of
$23,815 and the assumption by Freightliner of certain liabilities. The assets
sold to Freightliner consisted of inventories, property, plant and equipment and
the company's ownership interest in a Mexican chassis manufacturer. The
liabilities assumed by Freightliner included certain warranty obligations
related to previously produced chassis in excess of certain specified amounts
for which the company retained liability and industrial revenue bonds that were
secured by the underlying real estate. The disposition of chassis business has
been accounted for as a discontinued operation. Revenues of the chassis business
for fiscal 1995 (through the date of sale) were $55,804. The net liabilities of
the discontinued operations have been segregated in the consolidated balance
sheets. Details of such amounts are as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30,
---------------- DECEMBER 31,
1997 1996 1997
---- ---- ------------
(UNAUDITED)
<S> <C> <C> <C>
Accrued warranty.................................. $1,352 $1,862 $1,161
Other, net........................................ 184 113 215
------ ------ ------
Net current liabilities of discontinued
operations...................................... $1,536 $1,975 $1,376
====== ====== ======
Accrued warranty.................................. $1,235 $2,181 $ 968
Other, net........................................ 127 400 63
------ ------ ------
Net long-term liabilities of discontinued
operations...................................... $1,362 $2,581 $1,031
====== ====== ======
</TABLE>
In fiscal 1996, the company incurred charges totaling $2,623 arising from
the write-off of receivables and other obligations related to the company's
former joint venture in Mexico. In addition, in fiscal 1996, the company
recognized additional warranty and other related costs totaling $2,063 with
respect to the company's former U.S. chassis business.
The company has allocated interest on the debt which was assumed by
Freightliner to discontinued operations. Interest expense included in
discontinued operations totaled $685 in fiscal 1995.
11. CONTINGENCIES, SIGNIFICANT ESTIMATES AND CONCENTRATIONS
The company is engaged in litigation against Super Steel Products
Corporation (SSPC), the company's former supplier of mixer systems for front
discharge concrete mixer trucks under a long-term supply contract. SSPC sued the
company in state court claiming that the company breached the contract. The
company counterclaimed for repudiation of contract. On July 26, 1996, a jury
returned a verdict for SSPC awarding damages totaling $4,485. On October 10,
1996, the state court judge overturned the verdict against the company, granted
judgment for the company on its counterclaim, and ordered a new trial for
damages on the company's counterclaim. Both SSPC and the company have appealed
the state court judge's decision. The Wisconsin Court of Appeals has agreed to
hear the case and both the company and SSPC have filed briefs in this matter.
F-17
<PAGE> 126
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The company currently is engaged in the arbitration of certain disputes
between the Oshkosh Florida Division and O.V. Containers, Inc., which arose out
of the performance of a contract to deliver 690 skeletal container chassis. The
arbitration is being conducted before a three-member panel under the commercial
dispute rules of the American Arbitration Association, and is not expected to
conclude before April 1998. The company is vigorously contesting warranty and
other claims made against it, and has asserted substantial claims against O.V.
Containers, Inc. The outcome of these matters cannot be predicted at the present
time.
As part of its routine business operations, the company disposes of and
recycles or reclaims certain industrial waste materials, chemicals and solvents
at third party disposal and recycling facilities which are licensed by
appropriate governmental agencies. In some instances, these facilities have been
and may be designated by the United States Environmental Protection Agency (EPA)
or a state environmental agency for remediation. Under the Comprehensive
Environmental Response, Compensation, and Liability Act (the Superfund law) and
similar state laws, each potentially responsible party (PRP) that contributed
hazardous substances may be jointly and severally liable for the costs
associated with cleaning up the site. Typically, PRPs negotiate a resolution
with the EPA and/or the state environmental agencies. PRPs also negotiate with
each other regarding allocation of the cleanup cost.
As to one such Superfund site, Pierce is one of 414 PRPs participating in
the costs of addressing the site and has been assigned an allocation share of
approximately 0.04%. Currently a remedial investigation/ feasibility study is
being completed, and as such, an estimate for the total cost of the remediation
of this site has not been made to date. However, based on estimates and the
assigned allocations, the company believes its liability at the site will not be
material and its share is adequately covered through reserves established by the
company at September 30, 1997. Actual liability could vary based on results of
the study, the resources of other PRPs, and the company's final share of
liability.
The company is addressing a regional trichloroethylene (TCE) groundwater
plume on the south side of Oshkosh, Wisconsin. The company believes there may be
multiple sources in the area. TCE was detected at the company's North Plant
facility with recent testing showing the highest concentrations in a monitoring
well located on the upgradient property line. Because the investigation process
is still ongoing, it is not possible for the company to estimate its long-term
total liability associated with this issue at this time. Also, as part of the
regional TCE groundwater investigation, the company conducted a groundwater
investigation of a former landfill located on company property. The landfill,
acquired by the company in 1972, is approximately 2.0 acres in size and is
believed to have been used for the disposal of household waste. Based on the
investigation, the company does not believe the landfill is one of the sources
of the TCE contamination. Based upon current knowledge, the company believes its
liability associated with the TCE issue will not be material and is adequately
covered through reserves established by the company at September 30, 1997.
However, this may change as investigations proceed by the company, other
unrelated property owners, and government.
The company is subject to other environmental matters and legal proceedings
and claims which arise in the ordinary course of business. Although the final
results of all such matters and claims cannot be predicted with certainty,
management believes that the ultimate resolution of all such matters and claims,
after taking into account the liabilities accrued with respect to such matters
and claims, will not have a material adverse effect on the company's financial
condition or results of operations. Actual results could vary, among other
things, due to the uncertainties involved in litigation.
The company has guaranteed certain customers' obligations under deferred
payment contracts and lease purchase agreements totaling approximately $4,178 at
September 30, 1997. The company is also contingently liable under bid,
performance and specialty bonds totaling approximately $94,101 at September 30,
1997.
Provisions for estimated warranty and other related costs are recorded at
the time of sale and are periodically adjusted to reflect actual experience. As
of September 30, 1997 and 1996, the company has accrued $12,320 and $8,942 for
warranty claims. Certain warranty and other related claims involve matters of
F-18
<PAGE> 127
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
dispute that ultimately are resolved by negotiation, arbitration or litigation.
Infrequently, a material warranty issue can arise which is beyond the scope of
the company's historical experience. During fiscal 1997 and 1996, the company
recorded warranty and other related costs for matters beyond the company's
historical experience totaling $3,770 and $5,602, respectively, with respect to
continuing operations and $2,063 with respect to discontinued operations in
fiscal 1996 (see Note 10). The additional charges in fiscal 1997 and 1996 with
regard to continuing operations principally related to the dispute with O.V.
Containers Inc., and secondarily to repair certain matters related to refuse and
front-discharge chassis. The additional warranty charges with respect to
discontinued operations in fiscal 1996 resulted from the underestimation of the
warranty liabilities retained by the company upon the sale of the company's
former chassis business. It is reasonably possible that additional warranty and
other related claims could arise from disputes or other matters beyond the scope
of the company's historical experience.
The company subcontracted production under an $85,000 ISO-Compatible
Palletized Flatracks (IPF) contract for the U.S. Army to Steeltech, a
minority-owned firm, pursuant to Department of Defense regulations under the IPF
contract. Due to financial difficulties encountered by Steeltech, the company
advanced working capital requirements to Steeltech in fiscal 1995 and 1996. As a
result of delays in the start-up of full-scale production under the IPF
contract, the company wrote off certain of its advances and an investment in
Steeltech totaling $3,300 in fiscal 1996. Such charges were determined based on
the amount of advances that were deemed to be unrealizable based on a projection
of Steeltech's cash flows through completion of the IPF contract. Steeltech's
IPF production passed first article testing in July 1996 and production is
expected to be completed in fiscal 1998. As of September 30, 1997 and 1996, the
company had outstanding advances due from Steeltech of $162 and $2,855,
respectively. In fiscal 1996, the company also wrote off an investment of $900
in a joint venture which leases equipment to Steeltech and accrued $1,084 for
the potential satisfaction of a guarantee of 50% of the outstanding indebtedness
of the joint venture. Such charges were based on a projection of Steeltech's
cash flows which indicated that Steeltech could not sustain its lease payments
to the joint venture, and because the company believed that there was not a
market for the sale of the leased equipment. The company is further contingently
liable for Department of Defense progress payments that have been advanced to
Steeltech totaling $3,352 at September 30, 1997 ($5,380 at September 30, 1996)
in the event of incomplete performance under the IPF contract. While management
currently expects the company to realize its remaining advances to Steeltech as
of September 30, 1997 and to avoid liability for progress payments advanced to
Steeltech, it is reasonably possible that the company could become liable for a
portion of such progress payments.
The company derives a significant portion of its revenue from the U.S.
Department of Defense, as follows:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30,
--------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Defense:
U.S. Department of Defense................. $272,042 $249,413 $260,112
Export..................................... 16,584 2,059 1,623
-------- -------- --------
288,626 251,472 261,735
Commercial:
Domestic................................... 373,946 141,540 159,326
Export..................................... 20,662 20,443 17,496
-------- -------- --------
394,608 161,983 176,822
-------- -------- --------
Net sales....................................... $683,234 $413,455 $438,557
======== ======== ========
</TABLE>
U.S. Department of Defense sales include $17,723 and $58,855 in fiscal 1997
and 1996, respectively, for products sold internationally under the Foreign
Military Sales (FMS) Program. There were no sales under the FMS Program in 1995.
F-19
<PAGE> 128
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Inherent in doing business with the U.S. Department of Defense are certain
risks, including technological changes and changes in levels of defense
spending. All U.S. Department of Defense contracts contain a provision that they
may be terminated at any time at the convenience of the government. In such an
event, the company is entitled to recover allowable costs plus a reasonable
profit earned to the date of termination.
Various actions or claims have been asserted or may be asserted in the
future by the government against the company. A potential action by the
government against the company in connection with a grand jury investigation was
commenced in 1989. In 1996, the government discontinued this investigation
without any action against the company or its employees, although a civil
investigation is possible.
12. UNAUDITED QUARTERLY RESULTS
<TABLE>
<CAPTION>
FISCAL 1997 FISCAL 1996
----------------------------------------------------- -------------------------
4TH QUARTER 3RD QUARTER 2ND QUARTER 1ST QUARTER 4TH QUARTER 3RD QUARTER
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Sales....................... $ 185,853 $ 176,596 $ 170,465 $ 150,320 $ 117,983 $ 111,950
Gross Income.................... 24,496 21,897 22,868 19,583 4,256 7,647
Income (Loss) From Continuing
Operations.................... 3,116 2,792 2,474 1,624 (1,645) (2,398)
Discontinued Operations......... -- -- -- -- (648) (2,211)
Net Income (Loss)............... 3,116 2,792 2,474 1,624 (2,293) (4,609)
Earnings (Loss) Per Share
Continuing Operations......... $.38 $.33 $.28 $.19 $(.19) $(.27)
Discontinued Operations....... -- -- -- -- (.07) (.25)
Net Income (Loss)............. .38 .33 .28 .19 (.26) (.52)
Dividends Per Share:
Class A Common Stock.......... $ 0.10875 $ 0.10875 $ 0.10875 $ 0.10875 $ 0.10875 $ 0.10875
Common Stock.................. 0.12500 0.12500 0.12500 0.12500 0.12500 0.12500
<CAPTION>
FISCAL 1996
-------------------------
2ND QUARTER 1ST QUARTER
----------- -----------
<S> <C> <C>
Net Sales....................... $ 103,139 $ 80,383
Gross Income.................... 12,725 10,451
Income (Loss) From Continuing
Operations.................... 2,230 1,572
Discontinued Operations......... -- --
Net Income (Loss)............... 2,230 1,572
Earnings (Loss) Per Share
Continuing Operations......... $.25 $.18
Discontinued Operations....... -- --
Net Income (Loss)............. .25 .18
Dividends Per Share:
Class A Common Stock.......... $ 0.10875 $ 0.10875
Common Stock.................. 0.12500 0.12500
</TABLE>
For the fourth quarter of 1996, continuing operations includes, on an
after-tax basis, approximately $2.4 million related to the IPF subcontract and
additional warranty provisions partially offset by reversal of $2.0 million of
income tax provisions and related accrued interest. Discontinued operations for
the fourth quarter of 1996 includes $0.6 million of after-tax charges related to
adjustments of estimated warranty expenses.
13. SUBSEQUENT EVENT
On December 8, 1997, the company agreed to acquire McNeilus Companies, Inc.
(McNeilus), a $300.0 million manufacturer and marketer of refuse and recycling
truck bodies, rear-discharge concrete mixers, and ready-mix batch plants. The
total purchase cost for all McNeilus stock and related non-compete and ancillary
agreements is $250.0 million in cash and will be financed through the issuance
of $100.0 million Senior Subordinated Notes and a $325.0 million senior debt
facility inclusive of a $100.0 million revolver and term loans of $100.0
million, $62.5 million and $62.5 million with terms of six, seven and eight
years, respectively.
The transaction is expected to close in the first quarter of calendar 1998.
Under certain conditions, if the acquisition is not consummated, the company may
be required to pay McNeilus a fee of $10.0 million, and conversely, McNeilus may
be required to pay a $10.0 million fee to the company.
Pierce and Summit, wholly owned subsidiaries of the company, will fully,
unconditionally, jointly and severally guarantee the company's obligations under
the Senior Subordinated Notes. The following is
F-20
<PAGE> 129
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
summarized combined financial information of Pierce and Summit, both of which
were acquired by the company during fiscal 1996.
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30,
-------------------
1997 1996
---- ----
<S> <C> <C>
Current assets........................................... $ 47,910 $ 49,917
Goodwill and other intangibles, net...................... 163,344 166,450
Other non-current assets................................. 26,063 24,660
Current liabilities...................................... 73,039 52,982
Non-current liabilities.................................. 25,633 26,948
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
SEPTEMBER 30,
-------------------
1997 1996
---- ----
<S> <C> <C>
Net sales................................................ $242,458 $ 9,417
Gross income............................................. 39,523 401
Income (loss) from operations............................ 21,466 (1,435)
</TABLE>
F-21
<PAGE> 130
INDEPENDENT AUDITOR'S REPORT
Board of Directors
McNeilus Companies, Inc.
We have audited the accompanying consolidated balance sheets of McNeilus
Companies, Inc. and Subsidiaries, as of February 28, 1997 and February 29, 1996,
and the related consolidated statements of income, stockholders' equity and cash
flows for each of the three years in the period ended February 28, 1997. These
consolidated financial statements are the responsibility of the Companies'
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of McNeilus
Companies, Inc. and Subsidiaries as of February 28, 1997 and February 29, 1996,
and the results of their operations and their cash flows for each of the three
years in the period ended February 28, 1997, in conformity with generally
accepted accounting principles.
LARSON, ALLEN, WEISHAIR & CO., LLP
Austin, Minnesota
April 23, 1997, except for Notes 2 and 13, as to
which the date is December 8, 1997.
F-22
<PAGE> 131
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
FEBRUARY 28, 1997, FEBRUARY 29, 1996
AND NOVEMBER 30, 1997
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents................................. $ 24,743 $ 16,005 $ 20,159
Accounts Receivable, Net.................................. 9,432 11,203 12,259
Net Investment in Sales-Type Leases -- Current............ 32,009 25,710 35,108
Prepaids and Miscellaneous Receivables.................... 1,134 2,258 6,099
Short-Term Investments.................................... 2,425 2,350 1,436
Inventories............................................... 87,194 99,006 59,189
Deferred Income Taxes..................................... 4,334 2,452 4,213
-------- -------- --------
Total Current Assets................................. 161,271 158,984 138,463
-------- -------- --------
NET ASSETS OF DISCONTINUED OPERATIONS....................... 6,856 6,583 6,988
-------- -------- --------
NET INVESTMENT IN SALES-TYPE LEASES......................... 101,870 95,237 86,536
-------- -------- --------
LONG-TERM RECEIVABLES AND INVESTMENTS....................... 5,695 2,908 14,513
-------- -------- --------
PROPERTY AND EQUIPMENT
Property and Equipment.................................... 58,955 56,490 59,219
Less Accumulated Depreciation............................. 30,524 26,807 31,323
-------- -------- --------
Net Property and Equipment........................... 28,431 29,683 27,896
-------- -------- --------
INTANGIBLE ASSETS........................................... 97 -- 324
-------- -------- --------
Total Assets......................................... $304,220 $293,395 $274,720
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable -- Trade................................. $ 9,470 $ 10,097 $ 10,324
Accrued Expenses and Other Liabilities.................... 20,871 14,758 17,042
Dividends Payable......................................... 119 92 --
Revolving Line-Of-Credit.................................. 5,200 10,100 --
Floor Plan Notes Payable.................................. 39,515 56,981 17,194
Current Maturities of Leasing Long-Term Debt.............. 32,703 26,126 35,787
Current Maturities of Other Long-Term Debt................ 1,341 2,044 286
-------- -------- --------
Total Current Liabilities............................ 109,219 120,198 80,633
-------- -------- --------
LONG-TERM DEBT -- LEASING................................... 88,867 81,538 77,852
-------- -------- --------
OTHER LONG-TERM DEBT........................................ 6,400 11,425 2,598
-------- -------- --------
DEFERRED INCOME TAXES....................................... 22,632 18,575 23,079
-------- -------- --------
STOCKHOLDERS' EQUITY
Common Stock, No Par Value
Class A, Voting, Authorized 100,000 Shares
76,061 Shares Issued and Outstanding................. 234 23,596 234
Class B, Nonvoting, Authorized 9,900,000 Shares
7,380,264, -0-, 7,380,264 Shares Issued and
Outstanding, Respectively............................ 22,668 -- 22,668
Retained Earnings......................................... 54,200 38,063 67,656
-------- -------- --------
Total Stockholders' Equity........................... 77,102 61,659 90,558
-------- -------- --------
Total Liabilities and Stockholders' Equity.................. $304,220 $293,395 $274,720
======== ======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
F-23
<PAGE> 132
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED FEBRUARY 28, 1997
FEBRUARY 29, 1996, AND FEBRUARY 28, 1995
AND THE NINE MONTHS ENDED NOVEMBER 30, 1997 AND 1996
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, NOVEMBER 30, NOVEMBER 30,
1997 1996 1995 1997 1996
------------ ------------ ------------ ------------ ------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
NET SALES.......................... $312,999 $331,359 $305,730 $246,774 $233,221
Cost of Sales...................... 257,163 281,790 259,437 203,690 191,930
-------- -------- -------- -------- --------
GROSS PROFIT....................... 55,836 49,569 46,293 43,084 41,291
-------- -------- -------- -------- --------
OPERATING EXPENSES
Selling.......................... 12,286 10,823 9,339 9,868 9,804
General and Administrative....... 16,806 16,634 19,980 15,976 15,049
-------- -------- -------- -------- --------
Total Operating Expenses.... 29,092 27,457 29,319 25,844 24,853
-------- -------- -------- -------- --------
INCOME FROM OPERATIONS............. 26,744 22,112 16,974 17,240 16,438
-------- -------- -------- -------- --------
OTHER INCOME (EXPENSE)
Interest Income -- Leasing....... 12,474 10,492 7,594 9,229 9,321
Interest Expense -- Leasing...... (9,903) (8,241) (5,528) (7,356) (7,413)
Interest Expense................. (2,752) (1,944) (1,801) (1,054) (2,090)
Miscellaneous Income............. 2,305 2,642 1,734 2,218 1,942
-------- -------- -------- -------- --------
Total Other Income
(Expense)................ 2,124 2,949 1,999 3,037 1,760
-------- -------- -------- -------- --------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES.............. 28,868 25,061 18,973 20,277 18,198
INCOME TAX PROVISION............... 10,920 9,503 8,923 7,423 7,013
-------- -------- -------- -------- --------
INCOME FROM CONTINUING
OPERATIONS....................... 17,948 15,558 10,050 12,854 11,185
INCOME FROM DISCONTINUED OPERATIONS
(NET OF INCOME TAXES)............ 117 271 849 602 421
-------- -------- -------- -------- --------
NET INCOME......................... $ 18,065 $ 15,829 $ 10,899 $ 13,456 $ 11,606
======== ======== ======== ======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
F-24
<PAGE> 133
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED FEBRUARY 28, 1997
FEBRUARY 29, 1996, AND FEBRUARY 28, 1995
AND THE NINE MONTHS ENDED NOVEMBER 30, 1997
<TABLE>
<CAPTION>
COMMON STOCK
-----------------------------------------
CLASS A CLASS B
----------------- -------------------- RETAINED
SHARES AMOUNT SHARES AMOUNT TOTAL EARNINGS
------ ------ ------ ------ ----- --------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
BALANCE, FEBRUARY 28, 1994............ 86,572 $26,856 -- $ -- $26,856 $18,332
Retirement of 1,761 Shares of
Common Stock..................... (1,761) (546) -- -- (546) (853)
Net Income.......................... -- -- -- -- -- 10,899
Dividends........................... -- -- -- -- -- (106)
------ ------- --------- ------- ------- -------
BALANCE, FEBRUARY 28, 1995............ 84,811 26,310 -- -- 26,310 28,272
Retirement of 8,750 Shares of
Common Stock..................... (8,750) (2,714) -- -- (2,714) (5,946)
Net Income.......................... -- -- -- -- -- 15,829
Dividends........................... -- -- -- -- -- (92)
------ ------- --------- ------- ------- -------
BALANCE, FEBRUARY 29, 1996............ 76,061 23,596 -- -- 23,596 38,063
Stock Dividend Issued............... -- (23,362) 7,606,100 23,362 -- --
Retirement of 225,836 Shares of
Common Stock..................... -- -- (225,836) (694) (694) (1,806)
Net Income.......................... -- -- -- -- -- 18,065
Dividends........................... -- -- -- -- -- (122)
------ ------- --------- ------- ------- -------
BALANCE, FEBRUARY 28, 1997............ 76,061 234 7,380,264 22,668 22,902 54,200
Net Income.......................... -- -- -- -- -- 13,456
------ ------- --------- ------- ------- -------
BALANCE, NOVEMBER 30, 1997
(UNAUDITED)......................... 76,061 $ 234 7,380,264 $22,668 $22,902 $67,656
====== ======= ========= ======= ======= =======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
F-25
<PAGE> 134
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED FEBRUARY 28, 1997
FEBRUARY 29, 1996, AND FEBRUARY 28, 1995
AND THE NINE MONTHS ENDED NOVEMBER 30, 1997 AND 1996
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, NOVEMBER 30, NOVEMBER 30,
1997 1996 1995 1997 1996
------------ ------------ ------------ ------------ ------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income....................................... $ 18,065 $ 15,829 $ 10,899 $ 13,456 $ 11,606
-------- -------- -------- -------- --------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Gain on Sale of Leased Equipment, Property and
Equipment...................................... (568) (317) (160) (330) (365)
Loss on Sale of Investment....................... 48 29 28 28 28
Depreciation..................................... 4,074 4,129 3,393 2,786 3,005
Amortization..................................... 3 157 6 26 --
Deferred Income Taxes............................ 2,174 3,951 3,589 568 1,824
Earnings of Discontinued Operations.............. (117) (271) (849) (602) (421)
Change in Assets and Liabilities:
(Increase) Decrease In:
Accounts Receivable.......................... 1,771 (1,064) (425) (2,829) 4,087
Prepaids and Miscellaneous Receivables....... 700 395 (831) (4,964) 7
Inventories.................................. 11,811 (20,232) (24,120) 28,005 12,223
Increase (Decrease) In:
Accounts Payable -- Trade.................... (626) (3,507) 2,268 852 (2,121)
Accrued Expenses and Other Liabilities....... 6,112 1,593 4,355 (3,829) 2,269
Floor Plan Notes Payable..................... (17,466) 16,631 11,649 (22,321) (16,951)
-------- -------- -------- -------- --------
Total Adjustments.......................... 7,916 1,494 (1,097) (2,610) 3,585
-------- -------- -------- -------- --------
Net Cash Provided by Operating
Activities............................... 25,981 17,323 9,802 10,846 15,191
-------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Property and Equipment............ (2,922) (5,427) (9,977) (2,621) (2,495)
Proceeds from Sale of Property and Equipment..... 18 589 94 344 18
Purchase of Investments.......................... (2,425) (2,350) (1,200) (1,436) (1,705)
Proceeds From Sale of Investments................ 2,350 1,200 1,000 2,425 2,350
Issuance of Long-Term Receivables and Other
Assets......................................... (12,435) (8,316) (5,325) (9,509) (12,278)
Proceeds from Long-Term Receivables and Other
Assets......................................... 9,895 8,074 6,273 903 794
Proceeds from Early Retirement and Disposals of
Leased Equipment............................... 11,185 5,700 5,115 7,897 7,834
Issuance of Leases Receivable.................... (52,406) (61,074) (47,169) (22,376) (38,493)
Proceeds from Receipt on Leases Receivable....... 28,941 23,251 18,485 27,070 23,610
-------- -------- -------- -------- --------
Net Cash Provided (Used) by Investing
Activities............................... (17,799) (38,353) (32,704) 2,697 (20,365)
-------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Long-Term Debt..................... 63,613 59,336 39,112 25,286 43,358
Payments on Long-Term Debt....................... (55,562) (34,129) (23,884) (38,094) (32,717)
Payments for Retirement of Common Stock.......... (2,500) (700) (1,400) -- --
Payment of Dividends............................. (95) (106) (87) (119) (55)
Increase (Decrease) in Revolving Line of
Credit......................................... (4,900) 1,600 8,500 (5,200) (10,100)
-------- -------- -------- -------- --------
Net Cash Provided (Used) By Financing
Activities............................... 556 26,001 22,241 (18,127) 486
-------- -------- -------- -------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS...................................... 8,738 4,971 (661) (4,584) (4,688)
Cash and Cash Equivalents -- Beginning............. 16,005 11,034 11,695 24,743 16,005
-------- -------- -------- -------- --------
CASH AND CASH EQUIVALENTS -- ENDING................ $ 24,743 $ 16,005 $ 11,034 $ 20,159 $ 11,317
======== ======== ======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Payment For:
Interest Expense -- Leasing.................... $ 9,904 $ 8,241 $ 5,415 $ 7,413 $ 7,356
Interest Expense -- Other...................... 2,935 1,842 2,014 1,048 2,290
Taxes.......................................... 4,258 5,380 4,509 11,038 3,771
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
F-26
<PAGE> 135
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE YEARS ENDED FEBRUARY 28, 1997 (IN THOUSANDS)
(INFORMATION PERTAINING TO NOVEMBER 30, 1997 AND 1996 IS UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of McNeilus
Companies, Inc. and its wholly-owned subsidiaries (the Companies).
All significant intercompany transactions and accounts of the companies
included in these consolidated financial statements have been eliminated.
Lines of Business
McNeilus Truck and Manufacturing, Inc., a wholly-owned subsidiary of
McNeilus Companies, Inc. manufactures products used primarily by the ready-mix
and refuse industries in the United States and abroad. McNeilus Truck and
Manufacturing, Inc. has entered into a marketing agreement with its wholly-owned
subsidiary, McNeilus Financial, Inc., to sell and market its products. Under
this agreement, McNeilus Financial, Inc. makes all final destination sales and
provides branch facility services.
Leases of manufactured equipment are made through McNeilus Financial
Services, Inc., a wholly-owned subsidiary of McNeilus Companies, Inc.
Substantially all leases have an initial term of five years, and are accounted
for as sales-type leases. Unearned finance income is recognized over the life of
the leases in decreasing amounts which produce a constant rate of return on the
unrecovered investment in the leases.
McIntire Fabricators, Inc., Iowa Contract Fabricators, Inc. and Kensett
Fabricators, Inc., all wholly-owned subsidiaries of McNeilus Companies, Inc.,
provide component fabrication services to McNeilus Truck and Manufacturing, Inc.
The Companies insure for automobile, workers' compensation and employer's
liability, and general liability risks through Nation's Casualty Insurance,
Inc., a wholly-owned subsidiary. Nation's Casualty Insurance, Inc. insures only
for members of the McNeilus group of companies. Aggregate and excess losses are
subject to outside insurance coverages. For the fiscal years ended 1997, 1996,
1995 and the nine months ended November 30, 1997 and 1996 expenses incurred,
before income taxes, included in the consolidated statements of income was
approximately $2,484, $1,695, $1,815, $1,668 and $1,754, respectively.
Use of Estimates
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions. Actual results may vary from those estimates. Areas impacted
through this process include the allowance for doubtful accounts and leases
receivable, residual values of leased equipment, current and long-term
classification of notes receivable and payable, useful lives of property and
equipment, accrued warranty and insurance reserves, and income taxes.
Cash and Cash Equivalents
Cash and cash equivalents include cash in checking and savings accounts.
Accounts and Leases Receivable
Accounts receivable are reflected net of an allowance for doubtful accounts
of $177, $341 and $172 as of February 28, 1997, February 29, 1996 and November
30, 1997, respectively. The Companies also use the reserve method in accounting
for doubtful leases. Net investment in sales-type leases are reflected net of an
F-27
<PAGE> 136
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
allowance for doubtful leases of $0, $0 and $20 as of February 28, 1997,
February 29, 1996 and November 30, 1997, respectively.
Lease Accounting Policies
Leasing activities consist of the leasing of ready mix equipment and plants
and refuse equipment. For financial reporting, these leases are accounted for as
sales-type leases, with profit on the sale recognized at lease inception. Cost
consists of the equipment's book value, less the present value of its residual.
The present value of both the future minimum lease payments and the residual
value are recorded as assets.
Residual values, representing the estimated net present value of the
equipment at the termination of the lease, are recorded at the inception of the
lease based on amounts estimated by management based upon its experience and
judgment.
Unearned income is the amount by which total rentals and estimated residual
value of equipment exceeds the cost of the equipment. Unearned income is
amortized over the lease term so as to produce a constant periodic rate of
return on the net investment in the lease.
Short-Term Investments
Short-term investments consist of deposits which are restricted through
statutory or trust agreements for the insurance operations of Nations Casualty
Insurance, Inc. These deposits consist primarily of certificates of deposit,
stated at cost, which mature within one year, as well as deposits in a
non-interest bearing account.
Inventories
The Companies utilize the LIFO (last-in, first-out) method of pricing
inventories for truck chassis, manufactured mixers, ready-mix plants,
replacement drums, and replacement parts. All other inventory is stated at FIFO
(first-in, first-out) cost.
Revenue Recognition
Sales are recorded when the goods or services are billable at time of
shipment or delivery.
Depreciation
Depreciation is provided for financial reporting by annual charges to
income calculated by use of the straight-line, 150% declining balance and 200%
declining balance methods to amortize the cost of depreciable assets over their
estimated useful lives. Depreciation is provided based upon the following useful
lives:
<TABLE>
<S> <C>
Buildings................................................... 10-35 years
Shop and Office Equipment................................... 3-10 years
Transportation Equipment.................................... 3-7 years
</TABLE>
Depreciation deducted in tax returns differs from depreciation for
financial reporting purposes due to the use of accelerated methods for tax
versus straight-line for financial reporting on certain assets.
Product Warranty
The Companies use the reserve method in accounting for warranty costs. A
warranty reserve of approximately $1,400 is recorded as of February 28, 1997 and
February 29, 1996 and November 30, 1997, respectively. For the fiscal years
ended 1997, 1996 and 1995 and the nine months ended November 30, 1997 and 1996
amounts expensed included in the consolidated statements of income were
approximately $1,189, $2,427, $2,209, $170 and $1,157, respectively.
F-28
<PAGE> 137
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Deferred Income Taxes
Deferred income taxes are provided on temporary differences between
financial reporting and income tax reporting of certain income and expense
items, as well as the accounting for the leasing activities of McNeilus
Financial Services, Inc. as sales-type leases for financial reporting and
operating leases for income tax reporting.
Advertising Costs
Advertising costs are expensed when incurred. For the fiscal years ended
1997, 1996 and 1995 and the nine months ended November 30, 1997 and 1996
advertising expense was approximately $1,458, $822, $694, $701 and $1,165,
respectively.
Pension and Profit Sharing Plans
The Companies offer to its employees a qualified salary reduction
retirement plan under Sec. 401(k)of the Internal Revenue Code. The members of
the consolidated group provide a limited matching of contributions as an
incentive for employees to participate in the plan. For the fiscal years ended
1997, 1996 and 1995 and the nine months ended November 30, 1997 and 1996
contribution expense included in the consolidated statements of income was
approximately $278, $303, $289, $248 and $171, respectively.
Research and Development Costs
Research and development costs are expensed when incurred. For the fiscal
years ended 1997, 1996 and 1995 and the nine months ended November 30, 1997 and
1996 research and development costs charged to expense were approximately $667,
$985, $607, $313 and $338, respectively.
New Accounting Standards
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share," which is
required to be adopted effective for both interim and annual financial
statements for periods ending after December 15, 1997. Among other provisions,
the dilutive effect of stock options must be excluded under the new requirements
for calculating basic earnings per share, which will replace primary earnings
per share. This change will not impact the Companies' earnings per share
calculations.
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income." SFAS No. 130 establishes the standards for
reporting and displaying comprehensive income and its components (revenues,
expenses, gains, and losses) as part of a full set of financial statements. This
statement requires that all elements of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. The statement is effective for fiscal years beginning
after December 15, 1997. Since this statement applies only to the presentation
of comprehensive income, it will not have any impact on the Companies' results
of operations, financial position or cash flows.
In June 1997, the Financial Accounting Standards Board also issued SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information," SFAS
No. 131 establishes the standards for the manner in which public enterprises are
required to report financial and descriptive information about their operating
segments. The statement defines operating segments as components of an
enterprise for which separate financial information is available and evaluated
regularly as a means for assessing segment performance and allocating resources
to segments. A measure of profit or loss, total assets, and other related
information are required to be disclosed for each operating segment. In
addition, this statement requires the annual disclosure of information
concerning revenues derived from the enterprise's products or services,
countries in which it earns revenue or holds assets, and major customers. The
statement is also effective for fiscal years beginning
F-29
<PAGE> 138
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
after December 15, 1997. The adoption of SFAS No. 131 will not affect the
Companies' results of operations or financial position, but will affect the
disclosure of segment information.
Reclassification of Financial Statement Data
Investments in Unconsolidated Subsidiaries, and the earnings from those
subsidiaries, presented as a separate line in the 1996 and 1995 balance sheets
and income statements have been reclassified to discontinued operation lines
within those statements to conform with their presentation in the 1997 financial
statements.
NOTE 2 DISCONTINUED OPERATIONS
In December, 1997 the Company entered into an agreement with a minority
stockholder to sell its 92% interest in ready mix operations, Ready Mix Holding,
Inc. and Subsidiaries. The sale price, which will be determined by independent
appraisal, has yet to be determined.
In December, 1997 the Company entered into an agreement with a minority
stockholder to sell its wholly-owned credit life insurance subsidiary, McNeilus
Fidelity Life Insurance Company. The sale price, which will be determined by
independent appraisal, has yet to be determined.
In December, 1997 the Company entered into an agreement with an unrelated
party to sell its wholly-owned subsidiary, Sterling Travel of Austin, Inc., for
$300.
The disposals of these companies are being accounted for as discontinued
operations. Net assets of these companies at February 28, 1997, February 29,
1996 and November 30, 1997 are summarized as follows:
<TABLE>
<CAPTION>
(UNAUDITED)
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
<S> <C> <C> <C>
Cash and Short-Term Investments............ $1,869 $1,776 $ 2,009
Accounts Receivable, Net................... 534 474 1,392
Inventories................................ 608 662 788
Long-Term Receivables...................... 1,924 2,220 1,927
Property and Equipment, Net................ 2,324 2,631 2,011
Other Assets............................... 1,321 1,279 819
Accounts Payable and Accrued Expenses...... (425) (254) (1,118)
Other Current Liabilities.................. (498) (877) (485)
Long-Term Debt, Less Current Portion....... (801) (1,328) (355)
------ ------ -------
$6,856 $6,583 $ 6,988
====== ====== =======
</TABLE>
These entities had the following revenues for the fiscal years ended 1997,
1996 and 1995:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Ready Mix Holding, Inc. and Subsidiaries.... $9,154 $8,604 $10,053
McNeilus Fidelity Life Insurance Company.... 95 88 64
Sterling Travel of Austin, Inc.............. 910 990 1,086
</TABLE>
F-30
<PAGE> 139
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 3 MINIMUM LEASE PAYMENTS RECEIVABLE AND NET INVESTMENT IN LEASES
The components of the net investment in sales-type leases are as follows at
February 28, 1997, February 29, 1996 and November 30, 1997:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Minimum Lease Payments Receivable.......... $122,619 $115,699 $105,327
Less: Allowance for Credit Losses.......... 0 0 20
Add: Residual Value........................ 38,768 32,932 39,345
Less: Unearned Income...................... 27,508 27,684 23,008
-------- -------- --------
Net Investment in Leases.............. 133,879 120,947 121,644
Less: Current Portion...................... 32,009 25,710 35,108
-------- -------- --------
Non-Current Portion................... $101,870 $ 95,237 $ 86,536
======== ======== ========
</TABLE>
The approximate maturities of minimum lease payments receivable are
estimated to be as follows for the respective years ending February 28: 1998 --
$40,926; 1999 -- $35,177; 2000 -- $26,810; 2001 -- $15,181; 2002 -- $4,156; 2003
- -- $369.
NOTE 4 INVENTORIES
Inventories at February 28, 1997, February 29, 1996 and November 30, 1997
consist of the following:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Trucks..................................... $49,780 $60,650 $25,354
Mixers..................................... 9,863 9,367 6,607
Refuse Bodies.............................. 5,942 7,548 5,130
Ready-Mix Plants........................... 1,391 768 325
Drums...................................... 818 597 672
Parts Held for Sale........................ 12,750 13,016 11,111
Manufacturing Raw Material and Parts....... 14,300 14,338 17,858
Collateral Held for Sale................... 0 78 0
------- ------- -------
Inventories at FIFO Cost.............. 94,844 106,362 67,057
Excess of FIFO Cost Over LIFO Cost......... (7,650) (7,356) (7,868)
------- ------- -------
$87,194 $99,006 $59,189
======= ======= =======
</TABLE>
F-31
<PAGE> 140
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 5 LONG-TERM RECEIVABLES AND INVESTMENTS
Long-term receivables and investments consist of the following at February
28, 1997, February 29, 1996 and November 30, 1997:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29 NOVEMBER 30
1997 1996 1997
------------ ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Miscellaneous Notes Receivable............. $2,485 $ 653 $ 5,245
Related Party Notes Receivable............. 899 944 6,814
Conditional Sales Contracts................ 619 1,043 3,068
Marketable Equity Securities at Cost, Which
Approximates Market...................... 940 940 940
Other Investments at Cost.................. 1,298 323 1,406
------ ------ -------
Totals................................ 6,241 3,903 17,473
Less Current Portion (Included in Prepaids
and Miscellaneous Receivables)........... 546 995 2,960
------ ------ -------
$5,695 $2,908 $14,513
====== ====== =======
</TABLE>
Maturities for the next five years on all long-term notes receivable are
estimated to be as follows for the respective years ending February 28:
<TABLE>
<S> <C>
1998........................................................ $ 546
1999........................................................ 2,654
2000........................................................ 122
2001........................................................ 110
2002........................................................ 104
</TABLE>
The aggregate carrying value of the long-term notes receivable and
investments approximates the fair market value at February 28, 1997.
NOTE 6 PROPERTY AND EQUIPMENT
Property and equipment, stated at cost, is composed as follows at February
28, 1997, February 29, 1996 and November 30, 1997:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29 NOVEMBER 30
1997 1996 1997
------------ ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Land and Improvements...................... $ 1,684 $ 1,737 $ 1,975
Buildings.................................. 27,860 26,310 28,313
Shop and Office Equipment.................. 24,563 23,211 24,373
Transportation Equipment................... 4,575 4,289 4,536
Construction in Progress................... 273 943 22
------- ------- -------
Total................................. 58,955 56,490 59,219
Less Accumulated Depreciation.............. 30,524 26,807 31,323
------- ------- -------
Net Property and Equipment............ $28,431 $29,683 $27,896
======= ======= =======
</TABLE>
F-32
<PAGE> 141
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 7 ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities are composed as follows at February
28, 1997, February 29, 1996 and November 30, 1997:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Insurance Reserves........................................ $ 3,940 $ 2,779 $ 4,983
Miscellaneous............................................. 16,931 11,979 12,059
-------- -------- --------
$ 20,871 $ 14,758 $ 17,042
======== ======== ========
</TABLE>
NOTE 8 DEBT
Line of Credit
McNeilus Truck and Manufacturing, Inc., has a bank line-of-credit which
contains several interest rate options, which approximate or are below the prime
rate. The following is a summary of the availability and transactions as of and
for the periods ending February 28, 1997, February 29, 1996 and November 30,
1997:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Dollar Amount Available................................... $ 12,000 $ 12,000 $ 12,000
Outstanding at Respective Date............................ 5,200 10,100 0
Highest Dollar Amount Outstanding During the Period....... 11,800 10,100 5,200
Average Month-End Balance for Those Month-Ends With
Outstanding Balances.................................... 4,400 5,980 0
</TABLE>
Floor Plan Notes
Floor plan notes are secured by truck chassis inventory of McNeilus Truck
and Manufacturing, Inc. Interest rates on the floor plan notes approximate the
prime rate after free days of floor plan ranging up to 120 days as negotiated
with each financial institution.
Long-Term Debt -- Leasing
The leasing retail installment contracts have various fixed interest rates
and are due on varying dates. The leased assets are security for the installment
contracts. The fixed interest rates originated from these commitments are
generally below the prime rate existing at the time the funds were advanced.
Leasing long-term debt is comprised as follows:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Total Leasing Long-Term Debt.............................. $121,570 $107,664 $113,639
Less Current Maturities................................. 32,703 26,126 35,787
-------- -------- --------
Total Leasing Long-Term Debt Less Current Maturities...... $ 88,867 $ 81,538 $ 77,852
======== ======== ========
</TABLE>
The estimated fair value of retail installment contracts as of February 28,
1997 is $122,541. The estimated fair value is the present value of estimated
future principal and interest payments discounted at the current interest rate.
F-33
<PAGE> 142
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Other Long-Term Debt
Other Long-term debt obligations of the Companies consist of the following
at February 28, 1997, February 29, 1996 and November 30, 1997:
<TABLE>
<CAPTION>
(UNAUDITED)
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
<S> <C> <C> <C>
Note payable to bank. Tiered interest rate varying from
6.18% to 7.55%. Monthly principal payments of $82, plus
interest through February, 1999. All bank debt is
guaranteed by majority stockholder. (Note was paid off
in September, 1997.).................................... $4,537 $ 5,525 $ 0
Notes payable to prior stockholders. Interest rates
ranging from 5.7% to 8% with annual principal and
interest payments ranging from $3 to $250 with
maturities through February, 2033. Unsecured............ 2,861 7,591 2,590
Other notes payable to corporations and individuals. Notes
are unsecured or secured by property.................... 343 353 294
------ ------- ------
Total Long-Term Debt................................. 7,741 13,469 2,884
Less Current Maturities................................... 1,341 2,044 286
------ ------- ------
Total Other Long-Term Debt........................... $6,400 $11,425 $2,598
====== ======= ======
</TABLE>
The aggregate carrying value of floor plan notes and other long-term debt
approximates the fair market value at February 28, 1997.
Approximate aggregate maturities of all long-term debt are as follows for
the respective years ending February 28: 1998 -- $34,044; 1999 -- $36,164; 2000
- -- $27,286; 2001 -- $20,545; 2002 -- $9,748.
NOTE 9 OPERATING LEASES
The Companies lease computer and manufacturing equipment under long-term
operating lease arrangements. In addition, the Companies throughout the year
rent various equipment as needed under short-term arrangements. For the fiscal
years ended 1997, 1996 and 1995 and the nine months ended November 30, 1997 and
1996 rent expense included in the consolidated statements of income was
approximately $434, $641, $250, $104 and $114, respectively.
Future minimum rentals payable on significant operating leases are
estimated to be as follows for the respective years ending February 28: 1998,
$355; 1999, $210.
NOTE 10 INCOME TAX MATTERS
McNeilus Companies, Inc. and its subsidiaries file a consolidated federal
income tax return. The consolidated federal tax liability is initially allocated
to the members of the consolidated group based on the "taxable income method."
If a member's separate incurred tax liability exceed the amount so allocated, an
additional allocation is made equal to 100 percent of the excess. The
corresponding reduction in tax liability is allocated proportionately to the
members whose losses or credits were used to decrease the tax liability of the
group.
State tax expense is based on estimated state liabilities from filings made
under separate, combined, consolidated, or unitary filings as required by the
various taxing jurisdictions. McNeilus Truck and Manufacturing, Inc. reimburses
all other subsidiaries of McNeilus Companies, Inc. for excessive state tax
liabilities (in excess of 10% of taxable income) resulting from combined or
unitary filings.
F-34
<PAGE> 143
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Prepaids and miscellaneous receivables include income tax refunds
receivable of approximately $-0-, $715 and $1,631 as of February 28, 1997,
February 29, 1996 and November 30, 1997, respectively.
The provision for income tax consists of the following at February 28,
1997, February 29, 1996 and February 28, 1995:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Current
Federal.................................. $ 7,426 $5,043 $4,252
State.................................... 1,320 508 1,082
Deferred
Federal.................................. 1,611 3,295 $3,183
State.................................... 563 657 406
------- ------ ------
$10,920 $9,503 $8,923
======= ====== ======
</TABLE>
Net current deferred tax assets arise primarily from accrued liabilities
which are not currently deductible for income tax purposes, as well as
allowances for doubtful accounts receivable and inventory reserves. The net
current deferred tax assets at February 28, 1997 and February 29, 1996 are
comprised as follows:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29,
1997 1996
------------ ------------
<S> <C> <C>
Treatment of Lease
Origination Costs.................................... $ 310 $ 278
Insurance Reserves..................................... 1,379 973
Investment Loss Reserve................................ 350 0
Inventory Valuation Reserves........................... 1,466 455
Warranty Reserves...................................... 490 490
Accounts Receivable Allowance.......................... 62 120
Contribution and State Loss Carryovers................. 1,430 1,616
Valuation Allowances -- Carryover...................... (1,430) (1,616)
Other.................................................. 277 136
-------- --------
$ 4,334 $ 2,452
======== ========
</TABLE>
Contribution carryovers available to the extent of ten percent of taxable
income over the next five years approximate $2,800 as of February 28, 1997.
State loss carryovers available to the extent of future taxable income as
provided by the respective taxing jurisdictions are estimated to be
approximately $7,500 as of February 28, 1997. A valuation allowance is provided
for both of these carryovers as there is no guarantee that they will be utilized
to decrease future taxable income.
Net noncurrent deferred income tax liabilities arise primarily from the
recording of McNeilus Financial Services, Inc.'s leasing activities as
sales-type leases for financial reporting and as operating leases for income tax
reporting. State deferred income taxes are provided on this difference at a 6%
rate.
Deferred tax liabilities are also provided on the difference between
depreciation for financial reporting and income tax reporting, and the deferral
of the intercompany gain on the sale of equipment to McNeilus
F-35
<PAGE> 144
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Financial Services, Inc. for leasing purposes. The net deferred tax liabilities
at February 28, 1997 and February 29, 1996 are comprised as follows:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29,
1997 1996
------------ ------------
<S> <C> <C>
Treatment of Leases.................................... $18,096 $14,359
Intercompany Profit on Sales to McNeilus Financial
Services, Inc., Net of Amortization.................. 4,245 3,925
Depreciation........................................... 291 291
------- -------
Total........................................... $22,632 $18,575
======= =======
</TABLE>
The provision for income taxes varies from the amount of income tax
determined by applying the U.S. statutory income tax rate to pre-tax income as a
result of the following differences at February 28, 1997, February 29, 1996 and
February 28, 1995:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
U.S. Statutory Rate........................................ 35.0% 35.0% 35.0%
State Tax Deduction........................................ (2.3) (1.6) (2.7)
Non-deductible contributions............................... 0.0 0.0 8.1
Other, Net................................................. (1.4) (0.2) (1.3)
---- ---- ----
Effective Federal Tax Rate................................. 31.3 33.2 39.1
Effective State Tax Rates.................................. 6.5 4.7 7.8
---- ---- ----
Combined Effective Tax Rate................................ 37.8% 37.9% 46.9%
==== ==== ====
</TABLE>
NOTE 11 COMMITMENTS AND CONTINGENCIES
Purchase Commitments
McNeilus Truck and Manufacturing, Inc. orders truck chassis for future
delivery based on anticipated sales and production volume. Deliveries to be
received in the fiscal year ending February 28, 1998 are expected to approximate
demand.
LITIGATION
McNeilus Truck and Manufacturing, Inc. is currently a defendant in several
product liability and other lawsuits. Management does not believe that the final
outcome of these cases will have a significant adverse effect upon the financial
position or results of operations of the Companies.
NOTE 12 CASH FLOW INFORMATION
Kensett Fabricators, Inc. was formed during the year ending February 29,
1996, The company is wholly owned by McNeilus Companies, Inc. The primary
investment was in the form of property, net of a long-term note assumed, for a
net investment of $100.
McNeilus Companies, Inc. repurchased 8,750 shares of outstanding common
stock for $8,660 during the year ending February 29, 1996. Of this, $700 was
paid in cash and a long-term note was issued for $7,960.
McIntire Fabricators, Inc. and Iowa Contract Fabricators, Inc. were formed
during the year ending February 28, 1995. The companies are wholly owned by
McNeilus Companies, Inc. The primary investment was in the form of property with
a book value of approximately $1,305.
F-36
<PAGE> 145
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 13 SUBSEQUENT EVENT
On December 8, 1997, the stockholders entered into an agreement to sell all
the outstanding common stock of the Companies to Oshkosh Truck Corporation. The
acquisition price, including amounts for non-compete agreements, is $250,000.
Under certain conditions, if the acquisition is not consummated, the
Companies may be required to pay Oshkosh a fee of $10 million, and conversely
Oshkosh may be required to pay a $10 million fee to the Companies.
F-37
<PAGE> 146
INDEX TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OSHKOSH TRUCK CORPORATION AND MCNEILUS COMPANIES, INC.
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Unaudited Pro Forma Condensed Consolidated Balance Sheet as
of December 31, 1997...................................... P-3
Unaudited Pro Forma Condensed Consolidated Statement of
Income for the twelve months ended December 31, 1997...... P-4
Unaudited Pro Forma Condensed Consolidated Statement of
Income for the fiscal year ended September 30, 1997....... P-5
Unaudited Pro Forma Condensed Consolidated Statement of
Income for the three months ended December 31, 1997....... P-6
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements...................................... P-7
</TABLE>
P-1
<PAGE> 147
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma condensed consolidated statements of income and
condensed consolidated balance sheet (collectively, the "Pro Forma Statements")
have been derived by the application of pro forma adjustments, which give effect
to the acquisition by Oshkosh Truck Corporation ("Oshkosh") of all of the issued
and outstanding common stock of McNeilus Companies, Inc. ("McNeilus") (the
"Acquisition"), the issuance by Oshkosh of $100 million Senior Subordinated
Notes (the "Offering"), the consummation of a $325 million Senior Credit
Facility ("Senior Credit Facility"), the prepayment of outstanding term loans
and borrowings under the revolving credit facility (the "Debt Repayment") and
the establishment of a lease financing partnership (the "Lease Financing")
(collectively referred to as the "Transactions") to the historical financial
statements of Oshkosh and McNeilus included elsewhere in this Prospectus as if
the Transactions had been consummated for balance sheet purposes as of December
31, 1997, and for statement of income purposes as of the beginning of the
periods presented. For purposes of the Pro Forma Statements, the Transactions
are assumed to have occurred simultaneously.
THE PRO FORMA STATEMENTS DO NOT PURPORT TO REPRESENT WHAT OSHKOSH'S
FINANCIAL POSITION OR RESULTS OF OPERATIONS WOULD ACTUALLY HAVE BEEN HAD THE
TRANSACTIONS IN FACT OCCURRED ON THE ASSUMED DATES OR TO PROJECT OSHKOSH'S
FINANCIAL POSITION OR RESULTS OF OPERATIONS FOR ANY FUTURE DATE OR FUTURE
PERIOD. THE PRO FORMA STATEMENTS SHOULD BE READ IN CONJUNCTION WITH THE
HISTORICAL FINANCIAL STATEMENTS AND RELATED NOTES OF OSHKOSH AND MCNEILUS
INCLUDED ELSEWHERE IN THIS PROSPECTUS.
The pro forma adjustments, as described in the accompanying notes to the
Pro Forma Statements, are based on available information and certain assumptions
that management believes are reasonable.
The Acquisition has been accounted for under the purchase method of
accounting. The purchase price for McNeilus has been allocated to the tangible
and intangible assets and liabilities of McNeilus based on preliminary estimates
of their fair values. The allocation of the purchase price is subject to
revision when additional information concerning certain asset and liability
valuations is obtained.
Oshkosh and McNeilus have different fiscal year ends -- September 30 for
Oshkosh and the last day of February for McNeilus -- and as a result, amounts
for McNeilus as of November 30, 1997 have been combined with amounts of Oshkosh
as of December 31, 1997 for the Unaudited Pro Forma Condensed Consolidated
Balance Sheet. The Unaudited Condensed Consolidated Statement of Income for
Oshkosh for the twelve month period ended September 30, 1997 and for the twelve
month period ended December 31, 1997 have been combined with the Unaudited
Condensed Consolidated Statement of Income for McNeilus for the twelve month
period ended November 30, 1997. The Unaudited Condensed Consolidated Statement
of Income of Oshkosh for the three months ended December 31, 1997 have been
combined with the Unaudited Condensed Consolidated Statement of Income for
McNeilus for the three months ended November 30, 1997. Statement of income
information of McNeilus for the three month period ended November 30, 1997 is
therefore included in both the interim and the annual Pro Forma Statements.
The application of the pro forma adjustments to the historical results of
operations of Oshkosh for the twelve months ended December 31, 1997 and
September 30, 1997, results in the pro forma income from continuing operations
being greater than the historical income from continuing operations of Oshkosh.
Net sales of Oshkosh for the first quarter of each fiscal year (the three months
ended December 31) and net sales of McNeilus for the third quarter of each
fiscal year (the three months ended November 30) represent the lowest quarter of
shipments for each company during their respective fiscal years. Accordingly,
the application of the pro forma adjustments to the historical results of
operations of Oshkosh for the three months ended December 31, 1997, results in
the pro forma income from continuing operations being less than the historical
income from continuing operations of Oshkosh.
P-2
<PAGE> 148
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
---------------------------
OFFERING, DEBT
AS REPORTED REPAYMENT,
------------------------------------- ACQUISITION
OSHKOSH MCNEILUS AND LEASE PRO FORMA
DECEMBER 31, 1997 NOVEMBER 30, 1997 FINANCING VALUATION CONSOLIDATED
----------------- ----------------- -------------- --------- ------------
(A) (B)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents.............. $ 198 $ 20,159 $(17,659) $ -- $ 2,698
Receivables, net........... 54,215 12,259 -- -- 66,474
Net investment in
sales-type leases........ -- 35,108 (35,108) -- --
Inventories................ 86,744 59,189 -- 7,868 153,801
Prepaid expenses and
other.................... 3,905 7,535 -- -- 11,440
Deferred income taxes...... 9,169 4,213 -- -- 13,382
-------- -------- -------- --------- --------
Total current
assets.............. 154,231 138,463 (52,767) 7,868 247,795
Net assets of discontinued
operations................. -- 6,988 (2,840) (4,148) --
Investment in unconsolidated
partnership................ -- -- 8,005 -- 8,005
Net investment in sales-type
leases..................... -- 86,536 (86,536) -- --
Other long-term assets....... 8,248 14,513 (4,699) (1,000) 17,062
Property, plant and
equipment, net............. 55,340 27,896 (400) 7,500 90,336
Purchase cost................ -- -- 256,000 (256,000) --
Goodwill and other
intangibles, net........... 163,639 324 -- 169,829 333,792
-------- -------- -------- --------- --------
Total assets................. $381,458 $274,720 $116,763 $ (75,951) $696,990
======== ======== ======== ========= ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable........... $ 40,556 $ 10,324 $ -- $ -- $ 50,880
Floor plan notes payable... -- 17,194 -- -- 17,194
Customer advances.......... 35,261 -- -- -- 35,261
Other current
liabilities.............. 41,342 17,042 (483) -- 57,901
Current maturities of
senior term loans,
revolving credit facility
and other long-term
debt..................... 7,820 36,073 (35,169) -- 8,724
-------- -------- -------- --------- --------
Total current
liabilities......... 124,979 80,633 (35,652) -- 169,960
Senior revolving credit
facility................... -- -- 13,048 -- 13,048
Senior term loans............ -- -- 216,562 -- 216,562
Senior subordinated notes.... -- -- 100,000 -- 100,000
Other long-term debt......... 95,000 80,450 (172,852) -- 2,598
Other long-term
liabilities................ 15,031 -- -- -- 15,031
Deferred income taxes........ 22,701 23,079 (3,588) 14,607 56,799
Total shareholders' equity... 123,747 90,558 (755) (90,558) 122,992
-------- -------- -------- --------- --------
Total liabilities and
shareholders' equity....... $381,458 $274,720 $116,763 $ (75,951) $696,990
======== ======== ======== ========= ========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
P-3
<PAGE> 149
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AS REPORTED PRO FORMA
------------------------------------- -----------------
OSHKOSH MCNEILUS TWELVE MONTHS
TWELVE MONTHS TWELVE MONTHS ENDED
ENDED ENDED PRO FORMA DECEMBER 31, 1997
DECEMBER 31, 1997 NOVEMBER 30, 1997 ADJUSTMENTS CONSOLIDATED
----------------- ----------------- ----------- -----------------
<S> <C> <C> <C> <C>
Net sales....................... $684,715 $326,552 $ -- $1,011,267
-- -- (699)(h) --
(1,048)(g)
Cost of sales................... 593,147 268,923 1,764 (c) 862,087
-------- -------- -------- ----------
Gross income............. 91,568 57,629 (17) 149,180
Operating expenses:
Selling, general and
administrative............. 49,393 30,083 (1,461)(c) 76,172
-- -- (1,843)(g) --
Engineering, research and
development................ 7,997 -- 699 (h) 8,696
Amortization of goodwill and
intangibles................ 4,464 -- 6,642 (d) 11,106
-------- -------- -------- ----------
Total operating
expenses.............. 61,854 30,083(k) 4,037 95,974(k)
-------- -------- -------- ----------
Income from operations.......... 29,714 27,546 (4,054) 53,206
Other income (expense):
Interest expense.............. (11,668) (11,562) 9,846 (e) (30,693)
-- -- (17,309)(f) --
Interest income............... 676 12,382 (12,382)(e) 676
-- -- (609)(e) --
Other -- net.................. (197) 2,581 (1,765)(i) 10
-------- -------- -------- ----------
(11,189) 3,401 (22,219) (30,007)
-------- -------- -------- ----------
Income from continuing
operations before income taxes
and equity in income of
unconsolidated partnership.... 18,525 30,947 (26,273) 23,199
Provision (credit) for income
taxes......................... 7,003 11,330 (9,186)(j) 9,147
-------- -------- -------- ----------
11,522 19,617 (17,087) 14,052
Equity in income of
unconsolidated partnership
(net of income taxes of
$1,227)....................... -- -- 1,918 (e) 1,918
-------- -------- -------- ----------
Income from continuing
operations.................... $ 11,522 $ 19,617 $(15,169) $ 15,970
======== ======== ======== ==========
Earnings per common share from
continuing operations:
Basic......................... $ 1.37 $ 1.90
======== ==========
Diluted....................... $ 1.36 $ 1.88
======== ==========
Shares used in calculation:
Basic......................... 8,425 8,425
======== ==========
Diluted....................... 8,485 8,485
======== ==========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
P-4
<PAGE> 150
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AS REPORTED PRO FORMA
------------------------------------- -----------------
OSHKOSH TWELVE MONTHS
FISCAL YEAR MCNEILUS ENDED
ENDED TWELVE MONTHS SEPTEMBER 30,
SEPTEMBER 30, ENDED PRO FORMA 1997
1997 NOVEMBER 30, 1997 ADJUSTMENTS CONSOLIDATED
------------- ----------------- ----------- -------------
<S> <C> <C> <C> <C>
Net sales....................... $683,234 $326,552 $ -- $1,009,786
-- -- (699)(h) --
(1,048)(g)
Cost of sales................... 594,390 268,923 1,764 (c) 863,330
-------- -------- -------- ----------
Gross income............. 88,844 57,629 (17) 146,456
Operating expenses:
Selling, general and
administrative............. 47,742 30,083 (1,461)(c) 74,521
-- -- (1,843)(g) --
Engineering, research and
development................ 7,847 -- 699 (h) 8,546
Amortization of goodwill and
intangibles................ 4,470 -- 6,642 (d) 11,112
-------- -------- -------- ----------
Total operating
expenses.............. 60,059 30,083(k) 4,037 94,179(k)
-------- -------- -------- ----------
Income from operations.......... 28,785 27,546 (4,054) 52,277
Other income (expense):
Interest expense.............. (12,722) (11,562) 9,846 (e) (30,697)
-- -- (16,259)(f) --
Interest income............... 717 12,382 (12,382)(e) 717
-- -- (609)(e) --
Other -- net.................. (278) 2,581 (1,765)(i) (71)
-------- -------- -------- ----------
(12,283) 3,401 (21,169) (30,051)
-------- -------- -------- ----------
Income from continuing
operations before income taxes
and equity in income of
unconsolidated partnership.... 16,502 30,947 (25,223) 22,226
Provision for income taxes...... 6,496 11,330 (8,777)(j) 9,049
-------- -------- -------- ----------
10,006 19,617 (16,446) 13,177
Equity in income of
unconsolidated partnership
(net of income taxes of
$1,227)....................... -- -- 1,918 (e) 1,918
-------- -------- -------- ----------
Income from continuing
operations.................... $ 10,006 $ 19,617 $(14,528) $ 15,095
======== ======== ======== ==========
Earnings per common share from
continuing operations:
Basic......................... $ 1.18 $ 1.78
======== ==========
Diluted....................... $ 1.17 $ 1.77
======== ==========
Shares used in calculation:
Basic......................... 8,502 8,502
======== ==========
Diluted....................... 8,546 8,546
======== ==========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
P-5
<PAGE> 151
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AS REPORTED
---------------------------
OSHKOSH MCNEILUS PRO FORMA
------------ ------------ ------------------
THREE MONTHS ENDED THREE MONTHS
--------------------------- ENDED
DECEMBER 31, NOVEMBER 30, PRO FORMA DECEMBER 31, 1997
1997 1997 ADJUSTMENTS CONSOLIDATED
------------ ------------ ------------ ------------------
<S> <C> <C> <C> <C>
Net sales.......................... $151,801 $67,295 $ -- $219,096
-- -- (114)(h) --
(166)(g)
Cost of sales...................... 129,494 55,419 472 (c) 185,105
-------- ------- ------- --------
Gross income.................. 22,307 11,876 (192) 33,991
Operating expenses:
Selling, general and
administrative................ 11,676 7,847 (380)(c) 18,883
-- -- (260)(g) --
Engineering, research and
development................... 2,143 -- 114 (h) 2,257
Amortization of goodwill and
intangibles................... 1,126 -- 1,660 (d) 2,786
-------- ------- ------- --------
Total operating expenses.... 14,945 7,847(k) 1,134 23,926(k)
-------- ------- ------- --------
Income from operations............. 7,362 4,029 (1,326) 10,065
Other income (expense):
Interest expense.............. (2,504) (2,500) 2,364 (e) (7,555)
-- -- (4,915)(f) --
Interest income.......... 165 2,955 (2,955)(e) 165
-- -- (149)(e) --
Other -- net............. 72 682 (356)(i) 249
-------- ------- ------- --------
(2,267) 1,137 (6,011) (7,141)
-------- ------- ------- --------
Income from continuing operations
before income taxes and equity
in income of unconsolidated
partnership................... 5,095 5,166 (7,337) 2,924
Provision for income taxes....... 1,955 1,891 (2,596)(h) 1,250
-------- ------- ------- --------
3,140 3,275 (4,741) 1,674
Equity in income of
unconsolidated partnership
(net of income taxes of
$289)......................... -- -- 451 (e) 451
-------- ------- ------- --------
Income from continuing
operations.................... $ 3,140 $ 3,275 $(4,290) $ 2,125
======== ======= ======= ========
Earnings per common share from
continuing operations:
Basic......................... $0.38 $0.25
======== ========
Diluted....................... $0.37 $0.25
======== ========
Shares used in calculation:
Basic......................... 8,341 8,341
======== ========
Diluted....................... 8,437 8,437
======== ========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
P-6
<PAGE> 152
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(IN THOUSANDS)
(a) Pro forma adjustments related to the Offering, the Debt Repayment, the
Acquisition and the Lease Financing are summarized in the following table:
<TABLE>
<CAPTION>
OFFERING AND LEASE
FEES DEBT REPAYMENT ACQUISITION FINANCING TOTALS
---- -------------- ----------- --------- ------
(1) (2) (3) (4)
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents.............. $(15,424) $ 235,228 $(233,875) $ (3,588) $ (17,659)
Net investment in sales-type leases.... -- -- -- (35,108) (35,108)
Net assets of discontinued
operations........................... -- -- (2,840) -- (2,840)
Investment in unconsolidated
partnership.......................... -- -- -- 8,005 8,005
Net investment in sales-type leases --
long-term............................ -- -- -- (86,536) (86,536)
Other long-term assets................. 9,424 (1,238) (12,885) -- (4,699)
Property, plant and equipment, net..... -- -- (400) -- (400)
Purchase cost.......................... 6,000 -- 250,000 -- 256,000
Other current liabilities.............. -- (483) -- -- (483)
Current maturities of long-term debt... -- 618 -- (35,787) (35,169)
Senior revolving credit facility....... -- 13,048 -- -- 13,048
Senior term loans -- less current
portion.............................. -- 216,562 -- -- 216,562
Senior subordinated notes payable...... -- 100,000 -- -- 100,000
Long-term debt......................... -- (95,000) -- (77,852) (172,852)
Deferred income taxes -- long-term..... -- -- (3,588) (3,588)
Shareholders' equity................... -- (755) -- -- (755)
</TABLE>
- -------------------------
(1) Fees and expenses totaling $16,000 for legal, financial and other
professional fees due at closing associated with the Senior Credit Facility
and the Offering ($8,500), the Acquisition ($6,000) and the Lease Financing
($1,500), less $576 prepaid at December 31, 1997.
(2) Issuance of aggregate debt of $338,048, repayment of existing long-term debt
of $95,000 and borrowings under the revolving credit facility of $7,820 and
write-off of deferred debt issuance costs of $1,238, less tax benefit of
$483, or $755.
(3) Aggregate cash purchase price of $250,000 due at closing less transactions
prior to or concurrent with closing, including $16,025 in cash to be
received from McNeilus shareholders (repayment of notes of $10,592, sale of
certain assets of $4,094 and intercompany payments of $1,339), and $100
received from third parties from the sale of a discontinued operation.
(4) To reflect contribution of the net investment in sales-type leases to the
unconsolidated lease financing partnership and recognition of gain for
income tax purposes on these sales-type leases which was previously deferred
for income tax purposes. Oshkosh/McNeilus Financial Services, Inc. and
BALCAP, an affiliate of Bank of America National Trust and Savings
Association, will both be general partners in the lease financing
partnership. Each general partner will participate equally in the principal
operating and financial decision making activities of the lease financing
partnership.
P-7
<PAGE> 153
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
(b) The Acquisition has been accounted for by Oshkosh using the purchase
method of accounting. The total purchase cost has been allocated first to the
assets and liabilities of McNeilus based upon their respective fair values with
the remainder allocated to costs in excess of net assets acquired. The
historical shareholders' equity of McNeilus has been eliminated. The aggregate
purchase cost and the preliminary allocation of the purchase cost to the assets
and liabilities of McNeilus are as follows:
<TABLE>
<S> <C>
Purchase cost, including related fees:
Acquisition of 100% of the issued and outstanding common
stock of McNeilus...................................... $250,000
Fees and expenses incurred in connection with the
Acquisition............................................ 6,000
--------
Total acquisition cost............................ $256,000
========
Preliminary allocation of acquisition cost(1):
Net assets acquired at historical cost.................... $ 90,558
Add (deduct):
Permitted pre-close dividend to shareholders of certain
discontinued operations................................ (4,148)
Revaluation of McNeilus property, plant and equipment,
inventories and investment in foreign subsidiaries to
estimated fair values.................................. 14,368
Valuation of identified intangible assets:
Non-compete agreements................................. 38,000
Other.................................................. 23,085
Deferred income tax provision associated with the
revaluation of McNeilus assets and liabilities......... (14,607)
Cost in excess of net assets acquired..................... 108,744
--------
Total purchase cost............................... $256,000
========
</TABLE>
- -------------------------
(1) The allocation of the purchase cost reflects the revaluation of McNeilus'
assets and liabilities to their estimated fair values based on preliminary
estimates. The preliminary allocation may differ from the final allocation.
(c) Adjustment to reflect depreciation expense based on the new basis and
remaining economic useful lives of McNeilus property, plant and equipment. New
basis depreciation is computed using the straight line method over the remaining
useful lives.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1997
------------------------- -------------------------
SELLING, SELLING,
COST OF GENERAL AND COST OF GENERAL AND
SALES ADMINISTRATIVE SALES ADMINISTRATIVE
------- -------------- ------- --------------
<S> <C> <C> <C> <C>
Eliminate historical depreciation.................. $(1,020) $(2,835) $(224) $(723)
New basis depreciation............................. 2,784 1,374 696 343
------- ------- ----- -----
$ 1,764 $(1,461) $ 472 $(380)
======= ======= ===== =====
</TABLE>
P-8
<PAGE> 154
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
(d) Adjustment to record the amortization of goodwill and other intangible
assets over the indicated periods.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1997
------------------- ------------------
<S> <C> <C> <C>
Non-compete agreements(1)..... 10-15 yrs $2,633 $ 658
Other(2)...................... 5-30 yrs 1,290 322
Goodwill(2)................... 40 yrs 2,719 680
------ ------
$6,642 $1,660
====== ======
</TABLE>
- -------------------------
(1) Amortized over the terms of the respective agreements on the straight-line
method.
(2) Amortized over the estimated useful lives on a straight-line method.
(e) Reclassify interest income, interest expense and gain on sale of leased
equipment of the leasing operation to "Equity in Income of Unconsolidated
Partnership" to reflect the contribution of sales-type leases from McNeilus to
the lease financing partnership and to record amortization of costs to establish
the lease financing partnership.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1997
------------------- ------------------
<S> <C> <C>
Interest income-leasing................... $12,382 $ 2,955
Interest expense-leasing.................. (9,846) (2,364)
Gains on sales of leased equipment........ 609 149
------- -------
3,145 740
Income taxes at 39%....................... (1,227) (289)
------- -------
$ 1,918 $ 451
======= =======
</TABLE>
P-9
<PAGE> 155
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
(f) Adjustment to record interest expense and amortization of deferred debt
issuance cost on the debt incurred to finance the Acquisition and repayment of
certain existing indebtedness of Oshkosh, based upon pro forma consolidated debt
of Oshkosh following consummation of the Transactions using the interest rates
as shown (as if the Transactions had been consummated as of the beginning of the
periods presented):
<TABLE>
<CAPTION>
TWELVE MONTHS TWELVE MONTHS THREE MONTHS
ENDED ENDED ENDED
INTEREST DECEMBER 31, SEPTEMBER 30, DECEMBER 31,
RATE 1997 1997 1997
-------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Eliminate historical expense:
Interest on debt repaid..................... $(11,243) $(12,293) $(2,227)
Amortization of debt issuance costs......... (216) (218) (54)
Financing fees and other expenses........... (207) (205) (48)
-------- -------- -------
Total historical expense.................... (11,666) (12,716) (2,329)
Interest on new debt:(1)(3)
Revolving Credit Facility................... 7.625% 995 995 249
$100,000 Senior Subordinated Notes.......... 8.750% 8,750 8,750 2,187
$100,000 Term A............................. 7.625% 7,625 7,625 1,906
$62,500 Term B.............................. 7.875% 4,922 4,922 1,230
$62,500 Term C.............................. 8.125% 5,078 5,078 1,270
-------- -------- -------
27,370 27,370 6,842
Amortization of debt issuance costs(2)...... 1,226 1,226 307
Financing fees and other expenses........... 379 379 95
-------- -------- -------
Total interest on new debt.......... 28,975 28,975 7,244
-------- -------- -------
Net adjustment...................... $ 17,309 $ 16,259 $ 4,915
======== ======== =======
</TABLE>
- -------------------------
(1) Borrowings under the Revolving Credit Facility at closing ($13,048) are
assumed to be outstanding for the entire period.
(2) Debt issuance costs are amortized over the life of the related debt, ranging
from 6 to 10 years using the interest method. The Unaudited Pro Forma
Condensed Consolidated Statements of Income do not include an extraordinary
charge of approximately $755 which represents the write-off of unamortized
debt issuance costs, net of income taxes associated with the Debt Repayment.
(3) An increase in the interest rate of 1/8% would change interest expense and
income from continuing operations by:
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED TWELVE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, 1997 SEPTEMBER 30, 1997 DECEMBER 31, 1997
------------------- ------------------- ------------------
<S> <C> <C> <C>
Interest expense......... $423 $423 $106
==== ==== ====
Income from continuing
operations............. $258 $258 $ 64
==== ==== ====
</TABLE>
P-10
<PAGE> 156
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
(g) Adjust amount of historical salaries paid to management in excess of
amounts per employment agreements included as part of the Transactions.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1997
------------------------------- -------------------------------
SELLING, SELLING,
GENERAL AND GENERAL AND
COST OF SALES ADMINISTRATIVE COST OF SALES ADMINISTRATIVE
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Salaries and wages:
Historical................................ $(1,348) $(2,343) $(241) $(385)
Per employment agreements................. 300 500 75 125
------- ------- ----- -----
$(1,048) $(1,843) $(166) $(260)
======= ======= ===== =====
</TABLE>
(h) Reclassify engineering, research and development expenses of McNeilus
to conform with the Oshkosh presentation.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1997
------------------- ------------------
<S> <C> <C>
Cost of goods sold........................ $(699) $(114)
===== =====
Engineering, research and development
expense................................. $ 699 $ 114
===== =====
</TABLE>
(i) Remove non-leasing interest income from McNeilus historical operating
results due to net borrowing position after consummation of the Transactions and
as a result of repayment of notes receivable from shareholders.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1997
------------------- ------------------
<S> <C> <C>
Miscellaneous income...................... $(1,765) $(356)
======= =====
</TABLE>
(j) Adjustment to record the tax effect on the above adjustments using
Oshkosh's marginal effective income tax rate of 39%. All adjustments were
tax-effected except for goodwill amortization.
(k) Included in historical and pro forma operating expense for McNeilus are
charitable contributions (including charitable contributions to national
organizations) of $1,109 and $284 for the twelve month and three month periods
ended November 30, 1997, respectively. While no pro forma reductions of these
expenses have been reflected in the pro forma statements of income, Oshkosh's
policy is to focus charitable contributions on needs of the communities in which
it operates. Management expects that annual charitable contribution levels for
the McNeilus entity would approximate $100.
P-11
<PAGE> 157
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
(l) Historical and pro forma depreciation and amortization.
<TABLE>
<CAPTION>
AS REPORTED PRO FORMA
- -------------------------------------- ------------------
OSHKOSH MCNEILUS TWELVE MONTHS
TWELVE MONTHS TWELVE MONTHS ENDED
ENDED ENDED PRO FORMA DECEMBER 31, 1997
DECEMBER 31, 1997 NOVEMBER 30, 1997 ADJUSTMENTS CONSOLIDATED
- ----------------- ----------------- ----------- -----------------
<S> <C> <C> <C>
$13,797 $3,884 $ 303(c) $25,636
6,642(d)
1,226(f)
(216)(f)
</TABLE>
<TABLE>
<CAPTION>
AS REPORTED PRO FORMA
- -------------------------------------- ------------------
OSHKOSH MCNEILUS TWELVE MONTHS
FISCAL YEAR TWELVE MONTHS ENDED
ENDED ENDED PRO FORMA SEPTEMBER 30, 1997
SEPTEMBER 30, 1997 NOVEMBER 30, 1997 ADJUSTMENTS CONSOLIDATED
- ------------------ ----------------- ----------- ------------------
<S> <C> <C> <C>
$14,070 $3,884 $ 303(c) $25,907
6,642(d)
1,226(f)
(218)(f)
</TABLE>
<TABLE>
<CAPTION>
AS REPORTED PRO FORMA
- ------------------------------------- ------------------
OSHKOSH MCNEILUS
- ----------------- ----------------- THREE MONTHS
THREE MONTHS ENDED ENDED
- ------------------------------------- PRO FORMA DECEMBER 31, 1997
DECEMBER 31, 1997 NOVEMBER 30, 1997 ADJUSTMENTS CONSOLIDATED
- ----------------- ----------------- ----------- -----------------
<S> <C> <C> <C>
$3,283 $952 $ 92(c) $6,240
1,660(d)
307(f)
(54)(f)
</TABLE>
P-12
<PAGE> 158
======================================================
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus,
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company or by the Initial Purchaser. This
Prospectus does not constitute an offer to sell, or solicitation of an offer to
buy, to any person in any jurisdiction where such an offer or solicitation would
be unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that the information
contained herein is correct as of any time subsequent to the date hereof.
------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary..................... 3
Risk Factors........................... 16
The Exchange Offer..................... 24
The Transactions....................... 32
Use of Proceeds........................ 34
Capitalization......................... 34
Selected Historical Consolidated
Financial Data for Oshkosh........... 35
Selected Historical Consolidated
Financial Data for McNeilus.......... 37
Management's Discussion and Analysis of
Consolidated Financial Condition and
Results of Operations................ 39
Business............................... 47
Management............................. 61
Principal Shareholders................. 63
Certain Transactions................... 64
Description of Indebtedness............ 65
Description of the New Notes........... 68
Certain Federal Income Tax
Considerations....................... 100
Plan of Distribution................... 103
Legal Matters.......................... 103
Experts................................ 103
Incorporation of Certain Documents by
Reference............................ 104
Available Information.................. 104
Index to Historical Financial
Statements........................... F-1
Index to Unaudited Pro Forma Condensed
Consolidated Financial Statements.... P-1
</TABLE>
======================================================
======================================================
OSHKOSH TRUCK CORPORATION
$100,000,000
NEW 8 3/4% SENIOR SUBORDINATED NOTES
DUE 2008
------------------------------
PROSPECTUS
, 1998
------------------------------
======================================================
<PAGE> 159
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to the Wisconsin Business Corporation Law and the Company's
By-Laws, directors and officers of the Company are entitled to mandatory
indemnification from the Company against certain liabilities and expenses (i) to
the extent such officers or directors are successful in the defense of a
proceeding and (ii) in proceedings in which the director or officer is not
successful in defense thereof, unless (in the latter case only) it is determined
that the director or officer breached or failed to perform his or her duties to
the Company and such breach or failure constituted: (a) a willful failure to
deal fairly with the Company or its shareholders in connection with a matter in
which the director of officer had a material conflict of interest; (b) a
violation of the criminal law unless the director or officer had reasonable
cause to believe his or her conduct was lawful or had no reasonable cause to
believe his or her conduct was unlawful; (c) a transaction from which the
director or officer derived an improper personal profit; or (d) willful
misconduct. The Wisconsin Business Corporation law specifically states that it
is the public policy of Wisconsin to require or permit indemnification,
allowance of expenses and insurance in connection with a proceeding involving
securities regulation, as described therein, to the extent required or permitted
as described above. Additionally, under the Wisconsin Business Corporation Law,
directors of the Company are not subject to personal liability to the Company,
its shareholders or any person asserting rights on behalf thereof for certain
breaches or failures to perform any duty resulting solely from their status as
directors, except in circumstances paralleling those in subparagraphs (a)
through (d) outlined above.
Expenses for the defense of any action for which indemnification may be
available may be advanced by the Company under certain circumstances.
The indemnification provided by the Wisconsin Business Corporation Law and
the Company's By-Laws is not exclusive of any other rights to which a director
or officer may be entitled. The general effect of the foregoing provisions may
be to reduce the circumstances which an officer or director may be required to
bear the economic burden of the foregoing liabilities and expense.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits. The exhibits listed in the accompanying Exhibit Index
are filed as part of this Registration Statement.
(b) Financial Statement Schedules. Schedule II -- Valuation and
Qualifying Accounts is hereby incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended September 30, 1997 (File No.
0-13886). All other schedules are omitted because they are not applicable,
or the required information is shown in the consolidated financial
statements or notes thereto.
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes;
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
II-1
<PAGE> 160
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the new offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
(d) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
(e) (1) That prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a part of this
Registration Statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer undertakes that
such reoffering prospectus will contain the information called for by the
applicable registration form with respect to reofferings by persons who may
be deemed underwriters, in addition to the information called for by the
other items of the applicable form.
(2) That every prospectus (i) that is filed pursuant to paragraph
(e)(1) immediately preceding, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Securities Act of 1933 and is used
in connection with an offering of securities subject to Rule 415, will be
filed as part of an amendment to the Registration Statement and will not be
used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(f) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore unenforceable. In the
event that a claim for indemnification against such liabilities (other than
payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE> 161
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oshkosh, and State of
Wisconsin, on this 13th day of March, 1998.
OSHKOSH TRUCK CORPORATION
By: /s/ ROBERT G. BOHN
------------------------------------
Robert G. Bohn
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1993, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
constitutes and appoints Robert G. Bohn, Charles L. Szews and Timothy M.
Dempsey, and each of them individually, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and any additional registration statement to be filed pursuant to
Rule 462(b) under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ ROBERT G. BOHN President, Chief Executive Officer March 13, 1998
- --------------------------------------------- and Director (Principal Executive
Robert G. Bohn Officer)
/s/ CHARLES L. SZEWS Executive Vice President and Chief March 13, 1998
- --------------------------------------------- Financial Officer (Principal
Charles L. Szews Financial and Accounting Officer)
/s/ J. WILLIAM ANDERSEN Director March 13, 1998
- ---------------------------------------------
J. William Andersen
/s/ DANIEL T. CARROLL Director March 13, 1998
- ---------------------------------------------
Daniel T. Carroll
/s/ FREDERICK M. FRANKS Director March 13, 1998
- ---------------------------------------------
Frederick M. Franks
/s/ MICHAEL W. GREBE Director March 13, 1998
- ---------------------------------------------
Michael W. Grebe
/s/ KATHLEEN J. HEMPEL Director March 13, 1998
- ---------------------------------------------
Kathleen J. Hempel
/s/ J. PETER MOSLING, JR. Director March 13, 1998
- ---------------------------------------------
J. Peter Mosling, Jr.
/s/ STEPHEN P. MOSLING Director March 13, 1998
- ---------------------------------------------
Stephen P. Mosling
/s/ RICHARD G. SIM Director March 13, 1998
- ---------------------------------------------
Richard G. Sim
</TABLE>
II-3
<PAGE> 162
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oshkosh, and State of
Wisconsin, on this 13th day of March, 1998.
PIERCE MANUFACTURING INC.
By: /s/ ROBERT G. BOHN
------------------------------------
Robert G. Bohn
President
Pursuant to the requirements of the Securities Act of 1993, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
constitutes and appoints Robert G. Bohn, Charles L. Szews and Timothy M.
Dempsey, and each of them individually, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and any additional registration statement to be filed pursuant to
Rule 462(b) under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ ROBERT G. BOHN President and Director March 13, 1998
--------------------------------------------- (Principal Executive Officer)
Robert G. Bohn
/s/ CHARLES L. SZEWS Vice President, Chief Financial March 13, 1998
--------------------------------------------- Officer and Director (Principal
Charles L. Szews Financial and Accounting
Officer)
/s/ PAUL C. HOLLOWELL Director March 13, 1998
---------------------------------------------
Paul C. Hollowell
/s/ MATTHEW J. ZOLNOWSKI Director March 13, 1998
---------------------------------------------
Matthew J. Zolnowski
/s/ TIMOTHY M. DEMPSEY Director March 13, 1998
---------------------------------------------
Timothy M. Dempsey
</TABLE>
II-4
<PAGE> 163
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oshkosh, and State of
Wisconsin, on this 13th day of March, 1998.
SUMMIT PERFORMANCE SYSTEMS, INC.
By: /s/ TIMOTHY M. DEMPSEY
------------------------------------
Timothy M. Dempsey
President and Secretary
Pursuant to the requirements of the Securities Act of 1993, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
constitutes and appoints Robert G. Bohn, Charles L. Szews and Timothy M.
Dempsey, and each of them individually, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and any additional registration statement to be filed pursuant to
Rule 462(b) under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ TIMOTHY M. DEMPSEY President, Secretary and Director March 13, 1998
- --------------------------------------------- (Principal Executive Officer)
Timothy M. Dempsey
/s/ CHARLES L. SZEWS Vice President and Chief Financial March 13, 1998
- --------------------------------------------- Officer (Principal Financial and
Charles L. Szews Accounting Officer)
/s/ JAMES E. DIEHL Director March 13, 1998
- ---------------------------------------------
James E. Diehl
</TABLE>
II-5
<PAGE> 164
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oshkosh, and State of
Wisconsin, on this 13th day of March, 1998.
IOWA CONTRACT FABRICATORS, INC.
By: /s/ ROBERT G. BOHN
------------------------------------
Robert G. Bohn
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1993, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
constitutes and appoints Robert G. Bohn, Charles L. Szews and Timothy M.
Dempsey, and each of them individually, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and any additional registration statement to be filed pursuant to
Rule 462(b) under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ ROBERT G. BOHN Chairman, Chief Executive Officer March 13, 1998
- --------------------------------------------- and Director (Principal Executive
Robert G. Bohn Officer)
/s/ CHARLES L. SZEWS Executive Vice President, Chief March 13, 1998
- --------------------------------------------- Financial Officer and Director
Charles L. Szews (Principal Financial and Accounting
Officer)
/s/ DENZIL MCNEILUS Director March 13, 1998
- ---------------------------------------------
Denzil McNeilus
/s/ GARWIN MCNEILUS Director March 13, 1998
- ---------------------------------------------
Garwin McNeilus
/s/ DAN J. LANZDORF Director March 13, 1998
- ---------------------------------------------
Dan J. Lanzdorf
/s/ TIMOTHY M. DEMPSEY Director March 13, 1998
- ---------------------------------------------
Timothy M. Dempsey
</TABLE>
II-6
<PAGE> 165
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oshkosh, and State of
Wisconsin, on this 13th day of March, 1998.
MCNEILUS TRUCK & MANUFACTURING, INC.
By: /s/ ROBERT G. BOHN
-------------------------------------
Robert G. Bohn
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1993, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
constitutes and appoints Robert G. Bohn, Charles L. Szews and Timothy M.
Dempsey, and each of them individually, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and any additional registration statement to be filed pursuant to
Rule 462(b) under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ ROBERT G. BOHN Chairman, Chief Executive Officer March 13, 1998
- --------------------------------------------- and Director (Principal Executive
Robert G. Bohn Officer)
/s/ CHARLES L. SZEWS Executive Vice President, Chief March 13, 1998
- --------------------------------------------- Financial Officer and Director
Charles L. Szews (Principal Financial and Accounting
Officer)
/s/ DENZIL MCNEILUS Director March 13, 1998
- ---------------------------------------------
Denzil McNeilus
/s/ GARWIN MCNEILUS Director March 13, 1998
- ---------------------------------------------
Garwin McNeilus
/s/ DAN J. LANZDORF Director March 13, 1998
- ---------------------------------------------
Dan J. Lanzdorf
/s/ TIMOTHY M. DEMPSEY Director March 13, 1998
- ---------------------------------------------
Timothy M. Dempsey
</TABLE>
II-7
<PAGE> 166
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oshkosh, and State of
Wisconsin, on this 13th day of March, 1998.
MCNEILUS COMPANIES, INC.
By: /s/ ROBERT G. BOHN
------------------------------------
Robert G. Bohn
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1993, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
constitutes and appoints Robert G. Bohn, Charles L. Szews and Timothy M.
Dempsey, and each of them individually, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and any additional registration statement to be filed pursuant to
Rule 462(b) under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ ROBERT G. BOHN Chairman, Chief Executive Officer and March 13, 1998
- --------------------------------------------- Director (Principal Executive
Robert G. Bohn Officer)
/s/ CHARLES L. SZEWS Executive Vice President, Chief March 13, 1998
- --------------------------------------------- Financial Officer and Director
Charles L. Szews (Principal Financial and Accounting
Officer)
/s/ DENZIL MCNEILUS Director March 13, 1998
- ---------------------------------------------
Denzil McNeilus
/s/ GARWIN MCNEILUS Director March 13, 1998
- ---------------------------------------------
Garwin McNeilus
/s/ DAN J. LANZDORF Director March 13, 1998
- ---------------------------------------------
Dan J. Lanzdorf
/s/ TIMOTHY M. DEMPSEY Director March 13, 1998
- ---------------------------------------------
Timothy M. Dempsey
</TABLE>
II-8
<PAGE> 167
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oshkosh, and State of
Wisconsin, on this 13th day of March, 1998.
KENSETT FABRICATORS, INC.
By: /s/ ROBERT G. BOHN
------------------------------------
Robert G. Bohn
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1993, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
constitutes and appoints Robert G. Bohn, Charles L. Szews and Timothy M.
Dempsey, and each of them individually, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and any additional registration statement to be filed pursuant to
Rule 462(b) under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ ROBERT G. BOHN Chairman, Chief Executive Officer and March 13, 1998
- --------------------------------------------- Director (Principal Executive Officer)
Robert G. Bohn
/s/ CHARLES L. SZEWS Executive Vice President, Chief Financial March 13, 1998
- --------------------------------------------- Officer and Director (Principal Financial and
Charles L. Szews Accounting Officer)
/s/ DENZIL MCNEILUS Director March 13, 1998
- ---------------------------------------------
Denzil McNeilus
/s/ GARWIN MCNEILUS Director March 13, 1998
- ---------------------------------------------
Garwin McNeilus
/s/ DAN J. LANZDORF Director March 13, 1998
- ---------------------------------------------
Dan J. Lanzdorf
/s/ TIMOTHY M. DEMPSEY Director March 13, 1998
- ---------------------------------------------
Timothy M. Dempsey
</TABLE>
II-9
<PAGE> 168
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oshkosh, and State of
Wisconsin, on this 13th day of March, 1998.
MCINTIRE FABRICATORS, INC.
By: /s/ ROBERT G. BOHN
------------------------------------
Robert G. Bohn
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1993, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
constitutes and appoints Robert G. Bohn, Charles L. Szews and Timothy M.
Dempsey, and each of them individually, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and any additional registration statement to be filed pursuant to
Rule 462(b) under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ ROBERT G. BOHN Chairman, Chief Executive Officer March 13, 1998
- --------------------------------------------- and Director (Principal Executive
Robert G. Bohn Officer)
/s/ CHARLES L. SZEWS Executive Vice President, Chief March 13, 1998
- --------------------------------------------- Financial Officer and Director
Charles L. Szews (Principal Financial and Accounting
Officer)
/s/ DENZIL MCNEILUS Director March 13, 1998
- ---------------------------------------------
Denzil McNeilus
/s/ GARWIN MCNEILUS Director March 13, 1998
- ---------------------------------------------
Garwin McNeilus
/s/ DAN J. LANZDORF Director March 13, 1998
- ---------------------------------------------
Dan J. Lanzdorf
/s/ TIMOTHY M. DEMPSEY Director March 13, 1998
- ---------------------------------------------
Timothy M. Dempsey
</TABLE>
II-10
<PAGE> 169
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oshkosh, and State of
Wisconsin, on this 13th day of March, 1998.
MCNEILUS FINANCIAL, INC.
By: /s/ ROBERT G. BOHN
------------------------------------
Robert G. Bohn
President and Chairman
Pursuant to the requirements of the Securities Act of 1993, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
constitutes and appoints Robert G. Bohn, Charles L. Szews and Timothy M.
Dempsey, and each of them individually, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and any additional registration statement to be filed pursuant to
Rule 462(b) under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ ROBERT G. BOHN President, Chairman and Director March 13, 1998
- ------------------------------------------ (Principal Executive Officer)
Robert G. Bohn
/s/ CHARLES L. SZEWS Executive Vice President, Chief March 13, 1998
- ------------------------------------------ Financial Officer and Director
Charles L. Szews (Principal Financial and Accounting
Officer)
/s/ TIMOTHY M. DEMPSEY Director March 13, 1998
- ------------------------------------------
Timothy M. Dempsey
</TABLE>
II-11
<PAGE> 170
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ------- -------------------
<C> <S>
(2.1) Stock Purchase Agreement dated December 8, 1997, by and
among McNeilus Companies, Inc., the shareholders of McNeilus
Companies, Inc. and the Company (incorporated by reference
to Exhibit 2.1 to the Company's Annual Report on Form 10-K
for the year ended September 30, 1997 (File No. 0-13886)).
(2.2) First Amendment to Stock Purchase Agreement dated February
26, 1998, by and among McNeilus Companies, Inc., the
shareholders of McNeilus Companies, Inc. and the Company
(incorporated by reference to Exhibit 2.2 to the Company's
Current Report on Form 8-K dated February 26, 1998 (File No.
0-13886)).
(3.1) Restated Articles of Incorporation of Oshkosh Truck
Corporation (incorporated by reference to Exhibit 3.1 to the
Company's Annual Report on Form 10-K for the year ended
September 30, 1997 (File No. 0-13886)).
(3.2) By-Laws of Oshkosh Truck Corporation, as amended.
(3.3) Restated Articles of Incorporation of Pierce Manufacturing
Inc.
(3.4) Restated By-Laws of Pierce Manufacturing Inc.
(3.5) Articles of Incorporation of Summit Performance Systems,
Inc.
(3.6) By-Laws of Summit Performance Systems, Inc.
(3.7) Articles of Incorporation of McNeilus Companies, Inc.
(3.8) By-Laws of McNeilus Companies, Inc., as amended.
(3.9) Restated and Amended Articles of Incorporation of McNeilus
Truck and Manufacturing, Inc.
(3.10) By-Laws of McNeilus Truck and Manufacturing, Inc., as
amended.
(3.11) Articles of Incorporation of Iowa Contract Fabricators, Inc.
(3.12) By-Laws of Iowa Contract Fabricators, Inc., as amended.
(3.13) Articles of Incorporation of McIntire Fabricators, Inc.
(3.14) By-Laws of McIntire Fabricators, Inc., as amended.
(3.15) Articles of Incorporation of Kensett Fabricators, Inc.
(3.16) By-Laws of Kensett Fabricators, Inc., as amended.
(3.17) Articles of Incorporation of McNeilus Financial, Inc., as
amended.
(3.18) By-Laws of McNeilus Financial, Inc., as amended.
(4.1) Credit Agreement dated February 26, 1998, among the Company,
Bank of America National Trust and Savings Association, as
Agent and as Swing Line Lender, and certain other financial
institutions (incorporated by reference to Exhibit 4.1 to
the Company's Current Report on Form 8-K dated February 26,
1998 (File No. 0-13886)).
(4.2) Indenture dated February 26, 1998, among the Company, the
Subsidiary Guarantors and Firstar Trust Company
(incorporated by reference to Exhibit 4.2 to the Company's
Current Report on Form 8-K dated February 26, 1998 (File No.
0-13886)).
(4.3) Form of New 8 3/4% Senior Subordinated Note due 2008.
(4.4) Form of New Note Guarantee.
(4.5) Purchase Agreement dated February 20, 1998, by and among the
Company, the Subsidiary Guarantors and BancAmerica Robertson
Stephens.
(5.1) Opinion of Foley & Lardner.
(10.1) Registration Rights Agreement dated February 26, 1998, by
and among the Company, the Subsidiary Guarantors and
BancAmerica Robertson Stephens.
</TABLE>
E-1
<PAGE> 171
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ------- -------------------
<C> <S>
(12.1) Statements regarding computation of ratios.
(21.1) Subsidiaries of the Company.
(23.1) Consent of Ernst & Young LLP.
(23.2) Consent of Larson, Allen, Weishair and Co., LLP
(23.3) Consent of Foley & Lardner (contained in Exhibit 5.1).
(25.1) Statement of Eligibility and Qualification of Trustee on
Form T-1 of Firstar Trust Company under the Trust Indenture
Act of 1939.
(99.1) Form of Letter of Transmittal for the New 8 3/4% Senior
Subordinated Notes due 2008.
(99.2) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(99.3) Form of Notice of Guaranteed Delivery.
</TABLE>
E-2
EXHIBIT 3.2
Amended February 2, 1998
Effective Immediately
Unless Otherwise Noted
BY-LAWS
OF
OSHKOSH TRUCK CORPORATION
(a Wisconsin Corporation)
INTRODUCTION
VARIABLE REFERENCES
0.01. Date of annual shareholders' meeting (See Section 2.01):
The regular annual meeting of the shareholders of this corporation shall
be held at the offices of the company or at any other place in the country
as may be determined by the Board of Directors, at ten o'clock A.M. upon
the fourth Monday in January of each year, or on such other date which
shall not be a legal holiday as shall be determined by the Board of
Directors.
0.02. Required notice of shareholders' meeting (See Section
2.04): Not less than ten days.
0.03. Authorized number of directors (See Section 3.01): Seven
(7))
0.04. Required notice of directors' meetings (See Section
3.05):
(a) not less than five days if by mail, and
(b) not less than 48 hours if by telegram, telephone,
teletype, telegraph, facsimile, or other form of wire or wireless
communication, or personal delivery.
0.05. Authorized number of Vice Presidents (See Section 4.01):
One to thirteen.
ARTICLE I. OFFICES
1.01. Principal and Business Offices. The corporation may have
such principal and other business offices, either within or without the
State of Wisconsin, as the Board of Directors may designate or as the
business of the corporation may require from time to time.
1.02. Registered Office. The registered office of the
corporation required by the Wisconsin Business Corporation Law to be
maintained in the State of Wisconsin may be, but need not be, identical
with the principal office in the State of Wisconsin, and the address of
the registered office may be changed from time to time by the Board of
Directors or by the registered agent. The business office of the
registered agent of the corporation shall be identical to such registered
office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the shareholders
shall be held at the date and hour in each year set forth in Section 0.01,
or at such other time and date within thirty days before or after said
date as may be fixed by or under the authority of the Board of Directors,
for the purpose of electing directors and for the transaction of such
other business as may come before the meeting. If the day fixed for the
annual meeting shall be a legal holiday in the State of Wisconsin, such
meeting shall be held on the next succeeding business day. If the
election of directors shall not be held on the day designated herein, or
fixed as herein provided, for any annual meeting of the shareholders, or
at any adjournment thereof, the Board of Directors shall cause the
election to be held at a special meeting of the shareholders as soon
thereafter as conveniently may be.
2.02. Special Meeting. Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by the Wisconsin
Business Corporation Law, may be called by the Board of Directors or the
President. The corporation shall call a special meeting of shareholders
in the event that the holders of at least 10% of all of the votes entitled
to be cast on any issue proposed to be considered at the proposed special
meeting sign, date and deliver to the corporation one or more written
demands for the meeting describing one or more purposes for which it is to
be held. The corporation shall give notice of such a special meeting
within thirty days after the date that the demand is delivered to the
corporation.
2.03. Place of Meeting. The Board of Directors may designate
any place, either within or without the State of Wisconsin, as the place
of meeting for any annual or special meeting of shareholders. If no
designation is made, the place of meeting shall be the principal office of
the corporation. Any meeting may be adjourned to reconvene at any place
designated by vote of a majority of the shares represented thereat.
2.04. Notice of Meeting. Written notice stating the place, day
and hour of the meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than
the number of days set forth in Section 0.02 (unless a longer period is
required by the law or the articles of incorporation) nor more than sixty
days before the date of the meeting, either personally or by mail, by or
at the direction of the President, or the Secretary, or other officer or
persons calling the meeting, to each shareholder of record entitled to
vote at such meeting and to such other persons as required by the
Wisconsin Business Corporation Law. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail, addressed
to the shareholder at his, her or its address as appears on the stock
record books of the corporation, with postage thereon prepaid. If an
annual or special meeting of shareholders is adjourned to a different
date, time or place, the corporation shall not be required to give notice
of the new date, time or place if the new date, time or place is announced
at the meeting before adjournment; provided, however, that if a new record
date for an adjourned meeting is or must be fixed, the corporation shall
give notice of the adjourned meeting to persons who are shareholders as of
the new record date.
2.05. Closing of Transfer Books or Fixing of Record Date. For
the purpose of determining shareholders entitled to notice of or to vote
at any meeting of shareholders or any adjournment thereof, or shareholders
entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other proper purpose, the Board of
Directors may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, seventy days. If the stock
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books
shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as of the record date for any such determination of
shareholders, such date in any case to be not more than seventy days and,
in case of a meeting of shareholders, not less than ten days prior to the
date on which the particular action, requiring such determination of
shareholders, is to be taken. If the stock transfer books are not closed
and no record date is fixed for the determination of shareholders entitled
to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the close of business on the
date on which notice of the meeting is mailed or on the date on which the
resolution of the Board of Directors declaring such dividend is adopted,
as the case may be, shall be the record date for such determination of
shareholders. If no record date is fixed by the Board of Directors or by
the Wisconsin Business Corporation Law for the determination of
shareholders entitled to demand a special meeting under Section 2.02, the
record date shall be the date that the first shareholder signs the demand.
Except as provided by the Wisconsin Business Corporation Law for a
court-ordered adjournment, a determination of shareholders entitled to
notice of and to vote at a meeting of shareholders is effective for any
adjournment of such meeting unless the Board of Directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more
than 120 days after the date fixed for the original meeting.
2.06. Voting Records. After a record date for a special or
annual meeting of shareholders has been fixed, the corporation shall
prepare a list of the names of all of the shareholders entitled to notice
of the meeting. The list shall be arranged by class or series of shares,
if any, and show the address of and number of shares held by each
shareholder. Such list shall be available for inspection by any
shareholder, beginning two business days after notice of the meeting is
given for which the list was prepared and continuing to the date of the
meeting, at the corporation's principal office or at a place identified in
the meeting notice in the city where the meeting will be held. A
shareholder or his or her agent may, on written demand, inspect and,
subject to the limitations imposed by the Wisconsin Business Corporation
Law, copy the list, during regular business hours and at his or her
expense, during the period that it is available for inspection pursuant to
Section 2.07. The corporation shall make the shareholders' list available
at the meeting and any shareholder or his or her agent or attorney may
inspect the list at any time during the meeting or any adjournment
thereof. Refusal or failure to prepare or make available the
shareholders' list shall not affect the validity of any action taken at a
meeting of shareholders.
2.07. Quorum. Shares entitled to vote as a separate voting
group may take action on a matter at a meeting only if a quorum of those
shares exists with respect to that matter. Except as otherwise provided
in the articles of incorporation or the Wisconsin Business Corporation
Law, a majority of the votes entitled to be cast on the matter shall
constitute a quorum of the voting group for action on that matter. Once a
share is represented for any purpose at a meeting, other than for the
purpose of objecting to holding the meeting or transacting business at the
meeting, it is considered present for purpose of determining whether a
quorum exists for the remainder of the meeting and for any adjournment of
that meeting unless a new record date is or must be set for the adjourned
meeting. If a quorum exists, except in the case of the election of
directors, action on a matter shall be approved if the votes cast within
the voting group favoring the action exceed the votes cast opposing the
action, unless the articles of incorporation or the Wisconsin Business
Corporation Law requires a greater number of affirmative votes. Unless
otherwise provided in the articles of incorporation, each director shall
be elected by a plurality of the votes cast by the shares entitled to vote
in the election of directors at a meeting at which a quorum is present.
Though less than a quorum of the outstanding votes of a voting group are
represented at a meeting, a majority of the votes so represented may
adjourn the meeting from time to time without further notice. At such
adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting
as originally notified.
2.08. Conduct of Meetings. The Chairman of the Board and in his
or her absence any person chosen by the shareholders present, shall call
the meeting of the shareholders to order and shall act as Chairman of the
meeting, and the Secretary of the Corporation shall act as Secretary of
all meetings of the shareholders, but, in the absence of the Secretary,
the presiding officer may appoint any other person to act as Secretary of
the meeting.
2.09. Proxies. At all meetings of shareholders, a shareholder
entitled to vote may vote in person or by proxy appointed in writing by
the shareholder or his or her duly authorized attorney in fact. Such
proxy shall be filed with the Secretary of the Corporation before or at
the time of the meeting. Unless otherwise provided in the proxy, a proxy
may be revoked at any time before it is voted, either by written notice
filed with the Secretary or the acting secretary of the meeting or by oral
notice given by the shareholder to the presiding officer during the
meeting. The presence of a shareholder who has filed his or her proxy
shall not of itself constitute a revocation. No proxy shall be valid
after eleven months from the date of its execution, unless otherwise
provided in the proxy. The Board of Directors shall have the power and
authority to make rules establishing presumptions as to the validity and
sufficiency of proxies.
2.10. Voting of Shares. Each outstanding share shall be
entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders, except to the extent that the voting rights of the shares of
any class or classes are enlarged, limited or denied by the articles of
incorporation.
2.11. Voting of Shares by Certain Holders.
(a) Other Corporations. Shares standing in the name of
another corporation may be voted either in person or by proxy, by the
president of such corporation or any other officers appointed by such
president. A proxy executed by any principal officer of such other
corporation or assistant thereto shall be conclusive evidence of the
signer's authority to act, in the absence of express notice to this
corporation, given in writing to the Secretary of this corporation,
at the designation of some other person by the Board of Directors or
the by-laws of such other corporation.
(b) Legal Representatives and Fiduciaries. Shares held by an
administrator, executor, guardian, conservator, trustee in bankruptcy,
receiver, or assignee for creditors may be voted by him, either in person
or by proxy, without a transfer of such shares into his name, provided
that there is filed with the Secretary before or at the time of meeting
proper evidence of his incumbency and the number of shares held. Shares
standing in the name of a fiduciary may be voted by him, either in person
or by proxy. A proxy executed by a fiduciary, shall be conclusive
evidence of the signer's authority to act, in the absence of express
notice to this corporation, given in writing to the Secretary of this
corporation, that such manner of voting is expressly prohibited or
otherwise directed by the document creating the fiduciary relationship.
(c) Pledges. A shareholder whose shares are pledged shall be
entitled to vote such shares until the shares have been transferred into
the name of the pledgee, and thereafter the pledgee shall be entitled to
vote the shares so transferred.
(d) Treasury Stock and Subsidiaries. Neither treasury shares,
nor shares held by another corporation if a majority of the shares
entitled to vote for the election of directors of such other corporation
is held by the corporation, shall be voted at any meeting or counted in
determining the total number of outstanding shares entitled to vote, but
shares of its own issue held by this corporation in a fiduciary capacity,
or held by such other corporation in a fiduciary capacity, may be voted
and shall be entitled to vote.
(e) Minors. Shares held by a minor may be voted by such minor
in person or by proxy and no such vote shall be subject to disaffirmance
or avoidance, unless prior to such vote the Secretary of the corporation
has received written notice or has actual knowledge that such shareholder
is a minor.
(f) Incompetents and Spendthrifts. Shares held by a
incompetent or spendthrift may be voted by such incompetent or spendthrift
in person or by proxy and no such vote shall be subject to disaffirmance
or avoidance, unless prior to such vote the Secretary of the Corporation
has actual knowledge that such shareholder has been adjudicated an
incompetent or spendthrift or actual knowledge of filing of judicial
proceedings for appointment of a guardian.
(g) Joint Tenants. Shares registered in the names of two or
more individuals who are named in the registration as joint tenants may be
voted in person or by proxy signed by any one or more of such individuals
if either (i) no other such individual or his legal representative is
present and claims the right to participate in the voting of such shares
or prior to the vote filed with the Secretary of the corporation a
contrary written voting authorization or direction or written denial of
authority of the individual present or signing the proxy proposed to be
voted or (ii) all such other individuals are deceased and the Secretary of
the corporation has no knowledge that the survivor has been adjudicated
not to be the successor to the interest of those deceased.
2.12. Waiver of Notice by Shareholders. Whenever any notice
whatever is required to be given to any shareholder of the corporation
under the articles of incorporation or by-laws or any provision of law, a
waiver thereof in writing, signed at any time, whether before or after the
time of meeting, by the shareholder entitled to such notice, shall be
deemed equivalent to the giving of such notice; provided that such waiver
in respect to any matter of which notice is required under any provision
of the Wisconsin Business Corporation Law, shall contain the same
information as would have been required to be included in such notice,
except the time and place of meeting.
2.13. Unanimous Consent without Meeting. Any action required or
permitted by the articles of incorporation or by-laws or any provision of
law to be taken at a meeting of the shareholders, may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall
be signed by all of the entitled shareholders to vote with respect to the
subject matter thereof.
ARTICLE III. BOARD OF DIRECTORS
3.01. General Powers and Number. The business and affairs of
the corporation shall be managed by its Board of Directors. The number of
directors of the corporation shall be as provided in Section 0.03.
3.02. Tenure and Qualifications. Each director shall hold
office until the next annual meeting of shareholders, and until his or her
successor shall have been elected, or until his or her prior death,
resignation or removal. A Director may be removed from office by
affirmative vote of a majority of the outstanding shares entitled to vote
for the election of such director, taken at a meeting of shareholders
called for that purpose. A director may resign at any time by filing his
or her written resignation with the Secretary of the corporation, which
shall be effective when the notice is delivered unless the notice
specifies a later date.
3.03. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this by-law immediately
after the annual meeting of shareholders, and each adjourned session
thereof. The place of such regular meeting shall be the same as the place
of the meeting of shareholders which precedes it, or such other suitable
place as may be announced at such meeting of shareholders. The Board of
Directors may provide, by resolution, the time and place, either within or
without the State of Wisconsin, for the holding of additional regular
meetings without other notice than such resolution.
3.04. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the Board,
the President, the Secretary or any two directors. If such meeting shall
be called by two directors, the date of the meeting shall be within ten
days of receipt by the Secretary or, in his absence by the Chairman of the
Board, the President or any Assistant Secretary, of their request, at a
time determined by such officer. The Chairman of the Board, the President
or the Secretary calling any special meeting of the Board of Directors,
except as otherwise provided by by-law, may fix any place, either within
or without the State of Wisconsin, as the place for holding any special
meeting of the Board of Directors called by them, and if no other place is
fixed, the place of meeting shall be the principal business office of the
Corporation in the State of Wisconsin.
3.05. Notice; Waiver. Notice of such meeting of the Board of
Directors (unless otherwise provide in or pursuant to Section 3.03) shall
be given by written notice delivered personally or mailed or given by
telegram or facsimile to each director at his or her business address or
at such other address as such director shall have designated in writing
filed with the Secretary, in each case not less than that number of hours
prior thereto as set forth in Section 0.04. If mailed, such notice shall
be deemed to be delivered when deposited in the United States mail so
addressed, with postage thereon prepaid. If notice be given by telegram
or facsimile, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Whenever any notice
whatever is required to be given to any director of the corporation under
the articles of incorporation or by-laws or any provision of law, a waiver
thereof in writing, signed at any time, whether before or after the time
of meeting, by the director entitled to such notice, shall be deemed
equivalent to the giving of such notice. The attendance of a director at
a meeting shall constitute a waiver of objects thereat to the transaction
of any business because the meeting is not lawfully called or convened.
Neither business to be transacted at, nor the purpose of, any regular or
special meeting of the Board of Directors need to be specified in the
notice or waiver of notice of such meeting.
3.06. Quorum. Except as otherwise provided by law or by the
articles of incorporation or these by-laws, a majority of the number of
directors as provided in Section 0.03 shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors, but a
majority of the directors present (though less than such quorum) may
adjourn the meeting from time to time without further notice.
3.07. Manner of Acting. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors, unless the act of a greater number is
required by law or by the articles of incorporation or these by-laws.
Annually, at the meeting of the Board of Directors which follows the
annual meeting of the shareholders, the directors shall choose from among
them a Chairman of the Board, who shall serve as such until a successor is
elected.
3.08. Conduct of Meetings. In the absence of the Chairman of
the Board, the President shall call the meeting of the Board of Directors
to order, and shall act as Chairman of the meeting, and in their absence
any director chosen by the Directors present shall call the meeting of the
Board of Directors to order and shall act as Chairman of the meeting. The
Secretary of the Corporation shall act as Secretary of all meetings of the
Board of Directors but, in the absence of the Secretary, the presiding
officer may appoint any Assistant Secretary or any director or other
person present to act as Secretary of the meeting.
3.09. Vacancies. Any vacancy occurring in the Board of
Directors, including a vacancy created by an increase in the number of
directors, may be filled until the next succeeding annual election by the
affirmative vote of a majority of the directors then in office, though
less than a quorum of the Board of Directors; provided, that in case of a
vacancy created by the removal of a director by vote of the shareholders,
the shareholders shall have the right to fill such vacancy at the same
meeting or any adjournment thereof; and provided further, that a vacancy
filled by the Board of Directors shall be filled by the vote of the
remaining director(s) elected by the class of shareholders which would be
entitled to fill that vacancy at a meeting of the shareholders.
3.10. Compensation. The Board of Directors, by affirmative vote
of a majority of the directors then in office, and irrespective of any
personal interest of any of its members, may establish from time to time a
reasonable compensation for directors of the corporation; provided that
persons who are directors and also are officers or employees of the
corporation eligible shall be ineligible to receive compensation as
directors. By affirmative vote of a majority of such directors, and
irrespective of any personal interest of any of them, the Board of
Directors also may establish, from time to time, a reasonable compensation
for each of the officers of the corporation. The Board of Directors, from
time to time, may delegate its authority under this by-law to an
appropriate committee. The Board of Directors also shall have authority
to provide for or to delegate authority to an appropriate committee to
provide for reasonable pensions, disability or death benefits, and other
benefits or payments to directors, officers and employees, and to their
estates, families, dependents or beneficiaries on account of services
rendered by such directors, officers and employees of the corporation.
3.11. Presumption of Assent. A director of the corporation who
is present at a meeting of the Board of Directors or a committee thereof
of which he or she is a member at which action on any corporate matter is
taken shall be presumed to have assented to the action taken unless his or
her dissent shall be entered in the minutes of the meeting or unless he or
she shall file his or her written dissent to such action with the person
acting as the Secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the Secretary of the
corporation immediately after the adjournment of the meeting. Such right
to dissent shall not apply to a director who voted in favor of such
action.
3.12. Committees. The Board of Directors by resolution adopted
by the affirmative vote of a majority of them then in office may designate
one or more committees from time to time. Each such committee shall
consist of at least three directors and shall have those of the powers of
the Board of Directors as shall be granted to such committee. Each such
committee may exercise its power at times when the Board of Directors is
not in session, subject to the by-laws of the corporation. No such
committee ever shall have the power or authority, however, to do any of
the following: adopt, amend, or repeal by-laws; authorize dividends or
other distributions; approve or propose action required by law to be
approved by shareholders; fill vacancies on the Board of Directors or any
committee of the Board of Directors; amend the articles of incorporation;
adopt, amend or repeal by-laws, approve a plan of merger not requiring
shareholder approval; authorizing or approve reacquisition of shares of
stock; or authorize or approve the issuance or sale or contract for sale
of shares of stock. The Board of Directors also at any time may elect one
or more of its members as alternate members of any such committee. Any
such alternate, upon request by the Chairman of the board, or in his or
her absence the President, or in his or her absence the Chairman of such
committee, may take the place of any absent member or members of the
committee at any of its meetings. Except as provided by by-laws or by
resolution of the Board of Directors, each such committee shall fix its
own rules governing the conduct of its activities as the Board of
Directors may request.
3.13. Unanimous Consent Without Meeting. Any action required
or permitted by the articles of incorporation or by-laws or any provision
of law to be taken by the Board of Directors at a meeting or by resolution
may be taken without a meeting, if a consent in writing, setting forth the
action so taken, shall be signed by all of the directors then in office.
3.14. Telephonic Meetings. Except as provided by this by-law,
any action required or permitted by the articles of incorporation or
by-laws or any provision of law to be taken by the Board of Directors at a
meeting or by resolution may be taken by a quorum of the Board of
Directors at a telephonic meeting or other meeting utilizing electronic
communication, if all participating directors: are informed that a meeting
is taking place at which official business may be transacted;
simultaneously may hear each other during the meeting; immediately is able
to send messages to all other participating directors; and if all
communication during the meeting immediately is transmitted to each
participating director. No meeting of the Board of Directors held
pursuant to this by-law may vote upon a plan of merger or shares exchange;
or to sell, lease, exchange or otherwise dispose of substantial property
or assets of the corporation; to dissolve voluntarily or to revoke
voluntary dissolution proceedings; or to file for bankruptcy.
ARTICLE IV. OFFICERS
4.01. Number. The principal officers of the corporation shall
be a President, the number of Vice-Presidents as provided in Section 0.05,
a Secretary and a Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as may be deemed
necessary may be elected or appointed by the Board of Directors. Any two
or more offices may be held by the same person, except the offices of
President and Secretary and the offices of President and Vice-President.
4.02. Election and Term of Office. The officers of the
corporation to be elected by the Board of Directors shall be elected
annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the Shareholders. If the
election of officers shall not be held at such meeting, such election
shall be held as soon thereafter as conveniently may be. Each officer
shall hold office until his successor shall have been duly elected or
until his prior death, resignation or removal.
4.03. Resignation; Removal. Any officer may resign at any time
by delivering written notice to an officer of the corporation. A
resignation shall be effective when delivered unless the notice specifies
a later date which is accepted by the corporation. Any officer or agent
may be removed by the Board of Directors whenever in its judgment the best
interest of the corporation will be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so
removed. Election or appointment shall not of itself create contract
rights.
4.04. Vacancies. A vacancy in any principal office because of
death, resignation, removal, disqualification or otherwise, shall be
filled by the Board of Directors for the unexpired portion of the term.
4.05. This Section 4.05 is intentionally left vacant.
4.06. President and Chief Executive Officer. The President
shall be the Chief Executive Officer of the corporation. Subject to the
control of the Board of Directors, he shall be responsible for the control
and general management of all of the business and affairs of the
corporation. In the absence of the Chairman of the Board he may preside
at all meetings of the shareholders and of the Board of Directors. He
shall see that all resolutions and orders of the Board of Directors and
its committees are carried into effect. He shall have authority to sign,
execute and acknowledge, on behalf of the corporation, all deeds,
mortgages, bonds, stock certificates, contracts, leases, reports and all
other documents or instruments necessary or proper to be executed in the
course of the ordinary business of the corporation, or which shall be
authorized by resolution of the Board of Directors. Except as otherwise
provided by law or the Board of Directors, he also may authorize any
Vice-President or other officer or agent of the corporation to sign,
execute and acknowledge such documents or instruments in his place and
stead. In general he shall have the powers of supervision of the business
of the corporation. He shall have authority, subject to such rules as may
be prescribed by the Board of Directors, to appoint such agents and
employees of the corporation as he shall deem necessary, to prescribe
their powers, duties and compensation, and to delegate authority to them.
Such agents and employees shall hold office at the discretion of the
President.
4.07. The Vice-Presidents. In the absence of the President or
in the event of his death, inability or refusal to act, or in the event
for any reason it shall be impracticable for the President to act
personally, the Vice-President (or in the event there be more than one
Vice-President, the Vice-Presidents in the order designated by the Board
of Directors, or in the absence of any designation, then in the order of
their election) shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the
restrictions upon the President. The Board of Directors may designate a
Vice-President as the Chief Financial Officer of the Corporation, in which
event he or she shall have responsibility for all financial matters which
affects the Corporation other than those expressly provided for the
Treasurer. Any Vice President may sign, with the Secretary or Assistant
Secretary, certificates for shares of the corporation; and shall perform
such other duties and have such authority as from time to time may be
delegated or assigned to him by the President or by the Board of
Directors. The execution of any instrument of the corporation by any
Vice-President shall be conclusive evidence, as to third parties, of his
authority to act in the stead of the President.
4.08. The Secretary. The Secretary shall: (a) keep the minutes
of the meetings of the shareholders and of the Board of Directors in one
or more books provided for that purpose; (b) see that all notices are duly
given in accordance with the provisions of these by-laws or as required by
law; (c) be custodian of the corporate records and of the seal of the
corporation and see that the seal of the corporation is affixed to all
documents the execution of which on behalf of the corporation under its
seal is duly authorized; (d) keep or arrange for the keeping of a register
of the post office addresses of each shareholder which shall be furnished
to the Secretary by such shareholder; (e) sign with the President, or a
Vice-President, certificates for shares of the corporation, the issuance
of which shall have been authorized by resolution of the Board of
Directors; (f) have general charge of the stock transfer books of the
corporation; and (g) in general perform all duties incident to the office
of Secretary and have such other duties and exercise such authority as
from time to time may be delegated or assigned to him/her by the President
or by the Board of Directors.
4.09. The Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the
corporation; (b) receive and give receipts for money due and payables to
the corporation from any source whatsoever, and deposit all such moneys in
the name of the corporation in such banks, trust companies or other
depositories as shall be selected in accordance with the provisions of
Section 5.04; and (c) in general perform all of the duties incident to the
office of Treasurer and have such other duties and exercise such other
authority as from time to time may be delegated or assigned to him by the
President or by the Board of Directors. If required by the Board of
Directors, the Treasurer shall give a bond for the faithful discharge of
his duties in such sum and with such surety or sureties as the Board of
Directors shall determine.
4.10. Assistant Secretaries and Assistant Treasurers. There
shall be such number of Assistant Secretaries and Assistant Treasurers as
the Board of Directors may from time to time authorize. The Assistant
Secretaries may sign with the President or a Vice-President certificates
for shares of the corporation the issuance of which shall have been
authorized by a resolution of the Board of Directors. The Assistant
Treasurers shall respectively, if required by the Board of Directors, give
bonds for the faithful discharge of their duties in such sums and with
such sureties as the Board of Directors shall determine. The Assistant
Secretaries and Assistant Treasurers, in general, shall perform such
duties and have such authority as shall from time to time be delegated or
assigned to them by the Secretary or the Treasurer, respectively, or by
the President or the Board of Directors.
4.11. Other Assistants and Acting Officers. The Board of
Directors shall have the power to appoint any person to act as Assistant
to any officer, or as agent for the corporation in his stead, or to
perform the duties of such officer whenever for any reason it is
impracticable for such officer to act personally, and such assistant or
acting officer or other agent so appointed by the Board of Directors shall
have the power to perform all the duties of the office to which he is so
appointed to be assistant, or as to which he is so appointed to act,
except as such power may be otherwise defined or restricted by the Board
of Directors.
4.12. Salaries. The salaries of the principal officers shall
be fixed from time to time by the Board of Directors or by a duly
authorized committee thereof, and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of
the corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS
AND DEPOSITS; SPECIAL CORPORATE ACTS
5.01. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or
execute or deliver any instrument in the name of and on behalf of the
corporation and such authorization may be general or confined to specific
instances. In the absence of other designation, all deeds, mortgages and
instruments of assignment or pledge made by the corporation shall be
executed in the name of the corporation by the President, or, in his
absence by one of the Vice Presidents and by the Secretary, an Assistant
Secretary, the Treasurer, an Assistant Treasurer, or Controller. When
necessary or required by law, the Secretary or an Assistant Secretary
shall affix the corporate seal to all such instruments. When an
instrument has been executed in the manner provided by this Section, no
party or third person shall be required to inquire into the authority of
the officers signing for the corporation so to act.
5.02. Loans. No indebtedness for borrowed money shall be
contracted on behalf of the corporation and no evidences of such
indebtedness shall be issued in its name unless authorized by or under the
authority of a resolution of the Board of Directors. Such authorization
may be general or confined to specific instances.
5.03. Checks, Drafts, etc. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued
in the name of the corporation, shall be signed by such officer or
officers, agent or agents, of the corporation and in such manner as shall
from time to time be determined by or under the authority of a resolution
of the Board of Directors.
5.04. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the
corporation in such banks, trust companies or other depositaries as may be
selected by or under the authority of a resolution of the Board of
Directors.
5.05. Voting of Securities Owned by this Corporation. Subject
always to the specific directions of the Board of Directors, (a) any
shares or other securities issued by any other corporation and owned or
controlled by this corporation may be voted at any meeting of security
holders of such other corporation by the President and, in his absence, by
any Vice-President then present, and (b) whenever in the judgment of the
President and, in his absence, by any Vice-President, it is desirable for
this corporation to execute a proxy or written consent in respect to any
share or other securities issued by any other corporation and owned by
this corporation, such proxy or consent shall be executed in the name of
this corporation by the President or, in his absence, by any Vice -
President, without necessity of any authorization by the Board of
Directors, affixation of corporate seal, or counter-signature or
attestation by another officer. Any person or persons designated in the
manner provided by this Section as the proxy or proxies of this
corporation shall have full right, power and authority to vote the shares
or other securities issued by such other corporation and owned by this
corporation the same as such shares or other securities might be voted by
this corporation.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01. Certificates for Shares. Certificates representing shares
of the corporation shall be in such form, consistent with law, as shall be
determined by the Board of Directors. All certificates shall be signed by
the President or a Vice-President and by the Secretary or an Assistant
Secretary. All certificates shall be numbered consecutively or otherwise
identified. The name and address of each person to whom a certificate is
issued, together with the number of shares represented by the certificate
and the date of its issue, shall be entered on the stock transfer books of
the corporation. All certificates surrendered to the corporation shall be
canceled. No new certificate for previously issued shares shall be issued
until the outstanding certificate(s) for the same share shall have been
surrendered and canceled, except as provided by Section 6.06.
6.02. Facsimile Signatures and Seal. The seal of the
corporation on any certificate for shares may be a facsimile. The
signatures of the President or Vice-President and the Secretary or
Assistant Secretary upon a certificate may be facsimiles if the
certificate is manually signed on behalf of a transfer agent, or a
registrar, other than the corporation itself or an employee of the
corporation.
6.03. Signature by Former Officers. In case any officer, who
has signed or whose facsimile signature has been placed upon any
certificate for shares, shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same
effect as if he were such officer at the date of its issue.
6.04. Transfer of Shares. Prior to due presentment of a
certificate for shares for registration of transfer the corporation may
treat the registered owner of such shares as the person exclusively
entitled to vote, to receive notifications and otherwise to have and
exercise all the rights and power of an owner. Where a certificate for
shares is presented to the corporation with a request to register for
transfer, the corporation shall not be liable to the owner or any other
person suffering loss as a result of such registration of transfer if (a)
there were on or with the certificate the necessary endorsements and (b)
the corporation had no duty to inquire into adverse claims or has
discharged any such duty. The corporation may require reasonable
assurance that said endorsements are genuine and effective and compliance
with such other regulations as may be prescribed by or under the authority
of the Board of Directors.
6.05. Restrictions on Transfer. The face or reverse side of
each certificate representing shares shall bear a conspicuous notation of
any restriction imposed by the corporation upon the transfer of such
shares.
6.06. Lost, Destroyed or Stolen Certificates. Where the owner
claims that his certificate for been lost, destroyed or wrongfully taken,
a new certificate shall be issued in place thereof if the owner (a) so
requests before the corporation has notice that such shares have been
acquired by a bona fide purchaser, and (b) files with the corporation a
sufficient indemnity bond, and (c) satisfied such other reasonable
requirements as may be prescribed by or under the authority of the Board
of Directors.
6.07. Consideration for Shares. The shares of the corporation
may be issued for such consideration as shall be fixed from time to time
by the Board of Directors, provided that any shares having a par value
shall not be issued for a consideration less than the par value thereof.
The consideration to be paid for shares may be paid in whole or in part,
in money, on other property, tangible or intangible, or in labor or
services actually performed for the corporation. When payment of the
consideration for which shares are to be issued shall have been received
by the corporation, such shares shall be deemed to be fully paid and
nonassessable by the corporation. No certificate shall be issued for any
share until such share is fully paid.
6.08. Stock Regulations. The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with the statutes of the State of Wisconsin as it may deem
expedient concerning the issue, transfer and registration of certificates
representing shares of the corporation.
ARTICLE VII. INDEMNIFICATION
7.01. Indemnification. Indemnification by the corporation
shall be provided pursuant to Wisconsin Statute Section 180.0859 et. seq.
Such indemnification shall be provided to directors, officers, employees,
and agents of the corporation. Directors and officers eligible for
indemnification shall include:
(a) A natural person who is or was a director or officer of
the corporation.
(b) A natural person who, while a director or officer of the
corporation, is or was serving at the request of the corporation as a
director, officer, partner, trustee, member of any governing or decision
making committee, employee or agent of another corporation or foreign
corporation, partnership, joint venture, trust or other enterprise.
(c) A natural person who, while a director or officer of the
corporation, is or was serving an employee benefit plan because his or her
duties to the corporation also imposed duties on, or otherwise involved
services by, the person to the plan or to participants in or beneficiaries
of the plan.
(d) And, unless the context requires otherwise, the estate or
personal representative of a director or officer.
The corporation shall indemnify a director, officer, employee or
agent to the extent he or she has been successful on the merits or
otherwise in the defense of a proceeding for all reasonable expenses
incurred in the proceeding if the director, officer, employee, or agent
was a party because he or she is a member or officer of the corporation.
In cases not included under the above paragraph, the corporation
shall indemnify a director, officer, employee or agent against liability
incurred by that person in a proceeding to which that person was a party
because he or she is or was a director, officer, employee, or agent of the
corporation, unless liability was incurred because that person breached or
failed to perform a duty he or she owed to the corporation and the breach
or failure to perform constitutes any of the following:
(a) A willful failure to deal fairly with the corporation or
its shareholders in connection with a matter in which the person has a
material conflict of interest.
(b) A violation of criminal law unless the person had a
reasonable cause to believe his or her conduct was lawful or no reasonable
cause to believe his or her conduct was unlawful.
(c) A transaction from which the person derived an improper
personal profit.
(d) Willful misconduct.
For purposes of this Article "expenses" shall be defined to include
fees, costs, charges, disbursements, attorneys fees and other expenses
incurred in connection with the proceeding. "Liability" includes an
obligation to pay a judgment, settlement, penalty, assessment, forfeiture
or fine, including an excess tax assessment with respect to an employee
benefit plan, and reasonable expenses. "Party" includes a natural person
who was, or is threatened to be made, a named defendant or respondent in a
proceeding. "Proceeding" means any threatened, pending or completed
civil, criminal, administrative or investigative action, suit, arbitration
or other proceeding, whether formal or informal, which involves foreign,
federal, state or local law and which is brought by or in the right of the
corporation or by any other person.
The termination of a proceeding by judgment, order, settlement or
conviction, or upon a plea of no contest or an equivalent plea, does not,
by itself, create a presumption that indemnification of the director or
officer is not required.
The director, officer, employee, or agent seeking indemnification
shall select one of the following means for determining his or her right
to indemnification:
(a) By a majority vote of a quorum of the Board of Directors
consisting of directors not at the time parties to the same or related
proceedings. If a quorum of disinterested directors cannot be obtained,
by majority vote of a committee duly appointed by the Board of Directors
and consisting solely of two or more directors not at the same time
parties to the same or related proceedings. Directors who are parties to
the same or related proceedings may participate in the designation of
members of the committee.
(b) By independent legal counsel selected by a quorum of the
Board of Directors or its committee in the manners prescribed in paragraph
(a) above or, if unable to obtain such quorum or committee, by a majority
vote of the full Board of Directors, including directors who are parties
to the same or related proceedings.
(c) By a panel of three arbitrators consisting of one arbi-
trator selected by those directors entitled under paragraph (b) to select
independent legal counsel, one arbitrator selected by the director or
officer seeking indemnification and one arbitrator selected by the two
arbitrators previously selected.
(d) By an affirmative vote of shares as provided in Wisconsin
Statutes Section 180.0725 through 180.0727. Shares owned by, or voted
under the control of, persons who are at the time parties to the same or
related proceedings, whether as plaintiffs or defendants or in any other
capacity, may not be voted in making the determination.
(e) By a Court under Wisconsin Statutes Section 180.0854.
(f) By any other method provided for and any additional right
to indemnification permitted under Wisconsin Statutes Section 180.0858.
Upon written request by a person who is a party to a proceeding, a
corporation may pay or reimburse his or her reasonable expenses as
incurred, if the person provides the corporation with a written
affirmation of his or her good faith belief that he or she has not reached
or failed to perform his or her duties to the corporation. A bond or
undertaking need not be required prior to the advancement of such
expenses.
Indemnification additional to that set forth in this Article may be
provided by resolution of the Board of Directors except as restricted by
law.
7.02 Insurance. The corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of another corporation, against any liability
asserted against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under the provisions of this
By-law.
ARTICLE VIII. AMENDMENTS
8.01. By Shareholders. These by-laws may be altered, amended or
repealed and new by-laws may be adopted by the shareholders by affirmative
vote of not less than a majority of the shares present or represented at
any annual or special meeting of the shareholders at which a quorum is in
attendance.
8.02. By Directors. These by-laws may also be altered, amended
or repealed and new by-laws may be adopted by the Board of Directors by
affirmative vote of a majority of the number of directors present at any
meeting at which a quorum is in attendance; but no by-law adopted by the
shareholders shall be amended or repealed by the Board of Directors if the
by-law so adopted so provides.
8.03. Implied Amendments. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be inconsistent
with the by-laws then in effect but is taken or authorized by affirmative
vote of not less than the number of shares or the number of directors
required to amend the by-laws so that the by-laws would be consistent with
such action, shall be given the same effect as though the by-laws had been
temporarily amended or suspended so far, but only so far, as is necessary
to permit the specific action so taken or authorized.
EXHIBIT 3.3
RESTATED ARTICLES OF INCORPORATION
OF
PIERCE MANUFACTURING INC.
Preamble. Pierce Manufacturing Inc., a corporation organized under
the laws of the State of Wisconsin, hereby adopts the following Restated
Articles of Incorporation of said corporation, which amend, supersede and
take the place of its heretofore existing articles of incorporation and
all amendments thereto.
Article 1. Name. The name of the corporation is Pierce
Manufacturing Inc.
Article 2. Purpose. The corporation may engage in any lawful
activity within the purposes for which corporations may be organized under
the Wisconsin Business Corporation Law, Chapter 180, Wisconsin Statutes.
Article 3. Authorized Shares. The aggregate number of shares of
stock which the corporation shall have authority to issue is Four Hundred
Forty Two Thousand (442,000), consisting of one class only, designated as
"Common Stock" with a par value of five cents ($.05) per share.
Article 4. Registered Office and Registered Agent. The address
of the registered office is 2600 American Drive, P.O. Box 2017, Appleton,
Winnebago County, Wisconsin 54913. The name of the corporation's
registered agent at such address is Michael R. Reese.
Article 5. Number of Directors. The number of directors at the
time of the adoption of these Restated Articles of Incorporation is six
(6), and hereafter, the number of directors, not less than three (3),
shall be fixed by or in the manner provided in the Bylaws.
Article 6. Corporate Stock Transactions. The corporation is
authorized to acquire and dispose of its own shares.
Article 7. Preemptive Rights. No holder of stock of the
corporation shall, as such holder, have any right to purchase or subscribe
for any shares of the capital stock of the corporation which it may issue
or sell, or for any securities convertible into or carrying a right to
subscribe to or acquire any shares of capital stock of the corporation
(whether out of the number of shares authorized by these Articles of
Incorporation, or out of any shares acquired by the corporation after the
issue thereof, or otherwise) other than such right, if any, as the Board
of Directors, in its discretion, may determine.
EXHIBIT 3.4
BY-LAWS
OF
PIERCE MANUFACTURING. INC.
(a Wisconsin corporation)
INTRODUCTION -
VARIABLE REFERENCES
0.01. Date of annual shareholders' meeting (See Section 2.01):
10:00 A.M. Fourth Monday February 1988
(Hour) (Week) (Day) (Month) (First year)
0.02. Required notice of shareholders' meeting (See Section
2.04): not less than 10 days.
*
0.03. Authorized number of directors (See Section 3.01): 9
*
0.04. Required notice of directors' meetings (See Section
3.05):
(a) not less than 3 days if by mail, and
*
(b) not less than 48 hours if by telegram or personal
delivery.
*
0.05. Authorized number of Vice-Presidents (See Section 4.01):
two (2)
*
* These spaces are reserved for official notation of future amendments
to these sections.
ARTICLE I. OFFICES
1.01. Principal and Business Offices. The corporation may have
such principal and other business offices, either within or without the
State of Wisconsin, as the Board of Directors may designate or as the
business of the corporation may require from time to time.
1.02. Registered Office. The registered office of the
corporation required by the Wisconsin Business Corporation Law to be
maintained in the State of Wisconsin may be, but need not be, identical
with the principal office in the State of Wisconsin, and the address of
the registered office may be changed from time to time by the Board of
Directors or by the registered agent. The business office of the
registered agent of the corporation shall be identical to such registered
office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the
shareholders shall be held at the date and hour in each year set forth in
Section 0.01, or at such other time and date within thirty days before or
after said date as may be fixed by or under the authority of the Board of
Directors, for the purpose of electing directors and for the transaction
of such other business as may come before the meeting. If the day fixed
for the annual meeting shall be a legal holiday in the State of Wisconsin,
such meeting shall be held on the next succeeding business day. If the
election of directors shall not be held on the day designated herein, or
fixed as herein provided, for any annual meeting of the shareholders, or
at any adjournment thereof, the Board of Directors shall cause the
election to be held at a special meeting of the shareholders as soon
thereafter as conveniently may be.
2.02. Special Meeting. Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by statute, may
be called by the President or the Board of Directors or by the person
designated in the written request of the holders of not less than one-
tenth of all shares of the corporation entitled to vote at the meeting.
2.03. Place of Meeting. The Board of Directors may designate
any place, either within or without the State of Wisconsin, as the place
of meeting for any annual meeting or for any special meeting called by the
Board of Directors. A waiver of notice signed by all shareholders
entitled to vote at a meeting may designate any place, either within or
without the State of Wisconsin, as the place for the holding of such
meeting. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal business office of the
corporation in the State of Wisconsin or such other suitable place in the
county of such principal office as may be designated by the person calling
such meeting, but any meeting may be adjourned to reconvene at any place
designated by vote of a majority of the shares represented thereat.
2.04. Notice of Meeting. Written notice stating the place, day
and hour of the meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than
the number of days set forth in Section 0.02 (unless a longer period is
required by law or the articles of incorporation) nor more than fifty days
before the date of the meeting, either personally or by mail, by or at the
direction of the President, or the Secretary, or other officer or persons
calling the meeting, to each shareholder of record entitled to vote at
such meeting: If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder at his
address as it appears on the stock record books of the corporation, with
postage thereon prepaid.
2.05. Closing of Transfer Books or Fixing of Record Date. For
the purpose of determining shareholders entitled to notice of or to vote
at any meeting of shareholders or any adjournment thereof, or shareholders
entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other proper purpose, the Board of
Directors may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty days. If the stock
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books
shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than fifty days and, in
case of a meeting of shareholders, not less than ten days prior to the
date on which the particular action, requiring such determination of
shareholders, is to be taken. If the stock transfer books are not closed
and no record date is fixed for the determination of shareholders entitled
to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the close of business on the
date on which notice of the meeting is mailed or on the date on which the
resolution of the Board of Directors declaring such dividend is adopted,
as the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at
any meeting of shareholders has been made as provided in this section,
such determination shall be applied to any adjournment thereof except
where the determination has been made through the closing of the stock
transfer books and the stated period of closing has expired.
2.06. Voting Records. The officer or agent having charge of
the stock transfer books for shares of the corporation shall, before each
meeting of shareholders, make a complete record of the shareholders
entitled to vote at such meeting, or any adjournment thereof, with the
address of and the number of shares held by each. Such record shall be
produced and kept open at the time and place of the meeting and shall be
subject to the inspection of any shareholder during the whole time of the
meeting for the purposes of the meeting. The original stock transfer
books shall be prima facie evidence as to who are the shareholders
entitled to examine such record or transfer books or to vote at any
meeting of shareholders. Failure to comply with the requirements of this
section shall not affect the validity of any action taken at such meeting.
2.07. Quorum. Except as otherwise provided in the articles of
incorporation, a majority of the shares entitled to vote, represented in
person or by proxy, shall constitute a quorum at a meeting of
shareholders. If a quorum is present, the affirmative vote of the
majority of the shares represented at the meeting and entitled to vote on
the subject matter shall be the act of the shareholders unless the vote of
a greater number or voting by classes is required by law or the articles
of incorporation. Though less than a quorum of the outstanding shares are
represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time without further notice. At such
adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been, transacted at the
meeting, as originally notified.
2.08. Conduct of Meetings. The Chairman of the Board, and in
his absence, the President, and in his absence, a Vice President in the
order provided under Section 4.06, and in their absence, any person chosen
by the shareholders present shall, call the meeting of the shareholders to
order and shall act as chairman of the meeting, and the Secretary of the
corporation shall act as secretary of all meetings of the shareholders,
but, in the absence of the Secretary, the presiding officer may appoint
any other person to act as secretary of the meeting.
2.09. Proxies. At all meetings of shareholders, a shareholder
entitled to vote may vote in person or by proxy appointed in writing by
the shareholder or by his duly authorized attorney in fact. Such proxy
shall be filed with the Secretary of the corporation before or at the time
of the meeting. Unless otherwise provided in the proxy, a proxy may be
revoked at any time before it is voted, either by written notice filed
with the Secretary or the acting secretary of the meeting or by oral
notice given by the shareholder to the presiding officer during the
meeting: The presence of a shareholder who has filed his proxy shall not
of itself constitute a revocation. No proxy shall be valid after eleven
months from the date of its execution, unless otherwise provided in the
proxy. The Board of Directors shall have the power and authority to make
rules establishing presumptions as to the validity and sufficiency of
proxies.
2.10. Voting of Shares. Each outstanding share shall be
entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders, except to the extent that the voting rights of the shares of
any class or classes are enlarged, limited or denied by the articles of
incorporation.
2.11. Voting of Shares by Certain Holders.
(a) Other Corporations. Shares standing in the name of another
corporation may be voted either in person or by proxy, by the
president of such corporation or any other officer appointed by such
president. A proxy executed by any principal officer of such other
corporation or assistant thereto shall be conclusive evidence of the
signer's authority to act, in the absence of express notice to this
corporation, given in writing to the secretary of this corporation,
of the designation of some other person by the board of directors or
the by-laws of such other corporation.
(b) Legal Representatives and Fiduciaries. Shares held by an
administrator, executor, guardian, conservator, trustee in
bankruptcy, receiver, or assignee for creditors may be voted by him,
either in person or by proxy, without a transfer of such shares into
his name, provided that there is filed with the Secretary before or
at the time of meeting proper evidence of his incumbency and the
number of shares held. Shares standing in the name of a fiduciary
may be voted by him, either in person or by proxy. A proxy executed
by a fiduciary, shall be conclusive evidence of the signer's
authority to act, in the absence of express notice to this
corporation, given in writing to the Secretary of this corporation,
that such manner of voting is expressly prohibited or otherwise
directed by the document creating the fiduciary relationship.
(c) Pledgees. A shareholder whose shares are pledged shall be
entitled to vote such shares until the shares have been transferred
into the name of the pledgee, and thereafter the pledgee shall be
entitled to vote the shares so transferred.
(d) Treasury Stock and Subsidiaries. Neither treasury shares,
nor shares held by another corporation if a majority of the shares
entitled to vote for the election of directors of such other
corporation is held by this corporation, shall be voted at any
meeting or counted in determining the total number of outstanding
shares entitled to vote, but shares of its own issue held by this
corporation in a fiduciary capacity, or held by such other
corporation in a fiduciary capacity, may be voted and shall be
counted in determining the total number of outstanding shares
entitled to vote.
(e) Minors. Shares held by a minor may be voted by such minor
in person or by proxy and no such vote shall be subject to
disaffirmance or avoidance, unless prior to such vote the Secretary
of the corporation has received written notice or has actual
knowledge that such shareholder is a minor.
(f) Incompetents and Spendthrifts. Shares held by an
incompetent or spendthrift may be voted by such incompetent or
spendthrift in person or by proxy and no such vote shall be subject
to disaffirmance or avoidance, unless prior to such vote the
Secretary of the corporation has actual knowledge that such
shareholder has been adjudicated an incompetent or spendthrift or
actual knowledge of filing of judicial proceedings for appointment of
a guardian.
(g) Joint Tenants. Shares registered in the names of two or
more individuals who are named in the registration as joint tenants
may be voted in person or by proxy signed by any one or more of such
individuals if either (i) no other such individual or his legal
representative is present and claims the right to participate in the
voting of such shares or prior to the vote file with the Secretary of
the corporation a contrary written voting authorization or direction
or written denial of authority of the individual present or signing
the proxy proposed to be voted or (ii) all such other individuals are
deceased and the Secretary of the corporation has no actual knowledge
that the survivor has been adjudicated not to be the successor to the
interests of those deceased.
2.12. Waiver of Notice by Shareholders. Whenever any notice
whatever is required to be given to any shareholder of the corporation
under the articles of incorporation or by-laws or any provision of law, a
waiver thereof in writing, signed at any time, whether before or after the
time of meeting, by the shareholder entitled to such notice, shall be
deemed equivalent to the giving of such notice; provided that such waiver
in respect to any matter of which notice is required under any provision
of the Wisconsin Business Corporation Law, shall contain the same
information as would have been required to be included in such notice,
except the time and place of meeting.
2.13. Unanimous Consent without Meeting. Any action required
or permitted by the articles of incorporation or by-laws or any provision
of law to be taken at a meeting of the shareholders, may be taken without
a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the shareholders entitled to vote with respect
to the subject matter thereof.
ARTICLE III. BOARD OF DIRECTORS
3.01. General Powers and Number. The business and affairs of
the corporation shall be managed by its Board of Directors. The number of
directors of the corporation shall be as provided in Section 0.03.
3.02. Tenure and Qualifications. Each director shall hold
office until the next annual meeting of shareholders and until his
successor shall have been elected, or until his prior death, resignation
or removal. A director may be removed from office by affirmative vote of
a majority of the outstanding shares entitled to vote for the election of
such director, taken at a meeting of shareholders called for that purpose.
A director may resign at any time by filing his written resignation with
the Secretary of the corporation. Directors need not be residents of the
State of Wisconsin or shareholders of the corporation.
3.03. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this by-law immediately
after the annual meeting of shareholders, and each adjourned session
thereof. The place of such regular meeting shall be the same as the place
of the meeting of shareholders which precedes it, or such other suitable
place as may be announced at such meeting of shareholders. The Board of
Directors may provide, by resolution, the time and place, either within or
without the State of Wisconsin, for the holding of additional regular
meetings without other notice than such resolution.
3.04. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the President, Secretary
or any two directors. The President or Secretary calling any special
meeting of the Board of Directors may fix any place, either within or
without the State of Wisconsin, as the place for holding any special
meeting of the Board of Directors called by them, and if no other place is
fixed the place of meeting shall be the principal business office of the
corporation in the State of Wisconsin.
3.045. Meetings by Electronic Means of Communication. To the
extent provided in these by-laws, the board of directors, or any committee
of the board, may, in addition to conducting meetings in which each
director participates in person, and notwithstanding any place set forth
in the notice of the meeting or these by-laws, conduct any regular or
special meeting by the use of any electronic means of communication;
provided (1) all participating directors may simultaneously hear each
other during the meeting, or (2) all communication during the meeting is
immediately transmitted to each participating director, and each
participating director is able to immediately send messages to all other
participating directors. Before the commencement of any business at a
meeting at which any directors do not participate in person, all
participating directors shall be informed that a meeting is taking place
at which official business may be transacted.
3.05. Notice; Waiver. Notice of each meeting of the Board
of Directors (unless otherwise provided in or pursuant to Section 3.03)
shall be given by written notice delivered personally or mailed or given
by telegram to each director at his business address or at such other
address as such director shall have designated in writing filed with the
Secretary, in each case not less than that number of hours prior thereto
as set forth in Section 0.04. If mailed, such notice shall be deemed to
be delivered when deposited in the United States mail so addressed, with
postage thereon prepaid. If notice be given by telegram, such notice
shall be deemed to be delivered when the telegram is delivered to the
telegraph company. Whenever any notice whatever is required to be given
to any director of the corporation under the articles of incorporation or
by-laws or any provision of law, a waiver thereof in writing, signed at
any time, whether before or after the time of meeting, by the director
entitled to such notice, shall be deemed equivalent to the giving of such
notice. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a
meeting and objects thereat to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
Board of Directors need be specified in the notice or waiver of notice of
such meeting.
3.06. Quorum. Except as otherwise provided by law or by the
articles of incorporation or these by-laws, a majority of the number of
directors as provided in Section 0.03 shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors, but a
majority of the directors present (though less than such quorum) may
adjourn the meeting from time to time without further notice.
3.07. Manner of Acting. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors, unless the act of a greater number is
required by law or by the articles of incorporation or these by-laws.
3.08. Conduct of Meetings. The President, and in his absence,
a Vice-President in the order provided under Section 4.06, and in their
absence, any director chosen by the directors present, shall call meetings
of the Board of Directors to order and shall act as chairman of the
meeting. The Secretary of the corporation shall act as secretary of all
meetings of the Board of Directors, but in the absence of the Secretary,
the presiding officer may appoint any Assistant Secretary or any director
or other person present to act as secretary of the meeting.
3.09. Vacancies. Any vacancy occurring in the Board of
Directors, including a vacancy created by an increase in the number of
directors, may be filled until the next succeeding annual election by the
affirmative vote of a majority of the directors then in office, though
less than a quorum of the Board of Directors; provided, that in case of a
vacancy created by the removal of a director by vote of the shareholders,
the shareholders shall have the right to fill such vacancy at the same
meeting or any adjournment thereof.
3.10. Compensation. The Board of Directors, by affirmative
vote of a majority of the directors then in office, and irrespective of
any personal interest of any of its members, may establish reasonable
compensation of all directors for services to the corporation as
directors, officers or otherwise, or may delegate such authority to an
appropriate committee. The Board of Directors also shall have authority
to provide for or to delegate authority to an appropriate committee to
provide for reasonable pensions, disability or death benefits, and other
benefits or payments, to directors, officers and employees and to their
estates, families, dependents or beneficiaries on account of prior
services rendered by such directors, officers and employees to the
corporation.
3.11. Presumption of Assent. A director of the corporation who
is present at a meeting of the Board of Directors or a committee thereof
of which he is a member at which action on any corporate matter is taken
shall be presumed to have assented to the action taken unless his dissent
shall be entered in the minutes of the meeting or unless he shall file his
written dissent to such action with the person acting as the secretary of
the meeting before the adjournment thereof or shall forward such dissent
by registered mail to the Secretary of the corporation immediately after
the adjournment of the meeting. Such right to dissent shall not apply to
a director who voted in favor of such action.
3.12. Committees. The Board of Directors by resolution adopted
by the affirmative vote of a majority of the number of directors as
provided in Section 0.03 may designate one or more committees, each
committee to consist of three or more directors elected by the Board of
Directors, which to the extent provided in said resolution as initially
adopted, and as thereafter supplemented or amended by further resolution
adopted by a like vote, shall have and may exercise, when the Board of
Directors is not in session, the powers of the Board of Directors in the
management of the business and affairs of the corporation, except action
in respect to dividends to shareholders, election of the principal
officers or the filling of vacancies in the Board of Directors or
committees created pursuant to this section. The Board of Directors may
elect one or more of its members as alternate members of any such
committee who may take the place of any absent member or members at any
meeting of such committee, upon request by the President or upon request
by the chairman of such meeting. Each such committee shall fix its own
rules governing the conduct of its activities and shall make such reports
to the Board of Directors of its activities as the Board of Directors may
request.
3.13. Unanimous Consent without Meeting. Any action required
or permitted by the articles of incorporation or by-laws or any provision
of law to be taken by the Board of Directors at a meeting or by resolution
may be taken without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all of the directors then in office.
ARTICLE IV. OFFICERS
4.01. Number. The principal officers of the corporation shall
be a Chairman of the Board, a President, the number of Vice Presidents as
provided in Section 0.05, a Secretary, and a Treasurer, each of whom shall
be elected by the Board of Directors. Such other officers and assistant
officers as may be deemed necessary may be elected or appointed by the
Board of Directors. Any two or more offices may be held by the same
person, except the offices of Chairman of the Board and President, the
offices of Chairman of the Board and Vice President, the offices of
Chairman of the Board and Secretary, the offices of President and
Secretary, and the offices of President and Vice President.
4.02. Election and Term of Office. The officers of the
corporation to be elected by the Board of Directors shall be elected
annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the shareholders. If the
election of officers shall not be held at such meeting, such election
shall be held as soon thereafter as conveniently may be. Each officer
shall hold office until his successor shall have been duly elected or
until his prior death, resignation or removal.
4.03. Removal. Any officer or agent may be removed by the
Board of Directors whenever in its judgment the best interests of the
corporation will be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
Election or appointment shall not of itself create contract rights.
4.04. Vacancies. A vacancy in any principal office because of
death, resignation, removal, disqualification or otherwise, shall be
filled by the Board of Directors for the unexpired portion of the term.
4.05. Chairman of the Board and Chief Executive Officer. The
Chairman of the Board shall be the chief executive officer of the
corporation and, subject to the control of the Board of Directors, shall
in general supervise and control all of the business and affairs of the
corporation. He shall, when present, preside at all meetings of the
shareholders and of the Board of Directors. He shall have authority,
subject to such rules as may be prescribed by the Board of Directors, to
appoint such agents and employees of the corporation as he shall deem
necessary, to prescribe their powers, duties and compensation, and to
delegate authority to them. Such agents and employees shall hold office
at the discretion of the Chairman of the Board. He shall have authority
to sign, execute and acknowledge, on behalf of the corporation, all deeds,
mortgages, bonds, stock certificates, contracts, leases, reports and all
other documents or instruments necessary or proper to be executed in the
course of the corporation's regular business, or which shall be authorized
by resolution of the Board of Directors; and, except as otherwise provided
by law or the Board of Directors, he may authorize the President, any Vice
President or other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his place and stead. He
shall perform all other duties as may be prescribed by the Board of
Directors from time to time.
4.051. President and Chief Financial Officer. The President
shall be the Chief Financial Officer of the corporation, and in the
absence of the Chairman of the Board and Chief Executive Officer or in the
event of his death, inability or refusal to act, or in the event for any
reason it shall be impracticable for the Chairman of the Board to act
personally, the President shall perform the duties of the Chairman of the
Board and when so acting shall have all the powers of the Chairman of the
Board and Chief Executive Officer. He shall perform all other duties as
may be prescribed by the Board of Directors from time to time. The
execution of any instrument of the corporation by the President shall be
conclusive evidence, as to third parties; of his authority to act in the
place of the Chairman of the Board and Chief Executive Officer.
4.07. The Secretary. The Secretary shall: (a) keep the
minutes of the meetings of the shareholders and of the Board of Directors
in one or more books provided for that purpose; (b) see that all notices
are duly given in accordance with the provisions of these by-laws or as
required by law; (c) be custodian of the corporate records and of the seal
of the corporation and see that the seal of the corporation is affixed to
all documents the execution of which on behalf of the corporation under
its seal is duly authorized; (d) keep or arrange for the keeping of a
register of the post office address of each shareholder which shall be
furnished to the Secretary by such shareholder; (e) sign with the
President, or a Vice-President, certificates for shares of the
corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of the stock
transfer books of the corporation; and (g) in general perform all duties
incident to the office of Secretary and have such other duties and
exercise such authority as from time to time may be delegated or assigned
to him by the President or by the Board of Directors.
4.08. The Treasurer. The Treasury shall: (a) have charge and
custody of and be responsible for all funds and securities of the
corporation; (b) receive and give receipts for moneys due and payable to
the corporation from any source whatsoever, and deposit all such moneys in
the name of the corporation in such banks, trust companies or other
depositaries as shall be selected in accordance with the provisions of
Section 5.04; and (c) in general perform all of the duties incident to the
office of Treasurer and have such other duties and exercise such other
authority as from time to time may be delegated or assigned to him by the
President or by the Board of Directors. If required by the Board of
Directors, the Treasurer shall give a bond for the faithful discharge of
his duties in such sum and with such surety or sure ties as the Board of
Directors shall determine.
4.09. Assistant Secretaries and Assistant Treasurers. There
shall be such number of Assistant Secretaries and Assistant Treasurers as
the Board of Directors may from time to time authorize. The Assistant
Secretaries may sign with the President or a Vice-President certificates
for shares of the corporation the issuance of which shall have been
authorized by a resolution of the Board of Directors. The Assistant
Treasurers shall respectively, if required by the Board of Directors, give
bonds for the faithful discharge of their duties in such sums and with
such sureties as the Board of Directors shall determine. The Assistant
Secretaries and Assistant Treasurers, in general, shall perform such
duties and have such authority as shall from time to time be delegated or
assigned to them by the Secretary or the Treasurer, respectively, or by
the President or the Board of Directors.
4.10. Other Assistants and Acting Officers. The Board of
Directors shall have the power to appoint any person to act as assistant
to any officer, or as agent for the corporation in his stead, or to
perform the duties of such officer whenever for any reason it is
impracticable for such officer to act personally, and such assistant or
acting officer or other agent so appointed by the Board of Directors shall
have the power to perform all the duties of the office to which he is so
appointed to be assistant, or as to which he is so appointed to act,
except as such power may be otherwise defined or restricted by the Board
of Directors.
4.11. Salaries. The salaries of the principal officers shall
be fixed from time to time by the Board of Directors or by a duly
authorized committee thereof, and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of
the corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS
AND DEPOSITS; SPECIAL CORPORATE ACTS
5.01. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or
execute or deliver any instrument in the name of and on behalf of the
corporation, and such authorization may be general or confined to specific
instances. In the absence of other designation, all deeds, mortgages and
instruments of assignment or pledge made by the corporation shall be
executed in the name of the corporation by the President or one of the
Vice-Presidents and by the Secretary, an Assistant Secretary, the
Treasurer or an Assistant Treasurer; the Secretary or an Assistant
Secretary, when necessary or required, shall affix the corporate seal
thereto; and when so executed no other party to such instrument or any
third party shall be required to make any inquiry into the authority of
the signing officer or officers.
5.02. Loans. No indebtedness for borrowed money shall be
contracted on behalf of the corporation and no evidences of such
indebtedness shall be issued in its name unless authorized by or under the
authority of a resolution of the Board of Directors. Such authorization
may be general or confined to specific instances.
5.03. Checks, Drafts, etc. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued
in the name of the corporation, shall be signed-by such officer or
officers, agent or agents of the corporation and in such manner as shall
from time to time be determined by or under the authority of a resolution
of the Board of Directors.
5.04. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the
corporation in such banks, trust companies or other depositaries as may be
selected by or under the authority of a resolution of the Board of
Directors.
5.05. Voting of Securities Owned by this Corporation. Subject
always to the specific directions of the Board of Directors, (a) any
shares or other securities issued by any other corporation and owned or
controlled by this corporation may be voted at any meeting of security
holders of such other corporation by the President of this corporation if
he be present, or in his absence by any Vice-President of this corporation
who may be present, and (b) whenever, in the judgment of the President, or
in his absence, of any Vice-President, it is desirable for this
corporation to execute a proxy or written consent in respect to any shares
or other securities issued by any other corporation and owned by this
corporation, such proxy or consent shall be executed in the name of this
corporation by the President or one of the Vice-Presidents of this
corporation, without necessity of any authorization by the Board of
Directors, affixation of corporate seal or countersignature or attestation
by another officer. Any person or persons designated in the manner above
stated as the proxy or proxies of this corporation shall have full right,
power and authority to vote the shares or other securities issued by such
other corporation and owned by this corporation the same as such shares or
other securities might be voted by this corporation.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01. Certificates for Shares. Certificates representing
shares of the corporation shall be in such form, consistent with law, as
shall be determined by the Board of Directors. Such certificates shall be
signed by the President or a Vice-President and by the Secretary or an
Assistant Secretary. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the person to
whom the shares represented thereby are issued, with the number of shares
and date of issue, shall be entered on the stock transfer books of the
corporation. All certificates surrendered to the corporation for transfer
shall be cancelled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
cancelled, except as provided in Section 6.06.
6.02. Facsimile Signatures and Seal. The seal of the
corporation on any certificates for shares may be a facsimile. The
signatures of the President or Vice President and the Secretary or
Assistant Secretary upon a certificate may be facsimiles if the
certificate is manually signed on behalf of a transfer agent, or a
registrar, other than the corporation itself or an employee of the
corporation.
6.03. Signature by Former Officers. In case any officer, who
has signed or whose facsimile signature has been placed upon any
certificate for shares, shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same
effect as if he were such officer at the date of its issue.
6.04. Transfer of Shares. Prior to due presentment of a
certificate for shares for registration of transfer the corporation may
treat the registered owner of such shares as the person exclusively
entitled to vote, to receive notifications and otherwise to have and
exercise all the rights and power of an owner. Where a certificate for
shares is presented to the corporation with a request to register for
transfer, the corporation shall not be liable to the owner or any other
person suffering loss as a result of such registration of transfer if (a)
there were on or with the certificate the necessary endorsements, and (b)
the corporation had no duty to inquire into adverse claims or has
discharged any such duty. The corporation may require reasonable
assurance that said endorsements are genuine and effective and compliance
with such other regulations as may be prescribed by or under the authority
of the Board of Directors.
6.05. Restrictions on Transfer. The face or reverse side of
each certificate representing shares shall bear a conspicuous notation of
any restriction imposed by the corporation upon the transfer of such
shares.
6.06. Lost, Destroyed or Stolen Certificates. Where the owner
claims that his certificate for shares has been lost, destroyed or
wrongfully taken, a new certificate shall be issued in place thereof if
the owner (a) so requests before the corporation has notice that such
shares have been acquired by a bona fide purchaser, and (b) files with the
corporation a sufficient indemnity bond, and (c) satisfies such other
reasonable requirements as may be prescribed by or under the authority of
the Board of Directors.
6.07. Consideration for Shares. The shares of the corporation
may be issued for such consideration as shall be fixed from time to time
by the Board of Directors, provided that any shares having a par value
shall not be issued for a consideration less than the par value thereof.
The consideration to be paid for shares may be paid in whole or in part,
in money, in other property, tangible or intangible, or in labor or
services actually performed for the corporation. When payment of the
consideration for which shares are to be issued shall have been received
by the corporation, such shares shall be deemed to be fully paid and
nonassessable by the corporation. No certificate shall be issued for any
share until such share is fully paid.
6.08. Stock Regulations. The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with the statutes of the State of Wisconsin as it may deem
expedient concerning the issue, transfer and registration of certificates
representing shares of the corporation.
ARTICLE VII. SEAL
7.01. The Board of Directors shall provide a corporate seal
which shall be circular in form and shall have inscribed thereon the name
of the corporation and the state of incorporation and the words,
"Corporate Seal."
ARTICLE VIII. AMENDMENTS
8.01. By Shareholders. These by-laws may be altered, amended
or repealed and new by-laws may be adopted by the shareholders by
affirmative vote of not less than a majority of the shares present or
represented at any annual or special meeting of the shareholders at which
a quorum is in attendance.
8.02. By Directors. These by-laws may also be altered, amended
or repealed and new by-laws may be adopted by the Board of Directors by
affirmative vote of a majority of the number of directors present at any
meeting at which a quorum is in attendance; but no by-law adopted by the
shareholders shall be amended or repealed by the Board of Directors if the
by-law so adopted so provides.
8.03. Implied Amendments. Any action taken or authorized by
the shareholders or by the Board of Directors, which would be inconsistent
with the by-laws then in effect but is taken or authorized by affirmative
vote of not less than the number of shares or the number of directors
required to amend the by-laws so that the by-laws would be consistent with
such action, shall be given the same effect as though the by-laws had been
temporarily amended or suspended so far, but only so far, as is necessary
to permit the specific action so taken or authorized.
ARTICLE IX
INDEMNIFICATION OF DIRECTORS AND OFFICERS
9.01. Indemnification of officers and directors.
(a) The corporation shall, in accordance with the provisions of
Section 180.044 of the Wisconsin Statutes, indemnify a director or
officer of the corporation, to the extent that he or she has been
successful on the merits or otherwise in the defense of a proceeding,
for all reasonable expenses incurred in the proceeding if he or she
was a party because he or she is a director or officer of the
corporation.
(b) In cases not included under Section 9.01(a), the
corporation shall, in accordance with Section 180.044 of the
Wisconsin Statutes, indemnify a director or officer of the
corporation against liability incurred by such director or officer in
a proceeding to which such director or officer was a party because he
or she is a director or officer of the corporation, unless liability
was incurred because the director or officer breached or failed to
perform a duty he or she owes to the corporation and the breach or
failure to perform constitutes any of the following:
(1) A willful failure to deal fairly with the corporation
or its shareholders in connection with a matter in which the director
or officer has a material conflict of interest.
(2) A violation of criminal law, unless the director or
officer had reasonable cause to believe that his or her conduct was
lawful or no reasonable cause to believe that his or her conduct was
unlawful.
(3) A transaction from which the director or officer
derived improper personal profit.
(4) Willful misconduct.
(c) Pursuant to Section 180.044 of the Wisconsin Statutes, the
determination of whether indemnification is required under this
Article IX shall be made under Section 180.046 of the Wisconsin
Statutes.
9.02. Allowance of expenses as incurred. The corporation may,
in accordance with Section 180.047 of the Wisconsin Statutes, make
allowance for reasonable expenses of a director or officer of the
corporation as such expenses are incurred.
9.03. Additional rights to indemnification and allowance
expenses. The corporation may, in accordance with Section 180.049 of the
Wisconsin Statutes, grant additional rights to indemnification and
allowance of expenses.
9.04. Indemnification and allowance of expenses of employees
and agents. The corporation may, in accordance with Section 180.056 of
the Wisconsin Statutes, indemnify and allow reasonable expenses of an
employee or agent of the corporation who is not a director or officer of
the corporation to the extent provided by the articles of incorporation or
by-laws, by general or specific action of the board of directors or by
contract.
9.05. Insurance. As provided in Section 180.058 of the
Wisconsin Statutes, the corporation may purchase and maintain insurance on
behalf of an individual who is an employee, agent, director or officer of
the corporation against liability asserted against or incurred by the
individual in his or her capacity as an employee, agent, director or
officer of the corporation or arising from his or her status as an
employee, agent, director or officer of the corporation, regardless of
whether the corporation is required or authorized to indemnify or allow
expenses to the individual against the same liability under this Article
IX.
9.06. Definitions. Terms used in this Article IX and which are
specifically defined in the Wisconsin Business Corporation Law as amended
(including, without limitation, the terms defined under Section 180.042 of
the Wisconsin Statutes) shall have, for purposes of this Article IX, the
meanings assigned to them under the Wisconsin Business Corporation Law as
amended.
9.07. Intent. This Article IX is intended to authorize
indemnification in accordance with the Wisconsin Business Corporation Law
as amended and shall be construed and applied to carry out such intent.
EXHIBIT 3.5
ARTICLES OF INCORPORATION
The undersigned incorporator hereby adopts the following
articles of incorporation for the purpose of forming a corporation (the
"corporation" under the "Wisconsin Business Corporation Law", Chapter 180
of the Wisconsin Statutes:
Article 1. Name: The name of the Corporation is Summit
Performance Systems, Inc.
Article 2. Authorized Shares: The aggregate number of shares
that the corporation shall have authority to issue is 9000 shares. The
corporation's authorized shares shall consist of one class only and shall
be designated as common stock ("common stock"). Each share of common
stock shall have no par value.
Article 3. Registered Office and Registered Agent: The
registered agent is Timothy M. Dempsey. The street address of the
corporation's initial registered office is 2307 Oregon St., Oshkosh, WI
54903.
Article 4. Incorporator: The name and address of the
incorporator of the corporation is Timothy M. Dempsey, 1 Pearl Ave.,
Oshkosh, WI 54902.
EXHIBIT 3.6
BY-LAWS
OF
SUMMIT PERFORMANCE SYSTEMS, INC.
Article I. Shareholders
Section 1. Meetings of shareholders shall be held at the registered
office of the corporation unless another place shall have been determined
by the directors and stated in the notice of meeting. Annual meetings
shall be held on the fourth Monday of January, at 3:00 p.m., unless a
holiday, and then on the next business day.
Article II. Directors
Section 1. The number of directors shall be not less than one (1)
nor more than five (5).
Section 2. A regular meeting of the Board of Directors shall be held
without notice immediately following the annual meeting of shareholders
and at the same place. The Board of Directors may provide for the holding
without notice of additional regular meetings.
Section 3. Special meetings of the Board of Directors may be called
by the President or any director on 24 hour notice given personally or by
telephone or telegraph or on four days' notice by mail. Special meetings
shall be held at the place fixed by the Board of Directors for the holding
of meetings, or if no such place has been fixed, at the principal business
office of the corporation.
Section 4. At any meetings of the Board of Directors, regular or
special, one-half of the entire Board shall constitute a quorum. Any one
or more members of the Board of Directors may participate in a meeting of
the Board of Directors by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting
to hear each other at the same time. Participation by such means shall
constitute presence in person at a meeting of the Board of Directors.
Article III. Officers
Section 1. The officers of the corporation shall be a President, a
Vice President, a Secretary and a Treasurer, who shall be elected annually
at the regular meeting of the Board of Directors held after the annual
meeting of shareholders and shall hold office only so long as they are
satisfactory to the Board of Directors.
Section 2. The President shall be the principal executive officer of
the corporation to put into effect the decisions of the Board of
Directors. Subject to such decisions, he shall supervise and control the
business and affairs of the corporation. He shall preside at meetings of
the shareholders and directors.
Section 3. Subject to any specific assignments of duties made by the
Board of Directors, the Vice President, Secretary and Treasurer shall act
under the direction of the President. The Vice President shall perform
the duties of the President when the President is absent or unable to act.
The Secretary shall prepare and keep minutes of the meetings of the
shareholders and the directors and shall have general charge of the stock
records of the corporation. The Treasurer shall have custody of the funds
of the corporation and keep its financial records.
Article IV. Miscellaneous
Section 1. The Board of Directors may authorize any officer or agent
to enter into any contract or to execute any instrument for the
corporation. Such authority may be general or be confined to specific
instances.
Section 2. No officer may borrow money from the corporation from any
source other than Oshkosh Truck Corporation, a Wisconsin corporation,
unless authorized by the Board of Directors.
Section 3. Certificates representing shares of the corporation shall
be in such form as the Board of Directors shall determine. Transfers of
shares shall be made only on the stock transfer books of the corporation.
Article V. Action Without Meeting
Section 1. Any action required or permitted to be taken by the Board
of Directors or the shareholders at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall
be signed by all directors or shareholders, as the case may be.
Article VI. Stock Transfer Restriction
Section 1. In the event the corporation makes a valid election
pursuant to Sec. 1362 of the Internal Revenue Code of 1986, or any
successor provision thereto, to be treated as an S Corporation, no
shareholder of the corporation shall, without the proper written consent
of shareholders holding more than fifty percent (50%) of the outstanding
stock of the corporation, transfer any shares of the corporation's stock
to any person who, by reason of being a shareholder of the corporation,
will (or may by reason of failure to execute required elections or
consents) cause a termination of the corporation's election to be treated
as an S Corporation.
Article VII. Checks, Notes and Drafts
Unless the Board of Directors otherwise provides checks, notes,
drafts and other orders for payment of money may be signed by any one
officer of less than $5,000 in amount, and otherwise the signature of such
officer shall be countersigned by another officer.
Article VIII. Amendments
Section 1. These By-Laws may be altered, amended or repealed and new
by-laws may be adopted by the Board of Directors or by the shareholders.
EXHIBIT 3.7
ARTICLES OF INCORPORATION
OF
McNEILUS COMPANIES, INC,
ARTICLE I
The name of this corporation shall be McNeilus Companies, Inc.
ARTICLE II
The nature of the business or objects or purpose to be transacted,
promoted or carried on are to do any or all of the things herein mentioned
as fully and to the same extent as natural persons might do, and in any
part of the world, viz:
(A) This corporation is formed for and shall have general business
purposes.
(B) In addition, but not in limitation of the above general business
purposes, this corporation shall have the authority:
(1) To let, hold, acquire, mortgage, sell and convey real
estate and personal property necessary or convenient
to the foregoing business, including the right to
hold, acquire, mortgage, pledge or dispose of shares,
bonds, securities and other evidences of indebtedness
of any foreign or domestic corporation including its
own, or of individuals; and including the right and
authority to let, hold, acquire, mortgage, sell,
convey and lease to others, real estate and personal
property for any purpose whatsoever.
(2) To apply for, obtain, register, lease, purchase or
otherwise to acquire, and to hold, use, own, operate
and introduce and to sell, assign or otherwise dispose
of any trademarks, trade names, patents, inventions,
improvements and processes used in connection with or
secured under the Letters of Patent of the United
States, or elsewhere or otherwise; and to use,
exercise, develop, grant, license in respect of, or
otherwise turn to account any such trademarks,
patents, licenses or the like of any such property or
rights.
(3) To hold, purchase or otherwise acquire, to sell,
assign, transfer, mortgage, pledge or otherwise
dispose of shares of capital and bonds, debentures or
evidences of indebtedness created by other
corporations, including its own, and while the holder
thereof to exercise all rights and privileges of
ownership including the right to vote thereon.
(4) To do and perform all of those things which are
incidental to the foregoing business.
(5) To do any and all things set forth in this Certificate
of Incorporation and to do all of the things a
corporation organized under the laws of the State of
Minnesota to the extent and as fully as natural
persons might do so far as may be permitted by law.
Provided, however, nothing herein contained shall be
deemed to authorize this corporation to carry on
banking business.
ARTICLE III
This corporation shall have perpetual existence.
ARTICLE IV
The location and post office address of its registered office in this
state shall be 524 Highway Street SE, Dodge Center, Minnesota 55927, and
at such other places as may be determined from time to time by the Board
of Directors.
ARTICLE V
The aggregate number of shares which this corporation shall have the
authority to issue is Ten Million (10,000,000). All shares of this
corporation shall be common shares entitled to vote and shall be of one
class and one series having equal rights and preferences in all matters.
All shares of this corporation shall be without par value, except such
shares shall be deemed to have a par value of one cent ($.01) per share
solely for the purpose of a statute or regulation imposing a tax or fee
based upon the capitalization of a corporation and a par value fixed by
the Board of Directors for the purpose of a statute or regulation
requiring the shares of a corporation to have a par value.
ARTICLE VI
(A) The management of this corporation shall be vested in a Board of
Directors composed of not less than one nor more than nine members.
(B) The directors and officers of the corporation shall hold their
offices until their successors are elected and qualified.
ARTICLE VII
(A) The Board of Directors is expressly authorized to make, alter,
amend and rescind the By-Laws of the corporation, to designate one or more
committees, each committee to consist of one or more of the Directors of
the corporation, which to the extent provided in the resolution, or in the
By-Laws, shall have and may exercise powers of the Board of Directors in
the management of the business and affairs of the corporation. Such
committee or committees shall have such name or names as may be stated in
the By-Laws of the corporation or as may be determined from time to time
by resolutions adopted by the Board of Directors. The Board of Directors
shall further have the power to fill any vacancy in any executive office
or Board of Directors, until the next annual meeting.
(B) Any action required or permitted to be taken at a meeting of the
Board of Directors may be taken by written action signed by the number of
Directors required to take the same action at a meeting of the Board of
Directors at which all Directors were present.
ARTICLE VIII
(A) No Director of the Corporation shall be personally liable to the
corporation or its shareholders for monetary damages or breach of
fiduciary duty as a Director notwithstanding any provision of law imposing
such liability; provided, however, that, to the extent provided by
applicable law, this paragraph shall not eliminate or limit the liability
of a Director,
(1) for any breach of the Director's duty of loyalty to
the corporation or its shareholders,
(2) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation
of law,
(3) under Section 302A.559 or 80A.23, or
(4) for any transactions from which the Director derived
an improper personal benefit.
No amendment or repeal of this paragraph shall apply to or have any
effect on the liability or alleged liability of any Director of the
Corporation for or with respect to any such acts or omissions of such
Director occurring prior to such amendment or repeal.
ARTICLE IX
The name and post office address of the incorporator is: Thomas A.
Winkels, 504 Meadowlark Lane, Dodge Center, Minnesota 55927.
EXHIBIT 3.8
BY-LAWS
OF
MCNEILUS COMPANIES, INC.
Name
(1) The name of this corporation is McNeilus Companies, Inc.
Office
(2) The principal office of the corporation shall be at Dodge
Center, Minnesota. The corporation may establish and maintain any office
or offices at such other places as the Board of Directors may from time to
time appoint, or as the business of the corporation may acquire.
Corporate Seal
(3) The corporate seal of the corporation shall be circular in form
and shall have subscribed thereon the name of the corporation and the
words "Seal", "Corporate", and "Minnesota".
Waiver of Notice
(4) Any shareholder, Director, or officer may waive any notice
required to be given under these By-Laws.
Shareholders' Meetings
(5)(A) All meetings of the shareholders shall be held at the office
of the corporation in Dodge Center, Minnesota, or at such other place as
the Board of Directors may previously determine.
(5)(B) The annual meeting of the shareholders shall be held on the
second Thursday in June of each year, the first annual meeting to be held
on the 14th of June, 1990, if not a legal holiday, and if a legal holiday
then on the next secular day following at 2:00 o'clock p.m. when the
shareholders shall elect a Board of Directors by plurality vote by ballot
and transact such other business as may be brought before the meeting.
(5)(C) The holders of the majority of the shares issued and
outstanding present in person or represented by proxy shall be requisite
and shall constitute a quorum at all meetings of the shareholders for the
transaction of business. If, however, such majority shall not be present
at any meeting of the shareholders, the shareholders present in person or
by proxy shall have power to adjourn the meeting from time to time without
notice other than announcement at the meeting until the requisite amount
of shares shall be present. At such adjourned meeting at which the
requisite amount of shares shall be represented, any business may be
transacted which might have been transacted at the meeting as originally
notified. If such a majority is present when a duly called or held
meeting is convened, the shareholders who are in attendance at such
meeting may continue to transact business until adjournment even though
the withdrawal of a number of shareholders originally present leaves less
than the proportion or the number otherwise required for a quorum.
(5)(D) At each meeting of the shareholders each shareholder shall be
entitled to vote in person or by proxy, appointed by an instrument in
writing subscribed by such shareholder, and shall have one vote for each
share registered in his name.
(5)(E) Written notice of the annual or a special meeting shall be
mailed to each shareholder at such address as appears on the share book of
the corporation at least seven days prior to the meeting. Such notice,
containing the date, time and place of such meeting shall be given at
least seven (7) and not more than sixty (60) days before the date of the
meeting.
(5)(F) Special meetings of the shareholders may be called for any
purpose at any time by the Chairman, President, Treasurer, or by two or
more Directors. Special meetings of the shareholders may also be called
by a shareholder or shareholders holding ten percent (10%) or more of the
voting power of all shares of this corporation entitled to vote to the
extent provided by law. Special meetings shall be held on a date and at
the time and place fixed by the Chairman, President, Treasurer, or by the
Board of Directors, except that if a special meeting of the shareholders
is properly demanded by a shareholder or shareholders, the Chairman,
President, Treasurer, or the Board of Directors shall within thirty (30)
days after receipt of such demand fix the time and place for such special
meeting which shall be held within ninety days after receipt of such
demand. Notice setting forth the date, time, and place of such meeting
and a statement of the purposes of the meeting shall be given to all
shareholders entitled to such notice under paragraph (5)(E) immediately
above at least seven (7) days and not more than sixty (60) days before the
date of the meeting. The business transacted at a special meeting is
limited to the purposes stated in the notice of the meeting. Any business
transacted at a special meeting that is not included in those stated
purposes is voidable by or on behalf of the corporation, unless all the
shareholders have waived notice of the meeting to the extent permitted by
law.
(5)(G) Except where a larger proportion or number is required by
law, the shareholders may take action by the affirmative vote of a
majority of the voting power of the shares present and entitled to vote at
a duly held meeting.
(5)(H) Any action required or permitted to be taken at a meeting of
the shareholders may be taken without a meeting by written action signed
by all the shareholders entitled to vote on that action. The written
action is effective when it has been signed by all the shareholders,
unless a different effective time is provided in the written action.
Directors
(6) The property and business of the corporation shall be managed by
its Board of Directors, not less than one nor more than nine in number,
who shall be elected annually at the annual meeting and who shall serve
until his successor shall be elected and shall qualify. Said Board of
Directors may exercise all powers of the corporation and do all such
lawful acts and things as are not by statute or by Certificate of
Incorporation or by these By-Laws directed or required to be exercised and
done by the shareholders.
Directors' Meetings
(7)(A) The Board of Directors shall meet at the office of the
corporation immediately following the annual meeting of the shareholders
or otherwise and no notice of such meeting shall be necessary. Special
meetings of the Board may be called by the Chairman, President or
Treasurer, on one day's notice to each Director, either personally or by
mail, telegram or telephone. Special meetings shall be called by the
Chairman, President, Treasurer, or the Secretary, on like notice, upon
request of two Directors.
(7)(B) At all meetings of the Board a majority of the Board of
Directors shall be necessary and sufficient to constitute a quorum. If a
quorum is present when a duly called or held meeting is convened, the
directors who are in attendance at such meeting may continue to transact
business until adjournment, even though the withdrawal of a number of
Directors originally present leaves less than the proportion or number
otherwise required for a quorum.
(7)(C) Except where a larger proportion or number is required by
law, the Board of Directors may take action by the affirmative vote of the
majority of the Directors present at a duly held meeting.
(7)(D) Any action required or permitted to be taken at a meeting of
the Board of Directors may be taken by written action signed by the number
of Directors required to take the same action at a meeting of the Board of
Directors at which all Directors were present. The written action is
effective when signed by the required number of Directors, unless a
different effective date is provided in the written action. When written
action is taken by less than all of the Directors, all Directors shall be
notified immediately of its text and effective date, except that failure
to provide such notice does not invalidate the written action.
(7)(E) A Director may give advance written consent or opposition to
a proposal to be acted on at a Board meeting. If the Director is not
present at the meeting, consent or opposition to a proposal does not
constitute presence for purposes of determining the existence of a quorum,
but consent or opposition shall be counted as a vote in favor or against
the proposal and shall be entered in the minutes or other record of action
at the meeting, if the proposal acted on at the meeting is substantially
the same or has substantially the same effect as the proposal to which the
Director has consented or objected.
(7)(F)(1) A conference among Directors by any means of communication
through which the Directors may simultaneously hear each
other during the conference constitutes a Board meeting, if
the same notice is given of the conference as would be
required by paragraph (7) (A) for a meeting, and if the
number of Directors participating in the conference would
be sufficient to constitute a quorum at a meeting.
Participation in a meeting by that means constitutes
presence in person at the meeting.
(7)(F)(2) A director may participate in a Board meeting not described
in the preceding paragraph by any means of communication
through which the Director, other Directors so
participating, and all Directors physically present at the
meeting may simultaneously hear each other during the
meeting. Participation in a meeting by that means
constitutes presence in person at the meeting.
Committees
(8) The Board of Directors may, by resolution or resolutions passed
by the Board, designate one or more committees, each committee to consist
of one or more Directors of the corporation, which, to the extent provided
in said resolution or resolutions or by these By-Laws, shall have and may
exercise the powers of the Board of Directors in the management of the
business and affairs of the corporation and may have power to authorize
the seal of the corporation to be affixed to all papers which may require
it. Such committee or committees shall have such name or names as may be
stated in these By-Laws or as may be determined from time to time by a
resolution adopted by the Board of Directors. They shall keep regular
minutes of their meetings and report the same to the Board at each regular
meeting.
Officers
(9)(A) The Board of Directors shall elect from its number a Chairman
and President. It likewise may elect one or more Vice Presidents, a
Secretary and a Treasurer, who need not be Directors and may appoint
assistant Secretaries and assistant Treasurers. The Board of Directors
may create such other offices as it determines and appoint persons to fill
such offices and fill vacancies in any office. In the absence of any
officer of the corporation, or with or without cause, a majority of the
Board may delegate the powers or duties of such officer to any other
officer, or to any Director.
(9)(B) The officers of the corporation shall hold office until their
successors are chosen and qualify in their stead. Any officer elected or
appointed by the Board of Directors may be removed at any time by an
affirmative vote of the majority of the Board of Directors.
(9)(C) The Chairman of the Board shall be the Chief Executive
Officer of the corporation. Subject to the control of the Board of
Directors, he shall supervise the President and be responsible, through
the President, for the control of all of the business and affairs of the
corporation. In the absence of the President or otherwise, he shall have
continuing general powers of supervision and management of the
corporation. When present, he shall preside at all meetings of the
shareholders and of the Board of Directors. He shall see that all
resolutions and orders of the Board of Directors and its committees are
carried into effect. He shall have authority to sign, execute and
acknowledge, on behalf of the corporation, all deeds, mortgages, bonds,
stock certificates, contracts, leases, reports and all other documents or
instruments necessary or proper to be executed in the course of the
ordinary business of the corporation, or which shall be authorized by
resolution of the Board of Directors. Except as otherwise provided by law
or the Board of Directors, he also may authorize the President, any Vice
President or other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his place and stead. In
general he shall have the powers of supervision of the business of the
corporation.
(9)(D) The President shall be the Chief Operating Officer of the
corporation. Subject to the control of the Board of Directors and the
supervision of the Chairman of the Board, he shall have the general
management and control of the business of the corporation. In the absence
of the Chairman of the Board he may preside at all meetings of the
shareholders and of the Board of Directors. He shall have authority,
subject to such rules as may be prescribed by the Board of Directors, to
appoint such agents and employees of the corporation as he shall deem
necessary, to prescribe their powers, duties and compensation, and to
delegate authority to them. Such agents and employees shall hold office
at the discretion of the President. In the absence of the Chairman of the
Board he shall have authority to sign, execute, and acknowledge on behalf
of the corporation, all deeds, mortgages, bonds, stock certificates,
contracts, leases reports and all other documents or instruments necessary
or proper to be executed in the course of the ordinary business of the
corporation, or which shall be authorized by resolution of the Board of
Directors. Except as otherwise provided by law or the Board of Directors,
in the absence of the Chairman of the Board he may authorize any Vice
President or other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his place and stead. In
general he shall have the powers and duties usually vested in the office
of the president of a corporation, except for those which are vested in
the Chairman of the Board by paragraph (9)(C).
(9)(E) A Vice President shall have the powers and duties incident to
that office and shall have such other powers and duties as may be
prescribed by the Chairman of the Board, the President or the Board of
Directors. The Board of Directors may designate a Vice President as the
Chief Financial Officer of the corporation, in which event he shall have
responsibility for all financial matters that affect the corporation other
than those expressly provided for the Treasurer. In the event of the
incapacity of the President, he shall perform the duties of the President
or such other duties as the Board of Directors may prescribe.
(9)(F)(1) The Secretary shall keep minutes of all meetings of the
Directors. He shall be the ex officio Secretary of the
Board of Directors. He shall give, or cause to be given,
notices of all meetings of the shareholders of the
corporation and of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board
of Directors, Chairman or President, under whose
supervision he shall be.
(9)(F)(2) The Secretary shall keep a share book containing names of
all shareholders of record since organization of the
company, showing place of residence, amount of shares held,
time of acquiring shares, and time of transfer of shares of
each shareholder respectively, and also number and
designation of each share certificate and parties by and to
whom transferred, and a copy of any agreement between the
corporation and shareholders or between the shareholders
themselves affecting the transfer of the corporation's
shares.
(9)(G) The Treasurer shall have custody of all monies and securities
of the corporation, and shall keep adequate and correct accounts of the
corporation's receipts and disbursements, including records of customers'
credits and collections. The funds of the corporation shall be deposited
in the name of the corporation by the Treasurer in such depositories as
the Board of Directors may from time to time designate. He or she shall
have such other powers and perform such other duties as are assigned to or
vested in him or her by the Board of Directors.
Vacancies
(10)(A) If the office of any Director becomes vacant by reason of
death, resignation, retirement, disqualification, removal or otherwise,
the remaining Directors, by a majority vote, shall choose a successor or
successors who shall hold office until the next annual election and until
a successor has been re-elected unless sooner displaced.
(10)(B) In the case of absence of any officer of the corporation or
for any other reason that the Board may deem sufficient, the Board may
delegate the powers or duties of any of such officers to any Director,
provided a majority of the entire Board concur therein.
Indemnification
(11)(A) This corporation shall, in the exercise of the power granted
to Minnesota corporations by Section 302A.521, of the Minnesota Statutes,
as now enacted and as hereafter amended, indemnify its officers,
directors, employees and agents, acting in their official capacity, in the
manner and to the fullest extent authorized by Minnesota Statute 302A.521.
(11)(B) The indemnification provided by this By-Law shall not
exclude any other right to which an officer, director, employee or agent
may be entitled under any agreement, vote of disinterested Directors or
otherwise, as to action in his or her "official capacity" as such term is
defined in Minnesota Statute 302A.521, and shall not imply that the
corporation may not provide lawful indemnification not expressly provided
for in this By-Law.
(11)(C) This corporation may purchase and maintain insurance on
behalf of any officer, director, employee or agent against any liability
incurred by him or her in his or her official capacity, whether or not the
corporation would be required to indemnify him or her as to such
liability.
(11)(D) If the corporation indemnifies a person in accordance with
this section in connection with a proceeding by or on behalf of the
corporation, it shall report the amount of the indemnification and to whom
and on whose behalf it was paid as part of any annual financial statements
prepared pursuant to the request of a shareholder, covering the period
when the indemnification was paid or accrued under the accounting method
of the corporation reflected in the financial statement. See Minnesota
Statutes Section 302A.521 Subd. 8 and Section 302A.463.
Limitations of Liability of Directors
(12)(A) No Director of the corporation shall be personally liable to
the corporation or its shareholders for monetary damages or breach of
fiduciary duty as a Director notwithstanding any provision of law imposing
such liability; provided, however, that, to the extent provided by
applicable law, this paragraph shall not eliminate or limit the liability
of a Director,
(12)(B)(1) for any breach of the Director's duty of loyalty to
the corporation or its shareholders,
(12)(B)(2) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation
of law,
(12)(B)(3) under Section 302A.559 or 80A.23, or
(12)(B)(4) for any transactions from which the Director derived
an improper personal benefit.
Certificates of Shares
(13)(A) The share certificates of the corporation shall be numbered
and shall be entered in the share books of the corporation as they are
issued. They shall exhibit the holder's name and number of shares and
shall be signed by the Chairman, President or a Vice President and the
Secretary or Treasurer and shall bear the seal of the corporation.
(13)(B) Transfers of shares shall be made on the share books of the
corporation only upon surrender of the certificate therefor, endorsed as
required by the Uniform Act for the Simplification of Fiduciary Security
Transfers, Minn. Stat. Section Section 520.21 to 520.31, by the person
named in the certificate or by an attorney lawfully constituted in
writing.
(13)(C) The Board may close the transfer books for a period not
exceeding twenty (20) days preceding the annual meeting of the
shareholders.
(13)(D) The corporation shall be entitled to treat the registered
holder of any share as the absolute owner thereof, and accordingly shall
not be bound to recognize any equitable or other claim to, or interest in,
such share, on the part of any other person, whether or not it shall have
express or other notice thereof, save as expressly provided by the State
of Minnesota.
(13)(E) Any person claiming a share certificate to be lost or
destroyed, shall (1) make an affidavit or affirmation of that fact, and
(2) if the Board of Directors so requires, duly advertise the same and
give the corporation a corporate surety bond of indemnity in form
satisfactory to the Board in at least double the value of such
certificate, whereupon the proper officers may issue a new certificate of
the same tenor with the one alleged to be lost or destroyed, but always
subject to the approval of the Board of Directors and the laws of
Minnesota.
Dividends
(14) Dividends upon the capital shares of the corporation may be
declared by the Board of Directors at any regular or special meeting
pursuant to law. Dividends may be paid in cash, property, or in shares of
capital.
Fiscal Year
(15) The fiscal year of the corporation shall end on the last day of
February in each year, or as the Board of Directors may otherwise
determine.
Contracts
(16) No contract or other transaction between the corporation and any
other person or persons, firm or corporation shall be affected or
invalidated by reason of the fact that any one or more of the Directors or
officers of this corporation is, or are, interested in, or is a member,
shareholder, Director or officer, or are members, shareholders, Directors,
or officers of such other firm or corporation; any Director or officer or
officers of such other firm individually, or jointly, may be party or
parties to, or may be interested in, any contract or transaction of this
corporation or in which this corporation is interested; and no contract or
transaction of this corporation with any person or persons, firm
association or corporation shall be affected or invalidated by reason of
the fact that any Director or Directors, officer or officers, of this
corporation is a party, or are parties to or interested in, such contract,
act or transaction, or in any way connected with such person or persons,
firm, association or corporation, and each and every person who may become
a Director or officer of this corporation is hereby relieved from any
liability that might otherwise exist from this contracting with this
corporation for the benefit of himself or any firm, association, or
corporation in which he may be in any wise interested.
Checks and Notes
(17) Checks, drafts, orders for payment of money and promissory notes
shall be signed or endorsed in the name of the corporation by such person
or persons as the Board of Directors by resolution shall from time to time
appoint.
Amendments
(18) These By-Laws may be altered or amended by the Board of
Directors at any meeting by an affirmative vote of the majority of the
whole Board of Directors. They may also be altered or amended at any
meeting of the shareholders by the affirmative vote of a majority of the
shares issued and outstanding.
Prohibition Against Doing Business on Saturdays
(19) No business of this corporation shall be conducted between
sundown on Friday night and sundown on Saturday night at any time.
--End of By-Laws--
EXHIBIT 3.9
RESTATED AND AMENDED ARTICLES OF INCORPORATION OF
McNEILUS TRUCK AND MANUFACTURING, INC.,
A MINNESOTA CORPORATION
These Restated and Amended Articles of Incorporation supersede and
take the place of the original Articles of Incorporation, as previously
amended, of this corporation.
ARTICLE I.
The name of this corporation is McNeilus Truck and Manufacturing,
Inc.
ARTICLE II.
The purpose for which the corporation is formed for general business
purposes.
ARTICLE III.
Its duration shall be perpetual.
ARTICLE IV.
The location and post office address of its registered office in this
State is 524 Highway Street NE, Dodge Center, Minnesota 55927.
ARTICLE V.
The amount of stated capital with which the corporation shall begin
business shall not be less than One Thousand Dollars ($1,000.00).
ARTICLE VI.
(A) The total number of shares is 200,000, having no par value, such
shares to be of one class only known as common stock, each share
being entitled to one vote.
(B) No shareholder shall have any preemptive rights to subscribe
for, purchase, or acquire any shares of this corporation,
whether issued or unissued, or whether now or hereafter
authorized, or any obligations or other securities convertible
into or exchangeable for such shares, and to the extent
permitted by law all such shares, obligations, or other
securities convertible into or exchangeable for such shares may
be issued and disposed of by the Board of Directors on such
terms and for such consideration as the Board of Directors, in
its sole discretion, may determine.
(C) No shareholder shall have the right to cumulate his or her votes
in any election of directors of this corporation.
ARTICLE VII.
The management of this corporation shall be vested in a Board of
Directors composed of not less than one nor more than seven members, but
the number may be increased through by-laws to be adopted by the
shareholders, which by-laws max fix the number, qualifications,
classification and terms of office of directors. The names, post office
addresses, and terms of office of the members of the Board of Directors
are:
Garwin McNeilus, Rural Route #1, Dodge Center, Minnesota 55927.
Denzil D. McNeilus, Rural Route #1, Dodge Center, Minnesota 55927.
Marilee A. McNeilus, Rural Route #1, Dodge Center, Minnesota 55927.
Dennis G. McNeilus, Rural Route #1, Dodge Center, Minnesota 55927.
They shall hold office until their successors have been elected and
qualify.
ARTICLE VIII.
No director of the corporation shall be personally liable to the
corporation or its shareholders for monetary damages or breach of
fiduciary duty as a director notwithstanding any provision of law imposing
such liability; provided, however, that, to the extent provided by
applicable law, this paragraph shall not eliminate or limit the liability
of a director,
(i) for any breach of the director's duty of loyalty to the
corporation or its shareholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law,
(iii) under Minnesota Statutes Sections 302A.559 or 80A.23, or
(iv) for any transactions from which the director derived an improper
personal benefit.
No amendment to or repeal of this paragraph shall apply to or have
any effect on the liability or alleged liability of any director of the
corporation for or with respect to any such acts or omissions of such
director occurring prior to such amendment or repeal.
ARTICLE IX.
The authority to make or alter by-laws, subject to the power of
shareholders to change or repeal the same, is vested in the Board of
Directors.
ARTICLE X.
The name and post office address of the incorporator is:
Garwin McNeilus, Rural Route #1, Dodge Center, Minnesota 55927
EXHIBIT 3.10
AMENDED BY-LAWS
OF
MCNEILUS TRUCK AND MANUFACTURING, INC.
These Amended By-Laws shall supersede and replace all prior By-Laws
and any amendments thereto of this corporation.
Office
(1) The registered office of the corporation may be, but need not be
identical with the principal office in the State of Minnesota. The
corporation may have such other offices, either within or without the
State of Minnesota, as the Board of Directors may designate or as the
business of the corporation may require.
Notice of Meeting
(2) Notice of each meeting of the directors and shareholders shall
state the time and place and in case of a special meeting, the purpose.
Whenever notice is required to be given to the directors or shareholders
of the company, such notice may either be personal or written. Failure to
give notice of the annual meeting of the directors or shareholders shall
not invalidate any action taken at said meeting if held at the place and
time specified in these By-Laws.
Waiver of Notice
(3) Notice of time, place and purpose of any meeting of the
directors or shareholders may be waived, in writing, by any director or
shareholder at such meeting, if all of the directors or shareholders are
in attendance at such meeting; any meeting at which all directors or
shareholders shall not be in attendance and which notice of is waived by
those in attendance or has been waived by such absent directors or
shareholders in writing prior to or after such meeting, shall be a legal
meeting for the transaction of business, notwithstanding such notice as
herein provided has not been given. Appearance at a meeting is deemed a
waiver unless it is solely for the purpose of asserting the illegality of
the meeting.
Adjournment
(4) Any meeting of the directors or shareholders may be adjourned to
another time or place within or without the State. No further notice as
to such adjourned meeting need be given other than the announcement at the
meeting adjourned.
Quorum
(5) The presence of a majority of the directors and the presence, in
person or by proxy, of the holders of a majority of the shares entitled to
vote shall constitute a quorum for the transaction of business. In the
absence of a quorum, any meeting may be adjourned from time to time. The
directors and shareholders present at a duly called or held meeting at
which a quorum is present may continue to transact business until
adjournment, notwithstanding the withdrawal of enough directors or
shareholders to leave less than a quorum.
Shareholders' Meeting
(6) All meetings of the shareholders shall be held at the principal
office of the corporation or at such other place as the Board of Directors
may previously determine.
(7) The annual meeting of the shareholders shall be held on the
second Thursday in June of each year, if not a legal holiday, and if a
legal holiday then on the next secular day following at 2:00 P.M. or at
such other date and time as designated by the Board of Directors and
stated in the notice, when the shareholders shall elect a Board of
Directors by plurality vote by ballot and transact such other business as
may be brought before the meeting.
(8) Special meeting of the shareholders of this corporation shall be
held whenever called by (i) the Chairman, (2) the President (3) a majority
of the Board of Directors, or (4) whenever one or more shareholders who
are entitled to vote and who hold at least 50% of the issued and
outstanding voting shares make written application therefor to the
Secretary, stating the time, place, and purpose of the meeting called.
(9) Notice of all shareholders' meetings shall be given by the
Chairman, President, or Secretary, not less than five (5), nor more than
ten (10) days prior to the date of the meeting, to each shareholder of
record at his or her address as it appears on the share books of the
corporation, unless he or she shall have filed with the Secretary of the
corporation a written request that notice intended for him or her be
mailed to some other address, in which case it shall be mailed to the
address designated in such request.
Board of Directors
(10) The property and business of the corporation shall be managed by
its Board of Directors, not less than one nor more than nine in number,
who shall be elected annually at the annual meeting and who shall serve
until his or her successor shall be elected and shall qualify. Said Board
of Directors may exercise all powers of the corporation and do all such
lawful acts and things as are not by statute or by Certificate of
Incorporation or by these By-Laws directed or required to be exercised and
done by the shareholders.
(11) The annual meeting of the Board of Directors shall be held upon
notice, immediately after, and at the same place as, the annual meeting of
the shareholders.
(12)(A) Special meetings of the Board of Directors may be called by
or at the request of the Chairman or President and shall be called by
either the Chairman, President, or the Secretary, upon written request of
a majority of the directors. Notice of such meeting shall be given at
least three (3) days before the date of the meeting.
(12)(B) A director may give advanced written consent or opposition
to proposal to be acted on at a Board meeting. If the director is not
present at the meeting, consent or opposition to a proposal does not
constitute presence for purposes of determining the existence of a quorum,
but consent or opposition shall be counted as a vote in favor of or
against the proposal and shall be entered in the minutes or other record
of action at the meeting, if the proposal acted on at the meeting is
substantially the same or has substantially the same effect as the
proposal to which the director has consented or objected.
(12)(C)(i) A conference among directors by any means of
communication through which the directors may
simultaneously hear each other during the conference
constitutes a Board meeting, if the same notice is
given of the conference as would be required by
paragraph (12)(A) for a meeting, and if the number of
Directors participating in the conference would be
sufficient to constitute a quorum at a meeting.
Participation in a meeting by that means constitutes
presence in person at the meeting.
(12)(C)(ii) A director may participate in a Board meeting not
described in the preceding paragraph by any means of
communication through which the director, other
directors so participating, and all directors
physically present at the meeting may simultaneously
hear each other during the meeting. Participation in
a meeting by that means constitutes presence in person
at the meeting.
Officers
(13) The Board of Directors shall elect from its number a Chairman
and President. It likewise may elect one or more Vice Presidents, a
Secretary and a Treasurer who need not be directors, and may appoint
assistant Secretaries and assistant Treasurers. The Board of Directors
may create such other offices as it determines and appoint persons to fill
such offices and fill vacancies in any office. In the absence of any
officer of the corporation, or with or without cause, a majority of the
Board may delegate the powers or duties of such officer to any other
officer, or to any director.
(14) The Chairman of the Board shall be the Chief Executive Officer
of the corporation. Subject to the control of the Board of Directors, he
shall supervise the President and be responsible, through the President,
for the control of all of the business and affairs of the corporation. In
the absence of the President or otherwise, he shall have continuing
general powers of supervision and management of the corporation. When
present, he shall preside at all meetings of the shareholders and of the
Board of Directors. He shall see that all resolutions and orders of the
Board of Directors and its committees are carried into effect. He shall
have authority to sign, execute and acknowledge, on behalf of the
corporation, all deeds, mortgages, bonds, stock certificates, contracts,
leases, reports and all other documents or instruments necessary or proper
to be executed in the course of the ordinary business of the corporation,
or which shall be authorized by resolution of the Board of Directors.
Except as otherwise provided by law or the Board of Directors, he also may
authorize the President, any Vice President or other officer or agent of
the corporation to sign, execute and acknowledge such documents or
instruments in his place and stead. In general he shall have the powers
of supervision of the business of the corporation.
(15) The President shall be the Chief Operating Officer of the
corporation. Subject to the control of the Board of Directors and the
supervision of the Chairman of the Board, he shall have the general
management and control of the business of the corporation. In the absence
of the Chairman of the Board he may preside at all meetings of the
shareholders and of the Board of Directors. He shall have authority,
subject to such rules as may be prescribed by the Board of Directors, to
appoint such agents and employees of the corporation as he shall deem
necessary, to prescribe their powers, duties and compensation, and to
delegate authority to them. Such agents and employees shall hold office
at the discretion of the President. In the absence of the Chairman of the
Board he shall have authority to sign, execute, and acknowledge on behalf
of the corporation, all deeds, mortgages, bonds, stock certificates,
contracts, leases reports and all other documents or instruments necessary
or proper to be executed in the course of the ordinary business of the
corporation, or which shall be authorized by resolution of the Board of
Directors. Except as otherwise provided by law or the Board of Directors,
in the absence of the Chairman of the Board he may authorize any Vice
President or other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his place and stead. In
general he shall have the powers and duties usually vested in the office
of the president of a corporation, except for those which are vested in
the Chairman of the Board by paragraph (14).
(16) A Vice President shall have the powers and duties incident to
that office and shall have such other powers and duties as may be
prescribed by the Chairman of the Board, the President or the Board of
Directors. The Board of Directors may designate a Vice President as the
Chief Financial Officer of the corporation, in which event he shall have
the responsibility for all financial matters that affect the corporation
other than those expressly provided for the Treasurer. In the event of
the incapacity of the President, he shall perform the duties of the
President or such other duties as the Board of Directors may prescribe.
(17)(A) The Secretary shall keep minutes of all meetings of the
Directors. He shall be ex officio Secretary of the Board of Directors.
He shall give, or cause to be given, notices of all meetings of the
shareholders of the corporation and of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors,
Chairman or President, under whose supervision he shall be.
(17)(B) The Secretary shall keep a share book containing names of
all shareholders of record since organization of the company, showing
place of residence, amount of shares held, time of acquiring shares, and
time of transfer of shares of each shareholder respectively, and also
number and designation of each share certificate and parties by and to
whom transferred, and a copy of any agreement between the corporation and
shareholders or between the shareholders themselves affecting the transfer
of the corporation's shares.
(18) The Treasurer shall have custody of all monies and securities of
the corporation, and shall keep adequate and correct accounts of the
corporation's receipts and disbursements, including records of customers'
credits and collections. The funds of the corporation shall be deposited
in the name of the corporation by the Treasurer in such depositories as
the Board of Directors may from time to time designate. He or she shall
have such other powers and perform such other duties as are assigned to or
vested in him or her by the Board of Directors.
(19) Any director or officer may resign his or her office at any
time. All resignations shall be made in writing and take effect from the
time of their receipt by the corporation, unless some time be fixed in the
resignation, and then from that date. The acceptance of a resignation
shall not be required to make it effective.
Share Certificates
(20) The share certificates of the corporation shall be numbered and
shall be entered in the share books of the corporation as they are issued.
They shall exhibit the holder's name and number of shares and shall be
signed by the President or a Vice President and the Secretary or Treasurer
and shall bear the seal of the corporation.
(21) Transfers of shares shall be made on the share books of the
corporation only upon surrender of the certificate therefor, endorsed as
required by the Uniform Act for the Simplification of Fiduciary Security
Transfers, Minn. Stat. Sections 520.21 to 520.31, by the person named in
the certificate or by an attorney lawfully constituted in writing.
(22) The Board may close the transfer books for a period not
exceeding twenty (20) days preceding the annual meeting of the
shareholders.
(23) The corporation shall be entitled to treat the registered holder
of any share as the absolute owner thereof, and accordingly shall not be
bound to recognize any equitable or other claim to, or interest in, such
share, on the part of any other person, whether or not it shall have
express or other notice thereof, save as expressly provided by the State
of Minnesota.
(24) Any person claiming a share certificate to be lost or destroyed,
shall (i) make an affidavit or affirmation of that fact, and (2) if the
Board of Directors so requires, duly advertise the same and give the
corporation a corporate sure bond of indemnity in form satisfactory to the
Board in at least double the value of such certificate, whereupon the
proper officers may issue a new certificate of the same tenor with the one
alleged to be lost or destroyed, but always subject to the approval of the
Board of Directors and the laws of Minnesota.
Dividends
(25) Dividends on the shares of the corporation, when earned, shall
be declared at the discretion of the Board of Directors.
Fiscal Year
(26) The fiscal year of the corporation shall end on the last day of
February in each year, or as the Board of Directors may otherwise
determine.
Contracts
(27) No contract or other transaction between the corporation and any
other person or persons, firm or corporation shall be affected or
invalidated by reason of the fact that any one or more of the directors or
officers of this corporation is, or are, interested in, or is a member,
shareholder, director or officer, or are members, shareholders, directors,
or officers of such other firm or corporation; any director or officer or
officers of such other firm individually, or jointly, may be party or
parties to, or may be interested in, any contract or transaction of this
corporation or in which this corporation is interested; and no contract or
transaction of this corporation with any person or persons, firm,
association or corporation shall be affected or invalidated by reason of
the fact that any director or directors, officer or officers, of this
corporation is a party, or are parties to or interested in, such contract,
act or transaction, or in any way connected with such person or persons,
firm, association or corporation, and each and every person who may become
a director or officer of this corporation is hereby relieved from any
liability that might otherwise exist from this contracting with this
corporation for the benefit of himself or any firm, association, or
corporation in which he may be in anywise interested.
Amendments
(28) These By-Laws may be altered or amended by the Board of
Directors at any meeting by an affirmative vote of the majority of the
whole Board of Directors. They may also be altered or amended at any
meeting of the shareholders by the affirmative vote of a majority of the
shares issued and outstanding.
Indemnification
(29)(A) This corporation shall, in the exercise of the power granted
to Minnesota corporations by Section 302A.521, of the Minnesota Statutes,
as now enacted and as hereafter amended, indemnify its officers,
directors, employees and agents, acting in their official capacity, in the
manner and to the fullest extent authorized by Minnesota Statute 302A.521.
(29)(B) The indemnification provided by this By-Law shall not
exclude any other right to which an officer, director, employee or agent
may be entitled under any agreement, vote of disinterested Directors or
otherwise, as to action in his or her "official capacity" as such term is
defined in Minnesota Statute 302A.521, and shall not imply that the
corporation may not provide lawful indemnification not expressly provided
for in this By-Law.
(29)(C) This corporation may purchase and maintain insurance on
behalf of any officer, director, employee or agent against any liability
incurred by him or her in his or her official capacity, whether or not the
corporation would be required to indemnify him or her as to such
liability.
(29)(D) If the corporation indemnifies a person in accordance with
this section in connection with a proceeding by or on behalf of the
corporation, it shall report the amount of the indemnification and to whom
and on whose behalf it was paid as part of any annual financial statements
prepared pursuant to the request of a shareholder, covering the period
when the indemnification was paid or accrued under the accounting method
of the corporation reflected in the financial statement. See Minnesota
Statutes Section 302A.521 Subd. 8 and Section 302A.46.
Limitations of Liability of Directors
(30)(A) No director of the corporation shall be personally liable to
the corporation or its shareholders for monetary damages or breach of
fiduciary duty as a director notwithstanding any provision of law imposing
such liability; provided, however, that, to the extent provided by
applicable law, this paragraph shall not eliminate or limit the liability
of a director,
(30)(B)(i) for any breach of the director's duty of loyalty to
the corporation or its shareholders,
(30)(B)(ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation
of law,
(30)(B)(iii) under Section 302A.559 or 80A.23, or
(30)(B)(iv) for any transactions from which the director derived
an improper personal benefit.
No amendment to or repeal of this paragraph shall apply to or have
any effect on the liability or alleged liability of any director of the
corporation for or with respect to any such acts or omissions of such
director occurring prior to such amendment or repeal.
Prohibition Against Doing Business on Saturdays
(31) No business of this corporation shall be conducted between
sundown on Friday night and sundown of Saturday night at any time.
--End of By-Laws--
EXHIBIT 3.11
ARTICLES OF INCORPORATION
OF
IOWA CONTRACT FABRICATORS, INC.
ARTICLE I
The name of this corporation shall be Iowa Contract Fabricators, Inc.
ARTICLE II
The nature of the business or objects or purpose to be transacted,
promoted or carried on are to do any or all of the things herein mentioned
as fully and to the same extent as natural persons might do, and in any
part of the world, viz:
(A) This corporation is formed for and shall have general business
purposes
(B) In addition, but not in limitation of the above general business
purposes, this corporation shall have the authority:
(1) To let, hold, acquire, mortgage, sell and convey real
estate and personal property necessary or convenient to the
foregoing business, including the right to hold, acquire,
mortgage, pledge or dispose of shares, bonds, securities
and other evidences of indebtedness of any foreign or
domestic corporation including its own, or of individuals;
and including the right and authority to let, hold,
acquire, mortgage, sell, convey and lease to others, real
estate and personal property for any purpose whatsoever.
(2) To apply for, obtain, register, lease, purchase or
otherwise to acquire, and to hold, use, own, operate and
introduce and to sell, assign or otherwise dispose of any
trademarks, trade names, patents, inventions, improvements
and processes used in connection with or secured under the
Letters of Patent of the United States, or elsewhere or
otherwise; and to use, exercise, develop, grant, license in
respect of, or otherwise turn to account any such
trademarks, patents, licenses or the like of any such
property or rights.
(3) To hold, purchase or otherwise acquire, to sell, assign,
transfer, mortgage, pledge or otherwise dispose of shares
of capital and bonds, debentures or evidences of
indebtedness created by other corporations, including its
own, and while the holder thereof to exercise all rights
and privileges of ownership including the right to vote
thereon.
(4) To do and perform all of those things which are incidental
to the foregoing business.
(5) To do any and all things set forth in this Certificate of
Incorporation and to do all of the things a corporation
organized under the laws of the State of Minnesota to the
extent and as fully as natural persons might do so far as
may be permitted by law. Provided, however, nothing herein
contained shall be deemed to authorize this corporation to
carry on banking business.
ARTICLE III
This corporation shall have perpetual existence.
ARTICLE IV
The location and post office address of its registered office in this
state shall be Rural Route, Box ]44, Riceville, Iowa 50466, and its
registered agent shall be Jewell Lossee.
ARTICLE V
The aggregate number of shares which this corporation shall have the
authority to issue is 100,000 of the par value of $100.00 each, which
shares shall be designated common shares, which shall be paid in at such
times and in such amounts as the Board of Directors shall determine. No
shareholder shall sell his shares or part with the title thereto except in
the manner provided or to be provided by the By-Laws. The Board of
Directors is authorized to fix or alter from time to time the dividend
rate and the redemption or liquidation price of shares.
ARTICLE VI
(A) The management of this corporation shall be vested in a Board of
Directors composed of not less than one or more than nine members.
(B) The directors and officers of the corporation shall hold their
offices until their successors are elected and qualified.
ARTICLE VII
The Board of Directors is expressly authorized to make, alter, amend
and rescind the By-Laws of the corporation, to designate one or more
committees, each committee to consist of one or more of the Directors of
the corporation, which to the extent provided in the resolution, or in the
By-Laws, shall have and may exercise powers of the Board of Directors in
the management of the business and affairs of the corporation. Such
committee or committees shall have such name or names as may be stated in
the By-Laws of the corporation or as may be determined from time to time
by resolutions adopted by the Board of Directors. The Board of Directors
shall further have the power to fill any vacancy in any executive office
or Board of Directors, until the next annual meeting.
ARTICLE VIII
The name and post office address of the incorporator of this
corporation Paul V. Sween, 105 East Oakland Avenue, P. O. Box 366, Austin,
Minnesota 55912.
EXHIBIT 3.12
BY-LAWS
OF
IOWA CONTRACT FABRICATORS, INC.
Name
(1) The name of this corporation is Iowa Contract Fabricators, Inc.
Office
(2) The principal office of the corporation shall be at Dodge
Center, Minnesota. The corporation may establish and maintain any office
or offices at such other places as the Board of Directors may from time to
time appoint, or the business of the corporation may acquire.
Corporate Seal
(3) The corporate seal of the corporation shall be circular in form
and shall have subscribed thereon the name of the corporation and the
words "Seal", "Corporate", and "Minnesota".
Waiver of Notice
(4) Any shareholder, Director, or officer may waive any notice
required to be given under these By-Laws.
Shareholders' Meetings
(5)(A) All meetings of the shareholders shall be held at the office
of the corporation in Dodge Center, Minnesota, or at such other place as
the Board of Directors may previously determine.
(5)(B) The annual meeting of the shareholders shall be held on the
second Tuesday of March of each year, the first annual meeting to be held
on the second Tuesday of March, 1995, if not a legal holiday, and if a
legal holiday then on the next secular day following at 2:00 o'clock p.m.
when the shareholders shall elect a Board of Directors by plurality vote
by ballot and transact such other business as may be brought before the
meeting.
(5)(C) The holders of the majority of the shares issued and
outstanding present in person or represented by proxy shall be requisite
and shall constitute a quorum at all meetings of the shareholders for the
transaction of business. If, however, such majority shall not be present
at any meeting the shareholders present in person or by proxy shall have
power to adjourn the meeting from time to time without notice other than
announcement at the meeting until the requisite amount of shares shall be
present. At such adjourned meeting at which the requisite amount of
shares shall be represented, any business may be transacted which might
have been transacted at the meeting as originally notified.
(5)(D) At each meeting of the shareholders each shareholder shall be
entitled to vote in person or by proxy, appointed by an instrument in
writing subscribed by such shareholder, and shall have one vote for each
share registered in his name.
(5)(E) Written notice of the annual or a special meeting shall be
mailed to each shareholder at such address as appears on the share book of
the corporation at least seven days prior to the meeting.
(5)(F) Special meetings of the shareholders for any purpose may be
called by the President and shall be called by the President or Secretary
at the request in writing of a majority of the Board of Directors or at
the request in writing of shareholders owning a majority in amount of the
capital shares. Such request shall state the purpose or purposes of the
proposed meeting. Business transacted at the special meeting shall be
confined to the objects stated in the call, which objects shall be set
forth in the notice of special meeting.
Directors
(6)(A) The property and business of the corporation shall be managed
by its Board of Directors, not less than one nor more than nine in number,
who shall be elected annually at the annual meeting and who shall serve
until his successor shall be elected and shall qualify. Said Board of
Directors may exercise all powers of the corporation and do all such
lawful acts and things as are not by statute or by Certificate of
Incorporation or by these By-Laws directed or required to be exercised and
done by the shareholders.
Directors' Meetings
(6)(B) The Board of Directors shall meet at the office of the
corporation immediately following the annual meeting of the shareholders
or otherwise and no notice of such meeting shall be necessary. Special
meetings of the Board may be called by the President on one day's notice
to each Director, either personally or by mail, telegram or telephone.
Special meetings shall be called by the President or the Secretary and on
like notice on written request of two Directors.
(6)(C) At all meetings of the Board a majority of the Board of
Directors shall be necessary and sufficient to constitute a quorum.
(6)(D) A Director may give advance written consent or opposition to
a proposal to be acted on at a Board meeting. If the Director is not
present at the meeting, consent or opposition to a proposal does not
constitute presence for purposes of determIning the existence of a quorum,
but consent or opposition shall be counted as a vote in favor or against
the proposal and shall be entered in the minutes or other record of action
at the meeting, if the proposal acted on at the meeting is substantially
the same or has substantially the same effect as the proposal to which the
Director has consented or objected.
(6)(E)(1) A conference among Directors by any means of communication
through which the Directors may simultaneously hear each
other during the conference constitutes a Board meeting, if
the same notice is given of the conference as would be
required by paragraph (6)(B) for a meeting, and if the
number of Directors participating in the conference would
be sufficient to constitute a quorum at a meeting.
Participation in a meeting by that means constitutes
presence in person at the meeting.
(6)(E)(2) A Director may participate in a Board meeting not described
in the preceding paragraph by any means of communication
through which the Director, other Directors so
participating, and all Directors physically present at the
meeting may simultaneously hear each other during the
meeting. Participation in a meeting by that means
constitutes presence in person at the meeting.
Committees
(7) The Board of Directors may, by resolution or resolutions passed
by the Board, designate one or more committees, each committee to consist
of one or more Directors of the corporation, which, to the extent provided
in said resolution or resolutions or by these By-Laws, shall have and may
exercise the powers of the Board of Directors in the management of the
business and affairs of the corporation and may have power to authorize
the seal of the corporation to be affixed to all papers which may require
it. Such committee or committees shall have such name or names as may be
stated in these By-Laws or as may be determined from time to time by a
resolution adopted by the Board of Directors. They shall keep regular
minutes of their meetings and report the same to the Board at each regular
meeting.
Officers
(8)(A) The officers of the corporation shall be chosen by the
Directors and shall be a Chairman, President, one or more Vice Presidents,
Secretary and Treasurer. The Chairman of the Board may hold at the same
time the office of President and any of the officers may hold at the same
time the office of Secretary or Treasurer. These officers shall be chosen
by the Board of Directors at its first meeting after each annual meeting
of the shareholders. The offices of Secretary and Treasurer need not be
held by members of the Board. The Board may appoint such other officers
and agents as it shall deem necessary who shall hold their offices for
such terms and exercise such powers and duties as shall be determined from
time to time by the Board. The Board of Directors shall have the right to
fix the salaries of all officers of the corporation.
(8)(B) The officers of the corporation shall hold office until their
successors are chosen and qualify in their stead. Any officer elected or
appointed by the Board of Directors may be removed at any time by an
affirmative vote of the majority of the Board of Directors. Any vacancy
shall be filled by an affirmative vote of the majority of the Board of
Directors.
Chairman
(8)(C) The Chairman of the Board shall be the Chief Executive
Officer of the corporation. Subject to the control of the Board of
Directors, he shall supervise the President and be responsible, through
the President, for the control of all of the business and affairs of the
corporation. In the absence of the President or otherwise, he shall have
continuing general powers of supervision and management of the
corporation. When present, he shall preside at all meetings of the
shareholders and of the Board of Directors. He shall see that all
resolutions and orders of the Board of Directors and its committees are
carried into effect. He shall have authority to sign, execute and
acknowledge, on behalf of the corporation, all deeds, mortgages, bonds,
stock certificates, contracts, leases, reports and all other documents or
instruments necessary or proper to be executed in the course of the
ordinary business of the corporation, or which shall be authorized by
resolution of the Board of Directors. Except as otherwise provided by law
or the Board of Directors, he also may authorize the President, any Vice
President or other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his place and stead. In
general he shall have the powers of supervision of the business of the
corporation.
President
(8)(D) The President shall be the Chief Operating Officer of the
corporation. Subject to the control of the Board of Directors and the
supervision of the Chairman of the Board, he shall have the general
management and control of the business of the corporation. In the absence
of the Chairman of the Board he may preside at all meetings of the
shareholders and of the Board of Directors. He shall have authority,
subject to such rules as may be prescribed by the Board of Directors, to
appoint such agents and employees of the corporation as he shall deem
necessary, to prescribe their powers, duties and compensation, and to
delegate authority to them. Such agents and employees shall hold office
at the discretion of the President. In the absence of the Chairman of the
Board he shall have authority to sign, execute, and acknowledge on behalf
of the corporation, all deeds, mortgages, bonds, stock certificates,
contracts, leases reports and all other documents or instruments necessary
or proper to be executed in the course of the ordinary business of the
corporation, or which shall be authorized by resolution of the Board of
Directors. Except as otherwise provided by law or the Board of Directors,
in the absence of the Chairman of the Board he may authorize any Vice
President or other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his place and stead. In
general he shall have the powers and duties usually vested in the office
of the president of a corporation, except for those which are vested in
the Chairman of the Board by paragraph (8)(C).
Vice Presidents
(8)(E) A Vice President shall have the powers and duties incident to
that office and shall have such other powers and duties as may be
prescribed by the Chairman of the Board, the President or the Board of
Directors. The Board of Directors may designate a Vice President as the
Chief Financial Officer of the corporation, in which event he shall have
responsibility for all financial matters that affect the corporation other
than those expressly provided for the Treasurer.
Secretary
(8)(F) The Secretary shall attend all sessions of the Board and all
meetings of the shareholders and record all votes and the minutes of all
proceedings in a book to be kept for that purpose and shall perform like
duties for standing committees when required. He shall give or cause to
be given notice of all meetings of shareholders and of the Board of
Directors and shall perform such other duties as may be prescribed by the
Board of Directors or the President. He and the President shall execute
bonds, mortgages and other contracts requiring the seal of the
corporation.
Treasurer
(8)(G) The Treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all
monies and other valuable effects in the name and to the credit of the
corporation.
Vacancies
(8)(H) If the office of any Director becomes vacant by reason of
death, resignation, retirement, disqualification, removal or otherwise,
the remaining Directors, by a majority vote, shall choose a successor or
successors who shall hold office until the next annual election and until
a successor has been re-elected unless sooner displaced.
(8)(I) In the case of absence of any officer of the corporation or
for any other reason that the Board may deem sufficient, the Board may
delegate the powers or duties of any of such officers to any Director,
provided a majority of the entire Board concur therein.
Indemnification
(9)(A) The corporation, acting through its Board of Directors or as
otherwise permitted by law, may exercise as fully as may be permitted from
time to time by the statutes and decisional law of the State of Minnesota
or by any other applicable rules or principles of law, its power to
indemnify each person acting in an official capacity for the corporation
against the expense of any action to which he is a party or is threatened
to be made a party by reason of the former or present official capacity of
the person.
(9)(B) As used in this by-law, the term "official capacity" means:
(a) with respect to a Director, position of Director in a corporation, (b)
with respect to a person other than a Director, the elective or appointive
office or position held by an officer, member of a committee of the Board
or the employment or agency relationship undertaken by an employee or
agent of the corporation, and (c) with respect to a Director, officer,
employee or agent of the corporation who, while a Director, officer,
employee or agent of the corporation, is or was serving at the request of
the corporation or whose duties in that position involve or involved
service as a Director, officer, partner, trustee, or agent of another
organization or employee benefit plan, the position of that person as a
Director, officer, partner, trustee, employee or agent, as the case may
be, of the other organization or employee benefit plan.
(9)(C) If the corporation indemnifies a person in accordance with
this section in connection with a proceeding by or on behalf of the
corporation, it shall report the amount of the indemnification and to whom
and on whose behalf it was paid as part of any annual financial statements
prepared pursuant to the request of a shareholder, covering the period
when the indemnification was paid or accrued under the accounting method
of the corporation reflected in the financial statement. See Minnesota
Statutes Section 302A.521 Subd. 8 and Section 302A.463.
Certificates of Shares
(10) Share certificates of the corporation shall be numbered
consecutively and shall be entered on the books of the corporation as they
are issued. They shall exhibit the holders' names, number of shares, and
shall be signed by the President or Vice President and the Treasurer or
Secretary. Each certificate shall bear the corporate seal.
Checks and Notes
(11) Checks, drafts, orders for payment of money and promissory notes
shall be signed or endorsed in the name of the corporation by such person
or persons as the Board of Directors by resolution shall from time to time
appoint.
Dividends
(12) Dividends upon the capital shares of the corporation may be
declared by the Board of Directors at any regular or special meeting
pursuant to law. Dividends may be paid in cash, property, or in shares of
capital.
Amendments
(13) These By-Laws may be altered or amended by the Board of
Directors at any meeting by an affirmative vote of the majority of the
whole Board of Directors. They may also be altered or amended at any
meeting of the shareholders by the affirmative vote of a majority of the
shares issued and outstanding.
EXHIBIT 3.13
ARTICLES OF INCORPORATION
OF
McINTIRE FABRICATORS, INC.
ARTICLE I
The name of this corporation shall be Mclntire Fabricators, Inc.
ARTICLE II
The nature of the business or objects or purpose to be transacted,
promoted or carried on are to do any or all of the things herein mentioned
as fully and to the same extent as natural persons might do, and in any
part of the world, viz:
(A) This corporation is formed for and shall have general business
purposes.
(B) In addition, but not in limitation of the above general business
purposes, this corporation shall have the authority:
(1) To let, hold, acquire, mortgage, sell and
convey real estate and personal property
necessary or convenient to the foregoing
business, including the right to hold,
acquire, mortgage, pledge or dispose of
shares, bonds, securities and other
evidences of indebtedness of any foreign or
domestic corporation including its own, or
of individuals; and including the right and
authority to let, hold, acquire, mortgage,
sell, convey and lease to others, real
estate and personal property for any purpose
whatsoever.
(2) To apply for, obtain, register, lease,
purchase or otherwise to acquire, and to
hold, use, own, operate and introduce and to
sell, assign or otherwise dispose of any
trademarks, trade names, patents,
inventions, improvements and processes used
in connection with or secured under the
Letters of Patent of the United States, or
elsewhere or otherwise; and to use,
exercise, develop, grant, license in respect
of, or otherwise turn to account any such
trademarks, patents, licenses or the like of
any such property or rights.
(3) To hold, purchase or otherwise acquire, to
sell, assign, transfer, mortgage, pledge or
otherwise dispose of shares of capital and
bonds, debentures or evidences of
indebtedness created by other corporations,
including its own, and while the holder
thereof to exercise all rights and
privileges of ownership including the right
to vote thereon.
(4) To do and perform all of those things which
are incidental to the foregoing business.
(5) To do any and all things set forth in this
Certificate of Incorporation and to do all
of the things a corporation organized under
the laws of the State of Minnesota to the
extent and as fully as natural persons might
do so far as may be permitted by law.
Provided, however, nothing herein contained
shall be deemed to authorize this
corporation to carry on banking business.
ARTICLE III
This corporation shall have perpetual existence.
ARTICLE IV
The location and post office address of its registered office in this
state shall be 712 First Street South, County Road T-62 South, Mclntire,
Iowa 50455, and its registered agent shall be Joel Urch.
ARTICLE V
The aggregate number of shares which this corporation shall have the
authority to issue is 100,000 of the par value of $100.00 each, which
shares shall be designated common shares, which shall be paid in at such
times and in such amounts as the Board of Directors shall determine. No
shareholder shall sell his shares or part with the title thereto except in
the manner provided or to be provided by the By-Laws. The Board of
Directors is authorized to fix or alter from time to time the dividend
rate and the redemption or liquidation price of shares.
ARTICLE VI
(A) The management of this corporation shall be vested in a Board of
Directors composed of not less than one or more than nine members.
(B) The directors and officers of the corporation shall hold their
offices until their successors are elected and qualified.
ARTICLE VII
The Board of Directors is expressly authorized to make, alter, amend
and rescind the By-Laws of the corporation, to designate one or more
committees, each committee to consist of one or more of the Directors of
the corporation, which to the extent provided in the resolution, or in the
By-Laws, shall have and may exercise powers of the Board of Directors in
the management of the business and affairs of the corporation. Such
committee or committees shall have such name or names as may be stated in
the By-Laws of the corporation or as may be determined from time to time
by resolutions adopted by the Board of Directors. The Board of Directors
shall further have the power to fill any vacancy in any executive office
or Board of Directors, until the next annual meeting.
ARTICLE VIII
The name and post office address of the incorporator of this
corporation Paul V. Sween, 105 East Oakland Avenue, P. O. Box 366, Austin,
Minnesota 55912.
EXHIBIT 3.14
BY-LAWS
OF
MCINTIRE FABRICATORS, INC.
Name
(1) The name of this corporation is Mclntire Fabricators, Inc.
Office
(2) The principal office of the corporation shall be at Dodge
Center, Minnesota. The corporation may establish and maintain any office
or offices at such other places as the Board of Directors may from time to
time appoint, or the business of the corporation may acquire.
Corporate Seal
(3) The corporate seal of the corporation shall be circular in form
and shall have subscribed thereon the name of the corporation and the
words "Seal", "Corporate", and "Minnesota".
Waiver of Notice
(4) Any shareholder, Director, or officer may waive any notice
required to be given under these By-Laws.
Shareholders' Meetings
(5)(A) All meetings of the shareholders shall be held at the office
of the corporation in Dodge Center, Minnesota, or at such other place as
the Board of Directors may previously determine.
(5)(B) The annual meeting of the shareholders shall be held on the
second Tuesday of March of each year, the first annual meeting to be held
on the second Tuesday of March, 1994, if not a legal holiday, and if a
legal holiday then on the next secular day following at 2:00 o'clock p.m.
when the shareholders shall elect a Board of Directors by plurality vote
by ballot and transact such other business as may be brought before the
meeting.
(5)(C) The holders of the majority of the shares issued and
outstanding present in person or represented by proxy shall be requisite
and shall constitute a quorum at all meetings of the shareholders for the
transaction of business. If however, such majority shall not be present
at any meeting the shareholders present in person or by proxy shall have
power to adjourn the meeting from time to time without notice other than
announcement at the meeting until the requisite amount of shares shall be
present. At such adjourned meeting at which the requisite amount of
shares shall be represented, any business may be transacted which might
have been transacted at the meeting as originally notified.
(5)(D) At each meeting of the shareholders each shareholder shall be
entitled to vote in person or by proxy, appointed by an instrument in
writing subscribed by such shareholder, and shall have one vote for each
share registered in his name.
(5)(E) Written notice of the annual or a special meeting shall be
mailed to each shareholder at such address as appears on the share book of
the corporation at least seven days prior to the meeting.
(5)(F) Special meetings of the shareholders for any purpose may be
called by the President and shall be called by the President or Secretary
at the request in writing of a majority of the Board of Directors or at
the request in writing of shareholders owning a majority in amount of the
capital shares. Such request shall state the purpose or purposes of the
proposed meeting. Business transacted at the special meeting shall be
confined to the objects stated in the call, which objects shall be set
forth in the notice of special meeting.
Directors
(6)(A) The property and business of the corporation shall be managed
by its Board of Directors, not less than one nor more than nine in number,
who shall be elected annually at the annual meeting and who shall serve
until his successor shall be elected and shall qualify. Said Board of
Directors may exercise all powers of the corporation and do all such
lawful acts and things as are not by statute or by Certificate of
Incorporation or by these By-Laws directed or required to be exercised and
done by the shareholders.
Directors' Meetings
(6)(B) The Board of Directors shall meet at the office of the
corporation immediately following the annual meeting of the shareholders
or otherwise and no notice of such meeting shall be necessary. Special
meetings of the Board may be called by the President on one day's notice
to each Director, either personally or by mail, telegram or telephone.
Special meetings shall be called by the President or the Secretary and on
like notice on written request of two Directors.
(6)(C) At all meetings of the Board a majority of the Board of
Directors shall be necessary and sufficient to constitute a quorum.
(6)(D) A Director may give advance written consent or opposition to
a proposal to be acted on at a Board meeting. If the Director is not
present at the meeting, consent or opposition to a proposal does not
constitute presence for purposes of determining the existence of a quorum,
but consent or opposition shall be counted as a vote in favor or against
the proposal and shall be entered in the minutes or other record of action
at the meeting, if the proposal acted on at the meeting is substantially
the same or has substantially the same effect as the proposal to which the
Director has consented or objected.
(6)(E)(1) A conference among Directors by any means of communication
through which the Directors may simultaneously hear each other during the
conference constitutes a Board meeting, if the same notice is given of the
conference as would be required by paragraph (6) (B) for a meeting, and if
the number of Directors participating in the conference would be
sufficient to constitute a quorum at a meeting. Participation in a
meeting by that means constitutes presence in person at the meeting.
(6)(E)(2) A Director may participate in a Board meeting not
described in the preceding paragraph by any means of communication through
which the Director, other Directors so participating, and all Directors
physically present at the meeting may simultaneously hear each other
during the meeting. Participation in a meeting by that means constitutes
presence in person at the meeting.
Committees
(7) The Board of Directors may, by resolution or resolutions passed
by the Board, designate one or more committees, each committee to consist
of one or more Directors of the corporation, which, to the extent provided
in said resolution or resolutions or by these By-Laws, shall have and may
exercise the powers of the Board of Directors in the management of the
business and affairs of the corporation and may have power to authorize
the seal of the corporation to be affixed to all papers which may require
it. Such committee or committees shall have such name or names as may be
stated in these By-Laws or as may be determined from time to time by a
resolution adopted by the Board of Directors. They shall keep regular
minutes of their meetings and report the same to the Board at each regular
meeting.
Officers
(8)(A) The officers of the corporation shall be chosen by the
Directors and shall be a Chairman, President, one or more Vice Presidents,
Secretary and Treasurer. The Chairman of the Board may hold at the same
time the office of President and any of the officers may hold at the same
time the office of Secretary or Treasurer. These officers shall be chosen
by the Board of Directors at its first meeting after each annual meeting
of the shareholders. The offices of Secretary and Treasurer and agents as
it shall deem necessary who shall hold their offices for such terms and
exercise such powers and duties as shall be determined from time to time
by the Board. The Board of Directors shall have the right to fix the
salaries of all officers of the corporation.
(8)(B) The officers of the corporation shall hold office until their
successors are chosen and qualify in their stead. Any officer elected or
appointed by the Board of Directors may be removed at any time by an
affirmative vote of the majority of the Board of Directors. Any vacancy
shall be filled by an affirmative vote of the majority of the Board of
Directors.
Chairman
(8)(C) The Chairman of the Board shall be the Chief Executive
Officer of the corporation. Subject to the control of the Board of
Directors, he shall supervise the President and be responsible, through
the President, for the control of all of the business and affairs of the
corporation. In the absence of the President or otherwise, he shall have
continuing general powers of supervision and management of the
corporation. When present, he shall preside at all meetings of the
shareholders and of the Board of Directors. He shall see that all
resolutions and orders of the Board of Directors and its committees are
carried into effect. He shall have authority to sign, execute and
acknowledge, on behalf of the corporation, all deeds, mortgages, bonds,
stock certificates, contracts, leases, reports and all other documents or
instruments necessary or proper to be executed in the course of the
ordinary business of the corporation, or which shall be authorized by
resolution of the Board of Directors. Except as otherwise provided by law
or the Board of Directors, he also may authorize the President, any Vice
President or other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his place and stead. In
general he shall have the powers of supervision of the business of the
corporation.
President
(8)(D) The President shall be the Chief Operating Officer of the
corporation. Subject to the control of the Board of Directors and the
supervision of the Chairman of the Board, he shall have the general
management and control of the business of the corporation. In the absence
of the Chairman of the Board he may preside at all meetings of the
shareholders and of the Board of Directors. He shall have authority,
subject to such rules as may be prescribed by the Board of Directors, to
appoint such agents and employees of the corporation as he shall deem
necessary, to prescribe their powers, duties and compensation, and to
delegate authority to them. Such agents and employees shall hold office
at the discretion of the President. In the absence of the Chairman of the
Board he shall have authority to sign, execute, and acknowledge on behalf
of the corporation, all deeds, mortgages, bonds, stock certificates,
contracts, leases reports and all other documents or instruments necessary
or proper to be executed in the course of the ordinary business of the
corporation, or which shall be authorized by resolution of the Board of
Directors. Except as otherwise provided by law or the Board of Directors,
in the absence of the Chairman of the Board he may authorize any Vice
President or other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his place and stead. In
general he shall have the powers and duties usually vested in the office
of the president of a corporation, except for those which are vested in
the Chairman of the Board by paragraph (8)(C).
Vice Presidents
(8)(E) A Vice President shall have the powers and duties incident to
that office and shall have such other powers and duties as may be
prescribed by the Chairman of the Board, the President or the Board of
Directors. The Board of Directors may designate a Vice President as the
Chief Financial Officer of the corporation, in which event he shall have
responsibility for all financial matters that affect the corporation other
than those expressly provided for the Treasurer.
Secretary
(8)(F) The Secretary shall attend all sessions of the Board and all
meetings of the shareholders and record all votes and the minutes of all
proceedings in a book to be kept for that purpose and shall perform like
duties for standing committees when required. He shall give or cause to
be given notice of all meetings of shareholders and of the Board of
Directors and shall perform such other duties as may be prescribed by the
Board of Directors, Chairman or President. He and the President shall
execute bonds, mortgages and other contracts requiring the seal of the
corporation.
Treasurer
(8)(G) The Treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all
monies and other valuable effects in the name and to the credit of the
corporation.
Vacancies
(8)(H) If the office of any Director becomes vacant by reason of
death, resignation, retirement, disqualification, removal or otherwise,
the remaining Directors, by a majority vote, shall choose a successor or
successors who shall hold office until the next annual election and until
a successor has been re-elected unless sooner displaced.
(8)(I) In the case of absence of any officer of the corporation or
for any other reason that the Board may deem sufficient, the Board may
delegate the powers or duties of any of such officers to any Director,
provided a majority of the entire Board concur therein.
Indemnification
(9) (A) The corporation, acting through its Board of Directors or as
otherwise permitted by law, may exercise as fully as may be permitted from
time to time by the statutes and decisional law of the State of Minnesota
or by any other applicable rules or principles of law, its power to
indemnify each person acting in an official capacity for the corporation
against the expense of any action to which he is a party or is threatened
to be made a party by reason of the former or present official capacity of
the person.
(9)(B) As used in this by-law, the term "official capacity" means:
(a) with respect to a Director, position of Director in a corporation, (b)
with respect to a person other than a Director, the elective or appointive
office or position held by an officer, member of a committee of the Board
or the employment or agency relationship undertaken by an employee or
agent of the corporation, and (c) with respect to a Director, officer,
employee or agent of the corporation who, while a Director, officer,
employee or agent of the corporation, is or was serving at the request of
the corporation or whose duties in that position involve or involved
service as a Director, officer, partner, trustee, or agent of another
organization or employee benefit plan, the position of that person as a
Director, officer, partner, trustee, employee or agent, as the case may
be, of the other organization or employee benefit plan.
(9)(C) If the corporation indemnifies a person in accordance with
this section in connection with a proceeding by or on behalf of the
corporation, it shall report the amount of the indemnification and to whom
and on whose behalf it was paid as part of any annual financial statements
prepared pursuant to the request of a shareholder, covering the period
when the indemnification was paid or accrued under the accounting method
of the corporation reflected in the financial statement. See Minnesota
Statutes Section 302A.521 Subd. 8 and Section 302A.463.
Certificates of Shares
(10) Share certificates of the corporation shall be numbered
consecutively and shall be entered on the books of the corporation as they
are issued. They shall exhibit the holders' names, number of shares, and
shall be signed by the President or Vice President and the Treasurer or
Secretary. Each certificate shall bear the corporate seal.
Checks and Notes
(11) Checks, drafts, orders for payment of money and promissory notes
shall be signed or endorsed in the name of the corporation by such person
or persons as the Board of Directors by resolution shall from time to time
appoint.
Dividends
(12) Dividends upon the capital shares of the corporation may be
declared by the Board of Directors at any regular or special meeting
pursuant to law. Dividends may be paid in cash, property, or in shares of
capital.
Amendments
(13) These By-Laws may be altered or amended by the Board of
Directors at any meeting by an affirmative vote of the majority of the
whole Board of Directors. They may also be altered or amended at any
meeting of the shareholders by the affirmative vote of a majority of the
shares issued and outstanding.
EXHIBIT 3.15
ARTICLES OF INCORPORATION
OF
KENSETT FABRICATORS, INC.
ARTICLE I
The name of this corporation shall be Kensett Fabricators, Inc.
ARTICLE II
The nature of the business or objects or purpose to be transacted,
promoted or carried on are to do any or all of the things herein mentioned
as fully and to the same extent as natural persons might do, and in any
part of the world, viz:
(A) This corporation is formed for and shall have general business
purposes.
(B) In addition, but not in limitation of the above general business
purposes, this corporation shall have the authority:
(1) To let, hold, acquire, mortgage, sell and convey real estate and
personal property necessary or convenient to the foregoing
business, including the right to hold, acquire, mortgage, pledge
or dispose of shares, bonds, securities and other evidences of
indebtedness of any foreign or domestic corporation including
its own, or of individuals; and including the right and
authority to let, hold, acquire, mortgage, sell, convey and
lease to others, real estate and personal property for any
purpose whatsoever.
(2) To apply for, obtain, register, lease, purchase or otherwise to
acquire, and to hold, use, own, operate and introduce and to
sell, assign or otherwise dispose of any trademarks, trade
names, patents, inventions, improvements and processes used in
connection with or secured under the Letters of Patent of the
United States, or elsewhere or otherwise; and to use, exercise,
develop, grant, license in respect of, or otherwise turn to
account any such trademarks, patents, licenses or the like of
any such property or rights.
(3) To hold, purchase or otherwise acquire, to sell, assign,
transfer, mortgage, pledge or otherwise dispose of shares of
capital and bonds, debentures or evidences of indebtedness
created by other corporations, including its own, and while the
holder thereof to exercise all rights and privileges of
ownership including the right to vote thereon.
(4) To do and perform all of those things which are incidental to
the foregoing business.
(5) To do any and all things set forth in this Certificate of
Incorporation and to do all of the things a corporation
organized under the laws of the State of Minnesota to the extent
and as fully as natural persons might do so far as may be
permitted by law. Provided, however, nothing herein contained
shall be deemed to authorize this corporation to carry on
banking business.
ARTICLE III
This corporation shall have perpetual existence.
ARTICLE IV
The location and post office address of its registered office in this
state shall be 712 First Street South, County Road T-62 South, Mclntire,
Iowa 50455, and its registered agent shall be Joel Urch.
ARTICLE V
The aggregate number of shares which this corporation shall have the
authority to issue is 100,000 of the par value of $100.00 each, which
shares shall be designated common shares, which shall be paid in at such
times and in such amounts as the Board of Directors shall determine. No
shareholder shall sell his shares or part with the title thereto except in
the manner provided or to be provided by the By-Laws. The Board of
Directors is authorized to fix or alter from time to time the dividend
rate and the redemption or liquidation price of shares.
ARTICLE VI
(A) The management of this corporation shall be vested in a Board of
Directors composed of not less than one or more than nine members.
(B) The directors and officers of the corporation shall hold their
offices until their successors are elected and qualified.
ARTICLE VII
The Board of Directors is expressly authorized to make, alter, amend
and rescind the ByLaws of the corporation, to designate one or more
committees, each committee to consist of one or more of the Directors of
the corporation, which to the extent provided in the resolution, or in the
By-Laws, shall have and may exercise powers of the Board of Directors in
the management of the business and affairs of the corporation. Such
committee or committees shall have such name or names as may be stated in
the By-Laws of the corporation or as may be determined from time to time
by resolutions adopted by the Board of Directors. The Board of Directors
shall further have the power to fill any vacancy in any executive office
or Board of Directors, until the next annual meeting.
ARTICLE VIII
The name and post office address of the incorporator of this
corporation is: Paul V. Sween, 105 East Oakland Avenue, P.O. Box 366,
Austin, Minnesota 55912.
EXHIBIT 3.16
BY-LAWS
OF
KENSETT FABRICATORS, INC.
Name
(1) The name of this corporation is Kensett Fabricators, Inc.
Office
(2) The principal office of the corporation shall be at Kensett,
Iowa. The corporation may establish and maintain any office or offices at
such other places as the Board of Directors may from time to time appoint,
or the business of the corporation may acquire.
Corporate Seal
(3) The corporate seal of the corporation shall be circular in form
and shall have subscribed thereon the name of the corporation and the
words "Seal", "Corporate", and "Iowa".
Waiver of Notice
(4) Any shareholder, Director, or officer may waive any notice
required to be given under these By-Laws.
Shareholder
(5)(A) All meetings of the shareholders shall be held at the office
of the corporation in Kensett, Iowa, or at such other place as the Board
of Directors may previously determine.
(5)(B) The annual meeting of the shareholders shall be held on the
second Tuesday of March of each year, the first annual meeting to be held
on the second Tuesday of March, 1995, if not a legal holiday, and if a
legal holiday then on the next secular day following at 2:00 o'clock p.m.
when the shareholders shall elect a Board of Directors by plurality vote
by ballot and transact such other business as may be brought before the
meeting.
(5)(C) The holders of the majority of the shares issued and
outstanding present in person or represented by proxy shall be requisite
and shall constitute a quorum at all meetings of the shareholders for the
transaction of business. If, however, such majority shall not be present
at any meeting the shareholders present in person or by proxy shall have
power to adjourn the meeting from time to time without notice other than
announcement at the meeting until the requisite amount of shares shall be
present. At such adjourned meeting at which the requisite amount of
shares shall be represented, any business may be transacted which might
have been transacted at the meeting as originally notified.
(5)(D) At each meeting of the shareholders each shareholder shall be
entitled to vote in person or by proxy, appointed by an instrument in
writing subscribed by such shareholder, and shall have one vote for each
share registered in his name.
(5)(E) Written notice of the annual or a special meeting shall be
mailed to each shareholder at such address as appears on the share book of
the corporation at least seven days prior to the meeting.
(5)(F) Special meetings of the shareholders for any purpose may be
called by the President and shall be called by the President or Secretary
at the request in writing of a majority of the Board of Directors or at
the request in writing of shareholders owning a majority in amount of the
capital shares. Such request shall state the purpose or purposes of the
proposed meeting. Business transacted at the special meeting shall be
confined to the objects stated in the call, which objects shall be set
forth in the notice of special meeting.
Directors
(6)(A) The property and business of the corporation shall be managed
by its Board of Directors, not less than one nor more than nine in number,
who shall be elected annually at the annual meeting and who shall serve
until his successor shall be elected and shall qualify. Said Board of
Directors may exercise all powers of the corporation and do all such
lawful acts and things as are not by statute or by Certificate of
Incorporation or by these By-Laws directed or required to be exercised and
done by the shareholders.
Directors' Meetings
(6)(B) The Board of Directors shall meet at the office of the
corporation immediately following the annual meeting of the shareholders
or otherwise and no notice of such meeting shall be necessary. Special
meetings of the Board may be called by the President on one day's notice
to each Director, either personally or by mail, telegram or telephone.
Special meetings shall be called by the President or the Secretary and on
like notice on written request of two Directors.
(6)(C) At all meetings of the Board a majority of the Board of
Directors shall be necessary and sufficient to constitute a quorum.
(6)(D) A Director may give advance written consent or opposition to
a proposal to be acted on at a Board meeting. If the Director is not
present at the meeting, consent or opposition to a proposal does not
constitute presence for purposes of determining the existence of a quorum,
but consent or opposition shall be counted as a vote in favor or against
the proposal and shall be entered in the minutes or other record of action
at the meeting, if the proposal acted on at the meeting is substantially
the same or has substantially the same effect as the proposal to which the
Director has consented or objected.
(6)(E)(1) A conference among Directors by any means of communication
through which the Directors may simultaneously hear each
other during the conference constitutes a Board meeting, if
the same notice is given of the conference as would be
required by paragraph (6)(B) for a meeting, and if the
number of Directors participating in the conference would
be sufficient to constitute a quorum at a meeting.
Participation in a meeting by that means constitutes
presence in person at the meeting.
(6)(E)(2) A Director may participate in a Board meeting not described
in the preceding paragraph by any means of communication
through which the Director, other Directors so
participating, and all Directors physically present at the
meeting may simultaneously hear each other during the
meeting. Participation in a meeting by that means
constitutes presence in person at the meeting.
Committees
(7) The Board of Directors may, by resolution or resolutions passed
by the Board, designate one or more committees, each committee to consist
of one or more Directors of the corporation, which, to the extent provided
in said resolution or resolutions or by these By-Laws, shall have and may
exercise the powers of the Board of Directors in the management of the
business and affairs of the corporation and may have power to authorize
the seal of the corporation to be affixed to all papers which may require
it. Such committee or committees shall have such name or names as may be
stated in these By-Laws or as may be determined from time to time by a
resolution adopted by the Board of Directors. They shall keep regular
minutes of their meetings and report the same to the Board at each regular
meeting.
Officers
(8)(A) The officers of the corporation shall be chosen by the
Directors and shall be a Chairman, President, one or more Vice Presidents,
Secretary and Treasurer. The Chairman of the Board may hold at the same
time the office of President and any of the officers may hold at the same
time the office of Secretary or Treasurer. These officers shall be chosen
by the Board of Directors at its first meeting after each annual meeting
of the shareholders. The offices of Secretary and Treasurer need not be
held by members of the Board. The Board may appoint such other officers
and agents as it shall deem necessary who shall hold their offices for
such terms and exercise such powers and duties as shall be determined from
time to time by the Board. The Board of Directors shall have the right to
fix the salaries of all officers of the corporation.
(8)(B) The officers of the corporation shall hold office until their
successors are chosen and qualify in their stead. Any officer elected or
appointed by the Board of Directors may be removed at any time by an
affirmative vote of the majority of the Board of Directors. Any vacancy
shall be filled by an affirmative vote of the majority of the Board of
Directors.
Chairman
(8)(C) The Chairman of the Board shall be the Chief Executive
Officer of the corporation. Subject to the control of the Board of
Directors, he shall supervise the President and be responsible, through
the President, for the control of all of the business and affairs of the
corporation. In the absence of the President or otherwise, he shall have
continuing general powers of supervision and management of the
corporation. When present, he shall preside at all meetings of the
shareholders and of the Board of Directors. He shall see that all
resolutions and orders of the Board of Directors and its committees are
carried into effect. He shall have authority to sign, execute and
acknowledge, on behalf of the corporation, all deeds, mortgages, bonds,
stock certificates, contracts, leases, reports and all other documents or
instruments necessary or proper to be executed in the course of the
ordinary business of the corporation, or which shall be authorized by
resolution of the Board of Directors. Except as otherwise provided by law
or the Board of Directors, he also may authorize the President, any Vice
President or other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his place and stead. In
general he shall have the powers of supervision of the business of the
corporation.
President
(8)(D) The President shall be the Chief Operating Officer of the
corporation. Subject to the control of the Board of Directors and the
supervision of the Chairman of the Board, he shall have the general
management and control of the business of the corporation. In the absence
of the Chairman of the Board he may preside at all meetings of the
shareholders and of the Board of Directors. He shall have authority,
subject to such rules as may be prescribed by the Board of Directors, to
appoint such agents and employees of the corporation as he shall deem
necessary, to prescribe their powers, duties and compensation, and to
delegate authority to them. Such agents and employees shall hold office
at the discretion of the President. In the absence of the Chairman of the
Board he shall have authority to sign, execute, and acknowledge on behalf
of the corporation, all deeds, mortgages, bonds, stock certificates,
contracts, leases reports and all other documents or instruments necessary
or proper to be executed in the course of the ordinary business of the
corporation, or which shall be authorized by resolution of the Board of
Directors. Except as otherwise provided by law or the Board of Directors,
in the absence of the Chairman of the Board he may authorize any Vice
President or other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his place and stead. In
general he shall have the powers and duties usually vested in the office
of the president of a corporation, except for those which are vested in
the Chairman of the Board by paragraph (8)(C).
Vice Presidents
(8)(E) A Vice President shall have the powers and duties incident to
that office and shall have such other powers and duties as may be
prescribed by the Chairman of the Board, the President or the Board of
Directors. The Board of Directors may designate a Vice President as the
Chief Financial Officer of the corporation, in which event he shall have
responsibility for all financial matters that affect the corporation other
than those expressly provided for the Treasurer.
Secretary
(8)(F) The Secretary shall attend all sessions of the Board and all
meetings of the shareholders and record all votes and the minutes of all
proceedings in a book to be kept for that purpose and shall perform like
duties for standing committees when required. He shall give or cause to
be given notice of all meetings of shareholders and of the Board of
Directors and shall perform such other duties as may be prescribed by the
Board of Directors, Chairman or the President. He and the President shall
execute bonds, mortgages and other contracts requiring the seal of the
corporation.
Treasurer
(8)(G) The Treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all
monies and other valuable effects in the name and to the credit of the
corporation.
Vacancies
(8)(H) If the office of any Director becomes vacant by reason of
death, resignation, retirement, disqualification, removal or otherwise,
the remaining Directors, by a majority vote, shall choose a successor or
successors who shall hold office until the next annual election and until
a successor has been re-elected unless sooner displaced.
(8)(I) In the case of absence of any officer of the corporation or
for any other reason that the Board may deem sufficient, the Board may
delegate the powers or duties of any of such officers to any Director,
provided a majority of the entire Board concur therein.
Indemnification
(9)(A) The corporation, acting through its Board of Directors or as
otherwise permitted by law, may exercise as fully as may be permitted from
time to time by the statutes and decisional law of the State of Iowa or by
any other applicable rules or principles of law, its power to indemnify
each person acting in an official capacity for the corporation against the
expense of any action to which he is a party or is threatened to be made a
party by reason of the former or present official capacity of the person.
(9)(B) As used in this by-law, the term "official capacity" means:
(a) with respect to a Director, position of Director in a corporation, (b)
with respect to a person other than a Director, the elective or appointive
office or position held by an officer, member of a committee of the Board
or the employment or agency relationship undertaken by an employee or
agent of the corporation, and (c) with respect to a Director, officer,
employee or agent of the corporation who, while a Director, officer,
employee or agent of the corporation, is or was serving at the request of
the corporation or whose duties in that position involve or involved
service as a Director, officer, partner, trustee, or agent of another
organization or employee benefit plan, the position of that person as a
Director, officer, partner, trustee, employee or agent, as the case may
be, of the other organization or employee benefit plan.
(9)(C) If the corporation indemnifies a person in accordance with
this section in connection with a proceeding by or on behalf of the
corporation, it shall report the amount of the indemnification and to whom
and on whose behalf it was paid as part of any annual financial statements
prepared pursuant to the request of a shareholder, covering the period
when the indemnification was paid or accrued under the accounting method
of the corporation reflected in the financial statement.
Certificates of Shares
(10) Share certificates of the corporation shall be numbered
consecutively and shall be entered on the books of the corporation as they
are issued. They shall exhibit the holders' names, number of shares, and
shall be signed by the President or Vice President and the Treasurer or
Secretary. Each certificate shall bear the corporate seal.
Checks and Notes
(11) Checks, drafts, orders for payment of money and promissory notes
shall be signed or endorsed in the name of the corporation by such person
or persons as the Board of Directors by resolution shall from time to time
appoint.
Dividends
(12) Dividends upon the capital shares of the corporation may be
declared by the Board of Directors at any regular or special meeting
pursuant to law. Dividends may be paid in cash, property, or in shares of
capital.
Amendments
(13) These By-Laws may be altered or amended by the Board of
Directors at any meeting by an affirmative vote of the majority of the
whole Board of Directors. They may also be altered or amended at any
meeting of the shareholders by the affirmative vote of a majority of the
shares issued and outstanding.
EXHIBIT 3.17
ARTICLES OF INCORPORATION
OF
MCNEILUS FINANCIAL, INC.
I, the undersigned natural person of the age of twenty-one (21)
years or more, a citizen of the State of Texas, acting as incorporator of
a corporation under the Texas Business Corporation Act, do hereby adopt
the following Articles of Incorporation for such corporation.
ARTICLE I
The name of the corporation is McNeilus Financial, Inc.
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The purpose or purposes for which the corporation is organized
are:
The transaction of any or all lawful business for
which corporations may be incorporated under the Texas
Business Corporation Act.
ARTICLE IV
The aggregate number of shares which the corporation shall have
authority to issue is 500,000 with a par value of $10.00 each. Each share
of stock shall have identical rights and privileges in every respect.
ARTICLE V
The corporation will not commence business until it has received
for the issuance of its shares consideration of the value of ONE THOUSAND
DOLLARS ($1,000.00), consisting of money, labor done, or property actually
received.
ARTICLE VI
No shareholder or other person shall have any preemptive right
whatsoever.
ARTICLE VII
Except to the extent such power may be modified or divested by
an action of the shareholders representing the majority of the issued and
outstanding shares of the capital stock of the corporation taken at any
regular or special meeting of the shareholders, the power to adopt, alter,
amend or repeal the by-laws of the corporation shall be vested in the
board of directors.
ARTICLE VIII
Cumulative voting is expressly prohibited.
ARTICLE IX
The post office address of the initial registered office of the
corporation is 1101 Interstate 45 South, Hutchins, Texas 75141, and the
name of its initial registered agent at such address is David P.
Henderson.
ARTICLE X
The number of directors constituting the initial board of
directors is three (3), and the names and addresses of the persons who are
to serve as directors until the first annual meeting of the shareholders,
or until their successors are elected and qualified are:
Name Address
David P. Henderson 1101 Interstate 45 South
Hutchins, Texas 75141
Garwin McNeilus P.O. Box 70
Dodge Center, Minnesota 55925
George Guler P.O. Box 70
Dodge Center, Minnesota 55925
ARTICLE XI
The names and addresses of the incorporators are:
Name Address
David P. Henderson 1101 Interstate 45 South
Hutchins, Texas 75141
EXHIBIT 3.18
MCNEILUS FINANCIAL, INC.
BY-LAWS
ARTICLE I.
OFFICES
1.01 Registered Office and Agent. The registered office and
registered agent of the corporation shall be as designated with the
Secretary of State of the State of Texas, as they may be changed from time
to time.
1.02 Other Offices. The corporation may also have offices at such
other places both within and without the State of Texas as the board of
directors may from time to time determine, or as the business of the
corporation may require.
ARTICLE II.
SHAREHOLDERS
2.01 Place and Manner of Meetings. All meetings of the shareholders
shall be held at such time and place, within or without the State of
Texas, as shall be stated in the notice of the meeting or in a duly
executed waiver of notice thereof. Shareholders may participate in such
meetings by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other, and participation in a meeting as provided herein shall
constitute presence in person at such meeting, except where a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
2.02 Annual Meeting. An annual meeting of the shareholders,
commencing with the year following the adoption of these by-laws, shall be
held on the third Monday during the month of March, if not a legal
holiday, and if a legal holiday, then on the next secular day following,
at 10:00 o'clock A.M., or at such other date and time as shall be
designated from time to time by the board of directors and stated in the
notice of the meeting, at which time the shareholders hall elect a board
of directors, and transact such other business as may properly be brought
before the meeting.
2.03 Voting List. At least ten days before each meeting of
shareholders a complete list of the shareholders entitled to vote at the
meeting, arranged in alphabetical order, with the residence of each and
the number of voting shares held by each, shall be prepared by the officer
or agent having charge of the stock transfer books. Such list, for a
period of ten days prior to the meeting, shall be kept on file at the
registered office of the corporation and shall be subject to inspection by
any shareholder at any time during usual business hours. Such list shall
also be produced and kept open at the time and place of the meeting during
the whole time thereof, and shall be subject to the inspection of any
shareholder who may be present.
2.04 Special Meetings. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
articles of incorporation, or by these by-laws, may be called by the
president, the board of directors, or the holders of not less than one-
tenth of all the shares entitled to vote at the meetings. Business
transacted at all special meetings shall be confined to the objects stated
in the notice of the meeting.
2.05 Notice. Written or printed notice stating the place, day and
hour of the meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than
ten nor more than fifty days before the date of the meeting either
personally or by mail, by or at the direction of the president, the
secretary or the officer or person calling the meeting, to each
shareholder of record entitled to vote at the meeting, provided that such
notice may be waived as provided in Section 5.02 of these by-laws. If
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail addressed to the shareholder at his address as it
appears on the stock transfer books of the corporation, with postage
thereon prepaid.
2.06 Quorum. The holders of a majority of the shares issued and
outstanding and entitled to vote thereat, present in person or represented
by proxy, shall be requisite and shall constitute a quorum at all meetings
of the shareholders for the transaction of business except as otherwise
provided by statue, by the articles of incorporation or by these by-laws.
If a quorum is not present or represented at a meeting of the
shareholders, the shareholders entitled to vote thereat, present in person
or represented by proxy, shall have power to adjourn the meeting from time
to time, until a quorum is present or represented. At such adjourned
meeting at which a quorum is present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified.
2.07 Majority Vote; Withdrawal of Quorum. When a quorum is present
at any meeting, the vote of the holders of a majority of the shares having
voting power, present in person or represented by proxy, shall decide any
question brought before such meeting, unless the question is one upon
which, by express provision of the statutes or of the articles of
incorporation, or of these by-laws, a different vote is required, in which
case such express provision shall govern and control the decision of such
question. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
2.08 Method of Voting. Each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders, except to the extent that the voting rights of
the shares of any class or classes are limited or denied by the articles
of incorporation. At any meeting of the shareholders each shareholder
having the right to vote may vote either in person or by proxy executed in
writing by the shareholder or by his duly authorized attorney-in-fact, and
being dated not more than eleven months prior to or at the time of the
meeting. Voting for directors shall be in accordance with Section 3.06 of
these by-laws. Any vote may be taken viva voce or by show of hands unless
someone entitled to vote objects, in which case written ballots shall be
used.
2.09 Record Date; Closing Transfer Books. The board of directors may
fix in advance a record date for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of the shareholders, the
record date to be not less than ten nor more than fifty days prior to said
meeting; or the board of directors may close the stock transfer books for
such purpose for a period of not less than ten nor more than fifty days
prior to such meeting. IN the absence of any action by the board of
directors, the date upon which the notice of the meeting is mailed shall
be the record date.
2.10 Action Without Meeting. Any action required by statute to be
taken at a meeting of the shareholders, or any action which may be taken
at a meeting of the shareholders, may be taken without a meeting if a
consent in writing setting forth the action so taken, shall be signed by
all of the shareholders entitled to vote with respect to the subject
matter thereof, and such consent shall have the same force and effect as a
unanimous vote of the shareholders.
ARTICLE III.
DIRECTORS
3.01 Management. The business and affairs of the corporation shall
be managed by the board of directors who may exercise all such powers of
the corporation and do all such lawful acts and things as are not by
statute or by the articles of incorporation or by these by-laws directed
or required to be exercised or done by the shareholders.
3.02 Number; Qualification; Election; Term. The number of directors
which shall constitute the whole board shall be not less than one (1) nor
more than nine (9). The number of directors which shall constitute the
initial board of directors shall be the number fixed by the articles of
incorporation. Thereafter, within the limits above specified, the number
of directors shall be determined by resolution of the board of directors.
3.03 Change in Number. the number of directors may be increased or
decreased from time to time as provided for in Section 3.02 by amendment
to these by-laws but no decrease shall have the effect of shortening the
term of any incumbent director. Any directorship to be filled by reason
of an increase in the number of directors shall be filled by election at
an annual meeting or at a special meeting of shareholders called for that
purpose.
3.04 Removal. Any director may be removed either for or without
cause at any special or annual meeting of shareholders, by the affirmative
vote of a majority in number of shares of the shareholders present in
person or by proxy at such meeting and entitled to vote for the election
of such director if notice of intention to act upon such matter shall have
been given in the notice calling such meeting.
3.05 Vacancies. Any vacancy occurring in the board of directors (by
death, resignation, retirement, removal or otherwise) may be filled by an
affirmative vote of a majority of the directors then in office, thought
less than a quorum of the board of directors. A director elected to fill
a vacancy shall be elected for the unexpired term of this predecessor in
office.
3.06 Election of Directors. Directors shall be elected by plurality
vote. Cumulative voting shall not be permitted.
3.07 Place and Manner of Meeting. Meetings of the board of
directors, regular or special, may be held either within or without the
State of Texas. Members of the board of directors may participate in such
meetings by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear either other and participation in a meeting as provided herein shall
constitute presence in person at such meeting, except where a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
3.08 First Meetings. The first meeting of each newly elected board
shall be held without further notice immediately following the annual
meeting of shareholders, and at the same place, unless by unanimous
consent of the directors then elected and serving such time or place shall
be changed.
3.09 Regular Meetings. Regular meetings of the board of directors
may be held without notice at such time and place as shall from time to
time be determined by the board.
3.10 Special Meetings. Special meetings of the board of directors
may be called by the president on three days' notice to each director,
either personally or by mail or by telegram. Special meetings shall be
called by the president or secretary in like manner and on like notice on
the written request of two directors. Except as otherwise expressly
provided by statute, or by the articles of incorporation, or by these by-
laws, neither the business to be transacted at, nor the purpose of, any
special meeting need be specified in a notice or waiver of notice.
3.11 Action Without Meeting. Any action required by statute to be
taken at a meeting of the board of directors, or any action which may be
taken at a meeting of the board of directors, may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall
be signed by all the members of the board of directors. Such consent
shall have the same force and effect as a unanimous vote at a meeting.
3.12 Quorum; Majority Vote. At all meetings of the board of
directors a majority of the number of directors fixed by these by-laws
shall constitute a quorum for the transaction of business unless a greater
number is required by law or by the articles of incorporation. The act of
a majority of the directors present at any meeting at which a quorum is
present shall be the act of the board of directors unless the act of a
greater number is required by statute, by the articles of incorporation or
by these by-laws. If a quorum shall not be present at any meeting of the
board of directors, the directors present thereat may adjourn the meeting
from time to time, without, without notice other than announcement at the
meeting, until a quorum is present.
3.13 Compensation. By resolution of the board of directors, the
directors may be paid their expenses, if any, of attendance at each
meeting of the board of directors and may be paid a fixed sum for
attendance at each meeting of the board of directors or a stated salary as
director. Not such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
Members of the executive committee or of special or standing committees
may, by resolution of the board of directors, be allowed like compensation
for attending committee meetings.
3.14 Procedure. The board of directors shall keep regular minutes of
its proceedings. The minute shall be placed in the minute book of the
corporation.
3.15 Interested Directors, Officers and Shareholders.
(A) Validity. Any contract or other transaction between the
corporation and any of its directors, officers or shareholders (or any
corporation or firm in which any of them are directly or indirectly
interested) shall be valid for all purposes notwithstanding the presence
of such director, officer or shareholder at the meeting authorizing such
contract or transaction or his participation in such meeting or
authorization.
(B) Disclosure, Approval. The foregoing shall, however, apply only
if the interest of each such director, officer or shareholder is know or
disclosed:
1. To the board of directors and it nevertheless authorizes or
ratifies the contract or transaction by a majority of the directors
present, each such interested director to be counted in determining
whether a quorum is present but not in calculating the majority necessary
to carry the vote; or
2. To the shareholders and they nevertheless authorize or
ratify the contract or transaction by a majority of the shares present,
each such interested person to be counted for quorum and voting purposes.
(C) Non-Exclusive. This provision shall not be construed to
invalidate any contract or transaction which would be valid in the absence
of this provision.
ARTICLE IV.
EXECUTIVE COMMITTEE
4.01 Designation. The board of directors may, by resolution adopted
by a majority of the whole board, designate an executive committee, to
consist of two or more of the directors of the corporation.
4.02 Authority. The executive committee, to the extent provided in
such resolution, shall have any may exercise all of the authority of the
board of directors in the management of the business and affairs of the
corporation, except where action of the full board of directors is
required by statute or by the articles of incorporation, and shall have
power to authorize the seal of the corporation to be affixed to all papers
which may require it.
4.03 Procedure. The executive committee shall keep regular minutes
of its proceedings and report the same to the board of directors when
required.
4.04 Removal. Any member of the executive committee may be removed
by the board of directors by the affirmative vote of a majority of the
whole board, whenever in its judgement the best interest of the
corporation will be served thereby.
4.05 Responsibility. The designation of an executive committee and
the delegation of authority to it shall not operate to relieve the board
of directors, or any member thereof, of any responsibility imposed upon it
or him by law.
ARTICLE V.
NOTICE
5.01 Method. Whenever by statute or the articles of incorporation or
these by-laws, notice is required to be given to any shareholder or
director, and no provision is made as to how the notice shall be given, it
shall not be construed to mean personal notice, but nay such notice may be
given in writing, postage prepaid, addressed to the director or
shareholder at the address appearing on the books of the corporation, or
in any other method permitted by law. Any notice required or permitted to
be given by mail shall be deemed given at the time when the same is thus
deposited in the United States mails. Notice to directors may also be
given by telegram, with such notice being deemed to have been given when
the telegram is delivered to the telegraph company.
5.02 Waiver. Whenever, by statute or the articles of incorporation
or these by-laws, notice is required to be given to any shareholder or
director, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated in such
notice, shall be equivalent to the giving of such notice. Attendance of a
director at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends for the express purpose of objecting to
the transaction of any business on the grounds that the meeting is not
lawfully called or convened.
ARTICLE VI.
OFFICERS
6.01 Number. The officers of the corporation shall consist of a
chairman, president, one or more vice-presidents, a secretary and a
treasurer, each of whom shall be elected by the board of directors. Any
two or more offices may be held by the same person, except that the
president and secretary shall not be the same person.
6.02 Election. The board of directors, at its first meeting after
each annual meeting of shareholders, shall choose a chairman, president,
one or more vice-presidents, a secretary and a treasurer, none of whom
need be a member of the board, a shareholder, or a resident of Texas.
6.03 Other Officers. The board of directors may elect or appoint
such other officers and agents as it shall deem necessary, who shall be
appointed for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the board.
6.04 Term. Each officer of the corporation shall hold office until
his successor is chosen and qualified in his stead or until his death or
until his resignation or removal from office.
6.05 Removal. Any officer or agent or member of a committee elected
or appointed by the board of directors may be removed by the board of
directors whenever in its judgment the best interests of the corporation
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or
appointment of an officer or agent or member of a committee shall not of
itself create contract rights.
6.06 Vacancies. Any vacancy in any office because of death,
resignation, removal or otherwise, may be filled by the board of directors
for the unexpired portion of the term.
6.07 Compensation. The compensation of all officers and agents shall
be fixed by the board of directors.
6.08 Chairman of the Board. The chairman of the board shall be the
chief executive officer of the corporation. Subject to the control of the
board of directors, he shall supervise the president and be responsible,
through the president, for the control of all of the business and affairs
of the corporation. In the absence of the president or otherwise, he
shall have continuing general powers of supervision and management of the
corporation. When present, he shall preside at all meetings of the
shareholders and of the board of directors. He shall see that all
resolutions and orders of the board of directors and its committees are
carried into effect. He shall have authority to sign, execute and
acknowledge, on behalf of the corporation, all deeds, mortgages, bonds,
stock certificates, contracts, leases, reports and all other documents or
instruments necessary or proper to be executed in the course of the
ordinary business of the corporation, or which shall be authorized by
resolution of the board of directors. Except as otherwise provided by law
or the board of directors, he also may authorize the president, any vice-
president or other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his place and stead. In
general he shall have the powers of supervision of the business of the
corporation.
6.09 President. The president shall be the chief operating
officer of the corporation. Subject to the control of the board of
directors and the supervision of the chairman of the board, he shall have
the general management and control of the business of the corporation. In
the absence of the chairman of the board he may preside at all meetings of
the shareholders and of the board of directors. He shall have authority,
subject to such rules as may be prescribed by the board of directors, to
appoint such agents and employees of the corporation as he shall deem
necessary, to prescribe their powers, duties and compensation, and to
delegate authority to them. Such agents and employees shall hold office
at the discretion of the president. In the absence of the chairman of the
board he shall have authority to sign, execute, and acknowledge on behalf
of the corporation, all deeds, mortgages, bonds, stock certificates,
contracts, leases reports and all other documents or instruments necessary
or proper to be executed in the course of the ordinary business of the
corporation, or which shall be authorized by resolution of the board of
directors. Except as otherwise provided by law or the board of directors,
in the absence of the chairman of the board he may authorize any vice-
president or other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his place and stead. In
general he shall have the powers and duties usually vested in the office
of the president of a corporation, except for those which are vested in
the chairman of the board by Section 6.08.
6.10 Vice-President. The vice-presidents in the order of their
seniority, unless otherwise determined by the board of directors shall, in
the absence or disability of the president, perform the duties and have
the authority and exercise the powers of the president. The board of
directors may designate a vice-president as the chief financial officer
of the corporation, in which event he shall have responsibility for
financial matters that affect the corporation other than those expressly
provided for the treasurer. They shall perform such other duties and have
such other authority and powers as the board of directors may from time to
time prescribe or as the chairman or president may from time to time
delegate.
6.11 Secretary. The secretary shall attend all sessions of the board
of directors and all meetings of the shareholders and record all votes and
the minutes of all proceedings in a book to be kept for that purpose and
shall perform like duties for the executive committee when required. He
shall give, or cause to be given, notice of the meetings of the board of
directors and shareholders where such notices are required by these by-
laws to be given. He shall keep in safe custody the seal of the
corporation, and when authorized by the board or the executive committee,
affix the same to any instrument requiring it and, when so affixed, it
shall be attested by his signature or by the signature of the treasurer or
an assistant secretary.
6.12 Treasurer.
(A) The treasurer shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements of the corporation, and shall deposit all moneys and other
valuable effects in the name and to the credit of the corporation in such
depositories as may be designated by the board of directors.
(B) He shall disburse the funds of the corporation as may be ordered
by the board of directors, taking proper vouchers for such disbursements,
and shall render to the president and directors, at the regular meetings
of the board, or whenever they may require it, an account of all his
transactions as treasurer and of the financial condition of the
corporation.
(C) If required by the board of directors, he shall give the
corporation a bond in such form, in such sum and with such surety or
sureties as shall be satisfactory to the board for the faithful
performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money, or other property of
whatever kind in his possession or under his control belonging to the
corporation.
(D) He shall perform such other duties and have such other authority
and powers as the board of directors may from time to time prescribe, or
as the chairman or president may from time to time delegate.
6.13 Assistant Treasurer. The assistant treasurers in the order of
their seniority, unless otherwise determined by the board of directors,
shall, in the absence or disability of the treasurer, perform the duties
and have the authority and exercise the powers of the treasurer. They
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe or the president may from time
to time delegate.
6.14 Filling of Offices. The board of directors of the corporation
shall not be required to fill the offices of vice president, assistant
secretary, and assistance treasurer, or to name an executive committee
until, in the opinion of the board, there is a need for such offices, or
any of them, to be filled.
ARTICLE VII.
CERTIFICATES AND SHAREHOLDERS
7.01 Certificates. Certificates in the form determined by the board
of directors shall be delivered representing all shares to which
shareholders are entitled. Such certificates shall be consecutively
numbered, and shall be entered in the books of the corporation as they are
issued. Each certificate shall state on the face thereof the holder's
name, the number and class of shares, the par value of shares or a
statement that such shares are without par value, and such other matters
as may be required by the laws of the State of Texas. They shall be
signed by the president or a vice-president and the secretary or assistant
secretary, and may be sealed with the seal of the corporation or a
facsimile thereof. If any certificate is countersigned by a transfer
agent or registered by a registrar other than the corporation or an
employee of the corporation, the signature of such officer may be a
facsimile.
7.02 Replacement of Lost or Destroyed Certificates. The board of
directors may direct a new certificate representing shares to be issued in
place of any certificate theretofore issued by the corporation alleged to
have been lost or destroyed upon the making of an affidavit of that fact
by the person claiming the certificate to be lost or destroyed. When
authorizing such issue of a new certificate, the board of directors, in
its discretion and as a condition precedent to the issuance thereof, may
prescribe such terms and conditions as it deems expedient, and may require
such indemnities as it deems adequate, to protect the corporation from any
claim that may be made against it with respect to any such certificate
alleged to have been lost or destroyed.
7.03 Transfer of Shares. Shares of stock shall be transferable only
on the books of the corporation by the holder thereof in person or by his
duly authorized attorney. Upon surrender, to the corporation or its
transfer agent, of a certificate representing shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, the corporation or its transfer agent shall issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
7.04 Registered Shareholders. The corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder
in fact thereof, and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the
part of any other person, whether or not it has express or other notice
thereof, except as otherwise provided by law.
7.05 Preemptive Rights. No shareholder or any other person shall
have any preemptive right whatsoever.
ARTICLE VIII.
GENERAL PROVISIONS
8.01 Dividends and Reserves.
(A) Declaration and Payment. Subject to statute and the articles of
incorporation, dividends may be declared by the board of directors at any
regular or special meeting and may be paid in cash, in property, or in
shares of the corporation. The declaration and payment shall be at the
discretion of the board of directors.
(B) Record Date. The board of directors may fix in advance a record
date for the purpose of determining shareholders entitled to receive
payment of any dividend, such record date to be not more than fifty (50)
days prior to the payment date of such dividend. In the absence of any
action by the board of directors, the date upon which the board of
directors adopts the resolution declaring the dividend shall be the record
date.
(C) Reserves. By resolution the board of directors may create such
reserve or reserves out of the earned surplus of the corporation as the
directors from time to time, in their discretion, think proper to provide
for contingencies, or to equalize dividends, or to repair or maintain any
property of the corporation, or for any other purpose they think
beneficial to the corporation, and the directors may modify or abolish any
such reserve in the manner in which it was created.
8.02 Books and Records. The corporation shall keep correct and
complete books and records of account and shall keep minutes of the
proceedings of its shareholders and board of directors, and shall keep at
its registered office or principal place of business, or at the office of
its transfer agent or registrar, a record of its shareholders, giving the
names and addresses of all shareholders and the number and class of the
shares held by each.
8.03 Checks and Notes. All checks or demands for money and notes of
the corporation shall be signed by such officer or officers or such other
person or persons as the board of directors may from time to time
designate.
8.04 Fiscal Year. The fiscal year of the corporation shall be fixed
by resolution of the board of directors.
8.05 Seal. The corporate seal shall have inscribed thereon the name
of the corporation and shall be in such form as the board of directors may
prescribe. Said seal may be used by causing it or a facsimile thereof to
be impressed or affixed or reproduced otherwise.
8.06 Indemnification.
(A) Extent - Nonderivative Suits. The corporation shall indemnify
every person who is or was a party or is or was threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (if not by or in
the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, agent or
employee or in any other capacity of or in another corporation, or a
partnership, joint venture, trust or other enterprise, or by reason of any
action alleged to have been taken or not taken by him while acting in any
such capacity, against expenses (including attorneys' fees), amounts paid
in settlement (whether with or without court approval), judgements and
fines actually and reasonably incurred by him in connection with such
threatened or actual action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the corporation, and with respect to any criminal action
or proceeding, if he had no reasonable cause to believe that his conduct
was unlawful. The termination of any threatened or actual action, suit or
proceeding by a settlement or by an adverse judgment or order a
conviction; or upon a plea of guilty or of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be
in, or not opposed to, the best interests of the corporation, and, with
respect to any criminal action or proceeding, that he had reasonable cause
to believe that his conduct was unlawful.
(B) Extent - Derivative Suits. The corporation shall indemnify
every person who is or was a party or is or was threatened to be made a
party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent or in any other capacity of or in
another corporation, or a partnership, joint venture, trust or other
enterprise, or by reason of any action alleged to have been taken or not
taken by him while acting in any such capacity, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such threatened, pending or
completed action or suit if the acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation. The termination of any such threatened or actual action or
suit by a settlement or by an adverse judgment or order shall not of
itself, create a presumption that the person did not act in good faith and
in a manner which he reasonably believed to be in, or not opposed to, the
best interests of the corporation. Nevertheless, there shall be no
indemnification with respect to expenses incurred in connection with any
claim, issue or matter as to which such person shall have been adjudged to
be liable for negligence or misconduct in the performance of his duty to
the corporation unless, and only to the extent that, the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity
for such expenses as such court shall deem proper.
(C) Absolute Right. To the extend that a director, officer,
employee or agent of the corporation, or a person serving in any other
enterprise at the request of the corporation, shall have been successful
on the merits or otherwise in defending against any threatened or actual
action, suite or proceeding referred to in paragraph (A) of this Section
8.06 or any threatened or actual action or suit referred to in paragraph
(B) of this Section 8.06, or in defense of any claim, issue or matter
therein, he shall be indemnified against all expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
(D) Determination That Standard Has Been Met. Any indemnification
under paragraph (A) of this Section 8.06, or under paragraph (B) of this
Section 8.06 (unless ordered by a court), shall be made by the corporation
only as authorized in the specific cases upon a determination that
indemnification is proper in the circumstances because the person claiming
indemnification has met the applicable standard of conduct set forth in
such paragraphs. Such determination shall be made by the board of
directors by a majority vote of a quorum consisting of disinterested
directors, or, if such a quorum is not obtainable, or, even if obtainable
a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or by the shareholders.
(E) Advance Payment. The amount of any expenses incurred by a
person in defending any threatened or actual action, suit or proceeding
referred to in paragraph (A) of this Section 8.06 or any threatened or
actual action or suit referred to in paragraph (B) of this Section 8.06
may be advanced to or for the benefit of such person by the corporation
prior to the final disposition thereof as authorized by the board of
directors in the specific case upon the receipt of an undertaking by or on
behalf of such person to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the corporation.
(F) Nonexclusive; Continuation. The indemnification provided by
this Section 8.06 shall not be deemed exclusive of any other rights to
which the person claiming indemnification may be entitled under any
agreement, any vote of shareholders or disinterested directors of the
corporation, or otherwise, both as to any action in his official capacity
and as to any action in another capacity while holding such office, and
shall continue as to a person who shall have ceased to be a director,
officer, employee or agent of the corporation or engaged in any other
enterprise at the request of the corporation and shall inure to the
benefit of the heirs, executors and administrators of such person.
(G) Insurance. The corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent or in
any other capacity of or in another corporation, or a partnership, joint
venture, trust or other enterprise against any liability asserted against
him an incurred by him in any such capacity, or arising out of his status
as such, whether or not he is indemnified against such liability by the
provision of this Section 8.06.
8.07 Resignation. Any director, officer or agent may resign by
giving written notice to the president or the secretary. The resignation
shall take effect at the time specified therein. Unless otherwise
specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
8.08 Amendment of By-Laws. These by-laws may be repealed, altered or
amended at any meeting of the board of directors at which a quorum is
present, by the affirmative vote of a majority of the directors present at
such meeting, provided notice of the proposed repeal, alteration or
amendment is contained in the notice of such meeting.
8.09 Table of Contents; Headings. The table of contents and headings
used in these by-laws have been inserted for convenience only and do not
constitute matter to be construed in interpretation.
8.10 Construction. Whenever the context so requires, the masculine
shall include the feminine and neuter, and the singular shall include the
plural, and conversely. If any portion of these by-laws shall be invalid
or inoperative, then, so far as is reasonable and possible:
(A) The remainder of these by-laws shall be considered valid and
operative; and
(B) Effect shall be given to the intent manifested by the portion
held invalid or inoperative.
(Face of Note)
CUSIP 688239 AC 6
8 3/4% Senior Subordinated Notes due 2008
No. _____ $__________
OSHKOSH TRUCK CORPORATION
promises to pay to ____________________________________________ or
registered assigns, the principal sum of _________________ Dollars on
March 1, 2008.
Interest Payment Dates: March 1 and September 1
Record Dates: February 15 and August 15
OSHKOSH TRUCK CORPORATION
By:______________________________
Name:
Title:
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
FIRSTAR TRUST COMPANY,
as Trustee
By:_________________________ Dated: __________, 199__
<PAGE>
(Back of Note)
8 3/4% Senior Subordinated Notes due 2008
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT
OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON
UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE
INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY
BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF
THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. Interest. Oshkosh Truck Corporation, a Wisconsin
corporation (the "Company"), promises to pay interest on the principal
amount of this Note at 8 3/4% per annum from the date hereof until
maturity and shall pay the Liquidated Damages payable pursuant to Section
5 of the Registration Rights Agreement referred to below. The Company
will pay interest and Liquidated Damages semi-annually on March 1 and
September 1 of each year, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date"). Interest
on the Notes will accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from the date of issuance;
provided that if there is no existing Default in the payment of interest,
and if this Note is authenticated between a record date referred to on the
face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further,
that the first Interest Payment Date shall be September 1, 1998. The
Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1% per annum in excess
of the rate then in effect; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages (without regard to any
applicable grace periods) from time to time on demand at the same rate to
the extent lawful. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the
Notes (except defaulted interest) and Liquidated Damages to the Persons
who are registered Holders of Notes at the close of business on the
February 15 or August 15 next preceding the Interest Payment Date, even if
such Notes are cancelled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.12 of the Indenture
with respect to defaulted interest. The Notes will be payable as to
principal, premium and Liquidated Damages, if any, and interest at the
office or agency of the Company maintained for such purpose within or
without the City and State of New York, or, at the option of the Company,
payment of interest and Liquidated Damages may be made by check mailed to
the Holders at their addresses set forth in the register of Holders, and
provided that payment by wire transfer of immediately available funds will
be required with respect to principal of and interest, premium and
Liquidated Damages on, all Global Notes and all other Notes the Holders of
which shall have provided wire transfer instructions to the Company or the
Paying Agent. Such payment shall be in such coin or currency of the
United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Firstar Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture
dated as of February 26, 1998 ("Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act
of 1939, as amended (15 U.S. Code Section Section 77aaa-77bbbb). The
Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the
Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are general unsecured obligations of the Company
limited to $150.0 million in aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this
Paragraph 5, the Company shall not have the option to redeem the Notes
prior to March 1, 2003. Thereafter, the Company shall have the option to
redeem the Notes, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages thereon to the applicable redemption date, if redeemed
during the twelve-month period beginning on March 1 of the years indicated
below:
Year Percentage
2003 . . . . . . . . . . . . . 104.375%
2004 . . . . . . . . . . . . . 102.917%
2005 . . . . . . . . . . . . . 101.458%
2006 and thereafter . . . . . . 100.000 %
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to March 1, 2001, the Company may on any
one or more occasions redeem up to 35% of the aggregate principal amount
of the Initial Notes at a redemption price equal to 108.750% of the
principal amount thereof, plus accrued and unpaid Liquidated Damages
thereon, if any, to the applicable redemption date, with the net cash
proceeds of one or more public offerings of common stock of the Company;
provided that Notes in an aggregate principal amount of at least 65% of
the aggregate principal amount of the Notes issued on the date of the
Indenture remain outstanding immediately after the occurrence of such
redemption (excluding Initial Notes held by the Company and its
Subsidiaries); and provided, further, that such redemption shall occur
within 45 days of the date of the closing of such public offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not
be required to make mandatory redemption payments with respect to the
Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all
or any part (equal to $1,000 or an integral multiple thereof) of each
Holder's Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase (the "Change of Control Payment"). Within 30 days
following any Change of Control, the Company shall mail a notice to each
Holder setting forth the procedures governing the Change of Control Offer
as required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales,
within five days of each date on which the aggregate amount of Excess
Proceeds exceeds $10.0 million, the Company shall commence an offer (pro
rata in proportion to the principal amount (or accreted value, if
applicable) outstanding in respect of any Asset Sale offer required by the
terms of any pari passu Indebtedness incurred in accordance with this
Indenture) to all Holders of Notes (as "Asset Sale Offer") pursuant to
Section 3.09 of the Indenture to purchase the maximum principal amount of
Notes (including any Additional Notes) that may be purchased out of the
Excess Proceeds at an offer price in cash in an amount equal to 100% of
the principal amount thereof plus accrued and unpaid interest, if any, to
the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company may use such deficiency for any purpose not
otherwise prohibited by the Indenture. If the aggregate principal amount
of Notes surrendered by Holders thereof (and any pari passu Indebtedness
as aforesaid) exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes to be purchased on a pro rata basis. Holders of Notes
that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related purchase date and may elect to
have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the redemption date to
each Holder whose Notes are to be redeemed at its registered address.
Notes in denominations larger than $1,000 may be redeemed in part but only
in whole multiples of $1,000, unless all of the Notes held by a Holder are
to be redeemed. On and after the redemption date interest ceases to
accrue on Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder
to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Note or
portion of a Note selected for redemption, except for the unredeemed
portion of any Note being redeemed in part. Also, the Company need not
exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.
10. SUBORDINATION. The Notes are subordinated in right of
payment, to the extent and in the manner provided in Article 10 of the
Indenture, to the prior payment in full in cash or Cash Equivalents of all
Senior Debt. To the extent provided in the Indenture, Senior Debt must be
paid before the Notes may be paid. The Company agrees and each Holder of
Notes by accepting a Note consents and agrees to the subordination
provided in the Indenture and authorizes the Trustee to give it effect.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may
be treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Subsidiary Guarantees or the Notes may be
amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Notes and Additional
Notes, if any, voting as a single class, and any existing default or
compliance with any provision of the Indenture, the Subsidiary Guarantees
or the Notes may be waived with the consent of the Holders of a majority
in principal amount of the then outstanding Notes and Additional Notes, if
any, voting as a single class. Without the consent of any Holder of a
Note, the Indenture, the Subsidiary Guarantees or the Notes may be amended
or supplemented to cure any ambiguity, defect or inconsistency, to provide
for uncertificated Notes in addition to or in place of certificated Notes,
to provide for the assumption of the Company's or Subsidiary Guarantor's
obligations to Holders of the Notes in case of a merger or consolidation,
to make any change that would provide any additional rights or benefits to
the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, to comply with the
requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act, to provide
for the Issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, or to allow any Subsidiary Guarantor to
execute a supplemental indenture to the Indenture and/or a Subsidiary
Guarantee with respect to the Notes.
13. DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest or Liquidated
Damages on the Notes; (ii) default in payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to
purchase) or otherwise, (iii) failure by the Company to comply with
Section 4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by
the Company for 60 days after notice to the Company by the Trustee or the
Holders of at least 25% in principal amount of the Notes (including
Additional Notes, if any) then outstanding voting as a single class to
comply with certain other agreements in the Indenture or the Notes; (v)
default under certain other agreements relating to Indebtedness of the
Company which default results in the acceleration of such Indebtedness
prior to its express maturity; (vi) certain final judgments for the
payment of money that remain undischarged for a period of 60 days; (vii)
except as permitted by the Indenture, any Subsidiary Guarantee shall be
held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Subsidiary
Guarantor or any Person acting on its behalf shall deny or disaffirm its
obligations under such Subsidiary Guarantor's Subsidiary Guarantee; and
(viii) certain events of bankruptcy or insolvency with respect to the
Company or any of its Significant Subsidiaries. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes
to be due and payable. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Notes will become due and payable without further action
or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in
their interest. The Holders of a majority in aggregate principal amount
of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest on, or the
principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and
the Company is required upon becoming aware of any Default or Event of
Default, to deliver to the Trustee a statement specifying such Default or
Event of Default.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or of any Subsidiary
Guarantor, as such, shall not have any liability for any obligations of
the Company under the Notes or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Notes.
16. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right
of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED CERTIFICATED NOTES. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global Notes
and Restricted Certificated Notes shall have all the rights set forth in
the Registration Rights Agreement dated as of February 26, 1998, between
the Company and the parties named on the signature pages thereof (the
"Registration Rights Agreement").
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company
has caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders.
No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed
thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Oshkosh Truck Corporation
P.O. Box 2566
Oshkosh, Wisconsin 54903-2566
Attention: Chief Financial Officer
<PAGE>
Assignment Form
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________
________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________
to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
________________________________________________________________________
Date:_______________ Your Signature:________________________________
(Sign exactly as your name appears on the Note)
SIGNATURE
GUARANTEE
_____________________________________________
Signatures must be guaranteed by an "eligible
guarantor Institution" meeting the requirements
of the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may
be determined by the Registrar in addition to, or
in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
<PAGE>
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate
box below:
[__] Section 4.10 [__] Section 4.15
If you want to elect to have only part of the Note purchased by
the Company pursuant to Section 4.10 or Section 4.15 of the Indenture,
state the amount you elect to have purchased: $___________
________________________________________________________________________
Date:_______________ Your Signature:_______________________________
(Sign exactly as your name appears on the Note)
Tax Identification No.:
SIGNATURE
GUARANTEE
_____________________________________________
Signatures must be guaranteed by an "eligible
guarantor Institution" meeting the requirements
of the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may
be determined by the Registrar in addition to, or
in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
<PAGE>
SCHEDULE OF EXCHANGES OF GLOBAL NOTE
The following exchanges of a part of this Global Note for an
interest in another Global Note have been made:
Date of Amount of Amount of Principal Amount Signature of
Exchange decrease in increase in of this Global authorized
Principal Principal Note following officer of
Amount of this Amount of this such decrease Trustee or Note
Global Note Global Note (or increase) Custodian
SUBSIDIARY GUARANTEE
For value received, each Subsidiary Guarantor (which term
includes any successor Person under the Indenture) has, jointly and
severally, unconditionally guaranteed, to the extent set forth in the
Indenture and subject to the provisions in the Indenture dated as of
February 26, 1998 (the "Indenture") among Oshkosh Truck Corporation, the
Subsidiary Guarantors listed on Schedule I thereto and Firstar Trust
Company, as trustee (the "Trustee"), (a) the due and punctual payment of
the principal of, premium, if any, and interest on the Notes (as defined
in the Indenture), whether at maturity, by acceleration, redemption or
otherwise, the due and punctual payment of interest on overdue principal
and premium, and, to the extent permitted by law, interest, and the due
and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms of the Indenture
and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that the same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise. The obligations of the Subsidiary Guarantors to the Holders of
Notes and to the Trustee pursuant to the Subsidiary Guarantee and the
Indenture are expressly set forth in Article 10 of the Indenture and
reference is hereby made to the Indenture for the precise terms of the
Subsidiary Guarantee. Each Holder of a Note, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee, on behalf of such Holder, to take such action as may
be necessary or appropriate to effectuate the subordination as provided in
the Indenture and (c) appoints the Trustee attorney-in-fact of such Holder
for such purpose; provided, however, that the Indebtedness evidenced by
this Subsidiary Guarantee shall cease to be so subordinated and subject in
right of payment upon any defeasance of this Note in accordance with the
provisions of the Indenture.
[Name of Subsidiary Guarantor(s)]
By:________________________________
Name:
Title:
$100,000,000
8-3/4% SENIOR SUBORDINATED NOTES DUE 2008
OF OSHKOSH TRUCK CORPORATION
PURCHASE AGREEMENT
February 20, 1998
BancAmerica Robertson Stephens
231 South LaSalle Street
Chicago, Illinois 60697
Ladies and Gentlemen:
Oshkosh Truck Corporation, a Wisconsin corporation (the
"Company"), proposes to issue and sell to BancAmerica Robertson Stephens
(the "Initial Purchaser") an aggregate of $100,000,000 in principal amount
of its 8-3/4% Senior Subordinated Notes due 2008 (the "Senior Subordinated
Notes"), subject to the terms and conditions set forth herein. The Senior
Subordinated Notes are to be issued pursuant to the provisions of an
indenture (the "Indenture"), to be dated as of the Closing Date (as
defined below), among the Company, the Guarantors (as defined below) and
Firstar Trust Company, as trustee (the "Trustee"). The Senior
Subordinated Notes and the Exchange Notes (as defined below) issuable in
exchange therefor are collectively referred to herein as the "Notes." The
Notes will be guaranteed (the "Subsidiary Guarantees") by each of the
entities listed on Schedule A hereto (each, a "Guarantor" and collectively
the "Guarantors"). Capitalized terms used but not defined herein shall
have the meanings given to such terms in the Indenture.
1. Offering Memorandum. The Senior Subordinated Notes will be
offered and sold to the Initial Purchaser pursuant to one or more
exemptions from the registration requirements under the Securities Act of
1933, as amended (the "Act"). The Company and the Guarantors have
prepared a preliminary offering memorandum, dated February 5, 1998 (the
"Preliminary Offering Memorandum"), and a final offering memorandum, dated
February 20, 1998 (the "Offering Memorandum"), relating to the Senior
Subordinated Notes and the Subsidiary Guarantees.
Upon original issuance thereof, and until such time as the same
is no longer required pursuant to the Indenture, the Senior Subordinated
Notes (and all securities issued in exchange therefor, in substitution
thereof or upon conversion thereof) shall bear the following legend:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (the "ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT
OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER:
(1) REPRESENTS THAT (I) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE ACT) (A "QIB"),
(II) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE ACT OR (III) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
ACT (AN "IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (i) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (ii) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (iii) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF THE ACT, (iv) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
ACT, (v) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THIS NOTE (the form of which can be obtained from the
Trustee) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE ACT, (vi) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE
TO THE COMPANY) OR (vii) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING."
2. Agreements to Sell and Purchase. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees
to issue and sell to the Initial Purchaser, and the Initial Purchaser
agrees to purchase from the Company, an aggregate principal amount of
$100,000,000 of Senior Subordinated Notes at a purchase price equal to
[97.25]% of the principal amount thereof (the "Purchase Price").
3. Terms of Offering. The Initial Purchaser has advised the
Company that the Initial Purchaser will make offers and sales (the "Exempt
Resales") of the Senior Subordinated Notes purchased hereunder on the
terms set forth in the Offering Memorandum, as amended or supplemented,
solely to (i) persons whom the Initial Purchaser reasonably believes to be
"qualified institutional buyers" as defined in Rule 144A under the Act
("QIBs"), (ii) not more than five (5) institutional "accredited
investors," as defined in Rule 501(a) (1), (2), (3) or (7) under the Act,
that make certain representations and agreements to the Company (each, an
"Accredited Institution"), and (iii) to persons permitted to purchase the
Senior Subordinated Notes in offshore transactions in reliance upon
Regulation S under the Act (each, a "Regulation S Purchaser") (such
persons specified in clauses (i), (ii) and (iii) being referred to herein
as the "Eligible Purchasers"). The Initial Purchaser will offer the
Senior Subordinated Notes to Eligible Purchasers initially at a price
equal to 100% of the principal amount thereof. Such price may be changed
at any time without notice.
Holders (including subsequent transferees) of the Senior
Subordinated Notes will have the registration rights set forth in the
registration rights agreement (the "Registration Rights Agreement"), to be
dated the Closing Date, in substantially the form of Exhibit A hereto, for
so long as such Senior Subordinated Notes constitute "Transfer Restricted
Securities" (as defined in the Registration Rights Agreement). Pursuant
to the Registration Rights Agreement, the Company and the Guarantors will
agree to file with the Securities and Exchange Commission (the
"Commission") under the circumstances set forth therein, (i) a
registration statement under the Act (the "Exchange Offer Registration
Statement") relating to the Company's 8-3/4% Senior Subordinated Notes due
2008 (the "Exchange Notes"), to be offered in exchange for the Senior
Subordinated Notes (such offer to exchange being referred to as the
"Exchange Offer") and the Subsidiary Guarantees thereof and (ii) a shelf
registration statement pursuant to Rule 415 under the Act (the "Shelf
Registration Statement" and, together with the Exchange Offer Registration
Statement, the "Registration Statements") relating to the resale by
certain holders of the Senior Subordinated Notes and to use its best
efforts to cause such Registration Statements to be declared and remain
effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer. This Agreement, the
Senior Credit Agreement, the Indenture, the Notes, the Subsidiary
Guarantees and the Registration Rights Agreement are hereinafter sometimes
referred to collectively as the "Operative Documents."
Substantially all of the net proceeds of the Offering will be
used to finance a portion of the cash consideration for the Company's
acquisition (the "Acquisition") of McNeilus Companies, Inc., a Minnesota
corporation ("McNeilus"). The Acquisition will be made pursuant to that
certain Stock Purchase Agreement between the Company, McNeilus, and the
shareholders of McNeilus named therein dated as of December 8, 1997 (the
"Acquisition Agreement").
Immediately upon consummation of the Acquisition, McNeilus
shall, and shall cause each of its domestic subsidiaries, other than MFSI,
Oshkosh/McNeilus Financial Services, Inc. and Nations Casualty Insurance,
Inc., (collectively, the "McNeilus Subsidiary Guarantors") to, execute and
deliver a counterpart of this Agreement, the Registration Rights
Agreement, the Indenture and its respective Subsidiary Guarantee.
4. Delivery and Payment.
(a) Delivery of, and payment of the Purchase Price for,
the Senior Subordinated Notes shall be made at the offices of Foley &
Lardner, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202 or such
other location as may be mutually acceptable. Such delivery and payment
shall be made at 9:00 a.m. New York City time, on February 26, 1998 or at
such other time on the same date or such other date as shall be agreed
upon by the Initial Purchaser and the Company in writing. The time and
date of such delivery and the payment for the Senior Subordinated Notes
are herein called the "Closing Date."
(b) One or more of the Senior Subordinated Notes in
definitive global form, registered in the name of Cede & Co., as nominee
of the Depository Trust Company ("DTC"), having an aggregate principal
amount corresponding to the aggregate principal amount of the Senior
Subordinated Notes (collectively, the "Global Note"), shall be delivered
by the Company to the Initial Purchaser (or as the Initial Purchaser
directs) in each case with any transfer taxes thereon duly paid by the
Company against payment by the Initial Purchaser of the Purchase Price
thereof by wire transfer in same day funds to the order of the Company.
The Global Note shall be made available to the Initial Purchaser for
inspection not later than 9:30 a.m., New York City time, on the business
day immediately preceding the Closing Date.
5. Agreements of the Company and the Guarantors. Each of the
Company and the Guarantors hereby agrees with the Initial Purchaser as
follows:
(a) To advise the Initial Purchaser promptly and, if
requested by the Initial Purchaser, confirm such advice in writing, (i) of
the issuance by any state securities commission of any stop order
suspending the qualification or exemption from qualification of any Senior
Subordinated Notes for offering or sale in any jurisdiction designated by
the Initial Purchaser pursuant to Section 5(e) hereof, or the initiation
of any proceeding by any state securities commission or any other federal
or state regulatory authority for such purpose and (ii) of the happening
of any event during the period referred to in Section 5(c) below that
makes any statement of a material fact made in the Preliminary Offering
Memorandum or the Offering Memorandum untrue or that requires any
additions to or changes in the Preliminary Offering Memorandum or the
Offering Memorandum in order to make the statements therein not
misleading. The Company and the Guarantors shall use their best efforts
to prevent the issuance of any stop order or order suspending the
qualification or exemption of any Senior Subordinated Notes under any
state securities or Blue Sky laws and, if at any time any state securities
commission or other federal or state regulatory authority shall issue an
order suspending the qualification or exemption of any Senior Subordinated
Notes under any state securities or Blue Sky laws, the Company and the
Guarantors shall use their best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchaser and those
persons identified by the Initial Purchaser to the Company as many copies
of the Preliminary Offering Memorandum and the Offering Memorandum, and
any amendments or supplements thereto, as the Initial Purchaser may
reasonably request for the time period specified in Section 5(c). Subject
to the Initial Purchaser's compliance with its representations and
warranties and agreements set forth in Section 7 hereof, the Company
consents to the use of the Preliminary Offering Memorandum and the
Offering Memorandum, and any amendments and supplements thereto required
pursuant hereto, by the Initial Purchaser in connection with Exempt
Resales.
(c) During such period as in the opinion of counsel for
the Initial Purchaser an Offering Memorandum is required by law to be
delivered in connection with Exempt Resales by the Initial Purchaser and
in connection with market-making activities of the Initial Purchaser for
so long as any Senior Subordinated Notes are outstanding, (i) not to make
any amendment or supplement to the Offering Memorandum of which the
Initial Purchaser shall not previously have been advised or to which the
Initial Purchaser shall reasonably object after being so advised and (ii)
to prepare promptly upon the Initial Purchaser's reasonable request, any
amendment or supplement to the Offering Memorandum which may be necessary
or advisable in connection with such Exempt Resales or such market-making
activities.
(d) If, during the period referred to in Section 5(c)
above, any event shall occur or condition shall exist as a result of
which, in the opinion of counsel to the Initial Purchaser, it becomes
necessary to amend or supplement the Offering Memorandum in order to make
the statements therein, in the light of the circumstances when such
Offering Memorandum is delivered to an Eligible Purchaser, not misleading,
or if, in the opinion of counsel to the Initial Purchaser, it is necessary
to amend or supplement the Offering Memorandum to comply with any
applicable law, forthwith to prepare an appropriate amendment or
supplement to such Offering Memorandum so that the statements therein, as
so amended or supplemented, will not, in the light of the circumstances
when it is so delivered, be misleading, or so that such Offering
Memorandum will comply with applicable law, and to furnish to the Initial
Purchaser and such other persons as the Initial Purchaser may designate
such number of copies thereof as the Initial Purchaser may reasonably
request.
(e) Prior to the sale of all Senior Subordinated Notes
pursuant to Exempt Resales as contemplated hereby, to cooperate with the
Initial Purchaser and counsel to the Initial Purchaser in connection with
the registration or qualification of the Senior Subordinated Notes for
offer and sale to the Initial Purchaser and pursuant to Exempt Resales
under the securities or Blue Sky laws of such jurisdictions as the Initial
Purchaser may request and to continue such registration or qualification
in effect so long as required for Exempt Resales and to file such consents
to service of process or other documents as may be necessary in order to
effect such registration or qualification; provided, however, that neither
the Company nor any Guarantor shall be required in connection therewith to
qualify as a foreign corporation in any jurisdiction in which it is not
now so qualified or to take any action that would subject it to general
consent to service of process, or taxation other than as to matters and
transactions relating to the Preliminary Offering Memorandum, the Offering
Memorandum or Exempt Resales, in any jurisdiction in which it is not now
so subject.
(f) So long as the Notes are outstanding, for any such
period during which the Company is not subject to, and in compliance with,
the periodic reporting requirements of Section 13 or Section 15 of the
Exchange Act, (i) to mail and make generally available as soon as
practicable after the end of each fiscal year to the record holders of the
Notes a financial report of the Company and its subsidiaries on a
consolidated basis (and a similar financial report of all unconsolidated
subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together
with comparable information as of the end of and for the preceding year,
certified by the Company's independent public accountants and (ii) to mail
and make generally available as soon as practicable after the end of each
quarterly period (except for the last quarterly period of each fiscal
year) to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows (and
similar financial reports of all unconsolidated subsidiaries, if any) as
of the end of and for such period, and for the period from the beginning
of such year to the close of such quarterly period, together with
comparable information for the corresponding periods of the preceding
year.
(g) So long as the Notes are outstanding, to furnish to
the Initial Purchaser as soon as available copies of all reports or other
communications furnished by the Company or any of the Guarantors to its
security holders or furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Company or any of the Guarantors is listed and such other publicly
available information concerning the Company and/or its subsidiaries as
the Initial Purchaser may reasonably request.
(h) So long as any of the Senior Subordinated Notes remain
outstanding and during any period in which the Company and the Guarantors
are not subject to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), to make available to any holder of
Senior Subordinated Notes in connection with any sale thereof and any
prospective purchaser of such Senior Subordinated Notes from such holder,
the information ("Rule 144A Information") required by Rule 144A(d)(4)
under the Act.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause
to be paid all expenses incident to the performance of the obligations of
the Company and the Guarantors under this Agreement, including: (i) the
fees, disbursements and expenses of counsel to the Company and the
Guarantors and accountants of the Company and the Guarantors in connection
with the sale and delivery of the Senior Subordinated Notes to the Initial
Purchaser and pursuant to Exempt Resales, and all other fees and expenses
in connection with the preparation, printing, filing and distribution of
the Preliminary Offering Memorandum, the Offering Memorandum and all
amendments and supplements to any of the foregoing (including financial
statements), including the mailing and delivering of copies thereof to the
Initial Purchaser and persons designated by it in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery
of the Senior Subordinated Notes to the Initial Purchaser and pursuant to
Exempt Resales, including any transfer or other taxes payable thereon,
(iii) all costs of printing or reproducing this Agreement, the other
Operative Documents and any other agreements or documents in connection
with the offering, purchase, sale or delivery of the Senior Subordinated
Notes, (iv) all expenses in connection with the registration or
qualification of the Senior Subordinated Notes and the Subsidiary
Guarantees for offer and sale under the securities or Blue Sky laws of the
several states and all costs of printing or producing any preliminary and
supplemental Blue Sky memoranda in connection therewith (including the
filing fees and fees and disbursements of counsel for the Initial
Purchaser in connection with such registration or qualification and
memoranda relating thereto), (v) the cost of printing certificates
representing the Senior Subordinated Notes and the Subsidiary Guarantees,
(vi) all expenses and listing fees in connection with the application for
quotation of the Senior Subordinated Notes in the National Association of
Securities Dealers, Inc. ("NASD") Automated Quotation System - PORTAL
("PORTAL"), (vii) the fees and expenses of the Trustee and the Trustee's
counsel in connection with the Indenture, the Notes and the Subsidiary
Guarantees, (viii) the costs and charges of any transfer agent, registrar
and/or depositary (including DTC), (ix) any fees charged by rating
agencies for the rating of the Notes, (x) all costs and expenses of the
Exchange Offer and any Registration Statement, as set forth in the
Registration Rights Agreement, and (xi) and all other costs and expenses
incident to the performance of the obligations of the Company and the
Guarantors hereunder for which provision is not otherwise made in this
Section.
(j) To use its best efforts to effect the inclusion of the
Senior Subordinated Notes in PORTAL and to maintain the listing of the
Senior Subordinated Notes on PORTAL for so long as the Senior Subordinated
Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry"
transfer of the Notes, and to comply with all of its agreements set forth
in the representation letters of the Company and the Guarantors to DTC
relating to the approval of the Notes by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell, contract
to sell or otherwise transfer or dispose of any debt securities of the
Company or any Guarantor or any warrants, rights or options to purchase or
otherwise acquire debt securities of the Company or any Guarantor
substantially similar to the Notes and the Subsidiary Guarantees (other
than (i) the Notes and the Subsidiary Guarantees, (ii) in connection with
the Senior Credit Facility and (iii) commercial paper issued in the
ordinary course of business), without the prior written consent of the
Initial Purchaser.
(m) Not to sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Senior Subordinated Notes to
the Initial Purchaser or pursuant to Exempt Resales in a manner that would
require the registration of any such sale of the Senior Subordinated Notes
under the Act.
(n) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of
any Notes and the related Subsidiary Guarantees.
(o) To cause the Exchange Offer to be made in the
appropriate form to permit Exchange Notes and guarantees thereof by the
Guarantors registered pursuant to the Act to be offered in exchange for
the Senior Subordinated Notes and the Subsidiary Guarantees and to comply
with all applicable federal and state securities laws in connection with
the Exchange Offer.
(p) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(q) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by it
prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Senior Subordinated Notes and the Subsidiary Guarantees.
(r) Immediately upon consummation of the Acquisition, to
cause McNeilus and each McNeilus Subsidiary Guarantor to execute and
deliver a counterpart of this Agreement, the Registration Rights
Agreement, the Indenture, and its Subsidiary Guarantee, so that McNeilus
and each McNeilus Subsidiary Guarantor becomes a Guarantor for all
purposes hereof and thereof.
6. Representations, Warranties and Agreements of the Company
and the Guarantors. As of the date hereof, each of the Company and the
Guarantors represents and warrants to, and agrees with, the Initial
Purchaser that:
(a) The Preliminary Offering Memorandum and the Offering
Memorandum do not, and any supplement or amendment to them will not,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and warranties
contained in this paragraph (a) shall not apply to statements in or
omissions from the Preliminary Offering Memorandum or the Offering
Memorandum (or any supplement or amendment thereto) based upon information
relating to the Initial Purchaser furnished to the Company in writing by
the Initial Purchaser expressly for use therein. No stop order preventing
the use of the Preliminary Offering Memorandum or the Offering Memorandum,
or any amendment or supplement thereto, or any order asserting that any of
the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
(b) Each of the Company and its subsidiaries and McNeilus
and its subsidiaries has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to carry on its
business and to own, lease and operate its properties as described in the
Preliminary Offering Memorandum and the Offering Memorandum, and each is
duly qualified and is in good standing as a foreign corporation authorized
to do business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the business, prospects, financial condition or results of
operations of the Company and its subsidiaries (including McNeilus and its
subsidiaries), taken as a whole, or draw into question the validity of
this Agreement or the other Operative Documents (a "Material Adverse
Effect").
(c) All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid,
non-assessable except, with respect to assessability, as provided in
Section 180.0622(2)(b) of the Wisconsin Business Corporation Law and
judicial interpretations thereof, and not subject to any preemptive or
similar rights.
(d) The entities listed on Schedule B hereto are the only
subsidiaries, direct or indirect, of the Company. All of the outstanding
shares of capital stock of each of the Company's subsidiaries and McNeilus
and its subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and are (in the case of the Company's
subsidiaries) or upon consummation of the Acquisition will be (in the case
of McNeilus and subsidiaries) owned by the Company, directly or indirectly
through one or more subsidiaries, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature, other than
pledges of such shares made pursuant to the Senior Credit Facility (each,
a "Lien").
(e) This Agreement has been duly authorized, executed and
delivered by the Company and each of the Guarantors, except McNeilus and
the McNeilus Subsidiary Guarantors. Upon consummation of the Acquisition,
this Agreement will be duly authorized, executed and delivered by McNeilus
and the McNeilus Subsidiary Guarantors.
(f) The Indenture has been duly authorized by the Company
and each of the Guarantors, except McNeilus and the McNeilus Subsidiary
Guarantors, and on the Closing Date will have been validly executed and
delivered by the Company and each of the Guarantors, except McNeilus and
the McNeilus Subsidiary Guarantors. Upon consummation of the Acquisition,
the Indenture will be duly authorized, executed and delivered by McNeilus
and the McNeilus Subsidiary Guarantors. When the Indenture has been duly
executed and delivered by the Company and each of the Guarantors, the
Indenture will be a valid and binding agreement of the Company and each
Guarantor, enforceable against the Company and each Guarantor in
accordance with its terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act of 1939,
as amended (the "TIA" or "Trust Indenture Act"), and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder.
(g) The Senior Subordinated Notes have been duly
authorized and, on the Closing Date, will have been validly executed and
delivered by the Company. When the Senior Subordinated Notes have been
issued, executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Initial Purchaser in
accordance with the terms of this Agreement, the Senior Subordinated Notes
will be entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company, enforceable in accordance with their
terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Senior Subordinated Notes will
conform as to legal matters to the description thereof contained in the
Offering Memorandum.
(h) On the Closing Date, the Exchange Notes will have been
duly authorized by the Company. When the Exchange Notes are issued,
executed and authenticated in accordance with the terms of the Exchange
Offer and the Indenture, the Exchange Notes will be entitled to the
benefits of the Indenture and will be the valid and binding obligations of
the Company, enforceable against the Company in accordance with their
terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(i) The Subsidiary Guarantee to be endorsed on the Senior
Subordinated Notes by each Guarantor has been duly authorized by each
Guarantor, except McNeilus and the McNeilus Subsidiary Guarantors, and on
the Closing Date will have been duly executed and delivered by each such
Guarantor, except McNeilus and the McNeilus Subsidiary Guarantors. Upon
consummation of the Acquisition, the Subsidiary Guarantee will be duly
authorized, executed and delivered by McNeilus and the McNeilus Subsidiary
Guarantors. When the Senior Subordinated Notes have been issued, executed
and authenticated in accordance with the Indenture and delivered to and
paid for by the Initial Purchaser in accordance with the terms of this
Agreement, the Subsidiary Guarantee of each Guarantor, including McNeilus
and the McNeilus Subsidiary Guarantors, endorsed thereon will be entitled
to the benefits of the Indenture and will be the valid and binding
obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Subsidiary Guarantees to be
endorsed on the Senior Subordinated Notes will conform as to legal matters
to the description thereof contained in the Offering Memorandum.
(j) The Subsidiary Guarantee to be endorsed on the
Exchange Notes by each Guarantor has been duly authorized by each such
Guarantor, except McNeilus and the McNeilus Subsidiary Guarantors. Upon
consummation of the Acquisition, the Subsidiary Guarantee of McNeilus and
the McNeilus Subsidiary Guarantors will be duly authorized. When issued,
the Exchange Notes will have been duly executed and delivered by each such
Guarantor. When the Exchange Notes have been issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Subsidiary Guarantee of each Guarantor endorsed thereon
will be entitled to the benefits of the Indenture and will be the valid
and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms, except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles
of general applicability. When the Exchange Notes are issued,
authenticated and delivered, the Subsidiary Guarantees to be endorsed on
the Exchange Notes will conform as to legal matters to the description
thereof in the Offering Memorandum.
(k) The Registration Rights Agreement has been duly
authorized by the Company and each of the Guarantors and, on the Closing
Date, will have been duly authorized, executed and delivered by the
Company and each of the Guarantors. When the Registration Rights
Agreement has been duly executed and delivered, the Registration Rights
Agreement will be a valid and binding agreement of the Company and each of
the Guarantors, enforceable against the Company and each Guarantor in
accordance with its terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Registration Rights Agreement
will conform as to legal matters to the description thereof in the
Offering Memorandum.
(l) Neither the Company nor any of its subsidiaries nor
McNeilus nor any of its subsidiaries is (A) in violation of its respective
charter or by-laws or (B) in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument to which the
Company or any of its subsidiaries or McNeilus or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or McNeilus
or any of its subsidiaries or their respective property is bound, which
violations or defaults would, singly or in the aggregate in the case of
clause (B), have a Material Adverse Effect.
(m) The execution, delivery and performance of this
Agreement and the other Operative Documents by the Company and each of the
Guarantors, compliance by the Company and each of the Guarantors with all
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not, (i) conflict with or constitute
a breach of any of the terms or provisions of, or a default under, the
charter or by-laws of the Company or any of its subsidiaries or McNeilus
or any of its subsidiaries (ii) conflict with or constitute a breach of
any of the terms or provisions of or a default under, any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries (including for purposes of
this subsection McNeilus or any of its subsidiaries), taken as a whole, to
which the Company or any of its subsidiaries or McNeilus or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
or McNeilus or any of its subsidiaries or their respective property is
bound, (iii) require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue Sky laws of
the various states), (iv) violate or conflict with any applicable law or
any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company, any of
its subsidiaries or McNeilus or any of its subsidiaries or their
respective property, (v) result in the imposition or creation of (or the
obligation to create or impose) a Lien under, any agreement or instrument
to which the Company or any of its subsidiaries or McNeilus or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
or McNeilus or any of its subsidiaries or their respective property is
bound, or (vi) result in the termination, suspension or revocation of any
Authorization (as defined below) of the Company or any of its subsidiaries
or McNeilus or any of its subsidiaries or result in any other impairment
of the rights of the holder of any such Authorization, other than in the
case of clauses (ii) through (vi), any of the foregoing that would not,
singly or in the aggregate have a Material Adverse Effect.
(n) Except as described in the Preliminary Offering
Memorandum, there are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is or could be
a party or to which any of their respective property is or could be
subject, which, if adversely determined, would result, singly or in the
aggregate, in a Material Adverse Effect.
(o) Except with respect to matters described in the
Preliminary Offering Memorandum, neither the Company nor any of its
subsidiaries nor McNeilus or any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), any provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or any provisions of the Foreign Corrupt
Practices Act or the rules and regulations promulgated thereunder, except
for such violations which, singly or in the aggregate, would not have a
Material Adverse Effect.
(p) Except with respect to matters described in the
Preliminary Offering Memorandum, there are no costs or liabilities
associated with Environmental Laws (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any Authorization, any
related constraints on operating activities and any potential liabilities
to third parties) which would, singly or in the aggregate, have a Material
Adverse Effect.
(q) Each of the Company and its subsidiaries and McNeilus
and its subsidiaries has such permits, licenses, consents, exemptions,
franchises, authorizations and other approvals (each, an "Authorization")
of, and has made all filings with and notices to, all governmental or
regulatory authorities and self-regulatory organizations and all courts
and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate
its respective properties and to conduct its business, except where the
failure to have any such Authorization or to make any such filing or
notice would not, singly or in the aggregate, have a Material Adverse
Effect. Each such Authorization is valid and in full force and effect and
each of the Company and its subsidiaries and McNeilus and its subsidiaries
is in compliance with all the terms and conditions thereof and with the
rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including,
without limitation, the receipt of any notice from any authority or
governing body) which allows or, after notice or lapse of time or both,
would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would
result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to the Company or any of its subsidiaries or McNeilus or any of
its subsidiaries; except where such failure to be valid and in full force
and effect or to be in compliance, the occurrence of any such event or the
presence of any such restriction would not, singly or in the aggregate,
have a Material Adverse Effect.
(r) The accountants, Ernst & Young LLP, and Larson, Allen,
Weishair and Co., LLP, that have certified the financial statements and
supporting schedules included in the Preliminary Offering Memorandum and
the Offering Memorandum are independent public accountants with respect to
the Company and the Guarantors, as required by the Act and the Exchange
Act. The historical financial statements, together with related schedules
and notes, set forth in the Preliminary Offering Memorandum and the
Offering Memorandum comply as to form in all material respects with the
requirements applicable to registration statements on Form S-3 under the
Act.
(s) The historical financial statements, together with
related schedules and notes forming part of the Offering Memorandum (and
any amendment or supplement thereto), present fairly the consolidated
financial position, results of operations and changes in financial
position of the Company and its subsidiaries and McNeilus and its
subsidiaries on the basis stated in the Offering Memorandum at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed therein; and
the other financial and statistical information and data set forth in the
Offering Memorandum (and any amendment or supplement thereto) are, in all
material respects, accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the Company
and its subsidiaries and McNeilus and its subsidiaries.
(t) The pro forma financial statements included in the
Preliminary Offering Memorandum and the Offering Memorandum have been
prepared on a basis consistent with the historical financial statements of
the Company and its subsidiaries and McNeilus and its subsidiaries and
give effect to assumptions used in the preparation thereof on a reasonable
basis and in good faith and present fairly the historical and proposed
transactions contemplated by the Preliminary Offering Memorandum and the
Offering Memorandum; and such pro forma financial statements comply as to
form in all material respects with the requirements applicable to pro
forma financial statements included in registration statements on Form S-3
under the Act. The other pro forma financial and statistical information
and data included in the Offering Memorandum are, in all material
respects, accurately presented and prepared on a basis consistent with the
pro forma financial statements.
(u) Neither the Company nor any of its subsidiaries nor
McNeilus or any of its subsidiaries is, nor after giving effect to the
offering and sale of the Senior Subordinated Notes and the application of
the net proceeds thereof as described in the Offering Memorandum, will be,
an "investment company," as such term is defined in the Investment Company
Act of 1940, as amended.
(v) There are no contracts, agreements or understandings
between the Company or any Guarantor and any person granting such person
the right to require the Company or such Guarantor to file a registration
statement under the Act with respect to any securities of the Company or
such Guarantor or to require the Company or such Guarantor to include such
securities with the Notes and Subsidiary Guarantees registered pursuant to
any Registration Statement.
(w) Neither the Company nor any of its subsidiaries nor
McNeilus or any of its subsidiaries nor any agent thereof acting on the
behalf of them has taken, and none of them will take, any action that
might cause this Agreement or the issuance or sale of the Senior
Subordinated Notes to violate Regulation G (12 C.F.R. Part 207),
Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal
Reserve System.
(x) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under
the Act (i) has imposed (or has informed the Company or any Guarantor that
it is considering imposing) any condition (financial or otherwise) on the
Company's or any Guarantor's retaining any rating assigned to the Company
or any Guarantor, any securities of the Company or any Guarantor or (ii)
has indicated to the Company or any Guarantor that it is considering (a)
the downgrading, suspension, or withdrawal of, or any review for a
possible change that does not indicate the direction of the possible
change in, any rating so assigned or (b) any change in the outlook for any
rating of the Company, any Guarantor or any securities of the Company or
any Guarantor.
(y) Since the respective dates as of which information is
given in the Offering Memorandum and other than as set forth in the
Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there has not occurred any
material adverse change or any development involving a prospective
material adverse change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries (including for purposes of this subsection McNeilus and its
subsidiaries, taken as a whole, (ii) there has not been any material
adverse change or any development involving a prospective material adverse
change in the capital stock or in the long-term debt of the Company or any
of its subsidiaries or McNeilus or any of its subsidiaries and (iii)
neither the Company nor any of its subsidiaries nor McNeilus or any of its
subsidiaries has incurred any material liability or obligation, direct or
contingent.
(z) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the information
specified in, and meeting the requirements of, Rule 144A(d)(4) under the
Act.
(aa) When the Senior Subordinated Notes and the Subsidiary
Guarantees are issued and delivered pursuant to this Agreement, neither
the Senior Subordinated Notes nor the Subsidiary Guarantees will be of the
same class (within the meaning of Rule 144A under the Act) as any security
of the Company or the Guarantors that is listed on a national securities
exchange registered under Section 6 of the Exchange Act or that is quoted
in a United States automated inter-dealer quotation system.
(bb) No form of general solicitation or general advertising
(as defined in Regulation D under the Act) was used by the Company, the
Guarantors or any of their respective representatives (other than the
Initial Purchaser, as to whom the Company and the Guarantors make no
representation) in connection with the offer and sale of the Senior
Subordinated Notes contemplated hereby, including, but not limited to,
articles, notices or other communications published in any newspaper,
magazine, or similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class as
the Senior Subordinated Notes have been issued and sold by the Company
within the six-month period immediately prior to the date hereof.
(cc) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the TIA.
(dd) None of the Company, the Guarantors nor any of their
respective affiliates or any person acting on its or their behalf (other
than the Initial Purchaser, as to whom the Company and the Guarantors make
no representation) has engaged or will engage in any directed selling
efforts within the meaning of Regulation S under the Act ("Regulation S")
with respect to the Senior Subordinated Notes or the Subsidiary
Guarantees.
(ee) Assuming the accuracy of your representations,
warranties and agreements in Section 7 hereof, the Senior Subordinated
Notes offered and sold in reliance on Regulation S have been and will be
offered and sold only in offshore transactions.
(ff) The sale of the Senior Subordinated Notes pursuant to
Regulation S is not part of a plan or scheme to evade the registration
provisions of the Act.
(gg) No registration under the Act of the Senior
Subordinated Notes or the Subsidiary Guarantees is required for the sale
of the Senior Subordinated Notes and the Subsidiary Guarantees to the
Initial Purchaser as contemplated hereby or for the Exempt Resales
assuming the accuracy of the Initial Purchaser's representations and
warranties and agreements set forth in Section 7 hereof.
(hh) The Acquisition Agreement has been duly authorized,
executed and delivered by each of the Company, McNeilus and McNeilus'
shareholders and constitutes the valid and binding agreement of each of
them, enforceable against each of them, in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, fraud,
insolvency, fraudulent conveyance, reorganization, moratorium, or other
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles.
(ii) The Company, the Guarantors and their respective
affiliates and all persons acting on their behalf (other than the Initial
Purchaser, as to whom the Company and the Guarantors make no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the offering
of the Senior Subordinated Notes outside the United States and, in
connection therewith, the Offering Memorandum will contain the disclosure
required by Rule 902(h).
(jj) The Company is a "reporting issuer", as defined in
Rule 902 under the Act.
(kk) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them which is material
to the business of the Company and its subsidiaries, in each case free and
clear of all Liens and defects, except such as are described in the
Offering Memorandum or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries; and any real property
and buildings held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and its
subsidiaries, in each case except as described in the Offering Memorandum.
(ll) The Company and its subsidiaries own or possess, or
can acquire on reasonable terms, all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
("intellectual property") currently employed by them in connection with
the business now operated by them except where the failure to own or
possess or otherwise be able to acquire such intellectual property would
not, singly or in the aggregate, have a Material Adverse Effect; and
neither the Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to
any of such intellectual property which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect.
(mm) Except as disclosed in the Offering Memorandum, no
relationship, direct or indirect, exists between or among the Company or
any of its subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its
subsidiaries on the other hand, which would be required by the Act to be
described in the Offering Memorandum if the Offering Memorandum were a
prospectus included in a registration statement on Form S-3 filed with the
Commission.
(nn) The Company and each of its subsidiaries that is a
Significant Subsidiary (as defined in Rule 1-02(w) of Regulation S-X)
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(oo) All tax returns required to be filed by the Company
and each of its subsidiaries in any jurisdiction have been filed, other
than those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and
other charges due pursuant to such returns or pursuant to any assessment
received by the Company or any of its subsidiaries have been paid, other
than those being contested in good faith and for which adequate reserves
have been provided and except where the failure to file such returns or
make such payments would not, singly or in the aggregate, have a Material
Adverse Effect.
(pp) All indebtedness of the Company and the Guarantors
that will be repaid with the proceeds of the issuance and sale of the
Senior Subordinated Notes was incurred, and the indebtedness represented
by the Senior Subordinated Notes is being incurred, for proper purposes
and in good faith and each of the Company and the Guarantors was, at the
time of the incurrence of such indebtedness that will be repaid with the
proceeds of the issuance and sale of the Senior Subordinated Notes, and
will be on the Closing Date (after giving effect to the application of the
proceeds from the issuance of the Senior Subordinated Notes) solvent, and
had at the time of the incurrence of such indebtedness that will be repaid
with the proceeds of the issuance and sale of the Senior Subordinated
Notes and will have on the Closing Date (after giving effect to the
application of the proceeds from the issuance of the Senior Subordinated
Notes) sufficient capital for carrying on their respective business and
were, at the time of the incurrence of such indebtedness that will be
repaid with the proceeds of the issuance and sale of the Senior
Subordinated Notes, and will be on the Closing Date (after giving effect
to the application of the proceeds from the issuance of the Senior
Subordinated Notes) able to pay their respective debts as they mature.
(qq) To the knowledge of the Company, no action has been
taken and no law, statute, rule or regulation or order has been enacted,
adopted or issued by any governmental agency or body which prevents the
execution, delivery and performance of any of the Operative Documents, the
issuance of the Senior Subordinated Notes or the Subsidiary Guarantees, or
suspends the sale of the Senior Subordinated Notes or the Subsidiary
Guarantees in any jurisdiction referred to in Section 4(e); and to the
knowledge of the Company, no injunction, restraining order or other order
or relief of any nature by a federal or state court or other tribunal of
competent jurisdiction has been issued with respect to the Company or any
of its subsidiaries which would prevent or suspend the issuance or sale of
the Senior Subordinated Notes or the Subsidiary Guarantees in any
jurisdiction referred to in Section 4(e).
(rr) Other than as described in the Offering Memorandum or
as would not, singly or in the aggregate, have a Material Adverse Effect,
there are no (i) no claims pending or threatened against the Company by
the United States government (the "Government") or any other party related
to any Government contract or subcontract, (ii) default notices, cure
notices, show cause notices pending or threatened against the Company by
the Government or any other party related to any Government contract or
subcontract; (iii) instances of default or material instances of
contractual or regulatory noncompliance by the Company related to any
Government contract or subcontract; (iv) suits (civil or criminal) or
investigations pending or threatened against the Company by the Government
or any other party related to any Government contract or subcontract; or
(v) suspensions, debarments, or administrative proceedings pending or
threatened involving the Company related to any Government contract or
subcontract.
(ss) Except with respect to matters as would not,
individually or in the aggregate, result in a Material Adverse Effect,
during the past five years, the Company has neither conducted or initiated
an internal investigation (nor had reason to conduct or initiate an
internal investigation), nor made any voluntary disclosure to the
Government with respect to any alleged irregularity, misstatement or
omission related to any government contract or subcontract.
(tt) The cost accounting and procurement systems and
practices of the Company are, and for the past five years have been, in
material compliance with all applicable Government laws and regulations
(including all applicable cost accounting standards).
(uu) There are no pending or unresolved audits by the
Government (including the DCAA) related to any government contract or
subcontract, except for (i) Cost Accounting Standard (CAS) issues
regarding Sustaining Engineering, Product Support (Warranty) and Material
Overhead, (ii) post-award audits regarding the LVS Base, A-Frame, X010
HEMTT Overhaul II, X159 HET, X159 HET (Modification for 187 vehicles),
X039 CBT and HEMTT Family (Modification P00003) contracts and (iii)
pending audits of the Company's Material Management Accounting System and
treatment of Federal Excise Tax with respect to federal government
contracts.
The Company acknowledges that the Initial Purchaser and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant
to Section 9 hereof, counsel to the Company and the Guarantors and counsel
to the Initial Purchaser will rely upon the accuracy and truth of the
foregoing representations and hereby consents to such reliance.
7. Initial Purchaser's Representations and Warranties. The
Initial Purchaser represents and warrants to, and agrees with, the Company
and the Guarantors:
(a) Such Initial Purchaser is either a QIB or an
Accredited Institution, in either case, with such knowledge and experience
in financial and business matters as is necessary in order to evaluate the
merits and risks of an investment in the Senior Subordinated Notes.
(b) Such Initial Purchaser (A) is not acquiring the Senior
Subordinated Notes with a view to any distribution thereof or with any
present intention of offering or selling any of the Senior Subordinated
Notes in a transaction that would violate the Act or the securities laws
of any state of the United States or any other applicable jurisdiction and
(B) will be reoffering and reselling the Senior Subordinated Notes only to
(x) QIBs in reliance on the exemption from the registration requirements
of the Act provided by Rule 144A, (y) not more than five Accredited
Institutions that execute and deliver a letter containing certain
representations and agreements in the form attached as Annex A to the
Offering Memorandum and (z) in offshore transactions in reliance upon
Regulation S under the Act.
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D
under the Act) has been or will be used by such Initial Purchaser or any
of its representatives in connection with the offer and sale of the Senior
Subordinated Notes pursuant hereto, including, but not limited to,
articles, notices or other communications published in any newspaper,
magazine or similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with
Exempt Resales, such Initial Purchaser will solicit offers to buy the
Senior Subordinated Notes only from, and will offer to sell the Senior
Subordinated Notes only to, Eligible Purchasers. Each Initial Purchaser
further agrees that it will offer to sell the Senior Subordinated Notes
only to, and will solicit offers to buy the Senior Subordinated Notes only
from (A) Eligible Purchasers that the Initial Purchaser reasonably
believes are QIBs, (B) Accredited Institutions who make the
representations contained in, and execute and return to the Initial
Purchaser, a certificate in the form of Annex A attached to the Offering
Memorandum and (C) Regulation S Purchasers, in each case, that agree that
(x) the Senior Subordinated Notes purchased by them may be resold, pledged
or otherwise transferred within the time period referred to under Rule
144(k) (taking into account the provisions of Rule 144(d) under the Act,
if applicable) under the Act, as in effect on the date of the transfer of
such Senior Subordinated Notes, only (I) to the Company or any of its
subsidiaries, (II) to a person whom the seller reasonably believes is a
QIB purchasing for its own account or for the account of a QIB in a
transaction meeting the requirements of Rule 144A under the Act, (III) in
an offshore transaction (as defined in Rule 902 under the Act) meeting the
requirements of Rule 904 of the Act, (IV) in a transaction meeting the
requirements of Rule 144 under the Act, (V) to an Accredited Institution
that, prior to such transfer, furnishes the Trustee a signed letter
containing certain representations and agreements relating to the
registration of transfer of such Senior Subordinated Note (the form of
which is substantially the same as Annex A to the Offering Memorandum)
and, if such transfer is in respect of an aggregate principal amount of
Senior Subordinated Notes less than $250,000, an opinion of counsel
acceptable to the Company that such transfer is in compliance with the
Act, (VI) in accordance with another exemption from the registration
requirements of the Act (and based upon an opinion of counsel acceptable
to the Company) or (VII) pursuant to an effective registration statement
and, in each case, in accordance with the applicable securities laws of
any state of the United States or any other applicable jurisdiction and
(y) they will deliver to each person to whom such Senior Subordinated
Notes or an interest therein is transferred a notice substantially to the
effect of the foregoing.
(e) Such Initial Purchaser and its affiliates or any
person acting on its or their behalf have not engaged or will not engage
in any directed selling efforts within the meaning of Regulation S with
respect to the Senior Subordinated Notes or the Subsidiary Guarantees.
(f) The Senior Subordinated Notes offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S have been
and will be offered and sold only in offshore transactions.
(g) The sale of the Senior Subordinated Notes offered and
sold by such Initial Purchaser pursuant hereto in reliance on Regulation S
is not part of a plan or scheme to evade the registration provisions of
the Act.
(h) Such Initial Purchaser agrees that it has not offered
or sold and will not offer or sell the Senior Subordinated Notes in the
United States or to, or for the benefit or account of, a U.S. Person
(other than a distributor), in each case, as defined in Rule 902 under the
Act (i) as part of its distribution at any time and (ii) otherwise until
40 days after the later of the commencement of the offering of the Senior
Subordinated Notes pursuant hereto and the Closing Date, other than in
accordance with Regulation S of the Act or another exemption from the
registration requirements of the Act. Such Initial Purchaser agrees that,
during such 40-day restricted period, it will not cause any advertisement
with respect to the Senior Subordinated Notes (including any "tombstone"
advertisement) to be published in any newspaper or periodical or posted in
any public place and will not issue any circular relating to the Senior
Subordinated Notes, except such advertisements as are permitted by and
include the statements required by Regulation S.
(i) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Senior Subordinated Notes by it to any
distributor, dealer or person receiving a selling concession, fee or other
remuneration during the 40-day restricted period referred to in Rule
903(c)(2) under the Act, it will send to such distributor, dealer or
person receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:
"The Senior Subordinated Notes covered hereby have not
been registered under the U.S. Securities Act of 1933,
as amended (the "Securities Act"), and may not be
offered and sold within the United States or to, or
for the account or benefit of, U.S. persons (i) as
part of your distribution at any time or (ii)
otherwise until 40 days after the later of the
commencement of the Offering and the Closing Date,
except in either case in accordance with Regulation S
under the Securities Act (or Rule 144A or to
Accredited Institutions in transactions that are
exempt from the registration requirements of the
Securities Act), and in connection with any subsequent
sale by you of the Senior Subordinated Notes covered
hereby in reliance on Regulation S during the period
referred to above to any distributor, dealer or person
receiving a selling concession, fee or other
remuneration, you must deliver a notice to
substantially the foregoing effect. Terms used above
have the meanings assigned to them in Regulation S."
Such Initial Purchaser acknowledges that the Company and the
Guarantors and, for purposes of the opinions to be delivered to each
Initial Purchaser pursuant to Section 9 hereof, counsel to the Company and
the Guarantors and counsel to the Initial Purchaser will rely upon the
accuracy and truth of the foregoing representations and such Initial
Purchaser hereby consents to such reliance.
8. Indemnification.
(a) The Company and each Guarantor agree, jointly and
severally, to indemnify and hold harmless the Initial Purchaser, its
directors, its officers and each person, if any, who controls such Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any reasonable
legal or other expenses incurred in connection with investigating or
defending any matter, including any action, that could give rise to any
such losses, claims, damages, liabilities or judgments) caused by any
untrue statement or alleged untrue statement of a material fact contained
in the Offering Memorandum (or any amendment or supplement thereto), the
Preliminary Offering Memorandum or any Rule 144A Information provided by
the Company or any Guarantor to any holder or prospective purchaser of
Senior Subordinated Notes pursuant to Section 5(h) or caused by any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information furnished in writing
to the Company by the Initial Purchaser expressly for use in the
Preliminary Offering Memorandum or the Offering Memorandum (or any
amendment or supplement thereto); provided, however, that the foregoing
indemnity agreement with respect to any Preliminary Offering Memorandum
shall not inure to the benefit of the Initial Purchaser if the Initial
Purchaser failed to deliver a Final Offering Memorandum (as then amended
or supplemented, provided by the Company to the several Initial Purchasers
in the requisite quantity and on a timely basis to permit proper delivery
on or prior to the Closing Date) to the person asserting any losses,
claims, damages and liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Memorandum, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such material
misstatement or omission or alleged material misstatement or omission was
cured in the Final Offering Memorandum.
(b) The Initial Purchaser agrees to indemnify and hold
harmless the Company and the Guarantors, and their respective directors
and officers and each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) the Company or
the Guarantors, to the same extent as the foregoing indemnity from the
Company and the Guarantors to the Initial Purchaser but only with
reference to information furnished in writing to the Company by the
Initial Purchaser expressly for use in the Preliminary Offering Memorandum
or the Offering Memorandum (or any amendment or supplement thereto).
(c) In case any action shall be commenced involving any
person in respect of which indemnity may be sought pursuant to Section
8(a) or 8(b) (the "indemnified party"), the indemnified party shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party shall assume
the defense of such action, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all reasonable
fees and expenses of such counsel, as incurred (except that in the case of
any action in respect of which indemnity may be sought pursuant to both
Sections 8(a) and 8(b), the Initial Purchaser shall not be required to
assume the defense of such action pursuant to this Section 8(c), but may
employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at
the expense of the Initial Purchaser). Any indemnified party shall have
the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at
the expense of the indemnified party unless (i) the employment of such
counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to
assume the defense of such action or employ counsel reasonably
satisfactory to the indemnified party or (iii) the named parties to any
such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have
been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available
to the indemnifying party (in which case the indemnifying party shall not
have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not,
in connection with any one action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any
local counsel) for all indemnified parties and all such fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated
in writing by BancAmerica Robertson Stephens, in the case of the parties
indemnified pursuant to Section 8(a), and by the Company, in the case of
parties indemnified pursuant to Section 8(b), subject in each case to the
approval of the indemnifying party, which shall not be unreasonably
delayed or withheld. The indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all losses,
claims, damages, liabilities and judgments by reason of any settlement of
any action (i) effected with its written consent or (ii) effected without
its written consent if the settlement is entered into more than thirty
business days after the indemnifying party shall have received a request
from the indemnified party for reimbursement for the fees and expenses of
counsel (in any case where such fees and expenses are at the expense of
the indemnifying party) and, prior to the date of such settlement, the
indemnifying party shall have failed to comply with such reimbursement
request. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could
have been a party and indemnity or contribution may be or could have been
sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability on claims that are or could have been
the subject matter of such action and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act, by or on
behalf of the indemnified party.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages, liabilities or judgments referred
to therein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
and judgments (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantors, on the one
hand, and the Initial Purchaser on the other hand from the offering of the
Senior Subordinated Notes or (ii) if the allocation provided by clause
8(d)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause 8(d)(i) above but also the relative fault of the Company and the
Guarantors, on the one hand, and the Initial Purchaser, on the other hand,
in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Guarantors, on the one hand and the Initial Purchaser, on
the other hand, shall be deemed to be in the same proportion as the total
net proceeds from the offering of the Senior Subordinated Notes (after
underwriting discounts and commissions, but before deducting expenses)
received by the Company, and the total discounts and commissions received
by the Initial Purchaser bear to the total price to investors of the
Senior Subordinated Notes, in each case as set forth in the table on the
cover page of the Offering Memorandum. The relative fault of the Company
and the Guarantors, on the one hand, and the Initial Purchaser, on the
other hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Guarantors, on the one hand, or
the Initial Purchaser, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Guarantors, and the Initial Purchaser agree
that it would not be just and equitable if contribution pursuant to this
Section 8(d) were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses incurred by such indemnified
party in connection with investigating or defending any matter, including
any action, that could have given rise to such losses, claims, damages,
liabilities or judgments. Notwithstanding the provisions of this Section
8, the Initial Purchaser shall not be required to contribute any amount in
excess of the amount by which the total discounts and commissions received
by such Initial Purchasers exceeds the amount of any damages which the
Initial Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise
be available to any indemnified party at law or in equity.
9. Conditions of Initial Purchaser's Obligations. The
obligations of the Initial Purchaser to purchase the Senior Subordinated
Notes under this Agreement are subject to the satisfaction of each of the
following conditions:
(a) All the representations and warranties of the Company
and the Guarantors contained in this Agreement shall be true and correct
on the Closing Date with the same force and effect as if made on and as of
the Closing Date.
(b) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement), (i) there shall not have occurred any
change or any development involving a prospective change in the condition,
financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiaries (including for purposes of
this subsection McNeilus and its subsidiaries), taken as a whole, (ii)
there shall not have been any change or any development involving a
prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries or McNeilus or any of its Subsidiaries
and (iii) neither the Company nor any of its subsidiaries nor McNeilus or
any of its subsidiaries shall have incurred any liability or obligation,
direct or contingent, the effect of which, in any such case described in
clause 9(b)(i), 9(b)(ii) or 9(b)(iii), in your judgment, is material and
adverse and, in your judgment, makes it impracticable to market the Senior
Subordinated Notes on the terms and in the manner contemplated in the
Offering Memorandum.
(c) You shall have received on the Closing Date a
certificate dated the Closing Date, signed by the President and the Chief
Financial Officer of the Company and each of the Guarantors, confirming
the matters set forth in Sections 6(y) and 9(a) and stating that each of
the Company and the Guarantors has complied with all the agreements and
satisfied all of the conditions herein contained and required to be
complied with or satisfied on or prior to the Closing Date.
(d) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchaser), dated the
Closing Date, of Foley & Lardner, counsel for the Company and the
Guarantors, to the effect that:
(i) each of the Company and its subsidiaries and
McNeilus and its subsidiaries is validly existing as a
corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power
and authority to carry on its business and to own, lease
and operate its properties as described in the Offering
Memorandum;
(ii) each of the Company and its subsidiaries and
McNeilus and its subsidiaries is duly qualified and is in
good standing as a foreign corporation authorized to do
business in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires
such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect;
(iii) all the outstanding shares of capital stock of
the Company have been duly authorized and validly issued
and are fully paid, non-assessable except, with respect to
accessibility, as provided in Section 180.062(2)(b) of the
Wisconsin Business Corporation Law and judicial
interpretations thereof, and not subject to any preemptive
or similar rights;
(iv) to such counsel's knowledge, all of the
outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable, and
are owned by the Company, free and clear of any Lien
except, with respect to accessibility, as provided in
Section 180.062(2)(b) of the Wisconsin Business Corporation
Law and judicial interpretations thereof;
(v) the Senior Subordinated Notes have been duly
authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchaser in
accordance with the terms of this Agreement, will be
entitled to the benefits of the Indenture and will be valid
and legally binding obligations of the Company. The
Subsidiary Guarantees have been duly authorized by each
Guarantor (except McNeilus and the McNeilus Subsidiary
Guarantors) and, when the Senior Subordinated Notes are
executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for
by the Initial Purchaser in accordance with the terms of
this Agreement, the Subsidiary Guarantees endorsed thereon
will be entitled to the benefits of the Indenture and will
be valid and binding obligations of the Guarantors (except
McNeilus and the McNeilus Subsidiary Guarantors). The
Indenture has been duly authorized, executed and delivered
by the Company and each Guarantor (except McNeilus and the
McNeilus Subsidiary Guarantors) and is a valid and binding
agreement of the Company and each Guarantor (except
McNeilus and the McNeilus Subsidiary Guarantors). The
Senior Subordinated Notes, the Subsidiary Guarantees and
the Indenture are each enforceable against the Company and
each Guarantor (except McNeilus and the McNeilus Subsidiary
Guarantors, with respect to whom such documents will be
enforceable upon their execution) in accordance with its
terms, subject in each case to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles and
subject to the qualification that certain provisions
thereof may be unenforceable in whole or in part under the
laws of the State of Wisconsin, but the inclusion of such
provisions does not affect the validity of the Senior
Subordinated Notes, the Subsidiary Guarantees or the
Indenture and each of them contain legally adequate
provisions for the realization of the principal legal
rights and benefits afforded thereby. The Indenture and
the Subsidiary Guarantees will be duly authorized, executed
and delivered by McNeilus and the McNeilus Subsidiary
Guarantors immediately upon consummation of the
Acquisition, assuming the delivery of certain shareholder
and director consents of McNeilus and the McNeilus
Subsidiary Guarantors in the form reviewed by such counsel;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company and the Guarantors
(except McNeilus and the McNeilus Subsidiary Guarantors);
this Agreement will be duly authorized, executed and
delivered by McNeilus and the McNeilus Subsidiary
Guarantors immediately upon consummation of the
Acquisition, assuming the delivery of certain shareholder
and director consents of McNeilus and the McNeilus
Subsidiary Guarantors in the form reviewed by such counsel;
(vii) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and the
Guarantors (except McNeilus and the McNeilus Subsidiary
Guarantors) and is a valid and binding agreement of the
Company and each Guarantor (except McNeilus and the
McNeilus Subsidiary Guarantors), enforceable against the
Company and each Guarantor in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights
and to general equity principles; and the Registration
Rights Agreement will be duly authorized, executed and
delivered by McNeilus and the McNeilus Subsidiary
Guarantors immediately upon consummation of the
Acquisition, assuming the delivery of certain shareholder
and director consents of McNeilus and the McNeilus
Subsidiary Guarantors in the form reviewed by such counsel;
(viii) the Exchange Notes have been duly authorized;
(ix) the statements under the captions "The
Transactions," "Certain Transactions," "Description of
Indebtedness," "Description of Notes" and "Certain Tax
Considerations" in the Offering Memorandum, insofar as such
statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly
present in all material respects such legal matters,
documents and proceedings;
(x) neither the Company nor any of its subsidiaries
is in violation of its respective charter or by-laws and,
to the best of such counsel's knowledge, and except such as
would not have a Material Adverse Effect, neither the
Company nor any of its subsidiaries is in default in the
performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or
their respective property is bound;
(xi) the execution, delivery and performance of this
Agreement and the other Operative Documents by the Company
and each of the Guarantors, the compliance by the Company
and each of the Guarantors with all provisions hereof and
thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any
consent, approval, authorization or other order of, or
qualification with, any governmental body or agency (except
such as may be required under the securities or Blue Sky
laws of the various states) or, to such counsel's
knowledge, any court, (ii) conflict with or constitute a
breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company or any of its
subsidiaries, or any indenture, loan agreement, mortgage,
lease or other agreement or instrument known to such
counsel to which the Company and its subsidiaries,
including McNeilus and its subsidiaries, are bound or to
which any of their respective properties are subject, (iii)
to such counsel's knowledge, violate or conflict with any
applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency
having jurisdiction over the Company, any of its
subsidiaries or McNeilus or any of its subsidiaries or
their respective property or (iv) to such counsel's
knowledge, result in the imposition or creation of (or the
obligation to create or impose) a Lien under any agreement
or instrument to which the Company or any of its
subsidiaries or McNeilus or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or
McNeilus or any of its subsidiaries or their respective
property is bound.
(xii) such counsel does not know of any legal or
governmental proceedings to which the Company or any of its
subsidiaries or McNeilus or any of its subsidiaries is a
party or to which any of their respective property is
subject, that is required to be described in the Company's
latest Annual Report on Form 10-K filed pursuant to the
Exchange Act, or would be required to be so described, if
the facts and circumstances known to such counsel had been
known on the date of such filing, that is not so described.
(xiii) the Company is not and, after giving effect to
the offering and sale of the Senior Subordinated Notes and
the application of the net proceeds thereof as described in
the Offering Memorandum, will not be, an "investment
company" as such term is defined in the Investment Company
Act of 1940, as amended;
(xiv) to the best of such counsel's knowledge after
due inquiry, there are no contracts, agreements or
understandings between the Company or any Guarantor and any
person granting such person the right to require the
Company or such Guarantor to file a registration statement
under the Act with respect to any securities of the Company
or such Guarantor or to require the Company or such
Guarantor to include such securities with the Notes and
Subsidiary Guarantees registered pursuant to any
Registration Statement;
(xv) the Indenture complies as to form in all
material respects with the requirements of the TIA and the
rules and regulations of the Commission applicable to an
indenture which is qualified thereunder. It is not
necessary in connection with the offer, sale and delivery
of the Senior Subordinated Notes to the Initial Purchaser
in the manner contemplated by this Agreement or in
connection with the Exempt Resales to qualify the Indenture
under the TIA.
(xvi) no registration under the Act of the Senior
Subordinated Notes is required for the sale of the Senior
Subordinated Notes to the Initial Purchaser as contemplated
by this Agreement or for the Exempt Resales assuming that
(i) each Eligible Purchaser that purchases Notes is a QIB,
(ii) the accuracy of, and compliance with, the Initial
Purchaser's representations and agreements contained in
Section 7 of this Agreement, and (iii) the accuracy of the
representations of the Company and the Guarantors set forth
in Sections 6(bb), (dd), (ee) and (ff) of this Agreement.
(xvii) no facts came to such counsel's attention
which lead such counsel to believe that, as of the date of
the Offering Memorandum or as of the Closing Date, the
Offering Memorandum, as amended or supplemented, if
applicable (except for the financial or statements,
financial schedules and other financial or statistical data
included therein, as to which such counsel need not express
any belief) contains any untrue statement of a material
fact or omits to state a material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
The opinion of Foley & Lardner described in Section 9(d) above
shall be rendered to you at the request of the Company and the Guarantors
and shall so state therein. In giving such opinion with respect to the
matters covered by Section 9(d)(xxii), Foley & Lardner may state that
their opinion and belief are based upon their participation in the
preparation of the Offering Memorandum and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification except as specified. With respect to
matters covered by subsections 9(d)(iii), 9(d)(iv), 9(d)(x), 9(d)(xi)(iv)
and 9(d)(xiv), an opinion of the general counsel to the Company may be
substituted for that of Foley & Lardner. Except where McNeilus and the
McNeilus Subsidiary Guarantors are specifically identified in subsections
9(d)(i) - 9(d)(xvii), opinions contained therein with respect to McNeilus
and the McNeilus Subsidiary Guarantors may be given by Siegel, Brill,
Greupner, Duffy & Foster.
(e) The Initial Purchaser shall have received on the
Closing Date an opinion, dated the Closing Date, of Latham & Watkins,
counsel for the Initial Purchaser, in form and substance reasonably
satisfactory to the Initial Purchaser.
(f) The Initial Purchaser shall have received on the
Closing Date an opinion, dated the Closing Date and addressed to the
Company, which expressly permits the Initial Purchaser to rely thereon, of
Seigel, Brill, Greupner, Duffy & Foster, counsel to McNeilus and its
subsidiaries.
(g) The Initial Purchaser shall have received, at the time
this Agreement is executed and at the Closing Date, letters dated the date
hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchaser from Ernst & Young LLP, and Larson,
Allen, Weishair and Co., LLP, independent public accountants, containing
the information and statements of the type ordinarily included in
accountants' "comfort letters" to the Initial Purchaser with respect to
the financial statements and certain financial information contained in
the Offering Memorandum.
(h) The Senior Subordinated Notes shall have been approved
by the NASD for trading and duly listed in PORTAL.
(i) The Initial Purchaser shall have received a
counterpart, conformed as executed, of the Indenture which shall have been
entered into by the Company, the Guarantors (except McNeilus and the
McNeilus Subsidiary Guarantors) and the Trustee; the Initial Purchaser
shall have received signature pages of the Indenture for delivery
immediately upon consummation of the Acquisition from McNeilus and the
McNeilus Subsidiary Guarantors.
(j) The Company and the Guarantors (except McNeilus and
the McNeilus Subsidiary Guarantors) shall have executed the Registration
Rights Agreement and the Initial Purchaser shall have received an original
copy thereof, duly executed by the Company and the Guarantors (except
McNeilus and the McNeilus Subsidiary Guarantors); the Initial Purchaser
shall have received signature pages of the Registration Rights Agreement
for delivery immediately upon consummation of the Acquisition from
McNeilus and the McNeilus Subsidiary Guarantors.
(k) Neither the Company nor the Guarantors shall have
failed at or prior to the Closing Date to perform or comply with any of
the agreements herein contained and required to be performed or complied
with by the Company or the Guarantors, as the case may be, at or prior to
the Closing Date.
(l) The Company and the Guarantors (except McNeilus and
the McNeilus Subsidiary Guarantors) shall have executed this Agreement and
the Initial Purchaser shall have received an original copy thereof, duly
executed by the Company and the Guarantors (except McNeilus and the
McNeilus Subsidiary Guarantors); the Initial Purchaser shall have received
signature pages of this Agreement for delivery immediately upon
consummation of the Acquisition from McNeilus and the McNeilus Subsidiary
Guarantors.
(m) Prior to or on the Closing Date all material
conditions (as determined by the Initial Purchaser) to the consummation of
(a) the Acquisition and (b) the $325 million Senior Credit Facility (the
"Senior Credit Facility"), have been waived or satisfied and the parties
to the Acquisition Agreement and to the Senior Credit Agreement shall be,
in the reasonable judgment of the Initial Purchaser, prepared to close
immediately, in each case on substantially the same terms as described in
the Offering Memorandum.
10. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement
by the parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchaser by written notice to the Company if
any of the following has occurred: (i) any outbreak or escalation of
hostilities or other national or international calamity or crisis or
change in economic conditions or in the financial markets of the United
States or elsewhere that, in the Initial Purchaser's judgment, is material
and adverse and, in the Initial Purchaser's judgment, makes it
impracticable to market the Senior Subordinated Notes on the terms and in
the manner contemplated in the Offering Memorandum, (ii) the suspension or
material limitation of trading in securities or other instruments on the
New York Stock Exchange, the American Stock Exchange, the Chicago Board of
Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of
Trade or the Nasdaq National Market or limitation on prices for securities
or other instruments on any such exchange or the Nasdaq National Market,
(iii) the suspension of trading of any securities of the Company or any
Guarantor on any exchange or in the over-the-counter market, (iv) the
enactment, publication, decree or other promulgation of any federal or
state statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely
affects, or will materially and adversely affect, the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency
in respect of its monetary or fiscal affairs which in your opinion has a
material adverse effect on the financial markets in the United States.
11. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company or
any Guarantor, to Oshkosh Truck Corporation, P.O. Box 2566, Oshkosh,
Wisconsin 54903-2566, telephone number (414) 235-9151, and (ii) if to the
Initial Purchaser, BancAmerica Robertson Stephens, 231 South LaSalle
Street, Chicago, Illinois 60697, Attention: High-Yield Syndication
Department, or in any case to such other address as the person to be
notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, and warranties of the Company, the Guarantors and the
Initial Purchaser set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery
of and payment for the Senior Subordinated Notes, regardless of (i) any
investigation, or statement as to the results thereof, made by or on
behalf of the Initial Purchaser, the officers or directors of the Initial
Purchaser, any person controlling the Initial Purchaser, the Company, any
Guarantor, the officers or directors of the Company or any Guarantor, or
any person controlling the Company or any Guarantor, (ii) acceptance of
the Senior Subordinated Notes and payment for them hereunder and (iii)
termination of this Agreement; provided, however, that if this Agreement
is terminated by the Initial Purchaser pursuant to the second paragraph of
Section 10 hereof, the indemnities, contribution agreements,
representations and warranties of all of the parties hereto shall
immediately expire.
If for any reason the Senior Subordinated Notes are not
delivered by or on behalf of the Company as provided herein (other than as
a result of any termination of this Agreement pursuant to Section 10), the
Company and each Guarantor, jointly and severally, agree to reimburse the
Initial Purchaser for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any
termination of this Agreement, the Company shall be liable for all
expenses which it has agreed to pay pursuant to Section 5(i) hereof. The
Company and each Guarantor also agree, jointly and severally, to reimburse
the Initial Purchaser and its officers, directors and each person, if any,
who controls such Initial Purchaser within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act for any and all fees and
expenses (including without limitation the fees and expenses of counsel)
incurred by them in connection with enforcing their valid and legitimate
rights under this Agreement (including without limitation its rights under
Section 8).
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Guarantors, the Initial Purchaser, the Initial Purchaser's directors and
officers, any controlling persons referred to herein, the directors of the
Company and the Guarantors and their respective successors and assigns,
all as and to the extent provided in this Agreement, and no other person
shall acquire or have any right under or by virtue of this Agreement. The
term "successors and assigns" shall not include a purchaser of any of the
Senior Subordinated Notes from the Initial Purchaser merely because of
such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Guarantors and the Initial Purchaser.
Very truly yours,
OSHKOSH TRUCK CORPORATION
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
MCNEILUS TRUCK & MANUFACTURING, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
IOWA CONTRACT FABRICATORS, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
MCINTIRE FABRICATORS, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
KENSETT FABRICATORS, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
MCNEILUS COMPANIES, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
MCNEILUS FINANCIAL, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
PIERCE MANUFACTURING, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Vice President and
Chief Financial Officer
SUMMIT PERFORMANCE SYSTEMS, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Vice President and
Chief Financial Officer
BANCAMERICA ROBERTSON STEPHENS
By: /s/ Mark S. Dawley
Name: Mark S. Dawley
Title: Managing Director
<PAGE>
SCHEDULE A
Guarantors
Upon consummation of the Acquisition:
McNeilus Truck & Manufacturing, Inc.
Iowa Contract Fabricators, Inc.
McIntire Fabricators, Inc.
Kensett Fabricators, Inc.
McNeilus Companies, Inc.
McNeilus Financial, Inc.
Pierce Manufacturing, Inc.
Summit Performance Systems, Inc.
<PAGE>
SCHEDULE B
Subsidiaries
Upon consummation of the Acquisition:
McNeilus Truck & Manufacturing, Inc.
Iowa Contract Fabricators, Inc.
McIntire Fabricators, Inc.
Kensett Fabricators, Inc.
McNeilus Companies, Inc.
McNeilus Financial, Inc.
Pierce Manufacturing, Inc.
Summit Performance Systems, Inc.
McNeilus Financial Services, Inc.
Oshkosh/McNeilus Financial Services, Inc.
Nations Casualty Insurance, Inc.
Oshkosh Foreign Sales Corporation, Inc.
Pierce Manufacturing International Inc.
Dover Technologies, Inc.
<PAGE>
EXHIBIT A
Form of Registration Rights Agreement
<PAGE>
OSHKOSH TRUCK CORPORATION
EACH OF THE GUARANTORS NAMED HEREIN
$100,000,000
8-3/4% SENIOR SUBORDINATED NOTES DUE 2008
Purchase Agreement
February 20, 1998
BANCAMERICA ROBERTSON STEPHENS
F O L E Y & L A R D N E R
A T T O R N E Y S A T L A W
CHICAGO FIRSTAR CENTER SAN DIEGO
JACKSONVILLE 777 EAST WISCONSIN AVENUE SAN FRANCISCO
LOS ANGELES MILWAUKEE, WISCONSIN 53202-5367 TALLAHASSEE
MADISON TELEPHONE (414) 271-2400 TAMPA
ORLANDO FACSIMILE (414) 297-4900 WASHINGTON, D.C.
SACRAMENTO WEST PALM BEACH
WRITER'S DIRECT LINE
March 13, 1998
Oshkosh Truck Corporation
Pierce Manufacturing, Inc.
Summit Performance Systems, Inc.
McNeilus Companies, Inc.
McNeilus Truck & Manufacturing, Inc.
Iowa Contract Fabricators, Inc.
McIntire Fabricators, Inc.
Kensett Fabricators, Inc.
McNeilus Financial, Inc.
2307 Oregon Street
Oshkosh, Wisconsin 54903-2566
Ladies and Gentlemen:
We have acted as counsel for Oshkosh Truck Corporation, a
Wisconsin corporation (the "Company"), in connection with the preparation
of a Registration Statement on Form S-4, including the Prospects
constituting a part thereof (the "Registration Statement"), to be filed
with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Securities Act"), relating to an offer to exchange
(the "Exchange Offer") the Company's new 8 3/4% Senior Subordinated Notes
due 2008 (the "New Notes") for an equal principal amount of the Company's
outstanding 8 3/4% Senior Subordinated Notes due 2008 (the "Notes"). The
New Notes will be fully and unconditionally guaranteed on a senior
subordinated basis (the "New Note Guarantees") by, and will be joint and
several obligations of, Pierce Manufacturing Inc., a Wisconsin corporation
and a subsidiary of the Company, Summit Performance Systems, Inc., a
Wisconsin corporation and a subsidiary of the Company, McNeilus Companies,
Inc., a Minnesota corporation and a subsidiary of the Company, McNeilus
Truck & Manufacturing, Inc., a Minnesota corporation and a subsidiary of
the Company, Iowa Contract Fabricators, Inc., an Iowa corporation and a
subsidiary of the Company, McIntire Fabricators, Inc., an Iowa corporation
and a subsidiary of the Company, Kensett Fabricators, Inc., an Iowa
corporation and a subsidiary of the Company, and McNeilus Financial, Inc.,
a Texas corporation and a subsidiary of the Company (collectively, the
"Subsidiary Guarantors").
The Notes were issued, and the New Notes will be issued,
pursuant to an Indenture (the "Indenture") dated as of February 26, 1998,
by and among the Company, the Subsidiary Guarantors and Firstar Trust
Company, a Wisconsin state banking corporation, as Trustee (the
"Trustee").
In connection with our opinion, we have examined: (a) the
Registration Statement, including the Prospectus; (b) the Indenture
(included as Exhibit 4.2 to the Registration Statement); (c) the form of
the New Notes (included as Exhibit 4.3 to the Registration Statement; (d)
the form of the New Note Guarantees (included as Exhibit 4.4 to the
Registration Statement); and (e) such other proceedings, documents and
records as we have deemed necessary to enable us to render this opinion.
In our examinations of the above referenced documents, we have
assumed the genuineness of all signatures, the authenticity of all
documents, certificates and instruments submitted to us as originals and
the conformity with the originals of all documents submitted to us as
copies.
Based upon the foregoing, assuming that the Indenture has been
duly authorized, executed and delivered by, and represents the valid and
binding obligation of, the Trustee, and when the Registration Statement,
including any amendments thereto, shall have become effective under the
Securities Act and the Indenture shall have been duly qualified under the
Trust Indenture Act of 1939, as amended, and having regard for such legal
considerations as we deem relevant, we are of the opinion that:
1. The New Notes, when duly executed and delivered by or on
behalf of the Company in the form contemplated by the Indenture upon the
terms set forth in the Exchange Offer and authenticated by the Trustee or
an authenticating agent appointed by the Trustee in accordance with the
terms of the Indenture, will be legally issued and valid and binding
obligations of the Company enforceable in accordance with their terms; and
2. The New Note Guarantees, when duly executed and delivered
by or on behalf of the Subsidiary Guarantors in the form contemplated by
the Indenture upon the terms set forth in the Exchange Offer, will be
legally issued and valid and binding obligations of the Subsidiary
Guarantors enforceable in accordance with their terms;
except, in each case, as enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other
comparable laws affecting the enforcement of creditors' rights generally
or the application of equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
subject, in each case, to the qualification that certain provisions
thereof may be unenforceable in whole or in part under the laws of the
State of Wisconsin, but the inclusion of such provision does not affect
the validity of the New Notes or the New Note Guarantees and each of them
contain legally adequate provisions for the realization of the principal
legal rights and benefits afforded thereby.
We are qualified to practice law in the State of Wisconsin and
we do not purport to be experts on the law other than that of the State of
Wisconsin and the federal laws of the United States of America. In
rendering our opinions with respect to the New Notes and the New Note
Guarantees, we have assumed with your permission, and without independent
investigation, that the applicable laws of the States of New York,
Minnesota, Texas and Iowa are identical in all relevant respects to the
substantive laws of the State of Wisconsin. We express no opinion and
make no representation with respect to the law of any other jurisdiction.
We express no opinion herein with respect to the treatment of any "choice
of law" or similar provision contained in the New Notes, the New Note
Guarantees or the Indenture under Wisconsin law.
This opinion is solely for your benefit and it may not be relied
upon by any other person for any purpose without our prior written
consent, except that we hereby consent to the reference to our firm under
the caption "Legal Matters" in the Prospectus which is filed as part of
the Registration Statement, and to the filing of this opinion as an
exhibit to such Registration Statement. In giving this consent, we hereby
disclaim that we are experts within the meaning of Section 11 of the
Securities Act or within the category of persons whose consent is required
by Section 7 of the Securities Act. Our opinion is expressly limited to
the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company,
the Subsidiary Guarantors or any other person, or any other document or
agreement involved with the transactions contemplated by the Exchange
Offer. We assume no obligation to advise you of facts, circumstances,
events or developments which hereafter may be brought to our attention and
which may alter, affect or modify the opinion expressed herein.
Very truly yours,
/s/ Foley & Lardner
REGISTRATION RIGHTS AGREEMENT
Dated as of February 26, 1998
by and among
OSHKOSH TRUCK CORPORATION
THE SUBSIDIARY GUARANTORS party hereto
and
BANCAMERICA ROBERTSON STEPHENS
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
entered into as of February 26, 1998, by and among Oshkosh Truck
Corporation, a Wisconsin corporation (the "Company"), the Subsidiary
Guarantors (as defined herein), and BancAmerica Robertson Stephens (the
"Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement, dated
February 20, 1998, (the "Purchase Agreement"), by and among the Company,
the Subsidiary Guarantors and the Initial Purchaser, which provides for
the sale by the Company to the Initial Purchaser of an aggregate of $100
million principal amount of the Company's 8 % Senior Subordinated Notes
due 2008 (the "Notes"). In order to induce the Initial Purchaser to
purchase the Notes, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution and delivery of this
Agreement is a condition to the obligations of the Initial Purchaser set
forth in Section 9 of the Purchase Agreement. Capitalized terms used
herein and not otherwise defined shall have the meaning assigned to them
in the Indenture, dated the date hereof, among the Company, the Subsidiary
Guarantors and Firstar Trust Company, as Trustee, relating to the Notes
(the "Indenture").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Affiliate: As defined in Rule 144 of the Act.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period not less
than the period required pursuant to Section 3(b) hereof, and (c) the
delivery by the Company to the Registrar under the Indenture of Exchange
Notes in the same aggregate principal amount as the aggregate principal
amount of Notes tendered by Holders thereof pursuant to the Exchange
Offer.
Effectiveness Deadline: As defined in Section 3(a) and 4(a) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Notes: The Company's 8 % Senior Subordinated Notes due
2008 to be issued pursuant to the Indenture: (i) in the Exchange Offer or
(ii) as contemplated by Section 4 hereof.
Exchange Offer: The exchange and issuance by the Company of a
principal amount of Exchange Notes (which shall be registered pursuant to
the Exchange Offer Registration Statement) equal to the outstanding
principal amount of Notes that are tendered by such Holders in connection
with such exchange and issuance.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchaser
proposes to sell the Notes to a limited number of "qualified
institutional buyers," as such term is defined in Rule 144A under the Act,
to certain "accredited investors," as such term is defined in Rule
501(a)(1), (2), (3), (5) and (7) of Regulation D under the Act and
pursuant to Regulation S under the Act.
Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.
Holders: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Prospectus: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
Recommencement Date: As defined in Section 6(e) hereof.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
and the Subsidiary Guarantors relating to (a) an offering of Exchange
Notes and the related Subsidiary Guarantees pursuant to an Exchange Offer
or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, in each case, (i) that is
filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto
(including post-effective amendments) and all exhibits and material
incorporated by reference therein.
Regulation S: Regulation S promulgated under the Act.
Restricted Broker-Dealer: Any Broker-Dealer that holds Exchange
Notes that were acquired in the Exchange Offer in exchange for Notes that
such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Notes acquired
directly from the Company or any of its affiliates).
Rule 144: Rule 144 promulgated under the Act.
Shelf Registration Statement: As defined in Section 4 hereof.
Suspension Notice: As defined in Section 6(e) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each (i) Note and the related
Subsidiary Guarantees, until the earliest to occur of (a) the date on
which such Note is exchanged for an Exchange Note in the Exchange Offer
and entitled to be resold to the public by the Holder thereof without
complying with the prospectus delivery requirements of the Act, (b) the
date on which such Note has been disposed of in accordance with a Shelf
Registration Statement, (c) the date on which such Note is distributed to
the public pursuant to Rule 144 under the Act, and (ii) Exchange Note and
the related Subsidiary Guarantees acquired by a Restricted Broker-Dealer
in the Exchange Offer until the date on which such Note is disposed of by
a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the
Prospectus contained therein).
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person owns Transfer Restricted
Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have
been complied with), the Company and the Subsidiary Guarantors shall (i)
cause the Exchange Offer Registration Statement to be filed with the
Commission as soon as practicable after the Closing Date (the "Exchange
Offer Filing Date"), but in no event later than 60 days after the Closing
Date (such 60th day being the "Filing Deadline"), (ii) use its best
efforts to cause such Exchange Offer Registration Statement to become
effective at the earliest possible time, but in no event later than 150
days after the Closing Date (such 150th day being the "Effectiveness
Deadline"), (iii) in connection with the foregoing, (A) file all pre-
effective amendments to such Exchange Offer Registration Statement as may
be necessary in order to cause it to become effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all necessary
filings, if any, in connection with the registration and qualification of
the Exchange Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange
Offer, and (iv) upon the effectiveness of such Exchange Offer Registration
Statement, commence and Consummate the Exchange Offer. The Exchange Offer
shall be on the appropriate form permitting registration of the Exchange
Notes to be offered in exchange for the Notes that are Transfer Restricted
Securities and to permit resales of Exchange Notes by Restricted Broker-
Dealers that tendered into the Exchange Offer for Notes that such
Restricted Broker-Dealer acquired for its own account as a result of
market making activities or other trading activities (other than Notes
acquired directly from the Company or any of its Affiliates) as
contemplated by Section 3(c) below.
(b) The Company and the Subsidiary Guarantors shall use their
respective best efforts to cause the Exchange Offer Registration Statement
to be effective continuously, and shall keep the Exchange Offer open for a
period of not less than the minimum period required under applicable
federal and state securities laws to Consummate the Exchange Offer;
provided, however, that in no event shall such period be less than 20
Business Days. The Company and the Subsidiary Guarantors shall cause the
Exchange Offer to comply with all applicable federal and state securities
laws. No securities other than the Exchange Notes shall be included in
the Exchange Offer Registration Statement. The Company and the Subsidiary
Guarantors shall use their respective best efforts to cause the Exchange
Offer to be Consummated on the earliest practicable date after the
Exchange Offer Registration Statement has become effective, but in no
event later than 180 days after the Closing Date.
(c) The Company shall include a "Plan of Distribution" section in
the Prospectus contained in the Exchange Offer Registration Statement and
indicate therein that any Restricted Broker-Dealer who holds Transfer
Restricted Securities that were acquired for the account of such
Restricted Broker-Dealer as a result of market-making activities or other
trading activities (other than Transfer Restricted Securities acquired
directly from the Company or any Affiliate of the Company), may exchange
such Transfer Restricted Securities pursuant to the Exchange Offer;
however, such Restricted Broker-Dealer may be deemed to be an
"underwriter" within the meaning of the Act and must, therefore, deliver a
prospectus meeting the requirements of the Act in connection with its
initial sale of any Exchange Notes received by such Restricted Broker-
Dealer in the Exchange Offer and that the Prospectus contained in the
Exchange Offer Registration Statement may be used to satisfy such
prospectus delivery requirement. Such "Plan of Distribution" section
shall also contain all other information with respect to such sales by
such Restricted Broker-Dealers that the Commission may require in order to
permit such sales pursuant thereto, but such "Plan of Distribution" shall
not name any such Restricted Broker-Dealer or disclose the amount of
Transfer Restricted Securities held by any such Restricted Broker-Dealer,
except to the extent required by the Commission as a result of a change in
policy, rules or regulations after the date of this Agreement. See the
Shearman & Sterling no-action letter (available July 2, 1993).
To the extent necessary to ensure that the Exchange Offer
Registration Statement is available for sales of Exchange Notes by
Restricted Broker-Dealers, the Company and the Subsidiary Guarantors agree
to use their respective best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) hereof and in conformity with
the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period
of one year (270 days if the only Restricted Broker-Dealer or Restricted
Broker-Dealers that have requested Prospectuses from the Company pursuant
to the next sentence are not the Initial Purchaser or Affiliates of the
Initial Purchaser) from the date on which the Exchange Offer is
Consummated, or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Registration Statement have been
sold pursuant thereto. The Company and the Subsidiary Guarantors shall
promptly provide sufficient copies of the latest version of such
Prospectus to such Restricted Broker-Dealers promptly upon request, and in
no event later than one day after such request, at any time during such
period.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not permitted
by applicable law (after the Company and the Subsidiary Guarantors have
complied with the procedures set forth in Section 6(a)(i) below), (ii) if
any Holder of Transfer Restricted Securities shall notify the Company
within 20 Business Days following the Consummation of the Exchange Offer
that (A) such Holder was prohibited by law or Commission policy from
participating in the Exchange Offer or (B) such Holder may not resell the
Exchange Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by
such Holder or (C) such Holder is a Broker-Dealer and holds Notes acquired
directly from the Company or any of its Affiliates, or (iii) the Exchange
Offer Registration Statement is not declared effective within 180 days
after the Closing Date, then the Company and the Subsidiary Guarantors
shall:
(x) cause to be filed, on or prior to 60 days after the earlier of
(i) the date on which the Company determines that the Exchange Offer
Registration Statement cannot be filed as a result of clause (a)(i) above
and (ii) the date on which the Company receives the notice specified in
clause (a) (ii) above and (iii) the date in clause (a)(iii) above (such
earlier date, the "Filing Deadline"), a shelf registration statement
pursuant to Rule 415 under the Act (which may be an amendment to the
Exchange Offer Registration Statement (the "Shelf Registration
Statement")), relating to all Transfer Restricted Securities, and
(y) shall use their respective best efforts to cause such Shelf
Registration Statement to become effective on or prior to 90 days after
the Filing Deadline (such 90th day the "Effectiveness Deadline").
If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the
Company is required to file and make effective a Shelf Registration
Statement solely because the Exchange Offer is not permitted under
applicable federal law, then the filing of the Exchange Offer Registration
Statement shall be deemed to satisfy the requirements of clause (x) above;
provided that, in such event, the Company shall remain obligated to meet
the Effectiveness Deadline set forth in clause (y).
The Company and the Subsidiary Guarantors shall use their respective
best efforts to keep any Shelf Registration Statement required by this
Section 4(a) continuously effective, supplemented and amended as required
by and subject to the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for sales of Transfer
Restricted Securities by the Holders thereof entitled to the benefit of
this Section 4(a), and to ensure that it conforms with the requirements of
this Agreement, the Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period of at least two
years (as extended pursuant to Section 6(c)(i)) following the date on
which such Shelf Registration Statement first becomes effective under the
Act, or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been sold pursuant
thereto.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any
Shelf Registration Statement pursuant to this Agreement unless and until
such Holder furnishes to the Company in writing, within 20 days after
receipt of a request therefor, the information specified in Item 507 or
508 of Regulation S-K, as applicable, of the Act for use in connection
with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities
shall be entitled to liquidated damages pursuant to Section 5 hereof
unless and until such Holder shall have provided all such information.
Each selling Holder agrees to promptly furnish additional information
required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline,
(ii) any such Registration Statement has not been declared effective by
the Commission on or prior to the applicable Effectiveness Deadline, (iii)
the Exchange Offer has not been Consummated within 30 Business Days after
the Effectiveness Deadline or (iv) any Registration Statement required by
this Agreement is filed and declared effective but shall thereafter cease
to be effective or fail to be usable for its intended purpose without
being succeeded immediately by a post-effective amendment to such
Registration Statement that cures such failure and that is itself declared
effective immediately (each such event referred to in clauses (i) through
(iv), a "Registration Default"), then the Company and the Subsidiary
Guarantors hereby jointly and severally agree to pay to each Holder of
Transfer Restricted Securities affected thereby liquidated damages in an
amount equal to $.05 per week per $1,000 in principal amount of Transfer
Restricted Securities held by such Holder for each week or portion thereof
that the Registration Default continues for the first 90-day period
immediately following the occurrence of such Registration Default. The
amount of the liquidated damages shall increase by an additional $.05 per
week per $1,000 in principal amount of Transfer Restricted Securities with
respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of liquidated damages of $.25 per
week per $1,000 in principal amount of Transfer Restricted Securities;
provided that the Company and the Subsidiary Guarantors shall in no event
be required to pay liquidated damages for more than one Registration
Default at any given time. Notwithstanding anything to the contrary set
forth herein, (1) upon filing of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the case of
(i) above, (2) upon the effectiveness of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in
the case of (ii) above, (3) upon Consummation of the Exchange Offer, in
the case of (iii) above, or (4) upon the filing of a post-effective
amendment to the Registration Statement or an additional Registration
Statement that causes the Exchange Offer Registration Statement (and/or,
if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of (iv) above, the liquidated damages
payable with respect to the Transfer Restricted Securities as a result of
such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the
Indenture, on each Interest Payment Date, as more fully set forth in the
Indenture and the Notes. All obligations of the Company and the
Subsidiary Guarantors set forth in the preceding paragraph that are
outstanding with respect to any Transfer Restricted Security at the time
such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such Security
shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Subsidiary Guarantors shall comply
with all applicable provisions of Section 6(c) below, shall use their
respective best efforts to effect such exchange and to permit the resale
of Exchange Notes by Restricted Broker-Dealers that tendered in the
Exchange Offer Notes that such Restricted Broker-Dealer acquired for its
own account as a result of its market making activities or other trading
activities (other than Notes acquired directly from the Company or any of
its Affiliates) being sold in accordance with the intended method or
methods of distribution thereof, and shall comply with all of the
following provisions:
(i) If, following the date hereof there has been announced a change
in Commission policy with respect to exchange offers such as the Exchange
Offer, that in the reasonable opinion of counsel to the Company raises a
substantial question as to whether the Exchange Offer is permitted by
applicable federal law, the Company and the Subsidiary Guarantors hereby
agree to seek a no-action letter or other favorable decision from the
Commission allowing the Company and the Subsidiary Guarantors to
Consummate an Exchange Offer for such Transfer Restricted Securities. The
Company and the Subsidiary Guarantors hereby agree to pursue the issuance
of such a decision to the Commission staff level. In connection with the
foregoing, the Company and the Subsidiary Guarantors hereby agree to take
all such other actions as may be requested by the Commission or otherwise
required in connection with the issuance of such decision, including
without limitation (A) participating in telephonic conferences with the
Commission, (B) delivering to the Commission staff an analysis prepared by
counsel to the Company setting forth the legal basis, if any, upon which
such counsel has concluded that such an Exchange Offer should be permitted
and (C) diligently pursuing a resolution (which need not be favorable) by
the Commission staff.
(ii) As a condition to its participation in the Exchange Offer, each
Holder of Transfer Restricted Securities (including, without limitation,
any Holder who is a Broker-Dealer) shall furnish, upon the request of the
Company, prior to the Consummation of the Exchange Offer, a written
representation to the Company and the Subsidiary Guarantors (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an Affiliate of
the Company, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any person to participate in,
a distribution of the Exchange Notes to be issued in the Exchange Offer
and (C) it is acquiring the Exchange Notes in its ordinary course of
business. Each Holder using the Exchange Offer to participate in a
distribution of the Exchange Notes will thereby be required to acknowledge
and agree that, if the resales are of Exchange Notes obtained by such
Holder in exchange for Notes acquired directly from the Company or an
Affiliate thereof, it (1) could not, under Commission policy as in effect
on the date of this Agreement, rely on the position of the Commission
enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and
Exxon Capital Holdings Corporation (available May 13, 1988), as
interpreted in the Commission's letter to Shearman & Sterling dated July
2, 1993, and similar no-action letters (including, if applicable, any no-
action letter obtained pursuant to clause (i) above), and (2) must comply
with the registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a secondary
resale transaction must be covered by an effective registration statement
containing the selling security holder information required by Item 507 or
508, as applicable, of Regulation S-K.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Subsidiary Guarantors shall provide a
supplemental letter to the Commission (A) stating that the Company and the
Subsidiary Guarantors are registering the Exchange Offer in reliance on
the position of the Commission enunciated in Exxon Capital Holdings
Corporation (available May 13, 1988), Morgan Stanley and Co., Inc.
(available June 5, 1991) as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and, if applicable, any no-action
letter obtained pursuant to clause (i) above, (B) including a
representation that neither the Company nor any Subsidiary Guarantor has
entered into any arrangement or understanding with any Person to
distribute the Exchange Notes to be received in the Exchange Offer and
that, to the best of the Company's and each Subsidiary Guarantor's
information and belief, each Holder participating in the Exchange Offer is
acquiring the Exchange Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the
distribution of the Exchange Notes received in the Exchange Offer and (C)
any other undertaking or representation required by the Commission as set
forth in any no-action letter obtained pursuant to clause (i) above, if
applicable.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Subsidiary Guarantors shall
comply with all the provisions of Section 6(c) below and shall use their
respective best efforts to effect such registration to permit the sale of
the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company and the Subsidiary Guarantors will prepare
and file with the Commission a Registration Statement relating to the
registration on any appropriate form under the Act, which form shall be
available for the sale of the Transfer Restricted Securities in accordance
with the intended method or methods of distribution thereof within the
time periods and otherwise in accordance with the provisions hereof.
(c) General Provisions Applicable to All Registration Statements.
In connection with any Registration Statement and any related Prospectus
required by this Agreement, the Company and the Subsidiary Guarantors
shall:
(i) use their respective best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that
would cause any such Registration Statement or the Prospectus
contained therein (A) to contain a material misstatement or omission
or (B) not to be effective and usable for resale of Transfer
Restricted Securities during the period required by this Agreement,
the Company and the Subsidiary Guarantors shall file promptly an
appropriate amendment to such Registration Statement curing such
defect, and, if Commission review is required, use their respective
best efforts to cause such amendment to be declared effective as soon
as practicable; if at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, or
any state securities commission or other regulatory authority shall
issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state
securities or Blue Sky laws, the Company and the Subsidiary
Guarantors shall use their respective best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as
may be necessary to keep such Registration Statement effective for
the applicable period set forth in Section 3 or 4 hereof, as the case
may be; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Act, and to comply fully with Rules 424, 430A and
462, as applicable, under the Act in a timely manner; and comply with
the provisions of the Act with respect to the disposition of all
securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods
of distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being
Transfer Restricted Securities, cooperate with the selling Holders to
facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not
bearing any restrictive legends; and to register such Transfer
Restricted Securities in such denominations and such names as the
selling Holders may request at least two Business Days prior to such
sale of Transfer Restricted Securities;
(iv) use their respective best efforts to cause the disposition
of the Transfer Restricted Securities covered by the Registration
Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof to consummate the disposition of such
Transfer Restricted Securities; provided, however, that neither the
Company nor any Subsidiary Guarantor shall be required to register or
qualify as a foreign corporation where it is not now so qualified or
to take any action that would subject it to the service of process in
suits or to taxation, other than as to matters and transactions
relating to the Registration Statement, in any jurisdiction where it
is not now so subject;
(v) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide
the Trustee under the Indenture with certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with
the Depository Trust Company;
(vi) otherwise use their respective best efforts to comply with
all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term
is defined in paragraph (c) of Rule 158 under the Act); and
(vii) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate
with the Trustee and the Holders to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee to execute, all documents that may be
required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to
be so qualified in a timely manner.
(d) Additional Provisions Applicable to Shelf Registration
Statements and Certain Prospectuses. In connection with any shelf
Registration or any Prospectus included in an Exchange Offer Registration
Statement that is required to be delivered by a Restricted Broker-Dealer
that is the Initial Purchaser or an Affiliate of the Initial Purchaser,
the Company and the Subsidiary Guarantors shall:
(i) advise the selling Holders or such Restricted Broker-Dealer
promptly and, if requested by such Persons, confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
applicable Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by
the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional
information relating thereto, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement under the Act or of the suspension by any state securities
commission of the qualification of the Transfer Restricted Securities
for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, (D) of the existence of
any fact or the happening of any event that makes any statement of a
material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated by
reference therein untrue, or that requires the making of any
additions to or changes in the Registration Statement in order to
make the statements therein not misleading, or that requires the
making of any additions to or changes in the Prospectus in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the
Company and the Subsidiary Guarantors shall use their respective best
efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
(ii) if any fact or event contemplated by Section 6(d)(i)(D)
above shall exist or have occurred, prepare a supplement or post-
effective amendment to the Registration Statement or related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(iii) furnish to any Restricted Broker-Dealer that is the
Initial Purchaser or an Affiliate of the Initial Purchaser and each
selling Holder named in any Shelf Registration Statement or
Prospectus in connection with such sale, if any, before filing with
the Commission, copies of any Registration Statement or any
Prospectus included therein or any amendments or supplements to any
such Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the
review and comment of such Restricted Broker-Dealer or Holders in
connection with such sale, if any, for a period of at least five
Business Days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents
incorporated by reference) to which such Restricted Broker- Dealer or
selling Holders of the Transfer Restricted Securities covered by such
Registration Statement in connection with such sale, if any, shall
reasonably object within five Business Days after the receipt
thereof. Any such objection by such Restricted Broker- Dealer or
selling Holder shall be deemed to be reasonable if such Registration
Statement, amendment, Prospectus or supplement, as applicable, as
proposed to be filed, contains a material misstatement or omission or
fails to comply with the applicable requirements of the Act, which
misstatement, omission or failure has not been corrected within such
five Business Days period;
(iv) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the selling Holders or
such Restricted Broker- Dealer in connection with such sale, if any,
make the Company's and the Subsidiary Guarantors' representatives
available for discussion of such document and other customary due
diligence matters, and include such information in such document
prior to the filing thereof as such selling Holders may reasonably
request;
(v) make available at reasonable times for inspection by the
selling Holders participating in any disposition pursuant to such
Registration Statement and any attorney or accountant retained by
such selling Holders or such Restricted Broker- Dealer, all financial
and other records, pertinent corporate documents of the Company and
the Subsidiary Guarantors and cause the Company's and the Subsidiary
Guarantors' officers, directors and employees to supply all
information reasonably requested by any such selling Holder, attorney
or accountant in connection with such Registration Statement or any
post-effective amendment thereto subsequent to the filing thereof and
prior to its effectiveness;
(vi) if requested by any selling Holders in connection with
such sale, if any, promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such selling Holders may reasonably
request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be
included in such Prospectus supplement or post-effective amendment;
(vii) furnish to each selling Holder in connection with such
sale, if any, without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment
thereto, including all documents incorporated by reference therein
and all exhibits (including exhibits incorporated therein by
reference);
(viii) deliver to each selling Holder, without charge, as many
copies of the Prospectus (including each preliminary prospectus) and
any amendment or supplement thereto as such Persons reasonably may
request; the Company and the Subsidiary Guarantors hereby consent to
the use (in accordance with law) of the Prospectus and any amendment
or supplement thereto by each of the selling Holders in connection
with the offering and the sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto;
(ix) upon the request of any selling Holder, enter into such
agreements (including underwriting agreements) and make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to any
applicable Registration Statement contemplated by this Agreement as
may be reasonably requested by any Holder of Transfer Restricted
Securities in connection with any sale or resale pursuant to any
applicable Registration Statement and in such connection, the Company
and the Subsidiary Guarantors shall:
A) upon request of any selling Holder, furnish (or in the case
of paragraphs (2) and (3), use their respective best efforts to cause
to be furnished) to each selling Holder, upon the effectiveness of
the Shelf Registration Statement or upon Consummation of the Exchange
Offer, as the case may be:
(1) a certificate, dated such date, signed on behalf of
the Company and each Subsidiary Guarantor by (x) the President
or any Vice President and (y) a principal financial or
accounting officer of the Company and such Subsidiary Guarantor,
confirming, as of the date thereof, the matters set forth in
Sections 9(a), (b) and (c) of the Purchase Agreement and such
other similar matters as the selling Holders may reasonably
request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer, or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Subsidiary Guarantors covering matters similar
to those set forth in Section 9(d) of the Purchase Agreement and
such other matter as the selling Holders may reasonably request,
and in any event including a statement to the effect that such
counsel has participated in conferences with officers and other
representatives of the Company and the Subsidiary Guarantors,
representatives of the independent public accountants for the
Company and the Subsidiary Guarantors and have considered the
matters required to be stated therein and the statements
contained therein, although such counsel has not independently
verified the accuracy, completeness or fairness of such
statements; and that such counsel advises that, on the basis of
the foregoing, no facts came to such counsel's attention that
caused such counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective and, in the
case of the Exchange Offer Registration Statement, as of the
date of Consummation of the Exchange Offer, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus
contained in such Registration Statement as of its date and, in
the case of the opinion dated the date of Consummation of the
Exchange Offer, as of the date of Consummation, contained an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made,
not misleading. Without limiting the foregoing, such counsel
may state further that such counsel assumes no responsibility
for, and has not independently verified, the accuracy,
completeness or fairness of the financial statements, notes and
schedules and other financial and statistical data included in
any Registration Statement contemplated by this Agreement or the
related Prospectus; and
(3) a customary comfort letter, dated the date of
Consummation of the Exchange Offer, or as of the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with
underwritten offerings, and affirming the matters set forth in
the comfort letters delivered pursuant to Section 9(g) of the
Purchase Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders or such Restricted
Broker-Dealers to evidence compliance with clause (A) above and with
any customary conditions contained in any agreement entered into by
the Company and the Subsidiary Guarantors pursuant to this clause
(xi);
(x) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders or such Restricted
Broker-Dealers and their counsel in connection with the registration
and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling
Holders may request and do any and all other acts or things necessary
or advisable to enable the disposition in such jurisdictions of the
Transfer Restricted Securities covered by the applicable Registration
Statement; provided, however, that neither the Company nor any
Subsidiary Guarantor shall be required to register or qualify as a
foreign corporation where it is not now so qualified or to take any
action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
(xi) issue, upon the request of any Holder of Notes covered by
any Shelf Registration Statement contemplated by this Agreement,
Exchange Notes having an aggregate principal amount equal to the
aggregate principal amount of Notes surrendered to the Company by
such Holder in exchange therefor or being sold by such Holder; such
Exchange Notes to be registered in the name of such Holder or in the
name of the purchaser(s) of such Exchange Notes, as the case may be;
in return, the Notes held by such Holder shall be surrendered to the
Company for cancellation;
(xii) make appropriate officers of the Company available to the
selling Holders or such Restricted Broker- Dealer for meetings with
prospective purchasers of the Transfer Restricted Securities and
prepare and present to potential investors customary "road show"
material in a manner consistent with other new issuances of other
securities similar to the Transfer Restricted Securities; and
(xiii) provide promptly to each Holder and such Restricted
Broker-Dealer upon request each document filed with the Commission
pursuant to the requirements of Section 13 or Section 15(d) of the
Exchange Act.
(e) Restrictions on Holders. Each Holder and Restricted Broker-
Dealer agrees by acquisition of a Transfer Restricted Security that, upon
receipt of the notice referred to in Section 6(c)(i) or any notice from
the Company of the existence of any fact of the kind described in Section
6(d)(i)(D) hereof (in each case, a "Suspension Notice"), such Holder will
forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until (i) such Holder
has received copies of the supplemented or amended Prospectus contemplated
by Section 6(d)(ii) hereof, or (ii) such Holder or such Restricted Broker-
Dealer is advised in writing by the Company that the use of the Prospectus
may be resumed, and has received copies of any additional or supplemental
filings that are incorporated by reference in the Prospectus (in each
case, the "Recommencement Date"). Each Holder receiving a Suspension
Notice hereby agrees that it will either (i) destroy any Prospectuses,
other than permanent file copies, then in its possession which have been
replaced by the Company with more recently dated Prospectuses or (ii)
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in its possession of the Prospectus covering
such Transfer Restricted Securities that was current at the time of
receipt of the Suspension Notice. The time period regarding the required
period for effectiveness of such Registration Statement set forth in
Section 3 or 4 hereof, as applicable, shall be extended by a number of
days equal to the number of days in the period from and including the date
of delivery of the Suspension Notice to the date of delivery of the
Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Subsidiary
Guarantors' performance of or compliance with this Agreement will be borne
by the Company, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing
fees and expenses; (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) all expenses of
printing (including printing certificates for the Exchange Notes to be
issued in the Exchange Offer and printing of Prospectuses), messenger and
delivery services and telephone; (iv) all fees and disbursements of
counsel for the Company, the Subsidiary Guarantors and the Holders of
Transfer Restricted Securities; (v) all application and filing fees in
connection with listing the Exchange Notes on a national securities
exchange or automated quotation system pursuant to the requirements
hereof; and (vi) all fees and disbursements of independent certified
public accountants of the Company and the Subsidiary Guarantors (including
the expenses of any special audit and comfort letters required by or
incident to such performance).
The Company will, in any event, bear its and the Subsidiary
Guarantors' internal expenses (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), the expenses of any annual audit and the fees and expenses of any
Person, including special experts, retained by the Company or the
Subsidiary Guarantors.
(b) In connection with any Shelf Registration Statement required by
this Agreement or resale by a Restricted Broker-Dealer that is the Initial
Purchaser or an Affiliate of the Initial Purchaser, such Holders of
Transfer Restricted Securities being tendered in the Exchange Offer and/or
resold pursuant to the "Plan of Distribution" contained in the Exchange
Offer Registration Statement or registered pursuant to the Shelf
Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Latham & Watkins,
unless another firm shall be chosen by the Holders of a majority in
principal amount of the Transfer Restricted Securities for whose benefit
such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Subsidiary Guarantors agree, jointly and
severally, to indemnify and hold harmless (i) each Holder and (ii) each
person, if any, who controls (within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act) any Holder (any of the persons referred
to in this clause (ii) being hereinafter referred to as a "controlling
person") and (iii) the respective officers, directors, partners,
employees, representatives and agents of any Holder or any controlling
person (any person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as an "Indemnified Holder"), from and against
any and all losses, claims, damages, liabilities, judgments, (including
without limitation, any legal or other expenses incurred in connection
with investigating or defending any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement, preliminary
prospectus or Prospectus (or any amendment or supplement thereto) provided
by the Company to any holder or any prospective purchaser of Exchange
Notes, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by an untrue statement or
omission or alleged untrue statement or omission that is based upon
information relating to any of the Holders furnished in writing to the
Company by any of the Holders.
(b) Each Holder of Transfer Restricted Securities agrees, severally
and not jointly, to indemnify and hold harmless the Company and the
Subsidiary Guarantors, and their respective directors and officers, and
each person, if any, who controls (within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act) the Company, or the Subsidiary
Guarantors to the same extent as the foregoing indemnity from the Company
and the Subsidiary Guarantors to each of the Indemnified Holders, but only
with reference to information relating to such Indemnified Holder
furnished in writing to the Company by such Indemnified Holder expressly
for use in any Registration Statement. In no event shall any Indemnified
Holder be liable or responsible for any amount in excess of the amount by
which the total amount received by such Indemnified Holder with respect to
its sale of Transfer Restricted Securities pursuant to a Registration
Statement exceeds (i) the amount paid by such Indemnified Holder for such
Transfer Restricted Securities and (ii) the amount of any damages that
such Indemnified Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying
person") in writing and the indemnifying party shall assume the defense of
such action, including the employment of counsel reasonably satisfactory
to the indemnified party and the payment of all fees and expenses of such
counsel, as incurred (except that in the case of any action in respect of
which indemnity may be sought pursuant to both Sections 8(a) and 8(b), an
Indemnified Holder shall not be required to assume the defense of such
action pursuant to this Section 8(c), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such
counsel, except as provided below, shall be at the expense of the
Indemnified Holder). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense
of the indemnified party unless (i) the employment of such counsel shall
have been specifically authorized in writing by the indemnifying party,
(ii) the indemnifying party shall have failed to assume the defense of
such action or employ counsel reasonably satisfactory to the indemnified
party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party
(in which case the indemnifying party shall not have the right to assume
the defense of such action on behalf of the indemnified party). In any
such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all
indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by a majority
of the Indemnified Holders, in the case of the parties indemnified
pursuant to Section 8(a), and by the Company, in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii)
effected without its written consent if the settlement is entered into
more than twenty business days after the indemnifying party shall have
received a request from the indemnified party for reimbursement for the
fees and expenses of counsel (in any case where such fees and expenses are
at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any
pending or threatened action in respect of which the indemnified party is
or could have been a party and indemnity or contribution may be or could
have been sought hereunder by the indemnified party, unless such
settlement, compromise or judgment (i) includes an unconditional release
of the indemnified party from all liability on claims that are or could
have been the subject matter of such action and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act,
by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or judgments (i) in
such proportion as is appropriate to reflect the relative benefits
received by the Company and the Subsidiary Guarantors, on the one hand,
and the Holders, on the other hand, from their sale of Transfer Restricted
Securities or (ii) if the allocation provided by clause 8(d)(i) is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 8(d)(i) above
but also the relative fault of the Company and the Subsidiary Guarantors,
on the one hand, and of the Indemnified Holder, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company and the
Subsidiary Guarantors, on the one hand, and of the Indemnified Holder, on
the other hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or such Subsidiary Guarantor, on the
one hand, or by the Indemnified Holder, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities
and judgments referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of Section 8(a), any legal
or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim.
The Company, the Subsidiary Guarantors and each Holder agree that it
would not be just and equitable if contribution pursuant to this Section
8(d) were determined by pro rata allocation (even if the Holders were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including
any action that could have given rise to such losses, claims, damages,
liabilities or judgments. Notwithstanding the provisions of this Section
8, no Holder or its related Indemnified Holders shall be required to
contribute, in the aggregate, any amount in excess of the amount by which
the total received by such Holder with respect to the sale of its Transfer
Restricted Securities pursuant to a Registration Statement exceeds the sum
of (A) the amount paid by such Holder for such Transfer Restricted
Securities plus (B) the amount of any damages which such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each of the
Holders hereunder and not joint.
SECTION 9. RULE 144A
The Company and each Subsidiary Guarantor hereby agrees with each
Holder, for so long as any Transfer Restricted Securities remain
outstanding and during any period in which the Company or such Subsidiary
Guarantor is not subject to Section 13 or 15(d) of the Securities Exchange
Act, to make available, upon request of any Holder of Transfer Restricted
Securities, to any Holder or beneficial owner of Transfer Restricted
Securities in connection with any sale thereof and any prospective
purchaser of such Transfer Restricted Securities designated by such Holder
or beneficial owner, the information required by Rule 144A(d)(4) under the
Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company and the Subsidiary Guarantors acknowledge
and agree that any failure by the Company and/or the Subsidiary Guarantors
to comply with their respective obligations under Sections 3 and 4 hereof
may result in material irreparable injury to the Initial Purchaser or the
Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the
event of any such failure, the Initial Purchaser or any Holder may obtain
such relief as may be required to specifically enforce the Company's and
the Subsidiary Guarantors' obligations under Sections 3 and 4 hereof. The
Company and the Subsidiary Guarantors further agree to waive the defense
in any action for specific performance that a remedy at law would be
adequate.
(b) No Inconsistent Agreements. Neither the Company nor any
Subsidiary Guarantor will, on or after the date of this Agreement, enter
into any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof. Neither the Company nor any
Subsidiary Guarantor has previously entered into any agreement granting
any registration rights with respect to its securities to any Person. The
rights granted to the Holders hereunder do not in any way conflict with
and are not inconsistent with the rights granted to the holders of the
Company's and the Subsidiary Guarantors' securities under any agreement in
effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless (i) in the
case of Section 5 hereof and this Section 10(c)(i), the Company has
obtained the written consent of Holders of all outstanding Transfer
Restricted Securities and (ii) in the case of all other provisions hereof,
the Company has obtained the written consent of Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities
(excluding Transfer Restricted Securities held by the Company of its
Affiliates). Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the
Exchange Offer and that does not affect directly or indirectly the rights
of other Holders whose securities are not being tendered pursuant to such
Exchange Offer may be given by the Holders of a majority of the
outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Subsidiary Guarantors, on the one hand, and the Initial Purchaser, on the
other hand, and shall have the right to enforce such agreements directly
to the extent they may deem such enforcement necessary or advisable to
protect its rights or the rights of Holders hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex,
telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under
the Indenture; and
(ii) if to the Company or the Subsidiary Guarantors:
Oshkosh Truck Corporation
2307 Oregon Street
Oshkosh, Wisconsin 54903-2566
Telephone number: (920) 235-9151
Telecopier No.: (920) 233-9624
Attention: Chief Financial Officer
With a copy to:
Foley & Lardner
Firstar Center, 777 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202-5367
Telecopier No. (414) 297-4900
Attention: Benjamin F. Garmer, III
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five (5)
Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt acknowledged, if telecopied; and on the next business
day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities;
provided, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Transfer Restricted Securities in
violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Transfer
Restricted Securities in any manner, whether by operation of law or
otherwise, such Transfer Restricted Securities shall be held subject to
all of the terms of this Agreement, and by taking and holding such
Transfer Restricted Securities such Person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions
of this Agreement, including the restrictions on resale set forth in this
Agreement and, if applicable, the Purchase Agreement, and such Person
shall be entitled to receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be affected or
impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the registration rights
granted with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
OSHKOSH TRUCK CORPORATION
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
MCNEILUS TRUCK & MANUFACTURING, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
IOWA CONTRACT FABRICATORS, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
MCINTIRE FABRICATORS, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
KENSETT FABRICATORS, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
MCNEILUS COMPANIES, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
MCNEILUS FINANCIAL, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President
and Chief Financial Officer
PIERCE MANUFACTURING, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Vice President and
Chief Financial Officer
SUMMIT PERFORMANCE SYSTEMS, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Vice President and
Chief Financial Officer
BANCAMERICA ROBERTSON STEPHENS
By: /s/ Mark S. Dawley
Name: Mark S. Dawley
Title: Managing Director
<TABLE>
OSHKOSH TRUCK CORPORATION AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollar amounts in thousands)
<CAPTION>
Three Months Ended Fiscal Year Ended September 30,
December 31,
1997 1996 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Income (loss) from continuing
operations before income
taxes per statement of income $5,095 $3,072 $16,502 $(1,982) $18,922 $22,102 $8,585
Add:
Portion of rents
representative of the
interest factor 74 74 295 266 335 318 516
Interest on indebtedness 2,450 3,503 12,504 923 679 1,080 3,683
Amortization of debt expense 54 55 218 6 - - -
------- ------- -------- ------- ------- -------- -------
Income (loss) as adjusted $7,673 $6,704 $29,519 $(787) $19,936 $23,500 $12,784
======= ======= ======== ======== ======== ======== ========
Fixed charges
Interest on indebtedness (1) $2,450 $3,503 $12,504 $923 $679 $1,080 $3,683
Amortization of
debt expense (2) 54 55 218 6 - - -
Rents 222 222 886 797 1,004 955 1,547
Portion of rents
representative of interest
factor (3) 74 74 295 266 335 318 516
------- ------- ------- ------- ------- ------- -------
Fixed charges(1)+(2)+(3) $2,578 $3,632 $13,017 $1,195 $1,014 $1,398 $4,199
======= ======= ======= ======= ======= ======= =======
Ratio of earnings to fixed
charges 2.98 1.85 2.27 NM 19.67 16.81 3.04
======= ======= ======= ======= ======= ======= =======
Deficiency $1,982
=======
_______________
NM -- not meaningful.
</TABLE>
<PAGE>
OSHKOSH TRUCK CORPORATION AND CONSOLIDATED SUBSIDIARIES
COMBINED WITH MCNEILUS COMPANIES, INC.
COMPUTATION OF PRO FORMA RATIO OF EARNINGS TO FIXED CHARGES
(Dollar amounts in thousands)
Twelve Months Ended
Three Months
Ended December September
December 31, 31, 30,
1997
1997 1997
Income from continuing
operations before income
taxes per statement of
income $2,924 $23,199 $22,226
Add:
Equity in leasing
partnership pre-tax
income 740 3,145 3,145
Portion of rents
representative of the
interest factor 109 437 437
Interest on indebtedness 7,248 29,467 29,471
Equity in leasing
partnership interest on
indebtedness 2,364 9,846 9,846
Amortization of debt
expense 307 1,226 1,226
------- ------- -------
Income as adjusted $13,692 $67,320 $66,351
======= ======= =======
Fixed charges
Interest on
indebtedness (1) $7,248 $29,467 $29,471
Partnership interest
expense (1) 2,364 9,846 9,846
Amortization of debt
expense (2) 307 1,226 1,226
Rents:
Oshkosh 222 886 886
McNeilus 106 424 424
------- ------- -------
328 1,310 1,310
------- ------- -------
Portion of rents
representative of
interest factor (3) 109 437 437
------- ------- -------
Fixed charges
(1)+(2)+(3) $10,028 $40,976 $40,980
======= ======= =======
Ratio of earnings to fixed
charges 1.37 1.64 1.62
======= ======= =======
EXHIBIT 21.1
Subsidiaries of the Company
The Company owns all of the stock of the following corporations:
State or Other
Jurisdiction
of Incorporation or
Name Organization
Pierce Manufacturing Inc. Wisconsin
McNeilus Companies, Inc. Minnesota
Summit Performance Systems, Inc. Wisconsin
Oshkosh Truck Foreign Sales Corporation Inc. U.S. Virgin Islands
Pierce Manufacturing, Inc. owns all of the stock of the following
corporations:
State or Other Jurisdiction
of Incorporation or
Name Organization
Dover Technologies Inc. Wisconsin
Pierce Manufacturing International Inc. Barbados
McNeilus Companies, Inc. owns all of the stock of the following
corporations:
State or Other Jurisdiction
Name of Incorporation or Organization
McNeilus Truck & Manufacturing, Inc. Minnesota
Iowa Contract Fabricators, Inc. Iowa
McIntire Fabricators, Inc. Iowa
Kensett Fabricators, Inc. Iowa
McNeilus Financial Services, Inc. Minnesota
McNeilus Truck & Manufacturing, Inc. owns all of the stock of
McNeilus Financial, Inc., a Texas corporation.
McNeilus Financial, Inc. owns all of the stock of Nations Casualty
Insurance, Inc., a Vermont corporation.
McNeilus Financial Services, Inc. owns all of the stock of
Oshkosh/McNeilus Financial Services, Inc., a Minnesota corporation.
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts",
"Summary Historical Consolidated Financial Data for Oshkosh", and
"Selected Historical Consolidated Financial Data for Oshkosh" and to the
use of our report dated October 31, 1997 (except for Notes 4 and 13, as to
which the date is December 8, 1997) in the Registration Statement (Form S-
4) and the related Prospectus of Oshkosh Truck Corporation for the
registration of $100,000,000 principal amount of 8 % senior subordinated
notes.
ERNST & YOUNG LLP
Milwaukee, Wisconsin
March 12, 1998
CONSENT OF LARSON, ALLEN, WEISHAIR & CO., LLP. INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Summary
Historical Consolidated Financial Data for McNeilus", "Selected Historical
Consolidated Financial Data for McNeilus", and "Experts", and to the use
of our report dated April 23, 1997, except for Notes 2 and 13, as to which
the date is December 8, 1997, relating to the consolidated financial
statements of McNeilus Companies, Inc. and Subsidiaries, in the
Registration Statement (Form S-4) and related Prospectus of Oshkosh Truck
Corporation for the registration of $100,000,000 8.75% Senior Subordinated
Notes due 2008.
LARSON, ALLEN, WEISHAIR & CO., LLP
Austin, Minnesota
March 11, 1998
Securities and Exchange Commission
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
____________________
Check if an Application to Determine Eligibility of a Trustee
Pursuant to Section 305(b)(2) _________
____________________
FIRSTAR TRUST COMPANY
(Exact name of trustee as specified in its charter)
Wisconsin 39-0281260
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U. S. National Bank) Identification Number)
777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
(Address of principal executive offices) (Zip Code)
Kevin C. Schuller, Vice President and Assistant Secretary
Firstar Trust Company
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Telephone (414) 765-5725
(Name, address, and telephone number of agent for service)
Oshkosh Truck Corporation
(Exact name of obligor as specified in its charter)
Wisconsin 39-0520270
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
P.O. Box 2566
Oshkosh, WI 54903-2566
(Address of principal executive offices) (Zip Code)
8 3/4% Senior Subordinated Notes due 2008
(Title of indenture securities)
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Office of Commissioner of Banking, Madison, Wisconsin
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
The corporate trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting
securities of the trustee:
As of March 5, 1998
Col. A Col. B
Title of class Amount outstanding
Per General Instruction B to Form T-1, no response is required
to this item as the obligor is not presently in default.
Item 4. Trusteeships under Other Indentures.
If the trustee is a trustee under another indenture under which
any other securities, or certificates of interest or
participation in any other securities, of the obligor are
outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other
indenture.
Per General Instruction B to Form T-1, no response is
required to this item as the obligor is not presently in
default.
(b) A brief statement of the facts relied upon as a basis for
the claim that no conflicting interest within the meaning
of Section 310(b)(1) of the Act arises as a result of the
trusteeship under any such other indenture, including a
statement as to how the indenture securities will rank as
compared with the securities issued under such other
indenture.
Per General Instruction B to Form T-1, no response is
required to this item as the obligor is not presently in
default.
Item 5. Interlocking Directorates and Similar Relationships with the
Obligor or Underwriters.
If the trustee or any of the directors or executive officers of
the trustee is a director, officer, partner, employee,
appointee, or representative of the obligor or of any
underwriter for the obligor, identify each such person having
any such connection and state the nature of each such
connection.
Per General Instruction B to Form T-1, no response is required
to this item as the obligor is not presently in default.
Item 6. Voting Securities of the Trustee Owned by the Obligor or its
Officials.
Furnish the following information as to the voting securities of
the trustee owned beneficially by the obligor and each director,
partner, and executive officer of the obligor:
As of March 5, 1998
Col. A Col. B Col. C Col. D
Name of owner Title of class Amount owned Percentage of
beneficially voting securities
represented by
amount given
in Col. C
Per General Instruction B to Form T-1, no response is required
to this item as the obligor is not presently in default.
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials.
Furnish the following information as to the voting securities of
the trustee owned beneficially by each underwriter for the
obligor and each director, partner, and executive officer of
each such underwriter:
As of March 5, 1998
Col. A Col. B Col. C Col. D
Name of owner Title of class Amount owned Percentage of
beneficially voting securities
represented by
amount given
in Col. C
Per General Instruction B to form T-1, no response is required
to this item as the obligor is not presently in default.
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Furnish the following information as to securities of the
obligor owned beneficially or held as collateral security for
obligations in default by the trustee:
As of March 5, 1998
Col. A Col. B Col. C Col. D
Title of Whether Amount owned Percent of
Class the securities beneficially or held class represented
are voting as collateral security by amount given
or nonvoting for obligations in Col. C
securities in default
Per General Instruction B to Form T-1, no response is required
to this item as the obligor is not presently in default.
Item 9. Securities of Underwriters Owned or Held by the Trustee.
If the trustee owns beneficially or holds as collateral security
for obligations in default any securities of an underwriter for
the obligor, furnish the following information as to each class
of securities of such underwriter any of which are so owned or
held by the trustee:
As of March 5, 1998
Col. A Col. B Col. C Col. D
Name of Amount Amount owned Percent of
issuer and outstanding beneficially or held class represented
title of class as collateral security by amount given
for obligations in in Col. C
default by trustee
Per General Instruction B to Form T-1, no response is required
to this item as the obligor is not presently in default.
Item 10. Ownership or Holdings by the Trustee of Voting Securities of
Certain Affiliates or Security Holders of the Obligor.
If the trustee owns beneficially or holds as collateral security
for obligations in default voting securities of a person who, to
the knowledge of the trustee (1) owns 10 percent or more of the
voting securities of the obligor or (2) is an affiliate, other
than a subsidiary, of the obligor, furnish the following
information as to the voting securities of such person:
As of March 5, 1998
Col. A Col. B Col. C Col. D
Name of Amount Amount owned Percent of
issuer and outstanding beneficially or held class represented
title of class as collateral security by amount given
for obligations in in Col. C
default by trustee
Per General Instruction B to Form T-1, no response is required
to this item as the obligor is not presently in default.
Item 11. Ownership or Holdings by the Trustee of any Securities of a
Person Owning 50 Percent or More of the Voting Securities of the
Obligor.
If the trustee owns beneficially or holds as collateral security
for obligations in default any securities of a person who, to
the knowledge of the trustee, owns 50 percent or more of the
voting securities of the obligor, furnish the following
information as to each class of securities of such person any of
which are so owned or held by the trustee:
As of March 5, 1998
Col. A Col. B Col. C Col. D
Name of Amount Amount owned Percent of
issuer and outstanding beneficially or held class represented
title of class as collateral security by amount given
for obligations in in Col. C
default by trustee
Per General Instruction B to Form T-1, no response is required
to this item as the obligor is not presently in default.
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted
to the trustee, furnish the following information:
As of March 5, 1998
Col. A Col. B Col. C
Nature of indebtedness Amount outstanding Date due
Per General Instruction B to Form T-1, no response is required
to this item as the obligor is not presently in default.
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect
to the securities under this indenture. Explain the nature
of any such default.
Per General Instruction B to Form T-1, no response is
required to this item as the obligor is not presently in
default.
(b) If the trustee is a trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the obligor are
outstanding, or is trustee for more than one outstanding
series of securities under the indenture, state whether
there has been a default under any such indenture or
series, identify the indenture or series affected, and
explain the nature of any such default.
Per General Instruction B to Form T-1, no response is
required to this item as the obligor is not presently in
default.
Item 14. Affiliations with the Underwriters.
If any underwriter is an affiliate of the trustee, describe each
such affiliation.
Per General Instruction B to Form T-1, no response is required
to this item as the obligor is not presently in default.
Item 15. Foreign Trustee.
Identify the order or rule pursuant to which the foreign trustee
is authorized to act as sole trustee under indentures qualified
or to be qualified under the Act. Not applicable
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
1. A copy of the Articles of Association of Firstar Trust
Company (f/k/a First Wisconsin Trust Company) as now in
effect (filed herewith).
2. Certificate of authority of the Trustee to commence
business (contained in Exhibit 1).
3. Authorization of the Trustee to exercise trust powers
(contained in Exhibit 1).
4. A copy of the existing By-laws of Firstar Trust Company
(f/k/a First Wisconsin Trust Company) (filed herewith).
6. The consent of the Trustee required by Section 321(b) of
the Trust Indenture Act of 1939 (filed herewith).
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirement of its
supervising or examining authority.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Firstar Trust Company, a corporation organized and existing under
the laws of the State of Wisconsin, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Milwaukee, and State of Wisconsin, on the
5th day of March, 1998.
FIRSTAR TRUST COMPANY
(Trustee)
By: /s/ Gene E. Ploeger
Gene E. Ploeger, First Vice President
(Name and title)
By: /s/ Pamela Warner
Pamela Warner, Assistant Secretary
(Name and title)
<PAGE>
EXHIBIT 1
STATE OF WISCONSIN
OFFICE OF COMMISSIONER OF BANKING
BANKS DIVISION
POST OFFICE BOX 7876
MADISON, WISCONSIN 53707-7876
(Telephone: 608-266-1621)
AMENDMENT TO ARTICLES
CERTIFICATION
I, Toby E. Sherry, Commissioner of Banking of the State of Wisconsin, do
hereby certify that an amendment to the original Articles of Incorporation
of First Wisconsin Trust Company, Milwaukee, Wisconsin, of which a duly
verified copy is hereto attached, was on the 17th day of August, A.D.
1992, approved and filed in the Office of Commissioner of Banking. This
amendment relates to corporate name and was adopted by stockholders of the
above bank on July 16, 1992.
IN TESTIMONY WHEREOF, I have set my hand and
affixed my official seal. Done at my office in
the City of Madison this 17th day of August, A.D.
1992.
Toby E. Sherry
Commissioner of Banking
IMPORTANT: TO BE RECORDED BY THE REGISTER OF DEEDS TOGETHER WITH THE
ATTACHED COPY OF THE AMENDMENT
<PAGE>
We, Robert L. Webster as President, and James D. Hintz as Cashier of First
Wisconsin Trust Company do hereby certify that the foregoing is a true
copy of an amendment to the Articles of Incorporation of this bank and
that at the annual or special meeting of the stockholders of the bank,
called for that purpose and held pursuant to the provisions of law, in the
office of the bank in the City of Milwaukee, State of Wisconsin, on the
16th day of July, A.D. 1992, the said amendment was duly adopted by the
affirmative vote of two-thirds of all capital stock outstanding; that the
majority stockholder was present or represented at said meeting; that the
entire number of shares outstanding is 10,000; that the number of shares
represented at the meeting was 9,952; that upon the adoption of such
resolution 9,952 votes were cast in the affirmative; one vote for each
share, and that 0 votes were cast in the negative.
In Testimony Whereof, First Wisconsin Trust Company has caused these
presents to be executed by the President and Cashier thereof and the
corporate seal of said bank is hereunto affixed this 28th day of July,
A.D. 1992, by its authority.
First Wisconsin Trust Company
In presence of
Sharon L. Gazzana By Robert L. Webster, President
Sandra L. Belongia James Hintz, Cashier
State of Wisconsin )
Milwaukee County ) ss.
)
Personally came before me this 28th day of July,
A.D. 1992, Robert L. Webster as President, and James D. Hintz as Cashier
of the First Wisconsin Trust Company, who are to me known to be such
President and Cashier, respectively, and to be the persons who executed
the foregoing instrument, and acknowledged the same as such officers, for
the purposes therein mentioned.
Diane M. Rampacek
Notary Public
Milwaukee County, Wisconsin
My commission expires 1/3/99
<PAGE>
Amendment to Articles of Incorporation
Which Articles were filed/recorded in the office of the Register of Deeds
for Milwaukee County on the 6th day of July, 1903. Recorded in Volume S
of Corporations, Page 134.
At a meeting of the stockholders of First Wisconsin Trust Company of
Milwaukee, Wisconsin, held at the office of said bank in said City on the
16th day of July, A.D. 1992, at 9:30 o'clock A.M., of that day, which
meeting was called for the purpose of amending the Articles of
Incorporation of said bank, and at which meeting 9,952 shares of the
capital stock of said bank were duly represented, the following
resolutions were adopted:
"Resolved That the Articles of Incorporation of the bank be amended by
striking out the paragraph relating to the name reading as follows:
"The name of this corporation shall be "FIRST WISCONSIN TRUST COMPANY, and
its location shall be at the City and County of Milwaukee and State of
Wisconsin."
And Inserting in lieu thereof the following paragraph:
"The title of the Corporation shall be Firstar Trust Company, and its
location shall be at the City and County of Milwaukee and State of
Wisconsin."
"It was further resolved, That the President and Cashier of said bank be
authorized, under the seal of the Corporation, to file proper certificates
of such amendment with the Commissioner of Banking as provided by law."
<PAGE>
ARTICLES OF ASSOCIATION
OF FIRSTAR TRUST COMPANY
MILWAUKEE, WISCONSIN
KNOW ALL MEN BY THESE PRESENTS, that we, Frederick Pabst, L.J. Petit,
Frederick Kasten, Oliver C. Fuller, and Edward P. Vilas, of the City and
County of Milwaukee and State of Wisconsin, have associated and do hereby
associate for the purpose of forming a corporation, to wit, a trust
company bank under and pursuant to the privileges and restrictions of the
statutes of the State of Wisconsin, in that behalf made and provided; and
particularly Chapters 221 and 223 of said statutes, and thereto adopt the
following:
Article 1
The purpose and business of this corporation shall be those of both a
state bank and a trust company bank as defined by Wisconsin law, this
corporation being a trust company bank which has been converted into a
state bank in accordance with such law.
Article 2
The name of this corporation shall be "FIRST WISCONSIN TRUST COMPANY," and
its location shall be at the City and County of Milwaukee and State of
Wisconsin.
Article 3
The capital stock of this Corporation shall be One Million Dollars
($1,000,000), divided into ten thousand (10,000) shares of the par value
of One Hundred Dollars ($100) each.
Article 4
The Board of Directors shall consist of such number of individuals, not
less than fifteen nor more than sixty, as from time to time shall be
prescribed in the By-laws, at least two-thirds of whom shall be residents
of Wisconsin and the majority of whom shall be residents of Milwaukee
County or adjacent counties. Each of said directors shall be elected for
a term of one year and until his successor has been elected and qualified.
In witness whereof, we have hereunto subscribed our names at Milwaukee,
Wisconsin, on this first day of July, A.D. 1903.
(Signed) Frederick Pabst
L.J. Petit
Fred Kasten
Oliver C. Fuller
Edward P. Vilas
State of Wisconsin
Milwaukee County
On this first day of July, A.D. 1903, personally appeared before me the
above signed Frederick Pabst, L.J. Petit, Frederick Kasten, Oliver C.
Fuller, and Edward P. Vilas, to me known to be the persons who executed
the foregoing instrument and severally acknowledge the same.
My commission will expire on the 30th day of December, 1906.
(Signed) W.L. Cheney
Notary Public
Milwaukee County,
Wisconsin
<PAGE>
EXHIBIT 4
As Amended through February 19, 1997
RESTATED BY-LAWS OF
FIRSTAR TRUST COMPANY
ADOPTED JANUARY 15, 1963
Article 1
The annual meeting of this Corporation for the election of its directors
and the transaction of its general business shall be held on the third
Thursday of February at the general office of this Corporation in the City
of Milwaukee, at 8 o'clock in the morning, or at such other hour and place
in the City of Milwaukee as shall be designated by the Board of Directors.
If any hour other than 8 o'clock in the morning or any place other than
the general office of this Corporation shall be so designated, notice
thereof shall be given by mailing the same to each stockholder at his last
known address at least ten (10) days prior to the holding of said meeting.
Article 2
Special meetings of the stockholders of this Corporation shall be held in
the City of Milwaukee and may be called at any time by order of the
Chairman of the Board, the President, or one of the Vice Presidents, or by
the Board of Directors, by mailing to each stockholder at his last known
address at least ten (10) days prior to the date of the holding of such
special meeting, a notice specifying the time and place of such special
meeting and the business to be transacted thereat, and no other business
shall be transacted at said meeting.
Article 3
Section 1. Every stockholder may vote and participate at any meeting of
stockholders, either in person or by proxy. No proxy shall be recognized
unless the same shall be in writing, subscribed by the stockholder nor
unless filed with the Secretary prior to the meeting. No active or
salaried officer may act as a proxy for a stockholder.
Section 2. The Cashier shall maintain a stock book showing the name,
residence, and number of shares held by each stockholder, which shall at
all times, during the usual hours for transacting business, be subject to
inspection by the officers, directors, and stockholders of the Company.
Article 4
Section 1. The Board of Directors shall consist of not less than five nor
more than thirty directors, the number of directors to be determined by
resolution adopted at each annual stockholders' meeting, or at any special
stockholders' meeting duly called for such purpose. On and after January
1, 1978, no person shall be eligible to be elected or re-elected as a
member of the Board of Directors if he shall have attained 70 years of age
at the date of election.
Section 2. The election of directors by the stockholders shall be by
ballot or other method as shall be adopted by the stockholders by
resolution or motion adopted at the stockholders' meeting.
Section 3. A majority of the Board of Directors shall constitute a quorum
for the transaction of business; provided that the directors may, once in
six (6) months, designate by resolution nine (9) members, any five (5) of
whom shall constitute a quorum.
Section 4. Minutes of each meeting of the Board of Directors shall
disclose the date and location of such meeting, and the names of directors
absent; shall be subscribed by the presiding officer; and shall be
approved by the Board of Directors at the next succeeding meeting, the
minutes of which shall show such fact.
Section 5. A regular meeting of the Board of Directors shall be held at
the general office of this Corporation in the City of Milwaukee at least
once each calendar quarter, immediately following the annual meeting of
the shareholders of this Corporation on the third Thursday of February, at
8:00 a.m. on the third Thursday of May, August and November of each year,
or at such other time or place as shall from time to time, be designated
by the president or by resolution of the Board of Directors. If any other
time or any place other than the general office of this Corporation shall
be so designated, notice thereof shall be given by mailing the same to
each director at his last known address at least two (2) days prior to the
holding of said meeting.
Section 6. Special meetings of the Board of Directors shall be held at
the general office of the Corporation in the City of Milwaukee or at such
other place in the City of Milwaukee as shall be designated, and may be
called by order of the Chairman of the Board, the President, or by any two
of the directors by mailing notice of such meeting and the designated time
and place thereof to each of the directors at his last known address two
(2) days prior to the holding of such meeting.
Article 5
Section 1. An Executive Committee consisting of the Chairman of the
Board, the President, and not less than six (6) or more than twelve (12)
other directors may be appointed by the Board of Directors to serve until
their successors shall be appointed, and such Executive Committee shall
direct the management of the affairs of this Corporation in the interim
between meetings of the Board of Directors, subject to the control of the
Board. The Chairman of the Board, or in his absence (through failure of
the Board of Directors to elect a Chairman or otherwise), the President,
shall preside at meetings of the Executive Committee. The person from
time to time elected Secretary of the Board shall also serve as Secretary
of the Executive Committee.
Section 2. Meetings of the Executive Committee may be held at any time
when the Board of Directors is not in session, and may be prescribed by
the Board of Directors or may be called by order of the Chairman of the
Board, the President, or by any two (2) members of the Executive
Committee, by mailing notice of such meeting designating the time and
place thereof, addressed to each member of the Committee at his last known
address two (2) days prior to the holding of such meeting, or by personal
notice thereof given a sufficient length of time before such meeting to
enable members to attend.
Section 3. The Executive Committee shall keep full and true minutes of
all business transacted at each meeting and shall submit its report
together with a copy of the minutes of its proceedings to the Board of
Directors at its next meeting thereafter.
Section 4. The Board of Directors shall appoint Trust Investment
Committee consisting of at least two (2) officers and at least four (4)
directors who are not officers, which Committee shall meet at the general
office of the Corporation at least once each calendar quarter, at 8:00
a.m. on the third Thursday of January, March, June and December of each
year, or at such other time or place as shall from time to time be
designated by the President or by resolution of the Board of Directors.
If any hour other than 8:00 in the morning or any place other than the
general office of this Corporation shall be so designated, notice thereof
shall be given by mailing the same to each committee member at his last
known address at least two (2) days prior to the holding of said meeting.
The Trust Investment Committee shall have such duties and authority as the
Board of Directors shall from time to time prescribe. Members of such
committee shall serve for such periods as the Board shall from time to
time prescribe.
Section 5. The Board of Directors may appoint a Loan Committee consisting
of two (2) or more directors, which, if appointed, shall meet at least
once calendar quarter at such time and place as shall from time to time be
designated by the resolution of the Board of Directors, and shall
determine policies as to renewals and applications for new loans. All
loans in excess of the amount officers designated by the Board have been
authorized by resolution to make shall be presented to the Loan Committee
(or, if the Loan Committee has not been appointed, to the Board of Directs
or the Executive Committee) for approval. The Board of Directors may by
resolution designate officers who may make loans without the prior
approval of the Loan Committee or the Board, subject to the provisions of
the Wisconsin Statutes, the regulations of the Commissioner of Banks, and
these By-laws.
Section 6. Each year the Board of Directors shall appoint, from among its
members, an Examining Committee consisting of at least three (3)
directors, which upon receipt of a report of examination of the
Corporation by the Division of Banking, shall have the duties specified
in 221.0611(2), Wis. Stats... The Examining Committee shall also study
and, if it deems necessary, recommend corrective action in response to any
criticisms or suggestions contained in, reports of examination prepared by
any other regulatory agency or the Firstar Corporation Auditing or
Compliance areas, and shall perform such other duties as shall be
prescribed from time to time by resolution of the Board of Directors.
Meetings of the Examining Committee shall be called by the President as
needed, and notice of a meeting shall be given by mailing the same to each
committee member at his last known address at least two (2) days prior to
the holding of said meeting.
Section 7. The Board of Directors shall have the power to set the banking
hours of this bank, subject to the provisions of the Wisconsin Statutes
and the regulations of the Commissioner of Banks. Certified copies of all
resolutions of the Board pertaining to banking hours shall be furnished to
the State Banking Department.
Section 8. A detailed statement of all current expenses and taxes paid
shall be presented to the Board in writing every month, or more often if
required by the Board.
Article 6
A written waiver signed by any director or member of any committee shall
be the equivalent of due notice to him of any meeting therein mentioned.
Actual attendance at or participation in any meeting by any director or
member of any committee waives any required notice unless the director or
member, at the beginning of the meeting or promptly upon his arrival,
objects to holding the meeting or transacting business at the meeting and
does not thereafter vote for or assent to action taken at the meeting.
Article 7
Directors and members of committees appointed by the Board of Directors,
except directors or members who are salaried officers or employees of this
Corporation, shall be paid such fees for services and attendance at
meetings as the Board of Directors shall from time to time prescribe.
Article 8
Section 1. The general officers of this Corporation shall be a president,
two or more vice presidents, a cashier and one or more assistant cashiers,
a secretary and one or more assistant secretaries, one or more trust
officers, and such other officers as may be appropriate for the
transaction of its business. The officers of this Corporation shall be
elected by a viva voce vote of the Board of Directors unless objection is
made, whereupon such election shall be by ballot; provided, however, that
whenever he deems it appropriate to take such action in the interim
periods between meetings of the Board of Directors, the president may
appoint any other officer. Any appointment made by the president shall
take effect immediately but shall be reported and confirmed at the next
regular meeting of the Board of Directors. The Chairman of the Board, if
there be one, the senior executive officer in charge of conducting the
business of this Corporation and the officer in charge of the Trust
Department of this Corporation shall be chosen from among the directors.
Section 2. The Board of Directors and, with respect to other officers and
to the extent not inconsistent with actin taken by the Board of Directors,
the president, shall have authority to define the duties and obligations
of all officers, and to fill vacancies in offices. The Board of Directors
and, with respect to other officers appointed by him and to the extent not
inconsistent with action taken by the Board of Directors, the president,
shall have the authority to fix the compensation of officers, to dismiss
them at pleasure, and to require any officer to provide a satisfactory
bond for the faithful performance of his duties. Unless otherwise
prescribed by the Board of Directors or, with respect to other officers,
the president, each officer shall have the duties and authority prescribed
by law or ordinarily incidental to his office in similar corporations.
Section 3. The Board of Directors shall designate the officer to be the
chief executive officer in charge of the Trust Department of this
Corporation. All fiduciary powers of this Corporation shall be exercised
through such officer who shall be generally responsible for and supervise
and direct the activities of the Trust Department and do and perform all
acts and things necessary and proper in carrying on the business of the
Trust Department in accordance with the provisions of applicable laws and
regulations and the directions of the Board of Directors, appropriate
committees of the Board and his superior officers and shall cause to be
kept under his supervision books of account of the transactions of this
Corporation in a fiduciary capacity.
Section 4. The executive officers shall have authority to employ and
discharge all necessary agents and servants of this Corporation whose
appointments shall not be provided for by the Board, to define their
duties, and to fix their compensations.
Article 9
The Board of Directors may by resolution provide for this Corporation to
indemnify each director or officer, whether or not then in office, against
all expense and liability relating to a claim, action, suit, or proceeding
against him or to which he may be made a party by reason of his being or
having been a director or officer of this Corporation, or of any other
company which he served as a director of officer at the request of this
Corporation, except in any case where he was finally adjudged to have been
derelict in the performance of his duties as such director or officer.
Such resolution may include provisions for this Corporation (1) to assume
or provide at its expense and risk the defense or settlement of any such
action, (2) to purchase commercial insurance for the benefit of a director
or officer, including one adjudged guilty of negligence or misconduct, and
(3) to assume or share any additional expense or liability as the Board of
Directors deems warranted upon consideration of the circumstances.
Article 10
The Board of Directors may by resolution adopt emergency provisions to
prevail notwithstanding any contrary provisions of these By-laws, to take
effect when a state of emergency results in this Corporation being unable
to continue its normal functions under the direction of established
management or at its regular location (which provisions may include, but
shall not be limited to procedures for establishing temporary offices, an
emergency executive committee, and emergency officer succession).
Article 11
The shares of stock of this Corporation shall be transferable only on the
books of this Corporation upon surrender of the certificate issued
therefor.
Article 12
These by-laws may be altered, amended, or repealed in whole or in part in
any manner not inconsistent with the provisions of law at any time by a
resolution of the Board of Directors adopted at any regular or special
meeting of the Board, or by vote of the stockholders representing a
majority of the capital stock, such a vote to be taken at an annual or
special meeting.
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b)
OF THE TRUST INDENTURE ACT OF 1939
Firstar Trust Company, as Trustee herein named, hereby consents that
reports of examination of said Trustee by Federal and State authorities
may be furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
FIRSTAR TRUST COMPANY,
as Trustee
By: /s/ Gene E. Ploeger
Gene E. Ploeger, Vice President
(Name and title)
By: /s/ Pamela Warner
Pamela Warner, Assistant Secretary
(Name and title)
Dated: March 5, 1998
<PAGE>
EXHIBIT 7
FIRSTAR TRUST COMPANY
BALANCE SHEET
December 31,
'96 '97
$(000) $(000)
ASSETS
Cash and balances due from depository
institutions:
Noninterest-bearing balances 71,523 65,896
Interest-bearing balances 0 0
Securities 35,030 27,243
Federal funds sold and securities
purchased under agreements to resell:
Federal funds sold 151,887 60,651
Securities purchased under
agreements to resell 0 0
Loans and lease financing receivables:
Loans and leases, net of unearned
income 38,249 93,632
LESS: Allowance for loan and
lease losses 73 73
LESS: Allocated transfer risk reserve 0 0
________ ________
Loans and leases, net of unearned
income, allowance, and reserve 38,176 93,632
Assets held in trading accounts 0 0
Premises and fixed assets (including
capitalized leases) 1,984 5,379
Other real estate owned 0 0
Investments in unconsolidated
subsidiaries and associated companies 0 0
Customers' liability to this bank on
acceptances outstanding 0 0
Intangible assets 0 0
Other assets 17,422 24,329
________ ________
Total assets 316,022 277,130
======== ========
LIABILITIES
Deposits:
In domestic offices:
Noninterest-bearing 288,221 232,609
Interest-bearing 215 142
________ ________
Total domestic deposits 288,436 232,751
In foreign offices: 0 0
Federal funds purchased and securities
sold under agreements to repurchase:
Federal funds purchased 744 806
Securities sold under agreements to
repurchase 0 0
Demand notes issued to the U.S. Treasury 0 0
Other borrowed money 0 0
Mortgage indebtedness and obligations
under capitalized leases 0 0
Bank's liability on acceptances
executed and outstanding 0 0
Notes and debentures subordinated to deposits 0 0
Other liabilities 7,131 8,814
________ ________
Total liabilities 296,311 242,371
Limited-life preferred stock 0 0
EQUITY CAPITAL
Perpetual preferred stock 0 0
Common stock 1,000 1,000
Surplus 12,638 12,924
Undivided profits and capital reserves 5,935 20,732
LESS: Net unrealized loss on
marketable equity securities 138 103
________ ________
Total equity capital 19,711 34,759
________ ________
Total liabilities, limited-life
preferred stock, and equity capital 316,022 277,130
======== ========
FIRSTAR TRUST COMPANY December 31,
INCOME STATEMENT '96 '97
$(000) $(000)
Interest Income
Interest and fee income on loans:
Loans secured by real estate 14 1
Loans to finance agricultural
production and other loans to farmers 0 0
Commercial and industrial loans 155 92
Loans to individuals for household,
family, and other personal expenditures:
Credit cards and related plans 0 0
Other 0 0
Loans to foreign governments and
official institutions 0 0
Obligations (other than securities and
leases) of states and political
subdivisions in the U.S.:
Taxable obligations 0 0
Tax-exempt obligations 0 0
All other loans 0 0
Income from lease financing receivables:
Taxable leases 0 0
Tax-exempt leases 0 0
Interest income on balances due
from depository institutions 0 0
Interest and dividend income on securities:
U.S. Treasury securities and
U.S. Government agency and
corporation obligations 2,254 1,952
Securities issued by states and
political subdivisions in the U.S.:
Taxable securities 0 0
Tax-exempt securities 38 36
Other domestic debt securities 34 0
Foreign debt securities 0 0
Equity securities (including
investments in mutual funds) 0 0
Interest income from assets held
in trading accounts 0 0
Interest income on federal funds
sold and securities purchased
under agreements to resell 4,876 6,679
________ ________
Total interest income 7,371 8,760
Interest expense
Interest on deposits:
Transaction accounts (NOW accounts,
ATS accounts, and telephone and
preauthorized transfer accounts) 0 0
Nontransaction accounts:
Money market deposit accounts (MMDAs) 0 0
Other savings deposits 7 5
Time certificates of deposit
of $100,000 or more 0 0
All other time deposits 0 0
Expense of federal funds purchased
and securities sold under
agreements to repurchase 47 227
Interest on demand notes issued
to the U.S. Treasury and on
other borrowed money 0 0
Interest on mortgage indebtedness
and obligations under capitalized leases 0 0
Interest on notes and debentures
subordinated to deposits 0 0
________ ________
Total interest expense 54 232
________ ________
Net interest income 7,317 8,528
Provisions:
Provision for loan and lease losses 0 0
Provision for allocated transfer risk 0 0
Noninterest income
Income from fiduciary activities 67,306 81,406
Service charges on deposit accounts 0 0
Trading gains (losses) and fees
from foreign exchange transactions 0 0
Other foreign transaction gains(losses) 0 0
Gains (losses) and fees from
assets held in trading accounts 0 0
Other noninterest income:
Other fee income 729 446
All other noninterest income 3,735 3,855
________ ________
Total noninterest income 71,770 85,707
Gains (losses) on securities not held
in trading accounts 0 0
Noninterest expense
Salaries and employee benefits 25,803 29,507
Expenses of premises and fixed
assets (net of rental income)
(excluding salaries and employee
benefits and mortgage interest) 6,139 7,243
Other noninterest expense 24,457 32,708
________ ________
Total noninterest expense 56,399 69,458
Income (loss) before taxes and
extraordinary items and other adjustments 22,688 24,777
Applicable income taxes 9,162 9,980
________ ________
Income (loss) before extraordinary
items and other adjustments 13,526 14,797
Extraordinary items and other adjustments:
Extraordinary items and other
adjustments, gross of income taxes 0 0
Applicable income taxes 0 0
________ ________
Extraordinary items and other
adjustments, net of income taxes 0 0
________ ________
Net income (loss) 13,526 14,797
======== ========
LETTER OF TRANSMITTAL
OSHKOSH TRUCK CORPORATION
OFFER TO EXCHANGE
ALL OUTSTANDING
8-3/4% SENIOR SUBORDINATED NOTES DUE 20008
FOR
NEW 8-3/4% SENIOR SUBORDINATED NOTES DUE 20008
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME ON , 1998
UNLESS THE OFFER IS EXTENDED
FIRSTAR TRUST COMPANY
(the "Exchange Agent")
BY MAIL, HAND OR OVERNIGHT COURIER:
Firstar Trust Company
1555 North River Center Drive
Attention: Pamela Warner
BY FACSIMILE TRANSMISSION
(FOR ELIGIBLE INSTITUTIONS ONLY):
(414) 905-5049
CONFIRM BY TELEPHONE:
(414) 905-5008
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE NUMBER OTHER THAN THE
ONES LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS
ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE
THIS LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned hereby acknowledges receipt of the Prospectus dated
, 1998 (the "Prospectus") of Oshkosh Truck Corporation (the
"Company") and this Letter of Transmittal, which together constitute the
Company's offer (the "Exchange Offer") to exchange $1,000 principal amount
of its new 8-3/4% Senior Subordinated Notes due 2008 (the "New Notes"),
which have been registered under the Securities Act of 1933, as amended
(the "Securities Act"), pursuant to a Registration Statement of which the
Prospectus is a part, for each $1,000 principal amount of its outstanding
8-3/4% Senior Subordinated Notes due 2008 (the "Notes"), respectively.
The term "Expiration Date" shall mean 12:00 midnight, New York City time,
on , 1998, unless the Company, in its reasonable judgment,
extends the Exchange Offer, in which case the term shall mean the latest
date and time to which the Exchange Offer is extended. Capitalized terms
used but not defined herein have the meaning given to them in the
Prospectus.
YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE
INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE
PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE
AGENT.
List on the next page the Notes to which this Letter of Transmittal
relates. If the space indicated is inadequate, the Certificate or
Registration Numbers and Principal Amounts should be listed on a
separately signed schedule affixed hereto.
<PAGE>
_______________________________________________________________________
DESCRIPTION OF SENIOR SUBORDINATED NOTES TENDERED HEREBY
AGGREGATE
NAME(S) AND ADDRESS(ES) CERTIFICATE PRINCIPAL PRINCIPAL
OF REGISTERED OWNER(S) OF REGISTRATION AMOUNT AMOUNT
(PLEASE FILL IN) NUMBERS* REPRESENTED TENDERED**
BY NOTES
_______________________________________________________________________
___________________________________________
___________________________________________
___________________________________________
TOTAL
_______________________________________________________________________
* Need not be completed by book-entry Holders.
** Unless otherwise indicated, the Holder will be deemed to have
tendered the full aggregate principal amount represented by such
Notes. All tenders must be in multiples of $1,000.
_______________________________________________________________________
This Letter of Transmittal is to be used (i) if certificates of Notes
are to be forwarded herewith, (ii) if delivery of Notes if to be made by
book-entry transfer to an account maintained by the Exchange Agent at The
Depository Trust Company, (the "Depository") pursuant to the procedures
set forth in "The Exchange Offer -- Procedures for Tendering Notes" in the
Prospectus or (iii) tender of the Notes is to be made according to the
guaranteed delivery procedures described in the Prospectus under the
caption "The Exchange Offer" -- Guaranteed Delivery Procedures." See
Instruction 2. Delivery of documents to a book-entry transfer facility
does not constitute delivery to the Exchange Agent.
The term "Holder" with respect to the Exchange Offer means any person
in whose name Notes are registered on the books of the Company or any
other person who has obtained a properly completed bond power from the
registered holder. The undersigned has completed, executed and delivered
this Letter of Transmittal to indicate the action the undersigned desires
to take with respect to the Exchange Offer. Holders who wish to tender
their Notes must complete this letter in its entirety.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
DEPOSITORY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
[ ] The Depository Trust Company
Account Number
Transaction Code Number
Holders whose Notes are not immediately available or who cannot
deliver their Notes and all other documents required hereby to the
Exchange Agent on or prior to the Expiration Date must tender their Notes
according to the guaranteed delivery procedure set forth in the Prospectus
under the caption "The Exchange Offer -- Guaranteed Delivery Procedures."
See Instruction 2.
[ ] CHECK HERE IF TENDERED NOTE ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s)
Name of Eligible Institution that Guaranteed Delivery
If delivery by book-entry transfer:
Account Number
Transaction Code Number
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS
OR SUPPLEMENTS THERETO.
Name
Address
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer,
the undersigned hereby tenders to the Company the principal amount of the
Notes indicated above. Subject to, and effective upon, the acceptance for
exchange of such Notes tendered hereby, the undersigned hereby exchanges,
assigns and transfers to, or upon the order of, the Company all right,
title and interest in and to such Notes as are being tendered hereby,
including all rights to accrued and unpaid interest thereon as of the
Expiration Date. The undersigned hereby irrevocably constitutes and
appoints the Exchange Agent the true and lawful agent and attorney-in-fact
of the undersigned (with full knowledge that said Exchange Agent acts as
the agent of the Company in connection with the Exchange Offer) to cause
the Notes to be assigned, transferred and exchanged. The undersigned
represents and warrants that it has full power and authority to tender,
exchange, assign and transfer the Notes and to acquire New Notes issuable
upon the exchange of such tendered Notes, and that when the same are
accepted for exchange, the Company will acquire good and unencumbered
title to the tendered Notes, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim.
The undersigned represents to the Company that (i) the New Notes
acquired pursuant to the Exchange Offer are being obtained in the ordinary
course of business of the person receiving such New Notes, whether or not
such person is the undersigned, and (ii) neither the undersigned nor any
such other person has an arrangement or understanding with any person to
participate in a distribution of such New Notes. If the undersigned or
the person receiving the New Notes covered hereby is a broker-dealer that
is receiving the New Notes for its own account in exchange for Notes that
were acquired as a result of market-making activities or other trading
activities, the undersigned acknowledges that it or such other person will
deliver a prospectus in connection with any resale of such New Notes;
however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. The undersigned and any such other
person acknowledge that, if they are participating in the Exchange Offer
for the purpose of distributing the New Notes, (i) they cannot rely on the
position of the staff of the Securities and Exchange Commission enunciated
in Exxon Capital Holdings Corporation (available April 13, 1989), Morgan
Stanley & Co., Inc. (available June 5, 1991) or similar no-action letters
and, in the absence of an exemption therefrom, must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with the resale transaction and (ii) failure to comply with
such requirements in such instances could result in the undersigned or any
such other person incurring liability under the Securities Act for which
such persons are not indemnified by the Company. If the undersigned or
the person receiving the New Notes covered by this letter is an affiliate
(as defined under Rule 405 of the Securities Act) of the Company, the
undersigned represents to the Company that the undersigned understands and
acknowledges that such New Notes may not be offered for resale, resold or
otherwise transferred by the undersigned or such other person without
registration under the Securities Act or an exemption therefrom.
The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Exchange Agent or the
Company to be necessary or desirable to complete the exchange, assignment
and transfer of tendered Notes or transfer ownership of such Notes on the
account books maintained by a book-entry transfer facility. The
undersigned further agrees that acceptance of any tendered Notes by the
Company and the issuance of New Notes in exchange therefor shall
constitute performance in full by the Company of its obligations under the
Registration Rights Agreement and that the Company shall have no further
obligations or liabilities thereunder for the registration of the Notes or
the New Notes.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offer -- Conditions." The
undersigned recognizes that as a result of these conditions (which may be
waived, in whole or in part, by the Company), as more particularly set
forth in the Prospectus, the Company may not be required to exchange any
of the Notes tendered hereby and, in such event, the Notes not exchanged
will be returned to the undersigned at the address shown below the
signature of the undersigned.
All authority herein conferred or agreed to be conferred shall
survive the death or incapacity of the undersigned and every obligation of
the undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned. Tendered
Notes may be withdrawn at any time prior to the Expiration Date.
Unless otherwise indicated in the box entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instructions" in this
Letter of Transmittal, all New Notes delivered in exchange for tendered
Notes, and any Notes delivered herewith but not exchanged, will be
registered in the name of the undersigned and shall be delivered to the
undersigned at the address shown below the signature of the undersigned.
If a New Note is to be issued to a person other than the person(s) signing
this Letter of Transmittal, or if the New Note is to be mailed to someone
other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address different than
the address shown on this Letter of Transmittal, the appropriate boxes of
this Letter of Transmittal should be completed. If Notes are surrendered
by Holder(s) that have completed either the box entitled "Special
Registration Instructions" or the box entitled "Special Delivery
Instructions" in this Letter of Transmittal, signature(s) on this Letter
of Transmittal must be guaranteed by an Eligible Institution (defined in
Instruction 4).
<PAGE>
_________________________________________________________________________
SPECIAL REGISTRATION INSTRUCTIONS
To be completed ONLY if the New Notes are to be issued in the name
of someone other than the undersigned.
Name:
_________________________________________________________________________
Address:
_________________________________________________________________________
_________________________________________________________________________
Book-Entry Transfer Facility Account:____________________________________
Employer Identification or Social Security Number:_______________________
(Please print or type)
SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the New Notes are to be sent to someone other
than the undersigned, or to the undersigned at an address other than that
shown under "Description of Notes Tendered Hereby."
Name:
_________________________________________________________________________
Address:
_________________________________________________________________________
_________________________________________________________________________
(Please print or type)
_________________________________________________________________________
REGISTERED HOLDER(S) OF NOTES SIGN HERE
(IN ADDITION, COMPLETE SUBSTITUTE FORM W-9 BELOW)
x________________________________________________________________________
x________________________________________________________________________
(SIGNATURE(S) OF REGISTERED HOLDER(S))
Must be signed by registered holder(s) exactly as name(s) appear(s)
on the Notes or on a security position listing as the owner of the Notes
or by person(s) authorized to become registered holder(s) by properly
completed bond powers transmitted herewith. If signature is by attorney-
in-fact, trustee, executor, administrator, guardian, officer of a
corporation or other person acting in a fiduciary capacity, please provide
the following information.
(PLEASE PRINT OR TYPE).
Name and Capacity (full title):__________________________________________
Address (including zip code:):___________________________________________
_________________________________________________________________________
_________________________________________________________________________
Area Code and Telephone Number:__________________________________________
Taxpayer Identification or Social Security No.:__________________________
Dated:_________________________
SIGNATURE GUARANTEE
(IF REQUIRED OF REPRESENTATIVE OF SIGNATURE GUARANTOR)
Authorized Signature:___________________________________________________
(SIGNATURE OF REPRESENTATIVE OF SIGNATURE GUARANTOR)
Name and Title:_________________________________________________________
Name of Plan:_______________________________________________________
Area Code and Telephone Number:_________________________________________
(PLEASE PRINT OR TYPE)
Dated:____________________
<PAGE>
PAYOR'S NAME: OSHKOSH TRUCK CORPORATION
THIS SUBSTITUTE FORM W-9 MUST BE COMPLETED AND SIGNED
Please provide your social security number or other taxpayer
identification number on the following Substitute Form W-9 and certify
therein that you are subject to backup withholding.
_________________________________________________________________________
SUBSTITUTE Part 1 -- PLEASE PROVIDE YOUR TIN Social
FORM W-9 IN THE BOX AT RIGHT AND CERTIFY security
BY SIGNING AND DATING BELOW number
_______________
OR
Employer
Identification
number
_______________
____________________________________________________
Department of the Part 2 -- Check the box if you are NOT subject to
Treasury Internal backup withholding under the provisions of Section
Revenue Service 3406(A)(1)(C) of the Internal Revenue Code because
(1) you are exempt from backup withholding, (2) you
have not been notified that you are subject to
backup withholding as a result of failure to report
all interest or dividends or (3) the Internal
Revenue Service has notified you that you are no
longer subject to backup withholding. [ ]
____________________________________________________
PAYER'S REQUEST CERTIFICATION -- UNDER THE PENALTIES OF Part 3--
FOR TAXPAYER PERJURY, I CERTIFY THAT THE INFORMATION
IDENTIFICATION PROVIDED ON THIS FORM IS TRUE, CORRECT
NUMBER (TIN) AND COMPLETE.
SIGNATURE:__________ DATE: __________ Awaiting
TIN [ ]
_________________________________________________________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY CASH PAYMENTS IN EXCESS OF $10.00 MADE TO YOU.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF THE SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAX IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office,
or (b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number
within 60 days, 31% of all reportable payments made to me thereafter will
be withheld, until I provide a number.
________________________________________ _________________________
Signature Date
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND
CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
All physically delivered Notes or confirmation of any book-entry
transfer to the Exchange Agent's account at a book-entry transfer facility
of Notes tendered by book-entry transfer, as well as a properly completed
and duly executed copy of this Letter of Transmittal or facsimile thereof,
and any other documents required by this Letter of Transmittal, must be
received by the Exchange Agent at any of its addresses set forth herein on
or prior to the Expiration Date (as defined in the Prospectus). The
method of delivery of this Letter of Transmittal, the Notes and any other
required documents is at the election and risk of the Holder, and except
as otherwise provided below, the delivery will be deemed made only when
actually received by the Exchange Agent. If such delivery is by mail, it
is suggested that registered mail with return receipt requested, properly
insured, be used.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering Holders, by execution of this Letter of
Transmittal (or facsimile thereof), shall waive any right to receive
notice of the acceptance of the Notes for exchange.
Delivery to an address other than as set forth herein, or
instructions via a facsimile number other than the ones set forth herein,
will not constitute a valid delivery.
2. GUARANTEED DELIVERY PROCEDURES.
Holders who wish to tender their Notes, but whose Notes are not
immediately available and thus cannot deliver their Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent (or
comply with the procedures for book-entry transfer) prior to the
Expiration Date, may effect a tender if:
(a) the tender is made through a member firm of a registered
national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having
an office or correspondent in the United States or an "eligible
guarantor institution" within the meaning of Rule 17Ad-15 under the
Exchange Act (an "Eligible Institution");
(b) prior to the Expiration Date, the Exchange Agent receives
from such Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery (by facsimile transmission, mail or
hand delivery) setting forth the name and address of the Holder, the
certificate number(s) of such Notes and the principal amount of the
Notes tendered, stating that the tender is being made thereby and
guaranteeing that, within three New York Stock Exchange trading days
after the Expiration Date, the Letter of Transmittal (or facsimile
thereof), together with the Notes (or a confirmation of book-entry
transfer of such Notes into the Exchange Agent's account at the
Depository) and any other documents required by the Letter of
Transmittal, will be deposited by the Eligible Institution with the
Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal
(or facsimile thereof), as well as all tendered Notes in proper form
for transfer (or a confirmation of book-entry transfer of such Notes
into the Exchange Agent's account at the Depository) and all other
documents required by the Letter of Transmittal, are received by the
Exchange Agent within three New York Stock Exchange trading days
after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery
will be sent to Holders who wish to tender their Notes according the
guaranteed delivery procedures set forth above. Any Holder who wishes to
tender Notes pursuant to the guaranteed delivery procedures described
above must ensure that the Exchange Agent receives the Notice of
Guaranteed Delivery relating to such Notes prior to the Expiration Date.
Failure to complete the guaranteed delivery procedures outlined above will
not, of itself, affect the validity or effect a revocation of any Letter
of Transmittal form properly completed and executed by a Holder who
attempted to use the guaranteed delivery procedures.
3. PARTIAL TENDERS; WITHDRAWALS.
If less than the entire principal amount of Notes evidenced by a
submitted certificate is tendered, the tendering Holder should fill in the
principal amount tendered in the column entitled "Principal Amount
Tendered" of the box entitled "Description of Notes Tendered Hereby." A
newly issued Note for the principal amount of Notes submitted but not
tendered will be sent to such Holder as soon as practicable after the
Expiration Date. All Notes delivered to the Exchange Agent will be deemed
to have been tendered in full unless otherwise indicated.
Notes tendered pursuant to the Exchange Offer may be withdrawn at any
time prior to the Expiration Date, after which tenders of Notes are
irrevocable. To be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Exchange
Agent. Any such notice of withdrawal must (i) specify the name of the
person having deposited the Notes to be withdrawn (the "Depositor"), (ii)
identify the Notes to be withdrawn (including the registration number(s)
and principal amount of such Notes, or, in the case of Notes transferred
by book-entry transfer, the name and number of the account at the
Depository to be credited), (iii) be signed by the Holder in the same
manner as the original signature on this Letter of Transmittal (including
any required signature guarantees) or be accompanied by documents of
transfer sufficient to have the Trustee with respect to the Notes register
the transfer of such Notes into the name of the person withdrawing the
tender and (iv) specify the name in which any such notes are to be
registered, if different from that of the Depositor. All questions as to
the validity, form and eligibility (including time of receipt) of such
notices will be determined by the Company, whose determination shall be
final and binding on all parties. Any Notes so withdrawn will be deemed
not to have been validly tendered for purposes of the Exchange Offer and
no New Notes will be issued with respect thereto unless the Notes so
withdrawn are validly retendered. Any Notes which have been tendered but
which are not accepted for exchange, will be returned to the Holder
thereof without cost to such Holder as soon as practicable after
withdrawal.
4. SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND
ENDORSEMENTS; GUARANTEE OF SIGNATURES.
If this Letter of Transmittal is signed by the registered Holder(s)
of the Notes tendered hereby, the signature must correspond with the
name(s) as written on the face of the certificates without alteration or
enlargement or any change whatsoever. If this Letter of Transmittal is
signed by a participant in the Depository, the signature must correspond
with the name as it appears on the security position listing as the owner
of the Notes.
If any of the Notes tendered hereby are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If a number of Notes registered in different names are tendered, it
will be necessary to complete, sign and submit as many separate copies of
this Letter of Transmittal as there are different registrations of Notes.
Signatures on this Letter of Transmittal or a notice of withdrawal,
as the case may be, must be guaranteed by an Eligible Institution unless
the Notes tendered hereby are tendered (i) by a registered Holder who has
not completed the box entitled "Special Registration Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for
the account of an Eligible Institution.
If this Letter of Transmittal is signed by the registered Holder or
Holders of Notes (which term, for the purposes described herein, shall
include a participant in the Depository whose name appears on a security
listing as the owner of the Notes) listed and tendered hereby, no
endorsements of the tendered Notes or separate written instruments of
transfer or exchange are required. In any other case, the registered
Holder (or acting Holder) must either properly endorse the Notes or
transmit properly completed bond powers with this Letter of Transmittal
(in either case, executed exactly as the name(s) of the registered
Holder(s) appear(s) on the Notes, and, with respect to a participant in
the Depository whose name appears on a security position listing as the
owner of Notes, exactly as the name of the participant appears on such
security position listing), with the signature on the Notes or bond power
guaranteed by an Eligible Institution (except where the Notes are tendered
for the account of an Eligible Institution).
If this Letter of Transmittal, any certificates or separate written
instruments of transfer or exchange are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, such persons
should so indicate when signing, and, unless waived by the Company, proper
evidence satisfactory to the Company of their authority so to act must be
submitted.
5. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS.
Tendering Holders should indicate, in the applicable box, the name
and address (or account at the Depository) in which the New Notes or
substitute Notes for principal amounts not tendered or not accepted for
exchange are to be issued (or deposited), if different from the names and
addresses or accounts of the person signing this Letter of Transmittal.
In the case of issuance in a different name, the employer identification
number or social security number of the person named must also be
indicated and the tendering Holder should complete the applicable box.
If no instructions are given, the New Notes (and any Notes not
tendered or not accepted) will be issued in the name of and sent to the
acting Holder of the Notes or deposited at such Holder's account at the
Depository.
6. TRANSFER TAXES.
The Company shall pay all transfer taxes, if any, applicable to the
transfer and exchange of Notes to it or its order pursuant to the Exchange
Offer. If a transfer tax is imposed for any other reason other than the
transfer and exchange of Notes to the Company or its order pursuant to the
Exchange Offer, the amount of any such transfer taxes (whether imposed on
the registered Holder or any other person) will be payable by the
tendering Holder. If satisfactory evidence of payment of such taxes or
exception therefrom is not submitted herewith, the amount of such transfer
taxes will be collected from the tendering Holder by the Exchange Agent.
Except as provided in this Instruction 6, it will not be necessary
for transfer stamps to be affixed to the Notes listed in this Letter of
Transmittal.
7. WAIVER OF CONDITIONS.
The Company reserves the right, in its reasonable judgment, to waive,
in whole or in part, any of the conditions to the Exchange Offer set forth
in the Prospectus.
8. MUTILATED, LOST, STOLEN OR DESTROYED NOTES.
Any Holder whose Notes have been mutilated, lost, stolen or destroyed
should contact the Exchange Agent at the address indicated above for
further instructions.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering as well as requests
for additional copies of the Prospectus and this Letter of Transmittal,
may be directed to the Exchange Agent at the address and telephone
number(s) set forth above. In addition, all questions relating to the
Exchange Offer, as well as requests for assistance or additional copies of
the Prospectus and this Letter of Transmittal, may be directed to Oshkosh
Truck Corporation, P.O. Box 2566, 2307 Oregon Street, Oshkosh, Wisconsin
54903-2566, telephone (920) 235-9151.
10. VALIDITY AND FORM.
All questions as to the validity, form, eligibility (including time
of receipt), acceptance of tendered Notes and withdrawal of tendered Notes
and withdrawal of tendered Notes will be determined by the Company in its
sole discretion, which determination will be final and binding. The
Company reserves the absolute right to reject any and all Notes not
properly tendered or any Notes the Company's acceptance of which would, in
the opinion of counsel for the Company, be unlawful. The Company also
reserves the right, in its reasonable judgment, to waive any defects,
irregularities or conditions of tender as to particular Notes. The
Company's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in this Letter of Transmittal) will be final
and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Notes must be cured within such time as the
Company shall determine. Although the Company intends to notify Holders
of defects or irregularities with respect to tenders of Notes, neither the
Company, the Exchange Agent nor any other person shall incur any liability
for failure to give such notification. Tenders of Notes will not be
deemed to have been made until such defects or irregularities have been
cured or waived. Any Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not
been cured or waived will be returned by the Exchange Agent to the
tendering Holder as soon as practicable following the Expiration Date.
IMPORTANT TAX INFORMATION
Under federal income tax law, a Holder tendering Notes is required to
provide the Exchange Agent with such Holder's correct TIN on Substitute
Form W-9 above. If such Holder is an individual, the TIN is the Holder's
social security number. The Certificate of Awaiting Taxpayer
Identification Number should be completed if the tendering Holder has not
been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the Exchange Agent is not provided with the
correct TIN, the Holder may be subject to a $50 penalty imposed by the
Internal Revenue Service. In addition, payments that are made to such
Holder with respect to tendered Notes may be subject to backup
withholding.
Certain Holders (including, among others, all domestic corporations
and certain foreign individuals and foreign entities) are not subject to
these backup withholding and reporting requirements. Such a Holder, who
satisfies one or more of the conditions set forth in Part 2 of the
Substitute Form W-9 should execute the certification following such
Part 2. In order for a foreign Holder to qualify as an exempt recipient,
that Holder must submit to the Exchange Agent a properly completed
Internal Revenue Service Form W-9, signed under penalties of perjury,
attesting to that Holder's exempt status. Such forms can be obtained from
the Exchange Agent.
If backup withholding applies, the Exchange Agent is required to
withhold 31% of any amounts otherwise payable to the Holder. Backup
withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may
be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a Holder
with respect to Notes tendered for exchange, the Holder is required to
notify the Exchange Agent of his or her correct TIN by completing the form
herein certifying that the TIN provided on Substitute Form W-9 is correct
(or that such Holder is awaiting a TIN) and that (i) each Holder is
exempt, (ii) such Holder has not been notified by the Internal Revenue
Service that he or she is subject to backup withholding as a result of
failure to report all interest or dividends or (iii) the Internal Revenue
Service has notified such Holder that he or she is no longer subject to
backup withholding.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
Each Holder is required to give the Exchange Agent the social
security number or employer identification number of the record Holder(s)
of the Notes. If Notes are in more than one name or are not in the name
of the actual Holder, consult the instructions on Internal Revenue Service
Form W-9, which may be obtained from the Exchange Agent, for additional
guidance on which number to report.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
If the tendering Holder has not been issued a TIN and has applied for
a number or intends to apply for a number in the near future, write
"Applied For" in the space for the TIN on Substitute Form W-9, sign and
date the form and the Certificate of Awaiting Taxpayer Identification
Number and return them to the Exchange Agent. If such certificate is
completed and the Exchange Agent is not provided with the TIN within 60
days, the Exchange Agent will withhold 31% of all payments made thereafter
until a TIN is provided to the Exchange Agent.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF
(TOGETHER WITH NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER
REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY
THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
EXHIBIT 99.2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens:
e.g., 000-00-0000. Employer identification numbers have nine digits
separated by only one hyphen: e.g., 00-0000000. The table below will help
determine the number to give the payer.
<TABLE>
<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF--
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if
combined funds, any one of the
individuals(1)
3. Husband and wife (joint account) The actual owner of the account or, if
joint funds, either person(1)
4. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the only
contributor, the minor(1)
6. Account in the name of guardian or The ward, minor, or incompetent person(3)
committee for a designated ward, minor,
or incompetent person
7. a. The usual revocable savings trust The grantor-trustee(1)
account (grantor is also trustee)
b. So-called trust account that is not The actual owner(1)
a legal or valid trust under state law
8. Sole proprietorship account The owner(4)
<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER IDENTIFICATION NUMBER
OF--
<S> <C>
9. A valid trust, estate, or pension trust Legal entity (do not furnish the
identifying number of the personal
representative or trustee unless the
legal entity itself is not designated in
the account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a state or local
government, school district, or
prison) that receives agricultural
program payments
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such person's
social security number.
(4) Show the name of the owner. You may also enter your business or "doing business
as" name. Furnish the owner's social security number or the employer
identification number of the sole proprietorship.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
</TABLE>
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know
your number, obtain Form SS-5, Application for a Social Security Number
Card (for individuals), or Form SS-4, Application for Employer
Identification Number (for businesses and all other entities), at an
office of the Social Security Administration or the Internal Revenue
Service.
To complete Substitute Form W-9, if you do not have a taxpayer
identification number, write "Applied For" in the space for the taxpayer
identification number in Part I, sign and date the Form, and give it to
the requester. Generally, you will then have 60 days to obtain a taxpayer
identification number and furnish it to the requester. If the requester
does not receive your taxpayer identification number within 60 days, backup
withholding, if applicable, will begin and will continue until you furnish
your taxpayer identification number to the requester.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments
include the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under section 403(b)(7).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof.
- A foreign government or a political subdivision, agency or
instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the
United States or a possession of the United States.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An entity registered at all times during the tax year under the
Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section
1441.
- Payments to partnerships not engaged in a trade or business in the
United States and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid
in money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include
the following:
- Payments of interest on obligations issued by individuals. NOTE: You
may be subject to backup withholding if (i) this interest is $600 or
more, (ii) the interest is paid in the course of the payer 5 trade or
business and (iii) you have not provided your correct taxpayer
identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends
under section 852).
- Payments described in section 6049(b) (5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE A SUBSTITUTE FORM W-9 TO AVOID
POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER.
FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE
OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends
that are not subject to information reporting are also not subject to
backup withholding. For details, see the regulations under sections 6041,
6041A(a), 6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to
payers who must report the payments to IRS. The IRS uses the numbers for
identification purposes and to help verify the accuracy of your tax
return. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of
taxable interest, dividends, and certain other payments to a payee who
does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If
you fail to furnish your correct taxpayer identification number to a
payer, you are subject to a penalty of $50 for each such failure unless
your failure is due to reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE STATEMENTS WITH RESPECT TO WITHHOLDING.--If
you make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--If you falsify
certifications or affirmations, you are subject to criminal penalties
including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR
TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE
Unless otherwise noted herein, all references to section numbers or to
regulations are references to the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
8-3/4% SENIOR SUBORDINATED NOTES DUE 2008
(INCLUDING THOSE IN BOOK-ENTRY FORM)
OF
OSHKOSH TRUCK CORPORATION
This form or one substantially equivalent hereto must be used to
accept the Exchange Offer of Oshkosh Truck Corporation (the "Company")
made pursuant to the Prospectus, dated , 1998 (the
"Prospectus"), if certificates for the outstanding 8-3/4% Senior
Subordinated Notes Due 2008 of the Company (the "Senior Subordinate Notes"
or the "Notes") are not immediately available or if the procedure for
book-entry transfer cannot be complete on a timely basis or time will not
permit all required documents to reach the Exchange Agent prior to 12:00
midnight, New York time, on the Expiration Date of the Exchange Offer.
Such form may be delivered or transmitted by telegram, telex, facsimile
transmission, mail or hand delivery to Firstar Trust Company (the
"Exchange Agent") as set forth below. In addition, in order to utilize
the guaranteed delivery procedure to tender Notes pursuant to the Exchange
Offer, a completed, singed and dated Letter of Transmittal (or facsimile
thereof) must also be received by the Exchange Agent prior to 12:00
midnight, New York City time, on the Expiration Date. Capitalized terms
not defined herein are defined in the Prospectus.
FIRSTAR TRUST COMPANY, EXCHANGE AGENT
BY MAIL, HAND OR OVERNIGHT COURIER:
Firstar Trust Company
1555 North RiverCenter Drive
Suite 301
Milwaukee, Wisconsin 53212
Attention: Pamela Warner
By Facsimile Transmission
(For Eligible Institutions Only):
(414) 905-5049
Confirm by Telephone:
(414) 905-5008
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE, OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
<PAGE>
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Notes set forth below, pursuant to the
guaranteed delivery procedure described in "The Exchange Offer --
Guaranteed Delivery Procedures" section of the Prospectus.
Principal Amount of Notes Tendered:*
$_______________________________________________________________________
Certificate Nos. (if available):
________________________________________________________________________
Total Principal Amount Represented by Certificate(s):
________________________________________________________________________
* Must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
All authority herein conferred or agreed to be conferred shall
survive the death or incapacity of the undersigned and every obligation of
the undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned.
PLEASE SIGN HERE
_______________________________________________ _______________________
_______________________________________________ _______________________
Signature(s) of Owner(s) or Authorized Signatory Date
Area Code and Telephone Number:__________________________________________
Must be signed by the holder(s) of Notes as their name(s) appear(s)
on certificates for Notes or on a security position listing, or by
person(s) authorized to become registered holder(s) by endorsement and
documents transmitted with this Notice of Guaranteed Delivery. If
signature is by a trustee, executor, administrator, guardian, attorney-in-
fact, officer or other person acting in a fiduciary or representative
capacity, such person must set forth his or her full title below. If
Notes will be delivered by book-entry transfer to The Depository Trust
Company, provide account number.
Please print name(s) and address(es)
Name(s): _____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
Capacity: _____________________________________________________________
_____________________________________________________________
Address(es): _____________________________________________________________
_____________________________________________________________
Account Number:___________________________________________________________
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a financial institution (including most banks,
savings and loan associations and brokerage houses) that is a participant
in the Securities Transfer Agents Medallion Program, the New York Stock
Exchange Medallion Signature Program or the Stock Exchanges Medallion
Program, hereby guarantees that the undersigned will deliver to the
Exchange Agent the certificates representing the Notes being tendered
hereby or confirmation of book-entry transfer of such Notes into the
Exchange Agent's account at The Depository Trust Company, in proper form
for transfer, together with any other documents required by the Letter of
Transmittal within three New York Stock Exchange trading days after the
Expiration Date.
Name of Firm:
AUTHORIZED SIGNATURE
Address: Name:
(Please Type or Print)
Title:
Zip Code
Area Code and Date:
Telephone Number:
NOTE: DO NOT SEND CERTIFICATES OF NOTES WITH THIS FORM. CERTIFICATES OF
NOTES SHOULD BE SENT ONLY WITH A COPY OF THE PREVIOUSLY EXECUTED LETTER OF
TRANSMITTAL.
