<PAGE>
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 [Fee Required]
For the fiscal year ended December 31, 1994
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Commission file #0-2129
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THE RAYMOND CORPORATION
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(Exact name of registrant as specified in its charter)
New York 15-0372290
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Greene, New York 13778
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (607) 656-2311
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Securities registered pursuant to Section 12(b) of the Act:
None
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Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.50 par value per share
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6.50% Convertible Subordinated Debentures Due 2003
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(Title of class)
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (section 229.405 of this chapter) 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
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As of March 10, 1995, aggregate market value of the voting stock held by
non-affiliates of the registrant was $ $88,995,299.
There were 6,343,487 shares of the registrant's Common Stock, $1.50 par value,
outstanding at that date.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual shareholders report for the year ended December 31, 1994
are incorporated by reference into Parts I, II and IV.
Portions of the proxy statement for the annual shareholders meeting to be held
April 29, 1995 are incorporated by reference into Part III.
Certain documents previously filed with the Securities Exchange Commission have
been incorporated herein by reference in Part IV.
Total number of pages in filing is 326
Exhibit Index is located on pages 17-19.
<PAGE>
THE RAYMOND CORPORATION, GREENE, NEW YORK
Form 10-K
PART I
Item 1. Business
(a) The Company (as used herein the term "Raymond" refers to The Raymond
Corporation alone, and the term "Company" refers to The Raymond
Corporation and its subsidiaries, both consolidated and unconsolidated,
and direct and indirect) operates predominately in one business segment,
that being the design, manufacture, sale, leasing and short-term rental
of materials handling equipment. Revenues are realized predominately
through its North American Dealer Network although the Company has
expanded in both the domestic and international markets with minimal
capital investment through distribution and O.E.M. (Original Equipment
Manufacturer) supply agreements.
Raymond was organized in 1840 as Lyon Iron Works, in Greene, New York,
and in 1922 George G. Raymond, Sr. purchased it. Raymond produced its
first materials handling product in 1930 under the Lyon Iron Works name.
In 1941, Raymond was renamed Lyon-Raymond Corporation, and in 1951, was
renamed The Raymond Corporation. Shares were first offered to the public
in 1956.
The major components of the Company's international operations are
Raymond Industrial Equipment, Limited, a wholly-owned Canadian
manufacturing subsidiary, and G.N. Johnston Equipment Co. Ltd., the
exclusive Canadian distributor that is 45% owned by R.H.E. Ltd., a
wholly-owned Canadian subsidiary of Raymond. Foreign exchange exposure
on international operations is limited primarily to the Canadian dollar
and is minimized through the purchase of foreign currency exchange
contracts.
In 1991, Raymond and Mitsubishi Caterpillar Forklift America Inc.
("MCFA") signed an agreement to create a joint venture company. The
joint venture company, known as Material Handling Associates, Inc.
("MHA"), is a separate enterprise which designs, develops, and sells
products to be manufactured exclusively by the Company and distributed
exclusively through MHA dealers using Caterpillar trademarks. This
venture is intended to expand distribution of products manufactured by
the Company and to provide additional opportunities for the sale of
replacement parts and accessories.
During 1992, Raymond entered into an agreement with B.T. Industries AB
("BT") of Mjolby, Sweden, a European manufacturer and distributor of
lift trucks. Under the agreement, the Company manufactures a European
version of the SWING-REACH/R/ truck for distribution by BT. In
addition, the agreement grants BT the non-exclusive right to distribute
this product in other markets in which the Company currently does not
participate.
<PAGE>
In 1994, Raymond and MCFA signed an agreement to purchase for resale
battery powered, electric low lift pallet trucks known as walkies,
similar to those currently manufactured by the Company for MHA. MCFA
markets the walkies under the Mitsubishi trademark throughout the United
States, Canada, Mexico, Central and South America. Also in 1994, Raymond
and MCFA signed an agreement whereby the Company manufactures a sit-down
counterbalanced electric forklift truck exclusively for sale to MCFA.
In 1994, Raymond entered into an agreement with Jungheinrich A.G.
("Jungheinrich") of Hamburg, Germany, the second largest manufacturer of
lift trucks in Europe. Under the agreement, the Company manufactures a
European version of the EASi orderpicker truck for distribution by
Jungheinrich. In addition, the agreement grants Jungheinrich the
non-exclusive right to distribute this product in other markets in which
the Company currently does not participate.
During 1994, Raymond and Remstar International Inc. ("Remstar"), of
Westbrook, Maine, signed an agreement whereby the Company manufactures
horizontal carousels and parts for distribution by Remstar. Pursuant to
the agreement, the Company agrees to use Remstar as its exclusive
distributor in the United States, Canada and Mexico but retains the
right to sell parts, accessories and equipment in the United States,
Canada and Mexico for use with the Company's horizontal carousels sold
prior to this agreement.
In 1994, the Company expanded its Dealer Network into Columbia and Costa
Rica. Existing markets in Mexico were expanded to include additional
sales territories.
The Company has equity investments in certain members of the Company's
Dealer Network and, in 1994, increased equity investments in dealerships
with principal offices in Missouri and Utah.
During 1994, Raymond formed Dockstocker Corporation, a New York
corporation, owned by Raymond Sales Corporation, a 100% owned subsidiary
of Raymond. Dockstocker Corporation will market and sell a stand-up end
control counterbalanced forklift truck featuring flexible dockstance
operator configuration designed to maximize loading productivity in the
dock environment.
(b) Financial Information about Industry Segments
"Note M-Business Segment Information" on Page 36 of the Annual Report
to Shareholders for the year ended December 31, 1994 is incorporated
herein by reference.
(c) Narrative Description of Business
(i) Principal Products and Services
The Company's products are marketed principally under the RAYMOND/R/
trademark, and fall into the category of unit load and case pick load
handling.
<PAGE>
The Company's unit load and case pick load products are
operator-controlled machines used to move a load from point A to point
B. The unit load and case pick load product line includes orderpickers,
walkies, sideloaders, straddle, SWING-REACH/R/ trucks, and
REACH-FORK/R/ trucks for narrow aisle and very narrow aisle
operation, and counterbalanced PACER/TM/ trucks.
In 1990, a new line of orderpickers with advanced microprocessor control
was introduced by the Company. The orderpickers significantly reduce the
high costs and time involved to pick orders. Total programmability,
through the intellidrive/R/ control system, allows truck
performance to be tailored to each user's needs to optimize
productivity. The intellidrive system utilizes microchip technology
developed by the Company and is designed to replace control systems
based on hydraulic and mechanical technologies commonly utilized in the
industry. The intellidrive system enhances the trucks' performance
characteristics and productivity and has allowed the Company to reduce
manufacturing costs through reduced material and labor expense.
In 1991, the Company introduced a series of products known as EASi
products - Ergonomically Advanced Systems with intellidrive. This new
line of trucks is designed for greater operator comfort and enhanced
productivity. The trucks included in this series are the operator-up
SWING-REACH truck, the orderpicker and the narrow aisle REACH-FORK
truck. The new EASi REACH-FORK truck has unequaled capacity at elevated
heights and provides greater space utilization and increased
productivity.
Also in 1991, five new walkies were introduced featuring a top-mounted
operator's steering handle and other innovations.
In 1992, the Company introduced a new base model version of the
orderpicker and REACH-FORK truck.
In 1993, a new generation of the EASi REACH-FORK truck and EASi
Orderpicker were introduced, designed for greater operator comfort and
productivity. The Company also introduced regenerative braking to allow
recycling of energy back into the battery, improving overall efficiency
while extending component life. The REACH-FORK truck also has an
innovative motor impeller design, ensuring a superior air flow system
which improves component life and further enhances operator comfort.
Also in 1993, the Company introduced an option on the EASi REACH-FORK
truck and EASi Orderpicker with the SMARTi/TM/ information
system. The SMARTi information system enables the customer to easily
obtain reports on the truck's activities by shift, day or week to help
evaluate productivity.
In addition, two new walkies were introduced in 1993. The 8,000 pound
capacity walkie and the transistor-controlled 4,000 pound capacity
walkie are designed to increase productivity.
In 1994, the Company introduced a new walkie handle design to provide
greater operator comfort, convenience and productivity. The design
difference can make repeated movements more comfortable.
<PAGE>
Also in 1994, two new products were added to the EASi REACH-FORK/R/
line featuring upgradeability from 24 volt operation, and an optional
dockstance operator compartment. In addition, the EASi REACH-FORK
family was expanded to include a four directional truck for use in
handling both standard pallets and long loads, and additional mast
selections for very tall single and double deep reach applications.
All of these vehicles, controls and systems are sold through a network
of dealerships, which have multiple full service facilities across their
trading area and are supported by a repair and replacement parts
service. The Company's replacement parts and accessories business
supports the base of the Company's lift trucks in service and provides
new parts and service to customers who have service needs for
non-Company equipment. In addition, the Company rebuilds and sells
electric motors and other components for replacement use, offering its
customers a cost-effective alternative to purchasing a new component for
both Company and non-Company equipment.
Raymond Leasing Corporation, a wholly-owned subsidiary of the Company,
offers lease financing, short-term rentals and sales of used equipment
and serves as a marketing vehicle for the Company's products by
providing the Company's Dealer Network with flexible leasing programs.
The Company presently manufactures lift truck masts for two original
equipment manufacturer (O.E.M.) customers.
The product and service categories of the Company's business segment are
shown with percentage of revenues contributed in "Note M-Business
Segment Information" on page 36 of the Annual Report to Shareholders for
the year ended December 31, l994, which is incorporated herein by
reference.
(ii) Status of Announced Products Not Yet Introduced
The Company has not made a public announcement about any new products or
industry segments that will require a material investment of assets or
that are otherwise material. However, as in prior years, the Company
expects to introduce new and enhanced models through its normal research
and development activities.
(iii) Sources and Availability of Raw Materials
The Company procures components from the best available sources of
supply, which include a broad range of internal manufacturing
capabilities. Certain components of its products are fabricated from
bar, strip, rod and plate steel. Individual decisions to make or buy are
based upon numerous factors, the more significant being quality, cost,
lead time, and technological sensitivity.
The Company has no significant long-term commitments with any supplier
and believes its supply arrangements are adequate for current and
presently foreseeable needs. Certain electric motors, forks, castings,
hydraulic and electronic components are made to Company specifications
and are purchased from single sources. Many single sources are backed up
by agreements to allow manufacture by alternate sources or by the
availability of similar standard components from alternate sources.
<PAGE>
Continued effort is made by the Company's Engineering and Purchasing
Departments to establish and improve the strong working relationships
between the Company and its suppliers.
The Company's products vary in capacity, function, and load capability;
thus, specifications for a particular order require that many of the
components are only made to orders booked. Commonly used parts are
manufactured or purchased and stocked to minimize production time.
Finished products are normally assembled only to orders booked. Every
effort is made to keep inventories low, while meeting competitive
delivery commitments.
(iv) Patents, Trademarks, Licenses, Franchises and Concessions Held
The Company has numerous registered patents in the United States, Canada
and several European countries with respect to various inventions,
including the intellidrive/R/ control system. Although the Company
considers that, taken as a whole, the rights under these patents, which
expire from time to time, are a valuable asset, it does not regard its
business as being materially dependent upon any single patent or any
group of patents.
The Company also has a number of registered and common law trademarks
and service marks for its products. The trade and service marks, taken
as a whole, are considered by the Company to be important to its
business.
(v) Seasonality of Business
The Company does not recognize its business segment or any of its
products or services as seasonal.
(vi) Working Capital Practices
The Company pursues and the industry demands no special business
practices with respect to working capital items.
(vii) Customers
The Company distributes its products principally through its Dealer
Network. These Dealers sell the Company's products to the end users,
which represent a broad cross-section of industry. They include public
and private businesses engaged in the manufacture, storage and/or
distribution, both wholesale and retail, of a wide variety of products
which include: materials, food, textiles, paper, steel, rubber,
electrical components, equipment and machinery.
In 1992, the Company established its National Accounts Program, which
offers selected large customers a single purchasing and financing source
for their materials handling equipment and service needs. Delivery,
installation and after-sale service are provided by the Company's Dealer
Network. The program focuses on fleet users of lift trucks with
facilities in several areas of the country.
<PAGE>
No single customer (end user) of the Company accounts for 10% or more of
the Company's total consolidated revenues.
(viii) Backlog
As of December 31, 1994, the backlog of orders aggregated approximately
$78,119,000 compared with a backlog of approximately $52,297,000 on
December 31, 1993. No assurance can be given that the backlog will
continue at any particular level. The Company reasonably expects to fill
the backlog of orders within the current fiscal year, unless a longer
production lead time has been requested by the customer. The Company
believes that its current backlog can generally be considered firm; no
significant cancellations are expected.
(ix) Contracts Subject to Termination or Renegotiation
There is no material portion of the business that is subject to
renegotiation of profits or termination of contracts or subcontracts at
the election of the Government.
(x) Competition
While competitive conditions vary from product to product, all of the
Company's products are marketed in the highly competitive manufacturing
and warehousing materials handling systems markets. Historically,
Raymond's strength has been in providing superior application, specific
product performance, service and reliability.
The Company is a major competitor in all market segments in which it
participates, generally competing with other major national and
international manufacturers. Many small manufacturers compete with a few
major manufacturers in a highly fragmented market. In addition to these
direct competitors, a number of other products compete indirectly for
the industrial consumer's materials handling dollars. The Company
believes it is the only North American manufacturer which designs and
manufactures its own vehicle controls. This allows the Company to be a
leader in developing and applying new control technologies, responding
more quickly to user demands and trends, and differentiating its
products with respect to key competitive factors such as productivity
and ergonomics.
The Company believes it is the only company offering its comprehensive
array of materials handling systems, products and services to the
markets it serves.
Because of the Company's broad product mix, it has no one single
competitor but rather various competitors across the unit load and case
pick load handling category.
In recent years, the Company has introduced a new enhanced line of
orderpickers, reach trucks, turret trucks and walkies which have
solidified the Company's position in the unit load and case pick load
handling category. Over time, several manufacturers have emerged as key
competitors in this category, including U.S.-based Crown Equipment
Corporation, Clark Material Handling Company, a wholly-owned subsidiary
of Terex Corporation, and the Yale Industrial and Hyster subsidiaries of
North American Coal Company.
<PAGE>
The Company no longer considers itself a competitor in the automated
storage and retrieval market since its business activity is now limited
to the manufacture of horizontal carousels for a single original
equipment manufacturer (O.E.M.) customer
(xi) Research and Development
The cost of the Company's research and development program amounted to
$3,958,000 in 1994 compared to $4,251,000 in 1993, and $2,557,000 in
1992. The Company works closely with customers in the development of
product application to fulfill a particular materials handling
requirement.
(xii) Compliance with Environmental Laws and Regulations
The Company's production facilities and operations are subject to a
variety of federal, state and local environmental and job safety laws
and regulations, including various federal, state and local laws,
ordinances and regulations pursuant to which an owner of real property
may become liable for the costs of removal or remediation of certain
hazardous or toxic substances located on or in such property.
Environmental laws often impose liability without regard to whether the
owner knew of, or was responsible for, the presence of such hazardous or
toxic substances. The presence of such substances, or the failure to
remediate the presence of such substances properly, may adversely affect
the owner's ability to sell such real estate or to borrow using such
real estate as collateral. In particular, the federal Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA")
imposes joint and several liability for clean-up and enforcement costs,
without regard to fault or to the legality of the original conduct, on
current or predecessor owners or operators of a site. Under CERCLA, an
owner or operator of the site may be liable for all or part of the costs
to clean up sites at which waste has been released by the owners, the
owner's lessees, or by predecessor or successor owners. In addition,
liability extends to persons/companies which generated the hazardous
substances located on the property, or arranged for disposal of such
substances. The Company believes that it is in compliance in all
material respects with all relevant federal, state and local rules and
regulations and regulations regarding hazardous or toxic substances. No
assurances, however, can be given that the Company is aware of all
potential environmental liabilities, or that there are not material
environmental liabilities of which the Company is not aware.
(xiii) Employees
The Company had 1,498 employees on December 31, 1994.
(d) Financial Information about Foreign and Domestic Operations and
Export Sales
(1) "Note M-Business Segment Information" on Page 36 of the Annual
Report to Shareholders for the Year ended December 31, 1994 is
incorporated herein by reference.
(2) The Company has no extraordinary risks attendant to its foreign
operations.
<PAGE>
Item 2. Properties
The Company's corporate headquarters and main manufacturing facility are
located in an approximately 70,000 square foot office building and
approximately 325,000 square foot adjacent plant in Greene, New York,
both of which are owned by the Company.
Expansion has recently been completed on a modern 138,000 square foot
steel and masonry manufacturing and office building the Company owns in
Brantford, Ontario, Canada.
The Company owns a modern one-story facility located in East Syracuse,
New York which houses the Company's Parts Distribution Center and a
Raymond dealership. The facility, made of steel and masonry
construction, contains approximately 61,000 square feet of warehouse and
office space. Approximately 9,300 square feet of the warehouse is
presently occupied by Raymond Leasing Corporation's rental department
and truck repair facility.
The Company currently leases approximately 10,301 square feet of space
from The Greene Central School District in Greene, New York for use as a
training center. The lease, for a five year period, expires December,
1995.
All of the Company's properties and machinery are believed to be well
maintained and in good condition. The Company estimates that its
production capacity is adequate for the business anticipated during the
next three or four years.
Item 3. Legal Proceedings
The Company is currently defending approximately 70 products liability
and similar lawsuits involving industrial accidents. Management believes
that none of these will individually have a material adverse effect on
the Company. Taken as a whole, the damages claimed would have a material
adverse effect on the Company but actual costs of judgments, settlements
and costs of defense have not had such an effect to date. The Company
views these actions, and related expenses of administration, litigation
and insurance, as part of the ordinary course of its business. The
Company uses a combination of self-insured retention and insurance, paid
for in part by its dealers, to manage these risks and believes that the
insurance coverage and reserves established for self-insured risks are
adequate. The Company's dealers contribute to the funding of the
Company's products liability program and, in turn, the Company
indemnifies the dealers against products liability expense and manages
products liability claims. The Company has a policy of aggressively
defending these lawsuits which generally take several years to
ultimately resolve.
<PAGE>
The Company is also one of sixteen remaining defendants in a private
environmental lawsuit. The five plaintiffs in the case are Cooper
Industries, Inc., Keystone Consolidated Industries, Inc., The Monarch
Machine Tool Co., Niagara Mohawk Power Corporation and Overhead Door
Corporation. Plaintiffs have been ordered by the United States
Environmental Protection Agency to perform a Remedial
Investigation/Feasibility Study with respect to a 20 acre site located
in Cortland, New York and are seeking contribution from each of the
defendants. Plaintiffs have alleged that each defendant is a
"Potentially Responsible Party" as that term is defined in environmental
statutes. Pretrial discovery is expected to continue through the Fall of
1995. The site involved in the litigation was a manufacturing site for
many decades prior to 1971. From 1971 to 1985, a scrap metal processing
operation was conducted at the site. From 1975 to 1982, the owners of
the scrap metal processing operation purchased scrap metal from the
Company. The plaintiffs have alleged that the scrap metal purchased from
the Company was coated with certain solvents and/or cutting oils.
Plaintiffs have the burden of proving the nature and extent of the
Company's contribution to the site, as well as the burden of proving
what portion of the material delivered to the site was "hazardous" as
that term is defined in the environmental statutes. The Company is
aggressively defending the claim and does not believe it is likely to
have a material adverse effect on the Company.
Item 4. Submission of Matters to a Vote of Security Holders
During the fourth quarter of 1994, no matter was submitted to a vote of
security holders.
<PAGE>
ADDITIONAL INFORMATION REQUIRED IN PART I:
Executive Officers of the Registrant
The names, ages and positions of all the Executive Officers of the
Company, as of March 10, 1995, are listed below together with their
business experience during the past five years. Officers are elected
annually by the Board of Directors. There are no family relationships
among these officers or any Director or Executive Officer of the
Company, nor any arrangement or understanding between any officer and
any other person pursuant to which the officer was elected.
<TABLE>
<CAPTION>
Name and Position Age Business Experience
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<S> <C> <C>
George G. Raymond, Jr. 73 Elected Chairman of the Board
Chairman of the Board and Director prior to 1990.
Ross K. Colquhoun 64 Appointed and elected
President, Chief Executive Officer President and Chief Executive
and Director Officer prior to 1990.
Heidi J. Bowne 41 Appointed Vice President-
Vice President-Human Resources Human Resources in 1990
and elected in 1991; Formerly
Manager, Human Resources
(1989-1990)
James W. Davis 49 Appointed Vice President-
Vice President-Engineering Engineering in 1990 and
elected in 1991; Formerly
Director-Engineering
(1989-1990).
Jerome R. Dinn 52 Appointed Vice President-
Vice President - Sales & Quality Sales and Quality in 1990 and
elected in 1991; Formerly,
Manager-Production Systems,
G.N. Johnston Equipment Co.
Ltd. (1984-1990).
John F. Everts 36 Appointed and elected
Corporate Controller Corporate Controller in 1990.
Margaret L. Gallagher 47 Elected Vice President-
Vice President-Marketing Marketing in 1990.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name and Position Age Business Experience
----------------- --- -------------------
<S> <C> <C>
William B. Lynn 49 Appointed and elected
Executive Vice President Executive Vice President
in 1994; Elected Vice
President-Finance prior to
1990.
Patrick J. McManus 40 Appointed and elected
Treasurer Treasurer in 1990; Appointed
and elected President,
Raymond Leasing Corporation
prior to 1990. Raymond
Leasing Corporation is a
wholly-owned leasing
subsidiary of the Company.
James J. Malvaso 44 Appointed and elected Vice
Vice President-Operations President-Operations in 1993;
Vice President of Operations
of Pfaudler-U.S. Inc.(1990-
1993), a manufacturer of
glass-lined reactors,
pressure vessels and
accessories.
Paul J. Sternberg 61 Appointed and elected Vice
Vice President, President in 1992; Appointed
General Counsel & and elected General Counsel
Secretary and Secretary in 1991;
Formerly Associate General
Counsel (1989-1990).
</TABLE>
<PAGE>
PART II
Item 5. Market for the Company's Common Stock and Related Security Holder
Matters
Common Stock Market Prices and Dividends and related securities
matters, as discussed on Pages 7, 9, 10, 14, 29, 38 and 42
of the Annual Report to Shareholders for the year ended
December 31, 1994, included in this Form 10-K Annual Report as
Exhibit 13 are incorporated herein by reference.
Item 6. Selected Financial Data
Selected Financial Data of The Raymond Corporation and consolidated
subsidiaries, reported on Pages 9 and 10 of the Annual Report to
Shareholders for the year ended December 31, 1994, included in this
Form 10-K Annual Report as Exhibit 13 are incorporated herein by
reference.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Management's Discussion and Analysis of Financial Condition and
Results of Operations on Pages 11 through 15 of the Annual Report to
Shareholders for the year ended December 31, 1994, included in this
Form 10-K Annual Report as Exhibit 13 are incorporated herein by
reference.
Item 8. Financial Statements and Supplementary Data
The consolidated Financial Statements of The Raymond Corporation
included on Pages 16 through 38 of the Annual Report to Shareholders
for the year ended December 31, 1994, included in this Form 10-K
Annual Report as Exhibit 13 are incorporated herein by reference.
Quarterly Results of Operations on Page 38, Note M and Supplemental
Information on Changing Price Levels on Page 14 of the Annual Report
to Shareholders for the year ended December 31, 1994, included in
this Form 10-K Annual Report as Exhibit 13 are incorporated herein by
reference.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
Not applicable.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
Information regarding Directors required by Items 401 and 405 of
Regulation S-K is disclosed under the captions "Nominees for Election
as Directors" and "Directors Continuing in Office" in the Proxy
Statement for the Annual Meeting of Shareholders to be held April 29,
1995 included as Exhibit 99 hereto, and is incorporated herein by
reference. Information regarding Executive Officers is included in
Part I of this Form 10-K and incorporated herein by reference thereto.
Item 11. Executive Compensation
Information regarding compensation of Directors and Executive Officers
is disclosed under the captions "Directors Remuneration; Attendance"
and "Executive Compensation" of the Proxy Statement for the Annual
Meeting of Shareholders to be held April 29, 1995, included as Exhibit
99 hereto, and is incorporated herein by reference thereto.
Item 12. Security Ownership of Certain Beneficial Owners and Management
This information is disclosed under the captions "Security Ownership
of Certain Beneficial Owners" and "Security Ownership of Management"
in the Proxy Statement for the Annual Meeting of Shareholders to be
held on April 29, 1995 included as Exhibit 99 hereto, and is
incorporated herein by reference thereto.
Item 13. Certain Relationships and Related Transactions
This information is disclosed in the 1995 Proxy Statement for the
Annual Meeting of Shareholders in the section captioned "Certain
Relationships and Related Transactions" included as Exhibit 99 hereto,
and is incorporated herein by reference thereto.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Documents filed as part of this report:
1. The following financial statements of the Registrant and its
subsidiaries, presented on pages 16 to 38 of the Registrant's 1994 Annual Report
to Shareholders, which is filed with this Form 10-K Annual Report as Exhibit 13,
are incorporated herein by reference.
<TABLE>
<CAPTION>
Annual
Report Page
_________________
<S> <C>
The Raymond Corporation and Subsidiaries:
Report of Independent Auditors 16
Consolidated Balance Sheets
December 31, 1994, 1993, 1992 17-18
Consolidated Statements of Income - Years ended
December 31, 1994, 1993, 1992 19
Consolidated Statements of Shareholders' Equity -
Years ended December 31, 1994, 1993, 1992 20
Consolidated Statements of Cash Flows - Years
ended December 31, 1994, 1993, and 1992 21-22
Notes to Consolidated Financial Statements 23-38
</TABLE>
2. The following Consolidated Financial Statement Schedules of The
Raymond Corporation and Subsidiaries are required by Item 14(d):
<TABLE>
<CAPTION>
10-K
Report Page
-----------
<S> <C>
Schedule I - Condensed Financial Information 21 - 26
of Registrant - The Raymond Corporation
Years ended December 31, 1994,
1993, 1992
Schedule II Valuation and Qualifying Accounts 27 - 29
Years ended December 31, 1994,
1993, 1992
</TABLE>
<PAGE>
All other schedules for which provision is made in Regulation S-X of
the Securities and Exchange Commission have been omitted because they
are not applicable or not required under the related instructions or
because the information has been furnished elsewhere in the financial
statements.
3. See Exhibit Index at pages 17-19 of this Form 10-K.
(b) No report on Form 8-K was filed by the registrant during the fourth
quarter of its fiscal year ending December 31, 1994.
<PAGE>
EXHIBIT INDEX
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Exhibit
# Description
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3.1 Restated and Amended Certificate of Incorporation of The Raymond
Corporation. Filed as Exhibit 3.1 to the 1991 Form 10-K Annual Report of
the Company and incorporated herein by reference.
3.2 Bylaws of the Company, as amended, dated January 1, 1993. Filed as Exhibit
3.2 to the 1992 Form 10-K Annual Report of the Company and incorporated
herein by reference.
4.2 Form of Indenture between the Company and The Chase Manhatten Bank, N.A.,
as Trustee, and the 6.50% Convertible Subordinated Debenture due 2003,
incorporated herein by reference to Registration Statement on Form S-3,
Registration No. 33-71480, effective November 12, 1993.
10.1 Joint Venture Agreement dated August 1, 1991 between Caterpillar
Industrial Inc., and The Raymond Corporation. Filed as Exhibit 10.18 to
the 1991 Form 10-K Annual Report of the Company and incorporated herein by
reference.
10.2 First Amendment to Joint Venture Agreement dated August 1, 1991 between
Caterpillar Industrial Inc. and The Raymond Corporation dated October 22,
1992. Filed as Exhibit 10.18 to the 1992 Form 10-K Annual Report of the
Company and incorporated herein by reference.
10.3 Second Amendment to Joint Venture Agreement dated August 1, 1991 between
Caterpillar Industrial Inc. and The Raymond Corporation.
10.4 Third Amendment to Joint Venture Agreement dated August 1, 1991 between
Caterpillar Industrial Inc. and The Raymond Corporation.
10.5 Revolving Credit and Term Loan Agreement dated December 21, 1994
among The Raymond Corporation, Raymond Leasing Corporation and
Chemical Bank.
10.6 Revolving Credit and Term Loan Agreement dated February 14, 1995
among The Raymond Corporation, Raymond Leasing Corporation and The
Chase Manhattan Bank, N.A.
10.7 Raymond Leasing Corporation Senior Note Agreement dated as of March 1,
1987. Filed as Exhibit 10.6 to the 1993 Form 10-K Annual Report of the
Company and incorporated herein by reference.
10.8 Raymond Leasing Corporation Revolving Line of Credit dated April 30,
1992. Filed as Exhibit 10.7 to the 1993 Form 10-K Annual Report of the
Company and incorporated herein by reference.
10.9 Raymond Leasing Corporation Senior Note Agreement dated as of
November 1, 1991. Filed as Exhibit 10.22 to the 1992 Form 10-K Annual
Report of the Company and incorporated herein by reference.
<PAGE>
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
---------------------------------------------
Exhibit
# Description
------- -----------
10.10 Consulting Agreement effective as of January 1, 1995 between Lee J. Wolf
and The Raymond Corporation.
10.11 Consulting Agreement effective as of January 1, 1995 between George G.
Raymond, Jr. and The Raymond Corporation.
10.12 Employment Agreement dated as of November 3, 1987 between Ross K.
Colquhoun and The Raymond Corporation. Filed as Exhibit 10.10 to the 1990
Form 10-K Annual Report of the Company and incorporated herein by
reference.
10.13 Amendment #1 to Employment Agreement effective January 1, 1994 between
Ross K. Colquhoun and The Raymond Corporation.
10.14 Sample form of Employment Agreement between The Raymond Corporation and
Company Vice Presidents. Filed as Exhibit 10.8 to the 1991 Form 10-K
Annual Report of the Company and incorporated herein by reference.
10.15 The Raymond Corporation Retirement Benefits Equalization Plan.
10.16 The Raymond Corporation Stock Option Plan (1991).
10.17 The Raymond Corporation Savings Plan effective January 1, 1986, amended
and restated as of January 1, 1993. Filed as Exhibit 10.20 to the 1993
Form 10-K Annual Report of the Company and incorporated herein by
reference.
10.18 The Raymond Corporation Deferred Compensation Plan for Exempt Employees
restated as of September 1, 1994.
10.19 The Raymond Corporation Officer Performance Bonus Plan Formula. Filed as
Exhibit 10.15 to the 1992 Form 10-K Annual Report of the Company and
incorporated herein by reference.
10.20 Profit Sharing Retirement Plan of The Raymond Corporation, Plan A, dated
January 1, 1976, revised July 23, 1993. Filed as Exhibit 10.23 to the 1993
Form 10-K Annual Report of the Company and incorporated herein by
reference.
10.21 Profit Sharing Retirement Plan for Salaried Employees of The Raymond
Corporation, Plan B, dated January 1, 1976, revised July 23, 1993. Filed
as Exhibit 10.24 to the 1993 Form 10-K Report of the Company and
incorporated herein by reference
10.22 The Raymond Corporation Pension Plan.
<PAGE>
Exhibit
# Description
------- -----------
11. Statement re: computation of per share earnings.
13. Annual Report to Shareholders for the year ended December 31, 1994.
18. Letter dated February 7, 1992 from Ernst & Young re: change in
accounting principles. Filed as Exhibit 18 to the 1991 Form 10-K Annual
Report of the Company and incorporated herein by reference.
19. Filed Form 8 Report dated September 11, 1992. Filed as Exhibit 19 to the
1992 Form 10-K Annual Report of the Company and incorporated herein by
reference.
21. Subsidiaries (Direct and Indirect) of The Raymond Corporation for the
year ending December 31, 1994.
23. Consent of Independent Auditors dated March 27, 1995.
24. Power of Attorney of Directors dated March 4, 1995.
27. Financial Data Schedule.
99. The Company's 1995 Proxy Statement for the Annual Meeting of Shareholders
to be held on April 29, 1995.
<PAGE>
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.
Date: March 29, 1995 THE RAYMOND CORPORATION
------------------------
(Registrant)
By: /s/ Ross K. Colquhoun
---------------------------
Ross K. Colquhoun
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the date indicated.
By: /s/ Ross K. Colquhoun By: /s/ William B. Lynn
------------------------ ---------------------------
Ross K. Colquhoun William B. Lynn
President, Chief Executive Executive Vice President
Officer and Director Principal Financial Officer
Date: 03/29/95 Date: 03/29/95
By: /s/ John F. Everts
-------------------------
John F. Everts
Corporate Controller
Date: 03/29/95
By: /s/ George G. Raymond, Jr. By: /s/ Arthur M. Richardson
--------------------------- --------------------------
George G. Raymond, Jr., Chairman Arthur M. Richardson, Director
Date: 03/29/95 Date: 03/29/95
By: /s/ James F. Matthews By: /s/ M. Richard Rose
--------------------------- --------------------------
James F. Matthews, Director M. Richard Rose, Director
Date: 03/29/95 Date: 03/29/95
By: /s/ John E. Mott By: /s/ Daniel F. Senecal
-------------------------- ----------------------------
John E. Mott, Director Daniel F. Senecal, Director
Date: 03/29/95 Date: 03/29/95
By: /s/ Michael R. Porter
--------------------------
Michael R. Porter, Director
Date: 03/29/95
By: /s/ Lee J. Wolf
---------------------
Lee J. Wolf, Director
Date: 03/29/95
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE I -- Condensed Financial Information of Registrant
-- The Raymond Corporation
Years ended December 31, 1994, 1993 and 1992
Condensed Balance Sheets
<TABLE>
<CAPTION>
Year Ended
December 31,
-----------------------------------------------
1994 1993 1992
-----------------------------------------------
Assets
Current Assets
<S> <C> <C> <C>
Cash .............................. $ 4,081,322 $ 23,288,779 $ 509,450
Accounts Receivable (including
$12,132,856, $10,783,692 and
$9,123,915 due from unconsolidated
investees in 1994, 1993 and 1992
respectively) less allowances
($986,093 in 1994, $658,573 in 1993
and $281,374 in 1992) ............ 34,554,193 24,020,182 20,022,888
Inventories ....................... 25,513,226 20,881,441 21,778,761
Other Current Assets .............. 2,453,898 2,391,774 2,315,176
------------- ------------- -------------
Total Current Assets .... 66,602,639 70,582,176 44,626,275
Property Plant & Equipment ........ 36,944,902 34,614,998 33,459,192
Allowance for Depreciation ........ (24,622,493) (23,157,955) (22,458,868)
------------- ------------- -------------
12,322,409 11,457,043 11,000,324
Investment in and Advances to
Wholly Owned Subsidiaries and
Unconsolidated Investees .......... 101,180,813 71,840,705 57,859,933
Other Assets ...................... 4,360,714 4,710,396 3,173,078
------------- ------------- -------------
Total Assets ...... $ 184,466,575 $ 158,590,320 $ 116,659,610
============= ============= =============
</TABLE>
The accompanying notes are a part of the financial statements.
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE I -- Condensed Financial Information of Registrant
-- The Raymond Corporation
Years ended December 31, 1994, 1993 and 1992
Condensed Balance Sheets
<TABLE>
<CAPTION>
Year Ended
December 31,
------------------------------------------
1994 1993 1992
------------------------------------------
Liabilities and Shareholders' Equity
<S> <C> <C> <C>
Current Liabilities ................ $ 41,574,752 $ 24,400,522 $ 26,128,784
Long-term Debt and Capitalized
Lease Obligations (Note B) ......... 57,500,000 57,500,000 17,500,000
Other Non-Current Liabilities ...... 4,392,108 3,637,085 3,583,499
Shareholders' Equity
Common Stock .................... 9,546,332 9,072,866 9,028,446
Other Shareholders' Equity ...... 71,453,383 63,979,847 60,418,881
------------ ------------ ------------
Total Shareholders' Equity .. 80,999,715 73,052,713 69,447,327
------------ ------------ ------------
Total Liabilities and
Shareholders' Equity ............... $184,466,575 $158,590,320 $116,659,610
============ ============ ============
</TABLE>
The accompanying notes are a part of the financial statements.
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE I -- Condensed Financial Information of Registrant
-- The Raymond Corporation
Years ended December 31, 1994, 1993 and 1992
Condensed Statements of Income
<TABLE>
<CAPTION>
Year Ended
December 31,
------------------------------------------
1994 1993 1992
------------------------------------------
<S> <C> <C> <C>
Net Sales ....................... $142,333,992 $104,674,179 $ 92,704,297
Other Income, Net ............... 7,872,226 4,263,995 3,222,292
------------ ------------- -------------
Total Revenues ............ 150,206,218 108,938,174 95,926,589
Cost of Sales ................... 113,340,243 82,096,813 72,350,608
Selling, General and
Administrative Expenses (Includes
Research & Development costs of
$3,958,000 in 1994, $4,251,000 in
1993 and $2,557,000 in 1992) .... 28,479,361 24,313,057 21,462,376
Interest Expense ................ 3,926,796 1,557,297 1,302,262
------------ ------------ ------------
Total Cost of Sales and Expenses 145,746,400 107,967,167 95,115,246
Income Before Taxes and
Equity in Earnings of Wholly
Owned Subsidiaries and
Unconsolidated Investees ........ 4,459,818 971,007 811,343
Income Tax Expense .............. 1,796,883 428,657 297,037
Equity in Net Income of Wholly
Owned Subsidiaries and
Unconsolidated Investees ........ 7,064,336 4,464,463 3,446,700
------------ ------------ ------------
Net Income ...................... $ 9,727,271 $ 5,006,813 $ 3,961,006
============ ============ ============
</TABLE>
The accompanying notes are a part of the financial statements.
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE I -- Condensed Financial Information of Registrant
-- The Raymond Corporation
Years ended December 31, 1994, 1993 and 1992
Condensed Statements of Cash Flow
<TABLE>
<CAPTION>
Year Ended
December 31,
-------------------------------------------
1994 1993 1992
-------------------------------------------
<S> <C> <C> <C>
Net Cash Provided by (Used For)
Operating Activities ............... $ 6,019,696 $ (4,029,263) $ (2,272,983)
Cash Flows from Investing Activities
Additions to Property, Plant and
Equipment ........................ (2,972,384) (2,603,489) (1,207,171)
Proceeds from Sales of
Property Plant and Equipment ..... 7,750 136,336 5,200
Investment and Advances to Wholly
Owned Subsidiaries and
Unconsolidated Investees ......... (22,383,741) (10,198,517) 131,905
------------ ------------ ------------
Net Cash Used For
Investing Activities ............... (25,348,375) (12,665,670) (1,070,066)
Cash Flows from Financing Activities
Net Additional Repayments
under Lines of Credit ............ -0- -0- (11,000,000)
Repayment of Long-Term Debt ....... -0- (38,812,500) (5,281,012)
Cash Dividends Paid ............... -0- -0- -0-
Capital Stock Transactions, Net ... 121,222 (213,238) 22,539
Proceeds from Long-Term Debt ...... -0- 78,500,000 17,500,000
------------ ------------ ------------
Net Cash Provided by
Financing Activities ............... 121,222 39,474,262 1,241,527
(Decrease) Increase in Cash ........ (19,207,457) 22,779,329 (2,101,522)
Cash Balance at January 1 .......... 23,288,779 509,450 2,610,972
------------ ------------ ------------
Cash Balance at December 31 ........ $ 4,081,322 $ 23,288,779 $ 509,450
============ ============ ============
</TABLE>
The accompanying notes are part of the financial statements.
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE I -- Condensed Financial Information of Registrant
-- The Raymond Corporation
Years ended December 31, 1994, 1993 and 1992
Notes to Condensed Financial Statements
NOTE A - Basis of Presentation
In the parent company-only financial statements, the Company's investment in
subsidiaries and unconsolidated investees is stated at cost plus equity in
undistributed earnings of the subsidiaries and unconsolidated investees since
the date of acquisition. Parent company-only financial statements should be read
in conjunction with the Company's consolidated financial statements.
NOTE B - Long-Term Debt
<TABLE>
<CAPTION>
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Various notes, repaid in 1993 . $ -0- $ -0- $17,812,500
6.5% convertible debentures due
December 15, 2003. Interest is
payable semi-annually ........ 57,500,000 57,500,000 -0-
----------- ----------- -----------
Total Long Term Debt ...... 57,500,000 57,500,000 17,812,500
Less Current Portion .. -0- -0- 312,500
----------- ----------- -----------
Long-Term Portion of Debt . $57,500,000 $57,500,000 $17,500,000
=========== =========== ===========
</TABLE>
The 6.5% convertible subordinated debentures are convertible into shares of
common stock at a rate adjusted for the 1994 5% stock dividend of approximately
56.47 shares for each $1,000 principal amount of debentures. These debentures
are redeemable at prices ranging from 103.5% of principal to par depending upon
the redemption date. The debentures are convertible at any time prior to
maturity and are redeemable any time on or after December 15, 1996, in whole or
in part, at the option of the Company.
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE I -- Condensed Financial Information of Registrant
-- The Raymond Corporation
Years ended December 31, 1994, 1993 and 1992
Notes to Condensed Financial Statements (cont'd)
NOTE C -- Guarantee
Raymond Leasing Corporation, a wholly-owned subsidiary of the Company, has a
$12,000,000 long-term debt obligation outstanding at December 31, 1994. Under
terms of the debt agreement, the Company has guaranteed the payment of all
principal and interest.
NOTE D -- Dividends from Subsidiaries and Investees
Cash dividends paid to The Raymond Corporation from unconsolidated investees
accounted for under the equity method were $107,969 in 1994, $682,208 in 1993,
and $1,478,658 in 1992. Cash dividends paid to The Raymond Corporation by
subsidiaries were $0 in 1994, $334,000 in 1993, and $0 for 1992.
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
Year Ending December 31, 1994
<TABLE>
<CAPTION>
COL. A. COL. B. COL. C COL. D. COL. E.
---------------------------------- -------- ---------------------------- --------- ---------
Additions
----------------------------
(1) (2)
Balance at Charged to Charged Deductions Balance at
Beginning Costs and to Other from Close of
Description Of Period Expenses Accounts Reserve Period
---------------------------------- -------- ---------------------------- --------- ---------
<S> <C> <C> <C> <C> <C>
Reserve and allowances deducted from
asset accounts
Allowance for doubtful
accounts & losses on
investment in leases $1,727,740 $ 1,079,908 $ 592,767-B $2,214,881
========== =========== ========== ==========
Reserves reported in accrued
liabilities
Service agreements $1,737,219 $ 4,612,619 $ 3,906,670-A $2,443,168
Insurance reserves 4,764,346 6,527,819 5,239,006-C 6,053,159
---------- ----------- ----------- ----------
$6,501,565 $11,140,438 $ 9,145,676 $8,496,327
========== =========== =========== ==========
</TABLE>
A - Warranty & maintenance costs charged against reserve.
B - Bad debt write-offs charged against reserve.
C - Insurance costs charged against reserve.
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
Year Ending December 31, 1993
<TABLE>
<CAPTION>
COL. A. COL. B. COL. C COL. D. COL. E.
---------------------------------- -------- ---------------------------- --------- ---------
Additions
----------------------------
(1) (2)
Balance at Charged to Charged Deductions Balance at
Beginning Costs and to Other from Close of
Description Of Period Expenses Accounts Reserve Period
---------------------------------- -------- ---------------------------- --------- ---------
<S> <C> <C> <C> <C> <C>
Reserve and allowances deducted from
asset acccounts
Allowance for doubtful
accounts & losses on
investment in leases $1,239,427 $ 646,984 $ 158,671-B $1,727,740
========== ========== =========== ==========
Reserves reported in accrued
liabilities
Service agreements $1,380,973 $3,597,039 $ 3,240,793-A $1,737,219
Insurance reserves 4,161,786 7,382,545 6,779,985-C 4,764,346
---------- ----------- ----------- ----------
$5,542,759 $10,979,584 $10,020,778 $6,501,565
========== =========== =========== ==========
</TABLE>
A -- Warranty & maintenance costs charged against reserve.
B -- Bad debt write-offs charged against reserve.
C -- Insurance costs charged against reserve, including for the first time the
activity of self-insured retention for workers' compensation.
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
Year Ending December 31, 1992
<TABLE>
<CAPTION>
COL. A. COL. B. COL. C COL. D. COL. E.
---------------------------------- -------- ---------------------------- --------- ---------
Additions
----------------------------
(1) (2)
Balance at Charged to Charged Deductions Balance at
Beginning Costs and to Other from Close of
Description Of Period Expenses Accounts Reserve Period
----------------------------------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Reserve and allowances deducted from
asset accounts
Allowance for doubtful
accounts & losses on
investment in leases $1,192,460 $1,200,229 $1,153,262-B $1,239,427
========== ========== ========== =========
Reserves reported in accrued
liabilities
Service agreements $1,323,787 $2,781,682 $2,724,496-A $1,380,973
Insurance reserves 4,043,609 5,073,790 4,955,613-C 4,161,786
---------- ---------- ---------- ----------
$5,367,396 $7,855,472 $7,680,109 $5,542,759
========== ========== ========== ==========
</TABLE>
A -- Warranty & maintenance costs charged against reserve.
B -- Bad debt write-offs charged against reserve.
C -- Insurance costs charged against reserve.
Exhibit 10.3
SECOND AMENDMENT TO
JOINT VENTURE AGREEMENT DATED AUGUST 1, 1991
between
CATERPILLAR INDUSTRIAL INC.
and
THE RAYMOND CORPORATION
THIS SECOND AMENDMENT TO JOINT VENTURE AGREEMENT, made and entered
into this 15th day of April, 1993 by and between Mitsubishi Caterpillar Forklift
America Inc., a Delaware corporation, (hereinafter referred to as "MCFA") as
assignee of Caterpillar Industrial Inc.'s ("CII") rights and obligations under
the aforesaid Joint Venture Agreement, having its principal office at 5960
Heisley Road, Mentor, Ohio, and The Raymond Corporation, a New York corporation,
having its principal office at South Canal Street, Greene, New York (hereinafter
referred to as "Raymond").
W I T N E S S E T H
WHEREAS, MCFA desires to add certain Raymond product to JVA Exhibit 1
list of Products; and
WHEREAS, these additional Products were developed in their entirety by
Raymond and constitute Raymond Industrial Property (as defined in the JVA); and
WHEREAS, Raymond is willing to have specified products added to
Exhibit 1 for the considerations hereinafter set forth.
NOW THEREFORE, the parties hereby agree as follows:
1. Exhibit 1 to the JVA is hereby amended to add "Section I" as a
heading immediately preceding the heading "Initial JVC Products" and to add the
following products at Page 2 of Exhibit 1 under the heading "Section II -
Additional JVC Products":
<PAGE>
a) Raymond's standard low cost orderpicker (Project name:
"Slicker"),
b) Raymond's 4,000 lb. Model 101 Walkie,
c) Raymond's 8,000 lb. Models 112 & 113 F80L Walkie, and
d) Raymond's 3,500 lb. Reach Mast.
2. As consideration for the foregoing, MCFA hereby agrees to:
a) cause the Joint Venture, Material Handling Associates, Inc.
("MHA") to issue to Raymond additional common stock in the amount
of Four Hundred Thirteen Thousand Six Hundred Ninety Six Dollars
($413,696.00), and
b) subscribe in cash for an additional Four Hundred Thirteen
Thousand Six Hundred Ninety Six Dollars ($413,696.00) of MHA's
common stock, thereby maintaining MCFA and Raymond's equal
ownership of MHA's common stock and providing cash funds to MHA
to partially fund completion of Joint Venture Product set forth
in Section I of Exhibit 1.
3. Except as hereinabove provided in Paragraph 1, the parties hereto
confirm that the Joint Venture Agreement continues in full force and effect and
agree faithfully to perform it in accordance with its terms.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to the JVA to be executed, in triplicate originals, by their
respective authorized representatives as of the day and year first above
written.
MITSUBISHI CATERPILLAR FORKLIFT AMERICA INC.
By /s/ Tetsu Okuno
----------------------------
President
Printed Name Tetsu Okuno
------------------
THE RAYMOND CORPORATION
By /s/ Ross K. Colquhoun
----------------------------
President
Printed Name Ross K. Colquhoun
------------------
Consented and Agreed to:
CATERPILLAR INDUSTRIAL INC.
By______________________________________
President
Printed Name____________________________
<PAGE>
EXHIBIT 1
SECTION I - INITIAL JVC PRODUCTS
Initial "Products" of the JVC will be as follows:
REACH TRUCK:
Model A (similar to Raymond model 021):
- Max. elevated Height 282 in.
- Capacity (single deep) 3000 and 4000 lb.
- Voltage 36V.
- Reach carriage Single Deep, Deep-Reach
- Operator orientation Side-stance
Model B (similar to Raymond model 031):
- Max. Elevated Height 330 in. (approx.)
- Capacity (single deep) 3000, 4000 and 4500 lb.
- Voltage 36V.
- Reach carriage Single deep, Deep-Reach
- Operator orientation Side-stance
ORDERPICKER:
Model A (similar to Raymond model 152):
- Max. Elevated Height 315 in. (approx.)
- Capacity 3000 lb.
- Voltage 24V.
- Masts Two and Three Stage
Model B (similar to Raymond model 162):
- Max. Elevated Height 315 in. (approx.)
- Capacity 3000 lb.
- Voltage 36V.
- Masts Two and Three Stage
WALKIE:
Model A (similar to Raymond model 111):
- Capacity 6000 lb.
- Type Pedestrian
Model B (similar to Raymond model 112):
- Capacity 6000 lb.
- Type Stand-on End Control Rider
1
<PAGE>
Model C (similar to Raymond model 113):
- Capacity 6000 lb.
- Type Stand-on Center Control Rider
Model D (similar to Raymond model 114):
- Capacity Tow Tractor
- Type Stand-on Center Control Rider
Model F (similar to Raymond model 19):
- Capacity 6000 lb.
- Type Stand-on End Control Rider
SECTION II - ADDITIONAL JVC PRODUCTS
Similar to:
a) Raymond's standard low cost orderpicker (Project name:
"Slicker"),
b) Raymond's 4,000 lb. Model 101 Walkie,
c) Raymond's 8,000 lb. Models 112 & 113 F80L Walkie, and
d) Raymond's 3,500 lb. Reach Mast.
2
Exhibit 10.4
THIRD AMENDMENT TO
JOINT VENTURE AGREEMENT DATED AUGUST 1, 1991
between
CATERPILLAR INDUSTRIAL INC.
and
THE RAYMOND CORPORATION
THIS AMENDMENT TO JOINT VENTURE AGREEMENT (as amended by the First and
Second Amendments dated October 22, 1992 and April 15, 1993 respectively), made
and entered into this 24th day of November, 1993 by and between Mitsubishi
Caterpillar Forklift America Inc., a Delaware corporation, (hereinafter referred
to as "MCFA") as assignee of Caterpillar Industrial Inc.'s ("CII") rights and
obligations under the aforesaid Joint Venture Agreement, having its principal
office at 5960 Heisley Road, Mentor, Ohio, and The Raymond Corporation, a New
York corporation, having its principal office at South Canal Street, Greene, New
York (hereinafter referred to as "Raymond").
W I T N E S S E T H
WHEREAS, these additional Products and Services were developed in their
entirety by Raymond and constitute Raymond Industrial Property (as defined in
the JVA); and
WHEREAS, Raymond is willing to have specified Products and Services added
to Exhibit 1 for the considerations hereinafter set forth.
NOW THEREFORE, the parties hereby agree as follows:
1. Exhibit 1 to the JVA is hereby amended to add (and restated in the form
attached hereto) "Section III" as a heading immediately following the Section II
Products, with the following Products and Services: a) Battery changer similar
to Raymond Batt-R-Ease II.
<PAGE>
b) Straddle-type mast configuration with capacities to
4000 lb. and elevated heights to 301".
c) Orderpicker model with maximum elevated height of
366".
d) 24-volt Reach, Double Reach and Straddle Model C,
with maximum elevated height of approximately 252", side
stance and capacities (single deep) of 3000 lb., 3500 lb. and
4000 lb.
e) All modifications approved by Raymond for Exhibit 2
Products.
2. Except as hereinabove provided in Paragraph 1, the parties hereto
confirm that the Joint Venture Agreement continues in full force and effect and
agree faithfully to perform it in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the
JVA to be executed, in duplicate originals, by their respective authorized
representatives as of the day and year first above written.
MITSUBISHI CATERPILLAR FORKLIFT AMERICA INC.
By T.Okuno
-------------------------------
President
Printed Name T. Okuno
---------------------
THE RAYMOND CORPORATION
By Ross Colquhoun
-------------------------------
President
Printed Name R. Colquhoun
---------------------
<PAGE>
AMENDED AND RESTATED NOVEMBER 24, 1993 IN
ACCORDANCE WITH AMENDMENTS SECOND AND THIRD TO
THE JOINT VENTURE AGREEMENT
EXHIBIT 1
SECTION I - INITIAL JVC PRODUCTS
Initial "Products" of the JVC will be as follows:
REACH TRUCKS:
Model A (similar to Raymond Model 021):
- Maximum Elevated Height 282 in.
- Capacity (Single Deep) 3000 and 4000 lb.
- Voltage 36V
- Reach Carriage Single Deep, Deep-Reach
- Operator Orientation Side Stance
Model B (similar to Raymond Model 031):
- Maximum Elevated Height 330 in. (approx.)
- Capacity (Single Deep) 3000, 4000 and 4500 lb.
- Voltage 36V
- Reach Carriage Single Deep, Deep-Reach
- Operator Orientation Side Stance
ORDERPICKERS:
Model A (similar to Raymond Model 152):
- Maximum Elevated Height 315 in. (approx.)
- Capacity 3000 lb.
- Voltage 24V
- Masts Two- and Three-Stage
Model B (similar to Raymond Model 162):
- Maximum Elevated Height 315 in. (approx.)
- Capacity 3000 lb.
- Voltage 36V
- Masts Two- and Three-Stage
<PAGE>
SECTION I - INITIAL JVC PRODUCTS
(CONTINUED)
WALKIES:
Model A (similar to Raymond Model 111):
- Capacity 6000 lb.
- Type Pedestrian
Model B (similar to Raymond Model 112):
- Capacity 6000 lb.
- Type Stand-on End Control Rider
Model C (similar to Raymond Model 113):
- Capacity 6000 lb.
- Type Stand-on Center Control Rider
Model D (similar to Raymond Model 114):
- Capacity Tow Tractor
- Type Stand-on Center Control Rider
Model F (similar to Raymond Model 19):
- Capacity 6000 lb.
- Type Stand-on End Control Rider
SECTION II - ADDITIONAL JVC PRODUCTS
Similar to:
a) Raymond's Standard Low-Cost Orderpicker
(Project name: "Slicker"),
b) Raymond's 4000 lb. Model 101 Walkie,
c) Raymond's 8000 lb. Models 112 & 113 F80L
Walkie, and
d) Raymond's 3500 lb. Reach Mast
<PAGE>
SECTION III - ADDITIONAL JVC PRODUCTS & SERVICES
Products
Similar to:
a) Raymond Battery Changer Batt-R-Ease II.
b) Straddle-type mast configuration with
capacities to 4000 lb. and elevated heights to 301".
c) Orderpicker model with maximum elevated
height of 366".
d) Reach - Model C
- Maximum Elevated Height 252 in. (approx.)
- Capacity (Single Deep) 3000, 3500 and 4000 lb.
- Voltage 24V
- Reach Carriage Reach, Deep-Reach & Straddle
- Operator Orientation Side Stance
- Battery Compartment 14.5" & 16.5"
- U.L. Listed Type "E"
Services
a) All modifications approved by Raymond for
Exhibit 1 Products, as described in James W.
Davis' letter to Bob Huntley dated January 18,
1993 at pp. 5 and 6.
<PAGE>
Exhibit 10.5
$15,000,000
REVOLVING CREDIT AND TERM LOAN AGREEMENT
Dated as of December 21, 1994
among
THE RAYMOND CORPORATION
AND
RAYMOND LEASING CORPORATION
AND
CHEMICAL BANK
<PAGE>
Table of Contents
I. DEFINITIONS
1.01 Definitions 1
1.02 Accounting Terms 10
II. LOANS
2.01 Revolving Credit Loans 11
2.02 Revolving Credit Note 12
2.03 Interest on Revolving Credit Loans 12
2.04 Term Loan 12
2.05 Term Note; Grid Schedules 13
2.06 Interest on the Term Loan 13
2.07 Interest on Absolute Rate Loans 13
2.08 Interest on Prime Rate Loans 14
2.09 Intentionally Deleted 14
2.10 Interest on Eurodollar Rate Loans 14
2.11 Continuation and Conversion of Loans 14
2.12 Prepayment of Loans 15
2.13 Reduction or Termination of the Commitment 17
2.14 Fees 18
2.15 Default Rate of Interest; Late Payment Penalty 18
2.16 Application of Payments and Computations 18
2.17 Funds; Manner of Payment 18
2.18 Capital Adequacy 18
2.19 Inability to Determine Rate 19
2.20 Other Events 19
2.21 Change in Legality 20
III. REPRESENTATIONS AND WARRANTIES
3.01 Organization, Corporate Powers, etc 21
3.02 Corporate and Governmental Authorization; 21
No Contravention
3.03 Financial Condition 22
3.04 Taxes 22
3.05 Title to Properties 23
3.06 Litigation 23
3.07 Agreements 23
3.08 ERISA 23
3.09 Proceeds of the Loan 24
3.10 Federal Reserve Regulations 24
3.11 Subsidiaries 24
3.12 Enviromental Matters 24
<PAGE>
3.13 Not an Investment Company 25
3.14 Material Change 25
3.15 Governmental Approval 25
3.16 Full Disclosure 25
3.17 Binding Effect 26
3.18 Trademarks and Licenses, etc. 26
IV. CONDITIONS OF LENDING
4.01 Representations and Warranties; No Default 26
4.02 Opinion of Counsel 26
4.03 No Default Certificate; Deemed Representation 26
4.04 Supporting Documents 27
4.05 Other Information, Documentation 27
V. AFFIRMATIVE COVENANTS
5.01 Corporate Existence, Properties, Insurance, etc. 27
5.02 Payment of Indebtedness, Taxes, etc. 28
5.03 Reporting Requirements 28
5.04 Access to Premises and Records 29
5.05 Notice of Adverse Change 30
5.06 Notice of Default 30
5.07 ERISA 30
5.08 Compliance with Contractual Obligations and 31
Requirements of Law; Applicable Laws
5.09 Subsidiaries 31
5.10 Environmental Laws 31
5.11 Support Services Agreement 31
5.12 Voting of Subsidiaries Shares 31
VI. NEGATIVE COVENANTS
6.01 Liens 32
6.02 Guarantees, Etc. 32
6.03 Sale of Notes 33
6.04 Investments 33
6.05 Change in Business 34
6.06 Dividends 34
6.07 Subordinated Debt 34
6.08 Accounting Policies and Procedures 34
6.09 Stock of Subsidiaries, Etc. 34
6.10 Transactions with Affiliates 35
6.11 Merger or Consolidation or Sales of Assets 35
6.12 Restrictions on Leases of Equipment 35
6.13 The Raymond Corporation Subsidiaries 35
<PAGE>
VII. FINANCIAL COVENANTS - THE RAYMOND CORPORATION
7.01 Minimum Working Capital 36
7.02 Minimum Tangible Net Worth 36
7.03 Leverage Ratio 36
7.04 Interest Coverage 36
7.05 Loss Quarters 36
VII-A. FINANCIAL COVENANTS - RAYMOND LEASING
7A.01 Minimum Tangible Net Worth 36
7A.02 Leverage Ratio 36
7A.03 Interest Coverage 36
7A.04 Loss Quarter 36
7A.05 Working Capital 36
VII-B FINANCIAL COVENANTS - CONSOLIDATED
7B.01 Minimum Tangible Net Worth 37
7B.02 Leverage Ratio 37
7B.03 Interest Coverage 37
7B.04 Consolidated Losses 37
VIII. EVENTS OF DEFAULT
8.01 Events of Default 37
IX. MISCELLANEOUS
9.01 Notices 40
9.02 Survival of Agreement; Successors and Assigns 40
9.03 Expenses of the Bank; Indemnification 41
9.04 Applicable Law 42
9.05 Waiver of Rights by the Bank; 42
Waiver of Jury Trial, etc.
9.06 Acknowledgment 42
9.07 Consent to Jurisdiction 43
9.08 Extension of Maturity 43
9.09 Modification of Agreement 43
9.10 Participations and Assignments 43
9.11 Reinstatement; Certain Payments 43
9.12 Right of Setoff 44
9.13 Severability 44
9.14 Counterparts 44
9.15 Entire Agreement; Cumulative Remedies 44
9.16 Headings 45
9.17 Exhibits and Schedules 45
<PAGE>
REVOLVING CREDIT AND TERM LOAN AGREEMENT
REVOLVING CREDIT AND TERM LOAN AGREEMENT dated as of December 21,
1994 (the "Agreement") among THE RAYMOND CORPORATION, a New York
corporation ("Raymond") and RAYMOND LEASING CORPORATION, a Delaware
corporation ("Raymond Leasing") (Raymond and Raymond Leasing individually
the "Borrower" and collectively the "Borrowers" as the case may be) and
CHEMICAL BANK, a New York banking corporation (the "Bank").
WHEREAS, the Borrowers have requested the Bank to extend credit to
them severally on a revolving credit basis at any time and from time to
time prior to the Termination Date (as defined below) by making revolving
credit loans to the Borrowers not in excess of $15,000,000 in the
aggregate at any time outstanding and to have the option to from time to
time up to and including the Termination Date convert the outstandings
under the revolving credit loans to three, four or five year term loans;
and
WHEREAS, the proceeds of the revolving credit and term loan shall
be used by the Borrowers for general corporate working capital purposes
and to fund growth in Raymond Leasing's lease portfolio; and
WHEREAS, the Bank is willing to extend such credit to the
Borrowers, subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing the parties
hereto agree to the following:
I. DEFINITIONS
SECTION 1.01. Definitions. As used herein, the terms defined in the
preamble shall have the same meaning when used in this Agreement and the
following words and terms shall have the following meanings:
"Absolute Rate" means a rate of interest per annum quoted to a
Borrower by the Bank in its discretion, from time to time at the request
of such Borrower, by 12:00 noon, New York City time on the day of the
borrowing, provided however, Bank shall have been given two (2) Business
Days' prior request for a quotation by such Borrower. Such quoted rate
shall be the fixed rate which would be applicable to an Absolute Rate Loan
by the Bank on the requested date for the proposed Term Loan, in the
specified amount and with the specified Interest Period. A Borrower may
request an Absolute Rate Loan on the basis of such quote.
Such Absolute Rate shall be calculated by the Bank as a fixed rate
not to exceed the sum of:
<PAGE>
(a) the current yield to maturity on an equivalent bond basis (recalculated
to a 360-day year basis) of a Treasury bill, bond, or note currently traded in
the secondary market equal to the principal amount of the requested Loan for the
number of days in the requested Interest Period, (b) the offered side of the
swap spread quoted daily, on the TeleRate Screen (source Noonan, Astly and
Pearce) p. 314 (or a successor page), and (c) the Applicable Margin.
"Absolute Rate Loan" means a Term Loan bearing interest in accordance with
Section 2.07 hereof.
"Adjusted Eurodollar Rate" shall mean, with respect to any Eurodollar Rate
Loan for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the product of (i) the Eurodollar
Rate in effect for such Interest Period and (ii) Eurodollar Reserves. For the
purposes hereof, "Eurodollar Rate" shall mean, for any Interest Period, the rate
(rounded upwards, if necessary to the next 1/16 of 1%) at which dollar deposits
approximately equal to the principal amount of the proposed Eurodollar Rate Loan
and for a duration equal to the applicable proposed Interest Period are offered
by the Bank in immediately available funds in an Interbank Market for
eurodollars at approximately 11:00 a.m., New York City time, two Business Days
prior to the commencement of such Interest Period. For purposes hereof, the term
"Eurodollar Reserves" means a fraction (expressed as a decimal), the numerator
of which is the number one and the denominator of which is the number one minus
the applicable statutory reserve requirements for the Bank (without duplication,
but including, without limitation, basic, supplemental, marginal or emergency
reserves), from time to time in effect under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor) with respect to
eurocurrency funding currently referred to as "Eurocurrency liabilities" in
Regulation D. It is agreed that for purposes hereof any amount bearing interest
at the Eurodollar Rate shall be deemed to constitute a "Eurocurrency liability"
as defined in Regulation D and to be subject to the reserve requirements of
Regulation D, without benefit of credit or proration, exemptions or offsets
which might otherwise be available to the Bank from time to time under
Regulation D.
"Affiliate" shall mean any person which directly or indirectly controls, or
is controlled by, or is under common control with, a Borrower or any of its
Subsidiaries. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract, or
otherwise.
-2-
<PAGE>
"Applicable Margin" shall mean: (a) for Fixed Rate Loans made to Raymond
Leasing 1%; (b) for Eurodollar Rate Loans which are Revolving Credit Loans made
to Raymond:
FUNDED DEBT
TO FUNDED FUNDED DEBT
DEBT AND EBIT
TANGIBLE NET WORTH
}4.0 { 4.0 & } 2.0 {2.0
- -
{.40 87.5 75.0 62.5
}.40 {.60 100.0 87.5 75.0
- -
}.60 112.5 100.0 87.5
and (c) for Fixed Rate Loans which are Term Loans made to Raymond 12.5 basis
points above each rate listed in the above chart, as applicable at the Borrowing
Date.
"Borrowing Date" shall mean, with respect to any Loan, the date on which
such Loan is disbursed to the Borrower.
"Business Day" shall mean any day not a Saturday, Sunday or legal holiday,
on which the Bank is open for business in New York City, provided, however, that
when used in connection with determining the Eurodollar Rate, the term "Business
Day" shall also exclude any day on which the Bank is not open for dealings in
dollar deposits in an Interbank Market.
"Capitalized Lease Obligation" shall mean an obligation to pay rent or
other amounts under any lease of (or other arrangement conveying the right to
use) real and/or personal property which obligation is required to be classified
and accounted for as a capital lease on a balance sheet prepared in accordance
with generally accepted accounting principles, and for purposes hereof the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with such principles.
"Chief Financial Officer" shall mean the Chief Financial Officer of such
Borrower, as applicable.
"Closing Date" shall mean December 21, 1994.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment" shall have the meaning assigned to such term in Section 2.01
hereof. The Commitment shall be deemed permanently terminated on the Termination
Date or such earlier date on which the Commitment shall have been terminated in
accordance herewith.
- 3 -
<PAGE>
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"Consolidated Adjusted Net Income" for any period shall mean the
consolidated gross revenues of the Borrower for such period less all expenses
and other proper charges (including taxes on income) and extraordinary items of
income, but excluding in any event (to the extent not previously deducted as
extraordinary items of income):
(a) any gains or losses on the sale or other disposition of
investments or fixed or capital assets, and any taxes on such
excluding gains and any tax deductions or credits on accounts of any
such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any corporation, substantially all
the assets of which have been acquired in any manner by the Borrower
or a Subsidiary, realized by such corporation prior to the date of
such acquisition;
(d) net earnings and losses of any corporation with which the
Borrower or a Subsidiary shall have consolidated or which shall have
merged into or with the Borrower or a Subsidiary prior to the date of
such consolidation or merger;
(e) net earnings of any business entity in which the Borrower or
a Subsidiary has an ownership interest unless such net eamings shall
have actually been received by the Borrower in the form of cash
distributions;
(f) earnings resulting from any reappraisal, revaluation or
write-up of assets;
(g) any gain arising from the acquisition of any securities of
the Borrower;
and
(h) any reversal of any contingency reserve, except to the extent
that provision for such contingency reserve shall have been made from
income arising during such period.
"Consolidated Current Assets" shall mean, at any date, the aggregate amount
of all assets of the Borrower and its Subsidiaries which would be properly
classified as current assets at such date, but excluding deferred assets, all
computed as per management statements prepared on a consistent basis.
-4-
<PAGE>
"Consolidated Current Liabilities" shall mean the aggregate amount of all
liabilities of the Borrower and its Subsidiaries (including tax and other proper
accruals) which would be classified as current liabiities, all computed as per
management statements prepared on a consistent basis.
"Consolidated Interest Expense" shall mean the interest expense of the
Borrower and its Subsidiaries during such period determined on a consolidated
basis in accordance with generally accepted accounting principles consistently
applied, and shall in any event include, without limitation, (i) the
amortization of debt discounts (ii) the amortization of all fees payable in
connection with the incurrence of Indebtedness to the extent included in
interest expense, (iii) the portion of any Capitalized Lease Obligation
allocable to interest expense, (iv) all fixed or calculable dividend payments on
preferred stock, and (v) payments of interest expense in kind.
"Consolidated Net Income Available for Interest Charges" for any period
shall mean the sum of (i) Consolidated Adjusted Net Income during such period,
plus (to the extent deducted in determining adjusted net income), (ii) all
provisions for any federal, state or other income taxes made by the Borrower
during such period, and (iii) Interest Charges during such period.
"Consolidated Tangible Net Worth" shall mean for the Borrower and its
Subsidiaries, the excess of (i) the aggregate net book value of the assets
(other than patents, patent rights, trademarks, trade names, treasury stock,
franchises, copyrights, licenses, permits, goodwill and other intangible assets
classified as such in accordance with generally accepted accounting principles
and appearing on the balance sheet as of the Effective Date) after all
appropriate adjustments in accordance with generally accepted accounting
principles applied on a consistent basis (including, without limitation,
reserves for doubtful receivables, obsolescence, depreciation and amortization
and excluding the amount of any write-up or revaluation of any asset) over (ii)
Consolidated Total Liabilities in each case computed and consolidated in
accordance with generally accepted accounting principles applied on a consistent
basis.
"Consolidated Total Unsubordinated Liabilities" shall mean all items which
in accordance with generally accepted accounting principles applied on a
consistent basis, would properly be included on the liability side of the
balance sheet (other than Subordinated Debt, capital stock, capital surplus and
retained earnings) as of the date on which the amount of Consolidated Total
Unsubordinated Liabilities is to be determined of the Borrower and its
Subsidiaries computed and consolidated in accordance with generally accepted
accounting principles applied on a consistent basis.
"Contractual Obligation" as to any Person, any provision of any security
issued by such Person or any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is bound.
-5-
<PAGE>
"Default" shall mean any of the events specified in Article VIII hereof,
whether or not any requirement for the giving of notice or the lapse of time or
both or any other condition has been satisfied.
"EBIT" shall mean the Consolidated Net Income Available For Interest
Charges.
"EBITDA" shall mean the sum of Consolidated Net Income Available for
Interest Charges, plus depreciation and amortization.
"Enviromnental Laws" shall mean any and all Federal, State, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees
or requirements of any Governmental Authority regulating, relating to or
imposing liability or standards of conduct concerning environmental protection
matters, including, without limitation, Hazardous Materials, as now or may
hereafter be in effect.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower or a Subsidiary would be deemed to be a
member of the same controlled group" within the meaning of Section 414(b), (c),
(m) and (o) of the Code.
"Eurodollar Rate Loan" shall mean a Loan bearing interest in accordance
with Section 2.10 of this Agreement.
"Eurodollar Rate" and "Eurodollar Reserves" shall have the meaning
specified in the definition of "Adjusted Eurodollar Rate".
"Event of Default" shall mean any Event of Default set forth in Article
VIII.
"Executive Officer" shall mean either the Chairman, the President, the
Chief Financial Officer, the Secretary, any Vice-President, Treasurer of the
Borrower and their respective successors, if any, designated by the Board of
Directors.
"Expiration Date" shall mean the final payment date of any Term Loan,
whether as stated by its terms or by acceleration hereunder.
"Fixed Rate Loan" shall mean any Eurodollar Rate Loan or Absolute Rate
Loan.
"Funded Debt" shall mean, with respect to any Person, all Indebtedness of
such Person for money borrowed which by its terms matures more than one year
from the date as of which such Funded Debt is incurred, and any Debt of such
Person maturing within one year from such date which is renewable or extendable
at the option of the obligor to a date beyond one year from such date (whether
or not theretofore renewed or extended), including any such indebtedness
renewable or extendable at the option of the obligor under, or payable from
- 6 -
<PAGE>
the proceeds of other indebtedness which may be incurred pursuant to, the
provisions of any revolving credit agreement or other similar agreement plus the
aggregate amount of guaranties by that Person of all such liabilities of other
Persons.
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Hazardous Materials" includes, without limit, any flammable explosives,
radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic
substances, defined in the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et
seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Sections 9601, et seq.), and in the regulations adopted and publications
promulgated pursuant thereto, or any other laws.
"Indebtedness" shall include all obligations, contingent and otherwise,
which in accordance with generally accepted accounting principles should be
classified upon the obligor's balance sheet as liabilities, but in any event
including liabilities (whether or not they should be so classified upon such
balance sheet) secured by any lien existing on property owned or acquired
subject thereto, whether or not the liability secured thereby shall have been
assumed, and all guarantees.
"Insolvency" shall mean with respect to any Multiemployer Plan, the
condition that such plan is insolvent within the meaning of such term used in
Section 4245 of ERISA.
"Insolvent" shall mean the condition of Insolvency.
"Interbank Market" shall mean the London interbank market or the New York
interbank market.
"Interest Charges" for any period shall mean all interest and all
amortization of debt discount and expense on all Indebtedness of the Borrower
and a Subsidiary.
"Interest Payment Date" shall mean as to any Eurodollar Rate Loan, Prime
Rate Loan and Absolute Rate Loan: (i) the last day of each calendar quarter
during the term thereof commencing with the calendar quarter immediately
following the date of such Loan and (ii) the Termination Date or Expiration
Date, as the case may be.
"Interest Period" means:
(a) as to any Prime Rate Loan, the period commencing on the date of
such Loan and ending on the date on which the Borrower elects to select a
different interest rate pursuant to this Agreement, and
- 7 -
<PAGE>
(b) as to any Eurodollar Rate Loan, the period commencing on the date
of such Loan and ending on the numerically corresponding day (or if there
is no numerically corresponding day, the last day) of the calendar month
that is one, two, three, six or twelve months, thereafter, as the Borrower
may elect, and
(c) as to any Absolute Rate Loan, the period requested by the Borrower
and agreed to by the Bank, as available, in respect of such Absolute Rate
Loan and indicating the period over which such Term Loan shall be a
Absolute Rate Loan which at the time of selection shall be from the
Borrowing Date to the Expiration Date of such Absolute Rate Loan;
provided, however, that (i) if any Interest Period would end on a day which
shall not be a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, with respect to Eurodollar Rate Loans only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the first preceding Business Day and (ii)
no Interest Period may be selected for any Fixed Rate Loan which expires later
than the Termination Date or the Expiration Date, as the case may be and (iii)
if any Interest Period for any Fixed Rate Loan begins prior to any principal
repayment date and would otherwise end after such principal repayment date, the
Interest Period for that portion of the principal amount of such Loan which is
to be repaid by the Borrower in accordance herewith shall terminate on such
principal repayment date, and the Interest Period for the remaining principal of
such Loan shall remain unaffected by such termination notwithstanding the
provisions of the preceding clause.
"Loan(s)" shall mean a loan by the Bank to the Borrower pursuant to Article
II hereof and shall refer to a Prime Rate Loan, Absolute Rate Loan or Eurodollar
Rate Loan, each of which shall be a "Type" of Loan.
"Loan Documents" shall mean collectively, the Agreement, the Notes, any
agreements or documents referred to in Article IV hereof and all other
documents, certificates and instruments executed in connection therewith.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform their obligations under the Loan Documents, or (c) the
validity or enforceability of any of the Loan Documents or the rights or
remedies of the Bank hereunder or thereunder.
"Multiemployer Plan" shall mean a Plan which is a Multiemployer Plan as
defined in Section 4001(a)(3) of ERISA.
"Note(s)" shall mean the Revolving Credit Note and the Term Note.
"Operating Agreement" shall mean the Operating Agreement dated October 10,
1986 between Raymond Leasing and Raymond, as may be amended from time to time.
- 8 -
<PAGE>
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title 1 of ERISA or any successor thereto.
"Person" shall mean any natural person, corporation, business trust, joint
venture, association, company, partnership or government, or any agency or
political subdivision thereof.
"Plan" shall mean, at any particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Prime Rate" shall mean the rate of interest per annum announced from time
to time by the Bank as its prime rate in effect at its principal office in New
York City; each change in the Prime Rate shall be effective on the date such
change is announced.
"Raymond Working Capital" shall mean the total of Manufacturing Current
Assets, minus Manufacturing Current Liabilities as such terms are, as reflected
on Raymond's consolidated financial statements.
"Reportable Event" shall mean any of the events described in Section
4043(b) of ERISA other than those events as to which the twenty day notice
period is waived under Subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section 2615.
"Revolving Credit Loan" shall mean any Loan to the Borrower pursuant to
Section 2.01.
"Revolving Credit Note" shall mean the promissory note of the Borrower
delivered pursuant to Section 2.02.
"Senior Indebtedness" shall mean the Notes and all other Indebtedness of
the Borrower for money borrowed, whether outstanding on the date hereof or
hereafter created or incurred, which has not been approved by the Bank in
writing as being subordinate and junior to the loans, and which is permitted
hereby.
"Single Employer Plan" shall mean any plan which is not covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Short Term Indebtedness" shall mean Indebtedness for money borrowed with a
maturity of less than 365 days.
"Subordinated Debt or Indebtedness" shall mean all Indebtedness which is
subordinated in right of payment, form and substance satisfactory to the Bank to
all Indebtedness of the Borrower to the Bank, including the currently
outstanding Raymond 6.50% Convertible Subordinated Debentures of $57,500,000 due
12/15/2003 which exists in form and substance satisfactory to the Bank.
- 9 -
<PAGE>
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which at least a majority of the securities or other ownership
interests having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by such Person, but excluding Unconsolidated
Investees.
"Statutory Reserves" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the reserve percentages expressed as a decimal
established by the Board of Governors of the Federal Reserve System and any
other banking authority for determining the reserve requirements of the Bank in
respect of new non-personal negotiable time deposits in dollars of over $100,000
with maturities approximately equal to the applicable Interest Period, such
reserve requirements including, without limitation, those imposed under
Regulation D of such Board of Governors. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in such percentage.
"Term Loan" shall mean the term loan pursuant to Section 2.04 hereof.
"Term Note" shall mean the promissory note of the Borrower delivered
pursuant to Section 2.05 hereof.
"Termination Date" shall mean the earlier of December 21, 1996 or the date
the Commitment may otherwise be terminated in accordance herewith.
"Type" shall have the meaning specified in definition of "Loan".
"Unconsolidated Investees" shall mean any Persons in which either Borrower
has an investment and which does not report its results on a consolidated basis
with the Borrowers.
"Unfunded Current Liability" of any Plan means the amount, if any, by which
the present value of the accrued benefits under the Plan as of the close of its
most recent plan year exceeds the fair market value of the assets allocable
thereto, determined in accordance with Section 412 of the Code.
"Working Capital" shall mean for the Borrower and its Subsidiaries, the
amount by which Consolidated Current Assets exceed Consolidated Current
Liabilities.
SECTION 1.02. Accounting Terms/Other Definitional Provisions. (a)
Except as otherwise herein specifically provided, each accounting term
used herein shall have the meaning given to it under Generally Accepted
Accounting Principles. "Generally Accepted Accounting Principles" shall
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mean those generally accepted accounting principles and practices which
are recognized as such by the American Institute of Certified Public
Accountants acting through the Fiancial Accounting Standards Board
("FASB") or through other appropriate boards or committees thereof and
which are consistently applied for all periods so as to properly reflect
the financial condition, and the results of operations and changes in
financial position, of the Borrower, except that any accounting principle
or practice required to be changed by the FASB (or other appropriate board
or committee of the FASB) in order to continue as a generally accepted
accounting principle or practice may be so changed. Any dispute or
disagreement between the Borrower and the Bank relating to the
determination of Generally Accepted Accounting Principles shall, in the
absence of manifest error, be conclusively resolved for all purposes
hereof by the written opinion with respect thereto, delivered to the Bank,
of independent accountants selected by the Borrower and approved by the
Bank for the purpose of auditing the periodic financial statements of the
Borrower.
(b) Meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
II. LOANS
SECTION 2.01. Revolving Credit Loans. (a) Subject to the terms
and conditions, and relying upon the representations and warranties, set
forth herein, the Bank agrees to make loans (individually a "Revolving
Credit Loan" and, collectively, the "Revolving Credit Loans") to the
Borrowers at any time or from time to time on or after the date hereof and
until the earlier of the Termination Date or the date the Commitment shall
have been terminated in accordance with the terms hereof, in an aggregate
principal amount not in excess of $15,000,000 at any time (the
"Commitment"). Within the foregoing limits, the Borrower may borrow,
hereunder on or after the date hereof and prior to the Termination Date,
repay or reborrow subject to the terms, provisions and limitations set
forth herein. After the Termination Date, no amounts repaid may be
reborrowed. The obligations of the Borrowers in regard to payment of the
Loans hereunder are several not joint, it being expressly agreed and
understood that each Borrower shall be liable to the Bank for only the
Loans and interest accruing thereon made to such Borrower. Notwithstanding
the foregoing, each Borrower shall be jointly and severally liable for any
commitment or facility fees, increased costs, indemnities and expenses
hereunder and performance of the terms and conditions of this Agreement.
(b) Revolving, Credit Loans made by the Bank, on any one day
shall be in any combination of Prime Rate Loans and Eurodollar Rate Loans,
provided, that each Prime Rate Loan shall be in an amount not less than
$250,000 and in integral multiples of $250,000, each Eurodollar Rate Loan
shall be in an amount not less than $500,000 and in integral multiples of
$100,000. The initial Revolving Credit Loan by the Bank shall be made
against delivery to the Bank of the Revolving Credit Note, payable to the
order of the Bank, as described in Section 2.02 hereof and upon delivery
of the other documentation required in Article IV herein.
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(c) Each Prime Rate Loan shall be made upon one (1) Business
Day's and each Eurodollar Rate Loan shall be made upon three (3) Business
Days', prior written, telegraphic or facsimile notice from the Borrower to
the Bank. Each such notice (a "Notice of Borrowing") shall be in
substantially the form of Schedule I hereto and shall specify (i) the
requested date of such Loan, (ii) the requested Type of Loan, (iii) the
requested Interest Period for such Loan, and (iv) the requested amount of
such Loan.
SECTION 2.02. Revolving Credit Note. The Revolving Credit Loans
by the Bank shall be evidenced by a promissory note (ad "Revolving Credit
Note"), substantially in the form attached hereto as Exhibits A and A-1,
appropriately completed by the appropriate Borrower, duly executed and
delivered on behalf of each Borrower and payable to the order of the Bank
in the principal amount equal to the Commitment. The date and amount of
each Revolving Credit Loan, and the identity of the Borrower, the date and
amount of each payment or prepayment of principal of any Revolving Credit
Loan shall be recorded on the grid schedule annexed to the Revolving
Credit Note and each Borrower authorizes the Bank to make such
recordation. The Revolving Credit Note and grid schedule shall be
presumptive evidence of the Revolving Credit Loans, absent manifest error.
The aggregate unpaid amount of the Revolving Credit Loans at any time
shall be the principal amount owing on the Revolving Credit Note at such
time. Unless the Borrower elects to give a Notice of Conversion as
provided in Section 2.04 hereof, the aggregate principal amount
outstanding on the Revolving Credit Note shall be payable on the
Termination Date. All accrued and unpaid interest on the Revolving Credit
Loans shall be payable on each Interest Payment Date and on the
Termination Date (if such date is not an Interest Payment Date); provided,
however, that if any such day is not a Business Day, such accrued
interest, if any, shall be payable on the next succeeding Business Day
with additional accrued interest until paid.
SECTION 2.03. Interest on Revolving Credit Loans. Each Revolving
Credit Loan shall bear interest in accordance with Section 2.08, if it is
a Prime Rate Loan and Section 2.10, if it is a Eurodollar Rate Loan.
SECTION 2.04. Term Loan. At any time and from time to time until
the Termination Date either Borrower may deliver to the Bank a request (a
"Conversion Request") that all or a portion of the then outstanding
principal amount of Revolving Credit Loans made to such Borrower be
converted to a Term Loan. The Bank agrees that provided no Event of
Default exists hereunder, and upon the simultaneous payment or prepayment,
as the case may be, (which may be from the proceeds of such Term Loan) in
full of the principal of and interest on the Revolving Credit Loans then
being converted to such Term Loan to make a three, four or five year term
loan (the "Term Loan") to the requesting Borrower on the last day of the
Interest Period then in effect for the Revolving Credit Loans being
converted. The Term Loan shall be in the principal amount contained in the
Conversion Request, and may be in any combination of Prime Rate Loans and
Fixed Rate Loans; provided that each Term Loan, shall be in a principal
amount of not less than $1,000,000; provided, further, that any request
for a conversion to an Absolute Rate Loan must be for an Interest Period
co-extensive with the term remaining between the Borrowing Date for such
Term Loan request and the Expiration Date (as defined in Section 2.05).
The Bank shall make each Term Loan hereunder against delivery to it of a
Term Note payable to the Bank, as described in Section 2.05 hereof. The
principal amount of any Term Loans made under this section when made shall
act as a reduction of the Bank's Commitment to make any Revolving Credit
Loans in such principal amounts, provided, however, that prior to the
Termination Date, at the time of each principal installment payment
pursuant to Section 2.05 hereof such Commitment to make Revolving Credit
Loans shall be deemed re-instated by the amount of such principal payment.
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SECTION 2.05. Term Note; Grid Schedules. (a) Each Term Loan shall
be evidenced by a promissory note ("Term Note") substantially in the form
attached hereto as Exhibit B, appropriately completed, payable to the order
of the Bank, duly executed and delivered on behalf of the appropriate
Borrower, dated the borrowing date and in the principal amount of such Term
Loan. The principal amount outstanding on such Term Note shall be payable
as to principal in twelve (12), sixteen (16) or twenty (20) equal
consecutive quarterly installments and payable on the last day of each
calendar quarter, commencing on the first such day to occur after such Term
Loan Borrowing Date with a final payment due on the last day of the 12th,
16th or 20th calendar quarter thereafter as applicable (the "Expiration
Date"). The date and amount of each Term Loan, each Term Loan term, each
applicable interest rate and related Interest Period, the identity of the
Borrower, and the date and amount of each payment or prepayment of
principal of such Term Loan shall be recorded on the grid schedule annexed
to such Term Note, and each Borrower authorizes the Bank to make such
recordation. Each Term Note and grid schedule shall be presumptive evidence
of such Term Loan made by the Bank, absent manifest error.
(b) All said notations and endorsements on the grid schedules
annexed to all Notes shall, in the absence of manifest error, be conclusive
as to such notations and endorsements, provided, however, that the failure
to make said notation or endorsement with respect to any Loan or payment
shall not limit or otherwise affect the obligation of any Borrower under
the Agreement or the Notes.
SECTION 2.06. Interest on the Term Loan. The Term Loan shall bear
interest in accordance with Section 2.07, if it is an Absolute Rate Loan,
Section 2.08, if it is a Prime Rate Loan, and Section 2.10, if it is a
Eurodollar Rate Loan.
SECTION 2.07. Interest on Absolute Rate Loans. The Borrower shall
pay interest on the unpaid principal amount of each Absolute Rate Loan on
the Term Loan from the Borrowing Date of such Loan until the date such
principal amount is due and payable, on each Interest Payment Date for such
Loan at an interest rate per annum equal to the Absolute Rate applicable to
such Loan. Notwithstanding any other provision of this Agreement, (i) the
Absolute Rate so quoted by the Bank shall be determined in the sole
discretion of the Bank as described in the definitional section hereof, and
(ii) if any of the conditions described in Section 2.19 hereof exists, the
Bank shall not be required to quote a rate for a proposed Absolute Rate
Loan or upon the termination of an Interest Period relating to an existing
Absolute Rate Loan.
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<PAGE>
SECTION 2.08. Interest on Prime Rate Loans. The Borrower shall pay
interest on the unpaid principal amount of each Prime Rate Loan that is a
Revolving Credit Loan or Term Loan from the Borrowing Date of such Loan
until the date such principal amount is due and payable, on each Interest
Payment Date for such Loan at an interest rate per annum equal to the Prime
Rate.
SECTION 2.09. Intentionally Deleted.
SECTION 2.10. Interest on Eurodollar Rate Loans. The Borrower
shall pay interest on the unpaid principal amount of each Eurodollar Rate
Loan that is a Revolving Credit Loan or Term Loan from the Borrowing Date
of such Loan until the date such principal amount is due and payable, on
each Interest Payment Date for such Loan at an interest rate per annum
equal to: i) for Raymond Leasing, 1% in excess of the Adjusted Eurodollar
Rate and (ii) for Raymond, the Applicable Margin.
SECTION 2.11. Continuation and Conversion of Loans. The Borrower
shall have the right, at any time on three (3) Business Days' prior
irrevocable written notice to the Bank, to continue any Prime Rate Loan,
or Eurodollar Rate Loan or portion thereof into a subsequent Interest
Period, if applicable, and to convert any Loan or portion thereof into a
Loan of a different Type, subject to the selection of Interest Periods in
accordance with the definition thereof and to the following conditions
precedent:
(a) no Event of Default shall have occurred and be
continuing at the time of such continuation or conversion;
(b) in the case of a continuation of or conversion of a
Loan(s), the aggregate principal amount of Loans continued or
converted shall not be less than $500,000 with respect to Fixed
Rate Loans and in multiples of $250,000 with respect to Prime Rate
Loans,
(c) each conversion shall be effected by the Bank by
applying the proceeds of the new Absolute Rate Loan, Prime Rate
Loan or Eurodollar Rate Loan to the Loan (or portion thereof) being
converted, and accrued interest on the Loan (or portion thereof)
being converted shall be paid by the Borrower at the time of
conversion; and
(d) a Eurodollar Rate Loan may be converted to another
Type of Loan only on the last day of its Interest Period;
(e) each request for a Eurodollar Rate Loan or a
continuation thereof which shall fail to state an applicable
Interest Period shall be deemed to be a request for an Interest
Period of one month's duration;
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<PAGE>
(f) if the last day of an Interest Period with respect to a
Loan that is to be converted to a Fixed Rate Loan is not a Business
Day, then such conversion shall be made on the next succeeding
Business Day and during the period from the last such day of an
Interest Period to such succeeding Business Day such Loan shall
bear interest as if it were an Prime Rate Loan;
(g) in the event that the Borrower does not give notice to
continue any Eurodollar Rate Loan into a subsequent Interest
Period, the Borrower shall be deemed to have requested that such
Loan (unless repaid) be converted to a Prime Rate Loan at the
expiration of the then current Interest Period; and
(h) any conversion of a Revolving Credit Loan into a Term
Loan must also comply with the provisions of Section 2.04 hereof.
SECTION 2.12. Prepayment of Loans. (a) Subject to the provisions of
Sections 2.12(b), 2.17, 2.20 and 2.21 hereof, the Borrower may, by 11 a.m.
of the day of prepayment in the case of a Prime Rate Loan and three (3)
Business Days' notice to the Bank in the case of a Fixed Rate Loan, prepay
the outstanding amount of any Loan in whole or in part with accrued
interest to the date of such prepayment on the amount prepaid; provided,
however, that any prepayment of any Fixed Rate Loan shall be made on the
last day of an Interest Period for such Loan; and provided, further, that
each partial prepayment of any Loan shall be in a principal amount not
less than $500,000 and integral multiples thereof, except in the case of a
Term Loan with a balance of less than $500,000 which may be prepaid in
full. Each prepayment of the Term Loan shall be permanent provided,
however, that prior to the Termination Date. as described in Section 2.04
hereof such payments shall cause a reinstatement in such amount of the
Bank's Commitment to make Revolving Credit Loans.
(b) The Borrower shall reimburse the Bank on demand for any loss
incurred or to be incurred by it in the reemployment of the funds released
by any prepayment or conversion of any Fixed Rate Loan required or
permitted by any provision of this Agreement (including in the case of
Absolute Rate Loans the prepayment premium described in paragraph (d) of
this section), in each case if such Loan is prepaid or converted other
than on the last day of an Interest Period for such Loan. The Borrower
further agrees to reimburse the Bank on demand for any loss incurred or to
be incurred by it in the reemployment of the funds released by any refusal
by the Borrower to accept any requested Fixed Rate Loan or any requested
continuation thereof or conversion thereto. If any prepayment hereunder
makes it necessary to apply any principal installment payment on a Note to
interest due pursuant to a Fixed Rate Loan, with an Interest Period
extending beyond the date of such installment payment, the Borrower shall
reimburse the Bank upon demand for any loss incurred or to be incurred by
the Bank (determined in accordance with the immediately preceding sentence
and based on whether such prepayment was voluntary or required) in the
reemployment of funds realized on such installment payment and applied to
such Fixed Rate Loan.
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<PAGE>
(c) Each prepayment of any Loan shall be applied to the
installments thereof in the inverse order of maturity and accompanied by
accrued interest on the amount of such prepayment to the date thereof.
(d) The prepayment premium for any Absolute Rate Loan shall mean,
for any prepayment of the Note, a premium (as liquidated damages and not
as penalty) payable to the payee in an amount equal to (1) in the case of
any such prepayment made within the one year period prior to final
maturity, all reasonable losses, expenses and liabilities (including,
without limitation, any interest paid by the Bank to lenders of funds
borrowed by it to make or carry the Loan and losses sustained by the Bank
in connection with the re-employment of such funds) which the Bank may
incur with respect to the Loan or (2) in the case of any such prepayment
made earlier than one year prior to final maturity, the sum of the present
values, each determined at the appropriate Discount Rate, of the excess,
if any, of (a) the amount of interest computed at the Cost of Funds Rate
on the principal amount of the Note (after giving effect to any scheduled
amortization occurring prior to the first day of each Calculation Period)
deemed to be due on the last day of each Calculation Period during the
remaining term of the Note over (b) the amount of each corresponding
interest payment computed at the Redemption Rate. Such present value shall
be computed according to the following formula:
n = X
-----
PV = E NETn
n = 1
-----
(P x (L = R) ) x Daysn - Days n-1
----- --------
360
NETn = ------------------------------------
Daysn - Days0
----- -----
360
(1 + Zn)
X Number, or fraction thereof, of Calculation Periods from date of
prepayment to date of final fixed maturity.
P Principal prepaid
L Cost of Funds Rate
R Redemption Rate
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Daysn - Daysn-l = For each Calculation Period "n", the
actual number of days elapsed during that
Calculation Period.
Daysn - Dayso-1 = For each Calculation Period "n", the
actual number of days elapsed from the date of
prepayment to the last day of that Calculation
Period.
Z = For each Calculation Period "n", the Discount Rate for that Calculation
Period.
"Redemption Rate" shall mean, at any time, the fixed per annum rate
(calculated on the basis of a single annual interest payment), as
determined by the Bank in its sole discretion on the date of such
prepayment, that would be bid by a fixed rate payor under an arm's length
interest rate SWAP transaction having (i) a term approximately equal to the
period commencing on the date of such prepayment and ending on the stated
maturity of such Fixed Rate Loan, (ii) a notional amount equal to the
amount of such prepayment, (iii) a floating rate of LIBOR for the notional
amount and (iv) a counterparty of creditworthiness acceptable to the Bank.
"Discount Rate" shall mean for each Calculation Period, the fixed
per annum rate, as determined by the Bank in its sole discretion on the
date of such prepayment, that would be bid by a fixed rate payor under an
arm's length interest rate SWAP transaction having (i) a term approximately
equal to such Calculation Period, (ii) a notional amount equal to the
amount of such prepayment, (iii) a floating rate of LIBOR for the notional
amount and (iv) a counterparty of creditworthiness acceptable to the Bank.
"Calculation Period" shall mean each annual period commencing on
each anniversary of the date the Loan was made (calculated on the basis of
a single annual payment), except for the initial Calculation Period
following prepayment, which shall commence on the date of such prepayment
and end on the next following anniversary date of the date the Loan was
made.
"Cost of Funds Rate" shall mean the annualized cost of funds
respecting the Loan determined as of the date the Loan was made (calculated
on the basis of a single annual interest payment), such determination to be
made by the Bank, which shall be conclusively binding in the absence of
manifest error, but which shall be calculated by the Bank on the basis of
the rate at which the funds were offered to the Bank on such date for a
maturity equal to that of the Loan.
SECTION 2.13. Reduction or Termination of the Commitment. The
Borrowers acting jointly shall have the right, upon at least two (2)
Business Days' prior written or telephonic notice (promptly confirmed in
writing) to the Bank, at any time to terminate or from time to time reduce
the Commitment without premium or penalty; provided, however, that the
Commitment may not be reduced to the extent that following such reduction
the unpaid principal of the Notes would exceed the Commitment and provided
further that, any acceleration of the Termination Date shall be accompanied
by the payment of Commitment Fee then accrued hereunder.
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SECTION 2.14. Fees. The Borrowers agree to pay to the Bank, in
consideration of its Commitment, a commitment fee ("Commitment Fee") of
3/16% per annum on the average daily unused portion of the Commitment
(based on a year of 360 days), payable quarterly commencing on the first
day of the second quarter following the Closing Date.
SECTION 2.15. Default Rate of Interest; Late Payment Penalty. (a)
Upon the occurrence of a Default or an Event of Default, the interest
rates applicable to the Loans shall immediately without further action by
this Bank be increased to 2% above the rate(s) of interest then in effect
on the Loans and shall be deemed converted at the end of the then
Interest Period to Prime Rate Loans and be deemed to bear interest at a
rate equal to 2 % above the Prime Rate until paid in full.
(b) Borrower also agrees to pay a late charge on any principal
and/or interest payments not paid when due at a fluctuating interest rate
per annum equal to 1 % above the Prime Rate calculated upon the amount
due until the date of payment.
SECTION 2.16. Application of Payments and Computations. All
computations of the Absolute Rate, Prime Rate and Eurodollar Rate and of
fees, overdue payment interest charges and penalties hereunder shall be
made by the Bank on the basis of a year of 360 days, for the actual
number of days (including the first day but excluding the last day)
occurring in the period for which such interest is payable.
SECTION 2.17. Funds; Manner of Payment. Each Loan and each payment
and prepayment of principal and interest on the Notes shall be made in
federal or other immediately available funds without set-off or
counterclaim to the Bank. Whenever any payment to be made hereunder or
under any Note shall be stated to be due, or whenever the last day of any
Interest Period would otherwise occur on a day other than a Business Day,
such payment shall be made and the last day of such Interest Period shall
occur, on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest
or fees, as the case may be. Each Borrower hereby authorizes the Bank to
charge its accounts #324009607 and #322010209, as applicable, for all
principal and interest payments and any fees due hereunder.
SECTION 2.18. Capital Adequacy. If the Bank shall have determined
that, after the date hereof, the adoption of any applicable law, rule,
regulation or guideline regarding capital adequacy, or any change in any
of the foregoing or in the interpretation or administration of any of the
foregoing by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or
compliance by the Bank (or any lending office of the Bank) or the Bank's
holding company with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the
rate of return on the Bank's capital or on the capital of the Bank's
holding company, if any, as a consequence of its obligations hereunder to
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<PAGE>
a level below that which the Bank or the Bank's holding company could
have achieved but for such adoption, change, compliance or directive
(taking into consideration the Bank's policies and the policies of the
Bank's holding company with respect to capital adequacy) by an amount
deemed by the Bank to be material, then from time to time the Borrower
shall pay to the Bank such additional amount or amounts as will
compensate the Bank or the Bank's holding company for any such reduction
suffered.
SECTION 2.19. Inability to Determine Rate. In the event, and on
each occasion, that on the day two Business Days prior to the commencement
of any Interest Period for a Fixed Rate Loan, the Bank shall have
determined (which determination shall, in the absent of manifest error, be
conclusive and binding upon the Borrower) that such rate will not
accurately reflect the cost to the Bank of making or funding the principal
amount of a Fixed Rate Loan during such Interest Period, or that
reasonable means do not exist for ascertaining the rate on the Fixed Rate
Loan, the Bank shall, as soon as practicable thereafter, give written,
telegraphic, telephonic or facsimile notice of such determination to the
Borrower and any request by the Borrower for a Fixed Rate Loan conversion
or continuation of a Fixed Rate Loan shall be deemed a request for a Prime
Rate Loan or another Type of Fixed Rate Loan if it is then currently
available. After such notice shall have been given, and until the
circumstances giving rise to such notice no longer exist, each request for
a Fixed Rate Loan shall be deemed to be a request for a Prime Rate Loan or
another Type of Fixed Rate Loan if it is then currently available.
SECTION 2.20. Other Events. (a) In the event that any enactment of
or change after the date hereof in applicable law, regulation, condition,
directive or interpretation thereof (including any request, guideline or
policy whether or not having the force of law and including, without
limitation, Regulation D promulgated by the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect)
by any authority charged with the administration or interpretation
thereof:
(i) subjects the Bank to any tax with respect to the Loans
hereunder or changes the basis of taxation of payment to the Bank
of principal of or interest on any Loan or any commitment
hereunder or any other amounts payable hereunder (other than any
tax measured by or based upon the overall net income of the Bank
or any branch or office thereof, imposed by the United States of
America or by any other jurisdiction in which the Bank is
qualified to do business or any political subdivision or taxing
authority therein); or
(ii) imposes, modifies or deems applicable any reserve or
deposit requirements against any assets held by, deposits with or
for the account of, or loans or commitments by, an office of the
Bank in connection with payments by the Bank hereunder; or
(iii) imposes upon the Bank or any Interbank Market any
other condition with respect to any amount paid or payable to or
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<PAGE>
by the Bank pursuant to this Agreement; and the result of any of the
foregoing is to increase the cost to the Bank of making the payment or
maintaining its Commitment and Term Loan or to reduce the amount of the
payment receivable by the Bank hereunder or to require the Bank to make
the payment on or calculated by reference to the gross amount of the sum
received by it pursuant hereto, in each case by an amount which the Bank
in its reasonable judgment deems material, then:
(A) the Bank shall promptly notify the Borrower in writing of
the happening of such event;
(B) the Bank shall promptly deliver to the Borrower a
certificate stating the change which has occurred or the
reserve requirements or other conditions which have been
imposed on the Bank or the request, direction or
requirement with which it has complied, together with the
date thereof, the amount of such increased cost, reduction
or payment and the way in which such amount has been
calculated; and
(C) the Borrower shall pay to the Bank, within 30 days after
delivery of the certificate referred to in clause (B)
above, such an amount or amounts as will compensate the
Bank for such additional cost, reduction or payment.
The Bank agrees to designate a different office of the Bank as its lending
office for Eurodollar Rate Loans if the designation would avoid or reduce
any amount payable by the Borrower to the Bank pursuant to this paragraph
(a); provided, however, that such designation need not be made if it would
result in any additional costs, expenses or risks to the Bank that are not
reimbursed by the Borrower pursuant hereto or would be in any other
respect prejudicial to the Bank. If the Bank makes a demand for
compensation pursuant to this paragraph (a), the Borrower may at any time,
upon at least three Business Days' prior written or telegraphic notice to
the Bank either (i) repay in full any outstanding Eurodollar Rate Loan or
Fixed Rate Loan, together with accrued interest thereon to the date of
prepayment or (ii) convert such Loan to a Loan of a different Type,
notwithstanding the provisions of Section 2.12(b).
(b) Failure on the part of the Bank to demand compensation under
paragraph (a) above on any one occasion shall not constitute a waiver of
its right to demand such compensation on any other occasion and failure on
the part of the Bank to deliver any certificate in a timely manner shall
not in any way reduce any obligations of the Borrower to the Bank under
this Section 2.20.
SECTION 2.21. Change in Legality. (a) Notwithstanding anything to
the contrary contained elsewhere in this Agreement, if any change after
the date hereof in any law or regulation or in the interpretation thereof
by any governmental authority charged with the administration thereof
shall make it unlawful (based on the opinion of any counsel, whether
in-house, special or general, for the Bank) for the Bank to make or
maintain any Fixed Rate Loan or to give effect to its obligations as
contemplated hereby with respect to any Fixed Rate Loan, then, by written
notice to the Borrower by the Bank, the Bank may:
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<PAGE>
(i) declare that such Fixed Rate Loans will not thereafter
be made by the Bank hereunder, whereupon the Borrower shall be
prohibited from requesting such Loans from the Bank hereunder
unless such declaration is subsequently withdrawn; and the Bank
agrees to withdraw any such declaration if and to the extent that
the making and/or maintenance by the Bank of its Fixed Rate Loans
shall cease to be unlawful; and
(ii) require that all outstanding Fixed Rate Loans made by
it to be converted to Prime Rate Loans, whereupon all such Loans
shall be automatically converted to Prime Rate Loans as of the
effective date of such notice as provided in paragraph (b) below
(notwithstanding the provisions of Section 2.12).
(b) For purposes of this Section 2.21, a notice to the Borrower by
the Bank pursuant to paragraph (a) above shall be effective, if lawful and
if any Fixed Rate Loans shall then be outstanding, on the last day of then
current Interest Period; otherwise, such notice shall be effective on the
date of receipt by the Borrower.
(c) The Bank agrees to designate a different office of the Bank as
its lending office for Eurodollar Rate Loans if such designation will
effect compliance with the law or regulation or interpretation thereof
invoking the provisions of this Section 2.21; provided, however, that such
designation need not be made if it would result in any additional costs,
expenses or risks to the Bank that are not reimbursed by the Borrower
pursuant hereto or would be in any other respect prejudicial to the Bank.
III. REPRESENTATIONS AND WARRANTIES
Each Borrower, for itself, represents and warrants to the Bank,
that:
SECTION 3.01. Organization, Corporate Powers, etc. The Borrower
(i)is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware or New York, as
applicable, and (ii) has the power and authority to own its properties and
to carry on its business as now being conducted, (iii) is duly qualified
to do business in every jurisdiction wherein the conduct of its business
or the ownership of its properties is such as to require such
qualification and (iv) has the corporate power to execute, deliver and
perform the Loan Documents.
SECTION 3.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of
the Loan Documents and the borrowings by the Borrower hereunder (a) has
been duly authorized, (b) will not violate (i) any provision of law or any
governmental rule or regulation applicable to the Borrower, (ii) any order
of any court or other agency of government binding on the Borrower or any
indenture, agreement or other instrument to which the Borrower is a party,
or by which the Borrower or any of its property is bound, and (c) will not
be in conflict with, result in a breach of or
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constitute (with due notice and/or lapse of time) a default under, any
such indenture, agreement or other instrument, or result in the creation
or imposition of any lien, charge or encumbrance of any nature whatsoever
upon any of its property or assets other than as contemplated by the Loan
Documents. Each person executing the Loan Documents has full authority to
execute and deliver same for and on behalf of the Borrower.
SECTION 3.03. Financial Condition. (a) The Borrower has furnished
the Bank with consolidated financial statements of each Borrower and their
Subsidiaries for the fiscal year ending December 31, 1993, audited and
certified by Ernst & Young together with unaudited statement/balance sheet
and the related statements of income and retained earnings for the period
ending September 30, 1994. Such financial statements were prepared in
conformity with Generally Accepted Accounting Principles, and present
fairly the financial condition of each Borrower and their Subsidiaries and
as of the date of such financial statements and the results of operations
for the period covered thereby.
(b) Neither the Borrowers nor any of their consolidated
Subsidiaries had, at the date of the most recent balance sheet referred to
above, any material contingent obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or
long-term commitment, including, without limitation, any interest rate or
foreign currency swap or exchange transaction or other financial
derivative, which is not reflected in the foregoing statements or in the
notes thereto.
(c) During the period from September 30, 1994 to and including the
date hereof there has been no sale, transfer or other disposition by the
Borrowers or any of their consolidated Subsidiaries of any material part
of its business or property and no purchase or other acquisition of any
business or property (including any capital stock of any other Person)
material in relation to the consolidated financial condition of the
Borrowers and their consolidated Subsidiaries at September 30, 1994.
(d) Since September 30, 1994 there has been no development or
event nor any prospective development or event, which has had or could
reasonably be expected to have a Material Adverse Effect. There is no
obligation or liability, contingent or otherwise, of the Borrowers and its
Subsidiaries, which is material in amount and which is not, or shall not
be, reflected in the foregoing statements (and the related notes thereto)
as of said date.
SECTION 3.04. Taxes. All assessed deficiencies resulting from
Internal Revenue Service examinations of the Federal income tax returns of
the Borrower have been discharged or reserved against. The Borrower has
filed or caused to be filed all Federal, state and local tax returns which
are required to be filed, and have paid or have caused to be paid all
taxes as shown on said returns or on any assessment received by it, to the
extent that such taxes have become due, except any such taxes that are
immaterial in amount or are being contested in good faith with appropriate
reserves set aside therefor.
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SECTION 3.05. Title to Properties. The Borrower has good and
marketable title to its properties and assets reflected on the balance
sheet referred to in Section 3.03 hereof, except for such properties and
assets as have been disposed of since the date of such balance sheet as no
longer used or useful in the conduct of its business or as have been
disposed of in the ordinary course of business, and all such properties
and assets are free and clear of mortgages, pledges, liens, charges and
other encumbrances, except as required or permitted by the provisions
hereof or as disclosed in the balance sheet referred to in Section 3.03
hereof.
SECTION 3.06. Litigation. (a) There are no actions, suits or
proceedings (whether or not purportedly on behalf of the Borrower)
pending or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or any material property of the Borrower, at law
or in equity or before or by any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which involve any of the
transactions contemplated herein or which, if adversely determined
against the Borrower, would have a Material Adverse Effect; and (b) the
Borrower is not in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any court or Federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, which would have a
Material Adverse Effect.
SECTION 3.07. Agreements. The Borrower is not a party to any
agreement or instrument or subject to any charter or other corporate
restriction or any judgment, order, writ, injunction, decree or
regulation materially and adversely affecting its business, properties or
assets, operations or condition (financial or otherwise). The Borrower is
not in default in any manner which would have a Material Adverse Effect
or materially and adversely affect the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained
in any other agreement or instrument to which it is a party.
SECTION 3.08. ERISA. No Reportable Event has occurred during the
five-year period prior to the date on which this representation is made
or deemed made with respect to any Plan, and each Plan has complied in
all material respects with the applicable provisions of ERISA and the
Code. The present value of all accrued benefits under each Single
Employer Plan maintained by the Borrower or any Commonly Controlled
Entity (based on those assumptions used to fund the Plans) did not, as of
the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits. Neither the Borrower nor
any Commonly Controlled Entity has had a complete or partial withdrawal
from any Multiemployer Plan, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed
made. No such Multiemployer Plan is in reorganization or Insolvent.
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SECTION 3.09. Proceeds of the Loan. The proceeds of the Loans
shall be used by the Borrower only for the purposes described in the
preamble hereto.
SECTION 3.10. Federal Reserve Regulations. (a) The Borrower is not
engaged principally in, nor have as one of its important activities, the
business of extending credit for the purpose of purchasing or carrying any
"margin stock" (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System of the United States, as amended
to the date hereof). No part of the proceeds of the borrowings hereunder
will be used to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying any such margin stock. No
part of the proceeds of the borrowings hereunder will be used for any
purpose which violates or which is inconsistent with the provisions of
Regulation X of said Board of Governors. If requested by the Bank, the
Borrower will furnish to the Bank a statement on Federal Reserve Form U-1.
(b) No part of the proceeds of the Loans will be used, whether
directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to purchase or to carry margin stock or to extend credit
to others for the purpose of purchasing or carrying margin stock, or to
refund indebtedness originally incurred for such purpose, or (ii) for any
purpose which violates or is inconsistent with the provisions of the
Regulations G, T, U, or X of the Board of Governors of the Federal Reserve
System.
SECTION 3.11. Subsidiaries. Attached hereto as Schedule II is a
correct and complete list of all the Borrower's Subsidiaries and
Affiliates, showing as to each Subsidiary, its name, the jurisdiction of
its incorporation and the percentage of such outstanding shares owned by
the Borrower and other Subsidiaries, respectively. Each of the Borrower's
Subsidiaries and Affiliates is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
SECTION 3.12. Environmental Matters. To the best knowledge of the
Borrower, each of the representations and warranties set forth in
paragraphs (a) through (e) of this subsection is true and correct with
respect to each parcel of real property owned or operated by the Borrower
and/or its Subsidiaries (the "Properties"), except to the extent that the
facts and circumstances giving rise to any such failure to be so true and
correct could not reasonably be expected to have a Material Adverse
Effect:
(a) The Properties do not contain, and have not previously
contained, in, on, or under, including, without limitation, the
soil and groundwater thereunder, any Hazardous Materials.
(b) The Properties and all operations and facilities
at the Properties are in compliance with all Environmental Laws,
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and there is no Hazardous Materials contamination or violation of
any Environmental Law which could interfere with the continued
operation of any of the Properties or impair the fair market value
of any thereof.
(c) Neither the Borrower nor any of its Subsidiaries has
received any complaint, notice of violation. alleged violation,
investigation or advisory action or of potential liability or of
potential responsibility regarding environmental protection matters
or permit compliance with regard to the Properties, nor is the
Borrower aware that any Governmental Authority is contemplating
delivering to the Borrower or any of its Subsidiaries any such
notice.
(d) Hazardous Materials have not been generated, treated,
stored, disposed of, at, on or under any of the Properties, nor
have any Hazardous Materials been transferred from the Properties
to any other location.
(e) There are no governmental, administrative actions or
judicial proceedings pending or contemplated under any
Environmental Laws to which the Borrower or any of its Subsidiaries
is or will be named as a party with respect to the Properties, nor
are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Laws with
respect to any of the Properties.
SECTION 3.13. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended. The Borrower is not subject to regulation under any
Federal or State statute or regulation which limits its ability to incur
Indebtedness.
SECTION 3.14. Material Change. No material adverse change in the
business or operations of the Borrower has occurred since the financial
statements dated as of September 30, 1994 previously delivered to Bank.
SECTION 3.15. Governmental Approval. No registration with or
consent or approval of, or other action by, any Federal, state or other
governmental authority or regulatory body is required in connection with
the execution, delivery and performance of the Loan Documents or the
borrowings hereunder.
SECTION 3.16. Full Disclosure. All written information heretofore
furnished by the Borrower to the Bank for purposes of or in connection
with this Agreement is, and all such information hereafter furnished by
the Borrower to the Bank will be, true and accurate in all material
respects on the date as of which such information is stated or certified.
The Borrower has disclosed to the Bank in writing any and all facts which,
in the reasonable judgment of the Borrower have or would be reasonably
likely to cause a Material Adverse Effect.
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SECTION 3.17. Binding Effect. This Agreement and each other Loan
Document to which the Borrower or any of its Subsidiaries is a party
constitute the legal, valid and binding obligations of the Borrower and
any of its Subsidiaries to the extent it is a party thereto, enforceable
against such Person in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
SECTION 3.18. Trademarks and Licenses, etc. The Borrower and its
Subsidiaries own or are licensed or otherwise have the right to use, to
the best of their knowledge, all of the trademarks, service marks, trade
names, franchises, authorizations and other rights that are reasonably
necessary for the operation of their respective businesses, without
conflict with the rights of any other Person, to the extent that failure
to have such rights would reasonably be likely to cause a Material Adverse
Effect. To the best knowledge of the Borrower, no slogan or other
advertising device or product, now employed, or now contemplated to be
employed by the Borrower or any of its Subsidiaries infringes upon any
rights held by any other Person; no claim or litigation regarding any of
the foregoing is pending or threatened, and no statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the
Borrower, proposed regarding the foregoing, which, in either case, would
reasonably be expected to result in a Material Adverse Effect.
IV. CONDITIONS OF LENDING
The obligation of the Bank to lend hereunder is subject to the
following conditions precedent:
SECTION 4.01. Representations and Warranties: No Default. At the
time of each borrowing hereunder: (i) the representations and warranties
set forth in Article III hereof shall be true and correct in all material
respects on and as of such time with the same effect as though such
representations and warranties had been made on and as of such time; and
(ii) the Borrowers shall be in compliance with all the terms and
provisions set forth herein on their part to be observed or performed, and
no Default or Event of Default shall have occurred and be continuing at
the time of each borrowing hereunder.
SECTION 4.02. Opinion of Counsel. On or prior to the Closing Date,
the Bank shall have received the legal opinion of the Borrowers' Vice
President - General Counsel and Secretary, counsel to the Borrowers
covering such matters incident to the transactions contemplated by this
Agreement as the Bank may reasonably require.
SECTION 4.03. No Default Certificate; Deemed Representation. At
the time of the initial borrowing hereunder, each Borrower shall deliver
to the Bank a certificate in the form of Schedule III, dated such date and
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signed by the Chief Financial Officer of such Borrower confirming
compliance with the conditions precedent set forth in Sections 4.01
hereof. Each request for a subsequent borrowing hereunder shall be deemed
a representation and warranty by such Borrower that the conditions
precedent set forth in Sections 4.01 hereof are true and correct with the
same effect as though such representations and warranties had been made on
and as of the date of such borrowing.
SECTION 4.04. Supporting Documents. On or prior to the Closing
Date, the Bank shall have received (a) a certificate of good standing for
the Borrowers from the Secretary of the State of Delaware or New York, as
appropriate, dated as of a recent date; (b) copies of the Certificates of
Incorporation and By-laws of the Borrowers (c) a certificate of the
Secretary or an Assistant Secretary of the Borrowers dated the Closing
Date and certifying (i) that neither the Certificates of Incorporation nor
the By-laws of the Borrowers have been amended since attaching a true and
correct copy of any such amendment; (ii) that attached thereto is a true
and complete copy of resolutions adopted by the Board of Directors of the
Borrowers authorizing the execution, delivery and performance of the Loan
Documents; (iii) the incumbency and specimen signature of each officer of
the Borrowers executing the Loan Documents, and a certification by another
officer of the Borrowers as to the incumbency and signature of the
Secretary or Assistant Secretary of the Borrowers; (d) such other
documents as the Bank may reasonably request.
SECTION 4.05. Other Information, Documentation. The Bank shall
receive such other and further information and documentation as it may
reasonably require, including, but not limited to, any information or
documentation or a letter from the Borrowers relating to their compliance
with ERISA and with the requirements of all federal, state and local laws,
ordinances, rules, regulations or policies governing the use, storage,
treatment, transportation, refinement, handling, production or disposal of
Hazardous Materials.
V. AFFIRMATIVE COVENANTS
Each Borrower, for itself, covenants and agrees with the Bank
that, so long as this Agreement shall remain in effect or any of the
principal of or interest on the Notes or any fees remain unpaid, it will,
and will cause each of their Subsidiaries to:
SECTION 5.01. Corporate Existence, Properties, Insurance, etc.
Except as permitted in Section 5.02, do or cause to be done all things
necessary to preserve and keep in full force and effect its existence as a
corporation, its rights and franchises and comply, in all material
respects, with all laws applicable to it; at all times maintain, preserve
and protect all franchises, trade names, licenses, patents, trademarks and
copyrights and preserve all material property used or useful in the
conduct of their business and keep the same in good repair, working order
and condition, reasonable wear and tear excluded, and from time to time
make, or cause to be made, all needful and proper repairs, renewals,
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replacements, betterments and improvements thereto so that the business
carried on in connection therewith may be properly and advantageously
conducted at all times and at all times keep its insurable proportions
adequately insured.
SECTION 5.02. Payment of Indebtedness, Taxes, etc. (a) Pay all
indebtedness and obligations as and when due and payable and (b) pay and
discharge or cause to be paid and discharged promptly all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income and profits, or upon any of its property, real, personal or mixed,
or upon any part thereof, before the same shall become in default, as well
as all lawful claims for labor, materials and supplies or otherwise which,
if unpaid, might become a lien or charge upon such properties or any part
thereof; provided, however. that the Borrower nor any of its Subsidiaries
shall be required to pay and discharge or cause to be paid and discharged
any such tax, assessment, charge, levy or claim so long as the validity
thereof shall be contested in good faith by appropriate proceedings, and
the Borrower or such Subsidiary, as the case may be, shall have set aside
on its books adequate reserves with respect to any such tax, assessment,
charge, levy or claim so contested; and further provided that, subject to
the foregoing proviso, the Borrower and its Subsidiaries will pay or cause
to be paid all such taxes, assessments, charges, levies or claims upon the
commencement of proceedings to foreclose any lien which has attached as
security therefor.
SECTION 5.03. Reporting Requirements. In the case of each
Borrower, furnish directly to the Bank:
(a) as soon as available and in any event within 120 days
after the end of each fiscal year of each Borrower, a
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as of the end of such fiscal year and a consolidated
income statement and statements of cash flows and changes in
stockholders' equity of the Borrower and its consolidated
Subsidiaries for such fiscal year, all in reasonable detail and
stating in comparative form the respective consolidated figures
for the corresponding date and period in the prior fiscal year,
and all prepared in accordance with GAAP and as to the
consolidated statements accompanied by an opinion thereon
acceptable to the Bank by Ernst & Young or other independent
accountants of national standing selected by the Borrower;
(b) deliver together with the information required in (a)
above, the same information presented on a consolidating basis
prepared by management of each Borrower;
(c) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each fiscal
year of the Borrower, a consolidated and consolidating balance
sheet of the Borrower and its consolidated Subsidiaries as of the
end of such quarter and a consolidated and consolidating income
statement and statements of cash flows and changes in
stockholders' equity, of the Borrower and its consolidated
Subsidiaries for the period commencing at the end of the previous
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fiscal year and ending with the end of such quarter, all in
reasonable detail and stating in comparative form the respective
consolidated and consolidating figures for the corresponding date
and period in the previous fiscal year and all prepared in
accordance with GAAP and certified by the chief financial officer
of the Borrower (subject to year-end adjustments);
(d) promptly upon receipt thereof, copies of any reports
submitted to the Borrower or any of its Subsidiaries by
independent certified public accountants in connection with
examination of the financial statements of the Borrower or any
such Subsidiary made by such accountants;
(e) simultaneously with the delivery of the financial
statements referred to above, a certificate of the chief financial
officer of the Borrower (i) certifying that to the best of his
knowledge no Default or Event of Default has occurred and is
continuing or, if a Default or Event of Default has occurred and
is continuing, a statement as to the nature thereof and the action
which is proposed to be taken with respect thereto, and (ii) with
computations demonstrating compliance with the covenants contained
in Sections VII, VIIA or VIIB, as applicable;
(f) promptly after the commencement thereof, notice of
each action, suit, and proceeding before any court or governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, affecting the Borrower or any of its
Subsidiaries which, (i) involves a claim in which it appears that
the potential liability exceeds 1/2% of the Consolidated Tangible
Net Worth plus Subordinated Debt approved by the Bank in writing;
(ii) if determined adversely to the Borrower or such Subsidiary,
could have a material adverse effect on the financial condition,
properties, or operations of the Borrower or such Subsidiary, or
(iii) questions the validity of any of the Loan Documents;
(g) as soon as possible after the occurrence of each
Default or Event of Default, a written notice setting forth the
details of such Default or Event of Default and the action which
is proposed to be taken by the Borrower with respect thereto;
(h) at all times indicated in (a) above, a copy
of the management letter prepared by the independent auditors;
(i) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of the
Borrowers and any of their Subsidiaries as the Bank may reasonably
request.
SECTION 5.04. Access to Premises and Records. Maintain financial
records in accordance with Generally Accepted Accounting Principles and
permit representatives of the Bank to have access to such financial
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records and the premises of the Borrower and any of its Subsidiaries upon
request, and to make such excerpts from such records or to conduct such
audits and field examinations as such representatives deem reasonably
necessary.
SECTION 5.05. Notice of Adverse Change. Promptly, but not later
than fifteen (15) Business Days after any change or information shall have
come to the attention of any Executive Officer of the Borrower, notify the
Bank in writing of (a) any change in the business or the operations which,
in the good faith judgment of such officer, would be reasonably likely to
have a Material Adverse Effect, and (b) any information which indicates
that any financial statements which are the subject of any representation
contained in this Agreement, or which are furnished to the Bank pursuant
to this Agreement, fail, to any material extent, to present fairly the
financial condition and results of operations purported to be presented
therein, disclosing the nature thereof.
SECTION 5.06. Notice of Default. Promptly, in the event any
Executive Officer of the Borrower knows of any Default or Event of
Default, or knows of an event of default under any other agreement,
furnish to the Bank a written statement as to such occurrence, specifying
the nature and extent thereof and the action (if any) which is proposed to
be taken with respect thereto.
SECTION 5.07. ERISA. (a) Comply, in all material respects with the
provisions of ERISA applicable to any Plan maintained by the Borrower and
the Subsidiaries; (b) As soon as possible and, in any event, within 10
days after the Borrower or any Subsidiary knows any of the following,
deliver to the Bank a certificate of the Chief Financial Officer setting
forth details as to such occurrence and such action, if any, which the
Borrower, any Subsidiary or ERISA Affiliate is required or proposes to
take, together with any notices required or proposed to be given to or
filed with or by the Borrower, the Subsidiary, ERISA Affiliate, the PBGC,
a Plan participant or the Plan Administrator with respect thereto: that a
Reportable Event has occurred or is expected to occur, that an accumulated
funding deficiency has been incurred or an application may be or has been
made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code with
respect to a Plan, that a Plan has been or may be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA, that a Plan has
an Unfunded Current Liability giving rise to a lien under ERISA, that
proceedings may be or have been instituted to terminate a Plan, that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect
a delinquent contribution to a Plan, or that the Borrower, any Subsidiary
or any ERISA Affiliate will or may incur any liability (including any
contingent or secondary liability) to or on account of the termination of
or withdrawal from a Plan under Section 4062, 4063, 4064, 4201 or 4204 of
ERISA. In addition to any certificates or notices delivered to the Bank
pursuant to the second sentence hereof, copies of annual reports and any
other notices received by the Borrower or Subsidiary required to be
delivered to the Bank hereunder shall be delivered to the Bank no later
than 30 days after the later of the date such report or notice has been
filed with the Internal Revenue Service or the PBGC, given to Plan
participants or received by the Borrower or the Subsidiary.
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SECTION 5.08. Compliance with Contractual Obligations and
Reguirements of Law; Applicable Laws. Comply, in all material respects,
with all Contractual Obligations and Requirements of Law, the breach of
which would be reasonably likely to have a Material Adverse Effect.
SECTION 5.09. Subsidiaries. Give the Bank prompt written
notice of the creation, establishment or acquisition, in any manner,
of any Subsidiary or Affiliate not existing on the date hereof.
SECTION 5.10. Environmental Laws.
(a) Comply with, and insure compliance by all tenants and
subtenants, if any, with, all Environmental Laws and obtain and comply
with and maintain and insure that all tenants and subtenants obtain and
comply with and maintain, any and all licenses, approvals, registrations
or permits required by Environmental Laws except to the extent that
failure to do so could not be reasonably expected to have a Material
Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and
directives of all Governmental Authorities respecting Environmental Laws
except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not be
reasonably expected to have a Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Bank and its
respective employees, agents, officers and directors, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature known or unknown, contingent
or otherwise, arising out of, or in any way relating to the violation of
or non-compliance with any Envirorunental Laws applicable to the real
property owned or operated by the Borrower or any of its Subsidiaries, or
any orders requirements or demands of Governmental Authorities related
thereto, including, without limitation, attorney's and consultant's fees,
investigation and laboratory fees, court costs and litigation expenses,
except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of the party seeking indemnification
therefor.
SECTION 5.11. Support Services Agreement. Raymond shall maintain
the Support Services Agreement dated September 1, 1993, among it and its
Canadian Subsidiaries, R.H.E., Ltd. and Raymond Industrial Equipment,
Ltd., in effect, comply with its obligations thereunder, and enforce the
obligations of its Subsidiaries thereunder, all without waiver, amendment
or assignment by any of the parties, except with the prior written consent
of the Bank.
SECTION 5.12. Voting of Subsidiaries' Shares. The Borrowers will
each vote the shares of any Subsidiary, and cause any Subsidiary share to
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be voted, in a manner which will not violate any of the covenants or
restrictions of this Agreement or any other of the Loan Documents.
VI. NEGATIVE COVENANTS
Each Borrower for itself covenants and agrees with the Bank that,
so long as this Agreement shall remain in effect or any of the principal
of or interest on the Notes or any fees remain unpaid, it will not, nor
will it permit any Subsidiary to, directly or indirectly:
SECTION 6.01. Liens. Incur, create, assume or suffer to exist any
mortgage, pledge, lien, charge or other encumbrance or restriction of any
nature whatsoever (including conditional sales, other title retention
agreements or liens on inventory or accounts receivables) on any of their
assets now or hereafter owned, other than:
(a) liens existing on the date hereof as set forth on
Schedule IV attached hereto which liens are not to be renewed,
extended or refinanced;
(b) deposits under workmen's compensation, unemployment
insurance and social security laws, or to secure the performance of
bids, tenders, contracts (other than for the repayment of borrowed
money) or leases or to secure statutory obligations or surety,
appeal bonds or discharge of lien bonds, or to secure indemnity,
performance or other similar bonds in the ordinary course of
business;
(c) statutory liens of landlords and other liens imposed by
law, such as carriers', warehousemen's or mechanic's liens,
incurred in good faith in the ordinary course of business and
deposits made or bonds filed in the ordinary course of business to
obtain the release of such liens;
(d) liens for taxes not yet due, or liens for taxes
contested as permitted by Section 5.02;
(e) any other liens granted to the Bank, and
(f) debt secured by purchase money mortgages or other
encumbrances on after acquired property, provided that the
principal amount of all such secured debt does not exceed 10% of
the Borrower's tangible net worth plus Subordinated Debt approved
by the Bank in writing.
SECTION 6.02. Guarantees, Etc. Assume, guarantee, endorse or
otherwise be or become directly or contingently responsible or liable
(including, but not limited to, an agreement to purchase any obligation,
stock, assets, goods or services or to supply or advance any funds,
assets, goods or services, or any agreement to maintain or cause such
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Person to maintain a minimum working capital or net worth or otherwise to
assure the creditors of any Person against loss) for the obligations of
any Person ("Guarantee"), or permit any of its Subsidiaries to do so, (i)
except Guarantees by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business, and
(ii) except Guarantees of obligations aggregating not more than 10% of the
amount of its tangible net worth (excluding, however, from such
calculation Raymond's guarantee of Raymond Leasing's 8.86% Senior Notes
due November 27, 1997) from time to time, which Guarantee obligations
shall be included in current liabilities, total liabilities or funded
debt, as appropriate, depending on the terms of the guaranteed
obligations.
SECTION 6.03. Sale of Notes. Sell, transfer, discount or otherwise
dispose of notes, accounts receivable or other rights to receive payment
with or without recourse, except for the purpose of collection in the
ordinary course of business.
SECTION 6.04. Investments. Make investments, lend or advance money,
purchase or hold beneficially any stock, other securities, or evidences of
indebtedness of, purchase or acquire all or a substantial part of the
assets of, make or permit to exist any interest whatsoever in, any other
Person, other than as set forth in Section 6.12 hereof, except that the
Borrower may invest in:
(a) direct obligations of the United States of America or
obligations guaranteed by the United States of America, provided
that such obligations mature within one year from the date of
acquisition thereof; or
(b) time certificates of deposit issued by any commercial
bank organized and existing under the laws of the United States or
any state thereof and having aggregate capital and surplus in
excess of $500,000,000; or
(c) commercial paper rated not less than A-1 or P-1 or
their equivalent by Moody's Investor Services, Inc. or Standard &
Poor's Corporation, respectively; or
(d) money market mutual funds having assets in excess
of two billion dollars;
(e) advances to and/or investments in Subsidiaries that
guaranty all Loans on terms satisfactory to the Bank;
(f) capital leases under which Raymond Leasing is the
lessor, entered into by Raymond Leasing in the ordinary course of
its equipment leasing business; and
(g) advances or investments by Raymond in Unconsolidated
Investees made after December 31, 1994 aggregating up to 15 % of
tangible net worth plus Subordinated Debt approved by the Bank in
writing, or
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(h) advances and/or investments in any Person (other than
permitted above), whether by acquisition of stock, indebtedness,
other obligation or security, or by loan, advance, capital
contribution, or otherwise so long as (i) the sum of such
acquisition, advance or investment (valued immediately after such
action) made after December 31, 1994 does not exceed 10% of the
Borrower's tangible net worth plus Subordinated Debt approved by
the Bank in writing, (ii) a default or an event of default under
this Loan Agreement would not exist, and (iii) the Borrowers could
incur at least $1.00 of additional Senior Indebtedness.
SECTION 6.05. Change in Business. Materially change or alter the
nature of its business from the business currently engaged in.
SECTION 6.06. Dividends. Declare or pay any cash dividend on its
capital stock or make any other distribution with respect to its capital
stock (other than distributions in accordance with Section 6.11 hereof)
or redeem, retire, purchase or otherwise acquire, directly or indirectly,
for value or set apart any sum for the redemption, retirement, purchase
or other acquisition of, directly or indirectly, any share of its capital
stock or warrants or options therefor except that: (a) the Borrower may
declare and deliver dividends and make distributions payable solely in
common stock of the Borrower; (b) the Borrower may purchase or otherwise
acquire shares of its capital stock by exchange for or out of the
proceeds received from a substantially concurrent issue of new shares of
its capital stock; (c) either Borrower may make or declare cash dividends
with respect to the capital stock of the Borrower unless immediately
after giving effect thereto, the sum of such cash dividends would not
exceed the sum of 50% of cumulative net income (minus 100% of any net
loss) subsequent to December 31, 1993, plus $2,000,000 for Raymond and
$1,000,000 for Raymond Leasing. In addition, neither Borrower will
authorize or make any cash dividends if, after giving effect thereto, a
default or event of default would exist or if the Borrower could not
incur at least $1.00 of additional Senior Indebtedness.
SECTION 6.07. Subordinated Debt. Make any optional prepayment of,
or purchase, redeem or otherwise acquire, or amend any provision in
respect of the subordination or the terms of payment of any Subordinated
Debt except such Subordinated Debt may be converted in part or in full to
equity.
SECTION 6.08. Accounting Policies and Procedures. Permit any
material change in the accounting policies and procedures of the
Borrower, other than as required by generally accepting accounting
principles, including a change in the Borrower's fiscal year, without the
prior consent of the Bank.
SECTION 6.09 Stock of Subsidiaries, Etc. (a) Sell or otherwise
dispose of any shares of capital stock of any of its Subsidiaries, or (b)
permit any such Subsidiary to issue any additional shares of its capital
stock, except as permitted by Section 6.06, and except for directors'
qualifying shares.
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SECTION 6.10. Transactions with Affiliates. Enter into any
transaction, including, without limitation, the purchase, sale or
exchange of property or the rendering of any service, with any Affiliate
or permit any of its Subsidiaries to enter into any transaction,
including, without limitation, the purchase, sale or exchange of property
or the rendering of any service, with any Affiliate, except in the
ordinary course of and pursuant to the reasonable requirements of the
Borrower's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary than it would
obtain in a comparable arms length transaction with a Person not an
Affiliate.
SECTION 6.11. Merger or Consolidation or Sales of Assets. Neither
Borrower will and will not permit a Subsidiary to, become a party to any
merger or consolidation or sell, lease, assign or otherwise dispose of
10% or more of its consolidated assets in any fiscal year or assets which
have accounted for 10% or more of Consolidated Adjusted Net Income in the
fiscal year (except that any Subsidiary may merge into or consolidate
with either Borrower or another Subsidiary so long as the Borrower would
be the surviving Corporation) unless immediately thereafter (1) the
Borrower would be the surviving corporation or (2) the surviving
corporation would be (i) organized under the laws of the United States,
(ii) would be engaged in the same line of business as Borrower, (iii) the
surviving corporation expressly assumes, in writing, the due and punctual
payment of the principal and interest and premium, if any, on the loans
and the due and punctual performance and observance of all covenants and,
in the case of Leasing, (iv) Raymond expressly acknowledges such merger
or consolidation and the continuing validity of the Operating Agreement;
provided, however, that in any case, no event of default would exist
under the covenants contained in this Agreement and the Borrower would be
able to issue at least $1.00 of additional Senior Indebtedness.
SECTION 6.12. Restrictions on Leases of Equipment. Raymond Leasing
shall not, and shall not permit its Subsidiary to, at any time permit the
aggregate original cost of all equipment at any time subject to a lease
and manufactured or sold by a Person other than Raymond to exceed 15% of
the aggregate original cost of all equipment at such time subject to a
lease provided, however, that for purposes of this Section, batteries and
chargers shall be deemed to be equipment manufactured by Raymond.
SECTION 6.13. The Raymond Corporation Subsidiaries. Raymond shall
not enter into any agreement or other arrangement, or take or permit its
Subsidiaries to take any action, which would limit its ability to receive
loans or dividends from any of its Subsidiaries other than Raymond
Leasing, or would limit the ability of such Subsidiaries to make such
loans or pay such dividends.
VII. FINANCIAL COVENANTS - THE RAYMOND CORPORATION
So long as any of the Notes shall remain unpaid or the Bank shall
have any Commitment under this Agreement, Raymond agrees that it shall, at
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all times, with respect to (i) itself, (ii) its existing consolidated
Subsidiaries other than Raymond Leasing and (iii) any Subsidiaries that
become consolidated Subsidiaries after the date of this Agreement:
SECTION 7.01. Minimum Working Capital. Maintain Raymond Working
Capital of not less than $45,000,000.
SECTION 7.02. Minimum Tangible Net Worth. Maintain a tangible net
worth of not less than $42,000,000 plus 50% of its net income earned
subsequent to December 31, 1993.
SECTION 7.03. Leverage Ratio. Maintain a ratio of total
unsubordinated liabilities to tangible net worth of not greater than 1.25
to 1.00.
SECTION 7.04. Interest Coverage. Maintain as of the end of each
calendar quarter a ratio of EBITDA for the four calendar quarter period
then ended, to Interest Expense for such period of not less than 2.25 to
1.0.
SECTION 7.05. Loss Quarters. Not have a net loss in two (2)
consecutive calendar quarters or in any fiscal year.
VII-A. FINANCIAL COVENANTS - RAYMOND LEASING
So long as any of the Notes shall remain unpaid or the Bank shall
have any Commitment under this Agreement, Raymond Leasing agrees that it
shall, at all times:
SECTION 7A.01. Minimum Tangible Net Worth. Maintain a tangible
net worth of not less than $20,000,000, plus 50% of its net income earned
subsequent to December 31, 1993.
SECTION 7A.02. Leverage Ratio. Maintain a ratio of Senior
Indebtedness to tangible net worth of not greater than 3.0 to 1.0.
SECTION 7A.03. Interest Coverage. Maintain as of the end of each
calendar quarter a ratio of EBITDA for the four calendar quarter period
then ended, to Interest Expense for such period of not less than 1.3 to
1.00.
SECTION 7A.04. Loss Quarter. Not incur a net loss in two (2)
consecutive calendar quarters or in any fiscal year.
SECTION 7A.05. Working Capital. Maintain a Working Capital of not
less than $0.
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VII-B FINANCIAL COVENANTS - CONSOLIDATED
So long as any of the Notes shall remain unpaid or the Bank shall
have any Commitment under this Credit Agreement, the Borrowers agree that
they shall, at all times, with respect to (i) themselves, (ii) their
existing consolidated Subsidiaries, and (iii) any Subsidiaries that become
consolidated Subsidiaries after the date of this Agreement:
SECTION 7B.01. Minimum Tangible Net Worth. Maintain at all times a
Consolidated Tangible Net Worth of not less than $65,000,000, plus 50% of
their consolidated net income earned subsequent to December 31, 1993.
SECTION 7B.02. Leverage Ratio. Maintain at all times a ratio of
Consolidated Total Unsubordinated Liabilities to Consolidated Tangible Net
Worth of not greater than 1.50 to 1.00.
SECTION 7B.03. Interest Coverage. Maintain as of the end of each
calendar quarter a ratio of consolidated EBITDA for the four calendar
quarter period then ended, to Consolidated Interest Expense for such
period of not less than 2.00 to 1.00.
SECTION 7B.04. Consolidated Losses. Not incur consolidated net
losses in two (2) consecutive calendar quarters or in any fiscal year.
VIII. EVENTS OF DEFAULT
SECTION 8.01. Events of Default. In the case of the happening of
any of the following events ("Events of Default"):
(a) default shall occur (i) in the payment of the
principal or interest on any of the Notes or Loans when due or
(ii) in the payment of any fees or other amounts due hereunder
within five (5) days after such fees or other amounts become due
in accordance herewith;
(b) any representation or warranty herein or in any of the
Loan Documents, in any certificate or report furnished in
connection herewith or in any amendment to this Agreement, shall
prove to be false or misleading in any material respect when made
or given or deemed made or given;
(c) default shall be made in respect of any agreement or
obligation relating to any obligation of the Borrowers or their
Subsidiaries for borrowed money (other than the Notes), if the
effect of such default or the result of any action by the obligee
is to accelerate the maturity of such obligation or to permit the
holder or obligee thereof (or a trustee on behalf of such holder
or obligee) to cause such obligation to become due prior to the
stated maturity thereof or which, with the passage of time, the
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giving of notice or both would constitute an event of default
under any agreement, or any such obligation shall not be paid when
due after giving effect to any applicable grace period;
(d) default shall be made in the due observance or
performance of any covenant, condition or agreement to be
performed pursuant to Article VI of this Agreement;
(e) default shall be made in the due observance or
performance of any covenant, condition or agreement to be
performed pursuant to this Agreement other than as described in
(d) above which shall continue unremedied for more than ten (10)
days;
(f) (i) default shall be made in the due observance or
performance of any covenant, condition or agreement of the
Borrowers to be performed pursuant to the Loan Documents (other
than this Agreement) and not cured within any applicable grace
period or (ii) any of the Loan Documents (other than this
Agreement), shall cease to be in full force and effect or shall be
declared to be null and void, or the validity or enforceability
thereof shall be contested or any party thereto shall deny that it
has any further liability to the Bank with respect thereto;
(g) the Borrowers or any of their Subsidiaries shall (i)
voluntarily commence any case, proceeding or other action or file
any petition seeking relief under Title 11 of the United States
Code or any other existing or future Federal domestic or foreign
bankruptcy, insolvency or similar law, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate
manner, any such proceeding or the filing of any such petition,
(iii) apply for or consent to the employment of a receiver,
trustee, custodian, sequestrator or similar official for the
Borrowers or any of their Subsidiaries or for a substantial part
of their property, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors, (vi)
become unable, admit in writing its inability or fail generally to
pay its debts as they become due or (vii) take corporate action
for the purpose of effecting any of the foregoing;
(h) an involuntary case, proceeding or other action shall
be commenced or an involuntary petition shall be filed in a court
of competent jurisdiction seeking (i) relief in respect of the
Borrower or any of its Subsidiaries or of a substantial part of
its property, under Title 11 of the United States Code or any
other existing or future Federal, domestic or foreign bankruptcy,
insolvency or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator or similar official for the
Borrowers or any Subsidiary or for a substantial part of their
property, or (iii) the winding-up or liquidation of the Borrowers
or any Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall continue unstayed and in
effect for 60 days;
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(i) there shall be commenced against the Borrowers or any
of their Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which
shall not have been vacated, discharged or stayed or bonded
pending appeal within sixty (60) days from the entry thereof;
(j) one or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance) of
$500,000 or more and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within
60 days from the entry thereof and have not been reserved for on
Borrower's financial statements and which are not actually being
contested in good faith in appropriate proceeding;
(k) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975
of the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan, or any lien shall
arise on the assets of the Borrower or any Commonly Controlled
Entity in favor of the PBGC or a Plan (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have
a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of
a trustee is, in the reasonable opinion of the Bank, likely to
result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes
of Title IV of ERISA, (v) the Company or any Commonly Controlled
Entity shall, or in the reasonable opinion of the Bank is likely
to, incur any liability in connection with a withdrawal from, or
the Insolvency or Reorganization of, a Multiemployer Plan or (vi)
any other event or condition shall occur or exist, with respect to
a Plan; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or
conditions, if any, could subject the Borrower or any of its
Subsidiaries to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operation,
property or financial or other condition of the Borrower or any of
its Subsidiaries and its Subsidiaries taken as a whole;
(1) Raymond shall at any time and for any reason cease to
own beneficially 100% of the outstanding capital stock of Raymond
Leasing;
then, at any time thereafter during the continuance of any such event, the
Bank may, by written notice to the Borrowers (i) terminate the Commitment,
Revolving Credit Loans and the Term Loan(s) and, (ii) declare the Notes to
be forthwith due and payable, both as to principal and interest, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived, anything contained herein or in the Notes to the
contrary notwithstanding, provided, however, that if an event specified in
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Section 8.01(g) or (h) hereof shall have occurred, the Conmmitment,
Revolving Credit Loans and Term Loan(s) shall automatically terminate and
the Notes shall immediately become due and payable, and the Bank in each
instance shall have the right to exercise its rights under the Loan
Documents as permitted by law.
IX. MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications provided for hereunder shall be in writing and shall be
deemed to have been duly given or made when delivered by hand or facsimile
at the address set forth below, or if sent by certified mail, three days
after the day on which mailed, or, in the case of telex, when answerback
received, or, in the case of an overnight courier service, one business
day after delivery to such courier service, addressed as set forth below,
or to such other address as may be hereafter notified by the respective
parties hereto:
(a) if to Chemical Bank, at
Chemical Bank
1975 Lake Street
Elmira, N.Y. 14901
Attention: Christine M. McLeod, VP
Fax #: 607-734-7645
(b) if to the Borrowers, at
Mr. William B. Lynn, Executive Vice President
The Raymond Corporation
Mr. Patrick J. McManus, President
Raymond Leasing Corporation
Corporate Headquarters
Greene, NY 13778
Fax #: 607-656-9942
(c) as to each such party at such other address as such
party shall have designated to the other in a
written notice complying as to delivery with the
provisions of this Section 9.01.
SECTION 9.02. Survival of Agreement; Successors and Assigns. (a)
All covenants, agreements, representations and warranties made herein and
in the certificates delivered pursuant hereto shall survive the making by
the Bank of the Loans herein contemplated and the execution and delivery
to the Bank of the Notes evidencing such Loans and shall continue in full
force and effect so long as the Notes are outstanding and unpaid or the
Commitment is outstanding.
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(b) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include (i) the successors
and assigns of such party; (ii) all covenants, promises and agreements by
or on behalf of the Borrower which are contained in this Agreement shall
bind and inure to the benefit of the respective successors and assigns of
the Bank and (iii) no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with this Agreement or any of the other Loan Documents. The
Bank shall not have any obligation to any Person not a party to this
Agreement or other Loan Documents.
SECTION 9.03. Expenses of the Bank; Indemnification.
(a) The Borrowers will pay all reasonable out-of-pocket costs and
expenses incurred by the Bank in connection with the preparation,
development and execution of the Loan Documents and any amendment,
supplement or modification to this Agreement, the Notes and the other Loan
Documents including, without limitation, the fees and disbursements of
counsel to the Bank (including, without limitation, allocation of the cost
of in-house counsel to the Bank whether or not the transactions hereby
contemplated shall be consummated), the making of the Loans hereunder, the
costs and expenses incurred in connection with the enforcement or
preservation of any rights of the Bank under this Agreement, the Notes and
the other Loan Documents or in connection with the Loans, including,
without limitation, fees and disbursements of counsel to the Bank
(including, without limitation, allocation of the cost of in-house counsel
to the Bank).
(b) The Borrowers agree to indemnify the Bank and its respective
directors, officers, employees and agents against, and to hold the Bank
and each such person harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees and
expenses, incurred by or asserted against the Bank or any such person
arising out of, in any way connected with, or as a result of (i) the use
of any of the proceeds of the Loans, (ii) this Agreement or other Loan
Documents, (iii) the performance by the parties hereto and thereto of
their respective obligations hereunder and thereunder (including but not
limited to the making of the Commitment) and consummation of the
transactions contemplated hereby and thereby, (iv) breach of any
representation or warranty or (v) any claim, litigation, investigation or
proceedings relating to any of the foregoing, whether or not the Bank or
any such person is a party thereto; provided, however, that such indemnity
shall not, as to the Bank, apply to any such losses, claims, damages,
liabilities or related expenses to the extent that they result from the
gross negligence or willful misconduct of the Bank.
(c) The Borrowers agree to indemnify, defend and hold harmless the
Bank and its respective officers, directors, shareholder, agents and
employees (collectively, the "Indemnities") from and against any loss,
cost, damage, liability, lien, deficiency, fine, penalty or expense
(including, without limitation, reasonable attorney's fees and reasonable
expenses for investigation, removal, cleanup and remedial costs and
modification costs incurred to permit, continue or resume nominal
operations of any property or assets or business of the firm) arising from
a violation of, or failure to comply with any Environmental Laws and to
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remove any lien arising therefrom except to the extent caused by the gross
negligence or willful misconduct of any Indemnitee, which any of the
Indemnities may incur of which may be claimed or recorded against any of
the Indemnities by any Person.
(d) The provisions of this Section 9.03 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any
term or provision of this Agreement or any of the Loan Documents, or any
investigation made by or on behalf of the Bank. All amounts due under this
Section 8.03 shall be payable on written demand therefor.
SECTION 9.04. Applicable Law. This Agreement, the Notes and the
other Loan Documents (other than those containing a contrary express choice
of law) shall be governed and construed by and interpreted in accordance
with the laws of the State of New York.
SECTION 9.05. Waiver of Rights by the Bank; Waiver of Jury Trial,
etc. (a) Neither any failure nor any delay on the part of the Bank in
exercising any right, power or privilege hereunder or under the Loan
Documents shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise of any other right,
power or privilege. Except as prohibited by law, each party hereto hereby
waives any right it may have to claim or recover in any litigation referred
to in this Section any special, exemplary, punitive or consequential
damages or any damages other than, or in addition to, actual damages. Each
party hereto (i) certifies that neither any representative, agent or
attorney of the Bank has represented, expressly or otherwise, that the Bank
would not, in the event of litigation, seek to enforce the foregoing
waivers and (ii) acknowledges that it has been induced to enter into this
Agreement or the Loan Documents, as applicable, by, among other things, the
mutual waivers and certifications herein.
(b) THE BORROWERS AND THE BANK HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM
IN RESPECT OF ANY ISSUE, CLAIM OR ACTION IN ANY WAY, INVOLVING OR ARISING,
DIRECTLY OR INDIRECTLY, OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
SECTION 9.06. Acknowledgments. The Borrowers hereby acknowledge
that:
(a) each has been advised by counsel in the negotiation,
execution and delivery of this Agreement, the Notes and the other
Loan Documents;
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(b) the Bank does not have any fiduciary relationship
with the Borrower and the relationship between the Bank, on one
hand, and the Borrower, on the other hand, is solely that of
debtor and creditor; and
(c) no joint venture exists between the Borrower and the
Bank.
SECTION 9.07. Consent to Jurisdiction. (a) The Borrowers hereby
irrevocably submit to the non-exclusive jurisdiction of any United States
federal or New York state court sitting in New York City in any action or
proceedings arising out of or relating to any Loan Documents and the
Borrowers hereby irrevocably agree that all claims in respect of such
action or proceeding may be heard and determined in any such court and
irrevocably waives any objection it may now or hereafter have as to the
venue of any such action or proceeding brought in such a court or the
fact that such court is an inconvenient forum.
(b) The Borrowers irrevocably and unconditionally consent to the
service or process in any such action or proceeding in any of the
aforesaid courts by the mailing of copies of such process to it by
certified or registered mail at its address specified in Subsection 9.01
SECTION 9.08. Extension of Maturity. Except as otherwise
expressly provided herein, whenever a payment to be made hereunder shall
fall due and payable on any day other than a Business Day, such payment
may be made on the next succeeding Business Day, and such extension of
time shall be included in computing interest.
SECTION 9.09. Modification of Agreement. No modification,
amendment or waiver of any provision of this Agreement or the Notes, nor
consent to any departure by the Borrowers or any of their Subsidiaries
therefrom shall in any event be effective unless the same shall be in
writing and signed by the Bank and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which
given. No notice to or demand on the Borrowers or any of their
Subsidiaries in any case shall entitle the Borrowers or any of their
Subsidiaries, as the case may be, to any other or further notice or
demand in the same, similar or other circumstance.
SECTION 9. 10. Participations and Assignments. (a) Neither
Borrower may assign or transfer any of its interests under this
Agreement, the Notes or the Loan Documents.
(b) The Bank reserves the right to grant participations in or to
sell and assign its rights, duties or obligations with respect to the
Loans or the Commitment to such banks, lending institutions or other
parties as it may choose, including, without limitation, any Federal
Reserve Bank in accordance with applicable law and without the consent of
the Borrower, which consent is deemed to be granted.
SECTION 9. 1 1. Reinstatement; Certain Payments. If claim is ever
made upon the Bank for repayment or recovery of any amount or amounts
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received by the Bank in payment or on account of any of the obligations
under this Agreement, the Bank shall give prompt notice of such claim to
the Borrower, and if the Bank repays all or part of said amount by reason
of (i) any judgment, decree or order of any court or administrative body
having jurisdiction over the Bank or any of its property, or (ii) any
settlement or compromise of any such claim effected by the Bank with any
such claimant, then and in such event such Borrower agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon
such Borrower notwithstanding the cancellation of the Notes or other
instrument evidencing the obligations under this Agreement or the
termination of this Agreement, and such Borrower shall be and remain
liable to the Bank hereunder for the amount so repaid or recovered to the
same extent as if such amount had never originally been received by the
Bank.
SECTION 9.12. Right of Setoff. In addition to any rights and
remedies of the Bank provided by law, the Bank is hereby authorized at any
time and from time to time, without prior notice to the Borrowers (any such
notice being expressly waived by the Borrowers) to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Bank to or for the credit or the
account of the Borrowers against any of and all the obligations of the
Borrowers now and hereafter existing under this Agreement and the Note held
by the Bank, irrespective of whether or not the Bank shall have made any
demand under this Agreement or the Note and although such obligations may
be in any currency, direct or indirect, absolute or contingent, matured or
unmatured. The Bank agrees to promptly notify the Borrowers after any such
setoff and application made by the Bank, but the failure to give such
notice shall not affect the validity of such setoff and application. The
rights of the Bank under this Section are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which the
Bank may have.
SECTION 9.13. Severability. In case any one or more of the
provisions contained in this Agreement or in the Notes should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby.
SECTION 9.14. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but all
of which, when taken together, shall constitute but one instrument.
SECTION 9.15. Entire Agreement; Cumulative Remedies.
(a) This Agreement and the other Loan Documents constitute the
entire agreement among the parties hereto and thereto as to the subject
matter hereof and thereof and supersede any previous agreement, oral or
written, as to such subject matter.
(b) The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
- 44 -
<PAGE>
SECTION 9.16. Headings. Section headings used herein are for
convenience of reference only and are not to affect the construction of or
be taken into consideration in interpreting this Agreement.
SECTION 9.17. Exhibits and Schedules. Exhibits A, A-1, B and C and
Schedules I through IV shall constitute an integral part of this Agreement.
IN WITNESS WHEREOF, the Borrowers and the Bank have caused this
Agreement to be duly executed by their duly authorized officers, all of the
day and year first above written.
RAYMOND LEASING CORPORATION
By: /s/ Patrick J. Mc Manus
---------------------------
Title: President
THE RAYMOND CORPORATION
By: /s/ William B. Lynn
---------------------------
Title: Executive Vice President
CHEMICAL BANK
By: /s/ Christine M. McLeod
---------------------------
Vice President
- 45 -
<PAGE>
SCHEDULE I
Notice of Borrowing (or Conversions)
------------------------------------
To: Chemical Bank Dated: December , 1994
Reference is made to the Revolving Credit and Term Loan Agreement
dated December 21, 1994 (the "Agreement") between CHEMICAL BANK (the
"Bank") and THE RAYMOND CORPORATION AND RAYMOND LEASING CORPORATION.
Unless otherwise defined herein, the terms defined in the Agreement are
used herein as so defined.
The undersigned, an authorized officer of _____________________
(the "Borrower") hereby requests that a Loan be made to Borrower and
certifies in accordance with the provisions of Section 2.01 or 2.04 of the
Agreement as follows:
1. The requested date for the funding of such Loan is $___________
The amount of the proposed Loan is $___________ and the outstanding
balances of all Loans, after giving effect to the proposed Loan, will be
as follows, which sums are and will be owed to the Bank without any
offsets or defenses whatsoever:
A. Loans under Section 2.01 made by Bank:
Borrower Balance
-------- -------
The Raymond Corporation $---------
Raymond Leasing Corporation $---------
Total $---------
B. Loans made under Section 2.04 made by Bank:
Borrower Balance
-------- -------
The Raymond Corporation $---------
Raymond Leasing Corporation $---------
Total $---------
2. The Borrower hereby elects in accordance with Section 2.03,
2.07, 2.08 or 2.10 of the Agreement, that _____________________ of the Loan
being requested shall be a ______________ Rate Loan.
<PAGE>
3. The amount requested should be credited to checking account
number __________ which is currently maintained with your Bank. (Not to be
completed in cases of conversion. Instead, conversions should read, "The
amount requested to be converted is $_______.)
4. No Default or Event of Default has occurred or would result from
such Loan.
5 . No material adverse change has occurred in the condition of the
Borrower which would substantially impair the Borrower's ability to carry
on its business.
6. The representations and warranties contained in Article III of
the Agreement are true and correct on and as of the date of this
Certificate, and will be true and correct on and as of the date of the
requested Loan, as though made on and as of such dates. With respect to
Section 3.03, all additional borrowings and repayments under existing
credit arrangements have been adequately reflected in Borrower's financial
statements. With respect to Section 3.12, there have been no material
developments which increase Borrower's environmental exposure.
THE RAYMOND CORPORATION
or RAYMOND LEASING
CORPORATION, as appropriate
By:_____________________________
Title:
<PAGE>
Schedule II
-----------
SUBSIDIARIES OF THE RAYMOND CORPORATION (a)
-------------------------------------------
<TABLE>
<CAPTION>
Percentage of State or Other
Voting Securities Jurisdiction in
Owned Which Organized
----------------------------------------------
<S> <C> <C>
Dockstocker Corporation 100(b) New York
(Subsidiary of Raymond Sales Corporation)
Heubel Material Handling, Inc. 94(c) Missouri
(Subsidiary of Raymond Sales Corporation)
The Raymond Export Corporation 100(b) U.S. Virgin Islands
Raymond Handling Concepts Corporation 74(c) California
(Subsidiary of Raymond Sales Corporation)
R.H.E. Ltd. 100(b) Canada
Raymond Industrial Equipment, Limited 100(b) Canada
(Subsidiary of R.H.E. Ltd.)
Raymond Leasing Corporation 100(b) Delaware
Raymond Production Systems Corporation 100(b) California
Raymond Rental Corporation 100(b) New York
(Subsidiary of Raymond Leasing Corporation)
Raymond Sales Corporation 100(b) New York
Raymond Transportation Corporation 100(b) New York
Welch Equipment Company, Inc. 100(c) Colorado
Welch Equipment Company, Inc. (Utah) 100(c) Utah
</TABLE>
(a) Unless otherwise noted, the Registrant is the Parent of the
above listed company.
(b) Included in consolidated financial statements.
(c) Included in consolidated financial statements on an equity
basis.
<PAGE>
SCHEDULE III
No Default Certificate
----------------------
To: Chemical Bank
Re: Revolving Credit and Term Loan Agreement with The Raymond Corporation and
Raymond Leasing Corporation.
Pursuant to the provisions of the Revolving Credit and Term Loan Agreement
dated December 21, 1994 between Chemical Bank and The Raymond Corporation and
Raymond Leasing Corporation, the undersigned, hereby certifies as the Chief
Financial Officer of The Raymond Corporation and Raymond Leasing Corporation as
follows:
1 . No Event of Default specified in Section 8 of the Revolving Credit and
Term Loan Agreement referred to above (the "Agreement") and no event which,
pursuant to the provisions of Section 8 of the Agreement would, with a lapse of
time and/or notice specified therein, become such an Event of Default, has
occurred or is continuing;
2. No material adverse change has occurred in the financial condition of
either The Raymond Corporation or Raymond Leasing Corporation which would
impair the ability of either Corporation to carry on its business; and
3. The representations and warranties contained in Section 3 of the
Agreement continue to be true and correct.
THE RAYMOND CORPORATION
By: /s/ William B. Lynn
--------------------------------
Title: Executive Vice President
<PAGE>
SCHEDULE III
No Default Certificate
----------------------
To: Chemical Bank
Re: Revolving Credit and Term Loan Agreement with The Raymond Corporation and
Raymond Leasing Corporation.
Pursuant to the provisions of the Revolving Credit and Term Loan Agreement
dated December 21, 1994 between Chemical Bank and The Raymond Corporation and
Raymond Leasing Corporation, the undersigned, hereby certifies as the Chief
Financial Officer of The Raymond Corporation and Raymond Leasing Corporation as
follows:
1 . No Event of Default specified in Section 8 of the Revolving Credit and
Term Loan Agreement referred to above (the "Agreement") and no event which,
pursuant to the provisions of Section 8 of the Agreement would, with a lapse of
time and/or notice specified therein, become such an Event of Default, has
occurred or is continuing;
2. No material adverse change has occurred in the financial condition of
either The Raymond Corporation or Raymond Leasing Corporation which would
impair the ability of either Corporation to carry on its business; and
3. The representations and warranties contained in Section 3 of the
Agreement continue to be true and correct.
RAYMOND LEASING CORPORATION
By: /s/ Patrick J. McManus
------------------------------------
Title: President
<PAGE>
SCHEDULE IV
List of Liens of Raymond
------------------------
None
List of Liens of Raymond Leasing
--------------------------------
None
<PAGE>
REVOLVING CREDIT NOTE
$15,000,000 New York, New York
December 20, 1994
FOR VALUE RECEIVED, the undersigned, THE RAYMOND CORPORATION, a New
York corporation (the "Borrower"), DOES HEREBY PROMISE to pay to the order
of CHEMICAL BANK (the "Bank"), at the office of the Bank at 1975 Lake
Street, Elmira, New York 14901 on the Termination Date as defined in the
Revolving Credit and Term Loan Agreement (the "Agreement") dated as of
December 21, 1994 among the Borrower, Raymond Leasing Corporation and the
Bank, in lawful money of the United States of America, in immediately
available funds, the principal amount of Fifteen Million Dollars
($15,000,000) or, if less than such principal amount, the aggregate unpaid
principal amount of all Revolving Credit Loans (as defined in Section 2.01
of the Agreement) made by the Bank to the Borrower pursuant to the
Agreement as shown on the grid schedules annexed hereto, and to pay
interest from the date hereof on the unpaid principal amount hereof, in
like money, at said office, on the dates and at the rates selected in
accordance with Article II of the Agreement and, upon default, on demand
from time to time, on any overdue principal and on any overdue charge or
fee, and, to the extent permitted by law, on any overdue interest, for
each day from the due date thereof (by acceleration or otherwise) until
such sum is paid in full, at the rate in effect from time to time as
described in the Agreement.
The obligations of the Borrower in regard to payment of the Loans
hereunder are several not joint with the Raymond Leasing Corporation, it
being expressly agreed and understood that Borrower shall be liable to the
Bank for only the Loans and interest accruing thereon made to such
Borrower. Notwithstanding the foregoing, each Borrower shall be jointly
and severally liable for any commitment or facility fees, increased costs,
indemnities and expenses under the Agreement and for the performance of
the terms and conditions of this Agreement. Loans incurred by Raymond
Leasing under the Agreement shall reduce amounts available under the
Agreement and this Note for borrowings by Raymond.
This Revolving Credit Note is the Revolving Credit Note referred to
in Section 2.02 of the Agreement, and is subject to prepayment and
acceleration of maturity as set forth in the Agreement. All terms defined
in the Agreement are used herein with their defined meanings unless
otherwise provided.
All Revolving Credit Loans made by the Bank to the Borrower under
the Agreement and the applicable rates and Interest Periods (as defined in
the Agreement) together with all payments or prepayments of principal
shall be recorded by the Bank and endorsed on the grid schedule or grid
schedules attached hereto and hereby made a part of this Revolving Credit
Note.
This Note shall be governed by and construed in accordance
with the laws of the State of New York and any applicable laws of the United
States of America.
THE RAYMOND CORPORATION
By:_________________________
Title:
<PAGE>
REVOLVING CREDIT NOTE
$15,000,000 New York, New York
December 20, 1994
FOR VALUE RECEIVED, the undersigned, RAYMOND LEASING CORPORATION,
a Delaware corporation (the "Borrower"), DOES HEREBY PROMISE to pay to
the order of CHEMICAL BANK (the "Bank"), at the office of the Bank at
1975 Lake Street, Elmira, New York 14901 on the Termination Date as
defined in the Revolving Credit and Term Loan Agreement (the "Agreement")
dated as of December 21. 1994 among the Borrower, The Raymond Corporation
and the Bank, in lawful money of the United States of America, in
immediately available funds, the principal amount of Fifteen Million
Dollars ($15,000,000) or, if less than such principal amount, the
aggregate unpaid principal amount of all Revolving Credit Loans (as
defined in Section 2.01 of the Agreement) made by the Bank to the
Borrower pursuant to the Agreement as shown on the grid schedules annexed
hereto, and to pay interest from the date hereof on the unpaid principal
amount hereof, in like money, at said office, on the dates and at the
rates selected in accordance with Article II of the Agreement and, upon
default, on demand from time to time, on any overdue principal and on any
overdue charge or fee, and, to the extent permitted by law, on any
overdue interest, for each day from the due date thereof (by acceleration
or otherwise) until such sum is paid in full, at the rate in effect from
time to time as described in the Agreement.
The obligations of the Borrowers in regard to payment of the Loans
hereunder are several not joint with The Raymond Corporation, it being
expressly agreed and understood that each Borrower shall be liable to the
Bank for only the Loans and interest accruing thereon made to such
Borrower. Notwithstanding the foregoing, each Borrower shall be jointly
and severally liable for any commitment or facility fees, increased
costs. indemnities and expenses under the Agreement and for the
performance of the terms and conditions of this Agreement. Loans incurred
by The Raymond Corporation under the Agreement shall reduce amounts
available under the Agreement and this Note for borrowings by Raymond
Leasing.
This Revolving Credit Note is the Revolving Credit Note referred
to in Section 2.02 of the Agreement, and is subject to prepayment and
acceleration of maturity as set forth in the Agreement. All terms defined
in the Agreement are used herein with their defined meanings unless
otherwise provided.
All Revolving Credit Loans made by the Bank to the Borrower under
the Agreement and the applicable rates and Interest Periods (as defined
in the Agreement) together with all payments or prepayments of principal
shall be recorded by the Bank and endorsed on the grid schedule or grid
schedules attached hereto and hereby made a part of this Revolving Credit
Note.
This Note shall be governed by and construed in accordance
with the laws of the State of New York and any applicable laws of the United
States of America.
RAYMOND LEASING CORPORATION
By:___________________________
Title:
<PAGE>
EXHIBIT B
TERM NOTE
$ New York, New York
___________, 19__
FOR VALUE RECEIVED, the undersigned,____________________________, a
___________ corporation (the "Borrower"), DOES HEREBY PROMISE to pay to
the order of CHEMICAL BANK (the "Bank"), at the office of the Bank at 1975
Lake Street, Elmira, New York 14901 in lawful money of the United States
of America, in immediately available funds, the principal amount of
_____________ ($_____) in _____ equal consecutive quarterly calendar
installments payable on the last day of each calendar quarter commencing
on _______________ and on the dates described in the Revolving Credit and
Term Loan Agreement ("Agreement") dated as of December 21, 1994 between
the Borrower and the Bank, and to pay interest from the date hereof on the
unpaid principal amount hereof, in like money, at said office, on the
dates and at the rates selected in accordance with Article II of the
Agreement and, upon default, on demand from time to time, on any overdue
principal and on any overdue charge or fee, and, to the extent permitted
by law, on any overdue interest, for each day from the due date thereof
(by acceleration or otherwise) until such sum is paid in full, at the rate
in effect from time to time as described in the Agreement.
This Term Note is the Term Note referred to in Section 2.05 of the
Agreement, and is subject to prepayment and acceleration of maturity as
set forth in the Agreement. All terms defined in the Agreement are used
herein with their defined meanings unless otherwise provided.
The Term Loan made by the Bank to the Borrower under the Agreement
and the applicable rates and Interest Periods (as defined in the
Agreement) together with all payments or prepayments of principal shall be
recorded by the Bank and endorsed on the grid schedule or grid schedules
attached hereto and hereby made a part of this Term Note.
This Note shall be governed by and construed in accordance with the
laws of the State of New York and any applicable laws of the United States
of America.
[BORROWER]
By:____________________________
Title:
<PAGE>
GRID SCHEDULE
-------------
DATE TYPE INTEREST AMOUNT MATURITY
---- ---- -------- ------ --------
<PAGE>
Exhibit 10.6
==============================================================================
$15,000,000
REVOLVING CREDIT AND TERM LOAN AGREEMENT
Dated as of
February 14, 1995
among
THE RAYMOND CORPORATION
AND
RAYMOND LEASING CORPORATION
AND
THE CHASE MANHATTAN BANK, N.A.
===============================================================================
<PAGE>
TABLE OF CONTENTS
I. DEFINITIONS.......................................................... 6
SECTION 1.01. Definitions............................................ 6
SECTION 1.02. Accounting Terms/Other Definitional Provisions......... 15
II. LOANS................................................................ 15
SECTION 2.01. Revolving Credit Loans................................ 15
SECTION 2.02. Revolving Credit Note................................. 16
SECTION 2.03. Interest on Revolving Credit Loans.................... 17
SECTION 2.04. Term Loan............................................. 17
SECTION 2.05. Term Note: Grid Schedules............................. 17
SECTION 2.06. Interest on the Term Loan............................. 18
SECTION 2.07......................................................... 18
SECTION 2.08. Interest on Prime Rate Loans.......................... 18
SECTION 2.09. Interest on Treasury Rate Loans....................... 18
SECTION 2.10. Interest on Eurodollar Rate Loans..................... 18
SECTION 2.11. Continuation and Conversion of Loans.................. 18
SECTION 2.12. Prepayment of Loans................................... 19
SECTION 2.13. Reduction or Termination of the Commitment............ 20
SECTION 2.14. Fees.................................................. 20
SECTION 2.15. Default Rate of Interest: Late Payment Penalty........ 20
SECTION 2.16. Application of Payments and Computations.............. 26
SECTION 2.17. Funds: Manner of Payment.............................. 20
SECTION 2.18. Capital Adequacy...................................... 21
SECTION 2.19. Inability to Determine Rate........................... 21
SECTION 2.20. Other Events.......................................... 22
SECTION 2.21. Change in Legality.................................... 23
III. REPRESENTATIONS AND WARRANTIES....................................... 24
SECTION 3.01. Organization, Corporate Powers, etc................... 24
SECTION 3.02. Corporate and Governmental Authorization;
No Contravention. ................................... 24
SECTION 3.03. Financial Condition................................... 24
SECTION 3.04. Taxes................................................. 25
SECTION 3.05. Title to Properties................................... 25
SECTION 3.06. Litigation............................................ 25
SECTION 3.07. Agreements............................................ 26
SECTION 3.08. ERISA................................................. 26
SECTION 3.09. Proceeds of the Loan.................................. 26
SECTION 3.10. Federal Reserve Regulations........................... 26
SECTION 3.11. Subsidiaries.......................................... 27
SECTION 3.12. Environmental Matters................................. 27
SECTION 3.13. Not an Investment Company............................. 28
-2-
<PAGE>
SECTION 3.14. Material Change....................................... 28
SECTION 3.15. Governmental Approval ................................ 28
SECTION 3.16. Full Disclosure....................................... 28
SECTION 3.17. Binding Effect........................................ 28
SECTION 3.18. Trademarks and Licenses, etc.......................... 28
IV. CONDITIONS OF LENDING................................................ 29
SECTION 4.01. Representations and Warranties: No Default............ 29
SECTION 4.02. Opinion of Counsel.................................... 29
SECTION 4.03. No Default Certificate; Deemed Representation......... 29
SECTION 4.04. Supporting Documents.................................. 29
SECTION 4.05. Other Information, Documentation...................... 29
V. AFFIRMATIVE COVENANTS................................................ 30
SECTION 5.01. Corporate Existence, Properties. Insurance, etc... 30
SECTION 5.02. Payment of Indebtedness, Taxes, etc................... 30
SECTION 5.03. Reporting Requirements................................ 30
SECTION 5.04. Access to Premises and Records........................ 32
SECTION 5.05. Notice of Adverse Change.............................. 32
SECTION 5.06. Notice of Default................................... 32
SECTION 5.07. ERISA................................................. 32
SECTION 5.08. Compliance with Contractual Obligations and
Requirements of Law; Applicable Laws................. 33
SECTION 5.09. Subsidiaries.......................................... 33
SECTION 5.10. Environmental Laws.................................... 33
SECTION 5.11. Support Services Agreement............................ 34
SECTION 5.12. Voting of Subsidiaries'Shares......................... 34
VI. NEGATIVE COVENANTS................................................... 34
SECTION 6.01. Liens................................................. 34
SECTION 6.02. Guarantees, Etc....................................... 35
SECTION 6.03. Sale of Notes......................................... 35
SECTION 6.04. Investments........................................... 35
SECTION 6.05. Change in Business.................................... 36
SECTION 6.06. Dividends............................................. 36
SECTION 6.07. Subordinated Debt..................................... 37
SECTION 6.08. Accounting Policies and Procedures.................... 37
SECTION 6.09. Stock of Subsidiaries, Etc............................ 37
SECTION 6.10. Transactions with Affiliates.......................... 37
SECTION 6.11. Merger or Consolidation or Sales of Assets............ 37
SECTION 6.12. Restrictions on Leases of Equipment .................. 38
SECTION 6.13. The Raymond Corporation Subsidiaries.................. 38
VII. FINANCIAL COVENANTS - THE RAYMOND CORPORATION........................ 38
SECTION 7.01. Minimum Working Capital................................ 38
- 3 -
<PAGE>
SECTION 7.02. Minimum Tangible Net Worth............................ 38
SECTION 7.03. Leverage Ratio........................................ 38
SECTION 7.04. Interest Coverage..................................... 38
SECTION 7.05. Loss Quarters......................................... 38
VII-A. FINANCIAL COVENANTS - RAYMOND LEASING................................ 38
SECTION 7A.01. Minimum Tangible Net Worth............................ 39
SECTION 7A.02. Leverage Ratio........................................ 39
SECTION 7A.03. Interest Coverage..................................... 39
SECTION 7A.04. Loss Quarter.......................................... 39
SECTION 7A.05. Working Capital....................................... 39
VII-B FINANCIAL COVENANTS - CONSOLIDATED................................... 39
SECTION 7B.01. Minimum Tangible Net Worth............................ 39
SECTION 7B.02. Leverage Ratio........................................ 39
SECTION 7B.03. Interest Coverage..................................... 39
SECTION 7B.04. Consolidated Losses................................... 39
VIII. EVENTS OF DEFAULT.................................................... 39
SECTION 8.01. Events of Default..................................... 39
IX. MISCELLANEOUS........................................................ 42
SECTION 9.01. Notices............................................... 42
SECTION 9.02. Survival of Agreement; Successors and Assigns......... 43
SECTION 9.03. Expenses of the Bank; Indemnification................. 43
SECTION 9.04. Applicable Law........................................ 44
SECTION 9.05. Waiver of Rights by the Bank; Waiver of
July Trial, etc..................................... 44
SECTION 9.06. Acknowledgements...................................... 45
SECTION 9.07. Consent to Jurisdiction............................... 45
SECTION 9.08. Extension of Maturity................................. 45
SECTION 9.09. Modification of Agreement............................. 46
SECTION 9.10. Participations and Assignments........................ 46
SECTION 9.11. Reinstatement; Certain Payments....................... 46
SECTION 9.12. Right of Setoff....................................... 46
SECTION 9.13. Severability.......................................... 47
SECTION 9.14. Counterparts.......................................... 47
SECTION 9.15. Entire Agreement; Cumulative Remedies................. 47
SECTION 9.16. Headings.............................................. 47
SECTION 9.17. Exhibits and Schedules................................ 47
SCHEDULE I................................................................... 49
Notice of Borrowing (or Conversions)................................. 49
-4-
<PAGE>
SCHEDULE II.................................................................. 51
List of Subsidiaries of Raymond..................................... 51
List of Affiliates of Raymond....................................... 51
List of Subsidiaries of Raymond Leasing............................. 51
List of Affiliates of Raymond Leasing............................... 51
SCHEDULE III................................................................. 52
No Default Certificate.............................................. 52
SCHEDULE IV.................................................................. 53
List of Liens of Raymond............................................ 53
List of Liens of Raymond Leasing.................................... 53
SCHEDULE V................................................................... 54
PERFORMANCE PRICING GRID............................................ 54
EXHIBIT A.................................................................... 56
REVOLVING CREDIT NOTE............................................... 56
EXHIBIT A-1.................................................................. 58
REVOLVING CREDIT NOTE............................................... 58
EXHIBIT B.................................................................... 60
TERM NOTE........................................................... 60
-5-
<PAGE>
REVOLVING CREDIT AND TERM LOAN AGREEMENT
REVOLVING CREDIT AND TERM LOAN AGREEMENT dated as of February ,
1995 (the "Agreement') among THE RAYMOND CORPORATION, a New York corporation
("Raymond") and RAYMOND LEASING CORPORATION, a Delaware corporation ("Raymond
Leasing") (Raymond and Raymond Leasing individually the "Borrower" and
collectively the "Borrowers" as the case may be) and THE CHASE MANHATTAN
BANK, N.A., a national banking corporation (the "Bank").
WHEREAS, the Borrowers have requested the Bank to extend credit to
them severally on a revolving credit basis at any time and from time to time
prior to the Termination Date (as defined below) by making revolving credit
loans to the Borrowers not in excess of $15,000,000 in the aggregate at any
time outstanding and to have the option to from time to time up to and
including the Termination Date convert the outstandings under the revolving
credit loans to three, four or five year term loans; and
WHEREAS, the proceeds of the revolving credit and term loans shall be
used by the Borrowers for general corporate working capital purposes and to
fund growth in Raymond Leasing's lease portfolio; and
WHEREAS, the Bank is willing to extend such credit to the Borrowers,
subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing the parties hereto
agree to the following:
1. DEFINITIONS
SECTION 1.01. Definitions. As used herein, the terms defined in the
preamble shall have the same meaning when used in this Agreement and the
following words and terms shall have the following meanings:
"Adjusted Eurodollar Rate" shall mean, with respect to any Eurodollar
Rate Loan for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the product of (i)
the Eurodollar Rate in effect for such Interest Period and (ii) Eurodollar
Reserves. For the purposes hereof, "Eurodollar Rate" shall mean, for any
Interest Period, the rate (rounded upwards, if necessary to the next 1/16 of
1%) at which dollar deposits approximately equal to the principal amount of
the proposed Eurodollar Rate Loan and for a duration equal to the applicable
proposed Interest Period are offered by the London branch of the Bank in
immediately available funds in the Interbank Market for eurodollars at
approximately 11:00 a.m. London time, two Business Days prior to the
commencement of such Interest Period. For purposes hereof, the term
"Eurodollar Reserves" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the
number one minus the applicable statutory reserve requirements for the Bank
(without duplication, but including, without
-6-
<PAGE>
limitation, basic, supplemental, marginal or emergency reserves), from time to
time in effect under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor) with respect to eurocurrency funding
currently referred to as "Eurocurrency liabilities" in Regulation D. It is
agreed that for purposes hereof any amount bearing interest at the Eurodollar
Rate shall be deemed to constitute a "Eurocurrency liability" as defined in
Regulation D and to be subject to the reserve requirements of Regulation D,
without benefit of credit or proration, exemptions or offsets which might
otherwise be available to the Bank from time to time under Regulation D.
"Affiliate" shall mean any person which directly or indirectly
controls, or is controlled by, or is under common control with, a Borrower or
any of its Subsidiaries. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities,
by contract, or otherwise.
"Borrowing Date" shall mean, with respect to any Loan, the date on
which such Loan is disbursed to the Borrower.
"Business Day" shall mean any day not a Saturday, Sunday or legal
holiday, on which the Bank is open for business in New York City, provided,
however, that when used in connection with determining the Eurodollar Rate,
the term "Business Day" shall also exclude any day on which the Bank is not
open for dealings in dollar deposits in the Interbank Market.
"Capitalized Lease Obligation" shall mean an obligation to pay rent or
other amounts under any lease of (or other arrangement conveying the right to
use) real and/or personal property which obligation is required to be
classified and accounted for as a capital lease on a balance sheet prepared in
accordance with generally accepted accounting principles, and for purposes
hereof the amount of such obligation shall be the capitalized amount thereof
determined in accordance with such principles.
"Chief Financial Officer" shall mean the Chief Financial Officer of
such Borrower, as applicable.
"Closing Date" shall mean February l4, 1995 or such other date as the
parties may agree.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment" shall have the meaning assigned to such term in Section
2.01 hereof. The Commitment shall be deemed permanently terminated on the
Termination Date or such earlier date on which the Commitment shall have been
terminated in accordance herewith.
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"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with a Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes a Borrower and
which is treated as a single employer under Section 414 of the Code.
"Consolidated Adjusted Net Income" for any period shall mean the
consolidated gross revenues of the Borrower for such period less all expenses
and other proper charges (including taxes on income) and extraordinary items
of income, but excluding in any event (to the extent not previously deducted
as extraordinary items of income):
(a) any gains or losses on the sale or other disposition of
investments or fixed or capital assets, and any taxes on such excluded
gains and any tax deductions or credits on account of any such
excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any corporation, substantially
all the assets of which have been acquired in any manner by the
Borrower or a Subsidiary, realized by such corporation prior to the
date of such acquisition;
(d) net eamings and losses of any corporation, with which the
Borrower or a Subsidiary shall have consolidated or which shall have
merged into or with the Borrower or a Subsidiary, prior to the date of
such consolidation or merger;
(e) net earnings of any business entity in which the Borrower
or a Subsidiary has an ownership interest unless such net earnings
shall have actually been received by the Borrower in the form of cash
distributions;
(f) earnings resulting from any reappraisal, revaluation
or write-up of assets;
(g) any gain arising from the acquisition of any securities
of the Borrower; and
(h) any reversal of any contingency reserve, except to the
extent that provision for such contingency reserve shall have been
made from income arising during such period.
"Consolidated Current Assets" shall mean, at any date, the aggregate
amount of all assets of the Borrower and its Subsidiaries which would be
properly classified as current assets at such date, but excluding deferred
assets, all computed as per management statements prepared on a consistent
basis.
"Consolidated Current Liabilities" shall mean the aggregate amount of
all liabilities of the Borrower and its Subsidiaries (including tax and other
proper accruals) which would
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be classified as current liabilities, all computed as per management
statements prepared on a consistent basis.
"Consolidated Interest Expense" shall mean the interest expense of the
Borrower and its Subsidiaries during such period determined on a consolidated
basis in accordance with generally accepted accounting principles consistently
applied, and shall in any event include, without limitation, (i) the
amortization of debt discounts, (ii) the amortization of all fees payable in
connection with the incurrence of Indebtedness to the extent included in
interest expense, (iii) the portion of any Capitalized Lease Obligation
allocable to interest expense, (iv) all fixed or calculable dividend payments
on preferred stock, and (v) payments of interest expense in kind.
"Consolidated Net Income Available for Interest Charges" for any
period shall mean the sum of (i) Consolidated Adjusted Net Income during such
period, plus (to the extent deducted in determining adjusted net income), (ii)
all provisions for any federal, state or other income taxes made by the
Borrower during such period, and (iii) Interest Charges during such period.
"Consolidated Tangible Net Worth" shall mean for the Borrower and its
Subsidiaries, the excess of (i) the aggregate net book value of the assets
(other than patents, patent rights, trademarks, trade names, treasury stock,
franchises, copyrights, licenses, permits, goodwill and other intangible
assets classified as such in accordance with generally accepted accounting
principles and appearing on the balance sheet as of the Effective Date) after
all appropriate adjustments in accordance with generally accepted accounting
principles applied on a consistent basis (including, without limitation,
reserves for doubtful receivables, obsolescence, depreciation and amortization
and excluding the amount of any write-up or revaluation of any asset) over
(ii) Consolidated Total Liabilities, in each case computed and consolidated in
accordance with generally accepted accounting principles applied on a
consistent basis.
"Consolidated Total Unsubordinated Liabilities" shall mean all items
which, in accordance with generally accepted accounting principles applied on
a consistent basis, would properly be included on the liability side of the
balance sheet (other than Subordinated Debt, capital stock, capital surplus
and retained earnings), as of the date on which the amount of Consolidated
Total Unsubordinated Liabilities is to be determined, of the Borrower and its
Subsidiaries computed and consolidated in accordance with generally accepted
accounting principles applied on a consistent basis.
"Contractual Obligation" as to any Person, any provision of any
security issued by such Person or any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Conversion Request" has the meaning set forth in Section 2.04.
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"Default" shall mean any of the events specified in Article VIII
hereof, whether or not any requirement for the giving of notice or the lapse
of time or both or any other condition has been satisfied.
"EBIT" shall mean the Consolidated Net Income Available For Interest
Charges.
"EBITDA" shall mean the sum of Consolidated Net Income Available for
Interest Charges, plus depreciation and amortization.
"Environmental Laws" shall mean any and all Federal, State, local or
municipal laws, rules orders, regulations, statutes, ordinances, codes,
decrees or requirements of any Governmental Authority regulating, relating to
or imposing liability or standards of conduct concerning environmental
protection matters, including, without limitation, Hazardous Materials, as
now or may hereafter be in effect.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time. Section references to ERISA are to ERISA,
as in effect at the date of this Agreement and any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or a Subsidiary would be deemed to
be a member of the same "controlled group" within the meaning of Section
414(b), (c), (m) and (o) of the Code.
"Eurodollar Rate Loan" shall mean a Loan bearing interest in
accordance with Section 2.10 of this Agreement.
"Eurodollar Rate" and "Eurodollar Reserves" shall have the meaning
specified in the definition of "Adjusted Eurodollar Rate".
"Event of Default" shall mean any Event of Default set forth in
Article VIII.
"Executive Officer" shall mean either the Chairman, the President, the
Chief Financial Officer, the Secretary, any Vice-President, Treasurer of the
Borrower and their respective successors, if any, designated by the Board of
Directors.
"Expiration Date" shall mean the final payment date of any Term Loan,
whether as stated by its terms or by acceleration hereunder.
"Fixed Rate Loan" shall mean any Eurodollar Rate Loan or Treasury Rate
Loan.
"Funded Debt" shall mean, with respect to any Person, all Indebtedness
of such Person for money borrowed which by its terms matures more than one
year from the date as of which such Funded Debt is incurred, and any
Indebtedness of such Person maturing within one year from such date which is
renewable or extendable at the option of the
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obligor to a date beyond one year from such date (whether or not theretofore
renewed or extended), including any such indebtedness renewable or extendable
at the option of the obligor under, or payable from the proceeds of other
indebtedness which may be incurred pursuant to, the provisions of any
revolving credit agreement or other similar agreement plus the aggregate
amount of guaranties by that Person of all such liabilities of other Persons.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Hazardous Materials" includes, without limit, any flammable
explosives, radioactive materials, hazardous materials, hazardous wastes,
hazardous or toxic substances, defined in the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Hazardous Materials Transportation Act, as
amended (49 U.S.C. Sections 1801, et seq.), the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Sections 9601, et seq.), and in the
regulations adopted and publications promulgated pursuant thereto, or any
other laws.
"Indebtedness" shall include all obligations, contingent and
otherwise, which in accordance with generally accepted accounting principles
should be classified upon the obligor's balance sheet as liabilities, but in
any event including liabilities (whether or not they should be so classified
upon such balance sheet) secured by any lien existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed, and all guarantees.
"Insolvency" shall mean with respect to any Multiemployer Plan, the
condition that such plan is insolvent within the meaning of such term used in
Section 4245 of ERISA.
"Insolvent" shall mean the condition of Insolvency.
"Interbank Market" shall mean the London interbank market.
"Interest Charges" for any period shall mean all interest and all
amortization of debt discount and expense on all Indebtedness of the Borrower
and a Subsidiary.
"Interest Payment Date" shall mean (i) as to any Prime Rate Loan and
Treasury Rate Loan the last day of each calendar quarter during the term
thereof commencing with the calendar quarter immediately following the date
of such Loan, and (ii) as to any Eurodollar Rate Loan, the last day of each
Interest Period with respect thereto, and in the case of any Interest Period
greater than three months, at three-month intervals after the first day of
such Interest Period, and (iii) the Termination Date or Expiration Date, as
the case may be.
"Interest Period" means:
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(a) as to any Prime Rate Loan, the period commencing on the
date of such Loan and ending on the date on which the Borrower elects
to select a different interest rate pursuant to this Agreement, and
(b) as to any Eurodollar Rate Loan, the period commencing on
the date of such Loan and ending on the numerically corresponding day
(or if there is no numerically corresponding day, the last day) of the
calendar month that is one, two, three, six or twelve months,
thereafter, as the Borrower may elect;
provided, however, that (i) if any Interest Period would end on a day which
shall not be a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless, with respect to Eurodollar Rate Loans
only, such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the first preceding Business
Day and (ii) no Interest Period may be selected for any Eurodollar Rate Loan
which expires later than the Termination Date or the Expiration Date, as the
case may be and (iii) if any Interest Period for any Eurodollar Rate Loan that
is part of a Term Loan begins prior to any principal repayment date and would
otherwise end after such principal repayment date, the Interest Period for
that portion of the principal amount of such Eurodollar Rate Loan which is to
be repaid by the Borrower in accordance herewith shall terminate on such
principal repayment date, and the Interest Period for the remaining principal
of such Loan shall remain unaffected by such termination notwithstanding the
provisions of the preceding clause.
"Loan(s)" shall mean a loan by the Bank to the Borrower pursuant to
Article II hereof and shall refer to a Prime Rate Loan, Treasury Rate Loan or
Eurodollar Rate Loan, each of which shall be a "Type" of Loan.
"Loan Documents" shall mean collectively, the Agreement, the Notes,
any agreements or documents referred to in Article IV hereof and all other
documents, certificates and instruments executed in connection therewith.
"Margin" means for each such Type of Loan, the Margin determined
pursuant to the Pricing Grid.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole, (b) the
ability of the Borrower to perform its obligations under the Loan Documents,
or (c) the validity or enforceability of any of the Loan Documents or the
rights or remedies of the Bank hereunder or thereunder.
"Multiemployer Plan" shall mean a Plan which is a Multiemployer Plan
as defined in Section 4001(a)(3) of ERISA.
"Note(s)" shall mean the Revolving Credit Notes and the Term Notes.
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"Operating Agreement" shall mean the Operating Agreement dated October
10, 1986 between Raymond Leasing and Raymond, as may be amended from time to
time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title 1 of ERISA or any successor thereto.
"Person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership or government, or any agency
or political subdivision thereof.
"Plan" shall mean, at any particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pricing Grid" means the Performance Pricing Grid set forth in
Schedule V.
"Prime Rate" shall mean the rate of interest per annum announced from
time to time by the Bank as its prime rate in effect at its principal office
in New York City; each change in the Prime Rate shall be effective on the date
such change is announced.
"Prime Rate Loan" means a Loan bearing interest in accordance with
Section 2.08 of this Agreement.
"Raymond Working Capital" shall mean the total of Manufacturing Current
Assets, minus Manufacturing Current Liabilities as such terms are reflected on
Raymond's consolidated financial statements.
"Reportable Event" shall mean any of the events described in Section
4043(b) of ERISA other than those events as to which the twenty day notice
period is waived under Subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section 2615.
"Revolving Credit Loan" shall mean any Loan to the Borrower pursuant to
Section 2.01.
"Revolving Credit Note" shall mean the promissory note of the Borrower
delivered pursuant to Section 2.02.
"Senior Indebtedness" shall mean the Notes and all other Indebtedness
of the Borrower for money borrowed, whether outstanding on the date hereof or
hereafter created or incurred, which has not been approved by the Bank in
writing as being subordinate and junior to the loans, and which is permitted
hereby.
"Single Employer Plan" shall mean any plan which is not covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
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<PAGE>
"Short Term Indebtedness" shall mean Indebtedness for money borrowed
with a maturity of less than 365 days.
"Subordinated Debt or Indebtedness" shall mean all Indebtedness which
is subordinated in right of payment, in form and substance satisfactory to the
Bank, to all Indebtedness of the Borrower to the Bank, including the currently
outstanding Raymond 6.50% Convertible Subordinated Debentures of $57,500,000
due 12/15/2003 which exists in form and substance satisfactory to the Bank.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which at least a majority of the securities or other ownership
interests having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by such Person, but excluding Unconsolidated
Investees.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the reserve percentages expressed as a
decimal established by the Board of Governors of the Federal Reserve System
and any other banking authority for determining the reserve requirements of
the Bank in respect of new non-personal negotiable time deposits in dollars of
over $100,000 with maturities approximately equal to the applicable Interest
Period, such reserve requirements including, without limitation, those imposed
under Regulation D of such Board of Governors. Statutory Reserves shall be
adjusted automatically on and as of the effective date of any change in such
percentage.
"Term Loan" shall mean any term loan pursuant to Section 2.04 hereof.
"Term Note" shall mean the promissory note of the Borrower delivered
pursuant to Section 2.05 hereof.
"Termination Date" shall mean the earlier of December 21, 1996 or the
date the Commitment may otherwise be terminated in accordance herewith.
"Treasury Rate" shall mean a rate of interest equal to the fixed annual
yield on United States Treasury Securities having the same maturity as the
Treasury Rate Loan to which such Treasury Rate applies, determined on the
Business Day prior to the Borrowing Date for such Treasury Rate Loan.
"Treasury Rate Loan" means a Term Loan bearing interest in accordance
with Section 2.09.
"Type" shall have the meaning specified in definition of "Loan".
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"Unconsolidated Investees" shall mean any Persons in which either
Borrower has an investment and which does not report its results on a
consolidated basis with the Borrowers.
"Unfunded Current Liability" of any Plan means the amount, if any, by
which the present value of the accrued benefits under the Plan as of the close
of its most recent plan year exceeds the fair market value of the assets
allocable thereto, determined in accordance with Section 412 of the Code.
"Working Capital" shall mean for the Borrower and its Subsidiaries, the
amount by which Consolidated Current Assets exceed Consolidated Current
Liabilities.
SECTION 1.02. Accounting Terms/Other Definitional Provisions. (a)
Except as otherwise herein specifically provided, each accounting term used
herein shall have the meaning given to it under Generally Accepted Accounting
Principles. "Generally Accepted Accounting Principles" shall mean those
generally accepted accounting principles and practices which are recognized
as such by the American Institute of Certified Public Accountants acting
through the Financial Accounting Standards Board ("FASB") or through other
appropriate boards or committees thereof and which are consistently applied
for all periods so as to properly reflect the financial condition, and the
results of operations and changes in financial position, of the Borrower,
except that any accounting principle or practice required to be changed by the
FASB (or other appropriate board or committee of the FASB) in order to
continue as a generally accepted accounting principle or practice may be so
changed. Any dispute or disagreement between the Borrower and the Bank
relating to the determination of Generally Accepted Accounting Principles
shall, in the absence of manifest error, be conclusively resolved for all
purposes hereof by the written opinion with respect thereto, delivered to the
Bank, of independent accountants selected by the Borrower and approved by the
Bank for the purpose of auditing the periodic financial statements of the
Borrower.
(b) Meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
II. LOANS
SECTION 2.01. Revolving Credit Loans. (a) Subject to the terms and
conditions, and relying upon the representations and warranties, set forth
herein, the Bank agrees to make loans (individually a "Revolving Credit Loan"
and, collectively, the "Revolving Credit Loans") to the Borrowers at any time
or from time to time on or after the date hereof and until the earlier of the
Termination Date or the date the Commitment shall have been terminated in
accordance with the terms hereof, in an aggregate principal amount not in
excess of $15,000,000 at any time (the "Commitment"). Within the foregoing
limits, each Borrower may borrow, hereunder on or after the date hereof and
prior to the Termination Date, repay or reborrow subject to the terms,
provisions and limitations set forth herein. After the Termination Date, no
amounts repaid may be reborrowed. The obligations of the
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Borrowers in regard to payment of the Loans hereunder are several not joint,
it being expressly agreed and understood that each Borrower shall be liable to
the Bank for only the Loans and interest accruing thereon made to such
Borrower. Notwithstanding the foregoing, each Borrower shall be jointly and
severally liable for any commitment or facility fees, increased costs,
indemnities and expenses hereunder and performance of the terms and conditions
of this Agreement.
(b) Revolving Credit Loans made by the Bank on any one day shall be in
any combination of Prime Rate Loans and Eurodollar Rate Loans, provided, that
each Prime Rate Loan shall be in an amount not less than $250,000 and in
integral multiples of $250,000 and each Eurodollar Rate Loan shall be in an
amount not less than $500,000 and in integral multiples of $100,000. The
initial Revolving Credit Loan by the Bank shall be made against delivery to
the Bank of the Revolving Credit Note, payable to the order of the Bank, as
described in Section 2.02 hereof and upon delivery of the other documentation
required in Article IV herein.
(c) Each Revolving Credit Loan made as a Prime Rate Loan shall be made
upon one (1) Business Day's and each Revolving Credit Loan made as a
Eurodollar Rate Loan shall be made upon three (3) Business Days', prior
written, telegraphic or facsimile notice from the Borrower to the Bank. Each
such notice (a "Notice of Borrowing") shall be in substantially the form of
Schedule I hereto and shall specify (i) the requested date of such Loan, (ii)
the requested Type of Loan, (iii) the requested Interest Period for such Loan,
and (iv) the requested amount of such Loan.
SECTION 2.02. Revolving Credit Note. The Revolving Credit Loans by the
Bank shall be evidenced by promissory notes (each a "Revolving Credit Note"),
substantially in the form attached hereto as Exhibits A and A-1, appropriately
completed by the appropriate Borrower, duly executed and delivered on behalf
of each Borrower and payable to the order of the Bank in the principal amount
equal to the Commitment. The date and amount of each Revolving Credit Loan,
and the date and amount of each payment or prepayment of principal of any
Revolving Credit Loan shall be recorded on the grid schedule annexed to the
appropriate Revolving Credit Note and each Borrower authorizes the Bank to
make such recordation. The Revolving Credit Notes and grid schedules shall be
presumptive evidence of the Revolving Credit Loans, absent manifest error. The
aggregate unpaid amount of the Revolving Credit Loans to a Borrower at any
time shall be the principal amount owing on the Revolving Credit Note of such
Borrower at such time. Unless the Borrower elects to give a Conversion Request
as provided in Section 2.04 hereof, the aggregate principal amount outstanding
on its Revolving Credit Note shall be payable on the Termination Date. All
accrued and unpaid interest on the Revolving Credit Loans shall be payable on
each Interest Payment Date and on the Termination Date (if such date is not an
Interest Payment Date); provided, however, that if any such day is not a
Business Day, such accrued interest, if any, shall be payable on the next
succeeding Business Day with additional accrued interest until paid.
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<PAGE>
SECTION 2.03. Interest on Revolving Credit Loans. Each Revolving
Credit Loan shall bear interest in accordance with Section 2.08, if it is a
Prime Rate Loan and Section 2.10, if it is a Eurodollar Rate Loan.
SECTION 2.04. Term Loan. At any time and from time to time until the
Termination Date either Borrower may deliver to the Bank a request (a
"Conversion Request") that all or a portion of the then outstanding principal
amount of Revolving Credit Loans made to such Borrower be converted to a Term
Loan. The Bank agrees that provided no Event of Default exists hereunder, and
upon the simultaneous payment or prepayment, as the case may be, (which may be
from the proceeds of such Term Loan) in full of the principal of and interest
on the Revolving Credit Loans then being converted to such Term Loan to make a
three, four or five year term loan (the "Term Loan") to the requesting
Borrower on the last day of the Interest Period then in effect for the
Revolving Credit Loans being converted. The Term Loan shall be in the
principal amount contained in the Conversion Request, and may be in any
combination of Prime Rate Loans, Eurodollar Rate Loans and Treasury Rate
Loans, as elected by Borrower in its Conversion Request; provided that each
Type of Term Loan, shall be in a principal amount of not less than $1,000,000.
The Conversion Request shall be in substantially the form of Schedule I hereto
and shall specify (i) the requested date of such Loan, (ii) the requested Type
of Loan, (iii) the requested term for such Loan, and (iv) the requested amount
of such Loan. The Bank shall make each Term Loan hereunder against delivery to
it of the Borrowees Term Note payable to the Bank, as described in Section
2.05 hereof. The principal amount of any Term Loans made under this section
when made shall act as a reduction of the Bank's Commitment to make any
Revolving Credit Loans in such principal amounts, provided, however, that
prior to the Termination Date, at the time of each principal installment
payment pursuant to Section 2.05 hereof such Commitment to make Revolving
Credit Loans shall be deemed reinstated by the amount of such principal
payment.
SECTION 2.05. Term Note; Grid Schedules. (a) Each Term Loan shall be
evidenced by a promissory note ("Term Note") substantially in the form
attached hereto as Exhibit B, appropriately completed, payable to the order of
the Bank, duly executed and delivered on behalf of the appropriate Borrower,
dated the Borrowing Date and in the principal amount of such Term Loan. The
principal amount outstanding on such Term Note shall be payable as to
principal in twelve (12), sixteen (16) or twenty (20) equal consecutive
quarterly installments and payable on the last day of each calendar quarter,
commencing on the first such day to occur after such Term Loan Borrowing Date
with a final payment due on the last day of the 12th, 16th or 20th calendar
quarter thereafter as applicable (the "Expiration Date"). The date and amount
of each Term Loan, each Term Loan term, each applicable interest rate and
related Interest Period, the identity of the Borrower, and the date and amount
of each payment or prepayment of principal of such Term Loan shall be recorded
on the grid schedule annexed to such Term Note, and each Borrower authorizes
the Bank to make such recordation. Each Term Note and grid schedule shall be
presumptive evidence of such Term Loan made by the Bank, absent manifest
error.
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(b) All said notations and endorsements on the grid schedules annexed
to all Notes shall, in the absence of manifest error, be conclusive as to such
notations and endorsements, provided, however, that the failure to make said
notation or endorsement with respect to any Loan or payment shall not limit or
otherwise affect the obligation of any Borrower under the Agreement or the
Notes.
SECTION 2.06. Interest on the Term Loan. The Term Loan shall bear
interest in accordance with Section 2.08, if it is a Prime Rate Loan, Section
2.09 if it is a Treasury Rate Loan, and Section 2.10, if it is a Eurodollar
Rate Loan.
SECTION 2.07. Intentionally left blank.
SECTION 2.08. Interest on Prime Rate Loans. The Borrower shall pay
interest on the unpaid principal amount of each Prime Rate Loan that is a
Revolving Credit Loan or Term Loan from the Borrowing Date of such Loan until
the date such principal amount is due and payable, on each Interest Payment
Date for such Loan at an interest rate per annum equal to the Prime Rate plus
the applicable Margin.
SECTION 2.09. Interest on Treasury Rate Loans. The Borrower shall pay
interest on the unpaid principal amount of each Treasury Rate Loan from the
Borrowing Date of such Loan until the date such principal amount is due and
payable, on each Interest Payment Date for such Loan at an interest rate per
annum equal to the Treasury Rate plus the applicable Margin.
SECTION 2.10. Interest on Eurodollar Rate Loans. The Borrower shall
pay interest on the unpaid principal amount of each Eurodollar Rate Loan that
is a Revolving Credit Loan or Term Loan from the Borrowing Date of such Loan
until the date such principal amount is due and payable, on each Interest
Payment Date for such Loan at the Adjusted Eurodollar Rate plus the
applicable Margin.
SECTION 2.11. Continuation and Conversion of Loans. The Borrower
shall have the right, at any time on three (3) Business Days' prior
irrevocable written notice to the Bank, to continue any prime Rate Loan or
Eurodollar Rate Loan or portion thereof into a subsequent Interest Period, if
applicable, to convert any Revolving Credit Loan into a Term Loan and to
convert any Prime Rate or Eurodollar Rate Loan or portion thereof into a
Eurodollar Rate or Prime Rate Loan, subject to the selection of Interest
Periods in accordance with the definition thereof and to the following
conditions precedent:
(a) no Event of Default shall have occurred and be
continuing at the time of such continuation or conversion;
(b) in the case of a continuation of or conversion of a
Loan(s), the aggregate principal amount of Loans continued or
converted shall not be less than $500,000 with respect to Eurodollar
Rate Loans and in multiples of $250,000 with respect to Prime Rate
Loans;
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(c) each conversion shall be effected by the Bank by applying the
proceeds of the new Loan to the Loan (or portion thereof being converted,
and accrued interest on the Loan (or portion thereof) being converted
shall be paid by the Borrower at the time of conversion; and
(d) a Eurodollar Rate Loan may be converted to a Prime Rate Loan
only on the last day of its Interest Period;
(e) each request for a Eurodollar Rate Loan or a continuation
thereof which shall fail to state an applicable Interest Period shall be
deemed to be a request for an Interest Period of one month's duration;
(f) in the event that the Borrower does not give notice to
continue any Eurodollar Rate Loan into a subsequent Interest Period, the
Borrower shall be deemed to have requested that such Loan (unless repaid)
be converted to a Prime Rate Loan at the expiration of the then current
Interest Period; and
(g) any conversion of a Revolving Credit Loan into a Term Loan
must also comply with the provisions of Section 2.04 hereof.
SECTION 2.12. Prepayment of Loans. (a) Subject to the provisions of
Sections 2.12(b), 2.12(d), 2.17, 2.20 and 2.21 hereof, the Borrower may, by 11
a.m. of the day of prepayment in the case of a Prime Rate Loan and three (3)
Business Days' notice to the Bank in the case of a Fixed Rate Loan, prepay the
outstanding amount of any Loan in whole or in part with accrued interest to the
date of such prepayment on the amount prepaid; provided, however, that any
prepayment of any Eurodollar Rate Loan shall be made on the last day of an
Interest Period for such Loan; and provided, further, that each partial
prepayment of any Loan shall be in a principal amount not less than $500,000
and integral multiples thereof, except in the case of a Term Loan with a
balance of less than $500,000 which may be prepaid in full. Each prepayment of
a Term Loan shall be permanent provided, however, that prior to the Termination
Date, as described in Section 2.04 hereof such payments shall cause a
reinstatement in such amount of the Bank's Commitment to make Revolving Credit
Loans.
(b) The Borrower shall reimburse the Bank on demand for any loss incurred
or to be incurred by it in the reemployment of the funds released by any
prepayment or conversion of any Eurodollar Rate Loan whether required or
permitted by any provision of this Agreement or otherwise, in each case if
such Loan is prepaid or converted other than on the last day of an Interest
Period for such Loan. The Borrower further agrees to reimburse the Bank on
demand for any loss incurred or to be incurred by it in the reemployment of the
funds released by any refusal by the Borrower to accept any requested
Eurodollar Rate Loan or any requested continuation thereof or conversion
thereto. If any prepayment hereunder makes it necessary to apply any principal
installment payment on a Note to interest due pursuant to a Eurodollar Rate
Loan, with an Interest Period extending beyond the date of such installment
payment, the Borrower shall
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reimburse the Bank upon demand for any loss incurred or to be incurred by the
Bank (determined in accordance with the immediately preceding sentence and
based on whether such prepayment was voluntary or required) in the
reemployment of funds realized on such installment payment and applied to such
Eurodollar Rate Loan.
(c) Each prepayment of any Term Loan shall be applied to the
installments thereof in the inverse order of maturity and accompanied by
accrued interest on the amount of such prepayment to the date thereof.
(d) Any prepayment or conversion of a Treasury Rate Loan (whether
required or permitted by any provision of this Agreement) must be accompanied
by a payment equal to the sum of (a) accrued interest on the principal amount
prepaid to the prepayment date, (b) a prepayment premium equal to 1% of the
principal amount prepaid and (c) liquidated damages, if any, attributable to
the prepayment. Liquidated damages shall be equal to the amount, if any, by
which (i) the present value of all future scheduled principal and interest
payments discounted to the date of prepayment at a rate equal to the average
yield of U.S. Treasury securities having maturities matching the average
remaining life of the Loan on the prepayment date, exceeds (ii) the present
value of all future scheduled principal and interest payments discounted to the
date of prepayment at a rate equal to the average yield of U.S. Treasury
securities having maturities matching the average life of the Loan on the
Borrowing Date. In the event of a partial prepayment, the amount of liquidated
damages, if any, shall be prorated by multiplying said amount by a fraction,
the numerator of which is the principal amount prepaid and the denominator of
which is the unpaid principal amount of the Loan immediately prior to the
prepayment. The average remaining life of the Loan means a period of days equal
to the quotient of (x) the sum of the products obtained by multiplying each
portion (as determined below) of the amount prepaid by the number of days from
the date of prepayment to the installment date for such portion, divided by
(y) the amount prepaid. The portion of the amount prepaid applicable to each
installment date for purposes of this calculation shall be the portion of the
amount prepaid that would be applied on such installment date if the amount
prepaid were applied to the installments in the inverse order of maturities. A
determination of the Bank as to the amounts payable pursuant to this provision
shall be conclusive absent manifest error.
SECTION 2.13. Reduction or Termination of the Commitment. The Borrowers
acting jointly shall have the right, upon at least two (2) Business Days' prior
written or telephonic notice (promptly confirmed in writing) to the Bank, at
any time to terminate or from time to time reduce the Commitment without
premium or penalty; provided, however, that the Commitment may not be reduced
to the extent that following such reduction the unpaid principal of the Notes
would exceed the Commitment and provided further that, any acceleration of the
Termination Date shall be accompanied by the payment of Commitment Fee then
accrued hereunder.
SECTION 2.14. Fees. The Borrowers agree to pay to the Bank, in
consideration of its Commitment, a commitment fee ("Commitment Fee") of .1
875% per annum on the
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average daily unused portion of the Commitment (based on a year of 360
days), payable quarterly commencing on the first day of the secoond quarter
following the Closing Date.
SECTION 2.15. Default Rate-of Interest; Late Payment Penalty (a)
Upon the occurrence of a Default or an Event of Default, the interest rates
applicable to the Loans shall immediately without further action by this
Bank be increased to 2% above the rate(s) of interest then in effect on the
Loans and shall be deemed converted at the end of any then Interest Period
to Prime Rate Loans and be deemed to bear interest at a rate equal to 2%
above the Prime Rate until paid in full.
(b) Borrower also agrees to pay a late charge on any principal and/or
interest payments not paid when due at a fluctuating interest rate per
annum equal to 1% above the Prime Rate calculated upon the amount due until
the date of payment.
SECTION 2.16. Application of Payments and Computations. All
computations of the Treasury Rate, Prime Rate and Eurodollar Rate and of
fees, overdue payment interest charges and penalties hereunder shall be
made by the Bank on the basis of a year of 360 days, for the actual number
of days (including the first day but excluding the last day) occurring in
the period for which such interest is payable.
SECTION 2.17. Funds. Manner of Payment. Each Loan and each payment
and prepayment of principal and interest on the Notes shall be made in
federal or other immediately available funds without set-off or
counterclaim to the Bank. Whenever any payment to be made hereunder or
under any Note shall be stated to be due, or whenever the last day of any
Interest Period would otherwise occur on a day other than a Business Day,
(i) such payment shall be made and the last day of such Interest Period
shall occur, on the next succeeding Business Day, and such extension of
time shall in such case be included in the computaton of payment of
interest or fees, as the case may be, except (ii) with respect to
Eurodollar Rate Loans, if the next succeeding Business Day would fall in
the next calendar month, such payment shall be made and the last day of
such Interest Period shall occur, on the first preceding Business Day. Each
Borrower hereby authorizes the Bank to charge its accounts maintained with
the Bank, for all principal and interest payments and any fees due
hereunder.
SECTION 2.18. Capital Adequacy. If the Bank shall have determined
that, after the date hereof, the adoption of any applicable law, rule,
regulation or guideline regarding capital adequacy, or any change in any of
the foregoing or in the interpretation or administration of any of the
foregoing by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
the Bank (or any lending office of the Bank) or the Bank's holding company
with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
Bank's capital or on the capital of the Banks holding company, if any, as a
consequence of its obligations hereunder to a level below that which the
Bank or the Bank's holding company could have achieved but for Such
adoption,
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change, compliance or directive (taking into consideration the Bank's policies
and the policies of the Bank's holding company with respect to capital
adequacy) by an amount deemed by the Bank to be material, then from time to
time the Borrower shall pay to the Bank such additional amount or amounts as
will compensate the Bank or the Bank's holding company for any such reduction
suffered.
SECTION 2.19. Inability to Determine Rate. In the event, and on each
occasion, that on the day two Business Days prior to (i) the commencement of
any Interest Period for a Eurodollar Rate Loan, or (ii) the Borrowing Date for
a Treasury Rate Loan, the Bank shall have determined (which determination
shall, in the absent of manifest error, be conclusive and binding upon the
Borrower) that such rate will not accurately reflect the cost to the Bank of
making or funding the principal amount of such Fixed Rate Loan during such
Interest Period or Treasury Rate Loan term, or that reasonable means do not
exist for ascertaining the rate on such Fixed Rate Loan, the Bank shall, as
soon as practicable thereafter, give written, telegraphic, telephonic or
facsimile notice of such determination to the Borrower and any request by the
Borrower for such Fixed Rate Loan conversion or continuation of such Fixed Rate
Loan shall be deemed a request for a Prime Rate Loan or, in the case of an
inability to determine a Treasury Rate, a Eurodollar Rate Loan if it is then
currently available. After such notice shall have been given, and until the
circumstances giving rise to such notice no longer exist, each request for such
Fixed Rate Loan shall be deemed to be a request for a Prime Rate Loan or, in
the case of an inability to determine a Treasury Rate, a Eurodollar Rate Loan
if it is then currently available.
SECTION 2.20. Other Events. (a) In the event that any enactment of or
change after the date hereof in applicable law, regulation, condition,
directive or interpretation thereof (including any request, guideline or policy
whether or not having the force of law and including, without limitation,
Regulation D promulgated by the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect) by any authority
charged with the administration or interpretation thereof.
(i) subjects the Bank to any tax with respect to the Loans
hereunder or changes the basis of taxation of payment to the Bank of
principal of or interest on any Loan or any Commitment hereunder or any
other amounts payable hereunder (other than any tax measured by or based
upon the overall net income of the Bank or any branch or office thereof,
imposed by the United States of America or by any other jurisdiction in
which the Bank is qualified to do business or any political subdivision
or taxing authority therein); or
(ii) imposes, modifies or deems applicable any reserve or
deposit requirements against any assets held by, deposits with or for
the account of, or loans or commitments by, an office of the Bank in
connection with payments by the Bank hereunder; or
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(iii) imposes upon the Bank or the Interbank Market any other
condition with respect to any amount paid or payable to or by the Bank
pursuant to this Agreement;
and the result of any of the foregoing is to increase the cost to the Bank of
making the payment or maintaining its Commitment and Term Loan or to reduce
the amount of the payment receivable by the Bank hereunder or to require the
Bank to make the payment on or calculated by reference to the gross amount of
the sum received by it pursuant hereto, in each case by an amount which the
Bank in its reasonable judgment deems material, then:
(A) the Bank shall promptly notify the Borrower in writing of
the happening of such event;
(B) the Bank shall promptly deliver to the Borrower a certificate
stating the change which has occurred or the reserve
requirements or other conditions which have been imposed on the
Bank or the request, direction or requirement with which it has
complied, together with the date thereof, the amount of such
increased cost, reduction or payment and the way in which such
amount has been calculated; and
(C) the Borrower shall pay to the Bank, within 30 days after
delivery of the certificate referred to in clause (B) above,
such an amount or amounts as will compensate the Bank for such
additional cost, reduction or payment.
The Bank agrees to designate a different office of the Bank as its lending
office for Eurodollar Rate Loans if the designation would avoid or reduce any
amount payable by the Borrower to the Bank pursuant to this paragraph (a);
provided, however, that such designation need not be made if it would result
in any additional costs, expenses or risks to the Bank that are not reimbursed
by the Borrower pursuant hereto or would be in any other respect prejudicial
to the Bank. If the Bank makes a demand for compensation pursuant to this
paragraph (a), the Borrower may at any time, upon at least three Business
Days' prior written or telegraphic notice to the Bank either (i) repay in full
any outstanding Fixed Rate Loan, together with accrued interest thereon to the
date of prepayment or (ii) convert such Loan to a Loan of a different Type,
notwithstanding the provisions of Section 2.12(a).
(b) Failure on the part of the Bank to demand compensation under
paragraph (a) above on any one occasion shall not constitute a waiver of its
right to demand such compensation on any other occasion and failure on the
part of the Bank to deliver any certificate in a timely manner shall not in
any way reduce any obligations of the Borrower to the Bank under this Section
2.20.
SECTION 2.21. Change in Legality. (a) Notwithstanding anything to the
contrary contained elsewhere in this Agreement, if any change after the date
hereof in any law or regulation or in the interpretation thereof by any
governmental authority charged with the
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administration thereof shall make it unlawful (based on the opinion of any
counsel, whether in-house, special or general, for the Bank) for the Bank to
make or maintain any Type of Fixed Rate Loan or to give effect to its
obligations as contemplated hereby with respect to any Type of Fixed Rate
Loan, then, by written notice to the Borrower by the Bank, the Bank may:
(i) declare that such Type of Fixed Rate Loans will not
thereafter be made by the Bank hereunder, whereupon the Borrower shall
be prohibited from requesting such Type of Loans from the Bank
hereunder unless such declaration is subsequently withdrawn; and the
Bank agrees to withdraw any such declaration if and to the extent that
the making and/or maintenance by the Bank of such Type of Fixed Rate
Loans shall cease to be unlawful; and
(ii) require that all outstanding Fixed Rate Loans of the
affected Type made by it be converted to Prime Rate Loans, whereupon
all such Loans shall be automatically converted to Prime Rate Loans as
of the effective date of such notice as provided in paragraph (b)
below (notwithstanding the provisions of Section 2.12(a)).
(b) For purposes of this Section 2.21, a notice to the Borrower by the
Bank pursuant to paragraph (a) above shall be effective, if lawful and if the
affected Type of Fixed Rate Loans is Eurodollar Rate Loans and any Loans of
such Type shall then be outstanding, on the last day of then current Interest
Period; otherwise, such notice shall be effective on the date of receipt by
the Borrower.
(c) The Bank agrees to designate a different office of the Bank as its
lending office for Eurodollar Rate Loans if such designation will effect
compliance with the law or regulation or interpretation thereof invoking the
provisions of this Section 2.21; provided, however, that such designation need
not be made if it would result in any additional costs, expenses or risks to
the Bank that are not reimbursed by the Borrower pursuant hereto or would be
in any other respect prejudicial to the Bank.
III. REPRESENTATIONS AND WARRANTIES
Each Borrower, for itself, represents and warrants to the Bank, that:
SECTION 3.01. Organization, Corporate Powers, etc. The Borrower (i) is
a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware or New York, as applicable, and (ii) has the
power and authority to own its properties and to carry on its business as now
being conducted, (iii) is duly qualified to do business in every jurisdiction
wherein the conduct of its business or the ownership of its properties is such
as to require such qualification and (iv) has the corporate power to execute,
deliver and perform the Loan Documents.
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<PAGE>
SECTION 3.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of the
Loan Documents and the borrowings by the Borrower hereunder (a) has been duly
authorized, (b) will not violate (i) any provision of law or any govemmental
rule or regulation applicable to the Borrower, (ii) any order of any court or
other agency of government binding on the Borrower or any indenture, agreement
or other instrument to which the Borrower.is a party, or by which the Borrower
or any of its property is bound, and (c) will not be in conflict with, result
in a breach of or constitute (with due notice and/or lapse of time) a default
under, any such indenture, agreement or other instrument, or result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of its property or assets other than as contemplated by
the Loan Documents. Each person executing the Loan Documents has full
authority to execute and deliver same for and on behalf of the Borrower.
SECTION 3.03. Financial Condition. (a) The Borrower has furnished the
Bank with consolidated financial statements of each Borrower and their
Subsidiaries for the fiscal year ending December 31, 1993, audited and
certified by Ernst & Young together with unaudited statement/balance sheet
and the related statements of income and retained earnings for the period
ending September 30, 1994. Such financial statements were prepared in
conformity with Generally Accepted Accounting Principles, and present fairly
the financial condition of each Borrower and their Subsidiaries and as of the
date of such financial statements and the results of operations for the
period covered thereby.
(b) Neither the Borrowers nor any of their consolidated Subsidiaries
had, at the date of the most recent balance sheet referred to above, any
material contingent obligation, contingent liability or liability for taxes,
or any long-term lease or unusual forward or long-term commitment, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction or other financial derivative, which is not reflected in the
foregoing statements or in the notes thereto.
(c) During the period from September 30, 1994 to and including the
date hereof there has been no sale, transfer or other disposition by the
Borrowers or any of their consolidated Subsidiaries of any material part of
its business or property and no purchase or other acquisition of any business
or property (including any capital stock of any other Person) material in
relation to the consolidated financial condition of the Borrowers and their
consolidated Subsidiaries at September 30, 1994.
(d) Since September 30,1994 there has been no development or event nor
any prospective development or event, which has had or could reasonably be
expected to have a Material Adverse Effect. There is no obligation or
liability, contingent or otherwise, of the Borrowers and their Subsidiaries,
which is material in amount and which is not, or shall not be, reflected in
the foregoing statements (and the related notes thereto) as of said date.
SECTION 3.04. Taxes. All assessed deficiencies resulting from Internal
Revenue Service examinations of the Federal income tax returns of the Borrower
have been
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discharged or reserved against. The Borrower has filed or caused to be filed
all Federal, state and local tax returns which are required to be filed, and
have paid or have caused to be paid all taxes as shown on said returns or on
any assessment received by it, to the extent that such taxes have become due,
except any such taxes that are immaterial in amount or are being contested in
good faith with appropriate reserves set aside therefor.
SECTION 3.05. Title to Properties. The Borrower has good and marketable
title to its properties and assets reflected on the balance sheet referred to
in Section 3,03 hereof, except for such properties and assets as have been
disposed of since the date of such balance sheet as no longer used or useful
in the conduct of its business or as have been disposed of in the ordinary
course of business, and all such properties and assets are free and clear of
mortgages, pledges, liens, charges and other encumbrances, except as required
or permitted by the provisions hereof or as disclosed in the balance sheet
referred to in Section 3.03 hereof.
SECTION 3.06. Litigation. (a) There are no actions, suits or
proceedings (whether or not purportedly on behalf of the Borrower) pending or,
to the knowledge of the Borrower, threatened against or affecting the Borrower
or any material property of the Borrower, at law or in equity or before or by
any Federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, which involve
any of the transactions contemplated herein or which, if adversely determined
against the Borrower, would have a Material Adverse Effect; and (b) the
Borrower is not in default with respect to any judgment, writ, injunction,
decree, rule or regulation of any court or Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which would have a Material Adverse Effect.
SECTION 3.07. Agreements. The Borrower is not a party to any agreement
or instrument or subject to any charter or other corporate restriction or any
judgment, order, writ, injunction, decree or regulation materially and
adversely affecting its business, properties or assets, operations or
condition (financial or otherwise). The Borrower is not in default in any
manner which would have a Material Adverse Effect or materially and adversely
affect the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any other agreement or instrument to
which it is a party.
SECTION 3.08. ERISA. No Reportable Event has occurred during the
five-year period prior to the date on which this representation is made or
deemed made with respect to any Plan, and each Plan has complied in all
material respects with the applicable provisions of ERISA and the Code. The
present value of all accrued benefits under each Single Employer Plan
maintained by the Borrower or any Commonly Controlled Entity (based on those
assumptions used to fund the Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal
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from any Multiemployer Plan, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any liability under ERISA if the
Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding
the date on which this representation is made or deemed made. No such
Multiemployer Plan is in reorganization or Insolvent.
SECTION 3.09. Proceeds of the Loan. The proceeds of the Loans shall be
used by the Borrower only for the purposes described in the preamble hereto.
SECTION 3.10. Federal Reserve Regulations. (a) The Borrower is not
engaged principally in, nor have as one of its important activities, the
business of extending credit for the purpose of purchasing or carrying any
"margin stock" (within the meaning of Regulation U of the Board of Governors
of the Federal Reserve System of the United States, as amended to the date
hereof). No part of the proceeds of the borrowings hereunder will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock. No part of the
proceeds of the borrowings hereunder will be used for any purpose which
violates or which is inconsistent with the provisions of Regulation X of said
Board of Governors. If requested by the Bank, the Borrower will furnish to the
Bank a statement on Federal Reserve Form U-1.
(b) No part of the proceeds of the Loans will be used, whether directly
or indirectly, and whether immediately, incidentally or ultimately, (i) to
purchase or to carry margin stock or to extend credit to others for the
purpose of purchasing or carrying margin stock, or to refund indebtedness
originally incurred for such purpose, or (ii) for any purpose which violates
or is inconsistent with the provisions of the Regulations G, T, U, or X of the
Board of Governors of the Federal Reserve System.
SECTION 3.11. Subsidiaries. Attached hereto as Schedule II is a
correct and complete fist of all the Borrower's Subsidiaries and Affiliates,
showing as to each Subsidiary, its name, the jurisdiction of its incorporation
and the percentage of such outstanding shares owned by the Borrower and other
Subsidiaries, respectively. Each of the Borrowees Subsidiaries and Affiliates
is a corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and has all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
SECTION 3.12. Environmental Matters. To the best knowledge of the
Borrower, each of the representations and warranties set forth in paragraphs
(a) through (e) of this subsection is true and correct with respect to each
parcel of real property owned or operated by the Borrower and/or its
Subsidiaries (the "Properties"), except to the extent that the facts and
circumstances giving rise to any such failure to be so true and correct could
not reasonably be expected to have a Material Adverse Effect:
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(a) The Properties do not contain, and have not previously
contained, in, on, or under, including, without limitation, the soil
and groundwater thereunder, any Hazardous Materials.
(b) The Properties and all operations and facilities at the
Properties are in compliance with all Environmental Laws, and there
is no Hazardous Materials contamination or violation of any
Environmental Law which could interfere with the continued operation
of any of the Properties or impair the fair market value of any
thereof.
(c) Neither the Borrower nor any of its Subsidiaries has
received any complaint, notice of violation, alleged violation,
investigation or advisory action or of potential liability or of
potential responsibility regarding environmental protection matters
or permit compliance with regard to the Properties, nor is the
Borrower aware that any Governmental Authority is contemplating
delivering to the Borrower or any of its Subsidiaries any such
notice.
(d) Hazardous Materials have not been generated, treated,
stored, disposed of, at, on or under any of the Properties, nor have
any Hazardous Materials been transferred from the Properties to any
other location.
(e) There are no governmental, administrative actions or
judicial proceedings pending or contemplated under any Environmental
Laws to which the Borrower or any of its Subsidiaries is or will be
named as a party with respect to the Properties, nor are there any
consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Laws with respect to
any of the Properties.
SECTION 3.13. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended. The Borrower is not subject to regulation under any Federal
or State statute or regulation which limits its ability to incur
Indebtedness.
SECTION 3.14. Material Change. No material adverse change in the
business or operations of the Borrower has occurred since the financial
statements dated as of September 30, 1994 previously delivered to Bank.
SECTION 3.15. Governmental Approval. No registration with or consent
or approval of, or other action by, any Federal, state or other governmental
authority or regulatory body is required in connection with the execution,
delivery and performance of the Loan Documents or the borrowings hereunder.
SECTION 3.16. Full Disclosure. All written information heretofore
furnished by the Borrower to the Bank for purposes of or in connection with
this Agreement is, and all such information hereafter furnished by the
Borrower to the Bank will be, true and accurate in
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all material respects on the date as of which such information is stated or
certified. The Borrower has disclosed to the Bank in writing any and all facts
which, in the reasonable judgment of the Borrower have or would be reasonably
likely to cause a Material Adverse Effect.
SECTION 3.17. Binding Effect. This Agreement and each other Loan
Document to which the Borrower or any of its Subsidiaries is a party
constitute the legal, valid and binding obligations of the Borrower and any of
its Subsidiaries to the extent it is a party thereto, enforceable against such
Person in accordance with their respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforcecability.
SECTION 3.18. Trademarks and Licenses, etc. The Borrower and its
Subsidiaries own or are licensed or otherwise have the right to use, to the
best of their knowledge, all of the trademarks, service marks, trade names,
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person, to the extent that failure to have such rights would
reasonably be likely to cause a Material Adverse Effect. To the best knowledge
of the Borrower, no slogan or other advertising device or product, now
employed, or now contemplated to be employed by the Borrower or any of its
Subsidiaries infringes upon any rights held by any other Person; no claim or
litigation regarding any of the foregoing is pending or threatened, and no
statute, law, rule, regulation, standard or code is pending or, to the
knowledge of the Borrower, proposed regarding the foregoing, which, in either
case, would reasonably be expected to result in a Material Adverse Effect.
IV. CONDITIONS OF LENDING
The obligation of the Bank to lend hereunder is subject to the
following conditions precedent:
SECTION 4.01. Representations and Warranties; No Default. At the time
of each borrowing hereunder: (i) the representations and warranties set forth
in Article III hereof shall be true and correct in all material respects on
and as of such time with the same effect as though such representations and
warranties had been made on and as of such time; and (ii) the Borrowers shall
be in compliance with all the terms and provisions set forth herein on their
part to be observed or performed, and no Default or Event of Default shall
have occurred and be continuing at the time of each borrowing hereunder.
SECTION 4.02. Opinion of Counsel. On or prior to the Closing Date, the
Bank shall have received the legal opinion of the Borrowers' Vice President -
General Counsel and Secretary, counsel to the Borrowers covering such matters
incident to the transactions contemplated by this Agreement as the Bank may
reasonably require.
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SECTION 4.03. No Default Certificate; Deemed Representation. At the
time of the initial borrowing hereunder, each Borrower shall deliver to the
Bank a certificate in the form of Schedule III, dated such date and signed by
the Chief Financial Officer of such Borrower confirming compliance with the
conditions precedent set forth in Section 4.01 hereof Each request for a
subsequent borrowing hereunder shall be deemed a representation and warranty
by such Borrower that the conditions precedent set forth in Section 4.01
hereof are true and correct with the same effect as though such
representations and warranties had been made on and as of the date of such
borrowing.
SECTION 4.04. Supporting Documents. On or prior to the Closing Date,
the Bank shall have received (a) a certificate of good standing for the
Borrowers from the Secretary of the State of Delaware or New York, as
appropriate, dated as of a recent date; (b) copies of the Certificates of
Incorporation and By-laws of the Borrowers; (c) a certificate of the
Secretary or an Assistant Secretary of the Borrowers dated the Closing Date
and certifying (i) that neither the Certificates of Incorporation nor the
By-laws of the Borrowers have been amended since attaching a true and correct
copy of any such amendment; (ii) that attached thereto is a true and complete
copy of resolutions adopted by the Board of Directors of the Borrowers
authorizing the execution, delivery and performance of the Loan Documents;
(iii) the incumbency and specimen signature of each officer of the Borrowers
executing the Loan Documents, and a certification by another officer of the
Borrowers as to the incumbency and signature of the Secretary or Assistant
Secretary of the Borrowers; (d) such other documents as the Bank may
reasonably request.
SECTION 4.05. Other Information, Documentation. The Bank shall
receive such other and further information and documentation as it may
reasonably require, including, but not limited to, any information or
documentation or a lefter from the Borrowers relating to their compliance
with ERISA and with the requirements of all federal, state and local laws,
ordinances, rules, regulations or policies governing the use, storage,
treatment, transportation, refinement, handling, production or disposal of
Hazardous Materials.
V. AFFIRMATIVE COVENANTS
Each Borrower, for itself, covenants and agrees with the Bank that,
so long as this Agreement shall remain in effect or any of the principal of
or interest on the Notes or any fees remain unpaid, it will, and will cause
each of their Subsidiaries to:
SECTION 5.01. Corporate Existence, Properties, Insurance, etc. Except
as permitted in Section 5.02, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence as a corporation,
its rights and franchises and comply, in all material respects, with all laws
applicable to it; at all times maintain, preserve and protect all franchises,
trade names, licenses, patents, trademarks and copyrights and preserve all
material property used or useful in the conduct of their business and keep
the same in good repair, working order and condition, reasonable wear and
tear excluded, and from time to time make, or cause to be made, all needful
and proper repairs, renewals,
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replacements, betterments and improvements thereto so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times and at all times keep its insurable proportions adequately insured.
SECTION 5.02. Payment of Indebtedness, Taxes, etc. (a) Pay all
indebtedness and obligations as and when due and payable and (b) pay and
discharge or cause to be paid and discharged promptly all taxes, assessments
and governmental charges or levies imposed upon it or upon its income and
profits, or upon any of its property, real, personal or mixed, or upon any part
thereof, before the same shall become in default, as well as all lawful claims
for labor, materials and supplies or otherwise which, if unpaid, might become a
lien or charge upon such properties or any part thereof, provided, however,
that the Borrower nor any of its Subsidiaries shall be required to pay and
discharge or cause to be paid and discharged any such tax, assessment, charge,
levy or claim so long as the validity thereof shall be contested in good faith
by appropriate proceedings, and the Borrower or such Subsidiary, as the case
may be, shall have set aside on its books adequate reserves with respect to any
such tax, assessment, charge, levy or claim so contested; and further provided
that, subject to the foregoing proviso, the Borrower and its Subsidiaries will
pay or cause to be paid all such taxes, assessments, charges, levies or claims
upon the commencement of proceedings to foreclose any lien which has attached
as security therefor.
SECTION 5.03. Reporting Requirements. In the case of each Borrower,
furnish directly to the Bank:
(a) as soon as available and in any event within 120 days after
the end of each fiscal year of each Borrower, a consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as of the end
of such fiscal year and a consolidated income statement and statements
of cash flows and changes in stockholders' equity of the Borrower and
its consolidated Subsidiaries for such fiscal year, all in reasonable
detail and stating in comparative form the respective consolidated
figures for the corresponding date and period in the prior fiscal year,
and all prepared in accordance with GAAP and as to the consolidated
statements accompanied by an opinion thereon acceptable to the Bank by
Ernst & Young or other independent accountants of national standing
selected by the Borrower;
(b) deliver together with the information required in (a)
above, the same information presented on a consolidating basis prepared
by management of each Borrower;
(c) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the
Borrower, a consolidated and consolidating balance sheet of the
Borrower and its consolidated Subsidiaries as of the end of such
quarter and a consolidated and consolidating income statement and
statements of cash flows and changes in stockholders' equity, of the
Borrower and its consolidated Subsidiaries for the period commencing at
the end
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of the previous fiscal year and ending with the end of such quarter,
all in reasonable detail and stating in comparative form the
respective consolidated and consolidating figures for the
corresponding date and period in the previous fiscal year and all
prepared in accordance with GAAP and certified by the chief financial
officer of the Borrower (subject to year-end adjustments);
(d) promptly upon receipt thereof, copies of any reports
submitted to the Borrower or any of its Subsidiaries by independent
certified public accountants in connection with examination of the
financial statements of the Borrower or any such Subsidiary made by
such accountants;
(e) simultaneously with the delivery of the financial
statements referred to above, a certificate of the chief financial
officer of the Borrower (i) certifying that to the best of his
knowledge no Default or Event of Default has occurred and is
continuing or, if a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which
is proposed to be taken with respect thereto, (ii) with computations
demonstrating compliance with the covenants contained in Sections VII,
VIIA or VIIB, as applicable; and (iii) certifying the Leverage Test as
of the end of the most recent fiscal quarter covered by such financial
statements, computed pursuant to the Pricing Grid;
(f) promptly after the commencement thereof, notice of each
action, suit, and proceeding before any court or govemmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, affecting the Borrower or any of its Subsidiaries
which, (i) involves a claim in which it appears that the potential
liability exceeds 1/2% of the Consolidated Tangible Net Worth plus
Subordinated Debt approved by the Bank in writing; (ii) if determined
adversely to the Borrower or such Subsidiary, could have a material
adverse effect on the financial condition, properties, or operations
of the Borrower or such Subsidiary, or (iii) questions the validity of
any of the Loan Documents;
(g) as soon as possible after the occurrence of each Default or
Event of Default, a written notice setting forth the details of such
Default or Event of Default and the action which is proposed to be
taken by the Borrower with respect thereto;
(h) at all times indicated in (a) above, a copy of the
management letter prepared by the independent auditors;
(i) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of the
Borrowers and any of their Subsidiaries as the Bank may reasonably request.
SECTION 5.04. Access to Premises and Records. Maintain financial
records in accordance with Generally Accepted Accounting Principles and permit
representatives of the Bank to have access to such financial records and the
premises of the Borrower and
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any of its Subsidiaries upon request, and to make such excerpts from such
records or to conduct such audits and field examinations as such
representatives deem reasonably necessary.
SECTION 5.05. Notice of Adverse Change. Promptly, but not later than
fifteen (15) Business Days after any change or information shall have come to
the attention of any Executive Officer of the Borrower, notify the Bank in
writing of (a) any change in the business or the operations which, in the good
faith judgment of such officer, would be reasonably likely to have a Material
Adverse Effect, and (b) any information which indicates that any financial
statements which are the subject of any representation contained in this
Agreement, or which are furnished to the Bank pursuant to this Agreement,
fail, to any material extent, to present fairly the financial condition and
results of operations purported to be presented therein, disclosing the nature
thereof.
SECTION 5.06. Notice of Default. Promptly, in the event any Executive
Officer of the Borrower knows of any Default or Event of Default, or knows of
an event of default under any other agreement, furnish to the Bank a written
statement as to such occurrence, specifying the nature and extent thereof and
the action (if any) which is proposed to be taken with respect thereto.
SECTION 5.07. ERISA. (a) Comply, in all material respects with the
provisions of ERISA applicable to any Plan maintained by the Borrower and the
Subsidiaries; (b) As soon as possible and, in any event, within 10 days after
the Borrower or any Subsidiary knows any of the following, deliver to the Bank
a certificate of the Chief Financial Officer setting forth details as to such
occurrence and such action, if any, which the Borrower, any Subsidiary or
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Borrower, the
Subsidiary, ERISA Affiliate, the PBGC, a Plan participant or the Plan
Administrator with respect thereto: that a Reportable Event has occurred or is
expected to occur, that an accumulated funding deficiency has been incurred or
an application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code with respect to a Plan, that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA, that a Plan has an Unfunded Current Liability giving rise to a lien
under ERISA, that proceedings may be or have been instituted to terminate a
Plan, that a proceeding has been instituted pursuant to Section 515 of ERISA
to collect a delinquent contribution to a Plan, or that the Borrower, any
Subsidiary or any ERISA Affiliate will or may incur any liability (including
any contingent or secondary liability) to or on account of the termination of
or withdrawal from a Plan under Section 4062, 4063, 4064, 4201 or 4204 of
ERISA. In addition to any certificates or notices delivered to the Bank
pursuant to the second sentence hereof, copies of annual reports and any other
notices received by the Borrower or Subsidiary required to be delivered to the
Bank hereunder shall be delivered to the Bank no later than 30 days after the
later of the date such report or notice has been filed with the Internal
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Revenue Service or the PBGC, given to Plan participants or received by the
Borrower or the Subsidiary.
SECTION 5.08. Compliance with Contractual Obligations and Requirements
of Law; Applicable Laws; Comply, in all material respects, with all
Contractual Obligations and requirements of law, the breach of which would be
reasonably likely to have a Material Adverse Effect.
SECTION 5.09. Subsidiaries. Give the Bank prompt written notice of the
creation, establishment or acquisition, in any manner, of any Subsidiary or
Affiliate not existing on the date hereof.
SECTION 5.10. Environmental Laws.
(a) Comply with, and insure compliance by all tenants and subtenants,
if any, with, all Environmental Laws and obtain and comply with and maintain
and insure that all tenants and subtenants obtain and comply with and
maintain, any and all licenses, approvals, registrations or permits required
by Environmental Laws except to the extent that failure to do so could not be
reasonably expected to have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives
of all Governmental Authorities respecting Environmental Laws except to the
extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be reasonably
expected to have a Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Bank and its respective
employees, agents, officers and directors, from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation of or
non-compliance with any Environmental Laws applicable to the real property
owned or operated by the Borrower or any of its Subsidiaries, or any orders
requirements or demands of Governmental Authorities related thereto,
including, without limitation, attorney's and consultant's fees,
investigation and laboratory fees, court costs and litigation expenses,
except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of the party seeking indemnification
therefor.
SECTION 5.11. Support Services Agreement. Raymond shall maintain the
Support Services Agreement dated September 1, 1993, among it and its Canadian
Subsidiaries, R.H.E., Ltd. and Raymond Industrial Equipment, Ltd., in effect,
comply with its obligations thereunder, and enforce the obligations of its
Subsidiaries thereunder, all without waiver, amendment or assignment by any
of the parties, except with the prior written consent of the Bank.
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SECTION 5.12. Voting of Subsidiaries' Shares. The Borrowers will each
vote the shares of any Subsidiary, and cause any Subsidiary share to be voted,
in a manner which will not violate any of the covenants or restrictions of
this Agreement or any other of the Loan Documents.
VI. NEGATIVE COVENANTS
Each Borrower for itself covenants and agrees with the Bank that, so
long as this Agreement shall remain in effect or any of the principal of or
interest on the Notes or any fees remain unpaid, it will not, nor will it
permit any Subsidiary to, directly or indirectly:
SECTION 6.01. Liens. Incur, create, assume or suffer to exist any
mortgage, pledge, lien, charge or other encumbrance or restriction of any
nature whatsoever (including conditional sales, other title retention
agreements or liens on inventory or accounts receivables) on any of their
assets now or hereafter owned, other than:
(a) liens existing on the date hereof as set forth on Schedule
IV attached hereto which liens are not to be renewed, extended or
refinanced;
(b) deposits under workmen's compensation, unemployment
insurance and social security laws, or to secure the performance of
bids, tenders, contracts (other than for the repayment of borrowed
money) or leases or to secure statutory obligations or surety, appeal
bonds or discharge of lien bonds, or to secure indemnity, performance
or other similar bonds in the ordinary course of business;
(c) statutory liens of landlords and other liens imposed by law,
such as carriers', warehousemen's or mechanic's liens, incurred in good
faith in the ordinary course of business and deposits made or bonds
filed in the ordinary course of business to obtain the release of such
liens;
(d) liens for taxes not yet due, or liens for taxes contested
as permitted by Section 5.02;
(e) any other liens granted to the Bank, and
(f) debt secured by purchase money mortgages or other
encumbrances on after acquired property, provided that the principal
amount of all such secured debt does not exceed 10% of the Borrower's
tangible net worth plus Subordinated Debt approved by the Bank in
writing.
SECTION 6.02. Guarantees, Etc. Assume, guarantee, endorse or otherwise
be or become directly or contingently responsible or liable (including, but
not limited to, an agreement to purchase any obligation, stock, assets, goods
or services or to supply or advance any funds, assets, goods or services, or
any agreement to maintain or cause such
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Person to maintain a minimum working capital or net worth or otherwise to
assure the creditors of any Person against loss) for the obligations of any
Person ("Guarantee"), or permit any of its Subsidiaries to do so, (i) except
Guarantees by endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business, and (ii) except
Guarantees of obligations aggregating not more than 10% of the amount of its
tangible net worth (excluding, however, from such calculation Raymond's
guarantee of Raymond Leasing's 8.86% Senior Notes due November 27, 1997) from
time to time, which Guarantee obligations shall be included in current
liabilities, total liabilities or funded debt, as appropriate, depending on
the terms of the guaranteed obligations.
SECTION 6.03. Sale of Notes. Sell, transfer, discount or otherwise
dispose of notes, accounts receivable or other rights to receive payment
with or without recourse, except for the purpose of collection in the
ordinary course of business.
SECTION 6.04. Investments. Make investments, lend or advance money,
purchase or hold beneficially any stock, other securities, or evidences of
indebtedness of, purchase or acquire all or a substantial part of the assets
of, make or permit to exist any interest whatsoever in, any other Person,
other than as set forth in Section 6.12 hereof, except that the Borrower may
invest in:
(a) direct obligations of the United States of America or
obligations guaranteed by the United States of America, provided that
such obligations mature within one year from the date of acquisition
thereof, or
(b) time certificates of deposit issued by any commercial bank
organized and existing under the laws of the United States or any
state thereof and having aggregate capital and surplus in excess of
$500,000,000; or
(c) commercial paper rated not less than A-1 or P-1 or their
equivalent by Moody's Investor Services, Inc. or Standard & Poor's
Corporation, respectively; or
(d) money market mutual funds having assets in excess of two
billion dollars;
(e) advances to and/or investments in Subsidiaries that guaranty
all Loans on terms satisfactory to the Bank;
(d) Capitalized Lease Obligations under which Raymond Leasing is
the lessor, entered into by Raymond Leasing in the ordinary course of
its equipment leasing business; and
(g) advances or investments by Raymond in Unconsolidated
Investees made after December 31, 1994 aggregating up to 15% of
tangible net worth plus Subordinated Debt approved by the Bank in
writing, or
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(h) advances and/or investments in any Person (other than
permitted above), whether by acquisition of stock, indebtedness, other
obligation or security, or by loan, advance, capital contribution, or
otherwise so long as (i) the sum of such acquisition, advance or
investment (valued immediately after such action) made after December
31, 1994 does not exceed 10% of the Borrowers tangible net worth plus
Subordinated Debt approved by the Bank in writing, (ii) a Default or
an Event of Default under this Agreement would not exist, and (iii)
the Borrowers could incur at least $1.00 of additional Senior
Indebtedness.
SECTION 6.05. Change in Business. Materially change or alter the nature
of its business from the business currently engaged in.
SECTION 6.06. Dividends. Declare or pay any cash dividend on its
capital stock or make any other distribution with respect to its capital stock
(other than distributions in accordance with Section 6.11 hereof) or redeem,
retire, purchase or otherwise acquire, directly or indirectly, for value or
set apart any sum for the redemption, retirement, purchase or other
acquisition of, directly or indirectly, any share of its capital stock or
warrants or options therefor except that: (a) the Borrower may declare and
deliver dividends and make distributions payable solely in common stock of the
Borrower; (b) the Borrower may purchase or otherwise acquire shares of its
capital stock by exchange for or out of the proceeds received from a
substantially concurrent issue of new shares of its capital stock; (c)
either Borrower may make or declare cash dividends with respect to the
capital stock of the Borrower unless immediately after giving effect thereto,
the sum of such cash dividends would not exceed the sum of 50% of cumulative
net income (minus 100% of any net loss) subsequent to December 31, 1993, plus
$2,000,000 for Raymond and $1,000,000 for Raymond Leasing. In addition,
neither Borrower will authorize or make any cash dividends if, after giving
effect thereto, a Default or Event of Default would exist or if the Borrower
could not incur at east $1.00 of additional Senior Indebtedness.
SECTION 6.07. Subordinated Debt. Make any optional prepayment of, or
purchase, redeem or otherwise acquire, or amend any provision in respect of
the subordination or the terms of payment of any Subordinated Debt except such
Subordinated Debt may be converted in part or in full to equity.
SECTION 6.08. Accounting Policies and Procedures. Permit any material
change in the accounting policies and procedures of the Borrower, other than
as required by generally accepting accounting principles, including a change
in the Borrower's fiscal year, without the prior consent of the Bank.
SECTION 6.09. Stock of Subsidiaries, Etc. (a) Sell or otherwise dispose
of any shares of capital stock of any of its Subsidiaries, or (b) permit any
such Subsidiary to issue any additional shares of its capital stock, except as
permitted by Section 6.06, and except for directors' qualifying shares.
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SECTION 6.10. Transactions with Affiliates. Enter into any
transaction, including, without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any Affiliate or permit any of
its Subsidiaries to enter into any transaction, including, without limitation,
the purchase, sale or exchange of property or the rendering of any service,
with any Affiliate, except in the ordinary course of and pursuant to the
reasonable requirements of the Borrower's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to the Borrower or such
Subsidiary than it would obtain in a comparable arm's length transaction with
a Person not an Affiliate.
SECTION 6.11. Merger or Consolidation or Sales of Assets. Neither
Borrower will and will not permit a Subsidiary to, become a party to any
merger or consolidation or sell, lease, assign or otherwise dispose of 10% or
more of its consolidated assets in any fiscal year or assets which have
accounted for 10% or more of Consolidated Adjusted Net Income in the fiscal
year (except that any Subsidiary may merge into or consolidate with either
Borrower or another Subsidiary so long as the Borrower would be the surviving
corporation) unless immediately thereafter (1) the Borrower would be the
surviving corporation or (2) the surviving corporation would be (i) organized
under the laws of the United States, (ii) would be engaged in the same line of
business as Borrower, (iii) the surviving corporation expressly assumes, in
writing, the due and punctual payment of the principal and interest and
premium, if any, on the Loans and the due and punctual performance and
observance of all covenants and, (3) in the case of Leasing, Raymond expressly
acknowledges such merger or consolidation and the continuing validity of the
Operating Agreement; provided, however, that in any case, no Event of Default
or Default would exist under the covenants contained in this Agreement and the
Borrower would be able to issue at least $1.00 of additional Senior
Indebtedness.
SECTION 6.12. Restrictions on Leases of Equipment. Raymond Leasing
shall not, and shall not permit any Subsidiary to, at any time permit the
aggregate original cost of all equipment at any time subject to a lease and
manufactured or sold by a Person other than Raymond to exceed 15% of the
aggregate original cost of all equipment at such time subject to a lease
provided, however, that for purposes of this Section, batteries and chargers
shall be deemed to be equipment manufactured by Raymond.
SECTION 6.13. The Raymond Corporation Subsidiaries. Raymond shall not
enter into any agreement or other arrangement, or take or permit its
Subsidiaries to take any action, which would limit is ability to receive loans
or dividends from any of its Subsidiaries other than Raymond Leasing, or would
limit the ability of such Subsidiaries to make such loans or pay such
dividends.
VII. FINANCIAL COVENANTS - THE RAYMOND CORPORATION
So long as any of the Notes shall remain unpaid or the Bank shall have
any Commitment under this Agreement, Raymond agrees that it shall, at all
times, with respect
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to (i) itself, (ii) its existing consolidated Subsidiaries other than Raymond
Leasing and (iii) any Subsidiaries that become consolidated Subsidiaries after
the date of this Agreement:
SECTION 7.01. Minimum Working Capital. Maintain Raymond Working
Capital of not less than $45,000,000.
SECTION 7.02. Minimum Tangible Net Worth. Maintain a tangible net
worth of not less than $42,000,000 plus 50% of its net income earned
subsequent to December 31, 1993.
SECTION 7.03. Leverage Ratio. Maintain a ratio of total unsubordinated
liabilities to tangible net worth of not greater than 1.25 to 1.00.
SECTION 7.04. Interest Coverage Maintain. as of the end of each
calendar quarter a ratio of EBITDA for the four calendar quarter period then
ended, to interest expense for such period of not less than 2.25 to 1.0.
SECTION 7.05. Loss Quarters. Not have a net loss in two (2)
consecutive calendar quarters or in any fiscal year.
VII-A. FINANCIAL COVENANTS - RAYMOND LEASING
So long as any of the Notes shall remain unpaid or the Bank shall have
any Commitment under this Agreement, Raymond Leasing agrees that it shall, at
all times:
SECTION 7A.01. Minimum Tangible Net Worth. Maintain a tangible net
worth of not less than $20,000,000, plus 50% of its net income earned
subsequent to December 31, 1993.
SECTION 7A.02. Leverage Ratio. Maintain a ratio of Senior Indebtedness
to tangible net worth of not greater than 3.0 to 1.0.
SECTION 7A.03. Interest Coverage. Maintain as of the end of each
calendar quarter a ratio of EBITDA for the four calendar quarter period then
ended, to interest expense for such period of not less than 1.3 to 1.00.
SECTION 7A.04. Loss Quarter. Not incur a net loss in two (2)
consecutive calendar quarters or in any fiscal year.
SECTION 7A.05. Working Capital. Maintain a Working Capital of not less
than $0.
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VII-B FINANCIAL COVENANTS - CONSOLIDATED
So long as any of the Notes shall remain unpaid or the Bank shall have
any Commitment under this Agreement, the Borrowers agree that they shall, at
all times, with respect to (i) themselves, (ii) their existing consolidated
Subsidiaries, and (iii) any Subsidiaries that become consolidated
Subsidiaries after the date of this Agreement:
SECTION 7B.01. Minimum Tangible Net Worth. Maintain at all times a
Consolidated Tangible Net Worth of not less than $65,000,000, plus 50% of
their consolidated net income earned subsequent to December 31, 1993.
SECTION 7B.02. Leveraae Ratio. Maintain at all times a ratio of
Consolidated Total Unsubordinated Liabilities to Consolidated Tangible Net
Worth of not greater than 1.50 to 1.00.
SECTION 7B.03. Interest Coverege. Maintain as of the end of each
calendar quarter a ratio of consolidated EBITDA for the four calendar quarter
period then ended, to Consolidated Interest Expense for such period of not
less than 2.00 to 1.00.
SECTION 7B.04. Consolidated Losses. Not incur consolidated net losses
in two (2) consecutive calendar quarters or in any fiscal year.
VIII. EVENTS OF DEFAULT
SECTION 8.01. Events of Default. In the case of the happening of any
of the following events ("Events of Default"):
(a) default shall occur (i) in the payment of the principal or
interest on any of the Notes or Loans when due or (ii) in the payment
of any fees or other amounts due hereunder within five (5) days after
such fees or other amounts become due in accordance herewith;
(b) any representation or warranty herein or in any of the Loan
Documents, in any certificate or report furnished in connection
herewith or in any amendment to this Agreement, shall prove to be
false or misleading in any material respect when made or given or
deemed made or given;
(c) default shall be made in respect of any agreement or
obligation relating to any obligation of the Borrowers or their
Subsidiaries for borrowed money (other than the Notes), if the effect
of such default or the result of any action by the obligee is to
accelerate the maturity of such obligation or to permit the holder or
obligee thereof (or a trustee on behalf of such holder or obligee) to
cause such obligation to become due prior to the stated maturity
thereof or which, with the passage of time, the giving of notice or
both would constitute an event of default
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under any agreement, or any such obligation shall not be paid
when due after giving effect to any applicable grace period;
(d) default shall be made in the due observance or
performance of any covenant, condition or agreement to be performed
pursuant to Article VI of this Agreement;
(e) default shall be made in the due observance or
performance of any covenant, condition or agreement to be performed
pursuant to this Agreement other than as described in (d) above which
shall continue unremedied for more than ten (10) days;
(f) (i) default shall be made in the due observance or
performance of any covenant, condition or agreement of the Borrowers
to be performed pursuant to the Loan Documents (other than this
Agreement) and not cured within any applicable grace period or (ii)
any of the Loan Documents (other than this Agreement), shall cease to
be in full force and effect or shall be declared to be null and void,
or the validity or enforceability thereof shall be contested or any
party thereto shall deny that it has any further liability to the
Bank with respect thereto;
(g) either Borrower or any of its Subsidiaries shall (i)
voluntarily commence any case, proceeding or other action or file any
petition seeking relief under Title 11 of the United States Code or
any other existing or future Federal domestic or foreign bankruptcy,
insolvency or similar law, (ii) consent to the institution of, or
fail to controvert in a timely and appropriate manner, any such
proceeding or the filing of any such petition, (iii) apply for or
consent to the employment of a receiver, trustee, custodian,
sequestrator or similar official for the Borrower or any of its
Subsidiaries or for a substantial part of its property, (iv) file an
answer admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they become due or
(vii) take corporate action for the purpose of effecting any of the
foregoing;
(h) an involuntary case, proceeding or other action shall be
commenced or an involuntary petition shall be filed in a court of
competent jurisdiction seeking (i) relief in respect of the Borrower
or any of its Subsidiaries or of a substantial part of its property,
under Title 11 of the United States Code or any other existing or
future Federal, domestic or foreign bankruptcy, insolvency or similar
law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator or similar official for the Borrower or any Subsidiary
or for a substantial part of their property, or (iii) the winding-up
or liquidation of the Borrower or any Subsidiary; and such proceeding
or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall continue
unstayed and in effect for 60 days;
-41-
<PAGE>
(i) there shall be commenced against the Borrower or any of
its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not
have been vacated, discharged or stayed or bonded pending appeal
within sixty (60) days from the entry thereof;
(j) one or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $500,000 or
more and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof and have not been reserved for on Borrowees financial
statements and which are not actually being contested in good faith
in appropriate proceeding;
(k) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan, or any lien shall arise
on the assets of the Borrower or any Commonly Controlled Entity in
favor of the PBGC or a Plan (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed,
or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion
of the Bank, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Company or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Bank is likely to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist, with respect
to a Plan; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or conditions,
if any, could subject the Borrower or any of its Subsidiaries to any
tax, penalty or other liabilities in the aggregate material in
relation to the business, operation, property or financial or other
condition of the Borrower or any of its Subsidiaries and its
Subsidiaries taken as a whole;
(1) Raymond shall at any time and for any reason cease to own
beneficially 100% of the outstanding capital stock of Raymond
Leasing;
then, at any time thereafter during the continuance of any such event, the
Bank may, by written notice to the Borrowers (i) terminate the Commitment,
Revolving Credit Loans and the Term Loan(s) and, (ii) declare the Notes to be
forthwith due and payable, both as to principal and interest, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived, anything contained herein or in the Notes to the
contrary notwithstanding, provided, however, that if an event specified in
- 42 -
<PAGE>
Section 8.01(g) or (h) hereof shall have occurred, the Commitment, Revolving
Credit Loans and Term Loan(s) shall automatically terminate and the Notes
shall immediately become due and payable, and the Bank in each instance shall
have the right to exercise its rights under the Loan Documents as permitted by
law.
IX. MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications
provided for hereunder shall be in writing and shall be deemed to have been duly
given or made when delivered by hand or facsimile at the address set forth
below, or if sent by certified mail, three days after the day on which mailed,
or, in the case of telex, when answer back received, or, in the case of an
overnight courier service, one business day after delivery to such courier
service, addressed as set forth below, or to such other address as may be
hereafter notified by the respective parties hereto:
(a) if to the Bank, at
The Chase Manhattan Bank, N.A.
Two Court Street
P.O. Box 700
Binghamton, New York 13902-0700
Attention: John R. Staller, III
Fax #: 607 772-2773
(b) if to the Borrowers, at
Mr. William B. Lynn, Executive Vice President
The Raymond Corporation
Mr. Patrick J. McManus, President
Raymond Leasing Corporation
Corporate Headquarters
Greene, NY 13778
Fax #: 607-656-9942
(c) as to each such party at such other address as such party
shall have designated to the other in a written notice
complying as to delivery with the provisions of this
Section 9.01.
SECTION 9.02. Survival of Agreement; Successors and Assigns. (a) All
covenants, agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the making by the Bank of
the Loans herein contemplated and the execution and delivery to the Bank of the
Notes evidencing such Loans and shall continue in full force and effect so long
as the Notes are outstanding and unpaid or the Commitment is outstanding.
- 43 -
<PAGE>
(b) Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include (i) the successors and assigns
of such party; (ii) all covenants, promises and agreements by or on behalf of
the Borrower which are contained in this Agreement shall bind and inure to
the benefit of the respective successors and assigns of the Bank; and (iii)
no other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with this
Agreement or any of the other Loan Documents. The Bank shall not have any
obligation to any Person not a party to this Agreement or other Loan
Documents.
SECTION 9.03. Expenses of the Bank: Indemnification.
(a) The Borrowers will pay all reasonable out-of-pocket costs and
expenses incurred by the Bank in connection with the preparation, development
and execution of the Loan Documents and any amendment, supplement or
modificaton to this Agreement, the Notes and the other Loan Documents
including, without limitation, the fees and disbursements of counsel to the
Bank (including, without limitation, allocation of the cost of in-house
counsel to the Bank whether or not the transactions hereby contemplated shall
be consummated), the making of the Loans hereunder, the costs and expenses
incurred in connection with the enforcement or preservation of any rights of
the Bank under this Agreement, the Notes and the other Loan Documents or in
connection with the Loans, including, without limitation, fees and
disbursements of counsel to the Bank (including, without limitation,
allocation of the cost of in-house counsel to the Bank).
(b) The Borrowers agree to indemnify the Bank and its respective
directors, officers, employees and agents against, and to hold the Bank and
each such person harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees and
expenses, incurred by or asserted against the Bank or any such person arising
out of, in any way connected with, or as a result of (i) the use of any of
the proceeds of the Loans, (ii) this Agreement or other Loan Documents, (iii)
the performance by the parties hereto and thereto of their respective
obligations hereunder and thereunder (including but not limited to the making
of the Commitment) and consummation of the transactions contemplated hereby
and thereby, (iv) breach of any representation or warranty or (v) any claim,
litigation, investigation or proceedings relating to any of the foregoing,
whether or not the Bank or any such person is a party thereto; provided,
however, that such indemnity shall not, as to the Bank, apply to any such
losses, claims, damages, liabilities or related expenses to the extent that
they result from the gross negligence or willful misconduct of the Bank.
(c) The Borrowers agree to indemnify, defend and hold harmless the
Bank and its respective officers, directors, shareholders, agents and
employees (collectively, the "Indemnities") from and against any loss, cost,
damage, liability, lien, deficiency, fine, penalty or expense (including,
without limitation, reasonable attorney's fees and reasonable expenses for
investigation, removal, cleanup and remedial costs and modification costs
incurred to permit, continue or resume normal operations of any property or
assets or business of the firm) arising from a violation of, or failure to
- 44 -
<PAGE>
comply with any Environmental Laws and to remove any lien arising therefrom
except to the extent caused by the gross negligence or willful misconduct of
any Indemnitee, which any of the Indemnities may incur or which may be claimed
or recorded against any of the Indemnities by any Person. (d) The provisions
of this Section 9.03 shall remain operative and in full force and effect
regardless of the expiration of the term of this Agreement, the consummation
of the transactions contemplated hereby, the repayment of any of the Loans,
the invalidity or unenforceability of any term or provision of this Agreement
or any of the Loan Documents, or any investigation made by or on behalf of the
Bank. All amounts due under this Section 9.03 shall be payable on written
demand therefor.
SECTION 9.04. Applicable Law. This Agreement, the Notes and the other
Loan Documents (other than those containing a contrary express choice of law)
shall be governed and construed by and interpreted in accordance with the laws
of the State of New York.
SECTION 9.05. Waiver of Rights by the Bank; Waiver of Jury Trial, etc.
(a) Neither any failure nor any delay on the part of the Bank in exercising
any right, power or privilege hereunder or under the Loan Documents shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any other right, power or privilege.
Except as prohibited by law, each party hereto hereby waives any fight it may
have to claim or recover in any litigation referred to in this Section any
special, exemplary, punitive or consequential damages or any damages other
than, or in addition to, actual damages. Each party hereto (i) certifies that
neither any representative, agent or attorney of the Bank has represented,
expressly or otherwise, that the Bank would not, in the event of litigation,
seek to enforce the foregoing waivers and (ii) acknowledges that it has been
induced to enter into this Agreement or the Loan Documents, as applicable, by,
among other things, the mutual waivers and certifications herein.
(b) THE BORROWERS AND THE BANK HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY
ISSUE, CLAIM OR ACTION IN ANY WAY, INVOLVING OR ARISING, DIRECTLY OR
INDIRECTLY, OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
SECTION 9.06. Acknowledgments. The Borrowers hereby acknowledge that:
(a) each has been advised by counsel in the negotiation,
execution and delivery of this Agreement, the Notes and the other Loan
Documents;
- 45 -
<PAGE>
(b) the Bank does not have any fiduciary relationship with the
Borrower and the relationship between the Bank, on one hand, and the
Borrower, on the other hand, is solely that of debtor and creditor;
and
(c) no joint venture exists between the Borrower and the
Bank.
SECTION 9.07. Consent to Jurisdiction. (a) The Borrowers hereby
irrevocably submit to the non-exclusive jurisdiction of any United States
federal or New York state court sifting in New York City in any action or
proceedings arising out of or relating to any Loan Documents and the
Borrowers hereby irrevocably agree that all claims in respect of such action
or proceeding may be heard and determined in any such court and irrevocably
waives any objection it may now or hereafter have as to the venue of any such
action or proceeding brought in such a court or the fact that such court is
an inconvenient forum.
(b) The Borrowers irrevocably and unconditionally consent to the
service or process in any such action or proceeding in any of the aforesaid
courts by the mailing of copies of such process to it by certified or
registered mail at its address specified in Subsection 9.01.
SECTION 9.08. Extension of Maturity. Except as otherwise expressly
provided herein, whenever a payment to be made hereunder shall fall due and
payable on any day other than a Business Day, such payment may be made on the
next succeeding Business Day, and such extension of time shall be included in
computing interest.
SECTION 9.09. Modification of Agreement. No modification, amendment or
waiver of any provision of this Agreement or the Notes, nor consent to any
departure by the Borrowers or any of their Subsidiaries therefrom shall in
any event be effective unless the same shall be in writing and signed by the
Bank and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on the
Borrowers or any of their Subsidiaries in any case shall entitle the
Borrowers or any of their Subsidiaries, as the case may be, to any other or
further notice or demand in the same, similar or other circumstance.
SECTION 9.10. Participations and Assignments. (a) Neither Borrower
may assign or transfer any of its interests under this Agreement, the Notes
or the Loan Documents.
(b) The Bank reserves the right to grant participations in or to sell
and assign its rights, duties or obligations with respect to the Loans or the
Commitment to such banks, lending institutions or other parties as it may
choose, including, without limitation, any Federal Reserve Bank in accordance
with applicable law and without the consent of the Borrower, which consent is
deemed to be granted.
SECTION 9.11. Reinstatement; Certain Payments. If claim is ever made
upon the Bank for repayment or recovery of any amount or amounts received by
the Bank in payment or on account of any of the obligations under this
Agreement, the Bank shall give
- 46 -
<PAGE>
prompt notice of such claim to the Borrower, and if the Bank repays all or
part of said amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over the Bank or any of its
property, or (ii) any settlement or compromise of any such claim effected by
the Bank with any such claimant, then and in such event such Borrower agrees
that any such judgment, decree, order, settlement or compromise shall be
binding upon such Borrower notwithstanding the cancellation of the Notes or
other instrument evidencing the obligations under this Agreement or the
termination of this Agreement, and such Borrower shall be and remain liable to
the Bank hereunder for the amount so repaid or recovered to the same extent as
if such amount had never originally been received by the Bank.
SECTION 9.12. Right of Setoff. In addition to any rights and remedies
of the Bank provided by law, the Bank is hereby authorized at any time and
from time to time, without prior notice to the Borrowers (any such notice
being expressly waived by the Borrowers) to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by the Bank to or for the credit or the account of the Borrowers
against any and all of the obligations of the Borrowers now and hereafter
existing under this Agreement and the Note held by the Bank, irrespective of
whether or not the Bank shall have made any demand under this Agreement or the
Note and although such obligations may be in any currency, direct or indirect,
absolute or contingent, matured or unmatured. The Bank agrees to promptly
notify the Borrowers after any such setoff and application made by the Bank,
but the failure to give such notice shall not affect the validity of such
setoff and application. The rights of the Bank under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which the Bank may have.
SECTION 9.13. Severability. In case any one or more of the provisions
contained in this Agreement or in the Notes should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby.
SECTION 9.14. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument.
SECTION 9.15. Entire Agreement; Cumulative Remedies.
(a) This Agreement and the other Loan Documents constitute the entire
agreement among the parties hereto and thereto as to the subject matter hereof
and thereof and supersede any previous agreement, oral or written, as to such
subject matter.
(b) The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
- 47 -
<PAGE>
SECTION 9.16. Headings. Section headings used herein are for
convenience of reference only and are not to affect the construction of or be
taken into consideration in interpreting this Agreement.
SECTION 9.17. Exhibits and Schedules. Exhibits A, A-1, B and C and
Schedules I through IV shall constitute an integral part of this Agreement.
- 48 -
<PAGE>
IN WITNESS WHEREOF, the Borrowers and the Bank have caused this
Agreement to be duly executed by their duly authorized officers, all of the
day and year first above written.
RAYMOND LEASING CORPORATION
By: William Lynn
-------------------------
Title: Treasurer
THE RAYMOND CORPORATION
By: William Lynn
--------------------------
Title: Executive Vice President
THE CHASE MANHATTAN BANK, N.A.
By: Jeffery Lake
---------------------------
Vice President
- 49 -
<PAGE>
SCHEDULE I
----------
Notice of Borrowing (or Conversions)
------------------------------------
To: The Chase Manhattan Bank, N.A. Dated: February , 1995
Reference is made to the Revolving Credit and Term Loan Agreement dated
February _, 1995 (the "Agreement") between THE CHASE MANHATTAN BANK, N.A. (the
"Bank") and THE RAYMOND CORPORATION AND RAYMOND LEASING CORPORATION. Unless
otherwise defined herein, the terms defined in the Agreement are used herein
as so defined.
The undersigned, an authorized officer of _______________ (the
"Borrower") hereby requests that a Loan be made to Borrower and certifies in
accordance with the provisions of Section 2.01 or 2.04 of the Agreement
as follows:
1 . The requested date for the funding of such Loan is _____________.
The Loan shall be a (Revolving Credit Loan) (Term Loan with a term
of _____ years).
The amount of the proposed Loan is $__________ and the outstanding
balances of all Loans, after giving effect to the proposed Loan, will be as
follows, which sums are and will be owed to the Bank without any offsets or
defenses whatsoever:
A. Loans under Section 2.01 made by Bank:
Borrower Balance
-------- -------
The Raymond Corporation $_______________
Raymond Leasing Corporation $_______________
Total $_______________
B. Loans made under Section 2.04 made by Bank:
Borrower Balance
-------- -------
The Raymond Corporation $_______________
Raymond Leasing Corporation $_______________
Total $_______________
- 50 -
<PAGE>
2. The Borrower hereby elects in accordance with Section 2.03, 2.07,
2.08, 2.09 or 2.10 of the Agreement, that ______________ of the Loan being
requested shall be a ____________ Rate Loan.
3. The amount requested should be credited to checking account number
____________ which is currently maintained with your Bank. (Not to be
completed in cases ofconversion. Instead, conversions should read, "The
amount requested to be converted is $________.
4. No Default or Event of Default has occurred or would result from
such Loan.
5. No Material Adverse Change has occurred.
6. The representations and warranties contained in Article III of the
Agreement are true and correct on and as of the date of this Certificate, and
will be true and correct on and as of the date of the requested Loan, as
though made on and as of such dates. With respect to Section 3.03, all
additional borrowings and repayments under existing credit arrangements have
been adequately reflected in Borrower's financial statements. With respect to
Section 3.12, there have been no material developments which increase
Borrower's environmental exposure.
THE RAYMOND CORPORATION
or RAYMOND LEASING
CORPORATION, as appropriate
By:_____________________________________
Title:
- 51 -
<PAGE>
SCHEDULE II
-----------
SUBSIDIARIES OF THE RAYMOND CORPORATION (a)
-------------------------------------------
<TABLE>
<CAPTION>
Percentage of State or Other
Voting Securities Jurisdiction in
Owned Which Organized
------------------------------------------------
<S> <C> <C>
Dockstocker Corporation 100(b) New York
(Subsidiary of Raymond Sales Corporation)
Heubel Material Handling, Inc. 94(c) Missouri
(Subsidiary of Raymond Sales Corporation)
The Raymond Export Corporation 100(b) U.S. Virgin Islands
Raymond Handling Concepts Corporation 74(c) California
(Subsidiary of Raymond Sales Corporation)
R.H.E. Ltd. 100(b) Canada
Raymond Industrial Equipment, Limited 100(b) Canada
(Subsidiary of R.H.E. Ltd.)
Raymond Leasing Corporation 100(b) Delaware
Raymond Production Systems Corporation 100(b) California
Raymond Rental Corporation 100(b) New York
(Subsidiary of Raymond Leasing Corporation)
Raymond Sales Corporation 100(b) New York
Raymond Transportation Corporation 100(b) New York
Welch Equipment Company, Inc. 100(c) Colorado
Welch Equipment Company, Inc. (Utah) 100(c) Utah
(a) Unless otherwise noted, the Registrant is the Parent of the above listed company.
(b) Included in consolidated financial statements.
(c) Included in consolidated financial statements on an equity basis.
</TABLE>
<PAGE>
SCHEDULE III
------------
No Default Certificate
----------------------
To: The Chase Manhattan Bank, N. A.
Re: Revolving Credit and Term Loan Agreement with The Raymond Corporation
and Raymond Leasing Corporation.
Pursuant to the provisions of the Revolving Credit and Term Loan
Agreement dated February _, 1995 between The Chase Manhattan Bank, N.A. and
The Raymond Corporation and Raymond Leasing Corporation, the undersigned,
hereby certifies as the Chief Financial Officer of The Raymond Corporation and
Raymond Leasing Corporation as follows:
1. No Event of Default specified in Section 8 of the Revolving Credit
and Term Loan Agreement referred to above (the "Agreement") and no event
which, pursuant to the provisions of Section 8 of the Agreement would, with a
lapse of time and/or notice specified therein, become such an Event of
Default, has occurred or is continuing;
2. No Material Adverse Change has occurred in the financial condition
of either The Raymond Corporation or Raymond Leasing Corporation which would
impair the ability of either Corporation to carry on its business; and
3. The representations and warranties contained in Section 3 of the
Agreement continue to be true and correct.
THE RAYMOND CORPORATION
By:___________________
Title:
- 53 -
<PAGE>
SCHEDULE IV
-----------
List of Liens of Raymond
------------------------
NONE
List of Liens of Raymond Leasing
--------------------------------
NONE
<PAGE>
SCHEDULE V
----------
PERFORMANCE PRICING GRID
All amounts in basis points
<TABLE>
<CAPTION>
Revolving Credit Loans
----------------------
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------------
Leverage Test(l) TD/CF{2.5 2.5{TD/CF{3.0 3.0{TD/CF{4.0 TD/CF}4.0
- - -
----------------------------------------------------------------------------------------------------------------------------------
Margin Level I Level II Level III Level IV
----------------------------------------------------------------------------------------------------------------------------------
Eurodollar Rate Loans 90.00 100.00 110.00 120.00
----------------------------------------------------------------------------------------------------------------------------------
Prime Rate Loans 0 0 0 0
----------------------------------------------------------------------------------------------------------------------------------
Term Loans
----------
----------------------------------------------------------------------------------------------------------------------------------
Eurodollar Rate Loans 100.00 110.00 120.00 135.00
----------------------------------------------------------------------------------------------------------------------------------
Prime Rate Loans 0.00 0.00 10.00 25.00
----------------------------------------------------------------------------------------------------------------------------------
Treasury Rate Loans 110.00 110.00 110.00 125.00
----------------------------------------------------------------------------------------------------------------------------------
(1) The Leverage Test, which determines the Level for purposes of this
Pricing Grid, is the ratio of total Funded Debt to EBIT of the
Borrower. The ratio shall be measured at the end of each fiscal
quarter, for the four fiscal quarter period then ended. The ratio
as of any time shall be that set forth on the most recent
certificate submitted by the Borrower's chief financial officer
pursuant to Section 5.03(e)(iii); and the ratio established as of
the last day of one fiscal quarter shall determine the Level
pursuant to this Pricing Grid effective on the first day of the
fiscal quarter following the date on which such certificate is
delivered, and shall remain in effect for the entire such fiscal
quarter. However, the foregoing notwithstanding, the Level
determined pursuant to this Pricing Grid shall be Level III
through July 31, 1995; and beginning August 1, 1995, the Level
shall be determined as described above. (For example, for the
period from August 1, 1995 through September 30, 1995, the Level
shall be determined pursuant to the chief financial officer's
certificate for the fiscal quarter ending March 31, 1995.)
</TABLE>
- 55 -
<PAGE>
EXHIBIT A
---------
REVOLVING CREDIT NOTE
$15,000,000 Binghamton, New York
February _, 1995
FOR VALUE RECEIVED, the undersigned, THE RAYMOND CORPORATION, a New York
corporation (the "Borrower's), DOES HEREBY PROMISE to pay to the order of THE
CHASE MANHATTAN BANK, N.A. (the "Bank"), at the office of the Bank at 2 Court
Street, Binghamton, New York 13901 on the Termination Date as defined in the
Revolving Credit and Term Loan Agreement (the "Agreement") dated as of February
_, 1995 among the Borrower, Raymond Leasing Corporation and the Bank, in lawful
money of the United States of America, in immediately available funds, the
principal amount of Fifteen Million Dollars ($15,000,000) or, if less than
such principal amount, the aggregate unpaid principal amount of all Revolving
Credit Loans (as defined in Section 2.01 of the Agreement) made by the Bank to
the Borrower pursuant to the Agreement as shown on the grid schedules annexed
hereto, and to pay interest from the date hereof on the unpaid principal amount
hereof, in like money, at said office, on the dates and at the rates selected
in accordance with Article II of the Agreement and, upon default, on demand
from time to time, on any overdue principal and on any overdue charge or fee,
and, to the extent permitted by law, on any overdue interest, for each day from
the due date thereof (by acceleration or otherwise) until such sum is paid in
full, at the rate in effect from time to time as described in Section 2.15(b)
of the Agreement.
The obligations of the Borrower in regard to payment of the Loans
hereunder are several not joint with the Raymond Leasing Corporation, it being
expressly agreed and understood that Borrower shall be liable to the Bank for
only the Loans and interest accruing thereon made to Borrower. Notwithstanding
the foregoing, Borrower and Raymond Leasing Corporation shall be jointly and
severally liable for any commitment or facility fees, increased costs,
indemnities and expenses under the Agreement and for the performance of the
terms and conditions of the Agreement. Loans incurred by Raymond Leasing under
the Agreement shall reduce amounts available under the Agreement and this Note
for borrowings by Borrower.
This Revolving Credit Note is the Revolving Credit Note referred to in
Section 2.02 of the Agreement, and is subject to prepayment and acceleration of
maturity as set forth in the Agreement. All terms defined in the Agreement are
used herein with their defined meanings unless otherwise provided.
All Revolving Credit Loans made by the Bank to the Borrower under the
Agreement and the applicable rates and Interest Periods (as defined in the
Agreement) together with all payments or prepayments of principal shall be
recorded by the Bank and endorsed on the grid schedule or grid schedules
attached hereto and hereby made a part of this Revolving Credit Note.
This Note shall be governed by and construed in accordance with the
laws of the State of New York and any applicable laws of the United States of
America.
THE RAYMOND CORPORATION
By:____________________________
Title:
- 56 -
<PAGE>
EXHIBIT A-1
-----------
REVOLVING CREDIT NOTE
$15,000,000 Binghamton, New York
February _, 1995
FOR VALUE RECEIVED, the undersigned, RAYMOND LEASING CORPORATION, a
Delaware corporation (the "Borrower's), DOES HEREBY PROMISE to pay to the order
of THE CHASE MANHATTAN BANK, N.A. (the "Bank"), at the office of the Bank at 2
Court Street, Binghamton, New York 13901 on the Termination Date as defined in
the Revolving Credit and Term Loan Agreement (the "Agreement") dated as of
February _, 1995 among the Borrower, The Raymond Corporation and the Bank, in
lawful money of the United States of America, in immediately available funds,
the principal amount of Fifteen Million Dollars ($15,000,000) or, if less than
such principal amount, the aggregate unpaid principal amount of all Revolving
Credit Loans (as defined in Section 2.01 of the Agreement) made by the Bank to
the Borrower pursuant to the Agreement as shown on the grid schedules annexed
hereto, and to pay interest from the date hereof on the unpaid principal amount
hereof, in like money, at said office, on the dates and at the rates selected in
accordance with Article II of the Agreement and, upon default, on demand from
time to time, on any overdue principal and on any overdue charge or fee, and, to
the extent permitted by law, on any overdue interest, for each day from the due
date thereof (by acceleration or otherwise) until such sum is paid in full, at
the rate in effect from time to time as described in Section 2.15(b) of the
Agreement.
The obligations of the Borrower in regard to payment of the Loans
hereunder are several not joint with The Raymond Corporation, it being expressly
agreed and understood that Borrower shall be liable to the Bank for only the
Loans and interest accruing thereon made to Borrower. Notwithstanding the
foregoing, Borrower shall be jointly and severally liable for any commitment or
facility fees, increased costs, indemnities and expenses under the Agreement and
for the performance of the terms and conditions of the Agreement. Loans incurred
by The Raymond Corporation under the Agreement shall reduce amounts available
under the Agreement and this Note for borrowings by Borrower.
This Revolving Credit Note is the Revolving Credit Note referred to in
Section 2.02 of the Agreement, and is subject to prepayment and acceleration of
maturity as set forth in the Agreement. All terms defined in the Agreement are
used herein with their defined meanings unless otherwise provided.
All Revolving Credit Loans made by the Bank to the Borrower under the
Agreement and the applicable rates and Interest Periods (as defined in the
Agreement) together with all payments or prepayments of principal shall be
recorded by the Bank and endorsed on the grid schedule or grid schedules
attached hereto and hereby made a part of this Revolving Credit Note.
This Note shall be governed by and construed in accordance with the laws
of the State of New York and any applicable laws of the United States of
America.
RAYMOND LEASING CORPORATION
By:___________________________________
Title:
- 57 -
<PAGE>
EXHIBIT B
---------
TERM NOTE
$ Binghamton, New York
February _, 1995
FOR VALUE RECEIVED, the undersigned, ________________________________,
a ____________________ corporation (the "Borrower"), DOES HEREBY PROMISE to
pay to the order of THE CHASE MANHATTAN BANK, N.A. (the "Bank"), at the office
of the Bank at 2 Court Street, Binghamton, New York 13901 in lawful money of
the United States of America, in immediately available funds, the principal
amount of ____________ ($______ ) in ___ equal consecutive quarterly calendar
installments payable on the last day of each calendar quarter commencing on
____________ and on the dates described in the Revolving Credit and Term Loan
Agreement ("Agreement") dated as of February __, 1995 between the Borrower and
the Bank, and to pay interest from the date hereof on the unpaid principal
amount hereof, in like money, at said office, on the dates and at the rates
selected in accordance with Article II of the Agreement and, upon default, on
demand from time to time, on any overdue principal and on any overdue charge
or fee, and, to the extent permitted by law, on any overdue interest, for each
day from the due date thereof (by acceleration or otherwise) until such sum is
paid in full, at the rate in effect from time to time as described in Section
2.15(b) of the Agreement.
This Term Note is the Term Note referred to in Section 2.05 of the
Agreement, and is subject to prepayment and acceleration of maturity as set
forth in the Agreement. All terms defined in the Agreement are used herein with
their defined meanings unless otherwise provided.
The Term Loan made by the Bank to the Borrower under the Agreement and
the applicable rates and Interest Periods (as defined in the Agreement)
together with all payments or prepayments of principal shall be recorded by the
Bank and endorsed on the grid schedule or grid schedules attached hereto and
hereby made a part of this Term Note.
This Note shall be governed by and construed in accordance with the laws
of the State of New York and any applicable laws of the United States of
America.
[BORROWER]
By:________________________
Title:
- 58 -
<PAGE>
GRID SCHEDULE
-------------
DATE TYPE INTEREST AMOUNT
---- ---- -------- ------
MATURITY
--------
- 59 -
<PAGE>
Exhibit 10.10
AGREEMENT made as of this 17 day of December, 1994 between
LEE J. WOLF (hereinafter called "Wolf") and THE RAYMOND CORPORATION
(hereinafter called "Corporation"):
WHEREAS, Wolf, who has for many years served the Corporation
in the capacity of Vice President - Finance and Treasurer, attained
normal retirement age under the Corporation's retirement plan, and
retired effective March 31, 1980; and
WHEREAS, the Board of Directors considers it to be in the
best interest of the Corporation to induce Wolf to serve in the
capacity of an independent consultant in order to give the
Corporation and its management the continuing benefit of his
experience and knowledge; and
WHEREAS, Wolf is willing to make his services available to
the Corporation and its subsidiaries in such advisory capacity on
the terms and conditions hereinafter set forth,
IT IS THEREFORE AGREED, as follows:
(1) General
Wolf will make his services available to the
Corporation and to its subsidiaries as an independent consultant
with respect to financial matters and financial policy as well as to
the Corporation's subsidiary, Raymond Leasing Company, with
reference to its business and financial activities.
(2) Wolf agrees to make available thirty (30) working days in
each year during the term of this Agreement, it being understood
that he will be free to arrange his own time and pursuits and will
not be required to observe any routine or particular hours for the
performance of such services.
Wolf's working time for the performance of the
services hereunder shall be arranged by the parties hereto with
reasonable notice to Wolf who shall keep the Corporation informed
as to his availability.
<PAGE>
It is understood and agreed that such services shall
constitute those of an independent contractor; that Wolf's services
will be of an advisory nature only; that he will have no power of
decision with respect to any matters which are the subject of
consultation; and that he will not have or exercise any
responsibility in connection with the active management of the
Corporation.
(3) Term
The term of this Agreement is for one (1) year,
commencing on January 1, 1995 and ending on December 31, 1995.
(4) Compensation
The Corporation will pay to Wolf, and Wolf agrees to
accept for making himself available and for the performance of
services hereunder the sum of Six Thousand Dollars ($6,000) payable
upon receipt of invoices from Wolf.
The foregoing represents Wolf's entire compensation for
services to be performed under this Agreement. It is understood
that as an independent consultant, acting in an advisory capacity,
existing and usual employee fringe benefits are not available to
him. (5) Restrictive Covenant
Wolf expressly agrees as a condition of the performance
by the Corporation of its obligations hereunder that he will not
during the term of this Agreement, directly or indirectly render
any services of an advisory nature to, or become employed by, or
participate or engage in any business competitive with the business
of the Corporation or of its subsidiaries as an agent, director,
consultant or otherwise; provided, however, that nothing herein
contained shall prohibit Wolf from owning stock or other securities
of a competitor which are listed on an exchange. Wolf may, however,
render services or engage in business activities which do not
conflict with the purpose and intent of this paragraph, it being
understood that Wolf will use his best efforts to schedule such
other activities so as not to interfere with his availability under
this Agreement.
<PAGE>
(6) Miscellaneous
The Corporation will make available to Wolf such office
accommodation, secretarial and other assistance as may reasonably
be required by him in the performance of services hereunder.
Reasonable expenses incurred by Wolf in the performance of services
hereunder will be reimbursed by the Corporation upon presentation
of an account of such expenses.
(7) Effective Date
This Agreement shall become effective and binding upon
the parties as of the 1st day of January, 1995.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
THE RAYMOND CORPORATION
By: /s/ Ross K. Colquhoun
----------------------------------
Ross K. Colquhoun
President, C.E.O. &
Director
By: /s/ Lee J. Wolf
-----------------------------------
Lee J. Wolf
<PAGE>
Exhibit 10.11
CONSULTING AGREEMENT
THIS AGREEMENT has been made this 4th day of February, 1995,
by and between GEORGE G. RAYMOND, JR. ("Raymond"), a resident of
Naples, Florida, and THE RAYMOND CORPORATION, a New York
corporation having its place of business in Greene, New York
(hereinafter the "Company").
WHEREAS, the Company desires to retain the consulting
services of Raymond and Raymond desires to provide such services to
the Company in the manner and on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants, promises and agreements herein contained, and for
good and other valuable consideration, receipt of which is hereby
acknowledged, the parties do agree as follows:
1 . Defined Terms. The defined terms used in this Agreement
(as indicated by the first letter of each such term being
capitalized) shall, unless the context clearly requires otherwise,
have the meanings specified in this Paragraph 1. The singular shall
include the plural, and the masculine gender shall include the
feminine and neuter genders, as the context requires.
a. Agreement. This Consulting Agreement and any
properly adopted amendments thereto.
b. Board. The Board of Directors of the Company.
c . Change in Control. The happening of any of the
following events:
(1) the sale by the Company of substantially all
its assets to a single purchaser or to a group of affiliated
purchasers;
<PAGE>
(2) The sale, exchange or other disposition in one
transaction or a series of related transactions effectuated
pursuant to be common plan (including but not limited to
sales, exchanges or other dispositions made over a number of
years) of at least thirty percent (30%) of the outstanding
voting shares of the Company, but excluding (a) any exchange
occurring as a result of a recapitalization of the Company;
and (b) any exchange or disposition by any greater than 5%
shareholder (the "Shareholder") of his Common Stock to (i)
such Shareholder's spouse, or in trust for such spouse's
benefit with reversion to the Shareholder or remainder to or
in trust for the benefit of the Shareholder's issue; (ii) the
Shareholder's issue or in trust for the benefit of such issue
with reversion to the Shareholder or for the benefit of the
Shareholder's spouse or issue; or (iii) any person who on the
date of the lifetime transfer would be a beneficiary of the
Shareholder under the laws of intestacy of the state of the
Shareholder's domicile if the Shareholder died on such date
or any person who is such a beneficiary where the Shareholder
has died, whether such gift or bequest be outright or in
trust for the sole benefit of such person or such person's
issue; or
(3) the merger or consolidation of the Company in a
transaction in which the shareholders of the Company receive
less than 50% of the outstanding voting shares of the new
continuing corporation.
d. Disability. Raymond shall be deemed to have become
disabled for purposes of this Agreement if he is unable to perform
his duties hereunder by reason of physical or mental illness or
injury for a period of twenty-four (24) successive weeks. The
determination shall be made by a physician selected by the Company
and a physician selected by Raymond; provided, however, that if the
two physicians so selected shall disagree, they shall jointly
select a third physician and the decision of said third physician
shall be binding and conclusive absent a showing of fraud or gross
error on the part of the third physician.
2. Mutual Agreement of the Parties. The Company hereby agrees
to retain Raymond as a general business consultant and advisor with
respect to the operation of the Company, and Raymond hereby agrees
to perform such consulting services, for the period and on the
terms and conditions set forth in this Agreement.
<PAGE>
3. Services. The Company engages Raymond as an independent
contractor and not as an employee. Consultant's duties hereunder
shall be those of a general advisor to management pertaining to the
business of the Company and Raymond shall perform such services as
shall be reasonably assigned to him from time to time by the Chief
Executive Officer. Such duties shall be performed by Raymond either
at his residence in Naples, Florida, or at his summer residence in
Siasconset, Massachusetts. Raymond shall use his best efforts in
the performance of his duties hereunder and the advancement of the
interests of the Company. It is agreed between Raymond and the
Company that in rendering consulting services hereunder, Raymond
shall not be required to render such services under the supervision
of any employee of the Company or at the Company's place of
business, but rather will work independently toward the desired
objective in any manner he deems appropriate to the end that he
shall be responsible to the Company only for the end result of his
efforts and not for the method or manner by which such result is
achieved.
The Company recognizes that Raymond's associations, contacts,
experience and expertise developed over the years have created in
Raymond a marketplace advantage which is of unique value to the
Company and will enable it to expand upon its present operations
and make them more profitable during the term of this Agreement.
4. Compensation. As compensation for services to the Company
during the term of this Agreement, the Company shall pay Raymond
an annual fee of $101,200.00, payable in substantially equal
quarterly installments. The Company shall promptly reimburse
Raymond for all reasonable expenses incurred by him in connection
with the performance of his consulting responsibilities and duties.
5. Confidentiality. During the continuation of this
consulting relationship with the Company, and for the entire period
during which payments are being made pursuant to Paragraph 5
hereof, Raymond will not engage in, be employed by, be a Director
of or otherwise, directly or indirectly, interested in any business
or activity competing with or of a nature similar to the business
of the Company, and will not take part in any activities
detrimental to the best interest of the Company. However, nothing
herein contained shall be deemed to prohibit Raymond from
providing services to or serving as a Director for or otherwise
interested, directly or indirectly, in any business or activity
which is a parent, subsidiary, partnership, other affiliated entity
or successor to the Company; and nothing herein contained shall be
deemed to prohibit Raymond from owning less than one percent (1 %)
of the issued and outstanding capital stock of a corporation traded
on any public exchange. Any violation of this provision may, in the
Company's discretion, be deemed an act of gross misconduct.
<PAGE>
6. Termination. This Agreement shall terminate and expire on
December 31, 1995 except that this Agreement may sooner be
terminated:
a. At the Company's election in the event of gross
misconduct or willful and material breach of this Agreement by
Raymond;
b. At the election of Raymond at any time following a
Change in Control;
c. Upon Raymond's disability;
d. Upon Raymond's death;
e. Upon the mutual written consent of the parties.
7. Obligations on Termination. In the event this Agreement is
terminated pursuant to paragraph 6 above, or in the event of
termination purportedly made or attempted by the Company's
successor(s) other than pursuant to paragraph 6(a), 6(c), 6(d) or
6(e) above, Raymond shall be entitled to his compensation pursuant
to paragraph 5 above through December 31 of the year in which such
termination occurs. All payments made pursuant to this paragraph
shall be made in substantially equal quarterly installments
commencing with the first day of the first month following the
month in which termination occurs and shall cease upon the earlier
of the scheduled expiration date or upon Raymond's death. All
benefits shall be payable in accordance with the terms of the
Agreement and in accordance with the terms of the plans as
maintained by the Company as of the date of any Change in Control.
<PAGE>
8. No Trust Fund. Nothing contained in this Agreement and no
action taken pursuant to the provisions of this Agreement shall
create or be construed to create a trust fund of any kind, or a
fiduciary relationship between the Company and Raymond, his
designated beneficiary or any other person. To the extent that any
person acquires a right to receive payments from the Company under
this Agreement, such rights shall be no greater than the rights of
any unsecured general creditor of the Company.
9. Notice. Any notice which may be given hereunder shall be
sufficient if in writing and mailed by registered or certified
mail, return receipt requested, to the Company and to Raymond at
the following addresses:
The Raymond Corporation George G. Raymond, Jr.
P.O. Box 130 7920 Grand Bay Drive
Greene, New York 13778 Naples, Florida 33963
Attn: General Counsel
10. Status. Raymond is retained as an independent contractor
and not as an employee, agent or joint venturer.
11. Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter
hereof. The Agreement cannot be modified or extended except by a
writing signed by the parties hereto.
12. Legal Effect. The services to be performed by Raymond are
special and unique; it is agreed that any breach of this Agreement
by Raymond shall entitle the Company (or any successors or assigns
of the Company), in addition to any other legal remedies available
to it, to apply to any court of competent jurisdiction to enjoin
such breach. This Agreement shall be binding upon and shall inure
to the benefit of the successors and assigns of the Company but
shall not be assignable by Raymond.
<PAGE>
13. Construction of Agreement. The captions used in this
Agreement are for convenience only and shall not be construed in
interpreting this Agreement.
14. Severability. If any provision of this Agreement or the
application thereof to any person or circumstances for any reason
and to the extent it shall be held invalid or unenforceable, the
remainder of this Agreement and the application of such provision
to other persons or circumstances shall not be affected thereof,
but rather are to be enforced to the greatest extent permitted by
law.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first written above.
THE RAYMOND CORPORATION
By: /s/
---------------------------------
President & CEO
By: /s/ George G. Raymond, Jr.
----------------------------------
George G. Raymond, Jr.
<PAGE>
Exhibit 10.13
AMENDMENT #1 TO EMPLOYMENT AGREEMENT
This Agreement made as of the first day of January, 1994, by and between
Ross K. Colquhoun, (hereinafter referred to as "Employee") and The Raymond
Corporation, a New York Corporation, with a principal place of business at
Greene, New York (hereinafter referred to as "Raymond"),
WHEREAS, Employee and Raymond are presently parties to an Employment
Agreement dated November 3, 1987 (hereinafter referred to as "Employment
Agreement"), and
WHEREAS, as a result of Employee's superior performance, Raymond has
decided to amend the existing Employment Agreement to increase Employee's
supplemental pension;
NOW THEREFORE, in consideration of the mutual promises contained herein
and in the Employment Agreement, the parties agree as follows:
4. Pension and Supplemental Pension.
Line five is hereby amended to read "...50% of Employee's most
recent base salary payable for..."
The parties hereto agree that except as amended herein, the Employment
Agreement continues in full force and effect and sets forth the entire
understanding of the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
14th day of June, 1994.
THE RAYMOND CORPORATION
By /s/ William B. Lynn
------------------------------
William B. Lynn
Executive Vice President
/s/ Ross Colquhoun
-------------------------------
Ross K. Colquhoun
<PAGE>
Exhibit 10.15
THE RAYMOND CORPORATION
RETIREMENT BENEFITS EQUALIZATION PLAN
(non-qualified)
Restated as of January 1, 1995
<PAGE>
THE RAYMOND CORPORATION
RETIREMENT BENEFITS EQUALIZATION PLAN
(non-qualified)
ARTICLE I
DEFINITIONS AND CONSTRUCTION
1.1 DEFINITIONS
Terms not otherwise defined herein shall have the following
meanings:
"Board of Directors" Means the Board of Directors of
the Employer.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Committee" means the person or persons designated by the
Employer pursuant to Section 3.1 to administer the Plan on behalf of
the Employer.
"Employee" means an employee of the Employer who is a member
of a select group of management employees or a highly compensated
employee, as those terms are used in ERISA.
"Employer" means The Raymond Corporation, a corporation
with its principal offices in the State of New York, and any successor
which shall maintain this Plan.
"Pension Plan" means The Raymond Corporation Pension Plan
and any amendments thereto and any successor plans.
"Plan" means this instrument, including all amendments
thereto, known as THE RAYMOND CORPORATION RETIREMENT BENEFITS
EQUALIZATION PLAN.
"Profit-Sharing Plan" means the Profit-Sharing Retirement
Plan for Salaried Employees of The Raymond Corporation - Plan B, any
amendments thereto and any successor plan.
<PAGE>
ARTICLE II
PURPOSE
2.1 PURPOSE OF THE PLAN
The purpose of this Plan is to restore to eligible Employees
the benefits which are unable to be paid from the Pension Plan and
Profit-Sharing Plan due to sections 415 and 401(a)(17) of the Code and
due to a continuation of employment beyond normal retirement age.
ARTICLE III
ADMINISTRATION
3.1 ASSIGNMENT AND DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer may appoint one or more members to the
Benefits Equalization Plan Committee. Any person, including, but not
limited to, the directors, shareholders, officers, and Employees of the
Employer, shall be eligible to serve on the Committee. Any person so
appointed shall signify acceptance by filing a written acceptance with
the Employer. A member of the Committee may resign by delivering a
written resignation to the Employer or be removed by the Employer by
delivery of a written notice of removal, to take effect at a date
specified therein, or upon delivery to the member if no date is
specified.
The Employer, upon resignation or removal of a Committee
member, shall promptly designate in writing a successor. If the
Employer does not appoint a successor and there is no member remaining
on the Committee, the Employer will administer the Plan and will become
the Committee.
<PAGE>
3.2 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed to the Committee, the
responsibilities of each member may be specified by the Employer and
accepted in writing by each member. In the event that no such
delegation is made by the Employer, the Committee may allocate the
responsibilities among themselves, in which event the Committee shall
notify the Employer in writing of such action and specify the
responsibilities of each member. The Employer thereafter shall accept
and rely upon any documents executed by the appropriate member until
such time as the Employer or the Committee files with the Employer a
written revocation of such designation.
3.3 POWERS, DUTIES AND RESPONSIBILITIES
The primary responsibility of the Committee is to administer
the Plan for the exclusive benefit of the eligible Employees and their
beneficiaries, subject to the specific terms of the Plan. The Committee
shall administer the Plan in accordance with its terms and shall have
the power to determine all questions arising in connection with the
administration, interpretation, and application of the Plan. Any such
determination by the Committee shall be conclusive and binding upon all
persons. The Committee may correct any defect, supply any information,
or reconcile any inconsistency in such manner and to such extent as
shall be deemed necessary or advisable to carry out the purpose of this
Plan; provided, however, that any interpretation or construction shall
be done in a nondiscriminatory manner. The Committee shall have all
powers necessary or appropriate to carry out administrative duties
under this Plan.
<PAGE>
The Committee shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the
following:
(a) to determine all questions relating to the
eligibility of Employees to participate in the Plan;
(b) to compute, the amount and the kind of benefits to
which any eligible Employee shall be entitled hereunder;
(c) to maintain all necessary records for the
adminstration of the Plan:
(d) to interpret the provisions of the Plan and to
make and publish such rules for regulation of the Plan as are
consistent with the terms hereof; and
(e) to assist any Employee regarding rights, benefits,
or elections available under the Plan.
3.4 RECORDS AND REPORTS
The Committee shall keep a record of all actions taken and
shall keep all other books of account, records and other data that may
be necessary for proper administration of the Plan and shall be
responsible for supplying all information and reports to the Employer,
eligible Employees and their beneficiaries.
<PAGE>
3.5 APPOINTMENT OF ADVISORS
The Committee, may appoint counsel, specialists, and
advisors, and other persons as the Committee deems necessary or
desirable in connection with the administration of this Plan.
3.6 INFORMATION FROM EMPLOYER
To enable the Committee to perform these functions, the
Employer shall supply full and timely information to the Committee on
all matters relating to the compensation of all eligible employees,
their retirement, death, disability, or termination of employment, and
such other pertinent facts as the Committee may require. The Committee
may rely upon such information as is supplied by the Employer and shall
have not duty or responsibility to verify such information.
3.7 PAYMENT OF EXPENSES
All expenses of administration shall be paid out of the
general assets of the Employer. Such expenses shall include any
expenses incident to the functioning of the Committee, including, but
not limited to, fees of accountants, counsel, and other specialists,
and other costs of administering the Plan.
3.8 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 3.2, if there shall be
more than one member on the Committee, they shall act by a majority of
their number, but may authorize one or more of them to sign all papers
on their behalf.
<PAGE>
ARTICLE IV
ELIGIBILITY
4.1 ELIGIBILITY
All Employees eligible to participate in the Employer's
Pension Plan and Profit-Sharing Plan and their beneficiaries are
eligible to receive benefits under this Plan as provided in Article 5.
ARTICLE V
BENEFITS
5.1 BENEFITS
The benefits payable under this Plan shall be
determined as follows:
Pension Plan (a) The monthly benefit is (i) calculated
under the Pension Plan, using all
relevant Pension Plan definitions, but
without regard to the limitations on
benefits imposed by Section 415 of the
Code and the limitation on includible
compensation imposed by Section 401(a)(17)
<PAGE>
of the Code and by including any amount of
compensation deferred under the Employer's
Deferred Compensation Plan, and from the
monthly amount so determined under (i) is
subtracted (ii) the actual amount of
monthly benefit to which the Employee is
entitled under the Pension Plan. The
calculation in (i) and (ii) shall use the
same form of benefit, and to the extent
that the amount payable from the Pension
Plan is increased or decreased (e.g., due
to changes in the relevant limits), the
amount payable from this Plan shall
decrease or increase accordingly.
(b) The benefit in (a) is to be paid monthly
as long as benefits are paid from the
Pension Plan.
(c) Another benefit is payable from this Plan
in the event an Employee defers retirement
beyond normal retirement age under the
Pension Plan. For each month of such
<PAGE>
deferred retirement, the Employee shall
be paid the amount of benefit which
would otherwise have been paid to the
Employee from the Pension Plan and this
Plan had the Employee retired on the
Employee's normal retirement date under
the Pension Plan. This benefit shall be
paid at the same time benefits commence
under the Pension Plan and for the same
number of months by which retirement was
deferred.
Profit-Sharing An amount shall be calculated and paid to
Plan the Employee in a single sum that will
equal the amount of Employer contributions
to the Profit-Sharing Plan each year which
could not be made each year due to the
limitations imposed by Sections 415 and
401(a)(17) of the Code, plus a rate of
return on such amount equal to the rate of
return earned in the Employee's account in
the Profit-Sharing Plan over the relevant
periods of time, as if such funds had in
fact been contributed to the
Profit-Sharing Plan and had been invested
in the same fashion as the funds actually
contributed. This amount shall be paid
during the first quarter of the calenadar
year following the year of separation from
service. In the event of the Employee's
death prior to payment, payment shall be
made to the estate of the Employee.
<PAGE>
5.2 FORM OF BENEFITS
The benefits payable with respect to the Pension Plan shall
be paid in the form of a single life annuity if the Employee is
unmarried at the time payment commences and in the form of a joint and
50 percent spousal survivor annuity if the Employee is married, except
for the benefit due to deferred retirement which will be calculated in
the form of a single life annuity regardless of marital status.
If a benefit is to commence prior to the Employee's normal
retirement date, the benefit from this Plan shall be adjusted in the
same manner as provided for in the Pension Plan.
If an Employee dies after the early retirement date provided
in the Pension Plan while still employed by the Employer leaving a
surviving spouse, said spouse shall be entitled to a monthly lifetime
benefit equal to one-half of the benefit the Employee would have
received had the Employee retired on a joint and 50 percent spousal
survivor annuity on the first of the month before the date of death.
5.3 BENEFITS UNFUNDED
The benefits payable under this Plan shall be paid by the
Employer each year out of assets which at all times shall be subject to
the claims of the Employer's general creditors. The Employer may in its
discretion establish a trust in which to place assets from which such
benefits are to be paid on behalf of some or all Employees, as
determined by the Administrator in its sole discretion, but neither the
creation of such trust nor the transfer of funds to such trust shall
render such assets unavailable to settle the claims of the Employer's
creditors. An Employee shall possess the status of an unsecured general
creditor of the Employer.
<PAGE>
ARTICLE VI
AMENDMENT AND TERMINATION
6.1 AMENDMENT
This Plan may be amended at any time by the Board of
Directors of the Employer. No such amendment, however, shall reduce
benefits being paid in accordance with this Plan on the effective date
of the amendment.
6.2 TERMINATION
The Employer retains the right to terminate this Plan at any
time, which action may be taken by the Board of Directors, in the
exercise of its absolute and uncontrolled discretion at any time.
In the event of the Plan's termination, the Employer shall
make such provisions as it deems necessary to provide for the payment
of benefits to any Employee or beneficiaries entitled to receive them.
In no event shall termination of the Plan result in a reduction of any
benefits due an Employee or beneficiary immediately prior to the
termination date.
ARTICLE VI
EFFECTIVE DATE
7.1 EFFECTIVE DATE
This Plan was originally effective on or after January 1,
1983, and this Restatement is effective on or after January 1, 1995,
except in the case of the Profit Sharing Plan benefit described in
Article V where the effective date is January 1, 1994.
<PAGE>
VIII
MISCELLANEOUS PROVISION
8.1 EFFECT 0F THIS PLAN
The terms of this Plan shall be binding upon and inure to
the benefit of the Employer, its successor and assigns, and the
eligible Employees and their heirs, executors, administrators and legal
representatives.
8.2 NEW YORK STATE LAW WILL GOVERN
This Plan shall be construed in accordance with and governed
by the laws of the State of New York.
8.3 ACTIONS OF THE EMPLOYER, BOARD OF DIRECTORS AND
COMMITTEE
The Employer, members of the Board of Directors and
Committee shall not be held liable to any person for any action taken
or omitted in connection with the interpretation and administration of
this Plan unless the action is attributable to willful misconduct or
lack of good faith.
8.4 NO CONTRACT
Nothing contained in this Plan shall be construed as a
contract of employment between the Employer and an Employee, or as a
right of any Employee to be continued in the employ of the Employer, or
as a limitation of the right of the Employer to discharge any of its
Employees, with or without causes.
8.5 NO ASSIGNMENT
The benefits payable under this Plan are non-assignable,
non-transferable, non-alienable and not-attachable.
IN WITNESS WHEREOF, the Plan has been executed this 8th day
of December , 1994.
THE RAYMOND CORPORATION
By: /s/ Ross K. Colquhoun
---------------------------------
Its: President & C.E.O.
--------------------------------
<PAGE>
Exhibit 10.16
THE RAYMOND CORPORATION
STOCK OPTION PLAN (1991)
---------------------------------------------
Adopted by the Board of Directors on March 1, 1991
Approved by the Shareholders on May 4, 1991
<PAGE>
THE RAYMOND CORPORATION
STOCK OPTION PLAN (1991)
TABLE OF CONTENTS
SECTION PAGE
------- -----
1 Purpose............................................ 1
2 Administration..................................... 1
3 Shares Subject to the Plan......................... 1
4 Eligibility and Extent of Participation............ 2
5 Non-qualified and Incentive Options................ 2
6 Option Agreements.................................. 3
7 Option Price....................................... 3
8 Exercise of Options................................ 4
9 Transferability of Options......................... 5
10 Death, Retirement, and Termination of Employment
or Director Status............................... 5
11 Cancellation of Options............................ 5
12 Amendments, Suspension or Discontinuance........... 5
13 Termination........................................ 6
14 Stock Appreciation Rights.......................... 6
15 withholding........................................ 7
16 Director Stock Option............................. 7
<PAGE>
THE RAYMOND CORPORATION
Stock Option Plan (1991)
SECTION 1
PURPOSE
The purpose of this Plan is to promote the interests of The Raymond
Corporation ("Company") and its stockholders by providing a method whereby
directors, officers and other key employees of the Company and its subsidiaries
may be encouraged to invest in the Common Stock of the Company and thereby
increase their proprietary interest in its business, encourage them to remain in
the employ of the Company and increase their personal interest in its continued
success and progress.
SECTION 2
ADMINISTRATION
(a) The Board of Directors shall designate a committee of Directors
(hereinafter referred to as the "Committee"), none of whose members shall be
eligible to receive options except as specifically authorized under Section 16
of the Plan. The Committee shall have full power and authority, subject to such
orders or resolutions not inconsistent with the provisions of the Plan as may
from time to time be issued or adopted by the Board, to interpret the provisions
and supervise the administration of the Plan. All determinations by the
Committee shall be made by the affirmative vote of a majority of its members,
but any determination reduced to writing and signed by all of the members shall
be fully as effective as if it had been made by a majority vote at a meeting
duly called and held.
(b) Subject to any applicable provisions of the By-Laws of the Company, all
decisions made by the Committee pursuant to the provisions of the Plan and
related orders or resolutions of the Board shall be final, conclusive and
binding on all persons, including the Company, stockholders, employees and
optionees.
SECTION 3
SHARES SUBJECT TO THE PLAN
(a) The shares to be delivered upon exercise of options granted under the
Plan shall be available, at the discretion of the Board of Directors, either
from the authorized but unissued shares of the Company or from shares reacquired
by the Company, including shares purchased in the open market.
(b) Subject to adjustments made pursuant to the provisions of paragraph (c)
of this Section 3, the aggregate number of shares to be delivered upon exercise
of all options which may be granted under the Plan shall not exceed 300,000
shares. If an option granted under the Plan shall expire or terminate for any
reason, the shares subject to, but not delivered under, such option shall be
available for other options to the same person or other persons.
<PAGE>
(c) In the event of a merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate structure
affecting the Common Stock of the Company, such adjustment shall be made in the
aggregate number of shares which may be purchased under the Plan, the maximum
number of shares which may be purchased by any one person under the Plan and the
number and option price of shares subject to the outstanding options granted
under the Plan as may be determined to be appropriate by the Board of Directors
upon recommendation by the Committee.
SECTION 4
ELIGIBILITY AND EXTENT OF PARTICIPATION
options may be granted only to directors and employees of the Company and
its subsidiaries. Except as expressly authorized by Section 16 of the Plan, no
grant shall be made to a director who is not an officer or salaried employee.
Subject to the limitations of the Plan, the Committee shall, after consultation
with management, select the employees to be granted options and determine the
time when each option shall be granted and the number of shares subject to each
option. More than one option may be granted to the same employee.
SECTION 5
NON-QUALIFIED AND INCENTIVE OPTIONS
(a) The Committee shall have authority to grant "Non-qualified Options" for
a term not more than ten (10) years from the date of grant. Non-qualified
options shall be labeled as such.
(b) Options granted under the Plan prior to March 1, 2001 may also be
Incentive Stock Options as provided by Section 422A of the Internal Revenue Code
of 1986, as amended. The terms of each Incentive Stock Option granted under
the Plan shall be determined by the Committee consistent with provisions of the
Plan, including the following:
(i) The purchase price of the stock subject to option shall not be less
than the fair market value of the stock on the date the option is granted.
(ii) Each Incentive Stock Option may be exercised in whole or in part from
time to time during such period as the option shall specify, provided that no
option shall not be exercisable prior to one (1) year nor after ten (10) years
from the date of the grant thereof;
(iii) The aggregate fair market value (determined as of the date the option
is granted) of the shares with respect to which Incentive Stock Options are
exercisable for the first time by any individual during any calendar year (under
all plans of the individual's employer corporation and its parent and subsidiary
corporation) cannot exceed $100,000.
<PAGE>
The purchase price of the shares with respect to which an Incentive Stock
Option is exercised shall be payable in full in cash or, to the extent
authorized by the Board of Directors at the time such an option is granted under
the Plan (i) in shares of Common Stock of the Company or (ii) in a combination
of cash and such shares. The value of any share delivered in payment of the
purchase price shall be its fair market value on the date the option is
exercised. No fractional shares shall be issued.
(iv) An Incentive Stock Option or Stock Appreciation Right shall not be
assignable or transferable by the employee to whom granted otherwise than by
will or by the laws of descent and distribution, and shall be exercisable,
during the employee's lifetime, only by the employee.
(v) No person shall be granted any Incentive Stock option if at the time of
the grant such person owns, directly or indirectly, more than 10% of the total
combined voting power of the Company unless the option price is at least 110% of
the fair market value of the Common Stock and the exercise period of such
Incentive Stock Option is by its terms limited to five (5) years.
SECTION 6
OPTION AGREEMENTS
Each option shall be evidenced by an option agreement which shall contain
such terms and conditions as may be approved by the Committee and shall be
signed by an officer of the Company and the optionee. Each option agreement
shall specify the period within which the option may be exercised and the time
or times within such period that the option may be exercised and the number of
shares which may be purchased at such time or times. If any option agreement
provides for exercise in installments, it shall provide that, unless the option
has been canceled on termination of employment by reason of death or otherwise
prior to the next succeeding maturity date of an installment, the option shall
be exercisable with respect to a proportionate part of such installment based
upon the number of days of employment during the period of such installment in
relation to the number of days in such period.
SECTION 7
OPTION PRICE
The price at which shares may be purchased upon exercise of a particular
option shall be not less than 100% of the fair market value of such shares at
the time such option is granted, as determined by the Committee. For this
purpose such fair market value shall be the mean between the bid and asked
prices on the "over-the-counter" market of said stock on the date the option is
granted, or, if no such bid and asked prices are made on that day, then on the
next preceding day on which there were such bid and asked prices.
<PAGE>
SECTION 8
EXERCISE OF OPTIONS
(a) Subject to the provisions of the Plan with respect to death, retirement
and termination of employment or director status, the period during which each
option may be exercised shall be fixed by the Committee at the time such option
is granted, but such period in no event shall expire later than ten (10) years
from the date the option is granted.
(b) Except as provided in Section 16 of the Plan, each option granted under
the Plan may be exercised only after one (1) year of continued employment by the
Company, or its subsidiaries immediately following the date the option is
granted and, except in case of death, retirement or termination of employment or
director status as hereinafter provided, only during the continuance of the
optionee's employment with the Company or one of its subsidiaries. Subject to
the foregoing limitations and the terms and conditions of the option agreement
and unless canceled prior to exercise, each option shall be exercisable in whole
or in part or in installments at such time or times as the Committee may
prescribe and specify in the applicable option agreement, but no option may at
any time be exercised in part with respect to fewer than fifty (50) shares.
(c) Options shall be exercised by written notice to the Company and payment
of the option price. No shares shall be delivered pursuant to the exercise of
any option, in whole or in part, until qualified for delivery under such laws
and regulations as may be deemed by the Committee to be applicable thereto and
until payment in full of the option price therefor is received by the Company.
In addition to any other method of payment which may be acceptable to the
Committee, and notwithstanding any requirement for payment in cash contained in
outstanding option agreements, payment may be effected either in whole or in
part by the surrender to the Company of outstanding shares of its Common Stock
in lieu of cash; and any shares so surrendered shall be valued at the fair
market value thereof as determined under Section 7 hereof on the last trading
day prior to the date on which such shares are surrendered.
(d) Shares shall be issued in the name of the optionee. No optionee, or
the legal representative, legatee, or distributee of an optionee, shall be
deemed to be a holder of any shares subject to such option unless and until the
certificate or certificates therefor have been issued.
(e) Each Stock Option may provide that the optionee shall represent at
the time of each exercise of option or stock appreciation right that the shares
purchased are being acquired for investment and not with a view to distribution
thereof.
<PAGE>
SECTION 9
TRANSFERABILITY OF OPTIONS
An option granted under the Plan may not be transferred except by will or
the laws of descent and distribution.
SECTION 10
DEATH, RETIREMENT, AND TERMINATION OF EMPLOYMENT
OR DIRECTOR STATUS
Subject to the condition that no option may be exercised in whole or in
part after the expiration of the option period specified in the applicable
option agreement and subject to the Committee's right to cancel any option:
(a) Upon termination of his employment or director status for any reason
other than death, an optionee, may within three (3) months after the date of
such termination, purchase any or all of the shares with respect to which such
optionee was entitled to exercise such option immediately prior to such
termination.
(b) Upon the death of any optionee while in active service or within the
three-month period referred to in (a) above, the person or persons to whom such
optionee's rights under the option are transferred by will or the laws of
descent and distribution may, within one (1) year after the date of such
optionee's death, purchase any or all of the shares with respect to which such
optionee was entitled to exercise such option immediately prior to his death.
Notwithstanding the foregoing, if at the date of any optionee while in active
service such optionee was entitled to exercise his option in part only, the
Committee may, in its sole discretion, permit such person or persons to purchase
all or any part of the balance of the shares subject to such option.
SECTION 11
CANCELLATION OF OPTIONS
Except for director stock options granted pursuant to Section 16 hereof the
Committee may, in its sole discretion and with or without cause, cancel any
option to the extent it has not theretofore been exercised. Such cancellation
shall become effective concurrently with the Committee's action.
SECTION 12
AMENDMENTS, SUSPENSION OR DISCONTINUANCE
The Board of Directors may amend, suspend, or discontinue the Plan, but may
not without the prior approval of the stockholders, make any amendment which
operates (a) to abolish the Committee, change the qualification of its members,
or withdraw the administration of the Plan from its supervision, (b) to make any
<PAGE>
material change in the class of eligible participants as defined in the Plan,
(c) to increase the total number of shares which-may be purchased on exercise of
options granted under the Plan, (d) to increase the total number of shares which
may be purchased by any one participant, (e) to extend the maximum option
period, (f) to decrease the minimum option price, or (g) to permit adjustments
or reductions of the price at which shares may be purchased under any option
granted under the Plan, except in each case as permitted by the provisions of
paragraph (c) of Section 3 above, provided that the restriction imposed by this
clause (g) shall in no way limit the power to grant more than one option to any
individual.
SECTION 13
TERMINATION
This plan shall terminate ten (10) years from the date upon which it is
adopted by the Board of Directors of The Raymond Corporation.
SECTION 14
STOCK APPRECIATION RIGHTS
(a) Any Non-qualified Option or Incentive Stock Option granted under the
Plan may, at the time of such grant, include a Stock Appreciation Right in the
discretion of the Committee. Any such Stock Appreciation Right and the exercise
thereof shall be subject to the general provisions of the Plan relating to the
underlying option, to the provisions of this Section and to such additional
restrictions or conditions as the Committee may impose.
(b) The Committee may include, in conjunction with the grant of an option,
Stock Appreciation Rights covering up to one-half the number of optioned shares
specified in the grant. Subject to any restrictions or conditions imposed by the
Committee, such rights may be exercised by the optionee as to a number of shares
of Common Stock provided in the related option only upon surrender of the
exercisable portion of said option with respect to a like number of shares of
common stock.
(c) For each appreciation right granted to an optionee, the optionee upon
exercise thereof shall receive cash (subject to applicable withholding taxes)
in an amount equal to the amount, if any, by which the fair market value at the
exercise date of one share of common stock exceeds the option price per share
stated in the related underlying option, multiplied by the number of shares
covered by the appreciation rights exercised by the optionee. The fair market
value of the shares shall be determined as provided in Section 7 of the Plan.
(d) The exercise of stock appreciation rights hereunder shall result in a
reduction in an equivalent number of optioned shares available for purchase, and
to such extent the right to purchase such shares shall be deemed surrendered
under the related option.
<PAGE>
SECTION 15
WITHHOLDING
(a) There will be deducted from each distribution of stock and/or cash made
under the Plan the amount of tax required by any governmental authority to be
withheld.
(b) The option agreement evidencing any Incentive Stock Option granted
under this Plan shall provide that if the optionee makes a disposition within
the meaning of Section 425(c) of the Internal Revenue Code and the regulations
promulgated thereunder of any share or shares of stock issued to the optionee
pursuant to the exercise of the Incentive Stock Option within the two year
period commencing on the day after the date of grant of such option or within
the one year period commencing on the day after the date of transfer of the
share or shares to the optionee pursuant to the exercise of such option, the
optionee shall within ten (10) days of such disposition notify the Company
thereof and immediately deliver to the Company the amount of Federal income tax
withholding required by law.
SECTION 16
DIRECTOR STOCK OPTIONS
(a) Each director of the Company who is not otherwise an employee of the
Company or any subsidiary shall, on the fourth Wednesday of May following the
director's election at the annual meeting of shareholders commencing with May
1991 and on the fourth Wednesday of each May thereafter during such directors
term automatically be granted non-qualified options to purchase the Company's
common stock. The number of shares subject to each such option shall be equal to
(i) the average of all compensation paid to non-employee directors, divided by
(ii) the fair market value per share of the Company's Common Stock on the date
of grant. The average of non-employee directors' compensation shall be
determined by dividing the number of non-employee directors eligible for
director stock options into the aggregate compensation paid to all non-employee
directors during the Company's preceding fiscal year for services rendered to
the Company as directors (including any deferred compensation). A director's
stock option granted hereunder shall be exercisable on the date of grant.
(b) Automatic director stock option grants shall only be made if, as of
each date of grant, the director (i) is not otherwise an employee of the Company
or any subsidiary, (ii) has not been an employee of the Company or any
subsidiary for any part of the preceding fiscal year, and (iii) has served on
the Board of Directors continuously since the commencement of the director's
term.
(c) Except as expressly provided in this Section 16, director stock options
shall be subject to the terms and conditions of Section 5 for Non-qualified
Options and in accordance with the Plan.
Exhibit 10.18
THE RAYMOND CORPORATION
1970 DEFERRED COMPENSATION PLAN
Restated as of September 1, 1994
1.0 BACKGROUND
1.1 Introduction
The Raymond Corporation 1970 Deferred Compensation Plan
("Plan") provides the opportunity for Outside Directors
("Director") to defer all or part of their fees and key
employees to defer part of their salary and/or bonus
("Compensation") payable by The Raymond Corporation or
its subsidiaries ("Company") to future years as part of
their financial planning.
2.0 EXPLANATION OF PLAN
2.1 Effective Date
The Plan originally was effective November 1, 1970, and
has been subsequently amended several times. This
Restated Plan will be effective as of September 1, 1994.
2.2 Eligibility
The Plan is available (a) to Directors of the Company and
(b) to officers and employees of the Company who reside
in the United States and who are designated as eligible
by the Deferred Compensation Committee described in
Section 3.4 ("Committee"). Employees who are also members
of the Board of Directors of the Company ("Board") shall
for the purposes of this Plan not be included in the term
"Director" when used separately.
2.3 Interest in the Plan; Deferred Compensation Account
For each eligible person who elects to defer Compensation
eamed during a year ("Participant"), separate Deferred
Compensation Accounts shall be established for that year
for each type of Compensation deferred. A Participant's
interest in the Plan shall be the Participant's right to
receive payments under the terms of the Plan. A
Participant's payments from the Plan shall be based upon
the value attributable to the Participant's Deferred
Compensation Accounts, which on a particular date is
equal to the amount credited to that Account.
<PAGE>
2.4 Amount of Deferral
(a) An employee may elect to defer receipt of up to one
half of his or her Compensation in increments of
$1,000. A Director may elect to defer any amount of
Directors' fees, however described, without
limitation.
(b) Notwithstanding Section 2.4(a), Compensation shall
not be deferred to the extent that a Participant's
salary currently payable would be less than the
Social Security wage base in effect for that year.
2.5 Time of Election of Deferral
(a) An election to defer Compensation must be made
before the Compensation is earned. In the case of
salary, bonus and Directors' fees, the election to
defer must be made prior to the year in which the
salary, bonus or Directors' fees will be earned.
(b) Once made, an election to defer for a particular
year is irrevocable.
2.6 Accounts and Investments
(a) The right of any Participant to receive future
payments under the provisions of the Plan shall be a
contractual obligation of the Company but shall be
subject to the claims of the creditors of the
Company against the general assets of the Company.
(b) The amount of Compensation deferred will be credited
to the Participant's Deferred Compensation Account
as soon as practical after the Compensation would
have been paid had there been no election to defer.
At the end of each quarter the Account shall be
credited with assumed interest eamings at the
monthly average bank "prime rate" as reported in The
Wall Street Journal for each month in the quarter,
compounded quarterly ("Interest Fund").
2.7 Reinvestment of Income
Income that is deemed to be eamed in the Interest Fund
shall be deemed reinvested in that fund.
<PAGE>
2.8 Payment of Deferred Compensation
(a) No withdrawal may be made from the Participant's
Deferred Compensation Accounts except as provided
in this Section.
(b) At the time the election to defer is made, the
Participant shall choose the date on which payment
of the resulting value in the Deferred Compensation
Account is to commence, which date shall be either
April 1 or October 1 of the year specified by the
Participant ("Payment Commencement Date"). In the
case of Director Participants, the Payment
Commencement Date shall be no later than the first
day of the month following the Participant's
retirement from the Board. In the case of key
employee Participants, the Payment Commencement
Date shall be no later than October 1 of the year
following the year during which the key employee
becomes 65 years of age.
(c) At the time the election to defer is made, the
Participant may choose to receive payments either
(i) in a lump sum, or (ii) in up to ten annual
installments (which may be payable monthly). The
method of paying a Deferred Compensation Account of
a Participant shall be called the "Method of
Payment." The amount of any payment under the Plan
shall be the value attributable to the Deferred
Compensation Account on the last day of the month
preceding the month of the payment date, divided by
the number of payments remaining to be made includ-
ing the payment for which the amount is being
determined.
(d) In the event of a Participant's death or total
disability before the Participant has received all
of the Participant's Deferred Compensation
Accounts, the value of the Accounts (excluding the
amount being paid in installments described in the
following sentence) shall be paid either (i) in a
lump sum, or (ii) in two to ten annual installments
commencing on the first day of April of the year
following the Participant's death or total
disability, as Participant at the time of deferral
may elect. If Participant is receiving installment
payments from a Deferred Compensation Account at
the time of death or total disability, the balance
in that Account shall be paid to Participant's
estate or to Participant over the installments
remaining to be paid.
(e) A Participant may not change the Payment
Commencement Date or Method of Payment for a
Deferred Compensation Account after an election has
been made. This shall not prevent the Participant
from choosing a different Payment Commencement Date
and/or Method of Payment for amounts to be deferred
in subsequent years.
<PAGE>
(f) Notwithstanding any Payment Commencement Date or
Method of Payment selected by a Participant, if the
Participant's employment with the Company
terminates other than by reason of (i) retirement
pursuant to a retirement plan of the Company
including retirement from the Board pursuant to
Company policy, (ii) the Participant's death, or
(iii) the Participant's total disability, then
payment will be made to the Participant in a lump
sum or in the number of annual installments
previouslv selected by the Participant, as the
Committee in its discretion shall decide. In either
case, the Payment Commencement Date shall be the
first day of April or October of the year of
termination or of the year following the year of
termination, whichever is selected by the
Committee.
(g) If, in the discretion of the Committee, the
Participant has a need for funds due to an
unforeseeable emergency which is caused by an event
beyond the Participant's control and that would
result in a financial hardship if the Participant
were not permitted to withdraw, a payment may be
made to the Participant from his or her Deferred
Compensation Accounts at a date earlier than the
Payment Commencement Date. A payment based upon
financial hardship cannot exceed the amount
required to meet the immediate financial need
created by the hardship. The Participant requesting
a hardship payment must supply the Committee with a
statement indicating the nature of the need that
created a financial hardship, the fact that all
other reasonably available resources are
insufficient to meet the need, and any other
information which the Committee decides is
necessary to evaluate whether a financial hardship
exists.
(h) Payments from the Plan shall be in cash.
(i) All payments made by the Company shall be subject to
all taxes required to be withheld under applicable
laws and regulations of any governmental
authorities.
2.9 Manner of Electing Deferral and Payment Options
(a) In order to make any elections or choices permitted
hereunder, the Participant must give written notice
to the Committee. A notice electing to defer
Compensation shall specify:
(i) the percentage or amount and type of
Compensation to be deferred;
(ii) the Method of Payment and the Method of
Payment to the Participant or the
Participant's estate in the event of the
Participant's total disability or death; and
(iii) the Payment Commencement Date.
<PAGE>
(b) An election by a Participant to defer Compensation
(including the selection of a Payment Commencement
Date and Method of Payment) shall apply only to
Compensation deferred in the calendar year for
which the election is effective.
(c) Prior to the commencement of each calendar year,
the Company will provide election forms to permit
Participants to defer Compensation to be eamed
during that calendar year.
3.0 ADMIMSTRATION OF THE PLAN
3.1 Statement of Account
Statements setting forth the value of the Participant's
Deferred Compensation Accounts will be sent to each
Participant quarterly or more often as the Committee may
elect.
3.2 Assignability
No right to receive payments hereunder may be
transferred, assigned, or pledged by a Participant,
except for transfers by will or by the laws of
descent and distribution.
3.3 Business Days
In the event any date specified herein falls on a
Saturday, Sunday, or legal holiday, such date shall be
deemed to refer to the next business day thereafter.
3.4 Administration
This Plan shall be administered by the Administration
Committee, which shall consist of four employees of the
Company appointed by the Board. The Committee shall have
the authority to adopt rules and regulations for carrying
out the Plan, and interpret, construe and implement the
provisions of the Plan. The decisions of the Committee
shall be final and binding on the Participants.
3.5 Amendment
This Plan may at any time and from time to time be
amended or terminated by the Board. No amendment or
termination shall, without the consent of a Participant,
adversely affect such Participant's interest in the Plan.
3.6 Liability
(a) Except in the case of willful misconduct, no
director or employee of the Company shall be
personally liable for any act done or omitted to be
done by such person with respect to this Plan.
(b) The Company shall indemnify, to the fullest extent
permitted by law, members of the Committee and
directors and employees of the Company, both past
and present to whom are or were delegated duties,
responsibilities and authority with respect to the
Plan, against any and all claims, losses,
liabilities, fines, penalties and expenses
(including, but not limited to, all legal fees
relating thereto), reasonably incurred by or
imposed upon such persons, arising out of any act
or omission in connection with the operation and
administration of the Plan, other than willful
misconduct.
Adopted by the Board:
<PAGE>
Exhibit 10.22
THE RAYMOND CORPORATION
PENSION PLAN
As Amended 01-01-74
01-01-76
01-01-79
01-01-82
12-31-83
01-01-85
08-30-85 (Eff.01-01-85)
(Rev. 12-16-85)
12-15-88 (Eff. 01-01-89)
06-15-89 (Eff. 01-01-90)
07-15-90 (Eff. 01-01-90)
07-28-93 (Eff. 01-01-89)
04-29-94 (Eff. 01-01-94)
08-03-94 (Eff. 01-01-94)
<PAGE>
CONTENTS
PAGE
----
1. DEFINITIONS............................................. 1
II. ELIGIBILITY............................................. 4
III. VESTING SERVICE AND BENEFIT SERVICE..................... 5
IV. RETIREMENT DATES........................................ 7
V. RETIREMENT BENEFITS..................................... 8
VI. PAYMENT OF RETIREMENT BENEFITS.......................... 12
VII. FINANCING AND CONTRIBUTIONS............................. 16
VIII. TERMINATION OF SERVICE.................................. 17
IX. DEATH BENEFITS.......................................... 17
X. ADMINISTRATIVE COMMITTEE AND ADMINISTRATION............. 19
XI. NON-ALIENATION OF BENEFITS.............................. 20
XII. PAYMENTS OF BENEFITS TO PERSON OTHER THAN DESIGNATED
BENEFICIARY....................................... 21
XIII. RIGHTS AND OBLIGATIONS OF THE CORPORATION............... 21
XIV. MAXIMUM RETIREMENT BENEFITS............................. 23
XV. MISCELLANEOUS........................................... 28
XVI. DISTRIBUTIONS AFTER DECEMBER 31, 1992................... 29
<PAGE>
SECTION I - DEFINITIONS
The following words and terms as used in this Plan shall have the meaning set
forth below, unless a different meaning is clearly required by the context. The
masculine pronoun, wherever used, shall include the feminine where applicable,
and the singular shall include the plural:
1.1 "Administrative Committee" means the Administrative Committee provided
for in Section X hereof.
1.2 "Affiliated Employer Corporation" means a corporation which is a member
of a controlled group of corporations, including the Corporation
(determined under section 1563(a) of the Code without regard to section
1563(a)(4) and (e)(3)(C)), except that with respect to section 14.1 "more
than 50 percent" shall be substituted for "at least 80 percent" where it
appears in section 1563(a)(1) of the Code; any trade or business under
common control (as defined in section 414(c) of the Code) with the
Corporation; or a member of an affiliated service group (as defined in
section 414(m) of the Code) which includes the Corporation.
1.3 "Anniversary Date of the Plan" means January 1, 1989 and each subsequent
January 1st.
1.4 "Annual Earnings" means the amount of income paid to a Participant by the
Company which is reportable for federal income tax purposes, including
overtime, bonuses, commissions, premium pay, or any other compensations
or special payouts considered as wages under current tax withholding
regulations, and deferred amounts under the Corporation's Deferred
Compensation Plan. Annual Earnings shall include any amount which is
contributed by the Company pursuant to a salary reduction agreement and
which is not included in the gross income of the Participant under
sections 125, 402(a)(8), 402(h) or 403(b) of the Code. For Plan Years
beginning after December 31, 1988 and before January 1, 1994, the Annual
Earnings taken into account for a Participant for any Plan Year shall not
exceed $200,000. For Plan Years beginning after December 31, 1993, the
Annual Earnings taken into account for a Participant for any Plan Year
shall not exceed $150,000. Both the $200,000 and $150,000 limitations
shall be adjusted for increases in the cost of living in accordance with
section 401 (a)(17) of the Code. In determining the Annual Earnings of a
Participant for purposes of the $200,000 and $150,000 limitations, the
rules of section 414(q)(6) of the Code shall apply, except that in
applying such rules, the term "family" shall include only the spouse of
the Participant and any lineal descendants of the Participant who have
not attained age 19 before the close of the Plan Year. The benefits of a
Participant who had Annual Earnings in excess of $200,000 in a Plan Year
beginning before 1989 and/or in excess of $150,000 in a Plan Year
beginning before 1994 shall be determined under the formula with extended
wear-away fresh start described in section 1.401(a)(4)-13(c)(4)(iii) of
the Income Tax Regulations, with fresh start dates as of December 31,
1988 and/or December 31, 1993, respectively.
<PAGE>
1.5 "Beneficiary" means any person designated by a participant to receive any
death benefits payable in accordance with Section VI or Section IX.
1.6 "Benefit Service" means service recognized for purposes of computing the
amount of any benefit under the Plan and for purposes of determining
eligibility for certain benefits under the Plan, determined as provided
in Section 3.2.
1.7 "Board" means the Board of Directors of the Corporation.
1.8 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
1.9 "Corporation" or "Company" means The Raymond Corporation, a corporation
organized and existing under the laws of the State of New York, or any
U.S. subsidiary corporation in which The Raymond Corporation holds 51%
ormore of the common or voting stock, or any designated corporate
subsidiary, and which subsidiary has been approved by the Board to come
under this Pension Plan.
1.10 "Employee" means any person employed by the Corporation who receives
stated compensation other than a pension, severance pay, retainer or fee
under contract, but excluding any Leased Employee and any person who is
included in a unit of Employees covered by a collective bargaining
agreement."
1.11 "Equivalent Actuarial Value" means equivalent value determined on the
basis of the applicable factors set forth in Tables I through V in
Appendix A of the Plan. For purposes of determining lump sum factors
applicable to annual benefits under Section 6.5 of the Plan, (i) the
interest rate to be used shall be 7 1/2% or, the schedule of interest
rates used by the Pension Benefit Guaranty Corporation for valuing
immediate and/or deferred annuities, whichever may be applicable, for
single employer plans that terminate on the January 1 of the Plan Year in
which the date of distribution occurs, whichever provides the higher lump
sum factor and (ii) the mortality table to be used shall be the 1963
George B. Buck Mortality Table assuming 80% males and 20% females.
1.12 "Final Average Earnings" means the annual average of the Participant's
Annual Earnings during the three (3) consecutive years out of the last
ten (10) years immediately prior to the earliest of his actual
retirement, or termination of his service with the Corporation whichever
is applicable, when such Annual Earnings are the highest, or during years
of employment with the Company if for less than three (3) years of
employment.
1.13 "Former Plan" means the Raymond Pension Trust in effect as of September
30, 1961.
1.14 "Fund" means the fund established by the contributions of the Corporation
on account of this Plan.
<PAGE>
1.15 "Hours of Service" means, and an Employee shall be credited with:
a) Each hour for which an Employee is paid or entitled to payment for
the performance of duties for the Corporation,
b) Each hour for which an Employee is paid or entitled to payment by the
Corporation on account of a period during which no duties are
performed, whether or not the employment relationship has terminated,
due to vacation, holiday, illness, incapacity (including disability),
lay off, jury duty, military duty or leave of absence,
c) Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Corporation, excluding any hour
credited under (a) or (b), which shall be credited to the computation
period or periods to which the award, agreement or payment pertains,
rather than to the computation period in which the award, agreement
or payment is made, and
d) solely for purposes of determining whether an Employee has incurred a
Break in Service under the Plan, each hour for which an Employee
would normally be credited under paragraph (a) or (b) above during a
period of Parental Leave but not more than 501 hours for any single
continuous period. The number of hours shall be credited to an
Employee under this paragraph (d) during the Plan Year in which the
Parental Leave began, only if the Employee would be prevented from
incurring a Break in Service for that year; otherwise, the hours
under this paragraph (d) shall be credited to the succeeding Plan
Year.
No hours shall be credited on account of any period during which the
Employee performs no duties and receives payment solely for the purpose
of complying with unemployment compensation, worker's compensation or
disability insurance laws. The Hours of Service credited shall be
determined as required by Title 29 of the Code of Federal Regulations,
Section 2530. 200b-2(b) and (c).
1.16 "Leased Employee" means any person as so defined in Section 414(n) of
the Code.
1.17 "Leave of Absence" means an absence on leave granted in writing by and at
the convenience of the Corporation prior to the taking there of; or an
absence on Military Service. Leave of Absence shall not include any
lay-off.
The rules governing the granting of such Leave of Absence shall be
uniformly and consistently applied to all Employees under similar
circumstances.
1.18 "Military Service" shall mean only service on active duty in the Armed
Forces of the United States, during the period of first enlistment, if
voluntary, and during the period of enforced service, if involuntary,
under laws enacted by the Congress of the United States.
1.19 "Normal Retirement Age" means the Participant's 65th birthday.
<PAGE>
1.20 "Parental Leave" means a period in which the Employee is absent from
work because of the pregnancy of the Employee, the birth of a child of
the Employee or the placement of a child with the Employee in connection
with the adoption of that child by the Employee, or for purposes of
caring for that child for a period beginning immediately following such
birth or placement.
1.21 "Participant" means an Employee who has qualified under the Plan, as
provided in Section III, and whose employment with the Corporation has
not terminated.
1.22 "Plan" means The Raymond Corporation Pension Plan as herein set forth or
as from time to time amended.
1.23 "Plan Year" means the period from January 1, 1989 to December 31, 1989,
and such subsequent period of twelve (12) consecutive months commencing
January 1st.
1.24 "Trust Agreement" means the Agreement by and between the Corporation and
the Trustee dated October 1, 1990 and which is hereby made a part of the
Plan.
1.25 "Trustee" means such banking corporation or trust company as shall have
entered in the Trust Agreement, or successor Trust Agreement, with the
Corporation.
1,26 "Vesting Service" means service recognized for purposes of determining
eligibility for certain benefits under the Plan, determined as provided
in Section 3.1.
1.27 "Year of Service" means any Plan Year during which the Employee has not
less than 1,000 hours of service.
SECTION II - ELIGIBILITY
2.1. Any Employee who was a Participant in the Plan as in effect on December
31, 1988, shall be continued as a Participant under this Plan.
2.2 Any Employee not covered by section 2.1 shall become a Participant in the
Plan on the first day of the calendar month coinciding with or next
following the earlier of completion of one (1) year of Vesting Service
and attainment of age 21.
2.3 The Corporation shall certify to the Administrative Committee the name of
each Employee who becomes a Participant of the Plan, his date of birth,
his date of employment, and such information with respect to his service
and Annual Earnings as the Administrative Committee may require.
2.4 For Plan Years beginning before January 1, 1988, any Employee who first
becomes employed by the Corporation within five (5) years of his normal
retirement date will not be eligible for participation in this Plan.
<PAGE>
2.5 For Plan years beginning on or after January 1, 1988, no Employee shall
be excluded from participation on account of his attained age who has
earned an hour of service on or after such date. For the purpose of
determining when such an Employee (who is not otherwise ineligible to
participate) must become eligible to participate, service credited to the
Employee in the Plan year beginning before January 1, 1988 shall be taken
into account. An Employee who would be eligible to participate taking
such service into account and whose entry date would be before the first
day of the first Plan year beginning in 1988 shall participate in the
Plan as of the first day of such Plan year.
SECTION III - VESTING SERVICE AND BENEFIT SERVICE
3.1 Vesting Service
---------------
a) Except as hereinafter provided, all service with the Company rendered
by an Employee shall be Vesting Service for the purposes of the Plan.
With respect to any Plan Year in which an Employee works at least
1,000 Hours of Service there shall be included in his Vesting Service
a full year of Vesting Service. For any Plan Year in which any
Employee works less than 1,000 hours, there will be included one (1)
month of Vesting Service for each 173 Hours of Service completed.
With respect to meeting the requirement of Section 2.2, completion of
1,000 Hours of Service during the 12 month period beginning with his
date of employment or the Plan Year, which includes the first
anniversary date of the employment date will satisfy the requirement.
Where additional eligibility computation periods are necessary
succeeding Plan Years will be used.
The Administrative Committee shall establish rules, uniformly
applicable to all Employees similarly situated, for determining the
number of hours worked by an Employee in any year. In the event an
Employee completes 1,000 hours of work during the 12 month period
beginning with his date of employment but fails to complete 1,000
hours of work during the calendar year of his employment or during
the calendar year following the date of his employment, he will be
credited with a full year of Vesting Service for that period.
b) There shall be a Break in Service with respect to any Plan Year after
the year in which an Employee first becomes employed and prior to the
year in which he retires, dies or otherwise terminates his employment
with the Company during which he is not credited with more than 173
hours of service. Any service rendered prior to a Break in Service
shall not be restored unless he shall complete at least one (1) year
of Vesting Service following the Break in Service. Any Employee,
except as to such Employees identified in the succeeding sentence,
who has a break in his service and who is re-employed shall
participate immediately on his re-employment, whether he was a vested
or a non-vested participant at the time his break in service
<PAGE>
occurred. If an Employee who has not completed five (5) years of
Vesting Service incurs five (5) consecutive one (1) year Breaks in
Service the service rendered prior to the Break in Service thereafter
be excluded from his Vesting Service.
c) If any Employee shall have been absent from the service of the
Company because of service in the Armed Forces of the United States
and if he shall have returned to the service of the Company within 90
days either (i) after having become entitled to release from active
duty in the Armed Forces or (ii) after hospitalization continuing
after discharge for a period of not more than one (1) year, such
absence shall be considered as Vesting Service.
d) A period during which an Employee is on a layoff of less than two (2)
years or a Leave of Absence shall not be considered as a Break in
Service and, under rules uniformly applicable to all Employees
similarly situated, the Administrative Committee may authorize the
inclusion of such period of leave as Vesting Service.
3.2 Benefit Service
---------------
a) Except as hereinafter provided, all service rendered as an Employee
shall be Benefit Service under the Plan, except that service rendered
prior to a Break in Service which is excluded from Vesting Service in
accordance with Section 3.1 will be excluded from Benefit Service; a
year of Benefit Service is any Plan Year in which the Employee works
not less than 2,000 Hours of Service. The Administrative Committee
shall determine, under rules uniformly applicable to all Employees
similarly situated, the fraction of a year of credited service to be
recognized with respect to any Plan Year of an Employee's service
during which he works less than 2,000 hours but not less than 1,000
hours; but in no event shall such fraction be less than the fraction
the numerator of which is the number of hours worked in such year and
the denominator of which is the normal number of hours worked in a
year by a full time Employee.
b) Upon direction of the Board of Directors uniformly applicable to all
Employees similarly situated, Benefit Service shall include any
period of service in the Armed Forces of the United States which is
included in member's Vesting Service pursuant to Section 3.1(c). The
Administrative Committee may, under rules uniformly applicable to all
Employees similarly situated, grant Benefit Service for any period,
not in excess of two (2) years, during which an Employee is on an
approved layoff or Leave of Absence which is included in his Vesting
Service pursuant to Section 3.1(d). The Compensation for either such
period of absence for which Benefit Service is granted shall be at
the member's rate of Compensation in effect prior to the commencement
of such period.
<PAGE>
3.3 Transfers and Employment with an Affiliated Employer
----------------------------------------------------
a) If a Participant becomes employed by the Corporation in any capacity
other than as an Employee, or by an Affiliated Employer Corporation,
or becomes a Leased Employee, he shall retain any Benefit Service he
has under this Plan, and future years of service with the Corporation
or Affiliated Employer Corporation shall count as Vesting Service
under the Plan. Upon his later retirement or termination of
employment with the Corporation or Affiliated Employer Corporation,
any benefits to which the Participant is entitled shall be determined
under the Plan provisions in effect on the date he ceases to be an
Employee, and only on the basis of his Benefit Service accrued while
he was an Employee.
b) Subject to the Break in Service provisions of Section III, if a
person who is originally employed by the Corporation as a Leased
Employee or in any capacity other than as an Employee, or by an
Affiliated Employer Corporation and subsequently becomes an Employee,
his period of service with the Corporation, or Affiliated Employer
Corporation before becoming an Employee shall count as Vesting
Service under the Plan. Upon his later retirement or termination of
employment, the benefits payable under the Plan shall be computed
under the Plan provisions in effect at that time, and only on the
basis of the Benefit Service accrued while he is an Employee.
Employees of G.N. Johnston Equipment Co.
----------------------------------------
3.4 If an employee of G.N. Johnston Equipment Co., Ltd. becomes an Employee
of the Company, all what would otherwise constitute Service hereunder at
G.N. Johnston Equipment Co., Ltd. will count as Service and Benefit
Service under this Plan.
SECTION IV - RETIREMENT DATES
Normal Retirement Date
----------------------
4.1 The normal retirement date of each Participant shall be the first day of
the month coinciding with or next following the Participant's 65th
birthday.
Early Retirement Date
---------------------
4.2 A Participant may, at his option and upon such notice as the
Administrative Committee may reasonably require, retire from active
service prior to his normal retirement date on the first day of any month
following his completion of fifteen (15) years of Benefit Service and
after attaining his 55th birthday.
<PAGE>
Disability Retirement Date
--------------------------
4.3 A Participant may retire from active service prior to his normal
retirement date if at the time of retirement such Participant shall have
at least fifteen (15) years of Benefit Service and shall have become,
through some unavoidable cause, totally and permanently disabled,
provided that such Employee is eligible for total and permanent
disability benefits under the Social Security Act. The Retirement date in
the event of such Participant's total and permanent disability shall be
the first day of the month coincident with or next following the
expiration of six (6) months from the date on which he became disabled.
For purposes of this Plan, a Participant shall be deemed to be totally
and permanently disabled when such disability shall have continued for a
period of six (6) consecutive months. However, notwithstanding the fact
that the Participant is eligible for total and permanent disability
benefits under the Social Security Act, no benefits shall be payable if
(i) such participant is engaged in occupation or employment for compensa-
tion, or profit in which he is able to earn in excess of $100.00 per
month, or (ii) such disability was contracted, suffered, or incurred
while such Participant was engaged in, or resulted from his having
engaged in, a criminal enterprise, or (iii) such disability resulted from
his habitual drunkenness or the use of narcotics, or (iv) such disability
resulted from self inflicted injury or (v) such disability is directly
incurred in or due solely to the Military Service of the Participant
which prevents him from returning to employment with the Corporation and
for which he receives a disability benefit or pension from the United
States.
Payment of such total and permanent disability benefits to a Participant
shall terminate upon his ceasing to be eligible for total and permanent
disability under the Social Security Act prior to his having attained the
age of 65 years.
Deferred Retirement Date
------------------------
4.4 The deferred retirement date of an Employee who remains in the active
service of the Corporation after his normal retirement date shall be the
first day of the calendar month next following his actual retirement.
SECTION V - RETIREMENT BENEFITS
Retirement Benefits at Normal Retirement Date
---------------------------------------------
5.1 Effective for all retirees on or after January 1, 1990, the annual Normal
Retirement Pension Benefit shall be equal to the greater of (a), or (b)
below:
a) Six-tenths of one (1) percent (.6%) of the Participant's Final
Average Earnings multiplied by the number of years of Benefit
service:
or
b) One hundred fifty-six dollars ($156.00) multiplied by the number of
years of the Participant's service.
<PAGE>
In no event shall any Participant, who was an active Employee on January
1, 1989 receive a lesser pension benefit than he would receive after
giving effect to the accrued benefit such Participant had earned on
December 31, 1988, plus the pension benefit earned since such date in
accordance with the above benefit formulae.
Retirement Benefits at Early Retirement Date
--------------------------------------------
5.2 The annual Early Retirement Pension shall be equal to the Participant's
accrued Normal Retirement Pension based on his Annual Earnings and
Benefit Service as of his date of early retirement and shall be payable
at the option of the Participant (a) commencing as of Normal Retirement
Date or (b) commencing as of actual retirement date or as of the first
day of any month after actual retirement date, but reduced by the
appropriate actuarial factor taking into account the age of the
Participant and the earlier commencement of his retirement benefits. If,
however, the Participant has completed 30 years of Benefit Service and
attained age 62 as of actual retirement date, no reduction shall be
applied.
Retirement Benefit at Disability Retirement Date
------------------------------------------------
5.3 The retirement benefit commencing at disability retirement date for a
Participant who retires on account of total and permanent disability in
accordance with Section 4.3 shall be a retirement benefit commencing on
the date of retirement computed in accordance with Section 5.l. Such
disability retirement benefit shall be payable to him during the
continuance of total and permanent disability until such Participant
attains the age of 65 years. Any such Participant who attains the age of
65 years shall be deemed to have retired as of that time in accordance
with Section 4.1 and shall thereafter be entitled to receive retirement
benefits in the amount as determined in accordance with Section 5.1.
A Participant who has been retired with total and permanent disability
and who has recovered from such disability and is re-employed shall be
reinstated as a Participant in the Plan as though there had been no
interruption in his Vesting Service.
The amount of any payments made to such Participant under any Federal,
State or Foreign statute under which the Corporation contributes through
taxes, except contributions under the Social Security Act, or otherwise,
to provide against injury, disease or disability, whether occupational or
non-occupational, shall also be deducted from the amount of the
Participant's disability retirement benefit.
<PAGE>
Retirement Benefit at Deferred Retirement Date
----------------------------------------------
5.4 If any Participant remains in service after his normal retirement date,
in accordance with Section 4.4, his retirement benefit shall be
suspended for each month during the period of deferred retirement which
constitutes a month of "suspension service". For purposes of this Section
5.4, a month of "suspension service" is a month in which the Participant
completes at least 40 Hours of Service with the Corporation. Such a
Participant will receive his deferred retirement benefit commencing on
his actual retirement date or after a month in which he does not complete
at least 40 Hours of Service. The amount of the deferred retirement
benefit will be determined in accordance with the provisions of Section
5.1 and shall be based on the Annual Earnings, Benefit Service and the
terms of the Plan in effect at the time payments are to commence. If
payments of the benefit are made for at least 4 consecutive months while
the Participant remains in the service of the Corporation, the
"suspension service" rules described in Section 6.6 shall govern.
Spouse's Pension
----------------
5.5 a) In the case of the death on or after August 23, 1984 of a married
Participant, including a Participant whose employment was terminated
on or after August 23, 1984, after he had met the age and service
requirements for any Pension but before his Pension begins, a
spouse's Pension shall be payable to his surviving spouse for life
beginning on the first day of the month immediately after the later
of the Participant's date of death or the date the Participant would
have reached the earliest retirement age under Section 4.2 (Early
Retirement Date), provided that the spouse shall have been married to
the Participant during the one-year period preceding his death. The
Pension subsequently payable to a Participant whose spouse would have
been entitied to a Pension under this Section had the Participant's
death occurred, and the Pension payable to his spouse after his
death, if applicable, shall be reduced for each month in the period
prior to Normal Retirement Date during which the provisions of this
Section 5.5 are in effect with respect to the Participant. No such
reduction shall be made with respect to any period before the
commencement of the election period specified in (d) below. The
factors for Spouse's Coverage During Active Employment and the
Factors for Spouse's Coverage After Retirement or Other Termination
of Service are set forth in Appendix A.
b) The Spouse's Pension shall be equal to (i) in the case of a
Participant who dies after he has completed the age and service
requirements for an early or normal retirement Pension, the Pension
which would have been payable to the spouse if the Participant had
retired on an early, normal or late retirement Pension, whichever is
applicable, beginning on the first day if the month in which he died,
as provided in Section 4.1, 4.2, 4.3, and (ii) in the case of any
other Participant, the Pension which would have been payable to the
spouse if the Participant had terminated employment on the date of
his death, if he was then in active service, had elected to have his
Pension begin on the earliest date provided in Section 4.4 and then
had died on the next following day.
<PAGE>
c) The Corporation shall furnish to each married Participant within the
three-year period preceding the first day of the Plan Year in which
the Participant would attain age 35 or, if later, the date he first
became a Participant under Section II, a written explanation in
nontechnical language which describes the terms and conditions of the
spouse's Pension, the Participant's right to make, and the effect of
an election to waive the spouse's Pension, the rights of the
Participant's spouse and the right to make, and the effect of, a
revocation of such election.
d) An election to waive the spouse's Pension provided under this
Section, or any revocation of that election, may be made at any time
during the period which begins on the first day of the Plan Year in
which the Participant attains age 35 and ends on the date of the
Participant's death. However, in the case of a Participant who has
terminated service, the period during which he may make an election
to waive the spouse's Pension with respect to his Pension accrued
before his termination of service shall not begin later than the date
his service terminates. An election to waive the spouse's Pension or
any revocation of that election shall be made on the form provided by
the Administrative Committee and shall require the written consent of
the spouse, duly witnessed by a Plan representative or Notary Public,
unless the spouse's consent is waived by the Administrative Committee
in accordance with applicable law. The election or revocation shall
be effective when the completed form is filed with the Administrative
Committee.
e) Notwithstanding the provisions of paragraph (a) above, a Participant
who is not in receipt of a Pension as of August 23, 1984, whose
service terminated on or after January 1, 1976 and prior to August
23, 1984 with a right to a deferred vested Pension may elect, during
the period beginning on August 23, 1984 and ending on the earlier of
the commencement date of the Participant's Pension or his date of
death, to have the provisions of this Section apply to him.
No Duplication of Benefits
--------------------------
5.6 There shall be no duplication of benefits upon re-entry, if a
Participant leaves the Plan and subsequently re-enters the Plan.
5.7 Any Participant, or surviving Beneficiary, who has received a
retirement benefit for at least one (1) full year prior to December
31, 1983, shall have his benefit recomputed by increasing said
benefit to the greater of an amount equal to three (3) percent
multiplied by the number of full years elapsed from the date of
retirement to December 31, 1983 times their present annual pension
benefit, or five ($5.00) dollars per month. Such recomputed benefit
shall thereafter be paid to the Participant, or surviving
Beneficiary, as long as he is entitled to receive a benefit under the
provisions of the Plan.
<PAGE>
SECTION VI - PAYMENT OF RETIREMENT BENEFITS
Normal Form
-----------
6.1 The normal form of retirement benefit provided for in Section V, whether
payable at normal, early, or deferred retirement date, shall be made in
monthly installments commencing on the Participant's retirement date and
must be paid in the form of a qualified joint and survivor annuity as set
out below.
If the Participant is married on his retirement date and does not make
any of the elections set forth below, the benefit will be reduced to the
Equivalent Actuarial Value of the benefit determined in Section V and
shall be payable during the Participant's life, with the provisions that
after his death a benefit at one-half the rate of the benefit payable to
the Participant shall be paid during the life of, and to, his spouse.
If the Participant is not married on his retirement date, or if a married
Participant so elects, the benefit will be payable in the amount
determined in accordance with Section V in the form of a life annuity
which provides monthly annuity payments to the Participant during his
lifetime, the first payment becoming due on the Participant's retirement
date provided he is then living. Such payments will terminate with that
last payment due preceding the death of the Participant, except that, if,
at the date of the Participant's death 120 monthly payments have not been
made, payments will be continued to the Beneficiary designated by the
Participant until the total number of annuity payments made to the
Participant and his Beneficiary equals 120. If a Participant fails to
designate a Beneficiary, if a designated Beneficiary dies while receiving
annuity payments, a death benefit equal to the commuted value of any
remaining unpaid stipulated payments will be paid to the estate of the
Participant.
Optional Joint and Survivor Form
--------------------------------
6.2 In lieu of forms of a retirement benefit set forth above, a Participant
may elect the optional joint and survivor form. This form provides
monthly annuity payments, the first payment becoming due on the
Participant's retirement date provided he is then living. Such payments
will be made to the Participant during his lifetime and after his death
will be continued in the same amount, two-thirds thereof or one-half
thereof, as the Participant may elect, to the Beneficiary designated by
the Participant provided such Beneficiary survives the Participant. The
payments will terminate with the last payment due preceding the death of
the Participant or of his Beneficiary, whichever occurs last.
The monthly amount payable thereunder will be determined by applying to
the amount of the retirement benefit on the normal form otherwise payable
to the Participant the percentage applicable to the Participant and his
designated Beneficiary at their respective ages at nearest birthday on
the Participant's retirement date as set forth in Appendix A; such
percentage being based on the proportion of the reduced amount of
retirement benefit which is to be continued to the designated Beneficiary
after the death of the Participant.
<PAGE>
The application of the computation of the Joint and Survivor Form of
benefit, as set out directly above, shall not reduce the benefit which
had been accrued on December 31, 1983, for any individual who was a
Participant before January 1, 1983, utilizing any percentage applicable
from previous tables that varied benefits based on the sex on the
Participant.
Optional Life Form
------------------
6.3 In lieu of the forms of retirement benefit set forth above, a Participant
may elect the optional life form. This form provides monthly payments to
the Participant during his lifetime, the first payment becoming due on
the Participants retirement date provided he is then living. The payments
will terminate with the last payment due preceding the death of the
Participant.
The monthly amount payable under this option will be determined by
applying to the amount of the retirement benefit in the normal form
otherwise payable to a Participant, the percentage from Appendix A
applicable to the Participant for his age at his nearest birthday to his
retirement date.
Elections of Options
--------------------
6.4 a) A married Participant's election of any option which does not provide
for monthly payment to his spouse for life after the Participant's death,
in an amount equal to at least 50% but not more than 100% of the monthly
amount payable under the option to the Participant, shall be effective
only if the spouse's written consent to the election is received by the
Administrative Committee. The spouse's written consent shall be witnessed
by a Plan representative or notary public and shall acknowledge the
effect on the spouse of the Participant's election of the option. If the
Participant establishes to the satisfaction of the Administrative
Committee that spousal consent cannot be obtained because the
Participant's spouse cannot be located, then no spousal consent is
needed.
<PAGE>
b) The Corporation shall furnish to each married Participant within a
reasonable time, but more than 90 days, before payment of his Pension
is to begin, a written explanation in nontechnical terms and
conditions of the joint and survivor Pension provided under Section
6.1, the financial effect upon the Participant's Pension of making
an election of the Optional Joint and Survivor Form (Section 6.2
above) or the effect of making an election for the Optional Life Form
(Section 6.3 above) in lieu of the Normal Form (Section 6.1 above),
the rights of the Participants spouse as provided in paragraph (a)
above, and the right of the Participant to make, and to revoke, an
election under Section 6.2 or 6.3. An election under either 6.2 or
6.3 shall be made on a form provided by the Administrative Committee,
and may be made at any time after the information is furnished to the
Participant and before the date the Participant's Pension begins;
provided that the period during which the election may be made shall
be a period of at least 90 days. However, a married Participant may
file with the Administrative Committee more than 90 days before the
date his Pension is to begin a written request for detailed
information as to the amount of his Pension under the various options
available to him. If he makes that request, the period during which
an election of an optional payment form may be made shall be
extended, if necessary, to include the 60 days following receipt by
the Participant of that information.
c) An election of either of the options under Sections 6.2, or 6.3 may
be revoked on a form provided by the Administrative Committee and a
new election may be made, during the applicable election period. An
electon of an optional benefit shall be effective on the date the
Participant's Pension begins. A revocation of any election shall be
effective when the completed form is filed with the Administrative
Committee. If a Participant who has elected an optional benefit dies
before the date the election of the option becomes effective, the
election shall be revoked. If the Beneficiary designated under an
option dies before the date the election of the option becomes
effective, the election shall be revoked.
d) In the event that a vested Participant has elected to receive a
qualified joint and survivor form of benefit, such Participant:
(i) may elect with the written consent of his or her spouse to a
specified alternate beneficiary not to take the joint and
survivor annuity and,
(ii) may revoke an election not to take a joint and survivor annuity,
or choose again to take a joint and survivor annuity at any time,
or any number of times, within the applicable election period as
set out in Section 5.5(d).
<PAGE>
Frequency of Payment of Retirement Benefits
6.5 Retirement benefits hereunder will be paid monthly except that if such
payments would amount to less than $10.00 each, the right is reserved to
make payments at less frequent intervals; provided, however, that if the
annual rate of retirement benefit payable to a Participant or his
designated Beneficiary is less than $80.00 and the Equivalent Actuarial
Value of the benefit is less than or equal to $3,500, payment shall be
made to such Participant or his designated Beneficiary in one (1) lump
sum equal to the Equivalent Actuarial Value of the retirement benefit and
such payment will be in full settlement of all liability on account of
such Participant or his designated Beneficiary.
Restoration of Retired Participant or Former Participant to Service
6.6 If a retired Participant or former Participant in receipt of a deferred
vested retirement benefit is restored to service with the Corporation
prior to his normal retirement date, his retirement benefit shall cease
and any election of an optional benefit in effect thereunder shall become
void. Any election of a spouse's allowance under Section 9.6 in effect at
the time of his retirement shall again become effective. Any Vesting
Service and Benefit Service to which he was entitled when he retired
shall be restored to him, and upon subsequent retirement his allowance
shall be based on the benefit formula then in effect and his Annual
Earnings and Benefit Service before and after the period of prior
retirement, reduced by an amount of equivalent actuarial value to the
benefits he received before his restoration to service. The part of the
retired Participant's retirement benefit upon subsequent retirement
payable with respect to benefit service rendered before the period of his
previous retirement shall in no event be less that the amount of his
previous retirement benefit modified to reflect any option in effect on
his subsequent retirement.
If any retired Participant or former Participant in receipt of a deferred
vested retirement benefit is restored to service with the Corporation as
an Employee on or after his normal retirement date and completes more
than 750 hours of service in a calendar year, his retirement benefit
shall be suspended for each month during the period of restoration, after
he has completed 750 hours of service, which constitutes a month of
"suspension service".
6.7 Latest Commencement of Payments
a) A Participant's Pension shall begin not later than the 60th day
following the end of the Plan Year in which occurs the latest of:
(i) the Participant's 65 birthday,
(ii) the tenth anniversary of the date on which he became a
Participant, or
<PAGE>
(iii) the date he terminates service with the Corporation.
b) In no event shall the provisions of paragraph (a) above operate so as
to allow the Participant's Pension to begin later than:
(i) the April 1 following the calendar year in which the Participant
attains age 7O 1/2, or
(ii) in the case of a Participant who does not own either (A) more
than five (5) percent of the outstanding stock of the
Corporation, or (B) stock possessing more than five (5) percent
of the total combined voting power of all stock of the
Corporation, the April 1 following the calendar year in which he
retires under Section 4.1, 4.2, or 4.3.
6.8 Anything to the contrary notwithstanding, any distribution from the Plan
shall be made in accordance with section 401(a)(9) of the Code and the
regulations thereunder.
SECTION VII - FINANCING AND CONTRIBUTIONS
7.1 The Corporation has executed a Trust Agreement with the Trustee to manage
and operate the Fund and to receive, hold, invest, and disburse such
contributions, interest and other income as may be necessary to pay the
retirement benefits under the Plan. The Corporation in its discretion may
continue the Trust Agreement or may change from trust funds to insured
funds or from insured funds to trust funds provided (i) the rights and
obligations of the parties shall remain substantially the same except as
may necessarily be changed in order to effect such transfer, and (ii) any
change will not adversely affect Intemal Revenue Service approval. The
Trustee may be authorized to pay retirement benefits directly or if
instructed by the Administrative Committee, to buy group annuity
contracts or individual annuity policies before or after the retirement
of Participants (including but not limited to contracts of the deposit
administration type) and to pay the premium for such contracts or
policies.
7.2 The Corporation shall make such annual contributions to the Fund or pay
such premiums to any insured fund or both as will be sufficient under
sound actuarial principles determined by a qualified actuary to provide
the retirement benefits under the Plan and to meet the minimum
requirements of any applicable law.
Any forfeitures shall be used to reduce the contributions of the
Corporation otherwise payable, and will not be applied to increase the
benefits any Participant would receive under the Plan; forfeitures will
not be used to reduce employers contributions until the year of the Break
in Service.
<PAGE>
SECTION VIII - TERMINATION OF SERVICE
8.1 Upon termination of a Participant's employment for any reason other than
retirement, death or total and permanent disability, the Corporation
shall give prompt written notice thereof to the Administrative Committee
that the service of such Participant has been terminated and the date of
such termination.
8.2 Upon the attainment of Normal Retirement Age, a Participant shall be
100% vested. Upon termination of a Participant's employment with the
Corporation for any reason other than retirement, death or total and
permanent disability, such Participant shall retain rights to a
percentage of the retirement benefit commencing at his normal retirement
date in accordance with Section V hereof as follows:
Vested Interest In
Years of Vesting Service Accrued Retirement Benefit
------------------------ ----------------------------
Less than 5 years No vested benefit
5 years, or more 100% vested
(1) Such Vesting Benefit to be applicable only to Participants
terminating on or after January 1, 1989.
The accrued retirement benefit, in accordance with Section V will be
determined based on Annual Earnings and Benefit Service completed up to
the date of termination of employment. In no event shall a Participant's
vested benefit be less than the amount to which he would have been
entitled based on the Plan provisions in effect on December 31, 1988.
8.3 If, on the date of the Participant's termination of employment, he had
completed 15 years of Benefit Service but had not reached age 55, he may
on or after attainment of age 55 elect to receive, commencing on the
first day of the month next following the date his election is received
by the Administrative Committee, benefits at a reduced amount which shall
be of Equivalent Actuarial Value to the deferred allowance commencing at
this normal retirement date.
8.4 Subject to the provisions of Section XVI, a lump sum payment of
Equivalent Actuarial Value shall be made in lieu of all benefits if the
present value of any Pension amounts to $3,500 or less. The lump sum
payment may be made at any time on or after the date the Participant
terminates employment.
SECTION IX - DEATH BENEFITS
9.1 Upon the death of a Participant before his normal or early retirement
date, whichever is applicable, his death benefits shall be those payable
under provisions of the Corporation's Group Supplemental Term Insurance
program. This death benefit coverage will be subject to such restrictions
as may be contained in the group life insurance contract in force from
time to time which the Corporation intends to maintain with a recognized
insurance company on the life of every Participant.
<PAGE>
9.2 Upon the death of a Participant after his normal retirement date but
prior to actual retirement, any monthly benefit which his designated
Beneficiary would have been entitled to receive had he actually retired
on the day before his death, will be paid to said Beneficiary in the
manner and to the extent provided in Section VI.
9.3 Upon the death of a Participant after his normal retirement date and
after his actual retirement date and after his actual retirement, any
death benefit payable to his designated Beneficiary or to the executor or
the administrator of his estate shall be limited to any monthly benefits
that may then be unpaid, if any, as provided in Section VI.
9.4 Upon the death of a Participant after retirement at his early retirement
date, the death benefit, if any, payable to his designated Beneficiary or
to the executor or administrator of his estate shall be limited to any
monthly benefits that may then be unpaid as provided in Section VI.
9.5 Notwithstanding the foregoing, if a Participant who was a Participant
under the Former Plan dies before his normal retirement date, the death
benefit payable to his estate shall in no event be less than the death
benefit provided under the Former Plan as certified to the Insurance
Company by the Trustee.
9.6 a) A Participant who is employed during the period beginning on the later
of:
(i) The earliest date, as provided for in Section IV, on which a
Participant may elect to receive retirement benefits;
(ii) The first day of the 120th month beginning before the Participant
reaches Normal Retirement Age; or
(iii) The date on which the Participant begins participation, will be
given an opportunity to elect to have a survivor benefit payable
to his or her spouse in event of his or her death prior to Normal
Retirement Age under the Plan. Upon retirement, the allowance
payable to a Participant who has made such election and, if
applicable, to his spouse upon his death after retirement, shall
be reduced by an amount which is of Equivalent Actuarial Value to
the spouse's allowance which would have been provided under such
election had he died prior to retirement. Upon the death of such a
Participant prior to his normal retirement date or his retirement,
whichever occurs first, an allowance shall be payable to his
surviving spouse, provided that he and said spouse have been
married throughout the one (1) year period ending on the date of
his death.
b) The "early survivor annuity" shall be equal to the allowance which
would have been payable to the spouse if the Participant had retired
on an early retirement allowance commencing on the first day of the
month preceding his date of death in accordance with Sections 4.2 and
5.2.
<PAGE>
The Administrative Committee shall give notice to each Participant
six (6) months prior to date he becomes eligible as outlined above,
as to the availability of the "early survivor annuity" and a general
explanation as to the financial impact of making the election.
c) An election under this section shall become effective one (1) year
after the Participant's notice of election is received by the
Administrative Committee, but not earlier than the date on which he
first meets the age and service requirements for early retirement. If
the Participant or his spouse dies prior to the time such election
becomes effective, the election shall thereby be revoked, except that
if the Participant's death is due to accidental causes and occurs
after the date on which he first meets the age and service
requirements for early retirement and such election was made prior to
the occurrence of the accident, the election shall become effective
as of the date of his death. A Participant may revoke an election
under this section either before or after it becomes effective, an
appropriate actuarial reduction shall be made in his retirement
allowance upon his subsequent retirement.
SECTION X - ADMINISTRATIVE COMMITTEE AND ADMINISTRATION
10.1 The general administration of the Plan and the responsibility for
carrying out the provisions of the Plan shall be placed in a
Administrative Committee of not less that three (3) persons appointed
from time to time by the Board of Directors. Any member of the
Administrative Committee may resign by delivering his written resignation
to the Board of Directors and the Secretary of the Administrative
Committee.
10.2 The members of the Administrative Committee shall elect a Chairman from
their number and a Secretary who may be but need not be one of the
members of the Administrative Committee; may appoint from their number
such committees with such powers as they shall determine; may authorize
one or more of their number or any agent to execute or deliver any
instrument or make any payment on their behalf; may retain counsel,
employ agents and provide for such clerical, accounting, actuarial and
consulting services as they may require in carrying out the provisions of
the Plan; may direct the Trustee in the management of the assets of the
Plan; may appoint one or more investment managers to direct the Trustee
in the management of the assets of the Plan provided that such
appointment shall be of no effect unless approved by the Board of
Directors; may allocate among themselves or delegate to other persons all
or such portion of their duties hereunder, other than those granted to
the Trustee under the Trust instrument adopted for use in implementing
the Plan, as they, in their sole discretion shall decide, provided that
any such allocation or delegation shall be of no effect unless approved
by the Board of Directors and shall be periodically reviewed by the
Administrative Committee.
10.3 The Administrative Committee shall hold meetings upon such notice, at
such place or places, and at such time or times as it may from time to
time determine.
<PAGE>
10.4 Any act which the Plan authorizes or requires the Administrative
Committee to do may be done by a majority of its members. The action of
such majority expressed from time to time by a vote at a meeting or in
writing without a meeting shall constitute the action of the
Administrative Committee and shall have the same effect for all purposes
as if assented to by all members of the Administrative Committee at the
time in office.
10.5 No member of the Administrative Committee shall receive any compensation
from the Plan for his services as such.
10.6 Subject to the limitations of the Plan, the Administrative Committee from
time to time shall establish rules for the administration of the Plan and
the transaction of its business. The determination of the Administrative
Committee as to any disputed question shall be conclusive.
10.7 The Administrative Committee shall adopt from time to time service and
mortality tables and the rate or rates of interest, compounded annually,
which shall be used in all actuarial calculations required in connection
with the Plan. As an aid to the Administrative Committee in adopting such
tables and in fixing the rates of the Company contributions payable to
the Plan, the actuary designated by the Administrative Committee shall
make annual actuarial valuations of the contingent assets and liabilities
of the Plan, and shall submit to the Administrative Committee such tables
and rates of contribution as he recommends for use. The Administrative
Committee shall maintain accounts showing the fiscal transactions of the
Plan, and shall keep in convenient form such data as may be necessary for
actuarial valuations of the Plan. The Administrative Committee shall
submit a report each year to the Board of Directors, giving a brief
account of the operation of the Plan during the past year, and a copy of
such report shall be filed in the office of the Plan, where it shall be
open to inspection by any member of the Plan.
10.8 The members of the Administrative Committee shall use that degree of
care, skill, prudence and diligence that a prudent man acting in a like
capacity and familiar with such matters would use in his conduct of a
similar situation.
SECTION XI - NON-ALIENATION OF BENEFITS
11.1 To the extent permitted by law, none of the benefits or payments or
proceeds of any contract arising out of or by virtue of this Plan shall
be subject to any claim or any legal process by a creditor of a
Participant or of any beneficiary, and neither the Participant nor any
beneficiary shall have the right to anticipate, alienate, encumber or
assign any of the benefits, payments, proceeds, or avails arising out of
the Plan, other than pursuant to a "Qualified Domestic Relations Order"
pursuant to section 414(p) of the Code.
<PAGE>
SECTION XII - PAYMENTS OF BENEFITS TO PERSON OTHER THAN DESIGNATED BENEFICIARY
12.1 In the event that there shall be found, upon evidence satisfactory to the
Administrative Committee, that any person to whom a retirement benefit is
payable hereunder is unable to care for his affairs because of illness or
accident, any payment due (unless prior claim therefor shall have been
made by a guardian or other legal representative) may be paid to the
spouse, parent, brother or sister or other party (including private or
public institutions) determined by the Administrative Committee to have
incurred expense for such person or otherwise entitled to payment. Any
such payment shall be a payment for the account of the Participant,
retired Participant or other Beneficiary and shall be a complete
discharge of any liability under the Plan therefor.
SECTION XIII - RIGHTS AND OBLIGATIONS OF THE CORPORATION
13.1 The Corporation by action of its Board of Directors may amend the Plan at
any time and from time to time but no amendment shall make it possible at
any time prior to the satisfaction of all liabilities under the Plan for
any part of the Fund to revert to the Corporation or to be used for or
diverted to purposes other than the exclusive benefit of Participants and
their Beneficiaries either by operation or termination of the Plan,
Deposit Administration Contract or the Trust, by power of revocation or
amendment, by collateral agreement or by any other means, provided,
however, that any funds remaining after satisfaction of all liabilities
under this Plan and due to erroneous actuarial calculations shall be
returned to the Corporation.
13.2 The Plan shall not be deemed to constitute a contract between any
Employee and All Employees shall remain subject to discharge, discipline
or layoff without regard to the existence of the Plan or their
participation in it.
13.3 The Corporation hopes and expects to maintain this Plan as a permanent
and continuing retirement program but in order to guard against
unforeseen circumstances, the right to terminate the Plan and discontinue
all payments to the Trustee and/or on account of any Deposit
Administration Contract to provide benefits hereunder is unconditionally
reserved by the Corporation.
13.4 The Corporation, by action of its Board of Directors, may terminate the
Plan for any reason at any time. In case of termination of the Plan, or
partial termination, the rights of Participants to the benefits accrued
under the Plan to the date of such termination or discontinuance, to the
extent then funded, shall be non-forfeitable.
The funds of the Plan shall be used for the exclusive benefit of
Participants, spouses, former Participants, retired Participants,
Beneficiaries, and contingent annuitants under the Plan as of the date of
such termination or discontinuance of contributions, except as otherwise
provided herein and except that any funds not required to satisfy all
liabilities of the Plan for benefits because of erroneous actuarial
computation shall be returned to the Corporation.
<PAGE>
Upon the complete termination of the Plan, each Participant employed by
the Corporation shall have a fully vested and nonforfeitable interest in
his accrued benefit, as of the date of termination, to the extent then
funded. In such event, the net assets of the Fund, after payment of all
expenses incident to the termination, shall be allocated among the
Participants and their spouses and beneficiaries in accordance with
section 4044 of the Employee Retirement Income Security Act of 1974 and
applicable Pension Benefit Guaranty Corporation regulations, subject to
the approval of the Internal Revenue Service. The Company, in its
discretion, may determine to continue the Fund for the purpose of paying
out funded benefits to Participants and their spouses and their
beneficiaries upon the contingencies and in the circumstances as set
forth in the Plan, with such modifications as may be necessary by reason
of the termination, or at any time may determine to terminate the Fund by
the distribution of all funded benefits through the purchase of annuities
or, if determined by the Company, lump sum payments or any other lawful
means, provided that any annuities purchased shall include terms
consistent with this Plan and that the lump sum payments are of
Equivalent Actuarial Value.
Upon any termination of the Plan that constitutes a partial termination
under applicable law, each affected Participant shall have a fully vested
and nonforfeitable interest in his accrued benefit as of the date of the
partial termination, to the extent then funded. Benefits shall be paid to
Participants affected by the partial termination upon the contingencies
and in the circumstances as set forth in the Plan.
13.5 The annual payments to any Top-25 Employee (as described in (b)) are
restricted to an amount equal to the payments that would be made on
behalf of the Employee under a single life annuity that is of Equivalent
Actuarial Value to the sum of the Employee's accrued benefit and the
Employee's other benefits under the plan.
a) This restriction does not apply however if (1) after payment to an
employee described in (b) of all benefits described in (c), the value
of the Plan assets equals or exceeds 110% of the value of current
liabilities, as defined in section 412(1)(7) of the Code, or (2) the
value of the benefits described in (c) for an employee described in
(b) is less than 1% of the value of such current liabilities.
b) Top-25 Employees - The employees whose benefits are restricted on
distribution include all highly compensated employees and highly
compensated former employes (see (d)), subject to the limitation of
the next sentence. In any one year, the total number of employees
whose benefits are subject to restriction under this Section is
limited to the group of 25 highly compensated employees and highly
compensated former employees with the greatest Compensation as
defined in (e).
c) "Benefit" Defined - For purposes of this Section, "benefit" includes
loans in excess of the amounts set forth in section 72(p)(2)(A) of
the Code, any periodic income, any withdrawal values payable to a
living employee, and any death benefits not provided for by insurance
on the employee's life.
d) Highly Compensated - The term "highly compensated" has the meaning
given that term by section 414(q) of the Code.
<PAGE>
e) Compensation - The term "compensation" has the same meaning as Annual
Earnings.
f) Other Exceptions - The provisions of this Section do not apply if the
Commissioner determines that such provisions are not necessary to
prevent the prohibited discrimination that may occur in the event of
an early termination of the Plan.
13.6 The Plan may not be merged or consolidated with, nor may its assets or
liabilities be transferred to, any other plan unless each Participant,
spouse, former Participant, retired Participant, Beneficiary or
contingent annuitant under the Plan would, if the resulting plan were
then terminated, receive a benefit immediately after the merger,
consolidation, or transfer which is equal to or greater than the benefit
he would have been entitied to receive immediately before the merger,
consolidation, or transfer if the Plan had then terminated.
SECTION XIV - MAXIMUM RETIREMENT BENEFITS
14.1 Maximum Benefit Limitation
(a) The maximum annual Pension payable to a Participant under the Plan,
when added to any pension attributable to contrubutions of the
Corporation or an Affiliated Employer Corporation provided to the
Participant under any other qualified defined benefit plan, shall be
equal to the lesser of (1) $90,000 or (2) the Participant's average
annual remuneration during the three (3) consecutive calendar years
of his participation in the Plan affording the highest such average,
or during all of the years in which he was a Participant of the Plan
if less than three (3) years, subject to the following adjustments:
(i) If the Participant has not been a Participant of the Plan for
at least 10 years, the maximum annual Pension in clause (1)
above shall be multiplied by the ratio which the number of
years of his participation in the Plan bears to 10. This
adjustment shall be applied separately to the amount of the
Participant's Pension resulting from each change in the benefit
structure of the Plan, with the number of the years of
participation in the Plan being measured from the effective
date of each such change.
(ii) If the Participant has not completed 10 years of Vesting
Service, the maximum annual Pension in clause (2) above shall
be multiplied by the ratio which the number of years of his
Vesting Service bears to 10.
(iii) If the Pension begins before the Participant's social security
retirement age but on or after his 62nd birthday, the maximum
Pension in clause (1) above shall be reduced by 5/9 of one
percent for each of the first 36 months plus 5/12 of one
percent for each additional month by which the Participant is
younger than the social security retirement age at the date his
Pension begins. If the Pension begins before the Participant's
62nd birthday, the maximum Pension in clause (1) above shall be
of Equivalent Actuarial Value to the maximum benefit payable at
age 62 as determined in accordance with the preceding sentence.
<PAGE>
(iv) If the Pension begins after the Participant's social security
retirement age, the maximum Pension in clause (1) above shall
be of Equivalent Actuarial Value to that maximum benefit
payable at the social security retirement age.
(v) If the Participant's Pension is payable as a joint and survivor
Pension with his spouse as the Beneficiary, the modification of
the Pension for that form of payment shall be made before the
application of the maximum limitation, and, as so modified,
shall be subject to the limitation.
(vi) As of January 1 of each calendar year beginning on or after
January 1, 1988, the dollar limitation as determined by the
Commissioner of Internal Revenue for that calendar year shall
become effective as the maximum permissible dollar amount of
Pensions payable under the Plan during the calendar year,
including Pensions payable to the Participants who retired
prior to that calendar year, in lieu of the dollar amount in
clause (1) above.
(b) In the case of a Participant who is also a participant of a defined
contribution plan of the Corporation or an Affiliated Employer
Corporation, his maximum benefit limitation shall not exceed an
adjusted limitation computed as follows:
(i) Determine the defined contribution fraction.
(ii) Subtract the result of (i) from one (1.0).
(iii) Multiply the dollar amount in clause (1) of paragraph (a) above
by 1.25.
(iv) Multiply the amount described in clause (2) of paragraph (a)
above by 1.4.
(v) Multiply the lesser of the result of (iii) or the result of
(iv) by the result of (ii) to determine the adjusted maximum
benefit limitation applicable to the Participant.
(c) For purposes of this Section:
(i) the defined contribution fraction for a Participant who is a
participant of one or more defined contribution plans of the
Corporation or an Affiliated Employer Corporation shall be a
fraction the numerator of which is the sum of the following:
(A) the Corporation's and Affiliated Employer Corporation's
contributions credited to the Participant's accounts under
the defined contribution plan or plans,
(B) with respect to calendar years before 1987, the lesser of
the part of the Participant's contributions in excess of 6
percent of his compensation or one-half of his total
contributions to such plan or plans, and with respect to
calendar years beginning after 1986, all of the
Participant's contributions to such plan or plans, and
<PAGE>
(C) any forfeitures allocated to his accounts under such plan
or plans, but reduced by any amount permitted by
regulations promulgated by the Commissioner of Internal
Revenue; and the denominator of which is the lesser of the
following amounts determined for each year of the
Participant's Vesting Service:
(D) 1.25 multiplied by the maximum dollar amount allowed by law
for that year; or
(E) 1.4 multiplied by 25% of the Participant's remuneration for
that year. At the direction of the Administrative
Committee, the portion of the denominator of that fraction
with respect to calendar years ending before 1983 shall be
computed as the denominator of 1982, as determined under
the law as then in effect, multiplied by a fraction the
numerator of which is the lesser of:
(F) $51,875, or
(G) 1.4 multiplied by 25% of the Participant's remuneration for
1981, and the denominator of which is the lesser of:
(H) $41,500, or
(I) 25% of the Participant's remuneration for that calendar
year;
(ii) a defined contribution plan means a pension plan which provides
for an individual account for each participant and for benefits
based solely upon the amount contributed to the participants
account, and any income, expenses, gains and losses, and any
forfeitures of accounts of other participant's which may be
allocated to that participant's accounts, subject to (iii)
below;
(iii) a defined benefit plan means any pension plan which is not a
defined contribution plan; however, in the case of a defined
benefit plan which provides a benefit which is based partly on
the balance of the separate account of a participant, that plan
shall be treated as a defined contribution plan to the extent
benefits are based on the separate account of a participant and
as a defined benefit plan with respect to the remaining portion
of the benefits under the plan;
(iv) the term "remuneration" with respect to any Participant shall
mean all eamings as defined in Section 1.4 of this Plan.
(v) the term "social security retirement age" with respect to any
Participant shall mean age 65 with respect to a Participant who
was born before January 1, 1938; age 66 with respect to a
Participant who was born after December 31, 1937 and before
January 1, 1955; and age 67 with respect to a Participant who
was born after December 31, 1954;
(vi) the term "Equivalent Actuarial Value" means the equivalent
value when computed on the basis of the 1963 George B. Buck
Mortality Table, assuming 80% males and 20% females, and
interest at the rate of five (5) percent per year, compounded
annually; and
<PAGE>
(vii) the term "Pension" means a benefit payable annually in the form
of a straight life annuity (with no ancillary benefits) under a
plan to which employees do not contribute and under which no
rollover contributions are made.
(d) Notwithstanding the preceding paragraphs of this Section, a
Participant's annual Pension payable under this Plan, prior to
any reduction required by operation of paragraph (b) above,
shall in no event be less than
(i) the benefit that the Participant had accrued under the Plan as
of the end of the Plan Year beginning in 1982, with no changes
in the terms and conditions of the Plan on or after July 1,
1982 taken into account in determining that benefit, or
(ii) the benefit that the Participant had accrued under the Plan as
of the end of the Plan Year beginning in 1986, with no changes
in the terms and conditions of the Plan on or after May 5, 1986
taken into account in determining that benefit.
(e) For the purpose of this Section, if the accrued benefit of any
Participant exceeds the benefit limitations under Section 415 of the
Code, as amended by TRA '86, said benefit is reduced, as of the first
limitation year beginning after December 31, 1986 to the level
permitted under TRA '86.
14.2 Top-Heavy Provisions
a) For purposes of this Section, the Plan shall be "top-heavy" with
respect to any Plan Year beginning on or after January 1, 1984 if, as
of the last day of the preceding Plan Year, the present value of the
cumulative Accrued Benefits under the Plan for "key employees"
exceeds 60 percent of the present value of the cumulative Accrued
Benefits under the Plan for all Employees, determined as of the
applicable "valuation date". For purposes of this paragraph (a),
"valuation date" shall mean the date as of which annual plan costs
are or would be computed for minimum funding purposes with respect to
such preceding Plan Year. The determination as to whether an Employee
will be considered a "key employee" shall be made in accordance with
the provisions of Section 416(i) (1) and (5) of the Code and any
regulations thereunder, and, where applicable, on the basis of the
Employee's compensation from the Corporation as reported on Form W-2
for the applicable Plan Year. The present value of Accrued Benefits
shall be computed in accordance with Section 416 (g) (3) and (4) (B)
of the Code on the basis of the 1963 GBB Mortality Table with
interest of 5 percent.
For purposes of determining whether the Plan is top-heavy, the
present value of Accrued Benefits under the Plan will be combined
with the present value of Accrued Benefits or account balances under
any other qualified plan of the Corporation or an Affiliated
Corporation Employer including consideration of any terminated Plan,
including Keogh Plan in which there are Participants who are key
employees or which enables the Plan to meet the requirements of
Section 401 (a)(4) or 410 of the Code, and, in the Corporation's
discretion, may be combined with present value of Accrued Benefits of
account balances under any other qualified plan of the Corporation
<PAGE>
or an Affiliated Corporation Employer in which all members are
non-key employees if the contributions or benefits under that other
plan are at least comparable to the benefits provided under this
Plan.
For Plan years beginning after December 31, 1984, the accrued benefit
of an employee, who has not performed any service for the employer
maintaining the Plan at any time during the five-year period ending
on the determination date, is excluded from the calculation to
determine top-heaviness. When testing for "top-heavy" conditions
non-proportional subsidies, if applicable, shall be considered.
In any Plan year that the Plan is "top-heavy" the annual compensation
of each employee taken into account for such plan year to determine
compensation, or benefit shall not exceed the first $200,000 of such
compensation.
For the purpose of this section only, any determination, as provided
for above, shall use a 6-year graded vesting schedule, as set out
below:
6-Year Graded Vesting Schedule(1)
--------------------------------- Nonforfeitable
Years of Service Percentage
---------------- --------------
2 20
3 40
4 60
5 80
6 or more 100
(1) (If in any event this vesting schedule becomes effective any
Participant having not less than 3 years of service is permitted to
elect, within a reasonable period after the effective date of such
vesting provision to have his nonforfeitable percentage computed
under the Plan without regard to the vesting schedule set out
directly above.)
In any year that the Plan is "top-heavy" the minimum annual benefit
for each non-key employee's minimum annual benefit shall be equal to
the lesser of 20%, or 2% per year of service based on each employee's
average compensation for the five (5) highest consecutive service
years. An Employee who is eligible to participate in any other
benefit plan of the Employer shall have his minimum benefit computed
and recognized under this defined benefit plan.
For the purpose of this section, each non-key employee who has
completed at least 1000 hours of service during an accrual
computation period shall accrue a minimum benefit, as set out above,
for the year in question. Each plan of the Employer in which a "key
employee" participates (in the Plan year containing the date or any
of the four (4) preceding plan years) and each other plan which
enables a "key employee" to participate during the period tested to
meet the requirements of IRC 401 (a) (4), or 410(b) shall be
aggregated for top-heavy testing purposes and are considered the
required aggregation group.
For the purpose of this section, a "non-key" employee is an employee
who is not a key employee and if applicable may include employees who
are former "key- employees".
<PAGE>
In the event that the above top-heavy provisions become effective and
the "non-key" employee is a Participant in any other defined benefit
Plan, defined contribution plan, such benefit, or which have accrued
in such other plans shall be considered as an off-set to the minimum
defined benefit as set out above.
SECTION XV - MISCELLANEOUS
15.1 The headings and sub-headings in the Plan are inserted for reference only
and are not to be considered in the construction of the provisions of the
Plan.
15.2 The Plan may be executed in any number of counterparts, each of which
shall be deemed an original and all of which shall constitute one and the
same instrument sufficiently evidenced by any one thereof.
15.3 The provisions of the Plan shall be interpreted in accordance with
federal laws and regulations and, except to the extent preempted by
federal law, in accordance with the laws of the State of New York.
15.4 Conditions of Employment Not Affected by Plan
The establishment of the Plan shall not confer any legal rights upon any
Employee or other person for a continuation of employment, nor shall it
interfere with the rights of the Corporation to discharge any Employee
and to treat him without regard to the effect which that treatment might
have upon him as a Participant or potential Participant of the Plan.
In case any provisions of the Plan shall be held illegal or invalid for
any reason, such illegality or invalidity shall not affect the remaining
provisions of the Plan which shall remain in full force and effect.
15.5 Lost Beneficiary
Any benefit payable under the Plan shall be forfeited if the Corporation
after reasonable effort is unable to locate the Participant or
beneficiary to whom payment is due. However, any such forfeited benefit
shall be reinstated and become payable if a claim is made by the
Participant or beneficiary for such forfeited benefit.
<PAGE>
SECTION XVI - DISTRIBUTIONS AFTER DECEMBER 31,1992
16.1 This Section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the plan to the contrary that would
otherwise limit a distdbutee's election under this section, a distributee
may elect, at the time and in the manner prescribed by the plan
administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distributee
in a direct rollover.
16.2 Definitions
a) Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit
of the distributee, except that an eligible rollover distribution
does not include any distribution that is one of a series of
substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee
or the joint lives (or joint life expectancies) of the distributee
and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such
distribution is required under section 401 (a)(9) of the Code; and
the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or
a qualified trust described in section 401 (a) of the Code, that
accepts the distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
c) Distributes: A distributee includes an employee or former employee.
In addition, the employee's or former employee's surviving spouse and
the employee's or former employee's spouse or former spouse who is
the alternate payee under a qualified domestic relations order, as
defined in section 414(p) of the Code, are distributees with regard
to the interest of the spouse or former spouse.
d) Direct rollover: A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
(NOTE: TABLE I ATTACHED HERETO, ie., JOINT AND SURVIVOR FACTORS, IS
INCORPORATED HEREIN BY REFERENCE)
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by
its duly authorized officer this 31 day of August 1994.
By: /s/ ROSS K. COLQUHOUN
_______________________________________
Ross K. Colquhoun
President and Chief Executive Officer
EXHIBIT 11
Statement Re: Computation of Per-Share Earnings
Year ended December 31,
1994 1993 1992
---- ---- ----
(In thousands except per share data.)
Primary:
Average Shares Outstanding 6,335 6,325 6,311
Net effect of dilutive stock
options based on the treasury
stock method using average
market price 67 53 40
------- ------- ------
Total 6,402 6,378 6,351
======= ====== ======
Net Income 9,727 5,007 3,961
======= ====== ======
Per Share Amount $1.52(1) $0.78(1) $0.62(1)
======= ====== ======
Fully Diluted:
Average Shares Outstanding 6,335 6,325 6,311
Net effect of dilutive stock
options based on the Treasury
Stock method using the period
end market price, if higher
than the average market price 70 58 51
Assumed conversion of 6.5%
convertible subordinated
debentures (56.45 shs./$1000) 3,246 151 0
------- ------ ------
Total 9,651 6,534 6,362
======= ====== ======
Net Income $9,727 $5,007 $3,961
Add 6.5% convertible subordinated
debenture interest, net of
federal tax effect: 2,467 116 0
------- ------ ------
Net Income $12,194 $5,123 $3,961
======= ====== ======
Per Share Amount $1.26 $0.78(1) $0.62(1)
======= ====== ======
-----------
(1) Primary per share amounts of $1.54 for 1994, $0.79 for 1993 and $0.63 for
1992 and fully diluted per share amounts of $0.79 for 1993 and $0.63 for
1992 reported in the consolidated financial statements exclude the net
effect of dilutive stock options as the aggregate dilution from these
securities was immaterial (less than three percent of earnings per common
share outstanding.)
<PAGE>
Exhibit 13
More Productive Products
Raymond/R/ products are designed to increase productivity and
profitability for our customers. Our focus is to develop better products which
offer the customer ways to reduce costs and increase savings in the
warehousing and distribution environment. More
and more companies are realizing that the ability
to analyze and manage materials handling costs
represents an obvious and valuable opportunity for
savings and profitability.
PICTURE
The patented and proven intellidrive/R/
controls technology from Raymond makes possible
the design of products which are more productive,
maintainable and reliable, and incorporate the
ergonomic benefits so important in today's workplace. Customers can
In addition, the intellidrive control system makes analyze their lift
possible customerization of the products--an ability truck fleet operation
to program the truck to the customer's operation. using the
In addition, guaranteed service plans such as CFPM SMARTi/TM/
(Comprehensive Fixed Price Maintenance) limit the option, the System
customer's operating costs. Management and
Recording Tool for the
intellidrive control
system.
Raymond continues to offer customers more flexibility and productivity in the
reach truck, the flagship of the Raymond product line.
The EASi Reach-Fork/R/ truck, featuring Ergonomically Advanced Systems
with the intellidrive controls technology, can reduce the user's labor costs by
7.5% and increase labor utilization by up to four weeks per year. This
represents an average savings of $2,430 per work shift per year for the
customer. These savings are achieved through use of a simultaneous
function control handle, which saves an average
of seven seconds per work cycle. Faster travel
speeds when loaded and a more productive
control handle add up to measurable savings.
The Reach-Fork truck by Raymond also offers PICTURE
superior capacities to greater heights, a range
of choices that allow the customer to fit the truck
to the application, and upgradeability features
built in. Ergonomic design creates a product that
enables the operator to be more comfortable and
productive.
The EASi Reach-Fork
truck was chosen by
this busy retail
building materials
company for greater
productivity and
operator comfort.
<PAGE>
Customers with busy order picking operations appreciate the advantage of
traveling 7% faster with the intellispeed/TM/ option on the
Raymond/R/ orderpicker. This option maximizes travel speed at any
given height, an important consideration since, typically, at least 50% of
an order picking application is travel. Customers save dollars with a Raymond
orderpicker and reduce their labor costs. Additional productivity advantages
include faster acquisition of the wire in guided applications with the
intelliguide/TM/ wire guidance system and careful attention to
ergonomic design to reduce the risk of repetitive motion disorders. The
orderpicker also can be upgraded to address the changing needs of the
customer's application.
The Swing-Reach/R/ truck by Raymond offers a versatile solution in
operations combining pallet handling and order picking; it is really two trucks
for the price of one. This truck is the most energy efficient of its type and
offers many unique benefits for dual purpose operations. With a Raymond Model
537 truck, customers reduce their labor costs. The Swing-Reach truck travels
8% faster thanks to the intellispeed system. This is especially important,
since typically, 70% of a Swing-Reach truck pallet handling application is
travel. Attention to ergonomics is evident in the design of the
operator's work area and, in particular, in the design of the control
handle. The ability to vary operating stances and positions and the use of
easy-to-read displays providing useful information to the operator are
further evidence of attention
to ergonomic benefits. Since the
Raymond Model 537 turns in 19%
less space, it saves customers
money by reducing the width of
intersecting aisles.
Operators working in demanding
walkie operations have a wide
range of Raymond walkies from
which to choose. The new walkie
handle is angled for the natural,
10 degree position of an
operator's hands, enabling the
operator to use a variety of grips PICTURE
and hand positions. This reduces
the risk of repetitive motion Productivity is critical to this
disorders. Raymond walkies also publishing distribution center, where
feature better load control with dual the EASi Reach-Fork/R/ truck's
lift rams to balance uneven loads labor, space and time savings
and smooth transistor travel control contribute to a more efficient
and coast control. operation.
<PAGE>
Strong Distribution
Distribution of Raymond/R/ branded products in international markets
continues to grow with the expansion of the number of Raymond Dealers
worldwide. Raymond products and services are available throughout North
America and in Australia, Singapore and Israel. Raymond also has appointed
Dealers in Colombia, Costa Rica, Brazil, and Venezuela to further expand
South American distribution.
Raymond Dealers are highly skilled at identifying space savings and
analyzing the materials handling order picking process to recommend
solutions tailored to the customer's specific needs. The Dealerships have
made a commitment to highly-trained salespeople who are graduates of the
D.A.R.T. (Dealer Alliance for Recruiting and Training) Program. This program
prepares salespeople to use state-of-the-art simulation tools and to look for
the best solutions to the unique challenges of each customer's operation.
Maximizing uptime is of paramount concern to our customers. Raymond Dealers
provide continuously trained and factory-certified service technicians to
deliver the best service possible. Quality is also assured through immediate
access to the highest quality O.E.M. parts stocked in Dealer service vans
and in the Dealership's parts inventory. On-line access to the Raymond Parts
Distribution Center in East Syracuse, New York and to all other Raymond
Dealers guarantees that the technician can provide the needed part. The East
Syracuse Parts Distribution facility guarantees 24-hour shipment of
Raymond/R/ parts, using a well-stocked inventory and an efficient
picking system to meet customer needs.
The Dealerships also offer rebuild services to provide expert
reconditioning of Raymond trucks that enable the customer to save money. These
trucks must meet exacting standards to earn the "Raymond Rebuilt" designation.
Raymond Dealers are entrepreneurial individuals committed to growth who
provide immediate service, local involvement in their communities and an
unequaled level of customer support. The collective size and resources of
Raymond and its strong Dealer Network represent a distinct advantage for
our customers.
Raymond and its Dealers have established additional ways to support
customer needs. The CCA (Continuing Customer Audit) Program provides
immediate feedback from customers and ensures the two-way communication so
important in continuous product improvement and exceptional customer service.
Other programs address the needs of key customers who appreciate a national
approach to their purchasing and maintenance requirements.
<PAGE>
Strength in Manufacturing
Not only has Raymond set the world standard in
materials handling equipment design and technology,
but Raymond also is recognized as a leader in
quality manufacturing.
Raymond offers narrow aisle customers the most PICTURE
competitive lead times in the industry. This
represents a challenge to continuously create Continuous improvement
new and more efficient processes in manufacturing. in the assembly process
at Greene (above) has
The Greene manufacturing facility employs the resulted in shorter in-
latest in laser cutting technology to reduce process work times and
production time and costs while delivering a improved quality.
higher quality product. An efficient LAN (Local
Area Network)) enables faster, easier communication not only within the
Greene plant but also with our Brantford manufacturing facility. Work teams
suggest ways to upgrade efficiency in assembly cells and in the stockroom,
while achieving continuous quality improvement in all of the manufacturing
processes.
Raymond/Brantford employs
exacting weld and assembly
techniques through the use
of robotics to enable them
to consistently produce the
highest quality products
while maintaining the
shortest lead times in the
PICTURE narrow aisle lift truck
market. The work force in
Ribbon-cutting Brantford also participates
ceremonies (left) in Employee Involvement
celebrated the Teams. The entire facility
opening of the has been designed to achieve
recent addition improved product flow in what
to the Raymond/ is now a paperless factory.
Brantford plant.
Raymond manufacturing delivers competitive lead times, consistent on-time
delivery and unparalleled product value, both in terms of purchase price and
product quality.
PICTURE
Robotic welding in the Greene manufacturing facility
assures consistency and quality in the production
process.
<PAGE>
Serving More Markets
Raymond is a supplier to a wide range of materials handling markets.
Dockstocker Corporation, a new Raymond subsidiary, was established to
incorporate today's optimum controls technology and ergonomic design into
products designed for the utility truck market. The line of
Dockstocker/TM/ electric counterbalanced trucks and walkies has been
introduced to the North American market through a separate distribution
network of income-dependent salespeople. Dockstocker has set a new
standard in this niche market to ensure that highly trained salespeople will
be dedicated to serving this market. Dockstocker has raised the level of
customer expectations for this type of product.
In the North American market, Raymond also is a manufacturer of narrow aisle
and walkie products for Mitsubishi Caterpillar Forklift America Inc. under
their label; for Caterpillar dealers through a joint venture; of carousels
for Remstar and of a turret
truck for FMC designed for
automated materials
handling operations.
Because of our quality and
reputation for design and
on-time delivery,
Raymond-manufactured
orderpickers and turret trucks PICTURE
have been well accepted in
Europe. These products are
distributed by two of the
largest suppliers in the
European market.
The Dockstocker DSS 350 is designed
for use as a general utility truck
and in busy dock areas. It
features a 3,500 pound capacity,
comfortable padded operator
compartment and displays to provide
the operator with useful information.
<PAGE>
Looking Ahead
Raymond is committed to designing and manufacturing products that set new
standards in productivity to help customers maintain their competitive edge
in warehousing and distribution. These products deliver low cost of
ownership, as well as the reliability and maintainability so important in
today's demanding operations. In setting the world standard for quality and
design, Raymond will continue to provide customers with the best value for
their materials handling investment.
The strength and commitment of Raymond Dealers assures that the services
they provide will deliver the solutions and support Raymond customers have
come to expect.
We have established traditions in the materials handling industry, but are not
bound by them. Accepting the challenge of continuously raising the
expectations of our customers and ourselves will result in increased
profitability for Raymond and for our customers.
PICTURE
Raymond offers a wide variety of products to
meet the demands of each customer's individual
operation, with affordable, productive and
reliable trucks tailored to their needs
"RAYMOND," "REACH-FORK," "SWING-REACH," "INTELLIDRIVE,"
"INTELLIGUIDE," "SMARTI," "INTELLISPEED" and "DOCKSTOCKER"
are trademarks of The Raymond Corporation.
/C/ 1995 The Raymond Corporation. Printed in U.S.A. All Rights Reserved.
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
1994 1993
---- ----
Annual Data
Total Revenues $229,546,715 $171,949,285
Net Income 9,727,271 5,006,813
Net Income Per Share (Primary) 1.54 .79
Orders Received 243,654,325 181,648,721
Order Backlog 78,119,410 52,296,732
Year End Data
Total Assets 204,375,744 190,748,702
Manufacturing Working Capital 46,617,420 68,825,175
Manufacturing Current Ratio 2.5 to 1 4.4 to 1
Long Term Obligations 70,545,500 81,509,500
Shareholders' Equity 80,999,715 73,052,713
Book Value per Common Share 12.77 11.54
Ratio of Long Term Obligations
to Total Capital .47 to 1 .53 to 1
Number of Shareholders of Record 2,477 2,523
Number of Employees 1,498 1,195
Revenues per Employee 153,235 143,891
--------------------------------------------------------------------------------
Contents
Letter to the Shareholders .......................... 1
Financial Summary: Current and Ten Year ............ 2
Management's Discussion & Analysis ................. 4
Financial Statements ................................ 9
Notes to Financial Statements ....................... 16
Directors' Affiliations and Committees .............. 25
Officers ............................................ 26
Subsidiaries and External Services .................. 26
The Raymond Dealer Network .......................... 27
Form 10-K Availability
A copy of The Raymond Corporation's Annual Report to the Securities and Exchange
Commission (Form 10-K) may be obtained, at no charge to any shareholder, by
writing to:
The Raymond Corporation
Shareholder Relations Dept.
P.O. Box 130
Greene, New York 13778-0130
Notice of Annual Meeting
The Annual Meeting of Shareholders
of The Raymond Corporation
will be held Saturday, April 29, 1995
at 11 a.m. in the Greene Central High School,
South Canal Street, Greene, New York 13778.
<PAGE>
--------------------------------------------------------------------------------
To Our Shareholders
1994 saw a dramatic upswing in the forklift industry. The healthy economy was a
factor, but we believe that pent-up demand was what drove the industry to far
outpace the economy. Your Company enforced strict disciplines upon itself to
ensure that we kept our commitment to acceptable market lead times and
maintained control over our manufacturing costs. Our preparation enabled us to
maximize our market opportunities.
Raymond continues to emphasize research and development and in 1994 introduced
several additional models of the reach truck line, including an upgradeable 24
volt to 36 volt version, a Dockstance option and a four-directional version. As
well, an ergonomically advanced walkie line was introduced. By the end of 1994,
most of the product line incorporated the advanced generations of the
intellidrive/R/ control system. This patented control system has established a
world standard for lift truck controls.
Our performance in quality, on-time delivery and design enabled us to expand our
worldwide alliances and distribution, most notably with two agreements in Europe
and one in North America and expansion of our Dealer organization in Mexico,
South America and Singapore.
In 1995, it is our intention to continue to shorten delivery times for new
product development and, therefore, respond even more quickly to the customer's
changing needs.
Records were set in 1994 in shipments, in orders, in backlog, in profits and in
skills development. These results were achieved by hard work, personal growth
and the total involvement of the work force. Being a leader in our business
engenders pride and carries responsibility. We embrace both as we build a solid
future for The Raymond Corporation and its shareholders.
Ross K. Colquhoun
President and Chief Executive Officer
George G. Raymond, Jr.
Chairman of the Board
<PAGE>
--------------------------------------------------------------------------------
Financial Summary: Current and Ten Year
The Raymond Corporation and Subsidiaries
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Years ended December 31, 1994 1993 1992 1991 1990 1989
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Summary of Operations
Net sales, leasing and rental revenues $ 226,727 $ 169,489 $ 146,662 $ 138,824 $ 145,525 $ 163,541
Other income 2,820 2,460 2,071 1,871 1,823 1,770
---------------------------------------------------------------------
Total revenues 229,547 171,949 148,733 140,695 147,348 165,311
---------------------------------------------------------------------
Cost of sales and rentals 170,831 127,911 109,716 109,180 109,953 130,752
Expenses 36,621 31,282 27,586 28,725 28,930 29,890
Interest expense:
Lease financing 2,192 3,044 3,391 3,590 3,792 3,502
Other 3,950 1,765 1,567 2,032 2,151 2,651
---------------------------------------------------------------------
Total costs and expenses 213,594 164,002 142,260 143,527 144,826 166,795
---------------------------------------------------------------------
15,953 7,947 6,473 (2,832) 2,522 (1,484)
Income tax expense (benefit) 6,428 3,202 2,664 (930) 1,092 (506)
---------------------------------------------------------------------
Income (loss) before equity in earnings of
unconsolidated investees 9,525 4,745 3,809 (1,902) 1,430 (978)
Net equity earnings -- unconsolidated investees 202 262 152 377 503 1,374
---------------------------------------------------------------------
Income (loss) from continuing operations 9,727 5,007 3,961 (1,525) 1,933 396
Income (loss) from discontinued operations _ _ _ _ _ (1,616)
---------------------------------------------------------------------
Net income (loss) $ 9,727 $ 5,007 $ 3,961 $ (1,525) $ 1,933 $ (1,220)
=====================================================================
-------------------------------------------------------------------------------------------------------------------------
Statistical Information*
Per common share:
Income from continuing operations (Primary) $ 1.54 $ .79 $ .63 $ (.24) $ .31 $ .06
Net income (Primary) 1.54 .79 .63 (.24) .31 (.19)
Cash dividends _ _ _ _ _ .33
Book value 12.77 11.54 11.00 10.79 11.02 10.71
Weighted average number of shares outstanding 6,334,983 6,324,647 6,311,200 6,309,643 6,309,475 6,306,363
Cash dividends $ _ $ _ $ _ $ _ $ _ $ 2,117
Order backlog 78,119 52,297 31,919 31,430 29,673 38,442
Net income from continuing operations as % of
total revenues 4.2 2.9 2.7 (1.1) 1.3 .2
Net income as % of average shareholders' equity 12.6 7.0 5.8 (2.2) 2.8 (1.8)
-------------------------------------------------------------------------------------------------------------------------
Financial Position
Working capital $ 58,498 $ 82,917 $ 49,000 $ 31,259 $ 30,535 $ 27,412
Total assets 204,376 190,749 153,844 152,443 153,008 156,672
Long-term obligations 70,546 81,510 47,876 39,128 35,571 31,913
Shareholders' equity 81,000 73,053 69,447 68,099 69,530 67,544
</TABLE>
* Restated for the 1994 5% stock dividend.
<PAGE>
<TABLE>
<CAPTION>
Years ended December 31, 1988 1987 1986 1985 1984
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Summary of Operations
Net sales, leasing and rental revenues $ 151,920 $ 126,011 $ 124,929 $ 115,242 $ 108,782
Other income 1,191 838 1,605 1,604 2,047
-----------------------------------------------------------
Total revenues 153,111 126,849 126,534 116,846 110,829
-----------------------------------------------------------
Cost of sales and rentals 121,224 97,180 92,594 77,530 72,264
Expenses 26,575 25,018 22,510 23,293 20,187
Interest expense:
Lease financing 3,607 3,431 2,489 2,939 2,503
Other 1,400 411 703 628 907
-----------------------------------------------------------
Total costs and expenses 152,806 126,040 118,296 104,390 95,861
-----------------------------------------------------------
305 809 8,238 12,456 14,968
Income tax expense (benefit) (181) (624) 3,201 4,779 5,934
----------------------------------------------------------
Income (loss) before equity in earnings of
unconsolidated investees 486 1,433 5,037 7,677 9,034
Net equity earnings -- unconsolidated investees 943 930 973 556 482
-----------------------------------------------------------
Income (loss) from continuing operations 1,429 2,363 6,010 8,233 9,516
Income (loss) from discontinued operations 282 261 217 (455) 169
-----------------------------------------------------------
Net income (loss) $ 1,711 $ 2,624 $ 6,227 $ 7,778 $ 9,685
===========================================================
----------------------------------------------------------------------------------------------------------------
Statistical Information*
Per common share:
Income from continuing operations (Primary) $ .23 $ .38 $ .96 $ 1.33 $ 1.54
Net income (Primary) .27 .42 .99 1.25 1.57
Cash dividends .45 .45 .45 .45 .43
Book value 11.10 11.08 10.98 10.55 9.89
Weighted average number of shares outstanding 6,293,918 6,287,065 6,265,497 6,203,744 6,164,336
Cash dividends $ 2,821 $ 2,815 $ 2,796 $ 2,760 $ 2,647
Order backlog 46,427 42,655 33,157 40,050 26,110
Net income from continuing operations as % of
total revenues .9 1.9 4.7 7.0 8.6
Net income as % of average shareholders' equity 2.5 3.8 9.3 12.3 16.9
----------------------------------------------------------------------------------------------------------------
Financial Position
Working capital $ 41,268 $ 53,807 $ 46,107 $ 45,006 $ 52,419
Total assets 169,476 156,684 128,129 130,085 117,169
Long-term obligations 36,428 39,943 24,462 30,969 25,739
Shareholders' equity 69,803 69,616 68,828 65,471 60,962
* Restated for the 1994 5% stock dividend.
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The Raymond Corporation and Subsidiaries
Overview
The Company operates predominantly in one business segment, that being the
design, manufacture, sale, leasing and short-term rental of materials handling
equipment. Revenues are realized predominantly through its North American Dealer
Network although the Company has expanded in both the domestic and international
markets with minimal capital investment through distribution and O.E.M.
(Original Equipment Manufacturer) supply agreements.
Lease financing and short-term rental operations are conducted through Raymond
Leasing Corporation, a wholly-owned subsidiary. The assets and liabilities
pertaining to these operations are classified under the caption Financial
Services in the consolidated balance sheets.
The major components of the Company's international operations are Raymond
Industrial Equipment, Ltd. a wholly-owned Canadian manufacturing subsidiary and
G.N. Johnston Equipment Co. Ltd. (Johnston), the exclusive Canadian distributor
that is 45% owned by R.H.E. Ltd, a wholly-owned subsidiary of the Company.
Foreign exchange exposure on international operations is limited primarily to
the Canadian dollar and is minimized through the purchase of foreign currency
exchange contracts.
Products produced at the U.S. and Canadian manufacturing facilities are
determined by model type; the U.S. facility produces a wide variety of products,
including some custom-made materials handling equipment, while the Canadian
facility specializes in high volume models that require minimal customization.
The major revenue categories are shown below:
Percentage of Total Revenues 1994 1993 1992
----------------------------------------------------
Narrow and very narrow
aisle applications 57% 53% 51%
All other applications 20% 22% 21%
Repair and replacement parts 17% 18% 20%
Leasing and rentals 5% 6% 7%
Other income 1% 1% 1%
Net Sales
In 1994, net sales were a record $217.8 million, an increase of approximately
$56.5 million or 35.1% from the previous record set in 1993. Net sales in 1993
were $161.3 million, up approximately $23.5 million or 17.0% from the 1992 level
of $137.8 million.
The substantial growth in net sales in 1994 reflects the overall growth in the
North American lift truck market as well as the Company's increased efforts to
expand distribution into different markets. The Company maintained its
significant market share through sales to its North American Dealer Network as a
result of the continued success of its new products with the intellidrive/R/
controls technology and increased sales efforts through D.A.R.T. (the Dealer
Alliance for Recruiting and Training). D.A.R.T. is Raymond's program to increase
and improve the sales force at the Dealership level. Other major increases in
revenue were attained through the National Accounts program and sales to
Material Handling Associates, Inc. (M.H.A.). The National Accounts program,
working in coordination with the Dealer Network, offers selected large customers
single source coordination of their materials handling equipment and service
needs. M.H.A. is the Company's 50% owned joint venture company with Mitsubishi
Caterpillar Forklift America Inc., which distributes equipment manufactured by
Raymond through the Caterpillar distribution network. Sales of repair and
replacement parts and sales resulting from other O.E.M. agreements, including
two for European distribution of products manufactured by Raymond, also
contributed to the increase in net sales in 1994.
The increase in net sales in 1993 resulted primarily from increased unit sales
through the Company's various distribution channels including the North American
Dealer Network, the National Accounts program and M.H.A. Continued market
acceptance of new products enabled the Company to increase its market share in
1993.
Rental Revenues
Rental revenues were $1.9, $1.6 and $1.4 million in 1994, 1993 and 1992,
respectively. Rental revenues were up in 1994 as a result of improved rental
fleet utilization due to increased demand. The increase in 1993 reflects rental
revenues recognized from a new National Accounts customer.
<PAGE>
Lease Finance Revenues
Lease finance revenues increased by approximately $0.3 million or 5.6% to $7.0
million in 1994. In 1993, lease finance revenues decreased by $0.7 million or
10.4% to $6.7 million as compared to the $7.4 million recognized in 1992. The
increased revenues in 1994 primarily reflect the record level of leases booked
as a result of record sales levels attained by The Raymond Corporation. In
conjunction with rising interest rates, Raymond Leasing Corporation increased
its lease rates to customers in the Fall of 1994 although this will not
significantly impact revenues until 1995.
The decline in revenues in 1993 reflected the reduced effective interest rate of
the lease portfolio. Although the net lease portfolio increased $1.9 million in
1993, the majority of the additions occurred in the fourth quarter of the year
and did not significantly impact the earned revenue.
Other Income
Other income was $2.8, $2.5, and $2.1 million in 1994, 1993 and 1992,
respectively. The primary components of other income during these years were
interest income, foreign currency exchange gains, license and royalty fees, and
facility rental income. Increased interest income was earned in 1994 on the
remaining proceeds of the $57.5 million of 6 1/2% convertible debentures issued
in December 1993. The additional other income recognized in 1993 was primarily
the result of fees from a new license agreement.
Cost of Sales
Cost of sales as a percentage of net sales was 77.6%, 78.2% and 78.3% in 1994,
1993 and 1992, respectively. Cost of sales as a percentage of net sales in 1994
was favorably impacted by reduced warranty expenses as a result of more products
incorporating the reliable intellidrive/R/ technology and reduced products
liability costs. In addition, lower manufacturing costs for the Company's
products were achieved through continuing research and development efforts and
improved manufacturing processes as well as increased shipment levels that
permitted fixed overhead costs to be allocated over a larger shipment base.
These cost reductions have enabled the Company to attain an overall improved
cost of sales percentage as sales through the National Accounts program, M.H.A.
and O.E.M. arrangements have increased.
An overall decrease in the cost of sales percentage realized for unit sales in
1993 was partially offset by the fact that as a result of increased unit sales,
the higher margin replacement parts sales constituted a smaller percentage of
total sales. Also, increased expenditures were incurred in 1993 versus 1992 for
the disposition of products liability litigation.
Cost of Rentals
Cost of rentals, which consist primarily of depreciation and maintenance, was
approximately $1.8 million for each of the three years ending December 31, 1994.
Raymond Leasing Corporation has been able to utilize the increased demand for
used equipment as a means to maintain rental fleet equipment at a reasonable
level.
Selling, General and Administrative
Expenses
Selling, general and administrative expenses of $28.5, $26.0 and $22.7 million
were 12.4%, 15.1% and 15.3% of total revenues in 1994, 1993 and 1992,
respectively. The dollar level increase in 1994 resulted primarily from
supporting the increased sales volume, including increased marketing costs
associated with Raymond's continued new product introductions, and increased
benefit accruals including costs associated with stock appreciation rights.
However, the Company's continued efforts to contain costs and focus its
resources have enabled it to continue to reduce selling, general and
administrative costs as a percentage of total revenues.
The increase in expenses in 1993 resulted primarily from expanded engineering
and research and development activities associated with product development and
increased sales expenses incurred to support the increased sales volume.
Effective January 1, 1993 the Company adopted the provisions of Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." This Statement requires the costs
of providing such benefits to be accrued as they are earned. Amortization of the
transition obligation associated with this Statement will be approximately $0.2
million per year through the year 2012.
<PAGE>
Interest Expense
Interest expense related to lease financing is reported net of charges on
intercompany borrowings. Lease finance interest expense of $2.2, $3.0 and $3.4
million represented 31.1%, 45.7% and 45.6% of lease finance revenues in 1994,
1993 and 1992, respectively. The significant decrease in 1994 reflects the fact
that the growth in the lease portfolio was financed with funds from The Raymond
Corporation, including proceeds from the convertible debentures issued in
December 1993, as opposed to external borrowings by Raymond Leasing Corporation.
The decrease in interest expense in 1993 was the result of a decline in average
borrowings.
Other interest expense incurred by the manufacturing divisions was $4.0, $1.8
and $1.6 million in 1994, 1993 and 1992, respectively. The increase in 1994
reflects the increased borrowings attributable to the issuance of convertible
debentures in December 1993. The effect of the increased interest expense was
minimized by increased investment income earned on the remaining proceeds of the
debentures.
Other Expenses
Other expenses were $5.2, $4.0 and $4.3 million, or 2.3%, 2.3% and 2.9% of total
revenues, in 1994, 1993 and 1992, respectively. The primary components of other
expenses are cash discounts paid to Dealers for the timely payments of invoices
and the provision for losses on accounts and leases receivable. The 1993
decrease reflects a reduction in bad debt charges which was partially offset by
the increased amortization of loan expenses associated with the early repayment
of debt obligations.
The increased provisions for profit sharing reflect the increased profitability
of the Company.
Income Tax Expense
Federal, state and foreign income taxes of $6.4 million in 1994 and $3.2 million
in 1993 represented a combined effective tax rate of 40.3%. In 1992, the total
provision for income taxes of $2.7 million reflected a rate of 41.2%. Taxes on
foreign subsidiaries and state income taxes accounted for the majority of the
increase in the effective tax rate from the expected U.S. federal statutory
rate. Note L to the consolidated financial statements shows the detail
components of the effective tax rate. Valuation allowances have not been
required for reported deferred tax assets and the Company is not aware of any
circumstances that would require cash payments to significantly exceed income
tax expense during the next three years.
The Company had previously adopted the liability method of accounting for income
taxes; therefore, the adoption of Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes," in the first quarter of 1993 had no
material effect on the Company's operating results or financial position.
Unconsolidated Investees
The Company's primary unconsolidated investee is Johnston. Johnston is the
exclusive Canadian distributor for all of the Company's products with sales and
service outlets in the principal business regions of the Dominion of Canada.
Other unconsolidated investees include several Dealerships located throughout
the United States and M.H.A.
The Company's net equity in earnings of unconsolidated investees has remained
relatively consistent at $0.2, $0.3 and $0.2 million in 1994, 1993 and 1992,
respectively.
The Company views its Dealer Network as critical to the successful distribution
of its products and has therefore continued to provide investments in and
financing to certain Dealerships to accommodate ownership transitions and enable
them to invest in the salespeople, training and other resources necessary to
increase their market share and profitability. Additional advances and
investments of approximately $3.3 and $6.2 million were made to unconsolidated
investees in 1994 and 1993, respectively.
Liquidity and Sources of Capital
The Company's manufacturing working capital was $46.6 million at December 31,
1994 and its ratio of manufacturing current assets to manufacturing current
liabilities was 2.5 to 1.0. Financial Services total external debt was a
conservative 28.5% of the net investment in leases at December 31, 1994.
The Company used $7.3 million for operating activities in 1994, an increase of
approximately $5.8 million from the $1.5 million used in 1993. Cash and cash
equivalents available at the beginning of the year as well as internally
generated cash in 1994, primarily from net income and changes in working capital
components, was used to fund the $21.4 million of additions to the lease
portfolio. Cash used for investing activities was $7.9 million in 1994 and
included $4.6 million of additions to property, plant and equipment and $3.3
million of investments in, and advances to, unconsolidated investees. Cash flows
from financing activities in 1994 reflected not only normal debt repayments but
available funds enabled the Company to make an accelerated payment of $2.9
million on outstanding debt in order to reduce interest costs.
<PAGE>
The Company used $1.5 million to fund operating activities in 1993, a decrease
of $10.5 million from the $9.0 million provided by operating activities in 1992.
This decrease was primarily attributable to increases in accounts receivable and
the investment in leases which reflected the increased sales volume, changes in
other elements of manufacturing working capital and the decrease in dividends
received from unconsolidated investees. Cash used for investing activities
reflected increased capital expenditures incurred to upgrade the manufacturing
and distribution facilities, increased investment in unconsolidated investees
and proceeds received from the sale of an unused facility. Cash provided by
financing activities reflected the issuance of long-term debt including $57.5
million of convertible debentures. Approximately $27.0 million of the proceeds
was used to repay existing indebtedness.
Maintaining a sound and flexible financial structure through conservative
financial strategies continues to be a high priority for The Raymond
Corporation. In March 1994, the Board of Directors declared a 5% stock dividend
on the Company's common stock payable to shareholders of record as of March 31,
1994. All appropriate per share data and the weighted average shares outstanding
have been restated in the consolidated financial statements to reflect this
dividend. In the fourth quarter of 1989, the Board of Directors voted to suspend
the payment of cash dividends on the Company's common stock. Payment of cash
dividends in the future will depend on a variety of factors including the
Company's earnings, cash flow and financial resources.
The Company's overall financial condition remained strong through 1994. At
December 31, 1994, the Company and its subsidiaries had unused lines of credit
of $37.1 million. Existing formal lines of credit totaling approximately $21.6
million, of which $3.0 million is currently outstanding, may be converted into
long-term debt at the option of the Company and/or Raymond Leasing Corporation.
These credit facilities will enable Raymond Leasing Corporation to obtain the
external funds necessary to repay intercompany borrowings with The Raymond
Corporation as the manufacturing divisions require additional cash.
As discussed in Note H to the consolidated financial statements, Raymond Leasing
Corporation is subject to certain debt agreements that limit cash dividends and
loans to the Company. These restrictions are not expected to affect the
Company's ability to meet its cash requirements. Management foresees no changes
in circumstances which would result in any material decrease or deficiency in
the Company's liquidity or sources of capital.
The Company has plans to increase its level of capital expenditures over the
next two years to continue to upgrade its manufacturing facilities, especially
the Greene, New York facility which is scheduled to obtain new manufacturing
equipment and a modern paint system that will significantly upgrade the
technology of the plant and also increase its efficiency. The expenditures will
be funded by a combination of internally generated resources and existing
credit facilities.
Changing Price Levels
To the extent permitted by competition in general, the Company recovers
increased costs by increasing selling prices over time. As a result of intense
price competition, the Company has not realized any significant growth in
revenues from increased selling prices during the past three years. However,
aggregate unit price increases of approximately 3 1/2% were announced in
December 1994. Cost containment, technological improvements, and improved
manufacturing methods continue to be emphasized as a means to improve product
margins.
The Company uses the FIFO method of accounting for its inventories. Although
management believes that the FIFO method is the method that most appropriately
matches revenues and expenses, the costs of products sold reported in the
financial statements under this method are historical costs which are subject to
inflationary distortion during times of rapidly increasing prices.
The charges to operations for depreciation represent the allocation of
historical costs incurred over past years and are less than if they were based
on the current costs of productive capacity being consumed. Approximately 36% of
the Company's properties have been acquired over the past five years. Assets
acquired in prior years will, of course, be replaced at higher costs. This will
take place over many years. These new assets will result in higher depreciation
charges but in many cases, due to technological improvements, there will be
operating cost savings as well. The Company considers these matters in
determining its pricing policies.
The present tax laws do not allow deductions for adjustments for the impact of
inflation. Thus, taxes are levied on the Company at rates which in real terms
exceed established statutory rates. In general, during periods of inflation this
tax policy results in a tax on shareholders' investment in the Company.
<PAGE>
Contingencies
The Company is currently defending approximately 70 products liability and
similar lawsuits involving industrial accidents. The number of outstanding
lawsuits has decreased by approximately ten from a year ago but has remained
relatively constant over the past several years.
The Company views these actions as part of the ordinary course of its business.
Management believes that none of these lawsuits will individually have a
material adverse effect on the Company. Taken as a whole, the damages claimed
would, if awarded and upheld, have a material adverse effect on the Company but
actual costs of judgments, settlements and costs of defense have not had such an
effect to date. The actual costs of these actions, as well as the related
expenses of administration, litigation and insurance, have averaged less than 2%
of total revenues over the last three years. The effect of these lawsuits on
future results of operations cannot be predicted because any such effect depends
on the operating results of future periods and the amount and timing of the
resolution of these proceedings. The Company has a policy of aggressively
defending products liability lawsuits, which generally take several years to
ultimately resolve. A combination of self-insured retention and insurance is
used to manage these risks and management believes that the insurance coverage
and reserves established for self-insured risks are adequate. The Company's
Dealers contribute to the funding of the Company's products liability program
and, in turn, the Company indemnifies the Dealers against products liability
expense and manages products liability claims.
The Company is also one of sixteen defendants in a private environmental lawsuit
pertaining to a potential site remediation. The plaintiffs have alleged that
scrap metal purchased from the Company was coated with certain solvents and/or
cutting oils. Plaintiffs have the burden of proving the nature and extent of the
Company's contribution to the site, as well as the burden of proving what
portion of the material delivered to the site was "hazardous" as that term is
defined in the environmental statutes. The Company is aggressively defending the
claim and does not believe it is likely to have a material adverse effect on the
Company.
Outlook
Orders received in 1994 were a record $243.7 million, an increase of
approximately $62.1 million or 34.1% from the orders received in 1993. In 1993,
the previous record for orders received was established at $181.6 million, an
increase of $43.3 million or 31.3% from the orders received in the previous
year.
At December 31, 1994, the Company's order backlog (unfilled new equipment
orders) of $78.1 million was also a record and up $25.8 million or 49.4% when
compared with the $52.3 million reported a year ago. Although the Company
participates in what is known as a cyclical industry, the existing backlog and
the current order entry rate provide a solid foundation for the upcoming year.
The Company intends to focus in the future on continued product development,
cost containment and improvements in the manufacturing processes, enhanced
distribution and increased participation in domestic and international markets
through distribution and O.E.M. supply agreements.
As part of this strategy, Dockstocker Corporation, a wholly-owned subsidiary of
The Raymond Corporation, was formed in 1994. This Corporation will utilize the
resources of The Raymond Corporation to create a line of products designed for
work in loading and shipping dock areas, a market segment not specifically
targeted by the Company previously.
<PAGE>
--------------------------------------------------------------------------------
Responsibility for Financial Statements
Management has prepared the financial statements and other sections of this
Annual Report and is responsible for all information and representations
contained therein. The Raymond Corporation and subsidiaries maintain a system of
internal accounting control designed to provide reasonable assurance that
transactions are executed in accordance with management's authorization and are
recorded properly to permit the preparation of financial statements in
accordance with generally accepted accounting principles and that assets are
safeguarded.
The control environment is complimented by an internal audit program that
independently assesses the effectiveness of the internal controls and reports
its findings to management throughout the year.
It is management's opinion that the system of internal accounting control of The
Raymond Corporation and subsidiaries provided reasonable assurance that the
above objectives were achieved during the year ended December 31, 1994.
The Audit Committee of the Board of Directors is composed entirely of directors
who are not employees of the Company. The Committee meets periodically to review
audit plans, financial reporting and related matters. The independent and
internal auditors have unrestricted access to the Committee with or without
management in attendance.
Greene, New York
February 10, 1995
/s/ William B. Lynn
------------------
William B. Lynn
Executive Vice President
/s/ Ross K. Colquhoun
---------------------
Ross K. Colquhoun
President and
Chief Executive Officer
--------------------------------------------------------------------------------
Report of Ernst & Young LLP Independent Auditors
To the Board of Directors and Shareholders
The Raymond Corporation
We have audited the accompanying consolidated balance sheets of The Raymond
Corporation and subsidiaries as of December 31, 1994, 1993, and 1992, and the
related consolidated statements of income, shareholders' equity, and cash flows
for each of the three years in the period ended December 31, 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of The Raymond
Corporation and subsidiaries at December 31, 1994, 1993, and 1992, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles.
As discussed in Notes A, J, and L to the financial statements, in 1993 the
Company changed its method of accounting for income taxes and postretirement
benefits other than pensions.
/s/ Ernst & Young LLP
---------------------
Syracuse, New York
February 10, 1995
<PAGE>
--------------------------------------------------------------------------------
Consolidated Balance Sheets
The Raymond Corporation and Subsidiaries
<TABLE>
<CAPTION>
December 31, 1994 1993 1992
----------------------------------------------------------------------------------------------------------------
Assets
Manufacturing
<S> <C> <C> <C>
Cash and cash equivalents (Note A) $ 5,351,161 $ 28,642,434 $ 4,938,579
Accounts receivable:
Trade, net of allowances ($986,093 in 1994; $658,573 in
1993 and $281,374 in 1992) 20,777,505 15,331,213 11,748,106
Unconsolidated investees 12,132,856 10,783,692 9,123,915
Inventories (Notes A and B) 30,911,341 25,603,622 26,329,151
Deferred income taxes* (Notes A and L) 3,764,243 4,019,935 3,027,466
Prepaid expenses and other current assets 4,656,816 4,943,612 3,049,295
------------------------------------------
Total Manufacturing Current Assets 77,593,922 89,324,508 58,216,512
Investments in and advances to unconsolidated investees, at equity
(Notes A and C) 16,666,728 14,211,982 8,866,718
Property, plant and equipment, at cost (Notes A and D) 46,896,174 43,598,993 46,253,898
Less accumulated depreciation 29,947,379 28,229,772 28,134,794
------------------------------------------
Net property, plant and equipment 16,948,795 15,369,221 18,119,104
Other assets 5,775,276 5,502,334 4,018,860
------------------------------------------
Total Manufacturing Assets 116,984,721 124,408,045 89,221,194
------------------------------------------
Financial Services
Cash and cash equivalents (Note A) 72,302 12,054 27,166
Investment in leases; net of unearned lease income;
net of allowances for doubtful contracts ($1,228,788 in 1994;
$1,069,167 in 1993 and $958,053 in 1992) (Note E) 84,724,886 63,820,909 61,917,637
Property, plant and equipment, at cost (Notes A and D) 234,712 196,832 184,688
Less accumulated depreciation 162,654 147,770 132,988
------------------------------------------
Net property, plant and equipment 72,058 49,062 51,700
Rental equipment, at cost (Note A) 4,327,691 4,785,307 5,047,196
Less accumulated depreciation 2,004,464 2,547,980 2,720,718
------------------------------------------
Net rental equipment 2,323,227 2,237,327 2,326,478
Other assets 198,550 221,305 299,490
------------------------------------------
Total Financial Services Assets 87,391,023 66,340,657 64,622,471
------------------------------------------
Total Assets $204,375,744 $190,748,702 $153,843,665
==========================================
</TABLE>
*Includes Manufacturing and Financial Services
The accompanying notes are a part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
December 31, 1994 1993 1992
----------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Manufacturing
<S> <C> <C> <C>
Current portion of long-term debt (Note H) $ _ $ _ $ 505,783
Accounts payable 14,194,244 8,879,845 9,433,606
Accrued liabilities (Notes A and K) 16,782,258 11,619,488 8,954,669
------------------------------------------
Total Manufacturing Current Liabilities 30,976,502 20,499,333 18,894,058
Long-term debt (Note H) 57,500,000 57,500,000 19,996,776
Deferred income taxes* (Notes A and L) 4,184,235 4,236,268 4,376,486
Deferred compensation 2,140,912 1,578,123 1,718,711
Other liabilities (Note J) 386,408 194,174 _
------------------------------------------
Total Manufacturing Liabilities 95,188,057 84,007,898 44,986,031
------------------------------------------
Financial Services
Accounts Payable 767,205 57,409 30,856
Income taxes* (Note L) 2,230,445 663,565 1,428,927
Accrued liabilities (Notes A and K) 1,037,822 850,617 759,524
Notes payable _ banks (Note H) 6,437,500 4,687,500 2,000,000
Notes payable _ insurance companies (Note H) 17,715,000 27,429,000 35,191,000
------------------------------------------
Total Financial Services Liabilities 28,187,972 33,688,091 39,410,307
------------------------------------------
Shareholders' Equity
Common stock, $1.50 par value: authorized 15,000,000 shares;
(6,364,221 issued in 1994; 6,048,577 issued in 1993;
6,018,964 issued in 1992) 9,546,332 9,072,866 9,028,446
Capital surplus 12,712,723 7,699,014 7,721,560
Retained earnings (Notes H and L) 62,566,473 58,213,804 53,206,991
Cumulative translation adjustments (3,515,662) (1,620,658) (432,469)
------------------------------------------
81,309,866 73,365,026 69,524,528
Less:
Treasury stock, at cost, (21,049 shares in 1994; 20,186 shares
in 1993 and 6,936 shares in 1992) 310,151 312,313 77,201
------------------------------------------
Total Shareholders' Equity 80,999,715 73,052,713 69,447,327
------------------------------------------
Commitments and contingencies (Notes H and N)
Total Liabilities and Shareholders' Equity $204,375,744 $190,748,702 $153,843,665
==========================================
</TABLE>
*Includes Manufacturing and Financial Services
The accompanying notes are a part of the financial statements.
<PAGE>
--------------------------------------------------------------------------------
Consolidated Statements of Income
The Raymond Corporation and Subsidiaries
<TABLE>
<CAPTION>
Years ended December 31, 1994 1993 1992
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues (Note A)
Net sales $217,831,647 $161,271,284 $137,819,776
Rental revenues 1,857,128 1,553,468 1,405,486
Lease finance revenues 7,038,222 6,664,795 7,436,764
Other income 2,819,718 2,459,738 2,071,326
--------------------------------------------
Total Revenues 229,546,715 171,949,285 148,733,352
--------------------------------------------
Costs and Expenses (Note A)
Cost of sales 169,071,126 126,133,017 107,956,179
Cost of rentals 1,759,701 1,778,263 1,759,712
Selling, general and administrative expenses 28,479,497 26,029,624 22,705,684
Employees' profit sharing 2,907,251 1,293,111 582,171
Interest expense:
Lease financing 2,191,684 3,043,764 3,391,054
Other 3,950,452 1,765,391 1,567,336
Other expenses 5,233,695 3,959,112 4,298,212
--------------------------------------------
Total Costs and Expenses 213,593,406 164,002,282 142,260,348
--------------------------------------------
Income before taxes and equity in earnings of
unconsolidated investees 15,953,309 7,947,003 6,473,004
Income tax expense (Notes A and L) 6,427,672 3,201,656 2,664,212
--------------------------------------------
Income before equity in earnings of unconsolidated investees 9,525,637 4,745,347 3,808,792
Net equity in earnings of unconsolidated investees (Note A) 201,634 261,466 152,214
--------------------------------------------
Net Income $ 9,727,271 $ 5,006,813 $ 3,961,006
============================================
Net Income Per Share (Note A):
Primary $ 1.54 $ .79 $ .63
============================================
Fully Diluted $ 1.26 $ .79 $ .63
============================================
</TABLE>
The accompanying notes are a part of the financial statements.
<PAGE>
--------------------------------------------------------------------------------
Consolidated Statements of Shareholders' Equity
The Raymond Corporation and Subsidiaries
Years ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
Total
Common Capital Retained Currency Treasury Shareholders'
Stock Surplus Earnings Translation Stock Equity
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance December 31, 1991 $9,023,592 $ 7,710,947 $49,245,985 $ 2,202,403 $ (84,273) $68,098,654
Net income 3,961,006 3,961,006
Issuance of 3,236 shares under
stock option plan 4,854 10,911 15,765
Treasury shares (1,039) issued (298) 11,383 11,085
Treasury shares (283) acquired (4,311) (4,311)
Currency translation adjustments
(Note A) (2,634,872) (2,634,872)
--------------------------------------------------------------------------------------------------------------------
Balance December 31, 1992 9,028,446 7,721,560 53,206,991 (432,469) (77,201) 69,447,327
Net income 5,006,813 5,006,813
Issuance of 29,613 shares under
stock option plan 44,420 (34,052) 10,368
Treasury shares (2,015) issued 11,506 22,479 33,985
Treasury shares (15,265) acquired (257,591) (257,591)
Currency translation adjustments
(Note A) (1,188,189) (1,188,189)
--------------------------------------------------------------------------------------------------------------------
Balance December 31, 1993 9,072,866 7,699,014 58,213,804 (1,620,658) (312,313) 73,052,713
Net income 9,727,271 9,727,271
Issuance of 302,429 shares
for stock dividend 453,643 4,914,472 (5,374,602) (6,487)
Issuance of 13,215 shares under
stock option plan 19,823 98,672 118,495
Treasury shares (146) issued 565 2,162 2,727
Currency translation adjustments
(Note A) (1,895,004) (1,895,004)
--------------------------------------------------------------------------------------------------------------------
Balance December 31, 1994 $9,546,332 $12,712,723 $62,566,473 $(3,515,662) $ (310,151) $80,999,715
====================================================================================================================
</TABLE>
The accompanying notes are a part of the financial statements.
<PAGE>
--------------------------------------------------------------------------------
Consolidated Statements of Cash Flows
The Raymond Corporation and Subsidiaries
<TABLE>
<CAPTION>
Years ended December 31, 1994 1993 1992
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
Cash Flows from Operating Activities
Net income $ 9,727,271 $ 5,006,813 $ 3,961,006
Adjustments to reconcile net income to net cash (used for) provided
by operating activities:
Depreciation and amortization 4,007,881 4,299,298 4,194,853
Provision for losses on accounts receivable and investment
in leases 1,079,908 646,984 1,200,229
Earnings of unconsolidated investees, net of dividends received (93,665) 420,742 1,326,444
Foreign currency transaction gains (607,762) (553,990) (775,131)
Acquisition of rental equipment (1,956,104) (1,622,984) (1,034,249)
Gains on dispositions of rental equipment (672,190) (431,732) (365,156)
Proceeds from rental fleet sales 1,625,456 1,223,770 1,385,003
Losses on sales of property, plant and equipment 1,398 14,220 9,147
Deferred income taxes 238,732 (1,043,452) (435,373)
Other items, net 1,317,953 (1,249,311) (479,839)
Changes in operating assets and liabilities:
Increase in accounts receivable (7,476,834) (5,577,777) (2,007,046)
(Increase) decrease in investment in leases (21,366,477) (2,259,268) 1,111,066
Increase in inventories and prepaid expenses (6,258,217) (1,923,215) (4,134,995)
Increase in accounts payable and accrued expenses 13,114,995 1,505,703 5,050,744
----------------------------------------------
Net cash (used for) provided by operating activities (7,317,655) (1,544,199) 9,006,703
----------------------------------------------
Cash Flows from Investing Activities
Additions to property, plant and equipment (4,596,668) (3,256,949) (1,532,384)
Proceeds received from sales of property, plant and equipment 11,666 3,179,397 27,548
Investment in, and advances to, unconsolidated investees (3,293,143) (6,197,830) 380,233
----------------------------------------------
Net cash used for investing activities (7,878,145) (6,275,382) (1,124,603)
----------------------------------------------
</TABLE>
The accompanying notes are a part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities
Net additional borrowings (repayments) under lines of credit 3,000,000 (2,000,000) (13,082,727)
Proceeds from long-term debt _ 83,500,000 18,579,884
Repayment of long-term debt (10,964,000) (49,580,318) (10,339,026)
Repayment of capital leases _ _ (618,572)
Cash dividends paid _ _ _
Capital stock transactions, net 121,222 (213,238) 22,539
----------------------------------------------
Net cash (used for) provided by financing activities (7,842,778) 31,706,444 (5,437,902)
----------------------------------------------
Effect of foreign currency rate fluctuations on cash
and cash equivalents (192,447) (198,120) (223,387)
----------------------------------------------
(Decrease) increase in cash and cash equivalents (23,231,025) 23,688,743 2,220,811
Cash and cash equivalents at January 1, 28,654,488 4,965,745 2,744,934
----------------------------------------------
Cash and cash equivalents at December 31, 5,423,463 $ 28,654,488 $ 4,965,745
==============================================
Cash and cash equivalents is comprised of:
Manufacturing $ 5,351,161 $ 28,642,434 $ 4,938,579
Financial Services 72,302 12,054 27,166
----------------------------------------------
$ 5,423,463 $ 28,654,488 $ 4,965,745
==============================================
1994 1993 1992
---------------------------------------------------------------------------------------------------------------------
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Income taxes, net of refunds $ 5,332,402 $ 5,095,707 $ 1,411,326
Interest 6,570,979 4,604,088 5,013,590
</TABLE>
The accompanying notes are a part of the financial statements.
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements
The Raymond Corporation and Subsidiaries
Years Ended December 31, 1994, 1993 and 1992
--------------------------------------------------------------------------------
A. Significant Accounting Policies
(1) Principles of Consolidation: The consolidated financial statements include
the accounts of the Company and its domestic and foreign subsidiaries after
elimination of all significant intercompany accounts and activity.
Unconsolidated investees are stated at cost plus equity in unremitted earnings
since acquisition. The Company's share of net income of unconsolidated investees
is included in consolidated income using the equity method.
The accounts of foreign operations have been translated to U.S. dollars in
conformity with Statement of Financial Accounting Standards No. 52, "Foreign
Currency Translation." Exchange gains and losses arising from transactions are
included in current income. Exchange gains were $608,000, $554,000 and $775,000
in 1994, 1993 and 1992, respectively.
Earnings of consolidated foreign companies were $7,100,000, $4,000,000 and
$3,000,000 in 1994, 1993 and 1992, respectively.
(2) Cash Equivalents: The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash equivalents. These
amounts were $3,805,000, $28,183,000 and $6,745,000 at December 31, 1994, 1993
and 1992, respectively.
(3) Foreign Currency Exchange Agreements: In the normal course of business,
R.H.E. Ltd., a wholly-owned Canadian subsidiary, enters into foreign currency
exchange contracts to hedge foreign currency transactions for periods
consistent with its committed exposures. At December 31, 1994, R.H.E. Ltd. had
forward contracts for $11,850,000 which mature in increments ranging from
$1,000,000 to $2,850,000 on a monthly basis through June 1995. Gains and losses
arising from foreign currency exchange contracts offset the gains or losses on
the assets, liabilities and transactions being hedged. There were no significant
risks associated with these contracts at December 31, 1994.
(4) Inventories: Inventories are stated principally at the lower of cost (FIFO -
first-in, first-out method) or market.
(5) Property and Depreciation: Rental equipment, property, plant and equipment
are stated at cost. Depreciation is provided on the straight line and declining
balance methods for financial reporting and accelerated methods for income tax
purposes.
(6) Income Taxes: The Company had previously adopted the liability method of
accounting for income taxes; therefore the adoption of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," in the first
quarter of 1993 had no material effect on the Company's operating results or
financial position.
The Company considers the undistributed earnings of its foreign subsidiaries at
December 31, 1994 to be indefinitely reinvested.
(7) Revenue Recognition and Related Costs: Revenues from product sales are
recognized based upon deliveries. Lease finance revenues are recognized on fixed
rate, long-term leases on a declining basis over the life of the lease(interest
method). Revenues on variable rate leases are recognized upon the principal
amounts outstanding. Financial Services interest expense is reported net of
charges on inter-company borrowings. Short-term rentals are recognized as
revenues over the term of the contract. Related costs consist primarily of
depreciation and maintenance.
Net sales include sales to unconsolidated investees of $89,804,000, $68,631,000
and $59,302,000 in 1994, 1993 and 1992, respectively.
<PAGE>
(8) Concentration of Credit Risk: The Company's sales are primarily made to its
Dealers in North America who subsequently sell the equipment to customers in
diversified industries in many geographic areas. It is the Company's policy to
have a formal agreement in effect for each Dealer which requires a purchase
money security agreement. The Company performs ongoing credit evaluations of its
Dealers' financial condition.
The investment in leases primarily represents receivables from customers (end
users) of the Company's products. These leases are collateralized by the
equipment. Credit evaluations are performed prior to the approval of a lease
contract. Subsequently, the financial condition of the customer and the value of
the collateral are monitored on an ongoing basis.
Reserves for potential credit losses on accounts and lease receivables are
maintained and such losses have been within management's expectations.
(9) Product Warranties: Estimated product warranty costs are accrued at the time
of revenue recognition.
(10) Insurance Accruals: The Company uses a combination of self-insured
retention and insurance coverage for products liability, workers' compensation
and certain health insurance plans in the U.S.
(11) Research and Development Costs: Research and development costs are charged
to expense as incurred and amounted to $3,958,000 in 1994, $4,251,000 in 1993
and $2,557,000 in 1992.
(12) Postretirement Benefits: Effective January 1, 1993 the Company adopted the
provisions of Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions."
(13) Stock Dividend: On March 5, 1994, the Board of Directors declared a 5%
stock dividend on the Company's common stock payable to shareholders of record
as of March 31, 1994. All appropriate per share data and weighted average shares
outstanding have been restated to reflect this dividend.
<PAGE>
(14) Per Share Amounts: Primary net income per share is computed by dividing net
income by the weighted average number of shares outstanding (1994 - 6,334,983;
1993 - 6,324,647; and 1992 - 6,311,200). Dilution that could result from the
assumed exercise of stock options is not material. Fully diluted net income per
share for 1994 is computed by dividing net income plus after tax interest
incurred on the convertible debentures by the weighted average number of common
shares outstanding after giving effect to dilutive stock options and shares
assumed to be issued on conversion of the convertible debentures (9,650,880).
Reported fully diluted and primary net income per share are the same for 1993
and 1992 as dilution from the assumed conversion of the convertible debentures
issued on December 15, 1993 and the exercise of stock options was not material.
(15) Reclassification: Certain amounts in the financial statements and footnotes
for 1993 and 1992 have been reclassified to conform to the 1994 presentation.
--------------------------------------------------------------------------------
B. Inventories
The composition of inventories at December 31 was:
1994 1993 1992
------------------------------------------------------------
Materials $10,310,528 $ 9,197,663 $ 8,853,533
Work in
process 18,900,886 15,617,577 16,112,385
Finished
goods 1,699,927 788,382 1,363,233
--------------------------------------------
$30,911,341 $25,603,622 $26,329,151
============================================
--------------------------------------------------------------------------------
C. Unconsolidated Investees
Investments in and advances to unconsolidated investees at equity are summarized
as follows at December 31:
1994 1993 1992
------------------------------------------------------------
G.N. Johnston Equipment Co. Ltd.
(A Canadian distributor 45% owned by R.H.E. Ltd.):
Investment* $ 4,661,301 $ 4,596,936 $ 5,079,872
Advances 3,109,398 679,860 _
--------------------------------------------
7,770,699 5,276,796 5,079,872
Other unconsolidated investees (U.S. Dealers) at
various percentages of ownership:
Investments* 3,910,726 4,095,186 3,170,020
Advances 4,985,303 4,840,000 616,826
--------------------------------------------
8,896,029 8,935,186 3,786,846
--------------------------------------------
$16,666,728 $14,211,982 $ 8,866,718
============================================
*Investments are stated at cost, plus equity in subsequent earnings, net of
dividends.
At December 31, 1994, consolidated retained earnings included $5.2 million of
undistributed earnings of the Company's unconsolidated investees.
Fifty-five percent of the common shares of G.N. Johnston Equipment Co. Ltd. and
various percentages of the other unconsolidated investees are controlled by
their management. Upon death or termination of employment, Raymond has agreed to
cause the purchase of management's shares based upon a predetermined valuation
method. These agreements further provide, under specified conditions, that any
of the shares held by Raymond may be purchased by management at a price which
will return to Raymond its investment.
The unconsolidated investees also include Material Handling Associates, Inc.
(M.H.A.), a 50% owned joint venture company that was formed in 1991 with
Mitsubishi Caterpillar Forklift America, Inc. The Company's minimal financial
investment in this joint venture has no carrying value as a result of the
initial costs incurred by M.H.A. to develop and market its products.
<PAGE>
The following is summarized financial information for the unconsolidated
investees:
(in Thousands) 1994 1993 1992
----------------------------------------------------------------------
Revenues $225,175 $173,300 $150,772
Gross margin 41,901 36,026 32,856
Net income (loss) 1,634 152 (2,325)
Current assets 55,215 47,114 42,351
Noncurrent assets 24,304 20,855 19,901
Current liabilities 39,373 36,865 34,801
Noncurrent liabilities 22,897 14,875 11,229
The following presents summarized information of Raymond Leasing Corporation
that is contained in the Company's consolidated financial statements to conform
with the provisions of Statement of Financial Accounting Standards No. 94,
"Consolidation of All Majority Owned Subsidiaries":
(in Thousands) 1994 1993 1992
-----------------------------------------------------------------------
Revenues $ 10,521 $ 9,462 $ 10,227
Gross margin 4,602 3,736 3,944
Net income 1,956 1,522 1,417
Total assets 87,510 66,354 65,467
Total liabilities 59,380 40,181 40,816
-----------------------------------------------------------------------
D. Property, Plant and Equipment
The composition of property, plant and equipment for Manufacturing and Financial
Services at December 31 was:
1994 1993 1992
-----------------------------------------------------------------------
Land $ 323,122 $ 317,972 $ 1,069,365
Buildings and
building
equipment 15,981,305 15,494,005 18,511,080
Machinery,
equipment
and tools 23,332,235 21,183,254 20,163,465
Furniture and
fixtures 7,494,224 6,800,594 6,694,676
-------------------------------------------
$47,130,886 $43,795,825 $46,438,586
===========================================
<PAGE>
--------------------------------------------------------------------------------
E. Net Investment in Leases
The Raymond Leasing Corporation leases Raymond/R/ equipment to customers and its
Dealers, including equity investees, under arrangements covering three to seven
years. The net investment in direct financing leases represents the present
value of future minimum lease payments and the residual value of the equipment
of $19,444,000, $15,367,000 and $14,906,000 at December 31, 1994, 1993 and 1992,
respectively. Unearned lease income on fixed rate leases totaled $14,171,000,
$10,001,000 and $10,473,000 at December 31, 1994, 1993 and 1992, respectively.
At December 31, 1994 future minimum lease payments to be received are as
follows:
Year
----------------------------------------------------------
1995 $29,639,818
1996 20,693,854
1997 15,157,766
1998 9,440,157
1999 4,171,294
Thereafter 349,073
-----------
Total future minimum lease payments 79,451,962
Residual values 19,443,587
-----------
98,895,549
Less unearned income 14,170,663
-----------
$84,724,886
===========
--------------------------------------------------------------------------------
F. Fair Value of Financial Instruments
The carrying amounts and fair value of significant financial instruments at
December 31 were as follows:
(in Thousands)
--------------------------------------------------------
1994 Carrying Amount Fair Value
---- --------------- ----------
Investment in leases $ 84,725 $ 82,737
Manufacturing debt 57,500 64,400
Financial Services debt 24,153 24,276
1993
----
Investment in leases $ 63,821 $ 63,614
Manufacturing debt 57,500 58,938
Financial Services debt 32,117 33,452
1992
----
Investment in leases $ 61,918 $ 62,444
Manufacturing debt 20,503 20,440
Financial Services debt 37,191 37,250
The carrying value of cash and cash equivalents approximates fair value because
of the short-term maturities of these instruments.
The fair value of the investment in leases is estimated by discounting future
cash flows, using current interest rates at which similar leases would be
entered into with borrowers with similar credit ratings and maturities.
The fair value of the Company's Manufacturing debt is estimated based on the
quoted market price.
The fair value of Financial Services debt is estimated using discounted cash
flow analyses, based on current rates offered to the Company for similar types
of borrowing arrangements.
The fair value of foreign currency exchange agreements is not significant due to
their short-term maturities and the fact that the outstanding agreements were
purchased near year-end.
<PAGE>
--------------------------------------------------------------------------------
G. Stock Options
The shareholders of the Company have approved stock option plans for officers,
directors and key employees. At December 31, 1994, there are 73,398 unoptioned
shares available under these plans. The exercise price of options granted is
equal to the fair market value of the common stock on the date of grant, except
for greater than 5% shareholder officers whose exercise price is 110% of the
fair market value on the date of grant, and options expire ten years from the
date of the grant.
The status of these plans at December 31 was as follows (the stock option data
for 1993 and 1992 has been restated to reflect the effects of the 1994 5% stock
dividend):
Outstanding Options
Options Price Range Exercisable
---------------------------------------------------
1994 395,475 $ 8.04 - $20.24 320,030
1993 338,705 8.04 - 20.24 258,002
1992 398,631 8.04 - 20.24 298,972
Options exercised in these plans are summarized as follows:
Options
Exercised Price Range
---------------------------------------------------
1994 18,680 $ 8.04 - $16.42
1993 133,599 8.04 - 16.63
1992 13,286 9.41 - 9.52
Stock options issued to officers and key employees are subject to stock
appreciation rights covering up to one-half the number of optioned shares.
Options outstanding subject to stock appreciation rights at December 31 were:
1994 - 342,742, 1993 - 287,504, 1992 - 356,208. The exercise of stock
appreciation rights by an optionee is in lieu of exercising the option to
purchase and will result in a reduction of an equivalent number of optioned
shares.
Stock appreciation rights provide for cash payment equal to the appreciation in
value of the shares under option from the date the option was granted.
<PAGE>
--------------------------------------------------------------------------------
H. Debt Obligations
<TABLE>
<CAPTION>
1994 1993 1992
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Manufacturing Long-Term Debt
Senior Debt
Various notes, repaid in 1993 $ _ $ _ $20,502,559
Subordinated Debt
6.50% convertible debentures due December 15, 2003. Interest is
payable semi-annually 57,500,000 57,500,000 _
--------------------------------------------
Total Long-Term Debt 57,500,000 57,500,000 20,502,559
Less Current Portion _ _ 505,783
-------------------------------------------
Manufacturing Long-Term Portion of Debt $57,500,000 $57,500,000 $19,996,776
===========================================
Financial Services Debt
Short-term borrowings under lines of credit at variable interest rates
(7.00% in 1994 and 6.38% in 1992) $ 3,000,000 $ _ $ 2,000,000
6.35% note, principal is payable in quarterly installments of $312,500
through July 1, 1997. Interest is payable quarterly 3,437,500 4,687,500 _
8.75% note, principal is payable in annual installments of $2,857,000
through March 1, 1996. Interest is payable semi-annually 5,715,000 11,429,000 14,286,000
8.86% note, principal is payable in annual installments of $4,000,000
through November 27, 1997. Interest is payable semi-annually 12,000,000 16,000,000 20,000,000
10.63% note, repaid in 1993 _ _ 905,000
-------------------------------------------
Total Financial Services Debt $24,152,500 $32,116,500 $37,191,000
===========================================
</TABLE>
Annual repayments of debt obligations are as follows:
Manufacturing Financial
Debt Services Debt
------------------------------------------------------------
1995 $ _ $11,107,000
1996 _ 8,108,000
1997 _ 4,937,500
1998 _ _
1999 _ _
Thereafter 57,500,000 _
-------------------------------------
Total $57,500,000 $24,152,500
=====================================
The 6.50% convertible subordinated debentures are convertible into shares of
common stock at a rate adjusted for the 1994 5% stock dividend of approximately
56.47 shares for each $1,000 principal amount of debentures. The Company has
reserved approximately 3,246,000 shares of common stock for such conversion.
These debentures are redeemable at prices ranging from 103.50% of principal to
par depending upon the redemption date. The debentures are convertible at any
time prior to maturity and are redeemable any time on or after December 15,
1996, in whole or in part, at the option of the Company.
Terms of certain notes provide, among other things, that Raymond Leasing
Corporation, a wholly-owned subsidiary, must maintain a minimum working capital
and a specified working capital ratio, and is subject to certain debt agreements
that limit cash dividends and loans to the Company. At December 31, 1994, the
restricted retained earnings of Raymond Leasing Corporation were approximately
$24,091,000.
The Company and its subsidiaries had unused lines of credit totaling $37,127,000
at December 31, 1994. At the Company's option, existing formal lines of credit
totaling approximately $21,600,000, of which $3,000,000 is currently
outstanding, may be converted to long-term debt. No significant commitment fees
are paid for these lines.
Rent expense under operating leases amounted to approximately $1,601,000,
$1,726,000 and $1,679,000 in 1994, 1993 and 1992, respectively. At December 31,
1994, the Company was obligated for future minimum lease payments under
noncancelable operating leases for certain equipment as follows:
1995 $ 869,000
1996 473,000
1997 253,000
Thereafter _
----------
$1,595,000
==========
<PAGE>
--------------------------------------------------------------------------------
I. Retirement and Benefit Plans
The Company has noncontributory group trusteed retirement plans covering
substantially all of its employees. The benefits are based on years of service
and/or compensation. The Company's funding policy is to contribute annually the
maximum amount that can be deducted for federal income tax purposes.
Contributions are intended to provide not only for benefits attributed to
service to date, but also for those expected to be earned in the future. The
following table sets forth the plans' funded status and amounts recognized in
the Company's consolidated balance sheets at December 31:
(in Thousands) 1994 1993 1992
-----------------------------------------------------------------------
Actuarial present
value of benefit
obligation:
Accumulated benefit
obligation, including
vested benefits of
$15,298 in 1994,
$15,414 in 1993
and $13,149 in 1992 $(16,532) $(16,811) $(13,944)
=====================================
Plan assets at fair value,
primarily listed stocks
and bonds held in
trust 24,990 26,322 23,840
Projected benefit
obligation for service
rendered to date (21,662) (22,931) (19,197)
-------------------------------------
Plan assets in excess
of projected benefit
obligation 3,328 3,391 4,643
Unrecognized net
transition asset (2,038) (2,415) (2,787)
Unrecognized prior
service cost 363 403 545
Unrecognized net loss
(gain) from past
experience different
from that assumed and
effect of change in
assumptions 145 942 (261)
-------------------------------------
Prepaid pension cost
included in
other assets $ 1,798 $ 2,321 $ 2,140
=====================================
Net pension cost for the plans included the following components:
(in Thousands) 1994 1993 1992
-----------------------------------------------------------------------
Service cost _ benefits
earned during the
period $ 1,378 $ 958 $ 1,045
Interest cost on
projected benefit
obligation 1,604 1,449 1,510
Actual return on
plan assets 341 (2,619) (1,972)
Net amortization
and deferral (2,773) 397 (135)
------------------------------------
Net periodic
pension cost $ 550 $ 185 $ 448
====================================
<PAGE>
The assumptions used to develop the projected benefit obligation as of December
31 were as follows:
1994 1993 1992
-----------------------------------------------------------------------------
Weighted average
discount rate 8.50% 7.00% 8.00%
Rate of increase in
compensation 5.50% 5.50% 5.50%
Expected return on
plan assets 8.50% 8.50% 8.50%
The actuarial present value of the projected benefit obligation for the U.S.
plan decreased by approximately $4.2 million at December 31, 1994 and increased
approximately $2.6 million at December 31, 1993 as a result of the changes in
the weighted average discount rate. The decrease in 1994 was partially offset by
changes in the actuarial assumptions for the Company's foreign plan.
The Company has profit sharing plans covering substantially all of its
employees. The aggregate expense of these plans, as determined by the Board of
Directors, was $2,907,000 in 1994, $1,293,000 in 1993 and $582,000 in 1992. In
addition, a salary-reduction 401(k) Plan is offered to the Company's U.S.
employees.
The Company has an unfunded supplemental benefits equalization plan designed to
maintain benefit levels for all employees at the plans' formula levels in
instances where individual benefits are limited by the Employee Retirement
Income Security Act of 1974 and the Internal Revenue Code.
A deferred compensation plan is provided for employees and directors whereby the
individual has the right to defer a portion of his or her current salary. The
liability for amounts so deferred has been accrued.
The Company has a formal bonus plan for key executives. The plan provides, among
other things, that the annual bonus be computed on income after consideration
for a return on consolidated shareholders' equity. Charges to operations under
this plan were $1,373,000 in 1994, $520,000 in 1993 and $349,000 in 1992.
<PAGE>
--------------------------------------------------------------------------------
J. Postretirement Benefits
In addition to the Company's defined benefit pension plans, the Company sponsors
a defined benefit health care plan that provides postretirement medical
benefits. The plan is available to certain existing U.S. retirees at March 31,
1993. In addition, U.S. full-time employees who had attained age 55 with at
least 15 years continuous service as of March 31, 1993 are eligible to receive
medical benefits under the plan subject to a premium limitation of $200 per
month. No other current or future employees will be covered by this plan. The
plan contains other cost sharing features such as deductibles and coinsurance.
The Company's policy is to fund the cost of these medical benefits as claims are
submitted.
In 1993, the Company adopted Statement of Financial Accounting Standards No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions."
The effect of adopting the new rules increased 1993 net periodic postretirement
benefit cost by $194,000 and decreased 1993 net income by approximately
$116,000. Postretirement benefit cost for 1992, which was recorded on a cash
basis, was not restated.
The following table presents the plan's funded status reconciled with amounts
recognized in the Company's consolidated balance sheets at December 31:
(in Thousands) 1994 1993 1992
---------------------------------------------------------------------
Accumulated
postretirement
benefit obligation:
Retirees $ (2,777) $ (3,805) $ (3,138)
Fully eligible active
plan participants (835) (1,086) (963)
Other active plan
participants (38) (43) (44)
----------------------------------------
(3,650) (4,934) (4,145)
Plan assets at fair value _ _ _
----------------------------------------
Accumulated
postretirement
benefit obligation in
excess of plan assets (3,650) (4,934) (4,145)
Unrecognized net
(gain)/loss (467) 802 _
Unrecognized transition
obligation 3,731 3,938 4,145
----------------------------------------
Accrued postretirement
benefit cost $ (386) $ (194) $ _
========================================
Net periodic postretirement benefit cost includes the following components:
(in Thousands) 1994 1993 1992
---------------------------------------------------------------------
Service cost $ 5 $ 3
Interest cost 314 318
Amortization of transi-
tion obligation over
20 years 207 207
Net amortization and
deferral 7 _
----------------------------------------
Net periodic postretire-
ment benefit cost $ 533 $ 528 $ 205
========================================
<PAGE>
The assumptions used to develop the net postretirement benefit expense and the
present value of benefit obligations were as follows:
1994 1993 1992
-------------------------------------------------------------------------------
Weighted average
discount rate 8.50% 7.00% 8.00%
Health care cost trend rate:
Retirees under age 65 10.50% 11.00% 12.00%
Retirees age 65 and
older 8.00% 8.25% 9.00%
The health care cost trend rate for retirees under age 65 is assumed to decline
by 1/2% per year until an ultimate rate of 5.50% is reached in 2005 and later
years. For retirees age 65 and older, the health care cost trend rate is assumed
to decline by 1/4% per year until an ultimate rate of 5.50% is reached in 2005
and later years.
The accumulated postretirement benefit obligation decreased by approximately
$470,000 in 1994 and increased by approximately $268,000 in 1993 as a result of
the changes in the weighted average discount rate.
The effect of increasing the assumed health care cost trend rates by one
percentage point in each year would increase the accumulated postretirement
benefit obligation as of December 31, 1994 by approximately $215,000 and
increase the aggregate of the service and interest cost components of net
periodic postretirement benefit cost for 1994 by $43,000.
<PAGE>
--------------------------------------------------------------------------------
K. Accrued Liabilities
Accrued liabilities for Manufacturing and Financial Services are summarized as
follows:
1994 1993 1992
--------------------------------------------------------------------------------
Insurance $ 6,113,160 $ 4,764,346 $4,174,053
Employee
compensation 3,703,060 2,321,835 1,604,902
Service
agreements 2,619,284 1,840,472 1,463,451
Profit sharing
contribution 1,409,356 596,356 211,865
Commissions 981,203 646,311 332,400
Stock
appreciation
rights 887,641 537,953 613,454
Interest 510,281 904,066 899,573
Other 1,596,095 858,766 414,495
---------------------------------------------------
$17,820,080 $12,470,105 9,714,193
===================================================
--------------------------------------------------------------------------------
L. Income Taxes
The Company had previously adopted the liability method of accounting for income
taxes; therefore, the adoption of Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes," in the first quarter of 1993 had no
material effect on the Company's operating results or financial position and, as
permitted under the rules, the 1992 financial statements were not restated.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and amounts used for income tax purposes. Significant components of the
Company's deferred tax liabilities and assets as of December 31 are as follows:
(in Thousands) 1994 1993
--------------------------------------------------------------------------------
Deferred tax liabilities:
Lease finance revenues $4,207 $3,892
Excess tax over book depreciation 1,262 1,253
LIFO inventory accounting change 707 943
Pension assets 621 849
Other 670 576
------------------------------
Total deferred tax liabilities 7,467 7,513
------------------------------
Deferred tax assets:
Insurance reserves 2,058 1,620
Compensation 1,846 1,129
Accounts receivable 1,088 595
Service agreements 641 448
Inventory 640 617
Other 774 738
Alternative minimum tax credit
carryforward _ 2,150
------------------------------
Total deferred tax assets 7,047 7,297
------------------------------
Net deferred tax liability $ 420 $ 216
==============================
The components identified above were also the significant temporary differences
relating to the deferred tax liability and benefit for 1992.
The components of income before income taxes consisted of the following:
(in Thousands) 1994 1993 1992
--------------------------------------------------------------------------
Domestic $ 5,645 $2,184 $2,388
Foreign 10,308 5,763 4,085
----------------------------------------------
$15,953 $7,947 $6,473
==============================================
<PAGE>
Federal, foreign and state income tax expense (benefit) consisted of the
following:
(in Thousands) 1994 1993 1992
----------------------------------------------------------------------------
Currently payable:
Federal $1,637 $1,727 $1,391
Foreign 4,199 2,321 1,536
State 353 197 172
------------------------------------------------------
6,189 4,245 3,099
------------------------------------------------------
Deferred:
Federal 401 (952) (452)
Foreign (250) (34) 83
State 88 (57) (66)
------------------------------------------------------
239 (1,043) (435)
Total income tax
expense $6,428 $3,202 $2,664
======================================================
The differences between income tax provisions for 1994, 1993 and 1992 and the
amounts computed by applying the U.S. Federal statutory rate (35% in 1994 and
34% in 1993 and 1992) are explained as follows:
(in Thousands) 1994 1993 1992
-----------------------------------------------------------------------------
Statutory provision $5,584 $2,702 $2,201
State income taxes, net
of federal tax benefit 287 92 70
Foreign subsidiaries 341 328 230
Other -- net 216 80 163
-----------------------------------------------
Provision $6,428 $3,202 $2,664
===============================================
The Raymond Corporation files a consolidated federal tax return which includes
Raymond Leasing Corporation and all other significant domestic subsidiaries.
Deferred income taxes and income taxes payable reported in the consolidated
balance sheets include the aggregate amounts for Manufacturing and Financial
Services.
Undistributed earnings of the Company's foreign subsidiaries amounted to
approximately $34.9 million at December 31, 1994. Those earnings are considered
to be indefinitely reinvested and, accordingly, no provision for U.S. federal
and state income taxes has been provided thereon. Upon distribution of those
earnings in the form of dividends or otherwise, the Company would be subject to
both U.S. income taxes (subject to an adjustment for foreign tax credits) and
foreign withholding taxes. Determination of the amount of unrecognized deferred
U.S. income tax liability is not practicable because of the complexities
<PAGE>
associated with its hypothetical calculation; however, unrecognized foreign tax
credit carryforwards would be available to reduce some portion of the U.S.
liability. Withholding taxes of approximately $3.5 million would be payable upon
remittance of all previously unremitted earnings at December 31, 1994.
--------------------------------------------------------------------------------
M. Business Segment Information
The Company operates predominantly in one business segment, that being the
design, manufacture, sale, leasing and short-term rental of materials handling
equipment. Revenues from unaffiliated customers are realized predominantly
through its North American Dealer Network.
For purposes of segment information, operating income is total revenue less
applicable operating expenses. In computing results from foreign operations,
exchange transaction gains and losses have been added or deducted. Domestic
transfers are at cost while foreign transfers are at prices to allow for
reasonable profit margins. Identifiable assets include investments in and
advances to unconsolidated investees which are discussed in Note C.
A summary of information about the Company's operation within the one business
segment follows:
(in Thousands)
--------------------------------------------------------------------------------
Product Mix 1994 1993 1992
--------------------------------------------------------------------------------
Total Revenues $229,547 $171,949 $148,733
Narrow and very
narrow aisle applications 57% 53% 51%
All other applications 20% 22% 21%
Repair and replace-
ment parts 17% 18% 20%
Leasing and
rentals 5% 6% 7%
Other income 1% 1% 1%
--------------------------------------------------------------------------------
Geographic Areas 1994 1993 1992
--------------------------------------------------------------------------------
United States:
Unaffiliated
customers $129,460 $98,436 $85,508
Interarea sales
and transfers* 20,136 15,785 13,959
---------------------------------------------
149,596 114,221 99,467
Canada:
Unaffiliated
customers 10,880 9,685 6,858
Interarea sales
and transfers 81,891 56,457 46,736
---------------------------------------------
92,771 66,142 53,594
Eliminations (12,820) (8,414) (4,328)
---------------------------------------------
Total
Revenues $229,547 $171,949 $148,733
=============================================
1994 1993 1992
--------------------------------------------------------------------------------
Operating Income:
United States $ 9,573 $ 3,782 $ 3,757
Canada 10,331 5,930 4,283
---------------------------------------------
$ 19,904 $ 9,712 $ 8,040
---------------------------------------------
Identifiable Assets:
United States $180,196 $165,740 $132,689
Canada 24,180 25,009 21,155
---------------------------------------------
$204,376 $190,749 $153,844
---------------------------------------------
*Includes sales of $11,082, $9,582 and $9,631 in
1994, 1993 and 1992, respectively, to unconsolidated
Canadian company at arms-length pricing.
<PAGE>
--------------------------------------------------------------------------------
N. Contingencies
The Company is currently defending a number of products liability and similar
lawsuits involving industrial accidents. The Company views these actions, and
related expenses of administration, litigation and insurance, as part of the
ordinary course of its business. The Company has a policy of aggressively
defending products liability lawsuits, which generally take several years to
ultimately resolve. A combination of self-insured retention and insurance is
used to manage these risks and management believes that the insurance coverage
and reserves established for self-insured risks are adequate. The effect of
these lawsuits on future results of operations cannot be predicted because any
such effect depends on the operating results of future periods and the amount
and timing of the resolution of these proceedings. The Company's Dealers
contribute to the funding of the Company's products liability program and, in
turn, the Company indemnifies the Dealers against products liability expense and
manages products liability claims.
The Company is also one of sixteen defendants in a private environmental
lawsuit. The plaintiffs have alleged that scrap metal purchased from the Company
was coated with certain solvents and/or cutting oils. Plaintiffs have the burden
of proving the nature and extent of the Company's contribution to the site, as
well as the burden of proving what portion of the material delivered to the site
was "hazardous" as that term is defined in the environmental statutes. The
Company is aggressively defending the claim and does not believe it is likely to
have a material adverse effect on the Company.
<PAGE>
--------------------------------------------------------------------------------
O. Quarterly Information (Unaudited)
(in Thousands, except per share figures)
<TABLE>
<CAPTION>
1994 Quarters First Second Third Fourth
<S> <C> <C> <C> <C>
Revenues $51,207 $58,577 $53,881 $65,882
Gross profit 11,972 13,473 12,052 16,208
Net income 2,004 2,464 2,153 3,106
Per share amounts:
Net income (Primary) .32 .39 .34 .49
Net income (Fully Diluted) .27 .32 .29 .39
Market price range:
High 17.38 20.00 21.75 21.25
Low 15.00 16.75 18.50 16.00
1993 Quarters First Second Third Fourth
Revenues $39,763 $40,648 $42,838 $48,700
Gross profit 8,936 8,913 9,388 11,298
Net income 647 1,030 1,434 1,895
Per share amounts:
Net income (Primary) .10 .16 .23 .30
Net income (Fully Diluted) .10 .16 .23 .30
Market price range:
High 17.62 18.81 19.76 17.38
Low 13.33 16.43 15.00 14.05
</TABLE>
The Raymond Corporation is traded on the NASDAQ National Market System (ticker
symbol RAYM). The common stock market prices indicated in the tables above
represent inter-dealer prices as reported by NASDAQ without retail markups,
markdowns or commissions and do not necessarily represent actual transactions.
<PAGE>
--------------------------------------------------------------------------------
Directors' Affiliations and Committees
Ross K. Colquhoun Director since 1984
President and Chief Executive Officer
The Raymond Corporation
Chairman of the Board,
G.N. Johnston Equipment Co. Ltd.
Toronto, Ontario, Canada
Chairman of the Board,
Associated Material Handling Industries, Inc.
Elmhurst, Illinois
Executive Committee, Chairman
Ex Officio Member of all Committees of the
Board of Directors except for the
Audit Committee and Executive Compensation Committee
James F. Matthews Director since 1994
President
The Matco Group, Incorporated
Vestal, New York
Audit Committee, Member
Executive Compensation Committee, Member
Human Resource Committee, Member
John E. Mott Director since 1974
Secretary
Raymond Industrial Equipment, Limited
Brantford, Ontario, Canada
Audit Committee, Member
Pension Plan Review Committee, Member
Michael R. Porter Director since 1989
President
Nexus Corporation
Northglenn, Colorado
Audit Committee, Member
Executive Compensation Committee, Member
Finance Committee, Member
Human Resource Committee, Member
George G. Raymond, Jr. Director since 1946
Chairman of the Board
The Raymond Corporation
Executive Committee, Member
Finance Committee, Member
Human Resource Committee, Member
Arthur M. Richardson Director since 1984
President
Richardson Capital Corporation
Rochester, New York
Finance Committee, Chairman
Executive Committee, Member
Pension Plan Review Committee, Member
Profit Sharing Retirement Plan, Trustee
401(k) Plan, Trustee
Dr. M. Richard Rose Director since 1979
Former President
Rochester Institute of Technology
Rochester, New York
Executive Committee, Member
Executive Compensation Committee, Chairman
Human Resource Committee, Chairman
Daniel F. Senecal Director since 1988
President and Chief Executive Officer
Werres Corporation
Rockville, Maryland
Pension Plan Review Committee, Member
401(k) Plan, Trustee
Profit Sharing Retirement Plan, Trustee
John V. Sponyoe Appointed Director 1995
President
Loral Federal Systems - Owego
Owego, New York
<PAGE>
Robert L. Tarnow Director since 1982
Chairman of the Board
Goulds Pumps, Inc.
Seneca Falls, New York
Audit Committee, Chairman
Executive Compensation Committee, Member
Human Resource Committee, Member
Lee J. Wolf Director since 1973
Consultant
The Raymond Corporation
Pension Plan Review Committee, Chairman
401(k) Plan, Chairman of Trustees
Profit Sharing Retirement Plan, Chairman of Trustees
Finance Committee, Member
Christian D. Gibson Director Emeritus since 1994
Consultant
The Raymond Corporation
<PAGE>
--------------------------------------------------------------------------------
Officers, Principal Subsidiaries and
External Services
Officers
George G. Raymond, Jr.
Chairman of the Board
Ross K. Colquhoun
President and
Chief Executive Officer
William B. Lynn
Executive Vice President
Heidi J. Bowne
Vice President - Human Resources
James W. Davis
Vice President - Engineering
Jerome R. Dinn
Vice President - Sales and Quality
Margaret L. Gallagher
Vice President - Marketing
James J. Malvaso
Vice President - Operations
Paul J. Sternberg
Vice President - General Counsel and Secretary
Patrick J. McManus
Treasurer
John F. Everts
Corporate Controller
William L. O'Mara
Assistant Treasurer
Cathy J. Hawkes
Assistant Secretary
Shareholder Inquiries
Communications concerning shareholder address changes,
stock transfers, changes of ownership and dividend reinvestment
statements should be directed to:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
212-936-5100
Principal
Subsidiaries
Dockstocker Corporation
Greene, New York
The Raymond Export Corporation
St. Thomas, U.S. Virgin Islands
Raymond Industrial Equipment, Limited
Brantford, Ontario, Canada
Raymond Leasing Corporation
Greene, New York
Raymond Sales Corporation
Greene, New York
Raymond Transportation Corporation
Greene, New York
R.H.E. Ltd.
Brantford, Ontario, Canada
External Services
Legal Counsel
Nixon, Hargrave, Devans & Doyle
Rochester, New York
Independent Auditors
Ernst & Young LLP
Syracuse, New York
Transfer Agent and Registrar
American Stock Transfer & Trust Company
Brooklyn, New York
Securities Listings
Common stock:
NASDAQ National Market System
ticker symbol RAYM
Subordinated convertible debentures:
NASDAQ Small-Cap Market
ticker symbol RAYMG
Design, Production & Composition:
The Raymond Corporation/Marketing Communications
JD Associates/Sandy Fancher
Warne Marketing & Communications
Photography:
L.A. Oliver Photography, Inc./Lou Oliver
The Raymond Corporation
Lithography:
Manhardt-Alexander, Inc.
<PAGE>
--------------------------------------------------------------------------------
The Raymond Dealer Network
Agromec
P.O. Box 10116-1000
400 MTS Oeste De La Plaza De La Uruca
San Jose, Costa Rica
Air-Mac Handling
& Storage Techniques, Inc.
6651 S. 216th Street, Bldg. D
Kent, WA 98032
206-872-3909
7911 N.E. 33rd Drive
Suite 260
Portland, OR 97211
503-249-8290
Allied Handling Equipment
Company, Ltd.
2335 W. Altorfer Drive
Peoria, IL 61615-1809
309-691-7620
1509 S.E. Cortina Drive
Ankeny, IA 50021-3903
515-964-0162
Andersen & Associates, Inc.
24333 Indoplex Circle
Farmington, MI 48335-2552
810-476-6500
3146 Broadmoor, S.E.
Grand Rapids, MI 49512
616-949-1452
4732 Northwest 165th Street
Hialeah, FL 33014-6423
305-625-0250
Arbor Handling Services, Inc.
2380 Maryland Road
Willow Grove, PA 19090
215-657-2700
Associated Material Handling
Industries, Inc.
343 Carol Lane
Elmhurst, IL 60126
708-832-7200
8820 Corporation Drive
Indianapolis, IN 46256
317-576-0300
4812 Investment Drive
Ft. Wayne, IN 46808
219-482-9556
Brauer Material Handling Systems, Inc.
206 Space Park North
Goodlettsville, TN 37072
615-859-2930
6331 Baum Drive
Knoxville, TN 37919
615-588-3566
Carolina Handling, Inc.
3101 Piper Lane
Airport Industrial Park
Charlotte, NC 28208
704-357-6273
2304 River Road
Piedmont, SC 29673
803-269-6360
2717 W. Highway 97
Wendell, NC 27591
919-365-9077
1215 Bonito Lane
Carolina Beach, NC 28428
910-458-5707
5404 Ainsworth Drive
Greensboro, NC 27410
910-852-5131
<PAGE>
2351 Lithonia Industrial Blvd.
Lithonia, GA 30058
404-484-2070
6022 Woodvale Court
Helena, AL 35080
205-664-8818
Central de Montacargas LTDA.
Av. de Las Americas No. 35-29
Santafe de Bogota, D.C.
Colombia
Distribuciones Molina S.A. de C.V.
Flamenco 1115
Guadalajara, Jalisco, Mexico 44910
011-52-3-610-2002
Echtman-Engineering Corp., Ltd.
P.O. Box 18015
Tel Aviv
Israel
011-972-3-921-9294
GARMAC, Inc.
"A" Street Corner "B" Street
Las Palmas Industrial Park
Catano, Puerto Rico 00962
809-788-3400
G.N. Johnston Equipment Co. Ltd.
1400 Courtney Park Drive
Mississauga, Ontario L5T 1H1
Canada
416-675-6460
No. 105, 581 Chester Rd.
Delta, British Columbia V3M 6G7
Canada
604-524-0361
7008J 5th Street S.E.
Calgary, Alberta T2H 2G3
Canada
403-258-1221
17424 - 105th Avenue
Edmonton, Alberta T5S 1G4
Canada
403-483-7051
#1 - 826 56th Street East
Saskatoon, Saskatchewan S7K 5Y8
Canada
306-933-3399
655 Henderson Drive
Regina, Saskatchewan S4N 6A8
Canada
306-721-2300
85 Keith Road
Winnipeg, Manitoba R3H 0H7
Canada
204-633-4364
1179 Newmarket Street
Ottawa, Ontario K1B 3V1
Canada
613-745-0744
181 Whitehall Drive
Markham, Ontario L3R 9T1
Canada
905-470-7170
5000 Levy Street
Ville St. Laurent, Quebec H4R 9Z7
Canada
514-956-0020
3200 Watt Street
Suite 105
Ste. Foy, Quebec G1X 4P8
Canada
418-650-1620
<PAGE>
725 Champlain Street
Suite 400
Dieppe, New Brunswick E1A 1P6
Canada
506-857-8766
61 Raddall Avenue
Dartmouth, Nova Scotia B3B 1T4
Canada
902-468-1457
Goldbell Engineering PTE Ltd.
14 Benoi Road
Singapore 2262
011-65-861-0007
Handling Systems, Inc.
5415 South 39th Street
Phoenix, AZ 85040
602-437-8071
740 E. Ajo Way
Tucson, AZ 85713
602-624-1895
Heubel Material Handling, Inc.
6311 N.E. Equitable Rd.
Kansas City, MO 64120
816-231-7780
2635 Metro Blvd.
St. Louis, MO 63043
314-739-5002
2324 S. 156th Circle
Omaha, NE 68130
402-330-9040
4100 Will Rogers Parkway
Suite 200
Oklahoma City, OK 73108
405-949-9001
Hillis Equipment Company, Inc.
23920 Mercantile Road
Beachwood, OH 44122-5987
216-464-8520
Hooper Handling, Inc.
5590 Camp Road
Hamburg, NY 14075
716-649-5590
1320 Buffalo Road
Suite 115
Rochester, NY 14624
716-328-0171
2820 W. 23rd Street
Suite #14
Erie, PA 16506
814-838-0343
LIFTO Industrial LTDA
Av. Victor Andrew, 585
18086-390-Sorocaba-SP,
Sao Paolo, Brazil
011-55-152-25-1999
Minnesota Supply Company, Inc.
6470 Flying Cloud Drive
Eden Prairie, MN 55344-3372
612-941-9390
Montacargas AC S.A. de C.V.
EJE 126 S/N
Zona Industrial Del Potosi
San Luis Potosi, S.L.P.
Mexico C.P. 78090
011-52-4-824-0290
Montacargas Aditamentos Y Refacciones S.A. de C.V.
Av. Caylan No. 5
Col. La Joya Iztacala
Tlalnepantla, Edo de Mexico C.P. 54160
011-52-5-388-1515
<PAGE>
Montacargas Aditamentos Y Refacciones Norte S.A. de C.V.
Calle Union # 219
Col. Chapultepec
San Nicolas de Los Garza
Monterrey, Nuevo Leon, Mexico 66450
011-52-8-352-7749
Nichiyu 'NYK' Australia Pty. Limited
Q.B.M. Pty. Ltd.
22-24 Elliot Road
P.O. Box 461
Dandenong, Victoria
Australia
3175
011-61-3-794-6555
29-31 Lysaght Street
Acacia Ridge, QLD., 4110
Australia
P.O. Box 6089
48 Newton Road
Wetherill Park, NSW, 2164
Australia
9 Cord Street
Dudley Park, S.A.
Australia 5008
N.J. Malin & Associates, Inc.
15870 Midway Road
Addison, TX 75244
214-458-2680
6630 Roxburgh Drive
Suite 150
Houston, TX 77041
713-896-4183
4322 Tejasco Drive
San Antonio, TX 78218
210-805-8282
4757 River Rd.
Jefferson, LA 70121
504-733-8445
1057 Doniplan Park Circle
Suite A
El Paso, TX 79922
915-581-9180
N.J. Malin de Mexico S.A. de C.V.
Paseo Triunfo de La Republica #3304
Edificio Cuadrante Suite 305
CD Juarez Chihuahua 32330
Mexico
Oleg B. Malikov
Foreign Trade Representative
215, Korpus 1, 27, Prospect
Aviaconstructorov
Saint Petersburg, 197373
Russia
011-7-812-168-80-94
Pacific Machinery, Inc.
Division of Theo. H. Davies & Co. Ltd.
94-025 Farrington Highway
Waipahu, HI 96797-2299
808-677-9111
456 Kalanianaole Avenue
Hilo, HI 96720-4704
808-961-3437
470 S. Hana Highway
Kahului, Maui, HI 96732-2316
808-877-6538
3651 Lala Road
Lihue, Kauai, HI 96766
808-245-4057
196 E. Harmon Industrial Park Road
Harmon, Guam 96911-4407
011-671-646-9118
<PAGE>
Pengate Handling Systems, Inc.
6A Interchange Place
York, PA 17402
717-764-3050
Mahaffey Equipment Company Division
650 Alpha Drive
R.I.D.C. Industrial Park
Pittsburgh, PA 15238-2891
412-782-5500
Pengate Handling Systems
of New York, Inc.
Royce W. Day Company Division
Grove Street
Voorheesville, NY 12186-9713
518-765-3331
Raymond Handling Services Division
6650 Kirkville Road
East Syracuse, NY 13057
315-437-7108
Raymond Handling Concepts Corporation
38507 Cherry Street, Suite A
Newark, CA 94560
510-745-7500
1418-W N. Market Blvd., Suite 100A
Sacramento, CA 95834
916-928-1400
4974 North Fresno Street
Suite 566
Fresno, CA 93726
209-264-7500
1315 Greg Street, Suite 112
Sparks, NV 89431
702-356-8383
4555 N. Pershing Avenue
Suite 33-111
Stockton, CA 95207
209-474-7500
Raymond Handling Technologies, Inc.
40 Northfield Avenue
Edison, NJ 08837
908-417-1100
Ring Lift
Division of Ring Power Corporation
8060 Phillips Highway
Jacksonville, FL 32256
904-448-5438
6202 North U.S. 301/441
Ocala, FL 34475
904-732-4600
4760 Capital Circle, N.W.
Tallahassee, FL 32303-7217
904-562-2121
1401 U.S. Highway 301 North
Tampa, FL 33619-2625
813-620-1337
803 Taft-Vineland Road
Orlando, FL 32824-2067
407-857-1973
Robert Abel & Co., Inc.
195 Merrimac St.
Woburn, MA 01888
617-935-7860
Shaw Material Handling Systems, Inc.
3025 Kate Bond Blvd.
Bartlett, TN. 38134
901-386-1081
<PAGE>
2201 Brookwood Drive, Suite 108
Little Rock, AR 72202
501-663-5108
814 South Bloomington
Lowell, AR 72745
501-770-2156
Stoffel Equipment Company, Inc.
7764 North 81st Street
Milwaukee, WI 53223
414-354-7500
4905 Voges Road
Unit #3
Madison, WI 53704
608-838-4181
2815 South Packerland
Suite 21
Green Bay, WI 54313
414-496-5814
Storage Concepts, Inc.
4350 Indeco Court
Cincinnati, OH 45241
513-891-7290
5270 Krieger Court
Columbus, OH 43228
614-878-9271
1804 Production Drive
Louisville, KY 40299
502-491-2237
Suplidora de Repuestos C.A.
Colinas de Las Acacias
Avenida Tamanaco No. 23
Apartado 40018
Caracas 1040-A Venezuela
Welch Equipment Company, Inc.
6090 East 39th Avenue
Denver, CO 80207
303-393-8181
634 Elkton Drive
Colorado Springs, CO 80907
719-599-4497
4501 Bogan Avenue, N.E.
Building A, Suite 3
Albuquerque, NM 87109
505-881-9612
Welch Equipment Company, Inc. (Utah)
2170 South 3140 West, Unit A
West Valley City, Utah 84119
801-872-9289
Werres Corporation
803 E. South Street
Frederick, MD 21701
301-620-4000
7449 Whitepine Road
Richmond, VA 23237
804-275-6500
6952 Malinda Road
Salem, VA 24153
703-380-2384
Womack Material Handling Systems, Inc.
71 North Plains Industrial Rd.
Wallingford, CT 06492
203-265-2887
<PAGE>
35 Tec Street
Hicksville, NY 11801
516-681-7050
W.T. Billard, Inc.
10261 Matern Place
Santa Fe Springs, CA 90670-3708
310-944-8067
12255 Kirkham Road
Poway, CA 92064
619-679-1800
121 Industrial Parkway
Suite 106
Henderson, NV 89015
800-669-5438
605 S. Milliken Ave.
Suite E
Ontario, CA 91761
909-390-8111
<PAGE>
Exhibit 21
SUBSIDIARIES OF THE RAYMOND CORPORATION (a)
<TABLE>
<CAPTION>
Percentage of State or Other
Voting Securities Jurisdiction in
Owned Which Organized
---------------- -----------------
<S> <C> <C>
Dockstocker Corporation 100(b) New York
(Subsidiary of Raymond Sales Corporation)
Heubel Material Handling, Inc. 94(c) Missouri
(Subsidiary of Raymond Sales Corporation)
The Raymond Export Corporation 100(b) U.S. Virgin Islands
Raymond Handling Concepts Corporation 74(c) California
(Subsidiary of Raymond Sales Corporation)
R.H.E. Ltd. 100(b) Canada
Raymond Handling Technologies, Inc. 100(c) New Jersey
(Subsidiary of Raymond Sales Corporation)
Raymond Industrial Equipment, Limited 100(b) Canada
(Subsidiary of R.H.E. Ltd.)
Raymond Leasing Corporation 100(b) Delaware
Raymond Production Systems Corporation 100(b) California
Raymond Rental Corporation 100(b) New York
(Subsidiary of Raymond Leasing Corporation)
Raymond Sales Corporation 100(b) New York
Raymond Transportation Corporation 100(b) New York
Welch Equipment Company, Inc. 100(c) Colorado
(Subsidiary of Raymond Sales Corporation)
Welch Equipment Company, Inc. (Utah) 100(c) Utah
(Subsidiary of Raymond Sales Corporation)
</TABLE>
(a) Unless otherwise noted, the Registrant is the Parent of the above
listed company.
(b) Included in consolidated financial statements.
(c) Included in consolidated financial statements on an equity basis.
<PAGE>
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of The Raymond Corporation of our report dated February 10, 1995, included in
the 1994 Annual Report to Shareholders of The Raymond Corporation.
Our audits also included the financial statement schedules of The Raymond
Corporation listed in Item 14(a). These schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedules referred to above,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects to the information set forth therein.
We also consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-63806) pertaining to The Raymond Corporation Savings Plan and
in the Registration Statement (Form S-3 No. 33-71480) pertaining to The Raymond
Corporation 6.5% Convertible Subordinated Debentures Due 2003 of our report
dated February 10, 1995, with respect to the consolidated financial statements
incorporated herein by reference, and our report included in the preceding
paragraph with respect to the financial statement schedules included in this
Annual Report (Form 10-K) of The Raymond Corporation.
/s/ Ernst & Young LLP
Syracuse, New York
March 27, 1995
<PAGE>
Exhibit 24
POWER OF ATTORNEY
The undersigned, directors of The Raymond Corporation ("Corporation"),
hereby constitute and appoint Paul J. Sternberg and William B. Lynn, or either
of them, their respective true and lawful attorneys and agents, each with full
power and authority to act as such without the other, to sign the name of the
undersigned to the Corporation's fiscal 1994 Annual Report on Form 10-K, and to
any amendment thereto, to be filed with the Securities and Exchange Commission
under the Securities Exchange Act of 1934 and the related rules and regulations
thereunder, the undersigned hereby ratifying and confirming all that said
attorneys and agents, of either one of them, shall do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned have signed and delivered these
presents as of this 4th day of March, 1995.
/s/ Ross K. Colquhoun /s/ Arthur M. Richardson
--------------------- -------------------------------
Ross K. Colquhoun, Arthur M. Richardson, Director
President, Chief Executive
Officer and Director
/s/George G. Raymond, Jr. /s/ Dr. M. Richard Rose
--------------------- -------------------------------
George G. Raymond, Jr. Dr. M. Richard Rose, Director
Chairman of the Board
/s/James F. Matthews /s/ Daniel F. Senecal
--------------------- -------------------------------
James F. Matthews, Director Daniel F. Senecal, Director
/s/ John E. Mott
--------------------- -------------------------------
John E. Mott, Director Robert L. Tarnow, Director
/s/ Michael R. Porter /s/ Lee J. Wolf
--------------------- -------------------------------
Michael R. Porter, Director Lee J. Wolf, Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
December 31, 1994 Form 10-K and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 5,423
<SECURITIES> 0
<RECEIVABLES> 33,896
<ALLOWANCES> 986
<INVENTORY> 30,911
<CURRENT-ASSETS> 77,594<FN>
<PP&E> 47,131
<DEPRECIATION> 30,110
<TOTAL-ASSETS> 204,376
<CURRENT-LIABILITIES> 30,977<FN>
<BONDS> 81,653
<COMMON> 9,546
0
0
<OTHER-SE> 71,454
<TOTAL-LIABILITY-AND-EQUITY> 204,376
<SALES> 217,832
<TOTAL-REVENUES> 229,547
<CGS> 169,071
<TOTAL-COSTS> 173,023
<OTHER-EXPENSES> 36,620
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,950
<INCOME-PRETAX> 16,155
<INCOME-TAX> 6,428
<INCOME-CONTINUING> 9,727
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,727
<EPS-PRIMARY> 1.54
<EPS-DILUTED> 1.26
<FN>
Reflects current portion of Manufacturing operations only as accounts
for Financial Services are presented in a non-classified format
</FN>
</TABLE>
