SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
/X/ Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal year ended
October 31, 1995.
/ / Transition report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 for the transition
period from to .
Commission file number 1-9299
HARNISCHFEGER INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 39-1566457
(State of (I.R.S. Employer
Jurisdiction of Identification No.)
Incorporation or
Organization)
13400 Bishops Lane, Brookfield, Wisconsin 53005
(Address of Principal Executive Office)
Registrant's Telephone Number, Including Area Code:
(414) 671-4400
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange On
Title of Each Class Which Registered
Common Stock, $1 Par Value New York and Pacific Stock
Exchanges
Preferred Stock Purchase Rights New York and Pacific Stock
Exchanges
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. /X/
The aggregate market value of Registrant's Common
Stock held by non-affiliates, as of January 26, 1996, based
on a closing price of $32 7/8, was approximately $1,607.6
million.
The number of shares outstanding of Registrant's
Common Stock, as of January 26, 1996, was 48,901,618.
DOCUMENTS INCORPORATED BY REFERENCE
1995 Annual Report to Shareholders (Parts I, II and IV).
Proxy statement for the 1996 annual meeting of stockholders
to be filed within 120 days of the end of the Company's
fiscal year (Part III).
HARNISCHFEGER INDUSTRIES, INC.
<TABLE>
<CAPTION>
INDEX TO
ANNUAL REPORT ON FORM 10-K
For The Year Ended October 31, 1995
Page
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Part I
Item 1. Business................................................. 3
Item 2. Properties............................................... 11
Item 3. Legal Proceedings........................................ 14
Item 4. Submission of Matters to a Vote of Security Holders...... 14
Part II
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters...................................... 16
Item 6. Selected Financial Data for the Registrant for Each of the
Last Five Fiscal Years................................... 16
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................ 16
Item 8. Financial Statements and Supplementary Data.............. 16
Item 9. Disagreements on Accounting and Financial Disclosure..... 16
Part III
Item 10. Directors and Executive Officers of the Registrant....... 16
Item 11. Executive Compensation................................... 16
Item 12. Security Ownership of Certain Beneficial Owners and
Management............................................... 16
Item 13. Certain Relationships and Related Transactions........... 16
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K.............................................. 16
Signatures ......................................................... 21
</TABLE>
PART I
Item 1. Business
SEGMENTS OF BUSINESS
Harnischfeger Industries, Inc. ("Harnischfeger
Industries" or the "Company") is a holding company for
subsidiaries involved in the worldwide manufacture and
distribution of: papermaking machinery (Beloit
Corporation); surface mining equipment (P&H(R) Mining
Equipment); material handling equipment (P&H Material
Handling); and underground mining equipment (Joy Mining
Machinery). In early fiscal 1996, the Company completed
the acquisition of Dobson Park Industries plc ("Dobson"),
an industrial engineering group with interests in
underground mining equipment, industrial electronic control
systems, toys and plastics. Dobson's principal subsidiary,
Longwall International, is engaged in the manufacture, sale
and service of mining equipment for the international
underground coal mining industry and has been added to the
Company's Mining Equipment Segment.
Harnischfeger Industries is the direct successor to a
business begun over 100 years ago which, at October 31,
1995, through its subsidiaries, manufactures and markets
products classified into three industry segments:
Papermaking Machinery and Systems, Mining Equipment, and
Material Handling.
PAPERMAKING MACHINERY AND SYSTEMS
The Papermaking Machinery and Systems Group is
comprised of the Company's 80% interest in Beloit
Corporation ("Beloit"). Mitsubishi Heavy Industries, Ltd.
("Mitsubishi") is the owner of the other 20% interest in
Beloit. The Company and Mitsubishi have entered into
certain agreements that provide Mitsubishi with the right
to designate one of Beloit's five directors. These
agreements also place certain restrictions on the transfer
of Beloit stock. In the event of a change in control of the
Company, Mitsubishi has the right to sell its 20% interest
back to the Company for the greater of $60 million or the
book value of its equity interest.
Beloit is a leader in the design and manufacture of
papermaking machinery and related products used in the pulp
and paper industries. Beloit operates on a global basis
with major manufacturing facilities in seven countries and
sales and service offices located throughout the world. In
addition, licensing arrangements exist with several major
foreign companies.
Beloit's activities are divided into the following
categories: complete installations involving the design,
manufacture and installation of integrated papermaking
equipment and systems; major rebuilds and servicing of
existing systems; and the sale of ancillary equipment and
replacement parts. This machinery is custom designed to
meet the specific needs of each customer. In 1995, Beloit
expanded its service business through the acquisition of
the roll-covering business of Rollin, S.A., a roll service
and repair company located in France.
Beloit is known for the quality and dependability of
its products and is a leader in product innovation and
development. Beloit has made a continuous commitment to
research and development activities, and has been granted
numerous patents on its designs. Beloit systems and
equipment are used by a substantial number of paper
producers, both domestic and foreign, and Beloit's
installed base of equipment exceeds that of any of its
competitors.
A major factor in Beloit's success in the paper
machinery industry has been its international manufacturing
operations. Beloit's overseas facilities have been used to
support both domestic and foreign sales and have provided
Beloit with the flexibility to shift its manufacturing to
more favorable locations as appropriate. In addition,
Beloit has been able to take advantage of favorable export
financing provided by certain foreign governments.
Beloit's manufacturing facilities are supported by a
domestic and international marketing network staffed by
experienced sales engineers.
Formerly, the Papermaking and Systems Group also
included the Company's 20% interest in Measurex Corporation
("Measurex"). On December 29, 1994, Measurex repurchased
2,026,900 shares of its stock which had been held by the
Company. On June 23, 1995, Measurex Corporation
repurchased the remaining 1,613,100 shares of its stock.
These transactions resulted in a gain of $29.7 million.
Measurex continues to have cooperative agreements with
Beloit.
MINING EQUIPMENT
P&H Mining Equipment is the world's largest producer
of electric mining shovels and is a significant producer of
electric and diesel-electric crawler and walking draglines,
hydraulic mining excavators, blasthole drills, and electric
shovel, dredge and dragline bucket products. Electric
mining shovels range in capacity from 18 to 80 cubic yards,
crawler draglines from 10 to 20 cubic yards, and hydraulic
mining excavators from 12 to 27 cubic yards. Capacities for
the walking draglines range from 20 to 150 cubic yards.
In 1991, P&H Mining Equipment expanded its product
lines by acquiring the large rotary blasthole drill product
line from the Gardner-Denver Mining and Construction
Division of Cooper Industries, Inc. There are three drill
models currently in the active product line, with drilling
diameters ranging from 9 to 22 inches and bit load
capacities from 70,000 to 150,000 pounds.
The products of P&H Mining Equipment are used in
mines, quarries and earth-moving operations in the digging
and loading of such minerals and other ores as coal,
copper, gold, iron ore, lead, zinc, bauxite, uranium,
phosphate, stone and clay.
P&H Mining Equipment has a relationship in the mining
shovel business with Kobe Steel, Ltd. ("Kobe") pursuant to
which P&H Mining Equipment licenses Kobe to manufacture
certain electric mining shovels and related replacement
parts in Japan. Harnischfeger Corporation has the exclusive
right to market Kobe-manufactured mining shovels and parts
outside Japan (except in the case of certain government
sales). In addition, Harnischfeger Corporation is party to
an agreement, through 1996, with a corporate unit of the
People's Republic of China, licensing the manufacture and
sale of two models of electric mining shovels and related
components. This relationship provides P&H Mining Equipment
with an opportunity to sell component parts for shovels
built in China.
On November 29, 1994, pursuant to an exchange of
common stock, the Company completed its acquisition of Joy
Technologies Inc. ("JOY" or "Joy Mining Machinery"), a
world leader in underground mining equipment. JOY
manufactures and services mining equipment for the
underground extraction of coal and other bedded deposits
and has facilities in Australia, South Africa, the United
Kingdom and the United States, as well as sales offices in
Poland and the People's Republic of China. Joy Mining
Machinery designs, manufactures and distributes continuous
miners, entry drivers and sump shearers; long-wall
shearers; shuttle cars; and continuous haulage systems for
use in underground mining. JOY products are not sold into
the general construction industry, and demand for them is
not tied to cycles in that industry. JOY also maintains an
extensive network of service and spare parts distribution
centers to rebuild and service equipment and sell spare
parts in support of its installed base. This network
includes six service centers in the United States and four
outside of the United States, all of which are
strategically located in major underground mining regions.
The financial position and results of operations of
Harnischfeger Industries and JOY were combined
retroactively in fiscal 1995.
In early fiscal 1996, the Company completed the
acquisition of Dobson Park Industries plc for a
purchase price of approximately $330 million including
acquisition costs.
Dobson, headquartered in the United Kingdom, is an
industrial engineering group with interests in underground
mining equipment, industrial electronic control systems,
toys and plastics. Longwall International ("Longwall"),
one of the main subsidiaries of Dobson, is engaged in the
manufacture, sale and service of underground mining
equipment for the international coal mining industry. Its
products include electronically controlled roof support
systems, armored face conveyors, pumps and belt conveyor
components and systems. Longwall will be fully integrated
into Joy Mining Machinery and will enable JOY to offer
integrated underground longwall mining systems to the
worldwide mining industry. The industrial electronic and
toys/plastics businesses are being evaluated in the context
of the five characteristics required for consideration as a
core business of this Company. As a result of this
evaluation, it is likely that these businesses will be
sold.
Financial information with respect to the acquisition
of Dobson is presented in Note 17 to the Financial
Statements of the 1995 Annual Report to Shareholders
incorporated by reference from the Company's Current Report
on Form 8-K dated December 8, 1995.
P&H MATERIAL HANDLING
P&H Material Handling produces lines of
through-the-air material handling equipment designed for a
variety of users as well as container handling cranes for
use in ports. The Division is comprised of five business
groups: P&H Equipment, P&H Aftermarket, P&H Distribution
and Service, Morris - Engineered Products Division and
Morris - Standard Products Division.
P&H Equipment
The P&H Equipment group is comprised of the overhead
crane and hoist product lines in the United States. It was
formed from the core of what made up the Material Handling
Equipment Division in prior years.
The new crane portion of the group is comprised of
several product lines: engineered cranes, standard cranes,
portal cranes and crane components. Cranes are designed for
installation in a wide range of industrial settings. Each
crane is engineered to the customer's specifications, using
standard components wherever possible. Engineered cranes
are marketed for moderate to severe duty cycle applications
in capacities from 3 to 800 tons.
Standard overhead cranes are available in capacities
from 5 to 100 tons. Stacker cranes, ranging in capacities
from 2 to 50 tons, are particularly suitable for factory
automation projects. Portal cranes range in lifting
capacities from 5 to 100 tons and are used outdoors for
woodyard, scrap, and container handling.
The large installed base of cranes and increasing
sensitivity of customers to opportunities for improved
manufacturing efficiency from upgrading their material
handling equipment provides this product line an opportunity
for growth.
The component products portion of this group consists
of electric wire rope and chain hoists, manual chain hoists,
ratchet lever hoists, and electrical products. Hoists range
in capacities from 1/8 ton to 60 tons. These hoists use
state-of-the-art materials and manufacturing techniques and
feature a wide variety of controls.
P&H Aftermarket
The P&H Aftermarket Group consists of: Product
Support, which markets repair parts, and PHoenix(TM) which
handles pre-owned and remanufactured cranes and parts.
The Product Support portion of the aftermarket group
markets replacement products and parts through Material
Handling Centers, both independent and company owned, in
domestic markets and through licensees or agents in
international markets. This group differentiates itself
from the competition through reliable and responsive
delivery performance.
The PHoenix portion of the aftermarket group markets
pre-owned cranes under the PHoenix trademark which have been
remanufactured and modernized to meet customer requirements.
It also markets pre-owned parts to its customers. The
PHoenix group also provides engineering services for the
revitalization of crane and runway systems. The group's
products are marketed direct and through both independent
and company owned Material Handling Centers.
P&H Distribution and Service
This group provides installation, erection and repair
and maintenance services under the ProCare(R) trademark
through the growing network of company owned Material
Handling Centers. The group responds to customers'
increased desire to outsource the repair and maintenance of
overhead cranes and hoists.
Morris - Engineered Products Division
The Morris - Engineered Products Division is the
larger portion of the Morris Mechanical Handling business
based in the United Kingdom. It manufactures high integrity
special purpose heavy lifting equipment, principally
container handling cranes. In addition, its operations in
South Africa are involved in the manufacture and service of
cranes and other lifting equipment.
It also has a United Kingdom Crane Service Division that
distributes and services overhead lifting equipment
throughout the United Kingdom.
Morris - Standard Products Division
The Morris - Standard Products Division manufactures
hoists, cranes, linear motors, and controls. The hoist
division manufactures a range of electric wire rope hoists
and both electric and hand chain hoists. The industrial
cranes division manufactures electric overhead cranes all to
standardized designs. Linear Motors manufactures crane and
general industrial controls and linear motors for special
and general application. A recently acquired operation in
Singapore will provide a base for distribution of standard
products in that region.
DISCONTINUED SEGMENTS
Environmental
The Company completed the sale of Joy Environmental
Technologies ("JET") in the first quarter of 1996. JET has
been presented as a discontinued operation in the Company's
Consolidated Financial Statements.
JET supplies flue gas desulfurization systems for
reducing levels of sulfur dioxide in smokestack emissions
which otherwise might react with other chemicals in the
atmosphere to form acid rain. JET also designs, fabricates,
and installs systems for the collection and removal of ash
accumulated at the bottom of coalburning boilers and ash
carried up the exhaust flues of these boilers. These
products and services are used worldwide by various electric
utilities and industrial companies.
Systems
Syscon Corporation ("Syscon"), the remaining unit in
the Company's Systems Group, was sold in February, 1995 to
Logicon, Inc. Syscon is engaged principally in providing
systems development, systems integration and systems
services to the United States Government, government
agencies and commercial enterprises.
INTERNATIONAL OPERATIONS
In 1995, 1994 and 1993, Beloit's foreign sales
(principally the United Kingdom, Italy, Canada, Brazil and
Poland) amounted to 41%, 30% and 28%, respectively, of
Beloit's consolidated net sales.
Foreign sales of the Mining Equipment segment
(principally in Australia, South Africa, Brazil, Canada,
United Kingdom and Germany) generated approximately 44% of
the segment's consolidated net sales in 1995, 48% in 1994
and 49% in 1993.
More than 60% of Longwall's net sales in 1995 were
derived from markets outside the United States (principally
the United Kingdom, Continental Europe, Asia, Australia,
South Africa and Canada).
P&H Material Handling has been actively increasing its
global operations and now has operations in the United
Kingdom, South Africa, Canada, Mexico, and Singapore which
offer a combination of manufacturing, distribution and
service facilities. In addition, agents and distributors
represent their products in other parts of the world.
Foreign sales in 1995 amounted to 48% of the segment's
consolidated net sales.
Beloit has granted licensing agreements to serve
certain foreign markets to companies located in Australia,
Japan and Spain. The licensing agreement with Mitsubishi in
Japan represents the majority of Beloit's license income.
Beloit maintains sales and service offices throughout the
world to remain competitive in foreign markets.
In general, sales of licensed mining products are
managed within the country of manufacture by the foreign
licensee. Licensee exports, together with exports from the
United States, are sold through P&H Mining Equipment's and
P&H Material Handling's subsidiaries, which directly or
through subsidiaries or affiliates maintain regional sales
offices in: Brisbane, Melbourne, Singleton, Mackay and
Perth, Australia; North York and Vancouver, Canada;
Hermosillo, Mexico; Belo Horizonte and Sao Paulo, Brazil;
Santiago, Chile; Lima, Peru; Weiterstadt, Germany;
Aylesbury, United Kingdom; Johannesburg, South Africa; and
Puerto Ordaz, Venezuela.
Harnischfeger Industries' international operations are
subject to certain risks not generally applicable to its
domestic businesses, including currency fluctuations,
changes in tariff restrictions, restrictive regulations of
foreign governments (including price and exchange controls),
and other governmental actions. Harnischfeger Industries
has entered into various foreign currency exchange contracts
with major international financial institutions designed to
minimize its exposure to exchange rate fluctuations on
foreign currency transactions.
GENERAL
Seasonality
No significant portion of Harnischfeger Industries'
business is subject to or influenced by seasonal factors;
however, Harnischfeger Industries' business is influenced by
the cyclical nature of the paper machinery, mining, and
capital goods industries.
Distribution
Sales of Beloit products are principally made directly
to the end user. On a worldwide basis, each manufacturing
facility is responsible for a designated market area. Beloit
also maintains a worldwide marketing group to coordinate and
support worldwide facilities in marketing strategies,
technical sales support and participation in major projects
including interface with engineering firms and financial
institutions. Beloit offers systems and turnkey alternatives
to assist in related business development throughout the
world. Agents are used in certain foreign countries to
augment Beloit's sales force stationed in the segment's
manufacturing facilities and in sales offices worldwide.
In the United States, surface mining equipment,
overhead cranes and certain electrical products are marketed
principally directly from the segments' headquarters and
regional sales offices. Electric wire rope and chain hoists
and crane modernizations are sold through dealers and
distributors, assisted and coordinated by corporate and
regional office personnel. P&H Material Handling has a
dealer network of regional distributorships (referred to as
Material Handling Centers).
Joy Mining Machinery and Longwall sales are made mostly
through sales offices located in major coal-producing areas.
JOY's and Longwall's worldwide sales forces have marketing
responsibility for new machine sales, as well as for parts,
components and rebuild services provided to customers. A
segment of the sales forces in the United States is
dedicated to manning a truck fleet which visits customer
sites on a regular basis in order to deliver components and
parts.
The manufacture and sale of repair and replacement
parts and the servicing of equipment are important aspects
of P&H Mining Equipment operations. P&H Mining Equipment
maintains mining parts warehouses in Arizona, Minnesota,
Nevada, Wisconsin, West Virginia and Wyoming and in
Australia, Brazil, Canada, Chile, Germany, South Africa and
Venezuela. These warehouses facilitate shipment of
customers' orders for parts, and some also function as
regional service centers.
Competition
Harnischfeger Industries conducts its domestic and
foreign operations under highly competitive market
conditions, requiring that its products and services be
competitive in price, quality, service and delivery.
The pulp and paper capital machinery market is globally
competitive; Beloit's two major competitors are
foreign-owned companies. The principal competitors are
Valmet Paper Machinery, Inc., with controlling interest held
by Valmet Corporation, Finland, and Voith Sulzer Papertech,
with headquarters in Germany.
P&H Mining Equipment's principal competitors in
electric mining shovels are Bucyrus Erie Company and Marion,
a division of Global Industrial Technologies. Harnischfeger
Industries believes P&H Mining Equipment is the leading
participant in this market. Its principal competitors in the
hydraulic mining excavator market are Demag, Hitachi,
Caterpillar and Orenstein & Koppel. In draglines, the main
competitors are Bucyrus Erie Company and Marion. The
Division's main competitors in drills are Ingersoll-Rand,
Driltech and Bucyrus Erie Company.
In the underground coal mining industry, JOY competes
primarily on the basis of the quality and reliability of its
products and its ability to provide rapid, extensive and
cost-effective repair and rebuild services and delivery of
spare parts. JOY's primary competitors in the continuous
mining machinery industry are EIMCO(a Tampella Tamrock
Company), the Jeffrey division of Indresco Inc., Simmons-
Rand Company(a subsidiary of Long Airdox Company), and Voest
Alpine. In the longwall shearer new equipment market, JOY
competes primarily with Anderson Longwall PLC, Eickhoff
Corporation, and Mitsui Miike Machinery Company, Ltd. In
the continuous haulage market, JOY competes with Long
Airdox, Fairchild International, and Jeffrey. In the sale
of spare parts for JOY's equipment, JOY competes with EIMCO
and various small suppliers.
Longwall competes globally. The primary competitors of
Longwall are DBT and the Marmon Group.
The principal worldwide competitors for the P&H
Material Handling Division are Demag and Konecranes
International KCI. Harnischfeger Industries believes that
P&H Material Handling is one of the largest worldwide
participants in this market. When considering any specific
geographic market, the competitors would normally be split
into overhead cranes, dockside cranes, hoists, and service.
There are significant numbers of competitors in each of the
geographic markets and segments of those markets.
Customers
During 1995, there were no sales or services made to
an individual customer amounting to 10% or more of
consolidated sales.
Backlog
Backlog by business segment for the Company's
continuing operations (in thousands of dollars) as of the
end of fiscal years 1995 and 1994 was as follows:
<TABLE>
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October 31,
---------------------
1995 1994
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<S> <C> <C>
Papermaking Machinery and Systems.................... $ 679,625 $633,770
Mining Equipment..................................... 221,540 190,900
Material Handling Equipment.......................... 130,879 107,112
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$1,032,044 $931,782
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</TABLE>
Supply of Materials and Purchased Components
The Papermaking Machinery and Systems Group purchases
raw materials used in its products which include: plates,
sheets, shapes, carbon and alloy steel, stainless steel,
brass and bronze, nickel alloy, and aluminum. Purchases of
semi-processed and component parts include: castings,
valves, filters, pumps, dryers, electrical equipment, and
various vacuum, drying, hydraulic, combustion,
material-handling and temperature control systems. Beloit
has approximately 4,700 suppliers of which approximately
1,000 are most commonly used. No single source is dominant.
P&H Mining Equipment Division and P&H Material
Handling manufacture machines and heat-treated gears,
pinions, shafts, structural fabrications, electrical
motors, generators, and other electrical parts. They
purchase raw and semi-processed steel, castings, forgings,
copper and other materials for these parts and components
from approximately 400 suppliers. In addition, component
parts, such as engines, bearings, controls, hydraulic
components, and a wide variety of mechanical and electrical
items are purchased from approximately 1,500 suppliers.
Purchases of materials and components are made on a
competitive basis with no single source being dominant.
JOY purchases electric motors, gears, hydraulic
parts, electronic components, forgings, steel, clutches and
other components and raw materials from outside suppliers.
Although JOY purchases certain components and raw materials
from a single supplier, alternative sources of supply are
available for all such quantities. JOY believes that it
has adequate sources of supplies of component parts and raw
materials for its manufacturing requirements.
Longwall purchases electric motors, gears, hydraulic
parts, electronic components, steel and other components
and raw materials from outside suppliers. Certain
components and raw materials are purchased from a single
supplier; however, alternative sources of supply are
available for all such quantities. Longwall believes that
it has adequate sources of supplies of component parts and
raw materials for all its manufacturing requirements.
Patents and Licenses
Patents are quite important in the papermaking
industry. All major machinery manufacturers use patents
extensively to protect the technology base that results
from research and development. Beloit has been granted
numerous patents on its designs and more are pending. Most
are registered in all of the major countries into which
Beloit and its licensees sell.
In May, 1993, a Federal court jury in Madison,
Wisconsin returned a verdict finding that J.M. Voith GmbH
of Germany and its subsidiary, Voith, Inc. of Appleton,
Wisconsin infringed upon Beloit's patent on its Bel-
Champ(R) technology for the drying technology of large
paper manufacturing machines. The verdict was appealed by
Voith. In September, 1995, J.M. Voith GmbH, Voith, Inc.,
and Beloit reached an understanding concerning settlement
of their outstanding patent litigation.
In addition, on November 23, 1994, a Federal court
jury, in Madison, Wisconsin, returned a verdict finding
Valmet Corporation of Finland guilty of infringing a key
patent held by Beloit Corporation on the Bel-Champ paper
machine drying technology. In connection with this suit,
the jury awarded Beloit $7.9 million in damages. The
verdict in this case has been appealed by Valmet and the
award has not been recorded in the Company's financial
statements.
P&H Mining Equipment and P&H Material Handling have
numerous domestic and foreign patents, patent applications
and patent licensing agreements. Harnischfeger Corporation
does not consider these businesses materially dependent
upon any patent or patent license agreement.
JOY, Longwall and their respective subsidiaries own
numerous patents and trademarks and have patent licenses
from others relating to their respective products and
manufacturing methods. Also, patent and trademark licenses
are granted to others throughout the world and royalties
are received under most of these licenses. While JOY and
Longwall do not consider any particular patent or license
or group of patents or licenses to be essential to their
respective business as a whole, both JOY and Longwall
consider its patents and licenses significant to the
conduct of its business in certain product areas.
Research and Development
Harnischfeger Industries maintains a strong commitment
to research and development with engineering staffs that
are engaged in full-time research and development of new,
and improvement of existing, products. Beloit maintains
research and development facilities in Rockton, Illinois,
Pittsfield, Massachusetts, Bolton, United Kingdom, Clarks
Summit, Pennsylvania, Portland, Oregon and Waukesha,
Wisconsin. Harnischfeger Corporation maintains research and
development facilities in Milwaukee, Wisconsin. JOY and
Longwall pursue technological development through the
engineering of new products, systems and applications; the
improvement and enhancement of licensed technology; and
synergistic acquisitions of technology. Research and
development expenses were $30.3 million in 1995, $28.9
million in 1994, and $26.7 million in 1993.
Environmental and Health and Safety Matters
The activities of the Company are regulated by
federal, state and local statutes, regulations and
ordinances relating to both environmental protection and
worker health and safety. These laws govern current
operations, require remediation of environmental impacts
associated with past or current operations, and under
certain circumstances provide for civil and criminal
penalties and fines, as well as injunctive and remedial
relief. The Company's foreign operations are subject to
similar requirements as established by their respective
countries.
The Company has expended substantial managerial and
financial resources in developing and implementing actions
for continued compliance with these requirements. The
Company believes that it has substantially satisfied these
diverse requirements. However, because these requirements
are complex and, in many areas, rapidly evolving, there can
be no guarantee against the possibility of sizeable
additional costs for compliance in the future. These same
requirements must also be met by the Company's competitors
and, therefore, the costs for present and future compliance
with these laws should not create a competitive
disadvantage. Further, these laws have not had, and are not
presently expected to have, a material adverse effect on
the Company.
The Company's operations or facilities have been and
may become the subject of formal or informal enforcement
actions or proceedings for alleged noncompliance with
either environmental or worker health and safety laws or
regulations. Such matters have typically been resolved
through direct negotiations with the regulatory agency and
have typically resulted in corrective actions or abatement
programs. However, in some cases, fines or other penalties
have been paid. Historically, neither such commitments nor
such penalties have been material.
Employees
As of October 31, 1995, Harnischfeger Industries
employed approximately 14,000 persons, of which
approximately 8,800 were employed in the United States.
Approximately 6,950 of the United States employees are
represented by local unions under collective bargaining
agreements with expiration dates from December 31, 1995 to
August 4, 2000. Harnischfeger Industries believes that it
maintains generally good relationships with its employees.
Financial Information about Industry Segments
The financial information on industry segments is
presented in Note 15 to the Financial Statements
incorporated by reference from the Company's Current Report
on Form 8-K dated December 8, 1995.
Item 2. Properties
As of October 31, 1995, the following principal
properties were owned, except as indicated. All of these
plants are generally suitable for operations.
Harnischfeger Industries owns a 120,000 square foot
office building in Brookfield, Wisconsin, which is used as
its worldwide corporate headquarters and is currently
constructing a new corporate headquarters in St. Francis,
Wisconsin.
MINING EQUIPMENT LOCATIONS
<TABLE>
<CAPTION>
Floor Space Land Area
Plant and Location (Sq. Ft.) (Acres) Principal Operations
- ------------------------- ----------- --------- --------------------------
<S> <C> <C> <C>
Milwaukee, Wisconsin..... 1,067,000 46 Electric mining shovels, hydraulic
mining excavators, electric and
diesel-electric draglines and large
rotary blasthole drills.
Crane welding.
Milwaukee, Wisconsin..... 180,000 13 Electrical products, heavy duty
overhead and portal crane components and
service parts warehouse.
Crane assembly.
Franklin, Pennsylvania... 714,640 63 Underground coal mining machinery,
components and parts.
Reno, Pennsylvania....... 121,400 22 Components and parts for
mining machinery.
Brookpark, Ohio.......... 85,000 4 Components and parts for mining
machinery.
Solon, Ohio.............. 96,800 14 Components and parts for mining
machinery.
Bluefield, Virginia...... 102,160 15
Duffield, Virginia....... 72,000 11
Homer City, Pennsylvania. 79,500 10 Mining machinery rebuild, service
and parts sales.
Meadowlands, Pennsylvania 118,316 13
Mt. Vernon, Illinois..... 107,130 12
Price, Utah.............. 44,200 6
New Philadelphia, Ohio... 277,600 17 Axial vane, and centrifugal fans,
components and parts.
Bassendean, Australia.... 75,500 5 Components and parts for mining
shovels.
Mt. Thorley, Australia... 20,000 6 Components and parts for mining
shovels.
Kurri Kurri,
Australia.............. 264,000 1 Mining machinery rebuild,
service and parts sales.
Litigow, Australia....... 8,500 1 Parts sales for mining machinery
parts sales.
Moss Vale, Australia..... 764,150 18 Underground coal mining machinery,
components and parts.
Johannesburg, So.
Africa................. 103,000 6 Components and parts for mining
shovels.
Johannesburg, So.
Africa................. 44,000(1) 1 Electrical products and components
for mining shovels.
Steeledale, South Africa. 557,400 15 Underground coal mining machinery,
components and parts.
Belo Horizonte, Brazil... 37,700 1 Components and parts for mining
shovels.
East Kilbride, Scotland,
U.K.................... 109,550 13 Underground coal mining machinery,
Pinxton, U.K............. 42,000 2 components and parts
- -------------------------
(1) Under a lease expiring in 2005.
</TABLE>
This segment operates warehouses in Casper and Green
River, Wyoming; Hibbing, Minnesota; Charleston and
Pineville, West Virginia; Milwaukee, Wisconsin; Phoenix,
Arizona; Elco, Nevada; Birmingham, Alabama; Carlsbad, New
Mexico; Norton, Virginia; Lovely and Henderson, Kentucky;
Hinton, Sparwood, Cornwall and Vancouver, Canada;
Bayswater, Mt. Thorley, Gracemere and Mackay, Australia;
Belo Horizonte, Brazil; Weiterstadt, Germany; Johannesburg,
Wadeville and Hendrina, South Africa; Stobswood, United
Kingdom and Puerto Ordaz, Venezuela. The warehouses in
Casper, Hibbing, Milwaukee, Mt. Thorley, Belo Horizonte and
Johannesburg are owned; the others are leased. In addition,
the segment leases sales offices throughout the United
States and in principal locations in foreign countries.
P&H MATERIAL HANDLING LOCATIONS
<TABLE>
<CAPTION>
Floor Space Land Area
Plant and Location (Sq. Ft.) (Acres) Principal Operations
- ----------------------- ----------- --------- ----------------------------
<S> <C> <C> <C>
Milwaukee, Wisconsin..... 130,000 (1) 8 Remanufacture of overhead cranes,
hoists and material handling
equipment.
Oak Creek, Wisconsin..... 277,000 36 Engineered and standard overhead
cranes, hoists and material
handling equipment.
Loughborough, UK......... 420,000 36 Engineered and standard overhead
cranes, hoists, controls and
material handling equipment.
Johannesburg, S. Africa.. 124,000 7 Engineered and standard overhead
cranes, hoists and material
handling equipment.
Mexico City, Mexico...... 65,000 3 Engineered and standard overhead
cranes, hoists and material
handling equipment.
Birmingham, Alabama...... 36,500 3 Standard overhead cranes and
service.
Missisauga, Canada....... 17,600 (2) 1 Manufacture of brakes.
Singapore, Singapore..... 21,200 (3) 1 Standard overhead cranes and hoist
distribution.
(1) Under a lease expiring in 1996.
(2) Under a lease expiring in 2000.
(3) The land is under a lease expiring in 2024.
</TABLE>
This division has leased facilities for its company
owned Material Handling Centers in San Leandro, California;
Pittsburg, California; Portland, Oregon; Reno, Nevada;
Dallas, Texas; Houston, Texas; New Orleans, Louisiana;
Chicago, Illinois; Detroit, Michigan; Pittsburgh,
Pennsylvania; and Cleveland, Ohio. In addition, the
division leases sales offices throughout the United States
and in principal locations in foreign countries. It also
has approximately 18 leased locations for service
operations in the United Kingdom, Mexico and South Africa.
PAPERMAKING MACHINERY AND SYSTEMS LOCATIONS
<TABLE>
<CAPTION>
Floor Space Land Area
Plant and Location (Sq. Ft.) (Acres) Principal Operations
- ----------------------- ----------- --------- ------------------------------
<S> <C> <C> <C>
Beloit, Wisconsin......... 928,000 40 Papermaking machinery and finished
product processing equipment.
Beloit, Wisconsin......... 230,000 15 Castings, pattern shop.
Waukesha, Wisconsin....... 57,000 10 Castings, pattern shop and
finished product processing.
Waukesha, Wisconsin....... 76,000(1) 13 Refiner plate machining, finished
product processing and warehousing.
Rockton, Illinois......... 469,000 203 Papermaking machinery, finished
product processing equipment
and R&D center.
South Beloit, Illinois.... 163,000 11 Castings.
Dalton, Massachusetts..... 277,000 55 Stock and pulp preparation
equipment and specialized
processing systems.
Lenox, Massachusetts...... 127,000 19 Winders.
Pittsfield,
Massachusetts........... 36,000 30 Research and development facility and
pilot plant for process simulation.
Aiken, South Carolina..... 92,000 17
Columbus, Mississippi..... 133,000 22 Rubber and polymeric covers for rolls;
Federal Way, Washington... 55,000 3 rolls; rubber blankets; rubber linings
Neenah, Wisconsin......... 77,000 10 and metal roll repairs.
Clarks Summit, PA......... 88,000 10
Renfrew, Canada........... 145,000 22
Kalamazoo, Michigan....... 23,500 1 Filled rolls for supercalenders and
specialty rolls.
Portland, Oregon.......... 41,000 5 Bulk materials handling and drying
systems.
Rochester, New Hampshire.. 15,650 5 Specialty services provided
principally to the paper industry.
Pensacola, Florida........ 7,250 2 Specialty services provide
principally to the paper industry.
Sandusky, Ohio............ 254,000 13 Centrifugal castings.
Glenrothes, United Kingdom 56,000 8 Centrifugal castings.
Campinas, Brazil.......... 202,000 33 Papermaking machinery and finished
product processing equipment;
stock and pulp preparation
equipment; woodyard and pulp
plant equipment.
Bolton, United Kingdom.... 465,400 73 Papermaking machinery and finished
product processing equipment;
stock and pulp preparation
equipment.
Pinerolo, Italy........... 517,400 18 Papermaking machinery and finished
product processing equipment;
stock and pulp preparation
equipment.
Jelenia Gora, Poland...... 522,000 40 Papermaking machinery and finished
product processing equipment;
stock and pulp preparation
equipment.
Swiecie, Poland........... 37,000 (2) 4 Components and parts for papermaking
machinery equipment.
Cernay, France............ 35,200 15 Roll-covering service.
</TABLE>
- -------------------------
(1) Under a lease expiring in 2007.
(2) Under a lease expiring in 2019.
The Papermaking Machinery and Systems business has
warehouse space at the above facilities and in addition
maintains leased facilities in Memphis, Tennessee; Swiecie,
Poland; and Montreal, Canada. Sales offices are also
maintained at various locations throughout the world.
Information relating to lease commitments is presented
in Note 11 to the Financial Statements incorporated by
reference from the Company's Current Report on Form 8-K
dated December 8, 1995.
Item 3. Legal Proceedings
The Company is party to litigation matters and claims
which are normal in the course of its operations and, while
the results of litigation and claims cannot be predicted
with certainty, management believes that the final outcome
of such matters will not have a materially adverse effect
on the Company's consolidated financial position or results
of operations.
The Company is also involved in a number of
proceedings and potential proceedings relating to
environmental matters. Although it is difficult to estimate
the potential exposure to the Company related to these
environmental matters, the Company believes that these
matters will not have a materially adverse effect on its
consolidated financial position or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security
holders during the fourth quarter of fiscal 1995.
Executive Officers of the Registrant
The following table sets forth, through the date of
filing this 10-K report, the executive officers of
Harnischfeger Industries and its major subsidiaries, their
ages, their offices with Harnischfeger Industries and the
period during which they have held such offices.
<TABLE>
<CAPTION>
Name Age Current Office and Principle Occupation
- ---------------------------- --- ----------------------------------------
<S> <C> <C>
Jeffery T. Grade............ 52 Chairman of the Board and Chief Executive
Officer since 1993; Chief Executive Officer
since 1992; President and Chief Operating
Officer since 1986; Director since 1983;
Senior Vice President, Finance and
Administration and Chief Financial
Officer from 1983 to 1986.
Francis M. Corby, Jr........ 51 Executive Vice President for Finance and
Administration since December 1994; Senior Vice
President, Finance and Chief Financial Officer
from 1986 to December 1994.
John Nils Hanson............ 53 Executive Vice President and Chief Operating
Officer since July 1, 1995; President and Chief
Executive Officer of Joy Mining Machinery
1990 to July 1995.
K. Thor Lundgren............ 48 Executive Vice President for Law and Government
Affairs since December 1994; Senior Vice
President and General Counsel from 1991
to December 1994.
Richard W. Schulze.......... 58 Senior Vice President and Special Assistant to
the Chairman and CEO since December 1994; Senior
Vice President, Human Resources and Public
Relations from 1982 to December 1994.
James C. Benjamin........... 43 Vice President and Controller since 1986.
Ian Lambert................. 49 Vice President and Treasurer since 1989.
Joseph A. Podawiltz......... 50 Vice President of Human Resources since
February 1995.
</TABLE>
<TABLE>
<CAPTION> Number
of Years
Name as Officer
- ---------------------------- ----------
<S> <C>
Jeffery T. Grade............ 13
Francis M. Corby, Jr........ 10
John Nils Hanson............ -
K. Thor Lundgren............ 4
Richard W. Schulze.......... 14
James C. Benjamin........... 10
Ian Lambert................. 6
Joseph A. Podawiltz......... -
</TABLE>
Mr. Lundgren joined the Company in September, 1991.
Prior to joining the Company, Mr. Lundgren was a partner
with the law firm of Michael, Best & Friedrich.
Mr. Podawiltz joined the Company in February, 1995.
Prior to joining the Company, Mr. Podawiltz was Vice
President of Human Resources with the A.O. Smith Automotive
Products Company.
The business address of each such person is 13400
Bishops Lane, Brookfield, Wisconsin 53005. All officers
listed above are citizens of the United States of America
except for Mr. Lambert who is a citizen of the United
Kingdom. Officers are elected annually but may be removed
at any time at the discretion of the Board of Directors.
There are no family relationships between the foregoing
officers.
PART II
The information required by Items 6 through 8 is
incorporated by reference from the Company's Current Report
on Form 8-K dated December 8, 1995.
<TABLE>
<CAPTION>
Form 10-K
Item Number
- -----------
<S> <C>
Item 5. Market for the Registrant's Common Stock
and Related Stockholder Matters (filed in
this report on Form 10-K)
Item 6. Selected Financial Data for the Registrant for
Each of the Last Five Fiscal Years
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations
Item 8. Financial Statements and Supplementary Data
Item 9. Disagreements on Accounting and Financial Disclosure:
None
</TABLE>
PART III
All information required by Items 10 through 13 of
Part III, with the exception of information on the
Executive Officers which appears in Part I of this report,
is incorporated by reference from the Company's Proxy
Statement for its 1996 Annual Meeting of Shareholders to be
filed with the Securities and Exchange Commission within
120 days after the close of the fiscal year.
PART IV
The information required by Item 14 is incorporated by
reference from the 1995 Annual Report to Shareholders
reported on the Company's Current Report on Form 8-K dated
December 8, 1995.
<TABLE>
<CAPTION>
<S> <C>
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
(1) Financial Statements
Statement of Income for the years ended
October 31, 1995, 1994 and
1993
Balance Sheet at October 31, 1995 and 1994
Statement of Cash Flows for the years ended
October 31, 1995, 1994 and
1993
Statement of Shareholders' Equity for the years
ended October 31, 1995,
1994 and 1993
Notes to Financial Statements
Report of Independent Accountants
(2) Financial Statement Schedule
For the Years Ended October 31, 1995, 1994 and 1993:
II. Valuation and Qualifying Accounts
</TABLE>
All other schedules are omitted because they are
either not applicable or the required information is shown
in the financial statements or notes thereto.
Financial statements of 50% or less-owned companies
have been omitted because the proportionate share of their
profit before income taxes and total assets are less than
20% of the respective consolidated amounts and investments
in such companies are less than 20% of consolidated total
assets.
(3) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------------------------------------------------------------
<S> <C>
3(a) Certificate of Incorporation of Harnischfeger Industries, Inc.
(incorporated by reference to Exhibit 3(a) of the Registration
Statement on Form S-4, File No. 33-8821).
(b) Bylaws of Harnischfeger Industries, Inc., as amended on
December 11, 1995.
(c) Certificate of Designations of Preferred Stock, Series D
(incorporated by reference to Exhibit 28.1(b) to Registrant's
Current Report on Form 8-K dated March 25, 1992).
(d) Amendment to Certificate of Incorporation of Harnischfeger
Industries, Inc. dated November 29, 1994(incorporated by
reference to Exhibit 4.1(c) to Registration Statement on
Form S-8, File No. 33-57209).
4(a) 9.1% Series A Senior Note Agreement dated as of September 15, 1989
(incorporated by reference to Exhibit 4(b) to Report of Harnischfeger
Industries, Inc. on Form 10-K for the year ended October 31, 1991,
File No. 1-9299).
(b) 9.1% Series B Senior Note Agreement dated as of October 15, 1989
(incorporated by reference to Exhibit 4(c) to Report of Harnischfeger
Industries, Inc. on Form 10-K for the year ended October 31, 1991,
File No. 1-9299).
(c) 8.95% Series C Senior Note Agreement dated as of February 15, 1991
(incorporated by reference to Exhibit 4(d) to Report of Harnischfeger
Industries, Inc. on Form 10-K for the year ended October 31, 1991,
File No. 1-9299).
(d) 8.9% Series D Senior Note Agreement dated as of October 1, 1991
(incorporated by reference to Exhibit 4(e) to Report of
Harnischfeger Industries, Inc. on Form 10-K for the year
ended October 31, 1991, File No. 1-9299).
(e) Indenture for Debentures issued March 3, 1992 between Harnischfeger
Industries, Inc. and Continental Bank, National Association, Trustee,
dated March 1, 1992 (incorporated by reference to Exhibit 4(f) to
Report of Harnischfeger Industries, Inc. on Form 10-K for the year
ended October 31, 1992, File No. 1-9299).
(f) First Supplemental Indenture for Debentures issued June 22, 1992 between
Harnischfeger Industries, Inc. and Continental Bank, National
Association, Trustee, dated June 12, 1992 (incorporated by reference
to Exhibit 4(g) to Report of Harnischfeger Industries, Inc. on
Form 10-K for the year ended October 31, 1992, File No. 1-9299).
(g) Registration Statement filed on Form S-3, for issuance of Debt
Securities of up to $150,000,000 dated August 22, 1992,
File No. 33-51436 (incorporated by reference to Exhibit 4(h) to
Report of Harnischfeger Industries, Inc. on Form 10-K for the
year ended October 31, 1992, File No. 1-9299).
(h) Rights Agreement dated as of February 8, 1989 between the
Registrant and the First National Bank of Boston, as Rights Agent,
which includes as Exhibit A the Certificate of Designations of
Preferred Stock, Series D, setting forth the terms of the
Preferred Stock, Series D; as Exhibit B the Form of Rights
Certificate; and as Exhibit C the Summary of Rights to Purchase
Preferred Stock, Series D (Incorporated by reference to Exhibit 1
to Registrant's Registration Statement on Form 8-A filed on
February 9, 1989).
(i) Harnischfeger Industries, Inc. Stock Employee Compensation Trust
Agreement effective as of March 23, 1993 (incorporated by reference
to Exhibit 4(k) to Report of Harnischfeger Industries, Inc.
on Form 10-K for the year ended October 31, 1993, File No.1-9299).*
(j) Amendment One to Harnischfeger Industries, Inc. Stock Employee
Compensation Trust Agreement dated January 1, 1994.*
(k) Amendment Two to Harnischfeger Industries, Inc. Stock Employee
Compensation Trust Agreement dated May 6, 1995.*
(l) $240,000,000 Amended and Restated Credit Agreement dated as
of November 25, 1994 among Harnischfeger Industries Inc. as
borrower and financial institutions from time to time thereto
as lenders, the First National Bank of Chicago and Royal Bank of
Canada, as co-agents and Chemical Bank as Agent
(incorporated by reference to Exhibit 4(k) to Report of Harnischfeger
Industries, Inc. on Form 10-K for the year ended October 31, 1994,
File No. 1-9299).
(m) Form of Indenture, dated as of September 1, 1993, between
Joy Technologies Inc. and The Bank of Montreal Trust Company,
as Trustee for Joy Technologies Inc.'s 10 1/4% Senior Notes due
2002(incorporated by reference to Exhibit 4.1 to Joy Technologies
Inc.'s Report on Form 10-Q for the quarter ended August 27, 1993,
filed October 7, 1993).
10(a) Harnischfeger Industries, Inc. 1988 Incentive Stock Plan, as amended on
March 6, 1995.*
(b) Deferred Compensation Plan (incorporated by reference to Exhibit
10.4 to Form S-1 Registration Statement of Harnischfeger Corporation,
File No. 12-89771).*
(c) Harnischfeger Industries Deferred Compensation Trust dated
November 1, 1988 (incorporated by reference to Exhibit 10(d) to
Report of Harnischfeger Industries, Inc. on Form 10-K for the
year ended October 31, 1988, File No. 01-9299).*
(d) First Amendment of the Deferred Compensation Trust dated
December 19, 1990.*
(e) Harnischfeger Industries, Inc. Executive Incentive Plan, as amended
as of October 9, 1995.*
(f) Harnischfeger Industries, Inc. Supplemental Retirement and Stock Funding
Plan, as amended as of October 9, 1995.*
(g) Directors Stock Compensation Plan, as amended, as of October 9, 1995.*
(h) Service Compensation Agreement for Directors effective as of
June 1, 1992 (incorporated by reference to Exhibit 10(g) to Report
of Harnischfeger Industries, Inc. on Form 10-K for the year ended
October 31, 1992, File No. 1-9299).*
(i) Key Executive Employment and Severance Agreement, entered into as of
October 8, 1995, between Harnischfeger Industries, Inc. and
Jeffery T. Grade.*
(j) Key Executive Employment and Severance Agreement, entered into as of
October 8, 1995, between Harnischfeger Industries, Inc. and
Francis M. Corby, Jr.*
(k) Key Executive Employment and Severance Agreement, entered into as of
October 8, 1995, between Harnischfeger Industries, Inc. and
K. Thor Lundgren.*
(l) Independent Consultant Agreement, entered into on June 16, 1995, between
Harnischfeger Industries, Inc. and John A. McKay.*
(m) Purchase and Sale Agreement by and among HEI Systems, Inc. and HEI
Acquisition, Inc. and Harnischfeger Industries, Inc., dated as of
October 28, 1993 (incorporated by reference to Exhibit 10(p)
to Report of Harnischfeger Industries, Inc. on Form 10-K for the
year ended October 31, 1993, File No. 1-9299).
(n) Agreement and Plan of Merger, dated as of August 17, 1994 among
Harnischfeger Industries, Inc., Harnischfeger Acquisition
Corporation and Joy Technologies Inc. (incorporated by reference
to Exhibit 2.1 to Registration Statement on Form S-4, File No.1-9299).
(o) Joy Technologies Inc. 1991 Stock Option and Equity Incentive Plan dated
November 12, 1991 (incorporated by reference to Exhibit 99-1999.1 to
Registration Statement on For S-8, File No. 33-57209).*
(p) Amendment to Joy Technologies Inc. 1991 Stock Option and Equity
Incentive Plan dated November 29, 1994 (incorporated by reference
to Exhibit 99-1999.2 to Registration Statement on Form S-8, File
No. 33-57209).*
11 Statement Re Computation of Earnings Per Share.
13 1995 Annual Report to Shareholders (incorporated by reference on
the Company's Current Report on Form 8-K dated December 8, 1995).
21 Subsidiaries of the Registrant.
23(a) Consent of Price Waterhouse LLP
23(b) Consent of Arthur Andersen LLP
24 Powers of Attorney.
27 Financial Data Schedule incorporated by reference from the
Company's Current Report on Form 8-K dated December 8, 1995.
</TABLE>
* Represents a management contract or compensatory plan
or arrangement required to be filed as an exhibit pursuant
to Item 14(c) of Form 10-K.
(b) Reports on Form 8-K
(1) Current Report on Form 8-K dated September 1, 1995
relating to the Company's discussions with Dobson Park
Industries plc concerning the possible acquisition of
Dobson's outstanding shares.
(2) Current Report on Form 8-K dated October 11, 1995
relating to Harnischfeger and The First National Bank of
Boston, as Rights Agent, amending the Rights Agreement
dated as of February 8, 1989.
(3) Current Report on Form 8-K dated October 26, 1995
relating to Harnischfeger Industries news release
announcing that the Dobson board unanimously recommended
that its shareholders approve an offer by Harnischfeger
Industries to purchase all of Dobson's outstanding shares.
(4) Current Report on Form 8-K dated December 4, 1995
relating to the pro forma financial information relative to
the acquisition of Dobson required pursuant to Article 11
of Regulation S-X and the Company's five-year historical
computation of Ratio of Earnings to Fixed Charges.
(5) Current Report on Form 8-K dated December 4, 1995
relating to the 1995 financial statements of Dobson.
(6) Current Report on Form 8-K dated December 8, 1995
relating to the Company's filing of its fiscal 1995
financial statements and notes thereto, Management's
Discussion and Analysis, and related schedules and
exhibits.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of
Brookfield, Wisconsin, on the 29th day of January, 1996.
HARNISCHFEGER INDUSTRIES, INC.
(Registrant)
/s/FRANCIS M. CORBY, JR.
Francis M. Corby, Jr.
Executive Vice President for
Finance and Administration
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in
the capacities indicated on January 29, 1996.
<TABLE>
<CAPTION>
Signature Title
- ------------------------------------------ ------------------------------------
<S> <C>
/s/JEFFERY T. GRADE Chairman and Chief Executive
------------------------- Officer
Jeffery T. Grade
/s/FRANCIS M. CORBY, JR. Executive Vice President for
-------------------------- Finance and Administration
Francis M. Corby, Jr.
/s/JAMES C. BENJAMIN Vice President and Controller
--------------------------
James C. Benjamin
(1) Director
--------------------------
Donna M. Alvarado
(1) Director
--------------------------
Larry D. Brady
(1) Director
--------------------------
John D. Correnti
(1) Director
--------------------------
Harry L. Davis
(1) Director
--------------------------
Robert M. Gerrity
(1) Director
--------------------------
Robert B. Hoffman
(1) Director
--------------------------
Ralph C. Joynes
(1) Director
--------------------------
Herbert V. Kohler, Jr.
(1) Director
--------------------------
Jean-Pierre Labruyere
(1) Director
--------------------------
Robert F. Schnoes
(1) Director
--------------------------
Donald Taylor
</TABLE>
- -------------------------
(1) Jeffery T. Grade, by signing his name hereto, does
hereby sign and execute this report on behalf of each of
the above-named Directors of Harnischfeger Industries, Inc.
pursuant to powers of attorney executed by each of such
Directors and filed with the Securities and Exchange
Commission as an exhibit to this report.
January 29, 1996
By: /s/JEFFERY T. GRADE
Jeffery T. Grade,
Attorney-in-fact
Item 5
MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
THE ANNUAL MEETING
The annual meeting of the shareholders of Harnischfeger
Industries, Inc. will be held at Milwaukee's Wyndham Hotel,
139 E. Kilbourn Ave., on Tuesday, April 9, 1996 at 10:00
a.m.
ANNUAL REPORT ON FORM 10-K
Copies of the annual report on Form 10-K, filed with the
Securities and Exchange Commission, will be available to
shareholders after February 15, 1996 without charge on
request to:
Secretary
Harnischfeger Industries, Inc.
P.O. Box 554
Milwaukee, WI 53201-0554
Telephone: (414)797-6480
TRANSFER AGENT AND REGISTRAR
Bank of Boston
c/o Boston EquiServe
Mail Stop 45-02-09
P.O. Box 644
Boston, MA 02102-0644
Telephone:(617)575-3400
MARKET AND OWNERSHIP OF COMMON STOCK
The principal market for the Company's Common Stock is the
New York Stock Exchange, where its trading symbol is HPH.
As of October 31, 1995, the approximate number of holders
of record of the Company's Common Stock was 2,100. In
addition, there were an estimated 10,000 beneficial owners
of shares held of record by brokers and fiduciaries.
CORPORATE HEADQUARTERS
13400 Bishops Lane
Brookfield, WI 53005
MAILING ADDRESS
P.O. Box 554
Milwaukee, WI 53201-0554
SHAREHOLDER SERVICES
Annual Report Requests and General Information Corporate
Communication: (414)797-6626
FINANCIAL INFORMATION
To obtain fax copies of recent financial press releases and
quarterly statements on request, please call 1-800-758-5804
and use access code 396450 at the prompt.
Our press releases are available on the World Wide Web at
http.//www.prnewswire.com. Click on Company News On Call
to find Harnischfeger.
Exhibit 10(a)
HARNISCHFEGER INDUSTRIES, INC. 1988 INCENTIVE STOCK
PLAN
- ---------------------------------------------------
(as amended March 6, 1995)
-------------------------
HARNISCHFEGER INDUSTRIES, INC. 1988 INCENTIVE STOCK
PLAN
- ---------------------------------------------------
Table of Contents
-----------------
Article Page
- -------- ----
1 Introduction 1
1.1 Plan Name, Effective Date 1
1.2 Purpose 1
1.3 Plan Administrator 2
1.4 Company Shares Reserved for
the Plan 2
2 Administration of the Plan 3
2.1 Plan Administrator 3
2.2 Plan Administrator's Powers 4
2.3 Actions by Plan Administrator 5
3 Plan Participants 6
3.1 Eligibility 6
3.2 Participation 7
3.3 Grant Date 8
4 Terms and Conditions of Options and
Stock Appreciation Rights 8
4.1 Terms and Conditions of Options 8
4.2 Terms and Conditions of Stock
Appreciation Rights 11
4.3 Method of Exercising Options
and Stock Appreciation Rights 14
5 Terms and Conditions of Restricted
Company Shares 15
5.1 Terms and Conditions of
Restricted Company Shares 15
5.2 Vesting 15
5.3 Forfeitures 16
5.4 Issuance of Share Certificates 16
6 General Provisions 16
6.1 Stockholder Rights 16
6.2 Listing, Registration and Compliance
with Laws and Regulations 17
6.3 Non-Transferability of Options,
Stock Appreciation Rights, and
Restricted Company Shares 18
6.4 Adjustments for Changes in
Company Shares 18
6.5 Loan Agreement Restrictions 19
6.6 Indemnification 19
6.7 Withholding of Taxes 20
6.8 No Employment Rights Conferred 21
6.9 Notice of Early Disposition of
Company Shares 21
6.10 Cancellation of Options 21
Article Page
- ------- ----
6.11 Continued Availability of Company
Shares Under Unexercised Options
and Forfeited Restricted
Stock Grants 21
6.12 No Strict Construction 22
6.13 Choice of Law 22
6.14 Successors 23
6.15 Severability 23
7 Amendment and Termination 23
7.1 Amendment 23
7.2 Termination 24
HARNISCHFEGER INDUSTRIES, INC. 1988 INCENTIVE STOCK
PLAN
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ARTICLE 1
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Introduction
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1.1 Plan Name, Effective Date. Harnischfeger
Industries, Inc. 1988 Incentive Stock Plan (the
"Plan") is established effective February 8, 1988
by Harnischfeger Industries, Inc. (the "Company").
1.2 Purpose. The purpose of the Plan is to
provide key employees of the Company and its
subsidiaries with additional incentive to increase
their efforts on the Company's behalf and to remain
in or enter into the employ of the Company and its
subsidiaries by granting to such employees from
time to time, at the discretion of the plan
administrator:
(a) incentive stock options (within the
meaning of Section 422(b) of the Internal Revenue
Code of 1986, as amended (the "Code")) to purchase
shares of common stock of the Company ("Company
Shares"),
(b) nonqualified stock options (meaning
all options granted under the Plan which are not
designated by the plan administrator at the time of
grant as incentive stock options) to purchase
Company Shares,
(c) stock appreciation rights, but only
in connection with incentive stock options and
nonqualified stock options granted under the Plan,
and
(d) restricted Company Shares, according
to the terms of Article 5.
By virtue of the benefits available under the Plan,
employees who are responsible for the future growth
and continued success of the Company have an
opportunity to participate in the appreciation in
the value of Company Shares, which furnishes such
employees with an additional incentive to work for
and contribute to such appreciation through the
growth and success of the Company.
1.3 Plan Administrator. As provided in
Article 2, the Plan is administered by a committee
of two or more members of the Board of Directors of
the Company (the "plan administrator").
1.4 Company Shares Reserved for the Plan.
3,480,000 Company Shares (which may be authorized
and unissued shares or treasury shares and which
number is subject to adjustment as provided in
Section 6.4) shall be reserved for issuance under
the Plan, reduced by the sum of the following: (i)
all Company Shares which are purchased after 1987
upon the exercise of purchase options at any time
granted under the Harnischfeger Industries, Inc.
1978 Incentive Stock Plan (the "1978 Plan") or this
Plan, (ii) all Company Shares for which payment of
incremental value is made after 1987 by reason of
the exercise of stock appreciation rights at any
time granted under the 1978 Plan or this Plan to
the extent of a) the Company Shares received upon
such exercise of stock appreciation rights and b)
the number of Company Shares subject to incentive
stock options granted in tandem with any such stock
appreciation rights, (iii) the number of Company
Shares determined by dividing the value of the cash
or other consideration issued by the Company by
reason of a surrender after 1987 of any option by
the per share market value on the surrender date
(provided that if a new option is substituted for a
surrendered option, the new option will (regardless
of the exercise price prescribed therein) be deemed
to have a value of zero for purposes of this clause
(iii)) and (iv) the number of restricted Company
Shares granted and not forfeited.
ARTICLE 2
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Administration of the Plan
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2.1 Plan Administrator. The Plan is
administered by a committee consisting of two or
more directors of the Company appointed by the
Board of Directors of the Company, each of whom has
not, during the one year prior to or during service
as an administrator of the Plan, been granted or
awarded equity securities of the Company pursuant
to the Plan or any other plan of the Company other
than a plan meeting the requirements of paragraphs
(c)(2)(i)(A)-(D) of Rule 16b-3 promulgated pursuant
to the Securities Exchange Act of 1934 as amended.
Subject to the foregoing, the Board of Directors of
the Company shall have the power to determine the
number of plan administrative committee members and
to change such number from time to time. The Board
of Directors may from time to time appoint members
who qualify under the above criteria to the plan
administrative committee in substitution for, or
(where the number of members has been increased) in
addition to, members previously appointed and may
fill vacancies, however caused. Any plan
administrative committee member may be removed by
the Board of Directors at any time without cause.
No individual may be appointed as a committee
member who shall not be a director of the Company
at the time of such appointment. An individual
shall automatically cease to be a plan
administrative committee member at the time such
individual ceases to be a director of the Company.
2.2 Plan Administrator's Powers. Except as
otherwise specifically provided and in addition to
the powers, rights and duties specifically given to
the plan administrator elsewhere in the Plan, the
plan administrator shall have the following powers,
rights an duties:
(a) To determine (i) the key employees
of the Company and its subsidiaries to whom
restricted Company Shares, incentive stock options,
nonqualified stock options and stock appreciation
rights shall be granted (provided that no
restricted Company Shares, option or stock
appreciation rights may be granted to an individual
at a time when the individual owns, or would own
after the grant of such Company Shares or the
exercise of such option, stock possessing more than
10 percent of the total combined voting power of
all classes of stock of the Company), (ii) the time
or times at which such restricted Company Shares,
options and stock appreciation rights shall be
granted (provided that no restricted Company
Shares, options and no stock appreciation rights
may be granted after January 31, 1998), and (iii)
the number of Company Shares to be granted as
restricted Company Shares or to be covered under
each incentive stock option or nonqualified stock
option and any related stock appreciation right
granted under the Plan, provided that the aggregate
number of Company Shares that may be granted from
time to time to any participant under the Plan,
whether as restricted Company Shares or to be
covered under incentive stock options or
nonqualified stock options, may not exceed 350,000
shares. The share equivalent (determined by
dividing the applicable cash amount by the fair
market value of a Company Share on the date of the
applicable payment) of any cash received by a
participant upon the exercise of stock
appreciation rights granted under the Plan shall
reduce the foregoing 350,000 limitation on a share
for share basis.
(b) To establish all of the terms and
conditions governing the rights and obligations of
a key employee with respect to any such restricted
Company Shares, incentive stock option,
nonqualified stock option or stock appreciation
right granted to such employee, including but not
limited to (i) the option price of Company Shares
covered under each such option or stock
appreciation right (which option price shall not be
less than 100 percent of the fair market value of a
Company Share on the date the applicable option is
granted) and whether upon the exercise of an option
such price may be paid in cash or Company Shares,
or partially in each, (ii) the length of the period
during which an option or stock appreciation right
may be exercised, (iii) the time or times during
each such applicable period when each option or
stock appreciation right may be partially or fully
exercised, including the power to accelerate the
exercisability of any previously granted option or
stock appreciation right, (iv) whether a stock
appreciation right which has been exercised shall
be partially or fully paid by the issuance of
Company Shares, (v) any conditions precedent to be
satisfied before an option or a stock appreciation
right may be exercised, (vi) any restrictions on
resale of any Company Shares received as restricted
Company Shares or on exercise of an option or stock
appreciation right and whether the Company shall
have any repurchase rights with respect to such
Company Shares, (vii) the form of the instruments
evidencing any option or stock appreciation right
granted under the Plan or effecting an exercise by
a holder thereof of any option or stock
appreciation right, and the form of the instruments
evidencing the granting of restricted Company
Shares, and (viii) the vesting schedule applicable
to each grant of restricted Company Shares and
whether the vesting schedule for a restricted
Company Share shall be accelerated at any time.
(c) To construe and interpret the Plan
and the terms of restricted Company Shares, options
and stock appreciation rights granted under the
Plan, to adopt, amend and rescind such rules and
regulations as may be necessary for the efficient
administration of the Plan and as are consistent
with its terms, and to remedy ambiguities,
inconsistencies or omissions.
Each action taken and decision made by the plan
administrator within the scope of the authority
delegated to it by this Plan or by the Board of
Directors shall be binding and conclusive on all
persons interested in the Plan.
2.3 Actions by Plan Administrator. The plan
administrator shall hold its meetings at such times
and places as it may determine and may make such
rules and regulations for the conduct of its
business as it considers advisable. A majority of
the members of the plan administrative committee
shall constitute a quorum and any action taken by a
majority of the members present at a meeting at
which a quorum of members is present shall be
considered an act of the plan administrator. The
plan administrator also may take fully effective
actions by a written instrument signed by a
majority of the members of the plan administrative
committee. The plan administrative committee may
select one of its members as its chairman and may
appoint a secretary of the committee (who need not
be a member of the committee).
ARTICLE 3
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Plan Participants
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3.1 Eligibility. Each key employee of the
Company and its subsidiaries shall be eligible to
be designated by the plan administrator as the
recipient of restricted Company Shares, an
incentive stock option or nonqualified stock option
and stock appreciation rights under the Plan. In
making determinations as to the employees to be
granted restricted Company Shares, options and
stock appreciation rights, the plan administrator
may take into account the nature of the services
rendered or expected to be rendered by the
respective employees, their present and potential
contributions to the Company's success, the
anticipated number of years of service remaining
and such other factors as the plan administrator in
its discretion considers relevant. The term "key
employee" shall include officers as well as other
employees of the Company and its subsidiaries
(including employees who also are directors of the
Company or one of its subsidiaries) who have
managerial, supervisory, professional, engineering
or similar responsibilities. Neither any member of
the plan administrative committee nor any member of
the Board of Directors who is not an employee of
the Company or its subsidiaries shall be eligible
to be granted an option, any stock appreciation
rights or restricted Company Shares under the Plan.
3.2 Participation. The plan administrator
may from time to time grant to key employees
restricted Company Shares, incentive stock options
to purchase Company Shares, nonqualified stock
options to purchase Company Shares and, in addition
at its sole discretion, stock appreciation rights
in connection with such incentive stock options or
nonqualified stock options. The plan administrator
may grant more than one restricted Company Share,
option or stock appreciation right to the same key
employee. Each stock appreciation right granted
under the Plan must be granted in connection with
all or a portion of an incentive stock option or
nonqualified stock option granted under the Plan.
However, a stock appreciation right may be granted
concurrently with the granting of an option or at
any time thereafter during the term of the option;
provided that at the time of such grant the
individual to whom the stock appreciation right is
granted is a key employee of the Company or of one
of its subsidiaries. No restricted Company Share,
option or stock appreciation right may be granted
to any key employee who on the effective date of
the grant is not in the employ of the Company or
one of its subsidiaries. (Key employees who have
received grants of restricted Company Shares or
options under the Plan are sometimes referred to
herein as "participants"). The Company will from
time to time grant to such key employees as may be
selected by the plan administrator the restricted
Company Shares, options and stock appreciation
rights designated to be granted by the plan
administrator, subject to the terms and conditions
established by the plan administrator and the terms
and conditions herein provided.
3.3 Grant Date. The effective date of the
grant of a restricted Company Share, option or
stock appreciation right (the "grant date") shall
be the date specified by he plan administrator in
its determination or designation relating to the
granting of such restricted Company Shares, option
or stock appreciation right: provided that the plan
administrator may not designate a grant date with
respect to any restricted Company Shares, option or
stock appreciation right which is earlier than the
date on which the granting of such share, option or
stock appreciation right is approved by the plan
administrator.
ARTICLE 4
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Terms and Conditions of Options and Stock
Appreciation Rights
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4.1 Terms and Conditions of Options. As
provided in Section 2.2, options granted under the
Plan shall be in such quantity, at such price,
subject to such terms and conditions and evidenced
in such form as shall be determined from time to
time by the plan administrator; provided that all
options shall in any event be subject to the
following terms and conditions:
(a) Option Price. The option price per
Company Share, which may be different in each case,
shall be fixed by the plan administrator at or
before the time the plan administrator approves the
granting of the option. However, no option shall
have an option price per Company Share of less than
100 percent of the fair market value of a Company
Share on the grant date of the option. For this
purpose "fair market value" of a Company Share as
of any date shall be determined in such manner as
shall be prescribed in good faith by the plan
administrator; provided that in the absence of
specific instructions by the plan administrator to
the contrary, the fair market value of a Company
Share as of any date shall be equal to the last per
share sales price reported for a Company Share for
such date in The Wall Street Journal or, if no
sales of Company Shares are reported for such date
in The Wall Street Journal, for the next succeeding
date for which sales of Company Shares are so
reported in The Wall Street Journal.
(b) Term and Exercisability of Options.
The term of each option granted under the Plan
shall be for a period not exceeding ten years from
the grant date, as established by the plan
administrator at or before the time the plan
administrator grants the option. No option shall
be exercisable (i) during the first six full
calendar months commencing on or after the grant
date, (ii) following the exercise of a stock
appreciation right related to such option (but only
to the extent the stock appreciation right or
portion thereof that has been exercised covered the
same Company Shares that were covered by the
option), or (iii) on or following the tenth
anniversary of the grant date (or any earlier date
which is the day following the last day of the term
of the option). Unless the plan administrator
determines otherwise in the original terms of an
option, and subject to subsection (d) next below
and other applicable provisions of the Plan, each
option shall become exercisable in accordance with
the following table based upon the number of full
calendar months elapsed from the grant date of the
option:
<TABLE>
<CAPTION>
If the Number of Full The Percentage of Company
Calendar Months Elapsed Shares Covered by the Option
From the Grant Date Equals Which are Exercisable Shall Be
- ------------------------- -----------------------------
<S> <C> <C>
Less than 6 months 0
At least 6 months but
less than 18 months 25%
At least 18 months but
less than 30 months 50%
At least 30 months but
less than 42 months 75%
42 months or more 100%
</TABLE>
Further, unless the plan administrator
determines otherwise, in the case of a
participant who will reach his "normal
retirement date" (as defined in Harnischfeger
Corporation Salaried Employees Retirement
Plan) less than 42 months from the grant date
of an option, the number of Company Shares
which shall become exercisable at the
beginning of each twelve calendar month
period subsequent to the initial six calendar
month period commencing on or following the
grant date shall be the total number of
Company Shares specified in the option
multiplied by a fraction, the numerator of
which is 100% and the denominator of which is
the whole number (but not less than one) of
complete twelve month periods between the
date following such initial six calendar
month period and the participant's normal
retirement date.
(c) Special Incentive Stock Option
Terms. The terms of each incentive stock option
granted under the Plan shall include those terms
which are required by Section 422 of the Code and
such other terms not inconsistent therewith as the
plan administrator may determine. Each option
which is designated by the plan administrator as an
incentive stock option shall be considered to have
contained from the outset such terms and provisions
as shall be necessary to entitle such intended
incentive stock option to the tax treatment
afforded by the Code to incentive stock options
under Section 422 of the Code. If any agreement
covering such an intended incentive stock option
granted under the Plan does not explicitly include
any terms required to entitle such intended
incentive stock option to the tax treatment
afforded by the Code to incentive stock options,
then all of such required terms and provisions
shall be considered implicit in such agreement and
such intended incentive stock option shall be
considered to have been granted subject to such
required terms and conditions.
(d) Early Terminations of Options. If a
participant ceases to be employed by the Company
and all of its subsidiaries prior to the end of the
six full months commencing on the grant date of an
option, the option shall terminate effective as of
the date of the participant's termination of
employment and no portion of the terminated option
shall be exercisable after that date. If a
participant's termination of employment occurs
following the six full months commencing on or
after the grant date of an option the following
shall apply with respect to such option:
(i) Except as provided in (iii) and
(iv) below, the participant shall, during the three
months commencing on his date of termination of
employment, have the right at his discretion to
partially or fully exercise the unexercised portion
of the option which was exercisable at the time of
his termination of employment.
(ii) If a participant shall die
prior to his termination of employment or following
his termination of employment but within the three
month period described in subparagraph (i) next
above, the unexercised portion of the option which
was exercisable at the time of the participant's
death may be partially or fully exercised within
the twelve month period commencing on the date of
the participant's death by the participant's estate
or by any person who has acquired the right to
exercise such option by bequest or inheritance or
by reason of the laws of descent and distribution.
(iii) If a participant's employment
is terminated by the Company or any of its
subsidiaries for cause, any unexercised portion of
an option granted to the participant shall
terminate effective as of the participant's date of
termination of employment and no portion thereof
shall be exercisable thereafter. For this purpose,
termination "for cause" means termination as a
result of the failure of the participant to carry
out the duties assigned to him as a result of his
incompetence, willful neglect or willful serious
misconduct, as determined by the Company.
(iv) Notwithstanding the foregoing,
the unexercised portion of any option shall, to the
extent permitted by applicable law, terminate
immediately upon the employment of a participant by
a competitor of the Company or of one of its
subsidiaries.
4.2 Terms and Conditions of Stock
Appreciation Rights. As provided in Section 2.2,
stock appreciation rights granted under the Plan
shall be subject to such terms and conditions and
shall be evidenced by agreements in such form as
shall be determined from time to time by the plan
administrator. In general (i) stock appreciation
rights shall be exercisable at such time or times
and to the extent that the incentive stock option
or nonqualified stock option, or portion thereof,
to which the stock appreciation right is related is
exercisable, and (ii) upon the termination,
exercise or expiration of an option or portion
thereof to which a stock appreciation right is
related, such stock appreciation right shall
terminate and shall not thereafter be exercisable.
However, notwithstanding that the option or portion
thereof related to a stock appreciation right may
be exercisable, each stock appreciation right may
be exercised only during a window period (as
described below), a stock appreciation right may
not be exercised until after the end of the six
full calendar months commencing on or after the
date such stock appreciation right is granted
(except that this limitation shall not apply in the
case of the death or disability of a participant if
the option or portion thereof to which the stock
appreciation right is related is exercisable) and a
stock appreciation right related to an incentive
stock option shall not be exercisable on any date
on which the fair market value of a Company Share
is less than the option price provided for in the
related incentive stock option. A stock
appreciation right granted to a participant shall
entitle the participant upon his exercise of such
right to surrender the related option or portion
thereof and receive an amount (herein called the
"incremental value") equal to the excess of the
fair market value on the date of such exercise of
the Company Shares subject to such surrendered
option or portion thereof over the option price of
such Company Shares as provided in such option.
The incremental value shall be paid by the Company
all in cash, all in Company Shares or in any
combination of cash and Company Shares, as the plan
administrator shall determine in its sole
discretion, which determination shall be made after
considering any preference expressed by the
participant exercising the stock appreciation
right. Any participant who wishes to express such
a preference shall notify the plan administrator in
writing of his preference and, if such participant
expresses a preference to receive cash in whole or
in part, such writing shall be delivered to the
Company, in care of the plan administrator, during
the period (hereinafter the "window period")
beginning on the third business day following the
date of release for publication of an annual or
quarterly summary statement of the sales and
earnings of the Company and its consolidated
subsidiaries and ending on the twelfth business day
following such date. In the event a participant
does not duly notify the plan administrator of any
preference, and in the absence of any express
determination by the plan administrator to the
contrary, each payment of incremental value which
shall become due by reason of any exercise of a
stock appreciation right shall be made in cash. In
the event any Company Shares shall be delivered to
satisfy all or any part of any incremental value
obligation arising by reason of any exercise of a
stock appreciation right, the dollar amount of such
obligation satisfied by such delivery of Company
Shares shall be considered to be equal to the fair
market value of a Company Share as of the date of
exercise multiplied by the number of Company Shares
delivered. No fractional Company Shares shall be
issued to make any payment of incremental value,
and the cash and Company Shares payable in each
case shall be adjusted in such manner as shall be
prescribed by the plan administrator to avoid the
issuance of any fractional Company Shares. Upon
exercise of a stock appreciation right and
surrender of the related option or portion thereof,
such option, to the extent surrendered, shall be
considered to have been exercised and shall not
thereafter be exercisable, and to the extent
Company Shares covered under the option have not
been used to pay the incremental value, such
Company Shares shall no longer be reserved under
the Plan.
4.3 Method of Exercising Options and Stock
Appreciation Rights. An option shall be exercised
by a written notice to the plan administrator and
payment of the option price to the Company, in care
of the plan administrator. Payment of the option
price may be made, at the discretion of the
optionee, (i) in cash (including check, bank draft,
or money order), (ii) by delivery of Company Shares
(valued at the fair market value thereof on the
date of exercise) or (iii) by delivery of a
combination of cash and common stock provided,
however, that the plan administration may, in any
instance, in order to prevent any possible
violation of law, require the option price to be
paid in cash and further provided that the right to
deliver Company Shares in payment of the option
price may be limited or denied in any option
agreement. A stock appreciation right shall be
exercised by written notice to the plan
administrator at such time as is permitted in
accordance with the provisions of Section 4.2 and
by surrender of the option or portion thereof to
which the stock appreciation right relates. At the
time or exercise of an option or stock appreciation
right a participant may request that Company Shares
to be issued with respect to the exercise of the
option or which may be issued with respect to the
exercise of the stock appreciation right be issued
in the name of the participant and another person
jointly with right of survivorship.
ARTICLE 5
---------
Terms and Conditions of Restricted Company Shares
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5.1 Terms and Conditions of Restricted
Company Shares. As provided in Section 2.2,
Company Shares granted under the Plan shall be
subject to such terms, conditions and restrictions,
and shall be evidenced by such agreements as shall
be determined from time to time by the plan
administrator. All grants of Company Shares shall
in any event be subject to the following terms,
conditions and restrictions:
(a) The purchase price, if any, will be
determined by the plan administrator.
(b) Restricted Company Shares may be
subject to restrictions on the sale or other
disposition thereof, rights of the Company to
reacquire such restricted Company Shares at the
purchase price, if any, originally paid therefor
upon termination of the employee's employment
within specified periods, representation by the
employee that he or she intends to acquire
restricted Company Shares for investment and not
for resale, and such other restrictions, conditions
and terms as the plan administrator deems
appropriate.
(c) The participant shall be entitled
to all dividends paid with respect to restricted
Company Shares during the period of restriction and
shall not be required to return any such dividends
to the Company in the event of the forfeiture of
the restricted Company Shares.
(d) The participant shall be entitled
to vote the restricted Company Shares during
the period of restriction.
(e) The plan administrator shall
determine whether restricted Company Shares are to
be delivered to the participant with an appropriate
legend imprinted on the certificate or if the
shares are to be deposited in escrow pending
removal of the restrictions.
5.2 Vesting. Each participant shall be
vested in the Company Shares granted under this
Article 5 according to such schedule and such
performance factors affecting vesting as the plan
administrator determines at the time of grant. As
provided in Section 2.2, the plan administrator
shall have the power to accelerate the vesting
schedule. Whenever the term "vested" or "fully
vested" are used in this Plan with reference to
restricted Company Shares, the meaning of those
terms shall be determined by reference to the
vesting schedule.
5.3 Forfeitures. If a participant terminates
employment before his Company Shares are vested or
before fulfillment of the applicable performance
factors, the participant shall forfeit such Company
Shares under terms established by the plan
administrator and they shall again be available for
issuance under Section 1.4.
5.4 Issuance of Share Certificates. Share
certificates for the number of restricted Company
Shares granted will be issued in the name of each
participant at the time of grant and shall be
delivered pursuant to subsection 5.1(e). A
participant may request that Company Shares be
issued in the name of the participant and another
person jointly with right of survivorship.
ARTICLE 6
---------
General Provisions
------------------
6.1 Stockholder Rights. A participant shall
not have any dividend, voting or other stockholder
rights by reason of a grant of an option or a
grant of a stock appreciation right prior to the
issuance of any Company Shares pursuant to the
proper exercise of all or any portion of such
option or stock appreciation right. A participant
shall have dividend, voting and other stockholder
rights with respect to restricted Company Shares
except as provided in Section 6.3 or otherwise
provided at the time of grant.
6.2 Listing, Registration and Compliance with
Laws and Regulations. Each restricted Company
Share, option and stock appreciation right granted
to a participant shall be subject to the condition
that the Company shall not be obligated to issue
any Company Shares to the participant regardless of
whether such participant attempts to exercise or
has exercised the option or stock appreciation
right, in whole or in part, if at any time the
Board of Directors shall determine, in its
discretion, that the listing, registration or
qualification of Company Shares subject to such
grant, option or stock appreciation right upon any
securities exchange or under any state or federal
law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a
condition or, or in connection with, the granting
of such restricted Company Share, option or stock
appreciation right or the issue or purchase of
Company Shares thereunder unless such listing,
registration, qualification, consent or approval
shall have been effected or obtained free of any
conditions not acceptable to the Board of
Directors. The Company shall not by reason of the
granting of any restricted Company Share, option or
stock appreciation right under this Plan have any
obligation to register the Company Shares subject
to such option under the Securities Act of 1933, as
amended, or to maintain in effect any registration
of such Company Shares which may be made at any
time under such Act. In this connection, the form
of restricted Company Share, stock option and stock
appreciation right agreements to be used under the
Plan may provide, among other things, that a
participant shall represent that all Company Shares
are being purchased for investment and not with a
view to resale in connection with a distribution of
such Company Shares.
6.3 Non-transferability of Options, Stock
Appreciation Rights and Restricted Company Shares.
During a participant's lifetime any option or stock
appreciation right granted under the Plan shall be
exercisable only by the participant and shall not
be transferred (except by will or the laws of
descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security
Act, or the rules thereunder), pledged or
hypothecated in any way and shall not be subject to
execution, attachment or similar process. Upon any
attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of an option or stock
appreciation right, contrary to the provisions
hereof, or upon the levy of any attachment or
similar process upon the rights and privileges
conferred hereby, such option or stock appreciation
right shall immediately become null and void.
Company Shares granted under the provisions of
Article 5 shall not be transferred until such
Shares have become fully vested and nonforfeitable,
and any attempt to sell, assign, pledge,
hypothecate or otherwise encumber such Shares shall
result in their forfeiture according to the terms
of Section 5.3.
6.4 Adjustments for Changes in Company
Shares. In order to prevent dilution or
enlargement of restricted Company Shares, options
or stock appreciation rights, in the event of a
reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger,
consolidation or other change in Company Shares,
the Board of Directors shall make appropriate
changes in the aggregate number and type of Company
Shares reserved for grant as restricted Company
Shares, options and stock appreciation rights under
this Plan, in the number and type of Company Shares
subject to grant as restricted Company Shares and
subject to unexercised options and stock
appreciation rights, in the option price per
Company Share specified in unexercised options and
in stock appreciation rights relating to
unexercised options.
6.5 Loan Agreement Restrictions. Each option
and stock appreciation right shall be subject to
the condition that the Company shall not be obliged
to (i) issue any Company Shares to a participant,
regardless of whether such participant attempts to
exercise or has exercised an option or stock
appreciation right, in whole or in part, or (ii)
make any payment to a participant upon the
surrender of a stock appreciation right, if at any
time the Board of Directors shall determine, in its
discretion, that the issuance of such Company
Shares or the payment of cash would be in violation
of any covenant contained in any of the Company's
loan agreements or other contracts, as now or from
time to time hereafter in effect.
6.6 Indemnification. No member of the plan
administrative committee shall be liable, in the
absence of bad faith, for any act or omission with
respect to his service on the committee relating to
the Plan. Service on the plan administrative
committee shall constitute service as a director of
the Company so that members of the plan
administrative committee shall be entitled to
indemnification and reimbursement as directors of
the Company to the full extent provided for at any
time by law, the Company's Certificate of
Incorporation, the Company's By-Laws and in any
insurance policy or other agreement intended for
the benefit of the Company's directors.
6.7 Withholding of Taxes. The Company shall
be entitled, if the plan administrator considers it
necessary or desirable, to withhold (in cash or
Company Shares), or secure payment from the
participant in lieu of withholding, the amount of
any withholding or other payment required of the
Company under the tax withholding provisions of the
Code, any state's income tax act or any other
applicable law with respect to any amount payable
and Company Shares issuable under such
participant's exercised options or stock
appreciation rights or as restricted Company
Shares, provided, however, that with respect to any
Section 16 Officer (as defined below) any decision
by the Company to withhold Company Shares and any
withholding of Company Shares by the Company from a
Section 16 Officer shall only be made during a
window period and provided further that no Company
Shares shall be withheld under the provisions of
this Section 6.7 that are issuable under options,
stock appreciation rights or restricted stock
granted to the Section 16 Officer less than six
months before the date either the decision to
withhold or the withholding is to take place. A
Section 16 Officer is a participant who is or at
any time during the prior six months has been
designated by the Company as a Section 16 Officer
for purposes of Section 16 of the Securities
Exchange Act of 1934. Subject to the discretion of
the Company, no distribution will be made to the
participant until all tax withholding obligations
have been satisfied and, if Company Shares are
withheld pursuant to this Section 6.7, until the
window period during which the Company Shares are
withheld.
6.8 No Employment Rights Conferred. Nothing
in the Plan or in any option, stock appreciation
right or restricted Company Share granted under the
Plan shall confer any right on an employee to
continue in the employ of the Company or any
subsidiary or shall interfere in any way with the
right of the Company or any subsidiary at any time
to terminate his employment with or without cause
or to adjust his compensation.
6.9 Notice of Early Disposition of Company
Shares. As a condition of participation in the
Plan each participant agrees that he will give
prompt notice to the plan administrator of any
disposition of Company Shares acquired upon the
exercise of an incentive stock option if such
disposition occurs within either two years after
the grant date of an incentive stock option or one
year after the receipt of such Company Shares by
the participant following his exercise of the
incentive stock option.
6.10 Cancellation of Options. By express
written agreement a participant and the plan
administrator may agree that any previously granted
option is thereby canceled as of the date of the
agreement and, at its discretion, the plan
administrator may subsequently grant to such a
participant who has voluntarily surrendered and
canceled a prior option one or more new or
substitute similar or different options under the
plan.
6.11 Continued Availability of Company Shares
Under Unexercised Options and Forfeited Restricted
Stock Grants. If an option granted under the Plan
terminates or expires without being wholly
exercised, if Company Shares as to which an option
has been exercised shall for any reason not be
issued, or if restricted Company Shares are
forfeited, restricted Company Shares or a new
option (and at the discretion of the plan
administrator a related stock appreciation right)
may be granted under the Plan covering the number
of Company Shares to which such termination,
expiration, forfeiture, failure to issue or
reacquisition relates; provided, however, that to
the extent Company Shares are issued in connection
with the exercise of a stock appreciation right or
a stock appreciation right granted in connection
with an incentive stock option is exercised, the
related option shall, solely for purposes of
determining the total number of Company Shares
available for grant under the Plan, be deemed to
have been exercised, and the Company Shares issued
upon the exercise of such stock appreciation right
or which otherwise would have been issued upon the
exercise of an incentive stock option related to
such stock appreciation right shall not thereafter
be available for any further grants under the Plan.
6.12 No Strict Construction. No rule of
strict construction shall be applied against the
Company, the plan administrator or any other person
in the interpretation of any of the terms of the
plan, any option agreement or stock appreciation
right agreement or restricted Company Share
agreement, any option or stock appreciation right
or restricted Company Share granted under the plan
or any rule or procedure established by the plan
administrator.
6.13 Choice of Law. Each option, stock
appreciation right, and restricted Company Share
granted under the Plan shall be considered to be a
contract under the laws of the State of Wisconsin
and, for all purposes, the Plan and each option,
stock appreciation right, and restricted Company
Share granted under the Plan shall be construed in
accordance with and governed by the laws of the
State of Wisconsin.
6.14 Successors. This Plan is binding on and
will inure to the benefit of any successor to the
Company, whether by way of merger, consolidation,
purchase or otherwise.
6.15 Severability. If any provision of the
Plan or an option or stock appreciation right or
restricted Company Share agreement shall be held
illegal or invalid for any reason, such illegality
or invalidity shall not affect the remaining
provisions of the Plan or such agreement, and the
Plan and such agreement shall each be construed and
enforced as if the invalid provisions had never
been set forth therein.
ARTICLE 7
---------
Amendment and Termination
-------------------------
7.1 Amendment. The Board of Directors may
amend the Plan from time to time, in its sole
discretion, but no amendment shall:
(a) without a participant's consent
impair his rights to any option or stock
appreciation right or restricted Company Share
theretofore granted; or
(b) without the authorization and
approval of the Company's stockholders (i) increase
the maximum number of Company Shares which may be
issued in the aggregate under the Plan, except as
provided in Section 6.4, (ii) extend the
termination date of the Plan or of any option or
stock appreciation right granted under the Plan, or
(iii) enlarge the class of employees eligible to
receive options or stock appreciation rights or
restricted Company Shares under the Plan.
7.2 Termination. The Board of Directors may
terminate the Plan at any time with respect to
Company Shares which have not theretofore been
granted or for which options have not theretofore
been granted. Unless earlier terminated, the Pan
will terminate at the close of business on January
31, 1998. Following the termination of the Plan,
all options or stock appreciation rights which
prior to the Plan termination have not expired,
terminated or been exercised or surrendered may be
exercised in accordance with their terms and the
terms hereof, all restricted Company Shares which
have been granted may vest or be forfeited in
accordance with the terms of their grant and the
terms hereof, and the plan administrator shall
continue to have its full powers under the Plan,
except with respect to the granting of restricted
Company Shares, options or stock appreciation
rights under the Plan.
Exhibit 10(d)
HARNISCHFEGER INDUSTRIES, INC.
DIRECTORS STOCK COMPENSATION PLAN
(as amended and restated October 9, 1995)
1. Purpose. The Harnischfeger Industries, Inc.
Directors Stock Compensation Plan (the "Directors Plan")
has been established effective as of March 2, 1992 by
Harnischfeger Industries, Inc., a Delaware corporation (the
"Company"), to provide benefits to certain members of the
Board of Directors of the Company (the "Board"). The
Directors Plan is intended to assist and enable the Company
to attract and retain directors of the highest capabilities
and to facilitate the director's ability to acquire an
ownership interest in the common stock of the Company.
2. Administration. The Chairman of the Board of
Directors shall have the full power and authority to
construe, interpret and administer the Plan and shall
promulgate such rules and procedures as he considers
necessary and appropriate for the implementation and
administration of the Plan.
3. Eligibility. Effective on and after March 2, 1992,
each member of the Board who serves on the Board as a
director at any time after March 2, 1992, and who is not an
employee of the Company (herein "Director") is eligible to
participate in the Plan.
4. Participation. As of March 2, 1992, each Director
shall have the right to have up to 100% of such Director's
annual retainer and meeting fees (including fees for
committee meetings) (collectively, the "Compensation")
payable during the period beginning March 2, 1992 and
ending October 31, 1992 (the "Initial Period") and the 12
month period beginning each November 1st starting with
November 1, 1992 ("Plan Year") converted into shares of the
Company's common stock ("Stock") and delivered into the
Harnischfeger Industries Deferred Compensation Trust
("Rabbi Trust") for the benefit of such Director subject to
the following terms:
(a) Written notice shall be given by a Director
to the Company prior to March 3, 1992 for the Initial
Period and annually prior to May 1 of each subsequent
Plan Year stating that such Director elects to convert
into Stock up to 100% of such Director's Compensation
payable during the Initial Period or the next Plan Year
respectively. Directors who become Directors on or after
May 1 of any Plan Year may by written notice to the
Company elect to covert their Compensation into Stock
under the Directors Plan effective six months after the
date such notice is delivered to the Company.
(b) As soon as practicable after each date
determined by the Company for payment of compensation to
Directors, the number of shares of Stock (rounded to the
nearest whole share) derived by dividing the closing
price of the Stock on the New York Stock Exchange
Composite Tape on such payment date into the amount of
Compensation each Director has elected to convert into
Stock shall be delivered into the Rabbi Trust for the
benefit of such Director.
(c) The annual retainer fee for Directors shall be
$22,600.00, the fee for each Board meeting attended shall
be $1,250.00 and the fee for each meeting of a committee
or subcommittee of the Board attended shall be $1,000.000
for regular members and $1,250.00 for committee and
subcommittee chairs, provided that, subject to Section 15
hereof, the amount of such fees may be changed at the
discretion of the Company from time to time.
5. Source of Stock. The Stock allocated to each
Director's account pursuant hereto may at the Company's
option be acquired through open market purchase, or may be
either treasury shares or newly issued shares; provided
that any treasury or newly issued shares are duly
registered pursuant to applicable federal and state
securities laws and stock exchange regulations. The
Company may, in lieu of delivering shares to the trustee of
the Rabbi Trust (the "Trustee"), direct the Trustee to use
for the purposes of this Directors Plan shares of Stock
previously delivered by the Company to the Rabbi Trust if
such shares have not been allocated to the account of any
Directors Plan participant. Although the Company intends
to exert its best efforts so that the shares allocated or
distributed to Directors hereunder will be registered
under, or exempt from the registration requirements of, the
Securities Act of 1933 (the "Securities Act") and any
applicable state securities laws, if the allocation or
distribution would otherwise result in the violation by the
Company of any provision of the Securities Act or of any
state securities law, the Company may require that such
allocation or distribution be deferred until the Company
has taken appropriate action to avoid any such violation.
6. Participants' Accounts. An account shall be
maintained in the name of each Director participating in
the Plan which will reflect the shares of Stock into which
his Compensation has been converted, and shall be credited
to reflect all dividends, stock splits and other
distributions with respect to such shares. All cash
distributions with respect to Stock shall be invested by
the Trustee in shares of Stock through open market or other
appropriate purchases as soon as practicable after receipt
of same. Each such Stock account shall be charged with any
distribution made to a Director when made.
7. Distribution of Stock. The Stock in a Director's
account shall be distributed to him (or to his beneficiary
in the event of his death) promptly (but not sooner than
sixty (60) days) following the termination of his status as
a Director of the Company; provided, however, that a
Director may upon written notice to the Company given one
year prior to his termination, request that the Company
approve an annual distribution of such Stock over a period
of time not to exceed ten (10) years (e.g. if a ten year
election, one tenth of the balance at the time of the first
distribution, one ninth of the balance at the time of the
second distribution, etc.) and provided further that a
Director may upon written notice to the Company given at
least one year prior to termination of his status as a
Director elect to delay until the next calendar year
following termination of his status as a Director either
the distribution of or, if the Director has elected annual
distributions over a period of time, the initial
distribution from his account. During the first fifty (50)
days following a Director's termination, the Director (or
the Director's beneficiary in the event of the Director's
death) shall have the right to elect to have the Director's
account distributed in cash, stock or a combination of cash
and stock. Upon receipt of a request that a part or all of
the distribution be made in cash, the Company shall direct
the Trustee to credit such Participant's account with an
amount (the "Cash Portion") equal to the product of the
number of shares of Stock then credited to Participant's
account necessary to comply with the request (the
"Diversified Shares") and the closing price of the Stock
on the New York Stock Exchange Composite Tape as of the
date the request is received by the Company. Thereafter,
the Trustee shall keep such Participant's account as if the
Cash Portion were invested in cash, cash equivalents,
mutual funds or marketable securities as directed by the
Commitee from time to time and as if the Diversified Shares
had been sold.
8. Disposition After Distribution. Notwithstanding any
other provision herein, upon any distribution to a Director
pursuant to Section 7 which occurs within six months after
an allocation pursuant to Section 4 or 6, the Director
agrees, as a condition to participation, to refrain from
disposing of any such distributed stock until six months
have elapsed from the Section 4 or 6 allocation.
9. Change in Control. Notwithstanding the foregoing,
in the event of a "Change in Control" of the Company (as
defined in the Rabbi Trust), the Company shall purchase for
cash all shares of Stock then in all Directors' accounts
which have been held in such accounts for at least six
months at a per-share price equal to the the Change in
Control Price, and the Trustee is directed to sell such
shares upon such terms. Thereafter, with regard to any
shares which have not been held in such accounts for at
least six months, the Company shall purchase such shares
for cash as soon as they have been held in such accounts
for at least six months. Immediately after the Company
purchases any shares pursuant to this Section 9, the
Committee shall cause the Trustee to effect a distribution
of all cash proceeds to the Directors in accordance with
their accounts. As used herein, "Change in Control Price"
means the higher of (i) the highest reported sales price,
regular way, of a share of Stock in any transaction
reported on the New York Stock Exchange Composite Tape or
other national securities exchange on which such shares are
listed or on NASDAQ, as applicable, during the 60-day
period prior to and including the date of a Change in
Control and (ii) if the Change in Control is the result of
a tender or exchange offer or a Business Combination (as
defined in the Rabbi Trust), the highest price per share of
Stock paid in such tender or exchange offer or Business
Combination. To the extent that the consideration paid in
any such transaction described above consists all or in
part of securities or other non-cash consideration, the
value of such securities or other non-cash consideration
shall be determined by the Incumbent Board (as defined in
the Rabbi Trust).
10. Designation of Beneficiaries. Each Director from
time to time may name any person or persons (who may be
named concurrently, contingently or successively) to whom
his benefits under the Plan are to be paid if he dies
before he receives the proceeds of his Directors Plan
account. Each such beneficiary designation will revoke all
prior designations by the Director, shall not require the
consent of any previously named beneficiary, shall be in a
form prescribed by the Company, and will be effective only
when filed with the Company during the Director's lifetime.
If a Director fails to designate a beneficiary before his
death, as provided above, or if the beneficiary designated
by a Director dies before the date of the Director's death
or before complete payment of the Director's Stock
Compensation Plan account, the Company, in its discretion,
may pay such benefits to either (i) one or more of the
Director's relatives by blood, adoption or marriage and in
such proportions as the Company determines, or (ii) the
legal representative or representatives of the estate of
the last to die of the Director and his designated
beneficiary.
11. General. No Director or other person shall have
any right, title or interest in any amount awarded under
this Plan prior to the payment thereof to such person. No
rights or interests of Directors under this Plan shall be
assignable either voluntarily or involuntarily. Neither
the Company nor any officer of the Company shall be
personally liable for any act done or omitted to be done in
good faith in the administration of the Plan.
12. Facility of Payment. When a person entitled to
benefits under the Plan is under legal disability, or, in
the Company's opinion, is in any way incapacitated so as to
be unable to manage his affairs, the Company may direct the
payment of benefits to such person's legal representative,
or to a relative or friend of such person for such person's
benefit, or the Company may direct the application of such
benefits for the benefit of such person. Any payments made
in accordance with the preceding sentence shall be a full
and complete discharge of any liability for such payment
under the Plan.
13. Withholding for Taxes. Notwithstanding any other
provision of the Plan, the Company may on behalf of the
Directors withhold or direct the Trustee to withhold from
any payment to be made under the Directors Plan, whether in
the form of cash or stock, such amount or amounts as may be
required for purposes of complying with applicable federal,
state or foreign tax withholding provisions, provided,
however, that any decision by the Company to withhold stock
and any withholding of stock by the Trustee from the
account of a Director shall only be made during the window
period (as defined below) and provided further that no
stock that has been held in the account of a Director for
less than six months shall be withheld under the provisions
of this Section 13. A window period shall be the period
beginning on the third business day following the date of
release for publication of an annual or quarterly summary
statement of the sales and earnings of the Company and its
consolidated subsidiaries and ending on the twelfth
business day following such date. Subject to the
discretion of the Company, no distribution will be made to
the Director until all tax withholding obligations have
been satisfied and, if stock is withheld pursuant to this
Section 13, until the window period during which the Stock
is withheld.
14. Benefit Statements. The Company shall provide
statements of account to participating Directors on a
periodic basis but not less than annually in such form and
at such time as it deems appropriate.
15. Amendment and Termination. The Board of Directors
of the Company hereby reserves the right to amend this Plan
from time to time and to terminate this Plan at any time,
except that (i) no such amendment or any termination of
this Plan shall change the terms and conditions of payment
of any Compensation previously payable to a Director
without the consent of the Director concerned, nor shall
any termination of the Plan eliminate any obligations of
the Company which theretofore shall have arisen under the
Plan and (ii) neither the provisions dealing with the
reinvestment of cash distributions nor the amount of fees
payable to Directors may be changed more than once every
six months other than to conform with changes in the
Internal Revenue Code, the Employee Retirement Income
Security Act or any rules promulgated thereunder.
16. Controlling Law. The laws of Wisconsin shall be
controlling in all matters relating to the Plan.
17. Gender and Number. Where the context admits, words
in the masculine gender shall include the feminine and
neuter genders, the plural shall include the singular and
the singular shall include the plural.
- -------------------------------------------------
Exhibit 10(e)
HARNISCHFEGER INDUSTRIES, INC.
EXECUTIVE INCENTIVE PLAN
(as amended and restated October 9, 1995)
1. Purpose. Harnischfeger Industries, Inc.
Executive Incentive Plan (the "Plan") was established by
Harnischfeger Industries, Inc. (the "Company") effective as
of October 30, 1990 to provide as an incentive the
possibility of payment of additional compensation to or on
behalf of the key officers of the Company and its
subsidiaries who contribute materially to the success and
profitability of the Company and who become participants in
the Plan.
2. Administration. The Plan will be
administered by a committee of two or more directors, each
of whom has not, during the one year prior to or during
service as an administrator of the Plan, been granted or
awarded equity securities of the Company pursuant to the
Plan or any other plan of the Company other than a plan
meeting the requirements of paragraphs (c)(2)(i)(A)-(D) of
Rule 16b-3 promulgated pursuant to the Securities Exchange
Act of 1934 as amended (the "Committee"), which Committee
from time to time may delegate the performance of certain
of its ministerial duties under the Plan, such as the
keeping of records and participants' accounts, to such
person or persons as it may select. The Plan shall be
administered on the basis of a plan year (the "Plan Year")
which coincides with the fiscal year of the Company, which
currently is the 12-month period beginning on November 1
and ending on the next following October 31. The Company
shall pay the cost of Plan administration. The Committee
shall have the power, right and duty to interpret the
provisions of the Plan and may from time to time adopt
rules with respect to the administration of the Plan and
the determination and distribution of benefits under the
Plan, and may amend any and all rules previously
established. Any decision made by the Committee in good
faith in connection with its administration of or
responsibilities under the Plan, including the
interpretation of any provision of the Plan, the
application of any rule established under the Plan, any
determination as to the officers eligible to participate in
the Plan for any Plan Year, the amount allocated to each
for any Plan Year and the manner, conditions and terms of
payment of such amount, shall be conclusive on all persons.
3. Participation: Prior to October 1 of each
Plan Year, the Committee shall select those executives who
will be participants in the Plan for the following Plan
Year. The inclusion or selection of any executive as a
participant in the Plan (a "Participant") for any Plan Year
shall not require the inclusion or selection of such person
as a Participant for any subsequent Plan Year, or, if such
person is subsequently so included or selected, shall not
require the same benefit provided the Participant under the
Plan for an earlier Plan Year be provided such Participant
for the subsequent Plan Year.
4. Performance Goals. On or after September 15
of each Plan Year, the Chief Executive Officer of the
Company shall recommend to the Committee performance goals
for the Company and each of its divisions and subsidiaries
for the following Plan Year. Prior to October 15 of each
Plan Year, the Committee shall either approve the Chief
Executive Officer's recommended performance goals for the
following Plan Year, or in the Committee's sole discretion,
shall establish the performance goals for that Plan Year at
such levels as it considers appropriate. The Committee
shall also establish, by October 15 of each Plan Year,
threshold performance levels for the year for the Company
and each of its divisions and subsidiaries, over and under
performance levels and percentages for the year for the
Company and each of its divisions and subsidiaries, and
other features of the incentive compensation program for
the following Plan Year. If the business unit fails to
meet the established threshold performance level for a Plan
Year, no amount will be awarded to Participants in that
business unit's Plan for that year.
5. Target Incentive Percentage. As of the date
that the Committee determines the executives who shall be
eligible to participate in the Plan for a Plan Year, the
Committee also shall establish with respect to each
Participant a "target incentive percentage", which
percentage shall be based upon the appropriate performance
goals referred to in Section 4 as well as the Participant's
responsibility level as determined by the Committee. For
each Plan Year that the threshold performance level has
been achieved, the target incentive percentage for each
Participant (adjusted for any under or over performance or
other features of the incentive compensation program as
provided in Section 4) shall be multiplied by his base
salary earned in the fiscal year. The resulting amount
with respect to each Participant for a Plan Year is his
"Incentive Award" for that year.
6. Source, Time and Manner of Payment. Each
Participant's Incentive Award for a Plan Year shall be paid
from the general assets of the Company, in accordance with
the following:
(a) All of a Participant's Incentive Award for a
Plan Year shall be payable, without interest,
on or before the January 10 next following
the end of that Plan Year except for such
portion of said Incentive Award that such
Participant shall have previously elected to
have deferred in accordance with Section 6
(b).
(b) Each Participant may elect to defer the
payment of up to 100% of the Incentive Award
payable to such Participant pursuant to
Section 6 (a), in accordance with the
provisions of Section 7 hereof.
7. Election of Stock in Lieu of Pay. Each
Participant shall have the right to elect to have up to
100% of the Incentive Award payable to such Participant in
accordance with Section 6 hereof converted into shares of
the Company's common stock ("Stock") and delivered into the
Harnischfeger Industries Deferred Compensation Trust
("Rabbi Trust") for the benefit of such Participant subject
to the terms hereinafter set forth:
(a) A Participant in the Plan for any Plan Year
may by written notice filed with the Company
before the beginning of such Plan Year elect
to convert into Stock up to 100% of his
Incentive Award for that Plan Year. Such
election shall be irrevocable.
(b) Shares of Stock equal to the number (rounded
to the nearest integer) derived by dividing
seventy five percent (75%) of the average
closing price of the Stock on the New York
Stock Exchange Composite Tape for the month
of October of the Plan Year into the amount
of Incentive Award that each Participant has
elected to convert into Stock shall be
registered by the Company in the name of the
Rabbi Trust and delivered to the Rabbi Trust
for allocation to such Participant's account,
provided, however, that (i) the Company may
direct the trustee of the Rabbi Trust (the
"Trustee") to use for this purpose shares of
Stock previously delivered by the Company to
the Rabbi Trust if such shares have not been
allocated to the account of any Participant
and (ii) the total number of shares that may
be delivered by the Company to the Rabbi
Trust for the accounts of all Participants
during any Plan Year shall not exceed two
percent of the total number of shares
outstanding at the beginning of such Plan
Year adjusted for any stock split, stock
dividend, combination of shares, or similar
change in Stock, and provided further that if
there are not sufficient available shares
during any Plan Year to fully convert all
Incentive Awards which the Participants have
elected to convert, all available shares for
that Plan Year shall be allocated to electing
Participants on a pro rata basis and the
balance of each Participant's Incentive Award
shall be paid to the Participant in cash.
The aforesaid calculation and funding of each
Participant's account shall take place as
soon as practical after the January 1
immediately following the end of each such
Plan Year beginning with the Plan Year ending
October 31, 1990. The Stock allocated to a
Participant's account pursuant hereto may at
the Company's option be acquired through open
market purchases or may be either treasury
shares or newly issued shares provided that
any treasury or newly issued shares are duly
registered pursuant to applicable federal and
state securities laws and stock exchange
regulations. Although the Company intends to
exert its best efforts so that the shares
allocated or distributed to Participants
hereunder will be registered under, or exempt
from the registration requirements of, the
Securities Act of 1933 (the "Securities Act")
and any applicable state securities laws, if
the allocation or distribution would
otherwise result in the violation by the
Company of any provision of the Securities
Act or of any state securities law, the
Company may require that such allocation or
distribution be deferred until the Company
has taken appropriate action to avoid any
such violation.
(c) An account shall be maintained in the name of
each Participant which will reflect the
shares of Stock into which his Incentive
Award has been converted, and shall be
credited to reflect all dividends, stock
splits and other distributions with respect
to such shares. All cash distributions with
respect to Stock shall be invested by the
Trustee in shares of Stock through open
market or other appropriate purchases as soon
as practicable after receipt of same;
provided, however, that the number of shares
allocated to each Participant's account in
respect of each cash distribution will be the
same as if the cash distribution were used to
purchase shares of Stock at 75% of the
average price paid by the Trustee for Stock
purchased when it reinvests such cash
dividends in Stock as provided in Paragraph
4.1 of the Rabbi Trust. The Company shall
from time to time as needed make available to
the Trustee sufficient shares of Stock for
allocation to Participants' accounts in
connection with such discounted purchase of
Stock with cash dividends. Each such Stock
account shall be charged with any
distribution made to a Participant when made.
(d) The Stock in a Participant's account shall be
distributed to him (or to his beneficiary in
the event of his death) promptly (but not
sooner than sixty (60) days) following his
termination of employment with the Company or
its subsidiaries; provided, however, that a
Participant may upon written notice to the
Committee given at least one year prior to
his termination of employment, elect an
annual distribution of such Stock over a
period of time of up to ten (10) years (e.g.
if a ten year election, one tenth of the
balance at the time of the first
distribution, one ninth at the time of the
second distribution, etc.) and provided
further that a Participant may upon written
notice to the Committee given at least one
year prior to his termination of employment
elect to delay until the next calendar year
following his termination of employment
either the distribution of or, if the
Participant has elected annual distributions
over a period of time, the initial
distribution from his account. During the
first fifty (50) days following a
Participant's termination of employment, the
Participant (or the Participant's beneficiary
in the event of the Participant's death)
shall have the right to elect to have the
Participant's account distributed in cash,
Stock or a combination of cash and Stock.
Upon receipt of a written request from a
Participant that a part or all of the
distribution be made in cash, the Company
shall direct the Trustee to credit such
Participant's account with an amount (the
"Cash Portion") equal to the product of the
number of shares of Stock then credited to
Participant's account necessary to comply
with the request (the "Diversified Shares")
and the closing price of the Stock on the New
York Stock Exchange Composite Tape as of the
date the request is received by the Company.
Thereafter, the Trustee shall keep such
Participant's account as if the Cash Portion
were invested in cash, cash equivalents,
mutual funds or marketable securities as
directed by the Commitee from time to time
and as if the Diversified Shares had been
sold.
(e) Notwithstanding any other provision herein,
upon any distribution of Stock to a Section
16 Participant (as defined below) pursuant to
Section 7(d) which occurs within six months
after an allocation pursuant to either
Section 7(b) or Section 7(c), the Participant
agrees, as a condition to participation, to
refrain from disposing of any such
distributed Stock until six months have
elapsed from the Section 7(b) or Section 7(c)
allocation. A Section 16 Participant is a
Participant who is or at any time during the
prior six months has been designated by the
Company as a Section 16 Officer for purposes
of Section 16 of the Securities Exchange Act
of 1934.
(f) Notwithstanding the foregoing, in the event
of a "Change in Control" of the Company (as
defined in the Rabbi Trust), the Company
shall purchase for cash all shares of Stock
then in all Participants' accounts which have
been held in such accounts for at least six
months at a per-share price equal to the the
Change in Control Price, and the Trustee is
directed to sell such shares upon such terms.
Thereafter, with regard to any shares which
have not been held in such accounts for at
least six months, the Company shall purchase
such shares for cash as soon as they have
been held in such accounts for at least six
months. Immediately after the Company
purchases any shares pursuant to this Section
7(f), the Committee shall cause the Trustee
to effect a distribution of all cash proceeds
to the Participants in accordance with their
accounts. As used herein, "Change in Control
Price" means the higher of (i) the highest
reported sales price, regular way, of a share
of Stock in any transaction reported on the
New York Stock Exchange Composite Tape or
other national securities exchange on which
such shares are listed or on NASDAQ, as
applicable, during the 60-day period prior to
and including the date of a Change in Control
and (ii) if the Change in Control is the
result of a tender or exchange offer or a
Business Combination (as defined in the Rabbi
Trust), the highest price per share of Stock
paid in such tender or exchange offer or
Business Combination. To the extent that the
consideration paid in any such transaction
described above consists all or in part of
securities or other non-cash consideration,
the value of such securities or other non-
cash consideration shall be determined by the
Incumbent Board (as defined in the Rabbi
Trust).
(g) In the event that the Committee determines
that the laws of a country in which a
Participant resides make it impracticable to
allocate Stock to the account of such
Participant, the election of Stock in lieu of
pay pursuant to this Section 7 shall not be
available to such Participant. However, at
the discretion of the Committee, the
Participant may be placed in a plan to be
designated the Stock Equivalent Unit Plan
which will provide deferred compensation in
the same manner and amounts as would have
been provided under this Plan except such
amounts will not be funded through the Rabbi
Trust. Notwithstanding the foregoing, in the
event of a Change in Control, the Company
shall fund accounts in the Stock Equivalent
Unit Plan with cash in a manner similar to
that described in Section 7(f) above.
(h) Participants shall not be eligible to elect
to receive Stock in lieu of pay pursuant to
this Section 7 for a period of twelve (12)
months following the receipt of a hardship
distribution from any cash or deferred
compensation plan of the Company maintained
pursuant to Section 401(k) of the Internal
Revenue Code.
8. Designation of Beneficiaries. Each
Participant from time to time may name any person or
persons (who may be named concurrently, contingently or
successively) to whom his benefits under the Plan are to be
paid if he dies before he receives his Incentive Award or
the proceeds of his Rabbi Trust account. Each such
beneficiary designation will revoke all prior designations
by the Participant, shall not require the consent of any
previously named beneficiary, shall be in a form prescribed
by the Committee, and will be effective only when filed
with the Committee during the Participant's lifetime. If a
Participant fails to designate a beneficiary before his
death, the beneficiary shall be the Participant's estate.
9. General. No Participant or other person
shall have any right, title or interest in any amount
awarded under this Plan prior to the payment thereof to
such person or in any property of the Company. No rights
or interests of Participants under this Plan shall be
assignable either voluntarily or involuntarily nor shall
the establishment or continuance of this Plan affect or
enlarge the employment rights of any Participant or
constitute a contract of employment with any Participant.
Neither the Company nor any Committee member shall be
personally liable for any act done or omitted to be done in
good faith in the administration of the Plan. Except as
provided in Section 7 hereof, nothing herein shall require
the Company to segregate or set aside any funds or other
property for the purpose of paying any amounts, the payment
of which has been deferred under the Plan.
10. Facility of Payment. When a person entitled
to benefits under the Plan is under legal disability, or,
in the Committee's opinion, is in any way incapacitated so
as to be unable to manage his affairs, the Committee may
direct the payment of benefits to such person's legal
representative, or to a relative or friend of such person
for such person's benefit, or the Committee may direct the
application of such benefits for the benefit of such
person. Any payments made in accordance with the preceding
sentence shall be a full and complete discharge of any
liability for such payment under the Plan.
11. Withholding for Taxes. Notwithstanding any
other provision of the Plan, the Committee may on behalf of
the Participant withhold or direct the Trustee to withhold
from any payment to be made under the Plan, whether in the
form of cash or shares of Stock, such amount or amounts as
may be required for purposes of complying with appropriate
federal, state or foreign tax withholding provisions,
provided, however, that any decision by the Committee to
withhold Stock and any withholding of Stock by the Trustee
from the account of a Section 16 Participant shall only be
made during a window period (as defined below) and provided
further that no Stock that has been held in the account of
a Section 16 Participant for less than six months shall be
withheld under the provisions of this Section 11. A window
period shall be the period beginning on the third business
day following the date of release for publication of an
annual or quarterly summary statement of the sales and
earnings of the Company and its consolidated subsidiaries
and ending on the twelfth business day following such date.
Subject to the discretion of the Committee, no distribution
will be made to the Participant until all tax withholding
obligations have been satisfied and, if Stock is withheld
pursuant to this Section 11, until the window period during
which the Stock is withheld.
12. Benefit Statements. The Company shall
provide statements of account to Participants on a periodic
basis but not less than annually in such form and at such
time as it deems appropriate.
13. Amendment and Termination. Because
unforeseen circumstances may make it undesirable to
continue the Plan in any form, or to continue it without
change, the Board of Directors of the Company must
necessarily reserve and hereby has reserved the right to
amend the Plan from time to time and to terminate the Plan
at any time, except that (i) no such amendment or any
termination of the Plan shall change the terms and
conditions of payment of any Incentive Award theretofore
awarded to a Participant without the consent of the
Participant concerned, nor shall any termination of the
Plan eliminate any obligations of the Company which
theretofore shall have arisen under the Plan and (ii) the
provisions dealing with reinvestment of cash distributions
may not be changed more than once every six months other
than to conform with changes in the Internal Revenue Code,
the Employee Retirement Income Security Act or any rules
promulgated thereunder.
16. Controlling Law. The laws of Wisconsin shall
be controlling in all matters relating to the Plan.
17. Gender and Number. Where the context admits,
words in the masculine gender shall include the feminine
and neuter genders, the plural shall include the singular
and the singular shall include the plural.
-------------------------------------------
Exhibit 10(f)
HARNISCHFEGER INDUSTRIES, INC.
SUPPLEMENTAL RETIREMENT AND STOCK FUNDING PLAN
(as amended and restated October 9, 1995)
SECTION 1: Introduction
1.1 The Plan and its Effective Date. Harnischfeger
Industries, Inc. Supplemental Retirement and Stock Funding
Plan (the "Supplemental Plan") is the amendment and
restatement effective as of October 1, 1990 of the plan
that was originally established by Harnischfeger
Industries, Inc., a Delaware corporation (the "Company"),
effective March 1, 1987 as the Harnischfeger Industries,
Inc. Supplemental Retirement Plan.
1.2 Purpose. The Company maintains a Harnischfeger
Salaried Employees' Retirement Plan (the "Retirement
Plan"), which is intended to meet the requirements of a
"qualified plan" under the Internal Revenue Code of 1986,
as amended (the "Code"). While the Code and the Employee
Retirement Income Security Act of 1974, as amended (the
"Act"), place limitations on the benefits which may be paid
from a qualified plan, the Code and the Act permit the
payment under a non-qualified supplemental retirement plan
of the benefits which may not be paid under the qualified
plan because of such limitations. The purposes of this
Supplemental Plan are (i) to provide benefits which may not
be provided under the Retirement Plan because of
limitations imposed by the Code or the Act, including those
relating to nondiscrimination and maximum benefit
limitations, elections to defer compensation made by the
participants, and the granting of past service credits and
(ii) to provide the opportunity for qualified executives to
have their supplemental benefits converted into shares of
the Company's common stock upon the terms hereinafter set
forth.
SECTION 2: Participation and Benefits
2.1 Eligibility for Benefits Related to Retirement Plan.
Subject to the conditions and limitations hereof, if a
participant in the Retirement Plan (i) has been granted
credit for prior service or elected to defer compensation
which may not be taken into account under the Retirement
Plan because of applicable nondiscrimination or other
rules, or (ii) has accrued a vested pension benefit under
the Retirement Plan (or would have accrued a vested benefit
if his prior service were taken into account), and such
benefit has been limited as a result of the maximum benefit
limitations imposed by Sections 401(a)(17) and 415 of the
Code, he shall be a participant ("Participant") in this
Supplemental Plan and shall be entitled to receive under
this Supplemental Plan the portion of his benefits under
the Retirement Plan, determined without regard to the
limitations on the inclusions of prior service or deferred
compensation or the maximum benefit limitations therein,
which exceeds the benefits payable to him under the
Retirement Plan after applying such limitations. If a
Participant was employed by another "Harnischfeger
Company", as defined in the Retirement Plan, and such other
company also maintains a supplemental plan covering the
Participant, the benefits hereunder and under such other
plan shall be limited so as to not be duplicative and the
Participant's benefits hereunder and under such other plan
shall be paid by the Company and such other Harnischfeger
Company in such proportions as the Company shall determine.
The term "Company" as hereinafter used shall be deemed to
include a reference to each such other Harnischfeger
Company.
2.2 Payment of Benefits. Except to the extent a
Participant becomes entitled to receive Company common
stock as provided in Section 3, his benefits under this
Supplemental Plan shall be paid to him, or in the event of
his death to his beneficiary, at the same time and in the
same manner as his pension benefits under the Retirement
Plan.
2.3 Funding. Benefits payable under this Supplemental
Plan to a Participant or his beneficiary shall be paid
directly by the Company or at its discretion through
Harnischfeger Industries Deferred Compensation Trust
("Rabbi Trust"), a grantor trust established by the
Company. Prior to a "Change in Control" of the Company (as
hereinafter defined), the Company shall not be required
(but may do so in its discretion) to fund through the Rabbi
Trust or otherwise any benefits under this Supplemental
Plan, except that shares of Company stock shall be issued
and transferred to the Rabbi Trust as herein provided.
SECTION 3: Conversion of Benefits into Common
Stock
3.1 Eligible Stock Participant. As used herein, the
term "Eligible Stock Participant" means each Participant
who is an active senior executive of the Company as of
October 1, 1990 (and each Participant designated from time
to time hereafter by the Committee, as defined in Section
4.1 hereof) whose accrued benefits as of October 1, 1990
under this Supplemental Plan equals or exceeds a monthly
normal retirement annuity of $1,000 per month.
3.2 Initial Stock Funding. Each Eligible Stock
Participant shall have the right to elect to have all
benefits payable under this Supplemental Plan converted, on
the terms hereinafter set forth, into shares of the
Company's common stock and delivered into the Rabbi Trust
for the benefit of such Participant. The present value of
each such electing Participant's prospective supplemental
pension benefits shall be calculated as of October 1, 1990
using the most recent assumptions adopted by the Company
for purposes of calculating the actuarial present value of
the Company's pension obligations, provided, however, that
the discount rate used herein shall be one half percent
less than the discount rate used in such assumptions.
Shares of stock equal to the number (rounded to the nearest
integer) derived by dividing the average closing price for
the Company's common stock reflected on the New York Stock
Exchange Composite Tape for the month of September, 1990
into the aforesaid present value shall be registered by the
Company in the name of the trustee of the Rabbi Trust (the
"Trustee") and delivered to the Rabbi Trust for allocation
to such Participant's account. The aforesaid calculation
and funding of each Participant's account shall take place
as soon as is practicable after October 1, 1990. The
shares allocated to an Eligible Stock Participant's account
pursuant to Sections 3.2 or 3.3 may be either treasury
shares or newly issued shares provided any treasury or
newly issued shares are duly registered pursuant to
applicable federal and state securities, and stock
exchange, regulations. Although the Company intends to
exert its best efforts so that the shares allocated or
distributed to Participants hereunder will be registered
under, or exempt from the registration requirements of, the
Securities Act of 1933 (the "Securities Act") and any
applicable state securities laws, if the allocation or
distribution would otherwise result in the violation by the
Company of any provision of the Securities Act or of any
state securities law, the Company may require that such
allocation or distribution be deferred until the Company
has taken appropriate action to avoid any such violation.
3.3 Subsequent Stock Funding. As soon as practicable
after November 1st of each year (beginning with November of
1991), the present value of each Eligible Stock
Participant's prospective supplemental pension benefits
payable hereunder shall be calculated as of such November
1st using the then current assumptions adopted by the
Company for purposes of calculating the actuarial present
value of the Company's pension obligations, provided that
the discount rate used for purposes of such calculation
shall be one half percent less than the rate used in such
assumptions. Shares of the Company's common stock equal to
the number (rounded to the nearest integer) derived by
dividing the average closing price of the Company's common
stock on the New York Stock Exchange Composite Tape for the
immediately preceding month of October into the difference
between the aforesaid present value and the amount of the
present value calculated for the immediately preceding year
pursuant to the terms of this Supplemental Plan (if no
previous calculation has been made, a zero value shall be
used for the previous calculation) shall be registered by
the Company in the name of the Trustee and delivered to the
Rabbi Trust (if adequate shares or other consideration have
not theretofore been delivered by the Company to the Rabbi
Trust) for allocation to such Participant's account,
provided, however, that the total number of shares that may
be delivered by the Company to the Rabbi Trust for the
accounts of all Eligible Stock Participants during any
fiscal year shall not exceed one percent of the total
number of shares outstanding at the beginning of such
fiscal year adjusted for any stock split, stock dividend,
combination of shares or similar change in Stock, provided
further that if there are not sufficient available shares
during any fiscal year to fully fund the accounts of the
Eligible Stock Participants, all available shares for that
fiscal year shall be allocated to Eligible Stock
Participant accounts on a pro rata basis and the balance of
each Participant's account shall be paid to the Participant
in cash. The stock allocated to an Eligible Stock
Participant's account pursuant hereto may at the Company's
option be acquired through open market purchases or may be
either treasury shares or newly issued shares provided that
any treasury or newly issued shares are duly registered
pursuant to applicable federal and state securities laws
and stock exchange regulations. Although the Company
intends to exert its best efforts so that the shares
allocated or distributed to Participants hereunder will be
registered under, or exempt from the registration
requirements of, the Securities Act and any applicable
state securities laws, if the allocation or distribution
would otherwise result in the violation by the Company of
any provision of the Securities Act or of any state
securities law, the Company may require that such
allocation or distribution be deferred until the Company
has taken appropriate action to avoid any such violation.
3.4 Non-Electing Eligible Stock Participants. If any
Eligible Stock Participant shall elect not to have his
supplemental benefits earned prior to October 1, 1990
converted into the Company's common stock as provided in
Section 3.2, such supplemental benefits shall be calculated
and paid as if this Supplemental Plan had terminated on
October 1, 1990. Any supplemental pension benefits
accruing to such Participant after October 1, 1990 shall be
converted into shares of the Company's common stock
pursuant to the provisions of Section 3.3 and shall be
calculated as if such Participant first became an employee
of the Company on October 1, 1990.
3.5 Participants' Accounts. An account shall be
maintained in the name of each Eligible Stock Participant
which will reflect the shares of the Company's common stock
into which his benefits have been converted. Each Eligible
Stock Participant's account shall be credited to reflect
all dividends, stock splits and other distributions with
respect to such shares, and all non-stock distributions
with respect to Company shares shall be invested by the
Trustee in shares of the Company's common stock through
open market or other appropriate purchases as soon as
practicable after receipt of same or, if the Rabbi Trust
has unallocated shares, using such shares valued at the
last closing price for the Company's common stock on the
New York Stock Exchange Composite Tape immediately
preceding such allocation. Each such stock account shall
be charged with any distribution made to a Participant when
made. In addition, appropriate plan records shall be
maintained to reflect a Participant's benefits under
Section 2 which have not been converted into the Company's
common stock, including benefits accrued up to date of
termination.
3.6 Payment of Benefits.
3.6.1 Stock Benefits. As used in this section,
the term "Stock Benefits" shall mean all shares of the
Company's common stock, all distributions thereon not used
by the Trustee to purchase additional shares of the
Company's common stock, any other amounts allocable to an
Eligible Stock Participant's account as of the date of such
determination, and the amount of any benefits accrued
hereunder that have not been converted into shares of the
Company's common stock.
3.6.2 Payments. Benefits forming a portion of the
Stock Benefits that have not been funded at the
distribution date shall be paid directly by the Company.
3.6.2.1 If an Eligible Stock Participant
voluntarily terminates his employment with the Company
prior to attaining age 55 or is terminated with "Cause" (as
hereinafter defined) at any age, all Stock Benefits shall
be forfeited to the Company and such Participant shall
receive benefits under Section 2 to the same extent as if
none of his benefits had ever been funded with Company
stock under Section 3 of this Supplemental Plan (subject to
any prior payments made pursuant to the provisions of
Section 3.4).
3.6.2.2 Subject the Committee's sole
discretion to waive the provisions of this Section, if an
Eligible Stock Participant's employment is voluntarily
terminated after the attainment of age 55 and prior to
attainment of age 62, his Stock Benefits shall be reduced
in accordance with the early retirement reduction factors
under the Retirement Plan based upon his attained age at
his termination of employment and paid to him in a lump
sum; that portion of his Stock Benefits not paid to him due
to such reduction shall be forfeited to the Company.
3.6.2.3 If an Eligible Stock Participant's
employment is (a) voluntarily terminated following
attainment of age 62 (55 in the event the Committee elects
to waive the provisions of Section 3.6.2.2 hereof) or (b)
is involuntarily terminated at any age without Cause,
including termination due to death or disability, all of
his Stock Benefits shall be distributed to him (or to his
beneficiary in the event of his death) promptly (but not
sooner than sixty (60) days) following his termination of
employment with the Company or its subsidiaries; provided,
however, that a Participant may upon written notice to the
Committee given at least one year (ninety (90) days for any
such notice given prior to January 1, 1995) prior to his
termination, elect an annual distribution of such Stock
over a period of time of up to ten (10) years (e.g. if a
ten year election, one tenth of the balance at the time of
the first distribution, one ninth of the balance at the
time of the second distribution, etc.) and provided further
that a Participant may upon written notice to the Committee
given at least one year (ninety (90) days for any such
notice given prior to January 1, 1995) prior to his
termination of employment elect to delay until the next
calendar year following his termination of employment
either the distribution of or, if the Participant has
elected annual distributions over a period of time, the
initial distribution from his account. During the first
fifty (50) days following a Participant's termination of
employment, the Participant (or the Participant's
beneficiary in the event of the Participant's death) shall
have the right to elect to have the Participant's account
distributed in cash, stock or a combination of cash and
stock. Upon receipt of a written request that a part or
all of the distribution be made in cash, the Company shall
direct the Trustee to credit such Participant's account
with an amount (the "Cash Portion") equal to the product of
the number of shares of Stock then credited to
Participant's account necessary to comply with the request
(the "Diversified Shares") and the closing price of the
Stock on the New York Stock Exchange Composite Tape as of
the date the request is received by the Company.
Thereafter, the Trustee shall keep such Participant's
account as if the Cash Portion were invested in cash, cash
equivalents, mutual funds or marketable securities as
directed by the Commitee from time to time and as if the
Diversified Shares had been sold.
3.6.2.4 Notwithstanding any other provision
herein, upon any distribution to a Participant pursuant to
Section 3.6.1 which occurs within six months after an
allocation pursuant to Section 3.3 or 3.5, the Participant
agrees, as a condition to participation, to refrain from
disposing of any such distributed stock until six months
have elapsed from the Section 3.3 or 3.5 allocation.
3.6.3 Change In Control. Notwithstanding the
foregoing, in the event of a "Change in Control" of the
Company (as defined in the Rabbi Trust), the Company shall
purchase for cash all shares of Company common stock then
forming a portion of the Stock Benefits which have been
held in such accounts for at least six months at a per-
share price equal to the the Change in Control Price, and
the Trustee shall be directed to sell such shares upon such
terms. Thereafter, with regard to any shares which have
not been held in such accounts for at least six months, the
Company shall purchase such shares for cash as soon as they
have been held in such accounts for at least six months.
Immediately after the Company purchases any shares pursuant
to this Section 3.6.3, the Committee shall cause the
Trustee to effect a distribution of all Stock Benefits,
including such cash proceeds, to the Eligible Stock
Participants. As used herein, "Change in Control Price"
means the higher of (i) the highest reported sales price,
regular way, of a share of Stock in any transaction
reported on the New York Stock Exchange Composite Tape or
other national securities exchange on which such shares are
listed or on NASDAQ, as applicable, during the 60-day
period prior to and including the date of a Change in
Control and (ii) if the Change in Control is the result of
a tender or exchange offer or a Business Combination (as
defined in the Rabbi Trust), the highest price per share of
Stock paid in such tender or exchange offer or Business
Combination. To the extent that the consideration paid in
any such transaction described above consists all or in
part of securities or other non-cash consideration, the
value of such securities or other non-cash consideration
shall be determined by the Incumbent Board (as defined in
the Rabbi Trust).
3.6.4 Cause. For purposes of this Supplemental
Plan, "Cause" shall mean termination upon (a) Participant's
willful and continued failure to perform substantially the
reasonably assigned duties with the Company consistent with
those duties specified pursuant to his contract of
employment prior to a Change in Control of the Company
(other than any such failure resulting from incapacity due
to physical or mental illness) after a demand for
substantial performance is delivered to Participant by the
Chairman of the Board or Chief Executive Officer of the
Company which specifically identifies the manner in which
such person believes that Participant has not substantially
performed such assigned duties, or (b) Participant's
willful engagement in illegal conduct which is materially
and demonstrably injurious to the Company. For purposes of
this Section, no act, or failure to act on Participant's
part shall be considered "willful" unless done, or omitted
to be done, in knowing bad faith and without reasonable
belief that the action or omission was in, or not opposed
to, the best interests of the Company. Any act, or failure
to act, based upon authority given pursuant to a resolution
duly adopted by the Board or based upon the advice of
counsel for the Company shall be conclusively presumed to
be done, or omitted to be done, in good faith and in the
best interests of the Company. Notwithstanding the
foregoing, Participant shall not be deemed to have been
terminated for Cause unless and until there shall have been
delivered to him a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board
called and held for the purpose (after reasonable notice to
Participant and an opportunity for Participant, together
with his counsel, to be heard before the Board), finding
that in the good faith opinion of the Board Participant was
guilty of the conduct set forth above in (a) or (b) of this
Section and specifying the particulars thereof in detail.
3.7 Diversification. After an Eligible Stock
Participant reaches age 55, he shall have the right,
subject to the provisions of this Section 3.7, to elect to
have up to 50% of the value of his Stock Benefits
determined as if such portion were thereafter invested in
such investments, and in such manner, as the Company's
Pension and Investment Committee shall from time to time
authorize. A diversification may only take place pursuant
to an irrevocable election made by the Participant during a
window period (as defined below) provided that such
election is made at least six months after any previous
diversification under this Section 3.7. A window period
shall be the period beginning on the third business day
following the date of release for publication of an annual
or quarterly summary statement of the sales and earnings of
the Company and its consolidated subsidiaries and ending on
the twelfth business day following such date.
SECTION 4: General Provisions
4.1 Committee. This Supplemental Plan shall be
administered by a committee of two or more directors, each
of whom has not, during the one year prior to or during
service as an administrator of the Supplemental Plan been
granted or awarded equity securities of the Company
pursuant to the Supplemental Plan or any other plan of the
Company other than a plan meeting the requirements of
paragraphs (c)(2)(i)(A)-(D) of Rule 16b-3 promulgated
pursuant to the Securities Exchange Act of 1934 (the
"Committee"), disregarding any changes in the members of
the Committee following a Change in Control of the Company.
The Company shall pay the cost of administration of the
Supplemental Plan. The Committee shall have the power,
right and duty to interpret the provisions of the
Supplemental Plan and may from time to time adopt rules
with respect to the administration of the Supplemental Plan
and the determination and distribution of benefits under
the Supplemental Plan, and may amend any and all rules
previously established. Any decision made by the Committee
in good faith in connection with its administration of or
responsibilities under the Supplemental Plan, including the
interpretation of any provision of the Supplemental Plan,
the application of any rule established under the
Supplemental Plan, any determination as to the officers
eligible to participate in the Supplemental Plan, the
amount allocated to each and the manner, conditions and
terms of payment of such amount, shall be conclusive on all
persons.
4.2 Beneficiary. A Participant's "beneficiary" under
this Supplemental Plan means any person who becomes
entitled to benefits under the Retirement Plan because of
the Participant's death; provided that, if a Participant
dies while his benefits under this Supplemental Plan are
payable to him in installments, his beneficiary under this
Supplemental Plan shall be either (i) the person or persons
designated by him by signing and filing with the Committee
a form furnished by the Committee, or (ii) if the
Participant failed to designate a beneficiary in (i) above,
or if the beneficiary designated in (i) above dies before
the date of the Participant's death, the Participant's
estate.
4.3 Discretion. Notwithstanding any provisions in this
Supplemental Plan to the contrary, the Committee shall have
the discretion to allow any benefits to be paid that would
otherwise be forfeited.
4.4 Employment Rights. Establishment of the
Supplemental Plan shall not be construed to give any
Participant the right to be retained in the Company's
service or to any benefits not specifically provided by the
Supplemental Plan.
4.5 Interests Not Transferable. Except as to
withholding of any tax under the laws of the United States
or any state, the interests of the Participants and their
beneficiaries under the Supplemental Plan are not subject
to the claims of their creditors and may not be voluntarily
or involuntarily transferred, assigned, alienated or
encumbered. No Participant shall have any right to any
benefit payments hereunder prior to his termination of
employment with the Company other than pursuant to Section
3.6.3.
4.6 Payment with Respect to Incapacitated Participants
or Beneficiaries. If any person entitled to benefits under
the Supplemental Plan is under a legal disability or in the
Committee's opinion is incapacitated in any way so as to be
unable to manage his financial affairs, the Committee may
direct the payment of all or a portion of such benefits to
such person's legal representative or to a relative or
friend of such person for such person's benefit, or the
Committee may direct the application of such benefits for
the benefit of such person in any manner which the
Committee may elect that is consistent with the
Supplemental Plan. Any payments made in accordance with
the foregoing provisions of this section shall be a full
and complete discharge of any liability for such payments.
4.7 Limitation of Liability. To the extent permitted by
law, no person (including the Company, its Board of
Directors, the Committee, any present or former member of
the Company's Board of Directors or the Committee, and any
present or former officer of the Company) shall be
personally liable for any act done or omitted to be done in
good faith in the administration of the Supplemental Plan.
4.8 Controlling Law. The laws of Wisconsin shall be
controlling in all matters relating to the Supplemental
Plan.
4.9 Gender and Number. Where the context admits, words
in the masculine gender shall include the feminine and
neuter genders, the plural shall include the singular and
the singular shall include the plural.
4.10 Successor to the Company. The term "Company" as
used in the Supplemental Plan shall include any successor
to the Company by reason of merger, consolidation, the
purchase of all or substantially all of the Company's
assets or otherwise.
4.11 Withholding for Taxes. Notwithstanding any other
provision of this Supplemental Plan, the Committee may on
behalf of the Participant withhold or direct the Trustee to
withhold from any payment to be made under this
Supplemental Plan, whether in the form of cash or shares of
stock, such amount or amounts as may be required for
purposes of complying with appropriate federal, state or
foreign tax withholding provisions, provided, however, that
any decision by the Committee to withhold stock and any
withholding of stock by the Trustee from the account of a
Participant shall only be made during a window period and
provided further that no stock that has been held in the
account of a Participant for less than six months shall be
withheld under the provisions of this Section 4.11.
Subject to the discretion of the Committee, no distribution
will be made to the Participant until all tax withholding
obligations have been satisfied and, if stock is withheld
pursuant to this Section 4.11, until the window period
during which the stock is withheld.
SECTION 5: Amendment and Termination
5.1 Amendment and Termination. The Board of Directors
of the Company reserves the right to amend the Supplemental
Plan from time to time or to terminate the Supplemental
Plan at any time, provided that (i) no amendment of the
Supplemental Plan nor the termination of the Supplemental
Plan may cause the reduction, forfeiture or cessation of
any benefits that were accrued as of the date of such
amendment or termination and which would otherwise be
payable under this Supplemental Plan, but for such
amendment or termination and (ii) the provisions dealing
with the reinvestment of cash distributions may not be
changed more than once every six months other than to
conform with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act or any rules
promulgated thereunder.
- -----------------------------------------------
Exhibit 10(i)
KEY EXECUTIVE
EMPLOYMENT AND SEVERANCE
AGREEMENT
This Agreement is made and entered into and
effective as of October 8, 1995 between Jeffery
T. Grade ( Executive ) and Harnischfeger
Industries, Inc., a Delaware corporation
("Company").
W I T N E S S E T H :
WHEREAS, the Company has determined it is in
the best interests of the Company and its
stockholders to assure that Executive is in a
position to objectively evaluate all proposals
for acquisition of the Company (recognizing that
no such proposal is pending) and has determined
this Agreement, including the severance
provisions, will assure such independent
evaluation;
WHEREAS, the Company recognizes the need to
provide a level of compensation and relative
security that is competitive with that of other
publicly held companies and which provides the
necessary economic and performance incentives
that will be of benefit to Company stockholders
in the long term;
WHEREAS, in the event that Executive's
position is eliminated or his employment is
terminated as a result of an acquisition of the
Company it would be difficult to calculate the
losses and detriment which would be incurred by
Executive in such circumstances; and
WHEREAS, in view of Executive's intimate
knowledge of the business and affairs of Company
and his experience and demonstrated skill and
ability in performing services for Company and
his unique qualifications which are needed by the
Company, and to assure that Executive shall
continue to serve the Company;
WHEREAS, the Company requested an
independent review by its attorneys of the terms
of this Key Executive Employment And Severance
Agreement ( Agreement ) and following such review
its attorneys have recommended certain amendments
to this Agreement; and
WHEREAS, the Company s Human Resources
Committee has reviewed such proposed amendments
with such attorneys and has determined such
amendments to be necessary and appropriate.
In consideration of each of the specific
premises set forth above and in further
consideration of the mutual agreements set forth
herein, the parties agree as follows:
<PAGE> 2
1. Employment by the Company of Executive
and Acceptance by Executive. The Company hereby
employs Executive during the term of this
Agreement in such capacities and upon such
conditions concerning rates of compensation,
benefits and other matters as are hereinafter
stated. Executive hereby accepts such employment
and agrees faithfully, diligently and to the best
of his ability to discharge the responsibilities
of the offices which he shall, as provided
herein, occupy.
2. Capacity. Executive shall be employed
during the term of this Agreement as President
and Chief Executive Officer of the Company and
Chairman of the Board of Directors of the Company
with such duties, functions, responsibilities and
authority which are commensurate with and
appropriate for such positions and as are from
time-to-time set forth in the Bylaws of the
Company and otherwise delegated to Executive by
the Board of Directors of the Company; provided
that such duties, functions and responsibilities
shall not be materially changed, without
Executive's consent, from such duties, functions
and responsibilities as are currently performed
and enjoyed by Executive. Executive shall be a
full-time employee of the Company and shall
devote his best efforts to the performance and
fulfillment of such duties, functions and
responsibilities; provided that Executive shall
be permitted such vacations and other time off as
are consistent with his position and period of
service and the general rules and practices of
the Company in that regard, it being understood
for this purpose that such rules and practices
shall not be materially less favorable to
Executive than those presently in effect.
3. Place of Employment; Moving. While it is
recognized that the performance of Executive's
duties hereunder will occasionally require
Executive to travel on behalf of the Company, the
principal office of Executive and the principal
place for performance by him of his services
hereunder shall be in the Milwaukee, Wisconsin
metropolitan area, and Executive shall not,
without his consent, be required to perform the
principal portion of his services hereunder
outside of such area. However, the Company may
require from time-to-time that Executive perform
such services outside the Milwaukee, Wisconsin
metropolitan area as are required for the proper
performance by him of his duties during any
reasonable period or periods, but, unless the
consent of Executive is obtained, such periods
shall not exceed in the aggregate two months
during any twelve-month period. If Executive
shall consent to carry out his duties hereunder
at some place other than the Milwaukee, Wisconsin
metropolitan area, and, as a result thereof, it
shall be or become necessary for Executive to
move his place of residence, the Company shall
reimburse Executive under the terms of the
Company's employee relocation assistance plan in
effect as of the date of this Agreement or, if
more favorable to Executive, under the terms of
any such practice adopted by the Company in the
future.
4. Term. Subject to the other provisions of
this Agreement, the term of this Agreement and
Executive's employment hereunder shall be deemed
to have commenced on the date of this Agreement
and shall continue for a period of three years
thereafter or, if earlier, until Executive
reaches age 65 or until his death or Disability
(as hereafter defined), whichever occurs first.
Subject to the other provisions of this
Agreement, commencing on the first
<PAGE> 3
anniversary of this Agreement and on each
anniversary thereafter, the term of this
Agreement and Executive's employment hereunder
shall, unless Executive has reached age 62 or
died or become "Disabled" (as hereinafter
defined) before such date, be automatically
extended for a period of one additional year
unless at least thirty days prior to such date
Executive shall notify the Company in writing
that Executive does not extend the term of this
Agreement or the Company notifies Executive that,
for Cause (as hereafter defined), the Company
does not extend the term of this Agreement, which
notice shall be in writing and set forth the
grounds for Cause. Notwithstanding the foregoing
but subject to Executive's right to terminate his
employment for Good Reason (as hereafter
defined), in the event of a Potential Change in
Control (as hereafter defined) or a Change in
Control (as hereafter defined) Executive will not
terminate employment with the Company until the
earliest of (i) a date which is twelve months
from the occurrence of such Potential Change in
Control, (ii) the termination of Executive's
employment due to Disability or retirement at age
65 or (iii) a date which is twelve months from
the occurrence of such Change in Control. In the
event of a Change In Control, the term of this
Agreement shall be extended for three years from
the date of such Change In Control and there
shall be no further extension of the term. The
provisions of this Agreement, if extended, shall
be identical to those of this Agreement as in
effect immediately prior to such extension except
that the annual base salary provided for herein
shall be equal to the annual rate of base salary
currently being paid to Executive immediately
preceding the date on which such extension
becomes effective.
5. Change in Control. For the purposes of
this Agreement, a Change in Control shall mean:
(a) The acquisition by any individual,
entity or group (within the meaning of Section l3
(d) (3) or l4 (d) (2) of the Securities Exchange
Act of l934, as amended (the Exchange Act )) (a
Person ) of beneficial ownership (within the
meaning of Rule l3d-3 promulgated under the
Exchange Act) of 20% or more of either (i) the
then outstanding shares of common stock of the
Company (the Outstanding Company Common Stock )
or (ii) the combined voting power of the then
outstanding voting securities of the Company
entitled to vote generally in the election of
directors (the Outstanding Company Voting
Securities ); provided, however, that for
purposes of this subsection (a), the following
acquisitions shall not constitute a Change in
Control: (i) any acquisition by the Company, (ii)
any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the
Company or any corporation controlled by the
Company or (iii) any acquisition by any
corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of
subsection c; or
(b) Individuals who, as of the date
hereof, constitute the Board (the Incumbent
Board ) cease for any reason to constitute at
least a majority of the Board; provided, however,
that any individual becoming a director
subsequent to the date hereof whose election, or
nomination for election by the Company s
shareholders, was approved by a vote of at least
two-thirds (2/3) of the directors then comprising
the Incumbent Board shall be considered as though
such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such
individual whose initial assumption of office
occurs as a result of an <PAGE> 4
actual or threatened election contest with
respect to the election or removal of directors
or any other actual or threatened solicitation of
proxies or consents by or on behalf of a Person
other than the Board; or
(c) Consummation of a reorganization,
merger or consolidation or a sale or other
disposition of all or substantially all of the
assets of the Company (a Business Combination )
in each case, unless, following such Business
Combination, (i) all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination
beneficially own, directly or indirectly, more
than 80% of, respectively, the then outstanding
shares of common stock and the combined voting
power of the then outstanding voting securities
entitled to vote generally in the election of
directors, as the case may be, of the corporation
resulting from such Business Combination
(including, without limitation, a corporation
which as a result of such transaction owns the
Company or all or substantially all of the
Company s assets either directly or through one
or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior
to such Business Combination, of the Outstanding
Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from
such Business Combination or any employee benefit
plan (or related trust) of the Company or such
corporation resulting from such Business
Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the
corporation resulting from such Business
Combination or the combined voting power of the
then outstanding voting securities of such
corporation except to the extent that such
ownership existed prior to the Business
Combination and (iii) at least two-thirds (2/3)
of the members of the board of directors of the
corporation resulting from such Business
Combination were members of the Incumbent Board
at the time of the execution of the initial
agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the shareholders of the
Company of a complete liquidation or dissolution
of the Company.
.
6. Potential Change in Control. One or more
of the following shall constitute and be defined
as a Potential Change in Control :
(a) the Company enters into an
agreement, the consummation of which would result
in the occurrence of a Change in Control; or
(b) any Person (other than a trustee
or other fiduciary holding securities under an
employee benefit plan of the Company or a
corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the
same proportions as their ownership of stock of
the Company) who is or becomes the Beneficial
Owner, directly or indirectly, of 9.5% or more of
the Outstanding Company Common Stock or
Outstanding Company Voting Securities,
<PAGE> 5
increases his beneficial ownership of such stock
or securities by 5% or more over the percentage
so owned by such Person; or
(c) the Board of Directors adopts a
resolution to the effect that, for purposes of
this Agreement, a Potential Change In Control has
occurred.
For all purposes of this Agreement, if the
facts giving rise to a Potential Change in
Control cease to exist without any Change in
Control having occurred, the provisions of this
Agreement which are triggered by such Potential
Change in Control shall no longer be effective
unless another Potential Change in Control or any
Change in Control occurs.
7. Salary Compensation. As salary
compensation to Executive for his performance of
the services to be rendered hereunder and for his
acceptance of the responsibilities described
herein and for his performance of all the usual
obligations of employment, the Company agrees to
pay to Executive, and Executive agrees to accept,
during the term of this Agreement an annual base
salary of not less than $600,000 per year or
such greater amount as the Board of Directors may
from time-to-time determine, payable in equal
semi-monthly installments. At least annually the
Board of Directors of the Company, or the Human
Resources Committee or such other committee to
which the Board may have delegated such
authority, shall review such base salary to
determine whether it should be increased on the
basis of Executive's performance, that of the
Company, or other circumstances then prevailing.
The results of each review shall be communicated
to and discussed with Executive by the Board of
Directors or such Committee.
8. Bonus and Incentive Compensation. In
addition to the salary compensation payable to
Executive as provided in Paragraph 7 hereof,
Executive shall be entitled during the term of
this Agreement to receive such bonus and
incentive compensation each year as may be
awarded by the Human Resources Committee (or
other appropriate committee) of the Board of
Directors of the Company pursuant to the
Company's bonus, incentive compensation and
similar plans as are presently in effect or as
may hereafter be adopted or amended.
8A. Salary, Bonus and Other Compensation
Following a Change in Control. Upon the
occurrence of a Change in Control, Executive
shall be entitled, at a minimum, to the following
in each year that Executive remains employed by
the Company: (a) an annual base salary of no less
than that paid immediately prior to such Change
in Control plus a minimum annual salary increase,
on each anniversary of this Agreement, equal to
the cumulative change in the Consumer Price
Index; (b) bonus and incentive compensation
(including both cash and stock components) each
year of no less than the greater of (i) the
amount of bonus and incentive compensation
received in the year immediately prior to such
Change in Control or (ii) in the event Executive
was promised or led to expect bonus and/or
incentive compensation under any plans based upon
the achievement of financial, operating or
personal targets or goals, the amount that would
have been payable to Executive as if such targets
or goals were met for the
<PAGE> 6
year in question ( Par Bonus ); (c) pension
benefits, supplemental retirement benefits,
deferred compensation and salaried continuation
plans, incentive stock awards, stock option
plans, medical, health, life, accident and
disability insurance plans and programs, auto and
business expense reimbursements, vacations and
other benefits of not less than the type and
amount paid or granted to Executive immediately
prior to such Change in Control; (d) office space
and secretarial services equivalent to those
existing immediately prior to such Change in
Control.
9. Further Benefits. In addition to the
compensation provided in Paragraph 7 and
Paragraph 8 hereof, Executive shall, during the
term of this Agreement (and thereafter to the
extent provided herein or in such plans), be
covered by all applicable Company pension and
retirement plans, insurance and death benefits in
effect for all salaried employees, together with
any future improvements in such plans and
benefits. In addition, Executive shall be
entitled during the term of this Agreement (and
thereafter to the extent provided for herein or
in any such plan) to receive such other and
further benefits, including, without limitation,
benefits under stock option plans, supplemental
retirement plans, performance unit plans,
deferred compensation and salary continuation
plans, medical, health, life, accident and
disability insurance programs, pension benefits,
vacations, expense reimbursements and any and all
other benefits as shall be generally made
applicable to key executive employees of the
Company, and such additional benefits, as may be
granted to him from time-to-time by the Board of
Directors of the Company or the appropriate
committee thereof.
10. Covenant Against Competition. Except as
hereafter provided, executive agrees that at all
times during the term of this Agreement and for a
period of one year following the date on which
Executive's employment is terminated, Executive
will not, without the prior written approval of
the Board of Directors of the Company, directly
or indirectly, as owner, partner, officer or
employee, engage in any business which is
substantially competitive with any business
then actively conducted by the Company or by any
of its subsidiaries, or undertake to consult with
or advise any such competitive business, or
otherwise, directly or indirectly, engage in any
activity which is substantially competitive with
or in any way adversely and substantially
affecting any activity of the Company or any of
its subsidiaries, provided, however, that
ownership by Executive of not more than 5% of the
outstanding shares of stock of any such business
listed on any national stock exchange or quoted
on an automated quotation system, or of not more
than 15% of the stock of any such business not so
listed or quoted, shall not be deemed a violation
of this covenant. In the event of the occurrence
of a Change in Control the foregoing sentence
shall be void and not applicable.
11. Confidentiality and Proprietary
Information. Executive agrees to be bound by the
provisions of the Employee Proprietary Rights and
Confidentiality Agreement attached hereto as
Exhibit "A and incorporated herein. The
provisions of such agreement supplement and are
in addition to Executive's obligations under this
Agreement.
12. Certain Remedies. If Executive commits a
breach or threatens to commit a
<PAGE> 7
breach of any of the provisions of Paragraph 10
hereof or the agreement described in Paragraph
11, the Company shall have the right and remedy,
in addition to any other remedy that may be
available, at law or in equity, to have the
provisions of Paragraph 10 and the agreement
described in Paragraph ll specifically enforced
by any court having equity jurisdiction together
with an accounting for any damages sustained, it
being acknowledged and agreed that any such
breach or threatened breach will cause
irreparable injury to the Company and that money
damages will not provide an adequate remedy to
the Company. Such an injunction shall be
available without the posting of any bond or
other security, and Executive hereby consents to
the issuance of such injunction.
If any covenant contained in Paragraph 10 or
the agreement described in Paragraph 11, or any
part thereof, is hereafter construed to be
invalid or unenforceable, the same shall not
affect the remainder of the covenant or
covenants, which shall be given full effect,
without regard to the invalid portions, and any
court having jurisdiction shall have the power to
reduce the duration and/or area of such covenant
and, in its reduced form, said covenant shall
then be enforceable.
13. Disability. Employee shall be considered
disabled (or a Disability shall have
occurred) in the event Executive is unable to
perform his services under this Agreement for a
continuous period of six months by reason of his
physical or mental illness or incapacity. If
there is any dispute as to whether Executive is
or was physically or mentally unable to perform
his duties under this Agreement, such question
shall be submitted to a licensed physician agreed
to by Executive (or any legal guardian lawfully
appointed) and the Company, or, if they are
unable to so agree, appointed by the President of
the Medical Society of Milwaukee County,
Wisconsin at the request of either Executive (or
such guardian) or the Company. Executive shall
submit to such examinations and provide such
information as such physician may reasonably
request and the determination of such physician
as to Executive's physical or mental condition
shall be binding and conclusive upon Executive
and the Company. If Executive shall become
Disabled, in lieu of any further salary or other
compensation provided for in Paragraph 7 and
Paragraph 8 hereof (except to the extent that
such salary or other compensation was earned but
not paid prior to Disability), the Company shall
thereafter pay to Executive the benefits under
the Company's short-term disability plan as long
as applicable and then the Company's long-term
disability plan in effect at the date of this
Agreement, together with any improvements in said
plans in the future which provide additional or
more favorable benefits to Executive.
14. Prior Service Credit. Executive is hereby
granted credit, for purposes of the Company's
pension plans, for the years of continuous
employment with Executive's immediate prior
employer, IC Industries, Inc. However, any
payments under the Company's pension plans to
Executive shall be reduced by any pension or
similar benefits payable to Executive by such
prior employer.
15. Termination by Company.
(a) The Company shall have the right
to terminate this Agreement (and Executive's
<PAGE> 8
employment) only upon the death or Disability of
Executive or for Cause. For purpose of this
Agreement, Cause shall mean (i) Executive's
willful and continued failure to substantially
perform the reasonably assigned duties with the
Company which are consistent with Executive s
position and job description referred to in this
Agreement and, in the event of a Change in
Control, those duties assigned prior to the
Change in Control, other than any such failure
resulting from incapacity due to physical or
mental illness, after a written demand for
substantial performance is delivered to Executive
by the Board of Directors of the Company which
specifically identifies the manner in which
Executive has not substantially performed the
assigned duties, or (ii) Executive's willful
engagement in illegal conduct which is materially
and demonstrably injurious to the Company. For
purposes of this paragraph, no act, or failure to
act, on Executive's part shall be considered
willful unless done, or omitted to be done, in
knowing bad faith and without reasonable belief
that the action or omission was in, or not
opposed to, the best interests of the Company.
Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by
the Board of Directors or based upon the advise
of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, in
good faith and in the best interests of the
Company. Notwithstanding the foregoing, Executive
shall not be deemed to have been terminated for
Cause unless and until there shall have been
delivered to him a copy of a resolution, duly
adopted by the affirmative vote of not less than
three-quarters of the entire membership of the
Board of Directors at a meeting of the Board
called and held for such purpose (after
reasonable notice to Executive and an opportunity
for Executive, together with his counsel, to be
heard before the Board), finding that in the good
faith opinion of the Board of Directors Executive
was guilty of the conduct set forth above in (i)
or (ii) of this paragraph and specifying the
particulars thereof in detail.
(b) Forfeiture. If Executive is
terminated for Cause pursuant to Paragraph 15,
Executive shall be entitled to receive only the
Accrued Benefits described in Paragraph 16(c)(i).
16. Termination of this Agreement by
Executive in Certain Circumstances.
(a) Voluntary Termination. Subject
to the restrictions in Paragraph 4, Executive may
terminate this Agreement other than for Good
Reason (as hereinafter defined) upon 30 days
prior written notice to the Company. Upon such
termination, Executive shall be entitled to
receive only the Accrued Benefits described in
Paragraph 16(c)(i).
(b) Termination by Executive for
Good Reason. Executive may terminate his
employment under this Agreement for Good Reason
at any time during the term hereof unless this
Agreement has previously expired or been
terminated by reason of (i) the death or
Disability of Executive, (ii) attainment by
Executive of age 65, (iii) termination of this
Agreement by the Company for Cause, or (iv)
voluntary termination of this Agreement by
Executive other than for Good Reason.
Termination by Executive for Good Reason shall
mean termination by Executive of his employment
hereunder (1) for any reason within the twelve
(12) months following the expiration of the
committed employment period specified in
Paragraph 4(i), (ii) or (iii) hereof (provided a
Change in Control has occurred), or (2) because
of:
<PAGE> 9
(a) the assignment to Executive without
his express written consent of any duties
or functions inconsistent with his present
positions, duties, responsibilities,
authority and status with the Company, or
a change in his present reporting
responsibilities, titles or offices, or
any removal of Executive from, or any
failure to re-elect Executive to, any of
such positions; or
(b) failure to provide Executive with the
bonus and incentive compensation required
by Paragraph 8A(b) of this Agreement or
the exclusion of Executive from any
management, incentive compensation or
bonus programs maintained by the Company
from time-to-time in its discretion and of
a type in which Executive participated at
the inception of this Agreement or in
which key executives in general
participate; or
(c) the failure by the Company to provide
or maintain the benefits described in
Paragraph 8A(c) and (d) of this Agreement
or the failure by the Company to maintain
the deferred compensation plans, pension
and retirement plans (including
supplemental retirement plans), life
insurance and other fringe benefit plans
maintained by the Company at the inception
of this Agreement; or
(d) the failure by the Company to obtain
the assumption of this Agreement by any
successor or assign of the Company; or
(e) the failure by the Company to pay the
annual base salary and annual increases
required by Paragraph 8A(a) of this
Agreement or any reduction in the base
salary currently being paid to Executive;
or
(f) any other material breach by the
Company of any of the terms of this
Agreement; or
(g) any purported termination by the
Company of this Agreement or Executive's
employment hereunder which is not effected
pursuant to a Notice of Termination (as
hereinafter defined) and which does not
satisfy the requirements of Paragraph 15
hereof.
(c) Termination Payments. Upon any
termination by Executive of his employment under
this Agreement pursuant to Paragraph 16(b), or
upon any termination of Executive's employment by
the Company during the term hereof other than for
Cause, Disability or death, the Company shall
forthwith:
(i) pay to Executive in cash the
following accrued benefits ( Accrued
Benefits ) (a) all salary earned or
accrued through the termination date; (b)
reimburse Executive for any and all monies
advanced in connection with
<PAGE> 10
Executive's employment for reasonable and
necessary expenses incurred by Executive
through the termination date; (c) pay any
and all bonus, cash and other benefits
previously earned through the termination
date and deferred at the election of
Executive or pursuant to any deferred
compensation plans then in effect; (d)
make a pro rata (based upon the portion of
such fiscal year that Executive was an
employee of the Company) lump sum payment
of any bonus and incentive compensation
(including both cash and stock components)
otherwise payable to Executive with
respect to the year in which termination
occurs under any bonus and incentive
plan(s) in which Executive is a
participant; and (e) pay all other amounts
and benefits to which Executive may be
entitled under the terms of any benefit
plan of the Company. Payment of amounts
other than those described in subsections
(d) and (e) hereof shall be made within 10
days after the termination date. Payment
of amounts under subsections (d) and (e)
hereof shall be made pursuant to the terms
of any such plans either by the Company or
a trust implementing such plan; plus
(ii) pay to Executive in cash in a lump
sum an amount equal to the product of
three (3) (or, if less, the whole number
of years (rounded upward) remaining, at
the time of such termination, until
Executive would attain age 65) times the
sum of (1) the annual base salary payable
to Executive hereunder immediately prior
to such termination plus (2) the greater
of the average annual amount to which
Executive became entitled (whether paid,
payable or deferred) under all bonus,
incentive compensation and other plan(s)
of the Company during the three years (or
number of years that Executive
participated therein, if less) preceding
such termination or the Par Bonus; and
(iii) to the extent permissible under
the applicable plans, take all actions
necessary to cause all restricted stock,
stock options and any accompanying stock
appreciation rights to become
automatically vested and exercisable upon
such termination; plus
(iv) in addition to the retirement
benefits to which Executive is entitled
under the Company's retirement plan(s) or
any successor plans thereto, the Company
shall pay to Executive not later than the
tenth day following the termination date,
a lump sum, in cash, equal to the
actuarial equivalent of the excess of (a)
the retirement pension (determined as a
straight life annuity commencing at age
65) which Executive would have accrued
under the terms of the Company's
retirement plan (without regard to the
limitations imposed by section 415 of the
Internal Revenue Code of 1954, as amended
(the Code ), or any amendment to the
retirement plan made subsequent to a
Change in Control of the Company and on or
prior to the termination date, which
amendment adversely affects in any manner
the computation of retirement benefits
thereunder), determined as if Executive
had rendered (after the termination date)
three additional years of credited service
thereunder, and as if Executive had
accumulated three additional calendar
years of compensation (for purposes of
determining Monthly Compensation as
defined in the Company's retirement plan),
each in an amount equal to the amount for
the highest calendar year out of the final
ten calendar years preceding the
termination date, but in no event shall
Executive be deemed to have accumulated
additional credited service after
Executive's 65th birthday, over (b) the
retirement pension (determined as a
straight life annuity commencing at age
65), which Executive had then accrued
pursuant to the provisions of the
Company's retirement plan(s). For
purposes of this Subsection, actuarial
equivalent shall be determined using the
same methods and assumptions utilized
under the Company's retirement plan(s)
immediately prior to the Change in Control
of the Company. Provided, however, that
to the extent that all or a portion of
such amount is payable pursuant to any
other arrangement established by the
Company, the amount to which Executive
shall be entitled pursuant to this
Subsection shall be reduced by such
amount; and
(v) pay Executive in cash for any
vacation time earned but not taken at the
termination date, at an hourly rate equal
to the annual base salary as in effect
immediately prior to the termination date
divided by 2080.
Notwithstanding any other provisions of
this Agreement, for purposes of the
Company's salaried pension plan and its
medical, health, life, accident and
disability insurance programs, Executive
shall, in the event of any termination
which entitles Executive to the payments
described in Paragraph 16(c) hereof, be
considered and deemed, for a period of 3
years following such termination or until
Executive attains the age of 65 or until
reasonably equivalent benefits are paid or
extended by a new employer, whichever
first occurs, to be a full-time employee
of the Company and be entitled to all
benefits, rights and privileges
thereunder. If at the end of three years
Executive has not attained the age of 65
or has not previously received or is not
then receiving equivalent benefits from a
new employer, the Company shall arrange,
at its sole cost and expense, to enable
Executive to convert the coverage under
such policies to equivalent individual
policies. To the extent necessary for
application of this paragraph, Executive's
annual compensation during the aforesaid
period shall be deemed to be equal to the
amount described in Paragraph 16(c)(ii)(1)
plus the amount described in Paragraph
16(c)(ii)(2).
17. Tax Protection. (a) Anything in
this Agreement to the contrary notwithstanding
and except as set forth below, in the event it
shall be determined that any payment or
distribution by the Company to or for the benefit
of the Executive (whether paid or payable or
distributed or distributable pursuant to the
terms of this Agreement or otherwise, but
determined without regard to any additional
payments required under this Section l7) (a
Payment ) would be subject to the excise tax
imposed by Section 4999 of the Code (or any
amendments thereof or any similar tax that may be
imposed, and regulations thereunder) or any
interest or penalties are incurred by the
Executive with respect to such excise tax (such
excise tax, together with any such interest and
penalties, are hereinafter collectively referred
to as the Excise Tax ), then the Executive
shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such
that after payment by the Executive of all taxes
(including any interest or penalties imposed with
respect to such taxes), including, without
limitation, any income taxes (and any interest
and penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the
Executive retains
<PAGE> 11
an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this
Section l7 (a), if it shall be determined that
the Executive is entitled to a Gross-Up Payment,
but that the Executive, after taking into account
the Payments and the Gross-Up Payment, would not
receive a net after-tax benefit of at least
$l0,000 (taking into account both income taxes
and any Excise Tax) as compared to the net after-
tax proceeds to the Executive resulting from an
elimination of the Gross-Up Payment and a
reduction of the Payments, in the aggregate, to
an amount ( the Reduced Amount ) such that the
receipt of Payments would not give rise to any
Excise Tax, then no Gross-Up Payment shall be
made to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced
Amount.
(b) Subject to the provisions of Section
l7(c), all determinations required to be made
under this Section l7, including whether and when
a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall
be made by Price Waterhouse or such other
nationally recognized certified public accounting
firm as may be designated by the Executive (the
Accounting Firm ) which shall provide detailed
supporting calculations both to the Company and
the Executive within l5 business days of the
receipt of notice from the Executive that there
has been a Payment, or such earlier time as is
requested by the Company. In the event that the
Accounting Firm is serving as accountant or
auditor for the individual, entity or group
effecting the Change in Control, the Executive
shall appoint another nationally recognized
accounting firm to make the determinations
required hereunder (which accounting firm shall
then be referred to as the Accounting Firm
hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined
pursuant to this Section l7, shall be paid by the
Company to the Executive within five days of the
receipt of the Accounting Firm s determination.
Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a
result of the uncertainty in the application of
Section 4999 of the Code at the time of the
initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments
which will not have been made by the Company
should have been made ( Underpayment ),
consistent with the calculations required to be
made hereunder. In the event that the Company
exhausts its remedies pursuant to Section l7(c)
and the Executive thereafter is required to make
a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall
be promptly paid by the Company to or for the
benefit of the Executive.
(c) The Executive shall notify the
Company in writing of any claim by the Internal
Revenue Service that, if successful, would
require the payment by the Company of the Gross-
Up Payment. Such notification shall be given as
soon as practicable but no later than ten
business days after the Executive is informed in
writing of such claim and shall apprise the
Company of the nature of such claim and the date
on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the
expiration of the 30-day period following the
date on which Executive gives such notice to the
Company (or such shorter period ending on the
date that any payment of taxes with respect to
such claim is due). If the Company notifies the
Executive in writing prior to the expiration of
such period that it desires to contest such
claim, the
<PAGE> 12
Executive shall:
(i) give the Company any
information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection
with contesting such claim as the Company
shall reasonably request in writing from
time-to-time, including, without
limitation, accepting legal representation
with respect to such claim by an attorney
reasonably selected by the Company,
(iii) cooperate with the Company in
good faith in order effectively to contest
such claim, and
(iv) permit the Company to
participate in any proceedings relating to
such claim;
provided, however, that the Company shall bear
and pay directly all costs and expenses
(including additional interest and penalties)
incurred in connection with such contest and
shall indemnify and hold the Executive harmless,
on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with
respect thereto) imposed as a result of such
representation and payment of costs and expenses.
Without limitation on the foregoing provisions of
this Section l7(c), the Company shall control all
proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings,
hearings and conferences with the taxing
authority in respect of such claim and may, at
its sole option, either direct the Executive to
pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and
the Executive agrees to prosecute such contest to
a determination before any administrative
tribunal, in a court of initial jurisdiction and
in one or more appellate courts, as the Company
shall determine; provided, however, that if the
Company directs the Executive to pay such claim
and sue for a refund, the Company shall advance
the amount of such payment to the Executive, on
an interest-free basis and shall indemnify and
hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income tax
(including interest or penalties with respect
thereto) imposed with respect to such advance; or
with respect to any imputed income with respect
to such advance; and further provided that any
extension of the statute of limitations relating
to payment of taxes for the taxable year of the
Executive with respect to which such contested
amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company s
control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be
entitled to settle or contest, as the case may
be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(d) If, after the receipt by the
Executive of an amount advanced by the Company
pursuant to Section l7(c), the Executive becomes
entitled to receive any refund with respect to
such claim, the Executive shall (subject to the
Company s complying with the requirements of
Section l7(c)) promptly pay to the Company the
amount of such refund (together with any interest
paid
<PAGE> 13
or credited thereon after taxes applicable
thereto). If, after the receipt by the
Executive of an amount advanced by the Company
pursuant to Section l7(c), a determination is
made that the Executive shall not be entitled to
any refund with respect to such claim and the
Company does not notify the Executive in writing
of its intent to contest such denial of refund
prior to the expiration of 30 days after such
determination, then such advance shall be
forgiven and shall not be required to be repaid
and the amount of such advance shall offset, to
the extent thereof, the amount of Gross-Up
Payment required to be paid.
(e) It is the intent of this provision to
avoid any diminution in payments to which
Executive is entitled under this Agreement by
virtue of the imposition of any excise or
similar taxes (excluding income taxes) and to
make Executive whole should any such taxes be
imposed.
18. No Diminution of Payments. Executive
shall not be required to mitigate the amount of
any payment provided for in Paragraph 16,
Paragraph 17 or any other provision of this
Agreement, and no such
payment shall be reduced by any present value
factor or any other compensation or amount
payable to Executive by the Company or any other
employer or source, or for any other reason. The
payments provided by Paragraph 16 and Paragraph
17 are in addition to, and not in lieu of, any
other rights, benefits or entitlements Executive
may have under the provisions of any other plan.
It is the expectation and agreement of the
parties, in consideration of the mutual promises
herein, that no amount payable hereunder shall be
reduced by any court or arbitrator, regardless of
the legal theory advanced.
19. Notice of Termination; Effect.
(a) Notice. Any purported
termination of this Agreement by the Company for
Cause or Disability or by Executive pursuant to
Paragraph 16(b) hereof shall be communicated by
written Notice of Termination to the other party
hereto. For purposes of this Agreement, a
Notice of Termination shall mean a notice which
shall indicate the specific termination provision
in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances
claimed to provide a basis for termination under
the provision so indicated. No such purported
termination shall be effective if not effected
pursuant to a Notice of Termination satisfying
the requirements of this Paragraph 19.
(b) Effect. No termination of this
Agreement shall affect any right or obligation of
any party accrued prior thereto and no such
termination shall affect the provisions of
Paragraph 10, 11, 12, 16, 17, 18, 19, 20, 21, 22
and 23 hereof, all of which shall remain in
effect notwithstanding any such termination.
20. Payment Obligations Absolute. The
Company's obligation during and after the term
hereof to pay or cause to be paid to Executive
the compensation and payments provided for in
this Agreement and to make the arrangements
provided herein shall be absolute and
<PAGE> 14
unconditional and shall not be diminished,
reduced or affected by any circumstances,
including, without limitation, any setoff,
counterclaim, recoupment, defense or other right
which the Company may have against Executive or
anyone else. All amounts payable by the Company
hereunder shall be paid without notice or demand.
Each and every payment made hereunder by the
Company shall be final.
21. Superseding Effect - Entire
Agreement. This Agreement supersedes any prior
agreements or understandings, oral or written,
between the parties with respect to the subject
matter hereof and constitutes the entire
agreement of the parties with respect thereto.
No provision of this Agreement (including this
Paragraph 21) may be waived, amended, or
otherwise modified except by a subsequent written
agreement executed by the parties hereto.
22. Venue; Expenses. Any action
concerning this Agreement may be brought in the
federal or state courts located in the County of
Milwaukee, Wisconsin, and each party consents to
the venue and jurisdiction of such courts. The
Company shall pay all legal fees and expenses
incurred by Executive in connection with or as a
result of termination following a Change in
Control (including any fees incurred in
contesting or disputing any termination). In
addition, if a dispute arises with respect to the
Company's obligations or Executive's rights under
this Agreement, or if any legal proceeding shall
be brought to enforce or interpret any provision
contained herein, or to recover damages for
breach hereof, or in the event of any other
litigation involving this Agreement, Executive
shall recover from the Company all attorneys'
fees and costs and disbursements incurred as a
result of such dispute or legal proceeding,
regardless of the outcome, plus prejudgment
interest on any money judgement obtained by the
Executive, calculated at the rate of interest
announced by First Wisconsin National Bank of
Milwaukee from time-to-time as its prime rate,
plus 2.0%, from the date that payments to
Executive should have been made under this
Agreement.
23. Assignment; Binding Effect.
(a) This Agreement shall be binding
upon, and shall inure to the benefit of and be
enforceable by, the parties hereto and their
respective successors and assigns, provided that
(i) this Agreement is a personal service
agreement and no right hereunder may be assigned
by Executive except as contemplated by Paragraph
23(c) hereof and (ii) unless the Company shall
have complied with this Paragraph 23, no right
hereunder may be assigned or transferred by the
Company by operation of law or otherwise. Any
purported assignment or transfer in violation of
this Paragraph 23 shall be null and void.
(b) The Company will obtain from
any purchaser or other assignee or transferee of
or successor to all or substantially all of the
business or assets of the Company, (whether
direct or indirect, by purchase, merger,
consolidation or otherwise), an agreement in form
and substance satisfactory to Executive, to
assume and agree to perform this Agreement in the
same manner and to the same extent that the
Company would be required to perform it as if no
such purchase had taken place. As used in this
Agreement, the term Company shall mean
<PAGE> 15
Harnischfeger Industries, Inc., as hereinbefore
defined and any successor to or purchaser,
transferee or assignee of its business or assets.
The failure to obtain such an assumption within
sixty days following the closing of any such
purchase, assignment or transfer shall thereupon
immediately entitle Executive to invoke all
rights granted in Paragraph 16.
(c) This Agreement shall inure to
the benefit of and be enforceable by the personal
or legal representatives, executors,
administrators, successors, heirs, distributees,
devisees and legatees of Executive.
24. Withholding. The Company shall be
entitled to withhold from amounts to be paid to
Executive hereunder any federal, state or local
withholding or other taxes or charges which it is
from time-to-time required to withhold. The
Company shall be entitled to rely on an opinion
of counsel if any questions as to the amount or
requirement of any such withholding shall arise.
25. Invalidity. If a court shall
determine that any provision of this Agreement is
invalid or unenforceable as written, it is the
intention of the parties that such provision be
interpreted or judicially modified so as to
enable such provision to be enforced to the
maximum extent permissible. Any invalid or
unenforceable provision which cannot be so
modified shall be severed from this Agreement and
shall not affect the validity or enforceability
of any other provisions of this Agreement.
26. Notice. Notices given pursuant to
this Agreement shall be in writing and shall be
deemed given when received and if mailed, shall
be mailed by United States registered or
certified mail, return receipt requested,
addressee only, postage prepaid, if to the
Company, to Harnischfeger Industries, Inc.,
Attention: Secretary, 13400 Bishops Lane,
Brookfield, Wisconsin 53005, or if to Executive,
at the address set forth below the Executive's
signature line of this Agreement, or to such
other address as the party to be notified shall
have given in writing to the other.
27. No Waiver. No waiver by either
party at any time of any breach by the other
party of, or compliance with, any condition or
provisions of this Agreement to be performed by
the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at
the same time or any prior or subsequent time.
28. Headings. The headings herein
contained are for reference only and shall not
affect the meaning or interpretation of any
provisions of this Agreement.
IN WITNESS WHEREOF, Executive has affixed
his hand hereto, and pursuant to due
authorization from its Board of Directors the
Company has caused this instrument to be executed
by a duly authorized officer thereof, as of the
day and year first above written.
<PAGE> 16
/s/Jeffery T. Grade
-------------------
Jeffery T. Grade
1925 Emerald Woods Lane
Highland Park, IL 60035
HARNISCHFEGER INDUSTRIES, INC.
By /s/K. Thor Lundgren
--------------------
Executive Vice-President
Law and Government Affairs
Secretary and General Counsel
Exhibit 10(j)
KEY EXECUTIVE
EMPLOYMENT AND SEVERANCE
AGREEMENT
This Agreement is made, entered into and
effective as of October 8, 1995 between Francis
M. Corby, Jr. ( Executive ) and Harnischfeger
Industries, Inc., a Delaware corporation
("Company").
W I T N E S S E T H :
WHEREAS, the Company has determined it is in
the best interests of the Company and its
stockholders to assure that Executive is in a
position to objectively evaluate all proposals for
acquisition of the Company (recognizing that no
such proposal is pending) and has determined this
Agreement, including the severance provisions,
will assure such independent evaluation;
WHEREAS, the Company recognizes the need to
provide a level of compensation and relative
security that is competitive with that of other
publicly held companies and which provides the
necessary economic and performance incentives that
will be of benefit to Company stockholders in the
long term;
WHEREAS, in the event that Executive's
position is eliminated or his employment is
terminated as a result of an acquisition of the
Company it would be difficult to calculate the
losses and detriment which would be incurred by
Executive in such circumstances; and
WHEREAS, in view of Executive's intimate
knowledge of the business and affairs of Company
and his experience and demonstrated skill and
ability in performing services for Company and his
unique qualifications which are needed by the
Company, and to assure that Executive shall
continue to serve the Company;
WHEREAS, the Company requested an independent
review by its attorneys of the terms of this Key
Executive Employment And Severance Agreement
( Agreement ) and following such review its
attorneys have recommended certain amendments to
this Agreement; and
WHEREAS, the Company s Human Resources
Committee has reviewed such proposed amendments
with such attorneys and has determined such
amendments to be necessary and appropriate and the
Board of Directors of the Company ( Board ) has
further approved such amendments;
In consideration of each of the specific
premises set forth above and in further
consideration of the mutual agreements set forth
herein, the parties agree as follows:
<PAGE> 2
1. Employment by the Company of Executive
and Acceptance by Executive. The Company hereby
employs Executive during the term of this
Agreement in such capacities and upon such
conditions concerning rates of compensation,
benefits and other matters as are hereinafter
stated. Executive hereby accepts such employment
and agrees faithfully, diligently and to the best
of his ability to discharge the responsibilities
of the offices which he shall, as provided herein,
occupy.
2. Capacity. Executive shall be employed
during the term of this Agreement as Executive
Vice President Finance and Administration and
Chief Financial Officer of the Company with such
duties, functions, responsibilities and authority
which are commensurate with and appropriate for
such positions and as are from time-to-time set
forth in the Bylaws of the Company and otherwise
delegated to Executive by the Chief Executive
Officer or the Board of Directors of the Company;
provided that such duties, functions and
responsibilities shall not be materially changed,
without Executive's consent, from such duties,
functions and responsibilities as are currently
performed and enjoyed by Executive. Executive
shall be a full-time employee of the Company and
shall devote his best efforts to the performance
and fulfillment of such duties, functions and
responsibilities; provided that Executive shall be
permitted such vacations and other time off as are
consistent with his position and period of service
and the general rules and practices of the Company
in that regard, it being understood for this
purpose that such rules and practices shall not be
materially less favorable to Executive than those
presently in effect.
3. Place of Employment; Moving. While it is
recognized that the performance of Executive's
duties hereunder will occasionally require
Executive to travel on behalf of the Company, the
principal office of Executive and the principal
place for performance by him of his services
hereunder shall be in the Milwaukee, Wisconsin
metropolitan area, and Executive shall not,
without his consent, be required to perform the
principal portion of his services hereunder
outside of such area. However, the Company may
require from time-to-time that Executive perform
such services outside the Milwaukee, Wisconsin
metropolitan area as are required for the proper
performance by him of his duties during any
reasonable period or periods, but, unless the
consent of Executive is obtained, such periods
shall not exceed in the aggregate two months
during any twelve-month period. If Executive
shall consent to carry out his duties hereunder at
some place other than the Milwaukee, Wisconsin
metropolitan area, and, as a result thereof, it
shall be or become necessary for Executive to move
his place of residence, the Company shall
reimburse Executive under the terms of the
Company's employee relocation assistance plan in
effect as of the date of this Agreement or, if
more favorable to Executive, under the terms of
any such practice adopted by the Company in the
future.
4. Term. Subject to the other provisions of
this Agreement, the term of this Agreement and
Executive's employment hereunder shall be deemed
to have commenced on the date of this Agreement
and shall continue for a period of three years
thereafter or, if earlier, until Executive reaches
age 65 or until his death or Disability (as
hereafter defined), whichever occurs first.
Subject to the other provisions of this Agreement,
commencing on the first
<PAGE> 3
anniversary of this Agreement and on each
anniversary thereafter, the term of this Agreement
and Executive's employment hereunder shall, unless
Executive has reached age 62 or died or become
"Disabled" (as hereinafter defined) before such
date, be automatically extended for a period of
one additional year unless at least thirty days
prior to such date Executive shall notify the
Company in writing that Executive does not extend
the term of this Agreement or the Company notifies
Executive that, for Cause (as hereafter defined),
the Company does not extend the term of this
Agreement, which notice shall be in writing and
set forth the grounds for Cause. Notwithstanding
the foregoing but subject to Executive's right to
terminate his employment for Good Reason (as
hereafter defined), in the event of a Potential
Change in Control (as hereafter defined) or a
Change in Control (as hereafter defined) Executive
will not terminate employment with the Company
until the earliest of (i) a date which is twelve
months from the occurrence of such Potential
Change in Control, (ii) the termination of
Executive's employment due to Disability or
retirement at age 65 or (iii) a date which is
twelve months from the occurrence of such Change
in Control. In the event of a Change In Control,
the term of this Agreement shall be extended for
three years from the date of such Change In
Control and there shall be no further extension of
the term. The provisions of this Agreement, if
extended, shall be identical to those of this
Agreement as in effect immediately prior to such
extension except that the annual base salary
provided for herein shall be equal to the annual
rate of base salary currently being paid to
Executive immediately preceding the date on which
such extension becomes effective.
5. Change in Control. For the purposes of
this Agreement, a Change in Control shall mean:
(a) The acquisition by any individual,
entity or group (within the meaning of Section l3
(d) (3) or l4 (d) (2) of the Securities Exchange
Act of l934, as amended (the Exchange Act )) (a
Person ) of beneficial ownership (within the
meaning of Rule l3d-3 promulgated under the
Exchange Act) of 20% or more of either (i) the
then outstanding shares of common stock of the
Company (the Outstanding Company Common Stock )
or (ii) the combined voting power of the then
outstanding voting securities of the Company
entitled to vote generally in the election of
directors (the Outstanding Company Voting
Securities ); provided, however, that for purposes
of this subsection (a), the following acquisitions
shall not constitute a Change in Control: (i) any
acquisition by the Company, (ii) any acquisition
by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any
corporation controlled by the Company or (iii) any
acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii)
and (iii) of subsection c; or
(b) Individuals who, as of the date
hereof, constitute the Board (the Incumbent
Board ) cease for any reason to constitute at
least a majority of the Board; provided, however,
that any individual becoming a director subsequent
to the date hereof whose election, or nomination
for election by the Company s shareholders, was
approved by a vote of at least two-thirds (2/3) of
the directors then comprising the Incumbent Board
shall be considered as though such individual were
a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose
initial assumption of office occurs as a result of
an
<PAGE> 4
actual or threatened election contest with respect
to the election or removal of directors or any
other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than
the Board; or
(c) Consummation of a reorganization,
merger or consolidation or a sale or other
disposition of all or substantially all of the
assets of the Company (a Business Combination )
in each case, unless, following such Business
Combination, (i) all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination
beneficially own, directly or indirectly, more
than 80% of, respectively, the then outstanding
shares of common stock and the combined voting
power of the then outstanding voting securities
entitled to vote generally in the election of
directors, as the case may be, of the corporation
resulting from such Business Combination
(including, without limitation, a corporation
which as a result of such transaction owns the
Company or all or substantially all of the
Company s assets either directly or through one or
more subsidiaries) in substantially the same
proportions as their ownership, immediately prior
to such Business Combination, of the Outstanding
Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from
such Business Combination or any employee benefit
plan (or related trust) of the Company or such
corporation resulting from such Business
Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the
corporation resulting from such Business
Combination or the combined voting power of the
then outstanding voting securities of such
corporation except to the extent that such
ownership existed prior to the Business
Combination and (iii) at least two-thirds (2/3) of
the members of the board of directors of the
corporation resulting from such Business
Combination were members of the Incumbent Board at
the time of the execution of the initial
agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the shareholders of the
Company of a complete liquidation or dissolution
of the Company.
.
6. Potential Change in Control. One or more
of the following shall constitute and be defined
as a Potential Change in Control :
(a) the Company enters into an
agreement, the consummation of which would result
in the occurrence of a Change in Control; or
(b) any Person (other than a trustee
or other fiduciary holding securities under an
employee benefit plan of the Company or a
corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the
same proportions as their ownership of stock of
the Company) who is or becomes the Beneficial
Owner, directly or indirectly, of 9.5% or more of
the Outstanding Company Common Stock or
Outstanding Company Voting Securities,
<PAGE> 5
increases his beneficial ownership of such stock
or securities by 5% or more over the percentage so
owned by such Person; or
(c) the Board of Directors adopts a
resolution to the effect that, for purposes of
this Agreement, a Potential Change In Control has
occurred.
For all purposes of this Agreement, if the
facts giving rise to a Potential Change in Control
cease to exist without any Change in Control
having occurred, the provisions of this Agreement
which are triggered by such Potential Change in
Control shall no longer be effective unless
another Potential Change in Control or any Change
in Control occurs.
7. Salary Compensation. As salary
compensation to Executive for his performance of
the services to be rendered hereunder and for his
acceptance of the responsibilities described
herein and for his performance of all the usual
obligations of employment, the Company agrees to
pay to Executive, and Executive agrees to accept,
during the term of this Agreement an annual base
salary of not less than $324,000 per year or such
greater amount as the Board of Directors may from
time-to-time determine, payable in equal semi--
monthly installments. At least annually the Board
of Directors of the Company, or the Human
Resources Committee or such other committee to
which the Board may have delegated such authority,
shall review such base salary to determine whether
it should be increased on the basis of Executive's
performance, that of the Company, or other
circumstances then prevailing. The results of
each review shall be communicated to and discussed
with Executive by the Chief Executive Officer or
Board of Directors or such Committee.
8. Bonus and Incentive Compensation. In
addition to the salary compensation payable to
Executive as provided in Paragraph 7 hereof,
Executive shall be entitled during the term of
this Agreement to receive such bonus and incentive
compensation each year as may be awarded by the
Human Resources Committee (or other appropriate
committee) of the Board of Directors of the
Company pursuant to the Company's bonus, incentive
compensation and similar plans as are presently in
effect or as may hereafter be adopted or amended.
8A. Salary, Bonus and Other Compensation
Following a Change in Control. Upon the
occurrence of a Change in Control, Executive shall
be entitled, at a minimum, to the following in
each year that Executive remains employed by the
Company: (a) an annual base salary of no less than
that paid immediately prior to such Change in
Control plus a minimum annual salary increase, on
each anniversary of this Agreement, equal to the
cumulative change in the Consumer Price Index; (b)
bonus and incentive compensation (including both
cash and stock components) each year of no less
than the greater of (i) the amount of bonus and
incentive compensation received in the year
immediately prior to such Change in Control or
(ii) in the event Executive was promised or led to
expect bonus and/or incentive compensation under
any plans based upon the achievement of financial,
operating or personal targets or goals, the amount
that would have been payable to Executive as if
such targets or goals were met for the
<PAGE> 6
year in question ( Par Bonus ); (c) pension
benefits, supplemental retirement benefits,
deferred compensation and salaried continuation
plans, incentive stock awards, stock option plans,
medical, health, life, accident and disability
insurance plans and programs, auto and business
expense reimbursements, vacations and other
benefits of not less than the type and amount paid
or granted to Executive immediately prior to such
Change in Control; (d) office space and
secretarial services equivalent to those existing
immediately prior to such Change in Control.
9. Further Benefits. In addition to the
compensation provided in Paragraph 7 and Paragraph
8 hereof, Executive shall, during the term of this
Agreement (and thereafter to the extent provided
herein or in such plans), be covered by all
applicable Company pension and retirement plans,
insurance and death benefits in effect for all
salaried employees, together with any future
improvements in such plans and benefits. In
addition, Executive shall be entitled during the
term of this Agreement (and thereafter to the
extent provided for herein or in any such plan) to
receive such other and further benefits,
including, without limitation, benefits under
stock option plans, supplemental retirement plans,
performance unit plans, deferred compensation and
salary continuation plans, medical, health, life,
accident and disability insurance programs,
pension benefits, vacations, expense
reimbursements and any and all other benefits as
shall be generally made applicable to key
executive employees of the Company, and such
additional benefits, as may be granted to him from
time-to-time by the Board of Directors of the
Company or the appropriate committee thereof.
10. Covenant Against Competition. Except as
hereafter provided, executive agrees that at all
times during the term of this Agreement and for a
period of one year following the date on which
Executive's employment is terminated, Executive
will not, without the prior written approval of
the Board of Directors of the Company, directly or
indirectly, as owner, partner, officer or
employee, engage in any business which is
substantially competitive with any business
then actively conducted by the Company or by any
of its subsidiaries, or undertake to consult with
or advise any such competitive business, or
otherwise, directly or indirectly, engage in any
activity which is substantially competitive with
or in any way adversely and substantially
affecting any activity of the Company or any of
its subsidiaries, provided, however, that
ownership by Executive of not more than 5% of the
outstanding shares of stock of any such business
listed on any national stock exchange or quoted on
an automated quotation system, or of not more than
15% of the stock of any such business not so
listed or quoted, shall not be deemed a violation
of this covenant. In the event of the occurrence
of a Change in Control the covenant against
competition contained in this paragraph shall be
void and not applicable.
11. Confidentiality and Proprietary
Information. Executive agrees to be bound by the
provisions of the Employee Proprietary Rights and
Confidentiality Agreement attached hereto as
Exhibit "A and incorporated herein. The
provisions of such agreement supplement and are in
addition to Executive's obligations under this
Agreement.
12. Certain Remedies. If Executive commits a
breach or threatens to commit a
<PAGE> 7
breach of any of the provisions of Paragraph 10
hereof or the agreement described in Paragraph 11,
the Company shall have the right and remedy, in
addition to any other remedy that may be
available, at law or in equity, to have the
provisions of Paragraph 10 and the agreement
described in Paragraph ll specifically enforced by
any court having equity jurisdiction together with
an accounting for any damages sustained, it being
acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to
the Company and that money damages will not
provide an adequate remedy to the Company. Such
an injunction shall be available without the
posting of any bond or other security, and
Executive hereby consents to the issuance of such
injunction.
If any covenant contained in Paragraph 10 or
the agreement described in Paragraph 11, or any
part thereof, is hereafter construed to be invalid
or unenforceable, the same shall not affect the
remainder of the covenant or covenants, which
shall be given full effect, without regard to the
invalid portions, and any court having
jurisdiction shall have the power to reduce the
duration and/or area of such covenant and, in its
reduced form, said covenant shall then be
enforceable.
13. Disability. Employee shall be considered
disabled (or a Disability shall have occurred)
in the event Executive is unable to perform his
services under this Agreement for a continuous
period of six months by reason of his physical or
mental illness or incapacity. If there is any
dispute as to whether Executive is or was
physically or mentally unable to perform his
duties under this Agreement, such question shall
be submitted to a licensed physician agreed to by
Executive (or any legal guardian lawfully
appointed) and the Company, or, if they are unable
to so agree, appointed by the President of the
Medical Society of Milwaukee County, Wisconsin at
the request of either Executive (or such guardian)
or the Company. Executive shall submit to such
examinations and provide such information as such
physician may reasonably request and the
determination of such physician as to Executive's
physical or mental condition shall be binding and
conclusive upon Executive and the Company. If
Executive shall become Disabled, in lieu of any
further salary or other compensation provided for
in Paragraph 7 and Paragraph 8 hereof (except to
the extent that such salary or other compensation
was earned but not paid prior to Disability), the
Company shall thereafter pay to Executive the
benefits under the Company's short-term disability
plan as long as applicable and then the Company's
long-term disability plan in effect at the date of
this Agreement, together with any improvements in
said plans in the future which provide additional
or more favorable benefits to Executive.
14. Prior Service Credit. Executive is hereby
granted credit, for purposes of the Company's
pension plans, for the years of continuous
employment with Executive's immediate prior
employer, Joy Manufacturing Company. However, any
payments under the Company's pension plans to
Executive shall be reduced by any pension or
similar benefits payable to Executive by such
prior employer.
15. Termination by Company.
(a) The Company shall have the right
to terminate this Agreement (and Executive's
<PAGE> 8
employment) only upon the death or Disability of
Executive or for Cause. For purpose of this
Agreement, Cause shall mean (i) Executive's
willful and continued failure to substantially
perform the reasonably assigned duties with the
Company which are consistent with Executive s
position and job description referred to in this
Agreement and, in the event of a Change in
Control, those duties assigned prior to the Change
in Control, other than any such failure resulting
from incapacity due to physical or mental illness,
after a written demand for substantial performance
is delivered to Executive by the Board of
Directors of the Company which specifically
identifies the manner in which Executive has not
substantially performed the assigned duties, or
(ii) Executive's willful engagement in illegal
conduct which is materially and demonstrably
injurious to the Company. For purposes of this
paragraph, no act, or failure to act, on
Executive's part shall be considered willful
unless done, or omitted to be done, in knowing bad
faith and without reasonable belief that the
action or omission was in, or not opposed to, the
best interests of the Company. Any act, or
failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board
of Directors or based upon the advise of counsel
for the Company shall be conclusively presumed to
be done, or omitted to be done, in good faith and
in the best interests of the Company.
Notwithstanding the foregoing, Executive shall not
be deemed to have been terminated for Cause unless
and until there shall have been delivered to him a
copy of a resolution, duly adopted by the
affirmative vote of not less than three-quarters
of the entire membership of the Board of Directors
at a meeting of the Board called and held for such
purpose (after reasonable notice to Executive and
an opportunity for Executive, together with his
counsel, to be heard before the Board), finding
that in the good faith opinion of the Board of
Directors Executive was guilty of the conduct set
forth above in (i) or (ii) of this paragraph and
specifying the particulars thereof in detail.
(b) Forfeiture. If Executive is
terminated for Cause pursuant to Paragraph 15,
Executive shall be entitled to receive only the
Accrued Benefits described in Paragraph 16(c)(i).
16. Termination of this Agreement by
Executive in Certain Circumstances.
(a) Voluntary Termination. Subject
to the restrictions in Paragraph 4, Executive may
terminate this Agreement other than for Good
Reason (as hereinafter defined) upon 30 days prior
written notice to the Company. Upon such
termination, Executive shall be entitled to
receive only the Accrued Benefits described in
Paragraph 16(c)(i).
(b) Termination by Executive for
Good Reason. Executive may terminate his
employment under this Agreement for Good Reason at
any time during the term hereof unless this
Agreement has previously expired or been
terminated by reason of (i) the death or
Disability of Executive, (ii) attainment by
Executive of age 65, (iii) termination of this
Agreement by the Company for Cause, or (iv)
voluntary termination of this Agreement by
Executive other than for Good Reason. Termination
by Executive for Good Reason shall mean
termination by Executive of his employment
hereunder (1) for any reason within the twelve
(12) months following the expiration of the
committed employment period specified in Paragraph
4(i), (ii) or (iii) hereof (provided a Change in
Control has occurred), or (2) because of:
<PAGE> 9
(a) the assignment to Executive without
his express written consent of any duties
or functions inconsistent with his present
positions, duties, responsibilities,
authority and status with the Company, or
a change in his present reporting
responsibilities, titles or offices, or
any removal of Executive from, or any
failure to re-elect Executive to, any of
such positions; or
(b) failure to provide Executive with the
bonus and incentive compensation required
by Paragraph 8A(b) of this Agreement or
the exclusion of Executive from any
management, incentive compensation or
bonus programs maintained by the Company
from time-to-time in its discretion and of
a type in which Executive participated at
the inception of this Agreement or in
which key executives in general
participate; or
(c) the failure by the Company to provide
or maintain the benefits described in
Paragraph 8A(c) and (d) of this Agreement
or the failure by the Company to maintain
the deferred compensation plans, pension
and retirement plans (including
supplemental retirement plans), life
insurance and other fringe benefit plans
maintained by the Company at the inception
of this Agreement; or
(d) the failure by the Company to obtain
the assumption of this Agreement by any
successor or assign of the Company; or
(e) the failure by the Company to pay the
annual base salary and annual increases
required by Paragraph 8A(a) of this
Agreement or any reduction in the base
salary currently being paid to Executive;
or
(f) any other material breach by the
Company of any of the terms of this
Agreement; or
(g) any purported termination by the
Company of this Agreement or Executive's
employment hereunder which is not effected
pursuant to a Notice of Termination (as
hereinafter defined) and which does not
satisfy the requirements of Paragraph 15
hereof.
(c) Termination Payments. Upon any
termination by Executive of his employment under
this Agreement pursuant to Paragraph 16(b), or
upon any termination of Executive's employment by
the Company during the term hereof other than for
Cause, Disability or death, the Company shall
forthwith:
(i) pay to Executive in cash the
following accrued benefits ( Accrued
Benefits ) (a) all salary earned or
accrued through the termination date; (b)
reimburse Executive for any and all monies
advanced in connection with Executive's
employment for reasonable and necessary
expenses incurred by
<PAGE> 10
Executive through the termination date;
(c) pay any and all bonus, cash and other
benefits previously earned through the
termination date and deferred at the
election of Executive or pursuant to any
deferred compensation plans then in
effect; (d) make a pro rata (based upon
the portion of such fiscal year that
Executive was an employee of the Company)
lump sum payment of any bonus and
incentive compensation (including both
cash and stock components) otherwise
payable to Executive with respect to the
year in which termination occurs under any
bonus and incentive plan(s) in which
Executive is a participant; and (e) pay
all other amounts and benefits to which
Executive may be entitled under the terms
of any benefit plan of the Company.
Payment of amounts other than those
described in subsections (d) and (e)
hereof shall be made within 10 days after
the termination date. Payment of amounts
under subsections (d) and (e) hereof shall
be made pursuant to the terms of any such
plans either by the Company or a trust
implementing such plan; plus
(ii) pay to Executive in cash in a lump
sum an amount equal to the product of
three (3) (or, if less, the whole number
of years (rounded upward) remaining, at
the time of such termination, until
Executive would attain age 65) times the
sum of (1) the annual base salary payable
to Executive hereunder immediately prior
to such termination plus (2) the greater
of the average annual amount to which
Executive became entitled (whether paid,
payable or deferred) under all bonus,
incentive compensation and other plan(s)
of the Company during the three years (or
number of years that Executive
participated therein, if less) preceding
such termination or the Par Bonus; and
(iii) to the extent permissible under
the applicable plans, take all actions
necessary to cause all restricted stock,
stock options and any accompanying stock
appreciation rights to become
automatically vested and exercisable upon
such termination; plus
(iv) in addition to the retirement benefits
to which Executive is entitled under the
Company's retirement plan(s) or any
successor plans thereto, the Company shall
pay to Executive not later than the tenth
day following the termination date, a lump
sum, in cash, equal to the actuarial
equivalent of the excess of (a) the
retirement pension (determined as a straight
life annuity commencing at age 65) which
Executive would have accrued under the terms
of the Company's retirement plan (without
regard to the limitations imposed by section
415 of the Internal Revenue Code of 1954, as
amended (the Code ), or any amendment to
the retirement plan made subsequent to a
Change in Control of the Company and on or
prior to the termination date, which
amendment adversely affects in any manner
the computation of retirement benefits
thereunder), determined as if Executive had
rendered (after the termination date) three
additional years of credited service
thereunder, and as if Executive had
accumulated three additional calendar years
of compensation (for purposes of determining
Monthly Compensation as defined in the
Company's retirement plan), each in an
amount equal to the amount for the
<PAGE> 11
highest calendar year out of the final ten
calendar years preceding the termination
date, but in no event shall Executive be
deemed to have accumulated additional
credited service after Executive's 65th
birthday, over (b) the retirement pension
(determined as a straight life annuity
commencing at age 65), which Executive had
then accrued pursuant to the provisions of
the Company's retirement plan(s). For
purposes of this Subsection, actuarial
equivalent shall be determined using the
same methods and assumptions utilized under
the Company's retirement plan(s) immediately
prior to the Change in Control of the
Company. Provided, however, that to the
extent that all or a portion of such amount
is payable pursuant to any other arrangement
established by the Company, the amount to
which Executive shall be entitled pursuant
to this Subsection shall be reduced by such
amount; and
(v) pay Executive in cash for any vacation
time earned but not taken at the termination
date, at an hourly rate equal to the annual
base salary as in effect immediately prior
to the termination date divided by 2080.
Notwithstanding any other provisions of this
Agreement, for purposes of the Company's salaried
pension plan and its medical, health, life,
accident and disability insurance programs,
Executive shall, in the event of any termination
which entitles Executive to the payments described
in Paragraph 16(c) hereof, be considered and
deemed, for a period of 3 years following such
termination or until Executive attains the age of
65 or until reasonably equivalent benefits are paid
or extended by a new employer, whichever first
occurs, to be a full-time employee of the Company
and be entitled to all benefits, rights and
privileges thereunder. If at the end of three
years Executive has not attained the age of 65 or
has not previously received or is not then
receiving equivalent benefits from a new employer,
the Company shall arrange, at its sole cost and
expense, to enable Executive to convert the
coverage under such policies to equivalent
individual policies. To the extent necessary for
application of this paragraph, Executive's annual
compensation during the aforesaid period shall be
deemed to be equal to the amount described in
Paragraph 16(c)(ii)(1) plus the amount described in
Paragraph 16(c)(ii)(2).
17. Tax Protection. (a) Anything in this
Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be
determined that any payment or distribution by the
Company to or for the benefit of the Executive
(whether paid or payable or distributed or
distributable pursuant to the terms of this
Agreement or otherwise, but determined without
regard to any additional payments required under
this Section l7) (a Payment ) would be subject to
the excise tax imposed by Section 4999 of the Code
(or any amendments thereof or any similar tax that
may be imposed, and regulations thereunder) or any
interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax,
together with any such interest and penalties, are
hereinafter collectively referred to as the Excise
Tax ), then the Executive shall be entitled to
receive an additional payment (a Gross-Up
Payment ) in an amount such that after payment by
the Executive of all taxes (including any interest
or penalties imposed with respect to such taxes),
including, without limitation, any income taxes
(and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount
of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
<PAGE> 12
Notwithstanding the foregoing provisions of this
Section l7 (a), if it shall be determined that the
Executive is entitled to a Gross-Up Payment, but
that the Executive, after taking into account the
Payments and the Gross-Up Payment, would not
receive a net after-tax benefit of at least $l0,000
(taking into account both income taxes and any
Excise Tax) as compared to the net after-tax
proceeds to the Executive resulting from an
elimination of the Gross-Up Payment and a reduction
of the Payments, in the aggregate, to an amount
( the Reduced Amount ) such that the receipt of
Payments would not give rise to any Excise Tax,
then no Gross-Up Payment shall be made to the
Executive and the Payments, in the aggregate, shall
be reduced to the Reduced Amount.
(b) Subject to the provisions of Section
l7(c), all determinations required to be made under
this Section l7, including whether and when a
Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized
in arriving at such determination, shall be made by
Price Waterhouse or such other nationally
recognized certified public accounting firm as may
be designated by the Executive (the Accounting
Firm ) which shall provide detailed supporting
calculations both to the Company and the Executive
within l5 business days of the receipt of notice
from the Executive that there has been a Payment,
or such earlier time as is requested by the
Company. In the event that the Accounting Firm is
serving as accountant or auditor for the
individual, entity or group effecting the Change in
Control, the Executive shall appoint another
nationally recognized accounting firm to make the
determinations required hereunder (which accounting
firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined
pursuant to this Section l7, shall be paid by the
Company to the Executive within five days of the
receipt of the Accounting Firm s determination. Any
determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a
result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it
is possible that Gross-Up Payments which will not
have been made by the Company should have been made
( Underpayment ), consistent with the calculations
required to be made hereunder. In the event that
the Company exhausts its remedies pursuant to
Section l7(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company
to or for the benefit of the Executive.
(c) The Executive shall notify the Company
in writing of any claim by the Internal Revenue
Service that, if successful, would require the
payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as
practicable but no later than ten business days
after the Executive is informed in writing of such
claim and shall apprise the Company of the nature
of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day
period following the date on which Executive gives
such notice to the Company (or such shorter period
ending on the date that any payment of taxes with
respect to such claim is due). If the Company
notifies the Executive in writing prior to the
expiration of such period that it desires to
contest such claim, the Executive shall:
<PAGE> 13
(i) give the Company any information
reasonably requested by the Company relating to
such claim,
(ii) take such action in connection
with contesting such claim as the Company shall
reasonably request in writing from time-to-time,
including, without limitation, accepting legal
representation with respect to such claim by an
attorney reasonably selected by the Company,
(iii) cooperate with the Company in
good faith in order effectively to contest such
claim, and
(iv) permit the Company to participate
in any proceedings relating to such claim;
provided, however, that the Company shall bear and
pay directly all costs and expenses (including
additional interest and penalties) incurred in
connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto)
imposed as a result of such representation and
payment of costs and expenses. Without limitation
on the foregoing provisions of this Section l7(c),
the Company shall control all proceedings taken in
connection with such contest and, at its sole
option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue
for a refund or contest the claim in any
permissible manner, and the Executive agrees to
prosecute such contest to a determination before
any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however,
that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall
advance the amount of such payment to the
Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect
thereto) imposed with respect to such advance; or
with respect to any imputed income with respect to
such advance; and further provided that any
extension of the statute of limitations relating to
payment of taxes for the taxable year of the
Executive with respect to which such contested
amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company s
control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Executive
of an amount advanced by the Company pursuant to
Section l7(c), the Executive becomes entitled to
receive any refund with respect to such claim, the
Executive shall (subject to the Company s complying
with the requirements of Section l7(c)) promptly
pay to the Company the amount of such refund
(together with any interest paid or credited
thereon after taxes applicable thereto). If,
after the receipt by the Executive of an
<PAGE> 14
amount advanced by the Company pursuant to Section
l7(c), a determination is made that the Executive
shall not be entitled to any refund with respect to
such claim and the Company does not notify the
Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days
after such determination, then such advance shall
be forgiven and shall not be required to be repaid
and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment
required to be paid.
(e) It is the intent of this provision to
avoid any diminution in payments to which Executive
is entitled under this Agreement by virtue of the
imposition of any excise or similar taxes
(excluding income taxes) and to make Executive
whole should any such taxes be imposed.
18. No Diminution of
Payments. Executive shall not be required to
mitigate the amount of any payment provided for in
Paragraph 16, Paragraph 17 or any other provision
of this Agreement, and no such
payment shall be reduced by any present value
factor or any other compensation or amount payable
to Executive by the Company or any other employer
or source, or for any other reason. The payments
provided by Paragraph 16 and Paragraph 17 are in
addition to, and not in lieu of, any other rights,
benefits or entitlements Executive may have under
the provisions of any other plan. It is the
expectation and agreement of the parties, in
consideration of the mutual promises herein, that
no amount payable hereunder shall be reduced by any
court or arbitrator, regardless of the legal theory
advanced.
19. Notice of Termination; Effect.
(a) Notice. Any purported
termination of this Agreement by the Company for
Cause or Disability or by Executive pursuant to
Paragraph 16(b) hereof shall be communicated by
written Notice of Termination to the other party
hereto. For purposes of this Agreement, a Notice
of Termination shall mean a notice which shall
indicate the specific termination provision in
this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances
claimed to provide a basis for termination under
the provision so indicated. No such purported
termination shall be effective if not effected
pursuant to a Notice of Termination satisfying the
requirements of this Paragraph 19.
(b) Effect. No termination of this
Agreement shall affect any right or obligation of
any party accrued prior thereto and, further, no
such termination shall affect the provisions of
Paragraph 10, 11, 12, 16, 17, 18, 19, 20, 21, 22
and 23 hereof, all of which shall remain in effect
notwithstanding any such termination.
20. Payment Obligations Absolute. The
Company's obligation during and after the term
hereof to pay or cause to be paid to Executive the
compensation and payments provided for in this
Agreement and to make the arrangements provided
herein shall be absolute and unconditional and
shall not be diminished, reduced or affected by
any circumstances, including,
<PAGE> 15
without limitation, any setoff, counterclaim,
recoupment, defense or other right which the
Company may have against Executive or anyone else.
All amounts payable by the Company hereunder shall
be paid without notice or demand. Each and every
payment made hereunder by the Company shall be
final.
21. Superseding Effect - Entire
Agreement. This Agreement supersedes any prior
agreements or understandings, oral or written,
between the parties with respect to the subject
matter hereof and constitutes the entire agreement
of the parties with respect thereto. No provision
of this Agreement (including this Paragraph 21)
may be waived, amended, or otherwise modified
except by a subsequent written agreement executed
by the parties hereto.
22. Venue; Expenses. Any action
concerning this Agreement may be brought in the
federal or state courts located in the County of
Milwaukee, Wisconsin, and each party consents to
the venue and jurisdiction of such courts. The
Company shall pay all legal fees and expenses
incurred by Executive in connection with or as a
result of termination following a Change in
Control (including any fees incurred in contesting
or disputing any termination). In addition, if a
dispute arises with respect to the Company's
obligations or Executive's rights under this
Agreement, or if any legal proceeding shall be
brought to enforce or interpret any provision
contained herein, or to recover damages for breach
hereof, or in the event of any other litigation
involving this Agreement, Executive shall recover
from the Company all attorneys' fees and costs and
disbursements incurred as a result of such dispute
or legal proceeding, regardless of the outcome,
plus prejudgment interest on any money judgement
obtained by the Executive, calculated at the rate
of interest announced by First Wisconsin National
Bank of Milwaukee from time-to-time as its prime
rate, plus 2.0%, from the date that payments to
Executive should have been made under this
Agreement.
23. Assignment; Binding Effect.
(a) This Agreement shall be binding
upon, and shall inure to the benefit of and be
enforceable by, the parties hereto and their
respective successors and assigns, provided that
(i) this Agreement is a personal service agreement
and no right hereunder may be assigned by
Executive except as contemplated by Paragraph
23(c) hereof and (ii) unless the Company shall
have complied with this Paragraph 23, no right
hereunder may be assigned or transferred by the
Company by operation of law or otherwise. Any
purported assignment or transfer in violation of
this Paragraph 23 shall be null and void.
(b) The Company will obtain from
any purchaser or other assignee or transferee of
or successor to all or substantially all of the
business or assets of the Company, (whether direct
or indirect, by purchase, merger, consolidation or
otherwise), an agreement in form and substance
satisfactory to Executive, to assume and agree to
perform this Agreement in the same manner and to
the same extent that the Company would be required
to perform it as if no such purchase had taken
place. As used in this Agreement, the term
Company shall mean Harnischfeger Industries,
Inc., as hereinbefore defined and any successor to
or purchaser,
<PAGE> 16
transferee or assignee of its business or assets.
The failure to obtain such an assumption within
sixty days following the closing of any such
purchase, assignment or transfer shall thereupon
immediately entitle Executive to invoke all rights
granted in Paragraph 16.
(c) This Agreement shall inure to
the benefit of and be enforceable by the personal
or legal representatives, executors,
administrators, successors, heirs, distributees,
devisees and legatees of Executive.
24. Withholding. The Company shall be
entitled to withhold from amounts to be paid to
Executive hereunder any federal, state or local
withholding or other taxes or charges which it is
from time-to-time required to withhold. The
Company shall be entitled to rely on an opinion of
counsel if any questions as to the amount or
requirement of any such withholding shall arise.
25. Invalidity. If a court shall
determine that any provision of this Agreement is
invalid or unenforceable as written, it is the
intention of the parties that such provision be
interpreted or judicially modified so as to enable
such provision to be enforced to the maximum
extent permissible. Any invalid or unenforceable
provision which cannot be so modified shall be
severed from this Agreement and shall not affect
the validity or enforceability of any other
provisions of this Agreement.
26. Notice. Notices given pursuant to
this Agreement shall be in writing and shall be
deemed given when received and if mailed, shall be
mailed by United States registered or certified
mail, return receipt requested, addressee only,
postage prepaid, if to the Company, to
Harnischfeger Industries, Inc., Attention:
Secretary, 13400 Bishops Lane, Brookfield,
Wisconsin 53005, or if to Executive, at the
address set forth below the Executive's signature
line of this Agreement, or to such other address
as the party to be notified shall have given in
writing to the other.
27. No Waiver. No waiver by either
party at any time of any breach by the other party
of, or compliance with, any condition or
provisions of this Agreement to be performed by
the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at
the same time or any prior or subsequent time.
28. Headings. The headings herein
contained are for reference only and shall not
affect the meaning or interpretation of any
provisions of this Agreement.
IN WITNESS WHEREOF, Executive has affixed
his hand hereto, and pursuant to due authorization
from its Board of Directors the Company has caused
this instrument to be executed by a duly
authorized officer thereof, as of the day and year
first above written.
<PAGE> 17
/s/Francis M. Corby, Jr.
------------------------
Francis M. Corby, Jr.
18960 Alta Vista Drive
Brookfield, WI 53045
HARNISCHFEGER INDUSTRIES, INC.
By /s/Jeffery T. Grade
--------------------
Chief Executive Officer and
Chairman of the Board
exhibit 10(k)
KEY EXECUTIVE
EMPLOYMENT AND SEVERANCE
AGREEMENT
This Agreement is made, entered into and
effective as of October 8, 1995 between K. Thor
Lundgren ( Executive ) and Harnischfeger
Industries, Inc., a Delaware corporation
("Company").
W I T N E S S E T H :
WHEREAS, the Company has determined it is in
the best interests of the Company and its
stockholders to assure that Executive is in a
position to objectively evaluate all proposals for
acquisition of the Company (recognizing that no
such proposal is pending) and has determined this
Agreement, including the severance provisions,
will assure such independent evaluation;
WHEREAS, the Company recognizes the need to
provide a level of compensation and relative
security that is competitive with that of other
publicly held companies and which provides the
necessary economic and performance incentives that
will be of benefit to Company stockholders in the
long term;
WHEREAS, in the event that Executive's
position is eliminated or his employment is
terminated as a result of an acquisition of the
Company it would be difficult to calculate the
losses and detriment which would be incurred by
Executive in such circumstances; and
WHEREAS, in view of Executive's intimate
knowledge of the business and affairs of Company
and his experience and demonstrated skill and
ability in performing services for Company and his
unique qualifications which are needed by the
Company, and to assure that Executive shall
continue to serve the Company;
WHEREAS, the Company requested an independent
review by its attorneys of the terms of this Key
Executive Employment And Severance Agreement
( Agreement ) and following such review its
attorneys have recommended certain amendments to
this Agreement; and
WHEREAS, the Company s Human Resources
Committee has reviewed such proposed amendments
with such attorneys and has determined such
amendments to be necessary and appropriate and the
Board of Directors of the Company ( Board ) has
further approved such amendments;
In consideration of each of the specific
premises set forth above and in further
consideration of the mutual agreements set forth
herein, the parties agree as follows:
<PAGE> 2
1. Employment by the Company of Executive
and Acceptance
by Executive. The Company hereby employs
Executive during the term of this Agreement in
such capacities and upon such conditions
concerning rates of compensation, benefits and
other matters as are hereinafter stated.
Executive hereby accepts such employment and
agrees faithfully, diligently and to the best of
his ability to discharge the responsibilities of
the offices which he shall, as provided herein,
occupy.
2. Capacity. Executive shall be employed
during the term of this Agreement as Executive
Vice President Law and Government Affairs,
Secretary and General Counsel of the Company with
such duties, functions, responsibilities and
authority which are commensurate with and
appropriate for such positions and as are from
time-to-time set forth in the Bylaws of the
Company and otherwise delegated to Executive by
the Chief Executive Officer or the Board of
Directors of the Company; provided that such
duties, functions and responsibilities shall not
be materially changed, without Executive's
consent, from such duties, functions and
responsibilities as are currently performed and
enjoyed by Executive. Executive shall be a full-
time employee of the Company and shall devote his
best efforts to the performance and fulfillment of
such duties, functions and responsibilities;
provided that Executive shall be permitted such
vacations and other time off as are consistent
with his position and period of service and the
general rules and practices of the Company in that
regard, it being understood for this purpose that
such rules and practices shall not be materially
less favorable to Executive than those presently
in effect.
3. Place of Employment; Moving. While it is
recognized that the performance of Executive's
duties hereunder will occasionally require
Executive to travel on behalf of the Company, the
principal office of Executive and the principal
place for performance by him of his services
hereunder shall be in the Milwaukee, Wisconsin
metropolitan area, and Executive shall not,
without his consent, be required to perform the
principal portion of his services hereunder
outside of such area. However, the Company may
require from time-to-time that Executive perform
such services outside the Milwaukee, Wisconsin
metropolitan area as are required for the proper
performance by him of his duties during any
reasonable period or periods, but, unless the
consent of Executive is obtained, such periods
shall not exceed in the aggregate two months
during any twelve-month period. If Executive
shall consent to carry out his duties hereunder at
some place other than the Milwaukee, Wisconsin
metropolitan area, and, as a result thereof, it
shall be or become necessary for Executive to move
his place of residence, the Company shall
reimburse Executive under the terms of the
Company's employee relocation assistance plan in
effect as of the date of this Agreement or, if
more favorable to Executive, under the terms of
any such practice adopted by the Company in the
future.
4. Term. Subject to the other provisions of
this Agreement, the term of this Agreement and
Executive's employment hereunder shall be deemed
to have commenced on the date of this Agreement
and shall continue for a period of three years
thereafter or, if earlier, until Executive reaches
age 65 or until his death or Disability (as
hereafter defined), whichever occurs first.
Subject to the other provisions of this Agreement,
commencing on the first
<PAGE> 3
anniversary of this Agreement and on each
anniversary thereafter, the term of this Agreement
and Executive's employment hereunder shall, unless
Executive has reached age 62 or died or become
"Disabled" (as hereinafter defined) before such
date, be automatically extended for a period of
one additional year unless at least thirty days
prior to such date Executive shall notify the
Company in writing that Executive does not extend
the term of this Agreement or the Company notifies
Executive that, for Cause (as hereafter defined),
the Company does not extend the term of this
Agreement, which notice shall be in writing and
set forth the grounds for Cause. Notwithstanding
the foregoing but subject to Executive's right to
terminate his employment for Good Reason (as
hereafter defined), in the event of a Potential
Change in Control (as hereafter defined) or a
Change in Control (as hereafter defined) Executive
will not terminate employment with the Company
until the earliest of (i) a date which is twelve
months from the occurrence of such Potential
Change in Control, (ii) the termination of
Executive's employment due to Disability or
retirement at age 65 or (iii) a date which is
twelve months from the occurrence of such Change
in Control. In the event of a Change In Control,
the term of this Agreement shall be extended for
three years from the date of such Change In
Control and there shall be no further extension of
the term. The provisions of this Agreement, if
extended, shall be identical to those of this
Agreement as in effect immediately prior to such
extension except that the annual base salary
provided for herein shall be equal to the annual
rate of base salary currently being paid to
Executive immediately preceding the date on which
such extension becomes effective.
5. Change in Control. For the purposes of
this Agreement, a Change in Control shall mean:
(a) The acquisition by any individual,
entity or group (within the meaning of Section l3
(d) (3) or l4 (d) (2) of the Securities Exchange
Act of l934, as amended (the Exchange Act )) (a
Person ) of beneficial ownership (within the
meaning of Rule l3d-3 promulgated under the
Exchange Act) of 20% or more of either (i) the
then outstanding shares of common stock of the
Company (the Outstanding Company Common Stock )
or (ii) the combined voting power of the then
outstanding voting securities of the Company
entitled to vote generally in the election of
directors (the Outstanding Company Voting
Securities ); provided, however, that for purposes
of this subsection (a), the following acquisitions
shall not constitute a Change in Control: (i) any
acquisition by the Company, (ii) any acquisition
by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any
corporation controlled by the Company or (iii) any
acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii)
and (iii) of subsection c; or
(b) Individuals who, as of the date
hereof, constitute the Board (the Incumbent
Board ) cease for any reason to constitute at
least a majority of the Board; provided, however,
that any individual becoming a director subsequent
to the date hereof whose election, or nomination
for election by the Company s shareholders, was
approved by a vote of at least two-thirds (2/3) of
the directors then comprising the Incumbent Board
shall be considered as though such individual were
a member of the Incumbent Board, but excluding,
<PAGE> 4
for this purpose, any such individual whose
initial assumption of office occurs as a result of
an actual or threatened election contest with
respect to the election or removal of directors or
any other actual or threatened solicitation of
proxies or consents by or on behalf of a Person
other than the Board; or
(c) Consummation of a reorganization,
merger or consolidation or a sale or other
disposition of all or substantially all of the
assets of the Company (a Business Combination )
in each case, unless, following such Business
Combination, (i) all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination
beneficially own, directly or indirectly, more
than 80% of, respectively, the then outstanding
shares of common stock and the combined voting
power of the then outstanding voting securities
entitled to vote generally in the election of
directors, as the case may be, of the corporation
resulting from such Business Combination
(including, without limitation, a corporation
which as a result of such transaction owns the
Company or all or substantially all of the
Company s assets either directly or through one or
more subsidiaries) in substantially the same
proportions as their ownership, immediately prior
to such Business Combination, of the Outstanding
Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from
such Business Combination or any employee benefit
plan (or related trust) of the Company or such
corporation resulting from such Business
Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the
corporation resulting from such Business
Combination or the combined voting power of the
then outstanding voting securities of such
corporation except to the extent that such
ownership existed prior to the Business
Combination and (iii) at least two-thirds (2/3) of
the members of the board of directors of the
corporation resulting from such Business
Combination were members of the Incumbent Board at
the time of the execution of the initial
agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the shareholders of the
Company of a complete liquidation or dissolution
of the Company.
.
6. Potential Change in Control. One or more
of the following shall constitute and be defined
as a Potential Change in Control :
(a) the Company enters into an
agreement, the consummation of which would result
in the occurrence of a Change in Control; or
(b) any Person (other than a trustee
or other fiduciary holding securities under an
employee benefit plan of the Company or a
corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the
same proportions as their ownership of stock of
the Company) who is or becomes the Beneficial
Owner, directly or indirectly, of 9.5% or
<PAGE> 5
more of the Outstanding Company Common Stock or
Outstanding Company Voting Securities, increases
his beneficial ownership of such stock or
securities by 5% or more over the percentage so
owned by such Person; or
(c) the Board of Directors adopts a
resolution to the effect that, for purposes of
this Agreement, a Potential Change In Control has
occurred.
For all purposes of this Agreement, if the
facts giving rise to a Potential Change in Control
cease to exist without any Change in Control
having occurred, the provisions of this Agreement
which are triggered by such Potential Change in
Control shall no longer be effective unless
another Potential Change in Control or any Change
in Control occurs.
7. Salary Compensation. As salary
compensation to Executive for his performance of
the services to be rendered hereunder and for his
acceptance of the responsibilities described
herein and for his performance of all the usual
obligations of employment, the Company agrees to
pay to Executive, and Executive agrees to accept,
during the term of this Agreement an annual base
salary of not less than $250,920 per year or such
greater amount as the Board of Directors may from
time-to-time determine, payable in equal semi--
monthly installments. At least annually the Board
of Directors of the Company, or the Human
Resources Committee or such other committee to
which the Board may have delegated such authority,
shall review such base salary to determine whether
it should be increased on the basis of Executive's
performance, that of the Company, or other
circumstances then prevailing. The results of
each review shall be communicated to and discussed
with Executive by the Chief Executive Officer or
Board of Directors or such Committee.
8. Bonus and Incentive Compensation. In
addition to the salary compensation payable to
Executive as provided in Paragraph 7 hereof,
Executive shall be entitled during the term of
this Agreement to receive such bonus and incentive
compensation each year as may be awarded by the
Human Resources Committee (or other appropriate
committee) of the Board of Directors of the
Company pursuant to the Company's bonus, incentive
compensation and similar plans as are presently in
effect or as may hereafter be adopted or amended.
8A. Salary, Bonus and Other Compensation
Following a Change In Control. Upon the
occurrence of a Change in Control, Executive shall
be entitled, at a minimum, to the following in
each year that Executive remains employed by the
Company: (a) an annual base salary of no less than
that paid immediately prior to such Change in
Control plus a minimum annual salary increase, on
each anniversary of this Agreement, equal to the
cumulative change in the Consumer Price Index; (b)
bonus and incentive compensation (including both
cash and stock components) each year of no less
than the greater of (i) the amount of bonus and
incentive compensation received in the year
immediately prior to such Change in Control or
(ii) in the event Executive was promised or led to
expect bonus and/or incentive compensation under
any plans based upon the achievement of financial,
operating or personal targets or goals, the
<PAGE> 6
amount that would have been payable to Executive
as if such targets or goals were met for the year
in question ( Par Bonus ); (c) pension benefits,
supplemental retirement benefits, deferred
compensation and salaried continuation plans,
incentive stock awards, stock option plans,
medical, health, life, accident and disability
insurance plans and programs, auto and business
expense reimbursements, vacations and other
benefits of not less than the type and amount paid
or granted to Executive immediately prior to such
Change in Control; (d) office space and
secretarial services equivalent to those existing
immediately prior to such Change in Control.
9. Further Benefits. In addition to the
compensation provided in Paragraph 7 and Paragraph
8 hereof, Executive shall, during the term of this
Agreement (and thereafter to the extent provided
herein or in such plans), be covered by all
applicable Company pension and retirement plans,
insurance and death benefits in effect for all
salaried employees, together with any future
improvements in such plans and benefits. In
addition, Executive shall be entitled during the
term of this Agreement (and thereafter to the
extent provided for herein or in any such plan) to
receive such other and further benefits,
including, without limitation, benefits under
stock option plans, supplemental retirement plans,
performance unit plans, deferred compensation and
salary continuation plans, medical, health, life,
accident and disability insurance programs,
pension benefits, vacations, expense
reimbursements and any and all other benefits as
shall be generally made applicable to key
executive employees of the Company, and such
additional benefits, as may be granted to him from
time-to-time by the Board of Directors of the
Company or the appropriate committee thereof.
10. Covenant Against Competition. Except as
hereafter provided, executive agrees that at all
times during the term of this Agreement and for a
period of one year following the date on which
Executive's employment is terminated, Executive
will not, without the prior written approval of
the Board of Directors of the Company, directly or
indirectly, as owner, partner, officer or
employee, engage in any business which is
substantially competitive with any business
then actively conducted by the Company or by any
of its subsidiaries, or undertake to consult with
or advise any such competitive business, or
otherwise, directly or indirectly, engage in any
activity which is substantially competitive with
or in any way adversely and substantially
affecting any activity of the Company or any of
its subsidiaries, provided, however, that
ownership by Executive of not more than 5% of the
outstanding shares of stock of any such business
listed on any national stock exchange or quoted on
an automated quotation system, or of not more than
15% of the stock of any such business not so
listed or quoted, shall not be deemed a violation
of this covenant. In the event of the occurrence
of a Change in Control the covenant against
competition contained in this paragraph shall be
void and not applicable.
11. Confidentiality and Proprietary
Information. Executive agrees to be bound by the
provisions of the Employee Proprietary Rights and
Confidentiality Agreement attached hereto as
Exhibit "A and incorporated herein. The
provisions of such agreement supplement and are in
addition to Executive's obligations under this
Agreement.
<PAGE> 7
12. Certain Remedies. If Executive commits a
breach or threatens to commit a breach of any of
the provisions of Paragraph 10 hereof or the
agreement described in Paragraph 11, the Company
shall have the right and remedy, in addition to
any other remedy that may be available, at law or
in equity, to have the provisions of Paragraph 10
and the agreement described in Paragraph ll
specifically enforced by any court having equity
jurisdiction together with an accounting for any
damages sustained, it being acknowledged and
agreed that any such breach or threatened breach
will cause irreparable injury to the Company and
that money damages will not provide an adequate
remedy to the Company. Such an injunction shall
be available without the posting of any bond or
other security, and Executive hereby consents to
the issuance of such injunction.
If any covenant contained in Paragraph 10 or
the agreement described in Paragraph 11, or any
part thereof, is hereafter construed to be invalid
or unenforceable, the same shall not affect the
remainder of the covenant or covenants, which
shall be given full effect, without regard to the
invalid portions, and any court having
jurisdiction shall have the power to reduce the
duration and/or area of such covenant and, in its
reduced form, said covenant shall then be
enforceable.
13. Disability. Employee shall be considered
disabled (or a Disability shall have occurred)
in the event Executive is unable to perform his
services under this Agreement for a continuous
period of six months by reason of his physical or
mental illness or incapacity. If there is any
dispute as to whether Executive is or was
physically or mentally unable to perform his
duties under this Agreement, such question shall
be submitted to a licensed physician agreed to by
Executive (or any legal guardian lawfully
appointed) and the Company, or, if they are unable
to so agree, appointed by the President of the
Medical Society of Milwaukee County, Wisconsin at
the request of either Executive (or such guardian)
or the Company. Executive shall submit to such
examinations and provide such information as such
physician may reasonably request and the
determination of such physician as to Executive's
physical or mental condition shall be binding and
conclusive upon Executive and the Company. If
Executive shall become Disabled, in lieu of any
further salary or other compensation provided for
in Paragraph 7 and Paragraph 8 hereof (except to
the extent that such salary or other compensation
was earned but not paid prior to Disability), the
Company shall thereafter pay to Executive the
benefits under the Company's short-term disability
plan as long as applicable and then the Company's
long-term disability plan in effect at the date of
this Agreement, together with any improvements in
said plans in the future which provide additional
or more favorable benefits to Executive.
14. Prior Service Credit. Executive is hereby
granted credit, for purposes of the Company's
pension plans, for the years of continuous
employment with Executive's immediate prior
employer, Michael Best & Friedrich. However, any
payments under the Company's pension plans to
Executive shall be reduced by any pension or
similar benefits payable to Executive by such
prior employer.
15. Termination by Company.
<PAGE> 8
(a) The Company shall have the right
to terminate this Agreement (and Executive's
employment) only upon the death or Disability of
Executive or for Cause. For purpose of this
Agreement, Cause shall mean (i) Executive's
willful and continued failure to substantially
perform the reasonably assigned duties with the
Company which are consistent with Executive s
position and job description referred to in this
Agreement and, in the event of a Change in
Control, those duties assigned prior to the Change
in Control, other than any such failure resulting
from incapacity due to physical or mental illness,
after a written demand for substantial performance
is delivered to Executive by the Board of
Directors of the Company which specifically
identifies the manner in which Executive has not
substantially performed the assigned duties, or
(ii) Executive's willful engagement in illegal
conduct which is materially and demonstrably
injurious to the Company. For purposes of this
paragraph, no act, or failure to act, on
Executive's part shall be considered willful
unless done, or omitted to be done, in knowing bad
faith and without reasonable belief that the
action or omission was in, or not opposed to, the
best interests of the Company. Any act, or
failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board
of Directors or based upon the advise of counsel
for the Company shall be conclusively presumed to
be done, or omitted to be done, in good faith and
in the best interests of the Company.
Notwithstanding the foregoing, Executive shall not
be deemed to have been terminated for Cause unless
and until there shall have been delivered to him a
copy of a resolution, duly adopted by the
affirmative vote of not less than three-quarters
of the entire membership of the Board of Directors
at a meeting of the Board called and held for such
purpose (after reasonable notice to Executive and
an opportunity for Executive, together with his
counsel, to be heard before the Board), finding
that in the good faith opinion of the Board of
Directors Executive was guilty of the conduct set
forth above in (i) or (ii) of this paragraph and
specifying the particulars thereof in detail.
(b) Forfeiture. If Executive is
terminated for Cause pursuant to Paragraph 15,
Executive shall be entitled to receive only the
Accrued Benefits described in Paragraph 16(c)(i).
16. Termination of this Agreement by
Executive in Certain Circumstances.
(a) Voluntary Termination. Subject
to the restrictions in Paragraph 4, Executive may
terminate this Agreement other than for Good
Reason (as hereinafter defined) upon 30 days prior
written notice to the Company. Upon such
termination, Executive shall be entitled to
receive only the Accrued Benefits described in
Paragraph 16(c)(i).
(b) Termination by Executive for
Good Reason. Executive may terminate his
employment under this Agreement for Good Reason at
any time during the term hereof unless this
Agreement has previously expired or been
terminated by reason of (i) the death or
Disability of Executive, (ii) attainment by
Executive of age 65, (iii) termination of this
Agreement by the Company for Cause, or (iv)
voluntary termination of this Agreement by
Executive other than for Good Reason. Termination
by Executive for Good Reason shall mean
termination by Executive of his employment
hereunder (1) for any reason within the twelve
(12) months following the expiration of the
committed employment period specified in
<PAGE> 9
Paragraph 4(i), (ii) or (iii) hereof (provided a
Change in Control has occurred), or (2) because
of:
(a) the assignment to Executive without
his express written consent of any duties or
functions inconsistent with his present positions,
duties, responsibilities, authority and status
with the Company, or a change in his present
reporting responsibilities, titles or offices, or
any removal of Executive from, or any failure to
re-elect Executive to, any of such positions; or
(b) failure to provide Executive with the
bonus and incentive compensation required by
Paragraph 8A(b) of this Agreement or the exclusion
of Executive from any management, incentive
compensation or bonus programs maintained by the
Company from time-to-time in its discretion and of
a type in which Executive participated at the
inception of this Agreement or in which key
executives in general participate; or
(c) the failure by the Company to provide
or maintain the benefits described in Paragraph
8A(c) and (d) of this Agreement or the failure by
the Company to maintain the deferred compensation
plans, pension and retirement plans (including
supplemental retirement plans), life insurance and
other fringe benefit plans maintained by the
Company at the inception of this Agreement; or
(d) the failure by the Company to obtain
the assumption of this Agreement by any successor
or assign of the Company; or
(e) the failure by the Company to pay the
annual base salary and annual increases required
by Paragraph 8A(a) of this Agreement or any
reduction in the base salary currently being paid
to Executive; or
(f) any other material breach by the
Company of any of the terms of this
Agreement; or
(g) any purported termination by the
Company of this Agreement or Executive's
employment hereunder which is not effected
pursuant to a Notice of Termination (as
hereinafter defined) and which does not
satisfy the requirements of Paragraph 15
hereof.
(c) Termination Payments. Upon any
termination by Executive of his employment under
this Agreement pursuant to Paragraph 16(b), or
upon any termination of Executive's employment by
the Company during the term hereof other than for
Cause, Disability or death, the Company shall
forthwith:
(i) pay to Executive in cash the
following accrued benefits ( Accrued Benefits )
(a) all salary earned or accrued through the
termination date; (b)
<PAGE> 10
reimburse Executive for any and all monies
advanced in connection with Executive's employment
for reasonable and necessary expenses incurred by
Executive through the termination date; (c) pay
any and all bonus, cash and other benefits
previously earned through the termination date and
deferred at the election of Executive or pursuant
to any deferred compensation plans then in effect;
(d) make a pro rata (based upon the portion of
such fiscal year that Executive was an employee of
the Company) lump sum payment of any bonus and
incentive compensation (including both cash and
stock components) otherwise payable to Executive
with respect to the year in which termination
occurs under any bonus and incentive plan(s) in
which Executive is a participant; and (e) pay all
other amounts and benefits to which Executive may
be entitled under the terms of any benefit plan of
the Company. Payment of amounts other than those
described in subsections (d) and (e) hereof shall
be made within 10 days after the termination date.
Payment of amounts under subsections (d) and (e)
hereof shall be made pursuant to the terms of any
such plans either by the Company or a trust
implementing such plan; plus
(ii) pay to Executive in cash in a lump
sum an amount equal to the product of three (3)
(or, if less, the whole number of years (rounded
upward) remaining, at the time of such
termination, until Executive would attain age 65)
times the sum of (1) the annual base salary
payable to Executive hereunder immediately prior
to such termination plus (2) the greater of the
average annual amount to which Executive became
entitled (whether paid, payable or deferred) under
all bonus, incentive compensation and other
plan(s) of the Company during the three years (or
number of years that Executive participated
therein, if less) preceding such termination or
the Par Bonus; and
(iii) to the extent permissible under
the applicable plans, take all actions necessary
to cause all restricted stock, stock options and
any accompanying stock appreciation rights to
become automatically vested and exercisable upon
such termination; plus
(iv) in addition to the retirement
benefits to which Executive is entitled under the
Company's retirement plan(s) or any successor
plans thereto, the Company shall pay to Executive
not later than the tenth day following the
termination date, a lump sum, in cash, equal to
the actuarial equivalent of the excess of (a) the
retirement pension (determined as a straight life
annuity commencing at age 65) which Executive
would have accrued under the terms of the
Company's retirement plan (without regard to the
limitations imposed by section 415 of the Internal
Revenue Code of 1954, as amended (the Code ), or
any amendment to the retirement plan made
subsequent to a Change in Control of the Company
and on or prior to the termination date, which
amendment adversely affects in any manner the
computation of retirement benefits thereunder),
determined as if Executive had
<PAGE> 11
rendered (after the termination date) three
additional years of credited service thereunder,
and as if Executive had accumulated three
additional calendar years of compensation (for
purposes of determining Monthly Compensation as
defined in the Company's retirement plan), each in
an amount equal to the amount for the highest
calendar year out of the final ten calendar years
preceding the termination date, but in no event
shall Executive be deemed to have accumulated
additional credited service after Executive's 65th
birthday, over (b) the retirement pension
(determined as a straight life annuity commencing
at age 65), which Executive had then accrued
pursuant to the provisions of the Company's
retirement plan(s). For purposes of this
Subsection, actuarial equivalent shall be
determined using the same methods and assumptions
utilized under the Company's retirement plan(s)
immediately prior to the Change in Control of the
Company. Provided, however, that to the extent
that all or a portion of such amount is payable
pursuant to any other arrangement established by
the Company, the amount to which Executive shall
be entitled pursuant to this Subsection shall be
reduced by such amount; and
(v) pay Executive in cash for any
vacation time earned but not taken at the
termination date, at an hourly rate equal to the
annual base salary as in effect immediately prior
to the termination date divided by 2080.
Notwithstanding any other provisions of this
Agreement, for purposes of the Company's salaried
pension plan and its medical, health, life,
accident and disability insurance programs,
Executive shall, in the event of any termination
which entitles Executive to the payments described
in Paragraph 16(c) hereof, be considered and
deemed, for a period of 3 years following such
termination or until Executive attains the age of
65 or until reasonably equivalent benefits are
paid or extended by a new employer, whichever
first occurs, to be a full-time employee of the
Company and be entitled to all benefits, rights
and privileges thereunder. If at the end of three
years Executive has not attained the age of 65 or
has not previously received or is not then
receiving equivalent benefits from a new employer,
the Company shall arrange, at its sole cost and
expense, to enable Executive to convert the
coverage under such policies to equivalent
individual policies. To the extent necessary for
application of this paragraph, Executive's annual
compensation during the aforesaid period shall be
deemed to be equal to the amount described in
Paragraph 16(c)(ii)(1) plus the amount described
in Paragraph 16(c)(ii)(2).
17. Tax Protection. (a) Anything in
this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall
be determined that any payment or distribution by
the Company to or for the benefit of the Executive
(whether paid or payable or distributed or
distributable pursuant to the terms of this
Agreement or otherwise, but determined without
regard to any additional payments required under
this Section l7) (a Payment ) would be subject to
the excise tax imposed by Section 4999 of the Code
(or any amendments thereof or any similar tax that
may be imposed, and regulations thereunder) or any
interest or penalties are incurred by the
Executive with respect to such excise tax (such
excise tax, together with any such interest and
penalties, are hereinafter collectively referred
to as the Excise Tax ), then the Executive shall
<PAGE> 12
be entitled to receive an additional payment (a
Gross-Up Payment ) in an amount such that after
payment by the Executive of all taxes (including
any interest or penalties imposed with respect to
such taxes), including, without limitation, any
income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this
Section l7 (a), if it shall be determined that the
Executive is entitled to a Gross-Up Payment, but
that the Executive, after taking into account the
Payments and the Gross-Up Payment, would not
receive a net after-tax benefit of at least
$l0,000 (taking into account both income taxes and
any Excise Tax) as compared to the net after-tax
proceeds to the Executive resulting from an
elimination of the Gross-Up Payment and a
reduction of the Payments, in the aggregate, to an
amount ( the Reduced Amount ) such that the
receipt of Payments would not give rise to any
Excise Tax, then no Gross-Up Payment shall be made
to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section
l7(c), all determinations required to be made
under this Section l7, including whether and when
a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall
be made by Price Waterhouse or such other
nationally recognized certified public accounting
firm as may be designated by the Executive (the
Accounting Firm ) which shall provide detailed
supporting calculations both to the Company and
the Executive within l5 business days of the
receipt of notice from the Executive that there
has been a Payment, or such earlier time as is
requested by the Company. In the event that the
Accounting Firm is serving as accountant or
auditor for the individual, entity or group
effecting the Change in Control, the Executive
shall appoint another nationally recognized
accounting firm to make the determinations
required hereunder (which accounting firm shall
then be referred to as the Accounting Firm
hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined
pursuant to this Section l7, shall be paid by the
Company to the Executive within five days of the
receipt of the Accounting Firm s determination.
Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a
result of the uncertainty in the application of
Section 4999 of the Code at the time of the
initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments
which will not have been made by the Company
should have been made ( Underpayment ), consistent
with the calculations required to be made
hereunder. In the event that the Company exhausts
its remedies pursuant to Section l7(c) and the
Executive thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has
occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit
of the Executive.
(c) The Executive shall notify the
Company in writing of any claim by the Internal
Revenue Service that, if successful, would require
the payment by the Company of the Gross-Up
Payment. Such notification shall be given as soon
as practicable but no later than ten business days
after the Executive is informed in writing of such
claim and shall apprise the Company of the nature
of such claim and the date on which such claim is
requested to be paid.
<PAGE> 13
The Executive shall not pay such claim prior to
the expiration of the 30-day period following the
date on which Executive gives such notice to the
Company (or such shorter period ending on the date
that any payment of taxes with respect to such
claim is due). If the Company notifies the
Executive in writing prior to the expiration of
such period that it desires to contest such claim,
the Executive shall:
(i) give the Company any
information reasonably requested by the Company
relating to such claim,
(ii) take such action in connection
with contesting such claim as the Company shall
reasonably request in writing from time-to-time,
including, without limitation, accepting legal
representation with respect to such claim by an
attorney reasonably selected by the Company,
(iii) cooperate with the Company in
good faith in order effectively to contest such
claim, and
(iv) permit the Company to
participate in any proceedings relating to such
claim;
provided, however, that the Company shall bear and
pay directly all costs and expenses (including
additional interest and penalties) incurred in
connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto)
imposed as a result of such representation and
payment of costs and expenses. Without limitation
on the foregoing provisions of this Section l7(c),
the Company shall control all proceedings taken in
connection with such contest and, at its sole
option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect
of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any
permissible manner, and the Executive agrees to
prosecute such contest to a determination before
any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however,
that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall
advance the amount of such payment to the
Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect
thereto) imposed with respect to such advance; or
with respect to any imputed income with respect to
such advance; and further provided that any
extension of the statute of limitations relating
to payment of taxes for the taxable year of the
Executive with respect to which such contested
amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company s
control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue
Service or any other taxing authority.
<PAGE> 14
(d) If, after the receipt by the
Executive of an amount advanced by the Company
pursuant to Section l7(c), the Executive becomes
entitled to receive any refund with respect to
such claim, the Executive shall (subject to the
Company s complying with the requirements of
Section l7(c)) promptly pay to the Company the
amount of such refund (together with any interest
paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to
Section l7(c), a determination is made that the
Executive shall not be entitled to any refund with
respect to such claim and the Company does not
notify the Executive in writing of its intent to
contest such denial of refund prior to the
expiration of 30 days after such determination,
then such advance shall be forgiven and shall not
be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.
(e) It is the intent of this provision to
avoid any diminution in payments to which
Executive is entitled under this Agreement by
virtue of the imposition of any excise or
similar taxes (excluding income taxes) and to make
Executive whole should any such taxes be imposed.
18. No
Diminution of Payments. Executive shall not be
required to mitigate the amount of any payment
provided for in Paragraph 16, Paragraph 17 or any
other provision of this Agreement, and no such
payment shall be reduced by any present value
factor or any other compensation or amount payable
to Executive by the Company or any other employer
or source, or for any other reason. The payments
provided by Paragraph 16 and Paragraph 17 are in
addition to, and not in lieu of, any other rights,
benefits or entitlements Executive may have under
the provisions of any other plan. It is the
expectation and agreement of the parties, in
consideration of the mutual promises herein, that
no amount payable hereunder shall be reduced by
any court or arbitrator, regardless of the legal
theory advanced.
19. Notice of Termination; Effect.
(a) Notice. Any purported
termination of this Agreement by the Company for
Cause or Disability or by Executive pursuant to
Paragraph 16(b) hereof shall be communicated by
written Notice of Termination to the other party
hereto. For purposes of this Agreement, a Notice
of Termination shall mean a notice which shall
indicate the specific termination provision in
this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances
claimed to provide a basis for termination under
the provision so indicated. No such purported
termination shall be effective if not effected
pursuant to a Notice of Termination satisfying the
requirements of this Paragraph 19.
(b) Effect. No termination of this
Agreement shall affect any right or obligation of
any party accrued prior thereto and, further, no
such termination shall affect the provisions of
Paragraph 10, 11, 12, 16, 17, 18, 19, 20, 21, 22
and 23 hereof, all of which shall remain in effect
notwithstanding any such termination.
<PAGE> 15
20. Payment Obligations Absolute. The
Company's obligation during and after the term
hereof to pay or cause to be paid to Executive the
compensation and payments provided for in this
Agreement and to make the arrangements provided
herein shall be absolute and unconditional and
shall not be diminished, reduced or affected by
any circumstances, including, without limitation,
any setoff, counterclaim, recoupment, defense or
other right which the Company may have against
Executive or anyone else. All amounts payable by
the Company hereunder shall be paid without notice
or demand. Each and every payment made hereunder
by the Company shall be final.
21. Superseding Effect - Entire
Agreement. This Agreement supersedes any prior
agreements or understandings, oral or written,
between the parties with respect to the subject
matter hereof and constitutes the entire agreement
of the parties with respect thereto. No provision
of this Agreement (including this Paragraph 21)
may be waived, amended, or otherwise modified
except by a subsequent written agreement executed
by the parties hereto.
22. Venue; Expenses. Any action
concerning this Agreement may be brought in the
federal or state courts located in the County of
Milwaukee, Wisconsin, and each party consents to
the venue and jurisdiction of such courts. The
Company shall pay all legal fees and expenses
incurred by Executive in connection with or as a
result of termination following a Change in
Control (including any fees incurred in contesting
or disputing any termination). In addition, if a
dispute arises with respect to the Company's
obligations or Executive's rights under this
Agreement, or if any legal proceeding shall be
brought to enforce or interpret any provision
contained herein, or to recover damages for breach
hereof, or in the event of any other litigation
involving this Agreement, Executive shall recover
from the Company all attorneys' fees and costs and
disbursements incurred as a result of such dispute
or legal proceeding, regardless of the outcome,
plus prejudgment interest on any money judgement
obtained by the Executive, calculated at the rate
of interest announced by First Wisconsin National
Bank of Milwaukee from time-to-time as its prime
rate, plus 2.0%, from the date that payments to
Executive should have been made under this
Agreement.
23. Assignment; Binding Effect.
(a) This Agreement shall be binding
upon, and shall inure to the benefit of and be
enforceable by, the parties hereto and their
respective successors and assigns, provided that
(i) this Agreement is a personal service agreement
and no right hereunder may be assigned by
Executive except as contemplated by Paragraph
23(c) hereof and (ii) unless the Company shall
have complied with this Paragraph 23, no right
hereunder may be assigned or transferred by the
Company by operation of law or otherwise. Any
purported assignment or transfer in violation of
this Paragraph 23 shall be null and void.
(b) The Company will obtain from
any purchaser or other assignee or transferee of
or successor to all or substantially all of the
business or assets of the Company, (whether direct
or indirect, by purchase, merger, consolidation or
otherwise), an agreement in form and
<PAGE> 16
substance satisfactory to Executive, to assume and
agree to perform this Agreement in the same manner
and to the same extent that the Company would be
required to perform it as if no such purchase had
taken place. As used in this Agreement, the term
Company shall mean Harnischfeger Industries,
Inc., as hereinbefore defined and any successor to
or purchaser, transferee or assignee of its
business or assets. The failure to obtain such an
assumption within sixty days following the closing
of any such purchase, assignment or transfer shall
thereupon immediately entitle Executive to invoke
all rights granted in Paragraph 16.
(c) This Agreement shall inure to
the benefit of and be enforceable by the personal
or legal representatives, executors,
administrators, successors, heirs, distributees,
devisees and legatees of Executive.
24. Withholding. The Company shall be
entitled to withhold from amounts to be paid to
Executive hereunder any federal, state or local
withholding or other taxes or charges which it is
from time-to-time required to withhold. The
Company shall be entitled to rely on an opinion of
counsel if any questions as to the amount or
requirement of any such withholding shall arise.
25. Invalidity. If a court shall
determine that any provision of this Agreement is
invalid or unenforceable as written, it is the
intention of the parties that such provision be
interpreted or judicially modified so as to enable
such provision to be enforced to the maximum
extent permissible. Any invalid or unenforceable
provision which cannot be so modified shall be
severed from this Agreement and shall not affect
the validity or enforceability of any other
provisions of this Agreement.
26. Notice. Notices given pursuant to
this Agreement shall be in writing and shall be
deemed given when received and if mailed, shall be
mailed by United States registered or certified
mail, return receipt requested, addressee only,
postage prepaid, if to the Company, to
Harnischfeger Industries, Inc., Attention:
Secretary, 13400 Bishops Lane, Brookfield,
Wisconsin 53005, or if to Executive, at the
address set forth below the Executive's signature
line of this Agreement, or to such other address
as the party to be notified shall have given in
writing to the other.
27. No Waiver. No waiver by either
party at any time of any breach by the other party
of, or compliance with, any condition or
provisions of this Agreement to be performed by
the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at
the same time or any prior or subsequent time.
28. Headings. The headings herein
contained are for reference only and shall not
affect the meaning or interpretation of any
provisions of this Agreement.
IN WITNESS WHEREOF, Executive has affixed
his hand hereto, and pursuant to due authorization
from its Board of Directors the Company has caused
this instrument to be
<PAGE> 17
executed by a duly authorized officer thereof, as
of the day and year first above written.
/s/K. Thor Lundgren
--------------------
K. Thor Lundgren
9911 Corey Lane
Mequon, WI 53092
HARNISCHFEGER INDUSTRIES, INC.
By /s/Jeffery T. Grade
--------------------
Chief Executive Officer and
Chairman of the Board
Exhibit 10(l)
INDEPENDENT CONSULTANT
----------------------
AGREEMENT
----------
This Agreement is made and entered into by and
between John A. McKay ("McKay") and Harnischfeger
Industries, Inc. ("Harnischfeger") in order to set
forth the terms of the consultancy arrangement
between the parties.
WHEREAS: Harnischfeger is desirous of securing
McKay's services as a consultant for a period of
two (2) years beginning November 1, 1995 and
ending October 31, 1997; and
WHEREAS: McKay desires to perform consulting
services for Harnischfeger for a period of two (2)
years beginning November 1, 1995 and ending
October 31, 1997;
NOW THEREFORE, the parties agree as follows:
1.McKay will serve as a consultant to
Harnischfeger as assigned by Harnischfeger's Chief
Executive Officer. The total number of hours of
service provided by McKay as a consultant shall
not exceed 500 hours per year of the two year
agreement.
2.As full consideration for the services to be
rendered by McKay to Harnischfeger, McKay shall be
paid $29,225 per month, less any deductions,
withholdings or payments which are required by law
for taxes and similar charges.
3.Harnischfeger agrees to reimburse McKay for any
expenses reasonably incurred by McKay in
performing the services requested by the Chief
Executive Officer. These expenses shall be
reimbursed in accordance with Harnischfeger's
policies in effect for the reimbursement of
expenses at the time the expenses are incurred.
4.McKay shall have the right to provide services
to other companies and/or organizations EXCEPT:
McKay shall not, for the period of this
Agreement and for one year following the
expiration or termination of this Agreement,
without the prior written approval of the Board of
Directors of Harnischfeger, directly or
indirectly, as owner, partner, officer or
employee, engage in any business, in any country
where Harnischfeger promotes its products or does
business, which is directly and substantially
competitive with any business actively conducted
by Harnischfeger or by any of its subsidiaries or
undertake to consult with or advise any such
competitive business, or otherwise, directly or
indirectly, engage in any activity which is
directly and substantially competitive with or in
any way adversely and substantially affecting any
such activity engaged in by Harnischfeger or any
of its subsidiaries; provided, however, that
ownership by McKay of not more than 5% of the
outstanding shares of stock of any such business
listed on any national stock exchange or quoted on
an automated quotation system, or of not more than
15% of the stock of any such business not so
listed or quoted, shall not be deemed a violation
of this paragraph; and further provided that McKay
shall not be deemed to violate this restriction if
Harnischfeger acquires or becomes engaged in a new
business which is competitive with a business in
which McKay has previously been engaged.
Harnischfeger shall be entitled to a remedy of
specific performance to enforce this paragraph of
the Agreement.
5.McKay agrees to be bound by the provisions of
the Independent Contractor and Consultant
Proprietary Rights and Confidentiality Agreement
("Confidentiality Agreement") attached hereto as
Exhibit A and incorporated herein. The provisions
of such agreement supplement and are in addition
to McKay's obligations under this Agreement.
6. If McKay commits a breach or threatens to
commit a breach of any of the provisions of
paragraph 4 or 5 hereof or the Confidentiality
Agreement, Harnischfeger shall have the right and
remedy, in addition to any other remedy that may
be available, at law or in equity, to have the
provisions of paragraphs 4 and 5 and the
Confidentiality Agreement specifically enforced by
any court having equity jurisdiction together with
an accounting for any damages sustained, it being
acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to
Harnischfeger and that money damages will not
provide an adequate remedy to Harnischfeger. Such
an injunction shall be available without the
posting of any bond or other security, and McKay
hereby consents to the issuance of such
injunction.
Furthermore, if Harnischfeger is forced to
bring action in court to enforce the provisions
of paragraph 4 or 5 hereof or the
Confidentiality Agreement and the court finds
in Harnischfeger's favor, McKay agrees to pay
Harnischfeger's attorneys' fees and costs in
pursuing the court action.
If any covenant contained in paragraph 4 or 5
or the Confidentiality Agreement, or any part
thereof, is hereafter construed to be invalid
or unenforceable, the same shall not affect the
remainder of the covenant or covenants, which
shall be given full effect, without regard to
the invalid portions, and any court having
jurisdiction shall have the power to reduce the
duration and/or area of such covenant and, in
its reduced form, said covenant shall then be
enforceable.
7. McKay and Harnischfeger agree that the
terms of this Agreement shall expire and no
further monthly payments pursuant to paragraph 2
and no further expenses pursuant to paragraph 3
(except for any reasonable expenses already
incurred by McKay on the date of termination),
shall be paid by Harnischfeger, after the
occurrence of any of the following situation(s),
act(s) or omission(s):
(a) McKay dies or becomes incapacitated such
that he is unable to perform any further
consulting services;
(b) McKay willfully and continually fails to
substantially perform the duties reasonably
assigned by the Chief Executive Officer;
McKay willfully engages in illegal conduct
which is materially and demonstrably injurious to
Harnischfeger or any of its subsidiaries; or
(d) McKay breaches or threatens to breach
paragraphs 4 or 5 above or the Confidentiality
Agreement.
8. No termination of this Agreement shall
affect the provisions of paragraphs 4, 5, 6, 8, 9,
10 or the Confidentiality Agreement, all of which
shall remain in effect notwithstanding any such
termination.
9. This Agreement supersedes any prior
agreements or understandings, oral or written,
with respect to the consultant arrangement between
McKay and Harnischfeger and constitutes the entire
agreement of the parties with respect thereto. No
provision of this Agreement (including this
paragraph 9) may be waived, amended, or otherwise
modified except by a subsequent written agreement
executed by the parties hereto.
10. Any action concerning this Agreement may
be brought in the federal or state courts located
in the County of Milwaukee, Wisconsin, and each
party consents to the venue and jurisdiction of
such courts.
AGREED TO:
\s\John A. McKay June 16, 1995
- ----------------------- -----------------
John A. McKay Date
HARNISCHFEGER INDUSTRIES, INC.
ATTEST:
BY \s\Jeffery T. Grade \s\Sandra L. McKenzie
- ----------------------- ---------------------
Exhibit 4(j)
<PAGE>
Amendment One
to
Harnischfeger Industries, Inc.
Stock Employee Compensation Trust
THIS AMENDMENT (the "Amendment") made
effective as of January 1, 1994, adopted by
Harnischfeger Industries, Inc., a Delaware
corporation, and Marshall & Ilsley Trust Company,
a Wisconsin corporation.
WHEREAS, pursuant to a trust agreement
(the "Agreement") made effective as of March 23,
1993, Harnischfeger Industries, Inc. (the
"Company") and Marshall & Ilsley Trust Company
(the "Trustee") established a trust (the "Trust")
known as the Harnischfeger Industries, Inc. Stock
Employee Compensation Trust;
WHEREAS, the Agreement provides that the
Company retains the power to amend the Trust to
correct any errors or clarify any ambiguities or
similar issues of interpretation in the Agreement;
WHEREAS, the Agreement provides for the
voting by the Trustee of shares of the Company's
common stock held in the Trust Fund (as defined in
the Agreement);
WHEREAS, it is the intent of the Company
that, in voting shares of the Company's common
stock in the Trust Fund, the Trustee follow
directions of each Plan Participant (as defined in
the Agreement) and each trustee of any trust
established under a DC Plan (as defined in the
Agreement) in proportion to the number of shares
of the Company's common stock allocated to such
Plan Participant or trust during the Relevant
Period which is defined in the Agreement to be the
period from the beginning of fiscal year 1992
until the end of the close of business on the 30th
day prior to the date of the relevant
stockholders' meeting;
WHEREAS, the Company and Trustee
consider it desirable to correct or clarify any
error or ambiguity that may exist as to the voting
by the Trustee of shares of the Company's common
stock held in the Trust Fund;
NOW, THEREFORE, by virtue and in
exercise of the power reserved to the Company by
Section 8.1 of the Agreement, the
<PAGE>
Agreement be and hereby is amended, effective as
of the date first mentioned above, in the
following particulars:
By substituting for Section 5.4 (a) of
the Agreement the following:
(a) Voting of Company Stock. The
Trustee shall follow the directions of each Plan
Participant, or in the case of a DC Plan, each
trustee of any trust established under a DC Plan,
as to the manner in which shares of Company Stock
held by the Trust are to be voted on each matter
brought before an annual or special stockholders'
meeting of the Company or the manner in which any
consent is to be executed, in each case as
provided below. Before each such meeting of
stockholders, the Trustee shall cause to be
furnished to each Plan Participant and to the
trustee of each trust established under each DC
Plan, as the case may be, a copy of the proxy
solicitation material received by the Trustee,
together with a form requesting confidential
instructions as to how to vote the shares of
Company Stock held by the Trustee. Upon timely
receipt of directions from the Plan Participants
and of the DC Plans Trustee Certification, as the
case may be, the Trustee shall on each such matter
vote the number of shares (including fractional
shares) of Company Stock held by the Trust as
follows:
The Trustee shall first divide the
Company Stock held in the Trust Fund into those
shares to be directed by Plan participants other
than with respect to each DC Plan ("Participant
Shares") and those to be directed pursuant to the
DC Plans Trustee Certification ("DC Shares"),
which division shall be in the same ratio as the
cumulative number of shares of Company Stock
allocated to the Plans other than the DC Plans,
whether or not from the Trust, from the beginning
of fiscal year 1992 until the end of the close of
business on the 30th day prior to the date of such
stockholders' meeting (the "Relevant Period")
bears to the number of shares of Company Stock
allocated to the DC Plans, whether or not from the
Trust, with respect to such period.
The Participant Shares shall be voted by
the Trustee as directed by the Plan Participants
with each Plan Participant directing a number of
shares of Company Stock (the "Participant Directed
Amount") equal to the product of (x) the total
number of Participant Shares and (y) a fraction,
the numerator of which is the number of Shares of
Company Stock allocated to such Plan Participant
for the Relevant Period (as reflected in the Plan
Committee Certification) and the denominator of
which is the total number of shares of Company
Stock allocated to all Plan Participants during
the Relevant Period, other than by reason of
allocations to a DC Plan. Any Participant Shares
for which the Trustee does not receive a signed
voting-direction instrument shall be voted for,
against or to abstain in the same proportions as
those Participant Shares for which the Trustee did
receive instructions. Notwithstanding the
foregoing, if more than 15% of the
<PAGE>
Company Stock held by the Trust would be
Participant Shares directed by Plan Participants
subject to Section 16(a) of the Securities
Exchange Act of 1934, as amended (the "Section 16
Officers"), who are not otherwise excluded from
voting on the particular matter, shares of Company
Stock in excess of such percentage held by the
Trust which would be voted in accordance with the
instructions of such participants shall instead be
voted in the same proportion as all other Company
Stock held by the Trustee is voted.
For purposes of this Section 5.4, the
Trustee shall, with respect to each DC Plan,
assign to each DC Participant, a number of shares
(the "DC Participant Directed Amount") equal to
the product of (x) the total number of DC Shares,
and (y) a fraction, the numerator of which is the
number of shares of Company Stock allocated to
such DC Participant's account in any DC Plan for
the Relevant Period, whether or not from the
Trust, and the denominator of which is the total
number of shares of Company Stock contributed to
the trustees of the trusts established under all
the DC Plans with respect to the Relevant Period,
whether or not from the Trust, in each case, as
reflected in the DC Plans Trustee Certification.
Each share assigned to each DC Participant in
accordance with the previous sentence shall be
voted in accordance with such participant's
direction to the trustee of the DC Plan in which
he participates with respect to shares of Company
Stock allocated to his account in such DC Plan, as
reflected in the DC Plans Trustee Certification.
Any DC Shares which remain undirected pursuant to
the foregoing provisions shall be voted for,
against or to abstain in the same proportions as
the DC Shares for which the Trustee is directed as
provided above.
Similar provisions shall apply in the
case of any action by shareholder consent without
a meeting.
IN WITNESS WHEREOF, the Company has
caused this amendment to be executed on its behalf
by the undersigned duly authorized officer this 31
day of January, 1994.
HARNISCHFEGER INDUSTRIES, INC.
Jeffery T. Grade
By: \s\Jeffery T. Grade
------------------
Its: Chairman and Chief
Executive Officer
ATTEST: \s\ Kenneth J. Stark
-------------------
Kenneth J. Stark
Assistant Treasurer
<PAGE>
The Trustee hereby consents to the foregoing
amendment.
MARSHALL & ILSLEY TRUST COMPANY
- ------------------------------
By: /s/James L. Neubauer
-------------------------
Its: Vice President
-------------------------
Date: 3/24/94
ATTEST /s/Forrest Dupre
----------------------
ITS Vice President
----------------------
Exhibit 4(k)
<PAGE>
Amendment Two
to
Harnischfeger Industries, Inc.
Stock Employee Compensation Trust
THIS AMENDMENT (the "Amendment") made
effective as of May 6, 1995, adopted by
Harnischfeger Industries, Inc., a Delaware
corporation, and Marshall & Ilsley Trust Company,
a Wisconsin corporation.
WHEREAS, pursuant to a trust agreement
(the "Agreement") made effective as of March 23,
1993, Harnischfeger Industries, Inc. (the
"Company") and Marshall & Ilsley Trust Company
(the "Trustee") established a trust (the "Trust")
known as the Harnischfeger Industries, Inc. Stock
Employee Compensation Trust;
WHEREAS, the Company deems it desirable
to amend the Agreement to provide for more
efficient administration of the Trust.
NOW, THEREFORE, by virtue and in
exercise of the power reserved to the Company by
Section 8.1 of the Agreement, the Agreement be and
hereby is amended, effective as of the date first
mentioned above, in the following particulars:
I. By substituting for Section 2.1 of
the Agreement the following:
2.1 Contributions. The Company shall
contribute to the Trust in cash such amount, which
together with dividends, as provided in Section
2.2, and any other earnings of the Trust, shall
enable the Trustee to make all payments of
principal and interest due during an Allocation
Cycle under the Loan on a timely basis. Unless
otherwise expressly provided herein, the Trustee
shall apply all such contributions, dividends and
earnings to the payment of principal and interest
due under the Loan. If, at the end of any
Allocation Cycle, no such contribution has been
made in cash, such contribution shall be deemed to
have been made in the form of forgiveness of
principal and interest on the Loan to the extent
of the Company s failure to make contributions as
required by this Section 2.1. All contributions
made under the Trust shall be delivered to the
Trustee. The Trustee shall be accountable for all
contributions received by it, but shall have no
duty to require any contributions to be made to
it.
II. By substituting for Section 6.2 of
the Agreement the following:
<PAGE>
6.2 Fiscal Year. The fiscal year of
the Trust shall be the twelve month period
beginning on November 1 and ending on October 31
of each calendar year.
IN WITNESS WHEREOF, the Company has
caused this amendment to be executed on its behalf
by the undersigned duly authorized officer this
18th day of October, 1995.
HARNISCHFEGER INDUSTRIES, INC.
/s/Jeffery T. Grade
-----------------------
By: Jeffery T. Grade
Its: Chairman and Chief
Executive Officer
The Trustee hereby consents to the foregoing
amendment.
MARSHALL & ILSLEY TRUST COMPANY
/s/Charlene Kehrmann
------------------------
By: Charlene Kehrmann
Its: Vice President
Date: 11/21/95
/s/Steven P. Palmer
------------------------
By: Steven P. Palmer
Its: Vice President
Date: 11/22/95
Exhibit 3(b)
12/11/95
B Y L A W S
OF
HARNISCHFEGER INDUSTRIES, INC.
ARTICLE I
OFFICES
------
The initial registered office of the
corporation required by the Delaware General
Corporation Law shall be 100 West Tenth Street,
City of Wilmington, County of New Castle, State of
Delaware, and the address of the registered office
may be changed from time to time by the Board of
Directors.
The principal business office of the
corporation shall be located in the Village of
Brookfield, County of Waukesha, State of
Wisconsin. The corporation may have such other
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.
The registered office of the corporation
required by the Wisconsin Business Corporation Law
may be, but need not be, the same as its place of
business in the State of Wisconsin, and the
address of the registered office may be changed
from time to time by the Board of Directors.
ARTICLE II
STOCKHOLDERS
--------------
SECTION 1. Annual Meeting. The annual
meeting of the stockholders shall be held on the
second Tuesday in the month of April in each year,
beginning with the year 1996, at the hour of 10:00
o'clock A.M., or at such other hour 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 where the meeting is to be held, 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 for the
annual meeting of the stockholders, or at any
adjournment thereof, the Board of Directors shall
cause the election to be held at a special meeting
of the stockholders as soon thereafter as is
convenient.
SECTION 2. Special Meeting. Special
meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute,
may be called by the Chief Executive Officer or by
the Board of Directors.
SECTION 3. Place of Meeting. The Board
of Directors may designate any place, either
within or without the State of Delaware, as the
place of meeting for any annual meeting or for
any special meeting called by the Board of
Directors. 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.
SECTION 4. Notice of Meeting. Written
notice stating the place, day and hour of the
meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is
called, shall be delivered not less than ten days
nor more than sixty days before the date of the
meeting, either personally or by mail, by or at
the direction of the Chief Executive Officer, or
the Secretary, or the officer or persons calling
the meeting, to each stockholder of record
entitled to vote at such meeting. If mailed, such
notice shall be deemed to be given when deposited
in the United States mail, addressed to the
stockholder at the stockholder's address as it
appears on the records of the corporation, with
postage thereon prepaid. Any previously scheduled
meeting of the stockholders may be postponed, and
any special meeting of the stockholders may be
cancelled, by resolution of the Board of Directors
upon public notice given prior to the date
previously scheduled for such meeting of
stockholders.
SECTION 5. Fixing of Record Date. For
the purpose of determining stockholders entitled
to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or
entitled to receive payment of any dividend, or in
order to make a determination of stockholders for
any other proper purpose, the Board of Directors
of the corporation may fix in advance a date as
the record date for any such determination of
stockholders, such date in any case to be not more
than sixty days and, in case of a meeting of
stockholders, not less than ten days prior to the
date on which the particular action, requiring
such determination of stockholders, is to be
taken. If no record date is fixed for the
determination of stockholders entitled to notice
of or to vote at a meeting of stockholders, or
stockholders entitled to receive payment of a
dividend, the close of business on the date next
preceding the date on which notice of the meeting
is mailed or 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 stockholders. When
a determination of stockholders entitled to vote
at any meeting of stockholders has been made as
provided in this section, such determination shall
apply to any adjournment thereof; provided,
however, that the Board of Directors may fix a new
record date for the adjourned meeting.
SECTION 6. Voting Lists. The officer
or agent having charge of the stock ledger of the
corporation shall make, at least ten days before
each meeting of stockholders, a complete list of
the stockholders entitled to vote at such meeting,
or any adjournment thereof, arranged in
alphabetical order, with the address of and the
number of shares held by each; which list, for a
period of ten days prior to such meeting, shall be
kept at the place where the meeting is to be held,
or at another place within the city where the
meeting is to be held, which other place shall be
specified in the notice of meeting and the list
shall be subject to inspection by any stockholder
for any purpose germane to the meeting, at any
time during usual business hours. Such list shall
also be produced and kept open at the time and
place of the meeting and shall be subject to the
inspection of any stockholder during the whole
time of the meeting. The original stock ledger
shall be prima facie evidence as to who are the
stockholders entitled to examine such list or
ledger or to vote at any meeting of stockholders.
Failure to comply with the requirements of this
section will not affect the validity of any action
taken at such meeting.
SECTION 7. Quorum. A majority of the
shares entitled to vote, represented in person or
by proxy, shall constitute a quorum at a meeting
of stockholders. If a quorum is present, the
affirmative vote of a majority of the shares
represented at the meeting and entitled to vote on
the subject matter shall be the act of the
stockholders, unless the vote of a greater number
or voting by classes is required by Delaware law,
the Articles of Incorporation, or these Bylaws.
If less than a majority 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. Any
stockholders meeting, annual or special, whether
or not a quorum is present, may be adjourned from
time to time by the Chairman of the meeting
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
called.
SECTION 8. Proxies. At all meetings of
stockholders, a stockholder may vote by proxy
executed in writing by the stockholder or by the
stockholder's duly authorized attorney in fact.
Such proxy shall be filed with the Secretary of
the corporation before or at the time of the
meeting. No proxy shall be valid after three
years from the date of its execution, unless
otherwise provided in the proxy.
SECTION 9. Voting of Shares. Each
outstanding share, regardless of class, shall be
entitled to one vote on each matter submitted to a
vote at a meeting of stockholders, except to the
extent that the voting rights of any class or
classes are enlarged, limited or denied by the
Articles of Incorporation or in the manner therein
provided.
SECTION 10. Voting of Shares by Certain
Holders. Neither treasury shares nor shares of
the corporation held by another corporation, if a
majority of the shares entitled to vote in the
election of directors of such other corporation is
held, directly or indirectly, by the corporation,
shall be entitled to vote or to be counted for
quorum purposes. Nothing in this paragraph shall
be construed as limiting the right of the
corporation to vote its own stock held by it in a
fiduciary capacity.
Shares standing in the name of another
corporation, domestic or foreign, may be voted in
the name of such corporation by its President or
such other officer as the President may appoint or
pursuant to any proxy executed in the name of such
corporation by its President or such other officer
as the President may appoint in the absence of
express written notice filed with the Secretary
that such President or other officer has no
authority to vote such shares.
Shares held by an administrator,
executor, guardian, conservator, trustee in
bankruptcy, receiver or assignee for creditors may
be voted by such administrator, executor,
guardian, conservator, trustee in bankruptcy,
receiver or assignee for creditors, either in
person or by proxy, without a transfer of such
shares into the name of such administrator,
executor, guardian, conservator, trustee in
bankruptcy, receiver or assignee for creditors.
Shares standing in the name of a fiduciary may be
voted by such fiduciary, either in person
or by proxy.
A stockholder whose shares are pledged
shall be entitled to vote such shares unless in
the transfer by the pledgor on the books of the
corporation the pledgor has expressly empowered
the pledgee to vote thereon, in which case only
the pledgee, or the pledgee's proxy, may represent
such stock and vote thereon.
SECTION 11. Stockholder Proposals. No
proposal for a stockholder vote shall be submitted
by a stockholder (a "Stockholder Proposal") to the
corporation's stockholders unless the stockholder
submitting such proposal (the "Proponent") shall
have filed a written notice setting forth with
particularity (I) the names and business addresses
of the Proponent and all Persons acting in concert
with the Proponent (ii) the name and address of
the Proponent and the Persons identified in clause
(I), as they appear on the corporation's books (if
they so appear), (iii) the class and number of
shares of the corporation beneficially owned by
the Proponent and the Persons identified in clause
(I); (iv) a description of the Stockholder
Proposal containing all material information
relating thereto; and (v) such other information
as the Board of Directors reasonably determines is
necessary or appropriate to enable the Board of
Directors and stockholders of the corporation to
consider the Stockholder Proposal. As used in
this Section, the term "Person" means any
individual, partnership, firm, corporation,
association, trust, unincorporated organization or
other entity.
The presiding officer at any
stockholders' meeting may determine that any
Stockholder Proposal was not made in accordance
with the procedures prescribed in these Bylaws or
is otherwise not in accordance with law, and if it
is so determined, such officer shall so declare at
the meeting and the Stockholder Proposal shall be
disregarded.
Stockholder Proposals shall be delivered
to the Secretary at the principal executive office
of the corporation not less than ninety (90) days
before the date of the stockholders' meeting if
such Stockholder Proposal is to be submitted at an
annual stockholders' meeting (provided, however,
that if such annual meeting is called to be held
before the date specified in Section 1 hereof,
such Stockholder Proposal shall be delivered no
later than the close of business on the 15th day
following the day on which notice of the date of
the annual stockholders' meeting was given).
Stockholder Proposals shall be so delivered to the
Secretary at the principal executive office of the
corporation no later than the close of business on
the 15th day following the day on which notice of
the date of a special meeting of stockholders was
given if the Stockholder Proposal is to be
submitted at a special stockholders' meeting.
SECTION 12. Inspectors of Election;
Opening and Closing the Polls. The Board of
Directors by resolution shall appoint one or more
inspectors, which inspector or inspectors may
include individuals who serve the corporation in
other capacities, including without limitation, as
officers, employees, agents or representatives, to
act at the meetings of stockholders and make a
written report thereof. One or more persons may
be designated as alternate inspectors to replace
any inspector who fails to act. If no inspector
or alternate has been appointed to act or is able
to act at a meeting of stockholders, the Chairman
of the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector,
before discharging his or her duties, shall take
and sign an oath faithfully to execute the duties
of inspector with strict impartiality and
according to the best of his or her ability. The
inspector shall have the duties prescribed by law.
The Chairman of the meeting shall fix
and announce at the meeting the date and time of
the opening and closing of the polls for each
matter upon which the stockholders will vote at a
meeting.
SECTION 13. Stockholder Consent
Procedures. (a) Record Date for Action by Written
Consent. In order that the corporation may
determine the stockholders entitled to consent to
corporate action in writing without a meeting, the
Board of Directors may fix a record date, which
record date shall not precede the date upon which
the resolution fixing the record date is adopted
by the Board of Directors, and which date shall
not be more than 10 days after the date upon which
the resolution fixing the record date is adopted
by the Board of Directors. Any stockholder of
record seeking to have the stockholders authorize
or take corporate action by written consent shall,
by written notice to the Secretary, request the
Board of Directors to fix a record date. The
Board of Directors shall promptly, but in all
events within 10 days after the date on which such
a request is received, adopt a resolution fixing
the record date. If no record date has been fixed
by the Board of Directors within 10 days after the
date on which such a request is received, the
record date for determining stockholders entitled
to consent to corporate action in writing without
a meeting, when no prior action by the Board of
Directors is required by applicable law, shall be
the first date on which a signed written consent
setting forth the action taken or proposed to be
taken is delivered to the corporation by delivery
to its registered office in Delaware, its
principal place of business or to any officer or
agent of the corporation having custody of the
book in which proceedings of meetings of
stockholders are recorded. Delivery made to the
corporation s registered office shall be by hand
or by certified or registered mail, return receipt
requested. If no record date has been fixed by
the Board of Directors and prior action by the
Board of Directors is required by applicable law,
the record date for determining stockholders
entitled to consent to corporate action in writing
without a meeting shall be at the close of
business on the date on which the Board of
Directors adopts the resolution taking such prior
action.
(b) Inspectors of Written Consent. In
the event of the delivery, in the manner provided
by Section 13(a), to the corporation of the
requisite written consent or consents to take
corporate action and/or any related revocation or
revocations, the corporation shall engage
nationally recognized independent inspectors of
elections for the purpose of promptly performing a
ministerial review of the validity of the consents
and revocations. For the purpose of permitting
the inspectors to perform such review, no action
by written consent without a meeting shall be
effective until such date as the independent
inspectors certify to the corporation that the
consents delivered to the corporation in
accordance with Section 13(a) represent at least
the minimum number of votes that would be
necessary to take the corporate action. Nothing
contained in this paragraph shall in any way be
construed to suggest or imply that the Board of
Directors or any stockholder shall not be entitled
to test the validity of any consent or revocation
thereof, whether before or after such
certification by the independent inspectors, or to
take any other action (including, without
limitation, the commencement, prosecution or
defense of any litigation with respect thereto,
and the seeking of injunctive relief in such
litigation).
(c) Effectiveness of Written Consent.
Every written consent shall bear the signature of
each stockholder who signs the consent and no
written consent shall be effective to take the
corporate action referred to therein unless,
within 60 days of the date the earliest dated
written consent was received in accordance with
Section 13(a), a written consent or consents
signed by a sufficient number of holders to take
such action are delivered to the Corporation in
the manner prescribed in Section 13(a).
ARTICLE III
BOARD OF DIRECTORS
-----------------
SECTION 1. General Powers. The
business and affairs of the corporation shall be
managed by its Board of Directors.
SECTION 2. Number. Tenure and
Qualifications. The number of directors of the
corporation shall be twelve. Each of the three
classes of Directors established by the
corporation's Certificate of Incorporation shall
consist of four members, subject to modification
by resolution of the Board of Directors. Each
director shall hold office for the term provided
in the Certificate of Incorporation and until such
director's successor shall have been elected and
qualified, or until such director's earlier death
or resignation. No director shall be or be deemed
to be removed from office prior to the expiration
of such director's term in office by virtue of a
reduction in the number of directors. Directors
need not be residents of the State of Delaware or
stockholders of the corporation.
SECTION 3. Annual Meetings. An annual
meeting of the Board of Directors shall be held
without other notice than this Bylaw immediately
after, and at the same place as, the Annual
Meeting of Stockholders.
SECTION 4. Special Meetings. Special
meetings of the Board of Directors may be called
by or at the request of the Chairman or any two
directors. The person or persons authorized to
call special meetings of the Board of Directors
may fix any place, either within or without the
State of Delaware, as the place for holding any
special meeting of the Board of Directors called
by them.
SECTION 5. Notice. Notice of any
special meeting shall be given at least 48 hours
previous thereto by written notice delivered
personally or mailed to each director at such
director's business address, or by telegram. If
mailed, such notice shall be deemed to be given
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 given when the telegram is delivered
to the telegraph company. Any director may waive
notice of any meeting. 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 of 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.
SECTION 6. Quorum. A majority of the
number of directors fixed by Section 2 of this
Article III shall constitute a quorum for the
transaction of business at any meeting of the
Board of Directors, but if less than such majority
is present at a meeting, a majority of the
directors present may adjourn the meeting from
time to time without further notice.
SECTION 7. 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.
SECTION 8. Nomination of Directors;
Vacancies.
Candidates for director shall be nominated either
(I) by the Board of Directors or a committee
appointed by the Board of Directors or (ii) by
nomination at any stockholders' meeting by or on
behalf of any stockholder entitled to vote at such
meeting provided that written notice of such
stockholder's intent to make such nomination or
nominations has been given, either by personal
delivery or by United States mail, postage
prepaid, to the secretary of the corporation not
later than (1) with respect to an election to be
held at an annual meeting of stockholders, ninety
(90) days in advance of such meeting, and (2) with
respect to an election to be held at a special
meeting of stockholders for the election of
directors, the close of business on the tenth
(10th) day following the date on which notice of
such meeting is first given to stockholders. Each
such notice shall set forth: (a) the name and
address of the stockholder who intends to make the
nomination and of the person or persons to be
nominated; (b) a representation that the
stockholder is a holder of record of stock of the
corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the
meeting to nominate the person or persons
specified in the notice; (c) a description of all
arrangements or understandings between the
stockholder and each nominee and any other person
or persons (naming such person or persons)
pursuant to which the nomination or nominations
are to be made by the stockholder; (d) such other
information regarding each nominee proposed by
such stockholder as would be required to be
included in a proxy statement filed pursuant to
the proxy rules of the Securities and Exchange
Commission had the nominee been nominated, or
intended to be nominated, by the Board of
Directors; and (e) the consent of each nominee to
serve as a director of the corporation if so
elected. The presiding officer of the meeting may
refuse to acknowledge the nomination of any person
not made in compliance with the foregoing
procedure.
Any vacancy occurring in the Board of
Directors, including a vacancy created by an
increase in the number of directors, may be filled
for the remainder of the unexpired term by the
affirmative vote of a majority of the directors
then in office although less than a quorum.
SECTION 9. Action by Directors Without
a Meeting. Any action required to be taken at a
meeting of directors, or at a meeting of a
committee of directors, or any other action which
may be taken 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 of the
directors or members of the committee thereof
entitled to vote with respect to the subject
matter thereof and such consent shall have the
same force and effect as a unanimous vote.
SECTION 10. Participation in a Meeting
by Telephone. Members of the Board of Directors
or any committee of directors may participate in a
meeting of such Board or committee by means of
conference telephone or similar communication
equipment by means of which all persons
participating in the meeting can hear each other,
and participating in a meeting pursuant to this
section 10 shall constitute presence in person at
such meeting.
SECTION 11. Compensation. The Board of
Directors, by majority vote of the directors then
in office and irrespective of any personal
interest of any of its members, shall have
authority to establish reasonable compensation of
all directors for services to the corporation as
directors, officers or otherwise, or to delegate
such authority to an appropriate committee. The
Board of Directors also shall have authority 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 and beneficiaries on
account of prior services rendered by such
directors, officers and employees to the
corporation. The Board of Directors may be paid
their expenses, if any, of attendance at each such
meeting of the Board.
SECTION 12. Presumption of Assent. A
director of the corporation who is present at a
meeting of the Board of Directors at which action
on any corporate matter is taken shall be presumed
to have assented to the action taken unless such
director's dissent is entered in the minutes of
the meeting or unless such director files a
written dissent to such action with the person
acting as the Secretary of the meeting before the
adjournment thereof or forwards 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.
SECTION 13. Validity of Contracts. No
contract or other transaction entered into by the
corporation shall be affected by the fact that a
director or officer of the corporation is in any
way interested in or connected with any party to
such contract or transaction, or is a party to
such contract or transaction, even though in the
case of a director the vote of the director having
such interest or connection shall have been
necessary to obligate the corporation upon such
contract or transaction; provided, however, that
in any such case (I) the material facts of such
interest are known or disclosed to the directors
or stockholders and the contract or transaction is
authorized or approved in good faith by the
stockholders or by the Board of Directors or a
committee thereof through the affirmative vote of
a majority of the disinterested directors (even
though not a quorum), or (ii) the contract or
transaction is fair to the corporation as of the
time it is authorized, approved or ratified by the
stockholders, or by the Board of Directors, or by
a committee thereof.
SECTION 14. Indemnification and
Insurance. Each person who was or is made a
party or is threatened to be made a party to or is
involved in any action, suit, arbitration,
mediation or proceeding, whether civil, criminal,
administrative or investigative, whether domestic
or foreign (hereinafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he
or she is the legal representative, is or was a
director or officer of the corporation or is or
was serving at the request of the corporation as a
director, officer, employee or agent of another
corporation or of a partnership, joint venture,
trust or other enterprise, including service with
respect to employee benefit plans, whether the
basis of such proceeding is alleged action or
inaction in an official capacity as a director,
officer, employee or agent or in any other
capacity while serving as a director, officer,
employee or agent, shall be indemnified and held
harmless by the corporation to the fullest extent
not prohibited by the General Corporation Law of
the State of Delaware, as the same exists or may
hereafter be amended (but, in the case of any such
amendment, with respect to alleged action or
inaction occurring prior to such amendment, only
to the extent that such amendment permits the
corporation to provide broader indemnification
rights than said law permitted the corporation to
provide prior to such amendment), against all
expense, liability and loss (including without
limitation attorneys' fees and expenses,
judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in
connection therewith. Such indemnification as to
such alleged action or inaction shall continue as
to a person who has ceased after such alleged
action or inaction to be a director, officer,
employee or agent and shall inure to the benefit
of his or her heirs, executors and administrators;
provided, however, that, except as provided in the
following paragraph, the corporation shall
indemnify any such person seeking indemnification
in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding
(or part thereof) was authorized by the Board
unless such proceeding (or part thereof) is a
counter claim, cross-claim, third party claim or
appeal brought by such person in any proceeding.
The right to indemnification conferred in this
Section shall be a contract right and shall
include the right to be paid by the corporation
the expenses incurred in defending any such
proceeding in advance of its final disposition;
provided, however, that, if the General
Corporation law of the State of Delaware requires,
the payment of such expenses incurred by a
director or officer in his or her capacity as a
director or officer (and not in any other capacity
in which service was or is rendered by such person
while a director or officer, including, without
limitation, service to an employee benefit plan)
in advance of the final disposition of a
proceeding, shall be made only upon delivery to
the corporation of an undertaking, by or on behalf
of such director or officer, to repay all amounts
so advanced if it shall ultimately be determined
by final judicial decision from which there is no
further appeal that such director or officer is
not entitled to be indemnified for such expenses
under this Section or otherwise. The corporation
may, by action of the Board, provide
indemnification to an employee or agent of the
corporation or to a director, trustee, officer,
employee or agent of another corporation or of a
partnership, joint venture, trust or other
enterprise of which the corporation owns fifty
percent or more with the same scope and effect as
the foregoing indemnification of directors and
officers or such lesser scope and effect as shall
be determined by action of the Board.
If a claim under the preceding paragraph is
not paid in full by the corporation within thirty
days after a written claim has been received by
the corporation, the claimant may at any time
thereafter bring suit against the corporation to
recover the unpaid amount of the claim and, if
successful in whole or in part in any such claim
or suit, or in a claim or suit brought by the
corporation to recover an advancement of expenses
under this paragraph, the claimant shall be
entitled to be paid also the expense of
prosecuting or defending any such claim or suit.
It shall be a defense to any such action (other
than an action brought to enforce a claim for
expenses incurred in defending any proceeding in
advance of its final disposition where the
required undertaking, if any is required, has been
tendered to the corporation) that the claimant has
not met the applicable standard of conduct which
make it permissible under the General Corporation
Law of the State of Delaware for the corporation
to indemnify the claimant for the amount claimed,
but the burden of proving such defense shall be on
the corporation. Neither the failure of the
corporation (including its Board of Directors,
independent legal counsel, or its stockholders) to
have made a determination prior to the
commencement of such action that indemnification
of the claimant is proper in the circumstances
because he or she has met the applicable standard
of conduct set forth in the General Corporation
Law of the State of Delaware, nor an actual
determination by the corporation (including its
Board of Directors, independent legal counsel, or
its stockholders) that the claimant has not met
such applicable standard of conduct set forth in
the General Corporation Law of the State of
Delaware, shall be a defense to the action or
create a presumption that the claimant has not met
the applicable standard of conduct. In any suit
brought by such person to enforce a right to
indemnification or to an advancement of expenses
hereunder, or by the corporation to recover an
advancement of expenses hereunder, the burden of
proving that such person is not entitled to be
indemnified, or to have or retain such advancement
of expenses, shall be on the corporation.
The right to indemnification and the payment
of expenses incurred in defending a proceeding in
advance of its final disposition conferred in this
Section shall not be exclusive of any other right
which any person may have or hereafter acquire
under any statute, provision of the Certificate of
Incorporation, By-law, agreement, vote of
stockholders or disinterested directors or
otherwise.
The corporation may maintain insurance, at
its expense, to protect itself and any director,
officer, employee or agent of the corporation or
another corporation, partnership, joint venture,
trust or other enterprise against any such
expense, liability or loss, whether or not the
corporation would have the power to indemnify such
person against such expense, liability or loss
under the General Corporation Law of the State of
Delaware.
In the event that any of the provisions of
this Section 14 (including any provision within a
single section, paragraph or sentence) is held by
a court of competent jurisdiction to be invalid,
void or otherwise unenforceable, the remaining
provisions are severable and shall remain
enforceable to the full extent permitted by law.
SECTION 15. Committees of Directors.
The Board of Directors may, by resolution passed
by a majority of the whole Board, designate one or
more committees, each committee to consist of one
or more of the directors of the corporation. The
Board may designate one or more directors as
alternate committee members, who may replace any
absent or disqualified member at any committee
meeting. In the absence or disqualification of a
committee member, the member or members present at
any meeting and not disqualified from voting,
whether such member or members constitute a
quorum, may unanimously appoint another director
to act at the meeting in place of the absent or
disqualified member. Any such committee shall
have and may exercise all the powers and authority
of the Board of Directors in the management of the
business and affairs of the corporation, and may
authorize the seal of the corporation to be
affixed to all papers which may require it; but no
such committee shall have the power or authority
in reference to amending the Certificate of
Incorporation (except that a committee may, to the
extent authorized in the resolution(s) providing
for the issuance of shares of stock adopted by the
Board, fix any of the preferences or rights of
such shares relating to dividends, redemption,
dissolution, any distribution of assets of the
corporation or the conversion into, or the
exchange of such shares for, shares of any other
class or classes or any other series of the same
or any other class or classes of stock of the
corporation), adopting an agreement of merger or
consolidation, recommending to the stockholders
the sale, lease or exchange of all or
substantially all of the corporation's property
and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of
a dissolution, or amending the Bylaws of the
corporation; and, unless the resolution expressly
so provides, no such committee shall have the
power or authority to declare a dividend or to
authorize the issuance of stock, or to adopt a
certificate of ownership and merger.
ARTICLE IV
OFFICERS
---------
SECTION 1. Number. The officers of the
corporation shall be a Chairman of the Board (who
must be a member of the Board of Directors and who
also may be an employee of the corporation), a
Chief Executive Officer, a President, one or more
Vice Presidents (the number thereof to be
determined by the Board of Directors), a
Secretary, a Treasurer and a Controller, each of
whom shall be elected by the Board of Directors.
The Board of Directors may also elect a Chief
Operating Officer and one or more Group Presidents
and may designate one or more of the Vice
Presidents as Executive Vice Presidents or Senior
Vice Presidents. Such other officers and
assistant officers and agents 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.
SECTION 2. Election and Term of Office.
The officers of the corporation 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 stockholders. If the
election of officers shall not be held at such
meeting, such election shall be held as soon
thereafter as convenient. Each officer shall hold
office until such officer's successor shall have
been duly elected or until such officer's death or
until such officer shall resign or shall have been
removed in the manner hereinafter provided.
SECTION 3. Removal. Any officer or
agent 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 would 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.
SECTION 4. Vacancies. A vacancy in any
office because of death, resignation, removal,
disqualification or otherwise, may be filled by
the Board of Directors for the unexpired portion
of the term.
SECTION 5. Chairman of the Board. The
Chairman of the Board shall preside at all
meetings of the Board of Directors and
stockholders.
SECTION 6. Chief Executive Officer.
The Chief Executive Officer shall be the principal
executive officer of the corporation and, subject
to the control of the Board of Directors, shall
supervise and control all of the business and
affairs of the corporation, and establish current
and long-range objectives, plans and policies.
The Chief Executive Officer 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 the Chief
Executive Officer 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 Chief Executive Officer. The Chief
Executive Officer 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, the Chief Executive Officer may
authorize the President, an Executive Vice
President, Senior Vice President, or other officer
or agent of the corporation to sign, execute and
acknowledge such documents or instruments in the
Chief Executive Officer's place and stead. In
general, the Chief Executive Officer shall perform
all duties incident to the office of Chief
Executive Officer and such other duties as may be
prescribed by the Board of Directors from time to
time. In the absence of the Chairman of the
Board, the Chief Executive Officer shall, when
present, preside at all meetings of the
stockholders and the Board of Directors.
SECTION 7. President. The President
shall direct, administer and coordinate the
activities of the corporation in accordance with
policies, goals and objectives established by the
Chief Executive Officer and the Board of
Directors. The President shall also assist the
Chief Executive Officer in the development of
corporate policies and goals. In the absence of
both the Chairman of the Board and the Chief
Executive Officer, the President shall, when
present, preside at all meetings of the
stockholders and the Board of Directors.
SECTION 8. The Chief Operating Officer,
Group Presidents and the Vice Presidents. In the
absence of the President or in the event of the
President's death, inability or refusal to act,
the Chief Operating Officer, the Group Presidents
and the Executive Vice Presidents in the order
designated at the time of their election, or, in
the absence of any designation, then in the order
of their election (or in the event there be no
Chief Operating Officer, Group Presidents or
Executive Vice Presidents or they are incapable of
acting, the Senior Vice Presidents in the order
designated at the time of their election, 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 certain Vice Presidents as being in
charge of designated divisions, plants, or
functions of the corporation's business and add
appropriate description to their title. Any Chief
Operating Officer, Group President or Vice
President may sign, with the Secretary or an
Assistant Secretary, certificates for shares of
the corporation; and shall perform such other
duties as from time to time may be assigned to
such Chief Operating Officer, Group President or
Vice President by the Chief Executive Officer or
by the Board of Directors.
SECTION 9. The Secretary. The
Secretary shall: (a) keep the minutes of the
stockholders' and of the Board of Directors'
meetings in one or more books provided for that
purpose; (b) see that all notices are duly given
in accordance with the provisions of these Bylaws
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
cause to be kept a register of the post office
address of each stockholder which shall be
furnished to the Secretary by such stockholder;
(e) sign with the Chief Executive Officer,
President, or any 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 such other duties as from
time to time may be assigned to the Secretary by
the Chief Executive Officer or by the Board of
Directors.
SECTION 10. The Treasurer. The
Treasurer shall give a bond for the faithful
discharge of the Treasurer's duties in such sum
and with such surety or sureties as the Board of
Directors shall determine. The Treasurer shall:
(a) have charge and custody of and be responsible
for all funds and securities of the corporation;
receive and give receipts for monies due and
payable to the corporation from any source
whatsoever, and deposit all such monies in the
name of the corporation in such banks, trust
companies or other depositories as shall be
selected in accordance with the provisions of
Article VI of these Bylaws; and (b) in general,
perform all of the duties incident to the office
of Treasurer and such other duties as from time to
time may be assigned to the Treasurer by the Chief
Executive Officer or by the Board of Directors.
SECTION 11. The Controller. The
Controller shall: (a) keep, or cause to be kept,
correct and complete books and records of account,
including full and accurate accounts of receipts
and disbursements in books belonging to the
corporation; and (b) in general, perform all
duties incident to the office of Controller and
such other duties as from time to time may be
assigned to the Controller by the Chief Executive
Officer or by the Board of Directors.
SECTION 12. Assistant Secretaries and
AssistantTreasurers. The Assistant Secretaries
may sign with the President, or any Vice
President, certificates for shares of the
corporation, the issuance of which shall have been
authorized by a resolution of the Board of
Directors. Assistant Treasurers shall
respectively 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 as shall be assigned to them by the
Secretary or the Treasurer, respectively, or by
the Chief Executive Officer or the Board of
Directors.
SECTION 13. Salaries. The salaries of
the officers shall be fixed from time to time by
the Board of Directors and no officer shall be
prevented from receiving such salary by reason of
the fact that such officer is also a director of
the corporation.
ARTICLE V
APPOINTED EXECUTIVES
---------------------
SECTION 1. Vice Presidents. The Chief
Executive Officer may appoint, from time to time,
as the Chief Executive Officer may see fit, and
fix the compensation of, one or more Vice
Presidents whose title will include words
describing the function of such Vice President's
office and the group, division or other unit of
the Company in which such Vice President's office
is located. Each of such appointed Vice
Presidents shall hold office during the pleasure
of the Chief Executive Officer, shall perform such
duties as the Chief Executive Officer may assign,
and shall exercise the authority set forth in the
Chief Executive Officer's letter appointing such
Vice President.
SECTION 2. Assistants. The Chief
Executive Officer may appoint, from time to time,
as the Chief Executive Officer may see fit, and
fix the compensation of, one or more Assistants to
the Chairman, one or more Assistants to the
President, and one or more Assistants to the Vice
Presidents, each of whom shall hold office during
the pleasure of the Chief Executive Officer, and
shall perform such duties as the Chief Executive
Officer may assign.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
-------------------------------------
SECTION 1. Contracts. The Board of
Directors may authorize any officer or officers,
agent or agents, to enter into any contract or
execute and deliver any instrument in the name of
and on behalf of the corporation, and such
authority may be general or confined to specific
instances.
SECTION 2. Loans. No loans shall be
contracted on behalf of the corporation and no
evidences of indebtedness shall be issued in its
name unless authorized by a resolution of the
Board of Directors. Such authority may be general
or confined to specific instances.
SECTION 3. 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
resolution of the Board of Directors.
SECTION 4. 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 depositories as the Board of Directors may
select.
ARTICLE VII
CERTIFICATE FOR SHARES AND THEIR TRANSFER
-----------------------------------------
SECTION 1. Certificates for Shares.
Certificates representing shares of the
corporation shall be in such form as shall be
determined by the Board of Directors. Such
certificates shall be signed by the Chief
Executive Officer, President, or any Vice
President and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant
Secretary. Any or all of the signatures on the
certificate may be a facsimile. In case any
officer, transfer agent, or registrar who has
signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be
such officer, transfer agent, or registrar before
such certificate is issued, it may be issued by
the corporation with the same effect as if such
person were such officer, transfer agent, or
registrar at the date of issue. 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 ledger of the
corporation.
All certificates surrendered to the
corporation for transfer shall be canceled and no
new certificate shall be issued until the former
certificate for a like number of shares shall have
been surrendered and canceled, except that in the
case of a lost, destroyed or mutilated
certificate, a new one may be issued therefor upon
such terms and indemnity to the corporation as the
Board of Directors may prescribe.
SECTION 2. Transfer of Shares.
Transfer of shares of the corporation shall be
made only on the stock ledger of the corporation
by the holder of record thereof or by such
person's legal representative, who shall, if so
required, furnish proper evidence of authority to
transfer, or by such person's attorney thereunto
authorized by power of attorney duly executed and
filed with the Secretary of the corporation, and
on surrender for cancellation of the certificate
for such shares. The person in whose name shares
stand on the books of the corporation shall be
deemed by the corporation to be the owner thereof
for all purposes.
ARTICLE VIII
FISCAL YEAR
-----------
The fiscal year of the corporation shall
begin on the first day of November and end on the
thirty-first day of October in each year.
ARTICLE IX
DIVIDENDS
---------
The Board of Directors may from time to
time declare, and the corporation may pay,
dividends on its outstanding shares in the manner
and upon the terms and conditions provided by law
and by the Articles of Incorporation.
ARTICLE X
SEAL
-----
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 XI
WAIVER OF NOTICE
----------------
Whenever any notice is required to be
given to any stockholder or director of the
corporation under the provisions of these Bylaws
or under the provisions of the Articles of
Incorporation or under the provisions of the
Delaware General Corporation Law, a waiver thereof
in writing, signed at any time by the person or
persons entitled to such notice of the meeting,
shall be deemed equivalent to the giving of such
notice.
ARTICLE XII
AMENDMENTS
-----------
These Bylaws may be amended or repealed
and new Bylaws may be adopted by the Board of
Directors at any regular or special meeting
thereof only with the affirmative vote of at least
80% of the total number of Directors.
Exhibit 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectuses constituting part of the Registration
Statements on Form S-3 and in the Registration Statements on
Form S-8 listed below of Harnischfeger Industries, Inc. of
our report dated November 28, 1995 appearing in the Current
Report on Form 8-K dated December 8, 1995, which is
incorporated by reference in this Annual Report on
Form 10-K.
1. Registration Statement on Form S-8 (Registration No.
33-42833)
2. Registration Statement on Form S-8 (Registration No.
33-23985)
3. Registration Statement on Form S-8 (Registration No.
33-18393)
4. Registration Statement on Form S-3 (Registration No.
33-51436)
5. Registration Statement on Form S-8 (Registration No.
33-46738)
6. Registration Statement on Form S-8 (Registration No.
33-46739)
7. Registration Statement on Form S-8 (Registration No.
33-46740)
8. Registration Statement on Form S-8 (Registration No.
33-57209)
9. Registration Statement on Form S-3 (Registration No.
33-57979)
10. Registration Statement on Form S-8 (Registration No.
33-58087)
PRICE WATERHOUSE LLP
January 29, 1996
Exhibit 23(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in Harnischfeger Industries,
Inc.'s Form 10-K of our report dated March 25, 1994,
included in Harnischfeger Industries, Inc.'s Form 8-K dated
December 8, 1995.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania,
January 29, 1996
EXHIBIT 21
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
SUBSIDIARIES
October 31, 1995
Harnischfeger Industries, Inc. is publicly held and has no parent.
The following subsidiaries are wholly-owned except as noted below:
Description (1)
<S> <C>
Beloit Corporation (2) Delaware
Beloit Canada Ltd./Ltee (3). Canada
Beloit Industrial Ltda. (4) Brazil
Beloit Poland S.A. (5) Poland
BWRC, Inc. Delaware
Beloit Asia Pacific Pte.Ltd Singapore
Beloit Italia S.p.A.. Italy
Beloit Lenox GmbH Germany
Beloit Walmsley Limited United Kingdom
J&L Fiber Services, Inc. Wisconsin
Optical Alignment Systems and Inspection Services, Inc. New Hampshire
Sandusky International, Inc.(6) Ohio
Harnischfeger Corporation Delaware
Birmingham Crane & Hoist, Inc. Alabama
Blooma Engineering Pte. Limited (7) Singapore
Harnischfeger of Australia Pty. Ltd. (8) Australia
Harnischfeger do Brasil Comercio e Industria Limitada Brazil
Harnischfeger de Chile Limitada Chile
Harnischfeger Corporation of Canada, Ltd. Canada
Harnischfeger GmbH (9) Germany
Harnischfeger (South Africa) (Proprietary) Limited South Africa
Harnischfeger Venezuela, S.A. Venezuela
HCHC, Inc. Delaware
Harnischfeger Contract Services, Inc. Delaware
Harnischfeger Holdings Limited United Kingdom
Harnischfeger Mexico Holdings S.A. de C.V. (10) Mexico
SPH Crane and Hoist, Inc. Delaware
Joy Technologies Inc.. Delaware
Joy Manufacturing Company (Africa)(Pty)Ltd. South Africa
Joy Manufacturing Company Pty. Limited Australia
Joy MM Holdings (U.K.) Limited United Kingdom
Joy Manufacturing Company (U.K.)Limited United Kingdom
Joy Technologies Canada Inc. Canada
</TABLE>
- --------------------------
(1) Where the name of a subsidiary is indented, it is
wholly-owned by its immediate parent listed at the margin
above it, unless otherwise indicated.
(2) Harnischfeger Industries, Inc. owns 80% of the voting
securities of Beloit Corporation.
(3) Beloit Corporation owns 80% and Joy Technologies Canada
owns 20% of the voting securities of Beloit Canada Ltd./Ltee.
(4) Beloit Corporation owns 45% of the voting quotas and
100% of the non-voting quotas of Beloit Industrial Ltda.
This gives Beloit Corporation an 82.1% ownership of Beloit
Industrial Ltda.
(5) Beloit Corporation owns 99.6% of the voting securities
of Beloit Poland S.A.
(6) BWRC, Inc. owns 50% of the voting securities of Sandusky
International, Inc.
(7) Harnischfeger Corporation owns 85% of Blooma Engineering
Pte. Ltd.
(8) Harnischfeger Corporation owns 75% of the voting
securities of Harnischfeger of Australia Pty. Ltd.
(9) Harnischfeger Corporation owns 75% and Harnischfeger of
Australia Pty. Ltd. owns 25% of the voting securities of
Harnischfeger GmbH.
(10) HCHC, Inc. owns 90% and Harnischfeger Corporation owns
10% of the voting securities of Harnischfeger Mexico Holdings
S.A. de C.V.
EXHIBIT 11
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
CALCULATIONS OF EARNINGS (LOSS) PER SHARE
(Dollar amounts in thousands except per share amounts)
Year Ended October 31,
Determination of Number of Shares 1995 1994
--------------------------------- -------- -------
<S> <C> <C>
Average shares outstanding............................... 46,218,144 43,716,464
========== ===========
Net Income (Loss)
------------------
Income (Loss) from Continuing Operations................. $92,120 $ 36,593
Income (Loss) from Discontinued Operations,
net of applicable income taxes......................... (31,235) (3,982)
Extraordinary Loss on Retirement of Debt, net of
applicable income taxes................................ (3,481) (4,827)
Cumulative Effect of Accounting Change, net of applicable
taxes and minority interest............................ - (81,696)
-------- --------
Net Income (Loss)........................................ $ 57,404 $(53,912)
======== ========
Earnings (Loss) Per Share
-------------------------
Income (loss) from continuing operations................. $ 1.99 $ 0.84
Income (loss) from discontinued operations............... (0.67) (0.09)
Extraordinary loss on retirement of debt................. (0.08) (0.11)
Cumulative effect of accounting change................... - (1.87)
------- --------
Net Income (Loss) Per Share.............................. $ 1.24 $(1.23)
======= ========
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT 11
HARNISCHFEGER INDUSTRIES, INC.
CALCULATIONS OF EARNINGS (LOSS) PER SHARE
(Dollar amounts in thousands except per share amounts)
Year Ended October 31,
----------------------------
<S> <C>
Determination of Number of Shares 1993
--------------------------------- --------
Average shares outstanding............................... 44,393,043
===========
Net Income (Loss)
------------------
Income (Loss) from Continuing Operations................. $(27,450)
Income (Loss) from Discontinued Operations,
net of applicable income taxes......................... 7,760
Extraordinary Loss on Retirement of Debt, net of
applicable income taxes................................ -
Cumulative Effect of Accounting Change, net of applicable
taxes and minority interest............................ -
---------
Net Income (Loss)........................................ $(19,690)
==========
Earnings (Loss) Per Share
-------------------------
Income (loss) from continuing operations................. $(0.62)
Income (loss) from discontinued operations............... 0.18
Extraordinary loss on retirement of debt................. -
Cumulative effect of accounting change................... -
-------
Net Income (Loss) Per Share.............................. $(0.44)
=======
</TABLE>
